TIDMJOG
RNS Number : 6166J
Jersey Oil and Gas PLC
28 April 2022
28 April 2022
Jersey Oil and Gas plc
("Jersey Oil & Gas", "JOG" or the "Company")
Final Results for the year ended 31 December 2021
and Notice of Annual General Meeting
Jersey Oil & Gas (AIM: JOG), an independent upstream oil and
gas company focused on the UK Continental Shelf ("UKCS") region of
the North Sea, is pleased to announce its audited results for the
financial year ended 31 December 2021 and the time and date of its
forthcoming Annual General Meeting ("AGM").
Highlights
-- The Company has aggregated a significant oil and gas resource
base in the Central North Sea, the "Greater Buchan Area"
("GBA")
-- JOG launched its GBA farm-out process and is actively engaged
with multiple counterparties
-- Farm-out activities have intensified with JOG broadening the
development solutions under ongoing evaluation with the various
interested parties
-- Work completed by the Company during the year is facilitating
an accelerated technical evaluation of the alternative development
options under consideration
-- Key pre-FEED operations completed during the year
-- Strengthened Board and senior management team with
significant industry experience
-- Year-end cash position of approximately GBP13.0 million, with
no debt
Andrew Benitz, CEO of Jersey Oil & Gas, commented :
"2021 was an active and exciting year for the Company, most
notably involving the commencement of our Greater Buchan Area
farm-out process. Interest in developing the GBA has been strong
and we are actively engaged with multiple serious counterparties.
Since launching the process our engagement strategy has been
broadened to advance a range of competing development solutions,
providing increased optionality.
"The GBA is a high-quality, development ready UK North Sea
resource base of scale and we look forward to concluding the
farm-out process and moving into the next phase of activities. The
Company remains well funded as we progress at pace to deliver
stakeholder value through securing a successful farm-out to ensure
this exciting project can be developed in the most economic and
sustainable manner."
Corporate Update
JOG has aggregated a significant oil and gas resource base in
the heart of the Central North Sea. As the sole owner of the GBA,
the Company has the control and flexibility to advance an optimal
new development capable of unlocking substantial long-term
shareholder value. To this end, the next major step for JOG is to
secure an industry partner(s) in order to move the development into
the next phase of activities and secure the regulatory approvals in
2023 for execution of the project.
GBA Focus
-- JOG is actively engaged with multiple high quality interested
parties regarding the planned farm-out of an interest in the
GBA
-- Work is progressing to expand the development options in
order to facilitate the farm-out process, with opportunities to
utilise existing infrastructure for future production from the GBA
under evaluation
-- Engineering studies are being completed in collaboration with
the various counterparties in order to validate and de-risk the
different development solutions and facilitate the negotiation of
commercial constructs for the GBA farm-out
-- The range of competing development solutions, including
tie-backs to existing platforms and re-use of available FPSO's, has
the potential to enhance the overall development economics
-- Upon confirmation and selection of the optimal GBA
development scheme the project will then move into Front-End
Engineering & Design ("FEED") activities along with preparation
of the required Field Development Plan for the North Sea Transition
Authority (formerly, the Oil & Gas Authority)
-- Pre-FEED operational work included JOG completing an offshore
survey to support Phase 1 of the GBA Development project. The
survey acquired geotechnical and environmental baseline data within
the GBA
-- The GBA development solution that is taken forward for
regulatory approval will seek to deliver upon both of the
industry's strategic objectives of "Maximising Economic Recovery"
and "Net Zero"
Supportive Macro Environment
-- Recent geopolitical events, exacerbated by recent under
investment in the upstream sector, have led to a material
escalation in oil and gas prices that has served to underline the
importance of maximising domestic energy supplies
-- The UK North Sea has only a limited number of readily
executable oil and gas developments with the resource scale of the
GBA
Attractive Outlook
-- Progressing the GBA development project remains JOG's number
one priority with a singular focus on converting value in the GBA
through industry partnership
-- Opportunities to accelerate the Company's corporate growth
strategy through the execution of potential accretive acquisitions
continue to be screened and evaluated
-- The Company remains well funded with current expenditure
primarily related to workstreams that will facilitate securing a
successful farm-out
-- Strengthened the team with the appointments of Les Thomas as
Non-Executive Chairman, Graham Forbes as Chief Financial Officer
and Richard Smith as Chief Commercial Officer
Availability of Annual Report and Accounts and Notice of Annual
General Meeting
In addition, the Company announces that its 2021 Annual Report
and Financial Statements, together with the AGM Notice and
associated Form of Proxy, are now available on the Company's
website (www.jerseyoilandgas.com) and have today been posted to
those shareholders who have elected to receive hardcopy shareholder
communications from the Company.
The Company will hold its AGM in respect of its financial year
ended 31 December 2021 on Thursday, 26 May 2022 at 2.00 p.m. at the
offices of Pinsent Masons LLP, 30 Crown Place, Earl Street, London
EC2A 4ES.
Enquiries :
Jersey Oil and Gas plc
Andrew Benitz, CEO - c/o Camarco Tel: 020 3757 4983
Strand Hanson Limited
James Harris / Matthew Chandler / James Bellman Tel: 020 7409
3494
Arden Partners plc
Paul Shackleton Tel: 020 7614 5900
finnCap Ltd
Christopher Raggett / Tim Redfern Tel: 020 7220 0500
Camarco
Billy Clegg / James Crothers Tel: 020 3757 4983
Notes to Editors :
Jersey Oil & Gas is a UK E&P company focused on building
an upstream oil and gas business in the North Sea. The Company
holds a significant acreage position within the Central North Sea
referred to as the Greater Buchan Area ("GBA"), which includes
operatorship and 100% working interests in blocks that contain the
Buchan oil field and J2 oil discovery and an 100% working interest
in the P2170 Licence Blocks 20/5b & 21/1d, that contain the
Verbier oil discovery and other exploration prospects.
JOG is focused on delivering shareholder value and growth
through creative deal-making, operational success and licensing
rounds. Its management is convinced that opportunity exists within
the UK North Sea to deliver on this strategy and the Company has a
solid track-record of tangible success.
Forward-Looking Statements
This announcement may contain certain forward-looking statements
that are subject to the usual risk factors and uncertainties
associated with the oil and gas sector. Whilst the Company believes
any expectations reflected herein to be reasonable in light of the
information available to it at this time, the actual outcome may be
materially different owing to factors beyond the Company's control
or otherwise within the Company's control but where, for example,
the Company decides on a change of plan or strategy.
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulation (EU) No. 596/2014 as it forms part of
United Kingdom domestic law by virtue of the European Union
(Withdrawal) Act 2018, as amended.
CHAIRMAN & CHIEF EXECUTIVE OFFICER'S REPORT
Overview
During 2021, JOG made good progress in advancing its primary
objective of unlocking value from the Greater Buchan Area ("GBA")
development project. The hard work and effort of our team on
multiple work streams has positioned the Group well; defining the
unique investment opportunity the GBA offers, with the significant
proven oil resources providing attractive economics and flexibility
for various development options, in the heart of the Central North
Sea.
Portfolio With Scale
The Group has constructed a quality portfolio of assets that
form the GBA in the Outer Moray Firth area of the UK North Sea. It
represents a near full-cycle portfolio of assets, underpinned by
the Buchan Oil field and the J2 and Verbier oil discoveries, along
with three high impact and drill-ready exploration prospects;
Verbier Deep, Wengen and Cortina.
In addition to contingent oil resources of in excess of
100mmbbls in the planned first phase development of the Greater
Buchan Area, our shareholders have ownership of significant
resource upside from further development phases and the drill-ready
exploration prospects that are proximal to the core project. As an
indication of confidence in our ability to deliver value for
shareholders, the Group raised GBP16.61m (gross) through an
oversubscribed placing and subscription in March 2021, providing
strength and flexibility to advance the project to the next
phase.
A standalone GBA platform development concept was prepared and a
Concept Select Report ("CSR") submitted to the North Sea Transition
Authority ("NSTA"). The CSR was focused on meeting the NSTA's twin
strategic objectives of 'Maximising Economic Recovery' and
contributing to the Government target for 'Net Zero' and it was
used to launch an industry farm-out process, as a project of this
scale requires multiple partners and funding components for
successful delivery.
GBA Farm-Out Advancing
The farm-out process is generating interest from a wide variety
of producers and infrastructure owners. Initial engagement and
screening has led to JOG being actively engaged with multiple
serious counterparties of scale, with ongoing due diligence
involving two-way collaborative workstreams. Work is progressing to
assess various development concepts that can facilitate the
farm-out, including using existing third-party host infrastructure
and facilities to enhance overall development economics through
synergies and cost savings. The associated recoverable volumes from
the GBA will naturally be dependent on the development solution
that is taken forward. Opportunities to optimise forecast
production and capital expenditure requirements represent a core
component of the evaluations. The work completed during 2021 on the
platform development concept has accelerated the technical
evaluation of these further options.
Completing the assessment of the wider set of development
solutions for the GBA is naturally an important driver for
delivering stakeholder value from the project and a task the Group
is working on with pace to progress.
The Group remains well funded with a cash balance at the end of
2021 of approximately GBP13 million and with current expenditure
focused on workstreams that will facilitate securing a successful
farm-out.
Positive Macro Environment
It has been a volatile year for sentiment in the oil and gas
sector and in the lead up to "COP26" there was much debate about
the future of the North Sea. We see the North Sea as a crucible for
energy transition where upstream oil and gas can function
effectively alongside the advancement of renewable energy, with
examples of oil and gas companies leading investments into offshore
wind and carbon capture, utilisation and storage ("CCUS")
technologies. Indeed, offshore wind developments, facilitating the
decarbonisation of offshore oil and gas infrastructure and regional
electrification may likely play an important role in optimising the
GBA development plans. We have put net zero considerations at the
heart of our business by subscribing to the principles that
underpin the North Sea Transition Deal that was announced in March
2021, and which supports the industry's transition to clean, green
energy.
Recent geopolitical events have sadly served as a salutary
reminder that security of energy supply remains of vital importance
as the energy transition is achieved. The reality of underlying
supply fundamentals, exacerbated by several years of under
investment across the upstream sector and the significant and
steady increase in commodity prices have served as a reminder that
oil and gas is a vital component of the overall energy mix.
Investment in maximising the production of indigenous, low-carbon
UK resources remains crucial for security of supply and represents
the best way for the UK economy to navigate the energy transition
wisely, with JOG having an important part to play in this
evolution. Improved commodity prices have bolstered producing
company cash positions, serving to improve sector confidence and
provide a helpful backdrop to the on-going GBA farm-out
process.
Strong Organisation & Outlook
During 2021, JOG made several senior management and Board
changes which marked the next phase in the Group's development for
delivery on its key strategic ambitions. It was pleasing to be able
to welcome Graham Forbes and Richard Smith into the Group as Chief
Financial Officer and Chief Commercial Officer, respectively. This,
combined with the smooth transition of the Chairman's role from
Marcus Stanton to myself (Les Thomas), has strengthened the
execution capabilities and leadership of the Group.
We have built a team of experienced professionals, with a
demonstrable track record in the industry, a high-quality asset
base and a comfortable funding position to work from.
The Group is therefore well positioned for success and on behalf
of the Board, we would like to thank our dedicated JOG team for
their accomplishments during the year and to recognise and
acknowledge the ongoing support we have received from all of our
shareholders and stakeholders at large.
Les Thomas
Non-Executive Chairman
Andrew Benitz
Chief Executive Officer
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2021
Note 2021 2020
GBP GBP
================================== ==== =================== ===========
Revenue - -
Cost of sales (101,079) (53,046)
Gross loss (101,079) (53,046)
Exploration write-off/licence
relinquishment 10 (447,812) -
Other losses 7 - (637,028)
Administrative expenses (3,672,135) (2,111,532)
================================== ==== =================== ===========
Operating loss (4,221,026) (2,801,606)
Finance income 6 1,807 27,937
Finance expense 6 (6,098) (8,262)
================================== ==== =================== ===========
Loss before tax (4,225,317) (2,781,931)
Tax 8 - -
================================== ==== =================== ===========
Loss for the year (4,225,317) (2,781,931)
======================================== =================== ===========
Total comprehensive loss for the
year (net of tax) (4,225,317) (2,781,931)
Total comprehensive loss for the
year attributable to:
Owners of the parent (4,225,317) (2,781,931)
================================== ==== =================== ===========
Loss per share expressed in pence
per share:
Basic 9 (14.48) (12.74)
Diluted 9 (14.48) (12.74)
================================== ==== =================== ===========
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2021
Note 2021 2020
GBP GBP
============================================ ==== ============= ==============
Non-current assets
Intangible assets exploration & development
costs 10 21,514,153 14,991,295
Property, plant and equipment 11 40,077 74,549
Right-of-use assets 12 185,008 197,374
Deposits 31,112 82,642
============================================ ==== ============= ==============
21,770,350 15,345,860
================================================== ============= ==============
Current assets
Trade and other receivables 13 353,114 401,440
Cash and cash equivalents 14 13,038,388 5,081,515
============================================ ==== ============= ==============
13,391,502 5,482,955
================================================== ============= ==============
Total assets 35,161,852 20,828,815
================================================== ============= ==============
Equity
Called up share capital 15 2,573,395 2,466,144
Share premium account 110,309,524 93,851,526
Share options reserve 19 1,397,287 2,109,969
Accumulated losses (81,551,730) (78,509,819)
Reorganisation reserve (382,543) (382,543)
============================================ ==== ============= ==============
Total equity 32,345,933 19,535,277
================================================== ============= ==============
Liabilities
============= ==============
Non-current liabilities
Lease liabilities 17 83,012 101,270
============================================ ==== ============= ==============
83,012 101,270
================================================== ============= ==============
Current liabilities
Trade and other payables 16 2,603,707 1,069,620
Lease liabilities 12 129,200 122,648
============================================ ==== ============= ==============
2,732,907 1,192,268
================================================== ============= ==============
Total liabilities 2,815,919 1,293,538
============================================ ==== ============= ==============
Total equity and liabilities 35,161,852 20,828,815
================================================== ============= ==============
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
Called Share premium Share Accumulated Reorganisation
up account options losses reserve Total
share capital GBP reserve GBP GBP equity
GBP GBP GBP
==================== =================== =============== =========== ============== ============== =============
At 1 January 2020 2,466,144 93,851,526 1,928,099 (75,727,888) (382,543) 22,135,338
==================== =================== =============== =========== ============== ============== =============
Loss and total
comprehensive
loss for the year - - - (2,781,931) - (2,781,931)
Share based payments - - 181,870 - - 181,870
==================== =================== =============== =========== ============== ============== =============
At 31 December 2020
and
1 January 2021 2,466,144 93,851,526 2,109,969 (78,509,819) (382,543) 19,535,277
==================== =================== =============== =========== ============== ============== =============
Loss and total
comprehensive
loss for the year - - - (4,225,317) - (4,225,317)
Issue of share
capital 107,251 16,457,997 - - - 16,565,248
Expired share
options - - (909,176) 909,176 - -
Exercised share
options - - (274,230) 274,230 - -
Share based payments - - 470,725 - - 470,725
==================== =================== =============== =========== ============== ============== =============
At 31 December 2021 2,573,395 110,309,523 1,397,287 (81,551,730) (382,543) 32,345,933
==================== =================== =============== =========== ============== ============== =============
The following describes the nature and purpose of each reserve
within owners' equity:
Reserve Description and purpose
================== =============================================================
Called up share Represents the nominal value of shares issued
capital
================== =============================================================
Share premium Amount subscribed for share capital in excess of nominal
account value
================== =============================================================
Share options Represents the accumulated balance of share-based
reserve payment charges recognised in respect of share options
granted by the Company less transfers to accumulated
deficit in respect of options exercised or cancelled/lapsed
================== =============================================================
Accumulated losses Cumulative net gains and losses recognised in the
Consolidated Statement of Comprehensive Income
================== =============================================================
Reorganisation Amounts resulting from the restructuring of the Group
reserve at the time of the Initial Public Offering (IPO) in
2011
================== =============================================================
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
2021 2020
Note GBP GBP
================================================= ====== =============== ===========
Cash flows from operating activities
Cash used in operations 21 (1,495,899) (2,160,164)
Net interest received 6 1,807 27,937
Net interest paid 6 (6,098) (8,262)
================================================= ====== =============== ===========
Net cash used in operating activities (1,500,190) (2,140,489)
========================================================= =============== ===========
Cash flows from investing activities
Addition of intangible assets 10 (6,970,670) (4,898,731)
Purchase of tangible assets 10 - (84,865)
================================================= ====== =============== ===========
Net cash used in investing activities (6,970,670) (4,983,596)
========================================================= =============== ===========
Cash flows from financing activities
Principal elements of lease payments (137,516) (112,936)
Net proceeds from issue of shares 16,565,248 -
--------------------------------------------------------- --------------- -----------
Net cash generated from/(used in) financing activities 16,427,732 (112,936)
========================================================= =============== ===========
Increase/(decrease) in cash and cash equivalents 21 7,956,873 (7,237,021)
Cash and cash equivalents at beginning
of year 14 5,081,515 12,318,536
================================================= ====== =============== ===========
Cash and cash equivalents at end of year 14 13,038,388 5,081,515
================================================= ====== =============== ===========
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
1. General information
Jersey Oil and Gas plc (the "Company") and its subsidiaries
(together, the "Group") are involved in the upstream oil and gas
business in the UK.
The Company is a public limited company incorporated and
domiciled in the United Kingdom and quoted on AIM, a market
operated by London Stock Exchange plc. The address of its
registered office is 10 The Triangle, ng2 Business Park,
Nottingham, NG2 1AE.
2. Significant accounting policies
The principal accounting policies applied in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the periods
presented, unless otherwise stated.
Basis of Accounting
The consolidated financial statements of Jersey Oil and Gas Plc
as of 31 December, 2021 and for the year then ended (the
"consolidated financial statements") were prepared in accordance
with UK-adopted International Accounting Standards in conformity
with the requirements of the Companies Act 2006 (the "Companies
Act").
On 31 December 2020, IFRS as adopted by the European Union at
that date was brought into UK law and became UK-adopted
International Accounting Standards, with future changes being
subject to endorsement by the UK Endorsement Board. Jersey Oil and
Gas Plc transitioned to UK-adopted International Accounting
Standards in its consolidated financial statements on 1 January
2021. This change constitutes a change in accounting framework.
However, there is no impact on recognition, measurement or
disclosure in the period reported as a result of the change in
framework. The consolidated financial statements of Jersey Oil and
Gas Plc have been prepared in accordance with UK-adopted
International Accounting Standards and with the requirements of the
Companies Act 2006 as applicable to those companies reporting under
those standards.
The financial statements have been prepared under the historic
cost convention, except as disclosed in the accounting policies
below .
Going Concern
The Group has sufficient resources to meet its liabilities as
they fall due for a period of at least 12 months after the date of
issue of these financial statements. Further to the equity raise
completed in March 2021, the Group has substantial cash reserves
with currently no firm work commitments on any of the Group's
licences, other than ongoing Operator overheads and licence fees.
Other work that the Group is undertaking in respect of the GBA
licences and surrounding areas is modest relative to its current
cash reserves. A range of potential farm-out scenarios has also
been modelled to provide further comfort. The Company's current
cash reserves are therefore expected to more than exceed its
estimated cash outflows in all reasonable scenarios for at least 12
months following the date of issue of these financial statements.
Based on these circumstances, the Directors have considered it
appropriate to adopt the going concern basis of accounting in
preparing the consolidated financial statements.
Changes in Accounting Policies and Disclosures
(a) New and amended standards adopted by the Group:
At the start of the year the following standards were
adopted:
-- Covid-19-Related Rent Concessions (Amendment to IFRS 16);
-- Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS
9, IAS 39, IFRS 7, IFRS 4 and IFRS 16);
-- IFRS3 conceptual framework amendment; and
-- Covid-19-Related Rent Concessions beyond 30 June 2021
(Amendment to IFRS 16);
(b) Certain new accounting standards and interpretations have
been published that are not mandatory for 31 December 2021
reporting periods and have not been early adopted by the Group.
These standards are not expected to have a material impact on the
entity in the current or future reporting periods and on
foreseeable future transactions:
-- IFRS17 Insurance Contracts;
-- Property, Plant and Equipment: Proceeds before intended use
(Amendment to IAS 16);
-- Reference to Conceptual Framework (Amendments to IFRS 3);
-- Onerous Contracts - Cost of Fulfilling a contract (Amendments
to IAS 37);
-- Annual Improvements to IFRS Standards 2018-2020
Significant Accounting Judgements and Estimates
The preparation of the financial statements requires management
to make estimates and assumptions that affect the reported amounts
of revenues, expenses, assets and liabilities at the date of the
financial statements. If in future such estimates and assumptions,
which are based on management's best judgement at the date of the
financial statements, deviate from the actual circumstances, the
original estimates and assumptions will be modified as appropriate
in the period in which the circumstances change. The Group's
accounting policies make use of accounting estimates and judgements
in the following areas:
-- The assessment of the existence of impairment triggers (note 10).
-- The estimation of share-based payment costs (note 19).
Impairments
The Group tests its capitalised exploration licence costs for
impairment when indicators, further detailed below under
'Exploration and Evaluation Costs' as set out in IFRS 6, suggest
that the carrying amount exceeds the recoverable amount which is
inherently judgmental. An impairment loss is recognised for the
amount by which the asset's carrying amount exceeds its recoverable
amount. The recoverable amount of the Cash Generating Unit is the
higher of an asset's fair value less costs of disposal and value in
use. The Group assessed that there were no impairment triggers
during the year - this included the judgement that there was no
trigger arising from future licence expiry for which we did not
expect the licence concerned to be renewed.
Share-Based Payments
The Group currently has a number of share schemes that give rise
to share-based payment charges. The charge to operating profit for
these schemes amounted to GBP470,725 (2020: GBP181,870). Estimates
and judgements for determining the fair value of the share options
are required. For the purposes of the calculation, a Black- Scholes
option pricing model has been used. Based on past experience, it
has been assumed that options will be exercised, on average, at the
mid-point between vesting and expiring. The share price volatility
used in the calculation is based on the actual volatility of the
Group's shares, since 1 January 2017. The risk-free rate of return
is based on the implied yield available on zero coupon gilts with a
term remaining equal to the expected lifetime of the options at the
date of grant.
Basis of Consolidation
(a) Subsidiaries
Subsidiaries are all entities over which the Group has the power
to govern their financial and operating policies generally
accompanying a shareholding of more than one half of the voting
rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when
assessing whether the Group controls another entity. The Group also
assesses the existence of control where it does not have more than
50% of the voting power but is able to govern the financial and
operating policies by virtue of de facto control. De facto control
may arise in circumstances where the size of the Group's voting
rights relative to the size and dispersion of holdings of other
Shareholders give the Group the power to govern the financial and
operating policies.
Subsidiaries are fully consolidated from the date on which
control is transferred to the Group. They are de-consolidated from
the date the Group ceases to have control.
(b) Changes in ownership interests in subsidiaries without
change of control
Transactions with non-controlling interests that do not result
in loss of control are accounted for as equity transactions - that
is, as transactions with the owners in their capacity as owners.
The difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the
subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity.
(c) Disposal of subsidiaries
When the Group ceases to have control any retained interest in
the entity is remeasured to its fair value at the date when control
is lost, with the change in carrying amount recognised in profit or
loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an
associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in
respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may
mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
Inter-company transactions, balances, income and expenses on
transactions between Group companies are eliminated. Profits and
losses resulting from inter-company transactions that are
recognised in assets are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure
consistency with the policies adopted by the Group.
Acquisitions, Asset Purchases and Disposals
Transactions involving the purchase of an individual field
interest, farm-ins, farm-outs, or acquisitions of exploration and
evaluation licences for which a development decision has not yet
been made that do not qualify as a business combination, are
treated as asset purchases. Accordingly, no goodwill or deferred
tax arises. The purchase consideration is allocated to the assets
and liabilities purchased on an appropriate basis. Proceeds on
disposal (including farm-ins/farm-outs) are applied to the carrying
amount of the specific intangible asset or development and
production assets disposed of and any surplus is recorded as a gain
on disposal in the Consolidated Statement of Comprehensive
Income.
Acquisitions of oil and gas properties are accounted for under
the purchase method where the acquisitions meets the definition of
a business combination. The Group applies the acquisition method of
accounting to account for business combinations. The consideration
transferred for the acquisition of a subsidiary is the fair value
of the assets transferred, the liabilities incurred, and the equity
interests issued by the Group. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Identifiable assets acquired
and liabilities and contingent liabilities assumed in a business
combination are measured initially at their fair value at the
acquisition date. The Group recognises any non-controlling interest
in the acquiree on an acquisition-by-acquisition basis, either at
fair value or at the non-controlling interest's proportionate share
of the recognised amounts of the acquiree's identifiable net
assets.
Acquisition related costs are expensed as incurred.
If the business combination is achieved in stages, the
acquisition date fair value of the acquirer's previously held
equity interest in the acquiree is remeasured to fair value at the
acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is
recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is
deemed to be an asset or liability are recognised in accordance
with IFRS 9 either in profit or loss or as a change to other
comprehensive income. Contingent consideration that is classified
as equity is not remeasured, and its subsequent settlement is
accounted for within equity.
Goodwill is initially measured as the excess of the aggregate of
the consideration transferred and the fair value of non-controlling
interest over the net identifiable assets acquired and liabilities
assumed. If this consideration is lower than the fair value of the
net assets of the subsidiary acquired, the difference is recognised
in profit or loss.
Exploration and Evaluation Costs
The Group accounts for oil and gas exploration and evaluation
costs using IFRS 6 "Exploration for and Evaluation of Mineral
Resources". Such costs are initially capitalised as Intangible
Assets and include payments to acquire the legal right to explore,
together with the directly related costs of technical services and
studies, seismic acquisition, exploratory drilling, and testing.
The Group only capitalises costs as intangible assets once the
legal right to explore an area has been obtained. The Group
assesses the intangible assets for indicators of impairment at each
reporting date.
Potential indicators of impairment include but are not limited
to:
a) the period for which the Group has the right to explore in
the specific area has expired during the period or will expire in
the near future and is not expected to be renewed.
b) substantive expenditure on further exploration for and
evaluation of oil and gas reserves in the specific area is neither
budgeted nor planned.
c) exploration for and evaluation of oil and gas reserves in the
specific area have not led to the discovery of commercially viable
quantities of oil and gas reserves and the entity has decided to
discontinue such activities in the specific area.
d) sufficient data exist to indicate that, although a
development in the specific area is likely to proceed, the carrying
amount of the exploration and evaluation asset is unlikely to be
recovered in full from successful development or by sale.
The Group analyses the oil and gas assets into cash generating
units (CGUs) for impairment and reporting purposes. In the event an
impairment trigger is identified the Group performs a full
impairment test for the CGU under the requirements of IAS 36
Impairment of assets. An impairment loss is recognised for the
amount by which the exploration and evaluation assets' carrying
amount exceeds their recoverable amount. The recoverable amount is
the higher of the exploration and evaluation assets' fair value
less costs of disposal. A cost of GBP255,847 was recorded for
relinquishing P2497 Block 20/4c (Zermatt), and GBP191,965 for P2499
Block 21/2a (Glenn) in the financial year ended 31 December 2021,
resulting in the carrying value of both assets being GBPnil.
As at 31 December 2021, the carrying value of intangible assets
was GBP21.5m, as per Note 10 'Intangible Assets'. The Group
considered other factors which could give rise to an impairment
trigger such as commodity prices, licence expiration dates,
budgeted spend and movements in estimated recoverable reserves. The
group exercised judgement in determining that the licence
agreements will be likely be extended by the NSTA. Based on this
assessment, no impairment triggers existed in relation to
exploration assets as of 31 December 2021.
Cost of Sales
Within the statement of comprehensive income, costs directly
associated with generating future revenue are included in cost of
sales such as software licences that were used across the asset
base. The Group only capitalises costs as intangible assets once
the legal right to explore an area has been obtained, any costs
incurred prior to the date of acquisition are recognised as cost of
sales within the Statement of Comprehensive Income.
Property, Plant and Equipment
Property, plant and equipment is stated at historic purchase
cost less accumulated depreciation. Asset lives and residual
amounts are reassessed each year. Cost includes the original
purchase price of the asset and the costs attributable to bringing
the asset to its working condition for its intended use.
Depreciation on these assets is calculated on a straight-line
basis as follows:
Computer & office equipment 3 years
Leases
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities include the
net present value of the following lease payments:
-- fixed payments (including in-substance fixed payments), less
any lease incentives receivable;
-- variable lease payment that are based on an index or a rate,
initially measured using the index or rate as at the commencement
date;
-- amounts expected to be payable by the Group under residual value guarantees;
-- the exercise price of a purchase option if the Group is
reasonably certain to exercise that option; and
-- payments of penalties for terminating the lease, if the lease
term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension
options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group, the lessee's
incremental borrowing rate is used, being the rate that the
individual lessee would have to pay to borrow the funds necessary
to obtain an asset of similar value to the right-of-use asset in a
similar economic environment with similar terms, security and
conditions.
To determine the incremental borrowing rate, the Group where
possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes
in financing conditions since third party financing was
received.
Lease payments are allocated between principal and finance cost.
The finance cost is charged to profit or loss over the lease period
to produce a constant periodic rate of interest on the remaining
balance of the liability for each period.
Right-of-use assets are measured at cost comprising the
following:
-- the amount of the initial measurement of lease liability;
-- any lease payments made at or before the commencement date
less any lease incentives received;
-- any initial direct costs; and
-- restoration costs.
Right-of-use assets are generally depreciated over the shorter
of the asset's useful life and the lease term on a straight-line
basis. If the Group is reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated over the underlying
asset's useful life.
Payments associated with short-term leases of equipment and
vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term
leases are leases with a lease term of 12 months or less. Low-value
assets comprise any lease with a value of GBP5,000 or less.
Joint Ventures
The Group participates in joint venture/operation agreements
with strategic partners, these are classified as joint operations.
The Group accounts for its share of assets, liabilities, income and
expenditure of these joint venture agreements and discloses the
details in the appropriate Statement of Financial Position and
Statement of Comprehensive Income headings in the proportion that
relates to the Group per the joint venture agreement.
Investments
Fixed asset investments in subsidiaries are stated at cost less
accumulated impairment in the Company's Statement of Financial
Position and reviewed for impairment if there are any indications
that the carrying value may not be recoverable.
Financial Instruments
Financial assets and financial liabilities are recognised in the
Group and Company's Statement of Financial Position when the Group
becomes party to the contractual provisions of the instrument. The
Group does not have any derivative financial instruments.
Cash and cash equivalents include cash in hand and deposits held
on call with banks with a maturity of three months or less.
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less any expected credit loss. The Group
recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held at fair value through profit or loss.
ECLs are based on the difference between the contractual cash flows
due in accordance with the contract and all the cash flows that the
Group expects to receive, discounted at an approximation of the
original effective interest rate. The carrying amount of the asset
is reduced through the use of an allowance account, and the amount
of the loss will be recognised in the Consolidated Statement of
Comprehensive Income within administrative expenses. Subsequent
recoveries of amounts previously provided for are credited against
administrative expenses in the Consolidated Statement of
Comprehensive Income.
Trade payables are stated initially at fair value and
subsequently measured at amortised cost.
Offsetting of Financial Instruments
Financial assets and financial liabilities are offset, and the
net amount is reported in the consolidated statement of financial
position if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to settle on a net
basis, or to realise the assets and settle the liabilities
simultaneously.
Exceptional Items
Exceptional items are disclosed separately in the financial
statements where it is necessary to do so to provide further
understanding of the financial performance of the Group. They are
material items of income or expense that have been shown separately
due to the significance of their nature or amount.
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit. Deferred taxation liabilities
are provided, using the liability method, on all taxable temporary
differences at the reporting date. Such assets and liabilities are
not recognised if the temporary difference arises from goodwill or
from the initial recognition (other than in a business combination)
of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit.
Deferred income tax assets are recognised to the extent that it
is probable that future taxable profits will be available against
which the temporary differences can be utilised. The carrying
amount of deferred tax assets is reviewed at each reporting
date.
The current income tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at the end of the
reporting period in the countries where Jersey Oil and Gas Plc and
its subsidiaries operate and generate taxable income. We
periodically evaluate positions taken in tax returns with respect
to situations in which applicable tax regulation is subject to
interpretation. Provisions are established where appropriate on the
basis of amounts expected to be paid to the tax authorities.
Current Tax
Current tax is payable based upon taxable profit for the year.
Taxable profit differs from net profit as reported in the Statement
of Comprehensive Income because it excludes items of income or
expense that are taxable or deductible in other years and it
further excludes items that are never taxable or deductible. Any
Group liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the reporting
date.
Foreign Currencies
The functional currency of the Company and its subsidiaries is
Sterling. Monetary assets and liabilities in foreign currencies are
translated into Sterling at the rates of exchange ruling at the
reporting date. Transactions in foreign currencies are translated
into Sterling at the rate of exchange ruling at the date of the
transaction. Gains and losses arising on retranslation are
recognised in the Consolidated Statement of Comprehensive Income
for the year.
Employee Benefit Costs
Payments to defined contribution retirement benefit schemes are
recognised as an expense when employees have rendered service
entitling them to contributions.
Share-Based Payments
Equity settled share-based payments to employees and others
providing similar services are measured at the fair value of the
equity instruments at the grant date. The total amount to be
expensed is determined by reference to the fair value of the
options granted:
-- including any market performance conditions (for example, an entity's share price);
-- excluding the impact of any service and non-market
performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the entity over a
specified time-period); and
-- including the impact of any non-vesting conditions (for
example, the requirement for employees to save).
The fair value determined at the grant date of the equity
settled share-based payments is expensed on a straight-line basis
over the vesting period, based on the Group's estimate of equity
instruments that will eventually vest, with a corresponding
increase in equity. At the end of each reporting period, the Group
revises its estimate of the number of equity instruments expected
to vest. The impact of the revision of the original estimates, if
any, is recognised in profit or loss such that the cumulative
expense reflects the revised estimate, with a corresponding
adjustment to the equity settled employee benefits reserve.
Equity settled share-based payment transactions with parties
other than employees are measured at the fair value of the goods or
services received, except where that fair value cannot be estimated
reliably, in which case they are measured at the fair value of the
equity instruments granted, measured at the date the entity obtains
the goods or the counterparty renders the service.
Exercise proceeds net of directly attributable costs are
credited to share capital and share premium.
Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new
ordinary shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
3. Segmental reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the Board of Directors.
The Board considers that the Group operates in a single segment,
that of oil and gas exploration, appraisal, development and
production, in a single geographical location, the North Sea of the
United Kingdom and do not consider it appropriate to disaggregate
data further from that disclosed.
The Board is the Group's chief operating decision maker within
the meaning of IFRS 8 "Operating Segments".
During 2021 and 2020 the Group had no revenue.
4. Financial risk management
The Group's activities expose it to financial risks and its
overall risk management programme focuses on minimising potential
adverse effects on the financial performance of the Group. The
Company's activities are also exposed to risks through its
investments in subsidiaries and it is accordingly exposed to
similar financial and capital risks as the Group.
Risk management is carried out by the Directors and they
identify, evaluate, and address financial risks in close
co-operation with the Group's management. The Board provides
written principles for overall risk management, as well as written
policies covering specific areas, such as mitigating foreign
exchange risks and investing excess liquidity.
Credit Risk
The Group's credit risk primarily relates to its trade
receivables. Responsibility for managing credit risks lies with the
Group's management.
A debtor evaluation is typically obtained from an appropriate
credit rating agency. Where required, appropriate trade finance
instruments such as letters of credit, bonds, guarantees and credit
insurance will be used to manage credit risk.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they become due. The Group
manages its liquidity through continuous monitoring of cash flows
from operating activities, review of actual capital expenditure
programmes, and managing maturity profiles of financial assets and
financial liabilities.
Capital Risk Management
The Group seeks to maintain an optimal capital structure. The
Group considers its capital to comprise both equity and net
debt.
The Group monitors its capital mix needs and suitability
dependent upon the development stage of its asset base. Earlier
stage assets (pre-production) typically require equity rather than
debt given the absence of cash flow to service debt. As the asset
mix becomes biased to production then typically more debt is
available. The Group seeks to maintain progress in developing its
assets in a timely fashion. Given the Group's current cash position
is insufficient to progress its assets to first oil it will be
seeking to bring an industry partner into its assets in return for
a capital (equity) contribution. This may be in the form of either
cash or payment of some or all the Group's development
expenditures. As the development progresses towards first oil, debt
becomes available and will be sought in order to enhance equity
returns. As at 31 December 2021 there are no borrowings within the
Group (2020: Nil).
The Group monitors its capital structure by reference to its net
debt to equity ratio. Net debt to equity ratio is calculated as net
debt divided by total equity. Net debt is calculated as borrowings
less cash and cash equivalents. Total equity comprises all
components of equity.
Maturity analysis of financial assets and liabilities
Financial assets
2021 2020
GBP GBP
=============== ======= =======
Up to 3 months 233,864 446,082
3 to 6 months - 35,980
Over 6 months 31,112 199,395
=============== ======= =======
264,976 681,457
=============== ======= =======
Financial liabilities
2021 2020
GBP GBP
=============== ========= =========
Up to 3 months 2,232,325 1,069,620
3 to 6 months - -
Over 6 months - -
=============== ========= =========
2,232,325 1,069,620
=============== ========= =========
Lease liabilities
2021 2020
GBP GBP
=============== ======= =======
Up to 3 months 31,028 46,712
3 to 6 months 31,261 40,231
Over 6 months 149,923 136,975
=============== ======= =======
212,212 223,918
=============== ======= =======
5. Employees and Directors
2021 2020
GBP GBP
------------------------------- --------- ---------
Wages and salaries* 2,207,384 1,841,230
Social security costs** 215,267 145,605
Share-based payments (note 19) 470,724 181,870
Other pension costs 218,253 181,010
=============================== ========= =========
3,111,628 2,349,715
------------------------------- --------- ---------
*In addition, there were payments in lieu of notice and loss of
office fees of GBP733,725.
** In addition, there were social security costs associated with
the payments in lieu of notice and loss of office of GBP49,985.
Other pension costs include employee and Group contributions to
money purchase pension schemes.
The average monthly number of employees during the year was as
follows:
2021 2020
GBP GBP
---------------------- ---- ----
Directors 6 5
Employees - Finance 1 1
Employees - Technical 10 8
====================== ==== ====
17 14
---------------------- ---- ----
Directors Remuneration: 2021 2020
GBP GBP
========================================== ========= =========
Directors' remuneration* 938,465 878,100
Directors' pension contributions to money
purchase schemes 26,450 26,665
Share-based payments (note 19) 207,534 153,816
Benefits** 17,074 17,104
========================================== ========= =========
1,189,523 1,075,685
========================================== ========= =========
The Director's remuneration is shown net of share-based
payments.
*In addition, there were payments in lieu of notice and loss of
office fees of GBP733,725.
** In addition, there were benefit costs associated with the
payments in lieu of notice and loss of office of GBP13,197.
The average number of Directors to whom retirement benefits were
accruing was as follows:
2021 2020
GBP GBP
======================= =============================================================== ====
Money purchase schemes 2 2
======================= =============================================================== ====
Information regarding the highest paid Director is as
follows:
2021 2020
GBP GBP
================================== ======= =======
Aggregate emoluments and benefits 256,036 254,784
Share-based payments 74,707 52,470
Pension contributions 25,000 25,000
================================== ======= =======
355,743 332,254
================================== ======= =======
Key management compensation
Key management includes Directors (Executive and Non-Executive)
and an advisor to the Board. The compensation
paid or payable to key management for employee services is shown below:
2021 2020
GBP GBP
================================================= =============== =========
Wages and short-term employee benefits* 992,204 895,203
Share-based payments (note 19) 207,534 153,816
Pension Contributions 26,450 26,665
------------------------------------------------- --------------- ---------
1,226,188 1,075,684
------------------------------------------------- --------------- ---------
*In addition, there were payments in lieu
of notice and loss of office fees of GBP733,725
and associated benefit costs of GBP13,197.
6. Net Finance Cost
2021 2020
GBP GBP
============================= ============= =============
Finance income:
============= =============
Interest received 1,807 27,937
============================= ============= =============
1,807 27,937
----------------------------- ------------- -------------
Finance costs:
Interest paid (278) (33)
Interest on lease liability (5,820) (8,229)
============================= ============= =============
(6,098) (8,262)
============================= ============= =============
Net finance income (4,290) 19,675
============================= ============= =============
7. Loss Before Tax
The loss before tax is stated after charging/(crediting):
2021 2020
GBP GBP
================================================== =============== =======
Depreciation - tangible assets 34,472 23,977
Depreciation - right-of-use asset 138,176 135,493
Auditors' remuneration - audit of parent
company and consolidation 80,000 58,000
Auditors' remuneration - audit of subsidiaries 27,000 20,000
Auditors' remuneration - non-audit work (taxation
advice) 3,150 16,000
TGS Settlement - 637,028
Foreign exchange gain (6,027) (5,600)
================================================== =============== =======
In December 2020, the Group reached a settlement with TGS-Nopec
Geophysical Company ASA ("TGS") pursuant to an agreement entered
into with TGS on 9 February 2018. Under the agreement, TGS claimed
uplift payments from JOG totalling US$1,050,838 in respect of: a)
licence awards to Jersey Petroleum Limited ("JPL") in the Oil &
Gas Authority's 31st Supplementary Offshore Licensing Round; and b)
the acquisition by JPL of Equinor UK Limited's 70% interest in
Licence P2170 (Verbier). The Group disputed the validity of both
claims, following which two hearings took place in the Norwegian
courts. Subsequent to these hearings and, on the basis of legal
advice received, the Group agreed a final settlement payment to TGS
of US$850,000 (GBP637,028).
8. Tax
Reconciliation of tax charge
2021 2020
GBP GBP
=============================================== =========== ===========
Loss before tax (4,225,317) (2,781,931)
Tax at the domestic rate of 19% (2020:
19%) (802,810) (528,567)
Capital allowances in excess of depreciation (1,330,468) (957,549)
Expenses not deductible for tax purposes
and non-taxable income 91,330 35,704
Deferred tax asset not recognised 2,041,949 1,450,412
=============================================== =========== ===========
Total tax expense reported in the Consolidated - -
Statement of Comprehensive Income
=============================================== =========== ===========
No liability to UK corporation tax arose on ordinary activities
for the year ended 31 December 2021, or for the year ended 31
December 2020.
In April 2023, the rate of corporation tax will increase to 25%
as announced in the March 2021 Budget.
The Group has not recognised a deferred tax asset due to the
uncertainty over when the tax losses can be utilised. At the year
end, the usable tax losses within the Group were approximately
GBP57 million (2020: GBP46million).
9. Loss Per Share
Basic loss per share is calculated by dividing the losses
attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Diluted loss per share is calculated using the weighted average
number of shares adjusted to assume the conversion of all dilutive
potential ordinary shares.
There is no difference between dilutive and ordinary earnings
per share due to there being no dilutive shares in the period.
Loss attributable Weighted average
to ordinary shareholders number of Per share
GBP shares amount pence
======================= ================================== ================== =================
Year ended 31 December
2021
=========================================================================
Basic and Diluted EPS
======================= ================================== ================== =================
Basic & Diluted (4,225,317) 29,171,548 (14.48)
======================= ================================== ================== =================
Year ended 31 December
2020
Basic and Diluted EPS
Basic & Diluted (2,781,931) 21,829,227 (12.74)
======================= ================================== ================== =================
10. Intangible Assets
Exploration
costs
GBP
===================================== ===========
Cost
At 1 January 2020 10,267,805
Additions 4,898,731
------------------------------------- -----------
At 31 December 2020 15,166,536
------------------------------------- -----------
Additions 6,970,670
Exploration write-off/relinquishment (447,812)
------------------------------------- -----------
At 31 December 2021 21,689,394
------------------------------------- -----------
Accumulated Amortisation
At 1 January 2020 175,241
Charge for the year -
Amortisation on disposal -
===================================== ===========
At 31 December 2020 175,241
------------------------------------- -----------
At 31 December 2021 175,241
------------------------------------- -----------
Net Book Value
At 31 December 2021 21,514,153
------------------------------------- -----------
At 31 December 2020 14,991,295
------------------------------------- -----------
During the year, the Group relinquished licences P2497 Block
20/4c (Zermatt) and P2499 Block 21/2a (Glenn). Following
undertaking a comprehensive technical and economic evaluation of
licences P2497 and P2499 and meetings held with the North Sea
Transition Authority ("NSTA"), the NSTA confirmed that it was
satisfied that the Phase A Firm Commitments for both licences had
been fulfilled. JOG has decided not to progress to the next licence
phase, which would have required committing to a firm well in each
of these two licence areas. Accordingly, the licences automatically
ceased and determined at the end of Phase A of their Initial Term
on 29 August 2021.
In 2020, the Group acquired an additional 70% working interest
in licence P2170 (Verbier) in addition to the existing 18% equity
interest and retained 100% working interests in the licences
awarded pursuant to the NSTA's 31st SLR (2019), Licence P2498
(Buchan and J2), Licence P2499 (Glenn) and Licence P2497 (Zermatt).
The Group was also awarded a 100% working interest in, and
operatorship of, part-block 20/5e in the NSTA's 32 Offshore
Licensing Round in 2020. Part-block 20/5e is incorporated within
Licence P2498 (Buchan & J2) and is located within the Group's
existing Greater Buchan Area.
In April 2021, the Group acquired an additional 12% working
interest in P2170 following the acquisition of Cieco V&C (UK)
Limited (now Jersey V&C Ltd), thereby resulting in the Group
owning 100% of this licence which includes the Verbier oil
discovery, some 6km from the Buchan oil field. The consideration
for the acquisition included a completion payment of GBP150k and
two future milestone payments, details of which can be found in
note 18.
In line with the requirements of IFRS 6, we have considered
whether there are any indicators of impairment on the exploration
and development assets. Based on our assessment, as at 31 December
2021 there are not deemed to be indicators that the licences are
not commercial and the carrying value of GBP21,514,153 continues to
be supported by ongoing exploration and development work on the
licence area with no impairments considered necessary.
11. Property, Plant and Equipment
Computer and office
equipment
GBP
------------------------- ----------------------
Cost
At 1 January 2020 143,582
Additions 84,865
At 31 December 2020 228,447
Additions -
At 31 December 2021 228,447
------------------------- ----------------------
Accumulated Depreciation
At 1 January 2020 129,921
Charge for the year 23,977
At 31 December 2020 153,898
------------------------- ----------------------
Charge for the year 34,472
At 31 December 2021 188,370
------------------------- ----------------------
Net Book Value
At 31 December 2021 40,077
------------------------- ----------------------
At 31 December 2020 74,549
------------------------- ----------------------
12. Leases
Amounts Recognised in the Statement of financial position
2021 2020
GBP GBP
==================== ============== ================
Right-of-use Assets
============== ================
Buildings 185,008 197,374
==================== ============== ================
185,008 197,374
==================== ============== ================
Lease liabilities
Current 129,200 122,648
Non-Current 83,012 101,270
-------------------- -------------- ----------------
212,212 223,918
==================== ============== ================
The liabilities were measured at the present value of the
remaining lease payments, discounted using the lessee's incremental
borrowing rate as of 1 January 2019. The weighted average lessee's
incremental borrowing rate applied to the lease liabilities on 1
January 2019 was 3%. The borrowing rate applied for 2021 remained
at 3% and the leases relate to office space.
A new lease agreement was entered into in September 2021 with a
lease end date of September 2023, this was in relation to the
London office.
Amounts Recognised in the Statement of comprehensive income
2021 2020
GBP GBP
========================================== ============= ========
Depreciation charge of right-of-use asset
============= ========
Buildings 138,176 135,493
========================================== ============= ========
138,176 135,493
========================================== ============= ========
Interest expenses (included in finance
cost) (5,820) (8,230)
========================================== ============= ========
13. Trade and other receivables
2021 2020
GBP GBP
================================ ======== =======
Current:
Other receivables 30 91,020
Value added tax 233,835 161,111
Prepayments and accrued revenue 119,249 149,309
================================ ======== =======
353,114 401,440
================================ ======== =======
As at 31 December 2021, there were no trade receivables past due
nor impaired.
14. Cash and cash equivalents
2021 2020
GBP GBP
====================== ========== =========
Cash in bank accounts 13,038,388 5,081,515
---------------------- ---------- ---------
The cash balances are placed with creditworthy financial
institutions with a minimum rating of 'A'.
15. Called up share capital
Issued and fully paid: Number: Nominal 2021 2020
Class value GBP GBP
------------------------------ -------- ------- ------------ ------------
32,554,293 (2020:21,829,227) Ordinary 1p 2,573,395 2,466,144
------------------------------ -------- ------- ------------ ------------
Ordinary shares have a par value of 1p. They entitle the holder
to participate in dividends, distribution or other participation in
the profits of the Company in proportion to the number of and
amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a
meeting, in person or by proxy, is entitled to one vote, and on a
poll each share is entitled to one vote.
During the year 660,000 ordinary shares were issued to satisfy
the exercise of share options which raised GBP778,357 (gross). An
oversubscribed placing and subscription of shares raised a further
GBP16.61m (gross) with a total of 10,065,066 ordinary shares
issued.
16. Trade and other payables
2021 2020
GBP GBP
============================= ========= =========
Current:
Trade payables 1,211,220 451,857
Accrued expenses 1,021,105 465,291
Other payables - 74,905
Taxation and Social Security 371,381 77,567
============================= ========= =========
2,603,706 1,069,620
============================= ========= =========
17. Lease liabilities
2021 2020
GBP GBP
------------------ ------------- --------------
Non-Current:
============= ==============
Lease liabilities 83,012 101,270
================== ============= ==============
83,012 101,270
------------------ ------------- --------------
18. Contingent Liabilities
(i) 2015 settlement agreement with Athena Consortium: In
accordance with a 2015 settlement agreement reached with the Athena
Consortium, although Jersey Petroleum Ltd remains a Licensee in the
joint venture, any past or future liabilities in respect of its
interest can only be satisfied from the Group's share of the
revenue that the Athena Oil Field generates and up to 60 per cent.
of net disposal proceeds or net petroleum profits from the Group's
interest in the P2170 licence which is the only remaining asset
still held that was in the Group at the time of the agreement with
the Athena Consortium who hold security over this asset. Any future
repayments, capped at the unpaid liability associated with the
Athena Oil Field, cannot be calculated with any certainty, and any
remaining liability still in existence once the Athena Oil Field
has been decommissioned will be written off. A payment was made in
2016 to the Athena Consortium in line with this agreement following
the farm-out of P2170 (Verbier) to Equinor and the subsequent
receipt of monies relating to that farm-out.
(ii) Equinor UK Limited: During 2020, JOG announced that it had
entered into a conditional Sale and Purchase Agreement ("SPA") to
acquire operatorship of, and an additional 70% working interest in
Licence P2170 (Blocks 20/5b and 21/1d) from Equinor UK Limited
("Equinor"), this transaction completed in May 2020. The
consideration for the acquisition consists of two milestone
payments, which will be accounted for in line with the cost
accumulation model, as opposed to contingent liabilities:
-- US$3 million upon sanctioning by the UK's North Sea
Transition Authority ("NSTA") of a Field Development Plan ("FDP")
in respect of the Verbier Field; and
-- US$5 million upon first oil from the Verbier Field.
The earliest of the milestone payments in respect of the
acquisition is not currently anticipated being payable before the
start of 2025.
(iii) ITOCHU Corporation and Japan Oil, Gas and Metals National
Corporation: During 2020, JOG announced that it entered into a
conditional Sale and Purchase Agreement ("SPA") to acquire the
entire issued share capital of CIECO V&C (UK) Limited, which
was owned by ITOCHU Corporation and Japan Oil, Gas and Metals
National Corporation, this transaction completed in April 2021. The
acquisition was treated as an asset acquisition rather than a
business combination due to the nature of the asset acquired. There
were no assets or liabilities acquired other than the 12% interest
in licence P2170 (Verbier). The consideration for the acquisition
includes a completion payment of GBP150k and two future milestone
payments, which are considered contingent liabilities:
-- GBP1.5 million in cash upon consent from the UK's North Sea
Transition Authority ("NSTA") for a Field Development Plan ("FDP")
in respect of the Verbier discovery in the Upper Jurassic (J62-J64)
Burns Sandstone reservoir located on Licence P2170; and
-- GBP1 million in cash payable not later than one year after
first oil from all or any part of the area which is the subject of
the Field Development Plan.
The earliest of the milestone payments in respect of the
acquisition is not currently anticipated being payable before the
start of 2025.
19. Share based payments
The Group operates several share options schemes. Options are
exercisable at the prices set out in the table below. Options are
forfeited if the employee leaves the Group through resignation or
dismissal before the options vest.
Equity settled share-based payments are measured at fair value
at the date of grant and expensed on a straight-line basis over the
vesting period, based upon the Group's estimate of shares that will
eventually vest.
The Group's share option schemes are for Directors, Officers and
employees. The charge for the year was GBP470,725 (2020:
GBP181,870) and details of outstanding options are set out in the
table below.
No. of No. of
shares shares
for which Options for which
options lapsed/non options
Exercise outstanding vesting outstanding
Date of price Vesting Expiry at 1 Jan Options Options during at 31 Dec
Grant (pence) date date 2021 issued Exercised the year 2021
Mar 2011 100 Vested Mar 2021 3,164 - - (3,164) -
Mar 2011 4,300 Vested Mar 2021 5,809 - - (5,809) -
Mar
Mar 2011 4,300 2014 Mar 2021 4,370 - - (4,370) -
Mar
Mar 2011 4,300 2015 Mar 2021 5,809 - - (5,809) -
Jul
Jul 2011 4,300 2011 Jul 2021 523 - - (523) -
Jul
Jul 2011 4,300 2012 Jul 2021 523 - - (523) -
Jul
Jul 2011 4,300 2014 Jul 2021 523 - - (523) -
Dec
Dec 2011 2,712 2012 Dec 2021 1,650 - - (1,650) -
Dec
Dec 2011 2,712 2014 Dec 2021 1,650 - - (1,650) -
May
May 2013 1,500 2014 May 2023 9,500 - - - 9,500
May
May 2013 1,500 2015 May 2023 9,500 - - - 9,500
Nov
Nov 2016 110 2016 Nov 2021 246,667 - (246,667) - -
Nov
Nov 2016 110 2017 Nov 2021 246,667 - (246,667) - -
Nov
Nov 2016 110 2018 Nov 2021 166,667 - (166,667) - -
Apr
Apr 2017 310 2017 Apr 2022 20,000 - - - 20,000
Apr
Apr 2017 310 2018 Apr 2022 20,000 - - - 20,000
Apr
Apr 2017 310 2019 Apr 2022 20,000 - - - 20,000
Jan
Jan 2018 200 2021 Jan 2025 420,000 - - - 420,000
Jan
Jan 2018 200 2018 Jan 2023 76,666 - - - 76,666
Jan
Jan 2018 200 2019 Jan 2023 76,667 - - - 76,667
Jan
Jan 2018 200 2020 Jan 2023 70,000 - - - 70,000
Nov
Nov 2018 172 2021 Nov 2025 150,000 - - - 150,000
Jan
Jan 2019 175 2020 Jan 2026 88,333 - - - 88,333
Jan
Jan 2019 175 2021 Jan 2026 88,333 - - - 88,333
Jan
Jan 2019 175 2022 Jan 2026 81,666 - - (13,333) 68,333
Jan
Jan 2019 175 2020 Jan 2024 11,667 - - - 11,667
Jan
Jan 2019 175 2021 Jan 2024 11,667 - - - 11,667
Jan
Jan 2019 175 2022 Jan 2024 11,667 - - - 11,667
Jan
Jun 2019 200 2021 Jun 2029 120,000 - - - 120,000
Jun
Jun 2019 110 2019 Jun 2029 40,000 - - - 40,000
Jan
Jan 2021 155 2022 Jan 2028 - 83,333 - - 83,333
Jan
Jan 2021 155 2023 Jan 2028 - 83,333 - - 83,333
Jan
Jan 2021 155 2024 Jan 2028 - 83,334 - - 83,334
Mar
Mar 2021 210 2022 Mar 2026 - 11,666 - - 11,666
Mar
Mar 2021 210 2023 Mar 2026 - 11,667 - - 11,667
Mar
Mar 2021 210 2024 Mar 2026 - 11,667 - - 11,667
Mar
Mar 2021 210 2022 Mar 2028 - 162,334 - (25,000) 137,334
Mar
Mar 2021 210 2023 Mar 2028 - 162,333 - (25,000) 137,333
Mar
Mar 2021 210 2024 Mar 2028 - 162,333 - (25,000) 137,333
Nov
Nov 2021 147 2022 Nov 2028 - 233,334 - - 233,334
Nov
Nov 2021 147 2022 Nov 2028 - 233,333 - - 233,333
Nov
Nov 2021 147 2022 Nov 2028 - 233,333 - - 233,333
-------- ------- -------- ---------------------- ------- --------- ---------- -----------------------
Total 2,709,333
The weighted average of the options granted during the year was
determined using a Black-Scholes valuation. The significant inputs
into the model were the mid-market share price on the day of grant
as shown above and an annual risk-free interest rate of 2%. The
volatility measured at the standard deviation of continuously
compounded share returns is based on a statistical analysis of
daily share prices from the date of admission to AIM to the date of
grant on an annualised basis. The weighted average exercise price
for the options granted in 2021 was 171 pence, the weighted average
remaining contractual life of the options was 7 years, the weighted
average volatility rates was 128.58% and the dividend yield was
nil. For schemes and scheme rules, please refer to the Remuneration
Report.
20. Related undertakings and ultimate controlling party
The Group and Company do not have an ultimate controlling party
or parent Company.
County of Incorporation
Subsidiary % owned Principal Activity Registered
Office
-------------------------- -------------- ---------------------------- ------------------------ ----------------
Jersey North Sea
Holdings Ltd 100% England & Wales Non-Trading 1
Jersey Petroleum
Ltd 100% England & Wales Oil Exploration 1
Jersey V&C Ltd 100% England & Wales Oil Exploration 1
Jersey E & P Ltd 100% Scotland Non-Trading 2
Jersey Oil Ltd 100% Scotland Non-Trading 2
Jersey Exploration
Ltd 100% Scotland Non-Trading 2
Jersey Oil & Gas
E & P Ltd 100% Jersey Management services 3
-------------------------- -------------- ---------------------------- ------------------------ ----------------
Registered Offices
1. 10 The Triangle, ng2 Business Park, Nottingham, NG2 1AE
2. 6 Rubislaw Terrace, Aberdeen, AB10 1XE
3. First Floor, Tower House, La Route es Nouaux, St Helier, Jersey JE2 4ZJ
21. Notes to the consolidated statement of cash flows
Reconciliation of Loss Before Tax to Cash Used in Operations
2021 2020
GBP GBP
--------------------------------------------------- ----------- -----------
Loss for the year before tax (4,225,317) (2,781,931)
Adjusted for:
Depreciation 34,472 23,977
Impairments 447,812 -
Depreciation right-of-use asset 138,176 135,493
Share-based payments (net) 470,724 181,870
Finance costs 6,098 8,262
Finance income (1,807) (27,937)
=================================================== =========== ===========
(3,129,842) (2,460,266)
(Increase)/decrease in trade and other receivables 99,856 (27,352)
Increase in trade and other payables 1,534,087 327,454
=================================================== =========== ===========
Cash used in operations (1,495,899) (2,160,164)
--------------------------------------------------- ----------- -----------
Cash and cash equivalents
The amounts disclosed on the consolidated Statement of Cash
Flows in respect of Cash and cash equivalents are in respect of
these statements of financial position amounts:
Year ended 2021
31 Dec 2021 31 Dec 2020
GBP GBP
========================== ============== ============
Cash and cash equivalents 13,038,388 5,081,515
========================== ============== ============
Year ended 2020
31 Dec 2019 1 Jan 2019
GBP GBP
========================== =========== =============
Cash and cash equivalents 5,081,515 12,318,536
========================== =========== =============
Analysis of net cash
-------------------------- ---------------------------------------------
At 1 Jan 2021 Cash flow At 31 Dec 2021
GBP GBP
-------------------------- ------------- -------------- --------------
Cash and cash equivalents 5,081,515 7,956,873 13,038,388
-------------------------- ------------- -------------- --------------
Net cash 5,081,515 7,956,873 13,038,388
-------------------------- ------------- -------------- --------------
22. Post balance sheet events
The Group has considered its supply chain and activities in
light of the Russia/Ukraine war and does not believe that there
will be any impact on its business .
23. Availability of the 2021 Annual Report
A copy of the full annual report will be made available for
inspection at the Company's registered office during normal
business hours on any weekday. The Company's registered office is
at 10 The Triangle, ng2 Business Park, Nottingham NG2 1AE. A copy
can also be downloaded from the Company's website at
www.jerseyoilandgas.com. Jersey Oil and Gas plc is registered in
England and Wales, with registration number 7503957.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR IRMMTMTATTAT
(END) Dow Jones Newswires
April 28, 2022 02:02 ET (06:02 GMT)
Jersey Oil And Gas (LSE:JOG)
Historical Stock Chart
From Apr 2024 to May 2024
Jersey Oil And Gas (LSE:JOG)
Historical Stock Chart
From May 2023 to May 2024