Annual report & accounts

FOR IMMEDIATE RELEASE 31 October 2008 GOLD OIL ("Gold Oil" or the "Company") REPORT AND ACCOUNTS FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2008 The Company is pleased to announce the publication of its Annual Report for the year ended 30 April 2008. 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 today. In addition the Company has posted the Notice of Annual General Meeting to be held at Finsgate, 5-7 Cranwood Street, London EC1V 9EE on 26 November 2008 at 11.00 a.m. Extracts of the Annual Report are set out below along with the Notice of AGM: 1. HIGHLIGHTS 2007 and 2008 have been a period of frustration on the physical operations side of the business but with very good results on the deal side of the business. The increase in activity brought about by higher oil prices in Perú and Colombia without a concomitant increase of staff in the states' environmental departments has led to extensive delays in the Company's activities in both countries * DNME and Gravimetric surveys were acquired on Block XXI to define the follow up well, SA-2X. The well reached its planned total depth of 5,200 feet on 18 August 2008. The Verdun and Palaeozoic were perforated and tested but there were no producible hydrocarbons from either * On 9 October 2008 the company acquired the whole of Plectrum Petroleum Limited from Cairn Energy plc. Cairn paid the Company $1.5 million with the Company now owning 100% of Z34. The Environmental Approval for Z34 was obtained in August 2008 and 2,000 kms of 2D seismic will be acquired before the deadline of May 2009. Interest in the area has increased with PetroTech announcing a gas discovery immediately to the south of Z34 and Shell farming into BPZ's block to the north of Z34 * On 15 August 2008. The Company acquired the 18.05% working interest of Inversiones Petroleras in the Nancy-Burdine-Maxine fields to give a total interest to the Company of 58.5% for a total consideration of $4 million. Inversiones Petroleras was appointed Operator of the Group: now Gold * On 11 April 2008. The Company disposed of its remaining 11.25% interest in the onshore Ayoluengo oil field in Northern Spain to LeniGas & Oil plc for ¤315,211 * The Company acquired a 20% working interest in the Azar Block in the Putamayo Basin of Colombia. The Company was carried through the Palmera-1 work over and will be carried for half of its 20% working interest in the first exploration well on the Block. The work over on the Palmera-1 well tested 15oAPI oil at 45 bopd on natural flow and will be put on production in October this year and later a pump will be installed * The Environmental Permit for the Rosa Blanca well was received in August 2008. Construction of a 3 well drilling platform was started in August. The Company expects to spud the first exploration well early December 2008. The Company is carried by Osage through drilling and testing of this first well * In October 2007, Minmet plc agreed to terminate the contractual arrangements relating to Gold's Cuban oil exploration interests between Gold and Minmet leaving Gold free to pursue its plans without the involvement of Minmet. In a separate transaction, the Company disposed of its shares in Minmet to a third party for a consideration of £2,601,000 * On 11 August 2007, the Company disposed its equity interest in Ascent Resources plc for £101,850 * In May 2007, Gold Oil Caribbean Limited sold certain proprietary knowledge in relation to exploration in Cuba for £1,350,000 5. CHAIRMAN'S STATEMENT This year has been marred by the delay in issuing environmental permits for Block Z34 and San Alberto 2 well, both in Perú, the workovers of the 5 Burdine wells and the Rosa Blanca exploration well in Colombia. These delays have deferred seismic acquisition on Z34, deferred increased production from the Nancy-Burdine fields and the drilling of the Rosa Blanca exploration well. This is a problem not unique for the Company as all other operators in Perú and Colombia are also suffering. The problem is that the high oil prices have led to much more activity in both countries that has not been matched by a concomitant increase in staffing in the Environmental Agencies. However, in Colombia the Palmera-1 well on the Azar block was worked over, the untested sand was perforated and flowed at 45 bopd of 15oAPI oil. Analysis of the test showed that by completing the well with a pump some 150 to 200 bopd should be achieved (27-36 net to the Company): similar wells in nearby blocks produce 300 bopd. The Company acquired the 18.05% working interest of Inversiones Petroleras in the prolific Nancy-Burdine-Maxine fields to give a total interest to the Company of 58.5% and operatorship for a total consideration of $4 million. This level of interest in Nancy-Burdine-Maxine means that the Company will qualify to apply for multiple licences in Colombia, once operated production reaches over 500 bopd. In Perú, the Company drilled a second exploration well, SA-2X on the onshore Block XXI a kilometre north of SA-1X in July 2008 to test the Verdun and Palaeozoic sands. The well was located on the basis of a detailed Gravimetric survey and a DNME survey. The latter is a system of mapping the subsurface resistivity which, when interpreted, can indicate the presence of hydrocarbons. It is the first application of this process outside of Russia where it has been extensively tested. The Verdun sand was perforated to test the gas leg above an interpreted gas water contact. However, no fluid influx was achieved. It is possible that in the Verdun the structure up-dip of SA-2X could hold significant gas in-place and the Company is evaluating an inexpensive crestal well that would be a conclusive test of the gas potential of the Verdun. Log interpretation identified four zones in the Palaeozoic that were tested but failed to produce hydrocarbons. The well was plugged and abandoned on the 23 September 2008. On the rest of Block XXI the logs run in the Minchales well drilled 50 years ago in the far south of the Block were digitised and reprocessed. The reprocessing confirmed the presence of oil in the Tertiary sands. Further north there is a large prospect identified by the airborne gravity-magnetic survey that the Company shot in 2005. The Company plans to acquire 2D seismic over the identified prospects. Offshore Perú the Company had, in 2007, farmed out half its interest in Block Z34 to Plectrum Petroleum Limited (then Plectrum Petroleum plc). In October 2008, the company acquired Plectrum giving it a 100% interest in the block, together with a payment by Cairn to the company of $1 .5 million. The Company finally received its Environmental Permit from the Environment Ministry in August 2008. The Company is reviewing seismic boat availability to acquire and process 2,000 kilometres of 2D seismic late 2008 or early 2009. Since the Company acquired Z34 in 2006 Shell has farmed into the deep water part of BPZ's block to the north with a commitment to spend $300 million on exploration. To the south of Z34 PetroTech has announced a major gas discovery. The Z34 block is immediately to the west of four of the largest developed oil fields in Northern Perú. In Cuba the Company has been designated as an onshore and offshore operator. However, now that Fidel Castro has retired and the European Union has lifted its human rights sanctions, the Company is planning, with the London based organisation, "Cuba Initiative", to open high level contacts in the Cuban government to seek support for a Production Sharing Agreement (PSA) on the areas identified by the Company. The Cuba Initiative is a UK group that is backed by the UK government. On the 12 February 2007 the Company announced that it had acquired 24.67% of the shares of Minmet Resources 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 have been in a unique position to exploit these opportunities. These areas, as well as opportunities outside of Central and South America that were presented to Gold, would have been pursued by Minmet. However, Minmet decided to develop its own strategy in the USA which was incompatible with Gold's interests in Cuba and so the opportunity arose to unwind the Minmet deal with Gold recapturing its exploration interests, receiving the proceeds from the placing of the 22,950,000 Gold shares previously given to Minmet and the sale of the balance of Minmet shares to a third party with substantial proceeds of £2,601,000. In July 2008 the Company placed these 22,950,000 Gold Oil shares at 8p and raised, after costs, £1,764,000. In Spain the Company profitably disposed of its remaining interest in the Ayoluengo oil field for a final payment of ¤315,211. However, the Company retains the UK Company, Ayoopco Ltd., which allows us to use its track record to continue to enhance our ability to meet the selection criteria in many South American Countries. Looking ahead, in Perú we plan to drill a further two exploration wells on prospects in the centre and south of the block and on Block Z34, to shoot, process and interpret 2,000Km 2D seismic. In Colombia we are in the closing stages of registering the environmental permits that will allow us to work over four of the Burdine wells and thus expand production in Nancy-Burdine. The proposed work programme and budget for the Nancy-Burdine fields for 2009 includes the shooting of 43 km of 2D seismic to target three new development wells. Before the end of 2008 we will drill an exploration well on our Rosa Blanca Licence and on the Azar Block put the Palmera-1 well on long term production and drill an exploration well. In Cuba we will continue the process of acquiring a PSA for the exploration blocks identified in 2005. 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. The profitable disposals and the placement have allowed the Company to maintain substantial financial assets so that when a good opportunity presents itself we are able to acquire and finance it. It is the Company's intention to develop further sources of funds so that the Company can grow by acquisitions and yet still maintain a strong balance sheet. The Company now has over 6,900 km2 of exploration acreage under licence in the lowest royalty and tax regimes in Latin America. I have praised before our small team who through their dedication, hard work and professionalism continue to add major value for the shareholders of the Company and now with the increased activity in Colombia we will be opening an office there and expanding the team by appointing a manager to run the day to day activities. I look forward to meeting you all at our forthcoming annual general meeting at which our accounts will be laid before the Company. Michael Burchell Chairman 29 October 2008 6. STATEMENT OF NET OIL RESERVES & CONTINGENT RESOURCES AS DETERMINED ON 1 JULY 2008 (AND 31 MAY 2008) At 1 July 2008: Colombia - Nancy-1 Well: Gold Oil Net Interest 27.4% 1. NET RESERVES As of As of Production 1.5.2007 1 July 2008 1 July 2007 to Oil Mbbl Oil Mbbl 1.4.2008 Oil Mbbl Proven 50.5 27.0 31 .305 Probable * 55.0 Proven plus Probable * 82.0 Possible * 39.0 Total Proved plus >50.5 121.0 Probable plus Possible 2. NET CONTINGENT OIL RESOURCES As of As of Production 1 July 2008 1 July 2007 1.5.2007 to 1.4.2008 Oil Mbbl Oil Mbbl Oil Mbbl Best Estimate 9,267 13 High Estimate 13,900 533 1. The Reserve and Resource estimates shown in this report are based upon the joint reserves and resource definitions of the Society of Petroleum Engineers 2. Reserves and Contingent Resources have been prepared by Morning Star Consultants, LCC of Houston, Texas, USA 3. Net volumes have been calculated based on Gold Oil's 58.5% Participating Interest, which after Royalty amounts to 27.4% * Independent Expert report not available at the time of printing Azar (Palmera-1 well) The unaudited Operator's estimate of reserves is as shown below Gold Oil Net Interest 18.4% P10 P50 P90 Reserves Mbbl Gold Oil's Interest 117.39 82.06 46.96 The Operator of Azar has calculated that Potential Resources of three structures could amount to 40.2 million barrels of which Gold Oil's interest could be 7.4 million barrels. 7. REVIEW OF OPERATIONS 7.1 PERÚ Gold Oil Licence Interests in Perú at 30 April 2008 Block Licence Expiry Date Size (ha) Interest Operator Name Block XXI Exploration Expires 5 May 303,000 100% Gold Oil Plc Licence 2036 (Oil) Block Z34 Exploration Expires 12 371,339 100% Gold Oil Plc Licence February 2037 (Oil) Block XXI, Onshore Perú The Company looked at many geophysical methods of determining the location of hydrocarbons for the simple reason that seismic will not give any useful information about the Palaeozoic. As a result the Company signed a contract with a Russian company to run a survey over the area around San Alberto-1X to identify the geographical extent of the hydrocarbons logged in the well. The company has developed innovative technology that can show possible hydrocarbon traps by measuring the resistivity of the subsurface (DNME). On the basis of that survey a location 1 kilometre north of SA-1X was selected. Although not at the highest point on the structure, where the presence of a village prevented DMNE cover, from the contractor's interpretation of results, he recommended a drilling site that had the highest chance of finding hydrocarbons. However, the survey and its predictions were wrong and San Alberto-2X was plugged and abandoned on the 23rd September 2008. Testing of the both the Verdun and several zones in the Palaeozoic showed that the well did not contain producible hydrocarbons. For 2009/2010 the Company is planning a 2D seismic survey and three wells on the San Alberto discovery, the Minchales discovery and the new large prospect on the centre of the Block (D). Block Z34, Offshore Perú No significant exploration has taken place in water depths exceeding 100 metres despite the fact that discoveries were made from 158 wildcat wells drilled in the Talara Basin prior to 1996. The Block has water depths of 100-3,000 metres and sits adjacent to producing concessions and yet has only 500 Km of 2D seismic and no wells have been drilled in water depths greater than 100 metres. The existing 2D seismic demonstrates the potential for some of the existing producing fields to extend into Z34. With the new seismic we expect to be able to define the potential for significant discoveries in the deeper water which has never been explored. Since the Company acquired Z34 in 2006 Shell has farmed into the deep water part of BPZ's block to the north with a commitment to spend $300 million on exploration. To the south of Z34 PetroTech has announced a major gas discovery. Onshore Gas Opportunities The agreement with MAN-Ferrostaal was extended again on 11 October 2007 for a further year. The Company has good relations with MAN-Ferrostaal and is also in discussions with the same company for a gas project in another South American country. 7.2 COLOMBIA Gold Oil Licence Interests in Colombia Expiry Size Interest Block Name Licence Date (ha) Operator NIT 58.5% Union Burdine-Maxine-Nancy 830.132.959-5 03/09/2015 10,598 Temporal II&B Rosa Blanca NIT 03/07/2037 44,392 40% Gold Oil Colombia 900.074.817-2 SAC Azar 12/12/2030 20,897 20% Gran Tierra The Company concluded a Sale and Purchase Agreement ("SPA") on the 25 of February 2008 for a 20% working interest in the Azar Block in the Putumayo Basin located to the North-East of the Company's existing Nancy, Burdine and Maxine oil fields. The Company was carried through the workover of the Palmera 1 well which resulted in an oil discovery of 1 5oAPI that tested at 45 bopd under natural flow. In October 2008 the well will be completed and produced under natural flow for a few months to allow a down-hole pump to be designed and installed to increase production to some 150 to 200 bopd. The next exploration well, scheduled for late 2008, on the Azar Block will cost the Company 10% of the well cost for a 20% working interest. The licence for the Azar Block was granted by Colombia's hydrocarbons agency ANH in October 2006 for an area of 51,630 Ha (or 516.3sq.km). The term of the licence is for a period of 24 years and includes a royalty payable to the ANH of 8% up to 5,000 bopd and then increasing up to 25% depending upon the level of production. Nancy, Burdine and Maxine, Onshore Colombia The Nancy 1 well produced 165,743 barrels between May 2007 and April 2008 and is currently producing just over 300 bopd and positive cash flow after costs and royalty of $145,589 per month (July 2008). However, the anticipated gross 2,500 bopd increase in production from the five Burdine wells has not been achieved due to the long delay in obtaining an environmental permit. A survey of Burdine 3 shows that the casing has collapsed, so the well cannot be re-entered. The whole work programme and budget for 2008, which included 43 Km of 2D Seismic, a new down-hole pump in the Nancy 1 well and re-entry and work over of the 5 Burdine wells, has not been met. This lack of activity prompted the Company to increase its interest in the fields and take over Operatorship. The environment permit was received on September 2008 and is now being registered with the local authorities after which the workovers can commence. The Houston based company Nutech Energy Alliance has carried out an extensive petroleum engineering study of the fields which has shown a significant increase in reserves from the currently producing reservoir but also reserves in previously unidentified and unperforated reservoirs. The Company now plans to shoot 43 Km of 2D seismic and drill three more development wells if the licence, which expires on 3 September 2015, can be extended with Ecopetrol. Rosa Blanca, Onshore Colombia The Company applied for and acquired a 90% interest in the 44,392 hectare Rosa Blanca block in the northern part of the Middle Magdalena Basin, onshore Colombia on 5 June 2007. The Company farmed out fifty percent of its interest to Osage Exploration and Development Incorporated of the United States. Osage has a significant amount of seismic and well data on the Block and their mapping of the first prospect to be drilled shows contingent resources to the Company of 133 million barrels plus three other equally large prospects. The Environmental Permit was received in August 2008 and construction of the drilling platform has commenced with the first well expected to commence in early to mid December 2008. 7.3 SPAIN The Company has disposed of its remaining 11 .25% of the onshore Ayoluengo oil field in Northern Spain to LeniGas & Oil plc for ¤315,211. In April 2008, the Company acquired the remaining 50% equity interest in Ayoopco Limited making it a wholly-owned subsidiary of the company. 7.4 CUBA The Company has identified three very attractive offshore blocks and has been recognised as an offshore and onshore operator. The Company is working with a UK organisation the "Cuba Initiative" whose purpose is assist British companies in getting business in Cuba. The Cuban Ambassador in London has been briefed and the Cuba Initiative team has a visit to Cuba planned for November with an active "high level" meeting agenda. Our objective is to get approval to negotiate a Production Sharing Agreement (PSA) for the three blocks with Cupet, the State oil company for Cuba. 7.5 BRAZIL The Company has not managed to see any commercially viable opportunities in Brazil and with the recent government manoeuvres following the discovery of the large offshore oil fields we are greatly discouraged from working there. 7.6 FARM-INS AND ACQUISITIONS A number of acquisition opportunities were reviewed but the vendors' expectations were seen as too high. 7.7 OPEN ACREAGE AND OTHER OPPORTUNITIES In Perú there are still some interesting blocks outside of the bidding rounds, but they are becoming increasingly difficult to obtain on reasonable terms. In Colombia the terms for the licensing rounds, although containing some very interesting blocks, have changed to the extent that it is not worth bidding. 7.8 GLOSSARY OF TERMS AND ABBREVIATIONS API American Petroleum Institute B billion (109) bbl(s) barrel(s) bbls/d barrels per day boe barrels of oil equivalent bopd barrels of oil per day Bcm billions of cubic metres Bscf billions of standard cubic feet ft feet GIIP Gas Initially in Place km kilometres km2 square kilometres mD milliDarcy M thousand (103) MM million (106) MMbbl(s) million barrels MMscf/d millions of standard cubic feet per day STOOIP Stock Tank Oil Originally in Place 8. LOOKING AHEAD During 2009 the Company expects to have largely completed the following work programme: * Perú * Seismic on three structures on onshore Block XXI * Acquire and interpret 2000Km of 2D seismic on offshore Block Z34 * Colombia * 43 Km of 2D seismic and 1-3 development wells onshore Nancy-Burdine * 4 well re-entries onshore Nancy-Burdine * 1 exploration well and three development wells and production. However, this depends on the success of the first exploration well, onshore Rosa Blanca * 1 exploration well onshore Azar and completion of 1 production well * Acquisition of a new block by farm-in * Cuba * Negotiation of an Offshore PSA Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Perú 1Verdun Onshore Appraisal San Well Alberto Perú 2D Seismic 1 1 Onshore Exploration Exploration Block XXI Well Well Perú 2 D Seismic Offshore Z34 Colombia 2D Nancy Seismic Colombia 2 Workovers 2 Workovers Burdine Colombia 1 Exploration 1 1 1 Rosa Well Appraisal Development Development Blanca Well Well Well Colombia 1 Production 1 Azar Well Exploration Well or infill seismic Colombia Licence New Area Cuba PSA Offshore 13. CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 30 APRIL 2008 Revenue Cost of sales Note 2008 £000 2007 £000 398 (148) - - Gross profit 250 - Development expenditure written off 3 (1,083) (1,300) Administration expenses (757) (662) Operating loss 3 (1,590) (1,962) Finance income 5 208 130 Goodwill impairment 12 (129) - Exceptional items Gains on sale of assets 6 2,652 - Profit/(loss) on ordinary activities before 1,141 (1,832) taxation Income tax expense 7 (304) - Profit/(loss) on ordinary activities after 837 (1,832) taxation Dividends - - Profit/(loss) attributable to equity holders 837 (1,832) Earnings per ordinary share 9 - Basic 0.18p (0.44p) - Dilute (0.44p) 14. CONSOLIDATED BALANCE SHEET AT 30 APRIL 2008 Assets Non current assets Property plant and equipment Note 2008 £000 2007 £000 - oil and gas assets 10 183 - - others 10 17 16 Goodwill 12 - - Intangibles 11 2,105 304 Investments 13 - 1,900 2,305 2,220 Current assets Inventories 14 214 - Trade and other receivables 16 3,187 586 Cash and cash equivalents 15 5,150 3,891 8,551 4,477 Total assets 10,856 6,697 Equity and liabilities Capital and reserves Share capital 18 120 116 Share premium account 19 10,124 9,305 Retained earnings 19 (1,644) (2,758) Total equity 8,600 6,663 Current liabilities Trade and other payables 17 2,256 34 Total equity and liabilities 10,856 6,697 15. COMPANY BALANCE SHEET AS AT 30 APRIL 2008 Assets Non current assets Property plant and equipment Note 2008 £000 2007 £000 - oil and gas assets 10 183 - - others 10 1 2 Exploration and evaluation 11 - 304 Investments 13 3,356 4,114 3,540 4,420 Current assets Trade and other receivables 16 3,243 145 Cash and cash equivalents 15 2,229 3,763 5,472 3,908 Total assets 9,012 8,328 Equity and liabilities Capital and reserves Share capital 18 120 116 Share premium account 19 10,124 9,305 Retained earnings 19 (3,305) (1,122) Total equity 6,939 8,299 Current liabilities Trade and other payables 17 2,073 29 Total equity and liabilities 9,012 8,328 16. STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 APRIL 2008 Retained Share Earnings Group Share Capital Premium £000 Total £000 £000 £000 As at 1 May 2006 90 4,004 (934) 3,160 Shares issued 26 5,301 - 5,327 Loss for the year - - (1,832) (1,832) Foreign exchange translation - - 8 8 As at 30 April 2007 116 9,305 (2,758) 6,663 Shares issued 4 819 - 823 Profit for the year - - 837 837 Foreign exchange translation - - 277 277 As at 30 April 2008 120 10,124 (1,644) 8,600 Company As at 1 May 2006 90 4,004 (660) 3,434 Shares issued 26 5,301 - 5,327 Loss for the year - - (462) (462) Foreign exchange translation - - - - As at 30 April 2007 116 9,305 (1,122) 8,299 Shares issued 4 819 - 823 Loss for the year - - (2,372) (2,372) Foreign exchange translation - - 189 189 As at 30 April 2008 120 10,124 (3,305) 6,939 Share capital is the amount subscribed for shares at nominal value. Share premium represents the excess of the amount subscribed for share capital over the nominal value of those shares net of share issue expenses. Retained earnings represents the cumulative loss of the Group and Company attributable to equity shareholders. 17. CASH FLOW STATEMENT FOR THE YEAR ENDED 30 APRIL 2008 Group 2008 Company Group 2007 Company £000 2008 £000 £000 2007 £000 Operating activities (2,440) (1,220) (2,247) (574) Investing activities Return from investment and servicing of finance 208 206 130 130 Sale of investment assets 3,006 1,206 - - Acquisition of investment assets (303) (1,130) (36) - Net cash acquired from subsidiary 182 - - - Loan advanced to subsidiary - (1,418) - (1,649) Purchase intangible assets (209) - (21) (21) Purchase of tangible fixed assets (8) (1) (1) (1) 2,876 (1,137) 72 (1,541) Financing activities Proceeds from issue of share capital 823 823 3,606 3,606 Net cash inflow/(outflow) 1,259 (1,534) 1,431 1,491 Cash and cash equivalents at the beginning of the year 3,891 3,763 2,460 2,272 Cash and cash equivalents at the end of the year 5,150 2,229 3,891 3,763 NOTES TO THE CASH FLOW STATEMENT Operating activities Operating loss for the year (1,615) (452) (1,962) (590) Depreciation and amortisation 128 122 87 75 Tax paid (50) (50) - - Foreign exchange translation (56) (195) (8) Operating cash outflows before movements in working capital (1,593) (575) (1,883) (515) (Increase) in inventories (214) - - - (Increase)/decrease in receivables (2,601) (1,354) (295) 4 Increase/(decrease) in payables 1,968 709 (69) (63) Net cash outflows from operating activities (2,440) (1,220) (2,247) (574) 2. Segmental Information In the opinion of the Directors the Group has once class of business, being the exploration for, and development and production of, oil and gas reserves, and other related activities. The Group's primary reporting format is determined to be the geographical segment according to the location of the oil and gas asset. There are currently three geographic reporting segments: South America and Spain, which are involved in production, development and exploration activity, and the United Kingdom being the head office. United Kingdom South Exploration and production £000 Spain £000 America 2008 - - £000 Total £000 Revenue - oil Cost of sales - - 398 (148) 398 (148) Gross profit - - 250 250 Development expenditure written off (18) - (1,065) (1,083) Administration expenses (750) - (7) (757) Operating profit/(loss) (768) - (822) (1,590) Finance income 206 - 2 208 Goodwill on consolidation written off - - (129) (129) Gains on disposal of assets 1,052 250 1,350 2,652 Profit/(loss) before taxation 490 250 401 1,141 Income tax expense (179) (75) (50) (304) Profit/(loss) before taxation 311 175 351 837 Assets and liabilities Segment assets 4,384 - 1,322 5,706 Cash and cash equivalents 1,430 181 3,539 5,150 Total assets 5,814 181 4,861 10,856 Segment liabilities 44 1,908 1,952 Current tax liabilities 254 37 13 304 Total liabilities 298 37 1,921 2,256 Other segment items Capital expenditure 1 - 7 8 Depreciation and amortisation 1 - 128 129 Acquisition costs - oil and gas assets - - 209 209 Exploration and production 2007 United South Kingdom Spain America Total £000 £000 £000 £000 Revenue - oil - - Cost of sales - - Gross profit - - - - Development expenditure written off (16) - (1,284) (1,300) Administration expenses (592) - (70) (662) Operating profit/(loss) (608) - (1,354) (1,962) Finance income 130 - - 130 Goodwill on consolidation written off - - - - Gains on disposal of assets - - - - Profit/(loss) before taxation (478) - (1,354) (1,832) Income tax expense - - - - Profit/(loss) before taxation (478) - (1,354) (1,832) Exploration and production 2007 (continued) United South Assets and liabilities Kingdom America Total £000 Segment assets £000 Spain £000 £000 2,806 Cash and cash equivalents 2,324 3,225 150 - 332 666 3,891 Total assets 5,549 150 998 6,697 Segment liabilities 31 3 34 Current tax liabilities - - - - Total liabilities 31 - 3 34 Other segment items Capital expenditure 1 - - 1 Depreciation and amortisation 1 - 6 7 Acquisition costs - oil and gas assets 1,721 - - 1,721 3. Profit/(loss) from operations 2008 2007 £000 £000 The loss on ordinary activities before taxation is stated after charging: Pre-production costs 736 1,218 Auditors' remuneration Group - audit 11 11 Company - audit 11 11 Group - non-audit services - 7 Depreciation of non oil and gas assets 7 7 Depreciation of oil and gas assets 121 16 Compensation for loss of office 3 - The analysis of administrative expenses in the consolidated income statement by nature of expense: 2008 £000 2007 £000 Pre-production costs 736 1,218 Changes in inventories of finished goods 214 - Employee benefit expense 452 70 Depreciation, amortisation and impairment charges 128 36 Legal and professional fees 70 64 Other expenses 240 574 Total development and administration costs 1,840 1,962 4. Staff numbers and cost The average number of persons employed by the group (including directors) during the year, analysed by category, were as follows: 2008 Number 2007 Number Technical and administration 6 6 The aggregate payroll costs of these persons were as follows: £000 £000 Wages and salaries 66 64 Directors fees 380 118 Social security costs 6 6 452 188 2008 £000 2007 £000 5. Finance income Bank interest 208 130 6. Gains on sales of assets 2008 2007 £000 £000 Disposal of investments 1,052 - Disposal of oil field interests 250 - Disposal of proprietary knowledge 1,350 - 2,652 - Disposal of investments The Group sold its interests in Minmet Resources plc and Ascent Resources plc in August 2007 2008 2007 £000 £000 Sale proceeds 4,539 - Cost of assets disposed (3,373) - Disposal expenses (114) - 1,052 - The sale proceeds included the return of 22,950,000 shares in the company, which were held to the Company's account, and placed in the market on 31 July 2008 for net proceeds of £1,764,000. Disposal of oil field interests In April 2008, the Group disposed of its 11 .25% interest in the Ayoluengo field in Northern Spain for ¤315,211. Disposal proprietary knowledge The Group disposed of certain proprietary knowledge in relation to exploration in Cuba for £1,350,000 in April 2008. 7. Income tax expense The tax charge on the profit on ordinary 2007 £000 activities was: UK Corporation Tax 2008 £000 - Foreign taxation 254 50 - 304 - The total charge for the year can be reconciled to the accounting profit as follows: Profit/(loss) before tax Continuing operations 1,141 (1,832) Tax at domestic income tax rate of 29.84% 340 (550) Effects of: Profits not subject to UK tax (307) - Increase in tax losses 221 550 Foreign taxation 50 - Tax expense 304 - The Group has tax losses of £2,473,000 (2007 - £2,501,000) to carry forward against future profits. The deferred tax asset on these tax losses at 28% of £692,000 (2007 - £750,000) has not been recognised due to the uncertainty of the recovery. 8. Loss for the period As permitted by section 230 of the Companies Act 1985, the holding company's income statement has not been included in these financial statements. The loss for the financial year is made up as follows: 2008 £000 2007 £000 Holding company's loss 2,183 462 9. Earnings per share 2008 2007 Loss per ordinary share - Basic 0.18p (0.44p) - Dilute (0.44p) Earnings per ordinary share is based on the Group's profit for the financial year of £837,000 (2007 - loss of £1,832,000). The weighted average number of shares used in the calculation is the weighted average ordinary shares in issue during the year. 2008 2007 Number Number Weighted average ordinary shares in issue during the year 474,408,008 420,474,675 Potentially dilutive warrants issued - 17,208,676 Weighted average ordinary shares for diluted earning per share 474,408,008 437,683,351 The calculation of the diluted EPS assumes all criteria-giving rise to the dilution of the EPS are achieved and all outstanding share options at the year-end are exercised. As the market value of the shares is lower than the warrant price, there is no dilution in the number of shares. 15. Cash and cash equivalents 2008 2007 Group Company Group Company £000 £000 £000 £000 Bank current accounts 318 78 128 40 Bank deposit accounts 4,832 2,151 3,763 3,723 5,150 2,229 3,891 3,763 Bank deposit accounts comprise cash held by the Group and short-term bank deposits with an original maturity of three months or less and earn interest at respective short-term deposit rates. The carrying amount of these assets approximates their fair value. As at 30 April 2008, bank deposit accounts included £600,000 that was held as guarantee in respect of a letter of credit and is not available for use until the Group fulfills its license commitments. 16. Trade and other receivables 2008 2007 Company Group Company Group £000 £000 £000 £000 Trade receivables 84 84 - - Other receivables 3,066 2,914 454 13 Amounts owed by subsidiary and associate undertakings - 208 111 111 Corporation tax receivables 21 21 21 21 Prepayments and accrued income 16 16 - - 3,187 3,243 586 145 Included in other receivables is the Company's shares received amounted to £1 .8 million in respect of the disposal of Minmet plc interest. The shares were subsequently placed in July 2008. Also included in other receivables is £668k in respect of deposit paid to Colombian state oil authority for Rosa Blanca oil field project. The monies shall be returned at the end of the Phase 1 exploration period of this contract. 17. Trade and other payables 2008 2007 Company Group Company Group £000 £000 £000 £000 Trade payables 33 32 1 - Other payables 833 690 9 5 Accruals and deferred income 19 16 24 24 Deferred consideration 1,067 1,067 - - Taxation 304 268 - - 2,256 2,073 34 29 Included in deferred consideration is the remainder US$2 million of the purchase consideration relating to the acquisition of Red River Capital Advisors S.A. The full amount was paid in May 2008. 23. Contingent liabilities The Group has given guarantees of $1,500,000 to PerúPetro SA to fulfil licence commitments for Block XXI and Z34. 24. Post balance sheet events On 31 July, the Company placed 22,950,000 of its ordinary shares that had previously been held for the account of the company following the disposal of its interests in Minmet Resources plc. The net proceeds amounts to £1,764,000. On 3 August 2008, the Company acquired Inversiones Petroleras de Colombia S.A. ('Invepetrol') for a total consideration of $4 million. Invepetrol owns an 18.05% participating interest in the Union Temporal II & B that is the Operator and Licence holder of the Nancy, Burdine and Maxine oil fields in the Putumayo Basin in Southern Colombia. The Company already owns a 40% interest in Union Temporal and this will take the Company's total interest to 58.05% (27.29% of net production.). On 9 October 2008, the Company's subsidiary, Gold Oil Caribbean Limited, acquired all of the issued shares in Plectrum Petroleum Limited ('Plectrum').Under the terms of the agreement, the purchase consideration is US$32,165,045. The net assets of Plectrum at the acquisition date were US$33,745,975, which include US$1,580,414 cash and US$32,165,561 amount due from Capricon Oil and Gas Limited. The amount due was used to settle the purchase consideration. The Group will receive US$1,500,000 in compensation for the loss of the benefit of a 'carry' and additional 50% interest in the licence. This transaction brings Gold's working interest in the Z34 block to 100%. 25. Ultimate controlling party 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. 26. Related party transactions Group There were no transactions made with other related parties except for the consultancy fees paid to the directors as disclosed in note 21. Company During the year, the Company advanced loan to its subsidiaries. The details of the transactions and amount owed by the subsidiaries at the year end were: 2008 2007 Loan Balance Advance Loan advance £000 £000 Balance £000 £000 Gold Oil Perú S.A.C * 1,148 1,418 2,043 1,589 Ayoopco Limited 110 - 110 - Red River Capital Advisors S.A. 209 209 - - * The company has provided impairment of £2,312,662 on the outstanding loan. See Note 13 for details APPENDIX 1 GOLD OIL PLC (the "Company") (Incorporated and registered in England and Wales with registered number 05098776) Notice of Annual General Meeting Notice is hereby given that the Annual General Meeting of the Company will be held at Finsgate, 5-7 Cranwood Street, London EC1V 9EE on Wednesday 26 November 2008 at 11.00 a.m. for the following purposes: As Ordinary Business To consider, and, if thought fit, pass the following resolutions which will be proposed ºas ordinary resolutions of the Company. Ordinary Resolutions 1. To receive the Company's annual accounts for the financial year ended 30 April 2008 together with the Reports of the Directors and Auditors thereon ("Accounts"). 2. To re-appoint Jeffreys Henry LLP as auditors to the Company, to hold office until the commencement of the next general meeting at which the Accounts are laid before Members of the Company and to authorise the directors to determine their remuneration. 3. To re-elect Patrick Gerald Mahony as a Director of the Company who retires in accordance with Article 105 of the Articles of Association of the Company. 4. THAT the Directors be and are hereby generally and unconditionally authorised in accordance with Section 80 of the Companies Act 1985 (the "Act"), and in substitution for all existing authorities in such regard, to allot relevant securities (within the meaning of Section 80(2) of that Act) of the Company up to an aggregate nominal amount of £129,217 (equal to the authorised but unissued share capital of the Company as at 21 October 2008) provided that such authority shall expire at the commencement of the Annual General Meeting next held after the passing of this resolution or 31 October 2009 (whichever is the earlier to occur) save that the Company may pursuant to the authority make an offer or agreement or other arrangement before the expiry of the authority which would or might require relevant securities to be allotted after such expiry, and the Directors may allot relevant securities in pursuance of such an offer or agreement or other arrangement as if the power conferred hereby had not expired. As Special Business To consider, and, if thought fit, pass the following resolution which will be proposed as a special resolution of the Company. Special Resolution 5. THAT (subject to the passing of Resolution 4) the Directors be and they are hereby empowered pursuant to Section 95 of the Act to allot equity securities (within the meaning of Section 94(2) of the Act) wholly for cash pursuant to the general authority conferred on the Directors pursuant to Resolution 4 as if Section 89(1) of the Act did not apply to any such allotment, provided that this power shall be limited to the allotment of equity securities: (a) in connection with a rights issue, open offer or any other pre-emptive offer of equity securities to the holders of shares in the Company and other persons entitled to participate therein in proportion (as nearly as practicable) to their respective holdings subject to such exclusions or other arrangements as the Directors may consider necessary or expedient to deal with fractional entitlements or legal or practical problems under the laws of any territory or the regulations or requirements of any regulatory authority or any stock exchange in any territory; and (b) otherwise than pursuant to paragraph (a) above up to an aggregate nominal value of £129,217 (equal to the authorised but unissued share capital of the Company as at 21 October 2008), and such power shall expire at the commencement of the Annual General Meeting next held after the passing of this resolution or 31 October 2009 (whichever is the earlier to occur) but so that the Company may before such expiry make an offer or agreement or other arrangement which would or might require equity securities to be allotted after such expiry, and the Directors may allot securities in pursuance of any such offer or agreement or other arrangement as if that the power conferred by this resolution had not expired. By Order of the Board G K Barnes Company Secretary 28 October 2008 Registered Office: Finsgate 5-7 Cranwood Street London EC1V 9EE Notes: 1. Pursuant to Regulation 41 of the Uncertificated Securities Regulations 2001, the Company specifies that only those members registered on the Company's register of members at 11.00 a.m. on 24 November 2008; or, if this Meeting is adjourned, at 11.00 a.m. on the day two days prior to the adjourned meeting, shall be entitled to attend and vote at the Meeting. 2. If you are a member of the Company at the time set out in note 1 above, you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at the Meeting and you should have received a proxy form with this notice of meeting. You can only appoint a proxy using the procedures set out in these notes and the notes to the proxy form. 3. A proxy does not need to be a member of the Company but must attend the Meeting to represent you. Details of how to appoint the Chairman of the Meeting or another person as your proxy using the proxy form are set out in the notes to the proxy form. If you wish your proxy to speak on your behalf at the Meeting you will need to appoint your own choice of proxy (not the Chairman) and give your instructions directly to them. 4. You may appoint more than one proxy provided each proxy is appointed to exercise rights attached to different shares. You may not appoint more than one proxy to exercise rights attached to any one share. To appoint more than one proxy, please contact the Company's registrars, Computershare Investor Services (Ireland) Limited at Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland. 5. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against the Resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting. 6. The notes to the proxy form explain how to direct your proxy how to vote on each Resolution or withhold their vote. To appoint a proxy using the proxy form, the form must be completed and signed, sent or delivered to and received by Computershare Investor Services (Ireland) Limited at Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland no later than 11:00 a.m. on 24 November 2008 or, if this meeting is adjourned, 48 hours before the adjourned meeting. In the case of a member which is a company, the proxy form must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the proxy form is signed (or a duly certified copy of such power or authority) must be included with the proxy form. 7. In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the joint holders appear in the Company's register of members in respect of the joint holding (the first-named being the most senior). 8. To change your proxy instructions simply submit a new proxy appointment using the methods set out above. Note that the cut-off time for receipt of proxy appointments (see above) also apply in relation to amended instructions; any amended proxy appointment received after the relevant cut-off time will be disregarded. Where you have appointed a proxy using the hard-copy proxy form and would like to change the instructions using another hard-copy proxy form, please contact Computershare Investor Services (Ireland) Limited. If you submit more than one valid proxy appointment, the appointment received last before the latest time for the receipt of proxies will take precedence. 9. In order to revoke a proxy instruction you will need to inform the Company using one of the following methods by sending a signed hard copy notice clearly stating your intention to revoke your proxy appointment to Computershare Investor Services (Ireland) Limited at Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18, Ireland. In the case of a member which is a company, the revocation notice must be executed under its common seal or signed on its behalf by an officer of the company or an attorney for the company. Any power of attorney or any other authority under which the revocation notice is signed (or a duly certified copy of such power or authority) must be included with the revocation notice. The revocation notice must be received by Computershare Investor Services (Ireland) Limited no later than 11:00 a.m. on 24 November 2008. If you attempt to revoke your proxy appointment but the revocation is received after the time specified then, subject to the paragraph directly below, your proxy appointment will remain valid. Appointment of a proxy does not preclude you from attending the Meeting and voting in person. If you have appointed a proxy and attend the Meeting in person, your proxy appointment will automatically be terminated. 10. As at the close of business on 20 October 2008, the Company's issue share capital comprised 483,128,909 ordinary shares of 0.025 p each. Each ordinary share carries the right to one vote at a general meeting of the Company and therefore the total number of voting rights in the Company as at the time and date of given above is 483,128,909. For further information on the Company, visit: www.goldoilplc.com or contact: Michael Burchell Chairman Tel: 01372 361 772 Roland Cornish Beaumont Cornish Tel: 020 7628 3396 Limited Richard Hail, Head of Corporate Fox Davies Capital Tel 020 7936 5230 Finance Jonathan Charles Conduit PR Tel: 020 7429 6611 ---END OF MESSAGE--- This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.