Final Results

30 Mar 2006 07:01

Sound Oil PLC30 March 2006 SOUND OIL PLC PRELIMINARY RESULTS FOR THE PERIOD ENDED 31 DECEMBER 2005 The Board of Sound Oil plc ("Sound Oil" or the "Company") announces itspreliminary results for its first trading period from 27 January 2005 to 31December 2005. Trading in the Company's shares on AIM is currently suspendedfollowing the announcement on 20 March 2006 of a possible reverse takeover. CHAIRMAN'S STATEMENT Sound Oil plc was admitted to AIM on 29 June 2005 with a remit to invest inenergy resource opportunities in North and West Africa and raised £10.8 millionfrom a share placing. The Company has concentrated on opportunities which either gave significantupside in the event of an early discovery or gave an early revenue return,preferably both. Initially the Company focused its efforts on offshore areas ofWest Africa and has evaluated over thirty opportunities in Liberia, Morocco,Equatorial Guinea, Nigeria, Ivory Coast, Angola, Sierra Leone, Gambia, Gabon andSenegal. In its first accounting period to 31 December 2005, the Company made a net lossof £193,000. Expenditure incurred on pursuing investment opportunities and onadministration was £361,000, partly offset by £168,000 of income from bankdeposit interest net of tax. Total shareholders' funds at the year end were£10.7 million. Our initial cash reserves are virtually intact and we have a strong balancesheet. Our overheads are low and we outsource, where appropriate, to expertassociates. We are determined to find value for shareholders and not to tie upfunds in areas with little hope of early action. Towards the end of 2005 weextended our area of evaluation outside Africa to check whether there was bettervalue elsewhere, while also continuing to review opportunities in that region. On 20 March 2006 we announced that we had reached agreement in principle for theacquisition of energy resource assets in Asia. We are making progress with thistransaction which would result in the Company acquiring interests in anundeveloped gas field and exploration activity in Indonesia. The transactionwould represent a reverse takeover under the AIM Rules and would be conditionalon the approval of the Company's shareholders. Gerry Orbell Chairman 29 March 2006 PROFIT AND LOSS ACCOUNT for the period from 27 January to 31 December 2005 Notes £'000's Exploration expenditure (151) ------Gross loss (151)Administrative costs (210) ------Operating loss (361)Interest receivable 234 ------Loss on ordinary activities before tax (127)Tax 4 (66) ------Loss after tax (193) ------ Loss per share (pence): basic 5 (0.12)Loss per share (pence): diluted 5 (0.12) Results for the period reflect ongoing operations which are presentlybased in the UK BALANCE SHEET as at 31 December 2005 Notes £'000's Current assetsDebtors 6 24Cash and short-term deposits 10,839 --------Total current assets 10,863Creditors: amounts falling due within one year 7 115 --------Net current assets 10,748 -------- Total assets less current liabilities 10,748Creditors: amounts falling due after one year -Provisions for liabilities and charges - --------Net assets 10,748 -------- Capital and reservesShare capital 300Share premium account 10,641Profit and loss account (193) --------Total equity shareholders' funds 3 10,748 -------- CASH FLOW STATEMENT for the period to 31 December 2005 Notes £'000's Net cash outflow from operating activities 8 (336) Returns on investment and servicing of financeInterest received 234 Taxation - --------Cash outflow before management of liquidresources and (102)financing FinancingIssue of Ordinary Shares 11,115Costs associated with raising capital (174) --------Net cash from financing 10,941 Increase in cash 10,839 -------- NOTES TO THE FINANCIAL INFORMATION for the period to 31 December 2005 1. Accounting policies The financial information contained in this document does not constitutestatutory accounts within the meaning of section 240 of the Companies Act 1985but has been extracted from the audited statutory accounts for the period to 31December 2005. The audited statutory accounts received an unqualified auditors'report which did not contain a statement under section 237 of the Companies Act1985 and will be delivered to the Registrar of Companies in due course. Theaudited accounts have been prepared under the historical cost convention and inaccordance with the Oil Industry Accounting Committee Statement of RecommendedPractice - 'Accounting for Oil and Gas Exploration, Development, Production andDecommissioning Activities', using the accounting policies set out in theCompany's 2005 statutory accounts. 2. STATEMENT OF TOTAL RECOGNISED GAINS AND LOSSES for the period to 31 December 2005 £'000's Net loss for the period attributable to members of (193)the company Total recognised losses (193) 3. RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS FUNDS for the period to 31 December 2005 £'000's Total recognised losses relating to the period (193)New shares issued 11,115Costs associated with raising capital (174) ------Total movements during the period 10,748Shareholders' funds at 27 January 2005 - ------Shareholders' funds at 31 December 2005 10,748 ------ 4. Tax on profit on ordinary activities Analysis of tax charge £'000's Loss on ordinary activities before tax (127) Loss on ordinary activities at Standard Rate of UK Corporation Tax 38(30%)Non-deductible expenditure at Standard Rate (108)Small companies relief 4 ------Total tax - current (66) ------ The most significant event to affect the tax charge in the future will be theestablishment of exploration activities which will allow certain expenses to bededucted, and losses from the trade to be offset, in the calculation of thecharge. 5. Loss per share The calculation of basic loss per Ordinary Share is based on the loss after taxand on the weighted average number of Ordinary Shares in issue during theperiod. Diluted earnings per Ordinary Share reflect the notional exercise of theweighted average number of dilutive Ordinary Share options outstanding duringthe period. Basic and diluted loss per share are calculated as follows: Loss Weighted Earnings after average per share tax number pence of shares £'000s PenceBasic (193) 165 (0.12)Diluted (193) 166 (0.12) 6. Debtors: amounts due within one year £'000's Prepayments 24 ------- Total 24 ------- 7. Creditors: amounts falling due within £'000'sone year Trade creditors 11Corporation Tax 66Accruals 38 -------- Total 115 -------- 8. Cash flow statement analysis £'000'sa. Reconciliation of operating loss to net cash flow fromoperating activities Operating loss (361)Increase in debtors (24)Increase in creditors 49 --------Net cash outflow from operating activities (336) -------- b. Reconciliation of net cash flow to movement in net debt £'000's Increase in cash in the period 10,839Cash flow from movement in liquid resources -Change in net cash resulting from cash flows - --------Net cash as at 31 December 2005 10,839 -------- c. Analysis of Net Cash At Cash Flow 31 December 2005 £'000's £'000's Cash in hand and at bank 144 144Short term deposits 10,695 10,695 ------- --------Total net cash 10,839 10,839 ------- -------- 9. 2005 Report and Accounts Copies of the 2005 report and accounts will be sent to shareholders in duecourse. Further copies will be available from the Company's nominated adviser,Smith & Williamson Corporate Finance Limited, 25 Moorgate, London EC2R 6AY, freeof charge. This information is provided by RNS The company news service from the London Stock Exchange