Embargoed for release: 0700 on 8 June 2010
Northern Petroleum Plc
("Northern Petroleum", "Northern", or the "Company")
Audited Results for the Year Ended 31 December 2009
Northern Petroleum Plc, an independent oil and gas exploration, development and
production company announces its audited results for the year ended 31 December
2009.
Highlights:
Operational:
* At 31 December 2009 the Company had 102.9 million barrels of oil
equivalence of net proven and probable reserves, representing an increase
of 34.6% from the 76.4 barrels of oil equivalence reported at the end of
2008;
* At the end of 2009, production had increased to 1320 barrels of oil
equivalence per day (boepd) with the commissioning of two new gas fields in
The Netherlands. The production rate at the start of the year was 367 boepd
; and
* The Company conducted two seismic surveys during 2009, recording 3067km of
2D data and set up a 1520km2 3D survey which was recorded in early 2010.
Financial:
* The Company made a record capital investment of €29.7 million, to develop
its reserves and resources;
* The Company made a post tax loss of €2.15 million for the year;
* At the end of 2009 the Company had €15 million of cash, plus €3.5 million
of working capital; and
* The Company successfully completed the acquisition of the outstanding
shares in ATI Oil Plc which it did not already own.
Outlook:
* Development of two further gas fields in the Netherlands is going to plan
with first production on schedule for 2010;
* The Company is developing plans to participate in the drilling of up to six
wells over the next 12 months; and
* The Company expects to have achieved a production rate in excess of 1,750
barrels of oil equivalence a day by the end of 2010.
RESULTS SUMMARY
Year ended Year ended
31 December 31 December
2009 2008
€'000 €'000
Revenue 5,084 6,954
Gross profit 1,482 2,825
(Loss) / profit for the year (2,151) 9,914
Profit on disposal of tangible assets - 8,943
(Loss) / profit for the year adjusted for asset (2,151) 971
sales
Basic (loss) / earnings per share on result
for the year (2.9) € cents 14.1 € cents
Capital expenditure 29,707 3,686
Cash and cash equivalents 15,002 34,927
Other working capital 3,476 11,487
Net assets 73,764 63,545
Total Group distributable reserves 54,769 33,023
Production (million boe) 0.13 0.12
Average revenue, in currency of receipt, per boe:
Gas €33.45 €53.97
Oil $56.43 $90.44
Unaudited Net Commercial Oil & Gas Reserve
Quantities - Proven and Probable reserves (million boe) 102.88 76.43
Richard Latham, Chairman, commented:
"The world's economies may give us all some uncertainties, but as shareholders
of Northern there are positive factors we should enjoy. Our strategies on
technology, partnerships and low-cost acquisition of assets are now proving
extremely effective in producing value.
* We have completed a highly successful hydraulic reservoir fracturing
programme and placed in production, at enhanced flow rates the first two of
six fields in our Netherlands' core area, Grolloo and the very much larger
Geesbrug.
* We captured five more Netherlands discoveries. It is expected that these
will add to our reserves and forecast levels of production.
* We have, together with Shell Italia, progressed our joint venture offshore
of Sicily, completing a 3D seismic survey within budget. The data is being
mapped with results due later this year.
* We made a successful offer for the acquisition of outstanding shares in ATI
Oil Plc.
* We have established, together with our co-venturer Providence Resources
Plc, a project in the UK to drill a long reach well with the potential to
immediately put into production the Baxters Copse oil discovery of 5.36
million barrels gross of 2P reserves.
* We have together with Tullow Oil had our confidence in the venture offshore
Guyane reinforced. Both Shell and Total have joined the project. A 2,500km²
3D seismic survey has been completed to set up the first well.
* The oil price is back in the range of US$60-90 per barrel which is
refuelling interest in our high impact assets offshore Italy.
""It is a time to perceive our glass to be better than half full. Northern
finished the year with an increase of 35 per cent in our Proven and Probable
Reserves to 103 million barrels of oil equivalence. We now have 56 licences and
applications. By the end of 2010 we expect to have achieved a production rate
in excess of 1,750 barrels of oil equivalence a day.
"In the year we report a small loss of €2.2 million. We invested €29.7 million
of capital expenditure and started the current year with cash and working
capital of €18.5 million.
"Our target is to increase production and revenues by bringing on-stream the
Wijk en Aalburg and Brakel gas fields and drilling further production wells in
the Netherlands. This will build a position of greater financial strength from
which to progress development of our very strong asset position and the
multitude of projects that we have created. In the near term we must
differentiate between the many high impact offshore projects, requiring new
partners with the finance that they will bring, and those low risk and medium
impact projects that we can progress ourselves.
"Our history shows that we have every reason to be confident that our strategy
of building strong long-term relationships and alliances will enable us to
exploit our resource potential and create shareholder value. We remain focused
on building within our core areas - areas with the potential to establish and
expand our presence to a size where we are a material player, and which can
make a very considerable impact on the Company's profits.
"In that context we have reviewed our position onshore south of England. It has
good profit potential. We are pleased to look forward to the drilling of two
wells in 2010 with at least one more in 2011. Two of the wells will target
proven and probable reserves and an independent audit has confirmed their
potential . However, future expansion potential is considered to be less than
elsewhere in the Group portfolio. It may now be the time to realise the asset
value we have created and redeploy those funds elsewhere in the business. We
have successfully used this strategy of taking an early exit in Ireland and
Spain and investing the funds elsewhere.
"In The Netherlands, where considerable achievements were made in 2009, we are
completing the first stage of the development of our initial six fields before
increasing production through the drilling of one or more further wells in most
of these fields. We correctly assessed that we could add further fields and
discoveries within this core area. In the next phase we intend to develop two
gas fields on the newly awarded Zuid Friesland production licence together with
our partners EBN, Dyas, NAM, PetroCanada and Total.
"We are also enthused by the potential of three undeveloped discoveries in our
Utrecht licence where we have now been joined by the state owned company, EBN.
It is the first time that EBN has elected to enter into the exploration phase
of any onshore licences. We value their strong support.
"The Northern technical team is generating new exploration concepts in The
Netherlands. We continue our relationship with NAM through discussion on the
mutual benefits of our development of some of their past discoveries.
"Gratifyingly in Italy, which holds the greatest potential of all, we have
continued to build and develop our evaluation of a number of core areas. 2009
saw both the acquisition of the outstanding shares in ATI Oil Plc and new
preliminary licence awards making encouraging prospective additions to core
areas.
"We have been an industry leader in several regions of Italy in identifying and
then acquiring key licences in prospective areas and have been a catalyst in
revitalising oil industry interest in Italy. Our foresight, good relations with
the Italian authorities and track record of commercial partnerships are now
paying off. We have developed a position of strength at costs within our means
through examination of well logs, reprocessing existing seismic data and
undertaking new seismic surveys. Our valuable offshore licences have the
potential to attract major industry players who recognise their high future
potential profitability that more than justifies the cost of farming in at the
exploration or development stage.
"As Northern's operations and prospects grow, the Board recognises that its
capacity must also grow. Changes have been made to ensure that we have the
strengths to capitalise on our opportunities. Nigel Wright has recently been
appointed Finance Director. He has brought with him a wealth of experience in
the petroleum industry. He takes over the role from Chris Foss who, in his new
role as Director of Legal & Corporate Affairs, will use his seven years of
experience with us, to assist the Managing Director in the implementation and
delivery of the corporate strategic plan. All of our employees deserve to have
our thanks for the commitment they have shown in the past challenging but
successful twelve months.
"With the quality and scale of our prospects, we will respond to the challenges
and opportunities and we will realise value from our considerable asset base."
In accordance with the AIM Rules - Guidance for Mining and Oil & Gas Companies,
the information contained in this announcement has been reviewed and signed off
by the Exploration and Technical Director of Northern, Mr Graham Heard CGeol
FGS, who has over 35 years experience as a petroleum geologist.
- Ends -
Enquiries:
Northern Petroleum Plc
Nigel Wright, Finance Director
Graham Heard, Exploration and Technical Director
Sophie Hull, Head of Corporate Communications
Tel: +44 (0) 20 7469 2900/67
Cenkos Securities (NOMAD and Joint Broker)
Jon Fitzpatrick
Tel: +44 (0) 20 7397 8900
Ken Fleming
Tel: +44 (0) 131 220 6939
Jefferies International (Joint Broker)
Chris Snoxall
Tel: +44 (0) 20 7029 8000
Financial Dynamics
Billy Clegg / Edward Westropp
Tel: +44 (0) 20 7318 3113
Notes to Editors:
Further information on Northern is available at www.northpet.com
Consolidated Income Statement
For the year ended 31 December 2009
Year Year
ended ended
31 31
December December
2009 2008
Notes €'000 €'000
Revenue 5,084 6,954
Production costs (2,077) (1,752)
Depletion and amortisation - property, (1,525) (2,377)
plant & equipment
Cost of sales (3,602) (4,129)
Gross profit 1,482 2,825
Pre-licence costs (847) (463)
Administrative expenses - other (2,565) (1,774)
Administrative expenses - share (1,927) (137)
incentives
Administrative expenses - total (4,492) (1,911)
Other operating income - 57
Profit on disposal of tangible assets - 8,943
Deemed profit on disposal of associate - 1
(Loss) / profit from operations (3,857) 9,452
Finance charges (552) (711)
Finance income 1,365 2,959
Share of operating loss of joint (80) (142)
ventures & associates
(Loss) / profit before tax (3,124) 11,558
Tax credit / (expense) 973 (1,644)
(Loss) / profit for the year (2,151) 9,914
Basic earnings per share on (loss) / 3 (2.9) 14.1
profit for the year cents cents
Diluted earnings per share on (loss) / 3 (2.9) 13.5
profit for the year cents cents
All results are from continuing activities and are attributable to equity
shareholders of the parent.
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2009
Year ended Year ended
31 31
December December
2009 2008
€'000 €'000
(Loss) / profit for the year (2,151) 9,914
Exchange differences on translation of (41) (2,187)
foreign operations
Other comprehensive income for the year, (41) (2,187)
net of income tax
Total comprehensive income for the year (2,192) 7,727
All amounts are attributable to equity shareholders of the parent.
Consolidated Statement of Financial Position
at 31 December 2009
2009 2008
Notes €'000 €'000
Assets
Non-current assets
Intangible assets 4 27,880 12,369
Property, plant and equipment 5 45,895 12,498
Investments in joint ventures 259 70
Investments in associates 15 13
Loans and other receivables 118 5,613
74,167 30,563
Current assets
Inventories 98 55
Trade and other receivables 6 14,376 21,249
Cash and cash equivalents 15,002 34,927
29,476 56,231
Total assets 103,643 86,794
Liabilities
Current liabilities
Trade and other payables 8,103 5,949
Corporation tax liability 2,895 3,868
10,998 9,817
Non-current liabilities
Trade and other payables 169 74
Provisions 9,564 6,697
Deferred tax liabilities 9,148 6,661
18,881 13,432
Total liabilities 29,879 23,249
Net assets 73,764 63,545
Capital and reserves
Share capital 7 4,983 4,488
Share premium 194 23,964
Merger reserve 10,289 -
Special reserve 28,410 4,544
(Distributable)
Special reserve 173 154
(Un-distributable)
Share incentive plan 3,865 2,384
reserve
Foreign currency (509) (468)
translation reserve
Retained earnings 26,359 28,479
Total equity 73,764 63,545
All amounts are attributable to equity shareholders of the parent.
REGISTERED NO. 02933545
Consolidated Statement of Cash Flows
for the year ended 31 December 2009
Year ended Year ended
31 December 31 December
2009 2008
€'000 €'000
Cash flows from operating activities
(Loss) / profit before tax (3,124) 11,558
Depletion and amortisation 1,525 2,377
Depreciation - non oil and gas property, 181 204
plant and equipment
Profit on disposal of property, plant and equipment - (8,937)
Foreign exchange gain (567) (898)
Finance income (798) (2,061)
Finance charges 552 711
Share based payments 1,210 442
Expenses settled by issue of shares 63 64
Share of operating loss in associate 80 142
Deemed profit on disposal of associate - (1)
Net cash (outflow) / inflow before movements in (878) 3,601
working capital
(Increase) / decrease in inventories (43) 45
Decrease / (increase) in trade and 9,831 (5,635)
other receivables
Increase in trade and other payables 2,127 2,064
Net cash inflow / (outflow) from changes in 11,915 (3,526)
working capital
Taxes paid (964) -
Net cash inflow from operating activities 10,073 75
Cash flows from investing activities
Interest received 178 1,485
Interest paid (69) (10)
Purchase of property, plant and equipment (16,939) (1,915)
Sale of property, plant and equipment - 8,989
Expenditure on exploration and (12,768) (1,771)
evaluation assets
Investment in joint venture company (183) (87)
Loans to joint ventures and - (144)
associated companies
Acquisition costs of ATI net of cash (727) -
and cash equivalents acquired (note 8)
Net cash (outflow) / inflow from (30,508) 6,547
investing activities
Cash flows from financing activities
Proceeds from the exercise of equity warrants 60 35
Net cash inflow from financing activities 60 35
Net (decrease) / increase in cash and (20,375) 6,657
cash equivalents
Cash and cash equivalents at start of year 34,927 28,929
Effect of exchange rate movements 450 (659)
Cash and cash equivalents at end of year 15,002 34,927
Other than the ATI acquisition (note 8) there have been no significant non-cash
transactions during the year.
Consolidated Statement of Changes in Equity
for the year ended 31 December 2009
Share Foreign
Share incentive currency
Share premium Merger Special plan translation Retained
capital account reserve reserves reserve reserve earnings Total
€'000 €'000 €'000 €'000 €'000 €'000 €'000 €'000
At 1 January
2008 4,468 23,885 - 4,698 3,200 1,719 17,307 55,277
Total
comprehensive
income for
the year - - - - - (2,187) 9,914 7,727
Issue of
shares during 20 79 - - - - - 99
the year
Equity share
warrants
exercised - - - - (1,258) - 1,258 -
Share based
payments - - - - 442 - - 442
At 31
December 2008 4,488 23,964 - 4,698 2,384 (468) 28,479 63,545
Total
comprehensive
income for
the year - - - - - (41) (2,151) (2,192)
Cancellation
of share
premium - (23,885) - 23,885 - - - -
account
Issue of
shares during 8 115 - - - - - 123
the year
ATI 487 - 10,289 - 302 - - 11,078
acquisition
Equity share
warrants - - - - (31) - 31 -
exercised
Share based
payments - - - - 1,210 - - 1,210
At 31
December 2009 4,983 194 10,289 28,583 3,865 (509) 26,359 73,764
All amounts are attributable to equity shareholders of the parent.
Notes to the Group Financial Statements
at 31 December 2009
1. BASIS OF PREPARATION
The financial information set out above does not constitute the Company's
statutory accounts for the years ended 31 December 2009 or 2008 but is derived
from those accounts. Statutory accounts for 2008 have been delivered to the
Registrar of Companies, and those for 2009 will be delivered in due course. The
auditors have reported on those accounts; their reports were (i) unqualified,
(ii) did not include a reference to any matters to which the auditors drew
attention by way of emphasis without qualifying their report and (iii) did not
contain a statement under section 237 (2) or (3) of the Companies Act 1985 in
respect of the accounts for 2008 nor a statement under section 498 (2) or (3)
of the Companies Act 2006 in respect of the accounts for 2009.
Going concern basis of preparation
After consideration of the guidance provided to company directors by the
Financial Reporting Council (FRC) in the document "Going Concern and Liquidity
Risk: Guidance for Directors of UK Companies 2009" the Directors consider the
use of the going concern basis of accounting is appropriate for the Company
because no material uncertainties related to events or conditions that may cast
significant doubt about the ability of the Company to continue as a going
concern have been identified by the Directors.
The Company has processes in place in order to ensure a reasonable cash balance
is maintained at all times. The Company continually monitors its cash balances
and these are reported to the Board at least weekly. The Board also reviews the
forecast cash balance at the end of each of the next twelve months on a rolling
basis. Before making a decision to add new commitments the Board considers the
risks to the delivery of these cash forecasts.
The Group has created a substantial range of projects and opportunities. The
Group can only fund a very small portion of these opportunities from its
current cash balances. Projects will be funded from cash flow from production,
whilst others will have to wait on cash created by trading of assets, such as
the UK assets, and other projects will require farming out before they can
progress. The Group has no external debt but now has the production and reserve
base to obtain debt and the Board is considering using this capacity to fund
some projects. In addition the Company has authority from its shareholders to
raise cash by the issue of new shares to fund its programmes.
After making enquiries, the Directors have a reasonable expectation that the
Group has adequate resources to meet all its commitments and to continue in
operational existence for the foreseeable future. Accordingly they continue to
adopt the going concern basis in preparing the Annual Report and Accounts.
2. ACCOUNTING POLICIES
The financial information presented in this results announcement for the year
ended 31 December 2009 has been prepared in accordance with International
Accounting Standards and International Financial Reporting Standards as adopted
by the European Union at 31 December 2009.
The principal accounting policies applied in the preparation of these
consolidated group financial statements are set out in the 2008 Annual Report.
These policies have been consistently applied to all the years presented,
unless otherwise stated.
Changes in accounting policies
In the current year, the following new and revised standards and
Interpretations have been adopted but have had no effect on the amounts
reported in these group financial statements.
IAS 1 - Presentation of Financial Statements:
In September 2007, the IASB issued Amendments to IAS 1 `Presentation of
Financial Statements' - A Revised Presentation, which requires separate
presentation of owner and non-owner changes in equity by introducing the
statement of comprehensive income. The statement of recognised income and
expense will no longer be presented. Whenever there is a restatement or
reclassification, an additional balance sheet, as at the beginning of the
earliest period presented, will be required to be published. The revised
standard is effective for annual periods beginning on or after 1 January 2009
and the Group has adopted it from that date. There is no effect on the Group's
reported income or net assets. IAS 1 Revised has been adopted by the EU.
Other standards and interpretations adopted in the year had no significant
impact on these group financial statements.
3. (LOSS) / EARNINGS PER SHARE
Basic earnings per share amounts are calculated by dividing profit for the
period attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing profit for the
period attributable to ordinary equity holders of the parent by the weighted
average number of ordinary shares outstanding during the year, plus the
weighted average number of shares that would be issued on the conversion of
dilutive potential ordinary shares into ordinary shares. The calculation of the
dilutive potential ordinary shares related to employee and director share
option plans includes only those warrants with exercise prices below the
average share trading price for each period.
2009 2008
€'000 €'000
Net (loss) / profit attributable to equity (2,151) 9,914
holders used in basic calculation
Net (loss) / profit attributable to equity (2,151) 9,914
holders used in dilutive calculation
Number Number
`000 `000
Basic weighted average number of 75,184 70,538
shares
Dilutive potential of
ordinary shares:
Warrants exercisable under - 2,963
Company schemes
Diluted weighted average number 75,184 73,501
of shares
The calculation of the diluted EPS assumes all criteria giving rise to the
dilution of the EPS are achieved.
4. INTANGIBLE EXPLORATION AND EVALUATION ASSETS
Intangible assets consist of the Group's exploration projects which are pending
determination of technical feasibility and commercial viability of extracting a
mineral resource.
United
Kingdom Italy Netherlands Other EU Total
€'000 €'000 €'000 €'000 €'000
Cost:
At 1 January 2009 3,940 2,617 5,805 173 12,535
Additions 279 4,751 7,948 - 12,978
Acquisition through business - 2,374 - - 2,374
combination
Transfers (24) - - 24 -
Exchange movement 284 (113) - (9) 162
At 31 December 2009 4,479 9,629 13,753 188 28,049
Exploration expenditure
written off:
At 1 January 2009 39 - 99 28 166
Exchange movement 3 - - - 3
At 31 December 2009 42 - 99 28 169
Net book value:
At 31 December 2009 4,437 9,629 13,654 160 27,880
5. PROPERTY, PLANT AND EQUIPMENT
a. Oil and Gas Assets
Oil Oil Oil and Oil Oil
and Gas and Gas Gas and Gas and Gas
Assets Assets Assets Assets Assets
(Netherlands) (Netherlands) (UK) - (UK) - (Italy)- Total
- Developed - Undeveloped Developed Undeveloped Undeveloped
€'000 €'000 €'000 €'000 €'000 €'000
Cost:
At 1 January 7,458 8,970 234 688 335 17,685
2009
Additions 2,571 15,854 2 541 200 19,168
Acquisition
through - - - - 15,844 15,844
business
combination
Transfers 12,014 (12,014) 501 (501) - -
Exchange - - 8 50 (27) 31
movement
At 31 December 22,043 12,810 745 778 16,352 52,728
2009
Depletion and
amortisation:
At 1 January 5,562 - 110 - - 5,672
2009
Charge for the 1,173 - 62 - - 1,235
year
Impairment loss - - 290 - - 290
Exchange - - 4 - - 4
movement
At 31 December 6,735 - 466 - - 7,201
2009
Net book value:
At 31 December 15,308 12,810 279 778 16,352 45,527
2009
Net book value:
At 31 December 15,308 12,810 279 778 16,352 45,527
2009
b. Non Oil and Gas Assets
Computer
Leasehold and Office Total
improvements equipment
€'000 €'000 €'000
Cost:
At 1 January 2009 303 537 840
Additions - 64 64
At 31 December 2009 303 601 904
Depreciation:
At 1 January 2009 102 253 355
Charge for the year 76 105 181
At 31 December 2009 178 358 536
Net book value:
At 31 December 2009 125 243 368
6. TRADE AND OTHER RECEIVABLES
2009 2008
€'000 €'000
Non-current assets
Other receivables - 3,720
Loans 118 1,893
118 5,613
Current assets
Trade receivables 1,590 3,609
Other receivables 4,208 4,539
Corporation tax 144 -
VAT recoverable 3,530 576
Prepayments and accrued income 4,904 12,525
Total trade and other 14,494 26,862
receivables
€4,000,000 included in other receivables represents the final instalment of the
Strategic Alliance fee from Dyas B.V. ("Dyas") which fell due and was settled
in April 2010. A loan of $200,000 (€139,000 net of fair value discount of €
21,000, (2008: €110,000 net of fair value discount of €34,000) has been made to
Northpet Investments Limited to be used to fund drilling expenditure incurred
on the Guyane licence. In addition, the prior year loans balance included an
amount of €1,783,000 representing the discounted value of a loan to ATI Oil
Plc. Control of ATI Oil Plc was acquired by the Group during 2009.
7. SHARE CAPITAL
2009 2008
€'000 €'000
Authorised:
311,316,404 (2008:311,316,404) ordinary shares of 5p 19,648 19,648
each
Allotted, issued, called up and fully paid:
78,987,248 (2008:71,142,059) ordinary shares of 5p 4,983 4,488
each
The ordinary shares above all hold the same voting rights and there are no
restrictions on the distribution of dividends.
Cancellation of share premium
On 30 June 2009 the Company delivered to Companies House the Order of Court
following The High Court of Justice, Chancery Division having confirmed the
cancellation of the amount standing to the credit of the share premium account
of the Company as at 31 December 2007, being £18.923 million (€23.885 million).
The Order of Court was registered by Companies House on 8 July 2009 (the
"Effective Date"). The creditors of the Company as at the Effective Date are
protected by the transfer of the applicable balance to the Company's
un-distributable special reserve. This reserve will be reduced, and the
applicable balances transferred to the Company's distributable special reserve,
upon settlement of those creditors, and this will have the effect of
significantly increasing the Company's distributable reserves going forward.
8. ATI OIL PLC ACQUISITION
On 24 June 2009 the Company acquired control of all of the ordinary share
capital of ATI Oil Plc ("ATI") that the Group did not already own. A total of
7,698,267 new Northern shares were issued fully paid at 120p per share, being
the closing market price on 23 June 2009, to ATI shareholders and warrant
holders, with trading in the new Northern shares commencing on 25 June 2009.
The notional "share premium" on the shares issued in consideration for the
takeover of ATI Oil Plc, evaluated at the issue price less the nominal value of
those shares issued has been credited to the merger reserve.
The acquisition of ATI increased oil reserves by 26.58 million barrels and
brought fuller control of the Group's position in Italy where ATI held a 50%
economic interest in most of the licences operated by Northern.
Due to the inherently uncertain nature of the oil and gas industry, and
exploration and evaluation assets in particular, the assumptions underlying the
assigned values below are significantly judgemental in nature. The acquisition
consideration below is considered equal to the aggregate of the fair values of
the assets and liabilities acquired, with fair value adjustments recorded as
deemed appropriate. Deferred tax has been recognised, where applicable, in
respect of any fair value adjustments made.
Effect of the acquisition:
Consideration:
24 June
2009
€'000
Ordinary shares 10,776
Replacement share based payment awards - value of 302
past service
11,078
Acquisition costs 745
11,823
Identifiable assets acquired and liabilities assumed:
24 June 24 June 24 June
2009 2009 2009
Pre-acquisition Fair Recognised
carrying value values on
amount adjustments acquisition
€'000 €'000 €'000
Intangible assets 2,374 - 2,374
Property, plant and equipment - oil 559 15,285 15,844
& gas assets
Trade and other receivables 261 - 261
Cash and cash equivalents 18 - 18
Trade and other payables (1,008) - (1,008)
Loans (ATI - Northern loan) (2,333) - (2,333)
(129) 15,285 15,156
Deferred tax liability - (3,333) (3,333)
(129) 11,952 11,823
The uplift on acquisition of "Property, plant and equipment - oil & gas assets"
of €15.285 million equates to a fair value of €0.60 per barrel of probable oil
reserves. The Directors consider that this was, and remains, an appropriate
valuation given the early stages of development of the Rovesti and Giove
fields.
No goodwill has been recognised as result of the acquisition.
The Group incurred acquisition related costs of €745,000 relating to
professional advisors' fees and fees directly related to the scheme of
arrangement under which ATI was acquired. These fees have been included in the
cost of the acquisition.
The revenue and expenses incurred from this operation since the date of
acquisition (24 June 2009) were €Nil and €226,000 respectively. Of the €226,000
expenses, €200,000 relates to payments in respect of termination of contracts
made to non continuing ATI Directors. Cash outflow from the operation post
acquisition was €26,000. If the acquisition had occurred on 1 January 2009,
management estimates that consolidated revenue would have been unchanged and
the consolidated loss for the year would have been €106,000 greater.
The terms of the acquisition agreement required the Group to exchange ATI
warrants (the acquiree's awards) for Northern warrants (the replacement
awards). Details of the acquiree's awards and replacement awards are as
follows:
Acquiree's award Replacement
awards
Terms and conditions Fully vested Fully vested
Market-based measure at acquisition date €302,000 €302,000
The Group has included €302,000 as consideration transferred related to the
fair value of the replacement awards.
9. APPROVAL BY DIRECTORS
The results for the year ended 31 December 2009 were approved by the Directors
on 7 June 2009.
10. ANNUAL REPORT AND ACCOUNTS
The Annual Report and Accounts will today be made available in electronic
format on the Company's website, www.northpet.com, and will shortly be posted
to shareholders. Following posting, the Annual Report will also be available
free of charge for a period of not less than one month by application to the
Company Secretary at the Company's registered office being Martin House, 5
Martin Lane, London, EC4R 0DP.