Final Results

Become a Member

Track your favourite stocks
Create & monitor portfolios
Daily portfolio value

Company	Chg	Chg %
Quickpicks
£	%
Add shares to your quickpicks to display them here!

Consideration on disposal

Cash consideration

8th Oct 2012 07:00

RNS Number : 0971O

Bluebird Energy PLC

08 October 2012

BLUEBIRD ENERGY PLC

(AIM: BBE)

Final Results for the Year Ended 30 June 2012

Bluebird Energy PLC ("Bluebird" or "the Company") is pleased to announce its final results for the year ended 30 June 2012.

Contacts
Bluebird Energy plc	www.bluebirdenergy.net
James Ede-Golightly	+44 (0) 1225 428139

WH Ireland Limited	www.wh-ireland.co.uk
John Wakefield/Marc Davies	+44 (0) 117 945 3470

Chairman's Statement

Bluebird's first year as a public company has been a difficult and disappointing one. A strategy is now underway to consolidate the remaining balance sheet value prior to either renewed investment or return of capital to shareholders.

In July 2011, Bluebird obtained admission to the AIM market of the London Stock Exchange, accompanied by an institutional placing raising £2 million before expenses and a further amount of approximately £0.2 million by means of an Open Offer.

Following admission to AIM, the Company commenced a strategic review in August. This review was triggered by Running Foxes sale of its operator interest at the Centurion project in Kansas, in which Bluebird held a net 50% working interest. Centurion was Bluebird's only producing asset.

In October the Centurion interest was sold for gross proceeds of US$3.1m and impairments on the US portfolio of over US$15m were subsequently recognised on publication of the June 2011 year end accounts. David Bramhill stepped down as executive chairman in December 2011.

In 2012, the residual value in Bluebird is predominantly represented by the Company's stake in Wessex Exploration and cash balances, which can be summarised as follows:


37,055,245 Wessex Shares at 7.38p (being the closing price on 3 October 2012)*	£2.59m
Cash balance at 30 June 2012	£1.28m

In the US, Solitaire is the only asset to which the Company has continued to assign any meaningful value. The Company is in the process of marketing this asset for farm-out or sale. Whilst the decline and on-going weakness in the gas price has diminished interest in Solitaire as a Niobrara biogenic shallow gas play, we are evaluating whether the acreage may have potential as a Mississippian oil play. Elsewhere in the US portfolio, the focus is on securing a complete exit from the Marcellus and Revloc Projects at minimal cost. Specifically, the operator at Revloc is currently in the process of commissioning contractors to Plug and Abandon seven wells in Cambria County, Pennsylvania.

Having received notification from the Irish government licensing agency, the Petroleum Affairs Division, that they do not propose granting any new authorisations for shale gas exploration in the near future, we do not intend to focus on this jurisdiction as an area for development.

Upon my appointment in March 2012, the Board commenced a cost reduction programme which is on-going and is intended to minimise the strain of working capital on cash balances. While operating costs fell by more than half in the six months ended 30 June 2012 compared to the prior half year, the cost reduction initiatives are on-going and the Board expects a further significant reduction in operating costs in the current financial year.

In June 2012, Bluebird distributed just under half of its holding in Wessex Exploration PLC to shareholders by way of a £2.15m dividend in specie. This decision reflected enthusiasm from shareholders for a return of capital as well as the Board's conclusion that Bluebird was not creating additional value for shareholders through its custody of this interest.

Board Changes

Due to other work commitments, Andy Yeo and Frederick Dekker decided to step down with effect from 28 September 2012. We would like thank Andy and Fred for their contributions to the Company and wish them well for the future.

Given the reduced level of activity in the group, I will assume executive responsibilities on an interim basis with support from Mike Thomsen, who represents Osceola's interests in the US. The need to recruit a board level executive function will be kept under review.

We announced recently the appointment of Gordon Hall as an independent non-executive director. Gordon is a non-executive director of Nanoco Group Plc and International Brand Licensing plc. After an early career in teaching, Gordon built up substantial international sales, management and development expertise with Rank Xerox and Abbott Laboratories. He became Chief Executive Officer of Shield Diagnostic Ltd (now Axis Shield plc) in 1990 and was responsible for listing the Company on the London Stock Exchange.

Outlook

The immediate priority is to complete the process of simplifying the asset base and operating structure while reducing overheads to conserve cash. Once completed, the Company will be suitably positioned either to pursue renewed investment or return capital to shareholders.

Consolidated Income Statement

for the year ended 30 June 2012

	Notes	2012	2011
Continuing operations:		US$	US$

Revenue		5,484	6,202


Gross profit		5,484	6,202

Administrative expenses		(2,713,735)	(2,539,014)
Exceptional administrative expenses	2	(972,283)	(9,549,233)


Total administrative expenses		(3,686,018)	(12,088,247)


Operating loss	2	(3,680,534)	(12,082,045)

Finance income	4	6,952	2,134
Profit / (loss) on disposal of available-for-sale investments		2,568,779	(132,145)
Share of losses of associates	11	(35,527)	(48,492)


Loss before taxation		(1,140,330)	(12,260,548)

Taxation	5	(8,074)	(7,932)


Loss for the financial year from continuing operations		(1,148,404)	(12,268,480)

Discontinued operations:
Loss for the financial year from discontinued operations	6	(418,236)	(5,341,605)


Loss for the financial year		(1,566,640)	(17,610,085)


Attributable to:
Equity shareholders of the Company		(1,566,640)	(17,610,085)


Loss per share from continuing and discontinued operations

Basic and diluted loss per share (US cents)	7	(0.32)	(6.94)

Loss per share from continuing operations

Basic and diluted loss per share (US cents)	7	(0.23)	(4.83)

Consolidated Statement of Comprehensive Income

for the year ended 30 June 2012

	Notes	2012	2011
		US$	US$

Loss for the financial year		(1,566,640)	(17,610,085)

Other comprehensive income

Available-for-sale financial assets:
Fair value gains / (losses) arising during the year		3,806,487	(5,683)
Less / plus: reclassification adjustments for (gains) / losses included in profit or loss		(2,568,779)	138,753
Tax on gain on available-for-sale financial assets		(263,077)	(154,515)
Foreign exchange (losses) / gains on consolidation		(45,100)	289,410


Other comprehensive income for the financial year net of tax		929,531	267,965


Total comprehensive income for the financial year		(637,109)	(17,342,120)

Consolidated Balance Sheet

as at 30 June 2012

	Notes	2012	2011
Assets		US$	US$
Non-current assets
Property, plant and equipment	8	771,387	1,129,546
Intangible assets	9	911,932	4,620,131
Available-for-sale financial assets	13	3,989,558	2,751,673


		5,672,877	8,501,350

Current assets
Trade and other receivables	14	96,576	181,328
Cash and cash equivalents	15	1,995,884	605,697


		2,092,460	787,025


Total assets		7,765,337	9,288,375

Equity and liabilities
Capital and reserves attributable to the Company's equity shareholders
Share capital	16	2,209,610	1,317,150
Share premium account		5,025,369	2,536,487
Foreign exchange translation reserve		(2,572,253)	(2,527,153)
Retained earnings		1,433,077	5,347,821
Share-based payment reserve		853,837	298,562


Total equity		6,949,640	6,972,867

Current liabilities
Trade and other payables	22	110,976	1,873,203

Non-current liabilities
Deferred tax	5	704,721	441,644
Provision for associate losses	11	-	661


Total liabilities		815,697	2,315,508


Total equity and liabilities		7,765,337	9,288,375

Consolidated Statement of Changes in Equity

for the year ended 30 June 2012

	Share capital	Share premium account	Foreign exchange translation reserve	Retained earnings	Share-based payment reserve	Total
	US$	US$	US$	US$	US$	US$

Balance at 1 July 2011	1,317,150	2,536,487	(2,527,153)	5,347,821	298,562	6,972,867
For the year ended 30 June 2012
Loss for the financial year	-	-	-	(1,566,640)	-	(1,566,640)
Other comprehensive income:
Fair value gain on available-for-sale financial assets	-	-	-	1,237,708	-	1,237,708
Tax on gain on available-for-sale investments	-	-	-	(263,077)	-	(263,077)
Foreign exchange losses on consolidation	-	-	(45,100)	-	-	(45,100)
Total comprehensive income	-	-	(45,100)	(592,009)	-	(637,109)
Share-based payments	-	-	-	-	555,275	555,275
Issue of share capital	892,460	2,672,148	-	-	-	3,564,608
Issue costs	-	(183,266)	-	-	-	(183,266)
Specie dividend	-	-	-	(3,322,735)	-	(3,322,735)
Balance at 30 June 2012	2,209,610	5,025,369	(2,572,253)	1,433,077	853,837	6,949,640

Balance at 1 July 2010	1,175,438	26,247,549	(2,816,563)	(3,268,197)	174,909	21,513,136
For the year ended 30 June 2011
Loss for the financial year	-	-	-	(17,610,085)	-	(17,610,085)
Other comprehensive income:
Fair value gain on available-for-sale financial assets	-	-	-	133,070	-	133,070
Tax on gain on available-for-sale investments	-	-	-	(154,516)	-	(154,516)
Foreign exchange losses on consolidation	-	-	289,410	-	-	289,410
Total comprehensive income	-	-	289,410	(17,631,531)	-	(17,342,121)
Share-based payments	-	-	-	-	123,653	123,653
Issue of share capital	141,712	2,692,514	-	-	-	2,834,226
Issue costs	-	(156,027)	-	-	-	(156,027)
Capital reduction	-	(26,247,549)	-	26,247,549	-	-
Balance at 30 June 2011	1,317,150	2,536,487	(2,527,153)	5,347,821	298,562	6,972,867

Consolidated Statement of Cash Flows

for the year ended 30 June 2012

	Notes	2012	2011
		US$	US$

Cash flow from operating activities	27	(3,046,904)	(1,715,655)


Cash flow from investing activities
Purchase of intangible assets		(741,124)	(777,206)
Purchase of property, plant and equipment		(510,844)	(370,418)
Investments in associates		-	(20,000)
Purchase of available-for-sale investments		(839,736)	-
Proceeds from disposal of business		3,100,000	-
Proceeds from disposal of available-for-sale investments		-	112,251
Interest received		6,952	2,134


Net cash generated from / (used in) investing activities		1,015,248	(1,053,239)

Cash flow from financing activities
Proceeds on issue of new shares		3,564,608	2,834,226
Expenses of new share issue		(183,266)	(156,027)


Net cash generated from financing activities		3,381,342	2,678,199


Net increase / (decrease) in cash and cash equivalents		1,349,686	(90,695)

Cash and cash equivalents at beginning of financial year		605,697	701,181

Effects of exchange rate changes		40,501	(4,789)


Cash and cash equivalents at end of financial year	15	1,995,884	605,697

Notes to the Financial Statements

1 Segmental Reporting

Operating segments

The Group has only one operating segment: the production of, exploration for and investment in hydrocarbons in one geographical area, the United States of America.

The Group has one main customer, representing 100% of the sales revenue.

2	Operating Loss	2012	2011
		US$	US$
	Operating loss is stated after charging:

	Fees payable to the Company's auditor for the audit of the annual statements	30,969	47,839
	Fees payable to the Company's auditor and its associates for other services:
	Other services relating to reporting accountant work in respect of the admission to AIM	-	127,570
	Other services relating to taxation	16,001	6,378
	Other services	5,559	11,561
	Research costs	17,765	27,816
	Equity settled share-based payments	555,275	123,653


	Exceptional administrative expenses:
	Impairment of intangible assets	764,126	6,091,907
	Impairment of land assets	208,157	3,240,072
	Impairment of plant and machinery assets	-	217,254


		972,283	9,549,233

3	Directors and Employees

	The aggregate payroll costs of the employees, including the Executive Directors, were as follows:

		2012	2011
		US$	US$
	Staff costs
	Wages and salaries	544,311	549,160
	Social security costs	65,596	49,976


		609,907	599,136

	Equity settled share-based payments	502,655	58,841


		1,112,562	657,977

Average monthly number of persons employed by the Group (all of whom are management) during the year were:
	2012	2011
	Number	Number

UK	4	4
US	2	1


	6	5


	US$	US$
Compensation of key management was as follows:

Short term benefits	526,841	549,160
Share-based payments	502,655	58,841


	1,029,496	608,001

Social security costs	64,621	49,976


	1,094,117	657,977

Key management consists of all the directors and M. Thomsen.

Details of each director's remuneration and their share options are included in the Report of the Directors.

Highest paid director:
	2012	2011
	US$	US$

Aggregate emoluments and benefits	315,659	229,827

4	Finance Income	2012	2011
		US$	US$

	Bank interest	6,952	2,134

Taxation

There was a small current tax charge of US$8,074 paid by a US subsidiary in the year, but no other current tax charge for the year due to the loss incurred (2011: US$7,932).

A deferred tax charge of US$263,077 arising on fair value movements on available-for-sale financial assets was recognised in equity during the year (2011: US$154,515).

Reconciliation of the effective tax charge	2012	2011
	US$	US$

Loss before taxation	(1,558,566)	(17,602,153)
Loss before tax multiplied by standard rate of corporation tax in the UK of 25.5% (2011: 27%)	(397,434)	(4,928,603)

Tax effects of:
Other expenses not deductible for tax purposes	98,125	155,190
Tax losses not utilised within the year	307,383	4,781,345


Tax expense and effective tax rate	8,074	7,932

The amount of unutilised tax losses are as follows:

2012

2011

US$

Unutilised tax losses

3,408,660

5,705,287

The unutilised tax losses have decreased during the current financial year due to the chargeable gain realised on the investments disposed by way of an in specie dividend to the Company's shareholders.

A deferred tax asset in respect of trading losses has not been recognised due to the uncertainty over timing of future profits. The trading losses are recoverable against suitable future trading profits.

Deferred tax liabilities arising as a result of the gains on available-for-sale financial assets are recognised in the balance sheet as follows:

Deferred tax liabilities	2012	2011
	US$	US$

At 1 January	441,644	287,129

Deferred tax charge recognised in equity during the period	263,077	154,515


At 31 December	704,721	441,644

6	Discontinued operations

On 7 October 2011 Bluebird completed the disposal of its interest in the Centurion project, receiving in consideration US$3,100,000.

Analysis of profit for the period from discontinued operations	2012	2011
	US$	US$

Sales	28,992	290,113

Impairment of project costs	-	(5,631,718)


Profit before tax	28,992	(5,341,605)


Loss on disposal of Centurion project	(447,228)	-


Loss for the period from discontinued operations	(418,236)	(5,341,605)

Cash flows from discontinued operations	2012	2011
	US$	US$

Net cash (outflows) / inflows from operating activities	(418,236)	290,113
Net cash inflows / (outflows) from investing activities	1,866,596	(852,268)



Net cash inflows/(outflows)	1,448,360	(562,155)

7	Loss Per Share

Basic loss per share is calculated by dividing the earnings attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year. Given the Group's reported loss for the year share options are not taken into account when determining the weighted average number of ordinary shares in issue during the year and therefore the basic and diluted earnings per share are the same.

Basic loss per share	2012 US Cents	2011 US Cents

Loss per share from continuing operations	(0.23)	(4.83)
Loss per share from discontinued operations	(0.09)	(2.11)

Total basic loss per share	(0.32)	(6.94)


The losses and weighted average number of ordinary shares used in the calculation of basic loss per share are as follows:
	2012 US$	2011 US$

Loss used in the calculation of total basic and diluted earnings per share	(1,566,640)	(17,610,085)

Loss for the year from discontinued operations used in the calculation of basic and diluted loss per share from discontinued operations	(418,236)	(5,341,605)

Loss used in the calculation of basic earnings per share from continuing operations	(1,148,404)	(12,268,480)

	2012 Number	2011 Number
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share	493,844,518	253,650,286

If the Company's share options were taken into consideration in respect of the Company's weighted average number of ordinary shares for the purposes of diluted earnings per share, it would be as follows:

Number of shares
Potential dilutive effect of share options and warrants	15,207,650	13,630,548

Weighted average number of ordinary shares for the purposes of diluted earnings per share	509,052,168	267,280,834

8	Property, Plant and Equipment
		Leasehold land US$	Plant and equipment US$	Total US$
	Cost
	At 1 July 2010	6,323,352	1,123,093	7,446,445
	Additions	229,636	651,363	880,999


	At 30 June 2011	6,552,988	1,774,456	8,327,444


	At 30 June 2012	6,552,988	1,774,456	8,327,444

	Accumulated depreciation and impairment

	At 1 July 2010	1,152,337	115,101	1,267,438
	Charge	646,328	57,148	703,476
	Impairment	3,624,877	1,602,107	5,226,984


	At 30 June 2011	5,423,542	1,774,356	7,197,898
	Charge	150,002	-	150,002
	Impairment	208,157	-	208,157


	At 30 June 2012	5,781,701	1,774,356	7,556,057

	Net book value

	At 30 June 2012	771,287	100	771,387


	At 30 June 2011	1,129,446	100	1,129,546


	At 30 June 2010	5,171,015	1,007,992	6,179,008


	During the year a decision was taken to discontinue all projects with the exception of the Solitaire project. As a result all other project assets remaining on the balance sheet have been fully impaired.

9	Intangible Assets
		Exploration costs	Royalty interests	Total
		US$	US$	US$
	Cost
	At 1 July 2010	13,283,706	100,000	13,383,706
	Additions	2,169,184	-	2,169,184


	At 30 June 2011	15,452,890	100,000	15,552,890
	Additions	155,927	-	155,927
	Disposals	(6,962,060)	-	(6,962,060)


	At 30 June 2012	8,646,757	100,000	8,746,757

	Amortisation and impairment
	At 1 July 2010	978,792	-	978,792
	Charge	-	-	-
	Impairment	9,953,967	-	9,953,967


	At 30 June 2011	10,932,759	-	10,932,759
	Impairment	764,126	-	764,126
	Disposals	(3,862,060)	-	(3,862,060)


	At 30 June 2012	7,834,825	-	7,834,825

	Net book value
	At 30 June 2012	811,932	100,000	911,932


	At 30 June 2011	4,520,131	100,000	4,620,131


	At 30 June 2010	12,304,914	100,000	12,404,914


	During the year a decision was taken to discontinue all projects with the exception of the Solitaire project. As a result all other project assets remaining on the balance sheet have been fully impaired.

Investment in Jointly Controlled Operations

The Group has entered into the following unincorporated Jointly Controlled Operations, which are proportionally consolidated within the Group's financial statements:

Name of project	Principal activities	Group interest

Revloc	Oil and gas development	50%

At the balance sheet dates there were no contingent liabilities or contingent assets in respect of any of the Jointly Controlled Operations.

At the balance sheet dates there were no capital commitments in respect of any of the Jointly Controlled Operations.

Investment in Associates

The Group previously held a 46.64% investment in start-up wind energy company, Altawind Inc which is incorporated in the USA. This has been included within the Group's financial statements using equity accounting.

On 14 February 2012, this investment was disposed with no further liabilities retained by the Group.

12	Disposal of business
	On 7 October 2011 Bluebird completed the disposal of its interest in the Centurion project, receiving in consideration US$3,100,000.
	Details of assets disposed	US$

	Non-current assets:
	Intangible assets	3,100,000


	Net assets disposed	3,100,000

	Project costs expensed in the period	(447,288)

	Consideration received	(3,100,000)


	Loss on disposal	(447,288)

13	Available-for-Sale Financial Assets	2012	2011
		US$	US$

	Available-for-sale financial assets	3,989,558	2,751,673


	The available-for-sale financial assets consist of listed investments and the fair value is based on bid quoted market prices at the balance sheet date. On 6 June 2012, the Company issued a dividend in specie of part of its holding in Wessex Exploration PLC, consisting of 27,688,689 shares. This represents 1 Wessex share, valued at 7.75p, for every 18 shares held in the Company. This is accounted for as a disposal of these available-for-sale financial assets. The following table shows the aggregate movement in the Group's financial assets during the year:

	2012	2011
	US$	US$

At beginning of the year	2,751,673	2,565,480
Additions	839,736	-
Disposals	(3,322,735)	(53,373)
Impairment	(45,618)	-
Foreign exchange differences	(39,985)	106,496
Revaluation through equity	3,806,487	133,070


At end of the year	3,989,558	2,751,673

14	Trade and Other Receivables	2012	2011
		US$	US$

	Trade receivables	-	73,614
	Other receivables	62,161	54,374
	Amounts due from associate undertaking	-	32,590
	Prepayments and accrued income	34,415	20,750


		96,576	181,328


	The directors consider the carrying value of trade and other receivables are approximate to their fair value. All of the Group's receivables have been reviewed for indications of impairment. None of the receivables were found to be impaired as at 30 June 2012 (2011: US$nil). No unimpaired receivables are past due as at the reporting date (2011: US$nil).

15	Cash and Cash Equivalents	2012	2011
		US$	US$

	Cash at bank (GBP)	258,566	418,509
	Cash at bank (USD)	1,737,318	187,188


		1,995,884	605,697

16	a) Share Capital			2012		2011
				£		£
	Authorised
	500,000,000 shares of 0.25 pence			1,250,000		1,250,000


				US$		US$
	Allotted, issued and fully paid
	498,196,408 shares (2011: 275,596,724 shares) of 0.25 pence			2,209,610		1,317,150


	Allotments during the year

	During the year ended 30 June 2012 the Company issued a total 222,599,684 ordinary shares (2011: 35,110,000) for a premium net of issue costs of US$2,488,882 (2011: US$2,536,487).

	Date	Price per share (Sterling)	Number of shares issued		Total consideration received (US$)

	6 July 2011	1p	200,000,000		3,200,080
	27 July 2011	1p	22,599,684		364,528

b) Share-Based Payments - Options and Warrants

The Company has a share option scheme for all directors and senior management. Options are exercisable at a price equal to the average market price of the Company's shares on the date of grant. The vesting period is one, two and three years - one third of the options vesting in each period. The options are settled in equity once exercised.

The Company has also issued share warrants in the prior year which were exercisable immediately.


	If the options remain unexercised after a period of 10 years from the date of grant, the options expire. Options are forfeited if the employee leaves the Company before the options vest. If the warrants remain unexercised after a period of 2 years from the date of grant, the warrants expire. The issue of warrants constituted a transaction with parties other than employees for which the fair value of services received cannot be reliably estimated, as they were granted on a 1 for 8 basis to shareholders as part of an open offer and placing that took place in February 2011, and therefore the services received have been measured by reference to the fair value of the warrants granted, measured at the date of the placing.

	Details of the number of share options and warrants and the weighted average exercise price (WAEP) outstanding during the year are as follows:

2012
	Number of options	WAEP £	Number of warrants	WAEP £

Outstanding at the beginning & end of the year	25,000,000	0.04	3,750,000	0.12


Number exercisable at 30 June 2012	8,700,000	0.03	3,750,000	0.12

2011
	Number of options	WAEP £	Number of warrants	WAEP £

Outstanding at the beginning of the year	8,700,000	0.03	-	-

Issued	16,300,000	0.05	3,750,000	0.12


Outstanding at the year end	25,000,000	0.04	3,750,000	0.12


Number exercisable at 30 June 2011	3,200,000	0.01	3,750,000	0.12

The fair values of share options issued in previous financial years were calculated using the binomial pricing model. The inputs into the model are as follows:
Date of grant	5 May 2007	20 February 2008

Number granted	3,200,000	7,000,000
Share price at date of grant	0.25p	4p
Exercise price	1p	4p
Expected volatility	51%	51%
Expected life	3 years	3 years
Risk free rate	5.00%	4.70%
Expected dividend yield	0%	0%
Fair value of options granted at date of grant	0.08p	2.20p
Exit rate	0%	0%
Earliest vesting date	5 May 2010	20 February 2011
Expiry date	5 May 2017	20 February 2018

Expected volatility was determined based on the historic volatility of four comparator companies as suggested by management. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The fair values of share options and warrants issued in the prior financial year were calculated using the Black Scholes model. The inputs into the model are as follows:
Date of grant	4 February 2011	19 May 2011	19 May 2011

Number granted	3,750,000	11,500,000	4,800,000
Share price at date of grant	5.0p	5.0p	5.0p
Exercise price	12p	5.0p	5.0p
Expected volatility	85%	85%	85%
Expected life	1 year	5.5, 6 and 6.5 years	5.5, 6 and 6.5 years
Risk free rate	2.80%	2.34%	2.34%
Expected dividend yield	0%	0%	0%
Fair value at date of grant	0.51p	3.61p	3.61p
Earliest vesting date	4 February 2011	19 May 2012	19 May 2012
Expiry date	4 February 2013	19 May 2021	19 May 2021

For May 2011 options, these vest 33.3% after 1 year, 33.3% after 2 years and 33.3% after 3 years. Expected volatility was determined based on the historic volatility of comparable companies. The expected life used in the model has been adjusted, based on the management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations. The Group recognised total expenses of US$555,275 (2011: US$123,653) related to equity-settled share-based payment transactions during the year.

17	Financial Instruments

	Classification of financial instruments

	The tables below set out the Group's accounting classification of each class of its financial assets and liabilities.

Financial assets
At 30 June 2012	Available-for-sale	Loans and other receivables	Total carrying value
	US$	US$	US$

Available-for-sale financial assets	3,989,558	-	3,989,558
Trade receivables	-	-	-
Other receivables	-	62,161	62,161
Cash and cash equivalents	-	1,995,884	1,995,884


	3,989,558	2,058,045	6,047,603

At 30 June 2011	Available-for-sale	Loans and other receivables	Total carrying value
	US$	US$	US$

Available-for-sale financial assets	2,751,673	-	2,751,673
Trade receivables	-	73,613	73,613
Other receivables	-	54,374	54,374
Cash and cash equivalents	-	605,697	605,697


	2,751,673	733,684	3,485,357

All of the above financial assets' carrying values approximate to their fair values, as at 30 June 2012 and 2011, given their nature and short times to maturity. Under IFRS 7 Financial Instruments: Disclosures, the available-for-sale assets are classified under the fair value hierarchy as level 1.

Financial liabilities
At 30 June 2012	Measured at amortised cost	Total carrying value
	US$	US$
Trade payables	80,546	80,546
Accruals	30,430	30,430


	110,976	110,976

Financial liabilities
At 30 June 2011	Measured at amortised cost	Total carrying value
	US$	US$
Trade payables	1,537,278	1,537,278
Accruals	335,925	335,925


	1,873,203	1,873,203


All of the above financial liabilities' carrying values approximate to their fair values, as at 30 June 2012 and 2011, given their nature and short times to maturity.

18	Financial Instrument Risk Exposure and Management

	The principal financial risks to which the Group is exposed are: foreign currency exchange rate risk; interest rate risk; liquidity risk, equity price risk and credit risk. This note describes the Group's objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented in notes 14, 15, 17 and 22.

	There have been no substantive changes to the Group's exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from the previous year.

	Liquidity risk

	Liquidity risk is dealt with in note 19 of these financial statements.

Credit risk

The Group's credit risk is primarily attributable to its cash balances and available-for-sale financial assets.

The credit risk on liquid funds is limited because the third parties are large international banks.

The Group's total credit risk amounts to the total of the sum of the receivables, available-for-sale financial assets and cash and cash equivalents. At the year end this amounts to US$6,047,603 (2011: US$3,485,357).

	Interest rate risk and sensitivity analysis

	The Group's only exposure to interest rate risk is the interest received on the cash held on deposit. The Group does not have any interest bearing borrowings.

	The following table indicates the impact of a change in interest rate on the interest received during the year, and with all other variables being held constant, on the Group's loss before tax.

	Change in interest rate	2012 US$	Change in interest rate	2011 US$

Sterling	+0.5%	1,693	+0.5%	2,229
	+1.0%	3,385	+1.0%	4,458
	+1.5%	5,078	+1.5%	6,687

	-0.5%	(1,693)	-0.5%	(2,229)
	-1.0%	(3,385)	-1.0%	(4,458)
	-1.5%	(5,078)	-1.5%	(6,687)

Dollars	+0.5%	4,811	+0.5%	1,038
	+1.0%	9,623	+1.0%	2,076
	+1.5%	14,434	+1.5%	3,114

	-0.5%	(4,811)	-0.5%	(1,038)
	-1.0%	(9,623)	-1.0%	(2,076)
	-1.5%	(14,434)	-1.5%	(3,114)

Market risk and sensitivity analysis

Market risk arises when the fair value or cash flows of a financial instrument fluctuates from the level where a long or short position was established. These financial instruments are subject to equity price risk.

Equity price risk

The Group's available-for-sale financial assets are subject to equity price risk.

For financial instruments held, the Group uses a sensitivity analysis technique that measures the changes in fair value of the Group's financial instruments to hypothetical changes in market price.

A 5% increase in the market value of positions held at 30 June 2012 would increase the value of the financial assets by US$199,478 (2011: US$137,584) and equity by US$183,388 (2011: US$115,501).

A 5% decrease in the value of positions held on at 30 June 2012 would decrease the value of the financial assets US$199,478 (2011: US$137,584) and equity by US$183,388 (2011: US$115,501).

Foreign exchange risk

The Group's principal exposure to foreign exchange risk is in relation to the United States Dollar and Sterling exchange rates, due to the concentration of cash and cash equivalents that are held in Sterling.

The following table indicates the impact of a change in foreign exchange rate on the value of cash and cash equivalents at the balance sheet date, and with all other variables being held constant, on the Group's loss before tax and on equity.

	Change in US$/GBP exchange rate	2012 US$	Change in US$/GBP exchange rate	2011 US$

Sterling	+5.0%	215,910	+5.0%	163,338
	-5.0%	(215,910)	-5.0%	(163,338)

19	Liquidity Risk

	In managing liquidity risk, the main objective of the Group is to ensure that it has the ability to pay all of its liabilities as they fall due. The Group monitors its levels of working capital to ensure that it can meet its debt repayments as they fall due. The table below shows the undiscounted cash flows on the Group's financial liabilities as at 30 June 2012 on the basis of their earliest possible contractual maturity.

	Total	Within 2 months	Within 2 -6 months	6 - 12 months	Greater than 12 months
	US$	US$	US$	US$	US$
At 30 June 2012
Trade payables	80,546	80,546	-	-	-
Accruals	30,430	-	30,430	-	-


	110,976	80,546	30,430	-	-


At 30 June 2011
Trade payables	1,537,278	1,537,278	-	-	-
Accruals	335,925	-	335,925	-	-


	1,873,203	1,537,278	335,925	-	-

Capital Management

The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern, to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. The Group defines capital as being share capital plus reserves as disclosed in the consolidated balance sheet.

The Board of Directors monitors the level of capital as compared to the Group's commitments and adjusts the level of capital as is determined to be necessary, by issuing new shares.

The Group is not subject to any externally imposed capital requirements.

21	Financial Commitments

	The Group had no capital commitments at 30 June 2012 (2011: US$nil).

22	Trade and Other Payables	2012	2011
		US$	US$

	Trade payables	80,546	1,537,278
	Accruals	30,430	335,925


		110,976	1,873,203

23	Related Party Transactions

	The only related party transactions during the year were with the directors, key management and Mrs J Bramhill, the wife of Mr D Bramhill.

	Short-term benefits
	2012	2011
	US$	US$
Directors' remuneration:
Mr A Yeo	168,346	180,158
Mr J Ede-Golightly	13,234	-
Mr D Bramhill	239,384	200,175
Mrs J Bramhill	19,135		17,470
Mr M Thomsen	269,475	115,450
Mr F Dekker	52,938	10,676
Mr B Marshall	52,938	10,676
Mr J. Michaels	-	32,025


	815,450	566,630
Social security costs	64,621	49,976


	880,071	616,606

In addition to the remuneration shown above, the Group incurred share-based payment charges of US$502,655 (2011: US$58,841) in respect of the above named directors and key management. Mr B Marshall is additionally a director of 2 companies which received payments from the Group during the year - Brian Marshall Accounting Services Ltd which received US$39,704 for accounting services (2011: US$15,946), and Berkeley Hall Marshall Ltd which received US$4,236 for office facilities (2011: US$3,189).

24	Investment in Subsidiaries

The Group's Parent Company holds the issued share capital of the following subsidiary undertakings, which are incorporated in the USA and have been included in these consolidated financial statements.
Company	Principal activities	Class	Percentage holding
Osceola Royalties LLC	Oil and gas development	Ordinary	100%
Osceola Production LLC	Oil and gas development	Ordinary	(indirectly) 100%

25	Contingent Liabilities

The directors are not aware of any contingent liabilities within the Group or the Company at

30 June 2012.

26	Ultimate Controlling Party

	As at 30 June 2012, Bluebird Energy plc had no ultimate controlling party.

27	Cash Flow from Operating Activities	2012 US$	2011 US$

	Loss for the financial year	(1,566,640)	(17,610,085)
	Finance income	(6,952)	(2,134)
	Loss from associates	35,527	48,493
	Share-based payment	555,275	123,653
	(Gain)/Loss on disposal of investments	(2,568,779)	132,145
	Loss on disposal of business	439,964	-
	Expenses paid for discontinued operations	(418,236)	-
	Revenue received from discontinued operations	(21,728)	-
	Impairment of intangible assets	764,126	9,953,967
	Impairment of land assets	208,157	3,624,877
	Impairment of plant and machinery assets	-	1,602,107
	Net foreign exchange gain	-	(3,321)


		(2,579,286)	(2,130,298)

	Changes in working capital
	Decrease / (increase) in trade and other receivables	48,562	(129,614)
	(Decrease) / increase in trade and other payables	(516,180)	544,257


	Net cash outflow from operating activities	(3,046,904)	(1,715,655)

28	Events After the Balance Sheet Date

	There were no significant events after the balance sheet date.

29 Basis of Preparation

This announcement has been prepared in accordance with International Financial Reporting Standards ("IFRS") but in itself does not contain sufficient information to comply with IFRS. Details of the accounting policies are set out in the annual report for the year ended 30 June 2012. These accounting policies have been amended from the prior year due to the transition to IFRS. Other than presentation there were no significant adjustments in respect of the transition to IFRS.

30 Publication of Non-Statutory Accounts

The financial information set out in this announcement does not comprise the Group's statutory accounts for the years ended 30 June 2012 or 30 June 2011.

The financial information has been extracted from the statutory accounts of the Company for the years ended 30 June 2012 and 30 June 2011. The auditors' opinion on those accounts was unmodified and did not contain a statement under section 498 (2) or section 498 (3) Companies Act 2006 and did not include references to any matters to which the auditor drew attention by the way of emphasis.

The statutory accounts for the year ended 30 June 2011 have been delivered to the Registrar of Companies, whereas those for the year ended 30 June 2012 will be delivered to the Registrar of Companies following the Company's Annual General Meeting.

31 Annual Report and Annual General Meeting

The Annual Report will be made available from the Company's website www.bluebirdenergy.net and will be posted to shareholders shortly. The Annual Report contains notice of the Annual General Meeting of the Company which will be held at 11 a.m. on 11 December 2012 at the offices of W H Ireland, 24 Martins Lane, London, EC4R 0DR.

This information is provided by RNS

The company news service from the London Stock Exchange

END

FR UGGMCUUPPGAA

Related Shares:

FTSE 100 Latest

Value8,275.66

Change0.00