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Woburn Energy PLC (WBN)

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Friday 01 June, 2012

Woburn Energy PLC

Final Results

RNS Number : 6796E
Woburn Energy PLC
01 June 2012
 

 

 

For immediate release

1 June 2012

Woburn Energy Plc

("Woburn Energy" or the "Company")

Audited Results for the year ended 31 December 2011

Notice of Annual General Meeting

 

Woburn Energy (AIM: WBN) announces its audited results for the year ended 31 December 2011. The Report and Accounts are being posted to shareholders shortly. The Annual General Meeting of Woburn Energy Plc will be held at the offices of Maclay Murray & Spens LLP at 10.00 a.m. on 29 June 2012.

 

For further information, please contact:

 

Woburn Energy Plc

Tel: +44 (0) 20 7380 4600

Kamran Ahmed

Graeme Thomson

www.woburnenergy.com

 

 

Beaumont Cornish Limited (Nominated Adviser)

Tel: +44 (0)20 7628 3396

Michael Cornish


 

A copy of this announcement is available from the Company's website, www.woburnenergy.com.

 

 

CHAIRMAN'S STATEMENT

 

Woburn's remaining asset during the year under review has been its 51% shareholding in Las Quinchas Resource Corp ("LQRC"), which owns a 50% non-operated beneficial interest in the Las Quinchas Association Contract with Ecopetrol in Colombia. The operator of Las Quinchas Association Contract is Pacific Rubiales.

 

As previously reported, the Company has been seeking a purchaser for its Colombian interests for some time and the Board was delighted to announce on 1 June 2012, that LQRC had entered into a conditional Assignment Agreement for the sale of its 50 per cent. beneficial interest in the Las Quinchas Association Contract. Woburn's share of the net disposal proceeds is estimated to amount to approximately US$4.5 million after expenses and settling existing liabilities of LQRC. The proposed completion of the sale by LQRC is conditional, inter alia, on the approval of Shareholders at a general meeting of the Company to be held on 21 June 2012 and Ecopetrol consent. Full details are set out in a circular to shareholders.

 

The disposal will thus result in the Company becoming an investing company and the Directors intend to make investments in the oil and gas sector. The Directors will initially focus on Europe, the Middle East, Africa and Asia, where we believe that a number of opportunities exist to acquire interests in suitable projects, although other regions may be considered. Investments may be made in exploration, development or producing assets. While the Company has evaluated a number of production and exploration opportunities in Europe and Central Asia over the last two years, the Board believes that following the disposal, the Company will be much better placed to attract new potential projects.

 

Prior to receipt of funds from the sale of the Colombian beneficial interests or from other sources, the Company had been reliant on the on-going financial support of Cetus, to meet its operating costs. The cash proceeds of the disposal enables LQRC and Woburn to settle all outstanding liabilities owed both to the Las Quinchas Association Contract operator, Pacific Rubiales, and the LQRC minority shareholder, PetroMagdalena. Following the settlement of all outstanding management fees and other administrative costs owed by Woburn to PetroMagdelena, Woburn's expenses and costs of the disposal and repayment in full of the current Cetus Loan, Woburn's share of the net proceeds of the disposal are estimated to amount to approximately US$3.4 million, which will provide the Company with the cash resources to pursue new investment opportunities and to provide working capital for the day-to-day business of the Company.

This has been a frustrating period for the Company but now that the sale of the Colombian interests has finally been agreed, the Directors look forward to the future with renewed confidence.

 

 

 

Arif Kemal

 

Chairman

1 June 2012

 

 

DIRECTORS' REPORT

The Directors present their report together with the audited financial statements of the Company and the Group for the year ended 31 December 2011.

Principal activity

The Company is registered in England and Wales.  The Company is part of a Group whose principal activity is oil and gas exploration and production.  The Group operates through Woburn Energy Plc, a company traded on AIM, a Market operated by the London Stock Exchange, together with Woburn's 51% owned subsidiary undertaking, Las Quinchas Resource Corporation ("LQRC").

Review of the business and future prospects

The Group's activities for the year and future prospects are discussed in the Chairman's Statement.

Due to the current stage of the development and the financial condition of the Group, the Directors do not consider it meaningful to consider a detailed review of the key performance indicators in respect of the year under review.  Critical non-financial KPI's, at this stage, are the availability of funding to meet working capital requirements.

Going concern: principal risks and uncertainties facing the Company

The principal risks and uncertainties facing the Company at the present time are related to its financial condition, the completion of the sale of its Colombian interests, announced on 1 June 2012, to enable it to meet its liabilities as they fall due, the price of oil, the identification and funding of international production and development projects in the oil and gas industry   .   

During the year ended 31 December 2011 the Group made a loss of $1,801,751 (2010: $3,248,204), of which $1,561,148 was attributable to equity holders of the parent company and $240,603 to the Minority Interest (2010: $2,468,483 and $779,721 respectively).  At the year-end date, the Group had net assets of $1,441,696 (2010: $3,870,124) the principal asset being $8,121,575 of unevaluated exploration and evaluation assets held for resale. Of these net assets $198,386 (2010: $1,759,534) was attributable to equity shareholders and $1,243,310 (2010: $2,110,590) to the 49% minority interest in Las Quinchas Resources Corp.  Net current assets were $1,645,860 (2010: net current liabilities $3,874,538).The Group had $824,993 of cash as at 31 December 2011 (2010: $1,360,698) and had trade and other payables due within one year outstanding of $8,436,727 (2010: $5,357,810).

 

On 1 June 2012, the Company announced that its 51% owned subsidiary, LQRC, had entered into a conditional Assignment Agreement for the sale of its 50 per cent. beneficial interest in the Las Quinchas Association Contract. Woburn' share of the net disposal proceeds is estimated to amount to approximately US$4.5 million after expenses and settling existing liabililties of LQRC. The proposed completion of the sale by LQRC is conditional, inter alia, on the approval of Shareholders at a general meeting of the Company to be held on 21 June 2012and Ecopetrol consent. Full details are set out in a circular to shareholders.

 

Prior to receipt of funds from the sale of the Colombian beneficial interests or from other sources, the Company had been reliant on the on-going financial support of Cetus, to meet its operating costs. The cash proceeds of the disposal enables LQRC and Woburn to settle all outstanding liabilities owed both to the Las Quinchas Association Contract operator, Pacific Rubiales, and the LQRC minority shareholder, PetroMagdalena. Following the settlement of all outstanding management fees and other administrative costs owed by Woburn to PetroMagdelena, Woburn's expenses and costs of the disposal and repayment in full of the current Cetus Loan, Woburn's share of the net proceeds of the disposal are estimated to amount to approximately US$3.4 million, which will provide the Company with the cash resources to pursue new investment opportunities and to provide working capital for the day-to-day business of the Company. A net amount of approximately $0.69 million had been received by the end of 2011. The remaining funds are expected to be received in full by the Company by the end of May 2013 with a net $0.16 million by the end of November 2012, $2.29 million by the end of February 2013 and $0.27 million by the end of May 2013.

 

On the basis that the Resolutions are passed by the General Meeting of shareholders to be held on 21 June 2012 and for which irrevocable undertakings to vote in favour have been received for over 86% of the shares in issue, and the sale proceeds are received as expected, the Directors believe that the Group will have appropriate levels of financing and that the Group will have sufficient cash to fund its activities and to continue its operations for the foreseeable future and for the Group to continue to meet its liabilities as they fall due, and for at least the next twelve months from the date of approval of these financial statements.  The financial statements have, therefore, been prepared on the going concern basis.

 

Results and dividends

The Group results for the year ended 31 December 2011 are set out in the financial statements. The Group made a loss for the year ended 31 December 2011 of $1,801,751 (2010: loss $3,248,204), of which $1,561,148 of the loss was attributable to the equity holders of the Group (2010: loss $2,468,483) and $240,603 of the loss was attributable to the 49% minority interest in LQRC (2010: $779,721).  The Directors cannot recommend a dividend for the year ended 31 December 2011 (2010:  $Nil).

Group structure and share capital

Details of the share capital are set out in Note 16 to the financial statements.

Directors

The following Directors held office during the year:

K Ahmed

A B Baldry

H A Hashwani

R B Kanga

A Kemal

J M Cubitt (resigned 31 December 2011)

 

Employees' health and safety

It is the policy of the Group to consider the health and welfare of employees by maintaining a safe place and system of work as required by the Safety, Health and Welfare at Work Act, 1989.

Significant shareholders

Pursuant to the Companies Act 2006 the Company has been notified of major shareholdings.  In accordance with "Disclosure and Transparency Rules", issued by the Financial Services Authority, the interests in the Company's Ordinary Shares as at 1 June 2012 of its major shareholders were as follows:

 

Number of Ordinary Shares

% of Issued Share Capital

 

 

 

Cetus Investment Resources Inc ("Cetus")

200,000,000

86.15%

 

No other individual or organisation holds more than 3% of the Company's Ordinary Shares.

Environment

The Group's exploration activities within the United Kingdom and Colombia are subject to the relevant environment protection acts of each country.  While at 31 December 2011 the Group is not an operator of any exploration projects, it closely monitors activities of the operators to ensure to the best of its knowledge there is no potential for any such breach.  There have been no known convictions in relation to breaches of these acts recorded against the Group during the reporting period.

Use of financial instruments

The Group's financial risk management objectives are to minimise debt, to fund exploration activity through equity financing and to ensure sufficient working capital for the Group's overhead and capital expenditure commitments.  This is achieved by prudent financial management and careful management of the Group's cash balances, both short and long term. 

Information to shareholders - Website

In compliance with AIM Rule 26, the Company has its own website (www.woburnenergy.com) for the purposes of improving information flow to shareholders as well as to potential investors.

Internal controls

The Board is responsible for identifying and evaluating the major business risks faced by the Group and for determining and monitoring the appropriate course of action to manage these risks.

Creditor payment policy and practice

The Group agrees terms of contracts when orders are placed and on entering exploration joint ventures.  It is the Group's policy that payments to suppliers are made in accordance with those terms and conditions agreed between the Group and its suppliers, providing that all trading terms and conditions have been complied with.

Political and charitable contributions

There were no political or charitable contributions made by the Group during the year ended 31 December 2011.

Subsequent events

Significant events after the year end are set out in Note 22 of the financial statements.

Corporate Governance

Although AIM listed companies are not required to report on the Combined Code, the Directors are committed to proper standards of corporate governance and will continue to keep procedures under review.

The Board

The Board is responsible to the shareholders for the leadership and control of the Company.  Meetings are conducted when important matters or issues require discussion.  Circular resolutions of the Directors are undertaken on minor issues.  In addition, the Acting Managing Director keeps all members of the Board appraised on a regular basis. Directors also meet regularly on an informal basis to discuss various matters relating to the Group's activities, objectives and to ensure Corporate Governance is maintained.

The Board considers and monitors all matters as are specifically vested to it under the Company's Articles of Association ("the Articles").  The Company's management provides formal and transparent procedures to appoint or re-elect Board Members. 

Annual General Meeting

The Notice of the Annual General Meeting to be held on 29 June 2012 is set out at the end of this Annual Report, together with the Form of Proxy.  Resolutions 1 to 4 are ordinary resolutions and 5 is a special resolution.

Resolutions 1 and 3 deal with the approval, inter alia, of the Financial Statements and the re-appointment of the auditors. The Articles provide for the re-election of all Directors at regular intervals and H Hashwani will offer himself for re-election in Resolution 2.

Resolutions 4 and 5 concern the granting of authority to the Directors to allot shares in the Company and to grant rights to subscribe for, or to convert any security into, shares in the Company up to an aggregate nominal amount of £2,500,000 and to be empowered to allot equity securities, including treasury shares, thereby allowing the Board to more easily conclude commercial opportunities as appropriate.

The Directors unanimously recommend that you vote in favour of all the proposed resolutions as they intend to do in respect of their own beneficial holdings.

Remuneration Report

 

Introduction

Woburn Energy, as an AIM listed company rather than a fully listed company, is not required to comply with Directors' Remuneration Report Regulations but it is committed to the highest standards of Governance.

Remuneration Committee

The purpose of the Remuneration Committee is to make recommendations to the Board on an overall remuneration policy for Executive Directors in order to attract, retain and motivate high quality executives capable of achieving the Company's objectives.  The Company's Remuneration Committee currently comprises H Hashwani (Chairman), A Kemal and R Kanga.

Remuneration packages

Remuneration packages in 2011 consisted of base salaries, benefits and a pension contribution for J Cubitt.  There were no performance related bonuses, long term incentive awards or health benefits. J Cubitt left the Company on 31 December 2011 and there are currently no remuneration packages for any Director.

Remuneration policy

Woburn Energy aligns any remuneration between the interests of shareholders and executives.

Directors' remuneration and service contracts

There are were no service contracts with the Directors in 2011 other than an employment contract between J Cubitt and Woburn Energy Plc.  Under this service contract J Cubitt was paid an annual salary of £123,600 plus a pension contribution by the Company of £18,000 in 2010 and his employment was subject to a 30 days termination period. J Cubitt left the Company on 31 December 2011. There are currently no service contracts in place.

Directors' interests

The beneficial interests in the Company's shares of the Directors and their families were as follows:

 

At 31 December

2011 & 1 June 2012

At 31 December 2010

 

 

Ordinary shares of 1p each

Ordinary shares of 1p each

K Ahmed

-

-

A B Baldry

72,222

72,222

H A Hashwani *

200,000,000

200,000,000

R B Kanga

-

-

A Kemal

-

-

 

None of the Directors had any interests in the share capital of any of the Company's subsidiary undertakings at 31 December 2011 or 31 December 2010.

* K Ahmed, H Hashwani, R Kanga and A Kemal are Directors appointed by Cetus Investment Resources Inc., which owns 86.15% of the Company's shares, and which is a wholly-owned subsidiary of Zaver Petroleum International Inc ("Zaver"), which is itself a wholly-owned subsidiary of United Paramount Holding Corp. Mr Hashwani is beneficially interested in the entire issued share capital of United Paramount Holding Corp and is therefore the ultimate controlling party.  Zaver's principal asset is its 55% interest in Ocean Pakistan Limited ("OPL").  R Kanga is a Director of OPL.

Directors' remuneration

Remuneration of Directors was as follows:

 

Fees/basic salary*

Pension contributions & other benefits*

2011

Total

2010

Total

 

$

$

$

$

Executive

 

 

 

 

J M Cubitt

161,193

90,148

251,341

229,480

Non-Executive

 

 

 

 

A B Baldry

64,000

-

64,000

62,000

Total

225,193

90,148

315,341

291,480

*Adjusted for amounts paid to personal pension scheme via salary sacrifice and for benefits  

There were no contracts existing during or at the end of the year in which a Director was or is materially interested, save as set out in the Related Parties Note 20 in the financial statements. Directors' remuneration shown comprises all of the fees, salaries and other benefits and emoluments paid to Directors.  Pension contributions were to a privately administered pension plan in respect of J Cubitt, who was a Director of the Company during the year.  The Group does not operate a pension scheme for any Director or employee. All other directors in the periods waived their rights to Directors' Fees.

Audit Committee

The Audit Committee is responsible for maintaining an appropriate relationship with the Group's external auditors and for monitoring the Group's internal financial controls and the audit process.  Its duties also include approving the Group's accounting policies and reviewing the interim and the annual financial statements before submission to the Board.  It aids the Board in seeking to ensure that the financial and non-financial information supplied to shareholders presents a balanced assessment of the Group's position.

The Audit Committee reviews the objectivity and independence of the external auditors and also considers the scope of their work and fees paid for audit and non-audit services. The Audit Committee has unrestricted access to the Group's documents and information, as well as to employees of the Group and the external auditors.  Members of the Committee may, in pursuit of their duties, take independent professional advice on any matters at the Group's expense.  The Committee Chairman reports the outcome of meetings to the Board.

The members of the Audit Committee who held office during the year remained K Ahmed (Chairman), T Baldry and R Kanga. Subsequent to K Ahmed becoming Acting Managing Director on 1 January 2012, R Kanga became Chairman of the Committee and H Hashwani joined the Committee. Membership of the Audit Committee is determined by the Board.  Its terms of reference are set by the Board and are modelled closely on the provisions of the Combined Code.

Acquisition of new projects

Prior to acquiring new projects, the Company initially evaluates both the political and legal risk associated with the country in which the project is located.  If either of these are considered too much of a concern, no further evaluation is undertaken.  The Board, as a whole, has elected at this point in the Company's history, not to seek projects located in basins which do not have significant hydrocarbon systems.  Final sign-off on new acquisitions is only taken following technical evaluation of the available data.  Initially, areas are evaluated by senior in-house staff, technical consultants, and where warranted, by expert international consulting groups.  The Acting Managing Director then reviews all information and presents to the full Board for approval.  In addition, no formal agreements contracting the Company to a project area are signed without advice from legal and other advisers.

Changes in share capital

Details of movements in share capital during the year are set out in Note 16 to these financial statements.

Statement of responsibilities of those charged with governance

The Directors are responsible for preparing the financial statements in accordance with applicable law and International Financial Reporting Standards as adopted by the European Union ("IFRS").

Company law requires the Directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company and of the Group and of the profit or loss of the Group for that period.  In preparing these financial statements, the Directors are required to:

·       select suitable accounting policies and then apply them consistently;

·       make judgements and estimates that are reasonable and prudent;

·       state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

·       prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.

The Directors confirm that the financial statements comply with the above requirements.

The Directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any time the financial position of the Company and of the Group and enable them to ensure that the financial statements comply with the Companies Act 2006.  They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The Directors are responsible for the maintenance and integrity of the corporate and financial information on the Company's website.  Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions.

Statement of disclosure to auditor

So far as each of the Directors at the time of approval of the report are aware there is no relevant audit information of which the Company's auditors are unaware and the Directors have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditors are aware of that information.

Auditors

In accordance with Section 489 of the Companies Act 2006, Resolution 4 in the Notice of AGM proposes that UHY Hacker Young LLP be re-appointed as auditors of the Company and that the Directors be authorised to fix their remuneration.

On behalf of the Board

K Ahmed

Acting Managing Director

1 June 2012

 

DIRECTORS' BIOGRAPHIES

 

Arif Kemal (70)

Chairman, Non-Executive Director

Arif Kemal has over 49 years experience in exploration, production and management of oil and gas resources.  He has a BSc Hons in Geology and an MSc in Petroleum Geology and attended a post-graduate training course in Petroleum Engineering at the Institute Français du Pétrole, France.  Mr Kemal is a member of the Society of Petroleum Engineers, the American Association of Petroleum Geologists and the Houston Geological Society.

Mr Kemal is a member of the Company's Remuneration Committee.

 

Kamran Ahmed (49)

Acting Managing Director

Kamran Ahmed is a graduate of Ithaca College, Cornell University, with 29 years experience in banking and oil and gas.  He has worked with multinational financial institutions and oil and gas companies, including Shell, Mobil, Bankers Equity and Merrill Lynch.  In 2002 he joined Orient Petroleum International Inc and is now based in the UK as Director of Orient Petroleum (UK) Limited, a wholly-owned subsidiary of OPL.

 

Antony Brian Baldry (61)

Deputy Chairman, Independent Non-Executive Director

Tony Baldry is the Conservative Member of Parliament for Banbury (North Oxfordshire).  He has been an MP for nearly 30 years and held various ministerial posts between 1990 and 1997.  These included Parliamentary Under-Secretary of State at the Department of Energy where, alongside John Wakeham, he oversaw the privatisation of the UK electricity industry.

 

A practising barrister, Tony is also a director of a number of public and private companies.  Tony has a wealth of experience of giving strategic and financial advice to growing companies across a range of sectors, including natural resources.

Mr Baldry is a member of the Company's Audit Committee.

 

Hasan Ali Hashwani (34)

Non-Executive Director

Hasan Hashwani has over 14 years international experience in the oil and gas industry.  He has held various management positions during his career and serves on the board of several private companies. Mr Hashwani studied business administration at the University of Phoenix and attended the Young Managers Programme at INSEAD, France. He is currently pursuing his EMBA.

Mr Hashwani is the Chairman of the Company's Remuneration Committee and a member of the Company's Audit Committee.

 

Rustom Bejon Kanga FCA (57)

Non-Executive Director

Rustom Kanga has over 28 years diverse experience in business and commerce.  He has been involved in the upstream oil and gas industry since 1996 and has valuable experience in starting new ventures, acquisitions, divestitures and financing.  He is a Fellow of the Institute of Chartered Accountants in England and Wales and serves on the board of several private companies.

Mr Kanga is Chairman of the Company's Audit Committee and is a member of the Remuneration Committee.

 

INDEPENDENT AUDITORS' REPORT

TO THE SHAREHOLDERS OF WOBURN ENERGY PLC

 

We have audited the Group and Parent Company financial statements of Woburn Energy plc for the year ended 31 December 2011 (the "financial statements"), which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows, together with the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

 

This report is made solely to the Company's members, as a body, in accordance with part 3 of Chapter 16 of the Companies Act 2006.  Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose.  To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

 

Respective responsibilities of directors and auditors

As explained more fully under 'Statement of Responsibilities of those charged with Governance' on page 13 the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view of the Group's affairs.

 

Our responsibility is to audit the financial statements in accordance with relevant law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB) Ethical Standards for auditors. 

 

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's web-site at www.frc.org.uk/apb/scope/private.cfm

 

Opinion on financial statements

In our opinion:

-     the financial statements give a true and fair view of the state of the Group's and the Parent Company's affairs as at 31 December 2011 and of the Group's loss for the year then ended;

-     the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union; and

-     the Parent Company financial statements have been properly prepared in accordance with the International Financial Reporting Standards as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

-     the financial statements have been prepared in accordance with the requirements of the Companies Act 2006. 

 

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements. 

 

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

-     adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-     the parent company financial statements are not in agreement with the accounting records and returns; or

-     certain disclosures of directors' remuneration specified by law are not made; or

-     we have not received all the information and explanations we require for our audit.

 

 

 

 

 

Colin Wright (Senior Statutory Auditor)  

For and on behalf of UHY Hacker Young LLP  

Chartered Accountants 
Statutory Auditor

 

Quadrant House

4 Thomas More Square

London  E1W 1YW

 

1 June 2012

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2011

 


Year ended

31 December 2011


Year ended

31 December 2010


Notes

$


$






Revenue

4

-


308,506






Operating expenses


(235,017)


(1,594,596)



__________


__________






Gross loss


(235,017)


(1,286,090)



__________


__________






Administrative expenses


(1,407,471)


(2,178,090)



__________


__________






Group operating loss

5

(1,642,488)


(3,464,180)






Bank interest receivable


21


264

Interest payable

14(c)

(152,968)


(270,051)



__________


__________






Loss before taxation


(1,795,435)


(3,733,967)






Taxation

6

-


-



__________


__________






Loss for the period from continuing operations


(1,795,435)


(3,733,967)






Discontinued operations





(Loss)/profit from discontinued operations

7

(6,316)


485,763



__________


__________






Total comprehensive loss for the period


 (1,801,751)


(3,248,204)



___________


___________






Total comprehensive loss attributable to:





Equity holders of the Parent Company


 (1,561,148)


(2,468,483)

Minority interest

17

(240,603)


(779,721)



__________


__________








(1,801,751)


(3,248,204)



___________


___________

Loss per share (cents):  Continuing operations





Basic & diluted

8

(0.67)


(1.27)



___________


___________

Loss per share (cents): Discontinued operations





Basic & diluted

8

-


0.21



___________


___________

Loss per share (cents):  Discontinued and continuing operations





Basic & diluted

8

(0.67)


(1.06)



___________


___________

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011

 


Notes

31 December 2011

31 December 2010



$

$

$

$

ASSETS












Non-current assets






Intangible assets

11


-


7,951,889







Current assets






Asset held for resale

11

8,121,575


-


Receivables

13

1,136,019


122,574


Cash and cash equivalents

18

824,993


1,360,698




__________


__________





10,082,587


1,483,272




__________


__________

 

Total Assets



10,082,587


9,435,161




__________


__________

LIABILITIES












Current liabilities






Trade and other payables

14


(8,436,727)


(5,357,810)







Non-current liabilities






Provision for decommissioning

15


(204,164)


(207,227)




__________


__________







Total Liabilities



(8,640,891)


(5,565,037)




__________


__________

 

Net Assets



1,441,696


3,870,124




__________


__________

 

EQUITY












Capital and reserves






Share capital

16


13,596,651


13,596,651

Share premium



17,815,055


17,815,055

Retained losses



(31,213,320)


(29,652,172)




__________


__________

Shareholders' Funds



198,386


1,759,534

Minority interests

17


1,243,310


2,110,590




__________


__________

 

 



1,441,696


3,870,124




__________


__________







These financial statements were approved by the Board of Directors on 1 June 2012 and signed on its behalf by:

 

 

 

Director - K Ahmed

 

Company Registration Number: 04128401

 

 

COMPANY STATEMENT OF FINANCIAL POSITION

AS AT 31 DECEMBER 2011

 

 


Notes

31 December 2011

31 December 2010



$

$

$

$

ASSETS












Non-current assets






Investments in subsidiaries

12


3,510,979


4,163,283













Current assets






Receivables

13

118,575


73,591


Cash and cash equivalents

18

824,288


80,265




__________


__________





942,863


153,856




__________


__________

 

Total Assets



4,453,842


4,317,139




__________


__________

LIABILITIES












Current liabilities






Trade and other payables

14


(2,365,164)


(851,437)




__________


__________

 

Total Liabilities



(2,365,164)


(851,437)




__________


__________

 

Net Assets



2,088,678


3,465,702




__________


__________







EQUITY












Capital and reserves attributable to equity holders






Share capital

16


13,596,651


13,596,651

Share premium



17,815,055


17,815,055

Retained losses



(29,323,028)


(27,946,004)




__________


__________

 

Total Equity



2,088,678


3,465,702




__________


__________







These financial statements were approved by the Board of Directors on 1 June 2012 and signed on its behalf by:

 

 

 

Director - K Ahmed

 

Company Registration Number: 04128401

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2011

 



Share Capital

Share Premium

 

Share-based Payments Reserve

Retained Losses

Total

Minority Interest

Total Equity


$

$

$

$

$

$

$

 









 

Balance at 1 January 2010

13,596,651

17,815,055

190,800

(27,374,489)

4,228,017

2,890,311

7,118,328

Loss for 2010

-

-

-

(2,468,483)

(2,468,483)

(779,721)

(3,248,204)

Transfer on expiry of warrants

-

-

(190,800)

190,800

-

-

-









 

Balance at 31 December 2010

13,596,651

17,815,055

-

(29,652,172)

1,759,534

2,110,590

3,870,124

 

Return of capital (Note 12)

-

-

-

-

-

(626,677)

(626,677)

 

Loss for 2011

-

-

-

(1,561,148)

(1,561,148)

(240,603)

(1,801,751)

 









 

Balance at 31 December 2011

13,596,651

17,815,055

-

(31,213,320)

198,386

1,243,310

1,441,696









 

 

COMPANY STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2011

 


Share Capital

Share Premium

Share-based Payments Reserve

Retained Losses

Total


$

$

$

$

$





Balance at 1 January 2010

13,596,651

17,815,055

190,800

(26,513,871)

5,088,635

Transfer on expiry of warrants

-

-

(190,800)

190,800

-

Loss for 2010

-

-

-

(1,622,933)

(1,622,933)







Balance at 31 December 2010

13,596,651

17,815,055

-

(27,946,004)

3,465,702

Loss for 2011

-

-

-

(1,377,024)

(1,377,024)







Balance at 31 December 2011

13,596,651

17,815,055

-

(29,323,028)

2,088,678







 

 


CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2011

 

 

 

 

 

 

Year ended

31 December 2011

 

 

 

Year ended

31 December 2010


$

$

Cash flows from operating activities



Group operating loss from continuing operations

(1,642,488)

(3,464,180)

Group operating loss from discontinued operations

(6,316)

-

Adjustments for items not requiring an outlay of funds:



      Impairment of exploration assets - discontinuing operations

-

4,274,000

Write-back of loan - discontinuing operations

-

(4,274,000)

Unwinding of discount on abandonment provision

-

13,940

Foreign exchange differences

(28,063)

7,018


___________

___________




Operating loss before changes in working capital

(1,676,867)

(3,443,222)

(Increase)/decrease in receivables

(1,013,445)

791,091

Increase in trade and other payables

2,236,949

1,535,584


___________

___________




Net cash used in operating activities

(453,363)

(1,116,547)


___________

___________

Investing activities



Funds used for exploration and evaluation

-

(7,841)

Interest received

21

264

Funds used for asset held for resale

(169,686)

-

Abandonment costs paid

-

(43,856)

Capital returned to minority interest

(626,677)

-


___________

___________




Net cash used in investing activities

(796,342)

(51,433)


___________

___________

Financing activities



Loan from controlling shareholder

714,000

312,000


___________

___________




Net cash from financing activities

714,000

312,000


___________

___________




Decrease in cash and cash equivalents

(535,705)

(855,980)

Cash and cash equivalents at beginning of period

1,360,698

2,216,678


___________

___________




Cash and cash equivalents at end of period

824,993

1,360,698


___________

___________


COMPANY STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2011

 

 

 

 

 

 

Year ended

31 December 2011

 

 

 

Year ended

31 December 2010





$

$

Cash flows from operating activities



Company operating loss

(1,377,045)

  (2,108,960)

Adjustments for items not requiring an outlay of funds:



Impairment of loans/capital due from subsidiary undertakings

-

243,790

Foreign exchange adjustments on translations

(25,000)

-

     Impairment of exploration assets - discontinuing operations

-

4,274,000

     Write-back of loan - discontinuing operations

-

(4,274,000)


___________

___________




Operating loss before changes in working capital

(1,402,045)

(1,865,170)

Increase in receivables

(44,984)

(44,023)

Increase in trade and other payables

824,727

457,540


___________

___________




Net cash used in operating activities

(622,302)

(1,451,653)


___________

___________

Investing activities



Loans granted to subsidiary undertakings

-

(49,293)

Return of capital from subsidiary undertaking

652,304

-

Funds used for exploration and evaluation

-

(7,841)

Funds used for abandonment

-

(43,856)

Interest received

21

264


___________

___________




Net cash from/(used in) investing activities

652,325

(100,726)


___________

___________

Financing activities



Loan from controlling shareholder

714,000

312,000


___________

___________




Net cash from financing activities

714,000

312,000


___________

___________




Increase/(decrease) in cash and cash equivalents

744,023

(1,240,379)

Cash and cash equivalents at beginning of period

80,265

1,320,644


___________

___________




Cash and cash equivalents at end of period

824,288

80,265

 

 

 

 

 

 

 

NOTES TO THE FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2011

 

___________

___________

1.             Authorisation of financial statements

Woburn Energy Plc is a public limited company incorporated in England and Wales whose shares are traded on AIM, a market operated by the London Stock Exchange.  The principal activities of the Company and its subsidiaries ("the Group") are exploration for, and development of, oil and gas.

 

The Group's financial statements for the year ended 31 December 2011 (comparatives: 12 months ended 31 December 2010) were authorised for issue by the Board of Directors on 1 June 2012 and were signed on the Board's behalf by K. Ahmed.

 

2.         Adoption of International Financial Reporting Standards

The Company's and Group's financial statements for the year ended 31 December 2011 have been prepared in accordance with International Financial Reporting Standards ("IFRS") and IFRIC (International Financial Reporting Interpretations Committee) interpretations as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.  

 

3.         Significant accounting policies

The principal accounting policies applied in the preparation of these financial statements are set out below.  These policies have been consistently applied to all the years presented, unless otherwise stated below.

 

3.1       Basis of preparation

The financial statements are prepared on a going concern basis, under the historical cost convention and in accordance with International Financial Reporting Standards, as adopted by the European Union, including IFRS6 'Exploration for and Evaluation of Mineral Resources' and in accordance with the Companies Act 2006.  The Parent Company's financial statements have also been prepared in accordance with IFRS and the Companies Act 2006.

 

3.2      Going concern

During the year ended 31 December 2011 the Group made a loss of $1,801,751 (2010: $3,248,204), of which $1,561,148 was attributable to equity holders of the parent company and $240,603 to the Minority Interest (2010: $2,468,483 and $779,721 respectively).  At the year-end date, the Group had net assets of $1,441,696 (2010: $3,870,124) the principal asset being $8,121,575 of unevaluated exploration and evaluation assets. Of these net assets $198,386 (2010: $1,759,534) was attributable to equity shareholders and $1,243,310 (2010: $2,110,590) to the 49% minority interest in Las Quinchas Resources Corp.  Net current assets were $1,645,860 (2010: net current liabilities $3,874,538).

 

On 1 June 2012, the Company announced that its 51% owned subsidiary, LQRC, had entered into a conditional Assignment Agreement for the sale of its 50 per cent. benficial interest in the Las Quinchas Association Contract. Woburn's share of the net disposal proceeds is estimated to amount to approximately US$4.5 million after expenses and settling existing liabilities of LQRC. The proposed completion of the sale by LQRC is conditional, inter alia, on the approval of Shareholders at a general meeting of the Company to be held on 21 June 2012 and Ecopetrol consent. Full details are set out in a circular to shareholders.

 

Prior to receipt of funds from the sale of the Colombian beneficial interests or from other sources, the Company had been reliant on the on-going financial support of Cetus, to meet its operating costs. The cash proceeds of the disposal enables LQRC and Woburn to settle all outstanding liabilities owed both to the Las Quinchas Association Contract operator, Pacific Rubiales, and the LQRC minority shareholder, PetroMagdalena. Following the settlement of all outstanding management fees and other administrative costs owed by Woburn to PetroMagdelena, Woburn's expenses and costs of the disposal and repayment in full of the current Cetus Loan, Woburn's share of the net proceeds of the disposal are estimated to amount to approximately US$3.4 million, which will provide the Company with the cash resources to pursue new investment opportunities and to provide working capital for the day-to-day business of the Company. A net amount of approximately $0.69 million had been received by the end of 2011. The remaining funds are expected to be received in full by the Company by the end of May 2013 with a net $0.16 million by the end of November 2012, $2.29 million by the end of February 2013 and $0.27 million by the end of May 2013.

 

On the basis that the Resolutions are passed by the General Meeting of shareholders to be held on 21 June 2012 and for which irrevocable undertakings to vote in favour have been received for over 86% of the shares in issue, and the sale proceeds are received as expected, the Directors believe that the Group will have appropriate levels of financing and that the Group will have sufficient cash to fund its activities and to continue its operations for the foreseeable future and for the Group to continue to meet its liabilities as they fall due, and for at least the next twelve months from the date of approval of these financial statements.  The financial statements have, therefore, been prepared on the going concern basis.

3.3       Adoption of new and revised International Financial Reporting Standards

Other than as set out below, no new IFRS standards, amendments or interpretations became effective in 2011 which had a material effect on these financial statements:

Standard

Description

Effective Date

IAS 24

Revised - Related Party Disclosures

1 January 2011

IFRIC 14

Amendment - IAS 19 Limited on a Defined Benefit Asset

1 January 2011

At the date of approval of these financial statements, the following IFRS Standards and Interpretations, which have not been applied in these financial statements, were in issue and adopted by the European Union but not yet effective. These new Standards, Amendments and Interpretations are effective for accounting periods beginning on or after the dates shown below:

IFRS 7

Amendment - Transfer of Financial Assets

1 July 2011

IAS 12

Deferred Tax Recovery of Underlying Assets

1 January 2012

IFRS 9

Financial Instruments

1 January 2013

3.4       Basis of consolidation

The consolidated financial statements incorporate the accounts of the Company and its subsidiaries and have been prepared by using the principles of acquisition accounting ("the purchase method") which includes the results of the subsidiaries from their date of acquisition.  Intra-group sales, profits and balances are eliminated fully on consolidation.

 

3.5       Goodwill

Goodwill is the difference between the amount paid on the acquisition of the subsidiary undertakings and the aggregate fair value of their separable net assets - of which oil and gas exploration expenditure is the primary asset.  Goodwill is capitalised as an intangible fixed asset and in accordance with IFRS3 'Business Combinations' is not amortised but tested for impairment annually and when there are any indications that its carrying value is not recoverable.  As such, goodwill is stated at cost less any provision for impairment in value.  If a subsidiary undertaking is subsequently sold, goodwill arising on acquisition is taken into account in determining the profit and loss on sale.

 

3.6       Oil and Gas Exploration and Evaluation Expenditure

All exploration and evaluation costs incurred or acquired on the acquisition of a subsidiary are accumulated in respect of each identifiable project area.  These costs, which are classified as intangible assets are only carried forward to the extent that they are expected to be recouped through the successful development of the areas or where activities in the area have not yet reached a stage which permits reasonable assessment of the existence of economically recoverable reserves (successful efforts).  Pre licence/project costs are written off immediately.  Other costs are written off unless commercial reserves have been established or the determination process has not been completed.  Thus accumulated costs in relation to an abandoned area are written off in full against profit in the year in which the decision to abandon the area is made. 

 

When production commences the accumulated costs for the relevant area of interest are transferred from intangible assets to tangible assets as 'Developed Oil and Gas Assets' and amortised over the life of the area according to the rate of depletion of the economically recoverable costs.

 

3.7       Impairment of Oil and Gas Exploration and Evaluation Expenditure and Related Goodwill

The carrying value of unevaluated areas and the related goodwill is assessed on at least an annual basis or when there has been an indication that impairment in value may have occurred.  The impairment of unevaluated prospects is assessed based on the Directors' intention with regard to future exploration and development of individual significant areas and the ability to obtain funds to finance such exploration and development.

 

3.8       Decommissioning costs

Where a material liability for the removal of production facilities and site restoration at the end of the field life exists, a provision for decommissioning is recognised.  The amount recognised is the present value of estimated future expenditure determined in accordance with local conditions and requirements.  An asset of an amount equivalent to the provision is also created and depreciated on a unit of production basis.  Changes in estimates are recognised prospectively, with corresponding adjustments to the provision and the associated asset.

 

3.9       Investments

The Parent Company's investments in subsidiary undertakings are stated at cost less provision for impairment in the Company's balance sheet.

 

3.10     Foreign currency translation

            (i) Functional and presentational currency

Items included in the Group's financial statements are measured using the currency of the primary economic environment in which the Group operates ("the functional currency").  The Company's functional currency is considered to be the US Dollar. The effective exchange rate at 31 December 2011 £1 = $1.54 (31 December 2010 £1= $1.55).

 

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.  Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the income statement.

 

Transactions in the accounts of individual Group companies are recorded at the rate of exchange ruling on the date of the transaction.  Monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the balance sheet date.  All differences are taken to the income statement.

 

3.11     Deferred taxation

Deferred income taxes are provided in full, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements.  Deferred income taxes are determined using tax rates that have been enacted or substantially enacted and are expected to apply when the related deferred income tax asset is realised or the related deferred income tax liability is settled.

 

The principal temporary differences arise from depreciation or amortisation charged on assets and tax losses carried forward.  Deferred tax assets relating to the carry forward of unused tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

 

3.12     Cash and cash equivalents

Cash and cash equivalents are carried in the balance sheet at cost and comprise cash in hand, cash at bank, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less.  Bank overdrafts are included within borrowings in current liabilities on the balance sheet.  For the purposes of the cash flow statement, cash and cash equivalents also include the bank overdrafts.

 

3.13     Receivables

Receivables are carried at original invoice amount less provision made for impairment of these receivables.  A provision for impairment of receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables.  The amount of the provision is the difference between the assets' carrying amount and the recoverable amount.  Provisions for impairment of receivables are included in the income statement.

 

3.14     Payables

Payables are recognised initially at fair values and subsequently measured at amortised cost using the effective interest method.

 

3.15     Share capital

Ordinary shares are classified as equity.  Incremental costs directly attributable to the increase of new shares or options are shown in equity as a deduction from the proceeds.

 

 

3.16     Critical accounting judgements and estimates

The preparation of financial statements in conformity with International Financial Reporting Standards requires the use of accounting estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting year.  Although these estimates are based on management's best knowledge of current events and actions, actual results ultimately may differ from those estimates.  IFRS also require management to exercise its judgement in the process of applying the Group's accounting policies.

 

The prime areas involving a higher degree of judgement or complexity, where assumptions and estimates are significant to the financial statements, are as follows:

 

Impairment of capitalised exploration and evaluation expenditure ("E&E")

The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including i) likely commerciality of assets, ii) future revenues and costs pertaining and the discount rate to be applied for the purpose of deriving a recoverable value, and iii) the recoverability of the E&E asset through sale. Factors which could impact the future recoverability include the level of proved, probable and inferred resources, future technological changes which could impact the cost of drilling and extraction, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices.

 

            To the extent that capitalised exploration evaluation expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this      determination is made.

 

4.         Segmental reporting

 

IFRS8 "Operating Segments" requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker ("CODM"), which is the Board of Directors. The segmental reporting bases set out below for the Group for 2011 are consistent with those which are reported to the CODM in 2010.

 

 

2011

LQRC*

$

Corporate

$

Total

$

 

Losses




Revenue

-

-

-

Operating expenses

(235,017)

-

(235,017)


__________

__________

__________

Gross loss

(235,017)

-

(235,017)

Administrative costs

(103,042)

(1,304,429)

(1,407,471)

Net interest

(152,968)

21

(152,947)

Loss from discontinued operations

-

 

(6,316)

 

(6,316)

 


__________

__________

__________

Loss for the period

(491,027)

(1,310,724)

(1,801,751)

Minority interest

240,603

-

240,603


__________

__________

__________

Loss for the period: equity holders

 

(250,424)

___________

 

(1,310,724)

___________

 

(1,561,148)

___________

 

Assets and liabilities




Segment assets:




Current assets

9,139,724

942,863

10,082,587

Segment liabilities:




Current liabilities

(7,315,556)

(1,121,171)

(8,436,727)

Non-current liabilities

(204,164)

-

(204,164)

Minority interest

(1,243,310)

-

(1,243,310)


__________

__________

__________

Equity holders share of total net assets

376,694

___________

(178,308)

___________

198,386

___________

 

* Las Quinchas Resource Corporation ("LQRC") (Note 12).  The Minority Interest owns 49% of LQRC in both periods (Note 17). Administrative costs include management fees relating to LQRC charged directly to the Company by the Minority Interest. Inter-company balances between the Company and LQRC are excluded from this analysis.

 

2010

LQRC*

$

North Sea

$

Corporate

$

Total

$

 

Losses





Revenue

308,506

-

-

308,506

Operating expenses

(1,594,596)

-

-

(1,594,596)


__________

__________

__________

__________

Gross loss

(1,286,090)

-

-

(1,286,090)

Administrative costs

(182,418)

-

(1,995,672)

(2,178,090)

Net interest

(270,051)

-

264

(269,787)

Profit from discontinued operations

 

-

 

485,763

 

-

 

485,763


__________

__________

__________

__________

Loss for the period

(1,738,559)

485,763

(1,995,408)

(3,248,204)

Minority interest

779,721

-

-

779,721


__________

__________

__________

__________

(Loss)/profit for the period: equity holders

 

(958,838)

 

485,763

 

(1,995,408)

 

(2,468,483)

 

Assets and liabilities

___________

___________

___________

___________

Segment assets:





Non-current assets

7,951,889

-

-

7,951,889

Current assets

1,328,725

-

154,547

1,483,272

Segment liabilities:





Current liabilities

(4,586,673)

-

(771,137)

(5,357,810)

Non-current liabilities

(207,227)

-

-

(207,227)

Minority interest

(2,110,590)

-

-

(2,110,590)


__________

__________

__________

__________

Equity holders share of total net assets

 

2,376,124

 

-

 

(616,590)

 

1,759,534


___________

___________

___________

___________

 

* Las Quinchas Resource Corporation ("LQRC") (Note 12).  The Minority Interest owns 49% of LQRC in both periods (Note 17). Administrative costs include management fees relating to LQRC charged directly to the Company by the Minority Interest. Inter-company balances between the Company and LQRC are excluded from this analysis.

 

 

5.         Group operating loss

 

The Group's operating loss is stated after charging/(crediting):

 


2011

2010


$

$




Employee costs  (Note 10)

408,209

512,582

Rental of properties

117,129

136,541

Foreign exchange (gains)/losses

(32,168)

45,157

Auditors' remuneration

- audit services

20,000

23,250


- non-audit services

19,700

132,469



___________

___________

 

Non-audit fees consist of $5,200 (2010: $6,850) for tax compliance services, $1,600 (2010:  $9,300) for reviewing the Group's half yearly results and the remainder in relation to a potential acquisition.

 

6.         Taxation

 


2011

2010


$

$

Current Tax



UK corporation tax

-

-

Overseas tax

-

-

Deferred tax

-

-


____________

____________


-

-


____________

____________




 

The tax charge can be reconciled to the loss for the year as follows:

 


2011

2010


$

$

 

Group loss before tax

(1,801,751)

(3,733,967)


___________

___________

Tax at the standard rate of UK corporation tax of 26%

(2010: 28%)

(468,455)

(1,045,511)




Effects of:



Expenses not deductible for tax purposes

34,039

2,800

Abandonment costs paid

-

(12,280)

Discontinued operations

19,741

(2,195)

Temporary timing differences

-

(47,000)

Effect of differing tax rates

(43,000)

(80,000)

Tax losses carried forward

457,675

1,184,186


___________

___________

Total current tax charge

-

-


___________

___________

 

At the year-end date the Group had unused tax losses of $17.4 million (2010: $13.5 million) available for offset against suitable future profits. A deferred tax asset has not been recognised in respect of such losses due to the uncertainty of future profit streams.  The contingent deferred tax asset at 26% is estimated to be $3.6 million (2010: $3.5 million).

 

7.         Discontinued operations

 

Discontinued operations in the year ended 31 December 2011 consist of Black Rock Oil & Gas Sucursal, Colombia, which was placed into liquidation on 14 February 2011 and in the year ended 31 December 2010 they consisted of the relinquishment of Licence P1147 in the North Sea. The post-tax loss from the discontinued operations is classified as a single line on face of the consolidated statement of comprehensive income.

 


2011

2010


$

$




 

Impairment of exploration assets - discontinuing operations

-

(4,274,000)

 

Write-back of loan - discontinuing operations

-

4,274,000

 

Reduction of provision for decommissioning (Note 15)

-

493,604

 

Loss on disposal

(6,316)

(7,841)

 


___________

___________

 

(Loss)/profit from discontinued operations

(6,316)

485,763

 


___________

___________

 




 

 

8.         Loss per share


 

2011

 

2010


$

$

 

Total comprehensive loss attributable to equity shareholders - Continuing

 

(1,554,832)

 

(2,954,246)

Total comprehensive loss attributable to equity shareholders - Continuing and Discontinued

(1,561,148)

(2,468,483)

Weighted average number of shares in issue

232,160,407

232,160,407


___________

___________


 

Cents

 

Cents

Basic loss per share - Continuing

(0.67)

(1.27)

Basic loss per share - Continuing and Discontinued

(0.67)

(1.06)

Basic earnings per share - Discontinued

-

0.21


___________

___________

 

The diluted loss per share has been calculated using a weighted average number of shares in issue and to be issued of 232,160,407 (2010: 232,160,407).  The diluted loss per share has been kept the same as the basic loss per share as the conversion of share warrants decreases the basis loss per share, thus being anti-dilutive (Note 16).

 

9.         Parent Company income statement

                                                                                  

In accordance with the provisions of the Section 408 of the Companies Act 2006, the Parent Company has not presented an income statement.  The loss for the year ended 31 December 2011 of $1,377,024 (2010:  $1,622,933) has been included in the consolidated statement of comprehensive income.

 

 

10.       Employee costs

 

The employee costs of the Group, including Directors' remuneration, are as follows:

 


2011

 

2010


$

$




Wages, salaries and fees

295,425

396,867

Social security costs

33,814

45,263

Pension costs

78,971

70,452


___________

___________





408,210

512,582


___________

___________

 

The number of employees at 31 December 2011 (including Directors) was: 6 Directors and 1 staff. (2010: 6 Directors and 1 staff).

 

The above employee costs include the Company's Directors.  Further details of their remuneration are shown below and in the Directors' Report:

 


 2011

2010


$

$




Wages, salaries and fees

225,193

230,653

Social security costs

26,790

25,816

Pension contributions

78,971

58,827


___________

___________





330,954

315,296


___________

___________

 

11.        Intangible assets

Group:

Exploration and evaluation assets

Goodwill

Total


$

$

$

Cost




At 31 December 2009

16,711,430

1,006,794

17,718,224

Additions in 2010

540,976

-

540,976

Discontinued operations - North Sea

(6,121,951)

-

(6,121,951)

Loss on discontinued operations (Note 7)

(7,841)

-

(7,841)


___________

___________

___________

At 31 December 2010

11,122,614

1,006,794

12,129,408

Additions in 2011

169,686

-

169,686

Reclassified to Assets Held for Resale (see below)

 

(11,292,300)

 

-

 

(11,292,300)


___________

___________

___________





At 31 December 2010

-

1,006,794

1,006,794


___________

___________

___________

Amortisation and impairment




At 31 December 2009

(5,018,676)

(1,006,794)

(6,025,470)

Discontinued operations - North Sea

1,847,951

-

1,847,951


___________

___________

___________





At 31 December 2010

(3,170,725)

(1,006,794)

(4,177,519)

Reclassified to Asset Held for Resale (see below)

 

3,170,725

 

-

 

3,170,725


___________

___________

___________





At 31 December 2011

-

(1,006,794)

(1,006,794)


___________

___________

___________

Net book value




At 31 December 2011

-

-

 -


___________

___________

___________





At 30 December 2010

7,951,889

-

7,951,889


___________

___________

___________

 

The net book value of the exploration and evaluation assets can be analysed in the following geographical areas:


2011

2010


$

$




Europe

-

-

South America

-

7,951,889


___________

___________


-

7,951,889


___________

___________




Goodwill arose on the acquisition of the Company's subsidiary undertakings. Goodwill was fully impaired in prior years.

 

On 6 June 2011, the Company announced it was seeking a buyer for the Colombian beneficial interests held by its 51% owned subsidiary, Las Quinchas Resource Corporation ("LQRC), or failing that, for its shareholding in LQRC. In accordance with IFRS 5 ("Non-Current Assets Held for Sale and Discontinued"), the book values of the intangible exploration and evaluation assets and their results from that date, a total of $8,121,575 are shown in the Statement of Financial Position as "Asset Held For Sale" in Current Assets.  LQRC has no contractual future exploration expenditure commitments.

As set out in notes 3.2 and 22, on 1 June 2012, the Company announced that LQRC had entered into a conditional Assignment Agreement for the sale of its 50 per cent. beneficial interest in the Las Quinchas Association Contract. The total cash consideration to be received by LQRC from the purchaser amounts to $16 million. The proposed completion of the sale by LQRC is conditional, inter alia, on the approval of Shareholders at a general meeting of the Company to be held on 21 June 2012 and Ecopetrol approval.

The Directors have therefore concluded on the basis of the information presently available to them that no impairment to the book value of the exploration and evaluation assets at the year end is required.

12.      Investments in subsidiary undertakings


Loans to subsidiary undertakings

Shares in subsidiary undertakings

Total


$

$

$

Company








Cost




At 31 December 2009 and 2010

2,747,754

11,870,353

14,618,107





Disposals in 2011 (see (a) below)

(2,747,754)

(5,000)

(2,752,754)

Return of capital (see (b) below)

-

(652,304)

(652,304)


___________

___________

___________





At 31 December 2011

-

11,213,049

11,213,049


___________

___________

___________





Impairment




At 31 December 2009

(2,747,754)

(7,702,070)

(10,449,824)

Impairment charge for 2010

-

(5,000)

(5,000)


___________

___________

___________





At 31 December 2010

(2,747,754)

(7,707,070)

(10,454,824)

Disposals in 2011 (see (a) below)

 

2,747,754

 

5,000

 

2,752,754


___________

___________

___________





At 31 December 2011

-

(7,702,070)

(7,702,070)


___________

___________

___________

Net book values




At 31 December 2011

-

3,510,979

3,510,979


___________

___________

___________





At 31 December 2010

-

4,168,283

4,168,283


___________

___________

___________





 

(a) The disposal during 2011 results from the liquidation during the year of Black Rock Oil & Gas Sucursal - branch which was placed into liquidation on 14 February 2011 (see Note 7 - Discontinued operations).

 

(b) On 22 November 2011 LQRC returned total capital of $1,278,982 to its shareholders, being a reduction of $626,677 to its 49% minority interest holder (see Note 17) and $652,304 to the Company.

 

The Company's directly held subsidiary undertaking as at 31 December 2011 is:

 

Name

Ownership

Country of incorporation

Main activity





Las Quinchas Resource Corporation

51%

Barbados

Oil and gas exploration





The Directors have assessed the carrying value of the subsidiary company investment and in their opinion no impairment provision is currently considered necessary.

 

13.       Receivables

 


      31 December 2011

      31 December 2010


Group

Company

Group

Company


$

$

$

$






Other receivables

1,040,747

25,306

87,135

41,077

Prepayments

95,272

93,269

35,439

32,514


___________

___________

___________

___________







1,136,019

118,575

122,574

73,591


___________

___________

___________

___________






 

Included in the Group's other receivables at 31 December 2011 is $970,120 owed to LQRC by the 49% Minority Interest holder (see Note 17).

 

14.       Trade and other payables


      31 December 2011

      31 December 2010


Group

Company

Group

Company


$

$

$

$






Other payables ((a) below)

85,322

1,329,314

186,636

126,360

Shareholder loan ((b) below)

1,001,000

1,001,000

312,000

312,000

Accruals ((c) below)

7,350,405

34,850

4,859,174

413,078


___________

___________

___________

___________







8,436,727

2,365,164

5,357,810

851,438


___________

___________

___________

___________








 

(a)  Included in the Company's other payables at 31 December 2011 is $1,243,993 owed by the Company to LQRC.

 

(b) During 2010, the Company's largest shareholder, Cetus Investment Resources Inc, made available to the Company an unsecured, non-interest bearing Loan of up to £650,000, of which £650,000 ($1,001,000) was drawn at 31 December 2011 (2010: £200,000 ($312,000)).  

 

(c) Included in accruals at 31 December 2011 is unpaid operator billings of $4,407,876 (2009: $4,580,365). Interest of $152,968 was charged by the operator during 2011 on the unpaid billings (2010: $270,051).

 

Also included in accruals at 31 December 2011 is $2,880,000 received by LQRC pursuant to a conditional Letter of Intent dated 1 November 2011 related to a possible sale of its 50% beneficial interest in the Las Quinchas Association Contract (see Note 22 for subsequent events on this sale transaction).

 

 

15.        Provision for decommissioning

 

The Directors have considered environmental issues and the need for any necessary provision for the cost of rectifying any environmental damage, as might be required under local legislation and the Group's licence obligations.  In their view, apart from the provision for decommissioning of $204,164 in the consolidated statement of financial position (see below), no further provision is necessary at 31 December 2011 for any future costs of decommissioning or any environmental damage.

 


Group

$

Company

$

 

At 31 December 2009

 

679,559

 

537,460

Paid in year 2010

(43,856)

(43,856)

Reduction of provision on relinquishment (discontinued operations (Note 7))

 

 

(493,604)

 

 

(493,604)

Change in estimate

44,150

-

Foreign exchange loss

7,037

-

Unwinding of discount  

13,940

-




 

At 31 December 2010

 

207,226

 

-




             Foreign exchange gain

(3,062)

-







            At 31 December 2011

204,164

-

 

16.        Share capital



31 December 2011 & 2010

Group and Company





Number

Authorised capital



1,445,235,888 ordinary shares of 1p each


1,445,235,888



___________




21,031,688 deferred shares of 24p each


21,031,688



___________






$

Allotted, called up and fully paid



232,160,407 ordinary shares of
1p each


3,501,369

21,031,688 deferred shares of 24p each


10,095,282



___________






13,596,651



___________




 

The Company's share price ranged between 0.98p and 8.0p during the period.  The closing share price as at 31 December 2011 was 1.45p per share.

 

17.        Minority interests


Group

Group


2011

2010


$

$




Called up share capital

3,373,323

4,000,000

Accumulated losses

(2,130,013)

(1,889,410)


___________

___________





1,243,310

2,110,590


___________

___________




 

The minority interests at 31 December 2011 represent a 49% holding by Alange Alberta Inc. in Las Quinchas Resource Corporation.  During the year a total capital of $626,677 was returned to the minority interest.

 

18.        Financial instruments

 

Interest rate risk

At 31 December 2011 the Group had US Dollar cash of $683,473, and Pound Sterling cash of £91,896.  The Company's exposure to interest rate risk, which is the risk that a financial instrument's value will fluctuate as a result of changes in market interest rates on classes of financial assets and financial liabilities, was as follows:

 

 


31.12.2011

31.12.2010


Floating interest rate

Non-Interest Bearing

Floating interest rate

Non-Interest Bearing


$

$

$

$

Financial assets:





Cash at bank*

-

824,993

-

1,360,698


___________

___________

___________

___________






* Of the cash balance at 31 December 2011, $705 was held by LQRC, a 51% owned subsidiary (2010: $1,279,742) and $824,288 by the Company (2010: $80,265).

 

Financial liabilities

At 31 December 2011 the Group had no financial liabilities.

 

Net fair value

The net fair value of financial assets and financial liabilities approximates to their carrying amount as disclosed in the balance sheet and in the related notes.

 

Financial risk management

The Directors recognise that this is an area in which they may need to develop specific policies should the Group become exposed to further financial risks as the business develops.

 

Capital risk management

The Group considers capital to be its equity reserves.  At the current stage of the Group's life cycle, the Group's objective in managing its capital is to ensure funds raised meet the exploration and other expenditure commitments. The Group ensures it is meeting its objectives by reviewing its KPIs to ensure its exploration activities are progressing in line with expectations, controlling costs and placing unused funds on deposit to conserve resources and increase returns on surplus cash held.

 

19.        Future exploration expenditure

 

The Group has no contractual future exploration expenditure commitments.  

 

20.        Related party transactions and compensation of key management personnel

 

Key management of the Group is considered to be the Directors of the Company.  There are no transactions with the Directors other than their remuneration and interests in shares. During the year ended 31 December 2011 the Company was charged a total of $119,663 for reimbursement of office rent, rates and services by subsidiaries of United Paramount Holding Corp (Note 21) (2010: $149,389), of which $48,927 was outstanding at the end of 2011 (2010: $76,678). A further $1,001,000 was due under the Cetus Loan at 31 December 2011 (2010: $312,000) (Note 14).

 

The year ended 31 December 2011 includes management fees of $66,000 payable to the 49% minority interest party in LQRC, Alange Alberta Inc.

 

The remuneration of Directors is set out below in aggregate for each of the categories specified in IAS 24 'Related Party Disclosures'.  Further information about the remuneration of individual Directors is shown in the Directors' Report and Note 10.

 

 


2011

2010


$

$




Short-term employee benefits

225,193

222,653

Post-employment benefits

78,971

58,827


___________

___________





304,164

281,480


___________

___________




 

21.        Control

 

The Group is controlled by Cetus Investment Resources Inc which owns 86.15% of the Company.  Cetus Investment Resources Inc is a wholly-owned subsidiary of Zaver Petroleum International Inc, which is itself a wholly-owned subsidiary of United Paramount Holding Corp.  Mr Hashwani is beneficially interested in the entire issued share capital of United Paramount Holding Corp and is therefore the ultimate controlling party.

 

22.        Subsequent events

 

As set out in note 3.2, on 1 June 2012, the Company announced that its 51% owned subsidiary, LQRC, had entered into a conditional Assignment Agreement for the sale of its 50 per cent. beneficial interest in the Las Quinchas Association Contract. Woburn's share of the net disposal proceeds is estimated to amount to approximately US$4.5 million after expenses and settling existing liabilities of LQRC. The proposed completion of the sale by LQRC is conditional, inter alia, on the approval of Shareholders at a general meeting of the Company to be held on 21 June 2012. Fuller details have been set out in a circular to shareholders.

 

23.        Other

The financial information in this announcement has been derived from the Company's statutory accounts for the year ended 31 December 2011, which were approved by the Directors on 1 June 2012 and on which the auditors have given an unqualified opinion.  The financial information set out in this announcement does not constitute statutory accounts.  Statutory accounts for the year ended 31 December 2011 will be delivered to the Registrar of Companies in accordance with the Companies Act.  The financial information for the year ended 31 December 2010 is derived from the Company's statutory accounts, which have been delivered to the Registrar of Companies and on which the auditors gave an unqualified opinion.

 

ENDS

 


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