Niche Group (The)

Embargoed: 0700hrs, 27 March 2012

The Niche Group (Berlin: NZG.BEnews) plc

(“Niche” or the “Company”)

Interim Results for the Six Months Ended 31 December 2011

Niche, the oil and gas focused investment company, announces interim results for the six months ended 31 December 2011.

Chairman’s Statement

The first half of the financial year has been a period of significant progress on the corporate front. Shortly before the period-end Niche announced that it had entered into discussions to acquire the entire issued share capital of Oman Resources Limited (“Oman”), a company to whom Niche has extended convertible loans of £18.61 million to fund development of a portfolio of onshore petroleum licence interests in Turkey. Discussions with Oman Resources and its partner and licence operator Arar Petrol ve Gaz AUPAS (“Arar”) have been thorough and complex as we aim to simplify the corporate structure and establish a platform to generate substantial value from the attractive Turkish energy market.

Yesterday we were pleased to update shareholders with respect to the potential acquisition of Oman, which is progressing well, and announced that Niche has agreed non-binding commercial terms with Arar under which either Niche or Oman would acquire Arar’s 50% interest in the four petroleum licence blocks held in partnership with Oman, ultimately delivering Niche 100% ownership of the four licence blocks (the “Blocks”). Three of the Blocks are situated in the Iskenderun Basin, close to the Eastern Mediterranean Sea, whilst the fourth is situated in the Tuz Golu Basin in the Konya region. The Blocks contain multiple gas discoveries, some of which have near term production potential. Senergy (GB) Ltd carried out independent evaluations for Niche of recoverable hydrocarbons across the Blocks in June and October 2011 which identified gas reserves and contingent and prospective resources.

Niche, Oman and Arar are working together to conclude the transaction as soon as practicable and each of the parties has instructed solicitors to prepare the associated documentation, which is likely to comprise, inter alia, a reverse takeover under the AIM Rules for Companies and the placement of equity to raise new capital.

The Directors anticipate that the Company’s shares, which were suspended from trading on 13 December 2011, will be restored to trading following the publication of an Admission Document once the proposed transaction and associated fund raising have been conditionally agreed.

Financial Review

During the six months ended 31 December 2011, Niche continued to operate as an investing company whose two principal assets are a convertible loan instrument to Oman of £18.61 million (“Convertible Loan”) and a 5% shareholding in Arar.

As an Investing Company Niche has no revenues at present. The Company made a loss for the period of £677,000 (H1 2010: loss of £44,000). £278,000 of this is attributable to a share based payment expense brought forward from the prior period and a number of exceptional costs in the first half in respect of the above mentioned Competent Person’s Report into the reserves and contingent and prospective resources net to Oman as well as professional fees incurred substantially in relation to the proposed acquisition of Oman. The Company had cash and cash equivalents at 31 December 2011 of £1,192,000 (31 December 2010 £128,000).

Whilst Niche’s Convertible Loan to Oman of £18.61 million was due and payable by Oman on 30 December 2011 and remains unpaid, we now are in advanced discussions to acquire the entire issued share capital of Oman, therefore the Directors of the Company believe it appropriate not to provide for impairment against the Convertible Loan.


Niche is making strides towards its goal of becoming a Turkey-focused oil and gas exploration and production company. I believe we have an opportunity to create significant value from a transaction which, if completed, would deliver Niche 100% ownership of four attractive petroleum licences onshore Turkey. Through our relationship with Arar, one of Turkey’s most established operators, we are uniquely placed to achieve that. As a fellow shareholder I am excited about the opportunity ahead.

Stuart Thomas

Executive Chairman

27 March 2012


The Niche Group plc

Stuart Thomas

Tel. +44 (0)1491 629609

Daniel Stewart mp; Co. Plc – Nominated Adviser and Joint Broker

Paul Shackleton or Emma Earl

Tel. +44 (0)20 7776 6550

M: Communications

Ben Simons

Tel. +44 (0)20 7920 2340

Income Statement

For the six months ended 31 December 2011

All operating income and operating gains and losses relate to continuing activities.

Statement of Comprehensive Income

Statement of Financial Position

As at 31 December 2011

Statement of Cash flows

For the six months ended 31 December 2011

Reconciliation of operating loss to net cash flows from operating activities

Statement of Changes in Equity

For the six months ended 31 December 2011

For the six months ended 31 December 2010

For the year ended 30 June 2011

Notes to the Interim Results

For the six months ended 31 December 2011


Basis of preparation

The financial information for the six months ended 31 December 2011 and 31 December 2010 contained in this interim report is unreviewed and unaudited and does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The comparative financial information for the full year ended 30 June 2011 has, however, been derived from the statutory financial statements for that period. The statutory accounts for the year ended 30 June 2011 have been filed with the Registrar of Companies. The auditor’s report on those accounts was unqualified but contained an Emphasis of Matter paragraph concerning the valuation of investments and the ability of Oman Resources to repay the loans by the due date.

The Emphasis of Matter paragraph stated ”The loans receivable from Oman Resources of £18,610,000 have a maturity date of 30 December 2011. Should Oman Resources not meet the repayment terms, under the default provisions of the loan, the Company will exercise its securities allowing it to assume complete control of Oman Resources and its 50% interest in the joint venture with Arar. The realisation of the carrying value of that investment, and that of the Company’s direct investment in Arar of £8,000,000, is dependent on the successful discovery and development of oil and gas reserves, including the ability of the Company and Arar to raise sufficient funds to develop such reserves. Based on the information available to them and in contemplation of the proposed transaction, the Directors consider that the carrying amount of these assets is fully recoverable. These conditions, along with other matters explained in the financial statements, indicate the existence of a material uncertainty which may cast doubt on the carrying value of these assets. The financial statement do not include any adjustments relating to these uncertainties and the ultimate outcome cannot at present be determined.”

The financial statements are presented in Sterling and all values are rounded to the nearest thousand pounds (£’000), except when otherwise indicated.

The financial information contained in this interim report has been prepared on the basis of accounting policies consistent with International Financial Reporting Standards (“IFRS”). The financial information has been prepared in accordance with the accounting policies as set out in the statutory accounts for the year ended 30 June 2011 as amended for the requirements of IAS1 (Revised) Presentation of Financial Statements.


Loss per share

The loss per share for the six months ended 31 December 2011 has been calculated on the basis of the loss after taxation for the period of £677,000 (6 months to 31 December 2010: £44,000 loss; year ended 30 June 2011: £774,000 loss) and the weighted average number of shares in issue during the period of 691,550,530 (6 months to 31 December 2010: 288,765,603; year ended 30 June 2011: 417,678,740).


Copies of this Interim report for the six months ended 31 December 2011 will be available at the registered office of the Company, Aston House, Cornwall Avenue, London N3 1LF and on the Company’s website


The directors do not propose to pay a dividend for the period.

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