Rockpool Acqui Regulatory News (ROC)

29 Apr 2005 07:01

Roc Oil Company Limited29 April 2005 ROC OIL COMPANY LIMITED (ABN 32 075 965 856) REPORT TO SHAREHOLDERS Activities for the Quarter Ended 31 March 2005 SUMMARY Key corporate events occurred during the Quarter which radically improved theCompany's already strong balance sheet and set the stage for consistentproduction growth during the next several years. To a large measure thesechanges were achieved by the very profitable sale of the Saltfleetby Gas Fieldand the Final Investment Decision taken with regard to the Cliff Head Oil Field.Therefore, quarter-on-quarter comparisons of the Company's production and salesrevenue should only be undertaken with reference to consequential changes in theCompany's cash and receivables position over the same period. Because of ROC'sstrategy of monetising mature reserves and production, the former has beengreatly reduced while the latter has been greatly increased; to the point whereit provides a very solid financial framework for ROC's future. -------------------------------------------------------------------------------- HIGHLIGHTS Cash and receivables increased to ROC's cash and receivables increased to aa record $205 million. record $205 million as at January 2005, primarily as a result of the £44 million/ $109 million sale of the Saltfleetby Gas Field, which generated an after tax profit estimated on the basis of AGAAP to be in the order of $70 million. Debt remained at zero. The corresponding reduction in Production during the Quarter reduced fromproduction is viewed as temporary. 2,808 BOEPD to 29 BOEPD reflecting the impact of the sale of the Saltfleetby Gas Field. This reduction is considered by the Company to be a temporary situation which will be rectified within 12 months when ROC expects to be producing between 5,000 BOPD and 10,000 BOPD from fields currently under development. Final Investment Decision made A two well appraisal/development drillingwith regard to Cliff Head Oil programme at Cliff Head provided mixedField Development following results. Cliff Head 5 was a dry hole thatcompletion of FEED and mixed came in 56 m low to prognosis while theappraisal/development drilling high angle Cliff Head 6 Development wellresults drilled 93 m of gross oil pay with a 70% net to gross. The well was suspended for future oil production. Subsequent to the two wells and the completion of Front End Engineering and Design ("FEED"), a Final Investment Decision ("FID") regarding the Cliff Head Oil Field was taken in March 2005. The anticipated cost of developing the 14 MMBO field is $227 million. Development continued at the Development activities continued at theChinguetti Oil Field. Chinguetti Oil Field, offshore Mauritania, with a continuing oil production and water injection drilling programme occurring in parallel with work on production and sub-sea facilities. The latest round of appraisal Tiof-6 encountered about 124 m of grossdrilling concluded at the Tiof Oil oil pay with a net pay thicknessField, with a maximum flow rate of comfortably within the 10-40% range12,400 BOPD from Tiof-6. established by other wells in the area. This areally extensive field is yet to be fully defined, but its potential for commercial development was enhanced when Tiof-6 flowed oil at rates up to 12,400 BOPD. In the offshore Perth Basin, a dry Prior to being plugged and abandoned, theexploration well was drilled Hadda-1 exploration well encountered 20 m of tight sands with oil shows in the offshore Perth Basin. Tight gas sands encountered, The Errington-1 exploration well inonshore UK. northern England encountered approximately 100 net metres of gas shows in low porosity sands. The results will be reviewed in more detail in order to determine whether or not the well would be amenable to a fraccing programme. Pre-development work continued on Both the Blane Oil Field and Enoch Oil andtwo fields in the North Sea. Gas Field continue to be subject to pre-development studies designed to allow the relevant joint ventures to consider, and if appropriate, approve, the respective field developments during mid-2005. Activity upsurge onshore Angola. Ahead of a substantial seismic survey, planned to start in 2Q 2005, there was an acceleration of ROC's activities in Angola, including the appointment of a Luanda-based General Manager. Preparations for awarding the seismic contract were finalised. This seismic survey will represent the first oil exploration activity onshore Angola for more than 30 years. More equity acquired offshore ROC's interest in the H Blocks in the deepEquatorial Guinea. water Rio Muni Basin offshore Equatorial Guinea increased from 15% to 18.75% for no additional consideration. ROC's original 15% will be free carried through the next well in the area which is scheduled to be drilled in late 2005, subject to rig availability. Placement at a premium boosted The Company raised $19.8 million bycash reserves by almost $20 placing to two European institutionalmillion. investors, 9.9 million shares at $2.00 share; a premium to the then prevailing share price. The Company entered into its first The Company entered into swap arrangementsoil hedging programme, albeit only over a 21 month period from 2Q 2006 to 4Qfor a small portion of anticipated 2007 with regard to a total of 0.9 MMBO,production.. representing less than 25% of ROC's anticipated production, from the Chinguetti and Cliff Head oil fields during that period. The weighted average of the Brent oil crude swaps is US$49.58/ BBL. A 34 well drilling programme was A 34 well drilling programme for theannounced. balance of 2005, including at least 15 exploration and appraisal wells, was announced in February. The total net cost to ROC of the entire programme is in the order of $50 million. Subsequent to Quarter-end, 7 In April 2005 it was announced that ROCmillion acres of exploration had entered into an Option Agreement withacreage were optioned onshore regard to 7 million acres of the BeetalooAustralia. Basin in the Northern Territory, onshore Australia. The $65,000 option fee provides ROC with an exclusive entitlement to earn equity in the area, up to a total of 87.5%, via a staged seismic and drilling programme. For a copy of ROC's complete 1Q 2005 Report, please see our website:http://www.rocoil.com.au/Pages/Company_Reports/company-reports.html For further information please contact: Dr John Doran Chief Executive Officer Tel: +61 (0)2 8356 2000 Fax: +61 (0)2 8356 2635 Email: jdoran@rocoil.com.au or visit ROC's website: www.rocoil.com.au Dr Kevin Hird General Manager Business Development Tel: +44 (0)207 586 7935 Fax: +44 (0)207 722 3919 Email: khird@rocoil.com.au Nick Lambert Bell Pottinger Corporate & Financial Tel: +44 (0)207 861 3232 This information is provided by RNS The company news service from the London Stock Exchange