CPT.L Regulatory News (CPT)

For immediate release

3 May 2016

Frontier Resources International plc

('Frontier' or the 'Company')

Final results for the year ended 31 December 2015

The Board of Frontier (AIM:FRI), is pleased to provide shareholders with the final results for the year ended 31 December 2015 (the 'Period').

Chairman's Statement

2015 was without doubt a very challenging year for the Company. Volatility in global financial markets and the steep decline in oil prices made it exceptionally difficult for the Company to progress its farm-out discussions in respect of its then owned portfolio of oil exploration assets in Africa and the Middle East, and particularly Oman or secure new funding for its oil exploration activities. By the end of the year, the Group had been unable to conclude a farm-out. As there was no immediate prospect of a material improvement in market conditions in the oil sector or investor sentiment, the Board concluded that it should pursue alternative options for the future funding and development of the Group, including the disposal of the Group's oil exploration projects and the investment in new projects outside of the oil sector, which culminated in the substantial changes announced and completed after the year end.

In February 2016, the Company completed a direct subscription with existing and new investors which raised £1,425,000 before expenses, to be used to provide working capital for the Company and to support the investment in new projects.

To support this new strategic direction for the Company, there were a number of proposed changes to the Board. On completion of the subscription, I joined the Board as Chairman and Jack Keyes and John O'Donovan both ceased to be directors.

As stated at the time of the subscription, the Board had resolved not to provide any further capital to the Company's oil exploration projects, the future of which the Board intended to consider following completion of the subscription. Following completion of that review and as announced on 3 March 2016, the Company agreed the sale of the entire issued share capital of Frontier Resources Oman Limited ("Frontier Oman") to Jack Keyes, the former chief executive officer of the Company, which was approved by Shareholders on 22 March 2016. The disposal of Frontier Oman, which held the exploration and production sharing agreement between the Government of the Sultanate of Oman and Frontier Oman in respect of block 38, meant that the Company was able to make a clean break from its activities in Oman and enabled the Board to focus on new projects. Following completion of the disposal, the Company now has no further liabilities either to Jack Keyes or to Frontier Oman.

At the same time, given the disposal of the Group's activities in Oman, and the proposed cessation of activities in Zambia and Namibia as described further below, the Company also agreed the sale of the entire issued share capital of Frontier Resources International Inc ("FRII"), to Jack Keyes. FRII had historically provided administrative and technical support for the Group's oil exploration projects and had no licence interests.

The Board also resolved to cease the Group's remaining activities in Namibia and Zambia, and commenced the implementation of the necessary steps to wind-up, as soon as possible, Frontier Resources Namibia Limited, the holder of the expired exploration licence in Namibia and Frontier Zambia Resources Limited, the holder of the exploration licence in Zambia.

Following these disposals, with effect from 23 March 2016, the Company became an AIM Rule 15 cash shell, as a result of which it must make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 (including seeking re-admission as an Investing Company (as defined under the AIM Rules)) within six months, failing which the Exchange will suspend trading in the Ordinary Shares pursuant to AIM Rule 40.

In conclusion, the past year has been a period of challenge and substantial change for Frontier, but the Board believes that the Company now has the funds and opportunity to re-build shareholder value. The Board's strategy is to identify a suitable acquisition or acquisitions in a new sector, which will satisfy the requirements of AIM Rule 15, and we look forward to providing shareholders with a further update in due course.

Adam Reynolds

Chairman

29 April 2016

Enquiries:

A copy of this announcement is available from the Company's website www.friplc.com

STRATEGIC REVIEW

Financial performance

During the year, the oil industry experienced volatility in the global financial markets and a steep decline in oil prices. With no immediate prospect of a material improvement in market conditions in the oil sector or investor sentiment, the board agreed during the year to pursue alternative options for the future funding and development of the Group, including the disposal of the Group's existing oil exploration projects and the investment in new projects outside of the oil sector. In accordance with AIM Rule 15, the Company following the year end ceased to own, control or conduct all, of its existing trading business, activities or assets and has therefore become an AIM Rule 15 cash shell, pursuant to which it must make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 within six months of the disposal of the remaining operating subsidiaries on 22 March 2016.

The Group's loss for the year after taxation was $3,101,000 (2014: $1,225,000). The basic and diluted loss per share was 1.26 cents (2014: 0.92 cents). Losses for the year are due in the main to exceptional costs, asset impairments, of $2,241,000. 2014 losses were lower primarily due to the absence of exceptional costs.

The Group's net liabilities at the end of the year were $137,000 (2014: net assets $2,146,000). Net cash used in operations was $494,000 (2014: $454,000) for the year. Cash invested in exploration was $91,000 (2014: $836,000) for the year.

During 2015, the Company raised $470,000 ($1,141,000) by private placement and subscriptions net of costs. Note 20 to the financial statements provides further details.

At the year end the Group had cash balances of $26,000 (2014: $165,000).

Operational performance

Following the year end the Company has sold or abandoned its remaining oil explorations projects.

Oman

As at 31 December 2015, the subsidiary company, Frontier Resources Oman Limited, was held for sale.

Namibia

Following the year end the Company abandoned its operation in Namibia. The subsidiary company, Frontier Resources Nambia Limited, ceased trading on 11 March 2016.

Zambia

In March 2015 the initial four-year exploration licence, which was granted on 25 March 2011 and held by the Company's wholly-owned subsidiary company, Frontier Resources Zambia Limited, expired. Following the year end, Frontier Resources Zambia Limited subsequently decided not to renew the licence for another three years and ceased trading on 11 March 2016.

Principal risks and uncertainties

Principal risks and uncertainties are described below:

Going concern

The accounts have been prepared on a going concern basis. The Group made a loss of $3,101,000 during the year ended 31 December 2015. At the year end the Group had cash balances of $26,000 and net liabilities of $137,000.

As the directors believed no future funding was likely to be available for the Group's early stage oil and gas exploration projects, the directors agreed to pursue an alternative strategy for the Company and either dispose (if possible) or abandon its oil and gas projects. As at 31st December 2015, the Company impaired all oil and gas exploration assets held.

Following the year end, the Company completed the disposal of its Oman project and abandoned its Zambia and Namibia projects. As a result, the Group no longer has any operating activities and has become a cash shell under the AIM Rules. The Group has prepared cash flow projections reflecting the requirements of the Group as a cash shell. The current cash balances will provide sufficient working capital to fund the Group's existing needs for the next 12 months prior to the Company making any further investments or acquisitions. The operations of the Group are currently being financed from funds which the Company raises from private and public placing of its shares. As the Group has no operating business, it is reliant on acquiring a new target business.

In order for the Company to make an acquisition or acquisitions of a new target business which constitutes a reverse takeover as required by the AIM Rules in order to maintain the admission of the Company's shares to trading on AIM, the Company will need to raise additional funds in due course. After making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that such funding would be available and that the Group would have sufficient cash to fund any planned new strategic activities and to continue its operations for the foreseeable future, and at least for one year from the date of approval of these financial statements.

The financial statements have, therefore, been prepared on the going concern basis. The financial statements do not contain any adjustments relating to the recoverability and classification of recorded assets that might be necessary should the Company and Group not be able to continue as a going concern.

New projects

The Company is seeking to acquire a target company for a reverse takeover and is confident it will meet the requirements under AIM rule 14 in the coming year.

Risks

The risk to the Company is in finding the right target business to acquire. The Company is an AIM Rule 15 cash shell, pursuant to which it must make an acquisition or acquisitions which constitute a reverse takeover under AIM Rule 14 (including seeking re-admission as an Investing Company (as defined under the AIM Rules)) on or before 23 September 2016, failing which the Exchange will suspend trading in the Ordinary Shares pursuant to AIM Rule 40.

Key performance indicators

At this stage in the Group's development, the key performance indicators that the directors monitor on a regular basis are management of liquid resources (cash flows and bank balances) and also general administrative expenses, which are tightly controlled.

The share price movement during the period 1 January 2015 to 31 December 2015 ranged from a high of 0.95p to a low of 0.08p. The share price at close on 31 December 2015 was 0.1p.

Future outlook

As at the date of approval of the Financial Statements to 31 December 2015, in accordance with AIM Rule 15, the Company ceased to own, control or conduct all, of its existing trading business, activities or assets and has become an AIM Rule 15 cash shell, pursuant to which it must make an acquisition or acquisitions which constitutes a reverse takeover under AIM Rule 14 within six months.

Events after the reporting period are described in Note 27 to the financial statements.

On behalf of the Board

Barbara Spurrier

Chief Financial Officer

29 April 2016

Independent auditor's report to the members of Frontier Resources International Plc

We have audited the Group and Parent Company financial statements of Frontier Resources International plc for the year ended 31 December 2015 (the "financial statements"), which comprise the Consolidated Statement of Comprehensive Income, the Consolidated and Parent Company Statements of Financial Position, the Consolidated and Parent Company Statements of Changes in Equity, the Consolidated and Parent Company Statements of Cash Flows, together with the related notes. The financial reporting framework that has been applied in their preparation is applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union and, as regards the Parent Company financial statements, as applied in accordance with the provisions of the Companies Act 2006.

This report is made solely to the Company's members, as a body, in accordance with part 3 of Chapter 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Respective responsibilities of directors and auditors

As explained more fully under 'Statement of Directors' Responsibilities' on page 11 the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view of the Group's affairs.

Our responsibility is to audit the financial statements in accordance with relevant law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board's (APB) Ethical Standards for auditors.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's website at www.frc.org.uk/auditscopeukprivate

Opinion on financial statements

In our opinion:

- the financial statements give a true and fair view of the state of the Group's and the Parent Company's affairs as at 31 December 2015 and of the Group's loss for the year then ended;

- the Group financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union;

- the Parent Company financial statements have been properly prepared in accordance with International Financial Reporting Standards as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

- the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

Opinion on other matter prescribed by the Companies Act 2006

In our opinion the information given in the Strategic and Directors' Reports for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our opinion:

- adequate accounting records have not been kept by the Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

- the Parent Company financial statements are not in agreement with the accounting records and returns; or

- certain disclosures of directors' remuneration specified by law are not made; or

- we have not received all the information and explanations we require for our audit.

Daniel Huston (Senior Statutory Auditor)

For and on behalf of UHY Hacker Young

Chartered Accountants

Statutory Auditor

Quadrant House

4 Thomas More Square

London E1W 1YW

29 April 2016

Consolidated statement of comprehensive income

The results reflected above relate to continuing and discontinued activities.

The loss for the current and prior years and the total comprehensive loss for the current and prior years are wholly attributable to equity holders of the Parent Company, Frontier Resources International plc.

Consolidated statement of financial position

These financial statements were approved and authorised for issue by the board of directors on 29 April 2016 and were signed on its behalf by:

Barbara Spurrier

Chief Financial Officer

Company Registration Number: 06573154

Company statement of financial position

These financial statements were approved and authorised for issue by the board of directors on 29 April 2016 and were signed on its behalf by:

Barbara Spurrier

Chief Financial Officer

Company Registration Number: 06573154

Consolidated statement of changes in equity

The following describes the nature and purpose of each reserve within owners' equity:

Share capital Amount subscribed for share capital at nominal value

Share premium Amount subscribed for share capital in excess of nominal value

Retained losses Cumulative net losses recognised in the financial statements

Share-based payment reserve Amounts recognised for the fair value of share options and warrants granted

Foreign exchange reserve Exchange differences on translating foreign operations

Company statement of changes in equity

The following describes the nature and purpose of each reserve within owners' equity:

Share capital Amount subscribed for share capital at nominal value

Share premium Amount subscribed for share capital in excess of nominal value

Retained losses Cumulative net losses recognised in the financial statements

Share-based payment reserve Amounts recognised for the fair value of share options and warrants granted

Consolidated statement of cash flows

Company statement of cash flows

Notes to the financial statements

1 General information

Frontier Resources International Plc is incorporated in the United Kingdom. The address of the registered office is given in the officers and advisors section. The nature of the Company's operations and its principal activities are set out in the Directors' report.

The functional currency of the Company is Sterling (£). The presentational currency of the Company is the US Dollar ($) because that is the main currency of the industry in which the Group operates (being the oil and gas industry).

2 Adoption of new and revised International Financial Reporting Standards

The following standards, amendments and interpretations are not yet effective and have not been early adopted by the Group. The adoption of these standards, amendments and interpretations is not expected to have a material impact on the Group's financial statements in the periods of initial application.

3 Significant accounting policies

Basis of preparation

These financial statements of the Group and Company are prepared on a going concern basis, under the historical cost convention and in accordance with International Financial Reporting Standards (IFRS) and IFRIC interpretations issued by the International Accounting Standards Board (IASB) and adopted by the European Union, including IFRS 6 'Exploration for and Evaluation of Mineral Resources' and in accordance with the Companies Act 2006. The Parent Company's financial statements have also been prepared in accordance with IFRS as adopted by the European Union and the Companies Act 2006.

The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

Basis of consolidation

Where the Company has the power, either directly or indirectly, to govern the financial and operating policies of another entity or business so as to obtain benefits from its activities, it is classified as a subsidiary. The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Intercompany transactions and balances between Group companies are therefore eliminated in full.

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated statement of financial position, the acquirees's identifiable assets, liabilities, and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained.

Parent Company income statement

The Company has taken advantage of Section 408 of the Companies Act 2006 in not presenting its own income statement. The Company's loss for the year was $3,244,000 (2014: $1,548,000) and is included within the consolidated statement of comprehensive income.

Going concern

The accounts have been prepared on a going concern basis. The Group made a loss of $3,101,000 during the year ended 31 December 2015 and continues to be loss making. At the year end the Group had cash balances of $26,000 and net liabilities of $137,000.

As the directors believed no future funding was likely to be available for the Group's early stage oil and gas exploration projects, the directors agreed to pursue an alternative strategy for the Company and either dispose (if possible) or abandon its oil and gas projects. As at 31 December 2015, the Company impaired all oil and gas exploration assets held.

Following the year end, the Company completed the disposal of its Oman project and abandoned its Zambia and Namibia projects. As a result, the Group no longer has any operating activities and has become a cash shell under the AIM Rules. The Group has prepared cash flow projections reflecting the requirements of the Group as a cash shell. The current cash balances will provide sufficient working capital to fund the Group's existing needs for the next 12 months prior to the Company making any further investments or acquisitions. The operations of the Group are currently being financed from funds which the Company raises from private and public placing of its shares. As the Group has no operating business, it is reliant on acquiring a new target business.

In order for the Company to make an acquisition or acquisitions of a new target business which constitutes a reverse takeover as required by the AIM Rules in order to maintain the admission of the Company's shares to trading on AIM, the Company will need to raise additional funds in due course. After making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that such funding would be available and that the Group would have sufficient cash to fund any planned new strategic activities and to continue its operations for the foreseeable future, and at least for one year from the date of approval of these financial statements.

The financial statements have, therefore, been prepared on the going concern basis. The financial statements do not contain any adjustments relating to the recoverability and classification of recorded assets that might be necessary should the Company and Group not be able to continue as a going concern.

Investments in subsidiaries

In its separate financial statements, the Company's investment in its subsidiaries has been fully impaired.

Taxation

Income tax expense represents the sum of the current tax and deferred tax charge for the year. The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the statement of comprehensive income because it excludes items of income or expense that are taxable or deductible in other periods and it further excludes items that are never taxable or deductible. The Group's and Company's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the year end.

Deferred income taxes are provided in full, using the liability method, for all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income taxes are determined using tax rates that have been enacted or substantially enacted and are expected to apply when the related deferred income tax asset is realised or the related deferred income tax liability is settled.

The principal temporary differences arise from depreciation or amortisation charged on assets and tax losses carried forward. Deferred tax assets relating to the carry forward of unused tax losses are recognised to the extent that it is probable that future taxable profit will be available against which the unused tax losses can be utilised.

Foreign currencies

Functional and presentational currency

Items included in the financial statements are measured using the currency of the primary economic environment in which the Company operates ("the functional currency") which is considered by the directors to be the Pounds Sterling (£). The financial statements have been presented in US Dollars. The effective exchange rate at 31 December 2015 was £1 =US$1.48 (2014: £1 = US$1.55).

Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

Transactions in the accounts of individual Group companies are recorded at the rate of exchange ruling on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rates ruling at the year end. All differences are taken to the statement of comprehensive income.

Leases

The determination of whether an arrangement is, or contains, a lease is based on the substance of the arrangement, which involves assessing whether the fulfilment of the arrangement depends on the use of a specific asset or assets or the arrangement conveys a right to use the asset.

The classification of leases as financing or operating leases requires the Company to determine, based on an evaluation of the terms and conditions, whether it retains or acquires the significant risks and rewards or ownership of these assets and accordingly whether the lease requires an asset and liability to be recognized on the balance sheet.

The Company leases assets, all which have been determined to be operating leases. Operating lease payments are recognized as an expense in the income statement on a straight-line basis over the lease term. Financing charges are reflected in the income statement.

Rent paid on operating leases is charged to the statement of comprehensive income on a straight line basis over the term of the lease.

Borrowing costs

Borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset. All other borrowing costs are recognised in profit or loss in the period in which they are incurred.

Financial instruments

Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Loans and receivables

Trade receivables, loans, and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as 'loans and receivables'. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

Cash and cash equivalents

Cash and cash equivalents comprise balances on bank accounts, cash in transit and cash floats held in the business. Interest bearing bank loans are recorded at the proceeds received, net of issue costs. Finance charges are accounted for on an accruals basis and charged to the statement of comprehensive income when payable.

Impairment of financial assets

Financial assets are assessed for indicators of impairment at each year end. Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected that can be reliably estimated.

Payables, financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into.

Equity instruments

An equity instrument is any instrument with a residual interest in the assets of the Company after deducting all of its liabilities. Equity instruments (ordinary shares) are recorded at the proceeds received, net of direct issue costs.

Payables

Payables are recognised at fair values and classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the statement of financial position date.

Financial liabilities

Financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method.

De-recognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged, cancelled or they expire.

Property, plant and equipment

Equipment and proven oil and gas assets are stated at cost less accumulated depreciation and accumulated impairment. Equipment is depreciated on a straight line basis over its expected useful life. The expected useful lives of equipment are reviewed on an annual basis and, if necessary, changes in useful lives are accounted for prospectively.

Proven oil and gas assets are accounted for using the successful efforts method. For evaluated properties with economic values exceeding the exploration and development costs incurred after the grant of the licence, these costs, which may include geological and geophysical costs, costs of drilling exploration and development wells, costs of field production facilities, including commissioning and infrastructure costs, are capitalised. These expenditures are combined into asset groups reflecting the anticipated useful lives of individual assets and subsequently are depreciated over the expected economic lives of those asset groups. The expenditure within the asset group with a useful life equal to the producing life of the field is depleted on a unit-of-production basis.

Impairment reviews of property, plant and equipment

The carrying amounts of the Group's and Company's assets are reviewed at each year end and, if there is any indication that an asset may be impaired, its recoverable amount is estimated. The recoverable amount is the higher of its net selling price and its value in use for example, the discounted future cash flows from the estimated recoverable oil and gas reserves for proven oil and gas assets. Any impairment loss arising from the review is charged to the statement of comprehensive income under costs of sale whenever the carrying amount of the asset exceeds its recoverable amount.

A previously recognised impaired loss is reversed only if there has been a change in the estimates used to determine the asset's recoverable amount since the last impairment loss was recognised. If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the consolidated statement of comprehensive income and the depreciation charge adjusted prospectively.

Exploration and evaluation assets

Costs associated with exploration and evaluation are capitalised on a project-by-project basis, where a project may be a collection of geographically and geologically similar licenses. Costs capitalised include appropriate technical and directly attributable administrative expenses but not general overheads. Costs capitalised are reviewed at each reporting date to confirm that there is no indication of impairment and that drilling is still underway or is planned. If no future exploration or development activity is planned in the licence area the exploration and evaluation assets are impaired.

Impairment reviews of exploration and evaluation assets

The capitalised expenditures for each project are reviewed at each reporting date to confirm that there is no indication that the carrying amount exceeds the recoverable amount. This review included confirming that exploration drilling is still underway or firmly planned or that it has been determined, or work is under way to determine, that the discovery is economically viable based on a range of technical and commercial considerations and sufficient progress is being made on establishing development plans and timing. If no future activity is planned, the remaining balance of capitalised expenditures for the project is written off as impairment in the consolidated statement of comprehensive income. When production commences the accumulated costs for the project are transferred from intangible exploration and evaluation assets to Proven oil and gas assets in property, plant & equipment.

Assets and disposal groups held for sale

Assets and disposal groups are classified as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition is regarded as met only when the sale is highly probable and the asset (or disposal groups) is available for immediate sale in its present condition.

Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Assets and disposal groups classified as held for sale are measured at the lower of the assets' previous carrying amount and fair value less costs to sell.

Ordinary shares

Ordinary shares are classified as equity. Costs directly attributable to the increase of new shares or options are shown in equity as a deduction from the proceeds.

Share-based payments

The Company made share-based payments to certain directors and advisers by way of issue of share options. The fair value of these payments is calculated either using the Black Scholes option pricing model or by reference to the fair value of any fees or remuneration settled by way of granting of options. The expense is recognised on a straight line basis over the period from the date of award to the date of vesting, based on the Company's best estimate of shares that will eventually vest.

Significant accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with International Financial Reporting Standards requires the use of accounting judgements, estimates and assumptions that affect the reported amounts of assets and liabilities and the reported amounts of income and expenses during the reporting period.

There are no matters requiring significant judgement (apart from those involving estimations, which are dealt with below) other than the application of the going concern basis as disclosed separately.

Although estimates are based on management's best knowledge of current events and actions, the resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a risk of causing material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below.

Carrying value of property, plant and equipment (including oil and gas assets)

Depletion and depreciation for oil assets is calculated on a unit-of-production basis, using the ratio of oil production in the period to the estimated quantities of proved and probable reserves at the end of the period plus production in the period. Oil and gas assets are tested periodically for impairment to determine whether the net book value of capitalised costs relating to the cash generating unit exceed the associated estimated future discounted cash flows of the related commercial oil and gas reserves. If an impairment is identified, the depletion is charged through the statement of comprehensive income in the period incurred.

Carrying value of investment in subsidiaries

In the separate financial statements of the Company, the investment in subsidiaries is periodically reviewed for impairment by management. These reviews require the use of judgements and estimates of whether there are any indications that the carrying values are not recoverable.

4 Operating segments

In the opinion of the directors, the operations of the Group during the year to December 2014, comprise one operating segment, being oil and gas exploration. The Group has exploration and evaluation licenses in Oman, Namibia and Zambia. During the year to December 2015 the activity of this operating segment has been discontinued (see note 5 for more details). These financial statements reflect all the activities of this single operating segment. Segments are determined by reference to the Group's internal organisation and reporting to the directors which bases its structure on products and geographical areas.

Group exploration assets for continuing and discontinued operations are distributed as follows:

5 Discontinued operations and held for sale

During the year the Directors have committed to dispose or has suspended its oil and exploration operations in Frontier Inc, Frontier Oman, Frontier Namibia and Frontier Zambia.

1. Frontier Inc and Frontier Oman - its assets and liabilities have been classified as held for sale under IFRS 5 and its results for the year are classified as discontinued operations.

2. Frontier Namibia and Frontier Zambia operations were suspended during the year due to lack of funding. However, both did not meet the criteria to be classified as held for sale under IFRS 5 but its results for the year are classified as discontinued operations.

The results for these discontinued operations below excluded any intercompany balances written off or forgiven in the individual entities. These were eliminated on consolidation of the group results.

The major classes of assets and liabilities of these discontinued operations classified as held for sale in the consolidated statement of financial position at 31 December 2015 are as follows:

The consolidated statement of cash flows includes the following amounts relating to discontinued operations for the year ended 31 December 2015: 

6 Operating loss

The Group's operating loss has been arrived at after charging:

7 Employees

The average number of employees (including directors) in the Group and their remuneration was as follows:

Directors' remuneration comprises:

1 The amount disclosed relates to salaries paid during the year 2015 and excludes reversal of unpaid accrued salaries.

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Group. These are considered to be the directors of the Company and so key management remuneration is as disclosed above.

The Group does not operate a pension plan for directors or employees.

8 Directors' share options

None of the share option grants have ever been exercised. Details of outstanding share options as at 31 December 2015 are as follows:

9 Share options and share-based payments

The Company grants share options at its discretion to directors, management and advisors. Share options are granted with vesting periods of between one and three years from the date of grant. Should the options remain unexercised after a period of ten years from the date of grant, the options will expire. Options are exercisable at a price equal to the Company's quoted market price on the date of grant.

Details for the share options granted, exercised, lapsed and outstanding at the year-end are as follows:

* WEAP is Weighted Average Exercise Price

Fair value of share options

Options are priced using an option pricing model including the quoted market value of the share price and assumptions for share price volatility and dividends. Both remained constant from the date of listing in January 2009 to 31 December 2015. Expected volatility for grants is based on the Frontier Resources International plc share price over the 12 month period to date of grant.

No options nor warrants were granted in 2015

It is assumed that no options will be exercised.

Unexercised warrants

Neil Herbert's Self Invested Pension Plan was issued share warrants in November 2014, on a one for one basis for the subscription of ordinary shares.

10 Finance costs

11 Taxation

Corporation tax is calculated at above stated rates on the estimated taxable profit for the year. The Group's effective tax rate differs from the theoretical amount that would arise using the UK domestic corporation tax rate applicable to losses of the consolidated companies as follows:

The Group has incurred tax losses for the year and therefore a corporation tax charge does not arise.

The Group has unrelieved tax losses that that have not been recognised as a deferred tax as the recovery of this benefit is dependent on the future profitability of Group entities, the timing of which cannot be reasonably foreseen (see note 19).

12 Loss per share

The basic loss per share has been calculated using the loss for the year and the weighted average number of ordinary shares outstanding during the year, as follows:

The Company has not issued share options in 2015. The diluted loss per share has been kept the same as the basic loss per share as the conversion of share options decreases the basic loss per share, thus being anti-dilutive.

13 Investments in subsidiary undertakings

During 2014 and up to the 2015 year end, the Company operated each of its regional oil and gas assets through special purpose 100% owned subsidiary undertakings that are funded by equity and intercompany funding arrangements with the Company. These subsidiaries have since the 2015 year end, been either sold or dissolved.

The principal activity of each subsidiary was that of oil and gas exploration. Frontier Resources International Inc, following the disposal of its oil and gas assets in 2012, provides technical and management services.

The subsidiaries are as follows:

The Company's investments in, and loans to, subsidiary undertakings is as follows:

The directors have assessed the carrying value of the Company's investment in its subsidiaries and have impaired its investments in the accounts of the Company in 2015 by $2,724,000 (2014: $343,000). The amounts due from the subsidiaries have no fixed repayment terms but are repaying in more than one year.

14 Non-current assets

a) Property, plant and equipment (PPE) and Exploration and evaluation assets (E&EA)

The amount of capitalised exploration and evaluation expenditure at 31 December 2015 was $nil (2014: $3,012,000) of which $nil (2014: $1,810,000) related to the Group's Oman licence, $nil (2014: $972,000) related to the Group's Namibian licence and $nil (2014: $230,000) related to the Group's Zambian licence. The capitalised EEA relating to Oman licence has been reclassified as held for sale.

The directors have assessed the value of those E&EA assets, and in their opinion, based on a review of the expiry dates of licences, expected available funds and the intention not to continue exploration and evaluation, apart from the E&EA assets held for sale for Oman, the remaining E&EA assets relating to Zambia and Namibia were fully impaired.

b) Provision for decommissioning

The provision for decommissioning represents the present value of the asset retirement obligations associated with the Group's future abandonment of oil and gas properties. The provision for decommissioning is estimated after taking into account of inflation, years to abandonment and an appropriate discount rate. The timing of the economic outflows relating to this provision is uncertain but is not due within one year of the year end.

Actual decommissioning costs will ultimately depend upon future market prices for the decommissioning work required, which will reflect market conditions at the relevant time. Furthermore, the timing of decommissioning is likely to depend on when the fields cease to produce at economically viable rates. This in turn will depend upon future oil and gas prices, which are inherently uncertain. The actual amounts paid for decommissioning may ultimately vary significantly from the provision at the year ends requiring potentially material adjustments to the carrying value of the obligations.

The directors have evaluated the operations to date and concluded a provision is currently not necessary.

15 Trade and other receivables

All amounts are due within three months. No amounts are past due.

16 Trade and other payables

Trade payables and accruals principally comprise amounts outstanding for trade purchases and ongoing costs and are payable within 3 months.

The directors' voluntarily agreed for their outstanding current account to be written off in full as at the 31 December 2015.

Also included in accruals at 31 December 2015 is $nil (2014: $32,000) payable to Jack Keyes for the private health care benefit provided by the Company.

The Directors consider that the carrying amount of trade payables approximates their fair value.

17 Notes to the consolidated statement of cash flows

18 Notes to the company statement of cash flows

19 Deferred tax

The Group has unrelieved tax losses. The potential benefit of these taxation losses calculated at the rates of tax prevailing in the countries in which the losses were incurred has not been recognised as a deferred tax at the year-end dates as the recovery of this benefit is dependent on the future profitability of Group entities.

20 Share capital

Issued share capital

The issued share capital was as follows:

Details of the Group's share options in issue are shown in note 8.

During the year to 31 December 2015 the following share transactions are reflected in the table above:

· An issue of 175,040,030 shares as fully paid up in July 2015 by placing at a price of 0.35p per share. Of this issue, 74,065,031 shares were in lieu of fees, services and settlement of AGR Energy loan.

· An issue of 21,528,521 shares as fully paid up in November 2015 at a price of 0.165p per share t

· On 30 June 2015, 165,430, 505 shares of 1p each were subdivided into 165,430,505 new ordinary of 0.1p and 165,430, 505 shares of 0.9p each were deferred, as part of the Company's capital reorganisation of its shares.

The new ordinary shares have the same rights as those currently accruing to the existing ordinary shares under the existing articles of association, including those relating to voting and entitlement to dividends. These shares carry no right to fixed income.

21 Control

The Company is under the control of its shareholders and not any one party.

22 Related party transactions

Intercompany transactions

Balances between the Company and its subsidiaries, which are a related party, were written off at year end. The amounts written off have been eliminated on consolidation.

Compensation and other payments to key management personnel (including directors)

The remuneration of the directors, who were the key management personnel of the Group in 2015, is set out below in aggregate for each of the categories specified in IAS 24, 'Related Party Disclosures'.

The service fees were paid to CFPro Limited and Cambridge Financial Partners LLP. Barbara Spurrier (appointed a Director of the Company in 2013) has a financial interest in all two companies. Amounts payable at year end and included in trade payables are $31,425.

4,285,714 new shares were issued in July 2015 to CFPro Limited, ( a company owned by Mrs Spurrier) in lieu of fees owed of £15,000, owed by the Company in respect of accounting and administration services provided to the Company.

23 Financial instruments and financial risk factors

The carrying amounts of the financial instruments are set out below. Details of the significant accounting policies including the criteria for recognition, the basis of measurement and the bases for recognition of income and expense for each class of financial asset, financial liability and equity instrument are disclosed in note 3.

Derivatives

The Group and Company have no derivative financial instruments.

Fair values

The directors consider that the carrying amounts of financial assets and financial liabilities approximate their fair values.

Financial risk factors

The Group has exposure to a number of different financial risks arising from its business operations including market risks relating to commodity prices, foreign currency exchange rates, interest rates, credit exposures and liquidity risk.

This note presents information about the Group's exposure to each of the above risks, the Group's objectives, policies and processes for measuring and managing risk, and the Group's management of capital. Further quantitative disclosures are included throughout these consolidated financial statements.

The directors determine, as required, the degree to which it is appropriate to use financial instruments or other hedging contracts or techniques to mitigate risk. The main risk affecting such instruments is foreign currency risk which is discussed below. Throughout the year ending 31 December 2015 and in previous year no trading in financial instruments was undertaken and the Group did not have any derivative or hedging instruments.

Market risk

Market risk is the risk or uncertainty arising from possible market movements and their impact on the performance of the business and the value of the assets, liabilities or expected cash flows. There has been no change to the Group's exposure to market risks or the manner in which these risks are managed and measured.

Foreign currency risk

Foreign currency exchange rates could impact the results of the Group as well as the future cash flows and values of its financial instruments. The Group undertakes transactions denominated in foreign currencies (other than the functional currency of the Company, £ Sterling), with exposure to exchange rate fluctuations.

The carrying amount of the Group's foreign currency denominated monetary assets and monetary liabilities (excluding assets classified as held for sale) were: