Final Results

RNS Number : 0329D

Independent Resources PLC

25 November 2009

Independent Resources plc

("Independent Resources" or the "Company" or the "Group")

Results for the twelve months ended 30 September 2009

Highlights

· Net cash at 30 September 2009: £5.3 million (2008: £8.4 million)

· Committed third-party funding at subsidiaries as at 30th September 2009: £6.1 million (2008: £5.6 million)

· Rivara – sustained efforts yielding political consensus

· Fiume Bruna – seismic interpretation, appraisal drilling and testing campaign ongoing

· Ksar Hadada – farm-out: JV secured statutory approval and agreed work programme

Chairman's statement

I am pleased to report steady progress and some significant business successes over the past 12 months. The value of our main projects is improving as we approach the significant milestones that will enable the company to demonstrate what its business is really worth. We have also added new projects that will ensure the company continues to grow beyond our short and medium-term milestones.

In reporting on another 12 months of achievements, I remain grateful to our shareholders for the confidence they have shown in Independent Resources as we continue to develop our projects in Italy and Tunisia. During the period, we significantly stepped up our efforts to secure the remaining permits to allow the company to commence development of our keystone underground gas storage ("UGS") facility at Rivara in the Po Valley. Operations on our coal bed methane ("CBM") prospect near Grosseto have now provided the insights we needed to fine-tune the programme and allow the company the opportunity to flow gas from the underlying seam of coal. Our carried position in joint venture operations at Ksar Hadada in Tunisia, having secured its regulatory approvals, is allowing the company to pursue a significant work programme over the next six months with minor cash exposure ahead of anticipated oil flows.

Rivara

Earlier in the year we highlighted Ministerial and regulatory authority statements that left little doubt that - once all the necessary stakeholder issues have properly been taken into account - the Rivara UGS facility should be positioned to become a crucial element in Italy's future gas planning. These included statements from the gas regulator AEEG, from the anti-trust authority and from the national government itself, including the prime minister's office, the environmental ministry and the ministry of industry.

Notwithstanding these positive endorsements, the Italian environmental permitting process continues to be a source of frustration. All stakeholders would agree that the drive to decentralise and bring decision-making closer to the affected territory - a praiseworthy goal in itself - has in practice created numerous administrative overlaps and inefficiencies. The process is long and costly and slows down useful, environmentally-benign, and urgent infrastructure investments with long lead-times. Nobody is arguing for the dilution of environmental reviews, which must remain at the highest standard. What stakeholders would like however, our company included, is a fair, efficient, and predictable process that allows all parties to submit their point of view to an impartial and competent authority which then decides on the basis of the facts and the law.

Rivara UGS facility. The site's potential in terms of size, capital efficiency, low unit costs and scalability, coupled with performance characteristics that directly address the Italian gas system's weaknesses and a physical location not only at the weakest point on the system, but also at a point of transnational pipeline convergence, make Rivara stand out as something that cannot be left neglected to a seemingly open-ended permitting process.

And yet, at times the company continues to receive conflicting signals as regards the process of permitting Rivara. To illustrate just one of the paradoxes, the sharp industrial contraction that the country is experiencing, though insignificant over the expected life of the project, has eased the immediate pressure on existing gas delivery infrastructure and thus reduced the political urgency for a rapid resolution of the early stage permitting. Yet the benefit to local employment and industrial activity from the site's construction would be even more valuable during the recession, to say nothing of substantial local fiscal receipts and industrial competitiveness from its operation. Thanks to the company's efforts over many months, we believe a number of factors have finally matured to an extent that will enable all parties interested in the Rivara permitting process to move forward.

Fiume Bruna

Once again we can report that we continue to make steady progress on our other ongoing project in Italy - the planned coal bed methane development near Grosseto, named Fiume Bruna - which is 100%-owned by Independent Resources. During the past year we managed to work around many obstacles to complete the acquisition of over 40 km of 2D seismic data, clearing the way for appraisal drilling and production testing. An additional 20 km is ongoing. Our wholly-owned subsidiary Independent Energy Solutions ("IES") began drilling operations this past summer which were then suspended pending the review of new findings obtained from the FB1 well, as we described in our late August shareholder update. Seismic acquisition and interpretation continued as planned.

The primary practical consequence of the FB1 findings was that the seismic lines we are reviewing now are much more useful and are being used to make future decisions about drilling operations. The drilling results led us to modify the litho-stratigraphical assumptions used at the outset, leading to a re-interpretation of the existing library of seismic data using new parameters. We are now waiting for the seismic review to run its course before resuming drilling operations.

With the seismic campaign ongoing, and to minimise delays to the appraisal operations, we more recently decided to focus our attention on testing a well we had drilled as a stratigraphic test prior to acquiring the exploration licence. Although a shallower well and therefore expected to be modestly productive, testing it was not dependent on any new lithographical information. We felt it would be intelligent to accelerate any returns on investment where we could do so quickly. Well-specific permits are being secured and operations should resume there first, expected to commence in December.

Contemporaneously, we are also evaluating the relative merits, on a risk-adjusted basis, of deviating FB1 towards the coal it did not intersect at that location, or moving to another well-site next. We expect to be in the position to prove the concept and the resource next calendar year, as we resume drilling at selected sites so as to gain as representative a view as possible of gas and any water flow rates from the coal. Following initial drilling and testing we would plan to mobilise a well-stimulation crew to optimise the production potential of each well, basing the techniques on the variety of data we will have acquired during the drilling and logging campaign. CBM appraisal is a process that tends to start slowly and then ramp up as one is able to find the way to demonstrate commercially-viable gas flows from each and every well drilled into the resource.

We have reported to shareholders that Fiume Bruna has an estimated 4.8 billion cubic metres (167 billion cubic feet) of in-place resource, and results from initial testing, announced in July 2007, indicated an estimated recoverable resource of 2.6 billion cubic metres (91.4 billion cubic feet). Longer-term, it also has potential for carbon sequestration, permanently disposing of carbon dioxide (CO2) from nearby sources. At the same time, an estimated additional 1.8 billion cubic metres (63.6 billion cubic feet) of methane would be produced as a result of this injection of CO2. The board estimates that the net present value of the project would be increased significantly as a result. Independent Resources intends to apply for a full development concession when commercial production rates have been proven, and may seek a development partner to bring the project on stream following a declaration and subsequent permitting of commercial operations.

Ksar Hadada

At our third active project, the Tunisian authorities have approved the farm-out deal we previously announced on the Ksar Hadada oil and gas exploration permit covering 5,600 square km onshore Tunisia. This follows last year's renewal of the permit for three years from 20 April 2008. As we announced, this farm-out will finance all of the company's work commitments for the duration of this phase of the permit and allows us to retain exposure to potentially significant shareholder value upside, whilst minimising downside risks.

As part of a joint farm-out with Petroceltic Ksar Hadada Ltd, Independent Resources (Ksar Hadada) Limited ("IRKH"), has farmed out a 21.03% interest in the permit to PetroAsian Energy (Tunisia) Limited ("PetroAsian"), a subsidiary of PetroAsian Energy Holdings, a Hong Kong Stock Exchange listed company. IRKH will retain an 18.97% interest in the block. In return, PetroAsian will pay all costs of drilling and testing two new exploration wells and acquiring and processing 100 km of new 2D seismic data.

A 2009 joint venture ("JV") work programme has been agreed and will include the acquisition of 103.5 km of new 2D seismic data. The JV has since secured the necessary paperwork from the Tunisian authorities and contracted an experienced seismic acquisition crew. We expect the JV to execute the programme before the end of this year and complete the work in early 2010.

Generic drilling targets on the block have been identified and it is the JV's intention to drill and test two new wells by mid next year into the two largest oil-prone prospects on the block. These are Cambro-Ordovician quartzite reservoirs sourced by the Silurian Tanezzuft Shale, which is the main source rock for North Africa. Recent light oil discoveries with sustained flow-rates from the Cambro-Ordovician just to the south of the block have now validated the potential of these Ksar Hadada targets.

Outlook

Our cash and callable funding position remains strong, and our project portfolio continues to look attractive. This means we are well positioned to maintain and hopefully accelerate our plans.

In what remains a very difficult environment for quoted companies, we continue to focus on our long-term objectives and I believe that our efforts will be rewarded in the future. We remain committed, as we have been for many years, to the success of Independent Resources. I would like to thank our shareholders for their continued commitment, and look forward to what I believe will turn out to be a significant 2010 for the company.

Grayson Nash

Executive Chairman

Independent Resources plc

Consolidated income statement

Year ended 30 September 2009

	Notes	2009	2008

Continuing operations		£	£

Revenue		33,073	16,737

Cost of sales		-	-

Gross profit		33,073	16,737

Administrative expenses		(1,316,406)	(1,147,259)

Operating loss		(1,283,333)	(1,130,522)

Exceptional item		-	3,684,229
		(1,283,333)	2,553,707

Financial income		682,661	111,731

(Loss)/profit on ordinary activities before taxation		(600,672)	2,665,438

Taxation		(72,148)	(30,000)

(Loss)/profit for the period		(672,820)	2,635,438

Attributable to:

Minority interests		(19,650)	(23,230)

Shareholders' equity		(653,170)	2,658,668

(Loss)/earnings per share (pence)	3
From continuing operations

Basic		(1.6)	7.8

Diluted		(1.6)	7.3

Independent Resources plc

Consolidated balance sheet

As at 30 September 2009

	Notes		2009		2008
			£		£
Non-current assets
Property, plant and equipment			92,168		62,516
Goodwill			5,253,670		4,604,965
Other intangible assets			7,010,660		3,715,788

			12,356,498		8,383,269

Current assets
Other receivables		5,752,935		4,869,125
Cash and cash equivalents		5,337,403		8,455,204

		11,090,338		13,324,329

Current liabilities
Trade and other payables		(1,023,614)		(711,741)
Current taxation liabilities		(153,896)		(65,386)

		(1,177,510)		(777,127)
Net current assets			9,912,828		12,547,202


Net assets			22,269,326		20,930,471

Equity attributable to equity holders of the parent
Share capital	5		415,739		407,115
Share premium	6		12,881,702		12,444,974
Shares to be issued			4,802,904		4,602,634
Share option reserve			389,844		368,185
Foreign currency translation reserve			1,437,408		290,596
Retained earnings			894,448		1,547,618

Total equity			20,822,045		19,661,122

Minority interests			1,447,281		1,269,349

			22,269,326		20,930,471

Independent Resources plc

Consolidated statement of changes in equity

Year ended 30 September 2009

						Foreign	Total due to
				Shares	Share	currency	equity
	Retained	Share	Share	to be	option	translation	shareholders	Minority
	earnings	capital	premium	issued	reserve	reserve	of parent	interest
	£	£	£	£	£	£	£	£


1 October 2007	(1,111,050)	334,333	5,843,828	2,041,815	238,237	(6,109)	7,341,054	-
Profit for the year	2,658,668	-	-	-	-	-	2,658,668	(23,230)
Revision of estimate of cost of acquisition	-	-	-	2,560,819	-	-	2,560,819	-
New shares issued	-	72,782	6,841,468	-	-	-	6,914,250	1,292,579
Transaction costs	-	-	(240,322)	-	-	-	(240,322)	-
Share-based payments	-	-	-	-	129,948	-	129,948	-
Exchange difference on investment	-	-	-	-	-	296,705	296,705	_______-

30 September 2008	1,547,618	407,115	12,444,974	4,602,634	368,185	290,596	19,661,122	1,269,349

1 October 2008	1,547,618	407,115	12,444,974	4,602,634	368,185	290,596	19,661,122	1,269,349
Loss for the year	(653,170)	-	-	-	-	-	(653,170)	(19,650)
Fair value adjustments	-	-	-	648,705	-	-	648,705	-
New shares issued	-	8,624	439,811	(448,435)	-	-	-	-
Transaction costs	-	-	(3,083)	-	-	-	(3,083)	-
Share-based payments	-	-	-	-	21,659	-	21,659	-
Exchange difference on investment	-	-	-	-	-	1,146,812	1,146,812	197,582

30 September 2009	894,448	415,739	12,881,702	4,802,904	389,844	1,437,408	20,822,045	1,447,281

Independent Resources plc

Consolidated cash flow statement

Year ended 30 September 2009

Cash flows from operating activities	2009 £	2008 £

(Loss)/profit before taxation	(600,672)	2,665,438
Adjustments for:
Depreciation of property, plant and equipment	23,488	24,385
Loss on disposal of property, plant and equipment	-	30,604
Financial income	(682,661)	(111,731)

	(1,259,845)	2,608,696
Increase in other receivables	(384,810)	(4,530,535)
Increase in trade and other payables	356,883	581,416
Share-based payment	21,659	129,948
Exchange rate difference on investments	880,591	52,765

Cash used in operations	(385,522)	(1,157,710)

Income taxes paid	(28,648)	_____ -

Net cash used in operating activities	(414,170)	(1,157,710)

Cash flows from investing activities

Interest received	183,661	111,731
Proceeds on disposal of property, plant and equipment	-	15,421
Purchase of intangible assets	(2,839,562)	(1,035,278)
Purchases of property, plant and equipment	(44,647)	(2,679)

Net cash used in investing activities	(2,700,548)	(910,805)

Cash flows from financing activities

Issue of share capital to minority	-	1,292,579
Issue of share capital	-	6,914,250
Share issue costs	(3,083)	(240,322)

Net cash (used in)/from financing activities	(3,083)	7,966,507

Net (decrease)/increase in cash and cash equivalents	(3,117,801)	5,897,992

Cash and cash equivalents at 1 October 2008	8,455,204	2,557,212

Cash and cash equivalents at 30 September 2009	5,337,403	8,455,204

Notes to the final results for the year ended 30 September 2009

1. Basis of Presentation

The financial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union and using accounting policies which are consistent with those applied in the financial statements for the year ending 30 September 2008.

The financial information set out in this announcement, which does not constitute the statutory financial statements of the Group, is extracted from the Group's statutory financial statements for the year ended 30 September 2009, which were approved by the Board and signed by the auditors on 24 November 2009. The auditors have reported on those accounts and their report was unqualified.

The financial information for the year ending 30 September 2008 is derived from the financial statements for that year. The company's auditors have reported on the 2008 financial statements; the report was unqualified.

The financial information set out in this announcement was approved by the board on 24 November 2009.

The directors do not recommend the payment of a final dividend.

The full statutory financial statements will be included in the Group's annual report, which will be e-mailed to shareholders on 27 November 2009. Additional copies will be available at the Group's offices Tower Bridge House, St. Katharine's Way, London E1W 1DD after that date. The accounts will be delivered to the Registrar of Companies after the Company's Annual General Meeting, which is scheduled for 22 December 2009.

2. Revenue and segmental information

The group's operations are located in the UK, Italy and Tunisia.

The group generated revenue during the year of £nil (2008: £2,200) in its Tunisian operations, £nil (2008: £nil) in its UK operations and £33,073 (2008: £14,537) in its Italian operations.

The following is an analysis of the carrying amount of segment assets, and additions to property, plant and equipment, analysed by the geographical area in which the assets are located.

	United	Italy	Tunisia	Total
	Kingdom
2009	£	£	£	£

Carrying amount of segment tangible assets	1,726	90,442	-	92,168
Additions to property, plant and equipment in the year	-	44,647	-	44,647
Depreciation charges	6,507	16,981	-	23,488
Carrying amount of segment intangible assets	-	5,984,743	1,025,917	7,010,660
Additions to intangible assets	-	2,619,171	220,391	2,839,562
Carrying amount of liabilities	174,453	997,347	5,710	1,177,510
Results for the year	(413,811)	(257,531)	(1,478)	(672,820)



2008

Carrying amount of segment tangible assets	8,233	54,283	-	62,516
Additions to property, plant and equipment in the year	-	2,679	-	2,679
Depreciation charges	10,614	13,771	-	24,385
Carrying amount of segment intangible assets	-	2,910,262	805,526	3,715,788
Additions to intangible assets	-	917,936	117,342	1,035,278
Carrying amount of liabilities	563,705	100,720	112,702	777,127
Results for the year	(371,548)	3,008,623	(1,637)	2,635,438

2. Revenue and segmental information (continued)

The group considers that there is only one business segment and as such segmental analysis on this basis has not been prepared.

3. (Loss)/earnings per share

The calculation of basic and diluted loss per share at 30 September 2009 was based on the loss attributable to ordinary shareholders of £653,170. The weighted average number of ordinary shares outstanding during the year ending 30 September 2009 and the effect of the potentially dilutive ordinary shares to be issued are shown below.

Contingently issuable shares such as those included within the share option scheme or in connection with the acquisition of Independent Gas Management srl have not been treated as dilutive as the market conditions have not been met at 30 September 2009.

	2009	2008
	£	£

Net (loss)/profit for the year	(653,170)	2,658,668

Basic weighted average ordinary shares
in issue during the year	41,403,754	34,149,217

Diluted weighted average ordinary shares
in issue during the year	41,403,754	36,401,828

4. Non-cash transactions

Exceptional item - 2008

On 24 June 2008, the group reorganised its interests in the Rivara gas management project as follows:

ERG Rivara Storage srl was formed as a 100% subsidiary of Independent Gas Management srl with €1 share capital;

Independent Gas Management srl transferred its interest in the Rivara gas management project to ERG Rivara Storage srl at an independently valued amount of €53,833,339 in exchange for shares in ERG Rivara Storage srl;

ERG Rivara Storage srl issued further ordinary shares of €9,500,000 to a third party such as to reduce the group's interest to 85%.

The third party paid up 25% (€2,375,000) upon the issue of the shares. The balance outstanding is legally payable and is therefore included within amounts receivable. The balance is to be payable when called upon by the board of ERG Rivara Storage srl. The amount to be received was discounted by £1,468,000 upon initial recognition to reflect the directors' estimates of the timing and amounts of those calls. During the year, £499,000 of the original discount adjustment was reversed and is included as financial income.

As a result of the above, the group recognised an exceptional profit in 2008 on the deemed disposal of a 15% interest in ERG Rivara Storage srl of £3,684,229 after deducting related costs of brokerage and commission of £1,071,015 paid by the group.

5. Share capital

2009 2008

Group Company Group Company

£ £ £ £

Authorised

80,000,000 ordinary shares of 1p 800,000 800,000 800,000 800,000

Issued, called up and fully paid

41,573,867 (2008: 40,711,491)

ordinary shares of 1p 415,739 415,739 407,115 407,115

The holders of ordinary shares are entitled to receive dividends from time to time and are entitled to one vote per share at meetings of the company.

On 12 December 2008, a further 862,376 ordinary shares of 1p were issued in accordance with the terms of the purchase of Independent Gas Management srl in 2005. The market value of the company's shares at that date was 52p per share and therefore a share premium of £439,811 has been recognised upon their issue.

6. Share premium account

2009 2008

Group Company Group Company

£ £ £ £

1 October 12,444,974 12,444,974 5,843,828 5,843,828

Premium arising on issue of equity shares 439,811 439,811 6,841,468 6,841,468

Transaction costs (3,083) (3,083) (240,322) (240,322)

30 September 12,881,702 12,881,702 12,444,974 12,444,974

7. Other

This announcement can be viewed in full on the Company web-site www.ir-plc.com.

For further information contact:

Grayson Nash Independent Resources plc 020 8557 1135 or +3906 4549 0720