REG - Beacon Energy PLC - Final Results and Publication of Annual Report
27/06/2025 07:00
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RNS Number : 6518O Beacon Energy PLC 27 June 2025
27 June 2025
Beacon Energy plc
("Beacon Energy" or the "Company")
Final Results and Publication of Annual Report
Beacon Energy (AIM:BCE), announces its Final Results for the period ended 31
December 2024.
Copies of the Annual Report and Accounts have today been posted to
shareholders and made available on the Company's website at:
https://beaconenergyplc.com/ (https://beaconenergyplc.com/)
Mark Rollins, Non-Executive Chairman of Beacon Energy, commented:
"It has been an extremely challenging year for your Company. During the year
and subsequent period, the Board has worked tirelessly to stabilise the
Company's financial position and deliver on its strategy which is to pursue
the acquisition of value enhancing opportunities to develop and grow a
self-funding upstream oil & gas company.
The Board is presently in discussions on a range of opportunities that will
enable realisation of this strategy. Of these, the Company has signed a
non-binding Heads of Terms and has entered into a period of exclusivity with a
third party in relation to the potential acquisition of an interest in an
onshore gas development asset located in Europe (the "Transaction"). It is
anticipated that binding documentation related to the Transaction will be
agreed and an Admission Document published by the end September 2025. While
there can be no guarantee that agreement on such a Transaction will be
reached, we believe that we have identified a compelling, value accretive
opportunity and will continue our efforts to deliver on behalf of our
shareholders.
We thank shareholders for their continuing support and patience and look
forward to providing updates on our progress as we move through the rest of
the year."
As the Transaction would be considered a reverse transaction under Rule 14 of
the AIM Rules for Companies ("Aim Rules"), the Company has requested and been
granted the immediate suspension of trading of its shares pending publication
of an Admission Document. Shareholders should note that if the transaction
was not to proceed after 6 July 2025 then trading in the shares would remain
suspended as the shares were due to be suspended on 7 July 2025 in accordance
with Rule 15 of the AIM Rules, as previously announced.
The Company is required to make an acquisition, or acquisitions, which
constitutes a reverse takeover under AIM Rule 14 (including seeking
re-admission under the AIM Rules for Companies) by 6 January 2026.
Alternatively, within such time period, the Company can seek to become an
investing company pursuant to AIM Rule 8, which requires, inter alia, the
raising of at least £6 million and publication of an admission document. In
the event that the Company does not complete a reverse takeover under AIM Rule
14 within that time or seek re-admission to trading on AIM as an investing
company pursuant to AIM Rule 8, admission to trading on AIM of the Company's
ordinary shares would be cancelled.
Enquiries:
Beacon Energy plc +44 (0)20 7466 5000
Stewart MacDonald (CEO)
Strand Hanson Limited (Financial and Nominated Adviser) +44 (0)20 7409 3494
Rory Murphy / James Bellman
+44 (0)20 7466 5000
Buchanan (Financial PR)
Ben Romney / Barry Archer / George Pope
+44 (0)20 7186 9030
Tennyson Securities Limited (Broker)
Peter Krens
CHAIRMAN'S REPORT
Dear fellow shareholders,
On behalf of the Board of Directors, I hereby present the financial statements
of Beacon Energy plc ("Beacon" or the "Company") for the year ended 31
December 2024.
It has been an extremely challenging year for your Company. During the year
and subsequent period, the Board has worked tirelessly to stabilise the
Company's financial position and deliver on its strategy which is to pursue
the acquisition of value enhancing opportunities to develop and grow a
self-funding upstream oil & gas company.
Following the acquisition of Rhein Petroleum GmbH ("Rhein Petroleum") in April
2023, the Company immediately secured a drilling rig to drill the
Schwarzbach-2 development ("SCHB-2") well on the Erfelden field. While
significant operational challenges were encountered while drilling, the
wireline logs obtained confirmed that the SCHB-2 well encountered a 34-metre
gross interval containing 28 metres of oil-bearing net reservoirs in the
Pechelbronner-Schichten ("PBS") sandstones within the Stockstadt Mitte segment
of the Erfelden field. As a result of the encouraging electronic log results,
in November 2023, the Company updated its assessment of potential reserves in
the central part of the Erfelden field to 7.2 mmbbls (Best Estimate Case),
with range of 4.7 to 10.2 mmbbls (Low Case to High Case).
Following installation of a rod pump, production from the well stabilised at a
disappointing 40 barrels of oil per day - materially below expectations given
the results of the electronic logs. Various operations were undertaken during
H1 2024 to improve production rates including the drilling of a side track,
although production rates remained disappointing. Following extensive analysis
by our technical team, the most likely explanation for the continued poor
performance is a combination of residual reservoir damage in the upper section
of the Upper PBS reservoir (where the sidetrack remains close to the original
well bore which was invaded with drilling fluids) and poor permeability in
this particular area of the Erfelden field in the Lower PBS reservoir.
As a result of the poor production performance, the Company took the difficult
decision to place Rhein Petroleum into a formal process with its creditors
(akin to US Chapter 11 bankruptcy protection), as announced on 28 June 2024.
As part of the creditor process, the Company put forward a robust and fully
financed restructuring plan aimed at maximising cash generation from the Rhein
Petroleum business and delivering value for creditors. Given the poor (and
declining) production rates seen at the SCHB-2 well, the Company was unable to
put forward a restructuring offer which was agreeable to the Rhein Petroleum
creditors. In January 2025, the Company was informed that Rhein Petroleum's
creditor representative had completed a transaction to sell certain assets of
Rhein Petroleum to a third party and that the process to liquidate Rhein
Petroleum (the "Proposed Liquidation") would commence.
As a consequence of the Proposed Liquidation of Rhein Petroleum, Beacon
Energy was reclassified as an AIM Rule 15 cash shell effective 6 January
2025.
In order to preserve optionality, the Board have undertaken an extensive cost
reduction program to minimise expenditure prior to securing the Company's next
growth opportunity. As part of the Company's broader cost reduction
measures, the directors continue to defer or receive a significant proportion
of their fees in shares. In addition, Larry Bottomley and Stephen
Whyte agreed to leave the Company's board, effective 1 July 2024. I take
this opportunity to thank Larry and Steve for their valuable contributions to
Board deliberations. Our thanks go especially to Larry for stepping into the
CEO role in early 2022 and leading the Company through the reverse takeover
and subsequent re-listing of the Company in 2023. As a result, the board now
comprises Mark Rollins (Non-executive Chairman), Stewart
MacDonald (CEO), Ross Warner (Independent Non-executive Director) and Leo
Koot (Non-executive Director).
The Company's strategy continues to be the creation a self-funding upstream
oil & gas company taking advantage of growth opportunities resulting from
industry players as they reshape their portfolios.
The Board is presently in discussions on a range of opportunities that will
enable realisation of this strategy. Of these, the Company has signed a
non-binding Heads of Terms and has entered into a period of exclusivity with a
third party in relation to the potential acquisition of an interest in an
onshore gas development asset located in Europe (the "Transaction"). It is
anticipated that binding documentation related to the Transaction will be
agreed and an Admission Document published by the end of September 2025.
While there can be no guarantee that agreement on such a Transaction will be
reached, we believe that we have identified a compelling, value accretive
opportunity and will continue our efforts to deliver on behalf of our
shareholders.
As the Transaction would be considered a reverse transaction under Rule 14 of
the AIM Rules for Companies, the Company has requested and been granted the
immediate suspension of trading of its shares pending publication of an
Admission Document.
We thank shareholders for their continuing support and patience and look
forward to providing updates on our progress as we move through the rest of
the year.
Mark Rollins
Non-Executive Chairman
26 June 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Note For the year ended For the year ended
31 December 2024
31 December 2023
US$'000 Restated
US$'000
Income:
Operating Income - -
Other income - -
Total Income - -
Cost of goods sold - -
Operating expenses - -
Operating loss - -
Other administrative expenses 6 (2,545) (3,830)
Net loss before finance costs and taxation (2,545) (3,830)
Finance costs - -
Effects of exchange gain/loss (35) 125
At acquisition negative goodwill 11 - 3,556
Loss before tax (2,580) (149)
Tax expense 10 - (1)
Loss from continuing operations (2,580) (150)
Discontinued operations
Loss from discontinued operations net of tax 11 (16,004) (3,306)
Loss for the year (18,584) (3,456)
Other comprehensive income
Exchange differences on translation of foreign operations - (276)
Total comprehensive loss for the year attributable to owners of the parent (18,584) (3,732)
Basic loss per share attributable to owners of the parent during the year
(expressed in US cents per share)
7 (0.11) (0.04)
The Statement of Comprehensive Income has been prepared on the basis that all
operations are continuing.
The accompanying notes form an integral part of these Financial Statements.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Note As at As at
31 December 2024
31 December 2023
US$'000 US$'000
Assets
Non-current assets
Property, plant & equipment 12 - 20,336
Intangible assets - 29
Total non-current assets - 20,365
Current assets
Other receivables 23 875
Restricted cash 14 - 2,075
Cash and cash equivalents 866 2,754
Total current assets 889 5,704
Total assets 889 26,069
Liabilities
Trade and other payables 15 (1,189) (5,229)
Non-current liability 16 - (6,231)
Total liabilities (1,189) (11,460)
Net (liabilities)/assets (300) 14,609
Equity attributable to the owners of the parent
Share premium 13 68,344 65,245
Share reserve 3,101 2,801
Foreign Currency Translation Reserve - (276)
Accumulated deficit (71,745) (53,161)
Total shareholder funds (300) 14,609
The accompanying notes form an integral part of these Financial Statements.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Share premium Share reserve Foreign Currency Accumulated Total
Translation deficit equity
reserve
US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 January 2023 48,128 2,036 - (49,705) 459
Loss for the year to 31 December 2023 - - - (3,456) (3,456)
Other comprehensive income
Exchange differences on translation of foreign operations - - (276) - (276)
Total comprehensive income - - (276) (3,456) (3,732)
Transactions with equity shareholders of the parent
Proceeds from shares 17,713 - - - 17,713
issued
Cost of shares issued (596) - - - (596)
Share based payments - 765 - - 765
Balance at 31 December 2023 65,245 2,801 (276) (53,161) 14,609
Loss for the year to 31 December 2024 - - - (18,584) (18,584)
Other comprehensive income
Exchange differences on translation of foreign operations - - 276 - 276
Total comprehensive income - - 276 (18,584) (18,308)
Transactions with equity shareholders of the parent
Proceeds from shares 3,262 - - - 3,262
issued
Cost of shares issued (163) - - - (163)
Share based payments - 300 - - 300
Balance at 31 December 2024 68,344 3,101 - (71,745) (300)
The accompanying notes form an integral part of these Financial Statements.
CONSOLIDATED CASH FLOW STATEMENT
For the year ended For the year ended
31 December 2024
31 December 2023
US$'000 US$'000
Cash flows from operating activities:
Net loss for the year (18,584) (3,456)
Adjustments for:
Share based payments 300 765
Depreciation on property plant and equipment - -
Negative Goodwill - (3,556)
Tax expense - -
Interest paid - -
Change in working capital items:
Decrease/(Increase) in other receivables 538 3
(Decrease)/Increase in trade and other payables 662 (41)
Net cash used in operations (17,084) (6,285)
Cash flows from investing activities
Loss on discontinued operations 16,004 3,306
Adjustments cash transferred to Rhein (3,866) 2,667
Purchase of property, plant & equipment discontinued operation - (9,673)
Net cash used in investing activities 12,138 (3,700)
Cash flows from financing activities
Proceeds from issue of share capital 3,262 12,570
Share issue costs (163) (596)
Net cash generated by financing activities 3,099 11,974
Net (decrease)/increase in cash and cash equivalents (1,847) 1,989
Cash and cash equivalents, at beginning of the year 2,640 306
Effect of foreign exchange rate changes 73 345
Cash and cash equivalents, at end of the year 866 2,640
The accompanying notes form an integral part of these Financial Statements.
NOTES TO FINANCIAL STATEMENTS
1 Reporting Entity
Beacon Energy plc (the "Company") is domiciled in the Isle of Man. The
Company's registered office is at 55 Athol Street, Douglas, Isle of Man IM1
1LA. These consolidated financial statements comprise the Company and its
subsidiaries (together referred to as the "Group"). The Group is primarily
involved in the E&P business.
On 1 June 2024 Stewart MacDonald was appointed as the Chief Executive Officer.
Effective 1 July 2024 Larry Bottomley and Stephen Whyte resigned as
non-executive directors.
2 Basis of accounting
These consolidated financial statements have been prepared in accordance with
UK adopted International Financial Reporting Standards ("IFRS"). They were
approved and authorised for issue by the Company's Board of directors on 26
June 2025.
Details of the Group's accounting policies are included below:
Standards and amendments effective for periods beginning 1 January 2025 or
later
A number of new standards are effective for annual periods beginning after 1
January 2025 and earlier application is permitted; however, the Group has not
early adopted the new or amended standards in preparing these consolidated
financial statements.
The following amended standards and interpretations are not expected to have a
significant impact on the Group's consolidated financial statements:
· Lack of Exchangeability - Amendments to IAS 21 The
Effects of Changes in Foreign Exchange Rates
· Amendments to the Classification and Measurement of
Financial Instruments - Amendments to IFRS 9 Financial
Instruments and IFRS 7 Financial Instruments: Disclosures;
· IFRS 1 First-time Adoption of International Financial Reporting
Standards.
· IFRS 7 Financial Instruments: Disclosures and its accompanying
Guidance on implementing IFRS 7.
· IFRS 9 Financial Instruments.
· IFRS 10 Consolidated Financial Statements.
· IAS 7 Statement of Cash flows.
· IFRS 18 Presentation and Disclosure in Financial
Statements.
A. Basis of consolidation
i. Subsidiaries
Subsidiaries are entities controlled by the Group. The Group 'controls' an
entity when it is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns
through its power over the entity. The financial statements of subsidiaries
are included in the consolidated financial statements from the date on which
control commences until the date on which control ceases.
ii. Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealised income and expenses
arising from intra-group transactions, are eliminated. Unrealised gains
arising from transactions with equity accounted investees are eliminated
against the investment to the extent of the Group's interest in the investee.
Unrealised losses are eliminated in the same way as unrealised gains, but only
to the extent that there is no evidence of impairment.
B. Foreign currency
i. Foreign currency transactions
Transactions in foreign currencies are translated into the respective
functional currencies of Group companies at the exchange rates at the dates of
the transactions.
Monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the exchange rate at the reporting
date. Non-monetary assets and liabilities that are measured at fair value in a
foreign currency are translated into the functional currency at the exchange
rate when the fair value was determined. Non-monetary items that are measured
based on historical cost in a foreign currency are translated at the exchange
rate at the date of the transaction. Foreign currency differences are
generally recognised in profit or loss and presented within finance costs.
However, foreign currency differences arising from the translation of the
following items are recognised in Other Comprehensive Income (OCI):
- an investment in equity securities designated as at FVOCI (except
on impairment, in which case foreign currency differences that have been
recognised in OCI are reclassified to profit or loss);
- a financial liability designated as a hedge of the net investment
in a foreign operation to the extent that the hedge is effective; and
- qualifying cash flow hedges to the extent that the hedges are
effective.
ii. Foreign operations
The assets and liabilities of foreign operations, including goodwill and fair
value adjustments arising on acquisition, are translated into USD at the
exchange rates at the reporting date. The income and expenses of foreign
operations are translated into USD at the exchange rates at the dates of the
transactions.
Foreign currency differences are recognised in OCI and accumulated in the
translation reserve, except to the extent that the translation difference is
allocated to NCI.
When a foreign operation is disposed of in its entirety or partially such that
control, significant influence or joint control is lost, the cumulative amount
in the translation reserve related to that foreign operation is reclassified
to profit or loss as part of the gain or loss on disposal. If the Group
disposes of part of its interest in a subsidiary but retains control, then the
relevant proportion of the cumulative amount is reattributed to NCI. When the
Group disposes of only part of an associate or joint venture while retaining
significant influence or joint control, the relevant proportion of the
cumulative amount is reclassified to profit or loss.
C. Employee benefits
i. Short-term employee benefits
Short-term employee benefits are expensed as the related service is provided.
A liability is recognised for the amount expected to be paid if the Group has
a present legal or constructive obligation to pay this amount as a result of
past service provided by the employee and the obligation can be estimated
reliably.
ii. Share-based payment arrangements
The grant-date fair value of equity-settled share-based payment arrangements
granted to employees and other service providers is generally recognised as an
expense, with a corresponding increase in equity, over the vesting period of
the awards. The amount recognised as an expense is adjusted to reflect the
number of awards for which the related service and non-market performance
conditions are expected to be met, such that the amount ultimately recognised
is based on the number of awards that meet the related service and non-market
performance conditions at the vesting date. For share-based payment awards
with non-vesting conditions, the grant-date fair value of the share-based
payment is measured to reflect such conditions and there is no true-up for
differences between expected and actual outcomes.
D. Income tax
Income tax expense comprises current and deferred tax. It is recognised in
profit or loss except to the extent that it relates to a business combination,
or items recognised directly in equity or in OCI.
The Group has determined that interest and penalties related to income taxes,
including uncertain tax treatments, do not meet the definition of income
taxes, and therefore accounted for them under IAS 37 Provisions, Contingent
Liabilities and Contingent Assets.
i. Current tax
Current tax comprises the expected tax payable or receivable on the taxable
income or loss for the year and any adjustment to the tax payable or
receivable in respect of previous years. The amount of current tax payable or
receivable is the best estimate of the tax amount expected to be paid or
received that reflects uncertainty related to income taxes, if any. It is
measured using tax rates enacted or substantively enacted at the reporting
date. Current tax also includes any tax arising from dividends.
Current tax assets and liabilities are offset only if certain criteria are
met.
ii. Deferred tax
Deferred tax is recognised in respect of temporary differences between the
carrying amounts of assets and liabilities for financial reporting purposes
and the amounts used for taxation purposes. Deferred tax is not recognised
for:
- temporary differences on the initial recognition of assets or
liabilities in a transaction that is not a business combination and that
affects neither accounting nor taxable profit or loss;
- temporary differences related to investments in subsidiaries,
associates and joint arrangements to the extent that the Group is able to
control the timing of the reversal of the temporary differences and it is
probable that they will not reverse in the foreseeable future; and
- taxable temporary differences arising on the initial recognition
of goodwill.
Deferred tax assets are recognised for unused tax losses, unused tax credits
and deductible temporary differences to the extent that it is probable that
future taxable profits will be available against which they can be used.
Future taxable profits are determined based on the reversal of relevant
taxable temporary differences. If the amount of taxable temporary differences
is insufficient to recognise a deferred tax asset in full, then future taxable
profits, adjusted for reversals of existing temporary differences, are
considered, based on the business plans for individual subsidiaries in the
Group. Deferred tax assets are reviewed at each reporting date and are reduced
to the extent that it is no longer probable that the related tax benefit will
be realised; such reductions are reversed when the probability of future
taxable profits improves.
Unrecognised deferred tax assets are reassessed at each reporting date and
recognised to the extent that it has become probable that future taxable
profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to
temporary differences when they reverse, using tax rates enacted or
substantively enacted at the reporting date, and reflects uncertainty related
to income taxes, if any.
The measurement of deferred tax reflects the tax consequences that would
follow from the manner in which the Group expects, at the reporting date, to
recover or settle the carrying amount of its assets and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are
met.
E. Exploration expenditure
Costs incurred prior to acquiring the right to explore an area of interest are
expensed as incurred. Exploration and evaluation assets are intangible assets.
Exploration and evaluation assets represent the costs incurred on the
exploration and evaluation of potential hydrocarbon resources, and include
costs such as seismic acquisition and processing, exploratory drilling,
activities in relation to the evaluation of technical feasibility and
commercial viability of extracting hydrocarbons, and general administrative
costs directly relating to the support of exploration and evaluation
activities.
The Group assesses exploration and evaluation assets for impairment when facts
and circumstances suggest that the carrying amount may exceed its recoverable
amount. The recoverable amount is the higher of the assets fair value less
costs to sell and value in use. Assets are allocated to cash generating units
not larger than operating segments for impairment testing. Purchased
exploration and evaluation assets are recognised as assets at their cost of
acquisition or at fair value if purchased as part of a business combination.
They are subsequently stated at cost less accumulated impairment. Exploration
and evaluation assets are not amortised.
When proved reserves of oil and gas are identified and development is
sanctioned by management, the relevant capitalised expenditure is first
assessed for impairment and (if required) any impairment loss is recognised,
then the remaining balance is transferred to oil and gas properties.
Oil and gas properties and equipment are stated at cost, less accumulated
depreciation and accumulated impairment losses. The initial cost of an asset
comprises its purchase price or construction cost (if the asset was previously
classified as assets in development), any costs directly attributable to
bringing the asset into operation, the initial estimate of the decommissioning
obligation and, for qualifying assets (where relevant), borrowing costs. The
purchase price or construction cost is the aggregate amount paid and the fair
value of any other consideration given to acquire the asset.
Oil and gas properties are depreciated on a unit-of-production basis over the
total proved developed and undeveloped reserves of the field concerned, except
in the case of assets whose useful life is shorter than the lifetime of the
field, in which case, the straight-line method is applied.
F. Share capital
Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity. Income tax relating to transaction
costs of an equity transaction is accounted for in accordance with IAS 12.
G. Impairment
At each reporting date, the Group reviews the carrying amounts of its
non-financial assets (other than deferred tax assets) to determine whether
there is any indication of impairment. If any such indication exists, then the
asset's recoverable amount is estimated.
Impairment losses are recognised in profit or loss. They are allocated first
to reduce the carrying amount of any goodwill allocated to the Cash Generating
Unit (CGU), and then to reduce the carrying amounts of the other assets in the
CGU on a pro rata basis.
H. Fair value measurement
'Fair value' is the price that would be received to sell an asset or paid to
transfer a liability in an orderly transaction between market participants at
the measurement date in the principal or, in its absence, the most
advantageous market to which the Group has access at that date. The fair value
of a liability reflects its non-performance risk.
A number of the Group's accounting policies and disclosures require the
measurement of fair values, for both financial and non-financial assets and
liabilities.
When one is available, the Group measures the fair value of an instrument
using the quoted price in an active market for that instrument. A market is
regarded as 'active' if transactions for the asset or liability take place
with sufficient frequency and volume to provide pricing information on an
ongoing basis.
If there is no quoted price in an active market, then the Group uses valuation
techniques that maximise the use of relevant observable inputs and minimise
the use of unobservable inputs. The chosen valuation technique incorporates
all of the factors that market participants would take into account in pricing
a transaction.
If an asset or a liability measured at fair value has a bid price and an ask
price, then the Group measures assets and long positions at a bid price and
liabilities and short positions at an ask price.
The best evidence of the fair value of a financial instrument on initial
recognition is normally the transaction price - i.e. the fair value of the
consideration given or received. If the Group determines that the fair value
on initial recognition differs from the transaction price and the fair value
is evidenced neither by a quoted price in an active market for an identical
asset or liability nor based on a valuation technique for which any
unobservable inputs are judged to be insignificant in relation to the
measurement, then the financial instrument is initially measured at fair
value, adjusted to defer the difference between the fair value on initial
recognition and the transaction price. Subsequently, that difference is
recognised in profit or loss on an appropriate basis over the life of the
instrument but no later than when the valuation is wholly supported by
observable market data or the transaction is closed out.
I. Operating Income
Operating income represents revenue from contracts with customers and is
recognised when control of the goods or services are transferred to the
customer at an amount that reflects the consideration to which the Group
expects to be entitled in exchange for those goods or services. The Group has
concluded that it is the principal in all of its revenue arrangements since it
controls the goods or services before transferring them to the customer.
J. Going concern
The financial statements have been prepared on a going concern basis.
The Group monitors its cash position, cash forecasts and liquidity on a
regular basis and takes a conservative approach to cash management.
As at 31 December 2024, the Company had available cash resources of US$0.86
million and no debt. Monies are owed (related to unpaid fees) to the Directors
and a former Director and (related to the Earn Out associated with the Rhein
Petroleum acquisition) the Company's largest shareholder, Tulip Oil Holdings
Limited. Agreement has been reached to defer the payment of such monies until
the Company has secured its next growth opportunity.
As a result of the poor production performance, the Company took the difficult
decision to place Rhein Petroleum into a formal process with its creditors
(akin to US Chapter 11 bankruptcy protection), as announced on 28 June 2024.
As part of the creditor process, the Company put forward a robust and fully
financed restructuring plan aimed at maximising cash generation from the Rhein
Petroleum business and delivering value for creditors. Given the poor
production rates seen at the SCHB-2 well, the Company was unable to put
forward a restructuring offer which was agreeable to the Rhein Petroleum
creditors. In January 2025, the Company was informed that Rhein Petroleum's
creditor representative had completed a transaction to sell certain assets of
Rhein Petroleum to a third party and that the process to liquidate Rhein
Petroleum (the "Proposed Liquidation") would commence.
As a result of material cost reduction initiatives previously announced, and
the deferral of monies owed to Directors, a former Director and Tulip Oil,
Management's base case suggests that the Company has sufficient liquidity to
progress, and complete, an acquisition and fund raise by end 2025.
Management have also considered a number of downside scenarios, including
scenarios where a transaction cannot be agreed or where the costs of executing
a transaction increase materially.
Potential mitigants include further deferral and/or reduction of expenditure
and raising additional funding.
As a result, the Directors are of the opinion that the Group is likely to
operate as a going concern for at least the next twelve months from the date
of approval of these financial statements.
Nonetheless, these conditions indicate the existence of a material uncertainty
which may cast doubt on the Group's ability to continue as a going concern.
The financial statements do not include the adjustments that would be required
if the Group were unable to continue as a going concern.
3 Functional and presentation currency
These consolidated financial statements are presented in US Dollars ("USD" or
"US$"), which is the Group's functional currency. All amounts have been
rounded to the nearest thousand, unless otherwise indicated.
4 Use of judgements and estimates
In preparing these consolidated financial statements, management has made
judgements and estimates that affect the application of the Group's accounting
policies and the reported amounts of assets, liabilities, income and expenses.
Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to estimates are recognised prospectively.
A. Judgements
Information about judgements made in applying accounting policies that have
the most significant effects on the amounts recognised in the financial
statements is included in the following notes:
- Note 18 - consolidation: whether the Group has de facto control over an
investee.
- Note 12 - impairment considerations in relation to property, plant and
equipment.
B. Assumptions and estimation uncertainties
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the group's accounting
policies. The areas involving a higher degree of judgement or complexity, or
areas where assumptions and estimates are significant to the consolidated
financial statements, are disclosed below:
Share based payments (note 8)
The Group has made awards of options and warrants over its unissued capital.
The valuation of these options and warrants involve making a number of
estimates relating to price volatility, future dividend yields, expected life
and forfeiture rates.
i) Measurement of fair values
A number of the Group's accounting policies and disclosures require the
measurement of fair values, for both financial and non-financial assets and
liabilities. The Group has an established control framework with respect to
the measurement of fair values.
When measuring the fair value of an asset or a liability, the Group uses
observable market data as far as possible. Fair values are categorised into
different levels in a fair value hierarchy based on the inputs used in the
valuation techniques as follows.
- Level 1: quoted prices (unadjusted) in active markets for
identical assets or liabilities.
- Level 2: inputs other than quoted prices included in Level 1 that
are observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
- Level 3: inputs for the asset or liability that are not based on
observable market data (unobservable inputs).
If the inputs used to measure the fair value of an asset or a liability fall
into different levels of the fair value hierarchy, then the fair value
measurement is categorised in its entirety in the same level of the fair value
hierarchy as the lowest level input that is significant to the entire
measurement.
The Group recognises transfers between levels of the fair value hierarchy at
the end of the reporting period during which the change has occurred.
Decommissioning provision (note 16)
The Group has estimated the present value of the amounts that will be required
in relation to the future decommissioning of its oil and gas operation. This
is based on security amounts agreed with the mining authority in the
jurisdiction, however, there are estimation uncertainties in respect of the
inflation and discount rates used.
5 Operating Segments
Operating segments are reported in a manner consistent with the internal
reporting provided to the Chief Operating Decision Maker ("CODM"). The CODM,
who is responsible for allocating resources and assessing performance of the
operating segments and make strategic decisions, has been identified as the
Directors of the Group. In the opinion of the Directors, the operations of
the Group comprise one operating segment comprising oil and gas exploration
and production operations. As a result, the Group considers that it only has
one reportable segment, and the Directors consider that the primary financial
statements presented substantially reflect all the activities of the
Company.
6 Administrative expenses
Administration fees and expenses consist of the following:
2024 2023
December December
US$'000 US$'000
Audit fees 61 47
Professional fees 324 418
Administration costs 129 816
Employee share-based payments (Note 9) 141 19
Director share-based payments (Note 9) 1,271 1,010
Directors' fees (Note 9) 595 661
Travel and entertainment 24 28
Acquisition amounts written off - 831
Other administrative expenses 2,545 3,830
7 Earnings per share
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
2024 2023
December December
Loss attributable to owners of the Group (USD thousands) (18,584) (3,456)
Weighted average number of ordinary shares in issue (thousands) 17,695,389 8,863,248
Loss per share (US cents) (0.11) (0.04)
In accordance with International Accounting Standard 33 'Earnings per share',
no diluted earnings per share is presented as the Group is loss making.
8 Share-based payment arrangements
The following is a summary of the share options and warrants outstanding and
exercisable as at 31 December 2024, 31 December 2023 and 31 December 2022, and
the changes during each year:
Number of options and warrants Weighted average exercise price (pence)
Outstanding and exercisable at 31 December 2022 613,268,824 0.43
Outstanding and exercisable at 31 December 2023 3,295,965,536 0.15
Outstanding and exercisable at 31 December 2024 3,522,872,036 0.13
The above weighted average exercise prices have been expressed in pence and
not cents due to the terms of the options and warrants. The following share
options or warrants were outstanding and exercisable in respect of the
ordinary shares:
Grant Date Expiry Date 31 December Issued Expired 31 December Exercise Price
2022 /Cancelled 2023
Warrants
10.12.20 09.12.23 545,455 - (545,455) - 0.22p
31.03.21 31.03.26 38,511,644 - - 38,511,644 0.00p
Consolidation (35,151,395) - 490,910 (34,660,485)
19.04.21 19.04.24 21,488,500 - - 21,488,500 2.60p
19.04.21 19.04.26 24,064,620 - - 24,064,620 2.60p
26.07.22 27.07.25 500,000,000 - - 500,000,000 0.13p
11.04.23 11.04.28 - 1,325,753,299 - 1,325,753,299 0.11p
20.09.23 20.09.28 - 116,700,000 - 116,700,000 0.15p
Options
01.10.18 01.10.23 4,500,000 - (4,500,000) - 2.00p
01.02.20 01.02.25 31,250,000 - (31,250,000) - 0.30p
01.02.20 01.02.25 31,250,000 - (31,250,000) - 0.30p
Consolidation (60,300,000) - 60,300,000 -
19.04.21 19.01.26 27,110,000 - (27,110,000) - 2.60p
17.03.22 17.03.27 30,000,000 - - 30,000,000 0.30p
19.12.22 19.12.27 - 188,803,430 - 188,803,430 0.00p
19.12.22 19.12.27 - 581,738,888 - 581,738,888 0.11p
20.12.23 20.12.28 - 266,972,202 - 266,972,202 0.15p
20.12.23 20.12.28 - 236,593,438 - 236,593,438 0.15p
613,268,824 2,716,561,257 (33,864,545) 3,295,965,536
Grant Date Expiry Date 31 December Issued Expired 31 December Exercise Price
2023 /Cancelled 2024
Warrants
31.03.21 31.03.26 38,511,644 - - 38,511,644 0.00p
Consolidation (34,660,485) - - (34,660,485)
19.04.21 19.04.24 21,488,500 - (21,488,500) - 2.60p
19.04.21 19.04.26 24,064,620 - - 24,064,620 2.60p
26.07.22 27.07.25 500,000,000 - - 500,000,000 0.13p
11.04.23 11.04.28 1,325,753,299 - - 1,325,753,299 0.11p
20.09.23 20.09.28 116,700,000 - - 116,700,000 0.15p
28.02.24 28.02.29 - 248,400,000 - 248,400,000 0.05p
Options
17.03.22 17.03.27 30,000,000 - - 30,000,000 0.30p
19.12.22 19.12.27 188,803,430 - - 188,803,430 0.00p
19.12.22 19.12.27 581,738,888 - - 581,738,888 0.11p
20.12.23 20.12.28 266,972,202 - - 266,972,202 0.15p
20.12.23 20.12.28 236,593,438 - - 236,593,438 0.15p
3,295,965,536 248,400,000 (21,488,500) 3,522,877,036
The options and warrants issued during the period were valued using the
Black-Scholes valuation method and the assumptions used are detailed below.
The expected future volatility has been determined by reference to the
historical volatility:
Grant date Share price at grant Exercise price Volatility Option life Dividend yield Risk-free investment rate Fair value per option
19.12.22 0.175p 0.00p 237% 5 years 0% 3.503% 0.15p
19.12.22 0.175p 0.11p 237% 5 years 0% 3.503% 0.09p
20.12.23 0.95p 0.15p 98% 5 years 0% 3.525% 0.05p
The Group recognised US$300,000 (2023: US$765,000) relating to equity-settled
share-based payment transactions during the year arising from Option or
Warrant grants, which was charged US$Nil (2023: US$Nil) in respect of services
performed in connection with the issue of new shares charged to share premium,
US$Nil (2023: US$765,000) in respect of directors' fees and US$Nil reversed
(2023: US$Nil) in respect of employee costs to the income statement.
The 21,488,500 options granted on 19 April 2021 vested on 19 April 2024.
Vesting of the options is subject to the option holder providing continuous
service during the vesting period and there are no other performance
conditions attached to the options.
For the share options and warrants outstanding as at 31 December 2024, the
weighted average remaining contractual life is 3 years (2023: 4 years).
9 Employee benefits (including directors)
The group employed an average of 4 individuals during the period, including
the directors (2023: 14).
2024 2023
December December
US$'000 US$'000
Directors' remuneration (see below) 595 661
Wages cost - 958
Share based payments - Directors (see below) 1,271 1,010
Share based payments - Employees 141 19
2,007 2,648
Key management of the Group are considered to be the Directors.
The remuneration of the directors during the period ended 31 December 2024 was
as follows:
Short term employee benefits Social security payments Share based payments
Pension contribution Total
2024
US$'000 US$'000 US$'000 US$'000 US$'000
Ross Warner 40 - - 11 51
Mark Rollins 60 - - 201 261
Stewart MacDonald 260 32 32 342 666
Steve Whyte (resigned 1/7/24) 33 2 - 59 94
Larry Bottomley (resigned 1/7/24) 88 8 - 599 695
Leo Koot 40 - - 59 99
Total Key Management 521 42 32 1,271 1,866
The remuneration of the directors during the period ended 31 December 2023 was
as follows:
Short term employee benefits Social security payments Share based payments
Pension contribution Total
2023
US$'000 US$'000 US$'000 US$'000 US$'000
Ross Warner 45 - - 71 116
Mark Rollins 75 - - 152 227
Stewart MacDonald (appointed 11/4/24) 196 22 23 201 442
Steve Whyte 45 4 - 71 120
Larry Bottomley 200 21 - 515 736
Leo Koot (appointed 11/4/24) 30 - - - 30
Total Key Management 591 47 23 1,010 1,671
10 Income tax expense
The Parent Company is resident for tax purposes in the Isle of Man and is
subject to Isle of Man tax at the current rate of 0% (2023: 0%). During the
period and in the prior year, no subsidiaries were subject to material
corporation tax.
Taxation reconciliation
The charge for the year can be reconciled to the loss per the consolidated
statement of comprehensive income as follows:
2024 2023
December December
US$'000 US$'000
Loss before income tax (18,584) (3,456)
Tax on loss at the weighted average corporate tax rate of 0% (2023: 0%) - -
Tax - German authorities - 1
Total income tax expense - 1
The deferred tax asset has not been recognised, in accordance with IAS 12. The
Group does not have a material deferred tax liability at the year end.
11 Discontinued Operations
On 11 April 2023, the Company acquired the entire issued share capital of
Rhein Petroleum GmbH, an upstream oil and gas business operating in Germany.
This transaction can be best described as a business combination under IFRS3.
As a result of the poor production performance, the Company took the difficult
decision to place Rhein Petroleum into a formal process with its creditors
(akin to US Chapter 11 bankruptcy protection), as announced on 28 June 2024.
For the purposes of the financial statements, the Company has considered this
date to be the date of loss of control of its subsidiary as from this point
the Company was unable to direct the actions of the entity.
As part of the creditor process, the Company put forward a robust and fully
financed restructuring plan aimed at maximising cash generation from the Rhein
Petroleum business and delivering value for creditors. Given the poor
production rates seen at the SCHB-2 well, the Company was unable to put
forward a restructuring offer which was agreeable to the Rhein Petroleum
creditors. In January 2025, the Company was informed that Rhein Petroleum's
creditor representative had completed a transaction to sell certain assets of
Rhein Petroleum to a third party and that the process to liquidate Rhein
Petroleum (the "Proposed Liquidation") would commence.
From the date of loss of control, the investment in this entity was treated as
an unconsolidated investment. However, as no further amounts were receivable
back from this entity, this investment is held at nil value and when the
creditor processes are concluded after the year-end, this entity will be
treated as fully disposed of.
As a result of this Rhein has been accounted for as a discontinued operation.
And the loss on the discontinued operation is as per below:
2024 2023
Loss on Discontinued operations $'000 $'000
Other Income in relation to discontinued operations 702 971
Expenses in relation to discontinued operations (1,591) (4,277)
Unaudited losses generated by discontinued operations* (889) -
Loss on disposal of subsidiary** (15,115) -
Total loss on discontinued operations (16,004) (3,306)
*No tax was payable in relation to this operation so this represents both the
pre- and post-tax loss.
** The audited net assets of the discontinued operations at 31 December 2023
was $11,850,000. Due to the loss of control of the subsidiary in the period,
it is not possible to prepare an audited financial position for the
discontinued operations at the date the Group lost control, however, the total
loss on disposal is known as this is the net assets held by the Group at the
previous period end plus the additional amounts provided to this entity which
are no longer recoverable.
At acquisition negative goodwill 2023
Goodwill
$'000
Consideration transferred at Fair value 5,143
Less: Net identifiable liabilities at acquisition 18,769
Goodwill at acquisition 23,912
Less: adjustments of loan balance acquired (27,468)
Negative goodwill at reporting date (3,556)
12 Property, plant and equipment
Oil and gas properties and equipment Oil and gas properties and equipment
2024 2023
US$'000 US$'000
Cost 20,762 -
Acquired in year - 20,762
Disposal in the year (20,762) -
Cost at 31 December - 20,762
Depreciation
Depreciation at 1 January (426) -
Depreciation charge - (426)
Depreciation write off 426
Depreciation at 31 December 2023 - (426)
Net book value - 1 January 20,336 -
Net book value - 31 December - 20,336
13 Capital and reserves
All shares are Nil Coupon fully paid and each ordinary share carries one vote.
No warrants have been exercised at the reporting date.
Allotted, called-up and fully paid: Number Pence per share Share premium
US$'000
Balance at 1 January 2023 1,527,614,008 48,128
Cancelled shares (1,527,614,008)
11 April 2023-Equity placing 10,507,679,620 0.11 12,639
15 September 2023-Equity placing 2,867,000,000 0.15 5,074
Cost of issue (596)
Balance at 31 December 2023 13,374,679,620 65,245
Cancelled shares
28 February 2024-Equity placing 5,137,000,000 0.14 3,262
Cost of issue (163)
Balance at 31 December 2024 18,511,679,620 68,344
14 Restricted cash
As a result of Rhein Petroleum liquidation commencement, the Group has no
restricted cash. At reporting date, the Group had US$Nil (2023: US$2,075,000)
restricted cash, which is backing guarantees to the mining authority related
to future decommissioning.
15 Trade and other payables
Trade and other payables are obligations to pay for goods or services that
have been acquired in the ordinary course of business. Accounts payable are
classified as current liabilities if payment is due within one year or less
(or in the normal operating cycle of the business if longer). If not, they are
presented as non-current liabilities. Trade payables are recognised initially
at fair value, and subsequently measured at amortised cost using the effective
interest method. The majority of current liabilities and accruals balance
relates to monies owed (related to unpaid fees) to directors, a former
director and (related to the Earn Out associated with Rhein Petroleum) the
Company's largest shareholder, Tulip Oil Holdings.
2024 2023
December December
US$'000 US$'000
Trade payables 80 4,858
Current liability 157 -
Accruals and other payables 952 371
1,189 5,229
16 Non-current liabilities
Non-current liabilities are US$Nil in the current year. This is due to the
loss of control of Rhein Petroleum. The non-current liabilities as at 31
December 2023 consist of a loan with Tulip Oil Holding B.V and provisions in
relation to future abandonment and decommissioning costs.
Audited Audited
Outstanding at 31 Dec 2024
Outstanding at 31 Dec 2023
US$'000 US$'000
Tulip Oil Holding loan payable - 3,724
Provision for decommissioning - 2,412
Other non-current liabilities - 95
- 6,231
17 Risk Management
Financial Risks
The Group's activities expose it to a variety of financial risks: market risk
(including foreign currency exchange risk and interest rate risk), credit risk
and liquidity risk. The Board of Directors seek to identify and evaluate
financial risks.
Market risk
A. Foreign currency exchange risk
Foreign exchange risk arises because the Group entities enter into
transactions in currencies that are not the same as their functional
currencies, resulting in gains and losses on retranslation into US Dollars. It
is the Group's policy to ensure that individual Group entities enter into
local transactions in their functional currency wherever possible and that
only surplus funds over and above working capital requirements should be
transferred to the treasury of the Parent Company. The Group and Company
considers this policy minimises any unnecessary foreign exchange exposure.
Despite this policy, the Group cannot avoid being exposed to gains or losses
resulting from foreign exchange movements, at the reporting date a 5% decrease
in the strength of the US Dollar would result in a corresponding reduction of
US$1,650 (2023: US$559,000) in the net assets of the Group.
B. Cash flow interest rate risk
The Group's cash and cash equivalents are invested at short term market
interest rates. As market rates are low, the Group is not subject to
significant cash flow interest rate risk and no sensitivity analysis is
provided. The Group is also not subject to significant fair value interest
rate risk.
2024 December 2023 December
US$'000 US$'000
Cash & Cash Equivalents
USD 21 3
GBP 845 2,640
EUR - 2,186
Total Financial Assets 866 4,829
Trade & other payables
USD 952 249
GBP 80 128
EUR 157 4,852
Total Financial Liabilities 1,189 5,229
Credit risk
Credit risk arises on investments, cash balances and receivable balances. The
amount of credit risk is equal to the amounts stated in the Statement of
Financial Position for each of these assets. Cash balances and transactions
are limited to high-credit-quality financial institutions. There are no
impairment provisions as at 31 December 2024 (31 December 2023: nil).
Liquidity risk
Prudent liquidity risk management implies maintaining sufficient cash and
marketable securities, the availability of funding through an adequate amount
of committed credit facilities and the ability to close out market positions.
The Group has adopted a policy of maintaining surplus funds with approved
financial institutions.
Management of liquidity risk is achieved by monitoring budgets and forecasts
against actual cash flows. Should the Group enter into borrowings during the
year, management monitor the repayment and servicing of these arrangements
against the contractual terms and reviewed cash flows to ensure that
sufficient cash reserves were maintained.
Capital Risks
The Directors determine the appropriate capital structure of the Group,
specifically, how much is raised from shareholders (equity) and how much is
borrowed from financial institutions (debt), in order to finance the Group's
business strategy. The Group's policy in the long term is to seek to maintain
the level of equity capital and reserves to maintain an optimal financial
position and gearing ratio which provides financial flexibility to continue as
a going concern and to maximise shareholder value. The capital structure of
the Group consists of shareholders' equity together with net debt (where
relevant). The Group's funding requirements are met through a combination of
debt, equity and operational cash flow.
18 List of subsidiaries and associates
The parent of the Group has shareholdings in the following entities:
Name Interest 2024 Interest 2023 Country of incorporation Nature of business
Advance Energy TL Limited 100% 100% UK Dormant
Eagle Gas Limited 25% 25% UK Oil and gas exploration
Beacon Energy RP Limited 100% 100% Isle of Man Dormant
Rhein Petroleum GmbH* 100% 100% Germany Oil and gas (insolvent)
* For the purposes of these financial statements, the Company has considered
the date of 28 June 2025 as the date of loss of control of its subsidiary.
19 Commitments
There were no capital commitments authorised by the Directors or contracted
other than those provided for in these financial statements as at 31 December
2024 (31 December 2023: None).
20 Related parties
Parties are considered to be related to the Group if the Group has the
ability, directly or indirectly, to control the party or exercise significant
influence over the party in making financial and operating decisions, or vice
versa, or where the Group and the party are subject to common control or
common significant influence.
Related parties may be individuals (being members of key management personnel,
significant shareholders and/or their close family members) or other entities
and include entities which are under significant influence of related parties
of the Group where those parties are individuals, and post-employment benefit
plans which are for the benefit of employees of the Group or of any entity
that is a related party of the Group.
Details of Directors remuneration are disclosed in Note 9 Directors
Remuneration. For details of any related party transactions entered into after
the year-end please refer to Note 21 Subsequent Events.
21 Subsequent events
On 6 January 2025, the Company announced that as a consequence of the proposed
liquidation of Rhein Petroleum, it has become an AIM Rule 15 cash shell with
effect from that day.
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