Agriterra Ld Regulatory News (AGTA)

25 Mar 2008 10:01

White Nile Limited25 March 2008 White Nile Ltd / Ticker: WNL / Index: AIM / Sector: Oil & Gas 25th March 2008 White Nile Ltd ('White Nile' or 'the Company') Interim Results White Nile Ltd, the AIM listed oil and gas exploration company, announces itsresults for six months ended 31 December 2007. Chairman's Statement This has been another period of both advancement and frustration as we continueto build on our stated objective of becoming a leading independent oil producerfocused on Southern Sudan and the surrounding region. As investors will know, our first acquisition involved the signing of anagreement with the Government of Southern Sudan ("GOSS") to develop the 67,000sq km Block Ba in Southern Sudan. Our second was the acquisition of ourEthiopian concession areas where, following extensive evaluation under a JointStudy Agreement, we signed a Production Sharing Agreement ("PSA") with theGovernment of Ethiopia in January 2008 for a 29,000 sq km block in the SouthernRift Basin in south-western part of the country. In line with our expansion strategy, I am now pleased to announce that we aretaking a 49% stake in CAMEC Kenya, a Kenyan subsidiary of Central African Miningand Exploration Company Plc in return for funding 49% of the past and futurecosts. CAMEC Kenya has a Production Sharing Contract ("PSC") with the Governmentof Kenya to explore and develop the hydrocarbon potential of Block 11, a 25,000sq km block located in north west Kenya, which immediately abuts the SouthernSudan border and is contiguous to our PSA area in Ethiopia. With interests in Southern Sudan, Ethiopia and now Kenya, we are advancing ourstrategy, gaining exposure across the region and de-risking our operations byexpanding our geographical area. We are actively looking at and evaluatingadditional opportunities that we believe have the ability to further increaseour regional presence and build value for our shareholders. Southern Sudan We remain frustrated by the lack of clarification being received from theauthorities in Southern Sudan. We believe that we have demonstrated ourcommitment to the country through our investment and development work targetedat proving the hydrocarbon potential of Block Ba. We completed the first phaseof exploration work, including high-density 2D seismic acquisition andinterpretation, to gain a clearer understanding of the prospectivity of theJonglei sub-basin of the Muglad Basin. Following target identification, wecommenced drilling the Kedelai exploration well, to determine the hydrocarbonbearing potential of the south-eastern extension of the Muglad basin and inparticular to evaluate reservoir objectives in the Aradeiba and Bentiuformations. With this investment, in tandem with the implementation ofsignificant community development programmes, our objectives and commitmentremain very clear. As reported in the final results, we have had numerous assurances from leadingSouthern Sudanese government figures that our interests will be protected, withthe likelihood being that we would be included in a consortium that will developBlock B in Southern Sudan, including Block Ba, Block Bb and Block Bc. Adelegation of Southern Sudanese government officials, headed by His Excellencythe Vice President of the Government of Southern Sudan, Dr Riek Machar, met theBoard, its nominated adviser and certain shareholders in London in September2007, and reiterated that White Nile would receive a 22.5% interest in theenlarged Block B. More recent indications are that White Nile will receive amajority stake in a new company that will control the 22.5% stake in theaforementioned consortium in tandem with Nile Petroleum Corporation Limited.However, this has not progressed to date and, without clarity of title, whilemaintaining a presence in Juba and our camps on the oil block, our operationsremain temporarily suspended until the Board receives full clarification of itsposition within Southern Sudan. It has also become apparent that White Nile is part of a bigger economic andpolitical picture that is being played out in Sudan. The allocation of oilassets, the re-drawing of Block entitlements, the establishment of oil industryinfrastructure and relations between the north and south are all affecting thedecision process. Indeed, the south has 85% of the oil reserves in Sudan and theright to secede in 2011, which again seems to be impacting the way in which oilcompanies is the country are being allowed to operate. However, we remaincommitted to the development of oil in South Sudan and we are ready to re-startfull operations as soon as we receive clarity. Ethiopia We have signed a PSA with the Government of Ethiopia for a 29,000 sq km block inthe Southern Rift Basin in south-western Ethiopia, and were awarded sole rightsfor the exploration, development and production of petroleum in the contractarea in return for satisfying various development commitments. The PSA followsa two year Joint Study Agreement ("JSA") with the Ethiopian Government'sPetroleum Operations Department of the Ministry of Mines over the prospectiveEast African rift system in the southwest of the country. Geophysical and geological work, primarily in the Omo River area to the north ofLake Turkana, confirmed the presence of deep potential hydrocarbon bearingsedimentary basins within the JSA area. The prognosis by the Company and itsadvisors is that the contract area is sited at an intersection between asouth-eastern extension of the petroliferous Cretaceous and early Tertiarybasins of Southern Sudan, in particular the Muglad rift system and the youngerEast African rift system, which is proving petroliferous in Uganda ashighlighted by Tullow Oil Plc's recent progress. Under the PSA, the Government of Ethiopia has granted the sole right to WhiteNile to explore, develop and produce petroleum in the contract area. There is aninitial Exploration Period of four years from the date of execution, and aDevelopment Period and Production Period of 25 years from the date of adoptionof the development plan. During the initial Exploration Period, White Nile isrequired to incur minimum expenditure of $6,000,000 for seismic operations and$8,000,000 for drilling operations. White Nile plans to begin seismic operationsin Q4 2008, prior to which it will conduct extensive geological field work andpreparation for the geophysical programme. Kenya Our 49% interest in CAMEC Kenya will further increase our regional exposure.CAMEC Kenya has a PSA with the Government of Kenya to explore and develop thehydrocarbon potential of Block 11, a 25,000 sq km block located in north westKenya. Block 11 lies between Lake Turkana and the international borders with Sudan inthe north west, Uganda in the west and Ethiopia in the north. It straddles theso-called Turkana Depression and includes the sedimentary basins of Gatome andLotikipi. The Turkana Depression is a zone of interaction between three riftsystems: 1. the NW-SE Cretaceous rift system, which links the productive Muglad Basin of Sudan with the Anza Graben of Kenya 2. the NNW-SSE Paleogene rift system of Western Turkana, which is thought to link with the petroliferous Melut Basin of Sudan 3. the NNE-SSW Oligo-Miocene Turkana Rift of Northern Kenya/Southern Ethiopia, which is analogous to the Albert rift of Uganda where commercial oil has recently been discovered Results White Nile remains focussed on the development of its oil concessions inSouthern Sudan and the surrounding region. The Company is still in theexploration stage and therefore is not producing revenue. As such, the Companyis reporting a pre-tax loss of £799K (2006: £699K). Outlook We are focussed on expanding our reach and exploration portfolio and willcontinue to evaluate opportunities in Africa in order to add value for ourshareholders. Our participation in CAMEC Kenya marks a further step in thisstrategy of building a regional oil company with high quality assets in excitingpetroliferous regions. Not only does it give us exposure to north west Kenyabut also complements our land positions in Ethiopia and Southern Sudan. Weremain frustrated with the situation in Southern Sudan but are confident of ourposition and entitlements. In the coming year we anticipate the implementationof seismic programmes first in Kenya and subsequently in Ethiopia. I would like to take this opportunity to thank the management team, shareholdersand all those involved in the Company who have supported and assisted in itsdevelopment and look forward to updating the market on our progress. Phil Edmonds Chairman Unaudited Income Statement for the six months ended 31 December 2007 Six Six months months ended ended Year 31.12.07 31.12.06 ended 30.06.07 £000 £000 £000 Operating expenses (1,144) (796) (1,663)Operating loss (1,144) (796) (1,663) Financial income 346 101 245Financial expenses (1) (4) (6)Net financing income 345 97 239 Loss before tax (799) (699) (1,424) Income tax expense - - -Loss for the period (799) (699) (1,424) Basic and diluted earnings per share (pence) (0.230) (0.219) (0.439) Unaudited Statement of Recognised Income and Expense for the six months ended 31 December 2007 Six Six months months ended ended Year 31.12.06 31.12.06 ended 30.06.07 £000 £000 £000 Loss for the period (799) (699) (1,424) Total recognised income and expense for the period (799) (699) (1,424) Unaudited Balance Sheet as at 31 December 2007 31.12.07 31.12.06 30.06.07 £000 £000 £000Assets Property, plant and equipment 1,122 728 1,224 Intangible assets 35,725 20,454 30,414Total non-current assets 36,847 21,182 31,638 Trade and other receivables 1,534 2,331 3,556 Cash and cash equivalents 11,075 10,926 16,729Total current assets 12,609 13,257 20,285 Total assets 49,456 34,439 51,923 Liabilities Trade and other payables (209) (1,064) (1,698)Total current liabilities (209) (1,064) (1,698) Net assets 49,247 33,375 50,225 Equity Issued capital 347 329 347 Share premium 52,284 35,557 52,464 Retained earnings (3,384) (2,511) (2,586)Total equity 49,247 33,375 50,225 Unaudited Cash Flow Statement for the six months ended 31 December 2007 Six Six months months ended ended Year ended 31.12.07 31.12.06 30.06.07 £000 £000 £000Operating activitiesLoss before tax (799) (699) (1,424)Adjustments for: Depreciation of property, plant and equipment 182 31 135 Net interest income (345) (97) (239) (163) (66) (104)Working capital adjustments (Increase)/decrease in receivables (1,134) 9 (60) (Decrease)/increase in payables (1,488) 90 723 (2,785) 33 559Interest paid (1) (4) (6)Net cash flow from operating activities (3,585) (670) (871) Investing activitiesPurchase of intangible assets (5,311) (3,607) (12,909)Purchase of property, plant and equipment (80) (524) (1,131)Interest received 346 101 245Net cash flow from investing activities (5,045) (4,030) (13,795) Financing activitiesProceeds from issue of share capital 3,156 9,577 26,844Share issue costs (180) - (1,498)Net cash flow from financing activities 2,976 9,577 25,346 Net (decrease)/increase in cash and cash equivalents (5,654) 4,877 10,680 Cash and cash equivalents at start of the period 16,729 6,049 6,049Cash and cash equivalents at end of period 11,075 10,926 16,729 Notes These interim financial statements do not constitute statutory accounts of thecompany within the meaning of Section 240 of the Companies Act 1985 and shouldbe read in conjunction with the Annual Report for 2007. Statutory Accounts forthe year ended 30 June 2007, which were prepared under accounting practicesgenerally accepted in the UK, have been reported on by the auditors. The reportof the Auditors was unqualified and did not contain statements under section 237(2) or (3) of the Companies Act 1985. 1 BASIS OF PREPARATION The accounting policies and methods of computation used in the preparation ofthe unaudited financial information are consistent with the principles ofInternational Financial Reporting Standards ("IFRS") and its interpretationsadopted by the International Accounting Standards Board ("IASB"), and adopted bythe European Union. An explanation of the principal changes made in thetransition from UK GAAP to IFRS is set out below. 2 EARNINGS/(LOSS) PER ORDINARY SHARE Basic earnings per share is calculated by reference to the loss for thefinancial period and the weighted average number of shares in issue in theperiod of 347,000,000 (six months to 31 December 2006: 318,704,918, year ended30 June 2007: 324,627,397). There were no dilutive potential ordinary shares atthe end of each period presented. 3 TRANSITION TO IFRS Introduction The Company has adopted International Financial Reporting Standards, as adoptedfor use in the European Union (IFRS), with effect from 1 July 2007. Inaccordance with IFRS 1, the group's transition date is 1 July 2006 being thestart date for which the Company will present full comparatives information inthe 2008 Annual Report and Accounts. An exercise to assess the full impact that the change to IFRS has had on theCompany's reported equity, reported losses and accounting polices, has beencompleted. This is explained in more detail below: Basis of transition The accounting policies set out below have been applied in preparing therestatement of the financial statements for the six month period ended 31December 2006 and year ended 30 June 2007 and in the preparation of an openingIFRS balance sheet at 1 July 2006. In preparing its opening IFRS balance sheet, the Company has adjusted amountsreported previously in financial statements prepared in accordance with itsprevious basis of accounting (UK GAAP). An explanation of how the transitionfrom UK GAAP to IFRS has affected the Company's financial position, financialperformance and cash flows is set out in the notes below. IFRS 1 exemptions The Company has elected to apply the following exemptions from fullretrospective application (a) Fair value or revaluation at deemed cost: The group has notelected to restate items of property, plant and equipment to fair value attransition date. Effects of adopting IFRS on the Company's accounting policies Based on a review of the company's accounting policies, there are no changesrequired that would result in a change to the amounts previously recognisedunder UK GAAP. Therefore, the reported profit and equity of the company is notaffected by the adoption of IFRS 1 and any changes are limited to presentationof the financial statements in line with the formats to be adopted for the yearended 30 June 2008. Effect of the adoption of IFRS on the cash flow statement Under IFRS, amounts previously classified as liquid resources under UK GAAP as acomponent of net debt have been classified as cash equivalents. Accordingly,cash flows attributable to liquid resources form part of the net increase ordecrease in cash on restatement. There are no other significant changes to cashflows other than presentational changes to comply with the disclosurerequirements of IAS 7 "Cash flow statements". * * E N D S * * For further information please visit www.whitenile-ltd.com or contact: Phil Edmonds White Nile Ltd Tel: 0845 108 6060 Jonathan Wright Seymour Pierce Ltd Tel: 020 7107 8000 Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7236 1177 This information is provided by RNS The company news service from the London Stock Exchange