Rocksource ASA – Q3 2009 financial results

Rocksource ASA had operating revenue of NOK 34.1 million in the third quarter 2009, an increase of NOK 11.5 million from previous quarter and a decrease of NOK 45.8 million compared to the corresponding quarter 2008. The change was primarily driven by the sharp drop in gas prices and declining production from the company’s activities onshore US, offset by revenue from sales to license partners.

Exploration costs totalled NOK 92 million in the quarter, an increase of NOK 38.6 million from the previous quarter and up from NOK 45.5 million in the third quarter of 2008. The exploration costs in the quarter were mainly driven by NCS activity including completion of acquisition of 3D seismic on PL 535 and PL 451, and EM data on PL 480 and PL 515. In addition, previously capitalised costs of NOK 36.2 million on the Granbury field in the US were expensed as exploration costs in the quarter. Total exploration costs in third quarter, including internal costs, were NOK 96.1 million.

EBITDA, adjusted for the exploration costs from the US Granbury field, was negative with NOK 42.7 million in the quarter. Operating income in the quarter covered G&A costs.

Net financial expenses were NOK 22 million in the quarter, negatively influenced by currency loss due to weakening of the USD/NOK rate. Income tax in third quarter was NOK 57.7 million.

The cash balance at the end of the third quarter was NOK 161.6 million compared to NOK 265 million in the previous quarter. The reduction in the cash balance is due to significant investments of NOK 49.4 million and high exploration costs with a cash effect of NOK 54 million.

Preparations are ongoing ahead of the company’s extensive drill queue, expected to embark in the first half of 2010. Currently, Rocksource expects to participate in between two to five wells in 2010 and up to another six wells in 2011. The upcoming 2010-2011 drilling campaign is aiming to test approximately 200 million barrels of oil equivalents per year.

Please find the Q3 presentation here: http://www.rocksource.com/presentations/category157.html
The financial report can be found here: http://www.rocksource.com/financial-reports/category159.html
Please follow this link for a corresponding press release: http://www.rocksource.com/press-releases/category166.html

Oslo, 12.11.2009
Rocksource ASA

Trygve Pedersen
CEO

+47 90 09 77 41