Audited Results for the twelve months ended 31 ...

28/05/2010 GB00B23JN426/GBP/PLUS-exn Oracle Coalfields PLC ("Oracle Coalfields" or the "Company") Audited Results for the twelve months ended 31 December 2009 Oracle Coalfields PLC (PLUS: ORCP), the UK developer of a 1.4 billion tonne coal deposit in southern Pakistan, is pleased to announce its audited results for the period ended 31 December 2009. The Company continues to make good progress towards meeting its objective of delivering a cost-effective coal mine, to supply a mine-mouth power station on the Block VI coal deposit in the Thar Coalfield of Southern Pakistan, supplying the Karachi Electric Supply Company. Short-term cash generation would come from supplying Lucky Cement Limited, a major cement producer, with coal, prior to the power station being completed. The Directors present their report with the financial statements of the Company and the Group for the year ended 31 December 2009. PRINCIPAL ACTIVITY The principal activity of the Group in the year under review was that of the exploration for coal. REVIEW OF BUSINESS Period Highlights - Placing raised £249,400 - Work programme commenced on a Bankable Feasibility Study (BFS) on the Block VI licence, including the Environmental & Social Impact Assessment (ESIA) - Entered Memorandum of Understanding with Karachi Electric Supply Company (KESC) - Entered Memorandum of Understanding with Lucky Cement Limited Review In the past 12 months, Oracle Coalfields (referred to as "the Company" or "Oracle Coalfields") continues to make good progress towards meeting its objective of delivering a cost-effective coal mine, to supply a mine-mouth power station on the Block VI coal deposit in the Thar Coalfield of Southern Pakistan. The project has attracted the Pakistan Government's support because it sets out to address and resolve the country's urgent need for new power generation facilities as current supply is increasingly failing to meet demand. Karachi, an industrial hub of more than 15 million people located in the Sindh Province, experiences at least 5-6 hours of load-shedding on a daily basis, and other major cities experience similar interruptions. As this leads to population discontent and industrial disruption and has a negative impact on the economy, it is of primary concern to the Pakistan Government. Oracle Coalfields has entered Memoranda of Understanding with the Karachi Electric Supply Company (KESC) and the Lucky Cement Limited. These two relationships are of significant importance to Oracle Coalfields as they potentially secure long term coal off-take from the Company's mine. The Company seeks to shorten the lead time necessary to bring the coal mine to production and thereby to generate early cash flow. This could be achieved by selling coal to the Lucky Cement Limited as industrial fuel. Coal production could be expanded to fuel one or more power plants from the time that they are commissioned. This will also diversify the income sources for the Company. Production levels for the coal mine would then be initially 2.5 million tonnes per year rising to 3.5-4.0 million tonnes per year as the demand for power generation starts up. In view of this early start-up option the Company has also re-assessed the mining methodology to be applied. The mine remains based on an open pit design and the most cost-effective way to operate the mine initially would be through a truck and shovel operation. Bucketwheel equipment would be brought in as production increases to 4 million tonnes per year at the time of power plant commissioning. Overall the year was mixed, particularly the reception the Company received from the London market when seeking to raise additional funds for the feasibility stage. This was due to the mixed news from Pakistan driven mainly by fears of political uncertainty and economic fragility. The Company nevertheless was able to raise funds to commence the Bankable Feasibility Study (BFS) including the Environmental & Social Impact Assessment (ESIA). Block VI, Thar Coalfield, Sindh Province The work programme for developing the 1.4bn tonnes Block VI coal deposit is proceeding, with the immediate target of completing the BFS in the second half of 2010. Wardell Armstrong International (WAI) was appointed to prepare the ESIA which forms part of the BFS and, after a site visit, submitted a detailed Scoping Study to the Company in June. Additional international consultants have also been identified for the various technical studies needed for completion of the BFS, such as hydrogeology, geotechnical and mine design. All have indicated they are comfortable with the project and its location. The Scoping Study is an enabling document that sets out the main project parameters for the baseline studies, and identifies the potentially significant environmental and social impacts of the planned open pit mining operation. The baseline studies are to commence shortly. The next stage of the ESIA process is collection of environmental and social baseline data to pinpoint the current site setting, and sufficient information to enable detailed impact prediction, both in terms of significance and scale. The Scoping Study confirmed that the proposed open pit mining operation will require the dewatering of the two aquifers lying above the main coal seam in Block VI. This will have the valuable potential to provide water for the project as well as the local population. Subject to timely completion of funding, it is envisaged that coal mining could commence in early 2011 with first coal production in early 2012. Prior to the start of the BFS, the Company completed a drilling programme in 2008 to verify previous work done on Block VI and also enable the Company to take the project to the internationally recognised JORC standard and all of which was overseen by the UK-based international coal consultants, Dargo Associates Limited. Following is the summary resource table for Block VI: Lignite coal resources/reserves for Block VI (JORC) Note: Mt = Million tonnes Lignite coal Lignite coal Overburden measured resources proved reserves Mm3 Mt Mt Block VI total area 10,200 1,423 - Total Mine area 3,673 653 - Phase I Open pit area 885 - 128 Phase II Open pit area 1,685 - 243 Source: Dargo Associates Limited Oracle Coalfields' 80% owned Pakistan subsidiary, Sindh Carbon Energy Limited, was granted the 66.1 square kilometre Block VI licence of the Thar Coalfield by the Mines and Mineral Development, Government of Sindh, in November 2007 for an initial period of three years. The Geological Survey of Pakistan had compiled a substantial amount of information on the geology of the Thar Coalfield since its discovery in the 1980s, including the Company's Block VI licence area. The Company is targeting to secure the Mining Lease in the second half of 2010, subject to timely completion of the coal feasibility study. Below is a brief description of Block VI and location: - Located 380 km from Karachi, Sindh Province - Block VI is situated 32 km from the town of Islamkot with close proximity to roads and power networks - In 2006 China NE Geological Survey Bureau (CNGB) drilled 35 boreholes, a total of 9,852 metres, of which 5,986 metres are cored, validated by independent consultants to take it to JORC resource - All boreholes have been geophysically logged - log suite: natural gamma, density, resistivity, and caliper - Good infrastructure including roads, electricity grid linking major cities and township, etc. The coal at Block VI has an average calorific value of 3,537 kcal/kg, a moisture content of 40%, which can be reduced to 14% by drying, a sulphur level of 1.2%, and an ash content of 7.5%, which is low when compared with typical lignite coals. Coal tests were carried out by TES Bretby Ltd in the UK, and the Fuel Research Centre, part of Pakistan Council of Scientific and Industrial Research (PCSIR), Karachi and rock samples were tested by Strata Surveys Ltd of the UK. The coal quality is suitable for power plants and industry, particularly in the cement sector. There was good media coverage of the Company in the U.K. as well as in Pakistan, notably a well received article "Developing Pakistan's Coal" published in the World Coal Magazine July 2009 issue giving a comprehensive overview of developing the coal mine in the Company's Block VI licensed area. Furthermore, during the year the Company commissioned Edison Investment Research to do research notes on the Company to enhance the profile of the Company and reach to a wider investor audience. Karachi Electric Supply Company (KESC) Oracle Coalfields has always intended that the planned mine-mouth power station would be owned and operated by a separate power generating company. During the year, the Company met a number of potential power plant partners and in the second half of the year Oracle Coalfields commenced formal dialogue with Karachi Electric Supply Company (KESC). KESC is a major local power utility in the Sindh Province and third largest power utility in Pakistan. Below is a brief summary of KESC (Source: 2009 KESC Annual Report): - A public listed power company with financial backing from leading Middle-Eastern private equity firm Abraaj Capital - Current capacity of 1,611 MW, mostly through increasingly expensive gas and oil-fired power stations - Seeking to increase installed capacity to address demand growth of 7-8% pa - Revenue from sale of energy grew by 17.06% in 2008/09 resulting solely from tariff increases of over 18% Oracle Coalfields entered a Memorandum of Understanding (MOU) with KESC in December 2009 and following are the salient features of the MOU: - KESC is embarking on a fast-track programme to overcome the existing and projected energy shortage within its licensed area. These cover Karachi and its suburbs up to Dhabeji and Gharo in Sindh as well as Hub, Uthal, Vinder and Bela in Baluchistan. The utility has declared its intention to develop and implement several power projects including, but not limited to, coal-fired power plant(s). - Oracle Coalfields has proposed to KESC the establishment of a coal-fired power plant, with an initial capacity of 300MW and the potential to increase this to 1,100 MW. The power plant will be fuelled by lignite coal to be mined from the Company's Block VI project in the Thar Coalfield in the Province of Sindh. Sindh Carbon Energy Limited, Oracle Coalfields' local subsidiary, will operate the BlockVI coal mine. - Oracle Coalfields has agreed to secure and provide to KESC long-term coal supply at competitive prices and of quality and specification as desired for the initial operation of a 300MW coal-fired power plant - with a suitable configuration to be setup in accordance with the terms emerging subsequent to this MOU. - Oracle Coalfields and KESC will share technical information to assist each other in the completion of their respective work, including the Environmental & Social Impact Assessment for the coal mine and power plant respectively. The ultimate objective is to enter into a Joint Venture (equity participation) or Joint Development Agreement to establish a mine-mouth power plant at the Company's Block VI project. - KESC has entered into exclusivity with Oracle Coalfields and shall not during the validity of the MOU or Joint Development Agreement enter into an arrangement to develop a mine-mouth power plant at Block VI with any other entity so far as Oracle Coalfields and/or its local subsidiary, Sindh Carbon Energy Limited, are in a position to meet their requirement for the delivery of the required coal in the desired time frame mutually agreed between Oracle Coalfields and KESC at a price which does not affect the economic viability of the mine mouth power plant. Lucky Cement Limited In addition, Oracle Coalfields is looking for additional income with the intention to generate early cashflow for the Company and shorten the lead time to coal production. The Company therefore explored the opportunity to enter potential agreements with local cement companies. Pakistan's cement sector is large and is a major user of coal, mainly imported, to support its cement works. Over the year, Oracle Coalfields met several local cement companies, including Lucky Cement Limited, which are key players in the sector. After meetings with Lucky Cement it was clear that it was important for Oracle Coalfields to enter a relationship with Lucky Cement mainly due to the potential longevity in supplying coal to the cement company as it is the largest cement manufacturer in Pakistan and the potential significant savings the cement manufacturer will gain by being less dependent on costlier imported fuel. There is significant demand for coal from cement manufacturers in Pakistan. Currently, the major manufacturers import coal at international prices. As a result, a number of these cement manufacturers are keen to switch to domestic coal supplies and are prepared to enter supply agreements. Below is a brief summary of Lucky Cement (Source: Lucky Cement Annual Report 2008 and 2009): - The largest Portland cement producer in Pakistan with market share of 19.2% - Capacity of 7.75 mtpa with annual production of 5.9 mt - 58% of annual production volume is exported and 42% supplied to the domestic construction industry - Imported coal costs in H1 2009 ranged between $65 - $85 per tonne; coal expert, Gerald McClosky, forecasts such costs exceeding $100/t in 2010. - Recorded gross sales revenue growth of 48% in year ending June 2009 - Largest cost of production is energy (for oil, gas and coal) which constitutes 72.62% of total production costs. The Company entered a Memorandum of Understanding (MOU) with Lucky Cement in December 2009. The salient features of the MOU are as follows: - Oracle Coalfields' primary objective is the development of its Block VI project to supply lignite coal to a mine-mouth power plant(s). In addition and in the interim, Oracle Coalfields is also pursuing the potential for early cash flow from the supply of lignite coal to the local cement industry. - Lucky Cement has expressed an interest in using the indigenous coal to be mined at Block VI, after techno-commercial evaluation of the coal, for its cement plants. - Lucky Cement shall subsequently assess the costing for transportation and utilisation of this lignite in its cement kilns with minimum effects on the pyro-process, and endeavour to reach a commercially viable solution before entering into a Coal Supply Agreement ("CSA"). - Oracle Coalfields and Lucky Cement have agreed to cooperate on the exchange of relevant information and future planning so that they may reach a workable arrangement for Oracle Coalfields through its local subsidiary Sindh Carbon Energy Limited ("SCEL") to supply coal to Lucky Cement. - At an appropriate time mutually agreed by Oracle Coalfields and Lucky Cement, the CSA shall be signed between Oracle Coalfields /SCEL and Lucky Cement. The CSA will replace this MOU. The CSA shall be a binding document between Oracle Coalfields/SCEL and Lucky Cement. - The representatives of Oracle Coalfields and Lucky Cement shall meet at regular intervals to discuss the progress of the Oracle Coalfields/SCEL Work Programme and also to set a time-table for signing the CSA. This would likely be after the certification by Oracle Coalfields/SCEL of the quality of coal they would be able to supply after treatment and acceptable to Lucky at economical terms and conditions. - This arrangement is non-exclusive and does not preclude future sales to other cement companies. Entering relationships with Lucky Cement and KESC, further secures our objective of becoming a leading supplier of coal in Pakistan. In addition to our primary objective of supplying coal to the power generation market in Pakistan, Oracle Coalfields is also keen to supply local industry, particularly the cement industry. The Company believes this will generate significant value to shareholders and accelerate cash generation to the Company. Government Support During the year the Company met with senior officials from the Government of Sindh, Mines & Minerals Development Department (MMD) and ministers at the Federal level. From these meetings and discussions, it was very evident that official support for our project continues to grow. Amongst other things, the Government is giving active consideration to funding the construction of a canal to provide additional water to the project area, undertaking the groundwork needed to link the project to the national rail system, and upgrading the existing grid to 500KW. As in the past, all infrastructure investment is continuing to be undertaken by government funding. Oracle Coalfields had meetings with the Thar Coal Energy Board (TCEB), an entity set up at the federal level that comprises federal and provincial level ministers and secretaries. The objective of TCEB is to 'fast-track' procedures for implementation of projects in Thar. The TCEB is implementing a program to convert the Thar Coalfield area into a Special Economic Zone (SEZ). The SEZ would be investor-friendly with particular emphasis on tax-breaks. A committee has recently been formed by TCEB/MMD to fast-track infrastructure development relevant to the Thar coal field area at their cost by overseeing the work to be done by local contractors and agencies. Oracle Coalfields has been placed on this committee not only to provide input but also jointly with Sindh Government monitor the progress on infrastructure development work programme. Presently, the work involves upgrading the road network, electricity grid, construction of airstrip in Mithi/Islamkot and establishing a canal and railway link to the Thar coal mine area. Khorewah, Indus East, Sindh Province In early February 2007 the Company's subsidiary, Sindh Carbon Energy Limited, was granted an exploration licence over 100 square kilometres of the KhoreWah coalfield in the Indus East region of the Sindh Province of Pakistan. The depth of the coal seam is such that underground mining would be necessary in order to make the project economic. The granting of the more advanced and geologically attractive Block VI project in the Thar Coalfield has seen the development of the KhoreWah licence deferred in recent months in order to utilise available funds on the Thar Coalfield. However, whilst available resources have been focussed on the development of Block VI, it remains the Company's intention to further develop our KhoreWah licence at a suitable point in the future. Other initiatives During the half-year, Oracle Coalfields initiated a preliminary study into other possible industrial uses of Thar coal, in addition to power generation and in the domestic cement industry. With new technologies being developed outside Pakistan to convert lignite coal into more valuable end products, the Company intends to monitor closely these initiatives for possible future applications in Pakistan. Initially, the long-established processes of liquefaction and gasification can be used to convert lignite coal into liquefied fuels and synthesis gas. In the Australian State of Victoria, this synthesis gas is being used successfully as feedstock for the production of methanol, ammonia (fertiliser) and hydrogen. The technology is believed to be about two years from commercialisation, but such applications could be of obvious relevance to Pakistan. Oracle Coalfields is willing to evaluate acquisition opportunities for significant equity investment in near-producing or producing coal mines to generate additional immediate income to the Company. The Pakistan Power Market At the time of writing, Pakistan's power generation has deteriorated, with an increase in load - shedding which has affected business and caused a rise in social discontent. Currently, the country is short of 3,000-3500 MW to meet immediate demand. The government have put in place various initiatives to attract immediate development of power plants as well as availability of rental power plants. These initiatives have generally resulted in a poor response from the private sector, though a handful of small independent power plants came into operation recently in different parts of the country. If the Gross Domestic Product (GDP) of the country grows as forecast by an average 6-8% per annum over the next 10 years, according to government sources, the country would require approximately 50,000 MW in the next 10 years. There is certainly a major shortfall in electricity supply. Coal has an important role to play in the country's energy mix in the coming years and it is forecast that coal would represent about 17% of all feedstock by 2025 (currently it is less than 1%). International Coal Market - Supply, Demand, Outlook Demand for coal is showing signs of recovering in 2010 following the decline experienced during the global financial crisis. According to the US Energy Information Administration's Quarterly Coal Report, the final quarter of 2009 saw the beginnings of recovery in the US industry, one of the hardest hit areas. While coal production in the US declined slightly between the third and fourth quarters of the year - a decrease of 3 percent to 260 million tonnes (Mt)- exports increased by 16.8 percent to 18 Mt. The higher exports were driven mainly by increased demand for metallurgical coal in China. China also became an importer of thermal coal last year for the first time, purchasing approximately 80Mt of thermal coal last year, a big u-turn from net exports of about 70Mt in 2005. The Chinese thermal coal market has tightened on the back of a clampdown on illegal and unsafe mining, which has forced the closure of hundreds of small mines in key coal-producing Shanxi province. Beijing's shift has more than offset poor demand in Europe and the US. India's strong consumption is also helping to tighten the market. Meanwhile, reports out of Australia indicate annual thermal coal contract prices have increased by 40 per cent. Xstrata and PT Bumi, the world's largest exporters of thermal coal, which is used to fire power stations, announced they had signed annual contracts at US$98 and US$104 a tonne, respectively, up from last year's settlement of US$70 a tonne. According to the Washington Energy Information Administration's International Energy Outlook world consumption of coal is projected to increase to 7,245 million tons by 2015, an average annual increase of 2.5 percent per year. Coal consumption in the emerging economies of Asia is projected to hit 3,715 million tons by 2015 and 4,435 million tons in 2025. The International Energy Agency's World Energy Outlook 2009 notes that by 2030, world primary energy demand will be a dramatic 40 percent higher than 2007 levels. Collectively, non-OECD countries will account for over 90 percent of the increase, their share of global primary energy demand rising from 52 percent to 63 percent. Outside of Asia, the Middle East sees the fastest rate of increase, contributing 10 percent to incremental demand. Fossil fuels will remain the dominant sources of energy worldwide, accounting for 77 percent of the demand increase to 2030. Demand for coal is expected to grow by 53 percent by 2030. Electricity demand is also expected to grow massively - by 76 percent to 2030, requiring 4,800 gigawatts (GW) of capacity additions - almost five times the existing capacity of the US. Coal remains the dominant fuel of the power sector, the report notes, its share of the global power generation mix rising by 2 percentage points to 44 percent by 2030. The current and forecast upward trend in international coal prices will impact seriously on local power generation and industry costs in Pakistan and this will only add to the critical urgency of having imported coal replaced by appreciably cheaper indigenous coal supplies as soon as possible. The Company will seek to enter long term supply agreements with local customers, at prices that will enable it to make a proper return on its investment, but still attractively affordable for its customers to press for the assurance of long term agreements. With demand nevertheless still outstripping available supply, the Company will be well placed to sell its production selectively to prime customers, both in the power generation sector and elsewhere in industry. Principal risks and uncertainties facing the Group Following completion of the exploration work programme at Block VI in the Thar Coalfield and commencement of the technical studies and the related Environmental & Social Impact Assessment leading to the planned completion of the Bankable Feasibility Study in the second half of 2010, the principal risks and uncertainties include those summarised below: - the ability to raise sufficient funds to continue to develop Block VI - the conclusion of production off-take agreements at requisite commercial rates to justify the project investment - the prompt sourcing of specialist mining equipment to ensure earliest project realisation - the stabilisation of the on-going political situation so as to ensure the vital interest and support of major financial lenders for the project - the maintenance of current government legislation and regulations that have so far favoured the development of the project as a flagship foreign investment necessary to strengthen the country's economy - infrastructure development plans for the Thar region being funded and completed by the relevant federal and/or provincial government authorities - the satisfaction of environmental and social concerns and the provision of viable remedies Financials The financial results for the twelve months to 31 December 2009 show a loss for Oracle Coalfields Plc Group of Companies after taxation of £235,230. At the period end, the Group had cash at bank and in hand of £5,859 and total assets less current liabilities of £527,937. The basic loss per share was 0.20p. The loss is attributable to the development of the Company's coal licences in Pakistan and administrative expenses. Post Period The Company is proceeding with completion of the feasibility study to bankable status with a target to complete the various studies in the second half of 2010. Further funds are being raised to ensure that the Company can complete the feasibility study on schedule and prepare the Company for the larger fund raise to bring the coal mine to production. The Company shall keep the market informed of its progress and an overall presentation of the work programme shall be made in the next Annual General Meeting. Outlook The Board is pleased that the Block VI, Thar coal project Bankable Feasibility Study (BFS) is underway. The objective is to reduce project risks through an international quality feasibility study. For this reason, independent international consultants are being appointed with experience in developing coal mine operations of this nature. 2008-2009 had been challenging for most natural resources companies worldwide. This is largely due to investor caution in investing in the natural resources sector, driven by global economic downturn and world financial markets turmoil. In addition, in the Company's case, the security situation in Pakistan has also been fragile in recent months due to political and economic uncertainties and the army offensive in the northern area of Pakistan. In spite of these difficulties, the Company has been steadfastly working on completing the BFS which is now targeted to be completed in the second half of 2010. There seems to be renewed momentum to invest in the natural resources sector, while there are signs of the global economy gradually improving and that the worst of the recession is now coming to an end. In Pakistan, the military offensive in the northern area of the country has been successful in restoring stability in the area. It is important to note that the Company's project area in Tharparkar has remained peaceful throughout and has not been affected by the military offensive in the north. Geographically, the project area is distant from the north of the country. Furthermore, the national economy is being strengthened by substantial foreign aid in support of the Government's efforts to stabilise the political situation and boost investor confidence. Against this background, the Board is reviewing the possibilities of taking the Company to the AIM market as soon as it is practical and will keep the market updated on this development. Listing the Company on AIM would raise its profile and make it more attractive to a larger institutional investor base. Finally, the Board is grateful for the patience shareholders have shown in supporting the Company's management team in the realisation of objectives in this difficult period. The Company also extends its thanks to the Mines and Minerals Development Department, Government of Sindh, the Thar Coal Energy Board and the Sindh Coal Authority for their continued assistance. The Company will continue to update the market on its progress. DIVIDENDS No dividends will be distributed for the year ended 31 December 2009. ON BEHALF OF THE BOARD: S Khan - Director Date: 24 May 2010 The audit report attached to the full report and accounts, whilst not qualified, contains the following paragraph regarding an "Emphasis of Matter. The Directors wish to announce that after the balance sheet date significant progress has been made with a fundraising referred to in the Directors' statement above. Emphasis of matter - Going concern In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosures made in note 1 to the financial statements concerning the company's ability to continue as a going concern. The ability of the company to continue to trade is dependent on the company being able to raise sufficient funds. Based upon the current economic climate there exists a material uncertainty which may cast significant doubt as to whether the company will be able to generate sufficient funds and therefore the company's ability to continue as a going concern. The financial statements do not include the adjustments that would be necessary if the company was unable to continue as a going concern. ORACLE COALFIELDS PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160) CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2009 2009 2008 £ £ CONTINUING OPERATIONS Revenue - - Other operating income 111 - Administrative expenses (236,157) (228,944) OPERATING LOSS BEFORE EXCEPTIONAL ITEMS (236,046) (228,944) Exceptional items - (235,669) OPERATING LOSS (236,046) (464,613) Finance income 816 12,595 LOSS BEFORE INCOME TAX (235,230) (452,018) Income tax - - LOSS FOR THE YEAR (235,230) (452,018) Loss attributable to: Owners of the parent (235,230) (452,018) Earnings per share expressed in pence per share: Basic -0.20 -0.41 Diluted -0.16 -0.34 ORACLE COALFIELDS PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160) CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2009 2009 2008 £ £ LOSS FOR THE YEAR (235,230) (452,018) OTHER COMPREHENSIVE INCOME Exchange difference on consolidation (16,143) - Income tax relating to other comprehensive income - - OTHER COMPREHENSIVE INCOME FOR THE YEAR, NET OF INCOME TAX (16,143) - TOTAL COMPREHENSIVE INCOME FOR THE YEAR (251,373) (452,018) Total comprehensive income attributable to: Owners of the parent (251,373) (452,018) Non-controlling interests - - ORACLE COALFIELDS PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160) CONSOLIDATED STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2009 2009 2008 £ £ ASSETS NON-CURRENT ASSETS Intangible assets 492,131 409,722 Property, plant and equipment 3,072 4,678 Investments - - Loans and other financial assets 63,186 68,029 558,389 482,429 CURRENT ASSETS Trade and other receivables 12,322 25,844 Cash and cash equivalents 5,859 143,154 18,181 168,998 TOTAL ASSETS 576,570 651,427 EQUITY SHAREHOLDERS' EQUITY Called up share capital 122,360 114,046 Share premium 1,309,043 1,068,406 Retained earnings (919,495) (668,122) 511,908 514,330 Non-controlling interests 16,029 16,029 TOTAL EQUITY 527,937 530,359 LIABILITIES CURRENT LIABILITIES Trade and other payables 48,633 121,068 TOTAL LIABILITIES 48,633 121,068 TOTAL EQUITY AND LIABILITIES 576,570 651,427 The financial statements were approved and authorised for issue by the Board of Directors on 24 May 2010 and were signed on its behalf by: S Khan - Director ORACLE COALFIELDS PLC GROUP OF COMPANIES (REGISTERED NUMBER: 05867160) COMPANY STATEMENT OF FINANCIAL POSITION 31 DECEMBER 2009 2009 2008 £ £ ASSETS NON-CURRENT ASSETS Intangible assets 241,399 181,006 Property, plant and equipment - - Investments 64,115 64,115 Loans and other financial assets 244,365 213,385 549,879 458,506 CURRENT ASSETS Trade and other receivables 21,652 31,978 Cash and cash equivalents 4,066 140,807 25,718 172,785 TOTAL ASSETS 575,597 631,291 EQUITY SHAREHOLDERS' EQUITY Called up share capital 122,360 114,046 Share premium 1,309,043 1,068,406 Retained earnings (903,823) (671,779) TOTAL EQUITY 527,580 510,673 LIABILITIES CURRENT LIABILITIES Trade and other payables 48,017 120,618 TOTAL LIABILITIES 48,017 120,618 TOTAL EQUITY AND LIABILITIES 575,597 631,291 The financial statements were approved and authorised for issue by the Board of Directors on 24 May 2010 and were signed on its behalf by: S Khan - Director The above is an extract from the full financial statements. A full version of the Report and Accounts are available on the PLUS website. The Directors of Oracle are responsible for the contents of this announcement. ENQUIRIES: Oracle Coalfields PLC Shahrukh Khan, Chairman Telephone: +44 (0) 1366500722 Email: s.khan@oraclecoalfields.com St Helens Capital Partners LLP Duncan Vasey or Mark Anwyl Telephone: +44 (0) 20 7368 6959 Lothbury Financial Services Limited Michael Padley Telephone: +44 (0) 20 7868 2010 Email: Michael.Padley@lothburyfs.com WEBSITE: www.oraclecoalfields.com About Oracle: Oracle Coalfields plc is a UK-based resource exploration and development company with an 80 percent owned subsidiary (Sindh Carbon Energy Limited) operating in Pakistan. The Company's shares are quoted on the PLUS markets (symbol: ORCP). The Company's flagship project is the Block VI coal project which is located on the Thar coalfield in the eastern Sindh province, Pakistan. Block VI is host to a JORC compliant resource of 1.4 billion tonnes of lignite coal including 371 million tonnes in the proven category. The Company also owns the Indus East coal project in Pakistan. A pre-feasibility study carried out by Dargo Associates confirmed an inferred resource for the area (in line with the JORC Code) of 365 million tonnes, of which the boreholes KHW-1 and KHW-2 give an indicated resource of approximately 24 million tonnes. Oracle Coalfields plc Oracle Coalfields plc

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