REG - Clontarf Energy PLC - Interim Management Statement <Origin Href="QuoteRef">CLON.L</Origin>

Clontarf EnergyAnnouncement

30/09/2014 07:00

RNS Number : 8973S
Clontarf Energy PLC
30 September 2014
 
30th September 2014

Clontarf Energy plc
("Clontarf" or "the Company")
Interim Statement for the period ended 30 June 2014
Exploration stocks have few friends in bear markets. Investors avoid the sector, bad news is exacerbated in the market, while good news is ignored.
So it is with Clontarf. Listed in the midst of a severe bear market, the environment facing the company has not improved. The exploration assets of the company, located in Ghana, Peru and Bolivia, have potential but also problems. The share price collapsed making funding very dilutive and only possible by support from the directors, family and friends. All is not gloom. There are developments in two of our projects. There is also investment interest in Clontarf as an AIM listed vehicle.
Ghana
Clontarf holds a 60% interest (Petrel 30%, local interests 10%) in Pan Andean Limited, a vehicle which holds a licence over the Tano 2A block offshore Ghana. Agreement was reached in 2008 with the Ghana National Petroleum Corporation (GNPC) but cabinet and parliamentary ratification dragged on. In early 2014, the Ghanaian parliament awarded ground, which we assumed was on our licence, to another company. Following High Court proceedings in Ghana an agreement was reached by all parties on the exact co-ordinates of the Tano 2A block, to eliminate any conflict. Although part of the agreement was rapid ratification, the Ghanaian authorities have been slow to finalise the details. The agreed proposals were accepted by and are in the best interests of all parties so we expect a resolution in the coming weeks, however the Company believes time is of the essence and reserves the right to apply to resuscitate the proceedings when the High Court re-opens in October.
Peru
Clontarf holds a 3% royalty on production from Block 183 in Peru subject to a maximum pay-out of $5 million from each of two discoveries. The block has yet to be drilled but there was an earlier gas discovery on the periphery of the block in 1974. There has also been a discovery on a nearby block. There is a ready market for any hydrocarbon discoveries and the operator of the block, POGEL, a private Peruvian company, has a gas supply agreement with Ruralec, a South American power supplier. POGEL is in the process of appointing a company to explore and develop the block.
Bolivia
On paper our interests in Bolivia look substantial, a 30% share in the gas producing Monteagudo field with Repsol and Petrobas owning the balance, and a 10% interest in the El Dorado gas field where the Bolivian State oil company, YPFB, owns the balance. Title over these assets has been uncertain since 2006 when a nationalisation decree was passed and while there has been interest in the area, it has not been possible to farm out or joint venture these activities. As a result, they are carried at zero value in our books.
Future
The future strategy is very clear. Reach a conclusion in Ghana and in addition bring in new projects to the company.
Clontarf as an AIM listed vehicle has numerous attractions, a broad shareholder base, a very experienced board, access to potential investors for the right projects and significant upside potential in the existing projects. We are working to unlock this potential.
John Teeling
Chairman
30th September 2014
For further information please visit http://clontarfenergy.comor contact:
Clontarf Energy plc
John Teeling, Chairman +353 (0) 1 833 2833
David Horgan, Director
James Finn, Director
Nominated Adviser and Broker
Northland Capital Partners Limited
Gavin Burnell / Lauren Kettle +44 (0)20 7382 1100
Alice Lane / John Howes (Broking)
Public Relations
Blytheweigh +44 (0)20 7138 3204
Tim Blythe +44 (0) 7816 924 626
Halimah Hussain +44 (0) 7725 978 141
Camilla Horsfall +44 (0) 7871 841 793
Pembroke Communications
Natalie Tennyson +353 (0) 1 649 6486
Alan Tyrrell +353 (0) 1 649 6486

Clontarf Energy plc
Financial Information (Unaudited)










CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME









Six Months Ended

Year Ended





30 June 14

30 June 13

31 Dec 13





unaudited

unaudited

audited





'000

'000

'000










REVENUE




 - 

 - 

 - 
Cost of sales




 - 

 - 

 - 
GROSS PROFIT




 - 

 - 

 - 










Administrative expenses




( 131 )

( 598 )

( 667 )
Impairment of exploration and evaluation assets

 - 

 - 

( 2,474 )
OPERATING LOSS




( 131 )

( 598 )

( 3,141 )










Finance revenue




 1 

 1 

 1 
Finance costs




( 29 )

( 14 )

( 37 )
LOSS BEFORE TAXATION




( 159 )

( 611 )

( 3,177 )










Income Tax




 - 

 - 

 - 










TOTAL COMPREHENSIVE LOSS FOR THE PERIOD



( 159 )

( 611 )

( 3,177 )










LOSS PER SHARE - basic and diluted




(0.08p) 

(0.30p) 

(1.59p) 




















CONDENSED CONSOLIDATED BALANCE SHEET



30 June 14 

30 June 13 

31 Dec 13 





unaudited 

unaudited 

audited 
ASSETS:




'000 

'000 

'000 
NON-CURRENT ASSETS









Intangible assets




 3,026 

 5,372 

 2,964 





 3,026 

 5,372 

 2,964 










CURRENT ASSETS









Trade and other receivables




 2 

 23 

 5 
Cash and cash equivalents




 14 

 59 

 29 





 16 

 82 

 34 
TOTAL ASSETS




 3,042 

 5,454 

 2,998 










LIABILITIES:









CURRENT LIABILITIES









Trade payables




( 159 )

( 800 )

( 190 )
Other payables




( 1,281 )

( 743 )

( 1,163 )





( 1,440 )

( 1,543 )

( 1,353 )










NON CURRENT LIABILITIES









Loans




( 598 )

( 276 )

( 576 )
TOTAL LIABILITIES




( 2,038 )

( 1,819 )

( 1,929 )
NET ASSETS




 1,004 

 3,635 

 1,069 










EQUITY









Share capital




 519 

 500 

 500 
Share premium




 9,324 

 9,249 

 9,249 
Reserves




( 8,839 )

( 6,114 )

( 8,680 )
TOTAL EQUITY




 1,004 

 3,635 

 1,069 










CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY



















Share based 




Share 

Share 

Payment 

Retained 

Total 

Capital 

Premium 

Reserves 

Losses 

Equity 

'000 

'000 

'000 

'000 

'000 










As at 1 January 2013
 500 

 9,249 

 330 

( 5,833 )

 4,246 
Total comprehensive loss






( 611 )

( 611 )
As at 30 June 2013
 500 

 9,249 

 330 

( 6,444 )

 3,635 










Total comprehensive loss
-

-

 - 

( 2,566 )

( 2,566 )
As at 31 December 2013
 500 

 9,249 

 330 

( 9,010 )

 1,069 










Issue of shares
19

75

-

-

94
Total comprehensive loss
 -

 - 

 - 

( 159 )

( 159 )
As at 30 June 2014
 519 

 9,324 

 330 

( 9,169 )

 1,004 






























CONDENSED CONSOLIDATED CASH FLOW



Six Months Ended 

Year Ended 





30 June 14 

30 June 13 

31 Dec 13 





unaudited 

unaudited 

audited 





'000 

'000 

'000 
CASH FLOW FROM OPERATING ACTIVITIES








Loss for the period




( 159 )

( 611 )

( 3,177 )
Finance costs recognised in loss




 29 

 14 

 37 
Finance revenue recognised in loss



( 1 )

( 1 )

( 1 )
Exchange movements




( 6 )

 3 

( 2 )
Impairment of exploration and evaluation assets

 - 

 - 

 2,474 





( 137 )

( 595 )

( 669 )










Movements in Working Capital




 206 

 452 

 155 
CASH GENERATED/(USED) IN OPERATIONS



 69 

( 143 )

( 514 )










Finance costs




( 29 )

( 14 )

( 37 )
Finance revenue




 1 

 1 

 1 
NET CASH GENERATED/(USED) IN OPERATING ACTIVITIES

 41 

( 156 )

( 550 )










CASH FLOWS FROM INVESTING ACTIVITIES








Payments for intangible assets




( 62 )

( 157 )

( 98 )
NET CASH USED IN INVESTING ACTIVITIES



( 62 )

( 157 )

( 98 )










CASH FLOWS FROM FINANCING ACTIVITIES








Increase in loans




 - 

 276 

 576 
NET CASH GENERATED BY FINANCING ACTIVITIES


 - 

 276 

 576 










NET DECREASE IN CASH AND CASH EQUIVALENTS


( 21 )

( 37 )

( 72 )










Cash and cash equivalents at beginning of the period

 29 

 99 

 99 










Effect of exchange rate changes on cash held



 6 

( 3 )

 2 
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD

 14 

 59 

 29 










Notes: 
1. INFORMATION
The financial information for the six months ended June 30th, 2014 and the comparative amounts for the six months ended June 30th, 2013 are unaudited. The financial information above does not constitute full statutory accounts within the meaning of section 434 of the Companies Act 2006.
The Interim Financial Report has been prepared in accordance with IAS 34 Interim Financial Reporting as adopted by the European Union. The accounting policies and methods of computation used in the preparation of the Interim Financial Report are consistent with those used in the Group 2013 Annual Report, which is available at www.clontarfenergy.com
The interim financial statements have not been audited or reviewed by the auditors of the Group pursuant to the Auditing Practices board guidance on Review of Interim Financial Information.
2. No dividend is proposed in respect of the period.
3. 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):

Six months Ended

Year Ended

30 June 14

30 June 13

31 Dec 13



Numerator





For basic and diluted EPS 
(159,325)

(611,146)

(3,177,277)






Denominator
For basic and diluted EPS 
206,861,662

200,184,469

200,184,469






Basic EPS
(0.08p)

(0.30p)

(1.59p)
Diluted EPS
(0.08p)

(0.30p)

(1.59p)






Basic and diluted loss per share are the same as the effect of the outstanding share options is anti-dilutive and is therefore excluded.
4. INTANGIBLE ASSETS
Exploration and evaluation assets:

30 June 14

30 June 13

31 Dec 13





'000

'000

'000
Cost:









At 1 January



8,011

7,788

7,788
Additions 




62

157

223
Closing Balance



8,073

7,945

8,011










Impairment:








At 1 January



5,047

2,573

2,573
Provision for impairment


-

-

2,474
Closing Balance



5,047

2,573

5,047










Carrying value:








At 1 January



2,964

5,215

5,215










At period end



3,026

5,372

2,964
Regional Analysis 

30 Jun 14
'000

30 Jun 13
'000

31 Dec 13
'000
Peru

2,474

4,897

2,474
Ghana

552

475

490


3,026

5,372

2,964
On 15 May 2013, the company signed an agreement with 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, POGEL released Block 188. Due to Block 188 being released the directors have decided to provide against the carrying value of the Peruvian assets. Accordingly an impairment provision of 2,473,538 has been recorded by the Group in the prior year. This represents the total carrying value of block 188 as the recoverable amount is Nil.
In March 2014 the Group sought clarification from the Ghanaian authorities that a petroleum agreement in the Tano Basin block ratified by the Ghanaian Parliament in March 2014 did not relate to an area covered by the license held by Clontarf Energy plc. The Group was granted an interlocutory injunction and an interim order protecting the Group's rights in the Tano Basin block. 
On 17 July 2014, the board of Clontarf Energy reported that an agreement had been reached with the Ghanaian authorities which clarifies the co-ordinates of the signed Petroleum Agreement on a licence Block in the Tano area of Ghana. It was agreed that additional, contiguous acreage would be added to preserve the size of the Block. The agreement is between Pan Andean Resources Ltd (60% Clontarf, 30% Petrel, 10% local interests) the Ghana National Petroleum Corporation and the Government of Ghana. All parties agreed to seek to expedite the ratification process which requires Cabinet and Parliamentary approval.
As a consequence of this, Clontarf Energy has discontinued its High Court proceedings with rights to reapply.
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 risks outlined below. Should this prove unsuccessful the value included in the balance sheet would be written off to the statement of comprehensive income.
 The group's activities are subject to a number of significant potential risks including:
 - licence obligations
 - requirement for further funding
 - geological and development risks
 - title to assets 
- political risks 
 
Having reviewed the deferred exploration and evaluation development expenditure at 30 June 2014, the directors are satisfied that the value of the intangible asset is not less than carrying net book value.
5. TRADE PAYABLES


30 June 14

30 June 13

31 Dec 13





'000

'000

'000










Trade payables


134

163

170
Other accruals


25

637

20




159

800

190
Included in other accruals for the six months ended 30 June 2013 was a provision of 600,000 being the total cost to the group, including legal fees, of the settlement with Hunt Oil. 
6. OTHER PAYABLES


30 June 14

30 June 13

31 Dec 13





'000

'000

'000










Amounts due to directors


1,281

743

1,163




1,281

743

1,163
Other payables relate to amounts due to directors' accrued but not paid at period end.
 
 On 21 July 2014, the company issued 70,302,632 new ordinary shares at a price of 0.75p per share totalling 527,270 to the directors as part repayment of directors loans and accrued remuneration. 
7. LOANS


30 June 14

30 June 13

31 Dec 13





'000

'000

'000










Loans repayable


598

276

576




598

276

576
During 2013 loans were received by the company's subsidiary Hydrocarbon Exploration Limited, from South American lenders. The loans are for a period of two years and the lenders have agreed that they will accept ordinary shares in Clontarf Energy plc in lieu of cash repayment of amounts due. The loans bear interest at 10% per annum.
 On 17 July 2014, the loans were converted into shares and the company issued 79,767,067 new ordinary shares at a price of 0.75p per share to the lenders as full and final settlement. 
8. SHARE CAPITAL
Allotted, called-up and fully paid:




Number
Share Capital
Premium


 
At 1 January 2013
200,184,469
500,461
9,248,336
Issued during the period
-
-
-

 
 
 
At 30 June 2013
200,184,469
500,461
9,248,336
Issued during the period
-
-
-

 
 
 
At 31 December 2013
200,184,469
500,461
9,249,336
Issued during the period
7,231,975
18,080
75,936

 
 
 
At 30 June 2014
207,416,444
518,541
9,324,272

Movements in share capital
On 14 January 2014 the company issued 7,231,975 ordinary shares at a price of 1.3p in settlement of outstanding professional fees.
 
9. SUBSEQUENT EVENTS
 On 17 July 2014, the company issued 79,767,067 new ordinary shares at a price of 0.75p per share to South American lenders who agreed to accept ordinary shares in Clontarf Energy plc in lieu of cash repayment of amounts due. Further details of the loans are provided in Note 7.
 On 21 July 2014, Clontarf Energy announced that the Company had raised 121,500 before expenses through a placing and subscription of 16,200,000 new ordinary shares at a price of 0.75p per share.
In addition, in order to strengthen the Company's balance sheet, the company also issued 9,111,067 new ordinary shares to a creditor at a price of 0.75p per share and a further 70,302,632 new ordinary shares in repayment of directors' loans and accrued remuneration totalling 409,382 and 117,888 respectively at a price of 0.75p per share.
10. The Interim Report for the six months to June 30th, 2014 was approved by the Directors on 29th September 2014.
11. Copiesof the interim report will be mailed shortly only to those shareholders who have elected to receive it. Otherwise, shareholders will be notified that the Interim Report will be available on the website at www.clontarfenergy.com. Copies of the Interim Report will also be available for collection at the Companies Registered Office at 20-22 Bedford Row, London WC1R 4JS. 

This information is provided by RNS
The company news service from the London Stock Exchange
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