Clontarf Energy : Annual Results

Clontarf Energy plc

('Clontarf' or 'the Company')

Final Results for the Year Ended 31 December 2015

Clontarf Energy, the oil and gas exploration company focused on Ghana, today announces its results for the year ending 31 December 2015.

For further information please visithttp://clontarfenergy.com or contact:

Clontarf Energyplc

John Teeling, Chairman +353 (0) 1 833 2833

David Horgan, Director

Nominated Adviser and Broker

Northland Capital Partners Limited

David Hignell / Gerry Beaney +44 (0)20 3861 6625

John Howes (Broking)

Public Relations

Blytheweigh +44 (0)20 7138 3204

Tim Blythe +44 (0) 7816 924 626

Camilla Horsfall +44 (0) 7871 841 793

PSG Plus

Colm Heatley +353 (0) 1 661 4055

Alan Tyrrell +353 (0) 1 661 4055

Statement Accompanying the Final Results

Clontarf maintains an active interest in three countries; Peru, Bolivia and Ghana. In Peru, we have a 3% royalty on all hydrocarbon production arising from Block 183 in central Peru up to a maximum of US$5 million on each of two discoveries. In Bolivia, where we have been since 1988, we struggle to hold on to our interests; one in Monteagudo, central Bolivia and the other, El Dorado in the East. A nationalisation decree passed in 2006 has made it impossible to invest. In Ghana, we hold a 60% interest in an offshore licence, originally agreed in 2008 and re-issued in 2010. The licence has been the subject of court proceedings. Recently, at the request of the authorities, we submitted a proposal on an alternative deep water block. The application has been lodged in early 2016 and is being examined.

It is important for shareholders to realise why we persist in attempting to extract value from our projects though carried at no value in the books. Millions have been invested in each country. Each project in each country has potential. We are trying to monetise this potential. AIM listed explorers in recent years have had a torrid experience. Clontarf is no exception having seen its share price decline by over 90% since listing in 2011. Financing has been difficult if not impossible to secure. Clontarf has had the support of Directors and a South American based investment fund. We have cut spending to the bone and are financed for the immediate future. There are signs of a revival which we hope will create opportunities.

We have looked at and continue to examine options to move forward including changing the Board, using the listed vehicle and bringing in new projects.

Peru

Union Oil and Gas Group ('UOGG'), a subsidiary of Union Group, a privately held company that invests in natural resources and infrastructure in Latin America, acquired control in 2013 of Hydrocarbon Exploration's Peruvian onshore oil and gas Block 183 in the Marañon Basin. Hydrocarbon was a subsidiary of Clontarf. Since inception in 2007, Union Group has focused on high growth Latin American economies characterised by under-developed natural resources and infrastructure sectors, a stable political environment and robust economic regulation. Companies under Union Group's umbrella have an estimated combined value of approximately US$1 billion. In 2013, leading Canadian investment house, Dundee Corporation, acquired a minority stake.

Block 183 in central Peru contains up to 2.2 trillion cubic feet (TCF) of potential gas reserves and a high probability of condensates. It has two oil and gas prospects in anticlines associated with the Sarayaquillo sandstones (Chipurana and Alfaro) located in the Marañón Basin, which has produced oil and gas since the 1940s. The block covers 396,826 hectares, has good transport infrastructure and is located next to two oil fields and one gas field in adjacent blocks.

Clontarf Energy plc holds a 3% over-riding royalty inBlock 183. This 3% over-riding royalty is capped at US$5 million per oil and / or gas discovery and US$10 million in total. This block was won by Clontarf Energy in the 2010 bid round, signed in 2011 and farmed out to Peru Oil & Gas Exploration Limited ('POGEL') in August 2013 and sold onto Union.

A Union team is now revising the technical work previously done. Initial geological work is complete and appears to be positive. The gas market remains strong in north-central Peru, with continued economic growth so there is a market opportunity for any discovery.

Bolivia

Clontarf's Bolivian interests have effectively been dormant in recent years due to government policy towards international oil and gas investors, in effect, nationalisation. Following the commodities price crash, however, there are signs of a more business friendly government policy emerging. With growth rates above 5%, Bolivia is one of the fastest growing economies in the region with a programme aimed at increasing investment flows, but with no certainty of title you cannot invest shareholders' money.

In 2015 we had discussions with Bolivian and Irish diplomatic officials in the hope of addressing outstanding issues so as to be able to move forward. So far we have not been able to resolve these issues on terms satisfactory for Clontarf shareholders. No title and no compensation proposals caused us to declare force majeure on both our Monteagudoand El Dorado interests. There is significant gas potential at deeper levels in Monteagudo while El Dorado is a producer. The assets are good but we must have clarity on what will happen to investments.

Ghana

Progress has continued to be slow in Ghana, where there were further delays to oil and gas projects. Our discussions have dragged on for years. It is hard to be confident about the system's ability to function properly but we are protecting our interests. Clontarf believes that the only way for an international investor to operate is by strict adherence to local and international rules. We have steadfastly defended the fiscal terms incorporated in our signed Petroleum Agreement on Tano 2A Block, though we are prepared to be flexible on operational details and block coordinates so long as stakeholder interests are protected. Geological potential and fiscal terms makes Ghana one of the most attractive under-explored petroleum provinces worldwide. Though Government changes and uncertain policy have delayed progress, and the political and legal processes lack transparency, there is a functioning bureaucracy and the rule of law exists though questions are being asked. We need resilience and patience. Neither Clontarf, nor its 60% Ghanaian subsidiary Pan Andean Resources Ltd.,have yet received an official response regarding our proposed revised coordinates for our Tano 2A Block, originally signed in 2008 and revised and again signed in 2010.

In January 2016 Clontarf was invited to study a separate and additional deep-water block that had been relinquished by Lukoil - apparently due to financial pressure unrelated to Ghana. There had already been a discovery announced on this acreage

Following a detailed review of the acreage's history, as well as recent seismic data and well logs, Clontarf submitted a proposal on this new block which has been well received and is under evaluation. The primary target appears to be the 'Turancian' reservoir section - lower part of the Upper Cretaceous. Water depth slopes sharply from 200m through 3,200m (though the main area of interest seems to be between 500 and 1,500 metre water depth). Work done included 3D seismic and 4 wells:

Ø There were 2 wells in 'north salt pond' - this seems a similar play to the Irish Atlantic Porcupine Basin, drilled on obvious features identified by 2D seismic (late 1990s and early 2000s).

Ø The previous operator acquired 3D seismic in the southern central section and drilled a deep well to the west on a cross-over of 2 x 2D seismic lines (completed in 2014).

Ø The Dzata 2A (2011) well was drilled to 4,517 metres in 1,774 metres of water - though the most prospective sections are at shallow rock depth (2,000 to 2,700 metres).

Ø There is good quality 3D seismic from a PGS programme in 2005.

The acreage has undoubted potential though questions regarding its overall feasibility remain.

Though we learnt a great deal from our initial work on this new area, the geology remains confusing. After ratification, we need a detailed interpretation exercise - but are reluctant to incur this expense until title is granted, signed and ratified. We have been assured (April 2016) that the new application is receiving 'very serious attention' at the GNPC and Ministry.

Future

What can we do with Clontarf? Firstly we continue to press for resolution of our disputes in Ghana and Bolivia. As a royalty holder in Peru we have no active involvement in activities on Block 183 but work does appear to be ongoing.

We have an AIM listing, big shareholder base, access to potential investors, some cash and extensive experience in the exploration sector. This is an attractive package for entrepreneurs wishing to grow a natural resources company. We have followed this approach but so far have had no success. We can reboot Clontarf and seek out new opportunities. Our philosophy of accepting higher political risk versus lower geological risk has served us well elsewhere but not to date in Clontarf. To provide maximum flexibility with regards to future funding we are proposing to change the par value of existing shares from 0.25p to 0.10p as set out in Resolution 5 in the Notice of Company's forthcoming Annual General Meeting. This has no impact whatsoever on the value of existing shares or the number of shares in issue.

The fall in oil prices has decimated the junior resource sector, ourselves included, but has resulted in opportunities becoming available. To date we have not found any which excite us but we are monitoring a number of possibilities.

John Teeling

Chairman

26 May 2016

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CLONTARF ENERGY PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2015

CONSOLIDATED BALANCE SHEET AS AT 31 DECEMBER 2015

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2015

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 2015 and prior years.

CONSOLIDATED CASH FLOW STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2015

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 2014. 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):

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 £204,537 (2014: £274,196) and had net current liabilities of £627,707 (2014: £383,170) 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.

The Group had a cash balance of £225,916 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.

Included in current liabilities is an amount of £800,567 (2014: £710,567) 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.

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

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.

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.

4. INTANGIBLE ASSETS (CONTINUED)

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

6. OTHER PAYABLES

Other payables relate to amounts due to directors' remuneration of £800,567 (2014: £710,567) accrued but not paid at year end. 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.

7. CALLED-UP SHARE CAPITAL

Movements in issued share capital

On 14 January 2014 a total of 7,231,975 shares were issued at a price of 1.3 pence per share in settlement of outstanding professional fees amounting to £94,016.

On 17 July 2014 a total of 79,767,067 shares were issued at a price of 0.75 pence per share to South American lenders in settlement of the total principal amount and interest outstanding on the loans in the subsidiary company Hydrocarbon Exploration Limited.

On 21 July 2014 a total of 16,200,000 shares were placed at a price of 0.75 pence per share. Proceeds were used to provide additional working capital and fund development costs.

On 21 July 2014 a total of 79,413,699 shares were issued at a price of 0.75 pence per share to directors in settlement of unpaid directors remuneration and loans.

On 28 October 2014 a total of 71,428,571 shares were placed at a price of 0.70 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 2015 (2014: 8,940,000). 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 30 June 2016 at the Double Tree by Hilton Hotel London ExCel, ExCel, 2 Festoon Way, Royal Victoria Dock, London, E16 1RH at 10:30am.

9. GENERAL INFORMATION

The financial information set out above does not constitute the Company's financial statements for the year ended 31 December 2015 or the year ended 31 December 2014. The financial information for 2014 is derived from the financial statements for 2014 which have been delivered to the Registrar of Companies. The auditors had reported on the 2014 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 2015 will be delivered to the Registrar of Companies.

A copy of the Company's Annual Report and Accounts for 2015 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 websitewww.clontarfenergy.com. Copies of the Annual Report will also be available for collection from the Company's registered office, 20-22 Bedford Row, London WC1R 4JS.