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ViaLogy PLC (VIY)

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Monday 31 December, 2012

ViaLogy PLC

Half Yearly Report

RNS Number : 4416U
ViaLogy PLC
31 December 2012
 



 

                

 

ViaLogy PLC ("ViaLogy" or "the Company")

 

Interim Report and Unaudited accounts for six months ended 30 September 2012

 

Chairman's statement for the six months ended 30 September 2012

 

 

The Interim Report covers the six-month period to 30 September 2012. The figures show a

loss for the period of £2,839,110 which includes a non-cash loss of £1,611,829 for amortisation

and depreciation. The amortisation charges relate to the value of ViaLogy's Intellectual Property

and associated research and development which is amortised over a period of six years. The

cash outflow from operations during the period was £1,177,164.

 

The period under review has been one of the most significant in  ViaLogy's history. In the

annual report published in July 2012, we were able to announce that we had signed three

binding commercial contracts, the first with the Supermajor energy company Chevron, a second

Supermajor which prefers to remain anonymous, and a third with the Indian national oil and

natural gas company, ONGC. These are major steps in our strategy of making QuantumRD,

our breakthrough seismic analysis software platform, a standard industry tool. After considerable

'show me' demonstrations and blind analysis exercises to overcome scepticism towards what

is a new technology as far as the O&G industry is concerned, these three multi-national firms

separately agreed to place their faith and their exploration funds in ViaLogy's QuantumRD

technology.

 

Since these announcements, our team of geophysicists and mathematicians in Pasadena, CA,

led by our founder and technical director, Dr. Sandeep Gulati, has been working diligently to

fulfill the contract analysis delivery commitments. In conjunction with our clients' own expert

staff and advisers we have applied QuantumRD to seismic data on a variety of offshore and

onshore formations. Importantly, because our approach to seismic analysis is unique, we have

been involved in detailed technical exchanges to explain how our technology improves the

accuracy of prediction for porosity, fluid presence, and shale formations, all key hydrocarbon

indicators. Our aim has always been to embed QuantumRD into accepted industry practices

as a high leverage add-on to assist the overall drilling decision.

 

As our CEO, Dr. Robert W. Dean, made clear in his recently issued end-of-year overview, our

efforts with all three of our major clients are proceeding positively. By the end of ViaLogy's

fiscal year we will have delivered - as promised and on time - detailed QuantumRD results to all of them.

 

Specifically, our achievements during the period and to date are:

 

1.   Delivered to Chevron, QuantumRD seismic analysis demarcating potential hydrocarbon-bearing reservoirs in tight sandstone formations in the US Delaware Basin for orienting and positioning long-reach horizontals. Previous drilling by operators in the same field has yielded sub-optimal recovery as they have ended in highly water saturated zones.  These deliverables are under review by the client's reservoir development teams. A successful technical assessment, expected in the near-term, would lead to more commercial work.

 

2.   As part of the milestone delivery, ViaLogy was given the additional responsibility of reprocessing vintage seismic acquired in 1996 to meet QuantumRD's requirements for data quality. ViaLogy's ability to provide high resolution areal and vertical mapping of porosity, compartmentalization, and fluid saturation using legacy seismic is attractive for operators as it eliminates expense and complexity of acquiring new surveys for high-grading prospects.

 

3.   For the first time in commercial contracts, QuantumRD demonstrated the ability to map hydrocarbon distribution for formations below seismic resolution of two different formations. Given its implications, this work continues to be evaluated.

 

4.   Jointly with Chevron geophysicists, at the 2012 American Association of Petroleum Geologists energy industry conference in Singapore, gave a presentation indicating how QuantumRD was able to identify porosity trends in tight dolomite carbonate formations to increase primary recovery of oil over currently achieved yields on a Permian prospect. QuantumRD was presented as a credible alternative for moving beyond drilling to grid-patterns. 

 

5.   Implementing QuantumRD seismic analysis on a 100 sq km section in the Mumbai High Basin, India's largest offshore oilfield, to discover reservoirs missed by conventional seismic processing.

 

6.   Under contract to a Supermajor client QuantumRD is part of a major effort to discover and map sandstone reservoirs below several thousand feet of permafrost in the arctic.

 

7.   As announced, in one of our ongoing contracts the scope was increased to  discover oil in unconventional shale formations. This means that QuantumRD's reach now covers both conventional and unconventional formations, another of the company's strategic objectives.

 

8.   Initiated work on a North Sea project for one of the world's largest geosciences companies. This project challenges ViaLogy's QuantumRD technology to discover and delineate producible hydrocarbon bearing sand bodies that have not been found with sufficient precision by other seismic processing techniques.

 

9.   Launched exploratory sales initiatives with major Chinese, Brazilian and West African exploration and production firms.

 

Finance

 

Revenue in the period under review was £84,691 (2011: £40,915), an increase of some 107

per cent. However, as the three contracts dominating our activities during the period under

review are commercial arrangements charged in the conventional manner whereby invoices

are submitted when analysis is completed and presented to the client, income for work done

from May through to September is only partly reflected in the interim accounts. The majority

of the income will be included in the next set of accounts for the 12 months to 31 March

2013. At that time we expect to announce financial results consistent with our three year

business plan and in line with market expectations.

 

 

 

Terry Bond

Chairman

ViaLogy PLC

 

30 December 2012

Enquiries: 

 

ViaLogy PLC

 

01235 834734  

Terry Bond, Chairman   

 

 

 

 

 

Seymour Pierce Limited

 

020 7107 8000

Mark Percy/Catherine Leftley (Corporate Finance)

Katie Ratner (Corporate Broking)

 

 

 

 

 

Consolidated income statement for the six months ended 30 September 2012

 

 

 

Unaudited

Unaudited

Audited

 

 

6 months

6 months

Year to

 

 

to 30 Sep

to 30 Sep

to 31 Mar

 

Notes

2012

2011

2012

 

 

 

£

£

£

Revenue

2

84,691

40,915

51,256

Cost of  sales

 

273,115

209,393

437,298

 

 

--------

--------

--------

Gross loss

2

(188,424)

(168,478)

(386,042)

 

 

 

 

 

Share based payments

 

271,399

118,626

195,285

Depreciation and amortisation

 

1,611,829

1,544,535

3,184,910

Other administrative expenses

 

911,814

798,654

1,627,134

 

 

 

 

 

 

 

 

 

 

Total administrative expenses

 

2,795,042

2,461,815

5,007,329

 

 

--------

--------

--------

Loss from Operations

 

(2,983,466)

(2,630,293)

(5,393,371)

 

 

 

 

 

Finance income

 

180

139

342

 

 

--------

--------

--------

Loss for the period / year before  taxation

 

(2,983,286)

(2,630,154)

(5,393,029)

 

 

--------

--------

--------

 

 

 

 

 

Taxation

3

144,176

241,058

489,634

 

 

 

 

 

 

 

--------

--------

--------

Loss for the period / year attributable to equity

 

 

 

 

holders of the parent

2

(2,839,110)

(2,389,096)

(4,903,395)

 

 

--------

--------

--------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss per share

 

 

 

 

Basic  and diluted

4

(0.316)p

(0.330)p

(0.643)p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

Consolidated statement of comprehensive income for the six months ended 30 September 2012

 

 

 

Unaudited

Unaudited

Audited

 

 

6 months

6 months

year to

 

 

to 30 Sep

to 30 Sep

31 Mar

 

 

2012

2011

2012

 

 

£

£

£

Loss after taxation

 

(2,839,110)

(2,389,096)

(4,903,395)

 

Other comprehensive income

  Exchange differences on translating foreign operations

 

 

 

(10,759)

 

 

83,884

 

 

8,512

 

 

--------

--------

--------

Total other comprehensive (loss) / income for the period / year

 

(10,759)

83,884

8,512

 

 

--------

--------

--------

Total comprehensive loss for the period / year attributable to the equity holders of the parent company

 

(2,849,869)

(2,305,212)

(4,894,883)

 

 

--------

--------

--------



 

 

 

 

 

 

Consolidated statement of changes in equity for the six months ended 30 September 2012

 

Unaudited

Share

Share

Foreign

Retained

Total

 

capital

premium

exchange

deficit

 

 

 

 

reserve

 

 

 

 

 

 

 

 

 

At 1 April 2012

8,519,551

21,475,505

1,614,934

(28,218,122)

3,391,868

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive (loss) recognised for the period

-

-

(10,759)

(2,839,110)

(2,849,869)

Issue of shares

746,518

1,306,901

-

-

2,053,419

Share issue expenses

-

(50,450)

-

-

(50,450)

Share options expense

-

-

-

271,399

271,399

 

 

 

 

 

 

 

--------

--------

--------

--------

--------

Balance at 30 September 2012

9,266,069

22,731,956

1,604,175

(30,785,833)

2,816,367

 

--------

--------

--------

--------

--------

 

 

 

 

 

 

 

 

Audited

Share

Share

Foreign

Retained

Total

 

capital

premium

exchange

deficit

 

 

 

 

reserve

 

 

 

 

 

 

 

 

 

At 1 April 2011

7,341,027

21,438,079

1,606,422

(23,510,012)

6,875,516

 

 

 

 

 

 

 

 

 

 

 

 

Total comprehensive income / (loss) recognised for the year

-

-

8,512

(4,903,395)

(4,894,883)

Issue of shares

1,178,524

52,021

-

-

1,230,545

Share issue expenses

-

(14,595)

-

-

(14,595)

Share options expense

-

-

-

195,285

195,285

 

 

 

 

 

 

 

--------

--------

--------

--------

--------

Balance at 31 March 2012

8,519,551

21,475,505

1,614,934

(28,218,122)

3,391,868

 

--------

--------

--------

--------

--------

 



Consolidated statement of financial position at 30 September 2012

 

 

 

 

 

 

 

Unaudited

Unaudited

Audited

 

 

30 Sep

30 Sep

31 Mar

 

 

2012

2011

2012

 

Notes

£

£

£

Assets

 

 

 

 

 

 

 

 

 

Non-current assets

 

 

 

 

   Property, plant and equipment

 

374,268

442,537

393,619

   Intangible assets

 

1,390,785

4,180,010

2,775,501

 

 

 

 

 

 

 

--------

--------

--------

 

 

1,765,053

4,622,547

3,169,120

 

 

--------

--------

--------

Current assets

 

 

 

 

   Trade and other receivables

 

180,288

269,874

157,131

   Cash and cash equivalents

 

1,150,073

455,627

555,367

 

 

--------

--------

--------

 

 

1,330,361

725,501

712,498

 

 

--------

--------

--------

Total Assets

2

3,095,414

5,348,048

3,881,618

 

 

--------

--------

--------

Liabilities

 

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

   Trade and other payables

 

138,010

114,086

204,508

 

 

 

 

 

Non-current liabilities

 

 

 

 

   Deferred tax liability

3

141,037

541,987

285,242

 

 

--------

--------

--------

Total liabilities

2

279,047

656,073

489,750

 

 

 

 

 

Capital and reserves attributable to equity

 

 

 

 

holders of the Company

 

 

 

 

   Share capital

 

9,266,069

7,342,051

8,519,551

   Share premium

 

22,731,956

21,440,100

21,475,505

   Foreign exchange  reserve

 

1,604,175

1,690,306

1,614,934

   Retained deficit

 

(30,785,833)

(25,780,482)

(28,218,122)

 

 

--------

--------

--------

Shareholders' funds

 

2,816,367

4,691,975

3,391,868

 

 

--------

--------

--------

Total equity and liabilities

 

3,095,414

5,348,048

3,881,618

 

 

--------

--------

--------

 



Consolidated statement of cash flows            for six months ended 30 September 2012

 

 

 

Unaudited

Unaudited

Audited

 

 

30 Sep

30 Sep

31 Mar

 

 

2012

2011

2012

 

 

£

£

£

Cash flows from operating activities

 

 

 

 

  Loss  from operations before tax

 

(2,983,286)

(2,630,293)

(5,393,029)

 

 

 

 

 

  Adjustments for :-

 

 

 

 

          Finance income

 

(180)

(139)

(342)

          Depreciation

 

36,640

44,636

96,025

          Amortisation

 

1,575,189

1,499,899

3,088,885

          Share option expense

 

271,399

118,626

195,285

          Foreign exchange movements

 

12,729

3,717

23,975

          Director's fees prepaid

 

82,968

-

110,624

 

 

--------

--------

--------

Cashflows used in operating activities before changes in working capital

 

(1,004,541)

(963,554)

(1,878,577)

 

 

 

 

 

  (Increase) / decrease  in trade and other  receivables

 

(106,125)

(1,773)

347

 (Decrease) / increase in trade and other payables

 

(66,498)

(65,957)

24,465

 

 

 

 

 

 

 

--------

--------

--------

Net cash flows from operating activities

 

(1,177,164)

(1,031,284)

(1,853,765)

 

 

 

 

 

Investing activities

 

 

 

 

 

 

 

 

 

   Internally generated  intangible asset

 

(191,671)

(115,787)

(371,456)

   Purchase of property, plant and equipment

 

(21,284)

(15,254)

(25,586)

  Interest received

 

180

139

342

 

 

--------

--------

--------

 

 

(212,775)

(130,902)

(396,700)

Cash flows from financing activities

 

 

 

 

  

 

 

 

 

    Cash inflow from issue of new shares

 

2,045,000

-

1,230,545

    Share issue costs

 

(50,450)

-

(14,595)

    Cash inflow from exercise of options          

 

8,419

3,045

-

 

 

--------

--------

--------

 

 

2,002,969

3,045

1,215,950

 

 

 

 

 

Increase/(Decrease) in cash and cash equivalents

 

613,030

(1,159,141)

(1,034,515)

 

 

 

 

 

  Foreign exchange differences on translation of cash and cash equivalents.

 

(18,324)

(9,362)

(34,248)

  Cash and cash equivalents at beginning of  period /year

 

555,367

1,624,130

1,624,130

 

 

--------

--------

--------

 

 

 

 

 

Cash and cash equivalents at end of period / year

 

1,150,073

455,627

555,367

 

 

--------

--------

--------

 



Notes forming part of the unaudited consolidated accounts for the six months ended 30 September 2012

 

1     Accounting policies

Basis of preparation

The interim financial information has been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board ("IASB") as adopted for use in the EU. The interim financial information has been prepared using the accounting policies which will be applied in the Group's statutory financial information for the year ended 31 March 2013.

 

The interim financial information for the period 1 April 2012 to 30 September 2012 is unaudited.  In the opinion of the Directors the interim financial information for the period presents fairly the financial position, results from operations and cash flows for the period in conformity with the generally accepted accounting principles consistently applied.  The interim financial information incorporates comparative figures for the interim period 1 April 2011 to 30 September 2011 and the audited financial year to 31 March 2012.The financial information contained in this interim report does not constitute statutory accounts as defined by section 435 of the Companies Act 2006. The comparatives for the full year ended 31 March 2012 are not the Company's full statutory accounts for that year.  A copy of the statutory accounts for that year has been delivered to the Registrar of Companies.  The auditor's report on those accounts was unqualified, but did include references to any matters to which the auditor drew attention by way of emphasis in respect of going concern, without qualifying their report and did not contain a statement under section 498(2)-(3) of the Companies Act 2006.

 

Going concern

 

Following the signing of three significant contracts with international companies since the year end the directors are confident that the Group's pipeline of sales from current clients and potential new customers will help to fund the Group's development and working capital requirements. However additional funding will be required in order to support the Group until we begin to see the benefits from this pipeline of contracts. There can be no certainty that additional funding will be available given the current economic climate and the risks associated with the oil and gas industry. While the directors are confident that additional funding can be raised in order to meet its development and working capital requirements, and ViaLogy's capital development history demonstrates that this confidence is well founded, a significant uncertainty exists given the absence of any committed funding at the date of approval of these financial statements. This condition indicates the existence of a material uncertainty which may cast doubt on the Group's ability to continue as a going concern.

 

The financial information does not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

 

 

 

2     Segmental analysis

The Group has two reportable segments:

·    Head office - this segment is the head office of the Group.

·    Operations - this segment is involved in sales and technology development in the USA.

The operating results of these segments are regularly reviewed by the Group's chief operating decision maker in order to make decisions about the allocation of resources and assess their performance.

30 September 2012 Reportable segment analysis - unaudited

 

 

 

 

 

 

 

Operations

Head Office

Consolidated

 

 

£

£

£

Revenue from external customers

 

84,691

-

84,691

 

 

--------

--------

--------

Gross loss

 

(188,424)

-

(188,424)

Finance income

 

-

180

180

Tax credit

 

144,176

-

144,176

 

 

--------

--------

--------

Loss for the year after taxation

 

(2,499,582)

(339,528)

(2,839,110)

Segment assets

 

1,918,134

1,177,280

3,095,414

Segment liabilities

 

234,466

44,581

279,047

 

 

--------

--------

--------

Costs to acquire plant, property and equipment

 

21,284

-

21,284

Costs to acquire intangible assets

 

191,671

-

191,671

Depreciation and amortisation

 

1,608,860

2,969

1,611,829

Share based payments

 

232,835

38,564

271,399

 

 

--------

--------

--------

 

 

 

 

 

Year ended 31 March 2012 Reportable segment analysis - audited

 

 

 

 

 

 

 

Operations

Head Office

Consolidated

 

 

£

£

£

Revenue from external customers

 

51,256

-

51,256

 

 

--------

--------

--------

Gross loss

 

(386,042)

-

(386,042)

Finance income

 

-

342

342

Tax credit

 

489,634

-

489,634

 

 

--------

--------

--------

Loss for the year after taxation

 

(4,253,514)

(649,881)

(4,903,395)

 

 

 

 

 

Segment assets

 

3,344,675

536,943

3,881,618

Segment liabilities

 

416,801

72,949

489,750

 

 

--------

--------

--------

Costs to acquire plant, property and equipment

 

20,620

4,966

25,586

Costs to acquire intangible assets

 

371,456

-

371,456

Depreciation and amortisation

 

3,180,407

4,503

3,184,910

Share based payments charged

 

116,489

78,796

195,285

 

 

--------

--------

--------

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

All material non-current assets are owned by the USA subsidiary and are located in the USA.

 

 

 

 

 

 

 

3     Deferred Tax

 

 

 

 

 

Unaudited

Unaudited

 

 

 

Period to

Period to

 

 

 

30 September

30 September

 

 

 

2012

2011

 

 

 

£

£

 

 

 

 

 

At 1 April

 

 

285,242

772,077

 

 

 

 

 

Credit to the income statement for the six months to 30 September

 

 

(144,176)

(241,058)

Foreign exchange translation

 

 

(29)

10,968

 

 

 

--------

--------

At 30 September

 

 

141,037

541,987

 

 

 

--------

--------

 

 

 

 

 

Audited

 

 

 

 

Year ended

 

 

 

 

31 March 2012

 

 

 

 

£

 

 

 

 

 

 

At 1 April

 

 

772,077

 

 

 

 

 

 

Credit to the income statement for the year

 

 

(489,634)

 

Foreign exchange translation

 

 

2,799

 

 

 

 

--------

 

At 31 March

 

 

285,242

 

 

 

 

--------

 

 

Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 35%.

 

4     Loss per share

Basic

 

The calculation of loss per share is based on the loss for the period of £2,839,110 (2011 - loss £2,389,096 full year loss £4,903,395) and on 899,549,947, (2011 - 734,191,944, 2012 full year -  762,556,327) ordinary shares, being the weighted average number of ordinary shares in issue during the period.

 

Diluted

 

Diluted loss per share dilutes the basic loss per share to take into account share options and warrants.  The calculation includes the weighted average number of ordinary shares that would have been issued on the conversion of all the dilutive share options and warrants into ordinary shares.  106,020,272 options and 1,193,654 warrants (2011 - 97,572,756 options and 1,193,654 warrants, 2012 full year 96,162,368 options and 1,193,654 warrants) have been excluded from this calculation as this would reduce the loss per share.

 

 

 

 

   

5     Share capital -unaudited

    

 

Allotted, called up and fully paid

 

2012

2011

2012

2011

 

Number

Number

£

£

Ordinary Shares of 1p each

 

 

 

 

 

 

 

 

 

At 1 April 

851,955,130

734,102,725

8,519,551

7,341,027

Shares issued

74,363,637

-

743,637

-

Employee share options exercised

288,144

102,405

2,881

1,024

 

 

--------

--------

--------

--------

At 30 September

929,606,911

734,205,130

9,266,069

7,342,051

 

 

 

 

__________

__________

__________

__________

 

Year Ended 31 March 2012 Share capital - audited

 

 

 

 

 

 

 

 

Allotted, called up and fully paid

 

 

2012

2011

2012

2011

 

 

Number

Number

£

£

 

Ordinary shares of 1p each

 

 

 

 

 

 

 

 

 

 

 

At 1 April

734,102,725

690,475,334

7,341,027

6,904,753

 

Shares issued

117,852,405

43,627,391

1,178,524

436,274

 

 

 

 

 

 

 

 

--------

--------

--------

--------

 

At 31 March

851,955,130

734,102,725

8,519,551

7,341,027

 

 

__________

__________

__________

__________

6   Post Reporting date events

There are no post reporting date events.


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