Interim Results for the period ended 30 June 2022

RNS Number : 2106A

Clontarf Energy PLC

22 September 2022

 

22 September 2022

Clontarf Energy plc

("Clontarf" or the "Company")

Interim Statement for the period ended 30 June 2022

Clontarf Energy plc (AIM: CLON), the energy company focused on Australia, Africa and Bolivia, announces its unaudited financial results for the six months ended 30 June 2022:

The principal activities during this period were exploring Australian North West Shelf WG 519-P Block , in which Clontarf Energy holds a 10% Working Interest , and on which the partners drilled the Sasanof-1 well in May/June 2022.  While this well did not flow commercial hydrocarbons, it showed that 1,000 metre offshore wells can again be funded.  Clontarf's liquidity and international contacts helped attract funding above the then share price. 

The spectacular boom in LNG prices, and shipments to Asia, as well as to the rationed European gas market, show that we are in a new boom market for gas discoveries in safe jurisdictions.  Evaluation of deeper plays on the North West Shelf WG 519-P Block , as well as nearby offshore and onshore plays, opens up new exploration potential.

Following the C-19 pandemic, Clontarf Energy also restored contacts with the Ghanaian authorities to update the acreage to be explored, and resuscitate the ratification of our signed Petroleum Agreement on Tano 2A Block.  Slowness in ratification of signed contracts had constrained the development of Ghana's oil and gas industry.  The current Ghanaian government has indicated its determination to recover momentum.  Ghanaian fiscal terms are competitive, while West African infrastructure steadily improves.

Financial markets and farm-out interest in petroleum had been depressed since the oil price war starting in 2014, and continuing periodically until 2022.  This had constrained our options for early seismic or wells in Ghana or Chad.  But recent price surges show that major new investment is required to service global demand.  Clontarf plans to participate in the coming boom.

Aside from petroleum, Clontarf advanced its negotiations with international Direct Lithium Extraction (DLE) processing experts, and has agreed in principle on a Joint Venture to test brines in medium-sized Bolivian salt-lakes. Our priority has been to maximise throughput without relying on extensive evaporation ponds.  At the same time, the rising battery market now requires over 99.5% Lithium content, with minimal impurities, especially Magnesium.  It has been a long process, but we now anticipate that high recoveries may be possible with these specifications at a reasonable cost.  Nonetheless only full-scale production will confirm performance.

There is rising market and investor interest in DLE, both in Bolivia and elsewhere, due to surging demand for battery-grade lithium salts, both in EVs, grid storage and other "Green Transition" requirements.  If laboratory test-work results are satisfactory, we understand that Australian and other funding is available to build an on-site pilot plant to production test the Direct Lithium Extraction process.

Preparatory to this work, Clontarf recently conducted an augering campaign on priority areas of the targeted salt-lakes, subject as always to following strict environmental standards and obtaining the necessary approvals from the Bolivian authorities.

Anticipated lithium salts' demand will be impossible to serve without developing several Bolivian salt-lakes. We expect that the Bolivian Lithium Law will soon be updated to make clear the legal basis for Joint Ventures with the authorities.

In oil and gas, the tightening hydrocarbons' supply-demand balance promises a revival of exploration and the farm-out market. Shortages of piped gas and LNG feedstock have driven prices to record levels. There has rarely been a better time to hold prospective acreage.

The resurgence of interest in African exploration and development may lead to additional proposals in the coming months.

In summary, Clontarf progresses its interests in Bolivia, Australia, Chad and Ghana, maintaining cordial communications with the relevant authorities, and continues to operate efficiently on minimal expenditure.

Funding

Subject to technical verification of its exploration projects, and permitting, Clontarf is confident of adequate funding, whether in London or Australia, for near to medium term ongoing activities.

David Horgan

Chairman

21 September 2022

This announcement contains inside information for the purposes of Article 7 of Regulation (EU) 596/2014.

ENDS

For further information please visit http://clontarfenergy.com or contact:

Clontarf Energy David Horgan, Chairman Jim Finn, Director	[phone]
Nominated & Financial Adviser Strand Hanson Limited Rory Murphy Ritchie Balmer	[phone]
Broker Novum Securities Limited Colin Rowbury	[phone]
Public Relations BlytheRay Megan Ray	[phone]
Teneo Luke Hogg Alan Tyrrell Ciara Wylie	[phone]

Clontarf Energy plc
Financial Information (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
	Six Months Ended				Year Ended
	30 June 22		30 June 21		31 Dec 21
	unaudited		unaudited		Audited
	£'000		£'000		£'000
Administrative expenses	( 414 )		( 137 )		( 402 )
Impairment of exploration and evaluation assets	-		-		( 62 )
Sasanof project expenditure (Note 3)	( 4,095 )		-		-
LOSS BEFORE TAXATION	( 4,509 )		( 137 )		( 464 )
Income Tax	-		-		-
COMPREHENSIVE INCOME FOR THE PERIOD	( 4,509 )		( 137 )		( 464 )
LOSS PER SHARE - basic and diluted	(0.34p)		(0.02p)		(0.06p)
CONDENSED CONSOLIDATED STATEMENT OF FINANICAL POSITION
	30 June 22		30 June 21		31 Dec 21
	unaudited		unaudited		audited
	'000		'000		'000
ASSETS:
NON-CURRENT ASSETS
Intangible assets	868		932		868
	868		932		868
CURRENT ASSETS
Other receivables	1		5		2
Cash and cash equivalents	188		470		344
	189		475		346
TOTAL ASSETS	1,057		1,407		1,214
LIABILITIES:
CURRENT LIABILITIES
Trade payables	(608 )		( 74 )		( 65 )
Other payables	( 1,480 )		( 1,360 )		( 1,420 )
	( 2,088 )		( 1,434 )		( 1,485 )
TOTAL LIABILITIES	( 2,088 )		( 1,434 )		( 1,485 )
NET LIABILITES	( 1,031 )		( 27 )		( 271 )
EQUITY
Called-up share capital	5,927		2,177		2,177
Share premium	10,985		10,985		10,985
Share based payment reserve	186		104		186
Retained deficit	( 18,129 )		( 13,293 )		( 13,620 )
TOTAL EQUITY	( 1,031 )		( 27 )		( 272 )

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
	Called-up				Share based
	Share		Share		Payment		Retained
	Capital		Premium		Reserves		Deficit		Total
	'000		'000		'000		'000		'000
As at 1 January 2021	1,792		10,900		104		( 13,156 )		( 360 )
Shares issued	385		115		-		-		500
Share issue expenses	-		( 30 )		-		-		( 30 )
Total comprehensive income							( 137 )		( 137 )
As at 30 June 2021	2,177		10,985		104		( 13,293 )		( 27 )
Share based payment charge	-		-		82		-		82
Total comprehensive income					-		( 327 )		( 327 )
As at 31 December 2021	2,177		10,985		186		( 13,620 )		( 272 )
Shares issued	3,750		-		-		-		3,750
Total comprehensive income	-		-		-		( 4,509 )		( 4,509 )
As at 30 June 2022	5,927		10,985		186		( 18,129 )		( 1,031 )

CONDENSED CONSOLIDATED CASH FLOW	Six Months Ended				Year Ended
	30 June 22		30 June 21		31 Dec 21
	unaudited		unaudited		audited
	'000		'000		'000
CASH FLOW USED IN OPERATING ACTIVITIES
Loss for the period	( 4,509 )		( 137 )		( 464 )
Impairment of exploration and evaluation assets	-		-		62
Share based payment charge	-		-		82
Exchange movements	1		-		1
	( 4,508 )		( 137 )		( 319 )
Movements in Working Capital	603		49		120
CASH USED BY OPERATIONS	( 3,905 )		( 88 )		( 199 )
NET CASH USED IN OPERATING ACTIVITIES	( 3,905 )		( 88 )		( 199 )
CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for intangible assets	-		( 2 )		( 15 )
NET CASH USED IN INVESTING ACTIVITIES	-		( 2 )		( 15 )
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares	3,750		500		500
Share issue expenses	0		(30)		(30)
NET CASH GENERATED FROM FINANCING ACTIVITIES	3,750		470		470
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS	( 155 )		380		256
Cash and cash equivalents at beginning of the period	344		89		89
Exchange loss on cash and cash equivalents	( 1 )		1		( 1 )
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD	188		470		344

Notes:

1.  INFORMATION

The financial information for the six months ended 30 June 2022 and the comparative amounts for the six months ended 30 June 2021 are unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006.

The Interim Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the U.K. The accounting policies and methods of computation used in the preparation of the Interim Financial Report are consistent with those used in the Group 2021 Annual Report, which is available at www.clontarfenergy.com

The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.

2.  No dividend is proposed in respect of the period.

3.  SASANOF PROJECT

On 9 May 2022 the Company announced that it had acquired a 10 per cent. interest in the high-impact multi-TCF (Trillion Cubic Feet) Sasanof exploration prospect (located mainly within Exploration Permit WA-519-P ) through the acquisition of a 10 per cent. interest in Western Gas, which wholly owns the prospect.

The Acquisition consideration comprised of a cash consideration of US$4,000,000, and 100,000,000 ordinary shares of 0.25p each in the Company. In the event of a discovery being declared at the Sasanof-1 Well, further consideration would have been payable.

On 6 June 2022 the Company announced that no commercial hydrocarbons were intersected and the Sasanof-1 Well would be plugged and permanently abandoned. De-mobilisation activities would then commence. Accordingly, the total costs of £4,095,294 incurred on the Sasanof-1 Well were written off in full in the current period.

4.  GOING CONCERN

The Group incurred a loss for the period of £4,508,893 (2021: £463,501) and had net current liabilities of £1,898,554 (2021: £1,139,661) at the balance sheet date. These conditions, as well as those noted below, represent a material uncertainty that may cast doubt on the Group's ability to continue as a going concern.

Included in current liabilities is an amount of £1,480,565 (2021: £1,420,565) owed in respect of unpaid remuneration due at the balance sheet date. The directors have confirmed that they will not seek settlement of these amounts in cash until 31 December 2024.

The Group had a cash balance of £188,459 (2021: £344,253) at the balance sheet date. The directors have prepared cashflow projections for a period of at least 12 months from the date of approval of the financial statements which indicate that the group will require additional finance to fund working capital requirements and develop existing projects. As the Group is not revenue or cash generating it relies on raising capital from the public market. On 27 April 2022 the Group raised £3,500,000 on a placing, further information is detailed in Note 9.

As in previous years the Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements and believe the going concern basis is appropriate for these financial statements. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

5.  LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the year attributable to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year. Diluted earnings per share is computed by dividing the loss after taxation for the year by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.

The following table sets out the computation for basic and diluted earnings per share (EPS):

	Six months Ended				Year Ended
	30 June 22		30 June 21		31 Dec 21
	£'000		£'000		£'000
Loss for the year attributable to equity holders	(4,509)		(137)		(464)
Denominator	Number		Number		Number
For basic and diluted EPS	1,328,908,309		763,344,558		817,717,558
Basic and diluted EPS	(0.34p)		(0.02p)		(0.06p)

Basic and diluted loss per share are the same as the effect of the outstanding share options is anti-dilutive and is therefore excluded.

6.  INTANGIBLE ASSETS

	30 June 22		30 June 21		31 Dec 21
	£'000		£'000		£'000
Exploration and evaluation assets
Cost:
At 1 January	8,640		8,625		8,625
Additions	-		17		15
Closing Balance	8,640		8,642		8,640
Impairment:
At 1 January	7,772		7,710		7,710
Provision for impairment	-		-		62
Closing Balance	7,772		7,710		7,772
Carrying value:
At 1 January	868		915		915
At period end	868		932		868

Regional Analysis	30 Jun 22 £'000		30 Jun 21 £'000		31 Dec21 £'000
Bolivia	-		79		-
Ghana	868		853		868
	868		932		868

Exploration and evaluation assets relate to expenditure incurred in prospecting and exploration for lithium, oil and gas in Bolivia and Ghana. The directors are aware that by its nature there is an inherent uncertainty in exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalised exploration and evaluation assets. 

During 2018 the Group resolved the outstanding issues with the Ghana National Petroleum Company (GNPC) regarding a contract for the development of the Tano 2A Block. The Group has signed a Petroleum Agreement in relation to the block and this agreement awaits ratification by the Ghanaian government.

The Company is in negotiations with the Ministry of Electricity Technologies and the State Lithium Company in Bolivia on exploration and development of salt-lakes in accordance with law. Samples have been analysed and process work is underway.

The Group incurred expenditure of £62,074 in Bolivia up to 31 December 2021. As no licences have yet been granted, the directors decided to impair the costs. Accordingly, an impairment of £62,074 was been recorded by the Group in the prior year.

The directors believe that there were no facts or circumstances indicating that the carrying value of intangible assets may exceed their recoverable amount and thus no impairment review was deemed necessary by the directors. The realisation of these intangibles assets is dependent on the successful discovery and development of economic deposit resources and the ability of the Group to raise sufficient finance to develop the projects. It is subject to a number of potential significant risks, as set out below.

The Group's activities are subject to a number of significant potential risks including:

· licence obligations;

· exchange rate risks;

· uncertainties over development and operational costs;

· political and legal risks, including arrangements with Governments for licences, profit sharing and taxation;

· foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

· title to assets;

· financial risk management;

· going concern; and

· ability to raise finance.

7.  TRADE PAYABLES

	30 June 22		30 June 21		31 Dec 21
	£'000		£'000		£'000
Creditor - Western Gas	550		-		-
Trade payables	48		64		49
Other accruals	10		10		16
	608		74		65

Creditor - Western Gas relate to cash calls due for costs incurred on the Sasanof-1 Well accrued but not paid at period end.

8.  OTHER PAYABLES

	30 June 22		30 June 21		31 Dec 21
	£'000		£'000		£'000
Amounts due for unpaid remuneration	1,480		1,360		1,420
	1,480		1,360		1,420

Other payables relate to amounts due to directors and former director for remuneration accrued but not paid at period end.

9.  SHARE CAPITAL

Allotted, called-up and fully paid:
	Number		Share Capital		Premium
			£'000		£,000
At 1 January 2021	716,979,964		1,792		10,900
Issued during the period	153,846,153		385		115
Share issue expenses	-		-		(30)
At 30 June 2021	870,826,117		2,177		10,985
Issued during the period	-		-		-
At 31 December 2021	870,826,117		2,177		10,985
Issued during the period	1,500,000,000		3,750		-
At 30 June 2022	2,370,826,117		5,927		10,985

On 6 May 2021 the Company raised £500,000 via a placing of 153,846,153 ordinary shares at a price of 0.325p per share. Proceeds raised were used to provide additional working capital and fund development costs.

On 5 May 2022 the Company raised £3,500,000 via a placing of 1,400,000,000 ordinary shares at a price of 0.25p per share. Proceeds raised were used to finance the drilling of the Sasanof-1 Well in Western Australia.

On 9 May 2022, as part of the acquisition of a 10% interest in the Sasanof-1 Well, the Company issued 100,000,000 shares at a price of 0.25p per share to Western Gas Australia.

10.  SHARE BASED PAYMENTS

SHARE OPTIONS

The Group issues equity-settled share-based payments to certain directors and individuals who have performed services for the Group. Equity-settled share-based payments are measured at fair value at the date of grant.

During 2019, 40,500,000 options with an exercise price of 0.7p were granted with a fair value of £246,788. These options will vest over a 3 year period and will be capitalised or expensed on a straight line basis over the vesting period.

Fair value is measured by use of a Black-Scholes valuation model.

The Group plan provides for a grant price equal to the average quoted market price of the ordinary shares on the date of grant.

	30 Jun 22		30 Jun 21		31 Dec21
	Options Number '000	Weighted average exercise price in pence	Options Number '000	Weighted average exercise price in pence	Options Number '000	Weighted average exercise price in pence
At 1 January	40,500	0.7	40,500	0.7	40,500	0.7
Issued	-		-		-
Outstanding at end of period	40,500	0.7	40,500	0.7	40,500	0.7
Exercisable at end of period	30,500	0.7	27,167	0.7	30,500	0.7

WARRANTS

	30 Jun 22		30 Jun 21		31 Dec21
	Warrants Number '000	Weighted average exercise price in pence	Warrants Number '000	Weighted average exercise price in pence	Warrants Number '000	Weighted average exercise price in pence
At 1 January		-	-	-	-	-
Issued	435,683	0.25	-	-	-	-
Exercisable at end of period	435,683	0.25	-	-	-	-

On 12 January 2022 , the Company announced that as a result of it accruing and not paying in cash, salaries of the  Directors since 2010 , t he accrued liability as at 31 December 2021 for the three longest serving directors (Dr Teeling, Mr Horgan and Mr Finn) was £1,340,564. The Board remains cognisant of the need to conserve cash resources in the current environment and therefore Dr Teeling (who has now retired from the Board), Mr Horgan and Mr Finn have agreed to continue deferring payment of this amount, in cash, until the end of 2024.

In consideration for this past and continued deferral, the Company have issued 3.25 warrants over Ordinary Shares per each 1p of accrued salary due until 31 December 2021.  The Warrants are exercisable at 0.25p at any time until 11 January 2025 and have been allocated as follows:

	Accrued salary (£)	Warrants exercisable at conversion price of 0.25p per share
David Horgan	£569,037	184,937,025
John Teeling	£395,704	128,603,800
James Finn	£375,823	122,142,475

Accordingly, in aggregate, 435,683,300 Warrants have been issued. Any exercise of the Warrants is restricted to the extent that, if by exercising, the Warrant holders in aggregate hold greater than 29.9 per cent. of the total voting rights of the Company.

For the avoidance of doubt, the deferred salaries, unless otherwise settled, will remain payable in cash after the end of 2024 .

11.  POST BALANCE SHEET EVENTS

There were no material post balance sheet events affecting the group or company.

12. The Interim Report for the six months to 30 June 2022 was approved by the Directors on 21 September 2022.

13. The Interim Report will be available on the Company's website at www.clontarfenergy.com . 

 

END

 

 

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