October 1, 2018 - 12:51 PM EDT
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Karoo Energy Plc - Audited Results to 30 April 2018

KAROO ENERGY PLC

(“Karoo Energy”, the “Group” or the “Company”)

AUDITED FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 APRIL 2018

Chief Executive Officer's statement and Group Strategic Report

for the year ended 30 April 2018

I am pleased to report that the Company has made progress during the year. We announced in the first half of this year that exploration work in the Gemsbok Basin covered by the Company's Prospecting Licences EL001/2012 and PL171/2015 has produced results which confirm the geological model for the Company's exploration programme.

This model, based on multiple research projects, including deep boreholes and seismic surveys, undertaken by the Department of Geological Survey of Botswana and other published academic works, predicts a deep sedimentary basin, the Gemsbok Basin, infilled by Karoo Supergroup sedimentary rocks underlain by Nama Group sedimentary rocks. Both groups of rock, Karoo and Nama, are known to contain organic shales which form the target for this exploration project.

Further work in the second half of the year has strengthened the findings that support our belief in the integrity of our licence areas and thus re-main committed to our belief for the potential for shale gas within our portfolio of licences, our anticipated move to AIM and associated fund raise will accelerate exploration work and I look forward to announcing our progress in due course.

Subsequent to the year end the Company has had a change of personnel with the appointment of a new Non-Executive Director, Mr Darren Hopkins ACA. Darren is a chartered accountant and is a very welcome addition to the team as we anticipate an upswing in operational activity subject to an imminent AIM listing. To this end the Company has appointed new brokers to assist with the fund raising requirements and, with their competence and commitment, are confident in a successful outcome in the final quarter of 2018.

FINANCIALS

The financial results for the year-ended 30 April 2018 show a loss after taxation of £877,835 (2017: £395,123) and year end cash of £41,419 (2017: £nil). The Group raised £502,449 net of expenses during the year through the issue of 16.899 million shares for the advancement of its Botswana licences and ongoing administrative expenses. It remains the focus of the Board to continue to progress the licence work programmes in Botswana in the most effective manner, utilising new technologies and the opportunities that the current low-cost exploration environment bring, whilst minimising the ongoing overhead and administrative cost burden to the extent that this does not impact adversely on operations.

The Company does not intend to pay a dividend for the year ended 30 April 2018.

REVIEW OF BUSINESS

The Company has made good progress during 2018 and has reviewed in detail its assets and operational strategy.

The Company is the holder of one of the largest shale gas licence areas in the world, comprising 4 licence areas and covering approximately 100,000 square km. We are always conscious of the challenges to explore and manage efficiently such large areas simultaneously.

The company remains very focused on shale gas, while also having CBM licences and as part of our strategy to sequence our exploration efforts whilst managing current and future cash resource, we applied for, and the Minister for Minerals and Mines kindly granted, a suspension of one of our shale gas licences, licence EL161-2015. This means that the licence commitments and time period in which they are due to be delivered are frozen. Licence PL2012-001 is under renewal. The Company also successfully applied for a suspension of its two CBM licences, this enables conservative cost management and a strategic focus on shale. The Company can now focus on just two of its four licences. The licence suspensions can be lifted at a time in the future at the Company’s discretion and are protected in the meantime under the Company’s ownership.

Subsequent to the year end the Company has engaged a strategic operational partner, Contax Partners, an experienced oil and gas project management company based in the Middle East but with projects under management worldwide. Contax has already begun work on the ground in Botswana and are encouraged by their findings to the extent that they wish to participate in a significant equity stake on admission to AIM. The Company is delighted with this new partnership and that it is aligned through its operational focus and incentivised through its proposed equity participation.

The strategic focus for the immediate future is to achieve an admission to AIM to enable significant fundraising to be carried out. The Company is confident, with the appointment of a new broker, that it will be successful however this is subject to completing fundraising and AIM approval. Assuming a successful admission is completed in the last quarter of 2018 then operational work will build up quickly on the ground. The work programme on the two shale gas licences is scheduled to be completed by July 2019. It is hoped this work programme on two of our licences may yield an estimated resource on one or both of these licence areas.

The Company also intends to do a dual listing on the Botswana Stock Exchange (BSE) following its admission to AIM. This will enable the raising of funds locally for the next phase of the exploration and possibly for any future production program.

ON BEHALF OF THE BOARD:

N Lyons - Director

1 October 2018

The Directors of the Company accept responsibility for the content of this announcement.

ENQUIRIES:

Company

Karoo Energy plc

Noel Lyons

Telephone: 020 3130 0674

Corporate Adviser

Peterhouse Capital Limited

Guy Miller / Mark Anwyl

Telephone: 020 7220 9795

Consolidated Statement of Profit or Loss

for the year ended 30 April 2018

                                                                                                      2018                                    2017

                                                                                                        £                                           £

CONTINUING OPERATIONS

Revenue                                                                                                  -                                           -

Administrative expenses                                                            (870,941)                             (388,123)

OPERATING LOSS                                                                   (870,941)                            (388,123)

Finance costs                                                                                 (7,000)                                (7,000)

Finance income                                                                                   106                                           -

LOSS BEFORE INCOME TAX (877,835) (395,123)

Income tax                                                                                              -                                           -

LOSS FOR THE YEAR (877,835) (395,123)

Loss attributable to:

Owners of the parent                                                                 (831,175)                            (381,914)

Non-controlling interests                                                              (46,660)                              (13,209)

                                                                                                 (877,835)                             (395,123)

Earnings per share expressed

in pence per share:                                  

Basic                                                                                                -0.43                                    -0.21

Diluted                                                                                             -0.43                                    -0.21

Consolidated Statement of Profit or Loss and Other Comprehensive Income

for the year ended 30 April 2018

                                                                                                      2018                                    2017

                                                                                                        £                                          £

LOSS FOR THE YEAR                                                               (877,835)                            (395,123)

OTHER COMPREHENSIVE INCOME                                                      -                                           -

TOTAL COMPREHENSIVE INCOME FOR THE YEAR
(877,835)

(395,123)

Total comprehensive income attributable to:

Owners of the parent                                                                 (831,175)                            (381,914)

Non-controlling interests                                                              (46,660)                              (13,209)

                                                                                                 (877,835)                             (395,123)

Consolidated Statement of Financial Position

30 April 2018

                                                                                                      2018                                    2017

                                                                                                        £                                           £

ASSETS

NON-CURRENT ASSETS

Intangible assets                                                                         135,439                               322,154

                                                                                                   135,439                               322,154

CURRENT ASSETS

Trade and other receivables                                                           41,072                                 95,260

Cash and cash equivalents                                                             41,419                                           -

                                                                                                     82,491                                 95,260

TOTAL ASSETS                                                                          217,930                               417,414

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital                                                                511,837                               469,590

Share premium                                                                        2,231,786                            1,771,584

Retained earnings                                                                   (2,843,187)                         (2,078,646)

                                                                                                   (99,564)                              162,528

Non-controlling interests                                                              (54,566)                                (7,906)

TOTAL EQUITY                                                                        (154,130)                              154,622

LIABILITIES

CURRENT LIABILITIES

Trade and other payables                                                            372,060                               262,792

TOTAL LIABILITIES                                                                 372,060                               262,792

TOTAL EQUITY AND LIABILITIES                                           217,930                               417,414

The financial statements were approved by the Board of Directors on 1 October 2018 and were signed on its behalf by:

N Lyons - Director

Company Statement of Financial Position

30 April 2018

                                                                                                      2018                                    2017

                                                                                                        £                                           £

ASSETS

NON-CURRENT ASSETS

Intangible assets                                                                                     -                                           -

Investments                                                                                312,674                               312,674

                                                                                                   312,674                               312,674

CURRENT ASSETS

Trade and other receivables                                                         189,841                               778,370

Cash and cash equivalents                                                             41,419                                           -

                                                                                                   231,260                               778,370

TOTAL ASSETS                                                                          543,934                            1,091,044

EQUITY

SHAREHOLDERS' EQUITY

Called up share capital                                                                511,837                               469,590

Share premium                                                                        2,231,786                            1,771,584

Opening retained earnings                                                      (1,319,916)                            (943,191)

Loss for year                                                                          (1,209,730)                            (376,725)

Retained earnings                                                                   (2,529,646)                         (1,319,916)

TOTAL EQUITY                                                                          213,977                               921,258

LIABILITIES

CURRENT LIABILITIES

Trade and other payables                                                            329,957                               169,786

TOTAL LIABILITIES                                                                 329,957                               169,786

TOTAL EQUITY AND LIABILITIES                                           543,934                            1,091,044

The financial statements were approved by the Board of Directors on 1 October 2018 and were signed on its behalf by:

N Lyons - Director

Consolidated Statement of Changes in Equity

for the year ended 30 April 2018

                                                                                                    Called up

                                                                                                       share          Retained          Share

                                                                                                      capital         earnings      premium

                                                                                                        £                    £                    £

Balance at 1 May 2016                                                              450,450     (1,696,732)     1,576,659

Changes in equity

Issue of share capital                                                                      19,140                     -         210,553

Cost of share issue                                                                                   -                     -          (15,628)

Total comprehensive income                                                                    -        (381,914)                    -

Balance at 30 April 2017                                                           469,590     (2,078,646)     1,771,584

Changes in equity

Issue of share capital                                                                      42,247                     -         494,375

Cost of share issue                                                                                   -                     -          (34,173)

Share based payments                                                                             -            66,634                     -

Total comprehensive income                                                                    -        (831,175)                    -

Balance at 30 April 2018                                                           511,837     (2,843,187)     2,231,786

                                                                                                                 Non-controlling                                                                                                                             Total

                                                                                                   Sub-Total      interests         equity

                                                                                                        £                    £                    £

Balance at 1 May 2016                                                              330,377             5,303         335,680

Changes in equity

Issue of share capital                                                                    229,693                     -         229,693

Cost of share issue                                                                        (15,628)                    -          (15,628)

Total comprehensive income                                                       (381,914)         (13,209)       (395,123)

Balance at 30 April 2017                                                           162,528            (7,906)        154,622

Changes in equity

Issue of share capital                                                                    536,622                     -         536,622

Cost of share issue                                                                        (34,173)                    -          (34,173)

Share based payments                                                                    66,634                     -           66,634

Total comprehensive income                                                       (831,175)         (46,660)       (784,515)

Balance at 30 April 2018                                                           (99,564)         (54,566)       (154,130)

Company Statement of Changes in Equity

for the year ended 30 April 2018

                                                                              Called up

                                                                                 share          Retained          Share             Total

                                                                                capital         earnings       premium         equity

                                                                                  £                    £                    £                    £

Balance at 1 May 2016                                        450,450        (943,191)     1,576,659      1,083,918

Changes in equity

Issue of share capital                                                19,140                     -          210,553         229,693

Cost of share issue                                                             -                     -          (15,628)         (15,628)

Total comprehensive income                                              -        (376,725)                    -        (376,725)

Balance at 30 April 2017                                     469,590     (1,319,916)     1,771,584         921,258

Changes in equity

Issue of share capital                                                42,247                     -          494,375         536,622

Cost of share issue                                                             -                     -          (34,173)

Share based payments                                                       -            66,634                     -           66,634

Total comprehensive income                                              -     (1,276,364)                    -     (1,143,096)

Balance at 30 April 2018                                     511,837     (2,529,646)     2,231,786         213,977

Consolidated Statement of Cash Flows

for the year ended 30 April 2018

                                                                                                      2018                                    2017

                                                                                                        £                                          £

Cash flows from operating activities

Cash generated from operations                                                (389,613)                            (405,570)

Interest paid                                                                                  (7,000)                                (7,000)

Net cash from operating activities                                              (396,613)                            (412,570)

Cash flows from investing activities

Purchase of intangible fixed assets                                               (64,523)                              (96,043)

Interest received                                                                                106                                           -

Net cash from investing activities                                                 (64,417)                              (96,043)

Cash flows from financing activities

Share issue                                                                                 502,449                               229,694

Costs of Share Issue                                                                                -                                (15,627)

Net cash from financing activities                                                502,449                               214,067

   

Increase/(decrease) in cash and cash equivalents 41,419 (294,546)
Cash and cash equivalents at beginning of year
 

-

294,546

   

Cash and cash equivalents at end of year
 

41,419

-

Source: PR Newswire (October 1, 2018 - 12:51 PM EDT)

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