REG - Nostra Terra O&G Co - 2024 Audited Annual Results & Notice of AGM
23/05/2025 07:00
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RNS Number : 8403J Nostra Terra Oil & Gas Company PLC 23 May 2025
23 May 2025
Nostra Terra Oil and Gas Company Plc
("Nostra Terra" or "the Company")
2024 Audited Annual Results
Notice of AGM
Nostra Terra (AIM: NTOG), the oil & gas exploration and production company
with a portfolio of development and production assets in Texas, USA, is
pleased to announce its final results for the year ended 31 December 2024 (the
"Results"). A copy of the Results, along with a Notice of AGM, is being posted
to Shareholders and is available on the Company's website, www.ntog.co.uk .
The AGM will be held at the offices of Druces LLP at Salisbury House, London
Wall, London EC2M 5PS at 10.00 a.m. on 20 June 2025. Extracts from the Results
are set out below.
This announcement contains inside information for the purposes of Article 7 of
the Market Abuse Regulation (EU) No. 596/2014, as it forms part of UK Domestic
Law by virtue of the European Union (Withdrawal) Act 2018. Upon the
publication of this announcement, this inside information is now considered to
be in the public domain
For further information, contact:
Nostra Terra Oil and Gas Company plc Tel: paul@ntog.co.uk
Paul Welch, CEO
SP Angel Corporate Finance LLP Tel: +44 (0) 20 3470 0470
(Nominated Adviser and Broker)
Stuart Gledhill / Richard Hail / Adam Cowl
Celicourt Communications (PR/IR) Tel: +44 (0) 20 7770 6424
Mark Antelme / Jimmy Lea Email: NTOG@celicourt.uk
Chairman's Report
2024 - Continued change and intensified focus.
During 2024 crude oil prices including WTI, the benchmark against which Nostra
Terra's production is sold, continued on a generally falling trajectory.
Russian oil production continues to find its way to market, often at
discounted prices; both the volume and price effects of this and continued
concerns over the health of the global economy are in part to blame for this
price weakness.
Against this backdrop, Nostra Terra has put in place its new strategy and
"stuck to the knitting" by divesting non-core assets in West Texas and
focusing efforts on its existing core East Texas Pine Mills acreage and holds
a 100% Working Interest. Over the year it has successfully reduced costs,
identified commercially attractive opportunities to reactivate dormant wells
and to upgrade infrastructure in Pine Mills and acted on these. In combination
with these initiatives, a major workover programme at Pine Mills where we hold
a 100% Working Interest transformed the Company's cash flow position. Phase 1
of that delivered production increases that were funded during the 2(nd) half
of 2024 by two equity placings totalling £950,000 before expenses and
resulted in the Company becoming profitable at the operating and corporate
levels during the 4(th) quarter of 2024 for the first time in many years.
Further, post 2024 balance sheet year end, Phase 2 of the workover programme
at Pine Mills was also successful and further increased production and was
funded by a £500,000 placing in March 2025. We are now seeing a significant
improvement in production volumes and well reliability as a result of these
actions.
If the oil price continues to stay relatively low, or weakens further, the
Company expects that a wide range of producing assets in and around the areas
where we currently operate will come to market as other companies come under
pressure to divest. We will actively consider these acquisition opportunities
for commercial attractiveness and strategic fit, on a case by case basis.
Given our high netback operations at both Pine Mills and Fouke, these assets
are cash flow positive at oil prices above $25/barrel making the company
fairly resilient to an extended low oil price environment.
Work has also been carried out on the Company's geological and geophysical
datasets to identify (as detailed in the CEO's report below) new well
locations, which we believe will offer the same attractive production and
revenue profiles as the two existing Fouke wells.
In July 2024, we were pleased to announce the appointment of SP Angel as sole
corporate broker and in September as the Company's nominated advisor.
There were a number of board changes during 2024. In May, Matt Lofgran stepped
down as CEO to concentrate on other interests. Paul Welch, already a
non-executive director of Nostra Terra and a highly-experienced oil & gas
professional, stepped into the role of CEO. The following month Jim Newman,
one of our largest shareholders, and with a broad and deep knowledge of Texan
oil & gas operations, joined the board as a non-executive director.
Post year end we announced that John Stafford, long-serving non-executive
director, had stepped down as a director.
On behalf of the board of Nostra Terra I would like to thank all our
shareholders for their continuing support throughout 2024 and as we progress
through 2025.
Dr Stephen Staley
Non-Executive Chairman
22 May 2025
Chief Executive Officer's Report
In 2024, the Company focused on improving cash flow performance across all its
assets. Assets that didn't deliver sufficient cash flow were sold, and assets
that did, such as Pine Mills, received additional investments.
Significant change occurred across the Company in 2024. On being appointed
CEO, I immediately undertook a performance review of all our assets to
determine what should be kept, sold, and invested in. As a result of this
review, several West Texas assets were sold, South Texas assets were not
invested in further, and our Pine Mills assets, where we hold a 100% Working
Interest, were prioritised and invested in heavily.
We also examined the operating costs and reduced them by 25%. During the asset
review, we identified 10 idle wellbores in Pine Mills that had the potential
to be profitably returned to production. A transformative workover programme
was undertaken, and five idle wells in Phase 1 were returned to production
before the end of the year. This also included the restart of waterflood
operations in the northern section of the field. These workovers, combined
with the waterflood restart, increased oil production by circa 40% at Pine
Mills and, combined with the Opex cost reductions, improved our profit per
barrel by 50%. Following Phase 1, the company became profitable at the
operating and corporate levels during the 4(th) quarter of 2024 for the first
time in many years. Further, post 2024 balance sheet year-end, the
commencement of Phase 2 of the workover programme at Pine Mills was also
successful and further increased production and resulted in the Company's
total net oil production from all sources increasing to approximately 140
bopd.
During 2024, we also continued our technical efforts in the Fouke area, where
we hold a 32.5% Working Interest. We identified a new development well
location north of Fouke #1, which we believe contains another 300 MBO
recoverable volume. Post-2024 balance sheet year-end, we presented the
technical and economic merits of the location to our partners, who have now
approved it. The well is subject to final planning and funding, and it is
anticipated to be drilled in the late 3(rd) quarter of 2025 and, if
successful, is expected to deliver initial production at the new maximum
allowable field rate of 124 bopd.
After the technical review of the Fouke area concluded, the team focused on
the behind-pipe potential in the remainder of the field, looking for by-passed
or missed pay sands in existing well bores that had not been produced. This
activity is ongoing and is expected to conclude at the end of the 3(rd)
quarter of 2025.
Revenues for the year were $2,038,000, a 28% decrease from $2,816,000 in 2023.
This reflects a combination of a 27% decrease in production sales and a
deterioration in the commodity price environment (average $72.24 per barrel
sold in 2024 compared to $73.38 in 2023). which has continued since the year
end. Our production remains unhedged, which allows us to benefit from future
recovery in the commodity environment. Gross profit before non-cash items
(depreciation, depletion, and amortization) was $825,000, a reduction from
$1,408,000 in 2023.
Chief Executive Officer's Report (continued)
United States
All of Nostra Terra's operations in the US target conventional reservoirs
(i.e., not shale), typically with lower lifting costs and longer-life reserves
than unconventional ones.
Area 2024 Production Percentage of Portfolio by sales
(Barrels sold)
East Texas 24,677 87.8%
West Texas 3,311 11.8%
South Texas 124 0.4%
East Texas (33- 100% WI)
Nostra Terra's core asset is the Pine Mills Field (100% WI), which provides a
baseline of low decline production of +/- 100 bopd. In 2024, production from
the area accounted for 88% of the Company's sales. After the first workover
program, production increased by 40% in 2024 from this core producing area.
West Texas (50 - 100% WI)
In 2024, production from the area accounted for 11.8% of the Company's sales
(50-75% WI). During 2024, the Coleman and Raschke assets were sold, and only
the Grant asset was retained. The Grant asset produced at a flat rate of 18
bopd throughout 2024.
South Texas (100% WI)
The Caballos Creek asset, comprising two leases, did not perform well in 2024.
The Company decided not to invest further in the asset and entertained various
offers to sell it throughout the year. The asset continues to be produced on
an infrequent basis while the search for a buyer continues. It is still an
active divestiture candidate.
Senior Lending Facility
The facility is currently close to its maximum level of US$4,250,000. The
cost of the facility has decreased over the year in line with the reduction in
US Federal Reserve interest rates. Further reductions in interest rates are
anticipated in 2025. Post Period, the term of the facility was extended for
another three years on similar terms. The lending base is reviewed twice
annually, and we anticipate its capacity to increase in line with the
increased volumes and reserves that the Company has developed through its
workover programme. This increased capacity can then be utilised to further
grow the production base.
Chief Executive Officer's Report (continued)
Outlook
The Company intends to continue to focus on reducing costs and generating
positive cash flow from the existing asset base while focusing on increasing
oil production and delivering growth. We intend to pursue organic growth
opportunities from our existing asset base by looking for additional
recompletion and workover well opportunities in the remainder of the Pine
Mills field and plan to participate in drilling the next development location
in the Fouke area. We will continue efforts to identify solutions for the
non-core South Texas assets. We will continue our review of the many inorganic
acquisition opportunities available to identify candidates that add
complementary producing assets that fit with our existing West Texas asset
position, our business model, and our growth strategy.
Thank you for your support. We look forward to continuing to identify and
deliver additional value from the existing portfolio and growing the Company
for the advantage of all our shareholders.
Paul Welch
Chief Executive Officer
22 May 2025
Strategic Report
The directors present their Strategic Report for Nostra Terra Oil and Gas Company plc ("the Company") and its subsidiaries (collectively "the Group") covering the year ended 31 December 2024.
Principal activity
The Group's principal activity is the exploitation of hydrocarbon resources,
focusing currently on the USA.
Our strategy
1 Grow Production and Reserves from Pine Mills
2 Increase cashflows
3 Make acquisitions that are accretive to shareholders
4 Use technical advances to extract further value from
maturing assets
5 Develop strategic partnerships that allow the Company to leverage
our existing assets to generate returns or create value through new
opportunities
Our business model
Nostra Terra is focused on achieving profitable and sustainable growth within
established hydrocarbon provinces.
We see the scope for sustained profitable growth throughout many
well-established hydrocarbon systems. Our business model is to continue
upgrading our exploration and production portfolio by identifying, screening,
and investing in a diverse portfolio of upstream assets, targeting the most
attractive opportunities. We focus on conventional reservoirs where assets
have lower lifting costs and long-life reserves.
Review of business, future developments, trading outlook, and future strategy
The results for the year and the financial position of the Company and the
Group are shown in the financial statements. They are also noted in the
Chairman's Report on page 2 and the Chief Executive Officer's Report on page
3.
Growth opportunities
Nostra Terra is focused on existing, proven basins with conventional
reservoirs in Texas, USA. The Company is also pursuing growth opportunities
outside the USA.
Key Themes for 2025
· Commodity price weakness due to the economic uncertainties
introduced as a result of current US Government policies.
· Continued growth in production from the Pine Mills asset.
· Development drilling in the Fouke area, followed by the review of
a waterflood project in the area.
· Selective review of producing asset acquisition opportunities in
the areas in which the Company operates.
· Efficient cash flow generation from our existing assets.
Strategic Report (continued)
Key performance indicators
At this stage in the Company's development, the directors regularly monitor
key performance indicators primarily: production rates, operating costs,
general administrative expenses cash flows and bank balances, which are
tightly controlled.
2024 2023
$'000 $'000
Cash and cash equivalents 106 26
Administrative expenses 1,077 870
BOE BOE
Production (net) 28,112 38,373
Principal risks and uncertainties
Managing Our Risk
Risk management is at the core of achieving our strategy and delivering
long-term value to shareholders. The Board, its committees, and the executive
team are actively engaged in setting the risk agenda and managing risks and
opportunities of the Company. The Company maintains a Risk Register as a part
of the Board's fiduciary and oversight responsibilities.
Definition of Risk
A risk is defined here as a potential future event that may influence the
achievement of business objectives. This includes both "upside" (opportunity)
and "downside" (threat) risks. Threats and opportunities can come from various
sources and can be directly related to the Company's operational and
commercial activities and support functions, or they can arise externally:
from suppliers, regulators, competitors; from the economic environment or
political climate.
Risk Management
The Company is acutely aware of oil and gas activity risks. Such risks range
from global commercial risks, such as stock market volatility and commodity
pricing, to geopolitical risks in terms of market access, tariffs and
contractual relationships through to operational risks. In addressing the
latter, ensuring the safety of our personnel and subcontracting staff and
protecting the environment in which we work are paramount.
The key risk in development and production is the technical risk of not
finding and producing sufficient hydrocarbons to be economic, While the US
mid-continent is a proven hydrocarbon region and is seeing resurgence through
the application of new drilling and well completion technologies, there are
also environmental and economic risks, as there are in any hydrocarbon region.
Further information relating to risk can be found on note 20 of these
accounts.
Strategic Report (continued)
Companies Act S.172
The Directors acknowledge their duty under s.172 of the Companies Act 2006 and
consider that they have, individually and together, acted in the way that, in
good faith, would most likely promote the Company's success for the benefit of
its members as a whole. In doing so, they have had regard (amongst other
matters) to:
· the likely consequences of any decision in the long term. The Group's
long-term strategic objectives, including progress made during the year and
principal risks to these objectives, are shown in the strategic report and the
key performance indicators.
· the interests of the Company's employees. Our employees are
fundamental to us achieving our long-term strategic objectives.
· the impact of the Company's operations on the community and the
environment. The Group operates honestly and transparently. We consider the
impact on the environment on our day-to-day operations and how we can minimise
this.
· the desirability of the Company maintaining a reputation for high
standards of business conduct. We will behave responsibly, operating within
the high standard of business conduct and good corporate governance.
· the need to act fairly as between members of the Company. We will
behave responsibly towards our shareholders and treat them fairly and equally
so they may benefit from the successful delivery of our strategic objectives.
This Strategic Report was approved by the board of directors on 22 May 2025
and signed on behalf of the board by:
Paul Welch
Chief Executive Officer
Directors' Report
The directors present their annual report and audited financial statements for the year ended 31 December 2024.
The review of business and future developments has been undertaken in the strategic report for the year ended 31 December 2024.
Listing
The Company's ordinary shares have been quoted on the AIM market of the London
Stock Exchange since 20 July 2007. SP Angel Corporate Finance LLP is the
Company's nominated advisor and broker. The closing mid-market price at 31
December 2024 was 0.078p (2023: 0.17p).
Results and dividends
The loss for the year ended 31 December 2024 was $1,509,000 (2023: $472,000).
No dividends will be distributed for the year ended 31 December 2024 (2023:
$nil).
Directors
The following directors have held office for the year ended 31 December 2024:
M B Lofgran (resigned 19 May 2024)
J Stafford (resigned 1 January 2025)
S Staley
P Welch
J F Newman (appointed 27 June 2024)
Directors' remuneration for the years ended 31 December 2024 and 2023 are
summarised as follows:
Salary Fees Share-based payments 2024
$ $ $ Total
$
M B Lofgran 111,000 - 2,721 113,721
S Staley - 64,000 - 64,000
J Stafford - 39,000 - 39,000
P Welch 119,000 17,000 - 136,000
J F Newman - - - -
Total 230,000 120,000 2,721 352,721
31 December 2023:
Salary Fees Share-based payments 2023
$ $ $ Total
$
M B Lofgran 190,000 - 2,721 192,721
S Staley - 61,070 - 61,070
J Stafford - 47,771 - 47,771
P Welch - 37,950 - 37,950
Total 190,000 146,791 2,721 339,512
Directors' Report (continued)
There were no benefit-in-kind payments during the year.
More detail on the share options issued to Directors' during the year are
disclosed within the share-based payment note together with the outstanding
options and warrants at the year-end, please refer to note 23.
At 31 December 2024, the directors' beneficial interests in the Company's
issued share capital were as follows:
Number of ordinary shares of 0.01 p each 31.12.24 Number of ordinary shares of 0.1 p each 31.12.23
Percentage of issued share capital Percentage of issued share capital
M B Lofgran 0 0% 50,705,463 4.96%
J Stafford 2,500,000 0.1% 2,500,000 0.24%
S Staley 24,833,334 0.52% 8,166,667 0.80%
P Welch 51,014,493 1.07% - -
J Newman 323,695,652 6.78% - -
Remuneration Committee and Policy
The Remuneration Committee takes into account both group and individual
performance, market value, and sector conditions in determining executive
directors' remuneration. The Group's policy is to pay competitive but
affordable salaries compared with peer companies in the oil and gas sector,
until the Group has established a good position with acreage, assets, income
and cash at hand. All current salaries are without pension or benefits.
Substantial shareholders
As at 27 April 2025, the Company was aware of the following interests in its
issued share capital:
Number of ordinary Percentage of issued
shares of 0.1 p each share capital
Premier Miton Group PLC 1,272,786,881 18.32%
Interactive Investor Services Limited 677,020,028 9.74%
Peel Hunt LLP 627,528,481 9.03%
Mr Elie Basil Victor Dangoor 513,043,478 7.38%
Hargreaves Lansdown Stockbrokers 499,805,495 7.19%
Mr P J Small 351,626,017 5.06%
Dos Hermanos International LLC* 345,434,782 4.97%
Halifax Share Dealing Limited 333,432,707 4.80%
Barclays Stockbrokers Limited 233,124,791 3.35%
*James Newman, Company Director, is the Managing Partner of Dos Hermanos
Directors' Report (continued)
Events after the reporting period
Refer to note 26 for details.
Publication of accounts on company website
The Company publishes the financial statements on its website. The directors
are responsible for the website's maintenance and integrity, and their
responsibility also extends to the financial statements contained therein.
Indemnity of officers
The Group may purchase and maintain, for any director or officer, insurance
against any liability. The Group maintains appropriate insurance cover against
legal action brought against its directors and officers.
Financial instruments
The Group does not have formal policies on interest rate risk or foreign
currency risk. The Group would be exposed to foreign currency risk on sales
and purchases that are denominated in a currency other than United States
Dollars ($). The Group maintains a natural hedge that minimises its foreign
exchange exposure by matching foreign currency income with foreign currency
costs. For the time being, the Group does not consider it necessary to enter
into foreign exchange contracts to manage its foreign currency risk, given the
nature of its business.
Going concern
The directors believe that, based on the forecasts and projections they have
prepared, the resources available will be sufficient for the Company and its
subsidiaries to continue as a going concern for the foreseeable future when
taking into account proceeds generated from production. Going concern is
discussed more fully in note 1.
The Directors have concluded that the Group will have adequate resources to
continue in operational existence for the foreseeable future. For these
reasons, they continue to adopt the going concern basis in preparing the
annual report and accounts.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and regulations.
Company law requires the directors to prepare financial statements for each
financial year. Under that law, the directors are required to prepare the
Group and Company financial statements in accordance with UK adopted
International Accounting Standards.
Under company law, the Directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Group and Company, and of the profit or loss of the Group and
Company for that period.
Directors' Report (continued)
Statement of directors' responsibilities (continued)
In preparing these financial statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgments and estimates that are reasonable and prudent;
· state whether the UK adopted International Accounting Standards
have been followed, subject to any material departures disclosed and explained
in the financial statements; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and Company will continue
in business.
The Directors are responsible for keeping accounting records that are
sufficient to show and explain the Group's and Company's transactions. These
records must disclose with reasonable accuracy at any time the financial
position of the Group and Company and to enable the Directors to ensure that
any financial statements prepared comply with the Companies Act 2006. They are
also responsible for safeguarding the assets of the Company and Group and
hence for taking reasonable steps for the prevention and detection of fraud,
error, non-compliance with law and regulations and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of financial statements may differ from legislation in other jurisdictions.
The Company is compliant with AIM Rule 26 regarding the Company's website.
Statement as to disclosure of information to auditors
Each of the persons who is a Director at the date of approval of this annual
report confirms that:
· so far as the Director is aware, there is no relevant audit
information of which the Company's auditor is unaware; and
· the Director has taken all the steps that he ought to have taken as
a Director in order to make himself/herself aware of any relevant audit
information and to establish that the Company's auditor is aware of that
information.
Auditors
MAH, Chartered Accountants have expressed their willingness to continue in
office as auditor and will be proposed for reappointment at the next Annual
General Meeting.
This report was approved by the board of directors on 22 May 2025 and signed
on behalf of the board by:
Paul Welch
Chief Executive Officer
Directors' Information
Dr Stephen Staley Non-Executive Chairman
Dr Stephen Staley (65) has over 40 years of wide-ranging management, technical and commercial experience in the international oil, gas and power sectors. Steve was until October 2019 the CEO, director and co- founder of Upland Resources Limited, a London-listed oil & gas company currently with interests in the UK and Sarawak. Until March 2022, he was also non-executive chairman of Predator Oil & Gas Holdings PLC, an oil & gas company on the Standard List of the London Stock Exchange. He is a non-executive director of 88 Energy Ltd, which is listed on both AIM and the ASX. He has also co-founded and floated two further London-listed oil & gas companies and was both a technical consultant to, and non-executive director of, Cove Energy plc - the highly successful East Africa focused explorer. Prior to this he has worked for companies including Cinergy Corp. and Conoco. He holds a BSc (Hons.) in Geophysics from Edinburgh University, a PhD in Petroleum Geology from Sheffield University and an MBA from Warwick University. He is a Fellow of the Geological Society , the GESGB and The Arctic Club.
Paul Welch Chief Executive Director
Paul (62) is an international energy executive with over 30 years of industry
experience having worked for Shell Oil Company and several large independents
including Hunt Oil Company, Pioneer Natural Resources and as CEO of AIM listed
explorer Chariot Limited (previously Chariot Oil and Gas Limited) (AIM: CHAR)
(2009-2012) and CEO of Sea Dragon Energy (2013-2015) which in October of 2015
became SDX Energy plc (AIM: SDX) (2015-2019) following the merger with Madison
PetroGas. He was subsequently appointed CEO of Cosimo Holdings Ltd in 2019, a
private oil and gas company. He is currently Chairman and Executive Director
of ALT Resources, a company formed to make acquisitions in the mining sector.
Paul graduated from the Colorado School of Mines with both a Bachelor and
Master's degrees in Petroleum Engineering. He also holds an MBA in Finance
from the Southern Methodist University (SMU) in Dallas, Texas.
John Stafford Non-Executive Technical Director
John Stafford (63) has over 35 years' experience in the oil & gas
industry. As Vice President of Operations at Gulf Keystone (LSE: GKP)
2014-2017, he oversaw 40,000 bopd, having joined that Company as Manager,
Geology & Geophysics in early 2009. John is a geoscientist, with
specialist expertise in oil field development and reserve certification and
reporting.
Mr Stafford has worked with well-known companies in the oil and gas industry,
such as ECL, Schlumberger and PGS, managing projects in integrated field
management and all aspects of reserves certification and reporting. This
includes the production of Competent Persons Reports.
John has further experience in fractured reservoir development and risk
management.
Post Period- Mr. Stafford stepped down from the Board on January 1, 2025
Jim Newman Non-Executive Technical Director
Jim Newman (61) has over 35 years of industry experience in multiple facets of
the oil & gas industry, including well abandonment, well intervention,
water management, and completions. He started his career at Triple N Services
(22 years), which he sold to Basic Energy Services LP, where he served in
various positions for 13 years, ultimately as the Executive Vice President of
Operations until he stepped down in 2021. He is the managing partner of Clean
Rig Power and Dos Hermanos International and the CEO of Aquafortus.
He graduated from the Colorado School of Mines with a bachelor's degree in
petroleum engineering and is a registered Professional Engineer in Texas, USA
Corporate Governance Report
As an AIM-quoted company, the Company is required to apply a recognised
corporate governance code, demonstrating how the Group complies with such
corporate governance code and where it departs from it.
The directors have formally taken the decision to apply the QCA Corporate
Governance Code (the "QCA Code"). The Board recognises the principles of the
QCA Code, which focus on the creation of medium to long-term value for
shareholders without stifling the entrepreneurial spirit in which small to
medium sized companies, such as Nostra Terra, have been created.
QCA Principles
The Board recognises the importance of corporate governance, and we therefore
apply the QCA code.
QCA Code Principle Disclosure Nostra Terra Reference
1 Establish a strategy and business model which promote long-term value for See Strategic Report of this 2024 Annual Report
shareholders.
2 Seek to understand and meet shareholder needs and expectations. See the Chief Executive Officer's Statement of this 2024 Annual Report
3 Take into account wider stakeholder and social responsibilities and their Detailed within AIM Rule 26, available to view via www.ntog.co.uk
implications for long term success. (http://www.ntog.co.uk)
4 Embed effective risk management, considering both opportunities and threats See note 20 of this 2024 Annual Report
throughout the organisation.
5 Maintain the board as a well-functioning balanced team led by the Chair. See the Corporate Governance Report of this 2024 Annual Report
6 Ensure that between them the directors have the necessary up to date Detailed within AIM Rule 26, available to view via www.ntog.co.uk
experience, skills and capabilities. (http://www.ntog.co.uk)
7 Evaluate the Board performance based on clear and relevant objectives, Nostra Terra's board is small and extremely focused on implementing the
seeking continuous improvement. Company's strategy. Given the size and nature of Nostra Terra, the Board does
not consider it appropriate to have a formal performance evaluation procedure
in place. As described and recommended in Principle 7 of the QCA Code, the
board will closely monitor the situation as it grows.
8 Promote a corporate culture that is based on ethical values and behaviours. Detailed within AIM Rule 26, available to view via www.ntog.co.uk
(http://www.ntog.co.uk)
9 Maintain governance structures and processes that are fit for purpose and Detailed within AIM Rule 26, available to view via www.ntog.co.uk
support good decision making by the Board. (http://www.ntog.co.uk)
10 Communicate how the Company is governed and is performing by maintaining a See the Corporate Governance Report of this 2024 Annual Report
dialogue with shareholders and other relevant stakeholders.
Corporate Governance Report (continued)
Accountability
The Board of Directors
The board comprises one executive director and two non-executive directors.
The non-executive directors are considered independent. It meets at least
four times a year and as issues arise which require board attention.
The board has a formal schedule of matters specially referred to
it for decision.
The directors are responsible for:
· Management structure and appointments
· Consideration of strategy and policy
· Approval of major capital investments and transactions
· Significant financing matters
The board has Audit, Remuneration and Nomination Committees, the roles and
responsibilities of which are discussed below.
Audit Committee
The Audit Committee comprises James Newman as Chairman, and Steve Staley.
Both have considerable and relevant financial experience.
The Audit Committee has terms of reference agreed by the board and meets at
least twice a year.
The committee provides an opportunity for reporting by the Company's
auditors, and is responsible for:
· Monitoring, in discussion with the auditors, the integrity of the
financial statements and announcements of the Company
· Reviewing the Company's internal financial controls and risk
management systems
· Reviewing and monitoring the external auditor's independence, and
the objectivity and effectiveness of the audit process, taking into
consideration relevant UK and other professional and regulatory requirements
Corporate Governance Report (continued)
Audit Committee (continued)
The Audit Committee is also responsible for making recommendations to the
board to be put to shareholders for their approval in general meeting in
relation to the appointment, reappointment and removal of the external
auditors and to approve the external auditors' remuneration and terms of
engagement. Other responsibilities include considering annually whether there
is a need for an internal audit function and making a recommendation to the
board, and reviewing arrangements by which the Group's staff will be able to
raise concerns about possible improprieties in matters of financial reporting
or other matters related to the Group.
Remuneration and Nomination Committees
The Remuneration and Nomination Committees, which meet at least twice a year,
consist of Stephen Staley as Chairman and James Newman. Based on the terms of
reference approved by the board, the Remuneration Committee is responsible
for:
· Determining and agreeing with the board the framework or broad
policy for the remuneration of the Chief Executive Officer and other members
it is designated to consider
· Setting the remuneration for all executive directors and the
Company Secretary
· Recommending and monitoring the level and structure of
remuneration for senior management
· Determining targets for any performance-related pay schemes
operated by the Group
· Determining the policy and scope of pension arrangements for each
executive director
· Ensuring that contractual terms on termination and any payments
made are fair to the individual and the Company.
The Remuneration Committee determines the terms and conditions of service of
executive directors. This includes agreeing the policy for authorising claims
for expenses from the Chief Executive Officer and, within the terms of the
agreed policy, recommending the total individual remuneration package of any
executive director including, where appropriate, bonuses, incentive payments
and share options.
The Nomination Committee is responsible for ensuring all director appointments
are considered by the Committee before their formal recommendation to the
board for approval.
Shareholder Relations
Communications with shareholders are very important and are given a priority.
The Company maintains a website, www.ntog.co.uk (http://www.ntog.co.uk) , to
improve information flow to shareholders and potential investors. It contains,
inter alia, information about the Company's activities and annual and interim
reports.
Shareholders are welcome to make enquiries on any matters relating to the
business and to their shareholdings. The Company encourages shareholders to
attend the Annual General Meeting, at which they will be given the
opportunity to put questions to the chairman and other members of the board.
All regulatory information is published via a Regulatory Information Service
before anywhere else.
Corporate Governance Report (continued)
Internal Financial Control
The board is responsible for establishing and maintaining the Company's system
of internal controls and for reviewing their effectiveness. They are designed
to safeguard the Company's assets and to ensure the reliability of the
financial information for both internal use and external publication.
The controls, that include financial, operational and compliance matters
and management, are reviewed on an ongoing basis.
A system of internal control can provide only reasonable, and not absolute,
assurance that material financial irregularities will be detected or that risk
of failure to achieve business objectives is eliminated. The board has
considered the need for an internal audit function but because of the size and
nature of its operations does not consider it necessary at this time.
Dr Stephen Staley
Non-Executive Chairman
22 May 2025
Independent Auditor's Report
To the members of Nostra Terra Oil and Gas Company plc
Opinion
We have audited the financial statements of Nostra Terra Oil & Gas Company
Plc (the 'parent company') and its subsidiaries (the 'group') for the year
ended 31 December 2024 which comprise the consolidated income statement, the
consolidated statement of comprehensive income, the consolidated and company
statements of financial position, the consolidated and company statements of
cash flows, the consolidated and company statements of changes in equity and
notes to the financial statements, including a summary of significant
accounting policies.
The financial reporting framework that has been applied in the preparation of
the financial statements is applicable law and UK adopted International
Accounting Standards.
In our opinion the financial statements,
• give a true and fair view of the state of the group's and of the
parent company's affairs as at 31 December 2024 and of the group's loss for
the year then ended;
• have been properly prepared in accordance with UK adopted
International Accounting Standards; and
• have been prepared in accordance with the requirements of the
Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC's Ethical
Standard as applied to listed entities, and we have fulfilled our other
ethical responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 1 in the financial statements, which indicate that
the incurred group loss of $1,509,000 during the year ended 31 December 2024
and, at that date, the net current liabilities of $386,000 and net liabilities
of $1,348,000. As stated in note 1, these events or conditions indicate that a
material uncertainty exists that may cast significant doubt on the company's
ability to continue as a going concern. Our opinion is not modified in respect
of this matter.
In auditing the financial statements, we have concluded that the director's
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the entity's ability to continue to adopt the going concern
basis of accounting included a critical assessment on budgets, including
challenging models and undertaking stress tests, and a detailed discussion
with management on the key cashflow pinch points, including loan repayments
and funding available to the Group.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Independent Auditor's Report (continued)
To the members of Nostra Terra Oil and Gas Company plc
An overview of the scope of our audit
As part of designing our audit, we determined materiality and assessed the
risks of material misstatement in the financial statements. In particular, we
looked at where the directors made subjective judgments, for example in
respect of significant accounting estimates that involved making assumptions
and considering future events that are inherently uncertain. As in all of our
audits we also addressed the risk of management override of internal controls,
including evaluating whether there was evidence of bias by the directors that
represented a risk of material misstatement due to fraud.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to
be able to give an opinion on the financial statements as a whole, taking into
account the structure of the Group and the Company, the accounting processes
and controls, and the industry in which they operate. The Group financial
statements are a consolidation of 3 reporting units, comprising the Group's
operating businesses and holding companies.
We performed audits of the complete financial information of Nostra Terra Oil
& Gas Company Plc, New Horizons Energy LLC and Buccaneer Operating LLC
which were individually financially significant and accounted for 100% of the
Group's revenue and 100% of the Group's absolute loss before tax (i.e. the sum
of the numerical values without regard to whether they were profits or losses
for the relevant reporting units).
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. This is not a complete list of
all risks identified by our audit.
Key audit matters How our audit addressed the key audit matter
Carrying value of producing oil and gas assets Carrying value of producing oil and gas assets
The Group holds multiple leases over producing oil and gas assets (wells) We have understood and assessed the methodology used in the capitalisation
which are recorded as both tangible and intangible assets. Carrying values of these assets. A review of the producing wells was undertaken with a view
at the year-end are: of identifying any indication of impairment. This entailed comparing oil
reserves and net present values from the independent reserves report produced
· Intangibles: $2,517k (2023: $2,389k) by APN Consultants LLC to the asset carrying values, and a detailed review
of producing wells.
· Tangibles: $1,196k (2023: $1,230k)
Independent Auditor's Report (continued)
To the members of Nostra Terra Oil and Gas Company plc
Our application of materiality
The scope of our audit was influenced by our application of materiality. We
set certain quantitative thresholds for materiality. These, together with
qualitative considerations, helped us to determine the scope of our audit and
the nature, timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating the effect of
misstatements, both individually and in aggregate on the financial statements
as a whole.
Our application of materiality (continued)
Based on our professional judgment, we determined materiality for the
financial statements as a whole as follows:
Group financial statements Company financial statements
Overall materiality $31,000 $30,000
How we determined it 1.5% of revenue 2.5% of net liabilities
Rationale for benchmark applied The Group has invested heavily in leases and equipment in the past years to As the company is a holding company, we believe net assets is the primary
drive revenue growth and profits. As such we believe that revenue is the measure used by the shareholders in assessing the performance of the Company
primary measure used by the shareholders in assessing the performance of the and is a generally accepted auditing benchmark.
Group, and is a generally accepted auditing benchmark.
For each component in the scope of our Group audit, we allocated a materiality
that is less than our overall Group materiality. The range of materiality
allocated across components was between $30,000 and $31,000.
Independent Auditor's Report (continued)
To the members of Nostra Terra Oil and Gas Company plc
Other information
The other information comprises the information included in the annual report
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
• the information given in the strategic report and the directors'
report for the financial year for which the financial statements are prepared
is consistent with the financial statements; and
• the strategic report and the directors' report have been
prepared in accordance with applicable legal requirements.
Independent Auditor's Report (continued)
To the members of Nostra Terra Oil and Gas Company plc
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and parent
company and its environment obtained in the course of the audit, we have not
identified material misstatements in the strategic report or the directors'
report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
• adequate accounting records have not been kept by the parent company,
or returns adequate for our audit have not been received from branches not
visited by us; or
• the financial statements are not in agreement with the accounting
records and returns; or
• certain disclosures of directors' remuneration specified by law are
not made; or
• we have not received all the information and explanations we require
for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement as set
out on pages 10-11, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair
view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group's and parent
company's ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the group or the
parent company or to cease operations, or have no realistic alternative but to
do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
Independent Auditor's Report (continued)
To the members of Nostra Terra Oil and Gas Company plc
The extent to which the audit was considered capable of detecting
irregularities including fraud
Our approach to identifying and assessing the risks of material misstatement
in respect of irregularities, including fraud and non-compliance with laws and
regulations, was as follows:
• the senior statutory auditor ensured the engagement team collectively
had the appropriate competence, capabilities and skills to identify or
recognise non-compliance with applicable laws and regulations;
• we focused on specific laws and regulations which we considered may
have a direct material effect on the financial statements or the operations of
the Group, including AIM rules and the Companies Act 2006.
• we assessed the extent of compliance with the laws and regulations
identified above through making enquiries of management and inspecting legal
correspondence; and
• identified laws and regulations were communicated within the audit
team regularly and the team remained alert to instances of non-compliance
throughout the audit.
We assessed the susceptibility of the Group's financial statements to material
misstatement, including obtaining an understanding of how fraud might occur,
by:
• making enquiries of management as to where they considered there was
susceptibility to fraud, their knowledge of actual, suspected and alleged
fraud;
• considering the internal controls in place to mitigate risks of fraud
and non-compliance with laws and regulations.
To address the risk of fraud through management bias and override of controls,
we:
• performed analytical procedures to identify any unusual or unexpected
relationships;
• tested journal entries to identify unusual transactions;
• assessed whether judgements and assumptions made in determining the
accounting estimates set out in Note 2 were indicative of potential bias;
• investigated the rationale behind significant or unusual transactions.
In response to the risk of irregularities and non-compliance with laws and
regulations, we designed procedures which included, but were not limited to:
• agreeing financial statement disclosures to underlying supporting
documentation;
• reading the minutes of meetings of those charged with governance;
• enquiring of management as to actual and potential litigation and
claims;
Independent Auditor's Report (continued)
To the members of Nostra Terra Oil and Gas Company plc
There are inherent limitations in our audit procedures described above. The
more removed those laws and regulations are from financial transactions, the
less likely it is that we would become aware of non-compliance. Auditing
standards also limit the audit procedures required to identify non-compliance
with laws and regulations to enquiry of the directors and other management and
the inspection of regulatory and legal correspondence, if any.
Material misstatements that arise due to fraud can be harder to detect than
those that arise from error as they may involve deliberate concealment or
collusion.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor's report.
Use of this report
This report is made solely to the company's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we
are required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Mohammed Haque
Senior Statutory Auditor
For and on behalf of MAH, Chartered Accountants
Statutory Auditor
2(nd) Floor, 154 Bishopsgate,
London EC2M 4LN
22 May 2025
Consolidated Income Statement
For the year ended 31 December 2024
2024 2023
Notes $'000 $'000
Continuing operations
REVENUE 2,038 2,816
COST OF SALES
Production costs (1,213) (1,408)
Depletion, depreciation, amortisation (681) (617)
Total cost of sales (1,894) (2,025)
GROSS PROFIT 144 791
Share based payment (41) (41)
Administrative expenses (1,177) (870)
Foreign exchange (loss) / gain (26) (6)
OPERATING LOSS 7 (1,100) (126)
Finance costs 5 (409) (368)
Other income 6 - 22
LOSS BEFORE TAX (1,509) (472)
Income tax 8 - -
LOSS FOR THE YEAR (1,509) (472)
ATTRIBUTABLE TO:
Owners of the company (1,509) (472)
EARNINGS PER SHARE
Continued operations
Basic & diluted (cents per share) 10 (0.08) (0.06)
The accompanying accounting policies and notes are an integral part of these
financial statements
Consolidated Statement of Comprehensive Income
For the year ended 31 December 2024
2024 2023
$'000 $'000
LOSS FOR THE PERIOD (1,509) (472)
OTHER COMPREHENSIVE INCOME:
Currency translation differences - -
Total comprehensive income for the year (1,509) (472)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR ATTRIBUTABLE TO:
Owners of the company (1,509) (472)
The accompanying accounting policies and notes are an integral part of these
financial statements
Consolidated Statement of Financial Position
As at 31 December 2024
2024 2023
Notes $'000 $'000
ASSETS
NON-CURRENT ASSETS
Intangible assets 11 2,517 2,389
Property, plant and equipment, Oil and gas assets 12 1,196 1,230
Total non-current assets 3,713 3,619
CURRENT ASSETS
Trade and other receivables 15 103 548
Deposits and prepayments 15 376 28
Cash and cash equivalents 16 106 26
Total current assets 585 602
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 17 922 924
Borrowings 18 49 110
Total current liabilities 971 1,034
NET CURRENT LIABILITIES (386) (432)
NON-CURRENT LIABILITIES
Decommissioning liabilities 17 428 382
Borrowings 18 4,247 4,319
Total non-current liabilities 4,675 4,701
NET LIABILITIES (1,348) (1,514)
EQUITY
Share capital 19 8,971 8,142
Share premium 22,902 22,115
Share based payment reserve 523 464
Translation reserve (676) (676)
Retained losses (33,068) (31,559)
Total equity (1,348) (1,514)
The financial statements were approved and authorised for
issue by the Board of Directors on 22 May 2025 and were signed on its behalf
by:
Paul Welch
Director
Company registration number: 05338258. The accompanying
accounting policies and notes are an integral part of these financial
statements.
Company Statement of Financial Position
As at 31 December 2024
2024 2023
Notes $'000 $'000
ASSETS
NON-CURRENT ASSETS
Fixed asset investments 14 - -
Intangible assets 11 224 263
Property, plant and equipment, Oil and gas assets 12 112 130
Total non-current assets 336 393
CURRENT ASSETS
Trade and other receivables 15 30 24
Cash and cash equivalents 16 93 3
Total current assets 123 27
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 17 3,461 3,802
Borrowings 18 49 110
Total current liabilities 3,510 3,912
NET CURRENT LIABILITIES (3,387) (3,885)
NON-CURRENT LIABILITIES
Decommissioning liabilities 17 42 30
Borrowings 18 - 72
Total non-current liabilities 42 102
NET LIABILITIES (3,093) (3,594)
EQUITY
Share capital 19 8,971 8,142
Share premium 22,902 22,115
Share based payment reserve 523 464
Translation reserve (676) (676)
Retained losses (34,813) (33,639)
Total equity (3,093) (3,594)
The parent company's loss for the financial year was $1,172,000 (2023:
$1,035,000).
The financial statements were approved and authorised for issue by the Board
of Directors on 22 May 2025 and were signed on its behalf by:
Paul Welch
Director
Company registration number: 05338258. The accompanying accounting policies
and notes are an integral part of these financial statements.
Consolidated Statement of Changes in Equity
For the year ended 31 December 2024
Share Deferred shares Share Share option reserve Translation reserve Retained Total
capital premium losses
$'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1 January 2023 1,593 6,549 22,115 423 (676) (31,087) (1,083)
Loss for the year - - - - - (472) (472)
Total comprehensive loss for the year - - - - - (472) (472)
Share based payments - - - 41 - - 41
As at 31 December 2023 1,593 6,549 22,115 464 (676) (31,559) (1, 514)
Loss for the year - - - - - (1,509) (1,509)
Total comprehensive loss for the year - - - - - (1,509) (1,509)
Division of shares (1,749) 1,749 - - - - -
Shares issued 829 - 787 1,616
Share based payments - - - 59 - - 59
As at 31 December 2024 673 8,298 22,902 523 (676) (33,068) (1,348)
The accompanying accounting policies and notes are an integral part of these
financial statements.
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of those shares net of share issue expenses. Share
issue expenses in the year comprise costs incurred in respect of the issue of
new shares.
Consolidated Statement of Changes in Equity (continued)
For the year ended 31 December 2024
Share based payment reserve is a reserve used to recognize the cost and equity
associated with the fair value of issues of share options and warrants.
Translation reserves arose due to the adoption of US dollars as the
presentational currency at the start of a prior accounting period.
Retained loss represents the cumulative losses of the company attributable to
owners of the company.
Company Statement of Changes in Equity
For the year ended 31 December 2024
Share Deferred shares Share Share option reserve Translation reserve Retained losses Total
capital premium
$'000 $'000 $'000 $'000 $'000 $'000 $'000
As at 1 January 2023 1,593 6,549 22,115 423 (676) (32,604) (2,600)
Loss for the year - - - - - (1,035) (1,035)
Total comprehensive loss for the year - - - - - (1,035) (1,035)
Shares issued - - - - - - -
Share based payments - - - 41 - - 41
As at 31 December 2023 1,593 6,549 22,115 464 (676) (33,639) (3,594)
Loss for the year - - - - - (1,174) (1,174)
Total comprehensive loss for the year - - - - - (1,174) (1,174)
Subdivision of shares (1,749) 1,749 - - - - -
Shares issued 829 - 787 - - - 1,616
Share based payments - - - 59 - - 59
As at 31 December 2024 673 8,298 22,902 523 (676) (34,813) (3,093)
The accompanying accounting policies and notes are an integral part of these
financial statements.
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of those shares net of share issue expenses. Share
issue expenses in the year comprise costs incurred in respect of the issue of
new shares.
Company Statement of Changes in Equity (continued)
For the year ended 31 December 2024
Share based payment reserve is a reserve used to recognize the cost and equity
associated with the fair value of issues of share options and warrants.
Translation reserves arose due to the adoption of US dollars as the
presentational currency at the start of a prior accounting period.
Retained loss represents the cumulative losses of the company attributable to
owners of the company.
Consolidated and Company Statement of Cash Flows
For the year ended 31 December 2024
GROUP COMPANY
2024 2023 2024 2023
$'000 $'000 $'000 $'000
LOSS FOR THE YEAR (1,509) (473) (1,173) (1,035)
ADJUSTMENTS FOR:
Depreciation 383 324 18 18
Amortisation 253 251 40 42
Depletion 46 42 12 9
Loss/(Profit) on disposal of Fixed Assets 11 - - -
Loss/(Profit) on disposal of Intangibles 72 - - -
Foreign exchange 26 6 3 4
Share based payments 41 41 41 41
Other income - (22) - -
Operating cash flows (678) 169 (1,059) (921)
Decrease/(increase) in receivables 122 19 (6) (3)
(Decrease)/increase in payables (424) (89) (342) 947
(Increase)/decrease in deposits & prepayments (24) 38 - -
Interest paid 409 369 7 17
Net cash from operating activities (595) 506 (1,400) 40
Cash flows from investing activities:
Purchase of plant and equipment (348) (248) - (4)
Purchase of intangibles (106) (416) - -
Disposals 40 2 - -
Increase in decommissioning liabilities - 42 - 9
Net cash from/(used) in (414) (620)
investing activities - 5
Cash flows from financing activities
Shares issued 1,630 - 1,630 -
Costs of shares issued - - - -
Net borrowing (133) 377 (133) (42)
Finance costs (409) (369) (7) (17)
Net cash from/ (used) in financing activities 1,088 8 1,490 (59)
Consolidated and Company Statement of Cash Flows (continued)
For the year ended 31 December 2024
Net (decrease)/increase in cash and cash equivalents 80 (106) 90 (14)
Cash and cash equivalents at the beginning of the year 26 132 3 17
Cash and cash equivalents at the end of the year 106 26 93 3
The accompanying accounting policies and notes are an integral part of these
financial statements.
Notes to the Financial Statements
For the year ended 31 December 2024
General Information
Nostra Terra Oil and Gas Company plc (Nostra Terra) is a company incorporated
in England and Wales and quoted on the AIM market of the London Stock
Exchange. The address of the registered office is disclosed on the company
information page of this annual report. The principal activity of the Group
is described in the directors' report.
1. Summary of significant accounting policies
The financial statements are presented in United States Dollars, rounded to
the nearest $'000, as that is the currency of the primary environment in which
the Group operates.
The principal accounting policies applied in the preparation of these
financial statements are set out below. These policies have been
consistently applied to all the years presented, unless otherwise stated.
Basis of preparation
These financial statements have been prepared in accordance with UK adopted
International Financial Reporting Standards and IFRIC interpretations issued
by the International Accounting Standards Board (IASB) (IFRS) and with those
parts of the Companies Act 2006 applicable to companies reporting under IFRS.
The financial statements have been prepared under the historical cost
convention.
The preparation of financial statements in conformity with IFRS requires the
use of certain critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the accounting policies. The
areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are
disclosed in note 2.
Going concern
The financial statements have been prepared on the assumption that the Group
is a going concern. When assessing the foreseeable future, the directors have
looked at a period of 12 months from the date of approval of this report.
The Group's business activities, together with the factors likely to affect
its future development, performance and position are set out in the Chief
Executive Officer's report and Directors' report. In addition, note 20 to the
financial statements includes the Group's objectives, policies and processes
for managing its capital, its financial risk management objectives and its
exposures to credit risk and liquidity risk.
The Group's forecasts and projections, taking account of reasonable possible
changes in trading performance, show that the Group should be able to operate
within the level of its current cash resources, however a material uncertainty
exists in relation to the Group's ability to repay its liabilities as they
become due. We note that as at the balance sheet date, the Group has net
current liabilities of $386,000 and net liabilities of $1,348,000.
The directors prepare annual budgets and cash flow projections that extend
beyond 12 months from the date of this report. These projections include the
proceeds of future fundraising necessary within the next 12 months to meet the
Company's and Group's overheads and planned discretionary project expenditures
and to maintain the Company and Group as going concerns.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Although the Company has been successful in raising finance in the past, there
is no assurance that it will obtain adequate finance in the future. This
represents a material uncertainty related to events or conditions which may
cast significant doubt on the Group's and Company's ability to continue as
going concerns and, therefore, that they may be unable to realise their assets
and discharge their liabilities in the normal course of business. However, the
directors have a reasonable expectation that they will secure additional
funding when required to continue meeting corporate overheads and exploration
costs for the foreseeable future and therefore the directors believe that the
going concern basis is appropriate for the preparation of the financial
statements.
After making enquiries, the directors have a reasonable expectation that the
Company and Group have adequate resources to continue in operational existence
for the foreseeable future. They continue to adopt the going concern basis in
preparing the annual report and financial statements, however as noted above a
material uncertainty exists which may cast significant doubt on the Group's
ability to continue operating as a going concern.
New standards, amendments and interpretations adopted by the Group and
Company
The following amendments are effective for the period beginning 1 January
2024:
· Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 17).
· Lease Liability in Sales and Leaseback (Amendments to IFRS 16)
· Classification of Liabilities as Current or Non- Current
(Amendments to IAS 1); and
· Non-current Liabilities with Covenants (Amendments to IAS 1)
These amendments had no effect on the consolidated financial statements of the
Group In the current year the group has applied a number of new and amended
IFRS Accounting Standards issued by the International accounting Standards
Board ("IASB") and adopted by the UK, that are effective for the first time
for the financial year beginning 1 January 2024 Their adoption has not had any
material impact on the disclosure or on the amounts reported in these
financial statements.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
New standards, amendments and interpretations not yet adopted
New standards, interpretations and amendments effective from 1 January 2025
onwards
There are a number of standards, amendments to standards, and interpretations
which have been issued by the IASB that are effective in future accounting
periods that the Group has decided not to adopt early.
Effect annual periods beginning before or after
IAS 21 The Effects of Changes in Foreign Exchange Rates 1st January 2025
Lack of Exchangeability (Amendment to IAS 21 The Effects of Changes in Foreign
Exchange Rates)
IFRS 7 Financial Instruments: Disclosure 1st January 2026
Amendments regarding the classification and measurement of financial
instruments
IFRS 7 Financial Instruments: Disclosure 1st January 2026
Amendments resulting from Annual Improvements to IFRS Accounting Standards
IFRS 7 Financial Instruments 1st January 2026
Contracts Referencing Nature-dependent Electricity
IFRS 9 Financial Instruments 1st January 2026
Amendments regarding the classification and measurement of financial
instruments
IFRS 9 Financial Instruments 1st January 2026
Amendments resulting from Annual Improvements to IFRS Accounting Standards
IFRS 9 Financial Instruments 1st January 2026
Contracts Referencing Nature-dependent Electricity
IFRS 18 Presentation and Disclosure of Financial Statements 1st January 2027
Original issue
IFRS 19 Subsidiaries without Public Accountability: Disclosures 1st January 2027
Original issue
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Basis of consolidation
Where the Company has the power, either directly or indirectly, to govern the
financial and operating policies of another entity or business so as to obtain
benefits from its activities, it is classified as a subsidiary. The
consolidated financial statements present the results of the Company and its
subsidiaries ("the Group") as if they formed a single entity. Intercompany
transactions and balances between Group companies are therefore eliminated in
full.
The consolidated financial statements incorporate the results of business
combinations using the purchase method. In the statement of financial
position, the acquiree's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained.
They are deconsolidated from the date control ceases.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Subsidiaries
The purchase method of accounting is used to account for the acquisition of
subsidiaries by the Group. The cost of an acquisition is measured as the fair
value of the assets given, equity instruments issued, and liabilities incurred
or assumed at the date of exchange, plus costs directly attributable to the
acquisition. Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are measured initially at their
fair values at the acquisition date, irrespective of the extent of any
minority interest. The excess of the cost of acquisition over the fair value
of the Group's share of the identifiable net assets acquired is recorded as
goodwill. If the cost of acquisition is less than the fair value of the net
assets of the subsidiary acquired, the difference is recognised directly in
the income statement.
Inter-company transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated
but considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair
value of the Group's share of the net identifiable assets of the acquired
subsidiary or associate at the date of acquisition. Goodwill on acquisitions
of subsidiaries is included in 'intangible assets'. Separately recognised
goodwill is tested annually for impairment and carried at cost less
accumulated impairment losses. Impairment losses on goodwill are not reversed.
Gains and losses on the disposal of an entity include the carrying amount of
goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment
testing. The allocation is made to those cash-generating units or groups of
cash-generating units that are expected to benefit from the business
combination in which the goodwill arose. The Group allocates goodwill to each
business segment in each country in which it operates.
Impairment of non-financial assets
Assets that have an indefinite useful life, for example goodwill, are not
subject to amortisation and are tested annually for impairment. Assets that
are subject to amortisation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the
asset's carrying amount exceeds its recoverable amount. The recoverable amount
is the higher of an asset's fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash-generating
units). Non-financial assets other than goodwill that suffered impairment are
reviewed for possible reversal of the impairment at each reporting date.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash-generating unit) is increased to the revised estimated of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior years.
A reversal of an impairment loss is recognised as income immediately, unless
the relevant asset is carried art a revalued amount in which case the reversal
of impairment loss is treated a revaluation increase.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Property, plant and equipment
Tangible non-current assets are stated at historical cost less depreciation.
Historical cost includes expenditure that is directly attributable to the
acquisition of the items.
Subsequent costs are included in the asset's carrying amount or recognised as
a separate asset, as appropriate, only when it is probable that future
economic benefits associated with the item will flow to the Group and the cost
of the item can be measured reliably. The carrying amount of the replaced part
is derecognised. All other repairs and maintenance are charged to the income
statement during the financial year in which they are incurred. Depreciation
is provided at the following annual rates in order to write off each asset
over its estimated useful life:
Plant and machinery - over 7 years
The assets' residual values and useful economic lives are reviewed, and
adjusted if appropriate, at each statement of financial position date. An
asset's carrying amount is written down immediately to its recoverable amount
if the asset's carrying amount is greater than its estimated recoverable
value. Gains and losses on disposals are determined by comparing the proceeds
with the carrying amount and are recognised within other (losses) or gains in
the income statement. When revalued assets are sold, the amounts included in
other reserves are transferred to retained earnings.
Investments
Investments are stated at cost less provision for any impairment value.
Cash and cash equivalents
Included in the statement of financial position comprise cash at bank and in
hand and other short-term highly liquid investments with original maturities
of three months or less.
For the purposes of the statement of cash flows, cash and cash equivalents
consist of cash and cash equivalents as defined above, net of outstanding bank
overdrafts.
Trade receivables
Trade receivables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method, less provision
for impairment. A provision for impairment is established when there is
objective evidence that the Group will not be able to collect all amounts due
according to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter bankruptcy
or financial reorganisation, and default or delinquency in payments are
considered indicators that the trade receivable is impaired.
Trade payables
Trade payables are recognised initially at fair value and subsequently
measured at amortised cost using the effective interest method.
Borrowings
Borrowings are recognised initially at fair value, net of transaction costs
incurred. Borrowings are subsequently stated at amortised cost; any difference
between the proceeds (net of transaction costs) and the redemption value is
recognised in the income statement over the year of the borrowings using the
effective interest method.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Borrowings (continued)
Borrowings are classified as current liabilities unless the Group has an
unconditional right to defer settlement of the liability for at least 12
months after the balance sheet date.
Functional currency translation
(i) Functional and presentation currency
Items included in the financial statements of the Group are measured using the
currency of the primary economic environment in which the entity operates (the
functional currency), which is mainly United States Dollars (US$). The
financial statements are presented in United States Dollars (US$), which is
the Group's presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the presentational currency
using exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at year-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income
statement.
(iii) Group Companies
All consolidated entities are presented in US$ and so no translation is
required on consolidation.
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.
Taxation
The tax expense represents the sum of the tax currently payable and deferred
tax. The tax currently payable is based on the taxable profit for the year.
Taxable profit differed from net profit as reported in the income statement
because it excludes items of income or expense that are taxable or deductible
in other years and it further excludes items that are never taxable or
deductible. The entity's liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by the statement of
financial position date.
Deferred tax
Deferred tax is recognised 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, and is accounted for using
the statement of financial position liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can
be utilised. Such assets and liabilities are not recognised if the temporary
arises from goodwill or from the initial recognition) other than in a business
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Deferred tax (continued)
combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax is reviewed at each statement of financial
position date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited directly to equity; in which case the deferred tax is
also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
Financial instruments
Financial assets and financial liabilities are initially classified as
measured at amortised cost, fair value through other comprehensive income, or
fair value through profit and loss when the Group becomes a party to the
contractual provisions of the instrument. Financial assets are derecognised
when the contractual rights to the cash flows expire, or the Group no longer
retains the significant risks or rewards of ownership of the financial asset.
Financial liabilities are derecognised when the obligation is discharged,
cancelled or expires.
Financial assets are classified dependent on the Group's business model for
managing the financial and the cash flow characteristics of the asset.
Financial liabilities are classified and measured at amortised cost except for
trading liabilities, or where designated at original recognition to achieve
more relevant presentation. The Group classifies its financial assets and
liabilities into the following categories:
Financial assets at amortised cost
The Group's financial assets at amortised cost comprise trade and other
receivables. These represent debt instruments with fixed or determinable
payments that represent principal or interest and where the intention is to
hold to collect these contractual cash flows. They are initially recognised
at fair value, included in current and non-current assets, depending on the
nature of the transaction, and are subsequently measured at amortised cost
using the effective interest method less any provision for impairment.
Financial liabilities at amortised cost
Financial liabilities at amortised cost comprise finance lease obligations and
trade and other payables. They are classified as current and non-current
liabilities depending on the nature of the transaction, are subsequently
measured at amortised cost using the effective interest method.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Financial instruments (continued)
Financial assets at fair value through profit and loss
The Group holds a derivative against the price of oil held for operation
purposes. These are recognised and measured at fair value using the most
recent available market price with gains and losses recognised immediately in
the profit and loss.
The fair value measurement of the Group's financial and non- financial assets
and liabilities utilises market observable inputs and data as far as possible.
Inputs used in determining fair value measurements are categorised into
different levels based on how observable the inputs used in the valuation
technique utilised are (the 'fair value hierarchy').
Level 1 Quoted prices in active markets
Level 2 Observable direct or indirect inputs other than Level 1 inputs
Level 3 Inputs that are not based on observable market data
The Group measures financial instruments relating to platform holdings at fair
value using Level 1.
The Company provides financial guarantees to licensed banks for credit
facilities extended to a subsidiary company. The fair value of such financial
guarantees is not expected to be significantly different as the probability of
the subsidiary company defaulting on the credit lines is remote.
Impairment of trade and other receivables
In accordance with IFRS 9 an expected loss provisioning model is used to
calculate an impairment provision. We have implemented the IFRS 9 simplified
approach to measuring expected credit losses arising from trade and other
receivables, being a lifetime expected credit loss. This is calculated based
on an evaluation of our historic experience plus an adjustment based on our
judgement of whether this historic experience is likely reflective of our view
of the future at the balance sheet date. In the previous year the incurred
loss model is used to calculate the impairment provision.
Oil and gas assets
The Group applies the successful efforts method of accounting for oil and gas
assets and has adopted IFRS 6 Exploration for and evaluation of mineral
resources.
Exploration and evaluation ("E&E") assets
Under the successful efforts method of accounting, all licence acquisition,
exploration and appraisal costs are initially capitalised in well, field or
specific exploration cost centres as appropriate, pending determination.
Expenditure incurred during the various exploration and appraisal phases is
then written off unless commercial reserves have been established or the
determination process has not been completed.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Pre-licence costs
Costs incurred prior to having obtained the legal rights to explore an area
are expensed directly to the income statement as they are incurred.
Exploration and evaluation ("E&E") costs
Costs of E&E are initially capitalised as E&E assets. 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 are capitalised as intangible E&E assets.
Tangible assets used in E&E activities (such as the Group's drilling rigs,
seismic equipment and other property, plant and equipment used by the
company's exploration function) are classified as property, plant and
equipment. However, to the extent that such a tangible asset is consumed in
developing an intangible E&E asset, the amount reflecting that consumption
is recorded as part of the cost of the intangible asset. Such intangible costs
include directly attributable overheads, including the depreciation of
property, plant and equipment utilised in E&E activities, together with
the cost of other materials consumed during the exploration and evaluation
phases.
E&E costs are not amortised prior to the conclusion of appraisal
activities.
Treatment of E&E assets at conclusion of appraisal activities
Intangible E&E assets relating to each exploration licence/prospect are
carried forward until the existence (or otherwise) of commercial reserves has
been determined, subject to certain limitations including review for
indications of impairment. If commercial reserves are discovered the carrying
value, after any impairment loss of the relevant E&E assets, is then
reclassified as development and production assets. If, however, commercial
reserves are not found, the capitalised costs are charged to expense after
conclusion of appraisal activities.
Development and production assets
Development and production assets are accumulated generally on a
field-by-field basis and represent the cost of developing the commercial
reserves discovered and bringing them into production, together with the
E&E expenditures incurred in finding commercial reserves transferred from
intangible E&E assets as outlined above.
The cost of development and production assets also includes the cost of
acquisitions and purchases of such assets, directly attributable overheads and
the cost of recognising provisions for future restoration and decommissioning.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Decommissioning liability
Where a material liability for the removal of production facilities and site
restoration at the end of the productive life of the assets exist, a provision
for decommissioning liability is recognised. The amount recognised is the
present value of estimated future expenditure determined in accordance with
local conditions and requirements. An intangible asset of an amount equivalent
to the provision is recognised and depreciated on a unit production basis.
Changes in estimates are recognised prospectively, with corresponding
adjustments to the provision and the associated intangible asset. Period
changes in the present value arising from discounting are included in
depletion, depreciation and amortisation cost in cost of sales.
Commercial reserves
Commercial reserves are proven and probable oil and gas reserves, which are
defined as the estimated quantities of crude oil, natural gas and natural gas
liquids which geological, geophysical and engineering data demonstrate with a
specified degree of certainty to be recoverable in future years from known
reservoirs and which are considered commercially producible.
Depletion, amortisation and impairment of oil and gas assets
All expenditure carried within each field is amortised from the commencement
of production on a unit of production basis, which is the ratio of oil and gas
production in the period to the estimated quantities of commercial reserves at
the end of the period plus the production in the period, on a field-by-field
basis. Costs used in the unit of production calculation comprise the net book
value of capitalised costs plus the estimated future field development costs
to access the related commercial reserves. Changes in the estimates of
commercial reserves or future field development costs are dealt with
prospectively.
Where there has been a change in economic conditions that indicates a possible
impairment in an oil and gas asset, the recoverability of the net book value
relating to that field is assessed by comparison with the estimated discounted
future cash flows based on management's expectations of future oil and gas
prices and future costs. Any impairment identified is charged to the income
statement as additional depletion and amortisation. Where conditions giving
rise to impairment subsequently reverse, the effect of the impairment charge
is also reversed as a credit to the income statement, net of any depreciation
that would have been charged since the impairment.
Share-based compensation
The fair value of the employee and suppliers' services received in exchange
for the grant of the options is recognised as an expense. The total amount to
be expensed over the vesting year is determined by reference to the fair value
of the options granted, excluding the impact of any non-market vesting
conditions (for example, profitability and sales growth targets).
Non-market vesting conditions are included in assumptions about the number of
options that are expected to vest. At each statement of financial position
date, the entity revises its estimates of the number of options that are
expected to vest. It recognises the impact of the revision to original
estimates, if any, in the income statement, with a corresponding adjustment to
equity. The proceeds received net of any directly attributable transaction
costs are credited to share capital (nominal value) and share premium when the
options are exercised.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Share-based compensation (continued)
The fair value of share-based payments recognised in the statement of
comprehensive income is measured by use of the Black Scholes model, which
takes into account conditions attached to the vesting and exercise of the
equity instruments. The expected life used in the model is adjusted; based on
management's best estimate, for the effects of non-transferability, exercise
restrictions and behavioural considerations. The share price volatility
percentage factor used in the calculation is based on management's best
estimate of future share price behaviour and is selected based on past
experience, future expectations and benchmarks against peer companies in
the industry.
The Group does not operate any cash-settled share-based payments and as such
are not affected by the amendments to IFRS 2 - Share-based payments.
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable
in relation to the proceeds by the prospects which the company has a working
interest in. Revenue is shown net of value-added tax, returns, rebates and
discounts and after eliminating sales within the Group. Revenue is recognised
when the oil and gas produced is despatched and received by the customers. The
directors consider this the point when the Company's performance obligation
is satisfied.
The directors consider that revenue generation is exclusively for oil
production in the US and so no further segmentation is required.
Leased assets
The Group as a lessee
A lease is defined as 'a contract, or part of a contract, that conveys the
right to use an asset (the underlying asset) for a period of time in exchange
for consideration'.
To apply this definition the Group assesses whether the contract meets three
key evaluations which are whether:
· the contract contains an identified asset, which is either
explicitly identified in the contract or implicitly specified by being
identified at the time the asset is made available to the Group
· the Group has the right to obtain substantially all of the
economic benefits from use of the identified asset throughout the period of
use, considering its rights within the defined scope of the contract
· the Group has the right to direct the use of the identified asset
throughout the period of use. The Group assess whether it has the right to
direct 'how and for what purpose' the asset is used throughout the period of
use.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
1. Summary of significant accounting policies (continued)
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a
lease liability on the balance sheet. The right-of-use asset is measured at
cost, which is made up of the initial measurement of the lease liability, any
initial direct costs incurred by the Group, an estimate of any costs to
dismantle and remove the asset at the end of the lease, and any lease payments
made in advance of the lease commencement date (net of any incentives
received).
The Group depreciates the right-of-use assets on a straight-line basis from
the lease commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term. The Group also assesses
the right-of-use asset for impairment when such indicators exist.
At lease commencement date, the Group recognises a right-of-use asset and a
lease liability on the balance sheet. The right-of-use asset is measured at
cost, which is made up of the initial measurement of the lease liability, any
initial direct costs incurred by the Group, an estimate of any costs to
dismantle and remove the asset at the end of the lease, and any lease payments
made in advance of the lease commencement date (net of any incentives
received).
The Group depreciates the right-of-use assets on a straight-line basis from
the lease commencement date to the earlier of the end of the useful life of
the right-of-use asset or the end of the lease term. The Group also assesses
the right-of-use asset for impairment when such indicators exist.
At the commencement date, the Group measures the lease liability at the
present value of the lease payments unpaid at that date, discounted using the
interest rate implicit in the lease if that rate is readily available or the
Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up
of fixed payments (including in substance fixed), variable payments based on
an index or rate, amounts expected to be payable under a residual value
guarantee and payments arising from options reasonably certain to be
exercised.
Subsequent to initial measurement, the liability will be reduced for payments
made and increased for interest. It is remeasured to reflect any reassessment
or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or profit and loss if the right-of-use
asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value
assets using the practical expedients. Instead of recognising a right-of-use
asset and lease liability, the payments in relation to these are recognised as
an expense in profit or loss on a straight-line basis over the lease term.
On the statement of financial position, right-of-use assets have been included
in property, plant and equipment and lease liabilities have been included in
trade and other payables.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
2. Critical accounting estimates and judgements
The preparation of consolidated financial statements requires the Group to
make estimates and assumptions that affect the application of policies and
reported amounts. Estimates and judgments are continually evaluated and are
based on historical experience and other factors including expectations of
future events that are believed to be reasonable under the circumstances.
Actual results may differ from these estimates. The estimates and assumptions
which have a significant risk of causing a material adjustment to the carrying
amount of assets and liabilities are discussed below:
Impairment of property, plant and equipment
Property, plant and equipment are reviewed for impairment if events or changes
in circumstances indicate that the carrying amount may not be recoverable.
When a review for impairment is conducted, the recoverable amount is
determined based on value in use calculations prepared on the basis of
management's assumptions and estimates.
Recoverability of exploration and evaluation costs
E&E assets are assessed for impairment when circumstances suggest that the
carrying amount may exceed its recoverable value including decommissioning
costs. This assessment involves judgment as to (i) the likely future
commerciality of the asset and when such commerciality should be determined,
and (ii) future revenues and costs pertaining to the asset in question, and
the discount rate to be applied to such revenues and costs for the purpose of
deriving a recoverable value.
Share-based payments
Note 1 sets out the Group's accounting policy on share-based payments,
specifically in relation to the share options and warrants that the Company
has granted. The key assumptions underlying the fair value of such share-based
payments are discussed in note 23. The fair value amounts used by the Group
have been derived by external consultants using standard recognised valuation
techniques.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
3. Segmental analysis
In the opinion of the directors, the Group has one class of business, being
the exploitation of hydrocarbon resources.
The Group's primary reporting format is determined by geographical segment
according to the location of the hydrocarbon assets. The Group's reportable
segments under IFRS 8 in the year are as follows:
United Kingdom - being the location of the head office.
US Mid-Continent properties at year end included the following:
· East Texas: 100% working interest in the Pine Mills oilfield
· East Texas: 32.5% working interest in the Cypress farmout area of
Pine Mills
· West Texas: 50-100% working interest leases located in the
Permian Basin
· South Texas: 100% working interest in the Caballos Creek oilfield
The chief operating decision maker's internal report for the year ended 31
December 2024 is based on the location of the oil properties as disclosed in
the below table:
SEGMENTAL RESULTS US mid-continent 2024 Head office Total
$'000 2024 2024
$'000 $'000
Revenue 2,038 - 2,038
Operating profit (loss) before depreciation, well impairment, share-based 700 (1,098) (398)
payment charges, restructuring costs and gain (loss) on sale of assets and
foreign exchange:
Depreciation of tangibles (383) - (383)
Amortisation of intangibles (253) - (253)
Share based payments - (41) (41)
Foreign exchange gain - (26) (26)
Operating profit/(loss) 64 (1,164) (1,100)
Finance expense (402) (7) (409)
Other income - - -
Profit/(loss) before taxation (338) (1,171) (1,509)
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
3. Segmental analysis (continued)
SEGMENTAL ASSETS US mid-continent 2024 Head office Total
$'000 2024 2024
$'000 $'000
Property, plant and equipment 1,196 - 1,196
Intangible assets 2,517 - 2,517
Cash and cash equivalents 13 93 106
Trade and other receivables 448 30 478
4,174 123 4,297
The chief operating decision maker's internal report for the year ended 31
December 2023 is based on the location of the oil properties as disclosed in
the below table:
SEGMENTAL RESULTS US mid-continent 2023 Head office Total
$'000 2023 2023
$'000 $'000
Revenue 2,816 - 2,816
Operating profit (loss) before depreciation, well impairment, share-based 1,470 (974) 496
payment charges, restructuring costs and gain (loss) on sale of assets and
foreign exchange:
Depreciation of tangibles (324) - (324)
Amortisation of intangibles (251) - (251)
Share based payments - (41) (41)
Foreign exchange gain (loss) (2) (4) (6)
Operating profit/(loss) 893 (1,019) (126)
Finance expense (351) (17) (368)
Other income 22 - 22
Profit/(loss) before taxation 563 (1,035) (472)
SEGMENTAL ASSETS
Property, plant and equipment 1,230 - 1,230
Intangible assets 2,389 - 2,389
Cash and cash equivalents 23 3 26
Trade and other receivables 552 24 576
4,194 27 4,221
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
4. Employees and Directors
2024 2023
$'000 $'000
Directors' fees 120 147
Directors' remuneration 230 190
Social security costs 9 13
359 350
2024 2023
Number Number
The average monthly number of employees (including directors)
during the year was as follows:
Directors 4 4
Directors' remuneration
Other than the directors, the Group had no other employees. Total remuneration
paid to directors during the year was as listed above.
The director's emoluments and other benefits for the year ended 31 December
2024 is as follows:
2024 2023
$'000 $'000
P Welch 136 -
J Newman - -
S Staley 64 -
J Stafford 39 -
M B Lofgran 111 190
5. Finance expense
2024 2023
$'000 $'000
Finance expense 409 368
Finance expense relates to interest charged on borrowings. Further details for
which can be found in note 18.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
6. Other income
2024 2023
$'000 $'000
Other income - 22
- 22
Other income relates to sundry income received from operating oil wells in
addition to the oil sales.
7. Operating loss
2024 2023
$'000 $'000
The operating loss the year ended 31 December is stated after
charging/ (crediting)
Depreciation of property, plant, and equipment 383 324
Amortisation of intangibles 253 251
Well impairment - -
The analysis of administrative expenses in the consolidated income statement
by nature of expense:
Directors' remuneration 230 190
Depreciation on ROU asset - -
Social security costs 9 13
Directors' fees 120 147
Travelling and entertainment 23 9
Accountancy fees 61 82
Legal and professional fees - 252
Auditors' remuneration 22 22
Bad debt costs - -
Other expenses 77 155
1,177 870
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
8. Income tax
The income tax charge for the year was as follows: 2024 2023
$'000 $'000
Current tax - -
Corporation tax - -
Overseas corporation tax - -
TOTAL - -
Loss before tax (1,509) (472)
Loss on ordinary activities before taxation multiplied by the
standard rate of UK corporation tax of 25% (2023:25%) (377) (118)
Effects of:
Non-deductible expenses 10 10
Other tax adjustments 367 108
CURRENT TAX CHARGE - -
At 31 December 2024, the Group had an estimated tax losses to carry forward of
$7,844,000 (2023: $6,375,110). The deferred tax asset at 25% (2023: 25%) on
these tax losses of $1,961,000 (2023: $1,593,778) has not been recognised due
to the uncertainty of recovery. The current US corporate tax rate is 21%.
9. Loss of Parent Company
As permitted by Section 408 of the Companies Act 2006, the income statement of
the parent company is not presented as part of these financial statements. The
parent company's loss for the financial year was $1,172,000 (2023:
$1,035,000).
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
10. Earnings per share
The calculation of earnings per ordinary share is based on earnings after tax
and the weighted average number of ordinary shares in issue during the year.
For diluted earnings per share, the weighted average number of ordinary shares
in issue is adjusted to assume conversion of all dilutive potential
ordinary shares. The Group had two classes of dilutive potential ordinary
shares, being those share options granted to employees and suppliers where the
exercise price is less than the average market price of the Group's ordinary
shares during the year, and warrants granted to directors and one former
adviser.
Details of the adjusted earnings per share are set out below:
2024 2023
GROUP
Loss attributable to ordinary shareholders ($'000) (1,509) (472)
Weighted average number of shares 1,925,182,923 746,520,534
CONTINUED OPERATIONS: (0.08) (0.06)
BASIC AND DILUTED EPS - LOSS (cents)
The diluted loss per share is the same as the basic loss per share as the loss
for the year has an antidilutive effect.
2024 2023
$'000 $'000
Gross profit before depreciation, depletion, amortisation and impairment 824 1,408
EPS on gross profit before depreciation, depletion, amortisation and 0.04 0.19
impairment (cents)
RECONCILIATION FROM GROSS PROFIT TO GROSS PROFIT BEFORE DEPLETION,
DEPRECIATION, AMORTISATION AND IMPAIRMENT
Gross profit 143 791
ADD BACK:
Exploration - -
Well impairment - -
Depletion, depreciation and amortisation 681 617
Gross profit before depletion, depreciation, amortisation and impairment 824 1,408
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
11. Intangible assets
GROUP Licences Exploration & evaluation assets Development & production assets Total
$'000 $'000 $'000 $'000
COST
At 1 January 2023 524 1,939 4,292 6,755
Additions - - 416 416
Disposals - - - -
At 31 December 2023 524 1,939 4,708 7,171
Additions - 106 349 454
Disposals - - (98) (98)
At 31 December 2024 524 2,045 4,959 7,529
PROVISION
At 1 January 2023 524 1,939 2,068 4,531
Charge for the year - - 251 245
Impairment - - - -
Disposals - - - -
At 31 December 2023 524 1,939 2,319 4,782
Charge for the year - - 253 253
Impairment - - - -
Disposals - - (24) (24)
At 31 December 2024 524 1,939 2,548 5,011
CARRYING VALUE - 106 2,411 2,517
At 31 December 2024
At 31 December 2023 - - 2,389 2,389
The Group assesses at each reporting date whether there is an indication that
the intangible assets may be impaired, by considering the net present value of
discounted cash flows forecasts. If an indication exists an impairment
review is carried out by reference to available engineering information.
Amortisation, impairment charges and any profit or loss on disposal of the
capitalised intangible costs is included within cost of sales in the
consolidated income statement.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
11. Intangible assets (continued)
COMPANY Development & production assets Total
$'000 $'000
COST
At 1 January 2023 398 398
Additions - -
Disposals - -
At 31 December 2023 398 398
Additions - -
Disposals - -
At 31 December 2024 398 398
PROVISION
At 1 January 2023 93 93
Charge for the year 42 42
Impairment - -
Disposals - -
At 31 December 2023 135 135
Charge for the year 39 39
Impairment - -
Disposals - -
At 31 December 2024 174 174
CARRYING VALUE 224 224
At 31 December 2024
At 31 December 2023 263 263
The Company assesses at each reporting date whether there is an indication
that the intangible assets may be impaired, by considering the net present
value of discounted cash flows forecasts. If an indication exists an
impairment review is carried out by reference to available engineering
information.
Amortisation, impairment charges and any profit or loss on disposal of the
capitalised intangible costs is included within cost of sales in the
consolidated income statement.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
12. Property, plant and equipment
GROUP Office space - Plant & equipment - oil and gas assets Total
right of use $'000 $'000
$'000
COST
At 1 January 2023 48 2,257 2,305
Additions - 248 248
Disposals - (2) (2)
At 31 December 2023 48 2,503 2,551
Additions - 530 530
Disposals - (250) (250)
At 31 December 2024 48 2,783 2,831
DEPRECIATION
At 1 January 2023 48 949 997
Charge for the year - 324 324
Disposals - - -
At 31 December 2023 48 1,273 1,321
Charge for the year - 382 382
Disposals - (68) (68)
At 31 December 2024 48 1,587 1,635
CARRYING VALUE - 1,196 1,196
At 31 December 2024
At 31 December 2023 - 1,230 1,230
Depreciation charges are included within cost of sales in the Consolidated
Income Statement.
In addition, the directors are of the opinion that no impairment should be
provided.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
12. Property, plant and equipment (continued)
COMPANY Plant & equipment - oil and gas assets Total
$'000 $'000
COST
At 1 January 2023 178 178
Additions 4 4
Disposals - -
At 31 December 2023 182 182
Additions - -
Disposals - -
At 31 December 2024 182 182
DEPRECIATION
At 1 January 2023 34 34
Charge for the year 18 18
Disposals - -
At 31 December 2023 52 52
Charge for the year 18 18
Disposals - -
At 31 December 2024 70 70
CARRYING VALUE 112 112
At 31 December 2024
At 31 December 2023 130 130
Depreciation charges are included within cost of sales in the Consolidated
Income Statement.
In addition, the directors are of the opinion that no impairment should be
provided.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
13. Leases
The Group has a lease for the office space in Dallas, Texas, USA. The
Company has entered into short-term lease effective from 1 February 2023 and
is annually renewed. The Group does not hold any other office leases. No
lease liabilities are presented in the Statement of Financial Position.
14. Fixed Asset Investments
COMPANY Investment in subsidiaries Loans to subsidiaries Total
$'000 $'000 $'000
COST
At 1 January 2023 1 15,434 15,435
Additions - - -
Reductions - - -
At 31 December 2023 1 15,434 15,435
Additions - - -
Disposals - - -
At 31 December 2024 1 15,434 15,435
PROVISON
At 1 January 2023 1 (15,434) (15,435)
Charge for the year - - -
Reductions - - -
At 31 December 2023 1 (15,434) (15,435)
Charge for the year
At 31 December 2024 1 (15,434) (15,435)
CARRYING VALUE
At 31 December 2024 - - -
At 31 December 2023 - - -
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
14. Fixed Asset Investments (continued)
In the opinion of the directors, the aggregate value of the Company's
investment in subsidiary undertakings is not less than the amount included in
the statement of financial position.
Historically, loans to participating interests are reported as an increase in
the Company's investment in the joint venture but have been provided for. As
the Group acquired 100% shareholding in the joint venture in 2017 this balance
had been transferred to loan to subsidiaries.
The details of the subsidiaries held at 31 December 2024 are as set
out below:
Shareholding Country of incorporation Nature of business
New Horizon Energy 1 LLC (NHE) 100% USA Oil & gas exploration
Buccaneer Operating, LLC (Buccaneer) 100% USA Oil & gas exploration
15. Trade and other receivables
GROUP COMPANY
2024 2023 2024 2023
$'000 $'000 $'000 $'000
CURRENT
Trade and other receivables 103 143 - -
Other taxes and receivables 376 405 30 24
479 548 30 24
The directors consider the carrying value of the receivables to approximate
their fair value.
16. Cash and cash equivalents
GROUP COMPANY
2024 2023 2024 2023
$'000 $'000 $'000 $'000
Bank current accounts 106 26 93 3
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
17. Trade and other payables
GROUP COMPANY
2024 2023 2024 2023
$'000 $'000 $'000 $'000
CURRENT
Trade payables 729 779 554 594
Amounts owed to group undertakings - - 2,748 3,108
Accruals and deferred income 71 86 37 52
Other taxes payables 3 3 3 3
Other payables 119 56 119 45
922 924 3,461 3,802
Decommissioning liability 428 382 42 30
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and on-going expenses. The directors consider that the carrying
amount of trade and other payables approximates their fair value.
Trade payables and accruals principally comprise amounts outstanding for trade
purchases and on-going expenses. The directors consider that the carrying
amount of trade and other payables approximates their fair value.
Included in trade payables is the decommissioning liability, this has been
calculated at a discount rate of 10% and an inflation factor of 3%. This is
comparable to the Group's options at the time of the well in-service dates.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
18. Financial liabilities - borrowing
GROUP COMPANY
Maturity of the borrowings is as follows: 2024 2023 2024 2023
$'000 $'000 $'000 $'000
Repayable within one year
Bank loan - - - -
Other loans 49 110 49 110
Repayable after one year
Bank loan 4,247 4,247 - -
Other loans - 72 - 72
4,296 4,429 49 182
Borrowings include a facility where the loans are secured against the Group's
interest in its assets. At the year end the outstanding balance was $4,247,000
(2023: $4,247,000). Interest is currently charged for any day per annum at
8.75%. In January 2025 the nominal facility of $10 million was extended by
three years to 29 January 2028. The Borrowing Base was determined to be US
$10,452,850 based on improved production and cashflow during 2024. The size of
the Facility and Borrowing Base will be reassessed at least twice yearly. The
Board anticipates the Facility and Borrowing Base will increase as the
Company's production and reserves increase.
The Group also has other loans with a total outstanding balance as at the
year-end of $49,000 (2023: $182,000), with interest charged at 8% per year.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
19. Share capital
Number Class Nominal 2024 2023
value $'000 $'000
746 Million Ordinary £0.00100 - 1,593
4,775 million Ordinary £0.00010 673 -
4,110 million (2023: 4,110 million) Deferred £0.00098 6,549 6,549
1,022 million New Deferred £0.00090 1,749 -
On 17 July 2024 the existing 1,022 million shares of nominal value £0.001
were subdivided into one Ordinary Share of £0.0001 and Deferred Share of
£0.0009 each.
During the year there were a number of shares Issues:
· 11 January 2024 - 275,000,000 new ordinary shares issued at
£0.0012. 100,000,000 were subscription shares, 150,000,000 were fundraise
shares & 25,000,000 were note conversion shares.
· 29 July 2024 - 1,539,999,998 new ordinary shares issued at
£0.0003 in respect of fund raise.
· 20 September 2024 - 40,000,000 new ordinary shares issued at
£0.0005 in respect of fund raise.
· 21 November 2024 - 2,173,913,042 new ordinary shares issued at
£0.00023 in respect of fund raise.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
20. Risk and sensitivity analysis
The Group's activities expose it to a variety of financial risks: interest
rate risk, liquidity risk, foreign currency risk, capital risk and credit
risk. The Group's activities also expose it to non-financial risks: market,
legal and environment risk. The Group's overall risk management programme
focuses on unpredictability and seeks to minimise the potential adverse
effects on the Group's financial performance. The board, on a regular basis,
reviews key risks and, where appropriate, actions are taken to mitigate
the key risks identified.
Capital risk
The Group's objectives when managing capital are to safeguard the ability to
continue as a going concern in order to provide returns for shareholders and
benefits to other stakeholders and to maintain an optimal capital structure to
reduce the cost of capital.
Market risk
The Group also faces risks in conducting operations in US mid-continent, which
include but are not limited to:
· Fluctuations in the global economy could disrupt the Group's
ability to operate its business in the US Mid-Continent and could discourage
foreign and local investment and spending, which could adversely affect its
production.
Environmental risk
The Group faces environmental risks in conducting operations in the US
Mid-Continent which include but are not limited to:
· If the Group is found not to be in compliance with applicable
laws or regulations, it could be exposed to additional costs, which might
hinder the Group's ability to operate its business.
Credit risk
The Group's principal financial assets are bank balances and cash, trade and
other receivables. The Group's credit risk is primarily attributable to its
trade receivables. The amounts presented in the balance sheet are net of
allowances for doubtful receivables. An allowance for impairment is made where
there is an identified loss which, based on previous experience, is evidence
of a reduction in the recoverability of the cash flows.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
20. Risk and sensitivity analysis (continued)
Volatility of crude oil prices
A material part of the Group's revenue will be derived from the sale of oil
that it expects to produce. A substantial or extended decline in prices for
crude oil and refined products could adversely affect the Group's revenues,
cash flows, profitability and ability to finance its planned capital
expenditure. West Texas Intermediate ("WTI") oil prices ranged from $66.37 to
$85.35 in 2024 and $70.25 to $89.43 in 2023. The Group had no hedging activity
during 2024.
Interest rate risk
The Group does not hedge this risk. At 31 December 2024, the Group had
borrowings of $4,296,000 (2023: $4,429,000), with total interest for the year
of $409,000 (2023: $369,000). A 100-basis point change in the rates will
increase finance costs by $43,140.
Liquidity risk
The Group expects to fund its exploration and development programme, as well
as its administrative and operating expenses throughout 2024, principally
using existing working capital and expected proceeds from the sale of future
crude oil production. The Group had a bank balance of approximately $106,000
at 31 December 2024 (2023: $26,000).
Cash flow risk
The Group expects to have sufficient working capital to continue operations
and to remain cash flow positive through 2024. This will be continuously
monitored and reviewed by the directors through the inclusion of regular cash
flow forecasts in management reports.
21. Financial commitments
Capital commitments
The Group had no material capital commitments at the year-end.
22. Related party transactions
Group
No related party transactions other than those highlighted below.
Company
At the year end, the Company owed its subsidiaries $2,747,000 (2023:
$3,108,000) in respect of intercompany loans that are unsecured and
interest-free.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
23. Share-based payments
The Group has a share-ownership compensation scheme for senior executives
of the Group whereby senior executives may be granted options to purchase
ordinary shares in the Company. The Group has previously issued warrants to
senior executives as a welcome incentive and to third parties as consideration
for their services. A share-based payment charge of $40,647 (2023: $40,481)
for share options was expensed during the year.
Date of grant At 31.12.23 Granted Exercised Expired At 31.12.24 Exercise price Exercise/
vesting date
pence From To
Warrants
11/01/24 - 17,000,000 - - 17,000,000 0.012* 11/01/24 10/01/27
29/07/24 - 41,000,000 - - 41,000,000 0.03 29/07/24 28/07/26
Options
29/10/14 300,000 - - 300,000 - 0.04* 29/10/14 28/10/24
04/06/18 9,500,000 - - - 9,500,000 0.5* 04/06/18 03/06/25
29/09/20 5,000,000 - - - 5,000,000 0.05* 29/09/20 29/09/27
29/09/20 5,000,000 - - - 5,000,000 0.075* 29/09/20 29/09/27
29/09/20 5,000,000 - - - 5,000,000 0.1* 29/09/20 29/09/27
29/09/20 733,333 - - - 733,333 0.05* 29/09/20 29/09/27
29/09/20 733,333 - - - 733,333 0.075* 29/09/20 29/09/27
29/09/20 733,334 - - - 733,334 0.1* 29/09/20 29/09/27
29/09/20 1,666,666 - - - 1,666,666 0.05* 29/09/20 29/09/27
29/09/20 1,666,667 - - - 1,666,667 0.075* 29/09/20 29/09/27
29/09/20 1,666,667 - - - 1,666,667 0.1* 29/09/20 29/09/27
29/09/20 1,333,333 - - - 1,333,333 0.05* 29/09/20 29/09/27
29/09/20 1,333,333 - - - 1,333,333 0.075* 29/09/20 29/09/27
29/09/20 1,333,334 - - - 1,333,334 0.1* 29/09/20 29/09/27
* Prices have been divided by 10 to reflect the subdivision of Ordinary Shares
from 0.1p to 0.01p on 19 July 2024.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
23. Share-based payments (continued)
The total number of options and warrants outstanding at 31 December 2024 and
31 December 2023 are as follows:
Total at 31 December 2024: 93,700,000
Total at 31 December 2023: 36,000,000
The number of options and warrants outstanding to the directors at the
year-end were as follows:
Director Warrants Options Total Warrants & Options
2024 2023 2024 2023 2024 2023
M Lofgran - - 21,000,000 21,300,000 21,000,000 21,300,000
S Staley - - 5,000,000 5,000,000 5,000,000 5,000,000
J Stafford - - 5,500,000 5,500,000 5,500,000 5,500,000
Total - - 31,500,000 31,800,000 31,500,000 31,800,000
The estimated fair value of the warrants issued in previous years was
calculated by applying the Black-Scholes option pricing model. Volatility is
based on historic share prices of the Company. The assumptions used in the
calculation were as follows:
Warrants 11 Jan 2024 29 Jul 2024
Share price at grant date 0.12p 0.03p
Exercise price 0.012p* 0.03p
Option life in years 3 years 2 years
Risk free rate 3.79% 3.60%
Expected volatility 57% 125%
Expected dividend yield 0% 0%
Fair value of option/warrant 0.043p 0.018p
Weighted average remaining life (years) 2.03 1.58
* Prices have been divided by 10 to reflect the subdivision of Ordinary Shares
from 0.1p to 0.01p on 17 July 2024.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
23. Share-based payments (continued)
Options 28 Oct 2014 4 June 2018 - Directors 29 Sep 2020 29 Sep 2020
Share price at grant date 2.65p 2.50p 0.38p 0.38p
Exercise price 0.04p* 0.5p* 0.05p* 0.075p*
Option life in years 10 years 7 years 7 years 7 years
Risk free rate 1% 1% 1% 1%
Expected volatility 50% 50% 50% 50%
Expected dividend yield 0% 0% 0% 0%
Fair value of option/warrant 0.13p 1.85p 0.16p 0.50p
Weighted average remaining life (years) - 0.43 2.75 2.75
Options 29 Sep 2020
Share price at grant date 0.38p
Exercise price 0.1p*
Option life in years 7 years
Risk free rate 1%
Expected volatility 50%
Expected dividend yield 0%
Fair value of option/warrant 0.26p
Weighted average remaining life (years) 2.75
* Prices have been divided by 10 to reflect the subdivision of Ordinary Shares
from 0.1p to 0.01p on 19 July 2024.
Notes to the Financial Statements (continued)
For the year ended 31 December 2024
24. Contingent liabilities and guarantees
The Group has no contingent liabilities in respect of legal claims arising
from the ordinary course of business and it is not anticipated that any
material liabilities will arise from contingent liabilities other than those
provided for.
25. Ultimate controlling party
The Company is quoted on the AIM market of the London Stock Exchange. At the
date of the annual report there was no one controlling party.
26. Events after the reporting period
On 4 March 2025 the Company raised £500,000 (before expenses) through a
subscription and placing of 2,173,913,043 new ordinary shares at a price of
0.023p per share.
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