CPT.L Regulatory News (CPT)

For immediate release

7 April 2015

Frontier Resources International plc

('Frontier' or the 'Company')

Final Results

for the Year Ended 31 December 2014

The Board of Frontier (AIM:FRI), the onshore oil and gas explorer with assets in Oman, Zambia and Namibia is pleased to provide shareholders with the final results for the year ended 31 December 2014 (the 'Period').

Summary

· Loss for year after taxation of $1,225,000 (2013: $1,833,000).

· $1,141,000 (£683,000) raised by private placement and subscriptions net of costs, during the Period.

· Cash balance of $165,000 (2013: $366,000) at year end.

· In Oman, the re-processing results of legacy 2D seismic were integrated into the overall seismic dataset on Block 38 enabling Frontier to optimize the location of any future seismic surveys or drilling locations. This evaluation has identified two large structural leads not identified by previous operators

· In Namibia, Frontier obtained a two year extension to the licence period so that additional geochemical sampling and seismic acquisition may take place. Frontier also contracted Earthfield Technology of Houston, Texas to perform a depth to magnetic basement study over the Blocks.

· In Zambia, results and interpretation of the gravity profiles combined with the results of source rock analysis on a core sample has greatly improved the Company's understanding of the potential prospectivity of Block 34.

· Appointment of Neil Herbert as a Director and Chairman of the Board.

Commenting on today's results, Chairman, Neil Herbert, said: "Our projects in Oman, Namibia and Zambia have progressed well during the Period, however, as we have previously stated, Frontier needs substantial financial resources to develop our assets. As a result we continue to be actively engaged in seeking industry partners to participate in our projects.

"In Oman, the next exploration phase should be the drilling of a well into the most advanced of the structural leads and we have received approval from the Ministry of Oil and Gas to exchange the Phase 1 work commitment of a 3D seismic survey for an exploration well and 2D seismic survey. In Namibia, results of the study will be used both to guide the locations for the next phase of soil gas sampling, and determine preferential areas for 2D seismic acquisition, and in Zambia, we are now actively planning the next phase of the exploration programme which may include the acquisition of additional gravity and/or magnetic data and soil gas analysis over the entire Block. 

"With this activity in the pipeline we were pleased to announce a conditional share subscription for £1,700,000 (equivalent to $2,533,000) and interim US$200,000 loan facility with AGR Energy Limited No. II, following the Period end".

Enquiries:

About Frontier

Frontier Resources International Plc, which was founded in April 2008, is focused on onshore oil and gas exploration and development in the Middle East and Southern Africa where the Company has technical knowledge and expertise. The Company currently has three exploration projects; in Oman, Zambia and Namibia.

Frontier's immediate objectives are to continue developing its core exploration projects particularly in Oman where the Company's knowledge base is most advanced because of the block's proximity to other producing oil and gas fields and the availability of existing seismic and well data.

The Company is incorporated in the United Kingdom with its registered office in London. It also maintains a technical and commercial office in the United States in Houston, Texas. Additionally, to support its regional operations in Southern Africa and the Middle East, offices are maintained in Oman, Namibia and Zambia.

The Company's shares were admitted to AIM of the London Stock Exchange on 5 July 2013.

The full text of the preliminary unaudited results is set out below and a copy of this announcement is available from the Company's website www.friplc.com

Chairman's Statement

The Company currently has three exploration projects in Oman, Namibia and Zambia.

Oman

Frontier's 100% owned Block 38, located in the Dhofar Region of southwest Oman, covers an area of approximately 17,425 square kilometers. A six year Exploration and Production Sharing Agreement (the Oman ESPA) was signed on 25 November 2012. Frontier is the operator. The Oman EPSA is a six-year agreement comprising two three-year phases. The approval from the Oman Government for the second three-year phase is subject to Frontier's completion of the first three-year of an agreed upon work programme. During 2014 the Group completed reprocessing, interpretation, and mapping of an additional 574 km of existing 2D seismic data on the block. This technical evaluation has led to the identification of several leads.

Namibia

Frontier's Blocks 1717 and 1718, located in the Owambo Basin in northern Namibia, cover an area of approximately 18,933 square kilometres. The Namibia Licence is a two year exploration licence that was granted on 20 January 2012 and extended in January 2014 for an additional two years to end January 2016 which allows the Group to undertake additional geochemical analysis and to acquire 2D seismic data over the blocks prior to any drilling programme. Frontier is the operator with a 90% working interest.

Zambia

Frontier's Block 34 located in the Kafue Trough in southwestern Zambia, covers an area of approximately 6,427 square kilometers. A four year exploration licence was granted on 25 March 2011. Frontier is the operator with a 100% working interest while Metprosol, a local Zambian company, has a 10% carried interest in the licence. On 8 January 2015 the Company announced that it had filed for an extension to the exploration licence in Zambia. The Zambia licence has work programme commitments of US$500,000 for the initial period to 24 March 2015.

While the Group has since Admission to AIM in 2013 progressed its work programmes in Oman, Zambia and Namibia, as previously reported, Frontier Group needs substantial financial resources to develop its assets.

We have therefore been actively engaged in seeking industry partners to participate in our projects. As part of this farm-out process, the Company established online data-rooms and industry presentations by the Company's technical staff have been ongoing. While there has been has been a good response to date from potentially interested parties, discussions are continuing and no farm-out has yet been completed. The Board believes that it is taking all the necessary steps to progress a farm-out opportunities, but there can be no guarantee or certainty if or when a farm-out will be completed. 

In addition to progressing the farm-out discussions, the Company raised £600,000 in June 2014 and a further £125,000 in November 2014 under a private placing of Ordinary Shares to provide additional working capital for the Company to progress these farm-out discussions (and enable some additional technical analysis in Oman in the second half of 2014). In November 2014, the Group also issued 2,875,000 shares to advisors and Non Executive Director in lieu of fees at 1p.

On 17 March 2015, we were also pleased to announce that the Company had entered into a conditional subscription agreement with AGR Energy Limited No. II pursuant to which the Company has agreed to issue 170,000,000 new ordinary shares of 1p each to AGR Energy at a subscription price of 1p per new share and to grant AGR Energy 53,250,000 new warrants to subscribe for new Ordinary Shares at any time in the next five years for new Ordinary Shares at the Subscription Price. The subscription agreement is conditional, inter alia, on the approval of the independent shareholders of the Company, on a poll at a general meeting of the waiver of any obligations of AGR Energy No. II to make a general offer to shareholders pursuant to Rule 9 of the City Code on Takeovers and Mergers. The gross proceeds immediately on completion of the subscription will amount to £1,700,000 (equivalent to $2,533,000) and will be used to provide funding for the further development and evaluation of the Company's exploration projects in Oman, Namibia and Zambia and for general working capital for the Company during the course of this year. AGR Energy No. II also provided an interim secured short term loan facility of US$200,000 to the Company to provide additional working capital prior to completion of the subscription.

AGR Energy No. II, backed by the Assaubayev family, brings significant oil and gas expertise and experience to Frontier and we look forward to working together as we progress with our existing projects in Oman and southern Africa, and as we evaluate new opportunities during 2015 and beyond.

Further details on going concern are set out in the Directors' report and note 3 to the financial statements and the auditors' report includes an 'emphasis of matter' in connection with the Group's current going concern position.

The Board and I would also like to thank Ric Piper, who stepped down as a Non-Executive Chairman in November 2014, for his valuable contribution to the Company.

On behalf of the Board, I thank our shareholders and our employees for their continued support.

Neil Herbert

Chairman

2 April 2015

STRATEGIC REVIEW

Financial performance

Frontier is an exploration company with exploration acreage in Oman, Namibia and Zambia. The Company is focused on Southern Africa and the Middle East where it has technical knowledge and expertise.

The Group's loss for the year after taxation was $1,225,000 (2013: $1,833,000). The basic and diluted loss per share was 0.92 cents (2013: 1.94 cents). 2014 losses are $608,000 lower primarily due to absence of exceptional costs - 2013 included $300,000 AIM listing costs and $500,000 for settlement of the Equity Swap Agreement with YA Global Master SPV Ltd - as offset by an increase in costs reflecting, mainly, a full year of the exploration manager who was hired in July 2013.

The Group net assets at the end of the year were $2,146,000 (2013: $2,176,000. Net cash used in operations was $454,000 (2013: $1,009,000) for the year. Cash invested in exploration was $836,000 (2013: $1,791,000) for the year.

During 2014, the Company raised $1,141,000 (£683,000) by private placement and subscriptions net of costs. Note 19 to the financial statements provides further details.

At the year end the Group had cash balances of $165,000 (2013:$366,000).

Operational performance

An overview of the Company's oil and gas assets is provided below.

Oman

Frontier's 100% owned Block 38, located in the Dhofar Region of southwest Oman, covers an area of approximately 17,425 square kilometers. A six year Exploration and Production Sharing Agreement (EPSA) was signed on 25 November 2012. Frontier is the operator.

To date the Company has evaluated the available geological, geophysical and potential fields data. Following Admission to AIM, the Company completed the reprocessing of older seismic data. Interpretation of these data is ongoing. This information may be used to either acquire a 3D seismic survey, or drill a well if a suitable structure is identified. The Company will need to raise further funding in due course to implement the next stage of exploration in Oman which would comprise further 3D seismic and / or drilling.

In 2013, the Company selected BGP Inc., the U.S. subsidiary of the China National Petroleum Corporation, as the contractor to utilise its proprietary software package to provide high quality data processing services by re-processing selected 2D seismic data from the vintage seismic data sets on the concession. These data sets were originally acquired by previous operators on the Block that included Phillips Petroleum, BP, Petroleum Development Oman and Sinopec. During 2014, Frontier reprocessed a further 587 km of legacy 2D seismic due to the significant improvements in data quality achieved by BGP.

The results of the re-processing were integrated into the overall seismic dataset on Block 38, enabling the Company to come up with an interpretation that will help guide Frontier to optimise the location of any future seismic surveys or drilling locations. A direct consequence of this evaluation has been the identification of two large structural leads not identified by previous operators. In addition, there is sufficient technical support to demonstrate the extension of the South Oman Salt Basin (SOSB), which is already producing oil, into the south eastern part of Block 38. The few historic wells drilled in this very large block did not penetrate any of the geologic formations considered to comprise each of the new independent leads. As a result it has been concluded that the next exploration phase should be the drilling of a well into the most advanced of the structural leads and the Company has received approval from the Ministry of Oil and Gas to exchange the Phase 1 work commitment of a 3D seismic survey for an exploration well and a 1,000 km 2D seismic survey

Namibia

Frontier's Blocks 1717 and 1817, located in the Owambo Basin in northern Namibia, cover an area of approximately 18,933 square kilometres. A two year exploration licence was granted on 20th January 2012 and extended in January 2014 for an additional two years to end January 2016. Frontier is the operator with a 90% working interest. The National Petroleum Corporation of Namibia ("NAMCOR"), the Namibian National Oil Company, has a 10% carried interest in the licence.

In February 2014, Frontier obtained a two year extension to the licence period so that additional sampling may take place. This new soil gas data will be used to further assist in delineating potential oil-prone areas that will be high-graded for 2D seismic acquisition and the integration of pertinent geologic data.

Frontier also contracted Earthfield Technology of Houston, Texas to perform a depth to magnetic basement study over the Blocks. The dataset used was purchased from the Namibia Ministry of Mines and form part of the ongoing High Resolution Airborne Geophysical Survey Programme that is primarily designed to assist and promote mineral exploration in the country.

Results of the study show clearly the fundamental basin architecture over the Blocks and will be used both to guide the locations for the next phase of soil gas sampling, and determine preferential areas for 2D seismic acquisition.

Zambia

Frontier's Block 34 ("Block 34") located in the Kafue Trough in southwestern Zambia, covers an area of approximately 6,427 square kilometers. A four year exploration licence was granted on 25 March 2011. Frontier is the operator with a 100% working interest while Metprosol, a local Zambian company, has a 10% carried interest in the licence.

The results and interpretation of the gravity profiles acquire in 2013 combined with the results of source rock analysis on a core sample from shallow well GS 61 located on Block 34 has greatly improved the Company's understanding of the potential prospectivity of Block 34. Frontier is now actively planning the next phase of the exploration programme which may include the acquisition of additional gravity and/or magnetic data and soil gas analysis over the entire Block.

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 $1,225,000 during the year ended 31 December 2014 and continues to be loss making. At the year end the Group had cash balances of $165,000 and net assets of $2,146,000.

In common with many companies in the oil and gas exploration and development sector, the Group raises its cash for exploration and development programmes in discrete tranches to finance its work programme commitments.

The operations of the Group are currently being financed from funds which the Company raised from placings of its shares. The Group is not yet revenue generating so is therefore still reliant on the continuing support from its shareholders.

On 17 March 2015 the Group announced the conditional subscription agreement ("Subscription Agreement") with AGR Energy Limited No. II ("AGR Energy") pursuant to which the Company has agreed to issue 170,000,000 new ordinary shares of 1p each ("Ordinary Shares") to AGR Energy ("Subscription Shares") at a subscription price of 1p per new share ("Subscription Price") and to grant AGR Energy 53,250,000 new warrants ("New Warrants") to subscribe for new Ordinary Shares at any time in the next five years for new Ordinary Shares at the Subscription Price (together the "Subscription"). The Group will receive $2,533,000 (£1,700,000) upon completion which will provide sufficient funds to cover the working capital of the Groups operations, excluding the Oman work programme, for at least the next 12 months.

The Oman exploration programme commitment for 2015 (see note 24) will require additional funding through either farm in or further funds being raised through equity.

The current cash balances will not provide enough working capital to fund the Group's exploration activities for the next 12 months from the date of approval of these financial statements. The Company therefore anticipates funding its further exploration activity and general working capital from the proceeds of the intended farm-out of one or more of its interests.

The Group has prepared cash flow projections reflecting the requirements of the Group's operations and exploration plans, the expected funds to be raised and the potential proceeds of any farm-ins during 2015-16. The detailed assessment indicates that the Group should be able to continue to meet its liabilities as they fall due and meet its minimum spend commitments on its licenses for a period of not less than 12 months from the date of the approval of these financial statements.

Whilst the directors are confident that they are taking all the necessary steps to ensure that the funding will be available, there can be no guarantee or certainty that the funds required will become available within the foreseeable future. If future funding was not to become available in an appropriate timescale, the directors would need to consider alternative strategies and an impairment review may be required in respect of the carrying value of the Group's assets.

Material uncertainties therefore exist that may cast doubt on the Group's and Company's ability to continue as a going concern and its ability to meet its commitments and discharge its liabilities in the normal course of business and to continue to develop its license areas.

Nevertheless after making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that funding will be available and that the Group will have sufficient cash to fund its planned 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.

The auditors' report includes an 'emphasis of matter' in connection with the Group's current going concern position.

Reserve estimates

There are numerous uncertainties inherent in estimating reserves and assumptions that, whilst valid at the time of estimation, may change significantly when new information becomes available. Changes in the forecast prices of commodities, exchange rates, production costs or recovery rates may change the economic status of reserves and may, ultimately, result in the reserves being restated. Such changes in reserves could impact on depreciation and amortisation rates, asset carrying values, deferred stripping calculations and provisions for close down, restoration and environmental clean up costs. The Group utilises the expertise of third party consultants to report on its reserves estimates to increase the reliability of its estimations.

Exploration and new projects

The Group may seek to identify new operations through active exploration and acquisition programmes. There is no guarantee, however, that such expenditure will be recouped or that existing oil/condensate and gas reserves will be replaced. Failure to do so could have a material and adverse impact on the Group's financial results and prospects.

Exploration risks

Exploration for oil and gas is speculative and involves significant degrees of risks. Risks that prospect areas will be acquired, that they will lead to the discovery of oil or gas and financial and other resources will be secured to exploit the opportunities are uncertain.

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 Group's key non-financial performance indicators are specific to exploration and include: the probability of geological success, the probability of commerciality or completion and the probability of economic success. The Group monitors its own and contractor's activities to avoid any health, safety and environmental incidents.

The share price movement during the period 1 January 2014 to 31 December 2014 ranged from a high of 4.00p to a low of 0.75p. The share price at close on 31 December 2014 was 0.95p.

Future outlook

The Group is continuing its work programmes in Oman, Zambia and Namibia. Since the year end the Group has continued discussions with industry partners with the intention of farming out an interest in each of Oman, Namibia and Zambia.

Events after the reporting period are described in Note 26 to the financial statements.

Cautionary statement

This Strategic Report contains certain forward looking statements that are subject to usual risk factors and uncertainties associated with the oil and gas exploration business. While the Directors believe the expectations reflected herein to be reasonable in light of the information available up to the time of their approval of this report, the actual outcome may be materially different owing to factors beyond the Group's control or otherwise within the Groups control but, for example, owing to a change of plan or strategy. Accordingly no reliance may be placed on the forward-looking statements.

On behalf of the Board

Michael J Keyes

Chief Executive Officer

2 April 2015

Corporate Governance Statement

It is the Board's policy to support the principle of good corporate governance and the code of best practice as set out in the Financial Reporting Council's UK Governance Code ('the Code') which sets out standards of good practice in relation to board leadership and effectiveness, remuneration, accountability and relations with shareholders. The Company is not required to comply with the Code; however, it is recommended best practice to do so. The Board acknowledge the importance of the Code and to apply the principles outlined in the Code for corporate governance insofar as it is practical and appropriate for the Company's size.

The Group is controlled by a Board currently consisting of two executive director and two non executive directors. There is a clear division of responsibilities between the chairman and the chief executive officer and the Board considers the non-executive director who is chairman to be independent of management.

The directors evaluate the balance of skills, knowledge and experience on the Board when defining the role and capabilities required for new appointments.

The Board is responsible for the Group's corporate strategy, monitoring financial performance, approving capital expenditure, treasury and risk management policies. The Board meets regularly with Board meetings occurring as required (some meetings were conducted by conference call). A schedule is circulated to the directors preceding a Board meeting that consists of an agenda, matters for approval and management accounts. Formal minutes of Board meetings are produced and circulated for comment and formally approved.

Since admission to AIM in July 2013, the Board is supported by a remuneration committee, an audit committee and a nomination committee as suggested by the Code.

The Code requires the Board to review the need for an internal audit function from time to time. The Company does not consider that an internal audit function is appropriate given the current size of the business and structure of its operations.

The Board is responsible for the Group's system of internal control and reviewing its effectiveness. Such a system is designed to manage rather than eliminate risk of failure to achieve business objectives, and can only provide reasonable and not absolute insurance against material misstatement or loss. The system of internal financial control comprises of controls established to provide reasonable assurance of:

i) The safeguarding of assets against unauthorised use or disposal and;

ii) The reliability of financial information used within the business and for publication and the maintenance of proper accounting records.

In addition the key procedures on the internal financial control of the Group are as follows:

i) The Board reviews and approves budgets and monitors performance against those budgets on a monthly basis with any variance being fully investigated and;

ii) The Group has clearly defined reporting and authorisation procedures relating to the key financial areas.

The Annual General Meeting is the principal forum for dialogue with shareholders; the Company also has a dedicated electronic communication line specifically for shareholders' enquiries.

Directors' Report

The directors of Frontier Resources International Plc ("Frontier" or "the Company") are pleased to present their report together with the audited financial statements for the year ended 31 December 2014.

Principal activity

The principal activity of the Group is that of oil and gas exploration.

Results and dividends

The Group's loss for the year after taxation was $1,225,000 (2013: $1,833,000). This results in Group retained losses carried forward of $6,247,000 (2013: $5,098,000).

The directors do not recommend payment of any dividend (2013: nil).

Political and charitable contributions

The Group made no charitable or political contributions during the year (2013: nil).

Financial instruments

Details of the use of financial instruments by the Group are in note 22 to the financial statements.

Subsequent events

On the 17th March the Group announced the conditional subscription agreement with AGR Energy Limited No. II ("AGR Energy") pursuant to which the Company has agreed to issue 170,000,000 new ordinary shares of 1p each to AGR Energy at a subscription price of 1p per new share and to grant AGR Energy 53,250,000 new warrants to subscribe for new Ordinary Shares at any time in the next five years for new Ordinary Shares at the Subscription Price. The Group will receive $2,533,000 (£1,700,000) upon completion which will provide sufficient funds to cover the working capital of the Groups operations, excluding the Oman work programme, for at least the next 12 months.

Capital structure

Details of the authorised and issued share capital, together with details of the movements in the Company's issued share capital during the year are shown in note 19. The Company has one class of ordinary share which carry no right to fixed income. Each share carries the right to one vote at general meetings of the Company.

There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both governed by the general provisions of the Articles of Association and prevailing legislation. The directors are not aware of any agreements between holders of the Company's shares that may result in restrictions on the transfer of securities or on voting rights.

Details of share based payments are set out in Note 8 to the financial statements.

No person has any special rights of control over the Company's share capital and all issued shares are fully paid.

Substantial shareholders

The Company has been notified that as at 11 March 2015 the following interests of 3% or more were held in its Ordinary share capital:

* Beaufort Securities Limited was interested in 1,900,020 Ordinary Shares representing 1.15 per cent. of the Ordinary Share Capital. In addition, non-discretionary private clients of Beaufort Securities Limited were interested in a further 13,514,733 Ordinary Shares representing 8.17 per cent. of the Ordinary Share Capital.

Share option scheme

In order to provide incentive for the management and key employees of the Group the directors have set up a share option scheme. Details of the scheme are set out in note 8.

Information to shareholders - website

The Company maintains a website (www.friplc.com) to facilitate the provision of information to both current and potential investors.

Directors

The directors who held office during the year and subsequently were as follows:

With regard to the appointment and replacement of Directors, the Company is governed by its articles of association, the Companies Act and related legislation. The articles themselves may be amended by special resolution of the shareholders.

Directors' indemnities

The Company has made qualifying third party indemnity provisions for the benefit of its directors which were made during the year and remain in force at the date of this report.

Directors' interests

The directors who held office at 31 December 2014 and 31 December 2013 had the following interests in the ordinary shares of the Company:

Further information on share options held by directors is provided in Note 7 to the Financial Statements. During the year 12,500,000 warrants were issued to Neil Herbert's Self Invested Pension Plan as part of a private placement of shares (see note 8 and 19).

Directors' remuneration

Salary, fees and benefits paid to the Executive and Non-Executive directors who held office in the year ended 31 December 2014 are set out below:

Jack Keyes receives private health cover benefit. At 31 December 2014, an amount of $32,000 (2013: $17,000) has not been paid.

The Directors voluntarily agreed to defer part of their emolument from the date of the AIM admission on 5 July 2013 until 28 February 2015, extended from 1 October 2014 or, if earlier, the date on which the Company raises further significant funding. The part deferred is: CEO 62.5%, other Directors 33.0%. The total amount so deferred at 31 December 2014 is $404,000 (2013: $217,000).

On behalf of the Board

Michael J Keyes

Chief Executive Officer

2 April 2015

Statement of Directors' Responsibilities

The directors are responsible for preparing the financial statements in accordance with the Companies Act 2006 and for being satisfied that the financial statements give a true and fair view. The directors are also responsible for preparing the financial statements in accordance with International Financial Reporting Standards ("IFRSs") as adopted by the European Union.

Company law requires the directors to prepare financial statements for each financial period which give a true and fair view of the state of affairs of the Company and the Group and of the profit or loss of the Company and the Group for that period. In preparing those financial statements, the directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and estimates that are reasonable and prudent;

· state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The directors are responsible for keeping adequate accounting records that show and explain the Company's transactions disclose with reasonable accuracy at any time the financial position of the Company and the Group, and to enable them to ensure that the financial statements comply with the Companies Act 2006.

They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Website publication

The directors are responsible for ensuring the annual report and financial statements are made available on a website. Financial statements are published on the Group's website (www.friplc.com) in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Group's website is the responsibility of the directors. The directors' responsibility also extends to the ongoing integrity of the financial statements contained therein.

Statement of disclosure to the auditors

All of the current directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the Group's auditors for the purposes of their audit and to establish that the auditors are aware of that information. The directors are not aware of any relevant audit information of which the auditors are unaware.

UHY Hacker Young have expressed their willingness to continue in office and a resolution to re-appoint them will be proposed at the annual general meeting.

By order of the Board

Michael J Keyes

Chief Executive Officer

2 April 2015

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 2014 (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 15 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/apb/scope/private.cfm

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 2014 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.

Emphasis of matter - Going concern

In forming our opinion on the financial statements, which is not qualified, we have considered the adequacy of the disclosure made in note 3 to the financial statements concerning the Group's ability to continue as a going concern. The Group incurred a loss of US$1,347,000 during the year ended 31 December 2014 and is still incurring losses. Along with similar sized exploration and mining companies, the Company raises finance for its exploration and appraisal activities in discrete tranches.

As discussed in note 3 the Company will need to raise further funds and/or enter into farm-out arrangements over its exploration license areas in order to meet its budgeted operating and exploration costs for the next 12 months from the date of approval of these financial statements.

These conditions, along with other matters disclosed in note 3 indicate the existence of a material uncertainty which may cast doubt about the Group's and Company's ability to continue as a going concern. The financial statements do not include the adjustments that would result (such as impairment of assets) if the Group and Company were unable to continue as a going concern.

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.

Colin Wright (Senior Statutory Auditor)

For and on behalf of UHY Hacker Young LLP

Chartered Accountants

Statutory Auditor

Quadrant House

4 Thomas More Square

London E1W 1YW

2 April 2015

Consolidated statement of comprehensive income

The results reflected above relate to continuing 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 2 April 2015 and were signed on its behalf by:

Michael J Keyes

Director

Company Registration Number: 06573154

These financial statements were approved and authorised for issue by the board of directors on 2 April 2015 and were signed on its behalf by:

Michael J Keyes

Director

Company Registration Number: 06573154

Consolidated Statement of Changes in Equity

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

Consolidated Statement of Changes in Equity

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

Consolidated statement of cash flows

Company statement of cash flows

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

There were no IFRS standards or IFRIC interpretations adopted for the first time in these financial statements that had a material impact on the Group. The following standards have been adopted for the first time in this financial year.

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 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 $1,548,000 (2012: $1,883,000) 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 $1,225,000 during the year ended 31 December 2014 and continues to be loss making. At the year end the Group had cash balances of $165,000 and net assets of $2,146,000.

In common with many companies in the oil and gas exploration and development sector, the Group raises its cash for exploration and development programmes in discrete tranches to finance its work programme commitments.

The operations of the Group are currently being financed from funds which the Company raised from placings of its shares. The Group is not yet revenue generating so is therefore still reliant on the continuing support from its shareholders. As reported to shareholders at the time of admission to AIM in July 2013, the Group needs substantial financial resources to develop its assets

On 17 March 2015, we were also pleased to announce that the Company had entered into a conditional subscription agreement with AGR Energy Limited No. II pursuant to which the Company has agreed to issue 170,000,000 new ordinary shares of 1p each to AGR Energy at a subscription price of 1p per new share and to grant AGR Energy 53,250,000 new warrants to subscribe for new Ordinary Shares at any time in the next five years for new Ordinary Shares at the Subscription Price. The subscription agreement is conditional, inter alia, on the approval of the independent shareholders of the Company, on a poll at a general meeting of the waiver of any obligations of AGR Energy No. II to make a general offer to shareholders pursuant to Rule 9 of the City Code on Takeovers and Mergers. The gross proceeds immediately on completion of the subscription will amount to $2,533,000 (£1,700,000) and will be used to provide funding for the further development and evaluation of the Company's exploration projects in Oman, Namibia and Zambia and for general working capital for the Company during the course of the next 12 months. AGR Energy No. II also provided an interim secured short term loan facility of US$200,000 to the Company to provide additional working capital prior to completion of the subscription.

The Oman exploration programme commitment for 2015 (see note 24) will require additional funding through either farm in or further funds being raised through equity. The Group has approached industry partners with the intention of a farm-out of its interests in Zambia, Namibia and Oman.

The current cash balances will not provide enough working capital to fund the Group's exploration activities for the next 12 months from the date of approval of these financial statements. The Company therefore anticipates funding its further exploration activity and general working capital from the proceeds of the intended farm-out of one or more of its interests.  

The Group has prepared cash flow projections reflecting the requirements of the Group's operations and exploration plans, the expected funds to be raised and the potential proceeds of any farm-ins during 2015-16. The detailed assessment indicates that the Group should be able to continue to meet its liabilities as they fall due and meet its minimum spend commitments on its licenses for a period of not less than 12 months from the date of the approval of these financial statements.

Whilst the directors are confident that they are taking all the necessary steps to ensure that the funding will be available, there can be no guarantee or certainty that the funds required will become available within the foreseeable future. If future funding was not to become available in an appropriate timescale, the directors would need to consider alternative strategies and an impairment review may be required in respect of the carrying value of the Group's assets.

Material uncertainties therefore exist that may cast doubt on the Group's and Company's ability to continue as a going concern and its ability to meet its commitments and discharge its liabilities in the normal course of business and to continue to develop its license areas.

Nevertheless after making enquiries and considering the uncertainties described above, the directors have a reasonable expectation that funding will be available and that the Group will have sufficient cash to fund its planned 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.

The auditors' report includes an 'emphasis of matter' in connection with the Group's current going concern position.

Investments in subsidiaries

In its separate financial statements, the Company's investment in its subsidiaries is carried at cost less provision for any impairments.

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 2014 was £1 =US$1.55 (2013: £1 = US$1.65).

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.

Revenue recognition

The Company recognizes revenue for petroleum and natural gas assets at the fair value of the consideration received or receivable when the significant risks and rewards of ownership are transferred to the buyer and it can be reliably measured and only at such time as a project becomes commercially viable and development approval is received. Prior to this stage, any production is considered test production and related revenue is capitalized net of applicable costs

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.

Decommissioning costs

Where a material liability for the removal of production facilities and site restoration at the end of the field life exists, a provision for decommissioning is made. The amount recognised is the present value of estimated future expenditure determined in accordance with local conditions and requirements. An asset of an amount equivalent to the provision is also created and depreciated on a unit of production basis. Changes in estimates are recognised prospectively, with corresponding adjustments to the provision and the associated asset.

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.

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 impairments 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 comprise one operating segment, being oil and gas exploration. The Group has exploration and evaluation licenses in Oman, Namibia and Zambia. 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 non-current assets are distributed as follows:

5 Operating loss

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

a. The Equity Swap Agreement was entered into by the Company on 19 June 2013 with YA Global Master SPV Ltd. See note 19 for additional details. The parties agreed to terminate the agreement early on 27 January 2014 and therefore, the difference of $498,000 between the carrying value of the receivable and the settlement amount was expensed in 2013 to the Statement of Comprehensive Income.

b. The $300,000 AIM admission expense in 2013 covers fees for advisors and direct costs such as preparation and circulation of the listing related documents.

6 Employees

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

Directors' remuneration comprises:

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.

7 Directors' share options

None of the share option grants have ever been exercised. Details of outstanding share options as at 31 December 2014 are as follows:

8 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 2013. 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 were granted in 2014. Warrants were granted in the year, see below.

It is assumed that all options will be exercised.

Unexercised warrants

Neil Herbert's Self Invested Pension Plan was issued share warrants on a one for one basis for the subscription of ordinary shares (see note 19).

9 Finance costs

10 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 18).

11 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 issued share options in 2013. None were issued in 2014. 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.

12 Investments in subsidiary undertakings

The Company operates 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.

The principal activity of each subsidiary is 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 the investment in Frontier Resources International Inc. in the accounts of the Company in 2014 by $343,000 (2013: $616,000). The amounts due from the subsidiaries have no fixed repayment terms but are repaying in more than one year.

13 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 2014 was $3,012,000 (2013: 2,176,000) of which $1,810,000 (2013: $1,163,000) related to the Group's Oman licence, $972,000 (2013: $812,000) related to the Group's Namibian licence and $230,000 (2013: $201,000) related to the Group's Zambian licence.

The directors have assessed the value of those intangible assets, and in their opinion, based on a review of the expiry dates of licences, expected available funds and the intention to continue exploration and evaluation, no impairment is necessary.

The Namibia licence that was granted for an initial two year period from 20 January 2012 for blocks, 1717 and 1817 in the Owambo Basin covering approximately 18,000 square kilometres has been extended in January 2014, by the Minister of Mines and Energy in Namibia, for a further two years to 20 January 2016.

The Zambia licence was awarded, jointly with local partner, Metprosol, in March 2011 for a four year period and covers Block 34 in the Kafue Trough 150 kilometres southwest of the capital Lusaka for an area of approximately 5,888 square kilometres. Frontier has applied for an extension of the licence for a further two years to March 2017. Frontier is the operator with a 90% working interest while Metprosol, a local Zambian company, has a 10% carried interest in the licence.

The Exploration and Production Sharing Agreement (EPSA) was signed In October 2012 with the Government of the Sultanate of Oman for a 100% interest in Block 38. The EPSA is a six year agreement comprising two three year phases. The Block covers an area of 17,425 square kilometers and is located in the Dhofar region of southwest Oman in the southern part of the Rub Al Khali Basin. The Block has only three wells drilled and is considered prospective for oil and gas given the production from the nearby Block 6 which is operated by Petroleum Development Oman.

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.

14 Trade and other receivables

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

On 19 June 2013 the Company entered into an Equity Swap Agreement with YA Global Master SPV Ltd. The terms of the Equity Swap Agreement is disclosed is note 19. As at 31 December 2013, the Company in recognition of the parties' agreement to terminate this arrangement early on 27 January 2014, adjusted the carrying amount of the receivable to the settlement amount and has charged to the Statement of Comprehensive Income an impairment of $497,795 as disclosed in note 5.

15 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 Director's current account relates to Jack Keyes and represents in part the distribution of net current assets of FRII immediately prior to its acquisition. As part of the share purchase of FRII, the Company agreed to collect the net current assets prior to acquisition on behalf of the vendor, Jack Keyes, a director of the Company. The director's current account is non-interest bearing and, although repayable on demand, the director has confirmed the amount will not be called before 28 February 2015.

Included in Accruals at 31 December 2014 is an amount of $404,000 (2013: $217,000) representing the deferral of Directors remuneration. The Directors voluntarily agreed to defer part of their emolument from the date of the AIM admission on 5 July 2013 until 28 February 2015 extended from 1 October 2014 or, if earlier, the date on which the Company raises further significant funding. The part deferred is: CEO 62.5%, other Directors 33.0%.

Also included in Accruals at 31 December 2014 is $32,000 (2013: $17,000) 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.

16 Notes to the consolidated statement of cash flows

17 Notes to the company statement of cash flows

18 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, the timing of which cannot be reasonably foreseen.

Tax losses arising in the USA may be carried forward for 20 years and those arising in rest of world with no time limit. The amount of cumulative tax losses and the potential deferred tax asset are summarised below.