Independent Resources plc

June 06, 2008 02:00 ET

Half-yearly report

                                             Independent Resources plc
                                    ("Independent Resources" or the "Company")
                                 Interim Results for the period to 31st March 2008

    Ø       Rivara Partnership
    Ø       Fiume Bruna - Regional Environmental Approval
    Ø       Ksar Hadada - Permit renewed
    Ø       Interim loss before taxation: £396,793 (2007: £296,984)
    Ø       Loss per share for the Interim period: 1.2p (2007: 1p)
    Ø       Liquid resources at 31 March 2008: £1,712,324

Chairman's Statement

I  am  pleased  to report that during the six months to March 31, 2008, Independent Resources was able  to  achieve
significant  progress  with  all three of its projects in Italy and Tunisia. We have over  the  past  month  or  so
provided  details  of these advances in a series of announcements to shareholders, and we believe  that  these  new
achievements now strengthen the Company for its next steps over the coming period.

We  have  at  the  same  time begun working to raise our profile among institutional investors  with  a  series  of
introductory  meetings  in  London,  and  have been pleased to note that our  upward  share  price  movement  shows
increasing  confidence  in our steady progress. I believe we are now more strongly positioned  to  become  a  major
player  in  Italy's  important gas storage market, and the recent signing of a key partnership agreement  with  ERG
Power  & Gas SpA ("ERG"), provides further solid underpinning for our early work on the planned development of  the
underground  storage  facility at Rivara in the Po Valley. At Fiume Bruna in central Italy,  the  Company's  recent
receipt of environmental clearances will shortly allow production testing at what may become Italy's first coal bed
methane  project.  On the Ksar Hadada oil and gas exploration permit in Tunisia we have successfully  extended  our
exploration rights for a further three years.

Our  latest  move forward on the Rivara project, where we continue to work closely with the Italian authorities  in
order  to  achieve the necessary environmental and planning approvals, brings us into partnership with ERG  through
the  incorporation of a new joint venture company. The partnership will benefit from ERG's strength as  a  reliable
operator  in the energy sector, including its extensive experience in negotiating through necessary permitting  and
approval phases. I have reported to shareholders previously that we recognise we must properly spend time informing
the  local  population  and  Italian  authorities of the benign aspects of  Rivara,  including  health  and  safety
priorities,  and as well as its material benefits, which can go a long way towards easing the severe winter  supply
shortages  that  in recent years have badly impacted Italy's energy sector. Rivara is a deeply buried  and  highly-
fractured  limestone structure, and we fully appreciate the challenges involved in its safe development. We  remain
fully committed to achieving consensus on our plans for the project from all of the stakeholders involved, from the
local  community  through  all  levels of regional and national government, and we  continue  to  invest  time  and
sensitivity  to  the  task.  We  have also appointed the oilfield services group Schlumberger  to  oversee  project
management,  adding  to  the  world-class expertise we recognise as necessary to  a  planned  development  of  this
magnitude and sensitivity.

It  nonetheless  remains  difficult  to  predict with any accuracy when we  can  expect  to  receive  environmental
clearance,  but  the  recent  legislative changes and the arrival of a more business-friendly  government  give  us
reasonable expectation of achieving the all-important approval from our Environmental Impact Assessment during  the
first part of next year. The new government has inherited a revised environmental clearance "VIA" process from  the
outgoing  government  that  is  proclaimed to be more transparent and rigorous than previously,  as  well  as  more
efficient  in  its interaction with the public. We now intend to submit updated documentation to  the  Ministry  of
Environment  in Rome as soon as its new VIA commission is nominated and confirmed, and will update our shareholders
as we move forward.

ERG  has  agreed  to invest €9.5 million (approximately £7.6 million) in cash into a new joint venture  company  in
exchange  for  the  15%  equity interest in Rivara, and, shorter-term financing requirements aside,  we  anticipate
arranging  project debt finance to bring it into full development by 2014. Our latest accounts show we  have  tight
controls over our spending. But both we and ERG believe the Rivara project would be well served by the introduction
of  a  third  partner  with major trans-national European presence in the gas delivery infrastructure.  It  is  our
intention to review all such possibilities as they become available, in the interest of our shareholders. We  would
favour  new partnership developments sometime between final permitting and the final investment decision to develop
the project, which we hope will happen over the next 24 months.

At  Fiume  Bruna near Tuscany's industrial coast, we have also continued to move forward with due consideration  to
the  planning  and  environmental  issues involved. It is already clear that there  is  the  potential  for  highly
attractive  volumes of methane to be produced from Fiume Bruna and we also continue to recognise  its  longer  term
potential  as  a  storage site for carbon dioxide, which has attracted support within the region. Two  months  ago,
following  our  efforts to communicate the positive aspects of this project to the local and regional  authorities,
the  Tuscan  Regional  Government approved our application to drill up to eight new wells  for  production  testing
within  an  agreed  area, and to acquire new seismic data. Equally importantly, it has passed its  approval  on  to
Italy's  Ministry  of  Economic Development which is expected to formalise the Fiume Bruna  exploration  permit  by
ministerial  decree.  Results  from earlier seismic and appraisal work, including the  drilling  and  coring  of  a
stratigraphic borehole late in 2006, have produced a resource estimate for Fiume Bruna of 170 billion  cubic  feet,
with an estimated recoverable resource of 92 billion cubic feet.

This  theme  of  steady advancement also applies to our third major asset, the Ksar Hadada exploration  project  in
south-eastern Tunisia. Alongside the three-year renewal of the exploration licence covering the concession, we have
also determined from recently received seismic and well data that the concession contains several new prospects  in
addition  to  the  Sidi  Toui and Oryx structures previously known to be present. We are now  expecting  to  update
shareholders further on our next moves following discussions with our partner and operator Petroceltic.

In  summary,  we  are pleased to report to shareholders that following our continued perseverance,  hard  work  and
careful  planning we have achieved significant advances that move us closer to realising our vision of  becoming  a
key contributor to energy supply in Italy. We are now working in partnership with a major player in the sector, and
have every confidence that in the months ahead we shall be able to report further key steps forward.

Grayson Nash

For further information contact:

Grayson Nash, Executive Chairman, Independent Resources plc:        +39 02 3655 5960
David Smith, Deloitte Corporate Finance (NOMAD)                     +44 (0)20 7007 8177
Allan Piper, First City Financial Public Relations:                 +44 (0)20 7242 2666

Independent Resources PLC

Consolidated income statement

Six months ended 31 March 2008

                                                                                                                                                                                           Unaudited                        Unaudited
                                                                1 October 2007 to               1 October 2006 to
                                                                   31 March 2008                   31 March 2007
  Continuing operations                                                  £                                 £
 Revenue                                                                 2,200                           32,126
 Cost of sales                                                             -                                -
 Gross profit                                                            2,200                           32,126
 Administrative expenses                                              (457,564)                        (411,492)
 Operating loss                                                       (455,364)                        (379,366)
 Net financial income                                                   58,571                           82,382
 Loss on ordinary activities before taxation                          (396,793)                        (296,984)
 Taxation                                                                  -                                -
 Loss for the period                                                  (396,793)                        (296,984)
 Earnings per share
 From continuing operations
 Basic                                                                  (0.012)                           (0.01)
 Diluted                                                                (0.012)                           (0.01)
 Consolidated statement of changes in equity
 Loss for the period                                                   (396,793)                       (296,984)
 Share based payments                                                    64,974                          61,734
 Exchange difference on investment                                      325,076                            (799)
 Total change in equity                                                  (6,743)                       (236,049)

Consolidated balance sheet
 As at 31 March 2008
                                                           Unaudited          Audited               Unaudited
                                                           31 March         30 September            31 March
                                                             2008              2007                    2007
                                                               £                 £                      £
 Non-current assets
    Property, plant and equipment                            93,509            122,497                124,431
    Goodwill                                              2,044,146          2,044,146              2,044,146
    Other intangible assets                               3,228,982          2,444,320              1,933,132
                                                          5,366,637          4,610,963              4,101,709
 Current assets
    Trade and other receivables                             490,474            338,590                334,343
    Cash and cash equivalents                             1,712,324          2,557,212              3,292,341
                                                          2,202,798          2,895,802              3,626,684
 Current liabilities
   Trade and other payables                                (228,465)          (142,959)              (212,478)
   Current taxation liabilities                              (6,659)           (22,752)                (1,541)
                                                           (235,124)          (165,711)              (214,019)
 Net current assets                                       1,967,674          2,730,091              3,412,665
 Net assets                                               7,334,311          7,341,054              7,514,374
 Equity attributable to equity holders of the parent
    Share capital                                           334,333            334,333                334,333
    Share premium account                                 5,843,828          5,843,828              5,843,828
    Shares to be issued                                   2,041,815          2,041,815              2,041,815
    Share option reserve                                    303,211            238,237                170,023
    Foreign currency translation reserve                    318,967             (6,109)                    37
    Losses                                               (1,507,843)        (1,111,050)              (875,662)
 Total equity                                             7,334,311          7,341,054              7,514,374

Consolidated cash flow statement
Six months ended 31 March 2008   
                                                                   Unaudited           Unaudited
                                                              1 October 2007 to      1 October 2006 to
                                                                31 March 2008         31  March 2007
                                                                      £                     £
 Cash flows from operating activities
 Loss before taxation                                              (396,793)             (296,984)
 Adjustments for:
           Depreciation of property, plant and equipment             43,620                11,975
           Financial income                                         (58,571)              (82,382)
                                                                   (411,744)             (367,391)
 Increase in trade and other receivables                           (151,884)             (206,612)
 Increase in trade and other payables                                69,413                57,429
 Share based payment                                                 64,974                61,734
 Exchange rate differences                                           62,523                  (799)
 Net cash used in operating activities                             (366,718)             (455,639)
 Cash flows from investing activities
 Interest received                                                   58,571                82,382
 Purchase of intangible assets                                     (536,741)             (929,906)
 Purchases of property, plant and equipment                            -                  (37,403)
 Net cash used in investing activities                             (478,170)             (884,927)
 Net (decrease) in cash and cash equivalents                       (844,888)           (1,340,566)
 Cash and cash equivalents at beginning of the period             2,557,212             4,632,907
 Cash and cash equivalents at end of the period                   1,712,324             3,292,341
 Notes to the interim financial information
 Six months ended 31 March 2008
 1.        Accounting policies
           General information
            The  interim  financial  information is for Independent Resources plc ("the  company")  and  subsidiary
            undertakings.  The company is registered in England and Wales and incorporated under the Companies  Act
           Basis of preparation
            The  interim  financial  information, for the period from 1 October 2007 to 31  March  2008,  has  been
            prepared  under the historical cost convention and in accordance with International Financial Reporting
            Standards  and International Accounting Standards as adopted by the European Union, and  on  the  going
            concern  basis.  They are in accordance with the accounting policies set out in the statutory  accounts
            for the period ended 30 September 2007.
            The  Interim report is unaudited and does not constitute statutory financial statements.  The financial
            information for the period ended 30 September 2007 does not constitute statutory accounts,  as  defined
            in  section 240 of the Companies Act 1985 but is based on those statutory financial statements.   Those
            accounts,  upon which the auditors issued an unqualified opinion, have been delivered to the  Registrar
            of Companies.
            The  Interim  Report for the six months ended 31 March 2008 was approved by the Directors on  5th  June
           Copies of the Interim Report are available from the Company's website
 2.        Revenue and segmental information
            The  group's  revenue during the period represents the charging for work carried out  on  its  Tunisian
            development project to its development partner.
           The group's operations continue to be located in England, Italy and Tunisia.
            The following is an analysis of the carrying amount of segment assets, and additions to property, plant
            and equipment, analysed by the geographical area in which assets are located.
                                                                     Carrying amount of segment assets
                                                                 31 March         30 September    31 March
                                                                     2008                 2007        2007
                                                                       £                    £           £
           United Kingdom                                           13,540               18,847       24,154
           Italy                                                    79,969              103,650      100,277
           Tunisia                                                    -                    -            -
                                                                    93,509              122,497      124,431
                                                                     Additions to property, plant and equipment
                                                                                  in the period
                                                                 1 October 2007 to            1 October 2006 to
                                                                     31 March 2008                31 March 2007
                                                                             £                         £
           United Kingdom                                                    -                       20,666
           Italy                                                             -                       16,737
           Tunisia                                                           -                         -      
                                                                             -                       37,403
            The  following is an analysis of the revenue and loss on ordinary activities before taxation based upon
            the area in which the operations are carried out. 


                                                                 1 October 2007 to        1 October 2006 to
                                                                     31 March 2008            31 March 2007
                                                                            £                       £
           United Kingdom                                                 2,200                     -
           Italy                                                            -                       -
           Tunisia                                                          -                    32,126
                                                                          2,200                  32,126

                                                                  Loss on ordinary activities before taxation

                                                                  1 October 2007 to         1 October 2006 to
                                                                      31 March 2008             31 March 2007
                                                                            £                          £
           United Kingdom                                              (167,536)                   (115,131)
           Italy                                                       (229,151)                   (197,584)
           Tunisia                                                         (106)                     15,731
                                                                       (396,793)                   (296,984)
 3.        Taxation
            There  is  no current tax charge for the period.  The accounts do not include a deferred tax  asset  in
            respect of carry forward of unused tax losses as the directors are unable to assess that there will  be
            probable future taxable profits available against which the unused tax losses can be utilised.
 4.        Earnings per share
            The  calculation  of  basic  and diluted earnings per share at 31 March 2008  was  based  on  the  loss
            attributable  to  ordinary shareholders of £396,793 and a weighted average number  of  ordinary  shares
            outstanding during the period ending 31 March 2008 of 33,433,333, as shown below.
                                                                    31 March 2008            31 March 2007
                                                                            £                        £
           Net loss for the period                                       (396,793)                (296,984)
           Basic and diluted weighted average ordinary shares
           in issue during the period                                  33,433,333                33,433,333
           In  accordance with IAS 33 and as the group has reported a loss for the period, the share  options  are
           not dilutive.

Contact Information

  • Independent Resources plc