(LOGP) Lansdowne Oil & Gas

Lansdowne Oil & Gas plc

Audited Results for the year ended 31 December 2012

14 May 2013

Lansdowne Oil & Gas ("Lansdowne" or "the Company") is pleased to announce its audited results, for the year ended 31 December 2012. Lansdowne is an upstream oil and gas company, focused on exploration and appraisal activities in the North Celtic Sea Basin, off the south coast of  Ireland. The Company has targeted the Irish offshore shelf areas close to existing operating infrastructure for exploration, as these provide shallow water (generally less than 100 metres), and relatively low drilling costs and the Directors believe that these factors, combined with favourable fiscal terms, have the potential to deliver high value reserves.

Operational highlights

·      Barryroe appraisal well 48/24-10z successfully tested at a stabilised rate of 3,514 bopd and 2.93 mmscfd

·      Barryroe updated operator estimate of P50 oil in place estimates currently total 1,043 MMBO for the Middle and Basal Wealden reservoirs

·      Barryroe additional potential identified in Lower Wealden and Purbeckian reservoir intervals with operator estimate of P50 oil in place of 778 MMBO

·      Barryroe technical reservoir resource audit by Netherland Sewell & Associates Inc. of the Basal Wealden Sand  

·      Total gross audited on-block 2C recoverable resources of 346 MMBOE (69 MMBOE net to Lansdowne)

·      Barryroe North Licensing Option secured over 521 sq kms

·      Amergin, Midleton & Rosscarbery prospects de-risked substantially by 3D seismic mapping and subsequent inversion. Industry farmout discussions on-going with Macquarie Capital as advisor to the Company

Financial

·      Funds of £10 million (2011: £12.5 million) raised through placing of new shares

·      Cash balances at 31 December 2012 of £5.5 million (2011:£3.2 million)

·      Operating expenses for the year were £1.0 million (2011: £1.0 million)

·      Loss for year after tax £1.1 million (2011: loss £780,000)

·      Loss per share 0.9 pence (2011: loss 0.8 pence)

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Lansdowne Oil and Gas plc

Results for the year ended 31 December 2012

Chairman's Statement

I am pleased to say that 2012 was a year of major progress for Lansdowne Oil & Gas plc ("Lansdowne").

Your Company's business was considerably enhanced by the success of the Barryroe appraisal well in the North Celtic Sea and its subsequent technical and commercial analysis; by the award and addition of the Barryroe North licensing option area; by the completion of 3D seismic inversion work on our other licences leading to further de-risking of key  exploration prospects ahead of farmout and drilling in 2014; and by the strengthening of the balance sheet through a £10 million fundraising (before expenses) in August 2012.

Lansdowne now has a material balanced portfolio of acreage under licence in the relatively underexplored North Celtic Sea basin. This portfolio of oil and gas prospects affords Lansdowne a competitive strategic position in an area currently being positively reassessed by the industry in the light of the Barryroe success. I fully expect Lansdowne to exploit this advantage in the near future.

Financial results

The Group recorded a loss after tax of £1.1 million for the year ended 31 December 2012 compared to a loss after tax of £0.8 million for the year ended 31 December 2011.

Group operating expenses for the year were £1.0 million, compared to £1.0 million in 2011.

Net finance expense for the year was £127,000 (2011 income: £122,000). Interest expense on loans from shareholders amounted to £7,000 (2011: £29,000).

Total equity attributable to the shareholders of the Group has increased to £26.3 million as at 31 December 2012 from £17.8 million as at 31 December 2011.

Cash balances of £5.5 million (2011: £3.2 million) were held at the end of the financial year.

Outlook

Lansdowne's platform for growth is solidly based on a continued focus on exploration and appraisal drilling in the North Celtic Sea. Through the use of modern 3D seismic inversion technology in 2012, Lansdowne's oil and gas prospects have been further de-risked and the Company is confident of forming joint-ventures through farmout with industry partners ahead of an exciting high-impact drilling programme in 2014.

Again, I would like to thank all our shareholders for their continued support.

John Greenall

Chairman

Lansdowne Oil & Gas plc

Consolidated Statement of Financial Position

As at 31 December 2012

Lansdowne Oil & Gas plc

Consolidated Income Statement

For the year ended 31 December 2012

All activities relate to continuing operations.

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2012

Lansdowne Oil & Gas plc

Consolidated Statement of Changes in Equity

For the years ended 31 December 2012

Lansdowne Oil & Gas plc

Consolidated Statement of Cash Flows

For the year ended 31 December 2012

Lansdowne Oil & Gas plc

Notes to the Financial Information

For the year ended 31 December 2012

1.      Basis of Presentation

The consolidated financial statements are presented in Sterling and all values are rounded to the nearest thousand (£'000) except where otherwise indicated.

The Directors have prepared the accounts on the going concern basis which assumes that the Group and Company and its subsidiaries will continue in operational existence for at least twelve months from the date of these accounts as described below.

During the year the Group and Company successfully raised funds of £9.4 million (net) through placing of new ordinary shares to enable the company to fund their share of costs relation to the continued evaluation of the licences held, and meet the company's working capital requirements.

In relation to Barryroe, the Directors are confident that with the successful well test, Providence, as operator will be able to conclude a farm out deal. The Company is participating in this process with Providence and the Directors believe this will provide sufficient resources for the company to continue with the appraisal of the licence.

Macquarie Capital have commenced a farm out process across the Company's other licences, in order to find a partner(s) to participate in the nest stage drilling. A data room is operational with a number of interested parties currently reviewing the information contained therein. The Directors are confident that with the positive results from the seismic surveys they will be able to conclude a farm out deal(s) which will provide sufficient resources for the Company to continue with the appraisal of these licences held.

The Directors believe that the Company has a number of available funding options; the Company primary aim is to conclude the ongoing farm out campaign with a view to attracting industry partners to drill wells, plus the Company also has the option of issuing new equity that would provide the company with sufficient resources to progress the licences in the near term.

The Directors believe that at the date of these financial statements there exists a material uncertainty regarding whether or not the Company will be successful in raising the required future funding to progress the appraisal of the licences held, which may cast significant doubt upon the ability of the Company to continue as a going concern and therefore to realise its assets and discharge its liabilities in the normal course of business. Nevertheless, after making enquiries and considering all the relevant factors, the Directors are of the opinion that with the current level of interest in the farm out process and the option of issuing new equity, the Company will be able to source the necessary funds.

Although this material uncertainty exists, the Directors have a reasonable expectation that the Group and Company will have adequate resources to continue in operational existence for the foreseeable future and have therefore concluded that it is appropriate to adopt the going concern basis in preparing these financial statements.

If for any reason the uncertainty described above cannot be successfully resolved, the going concern basis may no longer be appropriate. The financial statements do not include any adjustments that would result if the Group and Company was unable to continue as a going concern.

2.      Segmental Reporting

The Directors believe that the Group has only one reportable operating and geographic segment, which is the exploration for oil and gas reserves in Ireland. All operations are classified as continuing and currently no revenue is generated from the operating segment.

The Chief Executive monitors the operating results of its operating segment separately for the purposes of making decisions and performance assessment. Segment performance is evaluated based on operating profit or loss and is reviewed consistently with operating profit or loss in the consolidated financial statements.

3.      Loss per Ordinary Share

The loss for the year was wholly from continuing operations. 

The calculations were based on the following information.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all dilutive potential ordinary shares.  The Group has two classes of potential ordinary shares; share options and share warrants.  As a loss was recorded for both 2012 and 2011 the issue of new shares would have been antidilutive.

4.         Goodwill and Other Intangible Assets

Oil and gas project expenditures, including geological, geophysical and seismic costs, are accumulated as intangible fixed assets prior to the determination of commercial reserves. At 31 December 2012, intangible fixed assets totalled £24.4 million (2011 £16.4 million), all of which relate to Ireland.

An annual impairment review is carried out in respect of goodwill. The Directors are satisfied that no impairment adjustment is required.

The disposal of £29,375 relates to the write off of expenditure on the Lee licence area as the directors have decided not to renew this licence because it is not considered a viable project.

5.         Borrowings

2009 Loan facilities

In February 2009 the Company entered into a loan agreement with one of its principal shareholders, LC Capital Master Fund Ltd ("LC"), pursuant to which LC agreed to provide Lansdowne with an initial loan facility of up to £500,000. The amount of the facility was subsequently extended, ultimately to a total of £1.6 million, in December 2010.

Interest initially accrued at the rate of LIBOR plus 2 per cent per annum. Interest on amounts drawn under the facility after 13 October 2010 accrued at the rate of LIBOR plus 4 per cent per annum.

Repayment of the facilities was initially due on 12 March 2010 but had subsequently been extended until 31 December 2011. The facility, including all accrued interest was fully discharged in the year ended 31 December 2012

6.      Share capital and premium- Group and Company

On 28 August 2012, the Company raised £10 million before expenses, by the placing for cash of 18,182,000 new ordinary shares of £0.05 each at 55 pence per share.

7.        Reconciliation of loss before income tax to cash used in operations

8.         Accounts

Copies of the annual accounts for the year ended 31 December 2012 will be sent to shareholders shortly and will be available from the Company's office at 6 Northbrook Road, Ranelagh, Dublin 6, Ireland and the Company's website www.lansdowneoilandgas.com.

Notes to Editors

About Lansdowne

Lansdowne Oil & Gas (LOGP.LN) is a North Celtic Sea focussed, oil and gas exploration company quoted on the AIM market and head quartered in Dublin.

Lansdowne holds extensive acreage, with the largest proprietary 3D seismic database in the North Celtic Sea basin, an emerging under-explored province. Lansdowne has a balanced, technically mature portfolio position, covering both highly prospective oil and gas prospects, in three play types with substantial equity stakes and adjacent to existing infrastructure.

In addition to its 20% stake in the transformational Barryroe field, Lansdowne has three drill ready prospects defined on 2011 3D seismic data , with a farm-out data room exercise on-going to identify partners for a three well drilling programme in 2014.

For more information on Lansdowne, please refer to www.lansdowneoilandgas.com