Preliminary Results for the Year Ended 31/12/19

                                                                                                                                                                                               

 

26^th May 2020

 

 

Clontarf Energy plc

("Clontarf" or "the Company")

 

Preliminary Results for the Year Ended 31 December 2019

 

 

Clontarf Energy, the oil and gas exploration company focused on Ghana and Bolivia today announces its preliminary results for the year ending 31 December 2019.

The Company expects to shortly publish its 2019 Annual Report & Accounts and a further update will be made in this regard as and when appropriate.

 

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 Megan Ray Madeleine Gordon-Foxwell	+44 (0) 207 138 3206 +44 (0) 207 138 3204 +44 (0) 207 138 3208
Teneo Luke Hogg Alan Tyrrell Thomas Shorthall	+353 (0) 1 661 4055 +353 (0) 1 661 4055

 

 

 

 

 

 

Statement Accompanying the Final Results

 

 

The world is currently a very unstable place. Health, society, the economy and the financial system are having to deal with unknown unknowns. Those of us who studied economics and finance in the 1960's would have dealt with the concept of uncertainty. Uncertainty was, and is, not knowing about variables which impact on outcomes.  It is not risk. Risk can be assessed. Not so uncertainty. You really don't know what you don't know. In recent decades academics have either ignored uncertainty or lumped it with risk. They developed models to predict outcomes in almost all areas of life. The era of Big Data, Analytics and Artificial Intelligence promised to reduce or eliminate risk. Billions upon billions have been made by quantitative funds using Algorithms to make investment decisions but they ignored uncertainty. Models are the gospels of the 2020's.  No one talks about - GIGO garbage in, garbage out.

 

Modellers ignore the effect of variables which are not in their models. When uncertainty appears they talk about deviations from the expected outcome e.g. a 6 Standard deviation event or I have seen a 25 Standard deviation event, or a Black Swan event. Well the world is now experiencing a Black and White Swan event. Predictions are not only wrong but out of date before the models run the data. The "Butterfly Effect" is ignored or paid lip service only.

 

The medical models on which social and economic decisions are being made have already had massive social impact, a catastrophic economic effect and an unknown future financial impact. What is certain is that current and future borrowings can never be repaid. There are only two possible outcomes. Inflate away the value of the borrowings or default - simply don't repay.

 

Why do I spend time on this? Because I really do not know when the world economy will restart and what it will look like when it does but our business must survive and continue.

 

The business we are in, Energy Production, will recover and will continue to grow as the vast percentage of the world's population strive to have "The Good Things in Life". Note I say Energy rather than Hydrocarbon Production. There is no doubt but that fossil fuel generation is a Sunset industry. But for the immediate coming decades Oil, Gas and even Coal will continue to be the main part of Energy Production. Yet the focus has already moved to Alternative Sources of Power such as Wind, Solar, Tidal, Wave, Hydrogen and even Nuclear, are seeing more and more research funds being ploughed into developing commercial technologies. Major advances are being made, costs are falling rapidly and should continue to do so but most are not viable yet.

 

Where does Clontarf Energy fit into this scenario? We are working on both strands. Lithium in Bolivia and Hydrocarbons in Ghana.

 

Lithium in Bolivia

 

The explosive growth in Electric Vehicles offers a major opportunity in Lithium, a critical element in batteries. Bolivia, where Clontarf has maintained a presence for over 30 years, holds half of the world's known deposits of Lithium. These deposits are in remote Andean salt pans, have technical issues, but some are good grade, with manageable impurities. Clontarf was active in Bolivia in the years 2008 -2011 in a joint venture with the armed forces to look at developing Lithium deposits, Changes in Bolivian laws made it impossible to continue. Since 2018, we are again active in this space. We have recruited a Bolivian based director to progress our interests. We have examined and analysed a number of the salt pans to determine what best suits a company like Clontarf and, significantly, we have made proposals to the authorities to work with them within the existing legal parameters. We are hopeful.

 

Hydrocarbons in Ghana

 

Clontarf holds a 60% interest in the Tano 2A concession offshore Ghana (the remaining interest is held by Petrel Resources PLC: 30% and Abbey Oil and Gas: 10%). By now, after a decade of frustration, shareholders are well aware of the position. We have an agreement with the Ghanaian National Petroleum Committee over 1500 plus sq kms in the shallow waters of the Tano Basin. In recent months there has been renewed motivation among the parties involved to seek a solution for Clontarf. World lockdowns have effectively stopped all international travel and meetings but once travel is possible these meetings will take place.

 

Future

 

In these turbulent times it may be very hard to look ahead with any real confidence. We will strive to progress our interests in both Bolivia and Ghana. Uncertainty throws up opportunities. We will see some of them. We have funds to continue operating for at least the next twelve months.

 

 

 

 

John Teeling

Chairman

 

22^nd May 2020

 

 

 

CLONTARF ENERGY PLC

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

	2019	2018
CONTINUING OPERATIONS	£	£
Administrative expenses	(308,535)	(238,871)
Impairment of exploration and evaluation assets	-	(111,682)
LOSS FOR THE YEAR BEFORE TAXATION	(308,535)	(350,553)
Income tax expense	-	-
LOSS AFTER TAX AND TOTAL
COMPREHENSIVE INCOME FOR THE YEAR	(308,535)	(350,553)
Loss per share - basic and diluted	(0.04p)	(0.06p)

 

 

 

 

 

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2019

 

 

 

 

	2019	2018
	£	£
ASSETS:
NON CURRENT ASSETS
Intangible assets	850,789	817,865
	850,789	817,865
CURRENT ASSETS
Other receivables	3,344	3,909
Cash and cash equivalents	301,292	511,564
	304,636	515,473
TOTAL ASSETS	1,155,425	1,333,338
LIABILITIES:
CURRENT LIABILITIES
Trade payables	(56,195)	(56,138)
Other payables	(1,180,567)	(1,070,567)
	(1,236,762)	(1,126,705)
TOTAL LIABILITIES	(1,236,762)	(1,126,705)
NET LIABILITIES	(81,337)	206,633
EQUITY
Called-up share capital	1,792,450	1,792,450
Share premium	10,900,373	10,900,373
Retained deficit	(12,795,775)	(12,677,836)
Share based payment reserves	21,615	191,646
SHAREHOLDERS DEFICIT	(81,337)	206,633

 

 

 

 

 

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

 

	Called-up		Share Based
	Share	Share	Payment	Retained
	Capital	Premium	Reserve	Deficit	Total
	£	£	£	£	£
At 1 January 2018	1,454,612	10,773,211	191,646	(12,327,283)	92,186
Issue of shares	337,838	162,162	-	-	500,000
Share issue expenses	-	(35,000)	-	-	(35,000)
Loss for the year and
total comprehensive income	-	-	-	(350,553)	(350,553)
At 31 December 2018	1,792,450	10,900,373	191,646	(12,677,836)	206,633
Share options vested	-	-	20,565	-	20,565
Share options expired	-	-	(190,596)	190,596	-
Loss for the year and
total comprehensive income	-	-	-	(308,535)	(308,535)
At 31 December 2019	1,792,450	10,900,373	21,615	(12,795,775)	(81,337)

 

 

Share premium

 

The share premium reserve comprises of a premium arising on the issue of shares. Share issue expenses are deducted against the share premium reserve when incurred.

 

Share based payment reserve

 

The share based payment reserve arises on the vesting of share options under the share option plan. Share options expired are reallocated from share based payment reserve to retained deficit at their grant date fair value.

 

Retained deficit

 

Retained deficit comprises of losses incurred in the current and prior years.

 

 

 

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2019

 

 

	2019	2018
	£	£
CASH FLOW FROM OPERATING ACTIVITIES
Loss for the year	(308,535)	(350,553)
Impairment of exploration and evaluation assets	-	111,682
Share options vested	20,565	-
Foreign exchange gains	4,697	2,705
	(283,273)	(236,166)
MOVEMENTS IN WORKING CAPITAL
Increase in trade and other payables	80,057	48,379
Decrease/(increase) in trade and other receivables	565	(100)
	(202,651)	(187,887)
NET CASH USED IN OPERATING ACTIVITIES	(202,651)	(187,887)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to exploration and evaluation assets	(2,924)	(196,524)
NET CASH FROM INVESTING ACTIVITIES	(2,924)	(196,524)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from share issue	-	500,000
Share issue costs	-	(35,000)
NET CASH GENERATED BY FINANCING ACTIVITIES	-	465,000
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS	(205,575)	80,589
Cash and cash equivalents at beginning of the financial year	511,564	433,680
Effect of foreign exchange rate changes	(4,697)	(2,705)
CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR	301,292	511,564

 

 

 

 

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 2018. 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):

 

	2019	2018
	£	£
Numerator
For basic and diluted EPS	(308,535)	(350,553)
Denominator
For basic and diluted EPS	716,979,964	619,608,620
Basic EPS	(0.04p)	(0.06p)
Diluted EPS	(0.04p)	(0.06p)

 

 

The following potential ordinary shares are anti-dilutive and are therefore excluded from the weighted average number of shares for the purpose of the diluted earnings per share:

 

                                                                                                                          No.                                        No

Share options                                                                                                  40,500,000                           8,900,000

                                                                                                                                                                                              

 

3.    GOING CONCERN

 

The Group and Company incurred a loss for the year of £308,535 (2018: £350,553) and the Group and Company had net current liabilities of £932,126 (2018: £611,232) and £473,091 (2018: £182,197) respectively at the balance sheet date. These conditions represent a material uncertainty that may cast doubt on the Group and Company's ability to continue as a going concern. 

 

Included in current liabilities is an amount of £1,180,567 (2018: £1,070,567) for the Group and £671,527 (2018: £591,527) for the Company 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 and Company has generated sufficient funds from its operations after paying its third party creditors.

 

The Group and Company had a cash balance of £301,292 at the balance sheet date. The directors have prepared cashflow projections for a period of at least twelve months from the date of approval of these financial statements. The cashflow projections include any anticipated impacts of the Covid-19 pandemic on the Group and Company. As the Group and Company are not revenue or cash generating it relies on raising capital from the public market. The Group and Company completed a capital raising during the prior year and the cash flow projections prepared by the Group and Company indicate that the funds available are sufficient to meet the obligations of the Group and Company 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 and Company were unable to continue as a going concern.

 

 

4.    INTANGIBLE ASSETS

	2019	2018
	Group	Group
	£	£
Exploration and evaluation assets:
Cost:
At 1 January	8,528,077	8,301,553
Additions during the year	32,924	226,524
At 31 December	8,561,001	8,528,077
Impairment:
At 1 January	7,710,212	7,598,530
Impairment during the year	-	111,682
At 31 December	7,710,212	7,710,212
Carrying Value:
At 1 January	817,865	703,023
At 31 December	850,789	817,865
Segmental analysis	2019	2018
	Group	Group
	£	£
Bolivia	16,225	16,225
Ghana	834,564	801,640
	850,789	817,865

 

 

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

 

An impairment charge of £111,682 was recorded by the Group in the prior year in respect of Equatorial Guinea licences which were fully impaired during 2018.

 

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

 

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

 

·        licence obligations

·        requirement for further funding

·        geological and development risks

·        title to assets

·        political risk

 

Included in the additions for the year are £30,000 (2018: £30,000) of directors remuneration. The remaining balance pertains to the amounts capitalised to the respective licences held by the entity.

 

 

5.    TRADE PAYABLES

	2019	2018
	Group	Group
	£	£
Trade payables	38,195	40,138
Other accruals	18,000	16,000
	56,195	56,138

 

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

	2019	2018
	Group	Group
	£	£
Amounts due to directors	1,180,567	1,070,567
	1,180,567	1,070,567

 

Other payables relate to amounts due for directors' remuneration of £1,180,567 (2018: £1,070,567) 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 2018	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
Issued during the year	-	-	-
At 31 December 2019	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 40,500,000 share options were in issue at 31 December 2018 (2018: 8,900,000).  These options are exercisable, at prices ranging between 0.70p and 0.725p, up to seven years from the date of granting of the options unless otherwise determined by the board.

 

 

8.    SHARE BASED PAYMENTS

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.

 

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

 

		2019		2018
	30/06/2019	Weighted average		Weighted average
	Options	exercise  price	30/06/2018	exercise  price
		in pence	Options	in pence
Outstanding at beginning of year	8,900,000	4.25	8,900,000	4.25
Issued	40,000,000	0.7	-	-
Expired	(8,400,000)	4.25	-	-
Outstanding at end of the year	40,500,000	0.7	8,900,000	4.25
Exercisable at end of the year	13,833,333	0.7	8,900,000	4.25

 

                           

     

 

 

During the current year 40,000,000 options were granted with a fair value of £246,788. These fair values were calculated using the Black-Scholes valuation model. These options will vest over a 3 year period and will be capitalized or expensed on a straight line basis over the vesting period.

 

The options outstanding at 31 December 2019 had an average exercise price of 0.70p and a weighted average remaining contractual life of 6.75 years.

 

The inputs into the Black-Scholes valuation model were as follows:

 

                            Grant 2 October 2019
  Weighted average share price at date of grant (in pence)                                                                                         0.7p

                            Weighted average exercise price (in pence)                                                                                                                 0.7p

                            Expected volatility                                                                                                                                                      116.23%

                            Expected life                                                                                                                                                                  7 years

                            Risk free rate                                                                                                                                                                      1.3%

                            Expected dividends                                                                                                                                                           none

 

Expected volatility was determined by management based on their cumulative experience of the movement in share prices over a period of 3 years

 

The terms of the options granted do not contain any market conditions within the meaning of IFRS 2.

 

The Group capitalised expenses of £Nil (2018: £Nil) and expensed costs of £20,565 (2018: £ Nil) relating to equity-settled share-based payment transactions during the year.

 

 

9.    POST BALANCE SHEET EVENTS

In the period since 31 December 2019, the emergence and spread of Covid-19 has not had a significant impact on the Group's operations. Although some high level discussions originally scheduled to take place in March in Ghana, Europe and Bolivia in relation to the Group's projects were postponed due to the Covid-19 pandemic, they are expected to be rescheduled over the coming months. The Group continues to progress its interests in Ghana and Bolivia and do not believe that its prospects will be negatively impacted by Covid-19.

 

10.  ANNUAL GENERAL MEETING

The Company's Annual General Meeting will be held on Thursday 23rd July 2020 at Granite Exchange, 5-6 Kildare St, Newry BT34 1DQ at 11.00 am. Further information, including the Notice of AGM, will be provided shortly.

 

 

11.  GENERAL INFORMATION

The financial information set out above does not constitute the Company's audited financial statements for the year ended 31 December 2019 or the year ended 31 December 2018. The financial information for 2018 is derived from the financial statements for 2018 which have been delivered to the Registrar of Companies. The auditors had reported on the 2018 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 2019 will be delivered to the Registrar of Companies.

 

A copy of the Company's Annual Report and Accounts for 2019 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, 3^rd Floor, 11-12 St. James's Square, London, SW1Y 4LB.