Annual Report
Year ended 31 December 2021
CCOONNTTEENNTTSS
OOvveerrvviieeww
Chairman & Chief
Executive Officer’s Report
01
SSttrraatteeggiicc RReeppoorrtt
Strategic Report
Our Assets
Financial Review
Our Stakeholders
Risks
OOuurr GGoovveerrnnaannccee
Board of Directors
Corporate Governance
Report
Sustainability Report
Directors’ Report
Directors’ Responsibilities
Audit Committee Report
Remuneration Report
Independent Auditors’
Report
FFiinnaanncciiaall SSttaatteemmeennttss
Consolidated Statement
of Comprehensive Income
Consolidated Statement
of Financial Position
Consolidated Statement
of Changes in Equity
Notes to the Consolidated
Financial Statements
Company Statement of
Financial Position
Company Statement of
Changes in Equity
Notes to the Company
Financial Statements
03
04
06
07
09
12
14
20
25
27
28
29
35
41
42
43
44
65
66
67
Jersey Oil and Gas plc
JJeerrsseeyy OOiill aanndd GGaass ((““JJOOGG””)) iiss aa UUKK iinnddeeppeennddeenntt NNoorrtthh SSeeaa ffooccuusseedd
uuppssttrreeaamm ooiill aanndd ggaass ccoommppaannyy,, ddeelliivveerriinngg oonn aa ssttrraatteeggyy ooff ffooccuusseedd ggrroowwtthh
aass ppaarrtt ooff tthhee eenneerrggyy ttrraannssiittiioonn..
Since 2019 the Group has successfully aggregated a significant oil and gas
resource base in the heart of the Central North Sea, the “Greater Buchan
Area” (“GBA”). As the sole owner of the GBA, the Group has the control
and flexibility to advance a proposed optimal new hub development
capable of unlocking substantial long-term shareholder value. To this end,
the next major step for JOG is to secure an industry partner(s) in order to
move the development into the next phase of activities and secure the
necessary regulatory approvals in 2023 for execution of the project.
GGBBAA FFooccuuss
▪ JOG is actively engaged with multiple counterparties regarding the
planned farm-out of an interest in the GBA
▪ Work is progressing to assess development concepts to facilitate such a
farm-out including the use of existing third-party host infrastructure for
future production from the GBA. Such concepts have the potential to
enhance overall development economics through the synergies and cost
savings associated with utilising common infrastructure
▪ The work completed by the Group
in 2020-21 on a platform
development concept is facilitating an accelerated technical evaluation
of various alternative development options
▪ Upon selection of the optimal GBA development concept from the wider
opportunity set that has now been generated, the project will move into
“Front End Engineering & Design” activities along with preparation of the
required Field Development Plan for the North Sea Transition Authority
(“NSTA”)
SSuuppppoorrttiivvee MMaaccrroo EEnnvviirroonnmmeenntt
▪ Recent geopolitical events, exacerbated by recent under investment in
the upstream sector, have led to a material escalation in oil and gas prices
that has served to underline the importance of maximising domestic
energy supplies
▪ The UK North Sea has only a limited number of readily executable oil and
gas developments with a resource base in excess of 100 million barrels of
oil equivalent such as that offered by the GBA
AAttttrraaccttiivvee OOuuttllooookk
▪ Progressing the GBA development project remains JOG’s number one
priority
▪ Acceleration of the Group’s corporate growth strategy, through the
execution of potential accretive acquisitions, remains a core objective
▪ The Group remains well funded with a cash balance at the end of 2021 of
approximately £13 million and with current expenditure primarily related
to workstreams that will facilitate securing a successful farm-out
▪ Strengthened management team with significant industry experience
CHAIRMAN & CHIEF EXECUTIVE OFFICER’S REPORT
Jersey Oil and Gas plc
Overview
During 2021 JOG made good
progress in advancing its primary
objective of unlocking value from
the Greater Buchan Area (“GBA”)
development project.
The hard
work and effort of our team on
multiple work
has
positioned the Group well; defining
the unique investment opportunity
the GBA offers, with the significant
proven oil
resources providing
attractive economics and flexibility
for various development options, in
the heart of the Central North Sea.
streams
Portfolio With Scale
The Group has constructed a quality
portfolio of assets that form the
GBA in the Outer Moray Firth area
of the UK North Sea. It represents a
near full-cycle portfolio of assets,
underpinned by the Buchan Oil field
and
J2 and Verbier oil
discoveries, along with three high
impact and drill-ready exploration
prospects; Verbier Deep, Wengen
and Cortina.
the
in
the
excess
to contingent oil
In addition
of
of
resources
100mmbbls
in the planned first
phase development of the Greater
Buchan Area, our shareholders have
ownership of significant resource
upside from further development
drill-ready
phases
and
exploration prospects
that are
proximal to the core project. As an
in our
indication of confidence
ability
for
raised
shareholders,
£16.61m
an
and
oversubscribed
subscription
2021,
providing strength and flexibility to
advance the project to the next
phase.
deliver
the Group
placing
in March
through
(gross)
value
to
CSR was focused on meeting the
NSTA’s twin strategic objectives of
‘Maximising Economic Recovery’
and contributing to the Government
target for ‘Net Zero’ and it was used
to
industry farm-out
process, as a project of this scale
requires multiple partners and
funding components for successful
delivery.
launch an
and
GBA Farm-Out Advancing
The farm-out process is generating
interest from a wide variety of
infrastructure
producers
owners. Initial engagement and
screening has led to JOG being
actively engaged with multiple
serious counterparties of scale, with
involving
ongoing due diligence
two-way
collaborative
workstreams. Work is progressing
to assess various development
concepts that can facilitate the
farm-out, including using existing
third-party host infrastructure and
overall
facilities
development economics through
synergies and cost savings. The
associated
recoverable volumes
from the GBA will naturally be
dependent on the development
solution that
is taken forward.
Opportunities to optimise forecast
production and capital expenditure
requirements
represent a core
component of the evaluations. The
work completed during 2021 on the
platform development concept has
accelerated the technical evaluation
of these further options.
enhance
to
the GBA
Completing the assessment of the
wider set of development solutions
is naturally an
for
important driver
for delivering
stakeholder value from the project
and a task the Group is working on
with pace to progress.
The Group remains well funded with
a cash balance at the end of 2021 of
approximately £13 million and with
current expenditure focused on
workstreams
facilitate
securing a successful farm-out.
that will
Positive Macro Environment
It has been a volatile year for
sentiment in the oil and gas sector
and in the lead up to “COP26” there
was much debate about the future
of the North Sea. We see the North
Sea as a crucible
for energy
transition where upstream oil and
gas
effectively
function
can
alongside
the advancement of
renewable energy, with examples of
leading
oil and gas companies
investments into offshore wind and
carbon capture, utilisation and
technologies.
storage
wind
Indeed,
developments,
the
decarbonisation of offshore oil and
gas
regional
electrification may likely play an
important role in optimising the
GBA development plans. We have
put net zero considerations at the
heart of our business by subscribing
to the principles that underpin the
North Sea Transition Deal that was
in March 2021, and
announced
which
industry’s
transition to clean, green energy.
infrastructure and
facilitating
(“CCUS”)
supports
offshore
the
standalone GBA
A
platform
development concept was prepared
and a Concept Select Report
(“CSR”) submitted to the North Sea
Transition Authority (“NSTA”). The
1
of
underlying
exacerbated
Recent geopolitical events have
sadly served as a salutary reminder
that security of energy supply
remains of vital importance as the
energy transition is achieved. The
supply
reality
fundamentals,
by
several years of under investment
across the upstream sector and the
significant and steady increase in
commodity prices have served as a
reminder that oil and gas is a vital
component of the overall energy
Investment in maximising the
mix.
low-
production of
carbon UK
remains
crucial for security of supply and
represents the best way for the UK
economy to navigate the energy
transition wisely, with JOG having
an important part to play in this
Improved commodity
evolution.
prices have bolstered producing
company cash positions, serving to
improve sector confidence
indigenous,
resources
and provide a helpful backdrop to
the
farm-out
process.
on-going GBA
Strong Organisation & Outlook
During 2021, JOG made several
senior management and Board
changes which marked the next
phase in the Group's development
for delivery on
its key strategic
ambitions. It was pleasing to be able
to welcome Graham Forbes and
Richard Smith into the Group as
Chief Financial Officer and Chief
Commercial Officer, respectively.
This, combined with the smooth
transition of the Chairman’s role
from Marcus Stanton to myself (Les
Thomas), has strengthened the
execution
and
leadership of the Group.
capabilities
We have built a team of experienced
professionals, with a demonstrable
track record in the industry, a high-
Jersey Oil and Gas plc
asset
a
quality
comfortable funding position to
work from.
base
and
is
therefore well
The Group
positioned for success and on behalf
of the Board, we would like to thank
our dedicated JOG team for their
accomplishments during the year
and to recognise and acknowledge
the ongoing support we have
received
our
shareholders and stakeholders at
large.
from
all
of
Les Thomas,
Non-Executive
Chairman
Andrew Benitz,
Chief Executive Officer
27 April2022
2
STRATEGIC REPORT
Business Review & Future Activities
The principal activity of the Group is
that of an upstream oil and gas
business in the United Kingdom.
The Company is a public limited
company incorporated in England
(Company number
and Wales
07503957) and is quoted in London
on the AIM market of the London
Stock Exchange plc (“AIM”) under
the designation JOG. The Company
is required by the Companies Act
2006 to set out in this report a
review of the business of the Group
during the year ended 31 December
2021 and the position of the Group
at the end of the year, as well as the
principal risks and uncertainties
facing the Group. The information
that
requirements,
these
including discussion of the business
and future developments, is set out
in the Chairman and Chief Executive
the
Officer’s
Strategic Report.
repott and
fulfils
joint
Business Strategy
The Group has a two-pronged
approach to its strategy, which are
aimed
strong
shareholder returns. The first is a
Core Area Strategy, which
is
focused on the area surrounding our
principal assets, UK licences P2498
delivering
at
and P2170 (collectively known as the
Greater Buchan Area) to create and
increase value in the licences and
surrounding areas. The second is
the pursuit and execution of asset
acquisitions in the UK North Sea
area. The continued evolution of the
UK North Sea and wider industry
environment are expected to result
in some
interesting acquisition
opportunities arising that we, as a
Group unencumbered by debt or
decommissioning liabilities, may be
able to exploit beneficially.
The Greater Buchan Area
During the year, JOG maintained
focus on its Core Area Strategy, with
the delivery of Concept Select for
the GBA and the launch of a farm-
out process. Our primary asset is the
Buchan oil field which sits across
two blocks in the P2498 licence,
together with the J2 oil discovery.
This
licence, together with the
P2170 licence, form our core area,
referred to as the GBA. Closely
integrated into our focus on the core
GBA area has been the pursuit and
execution last year of both an asset
and corporate acquisition in the
GBA to give JOG 100% ownership of
the GBA. Licence P2170, includes
the Verbier oil discovery and
Jersey Oil and Gas plc
significant upside potential from
three drill-ready prospects, Verbier
Deep, Wengen and Cortina.
to
undertaking
technical
Further
a
comprehensive
and
licences
economic evaluation of
P2497 (Zermatt) and P2499 (Glenn),
JOG decided not to progress to the
next licence phase, which would
have required committing to a firm
well in each of these two licence
areas. Accordingly, the
licences
were relinquished at the end of
Phase A of their Initial Term on 29
August 2021.
UK North Sea Growth Through
Acquisitions
2021 ushered in a return of M&A
activity across the UK North Sea,
with several sizeable third party
deals announced throughout the
year. Our primary focus
is on
securing funding and a partner(s)
for our flagship GBA Development
project, but with increased activity
and some motivated sellers, JOG
remains active
reviewing a
number of potential acquisitions
and/or opportunities for possible
business combinations.
in
3
OUR ASSETS
The core focus of the business in
2021 was centred on advancing the
select and associated
concept
engineering activities for the GBA
Development project.
non-uniform
properties,
rock
coupled with rock-fluid properties
rates,
to determine production
pressures, fluid compositions and
saturations.
of
Extensive Resource Base
Following the award of the Buchan
in 2019 and subsequent
licence
transactions
the
to consolidate
Group’s other key licence interest in
the surrounding acreage during
2020, JOG has created an attractive
and
portfolio
well
prospective
positioned, and with sufficient
critical mass, for a proposed hub-
based development. In aggregate,
the licences (comprising the GBA
and Verbier) are estimated by the
Group
contingent
contain
resources in excess of 150 million
barrels of oil equivalent.
discovered
resources
to
The primary asset in the portfolio is
the Buchan oil field which sits across
two blocks in the P2498 licence. This
licence, together with licence P2170,
form our core area, the GBA. The
Group owns the interests outright
and as such has the control and
flexibility to determine the optimal
route
the
to monetisation of
resources.
geology,
Subsurface
Since the award of the Buchan
acreage in the 31st Licence Round,
extensive subsurface work has been
undertaken to better understand
the
reservoir
characteristics and performance
forecasts of the field and nearby J2
and Verbier discoveries. Extensive
static and dynamic modelling work
has
to
appropriately characterise and de-
risk the expected performance of
the fields. The static models aim to
depict the geological setting of the
reservoirs, while
the dynamic
production
involves
modelling
forecasting that incorporates the
lateral and vertical distribution of
completed
been
In the case of the Buchan oil field,
the focus of the subsurface work has
been centred on developing a
dynamic history matched model
that robustly simulates the actual
production of oil, gas and water
from the field over the 36 years the
field was originally in production (up
to 2017 when facilities driven issues
resulted in the operator at the time
ceasing production from the field).
the
Refinement
simulated
field
is aimed at
History matching
achieving a reasonable alignment
between
and
observed historical
/ well
behaviour to establish a satisfactory
model for reservoir management
and
purposes.
maturation of the modelling
is
generally a continual process, and
located
having
successfully
additional core data
the
original Buchan oil field wells in late
2021, work continues to further
optimise the field characterisation
and history matched model.
from
advancing
concept
Development Concept Engineering
Alongside
the subsurface work
programme, the core focus of the
in 2021 was
GBA workstreams
centred
the
on
and
development
associated engineering activities for
the GBA. The specification of a
standalone platform development
through conceptual
taken
was
the key
engineering
to define
associated
parameters
with
producing
exporting
and
hydrocarbons from the GBA and the
associated costs and economics.
This solution has then served as the
backbone for engagement with the
industry on the farm-out
wider
process that was launched during
the year.
Jersey Oil and Gas plc
The Group’s overall GBA resource
development plan envisages three
Phase 1 is
phases of activities.
centred on the exploitation of the
Buchan oil field, with production
supported by water
injection to
maintain pressure support and
optimise reservoir sweep. Phase 2
focuses on development of the J2
West, J2 East and Verbier East
discoveries and Phase 3 on the
Verbier West discovery.
for
the
CSR
A
platform
development solution for the GBA
was submitted to the North Sea
Transition Authority
(“NSTA”)
(formerly the Oil and Gas Authority
“OGA”) during 2021 in compliance
with JOG’s commitment under the
P2498 (Buchan) licence. Following
completion of the on-going farm-
out process, a revision to the CSR is
intended to be submitted to reflect
the ultimate development concept
that is to be taken forward into the
next phase of activities.
has
survey
Pre-FEED Work
In June 2021, JOG commenced an
offshore survey to support Phase 1
of the GBA Development project.
The
acquired
geotechnical and environmental
baseline data within the Greater
Buchan Area along the proposed
subsea power cable route and oil /
gas export option routes. This data
will be input into the facilities Front-
and Design
End Engineering
(“FEED”) work and support the
preparation of the Environmental
Statement, required for the Field
Development Plan. The data
acquisition stage of these surveys
was completed during August 2021
with analysis of the acquired data
on-going.
4
Farm-Out Activities
The objective of the
farm-out
process is to secure an industry
partner(s) to acquire an interest in
the GBA Development project and
work in partnership with JOG to
unlock the value of the resource
base. This approach is in line with
for
the
maintaining a prudent financing and
risk management strategy when
embarking
capital
on major
expenditure programmes.
objectives
Group’s
but
also
with
Following the launch of the farm-
out process, the Group has been
actively engaged with multiple
parties
counterparties,
interested in not just a platform
concept
alternative
concepts that could facilitate the
GBA development through the use
of tie-backs to existing third-party
infrastructure or floating production
solutions for future production from
Work has been
the GBA.
progressing since the latter part of
2021 to assess these development
concepts, which have the potential
to enhance the overall development
economics through the synergies
and cost savings associated with
utilising existing infrastructure.
is
facilitating
alternative
The work completed by the Group
the platform development
on
concept
an
accelerated technical evaluation of
development
the
options.
set of
The wider
development options now under
consideration are being assessed
and optimised both technically and
economically to identify the most
appropriate
take
solution
forward. The assessment criteria
take
factors
encompassing project deliverability,
execution
environmental
impact and life of field operability;
all with a view to determining the
level of confidence around the
ability
the
development concept on time and
With respect to
within budget.
economic
the
development options are being
safely deliver
considerations,
account
risks,
into
to
to
evaluated using the typical range of
metrics including project IRR, NPV,
payback
valuation
period,
sensitivities, etc. taking into account
the projected first oil date, CAPEX,
OPEX,
and
decommissioning obligations.
availability
of
to
the
viable
Concept screening evaluations have
shown the alternative development
options
and
be
economically attractive, subject to
on-going
completion
confirmatory technical studies. As a
consequence, a number of detailed
in the
engineering studies are
process of being completed
in
various
collaboration
counterparties in order to validate
different
and
development
and
of
facilitate
commercial constructs for a GBA
farm-out.
the
solutions
negotiation
de-risk
with
the
into
Regulatory Activities
Upon selection of the optimal GBA
development concept from the
wider opportunity set that has now
been generated, the project will
move
the next phase of
activities, being the completion of
is
FEED.
the
to culminate
designed
submission and approval of the
required Field Development Plan to
the NSTA in 2023.
Completion of FEED
in
During 2021 the NSTA approved
Jersey Petroleum Ltd, a wholly-
owned subsidiary of JOG, as an
Installation Operator. This marks a
significant step in the maturation of
the Group as a UK North Sea oil and
gas operator.
The approval
highlights that the NSTA is satisfied
that the Group has suitable and
in place to
sufficient processes
manage
and
specification of the safety and
environmentally critical systems
and equipment for new offshore oil
and gas facilities. This represents an
important regulatory pre-requisite
for the submission of future Design
Notifications to the Offshore Major
design
the
Jersey Oil and Gas plc
Accident Regulator and installation
Safety Cases documentation.
JOG is actively working to ensure
the GBA development solution that
is taken forward for regulatory
approval will be set-up to deliver
upon of both the industry’s strategic
objectives of “Maximising Economic
Recovery” and “Net Zero”.
wind
from
future
through
facilities
Electrification
In conjunction with the specification
the platform development
of
concept, the options to electrify the
future
the
provision of power from shore,
power
localised
or
offshore
participation in a regional offshore
electrification hub were embedded
within the designs.
The Group
continues to remain close to the
evolving offshore electrification
developments
that are being
pursued by the wider industry, with
a view to maintaining an active
presence.
projects
footprint of
The ability to minimise the full-cycle
the
environmental
different development solutions will
be a key component in evaluating
the various options and concluding
the farm-out process.
5
FINANCIAL REVIEW
Cash Resources and Short-Term
Investments
The Group ended 2021 in a strong
position, with £13.0m of cash
remaining.
Debt
JOG currently has no debt.
of
Statement
Consolidated
Comprehensive Income
The Group had no trading revenues
in 2021. Cost of Sales
includes
expenditure on software licences
used to grow and develop the
Group. In the prior year the Group
reached a settlement with TGS
pursuant to an agreement entered
into on 9 February 2018 resulting in
a one-off payment of £0.6m.
With the major study work coming
to a close at the turn of the year the
is more
2022 work programme
focused on
interaction with the
multiple counterparties who are
engaged
in our GBA farm-out
process. This phase necessitates a
smaller, more focused team and
the manpower
consequently
requirements have been
flexed
accordingly. This should ensure that
the Group continues to remain lean
and cost-efficient, and takes the
forecast cash spend to a quarterly
run rate (prior to a farm-out and
FEED) of under £1.5million.
Licence Relinquishments during the
year
Jersey Oil and Gas plc
expenditure and non-financial KPIs
which relate to Health, Safety,
the Environment
Security and
(“HSSE”).
financial
flexibility
Given the nature of our business, it is
that we monitor and
critical
carefully manage our cash and
maintain
to
recapitalise the balance sheet as
and when required, whilst at all
times being able to honour our
commitments and progress our
business
of
the
shareholders. On a similar note, our
administration
operating
expenditure needs to be kept within
budget and within a range that is
size and
appropriate
operations of the Group.
interest
and
the
to
in
Expenditure Highlights
continuing
a
saw
2021
strengthening of
the Group’s
project management and execution
capabilities as the team advanced
the engineering work and studies
associated with the GBA concept
select. This included engineering
studies
subsea,
facilities and well design aspects of
the project, along with extensive
offshore pipeline route surveys.
covering
the
While costs directly associated with
the GBA Development project have
been capitalised the Administrative
Expenses increased to £3.7million
(202o £2.1 million).
This included an 0ne-off charge in
the year of approximately £0.8m
associated with changing the senior
management team in November
2021.
During the year the Group also
incurred modest costs on pursuing
multiple acquisition opportunities
and processes to no avail to date.
that
21/2a
Block
a
The Group relinquished
licences
P2497 Block 20/4c (Zermatt) and
(Glenn).
P2499
Following
comprehensive
technical and economic evaluation
of licences P2497 and P2499 and
meetings held with the North Sea
Transition Authority ("NSTA"), the
NSTA confirmed
it was
satisfied that the Phase A Firm
Commitments for both licences had
been fulfilled. JOG decided not to
progress to the next licence phase,
which would
required
committing to a firm well in each of
areas.
these
licences
Accordingly,
automatically
and
determined at the end of Phase A of
their Initial Term on 29 August 2021.
licence
the
ceased
have
two
HSSE is our most important non-
financial KPI, due to the importance
we place on the protection of the
environment and the safety of our
employees.
remains
Outlook
The Directors consider that the
Group
appropriately
capitalised for its current asset base.
It is well managed, with an efficient,
effective, and scalable cost base,
and remains well placed to pursue
our current stated strategy. There is
a strong belief that there is good
potential for continued near-term
value
has
manageable expected obligations in
respect of further forward activity.
creation.
JOG
Key Performance Indicators
The Group’s Key Performance
Indicators (“KPIs”) are dominated by
the key driver for the business – the
farm out of the GBA Development
project, which will catapult the
growth of the Group. Additionally,
there are financial KPIs, which relate
cash
to
controlled
tightly
Graham Forbes
Chief Financial Officer
27 April 2022
6
Jersey Oil and Gas plc
OUR STAKEHOLDERS
S172 Companies Act 2006
▪ Stakeholders
▪ ESG
▪ UN Global
Compact
Human Resources
▪ Employees
▪ Contractors
▪ Advisers
For JOG, engaging with our stakeholders is an integral part of how we operate as a
business – actively seeking to understand what really matters to our stakeholders and
ensuring that we take this into account in our decision-making, both at strategic and
operational levels. This engagement enables us to continue to build a leading, mid-tier
upstream oil & gas company, through maintaining a motivated workforce, dependable
supply chains, close relationships with Government Regulators, while providing good
returns for our shareholders and a positive social impact in our local communities. We
set out below our key stakeholder groups and how we engage with them.
Further information on how stakeholder considerations are taken into account by the
Board in their decision-making, in accordance with s172 of the Companies Act 2006, is
provided in the Governance section.
The Group maintains an active dialogue with its regulator, the NSTA, in carrying out its
role as licence operator on its assets. Throughout the year, in review and during the
period up to the publication of the report, we discussed the Group’s progress on
developing and farming out the GBA area as well as engagements with operators of
nearby infrastructure and future developments.
During COVID-19 pandemic the Group organised monthly conference calls with all staff
and contractors for which wellbeing was an important component – this included a
mental wellbeing presentation and an opportunity for everyone to access a mindfulness
app. Online work social events were also organised on a weekly basis.
JOG is committed to the goal of achieving high standards of Environmental, Social and
Governance (ESG), both in its corporate activities and also in its operational activities,
of which the GBA Project is its principal enterprise. In support of this goal, JOG is a
signatory of the United Nations Global Compact (UNGC), which is the world’s largest
corporate sustainability initiative.
JOG is committed to doing business responsibly by aligning its activities with the
UNGC’s Ten Principles on human rights, labour, the environment, and anti-corruption.
One of the responsibilities of being a UNGC signatory is engaging with suppliers of
goods and services to the GBA Project, to ensure that those organisations with which
JOG seeks to contract with are aware of JOG’s ESG Standards and that JOG will
endeavour to seek alignment between JOG’s ESG policies and those of its Contractors.
Our staff are key to delivering our business goals and ambitions. We rely on their skills,
experience, knowledge, and diversity to deliver our vision to grow a successful,
sustainable and valuable business.
We have been fortunate to be able to attract some of the industry’s best and brightest
talent. We promote and maintain a strong and embedded culture of health and safety,
which is of fundamental importance to us. Culture and brand; we are proud of what we
have built and achieved. Ethics and values; good governance, based on strong principles
and leadership. Well-being: we care for and about all our staff and employees (please
refer to the COVID-19 measures set out above). The Group communicates continuously
on key corporate news and structural changes through emails, video and conference
calls which allow for questions from employees. We value all employees, and we ensure
that our communications are inclusive, providing full transparency across the business.
We aim for continual improvement in the management of our human resources. Key
topics for further improvement are: opportunities for career progression, development
7
Shareholders
▪ Shareholder
Communication
Suppliers
▪ Procurement and
Contracting
Community
▪ Corporate
Citizenship
Government / Regulator
▪ Key Stakeholders
Jersey Oil and Gas plc
and succession planning, and working practices. As a Group, we are focused on
sustaining a positive business culture and continue to promote our values and
behaviours through performance reviews and communication.
It is important that our shareholders understand our strategic priorities and ambition
and their views inform our decision-making. Communication and engagement are
critical to this aim. We held our last Annual General Meeting in June 2021. Our financial
results are announced twice a year, and regulatory news announcements provide
communication to our shareholders, along with our annual report to help investors and
other stakeholders understand our business and its performance. In conjunction with
our announcements our Chief Executive Officer regularly meets with and updates our
investors.
JOG’s Procurement Policy is underpinned by our internal procedures, which detail the
specific processes and governance procedures implemented to provide the most
efficient, effective, and cost-conscious supply service which incorporates effective
governance, risk management and prompt payment protocols.
Our effort is to be always professional and establish a reputation as being a reliable
customer with whom suppliers and partners want to do business.
When taking on a new supplier, we conduct a detailed review to ensure that we
understand not only the quality of their product or services but also their policies,
procedures and working practices, making sure they are consistent with our values and
compliance requirements. We keep our suppliers
informed of our business
performance through public disclosures and communication where appropriate.
The Group ensures that the quality of the services being supplied meets the standards
expected, through our engagement and monitoring payment terms.
We aim to be a contributor to economic growth by providing investment opportunities,
creating jobs and project development. We aim to ensure that many people can benefit
from our operations. We also provide support for our local communities through a
variety of initiatives.
Regulators are key external stakeholders across various aspects of our business and
particularly in activities which require statutory permits or consents. Briefings and
meetings with the various regulators occur at regular intervals, typically corresponding
to entering a new phase in the activity or key project phases, to provide updates on the
schedule, a look-ahead on work to be undertaken and to advise of any forthcoming
regulatory submissions or notifications.
8
Jersey Oil and Gas plc
RISKS
The Group operates in an environment that has substantial risks, albeit ones that it aims to mitigate and manage.
These risks have to be carefully balanced to maximise the chances of providing attractive returns for our
shareholders. The Group has a well-developed Risk Register. It is updated on a regular basis and discussed at regular
points throughout the year, within a business operational and management context and at Board meetings.
The risks and opportunities set out below and herein are not exhaustive and additional risks, uncertainties and
opportunities may arise or become material in the future. Any of these risks, as well as other risks and uncertainties
discussed in this report, could have a material adverse effect on the business.
Strategic and External Risks and Opportunities
▪ Regulatory obligations
▪ Movement and conditions
in capital markets
▪ Material oil price
movements
▪ Material changes in
Governmental approach
towards continued
hydrocarbon exploration,
development and
production
The Group works continually to foster positive relationships at all levels with
relevant government and regulatory bodies, including but not limited to the
NSTA, BEIS / OPRED and HSE.
The Group is exposed to various regulatory obligations as part of maintaining
its UK North Sea licences. JOG’s portfolio consists of licence P2498 (Buchan
and J2) and P2170 (Verbier) which currently have licence expiration dates of 29
August 2023 and 30 November 2022, respectively. Retention of each licence
requires the relevant field development plans to be approved by the NSTA by
the end of each licence term. The Group maintains an active dialogue with the
NSTA on its activities and seeks to ensure it can adjust any licence obligations
that reasonably require additional time to effectively execute its plans. There
are no work programmes associated with second term licenses, however
progress is monitored by NSTA via a series of milestones. The next milestone,
which was set at the time licence P2498 was awarded in 2019, is submission of
a FDP by 31 May 2022. This is not now expected to occur until next year.
The Group competes with other exploration and production companies, some
of whom have much greater financial resources, for the identification and
acquisition of oil and gas licences and properties. The market price of
hydrocarbons can be volatile and is not within the control of the Group.
The successful progression of the Group’s oil and gas assets depends not only
on technical success, but also on the ability of the Group to obtain appropriate
funds through equity financing, debt financing, farm-outs and/or other means.
The availability of funding may continue to be influenced by macroeconomic
events, such as oil price fluctuations or the overall state of the economy, both
of which remain outside the control of the Group. There is no assurance that
the Group will be successful in obtaining the required financing going forward.
The Group’s financial risk management policies are set out in note 4 of the
Consolidated Financial Statements.
There is no absolute assurance that the Group’s ongoing activities will be
successful. At the current time, the Group has two active licence interests,
which it still considers to have good reserves potential and prospects. These
licences come with some degree of risk and there may be an uncertainty over
the future success and potential commercialisation of the assets. The Group
may expand its portfolio through the acquisition of growth assets in the future
to provide asset diversification and there appears to be strong investor appetite
for the right transactions.
The Group is operating in an evolving environment where the energy transition
and decarbonisation of the wider economy will impact current and future
9
Financial Risks
▪ Availability of industry
funding and / or access to
capital markets
▪ Oil and gas price
movements
▪ Cost overruns and inflation
▪ Adverse taxation and
legislative changes
▪ Regulatory and compliance
risks
Jersey Oil and Gas plc
operations. The Group seeks to assess and manage the associated regulatory,
commercial, physical, and societal risks and opportunities in a structured
manner over the various applicable time horizons. Portfolio decisions,
including investments and potential acquisitions, are assessed against the
potential impacts of the transition to the use of lower-carbon energy. These
include higher regulatory costs linked to carbon emissions and lower demand
for oil and gas. The Group’s strategy recognises that the world is moving
towards a lower-carbon energy system, while acknowledging that the pace and
specific path forward remains uncertain. This means the Group will need to
make agile business decisions in step with society.
The key ongoing activity of the business is the farm-out process to advance the
redevelopment of the GBA. Failure to secure a farm-in partner(s) would have
a detrimental impact on the ability of the business to develop the GBA and
generate future cashflows.
An increasingly positive political and regulatory environment, together with
strong hydrocarbon pricing provides an encouraging backdrop for the planned
farm-out, however there are no certainties such trends will continue or indeed
that they may not reverse. The Group has further sought to mitigate the farm-
out risks through the strengthening of the Board and management team with
seasoned industry experts with knowledge of the likely counterparties and past
experience of completing similar transactions.
Close relationships are maintained with banks and the investor community as
the Group may require additional capital to facilitate potential future
acquisitions. The Group is usually in ongoing discussions with various financial
partners, with a view to them supporting the Group in the future once
producing assets are acquired or development, appraisal or exploration assets
require further funding. We are also regularly in talks with various third parties
and shareholders, regarding the provision of capital, with which to execute any
future acquisitions.
Based on current budgets and forecasts, the Group is well funded to pursue its
farm-out objectives. Budgets and cash flow projections, considering a range of
cost inflation and joint venture investment scenarios, are prepared and
updated regularly, circulated to all Directors and reviewed at Board meetings.
The Group raised significant funds in 2021 and expects to be able to operate
within its existing cash reserves in 2022 and beyond based on its current work
programme, subject to there not being any unforeseen cost overruns or other
expenses.
The Group currently has no income exposure to oil price fluctuations, since
there is no production accruing to the Group from its asset portfolio.
The Group will be exposed to any changes in the UK tax regime longer term and
supports the work of industry bodies in influencing government policy to
encourage investment in oil exploration and production, in addition to the
management of tax planning and compliance. At present, the Group holds
almost all its available cash resources in Sterling, hence it has minimal forex
exposure.
The Group ensures the risks considered appropriate for the Group’s needs and
circumstances.
10
Operational Risks
▪ Loss of key employees
▪ Delay and cost overruns,
including weather related
delays
▪ HSSE incidents
▪ Co-venturer and other
counterparty risk
▪ Failure of third-party
services
▪ Inherent geological risks
and uncertainties
Jersey Oil and Gas plc
The Group recognises that to achieve its long-term strategy it will need to
continue to take an active approach to identify, attract and retain the skills and
expertise needed and to incentivise employees appropriately. The oil and gas
sector is a particularly expensive sector in which to operate from a personnel
perspective. Although industry costs have reduced, due to the previous low oil
price environment, this should not be expected to continue in the future,
particularly with recent oil price recovery. The Group tries to ensure that we are
leanly but appropriately staffed, with a focus on technical capability and that
employees are working under contracts that provide the Group with a degree
of protection, should people leave our employ. Retention of key staff is aided
by the award of share options throughout the full staff structure.
Through the employment of high-quality, experienced staff and contractors,
combined with efficient and effective management overview and controls, we
believe we can mitigate many of the risks associated with our operations.
The Group typically aims to hold shared equity in its assets. Currently the Group
holds 100% working interests in all its licences. The Group has the capabilities,
skills, knowledge, and experience to mitigate many of the operational risks
associated with current and planned activities including HSSE and the
management of third-party contractors and service suppliers. Upon a
successful farm-out of equity in the GBA, the Group will be exposed to the usual
range of co-venturer risks, including the ability of co-venturers to finance their
own share of asset expenditures. It is anticipated that such risks will be
mitigated by the scale and capabilities of the co-venturers.
Full operational risk cover and advice is provided through the Group’s insurance
brokers. The Group monitors and evaluates all aspects of HSSE performance
and has adopted continuous improvement business practices and processes,
monitored, and evaluated at every level of the organisation. The Group will
continue to conduct its operations in a responsible manner that protects the
health, safety and security of employees, contractors and the public and
minimises the impact on the environment.
The Group is exposed to the inherent geological risks and uncertainties
associated with the oil and gas industry. Such risks can result in the volume of
hydrocarbons ultimately recovered from the Group’s assets and the associated
production profiles being different to the projected reservoir performance
characteristics. The Group undertakes thorough technical evaluations of all its
licences, including subsurface mapping and reservoir modelling. This work is
carried out by technically competent and experienced personnel, supported
where appropriate by leading technical consultants and third-party specialists.
A prudent range of input assumptions and possible outcomes are considered
within planning processes and opportunities to minimise the impact of
subsurface risks incorporated into drilling and engineering evaluations and
plans.
The foregoing risks, together with the Group’s relationships with the
government and regulators, are discussed and monitored as part of on-going
Board review processes.
11
BOARD OF DIRECTORS
Jersey Oil and Gas plc
Les Thomas
Andrew Benitz
Graham Forbes
Non-Executive Chairman
Chief Executive Officer
Chief Financial Officer
Les Thomas has over 35 years’
experience in the Oil and Gas
industry, in various subsurface,
and
engineering, operational
senior management positions.
Les was formerly CEO of Ithaca
Energy Inc. from 2013 to 2020 and
previously served for eight years
on the Board of John Wood Group
plc, as Chief Executive of
its
Production Facilities business and
the Group Director responsible
for HSE. Prior to this, he spent 22
years with Marathon Oil UK
Limited in various locations and
roles,
including four years as
European Business Unit Leader.
is also an
Les
independent
director of Repsol Sinopec
Resources UK Limited, a
joint
venture between Repsol and
Sinopec with a significant UK
North Sea portfolio, as well as
serving as a Non-Executive
Director of Avingtrans Plc, an AIM
and
quoted
manufacturing business. Les has
a BSc (1st class hons) in Civil
Engineering and a Masters
degree in Petroleum Engineering,
both from Heriot Watt University
in Edinburgh.
engineering
Andrew Benitz was a Founding
Director of Jersey Oil and Gas E&P
Ltd (now a subsidiary of Jersey Oil
and Gas plc) and has over 17 years’
experience in financial markets
and company management. Prior
to co-founding Jersey Oil and Gas,
Andrew was Chief Executive
Officer and Director at Longreach
Oil and Gas Ltd, a TSX-V quoted
company. He joined Longreach in
2009 as Chief Operating Officer
it was a small private
when
company
the
and oversaw
company’s growth, building a
significant portfolio of oil and gas
assets in Morocco. Prior to his
move
industry, Andrew
worked at Deutsche Bank AG as
an Analyst within the Oil and Gas
Investment Banking Group as well
the Equity Capital
as within
Markets team, where he worked
on a broad range of oil and gas
M&A transactions, together with
equity-related
equity
financings. Andrew is also founder
and Director of Titan Properties
SL, a real estate business in Spain.
He completed his undergraduate
studies at Edinburgh University
graduating with a Bachelor of
Commerce (Honours).
into
and
as
as
Accountant
Graham Forbes is a Chartered
Accountant with over 20 years’
experience in the oil and gas
industry. Prior to joining Jersey
Oil & Gas in 2021, Graham was
the Chief Financial Officer (CFO)
of Ithaca Energy from 2010 to
a
2020. He qualified
Chartered
at
PricewaterhouseCoopers before
moving to ExxonMobil, where for
over five years he worked on a
variety of operational and
acquisition-based projects.
In
2002, Graham joined First Oil
Finance
Group where,
Director and
then Executive
Director, he helped develop the
into the UK’s then
business
largest privately owned E&P
company. Following his move to
Ithaca Energy in 2010, Graham
in
instrumental
was
transforming the company into a
major
UKCS
independent
operator through both organic
and multiple
developments
acquisitions. He has extensive
quoted company and corporate
finance
having
experience,
completed various debt and
equity market offerings and the
US$1.2
and
subsequent delisting of Ithaca
Energy.
billion
sale
12
Jersey Oil and Gas plc
Frank Moxon
Marcus Stanton
Senior Independent Director
Non-Executive Director
a
as
the
financial
Frank Moxon has over 30 years’
corporate
experience
financier and financial adviser to
companies, from start-ups to over
£3 billion in size, in a wide range of
industry sectors. However, he has
specialised for the last 24 years in
oil & gas and mining. He has held
several senior management roles
within
services
industry and, in addition to being
senior
independent director at
Cove Energy Plc, has been a
director of various oil & gas and
mining
in
London, Australia and Canada.
Frank is currently also President of
the East of England Co-operative
Society.
in
Economics and is an Honorary
the
Fellow
Chartered
Chartered Institute for Securities
& Investment, a Fellow of the
the
Energy
Institute of Materials, Minerals &
Mining and a member of the
Petroleum Exploration Society of
Great Britain.
Institute and of
He has a BSc
companies
listed
of
Marcus Stanton has extensive
experience in the oil & gas and
banking industries and has been a
Non-Executive Chairman and
Non-Executive Director of a
quoted
number
companies over the past 20
years. These have
included
various oil and gas companies,
both in the UK and overseas,
covering E&P and oil and gas
services.
AIM
of
Marcus qualified as a Chartered
Accountant at Arthur Andersen,
where he worked in the oil and gas
division. Previously held banking
include Chief Operating
roles
Officer of Global Capital Markets,
Robert Fleming & Co. and
Director, Corporate Finance, at
Hill Samuel & Co. Marcus also
provides expert evidence on
banking transactions, both in the
UK and overseas. He is a Fellow of
the
of Chartered
Accountants
in England and
Wales and a Chartered Fellow of
for
the Chartered
Securities
Investment.
and
Marcus graduated from Oriel
College, Oxford.
Institute
Institute
13
Jersey Oil and Gas plc
CORPORATE GOVERNANCE REPORT
The Board of Jersey Oil and Gas plc (“JOG,” “the Company” or the “Group”), believes that a sound corporate
governance policy, involving a transparent set of procedures and practices, is an essential ingredient to the Group’s
success both in the medium and long term. The application of these policies enables key decisions to be made by
the Board as a whole, and for the Company to function in a manner that takes into account all stakeholders in the
Group, including employees, suppliers and business partners.
As a company quoted on AIM, JOG is also required to comply with a recognised corporate governance code. At the
current stage of the Company’s development, the Board believes it appropriate for the Group to comply with the
QCA Corporate Governance Code (the “QCA Code”), which is a code designed for growing companies and provides
an effective and proportionate governance framework that is reflective of the Group’s culture and values. As
Chairman of the Board it is my responsibility to ensure these policies and procedures are in place and operate
effectively.
QCA Corporate Governance Code
1.Establish a strategy and business
model which promotes long-term
value for shareholders
JOG is an oil and gas Group whose
principal activity
is that of an
upstream oil and gas business in the
The Group’s
United Kingdom.
strategy and business model is set
out in this Annual Report and during
2021 this was primarily focused on
the development of the Group’s
GBA licence interests.
The Group seeks
to generate
shareholder value from bringing the
into
core area of
production as soon as
reasonably practicable, in addition
to obtaining value from its nearby
exploration prospects.
the GBA
This Annual Report sets out a
number of risks and uncertainties
that may represent challenges to
the execution of
the Group’s
strategy and business model, and
how such risks and uncertainties are
managed by the Group.
The Board of Directors participate in
a regular conference call, at least
monthly, during which they discuss -
amongst other items - the strategic
direction and operational status of
the Group, and as a result any
significant deviation or change,
should
be
highlighted to the Board promptly.
occur, will
such
2.Seek to understand and meet
shareholder needs and expectations
important.
The Board considers that good
communication with shareholders,
based on the mutual understanding
of objectives,
In
is
addition to the information included
in the Group’s Annual and Interim
Reports, there is regular dialogue
between the Board (led by the Chief
Executive Officer) and shareholders,
public
as well
announcements.
Chief
Executive Officer and the Chief
Financial Officer also give regular
presentations to investors, including
one-to-one meetings with major
shareholders during the year,
in
addition to specific meetings with
to major
shareholders
transactions.
required
The
relating
as
and
constant
A
up-to-date
information flow is also maintained
on the Group’s website which
contains all press announcements
and financial reports as well as
extensive operational information
on the Group’s activities. The Board
also encourages shareholders to
attend the Annual General Meeting,
at which members of the Board are
available to answer questions and
present a summary of the year’s
activity and the corporate outlook
for the Group.
The Group also utilises professional
advisors such as a Broker, NOMAD,
Corporate
communications
specialists and Company Secretarial
services to provide advice and
recommendations
various
shareholder considerations where
relevant.
on
Contact details are provided on the
Group’s website and within public
documents, should shareholders
with to communicate with the
Group.
into
account
and
3.Take
stakeholder
responsibilities
implications for long-term success
wider
social
their
and
JOG takes an active role in seeking
to address the environmental, social
and governance aspects of
its
business.
A description of how the Group
considers key stakeholders in its
decision making is provided in the
“Our Stakeholders” section of this
report.
As a relatively small and inclusive
organisation, the Group is readily
aware of any employee practices
that are inconsistent with its values
and plans for long-term sustainable
success. The Group nevertheless
has in place many of the procedures
14
found in larger companies, together
with a wealth of experience on the
Board
in addressing employee
related matters. Our operating
activities are led by the principles of
the UN Global Compact as we
continue to define and assess the
social and environmental impacts of
GBA
Group’s
the
development project.
flagship
During 2021 the Group published a
Carbon Policy (available on the
website) which aims to reduce the
Group’s carbon footprint to
its
lowest possible level, for the benefit
of our shareholders and other
stakeholders.
The Board firmly believes that high
Health, Safety, Security, and the
(“HSSE”) standards
Environment
are
the Group’s
to
crucial
operational success. All Directors,
officers, managers, employees and
contractors are required to comply
with
is
reviewed periodically by the Board
and, if necessary, updated and re-
overall
The Group’s
issued.
approach to stakeholder and social
responsibilities, is covered in further
detail in the Sustainability Report
contained in this Annual Report.
its HSSE Policy, which
effective
4.Embed
risk
management, considering both
opportunities
threats,
throughout the organisation
and
Group
embeds
throughout
The
risk
the
management
organisation and this is described on
the Risk section of the report.
The Board monitors
controls through:
financial
a)
a budgeting and planning
process, requiring approval by the
Board;
the
b)
quarterly
receipt of
management reports covering the
Group’s financial affairs;
c) internal controls as articulated in
the Group’s Financial Reporting
Procedures; and,
d) a review by the Audit Committee
of the draft annual and interim
reports, and the Group’s annual
budget,
being
before
recommended to the Board.
As regards non-financial risks and
opportunities, and given the current
size of the Group, it is considered
preferable for this part of the
Group’s risk management to be the
responsibility of the Board as a
whole,
sub-
committee.
rather
than
a
Additionally, the Group consults
when relevant with the Group’s
corporate
and
NOMAD
communications advisors.
The audit committee reviews the
appropriateness of the internal and
financial controls.
5.Maintain the Board as a well-
functioning, balanced team led by
the Chair
The Board is the main decision-
making body of the Group which
meets both formally and informally
during the year.
The Board is responsible for the
Group's system of internal controls
and for reviewing its effectiveness.
The system is designed to manage,
rather than eliminate, the risk of
failure to achieve the execution of
the Group’s strategic objectives and
business model.
These controls
for all
include Board approval
policies, procedures and significant
projects.
The Board is comprised of:
▪ Les
Thomas Non-Executive
Chairman
▪ Andrew Benitz, Chief Executive
Officer
▪ Graham Forbes, Chief Financial
Officer
▪ Frank
Moxon,
Senior
Independent Director
▪ Marcus Stanton, Non-Executive
Director
Jersey Oil and Gas plc
All of the Executive Directors are
employed under service contracts
and work full time for the Group.
The Board considers and aspires to
achieve increased diversity where
possible when making
new
appointments, whilst recognising
the practical constraints of a
focused Group.
are
independent
The Non-Executive Directors work
part time, with additional time
commitments depending on new
Group developments as they arise.
The Board considers that all three of
the Non-Executive Directors, Les
Thomas, Frank Moxon and Marcus
Stanton
in
character and judgement. All three
have shareholdings (acquired with
their own funds) Marcus Stanton
and Frank Moxon have limited share
options (granted as part of the
annual remuneration process and
approved by the Board), and the
Board considers that this does not
impair their judgement.
The QCA Code recommends that
non-executive directors serve up to
a maximum of nine years, in order to
maintain their independence from
the executive members of the
Board. In this regard, Mr Stanton
(Non-Executive Director), was first
appointed a Non-Executive Director
of Trap Oil in 2011 and took on the
role of Non-Executive Chairman in
2014, following the departure of the
then Chairman, Chief Executive
Officer and Chief Operating Officer.
Mr Stanton, who has extensive
Board management experience,
including within the oil and gas
sector, was responsible for the
rationalisation of
the Group’s
operations during 2014 to 2015
leading up
the subsequent
reverse takeover by JOG in 2015.
For corporate governance purposes
the Board of JOG regard the
stipulated nine-year period relating
to Mr Stanton as effectively
commencing with
the current
formation of JOG on AIM (in 2015),
introduced a new Chief
which
to
15
Executive Officer, a new Chief
Operating Officer and a new set of
controlling
shareholders. Mr
Stanton resumed his role as a Non-
Executive Director in 2021, when Mr
Thomas assumed the role of Non-
Executive Chairman.
its Committees
The Board and
timely
receive appropriate and
information prior to each meeting.
A formal agenda is produced for
each meeting
Board
Committee papers are distributed
before meetings take place. Specific
actions arising from meetings are
agreed by the Board or relevant
committee and then followed up by
management. All Directors spend
such
to
effectively carry out their roles and
directors have access to advice or
services needed to enable them to
carry out their roles and duties.
is necessary
time as
and
In addition, at the end of each
month the Chief Executive Officer
briefs the Non-Executive Directors
on current developments.
6.Ensure that between them the
Directors have the necessary up-to-
date
and
capabilities
experience,
skills
The Board, as a whole, seeks to
maintain an appropriate mix of
experience, skills, personal qualities
and capabilities in order to deliver
the strategy of the Group. As a small
but growing Group this presents its
own
challenges, with Board
members taking on responsibilities
corporate
for
developments
and when
opportunities, or problems, arise.
dealing with
as
The skills and experience of the
Director’s are set out in the “Board
of Directors” section of this Annual
Report and are considered by the
Board
an
appropriate range of capabilities
needed to deliver the strategy of the
its
Group
shareholders over the medium to
long term. The experience and
the benefit of
representing
for
as
knowledge of each of the Directors,
and the steps taken to keep these
skill sets up to date, gives them the
ability to constructively challenge
scrutinise
strategy
performance.
and
to
The Board is assisted by Ian Farrelly,
the Company Secretary, whose
services are retained through a
contract with MSP Corporate
Services Limited, a professional
services
secretarial
company
provider.
7.Evaluate Board
based on clear and
objectives,
improvement
seeking
performance
relevant
continuous
The Group seeks to undertake an
evaluation of Board performance on
an annual basis or on an ad hoc
basis, as considered appropriate.
of
A formal Board evaluation process
was last completed in January 2020,
which was led by the Chairman,
assisted by the Company Secretary.
Individual Directors responded to a
detailed questionnaire covering
aspects
numerous
the
effectiveness
the Board’s
of
performance as a unit, as well as
that of
its committees and the
individual Directors. The results of
this questionnaire were compiled
into a formal report that was
reviewed and discussed by the
Board. The overall results of the
report were encouraging and the
next Board evaluation process is
planned to take place once progress
has been made in identifying an
appropriate partner(s)
the
development of the GBA.
for
the
level of
Succession planning
is reviewed
periodically both at the Board level
and at
senior
management. This is undertaken
from
the
the perspective of
development of the Board as a
whole as the business develops, and
unanticipated departures.
Jersey Oil and Gas plc
8.Promote a corporate culture that
is based on ethical values and
behaviours
The Board believes that the long-
is
term success of the Group
underpinned by a corporate culture
that is based on ethical values and
behaviours. Many of these are
extensive
highlighted
employee Staff Handbook which
draws together all of the Company’s
rules, policies and procedures.
an
in
a
These values, which JOG seeks to
instill throughout the Group, include
integrity,
respect, honesty and
transparency and are led by the
behavioural example of individual
Board members, particularly the
Chief Executive Officer and the
Chief Financial Officer. JOG also
well-defined
operates
organisational structure
through
which the Group seeks to determine
that ethical values and behaviours
are recognised and respected, in
addition to which every employee is
aware
established
our
whistleblowing procedures. These
include a formal Anti-Bribery and
Corruption Policy under which the
Group
to acting
legally, fairly and ethically wherever
business is conducted. The Group
does not
tolerate bribery and
corruption in any of its forms, nor
will it be tolerated in those with
whom the Group does business.
is committed
of
9.Maintain governance structures
and processes that are fit for
purpose and support good decision
making by the Board
structures
The Group maintains appropriate
governance
and
processes according to its size and
complexity. The Board is the main
decision-making body of the Group,
being responsible for:
a) the overall direction and strategy
of the Group;
b) monitoring performance;
c) understanding risk; and,
16
controls.
reviewing
d)
collectively
success of the Group.
responsible
It
for
is
the
Chairman
The Board of Directors comprises a
Non-Executive
(Les
Thomas), a Chief Executive Officer
(Andrew Benitz), a Chief Financial
Officer (Graham Forbes), a Senior
Independent
(Frank
Moxon) and one other Non-
Executive
(Marcus
Director
Stanton).
Director
is
key
The Chairman’s role is part-time,
and he is a Non-Executive Director.
His
the
responsibility
leadership of the Board, and this is
primarily effected through regular
Board meetings as well as contact
with other Board members and
interested parties between Board
meetings. The Chairman
is also
responsible for the establishment of
sound
governance
principles and practices.
corporate
is
The Chief Executive Officer
responsible
the day-to-day
for
running of the Group’s operations
and for implementing the strategy
agreed by the Board, in conjunction
with the other Executive Director.
is
The Chief Financial Officer
the Group’s
for
responsible
finances,
to other
in addition
aspects of the business, including
risk
property
insurance and human
matters,
resources.
management,
There
is a formal schedule of
matters specifically reserved for the
Board, in addition to the formal
matters required to be considered
by the Board under the Companies
Act. This
includes matters
relating to:
list
a) strategy and policy;
acquisition and divestment
b)
proposals;
Jersey Oil and Gas plc
approval of major capital
c)
investments;
d) risk management policy;
from
proposals
e)
the Audit
the Remuneration
Committee,
Committee and the Nomination
Committee;
f) significant financing matters; and,
statutory
g)
shareholders.
reporting
to
which
At the formal meetings of the Board
is prepared by the
an agenda
includes
Chairman
presentations by each of
the
Executive Directors together with
reports and recommendations from
the relevant sub-committees of the
Board. These Board meetings are
typically preceded by a presentation
by the Group’s Board Advisor, Dr
Chris Haynes, OBE FREng CEng
FIMechE FIEAust, together with a
presentation
senior
management on the progress of the
GBA development.
by
17
Jersey Oil and Gas plc
Board Committees
The Group operates an Audit Committee, a Remuneration Committee and a Nomination Committee, each
comprised of Non-Executive Directors.
Audit Committee
Chair: Marcus Stanton, Other Members: Frank Moxon, Les Thomas
Under its terms of reference, the Audit Committee is required to meet at least twice a year, at which executive
directors may attend by invitation, and its responsibilities include:
▪ Monitoring the independence and objectivity of the External Auditors;
▪ Reviewing and approving the External Auditor’s terms of engagement, scope of work, fees, the findings
arising from the external audit work and external audit performance;
▪ Monitoring the integrity of the Group’s published financial information;
▪ Reviewing the risk identification and risk management processes of the Group; and
▪ Reviewing the Group’s procedures to prevent bribery and corruption in addition to ensuring that
appropriate whistleblowing arrangements are in place.
Due to the current size of the business, it is not considered appropriate to have an internal audit function.
Remuneration Committee
Chair: Frank Moxon, Other Members: Marcus Stanton, Les Thomas
Under its terms of reference, it is required to meet at least twice a year and its responsibilities include:
▪ Determining and agreeing with the Board the broad policy for the remuneration of the Executive Directors;
▪ Determine the individual remuneration package of each Executive Director;
▪ Review all share incentive plans; and
▪ Recommending option grants for the Executive Directors and other employees, as considered appropriate.
No Director is involved in deciding their own remuneration. The Non-Executive Directors’ remuneration is
decided by the Executive Directors.
Nomination Committee
Chair: Frank Moxon, Other Members: Marcus Stanton, Les Thomas
Under its terms of reference, it is required to meet at least twice a year and its responsibilities include:
▪ Evaluating the balance of skills, experience and diversity on the Board; and
▪ Approving candidates for Board vacancies, save for the appointment of the Chairman of the Board or the
Chief Executive Officer, which are matters for the whole Board.
Due to the size of the Group, no meetings of the Nomination Committee were held during 2021 as its functions
have been properly carried out as part of the work of the Remuneration Committee and the Board.
18
2021 Board and Committee Meeting Attendance
Jersey Oil and Gas plc
Board
Meetings
Audit
Committee
Remuneration
Committee
Nominations
Committee
Held Attended Held Attended Held Attended Held Attended
Appointed 13 Apr. 21
Resigned 20 Nov. 21
Resigned 20 Nov. 21
Appointed 22 Nov. 21
7
9
9
9
6
6
2
6
9
9
9
6
6
2
2
3
3
3*
3*
3*
-
2
3
3
3*
3*
3*
-
2
4
4
-
-
-
-
1
4
4
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-Executive Directors
L J Thomas
M J Stanton
F H Moxon
Executive Directors
J A Benitz
R J Lansdell
V J Gibbs
G A Forbes
* By invitation
Les Thomas,
Non-Executive Chairman
27 April 2022
19
SUSTAINABILITY REPORT
Our Sustainability Approach
JOG began its sustainability journey
in 2019 with the foundation of three
core ESG aims:
▪ Establish appropriate criteria for
to ensure
the
all activities
business
environmentally
is
conscientious and perceived as a
progressive and market-leading
entity
▪ Ensure respectful treatment of all
JOG’s stakeholders
▪ Build upon corporate ethics and
values via open and transparent
business practices
Since
then, our Strategy has
continued to evolve on a holistic
basis, to ensure our asset base
‘walks the
from an ESG
perspective.
talk’
the
and
ideas
As
concepts
surrounding ESG continue to gather
momentum, JOG’s sustainability
activities are centred around:
learning
and
Continuous
1)
knowledge building
(particularly
surrounding technology and policy
evolution);
2) Third-party data to assess for
materiality and historical concerns
international
such as
standards,
partnerships
/collaborations;
reports,
and
3) Developing our own
assessment tool; and
internal
4) Both
company engagement.
inter-and
intra-related
levers
Sustainable
Our Sustainability Progress
implement
2021 saw the Group
in the
critical operational
form of our inaugural Carbon Policy,
a
Supply Chain
Management (SSCM) System, and
the extension of our ESG Risk
Management System to align with
the
the
recommendations of
Taskforce for Climate-Related
Jersey Oil and Gas plc
Financial Disclosures (TCFD). These
processes
and management
systems have been designed with
the future in mind to ensure their
to
flexibility as JOG continues
investigate a broad range of current
and future work scopes.
▪ To date we have had no lost time
incidents and no breaches
relating to safety, security or the
environment
▪ No
▪ Our female to male employee
ratio has improved from 1:11 in
2019 to 1:4 in 2021
labour
infringements or
breaches were identified in any
area of operation during 2021
▪ In 2021 JOG actively engaged
with the QCA for the fourth
consecutive year and received a
clean audit
▪ The Group has not been involved
in any legal cases, investigations
or proceedings relating to bribery
or corruption
▪ We continue to ensure strong
emphasis on sustainability and
net zero as we progress the range
of GBA development options
Carbon Policy
We recognise that commitment to a sustainable and lower carbon energy future is central to delivering our vision.
The management of carbon emissions and the commitment to low carbon targets and initiatives are integral to
JOG’s operational objectives, corporate structure, company values and culture.
The Carbon Policy confirms our commitment to risk managed growth, which will involve reducing our carbon
footprint to the lowest possible level for the benefit of our shareholders and other stakeholders, as outlined by our
materiality assessment.
20
Jersey Oil and Gas plc
JOG’s
supply and
includes
customer chains as it evolves into
an active UKCS operator
▪ All existing JOG operations to be
carbon neutral by the point of
first oil for Scope 1 and Scope 2
emissions
▪ Where the use of combustion
equipment is unavoidable, fully
disclose the justification for this
choice and demonstrate
full
alignment with this policy
the
▪ Source
largest possible
percentage
renewable
of
electrical power in the energy
mix for all JOG operated sites,
both onshore and offshore,
demonstrably
this
where
presents
lifecycle
the best
emissions profile and asset value
▪ Invest in accredited and, where
possible, local carbon capture or
offset to support the UK’s Net
Zero ambitions
▪ Complete pre-investment due
diligence and climate resilience
potential
planning
for
acquisitions, mergers, or
joint
ventures
all
▪ Ensure climate related risks and
opportunities, including cost of
emissions through trading and
taxation, are incorporated into
JOG’s financial decision-making
process
▪ Actively engage supply and
to quantify
customer chains
carbon emission and influence
their reduction
Monitoring and Reporting
Scope 1, 2 and material Scope 3
emissions will be identified through
the scrutiny of JOG’s operational
21
Through this Carbon Policy, as well
as the strategies and programmes
that stem from it, JOG will seek to
position itself as an oil and gas
in the energy
company
transition on the UKCS.
leading
and
understanding
JOG’s
application of low carbon emissions
initiatives and
innovation are
founded in the extensive oil and gas
expertise of its management team
and from trusted external advisers.
Scope
The Carbon Policy applies to all of
JOG’s current assets and will
potentially be applied through the
addition of other assets, if and when
emissions
Carbon
acquired.
management
considered
is
throughout the asset lifecycle, from
concept selection, development,
operations, and decommissioning.
associated with
JOG will continue to work towards
identifying Scope 1, 2 and material
Scope 3 emissions (internationally
recognised definitions developed by
the GHG Protocol) and minimising,
measuring and report Scope 1 and 2
its
emissions
operations on an absolute basis. Key
to this will be the consideration and
application of pioneering solutions
to carbon management. These will
be assessed through a rigorous
and
management
operational process
to ensure
sustainable value is realised from
JOG’s assets.
system
Management
Carbon emissions minimisation and
climate change resilience are an
executive, board-level responsibility
and are included in corporate risk
and opportunity identification and
management processes.
JOG actively engages with investors
on climate change resilience and
carbon emissions related risks and
opportunities,
positively
differentiate itself from its peers.
to
Organisational Arrangements
Emissions reduction initiatives are
integrated
into operational and
investment decisions at all levels of
the organisation. JOG is creating a
workplace culture of sustainability
and we evaluate carbon emissions
are
possible
wherever
incentivised
reduce
to actively
these.
and
Climate Targets
To support the energy transition
and
wider
facilitate
decarbonisation, JOG will comply
with the following requirements/set
the following targets:
▪ Full compliance with all current
future emissions-related
and
laws and regulations in the UK
▪ Emissions will be recorded and
reported in line with all applicable
UK emissions related legislation
and
the
line
recommendations of the TCFD
on an annual basis
with
in
▪ Scope 1, 2 and material Scope 3
emissions will be
identified
through the scrutiny of JOG’s
operational
both
offshore and onshore. This
activity
activity both offshore and onshore.
This
includes JOG’s supply and
customer chains as it evolves into an
active UKCS operator.
Once identified, emission will be
recorded and reported in line with
all applicable UK emissions related
legislation.
an
considers
as
regulatory
JOG
compliance
entry-level
approach to emissions disclosure.
JOG is transparent in its approach to
carbon
incorporating
the
considerations
investment
will
cycle
communicate updates on progress
and outcomes with its partners and
investors through both formal and
informal mechanisms,
including
annual and interim reports.
throughout
and
JOG has undertaken analysis of the
requirements of the TCFD and will
report the required disclosures in
line with the recommendations of
the TCFD. This will include strategy,
governance,
risk management
approach and metrics around
climate change to investors and
other stakeholders, on an annual
basis.
Conclusion
JOG believes responsibly sourced
and produced hydrocarbons will be
fundamental to a successful global
energy transition. JOG is committed
to differentiating
itself as a
sustainable and responsible 21st
century oil and gas company. This
policy is central to the delivery of
this ambition. It will be reviewed and
updated as appropriate and signed
by JOG’s Chief Executive Officer.
Chain
Supply
Sustainable
Management
While the topics of health, safety
and environmental issues have been
a constant aspect of procurement
and supply chain management in
the oil and gas
the
emergence of new regulations and
expectations
changing
new
exposes
societal
companies
industry,
to
Jersey Oil and Gas plc
▪ Environmental
risk
emissions activities with
scope for reduction
– high
little
▪ Safety risk – high occupational
health and safety exposure due
to the nature of the work involved
risk – previous
related
ESG
the
suffered
▪ Reputational
high-profile
incidents
contractor
by
▪ Governance risk – contractor
works globally with differing
regional approaches to ESG
▪ Social
risk
–
contractor’s
activities have the potential to
interact with or
impact the
general public.
for
ESG Risks and Opportunities
We have both a top-down and
bottom-up approach to risk and
opportunity oversight. This ensures
we create a consistent, scalable, and
auditable means
the
identification and management of
emerging risks and opportunities,
both internal and external, to JOG’s
future operations, at project level
and business
JOG’s
Management Team convenes for
dedicated ESG risk and opportunity
reviews twice a year. The outputs
are reported to the Board of
Directors and to individual business
units in the form of KPIs to manage
risks, including climate risks and
opportunities, on an ongoing basis.
level.
challenges. As part of
JOG’s
ongoing commitment to the UN
Global Compact 10 Principles and
the Group’s own Climate Targets,
to
saw an opportunity
JOG
beneficially
ESG
commitments and performance in
the selection process and ongoing
contractor incentivisation.
utilise
Major Contracts Sustainability Policy
Points’
process
‘Decision
to ensure
As JOG moves to becoming a future
North Sea Oil and Gas producer, this
Major Contacts Sustainability Policy
aims to extrapolate how the Group’s
ESG objectives can be implemented
across our wider supply chain. It has
been developed by considering
several
in
collaboration with JOG ESG and
HSE specialists
the
direction is representative of the
winder aims and objectives of the
GBA Project. The pre-award
assessment
which
accompanies the Policy focuses on a
contractor’s
in
understanding ESG and their level
of ESG commitment. The Policy
requires contractors to commit to
the United Nations Global Compact
(UNGC) with the overall aim of
aligning operations from an ESG
perspective throughout the supply
chain. The Group also accounts for
other ESG commitments when
UNGC alignment is not possible for
a contractor. Once awarded, JOG
will continue to drive the continuous
improvement of ESG performance
in its supply chain through ongoing
engagement and contract-specific
targets.
maturity
ESG Risk-led Approach
Each individual contract for goods
and/or services will bring a level of
risk to JOG. As with health, safety
and environmental risk, JOG looks
to assess and reduce ESG risk to as
low as reasonably practicable for
the GBA project. While specific risks
through JOG’s
will be defined
risk
and
strategy
assessment
risks contractors
likely
process,
could bring to JOG include:
22
risks
The Board’s Role in Risk Oversight
Risk oversight is an integral part of
JOG’s Board of Directors role, and
the
JOG are
faced by
deliberated throughout the year.
Responsibility for risk management
is distributed amongst the Board as
supported by
a whole
risk
JOG’s
management.
management framework provides
an effective tool
for executive
oversight of risk mitigation.
and
Strategic, operational, financial and
hazard risks, as well as management
Jersey Oil and Gas plc
successful conclusion, the Group’s
CCO is responsible for managing
the overall process.
of their likelihood and impact, the
perceived trend for each risk, and
the measures being
to
taken
monitor and manage such risks.
Risk Matrix and Policy
JOG’s Risk Management Policy
mandates
risk and
that every
opportunity has an owner assigned
its ongoing
and accountable for
management,
the
development and implementation
their mitigation, each with
of
individual owners accountable for
action implementation through to
including
23
ESG Risk and Opportunity Overview
Jersey Oil and Gas plc
Description & Impact
Mitigation
Risk &
Opportunity
Policy &
Regulation
Policy &
Regulation
Policy &
Regulation
Implementation of carbon
price/tax which may increase
operational costs and reduce
overall profit from the GBA
Implementation of methane tax
which may increase operational
costs and reduce overall profit
from the GBA
Changes to policies, law, and
regulations due to
decarbonisation agenda with
cost impact to the Group
Policy &
Regulation
Diminished attractiveness of
hydrocarbon projects to
prospective investors due to
new investment criteria
Develop and implement low-carbon exploration,
development, and production practices.
Apply internal carbon price and initiatives.
Action Carbon Policy aims such as offsets and
voluntary emission programmes.
Monitor technological improvements regarding
associated gas and routine flaring. Aim to utilise any
associated gas produced in power generation.
Monitor development, conduct stress testing, set
internal standards, voluntary alignment, and
education.
Consult industry bodies for educational material
which can be used to put a balanced position on
energy transition & can be used to educate internally.
Opportunity: JOG actively fosters a sustainable
corporate culture.
JOG ensures it has open and transparent
relationships with its stakeholders via multiple
communication routes.
Rigorous stress testing and audits.
Opportunity: We have conducted life-cycle analyses,
developed emission targets and aim for the GBA to
be a low carbon development.
JOG conducts Scenario analysis, R&D, climate-
related energy targets/reports, and stress testing.
Technology /
Market Disruptions
Technology /
Market Disruptions
Technological advances reduce
the cost of renewables and long-
term energy storage resulting in
reduced oil demand
Electric vehicles (EVs) reach cost
parity with internal combustion
engines sooner than expected
resulting in reduced oil demand
Opportunity: Electricity and power supply still
required, JOG to support the shift to electrification
during the energy transition via the provision of
responsibly produced hydrocarbon products.
Technology /
Market Disruptions
Rapid energy efficiency
improvement scenario leading
to reduced oil demand
Consider modular technology, which is easy to
upgrade, as well as R&D. Monitor technology
development.
Societal Shift /
Demography
Reduced talent attraction
Proactive local engagement and sponsorship of
STEM activities.
24
DIRECTORS’ REPORT
The Directors present their report
together with the audited Group
and Company financial statements
for the year ended 31 December
2021.
Annual General Meeting
The Annual General Meeting will be
held on 26th May 2022 as stated in
the Notice of Meeting.
Results and Dividends
The Group’s loss for the year was
£4.2m (2020: loss of £2.8m). The
Directors do not recommend the
payment of a dividend (2020: Nil).
Going Concern
is required to have
The Group
sufficient resources to cover the
expected running costs of the
business for a period of at least 12
months after the issue of these
financial statements. Further to
completion of the detailed studies in
connection with the GBA Concept
Select
work
contracted
programmes, there are currently no
firm work commitments on any of
our licences, other than ongoing
Operator overheads and
licence
fees. Other work that the Group is
undertaking in respect of the GBA
licences and surrounding areas is
modest relative to its current cash
reserves. The Group’s current cash
reserves are therefore expected to
more than exceed
its estimated
in all reasonable
cash outflows
these
on
Based
scenarios.
circumstances, the Directors have
considered it appropriate to adopt
concern basis of
the going
its
preparing
in
accounting
Consolidated Financial Statements.
comprise
Financial Instruments
financial
The Group’s principal
cash
instruments
balances, short-term deposits and
receivables or payables that arise
through
the normal course of
business. The Group does not have
any derivative financial instruments.
The financial risk management of
the Group is disclosed in note 4 of
Financial
the
Statements.
Consolidated
the
and
Board Committees
Audit
on
Information
Remuneration
Committee,
Nomination
Committee
Committee
the
in
Corporate Governance section, the
Audit Committee Report and the
Remuneration Report contained in
this Annual Report.
included
is
Disclosure of Information to the
Auditors
Each of the Directors at the date of
approval of this report confirms
that:
(1) So far as the Director is aware,
there
relevant audit
information of which the Group’s
auditors are unaware; and
is no
(2) Each Director has taken all the
steps that they ought to have
taken as a Director in order to
make themselves aware of any
relevant audit information and to
the Group’s
establish
that
that
auditors are aware of
information.
This confirmation
is given and
should be interpreted in accordance
with the provisions of s418 of the
Companies Act 2006.
Jersey Oil and Gas plc
of
the
Indemnity
Directors’ Third Party
Provisions
During the year and to the date of
approval
financial
statements, the Group maintained
indemnity insurance for its Directors
in
and Officers against
respect of proceedings brought by
third parties, subject to the terms
and conditions of the Companies
Act 2006.
liability
business
depends
Employees
The
upon
maintaining a highly qualified and
well-motivated workforce and every
effort is made to achieve a common
awareness of the financial and
affecting
factors
economic
The Group
performance.
is
to being an equal
committed
opportunities
and
engages employees with a broad
range of skills and backgrounds.
employer
Independent Auditors
A
reappoint
to
resolution
PricewaterhouseCoopers LLP as
Auditors will be proposed at the
forthcoming
General
Meeting at a fee to be agreed in due
course by the Audit Committee and
the Directors.
Annual
Nominated Adviser & Stockbrokers
The Group’s Nominated Adviser is
Strand Hanson Limited, and its Joint
Brokers are Arden Partners plc and
finnCap Ltd.
Share Capital
At 31 December 2021, 32,554,293
(2020: 21,829,227) ordinary shares
of 1p each were issued and fully
paid. Each ordinary share carries
one vote.
25
Jersey Oil and Gas plc
Directors’ Interests
The beneficial and other interests of the Directors holding office during the year and their families in the shares of
the Company at 31 December 2021 were:
1p Ordinary Shares
As at 31 Dec. 2021
As at 31 Dec. 2020
Shares
Vested Options
Shares
Vested Options
L J Thomas
Appointed 13 Apr. 2021
25,000
-
-
-
M J Stanton
F Moxon
J A Benitz
-
-
-
110,411
87,026
53,333
29,999
688,892
266,666
G A Forbes
Appointed 22 Nov. 2021
-
-
100,000
84,935
627,142
-
R J Lansdell
Resigned 20 Nov. 2021
1,066,601
226,666
1,013,590
V J Gibbs
Resigned 20 Nov. 2021
22,560
176,666
16,500
101,570
55,000
430,000
-
430,000
190,000
Substantial Shareholders
At 31 December 2021, notification had been received by
the Company of the following who had a disclosable
interest in 3% or more of the nominal value of the
ordinary share capital of the Company:
Hargreaves Lansdown Asset Mgt.
12.75%
Mr J Baldwin
Interactive Investor
Amati Global Investors
Janus Henderson Investors
HSBC James Capel
SVM Asset Management
Quilter Cheviot Inv Mgt
Halifax Share Dealings
Ronald Lansdell
AJ Bell Stockbrokers
Barclays Wealth Management
6.51%
5.97%
5.05%
3.79%
3.64%
3.63%
3.48%
3.30%
3.28%
3.27%
3.22%
None of the current directors hold 3% or more of the
nominal value of the ordinary share capital of the
company.
Up to date details and changes of substantial
shareholders are contained on the Company’s website
(www.jerseyoilandgas.com).
On behalf of the Board
Graham Forbes
Chief Financial Officer
27 April 2022
26
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF
THE FINANCIAL STATEMENTS
Jersey Oil and Gas plc
The Directors are responsible for
preparing the Annual Report and
the
in
accordance with applicable law and
regulation.
statements
financial
Company law requires the Directors
to prepare financial statements for
each financial year. Under that law
the Directors have prepared the
financial statements in accordance
with United Kingdom Generally
Accepted Accounting
Practice
Accounting
(United
Standards, comprising FRS 101
“Reduced Disclosure Framework”,
and applicable law).
Kingdom
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
In
preparing the financial statements,
the Directors are required to:
▪ Select
accounting
policies and then apply them
consistently;
that period.
suitable
for
departures
explained
statements;
disclosed
the
and
financial
in
▪ Make
and
judgements
accounting estimates that are
reasonable and prudent; 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
safeguarding the assets of the
Company and hence for taking
reasonable steps for the prevention
and detection of fraud and other
irregularities.
The Directors are also responsible
for keeping adequate accounting
records that are sufficient to show
and explain the Group’s transactions
and disclose with
reasonable
accuracy at any time the financial
position of the Group and enable
them to ensure that the financial
statements
the
Companies Act 2006.
comply with
▪ State whether applicable United
Kingdom Accounting Standards,
comprising FRS 101 have been
followed, subject to any material
The Directors are responsible for
the maintenance and integrity of
the company’s website. Legislation
in the United Kingdom governing
the preparation and dissemination
of financial statements may differ
from
other
jurisdictions.
legislation
in
Directors’ Confirmations
In the case of each Director in office
at the date the Directors’ Report is
approved:
▪ So far as the Director is aware,
there
relevant audit
information of which the Group’s
auditors are unaware; and,
is no
▪ They have taken all the steps that
they ought to have taken as a
Director
to make
in order
themselves aware of any relevant
information
to
and
audit
the Group’s
establish
that
auditors are aware of
that
information.
Graham Forbes
Chief Financial Officer
27 April 2022
27
AUDIT COMMITTEE REPORT
Introduction
This Audit Committee Report has
the Audit
been prepared by
Committee and approved by the
Board.
Membership & Meetings Held
The Audit Committee is chaired by
Marcus Stanton and
its other
members are Les Thomas and
Frank Moxon (both Non-Executive
Directors). The Committee formally
met three times during 2021, linked
both to events
in the Group’s
financial calendar and to certain ad
hoc matters. In addition, an informal
meeting of the committee was held
in connection with the 2021 Annual
Accounts,
Report
approximately one week before a
formal meeting to discuss the same.
In order to encourage greater
understanding and involvement in
the work of the Audit Committee,
the Chief Executive Officer, the
Chief Financial Officer and the Chief
Commercial Officer
attended
certain of these meetings. The
external audit partner also attended
the
in
informal meeting held
connection with the Group’s 2021
Report and Accounts.
and
Role of the Audit Committee
The Terms of Reference for the
Audit Committee, which have been
prepared in accordance with the
QCA Code, provide
the
Committee’s main responsibilities
to include:
▪ Monitoring the
independence
for
and objectivity of the Auditors,
▪ Reviewing and approving the
terms of
external auditor’s
engagement, scope of work,
fees, the findings arising from the
external audit work and external
audit performance,
▪ Monitoring the integrity of the
financial
published
Group’s
information,
▪ Reviewing the risk identification
and risk management processes
of the Group, and
▪ Reviewing
Group’s
the
procedures to prevent bribery
in addition to
and corruption
appropriate
ensuring
that
arrangements
whistleblowing
are in place.
Internal Audit
Due to the current size of the
is not considered
business,
it
appropriate to have an
internal
audit function.
Key Areas of Focus
The Committee’s particular areas of
focus during the year were as
follows:
▪ Review of the 2021 Annual
Report and the accounting for
our licence interests,
▪ Review of the interim results for
the six months ended 30 June
2021;
▪ Review of the 2021 cash budget
and preparation of the 2022 cash
forecast;
▪ Review, update and revision of
the Group’s Financial Reporting
policies and procedures;
▪ Review of the 2021 Annual report
the
and Accounts,
significant
consideration
and
judgements,
the
internal
preparation of
and
concluding on going concern and
the recoverability of intangible
assets; and
including
of
estimates
in
these,
controls
▪ Introduction of the new Chief
Financial Officer and Chief
Commercial Officer
the
various financial policies and
to
Jersey Oil and Gas plc
procedures as operated by the
Group.
The Committee also considered the
independence and objectivity of the
PwC audit function. Given the
relatively small amount of non-audit
services provided during 2021 and
with the PWC engagement partner
in his third year as engagement
partner (as compared to the five
years considered appropriate to
rotate an engagement partner), the
Committee is of the view that PwC
can continue to be considered
independent.
being
Management of Risk
As in previous years, it was decided
to continue with the Group practice
of the oversight of risk, and risk
management,
the
responsibility of the Board as a
whole,
sub-
committee. This is put into effect by
the preparation of a Risk Register,
maintained
Chief
by
is
Commercial Officer, which
presented and discussed at Board
meetings.
rather
than
the
a
Marcus Stanton
Chairman of the Audit Committee
27 April 2022
28
REMUNERATION REPORT
The
to
Introduction
This Remuneration Report has been
the Remuneration
prepared by
Committee and approved by the
Committee
Board.
is
committed
transparent and
quality disclosure. Our report for
2021 sets out the details of the
the
remuneration
Directors,
its
implementation and discloses the
amounts paid during the year. The
remuneration report has not been
audited.
policy
describes
for
Membership & Meetings Held
The Remuneration Committee is
chaired by Frank Moxon and its
other members are Les Thomas
(appointed April 2021) and Marcus
Stanton
Non-Executive
Directors). The Committee met
formally four times during 2021 in
addition to carrying out significant
in respect of the Board
work
restructuring
in
November 2021.
announced
(both
Remuneration Policy
The Committee aims to ensure that
total remuneration
is set at an
appropriate level for the Group and
its operations.
The objectives and core principles of
the remuneration policy are to
ensure:
▪ Remuneration levels support the
Group strategy;
▪ An appropriate
link between
performance and reward;
▪ Alignment of Directors, senior
management and shareholder
interests;
▪ Linking of long-term incentives
to shareholder returns;
retention
▪ Recruitment,
and
motivation of individuals with the
skills, capabilities and experience
to achieve Group objectives; and,
▪ Good teamwork by enabling all
the
to share
employees
success of the business.
in
There are four possible elements
that can make up the remuneration
packages for Executive Directors,
senior
and
management
employees:
▪ Basic annual salary or fees;
▪ Benefits in kind;
▪ Discretionary annual bonus; and,
▪ A long-term incentive plan, the
Jersey Oil and Gas PLC 2016
Management
Enterprise
Incentive
and
Unapproved Share Option Plan
(the “Old Share Option Plan”),
replaced on 23
which was
November 2021 with the Jersey
Oil and Gas Plc 2021 Employee
Share Option Plan (the “New
Share Option Plan”).
(“EMI”)
Performance of the Group in 2021
2021 was a particularly active year
for the Group from both a corporate
and operational perspective.
the
geotechnical
baseline
Completion of a £16.61m (gross)
equity raise in the first half of the
year placed the Group in a strong
position to continue progressing
activities on the GBA development
and carry forward the project into
the farm-out phase of activities.
Work was completed during the
year on
technical studies
required to engineer the platform
development concept and on the
and
offshore
environmental
data
acquisition surveys, the latter being
an important input into the next
stage of development engineering
activities and the preparation of the
Environmental Statement that
is
submitted as part of the Field
Development
process.
Importantly, all this work has served
to facilitate the on-going farm-out
process and the evaluation of the
wider set of potential alternative
development solutions that are
being assessed in collaboration with
various counterparties. Concluding
a successful GBA farm-out is the
next key step required to drive the
Plan
Jersey Oil and Gas plc
Group forward and unlock the long-
term shareholder value that resides
within the oil and gas resource base
that JOG has established over
recent years.
Key Activities in 2021
▪ Recommended option awards to
Directors and employees which
were granted in March 2021 and
to a newly appointed director
and senior employee which were
granted in November 2021;
▪ Approved the vesting of the sole
tranche of share options granted
to directors in January 2018 and
the second tranche of options
granted
and
employees in January 2019, any
relevant performance conditions
having been deemed by the
Committee to have been met;
directors
to
▪ Reviewed
on
and
made
recommendations
the
remuneration of the new Chief
Financial Officer and Chief
Commercial Officer (appointed
November 2021) and the exit
arrangements for R J Lansdell
and V J Gibbs (both resigned
November 2021); and,
▪ Recommended the adoption of
the New Share Option Plan and a
corresponding Jersey Oil and Gas
Plc 2021 Non-Employee Share
Option Plan.
to
Plan
During
adviser
Advisers
H2glenfern Limited (“h2glenfern”)
was appointed in 2017 to act as
the
independent
Committee.
2021
h2glenfern advised the Committee
on the terms of the New Share
Option
the
remuneration of the new Chief
Financial Officer
Chief
Commercial Officer appointed in
November 2021. The Committee is
of the view that h2glenfern provides
independent remuneration advice
to the Committee and does not
have any connections with the
its
Group
that may
impair
and
and
on
29
H2glenfern
independence.
reported directly to the Committee
and provided no other services to
the Group.
Basic salary
The basic salaries of Executive
Directors are normally determined
by the Committee around the end of
each year with any changes usually
taking effect from 1 January of the
following
are
reviewed and adjusted taking into
individual performance,
account
market
sector
and
factors
conditions.
Salaries
year.
The annual salaries of J A Benitz and
R J Lansdell (resigned 20 November
2021) as at 1 January 2021 were
both £250,000 (2020: £250,000).
The salary of V J Gibbs (resigned 20
November 2021) as at 1 January
2021 was
(2020:
£220,000). The annual salary of G A
Forbes (appointed 22 November
2021) is £240,000.
£220,000
for
Given the peer group alignment of
Executive
remuneration
Directors in 2019, the culmination of
concept select work during 2020
and early 2021 and plans to seek a
partner for the Greater Buchan Area
project (“the GBA Sales Process”)
which will determine, and could
significantly
increase, the future
scale and direction of the Group’s
business activities, no remuneration
review was conducted by
the
Committee during 2021.The next
review of Executive Director salaries
is likely to take place after the
culmination of
the GBA Sales
Process.
Benefits in Kind & Cash Equivalents
Benefits provided
to Executive
Directors during the year comprised
life
protection
income
and
and private health
insurance
insurance. In addition, J A Benitz
received a 10% matching pension
contribution while G A Forbes, R J
Lansdell and V J Gibbs took an 8%
cash alternative.
Directors
Discretionary Bonuses
No bonus awards were made to
Executive
for
performance during 2021.
The
Committee will review performance
on completion of the GBA Sales
interim
Process and may award
cash bonuses in the event of a
successful outcome.
the challenges of
Recognising
transitioning to working from home
during much of 2021 as a result of
the COVID-19 pandemic and their
in
dedication and commitment
continuing essential concept select
work, a nominal cash bonus was
paid to employees in December
2021, but not to the Executive
Directors.
Jersey Oil and Gas plc
Plan, Directors
performance
schedules
Share Option Plan
Under the terms of the Old Share
Option
and
employees are eligible for awards.
EMI options are subject to an
limit of £3m and an
aggregate
limit of £250,000 by
individual
market
shares.
of
value
Performance conditions are not
required but options can be granted
conditions,
with
vesting
both.
or
Performance conditions can apply
to individual tranches within grants.
Performance conditions can be
amended, provided they are still
deemed
fair measure of
performance and not materially
more easy or difficult to satisfy as a
result. Upon any change of control,
all options vest
in full and any
performance conditions are not
applied.
a
The terms of the New Share Option
Plan (adopted on 23 November
2021) are substantially the same as
the previous plan save for some
primarily
administrative
amendments and the removal of
EMI provisions since JOG no longer
meets
eligibility
requirements.
relevant
the
New share option awards were
made to Directors in March 2021
and to a newly appointed Director in
2021.
November
30
Jersey Oil and Gas plc
Executive Directors’ Service Contracts
The principal termination provisions of the Executive Directors’ service contracts, as amended by any relevant deed
of variation, are summarised below. Executive Directors’ service contracts are available to view at the Company’s
registered office.
Effective Contract Date
Unexpired Term
Notice Period
V J Gibbs
11.03.19
Resigned 20.11.21
12 months
G A Forbes
22.11.21
Rolling Contract
3 months
J A Benitz
11.03.19
Rolling Contract
12 months save
that,
certain
in
circumstances
(including material
changes
to
contract terms or
non-consensual
the
relocation),
Executive
may
provide 30 days’
notice
R J Lansdell
11.03.19
Resigned 20.11.21
12 months save
that,
certain
in
circumstances
(including material
changes
to
contract terms or
non-consensual
the
relocation),
Executive
may
provide 30 days’
notice
Non‐Executive Directors’ Fees
The Non-Executive Directors receive an annual fee for carrying out their duties and responsibilities. The level of such
fees is set and reviewed annually by the Board, excluding the Non-Executive Directors.
During 2021, the annual fees for L J Thomas (Non-Executive Chairman), F H Moxon (Senior Independent Director)
and M J Stanton (Non-Executive Director) were:
Role
L J Thomas Non-Exec. Director
F H Moxon Non-Exec. Director
M J Stanton Non-Exec. Chairman
Fee
New Role
£40,000 Non-Exec. Chairman
£45,000
£65,000 Non-Exec. Director
Fee
£60,000 Nov. 2021
Senior Independent Director £50,000 Apr. 2021
£45,000 Nov. 2021
Date of Change
The fees of F H Moxon and M J Stanton had previously remained unchanged since November 2019. L J Thomas was
appointed a Non-Executive Director in April 2021.
Non-Executive Directors do not receive additional fees for acting as members of the Board’s various committees.
However, during 2021, F H Moxon and M J Stanton received £18,161 and £9,000 respectively in additional fees for
time spent, over and above their contractual time commitment, on matters relating to the November 2021
restructuring of the Board.
31
Non‐Executive Directors’ Letters of Appointment
The principal termination provisions of the Non-executive Directors’ letters of appointment, as amended by any
relevant deed of variation, are summarised below. Non-executive Directors’ letters of appointment are available to
view at the Company’s registered office.
Jersey Oil and Gas plc
L J Thomas
13.04.21
Rolling Contract
3 Months
No
M J Stanton
11.03.19
Rolling Contract
3 Months
No
F Moxon
11.03.19
Rolling Contract
3 Months
No
Date of Appointment
Unexpired Term
Notice Period
Loss of Compensation
Directors’ Emoluments
Year Ended 31 Dec. 2021
Year Ended 31 Dec. 2020
Presented in
£’000s
Salary(1)
/ Fees
Pension
Benefits
Exercise
of
Options(6)
Total
Salary /
Fees
Pension
Benefits
Total
Exercise
of
Options
J A Benitz
G A Forbes
Appointed Nov. 2021
R J Lansdell (2)
Resigned Nov. 2021
V J Gibbs (3)
Resigned Nov. 2021
Executive Directors
L J Thomas
Appointed Apr. 2021
M J Stanton(4)
F H Moxon(5)
250
29
247
225
751
31
84
73
Non-Exec. Directors
188
25
-
-
-
25
-
-
2
2
6
-
4
7
17
-
-
-
-
54
-
54
-
108
-
12
6
18
335
29
305
232
901
31
96
81
208
Total Directors
939
27
17
126
1,109
250
25
-
-
-
25
-
-
2
2
-
270
238
758
-
65
56
121
879
5
-
7
5
17
-
-
-
-
27
17
-
-
-
-
-
-
-
-
-
-
280
-
277
243
800
-
65
58
123
923
Notes:
1. Salary includes an 8% cash contribution as an alternative to a matching 10% pension contribution if elected.
2. Ronald Lansdell served as Chief Operating Officer until 19th November 2021 when JOG made several senior management and Board
changes. In addition to the salary stated above, salary in lieu of notice, benefits and settlement costs were accrued in the financial year
ended 31 December 2021 and have all now been fully settled. The total salary cost of the notice period was £270,000, of which £247,500 was
accrued, the social security relating to this amounted to £7,812 and accrued healthcare costs were £8,087. In addition, there was
compensation for loss of office of £135,000.
3. Vicary Gibbs served as Chief Financial Officer until 19th November 2021 when JOG made several senior management and Board changes. In
addition to the salary stated above, salary in lieu of notice, benefits and settlement costs were accrued in the financial year ended December
2021 and have all now been fully settled. The salary cost of the notice period was £237,600, the social security relating to this amounted to
£42,173 and accrued healthcare and life cover costs were £5,110. In addition, there was compensation for loss of office of £91,125.
4. Marcus Stanton’s remuneration comprised of his annual fee plus an additional £9,000 for time spent, over and above their contractual time
commitment, on matters relating to the November 2021 restructuring of the Board.
5. Frank Moxon’s remuneration comprised of his annual fee plus an additional £18,161 for time spent, over and above their contractual time
commitment, on matters relating to the November 2021 restructuring of the Board.
6. The amount of the gain on exercising share options calculated as the difference between market price of the shares on the day of exercise
and the price actually paid for the shares.
There were no bonus’ to Directors paid in 2021 (2020:nil)
32
Jersey Oil and Gas plc
Options held by Directors at 31 December 2021 are set out below.
Presented in ‘000s
Executive Directors
J A Benitz
At 110.0p (note 1)
At 200.0p (note 2)
At 175.0p (note 5)
At 210.0p (note 7)
G A Forbes (appointed Nov. 2021)
At 147.0p (note 9)
R J Lansdell (resigned Nov. 2021)
At 110.0p (note 1)
At 200.0p (note 2)
At 175.0p (note 5)
At 210.0p (note 7)
V J Gibbs (resigned Nov. 2021)
At 172.0p (note 3)
At 175.0p (note 5)
At 210.0p (note 7)
Non-Executive Directors
L J Thomas
F H Moxon
At 110.0p (note 1)
At 200.0p (note 2)
At 175.0p (note 6)
At 210.0p (note 8)
M J Stanton
At 4,300.0p (note 4)
At 110.0p (note 1)
At 200.0p (note 2)
At 175.0p (note 6)
At 210.0p (note 8)
Total
Exercisable
By
At 1 Jan
2020
Issued Exercised Lapsed At 31 Dec
Issued Exercised Lapsed At 31 Dec
2020
2021
29.11.21
29.01.25
17.01.26
18.03.28
23.11.28
29.11.21
29.01.25
17.01.26
18.03.28
14.11.25
17.01.26
18.03.28
-
29.11.21
29.01.23
17.01.24
18.03.26
12.03.21
29.11.21
29.01.23
17.01.24
18.03.26
180
180
70
-
430
-
-
180
180
70
-
430
150
40
-
190
-
20
20
15
-
55
2
40
40
20
-
102
1,207
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
180
180
70
-
430
-
-
180
180
70
-
430
150
40
-
190
-
20
20
15
-
55
2
40
40
20
-
102
1,207
-
-
-
110
110
350
350
-
-
-
110
110
-
-
75
75
-
-
-
-
15
15
-
-
-
-
20
20
680
(180)
-
-
-
(180)
-
-
(180)
-
-
-
(180)
-
-
-
-
-
(20)
-
-
-
(20)
-
(40)
-
-
-
(40)
(420)
-
-
-
-
-
-
-
-
-
-
-
-
-
(13)
(75)
(88)
-
-
-
-
-
-
(2)
-
-
-
-
(2)
(90)
-
180
70
110
360
350
350
-
180
70
110
360
150
27
-
177
-
-
20
15
15
50
-
-
40
20
20
80
1,377
Notes:
1. Granted on 29 November 2016 under the Old Share Option Plan. All the options have vested, were exercisable up to 29 November 2021 and
lapsed if not exercised by that date.
2. Granted on 29 January 2018 under the Old Share Option Plan. All the options have vested, are exercisable at any time up to 29 January 2025
and if not exercised by that date will lapse.
3. Granted on 14 November 2018 under the Old Share Option Plan. All the options have vested, are exercisable at any time up to 14 November
2025 and if not exercised by that date will lapse.
4. Granted on 13 March 2011 under an Individual Option Agreement. The options (to the extent that they have not lapsed) may be exercised at
any time after the date of grant.
5. Granted on 17 January 2019 under the Old Share Option Plan. All the options have vested, are exercisable up to 17 January 2026 and will
lapse if not exercised by such date.
6. Granted on 17 January 2019 under the Old Share Option Plan. All the options have vested, are exercisable up to 17 January 2024 and will
lapse if not exercised by such date.
7. Granted on 18 March 2021 under the Old Share Option Plan. Options vest in three equal tranches (one, two and three years from the date of
grant) and are subject to the satisfaction of certain performance conditions to be determined and interpreted at the discretion of the
Remuneration Committee. The first tranche has already vested. Subject to vesting and such performance conditions being met, the Options
are exercisable up to 18 March 2028 and will lapse if not exercised by such date.
8. Granted on 18 March 2021 under the Old Share Option Plan. Options vest in three equal tranches (one, two and three years from the date of
grant) and have no performance conditions. Subject to vesting, the new Options are exercisable up to 18 March 2026 and will lapse if not
exercised by such date.
9. Granted on 23 November 2021 under the New Share Option Plan. Options vest in three equal tranches (one, two and three years from the
date of grant) and are subject to the satisfaction of certain performance conditions to be determined and interpreted at the discretion of the
Remuneration Committee. On announcement of a farm-out in respect of the Group’s Greater Buchan Area (“GBA”) development project,
the Options will vest in full and become exercisable from such date. Subject to vesting and such performance conditions being met, the new
Options are exercisable up to 23 November 2028 and will lapse if not exercised by such date.
33
Shareholder Feedback
The objective of this report is to communicate the remuneration of the Directors and how this is linked to
performance. In this regard the Board is committed to maintaining an open and transparent dialogue with
shareholders and is always interested to hear their views on remuneration matters.
Jersey Oil and Gas plc
Frank Moxon
Chairman of the Remuneration Committee
27 April 2022
34
Jersey Oil and Gas plc
Independent auditors’ report to the
members of Jersey Oil and Gas Plc
Report on the audit of the financial statements
Opinion
In our opinion:
•
•
•
•
Jersey Oil and Gas Plc’s group financial statements and company financial statements (the “financial statements”)
give a true and fair view of the state of the group’s and of the company’s affairs as at 31 December 2021 and of the
group’s loss and the group’s cash flows for the year then ended;
the group financial statements have been properly prepared in accordance with UK-adopted international accounting
standards;
the company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice (United Kingdom Accounting Standards, comprising FRS 101 “Reduced Disclosure
Framework”, and applicable law); and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements, included within the Annual Report, which comprise: the Consolidated and
Company Statements Of Financial Position as at 31 December 2021; the Consolidated Statement Of Comprehensive
Income, the Consolidated and Company Statements Of Changes In Equity and the Consolidated Statement Of Cash
Flows for the year then ended; and the notes to the financial statements, which include a description of the significant
accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities under ISAs (UK) are further described in the Auditors’ responsibilities for the audit of the financial
statements section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Independence
We remained independent of the group in accordance with the ethical requirements that are relevant to our audit of the
financial statements in the UK, which includes the FRC’s Ethical Standard, as applicable to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Our audit approach
Overview
Audit scope
• We have performed a full scope audit of Jersey Petroleum Limited, the component which holds all licenses held by
the group, and the plc entity. Both components were selected due to their size and risk. We also performed audit
procedures on specified balances and transactions within Jersey Oil and Gas E&P Limited due to the financial
significance to the group consolidation. No audit work was performed outside of the UK. No other component auditors
or firms were involved in reporting for the purposes of the consolidated opinion.
Key audit matters
•
Impairment of Intangible Assets (group)
35
Jersey Oil and Gas plc
Materiality
• Overall group materiality: £350,000 (2020: £208,000) based on 1% of total assets.
• Overall company materiality: £200,000 (2020: £200,000) based on 1% of total assets.
• Performance materiality: £262,500 (2020: £156,000) (group) and £150,000 (2020: £150,000) (company).
The scope of our audit
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made subjective judgements, for example in respect of
significant accounting estimates that involved making assumptions and considering future events that are inherently
uncertain.
Key audit matters
Key audit matters are those matters that, in the auditors’ professional judgement, were of most significance in the 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) identified by the auditors, 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, and
any comments we make on the results of our procedures thereon, 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.
This is not a complete list of all risks identified by our audit.
Impairment of Intangible Assets (group) is a new key audit matter this year. Going Concern (group and company) and
Impact of Covid-19 on the financial statements (group and company), which were key audit matters last year, are no
longer included because of the funding position of the group and the Directors' ability to control and fund ongoing
operations for at least 12 months from the approval of the financial statements as well as our conclusion from the
directors' assessment of the impact of COVID-19 on the group’s financial statements that the likely impact of COVID-19
on the group's operations and financial statements is deemed to be insignificant.. Otherwise, the key audit matters
below are consistent with last year.
Key audit matter
Impairment of Intangible Assets (group)
As at 31 December 2021, the consolidated balance sheet
contained £21.5m of intangible exploration assets at 31 December
2021. In line with IFRS 6 'Exploration for and Evaluation of Mineral
Resources', management have assessed the intangible assets for
indicators of impairment. We have focused on this area given the
significance of the balance of intangible exploration assets as well
as management judgement involved in determining the existence
of impairment triggers under IFRS 6. Please refer to Note 1
'Significant accounting policies, Significant Accounting
Judgements and Estimates' and Note 10 'Intangible Assets'.
How our audit addressed the key audit matter
In auditing management’s impairment trigger assessment,
we performed the following:
•
•
•
•
•
•
Obtained and reviewed the relevant licence
agreements relating to the GBA (Greater
Buchan Area) assets;
Understood, corroborated and challenged
management’s plans and budgets for future
activity on the GBA licences;
Understood and assessed the status of the
GBA farm-out process as well as the group’s
interactions with the NTSA (North Sea
Transition Authority) including considering
whether these gave rise to any indicator that
the GBA licences will not be extended beyond
their current terms;
Assessed the objectivity and competence of
management’s external reserves experts as
well as the results of valuations performed on
the GBA assets for any indicators that the value
of intangibles may not be recoverable;
Considered other factors which could indicate
the existence of an impairment trigger including
commodity price movements and movements in
estimated reserves which could indicate that
the GBA assets may not be recoverable;
Assessed management’s disclosures contained
in the financial statements.
Based on our procedures, we concur with management’s
assessment that no indicators of impairment existed in
relation to intangible exploration assets at the year end.
36
Jersey Oil and Gas plc
We also consider the disclosures included in the annual
report to be reasonable, including management’s
judgement in relation to licence extension.
How we tailored the audit scope
We tailored the scope of our audit to ensure that we performed enough work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and
controls, and the industry in which they operate.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on the financial
statements as a whole, taking into account the structure of the group and the company, the accounting processes and
controls, and the industry in which they operate. The group financial statements are a consolidation of five components.
Additionally there are four dormant subsidiaries which do not significantly impact the group consolidated position. In
establishing the overall approach for the group audit, we determined the type of work that needed to be performed over
the components. We identified two financially significant components (Jersey Oil & Gas plc and Jersey Petroleum Limited)
that, in our view, required full scope audits due to their relative size in the group. The audit of these full scope components
was performed by the group engagement team in the UK. Together, the full scope components scoped into our audit
included 99% of the consolidated total assets of the group. We also performed testing on the group consolidation
adjustments as a separate component. As part of our planning procedures, utilising our knowledge of the group gained
in previous audits, we reviewed management’s climate change strategy and assessment of the risk with regards to the
potential impacts of climate change including the impact on future development activity on GBA in particular. We formed
our own view in concluding that climate risk is not considered to result in a significant audit risk in the context of the Group
and Company audits for the current year.
Materiality
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Overall
materiality
How we
determined it
Rationale for
benchmark
applied
Financial statements - group
£350,000 (2020: £208,000).
Financial statements - company
£200,000 (2020: £200,000).
1% of total assets
1% of total assets
A benchmark of total assets is deemed to be the most
appropriate measure used by shareholders in assessing the
performance of the group. This is based on users of the
financial statements focusing on the recoverable value of assets
on the balance sheet and the cash balance as this is what will
fund future development.
The allocation reflects the
Company's relative contribution to
the Group's total assets capped
due to the allocation provided in
the materiality calculations.
For each component in the scope of our group audit, we allocated a materiality that is less than our overall group
materiality. The range of materiality allocated across components was £40,000 - £320,000. Certain components were
audited to a local statutory audit materiality that was also less than our overall group materiality.
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 scope of our audit and the nature and extent of our testing of account balances, classes of transactions and
disclosures, for example in determining sample sizes. Our performance materiality was 75% (2020: 75%) of overall
materiality, amounting to £262,500 (2020: £156,000) for the group financial statements and £150,000 (2020: £150,000)
for the company financial statements.
37
Jersey Oil and Gas plc
In determining the performance materiality, we considered a number of factors - the history of misstatements, risk
assessment and aggregation risk and the effectiveness of controls - and concluded that an amount at the upper end of
our normal range was appropriate.
We agreed with those charged with governance that we would report to them misstatements identified during our audit
above £17,500 (group audit) (2020: £10,400) and £17,500 (company audit) (2020: £11,000) as well as misstatements
below those amounts that, in our view, warranted reporting for qualitative reasons.
Conclusions relating to going concern
Our evaluation of the directors’ assessment of the group's and the company’s ability to continue to adopt the going concern
basis of accounting included:
• Obtaining and challenging management’s downside scenario that underpin the going concern assessment,
corroborating operating cost assumptions to underlying support on a sample basis and challenging the
reasonableness of baseline operating costs.
• Checking the mathematical accuracy of management's cash flow forecast.
• Obtaining evidence of the opening cash position in April 2022
• Holding discussions with both finance and operational management regarding the future development plans.
• Performing sensitivity analysis over key assumptions which did not give rise to any significant risks.
• Obtaining representations from management confirming their proposed actions in a severe but plausible downside
case.
• Reviewing the disclosures contained in the financial statements.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the group's and the company’s ability to continue as a going
concern for a period of at least twelve months from when the financial statements are authorised for issue.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
However, because not all future events or conditions can be predicted, this conclusion is not a guarantee as to the group's
and the company's ability to continue as a going concern.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Reporting on other information
The other information comprises all of the information in the Annual Report other than the financial statements and our
auditors’ report thereon. The directors are responsible for the other information. Our opinion on the financial statements
does not cover the other information and, accordingly, we do not express an audit opinion or, except to the extent
otherwise explicitly stated in this report, any form of assurance thereon.
In connection with our audit of the financial statements, 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 audit, or otherwise appears to be materially misstated. If we identify an apparent material inconsistency or material
misstatement, we are required to perform procedures to conclude whether there is a material misstatement of the financial
statements or a material misstatement of the other information. 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 based on these responsibilities.
With respect to the Strategic report and Directors' Report, we also considered whether the disclosures required by the UK
Companies Act 2006 have been included.
Based on our work undertaken in the course of the audit, the Companies Act 2006 requires us also to report certain
opinions and matters as described below.
38
Jersey Oil and Gas plc
Strategic report and Directors' Report
In our opinion, based on the work undertaken in the course of the audit, the information given in the Strategic report and
Directors' Report for the year ended 31 December 2021 is consistent with the financial statements and has been prepared
in accordance with applicable legal requirements.
In light of the knowledge and understanding of the group and company and their environment obtained in the course of
the audit, we did not identify any material misstatements in the Strategic report and Directors' Report.
Responsibilities for the financial statements and the audit
Responsibilities of the directors for the financial statements
As explained more fully in the statement of directors' responsibilities in respect of the financial statements, the directors
are responsible for the preparation of the financial statements in accordance with the applicable framework and for being
satisfied that they give a true and fair view. The directors are also responsible for such internal control as they determine
is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s and 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 group or the company or to cease operations, or
have no realistic alternative but to do so.
Auditors’ 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 auditors’ 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.
Based on our understanding of the group and industry, we identified that the principal risks of non-compliance with laws
and regulations related to Petroleum Act 1998, and we considered the extent to which non-compliance might have a
material effect on the financial statements. We also considered those laws and regulations that have a direct impact on
the financial statements such as the Companies Act 2006. We evaluated management’s incentives and opportunities for
fraudulent manipulation of the financial statements (including the risk of override of controls), and determined that the
principal risks were related to potential management bias in disclosures relating to the future prospects of the company.
Audit procedures performed by the engagement team included:
• Enquiries made of management and internal legal counsel of their awareness of any instances of actual or potential
litigation and claims.
• Review of minutes of meetings of the Board of Directors
• Review of financial statement disclosures and testing to supporting documentation where applicable.
• Testing over journals posted by management to address the risk of management override of controls. This involved
testing of journals containing unusual amounts and unusual words.
There are inherent limitations in the audit procedures described above. We are less likely to become aware of instances
of non-compliance with laws and regulations that are not closely related to events and transactions reflected in the
financial statements. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not
detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
Our audit testing might include testing complete populations of certain transactions and balances, possibly using data
auditing techniques. However, it typically involves selecting a limited number of items for testing, rather than testing
39
Jersey Oil and Gas plc
complete populations. We will often seek to target particular items for testing based on their size or risk characteristics. In
other cases, we will use audit sampling to enable us to draw a conclusion about the population from which the sample is
selected.
A further description of our responsibilities for the audit of the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditors’ report.
Use of this report
This report, including the opinions, has been prepared for and only for the company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these opinions, accept
or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands
it may come save where expressly agreed by our prior consent in writing.
Other required reporting
Companies Act 2006 exception reporting
Under the Companies Act 2006 we are required to report to you if, in our opinion:
• we have not obtained all the information and explanations we require for our audit; or
•
adequate accounting records have not been kept by the company, or returns adequate for our audit have not been
received from branches not visited by us; or
certain disclosures of directors’ remuneration specified by law are not made; or
the company financial statements are not in agreement with the accounting records and returns.
•
•
We have no exceptions to report arising from this responsibility.
Bruce Collins (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Aberdeen
27 April 2022
40
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2021
Jersey Oil and Gas plc
Revenue
Cost of sales
Gross loss
Exploration write-off/licence relinquishment
Other losses
Administrative expenses
Operating loss
Finance income
Finance expense
Loss before tax
Tax
Loss for the year
Total comprehensive loss for the year (net of tax)
Total comprehensive loss for the year attributable to:
Owners of the parent
Loss per share expressed in pence per share:
Basic
Diluted
Note
10
7
6
6
8
9
9
2021
£
–
(101,079)
(101,079)
(447,812)
–
(3,672,135)
(4,221,026)
1,807
(6,098)
(4,225,317)
–
(4,225,317)
(4,225,317)
2020
£
–
(53,046)
(53,046)
–
(637,028)
(2,111,532)
(2,801,606)
27,937
(8,262)
(2,781,931)
–
(2,781,931)
(2,781,931)
(4,225,317)
(2,781,931)
(14.48)
(14.48)
(12.74)
(12.74)
The notes on pages 44 to 63 are an integral part of these financial
statements
41
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2021
Jersey Oil and Gas plc
Non-current assets
Intangible assets exploration & development costs
Property, plant and equipment
Right-of-use assets
Deposits
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity
Called up share capital
Share premium account
Share options reserve
Accumulated losses
Reorganisation reserve
Total equity
Liabilities
Non-current liabilities
Lease liabilities
Current liabilities
Trade and other payables
Lease liabilities
Total liabilities
Total equity and liabilities
Note
2021
£
2020
£
10
11
12
13
14
15
19
17
16
12
21,514,153
40,077
185,008
31,112
21,770,350
353,114
13,038,388
13,391,502
35,161,852
14,991,295
74,549
197,374
82,642
15,345,860
401,440
5,081,515
5,482,955
20,828,815
2,573,395
110,309,524
1,397,287
(81,551,730)
(382,543)
32,345,933
2,466,144
93,851,526
2,109,969
(78,509,819)
(382,543)
19,535,277
83,012
83,012
101,270
101,270
2,603,707
129,200
2,732,907
2,815,919
35,161,852
1,069,620
122,648
1,192,268
1,293,538
20,828,815
The financial statements on pages 41 to 43 were approved by the Board of Directors and authorised for issue on 27 April 2022
They were signed on its behalf by Graham Forbes – Chief Financial Officer.
Graham Forbes
Chief Financial Officer
27 April 2022
Company Registration Number: 07503957
The notes on pages 44 to 63 are an integral part of these financial
statements
O
v
e
r
v
i
e
w
O
u
r
G
o
v
e
r
n
a
n
c
e
42
Jersey Oil and Gas plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
At 1 January 2020
Loss and total
comprehensive loss for
the year
Share based payments
At 31 December 2020 and
1 January 2021
Loss and total
comprehensive loss for
the year
Issue of share capital
Expired share options
Exercised share options
Share based payments
At 31 December 2021
Called up
share
capital
£
2,466,144
Share
premium
account
£
93,851,526
Share
options
reserve
£
1,928,099
Accumulated
losses
£
Reorganisation
reserve
£
(75,727,888)
(382,543)
Total
equity
£
22,135,338
-
-
-
-
-
(2,781,931)
181,870
-
-
-
(2,781,931)
181,870
2,466,144
93,851,526
2,109,969
(78,509,819)
(382,543)
19,535,277
-
-
-
(4,225,317)
-
(4,225,317)
107,251
-
-
-
2,573,395
16,457,997
-
-
-
110,309,523
-
(909,176)
(274,230)
470,725
1,397,287
-
909,176
274,230
-
(81,551,730)
-
-
-
-
(382,543)
16,565,248
-
-
470,725
32,345,933
The following describes the nature and purpose of each reserve within owners’ equity:
Reserve
Called up share capital
Share premium account Amount subscribed for share capital in excess of nominal value
Share options reserve
Description and purpose
Represents the nominal value of shares issued
Represents the accumulated balance of share-based payment charges recognised in respect of share
options granted by the Company less transfers to accumulated deficit in respect of options exercised or
cancelled/lapsed
Cumulative net gains and losses recognised in the Consolidated Statement of Comprehensive Income
Accumulated losses
Reorganisation reserve Amounts resulting from the restructuring of the Group at the time of the Initial Public Offering (IPO) in 2011
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2021
Cash flows from operating activities
Cash used in operations
Net interest received
Net interest paid
Net cash used in operating activities
Cash flows from investing activities
Addition of intangible assets
Purchase of tangible assets
Net cash used in investing activities
Cash flows from financing activities
Principal elements of lease payments
Net proceeds from issue of shares
Net cash generated from/(used in) financing activities
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
2021
£
2020
£
21
6
6
10
10
21
14
14
(1,495,899)
1,807
(6,098)
(1,500,190)
(2,160,164)
27,937
(8,262)
(2,140,489)
(6,970,670)
-
(6,970,670)
(4,898,731)
(84,865)
(4,983,596)
(137,516)
16,565,248
16,427,732
7,956,873
5,081,515
13,038,388
(112,936)
-
(112,936)
(7,237,021)
12,318,536
5,081,515
The notes on pages 44 to 63 are an integral part of these financial statements
43
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
1. General information
Jersey Oil and Gas plc (the “Company”) and its subsidiaries (together, the “Group”) are involved in the upstream oil and gas
business in the UK.
The Company is a public limited company incorporated and domiciled in the United Kingdom and quoted on AIM, a market
operated by London Stock Exchange plc. The address of its registered office is 10 The Triangle, ng2 Business Park,
Nottingham, NG2 1AE.
2. Significant accounting policies
The principal accounting policies applied in the preparation of these consolidated financial statements are set out below.
These policies have been consistently applied to all the periods presented, unless otherwise stated.
Basis of Accounting
The consolidated financial statements of Jersey Oil and Gas Plc as of 31 December, 2021 and for the year then ended (the
"consolidated financial statements") were prepared in accordance with UK-adopted International Accounting Standards in
conformity with the requirements of the Companies Act 2006 (the "Companies Act").
On 31 December 2020, IFRS as adopted by the European Union at that date was brought into UK law and became UK-
adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement
Board. Jersey Oil and Gas Plc transitioned to UK-adopted International Accounting Standards in its consolidated financial
statements on 1 January 2021. This change constitutes a change in accounting framework. However, there is no impact on
recognition, measurement or disclosure in the period reported as a result of the change in framework. The consolidated
financial statements of Jersey Oil and Gas Plc have been prepared in accordance with UK-adopted International Accounting
Standards and with the requirements of the Companies Act 2006 as applicable to those companies reporting under those
standards.
The financial statements have been prepared under the historic cost convention, except as disclosed in the accounting
policies below.
Going Concern
The Group has sufficient resources to meet its liabilities as they fall due for a period of at least 12 months after the date of
issue of these financial statements. Further to the equity raise completed in March 2021, the Group has substantial cash
reserves with currently no firm work commitments on any of the Group’s licences, other than ongoing Operator overheads
and licence fees. Other work that the Group is undertaking in respect of the GBA licences and surrounding areas is modest
relative to its current cash reserves. A range of potential farm-out scenarios has also been modelled to provide further
comfort. The Company’s current cash reserves are therefore expected to more than exceed its estimated cash outflows in
all reasonable scenarios for at least 12 months following the date of issue of these financial statements. Based on these
circumstances, the Directors have considered it appropriate to adopt the going concern basis of accounting in preparing
the consolidated financial statements.
Changes in Accounting Policies and Disclosures
(a) New and amended standards adopted by the Group:
At the start of the year the following standards were adopted:
• Covid-19-Related Rent Concessions (Amendment to IFRS 16);
• Interest Rate Benchmark Reform - Phase 2 (Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16);
• IFRS3 conceptual framework amendment; and
• Covid-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16);
44
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
(b) Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2021
reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact
on the entity in the current or future reporting periods and on foreseeable future transactions:
• IFRS17 Insurance Contracts;
• Property, Plant and Equipment: Proceeds before intended use (Amendment to IAS 16);
• Reference to Conceptual Framework (Amendments to IFRS 3);
• Onerous Contracts – Cost of Fulfilling a contract (Amendments to IAS 37);
• Annual Improvements to IFRS Standards 2018-2020
Significant Accounting Judgements and Estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the reported
amounts of revenues, expenses, assets and liabilities at the date of the financial statements. If in future such estimates and
assumptions, which are based on management’s best judgement at the date of the financial statements, deviate from the
actual circumstances, the original estimates and assumptions will be modified as appropriate in the period in which the
circumstances change. The Group’s accounting policies make use of accounting estimates and judgements in the following
areas:
•
•
The assessment of the existence of impairment triggers (note 10).
The estimation of share-based payment costs (note 19).
Impairments
The Group tests its capitalised exploration licence costs for impairment when indicators, further detailed below under
‘Exploration and Evaluation Costs’ as set out in IFRS 6, suggest that the carrying amount exceeds the recoverable amount
which is inherently judgmental. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount of the Cash Generating Unit is the higher of an asset’s fair value less
costs of disposal and value in use. The Group assessed that there were no impairment triggers during the year – this included
the judgement that there was no trigger arising from future licence expiry for which we did not expect the licence concerned
to be renewed.
Share-Based Payments
The Group currently has a number of share schemes that give rise to share-based payment charges. The charge to operating
profit for these schemes amounted to £470,725 (2020: £181,870). Estimates and judgements for determining the fair value of
the share options are required. For the purposes of the calculation, a Black– Scholes option pricing model has been used. Based
on past experience, it has been assumed that options will be exercised, on average, at the mid-point between vesting and
expiring. The share price volatility used in the calculation is based on the actual volatility of the Group’s shares, since 1 January
2017. The risk-free rate of return is based on the implied yield available on zero coupon gilts with a term remaining equal to the
expected lifetime of the options at the date of grant.
Basis of Consolidation
(a) Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern their financial and operating policies generally
accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that
are currently exercisable or convertible are considered when assessing whether the Group controls another entity. The Group
also assesses the existence of control where it does not have more than 50% of the voting power but is able to govern the
financial and operating policies by virtue of de facto control. De facto control may arise in circumstances where the size of the
Group’s voting rights relative to the size and dispersion of holdings of other Shareholders give the Group the power to govern
the financial and operating policies.
45
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from
the date the Group ceases to have control.
(b) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions - that is,
as transactions with the owners in their capacity as owners. The difference between fair value of any consideration paid and the
relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to
non-controlling interests are also recorded in equity.
(c) Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is remeasured to its fair value at the date when control
is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the
purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any
amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had
directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive
income are reclassified to profit or loss.
Inter-company transactions, balances, income and expenses on transactions between Group companies are eliminated. Profits
and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of
subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.
Acquisitions, Asset Purchases and Disposals
Transactions involving the purchase of an individual field interest, farm-ins, farm-outs, or acquisitions of exploration and
evaluation licences for which a development decision has not yet been made that do not qualify as a business combination, are
treated as asset purchases. Accordingly, no goodwill or deferred tax arises. The purchase consideration is allocated to the assets
and liabilities purchased on an appropriate basis. Proceeds on disposal (including farm-ins/farm-outs) are applied to the carrying
amount of the specific intangible asset or development and production assets disposed of and any surplus is recorded as a gain
on disposal in the Consolidated Statement of Comprehensive Income.
Acquisitions of oil and gas properties are accounted for under the purchase method where the acquisitions meets the definition
of a business combination. The Group applies the acquisition method of accounting to account for business combinations. The
consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred, and
the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting
from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a
business combination are measured initially at their fair value at the acquisition date. The Group recognises any non-controlling
interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s
proportionate share of the recognised amounts of the acquiree’s identifiable net assets.
Acquisition related costs are expensed as incurred.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest
in the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration that is deemed to be an asset or liability are recognised in accordance
with IFRS 9 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as
equity is not remeasured, and its subsequent settlement is accounted for within equity.
46
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Jersey Oil and Gas plc
Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-
controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair
value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.
Exploration and Evaluation Costs
The Group accounts for oil and gas exploration and evaluation costs using IFRS 6 “Exploration for and Evaluation of Mineral
Resources”. Such costs are initially capitalised as Intangible Assets and include payments to acquire the legal right to explore,
together with the directly related costs of technical services and studies, seismic acquisition, exploratory drilling, and testing.
The Group only capitalises costs as intangible assets once the legal right to explore an area has been obtained. The Group
assesses the intangible assets for indicators of impairment at each reporting date.
Potential indicators of impairment include but are not limited to:
a) the period for which the Group has the right to explore in the specific area has expired during the period or will expire in
the near future and is not expected to be renewed.
b) substantive expenditure on further exploration for and evaluation of oil and gas reserves in the specific area is neither
budgeted nor planned.
c) exploration for and evaluation of oil and gas reserves in the specific area have not led to the discovery of commercially
viable quantities of oil and gas reserves and the entity has decided to discontinue such activities in the specific area.
d) sufficient data exist to indicate that, although a development in the specific area is likely to proceed, the carrying amount
of the exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.
The Group analyses the oil and gas assets into cash generating units (CGUs) for impairment and reporting purposes. In the
event an impairment trigger is identified the Group performs a full impairment test for the CGU under the requirements of
IAS 36 Impairment of assets. An impairment loss is recognised for the amount by which the exploration and evaluation assets’
carrying amount exceeds their recoverable amount. The recoverable amount is the higher of the exploration and evaluation
assets’ fair value less costs of disposal. A cost of £255,847 was recorded for relinquishing P2497 Block 20/4c (Zermatt), and
£191,965 for P2499 Block 21/2a (Glenn) in the financial year ended 31 December 2021, resulting in the carrying value of both
assets being £nil.
As at 31 December 2021, the carrying value of intangible assets was £21.5m, as per Note 10 ‘Intangible Assets’. The Group
considered other factors which could give rise to an impairment trigger such as commodity prices, licence expiration dates,
budgeted spend and movements in estimated recoverable reserves. The group exercised judgement in determining that
the licence agreements will be likely be extended by the NSTA. Based on this assessment, no impairment triggers existed in
relation to exploration assets as of 31 December 2021.
Cost of Sales
Within the statement of comprehensive income, costs directly associated with generating future revenue are included in cost
of sales such as software licences that were used across the asset base. The Group only capitalises costs as intangible assets
once the legal right to explore an area has been obtained, any costs incurred prior to the date of acquisition are recognised
as cost of sales within the Statement of Comprehensive Income.
Property, Plant and Equipment
Property, plant and equipment is stated at historic purchase cost less accumulated depreciation. Asset lives and residual
amounts are reassessed each year. Cost includes the original purchase price of the asset and the costs attributable to bringing
the asset to its working condition for its intended use.
Depreciation on these assets is calculated on a straight-line basis as follows:
Computer & office equipment 3 years
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47
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Leases
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
•
•
•
•
•
fixed payments (including in-substance fixed payments), less any lease incentives receivable;
variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date;
amounts expected to be payable by the Group under residual value guarantees;
the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases in the Group, the lessee’s incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the Group where possible, uses recent third-party financing received by the
individual lessee as a starting point, adjusted to reflect changes in financing conditions since third party financing was received.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a straight-line
basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying
asset’s useful life.
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value
assets comprise any lease with a value of £5,000 or less.
48
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Joint Ventures
The Group participates in joint venture/operation agreements with strategic partners, these are classified as joint operations.
The Group accounts for its share of assets, liabilities, income and expenditure of these joint venture agreements and discloses
the details in the appropriate Statement of Financial Position and Statement of Comprehensive Income headings in the
proportion that relates to the Group per the joint venture agreement.
Investments
Fixed asset investments in subsidiaries are stated at cost less accumulated impairment in the Company’s Statement of
Financial Position and reviewed for impairment if there are any indications that the carrying value may not be recoverable.
Financial Instruments
Financial assets and financial liabilities are recognised in the Group and Company’s Statement of Financial Position when the
Group becomes party to the contractual provisions of the instrument. The Group does not have any derivative financial
instruments.
Cash and cash equivalents include cash in hand and deposits held on call with banks with a maturity of three months or less.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective
interest method, less any expected credit loss. The Group recognises an allowance for expected credit losses (ECLs) for all
debt instruments not held at fair value through profit or loss. ECLs are based on the difference between the contractual cash
flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an
approximation of the original effective interest rate. The carrying amount of the asset is reduced through the use of an
allowance account, and the amount of the loss will be recognised in the Consolidated Statement of Comprehensive Income
within administrative expenses. Subsequent recoveries of amounts previously provided for are credited against administrative
expenses in the Consolidated Statement of Comprehensive Income.
Trade payables are stated initially at fair value and subsequently measured at amortised cost.
Offsetting of Financial Instruments
Financial assets and financial liabilities are offset, and the net amount is reported in the consolidated statement of financial
position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on
a net basis, or to realise the assets and settle the liabilities simultaneously.
Exceptional Items
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to provide further
understanding of the financial performance of the Group. They are material items of income or expense that have been
shown separately due to the significance of their nature or amount.
Deferred Tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred
taxation liabilities are provided, using the liability method, on all taxable temporary differences at the reporting date. Such
assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit.
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Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against
which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting
date.
49
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where Jersey Oil and Gas Plc and its subsidiaries operate and generate taxable income. We
periodically evaluate positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. Provisions are established where appropriate on the basis of amounts expected to be paid to the tax
authorities.
Current Tax
Current tax is payable based upon taxable profit for the year. Taxable profit differs from net profit as reported in the
Statement of Comprehensive Income because it excludes items of income or expense that are taxable or deductible in other
years and it further excludes items that are never taxable or deductible. Any Group liability for current tax is calculated using
tax rates that have been enacted or substantively enacted by the reporting date.
Foreign Currencies
The functional currency of the Company and its subsidiaries is Sterling. Monetary assets and liabilities in foreign currencies
are translated into Sterling at the rates of exchange ruling at the reporting date. Transactions in foreign currencies are
translated into Sterling at the rate of exchange ruling at the date of the transaction. Gains and losses arising on retranslation
are recognised in the Consolidated Statement of Comprehensive Income for the year.
Employee Benefit Costs
Payments to defined contribution retirement benefit schemes are recognised as an expense when employees have rendered
service entitling them to contributions.
Share-Based Payments
Equity settled share-based payments to employees and others providing similar services are measured at the fair value of the
equity instruments at the grant date. The total amount to be expensed is determined by reference to the fair value of the options
granted:
•
•
•
including any market performance conditions (for example, an entity’s share price);
excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales
growth targets and remaining an employee of the entity over a specified time-period); and
including the impact of any non-vesting conditions (for example, the requirement for employees to save).
The fair value determined at the grant date of the equity settled share-based payments is expensed on a straight-line basis
over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding
increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments
expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the
cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity settled employee benefits
reserve.
Equity settled share-based payment transactions with parties other than employees are measured at the fair value of the
goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the
fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders
the service.
Exercise proceeds net of directly attributable costs are credited to share capital and share premium.
50
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Share Capital
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net
of tax, from the proceeds.
3. Segmental reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors.
The Board considers that the Group operates in a single segment, that of oil and gas exploration, appraisal, development and
production, in a single geographical location, the North Sea of the United Kingdom and do not consider it appropriate to
disaggregate data further from that disclosed.
The Board is the Group’s chief operating decision maker within the meaning of IFRS 8 “Operating Segments”.
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During 2021 and 2020 the Group had no revenue.
4. Financial risk management
The Group’s activities expose it to financial risks and its overall risk management programme focuses on minimising potential
adverse effects on the financial performance of the Group. The Company’s activities are also exposed to risks through its
investments in subsidiaries and it is accordingly exposed to similar financial and capital risks as the Group.
Risk management is carried out by the Directors and they identify, evaluate, and address financial risks in close co-operation
with the Group’s management. The Board provides written principles for overall risk management, as well as written policies
covering specific areas, such as mitigating foreign exchange risks and investing excess liquidity.
Credit Risk
The Group’s credit risk primarily relates to its trade receivables. Responsibility for managing credit risks lies with the Group’s
management.
A debtor evaluation is typically obtained from an appropriate credit rating agency. Where required, appropriate trade finance
instruments such as letters of credit, bonds, guarantees and credit insurance will be used to manage credit risk.
Liquidity Risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. The Group
manages its liquidity through continuous monitoring of cash flows from operating activities, review of actual capital
expenditure programmes, and managing maturity profiles of financial assets and financial liabilities.
51
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Capital Risk Management
The Group seeks to maintain an optimal capital structure. The Group considers its capital to comprise both equity and net
debt.
The Group monitors its capital mix needs and suitability dependent upon the development stage of its asset base. Earlier
stage assets (pre-production) typically require equity rather than debt given the absence of cash flow to service debt. As
the asset mix becomes biased to production then typically more debt is available. The Group seeks to maintain progress
in developing its assets in a timely fashion. Given the Group’s current cash position is insufficient to progress its assets to
first oil it will be seeking to bring an industry partner into its assets in return for a capital (equity) contribution. This may be
in the form of either cash or payment of some or all the Group’s development expenditures. As the development
progresses towards first oil, debt becomes available and will be sought in order to enhance equity returns. As at 31
December 2021 there are no borrowings within the Group (2020: Nil).
The Group monitors its capital structure by reference to its net debt to equity ratio. Net debt to equity ratio is calculated
as net debt divided by total equity. Net debt is calculated as borrowings less cash and cash equivalents. Total equity
comprises all components of equity.
Maturity analysis of financial assets and liabilities
Financial assets
Up to 3 months
3 to 6 months
Over 6 months
Financial liabilities
Up to 3 months
3 to 6 months
Over 6 months
Lease liabilities
Up to 3 months
3 to 6 months
Over 6 months
2021
£
233,864
–
31,112
264,976
2021
£
2,232,325
–
–
2,232,325
2021
£
31,028
31,261
149,923
212,212
2020
£
446,082
35,980
199,395
681,457
2020
£
1,069,620
–
–
1,069,620
2020
£
46,712
40,231
136,975
223,918
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Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
5. Employees and Directors
Wages and salaries*
Social security costs**
Share-based payments (note 19)
Other pension costs
Jersey Oil and Gas plc
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2021
£
2,207,384
215,267
470,724
218,253
3,111,628
2020
£
1,841,230
145,605
181,870
181,010
2,349,715
*In addition, there were payments in lieu of notice and loss of office fees of £733,725.
** In addition, there were social security costs associated with the payments in lieu of notice and loss of
office of £49,985.
Other pension costs include employee and Group contributions to money purchase pension schemes.
The average monthly number of employees during the year was as follows:
Directors
Employees - Finance
Employees - Technical
Directors Remuneration:
Directors’ remuneration*
Directors’ pension contributions to money purchase schemes
Share-based payments (note 19)
Benefits**
2021
£
6
1
10
17
2021
£
938,465
26,450
207,534
17,074
1,189,523
2020
£
5
1
8
14
2020
£
878,100
26,665
153,816
17,104
1,075,685
The Director’s remuneration is shown net of share-based payments.
*In addition, there were payments in lieu of notice and loss of office fees of £733,725.
** In addition, there were benefit costs associated with the payments in lieu of notice and loss of office of £13,197.
The average number of Directors to whom retirement benefits were accruing was as follows:
Money purchase schemes
Information regarding the highest paid Director is as follows:
Aggregate emoluments and benefits
Share-based payments
Pension contributions
2021
£
2
2020
£
2
2021
£
256,036
74,707
25,000
355,743
2020
£
254,784
52,470
25,000
332,254
53
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Key management compensation
Key management includes Directors (Executive and Non-Executive) and an advisor to the Board. The
compensation paid or payable to key management for employee services is shown below:
Wages and short-term employee benefits*
Share-based payments (note 19)
Pension Contributions
*In addition, there were payments in lieu of notice and loss of office fees of
£733,725 and associated benefit costs of £13,197.
6. Net Finance Cost
Finance income:
Interest received
Finance costs:
Interest paid
Interest on lease liability
Net finance income
7. Loss Before Tax
The loss before tax is stated after charging/(crediting):
Depreciation - tangible assets
Depreciation - right-of-use asset
Auditors' remuneration - audit of parent company and consolidation
Auditors’ remuneration - audit of subsidiaries
Auditors’ remuneration - non-audit work (taxation advice)
TGS Settlement
Foreign exchange gain
2021
£
992,204
207,534
26,450
1,226,188
2020
£
895,203
153,816
26,665
1,075,684
2021
£
1,807
1,807
(278)
(5,820)
(6,098)
(4,290)
2020
£
27,937
27,937
(33)
(8,229)
(8,262)
19,675
2021
£
34,472
138,176
80,000
27,000
3,150
–
(6,027)
2020
£
23,977
135,493
58,000
20,000
16,000
637,028
(5,600)
In December 2020, the Group reached a settlement with TGS-Nopec Geophysical Company ASA (“TGS”)
pursuant to an agreement entered into with TGS on 9 February 2018. Under the agreement, TGS claimed uplift
payments from JOG totalling US$1,050,838 in respect of: a) licence awards to Jersey Petroleum Limited (“JPL”) in the
Oil & Gas Authority’s 31st Supplementary Offshore Licensing Round; and b) the acquisition by JPL of Equinor UK
Limited’s 70% interest in Licence P2170 (Verbier). The Group disputed the validity of both claims, following which
two hearings took place in the Norwegian courts. Subsequent to these hearings and, on the basis of legal advice
received, the Group agreed a final settlement payment to TGS of US$850,000 (£637,028).
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Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
8. Tax
Reconciliation of tax charge
Loss before tax
Tax at the domestic rate of 19% (2020: 19%)
Capital allowances in excess of depreciation
Expenses not deductible for tax purposes and non-taxable income
Deferred tax asset not recognised
Total tax expense reported in the Consolidated Statement of
Comprehensive Income
2021
£
(4,225,317)
(802,810)
(1,330,468)
91,330
2,041,949
–
2020
£
(2,781,931)
(528,567)
(957,549)
35,704
1,450,412
–
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2021, or for the
year ended 31 December 2020.
In April 2023, the rate of corporation tax will increase to 25% as announced in the March 2021 Budget.
The Group has not recognised a deferred tax asset due to the uncertainty over when the tax losses can be utilised. At
the year end, the usable tax losses within the Group were approximately £57 million (2020: £46million).
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9. Loss Per Share
Basic loss per share is calculated by dividing the losses attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
Diluted loss per share is calculated using the weighted average number of shares adjusted to assume the conversion
of all dilutive potential ordinary shares.
There is no difference between dilutive and ordinary earnings per share due to there being no dilutive shares in the
period.
Year ended 31 December 2021
Basic and Diluted EPS
Basic & Diluted
Year ended 31 December 2020
Basic and Diluted EPS
Basic & Diluted
Loss attributable
to ordinary
shareholders
£
Weighted average
number of
shares
Per share
amount
pence
(4,225,317)
29,171,548
(14.48)
(2,781,931)
21,829,227
(12.74)
55
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
10. Intangible Assets
Cost
At 1 January 2020
Additions
At 31 December 2020
Additions
Exploration write-off/relinquishment
At 31 December 2021
Accumulated Amortisation
At 1 January 2020
Charge for the year
Amortisation on disposal
At 31 December 2020
At 31 December 2021
Net Book Value
At 31 December 2021
At 31 December 2020
Jersey Oil and Gas plc
Exploration
costs
£
10,267,805
4,898,731
15,166,536
6,970,670
(447,812)
21,689,394
175,241
–
–
175,241
175,241
21,514,153
14,991,295
During the year, the Group relinquished licences P2497 Block 20/4c (Zermatt) and P2499 Block 21/2a (Glenn). Following
undertaking a comprehensive technical and economic evaluation of licences P2497 and P2499 and meetings held with
the North Sea Transition Authority ("NSTA"), the NSTA confirmed that it was satisfied that the Phase A Firm
Commitments for both licences had been fulfilled. JOG has decided not to progress to the next licence phase, which
would have required committing to a firm well in each of these two licence areas. Accordingly, the licences automatically
ceased and determined at the end of Phase A of their Initial Term on 29 August 2021.
In 2020, the Group acquired an additional 70% working interest in licence P2170 (Verbier) in addition to the existing 18%
equity interest and retained 100% working interests in the licences awarded pursuant to the NSTA’s 31st SLR (2019),
Licence P2498 (Buchan and J2), Licence P2499 (Glenn) and Licence P2497 (Zermatt). The Group was also awarded a
100% working interest in, and operatorship of, part-block 20/5e in the NSTA’s 32 Offshore Licensing Round in 2020.
Part-block 20/5e is incorporated within Licence P2498 (Buchan & J2) and is located within the Group’s existing Greater
Buchan Area.
In April 2021, the Group acquired an additional 12% working interest in P2170 following the acquisition of Cieco V&C
(UK) Limited (now Jersey V&C Ltd), thereby resulting in the Group owning 100% of this licence which includes the
Verbier oil discovery, some 6km from the Buchan oil field. The consideration for the acquisition included a completion
payment of £150k and two future milestone payments, details of which can be found in note 18.
In line with the requirements of IFRS 6, we have considered whether there are any indicators of impairment on the
exploration and development assets. Based on our assessment, as at 31 December 2021 there are not deemed to be
indicators that the licences are not commercial and the carrying value of £21,514,153 continues to be supported by
ongoing exploration and development work on the licence area with no impairments considered necessary.
56
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
11. Property, Plant and Equipment
Cost
At 1 January 2020
Additions
At 31 December 2020
Additions
At 31 December 2021
Accumulated Depreciation
At 1 January 2020
Charge for the year
At 31 December 2020
Charge for the year
At 31 December 2021
Net Book Value
At 31 December 2021
At 31 December 2020
12. Leases
Amounts Recognised in the Statement of financial position
Right-of-use Assets
Buildings
Lease liabilities
Current
Non-Current
Jersey Oil and Gas plc
Computer and office
equipment
£
143,582
84,865
228,447
–
228,447
129,921
23,977
153,898
34,472
188,370
40,077
74,549
2021
£
185,008
185,008
129,200
83,012
212,212
2020
£
197,374
197,374
122,648
101,270
223,918
The liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s
incremental borrowing rate as of 1 January 2019. The weighted average lessee’s incremental borrowing rate applied to
the lease liabilities on 1 January 2019 was 3%. The borrowing rate applied for 2021 remained at 3% and the leases relate
to office space.
A new lease agreement was entered into in September 2021 with a lease end date of September 2023, this was in
relation to the London office.
Amounts Recognised in the Statement of comprehensive income
Depreciation charge of right-of-use asset
Buildings
Interest expenses (included in finance cost)
2021
£
138,176
138,176
(5,820)
2020
£
135,493
135,493
(8,230)
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Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
13. Trade and other receivables
Current:
Other receivables
Value added tax
Prepayments and accrued revenue
As at 31 December 2021, there were no trade receivables past due nor impaired.
14. Cash and cash equivalents
Cash in bank accounts
Jersey Oil and Gas plc
2021
£
30
233,835
119,249
353,114
2020
£
91,020
161,111
149,309
401,440
2021
£
13,038,388
2020
£
5,081,515
The cash balances are placed with creditworthy financial institutions with a minimum rating of ‘A’.
15. Called up share capital
Issued and fully paid:
Number:
32,554,293 (2020:21,829,227)
Class
Ordinary
Nominal
value
1p
2021
£
2,573,395
2020
£
2,466,144
Ordinary shares have a par value of 1p. They entitle the holder to participate in dividends, distribution or other
participation in the profits of the Company in proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote,
and on a poll each share is entitled to one vote.
During the year 660,000 ordinary shares were issued to satisfy the exercise of share options which raised £778,357
(gross). An oversubscribed placing and subscription of shares raised a further £16.61m (gross) with a total of
10,065,066 ordinary shares issued.
16. Trade and other payables
Current:
Trade payables
Accrued expenses
Other payables
Taxation and Social Security
17. Lease liabilities
Non-Current:
Lease liabilities
2021
£
1,211,220
1,021,105
–
371,381
2,603,706
2021
£
2020
£
451,857
465,291
74,905
77,567
1,069,620
2020
£
83,012
83,012
101,270
101,270
58
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
18. Contingent Liabilities
(i) 2015 settlement agreement with Athena Consortium: In accordance with a 2015 settlement agreement reached with
the Athena Consortium, although Jersey Petroleum Ltd remains a Licensee in the joint venture, any past or future liabilities in
respect of its interest can only be satisfied from the Group’s share of the revenue that the Athena Oil Field generates and up
to 60 per cent. of net disposal proceeds or net petroleum profits from the Group’s interest in the P2170 licence which is the
only remaining asset still held that was in the Group at the time of the agreement with the Athena Consortium who hold
security over this asset. Any future repayments, capped at the unpaid liability associated with the Athena Oil Field, cannot
be calculated with any certainty, and any remaining liability still in existence once the Athena Oil Field has been
decommissioned will be written off. A payment was made in 2016 to the Athena Consortium in line with this agreement
following the farm-out of P2170 (Verbier) to Equinor and the subsequent receipt of monies relating to that farm-out.
(ii) Equinor UK Limited: During 2020, JOG announced that it had entered into a conditional Sale and Purchase Agreement
(“SPA”) to acquire operatorship of, and an additional 70% working interest in Licence P2170 (Blocks 20/5b and 21/1d) from
Equinor UK Limited (“Equinor”), this transaction completed in May 2020. The consideration for the acquisition consists of two
milestone payments, which will be accounted for in line with the cost accumulation model, as opposed to contingent
liabilities:
• US$3 million upon sanctioning by the UK’s North Sea Transition Authority (“NSTA”) of a Field Development Plan (“FDP”) in
respect of the Verbier Field; and
• US$5 million upon first oil from the Verbier Field.
The earliest of the milestone payments in respect of the acquisition is not currently anticipated being payable before the
start of 2025.
(iii) ITOCHU Corporation and Japan Oil, Gas and Metals National Corporation: During 2020, JOG announced that it
entered into a conditional Sale and Purchase Agreement (“SPA”) to acquire the entire issued share capital of CIECO V&C
(UK) Limited, which was owned by ITOCHU Corporation and Japan Oil, Gas and Metals National Corporation, this
transaction completed in April 2021. The acquisition was treated as an asset acquisition rather than a business
combination due to the nature of the asset acquired. There were no assets or liabilities acquired other than the 12%
interest in licence P2170 (Verbier). The consideration for the acquisition includes a completion payment of £150k and two
future milestone payments, which are considered contingent liabilities:
• £1.5 million in cash upon consent from the UK’s North Sea Transition Authority (“NSTA”) for a Field Development Plan
(“FDP”) in respect of the Verbier discovery in the Upper Jurassic (J62-J64) Burns Sandstone reservoir located on Licence
P2170; and
• £1 million in cash payable not later than one year after first oil from all or any part of the area which is the subject of the
Field Development Plan.
The earliest of the milestone payments in respect of the acquisition is not currently anticipated being payable before the
start of 2025.
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Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
19. Share based payments
The Group operates several share options schemes. Options are exercisable at the prices set out in the table
below. Options are forfeited if the employee leaves the Group through resignation or dismissal before the
options vest.
Equity settled share-based payments are measured at fair value at the date of grant and expensed on a straight-
line basis over the vesting period, based upon the Group’s estimate of shares that will eventually vest.
The Group’s share option schemes are for Directors, Officers and employees. The charge for the year was £470,725
(2020: £181,870) and details of outstanding options are set out in the table below.
Date of Grant
Mar 2011
Mar 2011
Mar 2011
Mar 2011
Jul 2011
Jul 2011
Jul 2011
Dec 2011
Dec 2011
May 2013
May 2013
Nov 2016
Nov 2016
Nov 2016
Apr 2017
Apr 2017
Apr 2017
Jan 2018
Jan 2018
Jan 2018
Jan 2018
Nov 2018
Jan 2019
Jan 2019
Jan 2019
Jan 2019
Jan 2019
Jan 2019
Jun 2019
Jun 2019
Jan 2021
Jan 2021
Jan 2021
Mar 2021
Mar 2021
Mar 2021
Mar 2021
Mar 2021
Mar 2021
Nov 2021
Nov 2021
Nov 2021
Exercise price
(pence)
100
4,300
4,300
4,300
4,300
4,300
4,300
2,712
2,712
1,500
1,500
110
110
110
310
310
310
200
200
200
200
172
175
175
175
175
175
175
200
110
155
155
155
210
210
210
210
210
210
147
147
147
Vesting date
Vested
Vested
Mar 2014
Mar 2015
Jul 2011
Jul 2012
Jul 2014
Dec 2012
Dec 2014
May 2014
May 2015
Nov 2016
Nov 2017
Nov 2018
Apr 2017
Apr 2018
Apr 2019
Jan 2021
Jan 2018
Jan 2019
Jan 2020
Nov 2021
Jan 2020
Jan 2021
Jan 2022
Jan 2020
Jan 2021
Jan 2022
Jan 2021
Jun 2019
Jan 2022
Jan 2023
Jan 2024
Mar 2022
Mar 2023
Mar 2024
Mar 2022
Mar 2023
Mar 2024
Nov 2022
Nov 2022
Nov 2022
Expiry date
Mar 2021
Mar 2021
Mar 2021
Mar 2021
Jul 2021
Jul 2021
Jul 2021
Dec 2021
Dec 2021
May 2023
May 2023
Nov 2021
Nov 2021
Nov 2021
Apr 2022
Apr 2022
Apr 2022
Jan 2025
Jan 2023
Jan 2023
Jan 2023
Nov 2025
Jan 2026
Jan 2026
Jan 2026
Jan 2024
Jan 2024
Jan 2024
Jun 2029
Jun 2029
Jan 2028
Jan 2028
Jan 2028
Mar 2026
Mar 2026
Mar 2026
Mar 2028
Mar 2028
Mar 2028
Nov 2028
Nov 2028
Nov 2028
No. of shares
for which
options
outstanding at
1 Jan 2021 Options issued
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
83,333
83,333
83,334
11,666
11,667
11,667
162,334
162,333
162,333
233,334
233,333
233,333
3,164
5,809
4,370
5,809
523
523
523
1,650
1,650
9,500
9,500
246,667
246,667
166,667
20,000
20,000
20,000
420,000
76,666
76,667
70,000
150,000
88,333
88,333
81,666
11,667
11,667
11,667
120,000
40,000
-
-
-
-
-
-
-
-
-
-
-
-
Options
lapsed/non
vesting during
the year
No. of shares
for which
options
outstanding at
31 Dec 2021
Options
Exercised
-
-
-
-
-
-
-
-
-
-
-
(246,667)
(246,667)
(166,667)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,164)
(5,809)
(4,370)
(5,809)
(523)
(523)
(523)
(1,650)
(1,650)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9,500
9,500
-
-
-
20,000
20,000
20,000
420,000
76,666
76,667
70,000
150,000
88,333
88,333
(13,333) 68,333
-
11,667
11,667
-
- 11,667
120,000
-
40,000
-
83,333
-
83,333
-
83,334
-
11,666
-
11,667
-
11,667
-
137,334
(25,000)
137,333
(25,000)
137,333
(25,000)
233,334
-
233,333
-
233,333
-
2,709,333
Total
60
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
The weighted average of the options granted during the year was determined using a Black–Scholes valuation. The
significant inputs into the model were the mid-market share price on the day of grant as shown above and an annual
risk-free interest rate of 2%. The volatility measured at the standard deviation of continuously compounded share
returns is based on a statistical analysis of daily share prices from the date of admission to AIM to the date of grant
on an annualised basis. The weighted average exercise price for the options granted in 2021 was 171 pence, the
weighted average remaining contractual life of the options was 6 years (for all schemes 5 years), the weighted average
volatility rates was 129% and the dividend yield was nil. There were 660,000 110 pence share options, from the
November 2016 issue, exercised in the year. The weighted average exercise price of the exerciseable options was 218
pence, and the 190 pence for all outstanding options at 31 December 2021. For schemes and scheme rules, please
refer to the Remuneration Report.
20. Related undertakings and ultimate controlling party
The Group and Company do not have an ultimate controlling party or parent Company.
Subsidiary
% owned
Jersey North Sea Holdings Ltd
Jersey Petroleum Ltd
Jersey V&C Ltd
Jersey E & P Ltd
Jersey Oil Ltd
Jersey Exploration Ltd
Jersey Oil & Gas E & P Ltd
Registered Offices
100%
100%
100%
100%
100%
100%
100%
County of
Incorporation
England & Wales
England & Wales
England & Wales
Scotland
Scotland
Scotland
Jersey
Principal Activity
Non-Trading
Oil Exploration
Oil Exploration
Non-Trading
Non-Trading
Non-Trading
Management services
Registered
Office
1
1
1
2
2
2
3
1.
10 The Triangle, ng2 Business Park, Nottingham, NG2 1AE
2. 6 Rubislaw Terrace, Aberdeen, AB10 1XE
3. First Floor, Tower House, La Route es Nouaux, St Helier, Jersey JE2 4ZJ
21. Notes to the consolidated statement of cash flows
Reconciliation of Loss Before Tax to Cash Used in Operations
Loss for the year before tax
Adjusted for:
Depreciation
Impairments
Depreciation right-of-use asset
Share-based payments (net)
Finance costs
Finance income
(Increase)/decrease in trade and other receivables
Increase in trade and other payables
Cash used in operations
2021
£
(4,225,317)
34,472
447,812
138,176
470,724
6,098
(1,807)
(3,129,842)
99,856
1,534,087
(1,495,899)
2020
£
(2,781,931)
23,977
–
135,493
181,870
8,262
(27,937)
(2,460,266)
(27,352)
327,454
(2,160,164)
61
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Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Cash and cash equivalents
The amounts disclosed on the consolidated Statement of Cash Flows in respect of Cash and cash equivalents
are in respect of these statements of financial position amounts:
Year ended 2021
Cash and cash equivalents
Year ended 2020
Cash and cash equivalents
Cash and cash equivalents
Net cash
31 Dec 2021
£
13,038,388
31 Dec 2019
£
5,081,515
31 Dec 2020
£
5,081,515
1 Jan 2019
£
12,318,536
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At 1 Jan 2021
5,081,515
5,081,515
Cash flow
£
7,956,873
7,956,873
At 31 Dec 2021
£
13,038,388
13,038,388
62
Notes to the Consolidated Financial Statements
For the year ended 31 December 2021
Jersey Oil and Gas plc
22. Post balance sheet events
The Group has considered its supply chain and activities in light of the Russia/Ukraine war and does not believe that
there will be any impact on its business.
23. Availability of the annual report 2021
A copy of this report will be made available for inspection at the Company’s registered office during normal business hours
on any weekday. The Company’s registered office is at 10 The Triangle, ng2 Business Park, Nottingham NG2 1AE. A copy can
also be downloaded from the Company’s website at www.jerseyoilandgas.com. Jersey Oil and Gas plc is registered in
England and Wales, with registration number 7503957.
63
Contents for the Company Financial Statements
For the year ended 31 December 2021
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Jersey Oil and Gas plc
Pages
65
66
67
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COMPANY STATEMENT OF FINANCIAL POSITION
For the year ended 31 December 2021
Jersey Oil and Gas plc
Non-current assets
Investments in subsidiaries
Property, plant and equipment
Right-of-use asset
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Equity
Called up share capital
Share premium account
Share options reserve
Accumulated losses
Total equity
Non-current liabilities
Lease liabilities
Current liabilities
Trade and other payables
Lease liabilities
Total liabilities
Total equity and liabilities
Note
4
5
6
7
8
9
2021
£
–
38,065
106,514
144,579
2020
£
–
66,121
76,064
142,185
26,090,088
12,891,047
38,981,135
39,125,714
17,088,267
4,998,008
22,086,275
22,228,460
2,573,395
110,309,524
1,397,282
(76,286,305)
37,993,896
2,466,144
93,851,526
2,109,964
(76,754,297)
21,673,335
6
36,290
–
6
10
1,024,558
70,970
1,131,818
39,125,714
474,881
80,244
555,125
22,228,460
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent
Company is not presented as part of these financial statements. The parent Company’s loss for the year was £715,412
(2020: Loss of £1,083,379).
The financial statements on pages 65 and 66 were approved by the Board of Directors and authorised for issue on
27 April 2022. They were signed on its behalf by Graham Forbes – Chief Financial Officer.
Graham Forbes
Chief Financial Officer
27 April 2022
Company Registration Number: 07503957
The notes on pages 67 to 72 are an integral part of these financial
statements
65
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2021
Jersey Oil and Gas plc
At 1 January 2020
Total comprehensive loss for the year
Transactions with owners (share-based
payments)
At 31 December 2020
Total comprehensive loss for the year
Issue of share capital
Expired share options
Exercised share options
Transactions with owners (share-based
payments)
At 31 December 2021
Called up
share
capital
£
2,466,144
–
–
2,466,144
–
107,251
–
–
–
Share
premium
account
£
93,851,526
–
–
93,851,526
–
16,457,997
–
–
–
Share
options
reserve
£
1,928,094
–
181,869
2,109,964
–
–
(909,176)
(274,230)
470,725
Accumulated
losses
£
(75,670,918)
(1,083,379)
–
(76,754,297)
(715,412)
–
909,176
274,230
–
Total
equity
£
22,574,846
(1,083,379)
181,869
21,673,336
(715,412)
16,565,248
–
–
470,725
2,573,395
110,309,524
1,397,282
(76,286,305)
37,993,896
The following describes the nature and purpose of each reserve:
Description and purpose
Amount subscribed for share capital in excess of nominal value
Reserve
Called up share capital Represents the nominal value of shares issued
Share premium
account
Share options reserve Represents the accumulated balance of share-based payment charges recognised in respect of
share options granted by the Company less transfers to accumulated deficit in respect of options
exercised or cancelled/lapsed
Cumulative net gains and losses recognised in the Consolidated Statement of Comprehensive
Income
Amounts resulting from the restructuring of the Group at the time of the Initial Public Offering (IPO) in
2011
Accumulated losses
Reorganisation
reserve
The notes on pages 67 to 72 are an integral part of these financial
statements
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Jersey Oil and Gas plc
Notes to the Company Financial Statements
For the year ended 31 December 2021
1. Significant accounting policies
Effective from 1 January 2021, the parent company Jersey Oil and Gas Plc changed its accounting framework from UK-
adopted international accounting standards to the Financial Reporting Standard 101, ‘Reduced Disclosure Framework’ (FRS
101). Therefore, in preparing these financial statements, the Company applies the recognition, measurement and disclosure
requirements of International Financial Reporting Standards as adopted by the UK (UK-adopted international accounting
standards) but makes amendments where necessary in order to comply with the Companies Act 2006 and to take advantage
of FRS 101 disclosure exemptions.
On 31 December 2020, IFRS as adopted by the European Union and at that date was brought into UK law and became UK-
adopted International Accounting Standards, with future changes being subject to endorsement by the UK Endorsement
Board. In preparing these financial statements in accordance with FRS 101, the Company Financial Statements transitioned
to UK-adopted international accounting standards (as described above) on 1 January 2021. There is no impact on
recognition, measurement or disclosure in the period reported as a result of this change.
The principal accounting policies adopted are consistent with those set out in note 2 to the consolidated financial statements.
The financial risk management strategy for the Company is consistent with that set out in note 4 to the consolidated financial
statements. These policies have been consistently applied to all the periods presented, unless otherwise stated.
The Company is a qualifying entity for the purposes of FRS 101. The application of FRS 101 has enabled the Company to take
advantage of certain disclosure exemptions that would have been required had the Company adopted IFRS in full. The
disclosure exemptions adopted by the Company are as follows:
The following exemptions from the requirements of IFRS have been applied in the preparation of the parent company
financial statements, in accordance with FRS 101:Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’ (details of
the number and weighted average exercise prices of share options, and how the fair value of goods or services received was
determined).
IFRS 7, ‘Financial instruments: Disclosures’.
•
• Paragraphs 91 to 99 of IFRS 13, ‘Fair value measurement’ (disclosure of valuation techniques and inputs used for fair
value measurement of assets and liabilities).
• Paragraph 38 of IAS 1, 'Presentation of financial statements' – comparative information requirements
•
in respect of:
o paragraph 79(a)(iv) of IAS 1;
o paragraph 73(e) of IAS 16, 'Property, plant and equipment'; and
o paragraph 118(e) of IAS 38, 'Intangible assets' (reconciliations between the carrying amount at the
beginning and end of the period).
• The following paragraphs of IAS 1, ‘Presentation of financial statements’:
o
o
o
o
o
o
10(d) (statement of cash flows);
16 (statement of compliance with all IFRS).
38A (requirement for minimum of two primary statements, including cash flow statements);
38B-D (additional comparative information).
111 (statement of cash flows information); and
134-136 (capital management disclosures).
IAS 7, ‘Statement of cash flows.
•
• Paragraphs 30 and 31 of IAS 8, ‘Accounting policies, changes in accounting estimates and errors’ (requirement for
the disclosure of information when an entity has not applied a new IFRS that has been issued but is not yet effective).
• Paragraph 17 of IAS 24, ‘Related party disclosures’ (key management compensation).
• The requirements in IAS 24, ‘Related party disclosures’, to disclose related party transactions entered into between
two or more members of a group.
Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.
67
Jersey Oil and Gas plc
Notes to the Company Financial Statements
For the year ended 31 December 2021
Going Concern
The Company has sufficient resources to meet its liabilities as they fall due for period of at least 12 months after the date
of issue of these financial statements. Further to the equity raise completed in March 2021, the Company has substantial
cash reserves with currently no firm work commitments on any of the Group’s licences, other than ongoing Operator
overheads and licence fees. Other work that the Group is undertaking in respect of the GBA licences and surrounding
areas is modest relative to its current cash reserves. A range of potential farm-out scenarios has also been modelled to
provide further comfort. The Company’s current cash reserves are therefore expected to more than exceed its
estimated cash outflows in all reasonable scenarios for at least 12 months following the date of issue of the financial
statements. Based on these circumstances, the Directors have considered it appropriate to adopt the going concern
basis of accounting in preparing the Company’s consolidated financial statements.
Risk management
The Company’s activities expose it to financial risks and its overall risk management programme focuses on minimising
potential adverse effects on the financial performance of the Company. The Company’s activities are also exposed to
risks through its investments in subsidiaries and it is accordingly exposed to similar financial and capital risks as the Group.
Risk management is carried out by the Directors and they identify, evaluate and address financial risks in close co-
operation with the Company’s management. The Board provides written principles for overall risk management, as well as
written policies covering specific areas, such as mitigating foreign exchange risks and investing excess liquidity. Liquidity risk
is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages
its liquidity through continuous monitoring of cash flows from operating activities, review of actual capital expenditure
programmes, and managing maturity profiles of financial assets and financial liabilities.
2. Employees and directors
Wages and salaries*
Social security costs**
Share based payments
Other pensions costs
2021
£
1,548,961
190,882
470,724
175,253
2,385,821
2020
£
1,161,300
121,025
181,869
138,010
1,602,204
*In addition, there were payments in lieu of notice and loss of office fees of £328,725.
** In addition, there were social security costs associated with the payments in lieu of notice and loss of office of
£42,173.
Other pension costs include employee and Company contributions to money purchase pension schemes. The
average monthly number of employees during the year was as follows:
Directors
Employees – Finance
Employees – Technical
2021
6
1
8
15
2020
5
1
6
12
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Jersey Oil and Gas plc
Notes to the Company Financial Statements
For the year ended 31 December 2021
2. Employees and directors continued
Directors’ remuneration*
Directors’ pension contributions to money purchase schemes
Benefits**
2021
£
487,042
1,450
6,881
495,373
2020
£
382,100
1,665
5,346
389,111
The Directors’ remuneration excludes remuneration paid by other Group companies for services to the Group.
The Director’s remuneration is shown net of share-based payments.
*In addition, there were payments in lieu of notice and loss of office fees of £328,725.
** In addition, there were benefit costs associated with the payments in lieu of notice and loss of office of £5,110.
The average number of Directors to whom retirement benefits were accruing was as follows:
Money purchase schemes
Information regarding the highest paid Director is as follows:
2021
2020
1
1
Aggregate emoluments and benefits
Pension contributions
2021
£
232,069
–
232,069
2020
£
242,946
–
242,946
Key management compensation
Key management includes Directors (Executive and Non-Executive). The compensation paid or payable to key
management for employee services is shown below:
Wages and short-term employee benefits*
Share based payments (note 19)
Pension Contributions
2021
£
530,588
207,534
1,450
739,572
2020
£
387,446
153,816
1,665
542,927
*In addition, there were payments in lieu of notice and loss of office fees of £328,725 and benefit costs associated
with the payments in lieu of notice and loss of office of £5,110.
3. Loss of parent company
As permitted by Section 408 of the Companies Act 2006, the Statement of Comprehensive Income of the parent
Company is not presented as part of these financial statements.
The parent Company’s loss for the year was £715,412 (2020: Loss of £1,083,379).
Auditors’ remuneration is disclosed in note 7 in the consolidated financial statements.
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Notes to the Company Financial Statements
For the year ended 31 December 2021
4. Investment in subsidiaries
Company – shares in subsidiary undertakings:
The carrying value of investments in subsidiary entities has been written off in prior
periods.
The subsidiary undertakings at 31 December 2021 were as follows:
Subsidiary
Jersey North Sea Holdings Ltd*
Jersey Petroleum Ltd*
% owned
100%
100%
100%
100%
100%
100%
100%
County of Incorporation
England & Wales
England & Wales
England & Wales
Scotland
Scotland
Scotland
Jersey
Jersey V&C Ltd*
Jersey E & P Ltd**
Jersey Oil Ltd**
Jersey Exploration Ltd**
Jersey Oil & Gas E & P Ltd***
* Registered address: 10 The Triangle, ng2 Business Park, Nottingham, NG2 1AE
** Registered address: 6 Rubislaw Terrace, Aberdeen, AB10 1XE
*** Registered address: First Floor, Tower House, La Route es Nouaux, St Helier, Jersey, JE2 4ZJ
5. Property, plant and equipment
Cost
At 1 January 2020
Additions
At 31 December 2020
Additions
At 31 December 2021
Accumulated depreciation
At 1 January 2020
Charge for year
At 31 December 2020
Charge for year
At 31 December 2021
Net book value
At 31 December 2021
At 31 December 2020
Jersey Oil and Gas plc
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2021
£
2020
£
–
–
Principal Activity
Non-Trading
Oil Exploration
Oil Exploration
Non-Trading
Non-Trading
Non-Trading
Management services
Office
equipment
£
94,793
84,167
178,960
–
178,960
94,793
18,046
112,839
28,056
140,895
38,065
66,121
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Notes to the Company Financial Statements
For the year ended 31 December 2021
6. Right-of-use Assets
Amounts Recognised in the Statement of financial position
Right-of-use assets
Buildings
Lease liabilities
Current
Non-Current
Jersey Oil and Gas plc
2021
£
106,514
106,514
70,970
36,290
107,260
2020
£
76,064
76,064
80,244
–
80,244
These liabilities were measured at the present value of the remaining lease payments, discounted using the
lessee’s incremental borrowing rate as of 1 January 2019. The weighted average lessee’s incremental borrowing
rate applied to the lease liabilities on 1 January 2021 was 3%. The borrowing rate applied for 2021 remained at
3% and the leases relate to office space.
A new lease agreement was entered into in September 2021 with a lease end date of September 2023, this was
in relation to the London office.
Amounts Recognised in the Statement of comprehensive income
Depreciation charge of right-of-use asset
Buildings
Interest expenses (included in finance cost)
2021
£
95,360
95,360
(1,908)
2020
£
92,678
92,678
(3,031)
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Notes to the Company Financial Statements
Jersey Oil and Gas plc
For the year ended 31 December 2021
7. Trade and other receivables
Current:
Value Added Tax
Amounts due from Group undertakings
Prepayments
Deposits
2021
£
2020
£
231,665
25,780,429
75,302
2,692
26,090,088
60,701
16,947,627
25,717
54,222
17,088,267
The balances above were assessed for recoverability under the expected credit loss model. There is no
expected credit loss on these balances. The amounts due from Group undertakings are not interest bearing and
are repayable on demand.
8. Cash and cash equivalents
Cash at bank
9. Called up share capital
Issued and fully paid:
Number:
32,554,293 (2020: 21,829,227)
2021
£
2020
£
12,891,047
4,998,008
Class
Ordinary
Nominal
Value
1p
2021
£
2,573,395
2020
£
2,466,144
Ordinary shares have a par value of 1p. They entitle the holder to participate in dividends, distribution or other
participation in the profits of the Company in proportion to the number of and amounts paid on the shares
held.
On a show of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to
one vote, and on a poll each share is entitled to one vote.
During the year 660,000 ordinary shares were issued to satisfy the exercise of share options which raised
£778,357 (gross). An oversubscribed placing and subscription of shares raised a further £16.61m (gross) with a
total of 10,065,066 ordinary shares issued.
10. Trade and other payables
Current:
Amounts due to Group undertakings
Trade payables
Other payables
Accrued expenses
2021
£
211,678
159,424
346,892
306,566
1,024,560
2020
£
211,678
90,561
59,344
113,298
474,881
Amounts shown as Current: Amounts owed to Group undertakings are repayable on demand.
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JJeerrsseeyy OOiill aanndd GGaass ppllcc
Ground Floor
5 St Andrew’s Place
St Helier, Jersey Channel Islands
JE2 3RP
+44(0)1534 858 622