08-Jun-2009 Final Results
Introduction
I am delighted to report that on 27 May 2009, the Board of Cove Energy announced a number of “transformational developments”. These developments included my appointment as Non-Executive Chairman and the appointment of experienced oil industry executive, John Craven, as CEO, the adoption of a new oil and gas strategy, a proposed change of name to Cove Energy plc (”Cove Energy”) and the appointment of a new Nominated Adviser and Broker. I am now satisfied that the building blocks are in place to allow the Company to grow and prosper after spending a number of years at a low level of activity whilst the Board searched for the right combination of personnel and opportunity to build a sustainable and coherent strategy in order to create value for shareholders.
Board Changes
The Board announced on 27 May 2009 my appointment as Non-Executive Chairman and that of John Craven, founder and until recently CEO of Petroceltic International plc, as Chief Executive Officer, both appointments with immediate effect.
Tom O’Gorman, the outgoing Non-Executive Chairman, will continue on the Board as a Non-Executive Director. Brian Barrett, a founding Director, is stepping down from the Board and retiring as Company Secretary. The Board expresses its sincere appreciation to Brian for his work and commitment to the Company since its formation in 2003. Michael Nolan will act as Company Secretary going forward.
Iam a Petroleum Engineer and have spent my career working in the Royal Dutch Shell Group (“Shellâ€). I am currently Country Chairman for Shell in Algeria, prior to which I held the positions of Director External Relations for EP Africa from 2003-2005, Vice President EP for Russia (Salym, Sakhalin) from 2001 to 2003 and Vice President Iran (Soroosh and Nowrooz) from 1998 to 2001. Earlier in my Shell career he worked at the Shell head offices in The Hague from where he developed business in China, Iran and Russia. I have also held senior roles in the Philippines, Syria, Thailand and the UK. I graduated in 1980 with an MSc in Chemistry from Universiteit van Amsterdam.
John Craven is a petroleum geologist with thirty five years experience in senior technical and commercial roles in upstream oil and gas exploration and production companies. Prior to joining Cove Energy, he was founder and Chief Executive of AIM and IEX quoted, African and Mediterranean focussed, exploration company, Petroceltic International plc (“Petrocelticâ€). Petroceltic grew under his direction and stewardship to a business with a diversified portfolio of exploration and appraisal projects in Italy, Algeria and Tunisia.
In addition to the above, John brings with him a deep understanding of the investment community and a solid reputation earned following 35 years of delivery to shareholders.
Mr Craven has an MSc in Petroleum Geology from the Royal School of Mines in London and an MBA from Queens University in Belfast.
Prior to Petroceltic, he held senior management and Director roles in a number of quoted and private oil companies including Gulf Oil, Dana Petroleum and Vanco Energy.
New Oil and Gas Strategy
Cove Energy’s strategy is to identify and acquire oil and gas assets in the early phase of the upstream life-cycle and mature them into marketable opportunities for the medium and larger oil and utility companies. The Company’s initial focus will be on Africa and the Mediterranean. The Company will be “opportunity driven†but the objective is to target assets in areas where larger oil companies are not yet active or have overlooked opportunities. Cove Energy will also seek out assets owned by companies in distress as a result, for instance, of the current global economic climate.
The Company intends to operate with a minimum level of staffing but with a larger experienced “virtual†skills-pool from where it can draw on relevant experience on a case-by-case basis. The Company intends at the outset to partner and joint venture with investors and associates who will support Cove Energy with commercial skills and influence in areas where the Company intends to grow its business.
The strategy will be implemented and driven jointly by John Craven and Michael Blaha. A management team commensurate with the escalating requirements of the business is being assembled and further appointments will be confirmed over the coming months.
The Company continues to hold the existing Swedish mineral licence in good standing, without significant financial obligations, and the Company will look to commercialise the mineral assets of Cove Energy AB in due course.
The Company has maintained a core treasury, in excess of £1 million, since late 2006. The Directors are aware that investments in new projects will require additional capital and funding options will be continually monitored by the Board, in tandem with the development of the new strategy.
Change of Name
The Directors will propose to shareholders at the forthcoming Annual General Meeting of the Company that the Company changes its name to Cove Energy plc in order to reflect the new oil and gas strategy. A new website www.cove-energy.com is under construction.
Annual General Meeting
The Annual General Meeting will be held at Brown’s Hotel London 11.30AM on Thursday 2nd July 2009. The Notice and resolutions in respect of this Annual General Meeting will be dispatched shortly along with the Annual Report and Accounts for the financial year ended 31 December 2008.
Appointment of new Nominated Adviser and Broker
The Board appointed London based Cenkos Securities plc as the Company’s AIM Nominated Adviser and Broker on 27 May 2009.
The Company is a UK registered company and, with the appointment of a UK based Nominated Adviser and Broker, the Board has requested that the Irish Stock Exchange cancel the quotation of the Company’s ordinary shares on the IEX Market with effect from 26 June 2009. The Company’s Ordinary Shares will continue to be traded on AIM.
Swedish Mineral Properties
Following an independent review of the licence blocks held by the Company since 2004, the Company decided in August 2007 to reduce its existing ground holdings and it has also taken the opportunity to acquire a new property.
The following Table set outs the revised Claim Table following the payments in August 2007 to the Swedish Mining Directorate (Sw: Bergsstaten) of the relevant licence fees and renewal fees, as applicable:
| Exploration Licence | Elements Covered | Claim Area | Licence | Licence |
| Name | Under Licence | (hectares) | Renewed/Applied | Expires |
| Tjårro Nr 1 | Fe, Au, Cu | 2, 241 | August 2007 | August 2010 |
Glossary of symbols: Au - Gold, Cu - Copper, Fe - Iron.
The Company continues to hold the existing Swedish mineral licence in good standing, without significant financial obligations, and the Company will look to commercialise the mineral assets of Cove Energy AB, a wholly owned subsidiary of the Company, in due course.
Financial Results
The net loss for the year before tax amounted to £321, 579 (2007 profit £15,006). The main component in the loss for the year was an impairment charge taken against the carrying values of the Swedish mineral assets of £222,156 (2007: Nil). Net interest received in the year decreased to £55,643 compared to £71,047 in the previous period. This loss, in addition to the impairment charge included administration costs and other costs incurred in investigating new oil and gas opportunities under the 2008 arrangements with Cheliston Consultancy Limited, now terminated.
Total assets at 31 December 2008 of E1, 278,233 (2007: £1,594,463) included £1,133,655 in cash balances (2007: £1, 236,930).
Annual Report
The Directors’ Report and Financial Statements for the year to 31 December 2008 will be posted to shareholders in the near future and copies can be obtained on the Company’s web site at www.cove-energy.com.
I am pleased that we are on the cusp of creating a new oil and gas company with Cove Energy plc and I would like to thank current and former Directors and all those who have assisted us in any way to arrive at this pivotal juncture in the Company’s history.
Michael Blaha
Chairman
8 June 2009
Cove Energy Plc
| Group Income Statement | ||
| for the year ended 31 December 2008 | 2008 | 2007 |
| £ | £ | |
| Administrative Expenses | (155,066) | (56,041) |
| Impairment of exploration and evaluation assets | (222,156) | - |
| Group Operating Loss | (377,222) | (56,041) |
| Finance Revenue | 55,643 | 71,047 |
| (Loss)/profit on ordinary activities before taxation | 321,579 | 15,006 |
| Tax on (Loss)/profit on ordinary activities | - | - |
| (Loss)/profit of the year | 321,579 | 15,006 |
| Accumulated (loss) brought forward | 162,140 | 177,146 |
| Accumulated (loss) carried forward | 483,719 | 162,140 |
| Earnings per share: | ||
| Basic profit/ (loss) per share | (1.44 pence) | (0.7 pence) |
| Diluted profit/ (loss) per share | (1.44 pence) | (0.7 pence) |
The results of the year all arise on continuing operations.
Cove Energy Plc
| Group Balance Sheet | ||
| as at 31 December 2008 | ||
| 2008 | 2007 | |
| £ | £ | |
| Assets | ||
| Non-Current Assets | ||
| Intangible Assets | 88,822 | 298,330 |
| Property, Plant and Equipment | - | 666 |
| 88,822 | 298,996 | |
| Current Assets | ||
| Trade and other receivables | 55,756 | 58,537 |
| Cash and cash equivalents | 1,133,655 | 1,236,930 |
| 1,189,411 | 1,295467 | |
| Total Assets | 1,278,233 | 1,594,463 |
| Equity and Liabilities | ||
| Equity | ||
| Called up share capital | 222,683 | 222,683 |
| Share premium account | 1,500,823 | 1500,823 |
| Share based payment reserve | 9,997 | 9,997 |
| Foreign currency translation reserve | (7,172) | 10,668 |
| Retained loss | (483,719) | (162,140) |
| Attribute to Equity Shareholders | 1,242,612 | 1,582,031 |
| Liabilities | ||
| Current Liabilities | ||
| Trade and other payables | 35,621 | 12,432 |
| Total Liabilities | 35,621 | 12,432 |
| Total Equity and Liabilities | 1,278,233 | 1,594,463 |
Cove Energy Plc
| Group Cash Flow Statement | ||
| for the year ended 31 December 2008 | ||
| 2008 | 2007 | |
| £ | £ | |
| Cash flows from operating activities | ||
| Net loss for the year before taxation | (377,222) | (56,041) |
| Adjustments for : | ||
| Foreign exchange gain | (30,488) | (1,752) |
| Depreciation | - | 440 |
| Write down of deferred exploration costs | 222,156 | 10,158 |
| Loss on disposal of fixed assets | 666 | - |
| Decrease /(Increase) in debtors | 2,781 | 38,107 |
| Increase / (Decrease) in creditors | 23,189 | 5,834 |
| Net cash used in operating activities | (158,918 ) | (91,136) |
| Cash flows from investing activities | ||
| Expenditure on exploration activities | - | (10,087) |
| Interest received | 55,643 | 71,047 |
| Net cash from investing activities | 55,643 | 60,960 |
| Net (Decrease)/ Increase in cash and cash equivalents | (103,275) | (30,176) |
| Cash and Cash equivalents at beginning of year | 1,236,930 | 1,267,106 |
| Cash and Cash equivalents at end of year | 1,133,655 | 1,236,930 |
Cove Energy Plc
Group Statement of Changes in Equity
for the year ended 31 December 2008.
| Share Based | Foreign | |||||
| Share | Share | Payment | Exchange | Retained | ||
| Capital | Premium | Reserve | Reserve | Losses | Total | |
| £ | £ | £ | £ | £ | £ | |
| Balance at 1 January 2007 | 222,683 | 1,500,823 | 9,997 | - | (176,146) | 1,556357 |
| Profit for the year | - | - | - | - | 15,006 | 15,006 |
| Foreign exchange difference | - | - | - | 10,668 | (162,140) | 1,582,031 |
| Balance at 31 December 2007 | 222,683 | 1,500,823 | 9,997 | 10,668 | (162,140) | 1,582,031 |
| Balance at 1 January 2008 | 222,683 | 1,500,823 | 9,997 | 10,668 | (162,140) | 1,582,031 |
| Loss for the year | - | - | - | - | (321,579) | (321,579) |
| Foreign exchange difference | - | - | - | (17,840) | - | (17,840) |
| Balance at 31 December 2008 | 222,683 | 1,500,823 | 9,997 | (7,172) | (483,719) | (1,242,612) |
BACKGROUND
Lapp Plat plc and its subsidiary are involved in development of Oil and Gas Exploration and Minerals Exploration projects. The company is a public limited company incorporated in England. The Group has operation in Sweden and considers pursuing projects on a world wide basis. The company’s shares are quoted on the AIM market of the London Stock Exchange (LPP.L) and on the IEX market of the Irish Stock Exchange (LPC.IR).
STATEMENT OF COMPLIANCE AND BASIS OF PREPARATION
As permitted by the European Union and in accordance with AIM and IEX Rules, the Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and their interpretations issued by the International Accounting Standards Board (IASB) as adopted by the EU (IFRS). IFRSs adopted by the EU as applied by the company and the Group in the preparation of this financial statements are those that were effective at 31 December 2008.
The preliminary statement is not the company’s statutory accounts. The statutory accounts for the year ended 31 December 2008 have been approved by the Directors and have received an unqualified audit opinion that does emphasize that the realisation of the carrying value of intangible assets (£88,822) is dependent on a number of factors some of which are not with in control of the company.
The full Annual Report 2008 of the company will be avialable on the Cove Energy plc web site www.cove-energy.com.
FOR FURTHER INFORMATION PLEASE CALL:
Cove Energy plc
Michael Blaha, Chairman Tel: + 353 1 662 4351
John Craven, CEO
Cenkos Securities
Jon Fitzpatrick / Ken Fleming Tel: + 44 (0)131 220 6939
Financial Dynamics
Billy Clegg / Edward Westropp Tel: +44 (0)20 7831 3113