28 May 2019
Clontarf Energy plc
("Clontarf" or "the Company")
Preliminary Results for the Year Ended 31 December 2018
Clontarf Energy, the oil and gas exploration company focused on Ghana and Bolivia today announces its preliminary results for the year ending 31 December 2018.
This announcement contains inside information for the purposes of Article 7 of Regulation 596/2014.
For further information please visit http://clontarfenergy.com or contact:
Clontarf Energy John Teeling, Chairman David Horgan, Director |
+353 (0) 1 833 2833 |
|
|
Nominated & Financial Adviser Strand Hanson Limited Rory Murphy Ritchie Balmer Georgia Langoulant |
+44 (0) 20 7409 3494 |
|
|
Broker Novum Securities Limited Colin Rowbury |
+44 (0) 207 399 9400 |
|
|
Public Relations Blytheweigh Julia Tilley Fergus Cowan |
+44 (0) 207 138 3206 +44 (0) 207 138 3553 +44 (0) 207 138 3208 |
|
|
Teneo Luke Hogg Alan Tyrrell |
+353 (0) 1 661 4055 +353 (0) 1 661 4055 |
Statement Accompanying the Final Results
I write this statement as the bear market in junior exploration investments continues. Many of us have experienced previous price volatility but this extended depression is causing even the most optimistic investors to consider their position. Many have given up and sold out further depressing prices as there are few, if any, new buyers. But Clontarf is an AIM quoted company with thousands of shareholders, interesting investment opportunities, an experienced board and some good financial supporters. We will continue until the sector recovers.
Our focus is on energy. Finding new sources. We are early stage grass root explorers. This means we seek out high potential opportunities often in areas where more established conservative companies will not go. When we have a discovery we expect to do very well. But high potential almost always comes with high risk of failure due to geological, political factors or technical factors.
Our geographic focus is, and has been, on West Africa and Bolivia. We concluded an onshore / offshore licence agreement in Ghana more than ten years ago. It is still not ratified. We have had a presence in Bolivia since 1988. We were nationalised without compensation in 2006 but have maintained a presence there which at long last may result in opportunities.
Last year I wrote about an opportunity in Equatorial Guinea in West Africa. I indicated that there were problems about finalising the award of Block 18. These complications proved impossible to overcome and we declined to proceed. We have recently been invited to tender for another block. The costs involved in the application make it unlikely that we will apply.
What can I say about our status in Ghana which has not already been mentioned? Progress is slow. Our core strength is a court order stipulating that we have a legitimate right to Block 2A in the Tano basin. Implementing the order is proving a mammoth task. Governments changed, co-ordinates changed while discussions continued. The procedure involves agreement with the Ghanaian National Petroleum Company (GNPC). Then cabinet approval, followed by parliamentary approval. We have GNPC agreement but so far no cabinet approval.
The opportunity in Ghana oil remains. More discoveries have been made and the country has become a significant oil producer during the time our saga has continued. We are frustrated, we have spent time and money in the country. We remain hopeful of an agreement.
Persistence might pay off in Bolivia.
Bolivia is a resource rich country in South America with extensive hydrocarbon and lithium resources. We held two oil / gas assets in Bolivia both now written off and carried at no value in our books. We also attempted to develop relationships with Bolivian authorities to explore and if possible develop lithium opportunities. Lithium is a vital energy resource for batteries. Bolivia is thought to hold over half the world's resources in the form of brines containing lithium in twenty eight salt pans. Some years ago Clontarf worked with the military authorities on a lithium study but the legal position was unclear and nothing came of the work. With the encouragement of the Bolivian authorities we have again worked on potential opportunities. We carried out initial prospecting and sampling and have made formal application for an exploration / development permit on a number of small salt pans. Should we be successful in reaching an agreement we would undertake a detailed exploration programme. Exploring at above 4,500 metres is not easy but we have prior experience of the Andean altiplano.
There is a small glimmer of hope that certain of our former hydrocarbon assets may be recoverable in some form. To assist Clontarf in Bolivia we welcomed Mr. Peter O'Toole to the board as a non-executive director. Mr. O'Toole has over 30 year in industrial, commercial and construction experience in Bolivia and has been for a number of years the Irish consul in Bolivia.
During the year we raised £500,000 in new funds to fund working capital.
We share the concerns and frustration of shareholders who have waited for years for positive news. There has been a number of false dawns. All I can offer my fellow shareholders is hope, hope that at long last some genuine opportunities will be open to our company.
John Teeling
Chairman
27th May 2019
CLONTARF ENERGY PLC
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2018
|
2018 |
2017 |
CONTINUING OPERATIONS |
£ |
£ |
|
|
|
|
|
|
REVENUE |
- |
- |
|
|
|
Cost of sales |
- |
- |
|
|
|
GROSS PROFIT |
- |
- |
|
|
|
Administrative expenses |
(238,871) |
(226,410) |
|
|
|
Impairment of exploration and evaluation assets |
(111,682) |
(2,551,985) |
|
|
|
LOSS BEFORE TAXATION |
(350,553) |
(2,778,395) |
|
|
|
Income tax expense |
- |
- |
|
|
|
LOSS FOR THE YEAR AND TOTAL |
|
|
COMPREHENSIVE INCOME |
(350,553) |
(2,778,395) |
|
|
|
|
|
|
LOSS PER SHARE - Basic and diluted |
(0.06p) |
(0.48p) |
|
|
|
CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2018
|
2018 |
2017 |
|
£ |
£ |
|
|
|
ASSETS: |
|
|
NON CURRENT ASSETS |
|
|
|
|
|
Intangible assets |
817,865 |
703,023 |
|
|
|
|
817,865 |
703,023 |
|
|
|
CURRENT ASSETS |
|
|
Other receivables |
3,909 |
3,809 |
Cash and cash equivalents |
511,564 |
433,680 |
|
|
|
|
515,473 |
437,489 |
|
|
|
TOTAL ASSETS |
1,333,338 |
1,140,512 |
|
|
|
|
|
|
LIABILITIES: |
|
|
|
|
|
CURRENT LIABILITIES |
|
|
Trade payables |
(56,138) |
(67,759) |
Other payables |
(1,070,567) |
(980,567) |
|
|
|
|
(1,126,705) |
(1,048,326) |
|
|
|
TOTAL LIABILITIES |
(1,126,705) |
(1,048,326) |
|
|
|
NET ASSETS |
206,633 |
92,186 |
|
|
|
|
|
|
EQUITY |
|
|
Called-up share capital |
1,792,450 |
1,454,612 |
Share premium |
10,900,373 |
10,773,211 |
Retained deficit |
(12,677,836) |
(12,327,283) |
Share based payment reserve |
191,646 |
191,646 |
|
|
|
TOTAL EQUITY |
206,633 |
92,186 |
|
|
|
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2018
|
Called-up |
|
Share Based |
|
|
|
Share |
Share |
Payment |
Retained |
|
|
Capital |
Premium |
Reserve |
Deficit |
Total |
|
£ |
£ |
£ |
£ |
£ |
|
|
|
|
|
|
At 1 December 2017 |
1,454,612 |
10,773,211 |
191,646 |
(9,548,888) |
2,870,581 |
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(2,778,395) |
(2,778,395) |
|
|
|
|
|
|
At 31 December 2017 |
1,454,612 |
10,773,211 |
191,646 |
(12,327,283) |
92,186 |
|
|
|
|
|
|
Shares issued |
337,838 |
162,162 |
- |
- |
500,000 |
|
|
|
|
|
|
Share issue expenses |
- |
(35,000) |
- |
- |
(35,000) |
|
|
|
|
|
|
Loss for the year |
- |
- |
- |
(350,553) |
(350,553) |
|
|
|
|
|
|
At 31 December 2018 |
1,792,450 |
10,900,373 |
191,646 |
(12,677,836) |
206,633 |
|
|
|
|
|
|
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 2017 and prior years.
CONSOLIDATED CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2018
|
2018 |
2017 |
|
£ |
£ |
|
|
|
CASH FLOW FROM OPERATING ACTIVITIES |
|
|
|
|
|
Loss for financial year |
(350,553) |
(2,778,395) |
Adjusted for: |
|
|
Impairment of exploration and evaluation assets |
111,682 |
2,551,985 |
Exchange movement |
2,705 |
3,493 |
|
|
|
|
(236,166) |
(222,917) |
|
|
|
MOVEMENTS IN WORKING CAPITAL |
|
|
|
|
|
Increase in payables |
48,379 |
74,657 |
(Increase)/Decrease in trade and other receivables |
(100) |
1,464 |
|
|
|
CASH USED BY OPERATIONS |
(187,887) |
(146,796) |
|
|
|
|
|
|
NET CASH USED IN OPERATING ACTIVITIES |
(187,887) |
(146,796) |
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES |
|
|
|
|
|
Payments for exploration and evaluation assets |
(196,524) |
(93,229) |
|
|
|
NET CASH USED IN INVESTING ACTIVITIES |
(196,524) |
(93,229) |
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES |
|
|
|
|
|
Proceeds from issue of shares |
500,000 |
- |
Share issue expenses |
(35,000) |
- |
|
|
|
NET CASH GENERATED BY FINANCING ACTIVITIES |
465,000 |
- |
|
|
|
|
|
|
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS |
80,589 |
(240,025) |
|
|
|
Cash and cash equivalents at beginning of the financial year |
433,680 |
677,198 |
|
|
|
Effect of exchange rate changes on cash held in |
|
|
foreign currencies |
(2,705) |
(3,493) |
|
|
|
Cash and cash equivalents at end of the financial year |
511,564 |
433,680 |
|
|
|
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 2017. 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):
|
2018 |
2017 |
|
£ |
£ |
Numerator |
|
|
For basic and diluted EPS |
(350,553) |
(2,778,395) |
|
|
|
|
|
|
Denominator |
|
|
For basic and diluted EPS |
619,608,620 |
581,844,829 |
|
|
|
|
|
|
Basic EPS |
(0.06p) |
(0.48p) |
Diluted EPS |
(0.06p) |
(0.48p) |
|
|
|
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 £350,553 (2017: £2,778,395) and had net current liabilities of £611,232 (2017: £610,837) at the balance sheet date.
Included in current liabilities is an amount of £1,070,567 (2017: £980,567) owed to directors in respect of directors' remuneration due at the balance sheet date. The directors have confirmed in writing 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 £511,564 at the balance sheet date and approximately £430,000 as of today. 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
|
2018 |
2017 |
|
Group |
Group |
|
£ |
£ |
Exploration and evaluation assets: |
|
|
|
|
|
Cost: |
|
|
At 1 January |
8,301,553 |
8,178,324 |
Additions during the year |
226,524 |
123,229 |
|
|
|
At 31 December |
8,528,077 |
8,301,553 |
|
|
|
Impairment: |
|
|
At 1 January |
7,598,530 |
5,046,545 |
Impairment during the year |
111,682 |
2,551,985 |
|
|
|
At 31 December |
7,710,212 |
7,598,530 |
|
|
|
Carrying Value: |
|
|
At 1 January |
703,023 |
3,131,779 |
|
|
|
At 31 December |
817,865 |
703,023 |
|
|
|
|
|
|
|
|
|
Segmental analysis |
2018 |
2017 |
|
Group |
Group |
|
£ |
£ |
Peru |
- |
- |
Ghana |
817,865 |
703,023 |
|
|
|
|
817,865 |
703,023 |
|
|
|
Exploration and evaluation assets relates to expenditure incurred in prospecting and exploration for oil and gas in Peru, Ghana and Equatorial Guinea. The directors are aware that by its nature there is an inherent uncertainty in such development expenditure as to the value of the asset.
On 26 September 2017 the board of Clontarf Energy had been informed that Union Oil (the 80% owner of the concession held in Peru) had returned to the Peruvian Authorities the licence held on Block 183. They gave as their reason an inability over a 3 year period to obtain the permits, particularly environmental permits, necessary to explore.
Clontarf held a 3% royalty on revenue arising from future operations on the Block. Clontarf did not incur any liabilities as a result of Union Oil's decision but has written off the carrying value of the asset. Accordingly an impairment charge of £2,473,538 in respect of the full carrying value of the Group' Peruvian assets has been recorded by the Group in the prior year.
During the year the Group incurred expenditure of £111,682 (2017: £78,447) on evaluating licences in Equatorial Guinea. An impairment charge of £111,682 has been recorded by the Group in the current year in respect of those licences.
On 17 September 2018, the Company announced that the Directors believe they have resolved the outstanding issues with The Ghana National Petroleum Corporation (GNPC) regarding a contract for the development of the Tano 2A Block. As such, all legal proceedings have been withdrawn by the Company and the Company looks forward to making further announcements regarding the Petroleum Agreement in due course
The realisation of these intangible assets is dependent on the discovery and successful development of economic oil and gas reserves, the ongoing title to the license, the ability of the company to finance the development of the asset and on the future profitable production or process from the asset 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
|
2018 |
2017 |
|
Group |
Group |
|
£ |
£ |
|
|
|
Trade payables |
40,138 |
51,759 |
Other accruals |
16,000 |
16,000 |
|
|
|
|
56,138 |
67,759 |
|
|
|
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.
6. OTHER PAYABLES
|
2018 |
2017 |
|
Group |
Group |
|
£ |
£ |
|
|
|
Amounts due to directors |
1,070,567 |
980,567 |
|
|
|
|
1,070,567 |
980,567 |
|
|
|
Other payables relate to amounts due to directors' remuneration of £1,070,567 (2017: £980,567) accrued but not paid at year end.
7. CALLED-UP SHARE CAPITAL
Allotted, called-up and fully paid:
|
Number |
Share Capital |
Share Premium |
|
|
£ |
£ |
|
|
|
|
At 1 January 2017 |
581,844,829 |
1,454,612 |
10,773,211 |
Issued during the year |
- |
- |
- |
|
|
|
|
At 31 December 2017 |
581,844,829 |
1,454,612 |
10,773,211 |
Issued during the year |
135,135,135 |
337,838 |
162,162 |
Share issue expenses |
- |
- |
(35,000) |
|
|
|
|
At 31 December 2018 |
716,979,964 |
1,792,450 |
10,900,373 |
|
|
|
|
Movements in issued share capital
On 20 September 2018 a total of 135,135,135 shares were placed at a price of 0.37 pence per share. Proceeds were used to provide additional working capital and fund development costs.
Share Options
A total of 8,900,000 share options were in issue at 31 December 2018 (2017: 8,900,000). These options are exercisable, at prices ranging between 0.725p and 4.6p, up to seven years from the date of granting of the options unless otherwise determined by the board.
8. ANNUAL GENERAL MEETING
The Company's Annual General Meeting will be held on Thursday 27th June 2019 at Hilton Paddington Hotel, 146 Praed Street, London, W2 1EE at 11.00 am.
9. GENERAL INFORMATION
The financial information set out above does not constitute the Company's audited financial statements for the year ended 31 December 2018 or the year ended 31 December 2017. The financial information for 2017 is derived from the financial statements for 2017 which have been delivered to the Registrar of Companies. The auditors had reported on the 2017 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 2018 will be delivered to the Registrar of Companies.
A copy of the Company's Annual Report and Accounts for 2018 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, Suite 1, 3rd Floor, 11-12 St. James's Square, London, SW1Y 4LB.
