Last checked at 4 Mar 2009 07:00
04 March 2009
CONTACTS:
| Westmount Energy Limited | Tel: 01534 814209 |
| Paul Anderson, Director | |
| Ruegg & Co Limited | Tel: 020 7584 3663 |
| Gavin Burnell | |
| Brett Miller | |
PRESS RELEASE
WESTMOUNT ENERGY LIMITED
INTERIM RESULTS FOR THE SIX MONTHS
ENDED 31 DECEMBER 2008
The Board of Westmount Energy Limited (the "Company") today announces the interim results of the Company for the six months ended 31 December 2008.
These results will shortly be available to download from the Company's website www.westmount-energy.co.uk and will be posted to shareholders no later than Friday 6 March 2009.
________________________________________________________________________________
SUMMARY AND OBJECTIVE
The condensed information contained in this unaudited half-yearly financial report has been prepared in accordance with pronouncements on interim reporting issued by the Accounting Standards Board (ASB). The information has been prepared on the basis of the accounting policies set out in the company's most recent audited annual financial statements for the year ended 30 June 2008.
CHAIRMAN'S HALF-YEAR REVIEW
The past six months have been an important period in your Company's history during which we realised our investment in Eclipse Energy Plc following the successful offer from Vattenfall AB (publ) for the whole of the issued share capital at £18.01 per share.
This resulted in a profit on disposal of £3,659,440 and the company paid a return of capital of 65p to shareholders on the 13 February 2009. Following this distribution the price quoted for your company's shares on the AIM market was reduced by this amount so that the current quote of 32-40p reflects this distribution.
We thus have two remaining investments, namely Sterling Energy Plc and Desire Petroleum Plc.
Sterling Energy Plc (Sterling)
We hold 31.5 million ordinary shares in Sterling and this has been a very disappointing investment over the last year or so. The company's activities have been badly affected by the fall in the oil price and reduced production in Mauritania, together with the lower gas prices received in the U.S.
The Board of Sterling announced on the 4 November 2008 that it had received an approach that could possibly lead to an Offer for the company and we believe that at the present moment the company is still in talks. As we await the result of these discussions we are therefore unable to comment on what the ultimate value of our investment may be. In view of the historic carrying value we have concluded that we should make a provision of £2,125,250 to reflect a reduction which is more aligned to the current market value.
Desire Petroleum Plc (Desire)
We hold 5.2 million ordinary shares in Desire. On the 10 February 2009 they reported that they have not yet contracted for a rig to drill the Falklands licence area but that the global rig market is beginning to ease both in terms of availability and cost. The Board of Desire are of the opinion that the fundamentals of Desire's project remain unchanged notwithstanding the current oil price and that they are hopeful of resolving the rig position in the near future. They reaffirm that the project remains unchanged with any discoveries offering very exciting prospects. We await further news regarding progress on this project.
Profit for the six months ended 31 December 2008
The Company made a net profit before taxation of £1,296,319 after the provision of £2,125,250 resulting from the write down of the carrying cost of our holding in Sterling. This profit was struck after allowing for the commission of £115,615 due to the Estate of our late Chairman Derek Williams and to Ridge House Resources Ltd a connected company. In addition there were expenses of £56,850 connected with the return of capital. Net annual costs for the six month period were £101,000 compared to £168,381 for the six months ended the 31st December 2007. Your Board is extremely conscious of the need to control our expenditure and will continue to be vigilant in this regard.
Future Developments
It is the Board's intention to dispose of our investments as and when a suitable opportunity presents itself as well as to consider proposals to further develop the company. We are hopeful that the next six months will see developments in each of our holdings of Sterling and Desire.
Mervyn Bradlow
Chairman
CONDENSED PROFIT AND LOSS ACCOUNT
(Expressed in United Kingdom Sterling)
Notes Six months ended Six months ended Year ended
31 December 2008 31 December 2007 30 June 2008
(unaudited) (unaudited) (audited)
£ £ £
Administrative expenses (273,980) (168,381) (346,267)
Profit on disposal of investments 1 3,659,440 289,072 507,325
Impairment of investment 2 (2,125,250) - -
Interest Receivable 36,110 21,306 45,352
Net profit on ordinary activities
before taxation 1,296,320 141,997 206,410
Taxation - - -
Profit for the period 1,296,320 141,997 206,410
Basic earnings per share 18.71p 1.92p 2.85p
Diluted earnings per share 18.71p 1.92p 2.85p
There are no recognised gains or losses other than as disclosed above.
There have been no discontinued activities or acquisitions in the current or preceding accounting period.
Notes to the condensed profit and loss account:
1. On 4 November 2008 the company sold all of its investment in Eclipse Energy UK Plc (formerly Eclipse Energy Company Limited) totalling 244,000 shares in consideration of £4,394,440 at a price of £18.01 per share, realising a gain of £3,659,440.
£
Gross sale proceeds 4,394,440
Carrying value of shares 01.07.2008 (735,000)
Gain on sale 3,659,440
2. During the period, in the opinion of the directors, the company's investment in Sterling Energy Plc suffered a permanent diminution in value to an amount less than cost. This investment has been written down to the directors' estimated recoverable value as follows:
£
Carrying value of shares 01.07.2008 3,335,000
Purchase of shares in the period 50,250
Carrying value of shares 31.12.2008 (1,260,000)
Impairment of investment 2,125,250
Carrying value per share 01.07.2008 0.11p
Carrying value per share 31.12.2008 0.04p
CONDENSED BALANCE SHEET
(Expressed in United Kingdom Sterling)
31 December 2008 30 June 2008
Notes (unaudited) (audited)
£ £
FIXED ASSETS
Investments 1,918,998 4,728,998
CURRENT ASSETS
Debtors 10,863 7,689
Cash at bank 5,207,279 1,118,597
5,218,142 1,126,286
CREDITORS amounts falling due
within one year (150,242) (131,730)
NET CURRENT ASSETS 5,067,900 994,556
TOTAL ASSETS LESS CURRENT
LIABILITIES 6,986,898 5,723,554
SHARE CAPITAL AND RESERVES
Share Capital 1 1,396,060 1,403,060
Share Premium Account 2 391,648 416,317
Share Option Account 3 268,109 269,416
Capital Redemption Reserve 4 258,410 251,410
Profit and Loss Account 5 4,672,671 3,383,351
SHAREHOLDERS' FUNDS 6,986,898 5,723,554
Notes to the condensed balance sheet:
£
1. Share Capital -
Balance 01.07.2008 1,403,060
Purchase of 35,000 own shares of 20p (7,000)
Balance 31.12.2008 1,396,060
2. Share Premium Account -
Balance 01.07.2008 416,317
Purchase of 35,000 own shares of 20p (24,669)
Balance 31.12.2008 391,648
3. Share Option Account -
Balance 01.07.2008 269,416
Costs attributable to period 19,963
Cancelled options (21,270)
Balance 31.12.2008 268,109
4. Capital Redemption Reserve -
Balance 01.07.2008 251,410
Purchase of 35,000 own shares of 20p 7,000
Balance 31.12.2008 258,410
5. Profit and Loss Account -
Balance 01.07.2008 3,383,351
Profit for 6 months ended 31.12.2008 1,296,320
Purchase of 35,000 own shares of 20p (7,000)
Balance 31.12.2008 4,672,761
CONDENSED CASH FLOW STATEMENT
Six months to Six months to Year to
31 December 2008 31 December 2007 30 June 2008
(unaudited) (unaudited) (audited)
£ £ £
Net cash (outflow) from
operating activities (Note 1) (259,949) (181,188) (315,740)
Returns on investment and
servicing of finance 36,110 21,307 45,352
Taxation - - -
Capital expenditure and
financial investment - Investment
disposal proceeds 4,344,190 825,195 1,196,468
Cash inflow/(outflow) before financing 4,120,351 665,314 926,080
Financing (31,669) (172,782) (348,092)
Increase/(decrease) in cash 4,088,682 492,532 (577,988)
________ ________ ________
Reconciliation of cash flow to
movement in net funds/(debt)
Increase/(decrease) in cash 4,088,682 492,532 (577,988)
_______ ______ ______
Change in net funds/(debt) resulting
from cash flows 4,088,682 492,532 (577,988)
_______ ______ ______
Movement in net funds in the year 4,088,682 492,532 (577,988)
Net funds brought forward 1,118,597 540,609 540,609
Net funds carried forward 5,207,279 1,033,141 1,118,597
_______ ________ ________
Represented by:
Cash at bank 5,207,279 1,033,141 1,118,597
Net funds carried forward 5,207,279 1,033,141 1,118,597
Note to the cash flow statement:
£
1. Reconciliation of net operating loss to net cash flow outflow from operating activities -
Administrative expenses (273,980)
Cost attributable to issue of share options (1,307)
Increase in prepayments and accrued income (3,174)
Increase in creditors and accrued expenses 18,512
Net cash outflow from operating activities (259,949)