Deltic Energy Plc
Annual Report & Accounts 2024
Contents
Strategic Report
1 Chairman’s Statement
2 Chief Executive’s Statement
3 Operational Review
5 Environment Social and Governance
7 Financial Review
9 Business Risks
10 Section 172 Statement
11 Investing Policy
Corporate Governance
12 Chairman's Introduction
12 Corporate Governance Statement
15 Audit Committee Report
16 Remuneration Committee Report
17 Board of Directors and Senior Management
18 Report of the Directors
20 Statement of Directors’ Responsibilities
21 Independent Auditor’s Report
Financial Statements
26 Income Statement
26 Statement of Comprehensive Income
27 Balance Sheet
28 Statement of Changes in Equity
29 Statement of Cash Flows
30 Notes to the Financial Statements
Chairman’s Statement
01
Strategic Report
Corporate Governance
Financial Statements
Looking back over another year of contrasting events, it seems again that we made significant progress in 2024 in executing
our strategy notwithstanding serious external factors creating headwinds.
While details will be covered in other sections, by far the highlight of the year was the safe, successful drilling of the Selene well
in the Southern North Sea during late 2024.
While detailed work is ongoing to determine the best commercial strategy, and prepare for production, all Joint Venture parties
agree that this is a commercially-viable volume of gas, similar to many existing Southern North Sea fields that came on-stream
since the 1970s. Selene also has a straightforward route to market, via the Norwich Bacton plant which has capacity to receive
and process gas just like this and has been doing so since it was opened by the late Prince Philip in 1969. The operator of the
Selene field is the operator of the gas processing plant, and this symmetry has been part of the Deltic plan since it was awarded
the licence and performed the initial farm down of its interest to the current operator.
In contrast to continued exploration success, political hostility towards our sector continues. Both the previous UK Government
and the new government applied political expediency and populism as well as ideology to create or amplify a negative attitude
towards UK oil and gas from NGO and investor communities.
But this is strange when you consider that, fundamentally, all parties including the committee on climate change and leaders in
government accept the need for continued supply of gas, and, while we accept that demand will fall in the coming years, it is
clear that domestic gas demand forecasts greatly exceed forecasts of production. Meeting that demand by increasing imported
supplies does not make sense for the desired economic growth we hear so much about, nor from an environmental perspective
given imports’ much greater emissions. There are clear signs of the government understanding this and the direction of travel
appears more positive or at least less negative. The current government has offered repeated assurances of support for existing
assets and licences, but the industry must work hard to ensure the pace is consistent with its development goals.
Other assets will be covered in the rest of this report but hopefully this provides a high-level glimpse of the highs and lows of
the last 12 months. I would like to thank all Deltic staff for their ongoing efforts last year and also our shareholders for their
continued patience and support.
Our exploration success rate has been two out of two wells. This is an outstanding record and testimony to one of our
fundamental business principles of thorough technical work by experts in this area. The eventual outcome for our first drilling
success at Pensacola, in large part a function of timing in relation to the requirements for investment, alongside external,
predominantly politically driven factors, continues to be a painful experience as it would be for any explorer that first identified
an opportunity that had been overlooked.
Over the last 12-18 months, the Company has faced a common dilemma that an exploration company can have, which is finding
the funds to turn exploration success into value in what continues to be a very difficult market for attracting equity funding,
particularly for UK-focused companies given recent political uncertainties, and a sluggish farm-out market.
It is in this context that, on 30 June 2025, the boards of Rockrose Energy Limited ("Viaro Bidco") a wholly-owned subsidiary of
Viaro Energy Limited ("Viaro Energy") and Deltic announced that they had reached agreement on the terms of a
recommended cash offer for the entire issued share capital of Deltic (the "Acquisition"). With the Board’s considerations for the
recommendation being set out in the announcement in respect of the Acquisition made on 30 June 2025, we believe the cash
offer is in the best interests of shareholders and we are asking that shareholders support the Board’s recommendation.
Mark Lappin
Chairman
30 June 2025
Deltic Energy Plc Annual Report & Accounts 2024
Chief Executive’s Statement
02
Strategic Report
2024 was another tumultuous year for the UK oil and gas industry which saw the election of a new government that started out
with a less than favourable outlook on the UK’s homegrown oil and gas exploration and production (“E&P”) industry. This led to
continued uncertainty and further erosion of trust between government, regulator, operating companies and many investors
who no longer see the UK Government as a reliable partner when considering the long-term investments required to sustain
activity within the sector.
This ongoing act of self-harm by the UK Government has had real world impacts and, for Deltic, this manifested itself in the loss
of the Pensacola project. Although the operating environment in the UK remains far from optimal, we recognise that there was
a perfect storm of events in 2024 that prevented Deltic from raising funds from UK equity markets and also knocked the
industry confidence required for a farm-in or other funding solution for the Pensacola project.
But perhaps we are now starting to see some more positive signs after a very difficult period. A government focused on growth
and live consultations, in relation to a new fiscal regime and the future of North Sea licensing, gives me further confidence that
the UK Government is starting to recognise the potential of the UK E&P industry to help meet its own energy security and net
zero objectives. We attribute this to significant progress being made in the background as the industry continues to educate
government on the importance of the UK’s domestic E&P industry in terms of local jobs, tax revenue, energy security and
Scope 3 emissions. The Prime Minister has recently greenlit the large Rosebank and Jackdaw projects in the North Sea
following a re-submission of their environmental impact assessments with the appropriate Scope 3 assessment. The
government restating its commitment to progressing extant licences to development is, of course, critical to the Selene gas
project and Deltic’s other licences.
Against this background, Deltic continued to make progress. The drilling of the Selene discovery well in the second half of 2024
saw the Company extend its run of exploration success. Following discovery, Deltic’s JV partners on Selene, Shell and Dana
Petroleum, supported the move into the Second Term of the Licence and the Joint Venture parties immediately commenced
the work required to prepare a Field Development Plan (“FDP”) for the Selene project. Notwithstanding this, the UK equity
markets and industry funding/farm-in markets remain very challenging.
Despite the difficult backdrop, the achievements of the Deltic team and the quality of assets including the Selene discovery
have been recognised by industry and have precipitated the proposed Acquisition of the entire issued and to be issued
ordinary share capital of Deltic by Viaro Bidco, as announced on 30 June 2025. The Board intends to unanimously recommend
that shareholders vote in favour of the Acquisition, with the Board’s considerations for the recommendation being set out in the
announcement in respect of the Acquisition made on 30 June 2025. We are asking that shareholders support the Board’s
recommendation. The formal documentation in relation to the Acquisition will be sent to shareholders in due course.
Andrew Nunn
Chief Executive Officer
30 June 2025
Deltic Energy Plc Annual Report & Accounts 2024
Deltic Energy Plc Annual Report & Accounts 2024 03
Strategic Report
Corporate Governance
Financial Statements
P2437 – Selene Gas Project
Following the successful farm-down of a further 25% working interest in the Selene project to Dana Petroleum in April 2024,
the Company retained a 25% working interest in this significant gas discovery in the Southern North Sea.
Discovery
Well 48/8b-3z was drilled with the Valaris 123 jack-up drilling rig with operations commencing in late July 2024. The well
reached its target depth of 3,540m TVDSS on 17 October 2024 and proved a 160-metre thick section of Leman Sandstone.
The top of the Leman Sandstone was encountered approximately 70 metres deep to prognosis with elevated mud gas
readings, confirming the presence of gas, observed throughout the reservoir interval and into the underlying Carboniferous
basement.
Subsequent coring, wireline logging and fluid sampling operations confirmed the presence of a live gas column above a
gas-water contact at circa 3,370 metres which is in the middle of the B-Sand, the key producing interval within the overall
Leman Sandstone section. Updated post-well structural maps of the Selene prospect point towards a maximum gas column of
circa 100 metres.
Laboratory analysis of the core is substantially complete and has been integrated with data collected from the wellsite allowing
Deltic to update its volumetric model and economic assessment of the Selene discovery. The results of this work were
announced on 15 April 2025.
Analysis of 176 core samples taken from the key B-sand interval has confirmed that the B-Sand reservoir properties at the well
location were towards the very high end of the ranges predicted pre-drill. The B-Sand encountered in the well was 53 metres
thick (versus a pre-drill P50 estimate of 47 metres) with an average porosity of 15.1% (up from a P50 porosity estimate of 11% for
the B-sand) and a gas saturation in line with pre-drill expectations.
This core analysis also confirmed the reservoir characteristics indicated by the downhole test, which recovered gas samples and
indicated permeabilities in the range of 1 to 5mD above the gas-water contact. Average permeability measured from core
samples indicates an average permeability of 2.6mD for the B-sand with numerous higher quality layers with permeabilities of
up to 80mD. These porosity and permeability attributes have supported the use of more favourable recovery factors
for the B-Sand in the updated volumetric model.
Analysis of the gas samples collected during well testing operations point to a very dry gas with methane (CH4) concentrations
of >94% with CO2, N2 and H2S meeting National Grid Entry Specifications with no major processing requirements for gas
export. This is considered significant from a development and commercial perspective.
The Company was recently informed by Shell of an overspend on the Selene well which has resulted in unexpected costs being
allocated to the Company. Further details of these costs are set out in the Financial Review.
Endymion Opportunity
Based on data acquired during the drilling of the Selene exploration well in 2024, Deltic has reviewed the prospectivity
associated with the Endymion structure located on the north-eastern corner of the P2437 licence area. Endymion is a structural
extension of the depleted Mimas gas field.
It is envisaged that the Endymion structure would be developed via a single subsea tie-back to the proposed Selene
development infrastructure. Any additional gas produced from Endymion could further materially enhance the overall Selene
licence project economics and could maximise the use of the proposed Selene infrastructure for a number of additional years.
It is expected that any drilling on Endymion would only occur after Final Investment Decision (“FID”) on the core Selene
development had been secured.
Selene – Next Steps
Over the coming months the post-well analysis workflows will draw to a close and the Operator and JV partners will shift their
focus to preparation of the FDP. The FDP is the key document detailing all the subsurface, engineering, operational and cost
elements required for achieving the required regulatory approvals and ultimately a ‘FID’. Timeline guidance provided by the
Operator indicates that FID is planned for early 2027 and first gas is expected to be in H1 2029.
P2672 - Blackadder Gas Discovery
Licence P2672 was formerly awarded on a 100% basis to Deltic Energy in July 2024 as part of the 33rd Offshore Licensing
Round. The licence is located in an area of mature infrastructure, immediately to the west of the West Sole gas field which has
produced more than 2 TCF of gas since it first came online in 1967.
Operational Review
Deltic Energy Plc Annual Report & Accounts 2024
04
Strategic Report
Based on knowledge gained from the Selene project, Deltic has updated the depth conversion of the legacy 3D seismic data
across the Blackadder licence and surrounding areas. Based on this work, Deltic believes that the Pharos discovery, drilled by
well 47/05d-6, and the previously identified Blackadder prospect are likely part of a larger single structure.
The 47/05d-6 well, drilled by a consortium led by Dana Petroleum in 2013, encountered a gas-bearing Leman Sandstone
reservoir, although the gas column was significantly shorter than pre-drill predictions and the well was plugged and abandoned
without testing. Deltic’s updated mapping indicates that this well was drilled in a very down-dip location which accounts for the
shorter gas column encountered and indicates the potential for a significant up-dip gas volume in the greater Blackadder
structure.
The Blackadder area is structurally challenging and the Phase A Work Programme is focused on the reprocessing of legacy 3D
seismic data to improve reservoir imaging which in turn should allow a more refined structural interpretation, further de-risking
the Blackadder structure.
Based on interest from the E&P community following the Selene discovery, Deltic launched a farm-out process on the licence in
March 2025 to find a partner, or partners, to help move the project towards drilling. Although a number of potential
counterparties have looked at the asset, it has been difficult to gain significant momentum to date given the prevailing fiscal
and political backdrop.
P2646 – Dewar Prospect
Licence P2646 was formerly awarded on a 100% basis to Deltic Energy in May 2024 as part of the 33rd Offshore Licensing
Round. The licence is located in an area of mature infrastructure, immediately to the south-east of BP’s ETAP field.
Dewar is the main prospect on P2646 and is an AVO-supported prospect within sands of the Forties Sandstone Member.
The subsurface opportunity is well understood from the legacy work completed by Deltic and while the prospect is robust
there are significant challenges in terms of access to export infrastructure. The Company's intention is to review potential
development and export options for this low-risk exploration prospect again in 2026, before looking to introduce a partner to
help take this project forward.
While Deltic reviews the potential offtake options, the Dewar licence remains in 'care and maintenance' mode and, other than
nominal licence rental and NSTA levy fees, the Company expects to incur no further costs on this licence during 2025.
Portfolio Management
During the period, Deltic either relinquished or withdrew from three UKCS licences including the Pensacola and Syros licences.
The Company was forced to withdraw from Licence P2252 containing the Pensacola discovery when it became clear that the
Company was unable to fund its way forward through the appraisal well process during the period of uncertainty for the
industry in the run-up to the general election in July 2024.
Licence P2558 (Pensacola North), located immediately to the north of Pensacola, was allowed to lapse at the end of Phase
A after the JV determined that there were no credible drilling targets identified within the licence area.
Despite a positive response from industry to Deltic’s farm-out process on Licence P2542, containing the Syros prospect, a
farm-out was not achieved within Phase A of the licence. Given the backdrop of political and fiscal policy uncertainty which
persisted throughout 2023 and 2024, Deltic requested an extension to Phase A to allow the farm-out process to continue after
the budget announcements in October 2024. This extension request was refused by the NSTA and the licence lapsed at the
end of Phase A on 1 December 2024.
Andrew Nunn
Chief Executive Officer
30 June 2025
Operational Review
continued
Deltic Energy Plc Annual Report & Accounts 2024 05
Recommendations of the Task Force for Climate-related Financial Disclosures
Given the micro-cap scale of the Deltic business, mandatory compliance with the Recommendations of the Task Force for
Climate-related Financial Disclosures (“TCFD”) is not required. However, Deltic is working towards compliance with relevant
aspects of the guidance.
The disclosures set out below are therefore voluntary and are focused on the areas which Deltic believes are most directly
relevant to the business. They are made in good faith and are a demonstration of Deltic’s ambitions to comply with the
recommendations as and when they become applicable to the business and are not intended to demonstrate full compliance
with the recommendations at this point in time.
TCFD disclosures are categorised into four key areas – Metrics and Targets, Risk Management, Strategy and Governance as
summarised in the table below:
TCFD Recommendations
Deltic Disclosures
Metrics and Targets
Disclose the metrics and targets
used to assess and manage relevant
climate-related risks and
opportunities where such
information is material
Deltic has historically disclosed management’s estimates of the Company’s Scope 1 &
2 emissions. Since 2023, Deltic has engaged Carbon Neutral Britain Ltd (“Carbon
Neutral Britain”) to provide an independent assessment of the Company’s Scope 1,
2 & 3 emissions based on information provided by the Company.
Deltic’s combined Scope 1, 2 & 3 emissions for the period 1 November 2023 to
31 October 2024 were estimated at 21.60 Tones CO2e by Carbon Neutral Britain.
Methodologies used by Carbon Neutral Britain comply with ISO 14064 and the
GHG Emissions Protocol Accounting Standard.
Carbon offsets, equivalent to Deltic’s Scope 1, 2 & 3 emissions, were purchased
through Carbon Neutral Britain’s Climate FundTM Portfolio such that Deltic Energy has
been certified as a carbon neutral business.
Risk Management
Disclose how the Company identifies,
assesses and manages climate-
related risks
The Company is in the process of extending its Risk Management Procedure to
address Climate Related Risks including the compilation of a Risk and Opportunity
Register which incorporate ESG and political factors in additional to more traditional
technical and corporate risk factors.
Key areas of focus include:
• Political and Government Policy Risks including net zero policies, changes to the
hydrocarbon licensing regime & fiscal regime changes impacting both E&P
taxation and environmental taxation
• Social Licence to Operate and changing views of the E&P industry
• Emerging Technology – carbon capture and storage (CCS), Hydrogen &
emissions reduction opportunities
Strategy
Disclose the actual and potential
impacts of climate-related risks and
opportunities on the organisation’s
businesses, strategy, and financial
planning where such information is
material
The Deltic Board recognises a range of risks and opportunities within the
climate-related space that may affect the business and is supportive of adopting a
transparent and auditable approach to risk management at a strategic and
operational level.
The inclusion of climate-related risks within the Risk Register is the first step to
ensuring that the Company’s strategy and activities in the UKCS are resilient to a
range of climate change scenarios.
Governance
Disclose the organisation’s
governance around climate-related
risks and opportunities
The implementation of a robust risk management process for all of Deltic’s activities
is a key focus for the Board. An extension of the Company’s risk management
process to encompass climate-related risks will ensure that relevant climate related
risks are identified and managed in a transparent and consistent manner.
The output of the risk management process will be reviewed by the Board on a
regular basis and be incorporated into reviews of Company strategy and direction to
Deltic management.
Strategic Report
Corporate Governance
Financial Statements
Environmental, Social and Governance
Deltic Energy Plc Annual Report & Accounts 2024
06
Strategic Report
Climate Related Emissions and Energy Performance
As a non-producing office-based organisation with no operated offshore activity in the 2024 reporting period, the magnitude
of climate-related emissions associated with the Company’s activities is limited. As with the previous reporting period, Deltic
engaged Carbon Neutral Britain to undertake an independent assessment of Deltic’s Scope 1, 2 & 3 climate-related emissions
between 1 November 2023 and 31 October 2024. Carbon Neutral Britain’s report, including emissions estimation methodology,
is available on the Company’s website.
Deltic reports its GHG emissions in relation to its operated assets in the UK.
Reporting Units 2024a 2023a 2022b
Direct GHG Emissions (Scope 1) kgCO2e 0 0 0
Indirect GHG Emissions (Scope 2) kgCO2e 7,790 6,807 6,419
Indirect GHG Emissions (Scope 3) kgCO2e 13,804 14,968c N/A
Total Scope 1 & 2 Emissions kgCO2e 7,790 6,807 6,419
Carbon Intensity kgCO2/boe N/A N/A N/A
Methane Intensity % N/A N/A N/A
Energy Consumption kWh 37,628 32,872 34,427
a) Deltic’s 2023 climate-related emissions as estimated by Carbon Neutral Britain
b) Deltic’s Scope 1 & 2 climate-related emissions as estimated by Deltic Management
c) Since 20 Jan 2020 our Fixed Business Plan, which accounts for 24,103 kWh of our total Scope 2 emissions in 2024 is on a 100% renewable electricity tariff.
Deltic has offset 21.59 tonnes CO2e, equivalent to Deltic’s total Scope 1, 2 & 3 emissions, through Carbon Neutral Britain’s
Climate FundTM Portfolio of verified carbon offsetting projects around the world and, as a result, the Company has been
certified as a Carbon Neutral business.
Health & Safety Performance
The health and safety of our staff, contractors and other stakeholders is a key focus as we continue to grow the business and
our operational scope. There were no reportable incidents or lost time injuries (‘LTIs’) reported in conjunction with the
Company’s activities in 2024.
The Company records health and safety performance and statistics in compliance with the Reporting of Injuries, Diseases and
Dangerous Occurrences Regulations 2013 (“RIDDOR”).
2024 2023 2022 2021
First Aid Incidents 0 0 0 0
Lost Time Injuries (1-7 days) 0 0 0 0
RIDDOR Reportable 0 0 0 0
Fatalities 0 0 0 0
Estimated Total Work Hours 9,397 11,403 10,624 9,064
Environment Social and Governance
continued
Deltic Energy Plc Annual Report & Accounts 2024
07
Strategic Report
Corporate Governance
Financial Statements
Overview
The Company started the year with a cash balance of
£5.6 million and ended the year to 31 December 2024 with a
cash balance of £1.4 million. 2024 saw the Company farm-out
a 25% interest in Licence P2437, containing the Selene
Prospect, and drilling the Selene exploration well. The
Company also provided its notice of withdrawal from the
Pensacola licence.
The farm-in arrangements with Shell U.K. Limited (“Shell”)
and Dana Petroleum (E&P) Limited (“Dana”) resulted in Deltic
being carried for most of its share of costs associated with
drilling the Selene discovery well in 2024. However, the
Company was recently informed by Shell of an overspend on
the Selene well which has resulted in unexpected costs being
allocated to the Company. This cost overrun on the Selene
well has resulted in additional costs, recognised for the
purpose of this 2024 annual report, as £1.3 million net to
Deltic. While discussions around a deferred payment
agreement, similar to that put in place in 2024 for Pensacola,
are ongoing, this would represent a significant deferred
liability for the Company that would likely be due prior to first
revenues from a potential Selene development. As part of the
commercial arrangements, $1 million of the Dana carry is
deferred and is likely to crystalise in May 2026, and will
become payable to the Company at that point.
Loss for the year
The Company incurred a loss, before the write down of
intangible assets, for the year to 31 December 2024 of
£2.8 million (2023: £2.8 million). Administrative expenses of
£2.9 million (2023: £3.0 million) were incurred during the year.
Deltic farmed out a 25% interest in Licence P2437, containing
the Selene Prospect, to Dana. Dana paid the Company
£1.0 million in cash on completion in relation to back costs
incurred by Deltic. The Company recognised a gain of
£0.1 million on the farm out of Licence P2437 to Dana which
is included as other operating income.
Finance income of £0.1 million (2023: £0.4 million) was
earned on short-term high interest-bearing deposits.
Corporation tax is payable on finance income earned, and
accordingly the Company has recognised an income tax
expense in the year of less than £0.1 million (2023:
£0.1 million). The Company has incurred expenditure since
incorporation on UK exploration and appraisal activities that
gives rise to a potential tax asset of £60 million that can be
utilised to offset future taxation.
The Company recognised an impairment in the period of
£18.0 million resulting from the decision to notify the partners
of Licence P2252 of the Company’s intention to withdraw
from the Pensacola licence and a write down of £0.4 million
was recognised during the year (2023: nil) resulting from the
relinquishment of P2542 (Syros).
Balance Sheet
The Company had total Capital and Reserves as at
31 December 2024 of £1.0 million (2023: £21.7 million).
The value of exploration assets decreased by £15.6 million
(2023: £7.9 million increase) to £1.9 million (2023:
£17.5 million) reflecting the write down recognised on the
withdrawal from the Pensacola licence, and the Selene
farm-out to Dana offset by operational cost spent. The Selene
asset of £1.9 million (2023: £1.1 million) is valued at cost to
Deltic on the balance sheet after the utilisation of the Joint
Venture Partners carry commercial arrangements and the
removal of 25% cost associated with the farm-down to Dana.
Property, plant and equipment of £0.1 million (2023:
£0.2 million) includes a right of use asset relating to the office
lease. The Property, Plant and Equipment reduction reflects
the depreciation charge for the year on the office lease,
fixtures and fittings and computer equipment.
The Company’s cash position at 31 December 2024 was
£1.4 million (2023: £5.6 million) with the year-on-year
decrease mainly arising from general and administrative
costs, investment in drilling operational costs offset by
proceeds from the farm-out of Selene to Dana.
Total current liabilities, which include short-term creditors,
accruals, provisions and lease liabilities was £1.6 million (2023:
£1.6 million). Liabilities of less than £0.1 million (2023:
£0.4 million) are due to the joint venture Operator for
payments associated with operations. Other payables and
accruals of £1.4 million (2023: £0.6 million) mainly represent
value of work done yet to be billed by the joint venture
Operator.
Total non-current liabilities of £0.9 million (2023: nil)
represent liabilities due under a deferred repayment
agreement agreed with the Pensacola JV whereby Deltic
have a 24-month period from September 2024 to repay
£0.9 million due to the JV.
Cash flow
As at 31 December 2024, the Company held cash and cash
equivalents totalling £1.4 million (2023: £5.6 million). The
Company had a net cash outflow for the year of £4.1 million
(2023: outflow £14.8 million).
A net cash outflow from operating activities of £2.5 million
(2023: £2.6 million) was incurred for general and
administrative costs.
A net cash outflow of £1.5 million (2023: £12.1 million) was
used in investing activities including £2.6 million (2023:
£12.5 million) on exploration and evaluation assets, offset by
proceeds of £1.0 million in relation to back costs incurred by
Deltic, as part of the farm out a 25% interest in the Selene
licence to Dana. Interest of £0.1 million was received (2023:
£0.4 million) on short term deposits.
Financial Review
Deltic Energy Plc Annual Report & Accounts 2024
08
Strategic Report
£2.6 million (2023: £12.5 million) invested on exploration and
evaluation assets represents £1.6 million (2023: £12.0 million)
paid mainly to Shell during the year for Pensacola appraisal
pre-drilling operations and £0.9 million (2023: £0.1 million)
was spent on Selene operations. The majority of Selene costs
incurred between the effective date and completion of the
Selene farm-out were reimbursed by Dana as part of the
Selene farm-out. Dana paid the Company £1.0 million
(2023: nil) proceeds for the farm-out of Selene being
£0.4 million initial contribution and a further £0.6 million as
repayment of Shell costs incurred by the Company between
the effective date and completion of the transaction. A
further £0.1 million (2023: £0.4 million) was spent developing
the other licences in the exploration portfolio. Bank interest of
£0.1 million (2023: £0.4 million) was earned on short term
high interest-bearing deposits on surplus.
Going concern
As part of the preparation of the Company’s financial
statements, the Directors have considered the Company’s
ability to continue as a going concern for a period of at least
12 months from the date of approval of these financial
statements.
On 30 June 2025, the boards of Rockrose Energy Limited
("Viaro Bidco") a wholly-owned subsidiary of Viaro Energy
Limited ("Viaro Energy") and Deltic announced that it had
reached agreement on the terms of a recommended cash
offer for the entire issued and to be issued ordinary share
capital of Deltic (the "Acquisition"), intended to be
implemented by way of a court-sanctioned scheme of
arrangement.
Completion of the Acquisition remains conditional on, among
other things, the approval of Deltic shareholders. The
Directors, the Company’s largest shareholder and certain
other shareholders have given irrevocable undertakings to
vote in favour of the Acquisition which is currently expected
to complete during Q4 2025.
To support the Company’s liquidity position during the period
to completion of the Acquisition, on 30 June 2025, Deltic
entered into a two-year term loan with Viaro Bidco whereby
Viaro Bidco has agreed to make available to the Company
funding of £2.7 million (“Term Loan”) which will be available
to be used to settle £1.3 million of current liabilities that are
due to Shell and for general corporate and working capital
purposes. The Term Loan is unsecured and interest will
accrue at a rate of 10 per cent. per annum on the principal
drawn down.
Viaro Bidco has also undertaken to pay, or procure the
payment of, certain costs reasonably and properly incurred by
Deltic in connection with the Acquisition. The costs
undertaking is capped at a maximum aggregate amount of
£650,000. The Company does not expect the costs
associated with the Acquisition to be more than £650,000.
In the absence of the Acquisition proceeding, the Directors
anticipate that the Company would be required to raise
additional capital in the going concern period to:
1) Settle any amount drawn down under the £2.7 million
Term Loan, which may include the repayment of the
£1.3 million Shell current liabilities;
2) Continue to fund the Company’s share of the Selene work
program until value can be realised from the Selene asset;
and
3) Cover the Company’s general corporate operating costs.
Against this backdrop, the Directors believe that the
Acquisition represents certainty for Deltic's Shareholders in
relation to the future of the Company. The Directors also
believe that, in the absence of alternative funding to the Term
Loan and the Acquisition progressing, the Company would be
in an extremely challenging financial position and the
Directors may have no option but to place the Company into
administration. Should administrators be appointed, it is not
known how much, if any, value would be returned to
Shareholders.
These circumstances represent a material uncertainty that
may cast significant doubt on the Company’s ability to
continue as a going concern. However, having regard to the
availability of the Term Loan entered into on 30 June 2025
and the cost coverage arrangements referred to above, the
Directors have a reasonable expectation that the Company
will have adequate resources to continue in existence to at
least the period prior to completion of the Acquisition.
Accordingly, the financial statements have been prepared on
a going concern basis. The Independent Auditor’s Report to
the members of Deltic Energy Plc for the year ended
31 December 2024 refers to this material uncertainty
surrounding going concern.
Sarah McLeod
Chief Financial Officer
30 June 2025
Financial Review
continued
Deltic Energy Plc Annual Report & Accounts 2024 09
Strategic Report
Corporate Governance
Financial Statements
Principal business risks
The Directors have identified the following current principal
risks in relation to the Company’s future performance. The
relative importance of risks faced by the Company can, and is
likely to change, with progress in the Company’s strategy and
developments in the external business environment. The
Directors have considered the potential impact of the
geopolitical environment and have concluded there are no
material risks associated to the Company.
Financial
The Company’s core risk is that its ability to effectively
implement its business strategy and to continue as a going
concern over time depends on its ability to potentially raise
additional capital and/or enter into further commercial and
financial arrangements. The need for and amount of any
additional capital and/or further commercial partnership
arrangements will depend on numerous factors related to the
Company’s current and future activities. The Company is
seeking additional capital, through partnership arrangements
and/or alternative financial arrangements, as it has
successfully done in the past. There can be no assurance that
financing will be available to the Company in a timely manner,
on favourable terms, or at all. If adequate capital is not
available on acceptable terms, the Company may not be able
to take advantage of opportunities, as well as possibly
resulting in the delay or indefinite postponement of the
Company’s activities.
Strategic
Strategy risk
The Company’s strategy may not deliver the results expected
by shareholders. The Directors regularly monitor the
appropriateness of the strategy, taking into account both
internal and external factors, and the progress in
implementing the strategy, and modify the strategy as may
be required based on developments. Key elements of this
process are regular strategy reviews, monthly reporting, and
regular Board meetings.
Competition risk
The addition of exploration licences to the Company’s
portfolio is subject to competition from other companies.
Many of the Company’s larger competitors have greater
financial and technical resources and are able to devote more
to the development of their business. The Company mitigates
this risk by choosing where and when to deploy its business
development resources.
Operational
Exploration and development risk
Activities within the Company’s licences may not result in
commercial development or otherwise realise value. There is
no certainty of success from the existing portfolio of licences.
The Company seeks to mitigate the exploration risk through
the experience and expertise of the Company’s specialists,
and the selection criteria used by the Company when
identifying prospective areas for licence applications. The
Company also has an objective to seek additional exploration
and development assets, in order to diversify the Company’s
portfolio of assets and hence risk.
Other business risks
In addition to the current principal risks identified above and
general business risks, the Company’s business is subject to
risks inherent in hydrocarbon exploration, development and
production activities. There are a number of potential risks
and uncertainties which could have a material impact on the
Company’s long-term performance and could cause actual
results to differ materially from expected and historical
results.
The Directors regularly monitor such risks, using information
obtained or developed from external and internal sources,
and will take actions as appropriate to mitigate these.
Effective risk mitigation may be critical to the Company in
achieving its strategic objectives and protecting its assets,
personnel and reputation. The Company assesses its risk on
an ongoing basis to ensure it identifies key business risks and
takes measures to mitigate these. Other steps include regular
Board review of the business, monthly management
reporting, financial operating procedures and anti-bribery
management systems. The Company reviews its business
risks and management systems on a regular basis, and
through this process, the Directors believe they have
identified the principal risks.
Business Risks
Deltic Energy Plc Annual Report & Accounts 2024
10
Strategic Report
Section 172 of the Companies Act 2006 requires Directors to
take into consideration the interests of stakeholders and
other matters in their decision making. The Directors continue
to have regard to the interests of the Company's employees
and other stakeholders, the impact of its activities on the
community, the environment and the Company's reputation
for good business conduct, when making decisions. In this
context, acting in good faith and fairly, the Directors consider
what is most likely to promote the success of the Company
for its members in the long term. We explain in this annual
report, and reference below, how the Board engages with
stakeholders.
Likely consequence of any decision in the long term
The Chairman’s and Chief Executive's Statements at pages 1-2
in this Annual Report, set out the Company's long-term
rationale and strategy.
Interests of Employees
The Company’s Corporate Governance Statement at
pages 12-14 of this Annual Report sets out under board
responsibilities the processes in place to safeguard the
interests of employees.
The Board has considered how employee working practices
have developed beyond the COVID crisis of 2020/2021 and
have implemented a more flexible and efficient ways of
working.
Further information is also provided in the Environment
Social and Governance statement at pages 5-6 of this
Annual Report.
Foster business relationships with suppliers, joint venture
partners and others
Potential suppliers and joint venture partners are considered
in the light of their suitability to comply with the Company’s
policies.
Impact of operations on the community and environment
However, the Company has a commitment to ensure
operations are conducted with as limited as possible
environmental impact.
The Company regularly reviews its Health, Safety &
Environment (‘HSE’) and other policies and works responsibly
with suppliers, and performance is monitored on an on-going
basis.
Maintain a reputation for high standards of business
conduct
The Corporate Governance section of this Annual Report at
pages 16-18 sets out the Board and Committee structures and
extensive board and committee meetings held during 2024,
together with the experience of executive management and
the Board and the Company's policies and procedures.
Act fairly between stakeholders
The Board regularly reviews the Company’s principal
stakeholders and how it engages with them. This is achieved
through information provided by management and by direct
engagement with stakeholders themselves.
Section 172 Statement
Deltic Energy Plc Annual Report & Accounts 2024
11
Strategic Report
Corporate Governance
Financial Statements
In addition to the development of the North Sea gas licences
the Company has acquired to date, the Company proposes
to continue to evaluate other potential oil and gas projects in
line with its investing policy, as it aims to build a portfolio of
resource assets and create value for shareholders. As
disclosed in the Company’s AIM Admission Document in May
2012, the Company’s substantially implemented Investment
Policy is as follows:
The proposed investments to be made by the Company may
be either quoted or unquoted; made by direct acquisition or
through farm-ins; either in companies, partnerships or joint
ventures; or direct interests in oil & gas and mining projects.
It is not intended to invest or trade in physical commodities
except where such physical commodities form part of a
producing asset. The Company’s equity interest in a
proposed investment may range from a minority position to
100% ownership.
The Board initially intends to focus on pursuing projects in
the oil & gas and mining sectors, where the Directors believe
that a number of opportunities exist to acquire interests in
attractive projects. Particular consideration will be given to
identifying investments which are, in the opinion of the
Directors, underperforming, undeveloped and/or
undervalued, and where the Directors believe that their
expertise and experience can be deployed to facilitate
growth and unlock inherent value.
The Company will conduct initial due diligence appraisals of
potential projects and, where it is believed further
investigation is warranted, will appoint appropriately qualified
persons to assist with this process. The Directors are currently
assessing various opportunities which may prove suitable
although, at this stage, only preliminary due diligence has
been undertaken.
It is likely that the Company’s financial resources will be
invested in either a small number of projects or one large
investment which may be deemed to be a reverse takeover
under the AIM Rules. In every case, the Directors intend to
mitigate risk by undertaking the appropriate due diligence
and transaction analysis. Any transaction constituting a
reverse takeover under the AIM Rules will also require
Shareholder approval.
Investments in early stage and exploration assets are
expected to be mainly in the form of equity, with debt being
raised later to fund the development of such assets.
Investments in later stage projects are more likely to include
an element of debt to equity gearing. Where the Company
builds a portfolio of related assets, it is possible that there
may be cross holdings between such assets.
The Company intends to be an involved and active investor.
Accordingly, where necessary, the Company may seek
participation in the management or representation on the
Board of an entity in which the Company invests with a view
to improving the performance and use of its assets in such
ways as should result in an upward re-rating of the value of
those assets.
Given the timeframe the Directors believe is required to fully
maximise the value of an exploration project or early stage
development asset, it is expected that the investment will be
held for the medium to long term, although disposal of assets
in the short term cannot be ruled out in exceptional
circumstances.
The Company intends to deliver Shareholder returns
principally through capital growth rather than capital
distribution via dividends, although it may become
appropriate to distribute funds to Shareholders once the
investment portfolio matures and production revenues are
established.
Given the nature of the Investing Policy, the Company does
not intend to make regular periodic disclosures or
calculations of its net asset value.
The Directors consider that as investments are made, and
new investment opportunities arise, further funding of the
Company will be required.
This strategic report contains certain forward-looking
statements that are subject to the usual risk factors and
uncertainties associated with the oil and gas exploration and
production business. Whilst the Directors believe the
expectation reflected herein to be reasonable in light of the
information available up to the time of their approval of this
report, the actual outcome may be materially different owing
to factors either beyond the Company’s control or otherwise
within the Company’s control but, for example, owing to a
change of plan or strategy. Accordingly, no reliance may be
placed on the forward-looking statements.
On behalf of the Board
Mark Lappin Andrew Nunn
Chairman Chief Executive Officer
30 June 2025
30 June 2025
Investing Policy
Deltic Energy Plc Annual Report & Accounts 2024
12
Corporate Governance
Chairman’s Introduction
As Chairman of the Company, I provide leadership, ensuring that the Board is performing its role effectively, and has the
capacity, ability, structure and support to enable it to continue to do so.
As an AIM quoted company, the Company has chosen to follow the Quoted Companies Alliance’s (“QCA”) Corporate
Governance Code 2018 (the ‘QCA Code’) published in April 2018. The Board recognises the value and importance of high
standards of corporate governance and believes that this provides the most appropriate framework for a company of our size
and stage of development.
This Governance section of the Annual Report provides an update on our Corporate Governance policy, and includes the Audit
Committee Report, Remuneration Committee Report and the Directors’ Report. In these reports we set out our governance
structures and explain how we have applied the QCA Code and where we have departed from the code during the year. The
QCA Code is set out in detail on the Company’s website at www.delticenergy.com/investor-relations/corporate-governance,
including an explanation as to how the Company addresses the ten key governance principles defined in the QCA Code.
In May 2019, the Company appointed me as independent non-executive Chairman. My extensive Oil & Gas technical and
commercial experience including the three years I previously served as an independent non-executive director of the Company
underpin my effectiveness in this role, as the Company enters its next stage of development.
Corporate Governance Statement
Board responsibilities
The Board is responsible to the Company’s shareholders for the leadership, control and management of the Company. It is
responsible for the long-term success of the Company and for ensuring its appropriate management and operation in pursuit of
its objectives.
The Board is in constant communication and meets regularly. Its responsibilities include:
•
Setting the Company’s strategy
•
Determining policies and values
•
Establishing and maintaining the Company’s system of internal control and reviewing effectiveness annually
•
Identifying the major business risks faced by the Company and determining appropriate risk management
•
Investing decisions
•
Fundraising decisions
•
Management appointments
Whilst there is a formal schedule of matters specifically reserved for approval by the Board, the two executive directors have
been given responsibility for specific functional aspects of the Company’s affairs.
The Board seeks to maintain the highest standards of integrity and probity in the conduct of the Company’s activities. These
values are enshrined in the written policies and working practices adopted by all employees. An open culture is encouraged
within the Company, with regular communications to staff regarding progress and staff feedback being regularly sought. This is
especially important as a small company, in order to fully harness its human capital in pursuit of the effective development of
the Company’s assets, and so achieve the objectives and strategy set out in the Strategic Report and to seek to mitigate the
risks and uncertainties described in the Business Risks section of the Strategic Report. The executive directors work closely
with the small number of employees, so the Board is well placed to assess its culture. The Board are prepared to take
appropriate action against unethical behaviour, violation of company policies or misconduct.
Composition of the Board
The Board currently comprises three Directors, of whom one is executive and two are non-executive. The Directors are all
identified on page 17, together with a summary of their current and past experience, skills and personal qualities.
Non-executive Chairman
As Chairman, Mark Lappin oversees the adoption, delivery and communication of the Company’s corporate governance model
and is responsible for ensuring that it is maintained in line with appropriate practice and policies agreed by the Board. He is also
the Company’s leading ambassador, which includes presenting the Company’s aims and policies to investors and other outside
parties. He promotes active communication with shareholders and other stakeholders, including speaking regularly with
investors and other stakeholders. He chairs the AGM and as chairman of the Board, he chairs Board meetings, ensuring that the
Board regularly reviews the Company’s strategy. He also oversees the composition and structure of the Board which involves
regularly reviewing the overall size of the Board, the balance between executive and non-executive, age, experience, skills and
personalities of the Directors.
Corporate Governance
Deltic Energy Plc Annual Report & Accounts 2024
13
Strategic Report
Corporate Governance
Financial Statements
Non-executive Directors
The two Non-executive Directors (Mark Lappin and Peter Nicol) have a responsibility to challenge independently and
constructively the performance of management and to help develop proposals on strategy. They each sit on the Remuneration
and Audit committees, enabling them to have a role in determining the pay and benefits of the executive directors, to review
internal control and financial reporting matters, and to have a direct relationship with the external auditors.
Independence and Commitments
The two Non-executive Directors are considered by the Board to be independent of management. The Board believes that they
continue to demonstrate an independence of character in the performance of their roles as Non-executive Directors. Their
director’s fees are fixed, and they do not benefit from share option awards.
The Directors are expected to attend Board meetings, meetings of Board Committees of which they are members, annual
general meetings, and any other shareholder meetings convened from time to time.
All Directors have disclosed any significant commitments outside their respective duties as Directors and confirmed that they
have sufficient time to discharge their duties.
Appointments
The Board believes there is an appropriate balance of skills, knowledge and personal qualities on the Board, which provides a
wide range of expertise on issues relating to the Company’s mission, operations, strategies and its standards of conduct. The
Chairman of the Board monitors the suitability of the Board’s composition on a continuing basis and will make
recommendations to the Board as and when appropriate.
Board support and external advice
Internal management is available to the Board to ensure all Board and Committee meetings are conducted properly and
procedures are in place for distributing meeting agendas and reports so that the Directors receive the appropriate information
to be discussed in a timely manner. The Directors each receive reports which include monthly finance and management results
and operational updates from the Chief Executive Officer and the Chief Financial Officer. Board minutes are taken by internal
management and circulated for approval at the next meeting. The Company Secretary assists the Board by maintaining
statutory registers and filings and assisting with organising shareholder general meetings.
Aside from the Directors’ stated roles, the Board members do not have any particular internal advisory responsibilities. Where it
considers it necessary to do so, the Board and Board committees may utilise external professional advisers to provide advice
and guidance on any matter where they consider it prudent to seek such advice, at the Company’s expense. No such external
advice was sought during the year.
Board performance evaluation
The Board evaluates its performance as a whole, informally on an ongoing basis. This falls under the overall responsibility of the
Chairman. There have been no recommendations concerning the Board structure arising from the Company’s Board appraisals
over the year ended 31 December 2024.
Board meetings
The Board meets formally a minimum of eleven times a year, excluding Board committee meetings. The table below sets out
the total number of meetings held by the Board and its Committees and records of attendance by each member eligible to
attend during the year ended 31 December 2024:
Board meetings Audit committee1 Remuneration committee1
Possible Attended Possible Attended Possible Attended
G C Swindells* 13 12 1 - - -
A J Nunn 17 17 1 - - -
S M McLeod 17 16 2 2 - -
P N Cowley** 13 9 1 1 - -
M S Lappin 17 16 2 2 1 1
P W Nicol 17 14 2 2 1 1
1 Only Non-executive Directors are entitled to vote in the meetings of these Board Committees.
* G C Swindells resigned on 14 October 2024
** P N Cowley resigned on 21 October 2024
Corporate Governance
continued
14
Corporate Governance
Other senior members of the management team and external advisors will attend, at the invitation of the Board, and as
appropriate to the matters under discussion.
Board committees
The Board has established an audit committee, remuneration committee and AIM compliance committee with formally
delegated duties and responsibilities, as described below. Each committee’s terms of reference are included on the Company’s
website.
Audit committee
The audit committee is responsible for monitoring the integrity of the Company’s financial statements, reviewing significant
financial reporting issues, reviewing the effectiveness of the Company’s internal control and risk management systems,
monitoring the effectiveness of the internal audit function and overseeing the relationship with the external auditors (including
advising on their appointment, agreeing the scope of the audit and reviewing the audit findings).
The audit committee comprises Peter Nicol and Mark Lappin and is chaired by Peter Nicol. The audit committee aims to meet
at appropriate times in the reporting and audit cycle and otherwise as required. The audit committee also meets regularly with
the Company’s external auditors.
Remuneration committee
The remuneration committee is responsible for determining and agreeing with the Board the framework for the remuneration
of the Chairman and the executive directors and, within the terms of the agreed framework, determining the total individual
remuneration packages of such persons including, where appropriate, bonuses, incentive payments and share options or other
share awards. The remuneration of Non-executive Directors is a matter for the chairman and the executive members of the
Board. No Director is involved in any decision as to his or her own remuneration.
The remuneration committee comprises Peter Nicol and Mark Lappin and is chaired by Peter Nicol. The remuneration
committee meets at least twice a year and otherwise as required.
AIM compliance committee
The AIM compliance committee is responsible for ensuring that the Company complies with its obligations under the AIM Rules
for Companies (“AIM Rules”) and the Market Abuse Regulation (Regulation EU 596/2014) (“MAR”) and, in particular makes
timely and accurate disclosure of all information that is required to be disclosed to meet its disclosure obligations arising from
the admission of its shares to trading on AIM and, under MAR.
The AIM compliance committee comprises Mark Lappin, Andrew Nunn and Sarah McLeod. The AIM compliance committee
meets as and when required, in order to undertake its responsibilities.
Share dealing code
The Company has adopted a share dealing code for the Directors, persons discharging managerial responsibilities and
applicable employees of the Company for the purpose of ensuring compliance by such persons with the provisions of the AIM
Rules relating to dealings in the Company’s securities (including, in particular, Rule 21 of the AIM Rules and MAR). The Directors
consider that this share dealing code is appropriate for a company whose shares are admitted to trading on AIM.
On behalf of the Board
Mark Lappin
Chairman
30 June 2025
Corporate Governance
continued
Deltic Energy Plc Annual Report & Accounts 2024
15
Overview
The audit committee met twice during the year. The external auditor, PKF Littlejohn LLP, also attended the meeting at the
invitation of the audit committee chairman.
External audit
On behalf of the board, the Audit Committee is responsible for managing the relationship with external auditor. PKF Littlejohn
LLP was appointed as the auditor of the Company during 2022 following a formal tender process, and will be proposed for
reappointment in accordance with section 485 of the Companies Act 2006.
The objectivity and independence of the external auditors is safeguarded by reviewing the auditors’ formal declarations,
monitoring relationships between key audit staff and the Company and reviewing the non-audit fees payable to the auditor.
Non-audit services are not performed by the auditor if this would have a material effect on, or relevance to, the production of
the Company’s financial statements and/or involve taking decisions or making significant subjective judgements that should be
the responsibility of management. During the year, amounts accrued to PKF Littlejohn LLP for audit services totalled £42,000
(2023: £40,000) and £1,650 (2023: £2,100) was paid for non-audit services.
Financial reporting
The audit committee monitored the integrity of the annual financial statements and reviewed the significant financial reporting
issues and accounting policies and disclosures in the financial reports. The external auditor, PKF Littlejohn LLP, attended the
audit committee meetings during the year. The process included the consideration of reports from the external auditor
identifying the primary areas of accounting judgements and key audit risks identified as being significant to the financial
statements.
Audit committee effectiveness
Although no formal review of the effectiveness of the audit committee has been undertaken, the Board and the chairman of the
audit committee believe this to be satisfactory. The chairman of the audit committee will continue to assess whether such a
formal review would be appropriate or otherwise, however, it is currently not considered necessary.
Internal audit
In light of the size of the Company and its current stage of development, the committee did not consider it necessary or
appropriate to operate an internal audit function during the year.
Peter Nicol
Chairman, Audit Committee
30 June 2025
Strategic Report
Corporate Governance
Financial Statements
Audit Committee Report
Deltic Energy Plc Annual Report & Accounts 2024
16
Corporate Governance
Following the departure on 21 October 2024 of Peter Cowley, as Non-Executive Director and Chairman of Remuneration
Committee, Peter Nicol was appointed as Chairman of the Remuneration Committee.
The remuneration committee reviews the scale and structure of the executive directors' remuneration and the terms of their
service contracts.
The remuneration and terms and conditions of appointment of the Non-executive Directors are set by the Board.
The remuneration committee met once during the year. During the meeting, the Remuneration Committee considered changes
in remuneration, share option awards, bonus awards and reporting of 2024 objectives.
During the year there were no changes to the Company's remuneration and employment conditions and all director salary
changes and bonuses were approved by the remuneration committee. A major independent, executive reward company,
Mercer Kepler Limited undertook a benchmarking exercise during 2019 on the Company's senior executive and board's
remuneration and this has been updated internally by the remuneration committee each year to determine appropriate salaries
and bonuses.
Although no formal review of the effectiveness of the remuneration committee has been undertaken, the Board and the
chairman of the remuneration committee believe this to be satisfactory. The chairman of the remuneration committee will
continue to assess whether such a formal review would be appropriate or otherwise.
Peter Nicol
Chairman, Remuneration Committee
30 June 2025
Remuneration Committee Report
Deltic Energy Plc Annual Report & Accounts 2024
17
Strategic Report
Corporate Governance
Financial Statements
Mark Lappin
Non-Executive Chairman
Mark has over 40 years of experience in the oil and gas
industry. Mark joined Deltic Energy as non-executive director
in 2016 and became Chairman in May 2019. Prior to that Mark
was Technical Director at Cuadrilla and Subsurface Director
for UK and Netherlands at Centrica. Mark began his career at
Phillips Petroleum and has held senior technical and
commercial roles with ExxonMobil and Dart Energy. Mark is
also a Visiting Professor at University of Strathclyde Centre
for Energy Policy in Glasgow.
Mark’s extensive technical, commercial and senior
management experience in the oil and gas sector ensures that
he has the ability to support the executive directors, challenge
strategy and decision-making, scrutinise performance and to
perform his role as Non-Executive Chairman as the Company
enters its next stage of development. Mark is also a member
of the Company’s audit, remuneration and AIM compliance
committees.
Andrew Nunn
Chief Executive Officer
Andrew Nunn joined the Company in 2014 and later that year
was appointed to the Board as Chief Operating Officer.
Andrew became Chief Executive in October 2024. Andrew is
a Chartered Geologist with over 20 years of experience
working on exploration, mining and geo-environmental
projects in Europe, Australasia and Africa. For the last 10 years
he has worked on a wide variety of UK and European
conventional and unconventional gas projects with a primary
focus on Carboniferous aged reservoirs. Andrew’s previous
role was as Exploration Manager for Dart Energy. He holds a
B.Sc. (Hons) in Economic Geology and an M.Sc. in
Environmental Management. Andrew became a Director of
the Oil and Gas Independents’ Association (OGIA) in
February 2020. Andrew is the Chairman of the Company’s
AIM compliance committee.
Andrew’s technical, commercial and operational experience,
plus his qualifications, ensures that he has the necessary
ability to develop and implement the Company’s strategy, and
oversee the management of the Company
Sarah McLeod
Chief Financial Officer
Sarah joined Deltic as Chief Financial Officer in January 2020.
Sarah has 20 years of experience in the international oil and
gas industry. She previously held the position of Group
Financial Controller at New Age Africa Global Energy. Sarah
spent 10 years with US-based international operator,
ConocoPhillips, in a variety of senior financial and strategic
roles and also two years with Maersk Oil. She started her
career with Deloitte, spending six years in its oil and gas team
during which time she qualified as a Chartered Accountant.
Sarah’s professional qualifications, finance and industry
experience ensures that she has the necessary ability to
manage the Company’s financial matters.
Peter Nicol
Non-Executive Director
Peter Nicol joined the Company in November 2021. Peter has
40 years of experience in the energy sector. He was
previously Head of Oil & Gas at GMP Securities Europe, Global
Sector Director of Oil & Gas Research at ABN Amro & Head of
European Oil & Gas Research at Goldman Sachs. Peter is a
non-executive director of exploration focused Touchstone
Exploration Inc. and Eco (Atlantic) Oil & Gas Ltd, both of
which are AIM quoted. He was previously an independent
director of ERC Equipoise Limited. Peter started his career
with British National Oil Corporation and holds a Bachelor of
Science in Mathematics & Economics from Strathclyde
University. Peter is chairman of the Company’s Audit
Committee and Chairman of the Remuneration Committee.
Peter’s wealth of energy, financial, city and public company
experience will be invaluable to Deltic as it progresses to the
next stage in development, and ensures he has the ability to
support the executive directors, challenge strategy and
decision-making, and to scrutinise performance.
Board of Directors and Senior Management
There is an appropriate breadth of experience, skills and personal qualities covering the key aspects of the business including
technical, operational and financial. It is the responsibility of each Director to keep skills up to date with the assistance of the
Chairman who has a core responsibility in addressing the development needs of the Board as a whole, with a view to enhancing
its overall effectiveness.
Deltic Energy Plc Annual Report & Accounts 2024
18
Corporate Governance
Report of the Directors
The Directors present their report with the financial statements of the Company for the year ended 31 December 2024.
Principal Activity
The Company’s principal activity is the exploration, evaluation and development of mineral exploration targets, with a principal
focus on the development of its gas and oil licences in the Southern and Central North Sea.
Review of Business
Further details of the Company’s business and expected future development are also set out in the Strategic Report starting on
page 1, commencing with the Chairman’s Statement.
Dividends
No dividends will be distributed for the year ended 31 December 2024 (2023: nil).
Directors
The Directors of the Company during the year and their beneficial interest in the ordinary shares and share options of the
Company at 31 December 2024 are set out below:
Ordinary shares Share options
2024 2023 2024 2023
G C Swindells (resigned 14 October 2024) 155,456 155,456 3,532,600 3,532,600
A J Nunn 61,765 61,765 3,532,600 3,532,600
M S Lappin 58,744 58,744 - -
P N Cowley (resigned 21 October 2024) 50,924 50,924 - -
P W Nicol 150,000 150,000 - -
476,889 476,889 7,065,200 7,065,200
Director’s Remuneration
The following table sets out an analysis of the pre-tax remuneration for the year ended 31 December 2024 for the individual
Directors who held office in the Company during the year.
2024 2024 2024 2024 2024 2023
Salaries Bonus Benefits
and fees payments Pension in Kind Total Total
£ £ £ £ £ £
G C Swindells * 335,950 - 31,331 7,668 374,949 399,518
A J Nunn 293,733 - 29,373 3,857 326,963 371,471
M S Lappin 69,193 - - - 69,193 66,660
P N Cowley ** 29,762 - - - 29,762 33,330
P W Nicol 34,597 - - - 34,597 33,330
763,235 - 60,704 11,525 835,464 904,309
* G C Swindells resigned 14 October 2024.
** P N Cowley resigned 21 October 2024.
The directors did not receive any other emoluments, compensation or cash or non-cash benefits other than as disclosed above.
Share options
The share-based payment of £308,093 (2023: £320,660) to Directors represents the share-based expense relating to unvested
share options during the year.
Deltic Energy Plc Annual Report & Accounts 2024
19
Strategic Report
Corporate Governance
Financial Statements
The following share options table comprises share options held by Directors who held office during the year ended 31
December 2024:
Options
Options held at granted/ Options Options held at
31 December lapsed in exercised 31 December Exercise Exercisable Exercisable
2023 period in period 2024 price (p)* from to
G C Swindells 600,000 – – 600,000 28.25 23 August 2024 23 August 2032
Resigned 499,980 – – 499,980 51.00 12 July 2025 12 July 2032
14 October 2024 499,980 – – 499,980 41.00 22 Sept 2022 22 Sept 2031
999,960 – – 999,960 35.00 8 July 2022 8 July 2029
450,000 – – 450,000 46.40 07 June 2019 07 June 2028
110,000 (110,000) – – 75.00 30 April 2015 30 April 2024
372,680 – – 372,680 26.50 10 June 2017 10 June 2026
A J Nunn 600,000 – – 600,000 28.25 23 August 2024 23 August 2032
499,980 – – 499,980 51.00 12 July 2025 12 July 2032
499,980 – – 499,980 41.00 22 Sept 2022 22 Sept 2031
999,960 – – 999,960 35.00 8 July 2022 8 July 2029
410,000 – – 410,000 46.40 07 June 2019 07 June 2028
150,000 (150,000) – – 77.60 6 Sept 2015 22 May 2024
372,680 – – 372,680 26.50 10 June 2017 10 June 2026
Further details of share-based payments are set out in note 17.
Financial Instruments
Details of the use of financial instruments by the Company are contained in note 22 of the financial statements.
Subsequent Events
Events subsequent to 31 December 2024 are set out in note 27 to the financial statements on page 48.
Business Risks
A summary of the principal and general business risks can be found in the Strategic Report on page 9 and in note 22 to the
financial statements.
Key Performance Indicators
At this stage in its development, the Company is focusing on the development of its North Sea gas and oil assets, applying for
new licences, maintaining and extending existing licences, as well as the evaluation of various oil and gas opportunities. The
Directors closely monitor certain financial information, in particular the levels of overheads and other administrative
expenditure, exploration expenditure and cash and deposit balances, as set out in the Financial Review. As and when the
Company moves into production, other financial, operational, health and safety and environmental KPIs will become relevant
and will be measured and reported as appropriate.
Disclosure of Information to Auditors
So far as the Directors are aware, there is no relevant audit information (as defined by Section 418 of the Companies Act 2006)
of which the Company’s auditors are unaware, and each Director has taken all the steps that he ought to have taken as a
director in order to make himself aware of any relevant audit information and to establish that the Company’s auditors are
aware of that information.
Auditors
PKF Littlejohn LLP will be proposed at the Annual General Meeting for reappointment in accordance with section 485 of the
Companies Act 2006.
On behalf of the Board
Andrew Nunn
Chief Executive Officer
30 June 2025
Report of the Directors
continued
Deltic Energy Plc Annual Report & Accounts 2024
20
Corporate Governance
Statement of Directors’ Responsibilities
The Directors are responsible for preparing the Annual Report and the financial statements in accordance with applicable law
and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have
elected to prepare the financial statements in accordance with UK Adopted International Accounting Standards in conformity
with the requirements of the Companies Act 2006. Under Company law the Directors must not approve the financial
statements unless they are satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or
loss of the Company for that period. The Directors are also required to prepare financial statements in accordance with the
rules of the London Stock Exchange for companies trading securities on the AIM Market.
In preparing these financial statements, the Directors are required to:
• Select suitable accounting policies and then apply them consistently;
• Make judgements and accounting estimates that are reasonable and prudent;
• State whether they have been prepared in accordance with UK adopted International Accounting Standards in conformity
with the requirements of the Companies Act 2006; subject to any material departures disclosed and explained in the
financial statements; and
• Prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will
continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to
ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the
assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Website publication
The Directors are responsible for ensuring the Annual Report and the financial statements are made available on a website.
Financial statements are published on the Company’s website in accordance with legislation in the United Kingdom governing
the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The
maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’ responsibility also
extends to the on-going integrity of the financial statements contained therein.
Deltic Energy Plc Annual Report & Accounts 2024
21
Strategic Report
Corporate Governance
Financial Statements
Independent Auditor’s Report
to the members of Deltic Energy Plc
Opinion
We have audited the financial statements of Deltic Energy Plc (the ‘Company’) for the year ended 31 December 2024 which
comprise the Income Statement, the Statement of Comprehensive Income, the Balance Sheet, the Statement of Changes in
Equity, the Statement of Cash Flows and notes to the financial statements, including significant accounting policies. The
financial reporting framework that has been applied in their preparation is applicable law and UK-adopted international
accounting standards.
In our opinion, the financial statements:
•
give a true and fair view of the state of the company’s affairs as at 31 December 2024 and of its loss for the year then ended;
•
have been properly prepared in accordance with UK-adopted international accounting standards; and
•
have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to the income statement in the financial statements, which indicates that the company incurred a net loss of
£21,241,287 during the year ended 31 December 2024 and incurred operating cash outflows of £2,524,076 and is not expected
to generate any revenue or positive cash inflows from operations in the 12 months from the date at which financial statements
were signed. These indicate that additional funds will need to be raised to finance the Company’s budgeted exploration and
development programme and to enable the Company to meet its other operational obligations as they fall due. These events or
conditions, along with the other matters as set forth in note 1, indicate that a material uncertainty exists that may cast
significant doubt on the company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.
In auditing the financial statements, we have concluded that the director’s use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the directors’ assessment of the company’s ability to
continue to adopt the going concern basis of accounting included:
•
We obtained and reviewed the latest cash flow forecasts for the Company which included the period of 12 months from the
date of approval of these financial statements. In doing so we challenged and corroborated management’s key assumptions
included in the cash flow forecasts. This included comparing forecast operating costs to historical cost levels and evaluating
whether the work commitments are appropriately costed and consistent with the budgeted licence work programme;
•
Discussing with management how they intend to fund the exploration and development programme necessary for the
Company to continue as a going concern, in the required timeframe and considering this in light of the Company’s previous
fundraising; and
•
Critically assessing the disclosure made within the financial statements for consistency with management’s assessment of
going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections
of this report.
Deltic Energy Plc Annual Report & Accounts 2024
22
Corporate Governance
Independent Auditor’s Report
continued
Our application of materiality
The scope of our audit was influenced by our application of materiality. The quantitative and qualitative thresholds for
materiality determine the scope of our audit and the nature, timing and extent of our audit procedures. We determined
materiality for the financial statements to be:
£ Basis
Overall materiality 44,000 (2023:434,000) 2% of Total assets (2023: 2% of net assets)
Performance materiality 30,000 (2023:303,800) 70% of materiality (70% of materiality)
Triviality 2,000 (2023: 21,700) 5% of materiality
The benchmark for materiality was selected as 2% of total assets which is a deviation fromthe prior year benchmark. The
deviation from the prior year benchmark is mainly due tosignificant decline in intangible assets during the year mainly from
Pensacola impairmentwhilst there are no changes in the Company’s liabilities. Total assets were deemed to be themost
appropriate metric for materiality given the Company's status as an oil and gasexploration company with limited liabilities.
Moreover, the expected main focus of the users ofthe financial statements is the recoverability of the assets invested in the
exploration andevaluation stage. The percentage applied to this benchmark has been selected to bring intoscope all significant
classes of transactions, account balances and disclosures consideredrelevant for the shareholders, and also to ensure that
matters that would have a significantimpact on the results during the year were appropriately considered.
We use performance materiality to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds overall materiality. Specifically, we use performance materiality in determining the nature
and extent of our testing of account balances, classes of transactions and disclosures.
We agreed with the audit committee that we would report to the committee all individual audit differences identified during
our audit in excess of £2,000 in addition to other audit misstatements below that threshold that we believe warrant reporting
on qualitative grounds.
We evaluate any uncorrected misstatements against both the quantitative measures of materiality discussed above and in light
of other relevant qualitative considerations in forming our opinion.
Our approach to the audit
Our audit is risk based and is designed to focus our efforts on the areas at greatest risk of material misstatement, aspects
subject to significant management judgement as well as greatest complexity, risk and size.
As part of designing our audit, we determined materiality, as above, and assessed the risk of material misstatement in the
financial statements. In particular, we looked at areas involving significant accounting estimates and judgement by the directors
and considered future events that are inherently uncertain. These areas of estimate and judgement included:
•
Valuation and recoverability of exploration intangible assets; and
We also addressed the risk of management override of internal controls, including among other matters consideration of
whether there was evidence of bias that represented a risk of material misstatement due to fraud.
The key audit matters and how these were addressed are outlined below.
Deltic Energy Plc Annual Report & Accounts 2024
23
Strategic Report
Corporate Governance
Financial Statements
Independent Auditor’s Report
continued
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the
financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In addition to the matter described in the Material uncertainty related to going concern section we have determined the matters
described below to be the key audit matters to be communicated in our report.
Other information
The other information comprises the information included in the annual report, other than the financial statements and our
auditor’s report thereon. The directors are responsible for the other information contained within the annual report. Our opinion
on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge
obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies
or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the
financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
As part of our audit, we have performed the following procedures:
• We critically assessed whether impairment indicators exist in line with IFRS
6 Exploration for and Evaluation of Mineral Resources, including the
following:
–
Obtaining evidence that the licences are still held by the Company
and obtained evidence of licenses that have been relinquished during
the year;
-
Reviewing the results of any exploration activities in the period as
well as impairment in relation to relinquished licenses ; and
-
Reviewing the project work programme, where available, and
evaluating any associated commitments and obligations for each
project;
-
Discussing with management their plans regarding future exploration
on the licence areas and if any further impairment is expected.
• We obtained evidence to confirm the relinquishment of licences P2252
Pensacola, P2258 Pensacola North, P2542 Syros, P2567 Cadence and
reviewed the appropriateness of the accounting entries made to intangible
assets and the impairment charge to the statement of comprehensive
income.
• We performed tests of detail on additions to intangible assets during the
year to assess the appropriateness of capitalisation under IFRS 6.
• We reviewed the disclosures in the financial statements to ensure that they
are appropriate.
Valuation and recoverability of exploration
intangible assets (note 12)
Valuation and recoverability of exploration
intangible assets
The carrying amount of intangible assets
related to explorationand evaluation assets
amounted to £1,872,629 as at 31 December
2024.
During the year, the Company relinquished the
following licences:
• P2252 Pensacola – a charge of £17,998,254
was recognised resulting from the write
down on relinquished assets following the
decision to withdraw from the agreement;
• P2258 Pensacola North – a charge of
£69,092 was recognised during the year
resulting from the write down on
relinquished assets following the decision
to relinquish;
• P2542 Syros – a charge of £395,112 was
recognised during the year resulting from
the write down on relinquished assets
following the decision to relinquish; and
• P2567 Cadence - a charge of £2,612 was
recognised during the year resulting from
the write down on relinquished assets
following the decision in the prior year to
relinquish.
Given the inherent judgement involved in the
assessment of whether there are further
indications of impairment to the carrying
amount of exploration and evaluation assets,
we considered the carrying amount of
exploration assets to be a key audit matter.
How our scope addressed this matter
Key Audit Matter
Deltic Energy Plc Annual Report & Accounts 2024
24
Corporate Governance
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the strategic report and the directors’ report for the financial year for which the financial
statements are prepared is consistent with the financial statements; and
•
the strategic report and the directors’ report have been prepared in accordance with applicable legal requirements.
Matters on which we are required to report by exception
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we
have not identified material misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
•
adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches
not visited by us; or
•
the financial statements are not in agreement with the accounting records and returns; or
•
certain disclosures of directors’ remuneration specified by law are not made; or
•
we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the
financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors
determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to
which our procedures are capable of detecting irregularities, including fraud is detailed below:
•
We obtained an understanding of the company and the sector in which it operates to identify laws and regulations that
could reasonably be expected to have a direct effect on the financial statements. We obtained our understanding in this
regard through discussions with management, and our expertise of the sector.
•
We determined the principal laws and regulations relevant to the company in this regard to be those arising from
Companies Act 2006, UK-adopted international accounting standards, the AIM Rules for Companies and the UK tax law
and regulations.
•
We designed our audit procedures to ensure the audit team considered whether there were any indications of non-
compliance by the company with those laws and regulations. These procedures included, but were not limited to:
–
conducting enquiries of management regarding potential instances of non-compliance;
–
reviewing Regulators New Service announcements;
–
reviewing legal and professional fees for evidence of any litigation or claims against the company; and
–
reviewing bord minutes and other correspondence from management.
•
We also identified the risks of material misstatement of the financial statements due to fraud. We considered, in addition to
the non-rebuttable presumption of a risk of fraud arising from management override of controls, whether key management
judgements could include management bias in relation to the valuation and recoverability of exploration intangible assets.
We addressed the recoverability of the exploration intangible assets as outlined in the Key audit matters section above.
•
As in all of our audits, we addressed the risk of fraud arising from management override of controls by performing audit
procedures which included, but were not limited to: the testing of journals; reviewing accounting estimates for evidence of
Independent Auditor’s Report
continued
Deltic Energy Plc Annual Report & Accounts 2024
25
bias; and evaluating the business rationale of any significant transactions that are unusual or outside the normal course of
business.
Because of the inherent limitations of an audit, there is a risk that we will not detect all irregularities, including those leading to a
material misstatement in the financial statements or non-compliance with regulation. This risk increases the more that
compliance with a law or regulation is removed from the events and transactions reflected in the financial statements, as we will
be less likely to become aware of instances of non-compliance. The risk is also greater regarding irregularities occurring due to
fraud rather than error, as fraud involves intentional concealment, forgery, collusion, omission or misrepresentation.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act
2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to
state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone, other than the company and the company's members as a body, for our audit work, for this
report, or for the opinions we have formed.
Daniel Hutson (Senior Statutory Auditor)
15 Westferry Circus
For and on behalf of PKF Littlejohn LLP
Canary Wharf
Statutory Auditor
London E14 4HD
30 June 2025
Strategic Report
Corporate Governance
Financial Statements
Independent Auditor’s Report
continued
Deltic Energy Plc Annual Report & Accounts 2024
Deltic Energy Plc Annual Report & Accounts 2024
26
Financial Statements
2024 2023
Continuing operations Notes £ £
Administrative expenses:
Write down on relinquished intangible assets 12 (18,465,070) (184,242)
Other administrative expenses (2,937,548) (3,035,896)
Total administrative expenses (21,402,618) (3,220,138)
Other operating income 12 108,987 -
Operating loss (21,293,631) (3,220,138)
Finance income 4 112,011 388,403
Finance costs 5 (39,935) (16,788)
Loss before tax 6 (21,221,555) (2,848,523)
Income tax expense 8 (19,732) (112,830)
Loss for the year (21,241,287) (2,961,353)
Loss per share from continuing operations
expressed in pence per share:
Basic 9 (22.82)p (3.18)p
2024 2023
£ £
Loss for the year (21,241,287) (2,961,353)
Other comprehensive income - -
Total comprehensive expense for the year attributable to the equity holders of the Company (21,241,287) (2,961,353)
Statement of Comprehensive Income
for the year ended 31 December 2024
Income Statement
for the year ended 31 December 2024
The notes on pages 30 to 48 form part of the financial statements.
Deltic Energy Plc Annual Report & Accounts 2024
27
Strategic Report
Corporate Governance
Financial Statements
2024 2023
Notes £ £
Assets
Non-current assets
Intangible assets 12 1,872,629 17,463,225
Property, plant and equipment 13 61,909 171,627
Investments in subsidiary 10 1 1
Other receivables 14 - 37,422
Total non-current assets 1,934,539 17,672,275
Current assets
Trade and other receivables 14 129,596 112,598
Cash and cash equivalents 1,444,904 5,580,259
Total current assets 1,574,500 5,692,857
Total assets 3,509,039 23,365,132
Capital and reserves attributable to the equity holders of the Company
Shareholders’ equity
Share capital 15 9,309,660 9,309,660
Share premium 33,145,477 33,145,477
Share-based payment reserve 17 2,466,461 1,999,834
Accumulated retained deficit (43,943,280) (22,716,617)
Total equity 978,318 21,738,354
Liabilities
Current liabilities
Trade and other payables 19 1,591,370 1,402,375
Current tax payable 17,151 88,775
Lease liabilities 20 22,837 124,282
Total current liabilities 1,631,358 1,615,432
Non-current liabilities
Other payables 19 899,363 -
Lease liabilities 20 - 11,346
Total non-current liabilities 899,363 11,346
Total liabilities 2,530,721 1,626,778
Total equity and liabilities 3,509,039 23,365,132
The financial statements of Deltic Energy Plc, registered number 7958581, were approved by the Board of Directors on
30 June 2025 and were signed on its behalf by:
Andrew Nunn
Chief Executive Officer
Balance Sheet
as at 31 December 2024
The notes on pages 30 to 48 form part of the financial statements.
Deltic Energy Plc Annual Report & Accounts 2024
28
Financial Statements
Share-based Accumulated
Share Share payment retained Total
capital premium reserve deficit equity
£ £ £ £ £
Balance at 1 January 2024 9,309,660 33,145,477 1,999,834 (22,716,617) 21,738,354
Comprehensive income for the year
Loss for the year - - - (21,241,287) (21,241,287)
Total comprehensive loss for the year - - - (21,241,287) (21,241,287)
Contributions by and distributions to owners
Share-based payment - - 481,251 - 481,251
Expired share options - - (14,624) 14,624 -
Total contributions by and distributions to owners - - 466,627 14,624 481,251
Balance at 31 December 2024 9,309,660 33,145,477 2,466,461 (43,943,280) 978,318
Balance at 1 January 2023 9,309,660 33,150,786 1,535,202 (19,802,953) 24,192,695
Comprehensive income for the year
Loss for the year - - - (2,961,353) (2,961,353)
Total comprehensive loss for the year - - - (2,961,353) (2,961,353)
Contributions by and distributions to owners
Issue of shares - 22 - - 22
Costs of share issue - (5,331) - - (5,331)
Share-based payment - - 512,321 - 512,321
Expired share options - - (47,689) 47,689 -
Total contributions by and distributions to owners - (5,309) 464,632 47,689 507,012
Balance at 31 December 2023 9,309,660 33,145,477 1,999,834 (22,716,617) 21,738,354
Statement of Changes in Equity
for the year ended 31 December 2024
The notes on pages 30 to 48 form part of the financial statements.
Deltic Energy Plc Annual Report & Accounts 2024
29
Strategic Report
Corporate Governance
Financial Statements
2024 2023
£ £
Cash flows from operating activities
Loss before tax (21,221,555) (2,848,523)
Finance income (112,011) (388,403)
Finance costs 39,935 16,788
Depreciation 114,095 115,099
Loss on disposal of property, plant and equipment 1,130 500
Gain on farm-in (108,987) -
Write down on relinquished intangible assets 18,465,070 184,243
Foreign exchange movement in operating loss (7,504) -
Share-based payment 481,251 512,321
(2,348,576) (2,407,975)
Decrease in other receivables 4,992 10,112
Decrease in trade and other payables (90,202) (203,603)
Tax paid (90,290) (24,055)
Net cash outflow from operating activities (2,524,076) (2,625,521)
Cash flows from investing activities
Purchase of intangible assets (2,612,843) (12,547,872)
Purchase of property, plant and equipment (12,668) (1,130)
Proceeds from licence farm-ins 1,040,581 -
Interest received 126,377 446,795
Net cash outflow from investing activities (1,458,553) (12,102,207)
Cash flows from financing activities
Proceeds from share issue - 22
Expense of share issue - (5,331)
Payment of principal portion of lease liabilities (113,587) (79,608)
Lease interest paid (8,086) (16,788)
Other interest paid (31,053) -
Net cash outflow from financing activities (152,726) (101,705)
Decrease in cash and cash equivalents (4,135,355) (14,829,433)
Cash and cash equivalents at beginning of year 5,580,259 20,409,692
Cash and cash equivalents at end of year 1,444,904 5,580,259
Cash and cash equivalents comprise the following items:
2024 2023
£ £
Cash at bank and in hand 1,444,904 580,259
Short term bank deposits - 5,000,000
1,444,904 5,580,259
Statement of Cash Flows
for the year ended 31 December 2024
The notes on pages 30 to 48 form part of the financial statements.
Deltic Energy Plc Annual Report & Accounts 2024
30
Financial Statements
1. Accounting Policies
Basis of preparation
Deltic Energy Plc is a public limited company incorporated and domiciled in the United Kingdom whose share are publicly traded.
The registered office is location at 1st Floor, 150 Waterloo Road, London, SE1 8SB. The registered company number is 07958581.
The financial statements have been prepared in accordance with UK adopted International Accounting Standards (‘IAS’)
and with those parts of the Companies Act 2006 applicable to companies reporting under International Accounting
Standards (‘IAS’).
On 24 April 2023, the Company incorporated a subsidiary, Deltic Energy One Limited, a company incorporated in England and
registered at 1st Floor 150 Waterloo Road, London, SE1 8SB. This subsidiary has been dormant from the date of incorporation.
As it is not material for the purpose of giving a true and fair view, the Company has not consolidated its subsidiary, taking
advantage of the exemption available under the Companies Act 2006 section 405, and has therefore not prepared
consolidated financial statements.
The preparation of financial statements in conformity with IAS requires management to make judgements, estimates and
assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The
estimates and associated assumptions are based on historical experience and factors that are believed to be reasonable under
the circumstance, the result of which form the basis of making judgements about carrying values of assets and liabilities that
are not readily apparent from other sources. Actual results may differ from this estimate. The areas involving a higher degree of
judgement or complexity, or where assumptions and estimates are significant to the financial statements, are disclosed later in
this note.
Operating loss is stated after charging and crediting all items excluding finance income and expenses.
The estimates and underlying assumptions are reviewed on an on-going basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised if the revision only affects that period or in the period of revision and
future periods if the revision affects both current and future periods.
Going concern
As part of the preparation of the Company’s financial statements, the Directors have considered the Company’s ability to
continue as a going concern for a period of at least 12 months from the date of approval of these financial statements.
On 30 June 2025, the boards of Rockrose Energy Limited ("Viaro Bidco") a wholly-owned subsidiary of Viaro Energy Limited
("Viaro Energy") and Deltic announced that it had reached agreement on the terms of a recommended cash offer for the entire
issued and to be issued ordinary share capital of Deltic (the "Acquisition"), intended to be implemented by way of a
court-sanctioned scheme of arrangement.
Completion of the Acquisition remains conditional on, among other things, the approval of Deltic shareholders. The Directors,
the Company’s largest shareholder and certain other shareholders have given irrevocable undertakings to vote in favour of the
Acquisition which is currently expected to complete during Q4 2025.
To support the Company’s liquidity position during the period to completion of the Acquisition, on 30 June 2025, Deltic
entered into a two-year term loan with Viaro Bidco whereby Viaro Bidco has agreed to make available to the Company funding
of £2.7 million (“Term Loan”) which will be available to be used to settle £1.3 million of current liabilities that are due to Shell and
for general corporate and working capital purposes. The Term Loan is unsecured and interest will accrue at a rate of 10 per cent.
per annum on the principal drawn down.
Viaro Bidco has also undertaken to pay, or procure the payment of, certain costs reasonably and properly incurred by Deltic in
connection with the Acquisition. The costs undertaking is capped at a maximum aggregate amount of £650,000. The
Company does not expect the costs associated with the Acquisition to be more than £650,000.
In the absence of the Acquisition proceeding, the Directors anticipate that the Company would be required to raise additional
capital in the going concern period to:
1) Settle any amount drawn down under the £2.7 million Term Loan, which may include the repayment of the £1.3 million Shell
current liabilities;
2) Continue to fund the Company’s share of the Selene work program until value can be realised from the Selene asset; and
3) Cover the Company’s general corporate operating costs.
Notes to the Financial Statements
for the year ended 31 December 2024
Deltic Energy Plc Annual Report & Accounts 2024
31
1. Accounting Policies (continued)
Against this backdrop, the Directors believe that the Acquisition represents certainty for Deltic's Shareholders in relation to the
future of the Company. The Directors also believe that, in the absence of alternative funding to the Term Loan and the
Acquisition progressing, the Company would be in an extremely challenging financial position and the Directors may have no
option but to place the Company into administration. Should administrators be appointed, it is not known how much, if any,
value would be returned to Shareholders.
These circumstances represent a material uncertainty that may cast significant doubt on the Company’s ability to continue as a
going concern. However, having regard to the availability of the Term Loan entered into on 30 June 2025 and the cost coverage
arrangements referred to above, the Directors have a reasonable expectation that the Company will have adequate resources
to continue in existence to at least the period prior to completion of the Acquisition. Accordingly, the financial statements have
been prepared on a going concern basis. The Independent Auditor’s Report to the members of Deltic Energy Plc for the year
ended 31 December 2024 refers to this material uncertainty surrounding going concern.
Adoption of new and revised International Financial Reporting Standards
The Company has adopted the following standards, amendments to standards and interpretations which are effective for the first
time this year. These have not had a material effect on the reported income or net assets of the Company.
Effective period
commencing on or after:
Amendments to IAS 1: Classification of Liabilities as Current or Non-current &
Disclosures of Accounting Policies 1 January 2024
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements 1 January 2024
Standards effective in future periods
Certain new standards, amendments and interpretations to existing standards have been published that are relevant to the
Company’s activities and are mandatory for the Company’s accounting periods commencing after 1 January 2024 or later
periods and which the Company has decided not to early adopt. These include:
Effective period
commencing on or after:
Lack of Exchangeability (Amendments to IAS 21) 1 January 2025
Amendments to the Classification and Measurement of Financial Instruments 1 January 2026
Annual Improvements to IFRS Accounting Standards—Volume 11 1 January 2026
Presentation and Disclosure in Financial Statements (IFRS 18) 1 January 2027
Management anticipates that all relevant pronouncements will be adopted in the Company's accounting policies for the first
period beginning after the effective date of the pronouncement.
There are no standards and interpretations in issue but not yet adopted that the Directors anticipate will have a material effect
on the reported income or net assets of the Company for the year ended 31 December 2024 based on current activities.
Foreign currencies
The functional currency of the Company is Sterling. Transactions denominated in currencies other than the functional currency
of the Company are recorded at the rate of exchange prevailing at the date of the transaction. Monetary assets and liabilities
are translated into the functional currency at the closing rates of exchange at the reporting date. Exchange differences arising
from the restatement of monetary assets and liabilities at the closing rate of exchange at the reporting date or from the
settlement of monetary transactions at a rate different from that at which the asset or liability was recorded are dealt with
through the Income Statement.
Exploration and evaluation assets
Pre-licence costs associated with exploring or evaluating prospects are written off as incurred to the Income Statement.
All costs associated with exploring and evaluating prospects within licence areas, including the initial acquisition of the licence
are capitalised on a project-by-project basis pending determination of the feasibility of the project. Costs incurred include
appropriate technical and administrative expenses but not general overheads. When a decision is made to proceed to
development, the related expenditures will be transferred to proven projects. Where a licence is relinquished, a project is
abandoned, or is considered to be of no further commercial value to the Company, the related costs are written off.
Strategic Report
Corporate Governance
Financial Statements
Notes to the Financial Statements
for the year ended 31 December 2024
32
Financial Statements
1. Accounting Policies (continued)
Upon farming out an exploration licence the Company, as the farmor, designates expenditure previously capitalised in respect
of the licence to the partial interest retained. Cash consideration received for the farm-out is offset against the carrying value by
the farmor, with any excess above the previously capitalised expenditure being accounted as a gain on disposal. Thereafter,
the farmor capitalises its own share of subsequent expenditure and does not recognise the share of expenditure incurred by
the farmee.
The recoverability of exploration and evaluation assets is dependent upon the discovery of economically recoverable reserves,
the ability of the Company to obtain necessary financing to complete the development of reserves and future profitable
production or proceeds from the disposition of recoverable reserves.
Intangible exploration and evaluation assets are not depreciated and are carried forward, subject to the provisions of the
Company’s impairment of exploration and evaluation policy, until the technical feasibility and commercial viability of extracting
hydrocarbons are demonstrable. Exploration and evaluation assets are reviewed regularly for indicators of impairment following the
guidance in IFRS 6 ‘Exploration for and Evaluation of Mineral Resources’ and tested for impairment where such indicators exist.
Plug, abandon and suspend and demobilisation costs, where relevant, are included within the exploration costs where the
Directors consider that these costs will be material.
Property, plant and equipment
Property, plant and equipment are stated at cost less depreciation. Depreciation is provided on a straight-line basis at rates
calculated to write off the cost less the estimated residual value of each asset over its expected useful economic life. The
residual value is the estimated amount that would currently be obtained from disposal of the asset if the asset were already
of the age and in the condition expected at the end of its useful life.
The annual rate of depreciation for each class of depreciable asset is:
Leasehold improvements over lease term
Office lease over lease term
Fixtures & fittings 15%
Computer equipment 25%
The carrying value of property plant and equipment is assessed annually and any impairment is charged to the income
statement.
Impairment of exploration assets
Exploration and evaluation assets are reviewed regularly for indicators of impairment following the guidance in IFRS 6
‘Exploration for and Evaluation of Mineral Resources’ and tested for impairment where such indicators exist.
In accordance with IFRS 6 the Company considers the following facts and circumstances in their assessment of whether the
Company’s exploration and evaluation assets may be impaired:
•
Whether the period for which the Company has the right to explore in a specific area has expired during the period or will
expire in the near future, and is not expected to be renewed;
•
Whether substantive expenditure on further exploration for and evaluation of mineral resources in a specific area is neither
budgeted nor planned;
•
Whether exploration for and evaluation of reserves in a specific area have not led to the discovery of commercially viable
quantities of mineable material and the Company has decided to discontinue such activities in the specific area; and
•
Whether sufficient data exists to indicate that although a development in a specific area is likely to proceed, the carrying
amount of the exploration and evaluation assets is unlikely to be recovered in full, from successful development or by sale.
If any such facts or circumstances are noted, the Company, as a next step, perform an impairment test in accordance with the
provisions of IAS 36. In such circumstances the aggregate carrying value of the exploration and evaluation asset is compared
against the expected recoverable amount of the cash-generating unit. The recoverable amount is the higher of value in use and
the fair value less costs to sell. The Company assesses each licence as a separate cash-generating unit. In accordance with the
provisions of IFRS 6 the level identified for the purposes of assessing the Company’s exploration and evaluation assets for
impairment may comprise one or more cash-generating units.
Any impairment arising is recognised in the Income Statement for the year.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
33
Strategic Report
Corporate Governance
Financial Statements
1. Accounting Policies (continued)
Taxation
Income tax expense represents the sum of the tax currently payable and deferred tax.
The tax currently payable is based on taxable result for the year. Taxable profit differs from profit as reported in the Income
Statement 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. The Company’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the reporting date.
Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial statements and
the corresponding tax bases used in the computation of taxable profit, and are accounted for using the balance sheet liability
method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences
can be utilised.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer
probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled, or the asset
realised. Deferred tax is charged or credited to the income statement, except when it relates to items charged or credited
directly to equity, in which case the deferred tax is also dealt with in equity.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current
tax liabilities and when they relate to income taxes levied by the same taxation authority and the Company intends to settle its
current tax assets and liabilities on a net basis.
Cash and cash equivalents
Cash comprises cash on hand and demand deposits with banks.
Cash equivalents comprise bank deposits held for the purpose of meeting short term cash commitments that are subject to an
insignificant risk of changes in value and are readily convertible into known amounts of cash, subject to a notice period up to a
maximum of 95 days.
Financial instruments
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Company becomes a party to the contractual provisions of the
financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the
financial asset and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at the transaction
price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where
applicable).
Financial assets are classified into the following categories:
•
amortised cost
•
fair value through profit or loss (FVTPL)
•
fair value through other comprehensive income (FVOCI).
In the periods presented the Company does not have any financial assets categorised as FVTPL or FVOCI.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
34
Financial Statements
1. Accounting Policies (continued)
The classification is determined by both:
•
the entity’s business model for managing the financial asset
•
the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within finance costs,
finance income or other financial items.
Subsequent measurement of financial assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions:
•
they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows
•
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the
principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted
where the effect of discounting is immaterial. The Company’s cash and cash equivalents, trade and other receivables fall into
this category of financial instruments.
The Company assesses the expected credit losses on a forward-looking basis, defined as the difference between the
contractual cash flows and the cash flows that are expected to be received, associated with its assets carried at amortised cost.
The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade
receivables only, the simplified approach permitted by IFRS 9 is applied, which requires expected lifetime losses to be
recognised from initial recognition of the receivables. Losses are recognised in the income statement. When a subsequent event
causes the amount of impairment to decrease, the decrease in impairment is reversed through the income statement.
Classification and measurement of financial liabilities
The Company’s financial liabilities include trade and other payables.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method.
All interest-related charges are included within finance costs or finance income.
Joint Operations
The Company is party to joint oil and gas licences which are unincorporated joint arrangements. There is a contractual
agreement that sets out the terms of the relationship over the relevant activities of the Company and at least one other party.
The Company has a legal degree of control over these joint operating arrangements through Joint Operating Agreements.
The Company classifies its interests in joint arrangements as Joint Operations: where the Company has both the rights to assets
and obligations for the liabilities of the joint arrangement.
The Company accounts for its share of assets, liabilities, income and expenditure of Joint Operations in which it holds an
interest, classified in the appropriate Balance Sheet and Income Statement headings.
A list of the Company’s interests in Joint Operations is given in note 11.
Leases
The Company assesses whether a contract is or contains a lease, at inception of the contract.
Leases with an original term not exceeding 12 months and low value leased items continue to be accounted as previously, with
amounts payable being charged to the Income Statement on a straight-line basis over the lease term.
The Company recognises a right-of-use asset and a corresponding lease liability with respect to all other lease arrangements in
which it is the lessee. The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee
uses its incremental borrowing rate.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
35
Strategic Report
Corporate Governance
Financial Statements
1. Accounting Policies (continued)
The lease liability is presented as a separate line in the Balance Sheet.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the
effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
•
The lease term has changed in which case the lease liability is remeasured by discounting the revised lease payments using
a revised discount rate.
•
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed
residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an
unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a
revised discount rate is used).
•
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease
liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a
revised discount rate at the effective date of the modification.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before
the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost
less accumulated depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter of the lease term and useful life of the underlying asset.
The depreciation starts at the commencement date of the lease.
Provisions
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is
probable that the Company will be required to settle the obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is
measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash
flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a
receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable
can be measured reliably.
Decommissioning Obligation
A decommissioning (or “asset retirement”) obligation provision for plugging, abandonment and reclamation costs has been
included within the exploration assets and within liabilities based on management’s assessment of asset retirement costs that
will be incurred. Where the effect is material, the estimated current date cash flows are adjusted for inflation and are discounted
at a risk-free rate. The cash flows used in the provision are risk adjusted.
Estimates of provisions for future decommissioning and restoration costs are recognised and based on current legal and
constructive requirements, technology and price levels. Because actual cash outflows can differ from estimates due to changes
in laws, regulations, public expectations, technology, prices and conditions, the carrying amounts of provisions are regularly
reviewed and adjusted to take account of such changes. The Company expects to incur the costs within one year hence the
estimated amount is not discounted.
Share-based payments
Equity-settled share-based payments to employees and Directors are measured at the fair value of the equity instrument. The
fair value of the equity-settled transactions with employees and Directors is recognised as an expense over the vesting period.
The fair value of the equity instruments is determined at the date of grant, taking into account market-based vesting conditions
and non-vesting conditions. The fair value of goods and services received is measured by reference to the fair value of options.
The fair values of share options are measured using an appropriate valuation methodology. The expected life used in the
models is adjusted, based on management’s best estimate of the effects of non-transferability, exercise restrictions and
behavioural considerations.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
36
Financial Statements
1. Accounting Policies (continued)
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which
the performance and/or service conditions are fulfilled, ending on the date on which the relevant employees (or other
beneficiaries) become fully entitled to the award (“the vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the
extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments that will
ultimately vest.
The Income Statement charge or credit for a period represents the movement in cumulative expense recognised as at the
beginning and end of that period.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market
condition or non-vesting condition, which are treated as vesting irrespective of whether or not the market or non-vesting
condition is satisfied, provided that all other performance and/or service conditions are satisfied. Where the terms of an
equity-settled award are modified, the minimum expense recognised is the expense as if the terms had not been modified.
An additional expense is recognised for any modification, which increases the total fair value of the share-based payment
arrangement or is otherwise beneficial to the employee, as measured at the date of modification.
Where an equity-settled award (share options) is cancelled, it is treated as if it had vested on the date of cancellation if it had
not yet fully vested, and any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and
new awards are treated as if they were a modification of the original award, as described in the previous paragraph.
Where an equity-settled award is forfeited, the cumulative charge expensed up to the date of forfeiture is credited to the
Income Statement. Upon expiry of an equity-settled award, the cumulative charge expensed is transferred from the
Share-based payment reserve to the Accumulated retained deficit.
Equity
Financial instruments issued by the Company are treated as equity only to the extent that they do not meet the definition of a
financial liability. The Company’s ordinary shares are classified as equity instruments.
For the purposes of the capital management disclosures given in note 18, the Company considers its capital to be total equity.
Critical accounting estimates and judgements
The Company makes estimates and assumptions concerning the future, which by definition will seldom result in actual results
that match the accounting estimate. The estimates and assumptions that have a significant risk of causing a material
adjustment to the carrying amount of assets and liabilities within the next financial year are discussed below.
Judgements
Impairment of exploration and evaluation assets (note 12)
Qualifying exploration and evaluation costs are initially classified and held as intangible assets rather than being expensed. In
recording costs as exploration and evaluation assets, judgement is required as to the extent to which the costs are attributable to
the discovery of specific hydrocarbon resources and include both internal and external costs. Expenditure is capitalised by
reference to appropriate Cash Generating Unit (‘CGU’) and is assessed for impairment with reference to IFRS 6 indicators of
impairment. This assessment involves judgement as to the status of licences and the likelihood of renewal of licences which
expire in the near future including the ability to meet licence obligations, budgets and plans for future exploration activity and
expenditure, the results of exploration activity, and assessments of future recoverable values upon development.
Where impairment indicators are identified, an impairment test is performed which requires judgment regarding factors such as:
(i)
The timing of future development of the asset;
(ii) Funding structures and financing costs of development;
(iii) Commercial development opportunities for extracting value from the asset; and
(iv) Modelling inputs such as the appropriateness of discount rates, reserve and resource estimates, oil and gas pricing
predictions, etc.
The carrying value of exploration and evaluation assets were assessed for indicators of impairment at 31 December 2024.
In forming this assessment, the Company considered external competent person’s reports, the status of the licences, the extent
of ongoing exploration activity and steps to secure farm-in partners and other financing which supported the carrying value.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
37
1. Accounting Policies (continued)
As detailed in note 12, a charge of £18,465,070 was recognised during the year resulting from the write down on relinquished
intangible assets following the decision to withdraw from P2252 (Pensacola) and relinquish P2558 (Pensacola North) and
P2542 (Syros). In the prior year, an impairment of £163,115 was recognised resulting from the impairment of P2428 (Cupertino)
following decision not to renew the licence in 2024. Also, in the prior year, a charge of £21,127 was recognised resulting from the
write down on relinquished intangible assets following the decision to relinquish P2567 (Cadence).
The carrying amount of exploration and evaluation assets at the end of the period is shown in note 12.
Estimates
Determination of share-based payment costs (note 17)
The determination of these costs is based on financial models. The inputs to these models are based on the Directors’
judgements and estimates and are not capable of being determined with precision. Estimates were required including the
expected life of the option and volatility.
Management concluded that the vesting criteria would be met, and the most likely outcome for the share options issued during
2021 was that the share price vesting criteria would be met within three years for 2,025,000 share options issued during the
year as detailed in note 17. In reaching this conclusion management considered factors including the historical share price
performance, their assessment of possible developments with respect to licences, in particular Licence P2437 and Licence
P2252 following the farm-outs to Shell.
2. Segmental Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker. The chief operating decision maker, who is responsible for allocating resources, assessing the performance of the
operating segment and making strategic decision, has been identified as the Board of Directors.
The Board of Directors consider that the Company has only one operating segment at corporate level, therefore no additional
segmental information is presented.
3. Employees
2024 2023
£ £
Wages and salaries 1,254,567 1,369,296
Short-term non-monetary benefits 34,847 33,895
Defined contribution pension costs 105,552 98,112
Social security costs 158,831 176,303
Share-based payment expense 481,251 512,321
2,035,048 2,189,927
2024 2023
The average monthly number of employees during the year was as follows:
Directors 5 5
Staff 4 4
9 9
Strategic Report
Corporate Governance
Financial Statements
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
38
Financial Statements
3. Employees (continued)
Key management personnel remuneration
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the Company.
2024 2023
£ £
Salaries and bonuses 963,106 1,045,161
Short-term non-monetary benefits 27,760 26,958
Defined contribution pension costs 78,874 75,987
Social security costs 133,993 140,420
Share-based payment expense 371,304 390,876
1,575,037 1,679,402
Directors’ remuneration is disclosed in the Directors’ Report on page 18, including the remuneration of the highest-paid director.
Details regarding share options are set out in note 17 to the financial statements.
4. Finance Income
2024 2023
£ £
Bank interest 112,011 388,403
5. Finance Costs
2024 2023
£ £
Effective interest expense on lease liabilities (see note 20) 8,882 16,788
Interest on non-current other payable 31,053 -
39,935 16,788
6. Loss before Tax
2024 2023
£ £
The loss before tax is stated after charging:
Write down on relinquished intangible assets (see note 12) 18,465,070 21,127
Impairment of intangible assets (see note 12) - 163,115
Depreciation – owned assets 33,165 34,168
Depreciation – right of use leased assets (office lease) 80,931 80,931
7. Auditors’ Remuneration
2024 2023
£ £
Fees payable to the Company’s auditors for the audit of the Company’s financial statements 42,000 40,000
Fees payable to the Company’s auditors for non-audit related services 1,650 2,100
Fees payable to the Company’s auditors for other audit-related services - -
8. Income Tax
Analysis of income tax expense
2024 2023
£ £
Current tax 17,704 89,326
Current tax – prior year 2,028 23,504
Income tax expense 19,732 112,830
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
39
8. Income Tax (continued)
Factors affecting the income tax expense
The tax assessed for the year is different to the standard rate of corporation tax in the UK as explained below:
2024 2023
£ £
Loss on ordinary activities before taxation (21,221,555) (2,848,523)
Loss on ordinary activities multiplied by the standard rate of corporation tax in the UK (25%) (5,305,389) (669,973)
Effects of:
Current tax – prior year 2,028 23,504
Capital allowances in excess of depreciation - -
Expenses not deductible for tax purposes 5,325,629 759,299
Margin relief (2,536) -
Unrelieved losses carried forward - -
Income tax expense 19,732 112,830
As at 31 December 2024, the Company has pre-trading expenditure of £59,754,356 (2023: £49,182,130).
9. Loss per Share
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number of
ordinary shares outstanding during the year.
Due to the losses incurred during the year, a diluted loss per share has not been calculated as this would serve to reduce the
basic loss per share. There were 9,506,560 (2023: 10,066,560) share options outstanding at the end of the year that could
potentially dilute basic earnings per share in the future.
Basic and diluted loss per share
2024 2023
Loss per share from continuing operations (22.82)p (3.18)p
The loss and weighted average number of ordinary shares used in the calculation of loss per share are as follows:
2024 2023
£ £
Loss used in the calculation of total basic loss per share (21,241,287) (2,961,353)
Number of shares 2024 2023
Number Number
Weighted average number of ordinary shares for the purposes of basic loss per share 93,096,600 93,096,600
10. Investments in Subsidiary
Shares in Group
undertakings
£
Cost
Brought forward 1
Additions -
At end of year 1
Strategic Report
Corporate Governance
Financial Statements
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
40
Financial Statements
10. Investments in Subsidiary (continued)
The Company has one directly held subsidiary that was incorporated during the year:
Registered Office Class of shares Holding
Deltic Energy One Limited 1st Floor 150 Waterloo Road, London, SE1 8SB Ordinary 100%
This subsidiary has been dormant from the date of incorporation. As it is not material for the purpose of giving a true and fair
view, the Company has not consolidated its subsidiary, taking advantage of the exemption available under the Companies
Act 2006 section 405.
11. Joint Operations
The Company has entered into the following unincorporated Joint Operations, which are included within the Company’s
financial statements:
Name of Project Principal Activities Company Interest
P2437 Selene Oil and gas exploration 25%*
P2672 Blackadder Oil and gas exploration 100%
P2646 Dewar Oil and gas exploration 100%
* As disclosed in note 12, on 2 April 2024, Deltic farmed -out a 25% interest in Licence P2437, containing the Selene licence, to Dana Petroleum (E&P) Limited
On 31 March 2024, the Company relinquished Licence P2428 (Cupertino).
On 3 October 2024, the Company formally withdrew from the Pensacola licence (P2252)
On 30 November 2024, the Company relinquished the Pensacola North Licence (P2558) and 30 November 2024 the Syros
(P2542) licence expired.
At the reporting date there were no contingent liabilities in respect of any of the Joint Operations other than those disclosed in
these financial statements in note 21. A Joint Operations contingent asset is disclosed in note 24.
12. Intangible Assets
Exploration &
evaluation Software
assets licences Total
£ £ £
Cost
At 1 January 2023 9,769,477 39,257 9,808,734
Additions 7,877,990 - 7,877,990
Write down on relinquished assets (21,127) - (21,127)
At 31 December 2023 17,626,340 39,257 17,665,597
Additions 3,797,407 - 3,797,407
Farm-out of licence (922,933) - (922,933)
Write down on relinquished assets (18,465,070) - (18,465,070)
At 31 December 2024 2,035,744 39,257 2,075,001
Amortisation and impairment
At 1 January 2023 - 39,257 39,257
Impairment charge 163,115 - 163,115
At 31 December 2023 163,115 39,257 202,372
Impairment charge - - -
At 31 December 2024 163,115 39,257 202,372
Net Book Value
At 31 December 2024 1,872,629 - 1,872,629
At 31 December 2023 17,463,225 - 17,463,225
At 31 December 2022 9,769,477 - 9,769,477
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
41
Strategic Report
Corporate Governance
Financial Statements
12. Intangible Assets (continued)
The net book value of exploration and evaluation assets at 31 December 2024 and 2023 relates solely to the Company’s
North Sea Licences.
Additions of £3,797,407 (2023: £7,877,990) differ to the cash flows in the Statement of Cash Flows owing to an increase in
trade and other payables of £1,184,564 (2023: £3,388,882 decrease) and a decrease in provisions of £nil (2023: £1,281,000)
relating to the plug and abandonment of the Pensacola exploration well that was completed in February 2023.
Aggregate cash proceeds arising from the farm-out of the Selence licence to Dana during the period amounted to £1,040,581,
including a foreign exchange gain of £8,661. An amount of £922,933 was deducted from exploration and evaluation assets,
being the previously capitalised amount relating to the licence. The surplus of the proceeds over the carrying value amount to
£108,987 and was recognised as a gain on disposal of the partial interest and included as other operating income in the Income
Statement for the period.
A charge of £17,998,254 was recognised during the year (2023: nil) resulting from the write down on relinquished assets
following the decision to withdraw from P2252 (Pensacola).
A charge of £69,092 was recognised during the year (2023: nil) resulting from the write down on relinquished assets following
the decision to relinquish P2558 (Pensacola North).
A charge of £395,112 was recognised during the year (2023: nil) resulting from the write down on relinquished assets following
the decision to relinquish P2542 (Syros).
A charge of £2,612 was recognised during the year (2023: £21,127) resulting from the write down on relinquished assets
following the decision in the prior year to relinquish from P2567 (Cadence).
In the prior year, an impairment charge of £163,115 was recognised resulting from the impairment of P2428 (Cupertino)
following the decision not to renew the licence in 2024.
13. Property, Plant and Equipment
Leasehold Office Fixtures Computer
improvements lease and fittings equipment Total
£ £ £ £ £
Cost
At 1 January 2023
91,700
404,650
45,800
40,311
582,461
Additions
-
-
-
7,680
7,680
Disposals
-
-
(544)
(4,560)
(5,104)
At 31 December 2023
91,700
404,650
45,256
43,431
585,037
Additions
-
-
-
5,508
5,508
Disposals
-
-
(1,786)
(2,021)
(3,807)
At 31 December 2024
91,700
404,650
43,470
46,918
586,738
Depreciation
At 1 January 2023
44,828
215,813
16,628
25,647
302,916
Charge for year
19,314
80,931
6,870
7,984
115,099
Disposals
-
-
(336)
(4,269)
(4,605)
At 31 December 2023
64,142
296,744
23,162
29,362
413,410
Charge for year
19,367
80,931
6,825
6,973
114,096
Disposals
-
-
(1,096)
(1,581)
(2,677)
At 31 December 2024
83,509
377,675
28,891
34,754
524,829
Net Book Value
At 31 December 2024
8,191
26,975
14,579
12,164
61,909
At 31 December 2023
27,558
107,906
22,094
14,069
171,627
At 1 January 2023
46,872
188,837
29,172
14,664
279,545
The office lease category reflects a right of use asset relating to the office premises occupied by the Company.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
42
Financial Statements
14. Trade and Other Receivables
2024 2023
£ £
Current:
Other receivables 2,362 15,433
Other tax receivables 11,109 14,297
Rental deposit 37,422 -
Prepayments 78,703 82,868
129,596 112,598
Non-current:
Rental deposit - 37,422
Total receivables 129,596 150,020
During the year, no impairments were recognised.
The Directors consider that the carrying amount of trade and other receivables approximates to their fair value.
15. Share Capital
Allotted, issued and fully paid
Year ended December 2024 Number £
At beginning of the year Ordinary shares of 10 pence each 93,096,600 9,309,660
At end of the year Ordinary shares of 10 pence each 93,096,600 9,309,660
Year ended December 2023 Number £
At beginning of the year Ordinary shares of 0.5 pence each 1,861,931,992 9,309,660
Effect of share consolidation (1,768,835,392) -
At end of the year Ordinary shares of 10 pence each 93,096,600 9,309,660
On 25 May 2023, the Company undertook a Share Consolidation. The Share Consolidation consisted of a consolidation of the
existing ordinary shares of 0.5 pence each in the capital of the Company ("Existing Ordinary Shares"), such that every
20 Existing Ordinary Shares were consolidated into one new ordinary share of 10p each ("New Ordinary Shares"). Following the
Share Consolidation, the Company has a single class of ordinary shares of 10p each in issue, being the New Ordinary Shares.
16. Reserves
Reserves Description and purpose
Share capital Nominal value of shares issued.
Share premium Amount subscribed for share capital in excess of nominal value.
Share-based payment reserve Fair value of share options issued.
Accumulated retained deficit Cumulative net losses recognised in the statement of comprehensive income.
Details of movements in each reserve are set out in the Statement of Changes in Equity on page 28.
17. Share-Based Payments
The Company share options are equity-share-based payments as defined in IFRS 2. This standard requires that a recognised
valuation methodology be employed to determine the fair value of share options granted. The total share-based payment
charge for the year has been derived through applying the Black Scholes model.
Share options
The Company’s Share Option Plan pursuant to which options over ordinary Shares may be granted to Directors and employees
of the Company, commenced on 4 May 2012. On 30 June 2014, an Enterprise Management Incentives Plan (EMI Plan) was
adopted and options held by employees under the Share Option Plan became governed by the EMI Plan at that date.
Any employed Director or employee of the Company is eligible to receive grants under the EMI Plan. Non-executive Directors
are not eligible to receive grants. Options are non-transferable except in the case of an option holder’s death, in which case the
outstanding options may be exercised by the personal representatives of the option holder.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
43
Strategic Report
Corporate Governance
Financial Statements
17. Share-Based Payments (continued)
The maximum number of ordinary Shares in respect of which options can be granted under the EMI Plan is 20 per cent. of the
Company’s issued ordinary share capital, including all awards made over the 10 years preceding the date of the grant. This limit
also includes any rights granted under any other employee share incentive arrangements operated by the Company but
excludes rights that: (i) have lapsed, been forfeited or released; (ii) will be met by the transfer of shares already in issue; or
(iii) are granted to replace an award over shares in a Company acquired by the Company.
The Board of Directors has absolute discretion to grant options, subject to any time vesting or performance conditions that it
outlines. The grant of options will be evidenced by an option agreement.
No options were granted during the year to 31 December 2024 under the scheme (2023: 2,025,000) and 560,000 options
expired (2023: 100,000).
No share options were exercised during the current or prior year.
The Company recognised a total share-based payment expense of £481,251 for the year ended 31 December 2024 (2023:
£512,321) in respect of share options.
The inputs to the Black-Scholes model for options issued in the prior year were as follows:
Black Scholes Model 24 August 2023
Share Price 28.25p
Exercise price 28.25p
Expected Volatility 87.09%
Risk Free Rate of Interest 4.4794%
Expected Dividend Yield 0.00%
Expected Life 5.5-6.5 years
Number of options issued 2,025,000
Under the terms of the options granted during the prior year, 674,999 options will vest one year after the grant date. A further
674,999 options will vest 2 years after the grant date. The remaining 675,002 options will vest 3 years after the grant date.
The fair value includes the effect of this vesting condition. Management determined that the above options would be most
likely to vest at the earliest possible dates, being one to three years for the options granted during the prior year. The fair value
of the options is therefore being amortised over those time periods.
Expected volatility was determined based on the historic volatility of the Company.
Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:
Number of WAEP
Year ended December 2024 Options (pence)
Outstanding at the beginning of the year 10,066,560 41.90
Expired (560,000) 75.70
Outstanding at the end of the year 9,506,560 39.91
Number exercisable at 31 December 2024 7,106,882 37.39
Number of WAEP
Year ended December 2023 Options* (pence)*
Outstanding at the beginning of the year 8,141,560 44.80
Issued 2,025,000 28.25
(100,000) 1.60
Outstanding at the end of the year 10,066,560 41.90
Number exercisable at 31 December 2023 2,942,500 38.63
The weighted average remaining contractual life of options outstanding as at 31 December 2024 was 4.9 years (2023: 6.4 years).
The range of exercise prices relating to options outstanding at 31 December 2024 was 28.3p to 80.0p (2023: 28.3p to 116.4p)
* Following the Share Consolidation on 25 May 2023, the number and price of share options have been retroactively adjusted for all periods presented to illustrate the
effect of the 20 for 1 Share Consolidation.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
44
Financial Statements
18. Capital Management
The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, to
provide returns for shareholders and to maintain an optimal capital structure to manage the cost of capital effectively. The
Company defines capital as being share capital plus reserves. The Board of Directors monitor the level of capital as compared
to the Company’s commitments and, where necessary, adjusts the level of capital as is determined to be necessary by issuing
new shares.
In light of the Company’s requirement to access additional capital during July 2025, the Deltic Board has explored the potential
options to fund the business until first revenues on Selene could potentially be achieved, including assessing the possibility of an
equity fundraise. However, given the difficult market conditions referred to above and having discussed with the Company’s
largest shareholder and previously with other potential existing and new investors their appetite to provide further funding, the
Deltic Directors do not have confidence in the Company’s ability to raise sufficient funds through an issue of equity. The Deltic
Directors also believe that, given the stage of Deltic’s investments, providers of debt finance would be unwilling to provide the
required debt facilities to the Company.
Against this backdrop, the Company Directors believe that the Acquisition represents certainty for Deltic Shareholders in relation
to the future of the Company. The Deltic Directors also believe that, in the absence of alternative funding to the Term Loan and
the Acquisition progressing, the Company would be in an extremely challenging financial position and the Deltic Directors may
have no option but to place the Company into administration. Should administrators be appointed, it is not known how much, if
any, value would be returned to Shareholders.
These circumstances represent a material uncertainty that may cast significant doubt on the Company’s ability to continue as a
going concern. However, having regard to the availability of the Term Loan and the Cost Coverage Agreement the Directors
have a reasonable expectation that the Company will have adequate resources to continue in existence to at least the period
prior to completion of the Acquisition. Accordingly, the financial statements have been prepared on a going concern basis. The
Independent Auditor’s Report to the members of Deltic Energy Plc for the year ended 31 December 2024 refers to this material
uncertainty surrounding going concern.
The Company is subject to an externally imposed capital requirement of maintaining a minimum of £50,000 authorised share
capital, which it has met in both reporting periods presented.
19. Trade and Other Payables
2024 2023
£ £
Current
Trade payables 77,543 132,062
Social security and other taxes 78,072 181,322
Joint operations payable 24,701 444,404
Other payables and accruals 1,411,054 644,587
1,591,370 1,402,375
The Directors consider that the carrying amounts of trade and other payables approximate to their fair value.
Joint operations payable represents £24,701 (2023: £444,404) relating to exploration assets.
2024 2023
£ £
Non-current
Other payables 899,363 -
899,363 -
Under a deferred repayment agreement agreed with the Pensacola JV, Deltic have a 24 month period, from September 2024,
to repay £0.9 million due to the JV. The deferred payment terms include a non-compounding interest of Bank of England Base
Rate plus 8%, repayable quarterly in arrears commencing in December 2024.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
45
Strategic Report
Corporate Governance
Financial Statements
20. Lease Arrangements
Right of use assets
The Company uses leasing arrangements for its office for which a right of use asset is included in property, plant and equipment.
When a lease begins, a liability and right of use asset are recognised based on the present value of future lease payments.
The movements in the right of use asset are presented under the office lease category in note 13.
Lease liabilities
2024 2023
£ £
Amounts payable at 1 January 135,628 215,236
Effective interest expense 8,882 16,788
Lease payments (121,673) (96,396)
Total lease liabilities 22,837 135,628
Amounts payable within one year at 31 December 22,837 124,282
Amounts payable after year at 31 December - 11,346
21. Provisions
Asset retirement obligation
2024 2023
£ £
At 1 January - 1,281,000
Utilised - (1,281,000)
Additions - -
At 31 December - -
An asset retirement obligation provision was recognised in the prior year in relation to the costs to be incurred in early 2023.
The asset retirement obligation was fulfilled and completed during 2023. Due to the short term nature of the expenditure, the
provision was not discounted.
22. Financial Instruments
Principal financial instruments
The principal financial instruments used by the Company from which the financial risk arises are as follows:
2024 2023
£ £
Financial assets
Cash and cash equivalents – all amounts held in Sterling:
Cash at bank 1,444,904 5,580,259
1,444,904 5,580,259
Rental deposit 37,422 37,422
Other receivables 2,362 15,433
1,484,688 5,633,114
Financial liabilities
Trade payables 77,543 132,062
Other payables & accruals 2,335,118 1,088,991
Lease liabilities1 22,837 135,628
2,435,498 1,356,681
1 The 2024 lease liability is payable within one year.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
46
Financial Statements
22. Financial Instruments (continued)
General objectives and policies
The overall objective of the Board is to set policies that seek to reduce as far as practical without unduly affecting the
Company’s competitiveness and flexibility. Further details regarding these policies are:
Policy on financial risk management
The Company’s principal financial instruments comprise cash and cash equivalents, other receivables, trade and other payables.
The Company’s accounting policies and methods adopted, including the criteria for recognition, the basis on which income and
expenses are recognised in respect of each class of financial asset, financial liability and equity instrument are set out in note 1 –
“Accounting Policies”.
The Company does not use financial instruments for speculative purposes. The carrying value of all financial assets and
liabilities approximates to their fair value.
Derivatives, financial instruments and risk management
The Company does not use derivative instruments or other financial instruments to manage its exposure to fluctuations in
foreign currency exchange rates, interest rates and commodity prices.
Foreign currency risk management
The Company has very limited transactional currency exposures as all projects currently undertaken are based in the UK.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Company. The Company has adopted a policy of only dealing with creditworthy counterparties. The Company’s exposure and
the credit ratings of its counterparties are monitored by the Board of Directors to ensure that the aggregate value of
transactions is spread amongst approved counterparties.
The Company applies IFRS 9 to measure expected credit losses for receivables, these are regularly monitored and assessed.
Receivables are subject to an expected credit loss provision when it is probable that amounts outstanding are not recoverable
as set out in the accounting policy. The impact of expected credit losses was immaterial.
The Company’s principal financial assets are cash and cash equivalents and other receivables. Cash and cash equivalents
include amounts held on deposit with financial institutions, including deposits subject to notice periods of no more than
95 days.
The credit risk on liquid funds held in current accounts available on demand and notice account deposits is limited because the
Company’s counterparties are banks with high credit-ratings assigned by international credit-rating agencies.
No financial assets have indicators of impairment.
The Company’s maximum exposure to credit risk is limited to the carrying amount of financial assets recorded in the financial
statements.
Borrowings and interest rate risk
The Company currently has no borrowings.
The Company’s principal financial assets are cash and cash equivalents and other receivables. Cash equivalents include
amounts held on deposit with financial institutions. The effect of variable interest rates is not considered to be significant.
Liquidity risk
During the year ended 31 December 2024, the Company was financed by cash raised through equity funding in October 2022
and the farm-out of exploration licences. Funds raised surplus to immediate requirements are held as short-term cash deposits
in Sterling.
The maturities of the cash deposits are selected to maximise the investment return whilst ensuring that funds will be available
as required to maintain the Company’s operations.
In managing liquidity risk, the main objective of the Company is to ensure that it has the ability to pay all of its liabilities as they
fall due. The Company monitors its levels of working capital to ensure that it can meet its liabilities as they fall due.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
47
Strategic Report
Corporate Governance
Financial Statements
22. Financial Instruments (continued)
The table below shows the undiscounted cash flows on the Company’s financial liabilities as at 31 December 2024 and
31 December 2023 on the basis of their earliest possible contractual maturity.
Within 2 Within 2 – 6 Within 6 – 12 Within 1 – 2 Within 2 – 5
Total months months months years years
£ £ £ £ £ £
At 31 December 2024
Trade payables 77,543 77,543 - - - -
Other payables & accruals 2,335,118 - 1,292,183 57,806 985,129 -
Lease liabilities 22,837 - 22,837 - - -
2,435,498 77,543 1,315,020 57,806 985,129 -
At 31 December 2023
Trade payables 132,062 132,062 - - - -
Other payables & accruals 1,088,991 - 1,088,991 - - -
Lease liabilities 133,463 - 61,353 60,490 11,620 -
1,354,516 132,062 1,150,344 60,490 11,620 -
23. Capital Commitments
At the reporting date there were no capital commitments. In the prior year, there were £2.2 million relating to the Pensacola
exploration site survey planned for 2024, and Selene exploration drilling long leads commitments ahead of 2024 drilling
operations.
24. Contingent asset
Under the Company’s farm-in agreement with Dana, a success case payment of USD$1 million is due to the Company
18 months following the date on which the Selene well completion occurred, the payment only being contingent on Dana
retaining an equity position in licence P2437 until the end of this 18 month period. Deltic considers it highly probable that Dana
will remain on licence P2437 beyond the 18 month period, and therefore the USD$1 million will become payable to the Company
on 10 May 2026.
25. Related Party Disclosures
Parties are considered to be related if one party is under common control or can exercise significant influence over the other
party in making financial and operational decisions. In considering each possible related party relationship, attention is directed
to the substance of the relationship, not merely the legal form.
Key management personnel are considered to be the Directors of the Company and Persons Discharging Managerial
Responsibility. Disclosure regarding remuneration of key management is provided in note 3.
On 26 February 2024, Peter Cowley, a Non-Executive Director of the Company, sold and purchased 50,924 ordinary shares of
10p each ("Ordinary Shares") in the Company as part of a ‘Bed & ISA’ arrangement. There was no change to the number of
Ordinary Shares beneficially held by Peter Cowley as a result of these transaction.
In the prior year and prior to the share consolidation on 25 May 2023, Peter Nicol, a Non-Executive Director of the Company,
acquired 1,000,000 ordinary shares of 0.5 pence per share on 15 February 2023 via a market purchase at a price of 2.60 pence
per share, which represented an amount of £26,000.00. Additional, Peter Nicol acquired a further 1,000,000 ordinary shares of
0.5 pence per share on 4 May 2023 via a market purchase at a price of 1.79 pence per share, which represented an amount of
£17,900.00.
26. Control
The Company is not controlled by any other party.
Deltic Energy Plc Annual Report & Accounts 2024
Notes to the Financial Statements
for the year ended 31 December 2024
48
Financial Statements
27. Subsequent Events
On 4 April 2025, the Company entered into a new five year office lease for its current registered office. The lease is a five year
lease commencing on 28 April 2025, with a two year break clause on 28 April 2027. Annual rent of £137,214 is payable quarterly
in advance.
On 30 June 2025, the boards of Rockrose Energy Limited ("Viaro Bidco") a wholly-owned subsidiary of Viaro Energy Limited
("Viaro Energy") and Deltic announced that they had reached agreement on the terms of a recommended cash offer for the
entire issued and to be issued ordinary share capital of Deltic (the "Acquisition"), intended to be implemented by way of a
court-sanctioned scheme of arrangement.
To support the Company’s liquidity position during the period to completion of the Acquisition, on 30 June 2025, Deltic has
entered into a two-year term loan with Viaro Bidco where by Viaro Bidco has agreed to make available to the Company funding
of £2.7 million (“Term Loan”) which will be available to be used to settle £1.3 million of current liabilities that are due to Shell and
for general corporate and working capital purposes. The Term Loan is unsecured and interest will accrue at a rate of 10 per cent.
per annum on the principal draw down.
On 30 June 2025, the Company entered into a Cost Coverage Agreement with Viaro Bidco. Viaro Bidco has undertaken to pay,
or procure the payment of, certain costs reasonably and properly incurred by Deltic in connection with the Acquisition. The
costs undertaking is capped at a maximum aggregate amount of £650,000. The Company does not expect the costs
associated with the Acquisition to be any more than £650,000.
Company Information
Directors
M S Lappin (Chairman)
A J Nunn (Chief Executive Officer)
P W Nicol (Non-Executive)
Joint Secretary
S M McLeod
Gravitas Company Secretarial Services Limited
Registered Office
1st Floor
150 Waterloo Road
London
SE1 8SB
Registered Number
07958581 (England and Wales)
Nominated Adviser
Allenby Capital Limited
5 St Helen's Place
London
EC3A 6AB
Corporate Broker
Canaccord Genuity Limited
88 Wood Street
London
EC2V 7QR
Auditors
PKF Littlejohn LLP
15 Westferry Circus
Canary Wharf
London
W1U 7EU
Solicitors
K&L Gates LLP
One New Change
London
EC4M 9AF
Financial Public Relations
Vigo Consulting
Sackville House
40 Piccadilly
London
W1J OHR
Registrar
Share Registrars Limited
3 The Millennium Centre
Crosby Way
Farnham
Surrey
GU9 7XX
Deltic Energy Plc
1st Floor
150 Waterloo Road
London
SE1 8SB
United Kingdom
+44 (0)20 7887 2630
www.delticenergy.com