REG - Jersey Oil & Gas PLC - Final Results & Notice of AGM
28/05/2025 07:00
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RNS Number : 3118K Jersey Oil and Gas PLC 28 May 2025
28 May 2025
Jersey Oil and Gas plc
("Jersey Oil & Gas", "JOG" or the "Company")
Final Results for the Year Ended 31 December 2024
& Notice of Annual General Meeting
Jersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company
focused on the UK Continental Shelf region of the North Sea, is pleased to
announce its audited financial results for the year ended 31 December 2024 and
the date of its forthcoming Annual General Meeting ("AGM").
Further to the successful Greater Buchan Area ("GBA") farm-outs to NEO Energy
("NEO") and Serica Energy ("Serica") in 2023-24, the Company has strategically
positioned itself as one of the UK's leading UK quoted small-cap oil and gas
companies with a high-quality development portfolio and the funding to deliver
on its organic growth plans. Despite the uncertainties that have been
created within the UK oil and gas industry as a result of the Energy Profits
Levy ("EPL") and the on-going consultations that have been launched by the
Government, the Company remains well placed to execute upon its plans for
long-term value creation.
Buchan Redevelopment Project
Significant progress was made during 2024 to advance the Buchan Horst
("Buchan") redevelopment project towards sanction and Field Development Plan
("FDP") approval. Despite the project slowdown resulting from the various
regulatory consultations and the need to obtain sufficient clarity on the
outcome of these to finalise the way forward, three major workstreams have
been matured:
§ Detailed engagement has been on-going on the draft Buchan FDP with the
North Sea Transition Authority ("NSTA"). In addition, the Buchan "Field
Determination Area", that defines the maximum geological boundary of the
field, was agreed with the NSTA
§ The Environmental Impact Assessment ("EIA") for the project was issued to
the Offshore Petroleum Regulator for the Environment and Decommissioning
("OPRED") and various activities have been completed to progress the
regulatory evaluation.
§ Front-end engineering and design ("FEED") studies were completed, the
results of which have been used to define the details of the development
execution plan. The primary engineering studies covered the appropriate
solutions for the design of the wells, the subsea infrastructure and the
necessary modification and life extension works required on the planned
floating, production, storage and offloading ("FPSO") vessel. Offshore surveys
were also completed to gather the geotechnical and geophysical data required
for the subsea infrastructure and drilling rig contract tendering processes
and to inform the FPSO mooring design
With the announcements during the year of three Government consultations
concerning revised guidance for EIAs, the future for UK North Sea oil and gas
licensing and the future fiscal regime, the timeline for progressing the
project to the point of joint venture partner sanction and FDP approval was
naturally delayed. An extension to the Buchan P2498 licence was obtained from
the NSTA, which means that the joint venture has until 28 February 2027 to
obtain FDP approval. Given the uncertainty surrounding the timing of FDP
approval, the agreement for the acquisition of the "Western Isles" FPSO for
redeployment on the Buchan field was terminated in March 2025 by Dana
Petroleum ("Dana") after the longstop date in the agreement was passed. NEO,
the Buchan Operator, is a 23% owner of the vessel and the possibility remains
to recontract the vessel for deployment on Buchan.
Subject to satisfactory clarity being obtained from the Government
consultations, there are clear steps that need to be completed to move the
Buchan project forward to FDP approval and onward into the development
execution phase of activities. These are:
§ Reactivation and completion of the contract tender process for the main
drilling, subsea and FPSO modification workscopes
§ Re-contracting of the FPSO
§ Submission to OPRED of an updated EIA that incorporates the requirements of
the guidance resulting from the on-going consultation, which is expected to
principally concern the inclusion of Scope 3 emission forecasts for the
project
§ Joint venture finalisation of the FDP and approval of the NSTA
While the exact timeline for completing these activities has not yet been
finalised, it is likely that a positive outcome from the consultations would
lead to FDP approval being targeted during 2026.
As a result of the farm-out transactions with NEO and Serica, the Company is
carried for its 20% share of the costs to take Buchan through to FDP approval,
along with its share of the development costs included in the approved FDP. To
date, the financial benefit of this has totalled approximately $25 million in
cash milestone payments and expenditure carry. Further cash milestone
payments of $20 million are due upon Buchan FDP approval and receipt of the
associated regulatory and legal consents.
Strategic Focus
The Company's vision is centred on successfully growing the business in a
smart and sustainable way, developing important domestic energy supply in
response to society's energy needs and creating value for our stakeholders.
The organisation is "right sized" for the stage and scale of its activities
and maintains a nimble approach to advancing its key strategic objectives.
The Company remains sharply focused on unlocking the organic value of its
existing assets in the GBA, combined with the pursuit of accretive asset
acquisitions that bring cash flow, diversity and quality investment
opportunities into the portfolio. Such opportunities are thoroughly assessed
in terms of their potential strategic fit, being mindful of the quality and
unencumbered strengths of our existing portfolio.
Solid Outlook
Jersey Oil & Gas is well positioned to navigate through the current
headwinds facing the UK oil and gas industry. With total year-end cash
reserves of approximately £12.3 million and a current cash run rate of around
£1.5 million per annum, the business is financially secure and funded for
execution of the Buchan redevelopment programme. This backdrop provides an
attractive springboard from which to realise the full potential and ambitions
of the business for delivering shareholder value.
Andrew Benitz, CEO of Jersey Oil & Gas, commented:
"2024 was effectively a year of two halves. A significant amount of work was
completed on progressing the Buchan redevelopment project to joint venture
sanction and the securing of the necessary regulatory approvals. However, this
progress was hampered in the latter part of the year as the Government
announced its intention to launch various consultations that will determine
the future direction of the UK's oil and gas industry.
Given the significant contribution that the industry can make to UK economic
growth, jobs, tax revenues and both the energy transition and energy security,
all of which are priorities for the current Government, we are optimistic that
such consultations will provide sensible answers to the issues being
considered. In the meantime, the Company remains in a solid financial position
and we continue to evaluate opportunities to enhance the long-term value of
the business."
Annual General Meeting
The Company also announces that its 2024 Annual Report and Financial
Statements together with the AGM Notice and associated Form of Proxy are now
available on the Company's website (www.jerseyoilandgas.com) and will be
posted today to those shareholders who have elected to receive hard copy
shareholder communications from the Company.
The Company will hold its AGM in respect of its financial year ended 31
December 2024 on 27 June 2025 at 10.00 a.m. at the offices of Strand Hanson
Limited, 26 Mount Row, London W1K 3SQ.
Enquiries:
Jersey Oil and Gas plc Andrew Benitz c/o Camarco:
020 3757 4980
Strand Hanson Limited James Harris Tel: 020 7409 3494
Matthew Chandler
James Bellman
Zeus Capital Limited Simon Johnson Tel: 020 3829 5000
Cavendish Capital Markets Limited Neil McDonald Tel: 020 7220 0500
Camarco Billy Clegg Tel: 020 3757 4980
Rebecca Waterworth
- Ends -
Notes to Editors:
Jersey Oil & Gas (AIM: JOG) is a UK energy company focused on creating
shareholder value through the development of oil and gas assets and the
execution of accretive transactions.
The Company has a focused asset portfolio centred on developing homegrown
North Sea resources that support the UK's energy requirements as it
transitions towards net zero. JOG holds a 20% interest in each of licences
P2498 (Blocks 20/5a, 20/5e and 21/1a) and P2170 (Blocks 20/5b and 21/1d)
located in the UK Central North Sea and referred to as the "Greater Buchan
Area" ("GBA"). Licence P2498 contains the Buchan Horst ("Buchan") oil field
and J2 oil discovery and licence P2170 contains the Verbier oil discovery.
JOG's strategy is focused on unlocking the organic value of its GBA assets,
combined with the pursuit of asset acquisitions that bring cash flow,
diversity and quality investment opportunities into the portfolio. The
Company's Board and Executive team have a wealth of experience in managing and
growing publicly listed energy companies and a strong track-record of value
creation in the UK North Sea oil and gas sector.
Forward-Looking Statements
This announcement may contain certain forward-looking statements that are
subject to the usual risk factors and uncertainties associated with an oil and
gas business. Whilst the Company believes the expectations reflected herein
to be reasonable in light of the information available to it at this time, the
actual outcome may be materially different owing to factors beyond the
Company's control or otherwise within the Company's control but where, for
example, the Company decides on a change of plan or strategy.
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
(EU) No. 596/2014 as it forms part of United Kingdom domestic law by virtue of
the European Union (Withdrawal) Act 2018, as amended by virtue of the Market
Abuse (Amendment) (EU Exit) Regulations 2019.
CHAIRMAN & CHIEF EXECUTIVE OFFICER'S REPORT
Following the end of a highly successful year for the Company in 2023, we
started 2024 with the completion of our second Greater Buchan Area ("GBA")
farm-out transaction, with a further 30% interest in the GBA licences being
sold to Serica Energy ("Serica"). This represented a key moment for the
business, as it provided the Company with full funding for the planned
redevelopment of the Buchan Horst ("Buchan") field. In addition, the
transaction delivered an upfront cash payment of nearly £6 million plus
potential future contingent cash payments. Completing this farm-out was a
major step forward towards securing access to the significant value associated
with a full carry for our remaining share of the Buchan project through to
first production for our shareholders.
Buchan Project
During the year, a significant amount of work was completed by NEO Energy
("NEO"), as operator of the GBA licences, on maturing the requisite
engineering and plans for the sanction of the Buchan project. The plans have
been centred on the redeployment of the "Western Isles" Floating Production,
Storage and Offloading vessel ("FPSO") as a production processing facility
located over the Buchan field, with up to five gas-lifted production wells,
supported by two water injection wells, connected via subsea infrastructure to
the vessel. The FPSO solution involves the hydrocarbons produced from the
field being processed offshore, with the oil exported to market via shuttle
tankers and gas via a pipeline connection to nearby infrastructure. As a
result of the farm-out agreements with NEO and Serica, we have been fully
carried for our share of the approximately £24 million that has been spent to
date on the current phase of activities by the Buchan joint venture.
Regulatory Engagement
Following submission of a draft Field Development Plan ("FDP") to the North
Sea Transition Authority ("NSTA") at the end of 2023, the Operator has been
actively engaging with the regulator throughout the year to assist with the
evaluation of the development plan. In addition, the specification of the
"Field Determination Area", which defines the maximum geological boundary of
the field, has been agreed with the NSTA and this forms part of the required
inputs to the formal FDP approval process.
As part of the preparation for obtaining regulatory approval of the Buchan
FDP, an Environmental Impact Assessment ("EIA") was issued to the Offshore
Petroleum Regulator for the Environment and Decommissioning ("OPRED") in early
2024. The EIA public consultation process was undertaken during the first
quarter of the year and subsequent engagement with OPRED has progressed the
required regulatory evaluation.
However, in September 2024, OPRED paused the EIA review process when the UK
Government launched a consultation on new environmental guidance for oil and
gas developments. This arose from the Supreme Court's "Finch" ruling,
requiring regulators to consider the impact of combustion of produced
hydrocarbons, Scope 3 emissions, in EIAs for new projects. The consultation
was closed in January 2025, and it is expected that the Government will
provide new guidance imminently. Based on the details within the Government
consultation, it is expected that the Buchan EIA will require a second public
consultation that examines the Scope 3 emissions associated with its
development. Accordingly, preparatory work has been undertaken to prepare a
revised EIA and allow submission to OPRED in a timely manner once the new
guidance is published.
As a result of the environmental consultation timeline, along with the
uncertainties created by instability in the Government's fiscal regime for
North Sea oil and gas companies, completion of the pre-sanction project
activities was materially slowed down by the Buchan operator in the second
half of 2024. In terms of the fiscal landscape, in October 2024 the
Government announced an increase in the tax rate on North Sea oil and gas
companies to 78%, the extension of the Energy Profits Levy ("EPL") to March
2030, the removal of investment allowances associated with the EPL and its
intention to launch a consultation on the long-term fiscal regime applicable
to the industry. Furthermore, at the same time the Government also announced
its intention to undertake a consultation on the future North Sea licensing
regime. Satisfactory clarity on the results of these various consultations
is naturally required to facilitate sanctioning of the Buchan project.
Given the unavoidable delay to progressing the approval process for the Buchan
project, the joint venture partners submitted an application to the NSTA for a
licence extension in 2024. We were pleased to announce earlier in the year
that the Second Term of the P2498 Buchan licence has been extended by 24
months to 28 February 2027. This extension was requested to provide the
licensees with the time required to finalise a FDP for the Buchan field.
Development Activities & Status
During the first half of the year, the main project workstreams were centred
on completion of the engineering and subsurface studies required to enable
preparation of the development plan for sanction by the partners and
regulatory authorities, such that the project is capable of being moved into
the execution phase of activities. Front End Engineering and Design ("FEED")
studies were completed with input from several specialist engineering
companies. These studies have been key to defining appropriate solutions for
the design of the wells, the subsea infrastructure and the necessary FPSO
modification and life extension works. Alongside this activity, the Operator
also completed offshore surveys to gather the geotechnical and geophysical
data required for the subsea and drilling rig contract tendering processes and
to inform the FPSO mooring design.
Since the start of the project slowdown in the latter part of 2024, the focus
of activities has largely been on closing out various technical and commercial
matters that feed into the details of the development execution plan. These
have included the agreement of commercial terms for utilisation of gas export
infrastructure and continued engagement with wind farm developers regarding
the future electrification potential of the FPSO, along with detailed
engagement with Dana Petroleum ("Dana") on a multitude of pre-handover FPSO
workstreams. This activity was matured to the point of obtaining clarity on
the outstanding work required on the vessel to facilitate handover in the
future, once completed.
While the majority of the required "Western Isles" FPSO inspection,
verification and pre-transfer work has been completed by Dana to satisfy the
main technical requirements of the sale and purchase agreement that was
executed in 2023, the agreement longstop date was reached at the end of
February 2025 before all work was completed. Dana subsequently terminated
the agreement with NEO. The vessel remains anchored in Scapa Flow, in the
Orkney Isles, with the Western Isles joint venture partnership responsible for
on-going costs. NEO, the Buchan Operator, is a 23% owner of the vessel and
the possibility remains to recontract the vessel for deployment on Buchan.
There continues to be strong engagement between the Buchan joint venture
partners, particularly around the key strategic engineering decisions and
plans for the development. This engagement represents an important element
of the assurance and peer review process that both JOG and Serica are
undertaking to properly participate in the project sanction and regulatory
approval processes.
Buchan is widely regarded as one of the largest remaining undeveloped UK North
Sea oil and gas opportunities. As such, it provides a route to meaningful
growth in the maturing portfolios of our joint venture partners.
Solid Financial Position
Financially the Group is strongly positioned with total cash reserves at the
end of 2024 of £12.3 million and no debt.
The total cash running cost of the business has been reduced by approximately
50% to an expected £1.5 million in 2025 because of actions taken by the
Company following the slowdown in activities on the Buchan project. As a
result of the terms of the farm-out agreements executed with NEO and Serica,
the Company's 20% share of the Buchan project expenditure is fully carried by
our two joint venture partners, based on the approved FDP budget. A further
$20 million cash payment is payable under the terms of the farm-out agreements
following approval of the Buchan FDP by the NSTA and receipt of the associated
regulatory and legal consents.
A full Financial Review is provided on page 8 of the full Annual Report.
Developing Homegrown Energy
The UK's Climate Change Committee's ("CCC") Seventh Carbon Budget, published
on 26 February 2025, forecasts that the UK will consume between 13-15 billion
barrels of oil equivalent ("boe") between now and 2050, with 4 billion boe
produced domestically. This forecast represents the necessity of continued
oil production in our journey to achieving net zero emissions and demonstrates
why the Government is right to say that the UK's North Sea oil and gas
industry will continue to play an essential role in meeting our energy needs
for decades to come.
Opponents of our industry believe that curtailing supply will reduce
consumption, but the CCC's forecast demonstrates the reality of our energy
needs. As do the latest Government figures for the fourth quarter of 2024,
which showed that whilst domestic production of primary oil fell by 9%, demand
fell by only 0.4%. The gap between supply and demand is therefore met by
imports, produced at higher carbon intensities, that now contribute two thirds
of the UK's trade deficit.
If we are to become less reliant on fossil fuels, then we must reduce demand
through changes in behaviour by both business and the public. This will
require national level investment in large-scale infrastructure projects, but
also individual households to commit their resources to new technologies.
Investment in increased renewable electricity generation and an enhanced
distribution grid will be for nothing if the public cannot in tandem afford to
buy new electric vehicles or heat pumps for their homes. We therefore need a
strong economy if the net zero objectives are to be met in the desired
timescales.
The CCC's forecast shows the contribution that our domestic industry can
deliver to the UK economy. Unlocking additional resources from waters around
the coast of Britain could add £150bn of gross value to the UK economy, on
top of the £200bn of economic value expected from current plans, according to
the OEUK Business Outlook Report 2025. In addition, the 2025 Business
Outlook produced by Offshore Energies UK reports further upside on offer with
new investment in the sector potentially delivering an additional 3 billion
boe. In the right regulatory and fiscal environment, the industry can supply
half of the UK's oil domestically as we work towards delivering net zero by
2050.
Government must recognise that a continuation in the prevailing negative
sentiment towards the industry of the last few years, coupled with a punitive
EPL, means that delivery of the baseline 4 billion boe is by no means certain
and the benefits of the potential upside will never be realised. The Office
for Budget Responsibility, for example, reports a 26% reduction in North Sea
investment since the introduction of the EPL, and we are witnessing the early
cessation of production from numerous assets across the basin. This trend
needs to be reversed.
A reset is therefore required, one that recognises and supports the role our
domestic oil and gas industry can play in providing our vital energy needs and
strengthening our economic outlook. We welcome and are encouraged by the
Government's recent consultations on the future of the North Sea and on the
introduction of a fairer fiscal mechanism for the industry. We have worked
with our peers and industry associations in responding to the consultations,
highlighting the contribution the Buchan development can deliver; namely £1
billion investment into the UK economy and direct job creation. This will
stimulate a supply chain that needs support now if it is to invest and expand
its offerings to the technologies of the future, facilitating investment in
increased renewables infrastructure and injecting hundreds of millions into
the UK Treasury.
The UK therefore has an opportunity to show true climate leadership, by
demonstrating that through collaboration between Government, oil and gas and
clean energy developers, we can maximise production of our own natural
resources, delivering them at lower carbon intensities than imports and in
turn strengthening our economy and facilitating investment in new
technologies. Government can show this leadership through the introduction
of a sustainable fiscal and licensing regime, that encourages investment in
the oil and gas sector, slows or even reverses the rate of production decline
and defers decommissioning. In doing so we can enhance our energy security
and bolster our economy.
Summary and Outlook
We will continue to work tirelessly in our efforts to drive the Buchan
development to a successful conclusion over the months ahead, alongside
setting the right long-term future direction for the business. JOG has been
at the forefront of championing a fully integrated production hub energy
project that aligns with the industry's decarbonisation strategy. We believe
there is more for us to do as we grow our business in the North Sea. In
order to both accelerate potential value creation from the Company's existing
UK tax allowances of over $100 million and bring cash flow into the business,
a number of potential UK producing asset acquisitions are being actively
evaluated and we continue to be proactive in our efforts to grow the business
further for the collective benefit of our shareholders and other stakeholders.
The JOG team has demonstrated through our achievements to date that the
Company has the skills and capabilities to deliver upon the strategic
imperatives of a well-defined business plan. Accordingly, as we shape our
next steps, we will draw upon those key resources to maximise the long-term
value of the business for our shareholders. We greatly appreciate and value
the support and patience we have received from our shareholders at this
complicated time for the industry.
Les Thomas,
Non-Executive
Chairman
Andrew Benitz,
Chief Executive Officer
27 May 2025
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2024
Continuing operations Note 2024 2023
£ £
Administrative expenses (4,079,726) (5,706,675)
Operating loss 7 (4,079,726) (5,706,675)
Finance income 6 542,637 114,825
Finance expense 6 (3,185) (3,503)
Loss before tax 7 (3,540,274) (5,595,353)
Tax 8 - -
Loss for the year (3,540,274) (5,595,353)
Total comprehensive loss for the year (net of tax) (3,540,274) (5,595,353)
Total comprehensive loss for the year attributable to:
Owners of the parent (3,540,274) (5,595,353)
Loss per share expressed in pence per share:
Basic 9 (10.84) (17.19)
Diluted 9 (10.84) (17.19)
The notes are an integral part of these financial statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2024
Note 2024 2023
£ £
Non-current assets
Intangible assets - exploration & development costs 10 11,741,406 16,421,797
Property, plant and equipment 11 1,675 -
Right-of-use assets 12 83,797 139,661
Deposits 17,466 2,692
11,844,344 16,564,150
Current assets
Trade and other receivables 13 86,732 478,234
Cash and cash equivalents 14 6,185,872 5,482,935
Term deposits 15 6,150,000 5,000,000
12,422,604 10,961,169
Total assets 24,266,948 27,525,319
Equity
Called up share capital 16 2,574,529 2,574,529
Share premium account 110,535,059 110,535,059
Share options reserve 20 4,504,673 3,890,986
Accumulated losses (93,349,289) (89,960,102)
Reorganisation reserve (382,543) (382,543)
Total equity 23,882,429 26,657,929
Liabilities
Non-current liabilities
Lease liabilities 12 14,585 71,309
14,585 71,309
Current liabilities
Trade and other payables 17 313,211 740,927
Lease liabilities 12 56,723 55,154
369,934 796,081
Total liabilities 384,519 867,390
Total equity and liabilities 24,266,948 27,525,319
The financial statements were approved by the Board of Directors and
authorised for issue on 27 May 2025. They were signed on its behalf by Graham
Forbes - Chief Financial Officer.
Graham Forbes
Chief Financial Officer 27 May 2025
Company Registration Number: 07503957
The notes are an integral part of these financial statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2024
Called up Share premium account Share options reserve Accumulated Reorganisation Total equity
share capital £ £ losses reserve £
£ £ £
At 1 January 2023 Note 2,573,395 110,309,524 2,566,343 (84,600,273) (382,543) 30,466,446
Loss and total comprehensive loss for the year
- - - (5,595,353) - (5,595,353)
Transactions with owners in their capacity as owners
Issue of share capital 1,134 225,535 - - - 226,669
Expired share options 20 - - - - - -
Lapsed share options 20 - - (148,178) 148,178 - -
Exercised share options 20 - - (87,346) 87,346 - -
Share based payments 20 - - 1,560,167 - - 1,560,167
At 31 December 2023 and 2,574,529 110,535,059 3,890,986 (89,960,102) (382,543) 26,657,929
1 January 2024
Loss and total comprehensive loss for the year
- - - (3,540,274) - (3,540,274)
Transactions with owners in their capacity as owners
Expired share options 20 - - (151,087) 151,087 - -
Share based payments 20 - - 764,774 - - 764,774
At 31 December 2024 2,574,529 110,535,059 4,504,673 (93,349,289) (382,543) 23,882,429
The following describes the nature and purpose of each reserve within owners'
equity:
Reserve Description and purpose
Called up share capital Represents the nominal value of shares issued
Share premium account Amount subscribed for share capital in excess of nominal value
Share options reserve Represents the accumulated balance of share-based payment charges recognised
in respect of share options granted by the Company less transfers to
accumulated deficit in respect of options exercised or cancelled/lapsed
Accumulated losses Cumulative net gains and losses recognised in the Consolidated Statement of
Comprehensive Income
Reorganisation reserve Amounts resulting from the restructuring of the Group at the time of the
Initial Public Offering (IPO) in 2011
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2024 2023
Note £ £
Cash flows from operating activities
Cash used in operations 22 (3,359,763) (4,185,049)
Interest paid 6 (3,185) (3,503)
Net cash used in operating activities (3,362,948) (4,188,552)
Cash flows from investing activities
Farm-out proceeds 5,519,216 9,103,944
Interest received 6 490,674 114,825
Purchase of tangible assets 11 (2,363) -
Purchase of intangible assets 10 (736,487) (1,013,081)
Investing cash flows before movements in capital balances 5,271,040 8,205,688
Changes in Term deposits:
15 (1,150,000) (5,000,000)
Net cash from investing activities 4,121,040 3,205,688
Cash flows from financing activities
Principal elements of lease payments (55,155) (113,550)
Net cash (used in)/generated from financing activities (55,155) (113,550)
Decrease in cash and cash equivalents 22 702,937 (1,096,414)
Cash and cash equivalents at beginning of year 14 5,482,935 6,579,349
Cash and cash equivalents at end of year 14 6,185,872 5,482,935
The notes are an integral part of these financial statements
Notes to the Consolidated Financial Statements
For the year ended 31 December 2024
1. General information
Jersey Oil and Gas plc (the "Company") and its subsidiaries (together, the
"Group") are involved in the upstream oil and gas business in the UK.
The Company is a public limited company incorporated and domiciled in England
& Wales and quoted on AIM, a market operated by London Stock Exchange plc.
The address of its registered office is 71-75 Shelton Street, Covent Garden,
London WC2H 9JQ.
2. Material accounting policies
The principal accounting policies applied in the preparation of these
consolidated financial statements are set out below. These policies have been
consistently applied to all the periods presented, unless otherwise stated.
Basis of Accounting
The consolidated financial statements of Jersey Oil and Gas Plc as of 31
December 2024 and for the year then ended (the "consolidated financial
statements") were prepared in accordance with UK-adopted International
Accounting Standards in conformity with the requirements of the Companies Act
2006 (the "Companies Act").
The financial statements have been prepared under the historic cost
convention, except as disclosed in the accounting policies below. All amounts
disclosed in the financial statements and notes have been rounded off to the
nearest one thousand pounds unless otherwise stated.
Going Concern
The Group has sufficient resources to meet its liabilities as they fall due
for a period of at least 12 months after the date of issue of these financial
statements. The Group has cash reserves following the successful farm-out of
the GBA licences and receipt of initial funds resulting from the two
transactions with NEO and Serica. The Group now has a fully funded 20%
interest in the on-going Buchan redevelopment project. Other work that the
Group is undertaking in respect of the GBA licenses and surrounding areas is
modest relative to its current cash reserves. The Company's current cash
reserves are therefore expected to more than exceed its estimated cash
outflows in all reasonable scenarios for at least 12 months following the date
of issue of these financial statements. Even in a scenario where the Buchan
redevelopment did not progress for any reason and any future instalment
payments were not realised the Group already has in place a cost structure and
expenditure profile that enables the business to continue beyond the next 12
months solely from utilisation of its existing cash resources. The directors
have also considered the risk associated with contractual arrangements
associated with the farm-outs and are satisfied that the Group is not exposed
to any contractual commitments which could impact on the Group's going concern
status over the next 12 months. Based on these circumstances, the directors
have considered it appropriate to adopt the going concern basis of accounting
in preparing the consolidated financial statements.
New and amended standards adopted by the Group. The Group has applied the
following amendments for the first time for the annual reporting period
commencing 1 January 2024:
• Classification of Liabilities as Current or Non-current
(Amendments to IAS 1)
• Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
• Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7)
• Non-current Liabilities with Covenants (Amendments to IAS 1)
The amendments listed above did not have any impact on the amounts recognised
in prior periods and are not expected to significantly affect the current or
future periods.
New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and
interpretations have been published that are not mandatory for 31 December
2024 reporting periods and have not been early adopted by the Group. These
standards, amendments or interpretations are not expected to have a material
impact on the entity in the current or future reporting periods or on
foreseeable future transactions.
• Lack of Exchangeability (Amendments to IAS 21)
• Amendments to the Classification and Measurement of Financial
Instruments (Amendments
• to IFRS 9 and 7)
• IFRS 18 'Presentation and Disclosure in Financial Statements'
• IFRS 19 'Subsidiaries without Public Accountability: Disclosures'
Significant Accounting Judgements and Estimates
The preparation of the financial statements requires management to make
estimates and assumptions that affect the reported amounts of expenses, assets
and liabilities at the date of the financial statements. If in the future such
estimates and assumptions, which are based on management's best judgement at
the date of the financial statements, deviate from the actual circumstances,
the original estimates and assumptions will be modified as appropriate in the
period in which the circumstances change. The Group's accounting policies make
use of accounting estimates and judgements in the following areas:
• The judgement of the existence of impairment triggers (note 10).
• The estimation of share-based payment costs (note 20).
• The judgement associated with the treatment of farm-out
transactions.
Impairments
The Group tests its capitalised exploration licence costs for impairment when
indicators, further detailed below under 'Exploration and Evaluation Costs' as
set out in IFRS 6, suggest that the carrying amount exceeds the recoverable
amount which is inherently judgmental. An impairment loss is recognised for
the amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount of the Cash Generating Unit is the higher of an
asset's fair value less costs of disposal and value in use. The Group assessed
that there were no impairment triggers during the year.
Share-Based Payments
The Group currently has several share schemes that give rise to share-based
payment charges. The charge to operating profit for these schemes amounted to
£764,774 (2023: £1,560,167). Estimates and judgements for determining the
fair value of the share options are required. For the purposes of the
calculation, a Black-Scholes option pricing model has been used. Based on
experience, it has been assumed that options will be exercised, on average, at
the mid-point between vesting and expiring. The share price volatility used in
the calculation is based on the actual volatility of the Group's shares since
1 January 2017. The risk-free rate of return is based on the implied yield
available on zero coupon gilts with a term remaining equal to the expected
lifetime of the options at the date of grant. Estimates are also used when
calculating the likelihood of share options vesting given the vesting
conditions of time and performance on the options granted. Share options
that expire unexercised are accounted for by reversing any previously
recognised expense. Expired options do not result in a cash outflow and have
no further impact on the Group's financial position beyond the reversal of
previously recognised charges.
Farm-out transactions
Determining the value of the consideration received for a farm-out disposal of
assets with proven resources can be challenging. This is even more the case
for assets which are farmed out in the pre proven resources phase. A
judgement has been made that for such farm-outs only cash payments received
will be recognised and no recognition will be made of any consideration in
respect of the future value of work to be performed and carried by the farmee.
Rather, the Group will carry the remaining interest at the previous full
interest cost reduced by the amount of any cash consideration received from
entering into the agreement. The effect will be that there is no gain
recognised on the farm-out unless the cash consideration received exceeds the
carrying value of the entire asset held. Upon FID, the Group will start
recognising both cash payments received and the value of future carried assets
to be received and will recognise a future asset receivable with an
accompanying gain in the income statement for the equity share of the asset
disposed of.
Basis of Consolidation
(a) Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern
their financial and operating policies generally accompanying a shareholding
of more than one half of the voting rights. The existence and effect of
potential voting rights that are currently exercisable or convertible are
considered when assessing whether the Group controls another entity. The Group
also assesses the existence of control where it does not have more than 50% of
the voting power but is able to govern the financial and operating policies by
virtue of de facto control. De facto control may arise in circumstances where
the size of the Group's voting rights relative to the size and dispersion of
holdings of other Shareholders give the Group the power to govern the
financial and operating policies.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from the date the Group
ceases to have control.
(b) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of
control are accounted for as equity transactions - that is, as transactions
with the owners in their capacity as owners. The difference between fair value
of any consideration paid and the relevant share acquired of the carrying
value of net assets of the subsidiary is recorded in equity. Gains or losses
on disposals to non-controlling interests are also recorded in equity.
(c) Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is
remeasured to its fair value at the date when control is lost, with the change
in carrying amount recognised in profit or loss. The fair value is the initial
carrying amount for the purposes of subsequently accounting for the retained
interest as an associate, joint venture, or financial asset. In addition, any
amounts previously recognised in other comprehensive income in respect of that
entity are accounted for as if the Group had directly disposed of the related
assets or liabilities. This may mean that amounts previously recognised in
other comprehensive income are reclassified to profit or loss.
Inter-company transactions, balances, income and expenses on transactions
between Group companies are eliminated on consolidation. Profits and losses
resulting from inter-company transactions that are recognised in assets are
also eliminated on consolidation. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted
by the Group.
The following subsidiaries which are included in these consolidated accounts
are exempt from the requirements of the Companies Act relating to the audit of
their accounts under section 479A of the Companies Act 2006:
Subsidiary Registration number Country of Incorporation
Jersey North Sea Holdings Ltd 06451896 England & Wales
Jersey Petroleum Ltd 06490608 England & Wales
Jersey V&C Ltd 10853027 England & Wales
Sunny Day 123 Ltd* 15207887 England & Wales
Jersey E & P Ltd** SC319467 Scotland
Jersey Oil Ltd** SC319461 Scotland
Jersey Exploration Ltd** SC319459 Scotland
Jersey Oil & Gas E & P Ltd 115157 Jersey
*Dissolved 25 February 2025
**Dissolved 11 February 2025
Acquisitions, Asset Purchases and Disposals
Transactions involving the purchase of an individual field interest, farm-ins,
farm-outs or acquisitions of exploration and evaluation licences for which a
development decision has not yet been made that do not qualify as a business
combination, are treated as asset purchases. Accordingly, no goodwill or
deferred tax arises. The purchase consideration is allocated to the assets and
liabilities purchased on an appropriate basis. Proceeds on disposal (including
farm-ins/farm-outs) are applied to the carrying amount of the specific
intangible asset or development and production assets disposed of, and any
surplus is recorded as a gain on disposal in the Consolidated Statement of
Comprehensive Income.
Acquisitions of oil and gas properties are accounted for under the purchase
method where the acquisitions meet the definition of a business combination.
The Group applies the acquisition method of accounting to account for business
combinations. The consideration transferred for the acquisition of a
subsidiary is the fair value of the assets transferred, the liabilities
incurred, and the equity interests issued by the Group. The consideration
transferred includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are
measured initially at their fair value at the acquisition date. The Group
recognises any non-controlling interest in the acquiree on an
acquisition-by-acquisition basis, either at fair value or at the
non-controlling interest's proportionate share of the recognised amounts of
the acquiree's identifiable net assets.
Acquisition related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair
value of the acquirer's previously held equity interest in the acquiree is
remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred on a business combination by
the Group is recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is deemed to be
an asset or liability are recognised in accordance with IFRS 9 either in
profit or loss or as a change to other comprehensive income. Contingent
consideration that is classified as equity is not remeasured, and its
subsequent settlement is accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of the
consideration transferred and the fair value of the non-controlling interest
over the net identifiable assets acquired and liabilities assumed. If this
consideration is lower than the fair value of the net assets of the subsidiary
acquired, the difference is recognised in profit or loss.
Exploration and Evaluation Costs
The Group accounts for oil and gas exploration and evaluation costs using IFRS
6 "Exploration for and Evaluation of Mineral Resources". Such costs are
initially capitalised as Intangible Assets and include payments to acquire the
legal right to explore, together with the directly related costs of technical
services and studies, seismic acquisition, exploratory drilling and testing.
The Group only capitalises costs as intangible assets once the legal right to
explore an area has been obtained. The Group assesses the intangible assets
for indicators of impairment at each reporting date.
Potential indicators of impairment include but are not limited to:
a. the period for which the Group has the right to explore in the specific
area has expired during the period or will expire soon and is not expected to
be renewed.
b. substantive expenditure on further exploration for and evaluation of
oil and gas reserves in the specific area is neither budgeted nor planned.
c. exploration for and evaluation of oil and gas reserves in the specific
area have not led to the discovery of commercially viable quantities of oil
and gas reserves and the entity has decided to discontinue such activities in
the specific area.
d. sufficient data exist to indicate that, although a development in the
specific area is likely to proceed, the carrying amount of the exploration and
evaluation asset is unlikely to be recovered in full from successful
development or by sale.
The Group analyses the oil and gas assets into cash generating units (CGUs)
for impairment and reporting purposes. In the event an impairment trigger is
identified the Group performs a full impairment test for the CGU under the
requirements of IAS 36 Impairment of assets. An impairment loss is recognised
for the amount by which the exploration and evaluation assets' carrying amount
exceeds their recoverable amount. The recoverable amount is the higher of the
exploration and evaluation assets' fair value less costs of disposal and value
in use.
As at 31 December 2024, the carrying value of intangible assets was £11.7m,
as per Note 10 'Intangible Assets'. The Group considered other factors which
could give rise to an impairment trigger such as commodity prices, licence
expiration dates, budgeted spend and movements in estimated recoverable
reserves. Based on this assessment, no impairment triggers existed in
relation to exploration assets as of 31 December 2024. For more detail on
the current position, please refer to note 23, Post Balance Sheet Events.
Property, Plant and Equipment
Property, plant and equipment is stated at historic purchase cost less
accumulated depreciation. Asset lives and residual amounts are reassessed each
year. Cost includes the original purchase price of the asset and the costs
attributable to bringing the asset to its working condition for its intended
use.
Depreciation on these assets is calculated on a straight-line basis as
follows:
Computer & office equipment 3 years
Leases
Assets and liabilities arising from a lease are initially measured on a
present value basis. Lease liabilities include the net present value of the
following lease payments:
• fixed payments (including in-substance fixed payments), less any
lease incentives receivable;
• variable lease payments that are based on an index or a rate,
initially measured using the index or rate as at the commencement date;
• amounts expected to be payable by the Group under residual value
guarantees;
• the exercise price of a purchase option if the Group is reasonably
certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term
reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the
lease. If that rate cannot be readily determined, which is generally the case
for leases in the Group, the lessee's incremental borrowing rate is used,
being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset
in a similar economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group where possible, uses
recent third-party rates provided by banks or financial institutions as a
starting point, adjusted to reflect changes in financing conditions since
third party financing was received.
Lease payments are allocated between principal and finance cost. The finance
cost is charged to profit or loss over the lease period to produce a constant
periodic rate of interest on the remaining balance of the liability for each
period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less
any lease incentives received;
• any initial direct costs; and
• restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's
useful life and the lease term on a straight-line basis. If the Group is
reasonably certain to exercise a purchase option, the right-of-use asset is
depreciated over the underlying asset's useful life.
Payments associated with short-term leases of equipment and vehicles and all
leases of low-value assets are recognised on a straight-line basis as an
expense in profit or loss. Short-term leases are leases with a lease term of
12 months or less. Low-value assets comprise any lease with a value of £5,000
or less.
Joint Ventures
The Group participates in joint venture/co-operation agreements with strategic
partners, these are classified as joint operations. The Group accounts for its
share of assets, liabilities, income and expenditure of these joint venture
agreements and discloses the details in the appropriate Statement of Financial
Position and Statement of Comprehensive Income headings in the proportion that
relates to the Group per the joint venture agreement.
Investments
Fixed asset investments in subsidiaries are stated at cost less accumulated
impairment in the Company's Statement of Financial Position and reviewed for
impairment if there are any indications that the carrying value may not be
recoverable.
Financial Instruments
Financial assets and financial liabilities are recognised in the Group and
Company's Statement of Financial Position when the Group becomes party to the
contractual provisions of the instrument. The Group does not have any
derivative financial instruments.
Cash and cash equivalents include cash in hand and deposits held on call with
banks with a maturity of three months or less.
Term deposits are those amounts held by third parties on behalf of the Group
and are not available for the Group's use; these are recognised separately
from cash and cash equivalents on the balance sheet.
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less any
expected credit loss. The Group recognises an allowance for expected credit
losses (ECLs) for all debt instruments not held at fair value through profit
or loss. ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the Group
expects to receive, discounted at an approximation of the original effective
interest rate. The carrying amount of the asset is reduced with an allowance
account, and the amount of the loss will be recognised in the Consolidated
Statement of Comprehensive Income within administrative expenses. Subsequent
recoveries of amounts previously provided for are credited against
administrative expenses in the Consolidated Statement of Comprehensive Income.
Trade payables are stated initially at fair value and subsequently measured at
amortised cost.
Offsetting of Financial Instruments
Financial assets and financial liabilities are offset, and the net amount is
reported in the Consolidated Statement of financial position if there is a
currently enforceable legal right to offset the recognised amounts and there
is an intention to settle on a net basis, or to realise the assets and settle
the liabilities simultaneously.
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit. Deferred taxation liabilities are provided, using the liability
method, on all taxable temporary differences at the reporting date. Such
assets and liabilities are not recognised if the temporary difference arises
from goodwill or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred income tax assets are recognised to the extent that it is probable
that future taxable profits will be available against which the temporary
differences can be utilised. The carrying amount of deferred tax assets is
reviewed at each reporting date.
Current Tax
The current income tax charge is calculated based on the tax laws enacted or
substantively enacted at the end of the reporting period in the countries
where Jersey Oil and Gas Plc and its subsidiaries operate and generate taxable
income. We periodically evaluate positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to interpretation.
Provisions are established where appropriate based on amounts expected to be
paid to the tax authorities.
Current tax is payable based upon taxable profit for the year. Taxable profit
differs from net profit as reported in the Statement of Comprehensive Income
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. Any Group liability for current tax is calculated using tax rates
that have been enacted or substantively enacted by the reporting date.
Foreign Currencies
The functional currency of the Company and its subsidiaries is Sterling.
Monetary assets and liabilities in foreign currencies are translated into
Sterling at the rates of exchange ruling at the reporting date. Transactions
in foreign currencies are translated into Sterling at the rate of exchange
ruling at the date of the transaction. Gains and losses arising on
retranslation are recognised in the Consolidated Statement of Comprehensive
Income for the year.
Employee Benefit Costs
Payments to defined contribution retirement benefit schemes are recognised as
an expense when employees have rendered service entitling them to
contributions.
Share-Based Payments
Equity settled share-based payments to employees and others providing similar
services are measured at the fair value of the equity instruments at the grant
date. The total amount to be expensed is determined by reference to the fair
value of the options granted using the Black-Scholes Model:
· including any market performance conditions (for example, an
entity's share price);
· excluding the impact of any service and non-market performance
vesting conditions (for example, profitability, sales growth targets and
remaining an employee of the entity over a specified time-period); and
· including the impact of any non-vesting conditions (for example,
the requirement for employees to save).
The fair value determined at the grant date of the equity settled share-based
payments is expensed on a straight-line basis over the vesting period, based
on the Group's estimate of equity instruments that will eventually vest, with
a corresponding increase in equity. At the end of each reporting period, the
Group revises its estimate of the number of equity instruments expected to
vest. The impact of the revision of the original estimates, if any, is
recognised in profit or loss such that the cumulative expense reflects the
revised estimate, with a corresponding adjustment to the equity settled
employee benefits reserve.
Equity settled share-based payment transactions with parties other than
employees are measured at the fair value of the goods or services received,
except where that fair value cannot be estimated reliably, in which case they
are measured at the fair value of the equity instruments granted, measured at
the date the entity obtains the goods, or the counterparty renders the
service.
Exercise proceeds net of directly attributable costs are credited to share
capital and share premium.
Contingent Liabilities & Provisions
In accordance with IAS 37, provisions are recognised where a present
obligation exists to third parties because of a past event, where a future
outflow of resources with economic benefits is probable and where a reliable
estimate of that outflow can be made. If the criteria for recognising a
provision are not met, but the outflow of resources is not remote, such
obligations are disclosed in the notes to the consolidated financial
statements (see note 19). Contingent liabilities are only recognised if the
obligations are more certain, i.e. the outflow of resources with economic
benefits has become probable and their amount can be reliably estimated.
Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new ordinary shares or
options are shown in equity as a deduction, net of tax, from the proceeds.
3. Segmental reporting
Operating segments are reported in a manner consistent with the internal
reporting provided to the Board of Directors.
The Board considers that the Group operates in a single segment, that of oil
and gas exploration, appraisal, development and production, in a single
geographical location, the North Sea of the United Kingdom.
The Board is the Group's chief operating decision maker within the meaning of
IFRS 8 "Operating Segments".
During 2024 and 2023 the Group had no revenue.
4. Financial risk management
The Group's activities expose it to financial risks and its overall risk
management programme focuses on minimising potential adverse effects on the
financial performance of the Group. The Company's activities are also exposed
to risks through its investments in subsidiaries and it is accordingly exposed
to similar financial and capital risks as the Group.
Risk management is carried out by the Directors, and they identify, evaluate,
and address financial risks in close co-operation with the Group's management.
The Board provides written principles for overall risk management, as well as
written policies covering specific areas, such as mitigating foreign exchange
risks and investing excess liquidity.
Credit Risk
The Group's credit risk primarily relates to its trade receivables.
Responsibility for managing credit risks lies with the Group's management.
A debtor evaluation is typically obtained from an appropriate credit rating
agency. Where required, appropriate trade finance instruments such as letters
of credit, bonds, guarantees and credit insurance will be used to manage
credit risk.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its
financial obligations as they become due. The Group manages its liquidity
through continuous monitoring of cash flows from operating activities, review
of actual capital expenditure programmes, and managing maturity profiles of
financial assets and financial liabilities.
Capital Risk Management
The Group seeks to maintain an optimal capital structure. The Group considers
its capital to comprise both equity and net debt.
The Group monitors its capital mix needs and suitability dependent upon the
development stage of its asset base. Earlier stage assets (pre-production)
typically require equity rather than debt given the absence of cash flow to
service debt. As the asset mix becomes biased towards production then
typically more debt is available. The Group seeks to maintain progress in
developing its assets in a timely fashion. With the completion of the NEO
Energy farm-out in 2023 and the Serica Energy farm-out during the year, the
Group expects 's that the introduction of these two industry partners will
deliver sufficient cash to progress its assets to first oil in return for a
capital (equity) contribution via the farm-outs. As the GBA development
project progresses towards first oil, debt will become available and may be
sought to enhance equity returns. As at 31 December 2024 there are no
borrowings within the Group (2023: Nil).
The Group monitors its capital structure by reference to its net debt to
equity ratio. Net debt to equity ratio is calculated as net debt divided by
total equity. Net debt is calculated as borrowings less cash and cash
equivalents. Total equity comprises all components of equity.
Maturity analysis of financial assets and liabilities
Financial assets
2024 2023
£ £
Up to 3 months 18,798 410,011
3 to 6 months - -
Over 6 months 17,466 -
36,264 410,011
Financial liabilities
2024 2023
£ £
Up to 3 months 281,102 613,067
3 to 6 months - -
Over 6 months - -
281,102 613,067
Lease liabilities
2024 2023
£ £
Up to 3 months 14,585 14,585
3 to 6 months 14,585 14,585
Over 6 months 43,755 102,095
72,925 131,265
5. Employees and Directors
2024 2023
£ £
Wages and salaries 2,356,684 2,860,964
Social security costs 229,520 289,654
Share-based payments (note 20) 764,774 1,560,167
Other pension costs 304,165 265,538
3,655,143 4,976,323
Other pension costs include employee and Group contributions to money purchase
pension schemes.
The average monthly number of employees during the year was as follows:
2024 2023
No. No.
Directors 5 5
Employees - Finance 1 1
Employees - Technical 5 8
11 14
Directors Remuneration: 2024 2023
£ £
Directors' remuneration 1,162,791 1,174,317
Payment in lieu of notice 14,150 -
Directors' pension contributions to money purchase schemes 36,102 39,047
Share-based payments (note 20) 447,420 853,551
Benefits 9,377 9,585
1,669,840 2,076,500
The average number of Directors to whom retirement benefits were accruing was
as follows:
2024 2023
No. No.
Money purchase schemes 2 2
Information regarding the highest paid Director is as follows:
2024 2023
£ £
Aggregate emoluments and benefits 507,798 520,586
Share-based payments 211,884 324,902
Pension contributions 22,917 26,667
742,599 872,155
Key management compensation
Key management includes Directors (Executive and Non-Executive) and an adviser
to the Board. The compensation paid or payable to key management for
employee services is shown below:
2024 2023
£ £
Wages and short-term employee benefits 1,186,318 1,193,901
Share-based payments (note 20) 447,420 853,551
Pension Contributions 36,102 39,047
1,669,840 2,086,499
6. Net Finance Income
2024 2023
£ £
Finance income:
Interest received 542,637 114,825
542,637 114,825
Finance costs:
Interest paid - -
Interest on lease liability (3,185) (3,503)
(3,185) (3,503)
Net finance income 539,452 111,322
7. Loss Before Tax
The loss before tax is stated after charging/(crediting):
2024 2023
£ £
Depreciation - tangible assets 688 10,203
Depreciation - right-of-use asset 55,864 94,988
Auditors' remuneration - audit of parent company and consolidation 84,325 85,000
Auditors' remuneration - audit of subsidiaries - -
Auditors' remuneration - non-audit work - -
Foreign exchange gain (3,792) (26,774)
8. Tax
Reconciliation of tax charge
2024 2023
£ £
Loss before tax (3,540,274) (5,595,353)
Tax at the standard rate of 25% avg. (2023: 23.5%avg.) (885,069) (1,314,908)
Capital allowances in excess of depreciation 14,002 (671,854)
Expenses not deductible for tax purposes and non-taxable income 193,551 370,622
Deferred tax asset not recognised 677,516 1,616,140
Total tax expense reported in the Consolidated Statement of Comprehensive - -
Income
No liability to UK corporation tax arose on ordinary activities for the year
ended 31 December 2024, or for the year ended 31 December 2023.
In April 2023, the rate of corporation tax rose to 25% for profits over
£250,000.
The Group has not recognised a deferred tax asset due to the uncertainty over
when the tax losses can be utilised. At the year end, the usable tax losses
within the Group were approximately £62 million (2023: £63 million).
During the year the Company transferred tax losses as a component of the farm
out to Serica Energy.
9. Loss Per Share
Basic loss per share is calculated by dividing the losses attributable to
ordinary shareholders by the weighted average number of ordinary shares
outstanding during the year.
Diluted loss per share is calculated using the weighted average number of
shares adjusted to assume the conversion of all dilutive potential ordinary
shares.
There is no difference between dilutive and ordinary earnings per share due to
there being a loss recorded in the year.
The share options (note 20) issued in the Group that would potentially dilute
earnings per share in the future have not been included in the calculation of
diluted loss per share as their effect would be anti-dilutive.
Loss attributable Weighted
to ordinary shareholders average number Per share
£ of shares Amount
pence
Year ended 31 December 2024
Basic and Diluted EPS
Basic & Diluted (3,540,274) 32,667,467 (10.84)
Year ended 31 December 2023
Basic and Diluted EPS
Basic & Diluted (5,595,353) 32,557,964 (17.19)
10. Intangible assets
Exploration
costs
£
Cost
At 1 January 2023 24,548,122
Additions 1,152,860
Farm-out (9,103,944)
At 31 December 2023 16,597,038
Additions 838,825
Farm-out (5,519,216)
At 31 December 2024 11,916,647
Accumulated Amortisation
At 1 January 2023 175,241
Charge for the year -
At 31 December 2023 175,241
At 31 December 2024 175,241
Net Book Value
At 31 December 2024 11,741,406
At 31 December 2023 16,421,797
At the start of 2023 the Company owned 100% interests in two licenses; P2498
containing the Buchan field and J2 Discovery, and P2170 containing the Verbier
discovery.
At the end of 2023 the costs incurred in acquiring and advancing the licenses
to their current state was £25,700,982 (2022: £24,548,122). During 2023 a
farm-out of a 50% interest in both licenses to NEO was completed and in 2024 a
farm out of a 30% interest in both licenses to Serica was completed. Both
deals had similar terms whereby in exchange for the farm in, the respective
parties agreed to a series of cash payments and both a pre-development and
development carry on the Buchan Redevelopment project. In accordance with our
farm-out policy for assets at this stage of development (please refer to
section on Acquisitions, Asset Purchases and Disposals on page 56 of the full
Annual Report) the cash proceeds of £5,519,216 in 2024 and £9,103,944 in
2023 have both been deducted from the carrying value of the assets.
In line with the requirements of IFRS 6, we have considered whether there are
any indicators of impairment on the exploration and development assets. Based
on our assessment, as at 31 December 2024 there are not deemed to be
indicators that the licences are not commercial and that the carrying value of
£11,741,406 continues to be supported by ongoing exploration and development
work on the licence areas with no impairments considered necessary. For
further information please refer to note 23, Post balance sheet events, for
discussion of potential future impairment triggers.
11. Property, Plant and Equipment
Computer and office equipment
£
Cost
At 1 January 2023 228,447
Additions -
At 31 December 2023 228,447
Additions 2,363
At 31 December 2024 230,810
Accumulated Depreciation
At 1 January 2023 218,244
Charge for the year 10,203
At 31 December 2023 228,447
Charge for the year 688
At 31 December 2024 229,135
Net Book Value
At 31 December 2024 1,675
At 31 December 2023 -
12. Leases
Amounts Recognised in the Statement of financial position
2024 2023
£ £
Right-of-use Assets
Buildings 83,797 139,661
83,797 139,661
Lease liabilities
Current 56,723 55,154
Non-Current 14,585 71,309
71,308 126,463
The liabilities were measured at the present value of the remaining lease
payments, discounted using the lessee's incremental borrowing rate as of 1
January 2019. The weighted average lessee's incremental borrowing rate applied
to the lease liabilities on 1 January 2019 was 3%. The borrowing rate applied
for 2024 remained at 3% and the leases relate to office space.
A new lease agreement was entered into in June 2023 for a total of 9 years
with break clauses after 3 and 6 years. The interest rate implicit in the
agreement was 3% over the Bank of England's base rate. Given the 3-year break
clause and the future plans for the business it was deemed appropriate to
recognise the liability relating to a 3-year period. This lease was in
relation to an office in Jersey.
Amounts Recognised in the Statement of comprehensive income
2024 2023
£ £
Depreciation charge of right-of-use asset
Buildings 55,864 94,988
55,864 94,988
Interest expenses (included in finance cost) (3,185) (3,503)
13. Trade and other receivables
2024 2023
£ £
Current:
Other receivables 29 328,166
Value added tax 18,769 81,846
Prepayments 67,934 68,222
86,732 478,234
Included within other receivables in 2023 is an amount of £233,055 relating
to monies outstanding from the exercise of share options which was received
during 2024.
14. Cash and cash equivalents
2024 2023
£ £
Cash in bank accounts 6,185,872 5,482,935
The cash balances are placed with creditworthy financial institutions with a
minimum rating of 'A'.
15. Term deposits
2024 2023
£ £
Maturing within ten months 6,150,000 5,000,000
Term deposits are placed with a creditworthy financial institution with a
minimum rating of 'A'.
16. Called up share capital
Issued: Nominal 2024 2023
Number: Class value £ £
32,667,627 (2023: 32,667,627) Ordinary 1p 326,676 325,552
2,271,694 (2023: 2,271,694) Deferred shares 99p 2,248,977 2,248,977
Ordinary shares have a par value of 1p. They entitle the holder to participate
in dividends, distributions or other participation in the profits of the
Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting, in
person or by proxy, is entitled to one vote, and on a poll each share is
entitled to one vote.
Included in the above 2023 ordinary shares are 1,667 which were committed to
be issued at the year-end but not allotted until January 2024.
In 2023, 113,334 new ordinary shares were issued to satisfy the exercise of
share options which raised £233,053 (gross) which was not paid at the 2023
year end and was included in other receivables. All other issued share
capital was fully paid.
17. Trade and other payables
2024 2023
£ £
Current:
Trade payables 44,028 345,814
Accrued expenses 237,075 256,283
Other payables - 10,970
Taxation and Social Security 32,108 127,860
313,211 740,927
18. Lease liabilities
2024 2023
£ £
Non-Current
Lease Liabilities 14,585 71,309
14,585 71,309
19. Contingent Liabilities
i. 2015 settlement agreement with Athena Consortium: In accordance with
a 2015 settlement agreement reached with the Athena Consortium, although
Jersey Petroleum Ltd remains a Licensee in the joint venture, any past or
future liabilities in respect of its interest can only be satisfied from the
Group's share of the revenue that the Athena Oil Field generates and up to 60
per cent. of net disposal proceeds or net petroleum profits from the Group's
interest in the P2170 licence which is the only remaining asset still held
that was in the Group at the time of the agreement with the Athena Consortium
who hold security over this asset. Any future repayments, capped at the unpaid
liability associated with the Athena Oil Field, cannot be calculated with any
certainty, and any remaining liability still in existence once the Athena Oil
Field has been decommissioned will be written off. A payment was made in 2016
to the Athena Consortium in line with this agreement following the farm-out of
P2170 (Verbier) to Equinor and the subsequent receipt of monies relating to
that farm-out.
ii. Equinor UK Limited: During 2020, JOG announced that it had entered
into a conditional Sale and Purchase Agreement ("SPA") to acquire operatorship
of, and an additional 70% working interest in Licence P2170 (Blocks 20/5b and
21/1d) from Equinor UK Limited ("Equinor"), this transaction completed in May
2020. The consideration for the acquisition consisted of two milestone
payments, which will be accounted for in line with the cost accumulation
model, as opposed to contingent liabilities:
· US$3 million upon sanctioning by the UK's North Sea Transition
Authority ("NSTA") of a Field Development Plan ("FDP") in respect of the
Verbier Field; and
· US$5 million upon first oil from the Verbier Field.
The earliest of the milestone payments in respect of the acquisition is not
currently anticipated being payable before the start of 2028.
iii. ITOCHU Corporation and Japan Oil, Gas and Metals National
Corporation: During 2020, JOG announced that it had entered into a conditional
Sale and Purchase Agreement ("SPA") to acquire the entire issued share capital
of CIECO V&C (UK) Limited, which was owned by ITOCHU Corporation and Japan
Oil, Gas and Metals National Corporation, this transaction completed in April
2021. The acquisition was treated as an asset acquisition rather than a
business combination due to the nature of the asset acquired. There were no
assets or liabilities acquired other than the 12% interest in licence P2170
(Verbier). The consideration for the acquisition included a completion payment
of £150k and two future milestone payments, which are considered contingent
liabilities:
· £1.5 million in cash upon consent from the UK's North Sea
Transition Authority ("NSTA") for a Field Development Plan ("FDP") in respect
of the Verbier discovery in the Upper Jurassic (J62-J64) Burns Sandstone
reservoir located on Licence P2170; and
· £1 million in cash payable not later than one year after first
oil from all or any part of the area which is the subject of the FDP.
The earliest of the milestone payments in respect of the acquisition is not
currently anticipated being payable before the start of 2028.
20. Share based payments
The Group operates several share options schemes. Options are exercisable at
the prices set out in the table below. Options are forfeited if the employee
leaves the Group through resignation or dismissal before the options vest.
Equity settled share-based payments are measured at fair value at the date of
grant and expensed on a straight-line basis over the vesting period, based
upon the Group's estimate of the number of shares that will eventually vest.
The Group's share option schemes are for Directors, Officers and employees.
The charge for the year was £764,774 (2023: £1,560,167) and details of
outstanding options are set out in the table below.
Date of Grant Exercise price (pence) Vesting date Expiry date No. of shares for which options outstanding at 1 Jan 2024 Options issued Options Exercised Options lapsed No. of shares for which options outstanding at 31 Dec 2024
/non vesting during the year
Jan-18 200 Jan-21 Jan-25 360,000 - - - 360,000
Jan-18 200 Jan-18 Jan-23* 56,666 - - (56,666) -
Jan-18 200 Jan-19 Jan-23* 56,667 - - (56.667) -
Jan-18 200 Jan-20 Jan-23* 56,667 - - (56,667) -
Nov-18 172 Nov-21 Nov-25 150,000 - - - 150,000
Jan-19 175 Jan-20 Jan-26 88,333 - - - 88,333
Jan-19 175 Jan-21 Jan-26 88,333 - - - 88,333
Jan-19 175 Jan-22 Jan-26 68,333 - - - 68,333
Jan-19 175 Jan-20 Jan-24 11,667 - - (11,667) -
Jan-19 175 Jan-21 Jan-24 11,667 - - (11,667) -
Jan-19 175 Jan-22 Jan-24 11,667 - - (11,667) -
Jun-19 200 Jan-21 Jun-29 120,000 - - - 120,000
Jun-19 110 Jun-19 Jun-29 40,000 - - - 40,000
Jan-21 155 Jan-22 Jan-28 83,333 - - - 83,333
Jan-21 155 Jan-23 Jan-28 75,000 - - - 75,000
Jan-21 155 Jan-24 Jan-28 60,000 - - - 60,000
Mar-21 210 Mar-22 Mar-26 11,666 - - - 11,666
Mar-21 210 Mar-23 Mar-26 11,667 - - - 11,667
Mar-21 210 Mar-24 Mar-26 11,667 - - - 11,667
Mar-21 210 Mar-22 Mar-28 130,001 - - - 130,001
Mar-21 210 Mar-23 Mar-28 86,666 - - - 86,666
Mar-21 210 Mar-24 Mar-28 78,333 - - - 78,333
Nov-21 147 Nov-22 Nov-28 233,334 - - - 233,334
Nov-21 147 Nov-23 Nov-28 233,333 - - - 233,333
Nov-21 147 Nov-24 Nov-28 233,333 - - - 233,333
Apr-22 230 Apr-23 Apr-29 278,333 - - - 278,333
Apr-22 230 Apr-24 Apr-29 268,333 - - - 268,333
Apr-22 230 Apr-25 Apr-29 268,333 - - (8,333) 260,000
Apr-22 230 Apr-23 Apr-27 45,000 - - - 45,000
Apr-22 230 Apr-24 Apr-27 45,000 - - - 45,000
Apr-22 230 Apr-25 Apr-27 45,000 - - - 45,000
Apr-23 247.5 Apr-24 Apr-30 169,167 - - - 169,167
Apr-23 247.5 Apr-25 Apr-30 169,167 - - (5,833) 163,334
Apr-23 247.5 Apr-26 Apr-30 169,166 - - (5,833) 163,333
Apr-23 247.5 Apr-24 Apr-28 28,334 - - - 28,334
Apr-23 247.5 Apr-25 Apr-28 28,333 - - - 28,333
Apr-23 247.5 Apr-26 Apr-28 28,333 - - - 28,333
Total 3,685,832
*The share options issued in January 2018 had their expiry dates extended due
to the Company being in several close periods whereby according to the scheme
rules the options were unable to be exercised. The amended expiry date for
these options was 29 January 2024 with the remaining outstanding balances
expiring on this date.
There were no share option awards during the year. The weighted average
remaining contractual life for all share option schemes was 3 years (2023: 4
years). During the year, 170,000 of the January 2018 issuance of share
options that had an exercise price of 200 pence which had previously had their
expiry date extended (to January 2024 from January 2023 due to being in
several close periods), expired, as did a further 35,000 of share options with
an exercise price of 175 pence from the January 2019 issuance. A further
20,000 share options were forfeited due to the departure of employees, these
had a weighted exercise price of 240 pence. The weighted average exercise
price for all outstanding options at 31 December 2024 was 200 pence. For
details of the schemes and scheme rules, please refer to the Remuneration
Report.
21. Related undertakings and ultimate controlling party
The Group and Company do not have an ultimate controlling party or parent
Company.
Country of Incorporation
Subsidiary % owned Principal Activity Registered Office
Jersey North Sea Holdings Ltd 100% England & Wales Non-Trading 1
Jersey Petroleum Ltd 100% England & Wales Oil Exploration 1
Jersey V&C Ltd 100% England & Wales Oil Exploration 1
Sunny Day 123 Ltd* 100% England & Wales Oil Exploration 4
Jersey E & P Ltd** 100% Scotland Non-Trading 2
Jersey Oil Ltd** 100% Scotland Non-Trading 2
Jersey Exploration Ltd** 100% Scotland Non-Trading 2
Jersey Oil & Gas E & P Ltd 100% Jersey Management services 3
*Dissolved 25 February 2025
**Dissolved 11 February 2025
Registered Offices
1. 71-75 Shelton Street, Covent Garden, London WC2H 9JQ
2. 7 Queen's Gardens, Aberdeen, Scotland AB15 4YD
3. First Floor, Tower House, La Route es Nouaux, St Helier, Jersey JE2 4ZJ
4. 10, The Triangle, NG2 Business Park Nottingham, Nottinghamshire NG2 1AE
22. Notes to the consolidated statement of cash flows
Reconciliation of Loss Before Tax to Cash Used in Operations
2024 2023
£ £
Loss for the year before tax (3,540,274) (5,595,353)
Adjusted for:
Depreciation 688 10,203
Depreciation right-of-use asset 55,864 94,988
Share-based payments 764,774 1,560,167
Finance costs 3,185 3,503
Finance income (542,637) (114,825)
(3,258,400) (4,041,317)
(Increase)/decrease in trade and other receivables 428,691 (109,685)
Decrease in trade and other payables (530,054) (34,047)
Cash used in operations (3,359,763) (4,185,049)
Cash and cash equivalents
The amounts disclosed on the consolidated Statement of Cash Flows in respect
of Cash and cash equivalents are in respect of these statements of financial
position amounts:
Year ended 2024
31 Dec 2024 01 Jan 2024
£ £
Cash and cash equivalents 6,185,872 5,482,935
Year ended 2023
31 Dec 2023 01 Jan 2023
£ £
Cash and cash equivalents 5,482,935 6,579,349
Analysis of net cash
At 1 Jan 2024 Cash inflow At 31 Dec 2024
£ £ £
Cash and cash equivalents 5,482,935 702,937 6,185,872
Net cash 5,482,935 702,937 6,185,872
23. Post balance sheet events
As highlighted in note 10, the Directors assessed that there were no
conditions of impairment as at 31 December 2024. Post year end, on 7 March
2025, the Company reported that Dana Petroleum ("Dana") had terminated the
agreement with the Buchan Horst ("Buchan") Operator, NEO Energy, in relation
to the proposed purchase of the Western Isles floating, production, storage
and offloading ("FPSO") vessel. This followed the agreement having reached
its longstop date at the end of February 2025. The Buchan joint venture's
ability to recommit to the acquisition of the FPSO is naturally linked to the
satisfactory conclusion of the on-going fiscal and regulatory consultations
and completion of the required pre-handover works on the vessel. In addition,
the Brent oil price dropped below its previous 18-month range of $70-90 in Q2
2025 following the introduction of the US 'Trump Tariffs'. Both events will be
considered in the 2025 reporting period as to whether either constitute an
impairment trigger and consequently whether either will result in an
impairment on the current carrying value of the Buchan field.
24. Availability of the annual report 2024
A copy of the full Annual Report will be made available for inspection at the
Company's registered office during normal business hours on any weekday. The
Company's registered office is at 71-75 Shelton Street, Covent Garden, London
WC2H 9JQ. A copy can also be downloaded from the Company's website at
www.jerseyoilandgas.com. (http://www.jerseyoilandgas.com/) Jersey Oil and Gas
Plc is registered in England and Wales, with registration number 7503957.
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