Tomco Energy Interim Results
RNS Number : 6576X
TomCo Energy PLC
27 June 2008
TomCo Energy Plc
('TomCo' or 'the Company')
Results for the 6 months ended 31 March 2008
Highlights
* Acquisition of 50% interest in the Heletz-Kokhav-Bur License and 25% in the Iris
License, two petroleum licenses onshore Israel
* Raised £1.2 million in new equity and EUR1.0 million in convertible debt
* Increase in net assets in period from £6.0million to £6.8 million
Stephen Koml, Chairman of TomCo Energy Plc, said:
"During this period we have moved forward with our stated plans to build an effective oil
production platform with our acquisition of
the interests in the Heletz oil fields in Israel. Production has started well and we look
forward to an exciting future. With respect to
our oil shale assets in the Green River Basin, we are encouraged by the comments made by
President Bush on 18 June 2008 in his statement on
energy, which specifically encouraged the development of oil shale resources in the area."
Enquiries:
TomCo Energy Plc +44 (0)20 7808 4857
Stephen Komlsy
Strand Partners Limited +44 (0)20 7409 3494
Simon Raggett
Bankside Consultants Limited +44 (0)20 7367 8888
Simon Rothschild / Louise
Mason
Chairman's Statement
I am pleased to announce the results for TomCo Energy Plc ("TomCo" or "the Company") for
the six months ended 31 March 2008. These
financial results reflect the fundamental change by the Company into an active oil production
and exploration company and the build up to
our first major acquisition of interests in the Heletz-Kokhav-Brur and Iris License in Israel
("Heletz Fields").
The £56,000 income shown in the accounts arises from our wells in the USA, averaging a
net 12 barrels per day in the period, prior to
the Heletz Field acquisition. The loss before tax of £668,000 includes provision of £200,000
for the amortisation of the costs of our
existing wells in the USA and £84,000 in regard to oil lease impairments, again for our wells
in the USA.
Acquisition of a 50% interest in the Heletz-Kokhav-Brur License and a 25% interest in the
Iris License, Israel
On 2nd April 2008 TomCo announced that, with its wholly owned Israeli subsidiary,
Luton-Kennedy Ltd ("LKL"), it had completed the
acquisition ("Acquisition") of interests in two petroleum licenses, onshore Israel from Avenue
Group Inc (AVNU.OB), a New York based USA
listed Oil & Gas Company, ("Avenue"). The interests acquired are a 50% interest in the
Heletz-Kokhav-Brur License and a 25% interest in the
Iris License (the "Licenses"), which include the original Heletz-Kokhav-Brur oilfield opened
in 1955 by BP ("Heletz"). The concessions,
covering over 68,000 gross acres, were recently awarded to Avenue by the Israel Petroleum
Commission and are extendable 3-year production
and development licenses which can be extended to 30-year production leases once production
from the fields has increased from the recent 60
to an estimated 300 barrels of oil per day ("bpd").
The Heletz Fields, located 55km south of Tel Aviv and 12km east of the Mediterranean
coast, are Israel's only onshore producing oil
fields. The fields have produced in excess of 17 million barrels of oil to date from
Cretaceous sands, with peak production of 3,000 to
4,200 bpd between 1959 and 1967. The original oil-in-place ("OOIP") for the fields is
estimated to be 50.7 million barrels; the Israeli
Government estimates that there are 2 million barrels of primary recoverable oil remaining,
and studies suggest over 5 million bbls of
secondary recovery potential may exist. A number of undrilled, deeper exploration prospects on
the licenses have estimated potential in
excess of 100 million barrels.
Avenue and the Company with LKL, are commissioning an independent determination of
remaining reserves for the Heletz Fields, as one of
the first steps in an active technical programme designed to identify well re-completion and
infill well drilling targets, and to examine
secondary recovery options. Production from the fields had declined to around 60bpd by 2007,
although TomCo expects that the implementation
of modern production and recovery methods and selected infill drilling will significantly
increase production over the next two years,
resulting in the granting of a 30-year production lease.
The completion terms of the Acquisition:
* At completion TomCo paid a US$1 million fee to Avenue Group Inc ("Avenue") in
respect to the transfer of the 50% and 25% interests
in the Heletz oil fields from Avenue to LKL. Avenue and TomCo will now seek approval from the
Israeli authorities of this transfer to LKL
with a formula to provide TomCo with the effective benefit of the transfer in the event that
no such approval is forthcoming.
* TomCo has issued to Avenue 12,618,615 ordinary shares of 0.5 pence each in the
Company ("TomCo Shares") valued at approximately
US$500,000 at 2p per share with a one year sale restriction.
* TomCo has paid US$107,000 to Avenue in respect to 50% of costs incurred to date in
relation to the Licenses.
* Over the three year Phase 1 period of the Licenses, TomCo and LKL will pay up to a
maximum of US$4.5 million of oil field
development costs.
* TomCo will pay a further US$1.5 million fee to Avenue at the time at which a 30
years production lease is issued, which is
expected to be at the time production at the fields reaches 300 bpd..
* TomCo will pay a further US$5 million fee to Avenue in the event that gross
recoverable reserves on the Licenses are declared by
an independent, qualified assessor to be more than 10 million barrels.
To finance the Acquisition, TomCo placed 80,799,999 shares at 1.5p per share raising a
total of £1.2m before expenses; 67,066,666 shares
were admitted to AIM on 27 March 2008 and the remaining 13,333,333 shares on 3 April 2008.
Each two shares placed has an attached warrant to
subscribe for one new ordinary TomCo share at a strike price of 2.5p per share with a 13
months term and a further Warrant for one share at
a strike price of 5p exercisable within 13 months of the date of exercise of the first
warrant.
At completion of the Acquisition the Company issued a 24 month 8% Convertible Loan Note to
Trafalgar Capital Specialized Investment Fund
(Trafalgar) for EUR1.0 million with a minimum convertibility at 2p per share and repayments
commencing in October at £50,000 per month. The
Company has also issued to Trafalgar 7,000,000 warrants with a three year term and an exercise
price of 1.63p. Additionally, TomCo paid a
fee of EUR25,000 to Trafalgar which was satisfied by the issue of 1,179,562 ordinary shares of
the Company at a price of 1.66p per share.
Following the issue of all these shares the Company's issued share capital now consists of
538,049,151 ordinary shares with voting
rights.
Investments
During the period under review the Company maintained its interests in production wells in
the USA comprising two separate wells,
"Flusche" and "Rock Crossing", and a 50% holding in the Mark III leases, "Saratoga and Abel"
in Lubbock County, Texas, which have 8
producing wells and preliminary estimated Reserves of 28,960 barrels. In March 2008 the
Flusche well ceased to produce and was plugged, but
in Scurry County, Texas, Boone ž2, a new well, started drilling and has encouraging oil
shows.
Strategy
The Company's strategy remains the same going forward, firstly, to hold the oil shale
assets in reserve until such time as their
exploitation becomes commercially and economically practical. In this regard, we believe that
meaningful production from oil shale in the
USA will start within a 6 year time frame (as a result of the huge strategic and commercial
pressures, together with present supply anxiety
and exacerbated by the current increase in oil prices); indeed there has been a flurry of Oil
Shale deals done this year in the USA,
including an acquisition by IDT Energy Corporation and apparent oil shale land purchases by
Shell Oil.
Secondly, the Company is utilizing the expertise of Howard Crosby, our CEO, and John Ryan,
our Commercial Director, in the search for
further investment in oil wells and proven undeveloped acreage located in the USA and in
special situations like the Heletz Licenses in
Israel. This strategy is being implemented with caution and expert examination of suggested
acquisitions with the intention to create a
productive and potential investment portfolio of conventional American and Israeli based
mostly shallow producing oil wells and proven
undeveloped drilling locations and create a meaningful oil reserve. Meanwhile the Board in
general continues to actively seek further
investments, acquisitions and oil business associations.
Future Investment
Your Board is now also reviewing certain other investments where a clear advantage can be
shown to exist to assist in improving the
value of our shares.
Web Site
Shareholders can find detailed information on the Company's web site; www.tomcoenergy.com
which, in accordance with AIM Rule 26,
contains a summary of our current strategy, detailed information about USA oil shale and oil
shale related links to USA Government sites,
the Company's share price, documents, announcements, press releases and articles.
S A Koml
Chairman
27 June 2008
Consolidated income statement
For the six months ended 31 March 2008
Unaudited Unaudited
Audited
Six months ended 31 Six months ended 31 Year
ended 30 September
March March
2007
2008 2007
£'000 £'000
£'000
Revenue 56 -
68
Cost of sales (31) -
(36)
Gross profit 25 -
32
Administrative expenses (693) (204)
(1,274)
Operating loss (668) (204)
(1,242)
Financial income - 5
30
Loss before taxation (668) (199)
(1,212)
Taxation - -
-
Loss for the year attributable (668) (199)
(1,212)
to equity shareholders
Unaudited Unaudited
Audited
Earnings per share Six months ended 31 Six months ended 31 Year
ended 30 September
March 2008 March
2007
2007
Pence per Pence per
Pence per
share share
share
Loss per share (0.15) (0.07)
(0.34)
Fully diluted loss per share (0.15) (0.07)
(0.34)
All amounts derive wholly from continuing activities. The financial information above may
not be representative of future results
Consolidated Balance sheet
As at 31 March 2008
Unaudited Unaudited Audited
31 March 31 March 30
2008 2007 September
2007
£'000 £'000 £'000
ASSETS
Non current assets
Property, plant and equipment 5 2 6
Oil properties 6,682 5,181 5,892
Available for sale financial assets 50 94 49
6,737 5,277 5,947
Current assets
Trade and other receivables 60 54 54
Cash and cash equivalents 1,152 1,004 136
1,212 1,058 190
LIABILITIES
Current liabilities
Trade and other payables (328) (62) (93)
(328) (62) (93)
Net current assets 884 996 97
Long term liabilities
Convertible Loan Note (772) - -
Net assets 6,849 6,273 6,044
SHAREHOLDERS' EQUITY
Share capital 2,690 2,217 2,217
Share premium 6,495 5,057 5,593
Warrant reserve 360 - 272
Retained earnings (2,696) (1,001) (2,038)
Total equity 6,849 6,273 6,044
Consolidated statement of changes in equity
For the six months ended 31 March 2008
Share Share premium Warrant reserve Retained earnings
£'000 £'000
£'000
capit
Total
al
£'000
£'000
Balance at 1 October 2007 2,217 5,593 272 (2,038)
6,044
Recognition of share-based
payments - - 88 -
88
Loss for the financial period - - - (668)
(668)
Issue of share capital 473 902 - -
1,375
Exchange differences - - - 10
10
Balance at 31 March 2008 2,690 6,495 360 (2,696)
6,849
Consolidated statement of recognised income and expense
For the six months ended 31 March 2008
Unaudited Unaudited Audited
31 March 31 March 30
2008 2007 September
2007
£'000 £'000 £'000
Currency translation differences 10 - (24)
Net losses recognised directly in equity 10 - (24)
Loss for the financial period (668) (199) (1,212)
Total recognised expense for the year (658) (199) (1,236)
Attributable to the equity shareholders
of the Company (658) (199) (1,236)
Consolidated Cash Flow Statement
At 31 March 2008
Unaudited Unaudited Audited
31 March 31 March 30
2008 2007 Septemb
er
2007
£'000 £'000 £'000
Cash flows from operating activities
Cash generated from operations (187) (157) (540)
Net cash used in operating activities (187) (157) (540)
Cash flows from investing activities
Purchase of equipment - (1) (5)
Purchase of oil leases (769) (168) (703)
Purchase of available for sale financial assets - - (49)
Finance income - 5 30
Net cash used in investing activities (769) (164) (727)
Cash flows from financing
activities
Net proceeds from issue of 1,200 1,242 1,320
share capital
Issue of convertible loan note 772 - -
Cash raised from financing 1,972 1,242 1,320
activities
Net increase in cash and cash equivalents 1,016 921 53
Cash and cash equivalents at beginning of financial 136 83 83
period
Cash and cash equivalents at 1,152 1,004 136
end of financial period
1. Financial information
The interim financial information has been prepared on the basis of the accounting
policies as set out in the statutory financial
statements for the year ended 30 September 2007. The financial information set out herein does
not constitute statutory accounts.
2. Audit review
These interim results have not been subject to a full review by our Company auditors which
is in accordance with our normal interim
procedures.
3. Loss before taxation
Unaudited Unaudited Audited
31 March 31 March 30
2008 2007 Septemb
er
2007
£'000 £'000 £'000
The following items have been included in arriving
at operating loss:
Depreciation of property, plant and 1 - 1
equipment
Amortisation 200 - 40
Oil lease impairment 84 - 337
Investment impairment - - 94
Directors fees 87 8 137
Recognition of share based payments 88 - 176
Auditors' remuneration:
- Audit services 10 - 9
- Non audit services - - 14
Rentals payable in respect of land and 43 - 52
buildings
Net foreign exchange loss - - 24
4. Earnings per share
The loss per share calculations have been arrived at by reference to the following
earnings and weighted average number of shares in
issue during the period.
Unaudited Unaudited Audited
31 March 31 March 30
2008 2007 Septemb
er
2007
£'000 £'000 £'000
Basic EPS
Earnings attributable to Ordinary (668) (30) (1,212)
shareholders
Number Number Number
000's 000's 000's
Weighted number of shares in issue 448,903 290,300 359,746
This information is provided by RNS
The company news service from the London Stock Exchange
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