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Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
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Wham | LSE:WAM | London | Ordinary Share | GB00B0JG1P02 | ORD 0.1P |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 41.30 | 0.00 | 00:00:00 |
Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
---|---|---|---|---|---|
0 | 0 | N/A | 0 |
RNS Number:0024E Wham Energy plc 18 September 2007 Interim Results for the six months ended 30 June 2007 Operating Highlights * Takeover proposal from Venture Production recommended by the WHAM Board of Directors * Scheme of Arrangement document is expected to be posted to shareholders on or around 25th September * Processing of 3D seismic survey on blocks 48/3 and 48/4 well under way * 22nd round licences yield attractive prospects ready for drilling * 23rd round licences fully mapped yielding two quality prospects * 24th round licences currently being mapped and two prospects and two leads already identified. Financial Highlights * Interim loss before taxation was #260,120 (2006 #156,828) * Loss per share for the interim period was 0.82p (2006: 0.49p) * Liquid resources at 30 June 2007 amounted to #6.67 million, or 21.0p/ share * IFRS adopted for 2007 and 2006 comparatives restated Date: 18 September 2007 For further information contact: Wham Energy plc cityPROFILE Tom Windle, Chief Executive Simon Courtenay Tel: 020-7924-4644; Tel: 020-7448-3244 Mob: 07968-162630 Alan Thomas, Finance Director Mob: 07739-800093 WHAM Energy plc is an AIM listed company. Further details about the Company and downloadable copies of this announcement are available on the Company's website: www.whamenergy.com. REVIEW OF OPERATIONS Business environment WHAM has diligently progressed its portfolio of exploration prospects to produce several potentially attractive drillable prospects. However the market for farm-outs has become increasingly harsh reflecting the very high exploration drilling costs, volatility of gas prices, and the current 50% corporation tax applicable to UK oil and gas production, all of which have raised the level at which a gas discovery can be estimated to be commercial. In the face of these considerable challenges the Board of Directors is recommending that WHAM shareholders accept the offer from Venture Production, as set out in the Rule 2.5 announcement released on Thursday 23 August 2007. Summary of progress on assets Blocks 48/3a & 48/4 (WHAM 16%) These 22nd round blocks were successfully farmed out to Tullow and Dana earlier in the year with WHAM retaining a 16% working interest. The seismic survey shot in September of last year has been integrated with additional data to provide full 3D coverage over the licence. This dataset is currently being processed prior to mapping and interpretation. It is anticipated the work will be completed and that a well will be drilled in 2008. Blocks 42/25b, 43/16, 43/21b (WHAM 40%) These 22nd round blocks have yielded several potentially drillable prospects of which the most attractive is Prospect Carna. A seismic and environmental site survey has been acquired over Carna in preparation for drilling in 2008. Block 53/3d (WHAM 100%) This 23rd round block has been fully mapped and a very well defined prospect identified adjacent to the giant Leman gas field. WHAM has been seeking potential farminees and evaluating the economic viability of drilling the prospect. Blocks 43/11 and 43/12 (WHAM 100%) This 23rd round licence containing two blocks has yielded two well defined prospects at the prospective Carboniferous level directly on trend to the Cavendish field. Currently WHAM is determining the resource potential of the prospects and undertaking further mapping to assess any additional prospectivity on the blocks. Block 44/27c (WHAM 100%) This block was acquired in the 24th licence round in January 2007 and following the purchase of a 3D data set, mapping has indicated that there is a potential extension of the Carboniferous producing Schooner gas field on to the licence. Further mapping and specialist seismic depth conversion techniques are being applied to the data set to confirm the structure. Block 49/22b (WHAM 100%) 49/22b was acquired at 100% working interest in the 24th licence round in January 2007. The purchase of 3D seismic data sets has been completed and mapping is advanced. To date one prospect and two leads at the Permian Leman sandstone level that are shared with adjacent licences have been identified on the acreage. The remaining licences in the portfolio are currently under evaluation and further seismic acquisition and work will be required to determine their prospectivity. It is anticipated that certain licences may be relinquished in the near future in order to focus resources on the most prospective areas likely to yield short term commercially viable prospects thus strengthening the portfolio. During the first six months of 2007, WHAM continued to evaluate additional opportunities and potential acquisitions where management felt there was scope to enhance shareholder value. Outlook Longer term, the Board remains positive about the potential for finding and developing commercial gas fields in the southern North Sea. For the remainder of 2007, however, the challenges presented by the business environment described above will most likely continue. Whilst the Board would expect the Company's technical team to develop further prospects on its 24th round licences, new farm-outs will remain difficult to achieve and some slippage in the currently expected drilling time-tables on the Morpheus and Carna prospects cannot be ruled out. Tom Windle Chief Executive Officer 18 September 2007 INCOME STATEMENT For the 6 months ended 30 June 2007 Notes Six Months Six Months Year Ended Ended Ended 30-Jun-07 30-Jun-06 31-Dec-06 Unaudited Unaudited Audited # # # Revenue - - - Cost of sales - - - -------------------------------------------------------------------------------- Gross profit/(loss) - - - Exploration expenses (84,891) (14,908) (95,907) Administrative expenses (353,489) (335,816) (754,588) -------------------------------------------------------------------------------- Operating profit/(loss) (438,380) (350,724) (850,495) Finance income 178,260 193,896 379,505 -------------------------------------------------------------------------------- Profit/(loss) before taxation (260,120) (156,828) (470,990) Taxation 3 - - - -------------------------------------------------------------------------------- Profit/(Loss) for the period (260,120) (156,828) (470,990) Earnings/(loss) per share Basic 4 (0.82)p (0.49)p (1.49)p Diluted 4 (0.82)p (0.49)p (1.49)p BALANCE SHEET As at 30 June 2007 Notes 30-Jun-07 30-Jun-06 31-Dec-06 Unaudited Unaudited Audited # # # Non-current assets Exploration and evaluation 2,189,928 594,128 1,817,924 assets Plant and equipment 41,751 20,446 44,976 ------------------------------------------------------------------------ Total non-current assets 2,231,679 614,574 1,862,900 ------------------------------------------------------------------------ Current assets Trade and other 221,040 166,578 498,004 receivables Cash and cash equivalents 6,667,725 8,689,859 6,817,422 ------------------------------------------------------------------------ Total current assets 6,888,765 8,856,437 7,315,426 ------------------------------------------------------------------------ Current liabilities Trade and other (214,776) (147,211) (86,388) liabilities Current tax liabilities - - - ------------------------------------------------------------------------ Total current liabilities (214,776) (147,211) (86,388) ------------------------------------------------------------------------ Net current assets/ 6,673,989 8,709,226 7,229,038 (liabilities) Non-current liabilities Deferred taxation - - - ------------------------------------------------------------------------ Total non-current - - - liabilities ------------------------------------------------------------------------ NET ASSETS 8,905,668 9,323,800 9,091,938 ------------------------------------------------------------------------ Equity Share capital 6 31,746 31,696 31,696 Share premium account 9,580,987 9,568,287 9,568,287 Other reserves 201,850 58,450 140,750 Retained earnings/(losses) (908,915) (334,633) (648,795) ------------------------------------------------------------------------ 8,905,668 9,323,800 9,091,938 ------------------------------------------------------------------------ Cash Flow Statement For the 6 months ended 30 June 2007 Notes Six Six Year Months Months Ended Ended Ended 30-Jun-07 30-Jun-06 31-Dec-06 Unaudited Unaudited Audited # # # Net cash generated from/(used in) 5 47,957 (636,293) (1,444,412) operating activities Investing activities Interest received 182,313 215,209 399,006 Purchases of property, plant and (7,963) (4,438) (40,221) equipment Exploration and evaluation (372,004) (137,632) (1,349,964) expenditures -------------------------------------------------------------------------------- Net cash generated from/(used in) (197,654) 73,139 (991,179) investing activities -------------------------------------------------------------------------------- Financing activities Proceeds from issue of ordinary shares - - - Costs associated with share issue - - - -------------------------------------------------------------------------------- Net cash generated from/(used in) - - - financing activities -------------------------------------------------------------------------------- Increase/(decrease) in cash and cash (149,697) (563,154) (2,435,591) equivalents Cash and cash equivalents at beginning 6,817,422 9,253,013 9,253,013 of period -------------------------------------------------------------------------------- Cash and cash equivalents at end of 6,667,725 8,689,859 6,817,422 period -------------------------------------------------------------------------------- NOTES TO THE FINANCIAL INFORMATION for the six months ended 30 June 2007 1 Accounting policies Basis of preparation The next annual financial statements of WHAM Energy plc ("Wham" or "the Company") will be prepared in accordance with International Financial Reporting Standards ("IFRS"), as adopted for use in the EU applied in accordance with the provisions of the Companies Act 1985. Accordingly, the interim financial information in this report has been prepared using accounting policies consistent with IFRS. IFRS is subject to amendment and interpretation by the International Accounting Standards Board (IASB) and the International Financial Reporting Interpretations Committee (IFRIC) and there is an ongoing process of review and endorsement by the European Commission. The financial information has been prepared on the basis of IFRS that the Directors expect to be applicable as at 31 December 2007. The Company is not required to comply with IAS 34 Interim Financial Reporting. The financial information has been prepared under the historical cost convention. The principal accounting policies set out below have been consistently applied to all periods presented. Non-statutory accounts The financial information for the year ended 31 December 2006 set out in this interim report does not comprise Wham's statutory accounts and does not constitute full statutory accounts as defined in section 240 of the Companies Act. The statutory accounts for the year ended 31 December 2006, which were prepared under UK Generally Accepted Accounting Practice (UK GAAP), have been delivered to the Registrar of Companies. The auditors reported on those accounts and their report was unqualified and did not contain a statement under either section 237 (2) or Section 237 (3) of the Companies Act 1985. The financial information for the 6 months ended 30 June 2007 and 2006 is unaudited. Directors' responsibilities The interim report, including the financial information contained therein, is the responsibility of, and has been approved by, the Directors of the Company. The Directors are responsible for preparing the interim report in accordance with the Listing Rules of the Financial Services Authority which require that the accounting policies and presentation applied to the interim figures are consistent with those applied in preparing the preceding annual accounts except where any changes, and the reasons for them, are disclosed. Foreign currency Transactions in foreign currency are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing on the balance sheet date. Exchange gains and losses on short-term foreign currency borrowings and deposits are included with net interest payable. Exchange differences on all other transactions, except relevant foreign currency loans, are taken to operating profit. Taxation The tax expense represents the sum of the tax currently payable and any deferred tax. The tax currently payable is based on the taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The Company's liability for current tax is calculated using tax rates that have been enacted or substantially enacted by the balance sheet date. Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except where the Company is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset realised. Deferred tax is charged or credited to profit or loss, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its current assets and liabilities on a net basis. Share based payments The cost of share-based employee compensation arrangements, whereby employees receive remuneration in the form of shares or share options, is recognised as an employee benefit expense in the income statement. The total expense to be apportioned over the vesting period of the benefit is determined by reference to the fair value (excluding the effect of non market-based vesting conditions) at the date of grant. The assumptions underlying the number of awards expected to vest are subsequently adjusted for the effects of non market-based vesting to reflect the conditions prevailing at the balance sheet date. Fair value is measured by the use of a binomial model. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of the non-transferability, exercise restrictions and behavioural considerations. Intangible Assets - exploration and evaluation assets The Company uses the full cost method of accounting for exploration and evaluation expenditure, whereby all expenditures incurred in connection with the acquisition, exploration and evaluation of oil and gas assets, including directly attributable overheads, are capitalised in geographical cost pools - to date for Wham, just the single UKCS cost pool - except to the extent that they fall outside the scope of IFRS 6 Exploration for and Evaluation of Mineral Resources ("IFRS 6"), when they are expensed as incurred. Upon successful conclusion of the exploration and appraisal programme and determination that commercial reserves exist, the related costs would be transferred to tangible non-current assets as property plant and equipment. Exploration and evaluation assets at each balance sheet date are assessed for possible impairment as described below. Proceeds from the disposal of oil and gas assets are credited against the carrying value of the cost pool. Any overall surplus of proceeds over cost pool carrying value would be credited to the income statement. Exploration and evaluation assets are tested for impairment when facts and circumstances suggest that the carrying amount of an exploration and evaluation asset may exceed its recoverable amount. The measurement, presentation and dislosure of such impairment are in accordance with IAS 36 Impairment of Assets, according to which the recoverable amount relates to the higher of the asset's fair value less costs to sell and to its value in use. Plant and equipment Plant and equipment are stated at cost less accumulated depreciation and any recognised impairment loss. Depreciation is charged so as to write off the cost of assets, over their estimated useful lives, using the straight-line method, on the following bases: Computer equipment - 33.3% Financial instruments Financial assets and financial liabilities are recognised on the balance sheet when the Company becomes a party to the contractual provisions of the instrument. Wham did not hold any investments during the periods for which financial information is provided, nor has it raised any loans or issued any financial or equity instruments, other than fully paid ordinary shares, during the periods reported. Trade and other receivables are measured at initial recognition at fair value, and are subsequently measured at amortised cost using the effective interest method. A provision is established when there is objective evidence that the Company will not be able to collect all amounts due. The amount of any provision is recognised in the income statement. Cash and cash equivalents comprise cash held by the Company and short-term bank deposits with an original maturity of three months or less. Trade and other payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method. 2 Critical accounting judgements and key sources of estimation uncertainty The preparation of financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Impairment of exploration and evaluation assets Determining whether the investment in exploration and evaluation assets is impaired, if there are indications that this may be the case, requires estimation of the value in use of the full cost pool to which expenditure has been allocated (in Wham's case, the single UKCS cost pool). The value in use calculation requires the Company to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount rate in order to calculate the present value. No provision for impairment has been made in the periods now reported. The carrying value of exploration and evaluation assets at 30 June 2007 was #2,189,928. Share based payments In determining the fair value of equity settled share based payments and the related charge to the income statement, the Company makes assumptions about future events and market conditions. In particular, judgement must be made as to the likely number of shares that will vest, and the fair value of each award granted. The fair value is determined using a valuation model which is dependent on further estimates, including the Company's future dividend policy, employee turnover, the timing with which options will be exercised and the future volatility in the price of the Company's shares. Such assumptions are based on publicly available information and reflect market expectations and advice taken from qualified personnel. Different assumptions about these factors to those made by the Company could materially affect the reported value of share based payments. 3 Taxation Six months Six months Year ended ended ended 30-jun-07 30-jun-06 31-dec-06 # # # Current tax - - - Deferred tax - - - -------------------------------------------------------------------------- Total tax expense for the period - - - -------------------------------------------------------------------------- The Company has not made a taxable profit in the periods reported. No benefit has been recognised in these interim accounts for a potential net deferred tax asset. 4 (Loss)/earnings per share Six months Six months Year ended ended ended 30-jun-07 30-jun-06 31-dec-06 (Loss)/earnings Earnings for the purposes of #260,120 #156,828 #470,990 basic and diluted earnings per share being net loss attributable to equity shareholders --------------------------------------------------------------------- Number of shares Weighted average number of 31,714,119 31,695,611 31,695,611 ordinary shares for the purposes of basic loss per share --------------------------------------------------------------------- As the Company reported a loss for the year then, in accordance with IAS 33 Earnings per Share, the warrants and options in issue are not considered dilutive. 5 Cash generated from/(used in) operations Six months Six months Year ended ended ended 30-jun-07 30-jun-06 31-dec-06 # # # Operating profit/(loss) (438,380) (350,724) (850,495) Non-cash share-based payments 73,850 - 82,300 Depreciation charge 11,188 4,336 11,263 (Increase)/decrease in debtors 272,911 (18,263) (346,275) Increase/(decrease) in 128,388 (280,780) (341,205) creditors ---------------------------------------------------------------------- Cash generated from/(used in) 47,957 (645,431) (1,444,412) operations Tax (paid)/recovered - 9,138 - ----------------------------------------------------------------------- Net cash generated from/(used 47,957 (636,293) (1,444,412) in) operations ----------------------------------------------------------------------- 6 Share Capital On 25 April 2007, 50,000 ordinary shares of 0.1p were issued fully paid to certain employees as a discretionary bonus. The closing share price for the preceding day was 25.5p, which has been used for the purposes of accounting for this share-based payment. There were no changes to share capital during the two comparative periods. 7 Transition to IFRS WHAM Energy plc reported under UK GAAP in its previously published financial statements for the year ended 31 December 2006. The analysis below shows a reconciliation of net assets and profit/(loss) as reported under UK GAAP as at 31 December 2006 to the revised net assets and profit under IFRS as reported in these financial statements. In addition, there is a reconciliation of net assets under UK GAAP to IFRS at the transition date for this company, being 1 January 2006. There is also a reconciliation of net assets under UK GAAP to IFRS at the comparative interim date, being 30 June 2006. Reconciliation of equity Previous Effect of IFRS at 1 January 2006 GAAP transition to IFRS # # # Share capital 31,696 - 31,696 Share premium account 9,568,287 - 9,568,287 Other reserves 58,450 - 58,450 Retained earnings/ (115,400) (62,405) (177,805) (losses) ----------------------------------------------------------------------- Total equity 9,543,033 (62,405) 9,480,628 ----------------------------------------------------------------------- Reconciliation of equity Previous Effect of IFRS at 30 June 2006 GAAP transition to IFRS # # # Share capital 31,696 - 31,696 Share premium account 9,568,287 - 9,568,287 Other reserves 58,450 - 58,450 Retained earnings/ (257,320) (77,313) (334,633) (losses) ----------------------------------------------------------------------- Total equity 9,401,113 (77,313) 9,323,800 ----------------------------------------------------------------------- Reconciliation of equity Previous Effect of IFRS at 31 December 2006 GAAP transition to IFRS # # # Share capital 31,696 - 31,696 Share premium account 9,568,287 - 9,568,287 Other reserves 140,750 - 140,750 Retained earnings/ (490,483) (158,312) (648,795) (losses) ----------------------------------------------------------------------- Total equity 9,250,250 (158,312) 9,091,938 ----------------------------------------------------------------------- Explanation of adjustments to equity The only difference between IFRS and UK GAAP for the Company relates to the treatment of pre-licence costs, which were capitalised as part of the Company's single UKCS full cost pool in accordance with the applicable UK Statement of Recommended Practice (SORP), but which fall outside the scope of IFRS 6 and are accordingly expensed under IFRS. Pre-licence costs include all expenditures incurred in evaluating possible purchases, acquisitions or applications for exploration licences or rights prior to the actual purchase, acquisition or application being made. Such costs typically include time and associated overheads of technical specialists employed by the Company or by consultants and any data acquired to facilitate the decision-making process. Cash flow statement The Company's cash flow statement is presented in accordance with IAS 7 Cash Flow Statements ("IAS 7"). The statement presents substantially the same information as that required under UK GAAP, with the following principal exceptions: 1. Under UK GAAP, cashflows are presented under nine standard headings, whereas IFRS requires the classification of cash flows resulting from operating, investing and financing activities. 2. The cash flows reported under IAS 7 relate to movements in cash and cash equivalents, which include cash and short term liquid investments. Under UK GAAP, cash comprises cash in hand and deposits repayable on demand. Reconciliation of profit/ Previous Effect of IFRS (loss) for the year ended GAAP transition 31 December 2006 to IFRS # # # Gross profit/(loss) - - - Exploration expenses - (95,907) (95,907) Administrative expenses (754,588) - (754,588) ----------------------------------------------------------------------- Operating profit/(loss) (754,588) (95,907) (850,495) Finance income 379,505 - 379,505 ----------------------------------------------------------------------- Profit/(loss) before (375,083) (95,907) (470,990) taxation Taxation - - - ----------------------------------------------------------------------- Net profit/(loss) (375,083) (95,907) (470,990) ----------------------------------------------------------------------- Reconciliation of profit/ Previous Effect of IFRS (loss) for the six months GAAP transition ended 30 June 2006 to IFRS # # # Gross profit/(loss) - - - Exploration expenses - (14,908) (14,908) Administrative expenses (335,816) - (335,816) ------------------------------------------------------------------------ Operating profit/(loss) (335,816) (14,908) (350,724) Finance income 193,896 - 193,896 ------------------------------------------------------------------------ Profit/(loss) before (141,920) (14,908) (156,828) taxation Taxation - - - ------------------------------------------------------------------------ Net profit/(loss) (141,920) (14,908) (156,828) ------------------------------------------------------------------------ Explanation of adjustments to profit/(loss) As indicated above, pre-licence costs were capitalised as part of the Company's single UKCS full cost pool in accordance with the applicable UK Statement of Recommended Practice ("SORP"), but fall outside the scope of IFRS 6 and are accordingly charged against profit as exploration expense under IFRS. 8 Related parties transactions There have been no changes in the related parties transactions described in the last annual report, nor any related parties transactions that have taken place in the first six months of the current financial year, that could have a material effect on the financial position or performance of the Company in the six months ended 30 June 2007. This information is provided by RNS The company news service from the London Stock Exchange END IR LRMLTMMBBBPR
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