Interim Results
Aminex PLC
27 September 2007
27 September 2007
AMINEX PLC
("Aminex" or "the Company")
Interim results for the six months ended 30 June 2007
Aminex, the oil and gas company listed on the London and Irish Stock Exchanges,
today announces its results for the half year ended 30 June 2007.
HIGHLIGHTS
• Gross revenues $2.9m (2006 $2.6m) and net loss $1.6m (2006 $1.63m)
• Rights Issue and institutional placing successfully completed
• Drilling due to commence in Tanzania in October and in Egypt in November
• Share of costs of Nyuni wells farmed out to third parties
• Onshore seismic in progress at Ruvuma (Tanzania) and in Madagascar
• South Weslaco GU#37 gas well in Texas now on production from a deep zone
• Further development drilling at South Weslaco in near future
• Exploration drilling to begin in Texas at Alta Loma in early 2008
• Negotiations for a licence in Kenya at an advanced stage
Brian Hall, Aminex's Chairman, commented:
"The first half principally involved preparation for our active exploration
programme in Tanzania, Madagascar and Egypt during the rest of 2007 and beyond.
We raised new capital through a placing and rights issue in the summer and we
spread our drilling risk through new farm-out arrangements in the Nyuni licence.
Operationally we have made good progress and the coming months will be of
great significance in the Company's development."
Enquiries:
Aminex PLC +44 (0) 20 7291 3100
Brian Hall - Executive Chairman
Simon Butterfield - Finance Director
Pelham Public Relations +44 (0) 20 7743 6679
Archie Berens
AMINEX PLC
("Aminex" or "the Company")
Interim results for the six months ended 30 June 2007
OVERVIEW
In the period under review, Aminex successfully completed an institutional
placing followed by a rights issue completed after the end of the period which
together raised $29 million before expenses, signed contracts for drilling two
back-to-back wells in Tanzania and signed contracts for acquiring new onshore
seismic data in operationally challenging areas of both Tanzania and Madagascar.
Also during the period two farm-outs of the Nyuni licence in Tanzania were
achieved.
Since the end of the period, a gas well at South Weslaco, Texas has, after
several attempts, successfully been put on production, proving up a deeper and
prolific gas zone in this gas field which has been producing for some time from
shallower horizons.
The commencement of drilling in Tanzania has been delayed for several months
because of mechanical problems with the rig experienced by the current operator.
These problems have required some major and complex upgrading in situ.
Remedial work has been beyond Aminex's control and, with no alternative rigs
operating in the region, we have had no choice but to wait. We now anticipate
delivery of the rig to our consortium shortly. In Egypt we expect to spud the
first of three wells on the West esh el Mellahah concession in November.
FINANCIAL REVIEW
During the first six months of 2007, revenues from continuing operations
amounted to US$2.9 million, 14% ahead of the 2006 comparative period. This
improvement is mainly the result of higher revenues from the oilfield services
and supplies business, which have increased from US$1.3 million during the first
half of 2006 to a current US$1.7 million.
Revenues from oil and gas production operations at US$1.2 million are slightly
down on the US$1.3 million for the first six months of 2006. The decrease is
mainly a consequence of lower gas production from the South Weslaco field, as
well as slightly lower average oil prices achieved during the current period.
The reduced gas production from South Weslaco was partly offset by the
recommencement in February 2007 of gas production from the Alta Loma field. The
average gas price achieved during the reporting period was US$6.03 per mcf, 3%
ahead of the 2006 comparative period price of US$5.87 per mcf. Oil production
was similar for both periods, with the bulk arising from the Somerset field
which produces a crude blend that is classified as South Texas Sour, priced at a
significant discount against the standard West Texas Intermediate pricing. As a
consequence, the average oil price achieved was US$55.70 per barrel which
compares with an average first half of 2006 price of US$59.84 per barrel
(although non-Somerset production achieved an average oil price of US$67.23 per
barrel compared with US$68.23 per barrel for 2006).
Cost of sales at US$2.1 million is US$0.5 million ahead of 2006 mainly as a
consequence of higher turnover from the oilfield services and supplies business.
The depletion and decommissioning charge is similar for both periods.
Gross profit for the period amounts to US$0.61 million, a slight decline on the
2006 comparative period profit of US$0.76 million. After taking into account
administrative and depreciation expenses at US$2.1 million (an improvement on
2006 of US$0.2 million) and net financing costs of US$80,000 (2006: US$95,000),
the resulting loss for the period of US$1.60 million is approximately the same
as the 2006 loss of US$1.63 million.
Non-current assets have increased by US$1.2 million during the first six months
of 2007, mostly representing current-period exploration expenditures in East
Africa and Madagascar, whereas current assets (mostly cash) have increased by
just over US$23 million, mainly as a result of a net US$18.7 million share
placing, the proceeds of which were received in June 2007. Current liabilities
have increased by US$6.3 million to US$7.7 million, most of such increase
representing unpaid long lead items ordered for the forthcoming Nyuni well
together with our partners' shares of unutilised joint venture cash at the
period end.
OPERATIONS
Tanzania - Nyuni/East Songo-Songo PSA
Delays in delivery of the Caroil-6 due to mechanical problems have set back our
drilling project at Nyuni by over three months but we currently anticipate the
rig will be ready for hand over to us in mid-October. All other materials and
services are in place for spudding Kiliwani-1 as soon as the rig has been
mobilised to our site, on the small island of Kiliwani about one kilometre south
of Songo-Songo island. The second well is due to be drilled at a location known
as Kiliwani North but we are keeping our options open as we have yet to test the
capabilities of the Caroil-6 rig in its upgraded state.
Partners in this licence are now Ndovu Resources Ltd. (wholly-owned Aminex
subsidiary) 39%, RAK Gas Commission 25%, Key Petroleum Ltd. 20%, East Africa
Exploration Ltd. 10% and Bounty Oil & Gas Ltd. 6%. RAK Gas and Key Petroleum
farmed into the licence during the period and East Africa Exploration has
acquired its interest through funding seismic acquisition. Farm-out talks with
Orca Exploration (formerly East Coast Energy) announced some time back have not
been concluded. Aminex operates this PSA.
Tanzania - Ruvuma
The Ruvuma PSA comprises two licences known as Lindi and Mtwara, jointly
covering approximately 12,000 square kilometres and split 80% onshore and 20%
offshore. Marine 2D seismic has already been carried out in late 2005 and
acquisition of approximately 400 kms of new onshore seismic is currently in
progress and being carried out by BGP of China. Results of the seismic will
determine drilling locations and two wells are currently planned for 2008,
possibly stretching into 2009. Several sizeable oil and gas prospects have
already been identified and Aminex regards the Ruvuma PSA as a key part of its
East African exploration portfolio. Partners in Ruvuma are Ndovu Resources Ltd.
(wholly-owned Aminex subsidiary) 50% and Tullow Oil 50%. Aminex operates this
PSA.
Madagascar - Manja
The Manja PSA, Block 3108, covers 10,750 square kilometres onshore Madagascar
and adjoins the southerly part of the island's western shore line. Although
close to the coast, Manja is remote and access is difficult. Furthermore our
licence is in an area of environmental sensitivity and great care is needed
during operations. Six wells have been drilled on Manja in the past including a
well which flowed gas in the 1950's but which was never developed for prevailing
economic reasons at that time. Acquisition of approximately 500 kms of new
onshore seismic is currently being carried out by BGP of China. Results of this
seismic will determine whether the licence is extended into a second period at
the end of this year, in which case there will be an obligation to drill one
exploration well before end 2009. The licence holder in Manja is Amicoh
Resources Ltd., a joint venture company owned 50-50 by Aminex and Mocoh
Resources Ltd. Aminex operates this PSA on behalf of Amicoh Resources Ltd.
Egypt - WEEM
Drilling is due to commence on the West esh el Mellahah Block 2 ("WEEM") permit
in the onshore Gulf of Suez region of Egypt in November. WEEM contains numerous
prospects including some which adjoin Lukoil's significant oil production on
WEEM Block 1. The main prospects are defined by 3D seismic. Partners in WEEM
are First Energy, Sinopex, Groundstar Resources, FS International and Aminex.
Aminex has a carried interest in drilling until first commercial production.
Aminex is the operator of record and day to day operations are shared with
Sinopex.
North Korea - DPRK
Aminex has a 20 year Petroleum Agreement with the government of North Korea or "
DPRK" which became effective in 2004. There has only been very limited activity
in DPRK during the period under review as the country has experienced some major
political changes which appear to have resulted in an accord with the USA and a
treaty to dismantle nuclear weapons-building capability in return for economic
support from foreign powers. Aminex's principal area of interest is now the
East Sea where we believe the exploration potential to be high. It is our
intention to finalise a new PSA for the East Sea and to introduce industry
partners for a major exploration initiative. However, clearly we need to be
sure that the political environment is stable and that treaties currently being
negotiated are firmly concluded before embarking on such a significant project.
Kenya
After a number of setbacks negotiations are now at an advanced stage on a PSA
for near-shore blocks L17 and L18.
USA
Aminex USA, Inc. operates or participates in four main areas, being (1) the
Somerset leases in Texas which provide stable income from stripper production
but with only limited upside, (2) the South Weslaco gas field in Texas where a
drilling programme is in progress, (3) the Alta Loma lease in Texas where a deep
exploration well is planned and (4) the producing Shoats Creek field in
Louisiana which is thought to have considerable potential for further
development.
Aminex and partners have now drilled three wells at South Weslaco and the third,
known as GU#37, was drilled some time ago but has only now been completed for
production. This well was drilled to a greater depth than the earlier ones to
test a deeper and potentially more prolific zone in the Frio sand. The well
encountered multiple gas bearing sands in both shallower and deeper horizons but
the deeper zone proved very hard to make flow. Had the deeper zone been plugged
off and abandoned gas could have been produced from the shallower horizons but
we would then have been unable to return to the deeper zone in the future.
Accordingly we have persevered with the deeper zone, finally taking the risk of
a powerful fracture of the deep formation. This has paid off and the well is
now producing gas and has proved up the potential of the deeper zone. The
reserves in this well were not included in a reserves report published earlier
this year which valued our US properties at over $84 million.
At Alta Loma a deep gas exploration well is expected to commence in early 2008,
adjacent to but separate from Aminex's existing gas well on the property. The
operator of these leases is Peoples Energy which has recently been acquired by
El Paso Corporation. The process of the sale of Peoples Energy has served to
slow down progress but we are confident that the arrival of El Paso will now
accelerate this project.
At Shoats Creek Forest Oil is conducting a survey over our leases and the
adjacent area and we will be entitled to receive their data on our properties so
that, for the first time, we shall have a clear picture of this field which we
believe to have great potential but which has always been hard to understand.
The survey has been temporarily delayed by rains and flooding but is due to
recommence shortly.
STRATEGY AND PROSPECTS
Aminex has a good spread of acreage in North Africa, East Africa, the USA and
the Far East, ranging from stable American production through drill-ready
prospects and advanced stage seismic operations in Africa to the speculative
upside of our agreement with the government of North Korea. With new partners
in Tanzania and a recently strengthened operations team, Aminex is well placed
to launch an active and extensive frontier drilling programme, starting with the
Kiliwani-1 well in Tanzania which will be spudded early in the fourth quarter of
this year. Aminex's successful Placing and Rights Issue completed this summer
provides the means to move ahead with these projects in a determined manner.
It remains Aminex's strategy to identify and exploit opportunities before they
come to the attention of major competitors, a strategy we have successfully
followed in building our African portfolio.
B.A.HALL
Chairman
GROUP INCOME STATEMENT
for the six months ended 30 June 2007
Notes Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 December
US$'000 US$'000 2006
US$'000
Revenue - continuing operations 2 2,939 2,584 5,019
Cost of sales (2,130) (1,639) (3,401)
Depletion, depreciation and decommissioning of oil
and gas interests (200) (185) (386)
Gross profit 609 760 1,232
Administrative expenses (2,088) (2,281) (3,974)
Depreciation (42) (16) (45)
Loss on operating activities (1,521) (1,537) (2,787)
Financing income 3 37 51 165
Financing costs 4 (117) (146) (240)
Loss before income tax (1,601) (1,632) (2,862)
Income tax expense - - -
Net loss for the period - continuing operations 2 (1,601) (1,632) (2,862)
Basic and diluted loss per share (cent) 5 (0.93) (1.03) (1.74)
STATEMENT OF RECOGNISED INCOME AND EXPENSE
for the six months ended 30 June 2007
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 December 2006
US$'000 US$'000 US$'000
Net currency translation gain recognised directly in
equity 108 9 14
Loss for the financial period (1,601) (1,632) (2,862)
Total recognised income and expense for the
financial period (1,493) (1,623) (2,848)
Attributable to the equity holders of the Company (1,493) (1,623) (2,848)
GROUP BALANCE SHEET
At 30 June 2007
Notes Unaudited Unaudited Audited
30 June 30 June 31 December
2007 2006 2006
US$'000 US$'000 US$'000
ASSETS
Exploration and evaluation assets 17,809 16,254 17,065
Property, plant and equipment 9,488 8,934 9,424
Other investments 809 418 418
Total non current assets 28,106 25,606 26,907
Trade and other receivables 3,153 2,163 1,532
Cash and cash equivalents 6 25,188 5,961 3,648
Total current assets 28,341 8,124 5,180
Total assets 56,447 33,730 32,087
LIABILITIES
Current liabilities
Interest-bearing loans and borrowings (86) (48) (43)
Trade and other payables (7,376) (1,795) (1,116)
Decommissioning provision (216) (189) (194)
Total current liabilities (7,678) (2,032) (1,353)
Non-current liabilities
Interest-bearing loans and borrowings (97) (117) (102)
Decommissioning provision (2,265) (2,144) (2,183)
Total non-current liabilities (2,362) (2,261) (2,285)
Total liabilities (10,040) (4,293) (3,638)
NET ASSETS 46,407 29,437 28,449
EQUITY
Issued capital 7 16,415 11,871 11,916
Share premium 7 54,669 43,886 44,010
Capital conversion reserve fund 234 234 234
Share option reserve 757 662 729
Share warrant reserve 5,164 899 899
Foreign currency reserve fund 47 (67) (61)
Retained earnings (30,879) (28,048) (29,278)
TOTAL EQUITY 46,407 29,437 28,449
GROUP STATEMENT OF CASHFLOWS
for the six months ended 30 June 2007
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 30 June 31 December
2007 2006 2006
$'000 $'000 $'000
Operating activities
Loss for the financial period (1,601) (1,632) (2,862)
Depletion, depreciation and decommissioning 242 201 431
Foreign exchange losses 112 12 20
Financing income (37) (51) (165)
Financing costs 117 146 240
Gain on sale of plant and equipment (2) (5) (11)
Impairment provision against listed investment 111 - -
Equity-settled share-based payment charge 28 475 542
(Increase)/decrease in trade and other receivables (625) (602) 2
Increase/(decrease) in trade and other payables 5,282 107 (398)
Net cash generated/(absorbed) by operations 3,627 (1,349) (2,201)
Cost of decommissioning (4) (107) (165)
Interest paid (9) (6) (12)
Tax paid - - -
Net cash inflows/(outflows) from operating activities 3,614 (1,462) (2,378)
Investing activities
Acquisition of property, plant and equipment (293) (1,108) (1,986)
Expenditure on exploration and evaluation assets (761) (737) (1,548)
Proceeds from sale of property, plant and equipment 259 38 45
Interest received 37 50 192
Net cash outflows from investing activities (758) (1,757) (3,297)
Financing activities
Proceeds from the issue of share capital 21,277 5,536 5,708
Payment of transaction costs (2,631) (270) (279)
Loans repaid (21) (22) (42)
Loans received 59 52 52
Net cash inflows from financing activities 18,684 5,296 5,439
Net increase/(decrease) in cash and cash equivalents 21,540 2,077 (236)
Cash and cash equivalents at 1 January 3,648 3,884 3,884
Cash and cash equivalents at end of the financial
period 25,188 5,961 3,648
NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2007
1. Accounting policies
The unaudited 2007 interim financial information has been prepared in accordance
with the recognition and measurement principles of the International Financial
Reporting Standards (IFRS) issued by the International Accounting Standards
Board and adopted by the European Union which apply at 30 June 2007 and as set
out in the accounting policies forming part of the Group's last annual report.
The 2007 interim financial information has been prepared on a consistent basis
with 31 December 2006 financial statements and 30 June 2006 interim financial
information.
2. Segmental disclosure
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 30 June 31 December
2007 2006 2006
$'000 $'000 $'000
Segmental revenue
US production activities 1,246 1,327 2,512
Oilfield services and supplies 1,693 1,257 2,507
Total Revenue 2,939 2,584 5,019
Segmental net profit/(loss) for the period
US - producing assets (65) 148 144
Africa and Asia - exploration assets (235) (251) (419)
Europe - oilfield services and supplies assets 126 117 169
Europe - Group costs (1,427) (1,646) (2,756)
Group net loss for the period (1,601) (1,632) (2,862)
Segmental assets
US - producing assets 9,629 9,335 9,445
Africa and Asia - exploration assets 25,731 16,305 17,478
Europe - oilfield services and supplies assets 509 694 289
Europe - Group assets 20,578 7,396 4,875
Total assets 56,447 33,730 32,087
Segmental liabilities
US - producing assets (2,953) (3,065) (2,979)
Africa and Asia - exploration assets (5,900) (114) (84)
Europe - oilfield services and supplies assets (345) (597) (163)
Europe - Group activities (842) (517) (412)
Total liabilities (10,040) (4,293) (3,638)
Net assets before borrowings have been adjusted to eliminate the impact of
intercompany financing.
NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2007
3. Financing income
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 2007 30 June 2006 31 December 2006
$'000 $'000 $'000
Deposit interest income 37 51 165
4. Financing costs
Unaudited Unaudited Audited
6 months ended 6 months ended year ended
30 June 2007 30 June 2006 31 December 2006
$'000 $'000 $'000
Bank loans and overdraft interest 2 2 1
Decommissioning provision interest charge 109 140 228
Other finance charges 6 4 11
117 146 240
5. Loss per share
Unaudited Unaudited Audited
6 months ended 6 months ended Year ended
30 June 2007 30 June 2006 31 December 2006
Numerator for basic and diluted loss per share:
Net loss for the financial period ($'000) (1,601) (1,632) (2,862)
Weighted average number of shares:
Weighted average number of ordinary shares
('000) 172,375 158,600 164,289
Basic and diluted loss per share (cents) (0.93) (1.03) (1.74)
There is no difference between the net loss per Ordinary Share and the diluted
net loss per Ordinary Share for the financial periods ended 30 June 2007 and 30
June 2006 and the year ended 31 December 2006 as all potentially dilutive
Ordinary Shares outstanding are anti-dilutive. There were 7,561,000
anti-dilutive share options and 32,827,634 anti-dilutive share warrants in issue
as at 30 June 2007.
6. Cash and cash equivalents
Included in cash and cash equivalents is an amount of US$4,677,000 held on
behalf of the non-operating joint venture partners for expenditure on
exploration and evaluation assets where the Aminex Group acts as operator of the
joint venture.
NOTES TO THE INTERIM FINANCIAL STATEMENTS (unaudited)
for the six months ended 30 June 2007
7. Issued share capital and share premium
Issued Share
Capital Premium
$'000 $'000
At 1 January 2007 11,916 44,010
Proceeds from placing net of issue costs 4,499 10,659
At 30 June 2007 16,415 54,669
8. Statutory Information
The interim financial information to 30 June 2007 and 30 June 2006 is
unaudited and does not constitute statutory financial information. The
information given for the year 31 December 2006 does not constitute statutory
accounts within the meaning of Section 19 of The Companies (Amendment) Act 1986.
The statutory accounts for the year ended 31 December 2006 have been filed
with the Registrar and the auditor's report on these statutory financial
statements was unqualified. This announcement is being sent to shareholders and
will be made available at the Company's registered office at 6 Northbrook Road,
Dublin 6 and at the Company's UK representative office at 7 Gower Street, London
WC1E 6HA
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