Final Results
White Nile Limited
22 December 2005
White Nile Ltd / Ticker: WNL / Index: AIM / Sector: Oil & Gas
22nd December 2005
White Nile Ltd ('White Nile' or 'the Company')
Final Results
White Nile Ltd, the AIM listed oil and gas exploration company, announces its
results for the period ended 30 June 2005.
Chairman's Statement
These are the maiden set of results for your Company and I am happy to report
that we are making good progress in achieving our objectives of developing White
Nile Limited into an oil and gas exploration and production company focussed in
Southern Sudan and the surrounding region. The reporting period is up to 30 June
2005. However we have achieved much since that date, including the commencement
of a seismic programme on Block Ba in Southern Sudan. In this statement I will
provide a full update to the present and outline the progress we have made,
working closely with our partners, the new Government and people of Southern
Sudan.
The Transaction
White Nile was admitted to trading on AIM on 10 February 2005 having raised over
£9 million from investors prior to admission. On 16 February 2005 we announced
that a deal had been concluded with the Government of Southern Sudan ('GOSS')
and its national oil company Nile Petroleum Corporation Limited ('Nile Pet'). In
return for a 60% interest in Block Ba, White Nile agreed to issue Nile Pet with
155,000,000 ordinary shares equivalent to a 50% interest in the Enlarged
Company. Nile Pet was also given the right to appoint two representatives to the
Board of White Nile which was effected on 14 July 2005 with the appointment of
Dr Lual Acuek Deng and Mr Edward Abyei Lino.
The Directors recognised that the Acquisition was sufficiently large relative to
the size of the Company and that it was not appropriate to allow the Company's
shares to continue trading until full information on the Acquisition had been
published. Accordingly, on 16 February 2005 the Company requested a suspension
of trading pending such publication. The Company's shares remained suspended
until the new Admission Document was completed by the Board and its advisors.
There were a number of items that needed to be included in the document all of
which are highlighted in the Admission Document. These included the signing on
25 April 2005 of an Exploration and Production Licensing Agreement in respect of
Block Ba for an initial period of ten years which can be extended on achieving
certain minimum exploration obligations. The production agreement covers an
initial 25 years on identifying commercial reserves, which can again be
extended. Further clarification on the geology and prospectivity of the block
was also provided.
Block Ba and Southern Sudan
As stated in our listing document, Block Ba covers an area of approximately
67,000 sq. km, equivalent to some 328 UK North Sea blocks or 11 UK North Sea
quadrants. Southern Sudan is an established world class petroleum producing
area. It contains a large part of the continent-wide Cretaceous rift basin
system that has proved petroliferous in Chad and Niger as well as Sudan. Current
production in Sudan is about 500,000 bopd and this is expected to increase as
more oilfield discoveries come on stream to circa 600,000 bopd in 2006. Current
proven reserves are 1.2 billion bbls and original oil-in-place is estimated at
over 10 billion bbls in the explored part of the Muglad Basin. The main
productive trend is that of the Muglad Basin where the biggest oilfields so far
discovered, Unity and Heglig have proven reserves of 250 and 200 million bbls
respectively.
It can be demonstrated that the production fairway of the Muglad Basin extends
into western Block Ba. This fairway has been mapped by geophysical methods
extending south-eastwards from the Heglig-Unity area through Block 5A, where the
Thar Jath discovery was made by Lundin in 1999 and the Mala discovery made by
Petronas in 2003, and through the highly prospective Block 5B. The area of the
main part of the Muglad Basin i.e. the most prospective part, in Block Ba could
be at least 6,000 sq. km (i.e. the area of a UK North Sea quadrant). The eastern
part of Block Ba also contains the southerly extension of the Melut Basin which
is also productive in Block 3 to the north. In addition, geophysics have
delineated other prospective basinal areas in Block Ba.
Our consultants have informed us that the area is highly prospective and can be
expected to have the same level of reserves as the productive parts of the
Muglad Basin to the northwest. In global terms Block Ba can be geologically
categorised as low risk/high reward.
Seismic Contract
On 17 June 2005 we awarded Terra Seis Geophysical Limited ('Terra Seis'), a
wholly owned subsidiary of Terra Seis International, the contract to conduct an
extensive seismic evaluation programme of Block Ba. They were commissioned to
acquire 2,000 km of high resolution geophysical data focussed on a high
definition seismic programme.
Canadian registered Terra Seis, founded in 1999, specialises in implementing and
managing seismic programmes across the world. It has worked extensively in
Africa, the Middle East, Central and South America and most recently in
Tanzania, Nigeria, Trinidad and Guatemala, carrying out seismic programmes for a
broad range of international and national oil companies across a spread of
terrains.
Terra Seis is now on the ground in Southern Sudan. A camp has been established
at Padak, 2km from the airstrip in the western section of Block Ba north of Bor,
where the seismic will be focussing initially on the extension of the Muglad
Basin. Terra Seis's team has started the seismic programme in order to gather
the relevant information to help define drill targets. We have invested heavily
in equipment including survey and drill equipment, explosives, ARGO's, airboats,
generators, accommodation and trucks. Additionally a forward camp has been
established at Panyong north of Padak for drilling activities. This is on the
back of the identification of a prospective location in the concession and we
anticipate drilling a well in early 2006.
To coordinate activities and provide logistical assistance we have moved our
head office from Johannesburg to Nairobi and we are in the process of opening an
office in Juba. Additionally a local education programme has been initiated at
Padak as part of White Nile's commitment to the social development of Southern
Sudan.
Ethiopia
On 8 July 2005 we agreed terms with the Ministry of Mines of the Federal
Democratic Republic of Ethiopia for a Joint Study Agreement ('the Agreement')
covering the area of southern Ethiopia known as the 'Southern Rift Basins'. The
approximate 70,000 sq km area is adjacent to Petronas' Gambela Block in the
north and borders Southern Sudan and Kenya to the south.
The Agreement is over a two-year period during which White Nile, in
collaboration with the Petroleum Operations Department of the Ministry of Mines,
will conduct geological and geophysical studies aimed at evaluating the
prospective nature of the area for oil. At the conclusion of the Agreement
period, or at any time before that, the terms allow the Company to enter
exclusive negotiations with the Ministry of Mines for an Exploration and
Production Sharing Agreement.
Exploration in the area is based on the geological concept that the
petroliferous Cretaceous and Early Tertiary basins of Southern Sudan extend
south-eastwards beneath the younger and less prospective East African rifts. The
Company, which has an initial cash commitment of US$ 450,000, plans to begin
geophysical operations in early 2006 with magneto-telluric and gravity surveys.
Funding
We initially raised over £9 million from US and UK institutional investors and
directors of the Company. On 28 June 2005 we raised an additional £7 million
from both existing and new institutional shareholders through the issue of
7,000,000 new ordinary shares of 0.1p each at £1.00 per share.
Appointments
As previously mentioned we appointed Dr Lual Acuek Deng and Mr. Edward Abyei
Lino as Non Executive Directors to the Board. Dr Deng, a US citizen, is
currently State Minister for Finance and has been heavily involved in the
political and economic development of Southern Sudan. Mr. Lino is currently a
Director of Nile Petroleum Corporation Limited the Southern Sudanese national
oil company. He is also Director of Security for the Regional Development
Corporation of Southern Sudan.
On 7 November 2005 we appointed Mr. Philip Ward as Chief Operations Officer. He
has over 25 years executive experience within the oil and gas industry and has
spent considerable time in Sudan, Libya and Singapore. Mr. Ward has worked with
major companies and industry consultants including Repsol, AGIP, Lasmo, Lundin,
Petronas and Tecknica on oil & gas exploration, production and financial
projects. From 2001-2005 he worked extensively on Block 5a which is an extension
of the production fairway in the north of the Muglad Basin. The block is
currently run by a consortium between Petronas, ONGC and SudaPet and is expected
to be on stream in 2006.
Mr. Ward's in-depth experience of the oil and gas industry will be invaluable to
the Company, in particular, the experience he has gained whilst working in
Southern Sudan.
Politics
Notwithstanding the terrible tragedy of the death of John Garang, much progress
has been made in Southern Sudan following the signing of the Comprehensive Peace
Accord on 9 January 2005. The First Vice President of the Government of National
Unity and President of the Government of Southern Sudan, Salva Kiir, and his
ministers have worked hard to create an inclusive and cohesive Southern Sudan.
Legal and fiscal systems have been implemented which have culminated in the new
constitution for Southern Sudan being signed in Juba, the South's administrative
capital, on 5 December 2005.
As shareholders will already know there is a competing claim on Block Ba from
French oil company Total. We believe we have security of tenure. Therefore, we
have been working very closely with our partners, Nile Pet, local government and
the people of Southern Sudan to progress the project. Our investors are
committed to backing our development programme and we are looking forward to
rewarding all parties by creating a Southern Sudan focussed oil company with the
full support of the Government of Southern Sudan.
Results
We are currently an exploration company and are not yet in a position to
generate revenue. For the period under review we recorded a loss of £394,039.
We have raised circa £16 million to date which will be utilised for working
capital and to develop our activities in Southern Sudan and the immediate
region.
Conclusion
White Nile aims to become an independent oil and gas producer focussed in
Southern Sudan and the surrounding region. We have been very active in
developing international and local partners to secure and develop our assets. We
have started the 2,000km seismic programme and are now fully operational in
Southern Sudan. With an equity stake in White Nile, the Government of Southern
Sudan has a substantial interest in its own assets. We continue to develop our
interests in the region and look forward to an exciting year in 2006.
Phil Edmonds
Chairman
PROFIT & LOSS ACCOUNT
For the period ended 30 June 2005
Notes Period
ended
30 June
2005
£
TURNOVER -
AIM admission costs (215,186)
Operating expenses (322,025)
OPERATING LOSS (537,211)
Interest receivable 143,172
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION
(394,039)
Taxation -
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION
(394,039)
LOSS PER ORDINARY SHARE
Basic and diluted 3 (0.273p)
The operating loss for the period arises from the Company's continuing
operations.
No separate statement of Total Recognised Gains and Losses has been presented as
all such gains and losses have been dealt with in the profit and loss account.
BALANCE SHEET
30 June 2005
Notes 2005
£
FIXED ASSETS
Intangible assets 10,029,688
Tangible assets 42,182
10,071,870
CURRENT ASSETS
Cash at bank and in hand 14,790,959
CREDITORS: Amounts falling due within one year (857,933)
NET CURRENT ASSETS 13,933,026
NET ASSETS 24,004,896
CAPITAL AND RESERVES
Called up share capital 310,000
Share premium account 17,088,935
Shares to be issued 7,000,000
Profit and loss account (394,039)
SHAREHOLDERS' FUNDS 4 24,004,896
CASH FLOW STATEMENT
for the period ended 30 June 2005
Notes Period
ended
30 June
2005
£
Cash inflow from operating activities 5a 326,748
Returns on investments and servicing of finance 5b 143,172
Capital expenditure and financial investment 5b (1,012,896)
CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (542,976)
Management of liquid resources 5b (14,525,153)
Financing 5b 15,333,935
INCREASE IN CASH IN THE PERIOD 265,806
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Period
ended
30 June
2005
£
Increase in cash in the period 265,806
Cash outflow from increase in liquid resources 14,525,153
NET FUNDS AT 30 JUNE 2005 5c 14,790,959
NOTES
for the period ended 30 June 2005
1 FINANCIAL INFORMATION
The financial information for the period ended 30 June 2005 has been extracted
from the Company's audited accounts. The Financial Information does not
constitute the Company's statutory financial statements. The figures for the
period ended 30 June 2005 have been extracted from the annual accounts on which
the auditors have issued an unqualified report.
2 BASIS OF PREPARATION
The financial statements have been prepared under the historical cost convention
and in accordance with applicable accounting standards.
3 LOSS PER ORDINARY SHARE
The calculation of basic and diluted loss per ordinary share is based on the following loss and number of
shares.
Period
ended
30 June
2005
£
Loss for the financial period 394,039
2005
No. of shares
Weighted average number of shares 144,342,105
Due to the loss incurred in the period, there is no dilutive effect from the issue of share options.
4 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2005
£
Loss for the financial period (394,039)
Issue of shares during the period 18,130,000
Issue costs (731,065)
Shares to be issued 7,000,000
Net addition to shareholders' funds 24,004,896
Opening shareholders' funds -
Closing shareholders' funds 24,004,896
5 CASH FLOWS 2005
£
a Reconciliation of operating loss to net cash inflow from operating activities
Operating loss (537,211)
Depreciation 6,026
Increase in creditors 857,933
Net cash inflow from operating activities 326,748
b Analysis of cash flows for headings netted in the cash flow 2005
£
Returns on investments and servicing of finance
Interest received 143,172
Net cash inflow from returns on investments and servicing of finance
143,172
Capital expenditure and financial investment
Purchase of intangible fixed assets (964,688)
Purchase of tangible fixed assets (48,208)
Net cash outflow from capital expenditure and financial investment
(1,012,896)
Management of liquid resources
Cash on deposit (14,525,153)
Net cash outflow from management of liquid resources
(14,525,153)
Financing
Proceeds from issue of share capital 9,065,000
Share issue costs (731,065)
Proceeds from shares to be issued 7,000,000
Net cash inflow from financing
15,333,935
Cash- At 30 June 2005
flow £
c Analysis of net funds £
Cash at bank and in hand 265,806 265,806
Cash on deposit 14,525,153 14,525,153
14,790,959 14,790,959
6 POST BALANCE SHEET EVENTS
On 4 July 2005 the Company issued 7,000,000 ordinary shares of 0.1p for a cash
consideration of £1 per share. The gross cash proceeds of £7,000,000 were
received prior to 30 June 2005 under the terms of the applicable subscription
agreements and have been included in these financial statements as shares to be
issued.
Copies of the Report and Accounts for the period ended 30 June 2005 are being
sent to shareholders. Further copies will be available from the Company
Secretary's office, which is Millennium Bridge House, 2 Lambeth Hill, London,
EC4V 4AJ.
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