RNS Number : 7630B
Matra Petroleum PLC
21 August 2008
PRESS RELEASE
21 August 2008
Matra Petroleum plc ("Matra" or "the Company")
Interim Results for the six months ended 30 June 2008
Matra Petroleum plc today announces its interim results for the six month period ended 30
June 2008.
Peter Hind, Managing Director of Matra Petroleum, said:
"We have a significant and valuable discovery, Sokolovskoe, on our Russian exploration
licence. Following the drilling of a second well
and remapping of the discovery, we anticipate an appraisal well will be drilled in the second
half of this year on the crest of the
structure. Independent consultants, Senergy, have placed a valuation on Sokolovskoe on a "most
likely" case of $172 million, equivalent to
approximately 16 pence per share on a fully diluted basis.
In order to complete our next stage of work on the license we will need to raise further
finance. Given that we have a valuable
discovery that has been confirmed by Senergy, there are several options open to us and we are
evaluating these currently.
In addition to progressing the development and further exploring our block, we are
continuing to focus our new venture efforts in and
around Orenburg in Russia where we continue to see potential to add value."
For further information please contact:
Matra Petroleum plc www.matrapetroleum.com
Peter Hind, Managing Director +44 (0) 7990 807855
Aquila Financial Limited (Public Relations)
Peter Reilly +44 (0) 118 979 4100
RFC Corporate Finance Limited (NOMAD)
Steve Allen +618 94802500
MANAGING DIRECTOR'S STATEMENT
Dear Shareholder,
I am pleased to present the Interim Results of Matra Petroleum plc for the six months
ended 30 June 2008.
We have a significant and valuable discovery, Sokolovskoe, on our Russian exploration
licence. Following the drilling of a second well
and remapping of the discovery, we anticipate an appraisal well will be drilled in the second
half of this year on the crest of the
structure. Independent consultants, Senergy, have placed a valuation on Sokolovskoe on a "most
likely" case of $172 million, equivalent to
approximately 16 pence per share on a fully diluted basis.
Our exploration efforts in Hungary have been disappointing, although our expenditure there
has been limited due to our decision to
farm-out our interests in 2007. The Inke Concession undoubtedly has pools of both oil and gas
within it but to date we have discovered only
sub-commercial fields and the technical challenge remains. A review of the prospectivity of
the two areas in Hungary is underway and until
that review is concluded, expenditure there will be minimised.
In Russia we drilled a second exploration well, which was unsuccessful. In ideal
circumstances we would have delayed the drilling of
that well until we had completed the interpretation and integration of the 2007 seismic survey
with the reprocessing of the existing
seismic. We were, however, required to drill our second exploration well on the block as early
as possible in order to meet license
obligations. The well has however provided another tie-in point to the seismic and has allowed
a much clearer definition of the structure of
the discovery and the southern prospect.
That technical work allowed Senergy to provide an updated estimate of resources and a
valuation of the discovery. The range of resources
is wide as expected, with the low, most likely and high estimates of recoverable resources
being 4, 19 and 56 million barrels respectively.Society of Petroleum Engineers (SPE) guidelines restrict the low number to an area around the
existing well and the high estimate takes
account of the potential to find a thicker pay section in the crestal location.
The remapping of the structure shows that the first well drilled, A-12, is on the edge of
the structure. The acid treatment of the well
was very successful and removed all formation damage and testing showed that the well was
capable of flowing at rates in excess of 1000bopd.Not unexpectedly the well started to flow some water after producing at higher rates for
several days. In order to prevent excessive and
rapid water influx, the well has been choked back to a current level of around 200 bpd and
water cut has increased to 30%. Investigation
work has commenced to determine the source of the water. This water production is likely to
prove good news for the overall field
development as pressure support from an aquifer typically provides for improved oil recovery
and better well performance.
At currently realised domestic oil prices Senergy estimated the most likely case to
generate a Net Present Value (NPV), at a 10%
discount rate, of $172 million. This value may be improved by the expected improvement in
fiscal terms in Russia and the potential to
increase the sales price via export. This valuation of $9/bbl is higher than most other small
fields in Russia because of the higher than
usual potential well rates for this field and the excellent oil quality.
An NPV of $172 million represents almost 16p/share on a fully diluted basis. This excludes
any value for future exploration success.
Our forward plan is to drill the crestal location of the discovery and to put that well on
to production as soon as possible. Currently
we are finalising negotiations for the new well site. A well on the southern structure will
then follow and should be drilled during the
first half of 2009.
The conversion of the discovery area to a production license is progressing well and our
application has successfully passed the first
stages. Full award of the production license is anticipated early in 2009 and the timing does
not impact on the development schedule or our
ability to drill and produce more wells.
I was very pleased to report that the court case brought against us in Russia was
unsuccessful and the court confirmed that we had
acquired the company in full accordance with Russian Law.
In order to complete our next stage of work on the license we will need to raise further
finance. Given that we have a valuable discovery
that has been confirmed by Senergy, there are several options open to us and we are evaluating
these currently.
It is now 16 months since we began working in Russia and there have been numerous
challenges along the way but I am pleased to say that
both London and Orenburg staff have risen to the challenge and delivered real value to the
company and a bright future.
In addition to progressing the development and further exploring our block, we are
continuing to focus our new venture efforts in and
around Orenburg in Russia where we continue to see potential to add value.
I look forward to reporting further news throughout the year.
On behalf of the Board.
Peter Hind
Managing Director
19 August 2008 INDEPENDENT REVIEW REPORT
FOR THE PERIOD ENDED 30 JUNE 2008
INDEPENDENT REVIEW REPORT TO MATRA PETROLEUM PLC
Introduction
We have been engaged by the company to review the condensed set of financial statements in
the half-yearly financial report for the six
months ended 30 June 2008 which comprises the Consolidated Income Statement, the Consolidated
Balance Sheet, the Consolidated Cash Flow
Statement, and the Consolidated Statement of Changes in Shareholders Equity and related
notes.
We have read the other information contained in the half-yearly financial report and
considered whether it contains any apparent
misstatements or material inconsistencies with the information in the condensed set of
financial statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is the
responsibility of and has been approved by the
directors. The directors are responsible for preparing the interim report in accordance with
the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment Market which require that the
half-yearly report be presented and prepared in a
form consistent with that which will be adopted in the company's annual accounts having regard
to the accounting standards applicable to
such annual accounts.
Our responsibility
Our responsibility is to express to the company a conclusion on the condensed set of
financial statements in the half-yearly financial
report based on our review.
Our report has been prepared in accordance with the terms of our engagement to assist the
company in meeting the requirements of the
rules of the London Stock Exchange for companies trading securities on the Alternative
Investment Market and for no other purpose. No person
is entitled to rely on this report unless such a person is a person entitled to rely upon this
report by virtue of and for the purpose of
our terms of engagement or has been expressly authorised to do so by our prior written
consent. Save as above, we do not accept
responsibility for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements
(UK and Ireland) 2410, ''Review of Interim
Financial Information Performed by the Independent Auditor of the Entity'', issued by the
Auditing Practices Board for use in the United
Kingdom. A review of interim financial information consists of making enquiries, primarily of
persons responsible for financial and
accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and consequently does not
enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit. Accordingly, we
do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe that the
condensed set of financial statements in the
half-yearly financial report for the six months ended 30 June 2008 is not prepared, in all
material respects, in accordance with the rules
of the London Stock Exchange for companies trading securities on the Alternative Investment
Market.
Emphasis of matter - going concern
In forming our conclusion on the condensed set of financial statements, we have considered
the adequacy of the disclosures made in note
3 to the financial statements concerning the company's ability to continue as a going concern.The group cash flow forecasts show the group
requiring additional funds before November 2008. The directors expect to be able to source
additional funding, as required, although they
have no binding agreement for additional finance nor commitment to provide additional funds. These conditions as disclosed in note 2 to the
financial statements, indicate the existence of a material uncertainty which may cast
significant doubt about the company's ability to
continue as a going concern. The financial statements do not include the adjustments that
would result if the company was unable to continue
as a going concern.
BDO Stoy Hayward LLP
Chartered Accountants and Registered Auditors
London
19 August 2008
CONSOLIDATED INCOME STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2008
30 June 30 June 31 December
2008 2007 2007
unaudited unaudited audited
Restated
Notes EUR EUR EUR
Continuing operations
Revenue 753,407 - -
Cost of sales (687,655) - -
Gross profit 65,752 - -
Other administration (1,345,529) (974,384) (1,232,376)
expenditure
Impairment of exploration (2,526,153) - -
expenditure
Total administration (3,871,682) (974,384) (1,232,376)
expenditure
Loss from operations (3,805,930) (974,384) (1,232,376)
Finance income 95,102 246,474 572,352
Finance costs (15,775) (1,879) (62,933)
Share of loss of associate (1,099,559) - (1,292,078)
Loss before taxation (4,826,162) (729,789) (2,015,035)
Taxation - - (40,771)
Loss after taxation (4,826,162) (729,789) (2,055,806)
Dis-continuing operations
Loss for the year from - (2,104,772) (2,114,935)
discontinued operations
Loss for the year (4,826,162) (2,834,561) (4,170,741)
attributable to equity
shareholders of the parent
Loss per share 4
Basic and diluted (0.01065) (0.00902) (0.01087)
Loss per share from 4
continuing operations
Basic and diluted (0.01065) (0.00232) (0.00536)
Loss per share from 4
discontinuing operations
Basic and diluted - (0.00670) (0.00551)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
FOR THE PERIOD ENDED 30 JUNE 2008
Share Share Foreign Other Retained
Total
capital premium currency Reserves earnings
translation
reserve
Consolidated EUR EUR EUR EUR EUR
EUR
Total equity as at 1st January 389,122 16,828,038 (158,239) 1,127,014 (4,097,857)
14,088,078
2007
Exchange differences on - - (915,873) - -
(915,873)
translating foreign operations
Net income recognised directly - - (915,873) - -
(915,873)
in equity
Loss for the year - - - - (4,170,741)
(4,170,741)
Total recognised income and - - (915,873) - (4,170,741)
(5,086,614)
expense
Shares issued 257,849 11,718,559 - - -
11,976,408
Share issue costs - (22,264) - - -
(22,264)
Recognition of share based - - - 263,128 -
263,128
payment
Total equity as at 31 December 646,971 28,524,333 (1,074,112) 1,390,142 (8,268,598)
21,218,736
2007
Share Share Foreign Other Retained
Total
capital premium currency Reserves earnings
translation
reserve
Restated Restated Restated Restated Restated
Restated
Consolidated EUR EUR EUR EUR EUR
EUR
Total equity as at 1 January 389,122 16,828,038 (158,239) 1,127,014 (4,097,857)
14,088,078
2007
Exchange differences on - - 374,812 - -
374,812
translating foreign operations
Net income recognised directly - - 374,812 - -
374,812
in equity
Loss for the year - - - - (2,834,561)
(2,834,561)
Total recognised income and - - 374,812 - (2,834,561)
(2,459,749)
expense
Shares issued 257,849 11,718,559 - - -
11,976,408
Share issue costs - (22,264) - - -
(22,264)
Recognition of share based - - - 188,561 -
188,561
payment
Total equity as at 30 June 646,971 28,524,333 216,573 1,315,575 (6,932,418)
23,771,034
2007
Share Share Foreign Other Retained
Total
capital premium currency Reserves earnings
translation
reserve
Consolidated EUR EUR EUR EUR EUR
EUR
Total equity as at 1 January 646,971 28,524,333 (1,074,112) 1,390,142 (8,268,598)
21,218,736
2008
Exchange differences on - - (1,451,911) - -
(1,451,911)
translating foreign operations
Net income recognised directly - - (1,451,911) - -
(1,451,911)
in equity
Loss for the year - - - - (4,826,162)
(4,826,162)
Total recognised income and - - (1,451,911) - (4,826,162)
(6,278,073)
expense
Shares issued 12,957 260,481 - - -
273,438
Recognition of share based - - - 119,425 -
119,425
payment
Total equity as at 30 June 659,928 28,784,814 (2,526,023) 1,509,567 (13,094,760)
15,333,526
2008
CONSOLIDATED BALANCE SHEET
AS AT 30 JUNE 2008
30 June 30 June 31 December
2008 2007 2007
unaudited unaudited audited
Restated
EUR EUR EUR
Non-current assets
Property, plant & 82,124 91,528 86,504
equipment
Intangible assets 9,416,458 4,298,358 9,999,042
Share of net assets in - 2,276,007 721,399
associate
9,498,582 6,665,893 10,806,945
Current assets
Inventories 3,159 354 1,194
Trade and other 5,061,235 1,415,915 3,972,177
receivables
Cash and cash 1,891,664 16,841,184 7,546,636
equivalents
6,956,058 18,257,453 11,520,007
Total assets 16,454,640 24,923,346 22,326,952
Capital and reserves attributable to equity holders of the Company
Ordinary shares 659,928 646,971 646,971
Share premium 28,784,814 28,524,333 28,524,333
Foreign currency (2,526,023) 216,573 (1,074,112)
translation reserve
Other reserves 1,509,567 1,315,575 1,390,142
Retained earnings (13,094,760) (6,932,418) (8,268,598)
Total equity 15,333,526 23,771,034 21,218,736
Current liabilities
Trade and other 1,121,114 1,152,312 1,108,216
payables
Total liabilities 1,121,114 1,152,312 1,108,216
Total equity and liabilities 16,454,640 24,923,346 22,326,952
The financial statements are approved and authorised for issue by the Board on 19 August
2008
Peter Hind
Managing Director CONSOLIDATED CASH FLOW STATEMENT
FOR THE PERIOD ENDED 30 JUNE 2008
30
June 30 June 31 December
2008
2007 2007
unaudited unaudited audited
Restated
EUR
EUR EUR
Loss after taxation
(4,826,162) (2,834,561) (4,170,741)
Depreciation
11,898 3,967 16,782
Share of loss of associates
721,399 - 1,292,078
Impairment of exploration expenditure
2,526,153 - -
Loss on disposal of subsidiary
- 1,756,880 1,508,051
Share based payments
119,425 188,561 263,128
Foreign currency differences
(246,670) 1,477,504 445,770
Income tax expense
- - 40,771
Cash used in operating activities before changes in working capital and provisions
(1,693,957) 592,351 (604,161)
(Increase) in inventories
(1,965) - (1,194)
(Increase) in receivables
(1,089,058) (3,878,187) (1,369,824)
Increase in payables
12,898 6,575,466 1,545,936
Cash used in operations
(2,772,082) 3,289,630 (429,243)
Income taxes paid
- - (40,771)
Net cash used in operating activities
(2,772,082) 3,289,630 (470,014)
31
March 31 December 31 December
2008
2007 2007
unadited audited audited
EUR
EUR EUR
Cash used in operating activities
(2,772,082) 3,289,630 (470,014)
Cash used in investing activities
Disposal of Gemstone Properties Limited net of cash
- (377,100) (411,118)
disposed
Purchase of property, plant and equipment
(7,517) (72,678) (84,484)
Expenditure on oil and gas assets
(2,446,218) (1,874,557) (6,891,957)
Cash used in investing activities
(2,453,735) (2,324,335) (7,387,559)
Cash used in financing activities
Proceeds from issue of shares
273,438 8,681,942 8,063,032
Share issue expenses paid
- - (22,264)
Cash used in financing activities
273,438 8,681,942 8,040,768
Net (decrease) / increase in cash and cash equivalents
(4,952,379) 9,647,237 183,195
Cash and cash equivalents at beginning of period
7,546,636 8,250,886 8,250,886
Effect of foreign exchange rate differences
(702,592) (1,056,938) (887,444)
Cash and cash equivalents at end of period
1,891,664 16,841,184 7,546,636
NOTES TO THE FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 30 JUNE 2008
1. Accounting policies
The financial information set out in this report is based on the consolidated financial
statements of Matra Petroleum plc and its
subsidiary companies (together referred to as the 'Group'). The accounts of the Group of the 6
months ended 30 June 2008 were approved and
authorised for issue by the Board on 19` August 2008. The interim results have not been
audited, but were the subject of an independent
review carried out by the Company's auditors, BDO Stoy Hayward LLP. In accordance with s240 of
the Companies Act 1985, such unaudited
results do not constitute statutory accounts of the Company or the Group. These accounts have
been prepared in accordance with the
accounting policies that are expected to be applied in the Report and Accounts of Matra
Petroleum plc for the year ended 31 December 2008
and are consistent with IFRS. The statutory accounts for the year ended 31 December 2007 have
been filed with the registrar of Companies.The auditor's report on those accounts was unqualified, did not include any references to any
matters to which the auditors drew attention by way of emphasis without qualifying their report
and did not contain a
statement under section 237(2)-(3) of the Companies Act 1985.
The consolidated financial statements incorporate the results of Matra Petroleum plc and
its subsidiaries undertakings as at 30 June
2008, using the acquisition and equity method of accounting as appropriate. The corresponding
amounts are for the year ended 31 December
2007 and the 6 month period ended 30 June 2007.
2. Restatement 2007
Consistent with the full year to 31 December 2007, the comparative figures reported in
respect of the acquisition of Inke Petroleum Pty
Limited on 6 April 2006 have been restated as was reported in the year to 31 December 2006.(Refer to the December 2007 annual report for
full details).
3. Going concern
These accounts have been prepared on the going concern basis however the group cash flow
forecasts show additional funding is required
by the group to fund the current year's drilling program. The Board is continuing with their
approaches to providers of debt and other
finance and are confident that additional funds will be available to ensure the group can
continue in existence for the foreseeable future.Accordingly the Board is satisfied that the going concern basis remains appropriate for the
preparation of the financial information for the
6 months ended 30 June 2008.
4. Loss per share
Basic earnings per share are calculated by dividing the earnings attributable to ordinary
shareholders by the weighted average number of
Ordinary Shares outstanding during the period.
In order to calculate diluted earnings per share, the weighted average number of Ordinary
Shares in issue is adjusted to assume
conversion of all dilutive potential Ordinary Shares according to IAS 33. Dilutive potential
Ordinary Shares include share options granted
to employees and Directors where the exercise price (adjusted according to IAS 33) is less
than the average market price of the Company's
Ordinary Shares during the period.
6 months to 6 months to Year ended
30 June 2008 30 June 2007 31 December 2007
Unaudited Unaudited Audited
EUR EUR EUR
Profit /(Loss) attributable to (4,826,162) (2,834,561) (4,170,741)
ordinary shareholders
Number of Shares Number of Shares Number of Shares
Weighted average number of 453,023,994 314,099,448 383,616,438
shares used in the calculation
of basic loss per share
Effect of dilutive share - - -
options
Weighted average number of 453,023,994 314,099,448 383,616,438
shares used in the calculation
of diluted loss per share
Loss per share (0.01065) (0.00902) (0.01087)
Diluted loss per share (0.01065) (0.00902) (0.01087)
Earnings per share (Continuing
Operations)
Loss from continuing (4,826,162) (729,789) (2,055,806)
operations
Basic loss per share (pence) (0.01065) (0.00232) (0.00536)
Diluted loss per share (pence) (0.01065) (0.00232) (0.00536)
Earnings per share
(Discontinued Operations)
Loss from discontinued - (2,104,772) (2,114,935)
operations
Basic loss per share (pence) - (0.00670) (0.00551)
Diluted loss per share (pence) - (0.00670) (0.00551)
The total number of shares in issue at 30 June 2007 amounted to 452,000,000. The total
amount of options and warrants held over the
shares at 30 June 2008 was 137,318,795. These options and warrants are exercisable at prices
that range between 0.1p and 8p.
For the prior periods, the effect of 14,115,610 potential ordinary shares at 30 June 2007,
and 41,621,551 potential ordinary shares at
31December 2007 arising from the exercise of options is considered to be anti-dilutive and
have been excluded from the above calculation.
During the period to 30 June 2008 the following new shares were issued:
* 25 March 2008: 251,205 Warrants were exercised at 6.5 pence per share.
* 12 June 2008: 9 million options were exercised at 2 pence per share.
* 30 June 2008: 1 million options were exercised at 2 pence per share.
5. Events after the balance sheet date
On 1 July the company announced recoverable contingent resource estimates of 19 million
barrels of oil (best case) with an estimated Net
Present Value of US$172 million based on the best estimate case, using a domestic oil price of
US$58/bbl and a 10% discount rate. The
company also announced flow rates of 250 - 320 bopd from the A-12 exploration well which had
been choked back from 660 bopd due to the
production of limited amounts of water. The company believes this is likely to be to be due to
location of the A-12 well which situated on
the flank of the Sokolovskoe structure.
On 4 July the company announced that it had registered a claim against Kompania Gaz i
Neft, Victor Vasilyevich Mogdaluk, Pavel Lvovich
Lukachevsky and Oleg Nikolayevich Balagurov (jointly "the Sellers") on 2 July 2008 in the
London Court of International Arbitration.
On 11 July the company announced that all claims by Kompania Gaz I Neft against it were
dismissed by the presiding judge.
On 14 July the company announced that it had plugged and abandoned the Pamuk-1 ST
exploration well on the Inke concession in SW Hungary.Matra has a 40% interest in the Inke Concession.
6. Interim report
Copies of the interim report for the six months ended 30 June 2008 will be available from
the offices of Matra Petroleum plc, 120 Bridge
Road, Chertsey, Surrey, KT16 8LA, United Kingdom and on the company's website
www.matrapetroleum.com.
This information is provided by RNS
The company news service from the London Stock Exchange
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