Granby Oil and Gas plc, the oil and gas exploration and production company with interests in the UK North Sea and the Philippines, announces it maiden interim results following its admission to AIM on 15 June 2005, raising £10 million (before expenses).
Highlights
In the period since Admission, Granby has:
• participated in its first North Sea well, (although a dry hole, it was drilled at no cost to Granby)
• significantly improved the North Sea portfolio by adding 12 new North Sea blocks in the 23rd Licensing Round,
• completed the farm-in to its assets in Service Contract 14C, which contains the Galoc oil field in the Philippines,
• increased North Sea unrisked prospective resources by 60 million barrels to 341 million barrels of oil equivalent, and
• recently signed Heads of Agreement to farm into the Century operated North Sea block 9/27a, where the Hendrix prospect is expected to begin drilling in December 2005.
Granby now has interests in 23 blocks and part blocks held in 13 licences in the North Sea, as well as an indirect interest in Service Contract 14C offshore Philippines, which contains the Galoc oil field.
David Grassick, Managing Director of Granby Oil and Gas, said:
“Granby has made encouraging progress in the short time since admission to AIM, and we are looking forward to the next exploration well scheduled for December. More drilling activity is expected next year as our farm out process progresses. In addition, we are on track to produce first oil from our Philippines interests in 2007.”
Operational Review
North Sea Resources
Granby is pleased to confirm that as a result of the 23rd Round awards, the Company’s net unrisked prospective resources in its Central and Southern North Sea prospects have grown to some 341 million barrels of oil equivalent, and net risked prospective resources have grown to 75 million barrels of oil equivalent. This represents growth in the Company’s net prospective resources in the North Sea of 21% unrisked and 27% risked since admission to AIM, despite the disappointing result of drilling the 21/6b-6 exploration well in June.
Granby has mapped on its North Sea licences a wide variety of independent prospects, two of which each have the potential to contain P50 resources in excess of 100 million barrels of oil equivalent. In line with the Company’s North Sea exploration strategy, the majority of the prospects lie in relatively shallow water close to existing oil infrastructure and can be tested with relatively low cost wells shallower than 2,500 metres.
These recent awards consolidate Granby’s position in the Central North Sea, adding three blocks adjacent to the Company’s existing licences, and also take Granby into the Southern North Sea gas basin for the first time with three blocks.
North Sea Farmout
Granby has reached agreement with Elixir Petroleum to jointly farm out both 22nd Round and related 23rd Round acreage. The farmout process has begun with selected interested parties now reviewing data room information.
Galoc assignment
Following the assignment of a participating interest in the Philippines’ Galoc block to the Galoc Production Company, in which Granby has a 15.69% shareholding, Granby has an interest in the Galoc Field equivalent to 9.14%. A project manager has been appointed to run the Galoc development which is expected to produce first oil in 2007. Granby has begun work to assess the remaining exploration and development potential within the SC14C Contract Area, which contains the Galoc field.
Farm in to North Sea block 9/27a
Subsequent to the period end, as announced on 22 November, Granby has signed Heads of Agreement with Century Exploration (UK) Ltd to farm in to North Sea block 9/27a, where we will participate in drilling an exploration well on the Hendrix prospect. The transaction is subject to execution of a farm in agreement and approval of the Secretary of State for Trade and Industry. This well will target a tertiary fan prospect with a small but robust four-way dip closed structure, which has significant stratigraphic upside. Granby will have a 12.5% participating interest in the well which is expected to begin drilling in December 2005.
Finance
To improve the transparency and future comparability of the accounts, the Board has adopted International Financial Reporting Standards (IFRSs) for its first published results, which is permitted under the AIM rules, but not mandatory until 2007. The Board believes that this early adoption is current best practice and avoids a potentially more difficult transition in future, when it is anticipated that the Group’s operations will have expanded significantly.
The loss before and after tax for the 6 months ending 30 September 2005 was £0.895 million. The net cash balance at 30 September 2005 of £9.524 million was in line with our expectations and reflects careful control of costs. As explained in the notes to the accounts, during the six months ended 30 September 2004, Granby Oil and Gas plc did not exist in any form and the historic numbers for the other companies in the current Group extant at that time are not considered to be representative. For these reasons no comparative figures for the six months ended 30 September 2004 have been presented, and the Group has been granted a waiver by AIM from publishing these comparatives. Similarly no calculation of the loss per share is presented.
Offices
We have recently moved to new offices at Antholin House, 71 Queen Street, London, EC4N 4TL, which is also our new registered office. The new office provides significantly improved facilities and a better working environment at lower overall cost than the previous serviced accommodation.
Outlook
Granby has made encouraging progress in the short time since admission to AIM, and we are looking forward to the next exploration well and anticipate even more drilling activity on our licences next year as a result of the current farm out process.