REG - Sunda Energy PLC - Final Results for the Year Ended 31 December 2024
02/06/2025 07:00
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RNS Number : 9732K Sunda Energy PLC 02 June 2025
2 June 2025
Sunda Energy Plc
("Sunda Energy", "Sunda", the "Company", or the "Group")
Final Results for the Year Ended 31 December 2024
Sunda Energy (AIM: SNDA), the AIM-quoted exploration and appraisal company
focused on gas assets in Southeast Asia, is pleased to announce its audited
financial results for the year ended 31 December 2024.
Operational Highlights for 2024
· Farm-in completed with TIMOR GAP, increasing their working
interest from 25% to 40%, resulting in TIMOR GAP being responsible for 20% of
PSC costs.
· Memorandum of Understanding signed with MPRM and TIMOR GAP,
setting the framework for joint evaluation of a development concept for gas
resources on Chuditch.
· Application for two offshore licence areas in the Philippines,
which sit in an area that the Sunda team knows well and where there is
potential for vast energy resources.
· UK Licence P2478 relinquished with all commitments having been
fulfilled.
Post-period end developments
· Entered into further farm-in agreement with TIMOR GAP, assigning
them an additional 30% working interest resulting in their interest increasing
to 70% on completion. Expected to close in June 2025.
· Completed an Environmental Baseline Survey in the area of the
planned Chuditch well, with results integrated into the Environmental Impact
Statement and the Environmental Management Plan.
Financial Highlights for 2024
· Cash Reserves at 31 December 2024 were £3.20m (31 December 2023:
£3.76m).
· Loss after taxation of £2.05m (2023: £1.71m).
· Completed a Placing, Subscription and WRAP Retail Offer of new
ordinary shares at 0.05p to raise £3.26 million (gross) in February 2024.
Post-period end developments
· Issuance of convertible loan notes to three institutional
investors raising up to US$9.0 million to fund Sunda's share of the PSC costs.
Commenting on the results, Gerry Aherne, Non-Executive Chairman, said:
"2024 was a year of tremendous change for the Company. With significant
changes to the Board, management and direction, it made sense to change the
name. Sunda Energy Plc is now a company truly focused on SE Asia, and in
particular gas projects in that region. The Company has built on its exciting
and valuable asset in Timor-Leste, putting together a highly experienced
operating team and evaluating a pipeline of material new venture opportunities
across the region.
"I extend my thanks to all stakeholders of the Company, including my fellow
directors, our dedicated and hard-working employees and consultants, and our
Timorese joint venture and government partners, for their strong support of
the Company's efforts."
Posting of Annual Report and Notice of AGM
The Company's Annual Report and Financial Statements for the year ended 31
December 2024 will be available for download from the Company's website
(https://sundaenergy.com/) later today and will be despatched by post shortly
to shareholders.
The Company will hold its Annual General Meeting at 11a.m. BST on 27 June 2025
at Riverbank House, 2 Swan Lane, London, EC4R 3TT. The Notice of Annual
General Meeting will be sent to shareholders shortly and will be available on
the Company's website (www.sundaenergy.com (http://www.sundaenergy.com/) ).
For further information, please contact:
Sunda Energy Plc Tel: +44 (0) 20 7770 6424
Andy Butler, Chief Executive
Rob Collins, Chief Financial Officer
Allenby Capital Limited (Nominated Adviser and Joint Broker) Tel: +44 (0) 203 328 5656
Nick Athanas, Nick Harriss, Ashur Joseph (Corporate Finance)
Kelly Gardiner, Stefano Aquilino (Sales and Corporate Broking)
Hannam & Partners Advisory Limited (Advisor and Joint Broker) Tel: +44 (0) 20 7907 8502
Neil Passmore (Corporate Finance)
Leif Powis (Sales)
Celicourt Communications (Financial PR and IR) Tel: +44 (0) 20 7770 6424
Mark Antelme, Philip Dennis, Charles Denley-Myerson sunda@celicourt.uk (mailto:sunda@celicourt.uk)
Qualified Person's Statement
Pursuant to the requirements of the AIM Rules - Note for Mining and Oil and
Gas Companies, the technical information and resource reporting contained in
this announcement has been reviewed by Dr Andrew Butler, Fellow of the
Geological Society of London and member of the Society of Petroleum Engineers.
Dr Butler has more than 28 years' experience as a petroleum geologist. He has
compiled, read and approved the technical disclosure in this regulatory
announcement and indicated where it does not comply with the Society of
Petroleum Engineers' standard.
CHAIRMAN'S STATEMENT & OPERATIONS REPORT
Financial Review
The net result for the year was a loss both before and after taxation of
£2,049,000 (2023: loss of £1,712,000), which is wholly attributable to Sunda
Energy shareholders, representing a loss of 0.008p per share (2023: loss of
0.009p).
The Group generated no revenue during the period but focused on exploring and
developing assets that the Board believes will generate revenue for the Group
in the future.
Administration expenses for the year were £2,222,000 (2023: £1,455,000), an
overall increase on the preceding year of £767,000. Administration costs
arising in SundaGas (Timor-Leste Sahul) Pte. Ltd. ("TLS") and its Timor-Leste
subsidiary have increased from £568,000 previously to £743,000 this year as
the operation in Dili continues to gear up for the forthcoming drill phase of
the Chuditch development. UK Directors and staff salaries and related costs
reduced by £58,000 to £530,000 in the year, excluding severance costs paid
to prior directors which amounted to £299,000. Details of directors' salaries
are contained in the Report of the Directors in the Annual Report on page 18.
Professional adviser fees increased from £227,000 previously to £454,000,
mainly due to higher legal, consultancy and professional adviser costs.
Non-capitalised exploration and evaluation expenditure incurred included in
the Income Statement amounted to £170,000 (2023: £121,000), largely arising
from surface rental costs on Chuditch and new venture costs. The Directors
judged that no exploration assets required impairment.
In February 2024 the Company raised £2,993,000 net of costs from the issue of
new share capital by way of a placing and subscription. In addition, in
February 2024, the Group received £719,000 arising from the farm-out of a 20%
interest in Timor-Leste TL-SO-19-16 PSC to TIMOR GAP Chuditch Unipessoal Lda
("TIMOR GAP").
During June 2024, the Bank Guarantee for the Chuditch PSC was increased from
US$1.0 million to US$2.5 million (net US$2.0 million) as the Company prepared
to enter Contract Year 3 of the PSC, with its increased work commitments. The
new Bank Guarantee was issued by Banco Nacional de Comércio de Timor-Leste
("BNCTL"), a bank wholly owned by the government of Timor-Leste. The use of
BNCTL is part of the Company's commitment to maximising local content inside
Timor-Leste, but also indicative of its objective to broaden its business
partnerships in-country.
At the end of the financial year, cash reserves of the Group had decreased to
£3,171,000 from a level at the preceding year end of £3,760,000 after taking
into account the aforementioned capital receipts, as the Group absorbed cash
in its continuing operations. The Group's investment in exploration and
evaluation assets in Timor-Leste amounted to £1,783,000 in the period; a new
performance bond guarantee deposit of £1,569,000 was paid out offset by
recovery of a previous bond amounting to £792,000, and there was a general
operating cash outflow amounting to £1,753,000. The Company achieved interest
receivable of £152,000 on its bank balances.
The Group continues to take a conservative view of its asset impairment
policy, giving it a statement of financial position that consists of
significant net current assets and what the Board considers to be a realistic
value for its exploration assets. The Board will continue to take a prudent
approach in entering into new capital expenditures beyond those expected to be
committed to existing ventures.
Report on Operations
Southeast Asia: Timor-Leste TL-SO-19-16 PSC ("Chuditch PSC" or "PSC") (Sunda
60% interest - since February 2024)
Background
The Chuditch PSC is located approximately 185 kilometres south of Timor-Leste,
100 kilometres east of the producing Bayu-Undan field, 50 kilometres south of
the potential Greater Sunrise development and covers approximately 3,571 km(2)
in water depths of 40-120 metres. The Chuditch-1 discovery well, drilled by
Shell in 1998 in 64 metres water depth, encountered a 30 metre gross gas
column in Jurassic Plover Formation sandstone reservoirs at a depth of 2,910
metres on the flank of a large, faulted structure. The discovery and
neighbouring prospects are largely covered by a 3D seismic survey acquired in
2012 and subsequently reprocessed by Sunda.
Sunda operates the PSC through its wholly owned subsidiary SundaGas Banda
Unipessoal Lda. ("SundaGas"), based out of its offices in Dili, Timor-Leste.
Until February 2024, the Company held a 75% working interest in partnership
with TIMOR GAP Chuditch Unipessoal Lda, a subsidiary of the state-owned
national oil company, who held the remaining 25% and which share of PSC
expenditure is carried until first production.
On 7 February 2024, the Company completed a transaction whereby TIMOR GAP
increased its participation in the PSC from 25% to 40%. Accordingly, the
SundaGas 60% share became responsible for 80% of the costs of the Chuditch
project and TIMOR GAP for 20%. TIMOR GAP paid approximately US$ 1 million to
cover its share of prior costs from the effective date of the PSC until the
completion of this transfer.
Previously, the Company had carried out a technical work programme that
included the reprocessing of legacy seismic data, aimed at addressing
reservoir imaging issues caused by sea-bed topography and shallow geological
features as well as various geological and engineering studies. These
activities fulfilled the PSC obligations for Contract Years 1 and 2 of the PSC
and enabled Sunda to assess fully the Chuditch field and its gas resources.
Consultancy group ERC Equipoise Ltd ("ERCE") was then engaged to prepare a
Competent Person's Report ("CPR") to provide an independent assessment of the
Chuditch resource to a SPE PRMS compliant standard. The CPR was released on 28
February 2023. For the Chuditch-1 discovery, ERCE assessed gross Pmean
Contingent Resources of 1.16 Tcf of gas. In addition, aggregated gross Pmean
Prospective Resources attributable to the licence according to the CPR
amounted to 1,562 Bcf gas across three prospects, Chuditch SW, Chuditch NE and
Quokka. Geological Chances of Success ("GCOS") for these prospects range from
52% to 26%, providing substantial follow on, low risk exploration potential to
any Chuditch development. It is notable that Sunda's in-house probabilistic
estimates of aggregated gross Prospective Resources for these prospects, at
2,128 Bcf of gas, are higher than ERCE's estimates. This arises mainly through
the Company's preferred use of the latest reprocessed seismic data velocity
model to define the extent of the prospects.
Based on the above results, the Company commenced organisational and technical
preparations for the drilling of an appraisal well in the second half of 2023.
This appraisal well became an actual PSC commitment when Contract Year 3 began
on 19 June 2024.
There continues to be an excellent working relationship between SundaGas, the
Government Ministry of Petroleum and Mineral Resources ("MPRM"), Autoridade
Nacional do Petróleo ("ANP"), the Government regulatory authority for
petroleum, and TIMOR GAP. The Company meets regularly with all of these bodies
and provides detailed updates around our activities, plans and timelines on
the PSC. The Company appreciates the support that it receives from these
various state entities and will continue to work on maintaining these close
relationships.
2024 and subsequent activities
Planning for the drilling of the Chuditch-2 appraisal well dominated
activities during 2024. A well location was selected that is 5.1km from the
original Chuditch-1 discovery well in a water depth of approximately 68m. The
predicted vertical column height of gas in the Jurassic reservoirs at this
location is 149m, as compared with the 30m gross gas column encountered in the
discovery well.
The Company decided to build an in-house drilling capability in preparation
for the Chuditch-2 campaign. Taking this approach, rather than outsourcing to
a drilling management company, enabled Sunda to select and retain the best
personnel for the project. The Company now has a team of highly experienced
drilling engineers, HSE, logistics and procurement professionals that are
equipped to deliver not only the Chuditch-2 wells but also further future
drilling on the PSC and more broadly within Sunda's ambitious business plans.
In February 2024 and April 2024, SundaGas completed Geophysical and
Geotechnical surveys at the planned location of the Chuditch-2 appraisal well.
The objective of these surveys was principally to identify any potential
hazards at the proposed well site, ensuring that a drilling rig can be safely
located there with minimal environmental impact. Based on survey results,
Sunda's drill team chose to move the final well location by around 300m to
avoid an irregular area of seabed that represented a potential hazard.
Subsequent to the reporting period, in January 2025, the Company completed an
Environmental Baseline Survey ("EBS") in the area of the planned well. The
purpose of the EBS was to gather information on the seabed sediments and fauna
as well as collect seawater samples. The results were integrated into the
Environmental Impact Statement and the Environmental Management Plan for
submission to ANP, as well as being available for future assessments of any
impacts caused by drilling activities. Following public consultation exercises
and ANP's review, it is anticipated that final Environmental Permits for
drilling will be issued in good time before mobilisation of the drilling
equipment for the well.
During 2024, Sunda held discussions with a number of potential partners in the
PSC that expressed interest in participating in the Chuditch project,
including the drilling of the planned appraisal well and subsequent
anticipated development activities. The Company announced on 12 August 2024
that it had entered into an exclusive arrangement (the "Exclusivity
Agreement") with Pacific LNG Operations Pte Ltd. ("PLNG"), a private group
specialising in resource investments. Ultimately, discussions with PLNG did
not reach a successful conclusion and the Exclusivity Agreement was
terminated. Several other parties submitted proposals to Sunda to participate
in the Chuditch project, but these came with commercial terms that were
unattractive or conditions that were not acceptable. These conditions included
significant delays to appraisal drilling, unachievable commercial guarantees
and unrealistic development concepts.
At the end of the reporting period, based on the outcome of the discussions
described above and considering the strength and depth of support for the
Chuditch project from the Timor-Leste authorities, the Company decided that a
further farm in by TIMOR GAP represented the best route to guarantee
short-term drilling of the Chuditch appraisal well, along with financing
provided by certain investors into the Company. Accordingly, it was announced
on 24 April 2025 that the Company had entered into a farm out agreement under
which it assigned an additional 30% working interest in the PSC to TIMOR GAP,
along with the issuance of a convertible loan note (and associated warrants).
These combined arrangements secured the funding for the drilling of the
appraisal well. The farm out transaction with TIMOR GAP is expected to close
during June 2025, following the execution of a contract for a jack up drilling
rig and approval by ANP.
In parallel with the environmental permitting and funding arrangements
described above, all other aspects for preparation of drilling are ongoing,
including procurement activities, logistical planning and coordination with
various regulatory bodies in Timor-Leste. Based on the current schedule of
activities and the operations being carried out currently on the drilling rig
by other E&P companies, it is estimated that the well will spud during
August 2025. The current PSC year 3 expires on 18 June 2025 and therefore an
extension will be applied for shortly.
Good progress was also made in 2024 with respect to evaluating potential gas
development and export scenarios for Chuditch. Discussions were held with
various parties, culminating in the signature of a Memorandum of Understanding
("MOU") on 12 December 2024 with MPRM and TIMOR GAP. The MOU set out the
framework for joint evaluation of a development concept for gas resources on
the Chuditch PSC, including pipeline export to the Bayu Undan field and on to
planned LNG facilities on the south coast of Timor-Leste. Subsequent to the
reporting period, an engineering Feasibility Study was commissioned from
selected third party engineering consultants for the future development of
Chuditch and a pipeline to Bayu Undan. This work is intended as a springboard
for the Chuditch joint venture to move forward quickly with development plans
following the completion of the Chuditch-2 appraisal well.
It is worthwhile to note other activity in the E&P sector in Timor-Leste,
which continues to see an uptick in interest and activity. Through 2024, the
parties to the Greater Sunrise joint venture along with the governments of
Timor-Leste and Australia commissioned a study carried out by Wood Group Plc
to evaluate the respective commercial, technical and economic merits of taking
gas from Sunrise to either Darwin in Australia or the south coast of
Timor-Leste. The results of this eagerly awaited report were delivered to the
parties in late 2024, but as of now have not been publicly disclosed. Finder
Energy Holdings Ltd, an Australian E&P company entered Timor-Leste through
its acquisition of Eni S.p.A. and INPEX Corporation interests in a PSC
containing the Kuda Tasi and Jahal oil discoveries, which it intends to put
onto a fast-track development path. Adjacent to the Chuditch PSC, Eni have
been planning to acquire 3D seismic data, which we understand will now
probably occur in Q3 2025. Onshore, Timor Resources Pty Ltd are preparing for
appraisal drilling following their discoveries in 2022-23 and TIMOR GAP E.P.
commenced acquiring 2D seismic data on the Pualaca PSC. All of these other
industry activities are supportive of the development of the energy sector in
Timor-Leste, and Sunda is proud to be at the forefront of this development.
United Kingdom Offshore Licence P2478 (relinquished 31 March 2024)
On 31 March 2024, offshore UK Licence P2478 was surrendered to the UK North
Sea Transition Authority ("NSTA"), following delays to the acquisition of 3D
seismic data that had been stipulated in the terms of an extension to Phase A
of the licence. The delays largely resulted from the continuous wind farm
construction activities in the area. The Company had held a 32% non-operated
interest in the licence. All of Sunda's commitments on the licence had been
fulfilled and a relinquishment report was submitted.
Peru
In April 2022, the Company requested the relinquishment of Licence Block XXI
in Peru, a legacy asset dating from an earlier, Latin-America focused
strategy. Licence Block XXI had been largely under Force Majeure for a variety
of reasons since 2017. Sunda continues to own a Peruvian subsidiary, Gold Oil
Peru S.A.C., and is working with local legal counsel regarding steps to
complete its exit from Peru.
New Ventures
Following its pivot to Southeast Asia, Sunda has adopted a New Venture
strategy focused on the region. The Company is seeking to identify and
evaluate business growth opportunities that build a portfolio of
opportunities, to diversify its asset base and create further shareholder
value. The development of a New Venture strategy had been identified by the
Board of Directors as a short-term priority and included in Sunda's KPIs for
2024 and 2025.
The Company has a focused approach to new business, shepherding limited
resources in capital and personnel, whilst leveraging its competitive
advantages in Southeast Asia. These include an experienced team that has
extensive regional knowledge and is reputed for its high technical and
operating standards, and the Company's strong relationships with governments
and industry peers. Sunda sees quality opportunities of scale across the
region and is focused on target asset types that can be categorised as
follows:
· Large, low-risk "Chuditch-type" gas exploration and appraisal
assets, which have been significantly de-risked by earlier industry activities
· Infrastructure or market-led opportunities, typically onshore or
in shallow waters, where resources sizes may be smaller, but with material
value and shorter timelines to monetisation
· Production assets that are identified as accessible and
value-additive
It is in the context of the first of these themes that the Company announced
on 28 August 2024 that it had applied for two Petroleum Service Contracts for
offshore licence areas in the 1st Conventional Energy Bid Round of the
Bangsamoro Autonomous Region of Muslim Mindanao ("BARMM") in the Philippines.
The two blocks sit in an area that the Sunda team knows well and where there
is potential for vast energy resources. The applications were made on a
non-operated basis in a joint venture partnership with three others, including
two Philippines E&P companies. Under the joint venture agreement, Sunda
will have a 37.5% interest in these blocks, which contain material gas
discoveries that point to significant upside potential.
As of the date of this report, the Company has not received news from the
Philippines authorities regarding the award of the Service Contracts, although
it is confirmed that the bids made have been fully evaluated and endorsed, and
are now with the office of the President of the Philippines for final approval
and signature. Further updates on these high potential blocks will be
announced once confirmation of award is received.
Other New Business opportunities are being actively pursued in line with the
strategy described above.
Corporate and Social Responsibility
Following the changes undertaken by the Company during 2024, and with its
ambitions to become an important regional player in SE Asia, Sunda is putting
increased efforts into a meaningful CSR programme in the areas where we
operate, currently Timor-Leste.
As part of our in-country Timor-Leste activities, the Company undertakes
various initiatives to develop the capabilities of the Timorese geological
community, through relationships with local universities and professional
organisations. During 2024, we welcomed a number of student interns and
sponsored a student through a scheme run by the Timor-Leste Student Chapter of
the Society of Petroleum Engineers ("SPE"). The Company also sponsored and
gave presentations to the new full Timor Leste SPE Chapter and to university
law students on the energy industry and an event jointly coordinated with the
Association of International Energy Negotiators.
During 2024, the Company instigated discussions with the Ministry of Education
to seek ways to contribute to educational assistance for the community in Dili
where our local office and team are located. As a result of these discussions,
it was decided to assist with the renovation of pre-school / kindergarten
facilities. A number of schools were visited, and a pre-school in Manleuana on
the south side of Dili was selected. On review, it was decided that the
facilities at this pre-school were in such poor condition that it would be
better to demolish and construct anew. A contract was therefore awarded in
January 2025 and the new pre-school buildings are scheduled to be officially
opened in June 2025.
Corporate update
On 29 February 2024, the Company completed a Placing, Subscription and WRAP
Retail Offer of new ordinary shares at 0.05p to raise £3.26 million (gross).
The monies were deployed in support of drilling preparations on the Chuditch
PSC (Timor-Leste).
On 15 March 2024, Andy Butler, previously Director Asia-Pacific, took on the
role of Chief Executive replacing Andy Yeo, who left the Company on 1 April
2024. On 22 April 2024, John Wakefield stepped down as Non-Executive Chairman
and I was appointed in his place. In addition, on that date, it was announced
that Dr John Chessher had been appointed as an Independent Non-executive
Director and Rob Collins had been appointed as non-Board Chief Financial
Officer. On 30 April 2024, Jon Ford stepped down from the Board, although he
has been retained by the Company in a part-time consultancy role. Later, on 12
August 2024, it was announced that Rob Collins had been appointed to the
Board.
Following the changes to the Board, the Company instigated a review of its
governance structure. The company has joined the Quoted Companies Alliance and
adopted its updated Guidelines published in 2023, as outlined in the Corporate
Governance section of this report. The Terms of Reference of the board
committees have been revisited and a new Health, Safety and Environment
("HSE") Committee established.
Conclusions
2024 was a year of tremendous change for the Company. With significant changes
to the Board, management and direction, it made sense to change the name.
Sunda Energy Plc is now a company truly focused on SE Asia, and in particular
gas projects in that region. The Company has built on its exciting and
valuable asset in Timor-Leste, putting together a highly experienced operating
team and evaluating a pipeline of material new venture opportunities across
the region.
I am pleased to report the significant progress in preparations towards the
drilling of an appraisal well on the Chuditch field. We look forward with
great excitement to the drilling of that well, the first to be operated by the
Company and a critical milestone in realising the considerable and potentially
transformative value of Chuditch for the Company and its shareholders. In
addition, I look forward to the award of our applications in the Philippines
and further expanding the Company's portfolio of material gas assets in
Southeast Asia.
Note of Appreciation
I extend my thanks to all stakeholders of the Company, including my fellow
directors, our dedicated and hard-working employees and consultants, and our
Timorese joint venture and government partners, for their strong support of
the Company's efforts. In these uncertain times, we are especially grateful
for the support of our investors, who have patiently followed our progress
towards the key Company milestone of our first operated well, the highly
material Chuditch-appraisal. As we move forward, the Company remains firmly
committed to striving for operational excellence and pursuing strategic
opportunities that will drive long term success.
CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2024
Notes 2024 2023
£'000 £'000
Revenue - -
Cost of sales - -
Gross profit - -
Exploration and evaluation expenditure 3 (170) (121)
Intangible asset impairment 9 - (187)
Property, plant and equipment depreciation 9 (37) (37)
Peru closure costs (6) (26)
Administration expenses 3 (2,222) (1,455)
Recovery of historic costs on farm-out 221 -
Gain/(loss) on exchange 3 15 (32)
Operating loss 3 (2,199) (1,858)
Finance cost 6 (2) (6)
Finance income 6 152 152
Loss on ordinary activities
before taxation (2,049) (1,712)
Income tax expense 7 - -
Loss for the year (2,049) (1,712)
Loss on ordinary activities
after taxation is attributable to:
Equity shareholders (2,049) (1,712)
(2,049) (1,712)
Earnings per ordinary share - continuing 8
Basic (0.008p) (0.009p)
Diluted (0.008p) (0.009p)
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2024
2024 2023
£'000 £'000
Loss on ordinary activities after taxation attributable to the parent (2,049) (1,712)
Other comprehensive income: items which may subsequently be reclassified to
profit and loss
Exchange difference on translating foreign operations 80 (172)
Total comprehensive loss for the year (1,969) (1,884)
Total comprehensive loss attributable to
Owners of the parent (1,969) (1,884)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
at 31 December 2024
Notes 2024 2023
£'000 £'000
Assets
Non current assets
Property plant and equipment 9 28 41
Intangible fixed assets 10 5,059 3,781
5,087 3,822
Current assets
Trade and other receivables 12 86 91
Performance bond guarantee deposit 13 1,596 786
Cash and cash equivalents 14 3,171 3,760
4,853 4,637
Total assets 9,940 8,459
Equity and liabilities
Capital and reserves attributable to owners of the parent
Share capital 17 6,378 4,746
Share premium account 18 40,242 38,881
Share option reserve 18 338 319
Foreign exchange translation reserve 18 795 715
Retained earnings 18 (38,434) (36,406)
Total equity 9,319 8,255
Current liabilities
Trade and other payables 15 597 185
Taxes payable 15 16 15
613 200
Non-current liabilities
Lease finance 15/16 8 4
Total equity and liabilities 9,940 8,459
The financial statements were approved and authorised for issue by the Board
of Directors on 30 May 2025 and were signed on its behalf by:
Director Director
G Aherne A Butler
Company number: 05098776
COMPANY STATEMENT OF FINANCIAL POSITION
at 31 December 2024
Notes 2024 2023
£'000 £'000
Assets
Non current assets
Property plant and equipment 9 19 9
Intangible fixed assets 10 - -
Investments 11 8,878 5,865
8,897 5,874
Current assets
Trade and other receivables 12 58 56
Cash and cash equivalents 14 2,379 3,652
2,437 3,708
Total assets 11,334 9,582
Equity and liabilities
Capital and reserves attributable to owners of the parent
Share capital 17 6,378 4,746
Share premium account 18 40,242 38,881
Share option reserve 18 338 319
Retained earnings 18 (35,731) (34,479)
Total equity 11,227 9,467
Current liabilities
Trade and other payables 15 83 100
Taxes payable 15 16 15
99 115
Non-current liabilities
Lease finance 15/16 8 -
Total equity and liabilities 11,334 9,582
As permitted by section 408 of the Companies Act 2006, the Company's income
statement has not been included in these financial statements. The loss of the
Company for the year was £1,273,000 (2023: loss of £1,244,000).
The financial statements were approved and authorised for issue by the Board
of Directors on 30 May 2025 and were signed on its behalf by:
Director Director
Company number: 05098776
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2024
Share Share Retained Share option Foreign exchange Total
capital premium earnings reserve translation equity
Group £'000 £'000 £'000 £'000 £'000 £'000
As at 1 January 2023 4,730 38,846 (34,707) 332 887 10,088
Shares issued 16 35 - - - 51
Transactions with owners 16 35 - - - 51
Loss for the year attributable to equity shareholders - - (1,712) - - (1,712)
Share option reserve released - - 13 (13) - -
Foreign exchange translation adjustments - . - - (172) (172)
Total comprehensive income for the period - - (1,699) (13) (172) (1,884)
As at 1 January 2024 4,746 38,881 (36,406) 319 715 8,255
Issue of new shares 1,632 1,632 - - - 3,264
Share issue costs - (271) - - - (271)
Transactions with owners 1,632 1,361 - - - 2,993
Loss for the year attributable to equity shareholders - - (2,049) - - (2,049)
Share based payments - - - 40 - 40
Share option reserve released - - 21 (21) - -
Foreign exchange translation adjustments - - - - 80 80
Total comprehensive income for the period - - (2,028) 19 80 (1,929)
As at 31 December 2024 6,378 40,242 (38,434) 338 795 9,319
CONSOLIDATED AND COMPANY STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2024 (continued)
Share Share Retained Share option Total
capital premium earnings reserve equity
£'000 £'000 £'000 £'000 £'000
Company
As at 1 January 2023 4,730 38,846 (33,248) 332 10,660
Shares issued 16 35 - 51
Transactions with owners 16 35 - - 51
Loss for the year - - (1,244) - (1,244)
Share option reserve released - - 13 (13) -
Total comprehensive income for the period - - (1,231) (13) (1,244)
As at 1 January 2024 4,746 38,881 (34,479) 319 9,467
Issue of new shares 1,632 1,632 - - 3,264
Share issue costs - (271) - - (271)
Transactions with owners 1,632 1,361 - - 2,993
Loss for the year - - (1,273) - (1,273)
Share based payments - - - 40 40
Share option reserve released - - 21 (21) -
Total comprehensive income for the period - - (1,252) 19 (1,233)
As at 31 December 2024 6,378 40,242 (35,731) 338 11,227
Share capital is the amount subscribed for shares at nominal value.
Share premium represents the excess of the amount subscribed for share capital
over the nominal value of those shares net of share issue expenses.
Retained earnings represents the cumulative loss of the Group attributable to
equity shareholders.
Foreign exchange translation occurs on consolidation of the translation of the
subsidiaries balance sheets at the closing rate of exchange and their income
statements at the average rate.
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 December 2024
Group Company Group Company
2024 2024 2023 2023
£'000 £'000 £'000 £'000
Operating activities (1,677) (1,497) (1,830) (1,084)
Investing activities
Return from investment and servicing of finance 152 149 152 149
Advances to subsidiary and associated undertakings - (2,905) - (1,050)
Performance bond guarantee deposit repaid 792 - - -
Performance bond guarantee deposit paid out (1,569) - - -
Additions to exploration and evaluation assets (1,738) - (381) (28)
Part disposal of exploration and evaluation asset 498 - - -
Acquisition of tangible assets (9) (5) (2) -
Disposal of tangible assets 2 2 - -
(1,872) (2,759) (231) (929)
Financing activities
Net proceeds from issue of share capital 2,993 2,993 51 51
Lease financing (33) (10) (37) (11)
2,960 2,983 14 40
Net cash outflow (589) (1,273) (2,047) (1,973)
Cash and cash equivalents at the beginning of the year 3,760 3,652 5,807 5,625
Cash and cash equivalents at the end of the year 3,171 2,379 3,760 3,652
CONSOLIDATED AND COMPANY STATEMENT OF CASH FLOWS
for the year ended 31 December 2024 (continued)
Note to the Consolidated and Company Statement of Cash Flow
Group Company Group Company
2024 2024 2023 2023
£'000 £'000 £'000 £'000
Operating activities
Loss for the year attributable to controlling interests (2,049) (1,273) (1,712) (1,244)
Depreciation, amortisation and impairment charges 37 25 224 161
Share based payments 40 40 - -
Finance income shown as an investing activity (152) (149) (152) (149)
Interest on lease liability 2 1 6 1
Foreign exchange translation 9 (116) (20) 225
Operating cash outflows before movements in working capital (2,113) (1,472) (1,654) (1,006)
Decrease/(increase) in receivables 5 (2) 10 5
Increase/(decrease) in payables 431 (16) (186) (83)
Net cash outflows from operating activities (1,677) (1,490) (1,830) (1,084)
NOTES TO THE FINANCIAL STATEMENTS
General Information
Sunda Energy Plc is a public limited company incorporated in England and Wales
and quoted on the AIM market of the London Stock Exchange. The address of the
registered office is disclosed on page 2 of the financial statements. The
principal activity of the Group is described in the Strategic Report on page
9.
(1) Significant accounting policies
The principal accounting policies applied in the
preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the periods presented,
unless otherwise stated.
Going concern basis
The Directors have prepared a cash flow forecast covering the period to 30
June 2026 which contains certain assumptions about the development and
strategy of the business. The Directors are aware of the risks and
uncertainties facing the business and the assumptions used are the Directors'
best estimate of its future development.
The Group intends to enter into a rig contract shortly to drill the Chuditch-2
appraisal well as part of the work program for Year 3 of the PSC. It is
anticipated that the well will spud in August 2025. In order to finance the
Chuditch-2 well the Group has, subject to the completion of certain conditions
precedent including the execution of a rig contract, farmed out an additional
30% interest in the PSC to Timor Gap and has secured a US$9 million unsecured
convertible loan note ("CLN") of which US$1.5m has been drawn and converted
into equity. The CLN contains draw down restrictions, including minimum market
capitalisation of the Company and minimum trading volume. In the event that
these restrictions take effect, the investors and the Company may mutually
agree to waive the restriction. Furthermore, the CLN allows for the
acceleration of the drawdown of the loan amounts. However, there is no
guarantee that the investors will consent in either of these cases.
The cash flow forecast has been prepared on certain assumptions, the most
significant of which are the full drawdown of the CLN, the acceleration of the
drawdown schedule, the partial exercise of warrants associated with the CLN,
and the expected recovery of the performance guarantee bond on or before the
completion of the drill program. On the basis of the assumptions made in
the cash flow forecast, the Group will have sufficient funds to pay its share
of drilling costs as well as operational overheads of the Group for the period
to 30 June 2026.
There is a possibility that well costs may increase significantly above the
forecast spend and the Group may need to seek additional funding to cover its
share of these costs. In order to mitigate this risk the Board have carefully
budgeted and procured key contracts associated with the drilling campaign.
Further to discussions with the Company's broker and certain investors, the
Directors are confident of their ability to raise additional funds through new
placing of shares or through other means, however there is no certainty that
such fundraising will be successful. Similarly, if certain assumptions made
in the forecast are not achieved then additional funds may be required. The
Directors are confident that any cash shortfall can be met through the actions
described above.
These conditions indicate that there is a material uncertainty which may cast
significant doubt over the Group and Company's ability to continue as a going
concern.
After considering the forecasts and the risks, the Directors have a reasonable
expectation that the Group has adequate resources to continue in operational
existence for the foreseeable future. For these reasons, they continue to
adopt the going concern basis of accounting in preparing the annual financial
statements. The financial statements do not include any adjustments that would
result if the Group was unable to continue as a going concern.
Basis of preparation
The financial statements have been prepared in accordance with UK adopted
International Accounting Standards and IFRIC interpretations issued by the
International Accounting Standards Board (IASB) and with those parts of the
Companies Act 2006 applicable to companies reporting under IFRS. The financial
statements have been prepared under the historical cost convention. The
principal accounting policies adopted are set out below.
Changes in accounting policies and disclosures
Adoption of new and revised standards
a) The impact of new IFRSs adopted during the year
During the year the Group adopted the following IFRS amendments and standards
which were effective for the first time in periods commencing on or after 1
January 2024:
- IAS 1 Presentation of Financial Statements (Amendments to
Classification of Liabilities as Current or Non-current)
- IAS 1 Presentation of Financial Statements (Amendment to
Non-current liabilities with covenants)
- IFRS 16 Leases (Amendment, Lease Liability in a Sale and
Leaseback)
- Amendments to IAS 7 and IFRS 7 in respect of Supplier Finance
Arrangements
None of the above were considered to have a material impact.
b) New standards, interpretations and amendments not yet effective
The following IFRSs and amendments have been issued by the IASB but are not
effective until a future period, with timing expected to be as indicated.
- IAS 21 The Effects of Changes in Foreign Exchange Rates
(Amendments) - Lack of exchangeability (1 January 2025)
- Amendments to the Classification and Measurement of Financial
Instruments (Amendments to IFRS 9 Financial Instruments) (1 January 2026) *
- Annual Improvements to IFRS Volume 11 (Amendments to IFRS 1
First-Time Adoption of IFRS; IFRS 7 Financial Instruments Disclosures; IFRS 9
Financial Instruments; IFRS 10 Consolidated Financial Statements and IAS 7
Statement of Cash Flows) (1 January 2026) *
- IFRS 18 Presentation and Disclosure in Financial Statements (1
January 2027) *
- IFRS 19 Subsidiaries without Public Accountability: Disclosures
(1 January 2027) *
*Not yet endorsed by the UK Endorsement Board.
The Board are currently assessing the impact of these new amendments on the
Group's financial reporting for future periods. However, the Board does not
expect any of the above to have a material impact on future reporting except
for IFRS 18 which is expected to result in changes in the presentation of
certain primary financial statements. A full assessment will be performed
once the standard is adopted in the UK.
Basis of consolidation
The consolidated financial statements include the financial statements of the
Company and its subsidiaries using the acquisition method of accounting.
Subsidiaries
Subsidiaries are all entities over which Sunda Energy Plc 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 fully consolidated from the date on which
control is transferred to the Company. They are de-consolidated from the date
that control ceases.
Inter-company transactions, balances and unrealised gains on transactions
between Group companies are eliminated. Unrealised losses are also eliminated
but considered an impairment indicator of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Impairment of non-financial assets
At each statement of financial position date, the Group reviews the carrying
amounts of its tangible and intangible assets to determine whether there is
any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order
to determine the extent of the impairment loss (if any). Where the asset does
not generate cash flows that are independent from other assets, the Group
estimates the recoverable amount of the cash-generating unit to which the
asset belongs. An intangible asset with an indefinite useful life is tested
for impairment annually and whenever there is an indication that the asset may
be impaired.
Recoverable amount is the higher of fair value less costs to sell and value in
use. In assessing value in use, the estimated future cash flows are discounted
to their present value using a pre-tax discount rate that reflects current
market assessments of the time value of money and the risks specific to the
asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated
to be less than its carrying amount, the carrying amount of the asset
(cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised as an expense immediately, unless the relevant asset is
carried at a re-valued amount, in which case the impairment loss is treated as
a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the
asset (cash-generating unit) is increased to the revised estimate of its
recoverable amount, but so that the increased carrying amount does not exceed
the carrying amount that would have been determined had no impairment loss
been recognised for the asset (cash-generating unit) in prior periods. A
reversal of an impairment loss is recognised as income immediately, unless the
relevant asset is carried at a revalued amount, in which case the reversal of
the impairment loss is treated as a revaluation increase.
Intangible Assets
Oil and gas assets: exploration and evaluation
The Group has continued to apply the 'successful efforts' method of accounting
for Exploration and Evaluation ("E&E") costs, having regard to the
requirements of IFRS 6 'Exploration for the Evaluation of Mineral Resources'.
The successful efforts method means that only the costs which relate directly
to the discovery and development of specific oil and gas reserves are
capitalised. Such costs may include costs of licence acquisition, technical
services and studies, seismic acquisition; exploration drilling and testing
but do not include costs incurred prior to having obtained the legal rights to
explore the area. Under successful efforts accounting, exploration expenditure
which is general in nature is charged directly to the income statement and
that which relates to unsuccessful drilling operations, though initially
capitalised pending determination, is subsequently written off. Only costs
which relate directly to the discovery and development of specific commercial
oil and gas reserves will remain capitalised and to be depreciated over the
lives of these reserves. The success or failure of each exploration effort
will be judged on a well-by-well basis as each potentially hydrocarbon-bearing
structure is identified and tested. Exploration and evaluation costs are
capitalised within intangible assets. Costs incurred prior to obtaining legal
rights to explore are expensed immediately to the income statement.
All lease and licence acquisition costs, geological and geophysical costs and
other direct costs of exploration, evaluation and development are capitalised
as intangible or property, plant and equipment according to their nature.
Intangible assets comprise costs relating to the exploration and evaluation of
properties which the Directors consider to be unevaluated until reserves are
appraised as commercial, at which time they are transferred to tangible assets
as 'Developed oil and gas assets' following an impairment review and
depreciated accordingly. Where properties are appraised to have no commercial
value, the associated costs are treated as an impairment loss in the period in
which the determination is made.
Costs are amortised on a field by field unit of production method based on
commercial proven and probable reserves, or to the expiry of the licence,
whichever is earlier.
The calculation of the 'unit of production' amortisation takes account of the
estimated future development costs and is based on the current period and
un-escalated price levels. Changes in reserves and cost estimates are
recognised prospectively.
E&E costs are not amortised prior to the conclusion of appraisal
activities.
Accounting for farm-outs
During the period, the Group completed a farm-out transaction of its main
exploration asset which resulted in the receipt of funds in respect of back
costs, and also contributions to future costs by the farminee. The back costs
received in respect of amounts previously capitalised as an exploration asset
were credited to the carrying value of the asset on a no gain, no loss basis.
Those back costs attributable to administration costs previously expensed are
shown as a gain in the Income Statement. Post farm-out cost recoveries from
the farminee is be offset against the relevant costs charged to the
exploration asset and administration costs as appropriate.
Investments in subsidiaries
Investments are stated at cost less provision for any impairment in value.
Financial instruments
Non-derivative financial instruments comprise investments in equity and debt
securities, trade and other receivables, cash and cash equivalents, loans and
borrowings, and trade and other payables.
Non-derivative financial instruments are recognised initially at fair value
plus, for instruments not at fair value through profit or loss, any directly
attributable transactions costs, except as described below. Subsequent to
initial recognition non-derivative financial instruments are measured as
described below.
A financial instrument is recognised when the Group becomes a party to the
contractual provisions of the instrument. Financial assets are derecognised if
the Group's contractual rights to the cash flows from the financial assets
expire or if the Group transfers the financial assets to another party without
retaining control or substantially all risks and rewards of the asset. Regular
purchases and sales of financial assets are accounted for at trade date, i.e.
the date that the Group commits itself to purchase or sell the asset.
Financial liabilities are derecognised if the Group's obligations specified in
the contract expire or are discharged or cancelled.
Trade and other receivables
Trade receivables are recognised initially at fair
value and subsequently measured at amortised cost using the effective interest
method, less provision for impairment. A provision for impairment is
established when there is objective evidence that the Group will not be able
to collect all amounts due according to the original terms of the receivables.
Significant financial difficulties of the debtor, probability that the debtor
will enter bankruptcy or financial reorganisation, and default or delinquency
in payments are considered indicators that the trade receivable is impaired.
Performance bond and bank guarantee deposits
From time to time, the Group provides performance guarantees in respect of
contractual work commitments which are secured by bank guarantees backed by
cash deposits. Unless the deposit funds are available for cash use within
three months of the period end, they are not considered as a cash equivalent
but are shown as a separate current asset.
Cash and cash equivalents
Cash and cash equivalents in the Statement of Cash Flows (see page 36) include
cash in hand, deposits held on call with banks, other short-term highly liquid
investments with original maturities of three months or less.
Taxation
Income tax
Income tax expense represents the sum of the tax currently payable and
deferred tax.
The tax currently payable is based on taxable profit or loss for the year.
Taxable profit or loss differs from profit or loss as reported in the same
income statement because it excludes items of income or expense that are
taxable or deductible in other periods and it further excludes items that are
never taxable or deductible. The Company's liability for current tax is
calculated using tax rates that have been enacted or substantively enacted by
the statement of financial position date.
Deferred tax
Deferred tax is recognised on differences between the carrying amounts of
assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the
statement of financial position liability method. Deferred tax liabilities
are generally recognised for all taxable temporary differences and deferred
tax assets are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can
be utilised. Such assets and liabilities are not recognised if the temporary
difference arises from goodwill or from the initial recognition (other than in
a business combination) of other assets and liabilities in a transaction that
affects neither the taxable profit nor the accounting profit.
The carrying amount of deferred tax is reviewed at each statement of financial
position date and reduced to the extent that it is no longer probable that
sufficient taxable profits will be available to allow all or part of the asset
to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset realised. Deferred tax is
charged or credited to income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally
enforceable right to set off current tax assets against current tax
liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and
liabilities on a net basis.
Trade and other payables
Trade payables are not interest bearing and are stated at their nominal value.
Trade and other payables are initially recognised at fair value. They are
subsequently measured at amortised cost using the effective interest method
unless the effect of discounting would be immaterial, in which case they are
stated at cost.
Fair values
The carrying amounts of the financial assets and liabilities such as cash and
cash equivalents, receivables and payables of the Group at the statement of
financial position date approximated their fair values, due to the relatively
short term nature of these financial instruments.
Share-based compensation
The fair value of the employee and suppliers services received in exchange for
the grant of the options is recognised as an expense. The total amount to be
expensed over the vesting period is determined by reference to the fair value
of the options granted, excluding the impact of any non-market vesting
conditions (for example, profitability and sales growth targets). Non-market
vesting conditions are included in assumptions about the number of options
that are expected to vest. At each statement of financial position date, the
entity revises its estimates of the number of options that are expected to
vest. It recognises the impact of the revision to original estimates, if any,
in the income statement, with a corresponding adjustment to equity.
The proceeds received net of any directly attributable transaction costs are
credited to share capital (nominal value) and share premium when the options
are exercised.
The fair value of share-based payments recognised in the income statement is
measured by use of the Black Scholes model, which takes into account
conditions attached to the vesting and exercise of the equity instruments. The
expected life used in the model is adjusted based on management's best
estimate, for the effects of non-transferability, exercise restrictions and
behavioural considerations. The share price volatility percentage factor used
in the calculation is based on management's best estimate of future share
price behaviour and is selected based on past experience, future expectations
and benchmarked against peer companies in the industry.
Equity instruments
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options
are shown in equity as a deduction, net of tax, from proceeds.
Lease accounting
At the commencement date, the Group measures the lease liability at the
present value of the lease payments unpaid at that date, discounted using the
interest rate implicit in the lease if that rate is readily available or the
Group's incremental borrowing rate.
Lease payments included in the measurement of the lease liability are made up
of fixed payments (including in substance fixed), variable payments based on
an index or rate, amounts expected to be payable under a residual value
guarantee and payments arising from options reasonably certain to be
exercised.
Subsequent to initial measurement, the liability will be reduced for payments
made and increased for interest. It is remeasured to reflect any reassessment
or modification, or if there are changes in in-substance fixed payments.
When the lease liability is remeasured, the corresponding adjustment is
reflected in the right-of-use asset, or profit and loss if the right-of-use
asset is already reduced to zero.
Interest payable and similar charges include interest payable, finance
charges on shares classified as liabilities and finance leases recognised in
profit or loss using the effective interest method, unwinding of the discount
on provisions, and net foreign exchange losses that are recognised in the
profit and loss account.
On the statement of financial position, lease liabilities have been included
in current and non-current liabilities.
Foreign currencies
i) Functional and presentation currency
Items included in the financial statements of the Group are measured using the
currency of the primary economic environment in which the entity operates (the
functional currency), which is Pounds Sterling (£). The financial statements
are presented in Pounds Sterling (£), which is the Group's presentation
currency.
ii) Transactions and balances
Foreign currency transactions are translated into the presentational currency
using exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions
and from the translation at period-end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the income
statement.
iii) Group companies
The results and financial position of all Group entities (none of which has
the currency of a hyper-inflationary economy) that have a functional currency
different from the presentation currency are translated into the presentation
currency as follows:
(a) 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;
(b) income and expenses for each income
statement 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
rate on the dates of the transactions); and
(c) all resulting exchange differences are
recognised as a separate component of equity.
On consolidation, exchange differences arising from the translation of the net
investment in foreign operations, and of borrowings and other currency
instruments designated as hedges of such investments, are taken to
shareholders' equity. When a foreign operation is partially disposed of or
sold, exchange differences that were recorded in equity are recognised in the
income statement as part of the gain or loss on sale.
Management of capital
The Group's policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. To achieve this aim, it
seeks to raise new equity finance and debt sufficient to meet the next phase
of exploration and where relevant development expenditure.
The Board receives cash flow projections on a regular basis as well as
information on cash balances. The Board will not commit to material
expenditure in respect of its ongoing appraisal work prior to being satisfied
that sufficient funding is available to the Group to finance the planned
programmes.
Dividends cannot be issued until there are sufficient reserves available.
Critical accounting judgements and key sources of estimation uncertainty
The preparation of the consolidated financial statements requires management
to make estimates and assumptions concerning the future that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the dates of the financial statements and the
reported amounts of revenues and expenses during the reporting periods. The
resulting accounting estimates will, by definition, differ from the related
actual results.
Carrying value of intangible exploration and evaluation assets
Valuation of oil and gas properties: judgements regarding timing of regulatory
approval, the general economic environment, and the ability to finance future
activities has an impact on the impairment analysis of intangible exploration
and evaluation assets. All these factors may impact the viability of future
commercial production from unproved properties, and therefore may be a need to
recognise an impairment. The timing of an impairment review and the judgement
of when there could be a significant change affecting the carrying value of
the intangible exploration and evaluation asset is a critical accounting
judgement in itself.
The Board also assesses potential impairment of the Company's net investment
in subsidiaries by reference to the same judgements around the circumstances
of the Group's oil and gas exploration projects. At year end the Group's
exploration assets which the board reviewed for impairment were carried at
£5.1m and the Company's net investment in subsidiaries was held at £5.0m.
Further details are given in Notes 10 and 11 respectively.
Commercial reserves estimates
Oil and gas reserve estimates: estimation of recoverable reserves include
assumptions regarding commodity prices, exchange rates, discount rates,
production and transportation costs all of which impact future cashflows. It
also requires the interpretation of complex geological and geophysical models
in order to make an assessment of the size, shape, depth and quality of
reservoirs and their anticipated recoveries. The economic, geological and
technical factors used to estimate reserves may change from period to period.
Changes in estimated reserves can impact developed and undeveloped property
carrying values, asset retirement costs and the recognition of income tax
assets, due to changes in expected future cash flows.
2. Segmental information
In the opinion of the Directors the Group has one class of business, being the
exploration for, and development and production of, oil and gas reserves, and
other related activities.
The Group's primary reporting format is determined to be the geographical
segment according to the location of the oil and gas asset. There are
currently three geographic reporting segments: South East Asia where
production, development and exploration activity is being assessed, South
America, which has previously been involved in production, development and
exploration activity but is now being phased out, and the United Kingdom being
the head office location.
Exploration and production year ended 31 December 2024
United South South East
Kingdom America Asia Total
£'000 £'000 £'000 £'000
Revenue - - - -
Cost of sales - - - -
Gross profit - - - -
Exploration and evaluation expenditure (45) - (125) (170)
Property, plant and equipment and depreciation (10) - (27) (37)
Peru closure costs - (6) - (6)
Recovery of historic costs on farm-out - - 221 221
Administration expenses (1,476) (3) (743) (2,222)
Gain on exchange 17 - (2) 15
Loss before interest and taxation (1,514) (9) (676) (2,199)
Finance cost (1) - (1) (2)
Finance income 149 3 - 152
Loss before taxation (1,366) (6) (677) (2,049)
Income tax expense - - - -
Loss after taxation (1,366) (6) (677) (2,049)
Assets and liabilities
Segment assets 77 - 6,692 6,769
Cash and cash equivalents 2,379 - 792 3,171
Total assets 2,456 - 7,484 9,940
Segment liabilities 84 1 520 605
Current tax liabilities 16 - - 16
Total liabilities 100 1 520 621
Other segment items
Capital expenditure 22 - 1,742 1,764
Depreciation, amortisation and impairment charges 10 - 27 37
2. Segmental information (continued)
Exploration and production year ended 31 December 2023
United South South East
Kingdom America Asia Total
£'000 £'000 £'000 £'000
Revenue - - - -
Cost of sales - - - -
Gross profit - - - -
Exploration and evaluation expenditure (75) - (46) (121)
Intangible asset impairment (187) - - (187)
Property, plant and equipment and depreciation (12) - (25) (37)
Peru closure costs - (26) - (26)
Administration expenses (878) (9) (568) (1,455)
Loss on exchange (32) - - (32)
Loss before interest and taxation (1,184) (35) (639) (1,858)
Finance costs (1) - (5) (6)
Finance income 149 3 - 152
Loss before taxation (1,036) (32) (644) (1,712)
Income tax expense - - - -
Loss after taxation (1,036) (32) (644) (1,712)
Assets and liabilities
Segment assets 65 - 4,634 4,699
Cash and cash equivalents 3,652 1 107 3,760
Total assets 3,717 1 4,741 8,459
Segment liabilities 102 - 87 189
Current tax liabilities 15 - - 15
Total liabilities 117 - 87 204
Other segment items
Capital expenditure 28 - 355 383
Depreciation, amortisation and impairment charges 199 - 25 224
3. Operating loss 2024 2023
£'000 £'000
The operating loss is stated after charging:
Auditor's remuneration
Audit of group and company financial statements - current year 38 30
Audit of group and company financial statements - prior year 6 -
Non-audit services: Tax compliance 5 2
Non-audit services: Other assurance services 5 2
Exploration and appraisal expenditure 170 121
Impairment of intangible assets - 187
Depreciation of property, plant and equipment 37 37
(Gain)/loss on exchange (15) 32
The analysis of development and administrative expenses in the consolidated
income statement by nature of expense is:
2024 2023
£'000 £'000
Employee benefit expense 1,001 764
Share based payments 40 -
Exploration and appraisal expenditure 170 121
Depreciation, amortisation and impairment charges 37 224
Legal and professional fees 911 509
Recovery of historic costs on farm-out (221) -
Peru closure costs 6 26
Loss/(gain) on exchange (15) 32
Other expenses 270 182
2,199 1,858
4. Staff numbers and cost
The average number of persons employed by the Group (including directors)
during the year, analysed by category, were as follows:
2024 2023
Group Company Group Company
Number Number Number Number
Directors 5 5 4 4
Technical and production 4 - 4 -
Administration 3 1 2 1
Total 12 6 10 5
The aggregate payroll costs of these persons were as follows: £'000 £'000 £'000 £'000
Wages and salaries 327 61 221 54
Directors' fees, salaries and benefits 297 297 483 483
Share based payments 40 40 - -
Severance payments 299 299 - -
Social security costs 84 70 72 62
Total 1,047 767 776 599
5. Directors' remuneration 2024 2023
£'000 £'000
Directors' remuneration 297 483
Compensation for loss of office 299 -
Share based payments 30 -
Total 626 483
Management fees paid to an entity in which a director is a shareholder are
disclosed in note 24 on page 67.
No directors benefitted from pension contributions in 2024 or 2023.
Highest paid director emoluments and other benefits are as listed below.
2024 2023
£'000 £'000
Remuneration and benefits 59 280
Compensation for loss of office 278 -
Total 337 280
Total remuneration in respect of key management personnel was as follows.
2024 2023
£'000 £'000
Short-term benefits 401 537
Termination benefits 317 -
Share-based payments 40 -
Total 758 -
6. Finance income and expenses 2024 2023
£'000 £'000
Bank and other interest received 152 152
Interest on right of use asset finance (2) (6)
Total 150 146
7. Income tax expense 2024 2023
£'000 £'000
The tax charge on the loss on ordinary activities was:-
UK Corporation Tax - current - -
Foreign taxation - -
- -
The total charge for the year can be reconciled to the accounting result as
follows:
2024 2023
£'000 £'000
(Loss) before tax
Continuing operations (2,049) (1,712)
Tax at composite group rate of 26.9% (2023: 27.9%) (552) (478)
Effects of:
Expenses not subject to tax 44 127
Movement on capital allowances 70 (91)
Increase in tax losses 438 442
Tax expense - -
At 31 December 2024, the Group had estimated tax losses of £42,844,000 (2023
- £38,315,000) to carry forward against future profits. The potential
deferred tax asset on these tax losses at a composite group rate of 29.5% of
£12,626,000 (2023: at 29.6%, £11,329,000) has not been recognised due to
uncertainty over the timing and existence of future taxable profits. The
current tax reconciliation has been prepared using a blended rate of 26.9%
(2023: 27.9%) based on prevailing headline taxation rates as applied to the
group's taxable entities in the year. The rate assessed for the unrecognised
deferred tax asset reflects management's best estimate of the applicable rates
which would apply to oil and gas revenues in the group's respective countries
of operation.
8. Earnings per share
2024 2023
Loss per ordinary share
- Basic (0.008p) (0.009p)
- Diluted (0.008p) (0.009p)
Earnings per ordinary share is based on the Group's loss attributable to
owners of the parent for the year of £2,049,000 (2023: £1,712,000).
The weighted average number of shares used in the calculation is the weighted
average ordinary shares in issue during the year of 24,440,616,024 (2023:
18,973,685,086).
Due to the Group's results, the diluted earnings per share was deemed to be
the same as the basic earnings per share for that year.
9. Property, plant and equipment
Equipment and Right of use
machinery assets Total
£'000 £'000 £'000
Group
Cost
At 1 January 2023 18 107 125
Foreign exchange translation adjustment (1) (3) (4)
Additions 2 - 2
At 1 January 2024 19 104 123
Foreign exchange translation adjustment - 1 1
Additions 9 17 26
Disposals (3) - (3)
At 31 December 2024 25 122 147
Depreciation
At 1 January 2023 5 42 47
Foreign exchange translation adjustment - (2) (2)
Charge for the period 6 31 37
At 1 January 2024 11 71 82
Foreign exchange translation adjustment - 1 1
Charge for the period 7 30 37
Disposals (1) - (1)
At 31 December 2024 17 102 119
Net book value
At 31 December 2024 8 20 28
At 31 December 2023 8 33 41
Included in the above line items are Right of Use assets of £20,000 (2023:
£33,000) in respect of a motor vehicle and an office lease.
Company
Cost
At 1 January and 31 December 2023 1 45 46
Additions 5 17 22
Disposals (3) - (3)
At 1 January 2023 3 62 65
Depreciation
At 1 January 2023 - 25 25
Charge for the period - 12 12
At 1 January 2024 - 37 37
Charge for the period 1 9 10
Disposals (1) - (1)
At 31 December 2024 - 46 46
Net book value
At 31 December 2024 3 16 19
At 31 December 2023 1 8 9
Included in the above line items are Right of Use assets of £16,000 (2023:
£8,000) in respect of a motor vehicle.
10. Intangible fixed assets Exploration
and evaluation
assets Total
£'000 £'000
Group
Cost
At 1 January 2023 3,696 3,696
Foreign exchange translation adjustment (109) (109)
Additions 381 381
At 1 January 2024 3,968 3,968
Foreign exchange translation adjustment 38 38
Additions 1,738 1,738
Disposals (685) (685)
At 31 December 2024 5,059 5,059
Impairment
At 1 January 2023 - -
Charge for the period 187 187
At 1 January 2024 187 187
Charge for the period - 187
Disposals (187) (187)
At 31 December 2024 - 374
Net book value
At 31 December 2024 5,059 4,685
At 31 December 2023 3,781 3,781
Exploration
and evaluation
assets Total
£'000 £'000
Company
Cost
At 1 January 2023 159 159
Additions 28 28
At 1 January 2024 187 187
Disposals (187) (187)
At 31 December 2024 - -
Impairment
At 1 January 2023 - -
Charge for the year 187 187
At 1 January 2024 187 187
Disposals (187) (187)
At 31 December 2024 - -
Net book value
At 31 December 2024 - -
At 31 December 2023 - -
Exploration and evaluation assets represent amounts capitalised in progressing
the Group's interest in licences for the exploration of oil and gas in the UK
and Timor-Leste. On 8 February 2024, the Company's wholly-owned subsidiary,
SundaGas Banda Unipessoal, Lda., farmed out 20% of its interest in the
Chuditch PSC receiving total back costs of £719,000. This represents a
recovery of previously capitalised back costs of £498,000 and administration
back costs of £221,000 which is credited to the Income Statement.
In addition, the Company and its joint venture partners relinquished the Inner
Moray Firth P2478 licence in the UK on 31 March 2024. The associated
exploration asset had already been impaired to nil as of 31 December 2023.
The Directors have performed an assessment of impairment as at the balance
sheet date in respect of exploration and evaluation assets, taking account of
the facts and circumstances which existed at that date. Impairment reviews
were performed at the Operating Segment level; following the relinquishment of
the Company's interest in Inner Moray Firth P2478, the test was only performed
on the Company's remaining exploration asset, the Chuditch PSC.
The Directors' impairment judgement of the Chuditch exploration asset took
account of a range of factors including the good standing of the PSC, the
Board's expectation of the Group's ability to fulfil the obligations of Year 3
of the PSC, the expectations of access to funding to drill an appraisal well
and the Board's analysis of the potential gas reserves. The assessment of
potential reserves involved review of CPR work performed by external
consultants as well as the Group's internal analysis. The Board also
considered the wider economics of a potential export of gas and the potential
value of cash flows attributable to the Group's interest in the asset. The
Board concluded that no impairment indicators existed as the reporting date
(2023: nil).
11. Investments
Loans to Equity investment
group in group
undertakings undertakings Total
£'000 £'000 £'000
Company
Cost
At 1 January 2023 3,840 7,548 11,388
Exchange rate adjustment (225) - (225)
Net loan movements 1,050 - 1,050
Disposals - - -
At 1 January 2024 4,665 7,548 12,213
Exchange rate adjustment 116 - 116
Additions - 7 7
Net loan movements 2,905 - 2,905
At 31 December 2024 7,686 7,555 15,241
Impairment
At 1 January 2023 942 5,444 6,386
Charge/(release) for the year (38) - (38)
At 1 January 2024 904 5,444 6,348
Charge/(release) for the year 15 - 15
At 31 December 2024 919 5,444 6,363
Carrying value
At 31 December 2024 6,767 2,111 8,878
At 31 December 2023 3,761 2,104 5,865
The company makes loans to its subsidiary operations as part of its longer
term strategy of undertaking exploration activities. Whilst the loans are
made on informal terms, the Board consider that such loans form part of the
company's net investment in its subsidiaries and therefore are presented
within investments and treated as non-current. No interest is charged on
intercompany loans.
The company has made a 100% provision on the investment in Gold Oil Peru
S.A.C. of £6,363,000 (2023: £6,348,000).
11. Investments continued
The Company's subsidiary undertakings at the year end were as follows:
Subsidiary/controlled entity Place of incorporation and operation Proportion of ownership interest Proportion of voting power held Nature of business
% %
Sunda Energy Ventures Pte. Ltd. * Singapore 100 100 Exploration of oil and gas
8 Chang Charn Road
#02-01
Link (THM) Building
Singapore 159637
SundaGas (Timor-Leste Sahul) Pte. Ltd. Singapore 100 100 Exploration of oil and gas
8 Chang Charn Road
#02-01
Link (THM) Building
Singapore 159637
SundaGas Banda Unipessoal, Lda ** Timor-Leste 100 100 Exploration of oil and gas
Timor Plaza Pisso 3. #337
Av. President Nicolau Lobato
20 de Setembro, Bebonuk, Dom Aleixo
Dili, Timor-Leste
Gold Oil Peru S.A.C Peru 100 100 Exploration of oil and gas
Jr. General Julian Arias Araguez 250
Miraflores, Lima-18,
Peru
All shareholdings are in ordinary, voting shares.
* Incorporated on 20 September 2024
** A direct subsidiary of SundaGas (Timor-Leste Sahul) Pte. Ltd.
12. Trade and other receivables
2024 2023
Group Company Group Company
£'000 £'000 £'000 £'000
Other receivables 20 20 27 23
Prepayments 66 38 64 33
86 58 91 56
13. Performance bond guarantee deposit
2024 2023
Group Company Group Company
£'000 £'000 £'000 £'000
Bank guarantee bond at 31 December 2023 1,596 - 786 -.
The Company's wholly-owned subsidiary, SundaGas Banda Unipessoal, Lda
("SundaGas"), had provided a performance guarantee to Autoridade Nacional do
Petróleo ("ANP") in respect of the offshore Timor-Leste TL-SO-19-16
Production Sharing Contract ("PSC"). This performance guarantee is secured by
a bank guarantee given by Banco Nacional de Comércio de Timor-Leste
("BNCTL"), which required SundaGas to a place a bond with BNCTL of
US$2,000,000. It is anticipated that the bank guarantee will be released on or
before completion of the drill program.
The Group is cognisant of BNCTL not having a credit rating by the main credit
rating agencies. However, it is recognised that BNCTL is owned and controlled
by the Government of the Democratic Republic of Timor-Leste. As a result, and
given the Group's close ties with the Government, it is considered that the
exposure to credit risk is immaterial.
14. Cash and cash equivalents
2024 2023
Group Company Group Company
£'000 £'000 £'000 £'000
Bank current accounts 939 148 131 24
Bank deposit accounts 2,232 2,231 3,629 3,628
3,171 2,379 3,760 3,652
Bank deposit accounts comprise cash held by the Group and short-term bank
deposits with an original maturity of three months or less and earn interest
at respective short-term deposit rates. The carrying amount of these assets
approximates to their fair value.
15. Trade and other payables 2024 2023
Group Company Group Company
£'000 £'000 £'000 £'000
Trade payables 274 17 18 18
Other payables 32 - - -
Amounts owed to subsidiary undertakings - 8 - -
Accruals 278 49 136 73
Lease finance liability due within 12 months 13 9 31 9
Taxation 16 16 15 15
613 99 200 115
Non-current liabilities
Lease finance liabilities due after 12 months 8 8 4 -
16. Lease finance
Lease liabilities are presented in the statement of financial position as
follows:
2024 2023
Group Company Group Company
£'000 £'000 £'000 £'000
Current 13 9 31 9
Non-current 8 8 4 -
21 17 35 9
17. Share capital 2024 2023
£'000 £'000
Allotted, called up and fully paid
Equity:25,510,783,788 (2023: 18,982,760,428) ordinary shares of £0.00025 each 6,378 4,746
6,378 4,746
The Company issued 6,528,025,360 new ordinary shares of £0.00025 each at
£0.0005 per share on 29 February 2024 for cash.
Ordinary shares entitle the holder to full rights as to voting, dividends and
any distribution upon winding up.
18. Share premium and reserves Foreign
Share Share exchange Profit
premium option translation and loss
account reserve reserve account
£'000 £'000 £'000 £'000
Group
At beginning of the year 38,881 319 715 (36,406)
Loss for the year attributable to controlling interests - - - (2,049)
Issue of new shares 1,632 - - -
Share issue costs (271) - - -
Share-based payments - 40 - -
Share option reserve released - (21) - 21
Foreign exchange translation adjustments - - 80 -
40,242 338 795 (38,434)
Company
At beginning of the year 38,881 319 - (34,479)
Loss for the year - - - (1,273)
Issue of new shares 1,632 - - -
Share issue costs (271) - - -
Share-based payments - 40 - -
Share option reserve released - (21) - 21
40,242 338 - (35,731)
18. Share premium and reserves continued
Details of options and warrants issued, exercised and lapsed during the year
together with options and warrants outstanding at 31 December 2024 are as
follows:
1 January New Lapsed or 31 December
Exercise 2024 Issue Exercised cancelled 2024
Issue date Final exercise date price Number Number Number Number Number
26 May 2020 26 May 2030 £0.00100 62,500,000 - - - 62,500,000
22 July 2021 22 July 2031 £0.00070 440,000,000 - - (50,000,000) 390,000,000
22 July 2021 31 December 2025 £0.00070 150,000,000 - - - 150,000,000
17 December 2021 17 December 2031 £0.00060 530,000,000 - - (60,000,000) 470,000,000
14 July 2022 14 July 2025 £0.00070 175,000,000 - - - 175,000,000
20 November 2024 20 November 2034 £0.000725 - 975,000,000 - - 975,000,000
9 December 2024 21 July 2031 £0.00060 - 50,000,000 - - 50,000,000
9 December 2024 19 December 2031 £0.00070 - 60,000,000 - - 60,000,000
1,357,500,000 1,085,000,000 - (110,000,000) 2,332,500,000
Details of options and warrants issued, exercised and lapsed during the year
together with options and warrants outstanding at 31 December 2023 are as
follows:
1 January New 31 December
Exercise 2023 Issue Exercised Lapsed 2023
Issue date Final exercise date price Number Number Number Number Number
26 May 2020 26 May 2030 £0.00100 125,000,000 - (62,500,000) - 62,500,000
22 July 2021 22 July 2031 £0.00070 440,000,000 - - - 440,000,000
22 July 2021 31 December 2025 £0.00070 150,000,000 - - - 150,000,000
17 December 2021 17 December 2031 £0.00060 530,000,000 - - - 530,000,000
14 July 2022 14 July 2025 £0.00070 175,000,000 - - - 175,000,000
1,420,000,000 - (62,500,000) - 1,357,500,000
The number of share options which were exercisable at year end was
1,182,500,000 (2023: 1,182,500,000). The weighted average remaining life of
share options at the year end was 7 years (2023: 7 years). The weighted
average exercise price (in pence) applying to share options during the year
was as follows:
2024 2023
Opening 0.07p 0.07p
Exercised - 0.10p
Lapsed - -
Cancelled 0.065p -
Issued 0.0725p -
Closing 0.07p 0.07p
19. Share based payments
The fair values of the options and warrants granted have been calculated using
Black--Scholes model assuming the inputs shown below:
Grant date 20 November 2024 17 December 2021 22 July 2021 22 July 2021 26 May 2020
Number of options or warrants granted 975,000,000 530,000,000 150,000,000 440,000,000 290,000,000
Share price at grant date 0.0725p 0.06p 0.07p 0.07p 0.05p
Exercise price at grant date 0.0725p 0.06p 0.07p 0.07p 0.1p
Option life 10 years 10 years 3 years 10 years 10 years
Risk free rate 4.47% 0.86% 0.86% 0.86% 0.86%
Expected volatility 66% 80% 80% 80% 80%
Expected dividend yield 0% 0% 0% 0% 0%
Fair value of option 0.058p 0.025p 0.02p 0.03p 0.02p
The warrants and options will not normally be exercisable during a closed
period and furthermore can only be exercisable if the performance conditions
are satisfied. Warrants and options, which have vested immediately before
either the death of a participant or his ceasing to be an eligible employee by
reason of injury, disability, redundancy or dismissal (otherwise than for good
cause) shall remain, exercisable (to the extent vested) for 12 months after
such cessation, and all non-vested options shall lapse.
On 14 July 2022, the company awarded 175,000,000 share options to a Dr A
Butler. The share options are exercisable at 0.07p, expire three years from
grant date and will only vest upon the Company making an announcement that the
first appraisal well on the Chuditch PSC has spudded, or in certain limited
circumstances such as a takeover event. Given that vesting is contingent on
the spudding of a well at the Chuditch project and that the occurrence of this
event is dependent, inter alia, on events outside the control of the director,
the Board considered that the current degree of certainty over vesting was
such that no share-based payment charges were recorded in respect of these
options during 2022, 2023 or 2024. A detailed summary of the current status
and future plans for the Chuditch project are given in the Chairman's
Statement & Operations Report.
Of the 1,085,000,000 options issued in the year, 110,000,000 related to the
release and re-issue of existing options held by an employee on substantially
the same terms for an administrative purpose. The re-issue was treated as a
modification with no incremental fair value recognised.
Options granted on 20 November 2024 vest over a period of 1 to 3 years. The
share-based payment charge arising is amortised over the vesting period.
Volatility was determined by reference to the company's historical share price
volatility over a suitable period.
20. Financial instruments
The Group's and Company's activities expose them to a variety of financial
risks: credit risk, cash flow interest rate risk, foreign currency risk,
liquidity risk, price risk and capital risk. The Group's and Company's
activities also expose them to non-financial risks: market risk. The Group's
and Company's overall risk management programme focuses on unpredictability
and seeks to minimise the potential adverse effects on the Group's financial
performance. The Board, on a regular basis, reviews key risks and, where
appropriate, actions are taken to mitigate the key risks identified.
Financial instruments - Risk Management
The Group and Company are exposed through their operations to the following
risks:
Ø Credit risk
Ø Cash flow interest rate risk
Ø Foreign Exchange Risk
Ø Liquidity risk
Ø Price risk
Ø Capital risk
Ø Market risk
In common with all other businesses, the Group and the Company are exposed to
risks that arise from its use of financial instruments. This note describes
the Group's and the Company's objectives, policies and processes for managing
those risks and the methods used to measure them. Further quantitative
information in respect of these risks is presented throughout these financial
statements.
There have been no substantive changes in the Group's or the Company's
exposure to financial instrument risks, its objectives, policies and processes
for managing those risks or the methods used to measure them from previous
periods unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group and the Company, from
which financial instrument risk arises are as follows:
Ø Loans and receivables
Ø Trade and other receivables
Ø Cash and cash equivalents
Ø Trade and other payables
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group's and
the Company's risk management objectives and policies and, whilst retaining
responsibility for them, it has delegated the authority for designing and
operating processes that ensure the effective implementation of the objectives
and policies to the Group's finance function. The Board receives regular
updates from the Executive Directors through which it reviews the
effectiveness of the processes put in place and the appropriateness of the
objectives and policies it sets. The overall objective of the Board is to
set policies that seek to reduce risk as far as possible without unduly
affecting the Group's and the Company's competitiveness and flexibility.
Further details regarding these policies are set out below:
Credit risk
The Group's and the Company's principal financial assets are bank balances and
cash, the bank guarantee bond, and other receivables. The credit risk on
liquid funds is limited because the counterparties are banks with high credit
ratings assigned by international credit-rating agencies or are
sovereign-owned and backed banks (see also note 13). The amounts presented in
the statements of financial position are net of allowance for doubtful
receivables. An allowance for impairment is made where there is an
identified loss event which, based on previous experiences, is evidence of a
reduction in the recoverability of the cash flows.
As at 31 December 2024 and 2023 there were no trade receivables and no
expected credit losses were raised against any financial assets held at
amortised cost.
Cash flow interest rate risk
The Group and the Company are exposed to cash flow interest rate risk from its
deposits of cash and cash equivalents with banks.
The cash balances maintained by the Group and the Company are proactively
managed in order to ensure that the maximum level of interest is received for
the available funds but without affecting the working capital flexibility the
Group requires.
The Group and the Company are not at present exposed to cash flow interest
rate risk on borrowings as neither has significant debt. No subsidiary
company of the Group is permitted to enter into any borrowing facility or
lease agreement without the prior consent of the Company.
Interest rates on financial assets
The Group's and the Company's financial assets consist of cash and cash
equivalents, loans, trade and other receivables. The interest rate profile
at period end of these assets was as follows:
31 December 2024 Financial assets on which interest earned Financial assets on which interest not earned Total
Group
£'000 £'000 £'000
UK sterling 1,907 67 1,974
US dollar (USD) 325 2,405 2,730
Singapore Dollar (SGD) - 93 93
2,232 2,565 4,797
31 December 2023 Financial assets on which interest earned Financial assets on which interest not earned Total
Group
£'000 £'000 £'000
UK sterling 2,509 33 2,542
US dollar (USD) 1,120 906 2,026
Singapore Dollar (SGD) - 3 3
3,629 942 4,571
The Group and the Company earned interest on its interest-bearing financial
assets at rates between 2.5% and 5.5% (2023 2% and 5.5%) during the
period.
A change in interest rates on the statement of financial position date would
increase/(decrease) the equity and the anticipated annual income or loss by
the theoretical amounts presented below. The analysis is made on the
assumption that the rest of the variables remain constant. The analysis with
respect to 31 December 2024 was prepared under the same assumptions.
Group and Company Change of 1.0% in the interest rate as of
31 December 2024 31 December 2023
Increase of 1.0% Decrease of 1.0% Increase of 1.0% Decrease of 1.0%
Instruments bearing variable interest (£'000) 38 (38) 36 (36)
It is considered that there have been no significant changes in cash flow
interest rate risk at the reporting date compared to the previous period end
and that therefore this risk has had no material impact on earnings or
shareholders' equity.
Foreign exchange risk
Foreign exchange risk arises because the Group and the Company have operations
located in various parts of the world whose functional currency is not the
same as the functional currency in which other Group companies are
operating. Although its geographical spread reduces the Group's and the
Company's operation risk, the net assets arising from such overseas operations
are exposed to currency risk resulting in gains and losses on retranslation
into Sterling. Only in exceptional circumstances will the Group or the
Company consider hedging its net investments in overseas operations, as
generally it does not consider that the reduction in foreign currency exposure
warrants the cash flow risk created from such hedging techniques. It is the
Group's policy to ensure that individual Group entities enter into local
transactions in their functional currency wherever possible and that only
surplus funds over and above working capital requirements should be
transferred to the parent company treasury. The Group considers this policy
minimises any unnecessary foreign exchange exposure.
In order to monitor the continuing effectiveness of this policy the Board,
through its approval of both corporate and capital expenditure budgets and
review of the currency profile of cash balances and management accounts,
considers the effectiveness of the policy on an ongoing basis.
The following table discloses the major exchange rates of those currencies
utilised by the Group:
Group and Company USD SGD
Average for year ended 31 December 2024 1.278 1.707
At 31 December 2024 1.253 1.708
Average for year ended 31 December 2023 1.244 1.669
At 31 December 2023 1.273 1.679
A change in exchange rates on the statement of financial position date would
increase/(decrease) the equity and net asset position by the theoretical
amounts presented below. The analysis is made on the assumption that the rest
of the variables remain constant. The analysis with respect to 31 December
2023 was prepared under the same assumptions.
Change of 10.0% in the GBP/USD rate as of
31 December 2024 31 December 2023
Increase of 10.0% Decrease of 10.0% Increase of 10.0% Decrease of 10.0%
Net assets (£'000) - Group (511) 624 (402) 492
Net assets (£'000) - Company (625) 764 (445) 544
It is considered that there have been no significant changes in exchange rate
risk at the reporting date compared to the previous period end and that
therefore this risk has had no material impact on earnings or shareholders'
equity.
Liquidity risk
Liquidity risk arises from the Group's management of working capital and the
finance charges and principal repayments on its debt instruments. It is the
risk that the Group will encounter difficulty in meeting its financial
obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to
allow it to meet its liabilities when they become due. To achieve this aim,
it seeks to maintain readily available cash balances (or agreed facilities) to
meet expected requirements for a period of at least 60 days. The Group
currently has no long term borrowings.
All of the Group's and the Company's financial liabilities are due within one
year other than undiscounted lease liabilities due after one year of £8,000
(2023: £4,000).
Price risk
Potential oil and gas sales revenue is subject to energy market price risk.
Given that the Group and the Company currently do not have production, it is
not considered appropriate for the Group or the Company to enter into any
hedging activities or trade in any financial instruments, such as
derivatives. This strategy will continue to be subject to regular review.
It is considered that price risk of the Group and the Company at the reporting
date has not increased compared to the previous period end.
Volatility of oil and gas prices
A material part of the Group's future revenue will be derived from the sale of
oil and gas that it expects to produce. A future substantial or extended
decline in prices for oil and gas and refined products could adversely affect
the Group's future revenues, cash flows, profitability and ability to finance
its planned capital expenditure. The movement of crude oil and natural gas
prices is shown below:
31 December 2024 Average price 31 December 2023
2024
Crude oil - WTI
Per barrel - US$ $71 $74 $72
Per barrel - £ £57 £58 £57
══════ ══════ ══════
Natural gas LNG Japan/Korea Marker (Platts)
Per Million Btu - US$ $14 $12 $9
Per Million Btu - £ £9 £9 £7
══════ ══════ ══════
Oil and gas prices are dependent on a number of factors impacting world supply
and demand. Due to these factors, prices may be subject to significant
fluctuations from year to year. However, these prices had no effect on the
Group's results for 2024, since it had no production.
Capital risk
The Group's and the Company's objectives when managing capital are to
safeguard the ability to continue as a going concern in order to provide
returns for shareholders and benefits to other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital.
21. Capital commitments
As of 31 December 2024, there were no capital commitments (2023: none).
22. Contingent Liabilities
The Group has provided performance guarantees to ANP in respect of the
TL-SO-19-16 PSC, in the form of a bank guaranteed performance bond of
US$2,000,00 given by SundaGas , plus a further guarantee provided by the
Company of US$3,200,000. In the event of non-performance under the PSC, there
is a potential liability to the Group of up to US$5,200,000 and to the Company
only of US$3,200,000. The Company believes that there is no indication of a
breach of the terms of the PSC. See also note 13 on page 57.
In respect of the Company's performance guarantee of up to $3.2m, the Board
consider that the guarantee is not a financial guarantee contract or insurance
contract and so is accounted for as a contingent liability which would only
crystallise in the event of non performance under the PSC. As the Board
considered there was no non-performance of the PSC as at period end, no
liability has been assessed under the guarantee.
The Board considers that there are no potential decommissioning costs in
respect of abandoned fields relating to any current or historic exploration
activity.
23. Events after the reporting period
On 24 April 2025, the Company announced that its wholly owned subsidiary
SundaGas Banda Unipessoal, Lda. ("SundaGas") will be entering into a binding
Farm-In agreement with its government-owned joint venture partner TIMOR GAP
Chuditch Unipessoal Lda ("TIMOR GAP"). In addition, the Company has
conditionally raised up to US$9.0 million, before expenses, by way of the
issue of unsecured convertible loan notes ("Loan Notes" or "CLNs") to three
institutional investors. Together, these combined funding arrangements will
enable the Company to execute a contract for the use of a jack-up rig to drill
the Chuditch-2 appraisal well.
Under the terms of the Farm-In Agreement, SundaGas will assign an initial 30%
interest to TIMOR GAP. This interest is in addition to the 15% interest
acquired by TIMOR GAP in the Farm-In transaction completed on 8 February 2024
and its original 25% interest (which portion is carried to first gas). This
assignment will result in SundaGas retaining a significant 30% working
interest in the Chuditch PSC, while TIMOR GAP will have a 70% interest.
On 13 May 2025, the Company announced that each investor has subscribed for
the initial tranche of an aggregate of US$1.5 million of Loan Notes, and funds
were received on the same day. On 16 May 2025, the Company further announced
that it had received notice from all of the participating investors to convert
all of the outstanding balance of their Loan Notes into Ordinary Shares of
0.025p each in the Company. As a result, 3,125,594,493 new Ordinary Shares
were issued at a price of 0.03995p per share. In addition, the Company has
granted Warrants to the investors pursuant to the conversion. In aggregate,
1,803,227,592 Warrants have been granted to the investors. One Warrant will
entitle the Investors to subscribe for one Ordinary Share at a price of
0.051935 pence.
24. Related party transactions
Company
During the year, the Company advanced loans to its subsidiaries. The details
of the transactions and the amount owed by the subsidiaries at the year end
were.
Year ended 31 December 2024 Year ended 31 December 2023
Balance Loan advance Balance Loan advance
£'000 £'000 £'000 £'000
SundaGas (Timor-Leste Sahul) Pte. Ltd 5,870 2,904 2,878 1,622
SundaGas Banda Unipessoal, Lda 897 - 883 253
Sunda Energy Ventures Pte. Ltd. (8) (8) - -
Gold Oil Peru S.A.C * 918 14 904 10
* The company has provided for an impairment of £918,000 (2023: £904,000) on
the outstanding loans.
Group and company
SundaGas (Timor-Leste Sahul) Pte. Ltd ("TLS"), a wholly-owned subsidiary paid
fees amounting to US$411,000 (2023: US$285,000) to SundaGas Pte. Ltd ("SGPL"),
a company in which Dr. Andrew Butler, a director, held a significant interest.
At the end of the period, there was a balance payable to SGPL of US$40,065
(2023: nil).
The Company paid fees amounting to £42,149 (2023: nil) to Javelin Capital
Partners LLP, an entity in which Mr Gerry Aherne, a director, held a
significant interest. These fees are included in directors' remuneration in
note 5. At the end of the period, there was a balance payable to the related
party of £5,417 (2023: nil).
The directors' aggregate remuneration and any associated benefits in respect
of qualifying services are disclosed in note 5.
During the year, amounts of £10,661 (2023: nil) were advanced to a director.
The amount receivable at the end of the year was £10,661 (2023: nil).
Glossary of Technical Terms
Bcf Billion standard cubic feet of natural gas.
Geological chance of success The estimated probability that exploration activities will confirm the
existence of a significant accumulation of potentially recoverable petroleum.
Contingent Resources Those quantities of petroleum estimated, as of a given date, to be potentially
recoverable from known accumulations by application of development projects,
but which are not currently considered to be commercially recoverable owing to
one or more contingencies.
GIIP Volume of natural gas initially in-place in a reservoir.
High Estimate Denotes the high estimate qualifying as Prospective Resources. Reflects a
volume estimate that there is a 10% probability that the quantities actually
recovered will equal or exceed the estimate.
Licence Operator The Company nominated to carry out operational activities.
Mean Reflects an unrisked median or best-case volume estimate of resource derived
using probabilistic methodology. This is the mean of the probability
distribution for the resource estimates and is often not the same as 2U as the
distribution can be skewed by high resource numbers with relatively low
probabilities.
MMBBL Million barrels of oil or condensate.
MMBOE, Oil equivalent Million barrels of oil equivalent. Volume derived by dividing the estimate
of the volume of natural gas in billion cubic feet by six in order to convert
it to an equivalent in million barrels of oil or condensate, and, where
relevant, adding this to an estimate of the volume of oil in millions of
barrels.
Prospective Resources Quantities of petroleum that are estimated to exist originally in naturally
occurring reservoirs, as of a given date. Crude oil in-place, natural gas
in-place, and natural bitumen in-place are defined in the same manner.
PSC Production Sharing Contract.
SPE PRMS 2018 The Society of Petroleum Engineers' ("SPE") Petroleum Resources Management
System ("PRMS") is a system developed for consistent and reliable definition,
classification, and estimation of hydrocarbon resources prepared by the Oil
and Gas Reserves Committee of SPE and approved by the SPE Board in June 2018
following input from six sponsoring societies: the World Petroleum Council,
the American Association of Petroleum Geologists, the Society of Petroleum
Evaluation Engineers, the Society of Exploration Geophysicists, the European
Association of Geoscientists and Engineers, and the Society of Petrophysicists
and Well Log Analysts.
SPE PRMS Unrisked Prospective Denotes the unrisked estimate qualifying as SPE PRMS 2018 Prospective
Resources.
Resources
Tcf Trillion standard cubic feet of gas
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