(DPL.L) Dominion Petroleum Ltd Buy/Sell

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Justin Dibb, Dominion Petroleum's Acting Chief Executive, commented:

"The first half of the year has seen some very positive operational developments for Dominion. Since then, we have also been successful in attracting new investment. This provides the Company with an improved capital structure, allowing us to focus wholly on the forthcoming drilling campaign. We are very optimistic for the coming 12 months, during which time the Company will be drilling in a highly prospective area with the potential to deliver significant value to its investors."

ENQUIRIES:

Dominion Petroleum Limited Justin Dibb, Acting Chief Executive +44 (0) 207 811 5300 Rob Shepherd, Finance Director

Pelham Public Relations
Archie Berens +44 (0) 207 337 1509

Seymour Pierce Limited
Nandita Sahgal, Christopher Wren +44 (0) 207 107 8000

ABOUT DOMINION PETROLEUM

See www.dominionpetroleum.com
Dominion Petroleum Limited

("Dominion" or "the Company")

Interim Results for 6 months ended 30 June 2009

CHAIRMAN'S & CHIEF EXECUTIVE'S STATEMENT

INTRODUCTION

We are very pleased to report on an excellent first half of 2009 for Dominion, during which period a number of significant developments have occurred. Interpretation of seismic acquired in EA4B in Uganda as well as Block 7 in Tanzania has identified multiple prospects and leads which, in the case of the former, will form the basis for an active drilling campaign over the coming 12 months.

RESULTS (UNAUDITED)

As a pure exploration group, Dominion did not receive any revenues in the six month period ended 30 June 2009 (H108: $nil), although $0.04 million was earned in interest from cash on deposit (H108: $0.01 million).

The loss before tax for the period was $4.3 million (H108: $15.1 million). The loss per share was US cents 0.99 (H108: $3.57).

The Company's cash position at 30 June 2009 was $1.2 million (H108: $20.6 million).

REVIEW OF OPERATIONS

Dominion has identified a portfolio of four prospects, all of which can be drilled from onshore locations using a land rig, as well as 11 leads, which require further seismic.

The largest prospect identified to date has a closure of approximately 48km2, an area comparable to that of the Buffalo- Giraffe discovery in Exploration Area 1 reported to contain around 400 million barrels of recoverable oil. Geochemical analyses of oil samples collected on land in Exploration Area 4B ("EA4B") and on the surface of Lake Edward indicate that the basin contains mature source rocks that have generated petroleum. In light of the seismic interpretation, Dominion is considering an accelerated and more extensive drilling programme.

On 17 June 2009, we received the results of an independent reserves audit of EA4B in Uganda by Energy Resources Consultants Limited ("ERC"), prepared in accordance with the March 2007 SPE/WPC/AAPG/SPEE Petroleum Resources Management System. ERC's estimates are as follows:

Tanzania onshore

On 6 March 2009, Dominion announced that the Mihambia-1 exploration well in Tanzania had to be plugged and abandoned at a total depth of 2,508m. The potential reservoir rocks in the targeted Middle Jurassic Mihambia formation were poorly developed and water-bearing. Oil shows were noted from the deeper Nondwa Formation claystones, a predicted hydrocarbon source rock in the area.

The data from the well will be the subject of a detailed technical analysis. Mihambia-1 is the first of a series of at least four onshore Tanzania exploration wells in which Dominion will participate. A second well is planned in the Mandawa PSA area in 2010. In the Kisangire PSA area, Dominion will participate in two wells to be drilled in the future by partner and operator Heritage. On 18 May 2009, the Minister for Energy and Minerals in Tanzania granted extensions of 18 months to the Initial Exploration Periods for both the Mandawa and Kisangire licences, extending the periods to the end of 2010.

Tanzania offshore

Dominion has concluded the interpretation of around 4,300km of 2D seismic acquired during 2008 over Block 7. This has revealed the presence of a number of leads and prospects in moderate water depths such as would be accessible from a drill-ship or semi-submersible rig. The largest prospect is estimated to contain possible contingent recoverable resources of the order of 1,000 million barrels. Dominion intends to bring a partner into Block 7 and to acquire at least 500km2 of 3D seismic during 2010.

Democratic Republic of Congo

During the period, the Company continued to work with the relevant authorities in Kinshasa to ensure that the Presidential Decree, the final step in the concession award of Block 5 (PSA signed in December 2007), becomes effective.

Management

On 13 March 2009, Michael Garland, the Company's Chief Executive who was instrumental in assembling an impressive portfolio of exploration assets in East and Central Africa, obtaining seed capital and bringing Dominion to market, stepped down from the Board with immediate effect to pursue other interests. Justin Dibb, the Company's Managing Director, assumed the additional role of acting Chief Executive. Together with the executive team that includes Rob Shepherd, Dominion's Finance Director, and Andrew Robinson, Exploration Director, Mr Dibb will continue to manage the Company through an important stage of its development. Mr Garland continues to hold a significant interest in Dominion Petroleum and has also entered into an agreement to provide consultancy services to the Company for a period of 12 months.

CURRENT TRADING AND OUTLOOK

On 6 August 2009, the Minister of Energy and Mineral Development in Uganda granted an extension of two years to July 2011 of the EA4B Exploration Licence. As part of the extension, and in line with the terms of the PSA, the Company has relinquished 50% of the acreage under EA4B, although the retained acreage (1,013km2) covers all of the identified prospects and most of the leads described earlier.

The Company has identified drilling site locations for the first two prospects and is currently carrying out environmental impact assessments in respect thereof, ahead of commencing drilling activities in early 2010.

On 13 August 2009, the Company reached agreement with BlueGold Capital Limited ("BlueGold") to provide it with $10 million in new equity funds (the "Transaction"), as part of which, the Company's existing convertible loan notes have also been restructured.

Whilst the new financing and restructuring is dilutive to existing shareholder interests, the Board strongly believes that it is in the best interests of all stakeholders as it provides the Company with an improved capital structure which will enable focus to be wholly on the coming drilling campaign.

As part of our fund-raising strategy for 2010 and beyond, the Company has initiated a farm-out process of EA4B. Whilst discussions are ongoing, we have been encouraged by the strong interest shown from quality companies keen to join Dominion in the next phase of its growth.

In summary, we are very optimistic about the coming 12 months, during which time the Company will be drilling in a highly prospective area with the potential to deliver significant value to its investors.

Roger Cagle Justin Dibb
Chairman Chief Executive

Consolidated Income Statement

for the six months ended 30 June 2009

Unaudited Unaudited Audited
six months six months twelve months
to 30 June 2009 to 30 June 2008 to 31 December 2008
Notes $'000 $'000 $'000

Administrative expenses
Share based payments (660) (1,498) (3,193)
Litigation costs - (8,338) (7,738)
Other administrative expenses (3,468) (5,174) (9,038)
Total administrative expenses (4,128) (15,010) (19,969)
Loss from operations (4,128) (15,010) (19,969)

Finance costs (251) (56) (723)
Finance income 40 10 25
Loss before taxation (4,339) (15,056) (20,667)
Income tax expense - - (96)
Loss for the period (4,339) (15,056) (20,763)

Foreign exchange on - - (116)

retranslation of foreign operations
Total comprehensive income for (4,339) (15,056) (20,879)

the period/year
Total comprehensive income (4,303) (15,041) (20,828)
attributable to: (36) (15) (51)

Owners of the parent Non-controlling interest
(4,339) (15,056) (20,879)
Loss per share attributable to 3 (0.99) (3.57) (4.85)

equity holders of the parent Basic and diluted (US cent)

All amounts related to continuing activities. Consolidated Balance Sheet

At 30 June 2009

Unaudited Unaudited Audited
30 June 2009 30 June 2008 31 December 2008
Notes $'000 $'000 $'000

Non - current assets
Property, plant and equipment 569 785 665
Other intangible assets 4 61,850 45,725 55,503
62,419 46,510 56,168

Other receivables 1,212 1,163 3,647
Cash and cash equivalents 1,204 20,617 4,497
2,416 21,780 8,144
TOTAL ASSETS 64,835 68,290 64,312

Equity attributable to equity holders of the parent
Share capital 17 17 17
Convertible debt option 16,884 16,884 16,884

reserve
Share premium 22,590 18,898 22,590
Share based payments and 21,174 18,831 20,514

warrants reserve
Currency translation reserve (139) (23) (139)
Retained earnings (55,254) (45,280) (50,951)
Equity attributable to equity 5,272 9,327 8,915

holders of the parent
Minority interest (96) (24) (60)
Total Equity 5,176 9,303 8,855

Convertible loan notes - 46,378 -
Deferred tax - - -
- 46,378 -

Convertible loan notes 5 55,949 50,049
Trade and other payables 3,647 6,199 5,345
Provisions - 6,364 -
Current tax payable 63 46 63
59,659 12,609 55,457
TOTAL LIABILITIES 59,659 58,987 55,457
TOTAL EQUITY AND LIABILITIES 64,835 68,290 64,312
Consolidated Cash Flow Statement

for the six months to 30 June 2009
Unaudited Unaudited Audited
six months six months twelve months
to 30 June 2009 to 30 June 2008 to 31 December 2008
$'000 $'000 $'000

Loss for the period/year (4,339) (15,056) (20,763)
Decrease/(Increase) in other 1,215 (478) (1,744)

receivables
(Decrease)/Increase in other 533 (319) (645)

payables
(Decrease)/Increase in - 6,364 -

provisions
Income tax expense - - 96
Foreign exchange movement (140) - (37)
Depreciation 95 76 201
Loss on disposal of property, - - 92

plant and equipment
Share based payment expense 660 2,127 4,009
Finance income (40) (10) (25)
CASH USED IN OPERATIONS (2,016) (7,296) (18,816)
Income taxes paid - - (66)
NET CASH FROM OPERATING (2,016) (7,296) (18,882)

Interest received 40 10 25
Oil and gas exploration (2,678) (11,423) (20,728)

expenditure
Reimbursement of past 1,220 - 4,342

exploration costs
Acquisition of property, plant 1 (392) (488)

and equipment
CASH USED IN INVESTING (1,417) (11,805) (16,849)

Convertible loan notes issued - - -
Issue of ordinary share - - 800

capital
Payment made for forfeiture of - - (199)

options

(Decrease)/Increase in cash (3,433) (19,101) (35,130)

and cash equivalents
Cash and cash equivalents at 4,497 39,718 39,718

beginning of period/year
Exchange gains/losses on cash 140 - (91)

and cash equivalents
CASH AND CASH EQUIVALENTS AT 1,204 20,617 4,497

Consolidated Statement of Changes in Equity

for the six months ended 30 June 2009

Equity
Convertible Share attributable
debt based Currency to equity
Share option Share payment translation Retained holders of Minority Total
capital reserve premium reserve reserve earnings the parent interests equity
$'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000 $'000
At 1 January 2009 17 16,884 22,590 20,514 (139) (50,951) 8,915 (60) 8,855
Total comprehensive income for - - - - - (4,303) (4,303) (36) (4,339)

the period
Share based payments - - - 660 - - 660 - 660
Equity portion of convertible - - - - - - -

loan note
At 30 June 2009 17 16,884 22,590 21,174 (139) (55,254) 5,272 (96) 5,176
At 1 January 2008 17 16,884 16,026 16,704 (23) (30,239) 19,369 (9) 19,360
Total comprehensive income for - - - - - (15,041) (15,041) (15) (15,056)

the period
Issue of share capital (net of - - 2,872 - - - 2,872 - 2,872

issue costs)
Share based payments - - - 2,127 - - 2,127 - 2,127
Equity portion of convertible - - - - - - -

loan note
At 30 June 2008 17 16,884 18,898 18,831 (23) (45,280) 9,327 (24) 9,303
At 1 January 2008 17 16,884 16,026 16,704 (23) (30,239) 19,369 (9) 19,360
Total comprehensive income for - - - - (116) (20,712) (20,828) (51) (20,879)

the period
Issue of share capital (net of - - 6,564 - - - 6,564 - 6,564

issue costs)
Transfer in respect of - - - - - - - - -

warrants issued
Share based payments - - - 4,009 - - 4,009 - 4,009
Equity portion of convertible - - - - - - -

loan note
At 30 June 2008 17 16,884 22,590 20,514 (139) (50,951) 8,915 (60) 8,855

Notes to the Consolidated Financial Information

for the six months to 30 June 2009

1. Accounting policies and presentation of financial information

This half year report was approved by the Directors on 29 September 2009. The condensed half year financial statements have been prepared using policies based on International Financial Reporting Standards (IFRS and IFRIC interpretations) issued by the International Accounting Standards Board (IASB) as adopted for use in the EU. The condensed half year financial information has been prepared using the accounting policies which will be applied in the Group's statutory financial statements for the year ended 31 December 2009. This results in the adoption of the revision to IAS 1; this revision prohibits the presentation of items of income and expenses (that is, "non-owner changes in equity") in the statement of changes in equity, requiring non-owner changes in equity to be presented separately from owner changes in equity. All non-owner changes in equity will be required to be shown in a performance statement. This revision has been applied throughout these half year financial statements.

Going concern

The Group currently has insufficient working capital to fund its planned work programme for the next 12 months and hence further funds will need to be raised. The announcement regarding the financing with BlueGold to raise $10 million (as described in the Chairman's Statement), which includes certain amendments to the existing convertible loan notes, should provide sufficient financing to meet the needs of the Group into the first quarter of 2010.

Consequently, the Group requires further working capital to fund the work programme commitments for the remainder of 2010 and beyond. This is a material uncertainty that may cast significant doubt upon the Group's and Company's ability to continue as a going concern.

The Group has been discussing a proposed farm out of certain licence interests and has received extremely positive preliminary feedback from the companies with whom the Group has been in discussion.

This gives the Directors confidence that additional financial resources will be procured when required, although there can be no certainty of this. Should a farm out not be concluded other sources of finance will be required. To that end, the Group has been meeting with prospective investors recently and has received extremely positive preliminary feedback with regards to a potential future fundraising.

Consequently, after considering the matters described above, the Directors have a reasonable expectation that the Group and the Company will have adequate resources to continue in operational existence for the foreseeable future. For these reasons they continue to adopt the going concern basis in preparing the half year report.

2. Financial Reporting Period

The condensed half year financial information for the period 1 January 2009 to 30 June 2009 is unaudited. In the opinion of the Directors the condensed half year financial information for the period presents fairly the financial position, results from operations and cash flows for the period, and are in conformity with generally accepted accounting principles which have been consistently applied. The accounts incorporate unaudited comparative figures for the interim period from 1 January 2008 to 30 June 2008 and the audited financial year to 31 December 2008.

The comparatives for the full year ended 31 December 2008 are not the Company's full statutory accounts for that year. A copy of the statutory accounts for that year are available on request. The auditors' report on those accounts was unqualified but did contain an emphasis of matter statement in respect of going concern.

3. Loss per share
Unaudited Unaudited Audited
six months to six months to twelve months
30 June 30 June to 31 December

Loss per share
Basic and diluted (US cent) (0.99) (3.57) (4.85)

Loss Loss for the purpose of basic and diluted
earnings per share (net loss (4,303) (15,041) (20,712)

for the year)

Number of shares Weighted number of Ordinary
Shares for the purposes of 436,656,438 421,800,216 427,332,738

basic and diluted earnings per share

4. Other Intangible assets

Other intangible assets relate to deferred exploration costs. The increase of $6.3 million relates primarily to capitalised finance costs.

The Mihambia-1 exploration well was drilled in the Mandawa PSA during the first quarter. This well was fully carried by Maurel et Prom S.A. as part of the farm-out of the Mandawa licence. On 6 March 2009, Dominion announced that the well had been plugged and abandoned at a total depth of 2,508m, having encountered poorly developed reservoir rock. Evaluation of the Mihambia well results is currently under way.

In Uganda, preparations are under way for the drilling programme in EA4B to commence in the first quarter of 2010.

5. Convertible Loan Notes

Details of movements on convertible loan notes is given below:

$'000
Balance brought forward 50,049
Interest and accretion charge in the period 5,790
Cost of finance 110
Balance at 30 June 2009 55,949
6. Post Balance Sheet Events

On 6 August 2009, the Minister of Energy and Mineral Development in Uganda granted an extension of two years to July 2011 of the EA4B Exploration Licence.

On 13 August 2009, the Company reached agreement with BlueGold for the provision of $10 million in new equity funds, as part of which the existing convertible loan notes have been restructured.

This information is provided by RNS The company news service from the London Stock Exchange

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