RNS Number:1437J
Venture Production PLC
25 March 2003
25th March 2003
Venture Production plc
("Venture", "the Company" or "the Group")
Preliminary Results for the Year Ended 31 December 2002
Financial Highlights
* Average annual production increased to 8,681 barrels of oil equivalent per
day ("boepd") (2001: 4,868 boepd); currently 21,000 boepd
* Turnover #52.7 million (2001: #25.2 million)
* Operating profit #14.3 million (2001: #4.0 million)
- underlying operating profit up 131% after non-recurring dry hole charges
in 2001
* Profit before tax #12.7 million (2001: #1.8 million)
- an increase of 182% after non-recurring dry hole charges in 2001
* Profit on ordinary activities after tax #7.2 million (2001: #0.9
million)
* Operating cashflow #35.1 million (2001: #5.0 million)
* Capital expenditure, including acquisitions, #63.6 million (2001:
#44.5 million)
* Listing on the London Stock Exchange in March 2002 raising #32.5
million (#29.5 million net)
Activity Highlights
* 'Trees', Venture's gateway asset in the North Sea, yielded significant
results:
- Larch field : continued to produce above expectations averaging 8,100
barrels of oil per day ("bopd") gross
- Sycamore field : successful fast track development
* Three new North Sea acquisitions completed adding 7.1 MMboe of proven and
probable ("2P") reserves
* Interests in a total of 19 oil and gas fields (12 as operator) in the North
Sea and Trinidad
* Total year end 2P reserves increased to 49.7 MMboe (2001: 39.0 MMboe)
* Ann and Alison fields gas sales contracts successfully renegotiated
resulting in more predictable volumes allowing additional investment
* Trinidad offshore drilling campaign completed; further development options
under review
Post Year End Developments
* Sycamore field on stream 6th March 2003 at a rate of 27,000 bopd gross,
materially above expectations. 59% of 2003 Sycamore forecast production
hedged at favourable prices.
* Acquisition of additional 50.0% and operatorship of the Chestnut field in
March 2003 taking interest to 69.9% and adding 8.1 MMboe of 2P reserves.
* Refinancing and expansion of bank facilities from $100 to $175 million in
March 2003
Commenting on the results, Bruce Dingwall, Chief Executive of Venture said:
"2002 represented another exceptional year for Venture as demonstrated by our
record financial results. The growth in production, turnover, profitability and
cashflow resulted from the step change in the scale of Venture's business and
favourable commodity prices. Operationally, our asset development programme,
which focused principally on the Sycamore field during 2002, has already led to
another material increase in production with net current production levels of
approximately 21,000 boepd. The Company has a significant investment plan to
develop its existing asset base, the vast majority of which is operated by
Venture and which is expected to fuel continued growth for 2003 and beyond. In
addition, the combination of strong operating cashflow and the increased
financial flexibility offered by our expanded banking facilities leaves Venture
positioned to make material acquisitions."
Enquiries:
VENTURE PRODUCTION plc 01224 619 000
Bruce Dingwall, Chief Executive
Mike Wagstaff, Finance Director
BRUNSWICK GROUP 020 7404 5959
Patrick Handley
Tricia Parish
Eilis Murphy
Chairman's and Chief Executive's Statement
During 2002 the Company continued its rapid growth with average production
rising from 4,868 boepd in 2001 to 8,681 boepd. This increase in production
combined with favourable oil prices led to record financial performance in 2002.
During the year, Venture completed three new acquisitions in the North Sea and
in March gained a full listing on the London Stock Exchange, raising #32.5
million (#29.5 million net) in new equity. In addition, the Company's 2002
programme for development of its existing asset base is generating continued
growth in 2003 and beyond.
Strategy
Venture's strategy remains focused on the acquisition and exploitation of proven
reserves and the development of discovered but undeveloped reserves,
collectively known as 'stranded' reserves. Venture's business model is based on
adding value to these 'stranded' reserves through the application of modern
technology and operating practices together with a change in management
philosophy. In order to add value, Venture normally seeks to take large working
interest positions and act as operator.
Venture believes its business model ideally positions it to capitalise on change
in the oil and gas industry in mature provinces such as the North Sea. The
Company has established a track record of realising the 'stranded' reserve
potential on assets in its two geographical areas of focus, the North Sea and
Trinidad. This has been achieved through a series of field rejuvenation
programmes leading to increased production, longer field life and increased
reserves.
Financial Results
In 2002 turnover increased to #52.7 million (up 109% from 2001), operating
profit increased to #14.3 million (up 258% from 2001) and profit on ordinary
activities after taxation increased to #7.2 million (up 700%). Cashflow from
operations increased to #35.1 million (up 602% from 2001).
In 2002 Venture commenced the refinancing of its banking facilities which are
being expanded from $100 million to $175 million. This refinancing is expected
to be completed in March 2003.
Operations
Venture's net average production increased by 78% over that of 2001 to 8,681
boepd. Strong performance from Larch and Mallard continued throughout the year.
Production from our 'A' Fields area was below potential during the first half of
the year due to constraints in the gas sales contracts inherited with the
acquisition in 2001. These contracts were renegotiated in October and the
fields returned to significantly higher production rates for the 2002/2003
winter. This contract renegotiation has enabled Venture to manage these fields
more effectively, reduce uncertainty in forecasting production volumes and make
further investment plans.
In May 2002 Venture gained DTI approval for the development of the Sycamore
Field on Block 16/12a. The Sycamore Field, which was identified as a result of
a major geological study carried out by Venture, has been developed on a fast
track utilising the existing 'Trees' fields sub-sea infrastructure. As part of
the development the Company drilled and completed the two production wells.
During the second half of the year fabrication of the sub-sea pipeline bundle
and manifold took place in Wick and Montrose and was completed on schedule in
December. Tow-out of the pipeline bundle and manifolds was successfully carried
out in early January, the first time such an operation has been performed in the
North Sea in Winter. In the first quarter of 2003 these wells were successfully
tied back and the field brought on stream in early March, one month ahead of
schedule.
In Trinidad, activity was focused on the offshore drilling campaign in the
Brighton Marine and Point Ligoure fields, where a total of 10 new wells were
drilled to develop the Brighton Marine field and satisfy Venture's minimum work
obligations in appraising the Point Ligoure field. The results of these wells
indicate that there is further development potential in the northern part of the
Point Ligoure block and the southern part of the Brighton Marine field, both of
which are currently being evaluated.
In 2002 the Company's total proven and probable oil and gas reserves increased
to 49.7 MMboe from 39.0 MMboe with oil representing 68% of this total. By
geography, Venture's reserves are split 90% in the UK and 10% in Trinidad. Of
Venture's 2002 production, oil contributed 78% with the remainder from gas.
Employees and Contractors
The contribution of our employees and contractors to Venture's growth and
success over the past year cannot be underestimated. Venture's growth has been
achieved through reaching for and attaining the highest standards of operational
performance as well as health, safety and respect for our environment. The
Board would like to take this opportunity to thank all staff and contractors for
the significant contribution made to the Company during the year.
Outlook
Venture's strategy has enabled the Company to average a doubling of its
production every year since being founded in 1997. This trend continues as a
result of the successful development of Sycamore. In 2003 Venture's net
production has risen from an average of 9,000 boepd at the beginning of the year
to around 21,000 boepd currently.
Venture's existing asset base provides increasing opportunities for the Company
to continue its rapid growth. Critically, around 90% of our planned investment
is in assets operated by Venture and thus we are able to control the pace and
timing of this expenditure and increase the certainty of delivery.
Capital expenditure is forecast to be #85 million in 2003, including the
Chestnut acquisition; drilling and development costs, primarily associated with
the ongoing Sycamore development and our 'A' Fields drilling campaign. This
investment in our current asset base is expected to result in further
significant production increases in 2004 and beyond.
The Board of Venture believes the Company is optimally placed to take advantage
of the further opportunities created by changing industry conditions to secure
additional assets that can continue to deliver exceptional growth for its
shareholders. As a result of strong operating cashflow and the increased
financial flexibility offered by expanded banking facilities, Venture is
positioned to make material acquisitions.
25th March 2003
John Morgan Bruce Dingwall
Chairman Chief Executive
Review of Operations
During 2002 Venture's average net annual production grew to 8,681 boepd from an
average of 4,868 boepd in 2001, a rise of 78%. Full year contributions from
Larch and from the assets acquired in 2001 were the primary drivers of this
increase in production.
UK North Sea - Oil
'Trees'
Following the successful revitalisation of the field during 2001, Larch (Venture
operated : Venture net interest 56.9%) continued to produce throughout 2002 at
an average gross production rate of 8,138 bopd, materially higher than forecast.
Notwithstanding this, natural decline in production rates is expected to
continue through 2003. The Birch field (Venture operated : 46.8%) remained
shut-in during 2002 and operational work to restore the field to production is
the subject of ongoing review.
The Sycamore Field Development Plan (Venture operated : 64.5%) was approved by
partners and the DTI in May 2002. The key achievements during 2002 were the
completion as production wells of two previously drilled wells and the
significant progress made on the construction of the pipeline bundle which will
transport the produced fluids via the existing Birch facilities to the Brae
platform. The field came on production during March 2003 at an initial average
gross production rate of approximately 27,000 bopd. During 2003 a further
production well will be drilled in the north of the field and it is planned to
drill a further two water injection wells towards the end of the year.
Other Assets
Mallard (Shell operated : 23.8%) continued to perform better than expected with
average gross production rates of 4,600 bopd during 2002. Acquisition of
Mallard was completed in March and, as part of the acquisition, Venture
inherited a produced but unsold oil inventory of 460 thousand barrels of oil ("
Mbo"). This inventory was sold during the course of the year. A tanker lifting
of 78,000 bbls of Mallard crude oil that was deferred from December 2002 was
completed successfully and sold in February 2003.
The Chestnut field (Amerada Hess operated : 19.9%), underwent a successful
extended well test in 2001 which confirmed reserves volumes for the field.
During the year work has focused on evaluating the options for a development of
the field. Venture purchased an additional 14.9% working interest during 2002,
taking the Company's interest from 5.0% to 19.9%. In March 2003, Venture
entered into an agreement to acquire Amerada Hess' 50.0% stake in the field and
also to assume operatorship, subject to regulatory and partner approval.
Venture's total interest will therefore increase to 69.9% and Chestnut will
become another Venture operated asset.
Acquisition of the Pilot field (Venture operated : 47.5%) was completed in
January 2003. Since assuming operatorship, Venture has undertaken studies to
support a development plan for the field.
UK North Sea - Gas
Since completing the acquisition of a significant position in the southern North
Sea, Venture has made significant progress in creating a material North Sea gas
business. The Company's concerted commercial and technical efforts have
resulted in the definition of an extensive drilling programme that is planned to
commence in the second quarter of 2003.
In the first half of the year Ann and Alison (Venture operated : 85.0%) produced
below their potential due to the weak UK gas market in 2002 and constraints
imposed by the gas sales contracts that were inherited with the acquisition of
the assets in 2001. In October, Venture reached agreement with the buying group
to restructure these gas sales arrangements and under the amended arrangements,
the Ann/Alison partners will deliver a fixed volume of gas over the period
October 2002 to May 2003 at prices related to the spot market. As a result of
this renegotiation the fields returned to significantly higher production rates
during the 2002/2003 winter. Beyond May 2003 Venture will have the commercial
freedom to sell its Ann/Alison gas in the open market. As well as being able to
sell more gas, this contract renegotiation has enabled Venture to manage these
fields more effectively, to reduce uncertainty in production volumes and to make
further investment plans.
During 2002 Venture has made significant progress in quantifying additional
potential in its southern North Sea gas fields. Several infill well locations
have been identified and the surrounding acreage has been evaluated for
potential additional reserves. As part of the 2003 campaign, two wells will be
drilled to the west of the Alison field on prospects known as Annie and Agatha
(Venture operated : 85.0%).
On Audrey (ConocoPhillips operated : 29.9%) a major sub-surface review during
2002 identified a number of rejuvenation opportunities and these are planned to
be pursued during 2003.
On Annabel (Agip operated : 77.8%) an Earn In Agreement with Agip was executed
during 2002. This will allow Venture to drill and operate an appraisal well on
the Annabel structure in return for an additional 11.1% equity interest and
operatorship of the block. This well is scheduled to be drilled in 2003. The
proven gas accumulations on the adjacent block (48/10b) are deemed to extend
into Venture's Block 48/10a and this is currently the subject of unitisation
negotiations and development planning between the Company and the 48/10b
partners. This is expected to lead to development of these assets, collectively
known as Saturn, and it is anticipated that they will come on stream within the
2004/5 time frame.
Trinidad
During 2002, in Brighton Marine (Venture operated : 55.0%) Venture drilled three
offshore development wells. Two of these wells came in ahead of expectations
with initial production rates of 200 and 350 bopd respectively. Mechanical
problems with the third well led to it being suspended. The results from the
second development well has since led to the reassessment of reserves in the
southern part of the field and this could lead to a potential new development in
this portion of the field.
Gross production in Brighton Marine averaged 916 boepd for 2002. Negotiations
were completed with Petrotrin, Venture's joint venture partner, to convert its
45% equity interest into an Over Riding Royalty ("ORR"). It is expected that
this conversion will be completed during the first quarter of 2003 and it will
be based on an effective date of 30 June, 2002. This will lead to a significant
increase of production and reserves post completion.
Drilling operations in Point Ligoure (Venture operated : 50.0%) were continued
in 2002 with a total of seven new wells being drilled and oil being
successfully tested in six of them. The wells have since been suspended pending
an evaluation of the results. One well had to be abandoned due to mechanical
problems. Initial indications are that there is a potential development project
in the north of the block and studies are underway to evaluate this development.
Gross production in Point Ligoure was 297 bopd in 2002.
Venture's onshore assets in Trinidad, comprising Tabaquite, WD-13 and WD-14 (all
Venture operated : 100.0%) continued to produce as expected with average total
production of 305 bopd in 2002.
As a result of our success and growth in Venture's UK business, Trinidad now
represents a significantly smaller part of the Company's asset base and
production than it did initially. 2002 saw the substantial completion of our
commitment drilling obligations there and we are now evaluating the investment
opportunities on the existing assets. It is now important for Venture to pursue
growth opportunities within Trinidad, in order for this area to achieve critical
mass and remain a strategic component of the Company's total business.
Oil and Gas Reserves
The movements in Venture's proven and probable reserves are summarised below:
Total Group UK Trinidad
Total Oil Gas Oil Gas Oil Gas
Mboe Mbbls MMcf Mbbls MMcf Mbbls MMcf
__________________________________________________________________________________________________________________
__________________________________________________________________________________________________________________
Total
Proven and Probable
At 1 January 2002 (1) 38,978 29,291 58,118 25,815 58,118 3,476 -
Movements :
Revised estimates 6,888 1,068 34,932 (663) 34,932 1,731 -
Acquisitions 7,135 6,241 5,361 6,241 5,361 - -
Production (3,304) (2,594) (4,267) (2,244) (4,267) (350) -
_________________________________________________________________________________________________________________
10,719 4,715 36,026 3,334 36,026 1,381 -
At 31 December 2002 49,697 34,006 94,144 29,149 94,144 4,857 -
(1) This table includes the interests in the Mallard and Pilot Fields which
completed in early 2002.
(2) This table excludes the acquisition of an additional 50.0% interest in the
Chestnut field (8.1 MMboe) from Amerada Hess in 2003.
(3) This table excludes additional 1.5 MMboe of additional reserves
arising from the Brighton Marine conversion into an ORR.
(4) The production volumes shown include 135,000 barrels of oil
produced from Mallard prior to completion of the acquisition in March 2002.
Health, Safety and Environmental
Venture recognises that sustained high quality performance in the areas of
Health, Safety and Environmental ("HSE") performance is essential in
maintaining the Company's 'licence to operate'. The Company's performance in
2002 was good and HSE will remain a high priority focus for management, staff
and contractors.
Financial Review
Key Statistics 2002 2001 Increase
Production (boepd) 8,681 4,868 78%
Average Price per boe ($) 23.55 20.53 15%
Turnover (# million) 52.7 25.2 109%
Gross Profit (# million) 18.3 6.9 165%
Operating Profit (# million) 14.3 4.0 258%
Profit after Tax (# million) 7.2 0.9 700%
Operating Cashflow (# million) 35.1 5.0 602%
(Calculated on the basis of rounded numbers)
Turnover increased during the year from #25.2 million to #52.7 million,
reflecting the increase in production volumes to 3.3 MMboe (2001: 1.8 MMboe)
resulting from the full year impact of the acquisitions made in 2001, Larch
rehabilitation which came on stream in May 2001 and favourable commodity prices.
In addition, revenue was positively impacted by the completion of the Mallard
acquisition in March 2002 as part of which Venture acquired unsold oil stock of
approximately 460 Mboe. This was subsequently sold during the second and third
quarters.
Gross profit increased by 165% to #18.3 million. The 2001 cost of sales figure
includes the Brighton Marine dry hole costs of #2.2 million. Adjusting for the
write-off costs in the prior year, the underlying gross profit increased by
101%.
Administration costs increased by 37% to #4.0 million reflecting a full year of
support costs for acquisitions completed during 2001 and continued increase in
staff numbers to manage substantially higher activity levels. Operating profit
increased by 258% to #14.3 million, with an underlying increase, excluding the
2001 dry hole costs, of 131%.
Interest payable and similar charges decreased to #1.7 million (2001: #2.3
million) mainly reflecting the $100 million loan facility arrangement costs of
#0.5 million incurred in 2001 and a reduction in interest charges of #0.2
million due to the lower average debt levels during the year. These reductions
were partially offset by the non-cash increase of #0.3 million in the finance
charges associated with unwinding the decommissioning provision as a result of
the full year impact of UK acquisitions made during 2001.
As a result of the factors discussed above profit before tax increased by #10.9
million to #12.7 million (2001: #1.8 million).
The tax charge for the year is #5.5 million (2001: #0.8 million) which
represents a current tax charge of #0.4 million (2001: #2.1 million) and a
deferred tax charge of #5.1 million (2001: #1.3 million credit). While the
Group has benefited from the introduction of 100% first year allowances in terms
of UK Corporation tax liability in its cashflows, an additional provision of
#1.5 million has been required to reflect the 10% supplementary tax rate for UK
oil and gas activity imposed during the 2002 budget.
Profit after tax for the year increased to #7.2 million (2001: #0.9 million)
which reflects the full year impact from production from the UK Larch Field, the
acquisition of interests in the A-Fields in 2001 and the completion of the
acquisition of the Mallard Field in March 2002.
Basic earnings per share increased by over three times to 6.8p (2001: 2.1p) and
fully diluted earnings per share increased by over six times to 6.1p (2001:
0.9p). This was achieved despite the dilution effect of the issue of new share
capital at flotation. The weighted average number of ordinary shares increased
by 150% to 102,286,706 (2001: 40,845,409) while the weighted average number of
shares for fully diluted earnings increased by 19% to 113,689,702 (2001:
95,196,059). The impact of these increases for both basic and fully diluted
earnings per share was more than offset by an increase of 704% in profits
attributable to ordinary shareholders to #7.0 million (2001: #0.9 million).
Cashflow from operating activities increased by #30.0 million to #35.1 million.
Operating profit adjusted for depreciation accounted for #17.9 million of the
increase while the balance reflects working capital movements mainly associated
with the Sycamore investment programme which peaked in December 2002.
During the year the Company invested #14.2 million for the acquisition of oil
and gas interests in Mallard and Pilot and additional interests in Chestnut and
Sycamore. A further #48.9 million was invested in developing existing assets,
principally Sycamore (#29.2 million) and Trinidad (#15.8 million) and #0.5
million spent on office support equipment and accommodation. This investment
was financed through a combination of cashflow from operations, the net proceeds
of new equity issued in association with the listing on the London Stock
Exchange, an increase in net debt and a reduction in working capital, consistent
with Venture's strategy of maintaining a strong balance sheet. In late 2002,
Venture commenced the refinancing of its bank credit facilities with a group of
banks led by its existing bankers. This refinancing will result in Venture's
credit facilities being expanded from $100 million to $175 million and is
expected to be completed in March 2003.
The Group had net current liabilities at the balance sheet date of #2.1 million
(2001: net current assets #7.9 million) reflecting the increased trade creditors
and accruals associated with the Sycamore investment programme which peaked in
December 2002. In the first quarter of 2003, these liabilities were met from the
Group's borrowing facilities, the undrawn balance of which totalled #20.1
million at the balance sheet date.
On 11 March 2002 the Company changed its name to Venture Production plc and
re-registered as a public limited company. Thereafter, on 19 March 2002 the
Company placed 19,176,470 new ordinary shares and 4,352,941 existing ordinary
shares, at 170p per share, and the entire issued and to be issued share capital
of the Company was admitted to the Official List and to trading on the London
Stock Exchange's market for listed securities. As a consequence of admission to
the Official List of the London Stock Exchange, under the terms of the Warrant
Instrument, all outstanding warrants either have been exercised or have lapsed.
Subsequent to the Company's admission, the preference shares were redeemed at
the price of #2 per share. The net finance raised as a consequence was #29.5
million.
Hedging
To manage commodity price risk, Venture's policy is to hedge the oil price
exposure up to 75% of its oil production in the UK and Trinidad. To provide
downside oil price risk protection, in March 2002 Venture hedged approximately
75% of its estimated production from its existing assets through the purchase of
put options for the period April to December 2002 at a price (based on Brent) of
$18.50 per barrel. One third of these options were purchased for cash with the
remainder financed through the sale of corresponding call options at higher
prices (known as cashless collars). Venture put in place hedging for a lower
proportion of its anticipated oil production (excluding Sycamore) for the period
January to September 2003.
In addition, in early 2003 Venture hedged a substantial proportion of its
forecast Sycamore production volumes by purchasing additional put options based
on a Brent oil price of $18.50 per barrel and in March 2003 Venture entered into
a swap for 5,000 bopd for the period April 2003 to March 2004 at a price of
$29.00 per barrel. The quarterly volume and option prices are summarised below:
Period Put Options Call Options Sold Swaps
Purchased
Volume Price Volume Price Volume Price
(bbl) ($/bbl) (bbl) ($/bbl) (bbl) ($/bbl)
_________________________________________________________________________________________________________________
2002
April - June 495,000 18.50 330,000 28.65
July - September 450,000 18.50 300,000 28.45
October - December 495,000 18.50 330,000 27.45
2003
January - March 450,000 18.50 300,000 26.45
April - June 270,000 18.50 270,000 25.70 450,000 29.00
July - September 715,000 18.50 255,000 26.21 450,000 29.00
October - December 364,000 18.50 - - 450,000 29.00
2004
January - March 450,000 29.00
Group Profit and Loss account
for the year ended 31 December 2002
Unaudited
2002 2001
# #
________________________________________________________________________________________________________________
Turnover 52,671,164 25,242,056
Cost of sales (34,345,116) (18,375,375)
________________________________________________________________________________________________________________
Gross profit 18,326,048 6,866,681
Administrative expenses (4,034,615) (2,935,822)
Other operating income 39,092 21,535
________________________________________________________________________________________________________________
Operating profit 14,330,525 3,952,394
Interest receivable and similar income 130,075 140,535
Interest payable and similar charges (1,736,139) (2,324,312)
________________________________________________________________________________________________________________
Profit on ordinary activities before taxation 12,724,461 1,768,617
Tax on profit on ordinary activities (5,548,549) (828,167)
________________________________________________________________________________________________________________
Profit on ordinary activities after taxation 7,175,912 940,450
Finance cost of non-equity shares (192,184) (72,136)
________________________________________________________________________________________________________________
Attributable to equity shareholders 6,983,728 868,314
________________________________________________________________________________________________________________
Earnings per Ordinary Share
Basic Earnings per Share 6.8p 2.1p
________________________________________________________________________________________________________________
Diluted Earnings per Share 6.1p 0.9p
________________________________________________________________________________________________________________
Statement of Group Recognised Gains and Losses
2002 2001
# #
________________________________________________________________________________________________________________
Profit on ordinary activities after taxation 7,175,912 940,450
Prior year adjustment - 755,000
________________________________________________________________________________________________________________
Total gains recognised since last annual report 7,175,912 1,695,450
Group Balance Sheet as at 31 December 2002
Unaudited
2002 2001
# # # #
________________________________________________________________________________________________________________
Fixed assets
Tangible assets 127,527,164 76,235,946
Investments 318,388 421,750
________________________________________________________________________________________________________________
127,845,552 76,657,696
Current assets
Stocks 776,293 2,516,403
Debtors 12,615,940 11,411,635
Cash at bank and in hand 2,774,614 5,424,700
________________________________________________________________________________________________________________
16,166,847 19,352,738
Creditors - amounts
falling due within one year (18,313,979) (11,462,784)
________________________________________________________________________________________________________________
Net current
assets/(liabilities) (2,147,132) 7,889,954
________________________________________________________________________________________________________________
Total assets less current
liabilities 125,698,420 84,547,650
Creditors - amounts falling
due after more than one
year (26,258,614) (26,755,559)
Provisions for liabilities
and charges (16,402,908) (11,573,230)
________________________________________________________________________________________________________________
Net Assets 83,036,898 46,218,861
________________________________________________________________________________________________________________
Capital and reserves
Called up share capital 431,071 333,228
Share premium 77,227,909 47,208,627
Profit and loss account 5,377,918 (1,322,994)
________________________________________________________________________________________________________________
Total shareholders' funds
(including non equity
interests) 83,036,898 46,218,861
________________________________________________________________________________________________________________
Group Cashflow Statement
for the year ended 31 December 2002
Unaudited
2002 2001
# #
______________________________________________________________________________________________________________
Net cash inflows from operating activities 35,077,386 5,023,549
Returns on investment and servicing of finance (740,799) (1,676,650)
Taxation (1,529,751) (836,807)
Capital expenditure and financial investment (63,584,329) (44,374,854)
_____________________________________________________________________________________________________________
Cash outflow before use of liquid resources and (30,777,493) (41,864,762)
financing
Financing 28,127,407 46,491,398
_____________________________________________________________________________________________________________
Increase/(decrease) in cash (2,650,086) 4,626,636
_____________________________________________________________________________________________________________
Unaudited
Reconciliation of operating profit to operating cash flows 2002 2001
# #
#'000
_____________________________________________________________________________________________________________
Operating profit 14,330,525 3,952,394
Depreciation charge 13,153,576 5,629,400
Decrease/Increase in stock 1,740,110 (2,031,600)
Increase in debtors (3,892,112) (4,912,959)
Increase in creditors 9,745,287 2,409,634
Abandonment expenditure - 15,439
Gain on sale of tangible assets - (38,759)
_____________________________________________________________________________________________________________
35,077,386 5,023,549
_____________________________________________________________________________________________________________
Analysis of cash flows for headings in the cash flow statement
2002 2001
Unaudited
# #
_____________________________________________________________________________________________________________
Returns on investment and servicing of finance
Interest received 130,075 140,535
Interest paid (870,874) (1,817,185)
_____________________________________________________________________________________________________________
Net cash outflow from returns on investment and servicing of
finance (740,799) (1,676,650)
_____________________________________________________________________________________________________________
Capital expenditure and financial investment
Purchase of tangible fixed assets (63,584,329) (44,472,995)
Sale of fixed assets - 98,141
_____________________________________________________________________________________________________________
Net cash outflow from capital expenditure and financial
investment (63,584,329) (44,374,854)
_____________________________________________________________________________________________________________
Financing
Capital element of finance lease rental repayments - (14,914)
Issue of shares net of expenses 30,418,738 23,769,612
Redemption of preference shares (950,000) -
Exercise of share options held by ESOP 276,750 -
Decrease/Increase in loan facility (1,618,081) 22,736,700
_____________________________________________________________________________________________________________
Net cash inflow from financing 28,127,407 46,491,398
_____________________________________________________________________________________________________________
Analysis of net debt
1 January Cash flows 31 December
2002 2002
# # #
____________________________________________________________________________________________________________
Cash in hand and at bank 5,424,700 (2,650,086) 2,774,614
Debt due after 1 year (24,943,143) 1,618,081 (23,325,062)
____________________________________________________________________________________________________________
Total (19,518,443) (1,032,005) (20,550,448)
____________________________________________________________________________________________________________
NOTES:
Accounting Convention
The financial information has been prepared on the basis of the accounting
policies set out in the Group's 2002 statutory accounts. These policies have
been applied consistently, throughout the current year and the preceding year.
Dividend
The Directors do not recommend the payment of a dividend given the Company's
growth strategy and development opportunities, and it is expected that any cash
generated by the Group's operations will be devoted to funding these
opportunities.
Earnings per Share
Basic earnings per share is calculated by dividing the earnings attributable to
ordinary shareholders by the weighted average number of ordinary shares in issue
during the year. For fully diluted earnings per share the weighted average
number of ordinary shares in issue during the year is adjusted to reflect the
potential exercise of share options by directors or employees.
The calculation of earnings per ordinary share shown is based upon the
following:
Unaudited
2002 2001
___________________________________________________________________________________________________
Profit/(loss) for the period #6,983,728 #868,314
Weighted average number of ordinary shares
for the period - Basic 102,286,706 40,845,409
- Fully Diluted 113,689,702 95,196,059
Earnings per share - Basic 6.8p 2.1p
- Fully Diluted 6.1p 0.9p
___________________________________________________________________________________________________
Acquisition of Oil and Gas Interests
Amounts invested for the acquisition of oil and gas interests are stated
exclusive of the provision for future estimated abandonment costs, as required
under FRS12, "Provisions and Contingencies". The discounted present value of
such costs relating to Mallard are #0.9 million.
Prior Year Adjustment (2001)
The group implemented FRS19 "Deferred Taxation" in the year ended 31 December
2001 and with the balance sheet as at that date being restated as follows:
Net assets
#
____________________________________________________________________________________________________________
As previously reported 20,753,799
Effect of implementation of FRS 19 755,000
____________________________________________________________________________________________________________
As restated 21,508,799
____________________________________________________________________________________________________________
The profit after tax for 2001 increased by #1,257,863 by applying FRS19.
Post Balance Sheet Events
Since 31 December 2002 the Company entered into an agreement for the purchase of
an additional 50.0% interest in the Chestnut oil field, for an initial cash
consideration of #6.5 million.
Statutory Accounts
The above financial information does not constitute statutory accounts as
defined in Section 240 of the Companies Act 1985. The comparative financial
information is based on the statutory accounts for the year ended 31 December
2001. Those accounts, upon which the auditors have issued an unqualified
opinion, have been delivered to the Registrar of Companies.
Full accounts for the year ended 31 December 2002 are due to be posted to
shareholders in April 2003 and will be available thereafter from the Company's
head office at King's Close, 62 Huntly Street, Aberdeen, AB10 1RS.
External Auditors
The Company's external auditors, PricewaterhouseCoopers LLP, have confirmed that
they have reviewed this Preliminary Announcement and it is consistent with the
accounts for the Group for the year ended 31 December 2002 which have not yet
been delivered to the Registrar of Companies. The report of the auditors on
those accounts is expected to be unqualified.
Annual General Meeting
The Annual General Meeting of the Company will be held in Aberdeen in June 2003,
notices for which will be sent out in due course.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USOAROUROUUR