Clontarf Energy plc
("Clontarf" or "the Company")
Final Results for the Year Ended 31 December 2016
Clontarf Energy, the oil and gas exploration company focused on Ghana, today announces its results for the year ending 31 December 2016.
For further information please visit http://clontarfenergy.com or contact:
Clontarf Energy plc
John Teeling, Chairman +353 (0) 1 833 2833
David Horgan, Director
Nominated Adviser and Broker
Northland Capital Partners Limited
Tom Price / Gerry Beaney (Corporate Finance) +44 (0) 20 3861 6625
John Howes (Broking)
Public Relations
Blytheweigh +44 (0) 207 138 3204
Nick Elwes +44 (0) 783 185 1855
Camilla Horsfall +44 (0) 787 184 1793
Teneo PSG
Ciaran Flynn +353 (0) 1 661 4055
Alan Tyrrell +353 (0) 1 661 4055
Statement Accompanying the Final Results
Investors in junior exploration shares have had a tough time in recent years. The lack of buying interest in AIM listed exploration ventures has gone on for nine years. The cycle will turn. The critical factor is to be among those ventures which are placed to benefit from an upturn. Investors good enough or lucky enough to select the right vehicles will profit handsomely.
Clontarf Energy has ensured survival by maintaining their exploration interests and by raising new funds when available. We have active interests and are well funded for the present. We have not relied totally on our legacy ventures and in recent years have examined numerous new ventures and directions. I report below on one such venture, applications for two offshore blocks in Equatorial Guinea, West Africa.
Ghana
The focus of our activities has been and remains, a 60% interest in an onshore/offshore hydrocarbon licence in Ghana - the Tano 2A block. The saga surrounding this licence since first agreed in 2008 continues. Over the years there have been disputes, discussions and resolutions over a series of issues relating to co-ordinates, ownership, work programmes. During the entire time we have continued to talk. In the past year a number of issues have been agreed. Agreement was reached on a major item, the acreage and co-ordinates of the licence area. We were pleased with the outcome. Discussions took place on a revised work programme. Again we are happy with the progress in this area. Our 2008 and 2010 agreements had attractive terms which do not exist in current licencing terms. We are reluctant to accept any changes in these terms as to do so would increase costs. Recent elections returned to power the party who originally agreed the terms. We have good working relationships with politicians in this party.
Certain issues remain outstanding. We are working to solve them. At $50 a barrel oil we believe the licence area holds significant potential.
Peru
The 3% revenue royalty on Block 183 onshore Peru is looking more interesting. Work done by Clontarf and lately by Union Oil & Gas, the operator, has identified two large structures which Union believe could contain up to 2.2 trillion cubic feet of gas (tcf). There is a large and growing market for power in this part of Peru. Plans exists to use any gas discoveries to generate power.
Time has elapsed since Clontarf entered into a joint venture on the block. The initial partner, POGEL, assigned the block to Union. Permits were obtained by Clontarf for the environmental work done. These need to be re-issued. Once issued a focused seismic campaign will identify drill sites for drilling in either 2018 or more likely 2019.
Bolivia
Clontarf inherited three projects in Bolivia. These were nationalised in 2006. Because of this and litigation the Bolivian interests are carried at zero value on the Clontarf balance sheet. Our refusal to accept nationalisation and a declaration of force majeure on work programmes were notified to the Bolivian authorities. There is limited ongoing contact.
New Projects
An opportunity has arisen to acquire offshore licences in Equatorial Guinea. Discussions have taken place in the capital and in external locations. The geology is good. There are discoveries and production in the licence block area. Licencing terms are tough. We have applied for Block EG-23 and EG-21. EG-23 is in shallow water and has had a few wells. EG-21 has had a number of unsuccessful wells. Clontarf specialists believe that modern analysis techniques on available data will reveal new targets.
Future
Clontarf will continue to engage with the authorities in Ghana. We are in a strong legal position. We are pleased to note the progress is being made in Peru. But, we need to reinvigorate the Company. We continue to examine proposals for new projects, new directions and new personnel. We are well financed for our current activities.
John Teeling
Chairman
17th May 2017
__________________________________________________________________________________
CLONTARF ENERGY PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015
CONTINUING OPERATIONS £ £
REVENUE - -
Cost of sales - -
GROSS PROFIT - -
Administrative expenses (199,628) (205,142)
OPERATING LOSS (199,628) (205,142)
Finance revenue - 605
LOSS BEFORE TAXATION (199,628) (204,537)
Income tax expense - -
LOSS FOR THE YEAR AND TOTAL
COMPREHENSIVE INCOME (199,628) (204,537)
LOSS PER SHARE - Basic and diluted (0.04p) (0.05p)
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2016
2016 2015
£ £
ASSETS:
NON CURRENT ASSETS
Intangible assets 3,131,779 3,098,916
3,131,779 3,098,916
CURRENT ASSETS
Other receivables 5,273 5,198
Cash and cash equivalents 677,198 225,916
682,471 231,114
TOTAL ASSETS 3,814,250 3,330,030
LIABILITIES:
CURRENT LIABILITIES
Trade payables (53,102) (58,254)
Other payables (890,567) (800,567)
(943,669) (858,821)
TOTAL LIABILITIES (943,669) (858,821)
NET ASSETS 2,870,581 2,471,209
EQUITY
Called-up share capital 1,454,612 1,135,564
Share premium 10,773,211 10,493,259
Retained earnings - (deficit) (9,548,888) (9,349,260)
Share based payment reserve 191,646 191,646
TOTAL EQUITY 2,870,581 2,471,209
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
Called-up Share Based
Share Share Payment Retained
Capital Premium Reserve Deficit Total
£ £ £ £ £
At 1 January 2015 1,135,564 10,493,259 195,082 (9,148,159) 2,675,746
Share options expired - - (3,436) 3,436 -
Loss for the year - - - (204,537) (204,537)
At 31 December 2015 1,135,564 10,493,259 191,646 (9,349,260) 2,471,209
Issue of shares 319,048 330,952 - - 650,000
Share issue expenses - (51,000) - - (51,000)
Loss for the year - - - (199,628) (199,628)
At 31 December 2016 1,454,612 10,773,211 191,646 (9,548,888) 2,870,581
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 2016 and prior years.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2016
2016 2015
£ £
CASH FLOW FROM OPERATING ACTIVITIES
Loss for financial year (199,628) (204,537)
Finance costs recognised in loss 529 583
Finance revenue recognised in loss - (605)
Exchange movement 468 1,244
(198,631) (203,315)
MOVEMENTS IN WORKING CAPITAL
Increase in payables 54,848 28,903
(Increase)/Decrease in trade and other receivables (75) 4,940
CASH USED BY OPERATIONS (143,858) (169,472)
Finance costs (529) (583)
Finance revenue - 605
NET CASH USED IN OPERATING ACTIVITIES (144,387) (169,450)
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration and evaluation assets (2,863) -
NET CASH USED IN INVESTING ACTIVITIES (2,863) -
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares 650,000 -
Share issue expenses (51,000) -
NET CASH GENERATED BY FINANCING ACTIVITIES 599,000 -
NET INCREASE/(DECREASE)IN CASH AND CASH EQUIVALENTS 451,750 (169,450)
Cash and cash equivalents at beginning of the financial year 225,916 396,610
Effect of exchange rate changes on cash held in
foreign currencies (468) (1,244)
Cash and cash equivalents at end of the financial year 677,198 225,916
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 2015. 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):
2016 2015
£ £
Numerator
For basic and diluted EPS (199,628) (204,537)
Denominator
For basic and diluted EPS 489,628,260 454,225,781
Basic EPS (0.04p) (0.05p)
Diluted EPS (0.04p) (0.05p)
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 £199,628 (2015: £204,537) and had net current liabilities of £261,198 (2015: £627,707) 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 £890,567 (2015: £800,567) 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 £677,198 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
2016 2015 2016 2015
Group Group Company Company
£ £ £ £
Exploration and evaluation assets:
Cost:
At 1 January 8,145,461 8,105,461 7,712,961 2,252,832
Additions during the year 32,863 40,000 2,863 10,000
Transfer from investment in subsidiaries - - - 1,580,086
Transfer from Hydrocarbon Exploration - - - 3,870,043
At 31 December 8,178,324 8,145,461 7,715,824 7,712,961
Impairment:
At 1 January 5,046,545 5,046,545 5,046,545 1,732,454
Transfer from Hydrocarbon Exploration - - - 3,314,091
At 31 December 5,046,545 5,046,545 5,046,545 5,046,545
Carrying Value:
At 1 January 3,098,916 3,058,916 2,666,416 520,378
At 31 December 3,131,779 3,098,916 2,669,279 2,666,416
Segmental analysis 2016 2015 2016 2015
Group Group Company Company
£ £ £ £
Peru 2,473,538 2,473,538 2,136,038 2,136,038
Ghana 658,241 625,378 533,241 530,378
3,131,779 3,098,916 2,669,279 2,666,416
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 Block 183. Clontarf Energy plc converted its interest in Block 183 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.
4. INTANGIBLE ASSETS (CONTINUED)
On 11 August 2015, as part of the Group re-structuring, all assets and liabilities in Hydrocarbon Exploration Limited were transferred to Clontarf Energy plc. The directors resigned from Hydrocarbon Exploration Limited and the entire issued share capital of Hydrocarbon Exploration Limited was acquired by Hydrocarbon Peru Limited, a subsidiary of Peru Oil and Gas Exploration Limited (POGEL).
Accordingly, a net amount of £555,952 being interests in Peru was transferred from Hydrocarbon Exploration Limited to Clontarf Energy plc and investment in subsidiaries of £1,580,086 was reclassified as intangible assets.
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 await 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
2016 2015 2016 2015
Group Group Company Company
£ £ £ £
Trade payables 37,102 40,254 37,102 40,254
Other accruals 16,000 18,000 16,000 18,000
Due to group undertakings - - 50,000 50,000
53,102 58,254 103,102 108,254
It is the company's normal practice to agree terms of transactions, including payment terms, with suppliers and provided suppliers perform in accordance with the agreed terms, payment is made accordingly. In the absence of agreed terms it is the company's policy that payment is made between 30 - 40 days. The carrying amount of trade and other payables approximates to their fair value.
