REG - UMC Energy PLC - Interim Results

Tue Sep 25, 2012 2:00am EDT

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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 engaged a 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

 


Note

6 months period ended 30 June 2012

 (Unaudited)

£




6 months period ended 30 June 2011

 (Unaudited)

£








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)











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 30 June 2012

 (Unaudited)

£


6 months period ended 30 June 2011

 (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

ASSETS

Note

As at

30 June 2012

(Unaudited)

£


As at

30 June 2011

(Unaudited)

£


As at

31 December  2011

(Audited)

£

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


Share

Capital

£

Share

Premium

£

Share Based Payments

Reserve

£

 

Accumulated loss

£

 

Foreign

Currency

Translation

Reserve

£

 

 

Non-controlling 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

 


Share

Capital

£

Share

Premium

£

Share Based Payments

Reserve

£

 

Accumulated loss

£

 

Foreign

Currency

Translation

Reserve

£

 

 

Non- controlling 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 ended

30 June 2012

(Unaudited)

£




6 months period ended

30 June 2011

(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

30 June 2012

(Unaudited)

£

 

 

As at

30 June 2011

(Unaudited)

£

As at

31 December

2011

(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

30 June 2012

(Unaudited)

£

 

 

As at

30 June 2011

(Unaudited)

£

As at

31 December

2011

(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 2012 (unaudited)

Total

Period ended 30 June 2011 (unaudited)

Year ended 31 December 2011 (audited)

 

£

£

£

£

Revenue

       832

       832

              -

              -

 

 

 

 

 

Loss for the period

 

  66,297

 

  66,297

 

              -

 

              -

 

 

 

 

 

Total assets

  94,373

 94,373

              -

              -

 

 

 

 

 

Total liabilities

247,879

247,879

              -

              -

 

 

 

 

 

 

      

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.

 

 


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