Final Results

White Nile Limited 17 December 2007 White Nile Ltd / Ticker: WNL / Index: AIM / Sector: Oil & Gas 17 December 2007 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 2007. Overview White Nile's stated objectives have always been to develop the oil potential of Block Ba in Southern Sudan and build a new independent oil producer focused in Southern Sudan and the immediate region. To this end, during the period we made significant progress on the ground, having implemented and interpreted an extensive seismic programme, initiated local development programmes, identified numerous drill targets and commenced drilling in Block Ba, 200 km due north of Juba, in the Jonglei State of Southern Sudan. However, as investors will be aware, much of the attention on White Nile has become focussed on clarity of title for Block Ba. To date, we have had numerous assurances from leading Southern Sudanese government figures that our interests will be protected, with the likelihood being that we would be included in a consortium that will develop Block B in Southern Sudan, would include Block Ba, Block Bb and Block Bc. Indeed, when a delegation of Southern Sudanese government officials, headed by His Excellency the Vice President of the Government of Southern Sudan ("GoSS"), Dr Riek Machar, came to London in September, they met with the Board, its nominated adviser and certain shareholders, and reiterated that White Nile would receive a 22.5% interest in the enlarged Block B. More recent indications are however that White Nile will receive a majority stake in a new company that will control the 22.5% stake in the aforementioned consortium in tandem with Nile Petroleum Corporation Limited ("NilePet"), although this has not been officially confirmed. Obtaining clarity for shareholders over this matter remains the key priority for the Board. In Ethiopia we have identified deep basins, potentially containing sedimentary sections similar to that of the petroliferous Muglad and Melut Basins of Southern Sudan. We are currently in negotiations to sign a Production Sharing Agreement ("PSA") which we hope will be finalised before the end of the year. The Board is also looking at additional opportunities in the region to fulfil our strategy of creating a new independent oil producer focused in Southern Sudan and the immediate region. Southern Sudan Following the interpretation of high-density 2D seismic, the Company has gained a clearer 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, analogous to the producing Southern 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. The Unity, Heglig and Thar Jath oilfields have estimated oil in place of circa 600 million, 550 million and 1 billion barrels respectively. The interpretation of the seismic data has allowed White Nile to identify numerous structures, of which a number were prioritised. The Kedelai exploration well in Block Ba, 200 km due north of Juba, in the Jonglei State of Southern Sudan was spudded on 19 April 2007 and was being drilled to determine the hydrocarbon bearing potential of the south-eastern extension of the Muglad basin and in particular to evaluate reservoir objectives in the Aradeiba and Bentiu formations. This well has been suspended since the onset of the rainy season, and latterly while we await clarity of title. The Company has also been preparing additional drilling locations on two further prospects identified through its initial seismic programme in the Jonglei State. This is where the Board believes the Muglad Basin, which is productive at Thar Jath, Mala, Heglig and Unity to the northwest of Block Ba, extends into the concession area. A further 2D seismic surveying programme has already been planned and 3D seismic will be considered over any discoveries. Planning has also been finalised to continue a 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. However, these operations have now been temporarily suspended until the Board receives full clarity of title as discussed above. Ethiopia In Ethiopia, White Nile has a Joint Study Agreement with the Ethiopian Government's Petroleum Operations Department of the Ministry of Mines, over the prospective East African Rift system in the southwest of the country, an area which 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 approximately 70,000 sq km area is adjacent to Petronas' Gambela Block. As part of the exploration programme, ground geophysical surveys, including magneto-tellurics and gravity, have been completed in the Omo River area to the north of Lake Turkana. This data is being used to determine basin disposition and depth in this critical area of interference between three proven petroliferous basin trends known as the Turkana Depression. Early results of the interpretation have been encouraging and revealed deep basins, potentially containing sedimentary sections similar to that of the petroliferous Muglad and Melut Basins of Southern Sudan. Prospective areas have now been identified and a PSA has been submitted to the Council of Ministers. We expect to finalise negotiations on the PSA by the end of the year, following which our plan would be to design a reconnaissance 2D seismic programme to identify drill targets. Political In my Chairman's statement accompanying the 2006 report and financial statements, I indicated that, recognising the need for complete clarity of title, we were actively petitioning our partners, specifically the GoSS, to obtain a solution to what we recognised as a political situation. Unfortunately, the last year has involved a great deal of frustration in this regard, and as yet we have not been able to secure the clarity of title we have been seeking. As shareholders will be aware, the Company entered into the licensing agreement with NilePet in April 2005 in reliance on absolute assurances from the GoSS that NilePet owned the legal title to Block Ba and therefore had the right to allocate the oil concession. Over the past year, in order to obtain a resolution in Sudan, White Nile was requested by the GoSS to consider participating in a consortium to develop the enlarged Block B. In line with this, at the beginning of June, White Nile was informed that a Joint Executive Committee ('JEC') between the GoSS and the Government of National Unity in Khartoum had met to reach a compromise agreement with respect to certain oil concessions in Southern Sudan. The delegation from the GoSS included Dr Riek Machar, the Honourable Justice Paul Mayom Akec, the Minister of Internal Affairs and Chairman of NilePet, the Honourable Justice Michael Makuei Lueth, the Minister of Legal Affairs and Constitutional Development and the Honourable Luka Biong Deng, the Minister of the Operations of the President. The delegation later confirmed, as a result of agreement within the JEC, that White Nile would be entitled to participate in a consortium consisting of Total SA, Kuwait Foreign Petroleum Exploration Company, NilePet and Sudan National Petroleum Corporation, under which White Nile would hold a 22.5% interest and NilePet 10% in the enlarged Block B, consisting of Blocks Bb and Bc as well as Block Ba. This was confirmed to the market in our announcement of 6th and 14th June 2007. On 6th July White Nile was made aware of resolutions of the National Petroleum Commission of Sudan ("NPC") apparently signed by the Co-Chairman of the NPC on 17th June 2007. This indicated that White Nile would be removed from Block Ba and compensation paid for activities and money expended by the Company, but no official indication of these resolutions were given to the Board of White Nile. Following further visits by the directors of White Nile to Southern Sudan, where White Nile's participation in the aforementioned consortium was again reaffirmed, a high powered GoSS delegation travelled to London in September 2007. This was led by Dr Riek Machar who was accompanied by Madame Angelina Teny, the Minister of State for Energy in the Government of National Unity, the two representatives of NilePet on the Board of White Nile and Dr Bullen Bol, the Chief Executive of NilePet, amongst others. Meetings were held with the Board of White Nile, the Company's nominated adviser and certain major shareholders during which the GoSS delegation confirmed that White Nile would receive the 22.5% interest in the enlarged Block B. However, more recent indications are that the GoSS wish to place the 22.5% interest in the enlarged Block B into a new company called Southern Sudan Exploration & Production Company Limited. It was originally envisaged that this new company would become a wholly owned subsidiary of White Nile but later statements from the GoSS indicate that this new company will not be wholly owned by White Nile, although White Nile will have the majority interest in the company. We are constantly pressing for a resolution of these issues and will take all necessary steps to protect the position of White Nile. As stated earlier we entered into the licensing agreement on Block Ba and incurred considerable expenditure on seismic work and drilling in reliance on assurances from the GoSS and NilePet that they held the rights to the Block. We are pressing the relevant parties to confirm their position officially and I will update shareholders as soon as I can. Environmental White Nile is extremely conscious of its environmental obligations with the objective being to ensure that the community's needs and concerns will be addressed and that White Nile conforms to internationally accepted standards in protecting the environment. International consultancy firms have been utilised to conduct Environmental Impact Studies and we have a number of individuals within the Company dedicated to the adherence to legislation and best practise. Social White Nile has a strong commitment to actively assist the local community and helping the area regenerate as part of its commitment to social development. It is the Company's objective to employ and train local people, respond to the community's key needs and procure food locally, thus stimulating the local economy. Our commitment is to Southern Sudan and we feel we have a responsibility to help in its reconstruction and achieve its latent potential. Fundraising In June, the Company raised £18 million through the issue of 18,000,000 new ordinary shares of 0.1p each at £1.00 per share. The proceeds of the placing, conducted with existing as well as new institutional investors, are being utilised to fund the development of operations in Southern Sudan and Ethiopia, as well as to develop our activities within the region as a whole. 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 £1,424,165 (2006: £1,417,577). Conclusion Technically, this has been another year of progress where we have advanced both our Southern Sudanese and Ethiopian interests, both of which we believe to be highly prospective for hydrocarbons. In Southern Sudan we have reached the drill stage of exploration and in Ethiopia we are in the process of signing a PSA. However, although we remain confident in our position, the lack of clarity of title for Block Ba is obviously frustrating, which is highlighted by the recent chronology of events. The JEC proposed the formation of a new consortium to develop Block B which allocated 22.5% to White Nile. Reports then suggested that the NPC had ruled that White Nile would not be included in any consortium and would be compensated for its activities. Following subsequent meetings in Juba, the Company was again informed that it would be part of a consortium which was reinforced in London by a delegation of the GoSS officials led by the Vice President of Southern Sudan, Dr Riek Machar. However, the most recent development suggests that we would receive a controlling interest in a new Southern Sudanese company that would hold a 22.5% interest in the Block B consortium. As I believe investors will appreciate, the situation remains, at the least, frustrating. However, I remain positive about the Company and its prospects and believe that once we receive the clarity of title that we have been actively seeking in Southern Sudan, our value will be greatly enhanced and we can fully reward our shareholders for their continued support. Finally, I would like to take this opportunity of thanking all our employees and partners 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 2007 2007 2006 £ £ TURNOVER - - Operating expenses (1,663,639) (1,852,380) OPERATING LOSS (1,663,639) (1,852,380) Interest receivable 245,292 439,372 Interest payable (5,818) (4,569) LOSS ON ORDINARY ACTIVITIES BEFORE TAXATION (1,424,165) (1,417,577) Taxation - - LOSS ON ORDINARY ACTIVITIES AFTER TAXATION (1,424,165) (1,417,577) LOSS PER ORDINARY SHARE Basic and diluted (0.439p) (0.447p) 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 2007 Restated 2007 2006 £ £ FIXED ASSETS Intangible assets 30,413,539 17,343,039 Tangible assets 1,223,711 227,907 31,637,250 17,570,946 CURRENT ASSETS Debtors 3,556,191 340,137 Cash at bank and in hand 16,729,370 6,049,114 20,285,561 6,389,251 CREDITORS: Amounts falling due within one year (1,697,507) (974,728) NET CURRENT ASSETS 18,588,054 5,414,523 NET ASSETS 50,225,304 22,985,469 CAPITAL AND RESERVES Called up share capital 347,000 317,000 Share premium account 52,464,085 23,992,085 Shares to be issued - - Share option reserve 650,000 488,000 Profit and loss account (deficit) (3,235,781) (1,811,616) SHAREHOLDERS' FUNDS 50,225,304 22,985,469 CASH FLOW STATEMENT for the year ended 30 June 2007 2007 2006 £ £ Cash outflow from operating activities (865,834) (2,052,571) Returns on investments and servicing of finance 239,474 434,803 Capital expenditure and financial investment (14,039,384) (7,034,227) CASH OUTFLOW BEFORE USE OF LIQUID RESOURCES AND FINANCING (14,665,744) (8,651,995) Management of liquid resources (6,002,713) 10,525,153 Financing 25,346,000 (89,850) INCREASE IN CASH IN THE PERIOD 4,677,543 1,783,308 RECONCILIATION OF NET CASH FLOW TO MOVEMENT IN NET FUNDS 2007 2006 £ £ Increase in cash in the period 4,677,543 1,783,308 Cash outflow/(inflow) from increase/(decrease) in liquid 6,002,713 (10,525,153) resources MOVEMENT IN NET FUNDS 10,680,256 (8,741,845) Net funds at beginning of period 6,049,114 14,790,959 NET FUNDS AT END OF PERIOD 16,729,370 6,049,114 NOTES for the period ended 30 June 2007 1 BASIS OF PREPARATION The financial information for the year ended 30 June 2007 has not been audited and does not constitute the Company's statutory financial statements within the meaning of S240 of the Companies Act 1985. The preliminary report was approved by the Board on 17 December 2007. The statutory accounts for the year ended 30 June 2007 have not been filed with the Registrar of Companies nor reported on by the Company's auditors. The comparative results for the year ended 30 June 2006 are an abridged version of the audited financial statements subject to the prior year adjustment noted below which have been filed with the UK Registrar of Companies and contain an unqualified audit opinion. 2 SIGNIFICANT ACCOUNTING POLICIES The preliminary results have been prepared using accounting policies and practices consistent with those adopted in the accounts for the year ended 30 June 2006 with the exception of the application of FRS 20 (see below) and the policies and procedures that will be adopted in the accounts for the year ended 30 June 2007 . FRS 20 The adoption of FRS 20 - share based payments requires a prior period adjustment to be made. This has created a share option reserve at 30 June 2006 of £488,000 and increased intangible fixed assets by £488,000 at 30 June 2006. There was no impact in 2005. 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. 2007 2006 £ £ Loss for the financial period 1,424,165 1,417,577 2007 2006 No. of shares No. of shares Weighted average number of shares 324,627,397 316,942,466 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 Restated 2007 2006 £ £ Loss for the financial period (1,424,165) (1,417,577) Issue of shares during the period 30,000,000 - Issue costs (1,498,000) (89,850) Share option charge 162,000 488,000 Net addition to/(reduction in) shareholders' funds 27,239,835 (1,019,427) Opening shareholders' funds 22,985,469 24,004,896 Closing shareholders' funds 50,225,304 22,985,469 5 CASH FLOWS 2007 2006 £ £ a Reconciliation of operating loss to net cash outflow from operating activities Operating loss (1,663,639) (1,852,380) Depreciation 135,080 23,151 Increase in debtors (60,054) (340,137) Increase in creditors 722,779 116,795 Net cash outflow from operating activities (865,834) (2,052,571) b Analysis of cash flows for headings netted in the cash flow Returns on investments and servicing of finance Interest received 245,292 439,372 Interest paid (5,818) (4,569) Net cash inflow from returns on investments and servicing of finance 239,474 434,803 Capital expenditure and financial investment Purchase of intangible fixed assets (12,908,500) (6,825,351) Purchase of tangible fixed assets (1,130,884) (208,876) Net cash outflow from capital expenditure and financial (14,039,384) (7,034,227) investment Management of liquid resources (Increase)/decrease in cash deposited on short term deposit (6,002,713) 10,525,153 Net cash (outflow)/inflow from management of liquid resources (6,002,713) 10,525,153 Financing Proceeds from issue of share capital 26,844,000 - Share issue costs (1,498,000) (89,850) Net cash inflow/(outflow) from financing 25,346,000 (89,850) At 1 July Cash- At 30 June c Analysis of net funds 2006 flow 2007 £ £ £ Cash at bank and in hand 2,049,114 4,677,543 6,726,657 Cash on deposit 4,000,000 6,002,713 10,002,713 6,049,114 10,680,256 16,729,370 Copies of the Report and Accounts for the period ended 30 June 2007 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. For further information please visit or contact: Phil Edmonds White Nile Ltd Tel: 0845 108 6060 Jonathan Wright Seymour Pierce Ltd Tel: 020 7107 8000 Hugo de Salis St Brides Media & Finance Ltd Tel: 020 7242 4477 This information is provided by RNS The company news service from the London Stock Exchange