Tomco Energy Regulatory News (TOM)

31 Mar 2008 08:00

TomCo Energy PLC31 March 2008 TOMCO ENERGY PLC ('TomCo' or 'the Company') PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2007 TomCo (TOM.L), the oil mining and production company, today announces its Preliminary Results for the year ended 30 September 2007. HIGHLIGHTS • Successful launch of TomCo Energy plc on AIM following completion of the acquisition of The Oil Mining Company Inc in January 2007 which owns oil shale leases covering 2,918 acres in Utah, estimated by SRK Consulting to contain some 230 million barrels of oil • Raised £1.77 million in new equity for investment in conventional oil assets • During the year, acquired interest in 7 drilling participations and acquired rights to participate in 17 new drilling prospects in US • Gross production averaging 11.46 barrels per day from PDP's Stephen Komlosy, Chairman of TomCo, commented: 'The period under review covers a period during which the Company has beentransformed: the Board's strategy, that of holding the oil shale assets untilcommercial production is economical, whilst pursuing exposure to conventional,low cost oil & gas production, is being fulfilled. The Board continues toactively seek further investments, acquisitions and oil business associations.' Shareholders may be interested to view the Company's web site, www.tomcoenergy.com which contains a summary of our current strategy of participation in oil producing wells and prospects and contains detailed information about US oil shale and related interesting links to US Governmentsites, the Company's share price (twenty minute delay) together with press articles and Company announcements as they are made. For further information, please contact: TomCo Energy PlcStephen Komlosy Tel: (020) 7808 4857 Strand Partners LimitedSimon Raggett Tel: (020) 7409 3494Warren Pearce Bankside Consultants Tel: (020) 7367 8888Simon RothschildLouise Mason TomCo Energy Plc PRELIMINARY RESULTS FOR THE YEAR ENDED 30 SEPTEMBER 2007 CHAIRMAN'S STATEMENT I am pleased to announce the results for TomCo Energy Plc ("TomCo" or "theCompany") (formerly Netcentric Systems Plc) for the year ended 30th September2007. These financial results reflect the fundamental change by the Company intoan active oil production and exploration company during the period. Acquisition of The Oil Mining Company Inc On 16 January 2007, Netcentric Systems Plc completed the reverse acquisition ofThe Oil Mining Company Inc, which owns two separate groups of mineral leases ona total of 2,918 acres of oil shale in the State of Utah, USA. The independentfirm of mining consultants, SRK, reporting on the acquired leases, has estimatedthese leased oil shale areas to contain some 230 million barrels of oil. On completion of the acquisition, the Company changed its name to TomCo EnergyPlc and was re-admitted to trading on AIM (TOM.L) and John Ryan, the Presidentof The Oil Mining Company Inc, was appointed to the Board as CommercialDirector. In conjunction with the acquisition, the Company raised a total of £1.78 millionthrough a placing of 71.28 million ordinary shares of 0.5 pence each ("OrdinaryShares"), at a placing price of 2.5 pence each, which has been used for workingcapital and primarily to enable the Company to investigate and make investmentsin producing oil wells and drilling in proven undeveloped acreage in the USA. Investments During the year, the Company took interests in five drilling participations twoof which were successful and one of which has not yet started drilling. TheCompany also acquired for $972,000, a 50% interest in the Mark III leases,"Saratoga and Abel" in Lubbock County, Texas, which have 8 producing wells andpreliminary estimated Reserves of 28,960 barrels and subsequent to the year endhas announced a six well "in-fill" drilling programme at these two leases with afurther eleven wells projected to be drilled later during 2008. We also spent a significant amount of time and effort to research and bringforward the acquisition programme for two sizeable target companies, which,unfortunately, failed to pass the due diligence tests which are a vital aspectof our decision making process. We will continue to be vigilant about allacquisition opportunities and the process has enhanced our contacts within theindustry and in turn our access to a larger number of high class prospects. Wecontinue to research a number of other potential acquisition targets. Post Balance Sheet Acquisition of Heletz-Kokhav and Luxi Licenses, Israel On 16 January 2008 the Company announced that it had signed a Letter of Intent("LOI") regarding the acquisition of interests in two onshore petroleum licensesin Israel from Avenue Group Inc (AVNU.OB), a New York based US listed Oil & GasCompany, and its wholly-owned subsidiary Avenue Energy Israel Limited (togetherreferred to as "AEI") (the "Acquisition"). The interests to be acquired are a50% interest in the Heletz-Blur-Kokhav Licence and a 25% interest in theintegral Iris License (the "Licenses"), which include the originalHeletz-Blur-Kokhav oilfield ("Heletz"). The concessions, covering over 68,000gross acres, were recently awarded to AEI by the Israel Petroleum Commission andare 3-year production and development licenses which can be extended to 30-yearproduction leases upon a significant increase in the production from its currentcapability of 60 barrels of oil per day ("bopd"). The Heletz field, located 55km south of Tel Aviv and 12km east of theMediterranean coast, is Israel's only onshore producing oil field. The field hasproduced in excess of 17 million barrels of oil to date from Cretaceous sands,with peak production of 4,000 bopd in the mid 1960's.The Israeli Governmentestimates the original oil-in-place (OOIP) for the field to be 50.7 million bblswith 2 million bbls of primary recoverable oil remaining, and studies suggestover 5 million bbls of secondary recovery potential may exist. A number ofundrilled, deeper exploration prospects on the licenses have estimated potentialin excess of 100 million bbls. AEI and the Company will commission an independent determination of theremaining reserves for the Heletz field as one of the first steps in an activetechnical programme designed to identify well re-completion and infill welldrilling targets, and to examine secondary recovery options. Production from thefield had declined to around 60 bpd by 2007, although TomCo expects that theimplementation of modern production and recovery methods and selected infilldrilling will significantly increase production over the next 24 months,resulting in the granting of a 30-year production lease. Shareholders should be aware that the acquisition has not yet completed and theCompany will make further announcements regarding this transaction in due course. Strategy The Company's strategy going forward is to hold the oil shale assets in reserveuntil such time as their exploitation becomes commercially and economicallypractical. In this regard, we believe that the Shell Oil "In Situ" extractionprocess is the most likely to receive environmental clearance from USauthorities and start meaningful production within a six year time frame.Secondly the Company is utilizing the expertise of Howard Crosby, our CEO, andJohn Ryan, in investment in oil wells and proven undeveloped acreage located inthe US and in special situations like the Heletz License in Israel. Thisstrategy is being implemented and the Company has, to date, already invested$1.39 million in such situations with a view to creating a prodigious andproductive investment portfolio of conventional American and Israeli basedshallow producing oil wells and proven undeveloped drilling locations. Meanwhilethe Board continues to actively seek further investments, acquisitions and oilbusiness associations. Oil Shale Although there have been recent ongoing advances in the technology to extractoil from oil shale, particularly by Shell Oil, oil shale in the US is not yetbeing commercially exploited on any scale, but your Board believes that thissituation will change over the next few years as a result of the huge strategicand commercial pressures, together with present supply anxiety which will withinthis time frame, induce the US to create an oil shale industry in the way thatthe Canadian Tar Sands industry was created. There have been a number of oilshale deals done in January 2008 in the US, including an acquisition by IDT andapparent oil shale land purchases by Shell Oil which the Board believes supportsthis view. Future Investment Your Board is now also reviewing certain other investments where clear advantagecan be shown to exist to assist in the improving the value of our shares. Web Site Shareholders can find detailed information on the Company's web site;www.tomcoenergy.com which, in accordance with AIM Rule 26, contains a summary ofour current strategy, detailed information about US oil shale and oil shalerelated links to US Government sites, the Company's share price, documents,announcements, press releases and articles. Stephen KomlosyChairman31 March 2008 Consolidated income statementFor the financial year ended 30 September 2007 2007 2006 £'000 £'000 Revenue 68 - Cost of sales (36) - -------- --------Gross profit 32 - -------- --------Administrative expenses (1,274) (131) -------- --------Operating loss (1,242) (131) Financial income 30 4 -------- --------Loss before taxation (1,212) (127) Taxation - - -------- --------Loss for the year attributable to equity (1,212) (127)shareholders -------- -------- Earnings per share 2007 2006 Pence per Pence per share share Loss per share (0.34) (0.09) Fully diluted loss per share (0.34) (0.09) All amounts derive wholly from continuing activities. The financial informationabove may not be representative of future results The Company has elected to take exemption under the Companies Act 1931- 2004 tonot present the parent Company's Income statement. The loss for the parentCompany for the year was £549,302 (2006: £127,443) Balance sheetsAs at 30 September 2007 Group Company Group Company 2007 2007 2006 2006 £'000 £'000 £'000 £'000 ASSETSNon current assetsProperty, plant and equipment 6 6 2 2Oil properties 5,892 - - -Investment in subsidiaries - 5,572 - -Available for sale financial assets 49 49 94 94 -------- -------- -------- -------- 5,947 5,627 96 96 -------- -------- -------- --------Current assetsTrade and other receivables 54 1,118 86 86Cash and cash equivalents 136 101 83 83 -------- -------- -------- -------- 190 1,219 169 169 -------- -------- -------- --------LIABILITIESCurrent liabilitiesTrade and other payables (93) (115) (47) (47) -------- -------- -------- -------- (93) (115) (47) (47) Net current assets 97 1,104 122 122 -------- -------- -------- --------Net assets 6,044 6,731 218 218 ======== ======== ======== ======== SHAREHOLDERS' EQUITYShare capital 2,217 2,217 832 832Share premium 5,593 5,593 188 188Warrant reserve 272 272 - -Retained earnings (2,038) (1,351) (802) (802) -------- -------- -------- --------Total equity 6,044 6,731 218 218 ======== ======== ======== ======== Stephen A Komlosy John J MayChairman Finance Director Consolidated statement of changes in equityFor the financial year ended 30 September 2007 Share Share Warrant Retained capital premium reserve earnings Total £'000 £'000 £'000 £'000 £'000 Balance at1 October 2006 832 188 - (802) 218 Recognition ofShare-based payments - - 272 - 272Loss for year - - - (1,212) (1,212)Issue of share capital 1,385 5,405 - - 6,790Exchange - - - (24) (24) -------- -------- -------- -------- --------At 30 September 2007 2,217 5,593 272 (2,038) 6,044 Consolidated statement of recognised income and expenseFor the financial year ended 30 September 2007 2007 2006 £'000 £'000 Currency translation differences (24) - -------- --------Net losses recognised directly in equity (24) -Loss for the financial period (1,212) (127) -------- --------Total recognised expense for the year (1,236) (127) -------- --------Attributable to the equity shareholders of the Company (1,236) (127) Consolidated cash flow statementsFor the financial year ended 30 September 2007 Group Company 2007 2006 £'000 £'000 Cash flows from operating activitiesCash generated from operations (540) (99) -------- --------Net cash used in operating activities (540) (99) -------- -------- Cash flows from investing activitiesPurchase of equipment (5) (2)Purchase of oil leases (703) -Purchase of available for sale financial assets (49) (94)Finance income 30 4 -------- --------Net cash used in investing activities (727) (92) -------- -------- Cash flows from financing activitiesNet proceeds from issue of share capital 1,320 271 -------- -------- Net increase in cash and cash equivalents 53 80 Cash and cash equivalents at beginning of 83 3financial period -------- --------Cash and cash equivalents at end of financial 136 83period ======== ======== NOTES 1. The figures set out above are derived from the audited accounts of TomCo Energy Plc for the year ended 30 September 2007. The 2007 accounts will be sentto shareholders shortly. The Annual General Meeting will be held at 5pm on 16 June 2008 at 26 Mount Row, London W1K 3SQ. 2. The Company's financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and International Financial Reporting Interpretations Committee (IFRIC) interpretations adopted by the European Union (EU) and with those parts of the Companies Act 1931 to 2004 applicable to companies reporting under IFRS. 3. The financial information set out above does not constitute the Company'sstatutory accounts for the years ended 30 September 2007 or 2006 within themeaning of section 6 and Schedule 1 of the Isle of Man Companies Act 1982 but isderived from those accounts. Statutory accounts for 2006 have been delivered to the registrar of companies, and those for 2007 will be delivered in due course. The auditors have reported on those accounts; their report was (i) unqualified (ii) did not include a reference to any matters to which the auditors drew attention by way of emphasis without qualifying their report and (iii) did not contain a statement under section 15 (4) (a) or (6) of the Isle of Man CompaniesAct 1982. 4. Segmental reporting Analysis by geographical segment The whole of the Group's revenue arises within the United States. The loss before taxation arises within the United Kingdom and the United States. Netassets are in the United Kingdom and the United States. United United United States Kingdom Total KingdomYear ended 30 September 2007 2007 2007 2006 £'000 £'000 £'000 £'000 Continuing activitiesRevenue 68 - 68 -Cost of sales (36) - (36) - -------- -------- -------- -------- Gross profit 32 - 32 - -------- -------- -------- -------- Administrative expenses (708) (566) (1,274) (131) -------- -------- -------- --------Operating loss (676) (566) (1,242) (131) Financial income - 30 30 4 -------- -------- -------- --------Loss for the year (676) (536) (1,212) (127) ======== ======== ======== ======== Financial assets- Property, plant and equipment - 6 6 2- Oil properties 5,892 - 5,892 -- Available for sale financial assets 49 - 49 94Trade and other receivables 15 39 54 86Cash and cash equivalents 13 123 136 83 -------- -------- -------- --------Total assets 5,969 168 6,137 265 -------- -------- -------- -------- Financial liabilitiesTrade and other payables - (93) (93) - -------- -------- -------- --------Total liabilities - (93) (93) - -------- -------- -------- -------- Analysis by business segment Based on an analysis of risks and returns, the Directors consider that the Grouphas two main identifiable business segments; oil production and investingactivities. The Directors consider that no further segmentation is appropriate. Oil production Investing Central activities activities costs TotalYear ended 30 September 2007 £'000 £'000 £'000 £'000 Continuing activitiesRevenue 68 - - 68Cost of sales (36) - - (36) -------- -------- -------- --------Gross profit 32 - - 32 -------- -------- -------- --------Administrative expenses (708) - (566) (1,274) -------- -------- -------- --------Operating loss (676) - (566) (1,242) Financial income - - 30 30 -------- -------- -------- --------Loss for the year (676) - (536) (1,212) ======== ======== ======== ======== Financial assets- Property, plant and equipment - - 6 6- Oil properties 5,892 - - 5,892- Available for sale financial assets - 49 - 49Trade and other receivables 15 - 39 54Cash and cash equivalents 13 - 123 136 -------- -------- -------- --------Total assets 5,920 49 168 6,137 -------- -------- -------- -------- Financial liabilitiesTrade and other payables - - (93) (93) -------- -------- -------- --------Total liabilities - - (93) (93) -------- -------- -------- -------- Oil production Investing Central activities activities costs TotalYear ended 30 September 2006 £'000 £'000 £'000 £'000 Continuing activitiesRevenue - - - -Administrative expenses - - (131) (131) -------- -------- -------- --------Operating loss - - (131) (131) Financial income - - 4 4 -------- -------- -------- --------Loss for the year - - (127) (127) ======== ======== ======== ======== Financial assets- Property, plant and equipment - - 2 2- Available for sale financial assets - 94 - 94Trade and other receivables - - 86 86Cash and cash equivalents - - 83 83 -------- -------- -------- --------Total assets - 94 171 265 -------- -------- -------- -------- Financial liabilitiesTrade and other payables - - (47) (47) -------- -------- -------- --------Total liabilities - - (47) (47) -------- -------- -------- -------- 5. Earnings per share Basic earnings per share is calculated by dividing the earnings attributable toordinary shareholders by the weighted average number of Ordinary sharesoutstanding during the year. For diluted earnings per share, the weighted average number of Ordinary sharesin issue is adjusted to assume conversion of all dilutive potential Ordinaryshares. Share warrants do not have a dilutive effect. Reconciliations of the earnings and weighted average number of shares used inthe calculations are set out below. Weighted average number of Per-shareFinancial year ended 30 September 2007 Earnings shares amount £'000 £'000 penceBasic EPSEarnings attributable toOrdinary shareholders (1,212) 359,746 (0.34)Effect of dilutive securities - - - -------- -------- --------Diluted EPSAdjusted earnings (1,212) 359,746 (0.34) -------- -------- -------- Weighted average number of Per-shareFinancial year ended 30 September 2006 Earnings shares amount £'000 £'000 penceBasic EPSEarnings attributable toOrdinary shareholders (127) 149,227 (0.09)Effect of dilutive securities - - - -------- -------- --------Diluted EPSAdjusted earnings (127) 149,227 (0.09) -------- -------- -------- This information is provided by RNS The company news service from the London Stock Exchange