Rockpool Acqui Regulatory News (ROC)

26 Aug 2005 07:00

Roc Oil Company Limited26 August 2005 26 August 2005 ROC OIL COMPANY LIMITED ("ROC") STOCK EXCHANGE RELEASE STRONG FIRST-HALF 2005 RESULT KEY FINANCIAL POINTS • Record $61.3 million net profit after income tax, largely due to the sale of Saltfleetby Gas Field, effective 31 December 2004, which resulted in a first-half (1H2005) profit after tax of $80.7 million. The result, which represents a $74.2 million turnaround compared to the $12.9 million loss for 1H2004, includes $13.4 million exploration expenditure expensed and written off. • Final investment decisions made for the Cliff Head Oil Field, offshore Western Australia and immediately after half year end, the Blane and Enoch fields in the North Sea. • Development of the Cliff Head and Chinguetti oilfields progressed on schedule with first oil expected during 1Q2006 at combined production rates of 5,000-8,000 BOPD net to ROC. • Strong financial position maintained with cash and receivables of $154.9 million and no debt, compared to 30 June 2004 cash and receivables of $139.3 million and debt of $20.1 million. • As a result of the $109 million Saltfleetby Gas Field sale, 1H2005 production and sales revenue were substantially lower compared to 1H2004: 38 BOEPD compared to 3,072 BOEPD and $0.4 million compared to $19.0 million, respectively. • Development expenditure for the half year of $30 million, primarily relating to the Cliff Head and Chinguetti oilfields, was substantially higher than the $0.7 million expended in the corresponding period last year. • Exploration expenditure for 1H2005 was moderately higher than the corresponding period last year: $14.9 million compared to $12.4 million. KEY ACTIVITIES AUSTRALIA • Development - Cliff Head Oil Field (ROC: 37.5% and Operator) The Final Investment Decision was made by the WA-286-P Joint Venture in March 2005. The budgeted cost to develop the 14 MMBO field is $227 million including contingencies. At the end of 1H2005 the project remained on budget and schedule for first oil in 1Q2006. • Exploration - Carnarvon and Perth Basins ROC acquired a 20% interest in the BHP Billiton-operated WA-351-P, located in the deepwater Carnarvon Basin where the high risk/high reward Jacala-1 exploration well is planned to be drilled during 4Q 2005. Two exploration/appraisal wells were drilled in 1H2005 in the Perth Basin offshore Western Australia; both were plugged and abandoned as dry holes. WEST AFRICA • Development - Chinguetti Oil Field, PSC B (Exclusive Exploitation Authorisation), Offshore Mauritania (ROC: 3.25%, Operator: Woodside) The project remains on schedule for start up in 1Q2006 with good progress achieved on the drilling and completion programme and fit out of the Floating Production, Storage and Offloading ("FPSO") facility. Due to changes in the scope of drilling operations Phase 1 project costs are expected to be in the order of 10% higher than the US$625 million budget. • Appraisal - Tiof Oil Field, PSC B, Offshore Mauritania (ROC: 3.693%, Operator: Woodside) The Tiof-6 appraisal well was drilled and production tested, and flowed at rates up to 12,400 BOPD before being suspended as a potential future oil producer. • Exploration - Cabinda South Block, Onshore Angola (ROC: 60% and Operator) The combined 2D and 3D seismic survey commenced; the first onshore exploration activity in Angola for more than 30 years. UK • Development - Blane Oil Field and Enoch Oil and Gas Field, North Sea (ROC unitised interests 12.5% and 12.0% respectively, Operator: Paladin) Immediately after end 1H2005, the Blane and Enoch fields in the North Sea were approved for development with gross costs budgeted to be in the order of £165 million and £75 million respectively. • Exploration - Onshore (ROC: 100% and Operator) In January, the Errington-1 exploration well was suspended as a tight gas discovery. After further evaluation of well data a decision was made to plug and abandon the well. CHINA • Pre-development - Wei-12-8 West Oil Field, Block 22/12, Beibu Gulf (ROC: 19.6% after Government back-in and Operator) Work continued with regard to the possible development of the field and commercial negotiations with the relevant government authorities. CORPORATE HEDGING Two oil price hedging contracts were entered into covering approximately 25% ofROC's share of the total forecast production from Chinguetti and Cliff Headfields for the relevant periods: 1. Swap arrangement for the 21-month period from 1 April 2006 to 31 December 2007 in relation to 0.9 MMBO at a weighed average Brent oil price of US$49.58 per barrel. 2. Put Options over 200,000 barrels at US$40 per barrel Brent for the period 1 March 2006 to 31 December 2006. A-IFRS Consistent with Australian Accounting Standards ROC adopted A-IFRS. The changehas no effect on ROC's cash flow and business practices or activities. ARDMORE During 1Q2005, ROC invested $4.3 million in the Ardmore Project in the UK NorthSea through the provision of secured funds to Acorn North Sea Limited ("ANSL").On 1 June 2005, without any further investment ROC requested that anAdministrative Receiver be appointed to ANSL due to concerns about the futureviability of the Ardmore project. As a result, ROC expects to recover towards $3million of its total investment of $11 million of which $1.8 million had beenreceived by 30 June 2005. The balance is anticipated to be received during2H2005. CEO's COMMENTS Commenting on the financial results, Dr John Doran stated that, "As a consequence of the strong 1H2005 financial result, largely driven by thevery profitable sale of the Saltfleetby Gas Field at the end of 2004, ROC wasable to self-fund, with a considerable degree of comfort, substantialdevelopment expenditure at Chinguetti and Cliff Head as well as a globalexploration and appraisal drilling programme which will continue well into 2006. ROC's activities during 1H2005 illustrate the breadth and depth of the Company'sportfolio and the benefits of the balanced strategy that it is implementing withregard to its four core areas: Australia, West Africa, UK and China. With fouroilfields being developed in three of those areas and an active explorationprogramme, which includes a number of potential company-makers, underway in allfour areas, the scene has been set for a very interesting future." For a copy of ROC's complete Half Yearly Report, please see our website:http://www.rocoil.com.au/Pages/Company_Reports/company-reports.html Michelle Manook For further information please contact:General Manager - Corporate Affairs Dr John Doran on Tel: +61-2-8356-2000 Fax: +61-2-9380-2635 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