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Interim Results

RNS Number:9296V
TXO PLC
20 December 2005



PRESS RELEASE

For immediate release: 20 December 2005

TXO plc

Interim results for the six months ended 30 September, 2005

Highlights:

* Turnover of #555,563, up 59% over the previous six months to 31 March
2005
* Production increase of 46% to 24,091 barrels compared to 16,526 barrels
in the previous six months
* Acquisition of interests in 19 wells in the East Texas oilfield in the
period and a further acquisition of interests in 45 wells since 30th
September 2005, taking total well interests in portfolio to 348
* Seismic survey completed on exploration lease in West Texas
* European placing of 8 million shares raising #1.16 million before
expenses in October, after period end

Commenting on the results, Chairman Robin Baum said: 'We have made great
progress over the first six months of the year, and have built on the
encouraging results delivered last year'

Chief Executive, Mike Chandler said: 'The investment in our business is
continuing, highlighted by our recent acquisitions and the growing opportunities
presented by our West Texas exploration programme. Thanks to these steps being
taken to grow the company, and our well workover programme, we are confident
that production for the year end will be at our highest level yet'.

Contacts:

TXO plc
Andrew Glendinning enquiries@txoplc.com 020 7863 8852
Finance Director

Aquila Financial Limited
Peter Reilly peterreilly@aquila-financial.com 020 7849 3319
Yvonne Fraser yvonnefraser@aquila-financial.com 020 7849 3326


Chairman's statement

Building on the progress made in the previous financial year, we have increased
production for the six months to 30 September by 46% over the previous six
months to 24,091 barrels of oil.

Production in August and September was affected by the loss of one of our 3
contractors rigs in a fire (now replaced) and the impact of hurricanes Katrina
and Rita. Although our operations were not affected directly by the hurricanes,
damage to power lines and transformers in the area meant that we were left
without power for a period of time .

Results for the six month period to 30th September 2005 (unaudited)

Turnover for the period was #555,560 and operating profit increased to #239,125
from #129,413 in the previous six months to 31 March 2005. Administrative
expenses, including costs associated with acquisitions and financing
arrangements, were #322,017 compared to #329,829 during the previous six months
to 31 March 2005. The loss for the six months to 30 September was #197,260
compared to #255,233 over the previous six months to 31st March 2005.

Acquisitions

During the financial year to date, TXO, through its wholly owned US subsidiary
TOGS Energy Inc. (TOGS), has acquired working interests in 64 wells from third
parties, and become operator of those properties. All the wells are located in
the East Texas oilfield. These purchases differ from previous well acquisitions
in that a number of the wells on these leases have recently been producing and
the cost of bringing them back into production will be minimal.

TXO was able to attract an institutional financial partner based in London, for
both of these deals on attractive terms for the Company. This kept our
investment down to a manageable size whilst maximising the future potential from
these deals.

Deal 1

In July 2005, TOGS, in partnership with the financial partner, acquired
interests in 19 wells from Exxon Mobil. The total consideration was $260,000.
This was contributed equally by TOGS and its partner. ($130,000 each for a 50%
share of the interests acquired) After Payout (ie when the initial acquisition
and development costs have been recovered), TOGS interest will increase from 50%
to 70% of the interests acquired.
The company's Net Revenue Interest in the wells varies between 30% and 36%

Deal 2

In November 2005, TOGS, in partnership with the same financial partner acquired
interests in 45 wells from Curado Energy Resources Inc, Midas Oil and Kolt
Resources (Divisions of The X-Change Corporation). The consideration was
$500,000. Reflecting TXO's efforts in sourcing and negotiating the deal on
behalf of the third party joint venture partners, TOGS received a 40% interest
in the acquisition in return for a 25% contribution. The consideration paid by
TOGS for its share was $125,000. The company's Net Revenue Interest in the wells
varies between 10% and 35%

Both these deals were opportunities brought to TOGS by M - C Production under
the terms of The AMI Agreement whereby they must give TOGS first refusal on all
deals upon the same terms that such deals are brought to M - C. M - C has
retained no interest in these transactions and has no involvement in the joint
venture partnership.
The acquisitions now take the total number of wells in which TXO has an interest
to 348 (excluding two abandoned wells).

Exploration

TOGS Energy Inc has shot 2D seismic lines across a 4 mile grid and identified
multiple prospects on its Wendkirk leases in West Texas in which it has a 70%
interest. Costs to date are $50,000. In the light of these results we have
acquired an adjoining interest, known as Bronte, at a cost of $30,000. On these
West Texas prospects we will seek partners to carry out the exploration
programme.

On the Trinity South East prospect, TOGS, in partnership with RAM Energy (the
operator) is awaiting a drilling rig. TOGS Share of drilling costs are budgeted
at $101,000.

Financing arrangements and placing with European investors

The cash flow statements show that the company spent #719,499 in workover costs
and acquisitions. Following the period end, in October 2005, the Company issued
8,000,000 new ordinary shares at 14p per share raising #1.16 million before
expenses by way of a placing, to clients of a continental European broker .
These funds will enable us to expedite the workover programme and to continue
the exploration programme and take advantage of any further acquisition
possibilities that are offered to us by M - C Production under the AMI
Agreement.

Outlook

We have made great progress over the first six months of the year, and have
built on the encouraging results delivered last year. We are confident that,
thanks to our continued investment and our increased workover rate, production
at the year end will be at an all time record .

Robin Baum
Chairman
19 December 2005


Group profit and loss account
for the six months ended 30 September, 2005

6 months ended 6 months ended Year ended
30.09.05 30.09.04 31.03.05
# # #
Turnover 555,560 264,303 613,459
Operating
costs (316,435) (178,664) (398,407)
--------- -------- --------
Gross profit 239,125 85,639 215,052
Administrative
expenses (322,017) (172,825) (502,654)
--------- -------- --------
Operating loss (82,892) (87,186) (287,602)
Interest
receivable 1,197 4,495 7,834
Interest
payable (115,565) (24,680) (82,836)
--------- -------- --------
Loss on
ordinary
activities
before
taxation (197,260) (107,371) (362,604)
Taxation on ordinary activities - - -
--------- -------- --------
Loss for the
period (197,260) (107,371) (362,604)
--------- -------- --------
All amounts derive wholly from continuing activities



Balance sheet
at 30 September, 2005
30.09.05 30.09.04 31.03.05
# # #
Fixed assets
Intangible fixed asset - negative
goodwill (14,189,156) (12,076,391) (13,324,012)
Tangible fixed assets 22,726,344 17,184,554 20,686,500
--------- --------- ---------
Total fixed assets 8,537,188 5,108,163 7,362,488
--------- --------- ---------
Current assets
Debtors 299,593 248,115 420,374
Cash and deposits 107,043 737,478 698,133
--------- --------- ---------
Total current assets 406,636 985,593 1,118,507
--------- --------- ---------

Creditors: Amounts falling due
within one year (469,474) (283,744) (351,866)
--------- --------- ---------
Net current assets /
(liabilities) (62,838) 701,849 766,641
--------- --------- ---------
Total assets less current
liabilities 8,474,350 5,810,012 8,129,117
Creditors: Amounts falling due
after more than one year (2,027,500) (991,685) (1,867,684)
--------- --------- ---------
Total net assets 6,446,850 4,818,327 6,261,445
--------- --------- ---------

Capital and reserves
Called up share capital 4,183,156 3,665,134 4,170,656
Share premium account 4,468,679 3,165,528 4,483,679
Warrant proceeds reserve 56,160 - 56,160
Profit and loss account (2,261,145) (2,012,335) (2,449,050)
--------- --------- ---------
Total equity shareholders' funds 6,446,850 4,818,327 6,261,445
--------- --------- ---------


Group cash flow statement
for the sixmonths ended 30 September, 2005

30.09.05 30.09.04 31.03.05
# # #
Net cash inflow / (outflow) from
operating activities 209,460 (21,554) (383,283)
-------- -------- ---------
Returns on investment and servicing of
finance
Interest received 1,197 4,496 7,834
Interest paid (61,437) (43,208) (77,341)
-------- -------- ---------
Net returns on investment and
servicing of finance (60,240) (38,713) (69,507)
-------- -------- ---------
Capital expenditure
Payments to acquire tangible fixed
assets (719,499) (1,609,298) (2,138,593)
-------- -------- ---------
Net cash outflow before financing (570,279) (1,669,565) (2,591,383)
-------- -------- ---------
Financing
Share capital issues - 1,478,351 1,470,350
Expenses of share issue (2,500) (273,233) (273,233)
(Decrease) / Increase in promissory
note (17,656) 882,106 360,604
(Decrease) / Increase in bond (656) - 1,411,976
-------- -------- ---------
Net financing (20,812) 2,087,224 2,969,697
-------- -------- ---------
Increase in cash (591,091) 417,659 378,314
-------- -------- ---------


Statement of total recognised gains and losses

6 months ended 6 months ended Year ended
30.09.05 30.09.04 31.03.05
# # #
Loss for the
period (197,260) (107,371) (362,604)
Currency
translation
differences 385,179 (29,889) (151,594)
-------- -------- ---------
Total gains /
(losses) in
the period 187,919 (77,483) (514,198)
-------- -------- ---------