REG - Caspian Sunrise plc - Annual report for the year ended 31 December 2024
01/12/2025 07:00
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RNS Number : 5296J Caspian Sunrise plc 01 December 2025
The information contained within this announcement is deemed to constitute
inside information as stipulated under the retained EU law version of the
Market Abuse Regulation (EU) No. 596/2014 (the "UK MAR") which is part of UK
law by virtue of the European Union (Withdrawal) Act 2018. The information
is disclosed in accordance with the Company's obligations under Article 17 of
the UK MAR. Upon the publication of this announcement, this inside information
is now considered to be in the public domain.
Caspian Sunrise PLC ("Caspian Sunrise" or the "Company")
Annual report and financial statements for the year ended 31 December 2024
HIGHLIGHTS
2024 Financial highlights #
· Total revenues $52.3m of which $31.5m is from continuing
operations (2023: $36.7 m of which $15.0m is from continuing operations)
· Oil sales revenues $20.8m all of which is from discontinued
operations (2023: $21.6m all of which is from discontinued operations)
· Oil trading revenues $15.9m all of which is from continuing
operations (2023: $10.3m all of which is from continuing operations)
· Oil services revenues $15.6m all of which is from continuing
operations. (2023: $4.7 million all of which is from continuing operations)
· Operating profit/(loss) $17.4m of which $5.1m is from continuing
operations (2023: $15.5m of which $(0.01) m is from continuing operations)
· Profit/(loss) before tax $17.1m of which $5.3m is from continuing
operations (2023: $14.8m of which $(0.2) m from continuing operations)
· Profit after tax $16.8m of which $7.4m is from continuing
operations (2023: $11.1m of which $(0.9) m is from continuing operations)
· Gross assets $135.2m (2023: $134.9m)
# 2024 & 2023 numbers extracted from the underlying Group
accounts before adjustments made under IFRS 5 Non Current Assets held for Sale
and Discontinued Operations relating to the presentation of the subsequent
sale in July 2025 of the MJF and South Yelemes structures at the BNG Contract
Area
2024 Operational highlights
· Production volumes 623,312 barrels (bbls) (2023: 665,114 bbls)
· First drilling charter completed for the Caspian Explorer under
the Group's ownership
· Renewal of the Sholkara licence on the Block 8 Contract Area
2025 Corporate highlights to date
· $88 million disposal of the shallow MJF and South Yelemes
structures on the BNG Contract Area
· Acquisition of the West Shalva Contract Area
2025 operational highlights to date
· Award of a 25 year production licence on the Airshagyl structure
for an initial three year period
· Acceptance by the Kazakh authorities of an initial 26 mmbls C1
reserves on the Airshagyl structure, with the scope to increase reserves in
the next three years
· Test production measured at the rate of 270 barrels of oil per
day (bopd) from Deep Well P1 & 846 bopd from Deep Well P2 on the
Sholkara structure on the Block 8 Contract Area
· 3,000 meter well spudded at the West Shalva Contract Area
Expected events during the remainder of 2025
· Yelemes Deep licence award
· Completion of the Block 8 Contract Area acquisition and
continuation of testing
· Target depths reached at the well being drilled at the West
Shalva Contract Area
· Results of the chemical treatment at Deep Well A6 on the BNG's
Airshagyl structure
· Signing of further drilling charters for the Caspian Explorer
· First mineral acquisitions
CHAIRMAN'S STATEMENT
Introduction
We are pleased to present the financial statements for the year ended 31
December 2024.
The Group's principal focus is on
· oil exploration and production
· oil trading
· onshore and offshore oilfield services
· mineral exploration and production
· other commercial projects
All projects to date are in Kazakhstan.
Overview
Much of the year under review was spent with corporate transactions, the most
notable being the sale of the producing shallow structures at our flagship BNG
Contract Area for a cash consideration of $88 million of which the $69.1
million due to date has been received.
Although the sale completed after the year end as it was planned before the
year end these financial statements are issued with the MJF and South Yelemes
structures being presented under IFRS 5 Non Current Assets Held for Sale and
Discontinued Operations in the consolidated statement of profit or loss as
discontinued operations and in the consolidated statement of financial
position as assets held for sale.
The decision to sell the BNG Contract Area's shallow structures made further
drilling there uneconomic after the completion of Well 815. Additionally, for
regulatory reasons, we were not able to drill new wells at either the assets
we were seeking to buy or at the BNG Contract Area's deep structures once the
full production licence upgrade applications there had been submitted.
Despite these distractions, declining production volumes and significant
regulatory delays, we report increased revenues and profit before and after
tax.
Since the period end we have completed the acquisition of the West Shalva
Contract Area. We are also at an advanced stage in the assessment of several
potential mineral acquisitions and other non-natural resources acquisitions.
The Group is now focused on developing its existing assets and those in the
process of being acquired and under evaluation.
Oil exploration and production
BNG Contract Area
Shallow structures
Since production commenced from the shallow structures in 2016 in excess of
4.5 million barrels of oil have been produced.
Aggregate production from the BNG shallow structures in 2024 was 623,312
barrels (2023: 665,114 barrels) at a rate of 1,707 bopd (2023 1,822 bopd). The
MJF and South Yelemes structures, which accounted for 100% of the Group's oil
production, were sold for $88 million in July 2025 and in these financial
statements in accordance with IFRS 5, the results of the disposal group have
been presented as profit or loss from discontinued operations in the
consolidated statement of profit or loss.
Deep structures
The Group has also invested more than $100 million at BNG's deep structures
where we believe the geology is a continuation of that present at the nearby
world class Tengiz and Kashagan assets. The deep structures are not part of
the $88 million BNG asset sale.
The combined appraisal licence for the Airshagyl and Yelemes deep structures
at the BNG Contract Area expired in 2024 and applications to upgrade to two
separate 25 year production licences were then submitted to the Kazakh
authorities.
Under the rules, no further development work is permitted from the expiry of
the old licences until the new licences are issued. In May 2025 the licence
for the Airshagyl structure was issued on a full production basis for an
initial three year period. We await a decision on the licence application for
the Yelemes Deep structure.
3A Best
Lack of available funding prevented any work at 3A Best, where the licence has
expired. Given the other opportunities available the Board has decided not to
seek the renewal of the 3A Best licence. As the investment at 3A Best was
already fully impaired there will be no material accounting impact.
Oil trading
Following a change in the regulations at the start of 2023 it became possible
to trade some of the oil we produce. Despite the volume of oil produced
falling during the year under review oil trading revenues grew strongly as the
result of a higher proportion of sales being to the domestic market rather
than the domestic mini refinery market.
Oilfield services
Onshore
The regulatory related delays at the Group's onshore existing and prospective
assets meant our CTS drilling subsidiary was far less active in 2024 than in
2023 with at the year-end two of its four principal rigs in storage.
As noted elsewhere in these financial statements the Group is in the process
of acquiring the Block 8 Contract Area.
Given the extensive delays in receiving the required regulatory approvals for
the acquisition of the Block 8 structure, noted in more detail later in this
report, once the licence at the Sholkara structure was renewed in Q4 2024, the
Group resumed testing work.
The costs for the work undertaken in 2024 are shown as CTS income. However, as
the benefit from the work undertaken will be for the Group rather than its
current owners, provided the acquisition of the Block 8 Contract Area
completes as expected these costs will be paid by the Group.
Offshore
During the summer months of 2024 we completed the Caspian Explorer's first
drilling contract under the Group's ownership for the Isatay Operating Company
LLP ("IOC"), a Kazakh registered explorer, in which Italy's ENI was the
leading participant, with the charter generating revenue of approximately
$14.3 million and a gross profit of approximately $3.8 million.
The well was drilled without any notable issues and quicker than expected.
However, with ENI subsequently exiting its Kazakh operations, we do not now
expect to drill the additional option well under the original contract and as
a result the Caspian Explorer has not been chartered in 2025.
While no additional charters for the Caspian Explorer have yet been confirmed
we are in discussions with potential partners concerning multi-year / multi-
well projects.
Recent financial strategy
With the potential huge upside of the BNG deep structures our focus in recent
years was to ensure we completed the onerous BNG deep structures work
programmes to qualify to extend the BNG deep structure licences to two
separate 25 year full production licences. This was not an easy task.
For the past 6 years we have funded the ongoing payment of $32 million
historic costs at the BNG Contract Area at the annual rate of $3.2 million.
We also had to deal with the impact of Covid during which the price for our
oil fell to $6 per barrel. More recently we have been faced with the impact of
Russian sanctions, which has resulted in oil sales since Q2 2022 being to the
domestic market at prices closer to $30 per barrel rather than more than
double that for international sales. We also had to source and pre-fund the
acquisition of drilling consumables from countries other than Russia.
Nevertheless, we were able to fulfil the BNG deep structure work programme
obligations without significant shareholder dilution. We did this by working
the BNG shallow structures hard and by incurring additional debt, principally
in the form of trade and other payables, which limited our ability to develop
our other existing assets and to take advantage of opportunities with new
assets.
In this light the Board considered a cash offer of $88 million for the BNG
Contract Area's shallow structures, on which the older wells were showing
signs of deterioration, was both attractive on a standalone basis and would
significantly improve the Group's stretched financial position.
The sale proceeds for the BNG shallow structures have for the first time in
many years allowed the Group to be properly funded, part of which is expected
to be used for new projects including mineral acquisitions, which typically
have shorter payback periods than for early stage oil & gas exploration
and where we would have a number of routes to market which would not be
affected by the impact of Russian sanctions.
Following completion of the announced corporate transactions underway the
Group would own three oilfields, being the BNG deep structures, Block 8 and
West Shalva and have an oil trading business; while also owning four on shore
drilling rigs and the Caspian Explorer.
Corporate Transactions
Disposal of the MJF & South Yelemes structures on the BNG Contract Area
In September 2024 shareholders overwhelmingly approved the sale of the BNG
shallow structures first announced in May 2024 for a headline cash
consideration of $88 million. Accordingly, no new significant development work
at the BNG Contract Area's shallow structures was undertaken after Well 815,
which was spudded in the summer of 2024, as the costs of new drilling could
not be recouped through additional production before the expected completion
of the asset sale.
The full $69.1 million due to date of the purchase consideration has been
received. A further $5.1 million is due to be paid in equal monthly
instalments over a 12 month period commencing 6 months after the formal
completion of the disposal. Additionally, a further $13.8 million is payable
by the purchaser to the Kazakh authorities over the next 5 years at the rate
of approximately $800,000 per quarter to fund the outstanding MJF structure's
Historic Cost liability.
The expected profit on disposal to be recognised in the 2025 financial
statements is $23 million.
Acquisition of the Block 8 Contract Area
In September 2023 we exercised our option to acquire the Block 8 Contract
Area.
Under the terms of the Block 8 Acquisition Agreement there is no significant
up-front cash payment or issue of shares. Virtually all the purchase
consideration is to be satisfied in cash via a royalty of $5 per barrel from
oil produced from the Block 8 Contract Area once owned by the Group, with the
purchase price capped at $60 million.
We believe Block 8 represents, in addition to the deep structures at BNG, a
second potentially transformative asset in that either or both may enjoy the
same geological characteristics of the nearby world class Tengiz and Kashagan
assets. Disappointingly, the process to secure the required regulatory
approvals has extended far beyond previous timescales.
The Block 8 Contract Area has three identified structures, namely the
Sholkara, Akkaduk and Toresay structures.
· The licence for the Sholkara structure was renewed for a 3 year
period in Q4 2024, which allowed development and testing work there to resume.
· Regarding the Akkaduk structure the application to renew the
licence has yet to be approved as delays in processing the application at one
Kazakh ministry resulted in a second Kazakh ministry deeming the subsequent
application to them to be out of time. While the Kazakh courts have
confirmed that they believe this is an issue between the two ministries they
have yet to order the second ministry to process the licence renewal
application.
· We are no longer interested in the Toresay structure.
We have decided to complete the acquisition of the Block 8 Contract Area on
the basis of the Sholkara licence alone while continuing to push for the
renewal of the Akkaduk licence.
To minimise the impact of the already extensive delays we asked the existing
owners to resume drilling and testing work on the Sholkara structure, which
will be funded by the Group assuming the acquisition of the Block 8 Contract
Area completes as expected.
Acquisition of West Shalva
In April 2024 independent shareholders approved the acquisition of the West
Shalva Contract Area for a maximum consideration of $15 million. The
acquisition was deemed be competed post year end in April 2025 (see note 31
for further details).
The initial $5 million consideration was satisfied in April 2025 by the issue
of 99,206,349 shares issued at 4p per share. On first oil an additional $5
million becomes payable by the issue of a further 99,206,349 shares, again to
be issued at 4p per share. Additionally, the first $5 million of revenue
derived from the sale of West Shalva oil once under the Group's ownership is
payable in cash to the vendor, in which case the maximum consideration would
be $15 million.
West Shalva is expected to be a far easier oilfield from which to produce oil
than either BNG or Block 8. It does not have the salt layer present at BNG
and Block 8, beneath which the exceptional temperatures and pressures have
made drilling difficult. Conversely, it does not have the same potential to
become a world class asset.
It is better located for access and to deliver oil being much closer to
refineries than either BNG or Block 8. It is also approximately 600 km further
south than BNG and Block 8 thereby enjoying a better climate, which should
result in fewer weather related delays than we encounter at BNG and are likely
to encounter at Block 8.
More strategically, owning West Shalva made it easier to consider selling the
shallow structures at BNG while preserving oil trading revenues and without
the need to have rigs idle. At the date of this report a CTS G40 rig is
drilling the first West Shalva well.
The appraisal licence at the West Shalva Contract Area runs until 2029. West
Shalva is a new Contract Area and accordingly has no existing assessed
reserves, although based on internal analysis and production from adjoining
fields, the Group's operational management believes that up to 80 million
barrels might be recoverable(1).
Mineral acquisitions
We continue to pursue several mineral opportunities, the most advanced is a
manganese project which is already profitable and generating cash.
Other projects being assessed include gold, copper, zinc and titanium. A key
determinant in the assessment of all these projects is the speed at which they
become cashflow positive.
Other projects
The Group's prime competitive advantages are its knowledge of Kazakhstan and
its access to international funding. Accordingly, on an opportunistic basis,
we will look at projects in Kazakhstan other than from our core oil & gas
and mineral sectors, where the board believes the Group's involvement would
add significant shareholder value. However, it is not expected that the scale
of such projects would exceed the Group's natural resources activities.
Governance & Regulation
As a company with shares that are publicly traded and also operating complex
oilfields, dealing with regulation is an everyday part of our corporate life.
However, the costs of maintaining the Company's public listing and the delays
in securing Kazakh regulatory consents for corporate transactions are at
all-time highs.
In particular, the delays in securing the regulatory consents required to
complete our corporate transactions coupled with the inability to develop
those assets while the transactions work their way through the regulatory
system come at a high price and one that ultimately falls on shareholders.
Realising shareholder value
Based on interest from time to time for certain of the Group's assets we
believe the Group's overall asset value is significantly greater than the
value implied by the Group's current market capitalisation.
The decline of AIM has been extensively chronicled elsewhere with many
companies opting to leave the market. However, we believe we can make the
market work for the benefit of shareholders. This would include at the
appropriate time using targeted share buy backs and / or special dividends to
provide liquidity no longer available through normal market trading.
Outlook
We believe we are in a much stronger position than for many years:
· The sale proceeds from the MJF / South Yelemes disposal provide
funding to move the Group forward.
· The financial pressure to complete the work programme to apply
for full production licences at the BNG Contract Area's deep structures is
behind us
· The award of a full production licence for an initial three year
period for the Airshagyl structure allows the continued development of a
potentially transformational asset.
· The well tests at the Block 8 Contract Area are encouraging and
once the Block 8 Contract Area acquisition completes should provide a second
potentially transformative asset to develop
· We have solid interest in further charters for the Caspian
Explorer
· The mineral projects under consideration are exciting and in a
sector far less affected by international sanctions than oil & gas
We therefore look to the future with renewed confidence.
Clive Carver
Chairman
28 November 2025
Contacts:
Zeus +44 (0) 203 829 5000
James Joyce
James Bavister
Andre de Andrade
This announcement has been posted to:
www.caspiansunrise.com/investors (http://www.caspiansunrise.com/investors)
Qualified Person
Mr. Sunjin Chang, a member of the Society of Petroleum Engineers, has
reviewed and approved the technical disclosures in these financial statements.
The person responsible for arranging the release of this announcement on
behalf of the Company is Clive Carver, Chairman of the Company.
This announcement has been posted to:
www.caspiansunrise.com/investors (http://www.caspiansunrise.com/investors)
(1)Recoverable Resources Those quantities of hydrocarbons that are estimated to be producible by the
project from either discovered or undiscovered accumulations.
OUR ASSETS
BNG Contract Area
The Group holds a 99% interest in the BNG Contract Area, having first taken a
stake in 2008, as part of the acquisition of 58.41% of a portfolio of assets
owned by Eragon Petroleum Limited. In 2017, we increased our stake to 99% upon
the completion of the merger with Baverstock GmbH. Since 2008, in excess of
$120 million has been spent at BNG, mostly at its deep structures.
The BNG Contract Area is located in the west of Kazakhstan 40 km southeast of
Tengiz on the edge of the Mangistau Oblast. We became operators at BNG in
2011, since when we have identified and developed both shallow and deep
structures.
Shallow structures
The shallow structures at the BNG Contract Area (MJF & South Yelemes) in
aggregate produced 623,312 barrels of oil in 2024 (2023: 665,114 barrels). The
decline in production being principally the result of increasing water content
at the older wells and after Well 815 there being no further drilling
following the agreement to sell.
The BNG shallow structures were sold in July 2025 for an aggregate headline
consideration of $88 million. To date $69.1 million of the disposal proceeds
have been received with $5.1 million of the balance due in 12 equal monthly
instalments commencing in Q1 2026. A further $13.8 million is due to be paid
by the purchasers direct to the Kazakh Government over the next 5 years in
respect of the MJF and South Yelemes structures outstanding Historic Costs
liability.
Deep structures
We have identified two deep structures at the BNG Contract Area. The first is
the Airshagyl structure, which extends to 58 km2. The second is the Yelemes
Deep structure, which extends over an area of 36 km2.
Airshagyl structure
Four deep wells have been drilled on the Airshagyl structure.
· Deep Well A5 was spudded in July 2013 and drilled to a total
depth of 4,442 meters. Attempts to remove a stuck pipe have to date not proved
successful and a new side track is planned in 2026
· Deep Well A6 was spudded in 2015 and drilled to a depth of 4,528
meters. A chemical treatment at the well is underway
· Deep Well A7 was spudded in December 2021, with a planned Total
Depth of 5,300 meters but primarily targeting an interval at a depth of 4,000
meters. In March 2022 drilling at Deep Well A7 was paused at a depth of 2,150
meters to allow the rig to be used to drill a horizontal well on the shallow
South Yelemes structure. Work is planned to drill the well to its planned
Total Depth in 2026
· Deep Well A8 was spudded in 2018 with a planned Total Depth of
5,300 meters, initially targeting the same pre-salt carbonates that were
successfully identified in Deep Well A5. The well has been assessed as
non-commercial and marked for abandonment.
No development work was permitted while the regulatory authorities considered
the applications to upgrade appraisal licences to two separate 25 year
production licences.
Yelemes Deep structure
Three deep wells have been drilled on the Yelemes Deep structure.
· Deep Well 801 was drilled in 2014 / 2015 to a depth of 5,050
meters. The well has been assessed as non-commercial and marked for
abandonment.
· Deep Well 802 was spudded in June 2022, with a planned Total
Depth of 5,300 meters. To date the well has not flowed at commercial rates. We
would wish to undertake a joint venture with a leading technical partner
before continuing work on this well.
· Deep Well 803 was spudded in December 2023 with a planned Total
Depth of 4,500 meters. Oil was encountered over a 60 meter interval between
depths of 3,360 and 3,420 meters. No further testing is permitted during the
period that the application to upgrade the licence is under consideration,
However, the oil pressure at the well has increased with oil of good quality
seeping to the surface.
Work at the Airshagyl structure became possible once again following the award
in May 2025 of the production licence, initially for a period of three years.
Work at the Yelemes Deep structure remains subject to the licence renewal
there.
3A Best
In January 2019, we acquired 100% of the 3A Best Group JSC, a Kazakh
corporation owning an existing Contract Area of some 1,347 sq. km located near
the Caspian port city of Aktau and where the licence expired some time ago.
The Board has decided with the other opportunities available to the Group not
to seek the renewal of the 3A Best licence.
Block 8
Background
The Block 8 Contract Area extends over 2,823 sq. km with three identified
structures and is approximately 160 km from the BNG Contract Area. The Block 8
licence was previously held by LG International the Korean conglomerate.
At 31 December 2024 and also at the date these financial statements were
approved the Block 8 Contract Area was not owned by the Group. The required
consent from the Kazakh Ministry of Energy has been received with completion
now dependent on the approval of the Kazakh Antimonopoly Authority.
Development activity
In 2023, in anticipation of the completion of the Block 8 acquisition and to
avoid delays in developing the asset while the ownership was changing, the
Group advanced $3.5 million by way of a secured loan to the vendors so they
could satisfy the then outstanding work programme commitments and develop the
oilfield for the ultimate benefit of the Group. This allowed two deep wells to
be drilled to depths of 4,203 meters and 3,449 meters respectively on the
Sholkara structure.
Following the renewal of the Sholkara structure licence in Q4 2024 development
and testing work resumed on that structure which, assuming the acquisition
completes as expected, will be funded by the Group.
At Well P1 on the Sholkara structure, oil has flowed on a test basis at rates
of up to 270 bopd. At Well P2 on the Sholkara structure oil has flowed on a
test basis at the rate of 846 bopd.
Two other wells were drilled in 2022 and 2023 to depths of 3,922 and 3,408
meters respectively on the Akkaduk structure. As noted elsewhere, testing of
these wells has not been permitted during the very extended period during
which the licence renewal applications are being considered by the Kazakh
regulatory authorities.
A 63 km gravel road is under construction to improve transportation for the
oil produced at the Block 8 Contract Area.
West Shalva
Background
At 31 December 2024 the West Shalva Contract Area was not owned by the Group.
Shareholders approved the acquisition in April 2024 and the acquisition
completed in April 2025.
The West Shalva Contract Area
The West Shalva Contract Area is rectangular in shape and extends over
approximately 25 km². It is located in the oil producing Zhetybay Steppe
Area in the Mangyshlak region of Western Kazakhstan approximately 90 km east
of Aktau and approximately 20 km north from the Zhetybay field, where an oil
processing plant is located and oil enters the Aktau / Atyrau main pipeline.
West Shalva was first identified as a potential oil producing location in the
mid 1970's. In 1977 and based on 2D seismic data, Well no. 4 (Wsh-4) was
drilled to the north and outside the structural closure of the West Shalva
prospect to a depth of 3,500 meters with a prime potential oil bearing
interval detected at a depth of 1,033 meters in the lower Triassic. After open
hole testing lasting only a few minutes the well was deemed not to have found
any commercial volumes of oil or gas despite oil being detected at three other
intervals. The well was then abandoned without running a production string.
In 2008 a 3D seismic survey was undertaken on the contract area, which
identified the West Shalva structure. In June 2022 oil was detected spilling
to the surface.
West Shalva is an early stage oilfield but with strong indicators from both
the adjacent Shalva field and from the available seismic information that it
is likely to produce oil in decent quantities. Additionally, it is expected
to be easier to drill than either BNG and Block 8 as the high pressure and
high temperature encountered in those fields are not present at West Shalva.
There is also no salt layer to penetrate and the field is closer to local
refineries with a history of higher prices than the refineries nearer BNG and
Block 8.
In summary, West Shalva is expected to be a much easier field to work than
either BNG or Block 8 and a good addition to the portfolio. As at Block 8 the
acquisition has been structured to avoid any up-front cash payments.
CTS
Drilling rigs
The Group, through its wholly owned subsidiary CTS, owns four drilling rigs
together with a workover rig. The largest rig is a G50 (capable of
supporting a drill string of 50 tonnes). There are two G40 rigs and a G20 rig.
At 31 December 2024 with no drilling at either the BNG shallow or deep
structures the two G40 rigs were in storage, with one identified to drill the
planned well on the West Shalva Contract Area. The G20 rig remains available
for smaller workovers.
Caspian Explorer
Introduction
The Caspian Explorer is a drilling vessel designed specifically for use in the
shallow northern Caspian Sea where traditional deep water rigs cannot be used.
The principal ways of exploring in such shallow waters are either from a land
base or using a specialist shallow drilling vessel such as the Caspian
Explorer, which we believe to be the only one of its type operational in the
Caspian Sea.
Land based options typically involve either the creation of man-made islands
from which to drill as if onshore or less commonly drilling out from an
onshore location. Both are expensive compared to the use of a specialist
drilling platform such as the Caspian Explorer.
Background
The Caspian Explorer was conceived of by a consortium of leading Korean
companies including KNOC, Samsung and Daewoo Shipbuilding. The vessel was
assembled in the Ersay shipyard in Kazakhstan between 2010 and 2011 for a
construction cost believed to be approximately $170 million. The Caspian
Explorer became operational in 2012 at a time of relatively low oil prices and
reduced exploration activity in the northern Caspian Sea.
The total costs after fit-out are believed to have been approximately $200
million. We believe a replacement would today cost in the region of $300
million and take several years from a decision to commission it for such a new
vessel to become operational.
Operational characteristics
The Caspian Explorer:
· operates principally between May and November in the Northern
Caspian Sea, which is subject to winter ice, and all year round elsewhere
· operates in seas with depths between 2.5 meters and 7.5 meters
· can drill to depths of 6,000 meters
· typically has a crew to operate the drilling vessel of 20
· has accommodation for approximately 100
Mooring
The Caspian Explorer has recently moved to the port of Ersay when not on
charter resulting in significant cost savings.
LICENCES & RESERVES
Licences
BNG
At the time of the acquisition of the BNG Contract Area in 2008, there was a
single licence issued in 2007, which was successively extended and that
covered the whole Contract Area.
· In 2018 a separate 25 year production licence running to 2043 was
granted for the shallow MJF structure from which the bulk of the oil produced
since 2016 has come. The other structures remained covered under the existing
appraisal licence.
· In 2021 another separate 25 year production licence running to
2046 was granted for the shallow South Yelemes structure, with the deep
Airshagyl and Yelemes Deep structures remaining covered by the existing
appraisal licence, which expired in Q3 2024.
· Applications for individual 25 year production licences for both
the Airshagyl and Yelemes Deep structures were submitted in Q3 2024.
· In May 2025 the production licence for the Airshagyl structure
was awarded for an initial three year period.
· We await the award of a new licence for the Yelemes Deep
structure.
The principal advantage of a full production licence is that the majority of
the oil produced may typically be sold by reference to international prices
rather than on the domestic market. However, since the introduction of
sanctions on Russia, which do not cover oil produced in Kazakhstan and
transported via the Russian pipeline network, all the Group's production has
been sold on the domestic market.
Block 8
The Block 8 licence at the Sholkara structure was renewed for a three year
period in Q4 2024.
As noted more fully elsewhere in this report the renewal of the Akkaduk
structure has been the subject of disagreements between two separate Kazakh
ministries. Further applications to the Kazakh court will be made to seek
the court to order the relevant ministries to renew the Akkaduk licence.
West Shalva
The licence at the West Shalva Contract Area is a six-year appraisal licence
running until 2029.
3A Best
The licence renewal at 3A Best expired some time ago. Given the Group's other
opportunities the board has decided not to seek the renewal of the 3A Best
licence.
Reserves
BNG
Shallow structures
In 2011 Gaffney, Cline & Associates ("GCA") undertook a technical audit of
the BNG licence area and subsequently Petroleum Geology Services ("PGS")
undertook depth migration work, based on the 3D seismic work carried out in
2009 and 2010.
In September 2016 GCA assessed the reserves attributable to the BNG shallow
structures (MJF & South Yelemes). Between then and the end of 2024,
approximately 4.5 mmbls of oil were produced, which under financial reporting
rules are deducted from the assessment of reserves as at 31 December 2024.
BNG As at 31 December 2024 As at 31 December 2023
mmbls mmbls
Shallow P1 13.0 13.6
Shallow P2 24.2 24.8
The structures on which these reserves were calculated were sold after the
year end and are no longer owned by the Group.
Deep structures
In conjunction with the licence extension applications in respect of the
Airshagyl and Yelemes Deep structures and referred to above under licences, we
were required to make submissions for formal recognition under the former
Soviet classification system used in Kazakhstan of reserves at both deep
structures based on information gained from the four deep wells drilled to
date at the Airshagyl structure and the three deep wells drilled to date on
the Yelemes Deep structure.
In June 2024 reserves under the former Soviet classification system were
independently assessed by SciRes, a Kazakh consultancy, based solely on the
vicinity of the immediate drainage area around Deep Wells A5, A6 & A7 as
being C1 49.0 million barrels & C2 as 28.9 million barrels.
In awarding the production licence for the Airshagyl structure, initially for
a three year period, the Kazakh Committee on Reserves certified C1 reserves of
26 mmbls with the opportunity over the next three years for increases
dependent on further drilling.
Block 8
An estimate of the reserves at Block 8 is planned following further testing.
West Shalva
To date there are no certified reserves in respect of the West Shalva Contract
Area. Again, we intend to commission an independent assessment of the West
Shalva reserves after completing the current 3,000 meter well.
3A Best
There were no certified reserves in respect of the 3A Best Contract Area.
FINANCIAL REVIEW
Basis of inclusion
Under IFRS 5 the shallow MJF and South Yelemes structures at the BNG Contract
Area are treated as assets held for sale at 31 December 2024 despite the sale
not being concluded until July 2025. Accordingly, in the consolidated profit
or loss statement there are no entries for the revenues, or the costs relating
to those assets for either the year ended 31 December 2024 or 31 December 2023
and instead the results are presented as profit for the year from discontinued
operations in the statement of comprehensive income.
To allow a meaningful analysis of trading through the year the following
segmental and other financial information set out below has been extracted
from the underlying financial records and reconciled to the financial
information set out in the consolidated profit or loss account, statement of
financial position and cashflows.
Overview
Years ended 31 December 2024 2024 2024 2023 2023 2023
Discontinued Continuing Total Discontinued Continuing Total
$'million $'million $'million $'million $'million $'million
Revenue
Oil production 20.8 - 20.8 21.6 - 21.6
Oil trading - 15.9 15.9 - 10.3 10.3
Onshore oilfield services - 1.3 1.3 - 4.1 4.1
Offshore oilfield services - 14.3 14.3 - 0.7 0.7
Total 20.8 31.5 52.3 21.6 15.1 36.7
Gross profit
Oil production 14.4 14.4 16.5 16.5
Oil trading - 6.2 6.2 - 4.9 4.9
Onshore oilfield services - (0.8) (0.8) - (0.9) (0.9)
Offshore oilfield services - 3.8 3.8 - 0.2 0.2
Total 14.4 9.2 23.6 16.5 4.2 20.7
Revenue
Total revenue in 2024 increased by approximately 43% to $52.3 million (2023:
$36.7 million). Of this revenue $20.8 million relates to discontinued
activities (2023: $21.6 million).
39.8% of total revenue was derived from oil sales (2023: 58.9%); 30.4% from
oil trading (2023: 28.1%), 2.5% from on shore oil services ( 2023:11.2%) and
27.3% from offshore oil services (2023: 1.9%).
Gross profit
Gross profit increased by approximately 14 % to approximately $23.6 million
(2023: $20.7 million) of which $14.4 million relates to discontinued
activities (2023: $16.5 million. This is principally as a result of the
contribution from the Caspian Explorer's first commercial drilling charter
under the Group's ownership and additional oil trading activity.
Oil production
With the 2025 sale of the MJF and South Yelemes structures oil production is
classified as a discontinued activity in these financial statements,
notwithstanding the Group's ongoing interest and very significant investment
in three other active oilfields.
Oil production revenue
Oil production revenue in 2024 was 3.8% lower at $20.8 million (2023: $21.6
million). Oil production gross profit was 13% lower at $14.4 million (2023:
$16.5 million). All oil production revenue in 2023 and 2024 related to
discontinued operations.
Oil prices
All production in the year under review was sold on the domestic market as was
the case in the preceding year. In 2024 the average price received per barrel
was approximately $33.4 compared to $32.5 in 2023.
Production volumes
Production in 2024 at 623,312 barrels was approximately 6% lower than in 2023
(665,114 barrels).
Oil trading
Oil trading is classified in these financial statements as a continuing
activity.
Under this heading we purchase crude oil and fund its refining, selling the
resultant oil products to third parties. To date we have adopted a
relatively low risk approach to oil trading having formed a 70:30 partnership
with an established trader with ourselves being the larger party and with our
30% partner providing the required funding.
Revenue from oil trading in 2024 was $15.9 million (2023: $10.3 million).
Gross profit from oil trading was $6.2 million (2023: $4.9 million). The
increase in oil trading revenue and gross profit in the period under review
reflects the increased proportion of oil sold to the domestic market
compared to the domestic mini refinery market.
Onshore oilfield services
Onshore oilfield services are classified in these financial statements as a
continuing activity.
Onshore oilfield services are conducted through our wholly owned CTS
subsidiary, which owns and operates four drilling rigs. Onshore oilfield
services revenue in 2024 was $1.3 million (2023: $4.1 million). Onshore
oilfield services gross loss in 2024 was $0.8 million (2023: a gross loss of
$0.9 million).
CTS's work at Block 8 following the renewal of the Sholkara structure's
licence in Q4 2024, which accounts for 100% of the CTS income for the year,
under IFRS rules is treated as third party income. However, provided the Block
8 acquisition completes as expected then any benefits from this drilling work
will ultimately be obtained by the Group and the costs will be paid by the
Group.
Offshore oilfield services
Offshore oilfield services is classified in these financial statements as a
continuing activity.
Offshore oilfield oil services are conducted through the Caspian Explorer, a
drilling platform specifically designed to explore the shallow northern
Caspian Sea.
Offshore oilfield services revenue, delivered by the Caspian Explorer's
charter for a consortium led by Italy's ENI, was $14.3 million (2023: $0.6
million). Gross profit in 2024 was $3.8 million (2023: $0.2 million).
Selling expenses
Selling expenses fell by approximately 27% to $2.2 million (2023: $3.0
million) mainly as the result of a higher proportion of sales in the year
being to the mainstream domestic market rather than to the domestic mini
refinery market. Of these amounts $0.2 million related to continuing
operations (2023: $1.9 million) and $2.1 million related to discontinued
operations (2023: $1.0 million).
Administrative costs
Administrative costs fell by approximately 35% from $6.0 million in 2023 to
$3.9 million in 2024. Continuing administrative costs were approximately
$1.6 million lower at $2.4 million compared with $4.0 million in 2023.
Discontinued administrative costs also fell from $2.1 million in 2023 to $1.5
million in 2024.
Other income
Other income in 2024 was nil ( 2023: $3.8 million, which related to the write
back of long standing but no longer required provisions).
Operating profit
2024 operating profit was $17.5 million, of which operating profit from
continuing operations was $5.1 million (2023: $15.5 million, of which the
operating profit from continuing operations was nil).
Profit for the year before tax
Profit before tax was $17.1 million (2023: $14.8 million) of which $5.3
million was for continuing activities (2023: a loss of $0.2 million) and $11.8
million related to discontinued operations (2023: $15.0 million).
Tax
Total tax fell from $3.7 million in 2023 to $0.2 million in 2024. The tax
credit on continuing activities in 2024 was $2.1 million (2023: $0.7 million
charge) with a tax charge in 2024 on discontinued operations of $2.4 million
(2023: 3.0 million).
Profit for the year after tax
Profit for the year after tax was $16.8 million (2023: $11.1 million) of which
$7.4 million related to continuing operations (2023: loss of $0.9 million) and
$9.4 million related to discontinued operations (2023: $12.0 million).
Oil and gas assets
Unproven oil & gas assets
The carrying value of unproven oil and gas assets fell by approximately $2.9
million to approximately $49.1 million (2023: $52.0 million) principally as
the result of foreign exchange differences despite a further $6.4 million
additions during 2024.
Proven oil & gas assets
Proven oil & gas assets at 31 December 2024 were $ nil million (2023:
$60.6 million), following the transfer of all proven oil & gas assets to
assets held for sale.
Oilfield services assets
These are the Caspian Explorer, the drilling rigs owned by the Group and other
equipment and motor vehicles and increased in value from $4.4 million in 2023
to $4.5 million in 2024 through a combination of depreciation, foreign
exchange differences and some transfers to assets held for sale. Of this the
Caspian Explorer's carrying value remained at $1.7 million. (2023: $1.7
million).
Trade and other receivables
Trade and other receivables due within 12 months fell to approximately $8.2
million (2023: $12.1 million). Of this trade receivables were $3.8 million
(2023: $3.7 million); prepayments were $2.2 million (2023: $4.3 million);
recoverable VAT fell by $2.0 million to $0.9 million (2023: $2.9 million);
with other receivables remaining at $1.3 million (2023: $1.3 million).
Cash position
At the year-end we had cash at bank balances of approximately $2.6 million
(2023: $0.4 million). At the date of these financial statements the Group held
approximately $23 million in cash.
Tax liabilities and receivable
At the year-end, the Group had a corporation income tax receivable of $1.8
million (2023: $1.0 million liability) due to mandatory tax payments on
account being higher than the expected tax charge.
Current liabilities
Trade and other payables under 12 months (excluding historic costs and
provisions)
Trade and other payables increased by $4.7 million to $20.8 million (2023:
$16.1 million). The increase reflected the Group's financial constraints in
the run up to completion of the sale of the MJF and South Yelemes structures.
Third party borrowings
Borrowings at 31 December 2024 was $5.5 million (2023: $6.7 million).
Provisions
The provisions for payments due in less than 12 months were approximately $3.7
million (2023: $4.5 million), which are mainly social obligations.
Liabilities relating to assets held for sale
Liabilities relating to assets held for sale at 31 December 2024 were $15.2
million (2023: $ nil) comprising $13.8 million MJF and South Yelemes
structures historic cost and approximately $1.4 million associated asset
retirement obligations.
Liabilities due after 12 months
These decreased by $19 million to $21.2 million at 31 December 2024 (2023:
$40.2 million. Of the decrease $13.7 million related to the MJF and South
Yelemes structures historic costs liabilities transferred to liabilities
relating to assets held for sale noted above
Additionally, within the overall $21.2 million due, deferred tax liabilities
fell to $6.4 million (2023: $7.4 million) and other long term payables fell
from $14.9 million to $12.3 million.
BNG historic costs
We have continued to pay down the historic costs assessed against the BNG
Contract Area. At 31 December 2024, of the original $32 million levied in 2019
approximately $13.9 million remained to be paid over the next five years, of
which approximately $3.2 million was to be paid within 12 months.
Following completion of the sale of the MJF and South Yelemes structures the
purchaser is responsible for the repayment of these historic costs.
Cashflows
During the period under review approximately $54.8 million was received from
customers and approximately $37.3 million paid out to suppliers, creditors and
staff with a further $6.4 million spent on unproven oil and gas assets and
$9.4 million spent on property plant and equipment. A further $0.7 million was
paid to related parties in connection with the Block 8 loan..
The above less the total repayments of loans and interest of $0.5 million
resulted in cash balances at the year-end increasing from $1.2 million to $2.6
million.
Going Concern
The financial strategy of the Group in recent years has been to fund
compliance with work programme commitments in particular at the BNG Contract
Area's deep structures and where possible to expand the Group's activities
without unduly diluting shareholders longer term interests. This inevitably
stretched the short and medium term creditor position to levels at the period
end and subsequently which in a more established Group might appear excessive.
Completion of the sale of the MJF and South Yelemes structures, with at the
date of this report the receipt of $69.1 million of the disposal proceeds, has
allowed the repayment of a significant portion of the year end debt and a
material reduction in the amounts due to trade and other creditors.
Additionally the $13.8 million outstanding historic costs relating to the
MJF and South Yelemes structures are now the responsibility of the purchaser
of the MJF and South Yelemes structures.
At the date of these financial statements the Group has cash of approximately
$23 million, which is significantly in excess of the Group's financial
commitments over the next 12 months
Accordingly, the Board for the first time in many years, no longer considers
there to be a material uncertainty regarding the assessment of the Group's
financial position and have adopted the going concern basis in preparing these
financial statements.
In assessing the Group's adoption of the going concern basis in the
preparation of these financial statements the Board has assessed cash flow
forecasts prepared for the period to 31 December 2026 and assessed the risks
and uncertainties associated with the operations and funding position,
including Block 8 and West Shalva.
Clive Carver
Chairman
28 November 2025
QUALIFIED PERSON & GLOSSARY
Qualified Person
Mr. Sunjin Chang, a member of the Society of Petroleum Engineers, has
reviewed and approved the technical disclosures in these financial statements.
Glossary
SPE - the Society of Petroleum Engineers
Bbl - barrels of oil
Bopd - barrels of oil per day
mmbls - million barrels
Proven reserves
Proven reserves (P1) are those quantities of petroleum which, by analysis of
geosciences and engineering data, can be estimated with reasonable certainty
to be commercially recoverable, from a given date forward, from known
reservoirs and under defined economic conditions, operating methods, and
government regulations.
If deterministic methods are used, the term reasonable certainty is intended
to express a high degree of confidence that the quantities will be recovered.
If probabilistic methods are used, there should be at least a 90% probability
that the quantities actually recovered will equal or exceed the estimate.
Probable reserves
Probable reserves are those additional reserves which analysis of geosciences
and engineering data indicate are less likely to be recovered than proved
reserves but more certain to be recovered than possible reserves. It is
equally likely that actual remaining quantities recovered will be greater than
or less than the sum of the estimated proved plus probable reserves (2P). In
this context, when probabilistic methods are used, there should be at least a
50% probability that the actual quantities recovered will equal or exceed the
2P estimate.
Possible reserves
Possible reserves are those additional reserves which analysis of geosciences
and engineering data indicate are less likely to be recovered than probable
reserves. The total quantities ultimately recovered from the project have a
low probability to exceed the sum of proved plus probable plus possible (3P),
which is equivalent to the high estimate scenario. In this context, when
probabilistic methods are used, there should be at least a 10% probability
that the actual quantities recovered will equal or exceed the 3P estimate.
Contingent resources
Contingent resources are those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from known accumulations, but the
applied project(s) are not yet considered mature enough for commercial
development due to one or more contingencies.
Contingent resources may include, for example, projects for which there are
currently no viable markets, or where commercial recovery is dependent on
technology under development, or where evaluation of the accumulation is
insufficient to clearly assess commerciality.
Contingent resources are further categorised in accordance with the level of
certainty associated with the estimates and may be sub-classified based on
project maturity and/or characterised by their economic status.
Prospective resources
Prospective resources are those quantities of petroleum estimated, as of a
given date, to be potentially recoverable from undiscovered accumulations.
Potential accumulations are evaluated according to their chance of discovery
and, assuming a discovery, the estimated quantities that would be recoverable
under defined development projects.
THE KAZAKH OIL AND GAS LICENCING AND TAXATION ENVIRONMENT
Kazakhstan
The Republic of Kazakhstan is mostly in Central Asia, with a part in Eastern
Europe. It borders Russia to the north and west, China to the east, Kyrgyzstan
to the southeast, Uzbekistan to the south and Turkmenistan to the southwest,
with a coastline along the Caspian Sea.
Kazakhstan is the ninth largest country by land area and the largest
landlocked country. Its population is 20 million with one of the world's
lowest population densities. It dominates Central Asia economically accounting
for 60 per cent of the region's GDP, primarily through its oil & gas
industry and its vast mineral resources.
Oil produced in Kazakhstan but transported through the Russian pipeline
network is specifically exempted from international sanctions. However, for
our recent production volumes accessing the Russian pipeline network is not
economical and there are no other commercially effective distribution options
to access international markets. We have sold on the domestic markets where
prices are far lower but so too are the applicable taxes and operational costs
and where it is permitted to trade the oil produced.
Oil & gas is a heavily regulated industry throughout the world, with
strict rules on licencing and taxation. Set out below is a summary of the
position in Kazakhstan.
Licensing
Exploration licences
The initial licence to develop a field is an exploration licence where the
focus is on completing agreed work programmes. Exploration licences are
typically two years in duration and it is usual for there to be several
consecutive two-year exploration licence extensions agreed during the
exploration phase.
Appraisal licences
In the event the project appears commercial, the exploration licence is
typically upgraded to an appraisal licence.
Under an appraisal licence, oil produced incidentally while exploring and
assessing may be sold but only at domestic prices. Taxation under an appraisal
licence is limited with only modest deductions. Changes to the legislation in
the last few years have reduced the length of appraisal licences from six to
five years, with a concession of reduced social obligation payments.
Full production licences
To sell oil by reference to world prices requires that either the Contract
Area as a whole or a particular structure has to be upgraded to a full
production licence. Under a full production licence there is only limited
scope to develop areas not already drilled. Additionally, a significant
minority portion of production typically remains at domestic prices although
the majority can be sold by reference to international prices.
Recent experience
Our experience with the ongoing asset acquisitions and licence upgrade
applications is that the process seems to be taking significantly longer than
in previous years. As set out in greater detail in the Chairman's Statement
the restrictions on drilling and developing assets during the review process
is accordingly having a much greater negative financial impact than expected.
Taxes
There are five different taxes that apply to Kazakh oil & gas producers.
Each has its own basis of calculation with some being related to profits,
others by reference to international oil prices and yet others by reference to
the volume of oil sold. The overall impact is that as international prices
increase so typically does the percentage taken by the Kazakh state.
STRATEGIC REPORT
Introduction
This strategic report comprises: the Group's objectives; the strategy; the
business model; and a review of the Group's business using key performance
indicators. The Chairman's statement, which together with the review of the
Group's assets and the financial review also form the main part of the
strategic review, contain an assessment of the development and performance of
the Group's business during the financial year, and the position of the
Group's business at the end of that year. Additionally, a summary of the
principal risks and uncertainties facing the business is set out immediately
after the Directors' report.
Objectives
The Group's objective is to create sustainable shareholder value from the
development of oil & gas and mineral projects and associated activities
and also other assets in Kazakhstan where the board believes they would add
shareholder value.
The Group has a number of secondary objectives, including promoting the
highest level of health and safety standards, developing our staff to their
highest potential and being a good corporate citizen in our chosen countries
of operations.
Strategy
The Group's long-term strategy is to increase shareholder value by building an
attractive portfolio of oil & gas, mineral and other assets, initially in
Central Asia, and in particular Kazakhstan, where the board has the greatest
experience.
Since 2008, the Group's principal asset has been its 99% interest in the BNG
Contract Area, on which both shallow and deep structures have been identified.
In September 2024 shareholders overwhelmingly approved the sale of the BNG
shallow structures for a headline cash consideration of $88 million of which
$69.1 million has to date been received.
Separately, in February 2025 we announced a potential $72.5 million investment
in the BNG Contract Area's deep structures from a prominent middle east
institutional investor to fund the further development of the BNG Contract
Area's deep structures, which if completed would result in the Group's
shareholding in the BNG deep structures reduced to 50%.
In April 2025 the Group completed the acquisition of the West Shalva Contract
Area for a maximum consideration of $15 million.
The Group also has a 100% interest in the Caspian Explorer, a shallow water
drilling vessel designed for the northern parts of the Caspian Sea.
The Group has also conditionally agreed to acquire a 100% interest in the
Block 8 Contract Area for a maximum consideration of $60 million, payable via
royalties on future Block 8 oil production at the rate of $5 per barrel.
The Group is also close to making its first mineral acquisitions.
Business model
The business model is straightforward. To take assets at any stage of the
development cycle and to improve them to the point they contribute to the
Group's profitability or that they may be sold on at a profit to provide
funding for additional development.
As important as drilling success is judging when to sell. In 2015 we sold
the Group's second Contract Area Galaz for $100 million and in 2025 we sold
the ageing BNG shallow structures for $88 million.
Approaching $200 million has been spent on the BNG assets of which
approximately $120 million has been spent by the Group since 2008, the
majority of which on the deep structures. Success with BNG's deep structures
would be a transformative event. The $72.5 million third party funding
identified to further develop BNG's deep structures would help diversify the
Group's risk and allow other projects to be progressed while still maintaining
significant upside potential.
We also believe Block 8 has the potential to at least match BNG. West Shalva
adds a third oil & gas asset, but without the high temperature and
pressures present at BNG and Block 8.
Mineral and other acquisitions are expected to further diversify risk and
generate revenues at a faster pace than early stage oil & gas projects.
Further growth by acquisition
The Group will consider acquiring additional assets or related businesses
where the Board believes they would increase shareholder value, including
assets outside its core oil & gas and mineral sectors where such
acquisitions would not represent the majority of the Group's activities.
The Directors also believe the Group is exceptionally well placed through its
strong local Kazakh presence to identify and buy undervalued oil & gas
assets and mineral and other assets on an opportunistic basis.
Climate Change
As principally a natural resources exploration and production company, we
recognise our environmental responsibilities to all our stakeholders and in
particular to the local communities in which we operate.
However, other than a longer term general move away from fossil fuels once
renewable alternatives are available in sufficient quantities and at
comparable prices, the Board is not aware of any indications that the impact
of climate change is likely to have a material impact on the Group's business
over the short and medium terms. We believe the current need for oil will
continue for many decades to come.
Key performance indicators
The Non-Financial Key Performance Indicators (based on continuing and
discontinued activities) were:
· Operational (active wells not identified for abandonment at end
of year) 2024: 10 (2023: 8)
· Aggregate production for 2024: 623,312 mmbls (2023: 665,114
barrels) a fall of 6%
· Reserves at 31 December 2024
o Shallow structures: 13.0 mmbls P1 & 24.2 mmbls P2 (2023: 13.6 P1 mmbls
& 24.8 P2 mmbls) -but subsequently sold
o Airshagyl deep structure (in the immediate vicinity of the drainage area
around wells A5, A6 & A7): were independently assessed at 31 December
2024 as C1 49 mmbls & C2 28.9 mmbls, of which the Kazakh State Geological
Committee in May 2025 has initially confirmed C1 reserves of 26 mmbls with
scope to increase the certified amount over the next three years
The Financial Key Performance Indicators (based on continued and discontinued
operations) were:
· Revenue: up 43% at $52.3 million of which $31.5 million is from
continuing operations (2023: $36.7 million of which $15.0 million is from
continuing operations)
· Profit before tax $17.1 million of which $5.3 million is from
continuing operations (2023: $14.8 million of which a loss of $0.2 million is
from continuing operations)
· Profit after tax for the year $16.8 million of which $7.4 million
is from continuing operations (2023: $11.1 million of which a loss of 0.9
million is from continuing operations)
· Cash at bank: $2.6 million (2023: $1.2 million)
· Total assets: $135.2 million (2023: $134.9 million)
· Unproven oil & gas assets $49.1 million (2023: $52.0 million)
Assets & Reserves
Further details of the Group's assets and reserves are set out in the
Chairman's statement and throughout this Annual Report.
Financial
The proceeds from the sale of the BNG shallow structures has provided funding
to pay down the Group's debts, fund the further development of existing and
previously announced assets and to fund the acquisition and development of a
number of new projects.
Potential sources of additional funding if required would include advances
from local oil traders for the sale of oil yet to be produced; industry
funding in the form of partnerships with larger industry players; further
support from existing shareholders; and equity funding from financial
institutions. Additionally, funding may be available from selected asset sales
or from the acquisition for shares of cash generative businesses.
Dividends
The Board has decided against the resumption of regular dividend payments in
favour of periodic special dividends and / or share buy backs, although none
are currently proposed.
S. 172 Statement
The Board is mindful of the duties of directors under S.172 of the Companies
Act 2006.
Directors act in a way they consider, in good faith, to be most likely to
promote the success of the Company for the benefit of its members. In doing
so, they each have regard to a range of matters when making decisions for the
long term success of the Company.
Our culture is that of treating everyone fairly and with respect and this
extends to all our principal stakeholders. Through engaging formally and
informally with our key stakeholders, we have been able to develop an
understanding of their needs, assess their perspectives and monitor their
impact on our strategic ambition.
As part of the Board's decision-making process, the Board and its committees
consider the potential impact of decisions on relevant stakeholders whilst
also having regard to a number of broader factors, including the impact of the
Company's operations on the community and environment, responsible business
practices and the likely consequences of decisions in the long term.
Our objective is to act in a way that meets the long term needs of all our
main stakeholder groups. However, in so doing we pay particular regard to the
longer term needs of shareholders. We engage with investors on our financial
performance, strategy and business model. Our Annual General Meeting provides
an opportunity for investors to meet and engage with members of the Board. The
Board also continues to encourage senior management to engage with staff,
suppliers, customers and the community in order to assist the Board in
discharging its obligations.
Further details of how the Directors have had regard to the issues, factors
and stakeholders considered relevant in complying with S 172 (1) (a)-(f), the
methods used to engage with stakeholders and the effect on the Group's
decisions during the year can be found throughout this report and in
particular at page 21 (where the Group's strategy, objectives and business
model are addressed), page 24 (in relation to employees) the ESG report on
page 29 (in relation to social and environmental matters).
We seek to attract and retain staff by acting as a responsible employer. The
health and safety of our employees is important to the Group and an area we
have to regularly report on to the Kazakh regulatory authorities.
We continue to provide support to communities and governments through the
provision of employment, the payment of taxes and supporting social and
economic development in the surrounding areas, both through social investment
and local procurement. We have contributed to a range of social programmes for
well over a decade.
We have established long-term partnerships that complement our in-house
expertise and have built a network of specialised partners within the industry
and beyond.
Clive Carver
Chairman
28 November 2025
DIRECTORS' REPORT
The Directors present their annual report on the operations of the Company and
the Group, together with the audited financial statements for the year ended
31 December 2024.
The Strategic Report forms part of the business review for this year.
Principal activities
The principal focus of the Group is on
· oil exploration and production
· oil trading
· onshore and offshore oilfield services
· mineral exploration and production
All the Groups operational activities are in Kazakhstan.
Results and dividends
The consolidated statement of profit or loss is set out on page 46 and shows a
$16.8 million profit for the year after tax (2023: US$11.1 million).
The Board has decided not to resume regular dividend payments but rather to
look to periodically declare special dividends and / or share buy backs
although none are currently proposed.
Review of the year
The review of the year and the Directors' strategy are set out in the
Chairman's Statement, the Strategic Report and throughout these financial
statements.
Events after the reporting period
Other than the operational and financial matters set out in these financial
statements there have been no material events between 31 December 2024, and
the date of this report, which are required to be brought to the attention of
shareholders. Please refer to note 31 of these financial statements for
further details.
Board changes
There were no board changes during the year under review.
Aibek Oraziman, the Group's largest shareholder who joined the board as a
non-executive director in 2020, will, effective from 1 January 2026, be
appointed Chief Operating Officer, which is an executive director position. At
the same time Seokwoo Shin, who joined the company in 2018 and the board as
Chief Operating Officer in 2021, will become a non-executive director. These
appointments will in due course result in a change in the composition of
certain board committees.
Employees
Staff employed by the Group are based primarily in Kazakhstan.
The recruitment and retention of staff, especially at management level, is
increasingly important as the Group continues to build its portfolio of oil
& gas and mineral assets. As well as providing employees with appropriate
remuneration and other benefits together with a safe and enjoyable working
environment, the Board recognises the importance of communicating with
employees to motivate them and involve them fully in the business.
For the most part, this communication takes place at a local level and staff
are kept informed of major developments through email updates. They also have
access to the Group's website.
The Group has taken out full indemnity insurance on behalf of the Directors
and its officers.
Health, safety and environment
It is the Group's policy and practice to comply with health, safety and
environmental regulations and the requirements of the countries in which it
operates, to protect its employees, assets and the environment.
Environmental reporting
The Group is exempt from the Streamlined Energy and Carbon Reporting (SECR)
requirements since its energy consumption is less than 40,000 kWh per annum in
the UK.
Charitable and Political donations
During the year the Group made no charitable or political donations.
Directors and Directors' interests
The Directors of the Group and the Company who held office during the period
under review and up to the date of these financial statements are as follows:
Directors' interests
Director Number of Ordinary Shares
As at 31 December 2024 As at 31 December 2023
Clive Carver 2,245,000 2,245,000
Kuat Oraziman* nil nil
Aibek Oraziman* 1,046,909,031 1,046,909,031
Seokwoo Shin nil nil
* taken together on 31 December 2024 and 31 December 2023 the Oraziman Family,
comprising Kuat Oraziman, Aibek Oraziman, Altynbek Bolatzhan and Bolatzhan
Kerimbayev held 1,089,544,791 shares representing approximately 48.32% of the
issued share capital. Together with Daulet Beisenov they formed a Concert
Party then holding 1,091,189,529 shares representing 48.39% of the issued
share capital at 31 December 2024 and 31 December 2023.
Biographical details of the Directors are set out on the Company's website
www.caspiansunrise.com (http://www.caspiansunrise.com) .
Details of the Directors' individual remuneration, service contracts and
interests in share options are shown in the Remuneration Committee Report.
Other shareholders over 3% at the date of this report
Shareholder Shares held %
Dae Han New Pharm Co Limited 224,830,964 9.55
Midiel Engineering AG 110,812,501 4.71
Ahmed Al Marri 110,812,500 4.71
Abai Kalmyrzayev 79,058,642 3.36
Financial instruments
Details of the use of financial instruments by the Group and its subsidiary
undertakings are contained in note 28 of these financial statements.
Statement of disclosure of information to auditor
The Directors have taken all the steps that they ought to have taken to make
themselves aware of any information needed by the Group's auditor for the
purposes of their audit and to establish that the auditors are aware of that
information.
The Directors are not aware of any relevant audit information of which the
auditor is unaware.
Auditors PKF Littlejohn LLP, who were first appointed in 2023 and reappointed
in 2024, have indicated their willingness to continue in office and a
resolution concerning their reappointment was approved by shareholders at the
Annual General Meeting held on 25 June 2025.
Directors' responsibilities statement
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each
financial year. Under that law the Directors have elected to prepare the Group
and Company financial statements in accordance with UK adopted international
accounting standards.
Under Company law the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and Company and of the profit or loss of the Group for
that period.
The Directors are also required to prepare financial statements in accordance
with the rules of the London Stock Exchange for companies trading securities
on the London Stock Exchange AIM Market.
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether they have been prepared in accordance with UK
adopted international accounting standards subject to any material departures
disclosed and explained in the financial statements; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and the Group will
continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Group's and the Company's transactions and
disclose with reasonable accuracy at any time the financial position of the
Group and the Company and enable them to ensure that the financial statements
comply with the requirements of the Companies Act 2006.
They are also responsible for safeguarding the assets of the Group and the
Company and hence for taking reasonable steps for the prevention and detection
of fraud and other irregularities.
Website publication
The maintenance and integrity of the Group's website is the responsibility of
the Directors. The Directors are responsible for ensuring the annual report
and the financial statements are made available on a website.
www.caspiansunrise.com/investors/reports
Financial statements are published on the Group's website in accordance with
legislation in the United Kingdom governing the preparation and dissemination
of financial statements, which may vary from legislation in other
jurisdictions.
The Directors' responsibility also extends to the ongoing integrity of the
financial statements contained therein.
Responsibility statement
The Directors confirm that to the best of their knowledge
· the financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair view of the
assets, financial position and profit or loss of the Company and the
undertakings included in the consolidation taken as a whole
· the Strategic Report includes a fair review of the development
and performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a
description of the principal risks and uncertainties
· the Annual Report and the financial statements taken as a whole,
are fair balanced and understandable and provide the information necessary for
shareholders to assess the Company's position, performance, business model and
strategy.
Clive Carver
Chairman
28 November 2025
PRINCIPAL AND OTHER RISKS AND UNCERTAINTIES FACING THE BUSINESS
Introduction
Risk assessment and evaluation is an essential part of the Group's planning
and an important aspect of the Group's internal control systems.
Oil & gas and mineral exploration and production are dangerous activities
and as such are necessarily subject to an extremely rigorous health and safety
regime. The Board aims to identify and evaluate the risks the Group faces or
is likely to face in future both from its immediate activities and from the
wider environment. This helps to inform and shape the Group's strategy and to
quantify its tolerance to risk.
Operational success generally helps to mitigate financial risks. Increases in
production as new wells or mines come on stream generates cash and improves
the Group's financial position, which can then lead to further operational
success.
As the Group develops, its approach to risk management and mitigation will be
refined. In due course we plan to include a formal risk register including all
the principal operational and non-operational risks to the business. Such a
risk register would be reviewed and assessed at least once a year.
The Group is subject to various risks relating to political, economic, legal,
social, industry, business and financial conditions. The following risk
factors, which are not exhaustive, are particularly relevant to the Group's
business activities and are listed in the Board's assessment in the order of
greatest potential impact.
Risk Description Mitigation
Financial risk Oil & gas and mineral exploration and production typically requires a The receipt of the bulk of the $88 million sale of the MJF and South Yelemes
large upfront investment with no guarantee of success. As such the Group is structure has significantly strengthened the Group's financial position as
exposed to the risk that it may be unable to fund its obligations under would the completion of an investment transaction based on selling a 50% stake
various work programme commitments and to pay creditors in the BNG Contract Area deep structures for $72.5 million to be invested in
further developing those structures.
Operating risk Oil & gas exploration and production and mineral are dangerous activities. The Group seeks to adopt best in class industry operating standards and
The Group is exposed to risks such as well blowouts, fire, pollution, bad complies with rigorous health & safety regulations.
weather and equipment failure.
The Group also seeks to work with contractors who can demonstrate similar high
standards of safety.
Exploration risk Despite the success of the BNG shallow structures, there can be no assurance The Group seeks to reduce this risk by acquiring and evaluating 3D seismic
the Group's exploration activities in the BNG deep structures or anywhere else information before committing to drill exploration and appraisal wells.
will be successful.
The Group also seeks to engage suitably skilled personnel either as employees
or contractors to undertake detailed assessments of the areas under
exploration.
Political Political division which leads to civil disorder is likely to have an adverse Widespread disorder in Kazakhstan had been absent since the Group's formation
impact on the Group's operations. until the beginning of 2022, when the Group together with other operators was
Risk
forced to suspend operations due to civil unrest.
The importance of the oil & gas and mineral industries to the Kazakh
economy makes a prolonged suspension of operations unlikely, as was the case
in 2022.
Russian sanctions The sanctions imposed on Russia may affect both the Group's ability to For international sales and like most oil produced in Kazakhstan for the
transport its oil and the price at which the oil may be sold. international market the Company's oil is transported to international buyers
via the Russian oil pipeline network.
It may also affect the Group's ability to source equipment and other
consumables required to produce oil. While there are and were no UK or EU sanction on Kazakh oil transported
through the Russian pipeline system in practice in the past such oil was
subject to a hefty unofficial "Urals Oil" discount. This made selling the
Group's oil on the international market uneconomic.
More recently the discount on "Urals Oil" to international oil prices has
narrowed to the point it is no longer an issue for volumes greater than those
currently produced by the Group. However, for our recent levels of production
and given our sales trading income we are not to date at the point where
international sales are yet commercial.
We therefore currently sell all our oil either on the traditional domestic
market or the domestic mini refinery market where taxes and other deductions
are much lower.
Equipment and consumables previously sourced from Russia are now found
elsewhere, typically China, adding time and expense.
Permitting risks Every stage of the Group's operations requires the approval of the industry Regulatory delays are inevitable and common place.
regulators.
Our experienced Kazakh workforce has both a thorough knowledge of the complex
While the Group enjoys good working relationships with the Kazakh regulatory rules and a detailed practical understanding of the workings of each of the
authorities there can be no assurances that the laws and regulations and their regulatory bodies with whom we need to deal. Accordingly, we believe we are as
reinterpretation will not change in future periods and that, as a result, the well placed as possible to minimise the financial impact of regulatory delays.
Group's activities would be affected.
Pricing risk We operate in an industry where the international price is set by world We have no influence on the price at which we can sell our oil or any minerals
markets and the domestic price is set by the Kazakh regulatory authorities. produced.
Greater storage and or financial hedging would provide some protection against
adverse oil price movements but would be expensive and short lived.
Environmental risk There would be serious consequences should there be a polluting event. The Group seeks to maintain compliance with all applicable regulatory
standards and practices.
Further information is set out in the Environmental, Social and Governance
Report.
Climate change That climate change might impact the prospects for the Group The board does not believe in the short to medium term that climate change
will have a material impact on the Group's revenues or operations. In
particular the board believes the demand for oil will continue for at least
the next decade and that climate change is unlikely to materially impact the
Group's ability to produce that oil.
Exchange rate risk Movements in exchange rates may result in actual losses or in the results The Group's income is denominated in US$ and Kazakh Tenge its expenditure is
reported in the Group financial statements. denominated principally in US$, Kazakh Tenge and UK £. In the year under
review and subsequently the Kazakh Tenge weakened by approximately 15% against
the US$.
Any decline in the Kazakh Tenge against the US$ affects the US$ reported
income for domestic sales which transacted in Tenge. However, in such
circumstances the Group generally benefits as international income is
unaffected but approximately 50% of the Group's costs are incurred in Tenge
reducing the US$ reported operating costs.
Given the relative strengths of the US$ and the Kazakh Tenge, the Group has
decided not to seek to hedge this foreign currency exposure.
Loss of major shareholder support In previous periods the Group has relied on the financial support of the The Group now has significant cash balances from the sale of the MJF and South
Oraziman family, which currently holds 50.5% of the Company's shares. Yelemes structures.
However, in the event further support was required it would clearly be in the
interests of the Oraziman family as the major shareholding group to provide
it.
Supplier risk Continued operations depend on regular deliveries to site of consumables, such We have been operating the BNG Contract Area for more than a decade during
as water, food, heating oil and replacement parts for our drilling equipment. which we have encountered numerous supply issues, all of which have been
Delays in such deliveries to site could impact production volumes. overcome.
The war in Ukraine has resulted in supplies no longer being sourced from
Russia. Replacement supplies from China take much longer to arrive.
Managing supplies has become one of the most important aspects of the
business.
With a large proportion of supplies now coming from China, whose border is
approximately 3,000 kilometers from the BNG Contract Area, lead times are now
much greater. In addition, the working capital investment is also much greater
as supplies need to be paid for much earlier than before.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG) REPORT
This report covers our ESG approach and performance for the year ended 31
December 2024.
ENVIRONMENTAL
Introduction
Oil and gas exploration and production is a long-term activity requiring
effective environmental stewardship. We have operated in Kazakhstan now for
more than 18 years and have only been able to do so by complying with
applicable environmental standards.
We recognise that society is transitioning towards a low-carbon future, and we
support this goal. However, we believe that oil will continue to play an
important role in the global economy for many decades to come, and new sources
of oil supply will be required for a sustainable energy transition.
Climate change
Assessing the risks
We look to the Kazakh regulatory authorities to set the standards to which we
work.
Compliance with the standards
We seek to comply with all relevant Kazakh environmental requirements,
including environmental laws & regulations and industry guidelines.
Specific initiatives
· We seek to recycle gas produced as a by-product at BNG to power
the Contract Area's day-to-day operations.
· We seek wherever possible to avoid flaring, which in any event is
a regulated activity.
· Our workers at the BNG Contract Area are drawn from the local
community, lessening the transportation carbon footprint.
· Where practical we make use of existing oil pipelines to move our
oil.
Health and safety
Our daily operations prioritise health and safety and we seek to comply with
all applicable health and safety related regulations.
SOCIAL
Since the Group's formation in 2006, the social obligations payments made
principally to the authorities in the regions in which the group operates have
funded a range of projects for the benefit of the local communities concerned.
GOVERNANCE
Introduction
Overall responsibility over the Group's corporate governance, risk management,
market disclosure and related obligations rests with the Board.
Recently, as noted elsewhere in these financial statements, the Group has
struggled to operate the board committee system set out below because of the
small size of the board. Accordingly, in recent times the board as a whole has
considered many of the issues typically previously dealt with by board
committees.
Committee composition
The Governance & Risk Committee now comprises Clive Carver and Aibek
Oraziman with Clive Carver acting as chairman. The committee typically meets
at least once a year to review the Group's governance procedures compared to
accepted industry best practice.
At the appropriate time the Board plans to include a formal risk register
including all the principal operational and non-operational risks to the
business to be considered by the Governance & Risk Committee.
Share dealing policy
The Group has adopted and operates a share dealing code for Directors and
employees in accordance with the AIM Rules.
Internal controls
The Board acknowledges responsibility for maintaining appropriate internal
control systems and procedures to safeguard the shareholders' investments and
assets, employees and the business of the Group. The Board also intends to
periodically review the Group's financial controls and operating procedures.
Internal audit
The Board does not consider it appropriate for the current size of the Group
to establish an internal audit function. However, this will be kept under
review.
Bribery and corruption
The UK Bribery Act 2010 came into force on 1 July 2011.
The Company is committed to acting ethically, fairly and with integrity in all
its endeavours and compliance with legislation is monitored. The principal
terms of the UK Bribery Act have been translated into Russian and circulated
to our Kazakh based staff. Consideration of the UK Bribery Act is a standing
item at board meetings.
The Company's culture
Our culture might best be described as one where we strive for commercial
success while treating others fairly and with respect. The Board firmly
believes that sustained success will best be achieved by following this simple
philosophy. Accordingly, in dealing with each of the Group's principal
stakeholders, we encourage our staff to operate in an honest and respectful
manner. We also believe in getting proper value for money spent and believe
this goes hand in hand with being a low-cost operator.
Kazakhstan plays an important part in the Group's culture. It is where we
operate; where almost all staff are based; it is the nationality of most staff
and of the majority of shareholders.
The Group is committed to promoting a culture based on ethical values and
behaviours across the business. Policies are in place covering key matters
such as equality, protection of sensitive information, conflicts of interest,
whistleblowing and health and safety as well as environmental concerns.
QCA Code
Caspian Sunrise, in line with most AIM companies, elected to apply the rules
of the Quoted Companies Alliance (QCA) Corporate Governance Code ("QCA Code"),
which is based around 10 broad principles.
The QCA has introduced an updated code which for Caspian Sunrise takes effect
in the financial statements for the year ended 31 December 2025. This review
is based on the existing QCA Code.
Principle 1 Objective
Establish a strategy and business model which promotes long term value for Caspian Sunrise's objective is to create shareholder value from the
shareholders development of oil & gas and mineral projects and associated activities.
The Group has a number of secondary objectives, including promoting the
highest level of health and safety standards, developing our staff to their
highest potential and being a good corporate citizen in our chosen countries
of operations.
Strategy
The Group's long-term strategy is to build shareholder value by assembling an
attractive portfolio of oil & gas and mineral exploration and production
assets in Central Asia, and more particularly in Kazakhstan where the board
has the greatest experience. The Group is also exploiting associated
opportunities, such as oilfield services and commodity trading, and mineral
exploration and production where the board believes it can add significant
value and contribute towards the success of the Group as a whole.
Our business model
Our business model is to invest in and develop promising oil & gas,
mineral and other projects. Success in the long term will be measured by a
sustainable appreciation in the Group's profitability and, in well functioning
stock markets, the Company's share price.
Principal assets
The Group's principal asset is its 99% interest in the BNG Contract Area,
which is in the west of Kazakhstan, 40 kilometres southeast of Tengiz on the
edge of the Mangistau Oblast. In July 2025 the Group sold the MJF and South
Yelemes shallow structures at the BNG Contract Area for a consideration of $88
million.
The Group owns the West Shalva Contract Area, an oilfield expected to be
easier to develop than either BNG or Block 8 and nearer road and refinery
infrastructure but without the potential of BNG and Block 8.
The Group owns the Caspian Explorer, a purpose built drilling vessel designed
to explore the shallow reaches of the Caspian Sea. The Caspian Explorer had a
construction cost of approximately $200 million in 2012 and a replacement cost
believed to be approximately $300 million today.
The Group owns four drilling rigs and a wide range of equipment which allows
four wells to be drilled simultaneously.
The Group is in the process of acquiring Block 8, an oilfield with many of the
characteristics of BNG.
Further acquisitions particularly in the minerals sector are expected.
Principle 2 Shareholder communications
Seek to understand and meet shareholder needs and expectations The Company communicates with its shareholders via RNS announcements, its
website, formal company meetings and periodic investor presentations. However,
the
need to avoid selectively releasing price sensitive information often limits
our ability to provide the answers many investors seek.
The Company has in recent times declined to provide information to
shareholders on a selective basis believing this to be a fundamental breach of
the need to treat all shareholders equally.
Our shareholders
A large proportion of the Company's shares are held by a relatively small
group, namely: The Oraziman family (50.5%); Korean shareholders (9.5%);
shareholders in Switzerland (4.7%); shareholders in the UAE (4.7)%; with the
remaining (30.6)% being principally other Kazakh or UK based investors.
Principle 3 Our stakeholders
In addition to our shareholders the Company regards its employees and their
families, local and national government, suppliers and customers to form the
Take into account wider stakeholder and social responsibilities and their core of the wider stakeholder group.
implications for long term success
Employees
Almost all staff employed by the Group are based in Kazakhstan. The Group
draws most of its field workers from the Mangistau region where alternative
employment opportunities are limited. At our head office in Almaty we employ
further staff, some of whom hold highly skilled positions.
As well as providing employees with appropriate remuneration and other
benefits together with a safe and enjoyable working environment, the Board
recognises the importance of communication with employees to motivate them and
involve them fully in the business. For the most part, this communication
takes place at a local level, but staff are kept informed of major
developments through email updates and staff meetings.
Local communities
The Group has provided significant financial support to the Mangistau region
for over a decade by way of social payments sometimes delivered in the form of
medical or educational facilities for the local population.
Part of our work programme obligations are paid in the form of contributions
to local social programmes. We are pleased to have assisted in the development
of these projects and look forward to contributing to others in the coming
years.
Kazakh Government agencies and regulators
The Kazakh authorities are responsible for granting licences to explore for
and produce oil. Licences are awarded subject to agreed work programmes being
adhered to over the period of each licence renewal. This includes compliance
with rules designed to preserve the environment.
Caspian Sunrise has an extremely high proportion of Kazakh nationals in our
workforce and among our core shareholder group. The Board believes that this
helps create a positive relationship with the Kazakh authorities and has
assisted in the Group's day-to-day dealings with regulators.
External stakeholders
Many additional jobs have been funded in the Company's suppliers, partners and
professional advisers.
Feedback
The Company considers feedback from its stakeholders in its decisions and
actions.
Principle 4 Risk assessment
Embed effective risk management, considering both opportunities and threats, Oil & gas and mineral exploration and production are dangerous activities
throughout the organisation and as such are necessarily subject to an extreme health and safety regime.
Risk assessment and evaluation is an essential part of the Company's planning
and an important aspect of the Company's internal control system.
It is planned to introduce a formal risk register, including all the principal
operational and non-operational risks to the business. Such a risk register
would be reviewed and assessed at least once a year by the Audit Committee.
A summary of the principal risks facing the Group are set out in the Principal
Risks section on page 27 of these Financial Statements.
As stated elsewhere in these financial statements, the relatively small size
of the board and the lack of independent non-executive directors makes the
operation of the board committee systems envisaged under the QCA code
difficult to follow. The board intends to address this in due course with
the appointment of additional and independent non-executive directors.
Principle 5 Board composition
Maintain the board as a well-functioning, balanced team led by the chair The board currently comprises three executive directors and one non-executive
director. All are male with two Kazakh nationals, one South Korean national
and a national from the United Kingdom.
Executive directors
At the executive level Kuat Oraziman, Chief Executive Officer, and Seokwoo
Shin Chief Operating Officer run the Company's operations in Kazakhstan with
Clive Carver, Chairman, taking the lead on financial and non-operational
matters including all aspects related to the listing of the Company's shares
on AIM and Corporate Governance compliance.
Kuat Oraziman is a trained geologist and member of the Academy of Sciences. He
has nearly 30 years oil and gas experience in Kazakhstan.
Seokwoo Shin worked for the Korean National Oil Corporation from 1987 until
2018 with spells in Korea, the United Kingdom, Russia and most recently
Kazakhstan, where he was responsible for KNOC's Kazakh oil fields. He joined
Caspian Sunrise in 2018.
Clive Carver is a fellow of the Institute of Chartered Accountants in England
and Wales (FCA). While working in the UK broking industry Clive gained more
than 15 years' experience as a Qualified Executive under the AIM Rules having
led the Corporate Finance departments of several of the larger and more active
Nominated Adviser firms.
Non-executive director
Aibek Oraziman, is the Company's largest shareholder with 44.5% of the
Company's shares. He has more than 15 years oil and gas experience in
Kazakhstan, including three years in the field at Aktobe working for a local
oil company.
The board believes it possesses the skills required to build a successful and
durable oil and gas business focused on Kazakhstan.
The board meets a minimum of four times each year supported by periodic
telephone meetings. At such meetings the board receives a report from Kuat
Oraziman on all matters operational and from Clive Carver on non-operational
matters.
The board also has a list of standing items, including compliance with the UK
Bribery Act, litigation, and existence of open and closed periods for director
dealings, which are considered at each meeting.
The number of board meetings attended each year by the directors is set out in
the Directors' report which forms part of the Annual Report and Financial
Statements.
Board committees
While the Audit, Remuneration and Governance committees remain in place, but
with only four directors and only one non-executive director much of the work
typically undertaken in the board committees has been handled by the board as
a whole.
In due course we expect to make additional appointments to the board that
would help return to a more traditional board committee set up.
Departures from the Code
Chairman
The principal reason advanced by proponents of the Code that the Chairman be
non-executive is to split the roles of Chairman and Chief Executive Officer as
combining them can put too much control in one pair of hands. This is not the
case with our Company where the Chief Executive Officer's family is the
largest shareholding group, with some 50.5%.
Clive Carver was appointed Non-Executive Chairman of the Company in 2006 in
the lead-up to the IPO the following year. In 2012 he was appointed Executive
Chairman at the same time as Kuat Oraziman moved from Non-Executive Director
to Chief Executive Officer.
Clive Carver has served as non-executive chairman of eight AIM listed
companies. In addition, his 15 years as a Qualified Executive and experience
as head of several active corporate finance departments make him extremely
well placed to be Chairman, notwithstanding his executive status.
Non-Executive Directors' participation in Option Schemes
In common with many AIM companies, we actively encourage non-executive
directors to participate in the Company's option schemes, although it is not
currently the case. Proponents of the Code believe this affects the
independence of the non-executive directors concerned.
We believe that independence is a matter of mind, judgement, and integrity
rather than having a disclosed interest in the success of the Company. We
consider our non-executives' ability to act independently to be unaffected by
the level of participation in the Company's option scheme.
Principle 6 Experience
Ensure that between them the directors have the necessary up-to-date The experience of the directors is set out in the response to Principle 5
experience, skills, and capabilities. above and in the Annual Report and Financial Statements.
Operational skills are maintained through an active day to day interaction
with leading international consultancies and contractors engaged to assist in
the development of the Company's assets.
Non-operational skills are maintained principally via the Company's
interaction with its professional advisers plus the experience gained from
sitting on the boards of other commercial enterprises.
As the Company develops and moves from predominantly an oil exploration
company to a balanced production and exploration company with both oil &
gas and mineral projects, the board will periodically re-assess the adequacy
of the skills on both the main board and the operational board. Where gaps are
found, new appointments will be sought.
Principle 7 Performance
Evaluate board performance based on clear and relevant objectives, seeking The Company currently does not evaluate board performance on a formal basis.
continuous improvement However, it will in due course seek to formalise the assessment of both
executive and non-executive board members.
The Company is aware of its need to facilitate succession planning and the
board evaluation process would address this.
Principle 8 Culture
Promote a corporate culture that is based on ethical values and behaviours. Our culture can best be described as one where we strive for commercial
success while treating others fairly and with respect. The board firmly
believes that sustained success will best be achieved by following this simple
philosophy.
Accordingly, in dealing with each of the Company's principal stakeholders, we
encourage our staff to operate in an honest and respectful manner.
Operating with integrity is clearly good business and forms an important part
of the annual assessment of staff and in setting their pay for future periods.
Principle 9 Governance
Maintain governance structures and processes that are fit for purpose and The Company believes that its stated governance structures and processes are
support good decision-making by the board consistent with its current size and complexity, while acknowledging the size
of the board as currently constituted makes adherence to such a governance
regime difficult in practice.
The Board is aware that it must continue to review its practices as the
Company evolves and grows and intends to make further appointments to the
board as circumstances permit.
The executive members of the Board have overall responsibility for managing
the day-to-day operations of the Company and the Board as a whole is
responsible for implementing the Company's strategy.
The Audit Committee typically meets before each set of results (interim and
final) are published and the Remuneration Committee typically meets at least
once a year, when the Financial Statements for the full year results are
approved. All Committee members attend these meetings.
Our Report and Accounts contain reports from the Chairman of the Remuneration.
and the Audit Committees.
The appropriateness of the Company's governance structures will be reviewed
annually in light of further developments of accepted best practice and the
development of the Company.
Principle 10 Communications
Communicate how the company is governed and is performing by maintaining a The Company reports formally to its shareholders and the market twice each
dialogue with shareholders and other relevant stakeholders year with the release of its interim and full year results.
The Annual Report and Financial Statements set out how the corporate
governance of the Company has been applied in the period under review
including the work undertaken by the Audit Committee and the Remuneration
Committee.
The Annual Report and Financial Statements contain full details of the
principal events of the relevant period together with an assessment of current
trading and prospects. They are sent to shareholders and made available on the
Company's website to anyone who wishes to review them.
The Board discloses the result of general meetings by way of RNS
announcements, disclosing the voting numbers. The Company's website also
contains all the information prescribed for an AIM Company under Rule 26.
The Company does not typically engage in selective conversations with
shareholders to avoid the risk of disclosing information on a selective basis,
which is against the rules.
The company's policy towards social media is that it does not use social
media. If we have something to say it is said to all shareholders at the same
time via the established regulatory announcement framework and in the
publication of financial and other reports.
Further details of the Company's dialogue with its shareholders are set out
under Principle 2 above.
Employee stakeholders are regularly updated with the development of the
Company and its performance.
We are in almost constant communication with our Governmental and regulatory
stakeholders via their involvement in our day-to-day operational activities.
Board composition, skills and capabilities
From 1 January 2024 to 31 December 2024 the Board comprised three executive
directors and one non-executive director. This remains the position at the
date of this report.
Clive Carver, Chairman
Clive is a fellow of the Institute of Chartered Accountants in England and
Wales (FCA). He is an experienced public company director having been chairman
of a number of AIM companies in recent years.
Kuat Oraziman, Chief Executive Officer
Kuat Oraziman runs the Company's operations in Kazakhstan. Kuat Oraziman is a
trained geologist and member of the Academy of Sciences. He has nearly 31
years oil and gas experience in Kazakhstan.
Seokwoo Shin, Chief Operating Officer
Seokwoo Shin was educated at Sungkyunkwan University in Korea. He worked for
the Korean National Oil Corporation from 1987 until 2019 with spells in Korea,
the United Kingdom, Russia and most recently Kazakhstan, where he was
responsible for KNOC's Kazakh oil fields. He joined Caspian Sunrise in 2018
and on 4 March 2021 was appointed to the board as Chief Operating Officer.
Aibek Oraziman, Non-executive director
Aibek Oraziman was educated in Kazakhstan and in the United Kingdom. He has
more than 15 years oil and gas experience in Kazakhstan, including three years
in the field at Aktobe working for a local oil company. He was appointed to
the Caspian Sunrise board on 21 August 2020.
The Board believes it possesses the skills required to build a successful and
durable oil and gas business focused on Kazakhstan but recognises in due
course the need for the appointment of additional non-executive directors.
Board and committee meetings
Attendances of Directors at board and committee meetings convened in the year,
and which they were eligible to attend in person or by telephone, are set out
below:
Director Board meetings attended Remuneration Committees attended Audit Committee attended Governance committee attended
Clive Carver 4 of 4 1 of 1 2 of 2 1 of 1
Kuat Oraziman 4 of 4 N/A N/A N/A
Seokwoo Shin 4 of 4 N/A N/A N/A
Aibek Oraziman 4 of 4 1 of 1 2 of 2 1 of 1
The Board has established the following committees:
Audit Committee
The Audit Committee which comprises Aibek Oraziman and Clive Carver, with
Clive Carver as acting Chairman, determines and examines any matters relating
to the financial affairs of the Group including the terms of engagement of the
Group's auditors and, in consultation with the auditor, the scope of the
audit.
The Audit Committee receives and reviews reports from the management and the
external auditor of the Group relating to the annual and interim accounts and
the accounting and internal control systems of the Group. In addition, it
considers the financial performance, position and prospects of the Group and
the Company and ensures they are properly monitored and reported on.
Remuneration Committee
The Remuneration Committee, which comprises Aibek Oraziman and Clive Carver,
with Aibek Oraziman as Chairman, reviews the performance of the senior
management, sets and reviews their remuneration and the terms of their service
contracts and considers the Group's bonus and option schemes.
Board committee membership in 2024
Director Audit Remuneration Corporate Governance Committee
Committee Committee
Served from Served to Served from Served to Served from Served to
Clive Carver 1 January 31 December 1 January 31 December 1 January 31 December
Kuat Oraziman N/A N/A N/A N/A N/A N/A
Seokwoo Shin N/A N/A N/A N/A N/A N/A
Aibek Oraziman 1 January 31 December 1 January 31 December 1 January 31 December
Clive Carver
Chairman
28 November 2025
REMUNERATION COMMITTEE REPORT
Remuneration Committee
Between 1 January 2024 and 31 December 2024, the Remuneration Committee
comprised Aibek Oraziman and Clive Carver and was chaired by Aibek Oraziman.
Remuneration policy
The Remuneration Committee determines the contract term, basic salary, and
other remuneration for the members of the Board and the senior management
team.
The Group's and the Company's policy is to provide remuneration packages that
will attract, retain and motivate its executive Directors and senior
management. This consists of a basic salary, ancillary benefits and other
performance-related remuneration appropriate to their individual
responsibilities and having regard to the remuneration levels of comparable
posts. However, starting in 2020 the Covid-19 impact on the Group's finances
required the Directors to accept reductions of up to 75% of contracted salary
which continued to be the case throughout 2024 and to date in 2025.
Service contracts
Details of the current Directors' service contracts are as follows:
Executive Date of service agreement / appointment letter Date of last renewal of appointment
Clive Carver 20 March 2019 27 June 2024
Kuat Oraziman 6 December 2019 30 June 2023
Aibek Oraziman 21 August 2020 30 June 2023
Seokwoo Shin 4 March 2021 30 June 2023
Basic salary and benefits
The basic salaries of the Directors who served during the financial year are
established by reference to their responsibilities and individual performance.
Directors Role 2024 2024 2024 2023
Salary / fees Benefits Total Total
US$ US$ US$ US$
Clive Carver Chairman 152,698 - 152,698 162,503
Kuat Oraziman CEO 99,930 - 99,930 145,484
Seokwoo Shin COO 60,000 - 60,000 55,000
Aibek Oraziman Non-executive 60,000 - 60,000 55,000
Edmund Limerick Non-executive - - - 72,382
Total 372,628 - 372,628 490,369
Edmund Limerick resigned as a director effective from 7 July 2023.
There were no company pension contributions in respect of any director.
Bonus schemes
All Executive Directors are eligible for consideration of participation in the
Company bonus scheme. However, as in previous years no bonuses are payable
in respect of the year ended 31 December 2024 (2023: $ nil).
Long term incentives
Share options
The current interests as at the date of the approval of these financial
statements of the current Directors in share options agreements are as
follows:
Directors Granted Exercise price (p) Expiry Date
Clive Carver 2,400,000 4 30 April 2025
Seokwoo Shin 2,500,000 4 24 April 2034
On 24 April 2024 the Company awarded 2,500,000 new 4p options to Seokwoo
Shin, a director of the Company, 2,500,000 5.5p options previously awarded
to Seokwoo Shin have been cancelled,
The position as set out in the 2023 financial statements was as follows:
Directors Granted Exercise price (p) Grant date Expiry Date
Clive Carver 2,400,000 4 15 December 2013 30 April 2025
Clive Carver 3,000,000 20 22 August 2014 21 August 2024
Kuat Oraziman 3,000,000 20 22 August 2014 21 August 2024
Seokwoo Shin 2,500,000 4 10 January 2022 17 April 2034
There were no options exercised or granted in 2024. The total number of
options at the date of this report is 9,000,000 representing approximately
0.38% of the total number of issued shares.
Cash based incentives
In May 2019, we introduced cash based long term incentive arrangements for the
senior management team since 2012, Kuat Oraziman and Clive Carver. Under these
arrangements, provided the share price growth exceeds pre-set targets starting
at 17.23p, then for every $500 million increase in the Group's market
capitalisation above $300 million, as adjusted to take account of dividends
paid, both Kuat Oraziman and Clive Carver, would receive payments of $3
million each.
The principal hurdles under these arrangements are set out in the table below.
Market cap threshold Share price target Pay-out rate (each) Pay-out amount (each)
$' billion Pence per share % $' million
0.8 17.23 0.6 3.0
1.3 20.67 0.6 3.0
1.8 24.81 0.6 3.0
2.3 29.77 0.6 3.0
2.8 35.72 0.6 3.0
The scheme continues beyond the numbers in the table such that with the
threshold for market capitalisation increasing at the rate of $0.5 billion and
the corresponding share price threshold increasing from the earlier threshold
by a constant factor of 1.2.
Each threshold must be sustained for at least 30 consecutive days for the
awards to be triggered. There may be only one pay-out for each market
capitalisation threshold crossed no matter how many times it is crossed.
On behalf of the Directors of Caspian Sunrise plc
Aibek Oraziman
Chairman of Remuneration Committee
28 November 2025
AUDIT COMMITTEE REPORT
The Audit Committee
The Audit Committee, which between 1 January and 31 December 2024 comprised
Clive Carver and Aibek Oraziman, with Clive Carver as the acting Chairman,
determines and examines any matters relating to the financial affairs of the
Group including the terms of engagement of the Group's auditors and, in
consultation with the auditor, the scope of the audit.
Role and responsibilities
The Audit Committee is responsible for monitoring the integrity of the
Company's financial statements, reviewing significant financial reporting
issues, reviewing the effectiveness of the Group's internal control and risk
management systems.
In addition, it considers the financial performance, position and prospects of
the Group and the Company and ensures they are properly monitored and reported
on. It oversees the relationship with the Auditor (including advising on their
appointment, agreeing the scope of the audit and reviewing the audit
findings).
Meetings
The committee met on two occasions during the year under review.
Internal audit
The Board and the Audit Committee do not consider it appropriate for the
current size of the Group to establish an internal audit function. However,
this will be kept under review.
Attendance at Audit Committee meetings
Please see the table in the preceding Corporate Governance Report for
attendance by the members of the Audit Committee.
Group auditors
In October 2023 PKF Littlejohn LLP were appointed Group auditors and were
reappointed at the Annual General Meetings in June 2024 and June 2025.
On behalf of the Directors of Caspian Sunrise plc
Clive Carver
Acting Chairman of Audit Committee
28 November 2025
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF CASPIAN SUNRISE PLC
Opinion
We have audited the financial statements of Caspian Sunrise Plc (the 'Parent
Company') and its subsidiaries (the 'Group') for the year ended 31 December
2024 which comprise the Consolidated Statement of Profit or Loss, the
Consolidated Statement of Other Comprehensive Income, the Consolidated and
Parent Company Statement of Financial Position, the Consolidated and Parent
Company Statements of Changes in Equity, the Consolidated and Parent Company
Statements of Cash Flows and notes to the financial statements, including
significant accounting policies. The financial reporting framework that has
been applied in their preparation is applicable law and UK-adopted
international accounting standards and as regards the Parent Company financial
statements, as applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
· the financial statements give a true and fair view of the state of
the Group's and of the Parent Company's affairs as at 31 December 2024 and of
the Group's profit for the year then ended;
· the Group financial statements have been properly prepared in
accordance with UK-adopted international accounting standards;
· the Parent Company financial statements have been properly prepared
in accordance with UK-adopted international accounting standards and as
applied in accordance with the provisions of the Companies Act 2006; and
· the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the Group and Parent Company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the Group's and Parent Company's ability to continue to adopt
the going concern basis of accounting included
· Obtaining the directors' going concern assessment and evaluating
the appropriateness of this assessment;
· Obtaining management's base case forecasts covering the period to
31 December 2026 used to support this assessment, ascertaining the key
assumptions and inputs used in the preparation of the forecasts, and assessing
the reasonableness of such assumptions and inputs. This included, where
possible, agreeing the inputs to underlying supporting documentation, and
sensitising key assumptions;
· Comparing forecast income and expenses with recent historical
financial information to consider the accuracy of management's forecasting;
· Agreeing the latest post-year end cash balances to the working
capital position within the going concern forecast and testing
the mathematical accuracy of the forecasts;
· Obtaining management's downside scenarios, which reflects
management's assessment of uncertainty and the mitigating actions in place,
and evaluating the assumptions regarding reduced trading levels under this
scenario;
· Considering post-year end events and their impact on the group's
financial position; and
· Assessing the appropriateness and completeness of disclosures in
respect of going concern made in the financial statements.
Based on the work we have performed, we have not identified any material
uncertainties relating to events or conditions that, individually or
collectively, may cast significant doubt on the Group's or Parent Company's
ability to continue as a going concern for a period of at least twelve months
from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
We apply the concept of materiality in both planning and performing the audit
and evaluating the effect of misstatements. Based on our professional
judgement, we determined materiality for the financial statements as follows:
Group financial statements Parent Company financial statements
Materiality USD 2,010,000 (2023: USD 1,960,000) USD 1,450,000 (2023: USD 1,170,000)
Basis for determining materiality 1.5% of gross assets (2023: 1.5% of gross assets) 1.5% of net assets (2023: 3% of net assets)
Rationale for the benchmark applied We have determined an asset based measure is appropriate as the Group The Parent Company is a holding company; therefore, materiality was set on the
continues to focus on the development of its key oil and gas exploration and net assets basis.
production activities, which require significant capital expenditure.
Performance materiality
We set performance materiality at a level lower than materiality to reduce the
probability that, in aggregate, uncorrected and undetected misstatements
exceed the materiality for the financial statements as a whole.
Group financial statements Parent Company financial statements
Performance materiality USD 1,206,000 (2023: USD 1,176,000) USD 870,000 (2023: USD 702,000)
Basis for determining materiality 60% of materiality (2023: 60% of materiality) 60% of materiality (2023: 60% of materiality)
Rationale for the benchmark applied Performance materiality for the current year was set based our assessment of
the control environment including identified control deficiencies.
Our audit procedures were performed to materiality levels applicable to each
component, which were lower than the Group materiality level and ranged from
USD 730,000 to USD 1,000,000 depending on that component's asset contribution.
In the audit of each component, we further applied performance materiality
levels of 60% of the component materiality to our testing to ensure that the
risk of errors exceeding component materiality was appropriately mitigated.
We agreed with those charged with governance that we would report to them all
audit differences identified during the course of our audit in excess of USD
100,500 (2023: USD 98,000) for the Group and USD 87,000 (2023: USD 58,500) for
the Parent Company. We also agreed to report any other audit misstatements
below that threshold that we believe warranted reporting on qualitative
grounds.
Our approach to the audit
Our audit approach was developed by obtaining an understanding of the Group's
and Parent Company's activities, the key subjective judgments made by the
directors, for example in respect of the significant accounting estimates
regarding the valuation of unproven oil and gas assets, as well as revenue
recognition and classification and valuation of assets held for sale, as well
as considering future events that are inherently uncertain, and the overall
control environment. Based on this understanding we assessed those aspects of
the Group's and Parent Company's transactions and balances which were most
likely to give rise to a material misstatement and were most susceptible to
irregularities including fraud or error. Specifically, we identified what we
considered to be the key audit matter and planned our audit approach
accordingly.
The Group's operations principally comprise oil and gas exploration and
production in Kazakhstan. We assessed there to be five material components, in
addition to the Parent Company. Three of these five components were subject to
full scope audit and two components were subject to audit procedures on
specific account balances, disclosures, or classes of transaction.
A non-PKF member firm performed the audit work on these five components, under
our direction and supervision as Group auditors. The audit of the Parent
Company and the Group consolidation were performed in the United Kingdom by
PKF Littlejohn as group auditor. The Group audit team performed additional
procedures in respect of certain significant risk areas including the key
audit matter.
Our involvement with component auditors included the following:
• Detailed Group reporting instructions were sent to the component
auditor, which included the significant areas to be covered by the audit.
• We reviewed the component auditor's working papers remotely from the
UK. In addition, we reviewed the Group reporting submissions received from
the component audit teams and held regular calls with the component audit
teams during the planning, fieldwork and completion phases of their audit to
discuss significant findings from their audit.
• We performed additional top-up procedures in respect of the
significant risk areas where deemed necessary.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Key Audit Matter How our scope addressed this matter
Carrying value of unproven oil and gas assets - Note 2.1.9 and 13
The carrying value of the Group's unproven oil and gas assets as at 31 Our work in this area included the following:
December 2024 was USD 49,148,000 (2023: USD 51,963,000).
· Reviewing the work of the component auditor's testing of
additions in the year, as well as obtaining the applicable exploration
licences to ensure that these are valid and that relevant terms have been
In accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources, complied with;
assets should be held at cost and an annual assessment of impairment
indicators should be performed. · Obtaining confirmation that the Group has good title to the
applicable exploration licences, and assessing compliance with terms of the
licences through making enquiries of management and the legal consultant;
Given the level of management estimates and judgement required in determining · Obtaining management's review of indicators of impairment,
the recoverability of these assets, there is a risk that management may not reviewing and challenging management's assessment and independently
adequately identify all impairment indicators as outlined in IFRS 6. As considering whether any of the impairment indicators as per IFRS 6 have been
such, there is a risk that the carrying value of these assets is impaired and met and, if so, whether any impairment is necessary;
that exploration and development costs capitalised during the year have not
been capitalised in accordance with IFRS 6. · Obtaining and reviewing management's impairment assessment in
accordance with IAS 36, corroborating and providing challenge to key inputs,
and performing stress testing of the model under a range of scenarios;
As a result of the significant estimates and judgement required to be · Evaluating available technical reports to determine whether the
exercised by management, we consider this to be a key audit matter. inputs and judgments applied in management's impairment review adequately
support the carrying value of unproven oil and gas assets as of 31 December
2024;
· Inspecting cash flow forecasts to confirm that further drilling
and exploration is planned for the licenced areas, as well as reviewing
internal and external information available during the year and post-year end
such as Board minutes and Regulatory News Service announcements for evidence
of potential impairment
· Evaluation of the results of exploration activity in the year for
indications that the licences would be abandoned or that the recoverable value
would be below carrying value; and
· Reviewing disclosures in the financial statements to ensure
compliance with the requirements of IFRS.
Key observations
We draw attention to the disclosure within Note 13 Unproven oil and gas assets
and Note 2.1.9 within Critical accounting estimates and judgements which
confirm the post-year end award of a 25 year production licence on the
Airshagyl structure, for an initial three year period, during which additional
reserves may be credited based on drilling results. The application to upgrade
to a production licence for the Yelemes deep structure remains with the Kazakh
regulatory authorities at the date of these financial statements.
Should the Airshagyl production licence not be extended beyond the initial
three year period, and / or the Yelemes deep licence not be forthcoming, then
this could trigger an impairment to the carrying value of exploration and
evaluation assets.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the Group and Parent Company financial
statements does not cover the other information and, except to the extent
otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon. Our responsibility is to read the other
information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise to a
material misstatement in the financial statements themselves. If, based on the
work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
· the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
· the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the Group and the Parent
Company and their environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept by the Parent
Company, or returns adequate for our audit have not been received from
branches not visited by us; or
· the Parent Company financial statements are not in agreement with
the accounting records and returns; or
· certain disclosures of directors' remuneration specified by law are
not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement, the
directors are responsible for the preparation of the Group and Parent Company
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the Group and Parent Company financial statements, the directors
are responsible for assessing the Group and the Parent Company's ability to
continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the company and the sector in which
it operates to identify laws and regulations that could reasonably be expected
to have a direct effect on the financial statements. We obtained our
understanding in this regard through
o discussing with management, those charged with governance and those
responsible for legal and compliance procedures, to understand how the Group
is complying with those legal and regulatory frameworks; and
o conducting and applying industry research and application of cumulative
audit knowledge.
· We determined the principal laws and regulations relevant to the
company in this regard to be those arising from:
o UK-adopted international accounting standards;
o Companies Act 2006;
o AIM Rules and the Quoted Companies Alliance Corporate Governance Code;
o Relevant industry laws and regulations in Kazakhstan, including relevant
environmental regulations associated with oil and gas exploration and
production activities;
o UK and Kazakh taxation and employment laws; and
o Terms of compliance included in the Group's production and exploration
licences.
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the company
with those laws and regulations. These procedures included, but were not
limited to:
o Reviewing minutes of meeting of those charged with governance for any
instances of non-compliance with laws and regulations;
o Review of Regulatory News Service announcements;
o Directing the auditors of the significant components to ensure an
assessment was performed on the extent of the components' compliance with the
relevant local and regulatory environment and a review of correspondence with
regulatory and tax authorities was performed for any instances of
non-compliance with laws and regulations;
o Reviewing the terms of the relevant licences pertaining to proven and
unproven oil and gas assets to assess the extent to which the Group was in
compliance with the conditions of the licence and considering management's
assessment of the impact of instances of non-compliance where applicable; and
o Review of legal expenditure accounts to understand the nature of
expenditure incurred.
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the area most susceptible to fraud was the valuation of
unproven oil and gas assets, on the basis that there is potential for
management bias as a result of judgement being exercised, and we addressed
this by challenging the assumptions and judgements made by management when
auditing these areas. See Key Audit Matter section above.
· As in all of our audits, we addressed the risk of fraud arising from
management override of controls by performing audit procedures which included,
but were not limited to: the testing of journals; reviewing accounting
estimates for evidence of bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal course of
business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the company and the company's members as
a body, for our audit work, for this report, or for the opinions we have
formed.
Imogen Massey (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn
LLP
Canary Wharf
Statutory Auditor
London E14 4HD
28 November 2025
Consolidated Statement of Profit or Loss
Notes Year ended *Restated
31 December Year ended
2024 31 December
2023
US$'000 US$'000
Continuing Operations:
Revenue 4 31,470 15,036
Cost of sales (22,221) (10,838)
Gross profit 9,249 4,198
Selling expense (167) (1,947)
Administrative costs (3,967) (6,031)
Other operating income 5 - 3,774
Operating profit 5 5,115 (6)
Finance cost 8 (365) (399)
Finance income 9 501 231
Profit before taxation 5,251 (174)
Tax credit / (charge) 10 2,109 (689)
Profit after taxation from continuing operations 7,360 (863)
11 9,431 11,968
Discontinued operations((#))
Profit for the year from discontinued operations
Profit for the year 16,791 11,105
Profit for the year attributable to owners of the parent 16,614 10,590
Profit for the year attributable to non-controlling interest 177 515
16,791 11,105
Profit / (loss) attributable to owners of the parent arises from:
Continuing operations 7,278 (1,258)
Discontinued operations 9,336 11,848
16,614 10,590
Earnings per ordinary share attributable to owners of the parent
From continuing operations:
Basic and diluted (US cents) 12 0.32 (0.06)
From continuing and discontinued operations:
Basic and diluted (US cents) 12 0.74 0.47
*See note 3 for details of prior year restatement.
(#) The discontinued operations noted above relate only to the MJF and South
Yelemes structures on the BNG Contract Area, which were sold for $88 million
in July 2025.
Consolidated Statement of Comprehensive Income
Year ended *Restated
31 December Year ended
2024 31 December
2023
US$'000 US$'000
Profit after taxation 16,791 11,105
Other comprehensive income, net of tax:
Items that may be subsequently reclassified to profit or loss:
Exchange differences on translating foreign operations (11,295) 676
Total comprehensive income for the year 5,496 11,781
Total comprehensive income attributable to:
Owners of parent 5,319 11,266
Non-controlling interest 177 515
Total comprehensive income for the year 5,496 11,781
Consolidated Statement of Changes in Equity
Share capital Share premium Cumulative translation Other reserves Merger reserve Retained profit US$'000 Total attributable to the owner of the Parent Non-controlling interests Total
US$'000 US$'000 reserve US$'000 US$'000 US$'000 US$'000 equity
US$'000 US$'000
Total equity as at 1 January 2024 33,060 - (65,838) 2,102 11,511 90,626 71,461 (5,152) 66,309
Profit for the year - - - - - 16,614 16,614 177 16,791
Other comprehensive income for the year:
Exchange differences on translating foreign operations - - (11,295) - - - (11,295) - (11,295)
Total comprehensive income/(loss) for the year - - (11,295) - - 16,614 5,319 177 5,496
Transactions with owners in their capacity as owners:
Dividends declared (to the non-controlling holder) - - - - - - - (1,496) (1,496)
Shares issued 56 126 - - - - 182 - 182
Total transactions with owners 56 126 - - - - 182 (1,496) (1,314)
Total equity as at 31 December 2024 33,116 126 (77,133) 2,102 11,511 107,240 76,962 (6,471) 70,491
Share capital Share premium Cumulative translation Other reserves Merger reserve Retained profit US$'000 Total attributable to the owner of the Parent Non-controlling interests Total
US$'000 US$'000 reserve US$'000 US$'000 US$'000 US$'000 equity
US$'000 US$'000
Total equity as at 1 January 2023 33,060 - (66,514) (2,362) 11,511 84,775 60,470 (5,667) 54,803
Profit for the year - - - - - 10,590 10,590 515 11,105
Other comprehensive income for the year:
Exchange differences on translating foreign operations - - 676 - - - 676 - 676
Total comprehensive income for the year - - 676 - - 10,590 11,266 515 11,781
Transactions with owners in their capacity as owners:
Dividends declared (note 20) - - - - - (2,377) (2,377) - (2,377)
Shareholder advance at below market rate (note 24) - - - 2,102 - - 2,102 - 2,102
Liquidation of subsidiary* - - - 2,362 - (2,362) - - -
Total transactions with owners - - - 4,464 - (4,739) (275) - (275)
Total equity as at 31 December 2023 33,060 - (65,838) 2,102 11,511 90,626 71,461 (5,152) 66,309
*Galaz Energy BV was liquidated in 2022 and during 2023 the Directors decided
to transfer a separate equity reserve associated with the entity to Retained
profit for capital maintenance purposes. The balance arose on acquisition of
non-controlling interest in 2010.
Equity
Description and purpose
Share
capital
The nominal value of shares issued
Share
premium
Amount subscribed for share capital in excess of the nominal value
Deferred
shares
The nominal value of the deferred shares issued
Cumulative translation reserve Gains/losses arising on
retranslating the net assets of overseas operations into US Dollars, less
amounts recycled on disposal of subsidiaries and joint ventures
Other
reserves
Capital contribution arising on discounted loans
Merger
reserves
The excess of the fair value of the issues share capital over the nominal
value of these shares issued for acquisition of at least 90 percent equity
holding in subsidiaries
Retained
profit/(deficit)
Cumulative losses recognised in the consolidated statement of profit or loss,
adjustments on the acquisition of non-controlling interests and transfers in
respect of share based payments
Non-controlling interest The
interest of non-controlling parties in the net assets of the subsidiaries
Parent Company Statement of Changes in Equity
Share Share premium Merger reserve Retained profit US$'000 Total attributable to the owner of the Parent
capital US$'000 US$'000 US$'000
US$'000
Total equity as at 1 January 2024 33,060 - 11,511 55,299 99,870
Total comprehensive loss for the year - - - (1,622) (1,622)
Shares issued 56 126 - - 182
Total equity as at 31 December 2024 33,116 126 11,511 53,677 98,430
Share Share premium Merger reserve Retained profit US$'000 Total attributable to the owner of the Parent
capital US$'000 US$'000 US$'000
US$'000
Total equity as at 1 January 2023 33,060 - 11,511 59,012 103,583
Total comprehensive loss for the year - - - (1,336) (1,336)
Dividends declared (note 20) - - - (2,377) (2,377)
Total equity as at 31 December 2023 33,060 - 11,511 55,299 99,870
Equity
Description and purpose
Share
capital
The nominal value of shares issued
Share
premium
Amount subscribed for share capital in excess of nominal value
Deferred
shares
The nominal value of deferred shares issued
Merger reserves
The excess of the fair value of the issues
share capital over the nominal value of these shares issued for acquisition of
at least 90 percent equity holding in subsidiaries
Retained profit/(deficit)
Cumulative losses recognised in the profit or loss
Consolidated Statement of Financial Position
Company number 05966431 Notes Group
Group 2023
2024 US$'000
US$'000
Assets
Non-current assets
Unproven oil and gas assets 13 49,148 51,963
Property, plant and equipment 14 4,507 64,930
Trade and other receivables 17 3,513 3,230
Restricted use cash 1 706
Total non-current assets 57,169 120,829
Current assets
Inventories 16 3,245 1,497
Trade and other receivables 17 8,210 12,149
Current tax receivable 1,796 -
Cash and cash equivalents 18 2,644 447
15,895 14,093
Assets held for sale 32 62,099 -
Total current assets 77,994 14,093
Total assets 135,163 134,922
Equity and liabilities
Capital and reserves attributable to equity holders of the parent
Share capital 19 33,116 33,060
Share premium 19 126 -
Other reserves 2,102 2,102
Merger reserve 11,511 11,511
Retained profit 107,240 90,626
Cumulative translation reserve (77,133) (65,838)
Equity attributable to the owners of the Parent 76,962 71,461
Non-controlling interests 30 (6,471) (5,152)
Total equity 70,491 66,309
Current liabilities
Trade and other payables 21 20,820 16,095
Borrowing 24 3,678 3,624
Current tax liabilities - 989
BNG historic costs payable 23 - 3,178
Current provisions 25 3,749 4,481
28,247 28,367
Liabilities related to assets held for sale 32 15,181 -
Total current liabilities 43,428 28,367
Non-current liabilities
Borrowing 24 1,830 3,070
Deferred tax liabilities 26 6,406 7,378
BNG historic costs payable 23 - 13,746
Non-current provisions 25 705 1,160
Withholding tax payable 22 12,303 14,892
Total non-current liabilities 21,244 40,246
Total liabilities 64,672 68,613
Total equity and liabilities 135,163 134,922
Approved by the Board and authorised for issue:
Clive Nathan Carver,
Chairman,
28 November 2025
Company number: 5966431
Parent Company Statement of Financial Position
Company number 05966431 Notes Company Company
2024 2023
US$'000 US$'000
Assets
Non-current assets
Investments in subsidiaries 15 15,487 15,487
Trade and other receivables 17 88,490 89,083
Total non-current assets 103,977 104,570
Current assets
Trade and other receivables 17 85 73
Cash and cash equivalents 18 28 48
Total current assets 113 121
Total assets 104,090 104,691
Equity and liabilities
Share capital 19 33,116 33,060
Share premium 19 126 -
Merger reserve 11,511 11,511
Retained profit 53,677 55,299
Total equity 98,430 99,870
Current liabilities
Borrowing 24 168 104
Trade and other payables 21 5,492 4,717
Total current liabilities 5,660 4,821
Total equity and liabilities 104,090 104,691
Under s408 of the Companies Act 2006 the Company is exempt from the
requirement to present its own statement of comprehensive income. The Company
incurred loss after tax for the year ended 31 December 2024 in the amount of
US$1,622,000 (2023: loss of US$ 1,336,000).
Approved by the Board and authorised for issue:
Clive Nathan Carver,
Chairman,
28 November 2025
Company number: 05966431
Consolidated and Parent Company Statements of Cash Flows
Notes Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Cash flows from operating activities
Cash received from customers 54,760 39,539 - -
Payments made to suppliers for goods and services (34,414) (28,525) (857) (637)
Payments made to employees (2,476) (5,353) (361) (413)
Net cash flow generated from/ (used in) operating activities 17,870 5,661 (1,218) (1,050)
Cash flows from investing activities
Purchase of property, plant and equipment 14 (9,445) (7,283) - -
Additions to unproven oil and gas assets 13 (6,441) (4,939) - -
Loan provided to the related party as part of the potential acquisition 17 - (1,545) - -
Advances repaid by subsidiaries - - 1,143 1,099
Net cash flow (used in)/ generated from investing activities (15,886) (13,767) 1,143 1,099
Cash flows from financing activities
Dividends paid 20 - (3,026) - (2,605)
Net movement in revolving bank credit facility 24 505 3,199 - -
Loans received from related parties 24 55 4,779 55 200
Repayment of loans from related parties (696) - - -
Bank interest paid (356) (69) - -
Net cash flow (used in)/ generated from financing activities (492) 4,883 55 (2,405)
Net increase/ (decrease) in cash and cash equivalents 1,492 (3,223) (20) (2,357)
Cash and cash equivalents at the beginning of the year 1,153 4,376 48 2,405
Cash and cash equivalents at the end of the year 18 2,645 1,153 28 48
Changes in liabilities arising from financing activities are disclosed in note
24 and no non-cash additions to unproven oil and gas assets and property,
plant, and equipment are included in notes 13 and 14
respectively.
Notes to the Financial Statements
General information
Caspian Sunrise plc ("the Company") is a public limited company incorporated
and domiciled in England and Wales. The address of its registered office is 5
New Street Square, London, EC4A 3TW.
The principal activities of the Company and its subsidiaries (the "Group") are
the exploration for and the production of oil & gas and minerals.
1 Principal accounting policies
The principal accounting policies applied in the preparation of these
consolidated financial statements ("Group financial statements") and the
Company's standalone financial statements ("Company financial statements") are
set out below.
1.1 Basis of preparation
The Group and Company financial statements have been prepared in accordance
with UK-adopted international accounting standards ("IFRS") in conformity with
the requirements of the Companies Act 2006.
The Group and Company financial statements are presented in US dollars
("US$"), which is the Group's and Company's presentational currency, rounded
to the nearest thousand unless otherwise stated.
The preparation of financial statements in conformity with IFRS requires
Directors to make judgements, estimates and assumptions that affect the
application of policies and reported amounts in the financial statements. The
areas involving a higher degree of judgement or complexity, or areas where
assumptions or estimates are significant to the financial statements are
disclosed in note 2.
Going concern
The financial strategy of the Group in recent years has been to fund
compliance with work programme commitments in particular at the BNG Contract
Area's deep structures and where possible to expand the Group's activities
without unduly diluting shareholders longer term interests. This inevitably
stretched the short and medium term creditor position to levels at the period
end and subsequently which in a more established Group might appear excessive.
Completion of the sale of the MJF and South Yelemes structures, with at the
date of this report the receipt of $69.1 million of the disposal proceeds, has
allowed the repayment of a significant portion of the year end debt and a
material reduction in the amounts due to trade and other creditors.
Additionally the outstanding historic costs relating to the MJF and South
Yelemes structures are now the responsibility of the purchaser of the MJF and
South Yelemes structures.
At the date of these financial statements the Group has cash of approximately
$23 million, which is significantly in excess of the Group's financial
commitments over the next 12 months
Accordingly, the Board for the first time in many years, no longer considers
there to be a material uncertainty regarding the assessment of the Group's
financial position and have adopted the going concern basis in preparing these
financial statements.
In assessing the Group's adoption of the going concern basis in the
preparation of these financial statements the Board has assessed cash flow
forecasts prepared for the period to 31 December 2026 and assessed the risks
and uncertainties associated with the operations and funding position,
including Block 8 and West Shalva.
Should it be necessary, the Board has the following options available to
mitigate any short-term funding issues:
· To seek additional funding from advance oil sales once the
Group's remaining oil & gas assets begin production
· To sell all or part of one or more of the Group's assets -
including either the BNG Contract Area's deep structures or the Caspian
Explorer
· Seek additional short term funding from the Group's largest
shareholder group
· To seek additional equity capital
· To acquire for shares one or more cash generative businesses
1.2 New and amended standards and interpretations
There were no new standards, amendments or interpretations effective for the
first time for periods beginning on or after 1 January 2024 that had a
material effect on the Group and Company financial statements.
At the date of approval of these financial statements, there were no new
standards or amendments to IFRS which have not been applied in these financial
statements which were in issue but not yet effective and are expected to have
a material impact on the consolidated and company financial statements.
Notes to the Financial Statements (continued)
1 Principal accounting policies (continued)
1.3 Basis of consolidation
Subsidiary undertakings are entities that are directly or indirectly
controlled by the Group. Control is achieved when the Group is exposed, or
has rights, to variable returns from its involvement with the investee and has
the ability to affect those returns through its power over the investee.
Generally, there is a presumption that a majority of voting rights results in
control. To support this presumption and when the Group has less than a
majority of the voting or similar rights of an investee, the Directors
considers all relevant facts and circumstances in assessing whether the Group
has power over an investee, including:
· The contractual arrangement with the other vote holders of the
investee;
· Rights arising from other contractual arrangements; and
· The Group's voting rights and potential voting rights.
The Directors reassess whether or not the Group controls an investee if facts
and circumstances indicate that there are changes to one or more of the three
elements of control. Subsidiaries are fully consolidated from the date on
which control is transferred to the Group. They are deconsolidated from the
date that control ceases. Assets, liabilities, income and expenses of a
subsidiary acquired or disposed of during the period are included in the
consolidated financial statements from the date the Group gains control until
the date the Group ceases to control the subsidiary.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used in line with those used by
other members of the Group.
All intragroup assets and liabilities, equity, income, expenses, and cash
flows relating to transactions between members of the Group are eliminated in
full on consolidation.
Non-controlling interests in subsidiaries are identified separately from
equity attributable to the owner of the Company. On acquisition of
subsidiaries, non-controlling interests are measured at their proportionate
share of the fair value of the acquiree's identifiable net assets. Profit or
loss and each component of other comprehensive income are attributed to the
owners of the Company and to the non-controlling interests.
1.4 Foreign currency translation
Functional and presentational currencies
The functional currency for each entity in the Group is the currency of the
primary economic environment in which the entity operates. The functional
currency of the Company is the US Dollar. Other entities in the Group have the
US Dollar or Kazakh Tenge ("KZT") as their functional currencies.
The Group and Company financial statements are presented in US Dollars, which
is the Group's and Company's presentational currency.
Transactions and balances in foreign currencies
In preparing the financial statements of the individual entities, transactions
in currencies other than the entity's functional currency ("foreign
currencies") are recorded at the rates of exchange prevailing at the dates of
the transactions. At each reporting date, monetary items denominated in
foreign currencies are retranslated at the rates prevailing at the reporting
date. Non-monetary items carried at fair value that are denominated in foreign
currencies are retranslated at the rates prevailing at the date when the fair
value was determined. Non-monetary items, including the parent's share
capital, that are measured in terms of historical cost in a foreign currency
are not retranslated. Exchange differences are recognised in profit or loss in
the period in which they arise.
Consolidation
For the purpose of consolidation all assets and liabilities of Group entities
with a functional currency that is not US Dollars are translated at the rate
prevailing at the reporting date. The profit or loss is translated at the
exchange rate approximating to those ruling when the transaction took place.
Exchange difference arising on retranslating the opening net assets from the
opening rate and results of operations from the average rate are recognised
directly in other comprehensive income (the "cumulative translation reserve").
On disposal of a foreign operator, related cumulative foreign exchange gains
and losses are reclassified to profit and loss and are recognised as part of
the gain or loss on disposal.
Exchange rates
For reference, the year end exchange rate from sterling to US$ was 1.24 (2023:
1.27) and the average rate during the year was 1.30 (1.27). The year-end
exchange rate from KZT to US$ was 523.54 (2023: 454.56) and the average rate
during the year was 469.44 (2023: 456.248).
Notes to the Financial Statements (continued)
1 Principal accounting policies (continued)
1.5 Revenue
Revenue from contracts with customers is recognised when or as the Group
satisfies a performance obligation by transferring a promised good or service
to a customer. A good or service is transferred when the customer obtains
control of that good or service.
Revenue is measured at the fair value of the consideration received, excluding
value added tax ("VAT") and other sales taxes or duty.
Sale of crude oil
The transfer of control of oil and oil products sold by the Group usually
coincides with title passing to the customer. The Group satisfies its
performance obligations at a point in time.
Under the terms of domestic oil sales arrangements, the performance obligation
is satisfied when the local refinery provides the seller and the customer with
the act of acceptance of crude oil or oil products of the quantity and quality
according to the agreement between the parties.
Under the terms of export sales arrangements, the performance obligation is
satisfied when the Ocean Bill of Lading is issued by the transport company
following loading of the crude oil of specified quantity and quality on the
tanker.
Payments in advance by oil traders are recorded initially as deferred revenue,
reflecting the nature of the transaction. Subsequently, the deferred revenue
is reduced and revenue is recorded, as sales are made under the Group's
revenue recognition policy with the performance obligation satisfied.
Oil trading
The Group refines some of the crude oil it produces, via a third-party
refineries, and sells the resulting oil products on the domestic market.
Revenue for the sale of oil products is recognised at a point in time when the
ownership passes to the customer.
Onshore and offshore drilling services
The Group has applied the input method of revenue recognition in accounting
for revenue on unit rate/lump sum contracts, under which revenue is recognised
over time according to the stage of completion reached in the contract by
measuring the proportion of costs incurred for work performed relative to the
total estimated costs. For contracts that are at an early stage of the
drilling process, total costs to complete may not be estimated reliably, in
which case the cost recovery method is used whereby revenue is only recognised
for the costs that are recoverable.
Drilling services contain distinct goods and services, but these are not
considered distinct in the context of the contract and are therefore combined
into a single performance obligation. At contract inception management
consider all applicable factors to determine whether the contract contains a
single performance obligation or multiple performance obligations.
A change to an existing contract for a project of the Group is a modification,
which could change the scope of the contract, the price of the contract, or
both. The Group uses two methods to account for a contract modification: (1)
as a separate contract when the modification promises distinct goods or
services and the price reflects the stand alone selling price; or (2) as a
cumulative catch-up adjustment when the modification does not add distinct
goods or services and is part of the same performance obligation.
1.6 Cost of sales
For structures or contract areas with full production licences oil sales are
recognised as revenue and the associated costs as costs of sales. For sale of
oil products, cost of sales includes the cost of refining crude oil.
Direct costs to fulfil drilling contracts, including employee costs of field
staff, are recognised in cost of sales as incurred. When it is probable that
the total contract costs will exceed total contract revenue, the contract
becomes onerous, and an onerous contract provision is created in accordance
with the Group's accounting policy 1.10. Changes in the onerous contract
provision are recognised within other operating costs.
1.7 Current tax
Current tax is based on taxable profit for the year. Taxable profit differs
from profit as reported in the profit or loss statement because it excludes
items of income or expense that are taxable or deductible in other years and
it further excludes items that are never taxable or deductible. The Group's
liability for current tax is calculated using tax rates that have been enacted
or substantively enacted by the reporting date.
In case of the uncertainty of the tax treatment, the Group assess, whether it
is probable or not, that the tax treatment will be accepted, and to determine
the value, the Group use the most likely amount or the expected value in
determining taxable profit, tax bases, unused tax losses, unused tax credits
and tax rates.
Withholding tax payable in Kazakhstan
According to requirements of the Tax Code of Kazakhstan, withholding taxes
payable for non-residents should be withheld from the total amount of interest
income of non-residents and paid to the government when interest is paid (in
cash) to non-residents. The companies should pay taxes from non-residents'
interest income derived from sources in the Republic of Kazakhstan on behalf
of these non-residents.
Notes to the Financial Statements (continued)
1 Principal accounting policies (continued)
1.8 Deferred tax
Deferred tax is provided on temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts
used for taxation purposes. The following temporary differences are not
provided for: the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit other than in a business combination,
and differences relating to investments in subsidiaries to the extent that
they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of
realisation or settlement of the carrying amount of assets and liabilities,
using tax rates enacted or substantively enacted at the reporting date.
Deferred tax liabilities are generally recognised for all taxable temporary
differences. A deferred tax asset is recorded only to the extent that it is
probable that taxable profit will be available, against which the deductible
temporary differences can be utilised.
1.9 Unproven oil and gas assets
The Group applies the full cost method of accounting for exploration and
unproven oil and gas asset costs, having regard to the requirements of IFRS 6
'Exploration for and Evaluation of Mineral Resources' ("IFRS 6"). Under the
full cost method of accounting, costs of exploring for and evaluating oil and
gas properties are accumulated and capitalised by reference to appropriate
cost pools. Such cost pools are based on license areas. The Group currently
has two cost pools: the shallow structures in BNG and the 3A Best licence
area.
Exploration and evaluation costs include costs of license 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 recognised directly in profit or loss 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 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.
The amounts included within unproven oil and gas assets include the fair value
that was paid for the acquisition of partnerships holding subsoil use in
Kazakhstan. These licenses have been capitalised to the Group's full cost pool
in respect of each license area.
Exploration and unproven oil and gas assets related to each exploration
license or prospect are not amortised but are carried forward until the
technical feasibility and commercial feasibility of extracting a mineral
resource are demonstrated, at which point an impairment review is carried out
and assets are transferred to proven oil and gas properties.
Exploration and unproven oil and gas assets are reviewed for impairment if
events or changes in circumstances indicate that the carrying amount may not
be recoverable as at the reporting date. In accordance with IFRS 6, the
Directors firstly consider 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 a specific area is neither budgeted nor planned;
§ exploration for and evaluation of hydrocarbons in a specific area have
not led to the discovery of commercially viable quantities of hydrocarbons and
the Group has decided to discontinue such activities in the specific area; and
§ sufficient data exists to indicate that although a development in a
specific area is likely to proceed, the carrying amount of the exploration and
evaluation assets is unlikely to be recovered in full from successful
development or by sale.
If any such facts or circumstances are noted, the Directors perform an
impairment test in accordance with the provisions of IAS 36 'Impairment of
assets'. The aggregate carrying value is compared against the expected
recoverable amount of the cash generating unit, being the relevant cost pool.
The recoverable amount is the higher of value in use and the fair value less
costs to sell.
Notes to the Financial Statements (continued)
1 Principal accounting policies (continued)
1.10 Property, plant and equipment
Property, plant and equipment ("PPE") consists of proven oil and gas
properties and other assets.
Proven oil and gas assets
Once an exploration 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. The costs transferred comprise direct costs associated with the
relevant wells and infrastructure, together with an allocation of the wider
unallocated exploration costs in the cost pool such as original acquisition
costs for the field.
Proven oil and gas properties are subsequently accounted for in accordance
with provisions of the cost model and are depleted on unit of production basis
based on commercial reserves of the pool to which they relate.
As part of the Kazakh licencing regime, upon award of a production contract in
respect of the BNG licence area, an obligation to make a payment to the
licencing authority may be triggered, which is settled over a 10 year period
in equal quarterly instalments. Such payments are considered to form a cost
of the licence and are capitalised to proven oil and gas assets and
subsequently depreciated on a units of production basis in accordance with the
Group's depreciation policy. In circumstances where the amount assessed by
the authorities is contested, the Group records a provision discounted using a
Kazakh government bond yield with a term approximating to the payment profile
and the discount is unwound over the payment term and charged to finance
costs. Payments made are charged against the provision.
Other PPE assets
All other PPE assets, including the Caspian Explorer, are stated at cost less
accumulated depreciation and impairment. The assets are depreciated on a
straight-line basis, at rates calculated to write off the cost less the
estimated residual value of each asset over its expected useful economic life.
The residual value is the estimated amount that would currently be obtained
from disposal of the asset if the asset were already of the age and in the
condition expected at the end of its useful life. Expected useful economic
life and residual values are reviewed annually. The annual rates of
depreciation are as follows:
- motor vehicles 4-5
years
-
other
over 2-4 years
Impairment of PPE
At each reporting date, the Directors review the carrying values of the
Group's PPE to determine whether there is any indication that those assets
have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent
of the impairment loss, if any. Where the asset does not generate cash flows
that are independent from other assets, the Directors estimate the recoverable
amount of the smallest cash-generating unit ("CGU") to which the asset
belongs. The recoverable amount is the higher of fair value less costs to sell
and value in use.
Fair value less costs to sell is determined by discounting the post-tax cash
flows expected to be generated by the CGU, net of associated selling costs,
and takes into account assumptions market participants would use in estimating
fair value including future capital expenditure and development cost for
extraction of the field reserves.
In assessing value in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for
which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or CGU) is estimated to be less than
its carrying amount, the carrying amount of the asset (or CGU) is reduced to
its recoverable amount. An impairment loss is recognised in profit or loss
immediately.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (or CGU) is increased to the revised estimate of its recoverable amount,
but so that the increased carrying amount does not exceed the carrying amount
that would have been determined had no impairment loss been recognised for the
asset (or CGU) in prior years. A reversal of an impairment loss is recognised
in profit or loss immediately.
Workovers/Overhauls and maintenance
From time to time a workover or overhaul or maintenance of existing proven oil
and gas properties is required, which normally falls into one of two distinct
categories. The type of workover dictates the accounting policy and
recognition of the related costs:
Capitalisable costs - cost will be capitalised where the performance of an
asset is improved, where an asset being overhauled is being changed from its
initial use, the assets' useful life is being extended, or the asset is being
modified to assist the production of new reserves.
Non-capitalisable costs - expense type workover costs are costs incurred as
maintenance type expenditure, which would be considered day-to-day servicing
of the asset. These types of expenditures are recognised within cost of sales
in the statement of comprehensive income as incurred. Expense workovers
generally include work that is maintenance in nature and generally will not
increase production capability through accessing new reserves, production from
a new zone or significantly extend the life or change the nature of the well
from its original production profile.
1.11 Abandonment provision
Provision is made for the present value of the future cost of the
decommissioning of oil wells and related facilities. This provision is
recognised when the asset is installed. The estimated costs, based on
engineering cost levels prevailing at the reporting date, are computed on the
basis of the latest assumptions as to the scope and method of decommissioning.
The corresponding amount is capitalised as a part of the oil and gas asset
and, when in production is amortised on a unit-of-production basis as part of
the depreciation, depletion and amortisation charge. Any adjustment arising
from the reassessment of estimated cost of decommissioning is capitalised,
while the charge arising from the unwinding of the discount applied to the
decommissioning provision is treated as a component of the interest charge.
Notes to the Financial Statements (continued)
1 Principal accounting policies (continued)
1.12 Investment in subsidiaries
In Company financial statements, investments in subsidiaries undertakings are
shown at cost less allowance for impairment. Investments in subsidiaries are
reviewed annually for impairment indicators and, if required, are subject to
impairment reviews as detailed in note 1.9.
1.13 Inventories
Inventories are initially recognised at cost, and subsequently at the lower of
cost and net realisable value. Cost comprises all costs of purchase and other
costs incurred in bringing the inventories to their present location and
condition.
1.14 Deferred and accrued revenue
Deferred revenue is a liability that arises when a customer pays consideration
before the respective goods (crude oil or oil products) or services (drilling)
are transferred to the customer.
Accrued revenue is an asset that arises when the Group performs its contract
obligations by transferring goods or services to a customer before the
consideration is paid or before payment is due. A right to payment that is
unconditional is a financial asset and is recognised as a trade receivable.
Accrued revenue is assessed annually for impairment in accordance with the
same accounting policy as applied to trade receivables (note 1.15).
1.15 Financial instruments
Financial instruments, or their component parts, are classified on initial
recognition as a financial asset, a financial liability or an equity
instrument in accordance with the substance of the contractual agreement.
Financial assets and financial liabilities are recognised when the Company or
Group becomes a party to the contractual provisions of the financial
instrument.
Financial assets are derecognised when the contractual rights to the cash
flows from the asset expire, or when it transfers the financial asset and
substantially all the risks and rewards of ownership of the asset to another
party. Financial liabilities are derecognised when the Group's obligations are
discharged, cancelled or have expired.
Financial assets
Financial assets are classified at initial recognition into one of the
categories listed below, depending upon the business model for managing the
financial assets and the nature of the contractual cash flow characteristics
of the financial asset.
Amortised cost
Financial assets held at amortised cost comprise cash and cash equivalents,
trade and other receivables and amounts advanced to subsidiaries and loans to
related parties.
These assets are non-derivative financial assets with fixed or determinable
payments that are not quoted in an active market. They arise principally
through the provision of goods and services to customers (e.g., trade
receivables), but also incorporate other types of financial assets where the
objective is to hold their assets in order to collect contractual cash flows
and the contractual cash flows are solely payments of the principal and
interest. They are initially recognised at fair value plus transaction costs
that are directly attributable to their acquisition or issue and are
subsequently carried at amortised cost using the effective interest rate
method, less provision for impairment.
Impairment provisions for trade and other receivables are recognised based on
the simplified approach within IFRS 9 'Financial Instruments' ("IFRS 9") using
the lifetime expected credit losses ("ECL") method. During this process the
probability of the non-payment of the receivables is assessed. This
probability is then multiplied by the amount of the expected loss arising from
default to determine the lifetime ECL for the receivables. For trade and other
receivables, which are reported net, such provisions are recorded in a
separate provision account with the loss being recognised within
administrative expenses in the statement of comprehensive income. On
confirmation that the trade or other receivable will not be collectable, the
gross carrying value of the asset is written off against the associated
provision.
Financial liabilities
Financial liabilities include trade and other payables, borrowings and other
payables. All financial liabilities are recognised initially at fair value,
net of transaction costs incurred, and are subsequently stated at amortised
cost, using the effective interest method.
If a loan is renegotiated on substantially different terms, this is treated as
an extinguishment of the original financial liability and the recognition of a
new financial liability with a gain or loss recognised in profit or loss. When
the Company extinguishes a financial liability in return for equity, the
shares issued are recognised at their fair value with any difference to the
carrying value of the financial liability recognised in profit or loss.
Share capital
Ordinary and deferred shares are classified as equity. Incremental costs
directly attributable to the issue of new shares or options are shown in
equity as a deduction from the proceeds.
1.16 Restricted use cash
Restricted use cash represents cash set aside by the Group for the purpose of
creating an abandonment fund to cover the future cost of the decommissioning
of oil and gas wells and related facilities and in accordance with local legal
rulings. The cash is held in a segregated bank account and under the Subsoil
Use Contracts the Group must place 1% of the capital expenditure incurred in
the year into an escrow deposit account, unless agreed otherwise with the
Ministry of Energy. At the end of the contract this cash will be used to
return the field to the condition that it was in before exploration started.
Notes to the Financial Statements (continued)
1 Principal accounting policies (continued)
1.17 Cash and cash equivalents
Cash and cash equivalents are defined as cash on hand and demand deposits with
maturity of 3 months or less. Restricted use cash is presented separately.
1.18 Other provisions
A provision is recognised when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of
economic benefits will be required to settle the obligation. If the effect is
material, provisions are determined by discounting the expected future cash
flows at a pre-tax rate that reflects current market assessments of the time
value of money and, where appropriate, the risks specific to the liability.
An onerous contract is a contract in which the unavoidable costs of meeting
the obligations under the contract exceed the economic benefits expected to be
received under it. The amount recognised will be the best estimate of the
expenditure required to settle the present obligation at the reporting date.
1.19 Share-based payments
The Group has used shares and share options as consideration for services
received from employees.
Equity-settled share-based payments to employees and others providing similar
services are measured at fair value at the date of grant. The fair value
determined at the grant date of such an equity-settled share-based instrument
is expensed on a straight-line basis over the vesting period, based on the
Group's estimate of the shares that will eventually vest.
Equity-settled share-based payment transactions with other parties are
measured at the fair value of the goods or services received, except where the
fair value cannot be estimated reliably, in which case they are measured at
the fair value of the equity instruments granted, measured at the date the
entity obtains the goods or the counterparty renders the service. The fair
value determined at the grant date of such an equity-settled share-based
instrument is expensed since the shares vest immediately. Where the services
are related to the issue of shares, the fair values of these services are
offset against share premium where permitted.
Fair value is measured using the Black-Scholes model. The expected life used
in the model has been adjusted based on the management's best estimate, for
the effects of non-transferability, exercise restrictions and behavioural
considerations.
1.20 Warrants
Warrants are separated from the host contract as their risks and
characteristics are not closely related to those of the host contracts. Where
the exercise price of the warrants is in a different currency to the
functional currency of the Company, at each reporting date the warrants are
valued at fair value with changes in fair values recognised through profit or
loss as they arise. The fair values of the warrants are calculated using the
Black-Scholes model. Where the warrant exercise price is in the same currency
as the functional currency of the issuer and involve the issuance of a fixed
number of shares the warrants are recorded in equity.
1.21 Merger reserve
Merger reserve represents the excess of the fair value of the issued share
capital over the nominal value of these shares issued for acquisition of
investments in subsidiaries where the Company has secured at least 90% equity
holding in accordance with section 612 of the Companies Act 2006. The Company
allocates merger reserve to the retained earnings/deficit account on disposal
of the investment the reserve relates to or if this investment is written down
for impairment.
1.22 Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision maker, who is responsible for allocating resources and assessing
performance of the operating segments and making strategic decisions, has been
identified as the Board of Directors. The Group has four operating segments
being oil exploration and production; onshore drilling services in Kazakhstan
provided by CTS LLP, offshore drilling services provided using the Caspian
Explorer, oil trading and the expenses corporate allocated, and therefore
there are five reporting segments. Following expected acquisitions in the
minerals sectors there would be an additional fifth segment. The Group has
several cost pools divided based on the different contractual territory of its
assets.
1.23 Assets held for sale and disposal groups
Non-current assets and disposal groups classified as held for sale are
measured at the lower of carrying amount at the date of classification and
fair value less costs to sell. The depreciation of such assets is discontinued
on classification as held for sale.
Non-current assets and disposal groups are classified as held for sale if
their carrying amount will be recovered through a sale transaction rather than
through continuing use. This condition is regarded as met only when the sale
is highly probable and the asset (or disposal group) is available for
immediate sale in its present condition. The Directors must be committed to
the sale which should be expected to qualify for recognition as a completed
sale within one year from the date of classification.
1.24 Discontinued operations
A discontinued operation is a component of the entity that has been disposed
of or is classified as held for sale and that represents a separate major line
of business or geographical area of operations, is part of a single
coordinated plan to dispose of such a line of business or area of operations,
or is a subsidiary acquired exclusively with a view to resale. The results of
discontinued operations are presented separately in the statement of
comprehensive income.
Notes to the Financial Statements (continued)
2 Critical accounting estimates and judgements
In the process of applying the Group's accounting policies, which are
described in note 2, the Directors are required to make judgements, estimates
and assumptions which affect reported income, expenses, assets, liabilities
and disclosure of contingent assets and liabilities. The estimates and
associated assumptions are based on historical experience, expectations of
future events and other factors that are believed to be reasonable under the
circumstances. Actual results in the future could differ from such estimates.
The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period in which the
revision is made.
2.1 Key sources of estimation uncertainty
2.1.2 Revenue recognition on onshore drilling contracts with
third parties
The determination of anticipated costs for completing a drilling contract is
based on estimates that can be affected by a variety of factors such as
potential variances in scheduling and cost of materials along with the
availability and cost of qualified labour and subcontractors, productivity,
and possible claims from subcontractors.
The determination of anticipated revenues includes the contractually agreed
revenue and may also involve estimates of future revenues from claims and
unapproved variations, if such additional revenues can be reliably estimated
and it is considered probable that they will be recovered.
A variation results from a change to the scope of the work to be performed
compared to the original contract signed. An example of such contract
variation could be a change in the specifications or design of the project,
whereby costs related to such variation might be incurred prior to the
client's formal contract amendment signature. A claim represents an amount
expected to be collected from the client or a third party as reimbursement for
costs incurred that are not part of the original contract.
As risks and uncertainties are different for each project, the sources of
variations between anticipated costs and actual costs incurred will also vary
for each project. The determination of estimates is based on internal policies
as well as historical experience.
For the year ended 31 December 2024, the Group recognised revenue of US$1.3
million (2023: US$4.13 million) relating to onshore drilling contracts
provided to third parties.
2.1.3 Decommissioning obligation
Provision has been made in the accounts for future decommissioning costs to
plug and abandon wells as set out in note 25. The costs of provisions have
been added to the cost of the oil and gas asset or the exploration asset
depending on the well's stage of development.
The decommissioning liability is stated in the accounts at discounted present
value and accreted up to the final expected liability by way of an annual
finance charge. The Group has potential decommissioning obligations in respect
of its interests in Kazakhstan.
The extent to which a provision is required in respect of these potential
obligations depends, inter alia, on the legal requirements at the time of
decommissioning, the cost and timing of any necessary decommissioning works
which are estimated to be in 2043, the discount rate to be applied to such
costs was 8.35% (2023: 11%) and the expected inflation rate in Kazakhstan was
8.6% (2023: 9.8%). Actual costs incurred in future periods may substantially
differ from the amounts of provisions. In addition, future changes in
environmental laws and regulations, estimates of deposit useful lives and
discount rates may affect the carrying value of this provision.
2.1.4 Estimation of credit losses of receivables from
subsidiaries
The Directors have used judgement to determine to the expected credit loss
provision against amounts due from subsidiaries in the Company financial
statements, which involves estimates of the ability of the subsidiaries to
repay these loans, which itself is based on the estimates of the minimum
realisable value of the Group's assets, which are primarily the production and
exploration assets and the Caspian Explorer. The Directors have estimated an
expected credit loss provision of US$20.7m is required as at the year-end
(2023: US$20.7m). The estimate of the recoverable amounts of receivables due
from subsidiaries is primarily linked to the Group's exploration and proven
oil and gas assets having net realisable values of at least their carrying
values. Sections 2.2.1 and 2.2.2 below detail the significant judgements with
respect to impairment indicators of these assets.
2.1.5 Indemnity receivables in relation to the 3A Best
acquisition
Under the terms of the Sale and Purchase Agreement ("SPA") for 3A Best, the
three vendors provided indemnities that obligations related to the period
prior to acquisition would be reimbursed. Judgement has been applied in
assessing the recoverability of the indemnity receivables, which included
assessment of the terms of the SPA, confirmations received from the vendors
and assessments of the ability to meet such payments. The Directors, have in
previous accounting periods made a provision for 67% of the amounts due on the
expected credit losses, which at 31 December 2023 left a balance of US$
1,275,000 in other receivables (note 17). The Directors have now decided not
to seek the renewal the 3A Best licence and to write-off the previously
provided for balance of US$ 2,551,000. The Directors continue to pursue the
recovery of the remaining balance of US$ 1,275,000.
2.1.6 Uncertain tax position
The Directors are required to exercise judgment in interpreting
continually-changing regulations with regards to the Group's tax position and
the extent to which tax treatments historically adopted by the Group will be
accepted or rejected by the relevant tax authority. The Directors believe that
adequate provisions have been made for all income tax obligations in the
current year.
2.1.7 Recoverability of VAT (note 16)
The Group holds VAT receivables of $1.9 million (2023: $2.9 million) as
detailed in note 17 which are anticipated to be primarily recovered through
offset of future VAT payable in accordance with Kazakh legislation. Management
have assessed the recoverability of the asset based on forecast levels of VAT
payables which demonstrate that the balance will be recovered within 1 year
(2023: 1 year). This required estimates regarding future production, oil
prices and expenditure.
Notes to the Financial Statements (continued)
2 Critical accounting estimates and judgements (continued)
2.1 Key sources of estimation uncertainty (continued)
2.1.8 Hydrocarbon reserve and resource estimate
The Group estimates and reports hydrocarbon reserves in line with the
principles contained in the SPE Petroleum Resources Management Reporting
System (PRMS) framework. As the economic assumptions used may change and as
additional geological information is obtained during the operation of a field,
estimates of recoverable reserves may change. The volume of proved and
probable oil reserves is an estimate that affects the unit of production
depreciation of producing oil and gas property, and a downward revision of the
estimate is an impairment indicator. Proved and probable reserves and
contingent resources are estimated using standard recognised evaluation
techniques.
2.1.9 Carrying value of exploration and evaluation costs
Under the full cost method of accounting for exploration and evaluation costs,
such costs are capitalised as intangible assets by reference to appropriate
cost pools, and are assessed for impairment on a concession basis based on the
impairment indicators detailed in accounting policy note 1.9.
The Directors note that the Group's exploration appraisal licence for the BNG
deep structures Airshagyl & Yelemes Deep expired in June 2024. The
Airshagyl licence has been renewed in May 2025 as a 25 year production licence
but for an initial three-year period to May 2028 during which additional
reserves may be credited based on drilling results. The renewal application
for the Yelemes Deep licence at the date of these financial statements remains
with the Kazakh regulatory authorities. Based on the fact that the Group has
met its spending commitments under the Yelemes Deep structure agreed work
programme, the Directors expect the licence for the structure to be renewed
although the timing for such a renewal is unclear.
Due to the uncertainty around the licence renewal for Yelemes Deep and a lower
reserve estimate accepted by the Kazakh authorities for Airhagyl than what the
Directors expected, the Directors determined that impairment indicators
existed as at 31 December 2024 and thus an impairment review has been carried
out. Details of the impairment calculations, significant inputs and
sensitivities are detailed in note 13. No impairment charge has been
recognised (2023: none).
2.2 Judgements
The following are the critical judgements, apart from those involving
estimations (which are disclosed in 2.1 above), that the Directors have made
in the process of applying the Group's accounting policies and that have the
most significant effect on the amounts recognised in financial statements.
2.2.1 Recoverability of investments in subsidiaries
The recoverability of investments in subsidiaries is driven primarily by the
same judgements and uncertainties as the recoverability of the carrying value
of the proven and unproven oil and gas assets which are discussed above. The
Directors have concluded that no additional impairment provision is required
in the current financial year (2023: US$ nil).
2.2.2 Classification of disposal group as assets held for sale
and discontinued operation
During the year ended 31 December 2024, the Group signed a heads of terms of
agreement ("HoT") and then executed a sale and purchase agreement ("SPA") to
sell its production assets in MJF and South Yelemes, and the associated
historical cost liabilities and asset retirement obligations (together the
"BNG Disposal Group") to Absolute Resources LLP ("Absolute"), an unconnected
third party. The transfer of ownership of the MJF and South Yelemes structures
completed on 7 July 2025. In preparing these consolidated financial
statements, the Directors made the following judgments:
- The Directors concluded that the BNG Disposal Group met the
definition of a disposal group held for sale at the date of signing of the
HoT, 2 September 2024, as the conditions precedent to complete the
transaction, including, inter alia, regulatory and shareholder approvals and
Absolute's confirmation of financing, were highly probable to be met;
- The BNG Disposal Group accounts for all of the Group's crude oil
production and is a separate CGU and therefore meets the definition of a
discontinued operation. The Group's oil trading business has to date only
purchased crude oil from the BNG Disposal Group, however it is not part of the
discontinued operation. The Directors judged that the elimination of
intercompany sale and purchases between the BNG Disposal Group and the oil
trading business should be included as part of the continuing operations, as
this would result in the continuing operations showing the incremental revenue
and profit contributed by trading business to the Group, which is more
representative of the Group going forward.
3 Restatement of comparative amounts
In these financial statements, as required by IFRS 5 'Non-current Assets Held
for Sale and Discontinued Operations', the comparative amounts for the year
ended 31 December 2023 in the consolidated income statement and the related
notes were retrospectively restated to exclude the results of the BNG Disposal
Group which was classified as a discontinued operation during the year ended
31 December 2024 (see note 11).
Notes to the Financial Statements (continued)
4 Segment reporting and revenue analysis
Operating segments
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision maker. The chief operating
decision maker, who is responsible for allocating resources and assessing the
performance of the operating segments and making strategic decisions, has been
identified as the Board of Directors.
The Group operated in four (2023: four) operating segments during 2024 and
2023: Exploration for and production of crude oil; onshore drilling services
(CTS LLP); offshore drilling services (Caspian Explorer); and oil trading,
which was a new segment for 2023. All four segments operate and generate
revenues in Kazakhstan.
While under IFRS reporting requirements the consolidated profit and loss
statement shows the results of the BNG MJF and South Yelemes shallow
structures as a discontinued operation, without a breakdown of those
structures revenue, operating profit and profit before tax, for the purposes
of meaningful comparison, the segmental analysis set out below includes for
2024 and 2023 the revenue, operating profit and profit before tax derived from
the MJF and South Yelemes structures.
In 2024 BNG Ltd. LLP (BNG) accounted for 100% (2023: 100%) of the exploration
and production revenues set out in the segmental analysis, which shows that
total revenue from crude oil sales generated by BNG in 2024 was US$ 20,795,000
(2023: US$ 21,615,000), net operating income for the year from the exploration
and production of crude oil was US$9,954,000 (2023: US$13,401,000). Segmental
assets have decreased to US$ 115,106,000 during 2024 primarily due to a
devaluation of the Kazakh tenge by about 15%, which are further detailed in
the Financial Review.
KC Caspian Explorer LLP (KCCE), representing the offshore drilling services
operating segment, historically providing drilling and related services in the
shallow northern Caspian Sea. In 2024, KCCE earned revenue of US$14,300,000
(2023: US$641,000) as a result of the drilling services provided for a
consortium led by Italy's ENI.
In 2024 Caspian Technical Services LLP (CTS LLP) continued to provide onshore
drilling and repair services primarily to BNG. Revenue for onshore drilling
and repair services provided to EPC Munai LLP ("Block 8"), a related party,
during 2024 was US$ 1,300,000 (2023: US$ 4,126,000).
Revenue
The Group's revenues are principally derived from the sale of oil in
Kazakhstan. In September 2019 following the award of a full production
licence, a proportion of oil produced from the MJF structure at BNG became
eligible to be sold on the export market.
Under the terms of sales on the local market, the performance obligation is
the supply of oil and the performance obligation is satisfied at a point in
time, being the delivery of oil to the refinery. Control passes to the
customer at this point with title and risk transferred.
Under the terms of sales on the local market, to local mini refineries the
performance obligation is the supply of oil and the performance obligation is
satisfied at a point in time, being the collection of oil at the wellhead.
Control passes to the customer at this point with title and risk transferred.
Under the terms of export sales control over the oil delivered is with the
Group until the customer confirms it has been shipped onto the tanker. When
advances are received from oil traders for delivery of future production at
specified prices, deferred revenue is recorded and the liability reduced as
oil is delivered. Where advances are made for future production and the
financing component of such transactions is material, a finance charge is
recorded based on the market rate of interest.
In 2024, KCCE earned revenue of US$14,300,000 (2023: US$641,000) as a result
of the drilling services provided for a consortium led by Italy's ENI.
In 2024 CTS LLP continued to provide onshore drilling and repair services for
the Group and for EPC Munai LLP, a related party.
Oil trading consists of purchasing crude oil, funding its refining and selling
the resultant oil products produced to third parties.
Below is the summary of the results of the segments during 2024 and 2023:
Notes to the Financial Statements (continued)
4 Segment reporting and revenue analysis (continued)
2024 Oil and gas assets Drilling services CTS Drilling services by Caspian Explorer Oil Trading Corporate allocation Total
$000 $000 $000 $000 $000 $000
External revenues 20,795 1,311 14,300 15,859 - 52,265
Cost of sales (6,436) (2,112) (10,480) (9,629) - (28,657)
Gross profit/(loss) 14,359 (801) 3,820 6,230 - 23,608
Administrative costs (1,478) 382 272 (1,090) (2,053) (3,967)
Selling expense (2,055) - - (167) - (2,222)
Other operating income - - - - - -
Segment operating profit/(loss) 10,826 (419) 4,092 4,973 (2,053) 17,419
Finance income - - - 295 206 501
Finance costs (871) - - - (9) (880)
Profit/(loss) before income tax 9,955 (419) 4,092 5,268 (1,856) 17,040
Total assets 115,106 9,035 6,679 4,196 147 135,163
Total liabilities 39,678 13,656 462 9,836 1,040 64,672
2023 Oil and gas assets Drilling services CTS Drilling services by Caspian Explorer Oil Trading Corporate allocation Total
$000 $000 $000 $000 $000 $000
External revenues 21,615 4,126 644 10,266 - 36,651
Cost of sales (5,088) (5,007) (491) (5,340) - (15,926)
Gross profit/(loss) 16,527 (881) 153 4,926 - 20,725
Administrative costs (2,080) (1,275) (1,006) (710) (960) (6,031)
Selling expense (1,046) (1) - (1,946) - (2,993)
Other operating income - - - - 3,774 3,774
Segment operating profit/(loss) 13,401 (2,157) (853) 2,270 2,814 15,475
Finance income 62 - - - 169 231
Finance costs (920) - - - (920)
Profit/(loss) before income tax 12,543 (2,157) (853) 2,270 2,983 14,786
Total assets 117,571 8,187 3,289 2,468 3,407 134,922
Total liabilities 53,714 5,073 674 5,834 3,318 68,613
The Oil and gas operating segment includes the results of discontinued
operations, BNG Disposal Group, which are further detailed in note 11. BNG
Disposal Group contributed US$11,788,000 (2023: US$14,940,000) to the profit
before tax of the Oil and gas operating segment.
For the year ended 31 December 2024, no external customer accounted for more
than 10% of the revenue arising from the sale of crude oil in BNG (included
within discontinued operations). One external customer accounted for more than
10% of the revenue arising from the sale of crude oil for the year ended 31
December 2023 as detailed below:
Group Group
2024 2023
US$'000 US$'000
Customer A 1,450 8,068
1,450 10,071
Notes to the Financial Statements (continued)
5 Operating profit
Group operating profit from continuing operations for the year has been
arrived after charging / (crediting):
Group Group
2024 2023
US$'000 US$'000
(restated)
Staff costs (note 7) 2,711 3,000
Depreciation of property, plant and equipment (note 14) 82 872
Cost of inventories recognised within cost of sales 11,640 6,925
Auditor remuneration (note 6) 496 327
Loss allowance on trade receivables - 629
Other operating (income) - (3,774)
Net foreign exchange losses (287) 65
Other operating income for the year ended 31 December 2023 represents a
release of the social development programme provision in relation to the
Group's obligations under the 3A Best licence of US$ 1,505,000 disclosed in
note 12 and write-off of other payables of US$ 2,269,000 in relation to a past
transaction.
6 Group Auditor's remuneration
Fees payable by the Group to the Company's auditors, PKF Littlejohn LLP (BDO
LLP were the auditors for the year ended 31 December 2022) and its member
firms in respect of the year:
Group Group
2024 2023
US$'000 US$'000
Fees payable to the Company's auditor and its associates for the audit of the
Company and Group financial statements:
PKF Littlejohn LLP - current year fee 286 162
PKF Littlejohn LLP - additional fee in respect of prior year audit 119 -
BDO LLP - 104*
405 266
Other services provided by BDO LLP - tax compliance services 11 10
416 276
*additional fees in respect of the audit of the 2022 Group financial
statements.
Fees payable by the Group to Grant Thornton and its associates in respect of
the year:
Group Group
2024 2023
US$'000 US$'000
Auditing of accounts of subsidiaries of the Company 80 70
80 70
7 Staff costs
Staff costs during the year Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Wages and salaries 2,476 2,675 255 364
Social security costs 192 227 - -
Pension costs 43 98 - -
2,711 3,000 255 364
In addition, payroll expenses of US$2,084,000 were capitalised into unproven
oil and gas assets in 2024 (2023: US$1,494,000) and the amounts included
within cost of sales were US$3,109,000 (2023: US$ $2,449,000).
Average monthly number of employees Group Group Company Company
(including executive Directors) 2024 2023 2024 2023
Technical 18 17 - -
Field operations 214 233 - -
Finance 14 13 1 1
Administrative and support 37 33 3 3
283 296 4 4
Notes to the Financial Statements (continued)
8 Finance cost
Group Group
2024 2023
US$'000 US$'000
Interest on borrowings (note 24) 365 399
Unwinding of discount on BNG licence payment payable 396 471
Unwinding of discount on provisions (note 25) 119 50
880 920
9 Finance income
Group Group
2024 2023
US$'000 US$'000
Interest on loans to related parties 206 169
Bank interest 295 62
501 231
10 Taxation
Analysis of charge for the year Group Group
2024 2023
US$'000 US$'000
Current tax charge 249 3,681
Deferred tax charge - -
249 3,681
Taxation attributable to:
(Loss) / profit from continuing operations (2,109) 689
Profit from discontinued operations 2,358 2,992
249 3,681
Group Group
2024 2023
US$'000 US$'000
(restated)
Profit before tax from continuing operations 5,251 (174)
Profit before tax from discontinued operations 11,788 14,960
Profit before tax 17,039 14,786
4,260 3,697
Tax on the above at the standard rate of corporate income tax in the UK 25%
(2023: 25%)
Effects of:
Differences in tax rates (1,642) (2,803)
Non-taxable income (542) -
Non-deductible expenses 42 890
Withholding tax on interest expense (699) 909
Unrecognised tax losses carried forward (note 26) (1,170) 988
249 3,681
Notes to the Financial Statements (continued)
11 Discontinued operations
As detailed in note 2.2.3, during the year ended 31 December 2024, the BNG
Disposal Group has been classified as held for sale and represents a
discontinued operation. The financial performance and cash flow information
for the BNG Disposal Group for the years ended 31 December 2024 and 31
December 2023 is detailed below:
Group Group
2024 2023
US$'000 US$'000
Revenue 20,795 21,615
Cost of sales (6,436) (5,088)
Gross profit 14,359 16,527
Selling expense (2,055) (1,046)
Administrative costs - -
Operating profit 12,304 15,481
Finance cost (515) (521)
Profit before taxation 11,789 14,960
Tax charge (2,358) (2,992)
Profit after taxation from discontinued operations 9,431 11,968
Cash flows:
Net cash inflow from operating activities 9,489 9,734
Net cash outflow from investing activities (10,691) (7,267)
Net cash (decrease)/increase in cash generated by the discontinued operations (1,202) 2,467
Details of assets and liabilities of the BNG Disposal Group are included in
note 32.
12 Earnings per share
Earnings per share ("EPS") is calculated by dividing the profit attributable
to ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year including shares to be issued.
Group Group
2024 2023
US$'000 US$'000
Profit for the year from continuing operations, attributable to parent 7,278 (1,258)
Profit for the year from discontinued operations, attributable to parent 9,336 11,848
16,614 10,590
EPS - Basic Group Group
2024 2023
Weighted average no of shares 2,253,580,210 2,250,501,559
Basic Earnings per share from continuing operations (US cents) 0.32 (0.06)
Basic Earnings per share from discontinued operations (US cents) 0.41 0.53
Total Basic Earnings per share (US cents) 0.74 0.47
EPS - Diluted Group Group
2024 2023
Weighted average no of shares 2,253,580,210 2,250,501,559
Dilutive effect of potentially dilutive ordinary shares due to share options - 2,197,802
(note 27)
Weighted average no of shares for the purpose of Diluted EPS 2,253,580,210 2,252,699,361
Diluted Earnings per share from continuing operations (US cents) 0.27 (0.06)
Diluted Earnings per share from discontinued operations (US cents) 0.41 0.53
Total Diluted Earnings per share (US cents) 0.68 0.47
Other than share options there are no instruments that are potentially
dilutive.
Notes to the Financial Statements (continued)
13 Unproven oil and gas assets
COST Group
US$'000
Cost at 1 January 2023 65,028
Additions 5,801
Foreign exchange difference 1,894
Cost at 31 December 2023 72,723
Additions 6,441
Foreign exchange difference (11,990)
Cost at 31 December 2024 67,174
ACCUMULATED IMPAIRMENT Group
US$'000
Accumulated impairment at 1 January 2023 20,397
Foreign exchange difference 363
Accumulated impairment at 31 December 2023 20,760
Foreign exchange difference (2,734)
Accumulated impairment at 31 December 2024 18,026
NET BOOK VALUE
Net book value at 1 January 2023 44,631
Net book value at 31 December 2023 51,963
Net book value at 31 December 2024 49,148
Unproven oil and gas assets represent license acquisition costs and subsequent
exploration expenditure in respect of the licenses held by Kazakh group
entities. The carrying values of those assets at 31 December 2024 were 100%
represented by BNG Ltd LLP (2023: 100% by BNG Ltd. LLP).
The Directors have carried out an impairment review of these assets on a cost
pool level as detailed in note 1.9. As at 31 December 2024, the balance of
accumulated impairment was US$ 18,026,000 (2023: US$ 20,760,000) and no
additional impairment is required.
For the year ended 31 December 2024, the Directors identified the following
two impairment indicators in relation to the Group's exploration licence for
the Group's two deep structures Airshagyl and Yelemes Deep on the BNG
Contract: the production licence for Yelemes Deep has not been granted as at
the date of approval of these financial statements and the government-approved
reserve estimate for Airhagyl is lower than the Company's estimates.
The lower C1 reserve estimate for Airshagyl of 26 mmbls is based solely on the
area within 100 meters of the wells drilled on the Airshagyl structure, which
can be upgraded in the future, however the Directors deemed it would be
prudent to base the impairment review on this reserve estimate.
The licence for the Airshagyl structure was renewed as a 25 year production
licence with an initial three year period in May 2025. The application for a
production licence for the Yelemes Deep structure continues to be assessed by
the Kazakh authorities.
Airshagyl and Yelemes Deep have been treated as one CGU as they were
previously covered by one exploration licence representing one geological
structure. In assessing whether an impairment is required, the carrying value
of the CGU is compared with its recoverable amount. The recoverable amount is
the higher of the CGU's fair value less costs of disposal (FVLCD) and value in
use (VIU). As the CGU is an exploration asset, the FVLCD method has been used
to arrive at the CGU's recoverable amount. The fair value of an exploration
asset is difficult to obtain unless negotiations with potential purchasers or
similar transactions are taking place. Therefore, the fair value of the CGU is
estimated based on discounted future estimated cash flows (expressed in real
terms) expected to be generated from the continued use of the CGU using
market-based oil price and exchange assumptions, estimated quantities of
recoverable reserves, production levels, operating costs and capital
requirements, including any expansion projects, and decommissioning costs.
These cash flows are then discounted using a real post-tax discount rate.
Therefore, the determination of FVLCD for the CGU are considered to be Level 3
fair value measurements as they are derived from valuation techniques that
include inputs that are not based on observable market data.
The key assumptions used to estimate the FVLCD of the Airshagyl and Yelemes
Deep CGU are as follows:
Recoverable reserves:
26 mmbls
Real discount
rate: 15%
Annual depreciation of USD against KZT: 2%
Crude export
price: Brent
less $5/bbl;
Crude domestic
price:
$30 in 2026, pegged to Brent thereafter
Export start
year:
2028
Life of
field
25 years remaining
The price of crude on the domestic market is regulated by the Kazakh
government and the Directors have used Brent as a proxy for its future
movement.
Based on the above assumptions, the FVLCD of the Airshagyl and Yelemes Deep
CGU exceeds its carrying book value and no impairment change is therefore
required. The Directors consider the inputs and the valuation approach to be
consistent with the approach taken by market participants.
The Directors assessed whether reasonably possible changes to the above
assumptions would lead to an impairment and concluded that the apart from the
real discount rate and the year of commencement of export sales there are
none. The real discount rate would have to increase to 24%, or the export
sales would have to commence after 2034 for the FVLCD to equal its carrying
amount.
Notes to the Financial Statements (continued)
14 Property, plant and equipment
Following the commencement of commercial production in July 2019 the Group
reclassified part of BNG assets from unproven oil and gas assets to proven oil
and gas assets.
Proven Motor Other Total
Group
oil and gas assets Vehicles
US$'000 US$'000 US$'000 US$'000
Cost at 1 January 2023 59,097 2,191 8,470 69,758
Additions 7,646 - 16 7,663
Foreign exchange difference 648 39 70 757
Cost at 31 December 2023 67,391 2,230 8,556 78,177
Additions 8,519 926 9,445
Foreign exchange difference (5,971) (313) (1,249) (7,533)
Transfer to the Assets held for sale (69,939) - (69,939)
Cost at 31 December 2024 - 1,917 8,233 10,150
Depreciation at 1 January 2023 5,020 641 3,951 9,612
Charge for the year 1,722 7 865 2,594
Foreign exchange difference 89 511 442 1,042
Depreciation at 31 December 2023 6,831 1,159 5,258 13,248
Charge for the year 2,342 8 74 2,424
Foreign exchange difference (1,333) (153) (703) (2,189)
Transfer to the Assets held for sale (7,840) - - (7,840)
Depreciation at 31 December 2024 - 1,014 4,629 5,643
Net book value at:
1 January 2023 54,077 1,550 4,519 60,146
31 December 2023 60,560 1,071 3,299 64,930
31 December 2024 - 903 3,604 4,507
For the year ended 31 December 2024, the additions balance included
capitalisation of changes in estimate of the asset retirement obligation of
US$ 983,000 (2023: US$ 380,000) (note 25).
Drilling equipment with net book value of US$4,144,000 has been pledged as
security against bank borrowing (note 24).
The Directors considered whether there are indicators that the carrying value
of the Group's property, plant and equipment are impaired and concluded that
there are none (note 2.2.1).
15 Investments in subsidiaries
Company
US$'000
Cost
At 1 January 2023, 31 December 2023 and 31 December 2024 225,441
Accumulated impairment
At 1 January 2023, 31 December 2023 and 31 December 2024 209,954
Net book value
At 1 January 2023, 31 December 2023 and 31 December 2024 15,487
The Directors review the investments for the recoverability on a regular
basis, together with the associated cash flows of each company, and assess
their impairment. Based on this assessment if the Company considers that the
carrying value of the investments may not be fully recoverable as the
subsidiaries may not generate sufficient future profits and accordingly, then
these amounts may be impaired. The Company recorded no impairment in relation
to the investments in 2024 (2023: nil).
Notes to the Financial Statements (continued)
15 Investments in subsidiaries (continued)
Direct investments
Name of undertaking Country of incorporation Effective holding of ordinary shares and Registered address Nature
proportion of voting of business
rights held
at 31 December 2024 and 2023
Eragon Petroleum Limited United Kingdom 100% 5 New Street Square Holding Company
London
EC4A 3TW
Eragon Petroleum FZE Dubai 100% Management Company
CN-135789, Jebel Ali, Dubai, UAE
Prosperity Petroleum LTD Dubai 100% Management Company
CN-135789, Jebel Ali, Dubai, UAE
Roxi Petroleum Kazakhstan LLP Kazakhstan 100% Management Company
152/140 Karasay Batyr Str., Almaty, Kazakhstan
Indirect investments:
Name of undertaking Country of incorporation Effective holding of ordinary shares and Registered address Nature
proportion of voting of business
rights held
at 31 December 2024 and 2023
BNG Energy BV Netherlands 100% Utrechtseweg 79 Holding Company
1213 TM Hilversum
The Netherlands
Kazakhstan 99% 152/140 Karasay Batyr Str., Almaty, Kazakhstan Oil Production & Exploration Company
BNG Ltd LLP
Kazakhstan 100% Exploration
3A-Best Group JSC 152/140 Karasay Batyr Str., Almaty, Kazakhstan Company
Kazakhstan 100% Drilling & Service Company
CTS LLP 152/140 Karasay Batyr Str., Almaty, Kazakhstan
Kazakhstan 100% Drilling & Service Company
Sur Nedr LLP 152/140 Karasay Batyr Str., Almaty, Kazakhstan
Kazakhstan 100% Drilling & Service Company
SK-NS Aktau LLP 152/140 Karasay Batyr Str., Almaty, Kazakhstan
KC Caspian LLP Kazakhstan 100% 152/140 Karasay Batyr Str., Almaty, Kazakhstan Drilling Vessel owner
Roxi Trading LLP Kazakhstan 70% 38 Dostyk Ave., Medueskiy District, Almaty, 050000, Kazakhstan Oil Products Selling Company
DOMOSCO LLP Kazakhstan 70% (2023:n/a) 152/140 Karasay Batyr Str., Almaty, Kazakhstan Oil Products Selling Company
Absolute Oil PC* Kazakhstan 100% (2023:n/a) 37 Mangilik El Str., Astana, Kazakhstan Oil Production & Exploration Company
Beibars Munai LLP** Kazakhstan 60% 152/140 Karasay Batyr Str., Almaty, Kazakhstan Exploration Company
*Absolute Oil PC is the company established by Caspian Sunrise and BNG LLP in
2024 for the purpose of the transfer of the MJF and South Yelemes structures
before their $88 million sale which took place in July 2025.
**Beibars Munai LLP is a subsidiary as the Group is considered to have control
over the financial and operating policies of this entity. Its results have
been consolidated within the Group.
Notes to the Financial Statements (continued)
16 Inventories
Group Group
2024 2023
US$'000 US$'000
Materials and supplies 2,170 603
Crude oil and oil products 1,075 894
3,245 1,497
During the year, no inventories were written down or impaired (2023: US$ nil).
The year-on-year increase in the materials and suppliers balance is driven by
charter of the Caspian Explorer during the year ended 31 December 2024.
17 Trade and other receivables
Group Group Company Company
2024 2023 2024 2023
US$ '000 US$ '000 US$ '000 US$'000
Amounts falling due after one year:
Prepayments made 1 93 - -
Loans to related party 3,512 3,137 3,277 3,137
Intercompany receivables - - 85,213 85,946
3,513 3,230 88,490 89,083
Amounts falling due within one year:
Trade receivables 3,842 3,704 - -
Prepayments made 2,180 4,277 12 8
VAT receivable 912 2,893 73 65
Other receivables 1,275 1,275 - -
8,210 12,149 85 73
The VAT receivables relate to purchases made by operating companies in
Kazakhstan and will be recovered through VAT payable resulting from sales to
the local market.
Amounts due from related parties
The amounts due from related parties are detailed below:
Loans to related parties
On 25 September 2022, the Independent Directors approved a 7% interest-bearing
loan to a maximum value of $5 million to Altynbek Bolatzhan, a member of the
Oraziman family, in connection with the party acquisition of EPC Munai LLP
("Block 8"). At 31 December 2024, US$ 3,276,000 (2023: US$ 3,070,000) of that
loan had been drawn down, including US$ 375,000 of the interest accrued to
date (2023: US$ 169,000). The loan is to be repaid when the acquisition of
Block 8 completes.
Trade receivables
The trade receivables balance includes US$ 1,933,000 (2023: US$ 3,703,000) due
from Block 8 for the provision of drilling services by the Group on the Block
8 licence area. The balance of US$ 1,593,000 remains outstanding as of the
date of this report due to the ongoing acquisition of Block 8.
Other receivables from related parties
As at 31 December 2024, other receivables from related parties included US$
176,375 due from Kuat Oraziman (2023: US$ 67,000).
Other receivables
The other receivables balance includes US$ 1,275,000 (2023: US$ 1,275,000)
which represent the amounts reimbursable by the vendors of 3A Best under the
indemnities provided on acquisition of the exploration asset. During the year
ended 31 December 2024, the Directors decided not to seek the renewal the 3A
Best licence and as a result the gross amount of receivables of US$ 3,826,000
was formally written off by US$2,551,000 down to US$ 1,275,000 which the
Directors consider recoverable. The write-off amount of US$2,551,000 was
previously part of the ECL provision and therefore there is no charge
recognised in the profit or loss.
Prepayments made
The balance consists primarily of advance payments made to subcontractors.
During 2022 BNG Ltd. LLP impaired the advance payment made to Sinopec in 2019.
Sinopec, the Chinese drilling contractor, was engaged to drill Deep Well A8.
However, BNG did not accept the drilling works and did not pay any amount
beyond the prepaid amount. At the date of this report, the parties have yet to
come to a final agreement. Accordingly, the prepayment has fully impaired.
Intercompany loans
Intercompany receivables are interest free. An expected credit loss provision
of US$ 20,700,000 (2023: US$ 20,700,000) has been recognised with the respect
of the amounts due from subsidiaries based on the recoverable amount
calculated with reference to factors such as the status of underlying
licenses, reserves, financial models and future risks and uncertainties.
Notes to the Financial Statements (continued)
17 Trade and other receivables (continued)
Expected credit losses
Financial assets shown gross of ECL are detailed below:
Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Trade receivables 4,471 3,703 - -
Intercompany receivables - - 105,913 106,646
Loans to related parties 3,512 3,137 3,277 3,137
Other receivables 3,826 3,826 - -
11,809 10,666 109,190 109,783
The movements in ECL provision are detailed below:
Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
At 1 January 3,180 2,551 20,700 20,700
Change in estimate recognised in profit or loss - 629 - -
Utilisation of provision (2,551) - - -
As at 31 December 629 3,180 20,700 20,700
As at 31 December 2024, there was no ECL loss recognised in relation to trade
debtors that are over a year old (2023: US$ 629,000 ECL loss recognised). The
Directors note that non-payment is rare and would typically only provide for
trade debtors over a year old. During the year ended 31 December 2024, the ECL
provision in respect of the 3A Best receivable was utilised (2023: US$nil).
18 Cash and cash equivalents
Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Cash at bank and in hand 2,644 447 28 48
Restricted use cash 1 706 - -
As at 31 December 2,645 1,153 28 48
Cash at bank and in hand are held in US Dollars, Sterling and Kazakh Tenge
currency accounts to enable the Group to trade and settle its debts in the
currency in which they occur and in order to mitigate the Group's exposure to
short-term foreign exchange fluctuations. All cash is held in floating rate
accounts.
Restricted use cash represents cash set aside by the Group for the purpose of
creating an abandonment fund to cover the future cost of the decommissioning
of oil and gas wells and related facilities and in accordance with local legal
rulings. The cash is held in a segregated bank account and under the Subsoil
Use Contracts the Group must place 1% of the capital expenditure incurred in
the year into an escrow deposit account, unless agreed otherwise with the
Ministry of Energy. At the end of the contract this cash will be used by the
Group to return the field to the condition that it was in before exploration
started.
19 Called up share capital
Group and Company
Shares Share capital Share premium
No US$'000 US$'000
Balance at 31 December 2,250,501,560 33,060 -
2023
Issuance of share on settlement of liability 4,476,923 56 126
Balance at 31 December 2,254,978,483 33,116 126
2024
The Company has one class of ordinary shares of 1 penny each which entitle the
holders to receive dividends as declared from time to time to vote at meetings
of the Company. All ordinary shares rank equally with regard to the Company's
residual net assets. There are no restrictions on the transfer of shares, and
all ordinary shares are fully paid.
On 24 April 2024 the Company issued 4,476,923 new ordinary shares at 3.25
pence per share in settlement of certain outstanding fees owed to an adviser.
20 Dividends
Year ended 31 December 2023 and 31 December 2024
No dividend in respect of the year is proposed in 2024 (2023: US$2,377,000).
As at 31 December 2024, the dividends due to the Oraziman family totalling US$
698,000 have not been paid (2023: US$698,000).
Notes to the Financial Statements (continued)
21 Trade and other payables
Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Prepayment received for sale Oil and Gas production assets 12,827 - - -
Trade payables 2,261 4,689 289 150
Taxation and social security 1,090 3,224 20 20
Accruals 88 252 63 83
Other payables 1,051 2,101 50 83
Intercompany payables - - 4,372 3,683
Dividends payable to related parties 698 698 698 698
Deferred revenue 2,805 5,131 - -
20,820 16,095 5,492 4,717
At 31 December 2024 and 31 December 2023, the Group had received significant
prepayments from customers in respect of oil sales and oil trading. The amount
of advances received from oil traders with respect to oil sales as at 31
December 2024 were $1,492,000 (2023: $2,836,000). As at 31 December 2024, a
refundable downpayment of US$ 12,827,000 was received from the buyers of the
BNG Disposal Group (note 32). Advance payments received by the oil trading
business was US$103,000 (2023: US$ 2,295,000) and is included within deferred
revenue.
22 Withholding tax payable
Group Group
2024 2023
US$'000 US$'000
Withholding tax payable in Kazakhstan 12,303 14,892
12,303 14,892
Taxation payable relates to withholding tax accrued on the interest expense at
the BNG subsidiary level.
23 BNG historic cost liability
Group Group
2024 2023
US$'000 US$'000
Current - 3,178
Non-current - 13,746
- 16,924
The subsoil use contract held by BNG Ltd for the MJF field stipulates that it
must make a payment to the Kazakhstan Government upon award of a production
contract after commercial feasibility. The Kazakhstan Government has assessed
the amount payable as a total of US$32.5m. The sum is payable on a quarterly
basis from 1 July 2019 in equal instalments with the final payment due to be
paid on 1 April 2029. The future payments have been discounted to their net
present value.
As at 31 December 2024, the outstanding amount payable was US$13.8m which is
included within the Liabilities related to the assets held for sale (note 32)
and were transferred to the acquiror of the MJF and South Yelemes structure on
completion the sale.
Notes to the Financial Statements (continued)
24 Borrowings
Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Bank credit facility 3,242 3,211 - -
Loans from related parties 2,266 3,483 168 104
5,508 6,694 168 104
Analysed between current and non-current:
Current 3,678 3,624 168 104
Non-current 1,830 3,070 - -
5,508 6,694 168 104
Bank credit facility
In August 2023, the Group took out a bank credit facility, valid until August
2026, which allows the Group to borrow US$ at an annual interest rate of 8.3%
per annum. Any amounts drawn are repayable within 6 months unless redrawn. The
loan is secured against the Group's drilling equipment. As at 31 December
2024, US$3,241,000 remains outstanding (2023: US$3,211,000).
Loans from related parties
The Group and Company had interest-free short-term loans with the following
related parties:
Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Aibek Oraziman 297 285 110 -
Vertom International N.V. (a company controlled by Kuat Oraziman) 140 129 58 104
437 414 168 104
During the year-ended 31 December 2023, one of the Groups subsidiaries entered
into interest-free long-term borrowing agreements with Akku Investments LLP, a
company controlled by the Oraziman family and shareholders of the Company
totalling US$4,845,000. The loans are due for repayment in 2026. The fair
value of the loans, denominated in KZT, was estimated using market discount
rate of 19.5% to be US$2,743,000. The difference between the fair value of the
loans and their nominal amounts of US$ 2,102,000 was recognised as a capital
contribution in equity. The carrying value of loan is US$1,830,000 (2023:
US$3,070,000).
Analysis of movements
The table below details changes in the Group's liabilities arising from
financing activities, which consist entirely of borrowings.
Financing cash flows Non-cash changes
1 January 2024 Drawdowns Repayments Interest charge Foreign exchange Other 31 December 2024
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Bank loan 3,211 14,109 (13,959) 356 (475) - 3,242
Loans from related parties 3,483 55 (696) 9 (318) (267) 2,266
Total for 2024 6,694 14,164 (14,655) 365 (793) (267) 5,508
Financing cash flows Non-cash changes
1 January 2023 Drawdowns Repayments Interest charge Foreign exchange Other 31 December 2023
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Bank loan - 5,820 (2,689) 69 12 - 3,212
Loans from related parties 352 5,343 (465) 330 24 (2,102) 3,482
Total for 2023 352 11,163 (3,154) 399 36 (2,102) 6,694
The table below details changes in the Company's liabilities arising from
financing activities, which consist entirely of borrowings.
Financing cash flows Non-cash changes
1 January 2024 Drawdowns Repayments Interest charge Foreign exchange 31 December 2024
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Loans from related parties 104 55 - 9 - 168
104 55 - 9 - 168
Financing cash flows Non-cash changes
1 January 2023 Drawdowns Repayments Interest charge Foreign exchange 31 December 2023
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Loans from related parties - 100 - 4 - 104
- 100 - 4 - 104
Notes to the Financial Statements (continued)
25 Provisions
Group Group
2024 2023
US$'000 US$'000
Abandonment provision 831 1,286
Social development programme 3,623 4,355
4,454 5,641
Analysed between current and non-current:
Current 3,749 4,481
Non-current 705 1,160
4,454 5,641
The movement in provisions is detailed below:
Social development programme Abandonment provision Total
US$'000 US$'000 US$'000
At 1 January 2024 4,355 1,286 5,641
Change in estimate 295 983 1,278
Provision utilised (453) 119 (334)
Foreign exchange differences (574) (213) (787)
Transfer to the liabilities related to Assets held for sale (note 32) - (1,344) (1,344)
At 31 December 2024 3,623 831 4,454
Analysed between current and non-current:
Current 3,623 126 3,749
Non-current - 705 705
3,623 831 4,454
Amounts in relation to Subsoil Use Contracts are included in the table above
and relate to the licence areas disclosed below:
BNG Ltd LLP
BNG Ltd LLP a subsidiary, signed a contract #2392 dated 7 June 2007 with the
Ministry of Energy and Mineral Resources of the Republic of Kazakhstan for
exploration at Airshagyl deposit, located in Mangistau region. According to
the latest Amendments BNG is required to pay around US$ 231,650 annually in
respect of social programs in the Mangistau region for the period from 7 June
2018 to 7 June 2024. Also, it is required to pay 1% of investments under the
contract on production during the period based on the results of the previous
year. BNG is also required to invest in the training of Kazakh personnel of an
amount of not less than 1% of the annual amount of investments. Another
requirement of the Company is to accumulate funds for the site restoration by
transferring annually 1% of annual exploration costs to a special deposit in
accordance with the Contract on exploration. As at 31 December 2024 BNG was in
compliance with all the requirements listed above.
On 11 July 2019, BNG Ltd LLP signed a production contract with the Ministry of
Energy of the Republic of Kazakhstan at the North-West Yelemes structure
(MJF). The Contract is valid for 25 years till 2043. On 23 December 2021, BNG
signed the production contract at South Yelemes structure for an initial
period of 6 months. The terms were extended in accordance with the additional
agreement No. 1 dated 24 June 2023, and valid until June 23, 2044. No
additional social obligations were added for the 2019 and 2022 contract
extensions and upgrades.
26 Deferred tax
Deferred tax liabilities comprise:
Group Group
2024 2023
US$'000 US$'000
Deferred tax on exploration and evaluation assets acquired 6,406 7,378
6,406 7,378
The Group recognises deferred taxation on fair value uplifts to its oil and
gas projects arising on acquisition. These liabilities reverse as the fair
value uplifts are depleted or impaired.
The movement on deferred tax liabilities was as follows:
Group Group
2024 2023
US$'000 US$'000
At beginning of the year 7,378 6,335
Foreign exchange (972) 1,043
6,406 7,378
As at 31 December 2024 the Group has accumulated deductible tax expenditure
related to BNG of approximately US$48 million (31 December 2023: US$48
million) available to carry forward and offset against future profits. This
represents an unrecognised deferred tax asset of approximately US$10 million
(31 December 2023: US$10 million). Given the uncertainties regarding such
deductions and the developing nature of the relevant tax system no deferred
tax asset is recorded.
Notes to the Financial Statements (continued)
27 Share option scheme and LTIP scheme
During the year the Company had in issue equity-settled share-based
instruments issued to its Directors and certain employees.
During the year ended 31 December 2024, the Company granted 4,500,000 new
options, including 2,500,000 4p options to Seokwoo Shin, a director of the
Company and expiring in 2032, with the additional 2,000,000 options being
issued non board staff and expiring in 2034. In addition, 2,500,000 5.5p
options previously awarded to Seokwoo Shin have been cancelled, and the
exercise date for 2,400,000 4p options held by Clive Carver has been extended
until 30 April 2025.
The new options granted vested immediately and their fair value, calculated
using the Black Scholes option pricing model, was found to be immaterial.
Significant amount of the earlier issued options expired during the year.
No share options were issued during the year ended 31 December 2023.
The movements in the number of share options and their weighted average
exercise price is detailed below:
2024 2024 2023 2023
Number of options Average exercise price (pence) Number of options Average exercise price (pence)
1 January 14,850,000 13.9 14,850,000 13.9
Granted in the year 4,500,000 4.0 - -
Cancelled during the year (2,500,000) (5.5) - -
Expired during the year (6,850,000) (20.0) - -
31 December 10,000,000 5.9 14,850,000 13.9
Exercisable at 31 December 10,000,000 5.9 14,850,000 13.9
The range of exercise prices of share options outstanding at 31 December 2024
and 31 December 2023 is 4p - 20p (2023: 4p - 20p). The weighted average
remaining contractual life of share options outstanding at the end of 2023 is
5.3 years (2023: 3.1 years).
Long Term Incentive Plan (LTIP) scheme:
On 5 June 2019 the Company made awards under a long-term incentive plan. Clive
Carver, Chairman, and Kuat Oraziman, Chief Executive Officer, are entitled to
receive cash payments to be triggered by the Company's attainment of both
pre-set market capitalisation and share price targets as follows:
Market cap threshold Share price target Pay-out rate (each) Pay-out amount (each)
$ billion Pence per share % $' million
0.8 17.23 0.6 3.0
1.3 20.67 0.6 3.0
1.8 24.81 0.6 3.0
2.3 29.77 0.6 3.0
2.8 35.72 0.6 3.0
The scheme continues beyond the numbers in the table such that with the
threshold for market capitalisation increasing at the rate of $0.5 billion and
the corresponding share price threshold increasing from the earlier threshold
by a constant factor of 1.2. Each threshold must be sustained for at least
30 consecutive days for the awards to be triggered. Payments shall be made
only when the Company has free cash either in the form of distributable
reserves or as a result of a non-interest bearing subordinated shareholder
loan or an equity placing at a price not below the relevant share price
threshold.
There may be only one pay-out for each market capitalisation threshold crossed
no matter how many times it is crossed.
The Directors have determined that at inception and as at 31 December 2023 and
2024, the fair value of the cash settled share based payment award is
immaterial based on analysis of the thresholds, historical volatility rates
and the applicable share price and market capitalisation in the period.
For the year ended 31 December 2024, no charge has been recognised in profit
or loss in respect of the share options and LTIP (2023: US$ nil).
Notes to the Financial Statements (continued)
28 Financial instrument risk exposure and management
In common with all other businesses, the Group and Company are exposed to
risks that arise from its use of financial instruments. This note describes
the Group and Company's objectives, policies and processes for managing those
risks and the methods used to measure them. Further quantitative information
in respect of these risks is presented throughout these financial statements.
The significant accounting policies regarding financial instruments are
disclosed in note 1.
There have been no substantive changes in the Group or Company's exposure to
financial instrument risks, its objectives, policies and processes for
managing those risks or the methods used to measure them from previous years
unless otherwise stated in this note.
(a) Categories of financial instruments
The principal financial instruments used by the Group and Company, from which
financial instrument risk arises, are as follows:
Group Group Company Company
Financial assets 2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Intercompany receivables - - 85,213 85,946
Loan to related parties 3,512 3,137 3,277 3,137
Trade receivables 3,842 3,704 - -
Other receivables 1,275 1,275 - -
Restricted use cash 1 706 - -
Cash and cash equivalents 2,644 447 28 48
11,274 9,269 88,518 89,131
Financial liabilities Group Group Company Company
2024 2023 2024 2023
US$'000 US$'000 US$'000 US$'000
Trade and other payables 2,260 4,689 289 150
Accruals 88 252 63 83
Intercompany payables - - 4,372 3,683
Borrowings 5,508 6,694 168 104
BNG historic costs payable 13,914 16,924 - -
21,770 28,559 4,892 4,020
All financial assets and liabilities of the Group and Company are carried at
amortised cost.
(b) Risk management
The principal financial instruments used by the Group and Company, from which
financial instrument risk arises, are as follows:
· other receivables;
· cash at bank;
· trade and other payables; and
· borrowings.
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group and
Company's risk management objectives and policies. Whilst retaining ultimate
responsibility for these objectives and policies, it has delegated the
authority for designing and operating processes that ensure the effective
implementation of the objectives and policies to the Group and Company's
finance function. The Board receives regular reports from the finance function
through which it reviews the effectiveness of the processes put in place and
the appropriateness of the objectives and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk
as far as possible without unduly affecting the Group and Company's
competitiveness and flexibility. Further details regarding these policies are
set out below:
Credit risk
The maximum exposure to credit risk is represented by the carrying amount of
each financial asset in the balance sheet, which at the year-end amounted to
US$ 9.3 million for the Group (2023: US$ 5.6 million) and US$ 88.5 million for
the Company (2023: US$ 89,131 million). Credit risk with respect to Group
receivables and advances is mitigated by active and continuous monitoring of
the credit quality of its counterparties through internal reviews and
assessment.
The Company is exposed to credit risk on its receivables from its
subsidiaries. The subsidiaries are exploration and development companies with
no current commercial exploitation sales and therefore, whilst the receivables
are due on demand, they are not expected to be paid until there is a
successful outcome on a development project resulting in commercial
exploitation sales being generated by a subsidiary. In application of IFRS 9
the Company has calculated the expected credit loss from these receivables
(Note 17).
The carrying amount of financial assets recorded in the Group and Company
financial statements, which is net of any impairment losses, represents the
Group's and Company's maximum exposure to credit risk.
Credit risk with cash and cash equivalents is reduced by placing funds with
banks with high credit ratings.
Notes to the Financial Statements (continued)
28 Financial instrument risk exposure and management (continued)
Capital
The Company and Group define capital as share capital, other reserves,
retained profit and borrowings. In managing its capital, the Group's primary
objective is to provide a return for its equity shareholders through capital
growth. The Group will seek to maintain a gearing ratio that balances risks
and returns at an acceptable level and also to maintain a sufficient funding
base to enable the Group to meet its working capital and strategic investment
needs. In making decisions to adjust its capital structure to achieve these
aims, either through new share issues or the issue of debt, the Group
considers not only its short-term position but also its long-term operational
and strategic objectives.
The Group's gearing ratio as at 31 December 2024 was 8% (2023: 9%).
There have been no other significant changes to the Group's Management
objectives, policies and processes in the year.
Liquidity risk
Liquidity risk arises from the Group and Company's management of working
capital and the amount of funding committed to its exploration programme. It
is the risk that the Group or Company will encounter difficulty in meeting its
financial obligations as they fall due.
The Group and Company's policy is to ensure that it will always have
sufficient cash to allow it to meet its liabilities when they become due. To
achieve this aim, it seeks to raise funding through equity finance, debt
finance and farm-outs sufficient to meet the next phase of exploration and
where relevant development expenditure.
The Board receives cash flow projections on a periodic basis as well as
information regarding cash balances. The Board will not commit to material
expenditure in respect of its ongoing exploration programmes prior to being
satisfied that sufficient funding is available to the Group to finance the
planned programmes.
For maturity dates of financial liabilities as at 31 December 2024 and 2023
see the table below. The amounts are contractual payments and may not tie to
the carrying value:
On Demand Less than 3 months 3-12 months 1- 5 years Total
Group 2024 US$'000 (1,307) 3,163 5,815 19,479 27,150
Group 2023 US$'000 6,694 5,754 2,439 17,886 32,773
Company 2024 US$'000 4,372 352 - - 4,724
Company 2023 US$'000 3,683 232 - - 3,915
Interest rate risk
The majority of the Group's borrowings are at fixed rate. As a result the
Group is not exposed to significant interest rate risk.
Currency risk
Currency risk is the risk that that the fair value or future cash flows of a
financial instrument will fluctuate because of changes in foreign exchange
rates. Currency risk arises on financial instruments that are denominated in a
different currency to the entity's functional currency in which they are
measured.
The Group and Company's policy is, where possible, to allow group entities to
settle liabilities denominated in their functional currency (primarily US$ and
Kazakh Tenge) in that currency. Where the Group or Company entities have
liabilities denominated in a currency other than their functional currency
(and have insufficient reserves of that currency to settle them) cash already
denominated in that currency will, where possible, be transferred from
elsewhere within the Group.
The Group and Company's currency risk exposure arises primarily from the
following currencies:
Group Company
2024 2024
US$'000 US$'000
Assets
USD - 66
- 66
Liabilities
USD 3,241 3,211
GBP 698 848
3,939 4,059
A 30% strengthening of USD would decrease the Group profit for the year by US$
972,000 (2023: US$ 944,000) and increase a loss for the year of US$ 112
million recognised in other comprehensive income due to retranslation of
intercompany loans, with a total decrease in equity of US$ 114 million (2023:
US$ 114 million) A 30% weakening of USD would have an equal but opposite
effect.
The 30% sensitivity is the sensitivity rate used when reporting foreign
currency risk internally to key management personnel and represents Directors'
assessment of the reasonably possible change in foreign exchange rates. The
sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the year-end. The sensitivity
analysis includes long term intercompany loans to foreign operations within
the Group where the denomination of the loan is in a currency other than the
currency of the lender or the borrower where changes in the foreign exchange
rate are recognised in other comprehensive income.
Notes to the Financial Statements (continued)
29 Related party transactions
The Company has no ultimate controlling party. Related party transactions are
detailed below and have been carried out at arms-length.
29.1 Key management remuneration
Group Group
2024 2023
US$'000 US$'000
Short-term employee benefits 373 436
373 436
The Directors are the key management personnel of the Company and the Group.
Details of Directors' emoluments and interests in shares are shown in the
Remuneration Committee Report. The highest paid director had emoluments
totalling US$153,000 (2023: US$153,000).
Kuat Oraziman and Aibek Oraziman are directors of the Company and members of
the Oraziman family, which collectively is deemed a related party to the
Group. Apart from remuneration, there were no other transactions with other
members of the key management personnel not separately disclosed in these
financial statements.
29.2 Block 8 Acquisition agreement
In September 2022, the Company entered into an option agreement with Mr.
Altynbek Bolatzhan, an Oraziman family member, for the Company to acquire EPC
Munai LLP ("Block 8"). The maximum consideration for the asset is $60 million,
payable in cash from future production from Block 8, at the rate of $5 per
barrel of oil produced. The Company exercised its option to acquire Block 8
during the year ended 31 December 2023. The completion of the acquisition is
subject to, inter alia, Block 8 renewing its licences and gaining regulatory
approvals, which as at the date of approving these financial statements have
not been received and therefore the acquisition has not been completed.
29.3 Loan agreements and other payables and receivables.
The Company and Group has amounts payable to and receivable from members of
the Oraziman family and legal entities controlled by them. The details of loan
and other receivables are included in note 17. Dividends due to related
parties are disclosed in note 20.
29.4 Sales of services
CTS LLP, the Group's onshore drilling subsidiary, undertakes repair and
drilling work at Block 8 (EPC LLP), which as detailed above is owned by a
related party and the Group is in the process of acquiring. Summary of
contracts are detailed below.
Well P2
CTS LLP signed the contract for sidetrack drilling of Well P2 in November
2024. As at 31 December 2024, the project overrun and Group was only able to
recover costs incurred, with the revenue and cost of sales of US$ 1,311,000
recognised in the year.
Well P3
The drilling contract for Well Р3 was entered into in 2022, with a contract
value of US$ 6,484,000. At 31 December 2022 only the preparatory works had
been completed, which Directors estimate to be approximately 7% of the total
work. During 2023 work at the well has been put on hold to allow other
projects to proceed and was eventually terminated when EPC's licence over the
contract area expired. Over the contract life, CTS LLP billed US$ 500,000
against costs incurred of US $558,000.
Well AKD
The drilling contract for Well AKD was entered into 2022 with the original
contract value of US$ 4.3 million. At 31 December 2022 the well had reached a
depth of 2,187 meters, representing approximately 20% of the total work.
Similarly to the Well P3 contact, during 2023 the contact was put on hold and
eventually terminated when EPC's licence over the contract area expired. Over
the contract life, CTS LLP billed US$ 2,648,000 against costs incurred of US
$2,966,000.
Toresai Drilling
In October 2023, CTS LLP entered into a contract to drill a well at Toresai,
however it was also terminated when EPC's licence over the contract area
expired. CTS LLP billed US$ 2,214,000 against costs incurred of US $2,480,000.
The impact on the Group financial statements, is summarised below.
Group Group
2024 2023
US$'000 US$'000
Revenue 1,311 4,126
Cost of sales (1,311) (4,735)
Net loss - (609)
Amounts due from related parties - 3,703
Contract assets, due from related parties 1,311 -
Notes to the Financial Statements (continued)
30 Non-controlling interest
Group Group
2024 2023
US$'000 US$'000
Balance at the beginning of the year (5,152) (5,667)
Share of profit for the year 177 515
Dividend (1,496) -
(6,471) (5,152)
Non-controlling interest represents minority share in BNG Ltd LLP,Beibars
Munai LLP, Roxi Trading LLP, and Domosco LLP.
31 Events after the reporting period
West Shalva
On 15 April 2025 Caspian Sunrise PLC announced the acquisition of 100% of the
shares of CS Energy LLP, the Kazakh entity, which holds the licence for the
West Shalva Contract Area.
The acquisition terms, which were approved by independent shareholders at a
General Meeting on 25 April 2024, comprised the issue to Altynbek Bolatzhan,
the vendor of CS Energy LLP, of up to 198,412,698 shares and a potential
additional cash sum of up to $5 million, partially dependent on the success
of drilling at the West Shalva Contract Area, as follows:
On Completion 99,206,349 new ordinary shares to be issued at 4p per share (the
"Initial Consideration Shares") which were issued on 15 April 2025.
On first oil from the West Shalva Contract Area a further 99,206,349 new
ordinary shares would be issued at 4p per share (the "Additional Consideration
Shares")
Additionally, the first $5 million revenue from oil sales from the West
Shalva Contract Area under the Group's ownership is required to be paid to the
vendor of CS Energy LLP.
The acquisition is treated as an asset acquisition and an unproved oil and gas
asset of US$5.2 million was recognised on 15 April 2025
MJF / South Yelemes
On 7 July 2025 the Group completed the sale of the MJF and South Yelemes
shallow structures at the BNG Contract Area, from which 100% of oil in recent
years was produced by the Group, to Absolute Resources LLP. The Group received
a total of $69 million in cash on completion and the remaining $5.1
million is due to be received over a 12-month period commencing 6 months
after formal completion of the sale. A gain on disposal of $23.2 million was
recognised after transaction costs of $4 million due to VAT charges.
Block 8
A submission to complete the acquisition of EPC Munai LLP, the Kazakh
registered entity which holds the licence for the Block 8 Contract Area has
been submitted to the Kazakh regulatory authorities.
In September 2023 the Directors exercised an option to acquire EPC Munai first
granted in 2022. The acquisition terms involve the payment of £100 for 100%
of the shares in EPC Munai with further royalty payments of up to $60 million
at the rate of $5 per barrel on oil produced from the Block 8 Contract Area
once owned by the Group.
A condition of the acquisition was the renewal of licences at three separate
structures on the Block 8 Contract Area. The licence for the Sholkara
structure was renewed in Q4 2024 and the Group is no longer interested in the
Toresai structure. The Group continues to seek the renewal of the licence for
the Akkaduk structure but in the meantime has decided to seek to complete the
EPC Munai acquisition initially solely based on the Sholkara structure.
UAE Claim
A current and three former shareholders are seeking to bring claims against
the Company and certain of its Directors for US$25 million before the Dubai
Courts, principally on the basis that as the shareholders concerned did not
approve the disposal of the MJF and South Yelemes the transaction is not
valid.
On the basis of advice from leading commercial lawyers in the UK and Dubai and
also from one of the world's leading professional services consultancies
the Directors and Company believe that the claims have no merit and are
therefore being vigorously defended. Accordingly, no provision has been made
in these financial statements.
Notes to the Financial Statements (continued)
32 Assets and liabilities held for sale
As detailed in note 2.2.3, during the year ended 31 December 2024, the Group
has agreed to sell the BNG Disposal Group to Absolute Resources LLP. The
transfer of the MJF and South Yeleemes structures completed on 7 July 2025.
The carrying value of the BNG Disposal Group as at 31 December 2024 is
follows:
Group
2024
US$'000
Assets
Poven oil and gas assets 62,099
Assets classified as held for sale 62,099
Liabilities
Historical costs (13,837)
Asset retirement obligation (1,344)
Liabilities directly associated with assets classified as held for sale (15,181)
Net assets held for sale 46,918
Under the terms of the SPA, the all-cash consideration is as follows:
US$'000
Cash on or before completion 69,000
Deferred consideration 5,100
Total consideration 74,100
The costs to sell are insignificant and therefore the expected consideration
proceeds exceed the carrying value of the BNG Disposal Group and no impairment
charge is recognised. The BNG Disposal Group constitutes a discontinued
operation, the results of which are disclosed in note 11.
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