White Nile to begin oil drilling in South Sudan next month
March 30, 2007 (LONDON) — White Nile, the controversial British oil explorer headed by ex-England cricketer Phil Edmonds, saw its volatile shares rise 3p to 128p today after an upbeat update saying that it would begin oil drilling operations next month.
It its press statement (see below), the company said it has identified numerous drill targets at its flagship 67,000 sq km Block Ba in southern Sudan, and prioritized four drilling locations for development, with a drill rig on site and due to spud its first well in April.
The explorer, which has been involved in a war of words with French oil major Total over the rights to White Nile’s 67,000 sq km exploration block in southern Sudan, today reported a widening of losses to GBP700,000 in the six months to the end of December.
“With little proven data on the potential size of its reserves, the shares have been the subject of a two-way pull between industry backers like the RAB Capital hedge fund and bear raider Simon Cawkwell.” commented the Evening Standard today.
(ST)
White Nile Ltd Interim Results
LONDON, March 30 /PRNewswire-FirstCall/ — White Nile Ltd (‘White Nile’
or ‘the Company’) (AIM: WNL), the AIM listed oil and gas exploration
company, announces its results for six months ended 31 December 2006.
OVERVIEW
– Seismic interpretation highlights multiple targets
– Four drilling locations prioritised for development
– Drill rig on site near Padak in Block Ba in Southern Sudan
– First well to spud in April 2007
It gives me great pleasure to report on the Company’s progress towards
fulfilling its objective of becoming a leading independent oil producer
focused on Southern Sudan and the immediate region.
During the period under review we have made great progress at our
flagship project, the 67,000 sq km Block Ba in Southern Sudan. Having
implemented and interpreted an extensive seismic programme, we have
identified numerous drill targets and our first drill rig is on site and
due to spud in April 2007.
SOUTHERN SUDAN
In the last 18 months, White Nile has worked with leading oil industry
consultants and operatives and conducted an extensive seismic acquisition
programme on parts of Block Ba, in order to advance the block to
production. Following the interpretation of high-density 2D seismic, we
have identified numerous drill targets and prioritised four where we
believe the productive Muglad Basin extends into the concession area,
including one large structure of over 50 sq km. The contracted drill rig
has been imported from Europe and is now on-site ready for the first well
to be spudded in April 2007. This occasion signifies an important milestone
for White Nile and underlines the significant progress the Company is
making.
In addition to proving and developing the oil potential of Block Ba in
Southern Sudan, White Nile is also focussed on building a significant
community development programme to ensure the local communities benefit
appropriately during the whole life of White Nile’s operations. The Company
has taken a proactive role in the education of local workers, the provision
of general tools and equipment to the community, logistical support to
Government of Southern Sudan (‘GOSS’) officials in the immediate area and
the development of infrastructure. White Nile employed over 1,000 local
Southern Sudanese people to help repair 20 km of man made dyke between
Jalle and Maar. Furthermore, it has invested significant sums in a land
mine clearance operation undertaken by The Development Initiative in the
specific areas of seismic operation and on key roads and villages primarily
in the Bor/Padak area.
The Company has commissioned an Environmental and Social Impact
Assessment (‘ESIA’) study, which determines the environmental, social,
technical and economic aspects of developing the oil potential of the
concession area. This includes the local infrastructure of the area, namely
the construction of access roads, accommodation camps and eventually an oil
refinery, processing plant and pipeline. The ESIA is being carried out by
ESF Consultants, a Kenyan based independent environmental management
consultancy.
White Nile’s position with regard to the exploration and development
rights over Block Ba and the rival claim by the French oil company, Total
E&P Soudan S.A (‘Total’), remains the same. Following assurances from the
GOSS that it had the right to issue exploration and development concessions
on land in Southern Sudan, the Company signed an agreement over two years
ago with the state-owned petroleum company, Nile Petroleum Corp
(‘NilePet’), for the exploration and development of Block Ba. In that
transaction, NilePet received a 50% shareholding in White Nile in return
for a 60% interest in Block Ba, with the remaining 40% interest being
retained by NilePet.
In recent weeks Total has mounted a public-relations attack on White
Nile and has reaffirmed its suggestion that it has rights to develop Block
Ba under the terms of an agreement with the government in Khartoum in 1980.
However, the autonomous GOSS has transferred all the non producing oil
concessions in Southern Sudan to its state-owned petroleum company,
NilePet, which has the power to negotiate development agreements, such as
that which exists with White Nile. In this context, NilePet has, in
addition, entered into an agreement with Ascom a European oil production
company, for the exploration and development of Block 5b, which is
contiguous to Block Ba in Southern Sudan.
Total has also brought into question whether White Nile has the ability
to explore and subsequently develop an area with such high potential. The
Company’s structure lends itself to efficiency and good practice. It is
able to choose from among the best in the world within their respective
fields in seismic, demining, security, drilling and pipeline and refinery
development, while taking into account the local environment and your board
has no doubt over White Nile’s ability to develop Block Ba.
Within 18 months White Nile has conducted seismic acquisition on parts
of Block Ba. The interpretation of this seismic data has yielded a number
of prospects, three of which the Company intends to drill this year.
ETHIOPIA
The Joint Study with the Ethiopian Government’s Petroleum Operations
Division over the prospective East African Rift system in the southwest of
the country is progressing well. On-going geological and geophysical work
over this emerging exploration play has so far yielded positive results
with detailed gravity surveys indicating prospective depths of sediments in
the northern extension of the Turkana Rift system. Support for these
results has been obtained from complementary magneto-telluric (‘MT’)
soundings undertaken in early 2006. Follow-up MT work is expected to
reinforce this interpretation.
Preliminary geological studies utilising apatite fission track analyses
has indicated two possible phases of rifting, which support White Nile’s
exploration play of superimposed Cretaceous and Tertiary rifts systems with
a concomitant enhanced petroleum potential. In addition, the Joint Study
Area is to benefit from a regional airborne gravity and magnetic survey
that will also cover highly prospective areas of adjacent Kenya and South
Sudan. These are expected to highlight new areas of prospectivity within
the region.
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 GBP699,200 (2006: loss of GBP515,434).
CONCLUSION
The past six months have seen many positive developments for White
Nile. With our committed Board and management team, continued support from
the GOSS, local authorities and people, and with the infrastructure and
resources in place, we believe that White Nile will become a leading oil
producing company in Southern Sudan and the immediate area.
We have strong connections with many industry specialists in seismic,
de-mining, security, drilling, environmental consultancy and pipeline and
refinery development to bring Block Ba eventually into oil production,
whilst taking into account the local environment, people and development of
Southern Sudan. With the spudding of our first drill target scheduled for
April, we have reached the next phase in our development. We are looking
forward to the next six months and the exciting developments that we
believe will come from the 2007 drilling development programme.
White Nile’s structure enables the owners of the resource, in this case
the GOSS and the People of Southern Sudan, not only significant control but
also, through their shareholding in White Nile, access to world capital
markets and the ability to bring in technical expertise to develop Block
Ba.
Finally, I would like to take this opportunity to thank most
particularly the people and the Government of Southern Sudan and the local
communities, the real owners of the resources of Block Ba, for their help,
cooperation and support. I would also like to thank the management team,
shareholders and all those involved in the Company who have supported and
believed in White Nile’s cause, and helped the Company to reach the
position it is in today.
Phil Edmonds
Chairman
UNAUDITED PROFIT AND LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
Six months Six months Year ended
ended 31 Dec ended 31 Dec 30 June
2006 2005 2006
GBP GBP GBP
TURNOVER – – –
Net operating
expenses ( 795,952) ( 775,110) ( 1,852,380)
OPERATING (LOSS) ( 795,952) ( 775,110) ( 1,852,380)
Interest receivable 100,587 259,676 439,372
Interest payable ( 3,835) – ( 4,569)
(LOSS) ON ORDINARY
ACTIVITIES BEFORE
TAXATION ( 699,200) ( 515,434) ( 1,417,577)
Taxation – – –
(LOSS) ON ORDINARY
ACTIVITIES AFTER
TAXATION ( 699,200) ( 515,434) ( 1,417,577)
(LOSS) PER SHARE
Basic and diluted (.219p) (.163p) (.447p)
UNAUDITED BALANCE SHEET AT 31 DECEMBER 2006
31 December 30 June
31 December
2006 2005 2006
GBP GBP GBP
FIXED ASSETS
Intangible assets 20,453,538 13,636,597 16,855,039
Tangible assets 728,479 40,072 227,907
21,182,017 13,676,669 17,082,946
CURRENT ASSETS
Debtors 2,331,426 410,020 340,137
Cash at bank and in hand 10,925,879 9,467,927 6,049,114
13,257,305 9,877,947 6,389,251
Creditors: Amounts falling
due within one year ( 1,064,503) ( 70,604) ( 974,728)
NET CURRENT ASSETS 12,192,802 9,807,343 5,414,523
NET ASSETS 33,374,819 23,484,012 22,497,469
CAPITAL AND RESERVES
Called up share capital 329,000 317,000 317,000
Share premium account 35,556,635 24,076,485 23,992,085
Profit and loss account ( 2,510,816) ( 909,473) ( 1,811,616)
EQUITY SHAREHOLDERS’ FUNDS 33,374,819 23,484,012 22,497,469
UNAUDITED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 31 DECEMBER 2006
Six months Six months Year ended
Ended Dec ended 31 30 June
2006 Dec 2005 2006
GBP GBP GBP
Cash outflow from operating
activities ( 666,663) (1,965,650) ( 2,052,571)
Returns on investment and
servicing of finance 96,752 259,676 434,803
Capital expenditure and
financial investment (4,129,874) (3,611,608) ( 7,034,227)
CASH OUTFLOW BEFORE USE OF LIQUID
RESOURCES AND FINANCING (4,699,785) (5,317,582) ( 8,651,995)
Management of liquid resources (5,000,000) (5,489,316) 10,525,153
Financing 9,576,550 ( 5,450) ( 89,850)
(DECREASE)/INCREASE IN CASH IN
THE PERIOD ( 123,235) 166,284 1,783,308
RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS
Six months Six months Year ended
Ended Dec ended 31 30 June
2006 Dec 2005 2006
GBP GBP GBP
(Decrease)/Increase in cash in
the period ( 123,235) 166,284 1,783,308
Cash outflow/(inflow) from
increase/(decrease) in liquid
resources 5,000,000 (5,489,316) ( 10,525,153)
MOVEMENT IN NET FUNDS IN THE
PERIOD 4,876,765 (5,323,032) ( 8,741,845)
NET FUNDS AT BEGINNING OF PERIOD 6,049,114 14,790,959 14,790,959
NET FUNDS AT END OF PERIOD 10,925,879 9,467,927 6,049,114
Notes
1. These interim financial statements do not constitute statutory
accounts of the company within the meaning of Section 240 of the Companies
Act 1985 and should be read in conjunction with the Annual Report for 2006.
Statutory Accounts for the year ended 30th June 2006, which were prepared
under accounting practices generally accepted in the UK, have been reported
on by the auditors. The report of the auditors was unqualified and did not
contain statements under section 237(2) or (3) of the Companies Act 1985.
2. (LOSS) PER ORDINARY SHARE
Basic and diluted loss per share is calculated by reference to the
(loss) for the financial period and the weighted average number of shares
in issue in the period of 318,704,918 (six months to 31 December 2005:
316,885,870, year ended 30 June 2006: 316,942,466).
SOURCE White Nile Limited