Press Release - News
Trading Update

28 February 2011

Offshore Hydrocarbon Mapping plc (AIM: OHM) is pleased to provide the following trading update to coincide with the six months ended 28 February 2011 and the Company’s Annual General Meeting to be held at 11.00am this morning.

Shareholders will be asked at today’s AGM to approve a change of name from Offshore Hydrocarbon Mapping plc to Rock Solid Images plc. This renaming of the Company and rebranding to “RSI” is expected to help remove market confusion about what we do and clearly define the Company going forward.

Financial update:

The Group’s half year ended on 28 February 2011 and during the period the Group disposed of the marine CSEM acquisition business on 2 November 2010.

The disposed of business made aggregate losses before tax of approximately £1.45 million in the two month period before the disposal. These losses will be treated as discontinued operations in the consolidated accounts to 31 August 2011 and were allowed for in the impairment provisions made by the Directors in the consolidated accounts to 31 August 2010. The following financial analysis therefore excludes the impact of the disposed business in the current and comparative periods.

Revenues for each of its operating divisions in the six months to 28 February 2011 are expected to be as follows:

  • Seismic characterisation revenues are expected to be approximately £1.3 million (six months to 28 February 2010: £1.3 million) and are in-line with our budget for the first six months.
  • The WISE seismic/CSEM integrated product line will achieve revenues of approximately £0.5 million (six months to 28 February 2010: £0.4 million).

In aggregate, the Group’s revenues are expected to be approximately £1.8 million for the six months to 28 February 2011 compared to £1.7 million (as adjusted for discontinued operations) for the six months to 28 February 2010.

The Group continues to carry a corporate overhead, which is currently disproportionately high compared to the contribution from its trading activities, which the Directors estimate will result in a pre-tax loss in the £1.2 to £1.5 million range being reported for the six months to 28 February 2011. This compares with a £1.2 million pre-tax loss (as adjusted for discontinued operations) for the same period last year. Though fixed costs remain disproportionately high, we are in a growth phase and are confident of our ability to manage these expenses over time.

The Group’s cash balance at 28 February 2011 was £1.7 million, compared to £3.4 million at 31 August 2010.

The results for the six months to 28 February 2011 are anticipated to be published on 19 April 2011.

Current trading and prospects:

Since 4 February 2011, when the Company reported its results for the 12 months ending 31 August 2010, it has continued to move forward with developing its business.

Following the divestment of the marine acquisition group in November of 2010, management has been free to concentrate fully on developing our consulting business, and we have made substantial progress in a number of areas.
It is convenient to divide our market into the traditional “wells and seismic” (WSS) business of the original Rock Solid Images, and the emerging WISE business which involves the interpretation and integration of CSEM and/or MT data with seismic.

We have invested in both business segments through the purchase of additional software, and the initiation of an important software development project in partnership with Interaction for building a new front-end CSEM processing system (announced 27 January 2011). We have seen some early return on these investments: our new earth modelling system is up and running and available to our processing & interpretation group, and has radically improved our ability to integrate and interpret seismic, CSEM and well data within a common framework.

Recent appointments into key leadership positions within the management team have strengthened our Company. We continue to recruit into several areas of our business, including sales, processing and R&D.

Revenues have been growing month on month, in line with our budget. Though fixed costs remain disproportionately high, we are in a growth phase and are confident of our ability to manage these expenses over time.

Stated Chief Executive Officer, Richard Cooper:

” We are very pleased with the progress made to date in transitioning the Company from one focussed on marine acquisition to one exclusively focussed on high end geophysical consulting. We have made excellent progress over the last four months, since the disposal on 2 November, in bedding down and setting the agenda for the new organisation. This progress, together with the renaming of the Company to Rock Solid Images means we can look forward to the second half of the year with considerable optimism and enthusiasm.”

CONTACTS:

Offshore Hydrocarbon Mapping plc
www.rocksolidimages.com

Richard Cooper – Chief Executive Officer
+44 (0) 870 429 6581

Bob Auckland - Finance Director
+44 (0) 870 429 6581

Peter Reilly – Non Exec Chairman
+44 (0) 7881 920542

Peel Hunt LLP (NOMAD and Broker)

Julian Blunt / Simon Brown
+44 (0) 20 7418 8900