Widespread Energy Final Result to 31 March 2009

Widespread Energy – Final Announcement for the period to 31 March 2009

 

Your directors submit the audited financial statements of Widespread Energy Limited for the year to 31 March 2009.

 

The outcome for the period was a loss of $516,000 (2008 loss $85,000).

 

An analysis of the result is provided in the table below 

 

	Year to 31 March 2009 ($,000)	Year to 31 March 2008 ($,000)
Income	35	94
Administrative expenses	172	179
Exploration costs written down	107
Impairment on investments	272
Net Profit (loss) before income tax	(516)	(85)
Income tax
Net profit (loss) after tax	(516)	(85)

 

The reported result for the year reflected lower income (due to reduced cash reserves and lower interest rates), a partial write-down of our investment in Green Gate Limited, and exploration costs written off consequent to a decision to relinquish a non-prospective portion of our offshore West Coast exploration license. Operating costs were slightly reduced. 

 

Current Strategy

 

Widespread Energy operates in two distinct markets – in an operational sense we are active explorers in the oil and gas sector and we source our funding from equity investors.

 

Both sectors have experienced major setbacks in the last 12 months. The oil price is now approximately a third of levels prevailing this time last year and the equity markets, particularly those in the oil and gas junior exploration sector, have fared even worse.

 

As a result of these changes, Widespread Energy is not, and has not for several months, been attempting to either raise funds from investors or to actively seek farm-in partners for our two directly held petroleum exploration permits. These markets simply do not exist so we have avoided fruitlessly squandering our resources pursuing these objectives.

 

The strategy that we have adopted is to continue to work on our two licenses, to continue to meet work programme commitments and to pay our license fees in order to keep these assets in good standing. We still have the resources to do this.

 

Over time we expect market conditions to improve (they always do) and with that our ability to raise equity and/or to negotiate farm-in agreements should be enhanced.

 

As far as the latter option (farm-ins) there are already encouraging signs that the market is awakening.

 

The same difficult market conditions have forced Green Gate Limited, to relinquish 3 of its five prospecting licenses. Our write-down of this investment recognises this reality.

 

Our other significant endeavour, the Chatham Rise rock phosphate project, has been progressed to the extent that it can while we await the grant of the prospecting license.

 

Preliminary discussions have been held with a range of interested parties including potential buyers of the rock phosphate, NIWA (which holds much of the historic data gathered in previous exploration programmes), and potential arrangers of project finance.

 

Initial pre-feasibility studies have also been undertaken and the results of these are quite encouraging in the context of the present high rock phosphate prices.

 

Outlook

 

As Widespread Energy has no sources of income (apart from interest bearing cash deposits) ongoing trading losses are anticipated as the company continues to invest in the work programmes on granted permits.

 

The Company has the cash or near cash resources to operate at the present level of activity for at least the next year, meaning that no further funding is required in the short term. This may change if the Chatham Rise prospecting license is granted and if we resolve to immediately embark on an accelerated work programme to take better advantage of the present high rock phosphate prices.  

 

2009 Annual General Meeting

 

This meeting will be held at 2pm on Monday 29 June in the offices of Quigg Partners, Bayleys Building, Brandon Street, Wellington. 

 

 

For and on behalf of the Board,

 

Keith T Hindle                          Chris D Castle

Chairman                                   Director                                             

 

 

Appendix – NZX format announcement

 

Widespread Energy Limited

Full year ended 31 March 2009

This report has been prepared in a manner which complies with generally accepted accounting practice and gives a true and fair view of the matters to which the report relates and is based on audited accounts.

CONSOLIDATED OPERATING STATEMENT
NZ$'000: 31-Mar-09; 31-Mar-08

Total operating revenue: 35; 94
OPERATING SURPLUS (DEFICIT) BEFORE UNUSUAL ITEMS AND TAX: (516); (85)
Unusual items for separate disclosure: Nil
OPERATING SURPLUS (DEFICIT) BEFORE TAX: (516); (85)
Less tax on operating profit: Nil
OPERATING SURPLUS (DEFICIT) AFTER TAX BUT BEFORE MINORITY INTERESTS: (516); (85)
Less minority interests: Nil
Equity earnings: Nil
OPERATING SURPLUS (DEFICIT) AFTER TAX ATTRIBUTABLE TO MEMBERS OF LISTED ISSUER: (516); (85)
Extraordinary items after tax attributable to Members of the Listed Issuer: Nil
OPERATING SURPLUS (DEFICIT) AND EXTRAORDINARY ITEMS AFTER TAX ATTRIBUTABLE TO MEMBERS OF THE LISTED ISSUER: (516); (85)
Earnings per share: (3.1773); (0.5865)
Interim/Final/Special Dividend: Nil
Record Date: n/a. Date Payable: n/a
Imputation tax credit on latest dividend: n/a

This announcement is in relation to the full year to 31 March 2009.

Widespread Energy Limited will lodge with the NZX and send to holders its Annual Report once completed