Cluff Natural Resources Plc / Index: AIM / Epic: CLNR / Sector: Natural Resources
24 August 2016
Cluff Natural Resources Plc ('CLNR' or 'the Company')
Interim Results and Resource Update
Cluff Natural Resources Plc, the AIM quoted natural resources investing company, is pleased to
announce its interim results for the six months ended 30 June 2016 and an update regarding a potentially significant increase to
the prospective resources of its Southern North Sea gas prospects.
Highlights
· Additional prospects identified on Licence P2248 in
the Southern North Sea in the Carboniferous and Triassic are expected to increase the Company's estimated net P50 prospective
resource to in excess of 3 TCF of natural gas from 760 BCF, subject to independent review and revised Competent Persons
Report
· Sale and Purchase and Option Agreement with Verus
Petroleum, which at the cost of £1, provides the right to acquire up to 25% of three Parkmead Group operated licences (two of
which are effectively drill ready) over two areas in the Moray Firth and the Central North Sea, containing or adjacent to
existing discoveries
· Unitisation of Licence P2253 with Licence P2258
(Simwell and Burgate) where a significant Carboniferous structure has been identified
· Extension of MOU with Halliburton for a further two
years to February 2018
· Resource update and CPR expected to facilitate formal
farm out discussions to fund forward work programmes, including the drilling of one or more wells
· Successfully completed fundraise of £727,000 in April
2016
· Cash position of £955,000 (31 December 2015: £1.1
million; 30 June 2015: £1.94 million)
· Cash used in operations for the period reduced to
£665,836 (H1 2015: £807,972)
· Loss for the period reduced to £662,473 (H1 2015: £744,668)
Chairman and CEO's Statement
For those of us whose destiny is linked to the UK North Sea, the saga of Brexit has resulted in a
completely new slate of Ministers in a new Ministry led by a Prime Minister who clearly has new ideas about energy policy.
Whether these ideas will embrace a determination to revive the North Sea will soon be evident, and you can be assured that your
management have made the appropriate representations.
The North Sea, in our judgement, still contains much undiscovered oil and gas, but it is evolving
into a secondary phase which will rely on the independent or smaller companies to conduct exploration, rather than the
majors. We are accordingly hopeful that the new Secretary of State for Business and Energy will recognise this and offer
assistance. That could be achieved simply by the removal of, or even reduction in, proposed subsidies amounting to billions
of pounds of taxpayers' money for new offshore wind farms many of which are foreign owned and in some cases sterilising access to
gas from geology in the Southern North Sea.
Just a fraction of that subsidy could be made available by, for example, the Oil and Gas Authority
participating as a joint venture partner in exploration wells, with the percentage of the other participant holder(s) being
determined by the financial need of the participating company. If such a concept becomes a reality, I can foresee a large
amount of exploration activity occurring rapidly with enormous benefits to the UK's energy, security, wealth and
employment.
Within our portfolio of licences in the Southern North Sea, we are fortunate to have multiple
prospects, however one block in particular (P2248) is providing us with increasing confidence of being host to multiple
exploration targets which will take our total P50 prospective resource estimate to in excess of 3 TCF of gas. To put this
in context, the UK's total annual consumption of gas is approximately 3 TCF. Technical evaluation is continuing by independent
assessors, which is expected to conclude with the publication of a Competent Persons Report ('CPR') in September 2016.
Clearly, to drill this licence area must be our absolute priority as the potential impact on our
capitalisation as a company would be transformational in a success case. We also retain our options to acquire up to 25% of three
licences over two drill-ready oil prospects in the Moray Firth and the Central North Sea.
While many larger oil and gas companies are faced with levels of debt and work commitments which
are unsustainable, our company remains debt free and without onerous work commitments. We also continue to develop our
strategic relationship with Halliburton, with our MOU being extended in February this year, for a further two years.
The UK gas price has been encouragingly stable recently. The Southern North Sea geology is highly
prospective and in the Southern North Sea there exists infrastructure together with access to market. I believe that these
factors, combined with a benevolent government attitude, would render the UK's Southern North Sea one of the most prospective
offshore gas areas in the world.
Operating Review
The Company has continued to develop its portfolio of North Sea assets through ongoing technical
work on its existing gas assets and a number of low cost transactions and exclusive options which have enhanced and diversified
the potential resource base. These actions have also given the Company the opportunity for near term drilling activity on two
high impact drill-ready exploration targets. The increase and subsequent stabilisation of the oil price during the period
has to some degree increased confidence within the industry. This provides for a much improved opportunity to farm-down and
successfully develop our mostly 100% equity position in these licences.
Subsurface work producing exciting results in Southern North Sea
In conjunction with our retained subsurface consultants, Lyme Bay Consulting, the Company has
identified a number of highly attractive prospects and leads which are anticipated to significantly increase the Company's
resource base. The results of this work are currently being independently assessed and are expected to be incorporated into
an updated CPR in September 2016.
Licence P2248 - Resource Update
The most significant of these prospects, Cadence, is a large structure within the Carboniferous on
licence P2248 which is positioned centrally on the Carboniferous fairway which extends from the producing Caister, Murdoch and
Cavendish fields to the south-east through the recently appraised Pegasus-Andromeda complex, the Crosgan discovery and the
multi-TCF Aurora prospect to the north-west. This Carboniferous fairway in the Southern North Sea contains more than 20 TCF
of discovered gas and has produced over 2.3 TCF of gas to date (Source: DECC oil & gas field data to April 2016).
The Cadence prospect is a 3-way dip and fault closed structure that extends to a maximum area of
36km2 and is expected to contain stacked sandstone reservoirs in the Millstone Grit, Yoredale, Scremerston & Fell
Sandstone Formations which the Company estimates to have the combined potential to contain 1.5 TCF (range 520 BCF (P90) to 5.7
TCF (P10)) of P50 net prospective recoverable gas. To support farm-out talks the Company is currently undertaking high
level well engineering studies to define the well requirements and costs for testing this prospect.
Additionally the Company's ongoing work with Lyme Bay Consulting has identified a potential new
play type in the prolific, but currently less fashionable, Bunter Sandstone. Three major prospects have been defined on
Licence P2248 which have a combination of structural and stratigraphic trapping mechanisms supported by amplitude anomalies
characteristic of producing reservoirs in the Bunter. While technical work is on-going, it is expected by the Company that each
prospect has P50 prospective resources in the range of 310 and 550 BCF.
Following the identification and assessment of these additional prospects, the Company estimates
its P50 net prospective resource base to now be in excess of 3 TCF (previously 760 BCF). It is anticipated that this estimate
will be confirmed and refined in a CPR which is underway and expected to be released in September 2016. It should be noted
that the resource estimates in this announcement are preliminary Company estimates and are potentially subject to amendment and
formalisation under PRMS for the purposes of the CPR.
Portfolio Management and Rationalisation
The Company continues to assess opportunities which are complementary to its existing assets. On 9
June 2016 the Company agreed a licence unitisation across two Southern North Sea licences (P2253 and P2258) based on the
identification of a significant structure within the Carboniferous which straddles the two licence areas. Oil & Gas
Authority ("OGA") approval is awaited and an update will be provided in due course. On completion, the Company will have a
50% interest in both licences with the remaining interest being shared by Simwell Resources (45%) and Burgate Exploration and
Production (5%). Technical work is ongoing and being led by Simwell's experienced sub-surface team and the Company anticipates
providing an update of this work in due course.
In conjunction with its acquisition strategy the Company is also acting to rationalise its
portfolio and reduce costs by offsetting part of the future costs associated with the escalation of licence fees built into years
three and four of the 'Promote' licences. The Company will seek to reduce its net acreage position by approximately 50%
through the partial or total relinquishment of those licence areas which have been determined to be non-prospective, impaired by
future windfarm developments (notably Licence P2259) which would prevent future hydrocarbon operations or which currently have
insufficient data to adequately assess prospectivity. This rationalisation will allow the Company to focus on
progressing its most attractive prospects and is expected to be completed by the end of the year.
The UK's 29th round of offshore licencing has been announced in the last few weeks. In
line with its strategy, the Company is now assessing opportunities to participate and apply for licences in this latest licencing
round.
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. These licences contain a significant heavy oil discovery and a deeper lighter oil exploration target
which is thought to be the source of the overlying heavy oil. In addition to the 5% equity stake, the Company has an
exclusive option for nine months (from May 2016) to increase its equity stake in licence P1944 and P2156 by a further 20% and a
contemporaneous exclusive option for nine months to acquire a 25% stake in licence P2082 which the Company believe contains one
of the best undrilled exploration targets (Skerryvore) in a mature area of the Central North Sea. All three of the above
licences, two of which are effectively drill ready, are operated by The Parkmead Group. OGA approval is awaited and an
update will be provided in due course.
The exercising of these options would see the Company's potential net resource base grow by
approximately 100 mmboe (if the Options are exercised), based on operator estimates of contingent and prospective resources
associated with the licences.
Halliburton MOU
In February 2016 the Company extended its MOU with Halliburton for two years to February 2018 and
continues to work with Halliburton to accelerate the development of its assets. This collaboration with Halliburton continues to
deliver innovative technical solutions for the Company in the form of proprietary seismic analysis and workflows associated with
assessing the production potential of a fractured Zechstein carbonate reservoir which was previously identified in the Lytham
area (Licence area P2252). This work is ongoing and is expected to take a number of months to
complete.
Underground Coal Gasification
The Company's portfolio of UCG licences remains on care and maintenance pending a resolution of
the Moratorium process in Scotland and emergence of a supportive policy on UCG from Westminster. We continue to review the
future of the UCG portfolio of nine licences on a regular basis.
Future developments
The Company is highly encouraged by the technical work currently being carried out on its Southern
North Sea Gas licences and the significant additional level of potential resource provisionally identified, particularly on
Licence P2248. The Company plans to continue technical work to de-risk its prospects, further enhance the resource base and
refine drilling targets. We expect both the Carboniferous Cadence prospect and the potential upside associated with the
Bunter prospects on P2248 to generate significant interest from companies operating in the region and early feedback from an
informal peer review process has been extremely encouraging which will facilitate the process of attracting farm out partners.
While recognising the difficulties which currently affect the oil and gas sector, the Company is confident that this
positive feedback will develop into formal farm-out discussions following publication of the Competent Persons Report in
September 2016.
Financial Review
In the six months to 30 June 2016 the Company incurred a reduced loss for the period of £662,473
compared with a loss of £744,668 for the six months to 30 June 2015. This reduction in loss reflects additional steps the Company
has taken to reduce its overheads, despite an increased level of activity across the business developing the Company's Southern
North Sea licences and the recent deals announced with Verus Petroleum and Simwell Petroleum.
The current period loss includes non-cash share based payment charges of £62,240, compared with
£48,972 for the six months to 30 June 2015.
Cash used in operations for the six months to 30 June 2016 was also lower at £665,836 (2015:
£807,972). In addition, £174,189 of expenditure incurred was capitalised (six months to 30 June 2015:
£271,006) representing costs directly related to the development of the Company's six Southern North Sea licences.
On 6 April 2016 the Company announced that it had raised £727,000, before expenses, through the
aggregate placing and subscription of 58,171,200 new ordinary shares of 0.5p each ("Placing Shares") at 1.25 pence per share (the
"Placing") with new and existing institutional and private investors. Admission of the shares to trading on AIM occurred in
April 2016. Following this Placing there are 257,393,532 ordinary shares in issue.
Cash balances as at 30 June 2016 stood at £955,000 (31 December 2015: £1.11
million; 30 June 2015: £1.94 million).
In the preliminary results statement for the year to 31 December 2015 the Company stated
that based on the cash balance at year end, the post year end equity fundraising and the Company's commitments, the Company has
adequate financial resources to cover its budgeted exploration and development programme at least until the end of 2016. Based on
cash balances at 30 June 2016 and the Company's commitments, the funding position remains unchanged. Further funding will
therefore inevitably 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.
JG Cluff
Chairman & Chief Executive
24 August 2016
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
BCF:
Billion Cubic Feet
PRMS:
Petroleum Resources Management System (2007)
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.
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.
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.
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.
TCF:
Trillion Cubic Feet
UNAUDITED INCOME STATEMENT AND STATEMENT OF COMPREHENSIVE LOSS
Period ended 30 June 2016
|
|
|
Note
|
|
Period ended 30 June 2016
|
|
Period ended 30 June 2015
|
|
Year ended 31 December 2015
|
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
|
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
|
|
|
Other administrative expenses
|
|
|
|
(664,351)
|
|
(750,734)
|
|
(1,546,752)
|
|
Impairment of exploration and evaluation assets
|
|
|
|
-
|
|
-
|
|
(336,790)
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss
|
|
|
|
(664,351)
|
|
(750,734)
|
|
(1,883,542)
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
|
1,878
|
|
6,066
|
|
11,443
|
|
|
|
|
|
|
|
|
|
|
|
Loss before taxation
|
|
(662,473)
|
|
(744,668)
|
|
(1,872,099)
|
|
|
|
|
|
|
|
|
|
|
|
Taxation
|
|
|
|
-
|
|
-
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Loss and comprehensive loss for the period/year attributable to equity holders of the
Company
|
|
|
|
(662,473)
|
|
(744,668)
|
|
(1,872,099)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per ordinary share (pence) - From continuing operations: basic and diluted
|
|
3
|
|
(0.30)p
|
|
(0.43)p
|
|
(1.00)p
|
UNAUDITED BALANCE SHEET
At 30 JUNE 2016
|
|
Note
|
|
30 June 2016
|
|
30 June 2015
|
|
31 December 2015
|
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
|
£
|
|
£
|
|
£
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Intangible Assets
|
|
|
600,071
|
|
524,303
|
|
428,128
|
|
Property, Plant and Equipment
|
|
|
3,169
|
|
8,058
|
|
5,890
|
|
Investment in subsidiary
|
|
|
501
|
|
251
|
|
501
|
|
Other receivables
|
|
|
53,688
|
|
53,688
|
|
53,688
|
|
|
|
|
|
|
|
|
|
|
|
|
|
657,429
|
|
586,300
|
|
488,207
|
|
|
|
|
|
|
|
|
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
128,755
|
|
79,672
|
|
87,702
|
|
Cash and cash equivalents
|
|
|
955,035
|
|
1,937,801
|
|
1,114,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,083,790
|
|
2,017,473
|
|
1,201,754
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
1,741,219
|
|
2,603,773
|
|
1,689,961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CAPITAL AND RESERVES ATTRIBUTABLE TO EQUITY HOLDERS OF THE COMPANY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share capital
|
4
|
|
1,286,967
|
|
996,111
|
|
996,111
|
|
Share premium
|
|
|
6,425,099
|
|
6,037,175
|
|
6,037,175
|
|
Share-based payment reserve
|
|
|
500,346
|
|
638,022
|
|
529,292
|
|
Retained deficit
|
|
|
(6,705,812)
|
|
(5,171,048)
|
|
(6,134,524)
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
1,506,600
|
|
2,500,260
|
|
1,428,054
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
234,619
|
|
103,513
|
|
261,907
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
234,619
|
|
103,513
|
|
261,907
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES
|
|
|
1,741,219
|
|
2,603,773
|
|
1,689,961
|
|
|
|
|
|
|
|
|
|
UNAUDITED STATEMENT OF CHANGES IN EQUITY
Period ended 30 June 2015
|
|
Share capital
|
Share premium
|
Share- based payment reserve
|
Retained deficit
|
Total
|
|
|
£
|
£
|
£
|
£
|
£
|
|
|
|
|
|
|
|
|
For the period ended 30 June 2016
|
|
|
|
|
|
|
At 1 January 2016
|
996,111
|
6,037,175
|
529,292
|
(6,134,525)
|
1,428,054
|
|
Loss and total comprehensive loss for the period
|
-
|
-
|
-
|
(662,473)
|
(662,473)
|
|
Issue of shares
|
290,856
|
436,284
|
-
|
-
|
727,140
|
|
Costs of share issue
|
-
|
(48,360)
|
-
|
-
|
(48,360)
|
|
Share-based payment
|
|
|
62,240
|
-
|
62,240
|
|
Lapsed/expired options
|
-
|
-
|
(91,186)
|
91,186
|
-
|
|
|
|
|
|
|
|
|
At 30 June 2016 (Unaudited)
|
1,286,967
|
6,425,099
|
500,346
|
(6,705,812)
|
1,506,600
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the period ended 30 June 2015
|
|
|
|
|
|
|
At 1 January 2015
|
775,000
|
4,454,287
|
589,050
|
(4,426,380)
|
1,391,957
|
|
Loss and total comprehensive loss for the period
|
-
|
-
|
-
|
(744,668)
|
(744,668)
|
|
Issue of shares
|
221,111
|
1,658,337
|
-
|
-
|
1,879,449
|
|
Costs of share issue
|
-
|
(75,450)
|
-
|
-
|
(75,450)
|
|
Share-based payment
|
-
|
-
|
48,972
|
-
|
48,972
|
|
|
|
|
|
|
|
|
At 30 June 2015 (Unaudited)
|
996,111
|
6,037,174
|
638,022
|
(5,171,048)
|
2,500,260
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the period ended 31 December 2015
|
|
|
|
|
|
|
At 1 January 2015
|
775,000
|
4,454,287
|
589,050
|
(4,426,380)
|
1,391,957
|
|
Loss and total comprehensive loss for the period
|
-
|
-
|
-
|
(1,872,099)
|
(1,872,099)
|
|
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
|
|
Lapsed/expired options
|
-
|
-
|
(163,955)
|
163,955
|
-
|
|
|
|
|
|
|
|
|
At 31 December 2015 (Audited)
|
996,111
|
6,037,175
|
529,292
|
(6,134,525)
|
1,428,054
|
|
|
|
|
|
|
|
UNAUDITED CASHFLOW STATEMENT
Period ended 30 June 2016
|
|
|
Period ended 30 June 2016
|
|
Period ended 30 June 2015
|
|
Year ended 31 December 2015
|
|
|
|
Unaudited
|
|
Unaudited
|
|
Audited
|
|
|
|
£
|
|
£
|
|
£
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
Loss before taxation
|
|
(662,473)
|
|
(744,668)
|
|
(1,872,099)
|
|
Adjustments for:
|
|
|
|
|
|
|
|
Investment income
|
|
(1,878)
|
|
(6,066)
|
|
(11,443)
|
|
Depreciation
|
|
2,721
|
|
2,852
|
|
5,420
|
|
Amortisation
|
|
2,246
|
|
922
|
|
1,853
|
|
Impairment of intangibles
|
|
-
|
|
-
|
|
336,790
|
|
Share-based payments
|
|
62,240
|
|
48,972
|
|
104,197
|
|
|
|
|
|
|
|
|
|
|
|
(597,144)
|
|
(697,988)
|
|
(1,435,282)
|
|
|
|
|
|
|
|
|
|
(Increase) / decrease in trade and other receivables
|
|
(41,403)
|
|
93,703
|
|
86,298
|
|
(Decrease) / increase in trade and other payables
|
|
(27,288)
|
|
(203,687)
|
|
(45,293)
|
|
|
|
|
|
|
|
|
|
Net cash used in operating activities
|
|
(665,835)
|
|
(807,972)
|
|
(1,394,277)
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
Purchase of intangible assets
|
|
(174,189)
|
|
(271,006)
|
|
(512,552)
|
|
Purchase of property, plant and equipment
|
|
-
|
|
(269)
|
|
(668)
|
|
Interest received
|
|
2,227
|
|
5,411
|
|
10,162
|
|
Investment in subsidiary
|
|
-
|
|
-
|
|
(250)
|
|
|
|
|
|
|
|
|
|
Net cash used in investing activities
|
|
(171,962)
|
|
(265,864)
|
|
(503,308)
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
Proceeds from share issue
|
|
727,140
|
|
1,879,449
|
|
1,879,449
|
|
Expense of share issue
|
|
(48,360)
|
|
(75,450)
|
|
(75,450)
|
|
|
|
|
|
|
|
|
|
Net cash from financing activities
|
|
678,780
|
|
1,803,999
|
|
1,803,999
|
|
|
|
|
|
|
|
|
|
Increase / (Decrease) in cash and cash equivalents
|
|
(159,017)
|
|
730,163
|
|
(93,586)
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of period / year
|
|
1,114,052
|
|
1,207,638
|
|
1,207,638
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of period / year
|
|
955,035
|
|
1,937,801
|
|
1,114,052
|
|
|
|
|
|
|
|
|
Notes to the financial information
Period ended 30 June 2016
1. GENERAL
The interim financial information for the
period to 30 June 2016 is unaudited and does not constitute statutory accounts within the meaning of Section 434 of the Companies
Act 2006.
2. ACCOUNTING POLICIES
The interim financial information in this report has been prepared on the basis of the accounting
policies set out in the audited financial statements for the period ended 31 December 2015, which complied with International
Financial Reporting Standards as adopted for use in the European Union ("IFRS").
IFRS is subject to amendment and interpretation by the International Accounting Standards Board
("IASB") and the IFRS Interpretations Committee and there is an on-going process of review and endorsement by the European
Commission.
The financial information has been prepared on the basis of IFRS that the Directors expect to be
applicable as at 31 December 2016, with the exception of IAS 34 Interim Financial Reporting.
The Directors have adopted the going concern basis in preparing the financial information.
In assessing whether the going concern assumption is appropriate, the Directors have taken into account all relevant available
information about the foreseeable future.
The condensed financial information for the period ended 31 December 2015 set out in this interim
report does not comprise the Group's statutory accounts as defined in section 434 of the Companies Act 2006.
The statutory accounts for the year ended 31 December 2015, which were prepared under IFRS, have
been delivered to the Registrar of Companies. The auditors reported on these accounts; their report was unqualified and did not
contain a statement under section 498(2) or 498(3) of the Companies Act 2006. The report did however include reference to matters
which the auditors drew attention by way of emphasis regarding going concern.
Based on the cash balance at year end, the post year end equity fundraising and the Company's
commitments, the Company has adequate financial resources to cover its budgeted exploration and development programme at least
until the end of 2016. Based on cash balances at 30 June 2016 and the Company's commitments, the funding position remains
unchanged. Further funding will therefore inevitably be required to allow the Company to fully implement its strategy and meet
its working capital requirements 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.
3. LOSS PER SHARE
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 period.
Given the Company's reported loss for the period, share options and warrants are not taken into account when determining the weighted average number of ordinary shares in issue during the year and therefore the basic and diluted
loss per share are the same.
Basic and diluted loss per share
|
|
Period ended
30 June 2016
|
|
Period ended
30 June 2015
|
|
Year ended
31 December 2015
|
|
Loss for the period (£)
|
Unaudited
(662,473)
|
|
Unaudited
(744,668)
|
|
Audited
(1,872,099)
|
|
Weighted average number of ordinary shares (number)
Loss per share from continuing operations
|
220,809,251
(0.30)p
|
|
173,812,815
(0.43)p
|
|
186,621,996
(1.00)p
|
|
|
|
|
|
|
|
4. SHARE CAPITAL
a) Share Capital
The Company has one class of Ordinary share which carries no right to fixed income nor has any
preferences or restrictions attached.
Issued
and fully paid:
|
|
30 June 2016
Unaudited
|
|
30 June 2015 Unaudited
|
|
31 December 2015
Audited
|
|
|
£
|
|
£
|
|
£
|
|
|
|
|
|
|
|
|
257,393,532 Ordinary shares of £0.005p each (June 2015: 199,222,332
Ordinary shares)
|
1,286,967
|
|
996,111
|
|
996,111
|
On 20 April 2016, 14,920,000 shares were issued by way of a placing at an issue price of 1.25p per
share. As part of this placing, a further 43,251,200 shares were issued at 1.25p on 26 April 2016, subsequent to approval at the
Company's General Meeting.
5. COPIES OF INTERIM REPORT
Copies of the interim report
are available to the public free of charge from the Company at Cluff Natural Resources Plc, Third Floor, 5-8 The Sanctuary,
London SW1P 3JS during normal office hours, Saturdays and Sundays excepted, for 14 days from today and are available on the
website at www.cluffnaturalresources.com.
Investment policy
In addition to the development of the UCG and North Sea 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 Investment 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.
**ENDS**
For further information please contact the following:
|
Cluff Natural Resources Plc
|
Tel: +44 (0) 20 7887 2630
|
|
Algy Cluff/ Graham Swindells/Andrew
Nunn
|
|
|
Panmure Gordon (UK) Limited
|
Tel: +44 (0) 20 7886 2500
|
|
Adam James/Atholl Tweedie (Corporate Finance)
|
|
|
Tom Salvesen (Corporate Broking)
|
|
|
Allenby Capital Limited
|
Tel: +44 (0) 20 3328 5656
|
|
Chris Crawford/Katrina Perez (Corporate Broking)
|
|
|
St Brides Partners Ltd
|
Tel: +44 (0) 20 7236 1177
|
|
Lottie Brocklehurst/Frank Buhagiar
(Financial PR)
|
|