Westmount Energy Limited("Westmount" or the "Company") Interim Results The Company is pleased to announce its Interim Results for the period ended 31 December 2014. A copy of the results is available on the Company's website, www.westmountenergy.com, and will be posted to shareholders. CHAIRMAN'S REVIEW When I last reported to you, I referred to the ongoing review of various corporate and transaction opportunities. The uncertainty generated by the rapid fall in the oil price resulted in a number of proposals and discussions regarding possible transactions to be being terminated or put on hold. In light of the new oil price environment, I have renewed efforts to assess opportunities to create value for shareholders. As previously stated, should a value enhancing proposal materialise, Westmount shareholders should be afforded the opportunity to participate. The past six months has seen an acute adjustment in the oil price. The price move was prompted by OPEC's decision last November to leave production quotas unchanged and OPEC's desire to maintain market share. At the time there was an excess supply of approximately 2 million barrels per day in world oil production; however the 60% price fall in light of an effective 2% excess daily supply may be overdone in the longer term. There have been a number of unintended consequences as a result of the rapid pace of the oil price fall, with many smaller OPEC members hurting financially. So the next OPEC meeting together with geo-political events should be closely watched and could further impact on the commodity price. As oil & gas exploration & production companies adjust to the new price environment, their share prices have reacted negatively to the lower oil price outlook as well as each company's particular challenges. These challenges include, asset valuation write downs, reduced cash flow, unprofitable production, unsustainable debt levels, lack of exploration capital and tougher farm out market. Some companies face a combination of all of the above and may fail. For others with capital and proven management teams there should be opportunities. While Westmount's portfolio has suffered from exposure to falling share prices of some holdings in the portfolio, fortunately, Westmount's largest investment holding, Falklands Oil & Gas Limited, has the following positive attributes: · Exposure to up to 5 exploration wells in both the North and South Falklands Island basins, most of which are carried by third parties, · Targeting 1.4 billion barrels of gross prospective resources, · Cash of c.US$100m at 31 December 2014, and no debt, · Interest of at least 40% in each licence ensures their shareholders will have substantial equity exposure to these resources in the case of success. On March 6th Falkland Oil and Gas Limited made an announcement on the commencement of their 2015 drilling programme, which is available for you to view: http://www.fogl.com/fogl/en/Media/pressreleases?id=168. The Falkland Oil & Gas Limited share price has recovered recently reflecting the above fundamentals. I remain hopeful that our investment exposure to the Falklands could recover shareholder value over the current drilling campaign. As mentioned above, other holdings in the portfolio have underperformed relative to FOGL. During the period under review the board agreed to dispose of 200,000 shares in Sterling Energy PLC to raise £50,582 for general and corporate overheads. Westmount still retains 300,000 shares in Sterling Energy PLC. Finally, Mr Peter Richardson, a long serving director, recently resigned from the board. I wish to thank him for his support and contribution to Westmount and wish him well for the future. Gerard Walsh Chairman 31 March 2015 |