News 17 December 2010

Preliminary Results

Spitfire Oil Limited (“Spitfire Oil” or the “Company”), has today published its results for the period ended 30 June 2010, a summary of which is attached.

The Group’s principal activity is the pursuance of the production of fuel oil and distillate from the Salmon Gums Lignite deposits in Western Australia.

The Group has reported a loss before tax of A$1,202,916 in the year to 30th June 2010. (2008/2009 A$1,437,020)

Chairman’s Statement:

The past year’s developments at Spitfire Oil Limited (“Spitfire” or the “Company”) can safely be described as very disappointing. A thorough review of the Salmon Gums project (the “Project”) concluded that a saleable distillate could not be produced economically at current world crude oil prices through the LV2 lignite to liquids process. As a consequence, a conscious decision was made to minimize all activities by the Company on the Project including suspending any further work on the L2V process, minimizing any additional geological work and reducing all overhead costs, including the redundancy of all personnel. These actions have stabilised the Company's finances whilst maintaining the security of its assets, allowing the directors time to pursue options for the development of the Company's Project and the investigation of other energy related projects.

In the later part of 2009, the potential for the occurrence of gold within Spitfire's tenements was recognised and the Company commissioned a reconnaissance gold exploration programme to test the north-eastern part of the Salmon Gums license areas. Desktop studies identified a favourable target zone at the intersection of two regionally important faults. This was investigated with the drilling of 132 air core holes on a wide spaced 800 x 200 metre grid for a total of 7,706 metres. Sample results from these holes were encouraging with several zones of anomalous gold values delineated. These anomalies cover only some 10 kilometres of the 55 kilometres of the regional fault system. These encouraging results will require further drilling to ascertain the extent of the mineralization. The Company is currently investigating all options, including the identification of a joint venture partner, to identify the necessary significant resources required for this further exploration work.

As a result of the actions taken during 2009 and 2010, Spitfire's near term future has been assured. The challenge for the Company now is not only to realise the full potential of the Project, but also, in a world with exponentially increasing energy demands and declining fossil fuel resources, to expand and extend its reach into all facets of the energy sector. In 2011, the Company will strive to do so.


SPITFIRE OIL LIMITED
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2010
(expressed in Australian dollars)

2010 2009
A$ A$
Other revenue 649,451 1,208,333
Expenditure
Corporate expenses (1,275,932) (1,651,427)
Technology and development (394,613) (697,216)
Other expenses (181,822) (296,710)
Loss before income tax (1,202,916) (1,437,020)
Income tax expense - -
Loss for the year (1,202,916) (1,437,020)
Other comprehensive income
Exchange differences on translation of foreign operations (55,271) 2,056,914
Other comprehensive income for the year, net of tax (55,271) 2,056,914
Total comprehensive (loss) / income for the year attributable to the owners of Spitfire Oil Limited (1,258,187) 619,894
Basic and diluted loss per share attributable to the ordinary equity holders of the Company (cents per share) (2.8) (3.38)

Spitfire Oil Limited
Consolidated Statement of Financial Position
As at 30 June 2010 (expressed in Australian dollars)

2010 2009
A$ A$
ASSETS
CURRENT ASSETS
Cash and cash equivalents 7,926,723 9,974,229
Trade and other receivables 295 14,077
Other current assets 64,705 60,037
TOTAL CURRENT ASSETS 7,991,723 10,048,343
NON-CURRENT ASSETS
Plant and equipment 7,954 13,906
Capitalised exploration and evaluation costs 8,249,289 7,590,913
TOTAL NON-CURRENT ASSETS 8,257,243 7,604,819
TOTAL ASSETS 16,248,966 17,653,162
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 73,390 202,299
Provisions - 17,100
TOTAL CURRENT LIABILITIES 73,390 219,399
 
TOTAL LIABILITIES 73,390 219,399
NET ASSETS 16,175,576 17,433,763
EQUITY
Issued capital 20,854,412 20,854,412
Reserves 790,001 845,272
Accumulated loss (5,468,837) (4,265,921)
TOTAL EQUITY 16,175,576 17,433,763

Spitfire Oil Limited
Consolidated Statement of Changes in Equity
For the year ended 30 June 2010
(expressed in Australian dollars)
Issued Capital Foreign Currency Translation Accumulated Losses Option reserve Total
A$ A$ A$ A$ A$
Balance at 1 July 2008 20,854,412 (2,001,643) (2,828,901) 592,667 16,616,535
Share based remuneration - - - 197,334 197,334
Translation of Foreign currency - 2,056,914 - - 2,056,914
Net (Loss) for the period - - (1,437,020) - (1,437,020)
Balance at 30 June 2009 20,854,412 55,271 (4,265,921) 790,001 17,433,763
Translation of Foreign currency - (55,271) - - (55,271)
Net (Loss) for the period - - (1,202,916) - (1,202,916)
Balance at 30 June 2010 20,854,412 - (5,468,837) 790,001 16,175,576

Spitfire Oil Limited
Consolidated Statement of Cash Flows
For the year ended 30 June 2010
(expressed in Australian dollars)

2010 2009
A$ A$
CASH FLOWS FROM OPERATING ACTIVITIES
Payments to suppliers and employees (1,464,319) (2,621,682)
Interest received 313,610 551,708
R&D tax concession received 324,688 656,096
NET CASH OUT FLOW FROM OPERATING ACTIVITIES (826,021) (1,413,878)
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sales of plant and equipment - 10,484
Payment for purchases of plant and equipment - (2,976)
Exploration Expenditure (1,213,195) (4,731,954)
NET CASH OUT FLOW FROM INVESTING ACTIVITIES (1,213,195) (4,724,446)
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (2,039,216) (6,138,324)
Cash and cash equivalents at the beginning of the year 9,974,229 14,055,639
Effects of exchange rate changes on cash and cash equivalents (8,290) 2,056,914
CASH AND CASH EQUIVALENTS AT THE END OF THE FINANCIAL YEAR 7,926,723 9,974,229

Notes:

  1. This statement has been prepared using accounting policies and presentation consistent with those applied in the preparation of the statutory accounts of the Group.
  2. The summary accounts set out above do not constitute statutory accounts as defined by Section 84 of the Bermuda Companies Act 1981 or Section 435 of the UK Companies Act 2006. The summarised consolidated statement of financial position at 30 June 2010 and the summarised consolidated statement of comprehensive income, consolidated statement of changes in equity and the summarised consolidated statement of cash flows for the year then ended have been extracted from the Group’s 2010 statutory financial statements upon which the auditors’ opinion is unqualified. The statutory financial statements for the year to 30 June 2010 have been prepared in accordance with the requirements of International Accounting Standard IAS1: Presentation of Financial Statements as adopted in Australia. The results for the year ended 30 June 2009 have been extracted from the statutory accounts for that period, which contain an unqualified auditors’ report.
  3. The annual report and accounts for 2010 are being sent by post to all registered shareholders. Additional copies of the annual report and accounts are available from the Company’s London correspondent office, 6th Floor, 60 St James’s Street, London, SW1A 1LE.
  4. The calculation of the basic and diluted losses per share is based on the loss attributable to ordinary shareholders of A$1,202,916 divided by the weighted average number of shares in issue during the year of 42,550,668. There is no dilutive effect of share purchase options.

The preliminary results can also be downloaded in Adobe Acrobat format