REG - Block Energy PLC - Final Results
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RNS Number : 3499G Block Energy PLC 01 June 2026
1 June 2026
Block Energy Plc
("Block" or the "Company")
Audited Results for the Year Ended 31 December 2025 and Strategic Update
Block Energy plc, the international oil and gas company with assets in Georgia
and offshore Gabon, announces its audited results for the year ended 31
December 2025. The period was defined by resilient operational delivery in a
lower oil price environment, third-party validation across the Company's
Georgian portfolio and, following the year end, the establishment of a new
growth platform in the fairway of the Gulf of Guinea.
Highlights:
Strategic validation through partner-funded growth
· Project IV / XIQ: announced the farm-out of XIQ to Aspect Georgia,
LLC in September 2025, with completion in January 2026 following Government of
Georgia approval; Block is fully carried through a staged work programme
estimated at approximately US$95 million.
· Project III: acquired the operational rights to South Dome in March
2025 for nil cost, adding 574 BCF of 2U gross prospective resources, and
signed non-binding heads of terms with Sanning in December 2025, which
progressed after the year end into the binding Framework Agreement announced
in April 2026.
· The April 2026 Sanning Framework Agreement provides for a 51%
farm-out and up to US$75 million in carry across appraisal and early
facilities workstreams, subject to definitive documentation, approvals and
project elections.
o Acquired a 10% interest in the enlarged XIQ PSC in March 2025 through GOG
SLADS Limited for a US$77,000 contribution to Block's share of the 2025 work
programme; following the Aspect farm-out, Block's XIQ participating interest
is 9.5%.
o Successfully executed the CCS pilot injection of CO₂ in August 2025;
immediate post-injection analysis indicated 70% to 100% mineralisation and the
February 2026 OPC report confirmed complete mineralisation within one to three
months.
o Drilled the KRT-39_ST sidetrack on Project I in September 2025 at
approximately 40% of conventional sidetrack cost, validating the slim-hole
drilling concept and establishing a lower-cost base across Project I and
potentially Project II.
o Continued subsurface and engineering work on Project II in preparation for
a structured farm-out or asset-level financing process.
o Continued subsurface evaluation of exploration prospectivity in Block IX.
o Together, Aspect, Sanning and CCS provide meaningful external and
technical validation of Block's partner-funded growth model.
· New offshore Gabon platform
o Post year-end, Block announced a strategic entry into offshore Gabon
through a secured convertible loan to Pilgrim Exploration Limited, providing a
76.5% indirect economic interest in the Ndjila (CD2) and Mpari (CD3) PSCs.
o The PSCs cover 5,331 km² and contain four historical oil discoveries -
Iguega, Topaz, Ekouata and Pilote - alongside material pre- and post-salt
exploration potential in an established Gulf of Guinea hydrocarbon fairway.
· Operational and financial resilience
o Delivered 275,995 operational man-hours with no Lost Time Incidents (2024:
283,205 operational man-hours with one LTI).
o Existing production was above budget and in line with the 2022 ERCE reserve
report: 122,474 barrels of crude oil (2024: 131,579 barrels), 245 MMCF of gas
(2024: 274 MMCF) and average annual production of 447 boepd (2024: 485 boepd).
o Revenue of US$6.057 million (2024: US$7.533 million), reflecting a
materially lower oil price backdrop, with Brent averaging approximately
US$69/bbl in 2025 compared with approximately US$81/bbl in 2024.
· EBITDA was negative US$0.94 million (2024: positive US$1.06 million),
in line with expectations in the lower price environment and achieved while
continuing to progress Project III, Project IV, CCS and new venture activity.
o Year-end cash improved to US$1.493 million (31 December 2024: US$1.136
million), supported by the successful completion in November 2025 of the
Group's first equity fundraise since 2020, which raised gross proceeds of
£1.5 million.
o Year-end crude oil inventory of 9,731 barrels as at 31 December 2025 (31
December 2024: 11,060 barrels).
o Cost discipline was maintained despite higher strategic project activity,
reflecting the Company's continued drive to lower-cost operations,
partner-funded work programmes and asset-level financing.
o Following the year end, the associated share placing and retail share offer
to support the Gabon entry raised approximately US$6.3 million before
expenses, with all General Meeting resolutions passed on 18 May 2026 and the
conditional fundraise shares admitted to AIM.
o Subsequent to year end, commodity prices have strengthened materially from
the 2025 average. Combined with strong operational performance and enhanced
efficiencies, Block is positioned to benefit from a better commodity price
environment while retaining the discipline developed during the lower-price
period.
o 2026 priorities include progressing definitive documentation and approvals
for the Sanning transaction, commencing the Aspect-funded XIQ seismic
programme, advancing CCS commercial feasibility studies and launching the
Gabon technical programme.
Block Energy plc's Chief Executive Officer, Paul Haywood, said:
"2025 was a year of strategic validation for Block. In Georgia, the Aspect
farm-out on XIQ and the non-binding heads of terms with Sanning on Project III
demonstrated that credible counterparties recognise the scale and quality of
the portfolio we continue to build. Post year-end, Project III progressed to
the binding Framework Agreement with Sanning, bringing the prospect of a
substantial carried appraisal and early facilities programme, with Aspect
planning to execute its 3D seismic acquisition, in XIQ.
Our strategy is built on capital discipline, selectively deploying cash
generated from existing production, advancing high-impact opportunities
through asset-level funding, and protecting shareholders from disproportionate
equity dilution.
Following the year end, our entry into offshore Gabon opened a new front for
the Company in an established Gulf of Guinea hydrocarbon fairway. The Ndjila
and Mpari PSCs bring meaningful historical discoveries, material exploration
upside and a clear route to asset-level financing, complementing our Georgian
production base and partner-funded growth strategy.
The 2025 financial result reflects a materially lower oil price environment,
but cash improved, costs remained controlled and the business has been
re-wired for sustainability through commodity cycles. With commodity prices
materially stronger than the 2025 average, our focus in 2026 is execution:
converting partnerships, assets and technical milestones into visible
operational progress and shareholder value."
ENDS
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER
THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF
ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED. ON
PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS
INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.
For further information please visit http://www.blockenergy.co.uk/ or contact:
Paul Haywood Block Energy plc Tel: +44 (0)20 3468 9891
(Chief Executive Officer)
Neil Baldwin SPARK Advisory Partners Limited Tel: +44 (0)20 3368 3554
(Nominated Adviser)
Peter Krens Tennyson Securities Tel: +44 (0)20 7186 9030
(Corporate Broker)
Mark Antelme Celicourt Communications Tel: +44 (0)20 8434 2643
Philip Dennis
(Financial PR Adviser)
Notes to Editors
Block Energy plc is an AIM-quoted independent international oil and gas
company with production, development, appraisal and exploration assets in
Georgia and a post year-end offshore Gabon growth platform.
In Georgia, the Company holds interests in seven Production Sharing Contracts
covering an area of 4,256 km² in the central part of the country. These
include the XIB and XIF licences, which host Project III's 2.77 TCF of 2C
gross contingent gas resources in the Patardzueli-Samgori, Rustavi and Teleti
fields, together with 574 BCF of 2U gross prospective resources at South Dome.
Project III has an estimated NPV10 of approximately US$2.2 billion (Source:
IER, OPC 2024 and internal estimates).
The Company is structured around a multi-project approach, progressing assets
across different stages of development, hydrocarbon type and reservoir
characteristics. This approach is designed to deliver a balanced portfolio of
production growth, field redevelopment, new discoveries and the
commercialisation of substantial gas resources, supported where appropriate by
partner funding, carried work programmes and cash from existing producing
assets.
Located near the Georgian capital of Tbilisi, Block Energy is well-positioned
to contribute to the region's energy landscape. This proximity facilitates
operations and underpins the Company's commitment to the economic and energy
development of Georgia.
In April 2026, the Company announced a strategic entry into offshore Gabon
through a secured convertible loan to Pilgrim Exploration Limited, providing
Block with a 76.5% indirect economic interest in the Ndjila (CD2) and Mpari
(CD3) PSCs. The two licences cover 5,331 km² and contain four historical oil
discoveries - Iguega, Topaz, Ekouata and Pilote - together with material pre-
and post-salt exploration potential in an established Gulf of Guinea
hydrocarbon fairway.
Glossary
· bbls: barrels. A barrel is 35 imperial gallons.
· Bcf: billion cubic feet.
· boe: barrels of oil equivalent.
· bopd: barrels of oil per day.
· DGH: Directorate General of Hydrocarbons of Gabon
· Mbbls: thousand barrels.
· MMbbls: million barrels.
· MMboe: million barrels of oil equivalent.
· MMCF/d: millions of cubic feet of gas per day
· TCF: trillion cubic feet.
The following are extracts from the Annual Report & Accounts:
Chairman's Statement
Dear Shareholder,
The realisation of value from high-impact assets, such as those held by Block,
inevitably takes time. As I noted last year, the work behind the scenes can be
substantial yet difficult to convey in any single reporting period. 2025, by
contrast, has been the year in which several years of preparatory work began
to translate into clear, commercial outcomes - a transformative farm-out on
Project IV, a binding Framework Agreement on Project III, and a successful
pilot injection on the Carbon Capture and Storage initiative. Following the
reporting period, the Company executed the acquisition of an indirect economic
interest over two PSCs in Gabon. Each had been on the strategic agenda for
some time, and 2025 was the year in which they began to materialise.
The Company is now at the inflection point referenced in last year's
statement. The Project IV farm-out, which completed shortly after year-end,
sees Block fully carried through a substantial work programme funded by an
internationally recognised counterparty. The Project III Framework Agreement,
executed post year-end, brings a major industrial group into the Lower Eocene
and Upper Cretaceous gas appraisal. Both transactions advance the Group's most
material Georgian projects while preserving capital. The post-period entry
into Gabon adds jurisdictional and geological diversification and positions
the Company to develop into a broader international independent oil and gas
group.
Reaching this point is a testament to the strategy in place, which has
balanced progress on the high-impact projects with a balance sheet able to
support them, and to the strength of the management team, which continues to
deliver against demanding objectives with tight cost discipline. Block has,
where possible, advanced its projects on the basis of carry mechanisms and
partner-funded work programmes, with new equity capital sought only when
strategic optionality genuinely required it; such as for the Gabon transaction
executed post the reporting period. In the listed E&P space, this
disciplined approach to capital remains unusual.
I would particularly like to thank the team in Georgia, who have driven
another year of operational excellence, including the successful pilot of the
Group's slim-hole drilling concept, the safe and on-budget completion of the
CCS pilot injection, and the continuous management of our producing portfolio
- all while maintaining the highest standards of safety and environmental
stewardship with no lost time incidents recorded. Their progress continues to
be supported by close and productive relationships with the Georgian
authorities, our joint venture partners and our commercial counterparties,
built over many years and particularly important in delivering this year's
principal commercial milestones.
It is appropriate at this point that I mention the loss of one of our
stalwarts, Dr. Stephen James (our former head of subsurface). Stephen brought
his considerable knowledge of geology and petroleum operations to bear on all
of the Company's activities with great enthusiasm and humour. Even during his
long tough battle with cancer, he was dedicated to the success of the Company.
We carry on, of course, but we all know that Block Energy will not be the same
again. All in Block Energy miss him dearly.
Georgia remains a positive environment in which to work and invest. It is
pro-business, with a well-functioning political and legal system, easy market
access through established infrastructure that runs close to the Company's
licences, and GDP growth that continues to outstrip that of the wider EU.
Safety remains the foremost priority for the Company at all levels, and is the
first item on the agenda at all Board meetings.
The Board believes the strategy in place is the right one. The progress made
during 2025 - together with the post year-end completion of the Project IV
farm-out, the execution of the Project III Framework Agreement and the
strategic entry into a new jurisdiction - demonstrates that the Group is
capable of delivering meaningful change in any twelve-month period. The new
assets in Gabon provide meaningful upside in an exciting hydrocarbon
jurisdiction. The Board looks forward to supporting the team in the year ahead
and to updating shareholders further on the Company's progress.
Philip Dimmock
Non-Executive Chairman
Chief Executive Officer's Statement
Dear Shareholder,
2025 was a year of strategic conversion for Block Energy. We took a portfolio
shaped by several years of technical work and converted that work into
tangible commercial validation: the Aspect farm-out on XIQ, the Sanning
Framework Agreement on Project III, successful completion of the CCS pilot,
validation of the slim-hole drilling model and, after year-end, entry into
offshore Gabon. These milestones move Block from a business defined
principally by its Georgian production base to a broader, partner-funded
growth platform with multiple routes to scale in 2026 and beyond.
Safety remains the foundation of our operations. During a year that included
the pilot CO₂ injection, the drilling of KRT-39_ST and continuous management
of the producing portfolio, the Group recorded no lost time incidents. We also
continued to strengthen local engagement through employment, training and
targeted community initiatives, while investing in the environmental
management systems that underpin both conventional operations and the CCS
project.
Our strategic approach has been clear: advance the largest opportunities
through asset-level finance and farm-outs, while preserving the balance sheet
and using cash from existing operations selectively. Project IV now benefits
from a fully carried work programme estimated at approximately US$95 million.
Project III is the subject of a binding Framework Agreement that provides for
an up to US$75 million carry, subject to definitive documentation, approvals
and project elections. This strategy is designed to maximise shareholder
exposure to material upside without forcing the Company into disproportionate
capital commitments.
The same discipline applies to CCS. The pilot has been delivered with Rustavi
Azot and supported by independent technical work, and the next phase is
focused on commercial feasibility, verification and scale-up rather than
committing capital before the project is commercially defined.
We also used 2025 to broaden the portfolio. The success achieved on Projects
III, IV and CCS gave us the platform to pursue an international new venture
without losing focus on Georgia. The Gabon transaction announced after
year-end is therefore not a departure from strategy; it is an extension of the
same model: low-cost entry, discovered resources, material upside and a clear
route to asset-level financing.
In April 2026, we announced a strategic entry into offshore Gabon through a
secured convertible loan to Pilgrim Exploration Limited, providing Block with
a 76.5% indirect economic interest in the Ndjila (CD2) and Mpari (CD3) PSCs.
The PSCs cover 5,331 km(2) and contain four historical oil discoveries -
Iguega, Topaz, Ekouata and Pilote - in a proven hydrocarbon basin with
established operators, infrastructure and fiscal terms. This gives the Group a
new discovered-resource development pathway and material exploration upside
alongside our Georgian asset base.
A central feature of the year was the way in which progress was secured. The
Sanning Framework Agreement, the Aspect farm-out and the CCS pilot each
advanced high-impact projects through partners, carries or technical
collaboration. The KRT-39_ST slim-hole pilot, meanwhile, validated an internal
cost-reduction initiative that supports a more sustainable operating model
across lower-price environments. The Company has therefore not simply added
projects; it has re-wired the business to progress a larger opportunity set
with greater capital discipline.
During the year, we drilled and completed KRT-39_ST on Project I as the first
pilot application of our slim-hole drilling technology, using the Company's
own A-80 heavy workover rig and in-house crew. The well was drilled safely, on
time and within budget at approximately 40% of the cost of previous
conventional sidetracks. KRT-39_ST met its engineering and cost objectives and
supports a broader lower-cost inventory across Project I and, potentially,
Project II.
Project II remains an important part of the long-term oil growth portfolio.
During the year, we continued internal subsurface and engineering work and
maintained discussions with international service providers and enhanced oil
recovery specialists. With 235 MMbbl of gross 2C contingent resources and a
substantial legacy well stock, Project II offers a material redevelopment
opportunity that is being refined ahead of a structured farm-out or
asset-level financing process.
Project III is central to the next phase of Block's growth. During the year,
we acquired the operational rights to South Dome, adding 574 BCF of 2U gross
prospective resources. The structured farm-out process advanced through 2025,
resulting in a non-binding offer in December and, post year-end, a binding
Framework Agreement with Zhijiang Sanning Energy Co. Ltd. The agreement
provides for Sanning to acquire a 51% participating interest in Project III,
with Block retaining 49% and operatorship through appraisal, and for an up to
US$75 million carry across appraisal and early facilities workstreams.
Definitive documentation is targeted for the second half of 2026, with
operations expected to commence in the first half of 2027, subject to
approvals.
Project IV delivered one of the most significant strategic milestones of the
year. Following Block's acquisition of an initial 10% interest in XIQ in March
2025, the Company announced the farm-out of XIQ to Aspect Georgia, LLC in
September 2025. Government approval was received and the transaction completed
in January 2026. The carried work programme, estimated at approximately US$95
million, is expected to begin with seismic acquisition in 2026 and provides a
clear pathway through exploration, appraisal and, subject to results, early
production facilities without further capital exposure for Block.
Our CCS initiative progressed from concept to demonstrated technical
viability. In August 2025, we injected 13.64 tonnes of CO₂ dissolved in
water into the Patardzueli-Samgori Middle Eocene reservoir. Post-injection
analysis reported in December 2025 indicated 70% to 100% mineralisation, and
the February 2026 OPC report confirmed complete mineralisation within a
one-to-three-month timeframe, with no evidence of gas phase migration or
leakage. The next phase, alongside Rustavi Azot, will focus on the commercial
framework, scaling of injection capacity and monitoring and verification
protocols.
Financially, 2025 was a year of resilience in a lower-price environment and
continued re-wiring of the business to remain sustainable at lower oil prices.
Revenue of US$6.057 million (2024: US$7.533 million) reflected the materially
lower commodity price backdrop, with Brent averaging approximately US$69/bbl
in 2025 compared with approximately US$81/bbl in 2024, while production from
existing wells was better than budget. EBITDA was negative US$0.94 million
(2024: positive US$1.06 million), in line with expectations. Importantly, the
cost base remained controlled, cash improved to US$1.493 million (2024:
US$1.136 million), and the November 2025 equity raise - the Group's first
since 2020 - provided additional flexibility at a time of active farm-out and
new venture execution. Subsequent to year-end, Brent prices have strengthened
materially from the 2025 average; combined with strong operational performance
and enhanced efficiencies, this positions the Company to benefit from a more
constructive commodity price environment while retaining the discipline
developed during the lower-price period.
Post year-end, we completed the corporate steps required to support the Gabon
entry. The associated placing and retail offer raised approximately US$6.3
million before expenses, and following the General Meeting held on 18 May 2026
all resolutions were passed and the conditional fundraise shares were admitted
to AIM. The proceeds provide the capital required to fund the Gabon work
programme and general working capital as we move into the next phase of
execution.
Outlook
The year ahead is about converting strategic positioning into operational
delivery: definitive documentation and approvals for the Sanning transaction;
preparation for Project III appraisal operations targeted to commence in 2027;
commencement of the Aspect-funded XIQ seismic programme; CCS commercial
feasibility work; and the operational launch of the Gabon technical programme,
with initial focus on data integration, Iguega development planning and
partner financing discussions.
We recognise that there remains a disconnect between the intrinsic value of
the portfolio and the Group's market capitalisation. The answer to that is
execution. Independent resource assessments, the calibre of our counterparties
and the scale of partner-funded work now in prospect all support our view that
the portfolio contains material upside. Our focus in 2026 is to convert that
upside into visible operational milestones.
I would like to thank our team in Georgia, our advisers, our partners and our
shareholders for their continued support. We enter 2026 with a stronger
portfolio, a more efficient operating model, credible strategic partners and a
clear plan to build value from Georgia, Gabon and our CCS opportunity.
Yours sincerely,
Paul Haywood
Chief Executive Officer
Block Energy PLC
Financial Review
Income Statement
The Group's revenue from oil and gas sales was US$6,057,000 (2024:
US$7,533,000). The reduction was driven primarily by the lower commodity price
environment, with average realised oil revenue per barrel of US$57.43 compared
with US$68.20 in 2024, while production remained broadly stable and slightly
ahead of budget. Crude oil sales were 92,731 barrels (2024: 97,961 barrels),
and gas sales were US$731,000 (2024: US$855,000).
During the year, the Group produced 122,474 barrels of crude oil (2024:
131,579 barrels). Gas production stood at 245 MMCF (2024: 274 MMCF). This
gross production figure includes the State of Georgia's share of production
before cost recovery and profit sharing. The Group had 9,731 barrels of crude
oil inventory as at 31 December 2025 (31 December 2024: 11,060 barrels).
The natural decline from existing Project I production was less than expected
during the year. Conventional drilling was deliberately limited as the Company
prioritised Project III, Project IV, CCS and new venture activity, with the
only Project I drilling being the lower-cost KRT-39_ST slim-hole pilot.
KRT-39_ST validated the slim-hole drilling concept and therefore supports a
lower-cost development model that is more resilient in low oil price
environments. Production from the existing well stock remained in line with
the 2022 ERCE reserve report type curves and slightly ahead of budgetary
estimates.
Subsequent to year-end, the commodity price backdrop has strengthened
materially relative to the 2025 average. The Company's leaner operating model,
stable production performance and enhanced capital discipline position it to
benefit from higher realised oil prices while retaining the sustainability
measures developed during the lower-price environment.
The loss for the year was US$2,518,000 (2024: US$609,000). The increase
compared with the prior year primarily reflects lower revenue from the reduced
oil price environment and the higher cost of sales charge of US$596,000 (2024:
US$22,000) associated with the reduced level of oil stock held at year end.
With respect to operating activities, the Group delivered a loss of
US$2,254,000 (2024: loss of US$202,000). EBITDA decreased to negative
US$935,000 (2024: positive US$1,061,000), principally due to lower realised
commodity prices rather than a loss of operational control. The result should
be read alongside the strategic progress delivered during the year across
Project III, Project IV, CCS and Gabon, where value creation is not fully
reflected in the 2025 income statement.
The Company continues to closely monitor costs, operational performance and
efficiency. Despite increased international cost pressures and higher activity
across the strategic project portfolio, the Group maintained overall costs at
a similar level to the prior year. This cost discipline is a key component of
the Company's re-wired operating model and supports sustainability through
commodity cycles.
Overall, 2025 was financially impacted by lower oil prices, but the Company
remained stable, improved its year-end cash position, extended its strategic
runway and made significant progress on the high-impact projects that are
expected to be the principal catalysts for shareholder value growth.
Liquidity, Counterparty Risk and Going Concern
The Group monitors its cash position, cash forecasts and liquidity regularly, with surplus cash held on term deposits with major financial institutions. The directors have prepared cash flow forecasts for a period of 12 months from the date of signing these financial statements, which are reviewed regularly to determine whether any cost-curtailment actions are required. The Group's operations presently generate sufficient revenues to cover operating costs, supporting the preparation of the financial statements on a going concern basis. The directors have, however, identified downside scenarios - including a substantial fall in oil prices or production, and the redemption of the US$2.0 million secured loan in August 2027 - that give rise to a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Notwithstanding this, the directors consider it appropriate to prepare the financial statements on a going concern basis; the full Going Concern disclosure is set out in note 1.
Impairment
There was no impairment recognised in either year.
Results and Dividends
The results for the year and the financial position of the Group are shown in
the following financial statements:
· The Group has incurred a pre-tax loss of $2,518,000 (2024: loss
of $609,000).
· The Group achieved negative EBITDA of $935,000 (2024: positive
$1,061,000).
· The Group has net assets of $25,526,000 (2024: $25,313,000).
· The Directors do not recommend the payment of a dividend (2024:
$nil).
Financial Statements
Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2025
Note Year ended 31 December 2025 Year ended 31 December 2024
Continuing operations $'000 $'000
Revenue 4 6,057 7,533
Cost of sales:
Direct costs 3 (3,572) (3,496)
Oil inventory adjustments 14 (596) (22)
Depreciation and depletion of oil and gas assets 5 (1,290) (1,236)
Total cost of sales (5,458) (4,754)
Gross profit 599 2,779
Other administrative costs 6 (2,629) (2,568)
Share based payments charge 23 (195) (386)
Foreign exchange movement (30) (27)
Total operating loss (2,255) (202)
Other income 8 65 35
Finance income 37 33
Finance expense 9 (365) (475)
(263) (407)
Loss for the year before taxation (2,518) (609)
Taxation 10 - -
Loss for the year from continuing operations (attributable to the equity (2,518) (609)
holders of the parent)
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations 210 (135)
Total comprehensive loss for the year (attributable to the equity holders of (2,308) (744)
the parent)
Loss per share basic and diluted 11 (0.31)c (0.08)c
Earnings before interest, tax, depreciation and amortisation (EBITDA) 3a (935) 1,061
All activities relate to continuing operations.
The notes on pages 58 to 84 form part of these consolidated financial
statements.
Consolidated Statement of Financial Position for the Year Ended 31 December
2025
31 December 2025 31 December 2024
Note $'000 $'000
Non-current assets
Intangible assets 12 745 268
Property, plant and equipment 13 22,810 22,976
Total non-current assets 23,555 23,244
Current assets
Inventory 14 3,819 4,299
Trade and other receivables 15 826 804
Cash and cash equivalents 16 1,493 1,136
Total current assets 6,138 6,239
Total assets 29,693 29,483
Equity and liabilities
Capital and reserves attributable to equity holders of the Parent Company:
Share capital 19 4,642 3,733
Share premium 20 36,958 34,879
Other reserves 21 2,441 5,066
Foreign exchange reserve 843 633
Accumulated deficit (19,358) (18,998)
Total equity 25,526 25,313
Non-current liabilities
Borrowings 17 - 2,000
Total non-current liabilities - 2,000
Current liabilities
Trade and other payables 17 1,207 1,237
Borrowings 17 2,000 -
Provisions 18 960 933
Total current liabilities 4,167 2,170
Total liabilities 4,167 4,170
Total equity and liabilities 29,693 29,483
The financial statements were approved by the Board of Directors and
authorised for issue on 30 May 2026 and were signed on its behalf by:
Paul Haywood
Director
The notes on pages 58 to 84 form part of these consolidated financial
statement
Consolidated Statement of Changes in Equity for the Year Ended 31 December 2025
Share Capital Share Premium Accumulated Deficit Other Reserves Foreign Exchange Reserve Total Equity
$'000 $'000 $'000 $'000 $'000 $'000
3,705 34,856 (18,389) 4,766 768 25,706
Balance at 31 December 2023
Loss for the year - - (609) - - (609)
Exchange differences on translation of foreign operations - - - - (135) (135)
Total comprehensive loss for the year - - (609) (135) (744)
Issue of shares 28 23 - - - 51
Share based payments - - - 632 - 632
Shares held by EBT - - - (332) - (332)
Total transactions with owners 28 23 - 300 - 351
Balance at 31 December 2024 3,733 34,879 (18,998) 5,066 633 25,313
Loss for the year - - (2,518) - - (2,518)
Exchange differences on translation of foreign operations - - - - 210 210
Total comprehensive loss for the year - - (2,518) - 210 (2,308)
Issue of shares 898 2,156 - (656) - 2,398
Cost of issue - (90) - - - (90)
Share based payments - - - 195 - 195
Other reserve movement - - - 18 - 18
Options exercised 11 13 - (24) - -
Expired warrants and options - - 2,158 (2,158) - -
Total transactions with owners 909 2,079 2,158 (2,625) - 2,521
Balance at 31 December 2025 4,642 36,958 (19,358) 2,441 843 25,526
The notes on pages 58 to 84 form part of these consolidated financial
statements.
Consolidated Statement of Cash Flows for the Year Ended 31 December 2025
Note Year ended Year ended
31 December 2025 31 December 2024
$'000 $'000
Cash flow from operating activities
Loss for the year before tax (2,518) (609)
Adjustments for:
Depreciation and depletion 5 1,290 1,236
Finance charges 9 365 475
Finance income (37) (33)
Other income 8 (65) (35)
Creditors paid in shares 21 31
Share based payments expense 7 195 386
Foreign exchange movement 206 (47)
Operating cash flows before movements in working capital (543) 1,404
(Increase)/decrease in trade and other receivables (22) 167
Movement in trade and other payables* 420 (252)
Decrease in inventory 480 78
Net cash flow from operating activities 335 1,397
Cash flow from investing activities
Income received 101 6
Expenditure in respect of E&E (477) (218)
Expenditure in respect of PP&E 13 (1,121) (445)
Net cash used in investing activities (1,497) (657)
Cash flow from financing activities
Proceeds from Share issues 19 1,972 -
Cost of share issues 20 (90) -
Interest paid 9 (365) (311)
Net cash inflow/(outflow) from financing activities 1,517 (311)
Net increase in cash and cash equivalents in the year 355 429
Cash and cash equivalents at start of year 1,136 713
Effects of foreign exchange rate changes on cash and cash equivalents 2 (6)
Cash and cash equivalents at end of year 1,493 1,136
The notes on pages 58 to 84 form part of these consolidated financial
statements.
Significant non-cash transactions*
During the year, accrued liabilities of $425,000 were extinguished through the
issue of ordinary shares and nil cost options. This represents a non-cash
financing transaction and has been excluded from the statement of cash flows.
The shares were issued at 0.74p (0.92c) per share and the nil cost options
were valued at the same amount.
Notes Forming Part of the Consolidated Financial Statements
Corporate Information
Block Energy Plc ("Block Energy") gained admission to trading on AIM on 11(th)
June 2018, trading under the symbol of BLOE.
The Consolidated financial statements of the Group, which comprises Block
Energy Plc and its subsidiaries, for the year ended 31 December 2025 were
authorised for issue in accordance with a resolution of the Directors on 30
May 2026. Block Energy is a Company incorporated in the UK whose shares are
publicly traded. The address of the registered office is given in the officers
and advisers section of this report. The Company's administrative office is in
London, UK.
The nature of the Company's operations and its principal activities are set
out in the Strategic Report on pages 4 to 35 and the Report of the Directors
on pages 36 to 38.
1. Significant Accounting Policies
IAS 8 requires that management shall use its judgement in developing and
applying accounting policies that result in information which is relevant to
the economic decision-making needs of users, that are reliable, free from
bias, prudent, complete and represent faithfully the financial position,
financial performance and cash flows of the entity.
Basis of Preparation
The principal accounting policies adopted in the preparation of these
consolidated financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise stated. All
amounts presented are in thousands of US dollars unless otherwise stated.
Foreign operations are included in accordance with the policies set out below.
The consolidated financial statements have been prepared in accordance with
UK-adopted international accounting standards and as regards the Company
financial statements, as applied in accordance with the requirements of the
Companies Act 2006. The Financial Statements have also been prepared under the
historical cost convention, as modified by the revaluation of financial assets
at fair value through profit or loss.
The preparation of financial statements in accordance with UK-adopted
international accounting standards requires management to make judgements,
estimates and assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenses. The estimates and
associated assumptions are based on historical experience and factors that are
believed to be reasonable under the circumstances, the results of which form
the basis of making judgements about carrying values of assets and liabilities
that are not readily apparent from other sources. Actual results may differ
from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Changes in accounting estimates may be necessary if there are changes in the
circumstances on which the estimate was based, or as a result of new
information or more experience. Such changes are recognised in the period in
which the estimate is revised.
Standard Effective date Overview
IFRS 18 Presentation and Disclosure in Financial Statements 1 January 2027 IFRS 18 (replacing IAS 1) introduces new profit or loss presentation
requirements to enhance comparability. Early adoption is allowed.
Amendments to IFRS 9: Financial Instruments and IFRS 7 Financial Instruments: 1 January 2026 Amendments to IFRS 9 and IFRS 7 clarify the classification and measurement of
Disclosures (and financial instruments, including aspects of derecognition and the assessment
of contractual cash flow characteristics, while enhancing related disclosure
Annual Improvements to IFRS standards - Volume 11 requirements. Annual Improvements to IFRS Standards - Volume 11 introduce
minor amendments across various standards to address inconsistencies and
improve clarity without significantly changing existing requirements.
UK Sustainability Reporting Standards 1 January 2027 The UK Government published the final UK Sustainability Reporting Standards
(UK SRS S1 and UK SRS S2) on 25 February 2026, closely aligned to the ISSB's
IFRS S1 and IFRS S2. The FCA is consulting on requiring UK-listed companies to
apply UK SRS from 1 January 2027, with UK SRS S2 climate disclosures mandatory
from that date and Scope 3 emissions on a comply-or-explain basis from 2028.
The existing TCFD-based rules for listed companies are expected to be replaced
by the new UK SRS regime. The Company is monitoring developments and assessing
the impact on its reporting obligations.
New and Amended Standards Adopted by the Group
There were no new or amended accounting standards that required the Group to
change its accounting policies for the year ended 31 December 2025 and no new
standards, amendments or interpretations were adopted by the Group.
New Accounting Standards Issued but not yet Effective
The standards and interpretations that are relevant to the Group, issued, but
not yet effective, up to the date of the Financial Statements are listed
below. The Group intends to adopt these standards, if applicable, when they
become effective.
The Directors have evaluated the impact of transition to the above standards
and do not consider that there will be a material impact of transition on the
financial statements.
Crude Oil Inventory Valuation Policy
During the prior financial year, the Group changed its accounting policy and
departed from IAS 2 Inventories for the valuation of its crude oil inventory.
Previously, inventories were valued at the lower of cost and net realisable
value. Under the new policy, inventories are now measured at their net
realisable value, which is Brent market price less the contracted discount.
The Company believes that this provides a more representative view of
realisable value, aligns more accurately with internal management reporting
and removes the judgemental approach of allocation of certain costs.
Had IAS 2 been applied, inventory would have been valued at net realisable
value as this was lower than cost. As inventory is carried at net realisable
value, the current year position is consistent with the IAS 2 measurement
basis and the difference is not considered material to the financial
statements (2024: $59,000 lower and profit before tax $59,000 lower).
Basis of Consolidation
Where the Company has control over an investee, it is classified as a
subsidiary. The Company controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
De-facto control exists in situations where the Company has the practical
ability to direct the relevant activities of the investee without holding the
majority of the voting rights. In determining whether de-facto control exists
the Company considers all relevant facts and circumstances, including:
· The size of the Company's voting rights relative to both the size and
dispersion of other parties who hold voting rights;
· Substantive potential voting rights held by the Company and by other
parties;
· Other contractual arrangements; and
· Historic patterns in voting attendance.
Business Combinations
The consolidated financial statements incorporate the results of business
combinations using the purchase method. In the consolidated statement of
financial position, the acquiree's identifiable assets, liabilities and
contingent liabilities are initially recognised at their fair values at the
acquisition date. The difference between the consideration paid and the
acquired net assets is recognised as goodwill. The results of acquired
operations are included in the consolidated income statement from the date on
which control is obtained. Any difference arising between the fair value and
the tax base of the acquiree's assets and liabilities that give rise to a
deductible difference result in recognition of deferred tax liability. No
deferred tax liability is recognised on goodwill.
Acquisitions
The Group and Company measure consideration at the acquisition date as:
· The fair value of the consideration transferred; plus
· The recognised amount of any non-controlling interests in the
acquiree
· Plus, if the business combination is achieved in stages, the fair
value of the existing equity interest in the acquiree; less the net recognised
amount (generally fair value) of the identifiable assets acquired and
liabilities assumed.
When the excess of the consideration paid over the fair value of the
identified net assets is negative, a bargain purchase gain is recognised
immediately in profit or loss.
Cost related to the acquisition, other than those associated with the issue of
debt or equity securities, that the Group incurs in connection with a business
combination, are expensed as incurred.
Asset Acquisition
Acquisitions of mineral exploration licences through the acquisition of
non-operational corporate structures that do not represent a business and
therefore do not meet the definition of a business combination, are accounted
for as the acquisition of an asset. An example of such would be increases in
working interests in licences.
The consideration for the asset is allocated to the assets based on their
relative fair values at the date of acquisition.
Going Concern
The directors have prepared cash flow forecasts for a period of 12 months from
the date of signing these financial statements. The Group's forecasts are
reviewed regularly to assess whether any actions to curtail expenditure or cut
costs are required.
The Group's operations presently generate sufficient revenues to cover
operating costs, supporting the continued preparation of the Group's accounts
on a going concern basis.
The directors are nevertheless conscious that oil prices have been volatile
during the past few years and could rise further but could also fall back in
the year ahead, and that future production levels depend on both depletion
rates from existing wells and the success of future drilling.
The directors also recognise that the outstanding $2.0 million secured loan is
due for full redemption in August 2027 and that there are scenarios in which
the Company may not be in a position to settle this liability. Nonetheless,
the directors remain confident that the loan can either be repaid, or
renegotiated, or that new lenders could take a portion, or that other
financing options will be available to the Company and therefore judge that
the Company retains sufficient flexibility and optionality around the loan to
prepare the accounts on a going concern basis.
As part of their going concern assessment, the directors have examined
multiple scenarios in which oil prices and/or future production levels fall
substantially and have concluded that it remains possible that future
revenues in at least some scenarios might not cover all operating costs and
planned capital expenditures, creating a material uncertainty that may cast
doubt over the Group's ability to continue as a going concern. Whilst
acknowledging this material uncertainty, the directors remain confident of
making further cost savings if required and, therefore, the directors consider
it appropriate to prepare the financial statements on a going concern basis.
The financial statements do not include the adjustments that would result if
the Group were unable to continue as a going concern.
Intangible Assets
Exploration and Evaluation costs
The Group applies the full cost method of accounting for Exploration and
Evaluation ("E&E") costs, having regard to the requirements of IFRS 6
'Exploration for and Evaluation of Mineral Resources'. Under the full cost
method of accounting, costs of exploring and evaluating properties are
accumulated and capitalised by reference to appropriate cash generating units
("CGUs"). Such CGUs are based on geographic areas such as a licence area, type
or a basin and are not larger than an operating segment - as defined by IFRS 8
'Operating segments'.
E&E costs are initially capitalised within 'Intangible assets', such
E&E costs may include costs of licence acquisition, technical services and
studies, seismic acquisition, exploration drilling and testing, but do not
include costs incurred prior to having obtained the legal rights to explore an
area, which are expensed directly to the statement of comprehensive income as
they are incurred. Plant and equipment assets acquired for use in exploration
and evaluation activities are classified as property, plant and equipment.
However, to the extent that such an asset is consumed in developing an
unproven oil and gas asset, the amount reflecting that consumption is recorded
as part of the cost of the unproven oil and gas asset.
Exploration and unproven oil and gas assets related to each exploration
license/prospect are not amortised but are carried forward until the technical
feasibility and commercial feasibility of extracting a mineral resource are
demonstrated.
Impairment of Exploration and Evaluation assets
All capitalised exploration and evaluation assets and property, plant and
equipment are monitored for indications of impairment. Where a potential
impairment is indicated, assessment is made for the Group of assets
representing a cash generating unit.
In accordance with IFRS 6 the Group firstly considers the following facts and
circumstances in their assessment of whether the Group's exploration and
evaluation assets may be impaired, whether:
· the period for which the Group has the right to explore in a specific
area has expired during the period or will expire in the near future, and is
not expected to be renewed;
· substantive expenditure on further exploration for and evaluation of
mineral resources in the specific area is neither budgeted nor planned;
· exploration for and evaluation of mineral resources in the specific
area have not led to the discovery of commercially viable quantities of
mineral resources and the Group has decided to discontinue such activities in
the specific area; or
· sufficient data exist to indicate that, although a development in the
specific area is likely to proceed, the carrying amount of the exploration and
evaluation asset is unlikely to be recovered in full from successful
development or by sale.
If any such facts or circumstances are noted, the Group perform an impairment
test in accordance with the provisions of IAS 36.
The aggregate carrying value is compared against the expected recoverable
amount of the cash generating unit. The recoverable amount is the higher of
value in use and the fair value less costs to sell. An impairment loss is
reversed if the asset's or cash-generating unit's recoverable amount exceeds
its carrying amount. A reversal of impairment loss is recognised in the profit
or loss immediately.
Carbon Capture and Storage ("CCS") project
Costs incurred in respect of the Group's CCS initiative are recognised as
intangible assets under IAS 38 'Intangible Assets'. Costs are capitalised only
when the IAS 38 development-phase criteria are met, including demonstration of
technical feasibility, intention and ability to complete the asset, and the
probability of future economic benefits. The CCS intangible asset is not
amortised until it is available for use. At each reporting date the asset is
tested for impairment in accordance with IAS 36 'Impairment of Assets'; as an
asset not yet available for use it is subject to an annual impairment test
irrespective of whether any indicator exists.
Property, Plant and Equipment - Development and Production ("D&P") Assets
Capitalisation
The costs associated with determining the existence of commercial reserves are
capitalised in accordance with the preceding policy and transferred to
property, plant and equipment as development assets following impairment
testing. All costs incurred after the technical feasibility and commercial
viability of producing hydrocarbons have been demonstrated are capitalised
within development assets on a field-by-field basis. Subsequent expenditure is
only capitalised where it either enhances the economic benefits of the
development asset or replaces part of the existing development asset (where
the remaining cost of the original part is expensed through the income
statement). Costs of borrowing related to the ongoing construction of
development and production assets and facilities are capitalised during the
construction phase. Capitalisation of interest ceases once an asset is ready
for production.
Depreciation
Capitalised oil assets are not subject to depreciation until commercial
production starts. Depreciation is calculated on a unit-of-production basis
in order to write off the cost of an asset as the reserves that it represents
are produced and sold. Any periodic reassessment of reserves will affect the
depreciation rate on a prospective basis. The unit-of-production depreciation
rate is calculated on a field-by-field basis using proved, developed reserves
as the denominator and capitalised costs as the numerator. The numerator
includes an estimate of the costs expected to be incurred to bring proved,
developed, not-producing reserves into production. Infrastructure that is
common to a number of fields, such as gathering systems, treatment plants and
pipelines are depreciated on a unit-of-production basis using an aggregate
measure of reserves or on a straight-line basis depending on the expected
pattern of use of the underlying asset.
Proven Oil and Gas Properties
Oil and gas properties are stated at cost less accumulated depreciation and
impairment losses. The initial cost comprises the purchase price or
construction cost including any directly attributable cost of bringing the
asset into operation and any estimated decommissioning provision.
Once a project reaches the stage of commercial production and production
permits are received, the carrying values of the relevant exploration and
evaluation asset are assessed for impairment and transferred to proven oil and
gas properties and included within property plant and equipment.
Proven oil and gas properties are accounted for in accordance with provisions
of the cost model under IAS 16 "Property, Plant and Equipment" and are
depleted on unit of production basis based on the estimated proven and
probable reserves of the pool to which they relate.
Impairment of Development and Production Assets
A review is performed for any indication that the value of the Group's D&P
assets may be impaired such as:
· significant changes with an adverse effect in the market or economic
conditions which will impact the assets; or
· obsolescence or physical damage of an asset; or
· an asset becoming idle or plans to dispose of the asset before the
previously expected date; or
· evidence is available from internal reporting that indicates that the
economic performance of an asset is or will be worse than expected.
For D&P assets when there are such indications, an impairment test is
carried out on the CGU. CGUs are identified in accordance with IAS 36
'Impairment of Assets', where cash flows are largely independent of other
significant asset Groups and are normally, but not always, single development
or production areas. When an impairment is identified, the depletion is
charged through the Consolidated Statement of Comprehensive Income if the net
book value of capitalised costs relating to the CGU exceeds the associated
estimated future discounted cash flows of the related commercial oil reserves.
The CGU's identified by the company are the producing fields within Project I
and II in Georgia. An assessment is made at each reporting date as to whether
there is any indication that previously recognised impairment charges may no
longer exist or may have decreased. If such an indication exists, the Group
estimates the recoverable amount. A previously recognised impairment charge is
reversed only if there has been a change in the estimates used to determine
the assets recoverable amount since the last impairment charge was recognised.
If this is the case the carrying amount of the asset is increased to its
recoverable amount, not to exceed the carrying amount that would have been
determined, net of depreciation, had no impairment charges been recognised for
the asset in prior years.
Property, Plant and Equipment and Depreciation
Property, plant and equipment which are awaiting use in the drilling
campaigns, and storage, are recorded at historical cost less accumulated
depreciation. Property, plant and equipment are depreciated using the
straight-line method over their estimated useful lives, as follows:
· IT Equipment - 3 years
· Fixtures and Fittings - 5 years
· Oil and Gas related assets - 8 years
The carrying value of Property, plant and equipment is assessed annually and
any impairment charge is charged to the Consolidated Statement of
Comprehensive income.
Leases
The Group assesses whether a contract is or contains a lease, at inception of
the contract. The Group recognises a right-of-use asset and a corresponding
lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of
12 months or less) and leases of low value assets (such as tablets and
personal computers, small items of office furniture and telephones). For these
leases, the Group recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another systematic basis
is more representative of the time pattern in which economic benefits from the
leased assets are consumed.
Inventories
Crude oil inventories are stated at Brent less any contractual discounts. This
is adjusted if the sale of inventories after that date gives additional
evidence about its net realisable value at the balance sheet date.
The cost of crude oil is expensed in the period in which the related revenue
is recognised.
Inventories of drilling tubulars, drilling chemicals, test separation
equipment, rig spare parts and other oil and gas equipment are valued at the
lower of cost or net realisable value, where cost represents the weighted
average unit cost for inventory lines on a line-by-line basis. Cost comprises
all costs of purchase, costs of conversion and other costs incurred in
bringing the inventories to their present location and condition.
Decommissioning Provision
Provisions for decommissioning are recognised in full when wells have been
suspended, or facilities have been installed.
A corresponding amount equivalent to the provision is also recognised as part
of the cost of either the related oil and gas exploration and evaluation asset
or property, plant and equipment as appropriate. The amount recognised is the
estimated cost of decommissioning, discounted to its net present value, and
is reassessed each year in accordance with local conditions and requirements.
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 the related asset.
The unwinding of the discount on the decommissioning provision is included as
a finance cost.
Borrowing Costs
General and specific borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying asset are capitalised
during the period of time that is required to complete and prepare the asset
for its intended use or sale. Qualifying assets are assets that necessarily
take over one accounting period to get ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings,
pending their expenditure on qualifying assets, is deducted from the borrowing
costs eligible for capitalisation.
Other borrowing costs are expensed in the period in which they are incurred.
Taxation and Deferred Tax
Income tax expense represents the sum of the current tax and deferred tax
charge for the period.
The Group's liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting date.
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial information and the corresponding tax
bases and is accounted for using the balance sheet liability method.
Deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised.
Judgement is applied in making assumptions about future taxable income,
including oil and gas prices, production, rehabilitation costs and expenditure
to determine the extent to which the Group recognises deferred tax assets, as
well as the anticipated timing of the utilisation of the losses.
Deferred tax is calculated at the tax rates that have been enacted or
substantively enacted and are expected to apply in the period when the
liability is settled, or the asset realised. Deferred tax is charged or
credited to the statement of comprehensive income, except when it relates to
items charged or credited directly to equity, in which case the deferred tax
is also dealt with in equity.
Foreign Currencies
Monetary assets and liabilities denominated in foreign currencies are
translated into US dollars at the rates of exchange prevailing at the
reporting date: $1.34 /£1 (2025: $1.29 /£1). Transactions in foreign
currencies are translated at the exchange rate ruling at the date of the
transaction. Exchange differences are taken to the Statement of Comprehensive
Income.
Foreign Operations
The assets are translated into US dollars at the exchange rate at the
reporting date and income and expenses of the foreign operations are
translated at the average exchange rates. Exchange differences arising on
translation are recognised in other comprehensive income and presented in the
other reserves category in equity.
Determination of Functional Currency and Presentational Currency
The determination of an entity's functional currency is assessed on an entity
by entity basis. A company's functional currency is defined as the currency of
the primary economic environment in which the entity operates. The functional
currency of the Parent Company is the pound sterling, because it operates in
the UK, where the majority of its transactions are in pounds sterling. The
functional currencies of Block Norioskhevi Ltd, Satskhenisi Limited, Georgia
New Ventures Inc and Block Rustaveli Limited are the US dollar, because the
majority of their transactions by value is in US dollars, and the functional
currencies of their branches and Block Operating Company in Georgia are the
Georgian Lari, because the majority of their transactions by value is in
Georgian Lari.
The presentational currency of the Group for year ended 31 December 2025 is US
dollars. The presentational currency is an accounting policy choice.
Revenue
Revenue from contracts with customers is recognised when the Group satisfies
its performance obligation of transferring control of oil or gas to a
customer. Transfer of control is usually concurrent with both transfer of
title and the customer taking physical possession of the oil or gas, which is
determined by reference to the oil or gas sales agreement. This performance
obligation is satisfied at that point in time.
The transaction price is agreed between the Group and the customer, with the
amount of revenue recognised being determined by considering the terms of the
Production Sharing Contract ("PSC") and the oil sales agreement for each oil
sale or the gas sales agreement for each gas sale.
Finance Income and Expenses
Finance costs are accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable. Finance expenses
comprise interest or finance costs on borrowings.
Financial Instruments
Financial assets and financial liabilities are recognised on the Group's
balance sheet when the Group becomes party to the contractual provisions of
the instrument.
Fair Value
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. All assets and liabilities, for which fair value is
measured or disclosed in the Financial Statements, are categorised within
the fair value hierarchy, described as follows, based on the lowest-level
input that is significant to the fair value measurement as a whole:
Level 1 - quoted (unadjusted) market prices in active markets for identical
assets or liabilities;
Level 2 - valuation techniques for which the lowest-level input that is
significant to the fair value measurement is directly or indirectly
observable; and
Level 3 - valuation techniques for which the lowest-level input that is
significant to the fair value measurement is unobservable.
Financial Assets
Financial assets are initially recognised at fair value, and subsequently
measured at amortised cost, less any allowances for losses using the expected
credit loss model, being the difference between all contractual cash flows
that are due to the Group in accordance with the contract and all the cash
flows that the Group expects to receive.
Impairment provisions for receivables from related parties and loans to
related parties are recognised based on a forward-looking expected credit loss
model. The methodology used to determine the amount of the provision is based
on whether there has been a significant increase in credit risk since initial
recognition of the financial asset.
For those where the credit risk has not increased significantly since initial
recognition of the financial asset, twelve month expected credit losses along
with gross interest income are recognised. For those for which credit risk has
increased significantly, lifetime expected credit losses along with the gross
interest income are recognised. For those that are determined to be credit
impaired, lifetime expected credit losses along with interest income on a net
basis are recognised.
Financial Liabilities
Financial liabilities are classified as either financial liabilities at fair
value through profit and loss ("FVTPL") or as other financial liabilities.
The Group derecognises financial liabilities when, and only when, the Group's
obligations are discharged or cancelled, or they expire.
Financial liabilities are classified at FVTPL when the financial liability is
either held for trading or it is designated at FVTPL. A financial liability is
classified as held for trading if it has been incurred principally for the
purpose of repurchasing it in the near term or is a derivative that is not a
designated or effective hedging instrument.
Financial liabilities at FVTPL are measured at fair value, with any gains or
losses arising on changes in fair value recognised in profit or loss. The net
gain or loss recognised in profit or loss incorporates any interest paid on
the financial liability.
Other financial liabilities, including borrowings, are initially measured at
fair value, net of transaction costs and are subsequently measured
at amortised cost using the effective interest method, with interest expense
recognised on an effective yield basis.
The effective interest method is a method of calculating the amortised cost of
a financial liability and of allocating interest expense over the relevant
period. The effective interest rate is the rate that exactly discounts
estimated future cash payments through the expected life of the financial
liability, or, where appropriate, a shorter period, to the net carrying amount
on initial recognition.
Share Based Payments
The fair value of options granted to Directors and others in respect of
services provided is recognised as an expense in the Statement of
Comprehensive Income with a corresponding increase in equity reserves - 'other
reserves'.
On exercise of, or expiry of unexercised share options, the proportion of the
share-based payment reserve relevant to those options is transferred from
other reserves to the accumulated deficit. On exercise, equity is also
increased by the amount of the proceeds received.
The fair value is measured at grant date and charged over the accounting
periods which the option becomes unconditional.
The fair value of options are calculated using the Black-Scholes model, taking
into account the terms and conditions upon which the options were granted.
Vesting conditions are non-market and there are no market vesting conditions.
These vesting conditions are included in the assumptions about the number of
options that are expected to vest. At the end of each reporting period, the
Company revises its estimate of the number of options that are expected to
vest. The exercise price is fixed at the date of grant and no compensation is
due at the date of grant. Where equity instruments are granted to persons
other than employees, the statement of comprehensive income is charged with
the fair value of the goods and services received.
Warrants issued for services rendered are accounted for in accordance with
IFRS 2 recognising either the costs of the service if it can be reliably
measured or the fair value of the warrant (using the Black-Scholes model).
The fair value is recognised as an expense in the accounting period that the
warrant is granted and there is no revision to this estimate in future
accounting periods.
Warrants issued as part of share issues have been determined as equity
instruments under IAS 32. Since the fair value of the shares issued at the
same time is equal to the price paid, these warrants, by deduction, are
considered to have been issued at nil value.
Employee Benefit Trust ("EBT")
The Group consolidates its Employee Benefit Trust as it is under its control.
Shares held by the EBT are recorded in equity as a deduction in Other
Reserves. When the Group issues shares to the EBT to satisfy employee
share-based payments, the shares are recorded at cost in Other Reserves,
consistent with the share-based payment expense recognised. This accounting
treatment aligns the issuance of shares with the associated IFRS 2 charge
recognised in equity.
2. Critical Accounting Judgments, Estimates and Assumptions
The Group makes estimates and assumptions regarding the future. Estimates and
judgements are continuously evaluated based on historical experiences and
other factors, including expectations of future events that are believed to be
reasonable under the circumstances. In the future, actual experience may
deviate from these estimates and assumptions. The key assumptions concerning
the future and other key sources of estimation uncertainty at the reporting
date that have a significant risk of causing a material adjustment to the
carrying amounts of assets and liabilities within the next financial year, are
described below.
Recoverable Value of Development & Production assets - Judgement,
Estimates and Assumptions
Costs capitalised in respect of the Group's development and production assets
are required to be assessed for impairment under the provisions of IAS 36.
Such an estimate requires the Group to exercise judgement in respect of the
indicators of impairment and also in respect of inputs used in the models
which are used to support the carrying value of the assets. Such inputs
include estimates of oil and gas reserves, production profiles, oil price, oil
quality discount, capital expenditure (including an allocation of salary
costs), inflation rates, and pre-tax discount rates that reflect current
market assessments of (a) the time value of money; and (b) the risks specific
to the asset for which the future cash flow estimates have not been adjusted.
Some indicators of impairment were noted in the year, due to the market
capitalisation being lower than the net asset value and the low oil price.
Management therefore conducted an impairment test and concluded that no
impairment was required. (see note 13).
Asset Decommissioning Provisions - Estimates and Assumptions
The Group's activities are subject to various laws and regulations governing
the protection of the environment. The Group recognises management's best
estimate of the asset decommissioning costs in the period in which they are
incurred. Such estimates of costs include pre-tax discount rates that reflect
current market assessments of (a) the risk free rate and (b) the risks
specific to the asset for which the future cash flow estimates have not been
adjusted. Actual costs incurred in future periods could differ materially from
the estimates.
Additionally, future changes to environmental laws and regulations, life of
development and production assets, estimates and discount rates could affect
the carrying amount of this provision. The Board assessed the extent of
decommissioning required as at 31 December 2025 and concluded that a provision
of $960,000 (2024: $933,000) should be recognised in respect of future
decommissioning obligations at Rustaveli, West Rustavi, Satskhenisi and Norio
(see note 18).
Share Options and Warrants - Estimates and Assumptions
Share options issued by the Group relate to the Block Energy Plc Share Option
Plan and warrants issued relates to the cost of borrowing. The grant date fair
value of such options and warrants is calculated using a Black-Scholes model
whose input assumptions are derived from market and other internal estimates.
The key estimates include volatility rates and the expected life of the
options. (see note 23).
Impairment of Investments and Loans to Subsidiaries - Parent Company only
The Company assesses at each reporting date whether there is any objective
evidence that investments/receivables in subsidiaries are impaired. To
determine whether there is objective evidence of impairment, a considerable
amount of estimation is required in assessing the ultimate realisation of
these investments/receivables, including valuation, creditworthiness and
future cashflow. Although no impairment of investments was indicated at year
end the Company identified certain intercompany receivables as being impaired.
During the year the Company carried out an assessment of the expected credit
loss arising on intercompany receivables. This was calculated as a total loss
allowance of $8,740,000 (2024: $8,402,000) therefore an additional amount of
$338,000 (2024: $305,000) was provided for in the current year parent company
financial statements.
3. Segmental Disclosures
IFRS 8 requires segmental information for the Group on the basis of
information reported to the chief operating decision maker for decision making
purposes. The Company considers this role as being performed by the Board of
Directors. The Group's operations are focused on oil and gas development and
production activities (Oil and Gas Extraction segment) in Georgia and has a
corporate head office in the UK (Corporate segment). Based on risks and
returns the Directors consider that there are two operating segments that they
use to assess the Group's performance and allocate resources being the Oil and
Gas Extraction in Georgia, and the corporate segment including unallocated
costs.
The Board of Directors primarily uses a measure of adjusted earnings before
interest, tax, depreciation and amortisation ('EBITDA'), see below, to assess
the performance of the operating sectors.
3 a) EBITDA
EBITDA excludes discontinued operations and the effects of significant items
of income and expenditure which might have an impact on the quality of
earnings, such as restructuring costs, legal expenses, and impairments where
the impairment is the result of an isolated, non-recurring event.
31 December 31 December
EBITDA 2025 2024
$'000 $'000
Oil and Gas extraction - Georgia 1,410 2,758
Corporate and other (2,345) (1,697)
Total EBITDA (935) 1,061
EBITDA reconciles to operating profit before income tax as follows:
31 December 31 December
2025 2024
$'000 $'000
Total EBITDA (935) 1,061
Depreciation and depletion (1,290) (1,236)
Finance and other income 102 68
Finance costs and foreign exchange (395) (502)
Loss before income tax from continuing operations (2,518) (609)
3 b) Other profit and loss disclosures
Oil and Gas Corporate Group
Extraction and other Total
Year ended 31 December 2025 $'000 $'000 $'000
Revenue 6,057 - 6,057
Cost of sales (4,168) - (4,168)
Depreciation and depletion (1,288) (2) (1,290)
Administrative costs (817) (1,812) (2,629)
Share based payments (86) (109) (195)
Finance and other income 57 45
102
Net Finance costs and Forex (45) (350) (395)
Loss before taxation (290) (2,228) (2,518)
Total non-current assets 23,551 4 23,555
Year ended 31 December 2024 $'000 $'000 $'000
Revenue 7,533 - 7,533
Cost of sales (3,518) - (3,518)
Depreciation and depletion (1,235) (1) (1,236)
Administrative costs (944) (1,624) (2,568)
Share based payments (312) (74) (386)
Finance and other income 64 4
68
Net Finance costs and Forex (92) (410) (502)
Profit/(loss) before taxation 1,496 (2,105) (609)
Total non-current assets 23,240 4 23,244
3 c) Segment assets and liabilities
31 December 2025 31 December 2024
Segmental Assets $'000 $'000
Oil extraction - Georgia 28,145 29,050
Corporate and other 1,548 433
29,693 29,483
Segmental Liabilities 31 December 2025 31 December 2024
$'000 $'000
Oil extraction - Georgia 1,371 1,514
Corporate and other 2,796 2,656
4,167 4,170
4. Revenue
Year ended Year ended
31 December
31 December
2025 2024
$'000 $'000
Crude oil revenue 5,326 6,678
Gas revenue 731 855
6,057 7,533
5. Depreciation and Depletion on Oil and Gas assets
Year ended Year ended
31 December
31 December
2025 2024
$'000 $'000
Depreciation of PP&E 322 311
Depletion of oil and gas assets 968 925
1,290 1,236
6. Expenses by nature
Year ended Year ended
31 December
31 December
2025 2024
$'000 $'000
Employee benefit expense 1,238 1,367
Share option charge 195 386
Professional and legal 729 557
Fees paid to the Group auditor - Group audit fees 137 115
Regulatory fees 29 28
Operating lease expense 75 79
Office and other costs 421 422
2,824 2,954
7. Directors and employees
Year ended Year ended
31 December
31 December
2025 2024
$'000 $'000
Employment costs (inc. Directors' remuneration):
Wages and salaries 1,757 1,637
Pensions 61 33
Social security costs 35 58
1,853 1,728
Share based payments 195 386
2,048 2,114
The share-based payments comprised the fair value of options granted to
Directors and employees in respect of services provided.
Wages and salaries include amounts that are recharged between subsidiaries,
based on timesheets, which evidence the direct attribution of employee time to
exploration and evaluation activities or the construction and development of
assets; only costs directly attributable to bringing an asset to its intended
condition are capitalised in accordance with IFRS 6 and IAS 16 respectively,
with the remainder expensed as incurred.
Of the total, $287,000 (2024: $193,000) has been capitalised within
intangibles and fixed assets, $328,000 (2024: $168,000) reported within cost
of sales and the remainder of $1,238,000 (2024: $1,367,000 are classified in
administration expenses.
The average monthly number of employees during 2025 was 119 (2024: 114) split
as follows:
Year ended Year ended
31 December
31 December
2025 2024
Management 4 5
Technical 100 94
Administration 15 15
119 114
Year ended Year ended
31 December
31 December
2025 2024
$'000 $'000
Amounts attributable to the highest paid Director:
Director's salary and bonus 607 581
Pension 31 28
Share based payments - 24
638 633
Key management and personnel are considered to be the Directors.
8. Other income
Year ended Year ended
31 December
31 December
2025 2024
$'000 $'000
Other income 64 4
Impairment reversal 1 31
65 35
9. Finance Expense
Year ended Year ended
31 December 2025 31 December 2024
$'000 $'000
Interest paid and payable on borrowings (note 17) 323 311
Warrant cost of borrowings (note - 244
22)
323 555
Less borrowing costs capitalised (note 13) - (124)
323 431
Unwinding of decommissioning provision (note 18) 42 44
365 475
10. Taxation
Based on the results for the year, there is no charge to UK or foreign tax.
This is reconciled to the accounting loss as follows:
Year ended Year ended
UK taxation 31 December 31 December
2025 2024
$'000 $'000
UK Group loss on ordinary activities (2,518) (609)
Loss before taxation at the average UK standard rate of 25% (2024:25%) (629) (143)
Effect of:
Zero tax rate income (1,514) (1,883)
Disallowable expenses - 89
Tax losses for which no deferred income tax asset was recognised (4,160) (2,581)
Current tax - -
The Group offsets deferred tax assets and liabilities if, and only if, it has
a legally enforceable right to offset current tax assets and current tax
liabilities and the deferred tax assets and deferred tax liabilities related
to corporation taxes levied by the same tax authority. Due to the tax rates
applicable in the jurisdictions of the Group's subsidiary entities (being 0%
in both years) no deferred tax liabilities or assets are considered to arise.
The Group has not recognised deferred tax assets for tax losses carried
forward in certain entities, where, whilst future profits are anticipated, the
probability and expected timing of those profits are such that it is not
considered sufficiently certain that the losses will be utilised within the
foreseeable future. Unrecognised deferred income tax assets relate to unused
tax losses. The Company has UK corporation tax losses available to carry
forward against future profits of approximately $12,278,000 (2024: $9,889,000
- estimated).
11. Loss Per Share
The calculation for loss per Ordinary Share (basic and diluted) is based on
the consolidated loss attributable to the equity shareholders of the Company
is as follows:
Year ended Year ended
31 December 2025 31 December 2024
Loss attributable to equity Shareholders ($'000) (2,518) (609)
Weighted average number of Ordinary Shares 798,087,509 729,860,105
Loss per Ordinary share ($/cents) (0.31)c (0.08)c
Loss and diluted loss per Ordinary Share are calculated using the weighted
average number of Ordinary Shares in issue during the year. Diluted share loss
per share has not been calculated as the options and warrants have no dilutive
effect given the loss arising in the year.
12. Intangible Assets
Exploration and Evaluation Assets ("E&E Assets") CCS Project Total
$'000 $'000 $'000
Brought forward 1 January 2025 197 71 268
Capitalisation of Project costs 159 223 382
Acquisition of licence through GOG SLADS 95 - 95
Carried forward 31 December 2025 451 294 745
During the year, the Group capitalised $382,000 of directly-attributable
expenditure: $159,000 in respect of E&E Assets (Project III and Project
IV), principally reflecting technical and geological studies and
licence-related costs incurred in advancing each project towards the next
stage of development; and $223,000 in respect of the CCS project, reflecting
Phase 2 feasibility activities including subsurface characterisation and
project-definition work. A further $95,000 was capitalised in respect of the
acquisition of a 10% participating interest in the XIQ PSC, indirectly through
the purchase of GOG SLADS Limited (see further details in the Investments note
below).
The Directors have assessed the carrying value of the Group's E&E assets
($451,000) at the reporting date for any indicators of impairment in
accordance with IFRS 6. Specifically, the Directors have confirmed that the
Group's rights to explore in each licence area remain valid and are expected
to be renewed where applicable, that further substantive expenditure on each
project is budgeted and planned, that exploration to date has not given rise
to a decision to discontinue activities in any of the relevant areas, and that
there is no other evidence to suggest that the carrying amount of any E&E
asset is unlikely to be recovered in full. Accordingly, no indicators of
impairment were identified and a full impairment review was considered
unnecessary.
The Directors have assessed the carrying value of the CCS project ($294,000)
for impairment in accordance with IAS 38. As an intangible asset not yet
available for use, an annual impairment test is required irrespective of
whether any indicator exists. Having performed that test, the Directors are
satisfied that the carrying amount is recoverable as the Phase 2 feasibility
is being progressed and further institutional funding is being actively
pursued. No amortisation is charged as the asset is not yet in use. No
impairment charge has been recognised in the year (2024: $nil).
All amounts capitalised are considered recoverable on the basis of the
technical and commercial progress of each project at the reporting date and
the Group's continued plans for further work in the next financial year.
13. Property, Plant and Equipment
Development & Production Assets PPE/Computer / Office Equipment / Motor Vehicles Total
$'000 $'000 $'000
Cost
At 1 January 2024 31,719 2,032 33,751
Additions* 408 161 569
Disposals - (27) (27)
Change in decommissioning provision (160) - (160)
Foreign exchange movements - (9) (9)
At 31 December 2024 31,967 2,157 34,124
Additions* 939 182 1,121
Disposals - (7) (7)
Change in decommissioning provision (15) - (15)
Foreign exchange movements - 14 14
At 31 December 2025 32,891 2,346 35,237
Accumulated depreciation
At 1 January 2024 8,985 914 9,899
Disposals - 5 5
Charge for the year 925 311 1,236
Foreign exchange movements (1) 9 8
At 31 December 2024 9,909 1,239 11,148
Charge for the year 968 322 1,290
Foreign exchange movements - (11) (11)
At 31 December 2025 10,877 1,550 12,427
Carrying Amount
At 31 December 2024 22,058 918 22,976
At 31 December 2025 22,014 796 22,810
*This includes additions of $nil (2024: $124,000) which relates to capitalised
borrowing costs.
During the year, indicators of impairment were identified, being the Group's
market capitalisation below net asset value and the decline in average Brent
crude from $80.52/bbl (2024) to $69.14/bbl (2025). Management conducted a
formal IAS 36 impairment test across its producing assets.
The recoverable amount was determined on a value in use basis using a
discounted cash flow model over a ten-year, ten-well development programme on
Project I, applying a pre-tax discount rate of 10%. At a base case oil price
of $80/bbl the NPV exceeded the total carrying value of $23.0m. Sensitivity
analysis at $60/bbl and $100/bbl produced NPV(10) values in excess of $23.0m.
A case at NPV(14) and $60 oil was also run which was also in excess of the
carrying value. These calculations are conservative in that they exclude
existing production as well as the significant contingent resources associated
with the Patardzueli-Samgori field (part of Project III), which had an
independent NPV(10) of over $500m gross. Management concluded that no
impairment was required under any scenario modelled.
Carrying amount of property plant and equipment by cash generative unit (CGU):
Georgian UK
Total
$'000 $'000 $'000
Carrying amount:
22,806 4 22,810
At 31 December 2025
At 31 December 2024 22,971 5 22,976
The Directors have reassessed the Group's cash-generating unit ("CGU")
structure during the year and have concluded that the Georgian producing
assets, previously analysed as separate CGUs by licence, are more
appropriately treated as a single CGU because the underlying fields and
reservoirs overlap, the assets share common infrastructure, and the cash
inflows generated by individual licences are not largely independent of one
another. Internal management monitoring of the producing portfolio is also
undertaken on an integrated basis. The comparative information has been
re-presented on the same basis; the change has no impact on the carrying
amount of property, plant and equipment.
14. Inventory
31 December 2025 31 December 2024
$'000 $'000
Spare parts and consumables 3,346 3,230
Crude oil 473 1,069
3,819 4,299
The amount of Crude oil recognised as an expense during the year and included
within cost of sales was $596,000 (2024: $22,000).
The Directors have assessed the recoverability of the Group's Spare parts and
consumables ("consumables") at the reporting date, including those items
identified as slow or non-moving. The consumables comprises operational
drilling, workover and production materials whose consumption is event-driven,
with cost recovery under the Group's Production Sharing Contracts arising only
upon use; reusable items are expected to be redeployed across wells and
projects in future periods. There is no indication of physical damage,
technical obsolescence or excess of carrying value over replacement cost.
Accordingly, the Directors have concluded that the carrying amount of
consumables does not exceed net realisable value and that no impairment loss
is required (2024: $nil).
15. Trade and Other Receivables
31 December 2025 31 December 2024
$'000 $'000
Trade debtors 635 574
Other receivables 125 118
Prepayments 66 112
826 804
The fair value at amortised cost is considered to be equivalent to the book
value as none of these receivables are considered to be impaired.
16. Cash and Cash Equivalents
31 December 31 December 2024
2025
$'000
$'000
Cash and cash equivalents 1,493 1,136
Cash and cash equivalents consist of balances in bank accounts used for normal
operational activities. The vast majority of the cash was held in an
institution with a Standard & Poor's credit rating of A-1.
17. Trade and Other Payables
31 December 31 December
2025 2024
$'000 $'000
Trade and other payables 521 740
Accruals 686 497
1,207 1,237
Trade and other payables principally comprise amounts outstanding for
corporate services and operational expenditure.
In 2023, the Company entered into a $2,000,000 loan with a simple interest
rate of 16% becoming payable every quarter. This was drawn down in two
tranches, with $1,060,000 being drawn down on 1 February 2023 and the
remainder of $940,000 being drawn down on 10 May 2023.
On 31 July 2024, the Company announced the extension of this loan facility for
a further 18 months to 2 February 2026, with each lender receiving further
warrants with an exercise price of 0.85p and expiry date of 30 July 2027.
91,185,133 warrants were issued which corresponds to an exercise value equal
to 50% of the total loan commitments under this facility. More details of
these warrants and their valuation are set out in note 22.
The loan was advanced for the purpose of the drilling of side tracks and
associated works as part of the Company's Project development strategy in
relation to the development of the Middle Eocene reservoir within West
Rustavi/Krtsanisi (Project I).
Post year end, on 29 January 2026, the Company announced a further extension
of this loan facility for a further 18 months to 2 August 2027 on materially
the same terms. Each lender received warrants with an exercise price of 1.2p
and expiry date of 28 January 2029. 60,386,474 warrants were issued which
corresponds to an exercise value equal to 50% of the total loan commitments
under this facility. The loan has been classified in short-term creditors as
the extension was not agreed until after the year end.
18. Provisions
Decommissioning provision 31 December 31 December 2024
2025
$'000
$'000
Brought forward 933 1,080
Unwinding of discount on provision 42 44
Change in decommissioning provision in the year (15) (191)
Carried forward 960 933
Decommissioning provisions are based on management estimates of work and the
judgement of the Directors. By its nature, the detailed scope of work
required, and timing of such work is uncertain.
2025 2024
Risk-free discount rate 3.7% - 4.8% 4.5% - 4.9%
Long-term inflation rate 2.7% 2.9%
Remaining licence periods 5 - 22 years 6 - 23 years
Estimated cost to decommission (undiscounted) $1.2m $1.2m
19. Share Capital
Called up, allotted, issued and fully paid No. Ordinary No. Deferred Nominal Value
$
Shares Shares
As at 31 December 2023 724,675,812 2,095,165,355 3,705,399
Issue of equity on 28 May 2024 2,264,648 - 7,220
Issue of equity on 28 May 2024 6,455,477 - 20,580
As at 31 December 2024 733,395,937 2,095,165,355 3,733,199
Issue of equity on 12 February 2025 35,912,008 - 111,372
Issue of equity on 27 May 2025 3,345,398 - 11,247
Issue of equity on 13 November 2025 214,282,000 - 704,278
Issue of equity on 21 November 2025 17,436,737 - 57,107
Issue of equity on 23 December 2025 7,275,412 - 24,584
As at 31 December 2025 1,011,647,492 2,095,165,355 4,641,787
On 12 February 2025, the Company issued 35,912,008 Ordinary Shares to two
employees for payment of their 2024 bonuses. This included one Executive
Director who received 31,167,431 Ordinary Shares in lieu of cash payment of
$285,538.
On 27 May 2025, the Company issued 3,345,398 Ordinary Shares to an ex-employee
on exercise of their nil cost options.
On 13 November 2025, the Company raised gross proceeds of £1.5 million
through a placing and subscription, issuing 214,282,000 new Ordinary Shares at
a price of £0.007 per Ordinary Share.
On 21 November 2025, the Company issued 1,868,825 Ordinary Shares to a former
employee as part of their severance package and 15,567,912 Ordinary Shares to
current employees following the closure of the Group Employment Benefit Trust
scheme.
On 23 December 2025, the Company issued a further 7,275,412 Ordinary Shares to
current employees following the closure of the Group Employment Benefit Trust
scheme.
On 28 May 2024, the Company issued 2,264,648 Ordinary Shares to two service
providers in lieu of cash settlement for services provided to the Company with
a total value of £24,000 ($30,604).
On 28 May 2024, the Company issued 6,455,477 Ordinary Shares to the Employee
Benefit Trust at par value.
The Ordinary Shares consist of full voting, dividend and capital distribution
rights and they do not confer any rights for redemption. The Deferred Shares
have no entitlement to receive dividends or to participate in any way in the
income or profits of the Company, nor is there entitlement to receive notice
of, speak at, or vote at any general meeting or annual general meeting.
20. Share Premium Account
$'000
Balance at 1 January 2025 34,879
Premium arising on issue of equity shares 1,513
Cost of share issue (90)
Premium arising on capital simplification exercise (see note 23) 656
Balance at 31 December 2025 36,958
$'000
Balance at 1 January 2024 34,856
Premium arising on issue of equity shares 23
Balance at 31 December 2024 34,879
21. Reserves
The following describes the nature and purpose of each reserve within owners'
equity.
Reserves Description and purpose
Share capital Amount subscribed for share capital at nominal value.
Share premium account Amount subscribed for share capital in excess of nominal value, less
attributable costs.
Other reserves Other reserves comprise the fair value of all share options and warrants which
have been charged over the vesting period, net of the amount relating to share
options which have expired, been cancelled and have vested. It also comprises
the shares issued to the EBT so their value is matched against the options
charged to this reserve. This movement has been shown in the Consolidated
Statement of the Changes in Equity and is also set out in the table below
Foreign exchange reserve Exchange differences on translating the net assets of foreign operations
Accumulated deficit Cumulative net gains and losses recognised in the income statement and in
respect of foreign exchange.
Other Reserves $'000
Balance at 1 January 2025 5,066
Share based payments 195
Share based payments - 2024 Bonus payments 94
Capital simplification (732)
Options movement (24)
Warrants and options cancelled (2,158)
Balance at 31 December 2025 2,441
Balance at 1 January 4,766
2024
Share based 320
payments
Share based payments - 2023 Bonus payments 312
Netting of EBT (332)
loan
Balance at 31 December 2024 5,066
The Employee Benefit Trust (EBT) loan has been netted off against reserves as
the shares held by the trust are considered part of the group and,
accordingly, have been treated like treasury shares for consolidation
purposes.
22. Warrants
Number of Warrants 31 December 2025 weighted average exercise price Number of Warrants 31 December 2024 weighted average exercise price
Outstanding at the beginning of the year 145,426,970 1.33p 54,241,837 2.2p
Granted in the year 107,140,000 1.0p 91,185,133 0.85p
Expired in the year (8,750,167) 3.0p - -
Outstanding at the end of the year 243,816,803 1.13p 145,426,970 1.33p
As at 31 December 2025, all warrants were available to exercise and were
exercisable at prices between 0.85p and 12.5p (31 December 2024: 0.85p and
12.5p). The weighted average life of the warrants is 1.03 years (31 December
2024: 2.0 years).
The warrants granted in the year related to the Fundraise completed during the
year and were issued as Investor Warrants on the basis of 1 warrant for every
2 new Ordinary Shares subscribed, with an exercise price of 1.0p and an expiry
date of 12 December 2026. The warrants meet the criterion in IAS 32 and were
issued to investors as part of an equity-for-cash transaction; they have
accordingly been recognised in equity, with no charge to profit or loss (IFRS
2 does not apply as the Warrants were not issued in exchange for goods or
services).
The warrants granted during the prior year related to the cost of borrowing
and therefore a fair value was calculated using the Black-Scholes Model.
This resulted in fair value charge of $244,000 being assigned to the warrants
granted to the lenders. The inputs used for the model are shown below in
note 23.
23. Share Options and Share Based Payments
On 14 November 2025, the Company announced a simplification of its capital
structure. The Company reviewed its capital structure and considered the
volume of unexercised share options - which, including both salary-sacrifice
nil-cost options and incentive plan options, comprise around 11.3% of fully
diluted share capital - to be a material overhang, highlighting the need for
simplification. This was completed through a voluntary scheme whereby staff
members holding options were given the choice to be issued with new ordinary
shares of 0.25 pence ("Shares") in the Company in exchange for cancelling all
outstanding options held by them or they could stay in the Scheme. All staff
members agreed to cancel their options and this Share Option Scheme ("EBT
Scheme") was closed.
In determining the number of new Shares to be issued to each option holder,
the Company has taken into account the Black-Scholes calculation of the
current fair value of existing options held by each option holder. The Board
believes that the value of new Shares to be issued to each respective option
holder (at the current share price - being the closing mid-market price of
0.75 pence per share at close of business 13 November 2025) to be equal to or
less than the intrinsic value of the options held using the Black-Scholes
valuation model. These new shares were issued via both the Employee Benefit
Trust (EBT) and the Company.
In addition, former members of staff, who had been issued a total of 9,434,291
nil-cost options as part of the salary sacrifice scheme, but who subsequently
left the Company were issued new three-year nil-cost options with an exercise
period ending 14 November 2028. This issue accounts for the unintended
consequence of the option agreements issued to them at the time which
contained provisions to lapse salary sacrifice options 90 days after the
cessation of their employment. To address a legacy administrative provision in
the agreements affecting salary sacrifice options, the Company has issued new
nil-cost options to former employees on the same terms as would have applied
had their awards remained active. This was under the new share option scheme
"Scheme 2025".
Number issued
Shares issued through EBT Scheme 70,657,687
Shares issued through Company (November and December 2025) 22,843,324
Total shares issued 93,501,011
New options issued to former employees ("Scheme 2025") 9,434,291
Share Option Scheme ("EBT Scheme")
The vesting period varies between 0 days to 3 years. The options expire if
they remain unexercised after the exercise period has lapsed and have been
valued using the Black-Scholes model.
The following table sets out details of all outstanding options granted under
the EBT Scheme.
2025 2025 2024 2024
Options Weighted average exercise price Options Weighted average exercise price
Outstanding at beginning of year 130,395,579 $0.01 99,785,841 $0.01
Granted during the period to 13 November 2025 10,548,289 $0.01 30,909,737 $0.01
Exercised during the period (5,399,063) - - -
Expired during the period - $0.02 300,001 $0.02
Outstanding on 13 November 2025 135,544,805 $0.01 130,395,579 $0.01
Options cancelled on closure of Scheme (135,544,805) - - -
Exercisable at the end of the period - - 95,190,127 -
The weighted average exercise price of the share options exercisable at 13
November is $0.00 (31 December 2024: $0.01). The weighted average contractual
life of the share-based payments outstanding at 13 November is 0 years (31
December 2024: 9.16 years).
The estimated fair values of these share options, and the inputs used in the
Black-Scholes model to calculate those fair values are as follows:
Date of grant Number Estimated Share Exercise price Expected volatility Expected life Risk free rate Exp. dividends
of options fair value price
30 June 2017 1,200,000 $0.04 $0.01 $0.03 84% 5.5 years 1.16% 0%
6 April 2018 4,400,000 $0.05 $0.04 $0.03 84% 10 years 1.34% 0%
11 June 2018 18,098,332 $0.04 $0.05 $0.05 84% 10 years 1.23% 0%
21 October 2019 6,325,000 $0.05 $0.06 $0.15 109% 9.0 years 0.63% 0%
1 March 2021 10,800,00 $0.04 $0.04 $0.06 192% 9.5 years 0% 0%
8 April 2022 25,200,000 $0.01 $0.02 $0.02 105% 10 years 1.75% 0%
28 May 2024 8,301,887 $0.01 $0.013 $0.013 70.5% 10 years 4.55% 0%
Number
of warrants
31 December 2020 8,750,167 $0.04 $0.04 $0.04 190% 5 years 0% 0%
1 February 2023 25,330,249 $0.003 $0.012 $0.017 70.5% 3 years 3.76% 0%
10 May 2023 19,352,394 $0.003 $0.013 $0.019 70.5% 3 years 3.57% 0%
2 August 2024 91,185,133 $0.004 $0.009 $0.009 70.5% 3 years 3.71% 0%
All share-based payment charges are calculated using the fair value of
options.
The following charges were incurred on the issue of the new options to former
employees and represent the only share options outstanding at year end.
2025 2025
Options Weighted average exercise price
Outstanding on 14 November 2025 - -
Granted on 12 December 2025 9,434,291 $nil
Exercisable at 31 December 2025 9,434,291 -
These nil cost options expire on 12 December 2028. They have a 3 year life and
were valued at the market price on issue being $0.01 (£0.0075).
Under IFRS 2, an expense is recognised in the statement of comprehensive
income for share based payments, to recognise their fair value at the date of
grant. The application of IFRS 2 gave rise to a charge of $ 195,000 for the
year ended 31 December 2025. The equivalent charge for the year ended 31
December 2024 was $ 386,000. The Group recognised total expenses (all of which
related to equity settled share-based payment transactions) under the current
plans of:
Year ended Year ended
31 December 31 December 2024
2025
$'000 $'000
Share option scheme (EBT) - before closure 102 386
New Share option scheme - "Scheme 2025" 93 -
195 386
For the options and warrants granted in 2023 to 2025, expected volatility was
determined by reviewing benchmark values from comparator companies. For the
options granted prior to 2023, expected volatility was determined by reference
to the volatility of historic trading prices of the Company's shares.
24. Financial Instruments
Capital Risk Management
The Company manages its capital to ensure that entities in the Group will be
able to continue as a going concern while maximising the return to
stakeholders. The overall strategy of the Company and the Group is to minimise
costs and liquidity risk.
The capital structure of the Group consists of equity attributable to equity
holders of the parent, comprising issued share capital, foreign exchange and
other reserves and retained earnings as disclosed in the Consolidated
Statement of Changes of Equity.
The Group is exposed to a number of risks through its normal operations, the
most significant of which are interest, credit, foreign exchange and liquidity
risks. The management of these risks is vested to the Board of Directors.
The sensitivity has been prepared assuming the liability outstanding was
outstanding for the whole period. In all cases presented, a negative number in
profit and loss represents an increase in finance expense/decrease in interest
income.
Credit Risk
Credit risk is the risk that the Group will suffer a financial loss as a
result of another party failing to discharge an obligation and arises from
cash and other liquid investments deposited with banks and financial
institutions and receivables from the sale of crude oil.
For deposits lodged at banks and financial institutions these are all held
through recognised financial institutions. The maximum exposure to credit risk
is $1,493,000 (2024: $1,136,000). The Group does not hold any collateral as
security.
The carrying value of cash and cash equivalents and financial assets
represents the Group's maximum exposure to credit risk at year end. The Group
has no material financial assets that are past due.
The Company has made unsecured loans at a simple interest rate of 5% to its
subsidiary companies. The loans are repayable on demand. A small amount of
these loans have been made to subsidiaries which though revenue generating are
not profit making, therefore there is a risk that they will not be fully
recoverable. An assessment of the expected credit loss arising on intercompany
loans is detailed in note 6 to the parent Company financial statements.
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 for the Company comprises of currency risk (discussed below) and
interest rate risk. Since there are no variable interest-bearing loans in the
Group (the Group Borrowings are set at a fixed rate of 16%), no risk is
therefore identified.
Currency Risk
Foreign currency risk can only arise on financial instruments that are
denominated in a currency other than the functional currency in which they are
measured. Translation-related risks are therefore not included in the
assessment of the entity's exposure to currency risks. Translation exposures
arise from financial and non-financial items held by an entity (for example, a
subsidiary) with a functional currency different from the Group's
presentational currency. However, foreign currency-denominated inter-company
receivables and payables which do not form part of a net investment in a
foreign operation would be included in the sensitivity analysis for foreign
currency risks; this is because, even though the balances eliminate in the
consolidated balance sheet, the effect on profit or loss of their revaluation
under IAS 21 is not fully eliminated.
A 10% increase in the strength of the pound sterling against the US dollar
would cause an estimated increase of $30,000 (2024: $94,000 increase) in the
loss after tax of the Group for the year ended 31 December 2025, with a 10%
weakening causing an equal and opposite decrease. The impact on equity is
the same as the impact on loss after tax.
The Group's cash and cash equivalents and liquid investments are mainly held
in US dollars, pounds sterling and Georgian Lari. At 31 December 2025, 90%
(2024: 1%) of the Group's cash and cash equivalents and liquid investments
were held in pounds sterling, 4% (2024: 67%) in Georgian Lari and 6% (2024:
32%) in US dollars.
Liquidity Risk
Liquidity risk arises from the possibility that the Group and its subsidiaries
might encounter difficulty in settling its debts or otherwise meeting its
obligations related to financial liabilities. In addition to equity funding,
additional borrowings have been secured in the past to finance operations. The
Company manages this risk by monitoring its financial resources and carefully
plans its expenditure programmes. Financial liabilities of the Group comprise
trade payables which mature in less than twelve months.
Type <3 months 3-12 months 1-2 years Total
$'000 $'000 $'000
Trade payables 1,080 43 84 1,207
Borrowings 2,000 - - 2,000
Total 3,080 43 84 3,207
25. Categories of Financial Instruments
In terms of financial instruments, these solely comprise of those measured at
amortised cost and are as follows:
31 December 2025 31 December 2024
$'000 $'000
Liabilities at amortised cost 1,207 1,237
Borrowings at amortised cost 2,000 2,000
3,207 3,237
Cash and cash equivalents at amortised cost 1,493 1,136
Financial assets at amortised cost 760 804
2,253 1,940
A fixed and floating charge has been placed over the assets owned by the Group
as security for the $2m borrowings. This will be discharged in full on payment
of these secured liabilities.
26. Subsidiaries
At 31 December 2024 and 2025, the Group consists of the following
subsidiaries, which are wholly owned by the Company.
Country of Incorporation Proportion of voting rights and equity interest
Company
Block Norioskhevi Ltd British Virgin Islands 100%
Satskhenisi Ltd Marshall Islands 100%
Georgia New Ventures Inc. Bahamas 100%
Block Operating Company LLC Georgia 100%
Block Rustaveli Limited British Virgin Islands 100%
Didi Lilo & Nakarala Limited British Virgin Islands 100%
GOG SLADS Limited British Virgin Islands 100% (acquired in 2025)
Subsidiaries - Nature of business
The principal activity of Georgia New Ventures Inc, Satskhenisi Ltd, Block
Norioskhevi Ltd, Block Rustaveli Limited, Didi Lilo & Nakarala Limited and
GOG SLADS is oil and gas development and production.
The principal activity of Block Operating Company LLC is to be the operator of
the oil and gas licences held in Georgia.
Registered office
The registered office of Georgia New Ventures Inc. is Bolam House, King and
George Streets, P.O. Box CB 11.343, Nassau, Bahamas.
The registered office of Satskhenisi Ltd is Trust Company Complex, Ajeltake
road, Ajeltake Island, Majuro, Marshall Islands MH96960.
The registered office of Block Rustaveli Limited, Block Norioskhevi Ltd, Didi
Lilo & Nakarala Limited and GOG SLADS is Aleman, Cordero, Galindo &
Lee Trust (BVI) Limited, 4(th) Floor, Omar Hodge Building, Road Town, Tortola,
VG1110, British Virgin Islands.
The registered office of Block Operating Company LLC is 13A Tamarashvili
Street, Tbilisi 0162, Georgia.
27. Commitments
Commitments at the reporting date that have not been provided for were as
follows:
Operating lease commitment
At year end the total of future minimum lease payments under non-cancellable
operating leases for each of the following periods was:
31 December 31 December 2024
2025
$'000
$'000
Within 1 year 69 69
Between 1 and 5 years - -
Total 69 69
Short term leases are leases with a lease term of 12 months or less without a
purchase option and are recognised on a straight-line basis as an expense in
the profit or loss account.
28. Related Party Transactions
The Directors consider that there is no ultimate controlling party.
Key management personnel comprise of the Directors and details of their
remuneration are set out in Note 7 and the Remuneration Report.
29. Events Occurring After Year End
Project IV (XIQ) Farm-Out Completion
On 19 January 2026, the Company announced completion of the farm-out of
licence XIQ (part of Project IV) to Aspect Georgia, following receipt of
Government of Georgia approval. Under the transaction, Block is fully carried
through a staged work programme estimated at approximately US$95 million,
including seismic, exploration and appraisal drilling and early production
facilities, with no capital exposure to Block. Aspect may earn up to a 75%
working interest, with an option to increase to 92.5% subject to additional
consideration.
Loan Facility Extension and Warrants
On 29 January 2026, the Company announced an 18-month extension of its
existing secured loan facility, taking the new maturity date to 2 August 2027
on materially the same terms. In consideration for the extension, each lender
was issued new warrants with an exercise price of 1.20 pence per Ordinary
Share, exercisable until 2 February 2029, with the number of New Warrants
issued to each lender equating to an exercise value of 50% of that lender's
loan commitment. Paul Haywood, CEO, participated pro rata on the same terms as
the other lenders in respect of his US$115,000 loan commitment and was issued
3,472,222 New Warrants. The independent directors, having consulted with the
Company's nominated adviser, considered the terms of the related party element
to be fair and reasonable insofar as shareholders are concerned.
CCS Pilot Study Completion
On 16 February 2026, the Company announced completion of the Phase 1 CCS pilot
study. Independent analysis by OPC confirmed the technical viability of
permanent carbon storage at Patardzueli-Samgori, with complete mineralisation
of the injected CO₂ into stable carbonate minerals within one to three
months and no evidence of gas phase migration or leakage.
Bonus Shares and Nil-Cost Options
On 23 February 2026, the Company issued 30,428,200 new Ordinary Shares and
granted 9,231,083 nil-cost options to senior executives as performance-related
bonuses in respect of the year ended 31 December 2025. The awards were
determined by reference to the volume-weighted average share price of 0.93
pence in January 2026. Of the shares issued, 25,922,903 were issued to Paul
Haywood, increasing his beneficial holding to 129,420,155 Ordinary Shares
(representing approximately 8.81% of the Company's issued share capital as of
the date of this report).
Project III Farm-Out Framework Agreement
On 14 April 2026, the Company entered into a binding Framework Agreement with
Sanning in respect of a farm-out of Project III only. On completion, Sanning
will acquire a 51% participating interest in Project III, Block will retain a
49% participating interest and remain operator throughout the appraisal
programme, and the transaction provides for an up to US$75 million carry
across appraisal and early facilities workstreams, subject to definitive
documentation, approvals and relevant project elections. The transaction does
not affect Block's ownership of Projects I, II, CCS, IX or existing oil and
gas production.
Strategic Entry into Offshore Gabon and associated Fundraise
On 27 April 2026, the Company announced a conditional secured convertible loan
of US$6.0 million to Pilgrim Exploration Limited which, upon conversion and
subject to any required approvals, will deliver the Group a 76.5% indirect
economic interest in the Ndjila and Mpari PSCs offshore Gabon. The PSCs cover
5,331 km(2) and contain four historical oil discoveries, together with broader
pre- and post-salt upside.
To fund the Gabon entry and provide additional working capital, the Company
launched a placing and WRAP retail offer at 1.1 pence per Ordinary Share. The
placing and retail offer raised gross proceeds of approximately US$6.30
million (approximately £4.66 million). The fundraise comprised 77,314,000
Firm Fundraise Shares and 345,893,916 Conditional Fundraise Shares, including
the Retail Offer Shares. The Firm Fundraise Shares were admitted to AIM on 1
May 2026 and, following shareholder approval at the General Meeting held on 18
May 2026, the Conditional Fundraise Shares were admitted to AIM on 19 May
2026, taking the enlarged issued share capital to 1,469,379,955 Ordinary
Shares.
Parent Company Statement of Financial Position for the Year Ended 31 December 2025
Company number: 05356303
Note
2025 2024
$'000 $'000
Non- current assets
Investments 2 7,032 6,422
Property, plant and equipment 4 4
7,036 6,426
Current assets
Trade and other receivables 3 22,258 21,994
Cash and cash equivalents 4 1,435 379
Total current assets 23,693 22,373
Total assets 30,729 28,799
Capital and reserves attributable to equity shareholders
Share capital 5 4,642 3,733
Share premium 5 36,958 34,879
Other reserves 5 2,441 5,066
Foreign exchange reserve 491 (89)
Accumulated deficit (16,600) (17,446)
Total equity 27,932 26,143
Non-current liabilities
Borrowings 11 - 2,000
Total non-current liabilities - 2,000
Current liabilities
Trade and other payables 6 797 656
Borrowings 11 2,000 -
Total current liabilities 2,797 656
Total liabilities 2,797 2,656
Total equity and liabilities 30,729 28,799
The Company has taken advantage of the exemption under section 408 of the
Companies Act 2006 by choosing not to present its individual Statement of
Comprehensive Income and related notes that form part of these approved
financial statements.
The Company's loss for the year from continuing operations is $1,312,000
(2024: loss of $1,033,000).
The financial statements were approved by the Board of Directors and
authorised for issue on 30 May 2026 and were signed on its behalf by:
Paul Haywood
Director
The notes on pages 88 to 92 form part of these financial statements.
Parent Company Statement of Changes in Equity for the Year Ended 31 December 2025
Share capital Share premium Accumulated deficit Foreign currency reserve Total equity
Other reserve
$'000 $'000 $'000 $'000 $'000 $'000
Balance at 31 December 2023 3,705 34,856 (16,413) 4,766 59 26,973
Comprehensive income
Loss for the year - - (1,033) - - (1,033)
Exchange differences on translation of foreign operations - - - - (148) (148)
Total comprehensive income for the year - - (1,033) - (148) (1,181)
Transactions with owners recognised directly in equity
Shares issued 28 23 - - - 51
Share based payments - - - 632 - 632
Shares held by EBT - - - (332) - (332)
Total transactions with owners 28 23 - 300 - 351
Balance at 31 December 2024 3,733 34,879 (17,446) 5,066 (89) 26,143
Comprehensive income
Loss for the year - - (1,312) - - (1,312)
Exchange differences on translation of foreign operations - - - - 580 580
Total comprehensive income for the year - - (1,312) - 580 (732)
Transactions with owners recognised directly in equity
Shares issued 898 2,156 - (656) - 2,398
Cost of issue - (90) - - - (90)
Share based payments - - - 195 - 195
Other reserve movement - - - 18 - 18
Options exercised 11 13 - (24) - -
Expired warrants and options - - 2,158 (2,158) - -
Total transactions with owners 909 2,079 2,158 (2,625) - 2,521
Balance at 31 December 2025 4,642 36,958 (16,600) 2,441 491 27,932
The notes on pages 88 to 92 form part of these financial statements.
Parent Company Statement of Cash Flows for the Year Ended 31 December 2025
Note 2025 2024
$'000 $'000
Cash flow from operating activities
Loss for the year before income tax (1,312) (1,033)
Adjustments for:
Depreciation 2 1
Intercompany interest and other income (1,386) (1,381)
Finance expense 323 431
Increase in ECL provisions for loans 10 338 305
Payables paid in shares 21 31
Share based payments expense 109 353
Foreign exchange movement 25 (19)
Operating cash flows before movements in working capital (1,880) (1,312)
(Increase)/decrease in trade and other receivables 3 (60) 303
Movement in trade and other payables* 6 469 (79)
Net cash used in operating activities (1,471) (1,088)
Cash flow from investing activities
Finance and other income 40 4
Expenditure in respect of investments/Fixed assets (78) -
Inter-Group amounts received (net) 1,006 1,617
Net cash used in investing activities 968 1,621
Cash flow from financing activities
Proceeds from share issues 5 1,972 -
Cost of share issues 5 (90) -
Finance costs (323) (311)
Net cash inflow/(outflow) from financing activities 1,559 (311)
Net increase in cash and cash equivalents in the year 1,056 222
Cash and cash equivalents at start of year 379 157
Cash and cash equivalents at end of year 4 1,435 379
Significant non-cash transactions*
During the year, accrued liabilities of $329,000 were extinguished through the
issue of ordinary shares. This represents a non-cash financing transaction and
has been excluded from the statement of cash flows. The shares were issued at
0.74p (0.92c) per share.
The notes on pages 88 to 92 form part of these financial statements.
Notes Forming Part of the Parent Company Financial Statements
1. Accounting policies
Basis of Preparation
These financial statements have been prepared on a historical cost basis and
in accordance with UK-adopted international accounting standards and as
regards the Company financial statements, as applied in accordance with the
requirements of the Companies Act 2006. All accounting policies are consistent
with those adopted by the Group. These accounting policies are detailed in the
notes to the consolidated financial statements, note 1. Any deviations from
these Group policies by the Company are detailed below.
Going Concern
The Directors have prepared cash flow forecasts for a period of 12 months from
the date of signing these financial statements. More details are included in
note 1 to the consolidated financial statements.
Investments in Subsidiaries
Investments in subsidiaries are recorded at cost. The Company assesses
investments for impairment whenever events or changes in circumstances
indicate that the carrying amount may not be recoverable. If any such
indication of impairment exists, the Company makes an estimate of its
recoverable amount. Where the carrying amount of an investment exceeds its
recoverable amount, the investment is considered impaired and is written down
to its recoverable amount. Where these circumstances have reversed, the
impairment previously made is reversed to the extent of the original cost of
the investment.
2. Investments
Shares in Group undertakings 2025 2024
$'000 $'000
Balance at 1 January 6,422 6,533
Acquisition of subsidiary 127 -
FX movement on translation of assets 483 (111)
Balance at 31 December 7,032 6,422
Investments in subsidiaries are recorded at cost, which is the fair value of
the consideration paid.
On 24 March 2025, the Company entered into a Share Purchase Agreement with
Georgia Oil & Gas Limited ("GOGL") under which the Company acquired 100%
of the issued share capital of GOG SLADS Limited ("GOG SLADS"), a company
incorporated in the British Virgin Islands (registered number 2033094). The
total cost of the investment recognised at year end comprises:
2025
$'000
Cash consideration paid to GOGL ($1) -
Contribution paid in relation to net work programme costs 77
Costs previously incurred through Didi Lilo - reclassified 50
Balance at 31 December 127
US$50,000 of directly-attributable acquisition costs, originally capitalised
as an intangible asset within Didi Lilo, has been reclassified during the year
into the cost of investment in GOG SLADS, with the corresponding intercompany
balance unwound. The reclassification is non-cash and has no impact on the
consolidated net assets of the Group.
The principal activity of GOG SLADS Limited is the holding of a 10%
participating interest in the XIQ PSC, an oil and gas exploration block in
Georgia, which, following the completion of the farm-out to Aspect Georgia in
2026 is now a 9.5% participating interest in the XIQ PSC.
At 31 December 2025, the carrying amount of the Company's net assets of
$27,932,000 (2024: $26,143,000) exceeded the Group's net assets of $25,526,000
(2024: $25,313,000) which is identified by IAS 36 Impairment of Assets as an
indicator that assets may be impaired. A formal impairment review of the
underlying Group assets was conducted, the results of which are set out in
Note 13 above. The recoverable amount of the CGUs, assessed on a value in use
basis at a pre-tax discount rate of 10%, exceeded their carrying value of
$22,980,000 in all scenarios modelled.
In respect of the Company's investments in subsidiaries and intercompany
loans, the Directors are satisfied these are recoverable. The carrying value
is underpinned by the ongoing cash-generative nature of Project I
(independently valued in 2022 for a 5-well programme at $57m NPV(10) on a 3P
basis) and, given the significant independently assessed NPV attached to each
of Projects III and IV individually - including the Patardzueli-Samgori
field's (part of Project III) independently valued NPV(10) of over $500m -
the recoverability of the carrying value is supported by the potential of any
one of these projects alone. The Company's market capitalisation of $9.6m at
31 December 2025 also exceeded the total cost of investments carried in the
Company balance sheet of $7.0m. Accordingly, no impairment of the Company's
investments or intercompany loans is considered necessary.
3. Trade and Other Receivables
2025 2024
$'000 $'000
Prepayments 66 12
Other receivables 44 37
Amounts due from Group undertakings 22,148 21,945
22,258 21,994
All of the above amounts are due within one year.
All trade and other receivables are denominated in pounds sterling. Amounts
due from Group undertakings are denominated in US dollars and repayable on
demand. The Company charges 5% interest per annum on intercompany loans.
Under IFRS 9, the Expected Credit Loss ("ECL") Model is required to be applied
to the intercompany loans receivable from subsidiary companies, which are held
at amortised cost. An assessment of the expected credit loss arising on
intercompany loans has been calculated and a cumulative loss allowance of
$8,740,000 has been provided for in the parent Company financial statements
($8,402,000 in 2024). A charge of $338,000 (2024: $305,000) was made in the
year.
4. Cash at Bank
2025 2024
$'000 $'000
Cash and cash equivalents 1,435 379
Cash and cash equivalents consist of balances in bank accounts used for normal
operational activities. The bank account is held within an institution with a
credit rating of A-1.
At 31 December 2025, 93% (2024: 2%) of the cash balances held by the Company
were held in pounds sterling, 7% (2024: 97%) in US dollars and nil (2024: 1%)
in other currencies.
5. Share Capital and Reserves
Details of share capital and reserve movements in the year are set out in
notes 19 and 21 to the consolidated financial statements.
6. Trade and Other Payables
2025 2024
$'000 $'000
Trade and other payables 110 128
Accruals and other creditors 687 528
797 656
Trade and other payables at 31 December 2025 comprised balances in US dollars
and pounds sterling.
7. Categories of Financial Instruments
In terms of financial instruments, these
solely comprise of those measured at amortised cost and are as follows:
31 December 2025 31 December 2024
$'000 $'000
Trade and other payables 110 158
Borrowings 2,000 2,000
Total financial liabilities at amortised cost 2,110 2,158
The carrying amounts of trade and other payables and the Borrowings are
considered to be the same as their fair values due to their short-term
nature. Details of the Borrowings are set out in note 17 to the consolidated
financial statements.
31 December 2025 31 December 2024
$'000 $'000
Other receivables 44 37
Amounts due from Group undertakings 22,148 21,945
Cash and cash equivalents at amortised cost 1,435 379
Total financial assets at amortised cost 23,627 22,361
The amounts due from Group undertakings includes a loss allowance of
$8,740,000 (2024: $8,097,000). The loans are repayable on demand and include a
5% (2024: 5%) per annum interest rate charge. They are all denominated in US
dollars, which differs from the parent Company's functional currency of pounds
sterling, and therefore there is an exposure to foreign currency risk. There
is no exposure to price risk as the underlying investments are expected to be
held to maturity.
8. Financial and Capital Risk Management
The Company's exposure to financial risks is managed as part of the Group.
Full details about the Group's exposure to financial risks and how these risks
could affect the Group's future financial performance are given in note 24 to
the consolidated financial statements. Information specific to the Company is
given below.
Credit Risk
For deposits lodged at banks and financial institutions these are all held
through recognised financial institutions. The maximum exposure to credit risk
is $1,435,000 (2024: $379,000). The Company does not hold any collateral as
security.
The Company has made unsecured interest payable loans to its subsidiary
companies and repayments have commenced during the year. Although the loans
are repayable on demand, they are unlikely to be fully repaid until the
projects become more developed and the subsidiaries start to generate
increased revenues. An assessment of the expected credit loss arising on
intercompany loans has been calculated and a loss allowance of $8,740,000
(2024: $8,402,000) has been provided for in the parent Company financial
statements.
Currency Risk
Foreign currency risk is the risk that fair value or future cash flows of a
financial instrument will fluctuate because of changes in foreign exchange
rates.
The Company undertakes transactions denominated in currencies other than its
functional currency (which is the pound sterling). For transactions
denominated in US dollars, the Company manages this risk by holding US dollar
against actual or expected US dollar commitments to act as an economic hedge
against exchange rate movements.
The Company's cash and cash equivalents and liquid investments are mainly held
in pounds sterling and US dollars. At 31 December 2025, 1% (2024: 1%) of the
Group's cash and cash equivalents and liquid investments were held in a
currency other than pounds sterling and US dollars. The currency risk is not
considered to be significant and has not been calculated. A 10% movement in
the strength of the pound sterling against the US dollar would increase the
net assets of the Company by $2,767,000 (2024: $2,697,000).
The exposure to other foreign currency exchange movements is not material.
This sensitivity analysis includes foreign currency denominated monetary items
and assumes all other variables remain unchanged. Whilst the effect of any
movement in exchange rates upon revaluing foreign currency denominated
monetary items is charged or credited to the income statement, the economic
effect of holding pounds sterling against actual or expected commitments in
pounds sterling is an economic hedge against exchange rate movements.
Capital Management
The capital of the Company is managed as part of the capital of the Group as a
whole. Full details are contained in note 24 to the consolidated financial
statements.
9. Commitments
Commitments at the reporting date that have not been provided for were as
follows:
UK operating lease commitment
At 31 December 2025, the total of future minimum lease payments under
non-cancellable operating leases for each of the following periods was:
2025 2024
$'000 $'000
Within 1 year 55 42
Between 1 and 5 years - -
Total 55 42
Short term leases are leases with a lease term of 12 months or less without a
purchase option and are recognised on a straight-line basis as an expense in
the profit or loss account.
10. Related Party Transactions
At 31 December 2025, the following subsidiaries owed the parent Company for
payments made and recovered on their behalf.
· Block Norioskhevi Ltd - $nil (31 December 2024: $nil)
· Georgia New Ventures Inc - $21,952,000 (31 December 2024:
$22,291,000)
· Satskhenisi Ltd - $nil (31 December 2024: $nil)
· Block Operating Company LLC - $2,775,000 (31 December 2024:
$2,612,000)
· Block Rustaveli Limited - (Debtor of $2,581,000) (31 December 2024:
Debtor of $3,394,000)
· Didi Lilo & Nakarala Limited - $nil (31 December 2024: $68,000)
· GOG SLADS Limited - $2,000
An estimated credit loss of $338,000 (2024: $305,000) was recognised in the
current year in relation to the loans to Satskhenisi Ltd, Block Norioskhevi
Ltd and Didi Lilo & Nakarala Limited, resulting in their impairment to a
nil carrying amount. The total estimated credit loss recognised to date is
$8,740,000 (2024: $8,402,000). Further details on related party transactions
can be found in note 28 to the consolidated financial statements.
11. Information Included in the Notes to the Consolidated Financial
Statements
Some of the information included in the notes to the consolidated financial
statements is directly relevant to the financial statements of the Company.
Please refer to the following:
Note 6 - Auditors' remuneration
Note 17 - Trade and other payables
Note 23 - Share based payments
Note 26 - Subsidiaries
Note 29 - Events occurring after the year end
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. END FR EAPSFDSDKEFA
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