Europa Oil & Gas
(Holdings) plc / Index: AIM / Epic: EOG / Sector: Oil &
Gas
28
October 2024
Europa Oil & Gas
(Holdings) plc
("Europa" or the
"Company")
Final results for the
year to 31 July 2024
Europa Oil & Gas (Holdings)
plc, the AIM traded West Africa, UK and Ireland focused oil and gas
exploration, development and production company, announces its
final audited results for the 12-month period ended 31 July
2024.
The full Annual Report and
Accounts will be available shortly on the Company's website
at www.europaoil.com
and will be mailed to those shareholders who have
requested a paper copy.
Financial performance
·
Revenue declined 46% to £3.6 million, reflecting
lower oil production (which included a three- month shut in period
at Wressle) and lower realised oil prices (2023: £6.7
million)
·
Gross profit of £0.3 million (2023: £3.4
million)
·
Pre-tax loss of £6.8 million after non-cash
exploration impairment loss of £5.0 million (2023: pre-tax loss of
£0.9 million after non-cash impairment loss of £1.7
million)
·
Net cash used in operating activities £0.6
million (2023: £2.8 million net cash generated by
operations)
·
Cash balance at 31 July 2024: £1.5 million (2023:
£5.2 million)
Operational highlights - Building a balanced
portfolio of exploration and production assets
Equatorial
Guinea
·
Europa announced a ground-breaking deal in December 2023 with
the acquisition of a 42.9% stake in Antler Global Limited
("Antler"), which has an 80% working interest in licence EG-08
offshore Equatorial Guinea. This gives rise to a joint venture
arrangement
·
Europa agreed a US$3 million cash subscription for new
ordinary shares in Antler, with the payments being made in four
instalments and which has now completed
·
EG-08 is a highly prospective licence which has three
drill-ready prospects, with internally estimated Mean Prospective
Resource of 1.4 TCF of gas equivalent
·
Antler and our technical team has further evaluated the
seismic data across the block and has identified additional
prospectivity, resulting in a Mean Prospective Resource of 2.1 TCF
of gas equivalent
·
Antler commenced a farm-down process in Q3 this year with a
view to bringing in a partner for drilling, potentially in
2025
· A
discovery from only one of the three main prospects could be
quickly tied back to existing gas infrastructure located 9km to the
south
Offshore
Ireland - lower risk / very high reward infrastructure-led
exploration in proven gas play in the Slyne Basin
·
Licence FEL 4/19 contains the Inishkea West gas exploration
prospect, which has been mapped as a large four-way closure with a
prospective resource Pmean of 1.5 TCF of recoverable gas
·
The FEL 4/19 licence extension was granted by the Irish
Government, extending the licence term to 31 January
2026
·
Following the licence extension, a farm-out process has begun
again with the aim of bringing in a partner to assist with the
drilling of the prospect
·
Inishkea West is within easy tie-back range of the Corrib gas
field situated some 18 kilometres to the southeast. This proximity
to the Corrib infrastructure, the mapped four-way closure, the
large prospective resource, and the reduced seal risk means that
the Inishkea West prospect has become the primary exploration
target on the FEL 4/19 licence
Onshore UK -
net production declined 48% to 137 barrels of oil per day ("bopd")
(2023: 265 bopd) following planned downtime and increased water cut
on the Wressle oilfield
·
We continue to progress our Cloughton asset to determine if
commercial rates can be obtained using modern completion techniques
so that the 192 BCF (Pmean) GIIP potential can be monetised.
Terms have been agreed for the site and work has now commenced to
secure the necessary permits required to drill an appraisal well,
expected to be in 2026. Given the proximity to the UK gas network
and quality of the natural gas contained within the reservoir, a
successful appraisal well could be quickly brought online,
displacing LNG imports and reducing global emissions
·
Wressle production declined throughout the period
o Gross
production averaged 357 bopd throughout the period (2023: 710
bopd), with Europa's net share equating to 107 bopd (2023: 213
bopd)
o A jet pump
was installed on the Wressle-1 well that took three months to
complete and resulted in interrupted production between mid-August
through to early November 2023
· A
new seismic interpretation and mapping exercise across the Wressle
field has highlighted a potentially significant increase in
resources from the Ashover Grit and the results of the analysis are
now being incorporated into the field development plan. The
intention is that two back-to-back development wells will be
drilled from the existing Wressle site. Planning consent was
received for the project in September, however the North
Lincolnshire Council's decision to grant planning permission has
subsequently been challenged in light of the Finch Supreme Court
judgement which ruled that scope three emissions must be considered
in planning applications for oil and gas developments. This is
expected to result in the planning approval being rescinded. The
Wressle Joint Venture is now going to submit further information
that covers potential scope three emissions such that a future
planning process could be approved. The wells will be drilled at
the earliest opportunity, once the necessary consents and
regulatory approvals have been received
·
In addition to the two development wells, work is ongoing to
monetise the associated gas being produced from Wressle by
connecting to a local gas distribution network. This work is
expected to be completed around the same time as the development
wells and is subject to the same regulatory approvals
·
The revised CPR on Wressle was completed in H2 2023 by ECRE
which incorporated the new field interpretation, historical
production performance data and the field development plan. The key
highlights of the CPR included: 263% increase in 2P Reserves
compared to 2016 CPR, reclassification of 1,883 mboe in Penistone
Flags Contingent Resources to 2P Reserves, 59% upgrade to the
Ashover Grit and Wingfield Flags Estimated Ultimate Recoverable and
23% upgrade to Broughton North Prospective Resources
·
Total net production of 137 bopd was produced from Europa's
UK onshore fields during the year with Wressle contributing roughly
78% of this and the remainder coming from the three older
fields
Offshore UK -
Serenity discovery in the North Sea
·
The recent change in government in the UK and the continued
uncertainty of the domestic regulatory and fiscal environment has
sharply increased the possibility of future fiscal changes for the
oil and gas industry, which we believe could negatively impact the
economics of the Serenity project
·
Given that the Serenity licence was due to expire at the end
of September 2024, we have therefore taken the decision to allow
the licence to lapse, which has resulted in a £4.9 million
impairment of the capitalised costs associated with the
project
UK offshore
licensing round
·
In 2022, Europa participated in the UK Government's
33rd offshore oil and gas licensing round and in May
2024 the Company was contacted by the North Sea Transition
Authority (the "NSTA") who proposed a licence-sharing arrangement
between Europa and another party for a new licence. After careful
consideration, the Company has decided not to accept the proposed
shared licence given the recent new country entry into the highly
prospective EG-08 licence and the limited resources of the Company.
The Board believes that the risk/reward proposition for new assets
in the UK is currently challenging
Board
·
Simon Oddie resigned in November 2023
·
Stephen Williams resigned in November 2023
·
Simon Ashby-Rudd was appointed in December 2023
·
Eleanor Rowley was appointed in April 2024
Post
reporting period events
·
In September 2024, we were delighted that planning approval
was awarded for two new development wells on the Wressle field
which we expect to drill back-to-back next year. As a result of the
Finch Supreme Court ruling and a proposed legal challenge to the
granting of planning permission for the next phase of the Wressle
development, it is expected that the planning consent will be
rescinded once the court process has concluded. The Wressle Joint
Venture plan to submit further information that covers potential
scope three emissions such that a future planning process could be
approved
·
We have decided against applying to extend the Serenity
licence in the North Sea following its expiry at the end of
September 2024 and given the ongoing uncertainties around the oil
and gas fiscal regime in the UK
Investor
presentation and Q&A
CEO William Holland, COO Alastair Stuart and
Chief Geologist Jamie White will be hosting an online presentation
and Q&A for investors on Monday, 2 December 2024.
To register for the event, please
visit:
https://www.engageinvestor.com/company/europa-oil-gas-holdings-plc?tab=events&company=follow
Change of
accounting reference date
The Company is changing its accounting
reference date from 31 July to 31 December, with immediate effect.
Accordingly, its current accounting period, which commenced on 1
August 2024, will now end on 31 December 2025.
As a result of this change, the Company's
forthcoming financial reporting calendar will be as
follows:
·
Announcement of unaudited interims for the five-month period
from 1 August 2024 to 31 December 2024, to be announced within 3
months of the period end, being by no later than 31 March
2025;
·
Announcement of unaudited interims for the eleven-month
period from 1 August 2024 to 30 June 2025, to be announced within 3
months of the period end, being by no later than by 30 September
2025; and
·
Publication of audited report and accounts for the
seventeen-month period from 1 August 2024 to 31 December 2025, to
be announced within 6 months of the period end, being by no later
than by 30 June 2026.
William Holland, CEO of Europa, said:
"Europa announced a highly
material new country entrance during the 2023/24 financial year,
with the acquisition of a 42.9% stake in Antler Global, providing
us with significant near-term exposure to exploration in Equatorial
Guinea through the EG-08 licence. I cannot overstate how exciting
an opportunity this is for Europa and its stakeholders, given the
sheer scale of the prize on offer in this highly prospective
hydrocarbon province. With over 2 TCF of nearfield,
infrastructure-led, low-risk, Amplitude versus Offset ("AVO")
supported prospects identified which can be quickly brought online,
EG-08 is a world-class asset. We have a data room up and running
and have already seen considerable interest from industry. We are
targeting completion of a farm-out within the coming months and
have concurrently started planning for a well to be drilled, which
could spud as early as next year.
We continue to progress our Irish
business throughout the year and are hoping to farm-out a portion
of our 100% owned licence FEL 4/19, which contains the 1.5 TCF
Inishkea West near-field exploration prospect. I am pleased to
report that a licence extension was granted by the Irish
Government, extending the licence term from January 2024 to 31
January 2026. Last October, we announced the results of our
internally generated seismic reprocessing which has materially
improved the subsurface imaging of the prospect. We now have much
greater confidence in the quality of the seal and trap at Inishkea
West. A prospect of this size and quality simply has to be drilled
in my opinion, not least because of the significant impact a
successful discovery would have on Ireland's security of energy
supply for a number of years.
Since assuming operatorship of
Cloughton in July 2023 we have made steady progress with the
appraisal work on PEDL343, which is an onshore UK licence. We have
agreed terms for a site on which to establish a drilling pad and
have initiated the planning approval process in order to drill an
appraisal well on the field to test if the estimated 192 BCF
(Pmean) GIIP can be produced at commercial rates. We believe that
whilst the UK continues to consume gas, which is forecast to
continue beyond 2050, that the most responsible source is, both
commercially and environmentally, domestic gas. For that reason, a
development of the Cloughton gas field is fully aligned with the UK
Government's British Energy Security Strategy and Net Zero 2050
goals.
We continued to develop and
produce from our core assets onshore UK, where we continue to
invest in our flagship Wressle oilfield. Planning is ongoing to
develop the gassy Penistone Flags reservoir with two back-to-back
wells as soon as the necessary approvals have been received. We
believe that these wells will boost oil production and enable the
export of gas into the local network grid, thus eliminating the
need for flaring.
In the year, we delivered revenues
of £3.6 million, and whilst this was roughly half of the previous
year's, we invested significantly in the Wressle field with the
successful installation of a jet pump. The extensive works on the
jet pump and associated production facilities meant that Wressle
was offline for three months which materially impacted the volume
of oil that we produced. This was further exacerbated by lower oil
prices during the period, resulting in the reduced revenue for the
year. Nevertheless, we ended the year with a cash balance of £1.5
million in Europa accounts, £0.7 million in Antler accounts (gross)
and we continue to generate cashflow from Wressle and our other
onshore UK assets.
Throughout the year, we worked on
various development options for the Serenity oil discovery in the
Central North Sea. However, we became increasingly concerned about
the political and fiscal backdrop in the UK as time progressed. We
have evaluated the options for commercialisation of the asset and
do not believe in the current environment it is attractive for
Europa shareholders. Consequently, in September 2024 we chose not
to extend the Serenity licence, which we believe is in the best
interest of Europa and its shareholders.
Following the expected activity
from our new-country entry into Equatorial Guinea, progress with
our onshore UK projects at Cloughton and Wressle along with our
Irish acreage, I believe we are well positioned to continue to grow
the Company, and I look forward to updating shareholders over the
coming twelve months."
For further information, please
visit www.europaoil.com or
contact:
William Holland
|
Europa Oil & Gas (Holdings)
plc
|
mail@europaoil.com
|
Samantha Harrison / Ciara Donnelly
/ Elliot Peters
|
Grant Thornton UK LLP - Nominated
Adviser
|
+44 (0) 20 7383 5100
|
Peter Krens
|
Tennyson Securities
|
+44 (0) 20 7186 9033
|
Patrick d'Ancona / Finlay Thomson
/ Kendall Hill
|
Vigo Consulting
|
+44 (0) 20 7390 0230
|
Chairman's Statement
Introduction
The 2023/2024 financial year was a
busy, and at times challenging, period for Europa as we focused on
progressing workstreams surrounding our new Equatorial Guinea (EG)
licence whilst ensuring the Company maintains a healthy balance of
producing, exploration and appraisal assets. Against a backdrop of
well-documented macroeconomic pressures and political tensions
impacting UK-focused hydrocarbon businesses, we have still managed
to identify a suitable location for an appraisal well at Cloughton
and, alongside our partners, have ensured Wressle remains cash
generative. Through our decision to turn our new ventures focus on
Africa and not apply for an extension to the Serenity licence, we
have further diversified our asset mix whilst reducing our exposure
to some of the negative political rhetoric surrounding the UK
upstream sector. We continue to focus on finding good farm-in
partners for our EG and Irish assets as an important near-term
priority.
Equatorial Guinea
In the final month of 2023, we
were delighted to complete the acquisition of a 42.9% stake in
Antler, which has an 80% working interest in licence EG-08 offshore
Equatorial Guinea in West Africa. This entry into West Africa was a
prudent decision underpinned by the wealth of exploration and
development project experience the Europa team and board has across
the region. We consider EG-08 to be a highly prospective, low risk
opportunity for the Company and have been encouraged by the
Equatorial Guinean Government's robust support and regular
communication since we acquired a stake in the licence.
We estimate that EG-08 has total
prospective resources of 2.1 TCFE and, given it contains what we
consider to be drill-ready prospects consisting of three
independent targets totalling 1.4 TCFE (Pmean) with a 70%
geological chance of success ("GCOS"), we regard EG-08 as a
relatively low risk, high impact opportunity which is close to
infrastructure so can be brought quickly into production, if
successfully appraised.
We have now initiated the farm-in
process to secure a partner capable of providing us with the
financial support necessary to advance this exciting project,
whilst we will continue to evaluate other opportunities that arise
in this prolific hydrocarbon region which is well regulated and
supportive of the upstream hydrocarbon industry.
Offshore Ireland
Following the Irish Government's
decision to extend the FEL 4/19 exploration licence until 2026, we
have continued with our extensive search for a suitable farm-in
partner during the period. Located off the west coast of Ireland,
FEL 4/19 is ideally positioned adjacent to the Corrib gas field,
which has been producing gas for domestic consumption for a number
of years and has sufficient ullage to monetise a discovery on our
licence. FEL 4/19 contains the large 1.5 TCF low-risk Inishkea West
gas prospect where a discovery could be brought online quickly
providing domestic gas with significantly lower emissions intensity
than imported gas from the UK, Norway or other
jurisdictions.
During the period, we also
published an updated emissions report for FEL 4/19. The third-party
study, which calculated the expected emissions associated with the
development of a future 1 TCF indigenous gas discovery on the
licence, demonstrated that our gas resource at the Inishkea West
prospect has the potential to eradicate the need for higher
emissions intensity gas imports from the UK for up to three years
whilst helping Ireland meet its carbon emission reduction
targets.
Russia's invasion of Ukraine and
the geopolitical turmoil that has ensued have highlighted to
governments worldwide, but particularly those in Europe, the
importance of energy security. We will continue to ensure Irish
politicians, councillors and all key stakeholders are well informed
on our licence and the role it could play in mitigating Ireland's
dependence on expensive, carbon intensive overseas
imports.
Onshore UK
At our principal producing asset
Wressle, development work to enhance production rates included the
installation of a jet pump during the period. This involved a
three-month shutdown of the well and, as a result, Wressle's
average gross production rate during the year was
357 bopd. The well
continues to perform at rates above the independent Competent
Person's P10 production profile, which was updated and announced in
January 2024. Wressle continues to generate cashflow and,
post-period end, we were pleased to announce receipt of planning
consent from North Lincolnshire Council for the further development
of the Wressle well site. We are disappointed that the planning
permission is likely to be rescinded following a legal challenge in
light of the recent Finch Supreme Court judgement which ruled that
scope three emissions must be considered in planning applications
for oil and gas developments. The Wressle Joint Venture is now
going to submit further information that covers potential scope
three emissions such that a future planning process could be
approved. The works will include extending the existing site
to accommodate the drilling of two new wells and construction of
gas processing facilities and a 600m underground gas pipeline to
connect Wressle to the local gas distribution network. This will
result in zero routine flaring as the gas sales further increase
revenues.
In February 2024, we announced
that the NSTA had granted us a two-year extension to our PEDL 343
(Cloughton) licence. The extension has enabled us to continue our
ongoing work on the licence, where we estimate Cloughton to have
gross gas initially in place (GIIP) volumes of 192 BCF (Pmean). The
Cloughton discovery well, drilled in 1986, was looking for oil and
demonstrated good quality sweet gas that flowed naturally at rates
of up to 28,000 scf/day. We believe that a well could flow at rates
of 6 mmscf/day using the modern completion techniques.
We have selected Burniston Mill as
our location for an appraisal well at Cloughton and continue to
engage with stakeholders to obtain the necessary permits and
consents needed to drill the well in order to demonstrate the
productivity of the field, which remains a key target for
2025.
Offshore UK
Post-period end, we announced that
we do not intend to apply to the North Sea Transition Authority for
an extension to the Serenity licence, which consequently expired on
30 September 2024. As a result, the incurred costs associated with
Serenity that the Company has capitalised on its balance sheet will
be written off.
Board Changes
In November 2023, Simon Oddie and
Stephen Williams decided to withdraw their candidacy for
re-election from the resolutions at the Annual General Meeting
("AGM"). Consequently, they ceased to serve as directors of the
Company after the AGM. Simon and Stephen both made a significant
contribution to the development of Europa, and on behalf of the
board and the Company, I would like to put on record our sincere
thanks to them, and best wishes for their future
endeavours.
In December 2023, the board was
strengthened with the addition of Mr Simon Ashby-Rudd as
independent non-executive director. Simon has extensive experience
in the upstream energy sector which includes 30 years in investment
banking roles at large financial institutions, including Dresdner
Kleinwort Benson, Citigroup, and Standard Bank where he was Global
Head of Oil & Gas. He was the founding European partner at
Tristone Capital, which was a leading UK boutique M&A and
equity advisory firm before it was acquired by Macquarie Bank.
Simon has significant global experience in advising energy
companies on corporate strategy and capital structuring and has
spent much of his career focused on Europe and Africa.
In April 2024, we further
strengthened the board with the appointment of Dr Eleanor Rowley as
independent non-executive director. Eleanor is an exploration
geologist and a successful hydrocarbon finder who has extensive
experience in the upstream energy sector, with a particular focus
on African projects. Eleanor's extensive knowledge of exploration
and appraisal asset evaluation has already contributed significant
value to Europa, with her skillset highly complementary to the
board's existing strengths.
Importantly, appointing a third
independent non-executive director has enhanced the independent
governance at Europa, returning the board to a majority of
independent directors.
Conclusion and Outlook
By developing a well-balanced
portfolio of assets across trusted oil and gas jurisdictions, we
remain in a stable position to deliver solid operational progress
in the coming months.
2025 will be an exciting period
for Europa with activity across many of our assets that has the
potential to materially drive shareholder value. Wressle remains
one of the UK's leading onshore oilfields and a key cash generator
for Europa, and the proposed two well development would generate
important revenues for the Company. At Cloughton, appraisal
drilling to test the reservoir productivity could result in the
UK's largest onshore gas field, which, given its proximity to gas
infrastructure, could be brought online quickly.
In addition, we have exciting
near-term gas exploration opportunities at our Equatorial Guinea
licence, as well as our Ireland licence, and continue to search for
ideal farm-inees for both assets. Both assets are close to gas
infrastructure so, like Cloughton, both can be brought online
quickly following a successful well.
On behalf of the board, I would
like to thank all Europa employees who have helped us mitigate the
impact of macroeconomic and domestic headwinds prevalent across the
period. We look forward to what should be a highly productive next
12 months for Europa with a number of key projects progressing as
planned.
Brian O'Cathain (Non-Executive Chairman)
25 October 2024
The financial information set out
below does not constitute the company's statutory accounts for 2024
or 2023. The financial information has been prepared in accordance
with UK adopted international accounting standards on a basis that
is consistent with the accounting policies applied by the group in
its audited consolidated financial statements for the year ended 31
July 2024. Statutory accounts for the years ended 31 July 2024 and
31 July 2023 have been reported on by the Independent
Auditors.
The Independent Auditors' Report
on the Annual Report and Financial Statements for 2024 and 2023
were unqualified and did not contain a statement under 498(2) or
498(3) of the Companies Act 2006. Statutory accounts for the year
ended 31 July 2023 have been filed with the Registrar of Companies.
The statutory accounts for the year ended 31 July 2024 will be
delivered to the Registrar in due course.
Qualified Person Review
This release has been
reviewed by Alastair Stuart, Europa's Chief Operating Officer, who
is a petroleum engineer with over 35 years' experience and a member
of the Society of Petroleum Engineers and has consented to the
inclusion of the technical information in this release in the form
and context in which it appears.
Consolidated statement of comprehensive
income
For the year ended 31
July
|
|
2024
|
2023
|
|
Note
|
£000
|
£000
|
|
|
|
|
Continuing operations
|
|
|
|
Revenue
|
2
|
3,566
|
6,653
|
Cost of sales
|
2
|
(3,117)
|
(3,448)
|
Impairment of producing fields
|
12
|
(189)
|
177
|
Total cost of sales
|
|
(3,306)
|
(3,271)
|
|
|
----------------------------------
|
----------------------------------
|
Gross profit
|
|
260
|
3,382
|
|
|
|
|
Exploration impairment
|
11
|
(4,968)
|
(1,686)
|
Administrative expenses
|
|
(1,855)
|
(1,872)
|
Share of loss from
associate
|
|
(2)
|
-
|
Finance income
|
6
|
223
|
9
|
Finance expense
|
7
|
(439)
|
(717)
|
|
|
------------------------------------
|
------------------------------------
|
Loss before taxation
|
3
|
(6,781)
|
(884)
|
|
|
|
|
Taxation expense
|
8
|
-
|
32
|
|
|
------------------------------------
|
------------------------------------
|
Loss for the
year
|
|
(6,781)
|
(852)
|
|
|
====================
|
====================
|
Other comprehensive (loss) / profit
|
|
|
|
Items which will not be
reclassified to profit /(loss)
|
|
|
|
Profit on investment
revaluation
|
9
|
-
|
5
|
Items which may be reclassified to
profit /(loss)
|
|
|
|
Exchange differences on
translation of foreign operations
|
|
(17)
|
-
|
|
|
------------------------------------
|
------------------------------------
|
Total other comprehensive (loss) / profit
|
|
(17)
|
5
|
|
|
====================
|
====================
|
Total comprehensive loss for the year attributable to the
equity shareholders of the parent
|
|
(6,798)
|
(847)
|
|
|
===================
|
===================
|
|
|
|
|
Earnings per share (EPS) attributable to the equity
shareholders of the parent from continuing
operations
|
Note
|
Pence per
share
|
Pence per
share
|
Basic EPS
|
10
|
(0.71)p
|
(0.09)p
|
Diluted EPS
|
|
(0.71)p
|
(0.09)p
|
The accompanying notes form part of
these financial statements.
Consolidated statement of financial position
As at 31 July
|
|
2024
|
2023
|
|
Note
|
£000
|
£000
|
Assets
|
|
|
|
Non-current assets
|
|
|
|
Intangible assets
|
11
|
2,664
|
7,146
|
Property, plant and
equipment
|
12
|
1,928
|
2,417
|
Investments in joint
ventures
|
13a
|
2,406
|
-
|
|
|
----------------------------------
|
----------------------------------
|
Total non-current assets
|
|
6,998
|
9,563
|
|
|
----------------------------------
|
----------------------------------
|
Current assets
|
|
|
|
Inventories
|
14
|
9
|
19
|
Trade and other
receivables
|
15
|
1,309
|
893
|
Cash and cash
equivalents
|
|
1,463
|
5,165
|
|
|
----------------------------------
|
----------------------------------
|
Total current assets
|
|
2,781
|
6,077
|
|
|
----------------------------------
|
----------------------------------
|
Total assets
|
|
9,779
|
15,640
|
|
|
====================
|
====================
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
Trade and other
payables
|
16
|
(1,387)
|
(781)
|
|
|
------------------------------------
|
------------------------------------
|
Total current liabilities
|
|
(1,387)
|
(781)
|
|
|
------------------------------------
|
------------------------------------
|
Non-current liabilities
|
|
|
|
Trade and other
payables
|
16
|
(6)
|
(12)
|
Long-term provisions
|
19
|
(4,607)
|
(4,368)
|
|
|
----------------------------------
|
----------------------------------
|
Total non-current liabilities
|
|
(4,613)
|
(4,380)
|
|
|
----------------------------------
|
----------------------------------
|
Total liabilities
|
|
(6,000)
|
(5,161)
|
|
|
-----------------------------------
|
-----------------------------------
|
Net assets
|
|
3,779
|
10,479
|
|
|
====================
|
====================
|
|
|
|
|
Capital and reserves attributable
to equity holders
of the parent
|
|
|
|
Share capital
|
20
|
9,592
|
9,592
|
Share premium
|
20
|
23,682
|
23,682
|
Merger reserve
|
20
|
2,868
|
2,868
|
Foreign currency translation
reserve
|
20
|
(17)
|
-
|
Retained deficit
|
|
(32,346)
|
(25,663)
|
|
|
----------------------------------
|
----------------------------------
|
Total equity
|
|
3,779
|
10,479
|
|
|
======================
|
======================
|
These financial statements were approved by the
board of directors and authorised for issue on 25 October 2024 and
signed on its behalf by:
William Holland, CEO
Company registration number
05217946
The accompanying notes form part of
these financial statements.
Consolidated statement of changes in equity
Attributable to the equity holders of the
parent
|
Share
capital
|
Share
premium
|
Merger
reserve
|
FCTR
|
Retained
deficit
|
Total
equity
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
Balance at 1 August 2022
|
9,565
|
23,660
|
2,868
|
-
|
(24,864)
|
11,229
|
Comprehensive loss for the year
|
|
|
|
|
|
|
Loss for the year
attributable to the equity shareholders of the parent
|
-
|
-
|
-
|
-
|
(852)
|
(852)
|
Other comprehensive
profit attributable to the equity shareholders of the
parent
|
-
|
-
|
-
|
-
|
5
|
5
|
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
---------------------------------
|
------------------------------
|
-------------------------------
|
Total comprehensive loss for the
year
|
-
|
-
|
-
|
-
|
(847)
|
(847)
|
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
---------------------------------
|
------------------------------
|
-------------------------------
|
Contributions by and distributions to
owners
|
|
|
|
|
|
|
Issue of share capital (net of
issue costs)
|
27
|
22
|
-
|
-
|
-
|
49
|
Share-based payments (note
21)
|
-
|
-
|
-
|
-
|
48
|
48
|
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
------------------------------
|
Total contributions by and distributions to
owners
|
27
|
22
|
-
|
-
|
48
|
97
|
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
---------------------------------
|
------------------------------
|
-------------------------------
|
Balance at 31 July 2023
|
9,592
|
23,682
|
2,868
|
-
|
(25,663)
|
10,479
|
|
===================
|
===================
|
===================
|
===================
|
=====================
|
==================
|
|
Share
capital
|
Share
premium
|
Merger
reserve
|
FCTR
|
Retained
deficit
|
Total
equity
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
Balance at 1 August 2023
|
9,592
|
23,682
|
2,868
|
-
|
(25,663)
|
10,479
|
Comprehensive loss for the year
|
|
|
|
|
|
|
Loss for the year
attributable to the equity shareholders of the parent
|
-
|
-
|
-
|
-
|
(6,781)
|
(6,781)
|
Other comprehensive
loss attributable to the equity shareholders of the
parent
|
-
|
-
|
-
|
(17)
|
-
|
(17)
|
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
---------------------------------
|
------------------------------
|
-------------------------------
|
Total comprehensive loss for the
year
|
-
|
-
|
-
|
(17)
|
(6,781)
|
(6,798)
|
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
---------------------------------
|
------------------------------
|
-------------------------------
|
Contributions by and distributions to
owners
|
|
|
|
|
|
|
Share-based payments (note
21)
|
-
|
-
|
-
|
-
|
98
|
98
|
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
------------------------------
|
Total contributions by and distributions to
owners
|
-
|
-
|
-
|
-
|
98
|
98
|
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
---------------------------------
|
------------------------------
|
-------------------------------
|
Balance at 31 July 2024
|
9,592
|
23,682
|
2,868
|
(17)
|
(32,346)
|
3,779
|
|
===================
|
===================
|
===================
|
===================
|
=====================
|
==================
|
The accompanying notes form part of
these financial statements.
Company statement of financial position
As at 31 July
|
|
2024
|
2023
|
|
|
£000
|
£000
|
|
Note
|
|
|
Assets
|
|
|
|
Non-current assets
|
|
|
|
Property, plant and
equipment
|
12
|
37
|
49
|
Investments
|
13b
|
2,343
|
2,343
|
Investments in joint
ventures
|
13a
|
2,425
|
-
|
Amounts due from Group
companies
|
15,22
|
5,502
|
22,143
|
|
|
------------------------------------
|
------------------------------------
|
Total non-current assets
|
|
10,307
|
24,535
|
|
|
------------------------------------
|
------------------------------------
|
Current assets
Other receivables
|
15
|
236
|
129
|
Cash and cash
equivalents
|
|
164
|
121
|
|
|
--------------------------------------
|
--------------------------------------
|
Total current assets
|
|
400
|
250
|
|
|
---------------------------------------
|
---------------------------------------
|
Total assets
|
|
10,707
|
24,785
|
|
======================
|
=====================
|
Liabilities
|
|
|
|
Current liabilities
|
|
|
|
Trade and other
payables
|
16
|
(436)
|
(250)
|
|
|
------------------------------------
|
------------------------------------
|
Total current liabilities
|
|
(436)
|
(250)
|
|
|
------------------------------------
|
------------------------------------
|
|
|
|
|
Trade and other
payables
|
16
|
(6)
|
(12)
|
|
|
------------------------------------
|
------------------------------------
|
Total non-current liabilities
|
|
(6)
|
(12)
|
|
|
----------------------------------
|
----------------------------------
|
Total liabilities
|
|
(442)
|
(262)
|
|
|
------------------------------------
|
------------------------------------
|
Net assets
|
|
10,265
|
24,523
|
|
|
====================
|
====================
|
|
|
|
|
Capital and reserves attributable
to equity holders of the parent
|
|
|
|
Share capital
|
20
|
9,592
|
9,592
|
Share premium
|
20
|
23,682
|
23,682
|
Merger reserve
|
20
|
2,868
|
2,868
|
Retained deficit
|
|
(25,877)
|
(11,619)
|
|
|
--------------------------------------
|
--------------------------------------
|
Total equity
|
|
10,265
|
24,523
|
|
|
======================
|
======================
|
The Company has taken advantage of
the exemption provided under Section 408 of the Companies Act 2006
not to publish its individual statement of comprehensive income and
related notes. The loss dealt with in the financial statements of
the parent Company is £14,356,000 (2023: £8,964,000
profit).
These financial statements were
approved by the board of directors and authorised for issue on 25
October 2024, and signed on its behalf by:
William Holland
CEO
Company registration number 05217946
The accompanying notes form part of
these financial statements.
Company statement of changes in equity
|
Share
capital
|
Share
premium
|
Merger
reserve
|
Retained
deficit
|
Total
equity
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
Balance at 1 August 2022 originally stated
|
9,565
|
23,660
|
2,868
|
(20,631)
|
15,462
|
Comprehensive profit for the year
|
|
|
|
|
|
Profit for the year
attributable to the equity shareholders of the parent
|
-
|
-
|
-
|
8,964
|
8,964
|
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
------------------------------
|
-------------------------------
|
Total comprehensive profit for the
year
|
-
|
-
|
-
|
8,964
|
8,964
|
|
|
|
|
|
|
Contributions by and distributions to
owners
|
|
|
|
|
|
Issue of share capital (net of
issue costs)
|
27
|
22
|
-
|
-
|
49
|
Share-based payments (note
21)
|
-
|
-
|
-
|
48
|
48
|
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
------------------------------
|
Total contributions by and distributions to
owners
|
27
|
22
|
-
|
48
|
97
|
|
|
|
|
|
|
|
----------------------------------
|
----------------------------------
|
--------------------------------
|
------------------------------
|
----------------------------
|
Balance at 31 July 2023
|
9,592
|
23,682
|
2,868
|
(11,619)
|
24,523
|
|
====================
|
===================
|
==================
|
=======================
|
=================
|
|
Share
capital
|
Share
premium
|
Merger
reserve
|
Retained
deficit
|
Total
equity
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
Balance at 1 August 2023 originally stated
|
9,592
|
23,682
|
2,868
|
(11,619)
|
24,523
|
Comprehensive profit for the year
|
|
|
|
|
|
Loss for the year
attributable to the equity shareholders of the parent
|
-
|
-
|
-
|
(14,356)
|
(14,356)
|
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
------------------------------
|
-------------------------------
|
Total comprehensive profit for the
year
|
-
|
-
|
-
|
(14,356)
|
(14,356)
|
|
|
|
|
|
|
Contributions by and distributions to
owners
|
|
|
|
|
|
Issue of share capital (net of
issue costs)
|
-
|
-
|
-
|
-
|
-
|
Share-based payments (note
21)
|
-
|
-
|
-
|
98
|
98
|
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
---------------------------------
|
------------------------------
|
Total contributions by and distributions to
owners
|
-
|
-
|
-
|
98
|
98
|
|
|
|
|
|
|
|
----------------------------------
|
----------------------------------
|
--------------------------------
|
------------------------------
|
----------------------------
|
Balance at 31 July 2024
|
9,592
|
23,682
|
2,868
|
(25,877)
|
10,265
|
|
====================
|
===================
|
==================
|
=======================
|
=================
|
The accompanying notes form part of
these financial statements
Consolidated statement of cash flows
For the year ended 31
July
|
|
2024
|
2023
|
|
Note
|
£000
|
£000
|
Cash flows from / (used in)
operating activities
|
|
|
|
Loss after tax from continuing
operations
|
|
(6,781)
|
(852)
|
Adjustments for:
|
|
|
|
Share-based payments
|
21
|
98
|
48
|
Depreciation
|
12
|
781
|
1,133
|
Impairment / (reversal) of
producing field
|
12
|
189
|
(177)
|
Exploration impairment
|
11
|
4,968
|
1,686
|
Share of loss from joint
venture
|
|
2
|
-
|
Finance income
|
|
(223)
|
-
|
Finance expense
|
7
|
439
|
717
|
Taxation expense recognised in
profit and loss
|
8
|
-
|
(32)
|
(Increase) / decrease in trade and
other receivables
|
|
(416)
|
973
|
Decrease in inventories
|
|
10
|
17
|
Increase / (decrease) in trade and
other payables
|
|
320
|
(765)
|
|
|
------------------------------------
|
------------------------------------
|
Net cash (used in) / generated by
operations
|
|
(613)
|
2,748
|
|
|
|
|
Income taxes paid
|
|
-
|
32
|
|
|
------------------------------------
|
------------------------------------
|
Net cash (used in) / generated by operating
activities
|
|
(613)
|
2,780
|
|
|
=======================
|
=======================
|
Cash flows from / (used in)
investing activities
|
|
|
|
Purchase of property, plant and
equipment
|
|
(679)
|
(564)
|
Purchase of intangible
assets
|
|
(486)
|
(5,047)
|
Investment in joint
venture
|
13
|
(2,138)
|
-
|
Cash guarantee re
Morocco
|
|
-
|
263
|
Cash escrow deposit re
Serenity
|
|
-
|
6,622
|
|
|
-----------------------------------
|
-----------------------------------
|
Net cash (used in) / generated from investing
activities
|
|
(3,303)
|
1,274
|
|
|
====================
|
====================
|
Cash flows (used in) / from
financing activities
|
|
|
|
Gross proceeds from issue of share
capital
|
20
|
-
|
49
|
Proceeds from
borrowings
|
|
-
|
1,000
|
Repayment of borrowings
|
|
-
|
(1,040)
|
Lease liability
payments
|
|
(7)
|
(20)
|
Lease liability interest
payments
|
|
(1)
|
(2)
|
Finance costs
|
|
(1)
|
(35)
|
Disposal of listed
shares
|
|
-
|
29
|
|
|
-----------------------------------
|
-----------------------------------
|
Net cash used in financing activities
|
|
(9)
|
(19)
|
|
|
=====================
|
=====================
|
|
|
|
|
Net (decrease) / increase in cash and cash
equivalents
|
|
(3,925)
|
4,035
|
Exchange gain / (loss) on cash and
cash equivalents
|
|
223
|
(264)
|
Cash and cash equivalents at
beginning of year
|
|
5,165
|
1,394
|
|
|
-----------------------------------
|
-----------------------------------
|
Cash and cash equivalents at end of year
|
|
1,463
|
5,165
|
|
|
=====================
|
=====================
|
The accompanying notes form part of
these financial statements.
Company statement of cash flows
For the year ended 31
July
|
|
2024
|
2023
|
|
|
£000
|
£000
|
Cash flows used in operating
activities
|
Note
|
|
|
(Loss) / profit after tax from
continuing operations
|
|
(14,356)
|
8,964
|
Adjustments for:
|
|
|
|
Share-based payments
|
21
|
98
|
48
|
Depreciation
|
12
|
26
|
38
|
Movement in intercompany loan
provision
|
22
|
15,567
|
(7,997)
|
Finance income
|
|
(2,333)
|
(1,928)
|
Finance expense
|
|
1
|
13
|
(Increase) / decrease in trade and
other receivables
|
|
(105)
|
36
|
Decrease in trade and other
payables
|
|
(101)
|
(273)
|
|
|
-----------------------------------
|
-----------------------------------
|
Net cash used in operating activities
|
|
(1,203)
|
(1,099)
|
|
|
=======================
|
=======================
|
Cash flows from / (used in)
investing activities
|
|
|
|
Purchase of property, plant and
equipment
|
|
(14)
|
(61)
|
Investment in joint
venture
|
|
(2,138)
|
-
|
Movement on loans to Group
companies
|
|
3,407
|
1,052
|
|
|
-----------------------------------
|
-----------------------------------
|
Net cash flows generated from investing
activities
|
|
1,255
|
991
|
|
|
=======================
|
=======================
|
Cash flows used in financing
activities
|
|
|
|
Gross proceeds from issue of share
capital
|
20
|
-
|
49
|
Proceeds from
borrowings
|
|
-
|
1,000
|
Repayment of borrowings
|
|
-
|
(1,040)
|
Lease liability principal
payment
|
|
(7)
|
(15)
|
Lease liability interest
payment
|
|
(1)
|
(1)
|
Finance costs
|
|
(1)
|
(13)
|
|
|
-----------------------------------
|
-----------------------------------
|
Net cash used in financing activities
|
|
(9)
|
(20)
|
|
|
=======================
|
=======================
|
|
|
|
|
Net increase / (decrease) in cash
and cash equivalents
|
|
43
|
(128)
|
Cash and cash equivalents at beginning of
year
|
|
121
|
249
|
|
|
-----------------------------------
|
-----------------------------------
|
Cash and cash equivalents at end of year
|
|
164
|
121
|
|
|
=====================
|
=====================
|
The accompanying notes form part of
these financial statements.
Notes to the financial statements
1
Accounting Policies
General information
Europa Oil & Gas (Holdings)
plc is a public company incorporated and domiciled in England and
Wales, limited by shares, with registered number 05217946. The
address of the registered office is 30 Newman Street, London, W1T
1PT. The principal activity of the company is oil and gas
exploration, appraisal, development and production.
The functional and presentational
currency of the Company is Sterling (UK£), which is also the
presentational currency of the Group.
Basis of accounting
The consolidated and individual
Company financial statements have been prepared in accordance with
applicable UK adopted International Accounting
Standards.
The accounting policies that have
been applied in the opening statement of financial position have
also been applied throughout all periods presented in these
financial statements. These accounting policies comply with each
IFRS that is mandatory for accounting periods ending on 31 July
2024.
Going concern
The directors have prepared a cash
flow forecast for the period ending 31 October 2025 (the "going
concern period"), which considers the continuing and forecast cash
inflow from the Group's producing assets, the cash held by the
Group at October 2024, less administrative expenses and planned
capital expenditure.
As at 31 July 2024 the Group had
cash of £1.5 million and net current assets of £1.4 million and no
borrowings.
Oil price estimates for the base
case cash flow forecast are based on the Quarter 3 ERCE forward
price curve, which assumes an average oil price in 2025 of $81.70
per barrel, whilst production estimates are sourced from the
January 2024 Competent Person's Report for Wressle and augmented by
the Group's internal modelling taking into account recent actual
production. The Group has planned, but as yet not-committed,
capital expenditures related to its projects for which the timing
of the expenditure is uncertain and depends on factors outside the
control of the Group, such as being granted planning consents and
permits to conduct operations. The directors have considered
multiple scenarios in relation to the timing of expenditures,
including capital expenditure. The directors have also stress
tested various cash flow scenarios with extreme downside
assumptions such as a $65 per barrel oil price and a 50% reduction
in Wressle volumes.
For the going concern period the
Group has forecast expenditure, including potential capital
expenditure, in excess of its currently available cash resources
and cash inflows from its producing assets. For the Group to pursue
all of its capital projects in a timely and efficient manner it is
likely to require additional funding during the going concern
period to enable it to meet its obligations as they fall due. In
addition, should either or both of the extreme downside scenarios
materialise, the need for further funding could be
accelerated.
Having considered the prepared
cashflow forecasts, likely availability of investor support and
asset-backed debt, the directors consider that they will have
access to adequate resources during the going concern period. As a
result, they consider it appropriate to continue adopting the going
concern basis in the preparation of the financial
statements.
There can be no assurance that the
cash received from fund raises and debt issuance will match the
directors' expectations, and this may affect the Group's ability to
carry out its work programmes as expected.
Should the Group and Company be
unable to continue trading as a going concern, adjustments would
have to be made to reduce the value of the assets to their
recoverable amounts, to provide for further liabilities which might
arise and to classify non-current assets as current. The financial
statements have been prepared on the going concern basis and do not
include the adjustments that would result if the Group and Company
were unable to continue as a going concern.
The directors have concluded, as
at the date of approval of these financial statements, that there
is a reasonable expectation that the Group and Company will still
have sufficient cash resources to be able to continue as a going
concern and meet its obligations as and when they fall due over the
going concern period.
Basis of consolidation
Where the Company has control over
an investee, it is classified as a subsidiary. The Company controls
an investee if all three of the following elements are present:
power over the investee, exposure to variable returns from the
investee, and the ability of the investor to use its power to
affect those variable returns. Control is reassessed whenever facts
and circumstances indicate that there may be a change in any of
these elements of control. Intra Group balances are eliminated on
consolidation. Unrealised gains on transactions between the Group
and its subsidiaries are eliminated. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Amounts reported in the
financial statements of subsidiaries have been adjusted where
necessary to ensure consistency with the accounting policies
adopted by the Group.
The Group is engaged in oil and
gas exploration, development and production through unincorporated
joint operations.
Joint arrangements
Joint arrangements are those
arrangements in which the Group holds an interest on a long-term
basis which are jointly controlled by the Group and one or more
venturers under a contractual arrangement. When these arrangements
do not constitute entities in their own right, the consolidated
financial statements reflect the relevant proportion of costs,
revenues, assets and liabilities applicable to the Group's
interests in accordance with IFRS 11. The Group's exploration,
development and production activities are presently conducted
jointly with other companies in this way.
For the licences where the Group
does not hold 100% equity a joint arrangement exists. The equity
and voting interest of the Group is disclosed in the table,
activities are typical for activities in the oil and gas sector and
are strategic to the Group's activities. The principal place of
business for all the joint arrangements is the UK.
Investments in joint
ventures
Investments in joint ventures shall
be recognised when the Group has joint control and rights to the
net assets of the arrangement. The equity method of accounting will
be applied to investments in joint ventures. Under this method, the
Group's investment is initially recognised at cost, including
direct incremental transaction costs, and adjusted thereafter for
the post-acquisition change in the Group's share of net assets of
the joint venture. The Group's share of joint ventures' profit or
loss is recognised in the Group's statement of comprehensive
income. Where necessary, adjustments are made to the financial
statements of joint ventures to bring the accounting policies used
into line with those of the Group. Distributions received from
joint ventures will reduce the carrying amount of the investments.
Unrealised gains or losses on other transactions between the Group
and its joint ventures are eliminated to the extent of the Group's
interest in them. At each reporting date, the Group will assess
whether there is any indication that investments in joint ventures
may be impaired. An impairment loss will be recognised when the
recoverable amount of the investment is less than its carrying
amount. The Company will recognise its investment in the joint
venture at cost less impairment losses.
Revenue recognition
The Group follows IFRS 15. The
standard provides a single comprehensive model for revenue
recognition. The core principle of the standard is that an entity
shall recognise revenue when control passes on the transfer of
promised goods or services to customers at an amount that reflects
the consideration to which the entity expects to be entitled in
exchange for those goods or services. The standard introduced a new
contract-based revenue recognition model with a measurement
approach that is based on an allocation of the transaction price.
This is described further in the accounting policies below.
Contracts with customers are presented in an entity's balance sheet
as a contract liability, a contract asset, or a receivable,
depending on the relationship between the entity's performance and
the customer's payment. The Group's accounting policy under IFRS 15
is that revenue is recognised when the Group satisfies a
performance obligation by transferring oil to a customer. The title
to oil and gas typically transfers to a customer at the same time
as the customer takes physical possession of the oil or gas.
Typically, at this point in time, the performance obligations of
the Group are fully satisfied.
Revenue is measured based on the
consideration to which the Group expects to be entitled under the
terms of a contract with a customer. The consideration is
determined by the quantity and price of oil and gas delivered to
the customer at the end of each month.
Non-current assets
Oil and gas interests
The financial statements with
regard to oil and gas exploration and appraisal expenditure have
been prepared under the full cost basis. This accords with IFRS 6
which permits the continued application of a previously adopted
accounting policy. The unit of account for exploration and
evaluation assets is the individual licence.
Pre-production assets
Pre-production assets are
categorised as intangible assets on the statement of financial
position. Pre-licence expenditure is expensed as directed by IFRS
6. Expenditure on licence acquisition costs, geological and
geophysical costs, costs of drilling exploration, appraisal and
development wells, and an appropriate share of overheads (including
directors' costs) are capitalised and accumulated on a
licence-by-licence basis. These costs which relate to the
exploration, appraisal and development of oil and gas interests are
initially held as intangible non-current assets pending
determination of technical feasibility and commercial viability. On
commencement of production these costs are tested for impairment
prior to transfer to production assets. If licences are
relinquished, or assets are not deemed technically feasible or
commercially viable, accumulated costs are written off to cost of
sales.
Production assets
Production assets are categorised
within property, plant and equipment on the statement of financial
position. With the determination of commercial viability and
approval of an oil and gas project the related pre-production
assets are transferred from intangible non-current assets to
tangible non-current assets and depreciated upon commencement of
production within the appropriate cash generating unit.
Impairment tests
For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there
are separately identifiable cash flows (cash generating units) as
disclosed in notes 11 and 12. As a result, some assets are tested
individually for impairment and some are tested at cash generating
unit level.
Impairment tests are performed
when indicators as described in IAS 36 are identified. In addition,
indicators such as a lack of funding or farmout options for a
licence which is approaching termination or the implied value of a
farm-out transaction are considered as indicators of
impairment.
An impairment loss is recognised
and charged to cost of sales for the amount by which the asset's or
cash generating unit's carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of fair value,
reflecting market conditions less costs to sell, and value in use
based on an internal discounted cash flow evaluation. All assets
are subsequently reassessed for indications that an impairment loss
previously recognised may no longer exist or have decreased. A
previously recognised impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset's or
cash generating unit's recoverable amount since the last impairment
loss was recognised. The reversal is limited so that the carrying
amount of the asset or cash generating unit does not exceed either
its recoverable amount, or the carrying amount that would have been
determined, net of depreciation/amortisation, had no impairment
loss been recognised for the asset or cash generating unit in prior
years. Such a reversal is credited to cost of sales.
Property, plant and
equipment
Items of property, plant and
equipment are initially recognised at cost. As well as the purchase
price, cost includes directly attributable costs and the estimated
present value of any future unavoidable costs of dismantling and
removing items. The corresponding liability is recognised within
provisions.
Depreciation
All expenditure within tangible
non-current assets is depreciated from the commencement of
production, on a unit of production basis, which is the ratio of
oil and gas production in the period to the estimated quantities of
proven plus probable commercial reserves at the end of the period,
plus the production in the period. Costs used in the unit of
production calculation comprise the net book value of capitalised
costs. Changes in the estimates of commercial reserves or future
field development costs are dealt with prospectively.
Furniture and computers are
depreciated on a 25% per annum straight line basis.
Reserves
Proven and probable oil and gas
reserves are estimated quantities of commercially producible
hydrocarbons which the existing geological, geophysical and
engineering data shows to be recoverable in future years. The
proven reserves included herein conform to the definition approved
by the Society of Petroleum Engineers ('SPE') and the World
Petroleum Congress ('WPC'). The probable and possible reserves
conform to definitions of probable and possible approved by the
SPE/WPC using the deterministic methodology. Reserves used in
accounting estimates for depreciation are updated periodically to
reflect management's view of reserves in conjunction with third
party formal reports. Reserves are reviewed at the time of formal
updates or as a consequence of operational performance, plans and
the business environment at that time.
Reserves are adjusted in the year
that formal updates are undertaken or as a consequence of
operational performance and plans, and the business environment at
that time, with any resulting changes not applied
retrospectively.
Future decommissioning
costs
A provision for decommissioning is
recognised in full at the point that the Group has an obligation to
decommission an appraisal, development or producing well. A
corresponding non-current asset (included within producing fields
in note 12) of an amount equivalent to the provision is also
created. The amount recognised is the estimated cost of
decommissioning, discounted to its net present value and is
reassessed each year in accordance with local conditions and
requirements. The discount rate used is the risk-free rate,
adjusted for risks that are not already included in the forecast
cash flows. For producing wells, the asset is subsequently
depreciated as part of the capital costs of production facilities
within tangible non-current assets, on a unit of production basis.
Any decommissioning obligation in respect of a pre-production asset
is carried forward as part of its cost and tested annually for
impairment in accordance with the above policy.
Changes in the estimates of
commercial reserves or decommissioning cost estimates are dealt
with prospectively by recording an adjustment to the provision, and
a corresponding adjustment to the decommissioning asset. The
unwinding of the discount on the decommissioning provision is
included within finance expense.
Acquisitions of exploration
licences
Acquisitions of exploration
licences through acquisition of non-operational corporate
structures that do not represent a business, and therefore do not
meet the definition of a business combination, are accounted for as
the acquisition of an asset. Related future consideration that is
contingent is not recognised as an asset or liability until the
contingent event has occurred.
Taxation
Current tax is the tax payable
based on taxable profit/(loss) for the year.
Deferred income taxes are
calculated using the balance sheet 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 Group and it is probable that
reversal will not occur in the foreseeable future. Tax losses
available to be carried forward as well as other income tax credits
to the Group are assessed for recognition as deferred tax
assets.
Deferred tax liabilities are
provided in full, with no discounting. Deferred tax assets are
recognised to the extent that it is probable that the underlying
deductible temporary difference will be able to be offset against
future taxable income. Current and deferred tax assets and
liabilities are calculated at tax rates that are expected to apply
to their respective period of realisation, provided they are
enacted or substantively enacted at the reporting date.
Changes in deferred tax assets or
liabilities are recognised as a component of tax expense in the
statement of comprehensive income, 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.
Foreign currency
The Group and Company prepare
their financial statements in Sterling.
Transactions denominated in
foreign currencies are translated at the rates of exchange ruling
at the date of the transaction. Monetary assets and liabilities in
foreign currencies are translated at the rates of exchange ruling
at the reporting date. Non-monetary items that are measured at
historical cost in a foreign currency are translated at the
exchange rate at the date of transaction. Non-monetary items that
are measured at fair value in a foreign currency are translated
using the exchange rates at the date the fair value was
determined.
Any exchange differences arising
on the settlement of items or on translating items at rates
different from those at which they were initially recorded are
recognised in the Statement of comprehensive income in the period
in which they arise. Exchange differences on non-monetary items are
recognised in the Statement of changes in equity to the extent that
they relate to a gain or loss on that non-monetary item taken to
the Statement of changes in equity, otherwise such gains and losses
are recognised in the Statement of comprehensive income.
Europa Oil & Gas (Holdings)
plc is domiciled in the UK, which is its primary economic
environment and the Company's functional currency is Sterling. The
Group's current operations are based in the UK and Ireland and the
functional currencies of the Group's entities are the prevailing
local currencies in each jurisdiction. Given that the functional
currency of the Company is Sterling, management has elected to
continue to present the consolidated financial statements of the
Group and Company in Sterling.
Investments
Investments, which are only
investments in subsidiaries, are carried at cost less any
impairment. Additions include the net value of share options issued
to employees of subsidiary companies less any lapsed, unvested
options.
Financial instruments
Financial assets and financial
liabilities are recognised in the statement of financial position
when the Group becomes a party to the contractual provisions of the
instrument.
Financial assets
Financial assets are classified as
either financial assets at amortised cost, at fair value through
other comprehensive income ('FVTOCI') or at fair value through
profit or loss ('FVPL') depending upon the business model for
managing the financial assets and the nature of the contractual
cash flow characteristics of the financial asset.
A loss allowance for expected
credit losses is determined for all financial assets, other than
those at FVPL, at the end of each reporting period. The Group
applies a simplified approach to measure the credit loss allowance
for trade receivables using the lifetime expected credit loss
provision. The lifetime expected credit loss is evaluated for each
trade receivable taking into account payment history, payments made
subsequent to year end and prior to reporting, past default
experience and the impact of any other relevant and current
observable data. The Group applies a general approach on all other
receivables classified as financial assets. The general approach
recognises lifetime expected credit losses when there has been a
significant increase in credit risk since initial
recognition.
The Group derecognises a financial
asset when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially
all the risks and rewards of ownership of the asset to another
party. The Group derecognises financial liabilities when the
Group's obligations are discharged, cancelled or have
expired.
Fair value through other
comprehensive income
The Group has a number of
strategic investments in listed and unlisted entities which are not
accounted for as subsidiaries, associates or jointly controlled
entities. For those investments, the Group has made an irrevocable
election to classify the investments at fair value through other
comprehensive income rather than through profit or loss as the
Group considers this measurement to be the most representative of
the business model for these assets. They are carried at fair value
with changes in fair value recognised in other comprehensive income
and accumulated in the fair value through other comprehensive
income reserve. Upon disposal any balance within fair value through
other comprehensive income reserve is reclassified directly to
retained earnings and is not reclassified to profit or
loss.
Dividends are recognised in profit
or loss, unless the dividend clearly represents a recovery of part
of the cost of the investment, in which case the full or partial
amount of the dividend is recorded against the associated
investment's carrying amount.
Purchases and sales of financial
assets measured at fair value through other comprehensive income
are recognised on settlement date with any change in fair value
between trade date and settlement date being recognised in the fair
value through other comprehensive income reserve.
Amortised cost
This category is the most relevant
to the Company. Loans and receivables are non-derivative financial
assets with fixed or determinable payments that are not quoted in
an active market. The losses arising from impairment are recognised
in a separate line in the income statement. This category generally
applies to trade and other receivables.
Cash and cash
equivalents
Cash and cash equivalents are
carried at cost and include all highly liquid investments with a
maturity of three months or less.
Restricted cash are those amounts
held by third parties on behalf of the Group and are not available
for the Group's use; these are recognised separately from cash and
cash equivalents on the balance sheet.
Financial liabilities
The classification of financial
liabilities at initial recognition depends on the purpose for which
the financial liability was issued and its characteristics. All
purchases of financial liabilities are recorded on the trade date,
being the date on which the Group becomes party to the contractual
requirements of the financial liability. Unless otherwise indicated
the carrying amounts of the Group's financial liabilities
approximate to their fair values. The Group's financial liabilities
consist of financial liabilities measured at amortised cost and
financial liabilities at fair value through profit or
loss.
Trade and other payables
Trade and other payables are
initially recorded at fair value and subsequently carried at
amortised cost.
Derecognition of financial
liabilities
A financial liability (in whole or
in part) is derecognised when the Group has extinguished its
contractual obligations, it expires or is cancelled. Any gain or
loss on derecognition is taken to the statement of comprehensive
income.
Treatment of finance
costs
All finance costs are expensed
through the income statement. The Group does not incur any finance
costs that qualify for capitalisation.
Defined contribution pension
schemes
The pension costs charged against
profits are the contributions payable to the scheme in respect of
the accounting period.
Inventories
Inventories comprise oil in tanks
stated at the lower of cost and net realisable value. Cost is
determined by reference to the actual cost of production in the
period.
Share-based payments
All goods and services received in
exchange for the grant of any share-based payment are measured at
their fair values. Where employees are rewarded using share-based
payments, the fair values of employees' services are determined
indirectly by reference to the fair value of the instrument granted
to the employee. This fair value is appraised at the grant date and
excludes the impact of non-market vesting conditions (for example,
profitability and sales growth targets).
All equity-settled share-based
payments are ultimately recognised as an expense in the statement
of comprehensive income with a corresponding credit to reserves.
Where options over the parent Company's shares are granted to
employees of subsidiaries of the parent, the charge is recognised
in the statement of comprehensive income of the subsidiary. In the
parent Company accounts there is an increase in the cost of the
investment in the subsidiary receiving the benefit.
If vesting periods or other
non-market vesting conditions apply, the expense is allocated over
the vesting period, based on the best available estimate of the
number of share options expected to vest. Estimates are
subsequently revised if there is any indication that the number of
share options expected to vest differs from previous estimates. Any
cumulative adjustment prior to vesting is recognised in the current
period. No adjustment is made to any expense recognised in prior
periods if the number of share options ultimately exercised is
different to that initially estimated.
Upon exercise of share options,
the proceeds received, net of attributable transaction costs, are
credited to share capital, and where appropriate share
premium.
Critical accounting judgements and
key sources of estimation uncertainty
Details of the Group's significant
accounting judgements and critical accounting estimates are set out
in these financial statements and include:
Critical accounting
judgements
·
Carrying value of intangible assets (note 11) -
carrying values are justified with reference to indicators of
impairment as set out in IFRS 6. Based on judgements at 31 July
2024 there was £4,968k write off (2023: £1,686k). On 13 September
2024 the Company announced that it does not intend to apply to the
North Sea Transition Authority for an extension to the Serenity
licence, which expired on 30 September 2024. The directors
considered this an adjusting event in relation to the year ended 31
July 2024 and as a result, the incurred costs associated with
Serenity that the Company has capitalised on its balance sheet were
written off.
The Phase 1 period of the FEL 4/19
licence was extended on 29 January 2024 for a for a further period
until 31 January 2026. The impairment indicator in relation to the
near-term expiry date of the licence that existed as at 31 July
2023 no longer existed as at 31 January 2024.
·
Carrying value of investment in joint venture
(note 13a) - the investment in Antler Global Limited was assessed
to establish whether the investment may be impaired with
consideration of the principles in IAS28 and IAS36. In making this
assessment management applies judgement to evaluate both external
and internal sources of information, including the financial
performance of the joint venture, market conditions, changes in the
operating environment in which the joint venture operates and other
relevant factors. Based on the current review, the directors have
not identified any indicators of impairment in relation to this
investment in the joint venture as at 31 July 2024.
Critical accounting
estimates
·
Carrying value of property, plant and equipment
(note 12) - carrying values are justified by reference to future
estimates of cash flows, discounted at appropriate rates. The
directors estimates variables like reserves volumes, future oil
prices, future capital and operating expenditure and discount
rates. The directors rely on third party formal reports and
historical reservoir performance to establish the appropriate
reserves volumes and production profiles to use in estimating
future cash flows. Future costs are based on internal or joint
venture budgets, and discount rates are estimated with reference to
applicable external and internal data sources. The directors
utilise management's view on external analyst datasets in relation
to oil and gas price forecasts. At 31 July 2024 there was an net
impairment of £189k of producing assets, comprising mainly of the
impairment of workover costs incurred in relation to the Crosby
Warren field (2023: £177k impairment reversal).
·
Deferred taxation (note 20) - assumptions
regarding the future profitability of the Group and whether the
deferred tax assets will be recovered.
·
Decommissioning provision (note 21) - inflation
and discount rate estimates (3% and 10% respectively) are used in
calculating the provision, along with third party estimates of
remediation costs.
·
Share-based payments (note 23) - measurement of
the fair value of options granted uses valuation techniques where
active market quotes are not available. This involves developing
estimates and assumptions consistent with how market participants
would price the instrument. Management bases its assumptions on
observable data as far as possible but this is not always
available. In that case, management uses the best information
available. Estimated fair values may vary from the actual prices
that would be achieved in an arm's length transaction at the
reporting date.
·
Reserves and resources (note 12) - reserves and
resources are estimated based on management's view and third-party
formal reports and these estimates directly impact the
recoverability of asset carrying values that are reported in the
financial statements.
2
Operating segment analysis
In the opinion of the directors the Group has
four reportable segments as reported to the chief executive
officer, being the UK, Ireland and West Africa.
The reporting on these segments to management
focuses on revenue, operating costs and capital expenditure. The
impact of such criteria is discussed further in the Chairman's
statement and strategic report of this annual report.
Income statement for the year ended
31 July 2024
|
UK
|
Ireland
|
West
Africa
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
Revenue
|
3,566
|
-
|
-
|
3,566
|
Cost of sales
|
(3,117)
|
-
|
-
|
(3,117)
|
Impairment of producing fields
|
(189)
|
-
|
-
|
(189)
|
Cost of sales
|
(3,306)
|
-
|
-
|
(3,306)
|
|
---------------------------------
|
---------------------------------
|
---------------------------------
|
---------------------------------
|
Gross profit
|
260
|
-
|
-
|
260
|
|
|
|
|
|
|
|
|
|
|
Exploration impairment
|
(4,968)
|
-
|
-
|
(4,968)
|
Administrative expenses
|
(1,855)
|
-
|
-
|
(1,855)
|
Share of loss from joint
venture
|
-
|
-
|
(2)
|
(2)
|
Finance income
|
222
|
1
|
-
|
223
|
Finance costs
|
(439)
|
-
|
-
|
(439)
|
|
-----------------------------------
|
---------------------------------
|
---------------------------------
|
-----------------------------------
|
Loss before tax
|
(6,780)
|
1
|
(2)
|
(6,781)
|
|
|
|
|
|
Taxation
|
-
|
-
|
-
|
-
|
|
-----------------------------------
|
---------------------------------
|
---------------------------------
|
-----------------------------------
|
Loss for the year
|
(6,780)
|
1
|
(2)
|
(6,781)
|
Segmental
assets and liabilities as at 31 July 2024
|
UK
|
Ireland
|
West Africa
|
Total
|
|
£000
|
£000
|
£'000
|
£000
|
Non-current assets
|
2,127
|
2,465
|
2,406
|
6,998
|
Current assets
|
2,781
|
-
|
-
|
2,781
|
|
-----------------------------------
|
---------------------------------
|
--------------------------------
|
-----------------------------------
|
Total assets
|
4,908
|
2,465
|
2,406
|
9,779
|
|
-----------------------------------
|
-----------------------------------
|
--------------------------------
|
-----------------------------------
|
|
|
|
|
|
Non-current liabilities
|
(4,613)
|
-
|
-
|
(4,613)
|
Current liabilities
|
(1,081)
|
(19)
|
(287)
|
(1,387)
|
|
-----------------------------------
|
-----------------------------------
|
---------------------------------
|
-----------------------------------
|
Total liabilities
|
(5,694)
|
(19)
|
(287)
|
(6,000)
|
|
-----------------------------------
|
-----------------------------------
|
--------------------------------
|
-----------------------------------
|
|
|
|
|
|
Other segment items
|
|
|
|
|
Capital expenditure - cash
flow
|
882
|
283
|
2,138
|
3,303
|
Depreciation
|
781
|
-
|
-
|
781
|
Share-based payments
|
98
|
-
|
-
|
98
|
Income statement for the year ended
31 July 2023
|
UK
|
Ireland
|
Morocco
|
New
ventures
|
Total
|
|
£000
|
£000
|
£'000
|
£000
|
£000
|
Revenue
|
6,653
|
-
|
-
|
-
|
6,653
|
Cost of sales
|
(3,448)
|
-
|
-
|
-
|
(3,448)
|
Impairment of producing fields
|
177
|
-
|
-
|
-
|
177
|
Cost of sales
|
(3,271)
|
-
|
-
|
-
|
(3,271)
|
|
---------------------------------
|
---------------------------------
|
---------------------------------
|
---------------------------------
|
---------------------------------
|
Gross profit
|
3,382
|
-
|
-
|
-
|
3,382
|
|
|
|
|
|
|
|
|
|
|
|
|
Exploration impairment
|
-
|
-
|
(1,686)
|
-
|
(1,686)
|
Administrative expenses
|
(2,078)
|
227
|
-
|
(21)
|
(1,872)
|
Finance income
|
(4)
|
4
|
9
|
-
|
9
|
Finance costs
|
(717)
|
-
|
-
|
-
|
(717)
|
|
-----------------------------------
|
---------------------------------
|
---------------------------------
|
---------------------------------
|
-----------------------------------
|
Loss before tax
|
582
|
232
|
(1,677)
|
(21)
|
(884)
|
|
|
|
|
|
|
Taxation
|
32
|
-
|
-
|
-
|
32
|
|
-----------------------------------
|
---------------------------------
|
---------------------------------
|
---------------------------------
|
-----------------------------------
|
Loss for the year
|
615
|
231
|
(1,677)
|
(21)
|
(852)
|
Segmental
assets and liabilities as at 31 July 2023
|
UK
|
Ireland
|
Morocco
|
New
Ventures
|
Total
|
|
£000
|
£000
|
£000
|
£'000
|
£000
|
Non-current assets
|
7,380
|
2,183
|
-
|
-
|
9,563
|
Current assets
|
6,077
|
-
|
-
|
-
|
6,077
|
|
-----------------------------------
|
---------------------------------
|
-----------------------------------
|
--------------------------------
|
-----------------------------------
|
Total assets
|
13,457
|
2,183
|
-
|
-
|
15,640
|
|
-----------------------------------
|
-----------------------------------
|
-----------------------------------
|
--------------------------------
|
-----------------------------------
|
|
|
|
|
|
|
Non-current liabilities
|
(4,380)
|
-
|
-
|
-
|
(4,380)
|
Current liabilities
|
(762)
|
(19)
|
-
|
-
|
(781)
|
|
-----------------------------------
|
-----------------------------------
|
-----------------------------------
|
---------------------------------
|
-----------------------------------
|
Total liabilities
|
(5,142)
|
(19)
|
-
|
-
|
(5,161)
|
|
-----------------------------------
|
-----------------------------------
|
-----------------------------------
|
--------------------------------
|
-----------------------------------
|
|
|
|
|
|
|
Other segment items
|
|
|
|
|
|
Capital expenditure - cash
flow
|
4,925
|
387
|
299
|
-
|
5,611
|
Depreciation
|
1,133
|
-
|
-
|
-
|
1,133
|
Share-based payments
|
48
|
-
|
-
|
-
|
48
|
100% of the total revenue (2023:
100%) relates to UK-based customers. Of this figure, one end
customer (2023: one) commands more than 95% of the total, including
sales made through operators to the end customer.
UK revenue by site was as follows: West Firsby
£445,000 (2023: £489,000); Crosby Warren £264,000 (2023: £447,000);
Whisby £202,000 (2023: £387,000); and Wressle £2,559,000 (2023:
£5,330,000). Recharges of costs to Antler Global Limited of £96,000
(2023: Nil) is included within revenue and is not
eliminated.
The positive value for
administrative expenditure in the Ireland segment in 2023 relates
to the reversal of certain accrued licence expenditure which had
previously been impaired.
3
Profit / loss before taxation
Profit / loss before taxation is
stated after charging/ (crediting):
|
|
2024
|
2023
|
|
|
£000
|
£000
|
Depreciation and amortisation on
property, plant & equipment
|
12
|
781
|
1,133
|
Staff costs including
directors
|
5
|
1,468
|
1,371
|
Diesel
|
|
131
|
174
|
Business rates
|
|
41
|
37
|
Site safety and
security
|
|
97
|
98
|
Exploration impairment
|
11
|
4,968
|
1,686
|
Impairment / impairment
reversal
|
12
|
189
|
(177)
|
Fees payable to the auditor for
the audit
|
|
80
|
78
|
Operating leases - land and
buildings
|
|
77
|
44
|
Foreign exchange (gain) /
loss
|
|
(208)
|
264
|
|
|
==========
|
=========
|
4
Directors' emoluments
Directors' total emoluments for the Group and
the Company are set out in the tables below for the current and
comparative years.
|
Salaries and
fees
|
BIK
|
Pensions
|
Share-based
payments
|
Total
2024
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
BJ O'Cathain
|
48
|
-
|
-
|
-
|
48
|
SG Oddie (resigned 23 November 2023)
|
11
|
1
|
-
|
-
|
12
|
S Williams (resigned 23 November 2023)
|
11
|
-
|
-
|
-
|
11
|
W Holland
|
263
|
3
|
20
|
49
|
335
|
A Stuart
|
198
|
6
|
16
|
22
|
242
|
S Ashby-Rudd (appointed 20 December 2023)
|
27
|
-
|
-
|
-
|
27
|
E Rowley (appointed 8 April 2024)
|
13
|
-
|
|
-
|
13
|
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
|
571
|
10
|
36
|
71
|
688
|
|
==================
|
==================
|
==================
|
==================
|
==================
|
|
Salaries and
fees
|
BIK
|
Pensions
|
Share-based
payments
|
Total
2023
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
CW Ahlefeldt-Laurvig (resigned 27
April 2023)
|
18
|
2
|
-
|
-
|
20
|
BJ O'Cathain
|
44
|
5
|
-
|
1
|
50
|
SG Oddie
|
344
|
47
|
-
|
4
|
395
|
S Williams
|
33
|
3
|
-
|
1
|
37
|
W Holland
|
230
|
32
|
18
|
38
|
318
|
A Stuart (appointed 3 April
2023)
|
53
|
7
|
5
|
-
|
65
|
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
----------------------------------
|
|
722
|
96
|
23
|
44
|
885
|
|
==================
|
==================
|
==================
|
==================
|
==================
|
Pension charges represent premiums paid to
money purchase pension plans during the year. Share-based payments
charges represent the accounting charge in respect of share
options. No share options were exercised during the period (2023:
none).
5
Employee information
Average monthly number of employees including directors -
Group
|
2024
|
2023
|
|
Number
|
Number
|
Management and
technical
|
8
|
7
|
Field exploration and
production
|
4
|
5
|
|
----------------------------------
|
----------------------------------
|
|
12
|
12
|
|
===================
|
===================
|
Staff costs - Group
|
2024
|
2023
|
|
£000
|
£000
|
Wages and salaries (including
directors' emoluments)
|
1,155
|
1,133
|
Social security
|
136
|
137
|
Pensions
|
79
|
53
|
Share-based payments (note
21)
|
98
|
48
|
|
-----------------------------------
|
-----------------------------------
|
|
1,468
|
1,371
|
|
===================
|
====================
|
Average monthly number of employees including directors -
Company
|
2024 Number
|
2023
Number
|
Management and
technical
|
8
|
7
|
|
----------------------------------
|
----------------------------------
|
|
8
|
7
|
|
====================
|
==================
|
Staff costs - Company
|
2024
|
2023
|
|
£000
|
£000
|
Wages and salaries (including
directors' emoluments)
|
885
|
881
|
Social security
|
103
|
113
|
Pensions
|
63
|
37
|
Share-based payments
|
98
|
48
|
|
-----------------------------------
|
-----------------------------------
|
|
1,149
|
1,079
|
|
====================
|
==================
|
6
Finance income
|
2024
|
2023
|
|
£000
|
£000
|
Bank interest received
|
15
|
9
|
Foreign exchange gains
|
208
|
-
|
|
------------------------------
|
------------------------------
|
|
223
|
9
|
|
==================
|
===================
|
7
Finance expense
|
2024
|
2023
|
|
£000
|
£000
|
Unwinding of discount on
decommissioning provision (note 19)
|
437
|
416
|
Foreign exchange loss
|
-
|
264
|
Other finance expense
|
2
|
37
|
|
------------------------------------
|
------------------------------------
|
|
439
|
717
|
|
===================
|
====================
|
8
Taxation
|
2024
|
2023
|
|
£000
|
£000
|
Movement in deferred tax asset
(note 18)
|
(2,102)
|
1,503
|
Movement in deferred tax liability
(note 18)
|
2,102
|
(1,503)
|
Current tax - UK
|
-
|
32
|
|
------------------------------------
|
------------------------------------
|
Tax credit/(expense)
|
-
|
32
|
|
====================
|
==================
|
UK corporation tax is calculated at 40% (2023:
40%) of the estimated assessable profit for the year being the
applicable rate for a ring-fence trade including the Supplementary
Charge of 10%. From 24 May 2022 a new UK tax, the Excess Profits
Levy ("EPL") applies to the Group, and it is levied at 25% of
assessable EPL profits for the period from 26 May 2022 to 31
December 2022, and at 35% from 1 January 2023 onwards. The proposed
increase to the rate of EPL to 38% had not yet been substantially
enacted as at the reporting date.
|
2024
|
2023
|
|
£000
|
£000
|
Loss before tax
|
(6,781)
|
(884)
|
|
==================
|
==================
|
Tax reconciliation
|
|
|
Loss multiplied by the standard
rate of corporation tax in the UK including Supplementary Charge of
40% (2023: 40%)
|
(2,712)
|
(354)
|
Expenses not deductible for tax
purposes
|
2,581
|
1,003
|
Deferred tax asset not
recognised
|
113
|
192
|
Accelerated capital
allowances
|
(169)
|
(1,802)
|
Taxed at a different
rate
|
(121)
|
(3,995)
|
Losses carried forward
|
949
|
5,172
|
Previously unrecognised tax losses
utilised
|
(641)
|
(266)
|
Prior year adjustment
|
-
|
18
|
|
---------------------------------
|
---------------------------------
|
Total tax
(credit)/expense
|
-
|
(32)
|
|
===================
|
=================
|
9
Other comprehensive income
|
2024
|
2023
|
|
£000
|
£000
|
Profit on sale of
investment
|
-
|
5
|
|
===================
|
================
|
On 8 May 2019, the Group disposed of its
interest in PEDL143 to UK Oil & Gas Plc ('UKOG') for
consideration of 25,951,557 UKOG shares. At the time of the sale
the shares were worth 1.156p each, resulting in a total value of
£300,000. An irrevocable election was made to record gains and
losses arising on the shares as Other Comprehensive Income. The
investment was revalued at the year-end 2022 to £24,000 (0.09p per
share) and was sold during 2023 for £29,000 (0.11p per
share).
10
Earnings per share
Basic earnings per share ('EPS') has been
calculated on the (loss)/profit after taxation divided by the
weighted average number of shares in issue during the period.
Diluted EPS uses an average number of shares adjusted to allow for
the issue of shares on the assumed conversion of all in-the-money
options.
As the Group made a loss from continuing
operations in the year, any potentially dilutive instruments were
considered to be anti-dilutive. Therefore, the diluted EPS is equal
to the basic EPS for the year. As at 31 July 2024 there was Nil
(2023: 19,724,154) potentially dilutive instruments in issue
related to "in the money" options.
The calculation of the basic and diluted
earnings per share is based on the following:
|
2024
|
2023
|
|
£000
|
£000
|
Loss for the year attributable to
the equity shareholders of the parent
|
(6,781)
|
(852)
|
|
=======================
|
=======================
|
Weighted average number of shares
|
|
|
For the purposes of basic
EPS
|
959,184,178
|
958,804,515
|
For the purpose of diluted
EPS
|
959,184,178
|
958,804,515
|
11
Intangible assets
Intangible assets -
Group
|
2024
|
2023
|
|
£000
|
£000
|
At 1 August
|
7,146
|
3,785
|
Additions
|
486
|
5,047
|
Exploration impairment
|
(4,968)
|
(1,686)
|
|
--------------------------------------
|
--------------------------------------
|
At 31 July
|
2,664
|
7,146
|
|
=======================
|
=====================
|
|
|
|
Intangible assets comprise the Group's
pre-production expenditure on licence interests as
follows:
|
2024
£000
|
2023
£000
|
Ireland FEL 4/19
(Inishkea)
|
2,444
|
2,166
|
UK PEDL181
|
-
|
112
|
UK PEDL182 (Broughton
North)
|
35
|
34
|
UK PEDL343 (Cloughton)
|
185
|
108
|
Serenity
|
-
|
4,726
|
|
--------------------------------
|
--------------------------------
|
Total
|
2,664
|
7,146
|
|
=======================
|
=======================
|
|
|
|
Exploration impairment
|
2024
£000
|
2023
£000
|
Morocco (Inezgane)
|
-
|
(1,686)
|
Serenity
|
(4,871)
|
-
|
PEDL 181
|
(97)
|
-
|
On 13 September 2024 the Company announced that
it does not intend to apply to the North Sea Transition Authority
for an extension to the Serenity licence, which expired on 30
September 2024. The directors considered this an adjusting event in
relation to the year ended 31 July 2024 and as a result, the
incurred costs associated with Serenity that the Company has
capitalised on its balance sheet was written off. Details of
commitments are included in note 23.
12
Property, plant & equipment
Property, plant & equipment -
Group
|
Furniture &
computers
|
Producing
fields
|
Right of use
assets
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
Cost
|
|
|
|
|
At 31 July 2022
|
18
|
15,714
|
67
|
15,799
|
Additions
|
38
|
290
|
24
|
352
|
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
At 31 July 2023
|
56
|
16,004
|
91
|
16,151
|
Additions
|
21
|
460
|
-
|
481
|
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
At 31 July 2024
|
77
|
16,464
|
91
|
16,632
|
|
====================
|
====================
|
=================
|
======================
|
Depreciation, depletion and impairment
|
|
|
|
|
At 31 July 2022
|
4
|
12,723
|
51
|
12,778
|
|
|
|
|
|
Charge for year
|
24
|
1,090
|
19
|
1,133
|
Impairment reversal in
year
|
-
|
(177)
|
-
|
(177)
|
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
At 31 July 2023
|
28
|
13,636
|
70
|
13,734
|
Charge for year
|
20
|
753
|
8
|
781
|
Impairment in year
|
-
|
189
|
-
|
189
|
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
At 31 July 2024
|
48
|
14,578
|
78
|
14,704
|
|
===================
|
======================
|
=================
|
====================
|
Net book value
|
|
|
|
|
At 31 July 2022
|
14
|
2,991
|
16
|
3,021
|
|
===============================
|
===============================
|
===============================
|
===============================
|
At 31 July 2023
|
28
|
2,368
|
21
|
2,417
|
|
===============================
|
===============================
|
===============================
|
===============================
|
At 31 July 2024
|
29
|
1,886
|
13
|
1,928
|
|
===============================
|
===============================
|
===============================
|
===============================
|
The producing fields referred to in the table
above are the production assets of the Group, namely the oilfields
at Wressle, Crosby Warren and West Firsby, and the Group's interest
in the Whisby W4 well.
The carrying value of each producing field was
tested for impairment by comparing the carrying value with the
value-in-use. The value-in-use was calculated using a discounted
cash flow model with production decline rates based on engineering
estimates and recent production experience. Brent crude price was
based on the Quarter 3 ERCE forward curve, which assumes an average
oil price per barrel in the table below. For years after 2033 a 2%
inflation factor was applied.
Year
|
Price
|
Year
|
Price
|
Year
|
Price
|
2024
|
$
83.80
|
2028
|
$
82.00
|
2032
|
$89.00
|
2025
|
$
81.70
|
2029
|
$
83.00
|
2033
|
$90.00
|
2026
|
$
79.00
|
2030
|
$
85.00
|
|
|
2027
|
$
80.00
|
2031
|
$
87.00
|
|
|
The post-tax discount rate of 10% (pre-tax
16.67%) is high because of the applicable rates of tax in the UK.
Cash flows were projected over the expected life of the fields
which is expected to be longer than five years.
Based on the assumptions set out above, an
impairment of £189k of producing assets, comprising mainly of the
impairment of workover costs incurred in relation to the Crosby
Warren field (2023: impairment reversal of £177,000) was required.
The recoverable amount was calculated at a discount rate of 10%
(2023: 10%).
Sensitivity to key assumption
changes
Variations to the key
assumptions used in the value-in-use calculation, as outlined
above, would cause impairment of the producing fields as
follows:
|
Impairment of producing
fields £000
|
Production decline rate
|
|
+10%
|
-
|
-10%
|
-
|
Brent crude price per barrel
|
|
$65 flat
|
-
|
$55 flat
|
-
|
Pre-tax discount rate
20%
|
-
|
25%
|
-
|
None of
the variations result in an impairment
individually.
Property, plant & equipment -
Company
|
Furniture &
computers
|
Right of use
assets
|
Total
|
|
£000
|
£000
|
£000
|
Cost
|
|
|
|
At 31 July 2022
|
18
|
37
|
55
|
Additions
|
37
|
24
|
61
|
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
At 31 July 2023
|
55
|
61
|
116
|
Additions
|
14
|
-
|
14
|
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
At 31 July 2024
|
69
|
61
|
130
|
|
====================
|
======================
|
=======================
|
Depreciation
|
|
|
|
At 31 July 2022
|
4
|
25
|
29
|
Charge for year
|
24
|
14
|
38
|
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
At 31 July 2023
|
28
|
39
|
67
|
Charge for year
|
18
|
8
|
26
|
|
-------------------------------
|
-------------------------------
|
-------------------------------
|
At 31 July 2024
|
46
|
47
|
93
|
|
====================
|
==================
|
===================
|
Net book value
|
|
|
|
At 31 July 2022
|
14
|
12
|
26
|
|
===============================
|
===============================
|
===============================
|
At 31 July 2023
|
27
|
22
|
49
|
|
===============================
|
===============================
|
===============================
|
At 31 July 2024
|
23
|
14
|
37
|
|
===============================
|
===============================
|
===============================
|
13
Investments
13a) Investment in joint
ventures
|
Group
|
Company
|
|
2024
|
2023
|
2024
|
2023
|
|
£000
|
£000
|
£000
|
£000
|
Investment in Antler Global
Limited
|
2,406
|
-
|
2,425
|
-
|
On 20 December 2023, the Company
completed the acquisition of an interest of 42.9% in Antler Global
Limited ("Antler") by way of a subscription for 750,000 new
ordinary shares for a total cash consideration of US$3,000,000
(£2,353,000). The consideration is payable in four instalments over
a period between the completion date and 1 October 2024 according
to the following schedule:
|
|
|
|
$000
|
£000
|
Five business days post
completion
|
1,927
|
1,511
|
1 April 2024
|
387
|
304
|
1 July 2024
|
317
|
249
|
1 October 2024
|
369
|
289
|
|
-----------------------
|
--------------------------
|
Total
|
3,000
|
2,353
|
|
===========
|
=============
|
Antler is a special purpose entity
which on the date of the subscription for shares by the Company
held no identifiable assets, apart from the interest in licence
EG-08 offshore Equatorial Guinea, and no identifiable liabilities.
The investment has been initially recognised at the value of the
purchase price and direct incremental transaction costs of £72,000
for a total investment value of £2,425,000. During the period after
the investment by the Company Antler has been engaged in
exploration activities, the costs of which have been capitalised as
intangible assets resulting in an immaterial charge to its
statement of comprehensive income. Summarised financial information
for Antler at 31 July 2024 is included below:
|
|
|
31 July
2024
|
Summarised balance sheet
|
|
|
£000
|
Current assets
|
|
|
981
|
Non-current assets
|
|
|
4,623
|
Current liabilities
|
|
|
(158)
|
Net assets
|
|
|
5,446
|
Company % interest in
Antler
|
|
|
42.857%
|
|
|
|
---------------------
|
Company share of net assets
in
|
|
|
2,334
|
|
|
|
===========
|
|
|
|
31 July
2024
|
Summarised statement of comprehensive
income
|
|
|
£000
|
Revenue
|
|
|
-
|
Loss from continuing
operations
|
|
|
(2)
|
|
|
|
---------------------
|
Total comprehensive
loss
|
|
|
(2)
|
|
|
|
===========
|
13b) Investments in
subsidiaries - Company
|
2024
|
2023
|
|
£000
|
£000
|
At 1 August
|
2,343
|
2,343
|
Current year additions
|
-
|
-
|
|
-----------------------------------------
|
-----------------------------------------
|
At 31 July
|
2,343
|
2,343
|
|
=======================
|
===================
|
The Company's investments at the
reporting date include 100% of the share capital in the following
unlisted companies:
·
Europa Oil & Gas Limited, which undertakes oil and gas
exploration, development and production in the UK.
·
Europa Oil & Gas (West Firsby) Limited, which is
non-trading.
·
Europa Oil & Gas (Ireland West) Limited, which previously
held the interest in the FEL 2/13 licence.
·
Europa Oil & Gas (Ireland East) Limited, which previously
held the interest in the FEL 3/13 and FEL 1/17 licences.
·
Europa Oil & Gas (Inishkea) Limited, which holds the
interest in the FEL 4/19 and previously held the interest in FEL
3/19 licences.
·
Europa Oil & Gas (New Ventures) Limited, which
previously held the interest in the Moroccan licence.
All six companies are registered in England and
Wales, all having their registered office at 30 Newman Street,
London W1T 1PT.
The results of the six companies have been
included in the consolidated accounts.
Europa Oil & Gas Limited owns 100% of the
ordinary share capital of Europa Oil &
Gas (UK) Limited (registered in England and Wales with
registered office at 30 Newman Street, London W1T 1PT
and is non-trading).
14
Inventories - Group
|
2024
|
2023
|
|
£000
|
£000
|
Oil in tanks
|
9
|
19
|
|
======================================
|
======================================
|
15
Trade and other receivables
|
Group
|
Company
|
|
2024
|
2023
|
2024
|
2023
|
Current trade and other receivables
|
£000
|
£000
|
£000
|
£000
|
Trade receivables
|
1,002
|
556
|
133
|
-
|
Other receivables
|
33
|
103
|
12
|
30
|
Corporation tax
receivable
|
50
|
50
|
-
|
-
|
Prepayments
|
224
|
184
|
91
|
99
|
|
--------------------------------
|
--------------------------------
|
-----------------------------------
|
-----------------------------------
|
|
1,309
|
893
|
236
|
129
|
|
=================
|
=================
|
====================
|
====================
|
Non-current other receivables
|
|
|
|
|
Owed by Group undertakings (note
22)
|
-
|
-
|
5,502
|
22,143
|
|
===================
|
===================
|
==================
|
===================
|
16
Trade and other payables
|
Group
|
Company
|
Current trade and other payables
|
2024
|
2023
|
2024
|
2023
|
|
£000
|
£000
|
£000
|
£000
|
Trade payables
|
140
|
454
|
61
|
175
|
Lease liabilities
|
6
|
10
|
6
|
8
|
Other payables
|
1,241
|
317
|
369
|
67
|
|
--------------------------------------
|
--------------------------------------
|
---------------------------------------
|
---------------------------------------
|
|
1,387
|
781
|
436
|
250
|
|
===================
|
===================
|
====================
|
====================
|
Non-current trade and other payables
|
|
|
|
|
Lease liabilities
|
6
|
12
|
6
|
12
|
17
Leases
|
Group
|
Company
|
|
2024
|
2023
|
2024
|
2023
|
|
£000
|
£000
|
£000
|
£000
|
Amounts recognised in the statement of comprehensive
income:
|
|
|
|
|
Interest on right of use
liabilities
|
(1)
|
(1)
|
(1)
|
(1)
|
|
|
|
|
|
Amounts recognised in the statement of cash
flows:
|
|
|
|
|
Repayment of lease liabilities -
principal
|
(7)
|
(20)
|
(7)
|
(15)
|
Repayment of lease liabilities -
interest
|
(1)
|
(2)
|
(1)
|
(1)
|
|
|
|
|
|
Maturity analysis (undiscounted):
|
|
|
|
|
Amounts due within 1
year
|
(6)
|
(9)
|
(6)
|
(8)
|
Amounts due after more than 1 year
& less than 5 years
|
(6)
|
(12)
|
(6)
|
(12)
|
Amounts due after more than 5
years
|
-
|
-
|
-
|
-
|
|
|
|
|
|
The Group's right of use asset comprises the
lease of one vehicle (note 12). The corresponding lease liability
for the right to use leased asset is included within trade and
other payables in the statement of financial position (note
17).
18
Deferred tax - Group
|
2024
|
2023
|
Recognised deferred tax asset:
|
£000
|
£000
|
As at 1 August
|
-
|
-
|
Charged to statement of
comprehensive income
|
-
|
-
|
|
------------------------------------------
|
------------------------------------------
|
At 31 July
|
-
|
-
|
|
======================
|
=======================
|
The Group has a deferred tax liability of
£833,000 (2023: £2,935,000) arising from accelerated capital
allowances and a deferred tax asset of £833,000 (2023: £2,935,000)
arising from trading losses which will be utilised against future
taxable profits. These were offset against each other resulting in
a £nil net asset/liability (2023: £nil net asset/liability). This
offsetting was required because the Group settles current tax
assets and liabilities on a net basis.
Non-recognised
long-term deferred tax asset
The Group has a non-recognised deferred tax
asset of £11.8 million (2023: £7.3 million), which arises in
relation to ring-fenced UK trading losses of £14.4 million (2023:
£13.1 million), STC losses (including investment allowances) of
£14.3 million (2023: £13.1 million), non-ring-fenced UK trading
losses of £11.7 million (2023: £11.7 million), EPL losses of £5.8
million (2023: £4.1) and subsidiary losses and carried forward
capital expenditure of £7.9 million (2023: £7.3 million) that have
not been recognised in the accounts as the timing of the
utilisation of the losses is considered uncertain.
No deferred tax assets or liabilities are
recognised in the Company.
19
Provisions - Group
Decommissioning provisions are based on third
party estimates of work which will be required and the judgement of
directors. By their nature, timing and the detailed scope of work
required are uncertain.
Long-term provisions
|
2024
|
2023
|
|
£000
|
£000
|
As at 1 August
|
4,368
|
4,164
|
Charged to statement of
comprehensive income (note 7)
|
437
|
416
|
Change in estimated phasing of
cash flows
|
(198)
|
(212)
|
|
--------------------------------
|
--------------------------------
|
At 31 July
|
4,607
|
4,368
|
|
===================
|
====================
|
The change in the estimated
decommissioning provision resulted mainly from a reassessment of
the estimated timings of when such decommissioning activities are
undertaken at the end of their economic lives.
Sensitivity to key assumption
changes
Variations to the key assumptions used in the
decommissioning provision estimates would cause increases /
(reductions) to the provision as follows:
|
Further decommissioning
provision £000
|
Inflation rate (current assumption 3%)
|
|
2%
|
(716)
|
5%
|
836
|
Discount rate (current assumption 10%)
5%
|
1,549
|
15%
|
(1,102)
|
No provisions have been recognised in the
Company.
20
Called up share capital
|
2024
|
2023
|
|
£000
|
£000
|
Allotted, called up and fully paid ordinary shares of
1p
|
|
|
At 1 August 2023: 959,184,193
shares (1 August 2022: 956,466,985)
|
9,592
|
9,565
|
Issued in the year: nil shares
(2023: 2,717,193 shares)
|
-
|
27
|
|
--------------------------------
|
--------------------------------
|
At 31 July 2024: 959,184,178 shares (2023:
959,184,178)
|
9,592
|
9,592
|
|
============
|
=============
|
The following describes the purpose of each
reserve within owners' equity:
Reserve
|
Description and purpose
|
Share premium
|
Amount subscribed for share capital
in excess of nominal value
|
Merger reserve
|
Reserve created on issue of shares
on acquisition of subsidiaries in prior years
|
Retained deficit
|
Cumulative net gains and losses
recognised in the consolidated statement of comprehensive
income
|
Foreign currency translation
reserve ('FCTR')
|
Component of equity that arises
from the translation of foreign operations' financial statements
into the reporting currency of the parent entity
|
|
|
21
Share-based payments
The Group operates an approved Enterprise
Management Incentive ('EMI') share option scheme for employees and
an unapproved scheme for grants in excess of EMI limits and for
non-employees. Both schemes are equity-settled share-based payments
as defined in IFRS 2 Share-based payments. A recognised valuation
methodology is employed to determine the fair value of options
granted as set out in the standard. The charge incurred relating to
these options is recognised within operating costs.
Combined information for the two schemes
operated by the Group is set out below.
There are 60,265,474 ordinary 1p share
options/warrants outstanding (2023: 41,550,628).
These are held as follows:
Holder
|
31 July
2024
|
31 July
2023
|
BJ O'Cathain
|
-
|
2,950,000
|
SG Oddie
|
-
|
9,200,000
|
SA Williams
|
-
|
2,500,000
|
W Holland
|
20,000,000
|
7,721,000
|
A Stuart
|
15,000,000
|
-
|
Employees of the Group
|
15,840,000
|
3,800,000
|
Consultants and
advisers
|
9,425,474
|
15,379,628
|
|
---------------------------------------------------
|
---------------------------------------------------
|
Total
|
60,265,474
|
41,550,628
|
|
====================
|
====================
|
The fair values of options were determined
using a Black Scholes Merton model or, in the case of those issued
to advisers as part of the share issue, the fair value was deemed
to be the share issue price. Volatility is based on
the Company's share price volatility since flotation.
During the year Company cancelled 13,191,000
existing EMI options ("Historical EMI Options") and replaced them
with 50,000,000 new EMI options. As the new EMI options were in
part to replace the Historical EMI Options, this grant constitutes
a "modification" and as such there is no acceleration of the costs
related to the cancelled options, but instead the incremental fair
value of the new EMI options is estimated and recognised over the
period of the new options, with the expense relating to the
original (cancelled) options continuing to be recognised over the
remainder of the original vesting period.
In total 14,114,154 options expired and
17,171,000 were cancelled, inclusive of the Historical EMI Options
(2023: 6,520,000 granted, 2,280,000 expired, 1,180,000 forfeited,
and 2,717,193 exercised).
|
2024
Number of
options
|
2024
Average exercise
price
|
2023
Number
of options
|
2023
Average
exercise price
|
Outstanding at the start of the
year
|
41,550,628
|
2.04p
|
41,207,821
|
2.23p
|
Granted -
employees/directors
|
50,000,000
|
1.08p
|
6,520,000
|
1.14p
|
Exercised
|
-
|
|
(2,717,193)
|
1.80p
|
Expired
|
(14,114,154)
|
1.35p
|
(2,280,000)
|
2.31p
|
Forfeited
|
-
|
|
(1,180,000)
|
3.66p
|
Cancelled
|
(17,171,000)
|
2.70p
|
|
|
|
-------------------------------------------------
|
-----------------------------------
|
-------------------------------------------------
|
-----------------------------------
|
Outstanding at the end of the
year
|
60,265,474
|
1.21p
|
41,550,628
|
2.04p
|
Exercisable at the end of the
year
|
10,145,474
|
1.82p
|
23,599,628
|
1.56p
|
The 50,000,000 new EMI options granted in
January 2024 vest in three years, and are exercisable conditional
upon the Europa Oil & Gas (Holdings) plc volume weighted
average share price over the last 20 trading days prior to the
Vesting Date to be greater than or equal to 1.25 times the volume
weighted average share price over the last 20 trading days prior to
the Grant Date, and expire on the tenth anniversary of the grant
date. The inputs used to determine their values are detailed in the
table:
Grant date
|
17
January 2024
|
|
|
Number of options
|
50,000,000
|
|
|
Share price at grant
|
1.025p
|
|
|
Exercise price
|
1.075p
|
|
|
Volatility
|
70.81%
|
|
|
Dividend yield
|
Nil
|
|
|
Risk free investment
rate
|
4.02%
|
|
|
Option life in years
|
10
|
|
|
Fair value per option
|
0.8p
|
|
|
Based on the fair values above, the charge
arising from employee share options was £98,000 (2023:
£48,000). The charge relating to non-employee share
options was £Nil (2023: £Nil). The charge
allocated directly to equity, relating to the issue of options on
the issue of share capital, was £Nil
(2023: £Nil).
Share options/warrants outstanding at the end
of the period have exercise prices ranging from 1.075p to 8p and
the weighted average remaining contractual life at the end of the
period was 8 years (2023: 2.7 years).
22
Financial instruments
The Group's and Company's
financial instruments comprise cash and cash equivalents, bank
borrowings, loans, and items such as trade and other receivables
and trade and other payables which arise directly from its
operations. Europa's activities are subject to a range of financial
risks, the main ones being credit; liquidity; interest rates;
commodity prices; foreign exchange; and capital. These risks are
managed through ongoing review considering the operational,
business and economic circumstances at that time.
Financial assets -
Group
|
Amortised cost
|
Amortised cost
|
Fair
value through other comprehensive income
|
Fair
value through other comprehensive income
|
|
2024
|
2023
|
2024
|
2023
|
|
£000
|
£000
|
£000
|
£000
|
Trade and other
receivables
|
1,085
|
709
|
-
|
-
|
Cash and cash
equivalents
|
1,463
|
5,165
|
-
|
-
|
|
--------------------
|
--------------------
|
-----------------------
|
-----------------------
|
Total financial assets
|
2,548
|
5,874
|
-
|
-
|
|
================================
|
================================
|
=====================================
|
=====================================
|
Financial assets -
Company
|
Amortised cost
|
Amortised cost
|
Fair
value through other comprehensive income
|
Fair
value through other comprehensive income
|
|
2024
|
2023
|
2024
|
2023
|
|
£000
|
£000
|
£000
|
£000
|
Investments
|
2,343
|
2,343
|
-
|
-
|
Amounts due from Group
companies
|
5,502
|
22,143
|
-
|
-
|
Trade and other
receivables
|
145
|
30
|
-
|
-
|
Cash and cash
equivalents
|
164
|
121
|
-
|
-
|
|
--------------------
|
--------------------
|
-----------------------
|
-----------------------
|
Total financial assets
|
8,154
|
24,637
|
-
|
-
|
|
================================
|
================================
|
=====================================
|
=====================================
|
Financial liabilities -
Group
|
Amortised
cost
|
Amortised cost
|
Fair value through other
comprehensive income
|
Fair
value through other comprehensive income
|
|
2023
|
2023
|
2024
|
2023
|
|
£000
|
£000
|
£000
|
£000
|
Trade and other
payables
|
(1,381)
|
(771)
|
-
|
-
|
Lease liabilities
|
(12)
|
(22)
|
-
|
-
|
|
--------------------
|
--------------------
|
---------------------
|
-----------------------
|
Total financial
liabilities
|
(1,393)
|
(793)
|
-
|
-
|
|
================================
|
================================
|
=====================================
|
=====================================
|
Financial liabilities -
Company
|
Amortised
cost
|
Amortised cost
|
Fair value through other
comprehensive income
|
Fair
value through other comprehensive income
|
|
2024
|
2023
|
2024
|
2023
|
|
£000
|
£000
|
£000
|
£000
|
Trade and other
payables
|
(430)
|
(242)
|
-
|
-
|
Lease liabilities
|
(12)
|
(20)
|
-
|
-
|
|
--------------------
|
--------------------
|
---------------------
|
-----------------------
|
Total financial
liabilities
|
(442)
|
(262)
|
-
|
-
|
|
================================
|
================================
|
=====================================
|
=====================================
|
Credit risk
The Group is exposed to credit risk
as all crude oil production is effectively sold to one
multinational oil company. The customer is invoiced monthly for the
oil delivered to the refinery in the previous month and invoices
are generally settled in full within the same month that invoices
are issued. At 31 July 2024 trade receivables were £1,002,000
(2023: £556,000). The fair
value of trade receivables and payables approximates to
their carrying value because of their short maturity.
Any surplus cash is held on short-term deposit with Royal Bank of
Scotland. The maximum credit exposure in the year was
£1,002,000 comprising July 2024 oil sales
and recharges to joint ventures (2023 maximum exposure:
£1,574,000). The Company exposure to
third party credit risk is negligible. The intercompany balances
with its subsidiaries have been appropriately provided for to
account for potential impairments.
Liquidity risk
The Company currently has no overdraft or
overdraft facility with its bankers.
The Group and Company monitor their levels of
working capital to ensure they can meet liabilities as they fall
due. The following table shows the contractual maturities
(representing the undiscounted cash flows) of the Group's and
Company's financial liabilities.
|
Group
|
Company
|
|
Trade and other
payables
|
Trade and other
payables
|
At 31 July
|
2024
|
2023
|
2024
|
2023
|
|
£000
|
£000
|
£000
|
£000
|
6 months or less
|
1,387
|
781
|
436
|
250
|
|
--------------------------------------
|
--------------------------------------
|
---------------------------------------
|
---------------------------------------
|
Total
|
1,387
|
781
|
436
|
250
|
|
================================
|
================================
|
=====================================
|
=====================================
|
Cash and cash equivalents in both Group and
Company are all available at short notice.
Trade and other payables do not normally incur
interest charges. There is no difference between the fair value of
the trade and other payables and their carrying amounts.
Interest rate risk
The Group has no interest-bearing liabilities
(note 18) and immaterial leases (note 19). All loans and leases are
at fixed rates of interest and the Group and Company are not
exposed to changes in interest rates.
Commodity price risk
The selling price of the Group's production of
crude oil is set at a small discount to Brent prices. The table
below shows the range of prices achieved in the year and the
sensitivity of the Group's loss before taxation ('LBT') or profit
before tax ('PBT') to such movements in oil price. There would be a
corresponding increase or decrease to net assets. There is no
commodity price risk in the Company.
Oil price
|
Month
|
2024
Price
US$/bbl
|
2024
PBT
£000
|
2023
Price
US$/bbl
|
2023
PBT
£000
|
Highest
|
April 2024
|
88.90
|
250
|
$98.70
|
1,227
|
Average
|
|
82.40
|
(9)
|
$83.30
|
(2)
|
Lowest
|
December 2023
|
76.60
|
(239)
|
$73.40
|
(791)
|
Foreign exchange risk
The Group's production of crude oil is invoiced
in US$. Revenue is translated into Sterling using a monthly
exchange rate set by reference to the market rate. The table below
shows the range of average monthly US$ exchange rates used in the
year and the sensitivity of the Group's PBT / LBT to similar
movements in US$ exchange. There would be a corresponding increase
or decrease in net assets.
|
|
2024
|
2024
|
2023
|
2023
|
US
Dollar
|
Month
|
Rate
US$/£
|
PBT
£000
|
Rate
US$/£
|
PBT
£000
|
Highest
|
July 2024
|
1.284
|
(187)
|
1.286
|
(410)
|
Average
|
|
1.260
|
(127)
|
1.212
|
(30)
|
Lowest
|
October 2023
|
1.218
|
(17)
|
1.117
|
535
|
The table below shows the Group's currency
exposures. Exposures comprise the net financial assets and
liabilities of the Group that are not denominated in the functional
currency.
|
|
Group
|
Company
|
|
|
2024
|
2023
|
2024
|
2023
|
Currency
|
Item
|
£000
|
£000
|
£000
|
£000
|
Euro
|
Cash and cash
equivalents
|
2
|
18
|
2
|
-
|
|
Trade and other
payables
|
(5)
|
(9)
|
(5)
|
(9)
|
US Dollar
|
Cash and cash
equivalents
|
1,219
|
5,102
|
68
|
75
|
|
Trade and other
receivables
|
-
|
556
|
-
|
-
|
|
Trade and other
payables
|
869
|
(47)
|
133
|
(47)
|
|
|
----------------------------
|
----------------------------
|
----------------------------
|
----------------------------
|
Total
|
|
2,085
|
5,620
|
198
|
(19)
|
|
|
====================
|
===================
|
======================
|
======================
|
Capital risk management
The Group's objectives when
managing capital are to safeguard the Group's ability to continue
as a going concern in order to provide returns for shareholders and
maintain an optimal capital structure to reduce the cost of
capital. The Group defines capital as being the consolidated
shareholder equity (note 22) and third-party borrowings (£Nil at 31
July 2024). The Board monitors the level of capital as compared to
the Group's long-term debt commitments and adjusts the ratio of
debt to capital as is determined to be necessary, by issuing new
shares, reducing or increasing debt, paying dividends and returning
capital to shareholders.
Intercompany loans
The loans to the subsidiaries are not
classified as repayable on demand. IFRS 9 requires consideration of
the expected credit risk associated with the loan. As the
subsidiary company does not have any liquid assets to sell to repay
the loan, should it be recalled, the conclusion reached was that
the loan should be categorised as stage 3.
As part of the assessment of expected credit
losses of the intercompany loan receivable, the directors have
considered the published chance of success for Inishkea, and
applying the 33% general wildcat exploration success rate, the
loans to Europa Oil & Gas Inishkea have thus been deemed 67%
provided.
The loans to Europa Oil & Gas New Ventures,
Europa Oil & Gas (Ireland West) and Europa Oil & Gas
(Ireland East) have been provided in full due to the relinquishment
of the licences held by the subsidiaries.
During the year to 31 July 2024 there has been
a decrease in the expected recoverable value of the Group's Crosby
Warren producing asset, mainly as a result of a significant
reduction in the anticipated water handling revenues connected to
the Wressle producing field. The cause of this is that updated
production simulations from the CPR indicates much reduced water
production as the reservoir becomes supported by gas break-out.
Additionally, the estimated recoverable value of the Wressle
producing field was adversely impacted by the reduction in forecast
UK gas prices during the year. These factors led to an increase in
the provisions for impairment that had been made in relation to
loans to Europa Oil & Gas Ltd.
The movement in the provision was as
follows:
|
Europa
Oil & Gas Limited
|
Europa
Oil & Gas (Ireland West) Limited
|
Europa
Oil & Gas (Ireland East) Limited
|
Europa
Oil & Gas (Inishkea) Limited
|
Europa
Oil & Gas (New Ventures) Limited
|
Total
|
|
£000
|
£000
|
£000
|
£000
|
£000
|
£000
|
|
=============
|
=============
|
=============
|
=============
|
=============
|
=============
|
|
|
|
|
|
|
|
Gross loan balances
|
|
|
|
|
|
|
Loan balance at 31 July
2022
|
26,535
|
781
|
1,495
|
1,168
|
1,190
|
31,169
|
Movement in loan
|
1,027
|
(76)
|
(153)
|
223
|
(145)
|
876
|
Loan balance at 31 July
2023
|
27,562
|
705
|
1,342
|
1,391
|
1,045
|
32,045
|
Movement in loan
|
(1,255)
|
-
|
-
|
181
|
-
|
(1,074)
|
Loan balance at 31 July 2024
|
26,307
|
705
|
1,342
|
1,572
|
1,045
|
30,971
|
|
|
|
|
|
|
|
Provisions
|
|
|
|
|
|
|
Provision at 31 July
2022
|
(14,043)
|
(781)
|
(1,495)
|
(783)
|
(797)
|
(17,899)
|
Movement in provision
|
8,165
|
76
|
153
|
(149)
|
(248)
|
7,997
|
Provision at 31 July
2023
|
(5,878)
|
(705)
|
(1,342)
|
(932)
|
(1,045)
|
(9,902)
|
Movement in provision
|
(15,446)
|
-
|
-
|
(121)
|
-
|
(15,567)
|
Provision at 31 July 2024
|
(21,324)
|
(705)
|
(1,342)
|
(1,053)
|
(1,045)
|
(25,469)
|
|
|
|
|
|
|
|
Net loan balance at 31 July
2022
|
12,492
|
-
|
-
|
385
|
393
|
13,270
|
Net loan balance at 31 July
2023
|
21,684
|
-
|
-
|
459
|
-
|
22,143
|
Net loan balance at 31 July 2024
|
4,983
|
-
|
-
|
519
|
|
5,502
|
23
Capital commitments and
guarantees
For PEDL181 the partners have agreed to drill
two development wells and to construct a gas export line. These
activities remain contingent upon planning permission being
granted, the budget being approved by the JV partnership and the
availability of a suitable rig. The total net cost to Europa for
the work programme is estimated to be £1.3 million in 2025 and £2.5
million in 2026.
The final instalment of the Antler
consideration was due on 1 October 2024 for $369,000 (£289,000).
This was paid on time after the reporting date
24
Lease commitments
Europa Oil & Gas Limited pays annual site
rentals for the land upon which the West Firsby and Crosby Warren
oil field facilities are located.
Future minimum lease payments are as
follows:
|
2024
£000
|
2023
£000
|
Less than 1 year
|
63
|
-
|
2-5 years
|
90
|
-
|
|
---------------------------------
|
---------------------------------
|
Total
|
153
|
-
|
|
============
|
=============
|
25
Related party transactions
Key management are those persons having
authority and responsibility for planning, controlling and
directing the activities of the Group. In the opinion of the Board,
the Group's and the Company's key management are the directors of
Europa Oil & Gas (Holdings) plc. Information regarding their
compensation is given in note 4.
During the year, the Company
provided services to subsidiary companies as follows:
|
2024
£000
|
2023
£000
|
Europa Oil & Gas
Limited
|
319
|
336
|
Europa Oil & Gas (Inishkea)
Limited
|
64
|
102
|
Europa Oil & Gas (New
Ventures) Limited
|
-
|
26
|
|
---------------------------------
|
---------------------------------
|
Total
|
383
|
464
|
|
============
|
==========
|
At the end of the year, after
provisions, the Company was owed the following amounts by
subsidiaries:
|
2024
£000
|
2023
£000
|
Europa Oil & Gas
Limited
|
4,983
|
21,684
|
Europa Oil & Gas (Inishkea)
Limited
|
518
|
459
|
|
---------------------------------
|
---------------------------------
|
Total
|
5,501
|
22,143
|
|
============
|
=============
|
26
Post reporting date
events
On 13 September 2024 the Company
announced that it does not intend to apply to the North Sea
Transition Authority for an extension to the Serenity licence,
which expired on 30 September 2024. As a result, the incurred costs
associated with Serenity that the Company has capitalised were
written off during the year.
On 16 September 2024 the Company
announced that planning consent has been received from North
Lincolnshire Council for the further development of the Wressle
well site. As a result of the Finch Supreme Court ruling and a
proposed legal challenge to the granting of planning permission for
the next phase of the Wressle development, it is expected that the
planning consent will be rescinded once the court process has
concluded. The Wressle Joint Venture plans to submit further
information that covers potential scope three emissions such that a
future planning process could be approved. The works will include
extending the existing site to accommodate the drilling of two new
wells and construction of gas processing facilities and an
underground gas pipeline to connect Wressle to the local gas
distribution network.