Final Results

Independent Resources plc

("Independent Resources" or the "Company" or the "Group")

Audited results for the year ended 31 December 2015

Highlights

• First investment made in Egypt through the acquisition of a 25% effective working interest in East Ghazalat

• Completion of rationalisation of Italian cost base

• Farm-in discussions continue for Ksar Hadada and a one year licence extension was awarded post year end

• Equity fundraising of £1.51 million of new capital was completed during the year with further capital of £0.30 million

raised since year end

• Continued business development activities focused on producing assets in Egypt

• Continued uncertainty over Rivara gas storage project and timing and impact of legal proceedings

• Conservative accounting approach adopted in relation to joint venture investment in East Ghazalat pending resolution of disputes with licence operator

Key financials

• Adjusted loss for the year of £1.24 million (2014: £1.57 million)

• Operating loss on continuing activities of £1.81 million (2014: £1.57 million)

• Loss from discontinued Italian operations of £0.10 million (2014: £ 4.91 million)

• Loss for the year of £1.91 million (2014: £6.48 million)

• Cash at year end of £0.10 million (2014: £0.43 million)

• Cash at 28 June 2016 of £0.06 million (unaudited)

Chairman's statement

Introduction

Against the backdrop of widespread industry turmoil caused by the precipitous decline in oil prices during 2015 and

2016 we continued our efforts to refocus Independent Resources as an E&P company focused on North Africa. The

crude oil and natural gas markets are in a state of flux and elevated 2014 price expectations are now being

lowered to what is likely to be a more modest level settling somewhere near today's prices. Low cost assets with

opportunities to increase reserves and production levels are still to be found, mainly onshore in areas where there

is existing infrastructure and markets. We remain clear that Egypt and Tunisia meet those requirements.

Last October we made our first investment in Egypt through the acquisition of a 25 per cent working interest in

East Ghazalat as part of a joint venture transaction executed in conjunction with Nostra Terra Oil and Gas

Company plc. We recognise that this is a relatively small acquisition and it was and is intended to be the first of

several more significant acquisitions.

After the year end, we have now received approval from the Egyptian General Petroleum Company (EGPC) as a

new entrant in Egypt. This was a precondition to allow us to follow through on our commercial registration and

receive the revenues due to us since completion. It also facilitates our making further investments in a well-

established hydrocarbon province where interests in producing and near production assets remain available for

acquisition and where our management team has extensive experience.

In January of this year we updated the market on the difficulties with North Petroleum International Company SA

(North), the Chinese Government owned operator of East Ghazalat as we strive to restructure the cost base of the

licence. We continue to work to resolve these differences while protecting the interests of our shareholders.

In Tunisia we continue to seek a farm-in partner for our licence interest in Ksar Hadada. We have carried out

significant additional technical analysis of the prospectivity of the licence during the year and since year-end we

applied for and have obtained an additional one-year extension until August 2017 from the Tunisian Government to

complete the work programme.

At the time of our last full year results announcement, we explained that we were in the process of fundamentally

restructuring our Italian cost base in the light of the end of our coal bed methane related projects (Ribolla and

Casoni) and uncertainty over the timing of legal appeals in relation to the Rivara Gas Storage project. During 2015

we exited lease arrangements on our office in Rome and reached agreement with our Italian employees to bring an

end to their contract of employment. We appreciate their professional approach to these difficult decisions and

wish them well for the future. We continue to maintain a very modest administrative presence in Italy but one

which is appropriate given the status of our Italian operations.

We are still trying to ensure that the administrative tribunal hears our court case in relation to Rivara as soon as possible.

Since year-end we have taken extensive steps to reduce our creditor balances and reduce our ongoing cash burn

rates. This has only been possible with the support of key suppliers and board members and I wish to thank them

for their unfaltering support.

East Ghazalat

In October 2015 in conjunction with Nostra Terra we acquired Trans Globe Energy Corporation's 50% interest in the

East Ghazalat licence located in the Western Desert of Egypt. This is intended to be an initial entry vehicle in

Egypt which will then allow the Company to follow with further more material and interesting acquisitions to build a

cash flow generative business based on solid revenues with compelling investment opportunities.

At the time of acquisition, East Ghazalat was generating approximately 880 barrels per day of gross production in

which we have a 25 per cent interest. The transaction was structured as a corporate acquisition of a single asset

subsidiary of TransGlobe Energy Corporation Inc. for a total consideration of $3.5 million of which $2.5 million was

deferred as a vendor loan note, payable in September 2017. The transaction was executed through a joint venture

company in conjunction with Nostra Terra Oil and Gas.

Our comprehensive diligence on this asset made us aware that significant restructuring of the licence cost base

was necessary to ensure that East Ghazalat would contribute to group cash flows in a low oil price environment

but that holding a combined 50 per cent interest in the licence through the joint-venture with Nostra Terra would

ensure that we are in a position to ensure that the management of the licences is in accordance with our best

interests and plans. We therefore envisaged that there would be difficult discussions with the operator to ensure

that activities on East Ghazalat would be prudently managed and ensure costs are appropriate for the scale of

activity on the licence.

Post year end as disclosed in our regulatory announcements of 25th January 2016 we received notice of default in

relation to cash calls raised by the operator. We believe those cash calls to be fundamentally erroneous and

unjustifiable in the context of the licence, in comparison with other interests North has in Egypt and the business

environment and we have therefore declined to pay them.

We have formally rebutted the claims from North for payment and in relation to the alleged default and continue to

engage with EGPC to promote our case in relation to East Ghazalat.

North's continuing and consistent refusal to furnish financial information to allow a proper understanding of past

costs has contributed substantially to the current breakdown in relations. The patchwork of billing estimates

provided to date have been issued outwith the procedures in the Joint Operating Agreement, and in our view are

unjustifiable and fundamentally unreasonable given the level of production, drilling and exploration activity on East

Ghazalat. We have been unable to agree a budget with North for 2016 which has constrained activity, although

 given low oil prices we believe this is actually an appropriate posture.

In light of the lack of any access to robust financial information we have agreed with our auditors that for the 2015

year end it is prudent that we account for our investment in the East Ghazalat licence at historical cost and we will

not consolidate any share of profits or losses for the period since 1 July 2015, the effective date of the transaction

in respect of that investment.

The loan note principal payable to Trans Globe is determined only on formal agreement of the final working capital

adjustment as provided in the sale and purchase agreement. The loan note principal is varied with that working

capital adjustment. We continue to work with Trans Globe to determine the final working capital amount and thus

the loan note principal. At 31 December 2015 we have provided for the loan note principal based on Trans Globe's

initial assessment of working capital at completion and provided for accrued interest on this estimate although we

have not yet made the interest payment that could have been due at March 31, 2016 since the loan note amount is

not finalised.

There are also unrecovered amounts due to our joint venture with Nostra Terra Oil and Gas plc from North in

relation to outstanding historical joint operating agreement audit claims and we have served notice on them of our

intention to conduct an audit of the East Ghazalat licence costs for 2013 and 2014. We also reserve the right to

conduct an audit in relation to 2015. We have not reflected any estimate of the amounts that could be recovered

by the joint venture in respect of audits at this year-end.

The directors remain confident that our joint venture interest in East Ghazalat will create value for shareholders and

therefore that no impairment is necessary in respect of the carrying value of the group's joint-venture investment in

East Ghazalat at 31 December 2015.

We appreciate in light of the matter above our auditors have qualified their opinion on the financial statements due to the limitation of scope.

Ksar Hadada

During 2015, we continued to seek a farm-in partner - there can be no doubt that the difficulty of achieving this

was increased by the drop in oil prices and increased concerns over the security situation in Tunisia after terrorist

events in 2015.

We remain in discussions with a number of parties regarding investment.

The potential economic returns from the licence remain highly attractive even at lower oil prices. In August 2015

we commissioned a Remote Sensing Direct Detection of Hydrocarbon Survey by Scotforth Ltd. which provided

additional confirmation of the prospectivity of the licence and substantiated our belief in the merits of targeting

Acacus prospects for future exploration activities.

Since year-end we have increased our contractor interest to 100 percent by facilitating the withdrawal of our

minority licence partners and successfully applied to the Consultative Committee on Hydrocarbons in Tunisia for a

further one-year extension to the Ksar Hadada permit until 7 August 2017.

Italy

We have continued to rationalise our Italian operations and exited our office lease arrangements during the year

and settled redundancy arrangements for all of our Italian employees.

After the year end we have now successfully relinquished our coal bed methane assets in Ribolla and Casoni with

no further obligations.

We continue to maintain a minimal administrative presence pending clarity on the outcome of the Rivara

proceedings. 2015 represented another year of frustration as we continued to await the commencement of the

Administrative court proceedings as we contest the positions taken in 2012 by the Emilia-Romagna region and the

Ministry of Economic Development. Through our Italian legal counsel, we continue to actively seek a date for

commencement of the court proceedings in order to bring clarity regarding the future of the project.

The future economic value of Rivara remains dependent upon a successful outcome to the court case but as in

previous years no impairment provision has been taken until the outcome of such a process becomes known.

Financial review

The Group reported a consolidated loss of £1.91 million for the year to 31 December 2015 (2014: £6.48 million).

The reported loss for the period includes the group's share of losses of its joint venture with Nostra Terra Oil and

Gas Company plc of £0.16 million (2014: £nil), where due to limitations on financial information available from the

licence operator it was not possible to consolidate the group's share of revenues and costs attributable to its

licence interest in East Ghazalat.

The reported loss for the year included:

• charges of £0.30 million (2014: £nil) in respect of warrants issued over ordinary shares in relation to equity

fundraisings completed during the year;

• charges of £0.05 million (2014: £0.01 million) in relation to the IFRS 2 charge for share options;

• fundraising costs of £0.07 million (2014: £nil) charged to the profit and loss account during the period. All prior

period fundraising costs were charged to the share premium account; and

• loss and impairment charge in respect of discontinued Ribolla coal bed methane operations of £0.10 million

(2014: £4.55 million).

After the effect of these items are excluded, the adjusted loss for the period was £1.24 million (2014: £1.56 million),

a reduction of 20.7 per cent. in 2015.

The loss for the year ended 31 December 2015 also included accrued directors' remuneration charges of £0.20 million

(2014: £0.06 million) and accrued fees to other key management personnel of £0.08 million (2014: £0.01 million). It

is the stated intention that these accrued charges will be settled through the issue of new ordinary shares at a

significant premium to the share price in recent months rather than in cash.

Of the remuneration actually paid to directors and key management personnel during 2015, £0.14 million was

reinvested in new ordinary shares during the year.

Consolidated net assets at 31 December 2015 were £4.98 million (2014: £5.41 million).

At 31 December 2015 the consolidated balance sheet included approximately £3.64 million (2014: £5.24 million) of

past investment in relation to group's Italian gas storage project at Rivara. Pending resolution of the legal

proceedings the carrying value of Rivara has not been impaired.

Cash used in continuing operations totalled £1.32 million (2014: £1.63 million) after adjustments for non-cash items

with capital expenditures incurred during the year of £0.37 million (2014: £0.23 million), predominantly related to

the joint-venture investment in East Ghazalat.

There was £0.1 million of available cash at 31 December 2015 (2014: £0.42 million). Gross equity capital of £0.3 million

was raised since year end through a placing of ordinary shares and the issue of a convertible loan note.

Group cash balances at 28 June 2016 were £0.06 million (unaudited).

Going concern

The financial information for the year to 31 December 2015 has been prepared assuming the group will continue as

a going concern.

Under the going concern assumption, an entity is ordinarily viewed as continuing in business for the foreseeable

future with neither the intention nor the necessity of liquidation, ceasing trading or seeking protection from creditors

pursuant to laws or regulations.

The assessment has been made based on the group's anticipated activities which have been included in the financial forecast for

the years 2016 and 2017. We also carefully manage operating and administrative costs. Since January 2015 the board as a

demonstration of commitment to the future success of the Company have foregone receipt of salaries and fees in cash in favour

of share based remuneration until such time as resumption of cash salaries is appropriate. Since the year end we have taken

steps to significantly reduce our creditors from the year-end position through the issue of new ordinary shares and through

agreement of plans with the directors to forego cash salaries for equity-based compensation.

Whilst the directors remain acutely cost conscious and value focused the group will still need to attract additional funding to

continue in operation to fund additional investments and to work programme costs in relation to Ksar Hadada. In relation to Ksar

Hadada, management's intention remains to secure a farm-in or investment partner to cover programme costs.

We continue to await our share of licence revenues from East Ghazalat to which we have been entitled since 1 July 2015, the

effective date for the transaction with TransGlobe Energy Corporation estimated. Management are actively working towards

securing collection of these revenues.

The group will still need to attract additional funding in forthcoming months to continue in operation and to fund acquisitions of

new licence interests.

Based on the above, the directors have formed a judgment that the going concern basis should be adopted in

preparing the financial statements.

Should the group be unable to continue trading, adjustments would have to be made to reduce the value of the assets to their

recoverable amounts, to provide for further liabilities which might arise and to classify fixed assets as current

Business development

On an ongoing basis the company continues to examine possible transactions to increase our production portfolio.

Egypt remains our primary country of focus now that we have received approval from EGPC as a new entrant.

We thank shareholders for their patience and look forward to providing positive updates in forthcoming months.

For more information, please visit www.ir-plc.com or contact:

Greg Coleman

Independent Resources plc

020 3367 1134

Adam James

Panmure Gordon (UK) Limited

020 7886 2500

(Nominated Adviser & Joint Broker)

Oliver Stansfield

Brandon Hill Capital

020 3463 5000

Jonathan Evans

(Joint Broker)

Simon Hudson

Tavistock Communications

020 7920 3150

Independent Resources plc

Consolidated statement of comprehensive income

Year ended 31 December 2015

Notes

Year to 31 December 2015

Year to 31 December 2014

Continuing operations

£

£

Revenue

2

-

-

Cost of sales

-

-

Gross profit

-

-

Administrative expenses

(1,652,631)

(1,613,026)

Other operating income

-

42,509

Operating loss

(1,652,631)

(1,570,517)

Financial income

351

2,183

Financial expense

(3,533)

(4,394)

Share of post-tax losses of equity

accounted joint ventures

8

(156,985)

-

Loss before tax

(1,812,798)

(1,572,728)

Taxation

4

-

-

Loss from continuing operations

(1,812,798)

(1,572,728)

Discontinued operations

Loss after taxation for the year from

discontinued operations

3

(96,269)

(4,907,737)

Loss for the year

(1,909,067)

(6,480,465)

Other comprehensive income:

Other comprehensive income to be reclassified to profit

or loss in subsequent periods (net of tax)

Exchange difference on translating foreign operations

(296,126)

(650,799)

Total comprehensive loss for the year

(2,205,193)

(7,131,264)

Loss attributable to:

Owners of the parent

(1,909,067)

(6,480,465)

Total comprehensive loss attributable to:

Owners of the parent

(2,205,193)

(7,131,264)

Loss per share (pence)

5

Basic

(1.1)

(8.3)

Diluted

(1.1)

(8.3)

Loss per share (pence) for continuing operations

Basic

(1.0)

(2.0)

Diluted

(1.0)

(2.0)

Independent Resources plc

Consolidated statement of financial position

As at 31 December 2015

Notes

31 December 2015

31 December 2014

£

£

Non-current assets

Property, plant and equipment

11,127

13,016

Goodwill

6

-

-

Other intangible assets

7

5,387,018

5,603,152

Investments in equity-accounted

joint ventures

8

137,906

-

5,536,051

5,616,168

Current assets

Other receivables

488,877

206,027

Cash and cash equivalents

101,300

425,909

590,177

631,936

Assets held for distribution

3

43,179

47,683

633,356

679,619

Current liabilities

Trade and other payables

 (1,164,063)

(609,010)

Liabilities directly associated with the

assets held for distribution

3

(20,968)

(279,989)

 (1,185,031)

(888,999)

Net current assets

(551,675)

(209,380)

Net assets

4,984,376

5,406,788

Equity attributable to equity holders of the parent

Share capital

9

2,159,247

1,051,434

Share premium

10

16,628,623

16,302,050

Warrant reserve

302,453

-

Share option reserve

71,718

25,776

Foreign currency translation reserve

(335,690)

(39,564)

Retained earnings

(13,841,975)

(11,932,908)

Total equity

4,984,376

5,406,788

Independent Resources plc

Statement of changes in equity

Year ended 31 December 2015

Retained

Share

Share

Warrant

Share

Foreign

Total

earnings

capital

premium

reserve

option

currency

equity

reserve

translation

reserve

£

£

£

£

£

£

£

Consolidated

1 January 2014

(5,856,399)

458,369

 15,287,351

-

418,919

611,235

10,919,475

Loss for the year

(6,480,465)

-

-

-

-

-

(6,480,465)

Exchange differences

-

-

-

-

-

(650,799)

(650,799)

Total comprehensive loss for

the year

(6,480,465)

-

-

-

-

(650,799)

(7,131,264)

New shares issued

-

593,065

1,186,129

-

-

-

1,779,194

Share issue costs

-

-

(171,430)

-

-

-

(171,430)

Share options lapsed

403,956

-

-

-

(403,956)

-

-

Share-based payments

-

-

-

-

10,813

-

10,813

31 December 2014

 (11,932,908)

1,051,434

 16,302,050

-

25,776

(39,564)

5,406,788

1 January 2015

 (11,932,908)

1,051,434

 16,302,050

-

25,776

(39,564)

5,406,788

Loss for the year

(1,909,067)

-

-

-

-

-

(1,909,067)

Exchange differences

-

-

-

-

-

(296,126)

(296,126)

Total comprehensive loss for

the year

(1,909,067)

-

-

-

-

(296,126)

(2,205,193)

New shares issued

-

1,107,813

405,334

-

-

-

1,513,147

New share warrants issued

-

-

-

302,453

-

-

302,453

Share issue costs

-

-

(78,761)

-

-

-

(78,761)

Share options lapsed

-

-

-

-

-

-

-

Share-based payments

-

-

-

-

45,942

-

45,942

31 December 2015

 (13,841,975)

2,159,247

 16,628,623

302,453

71,718

(335,690)

4,984,376

Independent Resources plc

Consolidated statement of cash flows

Year ended 31 December 2015

Year to 31 December 2015

Year to 31 December 2014

£

£

Cash flows from operating activities

Loss from continuing operations

(1,812,798)

(1,572,728)

Loss from discontinued operations

(96,269)

(4,907,737)

(1,909,067)

(6,480,465)

Adjustments for:

Depreciation of property, plant and equipment

5,372

10,724

Impairment of intangible assets and goodwill

-

4,547,705

Share of post-tax loss of equity accounted joint ventures

156,985

-

Placing costs expensed

69,244

-

Share-based payments

45,942

10,813

Warrants issued

302,453

-

Financial income

(351)

(2,183)

Financial expense

3,533

4,394

(1,325,889)

(1,909,012)

(Increase)/decrease in other receivables

(289,826)

218,331

Decrease in net amounts held for disposal

(254,517)

-

Increase in trade and other payables

555,053

81,494

Cash used in operations

(1,315,179)

(1,609,187)

Income taxes received

-

-

Net cash used in operating activities

(1,315,179)

(1,609,187)

Cash flows from investing activities

Interest received

351

2,183

Interest paid

(3,533)

(4,394)

Acquisition of equity accounted joint venture

(294,891)

-

Purchase of intangible assets

(73,013)

(219,512)

Purchases of property, plant and equipment

(3,486)

(14,062)

Net cash used in investing activities

(374,572)

(235,785)

Cash flows from financing activities

Issue of share capital

1,513,147

1,779,194

Share issue costs

(148,005)

(171,430)

Net cash from financing activities

1,365,142

1,607,764

Net decrease in cash and cash equivalents

(324,609)

(237,208)

Cash and cash equivalents at 1 January 2015

425,909

663,117

Cash and cash equivalents at 31 December 2015

101,300

425,909

1

Basis of preparation

The company's functional currency is the Euro, and presentational currency is Great British Pounds Sterling.

The financial information has been prepared in accordance with International Financial Reporting Standards

("IFRS"), IFRIC interpretations and with those parts of the Companies Act 2006 applicable to companies preparing

their accounts under IFRS, as adopted by the European Union, and the Companies Act 2006. The financial

information has been prepared under the historical cost convention, as modified by revaluations of financial assets

and financial liabilities at fair value through the statement of comprehensive income. Details of the accounting

policies applied are set out in the financial statements for the year ended 31 December 2014 and have not

changed for the year ended 31 December 2015.

The financial information set out in this announcement does not constitute audited financial statements for the year

ended 31 December 2015. The financial information for the year ended 31 December 2014 is derived from the

statutory accounts for that year which have been delivered to the Registrar of Companies. The auditors reported on

those accounts: their report was unqualified but did include emphases of matter regarding the ongoing status of

the Rivara project and the ability of the company to continue as a going concern.

The financial information for the year ended 31 December 2015 is derived from the financial statements, but does not

constitute the group's financial statements. The company's auditors have reported on the statutory financial

statements for the year ended 31 December 2015 and their report is qualified, and also include emphases of matter, as follows:

Basis for qualified opinion on financial statements

The scope of our work was limited as a result of the following matter. As disclosed in the financial statements a dispute has arisen

in relation to the operation of the joint venture arrangements relating to the group's 25 per cent. working interest in the East

Ghazalat production licence, held through Independent Resources (Egypt) Limited, in which the group holds a 50 per cent

interest (the 'Joint Venture'). After the reporting period the Joint Venture was served with notice of default in relation to cash

calls raised by North Petroleum International S.A. ("North Petroleum") the operator of East Ghazalat. The Joint Venture has

rebutted the claims from North Petroleum but the breakdown in relations has meant that operator North Petroleum has

continued to refuse to furnish financial information to allow a proper determination of licence costs and an audit of licence

revenues to be completed. In addition, the quantum of a vendor loan note initally of $2.5 million issued by the Joint Venture

as partial consideration for the transaction remains subject to final determination in accordance with the sale and purchase

agreement. The group has been unable to engage the vendor in discussions about this issue yet. As a consequence of the

lack of access to primary accounting records we have been unable to obtain sufficient appropriate audit evidence in relation

to the group and company financial statements concerning:

• the carrying value of £137,906 of the group's investments in equity-accounted joint ventures as at 31 December 2015;

• the carrying value of £294,891 of the company's investments in equity accounted joint ventures as at 31 December 2015;

• the actual quantum of the loan note principal and interest accrued thereon by the Joint Venture at 31 December 2015; and

• the group's share of any profit or loss attributable to the group's underlying interests in the East Ghazalat licence for the

period from 1 July 2015 to 31 December 2015.

Emphasis of matter - development and exploration intangible asset

In forming our opinion on the financial statements which is not qualified in this respect, we have considered the adequacy of the

disclosures made in to the financial statements concerning the ongoing process of the appeal before the

Emilia Romagna Bologna Administrative Court in respect of the approval of the development of the Rivara project. In the event

that the group is not successful in its appeal, the expenditure capitalised in respect of this project will be subject to

impairment testing. No adjustment has been made in relation to the carrying value of this capitalised expenditure in the

financial statements of the group or the carrying value of the company's investment in and amounts recoverable from

subsidiary undertakings.

Emphasis of matter - going concern

In forming our opinion on the financial statements, which is not qualified in this respect, we have considered the adequacy of the

disclosure made in the financial statements concerning the company's ability to continue as a going concern. The

financial statements have been prepared on the going concern basis, which depends on the ability of the company to raise

funds, generate investment and/or the collection of revenues. These conditions, along with the other matters explained in

the financial statements, indicate the existence of a material uncertainty which may cast significant doubt about 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

The financial information set out in this announcement was approved by the board on ……..

The directors do not recommend the payment of a final dividend (2014: £Nil).

2

Business segments

The group has adopted IFRS 8 Operating segments. Per IFRS 8, operating segments are based on internal reports

about components of the group, which are regularly reviewed and used by the Board of Directors being the Chief

Operating Decision Maker ("CODM") for strategic decision making and resource allocation, in order to allocate

resources to the segment and to assess its performance. The group's reportable operating segments are as follows:

a.

Parent company

b.

Rivara

c.

Ksar Hadada

The previously reported segment of Ribolla Basin CBM assets has been classified as a discontinued operation and has been

excluded from the analysis below.

The CODM monitors the operating results of each segment for the purpose of performance assessments and

making decisions on resource allocation. Performance is based on assessing progress made on projects and

the management of resources used. Segment assets and liabilities are presented inclusive of inter-segment

balances.

The group did not generate any revenue during the year to 31 December 2015 nor in the year to 31 December 2014.

Information regarding each of the operations of each reportable segment within continuing operations is included in

the following table.

Parent

Rivara

 Ksar Hadada

Consolidation

 Total

company

£

£

 £

 £

 £

Year to 31 December 2015

Interest revenue

92,800

7,107

-

(99,556)

351

Interest expense

(5,142)

(59,780)

-

61,389

(3,533)

Depreciation

5,335

37

-

-

5,372

Impairment of

intangible assets

-

-

-

-

-

Income tax

-

-

-

-

-

Loss before tax

(1,938,281)

(96,672)

(95,412)

317,567

(1,812,798)

Assets

4,763,050

6,352,843

442,739

(5,432,404)

6,126,228

Liabilities

(1,084,119)

(2,717,707)

(1,054,449)

3,692,212

 (1,164,063)

Consolidation adjustments in respect of the loss before tax includes the loss of £156,985 in relation to equity accounted

joint ventures.

Consolidation adjustments in respect of assets includes the loss of £156,985 in relation to equity accounted joint ventures.

Year to 31 December 2014

Interest revenue

139,184

12,633

-

(149,634)

2,183

Interest expense

-

(68,168)

-

63,774

(4,394)

Depreciation

2,816

40

-

-

2,856

Impairment of

intangible assets

-

-

-

-

-

Income tax

-

-

-

-

-

Loss before tax

(9,398,072)

(198,236)

(129,676)

8,153,256

(1,572,728)

Assets

4,378,459

6,955,152

374,451

(5,459,958)

6,248,104

Liabilities

(544,028)

(3,003,712)

(890,749)

3,829,479

(609,010)

The geographical split of non-current assets arises as follows:

 United

 Overseas

 Total

 Kingdom

 £

 £

 £

31 December 2015

Intangible assets

-

5,387,018

5,387,018

Goodwill

-

-

-

Property, plant and equipment

11,119

8

11,127

31 December 2014

Intangible assets

-

5,603,152

5,603,152

Goodwill

-

-

-

Property, plant and equipment

12,968

48

13,016

3

Discontinued operations

The group was unable to find an investment partner for the coal bed methane opportunities at Fiume Bruna and Casoni,

in Italy, therefore, these opportunities will no longer be pursued. As a result the directors decided, prior to 31 December 2014,

to significantly reduce its activities in Italy and to discontinue the activities within Independent Energy Solutions srl which

dealt solely with these opportunities. With Independent Energy Solutions srl classified as discontinued operations, the

Ribolla Basin CBM assets segment is no longer presented in the segment note. The results of Independent Energy

Solutions srl, incorporating consolidation adjustments, are presented below:

Year to 31 December 2015

Year to 31 December 2014

£

£

Revenue

-

-

Administrative expenses

(96,272)

(360,916)

Operating loss before impairment

(96,272)

(360,916)

Impairment of the historic cost and carrying value of intangible

assets

-

(4,096,939)

Impairment of goodwill arising on acquisition of Independent Energy

Solutions srl - consolidation adjustment

-

(450,766)

Operating loss after impairment

(96,272)

(4,908,621)

Financial income

3

884

Financial expense

-

-

Loss on ordinary activities before taxation

(96,269)

(4,907,737)

Taxation

-

-

Loss for the year from discontinued operations

(96,269)

(4,907,737)

The major classes of assets and liabilities of Independent Energy Solutions srl classified as held for distribution to equity

holders of the parent as at 31 December 2015 are as follows:

31 December 2015

31 December 2014

£

£

Assets

Intangible assets - fully impaired

-

-

Property, plant and equipment

-

9,026

Other receivables

35,107

22,008

Cash and cash equivalents

8,072

16,649

Assets held for distribution

43,179

47,683

Liabilities

Trade and other payables

(20,968)

(279,989)

Liabilities directly associated with the assets held for distribution

(20,968)

(279,989)

Net assets directly associated with disposal group

22,211

(232,306)

The net cash flows incurred by Independent Energy Solutions srl are as follows:

Year to 31 December 2015

Year to 31 December 2014

£

£

Operating

(53,092)

25,297

Investing

3

(61,737)

Financing

-

-

Net cash (outflow)/inflow

(53,089)

(36,440)

Loss per share (pence)

Year to 31 December 2015

Year to 31 December 2014

Liabilities directly associated with the assets held for distribution

(0.1)

(6.3)

Liabilities directly associated with the assets held for distribution

(0.1)

(6.3)

Immediately before the classification of Independent Energy Solutions srl as discontinued operations, the recoverable

amount was estimated for certain items of property, plant and equipment and no impairment was identified. No adjustment

has been made to reduce the carrying amount of the assets in the disposal group to their fair value less costs to distribute.

Immediately before the classification of Independent Energy Solutions srl as discontinued operations, the recoverable

amount was estimated for the company's intangible assets and these were impaired in full.

4

Taxation

Year to 31 December 2015

Year to 31 December 2014

£

£

Tax on profit on ordinary activities

Taxation charged based on profits for the period

UK corporation tax based on the results for the period

-

-

Total tax expense in income statement

-

-

Reconciliation of the tax expense

The tax assessed for the year is different from the standard rate of corporation tax in the UK (20.25%). The differences are

explained below:

Year to 31 December 2015

Year to 31 December 2014

£

£

Loss on ordinary activities before taxation

(1,812,798)

(1,572,728)

Loss on ordinary activities multiplied by standard rate

of corporation tax in the UK of 20.25% (2014: 21.5%)

(367,092)

(338,136)

Effects of:

Expenses disallowed for tax purposes

29,283

2,540

Deferred tax not provided - tax losses carried forward

352,985

335,596

Total current tax

15,176

-

The group has tax losses available to be carried forward in certain subsidiaries and the parent. With anticipated

substantial lead times for the group's projects, and the possibility that these may therefore expire before their use, it is

not considered appropriate to anticipate an asset value for them.

No amounts have been recognised within tax on the results of the equity accounted joint ventures.

5

Loss per share

The calculation of basic and diluted loss per share at 31 December 2015 was based on the loss attributable to ordinary

shareholders of £1,909,067. The weighted average number of ordinary shares outstanding during the year ending

31 December 2015 and the effect of the potentially dilutive ordinary shares to be issued are shown below.

Year to 31 December 2015

Year to 31 December 2014

 £

 £

Net loss for the year

(1,909,067)

(6,480,465)

Basic weighted average ordinary shares

in issue during the year

178,744,458

77,683,625

Diluted weighted average ordinary shares

in issue during the year

178,744,458

77,683,625

Loss per share (pence)

Basic

(1.1)

(8.3)

Diluted

(1.1)

(8.3)

In accordance with IAS 33 and as the average share price in the year is lower than the exercise price, the share options

do not have a dilutive impact on earnings per share for the year ending 31 December 2015.

Deferred shares have been excluded from the calculation of loss per share due to their nature. Please see note 9 for details

of their rights.

6

Goodwill (group)

Goodwill

£

31 December 2015

Cost

1 January 2015 and 31 December 2015

450,766

Impairment

1 January 2015

450,766

Impairment charge for the year

-

31 December 2015

450,766

Carrying amount

31 December 2015

-

31 December 2014

-

31 December 2014

Cost

1 January 2014 and 31 December 2014

450,766

Impairment

1 January 2014

-

Impairment charge for the year

450,766

31 December 2014

450,766

Carrying amount

31 December 2014

-

31 December 2013

450,766

The goodwill arises as a result of the acquisition of Independent Energy Solutions srl which contains the Ribolla project.

The group was unable to find an investment partner for the coal bed methane opportunities at Fiume Bruna and Casoni,

in Italy, therefore, these opportunities will no longer be pursued. As a result the directors have decided that the carrying

value of the goodwill is not recoverable and have fully provided against this.

7

Other intangible assets (group)

Development and exploration

Rivara gas

Ribolla Basin

Ksar Hadada

Total

storage

CBM assets

exploration

facility

acreage

£

£

£

£

31 December 2015

Cost

1 January 2015

5,239,353

4,096,939

1,444,628

10,780,920

Exchange differences

(289,147)

(226,100)

-

(515,247)

Additions

-

-

73,013

73,013

31 December 2015

4,950,206

3,870,839

1,517,641

10,338,686

Impairment

1 January 2015

-

4,096,939

1,080,829

5,177,768

Exchange differences

-

(226,100)

-

(226,100)

Impairment charge for the year

-

-

-

-

31 December 2015

-

3,870,839

1,080,829

4,951,668

Carrying amount

31 December 2015

4,950,206

-

436,812

5,387,018

31 December 2014

5,239,353

-

363,799

5,603,152

31 December 2014

Cost

1 January 2014

5,584,997

4,316,859

1,307,337

11,209,193

Exchange differences

(365,374)

(282,411)

-

(647,785)

Additions

19,730

62,491

137,291

219,512

31 December 2014

5,239,353

4,096,939

1,444,628

10,780,920

Impairment

1 January 2014

-

-

1,080,829

1,080,829

Impairment charge for the period

-

4,096,939

-

4,096,939

31 December 2014

-

4,096,939

1,080,829

5,177,768

Carrying amount

31 December 2014

5,239,353

-

363,799

5,603,152

31 December 2013

5,584,997

4,316,859

226,508

10,128,364

The primary intangible assets are all internally generated.

For the purpose of impairment testing of intangible assets, recoverable amounts have been determined based

upon the value in use of the group's three projects.

Ribolla Basin CBM assets

The group was unable to find an investment partner for the coal bed methane opportunities at Fiume Bruna and Casoni,

in Italy, therefore, these opportunities will no longer be pursued. As a result the directors have decided that the carrying

value of the intangible asset is not recoverable and have fully provided against this.

Rivara gas storage facility

Despite the expected delay, a review of the latest management information and projections shows a net present value

significantly in excess of assets and liabilities relating to the project. The main assumptions indicate that no significant

change has arisen on these calculations which would materially impact on the group.

The continuing analysis and testing of technical data continues to indicate that the project is feasible.

The group continues to work towards, and is confident of, obtaining all the necessary approvals from regulatory

authorities. The group anticipates being able to raise the necessary finance to continue to develop the project.

Value in use

Value in use has been calculated separately for the group's Rivara gas storage facility. Cash flows are projected for

the periods up to the date that the project is expected to become commercially operational and from then until

operations are expected to cease, based upon management's expectations. These dates depend on a number of variables,

including the project's technical feasibility, regulatory approval, forecast revenue prices and the associated development

and operational costs.