RNS Number:6017A
Wham Energy plc
30 March 2006
Preliminary Results for the year ended 31 December 2005
WHAM ENERGY EXPANDS NORTH SEA ACREAGE AND PROSPECTS PORTFOLIO
Wham Energy plc, the AIM-listed North Sea oil and gas exploration company, has
announced its preliminary results for the year ended 31 December 2005. The
annual report will be dispatched to shareholders on the 20th April and the AGM
will be held in London on the 17th May.
*#9.6M net raised in two tranches and shares admitted to AIM
*Exploration portfolio expanded to 19 blocks with an average 49% working
interest
*Prospects and leads identified in most blocks
*Farmout data rooms are currently open to accelerate the early drilling
of prospects
*Year-end liquid resources amounted to #9.25M
Tom Windle, Chief Executive of Wham Energy commented:
" WHAM Energy has achieved much this year. The highlight was the admission to
AIM and #9 million (net) fund raising. This has enabled us to accelerate the
growth of the Company. Since the IPO in September, we have put behind us the
disappointment of the Prometheus well and concentrated on expanding and
upgrading the exploration portfolio. We have completed the mapping of prospects
on our 22nd Licence Round blocks. This has generated a number of attractive
opportunities. Working on behalf of our Joint Venture partners Ithaca Energy, we
are actively seeking farminees to enable us to participate in a future
multi-well drilling programme.
" WHAM Energy was successful in the 23rd Licence Round where we secured 100%
working interests in three blocks in which we have already identified three
leads. The year also saw WHAM Energy becoming a recognised exploration operator.
With the acquisition of block 47/12 we will acquire a seismic programme to
evaluate the block's potential. Block 47/12 lies off the Yorkshire coast between
producing fields. Preliminary mapping shows prospectivity at several reservoir
levels. We remain confident that a number of these prospects will result in
viable commercial discoveries.
" The coming year looks as if it will be even more active as we prepare for the
24th Licence Round where we have identified several blocks worthy of
application. The Company is also considering the possible acquisition of near-
development and producing interests that are currently being marketed. We are
on track with our strategy to accelerate the exploration timetable and we look
forward to reporting further progress over the next year."
-ends-
Date: 30 March 2006
For further information contact:
Wham Energy plc cityPROFILE
Tom Windle, Chief Executive Simon Courtenay
Tel: 020-7924-4644; Mob: 07968162630 Andrew Harris
Alan Thomas, Finance Director Tel: 020-7448-3244
Tel: 07739800093
WHAM Energy plc is an AIM listed company. Further details are available on the
Company's website: www.whamenergy.com
Preliminary Results for the year ended 31 December 2005
CHAIRMAN'S STATEMENT
2005 was a year of transformation for your Company, and I would like to take
this opportunity to welcome the many new shareholders who have invested in WHAM.
We successfully listed our shares on the Alternative Investment Market (AIM) and
raised #10.6million gross (#9.6million net) to fund exploration commitments and
new ventures, both from our Initial Public Offering (IPO) and the earlier
private placing. We also acquired interests in four more exploration blocks in
the UK Continental Shelf (UKCS) and we drilled our first exploration well.
Finance
Funds were needed to enable data acquisition and evaluation of existing
licences. In March we undertook a successful pre-IPO fund raising exercise,
raising #0.6million. In September we listed on AIM and successfully raised
#10.0million before expenses (#9.1million net), assisted by our broker,
Bridgewell Securities. At the year-end, the Company's liquid resources amounted
to #9.25million.
Exploration
Our main emphasis for exploration is on Southern North Sea gas prospects and
selected blocks in the Central North Sea which are within reach of existing
pipeline and platform infrastructure. Growth in our asset base has been an
important objective of chief executive Tom Windle and his exploration team.
Exploring for oil and gas is a high risk, high reward business and a broad
portfolio of attractive prospects is the best way of translating the team's
considerable experience and technical expertise into future valuable discoveries
for your Company. During the year, 4 new exploration blocks in the UKCS were
acquired, increasing our inventory to 19 blocks, and raising our average licence
working interest from 36% to 49%. In addition we extended our licence in the two
Prometheus blocks by two more years and fulfilled our licence commitment to the
DTI.
Drilling
Following a successful farmout to Centrica Resources, the Prometheus West
prospect was tested in October by well 42/21-1. The well found traces of gas,
but the main Leman sandstone target was not productive due to tight sandstone
formation and the well was plugged and abandoned. The results of the well have
been analysed and future plans for the Prometheus area are being reassessed.
Prospect evaluation
Encouraging results of seismic interpretation have indicated prospects and leads
in most blocks. Farmout packages have been prepared with the intention of
drilling these prospects as soon as possible. In block 47/12, acquired from GTO
in September, a seismic survey is planned in 2006 to evaluate the opportunities
in the Permian Leman and underlying Carboniferous sandstones. The block is
located between the offshore Amethyst field and the onshore Saltfleetby field.
Economic environment
The operational background for your Company remains very positive.
*Production of oil and gas in the UK is declining, yet energy demand remains
strong. Future supplies will have to come from further afield and the transport
costs associated with the greater distances will underpin unit prices for new
domestic production. Recent volatile spot market prices may or may not be
sustainable in the medium term but your Directors see plenty of evidence to
support a positive longer term price scenario, especially for gas.
*We believe that there remain many undrilled prospects that offer attractive
exploration potential. Estimates within the industry range up to 10 billion
barrels of oil equivalent left to find in the UKCS.
The UK must compete for resources in a world market, however, and there are two
areas of concern:
*The growth in worldwide exploration activity puts pressure on the number of
drilling rigs available to UK explorers and higher day rates impact the economic
viability of smaller prospects.
*In December 2005 the UK Government announced an increase in the Corporation Tax
on UK oil and gas producers from 40% to 50%. The effect of using this blunt
instrument across the whole UK industry has been to make marginal oil and gas
prospects less attractive. This flies in the face of the DTI's success over
several years in encouraging new entrants like WHAM into the UKCS, and is bound
to reduce ultimate recovery from the UKCS unless and until a more imaginative
treatment of tax is introduced for explorers and producers chasing small or
risky prospects.
As the larger companies exit the UK, exciting commercial opportunities will
continue to arise for your Company and where we can add value, we will continue
to exploit them on your behalf.
Michael J Pavia
Chairman
22 March 2006
PROFIT AND LOSS ACCOUNT
For the year ended 31 December 2005
2005 2004
# #
Turnover 23,598 70,000
Cost of sales - (13,874)
--------------------------------------------------------------------------------
Gross profit 23,598 56,126
Administrative expenses (395,086) (16,788)
--------------------------------------------------------------------------------
Operating (loss)/profit (371,488) 39,338
Profit on disposal of share
of licence interests - 88,000
--------------------------------------------------------------------------------
(Loss)/profit on ordinary activities
before interest (371,488) 127,338
Interest receivable 113,313 1,067
--------------------------------------------------------------------------------
(Loss)/profit on ordinary activities
before taxation (258,175) 128,405
Tax on (loss)/profit on 41,446 (40,265)
ordinary activities
--------------------------------------------------------------------------------
(Loss)/profit for the period
after taxation (216,729) 88,140
Retained profit brought forward 101,329 13,189
--------------------------------------------------------------------------------
Retained (loss)/profit
carried forward (115,400) 101,329
================================================================================
Basic and diluted (loss)/ earnings per
share (see note 4) (1.05)p 6.07p
Notes:
1. All of the Company's activities are classed as continuing.
2. There are no recognised gains or losses in either year other than the amounts
shown in the profit and loss account.
3. Basis of presentation:
The financial information set out in this announcement, which does not constitute
the statutory accounts of the Copmany, is extracted from the Company's audited
statutory accounts for the year ended 31st December 2005, which were approved by
the Board on 22nd March 2006. The auditors have reported on those accounts and
their report was unqualified. The full audited statutory accounts will be
included in the Company's annual report, which will be mailed to shareholders on
20th April 2006. Additional copies will be available at the Company's offices at
8, Square Rigger Row, Plantation Wharf, London SW11 3TZ after that date.
The results have been prepared on the basis of the accounting policies adopted in
the statutory accounts for the year ended 31st December 2004.Accounting Standards
introduced in 2005 have had no effect on the accounting treatment adopted. The
statutory accounts for the year ended 31st December 2004 have been delivered to
the Registrar of Companies. Those for 2005 will be delivered to the Registrar of
Companies after the Company's Annual General Meeting, which is scheduled for 17th
May 2006.
4. Basic and diluted (loss)/earnings per share:
The basic earnings per share has been calculated on the loss on ordinary
activities after taxation of #216,729 (2004: profit #88,140) divided by the
weighted average number of ordinary shares in issue of 20,720,816
(2004: 1,451,397) during the year. The weighted average number of shares in
respect of 2004 has been adjusted to reflect the share subdivision effected in
February 2005. As the Company reported a loss for the year then, in accordance
with Financial Reporting Standard Number 22, the warrants and options in issue
are not considered dilutive.
BALANCE SHEET
As at 31 December 2005
2005 2004
# #
Fixed assets
Intangible assets 518,901 15,192
Tangible fixed assets 20,344 4,928
--------------------------------------------------------------------------------
539,245 20,120
--------------------------------------------------------------------------------
Current assets
Debtors 178,766 73,068
Investments (see note) 9,130,277 -
Cash at bank and in hand 122,736 67,399
--------------------------------------------------------------------------------
9,431,779 140,467
--------------------------------------------------------------------------------
Creditors
Amounts falling due within one year (427,991) (52,555)
--------------------------------------------------------------------------------
Net current assets 9,003,788 87,912
--------------------------------------------------------------------------------
Total assets less current liabilities 9,543,033 108,032
Provision for liabilities - (5,023)
--------------------------------------------------------------------------------
NET ASSETS 9,543,033 103,009
================================================================================
Capital and reserves
Called-up share capital 31,696 1,680
Share premium account 9,568,287 -
Other reserves 58,450 -
Profit and loss account (115,400) 101,329
--------------------------------------------------------------------------------
EQUITY SHAREHOLDERS' FUNDS 9,543,033 103,009
================================================================================
Note:
Investments consisted of money market deposits which earn interest at rates set
in advance for periods of 1-2 months by reference to Sterling LIBOR.
Cash Flow Statement
For the year ended 31 December 2005
2005 2004
# # # #
Net cash inflow/(outflow)from operating 9,806 (33,054)
activities (see note)
Returns on investment and servicing of
finance
Bank and investment interest receipts 76,322 1,067
Taxation
Taxation paid (35,000) -
Capital expenditure and financial investment
Payments to acquire tangible fixed assets (18,558) (5,629)
Payments to acquire intangible fixed assets (503,709) (9,379)
Receipts from disposal of licence interest - 88,000
--------------------------------------------------------------------------------------------
(522,267) 72,992
--------------------------------------------------------------------------------------------
Net cash flow before use of liquid resources
and financing (471,139) 41,005
Management of liquid resources
Increase in short term deposits (9,130,277) -
Financing
Proceeds from issue of ordinary shares 10,602,820 -
Costs associated with share issue (946,067) -
--------------------------------------------------------------------------------------------
9,656,753 -
--------------------------------------------------------------------------------------------
Increase in cash 55,337 41,005
============================================================================================
Reconciliation of net cash flow to movement
in net funds
Increase in cash in the year 55,337 41,005
Cash used to increase liquid resources 9,130,277 -
--------------------------------------------------------------------------------------------
Change in net funds 9,185,614 41,005
Net funds at 1 January 2005 67,399 26,394
--------------------------------------------------------------------------------------------
Net funds at 31 December 2005 9,253,013 67,399
--------------------------------------------------------------------------------------------
Note:
Reconciliation of operating result to net cash flow from operating activities
Operating (loss)/profit for the year. (371,488) 39,338
Depreciation 3,142 701
(Increase) in debtors (35,686) (68,989)
Increase/(decrease) in creditors 413,838 (4,104)
--------------------------------------------------------------------------------------------
Net cash inflow/(outflow) from operating activities 9,806 (33,054)
--------------------------------------------------------------------------------------------
This information is provided by RNS
The company news service from the London Stock Exchange
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