Amended Annual and Transition Report (foreign Private Issuer) (20-f/a)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F/A

(Amendment No. 1)

o	REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) or 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2014

o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 000-30087

ADIRA ENERGY LTD.

(Exact name of Registrant specified in its charter)

CANADA
(Jurisdiction of incorporation or organization)

120 Adelaide Street West, Suite 800
Toronto, Ontario
Canada M5H 1T1
(Address of principal executive offices)

Contact Person: Gadi Levin
Address: 120 Adelaide Street West, Suite 800
Toronto, Ontario M5H 1T1
Email: glevin@adiraenergy.com
Telephone: (416) 250-1955, Facsimile: (416) 250-6330
(Name, Telephone, Email and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of Each Class	Name of each exchange on which registered
None	Not applicable

Securities registered or to be registered pursuant to Section 12(g) of the Act:

COMMON SHARES
(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

The number of outstanding shares of the Company’s only class of capital or common stock as at December 31, 2014 was 12,292,022 common shares.

Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes o No x

If this is an annual report or a transition report, indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

Yes o No x

Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No o

Indicate by check mark whether Registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes o No o

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (check one):

Large accelerated filer o Accelerated filer o Non-accelerated filer x

Indicate by check mark which basis of accounting the Registrant has used to prepare the financial statements included in this filing:

U.S. GAAP

International Financial Reporting Standards as issued by the International Accounting Standards Board x

Other

If “other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow:

Item 17 o Item 18 x

If this is an annual report, indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes o No x

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by checkmark whether the Registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

YES o NO o

TABLE OF CONTENTS

EXPLANATORY NOTE

This Annual Report on Form 20-F/A (“Amended Form 20-F”) is being filed as Amendment No. 1 to our Annual Report on Form 20-F for the year ended December 14, 2014, which was filed with the Securities and Exchange Commission on April 30, 2015 (the “Original Filing”). This Amended Form 20-F is being filed to add under Item 18, in Part III, the following:

	(A)	Report of Our Independent Registered Public Accounting Firm dated April 29, 2015;
	(B)	Report of Independent Registered Public Accounting Firm dated April 30, 2014;
	(C)	Consolidated statement of financial position for the fiscal years ended December 31, 2014 and 2013;
	(D)	Consolidated statements of comprehensive profit and loss for the fiscal years ended December 31, 2014, 2013 and 2012;
	(E)	Consolidated statements of changes in equity (deficit) for the fiscal years ended December 31, 2014, 2013 and 2012;
	(F)	Consolidated statements of cash flows for the fiscal years ended December 31, 2014, 2013 and 2012; and
	(G)	Notes to consolidated financial statements .

The referenced financial statements and the report of our certifying accountant thereon were inadvertently omitted from the Original Filing.

This Amended Form 20-F also amends the disclosure in Item 16F of the Original Filing to clarify that our Company’s former independent auditor was dismissed, rather than having resigned or declined to stand for re-election. In addition, as required by Item 16F(a)(3) of Form 20-F, we are including as Exhibit 15.1 a letter from our former independent auditor addressed to the Commission stating whether it agrees with the statements made by our Company in Item 16F (in response to Item 16F(a) of Form 20-F) and, if not, stating the respects in which it does not agree. Such letter was inadvertently omitted as an exhibit to the Original Filing.

We have not modified or updated other disclosures presented in our Original Filing. Accordingly, this Amended Form 20-F does not reflect events occurring after the filing of our Original Filing and does not modify or update those disclosures affected by subsequent events. Information not affected by this amendment is unchanged and reflects the disclosures made at the time of the Original Filing. Pursuant to Rule 12b-15 under the Securities Exchange Act of 1934, as amended, the complete texts of Items 16F and 18, as amended, are repeated in this Amended Form 20-F. In addition, for convenience of reference, the following disclosure from the Original Filing, under the heading “General,” is included in this Amended Form 20-F.

This Amended 20-F consists solely of the preceding cover page, this explanatory note, the following disclosure under the heading “General,” amended Items 16F and 18, the signature page, restated exhibits 12.1, 12.3, 13.1 and 13.2, and exhibit 15.1 referred to above.

GENERAL

This Amended Form 20-F is being filed as an amendment to our annual report under the Exchange Act for the year ended December 31, 2014.

In this Amended Form 20-F, references to:

“Adira” means Adira Energy Ltd., a Canadian federal corporation (formerly AMG Oil Ltd.);

“Adira Barbados” means Adira Energy Investments (Barbados) Ltd., a Barbados corporation that was dissolved on December 31, 2013;

“Adira Energy” means Adira Energy Holding Corp., an Ontario corporation (formerly Adira Energy Corp.);

“Adira Geo” means Adira Geo Global Ltd., an Israeli corporation;

“Adira Group” means Adira together with: (a) its wholly-owned subsidiary, Adira Energy; (b) its wholly-owned indirect (through Adira Energy) subsidiaries, Adira Israel, Adira Services, Adira Oil Technologies Ltd., Adira Energy CBM Ltd., and Adira Energy Holdings (Barbados) Ltd. (which wholly owned Adira Barbados until Adira Barbados was dissolved on December 31, 2013); and (c) Adira’s 60% indirect (through Adira Energy) subsidiary, Adira Geo;

“Adira Israel” means Adira Energy Israel Ltd., an Israeli corporation;

“Adira Services” means Adira Energy Israel Services Ltd., an Israeli corporation;

“Adira Technologies” means Adira Oil Technologies Ltd., an Israeli corporation;

“We”, “us”, “our”, and the “Company” mean collectively and individually, the companies that form the Adira Group; and

Adira and Adira Energy have historically used U.S. dollar as their reporting currency. All references in this document to “dollars” or “$” are to United States dollars and all references to “CDN$” are to Canadian dollars, unless otherwise indicated.

Except as noted, the information set forth in this Amended Form 20-F is as of December 31, 2014 and all information included in this document should only be considered correct as of such date.

PART II

ITEM 16F CHANGES TO REGISTRANT’S CERTIFYING ACCOUNTANT

On April 13, 2015, MNP LLP was engaged as our Company’s independent auditor, and Kost Forer Gabbay and Kasierer, a member firm of Ernst & Young Global, was dismissed as our Company’s independent auditor. Such change of our Company’s independent auditor was approved by our Board of Directors on the recommendation of the Audit Committee.

Kost Forer Gabbay and Kasierer’s reports on our financial statements for our past two fiscal years did not contain an adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles, except to indicate doubt as to our ability to continue as a going concern.

During our past two fiscal years there were no disagreements between us and our independent auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure.

PART III

ITEM 18 FINANCIAL STATEMENTS

Financial Statements Filed as Part of this Annual Report:

Report of Independent Registered Public Accounting Firm dated April 29, 2015;

Report of Independent Registered Public Accounting Firm dated April 30, 2014;

Consolidated statement of financial position for the fiscal years ended December 31, 2014, 2013 and 2012;

Consolidated statements of comprehensive profit and loss for the fiscal years ended December 31, 2014, 2013 and 2012;

Consolidated statements of changes in equity (deficit) for the fiscal years ended December 31, 2014, 2013 and 2012;

Consolidated statements of cash flows for the fiscal years ended December 31, 2014, 2013 and 2012; and

Notes to consolidated financial statements

ADIRA ENERGY LTD.

CONSOLIDATED FINANCIAL STATEMENTS

AS OF DECEMBER 31, 2014, 2013 and 2012

U.S. DOLLARS IN THOUSANDS

INDEX

	Page

Report of Independent Registered Public Accounting Firm	1 - 2

Consolidated Statements of Financial Position	3

Consolidated Statements of Comprehensive Profit and Loss	4

Consolidated Statements of Changes in Equity (Deficit)	5

Consolidated Statements of Cash Flows	6

Notes to Consolidated Financial Statements	7 - 26

- - - - - - - - - - - - - - - - - -

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Adira Energy Ltd.

We have audited the accompanying consolidated statement of financial position of Adira Energy Ltd ( the “Company”) as of December 31, 2014, and the related consolidated statements of comprehensive profit and loss, changes in equity (deficit) and cash flows for the year ended December 31, 2014. The Company’s management is responsible for these consolidated financial statements. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2014 and the results of its operations and its cash flows for the year then ended in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 1(b), the Company has experienced negative cash flows from operations since inception and has accumulated a significant deficit which raises substantial doubt about its ability to continue as a going concern. Management’s plans regarding these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The consolidated financial statements as at December 31, 2013 and 2012 and for the years then ended were audited by other auditors who expressed an opinion without reservation on those statements in their audit reports dated April 30, 2014 and April 30, 2013 respectively.



		Chartered Professional Accountants
		Licensed Public Accountants
Mississauga, Ontario
April 29, 2015

REPORT OF INDEPENDENT REGISTERED PUBLIC ACOUNTING FIRM

To the Board of Directors and Shareholders of

ADIRA ENERGY LTD.

We have audited the accompanying consolidated balance sheets of Adira Energy Ltd. ("the Company") and its subsidiaries as of December 31, 2013 and 2012, and the related consolidated statements of comprehensive loss, changes in equity and cash flows for each of the three years in the period ended December 31, 2013. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company's internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of December 31, 2013 and 2012 and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2013, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board.

As described in Note 1b to the financial statements, as of December 31, 2013, the Company has an accumulated deficit of $34.6 million and a negative cash flow from operations of $2 million for the year ended December 31, 2013. The Company is an oil and gas exploration company and its existing funds and operating revenues are currently insufficient to finance its future and current operating expenses and its exploration funding commitments. These matters and other matters discussed in Note 1b, raise substantial doubt about the Company's ability to continue as a going concern. The consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Tel-Aviv, Israel	KOST FORER GABBAY & KASIERER
April 30 , 2014	A Member of Ernst & Young Global

Kost Forer Gabbay & Kasierer

3 Aminadav St.

Tel-Aviv 6706703, Israel

Tel: +972-3-6232525

Fax: +972-3-5622555

ey.com

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

U.S. dollars in thousands


	Note		December 31, 2014			December 31, 2013
ASSETS

CURRENT ASSETS:
Cash and cash equivalents		4	$	334		$	617
Restricted deposits		5		9			35
Other receivables and prepaid expenses		6		64			2,513

Total current assets				407			3,165

NON-CURRENT ASSETS:
Property and equipment, net		7		2			61

Total assets			$	409		$	3,226

LIABILITIES AND EQUITY (DEFICIT)

CURRENT LIABILITIES:
Trade payables		9	$	167		$	2,817
Other accounts payable and accrued liabilities		10		56			986

Total current liabilities				223			3,803

EQUITY (DEFICIT):
Share capital		13		-			-
Additional paid-in capital		13		34,051			34,023
Accumulated deficit				(33,865	)		(34,600	)

Total equity (deficit)				186			(577	)

Total liabilities and equity			$	409		$	3,226

The accompanying notes are an integral part of the consolidated financial statements.

Approved on Behalf of the Board:

April 29, 2015		/s/ Dennis Bennie		/s/ Alan Friedman
Date of approval of the financial statements		Dennis Bennie Chairman of the Board		Alan Friedman Director

CONSOLIDATED STATEMENTS OF COMPREHENSIVE PROFIT AND LOSS

U.S. dollars in thousands, except share and per share data

			Year ended December 31,
	Note		2014			2013			2012

Revenues and other income		18	$	-		$	17		$	1,889

Expenses:
Exploration expenses		8		-			677			1,026
General and administrative expenses		19		602			2,813			5,304
Gain on settlement of accounts payable and other payables		8(e)		(1,374	)		-			-
Impairment charge		8(e)		-			5,168			7,810

Total expenses				(772	)		8,658			14,140

Profit (loss) before financing income and gain on foreign exchange				772			(8,641	)		(12,251	)

Financing income		20		-			3,027			2,480
Gain on foreign exchange				(37	)		(30	)		(745	)

Profit (loss) before income taxes				735			(5,644	)		(10,516	)
Income taxes		12		-			-			(41	)

Net profit (loss) and comprehensive profit (loss)			$	735		$	(5,644	)	$	(10,557	)

Basic and diluted net earnings (loss) per share attributable to equity holders of the parent		14	$	0.06		$	(0.47	)	$	(1.19	)

Weighted average number of Ordinary shares used in computing basic and diluted net loss per share				12,158,302			12,052,073			8,862,724

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)

U.S. dollars in thousands, except share data

			Attributable to equity holders of the parent
	Number of		Share		Additional paid-in			Accumulated						Non-controlling interests			Total equity
	shares		capital		capital			deficit			Total			Non-controlling interests			(deficit)
Balance as of December 31, 2011		6,784,513	$	-	$	27,775		$	(19,169	)	$	8,606		$	220		$	8,826
Shares issued in private placement, net (Note 13(b))		5,267,509		-		*)5,215			-			5,215			-			5,215
Investment in equity of subsidiary by non-controlling interests		-		-		-			-			-			550			550
Share-based compensation		-		-		976			-			976			-			976
Net loss		-		-		-			(8,554	)		(8,554	)		(2,003	)		(10,557	)
Adjustment of non-controlling interests **)		-		-		-			(1,233	)		(1,233	)		1,233			-

Balance as of December 31, 2012		12,052,022		-		33,966			(28,956	)		5,010			-			5,010

Share-based compensation		-		-		57			-			57			-			57
Net loss		-		-		-			(5,644	)		(5,644	)		-			(5,644	)

Balance as of December 31, 2013		12,052,022		-		34,023			(34,600	)		(577	)		-			(577	)

Shares and warrants issued in private placement, net (Note 13(b))		240,000		-		60			-			60			-			60
Share-based compensation recovery		-		-		(32	)		-			(32	)		-			(32	)
Net loss		-		-		-			735			735			-			735

Balance as of December 31, 2014		12,292,022	$	-	$	34,051		$	(33,865	)	$	186		$	-		$	186

*) Net of issuance expenses of $791 in 2012.

**) Due to assumption of liabilities of subsidiary

The accompanying notes are an integral part of the consolidated financial statements.

CONSOLIDATED STATEMENTS OF CASH FLOWS

U.S. dollars in thousands

	Year ended December 31,
	2014			2013			2012

Cash flows from operating activities:

Net profit (loss)	$	735		$	(5,644	)	$	(10,557	)

Adjustments to reconcile net loss to net cash used in operating activities:
Adjustments to the profit or loss items:
Depreciation		45			88			96
Impairment charge		-			5,168			7,810
Loss on sale of fixed assets		3			-			726
Revaluation of warrants		-			(3,013	)		(2,299	)
Share-based compensation (recovery)		(32	)		57			976
Gain on settlement of accounts payable and other payables		(1,374	)		-			-

		(1,358	)		2,300			7,309
Changes in operating asset and liability items:

Decrease (increase) in accounts receivable, other receivables and prepaid expenses		2,449			4,847			(6,696	)
Increase (decrease) in trade payables		(1,276	)		(3,024	)		5,359
Increase (decrease) in other accounts payable and accrued liabilities		(930	)		(490	)		537

		243			1,333			(800	)

Net cash used in operating activities		(380	)		(2,011	)		(4,048	)

Cash flows from investing activities:

Expenditures on exploration and evaluation assets		-			(2,636	)		(10,654	)
Purchase of property and equipment		-			-			(70	)
Proceeds from sale of equipment		11			1,823			-
Increase (decrease) in long-term receivable		-			-			(640	)
Decrease (increase) in restricted cash		26			1,047			(639	)

Net cash provided by (used in) investing activities		37			234			(12,003	)

Cash flows from financing activities:
Proceeds from issuance of warrants, net of issuance expenses		-			-			4,586
Proceeds from issue of shares, net of issuance expenses		60			-			5,215
Investment in equity of subsidiary by non-controlling interests		-			-			550

Net cash provided by financing activities		60			-			10,351

Decrease in cash and cash equivalents		(283	)		(1,777	)		(5,700	)
Cash and cash equivalents at the beginning of the year		617			2,394			8,094

Cash and cash equivalents at the end of the year	$	334		$	617		$	2,394

The accompanying notes are an integral part of the consolidated financial statements.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 1:

GENERAL

Nature of operations

Adira Energy Ltd. and its subsidiaries ("Adira" or "the Company"), is an oil and gas exploration company. Adira is a limited company, incorporated on April 8, 2009, and domiciled in Toronto, Ontario, Canada. The registered head office is located at 120 Adelaide Street West, Suite 800, Toronto, Ontario, M5H 1T1. The Company's shares are currently traded on the OTC market in the U.S. and the TSX Venture Exchange in Canada. The consolidated financial statements of the Company for the year ended December 31, 2014 were authorized for issue in accordance with a resolution of the directors on April 29, 2015.

During the years 2009-2010, Adira Israel was granted three offshore petroleum licenses in Israel. The Company's wholly-owned Canadian subsidiary, Adira Energy Holdings Corp. owns three wholly-owned Israeli subsidiaries as follows: (i) Adira Energy Israel Limited ("Adira Israel"), held two offshore petroleum license being the "Gabriella License No. 378" ("Gabriella"), which expired on September 1, 2014, of which it held 15% (see also Note 8(a) and the "Yitzhak License No. 380" ("Yitzhak"), which expired on October 30, 2014, of which it owned a 70% interest (see also Note 8(b); (ii) Adira Oil Technologies Limited ("AOT") which was granted a 23.25% interest in one offshore petroleum license, the "Samuel License No. 388" ("Samuel"), which was returned to the Ministry of Energy and Water of the State of Israel (the "Ministry") in October 2013 (see also Note 8(c) (Gabriella, Yitzhak and Samuel - collectively the "Offshore Licenses"); and (iii) Adira Energy Israel Services Ltd. provided services in respect of the entities described above, until December 31, 2013. Adira Energy Holdings Corp. also owns 60% of the subsidiary, Adira Geo Global Limited ("AGG"), which owned a 30% interest in Samuel. Adira Israel owns an option to farm into the Yam Hadera License (see also Note 8(d)).

Going concern

The accompanying consolidated financial statements have been prepared on the basis of a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company is currently in the exploration stage and has not commenced commercial operations. As at December 31, 2014, the Company had a working capital deficit of $184, an accumulated deficit of $33,865 and is not yet generating operating cash flows. As such, there is significant doubt regarding the Company’s ability to continue as a going concern.

In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but not limited to, twelve months from the end of the reporting period. The Company’s ability to continue operations is dependent on management’s ability to secure additional financing. Management is actively pursuing such additional sources of financing, and while it has been successful in doing so in the past, there can be no assurance it will be able to do so in the future. Accordingly, the consolidated financial statements do not give effect to adjustments that would be necessary should the Company be unable to continue as a going concern and therefore to realize its assets and liquidate its liabilities and commitments in other than the normal course of business and at amounts different from those in the accompanying consolidated financial statements.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 2:

BASIS OF PREPARATION

Statement of compliance

These consolidated financial statements have been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”) and interpretations issued by the IFRS Interpretations Committee (“IFRIC”).

Basis of presentation

The consolidated financial statements have been prepared on a historical cost basis, and are presented in U.S. dollars. All values are rounded to the nearest thousand ($000), except share and per share data or when otherwise indicated.

On August 9, 2013, the Company completed a consolidation of the Company’s Common Shares on the basis of one post-consolidation Common Share for every three pre-consolidation Common Shares (the "Share Consolidation").

On September 29, 2014, the Company completed a second consolidation of the Company’s Common Shares on the basis of one post-consolidation Common Share for every five pre-consolidation Common Shares (the "Second Share Consolidation"). All share and per share data for all periods presented have been adjusted to reflect the decrease in number of shares resulting from the Consolidation and the Second Consolidation.

Basis of consolidation

These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries Adira Energy Holdings Corp., Adira Energy Israel Limited, Adira Oil Technologies Limited and Adira Energy Israel Services Ltd. In addition Adira Energy Holdings Corp. has a 60% ownership in Adira Geo Global Limited.

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES

Significant judgments and estimates

The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that have an effect on the application of the accounting policies and on the reported amounts of assets, liabilities, revenues and expenses. These estimates and underlying assumptions are reviewed regularly. Changes in accounting estimates are reported in the period of the change in estimate. In the preparation of these consolidated financial statements the Company has not identified any judgments or estimates which may have a significant effect on the amounts recognized in the consolidated financial statements.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Unincorporated joint oil and gas ventures

The Company conducts petroleum and natural gas exploration activities jointly with other partners who each have direct ownership in the assets and each are directly obligated for the liabilities of the ventures. Consequently, these consolidated financial statements reflect only the Company's proportionate interest in such activities.

The Company accounts for its share of the joint venture’s assets, liabilities it has incurred, income from the sale or use of its share of the joint venture’s operations output, together with its share of the expenses incurred by the joint venture and any expenses it incurs in relation to its interest in the joint venture. As of December 31, 2014, all the joint ventures have ceased.

Farm-out arrangements in the exploration and evaluation phase

A farm-out is the transfer of part of an oil and gas interest in consideration for an agreement by the transferee ("farmee") to meet, absolutely, certain expenditures which would otherwise have to be undertaken by the owner ("farmor"). Farm-out transactions generally occur in the exploration or development phase and are characterized by the transferor (i.e. farmor) giving up future economic benefits, in the form of reserves, in exchange for a reduction in future funding obligations.

Accordingly, the farmee recognizes its expenditure under the arrangement in respect of its interest and that retained by the farmor, as and when the costs are incurred.

The Company (farmor) accounts for the farm-out arrangement as follows:

- The farmor does not record any expenditure made by the farmee on its behalf;

- The farmor does not recognize a gain or loss on the farm-out arrangement, but rather redesignates any costs previously capitalized in relation to the whole interest as relating to the partial interest retained; and

- any cash consideration received is credited against costs previously capitalized in relation to the whole interest with any excess accounted for by the farmor as a gain on disposal. As of December 31, 2014, the Company had no outstanding farm-out arrangements.

Translation of foreign currencies

The Company’s presentation currency is the U.S. dollar. The functional currency which is the currency that best reflects the economic environment in which the Company operates and conducts its transactions, is separately determined for the Company and each of its subsidiaries, and is used to measure the financial position and operating results. The functional currency of the Company and its subsidiaries is the U.S. dollar. Transactions denominated in foreign currency (other than the functional currency) are recorded on initial recognition at the exchange rate at the date of the transaction. After initial recognition, monetary assets and liabilities denominated in foreign currency are translated at the end of each reporting period into the functional currency at the exchange rate at that date. Exchange differences, are recognized in profit or loss. Non-monetary assets and liabilities measured at cost are translated at the exchange rate at the date of the transaction.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Cash equivalents

Cash equivalents are considered as highly liquid investments, including unrestricted short-term bank deposits with an original maturity of three months or less from the date of acquisition or with a maturity of more than three months, but which are redeemable on demand without penalty and which form part of the Company's cash management.

Financial instruments

The Company’s financial instruments consist of the following summarized accounts included within the consolidated statements of financial position:

	Financial assets and liabilities	Classification

	Cash and cash equivalents	Loans and receivables

	Restricted deposits	Loans and receivables

	Other receivables	Loans and receivables

	Trade payables	Other financial liabilities

	Accounts payable and accrued liabilities	Other financial liabilities

Loans and receivables: Loans and receivables are financial assets with fixed or determinable payments not quoted in an active market. These assets are initially recognized at fair value plus transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortized cost using the effective interest method, less any impairment loss. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial instrument to the net carrying amount on initial recognition.

Other financial liabilities: Other financial liabilities are recognized initially at fair value net of any directly attributable transaction costs. Subsequent to initial recognition, these other financial liabilities are measured at amortized cost using the effective interest method. Other financial liabilities are derecognized when the obligations are discharged, cancelled or expired.

Impairment of financial assets: Financial assets are assessed for indicators of impairment at the end of each reporting period. Financial assets are impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition, the estimated future cash flows of the investments have been negatively impacted. Evidence of impairment could include financial difficulty of the counterparty, default or delinquency in interest or principal payment or the likelihood that the borrower will enter bankruptcy or financial reorganization.

The carrying amount of financial assets is reduced by any impairment loss directly for all financial assets with the exception of accounts receivable, where the carrying amount is reduced through the use of an allowance account. When an accounts receivable balance is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Financial instruments (cont.)

Financial instruments recorded at fair value: The Company classifies its financial instruments according to a three level hierarchy that reflects the significance of the inputs used in making fair value measurements. The three levels of the fair value hierarchy are as follows:

· Level 1 - Unadjusted quoted prices in active markets for identical assets and liabilities;

· Level 2 - Inputs other than quoted prices that are observable for assets or liabilities directly or indirectly; and

· Level 3 - Inputs for assets or liabilities that are not based on observable market data.

Property and equipment

Property and equipment are measured at cost, including directly attributable costs, less accumulated depreciation. Cost includes spare parts and auxiliary equipment that can be used only in connection with the machinery and equipment.

Depreciation is calculated on a straight-line basis over the useful life of the assets at annual rates as follows:

		%

	Drilling rig and related equipment	10
	Office furniture and equipment	10
	Computers and peripheral equipment	33

The useful life, depreciation method and residual value of an asset are reviewed at least each year-end and any changes are accounted for prospectively as a change in accounting estimate.

Impairment of non-financial assets

The Company evaluates the need to record an impairment of the carrying amount of non-financial assets whenever events or changes in circumstances indicate that the carrying amount is not recoverable. If the carrying amount of non-financial assets exceeds their recoverable amount, the assets are reduced to their recoverable amount. The recoverable amount is the higher of fair value less costs of sale and value in use. In measuring value in use, the expected future cash flows are discounted using a pre-tax discount rate that reflects the risks specific to the asset. The recoverable amount of an asset that does not generate independent cash flows is determined for the cash-generating unit to which the asset belongs. Impairment losses are recognized in profit or loss.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

Exploration and evaluation assets

Pre-license costs:

Pre-license costs are expensed in the period in which they are incurred.

Exploration and evaluation costs:

Oil and natural gas exploration and development expenditure is accounted for using the successful efforts method of accounting. During the geological and geophysical exploration phase, costs are charged against income as incurred. Costs directly associated with an exploration well in its drilling phase, for which it has not yet been determined whether there are proved reserves or it is not commercially viable, are capitalized as exploration and evaluation intangible assets until the drilling of the well is complete and the results have been evaluated. These costs include employee remuneration, materials and fuel used, rig costs and payments made to contractors. If no reserves are found, the exploration asset is tested for impairment. If extractable hydrocarbons are found and, subject to further appraisal activity (e.g., by drilling further wells), are likely to be developed commercially, the costs continue to be carried as intangible assets while sufficient and continued progress is made in assessing the commerciality of the hydrocarbons. All such costs are subject to technical, commercial and management review as well as review for impairment at least once a year to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off. When proved reserves of oil are determined and development sanctioned, the relevant expenditure is transferred to oil and gas properties after impairment is assessed and any resulting impairment loss is recognized.

Income taxes

Income tax expense consists of current and deferred tax expense. Current and deferred tax are recognized in profit or loss except to the extent they relate to items recognized directly in equity or other comprehensive income.

Current tax is recognized and measured at the amount expected to be recovered from or payable to the taxation authorities based on the income tax rates enacted at the end of the reporting period and includes any adjustment to taxes payable in respect of previous years.

Deferred tax is recognized on any temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable earnings. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period when the asset is realized and the liability is settled. The effect of a change in the enacted or substantively enacted tax rates is recognized in net earnings and comprehensive income or equity depending on the item to which the adjustment relates.

Deferred tax assets are recognized to the extent future recovery is probable. At each reporting period end, deferred tax assets are reduced to the extent that it is no longer probable that sufficient taxable earnings will be available to allow all or part of the asset to be recovered.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

k. Share-based payment transactions

The Company's employees and other service providers are entitled to remuneration in the form of equity-settled share-based payment transactions.

The cost of equity-settled transactions with employees is measured at the fair value of the equity instruments granted at grant date. Fair value measurement of all options and warrants granted is determined using an appropriate pricing model. As for other service providers, the cost of the transactions is measured at the fair value of the goods or services received as consideration for equity instruments. In cases where the fair value of the goods or services received as consideration of equity instruments cannot be measured, they are measured by reference to the fair value of the equity instruments granted.

The cost of equity-settled transactions is recognized in profit or loss, together with a corresponding increase in equity, during the period which the performance and service conditions are to be satisfied, ending on the date on which the relevant employees become fully entitled to the award ("the vesting period"). The cumulative expense recognized for equity-settled transactions at the end of each reporting period until the vesting date reflects the extent to which the vesting period has expired and the Company's best estimate of the number of equity instruments that will ultimately vest. The expense or income recognized in profit or loss represents the movement in the cumulative expense recognized at the end of the reporting period. No expense is recognized for awards that do not ultimately vest.

l. Revenue recognition

Revenues are recognized in the statement of comprehensive loss when the revenues can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the Company and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

The Company's revenues are derived from:

Operator fees - the Company acted as the operator on the Offshore Licenses and was entitled to operator fees at a fixed rate of 7.5% of the total exploration costs incurred by the respective unincorporated joint venture’s (“UJV's”) or at a rate ranging from 1.2%-4.8% of the total exploration costs incurred by the respective UJV's depending on the annual expenditures in the UJV. Revenues from operator fees were recognized in accordance with the terms of the Joint Operating Agreements, as exploration costs are incurred in the UJV's.

Consulting fees - The Company provided consulting services in respect of the Offshore Licenses on a "time and materials" basis. Consulting fees were recognized as revenues as the services were rendered to the respective UJV's.

Loss per share

Basic loss per share is computed by dividing the profit or loss for the period by the weighted average number of common shares outstanding during the period. Stock options and common share purchase warrants are not included in the calculation of diluted loss per share if their inclusion would be antidilutive.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 3:

SIGNIFICANT ACCOUNTING POLICIES (Cont.)

n. Decommissioning liability

Decommissioning liability is recognized when the Company has a present legal or constructive obligation as a result of past events, and it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the amount of obligation can be made. A corresponding amount equivalent to the provision is also recognized as part of the cost of the related property and equipment. The amount recognized is the estimated cost of decommissioning, discounted to its present value. Changes in the estimated timing of decommissioning or decommissioning cost estimates are dealt with prospectively by recording an adjustment to the provision, and a corresponding adjustment to property and equipment. The unwinding of the discount on the decommissioning provision is included as a finance cost.

Standards and amendments issued but not yet effective

The IASB issued new standards and amendments not yet effective.

IFRS 9, Financial Instruments (“IFRS 9”) was initially issued by the IASB on November 12, 2009 and issued in its completed version in July 2014, and will replace IAS 39, "Financial Instruments: Recognition and Measurement" (“IAS 39”). IFRS 9 replaces the multiple rules in IAS 39 with a single approach to determine whether a financial asset is measured at amortized cost or fair value and a new mixed measurement model for debt instruments having only two categories: amortized cost and fair value. The approach in IFRS 9 is based on how an entity manages its financial instruments in the context of its business model and the contractual cash flow characteristics of the financial assets. The new standard also requires a single impairment method to be used, replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for financial years beginning on or after January 1, 2018. The Company anticipates that this standard will be adopted in the Company’s consolidated financial statements for the year beginning January 1, 2018, and has not yet considered the potential impact of the adoption of IFRS 9.

NOTE 4:

CASH AND CASH EQUIVALENTS

	December 31,
	2014		2013

In US dollars	$	249	$	436
In Canadian dollars		41		126
In new Israeli shekels (“NIS”)		44		55

	$	334	$	617

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 5:

RESTRICTED CASH

Short-term restricted cash of $9 as of December 31, 2014, relates to deposits held by a financial institution as security in connection with a guarantee against the Company's credit facility.

Short-term restricted cash of $25 as of December 31, 2013, relates to cash held by a financial institution as a guarantee for the Company's Israeli office rental obligation and $10 as security in connection with a guarantee against the Company's credit facility.

NOTE 6:

OTHER RECEIVABLES AND PREPAID EXPENSES

	December 31,
	2014		2013
Receivable from UJVs	$	-	$	2,292
Government authorities		16		108
Prepaid expenses		48		86
Other receivables		-		27
	$	64	$	2,513

NOTE 7:

PROPERTY AND EQUIPMENT, NET

Composition and movement:

2014

	Drilling rig and related equipment		Office furniture and equipment			Computer and peripheral equipment			Total
Cost:
Balance at January 1, 2014	$	-	$	5		$	285		$	290
Disposals during the year				(5	)		(282	)		(287	)
Balance at December 31, 2014		-		-			3			3

Accumulated depreciation:
Balance at January 1, 2014		-		4			225			229
Depreciation for the year				1			44			45
Disposals during the year		-		(5	)		(268	)		(273	)
Balance at December 31, 2014		-		-			1			1

Depreciated cost at December 31, 2014	$	-	$	-		$	2		$	2

During the year, Adira Israel disposed of assets with a net cost of $14, for which it received proceeds of $11 and recorded a net loss of $3, which is included in general and administrative expenses in the Consolidated Statements of Comprehensive Profit and Loss.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 7:

PROPERTY AND EQUIPMENT, NET (Cont.)

2013

	Drilling rig and related equipment			Office furniture and equipment			Computer and peripheral equipment		Total
Cost:
Balance at January 1, 2013	$	426		$	83		$	285	$	794
Disposals during the year		(426	)		(78	)		-		(504	)
Balance at December 31, 2013		-			5			285		290

Accumulated depreciation:
Balance at January 1, 2013		348			30			140		518
Depreciation for the year		-			3			85		88
Disposals during the year		(348	)		(29	)		-		(377	)
Balance at December 31, 2013		-			4			225		229

Depreciated cost at December 31, 2013	$	-		$	1		$	60	$	61

NOTE 8:

EXPLORATION AND EVALUATION ASSETS

The following is a description of activities in respect of the Company's licenses:

Gabriella:

The Gabriella License was awarded to the Company in July 2009. The license was issued for an initial three year period and could be renewed upon fulfillment of certain conditions for a further four year period with a further renewal option of two years in case of a reserve discovery.

Adira Israel, Modi’in Energy LP (“MELP”) and Brownstone Energy Inc., the partners in the license entered into various agreements for the purpose of drilling an exploration well on the Gabriella License in January 2013. The drilling, however, was not accomplished and Adira Israel and MELP alleged that the other was in default of various obligations under the Gabriella Joint Operating Agreement (“JOA”) and other agreements entered into on behalf of the Gabriella License participants. Accordingly, on February 11, 2013, Adira Israel, in its capacity as operator under the Gabriella JOA, suspended operations on the Gabriella License due to lack of funding and lack of reasonable expectation of funding to meet certain work program obligations.

ADIRA ENERGY LTD.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014, 2013 and 2012

U.S. dollars in thousands, except share and per share data

NOTE 8:

EXPLORATION AND EVALUATION ASSETS (Cont.)

Gabriella:

Effective July 8, 2013 (the "Settlement Agreement Effective Date"), Adira Israel entered into a settlement and release agreement (the "Settlement Agreement") with MELP and Brownstone to resolve the abovementioned disputes and the related suspension of operations on the Gabriella License. Pursuant to the Settlement Agreement, the Gabriella License participants agreed to waive and release each other from any claims and demands that they may have had against each other with respect to the Gabriella License. The Agreement further provided that the Gabriella License participants will fund their proportionate share of costs incurred in connection with the attempted drilling of the first exploration well. As of June 30, 2013, Adira Israel’s net share of the costs totaled approximately US$3.3 million, which has been paid as at December 31, 2013. Additionally, Adira Israel agreed to relinquish several entitlements, including, but not limited to, its management fee.

Pursuant to the Settlement Agreement, in the event that Adira Israel does not pay the Settlement Costs, at MELP's request, Adira Israel may withdraw from the Gabriella JOA, assign its participating interest in the Gabriella License to the remaining Gabriella License participants and relinquish its remaining ORRI.

On September 22, 2014, the Petroleum Commissioner advised MELP that license No. 378 (the “Gabriella License”) and the license No. 383 (the “Yam Hadera License”) expired, without further extension being granted, due to the milestones in their work program not being achieved.

Yitzhak:

The Yitzhak license was awarded to the Company in October 2009. The license was issued for an initial three year period and may be renewed upon fulfillment of certain conditions for a further four year period with a further renewal option of two years in case of a reserve discovery. In October 2013, the Company had received a renewal of the Yitzhak license to October 15, 2014, including extension of certain milestones. The Company did not meet the milestones on the license, which expired on October 15, 2014.

Samuel:

The Samuel license was issued in August 2010. The license was issued to a consortium led by the Company (through the Company's subsidiaries, AOT and AGG).

On October 14, 2013, AGG relinquished the Samuel license, offshore Israel, back to the State of Israel, as a result of challenging markets and difficulty in raising significant funds to drill multi well programs.

NOTE 8:

EXPLORATION AND EVALUATION ASSETS (Cont.)

Yam Hadera:

The Company had an option (the "Yam Hadera Option") to acquire up to a 15% participating interest in the Yam Hadera license (the "Yam Hadera License"), located 30 kilometers offshore Israel, between Hadera and Haifa. The Yam Hadera Option has exercisable until 14 days prior to the signing of a rig contract for the Yam Hadera License. On September 22, 2014, the Petroleum Commissioner advised MELP that the Yam Hadera License expired, without further extension being granted, due to the milestones in their work program not being achieved and on October 22, 2014, MELP sent a letter of appeal to the decision with the Minister of Energy and Water, however, as of this date, no reply has been received.

For the year ended December 31, 2012, the Company recorded a $7,596 and $214 non-cash impairment charges arising from the write-off of exploration and evaluation assets on its Samuel and Eitan properties, respectively, in the statement of comprehensive profit and loss. For the year ended December 31, 2013, as a result of the relinquishment of the Samuel license and the cessation of operations on the Gabriella licenses and the lack of progress on the Yitzhak licenses, the Company recorded a $5,168 non-cash impairment charge arising from the write-off of exploration and evaluation assets in the statement of comprehensive profit and loss. For the year ended December 31, 2014 Adira Israel recorded a gain on settlement of accounts payable and other payables in the amount of $1,374, arising from settlement agreements reached with suppliers which were lower than the obligations recorded as of December 31, 2013.

NOTE 9:

TRADE PAYABLES

Trade payables are non-interest bearing and are normally settled on 60-day terms.

NOTE 10:

OTHER ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

	December 31,
	2014		2013

Employees in respect of payroll	$	30	$	346
Accrued expenses		26		603
Other		-		37
	$	56	$	986

NOTE 11: FINANCIAL INSTRUMENTS

The Company's activities expose it to various financial risks, such as market risks (foreign currency risk, consumer price index risk, interest risk and price risk), credit risk and liquidity risk. The Company's comprehensive risk management program focuses on actions to minimize potential adverse effects on the Company's financial performance.

a. Credit risk:

Concentration of credit risk exists with respect to the Company's cash and cash equivalent, restricted deposits balances and other receivables. The Company’s exposure as at December 31, 2014 and 2013 was for $359 and $3,079 respectively, which consisted of $334 (2013 - $617) in cash held in bank accounts, $9 (2013 - $35) in restricted deposits and $16 (2013 - $2,427) in other receivables.

The Company manages credit risk, in respect of cash and cash equivalents, and restricted cash, by holding them at major Canadian and Israeli financial institutions in accordance with the Company's investment policy. The Company places its temporary cash and cash equivalents with high credit quality financial institutions. The Company regularly monitors credit extended to customers and their general financial condition. The Company historically has not had significant past-due receivables.

Liquidity risk:

Liquidity risk is the risk that the Company will encounter difficulty in obtaining funds to meet current obligations and future commitments. The Company's approach to managing liquidity risk is to forecast cash requirements to determine whether it will have sufficient funds to meet its current liabilities when due. As of December 31, 2014, the Company had cash and cash equivalents of $334 (2013 - $617), restricted deposits of $9 (2013 - $35), and other receivables and prepaid expenses of $64 (2013 – $2,513) to settle other payables in the amount of $223 (2013 – $3,803) (Note 1(b)).

c. Market risk:

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of two types of risk: interest rate risk and foreign currency risk.

1. Interest rate risk:

The Company is not exposed to significant interest rate risk due to the short-term maturity of its cash equivalents.

Foreign currency risk:

The Company is exposed to financial risk related to the fluctuation of foreign exchange rates. The Company operates in Israel. Most of the Company's monetary assets are held in U.S. dollars and most of the Company's expenditures are made in U.S. dollars. However, the Company also has expenditures in new Israeli shekels ("NIS") and Canadian dollars. The Company has not hedged its exposure to currency fluctuations. An increase or decrease of 5% of the NIS relative to the U.S or the Canadian dollar would not have a significant effect on the Company.

NOTE 12:

TAXES ON INCOME

The reconciliation of the combined Canadian federal and provincial statutory income tax rate of 26.5% (2013 – 26.5%) to the effective tax rates for the years ended December 31 is as follows:

	2014			2013			2012
Income (loss) before recovery of income taxes	$	735		$	(5,644	)	$	(10,516	)

Expected income tax recovery	$	195		$	(1,496	)	$	(2,787	)
Taxes in respect of prior years		-			-			38
Difference in foreign tax rates		-			(134	)		149
Tax rate changes and other adjustments		(1,208	)		-			-
Non-deductible expenses		(343	)		925			179
Unrealized foreign exchange		617			-			-
Change in tax benefits not recognized		739			705			2,462
Income tax (recovery) expense	$	-		$	-		$	41

Deferred tax

The following table summarizes the components of deferred tax:

	2014			2013
Deferred Tax Assets
Non-capital losses carried forward	$	475		$	162,748

Deferred Tax Liabilities
Note payable	$	(475	)	$	(162,748	)

Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same taxation authority and the Company has the legal right and intent to offset.

Unrecognized Deferred Tax Assets

Deferred taxes are provided as a result of temporary differences that arise due to the differences between the income tax values and the carrying amount of assets and liabilities. Deferred tax assets have not been recognized in respect of the following deductible temporary differences:

	2014		2013
Deferred income tax assets
Property and equipment	$	1	$	1
Share issuance costs	$	874	$	1,468
Non-capital losses carried forward	$	5,887	$	4,492

The Canadian non-capital loss carry forwards expire as noted in the table below. Share issue and financing costs will be fully amortized in 2016. The remaining deductible temporary differences may be carried forward indefinitely. Deferred tax assets have not been recognized in respect of these items because it is not probable that future taxable profit will be available against which the Company can utilize the benefits therefrom.

NOTE 12:

TAXES ON INCOME (Cont.)

The Company’s Canadian non-capital income tax losses expire as follows:

2027	$	88
2028		476
2029		883
2030		1,112
2031		2,313
2032		683
2033		1,125
2034		1,001
	$	7,681

As of December 31, 2014, carryforward losses in Israel are approximately $27.1 million and may be carried forward indefinitely.

NOTE 13:

SHARE CAPITAL

Authorized

Unlimited number of Common shares without nominal or par value.

Issued and outstanding Common shares

On August 9, 2012, the Company completed a prospectus offering of 5,267,509 units for gross proceeds of $11,099 (before issuance expenses of $1,298 including the fair value of broker warrants $219). Each unit was priced at CAN$2.10 and consists of one Common Share and three warrants. Each warrant is exercisable to acquire one Common Share at a price of CAN$0.60 per Common Share until August 9, 2015.

The warrants are denominated in Canadian dollars, while the functional currency of the Company is US dollars; therefore the fair value of the warrants was classified as a financial liability and the fair value of the warrants on the date of issuance was approximately $5,312. This financial liability is remeasured to fair value at the end of each period and changes in fair value is recorded in profit or loss. Therefore, the Company recorded a gain in financing income of $3,013 during the year ended December 31, 2013 and $2,299 during the year ended December 31, 2012, as a result of remeasuring the fair value of the warrants to their fair value of $3,013 and zero as of December 31, 2013 and 2012, respectively.

As part of the offering a total of 1,117,667 broker warrants were issued. Each broker warrant is exercisable for one Common Share at an exercise price of CAN$0.42 per Common Share until August 9, 2014. The fair value of the warrants on the date of issuance was $219, which was included in offering expenses in statement of changes in equity.

On July 23, 2014, the Company completed a non-brokered private placement by issuing 240,000 common shares at a price of $0.25 per common share for gross proceeds of $60.

NOTE 13:

SHARE CAPITAL (Cont.)

Stock Option Plan

Under the Company's August 31, 2009 Stock Option Plan ("the Incentive Stock Option Plan"), options may be granted to employees, officers, consultants, service providers and directors of the Company or its subsidiaries.

Stock options may be issued up to 10% of the Company's outstanding Common shares at a term and an exercise price to be determined by the Company's Board of Directors. The maximum term of the options is ten years from the date of grant.

As of December 31, 2014, an aggregate of 813,802 of the Company's options were still available for future grant.

The Company typically grants stock options with vesting periods of between two to four years, generally with the exercise price at the closing price of the stock on the date of the grant and an expiration date of five years from the date of grant.

A summary of the stock option plan and changes during the years ended December 31, 2014 and 2013 were as follows:

	Number of options outstanding			Weighted average exercise price
Balance, January 1, 2012		625,615		$	7.8

Options granted		675,333			3.15
Options forfeited		(123,541	)		8.4

Balance, December 31, 2012		1,177,407			5.10

Options forfeited		(518,874	)		4.74

Balance, December 31, 2013		658,533			5.45

Options forfeited		(242,533	)		4.29

Balance, December 31, 2014		416,000		$	5.37

NOTE 13:

SHARE CAPITAL (Cont.)

Stock Option Plan

The following tables summarize information about stock options outstanding and exercisable as of December 31, 2014:

Grant date	Expiry date	Grant date fair value		Exercise price (*)		Number of options outstanding		Number of options exercisable		Average remaining contractual life

January 28, 2010	January 27, 2015	$	8.40	$	9.00		58,000		58,000		0.07
July 22, 2010	July 21, 2015	$	3.75	$	9.00		16,667		16,667		0.56
January 11, 2011 (*)	January 10, 2016	$	9.90	$	10.32		70,000		64,583		1.03
March 18, 2011 (*)	March 17, 2016	$	8.85	$	9.29		6,667		5,833		1.21
May 3, 2011 (*)	May 2, 2016	$	7.80	$	7.74		16,667		14,583		1.34
December 1, 2011 (*)	November 30, 2016	$	3.30	$	6.45		2,000		1,500		1.92
August 22, 2012 (*)	August 21, 2017	$	1.05	$	2.58		246,000		246,000		2.64

							416,000		407,167

(*)

The exercise price is denominated in Canadian dollars and was translated to USD in the table above using the exchange rate on December 31, 2014.

Stock options granted are expensed as share-based payments. For grants made until December 31, 2011, the Company used the Black-Scholes option pricing model to value stock options granted. For grants made from January 1, 2012, the Company uses the Binominal option pricing model to value stock options granted.

The fair value of options granted during 2012 is amortized over their vesting period and estimated at the date of grant with the following assumptions; dividend yield – 0%, expected volatility – 80%-104%, risk-free interest rate – 1%-1.8%, forfeiture rate – 0%-5%, expected life – 5 years.

During the year ended December 31, 2014 the Company recorded a net recovery of share-based compensation of $32 as a result of stock options that had not fully vested being cancelled during the year. During the year ended December 31, 2013 the Company recorded share-based compensation expense of $57 related to the vesting of stock options.

NOTE 13:

SHARE CAPITAL

d. Share purchase warrants

The Company has share purchase warrants outstanding entitling the holders to acquire Common shares as follows:

	Number of warrants (*)		Weighted average exercise price

Balance as of January 1, 2012	15,057,375		$	(**0.54	)
Warrants	82,365,640			(**0.20	)

Balance as of December 31, 2012	97,423,015		$	0.25

Warrants expired	(15,057,375	)		0.54
Balance as of December 31, 2013	82,365,640			0.20

Warrants expired	(3,353,000	)		0.12
Balance as of December 31, 2014	79,012,640		$	0.17

The following tables summarize information applicable to warrants outstanding as of December 31, 2014:

Issue date	Expiry date	Grant date fair value		Exercise price (**)		Number of warrants

August 9, 2012	August 9, 2015	$	0.07	$	0.17		79,012,640

(*)

Following the Share Consolidation and the Second Share Consolidation, every 15 previously issued warrants will be convertible into one Common Share of the Company.

(**)

The exercise price of these warrants is denominated in Canadian dollars and was translated to USD in the table above using the exchange rate as of December 31, 2014.

NOTE 14:

EARNINGS (LOSS) PER SHARE

Basic loss per share is calculated using the weighted average number of common shares outstanding during the period. Diluted loss per share is computed using the treasury stock method. Outstanding stock options of 416,000 (2013 – 658,533, 2012 – 1,177,407 ) and 5,267,509 (2013 - 5,491,042, 2012 – 97,423,015) warrants, after giving effect to share consolidation, were not included in the computation of diluted earnings (2013 and 2012 – loss) per share as their inclusion would be anti-dilutive.

NOTE 15:

CAPITAL MANAGEMENT

The Company is in the early stage of gas and petroleum exploration. The Company has negative cash flows from current operations. The Company's primary source of funds comes from the issuance of share capital. The Company does not use other sources of financing that require fixed payments of interest and principal and is not subject to any externally imposed capital requirements.

The Company defines its capital as share capital. To effectively manage the Company's capital requirements, the Company has a planning and budgeting process in place. The Company supervises the actual expenditure against the budget to manage its costs and commitments.

The Company's capital management objective is to maximize investment returns for shareholders within the context of relevant opportunities and risks associated with the Company's operating segment. Achieving this objective requires management to consider the underlying nature of exploration activities, availability of capital, the cost of various capital alternatives and other factors. Establishing and adjusting capital requirements is a continuous administrative process.

NOTE 16:

RELATED PARTY TRANSACTIONS

For the year ended December 31, 2014, the Company recognized $233 for advisory fees and operating expenses to private companies controlled by the directors or by officers of the Company (2013 - $386, 2012 - $357).

These transactions are in the ordinary course of business and are measured at the amount of consideration set and agreed by the related parties.

Compensation to directors and key management personnel:

The CEO, CFO, COO, V.P. Business Development, Head Geologist, V.P. Contracts and Regulation, and the directors are considered key management personnel.

	Year ended December 31,
	2014		2013		2012

Short-term employee benefits	$	212	$	1,133	$	1,071
Share-based compensation		22		16		613
	$	234	$	1,149	$	1,684

Number of people		2		6		7

Benefits in respect of key management persons (including directors) who are not employed by the Company:

	Year ended December 31,
	2014		2013		2012

Share-based compensation	$	38	$	32	$	298

Number of people		3		3		4

NOTE 17:

COMMITMENTS AND CONTINGENCIES

The Company has an agreement for the lease of the offices in Toronto, Canada for a period ending in 2015. In 2013, the lease agreement for the Company's office in Ramat Gan, Israel expired. The total future minimum lease payments under non-cancelable operating lease in Canada is $26.

NOTE 18:

REVENUES AND OTHER INCOME

The Company operated in one segment, the oil and gas business and conducted its operations in Israel with its head office in Canada. Details of the Company's revenues and other income (all of which were derived from Israel) are as follows:

	Year ended December 31,
	2014		2013		2012
Consulting	$	-	$	7	$	455
Operator fees		-		5		544
Income from farm-out		-		-		890
Other income		-		5		-
	$	-	$	17	$	1,889

For the year ended December 31, 2013, all $17 of revenues were derived from one customer.

NOTE 19:

GENERAL AND ADMINISTRATIVE EXPENSES

	Year ended December 31,
	2014			2013		2012

Payroll and related payments	$	307		$	945	$	759
Share-based compensation (recovery)		(32	)		32		887
Professional fees		122			968		2,397
Rent and office expenses		90			280		287
Depreciation		45			88		96
Travel		-			18		350
Insurance		30			48		31
Others		40			434		497

	$	602		$	2,813	$	5,304

NOTE 20:

FINANCE INCOME

On August 9, 2012, the Company completed a prospectus offering of 26,337,546 units for gross proceeds of $11,099 (before issuance expenses of $1,298 including the fair value of broker warrants $ 219). Each unit was priced at CAN$0.42 and consists of one Common Share and one warrant. Each warrant is exercisable to acquire 15 Common Shares at a price of CAN$0.60 per Common Share until August 9, 2015.

The warrants are denominated in Canadian dollars, while the functional currency of the Company is US dollars; therefore the fair value of the warrants was classified as a financial liability and the fair value of the warrants on the date of issuance was approximately $5,312. This financial liability is remeasured to fair value at the end of each period and changes in fair value is recorded in profit or loss. For the year ended December 31, 2014, the Company recorded a gain in financing income of $Nil (2013 - $3,013, 2012 - $2,299) as a result of remeasuring the fair value of the warrants to their fair value of zero as of December 31, 2014 and 2013.

ITEM 19 EXHIBITS

The following exhibits are included in this Amended Form 20-F:

Exhibit Number	Description
1.1	Articles of Conversion (1)
1.2	Articles of Continuance (1)
1.3	By-Laws (1)
1.4	Certificate and Articles of Amendment (3)
1.5	Certificate and Articles of Amendment (5)
4.1	2009 Stock Option Plan (2)
4.2	Nominee Agreement with BRM Group Ltd (4)
8.1	List of Subsidiaries (5)
12.1	Certificate of Principal Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (5)
12.2	Certificate of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (5)
13.1	Certificate of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (5)
13.2	Certificate of Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (5)
15.1	Letter from Kost Forer Gabbay and Kasierer regarding disclosure in Item 16F of this Annual Report on Form 20F (5)

(1)	Incorporated by reference from our current report on Form 8-K filed with the SEC on December 2, 2008.

(2)	Incorporated by reference from our Form 20-F shell company report filed with the SEC on September 4, 2009.

(3)	Incorporated by reference from our Form 20-F report filed with the SEC on January 22, 2010.

(4)	Incorporated by reference from our Form 20-F report filed with the SEC on February 3, 2011.

(5)	Filed as an exhibit hereto.

SIGNATURES

The Registrant hereby certifies that it meets all of the requirements for filing on Form 20-F/A and that it has duly caused and authorized the undersigned to sign this Form 20-F/A on its behalf.

ADIRA ENERGY LTD.


Per:	/s/ Gadi Levin
Name:	Gadi Levin
Title:	Chief Financial Officer

Date:	October 9, 2015

Exhibit 1.5

Industry Industrie Canada Canada

Certificate of Amendment Certificat de modification

Canada Business Corporations Act Loi canadienne sur les societes par actions

ADIRA ENERGY LTD.

Corporate name / Denomination sociale

449907-7

Corporation number / Numero de societe

I HEREBY CERTIFY that the articles of the JE CERT1FIE que les statuts de la societe

above-named corporation are amended under susmentionnee sont modifies aux termes de

section 178 of the Canada Business l'article 178 de la Loi canadienne sur les

Corporations Act as set out in the attached societes par actions. tel qu'il est indique dans les

articles of amendment. clauses modificatrices ci-jointes.

Canada

Marcie Girouard

Director / Directeur

2013-08-09

Date of Amendment (YYYY-MM-DD) Date de modification (AAAA-MM-JJ)

Industry Industrie Canada Canada Form 4 Articles of Amendment Canada Business Corporations Act (CBCA) (s. 27 or 177) Formulaire 4 Clauses modificatrices Loi canadienne sur ies societes par actions (LCSA) (art. 27 ou 177) Corporate name

Denomination sociale ADIRA ENERGY LTD.

Corporation number Numero de la societe 449907-7

The articles are amended as follows

Les statuts sont modifies de la fa?on suivante

The corporation amends the description of classes of shares as follows:

La description des categories d actions est modifiee comme suit:

By consolidating the issued and outstanding common shares on the basis of 1 common share for every 3 common shares held.

Declaration: I certify that I am a director or an officer of the coiporation.

Declaration : J’atteste que je sms un admimstrateur ou un dirigeant de la societe.

Original signed by / Original signe par

Alan Friedman

Alan Friedman 416-250-1955

Misrepresentation constitute: in cfoaoce and. or romm.m- conviction. a pxsou it bible to a fin* not axceedinB S5C0C or to imprisccmani for a term not exceodma six months or both (snbsccccc 2 50 (!) of the CBCA).

Fair* una fnuss declaration constitaa on* mfiactxm «see autaar. sar dotlaraoon d* cnlpafethM par pcotaduro scmrouro. t*t passibl* duns amend* maxima Is is 1000 S at d'nn ampcisocsamant tnr.nm?! d* six mois, ou l'uns do cat peine: (paragraphs 250(1) ds la LCSA).

You an providing mfeemotion required bv tbs CBCA Note that both the CBCA and the Privacy Act allc-w that mfcrmahcc to be disclosed to the public. It nhD be noted m personal mfixtnatioc fconi rmmbtc ICPPU-W9.

You: fbuinucaz des rtcsaigcatntets exagx par la LCSA. II esr a notar on* la LCSA at la LoisvrUt rtrattgntmtna perron neb permanent que de tals recseiasanueK :oiam divulguas sc public 11: sitont stodse: dans la banqne de ransaianeensers personnel: rr.cnere 1C/PPU-W9.

1C 3069 (2008/04)

Exhibit 8.1

The following table sets forth a list of our subsidiaries.

Name of Subsidiary	Jurisdiction of Incorporation
Adira Energy Holding Corp.1	Ontario, Canada
Adira CBM Ltd.2	Israel
Adira Oil Technologies Ltd.2	Israel
Adira Energy Israel Ltd.2	Israel
Adira Energy Israel Services Ltd.2	Israel
Adira GeoGlobal Ltd.3	Israel

Notes:

	1.	Adira Energy Holding Corp. is a wholly-owned direct subsidiary of the Registrant.
	2.	These companies are second-tier wholly-owned indirect subsidiaries of the Registrant, which are held through Adira Energy Holding Corp.
	3.	The Registrant holds an indirect 60% interest in Adira Energy GeoGlobal Ltd. through Adira Energy Holding Corp.

Exhibit 12.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gadi Levin, certify that:

1.	I have reviewed this amended annual report on Form 20-F/A of Adira Energy Ltd. (the “Company”) for the fiscal year ended December 31, 2014;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.	The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the Company's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the Company's internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting; and

5.	The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: October 9, 2015	/s/ Gadi Levin
	Gadi Levin
	Chief Financial Officer
	(principal executive officer)

Exhibit 12.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gadi Levin, certify that:

1.	I have reviewed this amended annual report on Form 20-F/A of Adira Energy Ltd. (the “Company”) for the fiscal year ended December 31, 2014;

2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this report;

4.	The Company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Company and have:

	(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)	Evaluated the effectiveness of the Company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

	(d)	Disclosed in this report any change in the Company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting; and

5.	The Company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Company’s auditors and the audit committee of the Company’s board of directors (or persons performing the equivalent functions):

	(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information; and

	(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting.

Date: October 9, 2015	/s/ Gadi Levin
	Gadi Levin
	Chief Financial Officer
	(principal financial officer)

Exhibit 13.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with Amendment No. 1 the Annual Report of Adira Energy Ltd. (the “Company”) on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Gadi Levin, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i)

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(ii)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 9, 2015	/s/ Gadi Levin
	Gadi Levin
	Chief Financial Officer
	(principal executive officer)

Exhibit 13.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with Amendment No. 1 to the Annual Report of Adira Energy Ltd. (the “Company”) on Form 20-F for the year ended December 31, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Gadi Levin, Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(i)

The Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934; and

(ii)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: October 9, 2015	/s/ Gadi Levin
	Gadi Levin
	Chief Financial Officer
	(principal financial officer)

Exhibit 15.1

Securities and Exchange Commission

100 F Street, N.E.

Washington, DC 20549

Ladies and Gentlemen:

The firm of Kost Forer Gabbay & Kasierer, A member of Ernst & Young Global, was previously the independent registered public accounting firm of Adira Energy Ltd. (the “Company”), and reported on the financial statements of the Company from December 31, 2009 to December 31, 2013. We have read Item 16F of Amendment No. 1 to the Company’s Annual Report for the year ended December 31, 2014 on Form 20-F, and are in agreement with the statements contained in that item.

Tel-Aviv, Israel	KOST FORER GABBAY & KASIERER
October 9, 2015	A Member of Ernst & Young Global

Kost Forer Gabbay & Kasierer

3 Aminadav St.

Tel-Aviv 6706703, Israel

Tel: +972-3-6232525

Fax: +972-3-5622555

ey.com

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