Forte Energy NL
LSE : FTE

March 17, 2010 03:00 ET

Half Year Accounts




                                                                                                               
                                                FORTE ENERGY NL
                                                       
                                                       
                                                       
                                                       
                                              ABN 59 009 087 852
                                                       
                                                       
                                                       
                                                       
                                                       
                                                       
                                          HALF-YEAR FINANCIAL REPORT
                                                       
                                                       
                                               31 DECEMBER 2009
                                                       
                                                       
                                                       
                                                       
                                                Forte Energy NL
                                               36 Outram Street
                                              West Perth WA 6005
                                                   AUSTRALIA
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                                       
                                                       
                                                   CONTENTS







        Directors' Report                                                                                2

        Consolidated Statement of Financial Position                                                     4

        Consolidated Statement of Comprehensive Income                                                   5

        Consolidated Statement of Changes in Equity                                                      6

        Consolidated Statement of Cash Flow                                                              7

        Notes to the Half-Year Financial Report                                                          8

        Directors' Declaration                                                                          16

        Auditor's Independence Declaration                                                              17

        Independent Review Report                                                                       18





                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                               DIRECTORS' REPORT
                                                       

The  Board  of Directors of Forte Energy NL present their report on the consolidated entity of Forte Energy  NL
("the  Company" or "Forte Energy") and its subsidiaries ("Consolidated Entity") during the half-year  ended  31
December 2009.

Directors

The  names of the Company's Directors in office during the half-year and until the date of this report  are  as
below.  Directors were in office for this entire period unless otherwise stated.

Glenn Robert Featherby - Chairman
Lady Barbara Judge- Deputy Chairman
Mark David Reilly - Managing Director
Christopher David Grannell - Non-executive Director
Bosse Gustafsson - Technical Director

Review and Results of Operations

The Consolidated Entity reported a loss for the half-year of $1,706,475 (2008: $984,516).

The  principal activity of the Consolidated Entity during the reporting period was the exploration for  mineral
resources.

The  Company  continues  to investigate resource opportunities. Currently these are focused  on  the  Company's
uranium  exploration licences in West Africa in the Republic of Guinea and the Islamic Republic of  Mauritania.
In  June  2008 the Company entered into an extensive Cooperation Agreement with Areva NC ("Areva") to  expedite
exploration and development of its Mauritanian assets.


Uranium Exploration - Mauritania

    *   Diamond core resource drilling program of over 5,800m carried out at Bir En Nar Uranium Project, with
        estimation of a maiden JORC code compliant resource expected to be completed in the first quarter of 2010,
        subject to receipt of final assay results.

    *   Extensive geophysical ground surveys undertaken to explore a number of uranium anomalies near  Bir
        Moghrein. Results from these surveys have been used to help guide a reverse circulation core drilling program
        of up to 6,000m covering 11 of these anomalies that is currently underway.

Uranium Exploration - Guinea

    *   On 1 July 2009, the Company announced a JORC code compliant initial inferred resource of 17.7Mt  @
        296ppm U3O8 for 11.6Mlbs of contained U3O8 (100ppm cut-off) at its Firawa Prospect.

    *   Encouraging initial metallurgical test results have been received from Firawa Project that indicate
        the potential for economic recovery from leaching, with further pre-feasibility optimisation studies currently
        underway.

                                                       

Copper/Cobalt Assets - Australia

    *   On  18 August 2009 the Company announced that it had entered into an option agreement with Element
        Minerals Australia Pty Ltd, a wholly owned subsidiary of Orocobre Ltd (ASX: ORE) for the sale of its Millenium
        leases.

    *   On 11 December 2009 the Company announced that it had entered into an agreement to sell its interest
        in the Maroochydore JV Project to the joint venture exploration manager and joint venture partner, Birla
        Maroochydore Pty Ltd a wholly owned subsidiary of Aditya Birla Minerals Ltd (ASX: ABY). Forte Energy received
        $2,000,000 when the sale was completed on 22 February 2010.

Corporate

    *   In July 2009 Forte Energy completed the second tranche of a $12 million capital raising to help fund
        its accelerated exploration activities in West Africa.

    *   The Company has established a subsidiary in the United Kingdom called Forte Energy UK Limited and has
        opened an office in London.

Events subsequent to balance date

On  22 February 2010, the Consolidated Entity received $2,000,000 at settlement of the sale of its 50% interest
in  the Maroochydore Joint Venture Copper Project. Apart from other events to the extent to which are described
elsewhere  in  this Director's Report, there has not arisen in the interval between the end  of  the  financial
period and the date of this report any other item, transaction or event of a material or unusual nature likely,
in the opinion of the Directors of the Company, to effect:

    i.      the Consolidated Entity's operations in future financial years; or
    ii.     the results of those operations in future financial years; or
    iii.    the Consolidated Entity's state of affairs in future financial years.

Dividends

No dividend has been paid during the period (2008:  $ nil).

AUDITOR'S INDEPENDENCE DECLARATION

A  copy of the Auditor's Independence Declaration as required under section 307C of the Corporations Act is set
out on page 16 and forms part of this report.

Signed in accordance with a resolution of the directors.






Mark Reilly
Managing Director

London 15 March 2010
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                 CONSOLIDATED STATEMENT OF FINANCIAL POSITION
                                            AS AT 31 DECEMBER 2009
                                                       


                                                    Notes      31 December 2009            30 June 2009
                                                                       $                        $
 ASSETS                                                                                                  
 Current Assets                                                                                          
 Cash and cash equivalents                            6                 5,944,546               6,628,394
 Trade and other receivables                                              135,747                   9,226
 Prepayments                                                              135,002                  55,712
                                                                        6,215,295               6,693,332
 Non-current assets classified as held for sale       7                 2,035,778               1,657,041
 Total Current Assets                                                   8,251,073               8,350,373
                                                                                                         
 Non-current assets                                                                                      
 Available-for-sale financial assets                                       15,885                  24,297
 Exploration and evaluation expenditure               9                13,087,447               9,564,296
 Plant and equipment                                                      148,112                 107,228
 Total Non-Current Assets                                              13,251,444               9,695,821
                                                                                                         
 TOTAL ASSETS                                                          21,502,517              18,046,194
                                                                                                         
 LIABILITIES                                                                                             
 Current Liabilities                                                                                     
 Trade and other payables                                                 775,880               1,258,548
 Provisions                                                                25,793                  13,446
                                                                          801,673               1,271,994
 Liabilities associated with assets held for sale     7                   452,348                 527,000
 Total Current Liabilities                                              1,254,021               1,798,994
                                                                                                         
 TOTAL LIABILITIES                                                      1,254,021               1,798,994
                                                                                                         
 NET ASSETS                                                            20,248,496              16,247,200
                                                                                                         
 EQUITY                                                                                                  
 Contributed equity                                   11               66,948,023              61,741,570
 Reserves                                                               2,134,058               1,812,740
 Accumulated losses                                                  (49,013,585)            (47,307,110)
                                                                                                         
 TOTAL EQUITY                                                          20,248,496              16,247,200
                                                       
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                                       
                                CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
                                   FOR THE HALF-YEAR ENDED 31 DECEMBER 2009
                                                       
                                                       
                                                            Notes          2009                  2008
                                                                            $                     $
                                                                                                          
                                                                                                          
 Revenue                                                       4             163,384               199,079
 Administrative expenses                                       5         (1,869,859)           (1,222,070)
 Settlement of Renison Bell Ltd creditors                                          -                38,475
                                                                                                          
 Loss before income tax                                                  (1,706,475)             (984,516)
 Income tax expense                                                                -                     -
                                                                                                          
 Loss after income tax                                                   (1,706,475)             (984,516)
                                                                                                          
                                                                                                          
 Net loss for the period                                                 (1,706,475)             (984,516)
                                                                                                          
 Other comprehensive income
 Net gain/(loss) on available-for-sale financial assets                      (8,412)               (5,828)
 Foreign currency translation                                                (5,024)                     -
 Other comprehensive income for the period net of tax                       (13,436)               (5,828)
                                                                         (1,719,911)             (990,344)
 TOTAL COMPREHENSIVE INCOME FOR THE PERIOD ATTRIBUTABLE
 TO MEMBERS OF FORTE ENERGY NL
                                                                                                          
                                                                                                          
 Loss per share for loss attributable to the ordinary
 equity holders of the Company (cents per share)
 - basic loss per share                                                       (0.31)                (0.25)
 - diluted loss per share                                                     (0.31)                (0.25)
                                                                                                          
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                  CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
                                   FOR THE HALF -YEAR ENDED 31 DECEMBER 2009
                                                       
                
                            Contributed    Accumulated    AFS financial     Equity        Foreign        Total
                               equity        losses          assets        benefits      currency       equity
                                                             reserve        reserve     translation        
                                 $              $               $              $             $             $
                                                                                                           
 At 1 July 2009               61,741,570   (47,307,110)              817    1,811,923             -     16,247,200
                                                                                                                  
 Changes in equity for
 the half year to 31
 December 2009
 Total comprehensive                   -    (1,706,475)          (8,412)            -       (5,024)    (1,719,911)
 income for the half year
 net of tax
                                                                                                                  
 Equity transactions:
 Share-based payment                   -              -                -      514,754             -        514,754
 Exercise of options             441,500              -                -            -             -        441,500
 Issue of ordinary shares      5,331,000              -                -            -             -      5,331,000
 Transaction costs             (566,047)              -                -            -             -      (566,047)
 Balance At                   66,948,023   (49,013,585)          (7,595)    2,326,677       (5,024)     20,248,496
 31 December 2009
                                                                                                           
 At 1 July 2008               50,871,819   (45,127,288)            4,280    1,605,672             -      7,354,483
                                                                                                                  
 Changes in equity for
 the half year to 31
 December 2008
 Total comprehensive                   -      (984,516)          (5,828)            -             -      (990,344)
 income for the half year
 net of tax
                                                                                                                  
 Equity transactions:
 Share-based payment                   -              -                -      167,980             -        167,980
 Issue of ordinary shares      4,922,022              -                -            -             -      4,922,022
 Transaction costs              (15,343)              -                -            -             -       (15,343)
 Balance At                   55,778,498   (46,111,804)          (1,548)    1,773,652             -     11,438,798
 31 December 2008
                                                       
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                      CONSOLIDATED STATEMENT OF CASH FLOW
                                   FOR THE HALF -YEAR ENDED 31 DECEMBER 2009

                                                                           2009                  2008
                                                                            $                     $
                                                                                                           
Cash flows from operating activities

Payments to suppliers and employees                                        (1,423,446)           (1,101,925)
Interest and other income received                                            137,701               100,018
                                                                                                           
Net cash flows used in operating activities                                (1,285,745)           (1,001,907)
                                                                                                           
Cash flows from investing activities                                                                       

Proceeds from sale of equipment                                                     -                 1,091
Payment for purchase of equipment                                             (63,785)               (6,370)
Payment for exploration and evaluation expenditure                         (3,658,960)           (1,087,449)
                                                                                                            
Net cash flows used in investing activities                                (3,722,745)           (1,092,728)
                                                                                                           
Cash flows from financing activities                                                                       

Proceeds from issue of shares                                               5,632,500             2,698,732
Refund of share oversubscriptions                                           (188,900)                     -
Transaction costs relating to issue of shares                             (1,044,808)               (8,135)
                                                                                                           
Net cash flows from financing activities                                    4,398,792             2,690,597
                                                                                                           
Net increase in cash and cash equivalents                                   (609,698)               595,962
Effects of exchange rate changes on cash and cash equivalents                (74,150)              (36,157)
Cash and cash equivalents at beginning of the period                        6,628,394             3,653,480
                                                                                                           
Cash and cash equivalents at end of period                                  5,944,546             4,213,285
                                                       
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                         NOTES TO THE FINANCIAL REPORT
                                   FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

1.    CORPORATE INFORMATION

      The  consolidated financial report of Forte Energy NL ("Consolidated Entity") for the half-year ended  31
      December  2009  was  authorised for issue in accordance with a resolution of the directors  on  13  March
      2010.

      Forte  Energy  NL  is  a company limited by shares incorporated in Australia, whose shares  are  publicly
      traded  on  the  Australian Stock Exchange (ASX code "FTE"), and on the AIM Board  of  the  London  Stock
      Exchange.

      The  nature  of  operations and principal activities of the Consolidated Entity during the half-year  was
      the  exploration  for minerals. There have been no significant changes in the nature of these  activities
      during the half-year.

2.    BASIS OF PREPARATION AND ACCOUNTING POLICIES

(a)   Basis of Preparation

      This general purpose condensed consolidated financial report for the half-year ended 31 December  2009
      has  been  prepared  in accordance with AASB 134 "Interim Financial Reporting" and the  Corporations  Act
      2001.

      The  half-year  financial  report does not include all notes of the type  normally  included  within  the
      annual  financial  report  and therefore cannot be expected to provide as full an  understanding  of  the
      financial  performance,  financial position and financing and investing activities  of  the  Consolidated
      Entity as the full financial report.
      
      It  is  recommended  that the half-year financial report should be read in conjunction  with  the  annual
      financial  report  of Forte Energy NL for the year ended 30 June 2009 and considered  together  with  any
      public  announcements made by Forte Energy NL during the half-year ended 31 December 2009  in  accordance
      with the continuous disclosure obligations of the ASX Listing Rules.
      
      The half-year financial report has been prepared on a historical cost basis, except for available-for-
      sale investments, which have been measured at fair value.

      The financial report is presented in Australian dollars ($).

      For  the  purpose  of preparing the half-year financial report, the half-year has been  treated  as  a
      discrete reporting period.



                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                         NOTES TO THE FINANCIAL REPORT
                                   FOR THE HALF-YEAR ENDED 31 DECEMBER 2009

 (b)  Significant accounting policies

      The half-year consolidated financial statements have been prepared using the same accounting policies as
      used  in  the  annual financial statements for the year ended 30 June 2009, except for  the  adoption  of
      amending accounting standards and interpretations effective for annual reporting periods beginning on  or
      after 1 July 2009.

      From  1  July 2009, the Group has adopted all the Standards and Interpretations, mandatory for  annual
      periods beginning on or after 1 July 2009, including:

      *       AASB 8 and AASB 2007-3 Operating Segments and consequential amendments to other Australian accounting
              standards
      *       AASB  101  (Revised),  AASB  2007-8 and AASB 2007-10 Presentation of  Financial  Statements  and
              consequential amendments to other Australian Accounting Standards
      *       AASB 2008-1 Amendments to Australian Accounting Standard - Share-based Payments: Vesting Conditions
              and Cancellations
      *       AASB 2008-5 Amendments to Australian Accounting Standards arising from the Annual Improvements Project
      *       AASB 2008-6 Further Amendments to Australian Accounting Standards arising from the Annual Improvements
              Project
      *       AASB 2009-2 Amendments to Australian Accounting Standards - Improving Disclosures about Financial
              Instruments
      *       AASB 2009-4 Amendments to Australian Accounting Standards arising from the Annual Improvements Project
      *       AASB 2009-7 Amendments to Australian Accounting Standards.
      
      Adoption  of these standards and interpretations did not have any effect on the financial position  or
      performance of the Group.

      The Group has not elected to early adopt any new standards or amendments.

(c)   Basis of consolidation

      The  consolidated  financial statements comprise the financial statements of  Forte  Energy  NL  and  its
      subsidiaries ('the Group').

      The  financial  statements of the subsidiaries are prepared for the same reporting period as  the  parent
      company, using consistent accounting policies.

      In  preparing  the consolidated financial statements, all intercompany balances and transactions,  income
      and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.

      Subsidiaries are fully consolidated from the date on which control is transferred to the Group and  cease
      to be consolidated from the date on which control is transferred out of the Group.

3.      SEGMENT INFORMATION

        Identification of reportable segments:
        
        For  management  purposes,  the Consolidated Entity is organised into two business  segments  based  on
        geographical exploration regions.
        
        Management  monitors the operating results of business segments separately for the  purpose  of  making
        decisions  about  resources  to  be  allocated and of assessing  performance.  Segment  performance  is
        evaluated  based  on exploration costs and results obtained. Finance costs, finance income  and  income
        taxes are managed on a group basis.
        
        The reportable segments of the Consolidated Entity are as follows:
        
               o       Uranium exploration in Mauritania.
               o       Uranium exploration in Guinea.

        Accounting policies and inter-segment transactions:

        The  accounting  policies used by the Group in reporting segments are the same as  those  contained  in
        note 2 to the accounts and in the prior year.
        
        It  is  the  Consolidated Entity's policy that if items of revenue and expenses are  not  allocated  to
        operating segments then any associated assets and liabilities are also not allocated to segments.  This
        is to avoid asymmetrical allocations within segments which management believe would be inconsistent.
        
        The  following items and associated assets and liabilities are not allocated to operating  segments  as
        they are not considered part of the core operations of any segment:
               o       Interest income and cash balances
               o       Net gains and losses on disposal of available-for-sale investments
               o       Non-current assets classified as held for sale, and
               o       Corporate and administrative income and expenses other than the depreciation of fixed assets.

        
        Operating segments - 31 December 2009

                                                           Mauritania       Guinea uranium         Total
                                                             uranium         exploration              
                                                           exploration            $                   
                                                                $                                    $
         Half year ended 31 December 2009                                                             
                                                                                                      
         Revenues                                                                                     
         Other Revenue from external customers                         -                  -                   -
         Total Segment revenue                                         -                  -                   -
         Unallocated items                                                                                     
         Interest Income                                                                                124,718
         Other unallocated revenue                                                                       38,666
         Total revenue per statement of comprehensive                                                   163,384
         income
                                                                                                               
                                                       
                                               

         Results                                                                                               
         Segment results                                         (6,381)           (11,844)            (18,225)
         Unallocated items                                                                                     
         Unallocated revenue                                                                            163,384
         Administrative expenses                                                                    (1,851,634)
         Net loss before tax                                                                        (1,706,475)
                                                                                                               
                                                                                                               
         Segment assets                                        8,125,301          4,964,087          13,089,388
         Cash and cash equivalents                                                                    5,944,546
         Non-current  assets classified  as  held  for                                                2,035,778
         sale
         Other Corporate assets                                                                         432,805
         Total   assets  per  statement  of  financial                                               21,502,517
         position

        Operating segments - 31 December 2008

                                                           Mauritania       Guinea uranium         Total
                                                             uranium         exploration              
                                                           exploration            $                   
                                                                $                                    $
         Half year ended 31 December 2008                                                             
                                                                                                      
         Revenues                                                                                     
         Other Revenue from external customers                         -                  -                   -
         Total Segment revenue                                         -                  -                   -
         Unallocated items                                                                                     
         Interest Income                                                                                184,049
         Other unallocated revenue                                                                       15,030
         Total revenue per statement of comprehensive                                                   199,079
         income
                                                                                                               
         Results                                                                                               
         Segment results                                         (4,968)           (10,265)            (15,233)
         Unallocated items                                                                                     
         Unallocated revenue                                                                            199,079
         Other income                                                                                    38,475
         Administrative expenses                                                                    (1,206,837)
         Net loss before tax                                                                          (984,516)
                                                                                                               
                                                                                                               
         Segment assets as at 30 June 2009                     4,749,285          4,817,458           9,566,743
         Cash and cash equivalents                                                                    6,628,394
         Non-current  assets classified  as  held  for                                                1,657,041
         sale
         Other Corporate assets                                                                         194,016
         Total   assets  per  statement  of  financial                                               18,046,194
         position as at 30 June 2009



4       REVENUE
        
                                                                               2009                 2008
                                                                                $                    $
                                                                                                            
         Interest income                                                        124,718              184,049
         Office sub-lease rent                                                   18,666               15,030
         Other income                                                            20,000                    -
         Total other revenue                                                    163,384              199,079
                                                                                                             
                                                                                                             

5       ADMINISTRATION EXPENSES

                                                                               2009                 2008
                                                                                $                    $
                                                                                                            
Accounting and audit fees                                                        22,690               18,035
Consulting fees                                                                 144,608              109,097
Depreciation of plant and equipment                                              22,901               21,045
Employee benefits expense (i)                                                 1,087,210              490,784
Foreign exchange differences                                                     74,150               36,157
Legal fees                                                                       45,613                3,445
Media and public relations                                                       72,052               77,977
Nominated adviser and broker fees                                                57,228               59,716
Promotions, roadshows and conferences                                            50,855               89,242
Reporting and listing costs                                                      84,227               71,323
Telecommunication and computing                                                  49,794               57,284
Travel and accommodation                                                         60,534               77,644
Minimum lease payments - operating lease                                         56,476               51,030
Other                                                                            41,521               59,291
Total administrative expenses                                                 1,869,859            1,222,070
                                                                                               

(i)     Employee benefits expense is comprised of:

Salaries and wages                                                              498,445              322,804
Share based payments                                                            514,754              167,980
Other staff costs                                                                74,011                    -
Total                                                                         1,087,210              490,784
        

                                                      

6.      CASH AND CASH EQUIVALENTS


                                                                  31 December 2009           30 June 2009
                                                                             $                    $
                                                                                                         
        Cash at bank and in hand                                          5,944,546             6,628,394

        Cash at bank earns interest at floating rates based on daily bank deposit rates. The carrying amounts
        of cash and cash equivalents represent fair value.


7.      NON-CURRENT ASSETS CLASSIFIED AS HELD FOR SALE

        In line with the Company's focus on progressing its uranium exploration projects, the Company has entered
        into sale agreements to realise value for its non-uranium assets and has therefore recognised these
        exploration assets as assets held for sale.

        The assets and liabilities associated with the non-uranium assets are as follows:

         Capitalised exploration and evaluation expenditure              2,035,778    1,657,041                       
         Liabilities                                                     (452,348)    (527,000)                        
                                                                         1,583,430    1,130,041                        

8.      DIVIDENDS

        There were no dividends proposed or paid during the half-year ended 31 December 2009 (2008: nil).


9.      EXPLORATION AND EVALUATION EXPENDITURE

        Movements in carrying amounts

                                                                        31 December 2009           30 June
                                                                                   $                 2009
                                                                                                      $
                                                                                                               
         Carrying amount at 1 July                                             9,564,296              4,361,305
         Additions                                                             3,523,151              6,978,846
         Transfer to Assets Held for Sale                                              -            (1,657,041)
         Impairment                                                                    -              (118,814)
         Carrying amount at end of period net of impairment                   13,087,447              9,564,296


        
        Exploration  and  evaluation  costs have been capitalised at cost. No impairment  loss  was  recognised
        during the half-year ended 31 December 2009 (2008: nil ) because either:
           *       The exploration and evaluation activities are expected to be recouped through successful development
                   and exploitation of the area of interest or, alternatively, by its sale; or
           *       Exploration and evaluation activities in each area of interest have not at the reporting 
                   date reached a stage that permits a reasonable assessment of the existence or otherwise of  
                   economically recoverable reserves, and active and significant operations in, or relevant to, the 
                   area of interest are continuing.


10.     COMMITMENTS AND CONTINGENCIES

        There  have been no material changes to the commitments and contingencies disclosed in the most  recent
        annual financial report.


11.   CONTRIBUTED EQUITY

                                                                    31 December 2009           30 June 2009
                                                                              $                     $
         Ordinary shares                                                                                     
         571,158,031 (30 June 2009: 511,348,031)                                                             
         ordinary shares, fully paid                                         66,925,523            61,719,070
                                                                                                             
         2,250,000 (30 June 2008: 2,250,000) 25 cent                                                         
         value ordinary shares, partly paid to 1 cent                            22,500                22,500
                                                                             66,948,023            61,741,570

         (i)          Ordinary shares                                                                        
         
               Movement in ordinary shares on issue                         Number                  $
                                                                                                             
                 At 1 July 2008                                             380,182,617            50,849,319
                 Share issues                                                86,699,611             9,367,732
                 Share issues for other assets                               44,465,803             2,223,290
                 Transaction costs                                                    -             (721,271)
                                                                                                             
                 Balance at 30 June 2009                                    511,348,031            61,719,070
                                                                                                     
                                                                            511,348,031            61,719,070
                 At 1 July 2009
                 Share issues for cash                                       53,310,000             5,331,000
                 Share issues from exercise of options                        6,500,000               441,500
                 Transaction costs                                                    -             (566,047)
                                                                                                             
                 Balance at 31 December 2009                                571,158,031            66,925,523


                                                       

11.   CONTRIBUTED EQUITY (Continued)

        
        (ii)    Options
        
                 Options over ordinary shares:
                 
                 During the financial period:
                     *   6,000,000 (2008: 3,000,000) options were issued to Directors, as share based payments,
                         over ordinary shares exercisable at $0.20. The options were fully vested when issued on 
                         23 December 2009 and are exercisable on or before 23 December 2012. The options can only be
                         exercised if the VWAP for the Company's Shares on ASX is at or above 35 cents for more than 
                         30 days. The options have been valued using the Share Binomial Tree Model 
                         methodology with the following inputs;
                              o       Underlying share price                   $0.175
                              o       Exercise price                           $0.20
                              o       Risk-free Rate                                   4.59%
                              o       Time to maturity                         3 Years
                              o       Volatility                               82.45%
                              o       Dividends                                        Nil during review period.
                     *   2,500,000 ordinary shares were issued following the exercise of consultants options at 
                         5.5 cents each.
                     *   4,000,000 ordinary shares were issued following the exercise of consultants options at 
                         7.5 cents each.


12.     EVENTS AFTER THE BALANCE SHEET DATE
   
        On  22 February 2010, the Consolidated Entity received $2,000,000 on the settlement of the sale of  its
        50%  interest  in  the Maroochydore Joint Venture Copper Project. There have been no other  significant
        events that have occurred after Balance Sheet date.


        
                                                FORTE ENERGY NL
                                             (ABN 59 009 087 852)
                                                       
                                            DIRECTORS' DECLARATION
                                                       

In accordance with a resolution of the Directors of Forte Energy NL, I state that:

In the opinion of the Directors:

(a)     the financial statements and notes of the Consolidated Entity are in accordance with the Corporations
        Act 2001, including:

        (i)     giving a true and fair view of the financial position as at 31 December 2009 and the
                 performance for the half-year ended on that date of the Consolidated Entity; and
        
        (ii)    complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations
                 Regulations 2001; and

(b)     there are reasonable grounds to believe that the Consolidated Entity will be able to pay its debts as
        and when they become due and payable.

On behalf of the Board






Mark D Reilly
Managing Director



London 15 March 2010




ERNST & YOUNG                            The Ernst & Young Building             Tel       61 8 9429 2222
                                                        11Mounts Bay Road       Fax       61 8 9429 2436
                                                        Perth WA 6000
                                                        Australia

                                                        GPO Box M939
                                                        Perth  WA  6843
                                                        www.ey.com/au










Auditor's independence declaration to the directors of Forte Energy NL

In relation to our review of the financial report of Forte Energy NL for the half-year ended 31 December 2009,
to the best of my knowledge and belief, there have been no contraventions of the auditor independence
requirements of the Corporations Act 2001 or any applicable code of professional conduct.






Ernst & Young





T S Hammond
Partner
Perth
15 March 2010












TH;HG;FORTE;017                                                               Liability limited by a scheme approved
                                                                              under Professional Standards
                                                                              Legislation






ERNST & YOUNG                            The Ernst & Young Building             Tel       61 8 9429 2222
                                                        11Mounts Bay Road       Fax       61 8 9429 2436
                                                        Perth WA 6000
                                                        Australia

                                                        GPO Box M939
                                                        Perth  WA  6843
                                                        www.ey.com/au




To the members of Forte Energy NL

Report on the half-year financial report
We have reviewed the accompanying half-year financial report of Forte Energy NL (the company), which comprises
the statement of financial position as at 31 December 2009, and the statement of comprehensive income,
statement of changes in equity and statement of cash flows for the half-year ended on that date, other selected
explanatory notes, and the directors' declaration of the consolidated entity comprising the company and the
entities it controlled at the half-year end or from time to time during the half-year.


Directors' responsibility for the half-year financial report
The directors of the company are responsible for the preparation and fair presentation of the half-year
financial report in accordance with Australian Accounting Standards (including the Australian Accounting
Interpretations), and the Corporations Act 2001. This responsibility includes establishing and maintaining
internal controls relevant to the preparation and fair presentation of the half-year financial report that is
free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting
policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's responsibility
Our responsibility is to express a conclusion on the half-year financial report based on our review. We
conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of Interim and
other Financial Reports Performed by the Independent Auditor of the Entity, in order to state whether, on the
basis of the procedures described, we have become aware of any matter that makes us believe that the financial
report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the
consolidated entity's financial position as at 31 December 2009 and its performance for the half-year ended on
that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting, and the Corporations
Regulations 2001.  As the auditor of Forte Energy NL and the entities it controlled during the half-year, ASRE
2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial
report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would become aware of all significant matters that
might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence
In conducting our review, we have complied with the independence requirements of the Corporations Act 2001.  We
have given to the directors of the company a written Auditor's Independence Declaration, a copy of which is
included in the Directors' Report.



TH;HG;FORTE;016                                                               Liability limited by a scheme approved
                                                                              under Professional Standards
                                                                              Legislation

Conclusion
Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that
the half-year financial report of Forte Energy NL is not in accordance with the Corporations Act 2001,
including:

    i)      giving a true and fair view of the consolidated entity's financial position as at 31 December 2009 and
            of its performance for the half-year ended on that date; and
        
    ii)     complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations
            Regulations 2001.
        





Ernst & Young





T S Hammond
Partner
Perth
15 March 2010
























TH;HG;FORTE;016

Contact Information

  • Forte Energy NL