TIDMMRP
RNS Number : 5757Z
Meridian Petroleum PLC
24 September 2009
Thursday 24 September 2009
MERIDIAN PETROLEUM plc
("Meridian" or "the Company")
Interim Results for the six months to 30 June 2009
Continued operational cash-flow supports new exploration activity
Meridian Petroleum (AIM : MRP), the oil and gas exploration and production
company with producing assets in the USA and exploration licences in Australia,
announces interim results for the six months ended 30 June 2009.
Highlights
Development
* 3D seismic survey on PEL 82 licence in South Australia confirms prospective
resources1 of 430 million bbls of oil or 630 bcf of natural gas, significantly
greater than expected
* Acquisition strategy to be more broadly based - larger deals and new geographic
target areas
Financial
* Revenue of US$3.1 million (2008 H1 : US$8.7 million)
* Investment of US$3 million in exploration activity (2008 H1 : US$1.7 million)
* Cash generated from operations of US$1.6 million (2008 H1 : US$1.8 million)
* Operating profit before depreciation of US$0.5 million (2008 H1 : US$2.7
million)
* Adjusted EBITDA2 of US$1.75 million (2008 H1 : US$3.2 million)
Operational
* Average net production of 430 barrels of oil equivalent per day (boepd) (2008 H1
: 660 boepd)
* Disposal of Orion interest for US$0.2 million
Stephen Gutteridge, Chairman of Meridian Petroleum, said:
"In comparison to 2008, we experienced a much more challenging environment, with
lower energy prices, particularly for US natural gas, and lower production
levels with the expected decline in Orion output. However, with strong gains on
our hedging contracts and tight control of costs, our operations continued to be
cash generative and we have invested strongly in the business. In Australia that
investment has confirmed potentially transformational prospectivity and our
focus is now on the next steps to firm up this potential. In the US we will
continue to invest in sustaining and improving production at the East Lake
Verret field. Adding further high-quality assets remains a priority and we are
continuing to pursue attractive opportunities across a broad range of size and
geography."
For further information contact:
+------------------------------------------+-------------+-------------+-------------+
| Meridian Petroleum | +44 (0) 207 811 0140 |
+------------------------------------------+---------------------------+
| Stephen Gutteridge, Chairman | |
+--------------------------------------------------------+---------------------------+
| | |
+--------------------------------------------------------+---------------------------+
| Evolution Securities | +44 (0) 207 071 4300 |
+--------------------------------------------------------+---------------------------+
| Robert Collins, Adam James, Tim Redfern | |
+--------------------------------------------------------+---------------------------+
| | |
+--------------------------------------------------------+---------------------------+
| Financial Dynamics | +44 (0) 207 831 3113 |
+--------------------------------------------------------+---------------------------+
| Ben Brewerton/Ed Westropp | |
+------------------------------------------+-------------+-------------+-------------+
Note 1: Prospective resources are quantities of hydrocarbons estimated to be
potentially recoverable from undiscovered accumulations. As a general statement,
prospective resources can only become reserves as a result of successful
drilling.
Note 2: Adjusted EBITDA: EBITDA is adjusted to exclude IFRS charges for share
options and include US$1.23 million of hedging gains realised in the six months
ending 30 June 2009 (2008 H1 : Nil)
Ed Childers, the Company's Chief Operating Officer, who meets the criteria of a
qualified person under the AIM guidance note for mining and oil and gas
companies, has reviewed and approved the technical information contained in this
announcement.
The following financial statements are extracted from the Company's unaudited
interim financial statements for the six months ending 30 June 2009. These
statements will be posted before the end of September to shareholders on the
register and will be made available on the Company's website
www.meridianpetroleum.com at the same time.
Chairman's Statement
During the first half of 2009, Meridian Petroleum continued its three-pronged
strategy to develop the business - investment in exploration in Australia;
sustaining production and undertaking development drilling in the USA; and the
pursuit of acquisition opportunities in North America and Europe.
Expenditure on exploration activity, funded from the Company's cash reserves,
was US$3 million, a significant increase on previous years. The majority of this
was invested in the 3D seismic survey covering 88 square kms of the PEL 82
licence in South Australia. The results of that survey confirmed significant
prospectivity of around 430 million bbls of oil or 630 bcf of natural gas.
Prospectivity on this scale represents a transformational opportunity and we
have now moved on to the next stage of development, planning a two well drilling
programme.
Operating performance in the first half of 2009 was good, with consistent
production from the East Lake Verret field in Louisiana, minimal downtime with
no significant environmental or safety issues, and positive cash-flow. This was
achieved against the background of very challenging overall market conditions,
with average US natural gas prices under US$5 per mcf, around 40% of the prices
seen in the first half of 2008.
Average daily production in the first half was 430 barrels of oil equivalent per
day (boepd), down from 660 boepd in the same period last year. This was entirely
due to the expected decline in production at the Orion field in Michigan, USA,
and in June 2009, we sold our interest in that field. In contrast, the East Lake
Verret field, which we acquired with effect from March 2008, maintained better
than expected levels of output throughout the first half, producing an average
of 219 boepd, virtually unchanged from a year ago.
The combination of lower production from Orion and lower natural gas prices
reduced revenues from US$8.7 million in the first half of 2008 to US$3.1 million
in 2009. However, US$1.2 million of cash gains from hedging contracts, combined
with tight cost control, enabled the Company to continue to generate cash from
operations.
In terms of drilling activity, the Pontiac well in Michigan, a 50/50 prospect
targeted at further sour gas potential was, disappointingly, a dry-hole.
Subsequent to the half-year period, we drilled and suspended the McKerall 3 well
in East Lake Verret. We are currently reviewing this well with a view to
planning for re-entry when US natural gas prices improve.
Acquisition activity has continued to focus on adding proved reserves and
incremental production and a number of opportunities to acquire either assets or
companies remain under discussion.
Chairman's Statement
Outlook
There has been further development in all three aspects of our strategy in the
second half of 2009 and this will continue into 2010.
On the exploration front, the PEL 82 licence has been renewed for a further five
year period. Our next objective is to firm up drilling plans and finances as
quickly as possible and we are currently in discussion with a number of
potential farm-in partners. With 100% of the licence we have ample scope for an
attractive farm-out deal but we would also not rule out alternative funding
options which would enable us to retain all of the prospectivity. In addition we
are reviewing our work programme on the PEL 132 licence, also in South
Australia.
There will be further developments at East Lake Verret as we take steps to
sustain production at existing wells and add new production at low cost. We are
already implementing plans to work-over the Kafoury 2 and McKerall 1 wells. We
also anticipate bringing in new partners to exploit deeper zone opportunities in
the field. These are potentially sizeable but, in-line with our low-risk
approach, we will look to these partners to provide the funding for drilling.
The addition of further good quality assets remains high on our agenda. Despite
the seven year low in US natural gas prices, attractive deal opportunities have
been scarce with most prospects on offer being high-risk plays with little
commercial viability at today's prices. As a result we have now broadened our
targets to include much larger deal opportunities in a wider spread of
geography. Our increasing profile in Australia has begun to open up
possibilities both there and in South-east Asia. We expect the business
environment to remain challenging, and we will therefore remain prudent on
valuations, but we have funding available and we remain confident that
attractive deals can be delivered.
.
Consolidated Statement of Comprehensive Income
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | 6 months | | 6 months | | Year to |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | to 30 | | to 30 | | 31 |
| | | | | June | | June | | December |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | 2009 | | 2008 | | 2008 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | |(Unaudited) | |(Unaudited) | | (Audited) |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | Note | US$000 | | US$000 | | US$000 |
+---------------------------------+----------+-------------+--+-------------+--+------------+
| Continuing Operations | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Revenue | | | | 3,058 | | 8,747 | | 18,066 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Cost of sales | | 3 | | (3,396) | | (5,494) | | (13,364) |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Gross (loss)/profit | | | | (338) | | 3,253 | | 4,702 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Administrative expenses | | 4 | | (931) | | (1,935) | | (2,797) |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Operating (loss)/profit before | | (1,269) | | 1,318 | | 1,905 |
| impairment charge | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+------------+
| Impairment charge | | | | (546) | | - | | (1,131) |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Loss on sale of non-current | | | | (131) | | - | | - |
| assets | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Operating (loss)/profit | | | | (1,946) | | 1,318 | | 774 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Investment income - | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Gain on derivative financial | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| instruments | | | | 365 | | - | | 652 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Fair value through | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| profit and loss | | | | 122 | | - | | 1,771 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Interest on bank deposits | | | | 15 | | 2 | | 36 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Finance costs | | | | (393) | | - | | (449) |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| (Loss)/profit before tax | | | | (1,837) | | 1,320 | | 2,784 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Income tax credit/(expense) | | | | 117 | | (310) | | (385) |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| (Loss)/profit for the period from | (1,720) | | 1,010 | | 2,399 |
| continuing operations | | | | | |
+--------------------------------------------+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Other comprehensive income | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Exchange differences on | | | | | | | | |
| translating | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| foreign currency | | | | 345 | | 152 | | 35 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Total comprehensive income for the | | | | | | |
| period | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+------------+
| attributable to the equity holders of | | (1,375) | | 1,162 | | 2,434 |
| the parent | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| (Loss)/profit per share | | 5 | | US cents | | US cents | | US cents |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Basic earnings per share | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| from continuing operations | | | | (10.7) | | 6.3 | | 14.9 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| Diluted earnings per share | | | | | | | | |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
| from continuing operations | | | | (10.7) | | 5.9 | | 13.1 |
+---------------------------------+--+----+--+-------------+--+-------------+--+------------+
Consolidated Statement of Financial Position
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | 30 June | | 30 June | | 31 |
| | | | | | | | | December |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | 2009 | | 2008 | | 2008 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | |(Unaudited) | |(Unaudited) | | (Audited) |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | US$000 | | US$000 | | US$000 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | Note | | | | | |
+--------------------------------+---------+-------------+--+-------------+--+------------+
| | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| ASSETS | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Non-current assets | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Intangible assets | |6 | | 5,046 | | 3,457 | | 2,593 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Property, plant and equipment | |6 | | 4,141 | | 9,006 | | 6,229 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | 9,187 | | 12,463 | | 8,822 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Deferred tax assets | | | | 512 | | - | | 114 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Other non-current assets | | | | 319 | | - | | 549 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | 10,018 | | 12,463 | | 9,485 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Current assets | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Trade and other receivables | | | | 3,835 | | 2,872 | | 4,790 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Cash and cash equivalents | | | | 1,272 | | 1,889 | | 3,875 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | 5,107 | | 4,761 | | 8,665 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Total assets | | | | 15,125 | | 17,224 | | 18,150 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| LIABILITIES | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Current liabilities | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Trade and other payables | | | | (1,678) | | (1,299) | | (2,246) |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Current portion of long-term | | | | (1,539) | | - | | (2,320) |
| borrowings | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Current tax payable | | | | - | | (190) | | - |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | (3,217) | | (1,489) | | (4,566) |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Non-current liabilities | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Long-term borrowings | | | | (3,885) | | (7,634) | | (4,175) |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Long-term provisions | | | | (266) | | (316) | | (316) |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | (4,151) | | (7,950) | | (4,491) |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Total liabilities | | | | (7,368) | | (9,439) | | (9,057) |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| NET ASSETS | | | | 7,757 | | 7,785 | | 9,093 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| EQUITY | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Share capital | | | | 9,026 | | 9,026 | | 9,026 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Share premium | | | | 8,372 | | 8,372 | | 8,372 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Translation reserve | | | | 540 | | 312 | | 195 |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Profit and loss account | | | | (11,976) | | (11,645) | | (10,256) |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Other reserves - share based | | | | 1,795 | | 1,720 | | 1,756 |
| payments | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| | | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
| Total equity attributable to the | | | 7,757 | | 7,785 | | 9,093 |
| equity holders | | | | | | | |
+--------------------------------+--+---+--+-------------+--+-------------+--+------------+
Consolidated Statement of Changes in Equity
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | Share | | Share | |Translation | | Profit | | Other | | Total |
| |capital | |premium | | reserve | | and | |reserves | | |
| | | | | | | | loss | | | | |
| | | | | | | | account | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | US$000 | | US$000 | | US$000 | | US$000 | | US$000 | | US$000 |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Balance at 1 | 9,026 | | 8,372 | | 160 | | (12,655) | | 387 | | 5,290 |
| January 2008 | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Total comprehensive | - | | - | | - | | 1,162 | | - | | 1,162 |
| income | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Exchange | | | | | | | | | | | |
| differences | | | | | | | | | | | |
| on translating | | | | | | | | | | | |
| foreign | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| currency | - | | - | | 152 | | (152) | | - | | - |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Share based | - | | - | | - | | - | | 1,333 | | 1,333 |
| payments | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Balance at 30 June | 9,026 | | 8,372 | | 312 | | (11,645) | | 1,720 | | 7,785 |
| 2008 | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Total comprehensive | - | | - | | - | | 1,272 | | - | | 1,272 |
| income | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Exchange | | | | | | | | | | | |
| differences | | | | | | | | | | | |
| on translating | | | | | | | | | | | |
| foreign | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| currency | - | | - | | (117) | | 117 | | - | | - |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Share based | - | | - | | - | | - | | 36 | | 36 |
| payments | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Balance at 31 | 9,026 | | 8,372 | | 195 | | (10,256) | | 1,756 | | 9,093 |
| December 2008 | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Total comprehensive | - | | - | | - | | (1,375) | | - | | (1,375) |
| income | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Exchange | | | | | | | | | | | |
| differences | | | | | | | | | | | |
| on translating | | | | | | | | | | | |
| foreign | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| currency | - | | - | | 345 | | (345) | | - | | - |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Share based | - | | - | | - | | - | | 39 | | 39 |
| payments | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
| Balance at 30 June | 9,026 | | 8,372 | | 540 | | (11,976) | | 1,795 | | 7,757 |
| 2009 | | | | | | | | | | | |
+---------------------+---------+--+---------+--+-------------+--+----------+--+----------+--+---------+
Consolidated Statement of Cash Flows
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | 6 months | | 6 months | | Year to |
| | | | | | | 31 |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | to 30 | | to 30 | |December |
| | | June | | June | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | |(Unaudited) | |(Unaudited) | | Audited |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | US$000 | | US$000 | | US$000 |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Cash flows from operating activities - | | | | | | |
| (Note 7) | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Cash generated by operations | | 1,628 | | 1,783 | | 7,225 |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Interest received | | 15 | | 2 | | 36 |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Taxation paid | | (161) | | (120) | | (1,261) |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | 1,482 | | 1,665 | | 6,000 |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Cash flows from investing activities | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Expenditure on exploration and | | (2,999) | | (1,737) | | (2,004) |
| evaluation assets | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Expenditure on development and | | - | | (6,829) | | (7,067) |
| production assets | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Deposits with state authorities | | - | | - | | (161) |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | (2,999) | | (8,566) | | (9,232) |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Cash flows from financing activities | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Proceeds from sale of non-current | | 207 | | - | | - |
| assets | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Drawdown of bank loan | | - | | 8,458 | | 8,750 |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Repayment of bank loan | | (1,464) | | - | | (1,648) |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Debt arrangement fees | | - | | - | | (232) |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | (1,257) | | 8,458 | | 6,870 |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Net (decrease)/increase in cash and | | (2,774) | | 1,557 | | 3,638 |
| cash equivalents | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Opening cash and cash equivalents at | | 3,875 | | 295 | | 295 |
| beginning of year | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Exchange gains on cash and cash | | 171 | | 37 | | (58) |
| equivalents | | | | | | |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
| Closing cash and cash equivalents | | 1,272 | | 1,889 | | 3,875 |
+-----------------------------------------+--+-------------+--+-------------+--+----------+
Notes to the Consolidated Accounts
1. Nature of operations and general information
Meridian Petroleum plc and subsidiaries' (together 'the Group') principal
activities are the exploration for and the evaluation and production of oil and
gas.
Meridian Petroleum plc is the Group's ultimate parent company. It is
incorporated and domiciled in Great Britain. The Group has oil and gas
production and reserves in the USA. The Group also has exploration assets in
Australia. The address of Meridian Petroleum plc's registered office is 13
Regent Street, London, United Kingdom. Meridian Petroleum plc's shares are
listed on the Alternative Investment Market of the London Stock Exchange.
Meridian Petroleum plc's consolidated interim financial statements are presented
in US Dollars as the Group's primary transactions originate in US Dollars, these
being amongst other items gas sales and procurement of plant and drilling
services. The Parent Company's functional and presentation currency is UK
sterling.
These consolidated condensed interim financial statements have been approved for
issue by the Board of Directors on 23 September 2009.
The financial information for the year ended 31 December 2008 set out in this
interim report does not constitute statutory accounts as defined in Section 240
of the Companies Act 1985. The financial information for the six months ended 30
June 2009 and 30 June 2008 was neither audited nor reviewed by the auditors and
does not constitute statutory accounts as defined in section 435 of the
Companies Act 2006. The Group's statutory financial statements for the year
ended 31 December 2008 have been filed with the Registrar of Companies. The
auditors' report on those financial statements was unqualified.
2. Basis of preparation
These interim condensed consolidated financial statements are for the six months
ended 30 June 2009. They do not include all of the information required for full
annual financial statements and should be read in conjunction with the
consolidated financial statements of the Group for the year ended 31 December
2008.
These financial statements have been prepared under the historical cost
convention, except for derivative financial instruments which have been measured
at fair value. These condensed consolidated interim financial statements (the
interim financial statements) have been prepared in accordance with the
accounting policies adopted in the last annual financial statements for the year
to 31 December 2008 except for the adoption of IAS 1 Presentation of Financial
Statements (Revised 2007).
The adoption of IAS 1 (Revised 2007) does not affect the financial position or
profits of the Group but gives rise to additional disclosures. The measurement
and recognition of the Group's assets, liabilities, income and expenses is
unchanged. IAS 1 (Revised 2007) affects the presentation of owner changes in
equity and introduces a Statement Of Comprehensive Income. In accordance with
the new standard the entity does not present a Statement Of Recognised Income
and Expenses (SORIE), as was presented in the 2008 consolidated financial
statements. Furthermore, a Statement Of Changes In Equity is presented. The
accounting policies have been applied consistently throughout
the Group for the purposes of preparation of these condensed consolidated
interim financial statements.
Notes to the Consolidated Accounts
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | 6 months | | 6 months | | Year to |
| | | | | | | | 31 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | to 30 | | to 30 | |December |
| | | | June | | June | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | 2009 | | 2008 | | 2008 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | |(Unaudited) | |(Unaudited) | | Audited |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | US$000 | | US$000 | | US$000 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| 3. Cost of sales | | | | | | |
+-----------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Royalties, overrides and | | 850 | | 3,077 | | 6,604 |
| | other interests | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Depreciation | | 1,750 | | 1,377 | | 4,074 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Well operating costs | | 796 | | 1,040 | | 2,686 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | 3,396 | | 5,494 | | 13,364 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| 4. Administrative expenses | | | | | | |
+-----------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Share incentive costs | | 39 | | 509 | | 545 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Other | | 892 | | 1,426 | | 2,252 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | 931 | | 1,935 | | 2,797 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| 5. (Loss)/profit per share | | | | | | |
+-----------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | (Loss)/profit for the period | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | from continuing operations | | (1,720) | | 1,010 | | 2,399 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | Number | | Number | | Number |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | '000 | | '000 | | '000 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Weighted average number | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | of shares in issue | | 16,094 | | 16,094 | | 16,093 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Dilutive effect of share | | - | | 960 | | 1,359 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | options | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Dilutive effect of share | | - | | 74 | | 830 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | warrants | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | 16,094 | | 17,128 | | 18,282 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | (Loss)/profit per share | | US cents | | US cents | | US cents |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Basic | | (10.7) | | 6.3 | | 14.9 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | Diluted | | (10.7) | | 5.9 | | 13.1 |
+----+------------------------------+--+-------------+--+-------------+--+----------+
| | | | | | | | |
+----+------------------------------+--+-------------+--+-------------+--+----------+
Notes to the Consolidated Accounts
+--+----------------------------------+--+------------+--+-----------+--+---------+
| 6. Non-current assets | | | | | | |
+-------------------------------------+--+------------+--+-----------+--+---------+
| | | | | | Property | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | |Intangible | | Plant | | Total |
| | | | | | and | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | | | |Equipment | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | | US$000 | | US$000 | | US$000 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Cost | | | | | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | At 1 January 2008 | | 1,720 | | 10,046 | | 11,766 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Additions | | 1,737 | | 7,051 | | 8,788 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | At 30 June 2008 | | 3,457 | | 17,097 | | 20,554 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Additions | | 267 | | 16 | | 283 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | At 31 December 2008 | | 3,724 | | 17,113 | | 20,837 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Additions | | 2,999 | | - | | 2,999 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Disposals | | - | | (4,064) | | (4,064) |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | At 30 June 2009 | | 6,723 | | 13,049 | | 19,772 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | | | | | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Depreciation/Impairment | | | | | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | At 1 January 2008 | | - | | 6,714 | | 6,714 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Charge for the period | | | | 1,377 | | 1,377 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | At 30 June 2008 | | - | | 8,091 | | 8,091 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Charge for the period | | 1,131 | | 2,793 | | 3,924 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | At 31 December 2008 | | 1,131 | | 10,884 | | 12,015 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Charge for the period | | 546 | | 1,750 | | 2,296 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Disposals | | - | | (3,726) | | (3,726) |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | At 30 June 2009 | | 1,677 | | 8,908 | | 10,585 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | | | | | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | | | | | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | | | | | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Net Book value 30 June 2009 | | 5,046 | | 4,141 | | 9,187 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | | | | | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Net Book value 30 June 2008 | | 3,457 | | 9,006 | | 12,463 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | | | | | | | |
+--+----------------------------------+--+------------+--+-----------+--+---------+
| | Net Book value 31 December 2008 | | 2,593 | | 6,229 | | 8,822 |
+--+----------------------------------+--+------------+--+-----------+--+---------+
Notes to the Consolidated Accounts
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| 7. Reconciliation of operating profit to net cash outflow from | | |
+-----------------------------------------------------------------------+--+-------------+
| operating activities | | | | | | |
+-------------------------------------+--+-------------+--+-------------+--+-------------+
| | | | 6 months | | 6 months | | Year to |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | | | to 30 | | to 30 | |31 December |
| | | | June | | June | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | | | 2009 | | 2008 | | 2008 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | | |(Unaudited) | |(Unaudited) | | Audited |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | | | US$000 | | US$000 | | US$000 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| (Loss)/profit from | | | | | | |
+-------------------------------------+--+-------------+--+-------------+--+-------------+
| operations before taxation | | (1,837) | | 1,320 | | 2,784 |
+-------------------------------------+--+-------------+--+-------------+--+-------------+
| | Finance costs | | 378 | | (2) | | 413 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | Depreciation and impairment of | | | | | |
| | property, | | | | | |
+--+-------------------------------------+-------------+--+-------------+--+-------------+
| | plant and equipment | | 1,750 | | 1,377 | | 4,170 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | Amortisation of intangible | | 546 | | - | | 1,131 |
| | assets | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | Loss on sale of non-current | | 131 | | - | | - |
| | assets | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | Provision for decommissioning | | (50) | | - | | 221 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | Share based payments | | 39 | | 509 | | 545 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | Fair value through profit and | | (122) | | - | | (1,771) |
| | loss on derivative financial | | | | | | |
| | instruments | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | Foreign exchange difference | | 246 | | 101 | | 85 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| Operating cash flows before | | | | | | |
| movements | | | | | | |
+-------------------------------------+--+-------------+--+-------------+--+-------------+
| in working capital | | 1,081 | | 3,305 | | 7,578 |
+-------------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | Decrease/(increase) in | | 1,099 | | (2,316) | | (2,130) |
| | receivables | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | (Decrease)/increase in payables | | (552) | | 794 | | 1,777 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| | | | | | | | |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
| Net cash generated by | | | | | | |
+-------------------------------------+--+-------------+--+-------------+--+-------------+
| operating activities | | 1,628 | | 1,783 | | 7,225 |
+--+----------------------------------+--+-------------+--+-------------+--+-------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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