Clontarf Energy - analysts upbeat about company's prospects

Broker Shore Capital took a positive stance on Clontarf Energy's 2010 (LON:CLON) results statement today, saying the firm had sufficient funds to pay for its current work programme and had given a 'useful' update about activities across its portfolio.

Clontarf told investors it had the funds, skills and contacts to deliver today as it posted the figures for the year to 31 December 2010.

The firm - focused in Ghana, Peru and Bolivia - relisted on AIM earlier this year following a reverse takeover of Persian Gold by Hydrocarbon Exploration -  an unlisted company.

Analyst Craig Howie, of Shore Capital, said: "Today’s results are the first material piece of news-flow from the company since its re-admission to AIM via a reverse takeover in April 2011, when Clontarf raised £2.7mln in a placing accompanying the deal.

"The numbers themselves are of little relevance, to our minds, as they pre-date the reverse takeover, and therefore do not cover the activities of the enlarged group."

Chairman John Teeling said today the firm's reorganisation had made it evaluate its projects - one result of this will be the likely disposal of projects in Iran and the Gulf of Mexico.

The firm reported a pre-tax loss of £2.2 million compared to a loss of £316,000 in 2009. The loss per share was 2.96 pence as opposed to 0.42 pence loss per share in 2009.

Net cash generated from financing activities stood at £20,425.

Running through the highlights, Clontarf said that, in Ghana, it awaited parliamentary approval on the 60 percent -owned 1,532 sq km Tano 2A oil exploration concession.

Late in 2010, it was awarded two prospective onshore blocks in Peru - the official signing of the licences expected later next month (July), it said.

Two wells are scheduled to be drilled in the second half of this year  on El Dorado  - a producing gas field in eastern Bolivia.

Meanwhile, negotiations are continuing to increase the firm's 30 percent stake in the Monteagudo gas field in central Bolivia to 50 percent and to gain operatorship.

Operating in Iran, where the firm has inherited mineral prospects, has become difficult. In the Gulf of Mexico, difficulties have also been encountered and the loss of value was sudden and unexpected, said the firm.

A subsidiary of Clontarf - Endeavour Oil and Gas - holds royalties on block 52 in the Gulf and a working 62 percent interest in block 30. Royalties are totally dependent on the price of natural gas.

Howie said : "In our opinion, the Tano 2A block on and offshore Ghana looks particularly exciting, given successive discoveries by Kosmos and Tullow in a country which is growing in importance as a major oil producer.

"Clontarf is awaiting formal ratification of the Tano 2A block although, in the meantime, the company has reprocessed and analysed over 760 line kilometres of 2D seismic data, revealing prospective areas, particularly in the offshore portion."

In onshore Peru, the firm was looking forward to the formal award of two blocks close to existing discoveries and infrastructure - with reinterpretation of seismic and well data underway, he said.

"A farmout or joint venture deal looks likely in Peru in due course.

The analyst added: "The commentary in today’s results is very much in line with our expectations, and we think that final ratification/award of Clontarf’s blocks in Ghana and Peru would be viewed by the market very positively.

"In the meantime, we believe that Clontarf has already made good progress with data interpretation work in both locations. The management team’s past success with the disposal in 2010 of Pan Andean Resources to Petrominerales provides added encouragement, to our minds."

Jason Robertson, of broker Optiva Securities, was also upbeat about Clontarf Energy.

"We believe the stock offers tremendous value for an oil and gas company given its range of assets/projects and market cap of only £9 million," he said.