31 Jan 2013 07:54
RED EMPEROR RESOURCES NL - Quarterly Activities and Cashflow ReportRED EMPEROR RESOURCES NL - Quarterly Activities and Cashflow Report
PR Newswire
London, January 31
* as at 31 December 2012
The Board of Red Emperor Resources NL (Red Emperor or the Company) is pleasedto provide the following commentary and Appendix 5B for the period ending 31December 2012.
Puntland ProjectsDuring the quarter Red Emperor's JV partner and operator of its PuntlandProject, Horn Petroleum Corp (TSXV: HRN), demobilized the drilling rig andassociated equipment and completed restoration of both drilling locations.
Efforts are now focused on making preparations for a seismic acquisitioncampaign in the Dharoor PSA which will include a regional seismicreconnaissance grid in the previously unexplored eastern portion of the basinas well as prospect specific seismic to delineate a drilling candidate in thewestern portion of the basin where an active petroleum system was confirmed bythe recent drilling at the Shabeel-1 and Shabeel North-1 locations. The focusof the Dharoor seismic program will be to delineate new structural prospectsfor the upcoming drilling campaign.
Based on the encouragement provided by these two Shabeel wells, the Operator(Horn Petroleum Corporation) and its partners, Range Resources and Red Emperor,have entered into the next exploration period in both the Nugaal and DharoorValley Production Sharing Contracts ("PSCs") which carry a commitment to drillone well on each block within an additional 3 year term. The currentoperational plan would be to contract a seismic crew to acquire additional datain the Dharoor Valley block and to hold discussions with the PuntlandGovernment to gain access regarding drill ready prospects in the Nugaal Valleyblock.
Now the Joint Venture has formally entered into next phase of the Dharoor andNugaal Valley Production Sharing Agreements ("PSAs"), it is important to notethat Red Emperor has earned its 20% interest in the two projects and remainsfully funded for the current program.
Georgia Project
During the quarter the Joint Venture announced the completion of theacquisition of a 200km 2D seismic program. The majority of this recent seismicwas acquired over Block VIb to firm up leads identified in the previous 410km2D seismic program and tie to two gas wells, which were drilled and suspendedin Soviet times.
Two lines were also acquired over the site of the Mukhiani well, the firstexploration well drilled in Block VIa. Red Emperor has been advised thatprocessing is under way and results of the interpretation is expected to becompleted in Q1 2013, with the joint venture confident that it will then haveassembled the requisite amount of seismic and geological information to enablethe JV to identify revised drillable targets and attract potential farm inpartners if desired.
The JV continues to work towards the development of the CBM and conventionalpotential around the Tkibuli– Shaori Coal Field ("Tkibuli"). The GeorgianIndustrial Group ("GIG") has made available a significant amount of informationincluding a detailed geological model based on 339 wells drilled in the region,many of which vented methane. The Joint Venture is looking to finaliseagreements with GIG for the development of Tkibuli in the current quarter withthe potential for third party financing being available to fund a pilotproduction program. It is envisaged that following completion of the currenttechnical and economic analysis, between three and four pilot production welllocations will be identified with drilling expected to commence in 2H 2013.
Corporate
During the quarter the Company held its Annual General Meeting and allresolutions were passed on a show of hands.
For and on behalf of the Board
Greg BandyExecutive DirectorAppendix 5B Summary - Consolidated Statement of Cashflow
Current Year to Date Quarter (12 months) $A'000 $A'000) Cash flows related to operating activities Receipts from product sales and related debtors - - Payments for: * exploration and evaluation (1,831) (6,956) * development - - * production - - * administration (367) (661) Dividends received - - Interest and other items or a similar nature 207 245received Interest and other costs of finance paid - - Income taxes paid - - Other Receipts (refunds) 2 2 Net operating Cash Flows (1,989) (7,370) Cashflows related to investing activities Payments for the purchase of: * prospects - - * equity investments - - * investments - - Proceeds from the sale of: * prospects - - * equity investments - - * investments asset acquisition escrow acc - 982 Loans to other entities - - Loans repaid by other entities - - Proceeds from underwriting - - Net investing cash flows - 982 Cash flows related to financing activities Proceeds from raisings - 2,250 Proceeds from sale of forfeited shares - - Proceeds from borrowings - - Repayment of borrowings - - Dividends paid - - Costs associated with issue of shares - (135) Net financing cash flows - 2,115 Net increase / (decrease) in cash held (1,989) (4,273) Cash at the beginning of the quarter / year to 15,760 18,044date Exchange rate adjustments - - CASH AT THE END OF THE QUARTER 13,771 13,771For further information please visit www.redemperorresources.com or contact:
Red EmperorGreg Bandy +61 8 9225 2826Rebecca Sandford +44 20 7025 7040Fox-Davies Capital Limited (Nominated Adviser and Broker)Susan Walker / Simon Leathers
+44 20 3463 5000Daniel Fox-Davies / Richard Hail +44 20 3463 5000Tavistock CommunicationsLydia Eades/ Ed Portman +44 20 7920 3150BackgroundRed Emperor Resources NL (ASX: RMP | AIM: RMP) is a natural resourcesexploration company with interests in the frontier state of Puntland, Somaliaand the Republic of Georgia.
* In Puntland, Red Emperor holds a 20% working interest in two licences encompassing the highly prospective Dharoor and Nugaal valleys. These two exploration areas cover over 36,000km2. Horn Petroleum, the operator and 60% interest holder, has completed a two well program with the JV having now entered the next phase of the two Production Sharing Contracts across both blocks. * In In the Republic of Georgia, Red Emperor has a 20% working interest in onshore blocks VIa and VIb, covering approx. 6,500km2. Joint Venture partner Range Resources Limited (ASX: RRS | AIM: RRL) previously funded a 410km 2D seismic program with independent consultants RPS Energy identifying 68 potential structures containing an estimated 2.045 billion barrels of undiscovered oil–in–place (on a mean 100% basis) with the first of two conventional exploration wells (Mukhiani–1) having spudded in July 2011. The Joint Venture is now focussing on a revised development strategy that will target lowcost, shallow appraisal drilling of the contingent resources around the Tkibuli–Shaori ("Tkibuli") coal deposit, which straddles the central sections of the two blocks.Competent Person
All of the technical information, including information in relation to reservesand resources that is contained in this document has been reviewed internallyby the Company's technical consultant, Mr Alexander Parks. Mr Parks is aPetroleum Engineer who is a suitably qualified person with over 15 years'experience in assessing hydrocarbon reserves and has reviewed the release andconsents to the inclusion of the technical information.