Edinburgh Oil & Gas Announces Interim Results

Edinburgh Oil & Gas announces its interim results for the six months ended June 30, 2004.

Interim results for the six months ended June 30, 2004

  • The Buzzard oilfield development is on schedule and currently running within budget.
  • Pre-tax profit of £199,000 compared with £173,000 in the corresponding period in 2003.
  • Agreement signed on August 9th to acquire a 5 percent interest in UK Offshore license P133 from Tullow Oil. An exploration well is planned for next month.

  • Interim Statement C.H. Ross, Chairman, reports that the development of the Buzzard oilfield is on schedule and is currently running within budget. The Company's financial results for the first half of 2004 show a pre-tax profit of £199,000 compared with £173,000 in the corresponding period in 2003. The results reflect the disposal in 2003 of various UK onshore oil and gas producing properties that were no longer considered material to the Company's future. Turnover is down in line with the lower production levels but operating profits are higher due to cost control and the strength of the oil price. The balance sheet is beginning to reflect our increasing capital expenditure on the Buzzard development. The first drawdown on our US $105 million Credit Facility took place in July of this year. The facility is designed to meet all our requirements for Buzzard. The robust project economics have been boosted by the current strength in the forward oil price. To date, the Company has not entered into any hedging arrangements.

    During the first half the Company participated in three exploration wells located in the Outer Moray Firth. All three wells were plugged and abandoned. It is our policy to concentrate the majority of our exploration efforts on small working interests in licences with prospects that are high risk in terms of chances of success but which offer the potential for significant reserves.

    On 9 August we signed an agreement to acquire a 5 per cent interest in UK Offshore license P133 from Tullow Oil UK Limited subject to Department of Trade and Industry and partner consent. The license, which is operated by BG Group, covers blocks 53/3a and 53/3b located in the Southern Gas Basin of the North Sea. An exploration well on block 53/3a is planned for next month and under the terms of the agreement the Company will fund part of Tullow's well cost to earn the Company's interest in the license.

    Onshore UK, the Hatfield Moors gas storage project continues to perform successfully and we have other possible gas storage projects under evaluation. We have signed Heads of Agreement for a gas sales contract for the Hem Heath coal mine methane project in North Staffordshire.

    We remain committed to maintaining our full interest in the Buzzard development and sustaining an active UK offshore exploration program. Onshore UK we look forward to developing our gas storage and coal mine methane interests.

    Group Profit and Loss Account
    for the six months ended 30 June 2004
                                                   Six           Six
                                                months        months          Year
                                                 ended         ended         ended 
                                              30.06.04      30.06.03      31.12.03
                                                  £000          £000          £000
    Turnover                                     1,255         1,616         3,052
    Cost of sales                                 (357)         (780)       (1,412)
    Depletion                                     (315)         (371)       (1,017)
                                              ----------    ----------    ----------
    Gross profit                                   583           465           623
                                              ----------    ----------    ----------
    Administrative expenses                       (374)         (335)         (629)
    Exchange gains/(losses)                          5           (11)           (2)
                                              ----------    ----------    ----------
                                                  (369)         (346)         (631)
                                              ----------    ----------    ----------
    Operating profit/(loss)                        214           119            (8)
    Gains on disposal of fixed assets                -             -             2
                                              ----------    ----------    ----------
    Profit/(loss)on ordinary activities
    before interest and taxation                   214           119            (6)
    Interest receivable                             50            67           127
    Interest payable and other similar charges     (65)          (13)         (156)
                                              ----------    ----------    ----------
    Profit/(loss)on ordinary activities
    before taxation                                199           173           (35)
    Taxation                                        45           (73)          966
                                              ----------    ----------    ----------
    Profit for the period                          244           100           931
                                              ----------    ----------    ----------
    Earnings per share - basic                    0.58p         0.24p         2.24p
                       - diluted                  0.57p         0.23p         2.18p
                                              ----------    ----------    ----------
    1.  The interim accounts have been prepared on the basis of the accounting
        policies set out in the 2003 Annual Report and Accounts, except that
        interest payable and finance charges of £308,000 in respect of long term
        capital expenditure projects have been capitalized. The effect of this
        change on prior years is not material.
    2.  The results for the year ended 31 December 2003 do not constitute full
        accounts within the meaning of Section 240 of the Companies Act 1985 (as
        amended by Section 10 of the Companies Act 1989) and are an abridged version
        of the unqualified accounts which have been filed with the Registrar of
        Companies. The independent auditors' report did not contain a statement
        under Section 237(2) & (3) of the Companies Act 1985.
    3.  No interim dividend has been declared (2003 - nil).
    4.  Earnings per share is based on the profit after taxation of £244,000 (2003 -
        £100,000) and 41,750,996 weighted average shares (2003 - 41,604,599) in
        issue during the period.
    5.  The results for each of the six month periods are unaudited.
    6.  Copies of the interim report are available from the Company's registered
        office, 10 Coates Crescent, Edinburgh EH3 7AL.