Final Results for the Year Ended 31 December 2014

RNS Number : 6841N

Clontarf Energy PLC

20 May 2015

 

20^th May 2015

Clontarf Energy plc

("Clontarf" or "the Company")

Final Results for the Year Ended 31 December 2014

Clontarf Energy, the oil and gas exploration company focused on Ghana, today announces its results for the year ending 31 December 2014.

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

Clontarf Energy plc

John Teeling, Chairman                                                                                        [phone]

David Horgan, Director

Nominated Adviser and Broker

Northland Capital Partners Limited

David Hignell / Gerry Beaney                                                                            [phone]

John Howes / Mark Treharne (Broking)

Public Relations

Blytheweigh                                                                                                             [phone]

Tim Blythe                                                                                                                 [phone]

Halimah Hussain                                                                                                     [phone]

Camilla Horsfall                                                                                                       [phone]

PSG Plus

Aoife Ross                                                                                                                  [phone]

Alan Tyrrell                                                                                                                [phone]

Statement Accompanying the Final Results

Recent years have not been kind to junior exploration ventures. The sector is used to cycles of disinterest but the current cycle has been long and deep. For the past couple of years there has been low levels of buying interest. Liquidity seems to have reduced in AIM listed shares. The occasional deal is sellers either forced or capitulating. Market makers try to hold as little inventory as possible so any sellers can cause share price falls. When good news is announced, the share price rises, only to fall back again as sellers see an opportunity to exit.  Some share prices have fallen by upwards of 95 per cent making fundraising a dilutive exercise. That is, if finance is available at all.  Outside of family and friends investors tend to take a short term approach. Many stock exchange listed explorers on AIM in the UK, ASX in Australia and on the TSX-V in Canada raise funds just to keep the company alive. Maintaining an AIM listing can cost in excess of £150,000 a year in overheads alone.

The 50% fall in the oil price in late 2014 and early 2015 was a further blow to weakened corporate structures. Many exploration ventures which looked good at US$100 a barrel of oil struggle at US$60 a barrel.

Is it total doom and gloom? No, by our nature, explorers are optimistic. I, along with others, recognise the early shoots of spring. Trading volumes are increasing in exploration stocks. There is a visible increase in interest from the media and potential investors. Speculators having done well from bonds through blue chips to industrials are finally starting to throw funds at more speculative ventures. AIM listed biotech and meditech ventures are being funded by new equity raises. Two other indicators are also positive.  The Great Recession is over and world growth has returned.  The price of oil appears to be recovering.

What does this mean for shareholders in Clontarf? When forced selling stops there could be a significant improvement in the share price as the sector recovers.

Clontarf Operations

The primary focus of Clontarf is on the Tano 2A block offshore Ghana (60% Clontarf, 30% Petrel, 10% local interests). This block, where an agreement was signed in 2008 with the local oil authorities, covers 1,500 plus sq km of good exploration ground on the landward side of the giant Jubilee discoveries. Clontarf and partners spent US$2 million on the block. The Cabinet and Parliament of Ghana never approved the Ghana National Petroleum Corporation agreement. In March 2014 a US company, CAMAC, which is Nigerian controlled, out of the blue got rapid approval for a licence which covered about a third of our licence area. High Court proceedings followed. An agreement was reached between all parties. The co-ordinates of the Tano 2A block were clarified to 1,500 sq km and rapid confirmation was promised. This has not happened and none of the options offered by the State are acceptable.  We continue to engage with the parties concerned and further updates will be made to shareholders as soon as practicable.

Peru is our other active interest. We hold a revenue royalty of 3% on any production from Block 183 up to a maximum of US$5 million on each of two discoveries.  A company, called Peru Oil & Gas Exploration Limited (POGEL), has a contract to supply hydrocarbons to Rurelec, a company building power stations in the area.  There is a large and growing power supply deficit in the region.  POGEL indicated to Clontarf that a joint venture to drill the block is being discussed with a South American oil company. It will be some time, if ever, before Clontarf sees a cash flow.

Our Bolivian interests are fully written off but are alive.  Anything that emerges from the title and legal morass in the country will be a bonus.

Corporate Activity

We raised £121,500 at 0.75p in July 2014 and £500,000 at 0.7p in October 2014 respectively. We restructured the balance sheet converting South American loans into equity. Directors converted monies due into equity. There is sufficient cash in Clontarf to fund ongoing activities.

In the year under review, and to date in 2015, there has been interest in Clontarf, mainly from intermediaries. One group has spent several months trying to put together a strategy and structure to invest in and develop Clontarf.  We encourage all approaches and will provide further updates to shareholders where necessary.

Future

Clontarf has survived and will continue to survive. We are very comfortable that we have a legal position in Ghana. Litigation is time consuming, tedious and expensive. It is a last resort. Having been to the courts in 2014 we are reluctant to repeat the process but it may be necessary.

Your directors continue to look at strategic options for Clontarf.

John Teeling

Chairman

19^th May 2015

__________________________________________________________________________________

CLONTARF ENERGY PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2014

	2014	2013
CONTINUING OPERATIONS	£	£
REVENUE	-	-
Cost of sales	-	-
GROSS PROFIT	-	-
Administrative expenses	(244,303)	(667,370)
Impairment of evaluation and exploration assets	-	(2,473,538)
OPERATING LOSS	(244,303)	(3,140,908)
Finance revenue	51	93
Finance costs	(29,944)	(36,462)
LOSS BEFORE TAXATION	(274,196)	(3,177,277)
Income tax expense	-	-
LOSS FOR THE YEAR AND TOTAL
COMPREHENSIVE INCOME	(274,196)	(3,177,277)
LOSS PER SHARE - Basic and diluted	(0.09p)	(1.59p)

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2014

	2014	2013
	£	£
ASSETS:
NON CURRENT ASSETS
Intangible assets	3,058,916	2,963,916
	3,058,916	2,963,916
CURRENT ASSETS
Other receivables	10,138	5,094
Cash and cash equivalents	396,610	29,330
	406,748	34,424
TOTAL ASSETS	3,465,664	2,998,340
LIABILITIES:
CURRENT LIABILITIES
Trade payables	(79,351)	(190,429)
Other payables	(710,567)	(1,162,717)
	(789,918)	(1,353,146)
NON CURRENT LIABILITIES
Loans	-	(576,328)
	-	(576,328)
TOTAL LIABILITIES	(789,918)	(1,929,474)
NET ASSETS	2,675,746	1,068,866
EQUITY
Called-up share capital	1,135,564	500,461
Share premium	10,493,259	9,248,336
Retained earnings - (deficit)	(9,148,159)	(9,010,518)
Share based payment reserve	195,082	330,587
TOTAL EQUITY	2,675,746	1,068,866

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2014

	Called-up		Share Based
	Share	Share	Payment	Retained
	Capital	Premium	Reserve	Deficit	Total
	£	£	£	£	£
At 1 January 2013	500,461	9,248,336	330,587	(5,833,241)	4,246,143
Loss for the year	-	-	-	(3,177,277)	(3,177,277)
At 31 December 2013	500,461	9,248,336	330,587	(9,010,518)	1,068,866
Share options granted	-	-	1,050	-	1,050
Share options expired	-	-	(129,977)	129,977	-
Warrants expired	-	-	(6,578)	6,578	-
Issue of shares	635,103	1,274,268	-	-	1,909,371
Share issue expenses	-	(29,345)	-	-	(29,345)
Loss for the year	-	-	-	(274,196)	(274,196)
At 31 December 2014	1,135,564	10,493,259	195,082	(9,148,159)	2,675,746

Share premium

The share premium reserve comprises of a premium arising on the issue of shares.

Share based payment reserve

The share based payment reserve arises on the grant of share options under the share option plan.

Retained deficit

Retained deficit comprises of losses incurred in 2014 and prior years.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2014

	2014	2013
	£	£
CASH FLOW FROM OPERATING ACTIVITIES
Loss for financial year	(274,196)	(3,177,277)
Finance costs recognised in loss	29,944	36,462
Finance revenue recognised in loss	(51)	(93)
Exchange movement	(5,314)	(1,561)
Share options granted	1,050	-
Impairment	-	2,473,538
	(248,567)	(668,931)
MOVEMENTS IN WORKING CAPITAL
Increase in payables	53,315	150,063
(Increase)/Decrease in trade and other receivables	(5,044)	5,322
CASH USED BY OPERATIONS	(200,296)	(513,546)
Finance costs	(29,944)	(36,462)
Finance revenue	51	93
NET CASH GENERATED BY OPERATING ACTIVITIES	(230,189)	(549,915)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for intangible assets	-	(97,524)
NET CASH USED IN INVESTING ACTIVITIES	-	(97,524)
CASH FLOWS FROM FINANCING ACTIVITIES
Increase in loans	-	576,328
Proceeds from issue of shares	621,500	-
Share issue expenses	(29,345)	-
NET CASH GENERATED BY FINANCING ACTIVITIES	592,155	576,328
NET DECREASE IN CASH AND CASH EQUIVALENTS	361,966	(71,111)
Cash and cash equivalents at beginning of the financial year	29,330	98,880
Effect of exchange rate changes on cash held in
foreign currencies	5,314	1,561
Cash and cash equivalents at end of the financial year	396,610	29,330

Notes:

1.    ACCOUNTING POLICIES

There were no changes in accounting policies from those used to prepare the Group's Annual Report for financial year ended 31 December 2013. The financial statements have been prepared in accordance with International Financial Reporting Standards and IFRSs as adopted by the European Union and in accordance with the Companies Act 2006.

2.    LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the year available 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):

	2014	2013
	£	£
Numerator
For basic and diluted EPS	(274,196)	(3,177,277)
Denominator
For basic and diluted EPS	298,858,400	200,184,469
Basic EPS	(0.09p)	(1.59p)
Diluted EPS	(0.09p)	(1.59p)

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

3.    GOING CONCERN

The Group incurred a loss for the year of £274,196 (2013: £3,177,277) and had net current liabilities of £383,170 (2013: £1,318,722) at the balance sheet date. These conditions 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 £710,567 owed to directors in respect of directors' remuneration due at the balance sheet date. The directors have confirmed that they will not seek settlement of these amounts in cash for a period of at least one year after the date of approval of the financial statements or until the group has generated sufficient funds from its operations after paying its third party creditors.

The Group had a cash balance of £396,610 at the balance sheet date. Cashflow projections prepared by the directors indicate that the funds available are sufficient to meet the obligations of the Group for a period of at least twelve months from the date of approval of these financial statements.

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 was unable to continue as a going concern.

4.    INTANGIBLE ASSETS

	2014	2013
Exploration and evaluation assets:	£	£
Cost:
At 1 January	8,010,461	7,787,937
Additions during the year	95,000	222,524
At 31 December	8,105,461	8,010,461
Impairment:
At 1 January	5,046,545	2,573,007
Provision for impairment	-	2,473,538
At 31 December	5,046,545	5,046,545
Carrying Value:
At 1 January	2,963,916	5,214,930
At 31 December	3,058,916	2,963,916
SEGMENTAL ANALYSIS	2014	2013
	£	£
Peru	2,473,538	2,473,538
Ghana	585,378	490,378
	_________	_________
	3,058,916	2,963,916

On 15 May 2013, the company signed an agreement with an unrelated third party, Peru Oil and Gas Exploration Limited (POGEL). Under the agreement POGEL, an energy investment company, has undertaken responsibility to put up performance bonds and conduct contractual work on the Exploration and Development Contracts on Peruvian Blocks 183 and 188. Clontarf Energy plc converted its interest in Blocks 183 and 188 to an overriding royalty of 3% on production from any commercial discovery.

On 12 August 2013, Rurelec Plc, an AIM listed energy provider in South America, entered into an agreement with POGEL to purchase gas from Block 183 when and if gas is produced. Clontarf holds a 3% overriding royalty on production from any commercial discovery. The royalty payment is capped at US$5 million per structure and US$10 million in total for the block.

Subsequently in 2013, POGEL released Block 188. Due to Block 188 being released the directors decided to provide against the carrying value of the Peruvian assets. Accordingly an impairment provision of £2,473,538 had been recorded by the Group in the prior year. This represented the total carrying value of Block 188 as the recoverable amount is £Nil.

4.            INTANGIBLE ASSETS (CONTINUED)

In 2014, the Group reached an agreement with the Ghanaian authorities on the specific revised coordinates of the signed petroleum agreement on a licence block in the Tano area of Ghana. Clontarf Energy PLC awaits ratification of the amended Petroleum Agreement by Cabinet and Parliament.

Exploration and evaluation assets relates to expenditure incurred in prospecting and exploration for oil and gas in Peru and Ghana. The directors are aware that by its nature there is an inherent uncertainty in such development expenditure as to the value of the asset. 

The realisation of these intangible assets is dependent on the discovery and successful development of economic oil and gas reserves which is affected by the uncertainties outlined above and risks outlined below:

·      licence obligations

·      requirement for further funding

·      geological and development risks

·      title to assets

·      political risk

Should this prove unsuccessful the value included in the balance sheet would be written off to the statement of comprehensive income.

5.    TRADE PAYABLES

	2014	2013
	£	£
Trade payables	59,351	170,429
Other accruals	20,000	20,000
	79,351	190,429

6.    OTHER PAYABLES

	2014	2013
	£	£
Amounts due to directors	710,567	1,162,717
	710,567	1,162,717

Other payables relate to amounts due to directors' accrued but not paid at year end. The amount consists of unpaid remuneration of £710,567 (2013: £753,335) and loans of £Nil (2013: £409,382).   

7.    OTHER LOANS

	2014	2013
	£	£
Loans repayable	-	576,328
	-	576,328

During 2013 loans were received by the company from unrelated third party South American lenders. The lenders had agreed that they would accept ordinary shares in Clontarf Energy plc, the parent company, in lieu of cash repayment of amounts due. The loans bear interest at 10% per annum.

On 17 July 2014, Clontarf Energy plc announced that 79,767,067 ordinary shares at a price of 0.75p per share were issued to the South American lenders in settlement of the total principal amount and all outstanding interest

8.    CALLED-UP SHARE CAPITAL

		2014	2013
		£	£
Authorised:
800,000,000 Ordinary shares of 0.25p each		2,000,000	2,000,000
Allotted, called-up and fully paid:
	Number	Share Capital	Share Premium
		£	£
At 1 January 2013	200,184,469	500,461	9,248,336
Issued during the year	-	-	-
At 31 December 2013	200,184,469	500,461	9,248,336
Issued during the year	254,041,312	635,103	1,274,268
Share issue expenses	-	-	(29,345)
At 31 December 2013	454,225,781	1,135,564	10,493,259

Movements in issued share capital

On 14 January 2014 a total of 7,231,975 shares were issued at a price of 1.3 pence per share in settlement of outstanding professional fees amounting to £94,016.

On 17 July 2014 a total of 79,767,067 shares were issued at a price of 0.75 pence per share to South American lenders in settlement of the total principal amount and interest outstanding on the loans in the subsidiary company Hydrocarbon Exploration Limited.

On 21 July 2014 a total of 16,200,000 shares were placed at a price of 0.75 pence per share. Proceeds were used to provide additional working capital and fund development costs.

On 21 July 2014 a total of 79,413,699 shares were issued at a price of 0.75 pence per share to directors in settlement of unpaid directors' remuneration and loans.

On 28 October 2014 a total of 71,428,571 shares were placed at a price of 0.70 pence per share. Proceeds were used to provide additional working capital and fund development costs.

Share Options

A total of 8,940,000 share options were in issue at 31 December 2014 (2013: 9,940,000). These options are exercisable, at prices ranging between 0.725p and 17p, up to seven years from the date of granting of the options unless otherwise determined by the board.

Warrants

On 6 April 2011 a total of 649,616 warrants were granted to the company's broker in relation to a share placing.  These warrants had a fair value of £6,578.  The warrants expired in the current year and have been written off.

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

A total number of 8,940,000 share options were in issue at 31 December 2014 (2013: 9,940,000) with a weighted average exercise price of 4.31p and a weighted average remaining contractual life of 2.49 years.  These options are exercisable, at prices ranging between 0.725p and 17p up to seven years from the date of granting of the options unless otherwise determined by the board.

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

	2014	2014
	Options	Weighted Average Exercise Price in Pence
Outstanding at beginning of year	9,940,000	6.39
Expired during the year	(1,500,000)	(2.55)
Granted during the year	500,000	0.04
Outstanding and exercisable at the end of the year	8,940,000	4.31

10.  ANNUAL GENERAL MEETING

The Company's Annual General Meeting will be held on 22 June 2015 at the Canal Court Hotel, Merchants Quay, Newry, Co. Down, United Kingdom, BT35 8HF at 11am.

11.  GENERAL INFORMATION

The financial information set out above does not constitute the Company's financial statements for the year ended 31 December 2014 or the year ended 31 December 2013. The financial information for 2013 is derived from the financial statements for 2013 which have been delivered to the Registrar of Companies. The auditors had reported on the 2013 statements; their report was unqualified with an emphasis of matter in respect of considering the adequacy of the disclosures made in the financial statements concerning the valuation of intangible assets, and did not contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The financial statements for 2014 will be delivered to the Registrar of Companies.

A copy of the Company's Annual Report and Accounts for 2014 will be mailed shortly only to those shareholders who have elected to receive it. Otherwise, shareholders will be notified that the Annual Report will be available on the website www.clontarfenergy.com . Copies of the Annual Report will also be available for collection from the Company's registered office, 20-22 Bedford Row, London WC1R 4JS.

 

END

 

 

FR GGUPWAUPAGAB