Half-yearly report

29th January 2010 GOLD OIL plc ("Gold Oil" or "the Company") Unaudited Interim Report for the period 1 May 2009 to 31 October 2009 Gold Oil the AIM-listed oil and gas exploration and production company primarily focused on opportunities in Latin America announces its unaudited interim results for the six months ended 31 October 2009. Highlights * Continuing discussions with a number of parties to bring in additional resources to the Company; * Ongoing interpretation of Z34 seismic data, five leads identified with substantial potential; application lodged for up to 250km of 2D seismic on Block XXI Peru; * Successful acquisition of data on the Azar Block; two wells and further seismic acquisition planned as a result; * Successful long term test of two Burdine wells; workovers planned; * Profit on Ordinary Activities After Tax £62,000 (2008 Loss £1.48m) * Profit Per Share £0.01p (2008 loss £0.31p) CHAIRMAN'S STATEMENT Introduction: During the period under review,many junior oil & gas companies have suffered from very limited access to the capital markets.  Indeed risk capital has been scarce since the onset of the credit crunch back in 2008.  This has affected Gold in two ways; direct access to fresh capital has been difficult and existing companies in the sector who also have found new capital difficult to source have also curtailed their operations.  As a direct consequence, there has been considerably less interest in farming into high risk projects.  Even those companies with healthy cash reserves have been less willing to take on additional commitments until some confidence returned to the capital markets. The good news is that with a recovering oil price we are seeing renewed interest and confidence in the whole E&P sector.  Hence the management team of Gold has been focused on restructuring the Company, concentrating on cost reductions and asset consolidation. A major effort was made during the period to establish relationships with potential investors and partners with a view to creating additional resources for the Group and thereby allowing us to develop our assets aggressively.  We are in negotiations with a number of parties concerning ways in which to secure such additional resources and are confident that we will be able to announce something in the near future. Peru Highlights: BlockZ34 Offshore The acquisition of 2013 km of 2D seismic in our offshore block Z34 was the first deep water exploration ever in Peruvian waters and as such was a significant milestone.  The initial processing and interpretation of the data shows that our 'blue sky exploration block' definitely has potential.  Four priority areas for further investigation have been identified so far. Three areas are based on the feasibility of extending and improving the characteristics of the major oil fields in the Talara basin. A fourth exploratory area is based on the symmetry of the trapping models to those of the present fields. The seismic survey has established the presence of typical deepwater turbidities, which normally have high porosity, permeability and good lateral continuity. We have concentrated our first interpretation on near shore leads in water depths ranging from 100 to 300m and we have identified five definitive leads all of which could have substantial potential and when aggregated could represent a very significant discovery. Block Z34 covers 371,339 hectares and is bordered to the east by Block Z2B, which is producing both oil and gas and is operated by Petrotech Peruana Currently the main objective of the Company is to continue to improve and analyze the acquired data and to continue the interpretation so as to increase the geological understanding of the area. We believe that having acquired interpreted and improved the data on the block it is now the optimal time to start to step up the farm out of a portion of this asset. Based on the initial interpretation of the seismic date, in August we filed for an extension of the EIA permit in order to extend the existing 2D permit to give us authorization to carry out a 3D survey. We believe this process is a much simpler procedure than that which was necessary for the environmental impact assessment and therefore approval is expected during the first quarter of 2010. Block XXI Onshore: The Companyhas been analyzing exploration information in the region in order to define a seismic grid on Block XXI.  In August 2009 we applied for a 2D seismic permit, and are hopeful that this will be granted in the first quarter of 2010.  The Company has already informed PeruPetro that in this exploration period we will be acquiring a 160 to 250 km 2D seismic survey and work will commence as soon as the environmental license is granted. We are gearing up to acquire this data in the first half of 2010 and are currently in negotiation with a number of seismic contractors. The objective of this survey is to get a better regional understanding of the block and also define one or more drill locations on the San Alberto prospect. Block XXI covers 303,000 hectares and is bordered by Olympics' producing oil & gas fields on Block XIII. Colombia Highlights: Azar Block On the Azar Block, two important exploration seismic surveys have been completed, which we believe significantly enhance the value of the block. Some 42 km of 2D seismic was acquired in the period and the data has confirmed the potential of the northern section of the block.  As a result the partners in the block have decided to acquire an additional 75km2 of 3D seismic over the La Florida structure, which is located in the northern section of the bloc during the current year. The La Florida lead has the potential for 15 to 25 MMbbl of Standard Tank Oil Initially In Place ("STOIIP"). We will be able to confirm these estimates after the 3D seismic survey is completed, which we expect to be in the second quarter of 2010. In addition, the acquisition of 50 km2 of 3D seismic confirmed two firm prospects: La Vega South & La Vega East.  Both prospects have an identified drill location and will be drilled in either the second or third quarter of 2010, as soon as the EIA permits are granted. La Vega East has resources net to Gold estimated at 3.25MMbbl in the T and U sands, whilst the La Vega South prospect has resources of 3.24MMbbl in both sands. Both structures are very similar and are close together and will be drilled 'back to back'.  The operator of the Block, Gran Terra Energy has considerable operating experience in the Putumayo Basin, of which these prospects are very typical. Gold has a 20% working interestin the Azar Block. Azar is located, to the northeast of the Company's existing Nancy, Burdine and Maxine oil fields and immediately to the east of the Guayoyaco Block in which the Juanambu discovery well also operated by Gran Tierra Energy tested at a flow rate of 1,410 bopd. All three blocks are located in the prolific Putumayo basin in south Colombia. Nancy-Burdine-Maxine: In June 2009, the Company took over the operation of the Nancy-Burdine-Maxine fields and hired an experienced Colombian Petroleum Engineer as Country Manager and established a small office in Bogota. In early July the workover programme of three wells, Burdine 1, 4 & 5, was initiated. The first step was to open each of the three wells and check their mechanical status and we found that all three wells are in good mechanical condition. Consequently all three wells have been production tested. Burdine 1 was the first well to be tested and a mobile pumping unit was brought onto site The production testing of the Burdine wells started early in October 2009. Burdine 1's long term test was concluded in early December 2009 after producing an average of 230 bopd of light crude (25.6o API) with 320 barrels of water from the N and U sands. The objective of the test was to get more down-hole information on the well to optimize the work-over programme for B-1 and B-5. Burdine-5 produced 60 bopd of light crude on a short term test and a work-over to chemically remove probable formation damage and increase production is being planned.  Petrophysical analysis of B-4 shows unperforated oil reservoirs and our intention is that during the work-over they will be perforated and brought on stream. As stated, the test of the Burdine wells gave us a sound data-base of information about the mechanical condition and production potential of the existing producing sands in order to define the overall development plan for the NBM field.  For 2010 the Company plans to work over the three Burdine wells, acquire a small amount of 3D seismic on the Nancy prospect and drill an additional development well at the crest of the Nancy prospect. Rosa Blanca: The Company took back operatorship and increased its working interest to 90% in Rosa Blanca: the balance of 10% rests with a local consulting & engineering group Empesa. During November-December we acquired 60 km of 2D seismic in the southern portion of the Block. The Company has been granted an extension of the second period until the end of February 2010, which will give us more time to evaluate the three leads identified by the seismic and decide if to move them into the next Exploration Period. The Rosa Blanca Block covers an area of approximately 45,000 hectares. It is located in the Middle Magdalena Valley and is surrounded by the nearby oil producing fields of Cristalina, Santa Lucia, Tisquirania, Totumal, Baturama and the South Bolivar Block. Financial results The unaudited financial results for the six months to 31 October 2009 record a profit on ordinary activities after tax of £62,000 (31 October 2008 loss £1.48m). The profit per share was £0.01p (31 October 2008 loss £0.31p). No dividend is being declared. Conclusion I am confident that the portfolio of assets that we have remains an attractive proposition.  In this regard the Company has demonstrated the significant potential of Block Z34 and remains hopeful that we will be able to do the same with Block XXI in Peru. In Colombia we are encouraged by the data acquired on the Azar block and our efforts continue to unlock the substantial reserves and resources in Nancy-Burdine-Maxine.  The main challenge for us is to attract the necessary resources in the near term to allow us to develop the Company. Mark Pritchard Chairman For further information on the Company, visit www.goldoilplc.com or contact: Gold Oil Mark Pritchard, Chairman                                         Tel: 020 8332 6882 Seymour Pierce Jonathan Wright / Richard Redmayne                    Tel:  020  7107 8000 Gold Oil plc -------------------------------------------------------------------------------- Consolidated Income Statement for the six months ended 31 October 2009     6 months to   6 months to   Year to     31 October   31 October   30 April     2009   2008   2009   Note Unaudited   Unaudited   Audited     £'000   £'000   £'000 Revenue     696     629   1,004 Cost of sales   (557)   (219)   (925) ------------------ ----------------- --------------- Gross profit   139   410   79 Development expenditure written off 5 (30)   (1,253)   (1,932) Administrative expenses   (440)   (564)   (1,321) Other operating income 6 320          -            - ------------------ ----------------- --------------- Operating loss   (11)   (1,407)   (3,174) Finance income   5   71   101 ------------------ ----------------- --------------- Loss on ordinary activities before   (6)   (1,336)   (3,073) taxation Income tax expense 7 68   (146)   34 ------------------ ----------------- --------------- Profit/(loss) on ordinary activities   62   (1,482)   (3,039) after taxation Dividends          -          -            - ------------------ ----------------- --------------- Profit/(loss) attributable to equity   62   (1,482)   (3,039) holders Earnings/(loss) per 8 0.01p   (0.31)p   (0.62)p share: basic Diluted 8 0.01p   (0.31)p   (0.62)p The group's revenue and profit/(loss) arise from continuing operations. Gold Oil plc -------------------------------------------------------------------------------- Consolidated Statement of Comprehensive Income for the six months ended 31 October 2009     6 months to   6 months to   Year to     31 October   31 October   30 April     2009   2008   2009   Note Unaudited   Unaudited   Audited     £'000   £'000   £'000 Profit/(loss) for the period     62     (1,482)   (3,073) Other comprehensive income Currency  translation differences   (235)   629   876 ------------------ ------------------ ---------------- Total comprehensive income for the   173   (853)   (2,197) period ------------------ ------------------ ---------------- Total comprehensive income attributable to : - Owners of the   173   (853)   (2,197) company Gold Oil plc -------------------------------------------------------------------------------- Consolidated Statement of Financial Position as at 31 October 2009     As at   As at   As at     31 October   31 October   30 April     2009   2008   2008     Unaudited   Unaudited   Audited   Notes £'000   £'000   £'000 Non-current assets Property, plant and equipment   106   229   158 Intangibles   5,631   4,437   2,399 Goodwill   1,960          -   1,862 ----------------- ----------------- ---------------     7,697   4,666   4,419 ----------------- ----------------- --------------- Current assets Inventories   98   226   123 Receivables   1,994   2,011   2,696 Cash and cash equivalents   1,857   4,615   2,179 ----------------- ----------------- ---------------     3,949   6,852   4,998 ----------------- ----------------- --------------- ----------------- ----------------- --------------- Total assets   11,646   11,518   9,417 Equity and liabilities Capital and reserves Called up share capital 9 125   121   125 Share premium account   10,765   10,157   10,752 Foreign exchange translation reserve   641   -   876 Retained earnings   (4,621)   (2,447)   (4,683) ----------------- ----------------- --------------- Total equity   6,910   7,831   7,070 ----------------- ----------------- --------------- Current liabilities Trade and other payables   4,736   3,687   2,347 ----------------- ----------------- --------------- ----------------- ----------------- --------------- Total equity and   11,646   11,518   9,417 liabilities Gold Oil plc -------------------------------------------------------------------------------- Consolidated Statement of Cash Flows for the six months ended 31 October 2009     6 months to   6 months to   Year to     31 October   31 October   30 April     2009   2008   2008     Unaudited   Unaudited   Audited     £'000   £'000   £'000 Operating activities   2,946   163   (2,476) ----------------- ----------------- --------------- Investing activities Return from investment and servicing of finance   5   71   101 Sale of investment assets          -   1,747            - Acquisition of investment assets          -          -            - Acquisition of goodwill   (98)       (1,698) Net cash acquired from subsidiary          -          -            - Purchase of intangible assets   (3,188)   (2,332)   (294) Purchase of tangible assets          -   (218)   (143) Received on acquisition of subsidiary          -          -   906 ----------------- ----------------- ---------------     (3,281)   (732)   (1,128) ----------------- ----------------- --------------- Financing actvities Proceeds from issue of share capital   13   34   633 ----------------- ----------------- --------------- Net cash   (322)   (535)   (2,971) inflow/(outflow) Cash and cash equivalents at the beginning of the period   2,179   5,150   5,150 ----------------- ----------------- --------------- Cash and cash equivalents at the end 1,857   4,615   2,179 of the period Consolidated Statement of Changes in Equity     £'000   £'000   £'000 Profit/(loss) for the period   62   (1,482)   (3,039) Shares issued   13   34   633 Foreign exchange translation   (235)   629   876 ----------------- ----------------- ---------------     (160)   (819)   (1,530) Opening shareholders' funds   7,070   8,600   8,600 ----------------- ----------------- --------------- Closing shareholders'   6,910   7,781   7,070 funds Gold Oil plc -------------------------------------------------------------------------------- Notes to the Interim Financial Information 1. General Information Gold Oil Plc is a company incorporated in England and Wales and quoted on the Alternative Investment Market of the London Stock Exchange. The registered office address is Finsgate, 5-7 Cranwood Street, London Ec1V 9EE. The principal activity of the Group is that of oil and gas exploration and production.. These financial statements are a condensed set of financial statements and are prepared in accordance with the requirements of IAS 34 and do not include all the information and disclosures required in annual financial statements and should be read in conjunction with the Group's annual financial statements as at 30 April 2009. The financial statements for the half year ended 31 October 2009 are unaudited and do not comprise statutory accounts within the meaning of Section 435 of the Companies Act 2006. Statutory accounts for the year ended 30 April 2009, prepared under IFRS, were approved by the Board of Directors on 29 October 2009 and delivered to the Registrar of Companies. 2. Basis of Preparation These consolidated interim financial information have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted by the European Union and on the historical cost basis, using the accounting policies which are consistent with those set out in the Company's Annual Report and Accounts for the year ended 30 April 2009. This interim financial information for the six months to 31 October 2009, which complies with IAS 34 'Interim Financial Reporting', was approved by the Board on 29 January 2010. 3. Accounting Policies Except as described below, the accounting policies applied are consistent with those of the annual financial statements for the year ended 30 April 2009, as described in those annual financial statements. The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 May 2009. IAS 1 (revised), 'Presentation of financial statements'. The revised standard prohibits the presentation of items of income and expenses (that is 'non-owner changes in equity') in the statement of changes in equity, requiring 'non-owner changes in equity' to be presented separately from owner changes in equity. All 'non-owner changes in equity' are required to be shown in a performance statement. Entities can choose whether to present one performance statement (the statement of comprehensive income) or two statements (the income statement and statement of comprehensive income). The group has elected to present two statements: an income statement and a statement of comprehensive income. The interim financial statements have been prepared under the revised disclosure requirements. Gold Oil plc ------------------------------------ Notes to the Interim Financial Information (continued) IFRS 8, 'Operating segments'. IFRS 8 replaces IAS 14, 'Segment reporting'. It requires a 'management approach' under which segment information is presented on the same basis as that used for internal reporting purposes. Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker has been identified as the steering committee that makes strategic decisions. Goodwill is allocated by management to groups of cash-generating units on a segment level. The change in reportable segments has not resulted in any additional goodwill impairment. There has been no further impact on the measurement of the group's assets and liabilities. Comparatives for 2009 have not been restated. Adoption of this Standard did not have any effect on the financial position or performance of the Group. The Group determined that the operating segments were the same as the business segments previously identified under IAS 14 Segment Reporting. Additional disclosures about each of these segments are shown in Note 4. IFRS 2 (amendment), 'Share-based payment' (effective from 1 January 2009). The amendment to the standard is still subject to endorsement by the EU. It deals with vesting conditions and cancellations. It clarifies that vesting conditions are service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. These features would need to be included in the grant date fair value for transactions with employees and others providing similar services; they would not impact the number of awards expected to vest or valuation there of subsequent to grant date. All cancellations , whether by the entity or by other parties, should receive the same accounting treatment. The group and company will apply IFRS 2 (amendment) from 1 May 2009, subject to endorsement by the EU. It is not expected to have a material impact on the group or company's financial statements. The following new standards, amendments to standards and interpretations are mandatory for the first time for the financial year beginning 1 May 2009, but are not currently relevant for the Group: IAS 23 (amendment) 'Borrowing Costs' IAS 32 (amendment) 'Financial Instruments: Presentation' IFRIC 13 'Customer loyalty programmes' IFRIC 15 'Agreements for the construction of real estate' IFRIC 16 'Hedges of a net investment in a foreign operation' IAS 39 (amendment) 'Financial instruments: Recognition and measurement' The preparation of financial statements requires management to make estimates and assumptions that affect the amounts reported for assets and liabilities as at the balance sheet date and the amounts reported for revenues and expenses during the year. The nature of estimation means that actual outcomes could differ from those estimates. Estimates and assumptions used in the preparation of the financial statements are continually reviewed and revised as necessary. Whilst every effort is made to ensure that such estimates and assumptions are reasonable, by their nature they are uncertain, and as such, changes in estimates and assumptions may have a material impact in the financial statements. i) Carrying value of property, plant and equipment  and  of intangible exploration and evaluation fixed assets. Valuation of petroleum and natural gas properties: consideration of impairment includes estimates relating to oil and gas reserves, future production rates, overall costs, oil and natural gas prices which impact future cash flows. In addition, the timing of regulatory approval, the general economic environment and the ability to finance future activities through the issuance of debt or equity also impact the impairment analysis. All these factors may impact the viability of future commercial production from developed and unproved properties, including major development projects, and therefore the need to recognise impairment. Gold Oil plc ------------------------------------ Notes to the Interim Financial Information (continued) ii) Commercial reserves estimates Oil and gas reserve estimates: estimation of recoverable reserves include assumptions regarding commodity prices, exchange rates, discount rates, production and transportation costs all of which impact future cashflows. It also requires the interpretation of complex geological and geophysical models in order to make an assessment of the size, shape, depth and quality of reservoirs and their anticipated recoveries. The economic, geological and technical factors used to estimate reserves may change from period to period. Changes in estimated reserves can impact developed and undeveloped property carrying values, asset retirement costs and the recognition of income tax assets, due to changes in expected future cash flows. Reserve estimates are also integral to the amount of depletion and depreciation charged to income. iii) Decommissioning costs; Asset retirement obligations: the amounts recorded for asset retirement obligations are based on each field's operator's best estimate of future costs and the remaining time to abandonment of oil and gas properties, which may also depend on commodity prices. The directors are in the opinion that the decommissioning costs are immaterial to be included in the accounts. iv) Share based payments The fair value of share-based payments recognised in the income statement is measured by use of the Black-Scholes model, which takes into account conditions attached to the vesting and exercise of the equity instruments. The expected life used in the model is adjusted; based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The share price volatility percentage factor used in the calculation is based on management's best estimate of future share price behaviour and is selected based on past experience, future expectations and benchmarked against peer companies n the industry. 4. 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 theoil 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 Spain South America Total   £000 £000 £000 £000 Six months ended 31 October 2009 Unaudited Revenue Sales to external customers - - 696 696 Inter-segment sales - - - -   _______ _______ _______ _______ Segment revenue - - 696 696   ═════ ═════ ═════ ═════ Results Segment result (198) - 260 62 Segment result (excluding exceptional items)   ═════ ═════ ═════ ═════ Total assets 1,396 112 10,138 11,646   ═════ ═════ ═════ ═════ Gold Oil plc -------------------------------- Notes to the Interim Financial Information (continued)   United Kingdom Spain South America Total   £000 £000 £000 £000 Six months ended 31 October 2008 Unaudited Revenue Sales to external customers - - 629 629 Inter-segment sales - - - -   _______ _______ _______ _______ Segment revenue - - 629 629   ═════ ═════ ═════ ═════ Results Segment result (501) (41) (940) (1,482) Segment result (excluding exceptional items)   ═════ ═════ ═════ ═════ Total assets 2,203 182 9,133 11,518   ═════ ═════ ═════ ═════   United Kingdom Spain South America Total   £000 £000 £000 £000 Six months ended 30 April 2009 Unaudited Revenue Sales to external customers - - 1,309 1,309 Inter-segment sales - - - -   _______ _______ _______ _______ Segment revenue - - 1,309 1,309   ═════ ═════ ═════ ═════ Results Segment result (715) (41) (2,283) (3,039) Segment result (excluding (715) (41) (2,283) (3,039) exceptional items)   ═════ ═════ ═════ ═════ Total assets 1,866 130 7,421 9,417   ═════ ═════ ═════ ═════ 5. Development expenditure write off The development expenditure written  off in the period relates to general exploration costs incurred in the UK in relation to exploration activities in South America. There have been no write offs in this period of development expenditure relating to unsuccessful drilling operations. 6. Other operating income The other operating income consists of compensation payments received from partners withdrawing from the licence group for the Rosa Blanca block in Colombia. 7. Income tax expense The income tax income relates to a reduction in the provision for corporate taxes payable in South America. Gold Oil plc -------------------------------- Notes to the Interim Financial Information (continued) 8. Earnings/(loss) per Share   6 months to   6 months to   Year to   31 October   31 October   30 April   2009   2008   2009   Unaudited   Unaudited   Audited Pence Pence Pence Earnings/(loss) per ordinary share Basic 0.01   (0.31)   (0.62) Diluted 0.01   (0.31)   (0.62)   ═════   ═════   ═════ The earnings/(loss) per ordinary share is based on the Group's profit for the period of £62,000 (30 April 2009 - loss of £3,039,000; 31 October 2008 - loss of £1,482,000) and a weighted average number of shares in issue of 500,757,759 (30 April 2009 - 488,567,333; 31 October 2008 - 483,960,764). The potentially dilutive warrants issued were nil (30 April 2009- nil; 31 October 2008 - nil). 9. Called up Share Capital During the period, the company issued 328,850 new ordinary shares for a total value of £13,154. 10. Reconciliation of operating loss to net cash outflow from operating activities   6 months to   6 months to   Year to   31 October   31 October   30 April   2009   2008   2009   Unaudited   Unaudited   Audited   £'000   £'000   £'000 Operating loss for the period (11)   (1,407)   (3,174) Depreciation and amortisation 8   196   21 Tax paid (141)   -   (47) Foreign currency translation (235)   672   876 Inventories 25   (12)   91 Receivables 702   (571)   491 Payables 2,598   1,285   (1,361) Short term loans received -   -   627   ___ ___   _______   _______   2,946   163   (2,476)   ═════   ═════   ═════ Gold Oil plc ----------------------------- Notes to the Interim Financial Information (continued) 11. Financial information The unaudited interim financial information for period ended 31 October 2009 do not constitute statutory financial statements within the meaning of Section 435 of the Companies Act 2006.The comparative figures for the year ended 30 April 2009 are extracted from the statutory financial statements which have been filed with the Registrar of Companies and which contain an unqualified audit report and did not contain statements under Section 498 to 502 of the Companies Act 2006. The interim financial information document is available on the Company's websitewww.goldoilplc.com. [HUG#1378425]

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