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Financials

Unaudited Third Quarter And Nine Months Financial Statement and Dividend Announcement for the Period Ended 30 September 2017

Financials Archive

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Consolidated Statement of Comprehensive Income

Consolidated Statement of Comprehensive Income

Balance Sheet

Balance Sheet

Review of Performance

(A) INCOME STATEMENT/STATEMENT OF COMPREHENSIVE INCOME

Turnover Analysis

Total revenue for the Group reported was US$0.303 million for the financial period ended 30 September 2017.

The Group's Exploration and Production (E&P) activities in Kampung Minyak (KM) Oil Field generated US$56,000 in 9M2017. There was no E&P revenue recognized in 3Q2017. The KM Oil Field has ceased production since 2Q2017.

There was revenue from Oilfield Services In 3Q2017. The proceeds were contributed by PT. Prima Petrolium Services amounting to US$58,000 in 3Q2017 and totalled US$247,000 for 9M2017.

9M2017 revenue decreased by 43% as compared to that of 9M2016.

Cost and Earning Analysis

Production expenses fell by US$1.015 million or 87% for 9M2017 in comparison with 9M2016. This was due to the cessation of production activities at the KM Oil Field during 9M2017.

Staff costs were further reduced to US$0.907 million for 9M2017 as compared to US$1.549 million for 9M2016.

Depreciation also declined by 90% in 9M2017 as compared to that of 9M2016.

The total loss for 9M2017 was US$0.615 million.

There was a loss of US$0.124 million in 3Q2017. This was due to staff costs of US$207,000 and office and administrative expenses of US$195,000. There was a gain of US$232,000 arising from the reversal of provision due from subsidiary Acrux Procurement.

(B) BALANCE SHEET/STATEMENT OF FINANCIAL POSTION

Assets & Liabilities

The current assets of the Group as at 30 September 2017 decreased by US$2.321 million as compared to 31 December 2016. This was largely due to a net decrease in cash and short-term deposits by US$2.903 million.

Trade and Other Receivables increased by US0.737 million as at 30 September 2017 as compared to 31 December 2016. This was due to an increase in trade receivables from oil field services rendered by PT Prima Petroleum Services to a third party.

The non-current assets decreased by US$2.779 million in 3Q2017 compared to end 2016. This was due to a write down on KM Oil Field properties amounting to US$2.404 million in 2Q2017.

As the Group is still working towards an eventual full closure of the KM Oilfield, the non-current liabilities pertaining to KM Oil Field and provisions for oil well decommission will not be discharged until full closure is achieved.

(C) CASHFLOW STATEMENT/STATEMENT OF CASHFLOWS

Cash Flow & Working Capital

As a summary, the cash and cash equivalent position (inclusive of exchange effects) saw a net decrease of US$2.903 million for 9M2017 as compared to end of financial year 2016.

Cash used in operating activities was US$2.896 million for 9M2017. A significant increase in trade receivables was due to oil field services rendered by PT Prima Petroleum Services to a third party.

As revenue from E&P operations has ceased since 1Q2017, this led to a negative operating cash flow situation for the Group in 9M2017.

However, the cash balance of US$1.793 million will be sufficient for the Group to take on new businesses.

Update on Use of Proceeds from the Placement and Convertible Loans

From the placement and convertible loans issued between 2H2013 and 1H2015, the Company managed to raise US$37.46 million in total. The amount from the proceeds unutilised as at 30 September 2017 amounted to US$1.58 million. The list below summarises the usage of these proceeds and they are in accordance with the purpose on the placement and convertible loans.

Commentary

The oil and gas industry remains challenging with the low oil prices for the last one and a half years. We have seen this macroeconomic factor affecting many related services in the industry as well.

However, the Company has been able to continue with its oilfield services due to prudent financial management in the past years with zero gearing.

KM Oil Field

Weak economic climate in the Indonesian Oil Exploration sector continued into 3Q2017.

The reason the Group had ceased production since February 2017 was two-fold, i) to further limit losses, and ii) to diversify its revenue source.

The Group had thus decided to return the KM Oil Field back to Pertamina.

However the Group will still continue to look for new opportunities in the oil and gas service sector.

Oil field services and trading

The Group's subsidiaries UniTEQ and Acrux had ceased operations in early 2017 and we have applied with ACRA in July 2017 for the said subsidiaries to commence proceedings to be struck off.

PT. Prima Petrolium Service (PPPS, or formerly known as PT. Kampung Minyak Energy) had sold off its inventories to another oil and gas operator as the Group moves to contain and cut off non-profitable Oil and Gas business units.

However, the Group still retains minority ownership of the GKM Oil Field in Indonesia. The Group is still seeking new business opportunities especially in the Energy sector.

New business venture with Malaysia listed company

As previously announced in late August 2017, the Group had entered into a conditional shareholder's agreement with a Malaysian company, PRG Construction Sdn Bhd, a whollyowned subsidiary of PRG Holdings Berhad which is a public limited liability company listed on the Main Market of Bursa Malaysia Securities Berhad. The purpose is to seek partnership via a joint venture company for housing development contracts in Malaysia.

The Joint Venture Company, Premier Mirach Sdn Bhd was set up in Malaysia to undertake housing development contracts in Malaysia.

On 20 October 2017, the first housing project situated in the Malaysian State of Perak and valued at RM$20.5 million was awarded to JV Company Premier Mirach Sdn Bhd.

On 1 November 2017, JV Company Premier Mirach Sdn Bhd had entered into a conditional partnership agreement with another Malaysian company, Pacific Vintage Sdn Bhd, to jointly develop individual residential unit of townhouses in West Malaysia.

The Group will update more on the above new project as it materializes.


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