Interim Results

RNS Number : 2637C

Aminex PLC

29 August 2008

 



29 AUGUST 2008

AMINEX PLC

2008 HALF YEARLY FINANCIAL REPORT

Aminex PLC ('Aminex' or 'the Company' or 'the Group'), the oil and gas company listed in London and Dublin, today announces its half-yearly results for the six months ended 30 June 2008.

Operational Highlights

• Gas discovery at Kiliwani North, Tanzania

• Gas discovery at South Weslaco, Texas

• Deep gas discovery at Alta Loma, Texas

• New licence award at West Songo-Songo, Tanzania

• Preparations ongoing for drilling in the Ruvuma Basin (Tanzania) in early 2009

• Nyuni licence (Tanzania) extended into third period.

Financial Highlights

• Revenue at US$4.5 million 54% ahead of H1 2007

• Exit from Madagascar licence results in write down of US$3.38 million

• Operating loss before other costs reduced by 10% from H1 2007 to US$1.37 million

    Enquiries:

    Aminex PLC                                                      [phone]

    Brian Hall - Chairman

    Simon Butterfield - Finance Director

    Pelham Public Relations                                   [phone]

    Archie Berens

  Operations Summary

2008 to date has been a very active drilling period for Aminex with target depth achieved on six new wells since the beginning of the year, two offshore Tanzania, two in separate areas of Texas and two onshore Egypt. Kiliwani North-1 in Tanzania encountered a 60 metre gross gas column and flowed gas under a full production test at 40 million cubic feet/day with no measurable pressure decline. GU-38 encountered commercial gas in the producing South Weslaco gas field in Texas. Sunny Ernst-2 at Alta Loma, Texas, recently encountered multiple gas bearing sands and will be production-tested in the near future. Two of three obligation wells have now been drilled on the West Esh el Mellahah permit in Egypt at no cost to Aminex. Aminex's planned drilling programme, for which new equity was raised in 2007, is now well advanced, with a success rate of three out of six wells drilled. Options for early commercialisation of the Kiliwani North discovery are under review.

Financial Summary

Aminex Group revenues at US$4.5 million are 54% ahead of the 2007 comparative period, mainly as a result of higher oil and gas prices.  The loss on operating activities before other costs at US$1.37 million shows a 10% improvement over 2007.  During the current period, the Group's disposal of its interest in the share capital of Amicoh Resources Ltd which holds the Manja exploration licence in Madagascar gave rise to a non-cash charge of US$3.38 million, representing the write off of past exploration costs previously capitalised, after offsetting sales proceeds. The resulting loss for the period amounts to US$4.64 million.  However, if the Madagascar write off of US$3.38 million was excluded, the loss for the period on a like-for-like basis would be US$1.26 million which would represent a 21% improvement over the first half of 2007.

Outlook

Aminex will move as rapidly as possible to appraise and commercialise the Kiliwani North discovery while continuing to explore the remainder of the Nyuni licence. A significant two-well exploration drilling programme will commence in early 2009 in the Ruvuma basin of Tanzania, where Aminex is in a 50-50 partnership with Tullow Oil. Subject to the results of imminent production testing, the Sunny Ernst-2 well in Texas will be brought on to commercial production. Seismic surveys will be carried out on the Nyuni licence in Tanzania and on Blocks L17 and L18, nearshore Kenya. Results of the 3D seismic programme over the Shoats Creek partly-developed oilfield in Louisiana will be interpreted and evaluated during the second half of 2009 with a view to formulating a plan for field development. Following the recent fall in oil and gas prices, Aminex might not necessarily obtain a similar average oil or gas price over the next six months to that achieved during the first half. However, it is anticipated that any shortfall of revenues during the second half on account of lower commodity prices would be offset by incremental production.

Operations Report

Aminex's principal activities consist of oil and gas exploration and production on the African continent and in the southern USA. Aminex has a petroleum co-operation agreement with the government of the Democratic People's Republic of Korea and also owns AMOSSCO, an oilfield services company specialising in supply and logistics. During the reporting period Aminex has either started or completed six new wells, two offshore Tanzania, two onshore Egypt and two in separate areas of Texas. The most significant result was the Kiliwani North-1 well in Tanzania which tested commercial quantities of gas.  Both wells drilled in the USA also logged commercial quantities of gas. In Egypt two of three commitment wells were drilled, at no cost to Aminex whose interest is free-carried through to first commercial production, but neither encountered commercial hydrocarbons. Individual oil and gas properties are summarised as follows:

NYUNI/EAST SONGO-SONGO PSA ('Nyuni PSA'), offshore Tanzania.

Two wells were drilled back-to-back on the Nyuni PSA, starting in November 2007 and finishing in March 2008. The first well, Kiliwani-1, encountered sub-commercial shows of gas. The second well, Kiliwani North-1 ('KN-1'), discovered a 60 metre gross gas column in Lower Cretaceous sands which subsequently flowed gas under production test conditions, free of impurities, at 40 million cubic feet per day with no measurable pressure decline. Liquids were flowed with the gas at the rate of one barrel of condensate per million cubic feet of gas.  

An appraisal area for the KN-1 discovery and adjoining blocks has now been applied for so that the Nyuni PSA will from now on consist of two separate areas: (1) the appraisal area for KN-1, and (2) the remainder of the block for further exploration. The second licence period ended on 19th August 2008 and has been extended into a third and final period ending in 2010. In the history of Tanzanian oil and gas exploration, this is the first licence to have been extended into a third period.

In parallel with further seismic, particularly over Songo-Songo Island, options are being examined for early commercialisation of KN-1. Meanwhile the remainder of the licence calls for two further exploration wells to be drilled.

Partners in the Nyuni PSA are Ndovu Resources Ltd. (Aminex subsidiary and operator) 40%, RAK Gas Commission (25%), Key Petroleum Ltd. (20%), East African Exploration Ltd (10%) and Bounty Oil & Gas  NL (5%).

RUVUMA PSA, onshore/offshore southern Tanzania.

Aminex's subsidiary Ndovu Resources Ltd. signed a PSA with the government of Tanzania in November 2005 with an initial work commitment in a four year period of new seismic and two exploration wells. Pursuant to a subsequent farm-out the PSA is now held 50-50 by Ndovu Resources and Tullow Oil, which took over operatorship per agreement at the end of the seismic phase. The Ruvuma PSA covers approximately 12,000 sq. kilometres in the extreme south east of the country of which roughly 80% is onshore and 20% offshore. Within the PSA are two specific licence areas, known as Lindi and Mtwara.  

The Ruvuma PSA is named after the Ruvuma River which forms the frontier between Tanzania and Mozambique to the south. On the Tanzanian side, the coastal Mnazi Bay gas field, now under commercial development, adjoins the Ruvuma PSA area. On the Mozambique side of the river a first licensing round was very heavily bid for so that all prospective acreage is now licensed and subject to material work commitments. Aminex and Tullow hold the onshore exploration rights on the Tanzanian side of the Ruvuma Basin.

One well was drilled by Texaco in the PSA some years back, known as Lukuledi-1. This well fulfilled a drilling obligation before Texaco surrendered the lease but nevertheless encountered shows of oil.

Two exploration wells are planned, commencing in the first quarter of 2009. Aminex considers this licence to be prospective for oil as well as gas.

BLOCKS L.17 & L.18, nearshore Kenya.

Blocks L.17 and L.18 were awarded to Aminex and partners in late 2007. These two contiguous blocks together total approximately 5,000 km², partly onshore and partly offshore, with a southern boundary at the frontier with Tanzania. Under a previous non-exclusive agreement with the government the joint venture had already acquired new marine 2D seismic data and carried out seabed core sampling exercises which demonstrated indications of hydrocarbons. This acreage is considered prospective for natural gas and is close to the energy-short city of Mombasa. Further seismic is planned for 2009. Partners in the joint venture are Aminex Kenya Ltd. 25%, SomKen Ltd. 35% and East African Exploration Ltd, 40%.

WEST ESH EL MELLAHAH-2 ('WEEM-2'), onshore Gulf of Suez, Egypt.

The WEEM-2 licence was awarded to Aminex Petroleum Egypt Ltd. in September 2006 and subsequently subject to several farm-out arrangements. WEEM-2 consists of approximately 1,300 sq kilometres onshore, between the Gulf of Suez and the Red Sea Hills. The area is geologically complex but also lends itself to the possibility of prolific discoveries. In the adjacent WEEM-1 licence area, daily production is thought to exceed 9,000 barrels of oil per day.  

The WEEM-2 licences call for three wells to be drilled in an initial three year period, two of which have now been drilled during 2008 without encountering commercial hydrocarbons. A full evaluation of the new wells is now being carried out and integrated into the regional geology before the third well is drilled, probably in summer 2009. Beneficial interest holders in the licence are Aminex PLC 10%, Sinopex 20%, FS International 2%, First Energy 48% and Groundstar Resources 20%. Aminex's 10% interest is free-carried by other partners through to first commercial production.

ALTA LOMA, Galveston County, Texas, USA

Aminex has been producing gas from the Sunny Ernst-1 well at Alta Loma for several years. The recently drilled Sunny Ernst-2 exploration well ('SE-2') was drilled to a depth of 14,917 feet (4,547 metres) encountering gas bearing sands in three separate zones in the Frio formation, the most significant of which logged 60 feet (18 metres) of net gas-bearing sands. This well is shortly to be tested and, if this is successful, can rapidly be hooked into existing production facilities and commence commercial gas production at an early date.

Partners are Aminex USA, Inc. (37.5%), El Paso Corporation (operator, 25%), Activa Resources (25%) and McFuel Corporation (12.5%).

SHOATS CREEK, Calcasieu Parish, Louisiana, USA

Aminex has held leases comprising the Shoats Creek Field for several years. The field produces limited quantities of crude oil from several formations and lies in an area of forested swamp land with difficult operating conditions and only limited seismic cover to determine complex geology. Forest Oil Corporation has recently conducted an extensive 3D seismic survey over a broad area including the Aminex leases and, under an access agreement, is making the seismic data over Shoats Creek available to Aminex free of charge. Given the large P50 reserves potential of Shoats Creek, this seismic should be an invaluable tool for plotting the future of a promising but under-exploited resource.

  SOUTH WESLACO, Hidalgo County, Texas, USA

Aminex participates in several leases in the South Weslaco gas field in Texas and has successfully drilled four producing wells in the field over the last two years, the most recent of which, GU-38, was drilled in early 2008.  

SOMERSET FIELD, Bexar County, Texas, USA

Aminex holds 100% of multiple leases in the Somerset area close to the city of San Antonio. The Company's US base of operations is at Somerset. Oil is produced from a large number of shallow stripper wells which require careful management but which are profitable in today's oil price regime.  

MANJA LICENCE, MADAGASCAR

Earlier this year Aminex announced that it had sold its 50% interest in Amicoh Resources Ltd. to a fellow shareholder. Progress in Madagascar had been slow and the costs of shooting seismic considerably higher than anticipated. This was due partly to difficult and exceptionally remote operating terrain and partly to rising seismic costs. Aminex considers that selling its interest represented sensible management of its regional portfolio, allowing resources to be diverted to other projects which have the potential to deliver returns in a significantly shorter timeframe. $3.38 million has been written off against the investment in Amicoh Resources Ltd. but this must be judged against the probable costs over the coming months which could have exceeded that amount before a drilling location had even been identified.

NORTH KOREA

In 2004 Aminex signed a 20 year Petroleum Co-operation Agreement with the Government of North Korea with the aim of jointly evaluating and exploiting the country's hydrocarbon resources. This agreement is for twenty years but in the last two years progress has been regrettably slow, partly due to a changing and turbulent political environment within the country. This should be seen as a long term asset and Aminex retains great confidence in the oil and gas potential of North Korea.

AMOSSCO

Aminex Oilfield Services & Supply Company ('AMOSSCO') is based in London and provides procurement and logistical services to a number of oil companies and state organisations in Africa, the Middle East and elsewhere. AMOSSCO is a profitable organisation which also serves as Aminex's internal supply and logistics arm during periods of high drilling activity, able to secure best prices and reliable service in an overheated market.

Financial Review

Revenue Producing Operations

Group revenue comprises oil and gas revenues of US$2.6 million with the balance of US$1.9 million representing revenues from the Group's oilfield services and supplies arm.  Although oil production from Aminex's Somerset, Shoats Creek and Alta Loma fields in the USA of approximately 16,000 barrels was broadly similar in each period, gas production at 109,000 mcf was 85% ahead of the comparative period mainly as a consequence of the commencement of production from the South Weslaco GU-37 well in late 2007.  The average oil price achieved during the first six months of 2008 at US$100.79 per barrel was 80% higher than that of the comparative 2007 period and the average gas price at US$9.03 per mcf was 50% higher.  Revenues from oilfield services and supplies were marginally ahead of the 2007 comparative period. 

The loss on operating activities before other costs of US$1.373 million included a non-cash notional cost of award of share options of US$377,000 whereas the comparative period charge amounted to only $28,000.  If these two amounts were excluded, the adjusted loss on operating activities would be US$996,000 during the current period compared with US$1.493 million for the 2007 period, an improvement of 33%. 

As the Group has negligible interest-bearing debt on its balance sheet, the major component of the financing cost of US$74,000 represents a non-cash write off of the discount arising on the decommissioning provision.

Cash Flows

The Group's net decrease in cash and cash equivalents amounted to US$7.98 million, all of which was financed by cash resources of US$18.6 million held at the beginning of the reporting period. The major element of expenditure during the period was on exploration and evaluation assets which amounted to US$7.3 million and comprised the Group's share of the drilling costs of the Kiliwani-1 and the Kiliwani North-1 wells offshore Tanzania.  Acquisition of property, plant and equipment of US$354,000 during the current period mainly represents the Group's share of the cost of completion of the South Weslaco GU-38 well.  Proceeds on disposal of property, plant and equipment of US$136,000 includes the sale of certain leases in the Somerset oilfield and proceeds from the disposal of the Group's interest in the Manja exploration licence in Madagascar amounts to $250,000.  Interest-bearing debt has been reduced by a further US$66,000 during the current period.  The remaining net expenditure during the current period of US$642,000 mainly consists of net cash absorbed by operations comprising the financing of the current period loss (as adjusted by non-cash items) and working capital movement, together amounting to US$871,000 offset by miscellaneous net receipts of $229,000 including bank interest income received. 

During the comparative period of 2007, net cash generated by operations amounted to $3.6 million mainly as a result of a positive movement in working capital of $4.66 million offsetting the period loss (as adjusted by non-cash items) of $1.03 million.  Expenditures on exploration and evaluation assets amounted to $761,000 comprising the acquisition of seismic data on the Ruvuma and Madagascar acreage as well as commencement of the planning phase of the Kiliwani-1 well. Acquisition of property, plant and equipment of $293,000 during the first half of 2007 mainly related to the completion for production of the South Weslaco GU-37 well.  In June 2007, the Group raised a net $18.65 million in new equity whereas only $37,000 has been raised during the current reporting period. 

Balance Sheet 

Interest-bearing debt (current and non-current) amounted to US$174,000 at 30 June 2008, a 5% reduction from the 30 June 2007 balance of US$183,000.  Total equity has decreased by US$4.73 million since 31 December 2007 after taking into account the current net loss for the period of US$4.64 million and net movement on reserves of US$90,000.

Principal Risks and Uncertainties

Aminex Group activities are carried out in many parts of the world, principally in East Africa, North Africa, North Korea and the USA.  Although the summary set out below is not exhaustive as it is not possible to identify every risk that could affect Aminex's business, the following are considered to be the principal risks and uncertainties facing the business over the next six months:

Exploration risk - the Group's exploration and development activities may be delayed or adversely affected by factors outside its control, in particular: climatic and oceanographic conditions; performance of joint venture partners; performance of suppliers and exposure to rapid cost increases; availability, delays or failures in installing and commissioning plant and equipment; unknown geological conditions resulting in dry or uneconomic wells; remoteness of location; actions of host governments or other regulatory authorities (relating to, inter alia, the grant, maintenance, changes or renewal of any required authorisations, environmental regulations - in particular in relation to plugging and abandonment of wells, or changes in law).

Production risks - the Group's operational activities may be delayed or adversely affected by factors outside its control, in particular: blowouts; unusual or unexpected geological conditions; performance of joint venture partners on non-operated and operated properties; seepages or leaks resulting in substantial environmental pollution; increased drilling and operational costs; uncertainty of oil and gas resource estimates; production, marketing and transportation conditions; and actions of host governments or other regulatory authorities.

Commodity prices - the demand for, and price of, oil and gas is dependent on global and local supply and demand, weather conditions, availability of alternative fuels, actions of governments or cartels and general global economic and political developments.

Currency risk - although the Group's reporting currency is the US dollar which is the currency most commonly used in the pricing of petroleum commodities and for significant exploration and production costs, other expenditures (in particular for central administrative costs) are made in local currencies (as is Aminex's equity funding), thus creating currency exposure.  

Political risks - as a consequence of the Group's activities in different parts of the world, Aminex may be subject to political, economic and other uncertainties, including but not limited to terrorism, military repression, war or other unrest, nationalisation or expropriation of property, changes in national laws and energy policies, exposure to less developed legal systems.

Going Concern Basis - The Directors have given careful consideration to the Group's ability to continue as a going concern and have concluded that a continuance of such a position will be dependent on the successful sale of assets or an alternative method of raising working capital.  The Directors have reasonable expectation that the Group will be able to implement this strategy successfully.  For this reason, they continue to adopt the going concern basis in preparing the half-yearly financial report.

A more detailed listing of risks and uncertainties facing the Group's business is set out in some detail on pages 11 and 12 of the 2007 Aminex PLC Annual Report and Accounts (available on the Aminex website www.aminex-plc.com).

Related Party Transactions

There were no related party transactions during the six-month period to 30 June 2008 that have materially affected the financial position or performance of the Group.  In addition, there were no changes in related party transactions from the most recent annual report that could have had a material effect on the financial position or performance of the Group during the six-month period.

Forward-Looking Statements

Certain statements made in this interim management report are forward-looking statements.  Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from the expected future events or results referred to in these forward-looking statements.

Statement of the directors in respect of the half-yearly financial report

We confirm our responsibility for the half-yearly financial statements and that to the best of our knowledge:

• The condensed set of financial statements comprising the condensed income statement, the condensed statement of recognised income and expenses, the condensed balance sheet and the related notes have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

• The interim management report includes a fair review of the information required by:

(a)    Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and

(b)  Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.

On behalf of the Board

B.A. Hall                                                   S.P. Butterfield

Chairman                                                  Finance Director

29 August 2008

  Independent Review Report to Aminex 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 condensed income statement, the condensed statement of recognised income and expenses, the condensed balance sheet and the related explanatory 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.

This report is made solely to the Company in accordance with the terms of our engagement to assist the compa£ny in meeting the requirements of the Transparency (Directive 2004/109/EC) Regulations 2007 ('the TD Regulations'). Our review has been undertaken so that we might state to the Company those matters we are required to state to it in this report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company for our review work, for this report, or for the conclusions we have reached.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has been approved by, the directors. The directors are responsible for preparing the half-yearly financial report in accordance with the TD Regulations.

As disclosed in note 1, the annual financial statements of the Group are prepared in accordance with IFRSs as adopted by the EU. The directors are responsible for ensuring that the condensed set of financial statements included in this half-yearly financial report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.

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.

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. 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.  

Emphasis of matter - Going concern 

In forming our conclusion on the condensed financial statements, which is not qualified, we have considered the adequacy of the disclosure made in the condensed financial statements concerning the Group's ability to continue as a going concern.  

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 report for the six months ended 30 June 2008 is not prepared, in all material respects, in accordance with IAS 34 as adopted by the EU, the TD Regulations.

KPMG

Chartered Accountants 

1 St. Stephen's Green

Dublin 2.

29 August 2008

CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT 

for the six months ended 30 June 2008   

	Notes	Unaudited 6 months ended 30 June 2008 US$'000		Unaudited 6 months ended 30 June 2007 US$'000		Audited Year ended 31 December  2007 US$'000
Revenue - continuing operations	2	4,514		2,939		9,304
Cost of sales		(2,690)		(2,130)		(7,363)
Depletion, depreciation and decommissioning of oil and gas interests		(294)		(200)		(449)
Total cost of sales		(2,984)		(2,330)		(7,812)
Gross profit		1,530		609		1,492
Administrative expenses		(2,859)		(2,088)		(4,970)
Depreciation		(44)		(42)		(90)
Total administrative expenses		(2,903)		(2,130)		(5,060)
Loss on operating activities before other costs		(1,373)		(1,521)		(3,568)
Other costs - loss on disposal of Manja licence	3	(3,379)		-		-
Loss on operating activities		(4,752)		(1,521)		(3,568)
Financing income	4	190		37		494
Financing costs	5	(74)		(117)		(195)
Loss before income tax		(4,636)		(1,601)		(3,269)
Income tax expense	6	-		-		-
Net loss for the period - continuing operations	2	(4,636)		(1,601)		(3,269)
Basic and diluted loss per share (cent)	7	(1.91)		(0.93)		(1.58)

CONDENSED CONSOLIDATED INTERIM STATEMENT OF RECOGNISED INCOME AND EXPENSE

for the six months ended 30 June 2008

	Unaudited 6 months ended 30 June 2008 US$'000		Unaudited 6 months ended 30 June 2007 US$'000		Audited Year ended 31 December 2007 US$'000
Net currency translation gain recognised directly in equity	(504)		108		189
Loss for the financial period	(4,636)		(1,601)		(3,269)
Total recognised income and expense for the
financial period	(5,140)		(1,493)		(3,080)
Attributable to the equity holders of the Company	(5,140)		(1,493)		(3,080)

  CONDENSED CONSOLIDATED INTERIM GROUP BALANCE SHEET

At 30 June 2008               

	Notes	Unaudited 30 June 2008 US$'000		Unaudited 30 June  2007 US$'000		Audited 31 December 2007 US$'000
ASSETS
Exploration and evaluation assets	8	30,111		17,809		27,037
Property, plant and equipment	9	9,057		9,488		9,196
Other investments		813		809		813
Total non current assets		39,981		28,106		37,046
Inventory		1,068		-		98
Trade and other receivables		3,402		3,153		5,212
Cash and cash equivalents	10	10,664		25,188		18,642
Total current assets		15,134		28,341		23,952
Total assets		55,115		56,447		60,998
LIABILITIES
Current liabilities
Interest-bearing loans and borrowings		(51)		(86)		(95)
Trade and other payables		(4,980)		(7,376)		(6,138)
Decommissioning provision		(117)		(216)		(105)
Total current liabilities		(5,148)		(7,678)		(6,338)
Non-current liabilities
Interest-bearing loans and borrowings		(123)		(97)		(146)
Decommissioning provision		(1,454)		(2,265)		(1,398)
Total non-current liabilities		(1,577)		(2,362)		(1,544)
Total liabilities		(6,725)		(10,040)		(7,882)
NET ASSETS		48,390		46,407		53,116
EQUITY
Issued capital	11	17,842		16,415		17,835
Share premium	11	59,749		54,669		59,719
Capital conversion reserve fund		234		234		234
Share option reserve		2,442		757		2,065
Share warrant reserve		5,682		5,164		5,682
Foreign currency reserve fund		(376)		47		128
Retained earnings		(37,183)		(30,879)		(32,547)
TOTAL EQUITY		48,390		46,407		53,116

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASHFLOWS

for the six months ended 30 June 2008    

	Unaudited 6 months ended 30 June 2008 $'000		Unaudited 6 months ended 30 June 2007 $'000		Audited Year ended 31 December 2007 $'000
Operating activities
Loss for the financial period	(4,636)		(1,601)		(3,269)
Depletion, depreciation and decommissioning	338		242		539
Foreign exchange losses	(504)		112		195
Financing income	(190)		(39)		(496)
Financing costs	74		117		195
Loss on sale of evaluation assets	3,379		-		-
Impairment provision against listed investment	-		111		111
Equity-settled share-based payment charge	377		28		1,336
Increase in inventory	(970)		-		(98)
Decrease/(increase) in trade and other receivables	1,787		(625)		(4,206)
(Decrease)/increase in trade and other payables	(526)		5,282		3,607
Net cash (absorbed)/generated by operations	(871)		3,627		(2,086)
Cost of decommissioning	(2)		(4)		(15)
Interest paid	(4)		(9)		(18)
Tax paid	-		-		-
Net cash (outflows)/inflows from operating activities	(877)		3,614		(2,119)
Investing activities
Acquisition of property, plant and equipment	(354)		(293)		(1,355)
Expenditure on exploration and evaluation assets	(7,302)		(761)		(8,776)
Acquisition of investment assets	-		-		(5)
Proceeds from sale of unlisted investment	27		-		-
Proceeds from sale of Manja licence	250		-		-
Proceeds from sale of property, plant and equipment	136		259		288
Interest received	171		37		470
Net cash outflows from investing activities	(7,072)		(758)		(9,378)
Financing activities
Proceeds from the issue of share capital	37		21,277		29,330
Payment of transaction costs	-		(2,631)		(2,935)
Loans repaid	(66)		(21)		(52)
Loans received	-		59		148
Net cash (outflows)/inflows from financing activities	(29)		18,684		26,491
Net (decrease)/increase in cash and cash equivalents	(7,978)		21,540		14,994
Cash and cash equivalents at 1 January	18,642		3,648		3,648
Cash and cash equivalents at end of the financial period	10,664		25,188		18,642

  NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

for the six months ended 30 June 2008

1.      Basis of preparation

The condensed consolidated interim financial statements for the six months ended 30 June 2008 are unaudited but have been reviewed by the auditor.  The financial information presented herein does not amount to statutory financial statements that are required by Section 7 of the Companies (Amendment) Act, 1986 to be annexed to the annual return of the Company. The statutory financial statements of the financial year ended 31 December 2007 were annexed to the annual return and filed with the Registrar of Companies. The audit report on those statutory financial statements was unqualified. The auditor drew attention to the Company's disclosures made in the Basis of Preparation paragraph in the Statement of Accounting Policies included in the 2007 Annual Report concerning the Group's ability to continue as a going concern but the auditor's opinion was not qualified in this respect.

The condensed consolidated interim financial statements have been prepared in accordance with IAS 34 Interim Financial reporting as adopted by the EU.

The same accounting policies and methods of computation are followed in these condensed consolidated financial statements as were applied in the consolidated financial statements for the year ended 31 December 2007, which were prepared in accordance with International Financial Reporting Standards as adopted by the EU (EU IFRS). The International Accounting Standards Board and the International Financial Reporting Interpretations Committee ('IFRIC') have issued the following interpretation which will be effective for the Group's financial statements for the year ending 31 December 2008:

● IFRIC Interpretation 11 ' Group and Treasury Share Transactions'.

This does not have a material effect on the Company's financial statements.

  NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

for the six months ended 30 June 2008

2.  Segmental disclosure

	Unaudited 6 months ended 30 June 2008 $'000		Unaudited 6 months ended 30 June 2007 $'000		Audited  year ended 31 December 2007 $'000
Segmental revenue
US production activities	2,616		1,246		2,759
Oilfield services and supplies	1,898		1,693		6,545
Total Revenue	4,514		2,939		9,304
Segmental net profit/(loss) for the period
US - producing assets	792		(65)		12
Africa and Asia - exploration assets (*)	(3,688)		(235)		(545)
Europe - oilfield services and supplies assets	187		126		361
Europe - Group costs	(1,927)		(1,427)		(3,097)
Group net loss for the period	(4,636)		(1,601)		(3,269)
Segmental assets
US - producing assets	10,020		9,629		9,502
Africa and Asia - exploration assets	33,833		25,731		33,064
Europe - oilfield services and supplies assets	872		509		1,052
Europe - Group assets	10,390		20,578		17,380
Total assets	55,115		56,447		60,998
Segmental liabilities
US - producing assets	(1,828)		(2,953)		(1,870)
Africa and Asia - exploration assets	(3,845)		(5,900)		(5,132)
Europe - oilfield services and supplies assets	(312)		(345)		(544)
Europe - Group activities	(740)		(842)		(336)
Total liabilities	(6,725)		(10,040)		(7,882)

(*) The net loss applicable to Africa and Asia exploration assets includes the loss on disposal of the Manja licence.  NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

for the six months ended 30 June 2008

3.  Other assets - loss on disposal of Manja licence

On 19 June 2008, the Group disposed of its 50% interest in Amicoh Resources Limited, which held the Manja licence in Madagascar. The interest was sold to the other 50% shareholder in Amicoh Resources Limited for a cash consideration of US$250,000.  The net loss on disposal was US$3,379,000 comprising:

	Unaudited 6 months ended 30 June 2008 $'000
Amounts (written off)/written back:
Exploration and evaluation assets	(3,359)
Trade and other receivables	(264)
Cash and cash equivalents	(45)
Trade and other payables	39
	(3,629)
Less: proceeds from disposal of Amicoh Resources Limited	250
	(3,379)

 4.  Financing income

	Unaudited 6 months ended 30 June 2008 $'000		Unaudited 6 months ended 30 June 2007 $'000		Audited  year ended 31 December 2007 $'000
Deposit interest income	147		37		494
Gain on sale of oil and gas property	16		-		-
Gain on sale of investment	27		-		-
	190		37		494

5.  Financing costs 

	Unaudited 6 months ended 30 June 2008 $'000		Unaudited 6 months ended 30 June 2007 $'000		Audited  year ended 31 December 2007 $'000
Bank loans and overdraft interest	-		2		1
Decommissioning provision interest charge	68		109		177
Other finance charges	6		6		17
	74		117		195

  NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

for the six months ended 30 June 2008

6.  Tax

The Group has not provided any tax charge for the six month periods ended 30 June 2008, 30 June 2007 or year ended 31 December 2007. As disclosed in the 2007 annual report, the Group's operating divisions have accumulated losses which are expected to exceed profits earned by operating entities.

7.  Loss per share

The basic loss per Ordinary Share is calculated using a numerator of the loss for the financial period and a denominator of the weighted average number of Ordinary Shares in issue for the financial period. The diluted loss per Ordinary Share is calculated using a numerator of the loss for the financial period and a denominator of the weighted average number of Ordinary Shares outstanding and adjusted for the effect of all potentially dilutive shares, including the share options and share warrants, assuming that they have been converted.

The calculations for the net basic loss per share of the financial periods ended 30 June 2008, 30 June 2007 and the year ended 31 December 2007 are as follows:

	Unaudited 6 months ended 30 June 2008		Unaudited 6 months ended 30 June 2007		Audited Year ended 31 December 2007
Numerator for basic and diluted loss per share:
Net loss for the financial period ($'000)	(4,636)		(1,601)		(3,269)
Weighted average number of shares:
Weighted average number of ordinary shares ('000)	242,108		172,375		206,769
Basic and diluted loss per share (cents)	(1.91)		(0.93)		(1.58)

There is no difference between the net loss per Ordinary Share and the diluted net loss per Ordinary Share for the financial periods ended 30 June 2008 and 30 June 2007 and the year ended 31 December 2007 as all potentially dilutive Ordinary Shares outstanding are anti-dilutive. There were 16,221,000 anti-dilutive share options and 36,439,439 anti-dilutive share warrants in issue as at 30 June 2008.

8.  Exploration and evaluation assets

	Tanzania	Madagascar	Other	Total
	$’000	$’000	$’000	$’000
At 1 January 2008	22,816	3,283	938	27,037
Additions	6,058	76	-	6,134
Employee costs capitalised	299	-	-	299
Disposals	-	(3,359)	-	(3,359)
At 30 June 2008	29,173	-	938	30,111

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

for the six months ended 30 June 2008

9.  Property, plant and equipment

	Developed and producing oil and gas properties - USA	Other assets	Total
	$’000	$’000	$’000
Cost
At 1 January 2008	12,862	536	13,398
Additions	326	2	328
Disposals	(394)	(59)	(453)
Exchange rate adjustment	-	7	7
At 30 June 2008	12,794	486	13,280
Depreciation
At 1 January 2008	3,949	253	4,202
Charge for the period	294	44	338
Released by disposals	(295)	(25)	(320)
Exchange rate adjustment	-	3	3
At 30 June 2008	3,948	275	4,223
Net book value
At 30 June 2008	8,846	211	9,057
At 1 January 2008	8,913	283	9,196

Property, plant and equipment shown above include assets held under finance leases as follows:

	Unaudited 6 months ended 30 June 2008 $'000		Unaudited 6 months ended 30 June 2007 $'000		Audited  year ended  31 December 2007 $'000
Net carrying value	205		127		271
Depreciation charge	33		17		62

At 30 June 2008 the Group had capital commitments of approximately US$2.8 million.

10. Cash and cash equivalents

Included in cash and cash equivalents is an amount of US$347,000 held on behalf of the non-operating joint venture partners where the Aminex Group acts as operator of the joint venture.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS (unaudited)

for the six months ended 30 June 2008

11. Issued capital and share premium

		Issued		Share
		Capital		Premium
		$'000		$'000
At 1 January 2008		17,835		59,719
Proceeds from placing net of issue costs		7		30
At 30 June 2008		17,842		59,749

12. Statutory Information

The interim financial information to 30 June 2008 and 30 June 2007 is unaudited and does not constitute statutory financial information. The information given for the year ended 31 December 2007 does not constitute statutory accounts within the meaning of Section 19 of The Companies (Amendment) Act 1986.  The statutory accounts for the year ended 31 December 2007 have been filed with the Registrar.  This announcement is being sent to shareholders and will be made available at the Company's registered office at 6 Northbrook Road, Dublin 6 and at the Company's UK representative office at 7 Gower Street, London WC1E 6HA. 

 

END

 

 

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