Final Results
Gold Oil PLC
26 September 2006
FOR IMMEDIATE RELEASE 26 September 2006
GOLD OIL ('Gold Oil' or the 'Company')
REPORT AND ACCOUNTS
FINAL RESULTS FOR THE YEAR ENDED 30 APRIL 2006
Chairman's Statement
Although Gold Oil is a company that only floated on AIM on 14 July 2004 it has
rapidly built a strong acreage position in Peru, and is seeking to do the same
in Colombia and Brazil, and in July 2006 Gold Oil spudded its first well on the
onshore Block XXI. The management in Peru has built an excellent relationship
with a Peruvian, Lima based, Exploration and Petroleum Engineering consultancy
that has proven of great value in analysing opportunities in Peru, Colombia and
Brazil and identifying and providing experienced staff to assist with our
exploration well in Peru on Block XXI. The high potential of the Company's Block
Z34 is reflected by the farm-in by Plectrum which will allow a major seismic
programme on this unexplored block to be carried out at no cost to the Company
but still leaving us with a large equity position with which to benefit from
exploration success.
In Colombia the Company's farm-in to the Nancy-Burdine-Maxine block containing
three fields that were abandoned some years ago by a major oil company as
non-material when oil prices collapsed. First results are due in September.
In Spain, in the Ayoluengo field, a programme of well re-entries and perforation
of intervals that have never been produced will start in July 2006 and it is
expected that incremental production can be achieved and funded out of existing
cash flow.
The Company raised £2.5 million in June 2006 through a placement to allow the
Company to fund existing projects and also allow us to react quickly to new
opportunities. At the end of the year the Group showed a loss of £557,000 and a
cash balance of £2,460,000 reflecting the leanness of the Group and the massive
increase in the Group's exploration and production acreage.
Looking ahead we plan to consolidate and continue activity on our current assets
in Peru and Colombia and continue to add low risk projects with potential for
early cash flow in South America.
The last year has been a very busy and successful one for the Company and I
congratulate everyone in our small team in Peru for their dedication and
professionalism. Against a background of Presidential elections in Peru and
Colombia in June 2006 this has been a real achievement.
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
Consolidated Profit and Loss Account for the year ended 30th April 2006
Note 2006 2005
£000 £000
Turnover - -
Administration expenses (698) (383 )
Operating loss (698) (383 )
Other interest receivable and similar income 5 141 9
Loss on ordinary activities before taxation 2-4 (557) (374 )
Taxation credit on loss on ordinary activities 6 - -
Loss for the year for group (557) (374 )
Loss: Earnings per ordinary share 8
- Basic (0.16p) (0.18p )
- Diluted (0.14p) (0.15p )
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.
There were no other recognised gains or losses in the period.
Consolidated Balance Sheet as at 30th April 2006
2006 2005
Note £000 £000 £000 £000
Fixed assets
Tangible assets 9 22 25
Intangibles 10 299 -
Investments 11 192 -
513 25
Current assets
Debtors 12 290 39
Cash at bank and in hand 2,460 3,632
2,750 3,671
Creditors: amounts falling due within 13 (103 ) (116 )
one year
Net current assets 2,647 3,555
Total assets less current liabilities 3,160 3,580
Capital and reserves
Called up share capital 14 90 86
Share premium account 15 4,004 3,868
Profit and loss account 15 (934) (374 )
Equity shareholders' funds 3,160 3,580
Company Balance Sheet as at 30th April 2006
2006 2005
Note £000 £000 £000 £000
Fixed assets
Tangible fixed assets 9 2 2
Intangibles 10 299 -
Investments 11 804 150
1,105 152
Current assets
Debtors 12 149 32
Cash at bank and in hand 2,272 3,606
2,421 3,638
Creditors: amounts falling due within one 13 (92 ) (113 )
year
Net current assets 2,329 3,525
Total assets less current liabilities 3,434 3,677
Capital and reserves
Called up share capital 14 90 86
Share premium account 15 4,004 3,868
Profit and loss account 15 (660) (277 )
Equity Shareholders' Funds 3,434 3,677
Consolidated Cash Flow Statement for the year ended 30th April 2006
Note 2006 2005
£000 £000
Cash flow statement
Cash outflow from operating activities 17 (950) (306 )
Returns on investments and servicing of finance 18 141 9
Capital Expenditure 18 (503) (25 )
(1,312) (322 )
Management of liquid resources 18 - (1,800 )
Financing 18 140 3,954
Increase in cash in the year (1,172) 1,832
Reconciliation of net cash flow to movement in net
funds
(Decrease)/ Increase in cash in year (1,172) 3,632
Deposits treated as liquid resources - (1,800 )
(1,172) 1,832
Opening net debt 3,632 -
Closing net debt 2,460 1,832
Statement of total recognised gains and loss for the year ended 30th April 2006
2006 2005
£000 £000
Loss for the year for the Group (557) (374)
Foreign exchange reserves (3) -
Total recognised loss for the year (560) (374)
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 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 for period ending on 30
September. 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 instalments 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 end
unescalated price levels. Changes in reserves and cost estimates are recognised
prospectively.
2. Pre-production costs
Pre production costs incurred in Peru and which have been expensed in the period
were £163,000 (2005 - £94,000).
3. Loss on ordinary activities before taxation
2006 2005
£000 £000
Loss on ordinary activities before taxation is stated
after charging
Auditors' remuneration:
Group - audit 10 8
Company - audit 10 6
Group - non audit services 23 10
Depreciation 6 -
Amortisation of goodwill 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:
2006 2005
Technical and administration 6 6
The aggregate payroll costs of these persons were as follows:
2006 2005
£000 £000
Wages and salaries 64 26
Social security costs 6 3
70 29
5. Interest receivable and similar income
2006 2005
£000 £000
Bank interest 141 9
6. Taxation
Analysis of charge in period:
2006 2005
£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 2006 2005
standard rate of corporation tax in the UK 30%. The £000 £000
differences are explained below:
Current tax reconciliation
Loss on ordinary activities before tax (557) ) (374 )
Current tax at 30% (167) ) (112 )
Effects of:
Expenses not deductible for tax purposes - -
Increase in tax losses 167 112
Total current tax charge (see above) - -
--
At 30 April 2006 the Group had net operating losses to carry forward of £821,000
(2005 - £374,000). The deferred tax asset on these tax losses at 30% of £246,000
(2005 - £112,000) 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:
2006 2005
£000 £000
Holding company's loss 383 277
8. Loss per share
Loss per ordinary share
- Basic (0.16) (0.18 )
- Diluted (0.14) (0.15 )
Loss per ordinary share is based on the Group's loss for the financial year of
£557,000 (2005 - £374,000).
The weighted average number of shares used in the calculation is the weighted
average ordinary shares in issue during the year.
2006 2005
Number Number
Weighted average ordinary shares in issue during the 349,869,589 212,791,361
year
Potentially dilutive warrants issued 43,981,918 39,305,624
Weighted average ordinary shares for diluted earning 393,851,507 252,096,985
per share
9. Tangible fixed assets
Equipment Vehicle Total
and
Machinery
£'000 £000 £000
Group
Cost
At beginning of year 6 19 25
Additions 4 - 4
Disposals (2) - (2)
At end of year 8 19 27
Depreciation
At beginning of year
Charge for the year 2 4 6
On Disposals (1) - (1)
At end of year 1 4 5
Net book value
At 30 April 2006 7 15 22
At 30 April 2005 6 19 25
Company
Cost
At beginning of year 2 - 2
Additions 1 - 1
At end of year 3 - 3
Depreciation
At beginning of year - - -
Charge for the year 1 - 1
At end of year 1 - 1
Net book value
At 30 April 2006 2 - 2
At 30 April 2005 2 - 2
10. Intangible fixed assets
Deferred
Exploration
costs
£000
Company and Group
Cost
At beginning of year -
Expenditure 299
At end of year 299
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
Group Goodwill on Share of Listed Total
acquisition Associate's Investments
of Associate Net Deficit
Cost £000 £000 £000 £000
At beginning of year - - - -
Additions 267 (117) 50 200
At end of year 267 (117) 50 200
Amortisation
Charge for the year 8 - - -
At end of year 8 - - -
Net book value
At 30 April 2006 259 (117) 50 192
The market value of the listed investments was £33,333 at 30 April 2006.
11. Fixed asset investments
Company
Investment Listed Loan to Shares in Total Shares in
in investment group group group
Associate undertaking undertaking undertaking
2006 2005
Cost £000 £000 £000 £000 £000 £000
At beginning of - - - 150 150 -
year
Additions 150 50 454 - 654 150
At end of year 150 50 454 150 804 804
The Company's subsidiary undertakings at the year end were a 100% interest in
the ordinary shares of:
Gold Oil Peru, a company registered in Peru whose principal activity is
exploration of oil and gas.
The Company also had a 50% interest in the ordinary shares of :
Northern Petroleum Exploration 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 30 September 2005.
12. Debtors
2006 2005
Group Company Group Company
£000 £000 £000 £000
Trade debtors - - 14 -
Other debtors 173 32 5 5
Amounts owed by subsidiary and associate 111 111 - 12
undertakings
Prepayments and accrued income 6 6 20 15
290 149 39 32
13. Creditors: amounts falling due within one year
2006 2005
Group Company Group Company
£000 £000 £000 £000
Trade creditors 67 59 91 89
Other creditors 5 2 4 3
Accruals and deferred income 31 31 21 21
103 92 116 113
14. Called up share capital
2006 2005
£000 £000
Authorised
400,000,000 ordinary shares of £0.00025 each 100 100
Allotted, called up and fully paid
Equity: 359,150,000 ordinary shares of £0.00025 each 90 86
On 29 June 2005, 3,750,000 ordinary shares were issued at 1p per share on the
exercise of warrants.
On 28 September 2005, 100,000 ordinary shares were issued at 1p per share on the
exercise of warrants.
On 28 February 2006, 10,000,000 ordinary shares were issued at 1p per share.
On 8 March 2006, 100,000 ordinary shares were issued at 1p per share.
On 2 May 2006, 5,000,000 ordinary shares were issued at 7.5p per share.
On 16 May 2006, 4,020,000 ordinary shares were issued at 7.5p per share.
On 8 June 2006, 36,155,000 ordinary shares were issued at 7.5p per share.
On 13 June 2006, 6,825,000 ordinary shares were issued at 7.5p 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 on the exercise of
warrants
15. Share premium and reserves
Share Profit
premium and
account loss
£000 account
£000
Group
At beginning of year 3,868 (374)
Loss for the period - (557)
Foreign Exchange Reserves - (3)
Premium on share issues 136 -
At end of year 4,004 (934 )
Share Profit
premium and
account loss
£000 account
£000
Company
At beginning of year 3,868 (277)
Loss for the period - (383)
Premium on share issues 136 -
At end of year 4,004 (660)
16. Reconciliation of Movements in Shareholders' Funds for the year ended 30th
April 2006
2006 2005 2006 2005
£000 £000 £000 £000
Group Company
Opening shareholders' funds 3,580 - 3,677 -
Loss for the financial year (557) (374) (383) (277)
Foreign exchange reserves (3) - - -
Increase in share capital 140 3,954 140 3954
Closing shareholders' funds 3,160 3,580 3,434 3,677
17. Reconciliation of operating loss to operating cash flows
2006 2005
£000 £000
Operating loss (698) (383 )
Depreciation and Amortisation 14 -
(Increase) in debtors (255) (39 )
Increase in creditors (14) 116
Foreign exchange reserves 3 -
Net cash outflow from operating activities (950) (306 )
18. Analysis of cash flows
2006 2005
£000 £000
Returns on investment and servicing of finance
Interest received 141 9
Capital expenditure and financial investment
Purchase of tangible fixed assets (4) (25)
Purchase of Investments (50) -
Purchase of Associate (150) -
Purchase Intangible asset (299) -
---- ----
Total (503) (25)
Management of liquid resources
Increase in short term bank deposits - 1,800
Financing
Issue of ordinary share capital 140 3,954
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 Interest
at end of at start
period of period
Executive directors
M N Burchell 3,000,000 3,000,000
P G Mahony - -
J G Moore 20,000,000 20,000,000
Directors' emoluments and other benefits are as listed below.
2006 2005
£000 £000
Directors' remuneration 42 14
Directors' fees 98 38
140 52
Warrants held by the directors are as follows:
No. of
Warrants
M N Burchell 2,300,000
J G Moore 9,200,000
P G. Mahony 2,300,000
Total Warrants held by the directors 23,000,000
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 $150,000 to PeruPetro SA to fulfil agreements
to explore certain areas.
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.
Note to the announcement:
This announcement does not constitute a full financial statement of the
Company's affairs for the year to 30 April 2006 (the 'Period'). The auditors
have reported on the full financial statement for the Period.
The report and accounts have been posted to Shareholders and are available, free
of charge, for a period of at least one month from Sandy Lodge, Sandy Lane,
Kingswood, Surrey KT20 6ND.
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