UMC Energy PLC UEP Interim Results

  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


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