Final Results
Aminex PLC
28 March 2008
AMINEX PLC
("Aminex" or "the Company")
28 March 2008
Preliminary results for the year ended 31 December 2007
Aminex, the oil and gas company listed on the London and Irish Stock Exchanges,
today announces its preliminary results for the year ended 31 December 2007.
Highlights
• Net loss US$3.27 million (2006: loss US$2.86 million)
• New funds of US$29.3 million (before transaction charges) raised to finance
exploration
• Significant discovery in Tanzania since the year end
• Successful US drilling and material upgrade of US reserves
• Drilling ahead on first of three wells in Egypt. Aminex free-carried
through first production
• Seismic programmes completed in Tanzania, at Ruvuma and Nyuni, and in
progress in Madagascar
• Licence finalised for two near-shore blocks in Kenya
Brian Hall, Chairman of Aminex, said:
"2007 saw the launch of a major exploration programme in four countries. During
the year we built up our financial strength and set in place the logistics,
operations and commercial arrangements for a varied and ambitious exploration
programme. Since the year end we have announced a significant gas discovery on
the Nyuni licence in Tanzania and announced a further gas discovery in the South
Weslaco Field in Texas. With an ongoing drilling programme in Egypt, a major
gas exploration well planned in Texas at Alta Loma this year and plans in hand
for drilling in the highly prospective Ruvuma Basin of Tanzania at the start of
2009, we expect to maintain the momentum of our current operations"
Enquiries:
Aminex PLC +44 (0) 20 7291 3100
Brian Hall - Chairman
Simon Butterfield - Finance Director
Pelham Public Relations +44 (0) 20 7743 6679
Archie Berens
Website
www.aminex-plc.com
Dear Shareholder,
Below please find Aminex's preliminary financial results and accompanying
statement in respect of the year ended 31 December 2007.
OVERVIEW
2007 was a period of high activity for Aminex as we built up our financial
strength and set in place the logistics, operations and commercial arrangements
for a varied and ambitious exploration programme.
We raised $29 million in new equity, through an Institutional Placing and a
Rights Issue to existing shareholders, to finance our exploration programme in
East Africa and the U.S.A. A rig was contracted for Tanzania in April and in
the fourth quarter the first of two exploration wells on the Nyuni licence was
spudded. After a disappointing first well, the second well, Kiliwani North-1,
has encountered a significant gas formation since the year end which is now
being evaluated. In the USA, the GU-38 well at South Weslaco, spudded just
before the year end, encountered a thick section of gas bearing sands in January
2008. During the year under review seismic was acquired at Nyuni (Tanzania),
Manja (Madagascar) and Ruvuma (Tanzania). With the exception of the well at
South Weslaco, all these projects have been operated and managed by Aminex's
exploration team. At Nyuni (Tanzania) two farm-outs were concluded in early
2007, to RAK Gas and to Key Petroleum, while Tullow Oil completed its farm-in
obligations at Ruvuma (Tanzania) to earn 50% in that PSA (Production Sharing
Agreement). Late in the year a PSA was signed with the Government of Kenya for
two offshore/coastal exploration blocks in the vicinity of Mombasa. Higher oil
prices from our U.S. production and a good performance by our oilfield supply
and logistics subsidiary made a strong contribution. Nearly half the net loss
for the year represents a non-cash charge required to be made under current
accounting rules for the issue of executive share options. Without this
non-cash charge in each of 2006 and 2007, an improving picture year on year
would be apparent.
FINANCIAL REVIEW
All figures are expressed in US Dollars. At $9.3 million, Aminex's total
revenues were almost double those of 2006. This increase is partly due to
higher sales of goods and services by AMOSSCO, the Group's oilfield services and
supply arm while revenues from oil and gas sales were 10% ahead of 2006.
Gas production at 141 million cubic feet was 9% above the 2006 volume, mainly
due to the Sunny Ernst well at Alta Loma being on constant production since
February 2007. Gas was also produced throughout the year from the South Weslaco
field. The average gas price achieved was $6.40/mcf, an increase of 49 cents
over the 2006 average. Oil production at 29,000 barrels was comparable to the
2006 production level. The average oil price achieved during 2007 was $64.97/
barrel, an increase of $6.62 per barrel over 2006. Approximately two thirds of
Aminex's oil comes from the Somerset Field which is classified as South Texas
Sour and priced at a discount to the U.S. bench mark crude, West Texas
Intermediate (WTI). Oil was produced throughout the year from the Shoats Creek
field and sold at a premium to WTI prices.
Cost of sales at $7.4 million was $4 million higher than in 2006 mainly due to
the higher proportion of sales of oilfield services and supplies. Included in
these sales was procurement of oilfield equipment for the Tanzanian drilling
programme. Cost of sales for oil and gas activities (included in the total cost
of sales charge of $7.4 million) amounted to $1.45 million, an increase of 8%
over 2006. The depletion and decommissioning charge of $449,000 is slightly
above the 2006 charge of $386,000 as a consequence of higher gas production.
After taking into account cost of sales and depletion-decommissioning charges,
the resulting gross profit was $1.49 million, a 21% increase over the 2006 gross
profit of $1.23 million.
Group administrative expense at $4.97 million was approximately $1 million
higher than 2006. Included in the 2007 charge was an amount of $1.34 million
representing the notional cost of the award of share options whereas the 2006
comparative charge only included $540,000. A large proportion of Aminex's
administrative expense is incurred in sterling so that the depreciation of the £
/$ exchange rate from an average £1/$1.84 in 2006 to £1/$1.99 during the current
reporting period has translated into a higher US dollar charge. The
depreciation charge at $90,000 is double the 2006 figure, due to new mobile
oilfield equipment acquired for the Somerset field during the current period.
The resulting net loss from operating activities amounts to $3.57 million, an
increase of $781,000 over 2006.
After taking into account net finance income of $299,000 (2006: net finance
cost $75,000), the resulting net loss for the year ended 31 December 2007 was
$3.27 million, an increase over 2006 of $407,000.
Balance sheet total non-current assets have increased by $10.1 million over the
period-end 2006 figure and mainly comprise $9.97 million of additions to
exploration and evaluation assets. This represents the cost of seismic work
carried out on the Ruvuma and Madagascar licences as well as drilling activities
on the two Kiliwani wells at Nyuni. Property, plant and equipment showed a net
decrease of $228,000 from 2006 but this is stated net of the depletion and
decommissioning charge of $449,000 as well as net of a reduction of $1.06
million in the Group's abandonment provision as a consequence of the re-timing
of abandonment activities at the Somerset field, resulting in a 2007 expenditure
of $1.28 million. Included in this expenditure is the completion and tie-in to
production of the third well and the drilling of a fourth well at South Weslaco.
The increase of $395,000 in Other Investments represents the Group's
investment in Key Petroleum Ltd acquired as part of a farm-out arrangement.
Current assets have increased by $18.8 million, $15 million of which is
represented by cash. Current liabilities have increased by $4.98 million,
mostly being for drilling and seismic acquisition activities in Tanzania and
Madagascar. Non-current liabilities have decreased by $741,000 due to changes
to the Group's abandonment provision referred to earlier. Net debt (current and
non-current) representing U.S. vehicle equipment loans stood at $241,000 at 31
December 2007, an increase of $96,000 over 2006.
The Group's cash flow statement reflects the proceeds from the issue of share
capital through a placing and rights issue in mid-year which raised $29.3
million before transaction charges of $2.94 million. After taking into account
net capital expenditures and cash outflows from operating activities, together
amounting to $11.5 million, the net increase in cash at year end amounted to
$14.99 million, which when added to an opening cash balance of $3.6 million
resulted in a year end cash balance of $18.6 million.
OPERATIONS REVIEW
Tanzania - Nyuni
The Caroil-6 land drilling rig was delayed on a previous well and delivered to
Aminex and partners so late that a two-well programme on the Nyuni licence only
commenced in November. The first well, Kiliwani-1, was drilled at a 40 degree
angle from the small island of Kiliwani but did not encounter any commercial
hydrocarbons in the targeted Neocomian formation. This well was plugged and
abandoned in February 2008 and the rig moved a short distance north to
Songo-Songo Island. Since the year end the Caroil-6 has successfully drilled a
vertical well from Songo-Songo, Kiliwani North-1, which intercepted and logged a
significant gas bearing formation of approximately 60 metres gross thickness in
Lower Cretaceous sands. Although this well has been drilled since the period
under review, it is a significant event for Aminex, being the first real fruit
of several years work on the East African margin. This is of importance not
only for Aminex but also for the prospectivity of the whole region. The
discovery is currently being evaluated and future plans formulated. Aminex has
40% of the Nyuni licence and is the operator.
Tanzania - Ruvuma
The planned seismic programme for the Lindi and Mtwara licences, which make up
the 12,000 km(2) Ruvuma PSA area, was completed in late 2007 and the processed
data is currently being evaluated and interpreted. Our 50% partner, Tullow Oil,
has now earned its farm-in interest and, per agreement, took over operatorship
of the PSA on 1 January 2008. Two initial wells are planned for this licence
and the most likely start date for the drilling programme is 1 January 2009,
although this may occur before or after that date. Aminex considers the Ruvuma
licences to be highly prospective for both oil and gas and looks forward to
putting the prospects which we have now identified to the test with the drill
bit. In the Mozambique part of the Ruvuma basin, to the south of the Ruvuma
river, a number of international companies are preparing for an intense
exploration effort. The Aminex/Tullow joint venture holds the exclusive
exploration rights to virtually the entire Tanzanian section of this basin.
Madagascar
Aminex and its 50-50 partner Mocoh Resources Ltd., operating through a joint
company known as Amicoh Resources Ltd., are currently in the process of
acquiring 500 kms of new 2D seismic data on the 10,750 km(2) Manja PSA (Block
3108) onshore on the west coast of Madagascar. The programme is about 50%
complete but operations are currently suspended during the rainy season when
swollen rivers and soft ground make it impossible for seismic crews to operate.
Acquisition of the remaining data is due to recommence around 1 May 2008 and
should take about 2 months to complete. By end November 2008 a decision must be
taken either to extend the licence into a further period which will involve a
commitment to drill one well or to surrender the licence. Madagascar has
recently attracted significant interest from international explorers but remains
a physically and environmentally challenging environment for oil and gas
operations.
Kenya
In late 2007 a formal PSA was signed with the Government of Kenya for the
exploration rights over contiguous coastal blocks L17 and L18, mainly offshore
but with an onshore coastal fringe. These two blocks cover over 5,000 km(2) and
stretch from the Tanzanian border in the south to north of the Kenyan port city
of Mombasa. New seismic has already been acquired over the PSA area which has
identified several interesting leads, offering the prospect of gas
accumulations. Mombasa is an important city and suffers from serious energy
shortages so a gas discovery in the vicinity would find a ready market. Seabed
core samples have been taken which indicate the presence of hydrocarbons. The
immediate programme is to increase the seismic coverage through further
acquisition and this may take place in September 2008 subject to availability of
an appropriate seismic vessel. Aminex has a 25% interest and is the nominated
operator.
Egypt
Aminex Petroleum Egypt Ltd. operates the 1,400 km(2) West esh el Mellahah-2 PSA
(WEEM-2) in the onshore Gulf of Suez region close to the coastal town of
Hurghada. "Esh el Mellahah" means literally "cluster of salt beds". WEEM-2 is
in a mature oil producing area and oilfields in the adjacent WEEM-1 licence
together produce around 10,000 barrels of oil per day. The geology is highly
faulted and difficult to interpret but WEEM-2 enjoys extensive 3D seismic
coverage. Since the year end a drilling rig has been mobilised to WEEM-2 and
the first of three commitment wells, Malak-1, was spudded in late February to
drill to a target depth of 3,800 metres. At the time of writing Malak-1 had not
yet reached target depth but was making good progress. Following Malak-1 a
further two exploration wells are planned and must be drilled by mid 2009 in
order to fulfil the PSA obligations. The second well will be drilled
immediately after Malak-1 but the timing of the third and possibly more wells
has not yet been determined. Aminex has a 10% interest in this PSA and its
share of costs is carried by other partners until first commercial production
has been established. Aminex is participating in a promising exploration
drilling programme with no financial exposure until commercial production has
been established.
U.S.A.
Aminex has interests in four principal producing locations: Alta Loma, Shoats
Creek, South Weslaco and Somerset. The results of an updated independent
reserves evaluation have been released today and have been posted in summary
form to our website. With recent drilling success, satisfactory and continuous
production history in 2007 and strengthening oil prices, the updated report
shows a 66% increase over last year's valuation on a P50 basis. Total P50
reserves have now been independently assessed at a valuation of $143 million,
comprising 6.9 billion cubic feet of gas and 2.3 million barrels of oil.
Alta Loma (Galveston County, Texas) produces from a single gas well and a
further deep exploration well is planned. This well was part of Aminex's 2007
programme but was delayed due to the takeover of the field operator by another
company. El Paso Exploration & Production, a deep drilling specialist, is now
the operator of the leases and it is expected that a well location will be
finalised by the partners and a new well spudded during the first half of 2008.
Aminex has a 37.5% net revenue interest in this property.
Aminex and partners are involved in a continuous drilling programme in the South
Weslaco Field (Hidalgo County, Texas). The most recent well, GU-38, was spudded
at the end of 2007 and encountered an important gas formation at the beginning
of 2008. South Weslaco wells normally find multiple producing sands and the two
most recent wells, GU-37 and GU-38, were drilled deeper than earlier wells to
test lower Frio sands. This strategy has been successful but the sand
formations encountered at depth tend to be "tight" and hard to make flow. After
several attempts at conventional stimulation the GU-37 well was successfully
fracture treated (frac'd) and is now on commercial production. The GU-38 will
also require fracture treatment and this is likely to be carried in the near
future. Frac-ing is a relatively risky operation and is not normally employed
until the alternatives have been exhausted. There is an ongoing programme of
further development drilling at South Weslaco in 2008.
Further well workovers have been carried out at Shoats Creek (Calcasieu Parish,
Louisiana) and we are due to receive the delayed results of Forest Oil's 3D
survey, to which we are entitled, around the middle of this year. Shooting 3D
seismic in a swampy, forested area such as Shoats Creek is an operational
challenge and has taken Forest Oil longer than they anticipated. There is
potentially more underlying value in Shoats Creek than in all our other US
properties combined and the 3D seismic should be the first pointer to unlocking
its full potential.
Stripper production at Somerset (San Antonio, Texas) has been maintained with
careful management and is fully economic in the present oil price regime.
North Korea
Turbulent politics and personnel changes at the higher levels of government have
mitigated against any serious progress in North Korea during 2007. Our original
agreement negotiated in 2004 was for 20 years and remains valid. We are in the
process of broadening our relationships with the authorities and we believe
strongly in the country's potential for significant hydrocarbon exploitation.
AMOSSCO
AMOSSCO (Aminex Oilfield Service & Supply Company) is a long-established Aminex
subsidiary which sources and supplies oilfield materials and consumables to
international oil companies and state procurement organisations. In addition to
third party business, AMOSSCO acts as Aminex's in-house supply and logistics arm
for drilling operations. In 2007 the business grew in line with market activity
and was also fully involved in supporting the Tanzanian drilling programme.
STRATEGY & PROSPECTS
Aminex is now fully embarked on the exploration programme predicted this time
last year. High oil prices bring their own problems because in an overheated
market equipment and specialist personnel are more expensive and less readily
available than at other times and this means that we cannot always meet the
deadlines that we target. Recent drilling success in Tanzania vindicates our
work there over several years as an early pioneer in East Africa and encourages
us to pursue our East African prospects with renewed vigour. We will evaluate
the recent Kiliwani North discovery with a view to commercial exploitation as
soon as possible and will use the knowledge gained from the two wells we have
recently drilled on Nyuni to re-evaluate the other exploration prospects on the
licence. The Egyptian drilling programme is now under way to test multiple
prospects. The next major well we are likely to drill will be a deep well at
Alta Loma, Texas, which should spud in the first half of this year. Looking
beyond that we are expecting to be drilling in the Ruvuma Basin (Tanzania)
within the next twelve months. We have an exciting portfolio of international
exploration acreage and with our current programme we are aiming to transform
Aminex while also remaining alert to other worldwide opportunities. Full credit
is due to our technical and operational teams for the progress we have made over
the last year.
Yours sincerely.
Brian Hall
Chairman
28 March 2008
Group Income Statement
for the year ended 31 December 2007
Notes 2007 2007 2006 2006
US$'000 US$'000 US$'000 US$'000
Revenue 2 9,304 5,019
Cost of sales (7,363) (3,401)
Depletion, depreciation and decommissioning (449) (386)
of oil and gas assets
(7,812) (3,787)
Gross profit 1,492 1,232
Administrative expenses (4,970) (3,974)
Depreciation (90) (45)
(5,060) (4,019)
Loss on operations (3,568) (2,787)
Finance income 3 494 165
Finance costs 4 (195) (240)
Loss before tax (3,269) (2,862)
Income tax expense - -
Loss for the financial year attributable to 2 (3,269) (2,862)
equity holders of the Parent Company
Basic and diluted loss per Ordinary Share 5 (1.58) (1.74)
(in US cents)
Group Statement of Recognised Income and Expense
for the year ended 31 December 2007
2007 2006
US$'000 US$'000
Currency translation differences 189 14
Net gain recognised directly in equity 189 14
Loss for the financial year (3,269) (2,862)
Total recognised income and expense for the (3,080) (2,848)
year attributable to the equity holders of
he Parent Company
Group Balance Sheet
at 31 December 2007
Notes 2007 2006
US$'000 US$'000
Assets
Exploration and evaluation assets 6 27,037 17,065
Property, plant and equipment 9,196 9,424
Other investments 813 418
Total non current assets
37,046 26,907
Inventory
98 -
Trade and other receivables 5,212 1,532
Cash and cash equivalents 18,642 3,648
Total current assets 23,952 5,180
Total assets 60,998 32,087
Liabilities
Current liabilities
Interest bearing loans and borrowings (95) (43)
Trade and other payables (6,138) (1,116)
Decommissioning provision (105) (194)
Total current liabilities (6,338) (1,353)
Non current liabilities
Interest bearing loans and borrowings (146) (102)
Decommissioning provision (1,398) (2,183)
Total non current liabilities (1,544) (2,285)
Total liabilities (7,882) (3,638)
Net assets 53,116 28,449
Equity
Issued capital 7 17,835 11,916
Share premium 7 59,719 44,010
Capital conversion reserve fund 234 234
Share option reserve 2,065 729
Share warrant reserve 5,682 899
Foreign currency translation reserve 128 (61)
Retained earnings (32,547) (29,278)
Total equity 53,116 28,449
Group Statement of Cashflows
for the year ended 31 December 2007
2007 2006
US$'000 US$'000
Operating activities
Loss for the financial year (3,269) (2,862)
Depletion, depreciation and decommissioning 539 431
Foreign exchange losses 195 20
Financing income (494) (165)
Financing costs 195 240
Gain on sale of plant and equipment (2) (11)
Impairment provision against listed investment 111 -
Equity-settled share-based payment charge 1,336 542
Increase in inventory (98) -
(Increase)/decrease in trade and other receivables (4,206) 2
Increase/(decrease) in trade and other payables 3,607 (398)
Net cash absorbed by operations (2,086) (2,201)
Cost of decommissioning (15) (165)
Interest paid (18) (12)
Tax paid - -
Net cash outflows from operating activities (2,119) (2,378)
Investing activities
Acquisition of property, plant and equipment (1,355) (1,986)
Expenditure on exploration and evaluation assets (8,776) (1,548)
Acquisition of investment assets (5) -
Proceeds from sale of property, plant and equipment 288 45
Interest received 470 192
Net cash outflows from investing activities (9,378) (3,297)
Financing activities
Proceeds from the issue of share capital 29,330 5,708
Payment of transaction costs (2,935) (279)
Loans repaid (52) (42)
Loans received 148 52
Net cash inflows from financing activities 26,491 5,439
Net increase/(decrease) in cash and cash equivalents 14,994 (236)
Cash and cash equivalents at 1 January 3,648 3,884
Cash and cash equivalents at 31 December 18,642 3,648
Notes to the Financial Information
for the year ended 31 December 2007
1 Statement of Accounting Polices
The financial information has been prepared in accordance with the recognition
and measurement principles of all International Financial Reporting Standards
(IFRS), including Interpretations issued by the International Accounting
Standards Board ("IASB") and its committees and endorsed or expected to be
endorsed by the European Commission.
The accounting policies used are consistent with those set out in the audited
Annual Report for the year ended 31 December 2006, which is available on the
Company's website, www.aminex-plc.com.
2 Segmental Information
The Group's primary reporting format is geographical segments, being America,
Africa, Asia and Europe. The Group's other operations by geographical segment
do not currently represent 10% or more of the Group's revenue or assets and have
therefore not been separately disclosed. The Group's secondary reporting format
is by business segment, being (a) exploration and evaluation, (b) producing oil
and gas properties and (c) the provision of oilfield goods and services.
The Group's revenues and profits arise from oil and gas production in the USA
and the provision of oilfield equipment and services in Europe.
Segment results, assets and liabilities include items directly attributable to
each segment as well as items that can be allocated on a reasonable basis.
Inter-segment revenue is not material and has therefore not been disclosed
separately below. Net assets before borrowings have been adjusted to eliminate
the impact of intercompany financing.
Segment capital expenditure is the total amount of expenditure incurred during
the period to acquire segment assets that are expected to be used for more than
one period.
Segmental revenue
Continuing operations
Producing Provision of Total
Oil and gas Oilfield
properties goods and services
2007 2006 2007 2006 2007 2006
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Country of destination
America 2,759 2,512 141 159 2,900 2,671
Africa - - 4,202 268 4,202 268
Asia - - 2,001 509 2,001 509
Europe - - 201 1,571 201 1,571
Revenue 2,759 2,512 6,545 2,507 9,304 5,019
No revenue arose from exploration activities.
2 Segmental Information (continued)
2007 2006
US$'000 US$'000
Segment net profit/(loss) for the year
US - producing assets 12 144
Africa and Asia - exploration assets (545) (419)
Europe - oilfield services and supplies assets 361 169
Europe - group costs (3,097) (2,756)
Total Group net loss for the year (3,269) (2,862)
Segment assets
US - producing assets 9,502 9,445
Africa and Asia - exploration assets 33,064 17,478
Europe - oilfield services and supplies assets 1,052 289
Europe - group assets 17,380 4,875
Total assets 60,998 32,087
Segment liabilities
US - producing assets (1,870) (2,979)
Africa and Asia - exploration assets (5,132) (84)
Europe - oilfield services and supplies (544) (163)
Europe - group activities (336) (412)
Total liabilities (7,882) (3,638)
Capital expenditure
US - producing assets 1,271 1,295
Africa and Asia - exploration assets 10,726 1,416
Europe - group assets 126 228
Total capital expenditure 12,123 2,939
US depletion and decommissioning charge 449 386
Depreciation - Group assets 90 45
3 Finance income
2007 2006
US$'000 US$'000
Deposit interest income 494 165
4 Finance costs
2007 2006
US$'000 US$'000
Bank loans and overdraft interest 1 1
Other finance charges 17 11
Other finance costs - decommissioning provision interest 177 228
charge
195 240
5 Loss per Ordinary Share
The basic net loss per Ordinary Share is calculated using a numerator of the net
loss for the financial year and a denominator of the weighted average number of
Ordinary Shares in issue for the financial year. The diluted net loss per
Ordinary Share is calculated using a numerator of the net loss for the financial
year and a denominator of the weighted average number of Ordinary Shares
outstanding and adjusting for the effect of all potentially dilutive shares,
including share options, assuming that they had been converted.
The calculations for the basic net loss per share for the years ended 31
December 2007 and 2006 are as follows:
2007 2006
Net loss for the financial year (US$'000) (3,269) (2,862)
Weighted average number of Ordinary Shares ('000) 206,769 164,289
Basic loss per Ordinary Share (US cents) (1.58) (1.74)
There is no difference between the net loss per Ordinary Share and the diluted
net loss per Ordinary Share for the years 31 December 2007 and 2006 as all
potentially dilutive Ordinary Shares outstanding are anti-dilutive. There were
14,596,000 anti-dilutive share options and 36,526,673 anti-dilutive share
warrants in issue as at 31 December 2007.
6 Exploration and evaluation assets
Tanzania Madagascar Other Total
US$'000 US$'000 US$'000 US$'000
Cost and net book value
At 1 January 2007 16,328 349 388 17,065
Additions 6,932 2,819 550 10,301
Employment costs capitalised 288 115 - 403
Increase in decommissioning cost 21 - - 21
Consideration received from joint venture
partners (753) - - (753)
At 31 December 2007 22,816 3,283 938 27,037
7 Issued capital and share premium
Issued Share
Capital Premium
US$'000 US$'000
At 1 January 2007 11,916 44,010
Proceeds from placing net of issue costs 4,499 10,659
Proceeds from rights issue net of issue costs 1,196 3,468
Proceeds from placing net of issue costs 224 683
Transfer from share warrant reserve on lapse of warrants - 899
At 31 December 2007 17,835 59,719
8 Going concern
The directors have given careful consideration to the Group's ability to
continue as a going concern. The directors have concluded that a continuance of
such a position will be dependent on a successful sale of assets or an
alternative method of raising working capital. The directors have a reasonable
expectation that the group will be able to implement this strategy.
We understand it is the auditor's intention, as in prior years, to include an
Emphasis of Matter paragraph in their audit report on the consolidated financial
statements for the year ended 31 December 2007 drawing attention to this matter.
We understand that their opinion will not be qualified in this respect.
9 2007 Annual report and accounts
The 2007 annual report and accounts will be posted to shareholders shortly.
10 Statutory information
The financial information set out above does not constitute the Company's
statutory accounts for the year ended 31 December 2007 within the meaning of the
Companies (Amendment) Act, 1986. The statutory accounts will be finalised on
the basis of the financial information presented by the Directors in the
preliminary announcement and together with the independent auditor's report
thereon will be delivered to the Registrar of Companies following the Company's
Annual General Meeting.
This information is provided by RNS
The company news service from the London Stock Exchange