Rockpool Acqui Regulatory News (ROC)

31 Aug 2006 07:03

Roc Oil Company Limited31 August 2006 31 August 2006 ROC OIL COMPANY LIMITED ("ROC") STOCK EXCHANGE RELEASE PRODUCTION BOOST FOR FIRST HALF 2006 RESULT KEY POINTS 1. FINANCIAL • 321,727 BBLS produced due to start up of the Cliff Head Oil Field, offshore Western Australia and the Chinguetti Oil Field, offshore Mauritania compared to 6,818 BBLS for 1H 2005; • $17.6 million net sales revenue due to increased production compared to $0.4 million for 1H 2005; • $4.1 million trading profit compared to $0.1 million in 1H 2005; • $3.1 million earnings before interest, tax, amortisation and exploration expense compared to $54.6 million in 1H 2005 which mainly reflected the sale of the Saltfleetby Gas Field; • $22.2 million net loss after income tax which includes $26.6 million exploration expensed compared to $56.3 million profit in 1H 2005 mostly attributed to the sale of the Saltfleetby Gas Field; • $66.2 million development expenditure, mainly related to the Cliff Head and Blane oilfields, compared to $30.0 million in 1H 2005; • $35.8 million exploration and appraisal expenditure mainly due to seismic in Angola and wells offshore Australia and offshore China compared to $14.9 million in 1H 2005; • $45.3 million cash assets compared to $66.4 million in 1H 2005; • $35.0 million interest bearing liabilities in relation to the initial deposit for the acquisition of Apache China Corporation LDC, compared to nil in 1H 2005. 2. CORPORATE • Share Placement 28,000,000 fully paid ordinary shares, representing 14.9% of the then issuedshare capital, were placed to UK institutions at $2.71/share, raising $76.0million before expenses. • Acquisition of Apache China Corporation LDC Agreed to acquire 24.5% operated interest in the Zhao Dong Block ("Block"),Bohai Bay, offshore China, for US$260 million through the purchase of 100% ofthe shares of Apache China Corporation LDC. The transaction was 100% financedthrough a 12-month loan facility from the Commonwealth Bank of Australia. At 30June 2006 the Block was producing about 30,000 BOPD gross from two fields withgross proved and probable remaining reserves of approximately 61 MMBO. • Resolution of Mauritanian Dispute In June 2006, the relevant joint venturers signed revised Production SharingContracts ("PSC") for offshore zones A, B, C2 and C6. As a consequence of theserevisions the PSC Area B co-venturers collectively paid a US$100 million (netROC: US$3.7 million/$5.0 million) production bonus to the MauritanianGovernment. 3. PRODUCTION • Cliff Head Oil Field, WA-31-L, Offshore Western Australia (ROC: 37.5% & Operator) Production commenced 1 May 2006. Initial production from three of the sixdesignated production wells was about 8,500 BOPD. The overall budget for theproject increased by a further 15% from $285 million to $327 million (ROC net:$123 million) due to delays related to the drilling and completion of wells, andincreased construction and commissioning costs. • Chinguetti Oil Field, Offshore Mauritania (ROC: 3.25%) Production commenced 24 February 2006. At 30 June 2006, the field was producingbelow expectations at about 34,000 BOPD. 4. DEVELOPMENT • Blane Oil Field, North Sea (ROC: 12.5%) Development drilling commenced in May 2006 and was continuing at 30 June 2006.The project cost estimate increased by 25% from £165 million/$413 million to£206 million/$515 million (ROC net: $64 million). • Enoch Oil & Gas Field, North Sea (ROC: 12.0%) Development activities continued during the period. The project cost estimateincreased by 24% from £75 million/$188 million to £93 million/$233 million (ROCnet: $28 million). 5. EXPLORATION • A total of four exploration wells and one appraisal well, drilled in four countries, resulted in a significant oil discovery offshore China. • Wei 6-12 South Oil Field, Beibu Gulf, Block 22/12, Offshore China (ROC: 40.0% & Operator) The Wei 6-12S-1 well encountered 95 metres of net hydrocarbon pay, mainly oil,in generally good to excellent reservoirs. Three intervals were tested resultingin a total stabilised oil flow rate of 5,750 BOPD. Two appraisal sidetrack wellscompleted, subsequent to the period, confirmed Wei 6-12 South as a significantoil discovery. • Onshore Angola (ROC: 60% & Operator) A high resolution aeromagnetic survey was completed covering the entire CabindaSouth Block. Line clearing began for a 254 sq km 3D seismic acquisitionprogramme which commenced in 3Q 2006. 6. CEO COMMENTS Commenting on the half-yearly results, Dr John Doran stated: "During the first half of 2006 ROC underwent a major transformation from pureexplorer to oil producer with exploration upside. The magnitude of change meansthat the percentage comparisons between the key financial indices for the periodunder review and those for the corresponding period last year are largelyirrelevant. The period started with negligible production. By 30 June 2006 the Company wasproducing approximately 4,350 barrels of oil per day from the Cliff Head OilField, offshore Western Australia and the Chinguetti Oil Field, offshoreMauritania. A day later the Company's production effectively shot up to about12,000 barrels of oil per day as a result of the acquisition of a 24.5% operatedinterest in the Zhao Dong Block, offshore China, which was completed in Augustwith a 1 July 2006 effective date. This transaction represents a verysignificant diversification of ROC's production assets. In January 2006, the exploration focus was largely on Angola. By the end of theperiod it had broadened to include China, as a result of a significant offshoreoil discovery in that country. Interests offshore China and onshore Angolaprovide ROC with a significant presence in three petroleum systems which are -to use a terribly overworked phrase - truly world class. This balance between discovered and acquired production and high potentialexploration is an integral part of ROC's strategy, as is the management of riskthrough diversification. This latter strategic element has served the Companywell, particularly during the first half of 2006." For a copy of ROC's complete Half Yearly Report and Accounts see ROC's website.(http://www.rocoil.com.au/Public/Announcement/2006/Half_Yearly_Report_and_Accounts_310806.aspx) Michelle Manook For further information pleaseGeneral Manager - Corporate Affairs contact: 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