Frontier Resources International plc
LSE : FRGP

September 27, 2011 02:00 ET

Interim Results for the six months ended 30 June 2011

                                                                                     27 September 2011
                                                                                          GB00B3K9ML24
                                                                                                      
                                                                                                      
                                 Frontier Resources International Plc
                                     ("Frontier" or the "Company")
                                                   
                         Interim Results for the six months ended 30 June 2011


CHIEF EXECUTIVE OFFICER'S STATEMENT

I am pleased to report the Company's interim results for the six months ended 30 June 2011.
        
Frontier  Resources  International Plc and subsidiaries are engaged  in  hydrocarbon  exploration  and
production in the U.S.A. and international exploration focused on the Middle East and Southern Africa.

Key Events

The operational highlights of the period were:

    *   The award  in  Zambia  of  Block 34 in March 2011 by the Zambian Ministry of Mines and Mineral
        Development. The Block, which  is  unexplored,  covers  an  area of approximately 6,400 square
        kilometres  and  is  located  in  the  Kafue Trough 150 kilometres southwest  of  the  capital
        Lusaka.
        
        Since  the  granting of Block 34, Frontier has made good progress in gathering  and  reviewing
        data  available over the Block.  A core sample from one of the shallow core holes  drilled  by
        the Geological Survey on the block is currently being analyzed by Weatherford Laboratories  in
        Houston.  Copies of 2D seismic lines acquired close to the Block by Placid Oil  in  1986,  the
        previous  operator in this area, have been located in Zambia and Frontier will  acquire  these
        lines for re-processing and interpretation.
        
        The   Company   is  at  present  reviewing  the  acquisition  of  new  high  resolution   aero
        gravity/aeromagnetic  data  that  will  be  used  in  combination  with  existing   geological
        information  to  identify areas within the Block that may be prospective for hydrocarbons.   A
        local representative has been hired and an office will be opened in due course.
        
    *   The  successful  fund  raising of GBP512,771 to allow for the ongoing exploration  of  Zambian
        Block  34  as  well as the pursuit of additional Blocks in Frontier's African and Middle  East
        focus  areas. The Group's cash balances increased from $US190,000 at the 31 December  2010  to
        $US811,000 at the 30 June 2011.
        
    *   The  appointment of Mr. Graeme Thomson, FCA as a Non-executive Director.  Mr. Thomson has over
        28  years  of  experience  in  the  international oil and gas industry.  Mr.  Thomson  assists
        companies  with  their financial, commercial and strategic affairs. A former CFO  and  Company
        Secretary  of  Dragon  Oil  plc  and Sterling Energy plc he is  an  Independent  Non-Executive
        Director and Chairman of the Audit Committee for Desire Petroleum plc.

    *   Investment in the United States assets continues to generate positive cash flows.

    *   Cash administrative expenses in the six months ended 30 June 2011 of $227,000 were a reduction
        of  $US93,000 in comparison to the same period in the previous year. The Group is committed to
        retaining its cost efficiency.


Frontier Resources International Plc
Chief Executive Officer's Statement continued


Financial Performance

The  Group incurred a total comprehensive loss of $US275,000 for the six months to 30 June 2011  (loss
for  the six months to 30 June 2010: $US310,000). The basic and diluted loss per share was 0.05  cents
(six months to 30 June 2010: 0.5 cents).
    
    
Outlook

The  Company continues to view its long-term outlook as positive even though economic growth worldwide
has  continued to slow.  Oil prices have remained high in spite of the global contraction and this has
benefited Frontier's operating revenues.  The Company is in the final stages of negotiations  for  two
new  concessions, one in the Middle East and one in southwest Africa and continues to actively develop
leads in the regions of interest.

With  continued success for growth, the Board of Directors anticipates moving the Company to AIM,  the
London Stock Exchange's international market for growing companies, at the appropriate time.  The move
to AIM will better enable Frontier to raise additional growth capital and position it for the future.


Michael J Keyes
Chief Executive Officer

26 September 2011




Frontier Resources International Plc
Interim Consolidated Statement of Comprehensive Income


                                                         Six months         Six months         Year ended
                                            Note      ended 30 June     ended  30 June        31 December
                                                               2011               2010               2010
                                                              $'000              $'000              $'000
                                                          Unaudited          Unaudited            Audited
                                                                                                         
Revenue                                                          73                 61                117
                                                                                                         
Cost of sales                                                                                            
Impairment of oil and gas assets                                  -                  -                 (8)
Depletion of oil and gas assets                                 (45)               (19)               (67)
Other cost of sales                                             (45)               (46)               (70)
Total cost of sales                                             (90)               (65)              (145)
                                                                                                         
Gross loss                                                      (17)                (4)               (28)
Other income                                                      -                  9                  9
Share-based payments                         4                  (74)                  -               (61)
Administrative expenses                                        (227)              (320)              (524)
                                                                                                         
Operating loss                                                 (318)              (315)              (604)
                                                                                                         
Share of associate's profit/(loss)                               21                 29                (70)
Finance income                                                    -                  1                  1
Finance costs                                                    (1)                (5)                (6)
                                                                                                         
Loss before tax                                                (298)              (290)              (679)
Taxation credit                              5                    8                  5                 11
                                                                                                         
Loss for the period                                            (290)              (285)              (668)
                                                                                                         
Other comprehensive income                                                                               
Exchange differences arising on                                  15                (25)                27
translation of foreign operations
Total comprehensive loss for the period                        (275)              (310)              (641)
                                                                                                         
Loss per share (cents)                                                                                   
Basic and diluted                            6                (0.5c)             (0.5c)            (1.08c)


The notes on pages 7 to 10 are an integral part of these interim consolidated financial statements.




Frontier Resources International Plc
Interim Consolidated Statement of Financial Position


                                            Note         At 30 June         At 30 June     At 31 December
                                                               2011               2010               2010
                                                              $'000              $'000              $'000
                                                          Unaudited          Unaudited            Audited
                                                                                                         
ASSETS                                                                                                   
Non-current assets                                                                                       
Property, plant and equipment                3                  370                437                351
Investment in associate                                         325                508                352
Total non-current assets                                        695                945                703
                                                                                                         
Current assets                                                                                           
Trade and other receivables                                      67                 50                 23
Cash and cash equivalents                                       811                365                190
Total current assets                                            878                415                213
                                                                                                         
TOTAL ASSETS                                                  1,573              1,360                916
                                                                                                         
                                                                                                         
EQUITY AND LIABILITIES                                                                                   
Equity attributable to holders of the                                                                    
parent
Share capital                                7                1,108                980                984
Share premium                                7                1,840              1,139              1,156
Share-based payment reserve                                     135                  -                 61
Foreign exchange reserve                                        (56)              (123)               (71)
Retained losses                                              (1,820)            (1,147)            (1,530)
Total equity                                                  1,207                849                600
                                                                                                         
Non-current liabilities                                                                                  
Provision for decommissioning                                    46                 60                 44
Deferred tax liability                                           83                 98                 91
  Total non-current liabilities                                 129                158                135
                                                                                                         
Current liabilities                                                                                      
Trade and other payables                                        237                353                181
Total current liabilities                                       237                353                181
                                                                                                         
TOTAL EQUITY AND LIABILITIES                                  1,573              1,360                916





Frontier Resources International Plc
Interim Consolidated Statement of Changes in Equity


                             Share      Share      Retained    Share-based     Foreign        Total
                           Capital    Premium        Losses        Payment    Exchange       Equity
                                                                   Reserve     Reserve
                             $'000      $'000         $'000          $'000       $'000        $'000
As at 1 January 2010           980      1,139          (862)             -         (98)       1,159
Loss for the period              -          -          (285)             -           -         (285)
Other comprehensive              -          -             -              -         (25)         (25)
loss
As at 30 June 2010             980      1,139        (1,147)             -        (123)         849
(Unaudited)
                                                                                                   
As at 1 January 2011           984      1,156        (1,530)            61         (71)         600
Loss for the period              -          -          (290)             -           -         (290)
Other comprehensive              -          -             -              -          15           15
income
Issue of share capital         124        684             -              -           -          808
Share based payments             -          -             -             74           -           74
As at 30 June 2011           1,108      1,840        (1,820)           135         (56)       1,207
(Unaudited)


The following describes the nature and purpose of each reserve within owners' equity.

Share capital                    Amount subscribed for share capital at nominal value.
Share premium                    Amount subscribed for share capital in excess of nominal value.
Retained losses                  Cumulative net losses recognised in the financial statements.
Share-based payment reserve      Amounts recognised for the fair value of share options granted
Foreign exchange reserve         Exchange differences on translating foreign operations.




Frontier Resources International Plc
Interim Consolidated Statement of Cash Flows


                                              Note         Six months         Six months       Year ended
                                                        ended 30 June     ended  30 June      31 December
                                                                 2011               2010             2010
                                                                $'000              $'000            $'000
                                                            Unaudited          Unaudited          Audited
                                                                                                         
Net cash used in operating activities          8                (184)              (182)            (416)
                                                                                          
Cash flows from investing activities                                                      
Purchase of plant and equipment                                  (20)               (22)              (4)
Settlement of oil and gas properties                               -                 20               20
acquired in the period
Interest received                                                  -                  1                1
Distribution from associate                                       46                 52              111
Net cash from investing activities                                26                 51              128
                                                                                          
Cash flows from financing activities                                                      
Proceeds from issue of share capital                             808                  -                -
Proceeds from long term borrowings                                 -                 65                -
Repayment of borrowings                                            -               (280)            (280)
Interest paid                                                      -                 (5)              (6)
Net cash from/(used in) financing                                808               (220)            (286)
activities
                                                                                          
Net increase/(decrease) in cash and cash                         650               (351)            (574)
equivalents
Cash and cash equivalents at the beginning                       190                780              780
of period
Effect of foreign exchange rate changes                          (29)               (64)             (16)
Cash and cash equivalents at end of period                       811                365              190
                                                                                                         






Frontier Resources International Plc
Notes to the Consolidated Interim Financial Information




1  General information

Frontier  Resources  International Plc is a Public Company incorporated in the  United  Kingdom  under
registered number 06573154. The address of the registered office is McClintock Building, Granta  Park,
Great Abington, Cambridge, CB21 6GP, England.

The  Company  is  listed on the PLUS Markets Exchanges in London. This consolidated interim  financial
information was approved for issue on the 26 September 2011.

2  Significant accounting policies

Basis of preparation
The  condensed consolidated half-year accounts of the Company for the six months ended  30  June  2011
comprise the accounts of the Company and its subsidiaries (together referred to as 'the Group').

The  condensed half-year accounts for the six months ended 30 June 2011 are unaudited.  In the opinion
of  the  Directors,  the  condensed half-year accounts for the period  fairly  present  the  financial
position, and results from operations and cash flows for the period.  The condensed half-year accounts
include unaudited comparative figures for the half year ended 30 June 2010.

The financial information contained in this half-year report does not constitute statutory accounts as
defined by section 434 of the Companies Act 2006.

Where shown, the comparatives for the year ended 31 December 2010 are not the Company's full statutory
accounts  for that year but have been extracted from the statutory accounts for that year  which  have
been  delivered  to  the Registrar of Companies.  The auditors' report on those  accounts,  which  was
unqualified, and did not include a statement under section 498 (2) or (3) of the Companies Act 2006.
The  half-yearly financial report was approved by the Directors on 26 September 2011 and is  available
on the Company's website: www.friplc.com.

The  consolidated interim financial information is presented in US Dollars ($) rounded to the  nearest
thousand dollars ($'000).

This consolidated interim financial information has been reviewed but not audited.

Accounting policies

The  condensed  half-year accounts have been prepared using accounting policies based on International
Financial  Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting
Standards Board ("IASB") as adopted for use in the European Union, including IAS 34 'Interim Financial
Reporting'  and  on  the historical cost basis.  The condensed half-year accounts have  been  prepared
using the accounting policies which are expected to be applied in the Group's next statutory financial
statements  for  the  year  ending 31 December 2011. The same accounting  policies,  presentation  and
methods  of computation were applied in the Group's latest audited financial statements for  the  year
ended 31 December 2010.

The  Group's financial risk management objectives and policies are consistent with those disclosed  in
the 2010 annual report.


Adoption of new and revised International Reporting Standards
No new IFRS standards, amendments or interpretations became effective in the six months to the 30 June
2011 which had a material effect on this consolidated interim financial information.

Foreign currencies
Functional and presentational currency


Frontier Resources International Plc
Notes to the Consolidated Interim Financial Information


Items  included  in  the consolidated financial information are measured using  the  currency  of  the
primary  economic  environment  in which the Company operates ("the  functional  currency")  which  is
considered by the directors to be Pounds Sterling (GBP) for the Parent Company and US Dollars ($)  for
Frontier Resources

International  Inc. This consolidated interim financial information has been presented in  US  Dollars
which represents the dominant economic environment in which the Group operates. The effective exchange
rate at 30 June 2011 was $1/GBP0.62 (30 June 2010: $1/GBP0.66).

Transactions and balances
Foreign  currency  transactions are translated into the functional currency using the  exchange  rates
prevailing  at  the  dates of the transactions. Foreign exchange gains and losses resulting  from  the
settlement of such transactions and from the translation at the period end exchange rates of  monetary
assets  and  liabilities  denominated  in  foreign currencies  are  recognised  in  the  Statement  of
Comprehensive Income.

Transactions in the accounts of individual Group companies are recorded at the rate of exchange ruling
on  the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
translated  at  the  rates  ruling at the year end. All differences are  taken  to  the  Statement  of
Comprehensive Income.

3  Operating segment information

In  the  opinion  of the directors, the operations of the Group currently comprise  of  one  operating
segment,  being  oil and gas production and exploration. These interim financial statements  presented
reflect  all the activities of this single operating segment. Segments are determined by reference  to
the Group's internal organisation and reporting to the directors which bases its structure on products
and geographical areas.

All  revenues in the period are derived from the sale of oil and gases produced by wells in which  the
Group  has an interest and are located in the United States, no revenues are derived from outside  the
United  States and therefore the Group does not present segmental information to management on revenue
or profit or loss figures.

No single customer accounts for more than 10 per cent of the Group's total external revenue.

The geographic location of the Group's property, plant and equipment is held is detailed below.

Property, plant and equipment                              Six months         Six months    Year ended 31
                                                       ended  30 June      ended 30 June    December 2010
                                                                 2011               2010            $'000
                                                                $'000              $'000
United States                                                     314                436             351
Africa                                                             56                  -         -
Total                                                             370                436             351

4  Share options and share based payments

As  disclosed in the 2010 Annual Report, in October 2010 the Company granted share options exercisable
no later than October 2020. At the 30 June 2011 no options that had fully vested had been exercised.

A  charge of $74,000 relating to the above share based payments has been recognised in the six  months
ended  30  June  2011  (six  months ended 30 June 2010: $nil) and is  included  in  the  statement  of
comprehensive income.

5  Taxation

Income  tax expense is recognised based on management's estimate of the weighted average annual income
tax  rate expected for the full financial year.  The Group has incurred tax losses for the six  months
ended 30 June 2011 and a corporation tax charge for the period is not anticipated.

The taxation credit recognised for the six months ended 30 June 2011 is calculated in full on the fair
value uplift on business combinations at the prevailing tax rate that relates to the acquired business
assets of 34% (the US tax rate).


6  Loss per share

                                                           Six months         Six months    Year ended 31
                                                       ended  30 June      ended 30 June    December 2010
                                                                 2011               2010

Loss attributable to the shareholders of the                    (290)              (285)           (668)
Company ($'000)
Weighted average number of ordinary shares                 62,331,006         61,514,408     61,657,832
Basic loss per share (cents)                                   (0.5c)             (0.5c)         (1.08c)

Diluted  loss  per share is the weighted average number of shares in issue and to be issued, allowing
for the exercise of share options is 62,331,006 (no share options were in issue at 30 June 2010). The
diluted loss per share has been kept the same as the basic loss  per share as the conversion on share
options decreases the basic loss per share, thus being anti-dilutive.

7  Share capital

Authorised share capital
The  total  number of authorised ordinary shares of 1p each at 30 June 2011 was 208,500,000  (30  June
2010: 200,000,000)

Issued share capital

On  the  17  June 2011, the Company authorised the issue of 1,000,000 ordinary shares with  a  nominal
value of 1p each at an issue price of 6.5 pence per share.

The  shares were issued in order to raise funds for the exploration of existing blocks and pursuit  of
additional blocks in the Company's focus areas.

A total of 7,888,791 shares were issued raising total equity of $808,000.

The changes to issued share capital in the six months ended 30 June 2011 was as follows:

Company                                               Ordinary shares              Share           Share
                                                             (number)            Capital         Premium
                                                                                    $000            $000
At 1 January 2010                                          61,514,408                980           1,139
Issue of share capital                                              -                  -               -
At 30 June 2010                                            61,514,408                980           1,139
                                                                                                        
Issue of share capital                                        250,000                  4              17
At 31 December 2010                                        61,764,408                984           1,156
                                                                                                        
Issue of share capital                                      7,888,791                124             684
At 30 June 2011                                            69,653,199              1,108           1,840
                                                                                                      
The Company has one class of ordinary shares which carry no right to fixed income.
8  Notes to the statement of cash flows

                                                           Six months         Six months    Year ended 31
                                                       ended  30 June      ended 30 June    December 2010
                                                                 2011               2010
                                                                $'000              $'000           $'000
Cash flows from operating activities                        Unaudited          Unaudited         Audited
Group                                                                                     
Operating loss:                                                 (318)              (315)            (604)
Adjustments for:                                                                          
Depreciation of plant and equipment                                 1                  1               1
Depletion of oil and gas assets                                    45                 18              67
Impairment loss of oil and gas assets                               -                  -               8
(Increase)/Decrease in trade and other                            (44)                (4)             23
receivables
Increase in trade and other payables                               56                131              35
Increase /(Decrease) on provisions                                  2                (13)            (29)
Share based payments                                               74                  -              61
Shares issued in exchange for consulting                            -                  -              22
services
Net cash used in operating activities                            (184)              (182)           (416)

9  Control

The Company is under the control of its shareholders and not any one party.


The Directors of Frontier are responsible for the contents of this announcement.

For more information on Frontier, please visit: www.friplc.com

 Contact details:

Frontier Resources International Plc
Jack Keyes, CEO
Telephone: +1 (281) 920 0061

Corporate Advisers
St Helens Capital Partners LLP
Duncan Vasey or Mark Anwyl
Telephone: +44 20 7368 6959

Contact Information

  • Frontier Resources International plc