Half Yearly Report

RNS Number : 4488I

Westmount Energy Limited

12 March 2010

 



“Westmount Energy Limited        (the “Company”)  Interim Report” WESTMOUNT ENERGY LIMITED
CHAIRMAN'S REVIEW
In presenting our Interim Report and Accounts for the first time as prepared under the requirements of the International Financial Reporting Standards shareholders will note that they are substantially changed from the form in which we have previously reported and I would recommend you to read the note at the end of my report setting out our decision to adopt this format. This form of reporting is now becoming standard procedure for companies listed in the United Kingdom.
The period under review has seen some major changes in the capitalisation of our two remaining listed companies as both Sterling Energy Plc and Desire Petroleum Plc raised new capital and your company participated in both Issues and subscribed to new shares on very favourable terms as reported in our Annual General Meeting statement on 28 October 2009.
The net effect of our participation in these Issues has resulted in a significant increase in the asset value of your company shown in the balance sheet as at 31 December 2009. This is due to reflecting our holdings at current market value as compared to the historical cost basis we have always used in previous reports. The net profit of £4,206,207 for the period is primarily a result of this change in accounting methods and I would refer you to note 3 of the financial statements for further explanation.
Your board has continued to pursue its policy of trimming the Company's holdings in Desire at a significant increase to our original cost price. As at 31 December 2009 our holding stood at 4.8 million shares and subsequent to the year end we have reduced our holding to 3.7 million shares as at 5 March 2010.
We are now entering the most important phase in the history of our two investments. In the Falklands Desire's rig is now onsite and the first well was spudded on 22 February 2010 and the drilling programme is likely to last 30 days. The subsequent drilling programme for Desire and its co-partners in the rig is likely to last six to eight months and we anticipate steady news flow over this period.
Sterling Energy is currently drilling an exploration well in Kurdistan which will take some 80 days to reach target depth and the results are likely to be known sometime in April. We expect to continue to hold our shares in Sterling pending developments of their portfolio of prospects in Africa and Madagascar. Sterling has a new management team with a proven track record, an ungeared balance sheet and approximately $100m in cash as estimated by Sterling's broker in their latest research note dated 25 February 2010.
The results of the above two drilling programmes will be known during the next few months and the Board look forward to a favourable result. We have been shareholders in both companies for many years and hope our faith will be rewarded.
I hope to be able to report to you further news on the above as and when it occurs.
Adoption of International Financial Reporting Standards
In the period ended 31 December 2009, the Directors have decided to make the transition from using United Kingdom Accounting Standards (UK GAAP) to International Financial Reporting Standards ("IFRS"). The first complete set of IFRS compliant financial statements will be prepared for the year ending 30 June 2010. The Directors have considered the implications of adopting IFRS on the June 2009 and December 2008 comparatives and have adjusted them accordingly. The significant changes to the comparatives are summarised in a note at the back of the condensed accounts.
Mervyn Bradlow
Chairman
11 March 2010 Westmount Energy Limited Tel: [phone] Paul Anderson Mervyn Bradlow, Chairman Tel: [phone] Cenkos Securities plc Tel: [phone] Nicholas Wells Elizabeth Bowman
WESTMOUNT ENERGY LIMITED
CONDENSED STATEMENT OF COMPREHENSIVE INCOME
(Expressed in United Kingdom Sterling)
								Restated			Restated
					Six months ended			Six months ended			Year ended
					31 Dec 2009			31 Dec 2008			30 June 2009
					(unaudited)			(unaudited)			(audited)
					£			£			£
Income statement
Administration  expenses					(141,890)			(273,980)			(374,827)
Profit on disposal of investments					137,174			3,659,440			3,874,768
Interest receivable					1,299			36,110			49,035
(Loss)/Gain on ordinary activities before taxation					(3,417)			3,421,570			3,548,976
Taxation					-			-			-
Operating (Loss)/Gain from continuing operations					(3,417)			3,421,570			3,548,976
Other Comprehensive income
Net gain/(loss) on available for sale financial assets
through profit and loss					4,209,624			(5,835,950)			(5,270,739)
Total comprehensive income/(loss) for the period					4,206,207			(2,414,380)			(1,721,763)
Basic gain/(loss) per share (pence)					60.23			(34.27)			(24.66)
Diluted gain/(loss) per share					55.17			(31.18)			(22.58)
WESTMOUNT ENERGY LIMITED
CONDENSED STATEMENT OF FINANCIAL POSITION
(Expressed in United Kingdom Sterling)
								Restated			Restated
					Six months ended			Six months ended			Year ended
					31 Dec 2009			31 Dec 2008			30 June 2009
					(unaudited)			(unaudited)			(audited)
					£			£			£
ASSETS
Non current assets
	Financial assets at fair value through profit and loss				6,951,513			2,247,800			2,724,300
Current assets
	Trade receivables				4,881			10,863			10,540
	Due from brokers				627,540			-			-
	Cash and cash equivalents				219,101			5,207,279			873,656
					851,522			5,218,142			884,196
Total assets					7,803,036			7,465,942			3,608,496
LIABILITIES AND EQUITY
Current liabilities
	Trade and other payables				149,021			150,242			172,377
EQUITY
	Share Capital				1,396,060			1,396,060			1,396,060
	Share Premium Account				261,682			391,648			261,682
	Share Option Account				256,052			268,109			244,363
	Capital Redemption Reserve				-			258,410			-
	Profit and Loss Account				5,740,221			5,001,473			1,534,014
Total  equity					7,654,015			7,315,700			3,436,119
Total liabilities and equity					7,803,036			7,465,942			3,608,496
WESTMOUNT ENERGY LIMITED
CONDENSED STATEMENT OF CHANGES IN EQUITY
(Expressed in United Kingdom Sterling)
											Restated
			Share capital		Share premium		Share option		Retained		Total equity
			Account		Account		Account		Earnings
			£		£		£		£		£
As at 1 July 2008 (Restated)			1,403,060		416,317		269,416		7,674,263		9,763,056
Total comprehensive income
(Loss) for the period ended 31 December 2008									(2,414,380)		(2,414,380)
Transaction with owners
Purchase of own shares			(7,000)								(7,000)
Costs of share options							19,963				(19,963)
Lapse of share options							(21,270)				(21,270)
Purchase of own shares					(24,668)						(24,668)
			(7,000)		(24,668)		(1,307)		-		(32,975)
At 31 December 2008 (Restated)			1,396,060		391,649		268,109		5,259,883		7,315,701
Total comprehensive income
Profit for the period ended 30 June 2009									692,617		692,617
Transaction with owners
Issue of B shares					(69,803)						(69,803)
Redemption of shares									(4,467,391)		(4,467,391)
Redemption costs					(60,164)						(60,164)
Cost of share options							3,889				3,889
Lapse of share options							(27,635)		48,905		21,270
			-		(129,967)		(23,746)		(4,418,486)		(4,572,199)
At 30 June 2009 (Restated)			1,396,060		261,682		244,363		1,534,014		3,436,119
Total comprehensive income
Profit for the period ended 31 December 2009									4,206,207		4,206,207
Transaction with owners
Issue of B shares											-
Cost of share options							11,689				11,689
			-		-		11,689		-		11,689
At 31 December 2009			1,396,060		261,682		256,052		5,740,221		7,654,015
WESTMOUNT ENERGY LIMITED
CONDENSED STATEMENT OF CASH FLOWS
(Expressed in United Kingdom Sterling)
								Restated			Restated
					Six months ended			Six months ended			Year ended
					31 Dec 2009			31 Dec 2008			30 June 2009
					(unaudited)			(unaudited)			(audited)
				Notes	£			£			£
Net cash (outflows) from
operating activities				2	(775,438)			(259,949)			(313,179)
Returns on investment and servicing
of finance					1,299			36,110			49,035
Taxation					-			-			-
Capital expenditure and financial investment					119,584			4,344,190			4,648,229
Cash (outflows)/inflows before financing					(654,555)			4,120,351			4,384,085
Financing					-			(31,669)			(4,629,026)
(Decrease)/Increase in cash					(654,555)			4,088,682			(244,941)
Reconciliation of cash flow to
movement in net (debt)/funds
(Decrease)/Increase in cash					(654,555)			4,088,682			(244,941)
Change in net (debt)/funds resulting from
Cash flows					(654,555)			4,088,682			(244,941)
Movement in net (debt)/funds in the year					(654,555)			4,088,682			(244,941)
Net funds bought forward					873,656			1,118,597			1,118,597
Net funds carried forward					219,101			5,207,279			873,656
Represented by:
Cash at bank					219,101			5,207,279			873,656
Net funds carried forward					219,101			5,207,279			873,656
WESTMOUNT ENERGY LIMITED
NOTES TO THE UNAUDITED INTERIM RESULTS
FOR THE PERIOD ENDING 31 DECEMBER 2009
1	Impact of the adoption of the International Financial Reporting Standards
The financial information shown in these interim results, has been presented for the first time in accordance with the recognition and measurement principles of the International Financial Reporting Standards ("IFRS"). The comparative information for the six months ended 31 December 2008 and the year ended 30 June 2008 has been restated under these standards.
The primary difference for the Company as a result of adopting IFRS is the valuation of investments, which have been categorised as financial assets at fair value through profit or loss and measured at fair value. Any surplus or deficit on the revaluation of the investment is transferred to the Statement of Comprehensive Income. Previously the  investments were recorded at cost less any impairments. Fair value is regarded as the market value at year end.
The Directors have restated the comparative figures of these investments in the Statement of Financial Position as follows:
					Investments		Investments restated				Difference
			As previously stated at cost					to Fair value
		As at 31 December 2008			1,918,998			2,247,800			328,802
		As at 30 June 2009			1,830,287			2,724,300			894,013
The restatement of the investments to Fair value has resulted in the following changes in the Statement of Comprehensive income:
					Profit		Comprehensive Income				Difference
			As previously stated					Restated
		Six months ended 31 December 2008			1,296,320			(2,414,380)			(3,710,700)
		Year ended 30 June 2009			1,423,726			(1,721,763)			(3,145,489)
The retained earnings as at 1 July 2008 increased by £4,039,509 as a result of the change in the value of the investments and was affected as follows in the subsequent reporting periods.
					Retained earnings		Retained earnings				Difference
			As previously stated					Restated
		Six months ended 31 December 2008			4,672,671			5,001,473			328,802
		Year ended 30 June 2009			640,001			1,534,014			894,013
2	Cash flow statement
	Reconciliation of net cash flow from the operating activities
					Six months ended			Six months ended			Year ended
					31 Dec 2009			31 Dec 2008			30 June 2009
					(unaudited)			(unaudited)			(audited)
	Administration expenses				(141,890)			(273,980)			(374,827)
	Costs attributable to issue of share options				11,689			(1,307)			23,852
	Decrease/(Increase) in trade debtors				5,659			(3,174)			(2,851)
	Increase in Due from Broker				(627,540)			-			-
	(Decrease)/Increase in creditors and accrued expenses				(23,356)			18,512			40,647
	Net cash inflow/(out flow) from operating activities				(775,438)			(259,949)			(313,179)
WESTMOUNT ENERGY LIMITED
3	Investments							Restated			Restated
					Six months ended			Six months ended			Year ended
					31 Dec 2009			31 Dec 2008			30 June 2009
					(unaudited)			(unaudited)			(audited)
					£			£			£
	Desire PLC, at market value				4,416,000			1,391,000			2,025,000
	Cost, 4.8 million share				1,149,501			658,998			570,287
	(31 Dec 2008: 5,200,000, 30 June 2009: 4,500,000 shares)
	Sterling Energy, at market value				2,535,513			856,800			699,300
	Cost, 1,635,815 shares				2,823,625			3,385,250			3,385,250
	(31 Dec 2008: 31,500,000, 30 June 2009: 31,500,000 shares)
		Total market value			6,951,513			2,247,800			2,724,300
		Total cost			3,973,126			4,044,248			3,955,537
		Current year movement			2,978,387			(1,796,448)			(1,231,237)
		Reverse prior year FV adjustment			1,231,237			(4,039,502)			(4,039,502)
		Current period income statement impact			4,209,624			(5,835,950)			(5,270,739)

“The interim report will be printed and posted to shareholders by 19^th March 2010 and will be made available on the Company’s website at www.westmount-energy.co.uk” 

 

END

 

 

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