REG - Pennpetro Energy PLC - Annual Report and Financial Statements
25/09/2025 09:30
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RNS Number : 8147A Pennpetro Energy PLC 25 September 2025
25th September 2025
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REGULATION 2014/596/EU WHICH IS PART OF DOMESTIC UK LAW PURSUANT TO THE MARKET
ABUSE (AMENDMENT) (EU EXIT) REGULATIONS (SI 2019/310) ("UK MAR"). UPON THE
PUBLICATION OF THIS ANNOUNCEMENT, THIS INSIDE INFORMATION (AS DEFINED IN UK
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Pennpetro Energy Plc
("Pennpetro" or the "Company")
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 MARCH 2024
CONTENTS
Page
Company Information 2
Chairman's Statement 3
Chief Executive Officer's Report 4
Strategic Report 5
TCFD Disclosures 7
Directors' Report 11
Directors' Information 15
Statement of Directors' Responsibilities 16
Corporate Governance Report 17
Directors' Remuneration Report 19
Audit Committee Report 22
Independent Auditor's Report 24
Consolidated Statement of Comprehensive Income 28
Consolidated Statement of Financial Position 29
Company Statement of Financial Position 30
Consolidated Statements of Changes in Equity 31
Company Statements of Changes in Equity 32
Consolidated Statements of Cash Flows 33
Company Statements of Cash Flows 34
Notes to the Financial Statements 35
COMPANY INFORMATION
Directors Olof Nils Rapp (Senior Non-Executive Director)
Stephen Lunn (Chairman) (appointed 22 September 2024)
Robert Menzel (Executive Director) (appointed 21 January 2025)
Secretary MSP Corporate Services Limited
Registered Office 6 Heddon Street
London, W1B 4BT
Legal Advisors UK Legal Advisers US Legal Advisers
DMH Stallard LLP Walne Law, PLLC
6 New Street Square 4900 Woodway
New Fetter Lane, London Houston, Texas
EC4A 3BF TX 77056
Porter Hedges LLP
1000 Main Street, 36th Fl.
Houston, Texas
TX 77002
Corporate broker Peterhouse Capital Limited Capital Plus Partners Limited
3rd Floor 4(th) Floor
80 Cheapside 49 St James Street
London London
EC2V 6EE SW1A 1JT
Independent Auditor Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Registrars Computershare Investor Services plc
The Pavilions
Bridgewater Road
Bristol
BS13 8AE
Communications Flagstaff Strategic and Investor Communications
1 King Street
London
EC2V 8AU
Registered Number 10166359
Chairman's Statement
Dear Shareholders,
Since Pennpetro Energy Plc's (the "Company" or "PPP") last annual report,
there have been significant changes within the Pennpetro Energy Plc Group (the
"Group").
The recent appointments of both the Chairman and the Chief Executive Officer
(the "CEO") have taken place after 31 March 2024.
It is important to note that neither Stephen Lunn (appointed Non-Executive
Director in September 2024, or Robert Menzel (appointed CEO in January 2025)
were in office during this reporting period. The sudden passing of the Company
Secretary in April 2024, who was acting through a corporate structure and was
the sole signatory on the Company's bank account, caused significant delays in
obtaining the necessary financial information for the audit of these Financial
Statements.
The Board has been working closely with the Company's accountants, auditors
and lawyers to present these annual financial statements for the year ended 31
March 2024. Shareholders and Directors have understandably been extremely
frustrated with the ongoing delay in finalising these accounts. The Board has
been tasked with filling in the gaps of information in both the UK and USA and
are confident that the information provided in this report is both accurate
and complete to the best of their knowledge except for the unidentified
expenditure as disclosed later in these financial statements.
As the shareholders are aware, the company was suspended from trading on 1
August 2024 and, consequently, utilising the opening balance from the 31 March
2023, the Directors have made some very important decisions in respect of the
company's ongoing position to ensure that proper corporate governance is
installed to improve the rigour of the financial reporting processes going
forward.
Stephen Lunn was appointed as a non-executive director on 22 September 2024
and after the resignation at short notice of the previous chairman, David
Lenigas, filled the position of Chairman.
On 16 December 2024, Tom Evans resigned at short notice and Stephen Lunn
became the interim CEO until the formal appointment of Robert Menzel on 21
January 2025.
The new Board of Directors has carefully reviewed the company's financial
position to ensure that they give a true and fair view of the state of affairs
of the Company and Group as at the end of the financial year and of the loss
recorded by the Group for that period as far as can be supported by the
evidence available to the Board of Directors.
Stephen Lunn
Chairman
24 September 2025
Chief Executive Officer's Report
Nobel Petroleum USA Inc. ("Nobel USA") a wholly owned subsidiary of PPP,
entered into a Participation, Development and Option Agreement ("PDA") with
Millennium PetroCapital Corporation ("Millenium") on March 15, 2023 relating
to the Whistling Straits #5H well ("5H"), to be sidetracked from the 3H well.
Nobel would earn 25% WI in exchange for paying 33.33% of the costs to drill
and complete the well. The 5H well was spud on March 21, 2023 and was
completed as a potential oil producer on April 13, 2023.
Nobel acquired Millennium's interest in the 5H well on June 22, 2023 via the
Whistling Straits Letter Agreement. Apart from the well, Nobel also assumed
100% WI in the 2036.38 acres of leaseholdings and an option to acquire the 1H
and 4H wells and executed an Equipment Lease Agreement, which was subsequently
extended and replaced by a revised version.
The option to acquire the 1H and 4H wells was exercised on August 17, 2023
with the Wellbore Assignment, Bill of Sale and Assumption Agreement. The Texas
Railroad Commission ("RRC") approved the Chalk Talk well assignment on August
25, 2023.
Production Figures on Peach Creek (Austin Chalk) Whistling Straits 1H well
amounted to 7,363 barrels and 1,550 barrels for well 4H, amounting to a total
production for the year of 8,913 barrels equalling US$493,005.
There was no production recorded from our City of Gonzales COG "1" well.
With regard to the operating results, the Board has reviewed and concluded
that a level of impairment of the company's assets is necessary amounting to
US$7.1m. The impairment could be reversed in future periods depending on the
outcome of establishing the status of mineral leases. The Board is working
closely with relevant authorities to reach a conclusion in this regard.
The impairments are necessary to place the company in good standing for future
activities. A number of opportunities are under consideration which will
permit future growth, enhance shareholder value, and provide a strong platform
for further capital raising.
Robert Menzel
CEO
24 September 2025
For further information, please contact:
Pennpetro Energy PLC
Stephen Lunn, Chairman stephengarylunn@gmail.com (mailto:stephengarylunn@gmail.com)
Robert Menzel, CEO info@pennpetro.co.uk (mailto:info@pennpetro.co.uk)
Capital Plus Partners Ltd (Company Broker)
Philip Reid, Chairman pjr@capplus.co.uk (mailto:uk)
Ben Tadd bt@capplus.co.u (mailto:bt@capplus.co.uk) k (mailto:bt@capplus.co.uk)
+44 (0)20 3821 6167
Flagstaff Strategic and Investor Communications
Tim Thompson pennpetro@flagstaffcomms.com (mailto:pennpetro@flagstaffcomms.com)
Alison Allfrey +44 (0)20 7129 1474
Anna Probert
NOTES TO EDITORS:
Pennpetro Energy is an independent oil and gas company. Shares in the company
were admitted to the Official List of the London Stock Exchange by way of a
Standard Listing on 21 December 2017 with the ticker symbol "PENNPETRO".
Strategic Report
The Directors present their strategic report on the group for the year ended
31 March 2024.
Principal Activities
The principal activity of the Group is onshore oil and gas exploration and
production in the United States of America. Pennpetro Energy Plc acts as a
holding company and provides direction and other services to its subsidiaries.
Pennpetro USA Corp., holds 100% of the US operational subsidiary Nobel
Petroleum USA, Inc. ("Nobel USA"), an independent oil and gas production
company based in the City of Gonzales, Gonzales County, Texas, USA. Nobel
USA's core area of business is in the Austin Chalk and Eagleford Shale oil and
gas horizontal formations together with the lower oil and gas reservoir, the
Buda Formation in South Texas, United States.
Strategic Approach
The Board's strategic intent is to maximise shareholder value through the
continuing investment into new wells and leases in proven US onshore
formations and participating alongside established operators in multiple
wells, while further reducing costs, where applicable.
The Company provides shareholders with exposure to the high growth associated
with the producing oil and gas sector. This is achieved with a low overhead
base.
Review of Business
On 27 June 2023 the Group signed agreements to increase its stake in Whistling
Straits 5H well from 25% interest to 100% interest with 75% net revenue
interest. In November, Chalk Talk 1 well began producing oil at an average of
161 bopd which saw regular revenues for the Group through to April 2024. The
well then experienced a number of top-of-well and bottom-of-well technical
issues requiring intervention and resulted in a sustained fall in overall
daily production. Technical issues have also been encountered at Whistling
Straits 5H well which has slowed progress for the Group. After the reporting
period, a deal Heads of Terms was signed with Globalvision International U.
LDA ("Globalvision") whereby they will purchase 100% of the issued share
capital in the Company's subsidiary Nobel USA, for a life of asset royalty on
the City of Gonzales #1 Well, Chalk Talk #1 Well, Chalk Talk #4 Well and
Whistling Straits #5 Well, securing long term positive cash flow for the
Group.
The sudden passing of the Company Secretary in April 2024, who was acting
through a corporate structure and was the sole signatory on the Company's bank
account, caused significant delays in obtaining the necessary financial
information of the audit of these Financial Statements.
The Board have been working closely with the Company's accountants and
auditors to present these financial statements and to fill gaps where
required. Note 7 discloses an amount of unknown expenditure for which the
Board are unable to provide supporting documentation. During the course of
reviewing these gaps of information, the Board undertook a review of the
Group's lease portfolio and identified a number of leases where the validity
and enforceability of the leases is uncertain. In light of this uncertainty,
the Board has resolved to impair the related asset values until clarity over a
final decision has been obtained.
Financial Performance Review
The loss of the Group for the year ended 31 March 2024 amounts to $8,897,048
(15 month period ended 31 March 2023: loss of $318,902).
The Board monitors the activities and overall performance of the Group on a
regular basis by reference to certain key milestones. The main Key Performance
Indicators ("KPIs") for the Group are as follows:
KPIs 2024 2023
$ $
(763,259) (389,892)
Net cash flows from operating activities
6,266 129,016
Cash and short-term investments
Participation in well drilling programmes are monitored on an individual
project basis in terms of revenue and cost per barrel of oil or Mcf (one
thousand cubic feet) of gas, together with the anticipated payback period on
each project.
Board diversity
Although the Board consisted of four male Directors, the Board supports
diversity in the boardroom. Aside from the Directors, there are no employees
in the Company. The Board will pursue an equal opportunity policy and seek to
employ those persons most suitable to delivering value for the Company.
Corporate responsibility
The Group operates a management system that embodies Environmental, Health,
Safety and Social Responsibility principles.
A number of objectives have been set by the Board to address these principles
and the Executive director is responsible for demonstrating to the Board that
these principles are adhered to in its US Oil and Gas operation.
The policy of the Board of Pennpetro is to be fully accountable for the
necessary practices, procedures and means being in place so as to ensure that
each objective is demonstrated and that continuous improvement practices are
operating to ensure that the required practices, procedures and means are
being monitored, refined and optimised as necessary.
The objectives of the Environmental, Health, Safety and Social Responsibility
Policy include:
• The Group shall manage all operations in a manner that protects the
environment and the health and safety of employees, third parties and the
community.
• Risk identification, assessment and prioritisation can reduce risk and
mitigate hazards to employees, third parties, the community and the
environment. Management of risk is a continuous process.
• The use of internationally recognised standards, procedures and
specifications for design, construction and commissioning activities are
essential for achieving operational excellence.
• The minimisation of environmental risks and liabilities are integral
parts of the Group's operations.
• Third parties who provide materials and services or operate facilities
on the Group's behalf have an impact on Environmental, Health and Safety and
Social Responsibility excellence. It is essential that third-party services
are provided in a manner consistent with the Group's Policy.
• Preparedness and planning for emergencies are essential to ensuring
that all necessary actions are taken if an incident occurs, to protect
employees, third parties, the public, the environment, the assets and brand of
Pennpetro.
• Open and honest communication with the communities, authorities and
stakeholders with which the Group operates builds confidence and trust in the
integrity of Pennpetro.
• The Group has determined that the greenhouse gas emissions from the
operations of the Company and its subsidiaries are sufficiently low that it
does not have responsibility to produce the disclosures required under the
Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013.
The reason for this is that there was only limited activity from its US based
operating subsidiary during the current and prior period.
During the year to 31 March 2024, the Group closely monitored the limited
drilling, completion and production operations of its 5H well and there have
been no breaches of any applicable Acts recorded against the Group during the
reporting period.
Task Force on Climate-related Financial Disclosures (TCFD)
This section of the report sets out our climate-related disclosures in
relation to the four pillars of the TCFD framework; Governance, Strategy, Risk
Mitigation and Metrics & Targets.
Governance
The Board of Directors is responsible for oversight of climate related risks
and opportunities - refer to the principal risk exposure on climate related
matters on page 10. Climate related risks and opportunities are reviewed each
six months.
Strategy
The principal focus of environmental risk is around potential flaring gas
related issues but is highly cognisant as to the impact of climate change
issues prevailing within the petroleum industry.
The Company's operational activity is situated in Texas, where weather
patterns can influence activities. The county of Gonzales where activities are
located can be impacted by windstorms and especially hurricanes during certain
months of the year. This can lead to flooding of operational sites as has
happened to the Company in the past resulting in severe flooding to drilling
operations, resulting in additional expenditures for water recovery.
Risk Management
The Board of Directors is responsible for identifying and assessing climate
related risks. Although there's currently no formal process for this, the
Board is considering developing one as the Group's activities are expected to
increase in the coming years.
As current onsite operations are limited at present, there have not been
significant physical environmental risks identified. The Board works with the
operator at its sites to ensure measures are in place to mitigate the impact
of climate-related risks such as flooding or storm damage.
The Directors also monitor the activities of the Texas petroleum authority -
the Texas Railroad Commission - regarding obligations and regulatory matters
with operational requirements on both a State and Federal perspective such
that the Company can be pro-active in complying with new requirements.
Metrics and Targets
The Group has limited operational and administrative activity at present and
hence the Directors are in the process of developing climate related metrics
and targets appropriate to the current extent of operations. The Group
performs regular checks of air quality operational equipment and analyses the
results against local township vectors.
The Directors have assessed there to be limited Scope 1 and Scope 3 emissions
from the Group's administrative and operational activities; Scope 3 emissions
relating to the supply chain have not yet been evaluated.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into
consideration the interests of stakeholders and other matters in their
decision making. The Directors continue to have regard to the interests of the
Company's employees and other stakeholders, the impact of its activities on
the community, the environment and the Company's reputation for good business
conduct, when making decisions. In this context, acting in good faith and
fairly, the Directors consider what is most likely to promote the success of
the Company for its members in the long term. We explain in this annual
report, and referenced herein, how the Board engages with stakeholders.
Promotion of the Company for the benefit of the members as a whole
The Director's believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as a whole, as required
by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
· Consider the likely consequences of any decision in the long term,
· Act fairly between the members of the Company,
· Maintain a reputation for high standards of business conduct,
· Consider the interests of the Company's employees,
· Foster the Company's relationships with suppliers, customers and
others, and
· Consider the impact of the Company's operations on the community
and the environment.
The Company is quoted on the London Stock Exchange, and its members will be
fully aware, through detailed announcements, shareholder meetings and
financial communications, of the Board's broad and specific intentions and the
rationale for its decisions. The application of the s172 requirements are
demonstrated throughout this report and the financial statements as a whole,
with the following examples representing some of the key decisions made in
this reporting period and up to the date of approval of these financial
statements:
The likely consequences of any decision in the long term
The application of the Section 172 (1) requirements can be demonstrated in
relation to some of the key decisions made during the reporting period,
including:
· Continuing to invest in work on numerous projects across Texas
· Continuing to focus on strategic partnerships with the JV partner
· Continued assessment of corporate and operational overheads and
expenditure
The need to act fairly between members of the Company
After weighing up all relevant factors, the Directors consider which course of
action best enables delivery of our strategy over the long-term, taking into
consideration the impact on stakeholders. The Directors believe they have
acted in the way they consider most likely to promote the success of the
Company for the benefit of its members as a whole.
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders. The Company has close ongoing
relationships with key private shareholders, analysts, and brokers, providing
the opportunity to discuss issues and provide feedback at meetings with the
Company. All shareholders are encouraged to attend the Company's Annual
General Meeting and any general meetings held by the Company.
The desirability of the Company maintaining a reputation for high standards of
business conduct
The Board periodically reviews and approves clear frameworks to ensure that
its high standard are maintained both within the Group and the business
relationships we maintain. This, complemented by the various ways the Board is
informed and monitors compliance with relevant governance standards, help
ensure its decisions are taken and that the Group acts in ways that promote
high standards of business conduct.
The interests of the Company's employees
The Board recognises that the Company's employees are fundamental and core to
our business and delivery of our strategic ambitions. The success of our
business depends on attracting, retaining and motivating employees. From
ensuring that we remain a responsible employer, from pay and benefits to our
health, safety, and workplace environment, the Directors factor the
implications of decisions on employees and the wider workforce, where relevant
and feasible.
The fostering of relationships with suppliers, customers and others
Delivering on our strategy requires strong mutually beneficial relationships
with suppliers. The Group values all of its suppliers and aims to build strong
positive relationships through open communication and adherence option
agreement terms. The Group is committed to being a responsible entity and
doing the right thing for its suppliers and business partners.
The impact of the Company's operations on the community and the environment
The Group is committed to the highest environmental, social and governance
standards both internally and within the Group and externally with its
partners. The Group is committed to being a responsible entity in terms of the
community and the wider environment. As a mining exploration Company operating
in Texas, the Board takes seriously its ethical responsibilities to the
communities and environment in which it works. We abide by the local and
relevant UK laws on anti-corruption & bribery. The Company, recognizing
the global impact of environmental concerns, initiated due diligence to expand
its experiences and core competencies in the fossil energy sector to specific
green energy initiatives. These initiatives were secured with US intellectual
property filings and are being expanded internationally.
Conclusion
The Directors believe that to the best of their wisdom and abilities, they
have acted in the way they consider prudent to promote the success of the
Company for the benefit of its members as a whole, in the true spirit of the
provisions of Section 172 (1) of the Companies Act 2006.
Principal Risks and Uncertainties
The Group's activities expose it to a variety of risks and uncertainties.
Market risk
The Group operates in an international market for hydrocarbons and is exposed
to risk arising from variations in the demand for and price of the
hydrocarbons. Oil and gas prices historically have fluctuated widely and are
affected by numerous factors over which the Group does not have any control,
including world production levels, international economic trends, currency
exchange fluctuations, inflation, speculative activity, consumption patterns
and global or regional political events. The Group will consider hedging
against the risks of fluctuating oil prices and currency exchange once
commercial production recommences.
Environmental risk
The Group's operations are subject to environmental regulation in all the
jurisdictions in which it operates. The Group is unable to predict the effect
of additional environmental laws and regulations which may be adopted in the
future, including whether any such laws or regulations would adversely affect
the Group's operations. There can be no assurance that such new environmental
legislation once implemented will not oblige the Group to incur significant
expenses and undertake significant investments. The Group identifies, assesses
and prioritises environmental risks on an ongoing basis, as part of its
management system.
Oil and gas exploration and production risks
Whilst Nobel Petroleum USA, Inc., a Group subsidiary, took over the
operatorship during 2019 with the formal approval of the regulator, the Texas
Railroad Commission, and is the Working Interest owner, the previous operator
is still engaged under sub-contracting terms. This allows the Group to fully
integrate its operational teams in Houston.
Although it does not engage in exploration activities, per se, it might engage
in some limited exploration activity if it was in an area offsetting producing
assets and the Company decided such activity was worthwhile on a minimised
risk basis to enhance its lease profile. There are significant risks and
hazards inherent in the exploration and production of oil and gas, including
environmental hazards, industrial incidents, labour disputes, fire, drought,
flooding and other acts of God. The occurrence of any of these hazards can
delay or interrupt production and increase production costs. The Group
operates a management system that embodies Environmental, Health, Safety and
Social Responsibility principles in order to mitigate these hazards.
There is no guarantee that oil and/or gas will be discovered in any of the
Group's existing or future licenses/permitted acreage or that commercial
quantities of oil and/or gas can be recovered.
Licences and title
The leases in which the Group has or is seeking to have an interest will be
subject to termination after the primary term of such leases unless there is
current production of oil and/or gas in commercial quantities. If a lease is
not extended after the primary term, the Group may lose the opportunity to
develop and discover any hydrocarbon resources on that lease area. The Group
would then not be able to continue to access or benefit from these leased
assets, which could result in a loss of future economic benefits. Since the
year end, it has been identified that the primary term of some leases has
expired and not been extended. In response, the Board has taken the prudent
approach to impair the assets associated with these leases in these financial
statements, reflecting the uncertainty over title to those leases.
This report was approved by the Board on 24 September 2025 and signed on its
behalf:
Stephen Lunn
Chairman
Directors' Report
The Directors present their Annual Report and the audited Financial Statements
for the year ended 31 March 2024.
The new UK Listing Rules, which came into force on 29 July 2024, replaced the
former standard and premium listing segments of the London Stock Exchange Main
Market with a single segment.
The Company's ordinary shares are listed on the London Stock Exchange in the
Equity Shares (Transition) category of the Official List, in accordance with
the new UK Listing Rules.
Organisation Review
The Board is responsible for providing strategic direction for the Group. This
incorporates setting out objectives, management policies and performance
criteria. The Board assesses its performance against these on a monthly basis.
Composition of the Board at 31 March 2024 was one Executive Director,
Executive Chairman and one Non-Executive Director. During the year, on 25
March 2024, Andrew Clifford resigned from his position in the Company as
Non-Executive Director. The Board believes that the present composition
provides an appropriate mix to conduct the Group's affairs.
The Board is responsible for monitoring risks and uncertainties faced by the
Group. These risks and uncertainties are detailed in the Strategic Report and
note 3 to the financial statements.
The corporate governance arrangement of the Group is disclosed in the
Corporate Governance Report.
Directors and Directors' interests
The Directors who held office during the year to the date of approval of these
financial statements, together with their beneficial interests in the ordinary
shares of the Company, are shown below.
31 March 2024 31 March 2023
Ordinary shares (number) Share options (number) Ordinary shares (number) Share options (number)
Olof Rapp 2,500,000 - 2,000,000 -
Thomas Evans (resigned 16 December 2024) (1) 500,000 - 500,000 -
Andy Clifford (resigned 25 March 2024) 1,000,000 - 1,000,000 -
David Lenigas (resigned 31 October 2024) - - - -
Stephen Lunn (appointed 22 September 2024) 1,404 - - -
Robert Menzel (appointed 21 January 2025) - - - -
(1) Thomas Martin Evans shares are held by FHF Securities (A'Asia)
Limited. FHF assisted the Company in contributing 4,500,000 shares to the
April 2023 placement. The 4,500,000 shares are under agreement with the
Company to be replaced through the mechanism of a new prospectus.
The Directors who held office at 31 March 2024 are summarised as follows:
Name of Director Position
David Lenigas Executive Chairman (resigned 31 October 2024)
Thomas Evans Executive Director (resigned 16 December 2024)
Olof Rapp Senior Non-Executive Director
Directors' Remuneration
The Remuneration Committee assesses the appropriateness of the nature and
amount of emoluments of the Directors on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high-quality Board and
senior executive team.
The Directors' remuneration and policies for appointment or replacement of
directors are disclosed in the Directors' Remuneration Report.
Dividends
The Directors do not recommend the payment of a dividend (2023: $Nil).
Share capital and major shareholdings
The issued share capital of the Company as at 31 March 2024 comprised
100,299,089 Ordinary shares of 1p (2023: 84,499,071). This increased to
112,299,071 in November 2024 following the share issues described in note 28
to the financial statements.
The Company has only one class of share capital formed of ordinary shares. All
shares forming part of the ordinary share capital have the same rights and
each carry one vote.
As at 24 September 2025 the Company had been notified of the following
interests in the Company's ordinary share capital:
Number of shares Percentage (%)
Hargreaves Lansdown (Nominees) Limited 10,084,091 9.06
Interactive Investor Services Nominees Limited 8,210,799 7.38
Hargreaves Lansdown (Nominees) Limited 7,568,903 6.80
Hargreaves Lansdown (Nominees) Limited 7,274,555 6.54
Pennpetro Energy Plc 6,000,000 5.39
Interactive Investor Services Nominees Limited 5,889,963 5.29
Barclays Direct Investing Nominees Limited 5,434,715 4.88
W B Nominees Limited 5,280,409 4.74
HSDL Nominees Limited 4,980,290 4.47
HSDL Nominees Limited 3,731,282 3.35
Interactive Investor Services Nominees Limited 3,662,134 3.29
To the best of the Directors' knowledge, no shareholder directly or indirectly
exercises, or could exercise, control over the Company.
Going Concern
These financial statements have been prepared on the going concern basis, as
set out in Note 2.3.
Under the going concern assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the intention
nor the necessity of liquidation, ceasing trading or seeking protection from
creditors pursuant to laws or regulations.
The Group receives income from oil sales but even along with reducing
expenditure for the financial year 2025, the forecasts indicate that the Group
and Parent Company, in order to meet their operational objectives, and
expected liabilities as they fall due, will be required to raise additional
funds within the next 12 months.
On 24 September 2025, the Company entered into a convertible loan note
agreement to provide the Company with £250,000 for working capital
requirements. Further details are set out in Note 28.
Whilst the Directors are confident that they will secure the necessary
funding, the current conditions do indicate the existence of a material
uncertainty that may cast significant doubt regarding the applicability of the
going concern assumption. The Directors are confident in the Company's ability
to raise additional funds as required, from existing and/or new investors,
within the next 12 months. Thus, they continue to adopt the going concern
basis of accounting preparing these financial statements.
Events after the Reporting Period
Loan Note facility
The loan note continues to be in place as at 31 March 2024 and is accruing
interest, however, has a maturity date of 31 December 2024. On 20 August 2025,
Petroquest Energy Limited issued a Corporate Undertaking within which the
majority of the Petroquest loan note would be written off and its security
over assets held in Nobel Petroleum LLC be released. The balance of the loan
will be converted into a 50% stake in Pennpetro USA Corp. This process has not
yet been finalised as of the date of approval of these financial statements.
Sale and Purchase Agreement on Texas Oil Assets
The Company announced that it signed a Sale and Purchase Agreement with
Globalvision International Lda on 1 August 2024, with regard to the sale of
its Texas assets. The transaction could not be completed due to title issues
that are currently under review. In the interim period, a caretaker role is
being carried out by Globalvision International Lda.
Details of proceeds raised after the reporting period are detailed in note 28.
Provision of Information to Auditor
So far as each of the Directors is aware at the time this report is approved:
• there is no relevant audit information of which the Company's auditor
is unaware; and
• the Directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to establish that
the auditor is aware of that information.
Independent Auditor
The auditor, Crowe U.K. LLP will be proposed for reappointment in accordance
with section 485 of the Companies Act 2006. Crowe U.K. LLP has signified its
willingness to continue in office as auditor.
This report was approved by the board on 24 September 2025 and signed on its
behalf:
Stephen Lunn
Executive Chairman
As at the date of this report, the following directors held office in the
Company:
Olof Nils Anders Rapp, Senior Non-Executive Director
Olof Rapp has vast international experience in the aerospace and automotive
sector and has held leading managerial positions with Rolls- Royce
International, Volvo Truck Corporation and VistaJet International in South
America, Middle East and Asia. His last position at Rolls Royce was as
Regional Director, Malaysia, with overall responsibility for Rolls-Royce Plc's
business in Malaysia and Brunei (Aviation, Marine, Nuclear and Oil & Gas).
Olof serves as a Board Director in Serunai Commerce Sdn Bhd. He has also
served as Director of European Chamber of Commerce Malaysia (EuroCham), and
Vice President of Swedish Chamber of Commerce Malaysia (SwedCham).
Stephen Gary Lunn, Chairman
Stephen Lunn entered the commercial world in 1972 and now possesses a wide
spectrum of experience gained in the global stock broking and investment
banking sectors, initially spending time with Merrill Lynch in London, New
York and Hong Kong. Having obtained registration with the Commodity Futures
Trading Commission in the USA (CFTC), Stephen moved his focus from commodity
trading to dealing in Equities and Bonds. Moving to Australasia in 1976, he
worked with a number of Stock Exchange member firms, culminating in the
position of Deputy Chairman for a full-line broking house, Frank Renouf &
Co. covering equities, bonds, portfolio management together with mergers and
acquisitions. Managing significant Pension funds involved participation in
Initial Public Offerings, capital raisings and underwriting new issues.
Robert Martin Menzel, Chief Executive Director
Robert Menzel is the founding member and Chairman of Globalvision
International Lda, an international commodity trading organization with a
focus on developing oil and gas investment projects. His career experience
includes setting up new business ventures; working in the finance operations
of international oil conglomerates; having trained and practiced as a
professional accountant for two of the big four professional services firms,
Robert brings excellent skills to the Company.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable laws and regulations.
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 Company and Group as at the end of the financial year and of
the profit or loss of the Group for that period. In preparing these Financial
Statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgments and accounting estimates that are reasonable and
prudent;
· state whether the applicable UK adopted international accounting
standards has been followed subject to any material departures disclosed and
explained in the Financial Statements; and
· prepare the Financial Statements on a going concern basis unless it
is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and the
Group and enable them to ensure that the Financial Statements 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 and other irregularities.
The Directors are also 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 the Financial Statements may differ from legislation in other
jurisdictions.
Directors' Responsibility pursuant to DTR4
Each of the Directors whose names and functions are listed on page 2 confirm
that, to the best of their knowledge and belief:
· The Financial Statements give a true and fair view of the assets,
liabilities, financial position and loss of the Group and Company; and
· The Annual Report and Financial Statements, including the Business
review, includes a fair review of the development and performance of the
business and the position of the Group and Company, together with a
description of the principal risks and uncertainties and they face.
On behalf of the Board
Stephen Lunn
Chairman
24 September 2025
Corporate Governance Practices
Pennpetro Energy plc's ordinary shares are listed on the London Stock Exchange
in the Equity Shares (Transition) category and is thus not required to comply
with the requirements of the U.K. Corporate Governance Code ("the Code") as
issued by the Financial Reporting Council. The disclosures below are required
by the UKLA's Disclosure and Transparency Rule 7.
The Board is committed to ensuring the highest standards of corporate
governance, and voluntarily complies with, subject to a small number of
exceptions listed below, the supporting principles and provisions set out in
the Code.
The following describes the ways in which the Company does not comply with the
detailed provisions of the Code and the Board's rationale thereon:
• given the size of the Board and the Company's current limited
operational status, certain provisions of the Corporate Governance Code (in
particular the provisions relating to the composition of the Board and the
division of responsibilities between the Chairman and chief executive and
executive compensation), are not being complied with by the Company as the
Board does not consider these provisions to be appropriate for the Company;
• the Board has considered the requirement to prepare a viability
statement. As the Group is in the early stages of establishing operations and
has not yet achieved a stable revenue base, the Board does not consider it
appropriate to provide a viability statement this year. This position will be
reviewed annually, and a viability statement will be prepared once operations
and revenue generation have reached a stable and sustainable level. Further
details regarding the Group's assessment of going concern are provided in note
2 of these financial statements;
• the Board as a whole will review audit and risk matters, on the basis of
adopted terms of reference governing the matters to be reviewed and the
frequency with which such matters are considered. The Board as a whole will
also take responsibility for the appointment of auditors and payment of their
audit fee, monitor and review the integrity of the Company's financial
statements and take responsibility for any formal announcements on the
Company's financial performance;
• the Board as a whole will be responsible for the appointment of
executive and non-executive Directors. The Company does not currently believe
it is necessary to have a separate nominations committee at this time. The
requirement for a nominations committee will be considered on an ongoing
basis;
• the Board believes in the benefits of diversity, including the need for
diversity in order to effectively represent shareholders' interests. This
diversity is not restricted to gender but also includes geographic location,
nationality, skills, age, educational and professional background. The board's
policy remains that selection should be based on the best person for the role;
• the Board as a whole will consider the Board's size, structure and
composition and the scale and structure of the Directors' fees, taking into
account the interests of Shareholders and the performance of the Company;
• the Board does not comply with the provision of the Corporate Governance
Code that at least half of the Board, excluding the Chairman, should comprise
non-executive directors determined by the Board to be sufficiently
independent;
• the Company has in place procedures ensuring compliance with the new
Market Abuse Regulation and the Board will be responsible for taking all
proper and reasonable steps to ensure compliance with the Market Abuse
Regulation by the Directors; and
• the Company will not seek Shareholder approval at a general meeting in
respect of any further acquisitions it may make, unless it is required to do
so for the purposes of facilitating the financing arrangements or for other
legal or regulatory reasons.
The Board of Directors
As at 31 March 2024, the Board of Directors comprised three members: one
Executive Director, one Executive Chairman and one Non-Executive Director. The
Executive Chairman and Executive Director have a wealth of experience
analytically covering the oil and gas industry. Similarly, the Non-Executive
Director has extensive corporate and financial experience. Since the year end,
the Executive Chairman resigned and was replaced with a new Executive
Chairman. Similarly, the Executive Director resigned and was replaced with a
new Executive Director, both of whom have significant experience covering the
oil and gas industry.
The Company has a policy of appraising Board performance annually and had
adopted an internal policy of regular face to face meetings in which all Board
members discuss any issues as and when they arise in relation to the Board or
any individual member's performance.
Board Meetings
The Board ordinarily meets on a monthly basis and as and when further
required, providing effective leadership and overall management of the Group's
affairs by reference to those matters reserved for its decision. This includes
the approval of the budget and business plan, major capital expenditure,
acquisitions and disposals, risk management policies and the approval of the
financial statements. Formal agendas, papers and reports are sent to the
Directors, in a timely manner, prior to the Board meetings. Board meetings
were mostly held telephonically.
Internal Controls
The Board recognises the importance of both financial and non-financial
controls and has reviewed the Group's control environment and any related
shortfalls during the year. Since the Group was established, the Directors are
satisfied that, given the current size and activities of the Group, adequate
internal controls have been implemented. Whilst they are aware that no system
can provide absolute assurance against material misstatement or loss, in light
of the current activity and proposed future developments of the Group,
continuing reviews of internal controls will be undertaken to ensure that they
are adequate and effective.
Relations with Shareholders
The Board is committed to providing effective communication with the
shareholders of the Company. Significant developments are disseminated through
stock exchange announcements and regular updates on the Company website. The
Board views the Annual General Meeting as a forum for communication between
the Group and its shareholders and encourages their participation in its
agenda.
Stephen Lunn
Executive Chairman
24 September 2025
Directors' Remuneration Report
The Company's Remuneration Committee comprises one Non-Executive Director,
Olof Rapp.
The Company's Remuneration Committee operates within the terms of reference
approved by the Board. In the year to 31 March 2024, the Remuneration
Committee documented one review.
The items included in this report are unaudited unless otherwise stated.
Committee's main responsibilities
• The Remuneration Committee considers the remuneration policy,
employment terms and remuneration of the Executive Director;
• The Remuneration Committee's role is advisory in nature and it
makes recommendations to the Board on the overall remuneration package for the
Executive Director in order to attract, retain and motivate high quality
executives capable of achieving the Company's objectives;
• The Remuneration Committee also reviews proposals for any share
option plans and other incentive plans, makes recommendations for the grant of
awards under such plans as well as approving the terms of any
performance-related pay schemes;
• The Board's policy is to remunerate the Company's executives
fairly and in such a manner as to facilitate the recruitment, retention and
motivation of suitably qualified personnel; and
• The Remuneration Committee, when considering the remuneration
packages of the Company's executives, will review the policies of comparable
companies in the industry.
Directors' remuneration (audited)
Fees and benefits of $226,222 were payable to Directors who held office during
the year ended 31 March 2024 (2023: $146,532).
Director Thomas Evans has received a loan of £10,000 which was outstanding as
at 31 March 2024. The loan is repayable within 12 months.
Other receipts received 2024
Salary Valuation of Taxable benefits $ Pension benefits Total
$ options $ $ $
$
Andy Clifford - - - - - -
Olof Rapp 37,704 - - - - 37,704
David Lenigas 150,814 - - - - 150,814
Thomas Evans 37,704 - - - - 37,704
226,222 - - - - 226,222
Other receipts received 2023
Salary Valuation of Taxable benefits $ Pension benefits Total
$ options $ $ $
$
Andy Clifford 53,934 - - - - 53,934
Olof Rapp 46,299 - - - - 46,299
David Lenigas - - - - - -
Thomas Evans 46,299 - - - - 46,299
146,532 - - - - 146,532
The Directors' remuneration is disclosed in full in the above table and is not
linked to performance. All current Directors' service contracts are kept
available for inspection at the Company's registered office.
All shares and interests held by the Directors are disclosed in the Directors'
report.
Total pension entitlements (audited)
The Company currently does not have any pension plans for any of the Directors
and does not pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors
or past Directors.
Payments to past directors (audited)
The Company has not paid any compensation to past Directors.
Payments for loss of office (audited)
No payments were made for loss of office during the year.
Directors' interests in share warrants (audited)
None of the Directors had interests in share warrants.
Consideration of shareholder views
The Remuneration Committee considers shareholder feedback received and
guidance from shareholder bodies. This feedback, plus any additional feedback
received from time to time, is considered as part of the Company's periodic
reviews of its policy on remuneration.
Statement of policy on Directors' remuneration
The Company's policy is to maintain levels of remuneration so as to attract,
motivate, and retain Directors and Senior Executives of the highest calibre
who can contribute their experience to deliver industry leading performance
with the Company's operations. Currently Director's remuneration is not
subject to specific performance targets.
In the future, the Company may introduce a remuneration policy that aligns
Executive compensation with corporate and individual performance. This policy
aims to align the interests of Directors with those of shareholders and
incentivize them to excel. The Remuneration Committee reviews the remuneration
policy and employment terms for Directors, making recommendations to the Board
of Directors for the overall remuneration packages. No Director participates
in any decision directly affecting their own remuneration.
Policy for new appointments
Base salary levels will take into account market data for the relevant role,
internal relativities, the individual's experience and their current base
salary. Where an individual is recruited at below market norms, they may be
re-aligned over time (e.g. two to three years), subject to performance in the
role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Committee may agree that the
Company will meet certain relocation and/or incidental expenses as
appropriate.
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee,
taking into account contractual obligations.
Other matters
The Company does not currently have any annual or long-term incentive schemes
in place for any of the Directors and as such there are no disclosures in this
respect.
Stephen Lunn
Chairman
24 September 2025
Audit Committee Report
The Audit Committee comprised two Directors, Olof Rapp (Chair of the Audit
Committee) and Thomas Evans, until Thomas's retirement from the Company on 16
December 2024. The Audit Committee oversees the Company's financial reporting
and internal controls and provides a formal reporting link with the external
auditors. The ultimate responsibility for reviewing and approving the annual
report and accounts and the half-yearly report remains with the Board.
Main Responsibilities
The Audit Committee acts as a preparatory body for discharging the Board's
responsibilities in a wide range of financial matters, with terms of reference
including:
• monitoring the integrity of the financial statements and formal
announcements relating to the Company's financial performance;
• reviewing significant financial reporting issues, accounting
policies and disclosures in financial reports, which are considered to be in
accordance with the key audit matters identified by the external auditors;
• overseeing that an effective system of internal control and risk
management systems are maintained;
• ensuring that an effective whistle-blowing, anti-fraud and bribery
procedures are in place;
• overseeing the Board's relationship with the external auditor and,
where appropriate, the selection of new external auditors;
• approving non-audit services provided by accounting firms; and
• ensuring compliance with legal requirements, accounting standards
and the Listing Rules and the Disclosure and Transparency Rules.
Governance
The Code requires that at least one member of the Audit Committee has recent
and relevant financial experience. Both directors have served in financial
executive and managing director roles. As a result, the Board is satisfied
that the Audit Committee has recent and relevant financial experience.
Members of the Audit Committee are appointed by the Board and whilst
shareholders, the Company believes they are considered to be independent in
both character and judgement.
The Company's external auditor, Crowe U.K. LLP, did not provide any non-audit
services in the period.
The Audit Committee believes that the Company does not require an internal
audit function due to the current size of the organisation and its operations.
Meetings
In the year to 31 March 2024 the two members of the Audit Committee have met
once. The key work to be undertaken by the Audit Committee is as follows;
• interview of external auditors and recommendation to the Board;
• review of audit planning and update on relevant accounting
developments;
• consideration and approval of the risk management framework,
appropriateness of key performance indicators;
• consideration and review of full-year results;
• review of the effectiveness of the Audit Committee; and
• review of internal controls.
The Code states that the Audit Committee should have primary responsibility
for making a recommendation on the appointment, reappointment or removal of
the external auditor.
External auditor
The Audit Committee appointed Crowe U.K. LLP as auditors to the Company,
commencing with the first audit for the year ended 31 December 2018. The
external auditor has unrestricted access to the Audit Committee Chairman. The
Committee is satisfied that Crowe U.K. LLP has adequate policies and
safeguards in place to ensure that auditor objectivity and independence are
maintained.
The external auditors report to the Audit Committee annually on their
independence from the Company. In accordance with professional standards, the
partner responsible for the audit is changed every five years. The current
auditor, Crowe U.K. LLP were first appointed by the Company in 2019 following
a tender process and therefore a new partner has been rotated onto the
engagement for the March 2024 audit. Having assessed the performance
objectivity and independence of the auditors, the Committee will be
recommending the reappointment of Crowe U.K. LLP as auditors to the Company at
the 2024 Annual General Meeting.
Stephen Lunn
Chairman
24 September 2025
Independent auditor's report to the members of Pennpetro Energy Plc
Disclaimer of opinion
We were engaged to audit the financial statements of Pennpetro Energy plc (the
"Parent Company") and its subsidiaries (the "Group") for the year ended 31
March 2024 which comprise the Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Statements of Financial Position, the Consolidated
and Parent Statements of Changes in Equity, the Consolidated and Parent
Statements and of Cash Flows and notes to the financial statements, including
a summary of material 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.
We do not express an opinion on the accompanying Group and Parent Company
financial statements. Because of the significance of the matters described in
the basis for disclaimer of opinion section of our report, we have not been
able to obtain sufficient appropriate audit evidence to provide a basis for an
audit opinion on these financial statements.
Basis for disclaimer of opinion
The disclaimer of opinion arises as a result of severe limitations over the
evidence available for the audit of the Group entities, including for the main
operating subsidiaries which are incorporated in the United States of America.
Due to the death of the individual acting as Company Secretary and financial
controller in April 2024 and changes to the board there has been a
significant loss of financial information which the company has been unable to
reinstate.
We have not been able to perform a review of management override of controls
through the conduct of journal entry testing for some subsidiaries in the
Group. This has occurred due to the absence of complete general ledgers which
also agree to the individual trial balances as of the year end. We were
not provided general ledgers for Pennpetro USA Corporation, Nobel LLC,
Pennpetro Greentec Limited, Pennpetro Greentec UK Limited and Pennpetro Green
Energy Limited. We are therefore unable to determine the completeness of the
trial balance for these entities for purposes of inclusion in the
consolidation.
We have been unable to obtain sufficient appropriate audit evidence over the
following balances and transactions:
· A share lending transaction involving some previous directors.
The value of this transaction was $425,617.
· The other gains/losses of $423,563 and legal expenditure of
$299,436 included in the financial statements. These amounts represent
expenditure for which there is no supporting information.
· Receipt of part of the proceeds, £180,000, from the issue of 5.8
million shares in the Group.
· Certain decommissioning liabilities, currently included in the
financial statements at $50,000.
As a result of these matters which together we consider material and
pervasive, we were unable to determine whether any adjustments might have been
necessary in the financial statement line items and the elements making up the
Consolidated Statement of Comprehensive Income, the Consolidated and Parent
Statements of Financial Position, the Consolidated Statement of Changes in
Equity and the Consolidated and Parent Statements of Cash Flows.
Key Audit Matters
In accordance with ISA (UK) 705, we have described below the matters that we
have determined to be key audit matters. Our responsibility is to address
these matters in the context of our audit of the financial statements as a
whole and to form our opinion thereon. However, because we do not express an
opinion on the financial statements due to the matters described in the Basis
for Disclaimer of Opinion section, we do not provide an opinion or any level
of assurance on the financial statements as a whole, including the matters
described below.
Key audit matter How the scope of our audit addressed the key audit matter
Adequacy of accounting records
• We requested from management supporting detail to the accounting
records, including breakdowns, contracts, invoices and other documentation.
The Group has experienced significant challenges in compiling the accounting
records for the year ended 31 March 2024, partly as a result of the individual • We held discussions with the Directors and the Group's outsourced
acting as Company Secretary and financial controller passing away in April accountants, to obtain an understanding of accounting transactions, and the
2024. extent of audit evidence available.
• As a result of these enquiries and the responses received, we have
determined that a Disclaimer of Opinion is required in relation to the Group's
financial statements for the year ended 31 March 2024.
.
Opinions on other matters prescribed by the Companies Act 2006
Due to the significance of the matters described in the basis for disclaimer
of opinion section of our report, we have been unable to form an opinion,
whether based on the work undertaken in the course of the audit:
• the information given in the strategic report and directors' report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
• the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
Notwithstanding our disclaimer of an opinion on the financial statements, in
the light of the knowledge and understanding of the Group and the Parent
Company and their environment obtained in the course of the audit performed
subject to the pervasive limitation described above, we have not identified
material misstatements in the strategic report or the directors' report.
Arising from the limitation of our work referred to above:
• we have not obtained all the information and explanations that we
considered necessary for the purpose of our audit; and
• we were unable to determine whether adequate accounting records have been
kept or whether the financial statements are in agreement with the accounting
records and returns.
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:
• returns adequate for our audit have not been received from branches not
visited by us; or
• certain disclosures of directors' remuneration specified by law are not
made;
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement, 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 company or to cease operations, or have no realistic
alternative but to do so.
Auditors responsibilities for the audit of the financial statements
Our responsibility is to conduct an audit on the Group and Parent Company
financial statements in accordance with applicable law and International
Standards on Auditing (UK) and to issue an auditor's report. However, because
of the matter described in the basis for disclaimer of opinion section of our
report, we were not able to obtain sufficient appropriate audit evidence to
provide a basis for an audit opinion on these financial statements. We are
independent of the group and parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the
UK, including the FRCs Ethical Standards applicable to public interest
entities, and we have fulfilled our other responsibilities in accordance with
these requirements
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
We design procedures in line with our responsibilities, set out above, to
detect material misstatements in respect of irregularities, including fraud.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that material misstatements in the financial statements may not be detected,
even though the audit is properly planned and performed in accordance with the
ISAs (UK). We are unable to determine whether the audit was capable in its
ability to detect irregularities, including fraud, on the basis that we were
unable to obtain sufficient appropriate audit evidence due to the matter
described in the basis for disclaimer of opinion section of our report
Other matters which we are required to address
We were first appointed by the Board on 25 March 2019 to audit the financial
statements for the period ending 31 December 2018. Our total uninterrupted
period of engagement is six years, covering the periods ending 31 December
2018 to 31 March 2024.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Group or the Parent Company and we remain independent of the
Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the Parent 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 Parent 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 Parent Company and the Parent
Company's members as a body, for our audit work, for this report, or for the
opinions we have formed.
John Glasby
Senior Statutory Auditor
For and on behalf of Crowe U.K. LLP
Statutory Auditor
London
Date:
Year ended 31 March 2024 15 Months ended 31 March 2023
Note
$ $
Continuing Operations
Revenue 5 493,005 -
Cost of Sales (5,608) -
Gross Profit 487,397 -
Administrative expenses 7 (1,592,150) (556,494)
Other losses 7 (423,563) -
Impairments 13,14,18 (7,108,447) -
Operating Loss (8,636,763) (556,494)
Gain on loan modification 20 - 497,939
Finance costs 10 (260,285) (260,347)
Loss before Tax (8,897,048) (318,902)
Income tax 11 - -
Loss for the year attributable to owners of the parent (8,897,048) (318,902)
Other Comprehensive Income:
Items that may be reclassified subsequently to profit or loss
Currency translation differences (472,718) 50,127
Other Comprehensive (Loss) / Income for the Year (472,718) 50,127
Total Comprehensive Income for the Year attributable to the owners of the (9,369,766) (268,775)
parent
Loss per share attributable to the owners of the parent during the year
Basic (cents per share) 12 (9.02) (0.39)
Diluted (cents per share) (9.02) (0.39)
The notes on pages 35 to 59 form part of these financial statements.
Note 31 March 31 March
2024 2023
$ $
ASSETS
Non-Current Assets
Property, plant and equipment 13 - 1,484,931
Intangible assets 14 - 4,233,890
Total Non-Current Assets - 5,718,821
Current Assets
Trade and other receivables 16 307,881 315,299
Short term investments 17 - 82,224
Cash and cash equivalents 18 6,266 46,792
Total Current Assets 314,147 444,315
TOTAL ASSETS 314,147 6,163,136
EQUITY AND LIABILITIES
Equity Attributable to Owners of Parent
Share capital 19 1,277,639 1,079,101
Share premium 19 8,443,248 6,610,719
Convertible reserve 4,172,846 4,172,846
Reorganisation reserve (6,578,229) (6,578,229)
Foreign exchange reserve (246,608) 226,110
Retained losses (13,229,814) (4,332,766)
Total Equity (6,160,918) 1,177,781
Current Liabilities
Trade and other payables 21 2,129,116 966,986
Borrowings 20 4,345,949 -
Total Current Liabilities 6,475,065 966,986
Non- Current Liabilities
Borrowings 20 - 4,018,369
Total Non-Current Liabilities - 4,018,369
TOTAL EQUITY AND LIABILITIES 314,147 6,163,136
These financial statements were approved by the Board of Directors on 24
September 2025 and signed on its behalf by:
Stephen Lunn
Chairman
Company registration number: 10166359
The notes on pages 35 to 59 form part of these financial statements.
Note 31 March 31 March
2024 2023
$ $
ASSETS
Non-Current Assets
Investments in subsidiaries 15 - 6,440,980
Total Non-Current Assets - 6,440,980
Current Assets
Trade and other receivables 16 14,240 2,957,318
Short term investments 17 - 82,224
Cash and cash equivalents 18 41 -
Total Current Assets 14,281 3,039,542
TOTAL ASSETS 14,281 9,480,522
EQUITY AND LIABILITIES
Equity Attributable to Shareholders
Share capital 18 1,277,639 1,079,101
Share premium 18 8,443,248 6,610,719
Convertible reserve 4,172,846 4,172,846
Foreign exchange reserve (214,671) (334,293)
Retained losses (15,459,199) (3,406,463)
Total Equity (1,780,137) 8,121,910
Current Liabilities
Trade and other payables 21 1,794,418 1,358,612
Total Current Liabilities 1,794,418 1,358,612
TOTAL EQUITY AND LIABILITIES 14,281 9,480,522
The Company has elected to take the exemption under Section 408 of the
Companies Act 2006 from presenting the parent company Statement of
Comprehensive Income. The loss for the parent company for the period was
$12,052,736 (2023: $540,433).
These financial statements were approved by the Board of Directors on 24
September 2025 and were signed on its behalf by:
Stephen Lunn
Chairman
Company registration number: 10166359
The notes on pages 35 to 59 form part of these financial statements.
Share Capital Share Premium Convertible Reserve Reorganization Reserve Foreign Share Based Payments Reserve Retained Losses Total Equity
Group Exchange Reserve
$ $ $ $ $ $ $ $
Balance at 31 December 2021 979,427 4,121,700 6,021,575 (6,578,229) 133,619 - (4,013,864) 664,228
Loss for the period - - - - - - (318,902) (318,902)
Foreign currency translation differences - - - - 50,127 - - 50,127
Total comprehensive income for the year - - - - 50,127 - (318,902) (268,775)
Share issue (note 19) 27,419 754,909 - - - - - 782,328
Exercise of convertible loan notes 72,255 1,734,110 (1,848,729) - 42,364 - - -
(note 19)
Balance at 31 March 2023 1,079,101 6,610,719 4,172,846 (6,578,229) 226,110 - (4,332,766) 1,177,781
Loss for the period - - - - - - (8,897,048) (8,897,048)
Foreign currency translation differences - - - - (472,718) - - (472,718)
Total comprehensive income for the period - - - - (472,718) - (8,897,048) (9,369,766)
Share issue (note 19) 198,538 2,053,847 - - - - - 2,252,385
Cost of share issue (note 19) - (221,318) - - - - - (221,318)
Balance at 31 March 2024 1,277,639 8,443,248 4,172,846 (6,578,229) (246,608) - (13,229,814) (6,160,918)
The notes on pages 35 to 59 form part of these financial statements.
Share Capital Share Premium Convertible Reserve Foreign Exchange Share Based Payments Retained Losses Total Equity
Company Reserve Reserve
$ $ $ $ $ $ $
Balance at 31 December 2021 979,427 4,121,700 6,021,575 575,249 - (2,866,030) 8,831,921
Loss for the period - - - - - (540,433) (540,433)
Foreign currency translation differences - - - (951,906) - - (951,906)
Total comprehensive income for the period - - - (951,906) - (540,433) (1,492,339)
Share issue (note 19) 27,419 754,909 - - - - 782,328
Exercise of convertible loan notes (note 19) 72,255 1,734,110 (1,848,729) 42,364 - - -
Balance at 31 March 2023 1,079,101 6,610,719 4,172,846 (334,293) - (3,406,463) 8,121,910
Loss for the period - - - - - (12,052,736) (12,052,736)
Foreign currency translation differences - - - 119,622 - - 119,622
Total comprehensive income for the period - - - 119,622 - (12,052,736) (11,933,114)
Share issue (note 19) 198,538 2,053,847 - - - - 2,252,385
Cost of share issue (note 19) - (221,318) - - - - (221,318)
Balance at 31 March 2024 1,277,639 8,443,248 4,172,846 (214,671) - (15,459,199) (1,780,137)
The notes on pages 35 to 59 form part of these financial statements.
Year ended 31 March 2024 15 months ended 31 March 2023
$ $
Cash Flows from Operating Activities
Loss before tax (8,897,048) (318,902)
Foreign exchange (471,786) 778
Gain on loan amendment - (497,939)
Finance costs 260,285 260,347
Impairment charge 7,108,447 -
(2,000,102) (555,716)
Changes to working capital
Decrease / (Increase) in trade and other receivables 7,418 (5,843)
Increase in trade and other payables 1,229,425 171,667
1,236,843 165,824
Net Cash used in Operating Activities (763,259) (389,892)
Cash Flows from Investing Activities
Purchases of property, plant and equipment (1,337,392) (100,000)
Decrease / (increase) of short-term investments 31,525 (47,310)
Net Cash generated from / (used in) Investing Activities (1,305,867) (147,310)
Cash Flows from Financing Activities
Proceeds from issues of ordinary shares 2,252,385 582,166
Transaction costs on issue of ordinary shares (221,318) -
Net Cash generated from Financing Activities 2,031,067 582,166
(38,059)
Net Increase / (Decrease) in Cash and Cash Equivalents 44,964
Cash and cash equivalents at the beginning of the period 46,792
1,828
Effect of exchange rates on cash balance (2,467) -
Cash and Cash Equivalents at the End of the Period 6,266 46,792
The notes on pages 35 to 59 form part of these financial statements.
Period end 31 March 2024 15 Months period 31 March 2023
$ $
Cash Flows from Operating Activities
Loss before tax (12,052,736) (540,433)
Impairment of investment 6,535,308 -
Impairment of intercompany loan balance 4,408,041 -
Impairment of short-term investments 50,699 -
Unrealised foreign exchange 25,063 2,496
(1,033,625) (537,937)
Changes to working capital
Increase in trade and other receivables (1,464,730) (134,753)
Increase in trade and other payables 435,807 137,834
(1,028,923) 3,081
Net cash used in Operating Activities (2,062,548) (534,856)
Cash Flows from Investing Activities
Decrease / (increase) of short-term investments 31,525 (47,310)
Net Cash generated from / (used in) Investing Activities 31,525 (47,310)
Cash Flows from Financing Activities
Proceeds from issue of ordinary shares 2,252,385 582,166
Transaction costs on issue of ordinary shares (221,318) -
Net Cash generated from Financing Activities 2,031,067 582,166
Net movement in Cash and Cash Equivalents 44 -
Cash and cash equivalents at the beginning of the year
- -
Net Increase in cash and cash equivalents 44 -
Effect of exchange rates on cash balances (3) -
Cash and Cash Equivalents at the End of the 41 -
Year
The notes on pages 35 to 59 form part of these financial statements.
1. GENERAL INFORMATION
Pennpetro Energy plc (the "Company") is a public limited company which is
listed on the London Stock Exchange in the Equity Shares (Transition) category
of the Official List and incorporated and domiciled in England and Wales. Its
registered office address is 6 Heddon Street, London, W1B 4BT.
The consolidated financial statements of the Company consist of the following
companies (together "the Group"):
Pennpetro Energy plc UK registered company
Pennpetro USA Corp US registered company
Nobel Petroleum USA Inc US registered company
Nobel Petroleum LLC US registered company
Pennpetro Greentec Limited Cyprus registered company
Pennpetro Greentec UK Limited UK registered company
Pennpetro Green Energy Limited UK registered company
The Group is an oil and gas developer with assets in Texas, United States. The
Company's US-based subsidiaries own a portfolio of leasehold petroleum mineral
interests centred on the City of Gonzales, in southeast Texas, comprising the
undeveloped central portion of the Gonzales Oil Field.
2. MATERIAL ACCOUNTING POLICY INFORMATION
The material accounting policies applied in the preparation of these
consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented,
unless otherwise stated.
2.1. Basis of preparation
These consolidated financial statements have been prepared and approved by the
Directors in accordance with the UK adopted International Accounting
Standards.
The financial statements have been prepared under the historical cost
convention.
The preparation of financial statements in conformity with the UK adopted
International Accounting Standards requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in
the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are
disclosed in note 4.
The Directors note that the individual acting as Company Secretary and
financial controller passed away in April 2024. This has resulted in a
significant limitation to the accounting information and records available to
the Directors for the preparation of the consolidated financial statements for
the year ended 31 March 2024.
2.2. Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and all its subsidiaries (the "Group").
Subsidiaries include all entities over which the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. The
existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether the Group controls
another entity. Subsidiaries are consolidated from the date on which control
commences until the date that control ceases. Intra-group balances and any
unrealised gains and losses on income or expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial
statements.
2.3. Going concern
The Directors have prepared cashflow forecasts as part of their assessment of
the going concern position of the Company and Group. The Board of Directors
have considered these forecasts and have a reasonable expectation that the
Company and Group has adequate resources to continue in operational existence
through to 31 March 2027 as projected.
The Group has received revenue from oil sales in the year to 31 March 2024 but
has ceased since the year end. Even with reducing expenditure for the
following 12 months, the forecasts indicate that the Group and Parent Company,
in order to meet operational objectives, and expected liabilities as they fall
due, will be required to raise additional funds within the next 12 months.
The revised maturity date on the Petroquest loan note is 31 December 2024 and
is currently in default. On 20 August 2025, Petroquest Energy Limited issued a
Corporate Undertaking within which the majority of the Petroquest loan note
would be written off and its security over assets held in Nobel Petroleum LLC
be released. The balance of the loan will be converted into a 50% stake in
Pennpetro USA Corp. This process has not yet been finalised as of the date of
approval of these financial statements.
On 24 September 2025, the Company entered into a convertible loan note
agreement to provide the Company with £250,000 for working capital
requirements. Further details are set out in Note 28.
Whilst the Directors are confident in the Company's ability to raise
additional funds as required, from existing and/or new investors, the current
conditions do indicate the existence of a material uncertainty that may cash
significant doubt regarding the applicability of the going concern assumption.
The financial statements do not include adjustments that would arise in the
event of the Group and Company not being able to continue as a going concern.
2.4 New standards, amendments and interpretations adopted by the Group and Company
The International Accounting Standards Board has issued standards and
interpretations effective for the first time for the financial period
beginning 1 April 2023 for entities applying UK adopted International
Accounting Standards. The Directors consider their adoption has not had any
significant impact on the disclosures or on the amounts reported in these
financial statements:
The Directors have considered IFRS and amendments that are in issue but not
yet in effect for the accounting period. They have assessed that none of these
are expected to have a significant impact on the amounts reported in future
periods or to disclosures, other than IAS 1 (amended) which has been adopted
in these financial statements.
This replaces the requirement for entities to disclose their significant
accounting policies with the requirement to disclose their material accounting
policy information. Accordingly, this has resulted in a reduction in
disclosure within the accounting policy section in these financial statements.
The amendment to IAS 1 is effective for periods beginning on or after 1
January 2023.
2.5 Revenue Recognition
Most of the Group's revenue is derived from the sale of physical goods to customers. The contract contains one performance obligation which is satisfied at the point of delivery. The performance obligation of goods sold are transferred according to the specific terms that have been formally agreed with the customer, generally upon delivery.
The transaction price for this revenue is the amount which can be invoiced to the customer once the performance obligations are fulfilled, reduced to reflect the provision recognised for local taxes. The Group does not routinely offer discounts or volume rebates.
For all sales of goods, revenue is recognised at a point in time, being the point at which the goods are delivered to the customer.
2.6 Investments in Subsidiaries
Investments in subsidiaries are accounted for at cost less impairment.
2.7 Foreign Currency Translation
· Functional and presentation currency
Items included in each of the financial statements of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The functional currency of the UK
parent entity is pound sterling and the functional currency of the US
subsidiaries is US dollars. The financial statements are presented in US
Dollars, rounded to the nearest dollar, which is the Group's and Company's
presentation currency.
· Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions or
valuation where such items are re-measured. 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 Statement Of Comprehensive Income.
· Group companies
The results and financial position of all the Group entities that have a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
§ assets and liabilities for each Statement of Financial Position presented
are translated at the closing rate at the date of that Statement of Financial
Position;
§ income and expenses for each Statement of Comprehensive Income are
translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the
dates of the transactions); and
§ all resulting exchange differences are recognised in other comprehensive
income.
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities, and of monetary items receivable from foreign
subsidiaries for which settlement is neither planned nor likely to occur in
the foreseeable future are taken to other comprehensive income. When a foreign
operation is sold, such exchange differences are recognised in the Statement
of Comprehensive Income as part of the gain or loss on sale.
2.8 Property, Plant and Equipment
Following evaluation of successful exploration of wells, if commercial
reserves are established and the technical feasibility of extraction
demonstrated, and once a project is sanctioned for commercial development,
then the related capitalised exploration costs are transferred into a single
field cost centre within 'producing properties' within property, plant and
equipment after testing for impairment.
The net book values of 'producing properties' are depreciated on a unit of
production basis at a rate calculated by reference to proven and probable
reserves and incorporating the estimated future cost of developing and
extracting those reserves once production has commenced.
The Petroleum (Mineral lease) expenditure to date is over land that has
already had historical vertical drilled wells and has proven oil reserves. All
these costs were therefore immediately capitalised within property, plant and
equipment.
All costs incurred after the technical feasibility and commercial viability of
producing hydrocarbons has been demonstrated, are capitalised within 'drilling
costs and equipment' on a well-by-well basis. Subsequent expenditure is
capitalised only where it either enhances the economic benefits of the
development/producing asset or replaces part of the existing
development/producing asset. Any costs remaining associated with the part
replaced are expensed.
2.9 Intangible Assets
• Development expenditure
Expenditure on the drilling of development wells, including service, is
capitalised initially within intangible fixed assets and when the well has
formally commenced commercial production, then it is transferred to property,
plant and equipment and is depreciated from the commencement of production as
described in the accounting policy for property, plant and equipment.
• Drilling costs and Petroleum mineral leases
The Group applies the successful efforts method of accounting for oil and gas
assets, having regard to the requirements of IFRS 6 'Exploration for and
Evaluation of Mineral Resources'. Costs incurred prior to obtaining the legal
rights to explore an area are expensed immediately to the Statement of
Comprehensive Income.
Exploration expenditure incurred in the process of determining exploration
targets is capitalised initially within intangible assets as drilling costs.
Drilling costs are initially capitalised on a well-by-well basis until the
success or otherwise has been established. Drilling costs are written off on
completion of a well unless the results indicate that hydrocarbon reserves
exist and there is a reasonable prospect that these reserves are commercially
viable. Drilling costs are subsequently transferred to 'Drilling expenditure'
within property, plant and equipment and depreciated over their estimated
useful economic life. All such costs are subject to regular technical,
commercial and management review on at least an annual basis to confirm the
continued intent to develop or otherwise extract value from the discovery.
Where this is no longer the case, the costs are immediately expensed to the
Statement of Comprehensive Income.
2.10 Impairment of Non-Financial Assets
Assets not ready for use are not subject to amortisation and are tested
annually for impairment. Assets that are subject to amortisation or
depreciation are reviewed for impairment at each reporting date. 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.
2.11 Financial Assets
Classification
Financial assets are recognised when the Group becomes a party to the
contractual provisions of the instrument. At initial recognition, the Group
measures its financial assets at amortised cost which comprise 'trade and
other receivables' and 'cash and cash equivalents'.
A financial asset shall be measured at amortised cost if both of the following
conditions are met:
• the financial asset is held within a business model whose objective is
to hold financial assets in order to collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified
dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding.
Recognition and measurement
At initial recognition, an entity shall measure a financial asset at its fair
value plus transaction costs that are directly attributable to the acquisition
or issue of the financial asset.
At initial recognition, an entity shall measure trade receivables at their
transaction price if the trade receivables do not contain a significant
financing component.
Derecognition
The Group derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of the ownership of the financial
asset are transferred. Any interest in transferred financial assets that is
created or retained by the Group is recognised as a separate asset or
liability.
Derecognition also takes place for certain assets when the Group writes-off
balances pertaining to the assets deemed to be uncollectible.
Impairment of financial assets
IFRS 9 mandates the use of an expected credit loss model to calculate
impairment losses rather than an incurred loss model, and therefore it is not
necessary for a credit event to have occurred before credit losses are
recognised. The impairment model applies to the Group's financial assets and
loan commitments. The Group recognises lifetime expected credit losses ("ECL")
when there has been a significant increase in credit risk since initial
recognition. However, if the credit risk on the financial instrument has not
increased significantly since initial recognition, the Group measures the loss
allowance for that financial instrument at an amount equal to a lifetime ECL.
At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit impaired. A financial asset is credit impaired when
one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
2.12 Short Term Investments
Short term investments are cash amounts held in bank accounts and deposits by
intermediaries that have been approved by the Directors.
2.13 Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and demand deposits with banks.
2.14 Trade and Other Payables
Trade and other payables are initially measured at fair value, net of
transaction costs that are directly attributable to the issue of the financial
liability and are subsequently measured at amortised cost using the effective
interest method if the time value of money is significant.
2.15 Borrowings
Borrowings are rec initially at fair value minus transaction costs that are
directly attributable to the issue of the financial liability. Borrowings are
subsequently carried at amortised cost; any difference between the proceeds
(net of transaction costs) and the redemption value is recognised in the
Income Statement over the period of the borrowings, using the effective
interest method.
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 end of the reporting period.
2.16 Share Capital
Ordinary shares are classified as equity when there is no obligation to
transfer cash or other assets. Incremental costs directly attributable to the
issue of equity instruments are shown in equity as a deduction from the
proceeds, net of tax. Incremental costs directly attributable to the issue of
equity instruments as consideration for the acquisition of a business are
included in the cost of acquisition.
2.17 Reserves
On 17 May 2017 Pennpetro Energy plc ("Pennpetro") acquired 100% of the issued
capital of Nobel Petroleum UK Limited ("Nobel UK") in a share for share
exchange with the shareholders of Nobel UK's parent company at that time,
Nobel Petroleum Ireland Limited ("Nobel Ireland"). This reverse merger was
accounted for as a share-based payment transaction which should be accounted
for in accordance with IFRS 2. On the basis of the guidance in para 13A of
IFRS 2, the reverse merger has been treated as a continuation of the Nobel
Group into the Pennpetro Group. The consideration included the issue of new
share capital and the issue of a convertible bond. The total consideration
less the share capital in Nobel UK resulted in the creation of the
reorganisation reserve.
The convertible reserve represents the principal value of a mandatory
convertible note issued by Pennpetro Petroleum plc to Nobel Petroleum Ireland
Limited in part consideration for the acquisition of Nobel Petroleum UK under
an agreement dated 17 May 2017. The convertible loan note was issued by
Pennpetro to Nobel Ireland in the Reverse merger of Nobel UK. This may be
converted into 19 million ordinary shares if certain conditions are met, at a
fixed subscription price of 25 pence. The loan note was partially exercised in
March 2022 for issue of 5,833,333 shares.
The translation reserve represents effects of currency translation in the year.
2.18 Taxation
The tax expense or credit comprises current and deferred tax. It is calculated
using tax rates that have been enacted or substantively enacted by the
Statement of Financial Position date.
Deferred tax is accounted for using the balance sheet liability method in
respect of temporary differences arising from differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax basis used in the computation of taxable profit. In
principle, deferred tax liabilities are 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 difference arises from goodwill (or negative
goodwill), from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction, which affects neither the
tax profit nor the accounting profit, or if it does not give rise to equal
taxable and deductible temporary differences.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax is calculated at the tax rates
that are expected to apply to the period when the asset is realised, or the
liability is settled. Deferred tax is charged or credited in the Statement of
Comprehensive Income, except when it relates to items credited or charged
directly to equity, in which case the deferred tax is also dealt with in
equity. Deferred tax assets and liabilities are offset when they relate to
income taxes levied by the same taxation authority and the Group intends to
settle its current tax assets and liabilities on a net basis.
2.19 Segment Information
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker ("CODM"), who is
responsible for allocating resources and assessing performance of the
operating segments and making strategic decisions. The CODM is determined to
be the board of Directors.
3. FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial risks: market risk
(including currency risk and cash flow and interest rate risk), credit risk
and liquidity risk.
Market risk
The Group operates in an international market for hydrocarbons and is exposed
to risk arising from variations in the demand for and price of the
hydrocarbons. Oil and gas prices historically have fluctuated widely and are
affected by numerous factors over which the Group has no control, including
world production levels, international economic trends, exchange rate
fluctuations, speculative activity and global or regional political events.
Commodity and currency risk
As the Group's potential earnings will be derived from the sale of oil, the
Group's future revenues and cash flows will be impacted by changes in the
prices and available market of this commodity. Any substantial decline in the
price of oil or in transport or distribution costs may have a material adverse
effect on the Group. Commodity prices fluctuate and are affected by a number
of factors including current and expected future supply and demand, production
cost levels in major oil producing centres, as well as macroeconomic
conditions such as inflation and interest rates.
Furthermore, the capital raises of the Company are denominated in Great
British Pounds whereas the Groups assets and liabilities are primarily help in
United States Dollars. Consequently, material changes in the Pound Sterling
exchange rate may impact the Group's ability to raise sufficient funds for
operations in Texas. Exchange rates are impacted by numerous factors beyond
the control of the Group, including inflation, interest rates, and general
economic outlook. The Directors are confident that they have put in place a
strong management team capable of dealing with the above issues as they arise.
Credit risk
The Group's principal financial assets are cash and cash equivalents, other
receivables and short-term investments.
Credit risk represents the risk of loss the Group would incur if third party
operators and counterparties fail to fulfil their credit obligations. The risk
is concentrated between a relatively small group of operators given the small
number of parties involved in oil and gas exploration and production
activities. The Group seeks to mitigate this risk where possible by assessing
the credit quality of the participants and by establishing ongoing and
long-term relationships.
The initial credit risk on cash and cash equivalents and short-term
investments is limited because it is the Group's policy to invest with banks
that firstly offer the greatest degree of security in the view of the Group
and, secondly the most competitive interest rates. The credit risk for short
term investments and cash and cash equivalents is considered negligible since
the counterparties are reputable banks.
Other receivables include amounts due from parties that have been involved in
the Gonzales Project since its inception and continue to have an interest in
the Group in their capacity as shareholders in Pennpetro or as lenders to the
Group. Other receivables are therefore initially considered low credit risk.
Other receivables are considered in default if the entity or party has not
settled its payment obligation by the due date set out in the underlying
contracts and agreements.
A loss allowance is recognised for expected credit losses on all financial
assets held at the balance sheet date. Given risk mitigation steps undertaken
by the Directors, no provision has been made for losses.
The maximum exposure due to credit risk for the Group on financial assets
during the year was
$336,589 (2023: $444,315). All amounts are expected to be received in full and
on time.
Liquidity risk
Cash flow forecasting is performed in the operating entities of the Group and
aggregated by Group Finance. Group Finance monitors rolling forecasts of the
Group's liquidity requirements to ensure it has sufficient cash to meet
operational needs, while seeking to maintain sufficient headroom on its
undrawn committed borrowing facilities (note 20) at all times, so that the
Group does not breach borrowing limits or covenants (where applicable) on any
of its borrowing facilities. Such forecasting takes into consideration the
Group's debt financing plans, covenant compliance, compliance with internal
Statement of Financial Position ratio targets, and, if applicable, external
regulatory or legal requirements (for example, currency restrictions).
The table below analyses the Group's non-derivative financial liabilities into
relevant maturity groupings, based on the remaining period at the Statement of
Financial Position to the contractual maturity date. The amounts disclosed in
the table are the contractual undiscounted cash flows.
Group Less than Between 1 and 2 years Between 2 and 3 years
1 year $ $
At 31 March 2024 $
Borrowings (undiscounted) 4,604,181 - -
Trade and other payables 2,129,116 - -
At 31 March 2023
Borrowings (undiscounted) - 4,018,369 -
Trade and other payables 966,986 - -
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
4.1.Use of estimates and judgements
The preparation of Financial Statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods. In particular, information about significant areas of
estimation uncertainty and critical judgements in applying accounting policies
that have the most significant effect on the amount recognised in the
financial statements are described below.
4.2.Critical accounting judgements
• Recoverability of non-producing mineral leases and capitalised drilling costs & equipment
Management tests annually whether non-producing mineral leases have future
economic value in accordance with the accounting policies. This assessment
takes into consideration the likely commerciality of the asset, the future
revenues and costs pertaining and the discount rates to be applied for the
purposes of deriving a recoverable value. In the event that a lease does not
represent an economic drilling target and results indicate that there is no
additional upside, the mineral lease and drilling costs will be impaired.
The Directors have reviewed the estimated value of the licences and have
concluded that an impairment charge should be recognised. The primary term of
the leases have expired but did not require renewal whilst the there was
production from the permitted area. Production over the permitted area stopped
in April 2024 and has not yet recommenced.
In light of this information, the Directors have concluded that there is a
material adjustment required to the value given that the primary term of many
of the leases has expired, the production status is under review, and there is
material uncertainty over the outcome of this review.
• Impairment of investments, and amounts due from subsidiaries
The Directors have assessed at year end whether there is any indication that
the carrying value of the Company's investment in its subsidiaries has been
impaired, and whether the amounts due from its subsidiaries are not
recoverable. The Directors have determined that the value of the assets owned
by its subsidiaries, namely the mineral leases, the proven oil and gas
reserves and Net Revenue Interests (as described in the section below
"Estimated impairment of producing properties and capitalised drilling costs
& equipment") are significantly lesser than the combined total of the
Investment and receivable balances carried in the Company's books. The
Directors therefore have impaired the value of the investment in the Company's
books and have impaired the value of assets in the Group.
4.3 Critical accounting estimates
• Estimated impairment of producing properties and capitalised drilling costs & equipment
At 31 March 2024, petroleum mineral leases and capitalised drilling costs
& equipment on petroleum properties have a total carrying value of $Nil
(2023: $5,718,821), (notes 12 and 13). Management tests annually whether the
assets have future economic value in accordance with the accounting policies
and has previously placed reliance on the Competent Persons Report ("CPR")
prepared in December 2017 for the City of Gonzales Lease Area, which is now
considered to be out of date.
As detailed in section 4.2, the Whistling Straits Development Area mineral
leases have expired and therefore no drilling or production can take place
from this area at present. Existing development expenditure incurred thus has
no value in use and so the carrying value of these properties is now $Nil.
The Directors are investigating the potential for new lease agreements to be
reached and as such, reinstate the historic value of the properties. However,
there is no firm agreement as at the date of this report and as such, no
reinstatement of value can yet be made.
There is currently uncertainty over the title and enforceability of leases in
the City of Gonzales Lease Area, and hence the carrying value of the assets in
relation to this area has been impaired in full, while the Directors establish
the status.
5. REVENUE FROM CONTRACTS WITH CUSTOMERS
Set out below, is the reconciliation of the revenue from contracts with customers with the amounts disclosed in the segment information (note 6):
Year ended 31 March 2024
Oil Sales Other
Total
$ $ $
Segments
Type of goods or service
Sale of Oil 486,721 - 486,721
Others * - 6,284 6,284
Total revenue from contracts with customers 486,721 6,284 493,005
*rent of office space
All revenue was generated from contracts with customers and recognised at a point in time, when control of the oil passed to the customer at the point of delivery. The performance obligation is satisfied upon delivery of the oil to the customer. There are no material rights of return, warranties or variable consideration affecting the transaction price for the period. The transaction price is determined gross of sales taxes, where cash is received net of such taxes. Payment terms are typically within 30 days of delivery, with no significant financing component.
6. SEGMENTAL INFORMATION
The Group operates in two geographical areas, the United Kingdom and the
United States of America. Activities in the UK are mainly administrative in
nature whilst the activities in the USA relate to exploration and production
from oil and gas wells. The reports reviewed by the Board of Directors that
are used to make strategic decisions are based on these geographical segments.
Year ended 31 March 2024
Intra-segment
USA UK balances Total
$ $ $ $
Revenue 486,721 6,284 - 493,005
Operating loss (3,204,844) (12,002,239) 6,439,191 (8,767,892)
Capital expenditure 1,337,392 - - 1,337,392
Total assets 299,866 14,281 - 314,147
Total liabilities 4,680,647 1,794,418 - 6,475,065
15 Month Period to 31 March 2023
Intra-segment
USA UK balances Total
$ $ $ $
Revenue - - - -
Operating profit / (loss) 221,531 (540,433) - (318,902)
Capital expenditure 100,000 - - 100,000
Total assets 6,068,526 3,039,542 (2,944,932) 6,163,136
Total liabilities 6,571,675 1,358,612 (2,944,932) 4,985,355
The amounts provided to the Board of Directors with respect to total assets
are measured in a manner consistent with that of the financial statements.
These assets are allocated based on the operations of the segment and physical
location of the asset.
Reportable segments' assets are reconciled to total assets as follows:
31 March 2024 31 March 2023
$ $
Segmental assets for reportable segments 314,147 6,163,136
Total assets per Statement of Financial Position 314,147 6,163,136
7. EXPENSES BY NATURE
Year ended 31 March 2024 15 Month Period ended 31 March 2023
Group
$ $
842,948
Legal, professional and compliance costs 297,290
Foreign exchange (gain) / loss (18,809) 778
Wages and salaries 226,222 181,969
Other costs 541,789 76,457
Total administrative expenses 1,592,150 556,494
Unknown expenditure 423,563 -
Total other losses 423,563 -
The amounts charged as other losses relate to expenditure incurred in the FHF
Corporate Finance Limited bank account for which underlying support could not
be obtained. The Directors continue to seek underlying support for these
transactions and recover costs where possible.
8. AUDITOR REMUNERATION
Services provided by the Company's auditor and its associates
During the period, the Group (including its overseas subsidiaries) obtained
the following services from the Company's auditor:
Period ended 31 March 2024 15 Month Period ended 31 March 2023
$ $
Fees payable to the Company's auditor for the audit
of the parent company and consolidated financial
Statements 69,123 49,310
9. STAFF COSTS
Group and Company 2024 2023
$ $
226,222
Wages and salaries 146,532
Social security costs - 35,437
226,222 181,969
Directors' Emoluments
2024 2023
$ $
Olof Rapp Emoluments 37,704 46,299
Thomas Evans Emoluments 37,704 46,299
Andy Clifford (resigned 25 March 2024) Emoluments - 53,934
David Lenigas Emoluments 150,814 -
226,222 146,532
The Group does not employ any full-time employees at its US subsidiaries.
Instead, the Group uses specialist service providers to fulfil its well
drilling and land management requirements.
The average monthly number of staff, including the Directors, during the
financial year was as follows:
2024 2023
Directors 4 3
10. FINANCE COSTS
2024 2023
$ $
260,285 260,347
Interest expense
260,285 260,347
11. INCOME TAX
The tax charge for the year is $Nil (2023: $Nil). Factors affecting the tax
charge for the period are explained below:
2024 2023
$ $
(8,897,048)
Loss for the year before taxation (318,902)
(2,224,262)
UK Loss before tax multiplied by the UK tax rate 25% (2023: 19%) (60,591)
Tax effect of:
Fixed asset differences 1,777,112 -
Expenses not deductible for tax purposes 121,205 -
Gain on loan modification - (94,608)
Unutilised tax losses carried forward 325,945 155,199
- -
The Group has UK tax losses of approximately $2,944,526 (2023: $1,987,874) to
carry forward against future profits. The Directors have not recognised a
deferred tax asset on the losses to date due to the uncertainty of recovery.
The rate of UK corporation tax increased from 19% to 25% with effect from 1
April 2023.
12. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based on the
following loss and number of shares:
2024 2023
Group:
Loss attributable to equity holders of the parent ($) 8,897,048 318,902
Weighted average number of shares (number) 98,600,728 82,674,357
Loss per share (cents) (9.02) (0.39)
There is no difference between the basic and diluted earnings per share as the
effect would be to decrease the loss per share.
13. PROPERTY, PLANT AND EQUIPMENT
Petroleum (Mineral Leases)
Group $ Office equipment
$ Total
$
Cost
At 31 December 2021 1,384,931 11,699 1,396,630
Additions 100,000 - 100,000
At 31 March 2023 1,484,931 11,699 1,496,630
At 31 March 2024 1,484,931 11,699 1,496,630
Accumulated Depreciation and Impairment
At 31 December 2021 - 11,699 11,699
At 31 March 2023 - 11,699 11,699
Impairment 1,484,931 - 1,484,931
At 31 March 2024 1,484,931 11,699 1,496,630
Net Book Amount
At 31 March 2023 1,484,931 - 1,484,931
At 31 March 2024 - - -
Impairment review
It was identified that the primary term for the Mineral Leases had expired without renewal in the year. Whilst there is production on the land, the lease remains enforceable, regardless of whether an extension has been granted. The Mineral Leases at Whistling Straits have had their primary term expire and production ceased in April 2024. Consequently, there is uncertainty over whether the validity and enforceability of said leases.
The Mineral Leases at COG#1-H have also had their primary term expire without renewal. There has not been production at this well for a significant amount of time, resulting in more uncertainty over the validity of these leases. A Competent Person's Report ("CPR") has previously been relied upon to support the ongoing commercial viability at this well. The last CPR is now out of date and the Board are reviewing options to obtain another.
Given this uncertainty, the Directors concluded that an impairment charge of $1,484,931 was necessary for the year ended 31 March 2024.
Further details regarding consideration of the carrying value is contained in note 4.
14. INTANGIBLE ASSETS
Group Drilling costs
$ Total
$
Cost
At 31 March 2023 4,233,890 4,233,890
Additions 1,337,392 1,337,392
At 31 March 2024 5,571,282 5,571,282
Amortisation and Impairment
At 31 December 2021 - -
Amortisation charge for the year - -
At 31 March 2023 - -
Impairment 5,571,282 5,571,282
Amortisation charge for the period - -
At 31 March 2024 5,571,282 5,571,282
Net Book Amount
At 31 March 2023 4,233,890 4,233,890
At 31 March 2024 - -
Drilling costs represents acquired exploration and evaluation assets with an
undetermined useful life and are tested annually for impairment. Drilling
costs are capitalised on a well-by-well basis if the results indicate the
existence of a commercially viable level of reserves.
At 31 March 2024, the Company held, through its US based subsidiary entities,
100% in the leasehold petroleum interests centered on the City of Gonzales,
southwest Texas.
Impairment review - Intangible assets
The Directors have undertaken a review to assess whether circumstances exist
which could indicate the existence of impairment, considering the following
indicators:
• There is uncertainty over the title and enforceability of mineral
leases.
• A decision has been taken by the Board to discontinue exploration
due to the absence of a commercial level of reserves.
• Sufficient data exists to indicate that the costs incurred will
not be fully recovered from future development and participation.
Following their assessment, the Directors concluded that an impairment charge
of $5,571,282 is necessary. Further details regarding consideration of the
carrying value is contained in note 4.
15. INVESTMENTS
Investments in subsidiaries
Company 2024 2023
$ $
Shares in group undertakings
At 1 January 6,440,980 7,038,631
Foreign exchange movements 94,328 (597,651)
Impairments (6,535,308) -
At 31 March - 6,440,980
The Group comprises of the following subsidiaries:
Pennpetro USA Corp
Registered Office: 8 The Green Ste A, Dover, Delaware 19901, USA
Nature of business: Oil and Gas
Class of share: Ordinary shares
% of equity shares held by Company: 100%
Nobel Petroleum USA Inc.
Registered Office: 198 West 13th Street, Wilmington, Delaware
19801, USA
Nature of business: Oil and Gas
Class of share: Ordinary shares
% of equity shares held by Company: 100% via Pennpetro USA Corp
Nobel Petroleum LLC
Registered Office: 3867 Plaza Tower DR Baton Rouge, Louisiana 70816-4378, USA
Nature of business: Oil and Gas
Class of share: Ordinary shares
% of equity shares held by Company: 100% via Pennpetro USA Corp
Pennpetro Greentec UK Limited
Registered Office: 20b Wilton Row London SW1X 7NS, UK
Nature of business: Dormant
Class of share: Ordinary shares (£100)
% of equity shares held by Company: 100%
Pennpetro Green Energy Limited
Registered Office: 20bWilton Row, London SW1X 7NS, UK
Nature of business: Dormant
Class of share: Ordinary shares (£100)
% of equity shares held by Company: 100%
Pennpetro Greentec Limited
Registered Office: 1 Kalymnou, Q MERITO, 4th Floor, Agios Nikolaos, 6037 Larnaca, Cyprus
Nature of business: IP Holding
Class of share: Ordinary shares (€1,000)
% of equity shares held by Company: 100%
Investments in Group undertakings are stated at cost, which is the fair value
of the consideration paid, less any impairment provision.
16. TRADE AND OTHER RECEIVABLES
Group Company
2024 2023 2024 2023
$ $ $ $
Amounts owed from group undertakings - - - 2,944,932
Other receivables 307,881 315,299 14,240 12,386
307,881 315,299 14,240 2,957,318
The fair value of all receivables is the same as their carrying values stated
above.
Group
The carrying amounts of the Group's trade and other receivables are
denominated in the following currencies:
2024 2023
$ $
14,240
UK Pound Sterling 12,386
US Dollar 293,641 302,913
307,881 315,299
The maximum exposure to credit risk at the reporting date is the carrying
value of the trade and other receivables mentioned above. The Group does not
hold any collateral as security.
The impact of a 10% favourable movement in the US Dollar to UK Pound would
increase the carrying value of other receivables denominated in UK Pounds by
approximately $1,424 (2023:
$1,238). The impact of a 10% adverse movement in the US Dollar to UK Pound
would reduce the carrying value of other receivables denominated in UK Pounds
by approximately $1,424 (2021: $1,238).
Company
The carrying amounts of the Company's trade and other receivables are
denominated in UK Pound Sterling.
17. SHORT-TERM INVESTMENTS
Group Company
2024 2023 2024 2023
$ $ $ $
Short-term investments - 82,224 - 82,224
Historically, cash has been held in a short term investment account by FHF
Corporate Finance Limited on behalf of Pennpetro. As at 31 March 2024, the
balance in this account was $50,699 (2023: $82,224). Due to the Company not
having beneficial ownership nor control of this account, the whole amount has
been impaired in these financial statements.
18. CASH AND CASH EQUIVALENTS
Group Company
2024 2023 2024 2023
$ $ $ $
Cash at bank 6,266 46,792 41 -
At 31 March 2024, the Group held cash of $6,266 (2023: $46,792) in banks with
a Fitch credit rating of A (Stable).
19. SHARE CAPITAL AND PREMIUM
Ordinary shares Share premium
Number of Value Value Value Value Total
Group shares £ $ £ $ $
At 1 April 2023
84,499,089 844,991 1,079,101 5,214,819 6,610,719 7,689,820
Share issue 15,800,000 158,000 198,538 1,464,428 1,832,529 2,031,067
At 31 March 2024 100,299,089 1,002,991 1,277,639 6,679,247 8,443,248 9,720,887
On 11 April 2023 10,000,000 new ordinary shares were issued at a price of 3.14
pence per share together with transfers from existing shareholders of a
further 39,526,195 existing shares at a price of 3 pence per share.
On 12 July 2023 5,800,000 new ordinary shares were issued at a price of 2
pence per share together with transfers from existing shareholders of a
further 9,200,000 shares at a price of 2 pence per share.
20. BORROWINGS
Group Company
2024 2023 2024 2023
$ $ $ $
Current liabilities
Corporate borrowings 4,345,948 4,018,369 - -
As at 31 March 2023, the Group had a $5 million Loan Note arrangement with
Petroquest Energy Limited, with a maturity date of 31 December 2024. At the
date of signature of these financial statements, the whole amount is due for
payment. On 20 August 2025, Petroquest Energy Limited issued a Corporate
Undertaking within which the majority of the Petroquest loan would be written
off and its security over assets held in Nobel Petroleum LLC be released.
Further details regarding this agreement are included in Note 28.
The annual interest rate is set at 1% below Barclays Bank base rate. In the
year to 31 March 2024, $211,443 was charged in interest and the effective
interest charge for the year to 31 March 2024 is $48,802 as shown in finance
costs (note 10). The undiscounted balance drawn against this loan note as at
31 March 2024 was $4,604,181 (2023: $4,018,369). The borrowing facility is
secured against certain petroleum leases owned by the Group which have now
expired, and the value of these leases impaired per note 12. The Directors are
in discussion with Petroquest to agree mutually beneficial terms to resolve
the issue. The discounted present value of the loan as at 31 March 2024 was
$4,345,948 (2023: $3,453,767) and reflects an adjustment for effective
interest calculated at 8% per annum over the remaining term of the loan.
The movement in total borrowings in the year was as follows. Borrowings are
denominated partially in US dollars and partially in Pounds Sterling.
Group Company
2024 2023 2024 2023
$ $ $ $
-
At 1 April 4,018,369 4,256,262 -
Advance - - - -
Interest charge 211,443 260,347 - -
Net repayment - - - -
Adjustment for effective interest 48,802 - - -
Adjustment for historic Directors balance 67,335 (497,939) - -
Foreign currency exchange - (301) - -
At 31 March 4,345,949 4,018,369 - -
The fair value of borrowings equals their carrying amount. Borrowings are
denominated in US dollars.
The net debt position (total borrowings less cash on hand) as at 31 March 2024
is $4,339,683 (2023: $3,971,577). Settlement of the Petroquest Loan Note has
been agreed since the year end. Further details regarding the settlement are
included in Note 28.
20. BORROWINGS (continued)
Group
The carrying amounts of the Group's borrowings are denominated in the
following currencies:
2024 2023
$ $
UK Pound Sterling - -
US Dollar 4,345,949 4,018,369
4,345,949 4,018,369
Company
The company does not carry any borrowings.
21. TRADE AND OTHER PAYABLES
Group Company
2024 2023 2024 2023
$ $ $ $
Trade and other payables 1,362,468 881,076 994,462 1,240,006
Amounts owed to group undertakings - - 33,308 32,696
Facility provision (1) 529,508 - 529,508 -
Accrued expenses 237,140 85,910 237,140 85,910
At31 March 2024 2,129,116 966,986 1,794,418 1,358,612
(1) The facility provision relates wholly to a balance owed to a
creditor with a historic share subscription facility that the Company drew
down on for operations. This balance is due within one year of 31 March 2024.
Group
The carrying amounts of the Group's trade and other payables are denominated
in the following currencies:
2024 2023
$ $
UK Pound Sterling 1,794,418 916,986
US Dollar 334,698 50,000
2,129,116 966,986
The impact of a 10% favourable movement in the US Dollar to UK Pound would
increase the carrying value of trade and other payables denominated in UK
Pounds by approximately
$179,442 (2023: $91,698). The impact of a 10% adverse movement in the US
Dollar to UK Pound would reduce the carrying value of trade and other payables
denominated in UK Pounds by approximately $179,442 (2023: $91,698).
Company
The carrying amounts of the Company's trade and other payables are denominated
in UK Pound sterling. The carrying amounts of the Company's US subsidiary
companies are denominated in US Dollars.
22. FINANCIAL INSTRUMENTS BY CATEGORY
Group Company
2024 2023 2024 2023
$ $ $ $
Assets as per Statement of
Financial Position
Loans and receivables:
Trade and other receivables (excluding prepayments)
307,881 315,299 14,240 2,957,318
Short-term investments - 82,224 - 82,224
Cash and cash equivalents 6,266 46,792 41 -
314,147 444,315 14,281 3,039,542
Liabilities per Statement of Financial Position
Financial liabilities at amortised cost:
Borrowings 4,345,949 4,018,369 - -
Trade and other payables (excluding non-financial liabilities) 2,129,116 966,986 1,794,418 1,358,612
6,475,065 4,985,355 1,794,418 1,358,612
23. TREASURY POLICY
The Company and Group operate informal treasury policies which include ongoing
assessments of interest rate management and borrowing policy. The Board
approves all decisions on treasury policy.
The Group has financed its activities by raising funds through borrowings set
out in note 20 above. There are no material differences between the book value
and fair value of the financial assets.
24. CAPITAL MANAGEMENT POLICIES
The Group and Company set the amount of capital in proportion to its overall
financing structure and manage their capital structure and make adjustments to
it in the light of changes in economic conditions and the risk characteristics
of the underlying assets.
The Group considers its equity to be its capital.
The Group and Company's capital management objectives are:
• to ensure compliance with borrowing covenants;
• to ensure the Group's and Company's ability to continue as a going
concern; and
• to provide an adequate return to shareholders.
In order to maintain or adjust the capital structure, the Group may issue new
shares or sell assets to reduce debts. The Group will continue making interest
payments in accordance with financial and non-financial loan covenants.
The Group applies itself to taking on critically analysed and early productive
asset acquisitions as a forward de-risk strategy to maintain going concern
issues.
25. CAPITAL COMMITMENTS
As at 31 March 2024, the Group had no capital commitment for drilling and
equipment costs contracted but not provided for. The agreements signed in 2023
with Horse Hill carry no capital commitments until that agreement becomes
unconditional. The Group had no other capital commitments.
26. RELATED PARTY TRANSACTIONS
Transactions with Directors
An amount of £25,000 was previously received from Olof Rapp via Petroquest
Energy Limited. This amount remains outstanding as at 31 March 2024 and is
included in the total loan note owed to Petroquest Energy Limited.
An amount of £10,000 that was previously advanced to Thomas Evans remains
outstanding as at 31 March 2024 (2023: £10,000). The amount is secured
against shares held by him in the Company and is due for repayment within 12
months. No interest has been charged on the advance.
As at 31 March 2024, Thomas Evans was a Director of the following companies
which are considered as related parties:
• FHF Securities (A'Asia) Limited - a shareholder in Pennpetro with
a 0.49% shareholding in the Company.
• Nobel Petroleum LLC, which is a 100% directly owned subsidiary of
Pennpetro USA Corp.
• Nobel Petroleum USA, Inc, which is a 100% owned subsidiary of
Pennpetro USA Corp.
• Pennpetro USA Corp., which is a 100% owned subsidiary of
Pennpetro.
• Pennpetro Greentec UK Limited, which is a 100% owned subsidiary of
Pennpetro.
• Pennpetro Green Energy Limited, which is a 100% owned subsidiary
of Pennpetro.
• Pennpetro Greentec Limited, which is a 100% owned subsidiary of
Pennpetro.
Transactions with Group undertakings
During the year ended 31 March 2023, the Company provided funds to its wholly
owned subsidiary Nobel Petroleum USA of $1,013,447 (2023: $134,753).
After the foreign exchange losses of $55,081 (2023: loss of $267,965) and an
impairment charge of $3,958,379, the total amount due from the Group as at 31
March 2024 was $Nil (2023: $2,944,932).
All Group transactions were eliminated on consolidation.
Transactions with other Related Parties
Subsequent to the date of this report, Stephen Lunn became a majority
shareholder in Petroquest Energy Limited. The related party relationship did
not exist during the reporting period ended 31 March 2024. This event is
disclosed as a material non-adjusting subsequent event under IAS10. The
balance owed to Petroquest Energy Limited $4,345,949 as at 31 March 2024 as
detailed in Note 20.
27. ULTIMATE CONTROLLING PARTY
As at 31 March 2024, there was no ultimate controlling party.
28. EVENTS AFTER THE REPORTING PERIOD
On 17 July 2024, the Company signed a deal Heads of Terms with Globalvision
International U. LDA ("Globalvision") to purchase the entire share capital in
Pennpetro's subsidiary Nobel Petroleum USA Inc ("Nobel") in exchange for a
life of asset estimated at around 30 years oil sales revenues through a 12.5%
Overriding Royalty Interest. This transaction has not yet completed due to
unforeseen complications.
The Company also changed registered address from 20b Wilton Row, London, SW1X
7NS to 6 Heddon Street, London, W1B 4BT on this date.
On 31 July 2024, the Company raised £360,000 gross proceeds from the issue of
6,000,000 new ordinary shares at a price of 6 pence per share.
On 14 August 2024, the Company raised £300,000 gross proceeds from the issue
of 5,000,000 new ordinary shares at a price of 6 pence per share.
On 5 November 2024, the Company raised £120,000 gross proceeds from the issue
of 1,000,000 new ordinary shares at a price of 12 pence per share.
On 17 December 2024, Thomas Evans resigned from his position as CEO with
immediate effect. The position was temporarily filled by Stephen Lunn until
Robert Menzel was appointed CEO on 21 January 2025.
On 31 December 2024, the Petroquest loan note reached maturity date. On 20
August 2025, Petroquest Energy Limited issued a Corporate Undertaking within
which the majority of the Petroquest loan note would be written off and its
security over assets held in Nobel Petroleum LLC be released. The balance of
the loan will be converted into a 50% stake in Pennpetro USA Corp. This
process has not yet been finalised as of the date of approval of these
financial statements.
On 24 September 2025, the Company entered into an unsecured convertible loan
note agreement with RMD Holdings Ltd to provide the Company with £250,000 for
working capital requirements. Interest shall be payable at 6% per annum and
will accrue daily.
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