Final Results
White Nile Limited
20 December 2006
White Nile Ltd / Ticker: WNL / Index: AIM / Sector: Oil & Gas
20th December 2006
White Nile Ltd ('White Nile' or 'the Company')
Final Results
White Nile Ltd, the AIM listed oil and gas exploration company, announces its
results for the year ended 30 June 2006.
Overview
• Progress made on many fronts at flagship oil project, the 67,000 sq km
Block Ba in Southern Sudan
• Assembled an experienced team and network of international partners, and
established local offices and representation
• High resolution 2D seismic evaluation programme being undertaken to
identify drill targets and oil potential of Block Ba
• Over 550 km of high-density 2D seismic data interpreted from the
prospective Muglad Basin in the western part of Block Ba
• Several drill targets identified including one 50 sq km structure
• Drilling programme targeted for the first quarter of 2007, minimum of two
exploration wells in 2007 - drill rig identified
• Contracted Environmentalistes Sans Frontieres to complete full
Environmental and Social Impact Assessment on Block Ba
• Extensive community infrastructure projects undertaken
• Significant de-mining over a 500 sq km area around exploration base at
Padak in Jonglei Province
• Continued support from the Government of Southern Sudan who are equity
stakeholders in White Nile
• Improving political climate and recognition for the Government of Southern
Sudan - US government lifting certain trade sanctions on Southern Sudan
• Completed first half of the initial geophysical programme of
magneto-telluric and gravity surveys in the Southern Rift Basins, Ethiopia
• In December 2006 £12 million (gross of expenses) raised to fast track
operations and move into the drill stage of development programme on Block
Ba
Chairman's Statement
It gives me great pleasure to report on White Nile's progress towards fulfilling
its objective of becoming a new independent oil producer focused in Southern
Sudan and the immediate region. During the period under review we have made
progress on many fronts having advanced our exploration programme on Block Ba in
Southern Sudan, strengthened local and governmental relationships, assembled an
experienced team and network of international partners, and established local
offices and representation. With these in place the Board believes that White
Nile is well positioned to achieve its objectives and generate further value for
its shareholders.
Exploration
Southern Sudan
As shareholders will know, our flagship project is the 67,000 sq km Block Ba in
Southern Sudan, an area equivalent to approximately 28 UK North Sea blocks or 11
UK North Sea quadrants. Our exploration programme is currently focusing on the
extensions of the productive Muglad and Melut Basins and is being coordinated
from our exploration hub at Padak, in the western section of Block Ba north of
Bor, as well as our administrative office in Juba.
A high resolution 2D seismic evaluation programme is being undertaken, which is
already enabling us to identify drill targets and help us understand the true
extent of the oil potential of the area. Over 550 km of high-density 2D seismic
data has already been interpreted from the prospective Jonglei sub-basin of the
Muglad Basin in the western part of Block Ba. Several prospects have
subsequently been identified in the 1,800 sq km project area.
The seismic data has been processed and interpreted to provide a new
understanding of the prospectivity of the Jonglei sub-basin of the Muglad Basin.
A sedimentary section of up to 7 km in thickness and rift structures suitable
for forming hydrocarbon traps are clearly shown, which are analogous to the
producing South Sudanese Thar Jath, Mala, Heglig and Unity oilfields of the
Muglad Basin to the northwest of Block Ba. In this way the geological
conditions pertaining to the formation of oilfields in the Muglad Basin (Blocks
1, 2, 4 and 5A) have been extrapolated into the Jonglei sub-basin in Block Ba.
Blocks 1, 2 and 5A host the known Unity, Heglig and Thar Jath oilfields that
have estimated oil in place of circa 600 million, 550 million and 1 billion
barrels respectively.
We have planned an ongoing exploration and development programme for Block Ba,
which includes drilling a minimum of two exploration wells in 2007 during the
dry season, with the first exploration well targeted for the first quarter of
2007. We have already identified for use a Romanian F200 DH modular drill rig,
which will target the identified structures on Block Ba, where we believe the
productive Muglad Basin extends into the concession area, including one large
structure of over 50 sq km.
Further 2D seismic surveying will be undertaken and 3D seismic will be
considered over any discoveries. White Nile will continue its high-density 2D
seismic programme in the Pibor Post Basin, part of the productive Melut Basin,
which extends from Block Ba northwards and includes the Great Palogue discovery
and the Adar-Yale oilfield. These oilfields have estimated oil in place of circa
2.9 billion barrels and circa 276 million barrels respectively. The exploration
programme at Pibor remains on target to commence in early 2007.
Ethiopia
White Nile agreed a two year Joint Study Agreement in July 2005 with the
Petroleum Operations Department of the Ministry of Mines of the Federal
Democratic Republic of Ethiopia, covering the area of southern Ethiopia known as
the 'Southern Rift Basins'. The approximate 70,000 sq km area is adjacent to
Petronas' Gambela Block in the north and borders Southern Sudan and Kenya to the
south.
Exploration in the area is based on the geological concept that the
petroliferous Cretaceous and early Tertiary basins of Southern Sudan extend
south-eastwards beneath the younger and less prospective East African rifts. The
Company has completed the first half of its initial geophysical programme of
magneto-telluric and gravity surveys in the Southern Rift Basins. Preliminary
interpretation of data already gathered is now underway, which once completed
should enable us to understand the future prospectivity of the region.
Political
The Comprehensive Peace Agreement was signed between Northern and Southern Sudan
in January 2005, which has lead to increased stability in the south of the
country. The Government of Southern Sudan ('GOSS') is actively encouraging
foreign investment with a broader aim to build its economic and physical
infrastructure. This situation seems set to improve as the US differentiates
between Southern Sudan and the Northern Sudanese Government in Khartoum by
starting to allow economic activities between US companies and Southern Sudan by
lifting certain trade sanctions.
White Nile has always recognised the importance of developing contacts with both
local communities and the GOSS. This was highlighted by the original
transaction which transferred a 50% equity stake in the Company to Nile
Petroleum Corporation ('NPC'), the national oil company of Southern Sudan, in
return for a 60% interest in Block Ba. While the remaining 40% was retained by
NPC, it was incumbent upon White Nile to raise the exploration and development
finance to ensure the advancement of Block Ba.
The model was developed to enable the Southern Sudanese people to maximise the
value of their oil assets as well as benefit directly from the generation of
future revenues. The corporate structure White Nile has employed provides
financial and economic independence for the GOSS and reduces its reliance on
major corporates. The South Sudanese people have the ability to control the
destiny of their oil assets to provide them with significant economic
empowerment through an equity stake in White Nile.
The Company has previously reported there is a rival claim on Block Ba from the
French oil company, Total. White Nile's agreement is with the GOSS, which now
controls the territory where the concession is located, while Total allegedly
had previously signed an agreement in regard to the Block with the Sudanese
Government in Khartoum.
The GOSS continues to reaffirm their absolute right to have issued concessions
in Southern Sudan, including Block Ba. We continue to have their support which
translates into our confidence in our position and, which we believe, is
emphasised by our continued investment and development programme. However we do
understand that the investment community is looking for complete clarity of
title and we are actively petitioning our partners (specifically the GOSS) to
obtain a solution to what we recognise as a political situation.
Environmental
The Board has contracted the service of a leading regional environmental
engineering firm Environmentalistes Sans Frontieres ('ESF') to conduct a full
Environmental and Social Impact Assessment of the Company's activities in Block
Ba. Based in Kenya, ESF has extensive African project experience in oil and gas,
mining and related sectors. With local knowledge, international reach and
experience in South Sudan, we feel that they are the right choice for this
important undertaking. The study will take four months to complete with the
objective being to ensure that the community needs and concerns will be
addressed and that White Nile conform to internationally accepted standards in
protecting the environment.
Social
White Nile is also actively assisting the local community and helping the area
regenerate as part of its commitment to social development. We have taken an
active role in training local people to help in the development of the projects,
as the Board sees the training of key workers being imperative in the
development of the country. Responding to the community's key needs, we have
employed over 1,000 local Sudanese in the repair of over 20 km of man made dyke
between Jalle and Maar, as well as procuring food locally thus stimulating the
local economy.
Over $1.5 million has also been spent on de-mining key artery roads and
villages. So far, a 500 sq km area around Padak has been cleared, which has been
overseen by de-mining experts, The Development Initiative ('TDI'). A number of
locals have also been recruited and trained in mine clearance to develop local
capacity in the region. We have also provided an emergency response team, which
is positioned to give assistance to communities in the area when required in
medical emergencies and when new ordinance is discovered.
On a general level, we have provided fish nets, maize grinding machines, sewing
machines, generators, brick making machines and logistical support to the GOSS
officials in the immediate area, as identified by the community and government
officials. Together with TDI, we have supplied sports equipment and coordinated
the formation of local teams to foster and develop team and community spirit.
A meeting was recently convened in Bor to debate and finalise a cohesive
community development strategy in the Jonglei state, building upon the knowledge
of the local community, the administrative structures of the GOSS and the sector
specific strengths of the relevant NGOs. Organised by the United Nations
Development Programme, this was jointly chaired by representatives of the GOSS
and White Nile, and attended by Government officials in Jonglei state and the
respective community leaders from the Payams as well as representatives of NGOs
and companies working in the area.
Our commitment is to Southern Sudan and we feel we have a responsibility to help
in its reconstruction and achieve its latent potential.
Fundraising
To continue with our exploration and development of Block Ba we recently raised
£12 million (before expenses) through the issue of 12,000,000 new ordinary
shares at £1.00 per share. The funds raised will enable us to fast track
operations and move into the drill stage of our development programme, scheduled
for the dry season in 2007.
Results
White Nile remains focussed on the development of its oil concessions in
Southern Sudan. The Company is still in the exploration stage and therefore is
not producing revenue. In line with expectations, the Company is reporting a
pre-tax loss of £1,417,577 (2005: £394,039)
Conclusion
The past year has seen many positive developments for White Nile. With its
committed management team and strong local support, I am confident that our
success will continue and that our future growth and stability is secure. By
continuing to build relationships with industry specialists and local
governments, we aim to strengthen further our portfolio of projects to become a
leading independent oil producer in East Africa. Early results from Block Ba
are very exciting and with further development I believe that we can
significantly de-risk the project and therefore increase shareholder value. Our
beliefs are further enhanced by the changing attitude of the US Government to
the GOSS and the lifting of sanctions allowing US companies to carry out trading
in Southern Sudan.
We are also party to the growing belief that the Southern Sudanese must have
control over their own resources and therefore the actions they have previously
taken will be recognised by the entire country and Government of National Unity.
There is a growing feeling that a resolution will be reached, which we firmly
believe will be in our favour. Block Ba has huge potential and we intend to
develop it in tandem with our equity partners, the GOSS.
Finally, I would like to take this opportunity of thanking all our employees,
partners and supporters in Southern Sudan for their hard work and I look forward
to a continued strong relationship with them going forward.
Phil Edmonds
Chairman
PROFIT AND LOSS ACCOUNT
for the year ended 30 June 2006
Notes Year Period
ended ended
30 June 30 June
2006 2005
£ £
TURNOVER - -
AIM admission costs - (215,186)
Operating expenses (1,852,380) (322,025)
OPERATING LOSS (1,852,380) (537,211)
Interest receivable 439,372 143,172
Interest payable (4,569) -
LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (1,417,577) (394,039)
Taxation - -
LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (1,417,577) (394,039)
LOSS PER ORDINARY SHARE
Basic and diluted 3 (0.447p) (0.273p)
The operating loss for the period arises from the Company's continuing
operations.
No separate statement of Total Recognised Gains and Losses has been presented as
all such gains and losses have been dealt with in the profit and loss account.
BALANCE SHEET
30 June 2006
Notes 2006 2005
£ £
FIXED ASSETS
Intangible assets 16,855,039 10,029,688
Tangible assets 227,907 42,182
17,082,946 10,071,870
CURRENT ASSETS
Debtors 340,137 -
Cash at bank and in hand 6,049,114 14,790,959
6,389,251 14,790,959
CREDITORS: Amounts falling due within one year (974,728) (857,933)
NET CURRENT ASSETS 5,414,523 13,933,026
NET ASSETS 22,497,469 24,004,896
CAPITAL AND RESERVES
Called up share capital 317,000 310,000
Share premium account 23,992,085 17,088,935
Shares to be issued - 7,000,000
Profit and loss account (deficit) (1,811,616) (394,039)
SHAREHOLDERS' FUNDS 4 22,497,469 24,004,896
CASH FLOW STATEMENT
for the year ended 30 June 2006
Notes Year Period
ended ended
30 June 30 June
2006 2005
£ £
Cash (outflow)/inflow from operating activities 5a (2,052,571) 326,748
Returns on investments and servicing of finance 5b 434,803 143,172
Capital expenditure and financial investment 5b (7,034,227) (1,012,896)
CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (8,651,995) (542,976)
Management of liquid resources 5b 10,525,153 (14,525,153)
Financing 5b (89,850) 15,333,935
INCREASE IN CASH IN THE PERIOD 1,783,308 265,806
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Year Period
ended ended
30 June 30 June
2006 2005
£ £
Increase in cash in the period 1,783,308 265,806
Cash (inflow)/outflow from (decrease)/increase in liquid (10,525,153) 14,525,153
resources
MOVEMENT IN NET FUNDS 5c (8,741,845) 14,790,959
Net funds at beginning of period 14,790,959 -
NET FUNDS AT END OF PERIOD 6,049,114 14,790,959
NOTES
for the period ended 30 June 2006
1 FINANCIAL INFORMATION
The financial information for the period ended 30 June 2005 has been extracted
from the Company's audited accounts. The Financial Information does not
constitute the Company's statutory financial statements. The figures for the
period ended 30 June 2006 have been extracted from the annual accounts on which
the auditors have not yet signed their audit report.
2 BASIS OF PREPARATION
The financial statements have been prepared under the historical cost convention
and in accordance with applicable United Kingdom accounting standards.
3 LOSS PER ORDINARY SHARE
The calculation of basic and diluted loss per ordinary share is based on the
following losses and number of shares.
Year Period
ended ended
30 June 30 June
2006 2005
£ £
Loss for the financial period 1,417,577 394,039
2006 2005
No. of No. of shares
shares
Weighted average number of shares 316,942,466 144,342,105
Due to the loss incurred in the period, there is no dilutive effect from the
issue of share options.
4 RECONCILIATION OF MOVEMENT IN SHAREHOLDERS' FUNDS 2006 2005
£ £
Loss for the financial period (1,417,577) (394,039)
Issue of shares during the period - 18,130,000
Issue costs (89,850) (731,065)
Shares to be issued - 7,000,000
Net (reduction in)/addition to shareholders' funds (1,507,427) 24,004,896
Opening shareholders' funds 24,004,896 -
Closing shareholders' funds 22,497,469 24,004,896
5 CASH FLOWS 2006 2005
£ £
a Reconciliation of operating loss to net cash (outflow)/inflow
from operating activities
Operating loss (1,852,380) (537,211)
Depreciation 23,151 6,026
Increase in debtors (340,137) -
Increase in creditors 116,795 857,933
Net cash (outflow)/inflow from operating activities (2,052,571) 326,748
b Analysis of cash flows for headings netted in the cash flow 2006 2005
£ £
Returns on investments and servicing of finance
Interest received 439,372 143,172
Interest paid (4,569) -
Net cash inflow from returns on investments and servicing of
finance 434,803 143,172
Capital expenditure and financial investment
Purchase of intangible fixed assets (6,825,351) (964,688)
Purchase of tangible fixed assets (208,876) (48,208)
Net cash outflow from capital expenditure and financial (7,034,227) (1,012,896)
investment
Management of liquid resources
Decrease/(increase) in cash deposited on short term deposit 10,525,153 (14,525,153)
Net cash inflow/(outflow) from management of liquid resources 10,525,153 (14,525,153)
Financing
Proceeds from issue of share capital - 9,065,000
Share issue costs (89,850) (731,065)
Proceeds from shares to be issued - 7,000,000
Net cash (outflow)/inflow from financing (89,850) 15,333,935
At 1 July Cash- At 30 June
c Analysis of net funds 2005 flow 2006
£ £ £
Cash at bank and in hand 265,806 1,783,308 2,049,114
Cash on deposit 14,525,153 (10,525,153) 4,000,000
14,790,959 (8,741,845) 6,049,114
6 POST BALANCE SHEET EVENTS
On 4 December 2006 the company placed 12,000,000 ordinary share of 0.1p each at
£1 raising gross cash proceeds of £12,000,000. These funds will be used to fund
the drilling and development of the company's Block Ba oil concession area in
Southern Sudan.
Copies of the Report and Accounts for the period ended 30 June 2006 are being
sent to shareholders. Further copies will be available from the Company
Secretary's office, which is Salans, Millennium Bridge House, 2 Lambeth Hill,
London, EC4V 4AJ.
* * E N D S * *
For further information please contact:
Phil Edmonds White Nile Ltd Tel: 0845 108 6060
Jonathan Wright Seymour Pierce Ltd Tel: 0207 107 8000
Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7242 4477
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