RNS Number : 5347F
Portland Gas plc
10 October 2008
Immediate Release 10 October 2008
Portland Gas plc
Preliminary results for the year ended 31 July 2008
Portland Gas plc (AIM: PTG) ("the Company" or "Portland Gas") the independent gas storage company is pleased to announce preliminary
results for the year ended 31 July 2008.
On 16 January 2008 the Company was introduced to AIM via a demerger from its former parent company Egdon Resources Plc. The Company
presents consolidated results for the financial year on a merger accounting basis.
Operational and corporate highlights
* Demerger from Egdon Resources completed successfully
* Dorset County Council and the Department for Business, Enterprise and Regulatory Reform granted approvals for the Portland
Project
* With advice from NM Rothschild & Sons Limited a process commenced to raise the Portland Project financing requirements through the
introduction of joint venture partners
* An exploration licence received and seismic data acquired for the Larne Lough Project
* Northern Ireland Energy Holdings Limited became a strategic joint venture partner in the Larne Lough Project
* Environmental Impact Assessment initiated for the Larne Project
* The Group has continued to evaluate international gas storage opportunities
Financial highlights
* Loss for period of �1,569,621 (2007; �208,515) inclusive of demerger costs of �430,610
* Loss per share of 2.33p (2007; 0.33p)
* Net cash as at 31 July 2008 �9,276,964 (2007; �3,436,695)
* Capitalised expenditure on gas storage projects during the year of �7,360,442 (2007; �5,005,778)
* Completion of institutional placing on 11 July 2008 to raise �8,640,000 net of expenses
Chief Executive's Report
On 16 January 2008 Portland Gas demerged from the oil and gas exploration business of Egdon Resources Plc to form an independent
sub-surface gas storage company listed on AIM and has now entered an exciting phase of the Group's development.
On 11 July 2008 the Company completed a placing of 2,535,211 new ordinary shares of 10p each at 355p per share to raise �9 million
before expenses. The net proceeds of the placing are to be applied to support the advanced work on the Portland gas storage project, to
provide the funds to drill a confirmation borehole for the Larne Lough project and to provide funds to develop further storage
opportunities. In addition 47,676 shares were issued to certain Directors at 409p in lieu of cash bonuses on 27 May 2008. Following the
placing, the number of issued and fully paid shares increased to 70,384,727.
Portland Project
In May 2008 the planning committee of Dorset County Council granted planning permission to Portland Gas Storage Limited to build a deep
underground salt cavern facility at Portland, Dorset. In July 2008, approval was received from the Department for Business, Enterprise and
Regulatory Reform (BERR) to construct a 37 kilometre gas pipeline to connect the underground salt cavern storage facility at Portland to the
National Transmission System. Permission was also granted for a 16 kilometre brine pipeline between Stafford Farm, near Dorchester, and
Portland.
In August 2006 NM Rothschild & Sons Limited were appointed to advise upon the best means of raising the necessary finance to construct
the Dorset project. The Group has embarked upon a process following the grant of planning permission to fund the development through the
introduction of partners into a project joint venture structure.
Full construction of the Dorset project is anticipated to take seven years with initial gas storage operations commencing in 2011.
Larne Lough Project
In May 2008 the Company announced that it had entered into an agreement with Northern Ireland Energy Holdings Limited to become a joint
venture partner in the Larne Lough project. 3D seismic data was acquired in the year and has indicated that the area should be suitable for
the creation of a sub-surface gas storage facility under Larne Lough where Portland Gas NI Limited was granted an exploration licence in
2007. An Environmental Impact Assessment is currently being undertaken.
Storage asset portfolio development
The Group has continued to evaluate international gas storage opportunities, particularly in the liberalised markets of Europe.
Outlook
The 2008/9 financial year will again be an active time for the business.
The Group looks forward to the introduction of joint venture partners to the Portland Project and to continuing the development and
construction of the Upper Osprey site.
Portland Gas NI Limited plans to drill a borehole at Larne Lough in order to confirm the suitability of the salt sequence for the
creation of caverns for gas storage and to complete the Environmental Impact Assessment. It is anticipated this will result in an
application being made for planning permission during 2009.
In addition the Group will continue in its stated objective of developing an international gas storage business.
Portland Gas plc
Consolidated income statement
For the year ended 31 July 2008
_________________________________________________________________________< /fipP>
Notes 2008 2007
� �
Continuing operations
Revenue - -
Cost of sales - -
Gross profit/(loss) - -
Administrative expenses (1,767,017) (351,708)
Operating loss (1,767,017) (351,708)
Investment revenues 197,396 143,193
Loss before taxation (1,569,621) (208,515)
Taxation - -
Loss for the period (1,569,621) (208,515)
Basic and diluted loss per share 1 2.33p 0.33p
Portland Gas plc
Consolidated balance sheet
As at 31 July 2008
_________________________________________________________________________ __
2008 2007
� �
Non-current assets
Plant and equipment 15,195,167 4,400
Intangible assets 1,263,659 9,049,439
Total non-current assets 16,458,826 9,053,839
Current assets
Trade and other receivables 305,520 328,336
Available for sale financial assets 12,500 -
Cash and cash equivalents 9,276,964 3,436,695
Total current assets 9,594,984 3,765,031
Current liabilities
Trade and other payables (1,408,848) (1,441,298)
Net current assets 8,186,136 2,323,733
Non-current liabilities
Obligations under contractual and lease
agreements due after one year (1,963,519) -
Net assets 22,681,443 11,377,572
Shareholders' funds
Share capital 7,038,473 117,782
Share premium 8,576,705 -
Merger reserve 8,988,112 11,650,514
Share based payment reserve 38,498 -
Retained earnings (1,960,345) (390,724)
22,681,443 11,377,572
Portland Gas plc
Consolidated statement of changes in equity
For the year ended 31 July 2008
_________________________________________________________________________ ____
Share Capital Merger reserve Share based payment Retained earnings Total equity
reserve
Share premium
� � � � � �
Balance at 31 July 2006 100 - (182,209) (182,109)
- -
Loss for the period - - - - (208,515) (208,515)
Total recognised income and
expenses for the period - -
- - (208,515) (208,515)
Issue of equity share capital 117,682 11,650,514
- - - 11,768,196
Balance at 31 July 2007 117,782 11,650,514 - (390,724) 11,377,572
-
Loss for the period - - - - (1,569,621) (1,569,621)
Total recognised income and
expenses for the period - -
- - (1,569,621) (1,569,621)
Issue of equity share capital 40,000 3,960,000
(pre- demerger)
- - - 4,000,000
Portland Gas plc 6,622,402 (6,622,402)
capitalization - - - -
Issue of equity share capital 258,289 -
(post-demerger)
8,576,705 - - 8,834,994
Share based payments - -
- 38,498 - 38,498
Balance at 31 July 2008 7,038,473 8,988,112 38,498 (1,960,345) 22,681,443
8,576,705
Portland Gas plc
Consolidated cash flow statement
For the year ended 31 July 2008
_________________________________________________________________________ __
Notes 2008 2007
� �
Net cash (used in) operating activities (1,275,246)
2 (4,682,415)
Investing activities
Interest received 197,396 143,193
Purchase of intangible assets (5,645,493) (3,748,890)
Purchase of plant and equipment (63,887) (4,843)
Purchase of financial assets (12,500) -
Net cash (used in) investing activities (5,524,484) (3,610,540)
Financing activities
Proceeds on issue of ordinary shares 12,639,999 11,768,196
Net cash generated from financing activities 12,639,999 11,768,196
Net increase in cash and cash equivalents 5,840,269 3,475,241
Cash and cash equivalents at beginning of 3,436,695 (38,546)
year
Cash and cash equivalents at end of year 9,276,964 3,436,695
Cash and cash equivalents consist of:
Cash in hand and at bank 9,276,964 117,319
Short term bank deposits - 3,319,376
�9,276,964 �3,436,695
Portland Gas plc
Notes to the financial statements
As at 31 July 2008
_________________________________________________________________________ ____
1. Loss per share 2008 2007
p p
Basic loss per share 2.33 0.33
The calculation of basic loss per share is based upon a loss of �1,569,621 (2007;
�208,515) divided by the weighted average number of ordinary shares in issue of
67,381,698 (2007; 63,392,512 being the Egdon Resources Plc weighted average number of
shares in issue).
In accordance with IAS 33, diluted earnings per share calculations are not presented
as assumed conversion of outstanding share options would be anti-dilutive; as such the
diluted earnings per share is equal to the basic loss per share.
2. Cash (used in) operations 2008 2007
Group � �
Operating loss for the year (1,767,017) (351,708)
Depreciation 19,342 443
(Increase)/Decrease in trade and other
receivables 22,816 5,666
(Decrease) in trade and other payables 216,121 (4,336,816)
Share option expense 38,498 -
Shares issued in lieu of bonus 194,994 -
Cash (used in) operations (1,275,246) (4,682,415)
3. Basis of preparation
The financial information set out in this announcement, which does not constitute the statutory accounts of the Group, is extracted
from the
consolidated audited statutory accounts for the year ended 31 July 2008, which were approved by the Board on 9 October 2008. The
auditors have reported
on these accounts in accordance with section 235 of the Companies Act 1985. Their report was unqualified and did not contain a
statement under section
237(2) or 237(3) of the Companies Act 1985. The statutory accounts for 2008 will be delivered to the Registrar of Companies after the
Annual General
Meeting. These results have been prepared on the basis of the accounting policies adopted in the interim accounts for the interim
period ended 31
January 2008.
4. Approval
The preliminary announcement was approved by the Board on 9 October 2008.
For further information please contact:
Portland Gas plc
Andrew Hindle, Chief Executive Officer 020 8332 1200
Craig Gouws, Chief Financial Officer
PR - Watershed
Sara Hudston 01308 420785
Investor Relations - Buchanan Communications
Ben Willey 020 7466 5000
Nominated Advisor and Broker - Seymour Pierce
Jonathan Wright 020 7107 8000
Sarah Jacobs
Richard Redmayne
Notes to Editors:
Background on Portland Gas
Portland Gas' business focuses on the development of gas storage projects and associated infrastructure in the United Kingdom and
internationally. It currently has two projects in its portfolio, the first on Portland, for which planning permission was granted by Dorset
County Council in May 2008 and Pipeline Construction Authorisation was granted by the Department of Business Enterprise and Regulatory
Reform in July 2008. The second project is at Larne Lough in Northern Ireland and the Company is progressing further new venture projects in
Europe. Further information is available on the Company's website www.portland-gas.com. The company is one of only a few in Europe focused
specifically on gas storage development, a sector with significant growth potential given the projected significant increase in demand for
gas in Europe over the coming decades.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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