White Nile Issues Half-year Results
White Nile Ltd on Friday issued its results for six months ended 31 December 2006. The company posted a £699,200 loss (.219p loss per share, basic and diluted) on ordinary activities after taxes for the period. For the same period in 2005, the company reported a post-tax loss of £515,434 (.163p loss per share, basic and diluted). For the year ended 30 June 2006, White Nile posted a loss of £1,417,577 after taxes (.447p per share, basic and diluted).
--Seismic interpretation highlights multiple targets --Four drilling locations prioritized for development --Drill rig on site near Padak in Block Ba in Southern Sudan --First well to spud in April 2007
Statement by Phil Edmonds, Chairman:
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 program, we have identified numerous drill targets and our first drill rig is on site and due to spud in April 2007.
In the last 18 months, White Nile has worked with leading oil industry consultants and operatives and conducted an extensive seismic acquisition program 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 prioritized 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 focused on building a significant community development program 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.
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 utilizing 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.
White Nile remains focused 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 £699,200 (2006: loss of £515,434).
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 program.
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.
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