Audited Report and Accounts to 31 December 2013

RNS Number : 7855F

Solo Oil Plc

29 April 2014

For Immediate Release

29 April 2014

SOLO OIL PLC

("Solo" or the "Company")

Audited Accounts for the 18 months to 31 December 2013

Solo Oil plc announces that the Company's audited Report and Accounts for the 18 months to 31 December 2013 are being posted to Shareholders and will shortly be available from the Company's website, www.solooil.co.uk

Chairman's Statement

I am pleased to present the report of the Company's activities for the period ending 31 December 2013. Trading conditions for junior oil and gas companies continued to be difficult in 2013 and this had an effect on the pace of operations being undertaken by the operators of our various ventures. Solo depends on the operators and partners in our joint ventures to progress operations and when funding and other factors delay operations this has a knock-on effect on the Solo portfolio. Throughout 2014 many of these conditions remain largely unchanged, however, I am happy to report that significant progress is now being made with our most material asset, the Ntorya gas condensate discovery in Tanzania.

The Solo portfolio currently encompasses exploration and development assets in Tanzania, Canada and the UK, and an option to acquire an interest in an oil development in West Africa. Further opportunities continue to be investigated with a view to enlarging the investment spread.

Investment Strategy

The Company has continued to pursue its approved investment strategy to develop a diverse portfolio of exploration, development and production interests on a global basis with the primary focus being in Africa.

Highlights for the period include:

· Award of an Appraisal Licence for the Ntorya gas condensate discovery in Tanzania

· Mobilisation of a seismic crew to the Ruvuma PSA to commence acquiring of additional 2D data

· Extension of the exploration drilling commitments in Ruvuma PSA until late 2016

Following the reporting period:

· Solo signed an agreement to acquire a 10% interest in Horse Hill Development Limited

· Site preparation commenced at the Horse Hill-1 well site

· Seismic data acquisition commenced in the Ntorya Appraisal Licence of Ruvuma

Outlook

We look forward to a strengthening market and renewed interest in our Tanzania and UK projects during the remainder of 2014 and I would like to thank shareholders for their ongoing support.

David Lenigas

Executive Chairman

29 April 2014

For further information:

Solo Oil plc Neil Ritson	+44 (0) 20 7440 0642

Beaumont Cornish Limited Nominated Adviser and Joint Broker Roland Cornish	+44 (0) 20 7628 3396

Old Park Lane Capital Plc Joint Broker Michael Parnes Shore Capital Joint Broker Pascal Keane Jerry Keen (Corporate Broker) Bell Pottinger Public Relations Mark Antelme Henry Lerwill	+44(0) 20 7493 8188 +44 (0) 20 7408 4090 +44 (0) 20 7861 3232

Set out below are extracts of the Company's audited Report and Accounts for the 18 months to 31 December 2013.

Chief Executive's Report

Tanzania

The Ruvuma Petroleum Sharing Agreement ("Ruvuma PSA") lies in the south-east of Tanzania and covers approximately 3,447 square kilometres of which some 10% lies offshore and the balance onshore. In 2010 Solo exercised its option to obtain a direct 12.5% working interest in the Ruvuma PSA following the successful drilling of the Likonde-1 well. During the drilling of the Ntorya-1 well in 2012 Solo further increased its working interest and now holds a 25% interest. Within the Ruvuma PSA there are two separate licence areas known as Lindi in the north and Mtwara in the south. Mtwara is contiguous with the Mozambique border and both licence areas border the coast where very substantial gas discoveries have been made in recent years.

The Likonde-1 well was drilled in the Lindi Block to a total depth of 3,647 metres and was plugged and abandoned after discovery of a 250 metre gross interval of sands with residual oil shows and reaching a gas zone close to total depth. Having confirmed the presence of a working hydrocarbon play system work was focussed on determining the optimum location for the drilling of the second commitment well. After reprocessing and reinterpretation of the 2D seismic data a location for a well was selected approximately 14 kilometres south of Likonde-1 at Ntorya.

The Ntorya-1 gas condensate discovery well was drilled in 2011 and 2012. The well was reached a final total depth of 3,150 metres and a gas zone between 2,663 and 2,688 metres was tested in June 2012. Flow testing on a 3.5 metres zone at the top of the gross 25 metre gas bearing interval produced a maximum flow rate of 20.1 million cubic feet per day (mmscfd) and 139 barrels per day (bpd) of 53 degree API condensate through a 1" choke. Following the completion of the test sequence the well was suspended as a discovery for subsequent additional testing or production. An appraisal licence covering 760 square kilometres of the PSA was granted by the Tanzanian authorities in July 2013 and work commenced in defining the potential development of the Ntorya discovery.

The Ntorya discovery has been attributed by ISIS Consulting (ISIS) with gross 178 billion cubic feet (bcf) of gross discovered in-place reserves and a further 1 trillion cubic feet (tcf) of unrisked potential gas in place. Establishing the most likely mean volume of recoverable reserves and the production rate per well will be key aspects of the planned studies. Additional seismic data to infill the existing 2D grid is required to better define the closure and to assist in the siting of appraisal/development wells.

A resource report was prepared on the Ruvuma PSA by ISIS and published in 2012. Unrisked gross total resources of 5.75 tcf GIIP were attributable to the Ruvuma PSA and a number prospects and leads of up to 2.6 tcf GIIP were identified. It is intended that further seismic data will be acquired over the various prospects and that exploration drilling will be undertaken following a farm-out.

In 2013 Solo and Aminex agreed to conduct a joint farm-out of up to 50% of their mutual interests. Expressions of interest were received from a number of parties, however, no final agreement was reached and the partners agreed to proceed to acquiring additional seismic data, especially over the Ntorya discovery, in order to better define the resource potential prior to reoffering the area for potential farm-out in 2014. The 1^st Extension period drilling commitments be deferred in to the 2^nd Extension period and the joint venture has until late 2016 to complete the commitments of both exploration periods; namely the drilling of two wells in each of the Lindi and Mtwara licence areas.

Construction of the Chinese financed 36" gas pipeline from Mtwara to Dar es Salaam has progressed well and it is expected that commissioning will be completed in 2014. Based on the reported net-back price to the well head scoping economics for Ntorya have been prepared and show the development to be robust under most scenarios. The close proximity of the pipeline to the Ntorya discovery and to various undrilled prospects in the PSA greatly enhances the economics for gas production and negotiations on gas sales from the Ntorya Field are expected to commence during 2014.

Canada

In 2010 Solo made a participating loan to Reef Resources Limited (Reef) in order to finance the recommencement of oil and gas production at the Ausable Field in SW Ontario. Production was restarted at in late 2010 and in 2011 Reef drilled the Ausable #5 well close to the crest of the Ausable reef demonstrating 72 metre net oil column within carbonate reservoir facies. Following the successful proof of the concept for redeveloping Ausable, Solo negotiated the conversion of its existing loan to a direct 23.8% working interest in all of Reef's Ontario properties which include a 23,500 acre 3D seismic survey, 1,800 acres of petroleum leases, five Ausable wells, the Airport South #1 and Airport North #1 wells and all associated surface facilities. Solo executed a further option to increase its participation and currently holds an interest of 28.56%.

In 2012, following only intermittent oil and gas production, Solo conducted an independent technical re-evaluation of the project and concluded that the project remained viable, but that changes in operating practice were required. During this reporting period Reef has had inadequate capital resources to continue field development and consequently Solo has not made any further direct investment.

Reef made an unsolicited offer to repurchase Solo's 28.56% interest in November 2013 subject to financing. To date Reef has been unable to close financing and no progress has been made with either the project or any potential sale.

West Africa

In May 2013 the Company entered into a Share Purchase Agreement with Pan Minerals & Oil AG (Pan Minerals) to acquire an initial 15% stake in Pan Minerals and obtain a Right of First Refusal (ROFR) to allow Solo to increase its direct equity interest in Pan Minerals up to 49.9%. Pan Minerals is a special purpose vehicle based in Switzerland with a negotiated agreement to participate in the redevelopment of an onshore oil field in West Africa where production of over 2,000 bopd could be quickly established.

Pan Mineral's access to the opportunity requires that funding for the initial phase of field development is in place before operations commence. Securing funding, through bank debt and off-take agreements, is the primary focus at this time.

The purpose of Solo's initial investment was to assist Pan Minerals in concluding the financial arrangements necessary to bring the field into production. Subsequently the ROFR has been extended by mutual agreement to allow more time to conclude the full financing and the Solo investment increased to 19.9% of Pan Minerals.

Progress on financing the field development has been slower than expected and at the time of this report Pan Minerals reports that negotiations with various lending institutions are continuing with a view to closing financing in 1H2014.

In the interim Pan Minerals has continued to seek additional field development opportunities and is actively pursuing several opportunities that will greatly enhance the portfolio is access can be obtained.

United Kingdom

In early 2014, after the close of the 2013 financial year, and following a period of review of UK activities and due diligence of the PEDL137 licence in particular Solo entered into a share acquisition agreement in Horse Hill Development Limited (HHDL), a special purpose vehicle which holds operatorship and rights to drill through a farm-in with Magellan Petroleum (UK) Limited. Solo acquired a 10% interest in HHDL which is equivalent to a 6.5% interest in the Horse Hill prospect and the remainder of the 99.3 square kilometre Petroleum Exploration and Development Licence (PEDL) in the Weald Basin of Surrey.

At the time of this report the Horse Hill-1 well is scheduled to be drilled in the summer of 2014 and will be targeting conventional stacked oil pay zones in the Portland and Corallian sandstones and the Great Oolite limestones. These Jurassic age reservoirs have proven to be productive elsewhere in the Weald Basin. The well will also be deepened to approximately 2,650 metres (8,680 feet) to test the possibility of a Triassic gas accumulation. Previous drilling in the vicinity of the prospect by Esso in 1964 (Collendean Farm-1) on the north-east edge of the Horse Hill prospect is believed, based on more recent seismic data, to have drilled off structure although oil shows were recorded at various Jurassic levels.

The gross mean unrisked oil in place for the Jurassic targets is estimated at 340 million barrels with total mean unrisked prospective resources of 87 million barrels. The gross unrisked mean prospective resources of gas in the Triassic have been estimated at 164 billion cubic feet (approximately 28 million barrels oil equivalent).

Financial Results

The Company's loss for the 18 month period is £3.12 million (2012: £1.02 million) in which it earned sales revenue of nil (2012: £nil).

During the period the Company spent £1.4 million (2012: £3.6 million) on acquisition and enhancement of intangible assets. Amortisation of intangible assets for the period, including an impairment charge, is £1.7million (2012: nil).

Immediate Outlook

The Ruvuma PSA represents a very significant opportunity to the Company with the potential that the existing discovery could be commercialised in the next few years and that significant gas and liquids remains to be discovered in this lightly explored area.

The investment in Ontario will continue to be closely monitored and efforts made to seek an acceptable return for shareholders. The investment in Pan Minerals is hoped to lead to an early exposure to existing proven reserves in West Africa.

The imminent drilling of the Horse Hill prospect and additional opportunities within PEDL137 also represent opportunities for early production should commercial volumes be discovered.

The Company is also continuing to seek further investment opportunities, with several opportunities currently being evaluated.

Neil Ritson

Executive Director

29 April 2014

GLOSSARY & NOTES

2D = two-dimensional

3D = three-dimensional

API = American Petroleum Institute

bbls = barrels of oil

bcf = billion cubic feet

boe = barrels of oil equivalent calculated on the basis of six thousand cubic feet of gas equals one barrel of oil

boepd = boe per day

bopd = barrels of oil per day

bpd = barrels per day

CDN$ = Canadian dollar

EOR = enhanced oil recovery

GIIP = gas initially in place

mmscf = million standard cubic feet of gas per day

mmscfd = mmscf per day

PSC = Production Sharing Contract

tcf = trillion cubic feet

All figures are net to Solo unless otherwise stated

All reserves and resources definitions used are per the Society of Petroleum Engineers' Petroleum Resources Management System unless otherwise stated.

Competent Person's statement:

The information contained in this document has been reviewed and approved by Neil Ritson, Executive Director for Solo Oil Plc. Mr Ritson is a member of the Society of Petroleum Engineers, a Fellow of the Geological Society, an Active Member of the American Association of Petroleum Geologists and has over 35 years relevant experience in the oil industry.

Financial Statements

Statement of Comprehensive Income for the period ended 31 December 2013

		18 months ended	Year ended
	Notes	31 December 2013	30 June 2012
		£000's	£000's
Revenue		-	-
Administrative expenses	3	(1,485)	(917)
Loss from operations		(1,485)	(917)
Impairment charge	9	(1,658)	-
Finance costs	6	-	(100)
Finance revenue	7	26	-
Loss before taxation		(3,117)	(1,017)
Income tax	5	-	-
Loss for the period		(3,117)	(1,017)

Other comprehensive income
Exchange differences on translation of foreign operations		-	-
Other comprehensive income for the year net of taxation		-	-

Total comprehensive income for the period attributable to equity holders of the parent		(3,117)	(1,017)

Loss per share (pence)
Basic and diluted	8	(0.08)	(0.04)

Statement of Financial Position as at 31 December 2013

	Notes	31 December 2013	30 June 2012
		£000's	£000's
Assets Non- current assets
Investment in subsidiaries	11	-	-
Intangible asset	9	8,449	8,661
Available for sale assets	10	816	-
Total non-current assets		9,265	8,661
Current assets
Trade and other receivables	12	1,291	870
Cash and cash equivalents		1,956	112
Total current assets		3,247	982
Total assets		12,512	9,643

Liabilities Current liabilities
Trade and other payables	13	(116)	(1,170)
Total liabilities		(116)	(1,170)

Net assets		12,396	8,473


Equity
Share capital	14	460	269
Deferred share capital	14	1,831	1,831
Share premium		19,852	13,243
Share-based payment reserve		696	507
Warrant reserve		-	33
Retained loss		(10,443)	(7,410)
		12,396	8,473

The financial statements were approved by the board of directors and authorised for issue on 29 April 2014. They were signed on its behalf by ;
David Lenigas	Neil Ritson
Director	Director

Statement of Cash Flows for the period ended 31 December 2013

	18 Months ended	Year ended
	31 December 2013	30 June 2012
	£000's	£000's
Cash outflow from operating activities
Operating loss	(1,485)	(917)
Adjustments for:
Share-based payments	240	69
(Increase) in receivables	(421)	(425)
(Decrease)/increase in payables	(1,054)	1,014
Cash used in operating activities	(2,720)	(259)
Income tax	-	-
Net cash outflow from operating activities	(2,720)	(259)

Cash flows from investing activities
Interest received	26	-
Payments to acquire intangible assets	(1,446)	(3,649)
Payments to acquire Available for sale investment	(516)	-
Net cash outflow from investing activities	(1,936)	(3,649)

Cash flows from financing activities
Proceeds on issuing of ordinary shares	6,878	1,929
Cost of issue of ordinary shares	(378)	-
Net cash inflow from financing activities	6,500	1,929

Net increase/(decrease) in cash and cash equivalents	1,844	(1,979)

Cash and cash equivalents at beginning of the period	112	2,091
Cash and cash equivalents at end of the period	1,956	112

The above Cash Flow should be read in conjunction with the accompanying notes.

Statement of Changes in Equity for the period ended 31 December 2013

		Deferred		Share
	Share	share	Share	based	Warrant	Accumulated	Total
	capital	capital	premium	payments	reserve	losses	equity
	£000's	£000's	£000's	£000's	£000's	£000's	£000's

Balance at 30 June 2011	233	1,831	11,250	438	33	(6,393)	7,392

Loss for the year	-	-	-	-	-	(1,017)	(1,017)
Total comprehensive income	-	-	-	-	-	(1,017)	(1,017)
Share issue	36	-	1,993	-	-	-	2,029
Cost of share issue	-	-	-	-	-	-	-
Share-based payment charge	-	-	-	69	-	-	69
Total contributions by and distributions to owners of the Company	36	-	1,993	69	-	-	2,098

Balance at 30 June 2012	269	1,831	13,243	507	33	(7,410)	8,473

Loss for the period	-	-	-	-	-	(3,117)	(3,117)
Total comprehensive income	-	-	-	-	-	(3,117)	(3,117)
Share issue	191	-	6,987	-	-	-	7,178
Cost of share issue	-	-	(378)	-	-	-	(378)
Share options and warrants lapsed	-	-	-	(51)	(33)	84	-
Share-based payment charge	-	-	-	240	-	-	240
Total contributions by and distributions to owners of the Company	191	-	6,609	189	(33)	84	7,040

Balance at 31 December 2013	460	1,831	19,852	696	-	(10,443)	12,396

Notes to the financial statements for the period ended 31 December 2013

1	Summary of significant accounting policies
	General information and authorisation of financial statements
	Solo Oil Plc is a public limited Company incorporated in England & Wales. The address of its registered office is Suite 3B, Princes House, 38 Jermyn Street, London SW1Y 6DN. The Company's ordinary shares are traded on the AIM Market operated by the London Stock Exchange. The financial statements of Solo Oil plc for the 18 months ended 31 December 2013 were authorised for issue by the Board on 29 April 2014 and the balance sheets signed on the Board's behalf by Mr. Neil Ritson and Mr David Lenigas.
	Statement of compliance with IFRS
	The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006. The principal accounting policies adopted by the Company are set out below.
	New standards and interpretations not applied
	IASB (International Accounting Standards Board) and IFRIC (International Financial Reporting Interpretations Committee) have issued the following standards and interpretations with an effective date after the date of these financial statements:
	IFRS 13 Fair Value Measurement The Company has applied IFRS13 for the first time in the current year. IFRS13 establishes a single source of guidance for fair value measurements and disclosures about fair value measurements. IFRS13 defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction in the principal (or most advantageous) market at the measurement date under current market conditions. Fair value under IFRS13 is an exit price regardless of whether that price is directly observable or estimated using another valuation technique. Also, IFRS13 includes extensive disclosure requirements. IFRS13 requires prospective application from 1 January 2013. In addition, specific transitional provisions were given to entities such that they need not apply the disclosure requirements set out in the Standard in comparative information provided for periods before the initial application of the Standard. In accordance with these transitional provisions, the Company has not made any new disclosures required by IFRS13 for the 2012 comparative period. Other than the additional disclosures, the application of IFRS13 has not had any impact on the amounts recognised in the consolidated financial statements. Amendments to IAS1 Presentation of Financial Statements (as part of the Annual Improvements to IFRSs 2009; 2011 Cycle issued in May 2012) The Annual Improvements to IFRSs 2009; 2011 have made a number of amendments to IFRSs. The amendments that are relevant to the Company are the amendments to IAS1 regarding when a statement of financial position as at the beginning of the preceding period (third statement of financial position) and the related notes are required to be presented. The amendments specify that a third statement of financial position is required when a) an entity applies an accounting policy retrospectively, or makes a retrospective restatement or reclassification of items in its financial statements, and b) the retrospective application, restatement or reclassification has a material effect on the information in the third statement of financial position. The amendments specify that related notes are not required to accompany the third statement of financial position. This has no impact for the 2013 financial statements. Amendments to IFRS7 Disclosures The Company has applied the amendments to IFRS7 Disclosures-Offsetting Financial Assets and Financial Liabilities for the first time in the current year. The amendments to IFRS7 require entities to disclose information about rights of offset and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting agreement or similar arrangement. As the Company does not have any offsetting arrangements in place, the application of the amendments has had no impact on the disclosures or on the amounts recognised in the consolidated financial statements. At the date of authorisation of these financial statements, the following Standards and Interpretations which have not been applied in these financial statements were in issue but not yet effective (and in some cases had not yet been adopted by the EU): IFRS9 Financial Instruments IFRS10 Consolidated Financial Statements IFRS12 Joint Arrangements# IAS27 (revised) Investment Entities IAS28 (revised) Investments in Associates and Joint Ventures IAS32 (revised) Offsetting Financial Assets and Financial Liabilities IAS36 (revised) Recoverable Amount Disclosures for Non Financial Assets IAS39 (revised) Novation of Derivatives and Continuation of Hedge Accounting IFRIC Interpretation21 Levies The directors do not expect that the adoption of the Standards and Interpretations listed above will have a material impact on the financial statements of the Group in future periods, except as that IFRS9 will impact both the measurement and disclosures of Financial Instruments. Beyond the information above, it is not practicable to provide a reasonable estimate of the effect of these standards until a detailed review has been completed. The directors do not expect that the adoption of the standards listed above will have a material impact on the financial statements of the Group in future periods, however, it is not practicable to provide a reasonable estimate of the effect of these standards until a detailed review has been completed.


	Basis of preparation
	The consolidated financial statements have been prepared on the historical cost basis, except for the measurement to fair value of assets and financial instruments as described in the accounting policies below, and on a going concern basis.
	The financial report is presented in Pound Sterling (£) and all values are rounded to the nearest thousand pounds (£'000) unless otherwise stated.

	Basis of consolidation
	Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

	Available for sale financial assets
	Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets. The Group's available-for-sale financial assets include unlisted securities. These available-for-sale financial assets are measured at fair value. Gains and losses are recognised in other comprehensive income and reported within the available-for-sale reserve within equity, except for impairment losses and foreign exchange differences, which are recognised in profit or loss. When the asset is disposed of or is determined to be impaired, the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss and presented as a reclassification adjustment within other comprehensive income. Interest calculated using the effective interest method and dividends are recognised in profit or loss within finance income
	Revenue recognition
	Revenue is recognised to the extent that the right to consideration is obtained in exchange for performance. Payment received in advance of performance is deferred on the balance sheet as a liability and released as services are performed or products are exchanged as per the agreement with the customer.

	Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset's net carrying amount.
	Foreign currencies
	Transactions in currencies other than Sterling are recorded at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated foreign currencies are retranslated at the rates prevailing on the balance sheet date. Gains and losses arising on retranslation are included in the income statement for the period.
	On consolidation, the results of overseas operations are translated into sterling at rates approximating to those ruling when the transactions took place. All assets and liabilities of the overseas operations, including goodwill arising on the acquisition of those operations, are translated at the rate ruling at the balance sheet date. Exchange differences arising on translating the opening net assets at opening rate and the results of overseas operations at actual rate are recognised directly in equity (the "foreign exchange reserve").
	Taxation
	The tax expense represents the sum of the current tax and deferred tax.
	The current tax is based on taxable profit for the period. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The liability for current tax is calculated by using tax rates that have been enacted or substantively enacted by the balance sheet date.
	Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction which affects neither the tax profit nor the accounting profit.
	Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled. Deferred tax is charged or credited in the income statement, except when it relates to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity.

	Externally acquired intangible assets
	Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. The amortisation expense is included within the administrative expenses line in the consolidated income statement.
	Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques.

	Impairment of tangible and intangible assets excluding goodwill
	At each balance sheet date the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If there is such indication then an estimate of the asset's recoverable amount is performed and compared to the carrying amount.
	Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
	If the recoverable amount of an asset is estimated to be less that its carrying amount, the carrying amount of the asset is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset is carried at a re-valued amount, in which case the impairment loss is treated as a revaluation decrease.
	Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset in prior periods. A reversal of an impairment loss is recognised as income immediately, unless the relevant asset is carried at a re-valued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

	Provisions
	Provisions are recognised for liabilities of uncertain timing or amount that have arisen as a result of past transactions and are discounted at a pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability.
	Financial instruments
	Financial assets and financial liabilities are recognised on the balance sheet when the Group has become a party to the contractual provisions of the instrument
	Cash and cash equivalents
	Cash and cash equivalents comprise cash in hand, cash at bank and short term deposits with banks and similar financial institutions.
	Trade and other receivables
	Trade and other receivables do not carry any interest and are stated at their nominal value as reduced by appropriate allowances for estimated irrecoverable amounts.

	Financial liability and equity
	Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities.

	Trade and other payables
	Trade and other payables are non interest bearing and are stated at their nominal value.
	Equity instruments
	Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

	Share-based payments
	Where share options are awarded to employees, the fair value of the options at the date of grant is charged to the consolidated income statement over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each balance sheet date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition.
	Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to the consolidated income statement over the remaining vesting period.
	Where equity instruments are granted to persons other than employees, the consolidated income statement is charged with the fair value of goods and services received. Equity-settled share-based payments are measured at fair value at the date of grant except if the value of the service can be reliably established. The fair value determined at the grant date of equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Company's estimate of shares that will eventually vest.

	Critical accounting estimates and judgements
	The Group makes estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

	Impairment of goodwill
	The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate in order to calculate the present value of the cash flows - actual outcomes may vary. If the carrying amount exceeds the recoverable amount then impairment is made.

	Useful lives of intangible assets and property, plant and equipment
	Intangible assets and property, plant and equipment are amortised or depreciated over their useful lives. Useful lives are based on the management's estimates of the period that the assets will generate revenue, which are based on judgement and experience and periodically reviewed for continued appropriateness. Changes to estimates can result in significant variations in the carrying value and amounts charged to the consolidated income statement in specific periods.

	Share-based payments
	The Group utilised an equity-settled share-based remuneration scheme for employees. Employee services received, and the corresponding increase in equity, are measured by reference to the fair value of the equity instruments at the date of grant, excluding the impact of any non-market vesting conditions. The fair value of share options are estimated by using Black-Scholes valuation method as at the date of grant. The assumptions used in the valuation are described in note 12 and include, among others, the expected volatility, expected life of the options and number of options expected to vest.

	Determination of fair values of intangible assets acquired in business combinations
	The fair value of patents and trademarks acquired in a business combination is based on the discounted estimated royalty payments that would have been avoided as a result of the trademark or a patent being owned. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the asset.

	Income taxes
	The Group is subject to income tax in several jurisdictions and significant judgement is required in determining the provision for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax determination is uncertain. As a result, the Group recognises tax liabilities based on estimates of whether additional taxes and interest will be due. The Group believes that its accruals for tax liabilities are adequate for all open audit years based on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates and assumptions and may involve a series of complex judgments about future events. To the extent that the final tax outcome of such matters is different than the amounts recorded, the differences will impact income tax expense in the period in which such determination is made.

	Deferred taxation
	Deferred tax assets are recognised when it is judged more likely than not that they will be recovered.

	Equity reserves
	Share capital is determined using the nominal value of shares that have been issued. The share premium account represents premiums received on the initial issuing of the share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, net of any related income tax benefits. The share based payment reserve represents the cumulative amount which has been expensed in the income statement in connection with share based payments, less any amounts transferred to retained earnings on the exercise of share options. Retained earnings include all current and prior period results as disclosed in the income statement

	Going Concern
	The financial report for the period ended 31 December 2013 has been prepared on a going concern basis.

Turnover and segmental analysis

The Company has not generated any revenues from external customers during the period.

An operating segment is a distinguishable component of the Company that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Company's chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available. The chief operating decision maker has defined that the Company's only reportable operating segment during the period is mining.

Subject to further acquisitions the Company expects to further review its segmental information during the forthcoming financial year.

In respect of the total assets, £3,247,000 (2012: £982,000) arise in the UK, and £1,000,000 (2012: £2,423,000) arise in Canada, £7,449,000 arise in Tanzania (2012: £6,238,000), and £816,000 arise in Switzerland (2012: £Nil).

3	Operating loss	18 Months ended 31 December 2013 £000's	Year ended 30 June 2012 £000's

	Loss from operations has been arrived at after charging:
	Directors fees	324	167
	Salaries and wages	87	64
	Audit fees	16	15
	Share-based payments	240	69

	Amounts payable to auditors and their associates in respect of both audit and non-audit services:
	Audit services - statutory audit - Chapman Davis LLP	16	15
		16	15

4	Employee information and directors emoluments
		18 Months ended 31 December 2013 £000's	Year ended 30 June 2012 £000's
	Staff information
	The average number of employees (excluding executive directors) was :	1	1

	Their aggregate remuneration comprised :	£000's	£000's
	Wages and salaries	87	64
	Total	87	64

	Directors' remuneration
	Total	422	236

18 Months ended 31 December 2013	Salary and fees £000's	Share-based payments £000's	Total £000's
Neil Ritson	138	49	187
David Lenigas	150	49	199
Sandy Barblett	36	-	36
	324	98	422

Year ended 30 June 2012	Salary and fees £000's	Share-based payments £000's	Total £000's
Neil Ritson	65	31	96
David Lenigas	60	31	91
Sandy Barblett	24	7	31
Kiran Morzaria (*)	18	-	18
	167	69	236

(*) Resigned as a director on 26 March 2012.

5	Taxation	18 Months ended 31 December 2013 £000's	Year ended 30 June 2012 £000's
	Current tax expense
	UK corporation tax and income tax of overseas operations on profits for the period	-	-
	Total income tax expense	-	-
	The reasons for the difference between the actual tax charge for the period and the standard rate of corporation tax in the UK applied to profits for the year are as follows:

	Loss for the period	(3,117)	(1,017)
	Standard rate of corporation tax in the UK	23/24%	24/26%
	Loss on ordinary activities multiplied by the standard rate of corporation tax	(732)	(260)
	Expenses not deductible for tax purposes	446	17
	Future income tax benefit not brought to account	286	243
	Current tax charge for period	-	-

	No deferred tax asset has been recognised because there is uncertainty of the timing of suitable future profits against which they can be recovered.

Finance costs

18 Months ended

31 December 2013

£000's

Year ended

30 June 2012

£000's

Equity Line Facility commitment fee (Note 17)

100

Finance revenue

18 Months ended

31 December 2013

£000's

Year ended

30 June 2012

£000's

Interest on cash deposits

8	Loss per share	18 Months ended 31 December 2013 £000's	Year ended 30 June 2012 £000's

	The calculation of loss per share is based on the loss after taxation divided by the weighted average number of shares in issue during the period:
	Net loss after taxation (£000's)	(3,117)	(1,017)
	Number of shares

	Weighted average number of ordinary shares for the purposes of basic loss per share (millions)	3,960.3	2,435.3
	Basic and diluted loss per share (expressed in pence)	(0.08)	(0.04)
	As inclusion of the potential ordinary shares would result in a decrease in the earnings per share they are considered to be anti-dilutive, as such, a diluted earnings per share is not included.

9	Intangible assets
		Deferred exploration expenditure £000's	Total £000's
	Cost As at 30 June 2011	3,756	3,756

	Additions	4,905	4,905
	Disposal	-	-
	As at 30 June 2012	8,661	8,661

	Additions	1,446	1,446
	Disposals	-	-
	As at 31 December 2013	10,107	10,107
	Accumulated amortisation and impairment As at 30 June 2011	-	-

	Impairment charge	-	-
	Balance at 30 June 2012	-	-

	Impairment charge	1,658	1,658
	Balance at 31 December 2013	1,658	1,658
	Net book value As at 31 December 2013	8,449	8,449
	As at 30 June 2012	8,661	8,661

Impairment Review

At 31 December 2013, the directors have carried out an impairment review and have considered that an impairment write-down of £1,658,000 is required against the Company's 28.56% direct working interest in all of Reef Resources Limited's (Reef) Ontario properties (as detailed in the Chief Executive's Report). This impairment charge is as a result of Reef's unsolicited offer to repurchase the Company's entire 28.56% interest in November 2013, subject to Reef obtaining the necessary financing. The Company after discussions are looking to attain approximately CAD$1.8 - $2million, and as a result of the discussions and preliminary valuations there mentioned, the Board has taken the prudent view to impair the carrying value of the interest in Reef down to approximately £1million. (2012: nil).

The directors are of the opinion that after the impairment charge, the carrying value is now stated at fair value.

10	Available for sale financial assets
		31 December 2013	30 June 2012
	Investment in unlisted securities	£000's	£000's
	Valuation at beginning of the period	-	-
	Additions at cost	816	-

	Valuation at the end of the period	816	-

	On 21 May 2013, the Company completed the acquisition of a 15% shareholding in Pan Minerals Oil & Gas A.G.("Pan Minerals") , a company incorporated and resident in Switzerland, with investments in Africa, for a total consideration of £500,000, of which £200,000 was cash consideration and £300,000 by way of the issue of 60million Ordinary shares in Solo. On 18 October 2013, the Company acquired a further 4.9% shareholding in Pan Minerals for a cash consideration of US$500,000 (£316,000). Pan Minerals is not listed on any stock exchange.

11	Investment in subsidiaries
		31 December 2013	30 June 2012
		£000's	£000's
	As at 1 July	-	-
	Additions	-	-
	At 31 December	-	-

	The subsidiaries of Solo Oil Plc, all of which are Dormant, and have been since incorporation, are as follows:

	Name	Country of incorporation	Proportion of ownership interest

	Solo Oil International Limited	UK	100%

12	Trade and other receivables
		31 December 2013	30 June 2012
	Current trade and other receivables	£000's	£000's
	Trade debtors	-	-
	Prepayments	52	29
	Other debtors	1,239	841
		1,291	870

	The directors consider that the carrying amount of trade and other receivables approximates to their fair value.

13	Trade and other payables
		31 December 2013	30 June 2012
	Current trade and other payables	£000's	£000's
	Trade payables	66	852
	Other creditors	32	258
	Accruals	18	60
		116	1,170

	The directors consider that the carrying amount of trade payables approximates to their fair value.

14	Share capital
				Number of shares	Nominal value
					£000's
	a) Called up, allotted, issued and fully paid: Ordinary shares of 0.01p each
	As at 30 June 2011			2,331,324,634	233
	13 Dec 2011 - ELF commitment fee at 0.72p			13,799,990	1
	6 Jan 2012 - ELF for cash at 0.69p			59,322,034	6
	1 Feb 2012 - ELF for cash at 0.65p			115,384,615	7
	28 Feb 2012 - ELF for cash at 0.65p			38,461,538	4
	18 May 2012 - ELF for cash at 0.464p			32,301,887	3
	22 June 2012 - ELF for cash at 0.424p			30,288,648	3
	29 June 2012 - ELF for cash at 0.45p			66,666,667	7
	As at 30 June 2012			2,687,550,023	269

	26 July 2012 - ELF for cash at 0.40p			90,844,685	9
	9 August 2012 - Placing for cash at 0.30p			500,000,000	50
	7 December 2012 - Issue for cash at 0.01p			150,000,000	15
	11 January 2013 - Placing for cash at 0.45p			333,333,333	33
	4 March 2013 - Placing for cash at 0.50p			200,000,000	20
	11 March 2013 - Placing for cash at 0.50p			200,000,000	20
	15 March 2013 - Placing for cash at 0.40p			375,000,000	38
	21 May 2013 - Non- cash issue on acquisition of Pan Minerals at 0.30p			60,000,000	6
	As at 31 December 2013			4,596,728,041	460

	During the period 1,909million shares were issued (2012: 356million)

	b) Deferred shares
	Deferred shares of 0.69 pence each (2012: 265,324,634)			265,324,634	1,831

	Total share options in issue
	During the year68.5 million options were granted (2012: 28 million).
	As at 31 December 2013 the options in issue were:
	Exercise Price	Expiry Date	Options in Issue 31 December 2013
	1.54p	30 April 2018	7,000,000
	0.5p	31 December 2020	204,000,000
	0.5p	31 December 2015	28,000,000
	0.5p	31 December 2020	68,500,000
			307,500,000
	No options were exercised during the period (2012: nil).
	20 million options lapsed during the period (2012: nil). No options were cancelled during the period (2012: nil), 204million options had their expiry date extended to 31 December 2015 from 21 December 2012.

	Total warrants in issue
	During the period, 375million warrants were issued (2012: nil).
	393,550,000 warrants lapsed or were cancelled or exercised during the year (2012: nil).
	As at 31 December 2013 there were nil warrants in issue. (2012:18,550,000)

15	Share based payment
	During the period the Company issued options and warrants to investors as part of equity placements.
		31 December 2013		30 June 2012
		Weighted	Number	Weighted	Number
		average		average
		exercise price (pence)		exercise price (pence)
	Outstanding at the beginning of the period	0.6	277,550,000	0.6	249,550,000
	Granted during the period - warrants	0.4	375,000,000	-	-
	Granted during the period - options	0.5	68,500,000	0.5	28,000,000
	Forfeited during the period	-	-	-	-
	Cancelled during the period - options	-	-	-	-
	Exercised during the period	-	-	-	-
	Lapsed during the period - options	(0.5)	(20,000,000)
	Lapsed during the period - warrants	(0.45)	(393,550,000)	-	-
	Outstanding at the end of the period (options and warrants)	0.5	307,500,000	0.6	277,550,000

	The exercise price of options and warrants outstanding at the end of the period ranged between 1.54p and 0.50p and their weighted average contractual life was 6.5 years (2012: 3.3 years).

	The weighted average fair value of each option granted during the period was 0.5p (2012: options 0.5p).

	The Group used the Black-Scholes model to determine the value of the options and the inputs were as follows:
		Issue 20/06/2012		Issue 23/11/12
	Share price at grant (pence)	0.43		0.43
	Fair Value price at grant (pence)	0.25		0.35
	Expected volatility (%)	85.5%		89.5%
	Expected life (years)	3.5 years		8.1 years
	Risk free rate (%)	4.0%		4.0%
	Expected dividends (pence)	nil		Nil

	Expected volatility was determined by using the volatility rate used by listed companies in similar industries and those companies with similar sizes.

	The total share-based payment expense in the period for the Company was £240,000 expense (2012: £69,000 expense) consisting of: - £240,000 expense to the income statement (2012: £69,000 expense) , and a charge of £nil to the share premium reserve (2012: £nil charge) relating to new options to employees and directors, and consultants. £84,000 credit (2012: £nil credit) relating to exercise and expiration of previously issued share options, taken directly to retained earnings.

	Employee Benefit Trust
	The Company established on 7 December 2012, an employee benefit trust called the Solo Oil Employee Benefit Trust ("EBT") to implement the use of the Company's existing share incentive plan over 5% of the Company's issued share capital from time to time in as efficient a manner as possible for the beneficiaries of that plan. The EBT is a discretionary trust for the benefit of directors and employees of the Company and its subsidiaries. Accordingly, the trustees of the EBT subscribed for 150,000,000 new ordinary shares of 0.01p each in the Company, at par value per share at an aggregate cost to the Company of £15,000, such shares representing 4.58% of the existing issued share capital of the Company (at that date). The shares held in the EBT are intended to be used to satisfy future awards made by the Company's Remuneration Committee under the share incentive scheme, as detailed in the Company's AIM admission document.

16	Financial instruments
	The Company is exposed through its operations to one or more of the following financial risks:
	· Fair value or cash flow interest rate risk
	· Foreign currency risk
	· Liquidity risk
	· Credit risk
	Policy for managing these risks is set by the Board. The policy for each of the above risks is described in more detail below.
	Fair value and cash flow interest rate risk
	Currently the Company does not have external borrowings. However, the Company has a policy of holding debt at a floating rate. The directors will revisit the appropriateness of this policy should the Company's operations change in size or nature. Operations are not permitted to borrow long-term from external sources locally.
	Foreign currency risk
	Foreign exchange risk arises because the Company has operations located in various parts of the world whose functional currency is not the same as the functional currency in which the company's investments are operating. The Company's net assets are exposed to currency risk giving rise to gains or losses on retranslation into sterling. Only in exceptional circumstances will the Company consider hedging its net investments in overseas operations as generally it does not consider that the reduction in volatility in consolidated net assets warrants the cash flow risk created from such hedging techniques.
	Liquidity risk
	The liquidity risk of each entity is managed centrally by the treasury function. Each operation has a facility with treasury, the amount of the facility being based on budgets. The budgets are set locally and agreed by the board annually in advance, enabling the cash requirements to be anticipated. Where facilities of entities need to be increased, approval must be sought from the finance director. Where the amount of the facility is above a certain level agreement of the board is needed.
	All surplus cash is held centrally to maximise the returns on deposits through economies of scale. The type of cash instrument used and its maturity date will depend on the forecast cash requirements.
	Credit risk
	The Company is mainly exposed to credit risk from credit sales. It is Company policy, implemented locally, to assess the credit risk of new customers before entering contracts. Such credit ratings are taken into account by local business practices.
	The Company does not enter into complex derivatives to manage credit risk, although in certain isolated cases may take steps to mitigate such risks if it is sufficiently concentrated.

Equity Line Facility ("ELF")

The Company secured a Equity Line Facility ("ELF") on 10 November 2011 with Dutchess Opportunity Cayman Fund Ltd ("Dutchess"), which allowed the Company to draw down up to £10million over a 3 year period. The funding was available to drawdown at any time in tranches, by way of subscription for new ordinary shares in the Company, priced at a 5 per cent discount to market price, based on the average daily price for the three days prior to the drawdown request.

The Company incurred a £100,000 commitment fee on securing the facility, which was settled by the issue of 13.8million ordinary shares in the Company.

During the period to 30 June 2012, the Company made 6 drawdown requests totalling £1,928,333, settled by the issue of 342,425,389 ordinary shares in the Company.

During the period to 31 December 2013, a further drawdown of £363,000 was made, with the issue of 90,844,685 ordinary shares, before the termination of the facility under mutual agreement between the parties on 18 October 2012.

18	Related party transactions
	There were no transactions between the parent and its subsidiary, which are related parties, during the period. Details of director's remuneration, being key personnel, are given in note 4. There are no other related party transactions during the year.
	Remuneration of Key Management Personnel The remuneration of the directors, and other key management personnel of the Company, is set out below in aggregate for each of the categories specified in IAS24 Related party Disclosures.
		18 Months ended	Year ended
		31 December 2013	30 June 2012
		£'000s	£'000s
	Short-term employee benefits	411	231
	Share-based payments	150	69
		551	300

19	Ultimate controlling party
	In the opinion of the directors there is no controlling party.

20	Retirement benefit scheme
	The Company does not operate either a defined contribution or defined benefit retirement scheme.

21	Commitments
	As at 31 December 2013, the Company had no material commitments.

Post balance sheet event

On 5 February 2014, the Company entered into a Binding Heads Of Agreement ("HOA") to acquire a 10% interest in Horse Hill Development Ltd, a special purpose company, which holds the rights to 65% participating interest and operatorship, in licence PEDL137 onshore in the UK Weald Basin, for a total of £600,000, broken down into 3 stage payments, of £13,333 immediately, £66,667 on completion of all legal documentation and £520,000 of cash calls for the drilling of the well.