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From: Nigel
ArtDate: 12th September 2006
Section: (FILLYABOOTS NEWS RELEASES)
Remote Name: 87.74.94.108
Date: 20/09/06
Time: 08:20
12th September 2006
Rheochem - Trading update
News Item - Conduit PR
Trading update / Notice of results
The Director’s of Rheochem are pleased to announce a trading update for the Company in anticipation of their final results for the year ended 30 June 2006 which are expected to be released by 31 October.
Highlights
Expected Revenues AU$19 million, up 45% from last years (AU$13 million) Expected PBT AU$3.5 million, up 300% from last years (AU$1.2 million) Currently supplying highest ever number of rigs in Australia Post- June 2006
AU$ 8.2 million cash position as of September 2006 2nd mud/fluid blending plant commenced construction in July 2006 to supply further on-shore and offshore demand throughout Australia Oil & gas assets purchased
55% working interest with a net revenue interest of 75% per 1% working interest in 12 wells in The Raymond Blackwell lease in Texas USA. Wimbledon Oil and Gas - 10% interest in the Athena discovery on block 14/18b which is currently being drilled by Ithaca energy, 10% carried interest in 3 North sea blocks and holds a 100% operated interest in a further six North Sea blocks. Post completion Rheochem’s subsidiary Lochard Energy will own 1/3rd of Wimbledon. Commenting on the Company’s performance and activities to 30 June 2006, CEO Haydn Gardner commented: “The period has seen Rheochem service the highest ever levels of oil & gas drilling activity in our 7 year history and we are taking advantage of this unprecedented demand by increasing our supply capacity. I believe that oil prices will continue at high levels for some time considering current global demand and we have taken an important strategic decision to take stakes in exploration assets in order to drive value for Rheochem’s shareholders directly from potential finds. With our considerable expertise supplying and advising the oil & gas exploration industry I believe Rheochem is in a strong position both to grow its services business and work directly with explorers towards defining economically recoverable resources.”
For more information:
Haydn Gardner, CEO Rheochem +44 (0) 20 7987 7511
Laurence Read / Leesa Peters Conduit PR +44(0) 20 7429 6666
Olly Cairns Corporate Synergy Plc +44(0) 20 7448 4400
www.rheochem.com.au
Trading results to June 2006
The Company has had its best performing year to date with revenues expected to be in the region of AU$19 million, up 45% from last years AU$13 million result. The Company’s expected profit before interest and tax is expected to be approximately AU$3.5 million, a substantial increase of 300% from last years AU$1.2 million figure. These figures are unaudited.
As at 30 June, the Company had a healthy cash position of over AU$5.2m.
Operations
Operationally, Rheochem Ltd, the Company’s Australian drilling fluid business, is very strong with supply contracts to the highest level of rigs operating in the Company’s history. It currently has a contract to supply Santos Offshore North West Shelf Australia which is valid until December 2006. The Directors expect to renew this contract for a further 2 year period to December 2008.
Onshore operations are very busy and current indications are that more rigs will come into Australia in 2007. The onshore contract is valid until May 2008.
In July 2006 Rheochem Ltd started construction of its second drilling fluids (mud) blending plant. This is currently under construction. This plant is designed to be transportable to take advantage of offshore or onshore projects anywhere in Australia and if required internationally. It is planned to be built by 31 December 2006.
Elsewhere, the Company has been actively seeking appropriate acquisitions with oil and gas interests. Through its 100% subsidiary, Lochard Energy Ltd (“Lochard”) purchased a 55% working interest with a net revenue interest of 75% per 1% working interest in 12 wells in The Raymond Blackwell lease in Texas USA. Lochard has an option to invest in up to 100 wells in Texas on the same terms.
More recently, Rheochem signed an agreement in conjunction with a private investment company to purchase Wimbledon Oil and Gas (“Wimbledon”). Wimbledon has a 10% interest in the Athena discovery on block 14/18b which is currently being drilled by Ithaca energy. In addition it has a 10% carried interest in 3 other North sea blocks and holds a 100% operated interest in a further six North Sea blocks.
Post completion Rheochem’s subsidiary Lochard Energy will own 1/3rd of Wimbledon.
Ends
Laurence Read Conduit PR Ltd 3rd Floor 76 Cannon Street London EC4N 6AE United Kingdom Direct: +44 (0) 20 7429 6605 Office: +44 (0) 20 7429 6666 Mob: +44 (0) 7979 955 923 Fax: +44 (0) 20 7429 6699 laurence@conduitpr.com
www.conduitpr.com
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