Annual Report and Accounts
01 July 2003 - 2:20AM
UK Regulatory
RNS Number:9644M
Ennex International PLC
30 June 2003
Ennex International plc
Annual Report and Accounts
Ennex International plc ("Ennex" or "the Company") announced today its annual
results for the year ended 31 December 2002.
Chairman's Report
The last eighteen months has been a successful period for Ennex as our existing
oil and gas assets have been enhanced which, combined with the disposal of our
mineral interests, form a solid platform on which to build and move forward. In
particular I want to highlight:
* The successful drilling of a development well in the royalty area into the
SW Kinsale Gas Field to produce untapped reserves through the existing field
infrastructure;
* The economic life of the Kinsale Gas Field (Kinsale, SW Kinsale and
Ballycotton) will be enhanced by Marathon's agreement to transport and
process gas from the Seven Heads field using the Kinsale Gas Field
facilities.
* The recent successful flotation of Faroe Petroleum plc on AIM in which
your company has a stake valued at circa $800,000 after an impairment charge
of $577,000 in 2002.
* The disposal of the Shaimerden Zinc Deposit in Kazakhstan for a cash,
royalty and share consideration.
* The sale of our Irish mineral interests.
During this period Ennex also focused on seeking new oil and gas opportunities
to build the assets of the company. A large number of projects were and are
currently being reviewed and we expect to be in a position to make some
announcements over the coming months.
Marathon, the operator of Ennex's Kinsale Gas Field royalty announced in
November 2002 that they had identified gas reserves in the SW Kinsale Field that
were not being exploited. In order to produce these reserves Marathon has
recently completed a development well on this field, which will be linked to the
existing production facilities later this year. Sale of this gas will provide
additional royalty income for Ennex.
Marathon also announced that they had reached an agreement to process and
transport gas from the nearby Seven Heads gas field through the Kinsale
infrastructure. Development drilling has now commenced on Seven Heads and first
gas production is expected before December 2003. This agreement will result in
considerably reduced net operating costs being applied to the royalty. It is
further expected that this will also mean that the Kinsale Gas Field can be
produced economically for a longer period even at lower production levels, thus
extending the life of our royalty interest in the Kinsale Gas Field. Ennex can
therefore expect to continue to receive royalty income for a considerable period
of time.
Marathon continues to store gas in the southwest reservoir during the summer
months. This enables more gas to be sold at higher prices during the peak winter
months, thus increasing our royalty income.
Ennex's shareholding in Foroya Kolvetni has been reorganised into Faroe
Petroleum plc, which has been listed successfully on the Alternative Investment
Market (AIM) in London. At the placing price of the shares our stake is worth
circa $800,000 after an impairment charge of $577,000 in 2002.
Ennex disposed of its interest in the Shaimerden Zinc deposit in Kazakhstan in
October 2002 for an initial consideration of $200,000 to be satisfied mainly
through the issue of new ordinary shares in ZincOx Resources plc. More
importantly, Ennex will receive a production royalty of US$ 15 per tonne of zinc
recovered from the deposit. The purchaser has the option to buy out the royalty
for US$ 4.5 million within four years from the date of signing of the agreement.
Based on the current reserves estimated in the deposit, Ennex can expect a
royalty income of approximately US$13.5 million over the life of the mine should
it proceed to development. Recently we were informed that a feasibility study is
being completed to develop an operation capable of producing 60,000 tonnes of
metal per annum. A turnkey development with a local engineering company is
envisaged following completion of environmental and hydrogeological work.
Overburden stripping for the mine is planned to commence before the end of 2003.
Our remaining Irish mineral interests were also disposed of by joint venture and
assignment of interests to Minco plc.
In a separate agreement Ennex sold its royalty interest of 2% in the
Curraghinalt gold deposit for a consideration of 100,000 ordinary shares and one
million warrants in Minco. The project has not yet been put into production.
Ennex also disposed of a number of small shareholdings in publicly listed
mineral companies for cash.
The loss for the financial year reduced to $707,000 in 2002 from a loss of
$23,115,000 in 2001. The loss per ordinary share was $.25 cent in 2002 compared
to a loss of $10.79 cent in 2001.
We have significantly reduced the administrative overhead of the business to
$335,000 in 2002 from $630,000 in 2001.
The existing royalty income stream continues to provide adequate working capital
to cover administrative overhead and generated $407,000 in 2002 compared to
$119,000 for three months in 2001.
The notice convening the 2003 Annual General Meeting will be sent to
Shareholders in due course and at this meeting we expect to be in a position to
expand on our new developments in the oil and gas industry. We also expect over
the next few months to announce some executive and board appointments.
I wish to thank my fellow directors for their ongoing support and constructive
efforts on behalf of the company. The company has now completed its mineral
asset disposals and reorganisation programme. The finances and the operations of
the company have now been rationalised and we are now in a position to further
examine and exploit new and exciting oil and gas opportunities.
Brian Cusack
Chairman
Financial Information
2002 2001
US$'000 US$'000
Turnover 407 119
Loss before taxation (662) (23,094)
Taxation (45) (21)
Loss attributable to shareholders (707) (23,115)
Loss per share in cents - basic and (0.25) (10.79)
diluted
Copies of the Company's Annual Report and Accounts are being posted to
shareholders today and are available, free of charge, from the Company's office
at 14 Upper Fitzwilliam Street, Dublin 2, Ireland, for a period of one month
from the date of this announcement.
Enquiries:
Brian Cusack
Chairman
Ennex International plc
Tel: + 353 87 257 54 76
Des Carville
Director
Davy Corporate Finance
Tel: + 353 1 679 63 63
This information is provided by RNS
The company news service from the London Stock Exchange
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