REG - Westmount Energy Ld - Final Results & Notice of AGM
19/11/2024 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20241119:nRSS6998Ma&default-theme=true
RNS Number : 6998M Westmount Energy Limited 19 November 2024
19 November 2024
WESTMOUNT ENERGY LIMITED
("Westmount" or the "Company")
Final Results & Notice of AGM
The Company is pleased to announce its Final Results for the year ended 30 June 2024, and hereby gives notice that the Annual General Meeting of Westmount Energy Limited will be held at Floor 4, Liberation House, Castle Street, St Helier, Jersey JE1 4HH, Channel Islands on 12 December 2024 at 11.00.
Copies of the Company's results and Notice of AGM are available on the
Company's website, www.westmountenergy.com from today.
CHAIRMAN'S REVIEW
2024 Highlights
· Canje Block, Guyana operator is reported to have secured a 1-year
extension to March 2026; specific guidance on timeline of drilling is not yet
available
· Kaieteur Block - Exit of ExxonMobil and Hess with return of
licence equity to Ratio Petroleum 50% and CEC 50%; Farm-down process underway
spearheaded by new operator, Ratio Petroleum
· Ratio Energy Partnership Ltd. proposing to acquire Ratio
Petroleum at 0.35NIS per share unit subject to shareholder approval
· CEC redeems all outstanding loan notes with the large US Private
Equity Fund becoming a 21.4% shareholder via conversion of some loan notes at
circa USD$9.03/share
· Orinduik Block - Farm-down process underway to support drilling
of Cretaceous commitment well; neighbouring 2018 Hammerhead Discovery has
recently been announced by Stabroek operator, ExxonMobil, as the 7(th)
development on Stabroek block, followed by the drilling of Hammerhead-4
appraisal well proximal to Orinduik block boundary
· Investment in Africa Oil Corp, Orange Basin - giant Venus light
oil discovery - development planning advances with first FPSO to target
160,000 bpd oil and 500 mmscf/d gas handling capacity.
· Resumption of Namibian exploration drilling campaign in October
2024 with Tamboti-1x - targeting a billion-barrel resource - expected to reach
main reservoir during December
· Blocks 2913B and 2912, Namibia - completion of
Impact/TotalEnergies farm-down
transaction yields Impact USD$99M plus an interest free 'loan carry', with no
cap, to fund Impact's share of all forward expenditures, on these blocks, to
first oil
· Block 3B/4B, South Africa - Eco and Africa Oil Corp farm-down to
TotalEnergies and QatarEnergy completed in advance of South African, Orange
Basin, drilling campaign
· Company had cash of £0.222M and listed marketable securities of
£0.624M at Year End, 30(th) June 2024; no debt
The global energy landscape continues to evolve against the demands for more
energy, less emissions and competitive capital returns. Rising populations and
aspirations for higher living standards continue to drive a relentless growth
in demand for energy which is forecast to be only partially offset by energy
efficiency gains. Under most scenarios oil and gas are forecast to remain as
significant pillars of the energy infrastructure with both underinvestment and
geopolitics contributing to the perception that energy market disruption risks
are higher on the supply side than the demand side(1). Nevertheless, demand
forecasts for oil and gas are more challenging and uncertain as the world
grapples with energy transition and net-zero ambitions. For example, wildly
conflicting views prevail with respect to the timing of peak oil demand, with
OPEC's 2024 Annual World Oil Outlook suggesting oil demand will reach 120
million b/d by 2050, with no peak demand in sight, in stark contrast with the
'Oil 2024' analysis of the International Energy Agency (IEA) which is
forecasting peak oil demand towards the end of this decade, with a total
supply capacity rising to nearly 113.8 mb/d by 2030, a whopping 8 mb/d above
IEA's projected global demand of 105.4 mb/d at that time (2,3).
In the near term, global oil demand growth has been slowing sharply from its
post pandemic rates driven primarily by a slowing Chinese economy, oil
substitution by alternative fuels and the effects of prolonged higher interest
rates that have been used to tackle inflation in developed economies. The
IEA's September Oil Market report is forecasting 900k b/d demand growth in
2024 versus the 2.3m b/d growth recorded in 2023. Oil prices have traded in
the $70-$93/bbl range during the last year - but have demonstrated continued
volatility - influenced by geopolitical instability created by the
Iran/Israeli and Russia/Ukraine conflicts, OPEC+ posturing and the softening
global demand outlook. In early September Brent traded at $70/bbl down from an
early April 2024 high of $91/bbl which prompted Saudi Arabia and its OPEC+
allies to announce that they would postpone by two months the start of their
planned unwinding of extra voluntary production cuts of 2.2m b/d which had
been in place since July 2023.
In the meantime, governments continue to recalibrate their energy transition
policies and emission reduction targets in the face of energy security
concerns and the challenge of energy affordability for citizens grappling with
cost-of-living increases over the past 2 years. Notwithstanding the massive
investment and buildout of renewable energy capacity over the past 5 years,
renewables have only met circa 59% of new global energy demand in 2023, with
fossil-fuel use continuing to grow in absolute terms during this period(3).
Both governments and major integrated energy providers struggle to choreograph
energy transition policies with investment strategies in the face of capital
demands, uncertain technologies and the need to maintain a resilient energy
infrastructure. For example, New Zealand's government, in the face of
escalating energy shortages and soaring prices, has pledged to introduce
legislation to repeal a 2018 ban on offshore petroleum exploration before the
end of 2024 and to attract investment to the country's oil and gas sector. At
the same time, it has been reported that European supermajors Shell and BP
have been responding to investor pressures by rethinking their '2030 renewable
strategies' - with BP rowing back on its 2020 pledge to cut oil and gas output
by 40%(4).
While upstream investment is forecast by the IEA to reach USD $565 billion in
2024(3), its highest level since 2015, in common with the broader energy
spectrum, the risk of underinvestment, relative to what is needed to meet
forecast energy demand across a range of 'net zero' demand trajectories,
remains a key theme for the oil and gas sector(,5,6). Recent improvement in
the financial performance of the upstream sector combined with a drive by the
bigger companies to high-grade their portfolios with higher return, lower
carbon (Scope 1 and 2 emissions), oil and gas prospects is likely to
contribute to increased exploration spending in the near term(7). Spending in
deepwater and ultra-deepwater areas is forecast to grow most rapidly as the
inherent emission advantages of developing large resources in highly
productive deepwater reservoirs should continue to attract capital as industry
players high-grade prospect portfolios to align with ESG investment metrics
and financial return thresholds. For example, Wood Mackenzie's review of 30
upstream projects > 50 MMboe, which could reach FID in 2024, found that the
average emissions intensity for the 'FID Class of 2024' is 13.6 kgCO2e/boe,
well below the global upstream average of 21 kgCO2e/boe(8). Deepwater
production is projected to increase by over 60% between 2022 and 2030 with the
NOCs and majors continuing to dominate while Mid-Caps retreat from this
space(9).
Notwithstanding this trend, it's been a disappointing summer for Atlantic
margin frontier/emerging basin deepwater exploration drilling - with a number
of apparently unsuccessful high impact wells such as Argerich-1 (Argentina),
Sitka-1 (Canada), Trumpetfish-1 (Guyana), Persephone-1 (Canada), Niamou
Marine-1x (Congo, Brazzaville) and Atum-1x (Guinea-Bissau). These outcomes,
should reinforce the focus by the majors on the more prolific petroleum
systems of the emerging deepwater Guyana-Suriname & Orange basins - two
areas that remain well positioned to capture their share of this increased
exploration spending.
Guyana-Suriname Basin (offshore Guyana)
Since 2015 offshore Guyana has been transformed from a frontier deepwater
exploration opportunity into the industry's largest new oil province with more
than 11 billion barrels of oil equivalent discovered recoverable resource to
date. Against a backdrop of some intermittent friction with respect to the
border with Venezuela, Guyana has become a significant source of non-OPEC
production growth and is on track to become the largest oil producer per
capita, globally, next year. With the three projects on stream - Liza Phase 1,
Liza Phase 2 and Payara - already demonstrating aggregate peak production
levels of 660k BOPD (September 2024), and with Yellowtail expected to start
production in 2025 with an initial target of 250k BOPD, the country is on a
trajectory for 900k BOPD by late next year. In addition, with the Uaru (250k
BOPD, start-up 2026) and Whiptail (250k BOPD, start-up late 2027) projects
already sanctioned, Guyana's oil production capacity is headed for 1.4M BOPD
and beyond, with the potential for up to 10 FPSOs(10). Furthermore, a 7(th)
project - the Hammerhead development - which is expected to utilise a
converted FPSO, is targeting between 120,000 and 180,000 barrels of oil per
day (b/d) and is on track for FID in 2025, with first oil planned for 2029.
In parallel with development activities exploration drilling has also
continued on the Stabroek block throughout 2023 and into 2024. Following on
from discoveries at Fangtooth SE-1 (61m oil-bearing) and Lancetfish-1 (28m
oil-bearing) announced in January and April 2023, respectively, it was also
reported in October 2023 that a successful appraisal well at Lancetfish-2 (38m
net oil pay) had encountered an additional 20m of net oil pay in a new
discovery interval. On 15(th) March 2024 ExxonMobil announced its first
discovery for the year at Bluefin-1 (60m hydrocarbon bearing) in the southeast
of the block, adjacent to the Canje block boundary. A noticeable shift in
exploration drilling focus appears to have occurred during 2024 with the
targeting of hub class prospects at Trumpetfish-1 and Redmouth-1, Redmouth-1A
(results unknown) in a relatively undrilled area to the northwest of the
initial Liza discovery and also significant appraisal drilling/testing
operations targeting the more gas rich resources in the southeast of the block
(Haimara-1, -2,-3,-4, Bluefin-1). Separately, in June 2024, it was reported
that the government of Guyana had selected a U.S. startup, Fulcrum LNG, in
partnership with ExxonMobil, to assist with monetization of gas resources
which could be produced on a large scale, for export(11).
On a smaller scale, Guyana's first Gas to Energy project is at an advanced
stage. On the 9th October 2024 it was reported that a pipeline connecting the
Liza Phase 1 and Phase 2 FPSOs with onshore integrated gas processing
facilities (currently under construction at Wales, West Bank Demerara) had
been mechanically completed and pressure tested. The pipeline has a capacity
to transport circa 130 million cubic feet of gas per day (mmcf/d) but will
initially deliver approximately 50 mmcf/d to feed the 300MW power plant and
NGL facility. The 200km pipeline could be in service by year end 2024(12). The
project, which is expected to help lower electricity costs and reduce
emissions once completed next year, will be the first to take advantage of
associated gas produced with the oil on the Stabroek Block.
In July 2023 Hess reported that the Stabroek partners had secured a one-year
extension to the Stabroek exploration licence, from October 2026 to October
2027, as well as the postponement of a 20% relinquishment decision until
October 2024, both as a result of force majeure due to the COVID-19 pandemic.
On 23rd October 2023 Chevron Corporation announced that it had entered into a
definitive agreement with Hess Corporation to acquire all of the outstanding
shares of Hess in an all-stock transaction valued at $53 billion, with a total
enterprise value of the transaction, including debt, of $60 billion. The
transaction was originally expected to close in H1 2024. However, on 6th March
2024 it was reported that ExxonMobil had filed for arbitration, with the
International Chamber of Commerce (ICC) in Paris, to assert it's right of
first refusal under the Stabroek JOA. Subsequently, the Chevron-Hess merger
has cleared other hurdles, including shareholder approvals and FTC anti-trust
review, with the ICC arbitration hearing now set for May 2025 and a ruling to
be made within the following 3 months.
Outside of Stabroek - on the Corentyne Block - after protracted drilling
operations, CGX Energy reported an oil discovery at Wei-1 on the 28(th) June
2023. In addition to the previously announced discovery of 23.5 metres of
net oil pay in the Maastrichtian-Campanian interval they reported that 64
metres of hydrocarbon bearing sandstone had also been logged in the Santonian
interval. While fluid sampling indicated the presence of light oil in the
Campanian and sweet medium crude oil (24.9(o)API) in the Maastrichtian, fluid
samples had not been obtained in the Santonian interval due to downhole tool
failure(13). The commercial potential of the Wei-1 discovery or the earlier
Kawa-1 discovery has yet to be determined.
Subsequently, in December 2023 a joint CGX Energy and Frontera Energy news
release indicated that the JV's assessment, of the Maastrichtian interval in
the northern part of the Corentyne block, estimated 514-628 Pmean Unrisked
Gross Prospective Resources - with the potential for a standalone oil resource
development(13). An investment bank, Houlihan Lokey, was appointed to
support pursuit of strategic options but a roadmap has yet to emerge.
In December 2022, the Guyanese government launched a Licensing Round for 14
offshore blocks (3 deepwater and 11 shallow water blocks) under revised fiscal
and contractual terms including biddable signature bonus with a minimum
threshold of USD $20M and $10M for deepwater and shallow water blocks,
respectively. On the 15(th) September 2023 it was announced that bids had been
received for eight of the fourteen blocks on offer, with a total of 14 bids
received from 6 groups, including the ExxonMobil/Hess/CNOOC and the
TotalEnergies/QatarEnergy/Petronas groups. Contract negotiations are
continuing but, on the 16(th) October 2024, it was reported that agreement had
been reached on the new PSA terms with respect to five of the awarded
blocks(14).
In the Surinamese sector exploration, appraisal and development activities
have continued through this period. In September 2023 the Block 58 operator,
TotalEnergies, reported that, following a successful appraisal well at
Krabdagu-3, the Sapkara South and Krabdagu low-GOR oil discoveries were now
fully appraised. On 1(st) October 2024, Suriname's first offshore development
was confirmed when FID was announced for the development, renamed 'GranMorgu',
with First Oil scheduled for mid-2028. This development brings together a
combined 750 million barrels of recoverable resources using an all-electric,
220,000 bopd FPSO, with 4-year plateau and full gas reinjection - meeting the
operator's requirements in terms of unit cost (CAPEX + OPEX $19/boe) and
emissions intensity (<16 Kg/boe CO2)(15). The GranMorgu FPSO is designed to
accommodate future tie-back opportunities that would extend its production
plateau.
Elsewhere, offshore Suriname, Petronas has been progressing the potential for
an integrated oil and gas development in the area of Block 52. On the 2(nd)
November 2023 Petronas reported that Roystonea-1 had encountered several
oil-bearing Campanian sandstone reservoir packages which might have potential
development synergy with the earlier Sloanea-1 discovery made in 2020. On
16(th) May 2024 Petronas announced a third discovery on Block 52, with
Fusaea-1 encountering several oil and gas-bearing sandstone reservoirs in the
Campanian interval. Subsequently, on 8(th) August 2024, a successful appraisal
well at Sloanea-2 was reported, with Petronas flagging the potential for a
standalone Floating Liquified Natural Gas (FLNG) project at the field.
On the 18th December 2023, Staatsolie announced the signature of three new
PSCs for deepwater blocks offshore Suriname - awarded as a result of the
November 2022 Demarara Bid Round - Block 63 (Petronas 100%), Block 64
(TotalEnergies 40%, QatarEnergy 30%, Petronas 30%) and Block 65 (Shell 60%,
QatarEnergy 40%). An exploration well will be drilled on both Block 64 and
Block 65 during the first 3-year exploration phase. On 13(th) September 2024
Staatsolie announced the signature of two new PSCs (Blocks 14 & 15) with
Petrochina, a subsidiary of CNPC.
In summary, exploration drilling results continue to support the presence of
multiple plays, quality reservoirs and the potential for stacked-pay drilling
opportunities within the Guyana-Suriname basin. It is against this evolving
backdrop that the hydrocarbon plays and prospects have been high-graded on the
Kaieteur, Canje and Orinduik blocks and JV alignment is being progressed with
a view to the identification of optimal targets for the next phase of
drilling, while progressing the ongoing environmental permitting processes and
financing challenges where relevant.
Orange Basin (offshore Namibia)
In early 2022, the deepwater Orange Basin became the latest global exploration
hotspot, ignited by the announcements in quick succession of major oil
discoveries at Graff-1x on Block 2013A and Venus-1x on Block 2913B by groups
headed by Shell and TotalEnergies, respectively. These play-opening
discoveries triggered a wave of deepwater exploration and appraisal in the
Orange Basin, which has yielded a series of significant discoveries (Graff-1x,
Venus-1x, La Rona-1x, Jonker-1x, Lesedi-1x, Mopane-1x, Mopane-2x, Mangetti-1x
and Enigma-1x) across three blocks with 13 out of 15 successful wells drilled
to date and a NAMCOR estimate of +21 Bn boe in-place resources discovered
since early 2022(16).
These exploration successes have been followed by a flurry of appraisal
activities, including the drilling of large appraisal step-out wells at
Venus-1A, Venus-2A and Mangetti-1x on Block 2913B, at Jonker-1A and Jonker-2A
on Block 2913A and at Mopane-2x on the Galp Energia ("Galp") operated Block
2813B. A further ramping up of exploration activity in the basin has been
triggered by these early successes with a number of big company
farm-ins/options (Chevron PEL90 and Woodside PEL87, respectively) resulting in
large scale 3D seismic acquisition programs on adjacent acreage, in addition
to infill 3D acquisition programs on the discovery blocks.
In addition to the appraisal activities carried out on the Venus discovery
during this period, the first exploration well on Block 2912, Nara-1X, was
completed in September 2023 but was deemed non-commercial. The Tungsten
Explorer drillship was then mobilized to drill a dual-purpose exploration and
appraisal well - Mangetti-1X - on Block 2913B, at the northern end of the
giant Venus light oil accumulation. On the 8th February 2024 it was reported
by AOC that, in addition to confirming the northern extension of the Venus
discovery, Mangetti-1X had also intersected hydrocarbon bearing intervals in
the shallower Mangetti fan prospect, a separate fan system to the Venus oil
discovery, indicating a second significant discovery on Block 2913B.
In January 2024 Galp announced that it had successfully drilled, logged and
cored (deeper target only) the Mopane-1x well - encountering two separate
target intervals, AVO-1 and the deeper AVO-2 target, each containing a
significant column of light oil in reservoir sands of high quality. On the
14(th) March 2023 Galp reported that it had successfully completed an 8 km
step-out well at Mopane-2x - also encountering a significant column of light
oil in reservoirs of high quality. This well found the AVO-1 appraisal target
had the same pressure regime as the Mopane-1x well, confirming the lateral
extension of this discovery. All three targets in Mopane-2x (AVO-1, AVO-3 and
a deeper target) were fully cored and logged. Subsequent well testing at
Mopane-1x achieved an equipment constrained flow rate of 14kboepd. On 21(st)
April 2024, Galp also confirmed that the initial drilling campaign indicates
good reservoir porosities, high pressures and high permeabilities in large
hydrocarbon columns with fluid samples indicating very low viscosity oil with
minimum CO2 and no H2S present - all informing Galp's initial assessment of
circa 10 Bn boe of in-place hydrocarbon resources in the Mopane
complex(17).
In April 2024, Shell was reported to have wrapped up its multi-well
exploration and appraisal campaign on PEL 39 (Block 2913A) with the drilling
of the Enigma-1x discovery.
In May 2024 Azule Energy, a joint venture between BP and Eni, announced a
farm-in agreement with Rhino Resources Namibia for a 42.5% stake in Block
2914A (PEL85), with the option to become operator of the block, subject to
customary approvals.
Over the past few months much industry attention has been focused around Galp
and its PEL83 farm-out process as it seeks to derisk the asset by attracting a
new partner to help further explore the acreage and also appraise and develop
the giant Mopane accumulation.
After a lull in Orange Basin drilling activity between May and October,
drilling operations have now recommenced - with TotalEnergies (Block 2913B)
spudding the Tamboti-1x exploration well on 20(th) October 2024, using the
DeepSea Mira semi-submersible rig; Galp spudding the Mopane-1A appraisal well
on 24(th) October, using the Santorini Drillship, the first well in a
4-well program of 2 appraisal + 2 exploration wells on PEL 83; Chevron due to
spud a well on PEL90 (DeepSea Bollsta semi-submersible rig) and Azule
Energy/Rhino Resources planning to commence a 2 well exploration program on
PEL 85 (Block 2914A) by year end (Noble Venturer Drillship).
With moderate above ground risks, favourable fiscal terms (government take is
circa 57%), prolific deepwater reservoirs and multiple play opening
discoveries, the Orange Basin, offshore Namibia looks to be at the early part
of the creaming curve with the potential for the discovery of additional large
scale advantaged resources.
Guyana-Suriname Basin - offshore Guyana
Kaieteur Block (offshore Guyana)
The southern portion of the Kaieteur Block is covered by a 5,750km(2) 3D
seismic survey, which was acquired in 2017/18 and has provided the foundation
for maturing a significant prospect inventory on the block. A single prospect
has been drilled to date which resulted in a sub-commercial oil discovery. The
ExxonMobil operated Tanager-1 well, which was drilled in H2 2020, encountered
16 metres of net oil pay (20(o)API oil) in high-quality sandstone reservoirs
of Maastrichtian age with a volumetric 'Best Estimate' Unrisked Gross (2C)
Contingent Oil Resource of 65.3 MMBBLs (Low to High Estimates 17.7 MMBBLs to
131 MMBBLs) - Netherland, Sewell & Associates Inc. ("NSAI") published CPR
(February 14, 2021). However, this discovery is currently considered to be
non-commercial as a standalone development.
Subsequent to the Tanager-1 discovery, on May 24, 2021, it was announced that
Hess Corporation ("Hess") had increased its working interest ("WI") in the
Kaieteur Block, offshore Guyana, from 15% to 20% via the farm-down of a 5% WI
by Cataleya Energy Limited ("CEL"). However, in spite of a number of
subsequent postponements, the operator ExxonMobil decided not to exercise its
option to drill a second well on the block.
On 27(th) September 2023 it was announced by Ratio Petroleum Energy Limited
Partnership ("Ratio Petroleum"), that both ExxonMobil and Hess had elected to
withdraw from the Kaieteur Block and return their participating interests to
the original Kaieteur Licence holders, Ratio Guyana Limited ("RGL") and
Cataleya Energy Limited ("CEL"). The parties are now seeking government
approval to reassign the participating interests, so that RGL and CEL will
each retain a 50% participating interest, and to appoint RGL as the operator
of the block. It was also announced that under the terms of the Kaieteur
Petroleum Agreement, and upon submission of an application to enter the second
extension period, the participating interests on the block will have until
February 2025 to commit to drilling a well. In this context, it is noted, that
Ratio Petroleum is actively seeking a farm-down of participating interests
with a view to bringing a new deepwater operator to the block. On the 17(th)
November 2024 Ratio Petroleum reported that a one-year extension, to February
2026, had been granted to the drilling decision date. In parallel, on the
29(th) September 2024, Ratio Petroleum announced that it had received a
buy-out offer form Ratio Energy Partnership Ltd. (already a significant
shareholder in Ratio Petroleum) at 0.35NIS per share unit, subject to
shareholder approval. Ratio Energy Partnership Ltd. is a well-capitalised TASE
listed company, with a 15% interest in the giant, producing, Leviathan Gas
Field, offshore Israel and a current market capitalisation in excess of USD
$800M.
In this regard, it is also of note that the two deepwater blocks (D1 &
D2), immediately adjacent to the Kaieteur block, have been the subject of at
least one application during the most recent Guyanese Bid Round which offered
acreage under less benign fiscal terms than the original Kaieteur Block terms.
As of the 30(th) June 2024, the Kaieteur Block is operated by an ExxonMobil
subsidiary, Esso Production & Exploration Guyana Limited (35%), with CEL
(20%), RGL (25%) and a subsidiary of Hess Corporation, Hess Guyana (Block B)
Exploration Limited (20%) as partners. Subsequent to the announcement on the
27(th) September 2023 of the withdrawl from the Kaieteur Block of the
ExxonMobil and Hess subsidiaries and upon the reassignment of their interests
to the original Kaieteur Licence holders, the Kaieteur Licence interests will
be as follows: RGL 50% and operator; CEL 50%. As of the 30(th) June 2024,
Westmount retains a holding of approximately 4.1% of the issued share capital
of Cataleya Energy Corporation ("CEC") the parent company of CEL and circa
0.04% of the issued share capital of Ratio Petroleum Energy Limited
Partnership ("Ratio Petroleum") the ultimate holding entity with respect to
RGL.
Canje Block (offshore Guyana)
In 2016, ExxonMobil, as operator, acquired in excess of 6,100 km(2) of 3D
seismic covering the entire Canje Block. Subsequent processing and
interpretation of this dataset was used to define a substantial prospect
inventory on the block with three prospects (Bulletwood-1, Jabillo-1, and
Sapote-1) high-graded for drilling in the initial drilling campaign in 2021.
All three wells were targeting Late Cretaceous basin floor fans and channel
complexes. Although the drilling confirmed the presence of the Guyana-Suriname
petroleum system, including the presence of some quality reservoirs at all 3
locations, no commercial hydrocarbons were encountered.
Subsequent to the completion of this first phase of drilling on block the
focus of the Canje JV partners has been on the analysis and assimilation of
the 2021 drilling results and data gathering program, the reprocessing and
re-interpretation of the 3D seismic data, and the high-grading of the
Cretaceous prospect inventory including the prospects in the deeper emerging
Santonian-Cenomanian plays.
On 11(th) September 2023 the operator filed a Cumulative Impact Assessment
("CIA") for the Canje Block with the EPA. This CIA report indicates that
exploration drilling on the Canje Block could potentially recommence from
2024, though well specific guidance has not yet been confirmed by JHI or any
of the Canje partners. In addition, the operator is reported to have secured a
one-year extension to the Canje Licence to March 2026(18).
Westmount holds an indirect interest in the Canje Block as a result of its
circa 6.2% interest (see Table 1) in the issued share capital of JHI
Associates Inc. ("JHI"), as of the 30(th) June 2024. The company also holds an
additional indirect interest in the Canje Block as a result of its
shareholding in Eco (Atlantic) Oil and Gas Ltd. ("EOG") and following the
investments in JHI Associates Inc. ("JHI") announced by EOG on the 28(th) June
2021 and the 19(th) January 2022.
On the 25(th) September 2023 Argos Resources Limited ("Argos") announced the
completion of a transaction with JHI which resulted in the acquisition of
operatorship and 100% working interest in North Falklands Basin Production
Licence PL001 by JHI in return for a consideration of 8,467,820 JHI Common
Shares ("the Consideration Shares") and £303,500 in cash. It was stated that
these Consideration Shares are expected to represent approximately 9.3 per
cent of the enlarged share capital of JHI following completion of the
transaction. Furthermore, it was also announced, that following the passing of
resolutions at the Argos general meeting held on the 22nd September 2023, that
Argos had been placed into members voluntary liquidation and that Argos having
agreed with certain creditors to settle those liabilities using Consideration
Shares, that approximately 7.9 million of the Consideration Shares would be
available for distribution on a pro-rata basis to Argos' shareholders on the
register at the relevant date. Given Westmount's holding of 1 million shares
in Argos, on the relevant date, subject to the completion of the Argos
voluntary liquidation process, it is estimated that Westmount's shareholding
in JHI will increase by approx. 33,600 shares, to 5,684,870 shares
representing circa 6.24% of the enlarged share capital of JHI.
The most recent published financial information with respect to JHI indicated
it had circa USD$19.7 M in cash and cash equivalents as of 31(st) December
2021(19).
The Canje Block is currently operated by an ExxonMobil subsidiary, Esso
Exploration & Production Guyana Limited (35%), with TotalEnergies E&P
Guyana B.V. (35%), JHI Associates (BVI) Inc. (17.5%) and Mid-Atlantic Oil
& Gas Inc. (12.5%) as partners.
Orinduik Block (offshore Guyana)
In 2017 Tullow Oil, the then operator of the Orinduik Block, acquired 2,500
km(2) of 3D seismic data covering the entire block. In 2019 the initial
drilling campaign on the block focused on the shallower Tertiary reservoirs
and resulted in two heavy oil discoveries, Jethro and Joe which are currently
considered to be non-commercial. As of 31st December 2022, the gross 2C
resource attributable to Tullow's then 60% operated interest amounted to
47.7MMBBLs. Throughout 2022 and 2023 the focus of the Orinduik Block JV
partners continued to be on the analysis and assimilation of the 2019/20
drilling results and data gathering program, the reprocessing and
re-interpretation of the 3D seismic data, and the high-grading of the deeper
Cretaceous light oil prospect inventory with a view to target selection for
the next drilling campaign on the block. An EOG commissioned CPR by WSP, dated
20th March, 2022, indicates an aggregate Unrisked Prospective Resource (Best
Estimate) of 3,386MMBBLs in 11 Cretaceous prospects. Nevertheless, progress
towards drilling on the block during this period remained stymied due to the
diverging strategies of the JV partners.
On the 10(th) August 2023, EOG announced that it had signed a Sale Purchase
Agreement ("SPA") pursuant to which its wholly owned subsidiary, Eco Guyana
Oil and Gas (Barbados) Limited ("Eco Guyana"), will acquire a 60% Operated
Interest in the Orinduik Block, offshore Guyana, through the acquisition of
Tullow Guyana B.V. ("TGBV"), a wholly owned subsidiary of Tullow Oil Plc.
("Tullow") in exchange for an initial payment of USD$700,000 cash and a series
of contingent payments based upon a commercial discovery outcome and
subsequent success case development milestones.
Following completion of this transaction, on the 21(st) November 2023, EOG
became operator of the block with an aggregate 75% WI held via its wholly
owned subsidiaries Eco Orinduik B.V. (60%) and Eco (Atlantic) Guyana Inc
(15%). Subsequently, at year end, TOQAP Guyana B.V relinquished its 25% WI and
EOG became the sole interest holder in the Orinduik Block with 100% WI.
On January 22, 2024, EOG gave notice to the Minister of Natural Resources of
the Cooperative Republic of Guyana to enter the Second Phase of the Second
Renewable Period of the Orinduik License which under the Petroleum Agreement
contains a commitment to drill a well to the Cretaceous by January 2026.
Subsequent to assuming operatorship of Orinduik EOG has revitalised farm-down
efforts with a view to attracting partners to drill a stacked-pay target in
the more prolific Cretaceous light oil play, which remains unexplored on the
Orinduik Block. EOG has reported significant interest in the farm-down
campaign - potentially bolstered by the recent announcement by Stabroek
operator, ExxonMobil, that the neighbouring 2018 Hammerhead Discovery would be
the 7th development on Stabroek block, which was then followed by the drilling
of Hammerhead-4 appraisal well proximal to the Orinduik block boundary.
EOG reported its cash and cash equivalents to be USD$1.185M at 30(th) June
2024 but was anticipated to be circa USD$9M in early September 2024 as a
result of milestone payments due under various Block 3B/4B (South Africa)
farm-down transactions.
Orange Basin - offshore Namibia and South Africa
Blocks 2913B & 2912 [PEL 56 & PEL 91] (offshore Namibia)
Westmount holds an indirect interest in Blocks 2913B and 2912 via its
shareholding in Africa Oil Corp ("AOC"). The purchase of this shareholding was
announced on the 9(th) June, 2023 and it was acquired with a view to offering
shareholders liquid exposure to the near field exploration and appraisal
drilling and testing program that was underway on the giant Venus light oil
and associated gas discovery in the Orange Basin. AOC is the only
publicly-listed independent oil and gas company with an effective economic
interest in this accumulation (effective interest of 6.2% and 5.9% in Blocks
2913B & 2912, respectively, at time of investment), which is understood to
be the largest oil discovery made globally in 2022.
AOC holds its effective interest in these blocks via its shareholding in
Impact Oil & Gas Limited ("Impact") a privately owned, Africa-focused,
exploration company. At the time of investment Impact (through its wholly
owned subsidiary, Impact Oil and Gas Namibia (Pty) Ltd.) held a 20% working
interest ("WI") in Block 2913B - with partners TotalEnergies (40% operator),
QatarEnergy (30%) and Namcor (10%) - and an 18.89% WI in Block 2912 - with
partners TotalEnergies (37.78% operator), QatarEnergy (28.33%) and Namcor
(15%). Subsequent to 1(st) November and the completion of the
Impact/TotalEnergies farm-down transaction, announced on the 10(th) January
2024, Impact's WI has reduced to 9.5% in both blocks - in return for a
consideration of USD$99M cash (pro-rata back costs) and an interest free full
'loan carry' for all joint venture costs, with no cap, through to first oil
production. In parallel, AOC has continued to increase its shareholding in its
investee Impact via two separate transactions - a Share Purchase Agreement and
an Option Agreement announced on the 18(th) March 2024 and 19(th) August 2024
respectively - which cumulatively will increase AOC's shareholding in Impact
from 31.1% to 39.5% (giving AOC an effective interest of 3.75% in Blocks 2913B
& 2912, post completion of all three transactions).
On the 24(th) February 2022 Impact announced that the play-opening discovery
well Venus-1X, drilled on Block 2913B, had encountered a high-quality, light
oil-bearing sandstone reservoir of Lower Cretaceous age, with 84 meters of net
oil pay.
On the 22(nd) February 2023 Impact announced the imminent commencement of a
multi-well drilling and testing program in Blocks 2913B and 2912, using the
Tungsten Explorer drillship and the Deepsea Mira semi-submersible rig,
targeting up to 4 wells, including the re-entry, sidetracking and testing of
the Venus-1X discovery well, the drilling and testing of the Venus-1A
appraisal well, the drilling and potential testing of the Nara-1X exploration
well on Block 2912 and a contingent appraisal well at Nara-1A in the success
case.
Updates on the progress of this multi-well program were provided by AOC and
Impact on the 28(th) September 2023 and via the TotalEnergies Investor Day
presentations on the 27(th) September 2023. While limited well specific public
disclosures were provided, sufficient insights had been gleaned by the
operator from the appraisal drilling and testing programs at Venus-1X_ST and
Venus-1A to indicate the commercial viability of a Venus deepwater
development. It was also reported that the Nara-1X exploration well, drilled
on Block 2912, appeared to be oil bearing but in poor quality reservoir facies
and was deemed non-commercial. Subsequently, it was reported by AOC on the
15(th) May 2024, that the additional appraisal drilling and test results from
Venus-2A and Mangetti-1X (Venus interval) support the development of Venus.
The main development challenges identified during the appraisal campaign
included location of the initial FPSO via the identification of reservoir
'sweet-spots' with higher permeability and well productivity and a scheme for
the economic handling of significant associated gas volumes.
At the TotalEnergies Strategy Day presentations on the 2(nd)October 2024 it
was reported that the development studies had zoned in on an initial FPSO at
Venus that would be designed to handle 160,000 bpd oil and 500 MMscf/d of gas.
It is anticipated that this Phase 1 development scheme will be finalised by
the end of 2025. Furthermore, it was stated by the operator that Venus has
'first mover advantage' with respect to sequencing of developments in the
Orange Basin and that this might facilitate some renegotiation of the original
fiscal terms pre-FID.
Following the completion of operations at Nara-1X the Tungsten Explorer
drillship was mobilized to drill a dual-purpose exploration and appraisal well
- Mangetti-1X - located approximately 35km to the northwest of the Venus-1X
discovery well, at the northern end of the giant Venus light oil accumulation.
On the 8(th) February 2024 it was reported by AOC that, in addition to
confirming the northern extension of the Venus discovery, Mangetti-1X had also
intersected hydrocarbon bearing intervals in the shallower Mangetti fan
prospect, a separate fan system to the Venus oil discovery, indicating a
second significant discovery on Block 2913B.
On the 15(th) May 2024 AOC reported that two 3D seismic acquisition programs
had been completed to the south and north of the Venus discovery, resulting in
most of the Block 2913B and Block 2912 licensed area now being covered by 3D
seismic. The northern survey focused on the Mangetti complex to support the
potential appraisal of the Mangetti discovery whereas the southern survey was
designed to confirm the previously identified substantial exploration targets
at the Kokerboom, Damara and Damara South prospects.
On the 1(st) November 2024 it was announced by AOC that exploration drilling
(AOC/Impact carried) had resumed on Block 2913B, on the 20(th) October, with
the spudding of the Tamboti-1X well to evaluate a 1 bn bbl target, to the
north of the Venus accumulation. Confirmation via 3D seismic of a significant
prospect inventory to the south of Venus provides potential follow-on drilling
targets into 2025.
Block 3B/4B (offshore South Africa)
Westmount holds an indirect interest in Block 3B/4B via its shareholdings in
AOC and EOG. On the 8(th) March 2023, following the completion of the
reprocessing of 2,200 km(2) of 3D seismic, AOC reported the results of an
independent review of Block 3B/4B prospective resources which had been
undertaken by RISC Advisory (UK) Limited ("RISC"). The RISC analysis of the
licence identified a total Unrisked Gross P50 Prospective Resource of
approximately 4 billion barrels of oil equivalent ("BOE") in 24 prospects,
with individual prospect probabilities of success ranging from 11% to 39%.
Subsequent to a Letter of Intent announced by EOG on the 11 July 2023 and the
entry into an Assignment and Transfer Agreement on the 14(th) July 2023, EOG
agreed to farm out a 6.25% Participating Interest in Block 3B/4B, offshore
South Africa to AOC for up to US$10.5 million in cash, payable via a series of
contingent milestone payments. Upon completion of this transaction, on the
22(nd) January 2024, the Block 3B/4B Licence holders were as follows: Africa
Oil SA Corp a wholly owned subsidiary of AOC (26.25%, operator), Azinam
Limited a wholly owned subsidiary of EOG (20%) and Ricocure (Proprietary)
Limited (53.75%).
On the 6(th) March 2024, EOG announced a further farm-down of a 13.75%
participating interest in Block 3B/4B [as part of an aggregate 57% farm down
transaction along with its JV Partners Africa Oil SA Corp. ("AOC") and
Ricocure (Proprietary) Limited ("Ricocure")] to TotalEnergies EP South Africa
B.V., who will become Operator ("TotalEnergies") and QatarEnergy International
E&P LLC ("QatarEnergy"). EOG reported the value of this transaction to EOG
as up to USD$32.1M - including 'loan carry' of EOG's residual 6.25% interest
on up to two wells, contingent cash milestone payments from farminees and
payments due to EOG from AOC and Ricocure under prior agreements. Completion
of this transaction was reported on the 28(th) August 2024 with the revised JV
interests as follows: TotalEnergies (operator) 33%, QatarEnergy 24%, AOC
17%, EOG 6.25% and Ricocure 19.75%.
Separately, on 29(th) July 2024, EOG announced that it had entered an
Assignment and Share Cancellation Agreement with AOC whereby EOG would sell a
1% interest in Block 3B/4B to AOC in exchange for cancellation of all of AOC's
shares and warrants in EOG (worth C$ 11.5m) AOC currently holds, in aggregate,
54,941,744 Common Shares and 4,864,865 Warrants in EOG which, assuming
conversion of the Warrants, would equal 16.16% on a diluted basis (c.15%
non-diluted) of the total outstanding common shares of EOG. Upon and subject
to completion of this transaction EOG will have a circa 15% reduction in its
issued share capital and will retain a 5.25% 'carried' interest in Block
3B/4B, with AOC increasing its stake in the block to 18%.
EOG had previously reported the submission, in March 2023, of an Environmental
Authorisation application for drilling of up to 2 wells on prospects defined
on 3D seismic in a high-graded area in the north of Block 3B/4B. The EIA was
reported to be approved by the Department of Mineral Resources and Energy in
early October 2024(20).
Investment portfolio summary
As of the 30(th) June 2024 Westmount had a cash balance of £0.222M, listed
marketable securities of £0.624M, and is debt free.
On the 9(th) June 2023 Westmount announced that it had purchased 300,000
shares in Africa Oil Corp. ("AOC") representing approximately 0.067% of the
issued common shares in AOC as of 31(st) July 2024. Subsequent to this
investment Westmount has to date received from AOC three semi-annual dividends
of USD$0.025 per share (in aggregate USD$22,500).
On the 30(th) June 2024 Westmount held a total of 5,651,270 shares in JHI,
representing approximately 7.2% of the issued common shares in JHI as of
31(st) December 2021. Following the completion of the Argos-JHI transaction
announced on the 25(th) September 2023, and subject to the completion of the
members voluntary liquidation by Argos and the planned pro rata distribution
of JHI Consideration Shares to Argos shareholders, it is estimated that
Westmount will hold circa 5,684,870 shares in JHI, representing approximately
6.24% of the enlarged issued share capital of JHI.
As of 30(th) June 2024, Westmount retains 474,816 common shares in Cataleya
Energy Corporation ("CEC") representing approximately 4.13% of the issued
shares in CEC. On the 19(th) March 2024 Westmount reported that its investee
CEC had redeemed in full USD $43,782,722 in convertible loan notes previously
issued to a certain noteholder (the "Noteholder"), a large American Private
Equity Fund, between April 2020 and January 2023. The loan notes had been
redeemed via the repayment of USD $21,590,000 in cash and the conversion of
USD $22,192,722 into 2,458,705 CEC common shares (an implied conversion metric
of circa USD$9.03 per share). The transaction closed on the 15th March 2024
and CEC is now debt free. As a result of this loan note conversion the
Noteholder has now become a significant shareholder in CEC, with a
shareholding of approximately 21.4% of the enlarged CEC share capital.
Westmount continues to hold 1,500,000 shares in EOG, representing
approximately 0.4% of the common shares in issue as of 30(th) June 2024. Upon
and subject to completion of the EOG-AOC transaction announced on the 29(th)
July 2024, whereby EOG is selling a 1% interest in Block 3B/4B South Africa in
exchange for cancellation of all of Africa Oil's shares and warrants in EOG,
Westmount's 1,500,000 shares will represent approximately 0.47% of EOG's
common shares estimated to be in issue at completion.
Westmount continues to hold 89,653 shares in Ratio Petroleum representing
approximately 0.04% of the issued share capital. On the 29(th) September 2024,
it was reported by Ratio Petroleum that they had received a buy-out offer from
Ratio Energy Partnership Limited of 0.35NIS per share unit (at prevailing
exchange rates the aggregate value to Westmount is circa USD$8,475), subject
to shareholder approval.
On the 30(th) June 2024 Westmount retained a legacy holding of 1,000,000
shares in Argos, representing approximately 0.4% of the issued common shares
in Argos. Subsequent to the Argos-JHI transaction announced on the 25(th)
September 2023, the entry into members voluntary liquidation by Argos and the
cancellation from admission to trading on AIM of Argos shares from the 26(th)
September 2023, it is anticipated that Westmount will receive circa 33,600 JHI
shares from Argos by way of a post liquidation pro rata distribution of assets
to Argos shareholders. The Argos liquidation process is ongoing and the JHI
shares have yet to be received by Westmount.
The complete investment portfolio is summarised in Table 1. The reported
financial loss for the period is primarily made up of a non-cash loss on
financial assets held at fair value through the profit and loss, some of which
is as a result of Foreign Exchange movements on the portfolio Investments when
valued at the period end.
Summary/Outlook
The global energy landscape continues to evolve against the demands for more
energy, less emissions and competitive capital returns. Under most scenarios
oil and gas are forecast to remain as significant pillars of the energy
infrastructure with both underinvestment and geopolitics contributing to the
perception that energy market disruption risks are higher on the supply side
than the demand side. In response to the energy transition, exploration
spending in deepwater and ultra-deepwater areas is forecast to continue to
grow as the majors and NOCs seek to high-grade their portfolios, consolidate
assets and reduce their emission profiles. Exploration 'hotspots' with high
success rates, such as the deepwater Guyana-Suriname Basin and the Orange
Basin, are areas that are well positioned to capture their share of this
increased exploration spending.
Notwithstanding the overhang created by the protracted arbitration process
surrounding the Chevron-Hess takeover, exploration investment continues into
the Guyana-Suriname Basin with Petrochina recently acquiring Block 14 & 15
(Suriname) following the end-2023 award of Blocks 63, 64 and 65 (some with
Phase 1 drilling commitments) to various combinations of
Shell/TotalEnergies/QatarEnergy/Petronas. In addition, the execution and
ratification of PSAs with respect to 8 blocks, offshore Guyana, that were
awarded in October 2023 is pending. These blocks had been offered by the
Guyanese government in a December 2022 Licensing Round for 14 offshore blocks
(3 deepwater and 11 shallow water blocks) under
revised, less benign, fiscal and contractual terms including biddable signature bonus with a minimum threshold of USD $20M and $10M for deepwater and shallow water blocks, respectively.
Against this backdrop of industry consolidation, Westmount's strategy
continues to be one of seeking value creation for shareholders via exposure to
high impact exploration and appraisal drilling programs. Our current portfolio
offers the potential for exposure to multiple high impact exploration wells
over the next 12-24 months, in both offshore Guyana and Namibia though we have
less certainty or visibility on the timing of the Guyanese drilling.
With respect to the Canje Block, while most of the pieces of the jigsaw appear
to be in place, we await guidance with respect to timing of further
discretionary drilling. We note the September 2023 filing by the operator
ExxonMobil of a Cumulative Impact Assessment ("CIA") for the Canje Block with
the EPA. In addition, the operator is reported to have secured a one-year
extension to the Canje Licence to March 2026.
The exit of ExxonMobil and Hess from the Kaieteur Block is a setback with
respect to drilling timeframes for Kaieteur, though a farm-down process is
underway with a view to bringing new entrants, including a deepwater operator,
to the block prior to February 2025. We note the recent proposed buy-out of
Ratio Petroleum by the well capitalised Ratio Energy Partnership Ltd. We are
also encouraged that CEC's Noteholder, a large American Private Equity Fund,
has elected to convert USD $22,192,722 of its outstanding loan notes into
2,458,705 CEC common shares (an implied conversion metric of circa USD $9.03
per share) and has now become a 21.4% shareholder in CEC. We believe that
these recent manoeuvres with respect to Ratio Petroleum and CEC reflects
confidence that the ongoing farm-down process can bring new partners and a
resumption of drilling on the Kaieteur Block, which has been substantially
derisked by the Tanager-1 discovery, yet remains underexplored.
With respect to the Orinduik Block, there is now a firm commitment to drill a
well to the Cretaceous, prior to January 2026 - with EOG's farm-down process
attracting significant interest - potentially heightened by the recent
announcement by Stabroek operator, ExxonMobil, that the neighbouring 2018
Hammerhead Discovery would be the 7th development on Stabroek block, which was
then followed by the drilling of Hammerhead-4 appraisal well proximal to the
Orinduik block boundary.
Exploration investment has also continued to pour into the Orange Basin,
offshore Namibia, with 13 successes out of 15 wells drilled since early 2022
and a reported cumulative in-place discovered resource of +21 BBOE to date.
While Westmount's investment in AOC offers exposure to the ongoing successes
on Block 2913B, unfortunately, share price responses have been disappointing
so far, in part due to the limited disclosure around these operations, and in
our opinion, do not reflect the value being created. Nevertheless, potential
catalysts are offered by the recent spudding of the Tambotti-1x prospect - a 1
bn bbl target, in the north of block 2913B - with the potential follow-on
drilling of substantial exploration targets in the south of the block,
including the Kokerboom, Damara and Damara South prospects. In addition, the
recent farm-down news reported by our investees AOC and EOG with respect to
Block 3B/4B, offshore South Africa, offers line of sight to exposure to a
further two high impact wells in the Orange Basin.
In summary, Westmount retains some liquid assets, a minimal cost base and
investment exposure to some high impact exploration and appraisal drilling
opportunities offshore Guyana and offshore Namibia/South Africa. While
patience has been required 'in spades' - we believe that some of our investees
are making progress - with visibility to potentially multiple high impact
exploration wells from Q4 2024. In this changing landscape, some of our
investees may also consider portfolio diversification and possible
consolidation manoeuvres as part of their risk management strategies and
financing arrangements. In all cases, line of sight to indirect participation
in high impact drilling remains the key investment objective for Westmount.
GERARD WALSH
Chairman
18 November 2024
Notes
(1)TotalEnergies 2024 Strategy & Outlook Transcript; 2024 ExxonMobil
Global Outlook Executive Summary
(2)OPEC World Oil Outlook 2024
(3)IEA Oil 2024 - Analysis and Forecast to 2030
(4)https://www.reuters.com/business/energy/bp-drops-oil-output-target-strategy-reset-sources-say-2024-10-07/
(https://www.reuters.com/business/energy/bp-drops-oil-output-target-strategy-reset-sources-say-2024-10-07/)
(5)Wood Mackenzie - Doing More with Less - Is there enough upstream
investment? - July 2023
(6)Hess Corporation presentation 7(th) September 2023 - Barclays CEO
Energy-Power Conference
(7)Wood Mackenzie Insight - Exploration quietly recovering - August 2023
(8)Wood Mackenzie: 30 upstream projects holding 14 Bboe and $125 billion in
investment to reach FID in 2024
(9)Wood MacKenzie - Global-deepwater-production-to-increase-60% - November
2022
(10)Hess Corporation Presentation - Annual Meeting, May 2024
(11)Oilnow - Guyana taps Fulcrum LNG to partner with Exxon, government on gas
development- June 21,2024
(12)Oilnow - Gas-to-Energy pipeline mechanically completed, ready to introduce
natural gas - October 10, 2024 (13)CGX Energy Inc. News Releases 28(th) June
2023, 11(th) December 2023.
(14)Oilnow - Four out of six bidders accept new Guyana PSA terms - Ministry -
17(th) October, 2024
(15)https://totalenergies.com/news/press-releases/suriname-totalenergies-announces-final-investment-decision-granmorgu
(https://totalenergies.com/news/press-releases/suriname-totalenergies-announces-final-investment-decision-granmorgu)
(16)Sintana Energy Inc. - Corporate Presentation - October 2024
(17)Galp Energia Press Release - 21(st) April 2024
(18)Oilnow - Canje Block still with oil companies, as government reviews
second relinquishment - 27(th) Sept. 2024
(19)Eco Atlantic Press Release -14(th) March 2022.
(20)Africa Oil and Gas, Vol.27, Issue20 - 10(th) October 2024
For further information, please contact:
Westmount Energy
Limited
www.westmountenergy.com (http://www.westmountenergy.com)
David King,
Director
Tel: +44 (0) 1534 823000
Cavendish Capital Markets Limited (Nomad and
Broker) Tel: +44 (0) 20 7397 8900
Neil McDonald / Pete Lynch
DIRECTORS' REPORT
FOR THE YEAR ENDED 30 JUNE 2024
The Directors present their annual report and the audited financial statements
of Westmount Energy Limited (the "Company") for the year ended 30 June 2024.
PRINCIPAL ACTIVITIES
The principal activity of the Company is, and continues to be, an energy
investment company. Development of the Company's activities and its prospects
are reviewed in the Chairman's Review on pages 3 to 15.
The Company was incorporated in Jersey on 1 October 1992 under the Companies
(Jersey) Law 1991, as amended, and is a public company with registered number
53623. The Company is listed on the London Stock Exchange Alternative
Investment Market ("AIM"). On 1 December 2020 the Company commenced
cross-trading on the OTCQB Market in New York, U.S., under the ticker symbol
"WMELF".
DIRECTORS AND DIRECTORS' INTERESTS
The Directors who served during the year and subsequently to the date of this
report were as follows:
Shares held at Options held at
30 June 2024 30 June 2024
GWalsh (Chairman) 11,933,565 -
TPO'Gorman 4,650,000 -
DCorcoran 5,250,000 -
DRKing - -
RESULTS AND DIVIDENDS
The result for the year is set out on page 24 in the Statement of
Comprehensive Income. The Directors do not recommend the payment of a dividend
in respect of these financial statements (2023: £Nil).
DIRECTORS' BIOGRAPHICAL INFORMATION
Gerard Walsh, Chairman, age 61, a Swiss resident, is a member of the Chartered
Institute of Management Accountants and has been involved in financing oil and
gas companies for over 25 years. Mr Walsh maintains his knowledge and skills
via direct contact with senior industry investors and other operators, and via
monitoring of significant market activities within the global energy sector.
David R King, age 66, a Jersey resident, is a Fellow of the Institute of
Chartered Accountants in England and Wales and has over 35 years' experience
in capital markets and cross border structuring gained from senior positions
in a number of offshore jurisdictions, notably the Cayman Islands, Hong Kong,
Luxembourg and Jersey. He is an experienced professional Non-Executive
Director and is regulated personally by the Jersey Financial Services
Commission. He maintains his knowledge and skills via fulfilment of regular
continuing professional development obligations and by close monitoring of
significant market activities within the sector. Mr King acts as an
independent director and oversees the efficient operation of Company
Secretarial, Registrar and Administrative operations of the Company.
Thomas P O'Gorman, age 72, a Northern Ireland resident, is a long term
investor in the resource sector and is the former Chairman of Cove Energy Plc
(formerly Lapp Platts Plc) who has been involved in financing oil and gas
companies for over 40 years. Mr O'Gorman maintains his knowledge and skills
via direct contact with senior industry investors and other operators, and via
monitoring of significant market activities within the global energy sector.
Dermot Corcoran, age 65, a Republic of Ireland resident, is a petroleum
geologist and geophysicist, with more than 30 years' experience working with
both major and minor hydrocarbon exploration companies globally. Mr Corcoran
has wide experience in technical and commercial aspects of petroleum
exploration and production, gained from employment and investment experience
in Europe, North Africa, West Africa, Kurdistan, Syria, Pakistan and the USA.
Mr Corcoran maintains his knowledge and skills via direct contact with senior
industry investors and other operators, attendance and engagement at industry
conferences and seminars and via monitoring of significant market activities
within the global energy sector.
SECRETARY
The Secretary of the Company is Stonehage Fleming Corporate Services Limited.
AUDITOR
The auditor, Moore Stephens Audit & Assurance (Jersey) Limited, has
indicated its willingness to continue in office, and a resolution that it is
re-appointed will be proposed at the next annual general meeting.
STATEMENT OF DIRECTORS' RESPONSIBILITIES WITH REGARD TO THE FINANCIAL
STATEMENTS
The Directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Jersey Company Law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRS) and applicable law. Under
Company law the Directors must prepare financial statements that give a true
and fair view of the state of affairs of the Company and of the profit or loss
of the Company for that period. In preparing these financial statements, the
Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether the financial statements have been prepared in
accordance with IFRS as adopted by the European Union; and
· prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
(Jersey) Law 1991. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
As far as the Directors are aware, there is no relevant audit information of
which the Company's auditor is unaware and each Director has taken all the
steps that he ought to have undertaken as a director in order to make himself
aware of any relevant audit information and to establish that the Company's
auditor is aware of that information.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website. The
Company's website is maintained in compliance with AIM Rule 26 and the
applicable OTCQB Market standards.
Legislation in Jersey governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
The Directors confirm that they have complied with all of the above
requirements in preparing these financial statements.
On behalf of the Board
D R KING
Director
18 November 2024
RESULTS AND DIVIDENDS
The result for the year is set out on page 24 in the Statement of
Comprehensive Income. The Directors do not recommend the payment of a dividend
in respect of these financial statements (2023: £Nil).
DIRECTORS' BIOGRAPHICAL INFORMATION
Gerard Walsh, Chairman, age 61, a Swiss resident, is a member of the Chartered
Institute of Management Accountants and has been involved in financing oil and
gas companies for over 25 years. Mr Walsh maintains his knowledge and skills
via direct contact with senior industry investors and other operators, and via
monitoring of significant market activities within the global energy sector.
David R King, age 66, a Jersey resident, is a Fellow of the Institute of
Chartered Accountants in England and Wales and has over 35 years' experience
in capital markets and cross border structuring gained from senior positions
in a number of offshore jurisdictions, notably the Cayman Islands, Hong Kong,
Luxembourg and Jersey. He is an experienced professional Non-Executive
Director and is regulated personally by the Jersey Financial Services
Commission. He maintains his knowledge and skills via fulfilment of regular
continuing professional development obligations and by close monitoring of
significant market activities within the sector. Mr King acts as an
independent director and oversees the efficient operation of Company
Secretarial, Registrar and Administrative operations of the Company.
Thomas P O'Gorman, age 72, a Northern Ireland resident, is a long term
investor in the resource sector and is the former Chairman of Cove Energy Plc
(formerly Lapp Platts Plc) who has been involved in financing oil and gas
companies for over 40 years. Mr O'Gorman maintains his knowledge and skills
via direct contact with senior industry investors and other operators, and via
monitoring of significant market activities within the global energy sector.
Dermot Corcoran, age 65, a Republic of Ireland resident, is a petroleum
geologist and geophysicist, with more than 30 years' experience working with
both major and minor hydrocarbon exploration companies globally. Mr Corcoran
has wide experience in technical and commercial aspects of petroleum
exploration and production, gained from employment and investment experience
in Europe, North Africa, West Africa, Kurdistan, Syria, Pakistan and the USA.
Mr Corcoran maintains his knowledge and skills via direct contact with senior
industry investors and other operators, attendance and engagement at industry
conferences and seminars and via monitoring of significant market activities
within the global energy sector.
SECRETARY
The Secretary of the Company is Stonehage Fleming Corporate Services Limited.
AUDITOR
The auditor, Moore Stephens Audit & Assurance (Jersey) Limited, has
indicated its willingness to continue in office, and a resolution that it is
re-appointed will be proposed at the next annual general meeting.
STATEMENT OF DIRECTORS' RESPONSIBILITIES WITH REGARD TO THE FINANCIAL
STATEMENTS
The Directors are responsible for preparing the Directors' Report and the
financial statements in accordance with applicable law and regulations.
Jersey Company Law requires the Directors to prepare financial statements for
each financial year. Under that law the Directors have elected to prepare the
financial statements in accordance with International Financial Reporting
Standards as adopted by the European Union (IFRS) and applicable law. Under
Company law the Directors must prepare financial statements that give a true
and fair view of the state of affairs of the Company and of the profit or loss
of the Company for that period. In preparing these financial statements, the
Directors are required to:
· select suitable accounting policies and then apply them consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether the financial statements have been prepared in
accordance with IFRS as adopted by the European Union; and
· prepare the financial statements on the going concern basis unless it
is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping proper accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the Companies
(Jersey) Law 1991. They are also responsible for safeguarding the assets of
the Company and hence for taking reasonable steps for the prevention and
detection of fraud and other irregularities.
As far as the Directors are aware, there is no relevant audit information of
which the Company's auditor is unaware and each Director has taken all the
steps that he ought to have undertaken as a director in order to make himself
aware of any relevant audit information and to establish that the Company's
auditor is aware of that information.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website. The
Company's website is maintained in compliance with AIM Rule 26 and the
applicable OTCQB Market standards.
Legislation in Jersey governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
The Directors confirm that they have complied with all of the above
requirements in preparing these financial statements.
On behalf of the Board
D R KING
Director
18 November 2024
CORPORATE GOVERNANCE
The Board have adopted the Quoted Companies Alliance Corporate Governance Code
("the QCA Code") following the London Stock Exchange's requirement for AIM
listed companies to adopt and comply with a recognised corporate governance
code.
Strategy and Business Model
The strategy of the Company is to invest in and provide follow on capital to
small and medium sized companies which have significant growth possibilities
operating in the oil and gas sector. Members of the Board have specialist
knowledge and experience in the upstream sector of the oil and gas industry
(gained from extensive investing activity over a number of decades) allowing
them to identify projects and growth companies with potentially higher
returns, commensurate with acceptable levels of risk. The Company undertakes
extensive due diligence on potential investment opportunities and monitors
performance of its investments via close contact with the companies concerned
and analysis of their public announcements and presentations. In common with
other investment companies in this sector, access as a minority shareholder to
projects and valuable investments is challenging but the Board is confident of
its ability to continue to source attractive investment opportunities given
close relationships with a number of companies and their management teams, and
recognition of the Board's experience and strong network.
Shareholder Relations
The Company engages closely with its principal shareholders, a number of whom
are Directors of the Company, primarily via face-to-face meetings and
publishes announcements of significant activity consistent with market
requirements. Shareholders receive annual and half-year financial statements
and are invited to the Company's Annual General Meeting. Contact details for
the Company are maintained on the website and on Regulatory News Service
announcements. The Board seeks to build strong relationships with its
institutional shareholders which are managed by the Chairman and supported by
other members of the Board.
Gerard Walsh, Chairman, and Dermot Corcoran, Director, are primarily
responsible for shareholder liaison, and can be contacted via the Contact Page
on the Company's website.
Stakeholder and Social Responsibilities
The Board has identified its key stakeholders as being its shareholders and
investee companies, given it has no employees and a small range of contracted
service providers. It maintains contact with shareholders, of whom a
significant proportion are Directors, via Regulatory News Service and periodic
feedback from these parties. Contact with investee companies is operated via
the Chairman and individual Board directors responsible for the relevant
investment recommendation, and is geared to key operational, project and
transactional cycles identified for the company concerned.
Risk Management
The Company actively monitors and manages risk in its activities, principally
through oversight and operation of its investment portfolio. The Company
identifies key risks in all of its investments during the selection and due
diligence cycle, and subsequent recommendations for investment by the Company
consider for each proposal a range of risks and mitigating factors.
Identification of these risks is achieved by direct engagement with the
companies in which Westmount seeks to invest, close analysis of their market
opportunities and threats, combined with detailed knowledge of the market
sector where they operate and their competitors.
Board Composition, Evaluation and Decision Making
The Board comprises three shareholder Directors (including the Chairman Gerard
Walsh) and one Non-Executive Director (David King) resident in Jersey, who is
considered to be independent.
The Company deviates from the requirements of the QCA Code in that it has only
one independent non-executive director. The Directors consider that the
structure of the Board is appropriate and proportionate for the business at
this stage of the Company's growth, and that the Independent Director, in
conjunction with the Company's Nominated Adviser, provides appropriate
challenge to the executive directors on all corporate governance matters. The
Board intends to keep all aspects of its corporate governance - independence
and the balance of executive and non-executive roles in particular - under
review going forward.
Each of the four directors has considerable experience in their respective
fields and act collectively in all decision making of the Company. The Board
is satisfied that it has a suitable balance between independence on the one
hand and knowledge of the Company's activities, to allow it to properly
discharge its responsibilities and duties. Directors are expected to use their
judgement and experience to challenge and assess the appropriateness of
operations and decision making at all times.
The Board has formally met two times this financial year and Directors each
dedicate between 12 and 150 days' time to the Company per annum, including
informal contact with other Board members and advisors, and attendance at the
Annual General Meeting.
The Board regularly takes advice from its Nominated Advisor, Cavendish
Securities plc, and other external advisors (principally its external lawyers)
in relation to periodic investment opportunities and fund raising.
The Board completes an annual self-evaluation of its performance based on
externally determined guidelines appropriate to the composition of the Board
and the Company's operation, including Board Sub Committees. The scope of the
self-evaluation exercise will be re-assessed each year to ensure appropriate
depth and coverage of the Board's activities consistent with corporate best
practice. The Board has adopted a board effectiveness questionnaire, which
assesses the composition, processes, behaviours and activities of the board
through a range of criteria, including board size and independence, mix of
skills and experience, and general corporate governance considerations in line
with the QCA code.
Given the stage of the business' maturity, the responsibilities of a
nomination committee are delegated to the Board, and there are no formal
succession planning processes in place. The Board intends to keep this under
review as the business develops.
Corporate Culture
Westmount Energy supports the growing awareness of social, environmental and
ethical matters when considering business practices. These statements provide
an outline of the policies in place that guide the Company and its employees
when dealing with social, environmental and ethical matters in the workplace.
Code of Conduct
Westmount Energy maintains and requires the highest ethical standards in
carrying out its business activities in regards to dealing with gifts,
hospitality, corruption, fraud, the use of inside information and
whistle-blowing.
Westmount Energy maintains a zero-tolerance policy towards bribery and
corruption.
Equal Opportunity and Diversity
Westmount Energy promotes and supports the rights and opportunities of all
people to seek, obtain and hold employment without discrimination.
It is our policy to make every effort to provide a working environment free
from bullying, harassment, intimidation and discrimination on the basis of
disability, nationality, race, sex, sexual orientation, religion or belief.
Joint Venture Partners, Contractors and Suppliers
Westmount Energy is committed to being honest and fair in all its dealings
with partners, contractors and suppliers.
Procedures are in place to ensure that any form of bribery or improper
behaviour is prevented from being conducted on Westmount Energy's behalf by
joint venture partners, contractors and suppliers. Westmount Energy also
closely guards information entrusted to it by joint venture partners,
contractors and suppliers, and seeks to ensure that it is never used
improperly.
Operating Responsibility and Continuous Improvement
Westmount Energy adopts an environmental policy which sets standards that meet
or exceed industry guidelines and host government regulations. This is
reviewed on a regular basis. Wherever we operate we will develop, implement
and maintain management systems for sustainable development that will strive
for continual improvement.
Westmount Energy is committed to maintaining and regularly reviewing its
Health and Safety and Environmental Policies.
Periodic feedback from stakeholders, as described in relation to Stakeholder
and Social Responsibilities (above), allows the Board to monitor the culture
of the Company, as well as its ethical values and behaviours.
Governance Structures
The Board operates to manage and direct the affairs of the Company via close
contact between Board members and through both regular scheduled and ad-hoc
Board meetings. The Board aims to meet regularly with a timetable set by the
external Company Secretary with formal agendas and papers delivered in advance
supporting key matters for consideration or approval. Additionally, contact is
maintained between the directors via email and telephone given the geographic
separation of the Board.
Mr Walsh as Chairman is responsible for setting the strategy of the Company
and maintaining performance of the Board in line with the broad objectives set
in that strategy. He is responsible for liaison with key stakeholders,
including shareholders and prospective investee companies, and also with
advisers and regulatory authorities.
Mr King, as a Jersey resident, maintains close contact with the Company
Secretary and other contracted service providers from Jersey. The Board does
not operate separate sub-committees (Audit, Remuneration or Nomination) given
its small size and close contact for key decisions. The Company does not plan
to establish new sub-committees for the foreseeable future.
The Board retains full authority for the Company such that all decisions on
behalf of the Company are reserved for the Board.
Communication with Stakeholders
The Company communicates with shareholders through the Annual Report and
Audited Financial Statements, annual and half year results announcements, the
Annual General Meeting, and periodic meetings with significant institutional
shareholders and analysts.
Corporate information (including all Company publications and announcements)
is available to all shareholders, prospective investors and the public and is
maintained on the Company's website, www.westmountenergy.com
(http://www.westmountenergy.com) .
In the last 12 months there were no votes of shareholders where a significant
proportion voted against a resolution.
INDEPENDENT AUDITOR'S REPORT
TO THE SHAREHOLDERS OF WESTMOUNT ENERGY LIMITED
Opinion
We have audited the financial statements of Westmount Energy Limited (the
'Company') as at and for the year ended 30 June 2024 which comprise the
Statement of Comprehensive Income, the Statement of Financial Position,
Statement of Changes in Equity, the Statement of Cash Flows, and the notes to
the financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied in their
preparation is International Financial Reporting Standards ('IFRSs') as
adopted by the European Union and the requirements of the Companies (Jersey)
Law 1991.
In our opinion, the financial statements:
· give a true and fair view of the state of the Company's affairs as at
30 June 2024 and of its loss for the year then ended;
· have been properly prepared in accordance with IFRSs as adopted by
the European Union; and
· have been prepared in accordance with the requirements of the
Companies (Jersey) Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report.
We are independent of the Company in accordance with the ethical requirements
that are relevant to our audit of the financial statements in Jersey,
including the Financial Reporting Council's Ethical Standard as applied to
listed entities, and we have fulfilled our ethical responsibilities in
accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
An overview of the scope of our audit
During our audit planning, we determined materiality and assessed the risks of
material misstatement in the financial statements including the consideration
of where directors made subjective judgements, for example, in respect of the
assumptions that underlie significant accounting estimates and their
assessment of future events that are inherently uncertain. We tailored the
scope of our audit in order to perform sufficient work to enable us to provide
an opinion on the financial statements as a whole taking into account the
Company, its accounting processes and controls and the industry in which it
operates.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on the overall audit strategy; the allocation of
resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
· Valuation of Investments. The valuation of the Company's
investments is a key driver of the Company's investment return and investments
represent a material proportion of the Company's financial assets. The
relevant accounting policies and investment composition are discussed in note
2, note 6 and note 12, respectively, to the financial statements.
As of 30 June 2024, the investments comprise listed and unlisted equity
instruments valued at £0.62 million and £3.65 million, respectively. The
primary risk is associated with the unlisted equity instruments, whose
valuation involves a higher degree of judgement by the directors. These
instruments have been valued based on the price of recent investments,
classifying them as Level III investments.
The valuation of these Level III investments has been determined using the
recent sales price of the investments and/or relevant market proxies where
available. In addition, the Directors have taken into account market
expectations of the future performance of the entity's industry sector,
particularly considering the known interest in current exploration activities,
to arrive at their valuations. This valuation methodology is in accordance
with the International Private Equity and Venture Capital Guidelines (IPEVC
Guidelines).
Our main audit procedures to address the identified risk in respect of the
unlisted investment were (a) we discussed with management their unlisted
valuation methodology, and assessed the recognition and measurement of the
unlisted investment held for compliance with IFRSs, and whether it had been
accounted for in accordance with the stated accounting policy and with IPEVC
Guidelines; (b) we substantiated the nature and background of recent
transactions which had been used as the basis of the valuation. and (c) where
the price of recent transaction does not coincide to the Company's year-end,
we have performed independent research about events or conditions that may
indicate the need to recalibrate the price to consider the impact of such
event or condition. We have not identified any material issues from the
completion of the above procedures.
· Risk of management override of controls. In accordance with
ISAs (UK), we are required to consider the risk of management override of
internal controls. Due to the unpredictable nature of this risk, we are
required to assess it as a significant risk requiring special audit
consideration.
Our audit work included, but was not restricted to, specific procedures
relating to the risk that are required by ISA (UK) 240, The Auditor's
Responsibilities Relating to Fraud in an Audit of Financial Statements, which
includes the testing of journal entries, evaluation of judgements and
assumptions in management's estimate, and test of significant transactions
outside the normal course of business. We have not identified any material
issues from the completion of the above procedures.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements on our audit and on the
financial statements. For the purposes of determining whether the financial
statements are free from material misstatement we define materiality as the
level of misstatement that would probably influence the economic decisions of
a reasonably knowledgeable person.
We have used approximately 5% of net assets, or £224,462 which reflects the
fact that this is an investment fund where its market value is determined
predominantly by its net asset value.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
Our evaluation of the directors' assessment of the Company's ability to
continue to adopt the going concern basis of accounting included understanding
the nature of the Company, its business model, system of internal control and
related risks, reviewing the performance of the underlying investments,
critically assessing the key assumptions made by management including its
appropriateness in the context of the financial reporting framework, and
evaluating the directors' plans for future actions in relation to their
assessment.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Company's ability to continue
as a going concern for a period of at least twelve months from when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report, other than the
financial statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements, or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Company and its
environment obtained in the course of the audit, we have not identified
material misstatements in the chairman's review or the directors' report.
We have nothing to report in respect of the following matters where the
Companies (Jersey) Law 1991 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or
· returns adequate for our audit have not been received from branches
not visited by us; or
· the financial statements are not in agreement with the accounting
records and returns; or
· we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the statement of directors' responsibilities with
regard to the financial statements set out on page 17, the directors are
responsible for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the directors are responsible for
assessing the Company's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the company or
to cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
The objectives of our audit in respect of fraud, are to identify and assess
the risks of material misstatement of the financial statements due to fraud;
to obtain sufficient appropriate audit evidence regarding the assessed risks
of material misstatement due to fraud, through designing and implementing
appropriate responses to those assessed risks; and to respond appropriately to
instances of fraud or suspected fraud identified during the audit. However,
the primary responsibility for the prevention and detection of fraud rests
with both management and those charged with governance of the Company.
Our approach was as follows:
· We obtained an understanding of the legal and regulatory
requirements applicable to the Company and considered that the most
significant but not limited to the Companies (Jersey) Law 1991, AIM Rule 26
and the applicable OTCQB Market standards. We also reviewed the laws and
regulations applicable to the Company that has indirect impact to the
financial statements.
· We obtained an understanding of how the Company complies with
these requirements by discussions with management and those charged with
governance.
· We assessed the risk of material misstatement of the financial
statements, including the risk of material misstatement due to fraud and how
it might occur, by holding discussions with management and those charged with
governance.
· We inquired of management and those charged with governance as to
any known instances of non-compliance or suspected non-compliance with laws
and regulations.
· We reviewed the compliance reports and minutes of the meeting to
see whether there is non-compliance reported to management and those charged
with governance.
· Based on this understanding, we designed specific appropriate
audit procedures to identify instances of non-compliance with laws and
regulations. This included making enquiries of management and those charged
with governance and obtaining additional corroborative evidence as required.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Use of our report
This report is made solely to the Company's shareholders as a body, in
accordance with Article 113A of the Companies (Jersey) Law 1991. Our audit
work has been undertaken so that we might state to the Company's shareholders
those matters we are required to state to them in an auditor's report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Company and the Company's
shareholders as a body, for our audit work, for this report, or for the
opinions we have formed.
Phillip Callow
For and on behalf of Moore Stephens Audit & Assurance (Jersey) Limited
1 Waverley Place
Union Street
St Helier Jersey
Channel Islands JE4 8SG
Date 18 November 2024
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2024
Year ended 30 June 2024 Year ended 30 June 2023
Notes £ £
Net fair value losses on financial assets held at fair value through profit or (491,941) (2,718,218)
loss
6
Investment income 11,969 11,816
Finance income 3,320 9,096
Administrative expenses 4 (265,915) (253,071)
Foreign exchange losses (3,167) (23,893)
Operating loss (745,734) (2,974,270)
Loss before tax (745,734) (2,974,270)
Tax 3 - -
Loss after tax (745,734) (2,974,270)
Other comprehensive income - -
Total comprehensive loss for the year (745,734) (2,974,270)
Basic earnings per share (pence) continuing and total operations 5 (0.52) (2.06)
Diluted earnings per share (pence) continuing and total operations 5 (0.52) (2.06)
The Company has no items of other comprehensive income.
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2024
As at As at
30 June 2024 30 June 2023
Notes £ £
ASSETS
Non-current assets
Financial assets held at fair value through profit or loss 6 4,274,285 4,779,202
4,274,285 4,779,202
Current assets
Other receivables and prepayments 7 56,401 44,977
Cash and cash equivalents 8 222,304 478,200
278,705 523,177
Total assets 4,552,990 5,302,379
LIABILITIES AND EQUITY
Current liabilities
Trade and other payables 9 50,784 54,439
50,784 54,439
Total Liabilities 50,784 54,439
EQUITY
Stated capital 16,652,482 16,652,482
Share based payment reserve 11 469,670 469,670
Retained deficit (12,619,946) (11,874,212)
Total equity 4,502,206 5,247,940
Total liabilities and equity 4,552,990 5,302,379
These financial statements were approved and authorised for issue by the Board
of Directors on 18 November 2024 and were signed on its behalf by:
D R King
Director
18 November 2024
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2024
Retained Total
Stated Share-based
capital payment reserve deficit equity
£ £ £ £
As at 1 July 2022 16,652,482 469,670 (8,899,942) 8,222,210
Comprehensive income
Total Comprehensive loss for the year ended 30 June 2023 - - (2,974,270) (2,974,270)
As at 30 June 2023 16,652,482 469,670 (11,874,212) 5,247,940
Comprehensive income
Total Comprehensive loss for the year ended 30 June 2024 - - (745,734) (745,734)
As at 30 June 2024 16,652,482 469,670 (12,619,946) 4,502,206
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2024
Year ended 30 June 2024 Year ended 30 June 2023
Notes £ £
Cash flows from operating activities
Loss for the year (745,734) (2,974,270)
Adjustments for:
Net fair value losses on financial assets at fair value through profit or loss 491,941 2,718,218
Movement in other receivables and prepayments 1,552 (34,831)
Movement in trade and other payables (3,655) 1,509
Net cash used in operating activities (255,896) (289,374)
Cash flows from investing activities
Proceeds from return of capital on investment 6 - 299,320
Purchase of investments 6 - (534,836)
Net cash used in investing activities - (235,516)
Net decrease in cash and cash equivalents (255,896) (524,890)
Cash and cash equivalents at beginning of year 478,200 1,003,090
Cash and cash equivalents at end of year 8 222,304 478,200
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2024
1. GENERAL INFORMATION AND STATEMENTS OF COMPLIANCE WITH
INTERNATIONAL FINANCIAL REPORTING STANDARDS AS ADOPTED BY THE EUROPEAN UNION
Westmount Energy Limited (the "Company") operates solely as an energy
investment company. The investment strategy of the Company is to invest in and
provide follow on capital to small and medium sized companies that have
significant growth possibilities.
The Company was incorporated in Jersey on 1 October 1992 under the Companies
(Jersey) Law 1991, as amended, and is a public company with registered number
53623. The Company is listed on the London Stock Exchange Alternative
Investment Market ("AIM"). On 1 December 2020 the Company commenced
cross-trading on the OTCQB Market in New York, U.S., under the ticker symbol
"WMELF".
Basis of Preparation
The financial statements are prepared on a going concern basis in accordance
with International Financial Reporting Standards as adopted by the European
Union ("IFRS") and applicable legal and regulatory requirements of the
Companies (Jersey) Law 1991. The financial statements have been prepared under
the historical cost convention except for the valuation of financial assets
held at fair value through profit or loss.
The Directors are satisfied that the Company has sufficient liquidity to meet
its operational expenditure and obligations from the date of approval of the
financial statements. The Directors monitor the income and expenditure of the
Company and have concluded that, at the time of approving the financial
statements of the Company, there is a reasonable expectation that the Company
has adequate resources to continue in operational existence for the
foreseeable future. Thus they have adopted the going concern basis of
accounting in preparing the annual financial statements.
2. ACCOUNTING POLICIES
The significant accounting policies that have been applied in the preparation
of these financial statements are summarised below. These accounting policies
have been used throughout all periods presented in the financial statements.
New standards, amendments and interpretations to existing standards that are
effective in the current year
Amendments to IAS 1 'Classification of liabilities as current or non-current'
Amendments to IAS 1 'Non-current liabilities with covenants'
The above amendments which have become effective from 1 January 2024 and have
therefore been adopted do not have a material effect on the financial
statements of the Company.
New standards, amendments and interpretations to existing standards that are
not yet effective and have not been adopted early by the Company
At the date of authorisation of these financial statements there are no other
standards that are not yet effective and that would be expected to have a
material impact on the Company in the current or future reporting periods and
on foreseeable future transactions.
Use of estimates and judgements
The preparation of financial statements in conformity with IFRS requires the
use of accounting estimates and the exercise of judgement by management while
applying the Company's accounting policies.
Financial assets at fair value through profit and loss that are not listed
have been valued in accordance with IFRS using the International Private
Equity and Venture Capital ("IPEVC") Guidelines and information received from
the investment entity. The inputs to value these assets require significant
estimates and judgements to be made by the Directors. The Directors have
considered the sensitivity of the valuations as detailed in note 12.
Functional and presentation currency
The functional currency of the Company is United Kingdom Pounds Sterling
("Sterling"), the currency of the primary economic environment in which the
Company operates. The presentation currency of the Company for accounting
purposes is also Sterling.
Foreign currency monetary assets and liabilities are translated into Sterling
at the rate of exchange ruling on the last day of the Company's financial
year. Foreign currency non-monetary items that are measured at fair value in a
foreign currency are translated into Sterling using the exchange rates at the
date when the fair value was determined. Foreign currency transactions are
translated at the exchange rate ruling on the date of the transaction. Gains
and losses arising on the currency translation are included in administrative
expenses in the Statement of Comprehensive Income in the year in which they
arise.
Financial instruments
Financial assets and financial liabilities are recognised when the Company
becomes party to the contractual provisions of the instrument.
(a) Classification
The Company classifies its financial assets in the following measurement
categories:
- those to be measured subsequently at fair value (either
through other comprehensive income or through profit or loss); and
- those to be measured at amortised cost.
The classification depends on the entity's business model for managing the
financial assets and the contractual terms of the cash flows. The Company
determines the classification of its financial assets and financial
liabilities at initial recognition.
Financial liabilities which are not financial liabilities held at fair value
through profit or loss are classified as other financial liabilities and held
at amortised cost.
(b) Recognition and measurement
Financial assets and financial liabilities are initially measured at fair
value. Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or financial
liabilities, as appropriate, on initial recognition. Transaction costs
directly attributable to the acquisition of financial assets or financial
liabilities at fair value through profit or loss are recognised immediately in
the Statement of Comprehensive Income.
Subsequent to initial recognition, financial assets at fair value through
profit or loss are re-measured at fair value. For listed investments, fair
value is determined by reference to stock exchange quoted market bid prices at
the close of business at the end of the reporting year, without deduction for
transaction costs necessary to realise the asset. For non-listed investments
fair value is determined by using recognised valuation methodologies, in
accordance with the IPEVC Guidelines. Gains or losses arising from changes
in the fair value of financial assets at fair value through profit or loss are
presented in the Statement of Comprehensive Income in the period in which they
arise.
Subsequent measurement of the Company's debt instruments depends on the model
for managing the asset and the cash flow characteristics of the asset.
The Company measures debt instruments at amortised cost if they are held for
collection of contractual cash flows where those cash flows represent solely
payments of principal and interest. The Company recognises any impairment loss
on initial recognition and any subsequent movement in the impairment provision
in the Statement of Comprehensive Income.
Debt instruments which do not represent solely payments of principal and
interest are measured at fair value through profit or loss.
Financial liabilities, which includes borrowings, are measured at amortised
cost using the effective interest method. The effective interest rate is the
rate that exactly discounts estimated future cash payments through the
expected life of the financial liability or, where appropriate, a shorter
period, to the net carrying amount on initial recognition.
Financial liabilities at fair value through profit or loss are re-measured at
fair value. Gains or losses arising from changes in fair value of financial
liabilities at fair value through profit or loss are presented in the
Statement of Comprehensive Income in the period in which they arise.
(b) Impairment
Under IFRS 9, the impairment model requires the recognition of impairment
provisions based on expected credit losses ("ECL") rather than only incurred
credit losses as was the case under IAS 39. IFRS 9 permits a simplified
approach to trade and other receivables which allows the Company to
recognise the loss allowance at initial recognition and throughout its life
at an amount equal to lifetime ECL. ECL are a probability-weighted estimate
of credit losses. A credit loss is the difference between the cash flows that
are due to an entity in accordance with the contract and the cash flows that
the entity expects to receive discounted at the original effective interest
rate. ECL consider the amount and timing of payments, thus a credit loss
arises even if the entity expects to be paid in full but later than when
contractually due.
The historical default rate has been considered by the Directors and there is
no history of bad debt. Under IFRS 9 ECL Model as well, which is forward
looking, all factors that could contribute to expected future losses have been
considered by the Directors and there is no expectation of credit loss in the
future. As such the Directors concluded that there is no material impact on
the financial statements.
(c) Derecognition
A financial asset or part of a financial asset is derecognised when the rights
to receive cash flows from the asset have expired and substantially all risks
and rewards of the asset have been transferred.
The Company derecognises a financial liability when the obligation under the
liability is discharged, cancelled or expired.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held on call with
banks and cash with broker. For the purpose of the Statement of Cash Flows,
cash and cash equivalents are considered to be all highly liquid investments
with maturity of three months or less at inception.
Equity, reserves and dividend payments
Ordinary shares are classified as equity. Transaction costs associated with
the issuing of shares are deducted from stated capital. Retained deficit
include all current and prior period retained profits and losses. Shares are
classified as equity when there is no obligation to transfer cash or other
assets.
Income and Expenditure
The income and expenses of the Company are recognised on an accruals basis in
the Statement of Comprehensive Income.
Share options
Equity-settled share-based payment transactions are measured at the fair value
of the goods and services received unless that cannot be reliably estimated,
in which case they are measured at the fair value of the equity instruments
granted. Fair value is measured at the grant date and is estimated using
valuation techniques. The fair value is recognised in the Statement of
Comprehensive Income, with a corresponding increase in equity via the share
option account in profit or loss. When options are exercised, the relevant
amount in the share option account is transferred to stated capital. When
options expire, the Company does not subsequently reverse the amounts already
recognised for services received from the Directors.
3. TAXATION
The Company is subject to income tax at a rate of 0%.
The Company is registered as an International Services Entity under the Goods
and Services Tax (Jersey) Law 2007 and a fee of £300 has been paid, which has
been included in administrative expenses.
4. ADMINISTRATIVE EXPENSES
2024 2023
£ £
Administration and consultancy fees 55,809 52,871
Advisory fees 33,144 29,779
Audit fees 16,648 19,264
Directors' fees 60,000 60,000
Legal and professional fees 13,924 26,556
Printing and stationery 17,885 23,324
Registered agent's fees 22,567 20,733
Insurance expense 27,470 505
Other expenses 18,468 20,039
265,915 253,071
5. EARNINGS PER SHARE
2024 2023
Basic earnings per share (pence) (0.52) (2.06)
Diluted earnings per share (pence) (0.52) (2.06)
Current year loss
The calculation of diluted earnings per share is not required this year as the
loss for the year is not diluted. The calculations have been left in for
information.
The table below presents information on the profit attributable to the
shareholders and the weighted average number of shares used in the calculating
the basic and diluted earnings per share.
2024 2023
Basic earnings per share £ £
Loss attributable to the shareholders of the Company (745,734) (2,974,270)
Diluted earnings per share
Loss attributable to the shareholders of the Company:
Used in calculating basic earnings per share (745,734) (2,974,270)
Add interest expense - -
Loss attributable to the shareholders of the Company used in calculating (745,734) (2,974,270)
diluted earnings per share
No. of shares No. of shares
Weighted average number of ordinary shares used as the denominator in 144,051,486 144,051,486
calculating basic earnings per share
Adjustments for calculating of diluted earnings per share:
Share options - -
Weighted average number of ordinary shares and potential ordinary shares used 144,051,486 144,051,486
as the denominator in calculating diluted earnings per share
6. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
2024 2023
£ £
Equity investments
Africa Oil Corp ("AOC") 423,244 503,317
Argos Resources Ltd ("Argos") - 3,480
Cataleya Energy Corporation ("Cataleya") 1,467,155 1,867,404
Eco Atlantic Oil & Gas Ltd ("Eco Atlantic") 198,000 216,750
JHI Associates Inc ("JHI") 2,182,521 2,182,521
Ratio Petroleum Energy Limited Partnership ("Ratio") 3,365 5,730
Total investments 4,274,285 4,779,202
Net changes in fair value of financial assets designated at fair value through
profit or loss
2024 2023
£ £
Opening cumulative unrealised loss (7,850,598) (5,599,369)
Net unrealised movement (194,142) (2,251,229)
Cumulative unrealised loss on financial assets at fair value through profit or (8,044,740) (7,850,598)
loss
2024 2023
£ £
Unrealised loss (194,142) (2,251,229)
Realised loss on return of capital of financial assets (297,799) (466,989)
Net changes in fair value of financial assets at fair value through profit or (491,941) (2,718,218)
loss
On 30 June 2024, the fair value of the Company's holding of 300,000 (2023:
300,000) ordinary fully paid shares in AOC, representing 0.066% (2023: 0.060%)
of the issued share capital of the company, was £423,244 (2023: £503,317)
(1.41p per share (2023: 1.68p)). No shares were purchased in the current year
(2023: 300,000 shares). No shares were disposed of in the current nor prior
years.
On 30 June 2024, the fair value of the Company's holding of 1,500,000 (2023:
1,500,000) ordinary fully paid shares in Eco Atlantic, representing 0.44%
(2023: 0.44%) of the issued share capital of the company, was £198,000 (2023:
£216,750) (13.20p per share (2023: 14.45p per share)). No shares were
purchased or disposed of in the current year nor prior years.
On 30 June 2024, the fair value of the Company's holding of 89,653 (2023:
89,653) ordinary fully paid shares in Ratio, representing 0.04% (2023: 0.04%)
of the issued share capital of the Company, was £3,365 (2023: £5,730) (3.75p
per share (2023: 6.39p per share)). No shares were purchased or disposed of
during the current nor prior years.
On 30 June 2024, the Directors' estimate of the fair value of the Company's
holding of 474,816 (2023: 474,816) shares in Cataleya was £1,467,156 (2023:
£1,867,404) (£3.09 per share (2023: £3.93)). No shares (2023: 92,369
shares amounting to £299,320) were disposed of in the current year. No shares
were purchased during the current nor prior years.
In September 2023, Argos announced the completion of a transaction with JHI
which resulted in the acquisition of operatorship and 100% working interest in
Argos sole asset by JHI in return for an issuance of JHI common shares.
Furthermore, it was announced that Argos has been placed into members'
voluntary liquidation and Argos have agreed to distribute JHI common shares to
shareholders on the register as at the relevant date. As a result, as at 30
June 2024, the fair value of the Company's holding of Nil (2023: 1,000,000)
shares in Argos was £Nil (2023: £3,480) (Nil per share (2023: 0.35p per
share)).
On 30 June 2024, the Directors' estimate of the fair value of the Company's
holding of 5,651,270 (2023: 5,651,270) shares in JHI was £2,182,521 (2023:
£2,182,521) (£0.39 per share (2023: £0.39 per share)). No shares were
purchase or disposed of in the current year.
7. OTHER RECEIVABLES AND PREPAYMENTS
2024 2023
£ £
Accrued income 11,871 11,816
Prepayments 31,554 33,161
Other receivables* 12,976 -
56,401 44,977
* The Company is anticipating to receive 33,660 JHI shares from Argos by way
of a post liquidation pro rata distribution of assets to Argos shareholders.
The Directors valued the expected JHI shares at £0.39 per share which is the
estimated fair value its existing JHI shares.
8. CASH AND CASH EQUIVALENTS
2024 2023
£ £
Cash at bank 222,389 475,569
(Overdraft)/cash at broker (85) 2,631
222,304 478,200
9. TRADE AND OTHER PAYABLES
2024 2023
£ £
Accrued expenses 50,784 54,439
50,784 54,439
10. STATED CAPITAL
Allotted, called up and fully paid: Ordinary shares Ordinary shares
No. £
1July 2022 144,051,486 16,652,482
Additions - -
1July 2023 144,051,486 16,652,482
Additions - -
At 30 June 2024 144,051,486 16,652,482
There were no share issues nor redemptions during the year ended 30 June 2024
(2023: £Nil).
11. SHARE-BASED PAYMENT RESERVE
2024 2023 2017
£ £ £
At 1 July 469,670 469,670 49,906
At 30 June 469,670 469,670
The number and weighted average exercise price of share options are as
follows:
2024 2024 2023 2023
Weighted average exercise price (p) Weighted average exercise price (p)
Number of options Number of options
Outstanding at start of the year 15.00 2,250,000 15.00 2,250,000
Granted during the year - - - -
Expired during the year - (2,250,000) - -
Exercised during the year - - - -
Outstanding at end of the year - - 15.00 2,250,000
Exercisable at end of the year - - 15.00 2,250,000
During the year, 2,250,000 options have expired (30 June 2023: Nil).
12. FINANCIAL RISK
The Company's investment activities expose it to a variety of financial risks:
market risk (including foreign exchange risk, price risk and interest rate
risk), credit risk and liquidity risk. The Company's overall risk management
programme focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the Company's financial performance.
a) Market risk
i) Foreign exchange risk
The Company's functional and presentation currency is Sterling. The Company is
exposed to currency risk through its investments in Africa Oil Corp, Cataleya,
JHI and Ratio, and cash at bank. The Directors have not hedged this exposure.
Currency exposure as at 30 June:
Assets and net exposure Assets and net exposure
2024 2023
Currency £ £
US Dollars 1,764,237 2,461,455
Canadian Dollars 2,470,594 2,550,667
Israeli Shekel 3,365 5,730
Total 4,238,196 5,017,852
If the value of Sterling had strengthened by 5% against all of the currencies,
with all other variables held constant at the reporting date, the equity
attributable to equity holders and the loss for the period would have
decreased by £203,814 (2023: £250,893). The weakening of Sterling by 5%
would have an equal but opposite effect. The calculations are based on the
foreign currency denominated financial assets as at year end and are not
representative of the period as a whole.
ii) Price risk
Price risk is the risk that the fair value of the future cash flows of a
financial instrument will fluctuate due to changes in market prices. The
Company is exposed to price risk on the investments held by the Company and
classified by the Company on the Statement of Financial Position as at fair
value through profit or loss. To manage its price risk, management closely
monitor the activities of the underlying investments.
The Company's exposure to price risk is as follows:
Fair value
£
Fair Value Through Profit or Loss, as at 30 June 2024 4,274,285
Fair Value Through Profit or Loss, as at 30 June 2023 4,779,202
With the exception of JHI and Cataleya, the Company's investments are all
publicly traded and listed on either the AIM, OTCQB, Tel Aviv Stock Exchange
or Toronto Stock Exchange. A 30% increase in market price would decrease the
pre-tax loss for the year and increase the net assets attributable to ordinary
shareholders by £187,383 (2023: £218,783). A 30% reduction in market price
would have increased the pre-tax loss for the year and reduced the net assets
attributable to shareholders by an equal but opposite amount. 30% represents
management's assessment of a reasonably possible change in the market prices.
A 30% increase in the market price of JHI and Cataleya would decrease the
pre-tax loss for the year and increase the net assets attributable to ordinary
shareholders by £1,094,903 (2023: £1,214,978). A 30% reduction in market
price would have increased the pre-tax loss for the year and reduced the net
assets attributable to shareholders by an equal but opposite amount. 30%
represents management's assessment of a reasonably possible change in the
market price of JHI and Cataleya based on the price of share purchases over
the last two years.
iii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. The Company is not exposed to material interest rate risk.
b) Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or
unwilling to meet commitments it has entered into with the Company. The
Directors do not believe the Company is subject to any significant credit risk
exposure regarding trade receivables.
At the end of the reporting period, the Company's financial assets exposed to
credit risk amounted to the following:
2024 2023
£ £
Cash and cash equivalents 222,304 478,200
The Company considers that all the above financial assets are not impaired or
past due for each of the reporting dates under review and are of good credit
quality.
c) Liquidity risk
Liquidity risk is the risk that the Company cannot meet its liabilities as
they fall due. The Company's primary source of liquidity consists of cash and
cash equivalents and those financial assets which are publicly traded and held
at fair value through profit or loss and which are deemed highly liquid.
The following table details the contractual, undiscounted cash flows of the
Company's financial liabilities:
As at 30 June 2024
Up to 3 months Up to 1 year Over 1 year Total
£ £ £ £
Financial liabilities
Trade and other payables 50,784 - - 50,784
50,784 - - 50,784
As at 30 June 2023
Up to 3 months Up to 1 year Over 1 year Total
£ £ £ £
Financial liabilities
Trade and other payables 54,439 - - 54,439
54,439 - - 54,439
Capital Management
The Company's objective when managing capital is to safeguard the Company's
ability to continue as a going concern in order to provide optimum returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce cost of capital.
In order to maintain or adjust the capital structure, the Company may issue
new shares, return capital to shareholders or sell assets. The Company does
not have any debt nor is the Company subject to any external capital
requirements.
Fair Value Estimation
The Company has classified its financial assets as fair value through profit
or loss and fair value is determined via one of the following categories:
Level I - An unadjusted quoted price in an active market provides the most
reliable evidence of fair value and is used to measure fair value whenever
available. As required by IFRS 7, the Company will not adjust the quoted price
for these investments, (even in situations where it holds a large position and
a sale could reasonably impact the quoted price).
Level II - Inputs are other than unadjusted quoted prices in active markets,
which are either directly or indirectly observable as of the reporting date,
and fair value is determined through the use of models or other valuation
methodologies.
Level III - Inputs are unobservable for the investment and include situations
where there is little, if any, market activity for the investment. The
inputs into the determination of fair value require significant management
judgment or estimation.
The following table shows the classification of the Company's financial
assets:
Level I Level II Level III Total
£ £ £ £
At 30 June 2024 624,609 - 3,649,676 4,274,285
At 30 June 2023 729,277 - 4,049,925 4,779,202
The Company has classified quoted investments as Level I, derivative financial
instruments as Level II and unquoted investments as Level III. The Level III
investment is at an early stage of development and therefore has been valued
based on the recent price of the investment. The Directors have considered
current market conditions and market expectations of future performance of the
entity's industry sector, in particular known interest in the area of current
exploration. As such, the Directors consider that the recent price of the
investment in Cataleya, which is the price of the ROC transaction in January
2023, fairly reflects the value of the investment as at 30 June 2024.
Following the most recent completed transaction in January 2022 which is the
acquisition by Eco (Atlantic) Oil and Gas Ltd. of JHI shares, the Directors
have used this price as their basis for determining the Company's fair value
investment in JHI. There have been no movements in classifications during the
year.
A reconciliation of the movements in Level III investments is shown below:
2024 2023
£ £
At start of the year 4,049,925 6,852,817
Proceeds from return of capital - (299,320)
Change in fair value (400,249) (2,503,572)
At end of the year 3,649,676 4,049,925
13. DIRECTORS' REMUNERATION AND SHARE OPTIONS
2024 2023 2024 2023
Directors' fees Directors' fees Options outstanding Options outstanding
£ £
DRKing 20,000 20,000 - 250,000
DCorcoran - - - 1,250,000
GWalsh 20,000 20,000 - 500,000
TO'Gorman 20,000 20,000 - 250,000
60,000 60,000 - 2,250,000
At the year end the Company owed £10,000 (2023: £10,000) in outstanding
Directors' fees.
During the year consultancy fees of £23,940 (2023: £21,469) were paid to D
Corcoran.
No options were granted during the current year. No options were exercised
during the current nor prior years. All options have expired during the
current year.
The shares held by the Directors are declared in the Directors' report.
The Company does not employ any staff except for its Board of Directors. The
Company does not contribute to the pensions or any other long-term incentive
schemes on behalf of its Directors.
14. RELATED PARTIES
Canaccord Genuity as a significant shareholder of the Company is considered a
related party under AIM rules. The Company paid £462 in Custody fees to
Canaccord Genuity for the year (2023: £400).
The shares held by the Directors are declared in the Directors' report.
15. CONTROLLING PARTY
In the opinion of the Directors, the Company does not
have a controlling party.
16. SUBSEQUENT EVENTS
On 15 August 2024, the Company changed its registered office address to Floor
4, Liberation House, Castle Street, St Helier, Jersey, JE1 4HH.
Further on 8 November 2024, the Company announced that its ordinary shares of
no par value will no longer be available for cross-trading via the OTCQB
Market effective from the opening of the markets on 2(nd) December 2024.
Apart from the aforementioned, there are no other significant events
subsequent to the year-end that require adjustment or disclosure in the
financial statements.
17. COMMITMENTS AND CONTINGENCIES
There are no commitments or contingencies other than those mentioned in these
financial statements.
* The Company is anticipating to receive 33,660 JHI shares from Argos by way
of a post liquidation pro rata distribution of assets to Argos shareholders.
The Directors valued the expected JHI shares at £0.39 per share which is the
estimated fair value its existing JHI shares.
8. CASH AND CASH EQUIVALENTS
2024 2023
£ £
Cash at bank 222,389 475,569
(Overdraft)/cash at broker (85) 2,631
222,304 478,200
9. TRADE AND OTHER PAYABLES
2024 2023
£ £
Accrued expenses 50,784 54,439
50,784 54,439
10. STATED CAPITAL
Allotted, called up and fully paid: Ordinary shares Ordinary shares
No. £
1 July 2022 144,051,486 16,652,482
Additions - -
1 July 2023 144,051,486 16,652,482
Additions - -
At 30 June 2024 144,051,486 16,652,482
There were no share issues nor redemptions during the year ended 30 June 2024
(2023: £Nil).
11. SHARE-BASED PAYMENT RESERVE
2024 2023 2017
£ £ £
At 1 July 469,670 469,670 49,906
At 30 June 469,670 469,670
The number and weighted average exercise price of share options are as
follows:
2024 2024 2023 2023
Weighted average exercise price (p) Weighted average exercise price (p)
Number of options Number of options
Outstanding at start of the year 15.00 2,250,000 15.00 2,250,000
Granted during the year - - - -
Expired during the year - (2,250,000) - -
Exercised during the year - - - -
Outstanding at end of the year - - 15.00 2,250,000
Exercisable at end of the year - - 15.00 2,250,000
During the year, 2,250,000 options have expired (30 June 2023: Nil).
12. FINANCIAL RISK
The Company's investment activities expose it to a variety of financial risks:
market risk (including foreign exchange risk, price risk and interest rate
risk), credit risk and liquidity risk. The Company's overall risk management
programme focuses on the unpredictability of financial markets and seeks to
minimise potential adverse effects on the Company's financial performance.
a) Market risk
i) Foreign exchange risk
The Company's functional and presentation currency is Sterling. The Company is
exposed to currency risk through its investments in Africa Oil Corp, Cataleya,
JHI and Ratio, and cash at bank. The Directors have not hedged this exposure.
Currency exposure as at 30 June:
Assets and net exposure Assets and net exposure
2024 2023
Currency £ £
US Dollars 1,764,237 2,461,455
Canadian Dollars 2,470,594 2,550,667
Israeli Shekel 3,365 5,730
Total 4,238,196 5,017,852
If the value of Sterling had strengthened by 5% against all of the currencies,
with all other variables held constant at the reporting date, the equity
attributable to equity holders and the loss for the period would have
decreased by £203,814 (2023: £250,893). The weakening of Sterling by 5%
would have an equal but opposite effect. The calculations are based on the
foreign currency denominated financial assets as at year end and are not
representative of the period as a whole.
ii) Price risk
Price risk is the risk that the fair value of the future cash flows of a
financial instrument will fluctuate due to changes in market prices. The
Company is exposed to price risk on the investments held by the Company and
classified by the Company on the Statement of Financial Position as at fair
value through profit or loss. To manage its price risk, management closely
monitor the activities of the underlying investments.
The Company's exposure to price risk is as follows:
Fair value
£
Fair Value Through Profit or Loss, as at 30 June 2024 4,274,285
Fair Value Through Profit or Loss, as at 30 June 2023 4,779,202
With the exception of JHI and Cataleya, the Company's investments are all
publicly traded and listed on either the AIM, OTCQB, Tel Aviv Stock Exchange
or Toronto Stock Exchange. A 30% increase in market price would decrease the
pre-tax loss for the year and increase the net assets attributable to ordinary
shareholders by £187,383 (2023: £218,783). A 30% reduction in market price
would have increased the pre-tax loss for the year and reduced the net assets
attributable to shareholders by an equal but opposite amount. 30% represents
management's assessment of a reasonably possible change in the market prices.
A 30% increase in the market price of JHI and Cataleya would decrease the
pre-tax loss for the year and increase the net assets attributable to ordinary
shareholders by £1,094,903 (2023: £1,214,978). A 30% reduction in market
price would have increased the pre-tax loss for the year and reduced the net
assets attributable to shareholders by an equal but opposite amount. 30%
represents management's assessment of a reasonably possible change in the
market price of JHI and Cataleya based on the price of share purchases over
the last two years.
iii) Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in market interest
rates. The Company is not exposed to material interest rate risk.
b) Credit risk
Credit risk is the risk that an issuer or counterparty will be unable or
unwilling to meet commitments it has entered into with the Company. The
Directors do not believe the Company is subject to any significant credit risk
exposure regarding trade receivables.
At the end of the reporting period, the Company's financial assets exposed to
credit risk amounted to the following:
2024 2023
£ £
Cash and cash equivalents 222,304 478,200
The Company considers that all the above financial assets are not impaired or
past due for each of the reporting dates under review and are of good credit
quality.
c) Liquidity risk
Liquidity risk is the risk that the Company cannot meet its liabilities as
they fall due. The Company's primary source of liquidity consists of cash and
cash equivalents and those financial assets which are publicly traded and held
at fair value through profit or loss and which are deemed highly liquid.
The following table details the contractual, undiscounted cash flows of the
Company's financial liabilities:
As at 30 June 2024
Up to 3 months Up to 1 year Over 1 year Total
£ £ £ £
Financial liabilities
Trade and other payables 50,784 - - 50,784
50,784 - - 50,784
As at 30 June 2023
Up to 3 months Up to 1 year Over 1 year Total
£ £ £ £
Financial liabilities
Trade and other payables 54,439 - - 54,439
54,439 - - 54,439
Capital Management
The Company's objective when managing capital is to safeguard the Company's
ability to continue as a going concern in order to provide optimum returns for
shareholders and benefits for other stakeholders and to maintain an optimal
capital structure to reduce cost of capital.
In order to maintain or adjust the capital structure, the Company may issue
new shares, return capital to shareholders or sell assets. The Company does
not have any debt nor is the Company subject to any external capital
requirements.
Fair Value Estimation
The Company has classified its financial assets as fair value through profit
or loss and fair value is determined via one of the following categories:
Level I - An unadjusted quoted price in an active market provides the most
reliable evidence of fair value and is used to measure fair value whenever
available. As required by IFRS 7, the Company will not adjust the quoted price
for these investments, (even in situations where it holds a large position and
a sale could reasonably impact the quoted price).
Level II - Inputs are other than unadjusted quoted prices in active markets,
which are either directly or indirectly observable as of the reporting date,
and fair value is determined through the use of models or other valuation
methodologies.
Level III - Inputs are unobservable for the investment and include situations
where there is little, if any, market activity for the investment. The
inputs into the determination of fair value require significant management
judgment or estimation.
The following table shows the classification of the Company's financial
assets:
Level I Level II Level III Total
£ £ £ £
At 30 June 2024 624,609 - 3,649,676 4,274,285
At 30 June 2023 729,277 - 4,049,925 4,779,202
The Company has classified quoted investments as Level I, derivative financial
instruments as Level II and unquoted investments as Level III. The Level III
investment is at an early stage of development and therefore has been valued
based on the recent price of the investment. The Directors have considered
current market conditions and market expectations of future performance of the
entity's industry sector, in particular known interest in the area of current
exploration. As such, the Directors consider that the recent price of the
investment in Cataleya, which is the price of the ROC transaction in January
2023, fairly reflects the value of the investment as at 30 June 2024.
Following the most recent completed transaction in January 2022 which is the
acquisition by Eco (Atlantic) Oil and Gas Ltd. of JHI shares, the Directors
have used this price as their basis for determining the Company's fair value
investment in JHI. There have been no movements in classifications during the
year.
A reconciliation of the movements in Level III investments is shown below:
2024 2023
£ £
At start of the year 4,049,925 6,852,817
Proceeds from return of capital - (299,320)
Change in fair value (400,249) (2,503,572)
At end of the year 3,649,676 4,049,925
13. DIRECTORS' REMUNERATION AND SHARE OPTIONS
2024 2023 2024 2023
Directors' fees Directors' fees Options outstanding Options outstanding
£ £
D R King 20,000 20,000 - 250,000
D Corcoran - - - 1,250,000
G Walsh 20,000 20,000 - 500,000
T O'Gorman 20,000 20,000 - 250,000
60,000 60,000 - 2,250,000
At the year end the Company owed £10,000 (2023: £10,000) in outstanding
Directors' fees.
During the year consultancy fees of £23,940 (2023: £21,469) were paid to D
Corcoran.
No options were granted during the current year. No options were exercised
during the current nor prior years. All options have expired during the
current year.
The shares held by the Directors are declared in the Directors' report.
The Company does not employ any staff except for its Board of Directors. The
Company does not contribute to the pensions or any other long-term incentive
schemes on behalf of its Directors.
14. RELATED PARTIES
Canaccord Genuity as a significant shareholder of the Company is considered a
related party under AIM rules. The Company paid £462 in Custody fees to
Canaccord Genuity for the year (2023: £400).
The shares held by the Directors are declared in the Directors' report.
15. CONTROLLING PARTY
In the opinion of the Directors, the Company does not
have a controlling party.
16. SUBSEQUENT EVENTS
On 15 August 2024, the Company changed its registered office address to Floor
4, Liberation House, Castle Street, St Helier, Jersey, JE1 4HH.
Further on 8 November 2024, the Company announced that its ordinary shares of
no par value will no longer be available for cross-trading via the OTCQB
Market effective from the opening of the markets on 2(nd) December 2024.
Apart from the aforementioned, there are no other significant events
subsequent to the year-end that require adjustment or disclosure in the
financial statements.
17. COMMITMENTS AND CONTINGENCIES
There are no commitments or contingencies other than those mentioned in these
financial statements.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR GPGBUGUPCPGRRecent news on Westmount Energy
See all newsREG - Westmount Energy Ld - Interim Financial Statements
AnnouncementREG - Westmount Energy Ld Canaccord GenuityGrp - Holding(s) in Company
AnnouncementREG - Westmount Energy Ld Canaccord GenuityGrp - Holding(s) in Company
AnnouncementREG - Westmount Energy Ld - Result of AGM
AnnouncementREG - Westmount Energy Ld - Final Results & Notice of AGM
Announcement