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31 October 2014 Nordic Energy Plc ("Nordic" or the "Company") Final Results for the Year to 31 May 2014The Directors of Nordic Energy, the oil and gas E&P company focused on Denmark,Norway and the North Sea sectors of the Netherlands and the UK (Nordic area),are pleased to present the Company's preliminary results for the full yearended 31 May 2014.Operational Highlights: * Successful acquisition of Licence 1/13("Licence"); the largest exploration and production licence in the Danish North Sea * Application made for a further licence of eight offshore blocks in the Danish Sea, adjacent to Licence 01/13 * Appointment to the Board of two non-executive Directors, Ian Donald and Ken Seymour * Technical update published by the Company in February 2014 identified 20 prospects and leads on the Licence area and one gas discoveryFinancial Highlights * In April 2014, the Company successfully raised £189,000 through a private placing * Loss before taxation for the year is £184,552 (2013 - £172,253), reflecting the low cost nature of the early stage development of the CompanyPost-year end * Competent Person's Report ("CPR") released in June 2014 recognising the Maja Miocene gas discovery with Contingent Net Recoverable Resources of 69 Bcf gas * It also stated Best Estimate Prospective Recoverable Resources of 1.8bn bbl oil and 1.9 Tcf gas in the portfolio of 20 prospects and leads * Migration and Maturation study released in October 2014 further supported the Company's view that hydrocarbons have migrated from the Central Graben to the area of the Licence * Appointment of Don Nicolson as non-executive Chairman and Jeremy Kane as non-executive Director * Proposed move to AIM * New research note published by Allenby CapitalRudolf Kleiber, CEO, commented: "This has been a pivotal year in the Company'sdevelopment starting with the acquisition of Licence 1/13 and subsequentprogress made with the technical analysis of the area. Our work has furthersupported our belief that this is a highly prospective area and we feelconfident in our position going forward."We are continuing with our plans to move to AIM which we hope will provide uswith the funds to accelerate the development of the Company."Extract from the Strategic ReportThe following is an extract from the Strategic Report, full details of whichcan be found in the annual report.ObjectivesThe Company's objective is to create significant shareholder value from theexploration, appraisal and development of oil and gas projects.The Company has a number of secondary objectives, including promoting thehighest level of health and safety standards, developing our staff to theirhighest potential and being a good corporate citizen in our chosen countries ofoperation.StrategyThe Company's long-term strategy is to build an attractive portfolio of oil andgas exploration and production assets predominantly in the North Sea andnorthern Europe, where the board has significant and relevant experience.In the short term the Company will seek to maximise the exploration andappraisal potential within the existing Licence 1/13held in the Danish NorthSea.Business modelThe Company seeks to increase shareholder value by acquiring low cost oil andgas exploration and production assets with highly prospective characteristics,reduced geographical and political risk, and the potential for rapidadvancement. This focus is demonstrated by the acquisition and developmentactivities that have already taken place on Licence 1/13 in Denmark and issupported by a current application to the Danish Energy Agency for additionalblocks. Management focus is on value creation through cost effectiveacquisitions and judicious expenditure focussed on exploration and development.The Company has identified a number of approaches which may be employed tocreate value, including: the acquisition of further licence areas, strategicjoint ventures, including farm-in agreements, disposals, and the development ofprojects to production by the Company itself or spin-offs to new entities.Review of the Company's business using key performance indicatorsThe Company's shares were admitted to trading on the Plus Markets (now ISDXGrowth Market) in October, 2012, when the company raised £444,000 by way of anequity placing.In September, 2013 the Company acquired operatorship and an 80% workinginterest of Danish Hydrocarbons Exploration and production Licence 1/13in theDanish North Sea from Nikoil Limited (an entity controlled by a director of theCompany) via the establishment of its wholly owned subsidiary ESP Oil & GasApS.Since this time the Company has undertaken extensive geological structuralinterpretation and mapping work using existing 2D-seismic data aided by avolume of Pseudo 3D-seismic data. The Company now holds a sizeable licencearea, a library of seismic information, data logs, structural interpretationsand mapping, creating a large Hydrocarbon Prospect Portfolio.The work has been funded in part by the original equity investment and in partfrom a further equity raise for gross proceeds of £189,000 completed in April,2014. The Company commissioned a Competent Persons Report which was completedin June, 2014 providing an independent evaluation of the recoverablehydrocarbons expected for the asset Licence 1/13.Business performance overviewDuring the early part of the year under review Nordic through its wholly-ownedDanish subsidiary, ESP Oil & Gas ApS, acquired the Exploration and ProductionLicence 1/13covering an area of 3633km2 in the Danish North Sea. Following thisaward Nordic has commenced activities in meeting work programme commitmentsover the licence area and has acquired well and seismic data both 2D and Pseudo3D and has carried out structural interpretation and mapping work that has ledto the identification of a gas discovery and 20 oil and gas prospects across anumber of geological play types and varying depth as follows:Play type Target depth Likely resourceMiocene 1,100ft Shallow GasUpper Cretaceous 6,725ft OilRotliegendes 8,200ft OilCarboniferous (Pre-Permian) 9,800ft GasThis work has resulted in the commissioning of an independent Competent Personsreport ("CPR") that was completed in June, 2014.In addition as a result of the potential identified through the initialinterpretation and mapping work the Company through its subsidiary, ESP Oil &Gas ApS made an application for a further licence area of a total of 8 blockscovering an area of 1,750km2 adjacent to existing Licence 01/13.Work programmeFollowing the year-end Nordic completed further technical work principally amaturation and migration study and plans to complete a seismic attribute study,together with the balance of the interpretation work over a remaining volume of2D-seismic.This will allow for a further maturing of the assets in theportfolio and the commissioning of an updated CPR.Set out below are the Company's Reserves and Resources as provided in theIndependent Competent Persons Report provided by Xodus Group Limited in theirreport dated 6 June 2014.Contract Area Prospect Gross Nordic Net Interest MM Boe MM Boe %01/13 Contingent Resource (best) 14.4 11.5 80 Prospective Resource (best) 2,590.0 2,072.0 80Key objectivesIn the 2013 annual report we set ourselves the principal objective ofprogressing the low cost development programme to further define theprospectivity of the licence. This resulted in an upgraded resource portfolioincluding a mapped gas discovery and supported by an Independent CompetentPersons Report. We are also progressing the objective of adding furtherexploration assets to the Companys portfolio through the Application for 8additional blocks in the Danish North Sea.For the coming year we will continue to develop and mature Licence 1/13supported by the completed maturation and migration study modelling, seismicattribute work and further mapping of prospects and structural interpretationthrough the acquisition of additional 2D, working toward the planning andacquisition of a 3D seismic programme as well as carrying out work to optimisea development concept for the Maja gas discovery and its surroundingaccumulations.Consolidated statement of comprehensive incomefor the year ended 31 May 2014 2014 2013 Restated £ £Continuing operationsAdministrative expenses 174,307 170,719Exchange losses 10,722 1,919 _________ _________Operating loss (185,029) (172,638)Finance income 477 385 _________ _________Loss before tax (184,552) (172,253)Income tax expense - - _________ _________Loss for the year attributable to equity holders (184,552) (172,253)of the parent _________ _________Other comprehensive income:Items that may be reclassified subsequently toprofit or lossExchange differences on translating foreign (2,120) -operations _________ _________Other comprehensive income for the year (net of (2,120)tax)Total comprehensive loss for the year (186,672) (172,253)attributable to equity holders of the parent _________ _________Loss per shareBasic and diluted loss per share 0.2p 0.2p _________ _________Statements of financial positionat 31 May 2014 Group Company Group & CompanyCompany number 08068442 2014 2014 2013 Restated £ £ £AssetsIntangible assets 315,337 - 11,472Investments - 332,303 - _________ _________ _________Total non-current assets 315,377 332,303 11,472 _________ _________ _________Trade and other receivables 27,304 17,417 16,371Cash and cash equivalents 278,644 278,644 370,084 _________ _________ _________Total current assets 305,948 296,601 386,455 _________ _________ _________Total assets 621,325 628,364 397,927 _________ _________ _________Equity attributable to the equityholders of the parentIssued capital 100,732 100,732 94,880Share premium 622,042 622,042 405,120Shares to be issued 76,000 76,000 -Warrants reserve 71,430 71,430 61,702Translation reserve (2,120) - -Accumulated losses (356,804) (351,885) (172,253) _________ _________ _________Total equity 511,281 518,320 389,449 _________ _________ _________LiabilitiesTrade and other payables 110,044 110,044 8,378 _________ _________ _________Total current liabilities 110,044 110,044 8,378 _________ _________ _________Total liabilities 110,044 110,044 8,378 _________ _________ _________Total equity and liabilities 621,325 628,364 397,827 _________ _________ _________Statement of cashflowsfor the year ended 31 May 2014 Group Company Group & Company 2014 2014 2013 Restated £ £ £Cash flows from operating activitiesOperating loss (185,029) (180,109) (172,638)Foreign exchange differences 8,785 10,905 1,919Share-based payments 9,729 9,729 61,702Shares issued in lieu of services 5,774 5,774 -(Increase) in receivables (11,033) (1,146) (16,271)Increase in payables 101,666 101,666 8,378 _________ _________ _________Net cash utilised in operating activities (70,108) (53,181) (116,910) _________ _________ _________Cash flows from investing activitiesInterest received 477 477 385Advance of loan to subsidiary - (216,831) -Acquisition of intangible assets (199,905) - (11,472) _________ _________ _________Net cash utilised in investing activities (199,428) (216,354) (11,087) _________ _________ _________Cash flows from financing activitiesProceeds from the issue of share capital 189,000 189,000 500,000 _________ _________ _________Net cash from financing activities 189,000 189,000 500,000 _________ _________ _________Net (decrease) in cash and cash (80,535) (80,535) 372,003equivalentsCash and cash equivalents at beginning of 370,084 370,084 -yearEffect of exchange rate fluctuations on (10,905) (10,905) (1,919)cash held _________ _________ _________Cash and cash equivalents at end of year 278,644 278,644 370,084 _________ _________ _________Notes to the accountsThe principal accounting policies applied in the preparation of theseconsolidated financial statements are set out below:1 . Significant accounting policiesBasis of preparationThe consolidated financial statements and company financial statements ofNordic Energy Plc have been prepared for the first time in accordance withInternational Financial Reporting Standards ("IFRSs") as adopted by theEuropean Union, and those parts of the Companies Act 2006 applicable tocompanies reporting under IFRS. The disclosures required by IFRS 1 concerningthe transition from UK GAAP to IFRS are given in Note 18.Since the transition date, being the first day of the comparative period, noexemptions available under IFRS 1 have been taken.The financial statements have been prepared on the historical cost basis andare presented in GB Pounds sterling. Foreign operations are included inaccordance with the policies set out in Note 1.Standard and Interpretations issued but not yet effectiveAny Standards and Interpretations that have been issued but are not yeteffective, and that are available for early application, have not been appliedby the Company in these financial statements. Application of these Standardsand Interpretations is not expected to have a material effect on the financialstatements in the future.Going concernThe Company is at an early stage of exploration and in common with many oil andgas exploration companies, it raises financing for its exploration andappraisal activities in discrete tranches. The Company had working capital of £278,644 at 31 May 2014. In view of this, the directors consider that sufficientfunds will be available to progress the Company's planned explorationprogrammes and that it has adequate working capital for at least the nexttwelve months. The directors therefore consider it appropriate to prepare thesefinancial statements on the going concern basis.However, the existing funds will not be sufficient to bring the projects intodevelopment and production should it be warranted and, in due course, furtherfunding will be required. In the event that the Company is unable to securefurther finance it may not be able to fully develop its projects which may havea consequential impact on the recoverability of the carrying value of therelated intangible assets. Additionally, if the Company is unable to developits projects then it will have a consequential impact on the recoverability ofthe carrying value of investments in subsidiaries held by the parent company.Loss of parent companyAs permitted by section 408 of the Companies Act 2006, the statement ofcomprehensive income of the parent company is not presented as part of thesefinancial statements. The parent company's loss for the financial year was £179,633 (2013 - £172, 253).2. Prior period adjustmentIn preparing the financial statements for the year ended 31 May 2014, theDirectors identified that 39,000,000 warrants issued in the period ending 31May 2013 had not been fair valued at their grant date in line with therequirements of IFRS 2 "Share-based payments". The Directors haveretrospectively fair valued the warrants during the year as though thevaluation had been prepared as at the grant date. This has resulted in anincrease of £61,702 to the loss for the period ended 31 May 2013 and theformation of a share warrants reserve for the same amount.3. Loss per shareThe calculation of basic loss per share at 31 May 2013 was based on the lossattributable to ordinary shareholders of £184,552 (2013 - £172,253) and aweighted average number of ordinary shares outstanding during the period ended31 May 2014 of 95,585,439 (2013 - 78,363,178) calculated as follows: 2014 2013 Restated £ £Loss attributable to ordinary shareholdersLoss for the period 184,552 172,253 _________ _________Loss attributable to ordinary shareholders 184,552 172,253 _________ _________Weighted average number of ordinary shares Number NumberNumber of shares in issue at beginning of year 94,880,000 -Effect of shares issued during the year 705,439 78,363,178 _________ _________Weighted average number or ordinary shares in issue 95,585,439 78,363,178for the year _________ _________There is no difference between the basic and diluted loss per share.4. DividendAt this stage in the Company's development, the Directors will not be paying adivided.5. Accounts and ReviewThe information included in this announcement has been extracted from theaudited accounts. The final report for the year to 31 May 2014 will be sent toall shareholders on 3 November 2014. [ABSTRACT FROM PUBLISHER] |
