TIDMOHM
RNS Number : 5902K
Offshore Hydrocarbon Mapping PLC
22 April 2010
22 April 2010
Offshore Hydrocarbon Mapping plc ("OHM")
Interim Results for six months ended 28 February 2010
Offshore Hydrocarbon Mapping plc, the provider of remote electromagnetic sensing
services designed to detect the presence of offshore oil and gas (CSEM), and of
integrated CSEM, Seismic and Rock Physics analysis, today announces its interim
results for the six months ended 28 February 2010.
· First half revenues adversely impacted by delayed CSEM projects but growing
order backlog will drive a second half improvement
· Future vessel charter liabilities of $45 million exchanged for equity
· GBP2.5 million raised in placing of new ordinary shares during the period
· GBP3.36 million conditionally raised post period end
· OHM leads way in integration of CSEM with seismic and well data
Dave Pratt, Offshore Hydrocarbon Mapping's Chairman, said:
"We are beginning to see a renewed upward trend in activity for both our CSEM
and Rock Solid Images business lines. At the same time we have made advances in
the integration of CSEM, seismic and well data which positions the group well
for winning further business.
We are grateful for the support of shareholders in providing further funds for
not only working capital but to allow us to move ahead rapidly in development of
a next generation joint seismic and CSEM interpretation system."
+--------------------------------------+--------------------------------------+
| Offshore Hydrocarbon Mapping plc | www.ohmsurveys.com |
+--------------------------------------+--------------------------------------+
| Richard Cooper - Chief Executive | 0870 429 6581 |
| Officer | |
+--------------------------------------+--------------------------------------+
| Bob Auckland - Finance Director | 0870 429 6581 |
+--------------------------------------+--------------------------------------+
| | |
+--------------------------------------+--------------------------------------+
| KBC Peel Hunt (NOMAD and Broker) | |
+--------------------------------------+--------------------------------------+
| Julian Blunt/David Anderson | 020 7418 8900 |
+--------------------------------------+--------------------------------------+
| | |
+--------------------------------------+--------------------------------------+
| Aquila Financial Ltd (PR) | |
+--------------------------------------+--------------------------------------+
| Peter Reilly | 07881 920542 |
+--------------------------------------+--------------------------------------+
| | |
+--------------------------------------+--------------------------------------+
Chairman's Statement
The OHM Group has always believed that the future of CSEM lies with the careful
integration of these data with seismic, the remote sensing geophysical tool of
choice for oil and gas companies. Following our acquisition of Rock Solid Images
in 2007, OHM leads the way in this integration effort, through its WISE (Well
driven Integration of Seismic and Electromagnetics) products and services and
the industry research consortium we lead. The realisation that integration of
data sets creates significant value is becoming well accepted in the industry
and our expertise in this area would appear to be a very positive
differentiating factor for our clients in considering their choice of
contractor.
Our leadership in the CSEM industry has been further recognised by the
appointment of our Chief Technology Officer, Dr Lucy MacGregor as the 2011
Honorary Lecturer to Europe by the industry's leading body, the Society of
Exploration Geophysicists. The SEG Honorary lecture program is designed to
facilitate lectures from prominent geophysicists to SEG Sections, universities
and other interested groups throughout a region. This role will see Lucy
travelling throughout Europe to present the technical and commercial benefits of
integrated seismic, well log and CSEM data. This should significantly help with
the adoption of the technology.
Group revenues amounted to GBP3.25 million in the six months to 28 February 2010
compared to GBP6.2 million for the six months to 28 February 2009. The Group is
expected to have a much stronger second half than in the last financial year
when total revenue fell back to GBP3.0 million in the six months to 31 August
2009. The pre-tax loss for the six months to 28 February 2010 of GBP6.2 million
includes a GBP2.1 million one-off non cash charge on conversion of vessel
charter commitments into shares.
Although the Group's performance in the first six months of our FY2010 year has
been severely impacted by recent challenges in our industrial environment, we
have deliberately adopted a long term approach to re-building shareholder value
and have achieved some very significant milestones along this path.
Important steps we have now successfully completed include:
· Integration of Rock Solid Images which was acquired in 2007, which
provides an important seismic based revenue stream independent of our CSEM
business, and also provides key technology for our WISE integration strategy;
· Conclusion, early in the current financial year, of an important
transaction with the owner of our
chartered vessels, OHM Express and OHM
Leader. In this transaction, we exchanged $45 million of future charter
liabilities for equity, thus significantly reducing our ongoing fixed costs and
our working capital requirements. As we pointed out in the shareholders'
circular issued at the time, we are obliged to recognise a charge related to the
equity issued in this transaction. This extraordinary, non cash charge of GBP2.1
million is included in these half year accounts. This transaction provides us
with a very low fixed-cost base, unique in the industry, as well as a key
partner for the development of our marine capabilities; and
· Raising of additional capital in FY2009 and FY2010 through equity and debt
instruments to ensure
availability of funds to allow OHM to develop and
deliver on its long term plans.
We have recently announced an important two stage round of additional
fund-raising, which, subject to shareholder approval of the second stage, will
provide a further GBP3.36 million in total to the Group of which we have already
received GBP556,000. As part of this funding, we welcome Sector Asset Management
to our investor list. Sector is a sophisticated Norwegian private equity house,
with a long track record of successful investments in all areas of the oil and
gas industry.
As well as providing working capital, these funds allow us to move ahead rapidly
in development of a next generation joint seismic and CSEM interpretation
system, advancing our WISE strategy. In addition to the steps we have taken to
bolster our financial position, we are pleased to note some signs of industrial
optimism.
Our order backlog at Rock Solid Images continues to remain at record levels
bolstered by our reputation for excellence grown from significant successes in
the complex emerging transform margin play offshore West Africa and from
innovative solutions which guide well placement for optimum production in the
burgeoning shale plays in North America. New software tools which will
significantly enhance both our speed of throughput and our ability to scrutinise
large seismic data volumes are in the final testing stages and should come into
full production in the next few months, increasing the volumes of data we can
analyse every month while further enhancing the quality of our services.
Bid levels, particularly for our marine CSEM services, are substantially higher
than this time last year. We have recently been awarded several CSEM acquisition
projects in the Asia Pacific market, with additional awards in the North Sea.
Some of these projects have been won in competitive tender and this success
underlines the competiveness of our new cost structure and the value of our WISE
integration capabilities. Other projects have been directly awarded by
discerning clients who are becoming more and more sophisticated in their
understanding of the issues and value of CSEM data. We now have three CSEM
acquisition projects in backlog, and expect to add more as the year progresses.
Although at present we remain cautious on financial performance, successful
execution of these projects should drive improved revenues in our second half
year and the upward trends we are observing in planned CSEM work gives us
growing confidence for the future,
David Pratt
Chairman
Offshore Hydrocarbon Mapping plc
Condensed Consolidated Statement of Comprehensive Income
For the six months ended 28 February 2010
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| | Six | | | | |
| | months to | | Six | | Year to |
| Note | 28 | | months to | | 31 August |
| | February | | 28 | | 2009 |
| | 2010 | | February | | (Audited) |
| | (Unaudited) | | 2009 | | GBP'000 |
| | GBP'000 | | (Unaudited) | | |
| | | | GBP'000 | | |
+--------------------------------------+ +-------------+ +-----------+ +
| | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| | | | | | | |
| Revenue | | 3,251 | | 6,221 | | 9,227 |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Cost of sales | | 4,823 | | 8,569 | | 12,238 |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Gross loss | 3 | (1,572) | | (2,348) | | (3,011) |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Administrative | | 2,448 | | 3,353 | | 5,770 |
| expenses | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Charge on conversion | | | | | | |
| of vessel charter | 4 | 2,140 | | - | | - |
| commitments into | | | | | | |
| shares | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Group operating loss | | ( 6,160) | | (5,701) | | (8,781) |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Finance income | | 1 | | 73 | | 81 |
| Finance costs | | ( 23) | | (8) | | (11) |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Loss before taxation | | ( 6,182) | | (5,636) | | (8,711) |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Income tax | 5 | 153 | | (162) | | (121) |
| credit/(expense) | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Loss for the period | | | | | | |
| attributable to equity | | ( 6,029) | | (5,798) | | (8,832) |
| holders of the parent | | | | | | |
| company | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Other comprehensive | | | | | | |
| income: | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Exchange differences | | | | | | |
| on translating foreign | | 1,154 | | 3,783 | | 1,555 |
| operations | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Other comprehensive | | | | | | |
| income and expense for | | | | | | |
| the period, net of tax | | 1,154 | | 3,783 | | 1,555 |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Total comprehensive | | | | | | |
| income for the period | | | | | | |
| attributable to equity | | (4,875) | | (2,015) | | (7,277) |
| holders of the parent | | | | | | |
| company | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| | | | | | | |
| | | | | | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
| Loss per ordinary | | | | | | |
| share | 6 | (8.82) p | | (13.42) | | (20.41) p |
| Basic | 6 | (8.82) | | p | | (20.41) p |
| Diluted | | p | | (13.42) p | | |
+------------------------+-------------+-------------+-------------+-------------+-----------+-----------+
No dividends were declared in any period disclosed.
Offshore Hydrocarbon Mapping plc
Condensed Consolidated Balance Sheet
At 28 February 2010
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| | | | At 28 | | At 28 | | At 31 |
| | | | February | | February | | August |
| | | | 2010 | | 2009 | | 2009 |
| | Note | | (Unaudited) | | (Unaudited) | | (Audited) |
| | | | GBP'000 | | GBP'000 | | GBP'000 |
| Assets | | | | | | | |
| Non-current assets | | | | | | | |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| Intangible assets - goodwill | | | 13,557 | | 14,345 | | 12,636 |
| | | | 2,629 | | 3,325 | | 2,679 |
| | | | 2,632 | | 2,926 | | 2,575 |
| - multi client data library | | | 1,144 | | 1,193 | | 1,101 |
| | | | 157 | | 189 | | 153 |
| - software | 7 | | | | | | |
| | | | | | | | |
| - patent costs | | | | | | | |
| | | | | | | | |
| - consortium fees | | | | | | | |
+ + + +-------------------------------+ +-------------+----------+--------------+
| | | | 20,119 | | 21,978 | | 19,144 |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| Plant and equipment | 8 | | 3,454 | | 4,821 | | 4,283 |
+ + + +-------------------------------+ +-------------+----------+--------------+
| | | | 23,573 | | 26,799 | | 23,427 |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| Current assets | | | | | | | |
| Inventories | | | 612 | | 642 | | 607 |
| Trade and other receivables | 9 | | 1,778 | | 1,672 | | 749 |
| Cash and cash equivalents | 10 | | 1,381 | | 2,297 | | 1,043 |
| | | | | | | | |
| | | | | | | | |
| Total assets | | | | | | | |
+ + + +-------------------------------+ +-------------+----------+--------------+
| | | | 3,771 | | 4,611 | | 2,399 |
+ + + +-------------------------------+ +-------------+----------+--------------+
| | | | 27,344 | | 31,410 | | 25,826 |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| | | | | | | | |
| Liabilities | | | | | | | |
| Current liabilities | | | | | | | |
| Trade and other payables | 11 | | 3,048 | | 3,128 | | 2,941 |
| Borrowings | 12 | | 333 | | - | | - |
| Current tax liabilities | | | 49 | | 92 | | 48 |
| Finance leases | | | 26 | | 28 | | 9 |
| | | | | | | | |
+ + + +-------------------------------+ +-------------+----------+--------------+
| | | | 3,456 | | 3,248 | | 2,998 |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| Non current liabilities | | | | | | | |
| Borrowings | 12 | | 999 | | - | | - |
| Deferred tax liabilities | | | 765 | | 899 | | 736 |
| Finance leases | | | 57 | | 1 | | - |
| | | | | | | | |
| | | | | | | | |
+ + + +-------------------------------+ +-------------+----------+--------------+
| | | | 1,821 | | 900 | | 736 |
| | | | | | | | |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| Total liabilities | | | 5,277 | | 4,148 | | 3,734 |
| | | | | | | | |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| | | | | | | | |
| Net assets | | | 22,067 | | 27,262 | | 22,092 |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
| | | | | | | | |
| Shareholders' equity | | | | | | | |
| Share capital | 13 | | 695 | | 434 | | 434 |
| Share premium | | | 41,062 | | 36,668 | | 36,668 |
| Share based payments reserve | | | 1,517 | | 1,230 | | 1,322 |
| Merger reserve | | | 5,355 | | 5,355 | | 5,355 |
| Retained earnings | | | (30,560) | | (21,497) | | (24,531) |
| Cumulative translation | | | 3,998 | | 5,072 | | 2,844 |
| reserve | | | | | | | |
| | | | | | | | |
| Total shareholders' equity | | | | | | | |
+ + + +-------------------------------+ +-------------+----------+--------------+
| | | | | | | | |
| | | | 22,067 | | 27,262 | | 22,092 |
+-------------------------------+--------+----------+-------------------------------+----------+-------------+----------+--------------+
Offshore Hydrocarbon Mapping plc
Condensed Consolidated Statement of Changes of Equity
For the six months ended 28 February 2010
Attributable to equity holders of the parent
company
+---------------+---------+----------+----------+-------+----------+----------+-------+----------+----------+-------+----------+----------+-------+----------+----------+-------+----------+----------+-----------+
| | Share | Share premium | Share based payments | Merger | Retained earnings | Translation | Total equity |
| | capital | account | reserve | Reserve | | reserve | attributable to |
| | | | | | | | equity holders |
| | | | | | | | of the parent |
+---------------+---------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+---------------------------------+
| | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) |
+---------------+--------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+-----------------------------+----------------------+
| | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| At 1 | 432 | | 36,668 | | 1,107 | | 5,355 | | (15,699) | | 1,289 | | 29,152 |
| September | | | | | | | | | | | | | |
| 2008 | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
| Total | | | | | | | | | | | | | |
| comprehensive | - | | - | | - | | - | | (5,798) | | 3,783 | | (2,015) |
| income for | | | | | | | | | | | | | |
| the period | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
| Share based | - | | - | | 123 | | - | | - | | - | | 123 |
| payments | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
| Share issues | 2 | | - | | - | | - | | - | | - | | 2 |
| | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| At 28 | 434 | | 36,668 | | 1,230 | | 5,355 | | (21,497) | | 5,072 | | 27,262 |
| February | | | | | | | | | | | | | |
| 2009 | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
| Total | | | | | | | | | | | | | |
| comprehensive | - | | - | | - | | - | | (3,034) | | (2,228) | | (5,262) |
| income for | | | | | | | | | | | | | |
| the period | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
| Share based | - | | - | | 92 | | - | | - | | - | | 92 |
| payments | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| At 31 August | 434 | | 36,668 | | 1,322 | | 5,355 | | (24,531) | | 2,844 | | 22,092 |
| 2009 | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
| Total | | | | | | | | | | | | | |
| comprehensive | - | | - | | - | | - | | (6,029) | | 1,154 | | (4,875) |
| income for | | | | | | | | | | | | | |
| the period | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
| Share based | - | | - | | 195 | | - | | - | | - | | 195 |
| payments | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
| Share issues | 261 | | 4,394 | | - | | - | | - | | - | | 4,655 |
| | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| At 28 | 695 | | 41,062 | | 1,517 | | 5,355 | | (30,560) | | 3,998 | | 22,067 |
| February | | | | | | | | | | | | | |
| 2010 | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | |
+---------------+--------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+------------------+----------+-----------+
| | | | | | | | | | | | | | | | | | | | |
+---------------+---------+----------+----------+-------+----------+----------+-------+----------+----------+-------+----------+----------+-------+----------+----------+-------+----------+----------+-----------+
The movements in the share based payments reserve represents the fair value of
the shares to be awarded under the Group's Share Option Plans and Share Award
and Annual Bonus Plans together with treasury share transactions which satisfy
these obligations. Corresponding amounts for the share based charges are
included in the loss for the relevant periods with the consequence that the
Company's accounting for share based payments has no net impact on total equity.
The merger reserve represents the excess of the fair value of the shares issued
over the nominal value which is recorded when shares are issued in exchange for
shares to effect an investment in an undertaking.
Retained earnings comprise net gains and losses recognised in the Condensed
Consolidated Statement of Comprehensive Income. The translation reserve
comprises gains and losses arising on the translation of the net assets of
overseas operations.
Offshore Hydrocarbon Mapping plc
Condensed Consolidated Cashflow Statement
For the six months ended 28 February 2010
+---------------------+--------+--------+-------------+--------+-------------+--------+---------+--------+
| | | | Six | | Six | | Year to 31 |
| | | | months | | months | | August |
| | | | to | | to | | 2009 |
| | Note | | 28 | | 28 | | (Audited) |
| | | | February | | February | | GBP'000 |
| | | | 2010 | | 2009 | | |
| | | | (Unaudited) | | (Unaudited) | | |
| | | | GBP'000 | | GBP'000 | | |
| Cash | | | | | | | |
| flow | | | | | | | (8,711) |
| from | | | | | | | |
| operating | | | | | | | 947 |
| activities | | | ( 6,182) | | (5,636) | | 1,345 |
| Loss | | | | | | | 215 |
| before | | | 945 | | 440 | | 53 |
| taxation | | | 298 | | 618 | | 35 |
| Adjustments | | | 195 | | 123 | | |
| for: | | | - | | 53 | | - |
| Depreciation | | | 75 | | 36 | | (81) |
| of tangible | | | | | | | |
| fixed assets | | | 2,140 | | - | | |
| Amortisation | | | ( 1) | | (73) | | |
| of | | | | | | | |
| intangible | | | | | | | |
| fixed assets | | | | | | | |
| Share based | | | | | | | |
| payments | | | | | | | |
| charge | | | | | | | |
| Intangible | | | | | | | |
| asset | | | | | | | |
| transfer | | | | | | | |
| from balance | | | | | | | |
| sheet | | | | | | | |
| Loss on | | | | | | | |
| disposal of | | | | | | | |
| plant and | | | | | | | |
| equipment | | | | | | | |
| Charge on | | | | | | | |
| conversion | | | | | | | |
| of vessel | | | | | | | |
| charter | | | | | | | |
| commitments | | | | | | | |
| into shares | | | | | | | |
| Finance | | | | | | | |
| income | | | | | | | |
| | | | | | | | |
| Operating | | | | | | | |
| cash flow | | | | | | | |
| before | | | | | | | |
| changes in | | | | | | | |
| working | | | | | | | |
| capital and | | | | | | | |
| provisions | | | | | | | |
+ + + +-------------+--------+-------------+--------+------------------+
| | | | ( 2,530) | | (4,439) | | (6,197) |
+---------------------+--------+--------+-------------+--------+-------------+--------+------------------+
| (Increase)/decrease | | | (5) | | 103 | | 138 |
| in inventories | | | (1,029) | | 2,247 | | 3,170 |
| (Increase)/decrease | | | 261 | | (3,241) | | (3,577) |
| in trade and other | | | | | | | |
| receivables | | | | | | | |
| Increase/(decrease) | | | | | | | |
| in trade and other | | | | | | | |
| payables | | | | | | | |
| | | | | | | | |
| Cash absorbed by | | | | | | | |
| operations | | | | | | | |
+ + + +-------------+--------+-------------+--------+------------------+
| | | | | | | | |
| | | | (3,303) | | (5,330) | | (6,466) |
+---------------------+--------+--------+-------------+--------+-------------+--------+------------------+
| | | | | | | | |
| Foreign | | | - | | - | | - |
| taxes | | | | | | | |
| paid | | | | | | | |
+---------------------+--------+--------+-------------+--------+-------------+--------+------------------+
| Net | | | (3,303) | | (5,330) | | (6,466) |
| cash | | | | | | | |
| flows | | | | | | | |
| used | | | | | | | |
| in | | | | | | | |
| operating | | | | | | | |
| activities | | | | | | | |
+---------------------+--------+--------+-------------+--------+-------------+--------+------------------+
| | | | | | | | |
| Cash | | | | | | | |
| flows | | | - | | (12) | | (59) |
| from | | | ( 32) | | (179) | | (294) |
| investing | | | ( 31) | | (106) | | (124) |
| activities | | | ( 89) | | (326) | | (200) |
| Payments | | | - | | 11 | | 11 |
| to acquire | | | 1 | | 73 | | 81 |
| multi | | | | | | | |
| -client | | | | | | | |
| data | | | | | | | |
| library | | | | | | | |
| Payments | | | | | | | |
| to acquire | | | | | | | |
| software | | | | | | | |
| Payments | | | | | | | |
| to acquire | | | | | | | |
| patents | | | | | | | |
| Payments | | | | | | | |
| to acquire | | | | | | | |
| plant and | | | | | | | |
| equipment | | | | | | | |
| Proceeds | | | | | | | |
| from sale | | | | | | | |
| of plant | | | | | | | |
| and | | | | | | | |
| equipment | | | | | | | |
| Interest | | | | | | | |
| received | | | | | | | |
| Net cash | | | | | | | |
| used in | | | | | | | |
| investing | | | | | | | |
| activities | | | | | | | |
+ + + +-------------+--------+-------------+--------+------------------+
| | | | ( 151) | | (539) | | (585) |
+---------------------+--------+--------+-------------+--------+-------------+--------+------------------+
| | | | | | | | |
| Cash | | | | | | | |
| flows | | | 2,515 | | 2 | | 2 |
| from | | | 1,332 | | - | | - |
| financing | | | (4) | | (21) | | (41) |
| activities | | | | | | | |
| Proceeds | | | | | | | |
| from issue | | | | | | | |
| of | | | | | | | |
| ordinary | | | | | | | |
| share | | | | | | | |
| capital | | | | | | | |
| Borrowings | | | | | | | |
| under $2 | | | | | | | |
| million | | | | | | | |
| credit | | | | | | | |
| line | | | | | | | |
| Capital | | | | | | | |
| lease | | | | | | | |
| obligation | | | | | | | |
| | | | | | | | |
| Net cash | | | | | | | |
| from/(used | | | | | | | |
| in) | | | | | | | |
| financing | | | | | | | |
| activitiesNet | | | | | | | |
| cash | | | | | | | |
| from/(used | | | | | | | |
| in) financing | | | | | | | |
| activities | | | | | | | |
+ + + +-------------+--------+-------------+--------+------------------+
| | | | 3,843 | | (19) | | (39) |
+---------------------+--------+--------+-------------+--------+-------------+--------+------------------+
| | | | | | | | | |
| | | | | | | | | |
| Net | | | | | | | | |
| increase/(decrease) | | | 389 | | (5,888) | | (7,090) | |
| in cash and cash | | | | | | | | |
| equivalents | | | | | | | | |
+---------------------+--------+--------+-------------+--------+-------------+--------+---------+--------+
| | | | | | | | | |
| Opening | | | 1,043 | | 8,222 | | 8,222 | |
| cash | | | | | | | | |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
+---------------------+--------+--------+-------------+--------+-------------+--------+---------+--------+
| | | | | | | | | |
| Effect | | | (51 ) | | (37) | | (89) | |
| of | | | | | | | | |
| foreign | | | | | | | | |
| exchange | | | | | | | | |
| rate | | | | | | | | |
| changes | | | | | | | | |
+---------------------+--------+--------+-------------+--------+-------------+--------+---------+--------+
| | | | | | | | | |
| Closing | 10 | | 1,381 | | 2,297 | | 1,043 | |
| cash | | | | | | | | |
| and | | | | | | | | |
| cash | | | | | | | | |
| equivalents | | | | | | | | |
+---------------------+--------+--------+-------------+--------+-------------+--------+---------+--------+
Offshore Hydrocarbon Mapping plc
Notes to the Condensed Interim Financial Statements
For the six months ended 28 February 2010
1 Basis of preparation and accounting policies
The interim condensed financial statements for the six months ended 28 February
2010 have been prepared using the recognition and measurement principles of IFRS
and in accordance with IAS 34 "Interim Financial Reporting" as adopted by the
European Union.
The accounting policies used in the preparation of these condensed financial
statements are set out in the statutory financial statements for the year ended
31 August 2009. There have been no changes in accounting policies so these
policies are expected to be applicable at 31 August 2010 except as stated below.
Standards and amendments to standards applicable this period and which have
impacted on the Condensed Interim Financial Statements and will affect the Group
Financial Statements
IAS 1 Presentation of Financial Statements (2007) became effective for the Group
this year. As a result, the Group presents in the consolidated statement of
changes in equity all owner changes in equity, whereas all non-owner changes in
equity are presented in the condensed consolidated statement of comprehensive
income.
As permitted under the revised IAS 1, the Group has elected to present one
statement comprising the condensed consolidated statement of comprehensive
income. Comparative information has been re-presented on this basis.
IFRS 8 'Operating Segments' became effective for the group this year and has
replaced IAS 14 'Segmental Reporting' and the amendment to IFRS 8 from the
Improvements to IFRSs in April 2009 has been adopted early.
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision maker has been identified as the Board of Directors. Management has
determined the operating segments based on the internal reports used by the
Board of Directors and the measures of segment revenues, profits or losses are
based on the measures reviewed internally in those reports.
Standards, amendments to standards and interpretations applicable this period
but which have had no impact on the Condensed Interim Financial Statements and
are not expected to significantly affect the Group Financial Statements
The following standards, amendments to standards and new Interpretations became
effective this year but had no impact:
· Amendments to IAS 1 and IAS 32: Financial Instruments (Puttable
Instruments and Obligations Arising on Liquidation)
· Amendments to IAS 27: Cost of an investment in a subsidiary,
jointly-controlled entity or associate
· IAS 23: Borrowing Costs (Revised)
· Amendments to IFRS 2: Share-based Payment (Vesting Conditions and
Cancellations)
· Improvements to IFRSs (May 2008)
· IFRS 3 (Revised 2008): Business Combinations
· Amendments to IAS 27: Consolidated and Separate Financial Statements
· Amendment to IAS 39: Financial Instruments - Recognition and Measurement
- Eligible Hedging Items
· IFRIC 12: Service Concession Arrangements
· IFRIC 15: Agreements for the Construction of Real Estate
· IFRIC 16: Hedges of a Net Investment in a Foreign Operation
· IFRIC 17: Distributions of Non-Cash Assets to Owners
· IFRIC 18: Transfer of Assets from Customers
· Embedded Derivatives - amendments to IFRIC 9 and IAS 39
Standards, amendments to standards and endorsed for use by the European Union
that, with the exception of the amendment to IFRS 8, have not been adopted
early in respect of the year ended 31 August 2010
+----------------------+-------------------+-------------------------------+
| Title | Implementation | Anticipated effect on the |
| | | Group |
+----------------------+-------------------+-------------------------------+
| Improvements to | Annual periods | Amendment to IFRS 8 has been |
| IFRSs (April 2009) | beginning on or | adopted early otherwise no |
| | after 1 January | effect on Group anticipated |
| | 2010 | |
+----------------------+-------------------+-------------------------------+
| Amendment to IAS 32: | Annual periods | None |
| Classification of | beginning on or | |
| Rights Issues | after 1 February | |
| | 2010 | |
+----------------------+-------------------+-------------------------------+
| Amendments to IFRS | Annual periods | None |
| 2: Group | beginning on or | |
| Cash-settled share | after 1 January | |
| based payment | 2010 | |
| transactions. | | |
+----------------------+-------------------+-------------------------------+
Standards, amendments to standards not as yet endorsed for use by the European
Union and as such have not been adopted early:
+---------------------+--------------------+-------------------------------+
| IFRS 9: Financial | Annual periods | Management considering |
| Instruments | beginning on or | future impact |
| | after 1 January | |
| | 2013 | |
+---------------------+--------------------+-------------------------------+
| IAS 24 (Revised in | Annual periods | None |
| 2009): Related | beginning on or | |
| Party Disclosures | after 1 January | |
| | 2011 | |
+---------------------+--------------------+-------------------------------+
| IFRIC 19: | Annual periods | Management considering |
| Extinguishing | beginning on or | future impact |
| Financial | after 1 July 2010 | |
| Liabilities with | | |
| Equity Instruments | | |
+---------------------+--------------------+-------------------------------+
The directors anticipate that the adoption of these Standards and
Interpretations in future periods will have no material impact on the financial
statements of the Group except for additional disclosures when the relevant
standards come into effect.
The results for the half-year are unaudited. The financial information in this
interim announcement does not constitute statutory accounts within the meaning
of Section s434 of the Companies Act 2006.
The comparative financial information for the year ended 31 August 2009 does not
constitute statutory accounts within the meaning of Section 434 of the Companies
Act 2006. The statutory accounts of Offshore Hydrocarbon Mapping plc for the
year ended 31 August 2009 have been reported on by the Company's auditors and
have been delivered to the Registrar of Companies.
The report of the
auditors was unqualified, and did not include references to any matters to which
the auditors drew attention by way of emphasis without qualifying their report
and did not contain statements under Section 498 of the Companies Act 2006.
2 Seasonality of operations
Due to the seasonal nature of the Controlled Source ElectroMagnetic (CSEM)
business, higher revenues and operating profits are usually expected in the
second half of the year than in the first six months. Higher revenues during the
summer period are mainly attributed to the increase in demand for data
acquisition services in the North Sea and North Atlantic where there is a higher
level of adoption of the CSEM technology.
3 Segmental reporting
At 28 February 2010 and 31 August 2009 the Group is organised into three
reportable operating segments - Controlled Source ElectroMagnetic (CSEM)
business, Well-driven Integration of Seismic and Electromagnetics (WISE)
business and the Well and Surface Seismic (WSS) business.
Controlled Source ElectroMagnetic (CSEM)
OHM provides offshore CSEM acquisition and data processing services. CSEM
surveying can detect the presence of resistive features in the earth which when
carefully interpreted can provide evidence for and information on hydrocarbon
accumulations prior to drilling. The Group has not divided financial
information for its CSEM activities into further different segments as it offers
only one CSEM surveying product range to its clients, who are international and
state owned oil and gas companies.
The risk and profitability of the Group's operations is similar in different
geographical regions of the world. Most of the Group's plant and machinery is
deployed on survey vessels and, as the CSEM surveys are executed worldwide with
equipment often being relocated to meet capacity requirements, the Group is not
able to allocate these assets specifically to any geographical region.
Well-driven Integration of Seismic and Electromagnetics (WISE)
The value of geophysical data and interpretations derived from them is
significantly increased when different data types are integrated to utilise the
strengths of each. The Group's WISE interpretation approaches use available
seismic, CSEM and well log data to add value to interpretations at all stages of
the oil field life cycle, by providing quantitative measurements of rock and
fluid properties.
The directors view the WISE product range and focus as being critical to the
future success of the Group and are allocating resources to this business
segment and monitoring performance accordingly.
Well and Surface Seismic (WSS)
The Group's subsidiary Rock Solid Images (RSI), is the industry leader in the
integration of fundamental rock physics with well data and surface seismic in
order to interpret geophysical signatures in terms of reservoir properties.
Careful integration of these data can lead to quantitative measurements of rock
and fluid properties such as porosity and hydrocarbon saturation.
The following table presents revenue, profit and loss information regarding the
Group's three operating segments for the periods ended 28 February 2010, 28
February 2009 and the year ended 31 August 2009. The comparatives are restated
for consistency of presentation.
+----------+----------+---------+----------+----------+---------+---------+--+
| | Revenues | Gross profit/(loss) |
+ +-------------------------------+---------------------------------+
| | Six | Six | Year | Six | Six | Year | |
| | months | months | ended | months | months | ended | |
| | to | to | 31 | to | to | 31 | |
| | 28 | 28 | August | 28 | 28 | August | |
| | February | February | 2009 | February | February | 2009 | |
| | 2010 | 2009 | | 2010 | 2009 | | |
| | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | GBP'000 | |
| | | | | | | | |
+----------+----------+----------+---------+----------+----------+---------+---------+
| CSEM | 1,562 | 3,737 | 4,486 | (2,102) | (3,567) | (5,216) | |
+----------+----------+---------+----------+----------+---------+---------+--+
| WISE | 352 | 287 | 972 | 112 | 189 | 573 | |
+----------+----------+---------+----------+----------+---------+---------+--+
| WSS | 1,337 | 2,197 | 3,769 | 418 | 1,030 | 1,632 | |
+----------+----------+---------+----------+----------+---------+---------+--+
| Total | 3,251 | 6,221 | 9,227 | (1,572) | (2,348) | (3,011) | |
+----------+----------+---------+----------+----------+---------+---------+--+
The Gross loss can be reconciled to the total comprehensive income for the
period attributable to equity holders of the parent company as per the Condensed
Consolidated Statement of Comprehensive Income.
4 Charge on conversion of vessel charter commitments into shares
On 9 September 2009 the Company issued 14,030,171 new ordinary shares to Euro
Trans Skips AS in exchange for removing most of the future years charter
liabilities.
In accordance with International Accounting Standards the Company has accounted
for a charge in its Condensed Consolidated Statement of Comprehensive Income
which is equivalent to the fair value of the 14,030,171 ordinary shares. The
fair value charge of GBP2,140,000 was based on the closing bid price of 15.25p
on the date that the transaction was completed which was when those shares were
admitted to trading on AIM (14 September 2009).
5 Income tax credit/(expense)
+----------------------------------+---+-------------+----------+----------+-+----------+----------+-----------+----------+
| | | Six | | Six months | | Year to |
| | | months to | | to 28 February | | 31 August |
| | | 28 | | 2009 | | 2009 |
| | | February | | (Unaudited) | | (Audited) |
| | | 2010 | | GBP'000 | | |
| | | (Unaudited) | | | | GBP'000 |
| | | GBP'000 | | | | |
+----------------------------------+---+-------------+----------+-----------------------+----------+----------------------+
| UK Corporation tax | | | | | | |
+----------------------------------+---+-------------+----------+-----------------------+----------+----------------------+
| Corporation tax | | - | | - | | - | |
+----------------------------------+---+-------------+----------+----------+------------+----------------------+----------+
| Foreign tax | | | | | | | |
+----------------------------------+---+-------------+----------+----------+------------+----------------------+----------+
| Current tax on foreign income | | 115 | | (200) | | (197) |
| for the period | | | | | | |
+----------------------------------+---+-------------+----------+-----------------------+----------+----------------------+
| Deferred tax | | | | | | |
+----------------------------------+---+-------------+----------+-----------------------+----------+----------------------+
| Relating to the origination and | | | | | | |
| reversal of temporary | | 38 | | 38 | | 76 |
| differences | | | | | | |
+----------------------------------+---+-------------+----------+-----------------------+----------+----------------------+
| Income tax expense as reported in | | | | | | |
| the Condensed Consolidated Statement | 153 | | (162) | | (121) | |
| of Comprehensive Income | | | | | | |
+--------------------------------------+-------------+----------+------------+----------+----------------------+----------+
| | | | | | | | | | |
+----------------------------------+---+-------------+----------+----------+-+----------+----------+-----------+----------+
6 Loss per share
Loss per ordinary share has been calculated using the weighted average number of
shares in issue during the relevant financial periods.
The weighted average number of ordinary shares in issue for the six months to 28
February 2010 was 68,348,379
(six months to 28 February 2009: 43,193,357, year to 31 August 2009:
43,282,093).
Losses after tax are GBP6,029,000 (Six months to 28 February 2009: loss of
GBP5,798,000, year to 31 August 2009:
loss of GBP8,832,000).
+-------------------------------------+-------------+-+-------------+----------+------------+
| | Six | | Six | | Year to |
| | months | | months | | 31 |
| | to 28 | | to 28 | | August |
| | February | | February | | 2009 |
| | 2010 | | 2009 | | (Audited) |
| | (Unaudited) | | (Unaudited) | | Number of |
| Reconciliation of denominator for | Number of | | Number of | | shares |
| diluted EPS calculation | shares | | shares | | |
| Number of shares used in | | | | | 43,282,093 |
| calculation of basic EPS | 68,348,379 | | 43,193,357 | | |
+-------------------------------------+-------------+-+-------------+----------+------------+
| | | | | | |
| Dilutive potential ordinary shares | | | | | |
| held under Share Option Plan and | - | | - | | - |
| Share Award and Annual Bonus Plans | | | | | |
+-------------------------------------+-------------+-+-------------+----------+------------+
| | | | | | |
+-------------------------------------+-------------+-+-------------+----------+------------+
| Number of shares used in | 68,348,379 | | 43,193,357 | | 43,282,093 |
| calculation of diluted EPS | | | | | |
+-------------------------------------+-------------+-+-------------+----------+------------+
In both 2010 and 2009, the loss for the periods has resulted in any potential
ordinary shares held under Share Option Plans and Share Award and Annual Bonus
Plans being anti-dilutive and, in accordance with IAS 33 "Earnings per share",
these shares have therefore been excluded from the calculation of diluted EPS.
At 28 February 2010 there were 5,363,532 ordinary shares (at 28 February 2009:
2,821,179 ordinary shares, at 31 August 2009: 2,797,518 ordinary shares) held
under the Company's Share Option Plans and Share Award and Annual Bonus Plans
which could potentially dilute the basic EPS in the future.
7 Intangible assets
+----------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | Six | | Six months | | Year to |
| | | months to | | to 28 | | 31 |
| | | 28 | | February | | August |
| | | February | | 2009 | | 2009 |
| | | 2010 | | (Unaudited) | | (Audited) |
| | | (Unaudited) | | | | GBP'000 |
| | | | | GBP'000 | | |
| | | GBP'000 | | | | |
+----------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | |
| Opening balance | | 19,144 | | 18,458 | | 18,458 |
+----------------------------+----------+-------------+----------+-------------+----------+-----------+
| Additions | | 63 | | 297 | | 477 |
+----------------------------+----------+-------------+----------+-------------+----------+-----------+
| Disposals | | - | | (53) | | (53) |
+----------------------------+----------+-------------+----------+-------------+----------+-----------+
| Amortisation | | (298) | | (618) | | (1,345) |
+----------------------------+----------+-------------+----------+-------------+----------+-----------+
| Foreign exchange | | 1,210 | | 3,894 | | 1,607 |
| differences | | | | | | |
+----------------------------+----------+-------------+----------+-------------+----------+-----------+
| Closing balance | | 20,119 | | 21,978 | | 19,144 |
+----------------------------+----------+-------------+----------+-------------+----------+-----------+
Goodwill and fair valuation adjustments to intangible assets arising from the
acquisition of the overseas operation, Rock Solid Images, in August 2007 are
denominated in US Dollars. The retranslation of these balances at the closing
exchange rates has resulted in exchange differences which go directly to the
translation reserve. These exchange differences were significant during the six
month period to 28 February 2010 when the opening and closing US Dollar
translation rate used reflected a strengthening of approximately 7% of the US
Dollar against the Group's functional currency which is Sterling. In the
comparative six month period to 28 February 2009 the US Dollar strengthened by
approximately 21%.
8 Plant and equipment
+---------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | Six | | Six | | Year to |
| | | months to | | months to | | 31 |
| | | 28 | | 28 | | August |
| | | February | | February | | 2009 |
| | | 2010 | | 2009 | | (Audited) |
| | | (Unaudited) | | (Unaudited) | | GBP'000 |
| | | GBP'000 | | GBP'000 | | |
+---------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | |
| Opening balance | | 4,283 | | 5,029 | | 5,029 |
+---------------------------+----------+-------------+----------+-------------+----------+-----------+
| Additions | | 169 | | 326 | | 200 |
+---------------------------+----------+-------------+----------+-------------+----------+-----------+
| Disposals | | (75) | | (194) | | (47) |
+---------------------------+----------+-------------+----------+-------------+----------+-----------+
| Depreciation | | (945) | | (440) | | (947) |
+---------------------------+----------+-------------+----------+-------------+----------+-----------+
| Foreign exchange | | 22 | | 100 | | 48 |
| differences | | | | | | |
+---------------------------+----------+-------------+----------+-------------+----------+-----------+
| Closing balance | | 3,454 | | 4,821 | | 4,283 |
+---------------------------+----------+-------------+----------+-------------+----------+-----------+
Capital expenditure
Capital expenditure during the six month period to 28 February 2010 amounted to
GBP169,000 (28 February 2009: GBP326,000, 31 August 2009: GBP200,000) and mainly
related to costs of offshore survey equipment and IT equipment.
9 Trade and other receivables
+----------------------------+----------+-------------+----------+---------------------------+----------+-----------+
| | | | | | | |
| | | At 28 | | At 28 | | At 31 |
| | | February | | February | | August |
| | | 2010 | | 2009 | | 2009 |
| | | (Unaudited) | | (Unaudited) | | (Audited) |
| | | GBP'000 | | GBP'000 | | GBP'000 |
+----------------------------+----------+-------------+----------+---------------------------+----------+-----------+
| | | | | | | |
| Trade receivables | | 1,369 | | 917 | | 173 |
+----------------------------+----------+-------------+----------+---------------------------+----------+-----------+
| Less provision for | | | | | | |
| impairment of trade | | - | | (22) | | - |
| receivables | | | | | | |
+----------------------------+----------+-------------+----------+---------------------------+----------+-----------+
| | | 1,369 | | 895 | | 173 |
+----------------------------+----------+-------------+----------+---------------------------+----------+-----------+
| Other receivables | | 49 | | 383 | | 61 |
+----------------------------+----------+-------------+----------+---------------------------+----------+-----------+
| Prepayments and accrued | | 360 | | 394 | | 515 |
| income | | | | | | |
+----------------------------+----------+-------------+----------+---------------------------+----------+-----------+
| | | 1,778 | | 1672 | | 749 |
+----------------------------+----------+-------------+----------+---------------------------+----------+-----------+
All amounts shown fall due for payment within one year.
10 Cash and cash equivalents
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | |
| | | At 28 | | At 28 | | At 31 |
| | | February | | February | | August |
| | | 2010 | | 2009 | | 2009 |
| | | (Unaudited) | | (Unaudited) | | (Audited) |
| | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | |
| Cash at bank and on hand | | 1,381 | | 2,297 | | 1,043 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Short-term bank deposits | | - | | - | | - |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Cash and cash equivalents | | 1,381 | | 2,297 | | 1,043 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Bank overdraft repayable on | | - | | - | | - |
| demand | | | | | | |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | 1,381 | | 2,297 | | 1,043 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
11 Trade and other payables
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | |
| | | At 28 | | At 28 | | At 31 |
| | | February | | February | | August |
| | | 2010 | | 2009 | | 2009 |
| | | (Unaudited) | | (Unaudited) | | (Audited) |
| | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Trade creditors | | 1,198 | | 728 | | 431 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Accruals and deferred income | | 1,850 | | 2,400 | | 2,510 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | 3,048 | | 3,128 | | 2,941 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
12 Borrowings
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | | | | | |
| | | At 28 | | At 28 | | At 31 |
| | | February | | February | | August |
| | | 2010 | | 2009 | | 2009 |
| | | (Unaudited) | | (Unaudited) | | (Audited) |
| | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Current liabilities | | | | | | |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Borrowings | | 333 | | - | | - |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Non current liabilities | | | | | | |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| Borrowings | | 999 | | - | | - |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
| | | 1,332 | | - | | - |
+---------------------------------+----------+-------------+----------+-------------+----------+-----------+
Facility
The total facility available to the Group at 28 February 2010 is $2,000,000
provided equally by affiliates of East Hill Hedge Fund, LLC and Euro Trans Skips
AS to Offshore Hydrocarbon Mapping plc. Both of these lenders are significant
share holders and strategic partners of the Company. This facility was set up on
23 December 2009.
Interest
The interest rate is set at 5% above US Prime (which is currently 3.25%) and is
payable by the Company to the lenders quarterly in arrears commencing 31 March
2010 and quarterly thereafter on 30 June, 30 September and 31 December.
Repayment terms
The availability of the facility will end on 30 June 2010 and the loan balance
outstanding at that date is to be repaid as soon as possible by the Company, but
in any event in four equal quarterly instalments by 30 September 2011, unless
otherwise agreed by both lenders.
Security
Security cover comprises a Floating Charge in favour of the lenders covering all
of the assets of the Company and its main trading subsidiaries, OHM Ltd and Rock
Solid Images Inc.
13 Share capital
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
| | | At 28 | | At 28 | | At 31 |
| | | February | | February | | August |
| | | 2010 | | 2009 | | 2009 |
| Authorised | | (Unaudited) | | (Unaudited) | | (Audited) |
| | | GBP'000 | | GBP'000 | | GBP'000 |
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
| 90,000,000 (28 February 2009: 60,000,000, | | | | | |
| 31 August 2009: 60,000,000) ordinary | 900 | | 600 | | 600 |
| shares of 1p each | | | | | |
+--------------------------------------------+--------------+----------+--------------------+----------+-----------+
| | | | | | | |
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
| Allotted, called up and fully | | GBP'000 | | GBP'000 | | GBP'000 |
| paid | | | | | | |
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
| 69,517,689 (28 February 2009: | | | | | | |
| 43,369,382, 31 August 2009: | | 695 | | 434 | | 434 |
| 43,369,382) ordinary shares of | | | | | | |
| 1p each | | | | | | |
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
| | | | | |
| | | Amount | | Ordinary shares |
| | | raised | | of 1p each |
| | | GBP'000 | | Number |
| | | | | GBP'000 |
+---------------------------------+----------+--------------+----------+-------------------------------------------+
| | | | | | | |
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
| Share capital in issue at 1 | | | | 43,369,382 | | 434 |
| September 2009 | | | | | | |
| | | 2,140 | | 14,030,171 | | 140 |
| Issued on 9 September 2009 - | | 2,514 | | 12,023,572 | | 120 |
| charter agreement | | 1 | | 94,564 | | 1 |
| Issued on 9 September 2009 - | | | | | | |
| share placing | | | | | | |
| Issued on 5 October 2009 - | | | | | | |
| exercise of share options | | | | | | |
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
| | | | | | | |
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
| Share capital in issue at 28 | | 4,655 | | 69,517,689 | | 695 |
| February 2010 | | | | | | |
+---------------------------------+----------+--------------+----------+--------------------+----------+-----------+
14 Capital commitments
At 28 February 2010 the Group had capital commitments of GBP66,000 (28 February
2009: GBP13,000, 31 August 2009: GBP64,000).
15 Related party transactions
During the period the Group had transactions with various operating subsidiaries
of its strategic partner Compagnie Generale de Geophysique - Veritas S.A. These
transactions were in the normal course of business and comprised charges of
GBPnil (28 February 2009: GBP58,000, 31 August 2009: GBP73,000) and receipts of
GBPnil (28 February 2009: GBP246,000, 31 August 2009:GBP 176,000). At the
period end there was a balance of GBPnil (28 February 2009: GBP58,000, 31 August
2009: GBP9,000) due to the Group.
During the period the Group had transactions with various operating subsidiaries
of its strategic partner Euro Trans Skips AS. These transactions were in the
normal course of business and comprised charges of GBP1,010,000 (28 February
2009: GBP6,261,000, 31 August 2009: GBP6,847,000) and receipts of GBP2,000 (28
February 2009: GBP59,000 31 August 2009: GBP69,000). At the period end there
was a balance of GBP318,000 due by the Group (28 February 2009: GBP199,000, 31
August 2009: GBP199,000) and there was a balance of GBP5,000 (28 February 2009:
GBP47,000, 31 August 2009: GBP45,000) due to the Group.
At 28 February 2010 there is an outstanding balance on the investor loan
facility of $2,000,000 (GBP1,332,000) which is due equally to Euro Trans Skips
AS and East Hill Hedge Fund, LLC (see Note 12). For the period to 28 February
2010 interest of GBP6,000 was payable by the Group to each of the lenders.
16 Auditors
The audit engagement partner, having acted in this role now for five years,
would cease to act in this capacity to accord with ethical standards.
Considering the recent changes made to the business, principally the significant
financial restructuring of the Group's leasing commitments, and the audit
engagement partner's knowledge of the Group's evolving activities and challenges
at this time, the Company's Audit Committee, in agreement with BDO LLP,
determined that it would be preferable if he continued in this role for a
further period of two years in the interests of audit quality as permitted by
the APB Ethical Standard 3 (Revised).
17 Post balance sheet events
On 8 April 2010 the Company announcedthat Sector Asset Management had agreed to
invest up to GBP3.36 million in the Company via a cash subscription for
21,000,000 new ordinary shares at a price of 16p per share, representing a
premium of approximately 220 per cent to the closing mid-market price at 7 April
2010. The first tranche of 3,475,000 new ordinary shares has been issued on 15
April 2010 under existing shareholder authorities. The balance of 17,525,000 new
ordinary shares shall be issued if shareholder approval is obtained at a General
Meeting of the Company to be held on 28 April 2010.
The funds of GBP556,000 received from the first tranche will largely provide
working capital for the recently announced CSEM surveys in India. The net
proceeds of approximately GBP2.7 million from the second tranche will, if
shareholder approval is obtained, be invested in further improvements in WISE
data processing and interpretation technology, upgrading the Group's marine CSEM
acquisition equipment, further investment in sales and marketing activities
directed towards seismic inversion and appraisal and monitoring applications for
CSEM and general working capital purposes.
Independent Review Report
to Offshore Hydrocarbon Mapping plc
Introduction
We have been engaged by the Company to review the condensed set of financial
statements in the half-yearly financial report for the six months ended 28
February 2010 which comprises Condensed Consolidated Statement of Comprehensive
Income, Condensed Consolidated Balance Sheet, Condensed Consolidated Statement
of Changes in Equity, Condensed Consolidated Cash Flow Statement and the related
explanatory notes.
We have read the other information contained in the half-yearly financial report
and considered whether it contains any apparent misstatements or material
inconsistencies with the information in the condensed set of financial
statements.
Directors' responsibilities
The interim report, including the financial information contained therein, is
the responsibility of and has been approved by the directors. The directors are
responsible for preparing the interim report in accordance with the rules of the
London Stock Exchange for companies trading securities on the Alternative
Investment Market which require that the half-yearly report be presented and
prepared in a form consistent with that which will be adopted in the Company's
annual accounts having regard to the accounting standards applicable to such
annual accounts.
Our responsibility
Our responsibility is to express to the Company a conclusion on the condensed
set of financial statements in the half-yearly financial report based on our
review.
Our report has been prepared in accordance with the terms of our engagement to
assist the Company in meeting the requirements of the rules of the London Stock
Exchange for companies trading securities on the Alternative Investment Market
and for no other purpose. No person is entitled to rely on this report unless
such a person is a person entitled to rely upon this report by virtue of and for
the purpose of our terms of engagement or has been expressly authorised to do so
by our prior written consent. Save as above, we do not accept responsibility
for this report to any other person or for any other purpose and we hereby
expressly disclaim any and all such liability.
Scope of review
We conducted our review in accordance with International Standard on Review
Engagements (UK and Ireland) 2410, "Review of Interim Financial Information
Performed by the Independent Auditor of the Entity", issued by the Auditing
Practices Board for use in the United Kingdom. A review of interim financial
information consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit conducted in
accordance with International Standards on Auditing (UK and Ireland) and
consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly,
we do not express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that causes us to believe
that the condensed set of financial statements in the half-yearly financial
report for the six months ended 28 February 2010 is not prepared, in all
material respects, in accordance with the rules of the London Stock Exchange for
companies trading securities on the Alternative Investment Market.
BDO LLP
Chartered Accountants and Registered Auditors
Glasgow
22 April 2010
This information is provided by RNS
The company news service from the London Stock Exchange
END
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