Half Yearly Report

RNS Number : 2478O

Westmount Energy Limited

04 March 2009

 



04 March 2009

CONTACTS:

Westmount Energy Limited	Tel: [phone]
Paul Anderson, Director
Ruegg & Co Limited	Tel: [phone]
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)

 

END

 

 

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