News 09 March 2012

Interim statement for the six months ended 31st December 2011

Spitfire Oil Limited (“Spitfire” or “the Company”) is pleased to publish a copy of its unaudited interim results for the six months ended the 31st December 2011, a summary of which is attached.

Introduction

Spitfire and its subsidiaries (together “the Group”) recorded a loss before tax for the six months ended the 31st December 2011 of A$211,889 (2010: A$189,684). With cash balances of A$7.5m, the Group has benefited from interest receipts of A$181,000 in the period.

Spitfire has continued to monitor the technologies available for processing the Salmon Gums lignite into a saleable gas or distillate. Several proposals have been investigated during the year but the Board is yet to be convinced that any are commercially viable. However, as world fuel prices continue to rise, several technologies are emerging. The Company remains convinced that being patient until a suitable process is developed is the prudent course of action. Accordingly, Spitfire has continued conducting work to maintain the exploration licences in good standing while looking at other investment proposals and maintaining its cash funds. Several new proposals were progressed during the year but they either failed to meet the Company's investment criteria or failed to come to fruition.

Licence Management

As outlined in the 2010 Annual Report, the Salmon Gums exploration licences were successfully extended until the 6th July 2012. Application for a retention licence over the area of the defined lignite resource was applied for on the 20th October 2011 and covers an area of 23,749 hectares. Retention licences are granted where a mineral resource has been identified but where the mining and processing is not currently viable. They are issued for a period of 5 years, are renewable and, apart from annual rent, have minimal expenditure requirements.

The following table shows the current status of the Salmon Gums Project licences pending grant of a retention licence.

Lease

Project

Locality

Status

Area

Applic

Grant

Expiry

EXP $

Rent $

E63/934

Salmon Gums

WA

Granted

15 Blocks

27/01/2004

07/07/2005

06/07/2012

$50,000.00

$3,592.50

E63/935

Salmon Gums

WA

Granted

21 Blocks

27/01/2004

07/07/2005

06/07/2012

$50,000.00

$5,029.50

E63/947

Salmon Gums

WA

Granted

52 Blocks

20/10/2004

07/07/2005

06/07/2012

$104,000.00

$12,454.00

E63/961

Salmon Gums

WA

Granted

21 Blocks

29/12/2004

06/10/2005

05/10/2012

$50,000.00

$5,029.50

R63/3

Marda

WA

Application

23748.7 H

20/10/2011

$0.00

$0.00

Note: Rent and expenditure commitments for the Retention Licence Application cannot be set until approved

Gold Programme

Following the successful identification of an area of anomalous gold mineralization in the project area in 2009-2010, an attempt was made to locate a suitable joint venture partner to share the risk of ongoing exploration. With no suitable partner found, Spitfire continued with further gold exploration during 2011 as part of the minimum expenditure requirements of the licences.

The gold exploration program consisted of drilling further reconnaissance holes over theoretical targets in each of the licences, although one area was omitted due to logistical concerns. The results were disappointing in that most of the anomalous indicators were found to be insignificant. Given these results, it was decided that Spitfire should discontinue further gold exploration in the area.


SPITFIRE OIL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2011
(expressed in Australian dollars)

Half-year

Full-year

Note

31 December
2011
Unaudited
A$

31 December
2010
Unaudited
A$

30 June
2011
Audited
A$

REVENUE

180,660

177,970

570,879

EXPENDITURE

Technology and development

-

(10,045)

-

Corporate expenses

(331,357)

(257,407)

(691,630)

Other expenses

(61,192)

(100,202)

(151,676)

LOSS BEFORE INCOME TAX

(211,889)

(189,684)

(272,427)

Income tax benefit / (expense)

-

-

-

LOSS FOR THE HALF-YEAR

(211,889)

(189,684)

(272,427)

OTHER COMPREHENSIVE INCOME

-

-

-

TOTAL COMPREHENSIVE LOSS FOR
THE PERIOD ATTRIBUTABLE TO
MEMBERS OF SPITFIRE OIL LIMITED

(211,889)

(189,684)

(272,427)

Basic and diluted loss per share (cents)

6

(0.5)

(0.4)

(0.6)

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

SPITFIRE OIL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 December 2011
(expressed in Australian dollars)

31 December

31 December

30 June

Note

2011

Unaudited

A$

2010

Unaudited

A$

2011

Audited

A$

CURRENT ASSETS

Cash and cash equivalents

7,519,328

7,996,690

7,985,012

Trade and other receivables

3,266

3,876

8,051

Other current assets

71,128

76,757

67,268

TOTAL CURRENT ASSETS

7,593,722

8,077,323

8,060,331

NON-CURRENT ASSETS

Plant and equipment

1,085

4,925

2,432

Intangible assets

8,332,730

7,942,618

8,034,656

TOTAL NON-CURRENT ASSSETS

8,333,815

7,947,543

8,037,088

TOTAL ASSETS

15,927,537

16,024,866

16,097,419

CURRENT LIABILITIES

Trade and other payables

6,909

38,974

44,333

TOTAL CURRENT LIABILITIES

6,909

38,974

44,333

TOTAL LIABILITIES

6,909

38,974

44,333

NET ASSETS

15,920,628

15,985,892

16,053,086

EQUITY

Issued capital

5

20,854,412

20,854,412

20,854,412

Reserves

229,368

790,001

149,937

Accumulated losses

(5,163,152)

(5,658,521)

(4,951,263)

TOTAL EQUITY

15,920,628

15,985,892

16,053,086

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

SPITFIRE OIL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2011
(expressed in Australian dollars)

Contributed Equity

Options Reserve

Accumulated Losses

Total

A$

A$

A$

A$

BALANCE AT 1 JULY 2010

20,854,412

790,001

(5,468,837)

16,175,576

Total comprehensive loss for the period

-

-

(189,684)

(189,684)

BALANCE AT 31 DECEMBER 2010

20,854,412

790,001

(5,658,521)

15,985,892

Total comprehensive loss for the period

-

-

(82,743)

(82,743)

TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS

Transfer of reserve upon expiry of options

-

(790,001)

790,001

-

Issuance of employee share options

-

149,937

-

149,937

BALANCE AT 30 JUNE 2011

20,854,412

149,937

(4,951,263)

16,053,086

Total comprehensive loss for the period

-

-

(211,889)

(211,889)

TRANSACTIONS WITH OWNERS IN THEIR CAPACITY AS OWNERS

Vesting of employee share options

-

79,431

-

79,431

BALANCE AT 31 DECEMBER 2011

20,854,412

229,368

(5,163,152)

15,920,628

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

SPITFIRE OIL LIMITED
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2011
(expressed in Australian dollars)

Half-year

Full-year

31 December
2011
Unaudited
A$

31 December
2010
Unaudited
A$

30 June
2011
Audited
A$

CASH FLOWS FROM OPERATING ACTIVITIES

Payments to suppliers and employees

(335,362)

(394,869)

(720,027)

Interest received

180,660

178,265

364,757

R&D tax concession received

-

-

206,417

Net cash outflow from operating activities

(154,702)

(216,604)

(148,853)

CASH FLOWS FROM INVESTING ACTIVITIES

Refund of tenement rents

-

348,865

348,865

Exploration expenditure

(311,275)

(41,117)

(119,711)

Net cash (outflow)/inflow from investing activities

(311,275)

307,748

229,154

CASH FLOWS FROM FINANCING ACTIVITIES

Net cash inflow/(outflow) from financing activities

-

-

-

Net (decrease)/increase in cash and cash equivalents

(465,977)

91,144

80,301

Cash and cash equivalents at the beginning of the
period

7,985,012

7,926,723

7,926,723

Effects of exchange rate changes on cash and cash
equivalents

293

(21,177)

(22,012)

CASH AND CASH EQUIVALENTS AT THE END
OF THE PERIOD

7,519,328

7,996,690

7,985,012

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

SPITFIRE OIL LIMITED
Notes to the CONDENSED CONSOLIDATED financial statements

NOTE 1: BASIS OF PREPARATION OF THE HALF-YEAR FINANCIAL REPORT

This condensed consolidated interim financial report for the half-year reporting period ended 31 December 2011 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

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 condensed consolidated statement of financial position at 30 June 2011 and the condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and the condensed consolidated statement of cash flows for the year then ended have been extracted from the Group’s 2011 statutory financial statements upon which the auditors’ opinion is unqualified. The condensed consolidated statement of comprehensive income has been prepared using information extracted from the Group’s 2011 statutory financial statements.

This condensed consolidated interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by Spitfire Oil Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

Copies of this interim report are being sent to all registered shareholders. Additional copies are available from the Company’s London office, 60 St James’s Street, London, SW1A 1LE.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

The Group has reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 31 December 2011. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change necessary to Group accounting policies.

NOTE 2: SEGMENT INFORMATION

The Group operates in predominantly one operating segment, being the exploration and mining for valuable resources that produce energy in Australia.

NOTE 3: DIVIDENDS

The Company has not declared any dividends in the period ended 31 December 2011.

NOTE 4: CONTINGENCIES

There has been no change in contingent liabilities or contingent assets since the last annual reporting date.

NOTE 5: ISSUED CAPITAL

31 December 2011

31 December 2010

30 June 2011

No

A$

No

A$

No

A$

Issued and Paid Up Capital

Fully Paid Ordinary Shares

42,550,668

20,854,412

42,550,668

20,854,412

42,550,668

20,854,412

Total Issued Capital

20,854,412

20,854,412

20,854,412

NOTE 6: LOSS PER SHARE

31 December
2011

31 December
2010

30 June
2011

Basic and diluted loss per share (cents)

(0.5)

(0.4)

(0.6)

a) Net loss used in the calculation of basic and diluted
loss per share

(211,889)

(189,684)

(272,427)

b) Weighted average number of ordinary shares
outstanding during the period used in the calculation
of basic and diluted loss per share

42,550,668

42,550,668

42,550,668

Options that are considered to be potential ordinary shares are excluded from the weighted average number of ordinary shares used in the calculation of basic loss per share. Where dilutive, potential ordinary shares are included in the calculation of diluted loss per share.

All the options on issue do not have the effect to dilute loss per share. Therefore they have been excluded from the calculation of diluted loss per share. There have been no other conversions to, call of, or subscriptions for ordinary shares since the reporting date and before the completion of this report.

NOTE 7: NET TANGIBLE ASSETS

31 December 2011

31 December 2010

30 June 2011

Net Tangible Assets (A$)

7,587,898

8,043,274

8,018,430

Shares (No)

42,550,668

42,550,668

42,550,668

Net Tangible Assets (cents)

17.8

18.9

18.8

NOTE 8: SUBSEQUENT EVENTS

No matter or circumstance has arisen since 31 December 2011, which has significantly affected, or may significantly affect the operations of the Group, the result of those operations, or the state of affairs of the Group in subsequent financial years.