Preliminary Interim Results

RNS Number:2576Q
Energy Capital Investment Co.PLC
26 September 2003


                     ENERGY CAPITAL INVESTMENT COMPANY PLC

                              Chairman's Statement

                     For the six months ended 30 June 2003

The principal feature of the half year and the period immediately following the
end of the reporting period has been the realisation of a large part of our
remaining investment portfolio.

During the half year we completed the sale of 3TEC Energy for cash of $6.4
million and shares in Plains Exploration and Production Company ("Plains
Exploration") for $5.1 million. The aggregate consideration of $11.5 million
compares with a carrying value of $9.5 million as at 31 December 2002. In
addition we sold our shares in Plains Resources Inc. back to that company for
$3.3 million, being the approximate carrying value as at 31 December 2002.

In April we revised our management agreement with EnCap Investments LLC with
their full cooperation which removed approximately $20 million worth of
securities from their management. This enabled the Company, freed of the sales
restrictions imposed by US securities legislation, to sell the shares in Plains
Resources Inc. mentioned above and, in July, the remaining listed investments,
including the newly acquired shares in Plains Exploration. As a result of these
sales $15.9 million was realised which compares with the book values
incorporated in the Balance Sheet as at 30 June 2003 of $16.7 million.

In addition to the sales referred to above, the remaining interests in Sierra
1996 and Hilcorp Energy (Duck Lake) were sold at the 31 December 2002 book
values of $0.5 million and $1.4 million respectively and the majority interest
in CERES Resources for $0.9 million in line with the book value as at 31
December 2002.

Results

Revenue earnings for the six months ended 30 June 2003 were 3.98c (2.4p) per
share compared with 2.91c (1.9p) per share for the comparative period,
principally due to an exceptional performance from AROC and Cordillera
benefiting from high product prices.

Net Asset Value

As in previous years we have not revalued our unquoted portfolio at the half
year stage. However, we have recognised a permanent diminution of value of $0.8
million before tax relief in our holding in MPAC Energy, where the Company has
an effective 16.7% interest. This arose because MPAC's subsidiary, AROC Inc.,
sold the majority of its production and exploration asset portfolio to GE
Capital in August for a total cash receipt of $67m.

The net asset value per share has increased by 5.3% from 242.7c as at 31
December 2002 to 255.6c as at 30 June 2003. In sterling terms it has increased
by a lesser amount of 2.3% due to a 2.9% devaluation of the US dollar against
sterling over the six months; however, the sterling equivalent has increased
since the end of the reporting period with the US dollar conversions to sterling
made at exchange rates less than the period end rate of $1.65/#1. We shall
continue to convert the majority of liquid funds sterling as we receive them.

Oil and Gas Prices

Over the six months ended 30 June 2003 oil and gas prices remained volatile.
Natural gas prices remained high during the winter months and remain
significantly above historical averages. During the first half of 2003, natural
gas prices decreased from an average spot price of $6.38 per MMBTU in the first
quarter of 2003 to an average price of $5.64 per MMBTU in the second quarter.
While down from their first quarter highs, oil prices have remained high due to
ongoing concern in the Middle East. Overall, the average spot price of oil
declined from $33.96 per barrel in the first quarter of 2003 to an average price
of $29.02 in the second quarter. The spot price of oil in March rose above $37
in the lead up to the Iraq war but ended the second quarter at $30.19.



Investment Sales After Period End

Our interest in Cordillera has now been sold with approximately $6 million cash
receivable in October. In addition, an expected cash distribution from MPAC/AROC
within the next two months will augment existing net cash held of approximately
$30 million (#18.4 million held in sterling) to approximately $45 million, after
allowing for $1.4 million US taxation payable on the profit on sale of
Cordillera. If the balance of US dollars then held was converted at the current
exchange rate of $1.66/#1 this would result in approximately #27.5 million
(118.5p per share) being held.

The book value of the remaining investments as at 30 June 2003 would then be
approximately $13.5 million. However, shareholders should bear in mind that a
substantial discount on these carrying values might be realised, albeit subject
to a clawback of US tax already paid on gains made, if a quick sale was required
to be achieved.

Prospects

The Board has determined that the most efficient way of returning to
shareholders the substantial cash balances after the receipt of proceeds from
the sale of Cordillera and the distribution from MPAC/AROC, is for the Company
to enter into a voluntary liquidation, following which a substantial initial
distribution could be made. In the absence of any corporate development it is
anticipated that a circular will be sent to shareholders convening an
Extraordinary General Meeting to place the Company into members' voluntary
liquidation before the end of the year. In the meantime, the Directors will keep
under review ways to maximise the value of the remaining investments with a view
to realising these before the Company enters voluntary liquidation.

Alan Henderson

Chairman

26 September 2003


Energy Capital Investment Company PLC
Statement of Total Return (Unaudited)

(Incorporating the Revenue Account of the Group)
For the Six Months Ended 30 June 2003
                                                         Six months to                       Six months to
                                                          30 June 2003                        30 June 2002

                                                   Revenue   Capital       Total        Revenue   Capital         Total
                                                     $'000     $'000       $'000          $'000     $'000         $'000

Realised net losses on investments                       -     (116)       (116)              -     (481)         (481)
Increase in unrealised appreciation                      -     3,374       3,374              -     2,884         2,884
Foreign exchange gains                                   -       156         156              -     1,375         1,375
                                                         -     3,414       3,414              -     3,778         3,778
REVENUE
Commitment and other fees                               10         -          10              9         -             9
Interest receivable on short term deposits              50         -          50            448         -           448
Interest and dividend receivable on                    378         -         378            687         -           687
investments
Net profits from interests in associated
undertakings                                         1,310         -       1,310            917     -               917
                                                     1,748     3,414       5,162          2,061     3,778         5,839
Administrative expenses                              (328)     (253)       (581)          (387)     (634)       (1,021)
Aborted transaction cost                                 -         -           -              -      (51)          (51)
Interest expense                                         -         -           -           (12)         -          (12)
Return on ordinary activities before tax             1,420     3,161       4,581          1,662     3,093         4,755
Tax on ordinary activities                           (497)       129       (368)          (581)       389         (192)
Deferred tax                                        -        (1,236)     (1,236)              -   (1,491)       (1,491)
Return on ordinary activities after
tax attributable to ordinary shareholders              923     2,054       2,977          1,081     1,991         3,072
Transfers to reserves                                  923     2,054       2,977          1,081     1,991         3,072
Return per ordinary share (cents)
Undiluted                                             3.98      8.84       12.82           2.91      5.36          8.27
Fully diluted                                         3.98      8.84       12.82           2.91      5.36          8.27




Energy Capital Investment Company PLC
Summarised Consolidated Balance Sheet

                                                              30 June 2003 (unaudited)     31 December 2002 (audited)
                                                                    $'000           $'000         $'000           $'000
FIXED ASSET INVESTMENTS
Associated undertakings
     Project equity                                                 1,272                         4,039
     Other investments                                             15,250          16,522        15,252          19,291
Investments                                                                        29,322                        34,382
                                                                                   45,844                        53,673
CURRENT ASSETS
Debtors                                                             6,551                         2,813
Cash at bank and in hand                                           10,596                         3,333
                                                                   17,147                         6,146
CURRENT LIABILITIES
Creditors: Amounts falling due within one year                      (994)                       (2,058)
NET CURRENT ASSETS                                                                 16,153                         4,088
TOTAL ASSETS LESS CURRENT LIABILITIES                                              61,997                        57,761
Deferred tax                                                                      (2,654)                       (1,395)
NET ASSETS                                                                         59,343                        56,366
CAPITAL AND RESERVES
Called up share capital                                                             8,792                         8,792
Share premium account                                                              22,672                        22,672
Capital redemption reserve                                                          5,320                         5,320
Capital reserve - realised                                                         13,758                        13,998
Capital reserve - unrealised                                                        8,339                         6,045
Revenue reserve                                                                       462                         (461)
EQUITY SHAREHOLDERS' FUNDS                                                         59,343                        56,366
Net Asset Value per ordinary share - (cents)                                      255.56c                       242.74c
Net Asset Value per ordinary share - (pence)                                      154.86p                       151.32p
Exchange rate ruling at Balance Sheet date                                     $1.6503/#1                    $1.6041/#1




Energy Capital Investment Company PLC
Consolidated Cash Flow Statement (Unaudited)
For the Six Months Ended 30 June 2003


                                                                     Six months to               Six months to
                                                                     30 June 2003                30 June 2002
                                                                  $'000             $'000         $'000         $'000
Net cash Flow from Operating Activities                                             2,782                     (7,723)
Taxation                                                                          (1,482)                     (8,388)
Acquisitions and Disposals
Purchase of investments                                           (153)                             (3)
Sale of investments and distributions from
associated undertakings                                           6,116                             723
Net cash inflow from acquisitions and disposals                                     5,963                         720
Net cash inflow before use of liquid resources                                      7,263                    (15,391)
Increase/(Decrease) in net cash                                                     7,263                    (15,391)


Reconciliation of Operating Profit to Net Cash Flow from Operating Activities

                                                                           Six months to         Six months to
                                                                            30 June 2003          30 June 2002

Profit before taxation                                                             1,420                 1,662
Fees and costs transferred to Capital reserve - realised                           (253)                 (634)
Net profit from interests in associated undertakings                             (1,310)                 (917)
Other Non-Cash investment income                                                    (40)                 (316)
Decrease/(Increase) in debtors                                                     2,584               (3,092)
Increase/(Decrease) in creditors                                                     228               (4,686)
Distributions from associated undertakings and
other investments                                                                    153                   260
Net Cash Flow from Operating Activities                                            2,782               (7,723)




Notes
1.         The interim financial statements for the six months ended 30 June 2003 are unaudited and do not constitute
           statutory accounts but have been reviewed by the auditors. The comparable financial information for the year
           ended 31 December 2002 has been abridged from Accounts which have been filed with the Registrar of Companies
           and on which the Auditors gave an unqualified report.

2.         The Directors have considered the appropriate basis for the preparation of the financial statements in light
           of the fact that the Company may be liquidated within a year of the date of this report. The financial
           statements have been prepared on a going concern basis as the mechanism for winding up has not yet been
           determined and the Board believes that the Company has adequate resources to continue in operation for the
           foreseeable future. The Board does not consider that there is a material difference between the financial
           statements as prepared on a going concern or wind-up basis.

3.         The interim financial statements have been prepared on a basis consistent with that in the preceding annual
           accounts, except that the unquoted portfolio was not revalued at the half year, consistent with past
           practice.

4.         The calculation of revenue and capital per ordinary share is based on the net revenue on ordinary activities
           after taxation of $923,000 (2002 - $1,081,000) and on net capital gains of $2,054,000 (2002 - $1,991,000)
           respectively and on 23,220,726 (2002 - 37,153,161) ordinary shares in issue.

5.         The net asset value per ordinary share is based on the net assets of $59,343,000 on 23,220,726 ordinary
           shares of 25p in issue at 30 June 2003 (31 December 2002 - on $56,366,000 on 23,220,726 ordinary shares in
           issue).

6.         No interim dividend has been declared.

7.         Copies of this Report will be posted to all shareholders in October 2003 and further copies can be obtained
           from the Company's registered office at One Bow Churchyard, Cheapside, London EC4M 9HH.







Aberdeen Asset Management PLC

Secretary     26 September 2003



Independent review report

to Energy Capital Investment Company PLC

For the six months ended 30 June 2002

Introduction

We have been instructed by the company to review the financial information,
which comprises the Statement of Total Return, the Summarised Consolidated
Balance Sheet, the Consolidated Cash Flow Statement and the related notes for
the six moths ended 30 June 2003. We have read the other information contained
in the interim report and considered whether it contains any apparent
misstatements or material inconsistencies with the financial information.

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 Listing
Rules of the Financial Services Authority which require that the accounting
policies and presentation applied to the interim figures should be consistent
with those applied in preparing the preceding annual accounts except where any
changes, and the reasons for them, are disclosed.

Review work performed

We conducted our review in accordance with guidance contained in Bulletin 1999/4
issued by the Auditing Practices Board for use in the United Kingdom. A review
consists principally of making enquiries of management and applying analytical
procedures to the financial information and underlying financial data and, based
thereon, assessing whether the accounting policies and presentation have been
consistently applied unless otherwise disclosed. A review excludes audit
procedures such as tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope than an audit performed in
accordance with United Kingdom Auditing Standards and therefore provides a lower
level of assurance than an audit. Accordingly we do not express an audit opinion
on the financial information. This report has been prepared for and only for the
company for the purpose of the Listing Rules of the Financial Services Authority
and for no other purpose. We do not, in producing this report, accept or assume
responsibility for any other purpose or to any other person to whom this report
is shown or into whose hands it may come save where expressly agreed by our
prior consent in writing.

Review conclusion

On the basis of our review we are not aware of any material modifications that
should be made to the financial information as presented for the six months
ended 30 June 2003.

PricewaterhouseCoopers LLP

Chartered Accountants

London

26 September 2003


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