RNS Number:0777R
Black Rock Oil & Gas PLC
28 March 2008
FOR IMMEDIATE RELEASE 28 March 2008
Black Rock Oil & Gas PLC
INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Black Rock Oil & Gas PLC ("Black Rock" or "the Company"; stock code: BLR), the
UK-based exploration company, announces its interim results for the six months
ended 31 December 2007.
CHAIRMAN'S STATEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Black Rock Oil & Gas plc (Black Rock) continues to focus its resources on its
assets in Colombia and plans an active exploration and appraisal programme
during 2008.
The highlight of 2007 was undoubtedly the discovery and testing of heavy oil at
the Acacia Este exploration prospect on the Las Quinchas Association Contract
area in Colombia. It was highly significant when in August 2007 the well
discovered oil in several sand horizons from the Tertiary Mugrosa Formation.
Testing subsequently recovered 16degreesAPI oil to a maximum rate of 101 barrels
of oil per day (BOPD) with only 5 per cent bottom sediment and water at standard
conditions and low pump rates. Following re-completion, the well was put onto a
long term production test, the results of which at this point are very
encouraging with the well flowing on average around 50 BOPD. Our joint venture
operator in Colombia, Kappa Resources Colombia Limited ("Kappa") intends over
the next year to conduct a programme of appraisal well drilling and new seismic
acquisition over the Acacia Este field to delineate the size and nature of this
important discovery and its potential productivity. Additional storage
facilities have been installed at the Acacia Este Field site to accommodate the
production levels anticipated during the testing programme.
The Acacia Este 2 appraisal well in the Las Quinchas Association Contract was
spudded by Kappa on December 21st 2007. Acacia Este 2 was drilled 500 metres
north of Acacia Este 1 to a total depth of 3752 feet. Oil shows were encountered
over more than one hundred feet whist drilling the target Tertiary-aged Lower
Mugrosa Formation. The well reached basement at 3720 feet. Three intervals in
the Lower Mugrosa were perforated, swab tested and placed on an extended well
test with a PCP pump. This confirmed the presence of heavy oil production with a
water cut less than 1%. Analysis of the oil indicates that it has a gravity of
14.9degrees API, which is similar to Acacia Este 1. Production rose to a maximum
of 20 BOPD but averaged between 5 and 10 BOPD before being shut in at the end of
February 2008.
Interpretation of the well logs indicated the potential for oil in a number of
zones which were subsequently tested. There are however differences in the
nature and thickness of the reservoir sands in Acacia Este 2, compared to Acacia
Este 1, that make correlation between the wells more complex without further
seismic data. These differences are not unusual with reservoir sand deposits
formed in a fluvial environment and the significance of the differences between
the well log responses will be assessed in the light of the test results. The
absence in Acacia Este 2 of the higher performing sands recorded in Acacia Este
1 did impact the flow rates recorded in the Acacia Este 2 test programme but
further seismic data to be collected during 2008 will enhance our ability to
identify suitable locations for future appraisal wells.
The Operator is also currently preparing the Arrinconada well site, our first
well on the Alhucema E&P Contract, for drilling in the near future. This is a
low-risk heavy oil prospect on trend with the Acacia Este and Arce Fields. Other
fields on trend include the prolific Chicala and Velasquez Fields. It is
expected for the well to take 20-30 days to drill.
In November 2007, when the steam generator on the Arce Field was determined to
require two further months of repair, Kappa and Black Rock decided that new
operations on the field should be suspended so as to allow resources to be
directed at the Acacia Este discovery whilst options for the future appraisal
and development of the Arce Field could be considered. We do not envisage that
the Arce Field will be abandoned and continue to view the Arce Field as a
long-term potential development.
The Company had a number of discussions with third parties in the six months to
December 2007 about participating in Black Rock's Colombian assets and which
would either have substantially relieved the Company of its share of these
exploration and appraisal expenditures or would have provided finance by means
of capital injections to carry out these exploration and appraisal expenditures.
Subsequent to the year end, Black Rock announced that the Company had agreed the
terms of new funding to develop further the Company's interests in Colombia.
Under the terms of the financing, Prospero Hydrocarbons Inc, a private Canadian
based oil exploration and development company, agreed to invest US$1,439,015 for
a 49% equity interest in the Company's interests in the Alhucema E&P Contract
which are now held by a Barbados-based subsidiary, Alhucema Resource Corp. In
addition, the Company and Prospero agreed the terms of an arrangement to develop
further the Company's interests in the Las Quinchas Association Contract. Under
this arrangement, Prospero agreed to invest up to US$4,000,000 (in tranches
matching the cash calls required in respect of Las Quinchas) for an equity
interest of up to 49 per cent in Las Quinchas Resource Corp which now holds the
Company's interests in the Las Quinchas Association Contract in the Middle
Magdalena Valley of Colombia. Additionally, Prospero's management will assist in
technical evaluations and a nominee of Prospero is expected to join the Board of
the Company shortly.
The Board remains confident about the prospects for the Alhucema E&P Contract
and the Las Quinchas Association Contract and the Directors believe that the
investment by Prospero is in the best interests of the Company and should enable
the Company to develop its Colombian Interests over the course of the next year.
In addition, the Directors believe that the Company will benefit from Prospero
management's extensive South American heavy oil experience.
Within the UK Southern North Sea, Black Rock has a 15% interest in Block 49/8c,
operated by Wintershall Noordzee. The Monterey Gas Field is located in Block 49/
8c and was previously estimated by the field operator to contain 165 billion
cubic feet of gas reserves although no formal resource or reserve report has yet
been prepared under any of the accepted standards. Amongst the options being
considered for the future development of the field, is to drill one or more
horizontal producers. Typically, such wells will have horizontal sections of
500m or more in order to obtain commercial rates and the well may also require
hydraulic fracturing. If developed, the field operator is considering piping the
gas to the nearby Windermere and Markham Fields and from there to the
Netherlands. Monterey remains a good opportunity for development but
realistically this is unlikely to take place before the end of 2009 as further
technical work will be required to confirm the precise development scenario for
this Carboniferous tight gas sand field. Consequently, Black Rock considers that
the length of time now needed to realise value in Monterey for our shareholders
cannot be justified and we can better use these funds for more rapid returns
that may be potentially obtained from our assets in Colombia. We will therefore
seek to find a buyer for our interest or to farm out to a company who will carry
us through any future work obligations required to take Monterey into
development.
During the interim accounting period, and following consolidation of our stock
on a 50 for 1 basis in July 2007, the Company announced on 25 September 2007
that it had successfully raised �2,003,250 by the issue of 11,129,167 shares.
These funds were used primarily as working capital to fund our Colombian oil
exploration and appraisal projects.
In order to provide a balance to its portfolio of assets, Black Rock will also
continue to search for appraisal, development or production projects that are
likely to provide cash flow in the near future or low-cost, low-risk exploration
projects with considerable upside. Some of these are currently under
consideration but the high oil price makes projects in attractive countries such
as the UK or Colombia very competitive. Shareholders will be advised about the
technical and financial implications should the Directors consider the assets to
be of potential significant value to Black Rock and obtainable at commercially
attractive rates.
In the light of the Acacia Este discovery, Black Rock has commissioned Gaffney,
Cline and Associates to produce a Competent Person's Report on its Colombian and
Southern North Sea assets. Work has commenced and it is expected that the report
will be completed by the end of May 2008, with an effective date of 31 December
2007. This will incorporate reserves and resource estimates (as appropriate) for
the current portfolio of discoveries and prospects. In the meantime, the aim of
the Board remains, to acquire, explore, and appraise high potential projects in
the established core regions, and to continue to strive for near term production
and build Black Rock Oil & Gas Plc on a solid financial base. The Directors are
determined to identify and capitalise on new drilling potential, and consolidate
current worthwhile projects.
I would like to thank the management team for all their hard work over the last
year and I look forward to working with Prospero and Kappa to capitalise on the
Acacia Este success in the coming year.
Tony Baldry
28 March 2008
For further information, please contact:
Black Rock Oil & Gas plc 01189 001350
Dr John Cubitt, Managing Director www.blackrockoil.com
Peter Kitson, Finance Director
Beaumont Cornish Limited (Nominated Adviser) 0207 628 3396
Michael Cornish
CONSOLIDATED INCOME STATEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Notes Six months Six months
ended ended
31 December 31 December
2007 2006
(Unaudited) (Unaudited)
� �
Revenue - -
Cost of sales - -
Gross profit - -
Administrative expenses (692,102) (682,722)
Group operating loss (692,102) (682,722)
Finance income 9,961 15,658
Loss before taxation (682,141) (667,064)
Taxation - -
Loss for the period (682,141) (667,064)
Attributable to:
Equity holders of the Company (682,141) (667,064)
Loss per share
Basic 3 (2.7p) (4.8p)
Diluted 3 (2.7p) (4.8p)
The results shown above relate entirely to continuing operations.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Share Share Share-based Merger Retained Total
Capital Premium Payments Reserve Losses Equity
Reserve
� � � � � �
Six months ended 31
December 2006
At 1 July 2006 2,883,564 6,598,271 56,483 212,023 (7,747,978) 2,002,363
Share issues less costs 646,214 706,123 - - - 1,352,337
Transfer from merger - - - (212,023) 212,023 -
reserve
Loss for the period - - - - (667,064) (667,064)
Share-based payments costs - - 7,180 - - 7,180
Transfer expiry of warrants - - (17,663) - 17,663 -
Exchanges difference - - - - (366) (366)
Balance at 31 December 2006 3,529,778 7,304,394 46,000 - (8,185,722) 2,694,450
Six months ended 31
December 2007
At 1 July 2007 5,257,756 7,217,202 38,820 - (8,866,418) 3,647,360
Fractional adjustment on
consolidation of shares 203 - - - - 203
Share issues less costs 111,286 1,690,326 - - - 1,801,612
Share-based payments costs - - 95,400 - - 95,400
Loss for the period - - - - (682,141) (682,141)
Exchange difference - - - - 124 124
Balance at 31 December 2007 5,369,245 8,907,528 134,220 - (9,548,435) 4,862,558
Year ended 30 June 2007
At 1 July 2006 2,883,564 6,598,271 56,483 212,023 (7,747,978) 2,002,363
Share issues less costs 2,374,192 618,931 - - - 2,993,123
Loss for the period - - - - (1,380,074) (1,380,074)
Share-based payments costs - - 14,359 - - 14,359
Transfer from merger - - - (212,023) 212,023 -
reserve
Transfer on expiry of - - (32,022) - 32,022 -
warrants
Exchange of difference - - - - 17,589 17,589
Balance at 30 June 2007 5,257,756 7,217,202 38,820 - (8,866,418) 3,647,360
CONSOLIDATED BALANCE SHEET
AS AT 31 DECEMBER 2007
Notes 31 December 2007 30 June 2007
(Unaudited) (Unaudited)
� � � �
ASSETS
Non-Current Assets
Goodwill 4 - -
Intangible exploration and 4 6,888,936 5,688,173
evaluation assets
6,888,936 5,688,173
Current Assets
Trade and other receivables 22,422 51,115
Cash and cash equivalents 307,093 246,545
329,515 297,660
Total Assets 7,218,451 5,985,833
LIABILITIES
Non-Current Liabilities
Loan (2,139,889) (2,128,486)
(2,139,889) (2,128,486)
Current Liabilities
Borrowings - (8,320)
Trade and other payables (216,004) (201,667)
(216,004) (209,987)
Total Liabilities (2,355,893) (2,338,473)
Net Assets 4,862,558 3,647,360
EQUITY
Called up share capital 6 5,369,245 5,257,756
Share premium account 8,907,528 7,217,202
Merger reserve - -
Share-based payments reserve 134,220 38,820
Retained losses (9,548,435) (8,866,418)
Total equity - attributable to
equity Shareholders of the
Company 4,862,558 3,647,360
This financial information was approved by the Board of Directors on 28 March
2008 and signed on its behalf by:
P J Kitson
Finance Director
CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Six months Six months
ended ended
31 December 31 December
2007 2006
(Unaudited) (Unaudited)
� �
Cash outflow from operating activities
Group operating loss (692,102) (682,722)
Adjustment for items not requiring an outlay of
funds:
Foreign exchange differences 124 (366)
Share-based payments charge - 7,180
National insurance write-back from share warrants - (7,347)
Adjustments arising from consolidation of shares 203 -
Operating loss before changes in working capital (691,775) (683,255)
Decrease/(increase) in receivables and prepayments 28,693 (482)
Increase in trade and other payables 14,337 415,727
Increase on translation of US$ loan 11,403 -
Cash used in operations (637,342) (268,010)
Net cash used in operating activities (637,342) (268,010)
Investing activities
For exploration and evaluation (1,200,763) (3,665,320)
Payments to purchase plant and equipment - (273)
Interest received 9,961 15,658
Net cash used in investing activities (1,190,802) (3,649,935)
Financing activities
Proceeds from issue of ordinary share capital 2,003,250 1,394,814
Share issue costs (106,238) (69,700)
Proceeds from non-recourse US$ loan - 2,181,614
Net cash from financing activities 1,897,012 3,506,728
Increase/(decrease) in cash and cash equivalents 68,868 (411,217)
Cash and cash equivalents and borrowings at 238,225 551,723
beginning of period
Cash and cash equivalents and borrowings at end of 307,093 140,506
period
Borrowings - -
Cash and equivalents 307,093 140,506
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
1. Introduction
In the year ended 30 June 2007, Black Rock Oil & Gas Plc ("the Company") and its
subsidiaries (together "the Group") prepared its consolidated financial
statements under UK generally accepted accounting principles ("UK GAAP"). With
effect from 1 July 2006, the Company is required by the AIM rules to prepare its
consolidated financial statements in accordance with International Financial
Reporting Standards ("IFRS"). The Group will therefore, prepare both its
consolidated financial statements and its parent company financial statements
for the year ending 30 June 2008 in compliance with IFRS. The Group will present
one year of comparative IFRS information for the year ended 30 June 2007 and
consequently the date of transition is 1 July 2006 ("transition date") being the
first day of the comparative period. The first published results to be prepared
on an IFRS basis are these results for the six months ended 31 December 2007,
which include comparative financial information for the six months ended 31
December 2006.
The comparative figures for the year ended 30 June 2007 prepared under IFRS are
not the Group's statutory accounts for that financial year. Those accounts,
which were prepared under UK GAAP, have been reported on by the Group auditors
and delivered to the registrar of companies. The report of the auditors was (i)
unqualified, (ii) did not include a reference to any matters to which the
auditors drew attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under Section 237(2) or (3) of the Companies
Act 1985. The financial information for the six months ended 31 December 2007
and 31 December 2006 is unaudited and does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985.
Information required by AIM rule 26 is available in the investor relations
section of the Group's website at www.blackrockoil.com.
The Company is listed on AIM, the Alternative Investment Market of the London
Stock Exchange, and has the TIDM code BLR.
This interim report, including the Group's consolidated financial information,
was authorised for issue by the board of directors on 28 March 2008and is
available on the Company's website, www.blackrockoil.com.
2. Summary of significant accounting policies
The principal accounting policies applied in the preparation of the financial
information in accordance with IFRS, as set out below. These policies have been
consistently applied to all periods presented.
2.1 Basis of preparation and going concern
This interim consolidated financial information of the Company and its
subsidiaries are for the six months ended 31 December 2007. This has been
prepared in accordance with IAS 34 "Interim Financial Reporting", and is covered
by IFRS 1 "First-time adoption of IFRS", because it is part of the period
covered by the Group's first IFRS financial statements for the year ending 30
June 2008. This interim financial information has been prepared in accordance
with those IFRS standards effective as at the time of preparing this interim
report. The IFRS standards that will be applicable at 30 June 2008, including
those that will be applicable on an optional basis, are not known with certainty
at the time of preparing this interim report.
UK GAAP differs in some areas from IFRS. In preparing this consolidated interim
financial information, the Directors have considered certain accounting,
valuation and consolidation methods applied in the UK GAAP financial statements
to comply with IFRS.
Reconciliations and descriptions of the effect of the transition from UK GAAP to
IFRS on the Group's equity, net assets, net income and cash flows are provided
in note 9. In this case, the reconciliations disclose no changes between the
amounts shown under UK GAAP and IFRS.
The consolidated financial information has been prepared under the historical
cost convention and in accordance with International Financial Reporting
Standards, as adopted by the European Union and IFRS 6 "Exploration for and
Evaluation of Mineral Reserves" and in accordance with the Companies Act 1985.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
2.1 Basis of preparation and going concern (continued)
The consolidated financial information has also been prepared on a going concern
basis. The Group's ability to continue as a going concern is contingent upon
raising additional funds to cover working capital requirements. In the absence
of being able to raise funds, the going concern basis may not be appropriate
with the result that the Group may have to realise its assets and extinguish
its liabilities other than in the ordinary course of business at amounts
different from those stated in this interim report. No allowance for such
circumstances has been made in this interim report as the directors believe
that the Group will be able to raise further funds in the future. The Company
entered into a financing arrangement with Prospero Hydrocarbons Inc, a private
Canadian based oil and development company with interests in Colombia, in
respect of the Company's interests in its Colombian assets after 31 December
2006 to fund up to $5,439,015 of exploration costs.
2.2 Basis of consolidation
The consolidated accounts incorporate the accounts of the Company and its
subsidiary undertakings and have been prepared by using the principles of
acquisition accounting ("the purchase method"), which includes the results of
the subsidiaries from their date of acquisition. Intra-group sales, profits and
balances are eliminated fully on consolidation.
2.3 Goodwill
Goodwill is the difference between the amount paid on the acquisition of the
subsidiary undertaking and the aggregate fair value of its separable net assets.
Goodwill is capitalised as an intangible fixed asset and in accordance with IFRS
3 is not amortised but tested for impairment annually or when there are any
indications that its carrying value is not recoverable. As such, goodwill is
stated at cost less any provision for impairment in value. If a subsidiary
undertaking is subsequently sold, goodwill arising on acquisition is taken into
account in determining the profit and loss on sale of the subsidiary.
2.4 Exploration and evaluation expenditure
All licence/project acquisitions, exploration and evaluation costs incurred or
acquired on the acquisition of subsidiary undertakings, are accumulated in
respect of each identifiable project area. These costs, which are classified as
intangible fixed assets are only carried forward to the extent that they are
expected to be recouped through the successful development of the areas or where
activities in the area have not yet reached a stage which permits reasonable
assessment of the existence of economically recoverable reserves (successful
efforts). Pre-licence/project costs are written off immediately. Other costs are
also written off unless commercial reserves have been established or the
determination process has not been completed. Accumulated costs in relation to
an abandoned area are written off in full against profit in the year in which
the decision to abandon the area is made.
When production commences the accumulated costs for the relevant area of
interest are amortised over the life of the commercial reserves on a unit of
production basis.
2.5 Decommissioning costs
Where a material liability for the removal of production facilities and site
restoration at the end of the field life exists, a provision for decommissioning
is recognised. The amount recognised is the present value of estimated future
expenditure determined in accordance with local conditions and requirements. An
asset of an amount equivalent to the provision is also created and depreciated
on a unit of production basis. Changes in estimates are recognised
prospectively, with corresponding adjustments to the provision and the
associated asset.
2.6 Impairment of oil and gas exploration expenditure
The carrying value of unevaluated areas is assessed on at least an annual basis
or when there has been an indication that impairment in value may have occurred.
The impairment of unevaluated prospects is assessed, based on the Directors'
intention with regard to future exploration and development of individual
significant areas and the ability to obtain funds to finance such exploration
and development.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
2.7 Foreign currencies
i) Functional and presentational currency
Items included in the Group's financial statements are measured using the
currency of the primary economic environment in which the Group operates ("the
functional currency"). The financial statements are presented in Pounds Sterling
("�"), which is the Group's functional and presentation currency.
ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using
the exchange rates prevailing at the dates of the transactions. Foreign exchange
gains and losses resulting from the settlement of such transactions and from the
translation at year end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in the income statement.
Transactions in the accounts of individual group companies are recorded at the
rate of exchange ruling on the date of the transaction. Monetary assets and
liabilities denominated in foreign currencies are translated at the rates ruling
at the balance sheet date. All differences are taken to the income statement.
iii) Group companies
The results and financial position of all group entities (none of which has the
currency of a hyperinflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
a) assets and liabilities for each balance sheet presented are translated
at the closing rate at the date of that balance sheet;
b) income and expenses for each income statement are translated at average
exchange rates (unless this average is not a reasonable approximation of the
cumulative effect of the rates prevailing on the transaction dates, in which
case, income and expenses are translated at the dates of the transactions); and
c) all resulting exchange differences are recognised as a separate
component of equity (cumulative translation adjustment).
2.8 Deferred tax
Deferred tax is provided in full using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and their
carrying amounts in the consolidated financial statements.
2.9 Share based payments
The Company made share-based payments to certain directors and employees by way
of issues of share warrants. The fair value of these payments is calculated by
the Company using the Black Scholes option pricing model. The expense is
recognised on a straight line basis over the period from the date of award to
the date of vesting, based on the Company's best estimate of shares that will
eventually vest.
2.10 Cash and cash equivalents
Cash and cash equivalents are carried in the balance sheet at cost and comprise
cash in hand, cash at bank, deposits held at call with banks, other short-term
highly liquid investments with original maturities of three months or less. Bank
overdrafts are included within borrowings in current liabilities on the balance
sheet. For the purposes of the cash flow statement, cash and cash equivalents
also include the bank overdrafts.
2.11 Critical accounting judgements and estimates
The preparation of financial statements in conformity with International
Financial Reporting Standards requires the use of accounting estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of income and expenses
during the reporting period. Although these estimates are based on management's
best knowledge of current events and actions, actual results ultimately may
differ from those estimates. IFRS's also requires management to exercise its
judgement in the process of applying the Group's accounting policies.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
2.11 Critical accounting judgements and estimates (continued)
The prime area involving a higher degree of judgement or complexity, where
assumptions and estimates are significant to the financial statements, is as
follows:
Impairment of intangible assets
Determining whether intangible assets are impaired requires an estimation of
whether there are any indications that its carrying value is not recoverable.
3. Loss per ordinary share
The basic loss per ordinary share has been considered using the loss
attributable to equity shareholders for the financial period of �682,141
(December 2006 - loss of �667,064) and the weighted average number of ordinary
shares in issue of 24,913,893 (December 2006 - 13,984,992). The weighted average
number of shares for 2006 has been adjusted to reflect the consolidation of
shares on 3 July 2007 (note 6).
The diluted loss per share has been kept the same as the basic loss per share as
the conversion of the share options decreases the basic loss per share, thus
being anti-dilutive.
4. Intangible assets
The movements of the Group's intangible assets during the period were as
follows:
Exploration
and evaluation
assets Goodwill Total
� � �
Cost
At 1 July 2007 6,236,777 503,397 6,740,174
Additions during the period 1,200,763 - 1,200,763
At 31 December 2007 7,437,540 503,397 7,940,937
Amortisation and impairment
1 July 2007 (548,604) (503,397) (1,052,000)
Provision for the period - - -
At 31 December 2007 (548,604) (503,397) (1,052,000)
Net book value
At 31 December 2007 6,888,936 - 6,888,936
At 30 June 2007 5,688,173 - 5,688,173
5. Decommissioning expenditure
The Directors have considered the environmental issues and the need for any
necessary provision for the cost of rectifying any environmental damage, as
might be required under local legislation. In their view, no provision is
necessary at 31 December 2007 for any future costs of decommissioning or any
environmental damage.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
6. Share capital and share options
31 December 30 June 2007
2007
� �
Authorised
295,235,890 ordinary shares of 1p each
(note (b) below)
(June 2007 1,600,000,000 ordinary shares of 2,952,359 8,000,000
0.5p each)
21,031,837 deferred shares of 24p each 5,047,641 -
(June 2007: Nil)
8,000,000 8,000,000
Allotted, called up and fully paid
32,160,407 ordinary shares of 1p each
(June 2007 - 1,051,591,894) ordinary shares 321,604 5,257,755
of 0.5p each
21,031,837 deferred shares of 24p each 5,047,641 -
(June 2007: Nil)
5,369,245 5,257,756
The share capital issues in the six months ended 31 December 2007 were are
follows:
+----------------------------+-------------+--------------+---------------+
| | Number of 1p| Number of 24p| Number of 0.5p|
| | ordinary| deferred|ordinary shares|
| | shares| shares| |
+----------------------------+-------------+--------------+---------------+
|As at 1 July 2007 | -| -| 1,051,591,894|
+----------------------------+-------------+--------------+---------------+
|Consolidation 50 ordinary | | | |
|shares of 0.5p to one 25p | | | |
|ordinary share (note (a) | | | |
|below) | | | |
| | 21,031,837| 21,031,837|(1,051,591,894)|
+----------------------------+-------------+--------------+---------------+
|Shares issued | 11,129,167| -| -|
+----------------------------+-------------+--------------+---------------+
|Shares cancelled | (597)| -| -|
+----------------------------+-------------+--------------+---------------+
|As at 31 December 2007 | | | |
| | | | |
| | 32,160,407| 21,031,837| -|
+----------------------------+-------------+--------------+---------------+
The details of warrants at 31 December 2007 were as follows:
Number of
warrants
of 50p each
At 1 July 2007 - prior to consolidation of ordinary shares 10,000,000
Eliminated on consolidation of warrants (note (c) below) (9,800,000)
Following consolidation of warrants 200,000
Issued during the period (note (d) below) 377,018
At 31 December 2007 577,018
(a) By a special resolution passed on 3 July 2007, every fifty of the existing
issued ordinary shares of 0.5p in the capital of the Company were consolidated
and sub-divided into one ordinary share of 1p and one deferred share of 24p. The
deferred shares have no voting or dividend rights.
(b) Furthermore, for every two of the existing authorised but unissued shares
(ie. comprising 548,408,106 unissued shares) of 0.5p each in the capital of the
Company were consolidated and reclassified as one ordinary share of 1p, ranking
pari passu with ordinary shares of 1p each referred to in the previous
paragraph. The total number of authorised ordinary shares immediately following
consolidation came to 295,235,890, including 21,031,837 issued shares at that
date.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
6. Share capital and share options (continued)
(c) On consolidation of ordinary shares, every fifty of the existing warrants
were consolidated and sub-divided into one warrant. Thus, 10,000,000 warrants
with a subscription price of 1p each were converted to 200,000 warrants with a
subscription price of 50p each, exercisable at any time up to 18 April 2009.
(d) On 8 August 2007, the Company issued 377,018 warrants to VSA Resources
Limited ("VSA") being 8% of �1,192,500 raised on placing the Company's new
ordinary shares on 18 January 2007. These warrants are exercisable at 25p each
at any time between 8 August 2007 and 8 August 2010. An additional cash sum of
�95,400 was paid to VSA on 31 January 2007. The total commission payable, in
cash and warrants, to VSA represented 16% of the cash raised on placing the
Company's ordinary shares on 18 January 2007.
7. Exploration and evaluation expenditure commitments
In order to maintain an interest in the oil and gas permits in which the Group
is involved, the Group is committed to meet the conditions under which the
permits were granted and the obligations of any joint operating agreements. The
timing and amount of exploration expenditure commitments and obligations of the
Group are subject to the work programme required as per the permit commitments
may vary significantly from the forecast based upon the results of the work
performed. Exploration results in any of the projects may also result in
variation of the forecast programmes and resultant expenditure. Such activity
may lead to accelerated or decreased expenditure. It is the Group's policy to
seek joint operating partners at an early stage to reduce its commitments. For
the matters set out in note 8 below, the Group did not have any commitments at
31 December 2007.
31 December 30 June 2007
2007
� �
Due within not more than one year - 788,000
Due between one and two years - 3,197,000
- 3,985,000
8. Events after the balance sheet date
On 27 February 2008, the Company agreed the terms of an arrangement to develop
further the Company's interests in the Las Quinchas Association Contract.
Prospero Hydrocarbons Inc ("Prospero"), a private Canadian based oil exploration
and development company, has agreed to invest up to US$4,000,000 (in tranches
matching the cash calls required in respect of Las Quinchas) for an equity
interest of 49% in Las Quinchas Resource Corp, a Barbados based subsidiary,
which now holds the Company's interests in the Las Quinchas Association Contract
in the Middle Magdalena Valley of Colombia. Additionally, Prospero's management
agreed to assist in technical evaluations and a nominee of Prospero will join
the board of the Company.
On 4 March 2008, the Company assigned its interest in the Alhucema E & P
contract to its Barbados based subsidiary, Alhucema Resource Corp. In
consideration for the cancellation of the Alhucema Bridge note (pursuant to
which Prospero provided an initial bridge loan of US$1,439,015 to Alhucema
Resource) and the cancellation of the Alhucema Bridge subscription (pursuant to
which Prospero was entitled to subscribe �734,030 for new ordinary shares of 1p
each in the capital of the Company), Prospero was issued shares in Alhucema
Resource Corporation representing 49% of the share capital of that company.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
9. Transition from UK GAAP to IFRS
The Group's first published results which have been prepared on an IFRS basis
are these for the six months ended 31 December 2007, which include comparative
IFRS financial information for the six months ended 31 December 2006 (in case of
income statement) and the year ended 30 June 2007 (in case of balance sheet).
Set out below are extracts from the Group's consolidated financial statements
for the year ended 30 June 2007 and the consolidated financial information for
the six months ended 31 December 2006 restated in accordance with IFRS including
the income statements and balance sheets showing in each case the equivalent
statement under UK GAAP and reconciliations between UK GAAP and IFRS. These
statements constitute preliminary comparative IFRS financial information in the
context of the financial information for the six months ended 31 December 2007.
This note also includes the Group's balance sheet under IFRS at the transition
date (1 July 2006), together with reconciliation to the originally published UK
GAAP balance sheet at that date. Although there are no adjustments, the
reconciliations on the balance sheets and the income statement (being the two
major statements in the financial information) are shown for a clearer
understanding of the effect of transition to IFRS. Cash flow statements,
however, have not been prepared as there are no adjustments. Furthermore, as the
financial information on the Company is not required for the purposes of the
interim report and there are no adjustments to the Company's financial
information resulting from the transition form UK GAAP to IFRS, no financial
information is shown below for the Company.
Exemptions
IFRS 1 'First-time Adoption of International Financial Reporting Standards'
permits companies adopting IFRS for the first time to take certain exemptions
from the full requirements of IFRS in the transition period. The interim
financial information has been prepared on the basis of the following material
exemption.
a) Net book value as deemed cost
IFRS 1 does not require a company to recreate cost information for property,
plant and equipment and goodwill. The Group's net book value of goodwill at 1
July 2006 is the deemed cost under IFRS going forward. These costs will
therefore be used as the basis for subsequent impairment tests for goodwill.
Factors affecting the changes on transition to IFRS
The changes on the transition to IFRS arise from the following principal
factors:
(i) Presentation of financial information
Presentation has been changed to be in compliance with IAS 1: 'Presentation of
Financial Statements' and terminology has also been changed to reflect headings
used in IFRS.
The cash flow statements are presented in accordance with IAS 7 'Cash Flow
Statements'. Cash flows have been grouped under three main headings, cash flows
from operating, investing and financing activities; these headings differ from
those presented under UK GAAP.
Accounting estimates
IFRS 1 prohibits the use of hindsight to correct estimates made under previous
GAAP unless there is objective evidence of error. The Group used the same
estimates made under UK GAAP for the opening IFRS balance sheet at 1 July 2006.
Statement of directors' responsibilities
The directors consider, in preparing the preliminary comparative IFRS financial
information, that the Company and the Group have used appropriate accounting
policies, consistently applied and supported by reasonable and supportable
judgments and estimates; and these accounting principles include the assumptions
the directors have made about the standards and interpretations expected to be
effective, and the policies expected to be adopted, when they prepare the first
complete set of IFRS financial statements for the year ending 30 June 2008. All
accounting standards which the directors consider to be applicable have
therefore been followed including the preparation of the preliminary comparative
IFRS financial information.
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Reconciliations
Balance sheet at 1 July 2006 (date of transition)
Effect of
transition
UK GAAP to IFRS IFRS
� � �
Assets
Non-current assets
Intangible exploration & 1,576,740 - 1,576,740
evaluation assets 1,576,740 - 1,576,740
Current assets
Trade and other receivables 62,340 - 62,340
Cash and cash equivalents 551,723 - 551,723
614,063 - 614,063
Total assets 2,190,803 - 2,190,803
Liabilities
Current liabilities
Trade and other payables (181,093) - (181,093)
(181,093) - (181,093)
Non-current liabilities
Provisions for liabilities (7,347) - (7,347)
and charges
Total liabilities (188,440) - (188,440)
Net assets 2,002,363 - 2,002,363
Equity
Share capital 2,883,564 - 2,883,564
Share premium account 6,598,271 - 6,598,271
Merger reserve 212,023 - 212,023
Other reserves 56,483 - 56,483
Retained losses (7,747,978) - (7,747,978)
Total equity and reserves 2,002,363 - 2,002,363
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Reconciliations (continued)
Balance sheet at 31 December 2006 (comparative interim date)
Effect of
transition
UK GAAP to IFRS IFRS
� � �
Assets
Non-current assets
Intangible exploration & 5,242,060 - 5,242,060
evaluation assets
Tangible assets - - -
5,242,060 - 5,242,060
Current assets
Trade and other receivables 62,822 - 62,822
Cash and cash equivalents 140,506 - 140,506
203,328 - 203,328
Total assets 5,445,388 - 5,445,388
Liabilities
Current liabilities
Trade and other payables (569,597) - (569,597)
(569,597) - (569,597)
Non-current liabilities
Borrowings (2,181,614) - (2,181,614)
(2,181,614) - (2,181,614)
Total liabilities (2,751,211) - (2,751,211)
Net assets 2,694,450 - 2,694,450
Equity
Share capital 3,529,778 - 3,529,778
Share premium account 7,304,394 - 7,304,394
Merger reserve - - -
Other reserves 46,000 - 46,000
Retained losses (8,185,722) - (8,185,722)
Total equity and reserves 2,694,450 - 2,694,450
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Reconciliations (continued)
Balance sheet at 30 June 2007 (comparative year end date)
Effect of
transition
UK GAAP to IFRS IFRS
� � �
Assets
Non-current assets
Intangible assets - 5,688,173 - 5,688,173
goodwill
Property plant and - - -
equipment 5,688,173 - 5,688,173
Current assets
Trade and other receivables 51,115 - 51,115
Cash and cash equivalents 246,545 - 246,545
297,660 - 297,660
Total assets 5,985,833 - 5,985,833
Liabilities
Current liabilities
Borrowings (8,320) - (8,320)
Trade and other payables (201,667) - (201,667)
(209,987) - (209,987)
Non-current liabilities
Borrowings (2,128,486) - (2,128,486)
(2,128,486) - (2,128,486)
Total liabilities (2,338,473) - (2,338,473)
Net assets 3,647 - -
Equity
Share capital 5,257,756 - 5,257,756
Share premium account 7,217,202 - 7,217,202
Merger reserve - - -
Other reserves 38,820 - 38,820
Retained losses (8,866,418) - (8,866,418)
Total equity and reserves 3,647,360 - 3,647,360
NOTES TO THE FINANCIAL INFORMATION
FOR THE SIX MONTHS ENDED 31 DECEMBER 2007
Reconciliations (continued)
Income statement for six months ended 31 December 2006 (comparative interim
period)
Effect of
transition
UK GAAP to IFRS IFRS
� � �
Revenue - - -
Cost of sales - - -
Gross profit - - -
Operating expenses (682,722) - (682,722)
Operating loss (682,722) - (682,722)
Finance costs - net 15,658 - 15,658
Loss before tax (667,064) - (667,064)
Tax - - -
Loss for the period (667,064) - (667,064)
Income statement for year ended 30 June 2007 (comparative annual period)
Effect of
transition
UK GAAP to IFRS IFRS
� � �
Revenue - - -
Cost of sales - - -
Gross profit - - -
Operating expenses (1,400,921) - (1,400,921)
Operating loss (1,400,921) - (1,400,921)
Finance costs - net 20,847 - 20,847
Loss before tax (1,380,074) - (1,380,074)
Tax - - -
Loss for the period (1,380,074) - (1,380,074)
GROUP INFORMATION
AS AT 31 DECEMBER 2007
Directors: Antony Brian Baldry MP, MA, LLB, FChI Arbitrators
Chairman (Non-Executive)
John Malcolm Cubitt BSc, PhD, CGeol
Managing Director
Peter John Kitson FCCA
Finance Director
Christopher Robertson Kinley Moore, MA, FGS
Director (Non-Executive)
Company Secretary: Watlington Securities Limited
Registered Office: 36 Elder Street
London
E1 6BT
Telephone: 020 7588 7352
Facsimile: 020 7377 2946
Business address Davidson House
Forbury Square
Reading
Berkshire RG1 3EU
Telephone: 011 8900 1350
Facsimile: 011 8900 1351
Email: info@blackrockoil.com
Web: www.blackrockoil.com
Colombian Branch: Black Rock Oil & Gas Sucursal Colombia
CRA 1 Este # 70-A-42
Edificio Arcolsa
Bario Rosales
Bogota
Colombia
Telephone: +571 348 1535
Principal Legal Representative: Luis Ernesto Monroy
Company number: 04128401
Nominated Adviser: Beaumont Cornish Limited
5th Floor
10-12 Copthall Avenue
London EC2R 7DE
Telephone: 020 7628 3396
Facsimile: 020 7628 3393
DIRECTORS, SECRETARY AND ADVISERS
Broker: Hanson Westhouse Limited
12th Floor
One Angel Court
London EC2R 7HJ
Telephone: 020 7601 6100
Facsimile: 020 7796 2713
Solicitors: Field Fisher Waterhouse LLP
35 Vine Street
London EC3N 2AA
Telephone: 020 7861 4000
Facsimile: 020 7488 0084
Group Auditors: UHY Hacker Young LLP
Quadrant House
17 Thomas More Street
Thomas More Square
London E1Y 1YW
Telephone: 020 7216 4600
Facsimile: 020 767 2602
Web: www.uhy-uk.com
Share Registry: Computershare Services PLC
PO Box 82
The Pavilions
Bridgwater Road
Bristol BS99 7NH
Telephone: 087 0702 0003
Facsimile: 087 7703 6116
Public relations: Aquila Financial Limited
181 Union Street
London SE1 0LN
Telephone: 020 7202 2600
Facsimile: 020 7202 2608
Bankers: Barclays Bank PLC
London Business Banking
7th Floor
United Kingdom House
180 Oxford Street
London W1D 1EA
This information is provided by RNS
The company news service from the London Stock Exchange
END
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