REG - UK Oil & Gas PLC - Annual Accounts for year ended 30 September 2025
05/05/2026 07:00
For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20260505:nRSE9041Ca&default-theme=true
RNS Number : 9041C UK Oil & Gas PLC 05 May 2026
UK Oil & Gas Plc
("UKOG" or the "Company")
Annual Review and Accounts for the year ended 30 September 2025
UK Oil & Gas Plc (AIM: UKOG) is pleased to announce its full year results
for the full year ended 30 September 2025. A copy of the full annual report
will be posted to shareholders today. A copy of the full annual report will
also be made available on the Company's website: www.ukogplc.com
(http://www.ukogplc.com)
Following the publication of the 2025 Annual Report, it is expected that the
suspension of trading in the Company's ordinary shares will be lifted at
7:30am today.
Stephen Sanderson, Chief Executive, commented: "We have continued to progress
the Group's strategic focus on hydrogen storage, supported by ongoing project
development, stakeholder engagement and recent fundraisings. These steps are
intended to support the Company's longer-term development."
For further information, please contact:
UK Oil & Gas PLC
Stephen Sanderson / Kris Bone/ Guzyal Mukhametzhanova Tel: 01483 941493
Zeus (Nominated Adviser and Broker)
James Joyce / Andrew de Andrade Tel: 0203 829 5000
CMC Markets (Joint Broker)
Douglas Crippen Tel: 0203 003 8632
Communications
Brian Alexander Tel: 01483 941493
Our Business and Strategy
Our Business - Long Duration Energy Storage
UK Oil & Gas PLC ("UKOG" or the "Group") is a pioneering energy developer
transitioning away from its prior onshore UK petroleum business into Clean
Power. We have a bold vision to use our core subsurface, engineering and
facilities skills to develop at-scale underground salt cavern hydrogen-ready
gas storage projects in South Dorset and East Yorkshire. We are one of a
handful of first movers in this new and vital energy storage sector, projected
by National Grid and The Royal Society to grow substantively from nearly zero
today to 50-100 TWh demand by 2050.
Harnessing excess clean renewable power, converting it into green hydrogen and
storing for future use to generate electricity when the wind doesn't blow, or
the sun doesn't shine, or demand outstrips supply, is crucial for the UK's
Clean Power system, addressing the inherent intermittency of wind and solar.
It will remove the current necessity of using natural gas to fill the
intermittency gap. This will also help substantially reduce the UK's current
£1 billion annual spend on wind turbine curtailment.
Our Mission: Deliver our first UK hydrogen-ready gas storage site by the
early 2030s, supporting the transition to net zero by 2050. Our 100% owned
subsidiary, UK Energy Storage (UKEn), has been diligently working on a £1
billion underground hydrogen-ready gas storage project in South Dorset for the
past four years. If delivered, this will be the UK's largest, with an
envisioned maximum annual capacity of up to 30 TWh. A second major site in
East Yorkshire aims for an initial 7 TWh annual capacity, with potential
expansion to match Dorset's capacity.
Technology: Storage will be via large new-build underground salt caverns, a
proven, safe, and cost-effective technology established in the UK since the
1970s. Only three areas in the UK onshore have thick enough underground rock
salt deposits for large scale caverns; Dorset, East Yorkshire, and Cheshire.
Our proposed sites in South Dorset and East Yorkshire aim to connect to the
UK-wide Project Union hydrogen pipeline, integrating into the national Clean
Power system.
Strategic Locations: Our two sites are strategically placed within the UK's
largest forecast hydrogen demand clusters: the South (including South Wales)
and the East Coast/Teesside. Our projects are designed to supply at least ~10%
of the forecast maximum NESO 2050 hydrogen storage requirement of 39 TWh. Our
Yorkshire site will also help decarbonise the East Coast Cluster, the UK's
largest CO2 emitting region, by enabling the adoption and optimisation of
reliable renewable and hydrogen power.
Benefits: Our hydrogen-ready gas storage will provide resilience,
flexibility, and security of supply to primary hydrogen clusters, buffering
demand spikes and ensuring pipeline stability. This will keep the lights on
and support the decarbonisation of the South and East Coast's gas-to-power
plants - Drax Power (the UK's and North's largest CO2 emitter) and Fawley
Refinery, the South's largest CO2 emitter.
We are also exploring early-stage green hydrogen generation opportunities
close to our storage projects, leveraging coastal locations for electrolysis,
identified off-takers and proximity to proposed new windfarm power landfalls
to help underpin and develop the nascent hydrogen economy.
Our Strategy
UKOG aims to build a diverse, sustainable and self-funding energy business
which has the following strategic objectives:
Long Duration Energy Storage and Renewables:
Hydrogen generation and storage
· Investigate potential sites for green hydrogen generation, salt
cavern storage and hydrogen battery concept.
· Early stage operated entry through planning permission stages,
with possible subsequent strategic partnerships/JV arrangements with large
infrastructure players.
· Strategic partnerships with sector infrastructure and technology
specialists.
· Focus initially on the UK, with international expansion
thereafter if commercially viable opportunities arise.
UK Energy Diversification - reduce carbon footprint of Company's existing
legacy petroleum sites
· Where viable, implement renewables energy cogeneration plus
electrical battery storage by repurposing existing petroleum wells/sites to
extend economic life cycle for brownfield sites.
· Where viable, add new standalone renewables and battery storage
for grid/heat export.
· Investigate replacement of diesel powered off grid mobile power
generation
Petroleum:
Balance Risk and Reward
· Maximising return on investment by considering divestment after
an asset has been de-risked, where appropriate.
· Ensure safe and compliant operations across our existing sites
· Extend asset life with development of energy transition
opportunities such as repurposing to geothermal.
· Decommission at the end of economic life.
UKOG shares its vision and strategy internally through dialogue with its
employees and externally to shareholders and stakeholders via public
announcements, the Company's website and the Annual Report and Accounts.
Chairman's Statement
We can celebrate a positive end of the financial year as the Company continues
its transition from oil and gas explorer to clean energy developer. Following
the restoration of trading, the Company successfully raised additional funding
and continued its strategic transition towards clean energy, with an
increasing focus on hydrogen storage through its wholly owned subsidiary, UK
Energy Storage ("UKEn").
This transition includes the completion of plugging and abandonment of
Broadford Bridge well, the sale of UKOG GB Ltd and planning for the future of
Horse Hill, the field which started the Company on its exploration adventure
in 2014.
Our ability to nimbly adjust our strategy has enabled us to adapt to new
challenges and set new goals as we move towards achieving an energy storage
economy across the UK. We look forward to working with new associates as we
build towards our planned Yorkshire and Dorset underground salt cavern
hydrogen-ready gas storage sites.
On behalf of the Board, I would like to thank our shareholders for their
continued support during this period of transition and our management team for
their dedication and focus in delivering against the Company's evolving
strategy.
Nicholas Mardon Taylor
Non-Executive Chairman
Chief Executive's Statement
We have established important alliances for the future stability and growth of
the Company which will stand us in good stead for 2026 and beyond.
Our 100% owned subsidiary UK Energy Storage ("UKEn") has signed memorandums of
understanding with potential pipeline connectors, National Gas and Wales and
West Utilities. We view these as essential building blocks towards achieving
our mutually shared ambition of creating a joined-up long duration energy
storage economy across the UK, both north, south and west.
We look forward to working with National Gas and to the day that their Project
Union links seamlessly with UKEn's planned Yorkshire and Dorset storage sites.
In addition, we are working closely with the Dorset Clean Energy Super Cluster
("DCESC") and plan to establish similar connections in East Yorkshire.
With DCESC we had an enjoyable morning in Parliament meeting Energy Minister
Michael Shanks MP and five other MPs with an interest in clean energy.
It was encouraging to hear from Mr Shanks that the Department for Energy
Security and Net Zero ("DESNZ") have reaffirmed its intention to launch the
first transport and storage allocation rounds in Spring 2026. I believe this
adds further importance to a discussion on how the Government can deploy these
models most effectively to remove market barriers and stimulate private
investment.
The meeting with the Minister enabled us to stress that UKEn's Dorset scheme
is currently the largest planned hydrogen storage site in the UK and is the
sole planned national scale hydrogen storage solution in southern England -
critical to supporting the region's clean power grid infrastructure.
We also explained that our Yorkshire scheme is strategically positioned to
support the decarbonisation of the UK's highest CO2 emitting region, the East
Coast Cluster, as well as Drax Power - the country's largest single CO2
emitter.
October 1(st) 2025 saw the restoration of the Company's trading on AIM
following the temporary suspension and subsequent publishing of the annual
audited accounts and half-yearly report.
This was followed by four successful placings in October and November 2025,
totalling over £5 million, reflecting the keen interest in our energy storage
projects. These funds will permit the Company to further accelerate and
strengthen the primary technical, economic modelling studies. Additionally,
the funding will also assist UKEn in further progressing a potential
electrolytic hydrogen generation project in Dorset.
From a financial perspective, the year reflects both the impact of operational
and regulatory changes and the Group's strategic transition. Further detail is
provided in the Financial Review section.
As part of the Company's strategic transition and increasing focus on hydrogen
storage, the Board agreed the disposal of its wholly owned subsidiary, UKOG
(GB) Limited. Following approval from the North Sea Transition Authority
(NSTA), the disposal became effective on 3 December 2025, subsequent to the
reporting date.
In February 2026, as part of the Company's commitment to transitioning into
clean energy, it has successfully Plugged and Abandoned (P&A) its
Broadford Bridge-1/1z well.
Stephen Sanderson
Chief Executive
Operational Review
Long Duration Energy Storage (LDES) Assets
In October 2025, UK Energy Storage Ltd ("UKEn") has executed Memoranda of
Understanding ("MOUs") with National Gas Transmission plc ("National Gas") and
Wales & West Utilities Limited ("WWU"), strengthening the strategic
positioning of its hydrogen-ready gas storage portfolio. The MOU with National
Gas establishes the parties' intent to collaborate on the development of
Project Union, the proposed national 100% hydrogen transmission backbone, and
its direct connection to UKEn's planned onshore salt cavern hydrogen storage
projects in East Yorkshire and South Dorset. The collaboration is intended to
support potential joint engagement under the Government's Hydrogen Transport
and Hydrogen Storage Business Model ("HT&SBM"), with allocation rounds
scheduled to commence in 2026. National Gas recognises the importance of
large‑scale hydrogen storage in buffering supply and demand and enabling
efficient operation of a national hydrogen pipeline system. Project Union's
first phase, currently targeted for operation by 2032, is expected to connect
the East Coast hydrogen cluster, with envisaged routing also facilitating
UKEn's East Yorkshire project. National Gas and UKEn both recognise that
UKEn's planned South Dorset storage would be critical to facilitate Project
Union's connection to the south, southwest of England and south Wales. The
South Dorset project being, to date, the sole planned national scale hydrogen
storage node in southern England offering strategic importance for the
development of a national hydrogen economy. The south coast location also
offers itself a key enabler for potential future maritime import and export to
national networks.
In March 2026, UKEn also executed an MOU with WWU, the principal gas
distribution network operator for Wales and the South West of England. This
MOU provides a framework for collaboration on the development of a future
hydrogen pipeline connection between WWU's proposed HyLine South West hydrogen
transmission system and UKEn's planned South Dorset hydrogen storage facility.
The parties intend to work together to support potential joint applications
under the HT&SBM, recognising the need for coordinated development of
hydrogen transport and storage infrastructure.
Together, these MOUs demonstrate growing engagement from both national and
regional gas network operators and reinforce UKEn's pivotal role as a
potential provider of nationally significant hydrogen storage infrastructure,
supporting the development of a resilient UK hydrogen economy.
Letters of support for UKEn's hydrogen storage projects in Dorset and East
Yorkshire were received during the year from Sumitomo, SGN, RWE and The Solent
Cluster. UKEn also became a founding member of the Dorset Clean Energy Super
Cluster, centred on Portland Port, and continued an active programme of
political and stakeholder engagement.
South Dorset Long Duration Energy Storage (UKEn 100%)
DEEP.KBB GmbH, one of Europe's leading salt cavern design and underground
energy storage engineering groups, completed preliminary project design for
the Company's proposed new South Dorset underground hydrogen storage facility,
located west of Weymouth. The design confirms the suitability of the site for
a material scale hydrogen storage project, comprising 24 salt caverns (three
clusters of 8 caverns) at a depth of ~1330m below surface. The project is
fully in keeping with the Government's Clean Power 2030 ambitions.
The following metrics summarise the design and its advantages versus UKEn's
original Portland harbour site ("Portland"):
The Design comprises 24 caverns at South Dorset providing up to 1.01 billion
standard m³ ("bcm") working hydrogen volume, 12% greater than Portland's
0.9 bcm;
Calculated hydrogen withdrawal and injection rates at South Dorset could
provide up to 2.9 times the annual cycling capacity of Portland, creating a
technical maximum annual storage capacity of 30.2 TWh¹/yr vs Portland's 10.4
TWh¹/yr, a substantive increase;
If delivered and operated at full capacity, the site's technical maximum 30.2
TWh¹/yr annual storage capacity could represent a material proportion of the
currently predicted UK 2050 annual hydrogen storage demand of 50-100
TWh(1)/yr(2);
The design's adoption of a conventional "cushion gas" operating scheme would
significantly reduce project development costs (CAPEX) by around 36% compared
to Portland, reducing costs by around £450 million to £800 million;
The design's resultant increased cycling capacity, lower CAPEX and operating
costs create potential for a significantly increased future annual revenue
base versus Portland and a more competitive submission for government revenue
support;
The site also lies closer to the planned H2 Connect hydrogen trunk pipeline,
originally designed to connect South Dorset to the UK hydrogen transmission
pipeline system (Project Union) and the main hydrogen clusters in the South,
East Coast and Northwest. Latest designs would see the National Gas Project
Union pipeline coming directly to this nationally strategic storage facility.
Notes: (1) TWh = terawatt hours; 1 bcm of pure hydrogen has the energy
equivalent of ~3.0 TWh;
(2) based upon 2023 National Grid/NESO and Royal Society hydrogen demand
predictions as per RNS 27/06 and 21/08/2024.
The Design's significantly greater injection and withdrawal rates and
consequent increased annual energy storage capacity compared to Portland, are
a direct consequence of the underlying geology at the location. The Triassic
salt is thicker, permitting larger caverns, and lies 1,070m closer to surface
at 1,330m versus 2,400m at Portland. The associated lower hydrostatic pressure
and temperatures within the salt underlying the Site enable a simple,
conventional "cushion gas" scheme to be utilised to provide the minimum
necessary cavern working pressure required to maintain cavern integrity.
The cushion gas scheme, as proposed by DEEP.KBB, is a proven technology used
in numerous salt caverns in the UK, Europe and USA, offering a much simpler
development and operation than the required brine compensation scheme at
Portland. The Design's scheme requires no additional brine wells, brine
facility or brine pipelines, plus there is only one well per storage cavern
versus two for brine compensation.
The Company also continues to review additional strategic Dorset storage
locations that further enhance the Dorset portfolio development and
optionality.
Portland energy hub (UKEn 100%)
The Company made a strategic decision that it will pursue revenue support only
for its more competitive South Dorset and East Yorkshire projects and will no
longer pursue the Portland project for storage. This strategic decision has
been reflected in the Group's financial statements, with costs directly
attributable to the Portland project reviewed and, where no longer meeting the
capitalisation criteria under IAS 38, expensed or impaired during the year.
However, given our positive relationship with Portland Port and the role of
hydrogen in decarbonising the marine sector, the Company believes that there
remain synergies between our South Dorset project and the port. To this end,
UKEn and Portland Port executed two Memorandums of Understanding to jointly
pursue the following joint venture hydrogen opportunities centred around the
Port and UKEn's material scale South Dorset Storage site (see RNS of 28
January 2025):
Generation of 1 GW of green hydrogen via import by ship of green hydrogen
carrier liquids (and/or compressed green hydrogen) into Portland Port.
Produced hydrogen gas to be piped locally into UKEn's nearby South Dorset salt
cavern hydrogen storage site and then onwards to the wider UK.
a. Generation of green hydrogen via electrolysis within Portland Port.
Proposed to capture excess 'locally' generated clean renewable (wind/solar)
energy in UKEn's South Dorset storage. Stored energy would ultimately be
converted to electrical power for future use/demand during low wind/solar
periods, thus helping 'cure' the inherent intermittency of renewables (i.e.,
"a Hydrogen Battery").
b. Hydrogen to power generation within Portland Port. Proposed to meet initial
power requirements for UKEn's South Dorset Storage site and its environs.
The company's South Dorset hydrogen projects are now positioned at the core of
the ambitious £28 billion Dorset Clean Energy Super Cluster (DCESC),
officially launched at UKREiiF in May 2025. With full backing from Dorset
Council, the cluster brings together clean hydrogen production and storage, 2
GW of offshore wind in the English Channel, carbon capture and storage (CCS),
and the development of a new deepwater facility for wind farm fabrication and
maintenance-all centred around Portland Port. The company is actively
collaborating with the DCESC team to advance its projects, strengthen
stakeholder engagement, and build both regional and national political
support.
The Company also continues to review additional strategic Dorset hydrogen
production opportunity that further enhance development optionality in the
region.
East Yorkshire Hydrogen Storage (UKEn 100%)
The Company is planning a further hydrogen storage project in East Yorkshire,
located nearby to the existing SSE Thermal/Equinor Aldbrough gas storage site.
Technical studies and land acquisition efforts moving forward in order to
mature the project to sufficient levels to achieve the eligibility and
assessment criteria for the hydrogen transport and storage business model
(HT&SBM) allocation rounds.
The Company is engaging DEEP.KBB to undertake a concept feasibility study for
an East Yorkshire development and we look forward to sharing the results once
completed.
Petroleum Assets
OG Asset Status Summary
Asset / Licence Status Notes Date of Change
Horse Hill Oil Field (PEDL137 & PEDL246) Temporarily shut in, still owned Awaiting new retrospective planning consent following Supreme Court ruling; June 2024 (shut-in); submitted at the end of April 2026
production to resume if approved, the impairment recognised in 2024
PEDL246 Relinquished June 2024
Loxley (PEDL234) Relinquished Planning permission upheld, but no farmout secured; licence surrendered, the End-June 2025
impairment recognised in 2024
Broadford Bridge (PEDL234) Relinquished Planning extension refused; licence surrendered; commercial negotiations with End-June 2025
Ceraphi Energy Ltd for re-purposing surface site to geothermal ongoing, the
impairment recognised in 2024. BB1z P&A complete February 2026.
Horndean Oil Field (PL211, 10%) Post year end sale Sold via sale of UKOG (GB) Ltd to Servatec Holdings Ltd, recognised as an Q4 2025
asset held for sale under IFRS 5
Avington Oil Field (PEDL070, 5%) Post year end sale (shut in) Included in sale of UKOG (GB) Ltd to Servatec Holdings Limited remains Q4 2025
shut-in, recognised as an asset held for sale under IFRS 5
Horse Hill Oil Field, PEDL137 (UKOG 85.635%)
The field and surrounding licences are operated by UKOG's subsidiary company
HHDL in which UKOG has 77.9% ownership. The Licensees are HHDL (65% interest)
and UKOG (137/246) Ltd (35% interest).
In June 2024, the Supreme Court ruled that in its 2019 grant of planning
consent for the Company's oil production at Horse Hill, Surrey County Council
("SCC") did not request and consider in their assessment an estimate of the
end-use carbon combustion emissions of produced hydrocarbons. The ruling now
retrospectively requires that the end-use combustion emissions must be
included in the development's Environmental Impact Assessment ("EIA") and
assessed as part of the grant of planning consent for the development.
Consequently, the Company is working closely with its planning consultants
("Zetland Group") and SCC to rectify the situation, via a new retrospective
planning submission, filed at the end of April 2026. During 2025 extensive
ecology and environmental background surveys have been undertaken to support
the application and the final process of third-party reporting is nearing
completion. By agreement with SCC Horse Hill oil production was temporarily
shut in pending restoration of planning approval. The asset remains on a care
and maintenance basis. On resumption of its profitable production operations
the company will assess the future opportunities for Horse Hill, including
further production development, from which valuable revenue generation can
support the company's transition to clean energy.
At the time of this production shut-in 212,000 bbl of Brent quality crude had
been produced and exported from the Portland and Kimmeridge pools.
Following a technical review which determined limited remaining exploration
prospectivity, the Company relinquished PEDL 246 effective 30 June 2024,
resulting in the cessation of associated licence fees payable to the North Sea
Transition Authority.
Loxley, Broadford Bridge, PEDL234 (UKOG (234) 100% (Relinquished)
According to the February 2023 Competent Persons Report (CPR), the Loxley
discovery was assessed to contain mid-case recoverable 2C Contingent Resources
of 31.0 billion cubic feet net to UKOG. The associated net post-tax present
values to UKOG were estimated at £124 million based on 31 December 2022 gas
prices, and £87 million using RPS Energy's forward price forecast. Further
appraisal and development activities were required to reclassify these
resources as Reserves.
In May 2024, UKOG engaged Envoi Limited, a UK-based specialist in oil and gas
divestment and project marketing, to facilitate a farmout of up to a 50%
working interest in the Loxley project. The objective of the farmout was to
secure full funding for the planned Loxley-1 appraisal drilling and testing
programme, with UKOG's share of costs to be carried by the farminee(s).
In an increasingly difficult and hostile environment for the UK petroleum
sector, notably following the introduction of the petroleum sector policies of
the new Labour government, Envoi Limited were unable to find a farminee and no
farmout resulted. Consequently, in June 2025 the Company decided to relinquish
PEDL234, containing the Loxley and Broadford Bridge discoveries.
Commercial discussions continued with CeraPhi Energy Ltd and the regulators
regarding potential for a geothermal energy agriculture project incorporating
the Broadford Bridge surface site. Notwithstanding this, in February 2026, as
part of the Company's commitment to transitioning into clean energy, it
successfully Plugged and Abandoned its Broadford Bridge-1/1z well. The
operation, which commenced in late 2025 and finished on 4 February 2026, was
carried out in full accordance with all pertinent regulatory requirements,
agreed programmes and consents. This milestone confirms the Company's
compliance with its regulatory obligations, demonstrating its continued
commitment to responsible operations and asset stewardship during its
transition into clean energy. West Sussex County Council, the governing
local planning authority, were kept fully informed regarding the operation and
its progress.
Horndean Oil Field (UKOG 10%)/ Avington Oil Field (UKOG 5%)
UKOG's producing field Horndean located in Hampshire. Horndean reserves have
increased as a result of well interventions on the field, as outlined in the
Reserves & Resources section.
In line with our strategic move away from fossil fuels, during the year, the
Company agreed the sale of its 100%-owned subsidiary UKOG (GB) Limited to
Servatec Holdings Limited for a cash consideration of £400,000. This included
the minority non-operated interests in two UK onshore petroleum licences, a
10% interest in PL211 and a 5% interest in PEDL070, containing the Horndean
and Avington oil fields, respectively. Both licences are located in
Hampshire. On 3 December 2025, subsequent to the reporting date, the Group
completed the disposal of UKOG (GB) Limited, following receipt of approval
from the North Sea Transition Authority ("NSTA"), which constituted the final
condition precedent to the transaction.
Kris Bone
Chief Technical Officer
Reserves and Resources
Total aggregate net discovered 2C (mid case) contingent resources and 2P (mid
case) reserves now stand at 2.8 mmboe.
Horndean reserves are based on the 2024 Competent Persons Report, as no
independent CPR has been prepared for 2025. The Group's interest in Horndean
was held within UKOG (GB) Limited, classified as an asset held for sale at 30
September 2025, and was disposed of subsequent to the reporting date.
HH-1 is currently shut-in and remains in contingent resource category, as the
company looks to reinstate planning consent. Once the company reinstates
planning permission and gets sufficient data it intends to review the HH-1
production decline and attribute reserves to HH-1, thus transferring them from
Contingent Resources to Reserves category.
Table 1: Recoverable Reserves mmbbl: Producing Fields, Gross and Net (as of 31
December 2024)
Asset UKOG % Interest Gross mmbbl Net Attributable mmbbl Operator
1P 2P 3P 1P 2P 3P
Horndean (1) 10 0.88 1.01 1.14 0.09 0.10 0.11 Star Energy
TOTAL (mmbbl) 0.09 0.10 0.11
Notes: (1) DeGolyer and MacNaughton ("D&M") for Star Energy Jan 2024
Table 2: Contingent Resources mmbbl/mmboe (i.e., discovered and drill ready
recoverable volumes)
Licence UKOG Gross Net Attributable Operator
% mmbbl/mmboe mmbbl/mmboe
1C 2C 3C mean 1C 2C 3C mean
Horse-Hill Portland (1) PEDL137 85.64 0.4 1.3 3.4 1.7 0.4 1.2 2.9 1.5 HHDL
Horse-Hill Kimmeridge (4) PEDL137 85.64 0.4 1.6 6.1 2.7 0.3 1.4 5.2 2.3 HHDL
Avington (2) PEDL070 5 0.6 0.8 1.1 0.8 0.03 0.04 0.05 0.04 Star Energy
Horndean (2) PL211 10 0.3 0.8 1.3 0.8 0.03 0.08 0.13 0.08 Star Energy
TOTAL mmboe 0.8 2.7 8.3 3.9
Notes: (1) Xodus June 2018 less Portland production to end Dec 2024,
estimates for Horse Hill are deterministic based upon per well recoveries,
(2) D&M for Star Energy February 2025, estimates for Horndean and Avington
are deterministic, not probabilistic,
(3) RPS CPR February 2023, probabilistic based upon range of recovery factors,
(4) RPS June 2019
Health, Safety and the Environment
UKOG is committed to providing, so far as is reasonably practicable, a quality
working environment that is safe and one that poses no risks to the health and
safety of our employees, contractors, the local community and stakeholders.
The health & safety of employees and the public, and the protection of the
environment are core business objectives of UKOG. They rank equally with the
company's other business objectives.
Health, safety and environmental ("HSE") risks associated with the business
practices of UKOG are addressed through the effective implementation of our
HSE Policy, which is designed to ensure that every person who works for UKOG
is responsible for ensuring that health and safety is managed in all aspects
of our business.
The Company's HSE aspirations are: "get it right, first time, every time with
no accidents, no harm to people, the ecology and the environment."
To achieve the identified objectives, we will ensure that all necessary and
reasonable resources are made available. We will confirm that objectives are
being met by reviewing and reporting on performance and auditing the
implementation and operation of UKOG's HSE Management System.
Our full HSE framework is available on our website:
http://www.ukogplc.com/page.php?pID=101 (https://ukogplc.com/page.php?pID=101)
Health & Safety Review
UKOG, under our operating subsidiary HHDL, continued production activities at
Horse Hill, until production was suspended. Post suspension of production, the
site remains under care and maintenance oversight.
The Broadford Bridge-1/1z well plugging and abandonment operations were
planned and executed successfully by the team without any health, safety or
environmental incidents.
There were no lost time injuries or environmental incidents on any of UKOG's
sites during the reporting period or post period. The lost time injury
frequency was also zero.
The EA made a number of site visits to both Horse Hill and Broadford Bridge.
UKOG continues to maintain good housekeeping standards on its sites. The
Company continuously monitors all its live operations for noise, ensuring
noise from its sites is kept to a minimum and is compliant with the levels set
by the relevant site planning approval. UKOG only utilises service companies
that can demonstrate commitment to our HSE standards.
Community Engagement
Any complaints received are reviewed and responded to. Communication links are
in place with the residents close to our sites, who can call UKOG at any time.
The Company meets and communicates regularly with local police to give
operational updates where necessary.
Route to Development
UKOG operates within a highly regulated industry, led by the NSTA, a
government agency reporting to DESNZ, who among other things are responsible
for checking a company's financial and operational competency before issuing a
Petroleum Exploration and Development Licence ("PEDL") and other regulatory
approvals.
Once a potential site has been identified, UKOG must secure landowner consent
and a land lease to operate on the land, before the EA assess any risk to
groundwater and air quality, as well as the arrangements for waste management.
In parallel with seeking EA permits, discussions with local planning
authorities begin. They in turn seek the views of the local community and
statutory consultees. The Health and Safety Executive also regulates and
monitors all onshore oil & gas exploration and production activities.
Financial Review
Overview
The financial year ended 30 September 2025 marked a period of strategic
realignment for the Group as the Group continued its transition from legacy
oil production towards hydrogen storage and clean energy infrastructure.
During the year, the Group maintained strict financial discipline while
advancing its flagship hydrogen storage projects and actively managing its
remaining oil assets.
Subsequent to the year end, the Group strengthened its financial position
through the successful raising of £5.0 million of additional funding, which
improved short-term liquidity and provided working capital to support ongoing
operations and continued advancement of its hydrogen storage strategy. While
the Group continues to operate in a net liability position, this post year-end
financing has provided additional near-term headroom.
Income Statement
Group revenue for the year amounted to £0.4 million (2024: £1.1 million),
generated from crude oil sales at the Horse Hill and Horndean fields.
The reduction in revenue compared with the prior year primarily reflects the
temporary suspension of production at the Horse Hill oil field, following the
UK Supreme Court ruling requiring the reconsideration of the planning consent
and the inclusion of downstream combustion emissions within the Environmental
Impact Assessment. Production at Horse Hill was therefore shut-in during
November 2024 pending submission of a revised planning application.
Cost of sales totalled £0.4 million (2024: £0.9 million), including
depletion, depreciation and amortisation charges of £0.03 million (2024:
£0.4 million).
As a result, the Group reported a gross loss of £0.02 million (2024: £0.2
million).
Administrative expenses increased to £2.6 million (2024: £1.7 million),
reflecting a year of the Group's strategic transformation and the dual audit
process, partially offset by ongoing cost control measures. The increase also
includes a charge of £0.5 million (2024: income £1.1million) recognised in
respect of the decommissioning provision following a reassessment of estimates
during the year.
In addition, the Group recognised a prior period adjustment in respect of the
decommissioning provision following a reassessment of the discount rate
applied under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
Management concluded that the discount rate applied in prior periods was not
consistent with IAS 37 and, accordingly, comparative information has been
restated in accordance with IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors. This resulted in an increase in the decommissioning
provision with a corresponding adjustment to opening reserves. Further details
are provided in the note 3 to the financial statements.
During the year, the Group classified UKOG (GB) Limited as an asset held for
sale, with disposal completed subsequent to the reporting date. The subsidiary
contained the Group's minority non-operated interests in the Horndean and
Avington oil fields. The disposal does not represent a discontinued operation,
as it does not constitute a separate major line of business or geographical
area of operations. Accordingly, the results of these assets were included
within continuing operations for the reporting period.
Impairment reviews
As part of the year-end review in 2024, the Group carried out impairment
testing of its oil and gas and exploration and evaluation assets in accordance
with IFRS. This resulted in significant impairments across a number of legacy
oil and gas interests.
The impairments primarily reflected external regulatory and commercial factors
beyond the Company's direct control, not adverse geological or operational
conditions.
By recognising the Horse Hill impairment in the year ended 30 September 2024,
the Board adopted a prudent approach that ensured asset values appropriately
reflected the regulatory position and uncertainties existing at that time.
Given the planning and regulatory uncertainty prevailing during the 2025
reporting period, no reversal of impairment was recognised, notwithstanding
that the Company's assessment of the field's remaining recoverable oil volumes
was unchanged from prior periods. This accounting treatment was consistent
with applicable accounting standards and the approach to asset valuation while
the timing of planning redetermination remained uncertain.
During the year, the Group's decision not to progress the Portland hydrogen
storage project prompted a comprehensive review of costs across its hydrogen
storage and related energy transition project portfolio. This review
identified that certain costs had been recognised as development expenditure
ahead of all of the recognition criteria under IAS 38.57 being met. These
costs primarily related to early-stage technical evaluation, feasibility
studies and project scoping activities, which should have been classified
within the research phase in historic periods and expensed as incurred.
Accordingly, the Group has corrected this misclassification as a prior period
adjustment in accordance with IAS 8. Amounts of approximately £0.2 million
and £0.3 million have been recognised as adjustments to opening retained
earnings at 1 October 2023 and 1 October 2024 respectively.
Furthermore, the Group recognised an impairment charge of approximately £0.92
million in respect of intangible assets in the current year. This primarily
relates to development expenditure associated with projects that are no longer
being progressed, including the Portland project.
Further details of the prior period adjustment are provided in Note 3, and the
impairment charge is disclosed within Note 12 Intangible Assets.
Balance Sheet
Non-current assets decreased to £0.3 million at 30 September 2025 (2024:
£1.7 million). The reduction primarily reflects the Group's continued
rationalisation of its legacy oil and gas portfolio in line with its strategic
transition towards hydrogen storage and clean energy infrastructure.
During the year, the Group classified its subsidiary UKOG (GB) Limited as an
asset held for sale under IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations, following the Board's decision to dispose of the
entity.
Upon classification as held for sale, the asset was measured at the lower of
its carrying amount and fair value less costs to sell. This resulted in the
recognition of an impairment charge of £0.11 million, aligning the carrying
value of the subsidiary with the expected disposal proceeds.
Subsequent to the reporting date, the disposal completed on 3 December 2025,
following receipt of the required approval from the North Sea Transition
Authority (NSTA).
The Group's remaining non-current asset base primarily comprises capitalised
expenditure relating to the development of hydrogen storage projects and
associated technical studies.
Cash Flow and financing
Cash and cash equivalents at the financial year end stood at £0.04 million
(2024: £1.0 million), reflecting the Group's continued investment in its
transition strategy, the management of legacy assets, and the timing of
funding activities during the period. Subsequent to 30 September 2025, the
Group successfully raised a further £5.0 million of funding (before
expenses). This post-year-end financing has significantly strengthened the
Group's liquidity position and provides the financial flexibility required to
progress its strategic priorities.
Summary
During the year ended 30 September 2025, UKOG progressed the repositioning of
its business towards hydrogen storage. The Group maintained a lean cost base,
exited legacy oil exploration activities, and continued to advance its
hydrogen storage projects. The Group's activities during the year reflect a
clear strategic focus on hydrogen storage as its primary area of future
development.
Principal risks and uncertainties
UKOG continuously monitors its risk exposures and reports its review to the
board of directors ("The Board"). The Board reviews these risks and focuses on
ensuring effective systems of internal financial and non-financial controls
are in place and maintained.
Key Risk Areas
The high-risk areas surrounding our existing business is tabulated below; the
key areas are Strategic, Operational and Financial.
Risk Mitigation Magnitude and likelihood
Strategic risks
Exposure to political risk, UKOG operates within the United Kingdom and may in Through industry associations and direct contact, the Company engages with Magnitude - High
future evaluate opportunities in other regions. Even within stable Government and other appropriate organisations to ensure the Company is kept
jurisdictions, political, economic and regulatory changes can arise that may abreast of expected potential changes and takes an active role in making Likelihood High
impact the Group. Examples include amendments to energy and environmental appropriate representations.
regulation, changes in taxation policy, evolving planning and permitting
requirements, and shifts in government priorities regarding fossil fuels and
the energy transition.
Climate change and energy transition risk - UK net-zero targets and evolving The Group is aligning with evolving UK climate policy and stakeholder Magnitude - Low to Moderate Likelihood - Low to Moderate
investor, public and regulatory expectations may reduce demand for expectations and is actively developing hydrogen storage.
hydrocarbons and increase climate-related disclosure and operational costs.
This may impact asset viability, access to capital and the Group's strategic
direction.
The Group is actively transitioning its focus towards hydrogen storage,
including the development of salt cavern storage projects in South Dorset.
However, these projects remain at an early stage and are subject to
significant technical, regulatory, planning and funding risks.
Operational risks
Permitting risk, planning, environmental, licensing and other permitting risks UKOG is compliant with regulations and is proactive in engagement with Magnitude - Moderate
associated with our operations particularly with hydrogen storage operations regulators, communities and the expertise and experience of the management
teams. Likelihood - Moderate to High
Oil production may not be resumed or achieved at the anticipated levels from Production at Horse Hill has been shut-in since November 2024 pending the Magnitude - High
the Group's assets, or production may not be economically viable, particularly outcome of planning redetermination. There is no certainty when consent will
in light of the current regulatory and planning uncertainties be reinstated or that production will recommence. The Group continues to Likelihood - High
evaluate available technical data and maintain cost discipline; however, the
timing, level and economic viability of any future production remain
uncertain.
.
Operational risks (continued)
Prices and markets. The Group's financial performance is exposed to The Group keeps this risk under review. At this point, the Group continues to Magnitude - Moderate
fluctuations in the prices of oil, gas and refined products. These prices are review costs where appropriate.
driven by international supply and demand dynamics and can be highly volatile.
Likelihood - Moderate to High
Contributing factors include political developments, increased supply from new
oil and gas projects or alternative low-carbon energy sources, technological
change, global economic conditions, and public health events.
Loss of key staff Provide and maintain competitive remuneration packages to attract the right Magnitude - Moderate
calibre of staff. Build a strong and unified team.
Likelihood - Low
Financial risks
Liquidity risk. The Group is exposed to liquidity risk through its operations, To mitigate this risk, the Group prepares regular cash flow forecasts, closely Magnitude - High
with a material uncertainty regarding its ability to generate and access monitors working capital, and seeks to align expenditure with available
sufficient funds to meet its obligations as they fall due. resources. The Group also relies on access to external funding, and retains Likelihood - Moderate
the flexibility to defer or reduce discretionary expenditure where necessary.
Climate-Related Disclosures
The Company acknowledges the increasing relevance of climate-related risks and
opportunities to its operations, strategy, and financial position. In
alignment with the recommendations of the Task Force on Climate-related
Financial Disclosures (TCFD), the following narrative summarises the Group's
current approach across the four core TCFD pillars: Governance, Strategy, Risk
Management, and Metrics & Targets.
Board Oversight
Throughout 2025, the Board retained ultimate responsibility for the oversight
of all material risks, including those relating to climate change. The Board
periodically reviewed updates from management on environmental and regulatory
developments, ensuring climate-related risks were appropriately captured in
the risk register and strategic plans.
Management's Role
Management is responsible for implementing the Group's sustainability
strategy, assessing emerging risks, and embedding climate considerations into
capital allocation and planning decisions. In 2025, this included specific
focus on energy transition activities such as hydrogen storage feasibility.
Climate-related Risks and Opportunities
During 2025, the Group continued to monitor the UK's evolving energy policies
and investor expectations around decarbonisation. Transition risks,
particularly regulatory and reputational, remain relevant to the Group's oil
and gas portfolio. In parallel, new opportunities are emerging from the
Group's plans to diversify into hydrogen storage, hydrogen production and
other low-carbon infrastructure.
Time Horizons
Short term (1-3 years): Reporting obligations and operational emissions
controls.
Medium term (3-5 years): Strategic pivot toward transitional energy assets.
Long term (5+ years): Repositioning business model in line with a lower-carbon
economy.
Impacts on Strategy and Financial Planning
The business continues to shift its focus from oil & gas projects to
broader energy solutions aligned with net-zero objectives.
Risk Management
Identification and Assessment
The Group uses a structured risk management framework, updated regularly, to
identify and evaluate emerging climate-related risks. These are considered
alongside other operational and market risks at management and Board levels.
Management Processes
Mitigation activities include asset diversification, regulatory engagement,
and ongoing environmental assessments. In 2025, enhanced emphasis was placed
on regulatory compliance related to emissions and energy usage.
Integration into Enterprise Risk Management
Climate-related risks have been embedded within the Group's enterprise risk
register and are reviewed at least annually. Specific climate-linked risks are
assigned owners and mitigation strategies.
Metrics and Targets
Emissions Monitoring
The Group plans to track and report Scope 1 and Scope 2 GHG emissions from its
Horse Hill site from 2026. Flaring rates are metered and reported monthly to
the NSTA. These have been zero since Horse Hill production was shut in.
Key Targets
Once Scope 1 and Scope 2 emissions (tCO₂e) are tracked and reported, targets
for reduced emissions will be put in place
Reducing energy use per operating site
Full environmental permit compliance
Climate impact in project assessments (where applicable)
Key Performance Indicators (KPIs)
The Group monitors a range of financial and operational key performance
indicators (KPIs) to assess performance against strategic goals, ensure
efficient operations, and manage risks across its oil and gas portfolio. These
KPIs are reviewed regularly by management and the Board to inform
decision-making and resource allocation.
Operational KPIs
KPI Definition 2025 2024 Commentary
Long Duration Energy Storage (Hydrogen) strategy Progression of the Group's hydrogen storage and energy transition strategy, In progress Early stage Advancement of hydrogen storage initiatives, including South Dorset and
including project development, partnerships, and infrastructure planning engagement in regional infrastructure development
Horse Hill planning progress Advancement of planning status for Horse Hill, including regulatory In progress n/a Planning resubmission and redetermination ongoing
resubmission and redetermination process
Broadford Bridge Decommissioning Completion of abandonment, site restoration P&A complete n/a Decommissioning activities ongoing, P&A complete and restoration works
in progress
Financial KPIs
KPI Definition 2025 2024 Commentary
Revenue Total oil sales revenue £0.4m £1.1m Reflects lower production at Horse Hill
Operating Loss Loss from continuing operations £3.9m £38.3m Driven by strategic refocus on hydrogen
Cash Balance Cash and cash equivalents £0.04m £1.0m Reflects investment in hydrogen storage
(Year-End)
Post Year-End funding raised Gross proceeds from equity raises after year-end £5.0m n/a Strengthened short-term liquidity following year-end
Gross proceeds from equity raises after year-end
£5.0m
n/a
Strengthened short-term liquidity following year-end
Directors' Section 172 Statement
The following disclosure describes how the Directors have had regard to the
matters set out in section 172(1)(a) to (f) and forms the Directors' statement
required under section 414CZA of the Companies Act 2006.
The matters set out in section 172(1) (a) to (f) are that a Director must act
in the way they consider, in good faith, would be most likely to promote the
success of the Company for the benefit of its members as a whole, and in doing
so have regard (amongst other matters) to:
· the likely consequences of any decisions in the long term;
· the interests of the company's employees;
· the need to foster the company's business relationships with
suppliers/customers and others;
· the impact of the company's operations on the community and
environment;
· the company's reputation for high standards of business conduct;
and
· the need to act fairly between members of the company.
As set out above in the Strategic Report the Board remains focused on
providing value for shareholders through the long-term success of the Company.
The means by which this is achieved is set out further below.
Likely consequences of any decisions in the long term
The statement from the Chairman, the Chief Executive's Statement and the
Strategic Review set out the Company's strategy. In applying this strategy,
particularly in seeking new projects and developing current ones to deliver
reserves and resource growth, the Board assesses the long-term future of our
projects and investments with a view to maximise shareholder return. The
approach to general strategy and risk management strategy of the group is set
out in the Statement of Compliance as set out in the Group's QCA Code
disclosures.
Interest of employees
The Group has a very limited number of employees and all have direct access to
the Executive Directors on a daily basis and to the Chairman, if necessary.
The Group has a formal Employees' Policy manual which includes processes for
confidential report and whistleblowing.
Need to foster the Company's business relationships with suppliers/customers
and others
The Group continuously interacts with a variety of suppliers and customers
important to its success. The Group strives to strike the right balance
between engagement and communication. Furthermore, the Company works within
the limitations of what can be disclosed to the various stakeholders with
regards to maintaining confidentiality of market and/or commercially sensitive
information. Our suppliers are fundamental to ensuring that the Group can
execute its development and production strategy on time and on budget. Using
quality suppliers ensures that as a business we meet the high standards of
performance that we expect of ourselves and vendor partners. Our management
team work closely with our suppliers, via one-on-one meetings and where
possible supplier site visits and facility reviews to ensure our suppliers are
able to meet our requirements.
Impact of the Company's operations on the community and environment
The Group takes its responsibility within the community and wider environment
seriously. Its approach to its social responsibilities is set out in the
Statement of Compliance with the Group's QCA Code disclosures.
The Company's commitment to maintain a reputation for high standards of
business conduct
The Directors are committed to high standards of business conduct and
governance and have adopted the QCA Code disclosures. Where there is a need to
seek advice on particular issues, the Board will consult with its lawyers and
nominated advisers to ensure that its reputation for good business conduct is
maintained.
The need to act fairly between members of the Company
The Board's approach to shareholder communication is set out in the Statement
of Compliance the Group's QCA Code disclosures. The Company aims to keep
shareholders fully informed of significant developments in the Group's
progress. Information is disseminated through Stock Exchange announcements,
website updates and, where appropriate, video-casts.
During 2025, the Company issued numerous stock exchange announcements on
operational issues. All information is made available to all shareholders at
the same time and no individual shareholder, or group of shareholders, is
given preferential treatment.
Corporate Governance
The Company has adopted the QCA Corporate Governance Code (the "QCA Code"),
which is considered the most appropriate governance framework having regard to
the Company's size, strategy, resources and stage of development. The Board
recognises that effective corporate governance is critical to delivering
long-term shareholder value and is committed to maintaining a governance
framework that supports the Group's strategic transition towards sustainable
energy infrastructure.
The ten QCA Code principles applied by the Company are:
· Establish a strategy and business model which promote long-term
value for shareholders
· Promote a corporate culture that is based on ethical values and
behaviours
· Seek to understand and meet shareholder needs and expectations
· Take into account wider stakeholder interests, including social and
environmental responsibilities
· Embed effective risk management, internal controls and assurance
activities
· Establish and maintain the Board as a well-functioning, balanced
team led by the Chair
· Maintain appropriate governance structures and ensure directors
have the necessary skills and capabilities
· Evaluate board performance based on clear and relevant objectives
· Establish a remuneration policy which supports long-term value
creation
· Communicate how the Company is governed and is performing
Application of the QCA code
The Board adopts a pragmatic and outcomes-based approach to governance,
ensuring that governance arrangements remain proportionate while providing
effective oversight, supporting decision-making and strengthening
accountability. The Company provides disclosures in line with the QCA Code
within this Annual Report and on its website, and will continue to evolve its
governance framework as the Group progresses its strategic transition.
Strategy and business model - QCA Principle One
The Group is an energy company focused on maximising value from its existing
oil and gas portfolio while progressing its transition towards sustainable
energy infrastructure.
The Company's strategy is built around:
disciplined management of legacy producing and development assets; and
advancement of hydrogen storage projects through UK Energy Storage Ltd
This transition reflects the Group's response to the evolving UK energy
landscape and the increasing importance of low-carbon energy solutions.
During the year and post period-end, the Group continued to rationalise its
portfolio, including the disposal of UKOG (GB) Limited, and progressed
strategic initiatives in hydrogen storage.
The Group's risks and mitigation strategies are explained in the Strategic
Report.
Corporate culture - QCA Principle Two
The Board promotes a corporate culture based on integrity, accountability and
transparency. This is supported by established governance frameworks,
including financial controls and regular Board oversight of operational and
financial performance.
The Group operates in a highly regulated environment and is committed to
maintaining high ethical standards across all activities. The Board sets the
tone from the top and monitors adherence through regular reporting, Board
discussions and engagement with management.
Policies supporting this culture include internal controls over financial
reporting and approval processes, which have been reviewed during the year,
with a clear plan in place for further improvements, reflecting the Group's
focus on financial discipline.
Shareholder engagement - QCA Principle Three
The Company maintains regular communication with shareholders through:
· Annual and interim reports
· Regulatory announcements
· Direct engagement with investors
Directors are available at the Annual General Meeting to respond to
shareholder questions and engage with investors.
The Company also maintains a website where key information is available,
including:
· regulatory announcements
· information on the Group's operations and strategy
· details of significant shareholders
The Board recognises the importance of clear and timely communication,
particularly during periods of operational change and financial complexity.
Shareholder feedback is considered by the Board.
Stakeholder responsibilities - QCA Principle Four
The Group engages with a broad range of stakeholders, including regulators
(such as the North Sea Transition Authority), industry partners, local
communities, and employees and contractors.
Engagement is undertaken through ongoing regulatory dialogue, project-specific
consultations, and operational interactions, ensuring that stakeholder
considerations are taken into account in decision-making.
The Board recognises the importance of maintaining strong relationships with
stakeholders, particularly in the context of the Group's transition towards
lower-carbon energy projects, and seeks to ensure that its activities are
conducted responsibly and in compliance with regulatory and environmental
requirements.
Risk management, internal controls and assurance - QCA Principle Five
The Group maintains an established risk management framework, under which
principal risks are identified, assessed and monitored on an ongoing basis.
The Board has overall responsibility for risk management and reviews the
Group's risk register regularly, with input from management.
Climate-related risks have been incorporated into the Group's enterprise risk
management framework, reflecting the Group's transition towards lower-carbon
energy activities. Further details of principal risks and mitigating actions
are set out in the Strategic Report.
Audit committee and financial reporting oversight
The Audit Committee supports the Board in fulfilling its responsibilities for
financial reporting, internal controls and risk management. The Committee's
responsibilities include:
Reviewing the integrity of the financial statements
· Monitoring the effectiveness of internal control systems
· Overseeing the audit process and auditor independence
· Reviewing significant accounting judgements and estimates
· During the year, the Committee focused on key areas of judgement,
including:
· Classification of hydrogen-related expenditure between research and
development and prior period adjustments
· Decommissioning provisions and discount rate assumptions and prior
period adjustments
· Going concern and liquidity assessments
The Committee has considered the findings arising from the audit process and
will oversee the implementation of control improvements identified. The Board
acknowledges the importance of timely, accurate and well-supported financial
information and remains committed to strengthening financial reporting
processes and internal controls.
Board composition and balance - QCA Principle Six
The Board comprises a balance of executive and non-executive Directors,
bringing an appropriate mix of skills, experience and independence to support
the Group's strategy. The Board considers its composition on an ongoing basis
to ensure it remains appropriate as the Group evolves, particularly in the
context of its transition towards hydrogen and clean energy.
The Board meets regularly to consider strategy, operational performance,
financial position and risk, and maintains effective oversight of the Group's
activities. Non-executive Directors provide independent challenge and support
to management in Board discussions and decision-making.
All Directors are subject to re-election in accordance with the Company's
Articles of Association, ensuring accountability to shareholders.
Board skills and governance structures - QCA Principle Seven
The Board possesses a broad and complementary range of skills and experience
relevant to the Group's operations and strategic direction, including oil and
gas operations, energy transition and infrastructure development, finance and
capital markets, and regulatory and governance expertise.
The Board considers that its current composition provides an appropriate
balance of technical, financial and commercial expertise to oversee the
Group's activities and strategic transition. The Board continues to review its
skills and capabilities to ensure it remains aligned with the evolving needs
of the business.
The Group has established appropriate structures to support effective
decision-making, including the Audit Committee, which assists the Board in
overseeing financial reporting, internal controls and risk management. The
Board keeps its governance arrangements under review and adapts them as
necessary to reflect the size and complexity of the Group.
Board effectiveness - QCA Principle Eight
The Board keeps its effectiveness under regular review and considers the need
for formal evaluation processes. The Chair is responsible for ensuring
effective Board operation, including:
· Maintaining constructive and open dialogue
· Ensuring appropriate information flows
· Supporting effective decision-making
· Board processes include:
· A formal schedule of matters reserved for the Board
· Circulation of comprehensive board papers in advance of meetings
· Accurate recording of decisions and tracking of follow-up actions
The Board recognises the importance of continuous improvement and considers
the need for formal evaluation processes, taking into account the size and
stage of development of the Group.
Remuneration - QCA Principle Nine
The Company seeks to ensure that remuneration policies are aligned with the
long-term success of the Group and the creation of shareholder value. The
Board is responsible for determining the remuneration of executive Directors
and ensuring that remuneration structures are appropriate for the size and
stage of development of the Group.
Remuneration structures are designed to:
· attract and retain individuals with the appropriate skills and
experience;
· align management incentives with the Company's strategic
objectives; and
· reflect individual performance, responsibilities and contribution
to the Group.
The Board keeps remuneration arrangements under review to ensure they remain
appropriate in the context of the Group's evolving strategy and financial
position. Further details are provided in the Remuneration Report.
Governance and shareholder communication - QCA Principle Ten
The Company communicates its governance framework and performance to
shareholders through its Annual and Interim Reports, regulatory announcements
and its website.
The Company maintains a dedicated investor relations section on its website,
where key governance information is available in accordance with the QCA Code,
including details of Board composition, governance structures and policies.
The Board is committed to providing clear, balanced and understandable
information to shareholders and ensures that disclosures are reviewed as part
of the financial reporting process. The Board continues to enhance its
disclosures in line with best practice and the evolving needs of shareholders.
The Board will continue to review its governance arrangements and disclosures
to ensure ongoing compliance with the QCA Code and AIM Rule requirements.
Board of Directors
The Board consists of a team of experienced multidisciplinary members who are
committed to delivering shareholder value.
Nicholas Mardon Taylor, Non-Executive Chairman
Nicholas Mardon Taylor served as the Chief Financial Officer of Hurricane
Energy PLC from May 2012 until January 2016. He has worked in the oil industry
for over 35 years, his first involvement in the North Sea being in the early
licensing rounds. He was with Hurricane from 2005 to January 2016 when he was
the Company's first CFO and was subsequently responsible for the Company's
Environmental Management System.
Stephen Sanderson, Chief Executive
Stephen Sanderson joined UK Oil & Gas Plc in September 2014. He was
appointed Executive Chairman and Chief Executive in July 2015 and in August
2018 ceded his role as Executive Chairman as part of improvements in corporate
governance. A highly experienced petroleum geologist, oil industry veteran and
upstream energy business leader, with over 30 years operating experience,
Stephen is a proven oil finder and has been instrumental in the discovery of
more than 12 commercial conventional fields, including the Norwegian
Smorbuk-Midgaard field complex.
Stephen held a variety of senior management roles for ARCO (which was acquired
by BP in 2000), Wintershall AG (a subsidiary of German chemical giant BASF)
and three junior start-ups. He created and ran successful new exploration
businesses in Africa, Europe and South America. He has significant technical
and commercial expertise in the petroleum systems of Africa, the North Sea,
Norway, onshore UK & Europe, South America, the South Atlantic, Middle
East, Asia, India, Australia and the USA. He is a graduate and Associate of
the Royal School of Mines, Imperial College, London, a Fellow of the
Geological Society of London and a member of the American Association of
Petroleum Geologists.
Kris Bone, Chief Technical Officer (Appointed on 1 October 2024)
Kris is a Petroleum and Chemical Engineer with 30 years of international
experience spanning the oil, gas and energy‑transition sectors. He has a
strong track record of leading multidisciplinary technical and operational
teams, delivering complex projects across the UK and key global energy
regions. His expertise covers subsurface and petroleum engineering, drilling,
development and production operations, gas storage, decommissioning and
regulatory governance. Kris is recognised for combining deep technical
capability with strategic leadership, supporting energy organisations as they
navigate the shift toward cleaner, more sustainable and lower‑carbon energy
systems. He holds a BEng in Chemical Engineering from Newcastle University and
an MEng in Petroleum Engineering from Heriot‑Watt University. Kris is a
Chartered Engineer with the Institution of Chemical Engineers.
Allen D Howard, Non-Executive Director
Allen Howard was Senior Vice President of Houston-based Premier Oilfield
Laboratories, having been Chief Operating Officer of well analysis experts
Nutech. Allen also held senior positions with Schlumberger. He holds a degree
in Chemical Engineering from Texas Tech University and an MBA from Mays
Business School in Texas. Allen was appointed as Non-Executive Chairman for
UKOG in August 2018, before taking up his current Executive role at the
beginning of 2022.
Board and Committee membership at the date of approval of this Annual report
Member Board Title Audit Committee Title Remuneration Committee Title
Stephen Sanderson Chief Executive
Allen D Howard Non-Executive Director Member Member
Nicholas Mardon Taylor Non-Executive Chairman Chairman (from 1 October 2024) Chairman (from 1 October 2024)
Kris Bone Executive Director
The Board and its Committees
The Board of the Company consists of two Executive Directors and two
Non-Executive Directors. The Non-Executive Directors are not considered
independent under the QCA Code as they hold options and/or shares in the
Company. However, the Board considers that the Non-Executive Directors are
independent of management under all other measures and are able to exercise
independence of judgement.
The Board is responsible for formulating, reviewing and approving the
Company's strategy, financial activities and operating performance. Day-to-day
management is devolved to the executive directors, who are charged with
consulting the Board on all significant financial and operational matters. The
Board retains ultimate accountability for governance and is responsible for
monitoring the activities of the executive team.
The roles of Chairman and Chief Executive are split in accordance with best
practice. The Chairman has the responsibility of ensuring that the Board
discharges its responsibilities. The Chairman is also responsible for the
leadership and effective working of the Board, for setting the Board agenda,
and ensuring that Directors receive accurate, timely and clear information. No
one individual has unfettered powers of decision.
The Chief Executive has the overall responsibility for creating, planning,
implementing, and integrating the strategic direction of the Company. This
includes responsibility for all components and departments of the business.
The Chief Executive ensures that the organisation's leadership maintains
constant awareness of both the external and internal competitive landscape,
opportunities for expansion, customer base, markets, new industry developments
and standards.
The Board met regularly during the year. Tabulated below is the attendance of
Board Members during the reporting period.
Board Member Meetings attended (out of a total possible)
Nicholas Mardon Taylor 8/8
Stephen Sanderson 8/8
Allen D Howard 8/8
Kris Bone 8/8
Audit Committee
The audit committee consists now of Nicholas Mardon Taylor (Chairman) and
Allen D Howard. The Audit Committee met twice during the year. Kiran Morzaria
resigned on 1 October 2024.
Board member Meetings attended (out of a total possible)
Nicholas Mardon Taylor 2/2
Allen Howard 2/2
The principal duties and responsibilities of the Audit Committee include:
Overseeing the Company's financial reporting disclosure process; this includes
the choice of appropriate accounting policies
Monitoring the Company's internal financial controls and assess their adequacy
Reviewing key estimates, judgements and assumptions applied by management in
preparing published financial statements
Annually assessing the auditor's independence and objectivity
Making recommendations in relation to the appointment, re-appointment and
removal of the company's external auditor
The Audit Committee is responsible for overseeing the integrity of the Group's
financial reporting, the effectiveness of its risk management and internal
control framework, and the performance and independence of the external
auditors. During the year, the Committee met regularly with management to
review key accounting matters, significant judgements and estimates, and to
monitor the robustness of the Company's financial controls.
Significant accounting and reporting matters
In considering the Annual Report and Accounts for the year ended 30 September
2025, the Committee focused on areas involving significant judgement and
estimation, including the Group's ability to continue as a going concern,
impairment assessments, the classification of exploration and evaluation
expenditure, and the accounting treatment of hydrogen storage project costs.
During the year, the Group's decision not to progress the Portland hydrogen
storage project prompted a comprehensive review of costs across its hydrogen
storage and related energy transition project portfolio. This review
identified that certain costs had been recognised as development expenditure
ahead of all of the recognition criteria under IAS 38.57 being met. These
costs primarily related to early-stage technical evaluation, feasibility
studies and project scoping activities, which should have been classified
within the research phase in historic periods and expensed as incurred.
Accordingly, the Group has corrected this misclassification as a prior period
adjustment in accordance with IAS 8. Amounts of approximately £0.2 million
and £0.3 million have been recognised as adjustments to opening retained
earnings at 1 October 2023 and 1 October 2024 respectively.
Furthermore, the Group recognised an impairment charge of approximately £0.92
million in respect of intangible assets in the current year. This primarily
relates to development expenditure associated with projects that are no longer
being progressed, including the Portland project. Further details of the prior
period adjustment are provided in Note 3, and the impairment charge is
disclosed within Note 12 Intangible Assets.
Auditor appointment and independence
PKF Littlejohn LLP were re-appointed as the Group's external auditors for the
FY2025 audit. The Committee is satisfied that PKF Littlejohn have performed
the audit with appropriate rigour and independence. In line with the UK
Corporate Governance Code and the FRC's Ethical Standard, the Committee's
policy is that the external audit will be put out to tender at least every ten
years, with mandatory audit firm rotation after no more than twenty years. The
timing of any future tender will be kept under review to ensure audit quality
and continuity are maintained.
Risk management and internal control
The Committee reviewed the effectiveness of the Group's risk management and
internal control systems during the year. Reports were received from
management on the principal risks facing the business, including funding,
commodity price volatility, regulatory approvals, and project delivery. The
Committee considered the adequacy of mitigating actions in place and was
satisfied that the control framework continued to operate effectively.
Internal and external assurance
Given the Group's current scale, it does not maintain a dedicated internal
audit function. Instead, the Committee receives assurance from management's
monitoring of financial controls and delegated authorities, from the work of
the external auditors. The Committee considered whether the absence of an
internal audit function remained appropriate and concluded that the current
arrangements provide sufficient assurance at this stage of the Group's
development. This position will be kept under review as the Group grows.
The Committee is satisfied that, taken together, these activities provided a
sound basis for the Board's confirmation that the Annual Report and Accounts,
taken as a whole, are fair, balanced and understandable.
Remuneration Committee
The Remuneration Committee consists now of Nicholas Mardon Taylor (Chairman)
and Allen D Howard. The Committee met once during the year. Kiran Morzaria
resigned on 1 October 2024.
Board member Meetings attended (out of a total possible)
Allen D Howard 1/1
Nicholas Mardon Taylor 1/1
The principal duties and responsibilities of the Remuneration Committee
include:
· Setting the remuneration policy for all Executive Directors
· Recommending and monitoring the level and structure of remuneration
for senior management
· Approving the design of, and determining targets for, performance
related pay schemes operated by the company and approve the total annual
payments made under such schemes
· Reviewing the design of all share incentive plans for approval by
the board and shareholders
None of the Committee members have any personal financial interest (other than
as shareholders and option holders), conflicts of interest arising from
cross-directorships or day-to-day involvement in the running of the business.
No director plays a part in any financial decision about his or her own
remuneration.
Internal controls
The Board is responsible for establishing and maintaining the Company's system
of internal controls and reviewing its effectiveness. The procedures that
include financial, operational, health and safety, compliance matters and risk
management are reviewed on an ongoing basis.
The Company's internal control procedures include the following:
· Board approval for all significant projects, including corporate
transactions and major capital projects;
· The Board receives and reviews regular reports covering both the
technical progress of projects and the Company's financial affairs to
facilitate its control;
There is a comprehensive budgeting and planning system for all items of
expenditure with an annual budget approved by the Board;
The Company has in place internal control and risk management systems in
relation to the Company's financial reporting process and the Company's
process for preparing consolidated accounts. These systems include policies
and procedures to ensure that adequate accounting records are maintained, and
transactions are recorded accurately and fairly to permit the preparation of
consolidated financial statements in accordance with UK-Adopted IAS; and
The Audit Committee reviews draft annual and interim reports before
recommending their publication to the Board. The Audit Committee discusses
with the Chief Financial Officer and external auditors the significant
accounting policies, estimates and judgements applied in preparing these
reports.
The internal control system can only provide reasonable and not absolute
assurance against material misstatement or loss. The Board has considered the
need for a separate internal audit function but, bearing in mind the present
size and composition of the Company, does not consider it necessary at the
current time.
UK Bribery Act
UK Oil & Gas Plc has reviewed the appropriate policies and procedures to
ensure compliance with the UK Bribery Act. The Company continues actively to
promote good practice throughout the Company and has initiated a rolling
programme of anti-bribery and corruption training for all relevant employees.
Relations with shareholders
Communications with shareholders are considered important by the Directors.
The primary contact with shareholders, investors and analysts is the Chief
Executive. Other senior management, however, regularly speak to investors and
analysts during the year.
Company circulars and press releases have also been issued throughout the year
for the purpose of keeping investors informed about the Company's progress and
in accordance with AIM regulations.
The Company also maintains a website (www.ukogplc.com) which is regularly
updated and contains a wide range of information about the Company.
Directors' Remuneration Report
This report explains our remuneration policy for Directors and sets out how
decisions regarding Directors' pay for the period under review have been
taken.
Directors' remuneration policy
The Company's policy is to maintain levels of remuneration sufficient to
attract, motivate and retain senior executives.
Executive Director's remuneration currently consists of basic salary,
pensions, annual bonus (based on annually set targets) and long-term
incentives (to reward long term performance).
The Company seeks to strike an appropriate balance between fixed and
performance-related reward so that the total remuneration package is
structured to align a significant proportion to the achievement of performance
targets, reinforcing a clear link between pay and performance. The performance
targets for staff, senior executives and the Executive Directors are each
aligned to the key drivers of the business strategy, thereby creating a strong
alignment of interest between staff, Executive Directors and shareholders.
The Remuneration Committee will continue to review the Company's remuneration
policy and make amendments, as and when necessary, to ensure it remains fit
for purpose and continues to drive high levels of executive performance and
remains both affordable and competitive in the market.
Remit of the Remuneration Committee
The remit of the Remuneration Committee is provided in the Corporate
Governance section.
Share price movements during the year
The share price range during the year was £0.000175 to £0.00035 (2024:
£0.000140 to £0.0035).
Current arrangement in financial year
Executive Directors are employed under rolling contracts with notice periods
of 12 months or less from the Company. Non-Executive Directors are employed
under rolling contracts with notice period of three months, under which they
are not entitled to any pension, benefits or bonuses.
During the years ended 30 September 2025 the Directors occupied the following
Board positions: Nicholas Mardon Taylor (Non-Executive Chairman), Stephen
Sanderson (Chief Executive Officer), Kris Bone (Executive Director, appointed
on 1 October 2024), Allen D Howard (Non-Executive Director), The Directors'
emoluments for the year were as follows:
2025 Fees and Bonuses Pension Benefits Share based payments (*) Total
salaries
£'000
£'000
in Kind
£'000
£'000
£'000
£'000
Stephen Sanderson 236 - 1 6 - 243
Kris Bone 209 - 1 6 - 216
Allen Howard 18 - - - - 18
Nicholas Mardon Taylor 27 - - - - 27
Total 490 - 2 12 - 504
2024 Fees and Bonuses Pension Benefits Share based payments (*) Total
salaries
£'000
£'000
in Kind
£'000
£'000
£'000
£'000
Stephen Sanderson 313 - 1 - - 314
Kiran Morzaria 27 - - - - 27
Allen Howard 62 - - - - 62
Nicholas Mardon Taylor 54 - - - - 54
Total 456 - 1 - - 457
* Share based payments are non-cash remuneration by way of the issue of share
options in the company.
As at 30 September 2025, there were no outstanding long-term incentive awards
in the form of share options held by Directors who served during the period,
as all such awards had expired during the year.
In accordance with IFRS 2, the lapse of these options does not result in a
reversal of previously recognised share-based payment charges, and no further
expense has been recognised in the current period.
As at 30 September 2024, the outstanding long-term incentives are set out in
the table below.
Share options At 1 October 2023 Issued during the year lapsed / exercised during the year At 30 September 2024 Exercise price Date from which exercisable Expiry date
No. million
No. million
No. million
No. million
Stephen Sanderson 25 - (25) - 0.0130 27/09/2020 25/09/2024
Total 25 - (25) -
Share options At 1 October 2023 Issued during the year lapsed / exercised during the year At 30 September 2024 Exercise price Date from which exercisable Expiry date
No. million
No. million
No. million
No. million
Kiran Morzaria 6.5 - (6.5) - 0.0130 27/09/2020 25/09/2024
Total 6.5 - (6.5) -
Share options At 1 October 2023 Issued during the year lapsed / exercised during the year At 30 September 2024 Exercise price Date from which exercisable Expiry date
No. million
No. million
No. million
No. million
Allen Howard 5 - (5) - 0.0130 27/09/2020 25/09/2024
Total 5 - (5) -
Share options At 1 October 2023 Issued during the year lapsed / exercised during the year At 30 September 2024 Exercise price Date from which exercisable Expiry date
No. million
No. million
No. million
No. million
Nicholas Mardon Taylor 4 - (4) - 0.0130 27/09/2020 25/09/2024
Total 4 - (4) -
Report of the Directors
The Directors present their annual report together with the audited
consolidated financial statements of the Group for the year ended
30 September 2025.
Business review and future developments
A review of business activities in the year and future developments is
outlined in the Chief Executive's Statement, the Statement from the Chairman,
and the Operational Review.
Principal activity and business review
The principal activity of the Group is hydrogen storage and exploring for,
appraising and developing oil & gas assets.
Results and dividends
Loss on ordinary activities of the Group amounted to £4,098,000 (2024: loss
of £38,490,000 restated). The Directors do not recommend the payment of a
dividend (2024: £nil). The Company has no plans to adopt a dividend policy in
the immediate future.
Principal risks and uncertainties
Information of the principal risks and uncertainties facing the Group is
included in the Principal Risks and Uncertainties section of the Strategic
Report.
Financial risk management objectives and policies
The Group's principal financial instruments are trade receivables, trade
payables, cash at bank, and borrowings. The main purpose of these financial
instruments is to fund the Group's operations.
It is, and has been throughout the period under review, the Group's policy
that no trading in financial instruments shall be undertaken. The main risk
arising from the Group's financial instruments is liquidity risk. The Board
reviews and agrees policies for managing this risk and this is summarised
below.
Liquidity risk
The Group's objective is to maintain a balance between continuity of funding
and flexibility through the use of equity and its cash resources. Further
details of this are provided in the section "Going concern" below and the
financial statements.
Key Performance Indicators ("KPIs")
KPIs adopted by the Group are detailed in the KPIs section of the Strategic
Report.
Going concern
The accounts have been prepared on a going concern basis.
The Directors note the losses and cash outflows incurred by the Group for the
year ended 30 September 2025. In assessing the Group's ability to continue as
a going concern, the Directors have prepared detailed cash flow forecasts
covering the period to 1 May 2027. These forecasts incorporate assumptions
regarding anticipated production levels and operating costs, expected revenue
streams, and access to external funding. The Board recognises that forecasts
are inherently subject to uncertainty and may be affected by events outside
the Group's control.
At 30 September 2025, the Group was in a net liability position.
Notwithstanding this, the Directors considered the Group's ability to actively
manage its cost base and liabilities, including the timing of payments,
working capital management and the deferral of discretionary expenditure where
appropriate. Subsequent to the year end, during October and November 2025, the
Group successfully raised £5.0 million of funding, materially strengthening
its liquidity position. This funding provides additional headroom to support
ongoing operations and the continued progression of the Group's Clean Power
and hydrogen storage activities.
However, the forecasts remain dependent on a number of key assumptions,
including the timing of future revenue generation, and the availability of
additional funding if required. As a result, these conditions indicate the
existence of a material uncertainty that may cast significant doubt on the
Group's ability to continue as a going concern. Nevertheless, after
considering the Group's cash flow forecasts, the actions available to
management and the post year-end funding raised, the Directors have a
reasonable expectation that the Group will have adequate resources to continue
in operational existence for the foreseeable future.
Accordingly, the financial statements for the year ended 30 September 2025
have been prepared on a going concern basis.
Events after the reporting period
Events after the Reporting Period are outlined in Note 26 to the Financial
Statements.
Suppliers' payment policy
The Group's policy is to agree payment terms with suppliers in advance and to
settle invoices in accordance with those terms. Trade payables at the balance
sheet date comprised amounts due within agreed credit terms, a significant
proportion of which have been settled subsequent to the year end.
Charitable contributions
During the year, the Group made charitable donations amounting to £Nil (2024
- £Nil).
Substantial shareholdings
As at 31 December 2025, the Company had been notified of the following
substantial shareholdings in its ordinary share capital:
Shareholder Shares % Total
Hargreaves Lansdown Asset Mgt (Bristol) 5,819,077,343 15.94 2,933,795,530
Interactive Investor (Manchester) 5,578,437,506 15.28 3,214,513,401
Peel Hunt (London) 3,277,862,687 8.98 823,205,241
Shore Capital Stockbrokers (London) 3,195,125,961 8.75 154,661,040
Halifax Share Dealing (Halifax) 2,603,889,985 7.13 1,448,373,624
MUFG Corporate Markets Trustees (Nominees) Limited (Regional England) 1,824,912,685 5.00 1,824,912,685
IG Markets (London) 1,602,325,862 4.39 433,779,041
AJ Bell Securities (Tunbridge Wells) 1,569,311,762 4.30 943,295,369
Barclays Wealth (London) 1,529,486,653 4.19 794,730,405
Trading 212 (London) 1,318,992,167 3.61 905,435,182
TOTAL 28,319,422,611 77.57 13,476,701,518
Current Board and directors' interests
Nicholas Mardon Taylor Non-Executive Chairman
Stephen Sanderson Chief Executive
Allen D Howard Non-Executive Director
Kris Bone Executive Director
The directors hold options to purchase new ordinary shares in the Company,
details of which are specified in the Remuneration Report. In addition,
Stephen Sanderson holds 12,457,310 ordinary shares in the Company.
Annual General Meeting
Notice of the forthcoming Annual General Meeting will be provided separately.
Statement of directors' responsibilities
The Directors are responsible for preparing the annual report and financial
statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each
financial year. Under that law the Directors have elected to prepare the Group
and Parent Company financial statements in accordance with UK-adopted
international accounting standards in conformity with the requirements of the
Companies Act 2006. Under Company law the Directors must not approve the
financial statements unless they are satisfied that they give a true and fair
view of the state of affairs of the Group and Company and of the profit or
loss of the Group for that period.
In preparing these financial statements, the Directors are required to:
· Select suitable accounting policies and then apply them
consistently;
· Make judgements and estimates that are reasonable and prudent;
· Prepare the financial statements on the going concern basis unless
it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Group and
Company and enable them to ensure that the financial statements comply with
the Companies Act 2006. They are also responsible for safeguarding the assets
of the Group and Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of the financial statements may differ from legislation in other
jurisdictions. The Company's website is maintained in accordance with AIM Rule
26.
Statement as to disclosure of information to the auditor
As at the date of this report the serving directors confirm that:
So far as each Director is aware, there is no relevant audit information of
which the Group's auditors are unaware, and
They have taken all the steps that they ought to have taken as Directors in
order to make themselves aware of any relevant audit information and to
establish that the Group's auditor are aware of that information.
On behalf of the board
Stephen Sanderson
Director
1 May 2026
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF UK OIL & GAS PLC
Opinion
We have audited the financial statements of UK Oil & Gas Plc (the 'parent
company') and its subsidiaries (the 'group') for the year ended 30 September
2025 which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated and Parent company Statement of Financial Position, the
Consolidated and Parent company Statement of Changes in Equity, the
Consolidated and Parent company Statement of Cash Flows and notes to the
financial statements, including significant accounting policies. The financial
reporting framework that has been applied in their preparation is applicable
law and UK-adopted international accounting standards and as regards the
parent company financial, as applied in accordance with the provisions of the
Companies Act 2006.
In our opinion:
The financial statements give a true and fair view of the state of the group
and the parent company's affairs as at 30 September 2025 and of the group's
loss for the year then ended;
the group financial statements have been properly prepared in accordance with
UK-adopted international accounting standards;
the parent company financial statements have been properly prepared in
accordance with UK-adopted international accounting standards; and
the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the Auditor's responsibilities for the
audit of the financial statements section of our report. We are independent of
the group and parent company in accordance with the ethical requirements that
are relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 in the financial statements, which describes the
uncertainty surrounding a number of key assumptions including the future
revenue generation and availability of future funding if required. The group
incurred a net loss of £4.09m during the year ended 30 September 2025 and the
group is in a £5.68m net liability position. As stated in note 2, these
events or conditions, along with the other matters as set forth in note 2,
indicate that a material uncertainty exists that may cast significant doubt on
the group's ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
In auditing the financial statements, we have concluded that the directors'
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate. Our evaluation of the directors'
assessment of the group and parent company's ability to continue to adopt the
going concern basis of accounting included:
a review of budgets and cash flow forecasts covering a period of at least 12
months from the date of approval of the financial statements,
challenging of management on the basis of preparation and assumptions used
within the forecasts and obtaining support for input, together with
ascertaining the most recent cash position of the group and company,
Comparing prior year forecast with actual results to assess historical
accuracy;
Performing sensitivity analysis on the forecasts to assess the impact of
changes to key inputs on the Group's ability to operate in the next 12 months
after approval of the financial statements;
Obtaining copies of the bank statements as close to the date of sign off and
reconcile to the forecasts provided;
Performing an assessment of management's identified cash inflows and outflows
in the period to assess likelihood of being able to obtain the funds and meet
their payment obligations; and
identifying any subsequent events impacting the going concern assessment.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Our application of materiality
For the purposes of determining whether the financial statements are free from
material misstatement, we define materiality as a magnitude of misstatement
that makes it probable that the economic decisions of a reasonable
knowledgeable person, relying on the financial statements, would be charged or
influenced. We also determine a level of performance materiality which we use
to assess the extent of testing needed to reduce to an appropriately low level
the probability that the aggregate of uncorrected and undetected misstatements
exceed materiality for the financial statements as a whole.
Materiality for the group financial statements was set at £91,000 (2024:
£75,000). This was calculated based on 2% of total expenses (2024: 2% of
gross assets). Total expenses were used as the benchmark for the basis of
materiality being the key area of relevance to stakeholders in assessing the
financial performance of the group in its early years of production,
exploration and hydrogen storage. The previous benchmark is no longer
considered appropriate due to the significant impairments processed on the
assets and the group moving away from oil and gas exploration. Expenses is
considered the most appropriate benchmark and these are where most of the
costs being incurred by the group are taking place whilst this transition is
taking place. The basis for the calculation of materiality for the Parent
company financial statements was 2% of total expenses being £51,000 (2024:
£48,000 3.5% of adjusted loss before tax). The key driver for users of the
Parent's financial statements are the expenses being incurred.
We also determine a level of performance materiality which we use to assess
the extent of testing needed to reduce to an appropriately low level
probability that the aggregate of uncorrected and undetected misstatements
exceeds materiality for the financial statements as a whole. Performance
materiality for the group and Parent company was set at £59,000 (2024:
£48,000) and £33,000 (2024: £30,000) respectively, being 65% of materiality
for the financial statements as a whole.
We agreed to report to those charged with governance all corrected and
uncorrected misstatements we identified through our audit with a value in
excess of £4,550 (2024: £3,500) for group and £2,550 (2024: £2,400) for
Parent company. We also agreed to report any other audit misstatements below
that threshold that we believe warranted reporting on qualitative grounds.
Our approach to the audit
In designing our audit approach, we determined materiality and assessed risk
of material misstatement in the financial statements. In particular, we looked
at areas involving significant accounting estimates and judgements made by
management, including, the carrying amount and valuation of intangible assets,
the carrying value and recoverability of investments and intra-group
receivables. Procedures were then performed to address the risks identified
and for the most significant assessed risks of misstatement, the procedures
performed are outlined below in the key audit matters section of this report.
We re-assessed the risks throughout the audit process and concluded that the
scope remained in line with that determined at the planning stage of the
audit.
An audit was performed on the financial information of the group's full and
specific components which, for the year ended 31 December 2025.
As a result of our materiality and risk assessments, we determined which
components required a full scope audit of their financial information with
consideration to their significance to the group, based on their contribution
to overall expenses, the presence of material classes of transactions and
account balances, and other risk characteristics. On this basis, two
components (2024: two components) required a full scope audit of their
financial information. Five (2024: five) components were subject to a specific
scope audit whereby procedures were performed on one or more classes of
transactions, account balances or disclosures. The remaining three (2024:
three) components were not in scope due to the nature and conditions present
in each component, and lack of material classes of transactions, account
balances, and disclosures.
We did not rely on the work of any component auditors.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy, the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter
described in the Material uncertainty related to going concern section we
have determined the matters described below to be the key audit matters to be
communicated in our report.
Key Audit Matter How our scope addressed this matter
Carrying value of the development assets (Note 12)
The group accounts for development assets in accordance with the requirements Our work in this area included:
of International Accounting Standard 38: Intangible Assets. Expenditure on
research activities are recognised as an expense in the period in which it is Vouching a sample of additions in the period to supporting documentation and
incurred. Development expenditure is capitalised only when it meets the ensuring they have been capitalised in line with the requirements of IAS 38;
recognition criteria under IAS 38, including the demonstration of technical
feasibility, intention and ability to complete the asset, and availability of Reviewing management's assessment of costs capitalised and assessing these
resources to do so. There is a risk that development costs are incorrectly against the relevant IAS 38 criteria;
valued or need to be impaired.
Reviewing management's impairment assessment and performing an independent
This risk is classed as a Key Audit Matter given that management's assessment assessment to ascertain whether indicators of impairment exist under IAS36;
on the treatment and classification, valuation of the recoverable amount and and
review for indicators of impairment may be subject to significant judgements
and estimates and is one of the most significant balances on the statement of Assessing whether the disclosures made in the financial statements in relation
financial position. to critical accounting estimates and judgments are adequate and in line with
our understanding of the group and its activities.
Carrying value of investments and recoverability of intercompany balances
(Parent company) (Notes 12, 13 and 14)
The investments held by UKOG Plc in its subsidiary entities are valued at Our work in this area included:
£197k at the year end. At the end of each year the Directors carry out an
impairment review of the Company's investment in subsidiaries by applying the
same assumptions and considerations used for the impairment review of
producing assets in the case of UKOG (GB) Limited and impairment review of Agreeing investment holdings to supporting documentation to support the
development assets in UK Energy to assess their net asset value and ultimate ownership as at year end;
recoverability of investments and intercompany balances.
Obtaining loan agreements and verifying repayment terms where applicable;
There is a risk that these investments in subsidiaries are not recorded
accurately as there have been historic impairments of investments. Reviewing impairment assessments for indicators of impairment and reviewing
the net asset positions of any counterparties that have not yet paid to assess
There is a risk of material misstatement around the recoverability of their ability to repay balances outstanding; and
significant related party loan balances.
Reviewing the disclosures and confirming they are in line with the accounting
framework.
This risk is classed as a KAM given that management's valuation and
classification of investments are subject to significant judgements and
estimates.
Other information
The other information comprises the information included in the annual report,
other than the financial statements and our auditor's report thereon. The
directors are responsible for the other information contained within the
annual report. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the course of the audit, or otherwise
appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have performed, we conclude
that there is a material misstatement of this other information, we are
required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
the information given in the strategic report and the directors' report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the group and its
environment obtained in the course of the audit, we have not identified
material misstatements in the strategic report or the directors' report.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
· adequate accounting records have not been kept, or returns
adequate for our audit have not been received from branches not visited by us;
or
· the financial statements are not in agreement with the accounting
records and returns; or
· certain disclosures of directors' remuneration specified by law
are not made; or
· we have not received all the information and explanations we
require for our audit.
Responsibilities of directors
As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group's ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the group or to
cease operations, or have no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
· We obtained an understanding of the group and the sector in which
it operates to identify laws and regulations that could reasonably be expected
to have a direct effect on the financial statements. We obtained our
understanding in this regard through discussions with management, industry
research and application of cumulative audit knowledge and experience of the
sector.
· We determined the principal laws and regulations relevant to the
group in this regard to be those arising from:
o Companies Act 2006
o UK adopted International Accounting Standards
o Employment Law
o Bribery Act 2010
o Tax legislation
o Health and Safety legislation
o Environmental law
· We designed our audit procedures to ensure the audit team
considered whether there were any indications of non-compliance by the group
with those laws and regulations. These procedures included, but were not
limited to:
o enquiries of management
o review of RNS announcements
o review of board and other committee minutes
o review of legal correspondence
· We also identified the risks of material misstatement of the
financial statements due to fraud. We considered, in addition to the
non-rebuttable presumption of a risk of fraud arising from management override
of controls, that the potential for management bias was identified in relation
to revenue recognition, the impairment of the carrying value of development
assets and investments in subsidiaries. We addressed this by challenging the
assumptions and judgements made by management when auditing them. We did not
identify any significant fraud risks.
· As in all of our audits, we addressed the risk of fraud arising
from management override of controls by performing audit procedures which
included, but were not limited to: the testing of journals; reviewing
accounting estimates for evidence of bias; and evaluating the business
rationale of any significant transactions that are unusual or outside the
normal course of business.
Because of the inherent limitations of an audit, there is a risk that we will
not detect all irregularities, including those leading to a material
misstatement in the financial statements or non-compliance with regulation.
This risk increases the more that compliance with a law or regulation is
removed from the events and transactions reflected in the financial
statements, as we will be less likely to become aware of instances of
non-compliance. The risk is also greater regarding irregularities occurring
due to fraud rather than error, as fraud involves intentional concealment,
forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council's website at:
www.frc.org.uk/auditorsresponsibilities
(http://www.frc.org.uk/auditorsresponsibilities) . This description forms part
of our auditor's report.
Use of our report
This report is made solely to the group's members, as a body, in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the group's members those matters we are
required to state to them in an auditor's report and for no other purpose.
To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone, other than the group and the group's members as a
body, for our audit work, for this report, or for the opinions we have formed.
Daniel Hutson (Senior Statutory Auditor) 30 Churchill Place
For and on behalf of PKF Littlejohn LLP Canary Wharf
Statutory Auditor London E14 5RE
Financial Statements
Consolidated statement of comprehensive income
for year ended 30 September 2025
Notes 30 Sep 2025 30 Sep 2024
£'000
(restated)*
£'000
REVENUE 7 432 1,110
Cost of sales
Depletion, Depreciation and Amortisation (29) (387)
Other Cost of Sales (423) (912)
Gross loss (20) (189)
Operating expenses
Administrative expenses (2,636) (1,716)
Impairment of oil and gas assets 13 (121) (3,603)
Impairment of exploration and evaluation assets 12 (227) (32,544)
Impairment of development assets 12 (920) (266)
Other income 29 -
Foreign exchange gain - 1
Operating loss 6 (3,896) (38,318)
Net finance cost 9 (202) (172)
Loss before taxation (4,098) (38,490)
Taxation 10 - -
Retained loss for the year (4,098) (38,490)
Retained loss attributable to
Equity holders of the Parent (3,757) (37,750)
Non-Controlling Interests (341) (739)
Total Comprehensive Loss (4,098) (38,490)
There are no other comprehensive income or expenses during the two reported
periods to disclose.
All operations are continuing.
Note Pence Pence (restated)
Earnings per share
Basic and diluted 11 (0.043) (0.87)
The accompanying accounting policies and notes form an integral part of these
financial statements.
* The comparative information has been restated. Details of the prior period
restatement are set out in Note 3.
Consolidated statement of financial position
as at 30 September 2025
Notes 30 Sep 2025 (Restated)* (Restated)*
£'000
30 Sep 2024 30 Sep 2023
£'000
£'000
ASSETS
Non-current assets
Exploration and evaluation assets 12 - - 31,704
Development assets 12 335 999 1,266
Oil & Gas properties 13 - 693 2,276
Property, Plant & Equipment 13 2 13 1,439
Total non-current assets 337 1,705 36,685
Current assets
Assets held for sale 25 601 - -
Inventory 15 - 2 18
Trade and other receivables 16 166 614 754
Cash and cash equivalents 17 32 1,039 1,868
Total current assets 799 1,655 2,640
Total assets 1,136 3,361 39,325
LIABILITIES
Current liabilities
Liabilities associated with assets held for sale 25 (201) - -
Trade and other payables 18 (1,569) (1,268) (635)
Borrowings 19 (3,462) (3,310) (4,784)
Total current liabilities (5,231) (4,578) (5,419)
Non-current Liabilities
Provisions 20 (1,591) (1,254) (1,451)
Total non-current liabilities (1,591) (1,254) (1,451)
Total liabilities (6,822) (5,832) (6,869)
Net (liabilities) / assets (5,684) (2,471) 32,456
Equity
Share capital 21 14,853 14,846 13,808
Share premium account 114,643 113,766 110,915
Own shares held in trust (326) (326) -
Share based payment and other reserve 22 - 82 2,039
Accumulated losses (132,453) (128,778) (92,984)
(3,283) (410) 33,778
Non-controlling interest (2,401) (2,061) (1,322)
Total shareholders' equity (5,684) (2,471) 32,456
The accompanying accounting policies and notes form an integral part of these
financial statements. These financial statements were approved by the Board of
Directors on 1 May 2026 and are signed on its behalf by:
Stephen Sanderson
Allen Howard
Director
Director
* The comparative information has been restated. Details of the prior period
restatement are set out in Note 3.
Company statement of financial position
as at 30 September 2025
Notes 30 Sep 2025 (Restated)* (Restated)*
£'000
30 Sep 2024 30 Sep 2023
£'000
£'000
ASSETS
Non-current assets
Exploration and evaluation assets - - 527
Development assets 12 152 353 490
Investment in subsidiary companies 14 197 197 26,242
Property, Plant and Equipment 13 2 5 1,412
Total non-current assets 351 556 28,671
Current assets
Trade and other receivables 16 407 617 172
Loans to subsidiary companies 16 1,464 1,282 13,157
Cash and cash equivalents 17 15 751 497
Total current assets 1,886 2,649 13,826
TOTAL ASSETS 2,237 3,205 42,497
LIABILITIES
Current liabilities
Loans from subsidiary companies 18 (410) (264) -
Trade and other payables 18 (1,166) (657) (254)
Borrowings - - (1,540)
Total Current Liabilities (1,576) (922) (1,794)
TOTAL LIABILITIES (1,576) (922) (1,794)
Net Assets 661 2,283 40,703
Shareholders' Equity
Share capital 21 14,853 14,846 13,808
Share premium account 114,643 113,766 110,915
Share based payment and other reserves - 82 2,039
Accumulated losses (128,834) (126,411) (86,059)
Total shareholders' equity 661 2,283 40,703
As permitted by section 408 of the Companies Act 2006, the profit and loss
account of the parent company has not been separately presented in these
accounts. The parent company loss for the year was £2,505,000 (2024: loss
£42,309,000).
These financial statements were approved by the Board of Directors on 1 May
2026 and are signed on its behalf by:
Stephen Sanderson Allen Howard
Director
Director
Registered number: 052126625
The accompanying accounting policies and notes form an integral part of these
financial statements.
* The comparative information has been restated. Details of the prior period
restatement are set out in Note 3.
Consolidated statement of changes in equity
for the year ended 30 September 2025
Share capital Share premium Share based payment reserve Own shares held in trust Accumulated losses Total Non-controlling Interests Total
£'000
£'000
£'000
£'000
£'000
£'000
£'000
Balance at 30 September 2023 (as previously stated) 13,808 110,915 2,039 - (92,753) 34,009 (1,322) 32,687
Prior period adjustment* (231) (231) (231)
Balance at 30 September 2023 (restated) 13,808 110,915 2,039 - (92,984) 33,778 (1,322) 32,456
Loss for the year - - - - (37,750) (37,750) (739) (38,490)
(restated)
Total comprehensive income (restated) - - - - (37,750) (37,750) (739) (38,490)
Issue of shares 682 1,967 (326) - 2,324 - 2,324
Share options expiry - - (1,957) - 1,957 - - -
Loan conversion 356 884 - - - 1,240 - 1,240
Total transactions with owners 1,038 2,852 (1,957) (326) 1,957 3,564 - 3,564
Balance at 30 September 2024 (restated) 14,846 113,766 82 (326) (128,778) (410) (2,061) (2,471)
Loss for the year - - - - (3,757) (3,757) (341) (4,098)
Total comprehensive income - - - - (3,757) (3,757) (341) (4,098)
Issue of shares 7 877 - - - 884 - 884
Warrants expired - - (82) - 82 - - -
Total transactions with owners 7 877 (82) - 82 884 - 884
Balance at 30 September 2025 14,853 114,643 - (326) (132,453) (3,283) (2,401) (5,684)
* The comparative information has been restated. Details of the prior period
restatement are set out in Note 3.
Company statement of changes in equity
for the year ended 30 September 2025
Share capital Share premium Share based payment reserve Accumulated losses Total
£'000
£'000
£'000
£'000
£'000
Balance at 30 September 2023 (as previously stated) 13,808 110,915 2,039 (85,910) 40,852
Prior period adjustment - - - (149) (149)
Balance at 30 September 2023 (restated) 13,808 110,915 2,039 (86,059) 40,703
Loss for the year - - - (42,309) (42,309)
(restated)
Total comprehensive income (restated) - - - (42,309) (42,309)
Issue of shares 682 1,967 - - 2,649
Loan conversion 356 884 - - 1,240
Share options expired - - (1,957) 1,957 -
Total transactions with owners 1,038 2,851 (1,957) 1,957 3,889
Balance at 30 September 2024 (restated) 14,846 113,766 82 (126,411) 2,283
Loss for the year - - - (2,505) (2,505)
Total comprehensive income - - - (2,505) (2,505)
Issue of shares 7 877 - - 884
Shares held in trust - - - - -
Warrants expired (82) 82 -
Total transactions with owners 7 877 (82) 82 884
Balance at 30 September 2025 14,853 114,643 - (128,834) 661
* The comparative information has been restated. Details of the prior period
restatement are set out in Note 3.
Consolidated statement of cash flow
for the year ended 30 September 2025
2025 (Restated)*
£'000
2024
£'000
Cash flows from operating activities
Loss before tax (4,098) (38,490)
Impairment of exploration and evaluation assets 227 32,544
Depletion & impairment of oil and gas assets 150 3,990
Impairment of development assets 920 266
Movement in decommissioning provision (Note 20) 449 (1,119)
Inventories - 16
Decrease in Trade & other receivables 425 140
Increase in Trade & other payables 340 633
Finance costs 202 172
Adjustment for non-cash operating income - 13
Net cash outflow from operating activities (1,386) (1,835)
Cash flows from investing activities
Expenditures on exploration & evaluation and development assets (483) (840)
Expenditures on oil & gas properties (9) (61)
Expenditures on plant, property & equipment (7) (2)
Net cash outflow from investing activities (499) (903)
Cash flows from financing activities
Proceeds from issue of share capital 884 2,342
Repayment of convertible loan - (330)
Repayment of shareholders loan - (103)
Net cash inflow from financing activities 884 1,909
Net change in cash and cash equivalents (1,001) (829)
Cash and cash equivalents at beginning of the period 1,039 1,868
Cash and cash equivalents at end of the period 38** 1,039
* The comparative information has been restated. Details of the prior period
restatement are set out in Note 3.
** Includes £6k of cash balances classified within assets held for sale (see
Note 25).
Company statement of cash flow
for the year ended 30 September 2025
2025 (Restated)*
£'000
2024
£'000
Cash flows from operating activities
Loss before tax (2,505) (42,309)
Depletion & impairment 551 40,214
E&E impairment 195 788
Decrease in trade & other receivables 210 (143)
Increase in trade & other payables 506 404
Interest income - (903)
Adjustment for non-operating income (13) 1
Net cash outflow from operating activities (1,056) (1,948)
Cash flows from investing activities
Expenditure on E&E and development assets (350) (261)
Expenditures on property, plant & equipment - (2)
Loan (to) / from subsidiaries (213) 484
Net cash (outflow)/inflow from investing activities (563) 221
Cash flows from financing activities
Proceeds from issue of share capital 884 2,342
Repayment of convertible loan - (330)
Loan transaction fees (30)
Net cash inflow from financing activities 884 1,982
Net change in cash and cash equivalents (736) 254
Cash and cash equivalents at beginning of the period 751 497
Cash and cash equivalents at end of the period 15 751
* The comparative information has been restated. Details of the prior period
restatement are set out in Note 3.
1. Corporate information
The consolidated financial statements of UK Oil & Gas Plc (the Company)
and its subsidiaries (collectively, the Group), for the year ended 30
September 2025 were authorised for issue by the directors on 1 May 2026. UK
Oil & Gas Plc (the Company & parent) is a public limited company
incorporated in England and Wales under the UK Companies Act and listed on the
Alternative Investment Market (AIM). The registered office is located at The
Broadgate Tower, 20 Primrose Street, London EC2A 2EW.
The Group is engaged in oil production and oil & gas exploration and
evaluation (see Note 5) and salt cavern hydrogen storage projects in South
Dorset and East Yorkshire. Information on the Group's structure is provided
in Note 14 and information on other related parties is provided in Note 27.
2. Principal accounting policies
Basis of preparation
The consolidated financial statements of the UK Oil & Gas Plc (the
Company) and subsidiaries (the Group) have been prepared in accordance with
UK- Adopted International Accounting Standards in conformity with the
requirements of the Companies Act 2006 as they apply to the Group for the year
ended 30 September 2025.
The accounting policies have been applied consistently throughout the
preparation of these financial statements, the financial report is presented
in Pound Sterling (£) and all values are rounded to the nearest thousand
pounds (£'000) unless otherwise stated. The consolidated financial statements
provide comparative information in respect of the previous period.
Subsidiary undertakings exempt from audit
UK Oil & Gas Plc has guaranteed the liabilities of the subsidiaries listed
below under section 479A of the Companies Act 2006 in respect of the year
ended 30 September 2025.
· UK Energy Storage Ltd - 14108327
· UKOG (234) Ltd - 07055133
· UKOG (GB) Limited - 04050227
· UKOG (137/246) Holdings Ltd - 09010542
· UKOG (137/246) Ltd - 06807023
· UK Oil & Gas Investments Ltd - 11252712
· UKOG (Turkey) Ltd - 10212262
· UK Geothermal Ltd - 13386906
New and amended standards and interpretations
There is no material impact on the financial statements following the adoption
of new standards and interpretations.
New and amended standards, and interpretations issued and effective for the financial year beginning 1 October 2024
There were no new standards, amendments or interpretations effective for the
first time for periods beginning on or after 1 October 2024 that had a
material effect on the Group or Company financial statements.
New standards, amendments and interpretations in issue but not yet effective
At the date of approval of these financial statements for the year ended 30
September 2025, the following standards and amendments had been issued by the
International Accounting Standards Board ("IASB") but were not yet effective
for the period and have not been early adopted by the Group:
· Amendments to IFRS 9 and IFRS 7 Financial Instruments:
Classification and Measurement
(effective for annual periods beginning on or after 1 January 2026).
These amendments modify certain requirements relating to the classification,
derecognition, presentation and disclosure of financial instruments.
· IFRS 18 Presentation and Disclosure in Financial Statements
(effective for annual periods beginning on or after 1 January 2027).
This new standard will replace IAS 1 and introduces revised presentation and
disclosure requirements, including new defined subtotals in the statement of
profit or loss.
· IFRS 19 Subsidiaries without Public Accountability: Disclosures
(effective for annual periods beginning on or after 1 January 2027).
This standard permits eligible subsidiaries to apply reduced disclosure
requirements while continuing to apply full IFRS recognition and measurement
principles.
The Directors do not expect the adoption of these standards and amendments to
have a material impact on the Group's consolidated financial statements,
although additional disclosures may be required in future periods.
(a) Going concern
The accounts have been prepared on a going concern basis.
The Directors note the losses and cash outflows incurred by the Group for the
year ended 30 September 2025. In assessing the Group's ability to continue as
a going concern, the Directors have prepared detailed cash flow forecasts
covering the period to 1 May 2027. These forecasts incorporate assumptions
regarding anticipated production levels and operating costs, expected revenue
streams, and access to external funding. The Board recognises that forecasts
are inherently subject to uncertainty and may be affected by events outside
the Group's control.
At 30 September 2025, the Group was in a net liability position.
Notwithstanding this, the Directors considered the Group's ability to actively
manage its cost base and liabilities, including the timing of payments,
working capital management and the deferral of discretionary expenditure where
appropriate. Subsequent to the year end, during October and November 2025, the
Group successfully raised £5.0 million of funding, materially strengthening
its liquidity position. This funding provides additional headroom to support
ongoing operations and the continued progression of the Group's Clean Power
and hydrogen storage activities.
However, the forecasts remain dependent on a number of key assumptions,
including the timing of future revenue generation, and the availability of
additional funding if required. As a result, these conditions indicate the
existence of a material uncertainty that may cast significant doubt on the
Group's ability to continue as a going concern. Nevertheless, after
considering the Group's cash flow forecasts, the actions available to
management and the post year-end funding raised, the Directors have a
reasonable expectation that the Group will have adequate resources to continue
in operational existence for the foreseeable future.
Accordingly, the financial statements for the year ended 30 September 2025
have been prepared on a going concern basis.
(b) Basis of consolidation
Subsidiaries are all entities (including structured entities) over which the
Group has control. The Group controls an entity when the Group is exposed to,
or has rights to, variable returns from its involvement with the entity and
has the ability to affect those returns through its power over the entity.
Subsidiaries are fully consolidated from the date on which control is
transferred to the Group. They are deconsolidated from the date that control
ceases. All intercompany transactions and balances between Group companies,
including unrealised profits arising from them, are eliminated in full.
At 30 September 2025, the Group comprised the Company and entities controlled
by UK Oil & Gas Plc (its subsidiaries) (Note 14).
(c) Business combinations
The acquisition method of accounting is used to account for all business
combinations, regardless of whether equity instruments or other assets are
acquired. The consideration transferred for the acquisition of a subsidiary
comprises the:
· fair values of the assets transferred
· liabilities incurred to the former owners of the acquired
business
· equity interests issued by the group
· fair value of any asset or liability resulting from a contingent
consideration arrangement, and
· fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are, with limited exceptions, measured
initially at their fair values at the acquisition date. The group recognises
any non-controlling interest in the acquired entity on an
acquisition-by-acquisition basis either at fair value or at the
non-controlling interest's proportionate share of the acquired entity's net
identifiable assets. Acquisition-related costs are expensed as incurred.
(d) Joint arrangements
Some of the Group's licence interests are held jointly with others under
arrangements whereby unincorporated and jointly controlled ventures are used
to explore, evaluate and ultimately develop and produce from its oil & gas
interests. The Group's share of assets, liabilities, income and expenditure of
these joint operations, have been classified in the appropriate balance sheet
and income statement headings, except where its share of such amounts remain
the responsibility of another party in accordance with the terms of carried
interests.
When the Group, acting as an operator or manager of a joint arrangement,
receives reimbursement of direct costs recharged to the joint arrangement,
such recharges represent reimbursements of costs that the operator incurred as
an agent for the joint arrangement and therefore have no effect on profit or
loss.
(e) Revenue
Revenue comprises the invoiced value of goods and services supplied by the
Group, excluding value added tax and trade discounts. Revenue is recognised
when control passes to the customer and there is no unfulfilled obligation
that could affect the customer's acceptance of the goods. In the case of oil
and petroleum products, this generally occurs when the product is physically
transferred into a vessel, pipe or other delivery mechanism.
Revenue from the production of oil, from fields in which the Group has an
interest with other producers, is recognised based on the Group's working
interest and the terms of the relevant production sharing contracts.
Differences between oil lifted and sold and the Group's share of production
are not significant.
(f) Intangible exploration and evaluation assets
The Group accounts for exploration and evaluation costs in accordance with the
requirements of IFRS 6 Exploration for and Evaluation of Mineral Resources as
follows:
· Pre-licence costs (costs incurred prior to obtaining the legal
rights to explore an area) are expensed immediately to the Income Statement.
· Exploration licence and leasehold land and property acquisition
costs are capitalised in intangible assets.
· Licence costs paid in connection with a right to explore in an
existing exploration area are capitalised and amortised over the term of the
permit.
· Costs directly associated with an exploration well are
capitalised as exploration and evaluation intangible assets until the drilling
of the well is complete and the results have been evaluated. These costs
include directly attributable employee remuneration, materials and
consumables, drilling (including coring and sampling), evaluation of technical
feasibility and commercial viability (including appraisal drilling and
production testing).
Exploration and evaluation assets are assessed for impairment at each
reporting date, before reclassification and whenever facts and circumstances
suggest that they may be impaired. If no future activity is planned, the
licence has been relinquished or has expired, or where development is likely
to proceed but there are indications that the exploration and evaluation asset
costs are unlikely to be recovered in full either by development or through
sale, the carrying value of the asset is written off to the Income Statement.
(g) Property, plant and equipment - oil & gas properties
Oil & gas properties are stated at cost, less accumulated depreciation and
accumulated impairment losses.
The initial cost of an asset comprises its purchase price or construction
cost, any costs directly attributable to bringing the asset into operation,
the initial estimate of the decommissioning obligation and, for qualifying
assets (where relevant), borrowing costs. The purchase price or construction
cost is the aggregate amount paid and the fair value of any other
consideration given to acquire the asset. The capitalised value of any
associated finance lease is also included within property, plant and
equipment.
Oil & gas properties are depreciated/amortised on a unit-of-production
basis over the total proved developed and undeveloped reserves of the field
concerned. The unit-of-production rate calculation for the
depreciation/amortisation of field development costs takes into account
expenditures incurred to date, together with sanctioned future development
expenditure.
The Group's interests in oil & gas properties are assessed for indicators
of impairment including events or changes in circumstances which indicate that
the carrying value of an asset may not be recoverable. Any impairment in value
is charged to the Income Statement.
Other property, plant and equipment
Other property, plant and equipment is stated at cost to the Group less
accumulated depreciation. These assets are generally depreciated on a
straight-line basis over their estimated useful lives, depending on the type
of asset.
Decommissioning assets
A decommissioning asset is recognised in the appropriate category of the
Group's non-current assets (intangible exploration and evaluation assets and
property, plant and equipment) depending on the underlying accounting
treatment for the operations or asset leading to the associated
decommissioning provision. The asset is assessed for impairment as necessary
and otherwise depleted on a straight-line basis over the estimated period to
future removal of production facilities or site restoration.
(h) Intangible assets
Intangible assets are recognised at cost less accumulated amortisation and
impairment losses.
The Group's hydrogen storage projects are currently in the development phase
and are not amortised until the assets are available for use.
Development expenditure is capitalised as an intangible asset only when the
criteria set out in IAS 38.57 are met.
· Technical feasibility of completing the asset
· Intention to complete and use or sell the asset
· Ability to use or sell the asset
· Probable future economic benefits
· Availability of adequate technical, financial and other resources
· Ability to reliably measure the expenditure attributable to the
asset
Where these criteria are not fully satisfied, costs continue to be expensed as
incurred.
Intangible assets with finite useful lives are amortised on a straight-line
basis over their estimated useful lives and are assessed for impairment
whenever there is an indication that the carrying amount may not be
recoverable.
Where management determines that an intangible asset has an indefinite useful
life, the asset is not amortised but is tested annually for impairment, or
more frequently if indicators of impairment arise.
(i) Decommissioning provisions
A provision for decommissioning is recognised where a liability for the
removal of production facilities or site restoration exists. Provisions are
measured at the present value of the amount expected to be required to settle
the obligation using a pre-tax rate that reflects current market assessments
of the time value of money and the risks specific to the obligation. The
increase in the provision due to the passage of time is recognised as interest
expense.
(j) Segmental information
An operating segment is a distinguishable component of the Group that is
involved in oil production, oil exploration or related activities, within a
particular economic environment, which is subject to risks and rewards that
are different from those of other segments.
Operating segments are reported in a manner consistent with internal reporting
provided to the chief operating decision-maker. The chief operating
decision-maker, who is responsible for allocating resources and assessing
performance of the operating segments, has been identified as the Board of
Directors of the Company.
(k) Financial instruments
Financial assets
Financial assets are divided into the following categories: loans and
receivables and available-for-sale financial assets. Financial assets are
assigned to the different categories by management on initial recognition,
depending on the purpose for which they were acquired, and are recognised when
the Group becomes party to contractual arrangements. Both loans and
receivables and available for sale financial assets are initially recorded at
fair value.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. Trade
receivables, most other receivables and cash and cash equivalents fall into
this category of financial assets. Loans and receivables are measured
subsequent to initial recognition at amortised cost using the effective
interest method, less provision for impairment. Any change in their value
through impairment or reversal of impairment is recognised in the income
statement.
Cash and cash equivalents comprise cash on hand and short-term deposits. Any
interest earned is classified as interest income within finance income.
A financial asset is derecognised only where the contractual rights to the
cash flows from the asset expire or the financial asset is transferred, and
that transfer qualifies for derecognition. A financial asset is transferred if
the contractual rights to receive the cash flows of the asset have been
transferred or the Group retains the contractual rights to receive the cash
flows of the asset but assumes a contractual obligation to pay the cash flows
to one or more recipients.
A financial asset that is transferred qualifies for derecognition if the Group
transfers substantially all the risks and rewards of ownership of the asset,
or if the Group neither retains nor transfers substantially all the risks and
rewards of ownership but does transfer control of that asset.
Financial liabilities
Financial liabilities are obligations to pay cash or other financial assets
and are recognised when the Group becomes a party to the contractual
provisions of the instrument.
All financial liabilities initially recognised at fair value less transaction
costs and thereafter carried at amortised cost using the effective interest
method, with interest-related charges recognised as an expense in finance cost
in the income statement. A financial liability is derecognised only when the
obligation is extinguished, that is, when the obligation is discharged or
cancelled or expires.
Impairment of financial assets
At the end of each reporting period, a provision is made if there is
sufficient evidence that a financial asset or group of financial assets has
been impaired. Provision against trade receivables is made when there is
objective evidence that the Group will not be able to collect all amounts due
to it in accordance with the original terms of those receivables. The amount
of the write-down is determined as the difference between the asset's carrying
amount and the present value of estimated future cash flows.
(l) Inventories
Inventories are stated at the lower of cost and net realisable value. The cost
of materials is the purchase cost, determined on first-in, first-out basis.
The cost of crude oil and refined products is the purchase cost, the cost of
refining, including the appropriate proportion of depreciation, depletion and
amortisation and overheads based on normal operating capacity, determined on a
weighted average basis. The net realisable value of crude oil and refined
products is based on the estimated selling price in the ordinary course of
business, less the estimated costs of completion and the estimated costs
necessary to make the sale.
(m) Taxation
The tax charge includes both current and deferred tax.
Current tax assets and liabilities are measured at the amount expected to be
paid to or received from the tax authorities, calculated using tax rates that
have been enacted or substantively enacted by the balance sheet date. Taxable
profits or losses differ from the reported profit or loss before taxation in
the Income Statement as it excludes items that are taxable or deductible in
different periods, as well as items that are never deductible or taxable.
Deferred income taxes are calculated using the liability method on temporary
differences. Deferred tax is generally provided on the difference between the
carrying amounts of assets and liabilities and their tax bases. However,
deferred tax is not provided on the initial recognition of goodwill, nor on
the initial recognition of an asset or liability unless the related
transaction is a business combination or affects tax or accounting profit.
Deferred tax on temporary differences associated with shares in subsidiaries
and joint ventures is not provided if reversal of these temporary differences
can be controlled by the Company and it is probable that reversal will not
occur in the foreseeable future. In addition, tax losses available to be
carried forward as well as other income tax credits to the Company are
assessed for recognition as deferred tax assets.
No deferred tax liability was recognised as the Group has substantial
brought-forward ring-fence and supplementary charge losses. These are
offsetable against future tax liabilities and offsetable with the same tax
authority. PPE are in entities that have the losses and any tax base
differences have merely been recognised as unrecognised deferred tax losses.
Changes in deferred tax assets or liabilities are recognised as a component of
tax expense in the income statement, except where they relate to items that
are charged or credited directly to equity in which case the related deferred
tax is also charged or credited directly to equity.
(n) Share-based payments
The Group operates a number of equity-settled, share-based compensation plans,
under which the entity receives services from employees as consideration for
equity instruments (options) of the Company. The fair value of the employee
services received in exchange for the grant of the options is recognised as an
expense. The total amount to be expensed is determined by reference to the
fair value of the options granted:
· Including any market performance conditions;
· Excluding the impact of any service and non-market performance
vesting conditions (for example, profitability or sales growth targets, or
remaining an employee of the entity over a specified time period; and,
· Including the impact of any non-vesting conditions (for example,
the requirement for employees to save).
Non-market vesting conditions are included in assumptions about the number of
options that are expected to vest. The total expense is recognised over the
vesting period, which is the period over which all of the specified vesting
conditions are to be satisfied.
In addition, in some circumstances, employees may provide services in advance
of the grant date, and therefore the grant-date fair value is estimated for
the purposes of recognising the expense during the period between service
commencement period and grant date.
At the end of each reporting period, the entity revises its estimates of the
number of options that are expected to vest based on the non-market vesting
conditions. It recognises the impact of the revision to original estimates, if
any, in profit or loss, with a corresponding adjustment to equity.
When the options are exercised, the Company issues new shares. The proceeds
received, net of any directly attributable transaction costs, are credited to
share capital (nominal value) and share premium.
(o) Equity
Equity comprises the following:
· "Share capital" representing the nominal value of equity shares.
· "Share premium" representing the excess over nominal value of the
fair value of consideration received for equity shares, net of expenses of the
share issue.
· "Share based payment reserve" represents the value of equity
benefits provided to employees and directors as part of their remuneration and
provided to consultants and advisors hired by the Group from time to time as
part of the consideration paid.
· "Accumulated losses " represents retained profits and (losses).
· "Own shares held in trust" represents shares held by Employee
Benefit Trust
(p) Employee Benefit Trust (EBT)
The Company has established an Employee Benefit Trust ("EBT") to facilitate
the operation of its employee share incentive schemes. In accordance with IFRS
10 Consolidated Financial Statements, the EBT is consolidated as it is
considered to be controlled by the Company. The assets, liabilities, income
and expenses of the EBT are therefore included in the consolidated financial
statements on a line-by-line basis.
Own shares of the Company held by the EBT are presented as a deduction from
equity within "Own shares held in trust". No gain or loss is recognised in
profit or loss on the purchase, sale, issue or cancellation of the Company's
own equity instruments by the EBT. Transactions of the EBT relating to the
Company's own shares are accounted for directly in equity.
(q) Foreign currencies
The consolidated financial statements are presented in UK pound sterling, the
functional currency of the Group. Transactions in other currencies are
translated at the exchange rate ruling at the date of the transaction.
Monetary assets and liabilities in foreign currencies are translated at the
rates of exchange ruling at the balance sheet date. Non-monetary items that
are measured at historical cost in a foreign currency are translated at the
exchange rate at the date of the transaction. Non-monetary items that are
measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.
Any exchange differences arising on the settlement of monetary items or on
translating monetary items at rates different from those at which they were
initially recorded are recognised in the profit or loss in the period in which
they arise. Exchange differences on non-monetary items are recognised in other
comprehensive income to the extent that they relate to a gain or loss on that
non-monetary item taken to other comprehensive income, otherwise such gains
and losses are recognised in the income statement. The Group and Company's
functional currency and presentational currency is Sterling.
s) Assets held for sale (IFRS 5)
Non-current assets (or disposal groups) are classified as held for sale when
their carrying amount will be recovered principally through a sale transaction
rather than through continuing use, and the asset (or disposal group) is
available for immediate sale in its present condition, subject only to terms
that are usual and customary for sales of such assets. Classification as held
for sale requires that the sale is highly probable, management is committed to
a plan to sell the asset, and the sale is expected to be completed within
twelve months from the date of classification.
Assets (or disposal groups) classified as held for sale are measured at the
lower of their carrying amount and fair value less costs to sell. Any
impairment loss arising on classification as held for sale is recognised
immediately in the income statement. Once classified as held for sale,
depreciation, depletion and amortisation cease.
Where an asset held for sale forms part of a disposal group, the assets and
liabilities of the disposal group are presented separately within the
statement of financial position. Gains or losses arising on disposal are
recognised in the income statement at the date of disposal.
If the criteria for classification as held for sale are no longer met, the
asset (or disposal group) is remeasured at the lower of:
· its carrying amount before the asset was classified as held for
sale, adjusted for depreciation or amortisation that would have been
recognised had the asset not been classified as held for sale; and
· its recoverable amount at the date of the subsequent decision not
to sell.
t) Investments in subsidiaries
Investments in subsidiaries are recognised at cost less any accumulated
impairment losses. Cost includes directly attributable transaction costs.
Where there are indicators of impairment, the carrying amount of the
investment is tested for impairment in accordance with IAS 36. Any impairment
loss is recognised in the income statement.
Dividend income from subsidiaries is recognised in the income statement when
the Company's right to receive payment is established.
3. Prior period restatement
During the year, the Group identified errors in:
· the capitalisation of development expenditure under IAS 38; and
· the measurement of decommissioning provisions under IAS 37.
These errors have been corrected retrospectively in accordance with IAS 8, and
comparative information has been restated at 1 October 2023 and 1 October
2024.
Development assets
During the year, the Group's decision not to progress the Portland hydrogen
storage project prompted a comprehensive review of costs across its hydrogen
storage and related energy transition project portfolio. This review
identified that certain costs had been recognised as development expenditure
ahead of all of the recognition criteria under IAS 38.57 being met. These
costs primarily related to early-stage technical evaluation, feasibility
studies and project scoping activities, which should have been classified
within the research phase in historic periods and expensed as incurred.
Accordingly, the Group has corrected this misclassification as a prior period
adjustment in accordance with IAS 8.
Furthermore, the Group recognised an impairment charge of approximately £0.92
million in respect of intangible assets in the current year. This primarily
relates to development expenditure associated with projects that are no longer
being progressed, including the Portland project. Further details of the prior
period adjustment are provided in Note 3, and the impairment charge is
disclosed within Note 12 Intangible Assets.
Impact of restatement
Statement of Financial Position (Consolidated)
Amounts of £231,000 and £266,000 have been recognised as adjustments to
opening retained earnings at 1 October 2023 and 1 October 2024
respectively.
£'000 As previously reported on Adjustment 1 Adjustment 1 October 2024 Restated on 30 September 2024
30 September 2024 October 2023
Development assets 1,497 (231) (266) 999
The cumulative reduction in retained earnings arising from this correction
amounts to £497,000.
Statement of Profit or Loss - Year ended 30 September 2024
£'000 Adjustment
Impairment of development assets 266
Statement of Profit or Loss - Year ended 30 September 2023
£'000 Adjustment
Impairment of development assets 231
Basic and diluted loss per share for the year ended 30 September 2024 has been
restated to reflect the increased loss of £266,000.
Statement of Financial Position (Company)
Amounts of £149,000 and £136,000 have been recognised as adjustments to
opening retained earnings at 1 October 2023 and 1 October 2024
respectively.
£'000 As previously reported on Adjustment 1 Adjustment 1 October 2024 Restated on 30 September 2024
30 September 2024 October 2023
Development assets 638 (149) (136) 353
The cumulative reduction in retained earnings arising from this correction
amounts to £285,000.
Statement of Profit or Loss - Year ended 30 September 2024
£'000 Adjustment
Impairment of development assets 136
Statement of Profit or Loss - Year ended 30 September 2023
£'000 Adjustment
Impairment of development assets 149
Decommissioning provision
During the year, the Financial Reporting Council ("FRC") conducted a Corporate
Reporting Review of the Group's Annual Report for the year ended 30 September
2024. As part of this review, the FRC raised queries regarding the discount
rate applied in measuring the Group's decommissioning provisions under IAS 37
Provisions, Contingent Liabilities and Contingent Assets.
Having considered the points raised by the FRC, management has reassessed the
discount rate applied in prior periods and concluded that it was not
consistent with the requirements of IAS 37.
Accordingly, the Group has restated the comparative information to reflect the
application of an appropriate discount rate, in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors. The impact of
this restatement on the Group's financial statements is presented below.
The FRC has confirmed that their enquiries have been closed. When reviewing
the Group's Annual Report, the FRC has made clear the scope and limitations of
its review as follows:
The review was based on the Group's Annual Report and did not benefit from
detailed knowledge of the group's business or an understanding of the
underlying transactions entered into. It was, however, conducted by staff of
the FRC who have an understanding of the relevant legal and accounting
framework. The FRC review provides no assurance that the group's annual report
and accounts are correct in all material respects; the FRC's role is not to
verify the information provided to it but to consider compliance with
reporting requirements. Communications from the FRC are written on the basis
that the FRC (which includes its officers, employees and agents) accepts no
liability for reliance on them by the company or any third party, including
but not limited to investors and shareholders.
Nature of the error
In prior reporting periods, the Group discounted its decommissioning
obligations using rates derived from its weighted average cost of capital
("WACC"), being 16.2%.
IAS 37 requires provisions to be discounted using a pre-tax rate reflecting
current market assessments of the time value of money and risks specific to
the liability. Where risks are reflected within the estimated cash flows, the
discount rate should reflect only the time value of money. The use of WACC was
inconsistent with IAS 37 and constitutes a prior period error under IAS 8.
Correction applied
The decommissioning provision as at 30 September 2024 has been recalculated
using appropriate risk-free pre-tax discount rates ranging from 3.72% to
4.16%, reflecting UK government bond yields matched to the expected timing of
the related cash outflows.
The correction has been applied retrospectively.
Impact of restatement
Statement of Financial Position - As at 30 September 2024
£'000 As previously reported Adjustment Restated
Decommissioning provision 759 495 1,254
Decommissioning asset 19 95 114
Statement of Profit or Loss - Year ended 30 September 2024
£'000 Adjustment
Increase in administrative expenditure and change in estimate 450
Decrease in finance costs (48)
4. Significant accounting judgements, estimates and assumptions
The preparation of the Group's consolidated financial statements requires
management to make judgements, estimates and assumptions that affect the
reported amounts of revenues, expenses during the reporting period, and
reported amounts of assets and liabilities, and the disclosure of contingent
liabilities at the date of the consolidated financial statements. Estimates
and assumptions are continuously evaluated and are based on management's
experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. However, actual outcomes
can differ from these estimates.
In particular, the Group has identified the following areas where significant
judgements, estimates and assumptions are required, and where if actual
results were to differ, this could materially affect the financial position of
financial results reported in a future period. Further information on each of
these areas and how they impact the various accounting policies are described
below and in the relevant notes to the financial statements.
Judgements
Estimates and assumptions
The key assumptions concerning the future and other key sources of estimation
uncertainty at the reporting date that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities within
the next financial year, are described below. The Group based its assumptions
and estimates on parameters available when the consolidated financial
statements were prepared. Existing circumstances and assumptions about future
developments, however, may change due to market change or circumstances
arising beyond the control of the Group. Such changes are reflected in the
assumptions when they occur.
Hydrocarbon reserve and resource estimates
The Group estimates and reports hydrocarbon reserves in line with the
principles contained in the SPE Petroleum Resources Management Reporting
System (PRMS) framework. As the economic assumptions used may change, and as
additional geological information is obtained during the operation of a field,
estimates of recoverable reserves may change.
The volume of proved and probable oil & gas reserves is an estimate that
affects:
· the unit of production depreciation of producing oil & gas
property, plant and equipment (see Note 13);
· the measurement of decommissioning provisions (see Note 20);
· impairment calculations of oil & gas properties (see Note
12).
· Proved and probable reserves and contingent resources are
estimated using standard recognised evaluation techniques. Estimates are
reviewed at least annually and are regularly assessed by independent
consultants. Future development costs are estimated taking into account the
level of development required to produce the reserves, by reference to
operators (where applicable) and internal engineers.
Recoverable value of intangible exploration and evaluation assets
The Group has capitalised intangible exploration and evaluation assets in
accordance with IFRS 6. Significant judgement is required to determine whether
it continues to be appropriate to carry these costs on the balance sheet and
whether the assets have been impaired.
The key areas in which management have applied judgement include the Group's
intention to proceed with a future work programme for a prospect or licence,
the likelihood of licence and planning permission renewal, plans for
relinquishment, assessment of results from wells or geological or geophysical
studies, and the assessment of whether the carrying value of the exploration
and evaluation assets is unlikely to be recovered in full from successful
development or by sale.
In both the above areas, the assessments include estimates and assumptions
such as long-term oil prices, foreign exchange rates, discount rates,
reserves, production profiles and capital expenditure, all of which are
subject to risk and uncertainty. It is possible therefore that changes in
these estimates may impact the recoverable values of exploration and
evaluation assets.
Details of the Group's intangible exploration and evaluation assets and
goodwill are disclosed in Note 12 to the financial statements.
Recoverable value of property, plant and equipment
At each reporting date, management reviews the Group's property, plant and
equipment to assess whether there is any indication of impairment. If such an
indicator exists, the recoverable amount of the asset or cash-generating unit
(CGU) is estimated. The recoverable amount is the higher of (i) fair value
less costs of disposal and (ii) value in use, which is determined by
discounting the expected future cash flows from the asset or CGU.
This assessment requires significant judgement, including assumptions on
long-term oil price forecasts, foreign exchange rates, discount rates,
reserves, production profiles, and capital expenditure plans, all of which
involve risk and uncertainty. Changes in these assumptions could materially
affect the recoverable amount and lead to the recognition or reversal of
impairment losses.
Impairment losses are recognised in the income statement when the carrying
amount of an asset or CGU exceeds its recoverable amount. Where an impairment
loss is subsequently reversed, the carrying amount is increased to the revised
estimate of the recoverable amount, subject to not exceeding the carrying
amount that would have been determined had no impairment been recognised
previously.
Further details of the Group's property, plant and equipment are provided in
Note 13 to the financial statements.
Decommissioning costs
The estimated cost of decommissioning at the end of the producing lives of
fields is periodically reviewed and is based on forecast prices and technology
at the balance sheet date which are provided by technical teams. Provision is
made for the estimated cost using a discounted cash flow method and a
risk-free rate. Details of the Group's decommissioning provisions are
disclosed in Note 20 to the financial statements.
(vi) Classification as asset held for sale (IFRS 5)
Judgement is required in determining whether UKOG (GB) Limited meets the
criteria for classification as an asset held for sale under IFRS 5.
Management assessed that, at 30 September 2025, the disposal was highly
probable, the asset was available for immediate sale in its present condition,
and an active programme to complete the sale had been initiated. Accordingly,
the subsidiary was classified as held for sale and measured at the lower of
its carrying amount and fair value less costs to sell.
Subsequent to the reporting date, the disposal completed following receipt of
the required regulatory approvals.
5. Segmental reporting
In 2025 and 2024, all the Group's assets and operations were in the United
Kingdom. For management purposes, the Group is organised into business units
based on the main types of activities and has three reportable segments, as
follows:
· Oil production includes producing business activities;
· Oil exploration and evaluation and energy transition activities
includes non-producing activities and the Group's hydrogen storage and clean
energy projects (analysed as one segment in 2024);
· Head Office, corporate and administrative, including parent
company activities.
The Board of Directors monitors the operating results of its business units
separately for the purpose of making decisions about resource allocation and
performance assessment. Segment performance is evaluated based on operating
profit or loss and is measured consistently with operating profit or loss in
the consolidated financial statements. However, the Group's financing
(including finance costs and finance income) and income taxes are managed on a
group basis and are not allocated to operating segments. The accounting
policies used by the Group in reporting segments internally are the same as
those used in the financial statements.
Revenues of £432,000 are derived from a single external customer. These
revenues are attributed to the oil production segment.
Year ended 30 September 2025
Group Oil Development assets Oil exploration & Corporate & Consolidated
production
evaluation
administrative and consolidation adjustments
£'000
£'000
£'000
£'000
REVENUE
External Customers 432 - - 432
Total revenue 432 - - 432
Results
Depreciation, Depletion & Amortisation (26) - (3) (29)
Exploration write offs & Impairment charges (121) (920) (227) - (1,269)
Finance costs (202) - - (202)
Loss before taxation (1,351) (1,073) (509) (1,165) (4,098)
Taxation - - - -
Loss after taxation (1,351) (1,073) (509) (1,165) (4,098)
Segment assets 871 335 - (70) 1,136
Segment liabilities (5,085) (87) (629) (1,021) (6,822)
Other disclosures:
Capital expenditure ((1)) 9 256 227 7 499
(1) Capital expenditure consists of capitalised exploration
expenditure, development expenditure, additions to oil & gas properties
and to other intangible assets including expenditure on assets from the
acquisition of subsidiaries.
Year ended 30 September 2024
Group Oil Oil exploration & development Corporate & Consolidated
production
£'000
administrative and consolidation adjustments
£'000
£'000
£'000
REVENUE
External Customers 1,110 - - 1,110
Total revenue 1,110 - - 1,110
Results
Depreciation, Depletion & Amortisation (303) - (84) (387)
Exploration write offs & Impairment charges (3,603) (32,811) (36,414)
Finance income/ costs (142) - (30) (172)
Loss before taxation (3,230) (35,455) 195 (38,490)
Taxation - - - -
Loss after taxation (3,230) (35,455) 195 (38,490)
Segment assets 872 565 1,924 3,361
Segment liabilities (4,784) (390) (658) (5,832)
Other disclosures:
Capital expenditure ((1)) 61 840 2 903
(1) Capital expenditure consists of capitalised
exploration expenditure, development expenditure, additions to oil & gas
properties and to other intangible assets including expenditure on assets from
the acquisition of subsidiaries.
6. Operating Loss
Group 2025 2024
£'000
£'000
Operating (loss) is stated after charging:
Decommissioning expense/ (credit) 450 (1,119)
Directors' remuneration - fees & salaries 504 457
Auditors' remuneration
Audit-related assurance services (PKF) 90 90
Audit-related assurance services (MKS) - 75
Audit-related assurance services (MKS overruns) 104 -
Depletion of oil & gas properties - 26
7. Revenue
The Group has recognised the following amounts relating to revenue in the
statement of comprehensive income:
Group 2025 2024
£'000
£'000
Revenue from contracts with customers 432 1,110
Total 432 1,110
All revenue is derived from sales of oil from one geographic location and is
recognised at a point in time.
8. Directors and employees
The Company employed the services of an average of 9 employees in the year
(2024: 12). Remuneration in respect of these employees was:
Group 2025 2024
£'000
£'000
Employment costs, including Directors, during the year:
Wages and salaries 1,098 1,613
Social security costs 148 210
Employee pension costs 10 13
Benefits in kind 26 18
Total 1,282 1,854
Employee pension costs payable at the end of the year amounted to £2,000
(2024: £2,000).
Average number of persons, including Executive Directors employed
2025 2024
No.
No.
Administration 7 7
Operations 2 5
Total 9 12
Further details of Directors' remuneration, including share-based payments,
pension contributions and other benefits, are provided in the Directors'
Remuneration Report.
9. Finance costs
2025 Restated
£'000
2024
£'000
Loan interest due to non-controlling interests (152) (128)
Unwind of discount on decommissioning provision (note 20), restated (50) (14)
Convertible loan fees - (30)
Total - Finance cost (202) (172)
Prior period adjustments have been recognised during the year. Further details
of these adjustments are provided in Note 3.
10. Income tax
The Group's oil and gas activities in the UK fall within the ring fence
corporation tax regime. Profits from these activities are subject to a
combined rate of 40% (2024: 40%), comprising mainstream corporation tax at 30%
and a supplementary charge of 10%.
The tax reconciliation below shows how the reported loss before taxation would
reconcile to the theoretical tax charge at the applicable ring fence rate.
However, no deferred tax asset has been recognised in respect of
carried-forward tax losses, reflecting the uncertainty over the timing of
their utilisation.
2025 2024
£'000
£'000
(restated)
Loss for the year before tax (4,098) (38,490)
Tax at 40% (UK ring-fence corporation tax rate) 40% 40%
Tax at applicable rate (40%) (1,639) (15,396)
Non-deductible expenses (including impairments and exploration write-offs) 365 14,744
Temporary differences not recognised 1,228 523
Pre-trading expenditures deductible in later periods 61 142
Tax impact of capital allowances (5) (20)
Utilisation of losses brought forward (106) -
Relief of finance costs 95
Other movements 1 (7)
Total tax charge/(credit) - -
Prior period adjustments have been recognised during the year. Further details
of these adjustments are provided in Note 3.
The Group estimated carried forward tax losses none of which are recognised as
a deferred tax asset.
At 30 September 2025, the Group had accumulated tax losses available for carry
forward of £62,327,427 (2024: £57,190,149 restated). No deferred tax asset
has been recognised in respect of these losses, impairments or other
deductible temporary differences due to the uncertainty over future taxable
profits against which they may be utilised.
No deferred tax liability was recognised as the Group has substantial
brought-forward ring-fence and supplementary charge losses. These are
offsetable against future tax liabilities and offsetable with the same tax
authority. PPE are in entities that have the losses and any tax base
differences have merely been recognised as unrecognised deferred tax losses .
Deferred tax assets have not been recognised in respect of the unprovided
deferred taxation items because it is not probable that future taxable profit
will be available to utilise these deductible temporary differences.
11. Earnings per share
The calculation of the basic loss per share is calculated by dividing the
consolidated loss attributable to the equity holders of the Company by the
weighted average number of ordinary shares in issue during the year.
Group 2025 2024
£'000
£'000
restated
Loss attributable to ordinary shareholders (3,757) (37,750)
Group 2025 2024
No.
No.
Weighted average number of ordinary shares for calculating basic loss per 8,689,253,916 4,343,546,436
share
Group 2025 2024
Pence
Pence
Restated
Basic and diluted loss per share (0.043) (0.87)
As inclusion of the potential ordinary shares would result in a decrease in
the earnings per share, they are considered to be anti-dilutive, as such,
diluted earnings per share is not included. The potential number of dilutive
shares is nil.
12. Intangible assets
Group
Exploration & Development Total
evaluation costs
assets
£'000
£'000
£'000
As at 30 September 2023 (Restated) 31,704 1,266 32,970
Additions 840 - 840
Impairment of exploration and evaluation assets (32,544) - (32,544)
Impairment of development assets - (266) (266)
As at 30 September 2024 (Restated) - 999 999
Additions 227 256 483
Impairment of exploration and evaluation assets (227) - (227)
Impairment of development assets - (920) (920)
As at 30 September 2025 - 335 335
Prior period adjustments have been recognised in respect of 30 September 2023
and 30 September 2024. Further details of these adjustments are provided in
Note 3.
During the year, management made the strategic decision to exit the Portland
project. This decision represents an indicator of impairment under IAS 36, as
it constitutes a significant adverse change in the extent to which the asset
is expected to be used. Accordingly, the Group performed an impairment
assessment of the relevant development assets. The recoverable amount was
assessed with reference to fair value less costs of disposal, reflecting the
absence of future economic benefits associated with the Portland project. As a
result, an impairment charge of £920K was recognised.
Company
Exploration & Development assets Total
evaluation costs
£'000
£'000
£'000
As at 30 September 2023 (Restated) 527 490 1,017
Additions 260 - 260
Impairment of assets (788) (136) (924)
As at 30 September 2024 (Restated) - 353 353
Additions 195 155 350
Impairment of E&E and development assets (195) (356) (551)
As at 30 September 2025 - 152 152
Prior period adjustments have been recognised in respect of 30 September 2023
and 30 September 2024. Further details of these adjustments are provided in
Note 3.
Following the impairment review disclosed above, the carrying value of
development assets at the Company as at 30 September 2025 is £152K,
representing assets associated with projects where management continues to
expect future economic benefits.
Exploration and Evaluation assets in 2024
In accordance with IFRS 6 - Exploration for and Evaluation of Mineral
Resources, the Group assesses at each reporting date whether there is any
indication that an exploration and evaluation ("E&E") asset may be
impaired. If such indicators exist, the Group performs an impairment test to
determine the recoverable amount of the asset or cash-generating unit ("CGU").
Management has determined that each licence interest held by the Group
constitutes a separate CGU, as this represents the lowest level at which
largely independent cash inflows are expected to be generated.
Indicators considered include the period for which the Group has the right to
explore, the likelihood of licence renewal, availability of funding for
continued exploration, the results of technical evaluations, and whether
further substantive expenditure is planned. Where such indicators exist, the
recoverable amount of the CGU is estimated and compared with its carrying
amount.
Licence/ Subsidiary Impairment (£m) Reason
Horse Hill (E&E) 20.0 Planning consent uncertainty; economic uncertainty on UK onshore oil and gas,
the capital requirement and planning consent
Turkey 3.4 Exit from licence in FY 2025
PEDL234 9.2 Exit from licence in FY 2025
By recognising the impairment of the Horse Hill asset in 2024, the Board
adopted a prudent approach to ensure that asset carrying values appropriately
reflected the prevailing regulatory position. This approach is consistent with
the Group's strategic transition towards clean power, including its hydrogen
storage and generation activities.
The Board notes that, should planning consent for Horse Hill be reinstated in
the future, there may be potential for a partial reversal of the impairment,
subject to the requirements of IAS 36 and prevailing economic conditions. The
recoverable value was assessed based on discounted cash flow techniques,
applying assumptions consistent with market participant expectations.
Exploration costs in the financial year to 30 September 2025 were £0.2
million and impaired in full (2024: £32.5 million).
13. Oil & gas properties
Group
Oil & Gas properties Decommissioning Property Plant Total Total
asset
& Equipment
£000
2024
£000
Cost
As at 30 September 2024 (Restated) 17,542 775 2,243 20,560 20,027
Additions 9 - 7 16 61
Change in estimate - (2) - (2) 472
As at 30 September 2025 17,551 773 2,250 20,574 20,560
Depletion & impairment
As at 30 September 2024 (16,963) (661) (2,230) (19,854) (15,864)
Depletion and depreciation - (10) (19) (29) (387)
Impairment (8) (8) (3,603)
Impairment on classification as held for sale (112) - - (112) -
As at 30 September 2025 (17,083) (671) (2,249) (20,003) (19,854)
Carrying value
As at 30 September 2024 579 114 13 706 706
As at 30 September 2025 468 103 2 573 -
(before transfer to assets held for sale)
Transferred to assets held for sale (468) (103) - (571) -
As at 30 September 2025 - - 2 2 -
Prior period adjustments have been recognised during the year. Further details
of these adjustments are provided in Note 3.
Impairment of Oil and Gas Assets
Cash-generating units ("CGUs") for impairment purposes are defined as
individual fields or groups of fields that generate largely independent cash
flows. The Group has historically identified two producing CGUs: Horse Hill
and Horndean.
Impairment recognised in the prior year (2024)
The outcomes of the impairment reviews undertaken during the year ended 30
September 2024 were as follows:
· Horse Hill CGU
The carrying value of the Horse Hill CGU was £2.1 million, included within
oil and gas properties. The recoverable amount was assessed as nil (refer to
note 12), resulting in a full impairment being recognised in 2024.
· Horndean CGU
The carrying value of the Horndean oil and gas properties was £1.5 million.
Based on production performance and internal forecasts at that time, the
recoverable amount was assessed at £0.6 million, resulting in an impairment
charge of £0.9 million in 2024.
Position in the current year (2025)
During the year ended 30 September 2025, the Horndean CGU was classified as an
asset held for sale in accordance with IFRS 5, following entry into a Sale and
Purchase Agreement ("SPA") with a consideration of £0.4 million.
On classification as held for sale, the carrying value of the Horndean assets
was measured at the lower of carrying amount and fair value less costs to
sell. As a result, an impairment charge of £112k was recognised in the year,
reflecting the difference between the carrying value and the agreed SPA
consideration.
Property, plant & equipment (Company)
Company 2025 2024
£'000
£'000
Cost
As at 1 October 2024 1,831 1,829
Additions 15 2
As at 30 September 2025 1,846 1,831
Depletion & impairment
As at 1 October 2024 (1,827) (416)
Depletion charge - (83)
Impairment (17) (1,328)
As at 30 September 2025 (1,844) (1,827)
Carrying value
As at 30 September 2025 2 5
14. Investment in subsidiaries
Company 2025 2024
£'000
£'000
Cost and net book amount
At 1 October 197 26,242
Impairment - (26,045)
At 30 September 197 197
The Directors carried out a review of the Company's investment in subsidiaries
as at 30 September 2025.
During the prior year, the Company recognised a significant impairment in
respect of its investments in subsidiaries, including Horse Hill Developments
Ltd, UKOG Turkey Ltd, UKOG (234) Ltd and UKOG (GB) Limited, reflecting the
reduced recoverable value of these investments.
No further impairment has been recognised in the current year, as the carrying
value of the investments has been assessed as appropriate based on the
Directors' review.
The Company holds more than 50 per cent of the share capital of the following
companies as at 30 September 2025:
Company Country of Registration Proportion held Functional Currency Nature of business
UKOG (GB) Limited UK 100% GB£ Oil production
UKOG (234) Limited UK 100% GB£ Oil exploration
Horse Hill Developments Ltd UK 77.9% GB£ Oil production
UKOG (137/246) Holdings Ltd UK 100% GB£ Holding Company
UKOG (137/246) Ltd UK 100% GB£ Oil exploration
UKOG (Turkey) Ltd UK 100% GB£ Oil exploration
UK Energy Storage Ltd UK 100% GB£ Energy storage
UK Oil & Gas Investments Limited UK 100% GB£ Dormant
UK Geothermal Limited UK 100% GB£ Dormant
UK Oil & Gas Employee Benefit Trust UK Not owned, GB£ Basis disclosed below
Consolidation explained below
The registered address of each of these subsidiaries can be found on the
Companies House website.
All subsidiary undertakings are included in the consolidated financial
statements. The proportion of the voting rights in the subsidiary undertaking
held directly by the parent company do not differ from the proportion of the
ordinary shares held. The following companies are taking an exception from the
audit of the financial statements as per S479A of the Companies Act; UKOG (GB)
Limited (04050227), UKOG (234) Ltd (07055133), UKOG (137/246) Holdings Ltd
(09010542), UKOG (Turkey) Ltd (10212262), UK Oil & Gas Investments Limited
(11252712), UK Geothermal Limited (13386906), UKOG (137/246) Limited (06807023
), UK Energy Storage Ltd (14108327).
Employee Benefit Trust (EBT)
The UK Oil & Gas Employee Benefit Trust ("EBT") has been consolidated in
these financial statements in accordance with IFRS 10 Consolidated Financial
Statements. Although the Company does not hold a direct equity interest in the
trust, the Group is deemed to control it because:
· the trust operates solely for the benefit of the Company's
employees and directors in connection with the Group's share incentive plans;
· the Group, through the Remuneration Committee, has the ability to
direct the relevant activities of the trust, including decisions over the
distribution of shares; and
· the Group is exposed to variable returns through the use of the
trust to settle share-based payment arrangements.
· Shares in the Company held by the EBT are presented as a
deduction from equity within "own shares held in trust." Transactions between
the EBT and the Group relating to the Company's own equity instruments are
accounted for directly in equity.
At 30 September 2025, the EBT held 1,824,912,685 ordinary shares (2024:
864,485,685).
15. Inventory
Group 2025 2024
£'000
£'000
Inventories - Crude Oil - 2
Total - 2
16. Trade and other receivables
Group Company
2025 2024 2025 2024
£'000
£'000
£'000
£'000
Trade receivables - 107 - 1
Other debtors 86 189 339 413
Prepayments and accrued income 80 319 68 204
Loans to subsidiary companies - - 1,464 1,282
Total 166 614 1,871 1,899
The Directors consider that the carrying amount of trade and other receivables
approximates to their fair value. Trade receivables are amounts due from
customers for goods sold in the ordinary course of business. They are
generally due for settlement within 30 days and are therefore all classified
as current.
In 2025, the Directors carried out an impairment review of the loans to
subsidiary companies and determined that an impairment charge of £177k is
required in respect of the loan owed by Horse Hill Developments limited, UKOG
Turkey and UKOG 234 Ltd (2024: £12.1m).
17. Cash and cash equivalents
Group Company
2025 2024 2025 2024
£'000
£'000
£'000
£'000
Cash at bank and in hand 32 1,039 15 751
Total 32 1,039 15 751
18. Trade and other payables
Group Company
2025 2024 2025 2024
£'000
£'000
£'000
£'000
Trade creditors 969 965 594 469
Other creditors 254 48 263 47
Amounts owed to group undertakings - - 410 264
Accruals and deferred income 346 255 309 142
Total 1,569 1,268 1,576 922
The Directors consider that the carrying amount of trade and other payables
approximates to their fair value.
19. Borrowings
Group Company
Borrowings 2025 2024 2025 2024
£'000
£'000
£'000
£'000
Loans payable to Non-Controlling Interests 3,462 3,310 - -
Total 3,462 3,310 - -
At 30 September 2025, the outstanding loan balances owed to HHDL's
shareholders were; Alba Mineral Resources PLC (Alba) £2.8 million (2024:
£2.6 million), Doriemus PLC (Doremius) £0.6 million (2024: £0.6 million)
and UK Oil & Gas Plc £18.0 million (2024: £17.8million). The loans are
payable on determination by the Board of HHDL. The loans currently attract an
interest rate equivalent to the Bank of England base rate.
20. Provisions - decommissioning
Group 2025 2024
£'000
£'000
(restated)
As at 1 October (restated) 1,254 1,451
Change of estimate (net) 450 (212)
Unwind of discount 50 14
Reclassified to liabilities associated with assets held for sale (161) -
As at 30 September 1,591 1,254
The amount provided for at 30 September 2025 represents the Group's
decommissioning liabilities in respect of the producing site at Horse Hill and
the Broadford Bridge drilling site.
The Company makes full provision for the future cost of decommissioning oil
production facilities and pipelines on a discounted basis upon the
installation of those facilities. The decommissioning provision represents the
present value of decommissioning costs relating to oil & gas properties.
These provisions have been created based on the Company's internal estimates.
The Group has recognised provisions for the estimated future costs of
decommissioning oil and gas production and exploration facilities. These costs
are expected to be incurred over the productive lives of the assets, which
range from 1 to 11 years.
Key assumptions used in the calculation are:
· Discount rate: 3.59% to 4.88% pre-tax, reflecting management's
assessment of risks not adjusted in the cash flows.
· Inflation rate: 3%
· Timing of outflows: based on current licence expiry dates and
expected cessation of production.
· Site-specific provision amounts are as follows:
£'000 Horse Hill Broadford Bridge Total
Discounted provision at 30 September 2025 1,184 407 1,591
Sensitivity analysis:
· A 1% reduction in the discount rate would increase the total
provision by approximately £29k.
· A 1% increase in the inflation assumption would increase the
provision by approximately £20k.
Assumptions based on the current economic environment have been made, which
management believes are a reasonable basis upon which to estimate the future
liability. These estimates are reviewed regularly to take into account any
material changes to the assumptions. However, actual decommissioning costs
will ultimately depend upon future market prices for the necessary
decommissioning works required which will reflect market conditions at the
relevant time. Furthermore, the timing of decommissioning is likely to depend
on when the fields cease to produce at economically viable rates. This, in
turn, will depend upon future oil & gas prices, which are inherently
uncertain.
Reconciliation of decommissioning provisions to cash flows
The Group's decommissioning provisions are remeasured at each reporting date
to reflect updated assumptions, including estimated costs, timing of
settlement and applicable discount rates. In addition, the prior year
comparative has been restated following a reassessment of the discount rate
applied. These movements are non-cash in nature and therefore do not directly
correspond to cash flows.
In accordance with IAS 7, the table below reconciles the movement in
provisions recognised in the statement of financial position to the amounts
reflected in the consolidated statement of cash flows.
2025 2024
£'000
£'000
(restated)
Movement in provision per statement of financial position 337 (197)
Non-cash remeasurement of decommissioning provision - (908)
Unwinding of discount (included in finance costs) (50) (14)
Reclassified to liabilities associated with assets held for sale 161 -
Net adjustment in operating 449 (1,119)
cash flows
21. Share capital
Ordinary Shares Number of Nominal Value Total Value
ordinary shares
£
£'000
Issued at 30 September 2024 11,140,761,833 0.000000001 11
Share issue, November 2024 2,000,000,000 0.000000001 2
Retail Offer, November 2024 222,148,000 0.000000001 0
Placing Shares, February 2025 3,925,797,833 0.000000001 4
EBT subscription 960,427,000 0.000000001 1
Issued at 30 September 2025 18,249,134,666 0.000000001 18
Deferred shares
At 30 September 2025 and 2024, the Company had 1,158,385,352,229 deferred
shares in existence. These deferred shares do not carry voting rights.
Total Ordinary and Deferred shares
The issued share capital as at 30 September 2025 is as follows:
Number of Nominal Value Total Value
shares
£
£'000
Ordinary shares 18,249,134,666 0.000000001 18
Deferred shares A 1,158,385,352,229 0.00001 11,585
Deferred shares B 3,250,738,617,790 0.000001 3,250
Total 14,853
22. Share based payments
Share options
No share options were granted, exercised or cancelled during the year (2024:
none granted, none exercised and none cancelled). At 30 September 2025, there
were no share options in issue. The 121,500,000 share options outstanding at
30 September 2024 lapsed during that prior year.
Warrants
Nil warrants were in issue as of 30 September 2025 (2024: 24.2 million).
Employee Benefit Trust
The Company established the UK Oil & Gas Employee Benefit Trust ("EBT") on
29 September 2014 to facilitate the operation of the Company's existing share
incentive plan over up to 10% of the Company's issued share capital from time
to time, in a tax-efficient manner for the beneficiaries of that plan. The EBT
is a discretionary trust for the benefit of directors, employees and
consultants of the Company. Shares held in the EBT are intended to be used to
satisfy future awards made by the Company's Remuneration Committee under the
share incentive scheme.
At 30 September 2025, the EBT held 1,824,912,685 ordinary shares in the
Company (2024: 864,485,685). Awards of ordinary shares to beneficiaries will
be subject to vesting and other performance conditions determined by the
Remuneration Committee, in line with prevailing market practice.
In accordance with IFRS, the EBT is consolidated into the Group's financial
statements as the Company is considered to have control over the trust. As a
result, the ordinary shares held by the EBT are presented as a deduction from
equity within the consolidated statement of financial position, rather than as
an investment. The cost of shares acquired by the EBT is recorded in equity,
and no gain or loss is recognised on the purchase, sale, issue or cancellation
of the Company's own shares.
Details of share options granted during the year to Directors, consultants
& employees over the ordinary shares are as at 30 September 2024:
Share options At 1 October 2023 Issued during Lapsed / exercised during the year At 30 September 2024 Exercise price Date from which exercisable Expiry date
No. Million
the year
No. Million
No. Million
£
No. Million
Allen Howard 5 - (5) - 0.0113 27/09/2019 25/09/2024
Kiran Morzaria 6.5 - (6.5) - 0.0113 27/09/2019 25/09/2024
Stephen Sanderson 25 - (25) - 0.0113 27/09/2019 25/09/2024
Nicholas Mardon Taylor 4 - (4) - 0.0113 27/09/2019 25/09/2024
40.5 - (40.5) -
Consultants & employees 81 - (81) - 0.0113 27/09/2019 25/09/2024
Total 121.5 - (121.5) -
Details of warrants are as follows:
Warrants At 30 September 2024 Issued during Lapsed / exercised during the year At 30 September 2025 Exercise price Date from which exercisable Expiry date
No. Million
the year
No. Million
No. Million
£
No. Million
Consultants 7.1 - (7.1) - 0.0009 01/08/2022 01/08/2025
Consultants 17.1 - (17.1) - 0.0009 09/09/2022 09/09/2025
Total 24.2 - (24.2) -
23. Financial instruments and risk analysis
Financial assets by category
The categories of financial asset, all included initially measured at fair
value and subsequently carried at amortised cost in the balance sheet and the
headings in which they are included are as follows:
Current assets - Group 2025 2024
£'000
£'000
Trade and other receivables 166 614
Inventory - 2
Cash and cash equivalents 32 1,039
Total 198 1,655
Current assets - Company 2025 2024
£'000
£'000
Trade and other receivables 407 617
Loans to subsidiary companies 1,464 1,282
Cash and cash equivalents 15 751
Total 1,886 2,650
Financial liabilities by category
The categories of financial liability all included at fair value and
subsequently carried at amortised cost in the balance sheet and the headings
in which they are included are as follows:
Current liabilities - Group 2025 2024
£'000
£'000
Trade and other payables 1,569 1,268
Borrowings 3,462 3,310
Total 5,031 4,578
Current liabilities - Company 2025 2024
£'000
£'000
Trade and other payables 1,166 657
Amounts owed to group undertakings 410 264
Total 1,576 921
The group is exposed to market risk through its use of financial instruments
and specifically to credit risk, and liquidity risk which result from both its
operating and investing activities. The group's risk management is coordinated
at its head office, in close co-operation with the board of Directors, and
focuses on actively securing the group's short to medium term cash flows by
minimising the exposure to financial markets.
Long term financial investments are managed to generate lasting returns. The
group does not actively engage in the trading of financial assets for
speculative purposes, nor does it write options. The most significant
financial risks to which the group is exposed to are described below.
Interest rate sensitivity
The group is not substantially exposed to interest rate sensitivity, other
than in relation to interest bearing bank accounts.
Credit risk analysis
The group's exposure to credit risk is limited to the carrying amount of trade
receivables and cash at bank. The group continuously monitors defaults of
customers and other counterparties, identified either individually or by
Company, and incorporates this information into its credit risk controls.
Where available at reasonable cost, external credit ratings and/or reports on
customers and other counterparties are obtained and used.
The group's policy is to deal only with creditworthy counterparties. Group
management considers that trade receivables that are not impaired for each of
the reporting dates under review are of good credit quality, including those
that are past due. None of the group's financial assets are secured by
collateral or other credit enhancements. The credit risk for liquid funds and
other short-term financial assets is considered negligible since the
counterparties are reputable banks with high-quality external credit ratings.
Liquidity risk analysis
The majority of the Group's liabilities are contractually due within one year.
The loan due from Horse Hill Developments Limited to Alba and Doriemus is
payable on determination by the Board of Horse Hill Developments Limited.
The group's continued future operations depend on its ability to raise
sufficient working capital through the issue of equity share capital or debt
financing. The Directors are confident that adequate funding will be
forthcoming to finance operations. Controls over expenditure are carefully
managed.
Capital management policies
The group's capital management objectives are to:
· Ensure the group's ability to continue as a going concern;
· Provide a return to shareholders; and
· To provide capital for the purpose of strengthening the Group's
risk management capability.
The Group actively and regularly reviews and manages its capital structure, to
ensure an optimal capital structure, and equity holder returns, taking into
consideration the future capital requirements of the Group and capital
efficiency, prevailing and projected profitability, projected operating cash
flows, projected capital expenditures and projected strategic investment
opportunities. Management regards total equity as capital and reserves, for
capital management purposes.
Commodity price risk
The Group is exposed to the risk of fluctuations in prevailing market
commodity prices on the mix of oil & gas products it produces. The Group's
policy is to manage these risks through the use of contract-based prices with
customers.
Commodity Price Sensitivity
The table below summarises the estimated impact of reasonably possible changes
in crude oil prices on profit before tax, with all other variables held
constant. The analysis assumes a 10% movement in crude oil prices, equivalent
to a change of approximately US$8.10/bbl (2024: US$7.18/bbl).
The sensitivity has been determined based on a review of historical price
volatility and forward-looking market expectations.
Increase/decrease in crude oil prices Effect on profit before tax for the year ended Effect on profit before tax for the year ended
30 September 2025 Increase/(Decrease)
30 September 2024 Increase/(Decrease)
£'000
£'000
Increase US$ 8.10 /bbl (2024: US$ 7.18/bbl) 49 78
Decrease US$ 8.10 /bbl (2024: US$ 7.18/bbl) (49) (78)
Currency risk
The Group has no significant monetary assets or liabilities denominated in a
foreign currency. However, the group is exposed to currency risk, with the
price of Brent Crude Oil being denominated in US$. The current exposure is not
seen as material, given the current level of revenue generated from it. The
Board will continue to monitor this risk as the operations and/or revenues
increase.
24. Commitments & contingent liabilities
Ongoing exploration expenditures are required to maintain title to the Group's
exploration permits. No provision has been made in the financial statements
for these amounts as the expenditure is expected to be fulfilled in the normal
course of the Group's operations. As of 30 September 2025, the Group had no
further material commitments (2024: none).
Subsequent to the Group's exit from Turkey in October 2024, it received a
claim of $100,000 from its former partner in relation to post exit operations.
The Directors have carefully considered this matter, including the basis of
the claim and the likelihood of whether any settlement was required.
The Group has assessed the nature of the claim and obtained legal advice,
which confirmed the Directors' view that there was no remaining formal legal
or contractual basis for the claim under the exit terms agreed with the
operator. This position was communicated by the Company's solicitors to the
operator at the time and, to date, nothing further has since been received on
the matter. Accordingly, the Directors do not consider that a present
obligation exists as at the reporting date and no provision has been
recognised in the financial statements.
25. Non-current assets held for sale
In July 2025, the Company agreed the sale of its 100%-owned subsidiary UKOG
(GB) Limited to Servatec Holdings Limited for a cash consideration of
£400,000. Completion was subject to the normal sector regulatory consents.
UKOG (GB) holds minority non-operated interests in two UK onshore petroleum
licences, a 10% interest in PL211 and a 5% interest in PEDL070, containing the
Horndean and Avington oil fields, respectively.
At 30 September 2025, the disposal met the criteria to be classified as held
for sale in accordance with IFRS 5 Non-current Assets Held for Sale and
Discontinued Operations.
The sale was considered highly probable, management was committed to the
disposal, regulatory consent was expected to be granted, and completion was
expected within 12 months of the date of classification.
Accordingly, the assets and liabilities of UKOG (GB) Ltd were presented
separately as assets held for sale and liabilities directly associated with
assets held for sale as at 30 September 2025.
Assets held for sale are measured at the lower of their carrying amount and
fair value less costs to sell. Any impairment arising on classification is
recognised immediately in the income statement. Depreciation, depletion and
amortisation cease from the date of classification.
The disposal does not constitute a discontinued operation as defined by IFRS
5, as it does not represent a separate major line of business or geographical
area of operations. The assets disposed of comprised minority non-operated
interests and did not represent a significant component of the Group's overall
operations. Accordingly, the results of the disposal group have been presented
within continuing operations.
On 3 December 2025, subsequent to the reporting date, the Group completed the
disposal, following receipt of approval from the North Sea Transition
Authority ("NSTA"), which constituted the final condition precedent to the
transaction.
In accordance with the terms of the sale agreement, the transaction became
effective upon receipt of NSTA approval, with completion being a consequential
administrative step.
As at 30 September 2025
£'000
Assets
Oil & Gas properties 571
Trade and other receivables 22
Inventory 2
Cash and cash equivalents 6
Total assets classified as held for sale 601
Liabilities
Provisions (161)
Trade and other payables (40)
Total liabilities associated with assets held for sale (201)
Net assets of disposal group 400
26. Events after the reporting date
The Directors have considered events occurring after the reporting date and up
to the date of approval of these financial statements.
Subsequent to 30 September 2025, during October and November 2025, the Group
successfully raised approximately £5.0 million of funding (before expenses)
through a series of equity placings, as announced via regulatory news service
("RNS") announcements during the period. The proceeds were raised to support
working capital requirements and to fund the continued development of the
Group's Clean Power and hydrogen storage projects.
On 1 October 2025, the Group's wholly owned subsidiary, UK Energy Storage Ltd,
entered into a Memorandum of Understanding ("MOU") with National Gas
Transmission PLC. The MOU provides a framework for collaboration in relation
to the planned development of hydrogen transmission infrastructure in the UK,
including the potential connection of UKEn's proposed hydrogen storage
projects in South Dorset and East Yorkshire to National Gas's proposed Project
Union hydrogen pipeline network. The MOU is non-binding and does not give rise
to any financial commitments at the reporting date.
On 3 December 2025, the Group completed the disposal of its wholly owned
subsidiary UKOG (GB) Ltd, following receipt of the relevant regulatory
approvals. The disposal proceeds were received post year end. The assets and
liabilities of UKOG (GB) Ltd had been classified as held for sale at 30
September 2025.
In February 2026, as part of the Company's commitment to transitioning into
clean energy, it has now successfully Plugged and Abandoned its Broadford
Bridge-1/1z well.
In March 2026, UK Energy Storage Limited, entered into a Memorandum of
Understanding with Wales & West Utilities Limited to explore the potential
integration of the Group's planned South Dorset hydrogen storage project with
the proposed HyLine SouthWest hydrogen pipeline network. The MOU sets out the
parties' intention to collaborate on potential pipeline connectivity, future
joint applications for government support and the development of hydrogen
infrastructure in the region. This agreement represents a non-binding
arrangement and no financial commitments have been entered into at this stage.
On 1 April 2026, the Company's ordinary shares were suspended from trading on
AIM pending publication of the Group's annual report and accounts for the year
ended 30 September 2025, in accordance with AIM Rule 19. The suspension
remains in place until the audited financial statements are published.
27. Related party transactions
Transactions with related parties
There were no material transactions with related parties during the year ended
30 September 2025 (2024: £4,500). UK Oil & Gas Plc paid a subscription
fee for membership with United Kingdom Onshore Oil & Gas (UKOOG) during
2024. This was considered a related party transaction as a director of the
Company also served as a director of UKOOG during the period.
Remuneration of key management personnel
The remuneration of the company's directors and other key management personnel
is set out below in aggregate for each of the categories specified in IAS24
Related Party Disclosures. The Directors Remuneration Report provides further
details.
2025 2024
£'000
£'000
Short-term employee benefits 504 457
Total 504 457
28. Ultimate controlling party
In the opinion of the Directors there is no controlling party.
Company Information
Company registration number 052126625
Registered office The Broadgate Tower 8th Floor
20 Primrose Street
London EC2A 2EW
Directors Nicholas Mardon Taylor
Stephen Sanderson
Kris Bone
Allen Howard
Auditors PKF Littlejohn LLP
30 Churchill Place
London
E14 5RE
Nominated Adviser Zeus Capital Limited
125 Old Broad Street
London EC2N 1AR
Solicitors Hill Dickinson
The Broadgate Tower 8th Floor
20 Primrose Street
London EC2A 2EW
Registrars Share Registrars Limited
The Courtyard
17 West Street Farnham
Surrey GU9 7DR
Section 1.02 Forward-looking Statement
This annual report contains 'forward-looking information', which may include,
but is not limited to, statements with respect to the future financial and
operating performance of UK Oil & Gas Plc, its subsidiaries, investment
assets and affiliated companies, the estimation of oil reserves or resources,
the realisation of resource estimates, costs of production, capital and
exploration expenditures, costs and timing of the development of new assets,
requirements for additional capital, governmental regulation of operations and
exploration operations, timing and receipt of approvals, licenses,
environmental risks, title disputes or claims.
Often, but not always, forward-looking statements can be identified by the use
of words such as 'plans', 'expects', 'is expected', 'budget', 'scheduled',
'estimates', 'forecasts', 'intends', 'anticipates' or 'believes', or
variations (including negative variations) of such words and phrases, or state
that certain actions, events or results 'may', 'could', 'would', 'might' or
'will' be taken, occur or be achieved. Forward-looking statements involve
known and unknown risks, uncertainties and other factors that may cause the
actual results, performance or achievements of UK Oil & Gas Plc and/or its
subsidiaries, investment assets and/or its affiliated companies to be
materially different from any future results, performance, or achievements
expressed or implied by the forward-looking statements.
Such factors include, among others, general business, economic, competitive,
political and social uncertainties; the actual results of current exploration
activities; conclusions of economic evaluations and studies; fluctuations in
the value of UK Pounds Sterling relative to the United States Dollar, and
other foreign currencies; changes in project parameters as plans continue to
be refined; future prices of products; possible variations in recovery rates;
failure of plant, equipment or processes to operate as anticipated; accidents,
labour disputes and other risks of the oil & gas industry; political
instability, adverse weather conditions, insurrection or war; delays in
obtaining governmental approvals or financing or in the completion of
development or construction activities.
Although UK Oil & Gas Plc has attempted to identify important factors that
could cause actual actions, events or results to differ materially from those
described in forward-looking statements, there may well be other factors that
cause actions, events or results to differ from those currently anticipated,
estimated or intended. Forward-looking statements contained herein are made as
of the date of this annual report, and UK Oil & Gas Plc disclaims any
obligation to update any forward looking statements, whether as a result of
new information, future events or results or otherwise. There can be no
assurance that forward-looking statements will prove to be accurate, as actual
results and future events could differ materially from those anticipated in
such statements. Accordingly, readers should not place undue reliance on
forward-looking statements due to the inherent uncertainty therein. Nothing in
this annual report should be construed as a profit forecast.
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR FLFVEEDISIIR
Copyright 2019 Regulatory News Service, all rights reservedRecent news on UK Oil & Gas
See all newsREG - AIM UK Oil & Gas PLC - Restoration - UK Oil & Gas Plc
AnnouncementREG - UK Oil & Gas PLC - Horse Hill – Retrospective Planning Application
AnnouncementREG - UK Oil & Gas PLC - Annual Accounts for year ended 30 September 2025
AnnouncementREG - AIM UK Oil & Gas PLC - Suspension - UK Oil & Gas plc
AnnouncementREG - UK Oil & Gas PLC - Temporary suspension of trading on AIM
Announcement