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Galilee Energy expects FY11 profit of $21-22m

Galilee Energy expects FY11 profit of $21-22m

Galilee Energy (ASX:GLL) has forecast a net profit for FY11 of between $21 million and $22 million on the sale of it NZ coal subsidiary.

GLL shares jumped 8.11% in Tuesday's trading to $0.200 after the forecast was given.

The anticipated result compares to a post-tax profit of $1.6 million last year, according to the company's FY10 report.

Galilee said it had recently received a $5.24 million completion adjustment payment, covering debt and exploration costs, from the sale of its Eastern Resources Group subsidiary to Bathurst Resources (ASX:BTU).

A final completion payment of under $1 million also remains to be finalised, the company said in a market update.

Galilee added that capital gains tax is only payable on 13% of the gain – a figure offset by existing tax losses.

The sale has given Galilee Energy cash on hand totalling $39.5 million.

But Galilee added that equipment failures and flooding have delayed progress on the Glenaras pilot coal seam gas project being conducted by a joint venture with AGL Energy (ASX:AGK).

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Tags GuidanceGalilee EnergyBathurst ResourcesASX:GLLASX:BTUenergyMergers and acquisitions

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