TIDMCLNR
RNS Number : 0473D
Cluff Natural Resources plc
24 April 2017
Cluff Natural Resources Plc / Index: AIM / Epic: CLNR / Sector:
Natural Resources
24 April 2017
Cluff Natural Resources Plc ('CLNR' or 'the Company')
Preliminary Results
Cluff Natural Resources Plc, is pleased to announce its audited
preliminary results for the year ended 31 December 2016 ('FY
2016').
Highlights
-- Successfully repositioned portfolio to focus exclusively on
the Southern North Sea gas basin, a proven region which has seen a
significant pick-up in operational and corporate activity
-- Two core licences include eight distinct prospects in five
proven reservoir bearing formations with gas initially in place
(GIIP) estimates of between 1.4 and 9.5 TCF (P10-P90 Range)
-- Tripling of the P50 prospective resources contained within
the Company's two licences to approximately 2.4 trillion cubic feet
of gas following an independent technical audit and CPR and further
technical work
-- Post period end Scoping Study on Cadence-Scremerston and
Basset Bunter prospects on Licence P2248 indicated robust economics
and highly positive NPVs in various development scenarios
-- Implied extrapolated NPV (unrisked) of GBP697m for the six identified prospects on P2248
-- Data room opened post period end in January 2017 to secure
partner(s) to participate in drilling exploration wells on the
Company's licences - significant level of interest seen
-- Extension and revision of MOU with Halliburton for a further
two years to February 2018 to focus on the development of the
Company's conventional assets in the Southern North Sea
-- Board strengthened following the appointment of Mark Lappin,
recently E&P Subsurface Director (UK and Netherlands) at
Centrica
-- GBP2.5 million raised by way of the placing of new ordinary shares in April and November 2016
-- Cash position of GBP1.71 million as at 31 December 2016 (2015: GBP1.11 million)
-- Cash used in operations for the period reduced to GBP1,334,065 (2015: GBP1,394,277)
-- Loss for the period reduced to GBP1,730,606 (2015:
GBP1,872,099) - includes non-cash impairment charge for
relinquished licences
Chairman and Chief Executive's Statement
While the market for oil and gas companies remains challenging I
believe there has been a significant improvement in sentiment, both
within and towards the industry. The last few months have seen
increased M&A activity, an increasing number of farm-ins, the
re-structuring and re-capitalisation of major mid-tier companies
and certain oil and gas majors committing to long term production
from the UKCS, including BP's publicly stated ambition to double
their production from UK waters.
Of more significance to your Company is the recent
re-affirmation of the prospectivity and long term future of the
Southern North Sea gas basin and its strategic importance to the
UK. Of special note is the recent acquisition of the Breagh asset,
which is adjacent to our licences, by Oranje-Nassau Energie, the
spudding of a deep Carboniferous exploration well on the Ravenspurn
gas field by BP and Centrica's renewed interest in exploration
evidenced by the award of a tranche of blocks immediately to the
North of our existing licences in the recently announced 29th
Offshore Licencing Round.
This increased positivity towards the Southern Gas Basin has
also manifested itself in the significant level of interest and
traffic through our dataroom which was formally opened in January
to facilitate the farm-out of our existing portfolio of high
quality exploration assets. Of relevance to this process I am
pleased to reaffirm the announcement in October 2016 of an
independent technical audit and CPR and further technical work
announced in December 2016, which has resulted in a tripling of the
P50 prospective resources contained within this portfolio to
approximately 2.4 trillion cubic feet of gas.
We also recently announced the findings of a Scoping Study on
just two of the six identified prospects on licence P2248 which
demonstrated robust economics for these prospects and extrapolated
an overall implied unrisked NPV of GBP697 million for all six of
the prospects on this licence. This study has confirmed our
long-held conviction that exploring for gas in the Southern North
Sea can deliver significant value for shareholders and the UK as a
whole. Should exploration wells prove commercial quantities of gas
in line with expectations, then these economics demonstrate that
cost effective development options are readily available, a key
consideration for any operator or investor looking at the Company's
exploration assets.
Being a UK company with exclusively UK North Sea interests, your
management is accountable to shareholders for adopting that
position. We have done so for a number of reasons. Firstly,
notwithstanding the apparent view of many of the major oil
companies that the North Sea no longer offers the prospect of major
discoveries (about which they may well be in error), it is widely
agreed that there remain many licences which contain high quality
exploration targets. HMG has the power to render those targets even
more attractive by fiscal incentive. Secondly, the North Sea is
well run. Thirdly, it is secure. And, fourthly, it contains many
existing discoveries (which the UK's Oil & Gas Authority (OGA)
estimates to be in excess of three hundred) which remain
undeveloped. The OGA is due to announce the 30th round of licence
awards and we are advised that this round will include such "small
pools" of oil and gas which will reduce much of the exploration
risks whilst offering, in some cases, immediate resources. We have
been giving much thought to this eventuality and are determining
how to respond with the intention of applying when the round is
announced. It is my view that this could herald a "North Sea Phase
Two" with the OGA estimating that as much as 3.4 billion barrels of
oil equivalent is distributed amongst these pools.
In line with our stated UK focused strategy, the Company looked
to strengthen the Board and I am particularly pleased to refer to
the appointment of Mark Lappin as a Non-Executive Director. Mark's
most recent role was that of E&P Subsurface Director (UK and
Netherlands) at Centrica and brings a wealth of relevant technical
and commercial North Sea experience to the Company as well as an
inventive mind.
We have also raised GBP2.5 million of cash by way of equity
during the period under review and wish to thank our shareholders
for their support.
Our destiny is directly linked to the North Sea and the absence
of any major commitments and debt gives us a theoretical agility
which most other companies lack. It is our duty as management to
convert that theory into action.
J G Cluff
Chairman and Chief Executive
24 April 2017
Operational Review
The year has seen a significant maturation of the Company's
resource base and reorganisation of the Company's portfolio as we
actively reduced our acreage position to focus on our two core
assets. Significantly, despite this rationalisation of the
portfolio, the Company's overall net prospective resource position
has increased threefold during the period under review as new
prospects were identified and matured through ongoing technical
workflows. This work culminated in the publication of a Competent
Person's Report on P2248 and an updated resource estimate on P2252
with the portfolio now comprising eight distinct prospects in five
different proven reservoir bearing formations with gas initially in
place (GIIP) estimates of between 1.4 and 9.5 TCF (P10-P90
Range).
The Company has been actively promoting and marketing its assets
over recent months with the intention of finding a partner, or
partners, to participate in the drilling of exploration wells on
these core licences. A dataroom was formally opened in January and,
despite what are still challenging conditions in the exploration
sector, the Company has seen a significant level of interest in its
assets from established North Sea operators and potential new
entrants to the market.
This interest has been positively influenced by a number of
macro factors including the stabilisation of the oil price in the
$50-60 range, renewed commitment by majors such as BP to the North
Sea and increasing M&A activity within the basin, including a
number of major private equity backed transactions. 2017 is likely
to be a key year for the Southern North Sea Gas Basin, with
significant activity expected in the vicinity of the Company's
licences. This will include the results of the BP well being
drilled in the Southern North Sea to a deep Carboniferous prospect
near the Ravenspurn field, which could open up a new carboniferous
play in the region, the drilling of a further exploration well
immediately adjacent to the Cadence prospect by Centrica and the
potential submission of field development plans for Centrica's
Pegasus discovery and Premier's Tolmount discovery.
Portfolio Management and Rationalisation
As announced previously, the Southern North Sea portfolio has
been rationalised to focus on our two core assets and offset the
financial burden associated with those areas sterilised by
potential offshore windfarm developments or which had insufficient
data to fully support a farm-out process. This resulted in the
surrender of licences P2259 and P2261 and a partial relinquishment
of licence P2252 which roughly halved the acreage on this
licence.
Licences P2253 and P2258, in which the Company held a 50%
non-operated interest following a cross assignment, were also
surrendered following a decision by the OGA not to grant an
extension on these blocks. This has resulted in a three quarter
reduction in the Company's net acreage and the equivalent reduction
in licence fees which would otherwise have been payable.
The areas covered by licences P2253 and P2258 will be included
in the 30(th) licensing round to be held later this year and the
Company is reviewing the options for relicensing these areas under
the more favourable 'Innovate' licence terms now being offered by
the OGA.
The 'Promote' terms on the Company's core 100% owned assets on
P2252 and P2248 were extended for a period of 12 months to 30
November 2017 by the OGA in recognition of the challenging farm-out
market in recent years and the length of time required to complete
deals in the current oil price environment.
The Company is currently running an active farm-out process
which has attracted interest from a number of established North Sea
operators. The Company's aim is to complete a farm out in advance
of the expiry of these licences which will involve a drilling
commitment such that the OGA continues the licences into their
fourth year. In the event that such a farm-out is not concluded
before the expiry dates, the Company would be reliant on the OGA to
grant a further extension to allow the Company to continue ongoing
farm-out discussions.
Licence and Resource Summary
Following the rationalisation of the portfolio and updated
resource statements, the Company's current licence portfolio and
prospect inventory, as of April 2017, is summarised below:
Licence Prospect Reservoir GIIP Range Prospective Resources CoS
Formation (BCF) (BCF) %
--------- ----------- ------------------------- ----------- ---------------------------- ----
P90 - P90 P50 Mean* P10
P10
--------- ----------- ------------------------- ----------- ---- ------ ------ ------ ----
120 -
P2248 Camden Yoredale 782 58 160 204 405 15
Q43
240
km(2)
------------------------------------------------- ----------- ---- ------ ------ ------ ----
101 -
Cadence Scremerston 658 59 165 206 410 18
----------- ----------------------------------- ----------- ---- ------ ------ ------ ----
187 -
Fell Sandstone 3,574 111 604 923 2,175 9
----------------------------------------------- ----------- ---- ------ ------ ------ ----
Bunter
Bassett Sandstone 49 - 374 36 128 153 303 29
----------- ----------------------------------- ----------- ---- ------ ------ ------ ----
169 -
Bathurst 704 119 275 317 571 18
-------------------------------------- -------- ----------- ---- ------ ------ ------ ----
134 -
Beckett 1,095 97 403 460 892 18
-------------------------------------- -------- ----------- ---- ------ ------ ------ ----
Fractured 117 -
P2252 Lytham Hauptdolomite 416 52 123 137 244 49
Q41
358
km(2)
------------------------------------------------- ----------- ---- ------ ------ ------ ----
Carboniferous 22-249 12 44 68 149 30
----------------------------------------------- ----------- ---- ------ ------ ------ ----
Fairhaven Fractured Hauptdolomite 40 - 170 18 45 53 98 30
----------- ----------------------------------- ----------- ---- ------ ------ ------ ----
Fringing 216 -
Pensacola Reef 1,077 113 270 338 650 20
----------- ----------------------------------- ----------- ---- ------ ------ ------ ----
254 -
Reef Fill 651 67 154 186 347 16
----------------------------------------------- ----------- ---- ------ ------ ------ ----
1,409
TOTALS** - 9,750 742 2,371 3,045 6,244
------------------------------------------------- ----------- ---- ------ ------ ------ ----
*Mean resources have been added for completeness but is not
recognised under PRMS guidelines
**Resources have been aggregated for simplicity but are not PRMS
compliant
P2248 - Field Development Plans and Economics
On 20 April 2017, the Company announced the results of an
independent Scoping Study on field development plans and economic
analysis on the Cadence Scremerston and the Bassett Bunter
prospects representing just two of the six identified prospects on
Licence P2248.
The economics of each prospect, based on a stand-alone
development, were tested against numerous potential exploration
outcomes and development scenarios and using a gas price profile
based on UK NBP gas price futures forecasts (as of 7 March 2017)
from 2017 to the end of 2021, with gas prices from 2022 onwards
increasing at 2% per annum. The economic evaluation indicated
highly positive NPV values for both prospects and even in the P90
(i.e. low side recoverable gas volumes) NPV positive outcomes are
possible. The outputs of the economic modelling for a selected
representative development scenario for each prospect are presented
in the table below:
Prospect Formation Unrisked Chance Unrisked NPV(10) EMV
P50 Prospective of
Resources Success
(BCF)(1)
(GBPGBPMillions) (GBPGBPMillions)
---------- ------------- ------------------------- --------- ------------------------- ------------------
Low Mid High % Low Mid High Post-Drill
(P90) (P50) (P10) (P90) (P50) (P10) Success
EMV
---------- ------------- ------- ------- ------- --------- ------- ------- ------- ------------------
Cadence Scremerston 59 165 410 18 12.7 47.6 285.8 86.6
---------- ------------- ------- ------- ------- --------- ------- ------- ------- ------------------
Bassett Bunter 36 128 303 29 3.0 41.8 183.1 69.0
---------- ------------- ------- ------- ------- --------- ------- ------- ------- ------------------
(1) These figures are sourced from the Competent Person's Report
on P2248 published in October 2016.
The Scoping Study indicated that other prospects on Licence
P2248, which would be significantly de-risked by exploration
success, provide significant further possible upside to the
economic cases presented below, but were not the focus of this
study. Additionally, it is expected that significant CAPEX and OPEX
synergies could be realised if two or more prospects are developed
as a cluster as opposed to a stand-alone development.
Cadence-Scremerston Highlights
-- Modelled stand-alone development options included P90, P50
and P10 resource volumes, low and high CO(2) cases, different
export routings and varying production well performance outcomes
using the nearby Breagh field as the key analogue
-- Mid-case NPV(10) of GBP47.6 million for selected development
case (P90 to P10 range of GBP12.7 million to GBP285.8 million)
-- EMV of GBP86.6 million assuming a discovery results from the proposed exploration well
-- Cash flow positive after 18 months with a payback period of
three years for the selected P50 development case
-- Assumes no contribution from the Cadence-Fell or Camden
prospects which contain significant upside potential (P50
prospective resources of 764 BCF in aggregate) assuming exploration
success
Bassett Prospect
-- Modelled development options included P90, P50 and P10
resource volumes, low and high CO(2) cases, different export
routings and varying production well performance outcomes using the
nearby Esmond field as a primary analogue
-- Mid-case NPV(10) of GBP41.8 million for selected development
case (P90 to P10 range of GBP3.0 million to GBP183.1 million)
-- EMV of GBP69.0 million assuming a discovery results from the proposed exploration well
-- Cash flow positive after 18 months with a payback period of
less than three years for the selected P50 development case
-- Assumes no contribution from the Bathurst and Beckett
prospects which contain significant upside potential (P50
prospective resources of 678 BCF in aggregate) assuming exploration
success
Additionally, the Scoping Study indicated an implied
extrapolated un-risked NPV for the six identified prospects on
Licence P2248 of GBP697 million.
A copy of the full Scoping Study can be found on the Company's
website.
Options over Central North Sea and Outer Moray Firth oil
licences
On 10 May 2016, the Company announced that it had agreed to
acquire, subject to approvals, a 5% equity stake from Verus
Petroleum UK Limited ('Verus') in licences P1944 and P2156 located
in the Moray Firth which contain the Fynn & Penny prospects and
a contemporaneous exclusive option for nine months to acquire a 25%
stake in licence P2082.
While the assets remain technically attractive, the ongoing
uncertainty around the incumbent partners, in particular their
willingness and/or financial ability to drill the wells required to
test the prospects, has resulted in the Oil and Gas Authority not
extending the licence terms on P2082 and the option period on P1944
and P2156 expired without an explicit commitment to drilling the
well required to secure this licence in the next term.
While neither option was exercised, it is understood that both
areas of interest are likely to be available for re-licencing in
the 30(th) Round, which gives the Company the option to re-acquire
an interest in these attractive assets without exposure to back
costs and in conjunction with a more aligned group of partners. No
decision has been made on participation at this stage but the
Company will review the situation once the 30(th) Licencing Round
is announced, most likely in Q2 of 2017.
Underground Coal Gasification
In the absence of a supportive policy on UCG emerging from
Westminster and the indefinite extension of the UCG Moratorium in
Scotland, the Company has today notified The Coal Authority, as the
responsible authority for issuing UCG licences, that it is
relinquishing its nine UCG licences.
Given the uncertainty around the future of these assets which
has existed for some time, these licences had already been fully
written down in the Company's 2015 accounts.
Halliburton Memorandum of Understanding
In February 2016, the Company agreed a two year extension of the
existing Memorandum of Understanding (MoU) with Halliburton, a
leading global provider of services to the energy sector. The MoU
was revised to focus on the development of the Company's
conventional assets in the Southern North Sea and the collaboration
with Halliburton continues to be of great value to the Company
through access to experienced technical specialists and cutting
edge technology and processes which would normally be out of the
reach of companies of our size.
Future developments
While the Company's core focus, quite rightly, has been on the
farm-out of its existing assets, there has also been significant
commitment to the longer term future of the Company. This will
include investment in the 30(th) Licensing Round which is expected
to be announced in Q2 of 2017.
The 30(th) Offshore Licensing Round is focused on mature
producing areas, including the Company's core area of the Southern
North Sea Gas basin, and will include both exploration
opportunities and a large number of unsanctioned discoveries. The
Company anticipates making an application for a number of blocks in
the 30(th) Round providing a pipeline of future opportunities for
adding shareholder value.
In addition to the proposed organic growth via advertised
licensing rounds, the Company continues to review other potential
opportunities to grow the Company's portfolio both within the UKCS
and further afield.
A J Nunn
Chief Operating Officer
24 April 2017
Financial Review
Since the start of 2016, all major expenditure has been focused
on the development of the Company's portfolio of conventional North
Sea assets and in the appraisal of a number of other natural
resources opportunities in accordance with the Company's investing
policy, in addition to on-going administrative expenditure.
Loss for the period
The Company incurred a loss for the year to 31 December 2016 of
GBP1,730,606 (2015: GBP1,872,099). The loss for 2016 included an
impairment charge in relation to the carrying value of the North
Sea gas licences (P2259, 2261, 2253 and 2258) which it relinquished
in the year. This charge amounted to GBP318,407 (2015:
GBP336,790).
Cash flow
In the year to 31 December 2016, net cash used in operating
activities was slightly lower than the previous year at
GBP1,334,065 (2015: GBP1,394,277) with an additional GBP447,735
used in investing activities (2015: GBP503,308). This was offset by
cash (net of expenses) received of GBP2,375,658 from the placing of
new ordinary shares in April and November 2016.
Consequently, in the year to 31 December 2016, the Company
experienced a net cash inflow of GBP593,858 (2015: GBP93,585
outflow).
Equity fundraising
On 6 April 2016, the Company announced that it had raised
GBP727,000, before expenses, through the aggregate placing and
subscription of 58,171,200 new ordinary shares each at 1.25 pence
per share with new and existing institutional and private
investors. Admission of the shares to trading on AIM occurred in
April 2016. The purpose of this placing was to fund the Company's
activities to the end of 2016.
On 3 November 2016, the Company announced that it had raised a
further GBP1.8 million, before expenses, through the aggregate
placing and subscription of 72,000,000 new ordinary shares each at
2.5 pence per share with new and existing institutional and private
investors. Admission of the shares to trading on AIM occurred in
November 2016.
Following these placings, there were 329,393,532 ordinary shares
in issue (2015: 199,222,332).
Closing cash
As at 31 December 2016, the Company held cash balances of
GBP1.71 million (2015: GBP1.11 million).
Shareholders' equity
As at 31 December 2016, there were 329,393,532 (2015:
199,222,332) ordinary shares in issue.
Additionally, a total of up to 50,096,901 (2015: 28,540,000) new
ordinary shares may be issued pursuant to the exercise of share
options or warrants.
Going concern
The inherent nature of the Company means that it is dependent on
its existing cash resources and its ability to raise additional
funding in order to progress its exploration programme on an
ongoing basis. Based on the cash balance at year end and the
Company's commitments, the Company has adequate financial resources
to cover its budgeted exploration and development programme until
the fourth quarter of 2017. Further funding will likely be required
to allow the Company to fully implement its strategy beyond this
period and it therefore anticipates that further funds will be
raised, most likely by way of equity, as it has successfully done
in the past.
Key performance indicators
At this stage in its development, the Company is focusing on the
development of its existing North Sea gas assets, applying for
additional licences, as well as the evaluation of various oil and
gas opportunities.
The key metric for the Company at this stage in its development,
is its estimated level of prospective resources. The Company is
therefore delighted to have tripled its P50 prospective gas
resources in 2016 from 845BCF to 2.4TCF.
As and when the Company moves into production, financial,
operational, health and safety and environmental KPIs will become
relevant and will be measured and reported as appropriate.
The Directors do however closely monitor certain financial
information, in particular overheads and cash balances as set out
in the Financial Review.
Graham Swindells
Finance Director
24 April 2017
Investing policy
In addition to the development of the North Sea gas licences
CLNR has acquired to date, the Company proposes to continue to
evaluate other potential oil and gas projects in line with its
investing policy, as it aims to build a portfolio of resource
assets and create value for shareholders. As disclosed in the
Company's AIM Admission Document in May 2012, the Company's
substantially implemented Investing Policy is as follows:
The proposed investments to be made by the Company may be either
quoted or unquoted; made by direct acquisition or through farm-ins;
either in companies, partnerships or joint ventures; or direct
interests in oil & gas and mining projects. It is not intended
to invest or trade in physical commodities except where such
physical commodities form part of a producing asset. The Company's
equity interest in a proposed investment may range from a minority
position to 100 per cent. ownership.
The Board initially intends to focus on pursuing projects in the
oil & gas and mining sectors, where the Directors believe that
a number of opportunities exist to acquire interests in attractive
projects. Particular consideration will be given to identifying
investments which are, in the opinion of the Directors,
underperforming, undeveloped and/or undervalued, and where the
Directors believe that their expertise and experience can be
deployed to facilitate growth and unlock inherent value.
The Company will conduct initial due diligence appraisals of
potential projects and, where it is believed further investigation
is warranted, will appoint appropriately qualified persons to
assist with this process. The Directors are currently assessing
various opportunities which may prove suitable although, at this
stage, only preliminary due diligence has been undertaken.
It is likely that the Company's financial resources will be
invested in either a small number of projects or one large
investment which may be deemed to be a reverse takeover under the
AIM Rules. In every case, the Directors intend to mitigate risk by
undertaking the appropriate due diligence and transaction analysis.
Any transaction constituting a reverse takeover under the AIM Rules
will also require Shareholder approval.
Investments in early stage and exploration assets are expected
to be mainly in the form of equity, with debt being raised later to
fund the development of such assets. Investments in later stage
projects are more likely to include an element of debt to equity
gearing. Where the Company builds a portfolio of related assets, it
is possible that there may be cross holdings between such
assets.
The Company intends to be an involved and active investor.
Accordingly, where necessary, the Company may seek participation in
the management or representation on the Board of an entity in which
the Company invests with a view to improving the performance and
use of its assets in such ways as should result in an upward
re-rating of the value of those assets.
Given the timeframe the Directors believe is required to fully
maximise the value of an exploration project or early stage
development asset, it is expected that the investment will be held
for the medium to long term, although disposal of assets in the
short term cannot be ruled out in exceptional circumstances.
The Company intends to deliver Shareholder returns principally
through capital growth rather than capital distribution via
dividends, although it may become appropriate to distribute funds
to Shareholders once the investment portfolio matures and
production revenues are established.
The Directors believe that the Investing Policy can be
substantially implemented within 18 months of Admission. If this is
not achieved, the Company will seek Shareholder consent for its
Investing Policy or any changes thereto at the next annual general
meeting of the Company and on an annual basis thereafter, until
such time that its Investing Policy has been implemented. If it
appears unlikely that the Investing Policy will be achieved, the
Directors may consider returning the remaining funds to
Shareholders.
Given the nature of the Investing Policy, the Company does not
intend to make regular periodic disclosures or calculations of its
net asset value.
The Directors consider that as investments are made, and new
investment opportunities arise, further funding of the Company will
be required.
Qualified Person
Andrew Nunn, a Chartered Geologist and COO of CLNR, is a
"Qualified Person" in accordance with the Guidance Note for Mining,
Oil and Gas Companies, March 2006, of the London Stock Exchange.
Andrew has reviewed and approved the information contained within
this news release.
Glossary of Technical Terms
PMRS: Petroleum Resources Management System (2007)
BCF: Billion Cubic Feet
GIIP: Gas Initially In Place
SCF: Standard Cubic Feet
Prospective Resources: Are estimated volumes associated with
undiscovered accumulations. These represent quantities of petroleum
which are estimated, as of a given date, to be potentially
recoverable from oil and gas deposits identified on the basis of
indirect evidence but which have not yet been drilled.
Chance of Success: for prospective resources, means the chance
or probability of discovering hydrocarbons in sufficient quantity
for them to be tested to the surface. This, then, is the chance or
probability of the prospective resource maturing into a contingent
resource. Prospective resources have both an associated chance of
discovery (geological chance of success) and a chance of
development (economic, regulatory, market and facility, corporate
commitment and political risks). The chance of commerciality is the
product of these two risk components. These estimates have been
risked for chance of discovery but not for chance of
development.
EMV: Expected Monetary Value, being the value for a set of
possible scenarios based on the average risked value of that set of
scenarios and which is calculated by multiplying the value of each
possible scenario with the chance of that scenario being
realised
NPV: Net present value
NPV(10) : NPV at a 10% discount rate
TCF: Trillion Cubic Feet
P90 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 90% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a low estimate of resource.
P50 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 50% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a median or best case estimate of resource.
P10 resource: reflects a volume estimate that, assuming the
accumulation is developed, there is a 10% probability that the
quantities actually recovered will equal or exceed the estimate.
This is therefore a high estimate of resource.
Pmean: is the mean of the probability distribution for the
resource estimates. This is often not the same as P50 as the
distribution can be skewed by high resource numbers with relatively
low probabilities.
The GIIP volumes and Prospective Resources have been presented
in accordance with the 2007 Petroleum Resources Management System
(PRMS) prepared by the Oil and Gas Reserves Committee of the
Society of Petroleum Engineers (SPE), reviewed, and jointly
sponsored by the World Petroleum Council (WPC), the American
Association of Petroleum Geologists (AAPG) and the Society of
Petroleum Evaluation Engineers (SPEE).
Income Statement
for the year ending 31 December 2016
Notes 2016 2015
Continuing Operations GBP GBP
Administrative expenses:
-------------------------------- ----- ----------- -----------
Impairment of exploration
and evaluation assets (318,407) (336,790)
Other administrative expenses (1,416,127) (1,546,752)
-------------------------------- ----- ----------- -----------
Total administrative expenses (1,734,534) (1,883,542)
----------- -----------
Operating Loss (1,734,534) (1,883,542)
Finance income 3,928 11,443
-------------------------------- ----- ----------- -----------
Loss Before Taxation (1,730,606) (1,872,099)
Taxation - -
-------------------------------- ----- ----------- -----------
Loss for the year (1,730,606) (1,872,099)
-------------------------------- ----- -----------
Loss per share from continuing
operations
expressed in pence per
share:
Basic and diluted 2 (0.70)p (1.00)p
-------------------------------- ----- ----------- -----------
Statement of Other Comprehensive Income
for the year ending 31 December 2016
2016 2015
GBP GBP
Loss for the year (1,730,606) (1,872,099)
Other Comprehensive Income - -
-------------------------------------- ----------- -----------
Total Comprehensive Income for
the year attributable to the equity
holders of the Company (1,730,606) (1,872,099)
--------------------------------------- ----------- -----------
Balance Sheet
as at 31 December 2016
Notes 2016 2015
GBP GBP
Assets
Non-current Assets
Intangible assets 3 554,498 428,128
Property, plant and equipment 3,885 5,890
Investment in subsidiary 1,101 501
Other receivables - 53,688
-------------------------------------- ----- ----------- -----------
559,484 488,207
-------------------------------------- ----- ----------- -----------
Current Assets
Other receivables 196,724 87,702
Cash and cash equivalents 1,707,910 1,114,052
-------------------------------------- ----- ----------- -----------
1,904,634 1,201,754
-------------------------------------- ----- ----------- -----------
Total Assets 2,464,118 1,689,961
-------------------------------------- ----- -----------
Capital and reserves attributable
to the equity holders of the
Company
Shareholders' Equity
Share capital 1,646,967 996,111
Share premium 7,761,977 6,037,175
Share-based payment reserve 582,193 529,292
Accumulated retained deficit (7,749,896) (6,134,524)
-------------------------------------- ----- ----------- -----------
Total Equity 2,241,241 1,428,054
-------------------------------------- ----- ----------- -----------
Liabilities
Current Liabilities
Trade and other payables 222,877 261,907
-------------------------------------- ----- ----------- -----------
Total Liabilities 222,877 261,907
-------------------------------------- ----- ----------- -----------
Total Equity and Liabilities 2,464,118 1,689,961
-------------------------------------- ----- ----------- -----------
Statement of Changes in Equity
for the year ending 31 December 2016
Share Share Share-based Accumulated Total
capital premium payment retained equity
GBP GBP reserve deficit GBP
GBP GBP
Balance at 1 January
2016 996,111 6,037,175 529,292 (6,134,524) 1,428,054
Comprehensive income
for the year
Loss for the year - - - (1,730,606) (1,730,606)
---------------------------- --------- --------- ----------- ----------- -----------
Total comprehensive
loss for the year - - - (1,730,606) (1,730,606)
Contributions by and
distributions to owners
Issue of share capital 650,856 1,876,284 - - 2,527,140
Expenses of issue - (151,482) - - (151,482)
Share-based payment - - 168,135 - 168,135
Expired/lapsed options - - (115,234) 115,234 -
---------------------------- --------- --------- ----------- ----------- -----------
Total contributions
by and distributions
to owners 650,856 1,724,802 52,901 115,234 2,543,793
Balance at 31 December
2016 1,646,967 7,761,977 582,193 (7,749,896) 2,241,241
---------------------------- --------- --------- ----------- ----------- -----------
Balance at 1 January
2015 775,000 4,454,287 589,050 (4,426,380) 1,391,957
Comprehensive income
for the year
Loss for the year - - - (1,872,099) (1,872,099)
---------------------------- --------- --------- ----------- ----------- -----------
Total comprehensive
loss for the year - - - (1,872,099) (1,872,099)
Contributions by and
distributions to owners
Issue of share capital 221,111 1,658,338 - - 1,879,449
Expenses of issue - (75,450) - - (75,450)
Share-based payment - - 104,197 - 104,197
Expired/lapsed options - - (163,955) 163,955 -
Total contributions
by and distributions
to owners 221,111 1,582,888 (59,758) 163,955 1,908,196
Balance at 31 December
2015 996,111 6,037,175 529,292 (6,134,524) 1,428,054
---------------------------- --------- --------- ----------- ----------- -----------
Cash Flow Statement
for the year ending 31 December 2016
Notes 2016 2015
GBP GBP
Cash flows used in operating activities
Net cash used in operating activities 1 (1,334,065) (1,394,277)
------------------------------------------- --------------- ----------- -----------
Cash flows used in investing activities
Purchase of intangible fixed assets (448,575) (512,552)
Purchase of property, plant and
equipment (1,833) (668)
Interest received 3,273 10,162
Investment in subsidiary (600) (250)
------------------------------------------- --------------- ----------- -----------
Net cash used in investing activities (447,735) (503,308)
------------------------------------------- --------------- ----------- -----------
Cash flows from financing activities
Proceeds of share issue 2,527,140 1,879,449
Expenses of share issue (151,482) (75,450)
------------------------------------------- --------------- ----------- -----------
Net cash from financing activities 2,375,658 1,803,999
------------------------------------------- --------------- ----------- -----------
Increase / (decrease) in cash
and cash equivalents 593,858 (93,586)
Cash and cash equivalents at beginning
of year 1,114,052 1,207,638
------------------------------------------- --------------- ----------- -----------
Cash and cash equivalents at end
of year 1,707,910 1,114,052
------------------------------------------- --------------- ----------- -----------
Notes to the Financial Information
for the year ending 31 December 2016
1. Basis of preparation
The financial information for the year ended 31 December 2016
and 31 December 2015 set out in this announcement does not
constitute the Company's statutory financial statements for the
year ended 31 December 2016 but is extracted from the audited
financial statements for those years. The 31 December 2015 accounts
have been delivered to the Registrar of Companies. The statutory
financial statements for 2016 will be delivered to the Registrar of
Companies in due course.
The auditors have reported on the financial statements for the
year ended 31 December 2016; their report was unqualified but did
contain an emphasis of matter paragraph in respect of going
concern. It did not contain statements under section 498 (2) or (3)
of the Companies Act 2006.
While the financial information included in this preliminary
announcement has been prepared in accordance with the recognition
and measurement criteria of International Financial Reporting
Standards (IFRSs and IFRIC interpretations) issued by the
International Accounting Standards Board and as endorsed for use in
the European Union, and with those parts of the Companies Act 2006
applicable to companies preparing their accounting under IFRS. This
announcement does not itself contain sufficient information to
comply with IFRSs.
The principal accounting policies adopted in the preparation of
the financial information in this announcement are set out in the
Company's full financial statements for the year ended 31 December
2016.
Going concern
The Company is dependent on its existing cash resources and its
ability to raise additional funding in order to develop its assets.
Based on the cash balance at year end and the Company's
commitments, the Directors are of the opinion that the Company has
sufficient funds to cover its budgeted exploration and development
programme until the fourth quarter of 2017. Further funding will be
required to allow the Company to fully implement its strategy
beyond this period. The Company anticipates that further funds will
be raised, most likely by way of equity, as it has successfully
done in the past. On this basis the Directors believe that the
necessary funds to fund operations will be raised as required and
accordingly they are confident that the company will continue as a
going concern and have prepared the financial statements on that
basis. Should the company be unable to raise further funds, it may
be unable to realise its assets and discharge its liabilities in
the normal course of business. These circumstances indicate the
existence of a material uncertainty which may cast significant
doubt on the Company's ability to continue as a going concern. The
financial statements do not include the adjustments that would
result if the company was unable to continue as a going
concern.
Copies of the Company's audited statutory accounts for the year
ended 31 December 2016 will be available at the company's website
at www.cluffnaturalresources.com, promptly after the release of
this preliminary announcement and a printed version will be
dispatched to shareholders shortly.
The Board approved this announcement on [21] April 2017.
2. Loss per Share
The Company has issued share options and warrants over Ordinary
shares both of which could potentially dilute basic earnings per
share in the future.
Basic loss per share is calculated by dividing the loss
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Due to the losses incurred during the year, a diluted loss per
share has not been calculated as this would serve to reduce the
basic loss per share. There were 50,096,901 (2015: 28,540,000)
share incentives outstanding at the end of the year that could
potentially dilute basic earnings per share in the future.
Basic and diluted loss per share
2016 2015
Loss per share from continuing
operations (0.70)p (1.00)p
-------------------------------- -------- --------
The loss and weighted average number of ordinary shares used in
the calculation of basic loss per share are as follows:
2016 2015
GBP GBP
Loss used in the calculation of
total basic and diluted loss per
share (1,730,606) (1,872,099)
----------------------------------- ------------ ------------
Number of shares 2016 2015
Number Number
Weighted average number of ordinary
shares for the purposes of basic
and diluted loss per share 246,340,146 186,621,996
------------------------------------- ------------ ------------
3. Intangible Assets
Exploration Software
& Evaluation Licences Total
Assets GBP GBP
GBP
Cost
At 1 January 2015 250,779 7,376 258,155
Additions 512,472 80 512,552
------------------------- ------------- --------- ---------
At 31 December 2015 763,251 7,456 770,707
Additions 438,062 10,513 448,575
------------------------- ------------- --------- ---------
At 31 December 2016 1,201,313 17,969 1,219,282
------------------------- ------------- --------- ---------
Amortisation
At 1 January 2015 - 3,936 3,936
Charge for year - 1,853 1,853
Impairment 336,790 - 336,790
------------------------- ------------- --------- ---------
At 31 December 2015 336,790 5,789 342,579
------------------------- ------------- --------- ---------
Charge for year - 3,798 3,798
Impairment 318,407 - 318,407
------------------------- ------------- --------- ---------
At 31 December 2016 655,197 9,587 664,784
------------------------- ------------- --------- ---------
Net Book Value
At 31 December 2016 546,116 8,382 554,498
------------------------- ------------- --------- ---------
At 31 December 2015 426,461 1,667 428,128
------------------------- ------------- --------- ---------
At 1 January 2015 250,779 3,440 254,219
------------------------- ------------- --------- ---------
In the course of 2016 the Company's Southern North Sea licences
P2259, P2261 and P2253 were relinquished. Accordingly, the carrying
value of these assets was impaired by GBP318,407 down to GBPnil.
The net book value of exploration and evaluation assets at 31
December 2016 relates solely to the Company's two remaining North
Sea Licences, P2252 and P2248.
**ENDS**
For further information please visit
www.cluffnaturalresources.com or contact the following:
Cluff Natural Resources Tel: +44 (0) 20 7887
Plc 2630
Algy Cluff / Graham Swindells
/ Andrew Nunn
Allenby Capital Limited Tel: +44 (0) 20 3328
(Nominated Adviser & Broker) 5656
David Hart / Alex Brearley
/ Asha Chotai (Corporate
Finance)
Chris Crawford / Katrina
Perez (Corporate Broking)
St Brides Partners Ltd Tel: +44 (0) 20 7236
1177
Lottie Brocklehurst / Frank
Buhagiar (Financial PR)
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR BLGDSDBDBGRB
(END) Dow Jones Newswires
April 24, 2017 02:00 ET (06:00 GMT)
Deltic Energy (LSE:DELT)
Historical Stock Chart
From Mar 2024 to Apr 2024
Deltic Energy (LSE:DELT)
Historical Stock Chart
From Apr 2023 to Apr 2024