1
23 November 2006
Granby Oil and Gas plc
("Granby" or "the Company" or "the Group")
Interim results for the six months ending 30 September 2006
Granby, the oil and gas exploration and production company with interests in the UK North Sea and the
Philippines, announces its interim results for the six months ending 30 September 2006.
Highlights
In the six months to 30 September 2006, Granby has:
* farmed out a part interest in UK Block 15/13b to Nexen Inc and Gas Plus in exchange for a full
carry of Granby's remaining 23.375% interest. The well, which will explore Granby's Guinea prospect,
is expected to begin drilling in December 2006
* completed farm out arrangements with Centrica and Gas Plus for UK Block 42/28c where a well to
explore Granby's Watling prospect is expected to begin drilling in December 2006
* announced a farm in with a 10% carried interest to UK onshore licence PEDL071 where a well is
planned for early 2007
* farmed out a 10% interest in blocks 14/8a, 14/9a and 14/14b to Atlantic Petroleum (subject to
DTI consent)
* completed a placing of 10.7 million ordinary shares of 0.5p at a price of 84p per share to
raise �9.0 million (before expenses of �0.4 million)
Since 30 September 2006, Granby has:
* completed the acquisition of the Group's second development project, Tristan North West, from
ExxonMobil and executed a loan facility agreement with Mitsubishi Corporation for the development
* completed the financing arrangements for the development of the Galoc oil field in the
Philippines which is now fully approved by co-venturers and the relevant authorities
* recorded its first reserves, of 0.90 million barrels, on the Galoc field (up 38% from the 0.65
million barrels of contingent resources previously recognised)
* increased its carried interest in the Watling prospect in block 42/28c from 22.2% to 33.3%
through acquisition of TGS-NOPEC's carried participating interest
Financial highlights:
* Loss before tax �0.9 million (2005: Loss �0.9 million)
* Cash at 30 September 2006 �13.6 million (30 September 2005: �9.5 million, 31 March 2006: �7.3
million)
Resource highlights:
* Unrisked and risked resources down 13% and 6% respectively since Annual Report approval on 21
August to 314 million barrels unrisked and 61 million barrels risked as a result of additional
technical work, partly offset by the addition of the onshore licence PEDL071
David Grassick, Managing Director of Granby Oil and Gas, said:
"Granby continues to make good progress, especially against an industry background of rising costs and
a shortage of resources and materials. We now have two development projects, Galoc and Tristan NW,
financed and underway and we are scheduled to participate in two more exploration wells before the end
of 2006, with further exploration drilling activity planned for next year."
Enquiries:
Granby Oil and Gas plc 020 7653 3660
David Grassick, Managing Director 07785 921080
Nigel Burton, Finance Director 077 8523 4447
College Hill 020 7457 2020
Nick Elwes
Paddy Blewer
Operational Review
Development Projects
Galoc, Philippines
Development of the Galoc Field has recently been approved by all joint venture partners, the
Philippine Department of Energy ("DOE") and the Philippine Department of Environment and Natural
Resources ("DENR"). Granby, through its wholly owned subsidiary Team Oil, has a 9.14% indirect
interest in the development via its 15.69% shareholding in Galoc Production Company ("GPC"), which
operates the development with a 58.29% participating interest.
The award of the project's first two major contracts (being for a drilling rig, the Energy Searcher,
and for the purchase of subsea trees) was announced on 3 August 2006. Since then, a contract for the
lease and operation of a Floating Production Storage and Offloading ("FPSO") vessel has been placed
with Rubicon Offshore International, Singapore. Rubicon is in the process of converting the vessel
Rubicon Intrepid to provide capacity for 25,000 barrels of fluid per day production and approximately
400,000 barrels of storage.
Development drilling is scheduled for Third Quarter 2007 followed by installation of the subsea
equipment and hook-up of the FPSO in late Fourth Quarter 2007. First oil is expected in First
Quarter 2008. The capital cost for the first phase of the development is expected to be approximately
$86m.
Granby's contribution to the project will be partially funded by equity and loans from Granby plus non-
recourse project finance debt. In addition, as previously announced on 11 August 2006, Granby will be
required to provide guarantees for recourse debt and completion support of approximately �3.2m.
Following approval of the field development plan, Granby is able to record its first reserves for the
Galoc field. The estimates shown below, which indicate a most likely (proven and probable) case of
0.90 million barrels, a 38% increase on the 0.65 million barrels prospective resources previously
announced. These estimates derived from the operator's Reservoir Development Plan Granby is continuing
its own review of the independent reserves certification report conducted by Gaffney, Cline &
Associates ("GCA"), which shows a P50 case of 23.1 million barrels and which would equate to 1.8
million barrels net to Granby, and will make a further announcement if necessary when this review is
completed.
The net figures attributed below are Granby's pro-rata share of the net figures for GPC's interest in
the Galoc oil field ('net working interest').
Oil & Gross Net attributable to Granby Operator
Liquids
Reserves
Millions
of barrels
(mmbbls)
Proven Proven & Proven & Proven Proven & Proven &
Probable Probable & Probable Probable &
Possible Possible
Galoc 4.44 9.84 20.78 0.41 0.90 1.90 Galoc
Field Production
Company
Source: Granby
Tristan NW, Southern North Sea
We are pleased to announce today that Granby and Mosaic Natural Resources Limited ("Mosaic") have
completed a Sale and Purchase Agreement with Exxon Mobil to acquire participating interests in block
49/29b which contains the Tristan North West gas field. The Tristan North West field contains proven
gas, which was discovered in 1987 by the 49/29b-5 exploration well. Granby has acquired a
participating interest of 42%, and Mosaic has acquired a 28% participating interest in the field.
Granby and Mosaic have reached agreement with Mitsubishi Corporation, which has established its wholly
owned subsidiary MCX Exploration (UK) Limited, in its first North Sea venture, to acquire a 30%
participating interest in the block in association with certain financing arrangements for the
development of the field.
The assignment to MCX Exploration (UK) Limited and development of the Tristan North West field remains
subject to a number of conditions including approval of the Field Development Plan by the Department
of Trade and Industry ("DTI"). Granby and its partners are working towards bringing the field into
production in the Fourth Quarter of 2007. Further details on anticipated production rates and reserves
will be released after approval of the Field Development Plan.
The field will be developed via a single new subsea well tied back to existing facilities. First
production is currently anticipated to be in late 2007, subject to availability of a suitable rig and
other items with long lead times.
Contingent resources for the North West Tristan Field are shown below.
Gas Gross Net attributable to Granby Operator
Contingent
Resources
Billion cubic
feet (bcf)
Proven Proven & Proven & Proven Proven & Proven &
Probable Probable Probable Probable &
& Possible
Possible
Tristan North 21.9 27.3 33.4 9.2 11.5 14.0 Granby
West Field
Source: TRACS
Exploration
North Sea Resources: As at 30 September 2006, Granby's net unrisked prospective resources (P50 case)
in its North Sea and onshore UK exploration prospects have decreased during the six month period since
31st March 2006 to 314 million barrels of oil equivalent. Net risked prospective resources are now 61
million barrels of oil equivalent (P50 case). This represents a reduction in the Company's net
prospective resources in the North Sea of 13% unrisked and 6% risked since 21 August 2006 when the
Board approved the FY2005/06 audited accounts as a result of additional technical work, partly offset
by the addition of the onshore licence PEDL071. Since 31st March 2006 unrisked and risked resources
have each reduced by 26% , mainly as a result of the farm outs.
It should be noted that technical work is still ongoing in a number of Granby's UK licences, and that
additional prospects currently being worked up will be added to the portfolio in due course.
Granby has also applied for additional acreage in the UK 24th Licensing Round, and hopes to be able to
update shareholders on this subject shortly.
Granby's North Sea exploration strategy remains unchanged, with the majority of our prospects lying in
relatively shallow water close to existing infrastructure and able to be drilled using relatively
shallow, low cost wells.
The updated table of Granby's prospective resources is shown below.
Gross unrisked (100%) Net unrisked volume Net risked volume
volume Attributable to Granby Attributable to Granby
Prospect P90 P50 P10 P90 P50 P10 P90 P50 P10
Northern North Sea
Prospects 284 391 524 93.3 128.7 171.7 16.7 23.2 31.0
Outer Moray Firth
Prospects 305 526 804 91.2 171.6 274.3 18.3 33.0 51.2
Total for Oil & Liquids
mmboe 589 917 1,328 184.5 300.3 446.0 35.0 56.2 82.2
Total for gas bcf
233 376 554 50.7 80.2 117.7 18.1 27.5 38.8
Total for Gas expressed
as millions of barrels 40 65 96 8.7 13.8 20.3 3.1 4.7 6.7
of oil equivalent
(mmboe)*
Totals for Oil, Liquids
and Gas mmboe at 30 629 982 1,424 193.2 314.1 466.3 38.2 61.0 88.9
September 2006
Note that the above table does not reflect the increased interest in the Watling prospect announced on
16 November 2006 which has the effect of increasing net unrisked and net risked resources by 2.9 and
1.0 mmboe respectively
Columns may appear not to add due to rounding
* Conversion factor applied being 1 bcf gas = 5.8 mmboe
mmbbl = million barrels
mmboe = million barrels of oil equivalent
bcf = billion cubic feet
Included in the table above are P50 net risked resources of 20mmbbl for the Guinea prospect and 14bcf
for the Watling prospect, both of which are expected to be drilled in December 2006
The table below highlights the changes that have occurred to Granby's net risked prospective resources
in the period from 31st March 2006, as shown in the Annual Report, to 30 September 2006, which have
resulted primarily from dilution due to successful farmouts.
Licence, Block, 31 March 2006 30 September 2006 Change Explanation
Prospect P50 net risked volume P50 net risked volume (mmboe)
(mmboe) (mmboe)
P1212 20.4 7.6 -12.7 Reduction of equity from 65% to
15/13b Guinea 24.375% on farmout
P1212 6.8 2.5 -4.2
15/13b Eagle
Subtotal due to -17.0
farmouts
P1209 3.1 0.0 -3.1 Prospect reassigned 'lead' status
13/19 & 13/24c and no longer included in table
P1404
13/25 Centurion
PEDL071 Burton 0.0 0.13 +0.1 Farm-in to former 'Fraisthorpe'
Agnes-1 prospect, now renamed Burton Agnes-
1
Technical -1.1
Adjustments
Total -21.0
difference
(mmboe)
Columns may appear not to add due to rounding
The prospective resources above have been reviewed independently in a recent competent persons report
("CPR") prepared by TRACS international. This CPR has been prepared in accordance with the guidance in
AIM notice 16 (AIM Rules - Guidance for Mining and Oil & Gas Companies) issued in March 2006. This
resource update is prepared in accordance with the definitions used by The Society of Petroleum
Engineers. The numbers quoted are those of TRACS. The contingent resources for the North West Tristan
Field have also been independently reviewed by TRACS. The reserves quoted for the Galoc Field are
Granby's own numbers derived from the operator's Reservoir Development Plan. As mentioned above,
Granby continues to review the independent reserves certification report conducted by Gaffney, Cline &
Associates. These figures have been reviewed by Richard Moreton, Executive Director, a geophysicist
with 22 years' relevant experience.
Outlook
Against an industry background of rising costs and a shortage of resources and materials, Granby is
maintaining a high level of business activity to provide its investors with exposure to good quality
exploration opportunities and to create valuable oil and gas developments to underpin the business.
Granby's technical and management teams continue to enhance the business with innovative developments
and financing.
Granby Oil and Gas plc
Interim financial information
for the six months ended 30 September 2006
Group income statement Six months to Six months to Year to 31
30 September 30 September March 2006
2006 2005
Notes (Unaudited) (Unaudited) (Audited)
�'000 �'000 �'000
Revenue - 126 126
Impairment of intangible assets - - (1,445)
Other administrative expenses (1,065) (1,149) (1,894)
Operating loss (1,065) (1,023) (3,213)
Interest receivable 165 128 304
Loss before tax (900) (895) (2,909)
Taxation
- - -
Loss after tax (900) (895) (2,909)
Loss per share 2 (3.32)p (4.43)p (13.14)p
Basic and Diluted
All operations were continuing throughout the periods
Granby Oil and Gas plc
Statement of recognised income and expense
Six months to Six months to Year to 31
30 September 30 September March 2006
2006 2005
(Unaudited) (Unaudited) (Audited)
�'000 �'000 �'000
Revaluation of available for sale securities (45) (253) (149)
Loss for the period (900) (895) (2,909)
Total recognised income and expense for period (945) (1,148) (3,058)
Granby Oil and Gas plc
Group balance sheet As at 30 As at 30 As at 31
September 2006 September March 2006
2005
(Unaudited) (Unaudited) (Audited)
�'000 �'000 �'000
ASSETS
Non-current assets
Intangible assets 238 151
46
Property, plant and equipment 66
51 34
Financial assets 3 1,346 369
518
1,635 598 586
Current assets
Trade and other receivables 362
90 148
Cash and cash equivalents 13,625 9,524
7,254
13,987 9,614
7,402
LIABILITIES
Current liabilities
Trade and other payables 187 160
69
Current tax liabilities -
- -
Provisions for liabilities and charges 149 226
373
336 442
386
Net current assets 13,651 9,172
7,016
Net assets 15,286 9,770
7,602
EQUITY
Called up share capital 182 128
128
Share premium 18,938 10,368 10,363
Other reserves 46 240 91
Accumulated losses (3,880) (966) (2,980)
Total shareholders' equity 15,286 9,770
7,602
Granby Oil and Gas plc
Group cash flow statement Six months to Six months to Year to 31
30 September 30 September March 2006
2006 2005
(Unaudited) (Unaudited) (Audited)
�'000 �'000 �'000
Cash flows from operating activities
Operating loss for the period (1,065) (1,013) (3,213)
Depreciation of property, plant and equipment 17 6 19
Amortisation of intangible assets 9 - 11
Impairment of intangible assets - - 1,445
Operating cash flows before movements
in working capital (1,039) (1,007) (1,738)
(Increase) in trade and other operating (214) (17) (75)
receivables
(Decrease)/increase in trade and other operating (50) 15 (212)
payables
Net cash used in operating activities (1,303) (1,009) (2,025)
Purchase of property plant and equipment (2) (33) (78)
Purchase of intangible assets (98) (43) (58)
Purchase of investments - (11) (24)
Loan advanced to GPC (1,022) - -
Exploration expenditure - - (1,353)
Interest received 165 128 304
Net cash used in investing activities (957) 41 (1,209)
Issue of ordinary shares 9,000 11,500 11,500
Costs of share issues (372) (1,065) (1,069)
Net cash inflow from financing activities 8,628 10,435 10,431
Net increase in cash and cash equivalents 6,368 9,467 7,197
Cash and cash equivalents at beginning of period 7,254 57 57
Cash and cash equivalents at end of period 13,622 9,524 7,254
Granby Oil and Gas plc
Group statement of changes in equity (unaudited)
Share Share Retained Other Total
Capital Premium Earnings Reserves Equity
�'000 �'000 �'000 �'000 �'000
At 1 April 2005 60 - (71) 493 482
Loss for the period - - (895) - (895)
Issue of share capital 68 11,432 - - 11,500
Costs of share issue - (1,064) - - (1,064)
Revaluation of investments - - - (253) (253)
At 30 September 2005 128 10,368 (966) 240 9,770
Loss for the period - - (2,014) - (2,014)
Costs of share issue - (5) - - (5)
Revaluation of investments - - - (149) (149)
At 31 March 2006 128 10,363 (2,980) 91 7,602
Issue of share capital 54 8,946 - - 9,000
Costs of share issue - (371) - - (371)
Loss for the period - - (900) - (900)
Revaluation of investments - - - (45) (45)
At 30 September 2006 182 18,938 (3,880) 46 15,286
Notes to the interim financial information
1. Basis of accounting and presentation of financial information
This unaudited interim financial information comprises the interim consolidated balance sheets as at
30 September 2006 and 30 September 2005 and related group interim statements of income, cash flows,
recognised income and expense and changes in equity for six months ended 30 September 2006 and 30
September 2005 (hereinafter referred to as 'Financial Information'). The information contained in
these statements in relation to the year ended 31 March 2006 does not constitute statutory accounts as
defined in section 240 of the Companies Act 1985. A copy of the audited and unqualified statutory
accounts for that year has been delivered to the Registrar of Companies. The interim financial
information, including all comparatives, has been prepared in accordance with the Rules of the
Alternative Investment Market issued by the London Stock Exchange.
The interim financial information has been prepared in accordance with the principal accounting
policies as set out in the Group's annual financial statements for the year ended 31 March 2006. The
accounting policies have been consistently applied to all periods presented.
The Group has elected not to adopt IAS 34, Interim financial statements and, therefore, this interim
financial information is not in compliance with IFRS.
2. Loss per share
The calculation for the basic loss per share is based on the loss for the period after taxation of
�0.900m (2005: Loss �0.895m) and a weighted average number of shares in issue of 27,099,478 (2005:
20,188,754)
3. Financial assets
The increase in the value of financial assets of �0.977m consists of the reduction in the value of
Granby's investment in Elixir Petroleum Limited (to �0.300m from �0.345m at 31 March 2006) plus a loan
to GPC of �1.022m which is repayable within five years
4. Dividend
The Directors do not recommend the payment of a dividend
5. Approval of the interim financial information
The interim financial information (unaudited) was approved by the Board of Directors on 22 November
2006
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