REG - Empyrean Energy PLC - Final Results
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RNS Number : 4996X Empyrean Energy PLC 01 September 2025
1 September 2025
Empyrean Energy PLC / Index: AIM / Epic: EME / Sector: Oil & Gas
Empyrean Energy PLC ('Empyrean' or 'the Company')
Final Results
Empyrean Energy is pleased to announce its final results for the year ended 31
March 2025 ("Report and Accounts"). The full Report and Accounts will be made
available on the Company's website in the coming days.
Key Activities
Duyung PSC Project, Indonesia (EME 8.5%)
Reporting period
· On 24 June 2024, the Company announced that the Mako JV partners
had entered into a binding domestic Gas Sales Agreement ("GSA") for the sale
and purchase of the domestic portion of Mako gas with PT Perusahaan Gas Negara
Tbk ("PGN"), the gas subsidiary of PT Pertamina (Persero), the national oil
company of Indonesia.
· The domestic GSA will be subject to the construction of a
pipeline connecting the West Natuna Transportation System ("WNTS") with the
domestic gas market in Batam and it forms part of Mako JV's Domestic Market
Obligation ("DMO") as set out in the Mako revised Plan of Development ("POD").
· The Total Contracted Gas volume under the PGN GSA is up to 122.77
trillion British Thermal Units ("TBtu"), with estimated plateau production
rates of 35 billion British thermal units ("Bbtud") per day. The remainder of
the Mako sales gas volumes were targeted to be sold via an export GSA.
· Due to the very strong growth in domestic demand for gas in
Indonesia, the Indonesian Ministry of Energy and Mineral Resources ("MEMR")
directed that all Mako gas (plateau sales gas rate of 111 Bbtud) be made
available for the Indonesian domestic market in Batam with the gas to be
purchased by PT PLN Energi Primer Indonesia ("PLN EPI" or "PLN") a wholly
owned subsidiary of the Indonesian state-owned electric utility company PT
Perusahaan Listrik Negara (Persero) ("PLN Persero").
· The Mako gas price will be linked to the Indonesian Crude Price
("ICP"), which is akin to Brent oil-linked Liquified Natural Gas ("LNG")
pricing. This structure will be economically equivalent to the pricing
previously approved for Mako gas to be sold both domestically and for export,
thereby underpinning the value of gas from Mako.
· As a result of the MEMR Directive, in July 2025, Conrad Asia
Energy Ltd ("Conrad") signed a binding GSA for the sale and purchase of
natural gas from the Mako Gas Field with PLN EPI.
· In addition, MEMR has revoked its earlier allocation and pricing
Directive to sell Mako gas to PT Perusahaan Gas Negara Tbk ("PGN") and
Sembcorp Gas Pte Ltd. ("Sembcorp") and the GSAs with PGN and Sembcorp has been
terminated.
· The MEMR Directive is anticipated to support potential farmout
arrangements in Duyung and a Financial Investment Decision ("FID") for Mako.
· Empyrean holds an 8.5% operating interest in the Duyung
Production Sharing Contract ("PSC") in which Mako is located, offshore in the
West Natuna Sea, Indonesia.
Wilson River Project, Queensland Australia (EME 8.5%)
Reporting period
· Acquisition of option to participate in Wilson River conventional
oil prospect. The Wilson Prospect is situated close to existing infrastructure
in the prolific Cooper Basin in South-West Queensland, Australia, and adjacent
to several producing oil fields.
· Following the securing of land access and completion of cultural
heritage surveys and drill preparation activities, the Wilson River-1 well
spudded on 14 March 2025. The well was funded by Empyrean and Condor Energy
Services Limited ("Condor Energy"), an experienced Australian based well
services and drilling company with recent drilling contracts completed nearby
in the Cooper Basin.
Post-Reporting period
· Following drilling the JV partners in the Wilson River-1 decided
to conduct a Drill Stem Test ("DST") over the potential oil zone identified in
the Murta Formation from analysis of logs and hydrocarbon shows from the well.
However, the final well testing report confirmed the recovery of formation
water in the potential oil zone and, as a result, the well was plugged and
abandoned.
Sacramento Basin, California USA (EME 25-30%)
No work was conducted on the project during the year.
Corporate
Reporting period
· Placing, Subscription and Retail Offer to raise US$1.592 million
(£1.255 million) completed in November 2024.
· Placing to raise US$0.840 million (£0.675 million) completed in
January 2025.
· Placing to raise US$0.787 million (£0.625 million) completed in
February 2025.
· Mr John (Spencer) Laycock assumed the role of Non-Executive
Chairman of the Company in April 2024, replacing Dr Patrick Cross who remained
on the Board as Non-Executive Director.
Post-Reporting period
· Placing and Retail Offer to raise US$0.825 million (£0.661
million) completed in April 2025.
· Placing to raise US$1.354 million (£1 million) completed in July
2025.
Chairman's Statement
At the time of writing this statement, Empyrean's Board and staff became aware
of the very distressing news that the Company's Managing Director and CEO, Tom
Kelly, had passed away after a tragic accident. Tom was much loved and
respected and will be dearly missed by everyone at Empyrean and we are still
coming to terms with what has happened. For now, on behalf of the Board and
all at Empyrean, I reiterate our earlier sentiments that our thoughts are with
Tom's family and friends and our deepest condolences go out to them.
I will now provide a review of the reporting period as is custom for an Annual
Report.
As noted in August 2024, I have assumed the Chairmanship of the Company and I
would again like to formally extend my thanks to Dr Patrick Cross for serving
in this role for the past 20 years and for the meaningful contribution he made
in that time.
It has clearly been a very frustrating year for Empyrean and its shareholders.
In Indonesia it has been a protracted waiting period for Empyrean, as we seek
to ultimately maximise value from our 8.5% interest in the Mako gas field
discovery on the Duyung permit. However, recent developments have been
somewhat more encouraging. After the presidential election, the Indonesian
government has changed its energy policy objectives and has directed that all
Mako gas be made available for the Indonesian domestic market. This is a
significant development in terms of ultimately commercialising the asset in a
timely manner.
As a result, in July 2025, Conrad signed a binding GSA for the sale and
purchase of natural gas from the Mako Gas Field with PLN EPI. Pleasingly,
Conrad have indicated that the finalisation of the GSA with PLN Persero has
sparked renewed interest in the farm down process with Conrad having received
further non-binding offers and having entered into confidential discussions
with one party. Empyrean hopes this process will reach a conclusion during
2025 and it can look to commercialise its current interest in the project.
In January 2025, Empyrean acquired an option to participate in Wilson River
conventional oil prospect located within the ATP 1173 permit that is situated
close to existing infrastructure in the prolific Cooper Basin in South-West
Queensland, Australia, and adjacent to several producing oil fields. In March
2025, the Wilson-1 well spud. The JV partners elected to conduct a DST on
potential oil zone identified from the drilling but, unfortunately, this
confirmed the recovery of formation water in the potential oil zone and, as a
result, the well was plugged and abandoned.
From a corporate perspective, the Company has successfully raised funds
throughout the reporting period through a series of Placings and Retail
Offers. While dilutive, these funds have enabled increased operational
activity and will provide much-needed working capital while events in
Indonesia progress. Despite the disappointing result at Wilson, the Company
continues to assess other project opportunities while mindful of preserving
its capital.
I would like to thank the Board, management and staff for their patience and
perseverance as it has been a particularly difficult year. I'd also like to
thank those shareholders that have remained steadfast in their support - I do
appreciate how frustrated many are right now. Empyrean remains optimistic of
a positive conclusion to the sell down process from Indonesia, which we hope
will provide the impetus to rebuild value for its shareholders.
John Laycock
Non-Executive Chairman, 1 September 2025
For further information please visit www.empyreanenergy.com
(http://www.empyreanenergy.com/) or contact the following:
Empyrean Energy plc Tel: +61 (8) 6146 5325
Gaz Bisht/Jonathan Whyte
Cavendish Capital Markets Limited (Nominated Advisor and Broker) Tel: +44 (0) 207 220 0500
Neil McDonald
Pearl Kellie
Novum Securities Limited (Joint Broker) Tel: +44 (0) 207 399 9400
Colin Rowbury
Operational Review
The Company's corporate objective remains to build a significant asset
portfolio across the Australasian region.
Empyrean remains optimistic about the significant value potential of its
interest in Indonesia, which will be reflected in a renewed sell down process
and the recent execution of the export GSA with PLN EPIas announced on 17 July
2025. The project has been further supported by strong gas prices in the Asian
region.
Empyrean also has a 25-30% working interest in a package of gas projects in
the Sacramento Basin, onshore California. While no activity occurred during
the past years Empyrean will assess the technical and commercial merits of
other prospects or proposals as they are presented.
Empyrean has retained an interest in the Riverbend Project (10% WI) located in
the Tyler and Jasper counties, onshore Texas and a 58.084% WI in the Eagle Oil
Pool Development Project, located in the prolific San Joaquin Basin onshore,
Southern California. No technical work has been undertaken on these projects
during the year.
Duyung PSC, Indonesia (8.5% WI)
Background
In April 2017, Empyrean acquired a 10% shareholding in WNEL from Conrad
Petroleum (now Conrad Asia Energy Ltd), which held a 100% Participating
Interest in the Duyung Production Sharing Contract ("Duyung PSC") in offshore
Indonesia and is the operator of the Duyung PSC. The Duyung PSC covers an
offshore permit of approximately 1,100km2 in the prolific West Natuna Basin.
The main asset in the permit is the Mako shallow gas field that was discovered
in 2017, and comprehensively appraised in 2019.
In early 2019, both the operator, Conrad, and Empyrean divested part of their
interest in the Duyung PSC to AIM-listed Coro Energy Plc. Following the
transaction, Empyrean's interest reduced from 10% to 8.5% interest in May
2020, having received cash and shares from Coro.
During October and November 2019, a highly successful appraisal drilling
campaign was conducted in the Duyung PSC. The appraisal wells confirmed the
field-wide presence of excellent quality gas in the intra-Muda reservoir sands
of the Mako Gas Field.
Empyrean holds an 8.5% operated interest in the Duyung PSC. Duyung is located
in the Riau Islands Province, Indonesian waters in the West Natuna area,
approximately 100 km to the north of Matak Island and 400 km northeast of
Singapore.
Current Activities
In March 2025, Conrad received a Directive from MEMR, including that due to
the very strong growth in domestic demand for gas in Indonesia, all Mako gas
(plateau sales gas rate of 111 billion British Thermal Units per day
("Bbtud")) be made available for the Indonesian domestic market in Batam with
the gas to be purchased by PLN, a wholly owned subsidiary of the Indonesian
state-owned electric utility company PLN Persero.
PLN Persero is wholly-owned by the Government of Indonesia through the
Ministry of State-Owned Enterprise. The organisation has over 7,000 power
plants supplying over 89 million customers and sells over 288,000 GWh of
electricity annually.
The Mako gas price will be linked to the Indonesian Crude Price ("ICP"), which
is akin to Brent oil-linked Liquified Natural Gas ("LNG") pricing. This
structure will be economically equivalent to the pricing previously approved
for Mako gas to be sold both domestically and for export, thereby underpinning
the value of gas from Mako.
As a result of the MEMR Directive, in July 2025 Conrad signed a binding GSA
for the sale and purchase of natural gas from the Mako Gas Field with PLN EPI.
In addition and a result of the above, MEMR has revoked its earlier allocation
and pricing Directive to sell Mako gas to PGN and Sembcorp and those GSAs with
PGN and Sembcorp has been terminated.
The new Government of Indonesia is formulating its New Energy Plan 2024-2034
(or "New RUPTL") under which it will prioritise gas exploration and production
to meet rapidly rising domestic energy demand. Around 15 Gigawatts ("GW") of
gas power capacity across Indonesia is planned to be built until 2034,
especially to support the base load capacity.
The MEMR Directive is anticipated to support potential farmout arrangements in
Duyung and FID for Mako.
On 24 June 2024, the Company announced that the Mako JV partners had entered
into a binding domestic GSA for the sale and purchase of the domestic portion
of Mako gas with PGN, the gas subsidiary of PLN Persero. The domestic GSA will
be subject to the construction of a pipeline connecting the WNTS with the
domestic gas market in Batam and it forms part of Mako JV's DMO.
The domestic gas sale agreement with PGN for gas from the Mako gas field is an
important step in the commercialisation of the Mako gas field (the largest
undeveloped gas field in the West Natuna Sea). The Total Contracted Gas volume
under the PGN GSA is up to 122.77 trillion TBtu, with estimated plateau
production rates of 35 billion Bbtud per day. The remainder of the Mako sales
gas volumes were targeted to be sold via an export GSA.
The West Natuna Sea gas gathering system is already connected to Singapore.
PGN will now proceed with planning a smaller tie line to the island of Batam
across the Malacca Straight that will connect the Natuna Sea to the Indonesian
market.
Indonesia, the fourth most populated country on earth has a stated objective
of doubling its gas production by 2030 in order to deliver a cleaner energy
source to fuel its rapidly growing economy. PGN will play a significant role
in this Indonesian energy transition.
The Mako field contains 2C Contingent Resources (100%) of 376 billion cubic
feet ("Bcf"), and is scheduled to begin production in 2026. The West Natuna
Sea has been supplying Singapore with natural gas for more than two decades
and Mako is expected to extend this supply for at least another decade via the
existing transportation system.
The contract term is until the end of the Duyung PSC in January 2037 and
allows for the sale of plateau gas rates of 111 Bbtud which is equivalent to
around 111.9 mmscfd. The contract is for the entirety of Mako's 2C Contingent
Resources.
Discussions continue with Conrad regarding settlement of claims over unpaid
cash calls.
Wilson River, Queensland Australia (EME 8.5%)
In January 2025 the Company announced the acquisition of an option to
participate in Wilson River conventional oil prospect. The Wilson Prospect is
situated close to existing infrastructure in the prolific Cooper Basin in
South-West Queensland, Australia, and adjacent to several producing oil
fields.
Following the securing of land access and completion of cultural heritage
surveys and drill preparation activities the Wilson River-1 well spudded on 14
March 2025. The well was funded by Empyrean and Condor Energy, an experienced
Australian based well services and drilling company with recent drilling
contracts completed nearby in the Cooper Basin.
Following drilling the JV partners in the Wilson River-1 decided to conduct a
DST over the potential oil zone identified in the Murta Formation from
analysis of logs and hydrocarbon shows from the well. The final well testing
report however confirmed the recovery of formation water in the potential oil
zone and as a result the well was plugged and abandoned.
Multi Project Farm-in in Sacramento Basin, California (25%-30% WI)
Background
In May 2017, Empyrean agreed to farm-in to a package of opportunities
including the Dempsey and Alvares prospects in the Northern Sacramento Basin,
onshore California. The rationale for participating in this potentially
significant gas opportunity was a chance to discover large quantities of gas
in a relatively 'gas hungry' market. Another attractive component of the deal
was the ability to commercialise a potential gas discovery using existing gas
facilities that are owned by the operator.
There were no significant activities conducted during the past years however
the Company will continue to work with its joint venture partners in reviewing
and assessing any further technical and commercial opportunities as they
relate to the project.
Riverbend Project (10%)
No work has been completed on the project in the year and no budget has been
prepared for 2025/26 whilst the Company focuses on other projects. The Company
previously fully impaired the carrying value of the asset and any subsequent
expenditure, mainly for license fees, has been expensed through the profit and
loss statement.
Eagle Oil Pool Development Project (58.084% WI)
No work has been completed on the project in the year and no budget has been
prepared for 2025/26 whilst the Company focuses on other projects. The Company
previously fully impaired the carrying value of the asset and any subsequent
expenditure, mainly for license fees, has been expensed through the profit and
loss statement.
The information contained in this report was completed and reviewed by the
Company's Executive Director (Technical), Mr Gajendra (Gaz) Bisht, who has
over 36 years' experience as a petroleum geoscientist.
Statement of Comprehensive Income
For the Year Ended 31 March 2025
2025 2024
Continued Operations Notes US$'000 US$'000
Revenue - -
Expenses
Administrative expenses (168) (355)
Compliance fees (245) (326)
Directors' remuneration 4 (406) (416)
Foreign exchange loss 3 (115) (123)
Total expenses (934) (1,220)
Operating loss 3 (934) (1,220)
Finance expense 5 (1,210) (1,770)
Impairment - exploration and evaluation assets 8 (1,205) (6,595)
Loss from continuing operations before taxation (3,349) (9,585)
Tax expense 6 (1) (1)
Loss from continuing operations after taxation (3,350) (9,586)
Total comprehensive loss for the year attributable to owners of the Company (3,350) (9,586)
Earnings (loss) per share from continuing operations attributable to owners of
the Company (expressed in cents)
- Basic 7 (0.18)c (0.98)c
- Diluted (0.18)c (0.98)c
The accompanying accounting policies and notes form an integral part of these
financial statements.
Statement of Financial Position
As at 31 March 2025
Company Number: 05387837 2025 2024
Notes US$'000 US$'000
Assets
Non-Current Assets
Exploration and evaluation assets 8 5,763 5,355
Total non-current assets 5,763 5,355
Current Assets
Trade and other receivables 10 56 17
Cash and cash equivalents 1,675 981
Total current assets 1,731 998
Liabilities
Current Liabilities
Trade and other payables 11 3,125 2,929
Provisions 12 - 189
Convertible loan notes 13 8,938 7,594
Total current liabilities 12,063 10,712
Net Current Liabilities (10,332) (9,714)
Net Liabilities (4,569) (4,359)
Shareholders' Equity
Share capital 15 472 3,405
Share premium reserve 16 52,948 46,891
Warrant and share-based payment reserve 129 123
Retained losses (58,118) (54,778)
Total Equity (4,569) (4,359)
The Financial Statements were approved by the Board of Directors on 1
September 2025
The accompanying accounting policies and notes form an integral part of these
financial statements.
Statement of Cash Flows
For the Year Ended 31 March 2025
2025 2024
Notes US$'000 US$'000
Operating Activities
Payments for operating activities (937) (827)
Net cash outflow for operating activities 14 (937) (827)
Investing Activities
Payments for exploration and evaluation 8 (1,418) (964)
Net cash outflow for investing activities (1,418) (964)
Financing Activities
Issue of ordinary share capital 3,180 2,790
Payment of finance costs - (29)
Payment of equity issue costs (156) (72)
Net cash inflow from financing activities 3,024 2,689
Net increase in cash and cash equivalents 669 898
Cash and cash equivalents at the start of the year 981 83
Forex gain on cash held 25 -
Cash and Cash Equivalents at the End of the Year 1,675 981
The accompanying accounting policies and notes form an integral part of these
financial statements.
Statement of Changes in Equity
For the Year Ended 31 March 2025
Share Capital Share Premium Reserve Warrant and Share-Based Payment Reserve Retained Losses Total Equity
Notes US$'000 US$'000 US$'000 US$'000 US$'000
Balance at 1 April 2023 2,170 45,319 73 (45,265) 2,297
Loss after tax for the year - - - (9,586) (9,586)
Total comprehensive loss for the year - -
- (9,586) (9,586)
Contributions by and distributions to owners
Shares issued in the period 15 1,179 1,611 - - 2,790
Exercise/expiry of warrants - - (73) 73 -
Equity issue costs 7 (123) 44 - (72)
Share-based payment expense 49 84 79 - 212
Total contributions by and distributions to owners 1,235 50 73 2,930
1,572
Balance at 1 April 2024 3,405 46,891 123 (54,778) (4,359)
Loss after tax for the year - - - (3,350) (3,350)
Total comprehensive loss for the year - -
- (3,350) (3,350)
Contributions by and distributions to owners
Shares issued in the period 15 306 2,914 - - 3,220
Expiry of warrants - - (10) 10 -
Equity issue costs 1 (158) - - (157)
Share-based payment expense 2 59 16 - 77
Capital reorganisation 15 (3,242) 3,242 - - -
Total contributions by and distributions to owners (2,933) 6 10 3,140
6,057
Balance at 31 March 2025 472 52,948 129 (58,118) (4,569)
The accompanying accounting policies and notes form an integral part of these
financial statements.
Notes to the Financial Statements
For the Year Ended 31 March 2025
Note 1. Statement of Significant Accounting Policies
Basis of preparation
The Company's financial statements have been prepared in accordance with
United Kingdom adopted International Accounting Standards ("UK adopted IAS")
and Companies Act 2006. The principal accounting policies are summarised
below. The financial report is presented in the functional currency, US
dollars and all values are shown in thousands of US dollars (US$'000), unless
otherwise stated.
The preparation of financial statements in compliance with UK adopted IAS
requires the use of certain critical accounting estimates. It also requires
Company management to exercise judgement in applying the Company's accounting
policies. The areas where significant judgements and estimates have been made
in preparing the financial statements and their effect are disclosed below.
Basis of measurement
The financial statements have been prepared on a historical cost basis, except
for derivative financial instruments, which are measured at fair
value through profit or loss.
Nature of business
The Company is a public limited company incorporated and domiciled in England
and Wales and listed on the AIM market of the London Stock Exchange. The
address of the registered office is Yarnwicke, 119-121 Cannon Street, London
EC4N 5AT. The Company is in the business of financing the exploration,
development and production of energy resource projects in regions with energy
hungry markets close to existing infrastructure. The Company has typically
focused on non-operating working interest positions in projects that have
drill ready targets that substantially short cut the life-cycle of hydrocarbon
projects by entering the project after exploration concept, initial
exploration and drill target identification work has largely been completed.
Going concern
At the year end the Company had a cash balance of US$1.68 million (2024:
US$0.98 million) and made a loss after income tax of US$3.35 million (2024:
loss of US$9.59 million).
The Directors have prepared cash flow forecasts for the Company covering the
period to 30 September 2026 and these demonstrate that the Company will
require further funding within the next 12 months from the date of approval of
the financial statements. As disclosed previously, in June 2022, the Company
entered into an agreement with CNOOC to drill an exploration well on the Topaz
prospect in China, by 12 June 2024, which includes a payment of US$250,000 to
CNOOC. It is estimated that the cost of drilling this well would be
approximately US$12 million. The Company did not commence the drilling of the
Topaz well by 12 June 2024 and therefore the permit expired on 12 June 2024.
On 24 August 2024, the Company received a letter of demand from CNOOC's
lawyers, King Wood & Mallesons, in relation to Block 29/11. The letter of
demand alleged, inter alia, that Empyrean has outstanding obligations under
the relevant Petroleum Contract entered into with CNOOC and that Empyrean has
failed to pay certain amounts that CNOOC consider due and payable under the
Petroleum Contract relating to the prospecting fee and exploration work. The
Company rejected the outstanding amounts claimed, which total US$12 million,
and responded to the letter of demand requesting clarification of the basis
for the demands made in the letter. The Company received an email from CNOOC
on 21 August 2025 which referred to the previous letter of demand and
reiterated CNOOC's position on this matter.
During and subsequent to the reporting period, the Company has raised equity
funds across multiple tranches, with a Placing, Subscription and Retail Offer
to raise US$1.592 million (£1.255 million) completed in November 2024,
Placings to raise US$0.840 million (£0.675 million) and US$0.787 million
(£0.625 million) completed over January 2025 and February 2025. a Placing and
Retail Offer to raise US$0.825 million (£0.661 million) completed in April
2025 and a further Placing to raise US$1.354 million (£1 million) completed
in July 2025.
However, in order to meet the repayment terms of the Convertible Note (which
was renegotiated in 2023), any further commitments at the Mako Gas Field
including reaching agreement on a settlement of existing claims from Conrad,
any potential further costs or payments to CNOOC in relation to Block 29/11,
and working capital requirements the Company is required to raise further
funding either through equity or the sale of assets and as at the date of this
report the necessary funds are not in place.
The Directors remain optimistic that its funding commitments will be met
should it be able to monetise its interest in Mako through the current sell
down process. Both Conrad and PLN ESI have now signed a binding GSA in July
2025. Conrad have indicated that the finalisation of the GSA with PLN ESI has
sparked renewed interest in the farm down process with Conrad having received
further non-binding offers and having entered into confidential discussions
with one party.
It is the belief of the Board that the completion of the GSA is a significant
value catalyst that is a necessary precursor to maximising the value of its
interest at the Mako Gas field through the current sell down process.
The Company therefore requires additional funding to fund the ongoing cash
needs of the business for the foreseeable future and may require further
funding should it be required to settle amounts claimed by CNOOC. The
Directors acknowledge that this funding is not guaranteed. These conditions
indicate that there is a material uncertainty which may cast significant doubt
over the Company's ability to continue as a going concern and, therefore, the
Company may be unable to realise its assets and discharge its liabilities in
the normal course of business.
Given the above and the Company's proven track record of raising equity funds
and advanced Mako sell-down process, which the Directors believe would be
sufficient to meet all possible funding needs as set out above, the Directors
have therefore concluded that it is appropriate to prepare the Company's
financial statements on a going concern basis and they have therefore prepared
the financial statements on a going concern basis.
The financial statements do not include the adjustments that would result if
the Company was unable to continue as a going concern.
Adoption of new and revised standards
(a) New and amended standards adopted by the Company:
There were no new standards effective for the first time for periods beginning
on or after 1 April 2024 that have had a significant effect on the Company's
financial statements.
(b) Standards, amendments and interpretations that are not yet effective and
have not been early adopted:
Any standards and interpretations that have been issued but are not yet
effective, and that are available for early application, have not been applied
by the Company in these financial statements. International Financial
Reporting Standards that have recently been issued or amended but are not yet
effective have been assessed by the Company and are not considered to have a
significant effect on the Company's financial statements.
Tax
The major components of tax on profit or loss include current and deferred
tax.
(a) Current tax
Tax is recognised in the income statement. The current tax charge is
calculated on the basis of the tax laws enacted at the statement of financial
position date in the countries where the Company operates.
(b) Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the statement of financial position differs to its
tax base. Recognition of deferred tax assets is restricted to those instances
where it is probable that taxable profit will be available, against which the
difference can be utilised. The amount of the asset or liability is
determined using tax rates that have been enacted or substantively enacted by
the reporting date and are expected to apply when the deferred tax
liabilities/(assets) are settled/(recovered). The Company has considered
whether to recognise a deferred tax asset in relation to carried-forward
losses and has determined that this is not appropriate in line with IAS 12 as
the conditions for recognition are not satisfied.
Foreign currency translation
Transactions denominated in foreign currencies are translated into US dollars
at contracted rates or, where no contract exists, at average monthly rates.
Monetary assets and liabilities denominated in foreign currencies which are
held at the year-end are translated into US dollars at year-end exchange
rates. Exchange differences on monetary items are taken to the Statement of
Comprehensive Income. Items included in the financial statements are measured
using the currency of the primary economic environment in which the Company
operates (the functional currency which is US dollars).
Oil and gas assets: exploration and evaluation
The Company applies the full cost method of accounting for Exploration and
Evaluation ("E&E") costs, having regard to the requirements of IFRS 6
Exploration for and Evaluation of Mineral Resources. Under the full cost
method of accounting, costs of exploring for and evaluating oil and gas
properties are accumulated and capitalised by reference to appropriate cash
generating units ("CGUs"). Such CGUs are based on geographic areas such as a
concession and are not larger than a segment. E&E costs are initially
capitalised within oil and gas properties: exploration and evaluation. Such
E&E costs may include costs of license acquisition, third party technical
services and studies, seismic acquisition, exploration drilling and testing,
but do not include costs incurred prior to having obtained the legal rights to
explore an area, which are expensed directly to the income statement as they
are incurred, or costs incurred after the technical feasibility and commercial
viability of extracting a mineral resource are demonstrable, which are
reclassified as development and production assets.
Property, Plant and Equipment ("PPE") acquired for use in E&E activities
are classified as property, plant and equipment. However, to the extent that
such PPE is consumed in developing an intangible E&E asset, the amount
reflecting that consumption is recorded as part of the cost of the intangible
E&E asset. Intangible E&E assets related to exploration licenses are
not depreciated and are carried forward until the existence (or otherwise) of
commercial reserves has been determined. The Company's definition of
commercial reserves for such purpose is proven and probable reserves on an
entitlement basis.
The ultimate recoupment of the value of exploration and evaluation assets is
dependent on the successful development and commercial exploitation, or
alternatively, sale, of the exploration and evaluation asset.
The carrying amounts of the Company's non-financial assets are reviewed at
each reporting date to determine whether there is any indication of
impairment. E&E assets are assessed for impairment if (i) sufficient data
exists to determine technical feasibility and commercial viability, or (ii)
facts and circumstances suggest that the carrying amount exceeds the
recoverable amount. If any such indication exists, then the asset's
recoverable amount is estimated.
For the purpose of impairment testing, assets are grouped together into CGU's.
The recoverable amount of an asset or a CGU is the greater of its value in use
and its fair value less costs of disposal.
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.
Value in use is generally computed by reference to the present value of the
future cash flows expected to be derived from production of proven and
probable reserves.
Fair value less costs of disposal is the amount obtained from the sale of an
asset or CGU in an arm's length transaction between knowledgeable, willing
parties, less the costs of disposal.
An impairment loss is recognised if the carrying amount of an asset or its CGU
exceeds its estimated recoverable amount. Impairment losses are recognised in
the consolidated statement of comprehensive loss.
Impairment losses recognised in respect of CGU's are allocated first to reduce
the carrying amount of any goodwill allocated to the units and then to reduce
the carrying amounts of the other assets in the unit (or group of units) on a
pro rata basis. Impairment losses recognised in prior years are assessed at
each reporting date for any indications that the loss has decreased or no
longer exists. An impairment loss is reversed if there has been a change in
the estimates used to determine the recoverable amount. An impairment loss is
reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depletion and
depreciation or amortization, if no impairment loss had been recognised.
Reversal of impairment losses are recognised in the consolidated statement of
comprehensive loss.
The key areas of judgement and estimation include:
· Recent exploration and evaluation results and resource estimates;
· Environmental issues that may impact on the underlying tenements;
and
· Fundamental economic factors that have an impact on the planned
operations and carrying values of assets and liabilities.
Other investments
In a situation where the Company has direct contractual rights to the assets,
and obligations for the liabilities, of an entity but does not share joint
control, the Company accounts for its interest in those assets, liabilities,
revenues and expenses in accordance with the accounting standards applicable
to the underlying line item. This is analogous to the "joint operator" method
of accounting outlined in IFRS 11 Joint arrangements.
Financial instruments
Financial assets and liabilities are recognised in the statement of financial
position when the Company becomes party to the contractual provision of the
instrument.
(a) Financial assets
The Company's financial assets consist of financial assets at amortised cost
(trade and other receivables, excluding prepayments, and cash and cash
equivalents). Financial assets at amortised cost are initially measured at
fair value and subsequently at amortised cost and attributable transaction
costs are included in the initial carrying value.
(b) Financial liabilities
All financial liabilities are classified as fair value through the profit and
loss or financial liabilities at amortised cost. The Company's financial
liabilities at amortised cost include trade and other payables and its
financial liabilities at fair value through the profit or loss include the
derivative financial liabilities. Financial liabilities at amortised cost, are
initially stated at their fair value and subsequently at amortised cost.
Interest and other borrowing costs are recognised on a time-proportion basis
using the effective interest method and expensed as part of financing costs in
the statement of comprehensive income. Derivative financial liabilities are
initially recognised at fair value of the date a derivative contract is
entered into and subsequently re-measured at each reporting date. The method
of recognising the resulting gain or loss depends on whether the derivative is
designated as a hedging instrument, and if so, the nature of the item being
hedged. The Company has not designated any derivatives as hedges as at 31
March 2024 or 31 March 2025.
(c) Impairment for financial instruments measured at amortised cost
Impairment provisions for financial instruments are recognised based on a
forward-looking expected credit loss model in accordance with IFRS 9. The
methodology used to determine the amount of the provision is based on whether
there has been a significant increase in credit risk since initial recognition
of the financial asset. For those where the credit risk has not increased
significantly since initial recognition of the financial asset, twelve month
expected credit losses along with gross interest income are recognised. For
those for which credit risk has increased significantly, lifetime expected
credit losses along with the gross interest income are recognised. For those
that are determined to be credit impaired, lifetime expected credit losses
along with interest income on a net basis are recognised.
Convertible loan notes ("CLNs")
The proceeds received on issue of convertible loan notes are allocated into
their liability and equity components. The amount initially attributed to the
debt component equals the discounted cash flows using a market rate of
interest that would be payable on a similar debt instrument that does not
include an option to convert. Subsequently, the debt component is accounted
for as a financial liability measured at amortised cost until extinguished on
conversion or maturity of the CLN.
The conversion option is determined by deducting the amount of the liability
component from the fair value of the compound instrument as a whole. Where
material, this is recognised and included as a financial derivative where the
convertible loan notes are issued in a currency other than the functional
currency of the Company because they fail the fixed for fixed criteria in IAS
32. The conversion option is recorded as a financial liability at fair value
through profit or loss and revalued at each reporting date.
In the case of a substantial modification, the existing liability is
derecognised, the modified liability is recognised at its fair value and the
difference between the carrying value of the old instrument and the modified
instrument is recognised as a gain or loss in the statement of comprehensive
income.
Share capital
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax, from the proceeds.
Share-based payments
The Company issues equity-settled share-based payments to certain employees.
Equity-settled share-based payments are measured at fair value at the date of
grant. The fair value determined at the grant date of the equity-settled
share-based payments is expensed over the vesting period, based on the
Company's estimate of shares that will eventually vest. The fair value of
options is ascertained using a Black-Scholes pricing model which incorporates
all market vesting conditions. Where equity instruments are granted to persons
other than employees, the income statement is charged with the fair value of
goods and services received.
The Company has also issued warrants on placements which form part of a unit.
These warrants do not fall into the scope of IFRS 2 Share Based Payments
because there is no service being provided and are assessed as either a
financial liability or equity. If they fail the fixed for fixed criteria in
IAS 32 Financial Instruments: Presentation, they are classified as financial
liability and measured in accordance with IFRS 9 Financial Instruments.
Critical accounting estimates and judgements
The Company makes judgements and assumptions concerning the future that impact
the application of policies and reported amounts. The resulting accounting
estimates calculated using these judgements and assumptions will, by
definition, seldom equal the related actual results but are based on
historical experience and expectations of future events. The judgements and
key sources of estimation uncertainty that have a significant effect on the
amounts recognised in the financial statements are discussed below.
Critical estimates and judgements
The following are the critical estimates and judgements that management has
made in the process of applying the entity's accounting policies and that have
the most significant effect on the amounts recognised in the financial
statements.
(a) Carrying value of exploration and evaluation assets (judgement)
The Company monitors internal and external indicators of impairment relating
to its exploration and evaluation assets. Management has considered whether
any indicators of impairment have arisen over certain assets relating to the
Company's exploration licenses. Management consider the exploration results to
date and assess whether, with the information available, there is any
suggestion that a commercial operation is unlikely to proceed. In addition,
management have considered the likely success of renewing the licences, the
impact of any instances of non-compliance with license terms and are
continuing with the exploration and evaluation of the sites. After considering
all relevant factors, management were of the opinion that no impairment was
required in relation to the costs capitalised to exploration and evaluation
assets except for the below (refer to Note 8 for further detail):
i) In January 2025 Empyrean acquired an option to participate in
Wilson River conventional oil prospect, situated close to existing
infrastructure in the prolific Cooper Basin in South-West Queensland,
Australia, and adjacent to several producing oil fields. Following the
securing of land access and completion of cultural heritage surveys and drill
preparation activities the Wilson River-1 well spudded on 14 March 2025. The
JV partners subsequently elected to conduct a DST on potential oil zone
identified from the drilling but unfortunately this confirmed the recovery of
formation water in the potential oil zone and as a result the well was plugged
and abandoned. Accordingly, the Company fully impaired the carrying value of
the asset at 31 March 2025.
ii) While the Company will continue to work with its joint venture
partners in reviewing and assessing any further technical and commercial
opportunities as they relate to the Sacramento Basin project, particularly in
light of strong gas prices for gas sales in the region, it has not budgeted
for further substantive exploration expenditure. Whilst the Company maintains
legal title it has continued to fully impair the carrying value of the asset
as at 31 March 2025.
iii) In light of current market conditions, little or no work has been
completed on the Riverbend or Eagle Oil projects in the year and no
substantial project work is forecast for either project in 2025/26 whilst the
Company focuses on other projects. Whilst the Company maintains legal title it
has continued to fully impair the carrying value of the asset as at 31 March
2025.
(b) Share based payments (estimate)
The Company has made awards of options and warrants over its unissued share
capital to certain employees as part of their remuneration package. Certain
warrants were issued to shareholders as part of their subscription for shares
and suppliers for services received.
The valuation of these options and warrants involves making a number of
critical estimates relating to price volatility, future dividend yields,
expected life of the options and forfeiture rates. These assumptions have been
described in more detail in Note 15.
(c) Valuation of embedded derivative - Convertible loan notes (estimate)
The Company has made estimates in determining the fair value of the embedded
conversion feature portion of the CLN. Fair value inputs are subject to market
factors as well as internal estimates. The Company considers historical trends
together with any new information to determine the best estimate of fair value
at the date of initial recognition and at each period end. The Company has
determined that the fair value of the embedded conversion feature is not
material and therefore has not been separately recognised, in line with the
Company's accounting policy. Refer to Note 13 for further detail on the CLN.
Note 2. Segmental Analysis
The Directors consider the Company to have three geographical segments, being
Australia (Wilson River project), Indonesia (Duyung PSC project) and North
America (Sacramento Basin project), which are all currently in the exploration
and evaluation phase. Prior year segment allocation included China (Block
29/11 project), which terminated during the current year. Unallocated results,
assets and liabilities represent corporate amounts that are not core to the
reportable segments. The Company's registered office is located in the United
Kingdom.
Basis of accounting for purposes of reporting by operating segments
(a) Accounting policies adopted
Unless otherwise stated, all amounts reported to the Board of Directors, being
the chief decision makers with respect to operating segments, are determined
in accordance with accounting policies that are consistent to those adopted in
the annual financial statements of the Company.
(b) Segment assets
Where an asset is used across multiple segments, the asset is allocated to
that segment that receives the majority asset economic value from that asset.
In the majority of instances, segment assets are clearly identifiable on the
basis of their nature and physical location.
(c) Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between
the incurrence of the liability and the operations of that segment. Borrowings
and tax liabilities are generally considered to relate to the Company as a
whole and are not allocated. Segment liabilities include trade and other
payables.
(d) Unallocated items
Unallocated results, assets and liabilities represent corporate amounts that
are not core to the reportable segments.
Details Australia Indonesia USA Unallocated Total
US$'000 US$'000 US$'000 US$'000 US$'000
31 March 2025
Unallocated corporate expenses - - - (934) (934)
Operating loss - - - (934) (934)
Finance expense - - - (1,210) (1,210)
Impairment of oil and gas properties (1,315) - (1) 111 (1,205)
Loss before taxation (1,315) - (1) (2,032) (3,349)
Tax expense in current year - - - (1) (1)
Loss after taxation (1,315) - (1) (2,033) (3,350)
Total comprehensive loss for the financial year (1,315) - (1) (2,033) (3,350)
Segment assets - 5,763 - - 5,763
Unallocated corporate assets - - - 1,731 1,731
Total assets - 5,763 - 1,731 7,494
Segment liabilities - 686 - - 686
Unallocated corporate liabilities - - - 11,377 11,377
Total liabilities - 686 - 11,377 12,063
Details China Indonesia USA Unallocated Total
US$'000 US$'000 US$'000 US$'000 US$'000
31 March 2024
Unallocated corporate expenses - - - (1,220) (1,220)
Operating loss - - - (1,220) (1,220)
Finance expense - - - (1,770) (1,770)
Impairment of oil and gas properties (6,562) - (33) - (6,595)
Loss before taxation (6,562) - (33) (2,990) (9,585)
Tax expense in current year - - - (1) (1)
Loss after taxation (6,562) - (33) (2,991) (9,586)
Total comprehensive loss for the financial year (6,562) - (33) (2,991) (9,586)
Segment assets - 5,355 - - 5,355
Unallocated corporate assets - - - 998 998
Total assets - 5,355 - 998 6,353
Segment liabilities - - - - -
Unallocated corporate liabilities - - - 10,712 10,712
Total liabilities - - - 10,712 10,712
Note 3. Operating Loss
2025 2024
US$'000 US$'000
The operating loss is stated after charging:
Foreign exchange loss (115) (123)
Impairment - exploration and evaluation assets (1,205) (6,595)
Auditor's Remuneration
PKF Littlejohn LLP and affiliated entities:
- Audit fees payable for the audit of the Company's annual accounts (75) -
- Other services relating to taxation compliance (30) -
BDO LLP (Company's previous auditor):
- Audit fees payable for the audit of the Company's annual accounts - (91)
- Other services relating to taxation compliance (24) (15)
Total auditor's remuneration (129) (106)
Note 4. Directors' Emoluments
Fees and Salary Share Based Payments in lieu of Fees Social Security Contributions Short-Term Employment Benefits (Total)
2025 2024 2025 2024 2025 2024 2025 2024
US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000 US$'000
Non-Executive Directors:
Patrick Cross 23 23 - - 2 2 25 25
John Laycock 14 14 - - 1 1 15 15
Executive Directors:
Thomas Kelly((a)) 255 216 29 64 - - 284 280
Gajendra Bisht((b)) 196 165 24 55 - - 220 220
Total 488 418 53 119 3 3 544 540
Capitalised to E&E((b))
(138) (124) - - - - (138) (124)
Total expensed
350 294 53 119 3 3 406 416
(a) Services provided by Apnea Holdings Pty Ltd, of which Mr Kelly is a
Director. Mr Kelly has not sold any shares during the reporting period. On 26
July 2024, Mr Kelly was issued 6,756,808 ordinary shares in lieu of cash
remuneration for the period April through to July 2024 totalling US$29,000,
under the Salary Sacrifice Share plan announced on 13 February 2024.
(b) Services provided by Topaz Energy Pty Ltd, of which Mr Bisht is a
Director. 75% of Mr Bisht's fees are capitalised to exploration and evaluation
expenditure (Note 8). On 26 July 2024, Mr Bisht was issued 5,803,560 ordinary
shares in lieu of cash remuneration for the period April through to July 2024
totalling US$24,000, under the Salary Sacrifice Share plan announced on 13
February 2024.
The average number of Directors was 4 during 2025 and 2024. The highest paid
director received US$284,000 (2024: US$280,000).
Note 5. Finance Expense
2025 2024
US$'000 US$'000
Convertible loan notes - interest and finance costs (Note 13) (1,210) (1,115)
Convertible loan notes - loss on substantial modification (Note 13) - (655)
Total finance expense (1,210) (1,770)
Note 6. Taxation
2025 2024
US$'000 US$'000
Opening balance - -
Total corporation tax receivable - -
Factors Affecting the Tax Charge for the Year
Loss from continuing operations (3,349) (9,585)
Loss on ordinary activities before tax (3,349) (9,585)
Loss on ordinary activities at US rate of 21% (2024: 21%) (703) (2,013)
Non-deductible expenses 523 1,567
Movement in provisions (40) 6
Carried forward losses on which no DTA is recognised 219 439
(1) (1)
Analysed as:
Tax expense on continuing operations (1) (1)
Tax expense in current year (1) (1)
Deferred Tax Liabilities
Temporary differences - exploration 1,700 1,691
Temporary differences - other 4 4
1,704 1,695
Offset of deferred tax assets (1,704) (1,695)
Net deferred tax liabilities recognised - -
Unrecognised Deferred Tax Assets 2025 2024
US$'000 US$'000
Tax losses((a)) 2,662 2,601
Temporary differences - exploration 4,120 4,310
Temporary differences - other 1,284 943
8,066 7,854
Offset of deferred tax liabilities (1,704) (1,695)
Net deferred tax assets not brought to account 6,362 6,159
(a) If not utilised, carried forward tax losses of approximately US$10.69
million (2024: US$10.43 million) begin to expire in the year 2034. Deferred
income tax assets are only recognised to the extent that it is probable that
future tax profits will be available against which deductible temporary
differences can be utilised.
Deferred tax assets and deferred tax liabilities are offset only if applicable
criteria to set off is met.
Note 7. Loss Per Share
The basic loss per share is derived by dividing the loss after taxation for
the year attributable to ordinary shareholders by the weighted average number
of shares on issue being 1,867,696,610 (2024: 973,223,181)
2025 2024
Loss per share from continuing operations
Loss after taxation from continuing operations US$(3,350,000) US$(9,586,000)
Loss per share - basic (0.18)c (0.98)c
Loss after taxation from continuing operations adjusted for dilutive effects
US$(3,350,000) US$(9,586,000)
Loss per share - diluted (0.18)c (0.98)c
For the current and prior financial years, the exercise of the options is
anti-dilutive and as such the diluted loss per share is the same as the basic
loss per share. Details of the potentially issuable shares that could dilute
earnings per share in future periods are set out in Note 15.
Note 8. Exploration and Evaluation Assets
2025 2024
US$'000 US$'000
Balance brought forward 5,355 10,635
Exploration expenditure 1,613 1,315
Impairment (1,205) (6,595)
Net book value 5,763 5,355
Exploration expenditure for the period includes an increase to trade and other
payables (Note 11) totalling $195,000, payments made in the period relating to
exploration expenditure total $1,418,000 as reflected in the Statement of Cash
Flows.
2025 2024
Project Operator Working Interest Carrying Value Carrying Value
US$'000 US$'000
Exploration and evaluation
Duyung PSC Conrad Asia Energy 8.5% 5,763 5,355
Wilson River((a)) Condor Energy 8.5% - -
Sacramento Basin((b)) Sacgasco 25-30% - -
Riverbend((c)) Huff Energy 10% - -
Eagle Oil Pool Development((c)) Strata-X 58.084% - -
5,763 5,355
Exploration and evaluation assets relate to the Company's interest in the
Duyung PSC. No indicators of impairment of these assets were noted.
(a) In January 2025 Empyrean acquired an option to participate in Wilson
River conventional oil prospect, situated close to existing infrastructure in
the prolific Cooper Basin in South-West Queensland, Australia, and adjacent to
several producing oil fields. Following the securing of land access and
completion of cultural heritage surveys and drill preparation activities the
Wilson River-1 well spudded on 14 March 2025. The JV partners subsequently
elected to conduct a DST on potential oil zone identified from the drilling
but unfortunately this confirmed the recovery of formation water in the
potential oil zone and as a result the well was plugged and abandoned.
Accordingly, the Company fully impaired the carrying value of the asset at 31
March 2025.
(b) While the Company will continue to work with its joint venture
partners in reviewing and assessing any further technical and commercial
opportunities as they relate to the Sacramento Basin project, particularly in
light of strong gas prices for gas sales in the region, it has not budgeted
for further substantive exploration expenditure. Whilst the Company maintains
legal title it has continued to fully impair the carrying value of the asset
at 31 March 2025.
(c) In light of current market conditions, little or no work has been
completed on the Riverbend or Eagle Oil projects in the year and no
substantial project work is forecast for either project in 2025/26 whilst the
Company focuses on other projects. Whilst the Company maintains legal title it
has continued to fully impair the carrying value of the asset at 31 March
2025.
Note 9. Interests in Other Entities
Duyung PSC
The Company is the owner of an 8.5% interest in the Duyung PSC. The Duyung PSC
partners have entered into a Joint Operating Agreement ("JOA"), which governs
the arrangement. Through the JOA, the Company has a direct right to the assets
of the venture, and direct obligation for its liabilities. Accordingly, the
Company accounts for its share of assets, liabilities and expenses of the
venture in accordance with the IFRSs applicable to the particular assets,
liabilities and expenses. The operator of the venture is West Natuna
Exploration Ltd ("WNEL"). WNEL is a company incorporated in the British Virgin
Islands and its principal place of business is Indonesia.
Note 10. Trade and Other Receivables
2025 2024
US$'000 US$'000
Other receivables 40 -
VAT receivable 16 17
Total trade and other receivables 56 17
Note 11. Trade and Other Payables
2025 2024
US$'000 US$'000
Trade payables 3,020 2,599
Accrued expenses 105 330
Total trade and other payables 3,125 2,929
Note 12. Provisions
2025 2024
US$'000 US$'000
Provision for Annual Leave - 189
Total Provisions - 189
All annual leave accrued was relinquished during the 2025 financial year.
Note 13. Convertible Loan Notes
2025 2024
US$'000 US$'000
(a) Convertible Loan Note - Modification 1
Opening balance - 4,076
Foreign exchange loss - 12
Extinguishment on substantial modification - (4,088)
Total Convertible Loan Note - Modification 1 - -
(b) Convertible Loan Note - Modification 2
Opening balance 7,594 -
Recognition of modified liability - 6,544
Loss on substantial modification - 655
Costs of finance 1,210 261
Foreign exchange loss 134 134
Total Convertible Loan Note - Modification 2 8,938 7,594
(a) In December 2021, the Company announced that it had entered into a
Convertible Loan Note Agreement with a Melbourne-based investment fund (the
"Lender"), pursuant to which the Company issued a convertible loan note to the
Lender and received gross proceeds of £4.0 million (the "Convertible Note").
As announced in May 2022, the Company and the Lender then amended the key
repayment terms of the Convertible Note, which at that time included the right
by the Lender to redeem the Convertible Note within 5 business days of the
announcement of the results of the Jade well at Block 29/11. The face value of
the loan notes was reset to £3.3m with interest to commence and accrue at
£330,000 per calendar month from 1 December 2022. The Convertible Note is
secured by a senior first ranking charge over the Company, including its 8.5%
interest in the Duyung PSC and Mako Gas Field.
(b) In May 2023, it was announced that the Company and the Lender had
reached agreement on amended key terms to the Convertible Note to allow the
sales process for Mako to complete. The key terms of the amendment are as
follows:
1. The parties agreed a moratorium of accrual interest on the
Convertible Note until 31 December 2023 - interest then accrued thereafter at
a rate of 20% p.a.;
2. The conversion price on the Convertible Note was reduced from 8p to
2.5p per share;
3. The face value of the Convertible Note was reduced from £5.28m
(accrued to the end of May 2023) to £4.6 million (to be repaid from
Empyrean's share of the proceeds from Mako sell down process); and
4. Empyrean will pay the Lender the greater of US$1.5 million or 15%
of the proceeds from its share in the Mako sell down process.
Note 14. Reconciliation of Net Loss
2025 2024
US$'000 US$'000
Loss before taxation (3,349) (9,585)
Share-based payments 77 212
Finance expense (non-cash) 1,210 1,770
Impairment - exploration and evaluation assets 1,205 6,595
Foreign exchange loss (non-cash) 90 123
Decrease in trade receivables relating to operating activities - 21
Increase in trade payables relating to operating activities 20 9
(Decrease)/increase in provisions (189) 29
Net cash outflow from operating activities before taxation (936) (826)
Payment of corporation tax (1) (1)
Net cash outflow from operating activities (937) (827)
Note 15. Share Capital
2025 2024
US$'000 US$'000
3,735,092,441 (2024: 1,280,801,707) ordinary shares of 0.01p each (2024: 0.2p 472 3,405
each)
2025 2024
No. No.
a) Number of Shares: Fully Paid Ordinary Shares of 0.01p each (2024:
0.2p each)
At the beginning of the reporting year 1,280,801,707 788,431,892
Shares issued during the year:
· Placements 2,430,167,332 469,753,783
· Salary sacrifice shares 14,123,402 19,728,532
· Advisor shares (equity issue cost) 10,000,000 2,887,500
Total at the end of the reporting year 3,735,092,441 1,280,801,707
2025 2024
US$'000 US$'000
b) Value of Shares: Fully Paid Ordinary Shares of 0.01p each (2024: 0.2p
each)
At the beginning of the reporting year 3,405 2,170
Shares issued during the year:
· Placements 306 1,179
· Salary sacrifice shares 2 49
· Advisor shares (equity issue cost) 1 7
· Capital reorganisation - 0.2p to 0.01p per share(1) (3,242) -
Total at the end of the reporting year 472 3,405
Notes:
1. On 6 November 2024, the Company announced it had raised £1.12
million in a Placement for 1,120,500,000 new ordinary shares at a price of
0.01p per share. As the Company is not permitted to by law to issue ordinary
shares at an issue price below the existing nominal value of 0.2p, the Company
completed a capital reorganisation of the ordinary share capital of the
Company to subdivide each existing ordinary share into one new ordinary share
of 0.01p each and one deferred share of 0.19p each. The capital reorganisation
was approved by shareholders at a General Meeting on 2 December 2024.
The Companies Act 2006 (as amended) abolishes the requirement for a company to
have an authorised share capital. Therefore the Company has taken advantage of
these provisions and has an unlimited authorised share capital.
Each of the ordinary shares carries equal rights and entitles the holder to
voting and dividend rights and rights to participate in the profits of the
Company and in the event of a return of capital equal rights to participate in
any sum being returned to the holders of the ordinary shares. There is no
restriction, imposed by the Company, on the ability of the holder of any
ordinary share to transfer the ownership, or any of the benefits of ownership,
to any other party.
Share options and warrants
The number and weighted average exercise prices of share options and warrants
are as follows:
Weighted Average Exercise Number Weighted Average Exercise Number
Price of Options Price of Options
and Warrants and Warrants
2025 2025 2024 2024
Outstanding at the beginning of the year £0.044 164,833,333 £0.137 6,558,333
Issued during the year(1) £0.001 15,000,000 £0.044 164,833,333
Expired during the year £0.015 (2,833,333) £0.137 (6,558,333)
Exercised during the year - - - -
Outstanding at the end of the year £0.005 177,000,000 £0.044 164,833,333
Incentive Warrants Incentive Warrants Incentive Warrants(1) Advisor Warrants Placement Warrants
Number of options remaining 5,000,000 5,000,000 15,000,000 12,000,000 140,000,000
Grant date 29/05/23 29/05/23 4/02/25 13/02/24 13/02/24
Expiry date 30/05/26 30/05/26 31/01/27 26/02/26 26/02/26
Share price £0.010 £0.010 £0.0015 £0.0044 N/A
Exercise price £0.015 £0.020 £0.0012 £0.0025 £0.005
Volatility 100% 100% 100% 94% N/A
Option life 3.00 3.00 2.00 2.00 2.50
Expected dividends - - - - -
Risk-free interest rate 4.45% 4.45% 4.17% 4.68% N/A
Expensed during year $'000 - - 16 - -
Notes:
1. On 30 January 2025, the Company announced the issue of 15,000,000
incentive warrants to Company Secretary Jonathan Whyte. The warrants have an
exercise price of 0.012p and expire on 31 January 2027. The warrants have been
valued at $16,000 using a Black-Scholes pricing model and expensed to the
statement of profit or loss and comprehensive income.
The options outstanding at 31 March 2025 have an exercise price in the range
of £0.0012 to £0.02 (2024: £0.0025 to £0.02) and a weighted average
remaining contractual life of 1.39 years (2024: 2.32 years). None of the
outstanding options and warrants at 31 March are exercisable at period end.
Notes:
1. On 30 January 2025, the Company announced the issue of 15,000,000
incentive warrants to Company Secretary Jonathan Whyte. The warrants have an
exercise price of 0.012p and expire on 31 January 2027. The warrants have been
valued at $16,000 using a Black-Scholes pricing model and expensed to the
statement of profit or loss and comprehensive income.
The options outstanding at 31 March 2025 have an exercise price in the range
of £0.0012 to £0.02 (2024: £0.0025 to £0.02) and a weighted average
remaining contractual life of 1.39 years (2024: 2.32 years). None of the
outstanding options and warrants at 31 March are exercisable at period end.
Note 16. Reserves
Reserve Description and purpose
Share premium Amount subscribed for share capital in excess of nominal value.
Warrant and share-based payment reserve Records items recognised as expenses on valuation of employee share options
and subscriber warrants.
Retained losses All other net gains and losses and transactions with owners not recognised
elsewhere.
Note 17. Related Party Transactions
Directors are considered Key Management Personnel for the purposes of related
party disclosure.
In the November 2024 equity placement that raised US$1.59 million, Mr John
Laycock subscribed for 10,000,000 new ordinary shares for a total
consideration of US$13,000.
In the January 2025 equity placement that raised US$0.84 million, Mr Tom Kelly
subscribed for 11,000,000 new ordinary shares for a total consideration of
US$14,000. Mr Gaz Bisht subscribed for 9,000,000 new ordinary shares for a
total consideration of US$11,000.
In January 2025 Empyrean acquired an option to participate in Wilson River
conventional oil prospect from Apnea Holdings Pty Ltd ("Apnea"). Apnea is a
company wholly owned by Mr Tom Kelly, who served as Managing Director of
Empyrean during the reporting period, and the acquisition of the option
therefore constituted a related party transaction pursuant to Rule 13 of the
AIM Rules for Companies. Under the terms of the acquisition of the option,
Apnea was to receive consideration in the form of new ordinary shares in
Empyrean representing 5 percent of the enlarged issued capital of Empyrean at
the time, but only in the event that the Wilson prospect is declared a
commercial discovery, which ultimately proved unsuccessful. The Company's
independent Directors (Gaz Bisht, John Laycock and Patrick Cross) considered,
having consulted with the Company's nominated adviser, Cavendish, that the
terms of the acquisition were fair and reasonable insofar as the Company's
shareholders are concerned.
There were no other related party transactions during the year ended 31 March
2025 other than those disclosed in Note 4.
Note 18. Financial Risk Management
The Company manages its exposure to credit risk, liquidity risk, foreign
exchange risk and a variety of financial risks in accordance with Company
policies. These policies are developed in accordance with the Company's
operational requirements. The Company uses different methods to measure and
manage different types of risks to which it is exposed. These include
monitoring levels of exposure to interest rate and foreign exchange risk and
assessment of prevailing and forecast interest rates and foreign exchange
rates. Liquidity risk is managed through the budgeting and forecasting
process.
Credit risk
Exposure to credit risk relating to financial assets arises from the potential
non-performance by counterparties of contract obligations that could lead to a
financial loss to the Company.
Risk is also minimised by investing surplus funds in financial institutions
that maintain a high credit rating.
Credit risk related to balances with banks and other financial institutions
are managed in accordance with approved Board policy. The Company's current
investment policy is aimed at maximising the return on surplus cash, with the
aim of outperforming the benchmark within acceptable levels of risk return
exposure and to mitigate the credit and liquidity risks that the Company is
exposed to through investment activities.
The following table provides information regarding the credit risk relating to
cash and money market securities based on Standard and Poor's counterparty
credit ratings.
2025 2024
US$'000 US$'000
Cash and cash equivalents
AA-rated 1,675 981
Total cash and cash equivalents 1,675 981
Price risk
Commodity price risk
The Company is not directly exposed to commodity price risk. However, there is
a risk that the changes in prevailing market conditions and commodity prices
could affect the viability of the projects and the ability to secure
additional funding from equity capital markets.
Liquidity risk
Liquidity risk arises from the possibility that the Company might encounter
difficulty in settling its debts or otherwise meeting its obligations related
to financial liabilities. The Company manages liquidity risk by maintaining
sufficient cash or credit facilities to meet the operating requirements of the
business and investing excess funds in highly liquid short-term investments.
The Company's liquidity needs can be met through a variety of sources,
including the issue of equity instruments and short or long-term borrowings.
Alternative sources of funding in the future could include project debt
financing and equity raisings, and future operating cash flow. These
alternatives will be evaluated to determine the optimal mix of capital
resources.
The following table details the Company's non-derivative financial instruments
according to their contractual maturities. The amounts disclosed are based on
contractual undiscounted cash flows. Cash flows realised from financial assets
reflect management's expectation as to the timing of realisation. Actual
timing may therefore differ from that disclosed. The timing of cash flows
presented in the table to settle financial liabilities reflects the earliest
contractual settlement dates.
Less than 6 months 6 months to 1 year 1 to 6 years Total
US$'000 US$'000 US$'000 US$'000
Convertible loan note (2025) 8,938 - - 8,938
Convertible loan note (2024) 7,594 - - 7,594
Trade and other payables (2025) 3,125 - - 3,125
Trade and other payables (2024) 2,929 - - 2,929
Capital
In managing its capital, the Company's primary objective is to maintain a
sufficient funding base to enable the Company to meet its working capital and
strategic investment needs. In making decisions to adjust its capital
structure to achieve these aims, through new share issues, the Company
considers not only its short-term position but also its long-term operational
and strategic objectives. The Company has a track record of successfully
securing additional funding as and when required from equity capital markets.
Foreign exchange risk
The Company operates internationally and is exposed to foreign exchange risk
arising from various currency exposures. Foreign exchange risk arises from
future commitments, assets and liabilities that are denominated in a currency
that is not the functional currency of the Company. Currently there are no
foreign exchange hedge programmes in place. However, the Company treasury
function manages the purchase of foreign currency to meet operational
requirements.
As at 31 March 2025, the Company's gross exposure to foreign exchange risk was
as follows:
2025 2024
US$'000 US$'000
Gross foreign currency financial assets
Cash and cash equivalents - GBP 1,673 977
Total gross exposure 1,673 977
The effect of a 10% strengthening of the USD against the GBP at the reporting
date on the GBP-denominated assets carried within the USD functional currency
entity would, all other variables held constant, have resulted in an increase
in post-tax loss for the year and decrease in net assets of US$167,300 (2024:
US$97,700).
Fair value
Fair values are those amounts at which an asset could be exchanged, or a
liability settled, between knowledgeable, willing parties in an arm's length
transaction. Fair values may be based on information that is estimated or
subject to judgement, where changes in assumptions may have a material impact
on the amounts estimated. Areas of judgement and the assumptions have been
detailed below.
The following methods and assumptions are used to determine the net fair
values of financial assets and liabilities:
§ Cash and short-term investments - the carrying amount approximates fair
value because of their short term to maturity
§ Trade receivables and trade creditors - the carrying amount approximates
fair value
No financial assets and financial liabilities are readily traded on organised
markets in standardised form.
Financial instruments by category are summarised below:
Financial Instruments by Category Fair Value Through Profit or Loss Amortised Cost
31 March 2025 31 March 2024 31 March 2025 31 March 2024
US$'000 US$'000 US$'000 US$'000
Financial assets
Cash and cash equivalents - - 1,675 981
Trade and other receivables - - 56 17
Total financial assets - - 1,731 998
Financial liabilities
Trade and other payables - - 3,125 2,929
Convertible loan notes - - 8,938 7,594
Total financial liabilities - - 12,063 10,523
Cash and cash equivalents
Cash and short-term deposits in the Statement of Financial Position comprise
cash at bank and in hand and short-term deposits with an original maturity of
three months or less. For the purposes of the Cash Flow Statement, cash and
cash equivalents consist of cash and cash equivalents as defined above and
which are readily convertible to a known amount of cash and are subject to an
insignificant risk of change in value.
Note 19. Events After the Reporting Date
Significant events post reporting date were as follows:
In April 2025, the Company completed a Placing and Retail Offer to raise
US$0.825 million (£0.661 million).
In May 2025, following drilling of the Wilson River-1 well, the JV partners in
the Wilson River-1 conducted a DST over the potential oil zone identified in
the Murta Formation from analysis of logs and hydrocarbon shows from the well.
The final well testing report however confirmed the recovery of formation
water in the potential oil zone and as a result the well was plugged and
abandoned the well and the rig been released.
In July 2025, the Company completed a Placing to raise US$1.354 million (£1
million).
In August 2025 the Company regrettably advised the market that Managing
Director/CEO Tom Kelly had passed away. The Board has appointed existing
Technical Director Gaz Bisht as interim CEO and will conduct a search process
for a permanent CEO in due course.
No other matters or circumstances have arisen since the end of the financial
year which significantly affected or could significantly affect the operations
of the Company, the results of those operations, or the state of affairs of
the Company in future financial years.
Note 20. Committed Expenditure
The Company does not have any further material financial commitments in
relation to its current exploration projects.
Note 21. Contingent Liabilities
On 24 August 2024, the Company received a letter of demand from CNOOC's
lawyers, King Wood & Mallesons, in relation to Block 29/11. The letter of
demand alleges, inter alia, that Empyrean has outstanding obligations,
totalling US$12 million, under the relevant Petroleum Contract entered into
with CNOOC and that Empyrean has failed to pay certain amounts that CNOOC
consider due and payable under the Petroleum Contract relating to the
prospecting fee and exploration work. The Company rejects the outstanding
amounts claimed and has responded to the letter of demand requesting
clarification of the basis for the demands made in the letter. At this time,
it is too early for the Company to form any opinion on the merits of any
demands made therein and the Company intends to continue dialogue with CNOOC
and, in line with the provisions of the Petroleum Contract, to settle amicably
through consultation any dispute arising in connection with the performance or
interpretation of any provision of the Petroleum Contract. The Company
received an email from CNOOC on 21 August 2025 which referred to the previous
letter of demand and reiterated CNOOC's position on this matter.
Note 22. Ultimate Controlling Party
The Directors consider that there is no ultimate controlling party of the
Company.
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