REG - Clontarf Energy PLC - Interim Results for the period ended 30 June 2022
22/09/2022 07:01
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RNS Number : 2106A Clontarf Energy PLC 22 September 2022
22 September 2022
Clontarf Energy plc
("Clontarf" or the "Company")
Interim Statement for the period ended 30 June 2022
Clontarf Energy plc (AIM: CLON), the energy company focused on Australia,
Africa and Bolivia, announces its unaudited financial results for the six
months ended 30 June 2022:
The principal activities during this period were exploring Australian North
West Shelf WG 519-P Block, in which Clontarf Energy holds a 10% Working
Interest, and on which the partners drilled the Sasanof-1 well in May/June
2022. While this well did not flow commercial hydrocarbons, it showed that
1,000 metre offshore wells can again be funded. Clontarf's liquidity and
international contacts helped attract funding above the then share price.
The spectacular boom in LNG prices, and shipments to Asia, as well as to the
rationed European gas market, show that we are in a new boom market for gas
discoveries in safe jurisdictions. Evaluation of deeper plays on the North
West Shelf WG 519-P Block, as well as nearby offshore and onshore plays, opens
up new exploration potential.
Following the C-19 pandemic, Clontarf Energy also restored contacts with the
Ghanaian authorities to update the acreage to be explored, and resuscitate the
ratification of our signed Petroleum Agreement on Tano 2A Block. Slowness in
ratification of signed contracts had constrained the development of Ghana's
oil and gas industry. The current Ghanaian government has indicated its
determination to recover momentum. Ghanaian fiscal terms are competitive,
while West African infrastructure steadily improves.
Financial markets and farm-out interest in petroleum had been depressed since
the oil price war starting in 2014, and continuing periodically until 2022.
This had constrained our options for early seismic or wells in Ghana or
Chad. But recent price surges show that major new investment is required to
service global demand. Clontarf plans to participate in the coming boom.
Aside from petroleum, Clontarf advanced its negotiations with international
Direct Lithium Extraction (DLE) processing experts, and has agreed in
principle on a Joint Venture to test brines in medium-sized Bolivian
salt-lakes. Our priority has been to maximise throughput without relying on
extensive evaporation ponds. At the same time, the rising battery market now
requires over 99.5% Lithium content, with minimal impurities, especially
Magnesium. It has been a long process, but we now anticipate that high
recoveries may be possible with these specifications at a reasonable cost.
Nonetheless only full-scale production will confirm performance.
There is rising market and investor interest in DLE, both in Bolivia and
elsewhere, due to surging demand for battery-grade lithium salts, both in EVs,
grid storage and other "Green Transition" requirements. If laboratory
test-work results are satisfactory, we understand that Australian and other
funding is available to build an on-site pilot plant to production test the
Direct Lithium Extraction process.
Preparatory to this work, Clontarf recently conducted an augering campaign on
priority areas of the targeted salt-lakes, subject as always to following
strict environmental standards and obtaining the necessary approvals from the
Bolivian authorities.
Anticipated lithium salts' demand will be impossible to serve without
developing several Bolivian salt-lakes. We expect that the Bolivian Lithium
Law will soon be updated to make clear the legal basis for Joint Ventures with
the authorities.
In oil and gas, the tightening hydrocarbons' supply-demand balance promises a
revival of exploration and the farm-out market. Shortages of piped gas and
LNG feedstock have driven prices to record levels. There has rarely been a
better time to hold prospective acreage.
The resurgence of interest in African exploration and development may lead to
additional proposals in the coming months.
In summary, Clontarf progresses its interests in Bolivia, Australia, Chad and
Ghana, maintaining cordial communications with the relevant authorities, and
continues to operate efficiently on minimal expenditure.
Funding
Subject to technical verification of its exploration projects, and permitting,
Clontarf is confident of adequate funding, whether in London or Australia, for
near to medium term ongoing activities.
David Horgan
Chairman
21 September 2022
This announcement contains inside information for the purposes of Article 7 of
Regulation (EU) 596/2014.
ENDS
For further information please visit http://clontarfenergy.com
(http://clontarfenergy.com) or contact:
Clontarf Energy +353 (0) 1 833 2833
David Horgan, Chairman
Jim Finn, Director
Nominated & Financial Adviser +44 (0) 20 7409 3494
Strand Hanson Limited
Rory Murphy
Ritchie Balmer
Broker +44 (0) 207 399 9400
Novum Securities Limited
Colin Rowbury
Public Relations +44 (0) 207 138 3206
BlytheRay
Megan Ray
Teneo +353 (0) 1 661 4055
Luke Hogg
Alan Tyrrell
Ciara Wylie
Clontarf Energy plc
Financial Information (Unaudited)
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Six Months Ended Year Ended
30 June 22 30 June 21 31 Dec 21
unaudited unaudited Audited
£'000 £'000 £'000
Administrative expenses ( 414 ) ( 137 ) ( 402 )
Impairment of exploration and evaluation assets - - ( 62 )
Sasanof project expenditure (Note 3) ( 4,095 ) - -
LOSS BEFORE TAXATION ( 4,509 ) ( 137 ) ( 464 )
Income Tax - - -
COMPREHENSIVE INCOME FOR THE PERIOD ( 4,509 ) ( 137 ) ( 464 )
LOSS PER SHARE - basic and diluted (0.34p) (0.02p) (0.06p)
CONDENSED CONSOLIDATED STATEMENT OF FINANICAL POSITION
30 June 22 30 June 21 31 Dec 21
unaudited unaudited audited
£'000 £'000 £'000
ASSETS:
NON-CURRENT ASSETS
Intangible assets 868 932 868
868 932 868
CURRENT ASSETS
Other receivables 1 5 2
Cash and cash equivalents 188 470 344
189 475 346
TOTAL ASSETS 1,057 1,407 1,214
LIABILITIES:
CURRENT LIABILITIES
Trade payables (608 ) ( 74 ) ( 65 )
Other payables ( 1,480 ) ( 1,360 ) ( 1,420 )
( 2,088 ) ( 1,434 ) ( 1,485 )
TOTAL LIABILITIES ( 2,088 ) ( 1,434 ) ( 1,485 )
NET LIABILITES ( 1,031 ) ( 27 ) ( 271 )
EQUITY
Called-up share capital 5,927 2,177 2,177
Share premium 10,985 10,985 10,985
Share based payment reserve 186 104 186
Retained deficit ( 18,129 ) ( 13,293 ) ( 13,620 )
TOTAL EQUITY ( 1,031 ) ( 27 ) ( 272 )
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Called-up Share based
Share Share Payment Retained
Capital Premium Reserves Deficit Total
£'000 £'000 £'000 £'000 £'000
As at 1 January 2021 1,792 10,900 104 ( 13,156 ) ( 360 )
Shares issued 385 115 - - 500
Share issue expenses - ( 30 ) - - ( 30 )
Total comprehensive income ( 137 ) ( 137 )
As at 30 June 2021 2,177 10,985 104 ( 13,293 ) ( 27 )
Share based payment charge - - 82 - 82
Total comprehensive income - ( 327 ) ( 327 )
As at 31 December 2021 2,177 10,985 186 ( 13,620 ) ( 272 )
Shares issued 3,750 - - - 3,750
Total comprehensive income - - - ( 4,509 ) ( 4,509 )
As at 30 June 2022 5,927 10,985 186 ( 18,129 ) ( 1,031 )
CONDENSED CONSOLIDATED CASH FLOW Six Months Ended Year Ended
30 June 22 30 June 21 31 Dec 21
unaudited unaudited audited
£'000 £'000 £'000
CASH FLOW USED IN OPERATING ACTIVITIES
Loss for the period ( 4,509 ) ( 137 ) ( 464 )
Impairment of exploration and evaluation assets - - 62
Share based payment charge - - 82
Exchange movements 1 - 1
( 4,508 ) ( 137 ) ( 319 )
Movements in Working Capital 603 49 120
CASH USED BY OPERATIONS ( 3,905 ) ( 88 ) ( 199 )
NET CASH USED IN OPERATING ACTIVITIES ( 3,905 ) ( 88 ) ( 199 )
CASH FLOWS USED IN INVESTING ACTIVITIES
Payments for intangible assets - ( 2 ) ( 15 )
NET CASH USED IN INVESTING ACTIVITIES - ( 2 ) ( 15 )
CASH FLOW FROM FINANCING ACTIVITIES
Issue of shares 3,750 500 500
Share issue expenses 0 (30) (30)
NET CASH GENERATED FROM FINANCING ACTIVITIES 3,750 470 470
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS ( 155 ) 380 256
Cash and cash equivalents at beginning of the period 344 89 89
Exchange loss on cash and cash equivalents ( 1 ) 1 ( 1 )
CASH AND CASH EQUIVALENT AT THE END OF THE PERIOD 188 470 344
Notes:
1. INFORMATION
The financial information for the six months ended 30 June 2022 and the
comparative amounts for the six months ended 30 June 2021 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 U.K. The accounting policies and
methods of computation used in the preparation of the Interim Financial Report
are consistent with those used in the Group 2021 Annual Report, which is
available at www.clontarfenergy.com (http://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. SASANOF PROJECT
On 9 May 2022 the Company announced that it had acquired a 10 per cent.
interest in the high-impact multi-TCF (Trillion Cubic Feet) Sasanof
exploration prospect (located mainly within Exploration Permit WA-519-P)
through the acquisition of a 10 per cent. interest in Western Gas, which
wholly owns the prospect.
The Acquisition consideration comprised of a cash consideration of
US$4,000,000, and 100,000,000 ordinary shares of 0.25p each in the Company. In
the event of a discovery being declared at the Sasanof-1 Well, further
consideration would have been payable.
On 6 June 2022 the Company announced that no commercial hydrocarbons were
intersected and the Sasanof-1 Well would be plugged and permanently abandoned.
De-mobilisation activities would then commence. Accordingly, the total costs
of £4,095,294 incurred on the Sasanof-1 Well were written off in full in the
current period.
4. GOING CONCERN
The Group incurred a loss for the period of £4,508,893 (2021: £463,501) and
had net current liabilities of £1,898,554 (2021: £1,139,661) at the balance
sheet date. These conditions, as well as those noted below, 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 £1,480,565 (2021:
£1,420,565) owed in respect of unpaid remuneration due at the balance sheet
date. The directors have confirmed that they will not seek settlement of these
amounts in cash until 31 December 2024.
The Group had a cash balance of £188,459 (2021: £344,253) at the balance
sheet date. The directors have prepared cashflow projections for a period of
at least 12 months from the date of approval of the financial statements which
indicate that the group will require additional finance to fund working
capital requirements and develop existing projects. As the Group is not
revenue or cash generating it relies on raising capital from the public
market. On 27 April 2022 the Group raised £3,500,000 on a placing, further
information is detailed in Note 9.
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.
5. LOSS PER SHARE
Basic loss per share is computed by dividing the loss after taxation for the
year attributable 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 22 30 June 21 31 Dec 21
£'000 £'000 £'000
Loss for the year attributable to equity holders (4,509) (137) (464)
Denominator Number Number Number
For basic and diluted EPS 1,328,908,309 763,344,558 817,717,558
Basic and diluted EPS (0.34p) (0.02p) (0.06p)
Basic and diluted loss per share are the same as the effect of the outstanding
share options is anti-dilutive and is therefore excluded.
6. INTANGIBLE ASSETS
30 June 22 30 June 21 31 Dec 21
£'000 £'000 £'000
Exploration and evaluation assets
Cost:
At 1 January 8,640 8,625 8,625
Additions - 17 15
Closing Balance 8,640 8,642 8,640
Impairment:
At 1 January 7,772 7,710 7,710
Provision for impairment - - 62
Closing Balance 7,772 7,710 7,772
Carrying value:
At 1 January 868 915 915
At period end 868 932 868
Regional 30 Jun 22 30 Jun 21 31 Dec21
Analysis
£'000 £'000 £'000
Bolivia - 79 -
Ghana 868 853 868
868 932 868
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.
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 Ghanaian government.
The Company is in negotiations with the Ministry of Electricity Technologies
and the State Lithium Company in Bolivia on exploration and development of
salt-lakes in accordance with law. Samples have been analysed and process work
is underway.
The Group incurred expenditure of £62,074 in Bolivia up to 31 December 2021.
As no licences have yet been granted, the directors decided to impair the
costs. Accordingly, an impairment of £62,074 was been recorded by the Group
in the prior year.
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.
The Group's activities are subject to a number of significant potential risks
including:
· licence obligations;
· exchange rate risks;
· uncertainties over development and operational costs;
· political and legal risks, including arrangements with
Governments for licences, profit sharing and taxation;
· foreign investment risks including increases in taxes,
royalties and renegotiation of contracts;
· title to assets;
· financial risk management;
· going concern; and
· ability to raise finance.
7. TRADE PAYABLES
30 June 22 30 June 21 31 Dec 21
£'000 £'000 £'000
Creditor - Western Gas 550 - -
Trade payables 48 64 49
Other accruals 10 10 16
608 74 65
Creditor - Western Gas relate to cash calls due for costs incurred on the
Sasanof-1 Well accrued but not paid at period end.
8. OTHER PAYABLES
30 June 22 30 June 21 31 Dec 21
£'000 £'000 £'000
Amounts due for unpaid remuneration 1,480 1,360 1,420
1,480 1,360 1,420
Other payables relate to amounts due to directors and former director for
remuneration accrued but not paid at period end.
9. SHARE CAPITAL
Allotted, called-up and fully paid:
Number Share Capital Premium
£'000 £,000
At 1 January 2021 716,979,964 1,792 10,900
Issued during the period 153,846,153 385 115
Share issue expenses - - (30)
At 30 June 2021 870,826,117 2,177 10,985
Issued during the period - - -
At 31 December 2021 870,826,117 2,177 10,985
Issued during the period 1,500,000,000 3,750 -
At 30 June 2022 2,370,826,117 5,927 10,985
On 6 May 2021 the Company raised £500,000 via a placing of 153,846,153
ordinary shares at a price of 0.325p per share. Proceeds raised were used to
provide additional working capital and fund development costs.
On 5 May 2022 the Company raised £3,500,000 via a placing of 1,400,000,000
ordinary shares at a price of 0.25p per share. Proceeds raised were used to
finance the drilling of the Sasanof-1 Well in Western Australia.
On 9 May 2022, as part of the acquisition of a 10% interest in the Sasanof-1
Well, the Company issued 100,000,000 shares at a price of 0.25p per share to
Western Gas Australia.
10. 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.
During 2019, 40,500,000 options with an exercise price of 0.7p were granted
with a fair value of £246,788. These options will vest over a 3 year period
and will be capitalised or expensed on a straight line basis over the vesting
period.
Fair value is measured by use of a Black-Scholes valuation 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.
30 Jun 22 30 Jun 21 31 Dec21
Options Number Weighted average exercise price in pence Options Number Weighted average exercise price in pence Options Number Weighted average exercise price in pence
'000 '000 '000
At 1 January 40,500 0.7 40,500 0.7 40,500 0.7
Issued - - -
Outstanding at end of period 40,500 0.7 40,500 0.7 40,500 0.7
Exercisable at end of period 30,500 0.7 27,167 0.7 30,500 0.7
WARRANTS
30 Jun 22 30 Jun 21 31 Dec21
Warrants Weighted average exercise price in pence Warrants Number Weighted average exercise price in pence Warrants Weighted average exercise price in pence
Number '000 Number
'000 '000
At 1 January - - - - -
Issued 435,683 0.25 - - - -
Exercisable at end of period 435,683 0.25 - - - -
On 12 January 2022, the Company announced that as a result of it accruing and
not paying in cash, salaries of the Directors since 2010, the accrued
liability as at 31 December 2021 for the three longest serving directors (Dr
Teeling, Mr Horgan and Mr Finn) was £1,340,564. The Board remains cognisant
of the need to conserve cash resources in the current environment and
therefore Dr Teeling (who has now retired from the Board), Mr Horgan and Mr
Finn have agreed to continue deferring payment of this amount, in cash, until
the end of 2024.
In consideration for this past and continued deferral, the Company have issued
3.25 warrants over Ordinary Shares per each 1p of accrued salary due until 31
December 2021. The Warrants are exercisable at 0.25p at any time until 11
January 2025 and have been allocated as follows:
Accrued salary (£) Warrants exercisable at conversion price of 0.25p per share
David Horgan £569,037 184,937,025
John Teeling £395,704 128,603,800
James Finn £375,823 122,142,475
Accordingly, in aggregate, 435,683,300 Warrants have been issued. Any exercise
of the Warrants is restricted to the extent that, if by exercising, the
Warrant holders in aggregate hold greater than 29.9 per cent. of the total
voting rights of the Company.
For the avoidance of doubt, the deferred salaries, unless otherwise settled,
will remain payable in cash after the end of 2024.
11. POST BALANCE SHEET EVENTS
There were no material post balance sheet events affecting the group or
company.
12. The Interim Report for the six months to 30 June 2022 was approved by the
Directors on 21 September 2022.
13. The Interim Report will be available on the Company's website at
www.clontarfenergy.com (http://www.clontarfenergy.com) .
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