| MARCH 2001- RELEASES |
| ACTIVITY UPDATE (30-03-01) |
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1. APPRAISAL DRILLING 1.1 UK
Onshore: Eskdale-13: (ROC: 5% free carried) 1.2 UK North Sea: Chestnut Oil Field (ROC: 29.75% carried) As of 29 March 2001, (UK time), the Chestnut Field appraisal well, 22/2A-11, in UK North Sea licence P 354, was preparing to drill ahead in a side track hole at a depth of 2489 metres, several hundred metres above the anticipated reservoir.
2.1 UK North Sea: Kyle Oil Field (ROC: 12.5%) Final preparations are underway for the start of full-scale oil production from the Kyle Field via the Curlew Field's floating production facilities. First oil is expected to flow next week.
3.1 Onshore UK: South Humber Basin (ROC: 100% and Operator) A 50km 2D seismic survey in PEDL 76 in the South Humber Basin has been completed. It was possible to carry out the survey despite the Foot-and-Mouth disease restrictions in the UK, because it only used roads and non-agricultural paths. These restrictions, however, continue to cause the postponement of the planned 400 sq km 3D survey, and, with no sign of an end to the disease or the associated restrictions, it is not possible to forecast when this survey will commence. 3.2 Equatorial Guinea: Rio Muni Basin (ROC: 60% and Technical Partner) The 100% ROC-funded, 1380 sq km, 3D seismic survey in Blocks H15 and H16 in the deep water offshore Equatorial Guinea is essentially complete except for the acquisition of some infill lines which is expected to be completed within the next day or two.
The 2000 Annual Report has been lodged with ASX and put on the Company's website ahead of mailing to shareholders at the beginning of next week. Dr
John Doran |
| ACTIVITY UPDATE (21-03-01) |
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1. APPRAISAL DRILLING 1.1 UK
Onshore: Eskdale-13: (ROC: 5% free carried) 1.2 UK North Sea: Chestnut Oil Field (ROC: 29.75% carried) As of 20 March 2001, UK time, the Chestnut Field appraisal well, 22/2A-11, in UK North Sea licence P 354, was preparing to drill a side track hole after the well had been plugged back to 1770 metres following difficult hole conditions which were encountered just prior to running the 9 5/8 inch casing.
2.1 UK North Sea: Kyle Oil Field (ROC: 12.5%) Final preparations are underway for the start of full-scale oil production from the Kyle Field via the Curlew Field's floating production facilities. First oil is expected to flow within 2 weeks. 3.1 Onshore UK: Saltfleetby Gas Field (ROC: 100% and Operator) During February
2001, Saltfleetby gas sales averaged 40.6 MMSCFD, and the average (spot
and contract) price achieved was 22.3 pence per therm (A$6.71/MCF) which
is the highest average monthly price received since the field came on-stream
in December 1999. As previously reported (ROC's ASX Release 1 March 2001)
the decline in Saltfleetby production is largely a reflection of the natural
decline in production from the Saltfleetby-5 well which produced more
than 1 billion cubic feet of gas within four months of coming onto production.
3.2 Mongolia: East Gobi Basin (ROC: 100% and Operator) Production at ROC's field facility in the Gobi Desert has continued through a particularly harsh Mongolian winter. Current production rates approximate 150 BOPD and there is approximately 21,000 barrels of oil in storage awaiting shipment and export sale to China which is expected to occur in 2Q01.
4.1 Onshore UK: South Humber Basin (ROC: 100% and Operator) A 50km 2D seismic survey in PEDL 76 in the South Humber Basin is scheduled to be completed later this week. It was possible to carry out the survey despite the Foot-and-Mouth disease restrictions in the UK, because it only used roads and non-agricultural paths. These restrictions, however, continue to cause the postponement of the planned 400 sq km 3D survey, and, with no sign of an end to the disease or the associated restrictions, it is not possible to forecast when this survey will commence. 4.2 Equatorial Guinea: Rio Muni Basin (ROC: 60% and Technical Partner) The 1380
sq km 3D seismic survey in Blocks H15 and H16 in the deep water offshore
Equatorial Guinea is 80% complete. The survey, which is 100% funded by
ROC, has been essentially trouble-free and is expected to be finished
by the beginning of April 2001. Dr
John Doran |
| DRILLING ACTIVITY UPDATE (12-03-01) |
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1. UK ONSHORE: ESKDALE-13: (ROC: 5% FREE CARRIED) As of 12 March 2001, the Eskdale-13 appraisal well in PEDL 002 had run and cemented 7 inch casing to a depth of 1375 m and the rig was picking up drill pipe to drill ahead in 6 inch hole. 2. UK NORTH SEA: CHESTNUT OIL FIELD (ROC: 29.75% CARRIED) As of 12 March 2001, the Chestnut Field appraisal well, 22/2A-11, in UK North Sea licence P 354, was preparing to set 9 5/8 inch casing prior to drilling an extended horizontal section to a planned Total Depth of 3750 m. If the well is successful, an Extended Well Test will be carried out to evaluate fully the long term production potential of the Chestnut Field. Dr
John Doran |
| FINANCIAL PRESENTATION RELEASE (08-03-01) |
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Following the release to ASX on 07-03-01 of financial information pertaining to ROC Oil Company Limited results for the Full Financial Year 2000, Senior Executives of the Company plan to make presentations to members of the investment community at which the following presentation will be presented in the public domain for the first time. In order to ensure an optimum and balanced dissemination of data, the presentation may be viewed at the following link - 2001 Presentations. Dr
John Doran |
| CEO ON STRONG PROFIT & OUTLOOK (07-03-01) |
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Below is a transcript of interview ROC's CEO had with corporate.com OPEN BRIEFING - ROC's CEO ON STRONG PROFIT Record of interview: corporatefile.com Roc Oil Company Limited recently released a $17.5 million after tax profit before abnormal items, exploration expenses and write-offs for the year to December 31, 2000. Can you please explain how you exceeded your profit forecast of a full year profit of $13.1 million? CEO John Doran The two main reasons were that production and gas prices from the Saltfleetby Gas Field (ROC: 100%) exceeded our expectations. Saltfleetby stayed on production plateau rates until mid-year despite the expectation that natural field decline would occur before the end of the March quarter. Gas production averaged well over 40 MMSCFD day until the September quarter and even then it was averaging 37 MMSCFD but by November it was back above 40 MMSCF thanks to another successful appraisal well, Saltfleetby-5. corporatefile.com On December 2000 earnings and a share price of $1.25, ROC is trading on a price to cash flow multiple of around 2.5 times and a price to earnings ratio of 8.5 times. Do you believe you now have established ROC's credentials as an oil and gas producer? CEO John Doran We have stuck to our original strategy of building a company with secure production in a country that is well regarded by the investment community. If it couldn't be Australia because of the lack of opportunities at the time, then it certainly had to be the UK. Last year we fulfilled our primary objective with strong gas production in the UK and we will soon be producing oil from our first life of field development in the North Sea. Cash flow from operations was $56 million ($0.53 per share) and ROC had no net debt as at December 31, 2000. In 2000, sales revenue and proceeds from the sale of non-core assets totalled $153 million while ROC's market capitalisation was close to $130 million. There aren't many resource companies which have a market capitalization which is less than the cash they generated from sales revenue and non-core asset sales over a 12 month period. ROC also had appraisal success with Saltfleetby and Kyle (ROC: 12.5%). A conservative valuation of those two main assets exceeds ROC's current market capitalisation. The market has not recognised the Company's achievements and that is why one of ROC's management's goals for 2001 is to broaden market awareness of the Company's fundamental value. corporatefile.com How have gas sale prices fluctuated from your main production asset, Saltfleetby, over the year? CEO John Doran During 2000, we sold about 45% of our gas production through an established gas contract which was put in place by the asset's previous owner in order to allow the field development to proceed. The balance of our gas was sold on the UK spot market, which was very strong through the year and generally ranged above A$6.00/MCF to as high as A$12.00/MCF, although the latter heights were only reached for very short periods. However, when you compare those prices to a typical onshore Australian gas price of around A$2.00/MCF, the attractions of UK gas production become pretty obvious. If you then add to this equation Britain's favourable fiscal regime and the tax benefits which ROC acquired though the acquisition of its UK portfolio, it can be seen that the advantages which ROC derives from its UK production base are not easily replicated in other parts of the world. corporatefile.com What is the outlook for gas prices in the UK? CEO John Doran That's about as easy to answer as the outlook for oil prices. Most people are bullish on gas prices and do not anticipate any dramatic fall in the immediate future. Whether there has been a long-lasting upward paradigm shift in prices remains to be seen. For ROC's budgeting purposes, we tend to be a little circumspect. corporatefile.com On March 1, 2000 you sold your non-core onshore U.K. oil properties for $57 million, which was an abnormal profit of $18 million after tax. The deal allowed for as much as $13 million in additional cash bonuses if the Brent oil price remains strong and realistic production targets were met by the new owners of those assets. Did you receive any additional payments in 2000 and when will these payments finish? CEO John Doran The first payment is due at the end of March 2001 and the next at the end of March 2002. The oil price and the level of production dictate the size of the payments. We will be receiving a significant cash bonus, in excess of $4 million, for the 12 months to March 31, 2001. corporatefile.com In November 2000, ROC drilled the first well to produce from the Namurian sequence Saltfleetby?5. What further production potential exists in the Namurian? CEO John Doran Production from the Namurian reservoir is a bonus - the icing on the cake - because it was never viewed as being the major part of the field. Its potential in the South Humber Basin cannot be quantified at the moment, although it is now clearly regarded as an additional, and very legitimate, reservoir target. At Saltfleetby, the Namurian has already produced more than 1 BCF of gas and we'll continue to monitor future production to get a better insight into its ultimate potential. corporatefile.com Production from Saltfleetby averaged around 40 million cubic feet a day in February 2001 and averaged above that rate for 2000. What production profile do you expect for the rest of the year? CEO John Doran Ever since we started producing gas at Saltfleetby we have been talking about natural field decline and although it is happening it is much slower than originally expected. The extent of the decline during 2001 will depend on a number of factors including whether or not another successful appraisal well is drilled, this time in the southern part of the structure, and whether or not we install compression facilities. Overall production is expected to average in excess of 30 MMSCFD during 2001. Importantly, any decline at Saltfleetby is expected to be more than offset by the onset of oil production from the Kyle Oil Field (ROC: 12.5%) in the UK North Sea where full life of field production is due to commence within one month. corporatefile.com What production life do you expect from Saltfleetby? CEO John Doran Five to eight years. If we use the field for gas storage, its life will probably be nearer the lower end of that range but its revenue generating potential will then be renewable every year. corporatefile.com In 2000, ROC's share of oil and condensate production was over 711,000 barrels. What do you expect for ROC this year? CEO John Doran It should be almost double that because of the start-up of production from the Kyle Oil Field scheduled for late March/early April. ROC's 12.5% beneficial share should add more than 2,000 BOPD to the Company's production. corporatefile.com How long do you expect Kyle to be in production? CEO John Doran Five to seven years. corporatefile.com Can you give an update on the progress of Chestnut (ROC: 29.75% free carried) and what it means for ROC's growth profile? CEO John Doran We are currently drilling an appraisal well at Chestnut and the results will be known within four to six weeks. We are being carried through to production and if the well is successful ROC will be looking at its second North Sea field development in as many years - but this one would have the added bonus of not requiring ROC to make any initial capital expenditure. corporatefile.com Has the Blane Oil Field dropped off the agenda? CEO John Doran No, it's still on the agenda. The Prospectus stated that nothing was planned for the Blane Field until 2005. In this sense things have moved fairly quickly and appraisal activity is more imminent than that. Blane straddles the international boundary between Norway and the UK - not an uncommon situation in the North Sea - and discussions as to how to progress the further development of the field, which will involve the drilling of an appraisal well, are underway with all relevant parties. corporatefile.comROC had cash of $56 million and was free of net debt as at December 31, 2000. Do you expect to remain free of net debt as developments such as Kyle and Chestnut come into production? CEO John DoranEssentially, yes. If we don't remain free of net debt we will be very close to it. corporatefile.com What are the ramifications for ROC after your exploration program in the South Humber Basin was delayed indefinitely after the outbreak of Foot and Mouth Disease in the UK? CEO John Doran We took the initiative to delay the survey at a very early stage because of the concern for the farming community that we live and work with in that area. However, it is only delay, albeit one that could last for several weeks or several months and could ultimately see the main part of the survey fall into next year. Whatever the length of delay, it will have a commensurate effect on the start of ROC's drilling campaign, but drilling was not expected to start until late 2001 in any case. As soon as the community receives the all clear, we will start exploration and if that occurs soon the delay will not be onerous. corporatefile.com Proved and probable reserves at the end of 2000 were 33.6 million barrels of oil equivalent and that is unchanged from the end of 1999 despite strong production in the sale of the Welton oil reserves. How did you achieve that? CEO John Doran Most of it relates to in-field growth and part of it relates to acquiring a greater interest in the Chestnut Oil Field in the UK North Sea. Most people think that discovering new fields is the only way you can increase reserves. In reality, much of the industry, particularly the big companies, achieve reserve growth by adding to in-fields reserve estimates. That is exactly what ROC did. Saltfleetby is an excellent example. In early 1999, when we first saw the field, we thought it would have possibly 30 BCF of reserves but now, less than two years later and after a full year of production, we have gas reserve estimates of 73.5 BCF, based on an additional well and a revised geotechnical appraisal of the field. corporatefile.com What is the exploration program for this year and will you pursue opportunities in Mongolia, Mauritania and offshore Equatorial Guinea? CEO John Doran The short answer is "yes" for Mauritania and Equatorial Guinea. We are shooting a big 3D seismic survey in the deep waters offshore Equatorial Guinea as we speak. Offshore Mauritania ROC has this neat little option over 2.0 to 2.7 percent, including an area that will be subject to a Woodside-operated two well drilling programme during the second quarter of 2000. Few people think of ROC in this context, but if either of those Woodside wells are discoveries then it will be a nice little boost for ROC's West African strategy. In fact, we would suggest that ROC offers the market a uniquely safe entry to that play. As for Mongolia, we are not going to keep spending 100% of the funds needed to explore in the Gobi Desert because that level of risk exposure cannot be justified. Exactly how we curtail our expenditure exposure is something we are actively discussing with relevant third parties including the Government authorities in Ulaanbaatar. corporatefile.com What is ROC's exploration budget for this year? CEO John Doran For 2000 it will be in the order of $30 million. That will be spread mainly though the UK, Equatorial Guinea and, subject to rig availability, offshore Western Australia. corporatefile.com In December last year, ROC entered into oil price and gas price hedging contracts covering less than one third of your uncontracted 2001 oil production at an average Brent oil price of US$24.54 a barrel. Why have you taken this strategy on hedging? CEO John Doran We take a view that we have a natural hedge to some extent from our gas contract and therefore we have no intention of over-hedging. Equally we want to lock in some reasonable prices on a small part of our free unhedged production just to tighten the nuts and bolts on the budget forecast. We call that feather-touch hedging and, quite frankly, it is working quite well for us at the moment. corporatefile.com What is your 2001 profit outlook? CEO John Doran Our profit and sales revenue outlook for 2001 will be more of the same, or perhaps slightly better than last year, subject, of course, to the normal vagaries of product price. corporatefile.com Thank you John. We look forward to the next Open Briefing with Roc Oil.
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| UPDATE (07-03-01) |
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RECORD FINANCIAL RESULTS
This ASX release presents highlights from ROC's detailed full financial year 2000 results which were released to ASX earlier today accompanied by the statutory Appendix 4B. HIGHLIGHTS · $153 million cash generated from sales revenue ($91 million) and the sale of non-core onshore UK assets associated with the Welton Oil Field ($62 million); $26 million more than the Company's market capitalisation at end-2000. ·
33.6 MMBOE remaining proved and probable reserves at end 2000; unchanged
despite strong (9,227 BOEPD) production and the sale of the Welton oil
reserves · $15.1 million operating profit after tax; up $21 million despite exploration expenses, and exploration write-offs of $23.5 million, mainly related to activity in Mongolia. · $0.14 earnings per share, a $0.24/share turnaround from a negative $0.10/share. · 8.4 Price/Earning ratio at end-2000. · $17.5 million after tax profit before exploration expenses, exploration write-offs and abnormal items; 33% better than key equivalent Prospectus forecast despite the Welton oil production being sold and the Kyle Oil Field full life of field development being delayed to 2001. · $38 million trading profit before tax; up 470%. · $22.7 million operating profit before tax; a $28.1 million turnaround. · $56 million cash and short term deposits at end-2000; up 116%. · No net debt at end-2000 compares to $45 million net debt. US$30.5 million bank loan at end-2000; down US$15.5 million (34%). · $56 million cash flow from operations; $57 million turnaround. $0.53 cash flow per share; a $0.54/share turnaround. Price to cash flow at end-2000; 2.3 times. · $58 million EBITDA; $58 million turnaround. Enterprise value/EBITDA; 2.2 times.
- "In the current strong oil and gas price environment it is not too difficult for a company to achieve record results, particularly when reporting on its first full year of operations as a publicly-listed company. However, ROC's results for 2000 highlight certain elements of the Company's strategy and performance which are particularly relevant to all shareholders and potential new investors. Specifically: - By consistently implementing a corporate strategy that was precisely defined at the outset, and clearly articulated in its Prospectus, ROC has established a very sound business base in the UK which is an area with which the investment community appears to be very comfortable. The substantial revenue generated from ROC's UK operations is being used to further grow the Company, in its two niche areas (UK and Australia) as well as three other, carefully selected, parts of the world where ROC considers it has an edge advantage: the Middle-East, West Africa and certain parts of Asia. - While higher than expected oil, natural gas liquid and gas prices made a strong contribution to ROC's financial bottom line during 2000, the Company's budget planning for 2001 assumes a more subdued product price scenario. Nevertheless, subject to the usual vagaries, ROC expects its financial results for 2001 to be comparable with, or slightly in excess of, those reported for 2000. This expectation of continuing strong performance partly reflects the fact that, within the next month, first full life of field production is expected from the Kyle Oil Field (ROC: beneficial interest 12.5%) in the North Sea which will more than offset natural field decline at the Company's 100% owned Saltfleetby Gas Field. - Ironically, during a year when the Company delivered very satisfactory results, significantly in excess of the key Prospectus profit forecast, ROC's share price and market capitalisation dropped 17% to $1.20 and $127 million respectively. While ROC's fundamental value and share price appear to have gone in opposite directions during 2000, the Company firmly believes that an under-performing share price offers insufficient reason for ROC to change its core corporate strategy which has generally served the Company very well and which is clearly working on most fundamental fronts. However, one of management goals during 2001 will be to accelerate the investment community's recognition that ROC's share price performance severely understates the Company's fundamental value."
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| UPDATE (01-03-01) |
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1. EXPLORATION DRILLING
1.1 UK Onshore: Eskdale-13 (Roc: 5% free carried) 2. APPRAISAL DRILLING 2.1 UK North Sea: Chestnut Oil Field (Roc 29.75% carried) On 27 February 2001, UK time, the Chestnut Field appraisal well, 22/2A-11, in UK North Sea licence P 354, was drilling ahead in 17-1/2" hole at 1,207m in Miocene Clays, having set 20" casing at 358m. The hole is being drilled directionally to a planned Total Depth of 3750m. The target producing interval is a horizontal section in the Mid Eocene Nauchlan Sands. If the well is successful, an Extended Well Test of the horizontal well will be carried out to evaluate fully the long term production potential of the Chestnut Field. 3. DEVELOPMENT 3.1 UK North Sea: Kyle Oil Field (Roc: 12.5%) Work continues in preparation for the start of full scale Kyle production via the Curlew Field's production facilities. First oil is expected to flow by end March. 4.1 Onshore UK: Saltfleetby Gas Field (Roc: 100% and Operator) January 2001, Saltfleetby gas sales averaged 44.2 MMSCFD, sold at an average price of 21.1 pence per therm (A$6.17/MCF). February gas sales are anticipated to average 40 MMSCFD. The reduction is due to the natural decline in the Namurian reservoir in the Saltfleetby-5 well. The four other Saltfleetby wells are all producing from the main Westphalian reservoir at stable rates.
5.1 Onshore UK: South Humber Basin (Roc: 100% and Operator) Acquisition of the two 3D seismic surveys, covering a total of approximately 400 sq km of ROC's UK onshore licences in the region of the Saltfleetby Gas Field, has been deferred for an indeterminate period as a direct result of the very recent outbreak of Foot and Mouth Disease in the UK. The land to be surveyed is a mix of arable and grazing land and although there are no confirmed cases in the area, the Company's prime concern is to avoid any personnel or vehicular movements that might be perceived to contribute to the spread of the disease. The Company anticipates a delay of several weeks or months while this tragic epidemic is brought under control and the all-clear is given for access to farmland. 5.2 Offshore Equatorial Guinea (Roc: 60% and Technical Partner) Acquisition of the 1,385 sq km 3D Seismic Survey in Blocks H15 and H16 commenced on 19 February 2001. As at midnight on 27 February 2001 (local Equatorial Guinea time), good progress had been made and the acquisition was 27% complete with no operational problems.
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