REG - Deltic Energy PLC - Final Results
30/06/2025 17:01
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RNS Number : 0477P Deltic Energy PLC 30 June 2025
Deltic Energy Plc / Index: AIM / Epic: DELT / Sector: Natural Resources
30 June 2025
Deltic Energy Plc ("Deltic" or "the Company")
Final Results
Deltic Energy Plc ("Deltic" or the "Company"), the AIM-quoted natural
resources investing company with a high impact exploration and appraisal
portfolio focused on the Southern North Sea ("SNS") announce its audited
results for the year ended 31 December 2024 ("FY 2024"), which are
summarised below.
The Company's Annual Report for the year ended 31 December 2024 will be
available to download shortly from the Company's website at
www.delticenergy.com (http://www.delticenergy.com) and will be posted to
shareholders today.
For further information please contact the following:
Deltic Energy Plc Tel: +44 (0) 20 7887 2630
Andrew Nunn / Sarah McLeod
Allenby Capital Limited (Nominated Tel: +44 (0) 20 3328 5656
Adviser)
David Hart / Alex Brearley (Corporate Finance)
Canaccord Genuity Limited (Broker) Tel: +44 (0) 20 7523 8000
Adam James / Charlie Hammond
Vigo Consulting (IR Tel: +44 (0) 20 7390 0230
Adviser)
Patrick d'Ancona / Finlay Thomson / Kendall Hill
Chairman's Statement
Looking back over another year of contrasting events, it seems again that we
made significant progress in 2024 in executing our strategy notwithstanding
serious external factors creating headwinds.
While details will be covered in other sections, by far the highlight of the
year was the safe, successful drilling of the Selene well in the Southern
North Sea during late 2024.
While detailed work is ongoing to determine the best commercial strategy, and
prepare for production, all Joint Venture parties agree that this is a
commercially-viable volume of gas, similar to many existing Southern North Sea
fields that came on-stream since the 1970s. Selene also has a straightforward
route to market, via the Norwich Bacton plant which has capacity to receive
and process gas just like this and has been doing so since it was opened by
the late Prince Philip in 1969. The operator of the Selene field is the
operator of the gas processing plant, and this symmetry has been part of the
Deltic plan since it was awarded the licence and performed the initial farm
down of its interest to the current operator.
In contrast to continued exploration success, political hostility towards our
sector continues. Both the previous UK Government and the new government
applied political expediency and populism as well as ideology to create or
amplify a negative attitude towards UK oil and gas from NGO and investor
communities.
But this is strange when you consider that, fundamentally, all parties
including the committee on climate change and leaders in government accept the
need for continued supply of gas, and, while we accept that demand will fall
in the coming years, it is clear that domestic gas demand forecasts greatly
exceed forecasts of production. Meeting that demand by increasing imported
supplies does not make sense for the desired economic growth we hear so much
about, nor from an environmental perspective given imports' much greater
emissions. There are clear signs of the government understanding this and the
direction of travel appears more positive or at least less negative. The
current government has offered repeated assurances of support for existing
assets and licences, but the industry must work hard to ensure the pace is
consistent with its development goals.
Other assets will be covered in the rest of this report but hopefully this
provides a high-level glimpse of the highs and lows of the last 12 months. I
would like to thank all Deltic staff for their ongoing efforts last year and
also our shareholders for their continued patience and support.
Our exploration success rate has been two out of two wells. This is an
outstanding record and testimony to one of our fundamental business principles
of thorough technical work by experts in this area. The eventual outcome for
our first drilling success at Pensacola, in large part a function of timing in
relation to the requirements for investment, alongside external, predominantly
politically driven factors, continues to be a painful experience as it would
be for any explorer that first identified an opportunity that had been
overlooked.
Over the last 12-18 months, the Company has faced a common dilemma that an
exploration company can have, which is finding the funds to turn exploration
success into value in what continues to be a very difficult market for
attracting equity funding, particularly for UK-focused companies given recent
political uncertainties, and a sluggish farm-out market.
It is in this context that, on 30 June 2025, the boards of Rockrose Energy
Limited ("Viaro Bidco") a wholly-owned subsidiary of Viaro Energy Limited
("Viaro Energy") and Deltic announced that they had reached agreement on the
terms of a recommended cash offer for the entire issued share capital of
Deltic (the "Acquisition"). With the Board's considerations for the
recommendation being set out in the announcement in respect of the Acquisition
made on 30 June 2025, we believe the cash offer is in the best interests of
shareholders and are asking that shareholders support the Board's
recommendation.
Mark Lappin
Chairman
30 June 2025
Chief Executive's Statement
2024 was another tumultuous year for the UK oil and gas industry which saw the
election of a new government that started out with a less than favourable
outlook on the UK's homegrown oil and gas exploration and production
("E&P") industry. This led to continued uncertainty and further erosion of
trust between government, regulator, operating companies and many investors
who no longer see the UK Government as a reliable partner when considering the
long-term investments required to sustain activity within the sector.
This ongoing act of self-harm by the UK Government has had real world impacts
and, for Deltic, this manifested itself in the loss of the Pensacola project.
Although the operating environment in the UK remains far from optimal, we
recognise that there was a perfect storm of events in 2024 that prevented
Deltic from raising funds from UK equity markets and also knocked the industry
confidence required for a farm-in or other funding solution for the Pensacola
project.
But perhaps we are now starting to see some more positive signs after a very
difficult period. A government focused on growth and live consultations, in
relation to a new fiscal regime and the future of North Sea licensing, gives
me further confidence that the UK Government is starting to recognise the
potential of the UK E&P industry to help meet its own energy security and
net zero objectives. We attribute this to significant progress being made in
the background as the industry continues to educate government on the
importance of the UK's domestic E&P industry in terms of local jobs, tax
revenue, energy security and Scope 3 emissions. The Prime Minister has
recently greenlit the large Rosebank and Jackdaw projects in the North Sea
following a re-submission of their environmental impact assessments with the
appropriate Scope 3 assessment. The government restating its commitment to
progressing extant licences to development is, of course, critical to the
Selene gas project and Deltic's other licences.
Against this background, Deltic continued to make progress. The drilling of
the Selene discovery well in the second half of 2024 saw the Company extend
its run of exploration success. Following discovery, Deltic's JV partners on
Selene, Shell and Dana Petroleum, supported the move into the Second Term of
the Licence and the Joint Venture parties immediately commenced the work
required to prepare a Field Development Plan ("FDP") for the Selene project.
Notwithstanding this, the UK equity markets and industry funding/farm-in
markets remain very challenging.
Despite the difficult backdrop, the achievements of the Deltic team and the
quality of assets including the Selene discovery have been recognised by
industry and have precipitated the proposed Acquisition of the entire issued
and to be issued ordinary share capital of Deltic by Viaro Bidco, as announced
on 30 June 2025. The Board intends to unanimously recommend that shareholders
vote in favour of the Acquisition, with the Board's considerations for the
recommendation being set out in the announcement in respect of the Acquisition
made on 30 June 2025. We are asking that shareholders support the Board's
recommendation. The formal documentation in relation to the Acquisition will
be sent to shareholders in due course.
Andrew Nunn
Chief Executive Officer
30 June 2025
2024 Operational Review
P2437 - Selene Gas Project
Following the successful farm-down of a further 25% working interest in the
Selene project to Dana Petroleum in April 2024, the Company retained a 25%
working interest in this significant gas discovery in the Southern North Sea.
Discovery
Well 48/8b-3z was drilled with the Valaris 123 jack-up drilling rig with
operations commencing in late July 2024. The well reached its target depth of
3,540m TVDSS on 17 October 2024 and proved a 160-metre thick section of
Leman Sandstone. The top of the Leman Sandstone was encountered approximately
70 metres deep to prognosis with elevated mud gas readings, confirming the
presence of gas, observed throughout the reservoir interval and into the
underlying Carboniferous basement.
Subsequent coring, wireline logging and fluid sampling operations confirmed
the presence of a live gas column above a gas-water contact at circa 3,370
metres which is in the middle of the B-Sand, the key producing interval within
the overall Leman Sandstone section. Updated post-well structural maps of the
Selene prospect point towards a maximum gas column of circa 100 metres.
Laboratory analysis of the core is substantially complete and has been
integrated with data collected from the wellsite allowing Deltic to update its
volumetric model and economic assessment of the Selene discovery. The results
of this work were announced on 15 April 2025.
Analysis of 176 core samples taken from the key B-sand interval has confirmed
that the B-Sand reservoir properties at the well location were towards the
very high end of the ranges predicted pre-drill. The B-Sand encountered in the
well was 53 metres thick (versus a pre-drill P50 estimate of 47 metres) with
an average porosity of 15.1% (up from a P50 porosity estimate of 11% for the
B-sand) and a gas saturation in line with pre-drill expectations.
This core analysis also confirmed the reservoir characteristics indicated by
the downhole test, which recovered gas samples and indicated permeabilities in
the range of 1 to 5mD above the gas-water contact. Average permeability
measured from core samples indicates an average permeability of 2.6mD for the
B-sand with numerous higher quality layers with permeabilities of up to 80mD.
These porosity and permeability attributes have supported the use of more
favourable recovery factors for the B-Sand in the updated volumetric model.
Analysis of the gas samples collected during well testing operations point to
a very dry gas with methane (CH4) concentrations of >94% with CO(2), N(2)
and H(2)S meeting National Grid Entry Specifications with no major processing
requirements for gas export. This is considered significant from a development
and commercial perspective.
The Company was recently informed by Shell of an overspend on the Selene well
which has resulted in unexpected costs being allocated to the Company.
Further details of these costs are set out in the Financial Review.
Endymion Opportunity
Based on data acquired during the drilling of the Selene exploration well in
2024, Deltic has reviewed the prospectivity associated with the Endymion
structure located on the north-eastern corner of the P2437 licence area.
Endymion is a structural extension of the depleted Mimas gas field.
It is envisaged that the Endymion structure would be developed via a single
subsea tie-back to the proposed Selene development infrastructure. Any
additional gas produced from Endymion could further materially enhance the
overall Selene licence project economics and could maximise the use of the
proposed Selene infrastructure for a number of additional years. It is
expected that any drilling on Endymion would only occur after Final Investment
Decision ("FID") on the core Selene development had been secured.
Selene - Next Steps
Over the coming months the post-well analysis workflows will draw to a close
and the Operator and JV partners will shift their focus to preparation of the
FDP. The FDP is the key document detailing all the subsurface, engineering,
operational and cost elements required for achieving the required regulatory
approvals and ultimately a 'FID'. Timeline guidance provided by the Operator
indicates that FID is planned for early 2027 and first gas is expected to be
in H1 2029.
P2672 - Blackadder Gas Discovery
Licence P2672 was formerly awarded on a 100% basis to Deltic Energy in July
2024 as part of the 33(rd) Offshore Licensing Round. The licence is located
in an area of mature infrastructure, immediately to the west of the West Sole
gas field which has produced more than 2 TCF of gas since it first came online
in 1967.
Based on knowledge gained from the Selene project, Deltic has updated the
depth conversion of the legacy 3D seismic data across the Blackadder licence
and surrounding areas. Based on this work, Deltic believes that the Pharos
discovery, drilled by well 47/05d-6, and the previously identified Blackadder
prospect are likely part of a larger single structure.
The 47/05d-6 well, drilled by a consortium led by Dana Petroleum in 2013,
encountered a gas-bearing Leman Sandstone reservoir, although the gas column
was significantly shorter than pre-drill predictions and the well was plugged
and abandoned without testing. Deltic's updated mapping indicates that this
well was drilled in a very down-dip location which accounts for the shorter
gas column encountered and indicates the potential for a significant up-dip
gas volume in the greater Blackadder structure.
The Blackadder area is structurally challenging and the Phase A Work Programme
is focused on the reprocessing of legacy 3D seismic data to improve reservoir
imaging which in turn should allow a more refined structural interpretation,
further de-risking the Blackadder structure.
Based on interest from the E&P community following the Selene discovery,
Deltic launched a farm-out process on the licence in March 2025 to find a
partner, or partners, to help move the project towards drilling. Although a
number of potential counterparties have looked at the asset, it has been
difficult to gain significant momentum to date given the prevailing fiscal
and political backdrop.
P2646 - Dewar Prospect
Licence P2646 was formerly awarded on a 100% basis to Deltic Energy in May
2024 as part of the 33(rd) Offshore Licensing Round. The licence is located in
an area of mature infrastructure, immediately to the south-east of BP's ETAP
field.
Dewar is the main prospect on P2646 and is an AVO-supported prospect within
sands of the Forties Sandstone Member.
The subsurface opportunity is well understood from the legacy work completed
by Deltic and while the prospect is robust there are significant challenges in
terms of access to export infrastructure. The Company's intention is to review
potential development and export options for this low-risk exploration
prospect again in 2026, before looking to introduce a partner to help take
this project forward.
While Deltic reviews the potential offtake options, the Dewar licence remains
in 'care and maintenance' mode and, other than nominal licence rental and NSTA
levy fees, the Company expects to incur no further costs on this licence
during 2025.
Portfolio Management
During the period, Deltic either relinquished or withdrew from three UKCS
licences including the Pensacola and Syros licences.
The Company was forced to withdraw from Licence P2252 containing the Pensacola
discovery when it became clear that the Company was unable to fund its way
forward through the appraisal well process during the period of uncertainty
for the industry in the run-up to the general election in July 2024.
Licence P2558 (Pensacola North), located immediately to the north of
Pensacola, was allowed to lapse at the end of Phase A after the JV determined
that there were no credible drilling targets identified within the licence
area.
Despite a positive response from industry to Deltic's farm-out process on
Licence P2542, containing the Syros prospect, a farm-out was not achieved
within Phase A of the licence. Given the backdrop of political and fiscal
policy uncertainty which persisted throughout 2023 and 2024, Deltic requested
an extension to Phase A to allow the farm-out process to continue after the
budget announcements in October 2024. This extension request was refused by
the NSTA and the licence lapsed at the end of Phase A on 1 December 2024.
Andrew Nunn
Chief Executive Officer
30 June 2025
Financial Review
Overview
The Company started the year with a cash balance of £5.6 million and ended
the year to 31 December 2024 with a cash balance of £1.4 million. 2024 saw
the Company farm-out a 25% interest in Licence P2437, containing the Selene
Prospect, and drilling the Selene exploration well. The Company also provided
its notice of withdrawal from the Pensacola licence.
The farm-in arrangements with Shell U.K. Limited ("Shell") and Dana Petroleum
(E&P) Limited ("Dana") resulted in Deltic being carried for most of its
share of costs associated with drilling the Selene discovery well in 2024.
However, the Company was recently informed by Shell of an overspend on the
Selene well which has resulted in unexpected costs being allocated to the
Company. This cost overrun on the Selene well has resulted in additional
costs, recognised for the purpose of this 2024 annual report, as £1.3 million
net to Deltic. While discussions around a deferred payment agreement,
similar to that put in place in 2024 for Pensacola, are ongoing, this would
represent a significant deferred liability for the Company that would likely
be due prior to first revenues from a potential Selene development. As part of
the commercial arrangements, $1 million of the Dana carry is deferred and is
likely to crystalise in May 2026, and will become payable to the Company at
that point.
Loss for the year
The Company incurred a loss, before the write down of intangible assets, for
the year to 31 December 2024 of £2.8 million (2023: £2.8 million).
Administrative expenses of £2.9 million (2023: £3.0 million) were incurred
during the year.
Deltic farmed out a 25% interest in Licence P2437, containing the Selene
Prospect, to Dana. Dana paid the Company £1.0 million in cash on completion
in relation to back costs incurred by Deltic. The Company recognised a gain of
£0.1 million on the farm out of Licence P2437 to Dana which is included as
other operating income.
Finance income of £0.1 million (2023: £0.4 million) was earned on short-term
high interest-bearing deposits.
Corporation tax is payable on finance income earned, and accordingly the
Company has recognised an income tax expense in the year of less than £0.1
million (2023: £0.1 million). The Company has incurred expenditure since
incorporation on UK exploration and appraisal activities that gives rise to a
potential tax asset of £60 million that can be utilised to offset future
taxation.
The Company recognised an impairment in the period of £18.0 million resulting
from the decision to notify the partners of Licence P2252 of the Company's
intention to withdraw from the Pensacola licence and a write down of £0.4
million was recognised during the year (2023: nil) resulting from the
relinquishment of P2542 (Syros).
Balance Sheet
The Company had total Capital and Reserves as at 31 December 2024 of £1.0
million (2023: £21.7 million).
The value of exploration assets decreased by £15.6 million (2023: £7.9
million increase) to £1.9 million (2023: £17.5 million) reflecting the write
down recognised on the withdrawal from the Pensacola licence, and the Selene
farm-out to Dana offset by operational cost spent. The Selene asset of £1.9
million (2023: £1.1 million) is valued at cost to Deltic on the balance sheet
after the utilisation of the Joint Venture Partners carry commercial
arrangements and the removal of 25% cost associated with the farm-down to
Dana.
Property, plant and equipment of £0.1 million (2023: £0.2 million) includes
a right of use asset relating to the office lease. The Property, Plant and
Equipment reduction reflects the depreciation charge for the year on the
office lease, fixtures and fittings and computer equipment.
The Company's cash position at 31 December 2024 was £1.4 million (2023: £5.6
million) with the year-on-year decrease mainly arising from general and
administrative costs, investment in drilling operational costs offset by
proceeds from the farm-out of Selene to Dana.
Total current liabilities, which include short-term creditors, accruals,
provisions and lease liabilities was £1.6 million (2023: £1.6 million).
Liabilities of less than £0.1 million (2023: £0.4 million) are due to the
joint venture Operator for payments associated with operations. Other payables
and accruals of £1.4 million (2023: £0.6 million) mainly represent value of
work done yet to be billed by the joint venture Operator.
Total non-current liabilities of £0.9 million (2023: nil) represent
liabilities due under a deferred repayment agreement agreed with the Pensacola
JV whereby Deltic have a 24-month period from September 2024 to repay £0.9
million due to the JV.
Cash flow
As at 31 December 2024, the Company held cash and cash equivalents totalling
£1.4 million (2023: £5.6 million). The Company had a net cash outflow for
the year of £4.1 million (2023: outflow £14.8 million).
A net cash outflow from operating activities of £2.5 million (2023: £2.6
million) was incurred for general and administrative costs.
A net cash outflow of £1.5 million (2023: £12.1 million) was used in
investing activities including £2.6 million (2023: £12.5 million) on
exploration and evaluation assets, offset by proceeds of £1.0 million in
relation to back costs incurred by Deltic, as part of the farm out a 25%
interest in the Selene licence to Dana. Interest of £0.1 million was received
(2023: £0.4 million) on short term deposits.
£2.6 million (2023: £12.5 million) invested on exploration and evaluation
assets represents £1.6 million (2023: £12.0 million) paid mainly to Shell
during the year for Pensacola appraisal pre-drilling operations and £0.9
million (2023: £0.1 million) was spent on Selene operations. The majority of
Selene costs incurred between the effective date and completion of the Selene
farm-out were reimbursed by Dana as part of the Selene farm-out. Dana paid
the Company £1.0 million (2023: nil) proceeds for the farm-out of Selene
being £0.4 million initial contribution and a further £0.6 million as
repayment of Shell costs incurred by the Company between the effective date
and completion of the transaction. A further £0.1 million (2023: £0.4
million) was spent developing the other licences in the exploration portfolio.
Bank interest of £0.1 million (2023: £0.4 million) was earned on short term
high interest-bearing deposits on surplus.
Going concern
As part of the preparation of the Company's financial statements, the
Directors have considered the Company's ability to continue as a going concern
for a period of at least 12 months from the date of approval of these
financial statements.
On 30 June 2025, the boards of Rockrose Energy Limited ("Viaro Bidco") a
wholly-owned subsidiary of Viaro Energy Limited ("Viaro Energy") and Deltic
announced that it had reached agreement on the terms of a recommended cash
offer for the entire issued and to be issued ordinary share capital of Deltic
(the "Acquisition"), intended to be implemented by way of a court-sanctioned
scheme of arrangement.
Completion of the Acquisition remains conditional on, among other things, the
approval of Deltic shareholders. The Directors, the Company's largest
shareholder and certain other shareholders have given irrevocable undertakings
to vote in favour of the Acquisition which is currently expected to complete
during Q4 2025.
To support the Company's liquidity position during the period to completion of
the Acquisition, on 30 June 2025, Deltic entered into a two-year term loan
with Viaro Bidco whereby Viaro Bidco has agreed to make available to the
Company funding of £2.7 million ("Term Loan") which will be available to be
used to settle £1.3 million of current liabilities that are due to Shell and
for general corporate and working capital purposes. The Term Loan is unsecured
and interest will accrue at a rate of 10 per cent. per annum on the principal
drawn down.
Viaro Bidco has also undertaken to pay, or procure the payment of, certain
costs reasonably and properly incurred by Deltic in connection with the
Acquisition. The costs undertaking is capped at a maximum aggregate amount
of £650,000. The Company does not expect the costs associated with the
Acquisition to be more than £650,000.
In the absence of the Acquisition proceeding, the Directors anticipate that
the Company would be required to raise additional capital in the going concern
period to:
1) Settle any amount drawn down under the £2.7 million Term Loan, which
may include the repayment of the £1.3 million Shell current liabilities;
2) Continue to fund the Company's share of the Selene work program until
value can be realised from the Selene asset; and
3) Cover the Company's general corporate operating costs.
Against this backdrop, the Directors believe that the Acquisition represents
certainty for Deltic's Shareholders in relation to the future of the Company.
The Directors also believe that, in the absence of alternative funding to
the Term Loan and the Acquisition progressing, the Company would be in an
extremely challenging financial position and the Directors may have no option
but to place the Company into administration. Should administrators be
appointed, it is not known how much, if any, value would be returned to
Shareholders.
These circumstances represent a material uncertainty that may cast significant
doubt on the Company's ability to continue as a going concern. However, having
regard to the availability of the Term Loan entered into on 30 June 2025 and
the cost coverage arrangements referred to above, the Directors have a
reasonable expectation that the Company will have adequate resources to
continue in existence to at least the period prior to completion of the
Acquisition. Accordingly, the financial statements have been prepared on a
going concern basis. The Independent Auditor's Report to the members of
Deltic Energy Plc for the year ended 31 December 2024 refers to this material
uncertainty surrounding going concern.
Sarah McLeod
Chief Financial Officer
30 June 2025
Investing Policy
In addition to the development of the North Sea gas licences the Company has
acquired to date, the Company proposes to continue to evaluate other potential
oil and gas projects in line with its investing policy, as it aims to build a
portfolio of resource assets and create value for shareholders. As disclosed
in the Company's AIM Admission Document in May 2012, the Company's
substantially implemented Investment Policy is as follows:
The proposed investments to be made by the Company may be either quoted or
unquoted; made by direct acquisition or through farm-ins; either in companies,
partnerships or joint ventures; or direct interests in oil & gas and
mining projects. It is not intended to invest or trade in physical commodities
except where such physical commodities form part of a producing asset. The
Company's equity interest in a proposed investment may range from a minority
position to 100% ownership.
The Board initially intends to focus on pursuing projects in the oil & gas
and mining sectors, where the Directors believe that a number of opportunities
exist to acquire interests in attractive projects. Particular consideration
will be given to identifying investments which are, in the opinion of the
Directors, underperforming, undeveloped and/or undervalued, and where the
Directors believe that their expertise and experience can be deployed to
facilitate growth and unlock inherent value.
The Company will conduct initial due diligence appraisals of potential
projects and, where it is believed further investigation is warranted, will
appoint appropriately qualified persons to assist with this process. The
Directors are currently assessing various opportunities which may prove
suitable although, at this stage, only preliminary due diligence has been
undertaken.
It is likely that the Company's financial resources will be invested in either
a small number of projects or one large investment which may be deemed to be a
reverse takeover under the AIM Rules. In every case, the Directors intend to
mitigate risk by undertaking the appropriate due diligence and transaction
analysis. Any transaction constituting a reverse takeover under the AIM Rules
will also require Shareholder approval.
Investments in early stage and exploration assets are expected to be mainly in
the form of equity, with debt being raised later to fund the development of
such assets. Investments in later stage projects are more likely to include an
element of debt to equity gearing. Where the Company builds a portfolio of
related assets, it is possible that there may be cross holdings between such
assets.
The Company intends to be an involved and active investor. Accordingly, where
necessary, the Company may seek participation in the management or
representation on the Board of an entity in which the Company invests with a
view to improving the performance and use of its assets in such ways as should
result in an upward re-rating of the value of those assets.
Given the timeframe the Directors believe is required to fully maximise the
value of an exploration project or early stage development asset, it is
expected that the investment will be held for the medium to long term,
although disposal of assets in the short term cannot be ruled out in
exceptional circumstances.
The Company intends to deliver Shareholder returns principally through capital
growth rather than capital distribution via dividends, although it may become
appropriate to distribute funds to Shareholders once the investment portfolio
matures and production revenues are established.
Given the nature of the Investing Policy, the Company does not intend to make
regular periodic disclosures or calculations of its net asset value.
The Directors consider that as investments are made, and new investment
opportunities arise, further funding of the Company will be required.
This strategic report contains certain forward-looking statements that are
subject to the usual risk factors and uncertainties associated with the oil
and gas exploration and production business. Whilst the Directors believe the
expectation reflected herein to be reasonable in light of the information
available up to the time of their approval of this report, the actual outcome
may be materially different owing to factors either beyond the Company's
control or otherwise within the Company's control but, for example, owing to a
change of plan or strategy. Accordingly, no reliance may be placed on the
forward-looking statements.
On behalf of the Board
Mark
Lappin
Andrew Nunn
Chairman
Chief Executive Officer
30 June
2025
30 June 2025
Reporting Standard
Estimates of resources have been prepared in accordance with the PRMS as the
standard for classification and reporting.
Qualified Person's Review
Andrew Nunn, a Chartered Geologist and Chief Operating Officer of Deltic, is a
"Qualified Person" in accordance with the Guidance Note for Mining, Oil and
Gas Companies, June 2009 as updated 230 June 2019, of the London Stock
Exchange. Andrew has reviewed and approved the information contained within
this announcement.
Glossary of Technical Terms
1C: Represents the low case estimates of Contingent Resources as defined by PRMS
2C: Represents the best case estimates of Contingent Resources as defined by PRMS
3C: Represents the high case estimates of Contingent Resources as defined by PRMS
BCF or Bscf: Billion Standard Cubic Feet
Boe: Barrels of oil equivalent
Contingent Resources: Those quantities of petroleum which are estimated, on a given date, to be
potentially recoverable from known accumulations, but which are not currently
considered to be commercially recoverable, as defined by PMRS
ELT or Economic Limit Test: Economic Limit Test. The economic limit is defined as the production rate at
the time when the maximum cumulative net cash flow occurs for a project
Geological Chance of Success or GCoS: For prospective resources, means the chance or probability of discovering
hydrocarbons in sufficient quantity for them to be tested to the surface.
This, then, is the chance or probability of the prospective resource maturing
into a contingent resource. Prospective resources have both an associated
chance of discovery (geological chance of success) and a chance of development
(economic, regulatory, market and facility, corporate commitment and political
risks). The chance of commerciality is the product of these two risk
components. These estimates have been risked for chance of discovery but not
for chance of development.
MMboe or million barrels of oil equivalent: Million barrels of oil equivalent. Gas is converted at a conversion rate of
6,000 Scf per boe
MMstb: Million stock tank barrels
MMscf: Million standard cubic feet
P90 resource: Reflects a volume estimate that, assuming the accumulation is developed, there
is a 90% probability that the quantities actually recovered will equal or
exceed the estimate. This is therefore a low estimate of resource
P50 resource: Reflects a volume estimate that, assuming the accumulation is developed, there
is a 50% probability that the quantities actually recovered will equal or
exceed the estimate. This is therefore a median or best case estimate of
resource
P10 resource: Reflects a volume estimate that, assuming the accumulation is developed, there
is a 10% probability that the quantities actually recovered will equal or
exceed the estimate. This is therefore a high estimate of resource
PRMS: The June 2018 Society of Petroleum Engineers ("SPE") Petroleum Resources
Management System
Prospective Resources Are estimated volumes associated with undiscovered accumulations. These
represent quantities of petroleum which are estimated, as of a given date, to
be potentially recoverable from oil and gas deposits identified on the basis
of indirect evidence but which have not yet been drilled.
Scf: Standard cubic feet
Stb: Stock tank barrel
STOIIP: Stock tank oil initially in place
TVDSS: True Vertical Depth Sub-Sea
Income Statement
for the year ended 31 December 2024
Continuing operations Notes 2024 2023
£ £
Administrative expenses:
Write down on relinquished intangible assets 3 (18,465,070) (184,242)
Other administrative expenses (2,937,548) (3,035,896)
Total administrative expenses (21,402,618) (3,220,138)
Other operating income 108,987 -
Operating loss (21,293,631) (3,220,138)
Finance income 112,011 388,403
Finance costs (39,935) (16,788)
Loss before tax (21,221,555) (2,848,523)
Income tax expense (19,732) (112,830)
Loss for the year (21,241,287) (2,961,353)
Statement of Comprehensive Income
for the year ended 31 December 2024
2024 2023
£ £
Loss for the year (21,241,287) (2,961,353)
Other comprehensive income - -
Total comprehensive expense for the year attributable to the equity holders of (21,241,287) (2,961,353)
the Company
Balance Sheet
as at 31 December 2024
Notes 2024 2023
£ £
Assets
Non-current assets
Intangible assets 3 1,872,629 17,463,225
Property, plant and equipment 4 61,909 171,627
Investments in subsidiary 1 1
Other receivables - 37,422
Total non-current assets 1,934,539 17,672,275
Current assets
Trade and other receivables 129,596 112,598
Cash and cash equivalents 1,444,904 5,580,259
Total current assets 1,574,500 5,692,857
3,509,039 23,365,132
Total assets
Capital and reserves attributable to the equity holders of the Company
Shareholders' equity
Share capital 9,309,660 9,309,660
Share premium 33,145,477 33,145,477
Share-based payment reserve 2,466,461 1,999,834
Accumulated retained deficit (43,943,280) (22,716,617)
978,318 21,738,354
Total equity
Liabilities
Current liabilities
Trade and other payables 1,591,370 1,402,375
Current tax payable 17,151 88,775
Lease liabilities 22,837 124,282
1,631,358 1,615,432
Total current liabilities
Non-current liabilities
Other payables 899,363 -
Lease liabilities - 11,346
899,363 11,346
Total non-current liabilities
2,530,721 1,626,778
Total liabilities
3,509,039 23,365,132
Total equity and liabilities
Statement of Changes in Equity
for the year ended 31 December 2024
Share Share Share-based payment reserve Accumulated retained Total
capital
premium
£
deficit
equity
£
£ £
£
Balance at 1 January 2024 9,309,660 33,145,477 1,999,834 (22,716,617) 21,738,354
Comprehensive income for the year
Loss for the year - - - (21,241,287) (21,241,287)
Total comprehensive loss for the year - - - (21,241,287) (21,241,287)
Contributions by and distributions to owners
Share-based payment - - 481,251 - 481,251
Expired share options - - (14,624) 14,624 -
Total contributions by and distributions to owners - - 466,627 14,624 481,251
Balance at 31 December 2024 9,309,660 33,145,477 2,466,461 (43,943,280) 978,318
Balance at 1 January 2023 9,309,660 33,150,786 1,535,202 (19,802,953) 24,192,695
Comprehensive income for the year
Loss for the year - - - (2,961,353) (2,961,353)
Total comprehensive loss for the year - - - (2,961,353) (2,961,353)
Contributions by and distributions to owners
Issue of shares - 22 - - 22
Costs of share issue - (5,331) - - (5,331)
Share-based payment - - 512,321 - 512,321
Expired share options - - (47,689) 47,689 -
Total contributions by and distributions to owners - (5,309) 464,632 47,689 507,012
Balance at 31 December 2023 9,309,660 33,145,477 1,999,834 (22,716,617) 21,738,354
Statement of Cash Flows
for the year ended 31 December 2024
2024 2023
£ £
Cash flows from operating activities
Loss before tax (21,221,555) (2,848,523)
Finance income (112,011) (388,403)
Finance costs 39,935 16,788
Depreciation 114,095 115,099
Loss on disposal of property, plant and equipment 1,130 500
Gain on farm-in (108,987) -
Write down on relinquished intangible assets 18,465,070 184,243
Foreign exchange movement in operating loss (7,504) -
Share-based payment 481,251 512,321
(2,348,576) (2,407,975)
Decrease in other receivables 4,992 10,112
Decrease in trade and other payables (90,202) (203,603)
Tax paid (90,290) (24,055)
Net cash outflow from operating activities (2,524,076) (2,625,521)
Cash flows from investing activities
Purchase of intangible assets (2,612,843) (12,547,872)
Purchase of property, plant and equipment (12,668) (1,130)
Proceeds from licence farm-ins 1,040,581 -
Interest received 126,377 446,795
Net cash outflow from investing activities (1,458,553) (12,102,207)
Cash flows from financing activities
Proceeds from share issue - 22
Expense of share issue - (5,331)
Payment of principal portion of lease liabilities (113,587) (79,608)
Lease interest paid (8,086) (16,788)
Other interest paid (31,053) -
Net cash outflow from financing activities (152,726) (101,705)
Decrease in cash and cash equivalents (4,135,355) (14,829,433)
Cash and cash equivalents at beginning of year 5,580,259 20,409,692
Cash and cash equivalents at end of year 1,444,904 5,580,259
Notes to the Financial Statements
for the year ended 31 December 2024
1. Accounting Policies
Basis of preparation
Deltic Energy Plc is a public limited company incorporated and domiciled in
the United Kingdom whose share are publicly traded. The registered office is
location at 1(st) Floor, 150 Waterloo Road, London, SE1 8SB. The registered
company number is 07958581.
The financial statements have been prepared in accordance with UK adopted
International Accounting Standards ('IAS') and with those parts of the
Companies Act 2006 applicable to companies reporting under International
Accounting Standards ('IAS').
On 24 April 2023, the Company incorporated a subsidiary, Deltic Energy One
Limited, a company incorporated in England and registered at 1st Floor 150
Waterloo Road, London, SE1 8SB. This subsidiary has been dormant from the date
of incorporation. As it is not material for the purpose of giving a true and
fair view, the Company has not consolidated its subsidiary, taking advantage
of the exemption available under the Companies Act 2006 section 405, and has
therefore not prepared consolidated financial statements.
The preparation of financial statements in conformity with IAS requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and factors that are believed to be reasonable under the
circumstance, the result of which form the basis of making judgements about
carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from this estimate. The areas
involving a higher degree of judgement or complexity, or where assumptions and
estimates are significant to the financial statements, are disclosed later in
this note.
Operating loss is stated after charging and crediting all items excluding
finance income and expenses.
The estimates and underlying assumptions are reviewed on an on-going basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision only affects that period or in the period
of revision and future periods if the revision affects both current and future
periods.
Going concern
As part of the preparation of the Company's financial statements, the
Directors have considered the Company's ability to continue as a going concern
for a period of at least 12 months from the date of approval of these
financial statements.
On 30 June 2025, the boards of Rockrose Energy Limited ("Viaro Bidco") a
wholly-owned subsidiary of Viaro Energy Limited ("Viaro Energy") and Deltic
announced that it had reached agreement on the terms of a recommended cash
offer for the entire issued and to be issued ordinary share capital of Deltic
(the "Acquisition"), intended to be implemented by way of a court-sanctioned
scheme of arrangement.
Completion of the Acquisition remains conditional on, among other things, the
approval of Deltic shareholders. The Directors, the Company's largest
shareholder and certain other shareholders have given irrevocable undertakings
to vote in favour of the Acquisition which is currently expected to complete
during Q4 2025.
To support the Company's liquidity position during the period to completion of
the Acquisition, on 30 June 2025, Deltic entered into a two-year term loan
with Viaro Bidco whereby Viaro Bidco has agreed to make available to the
Company funding of £2.7 million ("Term Loan") which will be available to be
used to settle £1.3 million of current liabilities that are due to Shell and
for general corporate and working capital purposes. The Term Loan is unsecured
and interest will accrue at a rate of 10 per cent. per annum on the principal
drawn down.
Viaro Bidco has also undertaken to pay, or procure the payment of, certain
costs reasonably and properly incurred by Deltic in connection with the
Acquisition. The costs undertaking is capped at a maximum aggregate amount
of £650,000. The Company does not expect the costs associated with the
Acquisition to be more than £650,000.
In the absence of the Acquisition proceeding, the Directors anticipate that
the Company would be required to raise additional capital in the going concern
period to:
1) Settle any amount drawn down under the £2.7 million Term Loan, which
may include the repayment of the £1.3 million Shell current liabilities;
2) Continue to fund the Company's share of the Selene work program until
value can be realised from the Selene asset; and
3) Cover the Company's general corporate operating costs.
Against this backdrop, the Directors believe that the Acquisition represents
certainty for Deltic's Shareholders in relation to the future of the Company.
The Directors also believe that, in the absence of alternative funding to
the Term Loan and the Acquisition progressing, the Company would be in an
extremely challenging financial position and the Directors may have no option
but to place the Company into administration. Should administrators be
appointed, it is not known how much, if any, value would be returned to
Shareholders.
These circumstances represent a material uncertainty that may cast significant
doubt on the Company's ability to continue as a going concern. However, having
regard to the availability of the Term Loan entered into on 30 June 2025 and
the cost coverage arrangements referred to above, the Directors have a
reasonable expectation that the Company will have adequate resources to
continue in existence to at least the period prior to completion of the
Acquisition. Accordingly, the financial statements have been prepared on a
going concern basis. The Independent Auditor's Report to the members of
Deltic Energy Plc for the year ended 31 December 2024 refers to this material
uncertainty surrounding going concern.
2. Loss per Share
Basic loss per share is calculated by dividing the loss attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
Due to the losses incurred during the year, a diluted loss per share has not
been calculated as this would serve to reduce the basic loss per share. There
were 9,506,560 (2023: 10,066,560) share options outstanding at the end of the
year that could potentially dilute basic earnings per share in the future.
Basic and diluted loss per share
2024 2023
Loss per share from continuing operations (22.82)p (3.18)p
The loss and weighted average number of ordinary shares used in the
calculation of loss per share are as follows:
2024 2023
£ £
Loss used in the calculation of total basic loss per share (21,241,287) (2,961,353)
Number of shares 2024 2023
Number Number
Weighted average number of ordinary shares for the purposes of basic loss per 93,096,600 93,096,600
share
3. Intangible Assets
Exploration & evaluation assets Software
licences
£
Total
£
£
Cost
At 1 January 2023 9,769,477 39,257 9,808,734
Additions 7,877,990 - 7,877,990
Write down on relinquished assets (21,127) - (21,127)
At 31 December 2023 17,626,340 39,257 17,665,597
Additions 3,797,407 - 3,797,407
Farm-out of licence (922,933) - (922,933)
Write down on relinquished assets (18,465,070) - (18,465,070)
At 31 December 2024 2,035,744 39,257 2,075,001
Amortisation and impairment
At 1 January 2023 - 39,257 39,257
Impairment charge 163,115 - 163,115
At 31 December 2023 163,115 39,257 202,372
Impairment charge - - -
At 31 December 2024 163,115 39,257 202,372
Net Book Value
At 31 December 2024 1,872,629 - 1,872,629
At 31 December 2023 17,463,225 - 17,463,225
At 31 December 2022 9,769,477 - 9,769,477
The net book value of exploration and evaluation assets at 31 December 2024
and 2023 relates solely to the Company's North Sea Licences.
Additions of £3,797,407 (2023: £7,877,990) differ to the cash flows in the
Statement of Cash Flows owing to an increase in trade and other payables of
£1,184,564 (2023: £3,388,882 decrease) and a decrease in provisions of £nil
(2023: £1,281,000) relating to the plug and abandonment of the Pensacola
exploration well that was completed in February 2023.
Aggregate cash proceeds arising from the farm-out of the Selence licence to
Dana during the period amounted to £1,040,581, including a foreign exchange
gain of £8,661. An amount of £922,933 was deducted from exploration and
evaluation assets, being the previously capitalised amount relating to the
licence. The surplus of the proceeds over the carrying value amount to
£108,987 and was recognised as a gain on disposal of the partial interest and
included as other operating income in the Income Statement for the period.
A charge of £17,998,254 was recognised during the year (2023: nil)
resulting from the write down on relinquished assets following the decision to
withdraw from P2252 (Pensacola).
A charge of £69,092 was recognised during the year (2023: nil) resulting
from the write down on relinquished assets following the decision to
relinquish P2558 (Pensacola North).
A charge of £395,112 was recognised during the year (2023: nil) resulting
from the write down on relinquished assets following the decision to
relinquish P2542 (Syros).
A charge of £2,612 was recognised during the year (2023: £21,127)
resulting from the write down on relinquished assets following the decision in
the prior year to relinquish from P2567 (Cadence).
In the prior year, an impairment charge of £163,115 was recognised resulting
from the impairment of P2428 (Cupertino) following the decision not to renew
the licence in 2024.
4. Property, Plant and Equipment
Office lease Fixtures Computer equipment Total
Leasehold improvements and fittings
£ £ £ £ £
Cost
At 1 January 2023 91,700 404,650 45,800 40,311 582,461
Additions - - - 7,680 7,680
Disposals - - (544) (4,560) (5,104)
At 31 December 2023 91,700 404,650 45,256 43,431 585,037
Additions - - - 5,508 5,508
Disposals - - (1,786) (2,021) (3,807)
At 31 December 2024 91,700 404,650 43,470 46,918 586,738
Depreciation
At 1 January 2023 44,828 215,813 16,628 25,647 302,916
Charge for year 19,314 80,931 6,870 7,984 115,099
Disposals - - (336) (4,269) (4,605)
At 31 December 2023 64,142 296,744 23,162 29,362 413,410
Charge for year 19,367 80,931 6,825 6,973 114,096
Disposals - - (1,096) (1,581) (2,677)
At 31 December 2024 83,509 377,675 28,891 34,754 524,829
Net Book Value
At 31 December 2024 8,191 26,975 14,579 12,164 61,909
At 31 December 2023 27,558 107,906 22,094 14,069 171,627
At 1 January 2023 46,872 188,837 29,172 14,664 279,545
The office lease category reflects a right of use asset relating to the office
premises occupied by the Company.
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