UMC Energy PLC (UEP) - Interim Results RNS Number : 0221N UMC Energy PLC 25 September 2012 25 September 2012 UMC ENERGY PLC ("UMC" or the "Company") Interim Results for the half year ended 30 June 2012 CHAIRMAN'S STATEMENT On 26 March 2012, the Company entered agreements with CNOOC Australia Limited (CNOOC), a subsidiary of CNOOC Limited, the Chinese multi-national oil and gas company listed on the New York and Hong Kong Stock Exchanges, whereby CNOOC subscribed for a 70% equity interest in the Company's then wholly owned subsidiary, PNG Energy Limited (PNG Energy), diluting UMC Energy's interest to a 30% equity interest. PNG Energy's wholly owned subsidiary, Gini Energy Limited (Gini Energy), holds two on-shore (PPLs 378 and 405) and two off-shore (PPLs 374 and 375) Petroleum Prospecting Licences (PPLs) in Papua New Guinea. Pursuant to the agreements, and in consideration for the share subscription, CNOOC is responsible for funding all expenditure in respect of the PPLs during the exploration phase, including such expenditure required to comply with the minimum work obligations. Such expenditure will be repaid to CNOOC out of production revenues and off take of oil and gas once the assets of Gini Energy enter production, should such production occur. If exploration and appraisal work indicates the probable existence of commercial reservoirs of oil or gas in any part of the PPLs at the end of the exploration phase, the parties must each finance their pro-rata share of all expenditure required in respect of the development plan either themselves or by procuring sufficient finance from a third party. Subsequent to execution of the agreements, CNOOC has been conducting various technical studies and has been mobilising to conduct on-site exploration activities. Separately the Company has engageda Melbourne based firm of consulting petroleum engineers, considered to be world leaders with regard to Papua New Guinea petroleum structural and geological interpretation, to review the available geological data, identify leads and provide technical advice. Madagascar continues to experience a period of political upheaval and uncertainty. Despite the fact that the Company has not, in any way, been negatively affected by these events, it has resolved to take a cautious approach to exploration and accordingly has not conducted exploration activities during the current financial half-year. The Company continues to monitor the situation. The Company remains dependent on loan funds being made available to it by Natasa Mining Ltd to meet its working capital and other requirements. C Kyriakou Chairman 25 September 2012 UMC ENERGY PLC CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT For the six months period ended 30 June 2012 6 months period 6 months period ended 30 June 2012 ended 30 June 2011 (Unaudited) (Unaudited) Note £ £ Administrative expenses (248,149) (223,274) Exploration licence fees not capitalised (107,071) (114,503) Gain on dilution of subsidiary 93,178 Impairment charge 7 - - Share of results of associates (19,889) - Loss from operations (281,931) (337,777) Finance costs (247,647) (101,609) Loss before taxation (529,578) (439,386) Income tax expense 5 - - Loss for the period (529,578) (439,386) Attributable to: Equity holders of the parent (384,181) (439,386) Non-controlling interest (145,397) - (529,578) (439,386) Loss per share in pence - including share of associates' results Basic 6 (0.16) (0.18) Diluted 6 (0.16) (0.18) Loss per share in pence - excluding share of associates' results Basic 6 (0.15) (0.18) Diluted 6 (0.15) (0.18) The Group has no recognised gains or losses other than the results for the period as set out above CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME For the six months period ended 30 June 2012 6 months period ended 6 months period ended 30 June 2012 30 June 2011 (Unaudited) (Unaudited) £ £ Loss for the period (529,578) (439,386) Foreign currency translation differences for foreign operations 286 (21,827) Other comprehensive expense for the period 286 (21,827) Total comprehensive expense for the period (529,292) (461,213) Attributable to: Equity holders of the parent (392,628) (461,213) Non-controlling interest (136,664) - Total comprehensive expense for the period (529,292) (461,213) CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2012 As at As at As at 30 June 2012 30 June 2011 31 December 2011 (Unaudited) (Unaudited) (Audited) ASSETS Note £ £ £ Non Current Assets Intangible assets 7 4,874,410 1,925,000 15,314,346 Property, plant and equipment 1,381 1,865 1,156 Investment in associated undertaking 13,468,111 - - Total non current assets 18,343,902 1,926,865 15,315,502 Current Assets Taxation receivable 490 1,462 897 Trade and other receivables 90,561 16,796 31,035 Cash and cash equivalents 20,510 12,567 130,909 Total current assets 111,561 30,825 162,841 Total Assets 18,455,463 1,957,690 15,478,343 EQUITY AND IABILITIES Current Liabilities Trade and other payables 77,419 109,108 80,874 Loans 5,224,991 1,339,895 1,715,124 Total current liabilities 5,302,410 1,449,003 1,795,998 Non current liabilities Long term provision - 19,175 - Total Liabilities 5,302,410 1,468,178 1,795,998 Equity and Reserves Called up share capital 2,422,224 1,222,223 2,422,224 Share premium 17,044,183 4,756,183 17,044,183 Share based payments reserve 10,979 104,028 10,979 Translation reserve 149,085 133,304 157,532 Accumulated loss (6,120,607) (5,726,226) (5,736,426) Equity attributable to equity holders of the parent 13,505,864 489,512 13,898,492 Non-controlling interest (352,811) - (216,147) Total Equity 13,153,053 489,512 13,682,345 Total equity and liabilities 18,455,463 1,957,690 15,478,343 CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the six months period 30 June 2012 Foreign Currency Translation Share Reserve Based Share Share Payments £ Accumulated Non-controlling Capital Premium Reserve loss interest Total £ £ £ £ £ £ Balance at 1 January 2012 2,422,224 17,044,183 10,979 (5,736,426) 157,532 (216,147) 13,682,345 Total comprehensive expense for the period - Loss - - - (384,181) - (145,397) (529,578) Total other comprehensive expense - - - - (8,447) 8,733 286 Total comprehensive expense for the period - - - (384,181) (8,447) (136,664) (529,292) Balance at 30 June 2012 2,422,224 17,044,183 10,979 (6,120,607) 149,085 (352,811) 13,153,053 Foreign Currency Translation Share Reserve Based Share Share Payments £ Non- Accumulated controlling Capital Premium Reserve loss interest Total £ £ £ £ £ £ Balance at 1 January 2011 1,222,223 4,756,183 104,028 (5,286,840) 155,131 - 950,725 Total comprehensive expense for the period - Loss - - - (439,386) - - (439,386) Total other comprehensive expense - - - - (21,827) - (21,827) Total comprehensive expense for the period - - - (439,386) (21,827) - (461,213) Balance at 30 June 2011 1,222,223 4,756,183 104,028 (5,726,226) 133,304 - 489,512 CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS for the six months period 30 June 2012 6 months period 6 months period ended ended 30 June 2012 30 June 2011 (Unaudited) (Unaudited) £ £ Cash flows from operating activities Net loss from operations (281,931) (337,777) Adjustments for : Translation and currency movements (30,323) (1,442) Share of associate undertaking's losses 19,889 - Depreciation 709 278 Operating cash flows before movements in working capital (291,656) (338,941) (Increase)/decrease in trade & other receivables (59,119) 11,561 (Decrease)/increase in trade and other payables (3,455) 24,839 Net cash flow from operating activities (354,230) (302,541) CASH FLOW STATEMENT Net cash flows from operating activities (354,230) (302,541) Investing Activities Property, plant and equipment additions (1,002) - Intangible assets additions (2,949,410) - Dilution of subsidiary (107,510) - Net cash flow from investing activities (3,057,922) - Financing activities Loans 3,528,602 374,170 Loan interest and charges (226,849) (82,434) Net cash flow from financing activities 3,301,753 291,736 Decrease in cash & cash equivalents (110,399) (10,805) Cash and cash equivalents brought forward 130,909 23,372 Cash and cash equivalents carried forward 20,510 12,567 NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS For the six months period ended 30 June 2012 1. General information UMC Energy Plc is a company incorporated in England and Wales. The Company's registered office is First Floor, 10 Dover Street, London, W1S 4LQ. The principal activity of the Group is the investment in, and exploration and development of natural resources projects, specifically in a petroleum exploration project in Papua New Guinea and a uranium exploration project in Madagascar. The Group's principal activity is carried out in US dollars. The interim results are presented in pounds sterling as this is the currency of the country (the UK) where the Company is incorporated and its ordinary shares admitted for trading. 2. Statement of compliance The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting". The condensed consolidated interim financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated annual financial statements of the Group as at and for the year ended 31 December 2011. The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union. These condensed consolidated interim financial statements were approved by the Board of Directors on 25 September 2012. 3. Significant accounting policies The accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2011. Going Concern The interim results have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business. The directors believe that it is appropriate to prepare the financial report on a going concern basis as they are confident that the Company will be able to raise additional funds through debt or equity raisings when required. The directors are of the opinion that the proposed debt or equity raising measures and the existing cash resources will provide sufficient funds to enable the Company to continue its operations for at least the next twelve months. 4. Segmental analysis The Group has one reportable segment which is that of the investment directly and indirectly in, and operation of, resource exploration and development projects. The Group's operational activities are wholly focused in Madagascar and Papua New Guinea. The Company's registered office is in London, UK. The Board of Directors review internal management reports at least monthly. The Group has not yet commenced commercial resource production and has no turnover in the year. Information regarding the results of the reportable segments is shown below. Performance is measured based on the segment profit before income tax as included in the internal management reports that are reviewed by the Board of Directors. There is no inter- segment pricing. Information about reportable segments: 30 June 2012 30 June 2011 £ £ External revenue - - Financial revenue - - Financial expenses 247,647 101,609 Depreciation 709 278 Impairment charge - - Reportable segment loss 529,578 439,386 Segmental assets 4,987,351 1,957,690 Segmental liabilities 5,302,410 1,468,178 Geographical segments The segment is managed on a worldwide basis. Individual assets are located in various countries. In presenting information on the basis of geographical segments, segment assets are based on the geographical location of the assets. Non-current assets by geographical area 30 June 2012 30 June 2011 £ £ Madagascar 1,926,381 1,926,865 Papua New Guinea 2,949,410 - 5. Taxation No provision for corporation tax has been provided for, due to losses incurred in the current and previous periods. 6. Loss per share Including share of associate's results Loss per share has been calculated by dividing the loss for the period after taxation, including share of associate's results, attributable to the equity holders of the parent company of £384,181 (30 June 2011: £439,386) by the weighted average number of shares in issue at the period end of 244,444,763 (30 June 2011: 244,444,763). Diluted loss per share has been calculated using the weighted average number of shares in issue at the period end, diluted for the effect of share options and warrants in existence at the period end of 245,136,237 (30 June 2011: 245,136,237). Excluding share of associate's results Loss per share has been calculated by dividing the loss for the period after taxation, excluding share of associate's results, attributable to the equity holders of the parent company of £364,292 (30 June 2011: £439,386) by the weighted average number of shares in issue at the period end of 244,444,763 (30 June 2011: 244,444,763). Diluted loss per share has been calculated using the weighted average number of shares in issue at the period end, diluted for the effect of share options and warrants in existence at the period end of 245,136,237 (30 June 2011: 245,136,237). 7. Intangible assets As at As at As at 31 December 30 June 2012 30 June 2011 2011 (Unaudited) (Unaudited) (Audited) £ £ £ Development expenditure Cost Balance brought forward 1,596,346 1,596,346 1,596,346 Additions - - - Balance carried forward 1,596,346 1,596,346 1,596,346 Exploration licences Balance brought forward (at fair value) 17,501,372 4,112,026 4,112,026 Additions - - 13,389,346 Transfer of assets on dilution of subsidiary (13,389,346) - - Balance carried forward 4,112,026 4,112,026 17,501,372 Impairment Balance brought forward (3,783,372) (3,783,372) (3,783,372) Impairment charge - - - Balance carried forward (3,783,372) (3,783,372) (3,783,372) Exchange movements Balance brought forward - - - Additions - - - Balance carried forward - - - Total 1,925,000 1,925,000 15,314,346 The development expenditure relates to development of the uranium exploration project in the Morondava basin of Madagascar. The licences relate to uranium exploration licences in the Morondava basin and the petroleum exploration project in Papua New Guinea. The Petroleum Prospecting Licences in Papua New Guinea were deconsolidated following dilution of the subsidiary in March 2012. The Morondava uranium project has yet to reach a stage of development where a determination of the technical feasibility or commercial viability can be assessed. In addition, as Madagascar is presently experiencing a period of political upheaval and uncertainty, the Company has resolved to take a cautious approach to exploration and accordingly has not conducted exploration activities during the current financial year and does not expect to undertake any material exploration activities in Madagascar whilst this period of uncertainty prevails. In these circumstances, whether there is any indication that the asset has been impaired is a matter of judgement, as is the determination of the quantum of any required impairment adjustment. The directors have resolved that it is not appropriate to capitalise any further expenditure on the intangible asset until circumstances change. The Directors have used their experience to conclude that an impairment adjustment of £nil is required for the six months to 30 June 2012. As at As at As at 31 December 30 June 2012 30 June 2011 2011 (Unaudited) (Unaudited) (Audited) £ £ £ Exploration and evaluation expenditure Balance brought forward - - - Additions 2,949,410 - - Balance carried forward 2,949,410 - - The exploration and evaluation expenditure relates to the company's interest in the Papua New Guinea Petroleum Prospecting Licences held by its associated company. Total Intangible Assets 4,874,410 1,925,000 15,314,346 8. Investments in associated undertakings On 26 March 2012, the Company entered agreements with CNOOC Australia Limited ("CNOOC"), a subsidiary of CNOOC Limited, the Chinese multi-national oil and gas company listed on the New York and Hong Kong Stock Exchanges, whereby CNOOC subscribed for a 70% equity interest in PNG Energy Limited with UMC Energy retaining a 30% equity interest. As a result of this transaction, the PNG Energy group ceased to be controlled by the Company in March 2012 and became an associate. The Company has an equity holding in the following associate undertaking: PNG Energy Group Direct 30% Indirect -_ Total 30% The country of incorporation of the associate undertaking is the British Virgin Islands and the principal place of business is Papua New Guinea. Summarised results of the associate undertaking, PNG Energy Group, as translated into sterling are as follows: Period ended 30 June Total Period ended 30 Year ended 31 2012 (unaudited) June 2011 December 2011 (unaudited) (audited) £ £ £ £ Revenue 832 - - 832 Loss for the period 66,297 66,297 - - Total assets 94,373 94,373 - - Total 247,879 247,879 - - liabilities 9. Post balance sheet events Since 1 July 2012, the Company has advanced a further US$6,561 (£4,049) to Uramad SA. Since 1 July 2012, the Company has borrowed a further A$386,105 (£248,323) from Natasa Mining Ltd, for working capital. This information is provided by RNS The company news service from the London Stock Exchange END IR EASNLALAAEFF -0- Sep/25/2012 06:00 GMT
UMC Energy PLC UEP Interim Results
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