(UEP) UMC Energy

UMC ENERGY PLC

Condensed consolidated interim financial statements

for the half-year ended 30 June 2011

CHAIRMAN'S STATEMENT

For the six months period ended 30 June 2011

Madagascar is continuing to experience a period of political upheaval and uncertainty.  Although the Company has not, in any way, been negatively affected by these events, it has resolved to take a cautious approach to exploration and accordingly has not conducted exploration activities during the first-half of the current financial year and does not expect to undertake any material exploration activities in Madagascar whilst this period of uncertainty prevails.  Given these circumstances, the Directors have resolved that it is not appropriate to capitalise any further expenditure on the intangible asset until circumstances change.

In September 2011, the Company exercised an option to acquire two off-shore Petroleum Prospecting Licences, nos 374 and 375, and one on-shore Petroleum Prospecting Licence, no 378, located in Papua New Guinea. The consideration payable upon exercise of the option is the issue by the Company of 240 million fully paid up new ordinary shares in the capital of the Company. Following allotment, the Company will have 484,444,763 ordinary shares in issue.

The Company has retained consulting petroleum engineers to further examine and report on the presently available published geological data on the underlying areas of these licences. The Company will, upon receipt of the petroleum consultants' reports on past exploration carried out on the licence areas, decide on the most appropriate development options, including the possibility of seeking farm-in partners.

C Kyriakou

Chairman

UMC ENERGY PLC

 CONDENSED CONSOLIDATED INTERIM INCOME STATEMENT

For the six months period ended 30 June 2011

The Group has no recognised gains or losses other than the results for the period as set out above.

UMC ENERGY PLC

 CONDENSED CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

For the six months period ended 30 June 2011

UMC ENERGY PLC

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 30 June 2011

UMC ENERGY PLC

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the six months period 30 June 2011

UMC ENERGY PLC

CONDENSED CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

for the six months period 30 June 2011

UMC ENERGY PLC            

       NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

For the six months period ended 30 June 2011

1.    General information

UMC Energy Plc is a company incorporated in England and Wales under the Companies Act 1985.  The Company's registered office is 11 Albemarle Street, London, W1S 4HH.

The principal activity of the Group is the investment in and exploration and development of energy related mining and extraction projects, specifically in a petroleum exploration project in Papua New Guinea and an uranium exploration project in Madagascar.

The Group's principal activity is carried out in US dollars.  The interim results are presented in pounds sterling as this is the currency of the country (the UK) where the Company is incorporated and its ordinary shares admitted for trading.

2.    Statement of compliance

     The condensed consolidated interim financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting".

The condensed consolidated interim financial statements do not include all of the information required for full annual financial statements, and should be read in conjunction with the consolidated annual financial statements of the Group as at and for the year ended 31 December 2010.

The annual financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union.

These condensed consolidated interim financial statements were approved by the Board of Directors on 28 September 2011.

3.    Significant accounting policies

The accounting policies applied by the Group in these condensed consolidated financial statements are the same as those applied by the Group in its consolidated financial statements as at and for the year ended 31 December 2010.

       Going Concern

       The interim results have been prepared on a going concern basis, which contemplates continuity of normal business activities and the realisation of assets and settlement of liabilities in the ordinary course of business.

       The directors believe that it is appropriate to prepare the financial report on a going concern basis as they are confident that the Company will be able to raise additional funds through debt or equity raisings when required.  The directors are of the opinion that the proposed debt or equity raising measures and the existing cash resources will provide sufficient funds to enable the Company to continue its operations for at least the next twelve months.

4.   Segmental analysis

The Group has one reportable segment which is that of the investment directly and indirectly in, and operation of, mining exploration and development projects.  The Group's operational activities are wholly focused in Madagascar. The Company's registered office is in London, UK. The Board of Directors review internal management reports at least monthly.

The Group has not yet commenced commercial mining production and has no turnover in the year.

Information regarding the results of the reportable segments is shown below.  Performance is measured based on the segment profit before income tax as included in the internal management reports that are reviewed by the Board of Directors.  There is no inter- segment pricing.

Information about reportable segments:

Geographical segments

The segment is managed on a worldwide basis.  Individual assets are located in various countries. In presenting information on the basis of geographical segments, segments assets are based on the geographical location of the assets.

Non-current assets by geographical area

5.      Taxation

No provision for corporation tax has been provided for, due to losses incurred in the current and previous periods.

6.      Loss per share

Loss per share has been calculated by dividing the loss for the period after taxation attributable to the equity holders of the parent company of £439,386 (30 June 2010: £731,913) by the weighted average number of shares in issue at the period end of 244,444,763 (30 June 2010: 244,444,763).

Diluted loss per share has been calculated using the weighted average number of shares in issue at the period end, diluted for the effect of share options and warrants in existence at the period end of 245,136,237 (30 June 2010: 246,036,237).               

7.     Intangible assets

The development expenditure relates to development of the uranium exploration project in the Morondava basin of Madagascar.

The licences relate to uranium exploration licences in the Morondava basin of Madagascar.

The project has yet to reach a stage of development where a determination of the technical feasibility or commercial viability can be assessed.  In addition, as Madagascar is presently experiencing a period of political upheaval and uncertainty, the Company has resolved to take a cautious approach to exploration and accordingly has not conducted exploration activities during the first-half of the current financial year and does not expect to undertake any material exploration activities in Madagascar whilst this period of uncertainty prevails. In these circumstances, whether there is any indication that the asset has been impaired is a matter of judgement, as is the determination of the quantum of any required impairment adjustment.  The directors have resolved that it is not appropriate to capitalise any further expenditure on the intangible asset until circumstances change.  In the six months to 30 June 2010, the directors had concluded that an impairment adjustment of £655,000 was required.

8.       Post balance sheet events

Since 1 July 2011, the Company has advanced a further US$30,007 to Uramad SA.

Since 1 July 2011, the Company has borrowed a further A$225,293 from Natasa Mining Ltd, for working capital.

     The Company exercised an option to acquire a 100% interest in two off-shore and one on-shore Petroleum Prospecting Licences in Papua New Guinea.  The consideration payable upon exercise of the option is the issue by the Company of 240 million fully paid ordinary shares in the capital of the Company.