Westmount Engy. Regulatory News (WTE)

5 Dec 2006 07:01

Westmount Energy Limited05 December 2006 5 December 2006 CONTACTS: Westmount Energy Limited Tel: 01534 814209Paul Anderson, DirectorRuegg & Co Limited Tel: 020 7584 3663Gavin BurnellMerlin Tel: 020 7653 6620Tom Randell Mob: 0777 587 5847 WESTMOUNT ENERGY LIMITED PRELIMINARY RESULTS FOR YEAR ENDED 30 JUNE 2006 The Board of Westmount Energy Limited, the Jersey, Channel Islands basedindependent oil and gas investment company ("the Company") today announces thepreliminary results of the Company and its subsidiary ("the Group") for the yearended 30 June 2006. Highlights are as follows: • Turnover from discontinued operations in the North Sea £1,118 (2005: £137,925). • Profit before tax of £4,759,631, profit after tax £4,292,357 (2005: Profit before tax of £485,867, profit after tax £461,362). • Basic earnings per share of 57.19p (2005: 6.14p). • Diluted earnings per share of 56.20p (2005: 6.14p). • The results for the year ended 30 June 2006 include the surplus realised on the termination of the Group's overriding royalty interest relating to Licence P241 North Sea amounting to £1,706,201 and the profit realised on the disposal of 40 million of the Company's shareholding of 70 million Ordinary Shares of Sterling Energy plc amounting to £3,189,999. Following the approval of Shareholders at the Extraordinary General Meeting ofthe Company held on 22 December 2005 Capital of the equivalent of 50p per 10pOrdinary Share totalling approximately £7,500,000 was authorised to be returnedto shareholders. Shareholders have also received one Consolidated Ordinary Shareof 20p for every two Ordinary Shares of 10p each held. On 31 January 2006 atotal of £5,836,679 was returned to shareholders and those shareholders notreceiving full earlier payment were forwarded return of capital on 1 May 2006,totalling £1,670,001.50. The 10p Ordinary Shares of the Company commenced trading on AIM on 2 October1995 at 15p. Following the Share Capital Re-organisation and the purchase of81,680 20p Ordinary Shares by the Company, there are now 7,425,000 20p OrdinaryShares in issue traded on AIM held by approximately 1,600 shareholders. Thereare also Share Options outstanding over 750,000 20p Ordinary Shares exercisableat a subscription price of 103.5p per share, over various periods, expiring 31December 2012. Commenting on the Company's outlook, Mr Derek Williams, Chairman, stated: "The Board of Westmount continues to look forward to the growth in value of itsinvestments which already indicate a good profit margin over book value." Attached: Full text of the Chairman's Review from the forthcoming Annual Report,including the Consolidated Profit and Loss Account, Consolidated Balance Sheetand Consolidated Cash Flow Statement. Copies of the preliminary results will be available from the offices of Ruegg &Co Limited, 39 Cheval Place, London SW7 1EW for a period of one month fromtoday's date. CHAIRMAN'S REVIEW The results for the year ended 30 June 2006 show profits before taxation of£4,759,631 (£4,292,357 after taxation) compared with profits before taxation of£485,867 (£461,362 after taxation) for the year ended 30 June 2005. Turnover forthe year ended 30 June 2006 arising from the group's discontinued operations inthe North Sea amounted to £1,118 as compared with £137,925 for the year ended 30June 2005. For the year ended 30 June 2006 the results include the surplus realised on thetermination of the group's overriding royalty interest relating to Licence P241North Sea amounting to £1,706,201. Also included in the profits for the year isthe profit realised on the disposal of 40,000,000 ordinary shares of SterlingEnergy plc ("Sterling") amounting to £3,189,999. As set out in the circular to shareholders dated 25 November 2005 following thesale of the two investments referred to above, the company had cash fundsavailable of approximately £9 million and your directors were in a position torecommend return of capital to shareholders, whilst retaining sufficient fundsfor the future growth of the company. Following the Extraordinary GeneralMeeting of the company held on 22 December 2005 it was announced that allenabling resolutions as set out in the circular were duly passed and accordinglycapital of the equivalent of 50p per ordinary share totalling approximately£7,500,000 would be returned to shareholders. Shareholders would also receiveone consolidated ordinary share of 20p for every two ordinary shares of 10p eachheld. On 31 January 2006 a total of £5,836,679 was returned to shareholders andthose shareholders not receiving full earlier repayment were forwarded return ofcapital on 1 May 2006, totalling £1,670,001.50. On 19 January 2006 the company announced it had provided a £500,000 convertibleloan to AIM quoted CDS Oil and Gas Group plc ("CDS") to be utilised solelytowards the funding of its exploration programme in the Chaco Basin in NorthWest Paraguay, South America. One of the features of the arrangements is that ifthe Loan is not repaid on 29 December 2006, Westmount will apply the amount ofthe Loan and accrued interest by subscribing for such number of new 1p ordinaryshares of CDS, calculated by the average price (less 5% thereof) of an ordinaryshare of 1p each in CDS as traded on AIM for the previous 14 trading days. The company's investment policy is to continue to invest, mainly in the energysector, selectively in companies principally at an early stage of theirdevelopment, which the directors of Westmount consider hold the possibility ofconsiderable capital growth of the funds invested. Your directors will alsocontinue its policy of divesting part or all of the funds so invested in acompany, when appropriate, to maximise the return from the investments, for thebenefit of Westmount shareholders. Besides the recent investment in CDS, referred to above the company's otherinvestments include, 30,000,000 shares of AIM quoted Sterling, 5,500,000 sharesof AIM quoted Desire Petroleum plc ("Desire") and 244,000 shares of presentlyunquoted Eclipse Energy Company Limited ("Eclipse"). The carrying book value ofthese investments is £4,882,017. Having regard to the current middle-marketprices of the company's two AIM quoted investments, the indicated market valueshows up a surplus much in excess of the book carrying value of the investments. Sterling is an oil and gas exploration and production company operating in theGulf of Mexico and Africa and recently published its interim results for thefirst half of 2006. These show continued growth in its development over thecorresponding period last year. Turnover was increased 263% to £24.5 million,net profit up 159% to £4.9 million and earnings per share up to 0.34p per sharefrom 0.13p per share. Sterling's strategy is to create value by achieving abalance between production and exploration. Sterling has a growing cash positionand an active and largely carried exploration portfolio with 8 wells plannedover the next year. Through its shareholding in Desire the company has a significant indirectinvestment in the exploration of the North Falkland Basin, South Atlantic.Following Desire's fundraising of £24.4 million last year it is ready to resumedrilling operations as soon as arrangements can be made to secure a suitablerig. Eclipse has developed an innovative concept for the hybrid production ofelectricity from offshore gas and wind resources. The first development ofEclipse is the Ormonde project located 10 kilometres offshore Barrow-in-Furness,Cumbria in the East Irish Sea. Eclipse operates the undeveloped Ormonde Northand South gas fields located in Blocks 113/28a and 113/29a held under licencesP1032 and P1033. Eclipse completed a placing of new shares at a price of £7.50each last year to raise £4,950,000 before expenses. Eclipse is currently waitingapproval from the DTI for the Ormonde project. CDS's activities are focused on exploring several potential oil and gas plays inthe Chaco Basin in North West Paraguay. Under the terms of the joint-ventureagreement on the Gabino Mendoza block CDS had an obligation to drill a wellbefore the end of 2005. The well reached a planned depth of 1,635 metres and wascased and suspended for testing and deepening at a later date. The initialobjective of the well was a potential oil-bearing zone between 705 metres and1,600 metres. Analysis to date by CDS of the technical information derived fromthe well, confirms that hydrocarbons were found within several zones, althoughreservoir qualities are lower than required to flow oil unassisted. CDS believesthat the results from the well have improved the level of confidence of the gaspotential at depth on the Gabino Mendoza block and merits a deepening of thewell. The drilling of the well fulfilled CDS's work obligation on the blockalthough CDS has stated that at a later date it intends to drill the well to3,250 metres to test for gas. CDS holds prospecting rights over a large area ofthe under-explored Chaco Basin of North West Paraguay which is due east of, andshares the same stratigraphy at shallower depth as, the oil and gas producingareas in Bolivia. The two most interesting plays have yet to be drilled by CDS -the Carboniferous oil on the Boqueron block and the deep Devonian gas on theGabino Mendoza block. CDS plans to bring in joint venture partners to providefurther funding, in addition to further placing of its shares (CDS reported on17 October 2006 it had raised a further £1.8 million in cash), to spread therisk for its shareholders. Outlook The Board of Westmount continues to look forward to the growth in value of itsinvestments which already indicate a good profit margin over book value. DEREK G WILLIAMSChairman 5 December 2006 CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 30 JUNE 2006(Expressed in United Kingdom Sterling) 2006 2005 £ £ £ £ TurnoverContinuing operations - -Discontinued operations 1,118 137,925 -------- -------- 1,118 137,925 Operating costs - (5,927) -------- --------Operating profit beforeadministrativeexpensesContinuing operations - -Discontinued operations 1,118 131,998 -------- -------- 1,118 131,998 Administrative expenses (316,022) (280,841) Profit on termination of oiland gasfield interests 1,706,201 -Profit on disposal of 3,190,096 639,751investmentsInterest and similar fees 178,238 27,584receivableBank loan interest andchargespayable - (32,625) -------- -------- 5,074,535 634,710 -------- --------Net profit on ordinaryactivities before taxation 4,759,631 485,867 Taxation (467,274) (24,505) -------- --------Profit for the year 4,292,357 461,362 -------- -------- Basic earnings per share 57.19p 6.14p -------- -------- Diluted earnings per share 56.20p 6.14p -------- -------- CONSOLIDATED BALANCE SHEET AT 30 JUNE 2006(Expressed in United Kingdom Sterling) 2006 2005 £ £ £ £ FIXED ASSETSTangible fixed assets - 32,563Investments 4,882,017 9,482,017 -------- -------- 4,882,017 9,514,580 CURRENT ASSETS Debtors 505,549 11,779Cash at bank 880,222 34,791 -------- -------- 1,385,771 46,570CREDITORS: amountsfalling duewithin one year (176,148) (71,060) -------- -------- NET CURRENT ASSETS/(LIABILITIES) 1,209,623 (24,490) -------- -------- TOTAL ASSETS LESS CURRENT LIABILITIES 6,091,640 9,490,090 -------- -------- SHARE CAPITAL AND RESERVES Share capital 1,496,686 1,501,336Share premium account 668,220 974,248Capital redemption reserve 150,134 -Profit and loss account 3,776,600 7,014,506 -------- -------- SHAREHOLDERS' FUNDS 6,091,640 9,490,090 -------- -------- These financial statements were approved by the board of directors on 5 December 2006. D G WILLIAMSChairman CONSOLIDATED CASH FLOW STATEMENT FOR THE YEAR ENDED 30 JUNE 2006(Expressed in United Kingdom Sterling) 2006 2005 £ £ Net cash outflow from operatingactivities (325,752) (64,519) Returns on investments andservicing of finance 178,238 63,813 Taxation (500,869) (19,605) Capital expenditure and financial 9,028,860 779,581investment -------- -------- Cash outflow before financing 8,380,477 759,270 Financing (7,535,046) (764,174) -------- -------- Increase/(decrease) in cash in 845,431 (4,904)the year -------- -------- Reconciliation of cash flow to movementin net funds/(debt) Increase/(decrease) in cash in 845,431 (4,904)the year Cash outflow from decrease in - 764,174debt Loan advance 500,000 - Cash inflow from decrease in - (94,332)current asset -------- -------- Change in net funds resulting 1,345,431 664,938from cashflows Non-cash movements on debt - (575,900) -------- -------- Movement in net funds in the year 1,345,431 89,038 Net funds/(debt) brought forward 34,791 (54,247) -------- -------- Net funds carried forward 1,380,222 34,791 -------- -------- This information is provided by RNS The company news service from the London Stock Exchange