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Nautical Petroleum plc Annual report and accounts 2010
18
Finance Director’s review
Will Mathers
Finance Director
Subsequent to year end in
August 2010 we completed
a private placing raising
a net £28.8m. Upon
completion the partial
sale of Mariner will provide
additional funding of £87.5m.
These events, combined
with the improved share
price, have significantly
strengthened the financial
position of the Group.
The year ended 30 June 2010 was a pivotal
period for Nautical. We continued to
manage our portfolio and cash resources
wisely during the year and remained debt
free. Subsequent to year end in August
2010 we completed a private placing
raising a net £28.8m. Upon completion the
partial sale of Mariner will provide
additional funding of £87.5m. These events,
combined with the improved share price,
have significantly strengthened the
financial position of the Group.
Results
The Group made a loss after taxation of
£2.3m for the year (2009: £5.9m). This
included exploration write-offs of £0.2m
(2009: £4.1m), pre-licence expenditure of
£0.4m (2009: £0.5m) and administrative
expenses of £1.6m (2009: £1.6m).
Revenue of £68K received during the year
was attributable to the onshore Keddington
field. Interest income of £0.3m (2009: £0.8m)
was down significantly from the prior year
due to continuing low interest rates and the
reduced cash resources of the Group in
comparison to the prior year. The result
included a £0.1m foreign exchange loss
(2009: £0.5m gain), comprising of a £0.3m
loss on the revaluation of the conditional
liabilities denominated in US dollars and a
gain of £0.2m on US dollar cash balances.
Administration costs of £1.6m included
£1.0m (2009: £1.0m) related to staff costs
and a non cash charge of £0.1m (2009:
£0.2m) arising from new share options
issued to Directors and employees in
January 2010. The taxation gain of £0.2m
(2009: £0.7m gain) has arisen from
movements on the deferred tax liability
relating to an increase in tax losses of
£1.8m offset by an increase in capital
allowances of £1.6m.
Statement of Financial Position
As at 30 June 2010, the Group had net
assets of £57.7m (2009: £59.8m), dominated
by capitalised exploration and evaluation
assets of £55.3m (2009: £48.9m) and cash
and deposits of £11.7m (2009: £19.1m).
Exploration and evaluation assets of
£55.3m include capitalised costs of £31.1m
for Mariner (Block 9/11a), £20.3m for Kraken
(Block 9/2b) and £2.2m for Catcher
(Block 28/9).
The Group remains debt free and Nautical’s
£7.5m secured debt facility with the Bank
of Scotland (Lloyds Banking Group)
remains undrawn and available for working
capital purposes.
Cash flow
Our net cash spend for the year was £8.3m,
resulting in cash and deposits at year end
of £11.7m.
In addition to net expenditure on operating
expenses of £1.7m the Group incurred
expenditure of £6.6m (2009: £11.5m) on its
exploration and evaluation assets during
the year, which included £3.0m spent on
Mariner, £0.9m on Kraken, £2.1m on
Catcher and £0.6m on the remaining
portfolio.
Post Balance Sheet Events
Subsequent to the year end, Nautical
successfully completed a placing of
24,280,000 New Ordinary Shares at a
price of 125 pence per share to raise
gross proceeds of £30.35m (£28.8m net
of expenses). The price of 125 pence
represented a 12.6% discount to the closing
price of the shares upon the announcement
of the placing. Following the admission of
the shares on 31 August 2010 there are
87,688,291 shares in issue.
In addition to the primary placing a
secondary placing was completed which