AMINEX PLC - 2010 HALF YEARLY FINANCIAL REPORT

Highlights



OPERATIONAL


• Kiliwani North gas field - Resolution of regulatory issues at gas plant opens way to commercialisation
• Ruvuma PSA - First well proves up potential for oil as well as gas
• Nyuni PSA - Seismic and remapping at Nyuni firm up prospects for drilling
• Shoats Creek - New well completed for production in Cockfield sands
• Shoats Creek - AMI signed with El Paso to explore shared deep oil potential with first joint well now drilled and currently being tested
• Korea East Sea - New partner introduced and PSC signed covering 50,000 km²
• Egypt, West Esh el Mellahah - PSC extended to second term


FINANCIAL



• Oil production of 16,000 bbl (2009: 24,000 bbl) and gas production of 133,000 Mcf (2009: 302,000 Mcf) suffered temporary fall in the period
• Loss before tax of US$2.49 million (2009: US$1.15 million)


Aminex chairman Brian Hall said: "Tanzania is increasingly becoming a focus of industry interest as major international oil companies prepare their drilling programmes. Aminex, an early entrant, has already drilled the most significant exploration discovery in the country in recent history, Kiliwani North, and intends to continue exploring and developing its Tanzanian assets in a very positive manner.


The recently-drilled first well to test a deep Wilcox prospect in our Shoats Creek property, Louisiana, based on new 3D seismic data, is potentially a major step forward in our US activities. A test result will be available shortly."


 
Operations Overview



Since the end of the reporting period, Aminex has been advised by the parties concerned that outstanding issues between the Tanzanian Government regulator and the regional pipeline operator, which were holding up the expansion of a gas plant at Songo-Songo Island, have now been satisfactorily resolved so that detailed engineering plans can be submitted for final approval. This will lead to facilities becoming available to transport gas from the Kiliwani North field to market in the Dar es Salaam region which will significantly increase revenues.

Aminex has been drilling actively since the beginning of 2010. The Tullow-operated Likonde-1 well in the onshore Ruvuma basin of Tanzania (Aminex - 37.5%) and the Aminex-operated Olympia Minerals-1 well ("OM-1", Aminex - 100%) at Shoats Creek, Louisiana, were both spudded in the first quarter. Likonde-1 provided encouraging information about an under-explored basin but was not a commercial discovery. OM-1 has now been completed for production, the first new well to be drilled on the Company's Shoats Creek property with benefit of new 3D seismic.

 During the reporting period, seismic processing, re-processing, interpretation and mapping were completed over the Nyuni PSA in Tanzania with very constructive results, tabulated later in this statement. Reported contingent resource GIIP of over 200 BCF (equivalent to roughly 30 million bbl) and prospective resource GIIP of over 2.5 TCF (equivalent to roughly 400 million bbl) on a Pmean basis are providing the platform for a development programme at the Kiliwani North gas field and helping identification of future exploration drilling targets.




In June 2010, Aminex was invited to take a minority interest in a broader exploration programme in the same general area of Louisiana as its Shoats Creek property. The Company used its existing shareholder authority to place 17.2 million new shares for cash, to raise approximately US$1.7 million before expenses and to fund the entry cost of this unbudgeted opportunity. At the time of writing negotiations with the third party are still ongoing.



Since the reporting date, the Company's wholly-owned US subsidiary has signed an Area of Mutual Interest Agreement ("AMI") in Louisiana with Shoats Creek neighbour El Paso E&P, LP ("El Paso") for joint exploration of a deep prospect in Upper Wilcox sands which is believed to span the acreage of both companies. A 50-50 split has been agreed and a first well, Olympia Minerals-10-1 ("OM-10-1"), has now been drilled to a total measured depth of 12,410 feet (3,783 metres), encountering and logging potential hydrocarbon-bearing sands which are currently being tested. Aminex's side of the AMI covers approximately one quarter of the surface area of the Shoats Creek leases.


Early in the year the Company sold a 50% interest in its subsidiary Korex Limited which holds interests in the Democratic People's Republic of Korea ("DPRK"). In May Korex Limited signed a PSC with the Korea Oil Exploration Company, the state oil company of the DPRK, covering approximately 50,000 km² offshore, deep and shallow water, in the Korean East Sea. The new contract is in substitution for previous PSCs and provides a strong basis for going forward in this controversial but highly prospective country, in partnership with Chosun Energy which will manage operations from its base in Singapore.

 In Egypt, the promising South Malak-1 well was not in the end established as a commercial producer, despite having recovered limited quantities of oil, but this means that Aminex's share of costs will continue to be carried by other partners. The joint venture is sufficiently encouraged to have committed to extend the licence into a second term, with a commitment to drill two further wells at no cost to Aminex except in the event of a commercial discovery.






Outlook

 In Tanzania, two significant events will lead to further progress on the Nyuni PSA. Firstly, recent resolution of the issues which have stalled expansion of the gas treatment plant at Songo-Songo Island for the last two years will now enable the Company to move forward with development of the Kiliwani North gas field, which lies within the Nyuni PSA. Secondly, the mapping exercise completed by independent consultants ISIS during the reporting period has firmly established the further potential of the acreage and this will enable the Company to plan its future exploration drilling programme at Nyuni with a far higher level of confidence than before. The next well to be drilled at Nyuni is likely to test one of the large prospects close to Nyuni Island with a spud date in the first quarter of 2011. An application for a development licence at the Kiliwani North field will be submitted to the Tanzanian authorities in the near future.

In the onshore Ruvuma Basin operator Tullow Oil continues to analyse the results of Likonde-1 prior to proposing a new well location. A follow-up well to Likonde-1 is scheduled to be drilled in the first half of 2011.



In the USA, further drilling locations at Shoats Creek will be determined once the results of OM-10-1, currently being tested, are known. Further drilling is likely at the Alta Loma field in Texas during 2011, originally planned for 2010 but now deferred.

Aminex will also lobby hard for a completion of behind-pipe reserves in the 60 foot "S" sands in the Sunny Ernst-2 well at Alta Loma, which has the potential to increase Company revenues significantly and more than replace declining production lost from the Upper Andrau formation in the same well.




Preliminary work on the new Korean PSC is already in progress but no field work in the East Sea or major expenditure is anticipated during the remainder of 2010.


Further drilling is unlikely in Egypt during the remainder of this year.

Operations Report



Aminex's principal activities consist of oil and gas exploration, development and production in Tanzania and in the US states of Texas and Louisiana. In addition the Company participates in a PSC onshore in Egypt and is a shareholder in Korex Limited which holds a PSC offshore in the East Sea of Korea. Aminex's wholly-owned subsidiary AMOSSCO Limited provides equipment, consumables and logistical services to the international oil industry and supports the Company's operated wells during drilling.






Tanzania - Nyuni PSA, including the Kiliwani North gas discovery


Aminex has a 50% interest in the Nyuni/East Songo-Songo PSA and has drilled three wells to date, as operator. Of these,

Nyuni-1 was drilled in 2004 and intersected gas-bearing Aptian-Albian sands which are now considered to contain 233 BCF contingent resource gas in GIIP (Pmean basis)

Kiliwani North-1 (KN-1) which was drilled in 2008, testing gas at a flow rate of 40 MMcfd (equivalent to 6,600 BOPD).

The Kiliwani North field is considered to contain 45 BCF contingent resources gas in place (Pmean basis) in Neocomian age sandstones.

The contingent resource from the untested Aptian-Albian sands in Nyuni-1 is therefore now considered to be much larger than the contingent resource at the Kiliwani North field.
Contingent and prospective resources have been mapped and independently calculated by ISIS Petroleum Consultants, following (1) acquisition and processing of new seismic in 2009, (2) reprocessing of existing data and (3) integration of all seismic data sets and well data. Contingent resources (identified by drilling) and prospective resources (identified by seismic) together total over 2.8 TCF gas in place, equivalent to approximately 460 million bbl.

The Kiliwani North discovery well is located on the southern tip of Songo-Songo Island, 2.5 kilometres overland in a straight line from the gas treatment plant for the producing Songo-Songo gas field which delivers gas to market in Dar es Salaam via a 200 km common-user pipeline. This plant needs to be expanded in order to handle additional volumes of gas including production from KN-1, but progress has been stalled for two years pending resolution of certain issues between the Tanzanian regulator and the regional pipeline operator. However Aminex has been informed by the parties concerned that these issues have now been resolved so that detailed engineering plans can be submitted for final approval. Although no final timetable has been yet been confirmed by the pipeline operator, Aminex estimates that first gas will be delivered into the line from KN-1 in the first half of 2012 at a likely initial production rate of 20 MMcfd (equivalent to approximately 3,300 BOPD). With this gas plant expansion deadlock now resolved, a 25-year development licence application for Kiliwani North will be submitted to the Tanzanian authorities in the near future.



Further drilling is planned for 2011 at Nyuni and the next well is likely to test one of the prospects close to Nyuni Island, using a land rig which will drill directionally from an existing well site previously constructed by Aminex on the Island. New discoveries of gas could potentially be tied back to the KN-1 site which may ultimately become a gas gathering hub for the whole PSA area.


The Nyuni PSA is now in its third and final period and will expire in 2011, being the first PSA in Tanzania ever to last for its full term. The proposed 25-year Kiliwani North development licence will not be affected by the expiry of the PSA but the remaining exploration acreage cannot be further extended under Tanzanian law. However, the Tanzanian authorities have indicated their willingness to negotiate a completely new PSA at Nyuni, to become effective upon expiry of the existing one and have indicated that they will be prepared to finalise this before further exploration drilling commences.

 Tanzania - Ruvuma PSA


The Ruvuma PSA covers approximately 12,000 km² (roughly 80% onshore/20% offshore) on the Tanzanian side of the Ruvuma Basin, one of the last under-explored great river basins on the African continent.


The Likonde-1 well was drilledduring the reporting period, being the first of two commitment wells during the first (extended) period of the Ruvuma PSA. The operator is Tullow Oil (50%).


By contributing to back costs and paying 18.75% of the cost of Likonde-1, Solo Oil PLC has earned a 12.5% interest in the PSA from the Company, effectively reducing Aminex's working interest to 37.5%.


Likonde-1 was drilled to an extended total depth of 3,647 metres, encountering over 250 metres of potential reservoir sands with evidence of crude oil from sidewall cores. Strong readings of natural gas were recorded through virtually the entire well bore and drilling had to be halted after a high influx of gas and high temperatures were encountered. The well is providing a wealth of data on this under-explored basin and strong encouragement for future drilling. However, Likonde-1 itself was not a commercial discovery and has now been plugged and abandoned.


A revised evaluation of the potential of this PSA is still in progress, based on the knowledge gained from Likonde-1. The future programme and next drilling location have not yet been finalised, although a follow-up well is planned for the first half of 2011.


The Ruvuma Basin is now the subject of intense industry interest. Exxon-Mobil and BG have separately farmed into offshore blocks on the Tanzanian side of the basin whilst Anadarko and partners are engaged in a major drilling programme on the Mozambique side of the basin (where, for the avoidance of confusion, the basin is known as "Rovuma"). Aminex and partners hold all the prospective onshore acreage on the Tanzanian side of the Ruvuma River, the frontier between Tanzania and Mozambique.


Tanzania - West Songo-Songo PSA, coastal/offshore


Aminex participates in the West Songo-Songo PSA with a 50% interest. The operator is Key Petroleum Ltd. which holds the remaining 50%. The PSA covers 504 km² and adjoins both the Nyuni PSA and the producing Songo-Songo gas field. West Songo-Songo lies within the Rufiji basin, a proven producing trend which includes the Songo-Songo gas field and Aminex's Kiliwani North gas field. Key Petroleum plans to reprocess existing seismic but no substantial progress has yet been made on this. A first well is due to be drilled in 2011. Despite limited progress to date, Aminex considers West Songo-Songo to be a valuable component of its Tanzanian portfolio and any gas discovery in due course could be tied into a gas hub based at Kiliwani North on Songo-Songo Island.


USA - Shoats Creek, Louisiana


There has been intense activity on the Company's wholly-owned Shoats Creek leases during the reporting period and the ongoing interpretation of new 3D seismic data has defined several locations for further drilling in the untested Lower Wilcox sands.


At the beginning of the year, Aminex granted a 90-day exclusive farm-in option to Black Tip Petroleum to acquire 50% of the property in return for a cash payment. Black Tip was unable to complete this farm-in and the option lapsed but subsequent progress may prove this to have been a satisfactory outcome for the Company.


In February the Olympia Minerals-1 well ("OM-1") was spudded (Aminex 100%) and drilled to approximately 9,000 feet. The objective of this well was the Cockfield formation and several Cockfield zones were logged and very extensively tested. This well has now been completed in the Cockfield 2 ands and is on production. OM-1 needs careful management due to waxing and sanding issues. Stabilised production on pump is expected to be 150 BOPD, representing a step increase in US production levels and it will become a material component of Aminex's overall production.




Since the end of the reporting period, the Company's wholly-owned US subsidiary has signed an Area of Mutual Interest Agreement ("AMI") in Louisiana with Shoats Creek neighbour El Paso E&P Company, LP ("El Paso") for joint exploration of a deep prospect in Upper Wilcox sands which is believed to span the acreage of both companies. A 50-50 split has been agreed and a first well, Olympia Minerals-10-1 ("OM-10-1") has now been drilled to a total measured depth of 12,410 feet (3,783 metres), encountering and logging potential hydrocarbon-bearing sands which are currently being tested. The AMI covers approximately one quarter of the surface area of the Company's Shoats Creek leases.


Further drilling of the Wilcox with El Paso is likely but the detailed programme will be determined by the test results of OM-10-1.


Aminex commissions an annual independent engineering report on its US properties. However, a decision was taken not to re-evaluate Shoats Creek reserves in early 2010 due to imminent drilling which would have quickly rendered them out of date. As soon as a result is available from the OM-10-1 well and, if applicable, some production history available from both OM-10-1 and OM-1, a new report will be commissioned incorporating data gained from both wells which drilled on the property so far this year.



USA - Alta Loma, Texas

 Aminex has a 37.5% working interest in the Alta Loma property which is operated by El Paso. Sunny Ernst-2 ("SE-2") has been producing from Upper Andrau sands since 2008 but production is now materially declining and this had a material effect on the Company's production during the reporting period. Above the Upper Andrau lies a thick section of gas logged when the well was drilled in a formation known as the "S" sand. This formation offers the possibility of much more significant production and Aminex will press hard for the "S" sand to be completed and placed on production. This should have a significant effect on production. A further well, Sunny Ernst-3 which was originally planned for 2010, is now likely to be delayed until 2011. Gross production from SE-2 is currently 1.9 MMcfd with 70 BOPD.

 

USA - Somerset and South Weslaco, Texas

 The Somerset Field close to San Antonio produces approximately 100 BOPD from multiple stripper wells with relatively high operating costs but no material production decline year-on-year. Aminex USA, Inc. is the operator and 100% owner of Somerset. The South Weslaco gas field in Hidalgo County, Texas produces approximately 1.85 MMcfd gross gas and is operated by Kaler Resources. Aminex USA, Inc. has a 25% working interest.


Egypt - West Esh el Mellahah-2, onshore Gulf of Suez

 The West Esh el Mellahah-2 (WEEM-2) PSC is a large onshore block in the Eastern Desert of Egypt, geologically positioned on the southwest margins of the Gulf of Suez Basin to the east of the Red Sea Hills, a prolific oil producing basin with multiple reservoirs, including several giant fields.

 Three obligation wells were drilled in the first period of the PSC with encouraging results but none has been placed on commercial production. The most recent, South Malak-1, was drilled to a total depth of 11,200 feet in 2009, terminating in Basement rocks. Strong gas shows were recorded while drilling over a 900 foot interval from 10,300ft to total depth. Both oil and gas were encountered and limited quantities of high quality oil recovered to surface.


WEEM-2 lies in an oil-prone but highly-faulted area. The positive shows from South Malak-1 have provided the joint venture with sufficient encouragement to extend the licence into a second period, ending September 2012, which includes a commitment to drill two further exploration wells.


In the case of establishing commercial production, WEEM-2 is located within a few kilometres of the Esh el Mellahah oil production facilities with an export pipeline to the coast.


Aminex has a 10% interest in the PSC with a free carry continuing until first commercial production under a Development Lease.



DPRK - East Sea offshore, shallow and deep water


Aminex first signed a Petroleum Agreement for co-operation in oil and gas with the government of the DPRK in 2004. However, for a number of reasons progress was slow for some time.


Despite challenging international politics, Aminex has succeeded in maintaining good working relations with the DPRK authorities and in May 2010 formally signed a Production Sharing Contract for a large offshore area in shallow and deep water in the Korean East Sea, covering approximately 50,000 km². The work obligation involves reprocessing and reinterpretation of old seismic data plus acquisition of new marine seismic data during an initial two-year period. Aminex believes that the East Sea has great potential for significant discoveries of oil and gas while recognising the political challenges in the region and the need to ensure that any applicable international sanctions are strictly observed.


Also during the reporting period Aminex introduced a new foreign partner, Singapore-based Chosun Energy Pte Ltd ("Chosun"), which will provide finance for the initial stages and a regional base in Singapore. Chosun has acquired 50% of the Company's existing DPRK interests in return for a consideration valued at US$500,000.



UK - AMOSSCO, oilfield services and supplies


 trading actively and opening up markets in new areas. AMOSSCO will support procurement and logistics for the forthcoming drilling programme at Nyuni.

Financial Review



Revenue Producing Operations


Group revenues of US$2.6 million for the first six months of 2010 comprise US$1.85 million oil and gas revenues and US$0.75 million oilfield services and supplies revenues. Total revenues of US$2.6 million were 32% lower than the comparative period. Oil and gas production decreased compared with the first half of 2009: oil production was 16,000 bbls (2009: 24,000 bbls) and gas production was 133,000 Mcf (2009: 302,000 Mcf).

The decrease is attributable to the expected decline in production from the Upper Andrau zone in the Sunny Ernst-2 well ahead of partner approval to recomplete the well and perforate the "S" sand. The average oil price for the period increased by 63% from US$45.61 per bbl to US$74.48 per bbl. There was also an increase in the average gas price from US$4.01 per Mcf to US$5.05 per Mcf, an increase of 26%. Oilfield services and supplies revenues are down 54%, mainly due to a reduction in the provision of technical services to Company-operated ventures in the period.


Cost of sales, excluding depletion and depreciation, of US$1.8 million is lower than the comparative period by 29% reflecting the lower revenues in the period. Depletion and depreciation at US$0.5 million is marginally lower than 2009: the depletion charge on a barrel of oil equivalent basis has increased between the two periods because of the reduction in Alta Loma and South Weslaco reserves independently evaluated at the start of 2010.

Administrative expenses increased to US$2.9 million, an increase of 57% over 2009. The increase includes a share-based payment charge of US$810,000 (2009: US$97,000) arising on the grant of options under the Aminex PLC Executive Share Option Scheme on 4 January 2010 and a reduction in own employee costs capitalised during period. Administrative expenses are mainly incurred in sterling: there was no significant difference in the US dollar: sterling exchange rate between the half-years under review. The disposal of 50% of the Group's interest in certain Korean interests and impairment of other investments related to the Korean interests gave rise to a loss of US$68,000. This was offset by a gain on revaluation of the existing financial asset of US$306,000, leading to an overall gain on disposal of US$238,000. Finance costs of US$83,000 (2009: US$69,000) mainly represent the non-cash discount arising on the decommissioning provision. The Group continues to have negligible interest bearing debt. The resulting loss before tax of US$2.4 million is consequently greater than the loss of US$1.2 million for the comparative period.



Balance Sheet


The investment in Kulczyk, amounting to US$400,000 at 30 June 2010 is now classified as held for sale within current assets as the Company is now seeking to dispose of these shares. The net change in fair value of the assets held for sale within current assets amounted to US$68,000 in the period and this has been recorded in the statement of comprehensive income.

 Interest bearing debt (short and long-term) at 30 June 2010 stands at US$135,000, the same balance as at 31 December 2009. Total equity has decreased by US$243,000 since 31 December 2009 comprising the net loss for the period of US$2.49 million, the net loss of US$131,000 in the foreign currency translation reserve and the US$68,000 net change in fair value of assets held for sale: these losses are offset by increases amounting to US$1.63 million in the issued capital and share premium accounts following the share placing announced on 9 June 2010 and an increase of US$810,000 in the share option reserve, related to new options issued in the financial period.
Cash Flows


The share placing in June 2010 raised net proceeds of US$1.63 million. Interest bearing debt was reduced by US$33,000 (2009: US$29,000) and a new loan of US$33,000 was taken out on the purchase of equipment in the US. Net cash outflows from operating activities during the current reporting period amounted to US$374,000 compared with net cash inflows US$1.7 million for the first half of 2009, reflecting the lower revenues from US operations. The Group spent US$4.7 million on exploration and evaluation assets, mainly including its share of the Likonde-1 well, net of farm-in contributions received from Solo Oil. Aminex also spent US$2.6 million on property plant and equipment: the main area of expenditure was the drilling and testing of the Olympia Minerals-1 well at Shoats Creek.

The net decrease in cash and cash equivalents for the six month period ended 30 June 2010 was US$6.1 million which compares with a net decrease for the comparative period ended 30 June 2009 of US$1.85 million.


Related Party Transactions


There were no related party transactions during the six-month period to 30 June 2010 that have materially affected the financial position or performance of the Group. In addition, there were no changes in the related parties set out in Note 26 to the Financial Statements contained in the 2009 Annual Report that could have had a material effect on the financial position or performance of the Group during the six-month period.


Going Concern


The Directors have given careful consideration to the Group's ability to continue as a going concern and have concluded that a continuance of such a position beyond the end of fiscal 2010 will be dependent on the successful sale of assets or an alternative method of raising working capital. The Directors have reasonable expectation that the Group will be able to implement this strategy successfully and are pursuing a number of alternative options in this regard. For this reason, they continue to adopt the going concern basis in preparing this half-yearly financial report.


Principal Risks and Uncertainties


Aminex's Group activities are carried out in many parts of the world, in particular East Africa, North Africa, North Korea and the USA. We carry out periodic reviews to identify risk factors which might affect our business and financial performance. Although the summary set out below is not exhaustive as it is not possible to identify every risk that could affect our business, we consider the following to be the principal risks and uncertainties facing the business over the next six months:


Exploration risk - our exploration and development activities may be delayed or adversely affected by factors outside our control, in particular: climatic and oceanographic conditions; performance of joint venture partners; performance of suppliers and exposure to rapid cost increases; availability, delays or failures in installing and commissioning plant and equipment; unknown geological conditions resulting in dry or uneconomic wells; remoteness of location; actions of host governments or other regulatory authorities (relating to, inter alia, the grant, maintenance, changes or renewal of any required authorisations, environmental regulations - in particular in relation to plugging and abandonment of wells, or changes in law).


Production risks - our operational activities may be delayed or adversely affected by factors outside our control, in particular: blowouts; unusual or unexpected geological conditions; performance of joint venture partners on non-operated and operated properties; seepages or leaks resulting in substantial environmental pollution; increased drilling and operational costs; uncertainty of oil and gas resource estimates; production, marketing and transportation conditions; and actions of host governments or other regulatory authorities.


Commodity prices - the demand for, and price of, oil and gas is dependent on global and local supply and demand, weather conditions, availability of alternative fuels, actions of governments or cartels and general global economic and political developments.




Currency risk - although our reporting currency is the US dollar which is the currency most commonly used in the pricing of petroleum commodities and for significant exploration and production costs, other expenditures (in particular for our entral administrative costs) are made in local currencies (as is our equity funding), thus creating currency exposure.




Political risks - as a consequence of our activities in different parts of the world, Aminex may be subject to political, economic and other uncertainties, including but not limited to terrorism, military repression, war or other unrest, nationalisation or expropriation of property, changes in national laws and energy policies, exposure to less developed legal systems.


A more detailed listing of risks and uncertainties facing the Group's business is set out on page 5 of the 2009 Aminex PLC Annual Report and Accounts (available on the Aminex website www.aminex-plc.com).






Forward Looking Statements


Certain statements made in this interim management report are forward-looking statements. Such statements are based on current expectations and are subject to a number of risks and uncertainties that could cause actual events or results to differ materially from the expected future events or results referred to in these forward-looking statements.




Statement of the Directors in respect of the Half-Yearly Financial Report






We, the board of directors, as listed on page 14 of the most recent annual report confirm our responsibility for the half-yearly financial statements and that to the best of our knowledge:






● the condensed set of financial statements comprising the condensed income statement, the condensed statement of comprehensive income, the condensed balance sheet, the condensed statement of changes in equity, the condensed statement of cashflows and the related notes have been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the EU.






● the interim management report includes a fair review of the information required by:






(a) Regulation 8(2) of the Transparency (Directive 2004/109/EC) Regulations 2007, being an indication of important events that have occurred during the first six months of the financial year and their impact on the condensed set of financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year; and






(b) Regulation 8(3) of the Transparency (Directive 2004/109/EC) Regulations 2007, being related party transactions that have taken place in the first six months of the current financial year and that have materially affected the financial position or performance of the entity during that period; and any changes in the related party transactions described in the last annual report that could do so.






The total non-current assets increased to US$51.8 million at 30 June 2010 from US$45.8 million at 31 December 2009. The increase in these assets of US$6.0 million comprised US$4.3 million of E&E expenditure, principally related to Tanzania, as noted above; a further US$2.1 million incurred on the US producing business (property, plant and equipment) and a reduction in other investments of US$342,000. The Group also disposed of certain of its Korean assets in return for a combination of listed and unlisted shares, in Kulczyk Oil Ventures Inc ("Kulczyk") and Triton Petroleum Pte Ltd respectively.