LASMO 2000 Interim Results for the Six Months Ended June 30, 2000.Business Editors LONDON--(BUSINESS WIRE)--Aug. 3, 2000 LASMO plc (NYSE NYSE See: New York Stock Exchange : LSO LSO London Symphony Orchestra LSO Lesotho (ISO Country code) LSO Laser Safety Officer LSO Landing Signal Officer LSO Large Send Offload LSO Longwood Symphony Orchestra (Brookline, MA) ), the international oil and gas exploration and production company, today announced its 2000 interim results for the six months ended June June: see month. 30, 2000. LASMO delivers record earnings of(pound)126 million from a period of strong operational performance - Robust financial position with gearing of 41 percent following redemption of $250 million of share capital (Preference Shares) - Successful exploration program with three discoveries in Indonesia and two in Venezuela - Cashflow from normal operations Generally and collectively, the broad functions that a combatant commander undertakes when assigned responsibility for a given geographic or functional area. Except as otherwise qualified in certain unified command plan paragraphs that relate to particular commands, "normal operations" of of (pound)215 million (first half 1999 (pound)37 million) - Robust financial position with gearing of 41 percent following redemption of $250 million of share capital (Preference Shares) - Successful exploration program with three discoveries in Indonesia and two in Venezuela - A period of strong operational performance - Gross production in Liverpool Bay Liverpool Bay is a bay of the Irish Sea between north-east Wales, Cheshire, Lancashire and Merseyside to the east of the Irish Sea. The bay is a classic example of a region of freshwater influence. The rivers Alt, Conwy, Dee and Mersey drain into the bay. up 40 percent to 92 Mboepd (first half 1999 66 Mboepd) - Production in Venezuela Venezuela (vĕnəzwā`lə, Span. vānāswā`lä), officially the Bolivarian Republic of Venezuela, republic (2005 est. pop. 25,375,000), 352,143 sq mi (912,050 sq km), N South America. up over 60 percent compared to first half 1999, with new facilities on stream - Green light on development projects in North Africa and milestones reached in bringing gas to market in Pakistan Pakistan (păk`ĭstăn', päkĭstän`), officially Islamic Republic of Pakistan, republic (2005 est. pop. 162,420,000), 310,403 sq mi (803,944 sq km), S Asia.
Financial Highlights
First half 2000 First half 1999
Profit before
exceptional items ((pound)m) 126 12
Profit after
exceptional items ((pound)m) 124 28
Cash flow from
normal operations ((pound)m) 215 37
Production (Mboepd) 194 169
Net debt / equity (percent) 41 (Year end) 33
EPS (pence per share) 9.0 2.0
Full year 1999
Average cost of sales ((pound)/boe) 7.44
6.41*
Operating profit ((pound)/boe) 5.80
2.70*
RoACE (percent) 15.1
9.7
* As restated
Antony Antony or Marc Antony, Lat. Marcus Antonius, c.83 B.C.–30 B.C., Roman politican and soldier. He was of a distinguished family; his mother was a relative of Julius Caesar. Hichens, Chairman, said: "This is a period of unprecedented financial performance for the company. Despite record levels of profit, we continue to adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. disciplined capital management. Our strategic priorities remain sound operational performance, the prudent use of funds and investment focused exclusively on profitable growth." Chairman's Statement The close of the first half of 2000 finds the upstream From the consumer to the provider. See downstream. (networking) upstream - Fewer network hops away from a backbone or hub. For example, a small ISP that connects to the Internet through a larger ISP that has their own connection to the backbone is downstream from the larger oil and gas industry in good health. High commodity prices have produced strong cash flows and underpinned balance sheets. OPEC OPEC: see Organization of Petroleum Exporting Countries. OPEC in full Organization of the Petroleum Exporting Countries Multinational organization established in 1960 to coordinate the petroleum production and export policies of its , having surprised the market through its restraint and control during the past year, is closely watched. Despite anticipation of an increase in supply, the market remains tight with Brent Brent, outer borough (1991 pop. 226,100) of Greater London, SE England. The area is a rail and industrial center. Its manufactures include automobile parts, clocks and watches, and electrical equipment. trading in a $25 to $30 per barrel range at the time of writing. The upstream sector has seen value erosion in the past across the industry through over-commitment and excessive growth ambitions during previous price cycle highs. In response LASMO is keeping capital expenditure under strict control and we remain cautious over the direction of commodity prices. Operations Production for the period averaged 194 Mboepd, a 15 percent increase on the first half of 1999, principally as a result of increased equity participation in and improved performance from Liverpool Bay and a growing contribution from Dacion in Venezuela. Realizations showed an 83 percent improvement from $12.33 per barrel in the first half of 1999 to $22.54 per barrel, contributing to record underlying operating cash flow Operating cash flow Earnings before depreciation minus taxes. Measures the cash generated from operations, not counting capital spending or working capital requirements. and profits being reported for the period. As an explorer and field developer, LASMO has had a successful first half. On the exploration front we have participated in deep water discoveries in Indonesia Indonesia (ĭn'dənē`zhə), officially Republic of Indonesia, republic (2005 est. pop. 241,974,000), c.735,000 sq mi (1,903,650 sq km), SE Asia, in the Malay Archipelago. , recording significant successes in the Gendalo, Gada and Gula gas discoveries, as well as additional oil finds in the Zamuro and Lorito wells in Venezuela. Our field development activities are progressing well. The Dacion project in Venezuela is on plan and our experience there in applying leading-edge development technologies will be invaluable as we prepare to develop our Bhit and Elephant fields The Elephant field (also known as the El Feel) is an oil field located in onshore in Libya's Murzuq Basin. History In October 1997, an international consortium led by British company Lasmo, along with Eni (33%) and a group of five South Korean companies, announced that it in Pakistan and Libya Libya (lĭb`ēə), officially Great Socialist People's Libyan Arab Jamahirya [state of the masses], republic (2005 est. pop. 5,766,000), 679,358 sq mi (1,759,540 sq km), N Africa. respectively. Elsewhere on the development front, we have been pleased to see approvals received and contracts awarded in Algeria Algeria (ăljēr`ēə), Arab. Al Djazair, Fr. Algérie, officially People's Democratic Republic of Algeria, republic (2005 est. pop. during the first half of the year. In Pakistan, we passed a significant milestone in having the Heads of Terms for the sale of gas from our Bhit field ratified rat·i·fy tr.v. rat·i·fied, rat·i·fy·ing, rat·i·fies To approve and give formal sanction to; confirm. See Synonyms at approve. by the Pakistan cabinet, and we expect the Gas Sales Agreement to be formally signed shortly. New business activities targeting significant opportunities in low cost operating environments In computing, an operating environment is the environment in which users run programs, whether in a command line interface, such as in MS-DOS or the Unix shell, or in a graphical user interface, such as in the Macintosh operating system. continue to be pursued in Iran, Kuwait Kuwait (k  wīt`, –wāt) or Kowait (kō`–), officially State of Kuwait, independent sheikhdom (2005 est. pop. and Libya.LASMO's strategy is to build a portfolio of material assets around which substantial incremental Additional or increased growth, bulk, quantity, number, or value; enlarged. Incremental cost is additional or increased cost of an item or service apart from its actual cost. value can be created. We continue to dispose of To determine the fate of; to exercise the power of control over; to fix the condition, application, employment, etc. of; to direct or assign for a use. See also: Dispose non-core assets with sales in Azerbaijan Azerbaijan, country, Asia Azerbaijan (ä'zərbījän`, ă'zər–), Azeri Azərbaycan, officially Republic of Azerbaijan, republic (2005 est. pop. 7,912,000), 33,428 sq mi (86,579 sq km), in Transcaucasia. and Turkmenistan Turkmenistan (t  rkmyĕ'nyĭstän`), republic (2005 est. pop. 4,952,000), 188,455 sq mi (488,100 sq km), central Asia. as well as small, disparate equity interests outside of our material
assets in the UK sector of the North Sea. From time to time we may
crystallize crys·tal·lize also crys·tal·ize v. crys·tal·lized also crys·tal·ized, crys·tal·liz·ing also crys·tal·iz·ing, crys·tal·liz·es also crys·tal·iz·es v.tr. 1. the value from more substantial assets where we see the opportunity. Financial Performance The strong oil price and improved operational performance have contributed to high levels of underlying cash flow and earnings. First half post-tax profit before exceptional items of (pound)126 million (first half 1999 (pound)12 million) is in excess of any full year's results in our history, and together with cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses of (pound)215 million (first half 1999 (pound)183 million, but including a (pound)146 million one-off (1) One at a time. CD-ROM recorders (CD-R drives) are commonly called one-off machines because they write one CD-ROM at a time. (2) Only once. Software that is written to solve a specific problem only one time is sometimes called a one-off. contract renegotiation) represents a most satisfactory financial performance. Our mid-year balance sheet gearing stands at 41 percent after the redemption of $250 million preference shares, maintaining significant financial flexibility as we continue to develop our business. Prevailing high oil prices have substantially strengthened our financial capacity. However, in keeping with our prudent approach to financial management, and in order to protect our ability to invest through 2001, we have taken advantage of the forward oil price curve to protect 80 percent of our 2001 cash flows from average Brent prices Hartley Brent Price (born December 9 1968 in Shawnee, Oklahoma) is an American former professional basketball player in the NBA. He is the younger brother of former Cleveland Cavaliers point guard Mark Price. under $18 per barrel, at a cost of $10 million. This effectively buys LASMO insurance against deteriorating de·te·ri·o·rate v. de·te·ri·o·rat·ed, de·te·ri·o·rat·ing, de·te·ri·o·rates v.tr. To diminish or impair in quality, character, or value: oil prices, while retaining upside potential Upside potential The amount by which analysts or investors expect the price of a security may increase. upside potential The potential price or gain that may be expected in a security or in a security average, generally stated as the dollar . Distribution policy As we have already reported, during 1999 LASMO generated some (pound)40 million of exceptional profits through disposal of assets. This full amount will be returned by way of a share buyback Buyback The buying back of outstanding shares (repurchase) by a company in order to reduce the number of shares on the market. Companies will buyback shares either to increase the value of shares still available (reducing supply), or to eliminate any threats by shareholders who may during the second half of the year. The current period of high oil prices while sustained, will give rise to record levels of cash flow. In addition, we continue to consider ways of further improving shareholder returns through portfolio management. These circumstances CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or may give rise to additional free cash flow in excess of the Group's capital needs. We will closely monitor the Group's free cash flow and, subject to meeting our financial management targets and in line with our Distribution Policy, these funds will be available for return via further share buybacks. Chairmanship My predecessor, Rudolph Rudolph: see Raoul, king of France. Rudolph his red nose lit the way for Santa and his sleigh. [Am. Pop. Music: “Rudolph the Red-Nosed Reindeer”] See : Nose Agnew Ag·new , Spiro Theodore 1918-1996. Vice President of the United States (1969-1973) under Richard M. Nixon. Agnew resigned amid charges of illegal financial dealings during his governorship of Maryland (1966-1968). , retired from the Chair and the Board at the AGM AGM annual general meeting AGM n abbr (= annual general meeting) → AG f AGM n abbr (= annual general meeting) → JHV f in May this year after 6 years of service. LASMO benefited from his strong leadership and wise counsel. It has been a privilege for me to take up the role he filled with such distinction. Outlook With a broad development portfolio, a sound producing base, a strong balance sheet and near-term near-term adj. Of, for, or involving a short period of time in the near future. cash generation in excess of our immediate needs, the outlook remains very positive. The second half of 2000 should see further progress in our field development activities, along with increasing production from Venezuela and further exploration activity in the UK, Indonesia, Venezuela and Pakistan. Meanwhile, we will continue to pursue new exploration and development-led opportunities. This is a period of unprecedented financial performance for the company. Despite record levels of profit, we continue to adhere to disciplined capital management. Our strategic priorities remain sound operational performance, the prudent use of funds and investment focused exclusively on profitable growth. Operational Review Production for the first half of 2000 averaged 194 Mboepd compared to 169 Mboepd for the first half of 1999 and a full year 1999 average of 178 Mboepd. This is mainly due to production growth from the Dacion project in Venezuela and from the Liverpool Bay asset in the UK where LASMO's equity has increased and performance has improved. In addition to these increases in current production, the first half saw significant progress towards ensuring that this upward trend is sustained as development activity continued apace. In Algeria, announcements of award of a contract to develop the Ourhoud field, and the exercising of an option to develop the Block 404 satellite fields are expected shortly. A milestone has been reached in Libya with the formation of the Operating Management Committee for the Elephant field, and the Government of Pakistan Government of Pakistan (Urdu: حکومتِ پاکستان), The Constitution of Pakistan provides for a Federal Parliamentary System of government, with a President as the Head of State and an indirectly-elected Prime has ratified the Heads of Terms of the Bhit field Gas Sales Agreement. LASMO has had a successful first half in exploration. The drilling program in the deepwater Deepwater or Deep Water may refer to:
UK During the first half of 2000, production averaged 108 Mboepd, against 91 Mboepd for the first half of 1999 and 100 Mboepd for the whole of 1999. This increase reflects the integration of the Monument Anything by which the memory of a person, thing, idea, art, science or event is preserved or perpetuated. A tomb where a dead body has been deposited. In real-property assets and a solid operational performance over the period, with several fields producing above expectations including the LASMO-operated Markham Markham City (pop., 1991: 154,000), southeastern Ontario. It is situated on the Rouge River, northeast of Toronto. Settled in 1794, the town was named for William Markham, archbishop of York. It annexed the nearby township of Markham in 1971. field. Gross production from Liverpool Bay averaged 92 Mboepd for the first half, a significant increase over first half 1999 average of 66 Mboepd. The renegotiation of the gas sales contract Sales Contract Contract between a seller and buyer for the sale of goods, services, or both. that took place last year has aligned the gas price to market rates which has resulted in higher than forecast offtake Off´take` n. 1. Act of taking off; specif., the taking off or purchase of goods. 2. Something taken off; a deduction. 3. A channel for taking away air or water; also, the point of beginning of such a channel; a take-off. rates. However, due to planned maintenance shutdowns in the second half of the year, overall annual production is expected to be between 85 and 90 Mboepd. Exploration focus in the second half of the year will turn to the Central North Sea where three prospects are to be drilled in the vicinity of two of LASMO's core UK production areas, the Fourth Round and Andrew fields. Portfolio rationalization rationalization, in psychology: see defense mechanism. continued with LASMO disposing of a number of non-core assets in the first half of the year including the sale of Block 16/12a which was completed in May 2000. Indonesia Sanga Sanga a type of draft cattle with a small cervicothoracic hump and long horns, originating in eastern and southern Africa. It includes many varieties. Sanga PSC (Public Service Commission) Same as PUC. In the first half of 2000, 173 LNG LNG (liquefied natural gas): see under natural gas. cargoes were exported from the Bontang Bontang is a city on the eastern coast of the island Borneo in Indonesia. It is in the province East Kalimantan. External links [1] LNG plant. Of these, 19.8 standard cargoes were attributable to LASMO for its share of the Sanga Sanga Production Sharing Contract. The drive to reduce operating costs operating costs npl → gastos mpl operacionales initiated in 1999 continued into 2000. The state oil company, Pertamina PERTAMINA Perusahaan Pertambangan Minyak Dan Gas Bumi Negara , approved the cost cutting measures in late June and it is expected that we will meet our target of a 35 percent reduction in capital expenditure and a 40 percent reduction in operating expenditure going forward. Exploration LASMO continues to build a high potential exploration portfolio in Indonesia, focused on deepwater areas with attractive frontier terms. The first half of 2000 has seen this portfolio begin to deliver material exploration success. Four significant gas discoveries have now been made in the Ganal PSC (LASMO 20 percent) in the Kutei Basin offshore East Kalimantan East Kalimantan (Indonesian: Kalimantan Timur abbrv. Kaltim) is Indonesian province on the east of Borneo island. The resource-rich province has two major cities, Samarinda (the capital and a center for timber product) and Balikpapan (a petroleum center with oil , namely Gandang, Gendalo, Gada and Gula. The most recent discovery is Gula, which encountered in excess of 260 feet of net gas pay without reaching a gas/water contact. The operator, Unocal, estimates the gross unrisked potential of the four discoveries to be between 3 and 6 Tcf of gas. Work continues within LASMO and Unocal to understand the size of these discoveries better and to develop the prospect inventory further prior to recommencing drilling in 2001. Early indications from new 3D seismic data are encouraging in both respects. The deepwater drilling program in these licenses has maintained an average well cost of less than $5 million per well in water depths of up to 6,700 feet. Elsewhere in East Kalimantan LASMO exercised an option to enter the Ambalat Ambalat is a sea block in the Celebes Sea. The sea block is rich in crude oil. Sovereignty dispute The control of the area is disputed by Malaysia and Indonesia. Earlier, Malaysia and Indonesia were in dispute over the control of the islands of Sipadan and Ligitan. license (LASMO 12.5 percent) and an exploratory well, Bougainville-1, has been plugged and abandoned. The well results gave promising indications of the potential for this under-explored basin. The Ambalat and the adjoining Bukat licenses (LASMO 12.5 percent) are located in a previously undrilled deepwater basin analogous analogous /anal·o·gous/ (ah-nal´ah-gus) resembling or similar in some respects, as in function or appearance, but not in origin or development. a·nal·o·gous adj. to the deepwater Kutei. Offshore North Sumatra North Sumatra (Indonesian: Sumatera Utara) is a province of Indonesia. Its capital is Medan. Geography and population The province of North Sumatra stretches across the island of Sumatra between the Indian Ocean and the Strait Malacca. , in the Krueng Mane license (LASMO 100 percent), LASMO has acquired a substantial seismic program that was completed within four months of license award. The program used leading-edge technology that has significantly enhanced the quality of the data and is the largest proprietary deepwater survey of its kind in the world. Interpretation of data nears completion and a drilling program is expected to commence in the fourth quarter of 2000. Drilling preparations are also underway for the LASMO-operated Malagot license (LASMO 60 percent) onshore on·shore adj. 1. Moving or directed toward the shore: an onshore wind. 2. Located on the shore: an onshore beacon; an onshore patrol. adv. Irian Jaya Irian Jaya, province, Indonesia: see Papua. . Venezuela Production from the Dacion block averaged in excess of 30 Mbopd in the first half of 2000, against 19 Mbopd for the first half of 1999. This increase was achieved through further upgrades to existing facilities, principally to increase water handling, and the commissioning of new facilities for the Ganso field in May. Other improvements, including further debottlenecking and infill in·fill n. 1. The use of vacant land and property within a built-up area for further construction or development, especially as part of a neighborhood preservation or limited growth program. 2. drilling, will take production to between 40 Mbopd and 45 Mbopd by year-end year-end also year·end n. The end of a year. adj. Occurring or done at the end of the year: a year-end audit. Noun 1. . The first phase of a scheme to install facilities that will take production capacity to 90 Mbopd in 2002, in line with LASMO's production target, has been approved by the state oil company, Petroleos de Venezuela SA. The construction process for these facilities has now commenced, along with the ordering of long lead items. In the second half of 2000 detailed design and civil engineering work programs will be completed and on-site on-site adj. Done or located at the site, as of a particular activity: on-site monitoring of a production run; an on-site film shoot. fabrication fabrication (fab´rikā´sh  n),n the construction or making of a restoration. will commence. During the first half of 2000 production continued to be processed through the original facilities. Installation of new facilities will significantly reduce operating costs, and this trend will continue as volumes build. The two-rig infill drilling program continues to perform ahead of expectations with further reductions in drilling times and costs. Twenty-nine development wells were drilled in the first half of 2000, the fastest in less than seven days and for a cost of less than $600,000. With the solid understanding gained of the subsurface sub·sur·face adj. Of, relating to, or situated in an area beneath a surface, especially the surface of the earth or of a body of water. Adj. 1. and the technology accessed through the Schlumberger Schlumberger Limited is the world's largest oilfield services corporation operating in approximately 80 countries, with about 70,000 people of 140 nationalities. Schlumberger supplies a wide range of products and services from seismic acquisition and processing; formation alliance, LASMO anticipates further performance improvements. Future drilling will include horizontal and multi-lateral wells, with completion and lift systems being tailored for each target reservoir. The objective is to increase both well recovery and productivity cost effectively and to optimize optimize - optimisation handling of produced water. The exploration program continues to yield positive results. The Lorito, Zamuro and Condor exploration prospects have been drilled so far this year. Both Lorito, located to the south of the Levas field, and Zamuro, close to the Ganso field, discovered small, multi-zone accumulations. Condor, a higher risk, stratigraphic stra·tig·ra·phy n. The study of rock strata, especially the distribution, deposition, and age of sedimentary rocks. strat prospect, encountered oil shows but not in significant volumes. Three further exploration wells will be drilled this year to test a number of structural and stratigraphic prospects across the block. In addition, the first appraisal of the 1999 Tortola Tortola, largest of the British Virgin Islands. discovery was drilled in May. This well came in on prognosis prognosis /prog·no·sis/ (prog-no´sis) a forecast of the probable course and outcome of a disorder.prognos´tic prog·no·sis n. pl. prog·no·ses 1. and is being completed as a producer. A second appraisal well is scheduled for later this year, and field interpretation and development scenario planning Scenario planning or Scenario thinking is a strategic planning method that some organizations use to make flexible long-term plans. It is in large part an adaptation and generalization of classic methods used by military intelligence. continues. LASMO continues to hold a 100 percent stake in this major project, and with production rising steadily, the project has started to yield significant cash flow. Meanwhile LASMO's subsurface knowledge and operational expertise continues to grow, and although not formally marketed at present, the Company will look to deliver optimal value for a stake in the project as good operational performance continues to be demonstrated and when market conditions are right. Following the flood disaster in December December: see month. 1999, LASMO committed over $1 million of financial support to relief efforts in Venezuela. Since that time, LASMO has supported medical brigades and portable water supplies through a $200,000 donation to the International Red Cross. LASMO is now in the process of distributing the remaining funds through a portfolio of ten projects managed by local Non Governmental Organizations and civil associations. These projects are aimed at the longer-term redevelopment of opportunities for children, education and health programs. North Africa Algeria During the first half of 2000 the HBNS HBNS Health Behavior News Service field produced at an average rate of 66 Mbopd (8 Mbopd net to LASMO). Debottlenecking of the facilities resulted in their capacity being upgraded to 72 Mbopd and water injection facilities have been installed to support production levels. Water injection capacity will reach 135 Mbwpd in the second half of the year. Construction of the Phase II facilities for HBNS is progressing on schedule with first oil targeted for the fourth quarter of 2001. On completion of Phase II, HBNS will have a capacity of 145 Mbopd. Development of the HBN HBN Hexagonal Boron Nitride HBN Health Building Notes HBN Brinell Hardness (metallurgy) HBN Health-Based Numbers HBN HomeBrew Network (gaming) HBN High Bandwidth Networking field has commenced following award of an Engineering, Procurement and Construction  The introduction to this article is vague. To comply with Wikipedia's guidelines, it should be improved. contract in December 1999 and
first oil is planned for early 2002. Completion of the HBN process train
will bring the combined HBNS/HBN facilities capacity to 220 Mbopd.The option to build a fourth and final train at the HBNS central processing facility is provided for under the HBNS Phase II contract. It is expected that this option will be exercised in the third quarter to take production capacity to 300 Mbopd. The award of a contract for the development of the giant Ourhoud field is expected shortly. The development will comprise a three train process facility with a capacity of 230 Mbopd with first production targeted for early 2003. Further south in the Berkine Basin, a 500km 2D seismic survey commenced in July July: see month. 2000 over the LASMO operated El Ouar II license, with a view to drilling an exploration well in 2001. Meanwhile, work continues to optimize the commercial development of the nearby IAN IAN Interactive Affiliate Network IAN i am nothing IAN Instrumentation & Automation News IAN Ianuarius (Latin: January) IAN Instituto Agronomico Nacional (Paraguay) IAN Incident Area Network discovery. Libya In May 2000, the F-NC174 (Elephant elephant, largest living land mammal, found in tropical regions of Africa and Asia. Elephants have massive bodies and heads, thick, pillarlike legs, and broad, short padded feet, with toes bearing heavy, hooflike nails. ) Operator's Management Committee was formed. With the Committee in place, preparation of the field development budget is underway and will be submitted for approval. Work is expected to commence on the project in the second half of 2000. LASMO has pre-qualified to participate in the Libyan exploration licensing round that commenced in May 2000. Over 130 blocks are on offer in the round and LASMO will be active in its pursuit of material opportunities to add to its foundation asset in Libya. Tunisia Tunisia (t nē`zhə, ty–), Fr. Tunisie, officially Republic of Tunisia, republic (2005 est. pop. and Morocco Morocco, country, AfricaMorocco (mərŏk`ō), officially Kingdom of Morocco, kingdom (2005 est. pop. 32,726,000), 171,834 sq mi (445,050 sq km), NW Africa. In Morocco, interpretation of seismic data acquired on the Ras Tafelney Reconnaisance License is nearing completion. In Tunisia, an exploration well will shortly be spudding to test the Mabrouk prospect in the Jenein South block. Pakistan LASMO is continuing to develop a strong upstream gas position in Pakistan, with significant progress being made in the first half of 2000. The Company took several steps towards bringing the LASMO-operated Bhit field in the Kirthar block to the development stage. In June 2000, the Government of Pakistan, the gas utility Sui Southern Gas Company The Sui Southern Gas Company (SSGC) (Formerly) Sui Gas Transmission Company Limited was formed in 1954. The Company in its present shape was formed on March 30, 1989 following a series of mergers of three pioneering companies, namely Sui Gas Transmission Company Limited, , and the Kirthar partners agreed the gas pricing methodology for the sale of 1 Tcf of gas, and in July these parties signed the Heads of Terms for the Gas Sales Agreement. It is expected that August will see approval for the development plan for the field, and work will begin in the third quarter of this year. First gas is expected in the second half of 2002, with production planned to rise quickly to plateau plateau, elevated, level or nearly level portion of the earth's surface, larger in summit area than a mountain and bounded on at least one side by steep slopes, occurring on land or in oceans. rates of approximately 235 MMscfd (94 MMscfd net to LASMO). Initial production rates of 70 MMscfd (12 MMscfd net to LASMO) are expected from the Zamzama The Zamzama Gun, also known as the Bhangianwala Toap or Kim’s Gun is a large bore cannon. It was cast in 1757, in what was then Colonial India, now Lahore, Pakistan. It currently on display in front of the Lahore Museum in Lahore, Pakistan. field in mid- mid- pref. Middle: midbrain. 2001 as part of an Extended Well Test (EWT n. 1. (Zool.) The newt. ) scheme. This scheme was given Government approval in the first half of 2000 and will run for 21 months, following which the first phase of the main field development will come on stream with substantially increased production rates. On the exploration front, the Andhar-1 well in the Kirthar West block was drilled to total depth, encountered sub-commercial quantities of gas and was plugged and abandoned in July. The cost of this well will be written off in the second half of 2000. East Diwana-1 , the second well in the block, is expected to spud at the end of this year. In Kirthar, the Bhit Mughal Mughal (m gŭl`) or Mogul (mō`gəl, mōgŭl`), Muslim empire in India, 1526–1857. Kot KoT King of Town (comic character)KoT King of Town (Homestar Runner) KOT Keep on Truckin' KOT Keep on Talking KOT Kitchen Order Ticket (hotel industry) KOT Keep on Tryin' -1 well will spud later this year to test the extent of the Mughal Kot reservoir sands that lie below the main Pab reservoir section in the Bhit field. Work to appraise appraise v. to professionally evaluate the value of property including real estate, jewelry, antique furniture, securities, or in certain cases the loss of value (or cost of replacement) due to damage. the Badhra gas discovery (which lies approximately 10 kilometers from the Bhit field) continued this year with initial planning in place for an EWT to define the deliverability and the extent of the gas reserve in that field. Gas was discovered last year in the Mughal Kot formation, a previously untested reservoir in the Kirthar area. In the Middle Indus Indus (ĭn`dəs), chief river of Pakistan, c.1,900 mi (3,060 km) long, rising in the Kailas range in the Tibetan Himalayas, and flowing W across Jammu and Kashmir, India, then SW through Pakistan to the Arabian Sea SE of Karachi. , a seismic acquisition program was completed under budget on the Mubarak Mu·bar·ak , (Muhammad) Hosni Said Born 1929. Egyptian politician who was appointed president after the assassination of Anwar el-Sadat (1981). Noun 1. concession where two wells will be drilled in early 2001. The Concession surrounds the Miano Miano is a northern suburb of Naples with a population of ca. 30,000. Since the recent administrative reorganization of the area, Miano is part of the 10th community board. The area, though not as infamous by name as neighboring Scampia, has many of the same problems. gas field and is adjacent to the LASMO-operated Kadanwari Kadanwari is a town in the Tharparkar District, Sindh, Pakistan. The Kadanwari Gas Field has been discovered near Kadanwari. Kadanwari Gas Field Kadanwari Gas Field, located in the Middle Indus Basin of Pakistan, was discovered in 1989. gas field and newly acquired East Kadanwari license. Remaining reserves for the Kadanwari field were upgraded following the continuing strong production performance from the eastern flank flank (flank) the side of the body between ribs and ilium. flank n. 1. The side of the body between the pelvis or hip and the last rib; the side. 2. of the field and recompletions into undrained reservoir layers. Two further development wells are scheduled for the next twelve months, with an exploration well planned for the second half of 2000. The Caspian Region Following a review of competing investment opportunities in the portfolio, LASMO has opted to rationalize ra·tion·al·ize v. 1. To make rational. 2. To devise self-satisfying but false or inconsistent reasons for one's behavior, especially as an unconscious defense mechanism through which irrational acts or feelings are made to appear its holdings in the Caspian region. This process commenced with the sale of the Inam block, offshore Azerbaijan, to Shell for $18 million, which was completed in March. In addition, the Company has recently signed a sale and purchase agreement for our entire interest in the Nebit Dag Dag(h)da great god of Celts; father of Danu. [Celtic Myth.: Parrinder, 68; Jobes, 405] See : Fatherhood Dag (h)da god of abundance, war, healing. [Celtic Myth. Production Sharing Agreement Production sharing agreements (PSAs) are used primarily to determine the share a private company will receive of the natural resources (usually oil) extracted from a particular country. (PSA (Professional Services Automation) An information system designed to organize, track and manage all opportunities, work, resources, costs, revenues and invoices to improve the productivity and efficiency of the workforce. ) in Turkmenistan with Burren Energy Burren Energy plc (LSE: BUR) is a British oil exploration and production company founded in 1994 by former CEO and current president Finian O’Sullivan. The company originally began as an oil transportation company in the Caspian Sea region, but later diversified into oil , an existing partner in the license. LASMO continues to hold exploration interests in the Exxon Mobil-operated Garashsyzlyk PSA in Turkmenistan. A seismic program is currently underway and is expected to complete later in the year. In Georgia Georgia, country, Asia Georgia (jôr`jə), Georgian Sakartvelo, Rus. Gruziya, officially Republic of Georgia, republic (2005 est. pop. 4,677,000), c.26,900 sq mi (69,700 sq km), in W Transcaucasia. , an exploration well on the Taribani prospect on Block 12 reached target depth in April and a program of production testing is now underway. LASMO has the right to farm in to up to 40 percent of this block and a decision on whether to exercise this option will be taken on completion of the testing program. Middle East Work on the Exploration Study Agreement for the Iranian sector of the Southern Caspian is nearing completion and negotiations on possible exploration and production service contracts are underway with the National Iranian Oil Company The National Iranian Oil Company (NIOC), under the direction of the Ministry of Petroleum of Iran, is an oil and natural gas producer and distributor headquartered in Tehran. It was established in 1948. (NIOC NIOC National Iranian Oil Company NIOC Navy Information Operations Command (US Navy) NIOC Naval Information Operations Command (US Navy) NIOC Northern Illinois Orienteering Club ). The international oil companies in the study group (LASMO, Shell and Veba) have selected two blocks in water depths of between 500 meters and 700 meters that cover an area of 2,000 square kilometers each, and have the option to select a further four blocks later this year. LASMO's discussions and negotiations with NIOC on two opportunities offered in the second Iranian Buyback Round have continued through the first half. LASMO has submitted proposals for both the Darquain and Ab-Teymur field redevelopment projects. LASMO remains confident that it will be awarded an interest in one of these projects. In Kuwait, LASMO has been working with BP Amoco to develop plans for a joint bid for the North Project. Access to these opportunities is not anticipated until the first quarter of 2001 at the earliest. This significant project involves managing the future development of all the producing fields in Northern Kuwait and increasing production from current levels of around 400 Mbopd to around 800 Mbopd. Financial Review The Group's financial performance benefited from the strong oil price and increased production, with underlying profits and cash flow in the six months to June 30, 2000 exceeding the amounts reported for the whole of 1999. Turnover Turnover for the six months ended June 30, 2000, including the Group's share of joint venture turnover, totaled (pound)500 million (1999 (pound)239 million) up 109 percent as a result of significantly higher average realized prices and increased production. Brent oil price averaged $26.90 in the first six months of 2000, an increase of 101 percent over the same period in 1999 ($13.38). Sales realizations for the first half of 2000 averaged (pound)14.28 (US $22.54) per boe (1999 (pound)7.61 (US $12.33) per boe), up 88 percent due to an increase of 83 percent in average realized US dollar price levels and a slight strengthening of the US dollar against sterling. Realizations are $4.36/boe below the average Brent price during the first half of 2000. Approximately $2.00 per boe of this is attributable to UK gas sales contracts whose prices are not linked wholly to oil; a further $1.80 per boe relates to Venezuelan crude realizations which are significantly lower than Brent prices. Under the Dacion contract around 10 Mbopd of Venezuelan production is deemed `baseline' and receives a fee of $2.50 per boe, the remainder being linked to the Maya crude price. The effect of the Group's oil price risk management program was to reduce sales realizations by approximately 58 cents per boe (first half 1999 approximately 36 cents per boe). Total production for the first half of 2000 was 194 Mboepd, which represents an increase of 25 Mboepd compared with production in the same period in 1999. The acquisition of Monument contributed 25 Mboepd of additional production compared with the first half of last year. Increased international production from Venezuela (11 Mboepd) and Algeria (1 Mboepd) was offset by lower oil production from Indonesia (4 Mboepd) and the impact of North Sea asset disposals in the second half of 1999 and in April 2000 (8 Mboepd). Production increases in Liverpool Bay (6 Mboepd) were matched by a net decline in the mature North Sea portfolio. Operating profit Operating profit (or loss) Revenue from a firm's regular activities less costs and expenses and before income deductions. operating profit See operating income. Operating profit for the period was (pound)189 million (first half 1999 (pound)30 million). Cost of sales in the first half of the year amounted to (pound)243 million, an increase of 48 percent from the same period in 1999 ((pound)164 million) due mainly to increased production. Average cost of sales was (pound)7.44 per boe. This represents an increase of 16 percent over the average of (pound)6.40 per boe for the year ended December 31, 1999 and is due to a number of factors. (The 1999 figure has been restated from (pound)6.18 per boe to reflect a reallocation Noun 1. reallocation - a share that has been allocated again allocation, allotment - a share set aside for a specific purpose 2. reallocation of certain administrative costs administrative costs, n.pl the overhead expenses incurred in the operation of a dental benefits program, excluding costs of dental services provided. to operating costs, as described below). Of the increase of (pound)1.04 per boe seen in the first half of 2000, approximately (pound)0.40 per boe is attributable to higher royalty and PRT PRT Print PRT Port PRT Portugal (ISO country code) PRT Printer PRT Provincial Reconstruction Team (Iraq) PRT Personal Rapid Transit PRT Personal Rapid Transit payments reflecting higher oil price realizations. The Venezuelan operation has seen significantly higher volumes lifted through facilities awaiting replacement and this has resulted in an increase in unit operating costs accounting for an additional (pound)0.30 per boe. This increase in unit costs in Venezuela will be reversed as new facilities come on stream and production levels continue to grow. This, together with other new low cost production is expected to reduce Group unit operating costs significantly in the medium term. The remainder of the increase in cost of sales ((pound)0.34 per boe) is attributable to increased unit depletion depletion n. when a natural resource (particularly oil) is being used up. The annual amount of depletion may, ironically, provide a tax deduction for the company exploiting the resource because if the resource they are exploiting runs out, they will no longer be able charges. Exploration and appraisal costs written off amounted to (pound)21 million (first half 1999 (pound)12 million), the increase reflecting increased exploration and appraisal expenditure and a higher write-off Write-Off A reduction in the value of an asset or earnings by the amount of an expense or loss. Companies are able to write off certain expenses that are required to run the business, or have been incurred in the operation of the business and detract from retained revenues. rate in the first half of 2000. Administration expenses totaled (pound)10 million (first half 1999 (pound)10 million; before restatement Restatement A revision in a company's earlier financial statements. Notes: The need for restating financial figures can result from fraud, misrepresentation, or a simple clerical error. (pound)15 million). From the beginning of 2000 certain costs associated with the monitoring of non-operated exploration and producing assets have been classified as exploration and appraisal costs and operating costs as appropriate. Previously such costs had been classified as administration costs. This revision of cost allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as methodology has had no impact on reported earnings. Prior period numbers have been restated to conform with the new treatment. Profit for the period The Group's share of the operating profit of its Unimar joint venture was (pound)26 million (1999 (pound)10 million), the increase due to significantly higher realizations partially offset by lower production. Asset disposals gave rise to an exceptional loss of (pound)2 million during the period (first half 1999 exceptional profit of (pound)16 million). Net finance charges amounted to (pound)28 million (first half 1999 (pound)5 million), the increase from the same period in 1999 resulting from lower average cash balances, and ceasing capitalization capitalization n. 1) the act of counting anticipated earnings and expenses as capital assets (property, equipment, fixtures) for accounting purposes. 2) the amount of anticipated net earnings which hypothetically can be used for conversion into capital assets. of interest on the Dacion development in Venezuela. Interest receivable in the first half of 1999 benefited from the release of a (pound)9 million accrual accrual, n continually recurring short-term liabilities. Examples are accrued wages, taxes, and interest. relating to relating to relate prep → concernant relating to relate prep → bezüglich +gen, mit Bezug auf +acc prior years. The Group's tax charge for the period was (pound)61 million (first half 1999 (pound)23 million), the increase resulting from higher net revenues in the UK and Indonesia. As a result, the profit for the first half of 2000 before exceptional items amounted to (pound)126 million (first half 1999 (pound)12 million). The profit for the period after exceptional items amounted to (pound)124 million (first half 1999 (pound)28 million). Profit attributable to members of the parent company After deducting minority interests of (pound)2 million (first half 1999 (pound)2 million) the profit attributable to members of the parent company before exceptional items amounted to (pound)124 million (first half 1999 (pound)10 million). Profit attributable to members of the parent company after exceptional items amounted to (pound)122 million (first half 1999 (pound)26 million). Profit attributable to ordinary shareholders The Group's US$250 million Cumulative Dollar Preference Shares were redeemed re·deem tr.v. re·deemed, re·deem·ing, re·deems 1. To recover ownership of by paying a specified sum. 2. To pay off (a promissory note, for example). 3. in February February: see month. 2000. After deducting preference dividends on these shares of (pound)2 million (first half 1999 (pound)7 million) the profit attributable to ordinary shareholders before exceptional items amounted to (pound)122 million (first half 1999 (pound)3 million). Profit attributable to ordinary shareholders after exceptional items in the first half of 2000 amounted to (pound)120 million (first half 1999 (pound)19 million). Dividend The Board is not proposing a dividend in respect of the six months ended June 30, 2000 (first half 1999 nil). Cashflow and capital expenditure Net cash inflow in·flow n. 1. The act or process of flowing in or into: an inflow of water; an inflow of information. 2. from operations after interest and taxation in the first half of 2000 amounted to (pound)215 million (first half 1999 (pound)37 million cashflow from normal operations, which together with (pound)146 million received in respect of the renegotiation of the gas sales agreement for the Liverpool Bay fields totals (pound)183 million). The significant increase in underlying cash flow, period on period, relates primarily to higher revenues generated by increased realizations and production. Accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. exploration and appraisal expenditure for the first six months of 2000 was (pound)38 million (first half 1999 (pound)32 million). Accrued production and development expenditure was (pound)90 million in the first six months of 2000 (first half 1999 (pound)105 million). Net debt and gearing At June 30, 2000 the Group had (pound)188 million of committed but undrawn un·draw tr.v. un·drew , un·drawn , un·draw·ing, un·draws To draw to one side, as a curtain. Adj. 1. undrawn - not represented in a drawing undelineated - not represented accurately or precisely bank facilities (December 31, 1999 (pound)225 million) and held short term bank deposits and cash balances of (pound)314 million (December 31, 1999 (pound)378 million). The Group's net debt at June 30, 2000 was (pound)605 million (December 31, 1999 (pound)489 million). Gearing as at June 30, 2000 stood at 41 percent (December 31, 1999 33 percent). During the first six months of 2000 the Group redeemed all of the outstanding Cumulative Dollar Preference Shares at a total cash cost of (pound)161 million and repurchased (pound)16 million of 7 3/4 percent Convertible Bonds 2005. The preference shares were previously accounted as share capital in the gearing calculation. LASMO's shares trade on the London London, city, Canada London, city (1991 pop. 303,165), SE Ont., Canada, on the Thames River. The site was chosen in 1792 by Governor Simcoe to be the capital of Upper Canada, but York was made capital instead. London was settled in 1826. and New York Stock Exchanges New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. . Shares are quoted on the SEAQ SEAQ See: Stock Exchange Automated Quotation System System, and prices may be accessed on the Reuter Reu·ter , Baron Paul Julius von 1816-1899. German-born British journalist who founded (1848) Reuter's, one of the first international news agencies. Equities 2000 Service under the symbol LSMR LSMR Landing Ship, Medium, Rocket .L and on Quotron under the symbol LSMRU.EU. For further information, visit LASMO's web page at http:\\www.lasmo.com. Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Except for the historical information contained herein, this press release includes forward-looking statements as defined in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. Securities Exchange Act of 1934 that involve risk and uncertainties, including commodity price, exploration, development, and operational risks, and other risk factors detailed from time to time in the company's publicly available SEC reports, which could cause actual results to be materially different.
ABBREVIATED PROFIT AND LOSS ACCOUNT
First half Full year
--------------------------------------
2000 1999 1999
Notes (pound) (pound) (pound)
million million million
-----
Turnover
Group and share
of joint venture 1 500 239 647
Less share of joint
venture's turnover (37) (23) (53)
----------------------------------------
463 216 594
Cost of sales 2 (243) (164) (379)
Provision for oil
and gas assets - - (3)
----------------------------------------
Gross profit 220 52 212
Exploration costs
written off (21) (12) (34)
Administrative expenses (10) (10) (17)
Operating profit 189 30 161
Share of joint venture's
operating profit 26 10 27
(Loss)/profit on disposal
of fixed assets (2) 16 41
Net interest payable 3 (28) (5) (18)
------------------------------------------
Profit on ordinary
activities before taxation 185 51 211
Taxation on profit on
ordinary activities 4 (61) (23) (57)
------------------------------------------
Profit for the period 124 28 154
Minority interests (2) (2) (6)
Profit attributable to ------------------------------------------
members of the
parent company 122 26 148
Dividends on preference
shares (2) (7) (12)
Profit attributable
to ordinary shareholders 120 19 136
Dividends on ordinary shares - - (34)
Retained profit for the period 120 19 102
Earnings per ordinary shares(1) 9.0p 2.0p 10.8p
Diluted earnings per
ordinary share(1) 9.0p 2.0p 10.7p
Dividend per ordinary share - - 2.5p
Weighted average number of ordinary
shares in issue (millions) 1,333 952 1,143
(1) Preference dividends have been deducted in calculating
earnings per share.
ABBREVIATED BALANCE SHEET
At June 30 At December 31
2000 1999
Notes (pound) (pound)
million million
-----
--------------- ------------
Fixed assets
Intangible assets 5 157 144
Tangible assets 5 2,002 1,949
Investment in joint venture 155 132
Other investments 204 209
--------------- ------------
2,518 2,434
--------------- ------------
Net current assets
Cash, deposits and investments 314 384
Other current assets 244 314
Short term debt (62) (58)
Short term creditors (220) (317)
--------------- ------------
276 323
--------------- ------------
Total assets less current liabilities 2,794 2,757
Long term debt (1,044) (1,002)
Long term creditors (186) (187)
Provisions for liabilities and charges (97) (100)
--------------- ----------
1,467 1,468
--------------- ----------
--------------
Shareholder's funds
Share capital 337 492
Reserves 1,063 915
--------------- ------------
1,400 1,407
Non-equity minority interests 67 61
--------------- ----------
Capital employed 1,467 1,468
--------------- ----------
ABBREVIATED CASH FLOW STATEMENT
First half Full year
2000 1999 1999
--------------------------------------------
(pound)million (pound)million (pound)million
Net cash inflow from
operating activities 301 218 482
Returns on investments
and servicing of finance (46) (30) (93)
Taxation (40) (5) (81)
------------- ------------ -----------
Net cash inflow from
operations after interest
and taxation 215 183 308
Capital expenditure and
financial investment
Capital expenditure (113) (146) (260)
Disposal of oil and
gas interests 20 74 182
Disposal of other
fixed assets - - 7
Net cash receipts from
joint venture 13 4 22
Net cash outflow from
capital expenditure
and financial investment (80) (68) (49)
Acquisition of subsidiary company
- (8) (10)
Dividends paid -
ordinary shares (34) (22) (22)
------------- ------------ -----------
Cash inflow before use of
liquid resources and financing 101 85 227
------------- ------------ -----------
Management of liquid resources (60) (122) (213)
Financing 167 217 454
(Decrease) in cash (6) (10) (14)
---------------------------------------------
101 85 227
------------- ------------ -----------
Reconciliation of operating
profit to net cash inflow
from operating activities
Operating profit 189 30 161
Exploration costs written off 21 12 34
Depletion and decommissioning 102 85 177
Movement on provision for
oil and gas assets - - 3
Movement on provision for
reorganization costs (5) (10) (26)
Movements in operating
working capital balances (6) 101 133
-------------------------------------------
Net cash inflow from
perating activities(2) 301 218 482
(2) First half 1999 cashflow from operating activities includes
(pound)146 million non-recurrent cash flows arising from gas
contract renegotiation. The comparative figure for full year 1999
was (pound)220 million.
STATEMENT OF TOTAL RECOGNIZED GAINS AND LOSSES
First Half
-----------------------------------
2000 1999
(pound)million (pound)million
------------------ -------------
Profit for the period 120 19
Exchange differences
on retranslation of
foreign currency net
investments 29 (9)
------------------ -------------
Total recognized
gains and losses
relating to the
period 149 10
------------------ -------------
NOTES
First half Full year
------------------------------------ -----------
2000 1999 1999
(pound) (pound) (pound)
million million million
(restated) (restated)
------- -------------- -----------
1 Segmental information
Turnover by source
UK 291 137 385
Indonesia 86 54 117
Venezuela 56 12 46
Other International 30 13 36
-------------------------- -----------
Group and share of
joint venture 463 216 594
Share of joint
venture's turnover 37 23 53
-------------------------- -----------
Turnover 500 239 647
-------------------------- -----------
Profit/(loss)
before taxation
UK 126 19 103
Indonesia 44 22 51
Venezuela 15 (2) 7
Other International 14 (1) -
-------------------------- -----------
199 38 161
Share of joint
venture - Indonesia 26 10 27
Unallocated
administrative
expenses (10) (8) -
Exceptional items (2) 16 41
Net interest expense (28) (5) (18)
-------------------------- -----------
Profit
before taxation 185 51 211
-------------------------- -----------
NOTES: continued
First half Full year
--------------------------------------------
2000 1999 1999
(pound) (pound) (pound)
million million million
(restated) (restated)
----------- ----------- ----------
2 Cost of sales
Operating costs 117 78 183
Depletion 98 75 169
Decommissioning 3 6 4
Royalties 13 3 12
PRT charge 12 2 11
--------- ----------- ----------
243 164 379
--------- ----------- ----------
3 Net interest
(payable)/receivable
First half Full year
---------------------------------------
2000 1999 1999
(pound) (pound) (pound)
million million million
(restated) (restated)
---------------------------------------
Interest on loans (47) (52) (104)
Capitalized on
development activities 5 12 39
FRS 12 unwinding
of discount (3) (2) (5)
---------------------------------------
(45) (42) (70)
Interest receivable 16 36 50
PRT interest 1 1 2
---------------------------------------
(28) (5) (18)
---------------------------------------
Both the first half and full year 1999 Interest Receivable include
(pound)9 million in respect of an accrual for interest payable on
corporate tax for prior years.
4 Taxation
First half Full year
---------------------------------------
2000 1999 1999
(pound) (pound) (pound)
million million million
(restated) (restated)
---------------------------------------
UK corporation
tax charge 23 5 8
Overseas taxation 38 18 49
---------------------------------------
61 23 57
---------------------------------------
The taxation charge
relates to the
following:
Parent and subsidiaries 48 16 40
Joint venture 13 7 17
---------------------------------------
61 23 57
---------------------------------------
NOTES: continued
First half Full year
----------------------------------------
2000 1999 1999
(pound) (pound) (pound)
million million million
----------------------------------------
5 Capital expenditure
Exploration and appraisal 38 32 63
Development and production 90 105 243
Other - - 523
----------------------------------------
128 137 829
----------------------------------------
At At
June 30 December 31
2000 1999
(pound)million (pound)million
------------- ---------------
6 Net debt: equity
Net debt:
Long term debt 1,044 1,002
Short term debt 62 58
Cash, deposits and investments (314) (384)
AUK Loan Notes (187) (187)
------------- ---------------
Total net debt 605 489
------------- ---------------
Capital employed 1,467 1,468
------------- ---------------
Net debt as a percentage
of capital employed 41% 33%
------------- ---------------
7 Basis of preparation
The financial information has been prepared on the basis of
the accounting policies set out in the Group's 1999 statutory
accounts.
The Group taxation charge is calculated by applying the
directors' best estimate of the annual effective rate to the
profit for the period.
8 Redemption of Preference Shares
On February 16, 2000 the Group redeemed all of the
outstanding US $250 Cumulative Dollar Preference Shares. As a
result an amount of (pound)155 million has been transferred
from the profit and loss account reserve to other reserves.
9 Forward looking statements
Except for the historic information contained herein, this
Interim Results Announcement includes forward-looking
statements as defined in the United States Securities
Exchange Act of 1934 that involve risk and uncertainties,
including commodity price, development and operational risks,
and other risk factors detailed from time to time in the
Company's publicly available Securities and Exchange
Commission reports, which would cause actual results to be
materially different.
10 Statutory accounts
The financial information shown in this publication is
unaudited and does not constitute statutory accounts. The
1999 statutory accounts have been delivered to the Registrar
of Companies and the report of the auditors on those accounts
was unqualified. The auditors have carried out a review of
the first half 2000 financial information and their report is
set out below. This announcement is being sent to holders of
Company's listed securities and copies will be available to
members of the public at the Company's registered office at
101 Bishopsgate, London EC2M 3XH.
INDEPENDENT REVIEW REPORT TO LASMO plc
Introduction
We have been instructed by the company to review the financial
information set out on pages 14 to 19 and we have read the other
information contained in the interim report and considered whether it
contains any apparent misstatements or material inconsistencies with
the financial information.
Director's responsibilities
The interim report, including the financial information contained
therein, is the responsibility of, and has been approved by the
directors. The Listing Rules of the Financial Services Authority
require that the accounting policies and presentation applied to the
interim figures should be consistent with those applied in preparing
the preceding annual accounts except where any changes, and the
reasons for them, are disclosed.
Review work performed
We conducted our review in accordance with guidance contained in
Bulletin 1999/4 issued by the Auditing Practices Board. A review
consists principally of making enquiries of group management and
applying analytical procedures to the financial information and
underlying financial data and based thereon, assessing whether the
accounting policies and presentation have been consistently applied
unless otherwise disclosed. A review excludes audit procedures such as
tests of controls and verification of assets, liabilities and
transactions. It is substantially less in scope that an audit
performed in accordance with Auditing Standards and therefore provides
a lower level of assurance than an audit. Accordingly we do not
express an audit opinion on the financial information.
Review conclusion
On the basis of our review we are not aware of any material
modifications that should be made to the financial information as
presented for the six months ended June 30, 2000.
Ernst & Young
London
August 2, 2000
PRODUCTION STATISTICS
First half Full year
--------------------- -----------
2000 1999 1999
--------- --------- -----------
Crude oil (bopd):
UK 76,700 66,100 73,000
Indonesia 4,500 7,900 6,200
Venezuela 30,100 18,700 22,000
Other International 8,500 6,800 6,400
-------- ---------- -----------
119,800 99,500 107,600
-------- ---------- -----------
Natural gas (Mcfd)
UK 186,000 149,200 160,800
Indonesia 166,100 162,800 162,900
Other International 10,000 12,400 11,900
-------- ---------- -----------
362,100 324,400 335,600
-------- ---------- -----------
Total (boepd) 180,200 153,600 163,500
Share of production of
joint venture 14,200 15,400 14,700
-------- ---------- -----------
Total (boepd) - including
joint venture 194,400 169,000 178,200
-------- ---------- -----------
Gas production has been converted at 6Mcf per boe.
UK comprises all of the Group's UK Continental Shelf and The
Netherlands North Sea interests.
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