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Oil Quest Resources (OILQ)

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Tuesday 07 February, 2006

Oil Quest Resources

Interim Results

Oil Quest Resources PLC
07 February 2006

                            OIL QUEST RESOURCES PLC
                         ('Oil Quest' or the 'Company')


           INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2005



Chairman's Statement

In my statement in the inaugural Annual Report and Accounts of Oil Quest
published in September 2005, I commented that shareholders in Oil Quest hold a
stake in a solid, junior oil company, well positioned in these times of
increasing energy prices to become a successful explorer leading to production
in due course.

Our strategy has been derived from a belief that the optimum way to generate
shareholder value in the oil and gas E&P sector is to build a balanced portfolio
of interests in licences with the potential for providing major capital growth.

In a separate release today, we have announced the proposed acquisition of the
EnCore group of companies (the 'EnCore Companies') by means of a reverse
takeover in conjunction with an institutional placing which has raised £17.5
million (before expenses), subject to shareholder approval.  We believe that the
proposed acquisition will accelerate the implementation of the Company's
strategy and provide the potential for substantial growth in shareholder value.

Review of Operations

Oil Quest currently has interests in 12 UK onshore hydrocarbon licences situated
within the Wessex, Weald and Cleveland Basins.  In addition, the Company has
been offered, following an application in the 23rd Licensing Round, by the DTI,
a 30 per cent. interest in Block 43/6 in the Southern Gas Basin of the North
Sea.

Oil Quest is involved in an active drilling programme onshore UK.  The
Sandhills-2 and Bouldnor Copse-1 exploration wells in the Wessex Basin reached
target depth ('TD') in September and October 2005 respectively.  However,
neither well contained commercial hydrocarbons.  The Directors remain confident
in the potential for the Wessex Basin and the Company has acquired a 20 per
cent. interest in P.1153 which contains the Hurst Castle prospect.

The Kirkleatham-4 well in the Cleveland Basin, in which Oil Quest has a 20 per
cent. interest, reached TD in January 2006.  During drilling, gas shows were
encountered within the target Permian age Zechstein carbonates.  Logging
operations confirmed the presence of a c.19m gas column within the Cadeby
Formation.  Evaluation of wireline log data indicated high gas saturations and
good porosity development within the gas bearing interval.  Testing operations
will be undertaken using a work-over rig.  Further activity will be assessed
once test results have been evaluated.

Immediately following the Kirkleatham-4 well, the rig was mobilised to the
Westerdale-1 well site in North Yorkshire.  Drilling of the Westerdale-1 well,
in which Oil Quest has a 20 per cent. interest, commenced on 20 January 2006 and
is ongoing.

Further wells are anticipated on the UK licences during 2006.

Proposed Acquisition of the EnCore Companies

Subject to the approval of shareholders at an extraordinary general meeting to
be held on 2 March 2006, Oil Quest will acquire the EnCore Companies for a
consideration of up to 48,450,000 ordinary shares.  Also subject to shareholder
approval, Oil Quest has raised £17.5 million (before expenses) through the issue
of 112,000,000 ordinary shares at 15.625p per share through Westhouse Securities
LLP.

It is also proposed that each of the EnCore directors will become a director of
the Company, which will be renamed EnCore Oil plc.

The EnCore management team has a strong track record, having previously founded
and built EnCana (UK) Limited, the UK arm of the Canadian based EnCana
Corporation.  The EnCore management found and developed the giant Buzzard field
in the North Sea.  EnCana (UK) was sold in December 2004 for US$2.1 billion.

EnCore has a portfolio of UK offshore hydrocarbon interests (the transfer of
some of which is subject to regulatory approval), which complement the Company's
existing assets.  These interests, which are primarily high percentage holdings,
contain six undeveloped discoveries.  EnCore also has a 25 per cent. interest in
two blocks awarded in the 23rd Licensing Round.  Apache and Samson, the
co-venturers on the licence, will fund the cost of drilling the highly
prospective 18/5-G prospect in the second half of 2006.

Further details of the EnCore Companies are set out in the separate announcement
and in the AIM admission document which is being published today.

Conclusion

We have successfully laid the foundations for a successful E&P company with a
balanced portfolio of prospective assets in a politically stable environment.

We believe the proposed acquisition of the EnCore companies will provide greater
critical mass and significantly accelerate the fulfilment of our stated
strategy.

Michael Thomsen
7 February 2006



PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2005

                                                       6 months to        6 months to      15 months to
                                                  31 December 2005  30 September 2004      30 June 2005
                                                         Unaudited          Unaudited           Audited
                                                                 £                  £                 £

Amounts written off intangible assets                            -                  -           (84,764)

Administrative expenses                                   (444,643)          (370,210)       (1,141,193)
                                                          
Operating loss                                            (444,643)          (370,210)       (1,225,957)

Gain on forfeiture of deposit                                    -                  -           770,568

Interest receivable and similar income                      54,746             16,957            65,393

Loss on sale of investments                                      -                  -        (1,788,717)

Loss on ordinary activities before taxation               (389,897)          (353,253)       (2,178,713)

Tax on loss on ordinary activities                               -                  -                 -

Loss for the financial year                               (389,897)          (353,253)       (2,178,713)

Basic loss per share                                        (0.01p)            (0.28p)           (7.14p)



STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES
FOR THE SIX MONTHS ENDED 31 DECEMBER 2005


                                                      6 months to        6 months to       15 months to
                                                 31 December 2005  30 September 2004       30 June 2005
                                                        Unaudited          Unaudited            Audited
                                                                £                  £                  £

Loss for the financial period                            (389,897)          (353,253)        (2,178,713)

Exchange differences on foreign currency net                    -            (52,939)                 -
investments

Total recognised gains and losses                        (389,897)          (406,192)        (2,178,713)




BALANCE SHEET
As at 31 December 2005

                                                    31 December 2005 30 September 2004     30 June 2005
                                                          Unaudited         Unaudited           Audited
                                                                  £                 £                 £
Fixed assets
Intangible assets                                         1,349,854          2,368,234          578,840
Tangible assets                                              17,961             68,060           17,242
Investments                                                 888,967            111,765          888,967
                                                          2,256,782          2,548,059        1,485,049
Current assets
Debtors                                                     109,647             78,337          377,953
Cash at bank and in hand                                  2,269,862          1,466,447        3,357,371
                                                          2,379,509          1,544,784        3,735,324
Creditors : amounts falling due within one year            (34,276)          (983,039)        (230,774)

Net current assets                                        2,345,233            561,745        3,504,550

Total assets less current liabilities                     4,602,015          3,109,804        4,989,599

Creditors: amounts falling due after more than                    -            (6,085)                -
one year
                                                          4,602,015          3,103,719        4,989,599

Capital and reserves
Called up share capital                                   2,216,755          1,462,350        2,216,755
Share premium account                                     6,715,750          4,172,602        6,713,437
Profit and loss account                                 (4,330,490)        (2,531,233)      (3,940,593)
Shareholders' funds                                       4,602,015          3,103,719        4,989,599





CASH FLOW STATEMENT
For the six months ended 31 December 2005

                                                        6 months to   6 months to 30     15 months to
                                                   31 December 2005   September 2004     30 June 2005
                                                          Unaudited        Unaudited          Audited
                                                                  £                £                £

Net cash outflow from operating activities                 (370,271)        (352,449)       (1,209,403)

Returns on investments and servicing of finance
Interest received                                             54,746           16,957            65,393

Capital expenditure and financial investment
Purchase of intangible fixed assets                        (771,014)        (390,168)         (347,985)
Purchase of tangible fixed assets                            (3,783)         (24,293)          (10,056)
Sale of tangible fixed assets                                    500                -                 -
Purchase of investments                                            -         (50,000)          (50,000)
Amounts loaned to group undertakings                               -                -         (198,894)

Net cash outflow from capital expenditure and              (774,297)        (464,461)         (606,935)
financial investment

Acquisitions and disposals
Expenses on disposal of subsidiary undertakings                    -                -          (62,700)

Movement in liquid resources
Funds removed from / (placed on) deposit                   1,353,475        (650,000)       (2,503,475)

Financing
Issue of shares and warrants                                       -        1,650,238         4,829,000
Expenses of share issues                                       2,313         (72,500)         (309,022)

Net cash inflow from financing                                 2,313        1,577,738         4,519,978

Increase in cash                                             265,966          127,785           202,858



Notes:

1.      This Interim Statement for the six months ended 31 December 2005 is
unaudited and was approved by the directors on 6 February 2006.  The financial
information set out above does not constitute statutory accounts within the
meaning of section 240 of the Companies Act 1985.  Statutory accounts relating
to the period ended 30 June 2005 have been filed with the Registrar of
Companies.  The auditors' report on those financial statements was unqualified.

2.      No dividends were paid or proposed in respect of the six months ended 31
December 2005.

3.      The accounting policies remain as stated in the Annual Report for the
period ended 30 June 2005.

4.      This Interim Statement is being incorporated within the AIM admission
document of the Company dated 7 February 2006 which is being sent by post to all
registered shareholders.  Additional copies of the admission document are
available from the offices of Westhouse Securities LLP at Clements House, 14-18
Gresham Street, London EC2V 7NN.




                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                          

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