Annual report & accounts

FOR IMMEDIATE RELEASE 1 November 2007 GOLD OIL ("Gold Oil" or the "Company") REPORT AND ACCOUNTS FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2007 The Company is pleased to announce the publication of its Annual Report for the year ended 30 April 2007. The full report will be posted on the Company's website (www.goldoilplc.com) later today and the printed report will be mailed to shareholders on 2 November 2007. HIGHLIGHTS * The San Alberto-1X exploration well on Block XXI was drilled to a total depth of 5,113 feet and logs showed 315 gross feet of hydrocarbons in the Verdun reservoir and 250 gross feet in the Lower Palaeozoic. Mechanical problems meant that the well could not be tested properly. The Company owns 100% of the Licence * The conversion of the offshore Z34 Permit to a long term Exploration Licence (30 years for oil & 40 years for gas). The Company owns 50% and is carried through a 2,000Km 2D seismic exploration programme * Encouraging production performance from the Nancy-1 well in Colombia and better than expected potential envisaged from the Burdine Field. All activities paid for out of production revenue * The granting of an exploration licence in Colombia to Gold by the Ministry of Hydrocarbons as operator and its subsequent farmout to Osage Inc. of the United States. The Company owns 40% and is carried through the first exploration well plus testing * Acquisition of 24.67% in the Irish minerals company Minmet Resources Plc by issuing 22.95 million new Gold shares * The signing of an agreement with the Ministry of Hydrocarbons in Cuba recognising Gold as an offshore operator * Raising of £2,462,625 of new equity through a placing of 47 million shares at 5.5p per share and £1,324,043 through a one for two warrant at 7.5p per share in June 2006 CHAIRMAN'S STATEMENT This year has seen both consolidation of the company's position in Perú but also expansion in Colombia and Cuba. In Perú, Gold, as operator and its partner, Plectrum Petroleum, had its Z34 Licence confirmed by the Minister of Energy and Mines as an Exploration Licence for 30 years for oil and 40 years for gas. Gold has now started the required Environmental Impact Assessment (EIA) for the block which will then allow us to carry out the vital seismic programme on the block. The San Alberto-1X well on Block XXI successfully logged 315 feet of gross hydrocarbons in the Verdun (producing gas in the nearby Las Casita gas field), and 250 gross feet in a totally new deeper Palaeozoic reservoir. Unfortunately water flows from the base of the well prevented definitive testing of these hydrocarbon indications. The company has started a programme of additional geophysical activity which should lead to the selection of a new well location to appraise and test these significant hydrocarbon indications. In Colombia the Nancy-1 well in the Nancy field on the Nancy-Burdine-Maxine block started production at the end of September 2006 and to date is producing at around 650 bopd and by the end of April 2007 has produced over a hundred thousand barrels. The operator has submitted plans to the authorities for five more similar workovers in the Burdine field. On 5 June 2007 the Company was successful in being awarded a licence for the Rosa Blanca exploration block in the upper part of the prolific Lower Magdalena Basin and which the Company has farmed out to Osage Exploration and Development Inc of the USA ("Osage"). Osage will earn a 50% interest by carrying the Company and its local partner through the obligatory exploration well. In Spain several wells were worked over in the Ayoluengo field but the net gain was marginal. Production in 2006/2007 was a gross figure of 38,667 bbl. On the 12 February 2007 the Company announced that it had acquired 24.67% of the shares of Minmet Plc (Minmet), an Irish mining company that is quoted on AIM. Minmet also acquired 4.99% of Gold Oil. In some of the Company's non-core areas Irish companies have a good track record of closing deals compared to British ones and as an Irish registered company with its own financial resources and management, Minmet should be in a unique position to exploit these opportunities. These areas, as well as opportunities outside of Central and South America that are presented to Gold, will be pursued by Minmet. The Company was successful in Cuba in being designated as an onshore and offshore operator and is waiting to commence negotiations with Cupet (the state oil company of Cuba) for a Production Sharing Agreement for three offshore blocks identified by the Company as having high potential for significant discovery of oil. Looking ahead, in Perú we plan to appraise the potential oil and gas discovery made in Block XXI and also drill a further two exploration wells on prospects in the centre and south of the block and on Block Z34 to shoot a minimum of 2,000Km 2D seismic. In Colombia we will continue to expand production in Nancy-Burdine-Maxine with four or five re-entries planned for later this year, and to drill an exploration well on our Rosa Blanca Licence, possibly before the end of the year. In Cuba we will start the process of acquiring a rig to allow an early start to exploration drilling. We will continue to seek low risk projects with potential for early cash flow as well as exploration opportunities with major upside in the region. On behalf of our shareholders I congratulate our small team who through their dedication, hard work and professionalism continue to add major value for the shareholders of the Company. I look forward to meeting you all at our forthcoming annual general meeting in which our accounts will be laid before the Company. Michael Burchell Chairman 31 October 2007 Enquiries: Gary Moore, CEO Tel: +44 (0) 1737 830 133 Mike Burchell, Chairman Tel. +44 (0) 1372 361 772 Roland Cornish, Beaumont Cornish Limited Tel: +44 (0) 20 7628 3396 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 APRIL 2007 Note 2007 2006 £000 £000 Turnover - - Administration expenses (1,962) (698) Operating loss (1,962) (698) Other interest receivable and similar income 5 130 141 Loss on ordinary activities before taxation 2-4 (1,832) (557) Taxation credit on loss on ordinary 6 - - activities Loss for the year for group (1,832) (557) Loss: Earnings per ordinary share 8 - Basic (0.44p) (0.16p) - Diluted (0.44p) (0.16p) A note on historical gains or losses has not been included as part of the financial statements as the results as disclosed in the profit and loss account are prepared on an unmodified historical cost basis. All activities derived from continuing operations. CONSOLIDATED BALANCE SHEET AS AT 30 APRIL 2007 2007 2006 Note £000 £000 £000 £000 Fixed assets Tangible assets 9 16 22 Intangibles 10 304 299 Investments 11 1,900 192 2,220 513 Current assets Debtors 12 586 290 Cash at bank and in hand 3,891 2,460 4,477 2,750 Creditors: amounts 13 (34) (103) falling due within one year Net current assets 4,443 2,647 Total assets less current 6,663 3,160 liabilities Capital and reserves Called up share capital 14 116 90 Share premium account 15 9,305 4,004 Profit and loss account 15 (2,758) (934) Equity shareholders' 6,663 3,160 funds These financial statements were approved and authorised for issue by the Board of Directors on 31 October 2007 and were signed on its behalf by: Director: M N Burchell Director: J G Moore COMPANY BALANCE SHEET AS AT 30 APRIL 2007 2007 2006 Note £000 £000 £000 £000 Fixed assets Tangible assets 9 2 2 Intangibles 10 304 299 Investments 11 4,114 804 4,420 1,105 Current assets Debtors 12 145 149 Cash at bank and in hand 3,763 2,272 3,908 2,421 Creditors: amounts falling due within 13 (29) (92) one year Net current assets 3,879 2,329 Total assets less current liabilities 8,299 3,434 Capital and reserves Called up share capital 14 116 90 Share premium account 15 9,305 4,004 Profit and loss account 15 (1,122) (660) Equity shareholders' funds 8,299 3,434 These financial statements were approved and authorised for issue by the Board of Directors on 31 October 2007 and were signed on its behalf by: Director: M N Burchell Director: J G Moore CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 APRIL 2007 Note 2007 2006 £000 £000 Cash flow statement Cash outflow from operating activities 17 (2,247) (950) Returns on investments and servicing of 18 130 141 finance Capital Expenditure 18 (58) (503) (2,175) (1,312) Management of liquid resources 18 - - Financing 18 3,606 140 Increase/(decrease) in cash in the year 1,431 (1,172) Reconciliation of net cash flow to movement in net funds Increase/(Decrease) in cash in year 1,431 (1,172) Deposits treated as liquid resources - - 1,431 (1,172) Opening net debt 2,460 3,632 Closing net debt 3,891 2,460 STATEMENT OF TOTAL RECOGNISED GAINS AND LOSS FOR THE YEAR ENDED 30 APRIL 2007 2007 2006 £000 £000 Loss for the year for the Group (1,832) (557) Foreign exchange reserves 8 (3) Total recognised loss for the year (1,824) (560) NOTES (FORMING PART OF THE FINANCIAL STATEMENTS) 1. Accounting policies The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements. Basis of accounting The financial statements have been prepared in accordance with applicable accounting standards and under the historical cost accounting rules. Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries, joint venture and associated undertakings. Assets and liabilities of overseas subsidiary undertaking are translated into sterling at rates of exchange ruling at the balance sheet date. The results and cash flows of overseas subsidiaries are translated into sterling using average rates of exchange. Exchange adjustments arising when the opening net assets and the loss for the year are taken directly to reserves and are reported in the statement of total recognised gains and losses. Under section 230(4) of the Companies Act 1985 the Company is exempt from the requirement to present its own profit and loss account. The results of the associate are based upon statutory accounts for the period ending on 31 December. Where subsidiaries, joint ventures and associates are acquired or disposed of during the year, results are included from the date of acquisition or to the date of sale. Goodwill arising on acquisition represents the difference between the fair value of the consideration given over the fair value of the identifiable net assets acquired and is capitalised and amortised over its useful life of 20 years. Associates An associate is a company, other than a subsidiary or joint venture, in which the group has a long term participating interest and exercises significant influence. The profit and loss account includes the group's share of turnover, operating profit/(loss) and interest of associates. Investment in associates are shown in the group balance sheet at the group's share of the underlying net assets of the companies concerned less provisions where appropriate. Tangible fixed assets and depreciation Depreciation is provided to write off the cost less the estimated residual value of tangible fixed assets by equal installments over their estimated useful economic lives subject to the following periods: Motor vehicle - 5 years Office Equipment - 4-10 years Taxation The charge for taxation is based on the profit for the year and takes into account taxation deferred because of timing differences between the treatment of certain items for taxation and accounting purposes. Deferred tax is recognised, without discounting, in respect of all timing differences between the treatment of certain items for taxation and accounting purposes which have arisen but not reversed by the balance sheet date, except as otherwise required by FRS19. Investments Fixed asset investments are stated at cost less provision for diminution in value. Foreign exchange Foreign currency transactions are translated to sterling at the rate of exchange prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currency are translated into sterling at the rate of exchange prevailing at the balance sheet date. Exchange differences are taken to the profit and loss account. Cash and liquid resources Cash at bank and in hand includes short-term deposits with banks with initial maturity of three months or less. Cash, for the purpose of the cash flow statement, comprises cash in hand and deposits repayable on demand, less overdrafts payable on demand. Oil and natural gas assets Exploration and development expenditure is accounted for under the 'successful efforts' method. The successful efforts method means that the only costs which relate directly to the discovery and development of specific oil and gas reserves are capitalised. Exploration and evaluation costs are capitalised within intangible assets. Capital expenditure on producing assets are accounted for in accordance with SORP 'Accounting for Oil and Gas Exploration'. Costs incurred prior to obtaining legal rights to explore are expensed immediately to the income statement. All lease and licence acquisition costs, geological and geophysical costs and other direct costs of exploration, evaluation and development are capitalised as intangible or property, plant and equipment according to their nature. Intangible assets comprise costs relating to the exploration and evaluation of properties which the directors consider to be unevaluated until reserves are appraised as commercial, at which time they are transferred to property, plant and equipment following an impairment review and depreciated accordingly. Where properties are appraised to have no commercial value, the associated costs are treated as an impairment loss in the period in which the determination is made. Costs are amortised on a field by field unit of production method based on commercial proven and probable reserves. The calculation of the 'unit of production' amortisation takes account of the estimated future development costs and is based on the current period and unescalated price levels. Changes in reserves and cost estimates are recognised prospectively. 2. Pre-production costs Pre-production costs incurred in Perú and which have been expensed in the period were £1,218,000 (2006 -£163,000). 3. Loss on ordinary activities before taxation 2007 2006 £000 £000 Loss on ordinary activities before taxation is stated after charging Auditors' remuneration: Group - audit 11 10 Company - audit 11 10 Group - non audit services 7 23 Depreciation 7 6 Amortisation of goodwill 87 8 4. Staff number and costs The average number of persons employed by the group (including directors) during the year, analysed by category, were as follows: 2007 2006 Number Number Technical and administration 6 6 The aggregate payroll costs of these persons were as follows: 2007 2006 £000 £000 Wages and salaries 64 64 Social security costs 6 6 70 70 5. Interest receivable and similar income 2007 2006 £000 £000 Bank interest 130 141 6. Taxation Analysis of charge in period: 2007 2006 £000 £000 UK and overseas corporation tax Current tax on income for the period - - Total current tax - - Tax on loss on ordinary activities - - Factors affecting the tax charge for the current period The current tax charge for the period is higher than the standard rate of corporation tax in the UK 30% (2006: 30%). The differences are explained below: 2007 2006 £000 £000 Current tax reconciliation Loss on ordinary activities (1.832) (557) before tax Current tax at 30% (2006: 30%) (550) (167) Effects of: Expenses not deductible for tax - - purposes Increase in tax losses 550 167 Total current tax charge (see - - above) At 30 April 2007 the Group had net operating losses to carry forward of £2,501,000 (2006 - £821,000). The deferred tax asset on these tax losses at 30% of £750,000 (2006 - £246,000) has not been recognised due to the uncertainty of recovery. 7. Loss for the financial period As permitted by section 230 of the Companies Act 1985, the holding company's profit and loss account has not been included in these financial statements. The loss for the financial year is made up as follows: 2007 2006 £000 £000 Holding company's loss 462 383 8. Loss per share Loss per ordinary share - Basic (0.44) (0.16) - Diluted (0.44) (0.16) Loss per ordinary share is based on the Group's loss for the financial year of £1,832,000 (2006 - £557,000). The weighted average number of shares used in the calculation is the weighted average ordinary shares in issue during the year. 2007 2006 Number Number Weighted average ordinary shares in issue 420,474,675 349,869,589 during the year Potentially dilutive warrants issued 17,208,676 43,981,918 Weighted average ordinary shares for 437,683,351 393,851,507 diluted earning per share 9. Tangible fixed assets Equipment and Machinery Vehicle Total £'000 £000 £000 Group Cost At beginning of year 8 19 27 Additions 1 - 1 Disposals - - - At end of year 9 19 28 Equipment and Machinery Vehicle Total £'000 £000 £000 Depreciation At beginning of year 1 4 5 Charge for the year 1 6 7 On Disposals - - - At end of year 2 10 12 Net book value At 30 April 2007 7 9 16 At 30 April 2006 7 15 22 Company Cost At beginning of year 3 - 3 Additions 1 - 1 At end of year 4 - 4 Depreciation At beginning of year 1 - 1 Charge for the year 1 - 1 At end of year 2 - 2 Net book value At 30 April 2007 2 - 2 At 30 April 2006 2 - 2 10. Intangible fixed assets Deferred Exploration costs £000 Company and Group Cost At beginning of year 299 Expenditure 21 Charge for the year (16) At end of year 304 The expenditure above represents the acquisition of an interest in the Nancy-Burdine- Maxine Oil fields through the Company's Colombian branch. The value of the Group's investments in these assets is dependant on the development of the oil reserves. Should this prove unsuccessful, the value included above would be written down. 11. Fixed asset investments Goodwill on Share of acquisition of Associate's Listed Associate Net Deficit Investments Total £000 £000 £000 £000 Group Cost At beginning of year 267 (117) 50 200 Additions - - 1,721 1,721 At end of year 267 (117) 1,771 1,921 Amortisation At beginning of year 8 - - 8 Charge for the year 13 - - 13 At end of year 21 - - 21 Net book value At 30 April 2007 246 (117) 1,771 1,900 At 30 April 2006 259 (117) 50 192 The market value of the listed investments was £1,431,736 at 30 April 2007. Investment Loan to Shares in Shares in in Listed group group group Associate investment undertaking undertaking Total undertaking Company 2007 2006 Cost At 150 50 454 150 804 150 beginning of year Additions - 1,721 1,589 - 3,310 - At end of 150 1,771 2,043 150 4,114 150 year The Company's subsidiary undertakings at the year end were a 100% interest in the ordinary shares of: Gold Oil Perú, a company registered in Perú whose principal activity is exploration of oil and gas. Gold Oil Caribbean Ltd, a company registered in Belize whose principal activity is exploration of oil and gas. The Company also has a 50% interest in the ordinary shares of Ayoopco Ltd., a company registered in the United Kingdom whose principal activity is the production of oil and gas in Spain. The last accounting period end was 31 December 2006. The Company has 24.67% interest in the ordinary share of Minmet Resources Plc. 12. Debtors 2007 2006 Group Company Group Company £000 £000 £000 £000 Trade debtors - - - - Other debtors 475 34 173 32 Amounts owed by subsidiary and associate 111 111 111 111 undertakings Prepayments and accrued - - 6 6 income 586 145 290 149 13. Creditors: amounts falling due within one year 2007 2006 Group Company Group Company £000 £000 £000 £000 Trade creditors 1 - 67 59 Other creditors 9 5 5 2 Accruals and deferred income 24 24 31 31 34 29 103 92 14. Called up share capital 2007 2006 £000 £000 Authorised 1,000,000,000 ordinary shares of £0.00025 each 250 100 Allotted, called up and fully paid Equity: 463,533,909 ordinary shares of £0.00025 each 116 90 On 9 May 2006, 5,000,000 ordinary shares were issued at 1p per share. On 16 May 2006, 4,020,000 ordinary shares were issued at 5.5p per share. On 8 June 2006, 36,155,000 ordinary shares were issued at 5.5p per share. On 13 June 2006, 6,825,000 ordinary shares were issued at 5.5p per share. On 16 August 2006, 1,000,000 ordinary shares were issued at 7.5p per share. On 7 September 2006, 575,000 ordinary shares were issued at 1p per share on the exercise of warrants. On 21 September 2006, 340,000 ordinary shares were issued at 7.5p per share. On 26 September 2006, 375,000 ordinary shares were issued at 7.5p per share. On 10 October 2006, 2,875,000 ordinary shares were issued at 1p per share on the exercise of warrants. On 10 November 2006, 737,500 ordinary shares were issued at 7.5p per share on the exercise of warrants. On 16 November 2006, 1,460,000 ordinary shares were issued at 7.5p per share on the exercise of warrants. On 16 November 2006, 2,828,600 ordinary shares were issued at 7.5p per share on the exercise of warrants. On 16 November 2006, 375,000 ordinary shares were issued at 7.5p per share on the exercise of warrants. On 4 December 2006, 50,000 ordinary shares were issued at 1p per share on the exercise of warrants. On 4 December 2006, 4,600,000 ordinary shares were issued at 7.5p per share on the exercise of warrants. On 6 December 2006, 2,000,000 ordinary shares were issued at 1p per share. On 6 December 2006, 525,309 ordinary shares were issued at 7.5p per share. On 7 December 2006, 350,000 ordinary shares were issued at 7.5p per share on the exercise of warrants. On 11 December 2006, 2,300,000 ordinary shares were issued at 7.5p per share on the exercise of warrants. On 20 December 2006, 350,000 ordinary shares were issued at 1p per share on the exercise of warrants. On 21 December 2006, 962,500 ordinary shares were issued at 7.5p per share on the exercise of warrants. On 22 December 2007, 2,700,000 ordinary shares were issued at 1p per share on the exercise of warrants. On 7 February 2007, 1,200,000 ordinary shares were issued at 1p per share on the exercise of warrants. On 19 February 2007, 250,000 ordinary shares were issued at 1p per share on the exercise of warrants. On 10 April 2007, 3,025,000 ordinary shares were issued at 1p per share on the exercise of warrants. On 16 April 2007, 22,950,000 ordinary shares were issued at 7.5p per share. On 19 April 2007, 575,000 ordinary shares were issued at 1p per share on the exercise of warrants. 15. Share premium and reserves Share Profit premium and loss account account £000 £000 Group At beginning of year 4,004 (934) Loss for the period - (1,832) Foreign Exchange Reserves - 8 Premium on share issues 5,301 - At end of year 9,305 (2,758) Company At beginning of year 4,004 (660) Loss for the period - (462) Premium on share issues 5,301 - At end of year 9,305 (1,122) 16. Reconciliation of Movements in Shareholders' Funds for the year ended 30 April 2007 2007 2006 Group Company Group Company £000 £000 £000 £000 Opening shareholders' funds 3,160 3,434 3,580 3,677 Loss for the financial year (1,832) (462) (557) (383) Foreign exchange reserves 8 - (3) - Increase in share capital 5,327 5,327 140 140 Closing shareholders' funds 6,663 8,299 3,160 3,434 17. Reconciliation of operating loss to operating cash flows 2007 2006 £000 £000 Operating loss (1.962) (698) Depreciation and Amortisation 87 14 (Increase) in debtors (295) (255) Decrease in creditors (69) (14) Foreign exchange reserves (8) 3 Net cash outflow from operating activities (2,247) (950) 18. Analysis of cash flows 2007 2006 £000 £000 Returns on investment and servicing of finance Interest received 130 141 Capital expenditure and financial investment Purchase of tangible fixed assets (1) (4) Purchase of Investments (36) (50) Purchase of Associate - (150) Purchase Intangible asset (21) (299) Total (58) (503) 2007 2006 £000 £000 Management of liquid resources Increase in short term bank deposits - - Financing Issue of ordinary share capital 3,606 140 19. Directors' emoluments and interests The directors who held office during the period are shown below along with their interests in the 0.025p ordinary shares of the company. Interest at Interest at end of start of period period Directors M N Burchell 6,150,000 3,000,000 P G Mahony 575,000 - J G Moore 23,450,000 20,000,000 Directors' emoluments and other benefits are as listed below. 2007 2006 £000 £000 Directors' remuneration 42 42 Directors' fees 118 98 160 140 Warrants held by the directors are as follows: 2007 2006 No. of No. of Warrants Warrants M N Burchell 6,550,000 2,300,000 J G Moore 14,600,000 9,200,000 P G. Mahony 1,150,000 2,300,000 Total Warrants held by the directors 22,300,000 13,800,000 20. Financial instruments The Group's financial instruments comprise trade creditors, cash and short term deposits and equity shares. The Group has cash at bank. This is placed on short term deposit to maximise the Group's liquid resources and no interest rate hedging is undertaken. Short-term debtors and creditors The Group has taken advantage of the exemptions available under FRS 13 and excluded Short-term debtors and creditors from its disclosure of financial instruments. The Group does not presently have any long term debtors or creditors. Foreign currency risk The Group reports in sterling. However, a significant proportion of its activities may be undertaken in foreign currencies. Exchange rates are monitored in conjunction with forecast currency requirements and the Group will enter into forward exchange contracts to hedge its foreign currency exposure where appropriate. No forward foreign exchange contracts were entered into during the period. There were no outstanding foreign exchange contracts at the start of the period or at the end of the period. 21. Contingent Liabilities The Group has given guarantees of $1,160,000 to PerúPetro SA to fulfill licence commitments for Block XXI and Z34. In Colombia the Company deposited $1,200,000 in a trust with ANH that can be drawn down as costs are incurred in the Rosa Blanca work programme. Also a bank guarantee to ANH for $144,000 was given to cover default by the Company under the Rosa Blanca Licence. However, under the terms of the farm-out to Osage these sums have been returned to the Company by Osage who have now taken responsibility for the guarantee. 22. Related party disclosures Gold Oil Plc is listed on the Alternative Investment Market (AIM) operated by the London Stock Exchange. At the date of the Annual Report in the Directors opinion there is no controlling party. ---END OF MESSAGE---