Annual Report
Year ended 31 December 2023
Jersey Oil and Gas plc
CONTENTS
Overview
Chairman & Chief Executive Officer’s Report
Strategic Report
Strategic Report
Our Assets
Financial Review
Section 172 Statement
Risks
Our Governance
Board of Directors
Corporate Governance Report
Environment, Social and Governance Report
Directors’ Report
Directors’ Responsibilities
Audit Committee Report
Remuneration Report
Independent Auditors’ Report
Financial Statements
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cashflow
Notes to the Consolidated Financial Statements
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the Company Financial Statements
01
04
06
08
10
13
16
18
24
31
33
34
35
40
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48
49
50
51
73
74
75
Jersey Oil and Gas plc
Jersey Oil and Gas is a UK energy company focused on creating shareholder value through the
development of oil and gas assets and the execution of accretive transactions.
2023 was a pivotal year for the Company. Having successfully aggregated the Greater Buchan Area (“GBA”)
resource base and progressed the development planning, two farm-out transactions were executed, bringing in
credible industry partners and the funding required to monetise the area.
Ambition Backed by Actions
Securing the means and the finance to move the GBA project forward into the development phase of activities has
been the key ambition of the Company since taking over sole ownership of the licence area in 2021. The farm-out
transactions with NEO Energy (“NEO”) and Serica Energy (“Serica”) do just that and have transformed the outlook
for the business.
By bringing in leading industry partners, closing out the selection of the GBA development solution and securing a
high-quality floating production, storage and offloading vessel (“FPSO”), JOG has secured the path to delivering a
material long-term income stream from the Buchan redevelopment project. Importantly, the structure of the farm-
out transactions ensure that the Company has secured a series of cash payments, which comfortably finance the
on-going operations of the business, and funding for its remaining 20% interest in the Buchan redevelopment
project.
Fully funded: The transaction delivers material value and results in the Company having a funded 20% interest
in the on-going Buchan redevelopment project
Strong industry partners: NEO (50% interest, Operator) and Serica (30% interest) are major, well-financed UK
North Sea oil and gas operators and the Company has created a strong and credible GBA joint venture
Milestone payments: $18 million of the $38 million cash payments attributable to the two GBA farm-outs has
been received, with a further $20 million due following approval by the North Sea Transition Authority (“NSTA”)
of the Buchan Field Development Plan (“FDP”) and associated regulatory and legal consents
Value creation: Clear path to development sanction and first oil, with JOG's fully funded position meaning the
Company is underpinned by the benefit of zero-capex flowing barrels
Future cash generation: Once onstream, JOG will be a non-operated partner entitled to 20% of the production
from the Buchan field (formally named “Buchan Horst”)
Low carbon development: Redeployment of an existing FPSO vessel that is planned for future connection to a
nearby floating wind power development makes the selected Buchan redevelopment solution the option with
the lowest full-cycle carbon footprint
Strategic Focus
The Company’s vision is centred on successfully growing the business in a smart and sustainable way, developing
important domestic energy supply in response to society’s energy needs and creating value for our stakeholders.
The business is focused on unlocking the organic value of its existing assets in the GBA, combined with the pursuit
of accretive asset acquisitions that bring cash flow, diversity and quality investment opportunities into the portfolio.
Such opportunities are thoroughly assessed in terms of their potential strategic fit, being mindful of the quality and
unencumbered strengths of our existing portfolio.
Solid Outlook
The Company is well positioned to deliver on its strategic objectives. With a cash balance following completion of
the Serica farm-out in late February 2024 of over £15 million, the business is financially secure and funded for the
planned Buchan redevelopment programme. This backdrop provides an attractive springboard from which to
realise the full potential and ambitions of the business for delivering long-term shareholder value.
CHAIRMAN & CHIEF EXECUTIVE OFFICER’S REPORT
Jersey Oil and Gas plc
The financial year under review,
2023, was a transformational one
for JOG and we were delighted to
deliver on
the key corporate
objectives we had set for creating
real shareholder value from our
GBA
and
establishing the path forward for
the GBA development project.
interests
licence
longer
While the GBA farm-out process
than
originally
took
anticipated
complete,
to
throughout it we were mindful of
the fundamental requirement to
deliver a credible and sustainable
result. In short, we were focused on
attracting
industry
partners and agreeing upon the
optimal
solution,
development
being one that aligns with the oil and
gas industry’s support for the UK’s
energy transition and path towards
achieving net zero in 2050.
right
the
in,
interest
Double Farm-out Success
In April 2023, we were pleased to
announce a farm-out transaction
with NEO. NEO acquired a 50%
working
and
operatorship of, both the licences
that cover the GBA, which includes
the Buchan oil field, the Verbier and
several
J2
exploration prospects. Following
swiftly on from completing the NEO
transaction, we were then able to
announce a further farm-out of a
30% non-operated working interest
in
in
November 2023.
discoveries
to Serica
licences
and
the
These transactions, executed on
identical pro-rata deal terms, deliver
material value to JOG, including
certain cash milestone payments,
funding through to Buchan Field
Development Plan (“FDP”) approval
and
development
expenditure carry on the costs
included in the approved Buchan
FDP (a 1.25 carry ratio). NEO is a
major UK North Sea operator
20%
a
producing approximately 90,000
barrels of oil equivalent per day and
is owned by HitecVision AS, a
leading private equity
investor
focused on Europe’s offshore
energy industry with approximately
US$8 billion of assets under
management. Serica is a leading
listed UK oil and gas
London
company producing more
than
40,000 barrels of oil equivalent per
day in the North Sea.
These transactions serve to unlock
the route to monetising gross GBA
resources in excess of 100 million
barrels of oil equivalent and creating
a major new production hub in the
Central North Sea.
Following
completion of the Serica transaction
in late February 2024, we have so far
received a total of $18 million in cash
payments from the farm-outs, with
a further $20 million due following
and
FDP
Buchan
completion of
regulatory
consenting process in due course.
With Buchan first oil targeted for
late 2026, our net 20% carried
is
working
anticipated to generate material
cash
flow, with an estimated
breakeven cost in the initial years of
approximately $15/boe.
approval
the
in the field
interest
the
Isles" FPSO.
Development Solution Secured
A critical component for making the
redevelopment
planned Buchan
project a long-term success was to
secure
right development
solution. In November 2023 we
were very pleased to announce the
execution of agreements to acquire
The
the "Western
FPSO will be utilised as
the
production processing facility at the
centre of the redevelopment. This
high-quality FPSO, which has only
been operational since 2017 and is
already partly owned by our partner,
NEO, is an excellent fit for the GBA.
Transfer of the vessel is subject to
completion of
the necessary
handover activities by the existing
Operator, Dana Petroleum, and
Buchan FDP approval, which
is
targeted for the second half of
2024.
this critical piece of
Securing
the
removes
infrastructure
to construct new
requirement
processing
which
facilities,
significantly de-risks the execution
phase of the project. The FPSO’s
limited
existing specification and
age mean that the modifications
required for the FPSO to meet
Buchan’s development plan are
relatively modest. These are key
factors for minimising the timeline
risks associated with the ultimate
project execution plan. Importantly,
JOG’s 20% cost of acquiring the
vessel is also fully carried under the
terms of the farm-out agreements
and we will benefit from vessel
ownership as opposed to expensive
vessel leasing, which is often a path
taken
similar North Sea
developments.
for
the
transfer
Operational Progress
Following
of
operatorship of the GBA licences to
NEO post completion of the initial
farm-out transaction, we have been
pleased with the pace at which the
project has moved forward and the
level of on-going collaboration.
NEO has formed a high-quality and
experienced project team. The draft
FDP was submitted to the NSTA in
December and the Environmental
Statement was submitted to the
Offshore Petroleum Regulator for
the
and
Environment
Decommissioning (“OPRED”) at the
These
beginning of 2024.
submissions pave
for
obtaining the necessary regulatory
Buchan
approvals
the
redevelopment project
the
in
second half of 2024.
the way
for
In terms of the activities that need to
be completed ahead of project
sanction, we are pleased to report
1
is
and
that all the required Front-End
Engineering and Design (“FEED”)
work
the
on-going,
engineering is progressing to plan.
The planned use of shuttle tanker
offload for oil export from the FPSO
has been endorsed by the NSTA and
finalisation of the preferred gas
export option is moving forward as
and
planned.
Geotechnical surveys are scheduled
the coming
in
for completion
months, with
initial vessel
the
mobilisation scheduled for May
2024. The results of these activities
will be used to finalise the subsea
and drilling rig contract tendering
process and
the FPSO
inform
mooring design.
Geophysical
In line with the strategy for the
future connection of the FPSO to
one of the anticipated floating wind
power developments in the area,
engagement is on-going with the
that were awarded
companies
acreage
licencing
round conducted by Crown Estate
Scotland in 2023. Securing a source
of green power feeds into the post
start-up electrification plan for the
FPSO and does not have an impact
on our target date for first oil.
INTOG
in the
Supporting Energy Transition
is a
The Buchan redevelopment
show case example of energy
transition in the making. Our unique
“R³” development characteristics
have been designed to deliver the
lowest full-cycle carbon footprint
solution achievable, enabling us to
produce a vital homegrown energy
resource and thereby providing
meaningful support for the North
Sea energy transition plan. We are
Redeveloping an existing and known
reservoir to maximise economic
We are Re-using
production.
infrastructure
the
redeployment of an existing FPSO,
and we are modifying the vessel so
that it is Ready for electrification,
which means that involvement in
the exciting
our project has
opportunity
accelerate
to
into offshore wind
investment
through
projects – Energy Transition
Motion.
in
Throughout JOG’s history, a key
part of our strategy has been to
identify and evaluate low cost, early-
stage entry points
into energy
investment opportunities with the
objective of adding value through
maturation. Through our work on
the Buchan redevelopment project
we
important
forged
relationships with major players in
offshore wind development. As a
these
result, working alongside
sector experts, we are evaluating
the Jersey Government’s potential
interest in creating a utility scale
wind farm in the Channel Islands.
have
This is currently early-stage work
with nominal expenditure, utilising
our existing offshore engineering
and commercial expertise, which
has been effectively demonstrated
Buchan
in
advancing
redevelopment
from
inception to where it is now.
the
project
Developing Homegrown Energy
The future of the UK North Sea as a
single holistic integrated energy hub
is hugely exciting and it has the
potential to unlock £200 billion of
investment this decade. Oil and gas
investment remains the key catalyst
to make this happen, an approach
that countries such as Norway are
capitalising on so effectively.
long
threatening
Now more than ever, the North Sea
needs cross party-political backing.
Unfortunately, domestic oil and gas
has been leveraged for short term
the
political gain,
energy security of the UK and
damaging
term economic
growth. The ownership landscape
in the North Sea has dramatically
from Big Oil
shifted away
to
independents
like us and our
partners, that are fully invested in
UK waters.
Whilst it might be
to advocate
headline grabbing
taxing ‘Big Oil’ to pay for green
energy, it is having the adverse
effect, making domestic energy less
Jersey Oil and Gas plc
damaging
competitive and forcing increased
reliance on costly imports. Last year
the UK spent more on importing
hydrocarbons than it spent on the
entire defence budget, a direct
consequence of short-term fiscal
long-term
policy
investment
homegrown
into
energy. Whilst demand for oil and
remains, domestic energy
gas
provides the most effective, lowest
carbon
and
provides an economic bridge to the
future as new energy infrastructure
is created.
available
option
The UK energy sector contributes
to
significantly
the economic
the country and
strength of
generates
needed
much
employment opportunities. The
Buchan redevelopment project is a
great example. The project has the
potential to unlock approximately
£900 million of private sector
investment, create over 1,000 jobs
across
the UK and contribute
millions in value creation and tax
payments into the UK economy. It
will also help facilitate billions of
pounds of investment into cutting
edge, floating offshore wind power
technology.
this
unleash the UK’s potential to power
our future and this is the message
to our
we are communicating
politicians.
Projects
like
Our industry as a whole is engaging
with the major political parties and
in more
other key stakeholders
detail than ever before, with a clear
narrative on the benefits of backing
low carbon, homegrown energy
resources. We continue to monitor
the political landscape closely and
we believe that there is a path
forward to unlock the considerable
benefits that the GBA project can
deliver for the UK economy.
Financial Strength
We ended the 2023 year with cash
of £10.5 million (2022: £6.6 million)
and this was further boasted by a
$6.8 million
net
in
(approximately £5.4 million)
receipt of
2
February 2024 upon completion of
the Serica farm-out.
With JOG now fully carried for its
20% share of both pre-sanction
costs and the capital expenditure to
be set out in the approved Buchan
FDP, the only remaining committed
cash expenditure relates to the core
running costs of the business. We
have moved quickly to right-size the
business following the change to
being a non-operated partner on
the GBA and expect the underlying
core cash spend going forward for
the business to reduce to under £3
million per year, a reduction of 25%
compared to the forecast of £4
million per annum this time last
year.
A full Financial Review is provided
on page 8 of this report.
low
Summary and Outlook
JOG had an exceptional 2023 and
we are delighted to have NEO and
Serica as our partners on the GBA.
The Buchan field is one of the
exciting
and most
largest
developments of
carbon
homegrown energy in the UK North
Sea.
NEO has hit the ground
running with a first-class project
team in place and is progressing the
pre-sanction engineering activities
at pace. Having submitted the draft
FDP and Environmental Statement
to the regulators, we continue to
make good operational progress on
moving the project towards the
target of regulatory approval later
this year.
As always, we are very grateful to
our loyal shareholders who have
backed us to deliver on the key
Jersey Oil and Gas plc
We
objectives we have had for the
business for some time and we were
delighted
to achieve such key
objectives over the course of last
look
year.
to
set of
the next
completing
milestones that will take us closer to
unlocking the full value of the
business and move us into a phase
of substantial cash flow generation.
forward
Les Thomas,
Non-Executive
Chairman
Andrew Benitz,
Chief Executive Officer
10 May2024
3
STRATEGIC REPORT
Our vision is to become a highly
profitable UK independent oil and
gas company through successfully
growing the business in a smart and
sustainable
developing
way,
important domestic energy supply
in response to society's energy
needs and creating value for all our
stakeholders.
Business Review
& Future Activities
The principal activity of
the
Company is that of an upstream oil
and gas business
in the United
Kingdom. JOG is a public limited
company incorporated in England
and Wales
(Company number
07503957) and is quoted on the
Alternative
Investment Market
the London Stock
(AIM) of
Exchange under the ticker AIM:JOG.
The Company is required by the
Companies Act 2006 to set out in
this report a review of the business
during the year ended 31 December
2023 and the position of the
Company at the end of the year, as
well as the principal risks and
The
uncertainties
it
information
these
that
requirements, including discussion
of
future
and
in the
developments, is set out
Chairman and Chief Executive
Officer’s
the
Strategic Report.
the business
faces.
fulfils
report and
joint
Business Strategy
We are focused on building a
resilient business, able to deliver on
our value-led growth strategy with
the aim of generating material long
term returns for our shareholders.
Our strategy is focused on unlocking
the organic value of our existing
assets in the GBA, combined with
the pursuit of potential accretive
asset acquisitions that bring cash
quality
flow,
investment opportunities into the
portfolio.
diversity
and
Central to our strategy is identifying
and stewarding the right assets,
where we can add value. Our key
strategic priorities set out how we
will achieve this, namely:
Leveraging the value of our core
GBA assets
the
Capitalising on
team’s
experience and track record of
successfully developing and
growing energy businesses
Engaging in strategic M&A
Maintaining a prudent and
disciplined financial structure.
has
Company
History & Growth
The
grown
organically and through strategic
transactions to become one of the
highest quality small-cap oil and gas
companies quoted on the AIM
market in London.
The company was formed in 2014
via a c.£500k combination with
London quoted company Trap Oil
Limited in 2015. We recapitalised
the business, refocused the asset
portfolio on the core UK North Sea
licence area we have today and
established an exciting and fully
funded position in one of the UK’s
most material oil development
projects.
The delivery of this strategic plan
has been made possible by
funding and
industry
attracting
investment
capital
our
into
expenditure programmes, along
with prudent cost management,
resulting in only £43 million of equity
being raised since inception. With
the
in
redevelopment project
progress for our core asset, the
Buchan oil field, which lies at the
heart of the GBA, we are poised to
potentially unlock multiples of this
value for our shareholders.
The GBA is estimated to contain
gross discovered and recoverable oil
volumes of over 100 million barrels
Jersey Oil and Gas plc
across the Buchan field and the
Verbier and J2 discoveries, along
additional
with
exploration upside opportunities.
significant
Greater Buchan Area
2023 was a pivotal year for the
Having successfully
Company.
aggregated the GBA resource base
over recent years and progressed
the development planning required
to monetise the area, the farm-out
transactions required to bring in
credible
industry partners and
funding were executed during the
year.
for entering
In exchange
into
agreements with NEO and Serica to
divest an aggregate 80% interest in
the two licences that comprise the
GBA, the Company receives:
A carry for JOG’s 20% share of
the estimated $25 million cost to
take the Buchan field through to
FDP approval
A 20% carry of the Buchan field
development costs, as approved
in the FDP; equivalent to a 1.25
carry ratio – estimated capital
expenditure of £850-950 million
(100%)
$3.2 million cash on completion
of the transactions
$15 million cash payment for
the GBA
of
finalisation
solution
development
associated with acquisition of
the Western Isles FPSO
$20 million cash payment
following approval by the NSTA
of the Buchan FDP and receipt
of associated regulatory and
legal consents
$8 million cash payment on each
FDP approval by the NSTA in
respect of the J2 and Verbier oil
discoveries
Having completed the transactions
with NEO in June 2023 and Serica in
February 2024, along with finalising
4
Jersey Oil and Gas plc
the development
securing the acquisition of the
solution and
Western Isles FPSO, the Company
has received a total of $18 million of
the
agreed
abovementioned
milestone cash payments so far.
Growth Through Acquisitions
Our primary focus remains on
meeting the next key milestone for
the GBA, being FDP approval for the
Buchan redevelopment project, and
unlocking the full value of the wider
area. At the same time we continue
to review and consider potential
asset acquisition opportunities that
our
could bring cash flow, diversity and
investment opportunities
quality
Such
portfolio.
into
opportunities
thoroughly
are
assessed in terms of the potential
strategic fit, being mindful of the
quality
unencumbered
strengths of our existing portfolio.
and
5
OUR ASSETS
the
assets
JOG has constructed a high-quality
UK North Sea
licence portfolio
focused on the GBA. At the heart of
our
planned
is
redevelopment of the Buchan oil
field
“Buchan
Horst”), for which first production is
targeted in late 2026.
Quality portfolio:
(formally named
the GBA
consists of two licences, P2498
and P2170, which contain the
Buchan redevelopment project,
the J2 and Verbier oil discoveries
and
drill-ready
exploration prospects
several
Strategic focus: JOG established
the GBA by consolidating the
licence interests and taking sole
ownership of
the portfolio,
thereby providing control and
flexibility to shape the optimal
way
to
monetisation
forward and
route
Material
resource base:
in
aggregate the GBA licences are
estimated
to contain gross
discovered oil and gas resources
of over 100 MMboe
Route to monetisation: JOG
completed pivotal transactions
in 2023 to secure two high-
quality
industry partners and
funding to develop the GBA
Valuable equity interest: JOG
owns a 20% non-operated
interest in the GBA, with funding
to Buchan first oil provided by
the GBA partners following its
farm-out
transactions
completed in 2023
Strong Industry Partners: NEO
(50%
interest, Operator) and
Serica (30% interest) are leading
independent
gas
oil
operators, with the companies
being the fifth and ninth largest
producers in the UK North Sea
respectively
and
Greater Buchan Area
The GBA is well positioned to deliver
material long term income from a
high-quality development solution
that is aligned with the UK’s energy
transition strategy.
High-quality infrastructure : The
GBA is to be developed using the
redeployment of the ‘Western
production,
Isles’
storage and offloading vessel
(FPSO), a vessel that has only
been in operation in the UK
North Sea since 2017
floating
‘Hub and Spoke’ solution: The
FPSO will be deployed as the
central oil and gas processing
facility for the area, with initial
production coming from Buchan
followed by the planned tieback
of the other GBA feeder fields
Low
carbon
development:
Combining re-use of an existing
FPSO, made electrification-
ready for connection to one of
the planned nearby floating
power
wind
offshore
it the
developments, makes
lowest
carbon
full-cycle
footprint solution for the area
is
of
new
involves
The plan
Central to the creation of the GBA
production
the
hub
redevelopment of the Buchan oil
field.
the
subsea
installation
production gathering infrastructure
tied back to the
Isles’
FPSO.
Agreements have been
executed for acquisition of the
vessel, with handover of the FPSO
scheduled
following
to occur
approval of the Buchan FDP.
‘Western
to
The Buchan field is to be produced
through up
five gas-lifted
production wells, supported by two
water injection wells. Oil will be
offloaded from the FPSO via shuttle
tanker and excess gas will be
exported via a new gas export
pipeline. The FPSO will be modified
to be ‘electrification-ready’ prior to
redeployment to the field, such that
it can be connected to one of the
floating
anticipated
third-party
Jersey Oil and Gas plc
located
wind power developments that are
intended to be
in close
proximity to the GBA following the
Innovation and Targeted Oil & Gas
(INTOG) licence awards made by
Crown Estate Scotland in 2023.
from
is
Approval of the Buchan FDP
scheduled for the second half of
2024, with first production targeted
for late 2026. Following start-up of
Buchan,
production
subsequent development activities
are expected to involve the tie-back
of the J2 and Verbier oil discoveries
that lie within the GBA licence area
and the potential for regional third-
party discoveries to be tied back to
the FPSO.
industry’s
Buchan Redevelopment
The Buchan field is considered one
of the largest development projects
in the UK North Sea and forms the
central element of creating a
production hub that is in-sync with
the
decarbonisation
strategy.
Material resources: the Buchan
field
is estimated to contain
gross discovered oil and gas
resources of approximately 70
MMboe (95% oil), representing
the third largest development in
the UK North Sea
Well
understood
reservoir:
Buchan was in production for 36
years, under the ownership of
BP, Talisman and Repsol-
Sinopec.
field was
The
prematurely shut-in during 2017
issues with the host
due to
processing
leaving
significant untapped potential
that is being targeted by the
field redevelopment plan
facilities,
Optimised
subsurface plan:
Deviated production wells are to
be drilled in the crest of the
latest 3D
structure using the
seismic, with reservoir pressure
support provided by water
6
injection,
recovery from the field
to maximise oil
The P2498 Buchan
licence was
awarded to JOG in 2019, as part of a
wider area development strategy
for the GBA. The Buchan oil field
lies in approximately 110 metres of
water and is located in UKCS blocks
20/05a and 21/01a, 150km northeast
of Aberdeen in the UK North Sea.
The field was discovered by well
21/01-1 in 1974, which encountered a
~600 metre oil column in over-
pressured, fractured, sandstones of
the Upper Devonian
to Lower
Carboniferous Buchan Formation.
The field comprises a horst-like,
tilted, and eroded fault block with
four-way dip closure.
Following
appraisal drilling to delineate the
field, Buchan was bought
into
production by BP plc in 1981 with
nine development wells and had
initial peak oil production of
approximately 55 kbbl/d.
Over a period of 36 years the
Buchan field produced 148 MMbbl
of 33 °API sweet crude oil, together
with 37 Bscf of associated gas. The
field ceased production in 2017 due
to the certification limitations of the
Buchan Alpha floating production
vessel
the
processing facility for the field. At
the time the field was shut-in, only
around 29% of the estimated mid
case oil in place had been produced
at a water-cut of approximately
50%.
that was used as
termination of
The premature
production
subsequent
and
relicensing of the acreage to JOG,
has provided the opportunity to
implement an optimised and fit-for-
purpose
plan
designed to maximise economic
recovery and exploit the significant
potential of the field.
redevelopment
the
springboard
GBA Feeder Fields
The Buchan redevelopment plan
provides
for
monetising the wider GBA portfolio.
FPSO feeder fields: The Verbier
& J2 oil discoveries contain
estimated mid
case gross
resources of over 40 MMboe
Phased
lie
development
plan:
within
Discoveries
approximately 12km of the GBA
infrastructure planned
central
for
field
Buchan
the
redevelopment and can be tied
back to the FPSO to extend GBA
peak production rates
Potential exploration upside:
The drill-ready Cortina, Wengen
and Verbier Deep exploration
prospects all lie within the GBA
licences
Potential third party tie-backs:
The opportunity exists to secure
potential
tariff
revenue from the tie-back of
third party discoveries that lie in
the vicinity of the GBA
processing
Verbier Discovery
The “Verbier” oil discovery is located
in Blocks 20/5b and 21/1d in licence
P2170. Having completed farm-
outs to Equinor and CIECO in 2016,
an exploration well, followed by an
the
appraisal well, delineated
JOG
Verbier oil discovery.
subsequently
the
consolidated
licence
interests to obtain sole
control of P2170 and established the
discovery as part of its wider GBA
development strategy.
The Verbier discovery, drilled by
well 20/05b-13Z, is considered to be
an extension of the Kimmeridge
Clay Burns Sandstone J2 discovery
and is located some 3-4 km due west
of well 20/05a-10Y. The Upper
Jurassic sequence is relatively thin
over the upthrown Buchan and
Jersey Oil and Gas plc
Scotney highs but thickens rapidly
into the North Buchan Trough to the
north and east. This stratigraphic
interval has been tested by well
20/05a-10Y and has also proved to
reservoir
contain good quality
within
the Kimmeridge Clay
Formation in wells 20/05b-13 and
13Z drilled in 2017 by Equinor.
J2 Discovery
The “J2” oil discovery is located in
the P2498 Buchan
licence area
(Blocks 20/05a and 21/01a) and was
drilled by well 20/5a-10Y in 2006.
The well was drilled as a deviated
well to test the westerly culmination
of a 3-way dip and fault closed
structure mapped at Late Jurassic,
Sgiath Formation level and located
on a structural terrace downthrown
to the north of the Buchan field. The
well encountered hydrocarbons
within the objective shallow marine
Sgiath Formation Sandstone that
flowed at 2,850 bopd plus 1.2
mmscfd (37 degree API, GOR 426
scf/bbl) on test. The well also
encountered
of
excellent quality, deep marine, intra
Kimmeridge Clay Formation, Burns
Sandstone that flowed at 4.8 kbbl/d
plus 2.6 mmscfd (39 degree API,
GOR 500 scf/bbl) on test. JOG
estimates that the J2 oil field
contains approximately 20 MMboe
of mean case
recoverable oil
volumes across the two reservoirs.
~16 metres
7
FINANCIAL REVIEW
As a consequence of the GBA farm-
the Company materially
outs,
its financial outlook
transformed
The transactions
during 2023.
unlocked
receipt of cash
the
milestone payments, which means
the business is well covered for its
running costs prior to the start-up of
planned GBA production. Critically,
the deals also provided the finance
required for the Company’s retained
the Buchan
in
20%
redevelopment project. This means
that the business has secured a path
to monetising the GBA without
recourse to either shareholders or
the debt markets. This uniquely
positions the Company amongst its
UK listed peers.
interest
Cash Resources and
Short-Term Investments
The Group ended 2023
in a
comfortable position, with cash and
£10.5m
deposits
term
(2022:£6.6m) and no debt.
of
of
Statement
Consolidated
Comprehensive Income
The Group had no trading revenues
in 2023. Administrative expenses
increased from £3.2m in 2022 to
£5.7m while
Income
increased 39% from the prior year to
£0.1m.
interest
fees
incurred
Expensed Costs
The year was defined by
the
successful double farm-out of the
GBA licences, which resulted in the
Group incurring associated external
consultancy fees. The deal related
in 2023
external
totalled £0.8m (2022:nil) and were
in respect of M&A, tax and legal
services. The
transactions also
crystallised bonus payments to staff
and Executives of £0.9m (2022:nil).
In addition, there was non-cash
share-based charges of £1.6m
during the year (2022:£1.2m).
The core cash overheads of the
business absent the above deal-
Jersey Oil and Gas plc
specific and non-cash costs were
£2.4m (2022:£2.0m) and £2.3m
(2022: £1.9m) net of interest.
Capitalised Costs
Costs directly associated with the
GBA development project continue
to be capitalised and amounted to
£1.1 million in 2023, net of partner
recharges.
(2022: £2.9 million).
These costs were a combination of
of
license
engineering studies and manpower
costs required to select the optimal
and
development
to
approval
regulatory
advance
through submission of a Concept
Select Report to the NSTA.
completion
solution
fees,
During the year, £0.4m of costs
were recovered as a result of NEO
becoming a GBA partner, effective 1
April 2023, and Operatorship
subsequently transferring in June
2024. Recovery in the second half
of the year mainly related to
secondment of JOG personnel to
the NEO project team.
Simplified Summary of 2024 (refer page 48-50 for Full Audited Group Financial Statements)
Cash Movement in Year
Cash & Deposits 1 Jan 2023
NEO Farm-Out
- Receipt
- Fees / Bonuses
Overheads (incl. interest)
- Expensed
- Capitalised
Cash & Deposits 31 Dec 2023
Loss in Year
Overheads (incl. interest)
NEO Farm-Out Fees / Bonuses
Non-Cash - Share Option Charges
Balance Sheet (Intangible Assets)
Cost Capitalised
NEO Farm-Out Receipts
£ million
6.6
9.1 •
-1.7 •
-2.3 •
-1.2 •
10.5
£ million
-2.3 •
-1.7 •
-1.6
-5.6
£ million
1.2 •
-9.1 •
-7.9
8
Underlying Cash Costs
The combined core cash overhead
and capital expenditure
spend
during the year was £3.5m. This
compares to the £4.0m forecast in
last year’s financial statements.
the
With
of GBA
transfer
operatorship and completion of the
farm-outs the Group has moved
swiftly to prune underlying forecast
cash costs further to under £3m per
annum.
the Group’s
Cash Receipts from Farm-outs
As a result of the NEO farm-out, two
payments were received during the
year totalling £9.1m. In accordance
farm-out
with
accounting policy these payments
were credited against the book
value of the GBA (exploration and
evaluation asset) carried on the
Consolidate statement of financial
position. Completion of the Serica
farm-out in Feb 2024 resulted in a
further cash receipt, net of a £0.5m
cost carry reimbursement pass-
through to NEO, of £5.5 m.
and
(50%)
concept
Key Performance Indicators
The Group’s Key Performance
Indicators (“KPIs”)
in 2023 were
dominated by the key driver for the
business – the farm-out of the GBA
progress
licences
towards FDP through finalising the
development
selection
process (30%) These were met
through the farm-outs agreed with
NEO and Serica and obtaining
alignment on the concept select
captured
FDP.
Additionally, there was a financial
tightly
related
KPI which
controlled cash expenditure (20%)
and non-financial KPIs which relate
to Health, Safety, Security and the
Environment (“HSSE”) (10%). These
were delivered through the absence
of any HSSE
incidents and the
continued delivery of core cost
cost
through
reduction
management
reduced
manning.
the draft
tight
and
to
in
In summary, on all fronts the KPI’s
were fully achieved, resulting in a
highly successful year.
Jersey Oil and Gas plc
Going forward the central KPI is
securing FDP approval for the
Buchan redevelopment project. The
importance
cost
management and
safe, ESG-
conscious operations are also
reflected in the 2024 KPI’s.
prudent
of
redevelopment of
Outlook
Having delivered a full carry on both
pre-sanction costs and the capital
expenditure to be set out in the
approved Buchan FDP, the Group
has secured full funding for the
the
planned
Buchan field. In addition, the end of
2023 cash position of £10.5m has
been materially increased by the
receipt upon
£5.5m net cash
completion of the Serica farm-out in
February 2024. This sits aside a
where
right-sized
spend going
underlying
forward has been reduced to under
£3m per year. As a consequence of
these substantial advances,
the
Group entered 2024 in a financially
robust position.
business
cash
Graham Forbes
Chief Financial Officer
10 May 2024
9
Jersey Oil and Gas plc
SECTION 172 STATEMENT
The Directors are required by law to act in a way that promotes the success of the Company for
the benefit of shareholders as a whole. In so doing they must also have regard to wider
expectations of responsible business behaviour and have regard to the Company’s stakeholders
and the matters set out in Section 172(1) of the Companies Act 2006.
The Board fully recognises the need to balance the contrasting and, at times, conflicting interests of various
stakeholder groups, whilst focusing on the Company’s purpose, values and strategic priorities. Such engagement
underpins the governance framework embedded throughout our business and helps to ensure we maintain the
highest standards of business conduct.
During the year the Directors have actively engaged with a number of our stakeholders to build understanding of
their position and what matters to them. This understanding is factored into the Board’s decision-making process.
In relation to the decisions made by the Board during the year ended 31 December 2023, the Board consider, both
individually and together, that they have acted in the way they consider, in good faith, would be most likely to
promote the success of the Company for the benefit of its shareholders as a whole, having regard to its stakeholders
and the matters set out in Section 172(1) of the Companies Act 2006.
Set out below are examples of the Board’s key decisions made during the year, which illustrate how the Directors
have fulfilled their duties.
Decision
NEO Energy Farm-Out Transaction
Context &
Link to Strategy
In April 2023, the Company entered into a farm-out agreement with NEO to divest a 50%
interest in, and operatorship of, the GBA licences in return for a number of cash milestone
payments and a carry for certain elements of JOG’s retained 50% interest in the Buchan
field redevelopment capital expenditure programme.
Stakeholders
Investors, Employees, Regulator
Process
The Board considered the terms of the agreement and decided that it was in the best
long- term interest of the Company based on a number of factors, including:
The transaction was key to delivering upon the Company’s core strategic objective of
unlocking the value of the GBA, by establishing a path forward for the development of
the Buchan field and the associated financing requirements.
The transaction provided the Company with the critical first step required to bring in
credible and financially robust GBA joint venture partners.
Through the transfer of operatorship to NEO Energy, a technically strong partner
capable of executing the required development programme was secured.
Both NEO and JOG were aligned on the optimal development solution for the GBA
and the strategy required to secure the necessary infrastructure.
The transaction secured the necessary financing to take forward the Buchan
redevelopment project to regulatory sanction and on to first production, as well as
delivering cash payments to fund the running of the business in the medium to long
term.
The execution of this financially prudent and value accretive transaction creates value
for shareholders and job security, while ensuring regulatory compliance and the
generation of additional potential opportunities for the business.
10
Jersey Oil and Gas plc
Decision
Serica Energy Farm-Out Transaction
Context &
Link to Strategy
In November 2023, the Company entered into a further farm-out agreement with Serica
to divest a 30% interest in the GBA licences in return for a number of cash milestone
payments and a carry for certain elements of JOG’s retained 20% interest in the Buchan
field redevelopment capital expenditure programme.
Stakeholders
Investors, Partners, Employees, Regulator
Process
The Board considered the terms of the agreement and decided that it was in the best
long- term interest of the Company based on a number of factors, including:
Delivering an overall solution for the Company’s funding requirements for retaining a
material 20% interest in the GBA licences and in particular, the Buchan redevelopment
project.
By augmenting the GBA joint venture with the addition of Serica Energy, the
transaction further strengthened the technical and financial robustness of the
partnership.
The transaction further enhanced the financial strength of the Company by unlocking
additional cash milestone payments.
The transaction removes the need for the business to raise additional equity to fund its
share of the Buchan field redevelopment programme.
By securing a complete farm-out solution for the GBA, the transaction is fully aligned
with the Company’s stakeholder objectives.
Engaging with our stakeholders is an integral part of how we operate as a business. This engagement enables us to
continue building the business and maintain a motivated workforce, dependable supply chains, close relationships
with Government Regulators, while providing good returns for our shareholders and a positive social impact on our
local communities. We set out below our key stakeholder groups and how we engage with them.
Human Resources
Employees
Contractors
Advisers
Shareholders
Shareholder
Communication
Our staff and contractors are key to delivering on 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. We are proud of what we have built and
achieved and work to ensure the business applies good governance practices, based on
strong principles and leadership. We value all employees and we ensure that our
communications are inclusive, providing full transparency across the business. As a
Company, 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 ambitions
and their views help inform our decision-making. Communication and engagement are
critical to this aim. We held our last Annual General Meeting in June 2023. Our financial
results are announced twice a year, and regulatory news announcements provide
communication to our shareholders throughout the year, along with our Annual Report
which is designed to help investors and other stakeholders understand our business and
its performance. In conjunction with our announcements our Chief Executive Officer
and other members of the Executive Team meet regularly with, and update, our
investors. Substantial work has gone into revamping the Company’s website in order to
provide useful information on our operations and investment outlook. The new website
is now live.
11
Jersey Oil and Gas plc
Suppliers
Procurement and
Contracting
The Company’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
governance, risk management and prompt payment protocols. Our effort is to always
be 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, in order to make 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.
Joint Venture Partners
NEO Energy &
Serica Energy
The success of the GBA development will be closely linked to successful engagement
and communication between the GBA joint venture partners.
Regular engagement takes place at all levels within the three organisations, through
both regular dialogue and written communication. Formal meetings where all three
partners are present include Steering and Technical committee meetings, which are
held on a monthly basis.
Community
Corporate
Citizenship
Government
Industry Regulators
We aim to be a contributor to economic growth by providing investment opportunities
and creating jobs. 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
including raising funds for the Beresford Street Kitchen Charity based in Jersey that
provides quality education, training and employment for people with learning
disabilities and/or autism. As a result of a recent office downsizing, we donated surplus
office equipment to help meet the needs of a local school in London. We also sponsor
the Jersey Oil and gas curling team, who play in the Aberdeen Finance League.
Regulators are key external stakeholders across various aspects of our business and
particularly in activities that require statutory permits or consents. Briefings and
meetings with the various regulators occur at regular intervals, typically corresponding
to entering a new phase of activity or key project phases on the GBA, to provide updates
on schedules, a look-ahead on work to be undertaken and to advise of any forthcoming
regulatory submissions or notifications.
The Company maintains an active dialogue with its principal regulator, the NSTA.
Throughout the year under review and during the period up to the publication of the
Annual Report, we discussed the Company’s progress on developing and farming out
the GBA and ultimately obtained approval for both the GBA farm-outs, approval for the
transfer of licence Operatorship to NEO and agreement on the Buchan development
concept; all of which culminating in assisting NEO with the submission of the draft
Buchan FDP in late 2023. Throughout the period we were also actively engaged with
the owners of nearby infrastructure and future developments.
12
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 must be carefully balanced to maximise the chances of providing attractive returns for our shareholders.
These risks are managed with the oversight of the Board. A risk register is reviewed on a routine basis with the
primary risks being presented and discussed 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
Material changes in
Governmental approach
towards continued
hydrocarbon exploration,
development and
production
Regulatory obligations
Judicial review
Adverse taxation and
legislative changes
Material oil price
movements
The primary risk to the Group, having secured the GBA farm-outs, is securing
sanction of the Buchan redevelopment project – both from our industry
regulators, the NSTA and our joint venture partners.
The Group works continually to foster positive relationships at all levels with
relevant government and regulatory bodies, including but not limited to the
NSTA and the Department for Energy Security and Net Zero / OPRED.
However political uncertainty, due to an upcoming UK general election, may
result in a wide disparity in the resultant government approach and attitude
towards approval of future UK hydrocarbon development projects.
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
February 2025 and August 2026 respectively. Retention of each licence
requires the relevant FDPs 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.
Joint Venture sanction (Final Investment Decision, “FID” approval) of the
Buchan redevelopment project is dependent on successful completion of the
ongoing FEED activities and finalisation of the subsurface modelling work. This
will allow an FID decision to be taken by the joint venture partners based on the
projected budget and perceived financial prospects for the project set against
the anticipated risks.
The major external risk factors which are likely to influence project sanction are
long term views on oil prices and the anticipated attractiveness and stability of
the UK’s fiscal regime for the oil and gas sector. Widely diverging taxation rules
for the UK offshore sector have been suggested by the various political parties
in the run up to the General Election, thereby introducing risk and uncertainty.
Post-election however, the underlying economic logic of seeking to maximise
UK jobs and tax revenues by supporting the sector while hydrocarbon demand
remains, is anticipated to prevail.
Approval of the FDP for the redevelopment of the Buchan field, along with
partner sanction, is key to achieving future cash flows from the field. Obtaining
the necessary approvals cannot be guaranteed, although the Company will
continue to work closely with the various regulatory authorities and its joint
venture partners to ensure a robust and socially responsible development plan
is approved and developed for the field. External challenges to NSTA’s
approval of any FDP are possible, which may result in judicial review, potentially
resulting in substantial delays to both the project and receipt of the remaining
$20m of farm-out payments from NEO and Serica.
13
Jersey Oil and Gas plc
The Group is operating in an evolving environment where the energy transition
and decarbonisation of the wider economy will impact current and future
operations. 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 Group may expand its portfolio through the acquisition of growth assets in
the future to provide asset diversification. This could result in the Group facing
additional risks.
The market price of oil has seen relative stability over the last 18 months broadly
trading within the $70 –90 range. However, commodity prices can be volatile
and are outwith the control of the Group.
Financial Risks
Availability of industry
funding and / or access to
capital markets
By securing the GBA farm-out deals with two strong industry partners the
Group has addressed the key near term funding risks identified in last year’s
Annual Report.
Oil and gas price
movements
Long term cost overruns
and inflation
Regulatory and compliance
risks
In addition to substantial cash payments, the Group is carried for all pre-
sanction costs associated with its remaining 20% equity holding in the Buchan
redevelopment project. Furthermore, the Group is also fully carried through
the work programme for the Buchan redevelopment project included in the
FDP budget approved by the joint venture partners and the NSTA.
It should be noted that the Group is exposed to the risk of potential cost
overruns in the event that the approved development budget is exceeded. This
is mitigated by agreement amongst the joint venture partners on actions
regarding contracting strategy to lock in costs and the provision of appropriate
contingencies.
Close relationships are maintained with banks and the investor community as
the Group may require additional capital to facilitate potential future
acquisitions or to meet project development cost over-runs. While no needs
currently exist the ability to flexibly access such funding is invaluable. We are
also regularly in talks with various third parties and shareholders, regarding the
potential provision of capital, with which to execute any future acquisitions.
Based on current budgets and forecasts, the Group is well-funded to pursue its
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 expects to be able to operate during 2024 and beyond within its existing
cash reserves based on its current work programme, subject to there not being
any material unforeseen 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,
nevertheless the underlying medium/long term strength of oil prices can
impact on development sanction decisions and the ability to raise funds, if
required, as it can impact the value of its assets.
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.
14
Operational Risks
Co-venturer and other
counterparty risk
Loss of key employees
Delay and cost overruns,
including weather related
delays
HSSE incidents
Failure of third-party
services
Inherent geological risks
and uncertainties
Jersey Oil and Gas plc
During the year the operational risks of the business have evolved substantially
as a result of the GBA farm-outs to NEO and Serica. The introduction of these
experienced and knowledgeable partners to the GBA licences, and the inherent
risk diversification resulting from working in a joint venture partnership, have
been positive factors in mitigation of operational risk. The GBA development is
now being operated by an established, experienced and diverse team with the
capabilities, skills and knowledge, to tackle many of the operational risks
associated with current and planned activities including HSSE and the
management of third-party contractors and service suppliers.
With the farm-outs, and transfer of Operatorship in the GBA to NEO, the Group
is exposed to the usual range of co-venturer risks, including the ability of co-
venturers to finance their own share of asset expenditures. Such risks should
however be mitigated by the scale and capabilities of both new co-venturers.
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. The Group tries to ensure that it is leanly but appropriately staffed
and that employees are working under contracts that provide the Group with a
degree of protection, should people leave its employ. Retention of key staff is
aided by the award of share options and a bonus scheme 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.
Full operational risk cover is provided as required through the Group’s
insurance brokers. The Group monitors and evaluates all aspects of HSSE
performance including those of the GBA Operator 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, and oversee those of its asset operators, to ensure they are carried
out 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.
15
BOARD OF DIRECTORS
Jersey Oil and Gas plc
Les Thomas
Non-Executive Chairman
Andrew Benitz
Chief Executive Officer
Graham Forbes
Chief Financial Officer
Les Thomas has over 40 years’
in the oil and gas
experience
in various subsurface,
industry
engineering, operational
and
senior management positions. He
has been instrumental in growing
large
a number of small and
publicly listed businesses, through
phases of organic growth and via
asset acquisitions and corporate
He has also
transactions.
delivered upon the successful sale
and exit of various assets and
companies.
its
Les was formerly the CEO of
Ithaca Energy from 2013 to 2020
and previously served for eight
years on the Board of John Wood
Group plc, as the Chief Executive
of
Facilities
Production
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.
Les is an independent director of
Repsol Resources UK Limited,
which has a significant UK North
Sea portfolio, a Non-Executive
Director of privately owned
Denholm Energy Services Ltd, as
well as serving as a Non-Executive
Director of Avingtrans Plc, an AIM
and
engineering
quoted
manufacturing business.
Les has a BSc (1st class hons) in
Civil Engineering and a master’s
degree in petroleum engineering,
both from Heriot Watt University
in Edinburgh.
in
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 20
financial
years’ experience
company
markets
and
Andrew has
management.
significant experience in leading
and growing ambitious and
focused oil and gas businesses
listed
and has a wealth of
company experience.
Prior to founding Jersey Oil and
Gas, Andrew was CEO of
Longreach Oil and Gas Ltd, a
TSX-V quoted company. He
joined Longreach in 2009 as Chief
Operating Officer when it was a
company and
small private
oversaw the company’s growth,
by building a significant portfolio
of oil and gas assets in Morocco.
Prior to his move into industry,
Andrew worked at Deutsche Bank
AG as an Analyst within the Oil
and Gas
Investment Banking
Group, as well as within the Equity
Capital Markets team, where he
worked on a broad range of oil
and gas M&A
transactions,
together with equity and equity-
related financings.
Andrew
is a Non-Executive
Director of Kalahari Copper Ltd,
an African copper exploration
business and a
founder and
Director of Titan Properties SL, a
real estate business in Spain.
Andrew has a BSc (Honours) in
Commerce
Edinburgh
from
University.
Graham Forbes is a Chartered
Accountant with over 20 years’
in the oil and gas
experience
industry. Graham has a wealth of
experience of managing and
financing growing private and
publicly
listed oil and gas
companies, along with significant
M&A experience.
both
Prior to joining Jersey Oil & Gas in
2021, Graham was the CFO of
Ithaca Energy from 2010 to 2020.
During this period, Graham was
instrumental in transforming the
a major
company
into
operator
independent UKCS
organic
through
developments
and multiple
acquisitions. He has extensive
quoted company and corporate
finance
having
experience,
completed various debt and
equity market offerings and the
US$1.2
and
sale
Ithaca
subsequent delisting of
Energy.
billion
of
operational
Graham qualified as a Chartered
Accountant
at
PricewaterhouseCoopers before
moving to ExxonMobil, where for
over five years he worked on a
variety
and
acquisition-based projects. Prior
to his move to Ithaca Energy,
Graham joined First Oil Group in
2002 where, as Finance Director
and then Executive Director, he
helped develop the business into
the UK’s then largest privately
owned E&P company.
Graham has a MA(Hons)
in
Economics with Accountancy
from Aberdeen University.
16
Jersey Oil and Gas plc
Frank Moxon
Senior Independent Director
Marcus Stanton
Non-Executive Director
a
as
Frank Moxon has nearly 35 years’
experience
corporate
financier and financial adviser to
companies, ranging from start-
ups to businesses over £3 billion in
size, in a wide range of industry
sectors. For the last 26 years, he
has specialised in the oil & gas and
mining sectors, where he has
successfully
growth-
focused companies on financial
structuring, equity and debt
capital
and M&A
transactions across a variety of
different strategic contexts and
geographic locations. He played a
key role in facilitating the reverse
takeover
the
Company to its initial oil & gas
asset portfolio.
introduced
raisings
advised
that
Frank has held several senior
management roles within the
financial services industry and, in
addition to having been Senior
Independent Director at Cove
Energy Plc, has been a director of
various oil & gas and mining
in London,
companies
listed
Australia and Canada. He
is
currently also President of the
East of England Co-operative
Society.
Frank has a BSc in Economics and
is an Honorary Chartered Fellow
Institute for
of the Chartered
Securities & Investment, a Fellow
of the Energy Institute and of the
Institute of Materials, Minerals &
Mining and a member of The
Geoscience Energy Society of
Great Britain.
of
AIM
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
number
quoted
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. Through
these various Board positions,
Marcus has been
in
providing strategic guidance on
all of the many complex aspects of
developing and financing growing
publicly
companies
operating across the oil and gas
sector.
involved
listed
roles
Marcus qualified as a Chartered
Accountant at Arthur Andersen,
where he worked in the oil and gas
division. His previously held
include Chief
banking
Operating 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.
Marcus is a Fellow of the Institute
of Chartered Accountants
in
England and Wales and a
Chartered
the
Fellow
Chartered Institute for Securities
and
Marcus
graduated from Oriel College,
Oxford.
Investment.
of
17
Jersey Oil and Gas plc
CORPORATE GOVERNANCE REPORT
Jersey Oil and Gas is committed to maintaining a high standard of corporate governance and
believes that effective governance is essential to its success
As Chairman of the Board it is my responsibility to ensure that appropriate policies and procedures are in place and
operate efficiently.
The Board of Directors of Jersey Oil and Gas believes that a sound corporate governance policy, involving a
transparent set of procedures and practices, is an essential ingredient to the Company’s success both in the medium
and long term. The application of this policy enables key decisions to be made by the Board as a whole, and for the
Company to function in a manner that considers all stakeholders, including employees, suppliers and business
partners.
The Board of Directors has overall responsibility for setting the Company’s strategic aims, defining the business
plan, strategy and managing the financial and operational resources of the business. The delivery and
implementation of the business plan and strategy resides with the Chief Executive Officer and the executive team.
At the current stage of the Company’s development, the Board believes it appropriate to work in line with the
Corporate Governance Code prepared by the Quoted Companies Alliance. The code is designed for growing
companies and provides an effective and proportionate governance framework that is reflective of our Company’s
culture and values.
Corporate Governance Framework
The Quoted Companies Alliance (QCA) Code requires the Company to apply the ten principles of corporate
governance as set out below and to publish related disclosures in the Annual Report, on the corporate governance
section of the website: www.jerseyoilandgas.com, or a combination of the two. Jersey Oil and Gas has followed the
QCA Code recommendations and is pleased to set out the information below in relation to all the principles.
1. Business Strategy
Jersey Oil and Gas is a UK energy
focused on creating
company
shareholder value
the
development of oil and gas assets
and the execution of accretive
transactions.
through
The strategy of the business
is
focused on unlocking the organic
value of our existing assets in the
GBA, combined with the pursuit of
potential acquisitions that bring
cash flow, diversity, and quality
investment opportunities into the
portfolio.
Central to the strategy is identifying
and stewarding the right assets,
where the Company can add value.
The key strategic priorities for
achieving this involve:
Leveraging the value of our core
GBA assets
the
Capitalising on
team’s
experience and track record of
successfully developing and
growing oil and gas businesses
Engaging in strategic M&A
Maintaining a prudent and
disciplined financial structure
risks
and
on
Information
uncertainties that may represent
challenges to the execution of the
Company’s strategy and business
model and how such risks and
uncertainties are managed by the
Company are set out in the Risks
section of this Annual Report.
2. Shareholder Communication
The Board considers that good
communication with shareholders,
based on the mutual understanding
In
is
of objectives,
addition to the publication of the
Company’s Annual and
Interim
reports, there is regular dialogue
important.
between the Board (led by the Chief
Executive Officer) and shareholders,
as well as the
issuance of the
required public announcements.
The Chief Executive Officer and the
Chief Finance Officer give regular
presentations to investors, including
one-to-one meetings with major
shareholders during the year.
and
as well
and
as
An up-to-date information flow is
also maintained on the Company’s
website, which contains all press
financial
announcements
investor
reports
operational
presentations
the Company’s
information on
activities.
also
The
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.
The Board is kept informed of the
views of major shareholders by
Board
18
briefings
from
the Executive
the Company’s
Directors and
brokers. Analyses of the share
register
periodically
also
circulated to the Board, together
with updates from analysts.
are
the execution of
achieve
the
Company’s strategic objectives and
business model. These controls
include Board approval
for all
policies, procedures, and significant
projects.
the
3. Stakeholder Responsibilities
The Board takes an active role in
environmental,
addressing
social and governance aspects of
the business, with the Company’s
led by
operating activities
the
principles of
the UN Global
Compact.
and
small
the Company
It is well recognised that the long-
term success of the Company is
reliant upon the efforts of the
employees of the Company and its
contractors, suppliers, regulators
and other stakeholders. As a
inclusive
relatively
organisation,
is
readily aware of any employee
practices that are inconsistent with
its values and plans. The Company
nevertheless has in place many of
the procedures found
larger
companies, together with a wealth
in
of experience on the Board
related
addressing
matters.
employee
in
to
The Board firmly believes that high
Health, Safety, Security and the
Environment (HSSE) standards are
crucial
Company’s
the
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-
issued. Our overall approach to
stakeholder
social
responsibilities, is covered in further
detail in the Sustainability Report
contained in this Annual report.
its HSSE Policy, which
and
system of
4. Risk Management
The Board is responsible for the
internal
Company’s
its
controls and
effectiveness. The
is
designed to manage, rather than
eliminate, the risk of failure to
reviewing
system
for
The Board monitors
financial
controls through: a) a budgeting
and planning process, requiring
approval by the Board; b) the receipt
of monthly management reports
covering the Company’s financial
internal controls as
affairs; c)
the Company’s
in
articulated
Financial Reporting Procedures; and
d) a review by the Audit Committee
of the draft annual and
interim
reports, and the Company’s annual
budget,
being
before
recommended to the Board.
As regards non-financial risks and
opportunities, and given the current
size of the Company, it is considered
preferable for this part of the
Company’s risk management to be
the responsibility of the Board as a
whole, rather than a subcommittee.
As part of this process, a company-
wide Risk Register is maintained and
discussed at Board meetings.
5. Board Management
The Board is the main decision-
making body of the Company which
meets both formally and informally
during the year. 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
All the Executive Directors are
employed under service contracts
and work full time for the Company.
The Non-Executive Directors work
part time, the extent of which varies
Jersey Oil and Gas plc
are
independent
depending on the ongoing activities
of the business. The Board considers
that all three of the Non-Executive
Directors
in
character and judgement. All three
have shareholdings (acquired with
their own funds) and a
limited
number of share options (granted as
part of the annual remuneration
the
process and approved by
Board), and the Board considers
that this does not
impair their
judgement and aligns them well
with the interests of shareholders.
and
its Committees
The Board and
receive appropriate and
timely
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. In
addition, at the end of each month
the Chief Executive Officer briefs
the Non-Executive Directors on
current developments.
is necessary
time as
The Board considers and aspires to
achieve increased diversity where
possible when making
new
appointments, whilst recognising
the practical constraints of a small,
focused Company.
from
independence
The QCA Code highlights that non-
executive directors must maintain
their
the
executive members of the Board
and therefore where their term
extends beyond 9 years
the
judgement that this independence
remains should be set out. During
2024 both Frank Moxon and Marcus
Stanton will reach their nine-year
anniversary of service with JOG. The
Board believes that both Frank and
Marcus continue to display an
of
attitude
independence
of
19
character and judgement in their
roles. With the Chairman and CFO
both joining the company within the
last four years the Board remains
relationships
refreshed
remain
the members
between
appropriately independent.
and
Board
Additionally,
has
the
concluded that Board continuity
through the FDP approval phase of
the GBA has substantial value and
once achieved the future growth
trajectory and direction of the
business will best determine the
appropriate
Board
At this stage of
composition.
growth
is
the business
appropriate for JOG to retain a small
Board that is nimble and capable of
executing our strategic ambitions in
a timely manner.
future
in
it
6. Board Experience
The Board seeks to maintain an
appropriate mix of experience, skills,
personal qualities and capabilities in
order to deliver the strategy of the
Company. The size of the Board is
considered
to
provide the necessary experience
its decision-
and perspective to
making process given the size and
nature of the Company.
to be sufficient
as
representing
The skills and experience of the
Board are set out in this Annual
Report and are considered by the
Board
an
appropriate range of capabilities
needed to deliver the strategy of the
Company for the benefit of
its
shareholders over the medium to
long term. The experience and
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
strategy
scrutinise
performance.
and
to
itself be
7. Board Performance
The Board has determined that it
for
shall
assessing the effectiveness and
contributions of the Board as a
and
whole,
committees
responsible
its
individual Directors. The Directors
believe that the size of the Board
allows for open discussion, with an
evaluation of Board performance
being undertaken on an annual or
on an ad hoc basis, as considered
appropriate. The performance of
the committees is also evaluated by
the Chairman of the Board.
the
level of
Succession planning
is reviewed
periodically both at the Board level
and at
senior
management. This is undertaken
the
the perspective of
from
development of the Board as a
whole as the business develops and
in the scenario of any unanticipated
departures.
in
an
8. Corporate Culture
The Board believes that the long-
term success of the Company is
underpinned by a corporate culture
that is based on ethical values and
behaviours. Many of these are
highlighted
extensive
employee Staff Handbook which
draws together all the Company’s
rules, policies and procedures.
Those values, which the Company
the
seeks
business, include integrity, respect,
honesty and transparency and are
led by the behavioural example of
members,
Board
individual
particularly
the Chief Executive
Officer and the Chief Financial
Officer.
throughout
instil
to
values
ethical
The Company also operates a well-
defined organisational
structure
through which it seeks to determine
that
and
the
recognised and
behaviours are
respected,
in addition to which
every employee is aware of the
established
whistleblowing
procedures. These include a formal
Anti-Bribery and Corruption Policy
under which
is
committed to acting legally, fairly
and ethically in all its activities and
engagements. The Company does
not tolerate bribery and corruption
in any of its forms, nor will it tolerate
the Company
Jersey Oil and Gas plc
in those with whom
it
business.
it does
Company
9. Governance structures
The
maintains
appropriate governance structures
and processes according to its size
and complexity. The Company is
committed
its
corporate governance policies and
procedures to ensure they remain
appropriate as it continues to grow
and in response to any changes in
regulatory and other
relevant
guidance.
reviewing
to
The Board is responsible for: a) the
overall direction and strategy of the
monitoring
b)
business;
performance; c) understanding risk;
is
and d) reviewing controls.
collectively
the
for
responsible
success of the Company.
It
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
of
the
is
The Chief Executive Officer
the day-to-day
responsible
for
running
Company’s
the
operations and for implementing
the strategy agreed by the Board, in
conjunction with
other
members of the executive team.
is
The Chief Financial Officer
the Company’s
responsible
for
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
20
list
Act. This
includes matters
relating to: a) strategy and policy; b)
acquisition
divestment
and
proposals; c) approval of major
capital
risk
investments;
management policy; e) proposals
from the Audit Committee, the
Remuneration Committee and the
Nomination
f)
significant financing matters; and g)
statutory reporting to shareholders.
Committee;
d)
At formal meetings of the Board an
agenda is prepared by the Chairman
includes presentations by
which
each of the executive directors
and
together with
recommendations
the
relevant sub-committees of the
Board. The Board has established
four Committees –
the Audit
the Remuneration
Committee,
reports
from
Jersey Oil and Gas plc
Committee,
Nominations
Committee and the Sustainability
Committee.
Regulatory News Releases,
the
Company’s’ website and the Annual
General Meeting.
10. Stakeholder Communications
The Board considers that good
communication with shareholders
and other relevant stakeholders,
based on the mutual understanding
important. The
is
of objectives,
Company maintains an ongoing
dialogue with shareholders as set
in Principle 2 (Stakeholder
out
Responsibilities),
to
in
understand and meet shareholders
is
needs and expectations. This
achieved
direct
engagement and meetings with
shareholders, as well as through
communications such as the Annual
Report,
Report,
Presentations,
Corporate
through
seeking
Interim
the
to
regard
With
industry
stakeholders, the Company holds
regular meetings with all the key
regulatory authorities, including the
North Sea Transition Authority, the
Health and Safety Executive and the
Offshore Petroleum Regulator for
Environment
and
Decommissioning. The Company
also actively engages with industry
bodies such as Offshore Energies
UK, its peers in the oil and gas
operator community and the wider
supply chain that directly serves the
those businesses
industry and
involved in supporting and leading
the energy transition.
21
Jersey Oil and Gas plc
Board Committees
The Group operates an Audit Committee, a Remuneration Committee, a Nomination Committee and a newly
formed Sustainability Committee.
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
determined 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 2023 as its functions
have been properly carried out as part of the work of the Remuneration Committee and the Board.
Sustainability Committee
Chair: Les Thomas, Other Members: Frank Moxon, Marcus Stanton
Under its terms of reference, it is required to meet at least once a year and its responsibilities include:
Reviewing and assessing the company's current sustainability practices and policies;
Reviewing the regulatory and policy developments designed to tackle climate change, as well as the
requirements and initiatives set for the industry in response to decarbonisation targets and supporting the
energy transition and route to net zero;
Identifying and addressing climate-related risks associated with the company's operations; and
Reviewing and monitoring the Company's obligations and plans for climate-related financial disclosures.
The Sustainability Committee was formed in March 2024
22
Jersey Oil and Gas plc
2023 Board and Committee Meeting Attendance
Board
Meetings
Audit
Committee
Remuneration
Committee
Nominations
Committee
Sustainability
Committee**
Held Attended Held Attended Held Attended Held Attended Held Attended
8
8
8
8
8
8
8
8
8
8
4
4
4
4*
4*
4
4
4
4*
4*
3
3
3
-
-
3
3
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Non-Executive
Directors
L J Thomas
M J Stanton
F H Moxon
Executive Directors
J A Benitz
G A Forbes
* By invitation
** Formed in March 2024
Les Thomas,
Non-Executive Chairman
10 May 2024
23
Jersey Oil and Gas plc
ENVIRONMENT, SOCIAL AND GOVERANANCE REPORT
We are committed to conducting our operations safely, protecting the natural environment and
actively participating in the energy transition
Our strategic focus on developing
homegrown energy resources sits in
tandem with our pursuit of doing so
in a sustainable manner. We are
seeking to create long term value
from the natural resources that are
readily available to us, contributing
to society’s energy needs and
pursuing oil and gas development
solutions
our
environmental footprint.
that minimise
We take global climate challenges
seriously and are committed to
conducting our activities, whether
directly or through our joint venture
partners, in accordance with the
highest environmental, social and
governance standards.
that
recognise
UN Global Compact
Sustainability Development
Goals
We
responsible
behaviour, which creates value
while protecting the environment,
and contributing
is
central to our licence to operate.
to sustainability
Our approach
the
to ensure
therefore seeks
business
the
with
international reporting frameworks
of the UN Global Compact (UNGC).
to society,
aligns
The strategy of the UNGC is to
encourage businesses to recognise
the UN Sustainable Development
Goals (SDGs) as defining those key
aspects which can be used by a
company to direct its corporate and
operational activities while adhering
to the 10 UNGC principles.
an
Using
industry-standard
methodology, we have undertaken
a review of the 17 SDG’s to
determine and prioritise those goals
to our business
most relevant
activities. These are presented
below.
SDG 3: Sustainable development cannot be achieved unless everyone’s primary health needs are met.
The health and safety of our employees and contractors is central to the way in which we conduct
business and is our number one priority. We work to ensure all our operations and activities are
performed safely, using robust policies and systems with the aim of achieving zero harm in the
workplace
SDG 5: Achieve gender equality and empower all women and girls.
We seek to maintain a high performing, productive and engaged organisation and adopt policies
to ensuring non-discrimination and gender equality
SDG 7: Deliver access to affordable, reliable, sustainable and modern energy for all.
Through the development of homegrown oil and gas resources, we contribute to the availability of
affordable energy and seek to do this in tandem with supporting the energy transition and the
government’s target for increasing investment in renewable energy production and the
achievement of carbon net zero by 2050
SDG 8: Promote sustained, inclusive and sustainable economic growth, full and productive employment
and decent work for all.
We contribute to economic growth in the UK through our business activities, including
employment, support for the local supply chain and the transparent payment of taxes
SDG 13: Prioritising the climate.
Protection of the environment is part of our license to operate. As part of this, we recognise our
responsibility to reduce greenhouse gas emissions and in doing so support the energy transition
SDG 14: Protecting biodiversity around our operations.
We seek to minimise the impact to flora and fauna and conserve biodiversity in ecosystems where
we operate, carrying out environmental impact assessments and monitoring campaigns
SDG 16: Responsible business practices contribute to social and economic stability.
We strive to ensure that all activities throughout the business are conducted to the highest
standards in ethics, integrity and transparency
24
Sustainability in the Buchan
Redevelopment Project
The Company’s principal activity is
the Buchan redevelopment project.
Working with our
joint venture
partners, NEO and Serica, we
actively participate and contribute
to the strategic decision-making
process for the project, ensuring
that sustainability-related decisions
reflect our policies and beliefs. The
key activities
this area are
in
described in the following sections.
it
are
and
of Health,
HSEQ Planning
The Company considers
is
necessary to set out how high
standards
Safety,
Quality
Environmental
(“HSEQ”) performance will be
achieved throughout the Buchan
redevelopment project
lifecycle.
Organisations that do not prioritise
HSEQ performance do not attract
investment or talented individuals
to support the business. NEO, in its
capacity as the Buchan Operator, is
an established North Sea business
that has existing HSEQ policies and
procedures
being
that
implemented on the project. Risk
assessments are conducted for all
activities, with
of
eliminating risks where practicable,
and
appropriate
control and mitigation measures for
joint venture
residual risks. The
partners
HSEQ
monitor
performance through a variety of
metrics, each designed to reflect the
risks associated with the respective
phase of
and with
activity,
management reviews conducted on
a regular basis. In accordance with
the Joint Operating Agreement that
governs the partnership, the joint
venture partners have the right to
conduct audits of the Operator’s
performance as deemed necessary
by management.
establishing
aim
the
Climate Action
Prior to the completion of the farm-
out and transfer of Operatorship of
the GBA
licences to NEO, the
Company undertook a detailed
of
assessment
potential
development concept solutions for
Buchan and wider resources in the
GBA. This evaluation was aligned to
the central obligations of
the
NSTA’s strategy, namely, to take the
necessary steps to:
Ensure that the maximum value
of economically
recoverable
petroleum is recovered from the
strata beneath
relevant UK
waters; and, in doing so,
Take appropriate steps to assist
in
the Secretary of State
meeting the net zero target,
including the reduction, as far as
reasonable
the
circumstances, of greenhouse
gas emissions from sources such
as flaring and venting and power
generation,
supporting
and
carbon capture and storage
projects.
in
studies
Accordingly,
were
performed to evaluate the lifecycle
from each
resulting
emissions
potential Buchan field development
concept, considering both
the
construction / installation phase and
production phase. The decision to
redeploy an existing FPSO was
shown to result
lowest
lifecycle emissions, as it:
Minimises energy consumption
by reducing the use of new raw
materials during construction
when compared with other
development solutions
in the
Through the re-use of existing
infrastructure, it minimises the
onshore construction scope and
hence minimises the associated
energy usage associated with
these activities
Minimises emissions associated
with diesel usage to power
installation vessels as it has the
lowest
vessel
activities during the offshore
installation phase
number
of
Provides
a
solution
that
eliminates the need for routine
flaring and venting during
the
normal operations
as
Jersey Oil and Gas plc
selected FPSO has existing flare
gas recovery systems, regarded
as Best Available Technology
Reduces nitrous oxide emissions
which are known to contribute
to the greenhouse effect and
negatively impact air quality as
the selected FPSO has existing
Dry-Low-Emission
power
generators, regarded as Best
Available Technology.
of
The results of these evaluations
were presented to the NSTA as part
of a Concept Select Report that was
submitted to support the selection
of the preferred GBA development
solution. Concept Select Reports
are submitted by licence operators
as
regulator’s
part
requirements
for planning and
consenting to field developments
on the UK Continental Shelf. Based
on the information provided the
NSTA issued a letter of no objection
to
licencees
preparing an FDP based on the
redevelopment solution set out in
the report.
the Buchan
field
the
including
Emissions Reduction
Central to the license to operate
obligations set out in the NSTA’s
strategic plan is the requirement for
UK operators to undertake their
upstream operations in line with the
NSTA Stewardship Expectations
(SE)
Stewardship
Expectation 11 – Net Zero (SE11).
SE11
imposes that for each UK
offshore operated asset or hub, a
Greenhouse
Emissions
Gas
Reduction Action Plan (ERAP) is
developed,
and
Buchan
maintained.
redevelopment
project
Environment Statement (issued in
January
public
consultation) confirms that an ERAP
will be prepared during the course
of the project for implementation in
the production phase of activities.
implemented,
2024
The
for
Buchan
Importantly,
redevelopment project is aligned to
the NSTA’s strategic objectives
the
25
to
come
ready’.
requiring new developments with a
first production date before 1
January 2030 to be at a minimum
online
delivered
‘electrification
These
requirements were recognised by
the Buchan joint venture during the
concept select phase of activities
and
chosen development
concept, along with its associated
costings, are fully aligned to this
emissions reduction strategy.
the
the
The Buchan
field partners are
future
committed
to
electrification of the redeployed
FPSO and are currently working
towards ultimately connecting the
vessel to one of the future offshore
wind power developments that are
being planned under the terms of
the UK Government’s Innovation
and Targeted Oil & Gas (INTOG)
licencing process. The switch to
import power will utilise well proven
technology
been
that
successfully deployed in Norway.
Engineering studies are currently
being conducted as part of the on-
going Front End Engineering Design
(FEED) phase of activities to identify
the modifications required to the
redeployed FPSO to facilitate this
switchover.
has
the
than
lower
to a
times cleaner
FPSO,
of
Electrification
anticipated to take place around
2030, will result in a reduction in
emissions from power generation,
leading
forecast carbon
industry
intensity
average performance and at least
two
(mid case)
compared to the average global
well-to-refinery intensity of crude
oils. Future connection to a new
offshore windfarm would deliver a
solution that contributes to the
decarbonisation of both the FPSO
and the UK grid, supporting the UK
Government and NSTA in reaching
its net zero target, whilst at the
same time delivering
important
domestic energy supply.
Jersey Oil and Gas plc
Buchan field into the reservoir will
minimise such potential discharges.
In addition, as set out
in the
Environment Statement, a chemical
selection process will be followed
that aims to select chemicals with
the lowest environmental impact in
accordance with
the Offshore
Chemical Regulations and Oil
Pollution Prevention and Control
Regulations.
ability
to manage
Risk Management
In addition to the Company-wide
processes used to monitor and
manage corporate and ESG risks,
specific risk management processes
are also used for the Buchan project.
risk
The
effectively is essential for realising
the project schedule and in turn the
overall value of the project. A
project-specific risk management
process has been implemented and
is actively monitored and managed
by the joint venture partners to
ensure
could
risks
potentially jeopardise the Project
Execution Plan can be identified and
prioritised for prevention, control
and mitigation. The project risk
registers are subject to monthly
review.
that
that
to
this
offers
the
project.
Life Below Water
We recognise the importance of
protecting biodiversity in the seas
around our operations, and our
commitment
is
demonstrated through the selected
Buchan
concept
for
The
redevelopment
redeployed
the
FPSO
following key benefits compared to
other
development
solutions:
Utilisation of the existing shuttle
tanker offloading capability for
export of oil minimises seabed
disturbance by eliminating the
requirement for installation of a
new oil export pipeline that the
other potential development
solutions involve
potential
It has the lowest number of
the
phase,
to minimise
vessel activities during
offshore
which
underwater noise pollution
installation
helps
It
minimises
overboard
discharge of oil in water through
the re-injection of produced
water
into the reservoir for
pressure maintenance. Should
any overboard discharge of
produced water be required the
FPSO has existing systems
designed to reduce oil content in
produced water to a level that
regulatory discharge
meets
limits. Environmental studies to
support
Environment
Statement show that discharges
at these limits do not result in
any measurable deterioration of
water quality in the area local to
the FPSO.
the
To maximise production from the
Buchan field it will be necessary to
utilise certain chemicals during the
drilling and production phases.
Once mixed with produced fluids
there is the potential for discharge
to sea of these chemicals in diluted
form through the discharge of
produced water. The plan to re-
inject produced water from the
26
Jersey Oil and Gas plc
Recommendations of the Task Force for Climate-related Financial Disclosures (”TCFD”)
Whilst the Group is not required to and does not comply with the recommendations of the TCFD, it has applied the
below principles in developing a roadmap to compliance by 31 December 2025.
The TCFD framework is designed to identify climate-related risks and opportunities to aid companies’ and investors’
understanding of the financial implications of transitioning to a lower-carbon economy and the changes in physical
risks associated with climate change. The TCFD disclosures are structured around the four pillars of Governance,
Strategy, Risk Management and Metrics & Targets with eleven recommended disclosures. Scenario analysis is
recommended as part of the TCFD process to identify the range of risks and opportunities a company may face
across different climate scenarios.
TCFD Index Table
Recommendation
Description
Details
Describe
Board’s
the
oversight of climate related
risks and opportunities.
Governance:
Disclose the
organisation’s
governance around
climate related risks
and opportunities.
The Board recognises climate change to be a significant
risk to both the Company and the wider oil and gas
industry, with potentially material implications. Building
resilience to such risks and ensuring the business
maintains its social licence to operate, by actively playing
a responsible role in the on-going energy transition, is
necessary for long-term success of the Company.
is
ultimately
governance
the
Climate-related
responsibility of the Board. Corporate and ESG risks are
cyclically reviewed by the management team and
discussed with the Board. The results of such reviews are
incorporated into the strategic decision-making process
of the Company.
in
Describe management’s
and
role
managing climate-related
risks and opportunities.
assessing
Due to the relatively small number of employees within
the Company, there is not a management committee
solely appointed for the management of climate risks and
opportunities. However, in 2024 a Sustainability Sub-
Committee to the Board was established to facilitate more
detailed oversight of the strategic and operational
the
management of environmental
Company and the wider industry, including the evolution
of regulatory requirements.
facing
issues
27
the
risks
climate
Describe
and
related
opportunities
the
organisation has identified
over the short, medium,
and long term.
Strategy:
Disclose the actual
and potential
impacts of climate
related risks and
opportunities on the
organisation’s
businesses,
strategy, and
financial planning
where such
information is
material.
Jersey Oil and Gas plc
The Company’s ESG Risk Register includes assessment
of the following climate-related risks:
1. Stricter decarbonisation agenda pushed by
regulators and policymakers resulting in:
Increases in taxes related to business activities;
Changes in policies. laws and regulations;
Bias against energy-related investment;
Incurring high costs arising from emission
reduction from hydrocarbon installations.
2. Technology developments resulting in reduced
demand for hydrocarbons, for example:
Reduction in cost of renewables and long-term
energy storage;
Improvements in the efficiency of energy users;
Reduced appetite for investment in the oil and gas
industry caused by evolving investment mandates
relating to the natural resources sector.
Describe
impact of
the
climate-related risks and
the
opportunities
organisation’s businesses,
strategy,
financial
and
planning.
on
Some risks may have an impact in the short and medium
term. For example, changes in environmental levies and
taxes, leading to a near term impact on the Company’s
activities. Other risks, such as the effect of technological
developments on the demand for hydrocarbons, may
have an impact in the longer term.
The Board readily appreciates that climate-related risks
have the potential to significantly affect the activities of
the Company. The risk reviews that are undertaken by the
Company and reported to the Board are designed to
routinely monitor and review the business landscape to
determine those aspects of the evolving regulatory and
taxation regime that may have a significant impact and
the mitigation measures the Company can take.
Describe the resilience of
the organisation’s strategy,
into consideration
taking
different
climate-related
scenarios, including a 2°C
or lower scenario.
to
transparent and auditable approach
risk
A
management at both strategic and operational levels
helps make the business resilient to change, including
climate change scenarios which necessarily affect UK and
international energy markets. The Company’s activities in
the UKCS are as resilient to climate change scenarios as
other companies engaged
in offshore oil and gas
activities, insofar as achieving a ‘Low Carbon Future’ (i.e. a
2°C or lower scenario) may be contingent on restricting
the
longer-term activities of existing oil and gas
companies e.g. by changing taxation or carbon-credit
trading arrangements. On the other hand, a ‘High Carbon
Future’ (i.e. greater than a 2°C scenario) places further
pressure on energy companies to pursue more aggressive
net zero solutions. Therefore, the Company’s strategy of
taking an engaged role in energy transition assists in
making the business’ strategy resilient to either scenario.
the Board and
It places
management team to consider and assess ESG-related
responsibility on both
28
Jersey Oil and Gas plc
issues and formally record their effect for relevant
stakeholders.
At the centre of the Company’s strategy for the
redevelopment of the Buchan oil field
is a future
connection of the infrastructure that is to be installed for
the field to one of the nearby planned offshore wind power
developments that are currently being progressed by
specialist wind developers.
By making the Buchan
facilities electrification-ready ahead of deployment to the
field and engaging with the wind power developers, the
joint venture partners are able to play an active role in
helping to facilitate the regulatory imperative for oil and
gas companies to participate in the energy transition and
contribute towards meeting the sector’s net zero
objectives.
Risk Management:
Disclose how the
organisation
identifies, assesses,
and manages
climate related
risks.
Describe the organisation’s
identifying
for
processes
and
climate
related risks.
assessing
The Company’s approach to identifying, assessing, and
managing climate-related risks is integrated into the
overall risk management assessments of the business, and
guided by principles of transparency and responsible
stakeholder engagement.
Describe the organisation’s
processes
for managing
climate related risks.
The Board of Directors provides oversight of climate-
related risks as part of its broader risk management
strategy and acts to ensure that they receive appropriate
attention at the highest levels of governance. A new
Sustainability Board Committee dedicated to overseeing
the company's sustainability efforts, with a particular focus
on climate-related risks and TCFD compliance, was
established in 2024. The committee is responsible for:
Reviewing and assessing the company's current
sustainability practices and policies.
Reviewing the regulatory and policy developments
designed to tackle climate change, as well as the
requirements and initiatives set for the industry in
response to decarbonisation targets and supporting
the energy transition and route to net zero.
Identifying and addressing climate-related
associated with the Company's operations.
risks
Reviewing and monitoring the Company's obligations
and plans for climate-related financial disclosures.
Describe how processes for
identifying, assessing, and
managing climate related
risks are integrated into the
organisation’s overall risk
management.
Risk reviews, including climate-related risks, are carried
out by the Company on a cyclical basis. Given the status
and size of the Company, such reviews are mostly focused
on the strategic aspects of the business and future plans
for the GBA.
29
Disclose the metrics and
targets used to assess and
manage relevant climate-
related
and
opportunities where such
information is material.
risks
Metrics and
Targets:
Disclose the metrics
and targets used to
assess and manage
relevant climate
related risks and
opportunities where
such information is
material.
Jersey Oil and Gas plc
The Company compiles emissions data for its day-to-day
office activities (e.g. electricity usage), which represent
Scope 2 emissions. These are relatively modest given the
size of the business.
Predicted full-cycle emissions have been assessed as part
of defining the preferred development solution for the
Buchan redevelopment project and were set out in the
Environmental Statement that was submitted to the
Regulator in early 2024. Emissions were estimated for
each potential development concept, from raw material
manufacturing
facilities
installation and operation. Emissions were estimated
using publicly available data to enable transparency and
auditability, with the emissions representing a mixture of
Scope 1-3. The selected development concept has been
shown to represent the lowest lifecycle emissions of all the
technically feasible development concepts.
fabrication,
through
to
Disclose Scope 1, Scope 2,
and, if appropriate, Scope 3
greenhouse gas
(GHG)
emissions, and the related
risks.
Given the current status of the asset portfolio, the only
recordable emissions produced by the Company at this
time relate to office electricity consumption.
The
Company’s emissions in 2023 were 2,457kg/CO2e, which
was broadly flat year-on-year.
Describe the targets used
by
to
the organisation
related
manage climate
risks and opportunities and
performance
against
targets
The most significant contribution the Company can make
to minimising emissions and supporting the energy
transition, while contributing to society’s energy needs, is
by focusing on oil and gas development solutions with a
minimal environmental footprint. This has been a core
component of the GBA development strategy and
selection criteria for the preferred Buchan redevelopment
project.
30
DIRECTORS’ REPORT
The Directors present their report
together with the audited Group
and Company financial statements
for the year ended 31 December
2023.
Annual General Meeting
The Annual General Meeting will be
held on 5th June 2024 as stated in
the Notice of Meeting.
Results and Dividends
The Group’s loss for the year was
£5.6m (2022: loss of £3.1m). The
Directors do not recommend the
payment of a dividend (2022: Nil).
the
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. The Group has
substantial cash reserves following
the successful farm-out of the GBA
licences and receipt of initial funds
resulting from the two transactions
with NEO and Serica. The Group
now has a fully funded 20% interest
Buchan
on-going
in
redevelopment project. Other work
that the Group is undertaking in
respect of the GBA licenses and
surrounding areas is modest relative
to
its current cash reserves. 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
financial
of
statements. Even
in an extreme
Buchan
scenario where
development did not progress for
any unforeseen reason and any
future instalment payments were
not realised the Group has the
flexibility within its cost structure to
amend its expenditure profile and
continue in business beyond the
from
next
utilisation
cash
resources. The directors have also
considered the risk associated with
solely
of its existing
12 months
these
issue
the
of
to
contractual
arrangements
associated with the farm-outs and
are satisfied that the group is not
exposed
contractual
any
commitments which could impact
on the Group’s going concern status
over the next 12 months. Based on
these circumstances, the directors
have considered it appropriate to
adopt the going concern basis of
accounting
the
consolidated financial statements.
preparing
in
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
the
Financial
Statements.
Consolidated
the
Board Committees
Information
Audit,
on
Remuneration, Nomination and
Committees
is
Sustainability
Corporate
included
the
in
the Audit
Governance section,
Committee
the
and
Report
Remuneration Report contained in
this Annual Report.
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,
relevant audit
there
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
that
establish
auditors are aware of
that
information.
Jersey Oil and Gas plc
This confirmation
is given and
should be interpreted in accordance
with the provisions of s418 of the
Companies Act 2006.
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
economic
factors
is
performance.
The Group
to being an equal
committed
opportunities
and
engages employees with a broad
range of skills and backgrounds.
employer
Independent Auditors
A resolution to reappoint BDO LLP
as Auditors will be proposed at the
General
forthcoming
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 Zeus Capital Ltd and
Cavendish Financial plc.
Share Capital
At 31 December 2023, 32,665,960
(2022: 32,554,293) ordinary shares
of 1p each were issued and fully
paid. Each ordinary share carries
one vote.
Post Balance Sheet Events
See note 23
statements.
the
to
financial
31
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 2023 were:
1p Ordinary Shares
As at 31 Dec. 2023
As at 31 Dec. 2022
L J Thomas
M J Stanton
F Moxon
J A Benitz
G A Forbes
Shares
33,000
112,411
87,026
702,176
-
Vested Options
25,000
83,333
55,000
420,000
400,000
Shares
33,000
112,411
87,026
702,176
-
Vested Options
-
66,667
40,000
286,667
116,667
Substantial Shareholders
At 31 December 2023, 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, Stockbrokers
Interactive Investor
Mr J Baldwin
AJ Bell, stockbrokers
Barclays Smart Investor
HSDL, stockbrokers
Mr Nicholas Robinson
UBS collateral account
Janus Henderson Investors
Mr Ronald Lansdell
Ravenscroft
17.18%
8.39%
6.75%
4.78%
4.32%
3.97%
3.95%
3.77%
3.58%
3.27%
3.16%
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
in substantial
shareholders are contained on the Company’s website
(www.jerseyoilandgas.com).
On behalf of the Board
Graham Forbes
Chief Financial Officer
10 May 2024
32
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
financial statements in accordance
with applicable law and regulations.
material
accounting standards subject to
departures
any
disclosed and explained in the
financial statements;
Company law requires the directors
to prepare financial statements for
each financial year. Under that law
the directors are required to prepare
the group financial statements in
accordance with UK adopted
international accounting standards
company
and
financial
the
in accordance with
statements
Generally
United
Practice
Accepted Accounting
Accounting
(United
Standards and applicable
law).
Under company law the directors
must not approve the financial
statements unless they are satisfied
that they give a true and fair view of
the state of affairs of the group and
company and of the profit or loss of
the group for that period.
Kingdom
Kingdom
these
financial
the directors are
preparing
In
statements,
required to:
Select
suitable
accounting
policies and then apply them
consistently;
Make
judgements
and
accounting estimates that are
reasonable and prudent;
State whether they have been
prepared in accordance with UK
international
adopted
Prepare the financial statements
on the going concern basis
unless
inappropriate to
presume that the group and the
company will
in
business.
continue
is
it
the
explain
adequate
The directors are responsible for
keeping
accounting
records that are sufficient to show
company’s
and
transactions and disclose with
reasonable accuracy at any time the
financial position of the company
and enable them to ensure that the
financial statements comply with
the requirements of the Companies
Act 2006. They are also responsible
for safeguarding the assets of the
company and hence for taking
reasonable steps for the prevention
and detection of fraud and other
irregularities.
Website Publication
The Directors are responsible for
ensuring the Annual Report and the
financial statements are made
available on a website. Financial
statements are published on the
company's website in accordance
the United
with
Kingdom governing the preparation
financial
and dissemination of
legislation
in
statements, which may vary from
legislation in other jurisdictions. The
maintenance and integrity of the
Company's
the
website
responsibility of the directors. The
also
Directors'
extends to the ongoing integrity of
the financial statements contained
therein.
responsibility
is
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,
relevant audit
there
information of which
the
Group’s and Company’s auditors
are unaware; and
is no
They have taken all the steps
that they ought to have taken as
a Director to make themselves
aware of any relevant audit
information and to establish that
the Group’s auditors are aware
of that information.
Graham Forbes
Chief Financial Officer
10 May 2024
33
AUDIT COMMITTEE REPORT
Jersey Oil and Gas plc
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 four times during 2023, linked
both to events in the Company’s
financial calendar and to certain ad
hoc matters. In addition, an informal
meeting of the committee was held
in connection with the 2023 Annual
Report and Accounts
(financial
statements), a few days before a
formal meeting to discuss the same.
To
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 meeting held in connection with
the Company’s 2023 Report and
Accounts.
encourage
a
Role of the Audit Committee
The Terms of Reference for the
Audit Committee, which have been
prepared in accordance with the
the
QCA Code, provide
Committee’s main responsibilities
to include:
Monitoring the
independence
for
and objectivity of the 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
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
and corruption in addition to
appropriate
ensuring
whistleblowing
arrangements
are in place.
that
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 2023 Annual
Report and the accounting for
our licence interests,
Review of the interim results for
the six months ended 30 June
2023;
Giving consideration to areas of
significant judgement such as
concluding on going concern
and existence of
impairment
triggers;
to
as
Consideration
the
appointment of new financial
auditors following a retendering
exercise (see below);
Review of the 2024 cash budget.
Appointment of New Auditors
Following many years with PwC as
the Group’s external
financial
auditor, a retendering exercise was
carried out in 2023 in respect of the
2023 year end audit. Based on the
criteria set by the Audit Committee
including
of
independence and objectively, BDO
LLP were appointed as the new
auditors of the Group.
assessment
an
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
sub-
whole,
committee. A risk summary
is
presented and discussed at Board
meetings.
rather
being
than
a
Marcus Stanton
Chairman of the Audit Committee
10 May 2024
34
REMUNERATION REPORT
Jersey Oil and Gas plc
The
to
Introduction
This Remuneration Report has been
prepared by
the Remuneration
Committee and approved by the
Committee
Board.
is
committed
transparent and
quality disclosure. Our report for
2023 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 and
(both Non-
Marcus
The
Executive
Committee met
three
times during 2023.
Directors).
formally
Stanton
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:
That
remuneration
support the Group’s strategy;
levels
An appropriate
link between
performance and reward;
Alignment of Directors, senior
management and shareholder
interests;
Linking of long-term incentives
to shareholder returns;
Recruitment,
retention
and
motivation of individuals with
the
and
experience to achieve Group
objectives; and,
capabilities
skills,
Good teamwork by enabling all
the
employees
to share
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,
(“EMI”)
A long-term incentive plan, the
Jersey Oil and Gas PLC 2016
Management
Enterprise
and
Incentive
Unapproved Share Option Plan
(the “Old Share Option Plan”),
which was
replaced on 23
November 2021 with the Jersey
Oil and Gas Plc 2021 Employee
Share Option Plan (the “New
Share Option Plan”).
Performance of the Group in 2023
The Group’s focus during 2023 was
on completing the farm-out process
for the GBA licences, securing a fully
carried position for its interest in the
Buchan redevelopment project and
associated
finalising
the
concept. These
redevelopment
objectives were
fully delivered
during the year. On 6 April 2023, the
Company announced that it had
agreed to farm-out a 50% interest in
its GBA licences to NEO. This was
followed on 23 November 2023 with
the announcement of the farm-out
of a further 30% interest to Serica. In
aggregate the agreements provide
for the Company to receive a series
of milestone cash payments and a
20% fully carried interest in the
Buchan redevelopment project. As
part of concluding the farm-out
process, the Company also finalised
the use and acquisition of the
Western Isles FPSO for the Buchan
redevelopment
and
obtained a letter of no objection
from
this
the NSTA
development solution.
project
for
Key Activities in 2023
Recommended option awards
to Directors and employees,
which were granted
2023;
Approved
in April
the
vesting,
in
accordance with their terms, of
the second tranche (of three) of
share options granted
to
employees in January 2021, the
first tranche (of three) of share
options granted to Executive
Directors and employees in April
2022 and the final tranche (of
three) of share options granted
to an Executive Director and a
senior manager in November
2021.
Carried out interim (post farm-
out) and full year remuneration
reviews.
In carrying out its responsibilities the
has
Remuneration Committee
taken ad hoc external advice from
h2glenfern,
remuneration
its
adviser.
Basic Salary
The basic salaries of Executive
Directors are normally reviewed by
the Committee (taking into account
individual performance, market
factors and
sector conditions)
around the end of each year with
any changes usually taking effect
from 1 January of the following year.
However, the end of 2022 review
was deferred until April 2023 after
the NEO
farm-out had been
secured.
The annual salary of Andrew Benitz
as at 1 January 2023 was £250,000
(2022: £250,000). The salary of
Graham Forbes as at 1 January 2023
was £240,000 (2022: £240,000).
These were increased in May 2023.
As a result, the salary of Andrew
Benitz as at 31 December 2023 was
£275,000 (10% increase), and that of
Graham Forbes was £259,200 (8%
increase). Both salaries remained
unchanged at the start of 2024.
35
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, Andrew
Benitz received a 10% matching
pension contribution while Graham
Forbes took an 8% cash alternative
until August 2023 when he
transferred to the 10% matching
pension contribution option.
Discretionary Bonuses
As a result of the pivotal NEO farm-
out completed during the year and
the subsequent signing of
the
agreement to secure the Western
Isles FPSO (thereby finalising the
Buchan Development solution) the
Executive Directors were awarded
performance bonuses during 2023.
Andrew Benitz and Graham Forbes
Jersey Oil and Gas plc
were each awarded a bonus
equivalent to 100% of their salary
transformational
reflecting
progress. This was
first
the
performance bonus awarded to the
Executives since 2019.
this
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.
Plan, Directors
Share Option Plan
Under the terms of the Old Share
and
Option
employees are eligible for awards.
EMI options are subject to an
limit of £3m and an
aggregate
limit of £250,000 by
individual
shares.
of
value
market
Performance conditions are not
required but options can be granted
conditions,
with
both.
or
vesting
Performance conditions can apply
to individual tranches within grants.
Performance conditions can be
amended, provided they are still
fair measure of
deemed
performance
schedules
a
The New Share Option Plan
(adopted on 23 November 2021)
contains no EMI provisions since
JOG no longer meets the relevant
eligibility requirements.
In
New share option awards were
made to Directors and employees
during April 2023.
line with
previous grants, options have an
exercise period of seven years for
Executive Directors and staff and
five
for Non-Executive
Directors, although both the Old
and New Share Option Plans
provide for exercise periods of
up to ten years.
years
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
J A Benitz
save
11.03.19
Rolling Contract
12 months
in certain
(including material
circumstances
changes to contract terms or non-
consensual relocation), the Executive
may provide 30 days’ notice
that,
G A Forbes
22.11.21
Rolling Contract
3 months
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 2023, 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
Fee 2023
Date of Change
L J Thomas
F H Moxon
M J Stanton
Non-Exec. Chairman
Senior Independent Director
Non-Exec. Director
£66,000
£54,000
£48,600
May 2023
May 2023
May 2023
Fee 2022
£60,000
£50,000
£45,000
During the year, the Non-Executive Directors did not receive additional fees for acting as members of the Board’s
various committees.
36
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
Presented in
£’000s
Salary
/ Fees
Year Ended 31 Dec. 2023
Year Ended 31 Dec. 2022
Pension Benefits
Bonus
Total
Salary
Pension Benefits
Bonus
Total
267
253
520
59
53
53
165
27
11
38
-
-
2
2
4
6
10
-
-
-
-
250
240
490
-
-
-
-
548
510
1,058
59
53
55
167
/ Fees
250
259
509
65
40
50
155
25
-
25
-
-
2
2
6
7
13
-
-
-
-
685
40
10
490
1,225
664
27
13
J A Benitz
G A Forbes
(note 1)
Executive
Directors
L J Thomas
M J Stanton
F H Moxon
Non-Exec.
Directors
Total
Directors
Notes:
1. Until August 2023 salary includes an 8% cash contribution as an alternative to a matching 10% pension contribution.
-
-
-
-
-
-
-
-
281
266
547
65
40
52
157
704
37
Jersey Oil and Gas plc
Options held by Directors at 31 December 2023 are set out below.
Presented in ‘000s
Grant date Exercisable
By
At 1 Jan
2022
Issued Exercised Lapsed At 31 Dec
Issued Exercised Lapsed At 31 Dec
2022
2023
Executive Directors
J A Benitz
At 200.0p
At 175.0p
At 210.0p (note 3)
At 230.0p (note 6)
At 247.5p (note 8)
G A Forbes
At 147.0p (note 5)
At 230.0p (note 6)
At 247.5p (note 8)
Non-Executive
Directors
L J Thomas
At 230.0p (note 7)
At 247.5p (note 9)
F H Moxon
At 200.0p (note 1)
At 175.0p (note 2)
At 210.0p (note 4)
At 230.0p (note 7)
At 247.5p (note 9)
M J Stanton
At 200.0p (note 1)
At 175.0p (note 2)
At 210.0p (note 4)
At 230.0p (note 7)
At 247.5p (note 9)
Total
29.01.18
17.01.19
18.03.21
29.04.22
19.04.23
29.01.25
17.01.26
18.03.28
29.04.29
19.04.30
23.11.21
29.04.22
19.04.23
23.11.28
29.04.29
19.04.30
29.04.22
19.04.23
29.04.27
19.04.28
29.01.18
17.01.19
18.03.21
29.04.22
19.04.23
29.01.24*
17.01.24
18.03.26
29.04.27
19.04.28
29.01.18
17.01.19
18.03.21
29.04.22
19.04.23
29.01.24*
17.01.24
18.03.26
29.04.27
19.04.28
180
70
110
-
-
360
350
-
-
350
-
-
-
20
15
15
-
-
50
40
20
20
-
-
80
840
-
-
-
290
-
290
-
150
-
150
75
-
75
-
-
-
30
-
30
-
-
-
30
-
30
575
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
180
70
110
290
-
650
350
150
-
500
75
-
75
20
15
15
30
-
80
40
20
20
30
-
-
-
-
-
150
150
-
-
100
100
-
45
45
-
-
-
-
20
20
-
-
-
-
20
110
1,415
20
335
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
180
70
110
290
150
800
350
150
100
600
75
45
120
20
15
15
30
20
100
40
20
20
30
20
130
1,750
Notes:
1. These options were exercisable at any time up to 29 January 2023. The expiry date of this tranche of options was extended during 2023 to
have an expiry date of 29 January 2024 due to the Company being in a close period.
2. All the options have vested, are exercisable up to 17 January 2024 and will lapse if not exercised by such date.
3. 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 and second tranches have already
vested.
4. Options vest in three equal tranches (one, two and three years from the date of grant) and have no performance conditions.
5. Upon the 6 April 2023 announcement of a farm-out in respect of the Group’s GBA development project, these options vested in full and
became exercisable from such date.
6. 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.
7. Options vest in three equal tranches (one, two and three years from the date of grant) and have no performance conditions.
8. 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.
9. 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 options are exercisable up to 19 April 2028.
38
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
10 May 2024
39
Independent auditor’s report to the members of Jersey Oil and Gas Plc
Jersey Oil and Gas plc
Opinion on the financial statements
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the state of the Group’s and of the Parent Company’s affairs as at
31 December 2023 and of the Group’s loss for the year then ended;
the Group financial statements have been properly prepared in accordance with UK adopted international accounting
standards;
the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
We have audited the financial statements of Jersey Oil and Gas Plc (the ‘Parent Company’) and its subsidiaries (the ‘Group’) for
the year ended 31 December 2023 which comprise the consolidated statement of comprehensive income, consolidated statement
of financial position, consolidated statement of changes in equity, consolidated statement of cash flows, company statement of
financial position, company statement of changes in equity and notes to the financial statements, including a summary of material
accounting policies. The financial reporting framework that has been applied in the preparation of the Group financial statements
is applicable law and UK adopted international accounting standards. The financial reporting framework that has been applied in
the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards,
including Financial Reporting Standard 101 Reduced Disclosure Framework (United Kingdom Generally Accepted Accounting
Practice).
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Independence
We remain independent of the Group and the Parent Company in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Directors’ assessment of the Group and the Parent
Company’s ability to continue to adopt the going concern basis of accounting included:
-
-
-
Obtaining and examining management’s base case forecasts and downside scenarios and verifying that these
forecasts had been subject to board review and approval.
Challenging and corroborating the future cash flows included in the base case to ensure these are consistent with our
understanding of work performed over other key areas of the financial statements.
Assessing the downside scenarios applied by management, ensuring that these represented reasonably plausible
downside scenarios in the context of the business, and overlaying additional sensitivities to understand the impact of
changes in cash flows of the Group.
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 and the Parent 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.
40
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
Jersey Oil and Gas plc
Overview
Coverage
Key audit matters
98% of Group loss before tax
99% of Group total assets
Materiality
Group financial statements as a whole
Impairment of intangible assets
Accounting for farm-out arrangements
£418,000 based on 1.5% of total assets
2023
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of the Group and its environment, including the Group’s system of
internal control, and assessing the risks of material misstatement in the financial statements. We also addressed the risk of
management override of internal controls, including assessing whether there was evidence of bias by the Directors that may have
represented a risk of material misstatement.
Our Group audit focused on the Group’s significant components, being Jersey Oil and Gas Plc (the Parent Company), and Jersey
Petroleum Limited. The Group audit team perform the audit of the Parent Company and all significant components.
The remaining components of the Group were considered insignificant and were principally subject to analytical review
procedures which were performed by the Group audit team.
Climate change
Our work on the assessment of potential impacts of climate-related risks on the Group’s operations and financial statements
included:
Enquiries and challenge of management to understand the actions they have taken to identify climate-related risks and
their potential impacts on the financial statements and adequately disclose climate-related risks within the annual
report; and
Our own qualitative risk assessment taking into consideration the sector in which the Group operates and how climate
change affects this particular sector.
We challenged the extent to which climate-related considerations, could impact the assumptions made in the Directors’ going
concern assessment and in management’s intangible asset impairment trigger assessment.
We also assessed the consistency of managements disclosures included as Other Information in the Group’s Environment, Social
and Governance report with the financial statements and with our knowledge obtained from the audit.
Based on our risk assessment procedures, we did not identify there to be any Key Audit Matters materially impacted by climate-
related risks.
Key audit matters
Key audit matters (“KAMs”) are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement (whether or
not due to fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of
resources in the audit, and directing the efforts of the engagement team. These matters were addressed in the context of our
41
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.
Jersey Oil and Gas plc
Key audit matter
Impairment of
Intangible assets
Refer to notes 10 and 2
(Exploration and
evaluation costs section)
At 31 December 2023, the group held
intangible assets on its statement of
financial position, as detailed in note
10, with a value of £16.4m (2022:
£24.4m).
the
Given the financial significance of the
intangible assets in the context of the
Group’s statement of financial position
and
significant degree of
judgement involved in the assessment
of whether
of
any
impairment exist, we considered this to
be a key audit matter.
indicators
Accounting for farm-out
transaction
Refer to notes 10 and 2
(Acquisitions, Asset
Purchases and Disposals
section)
In 2023, the entity announced a farm-
out agreement for operatorship and
50% of
the Group’s exploration
licences in exchange for a series of
cash payments and both pre
development and development carry’s
on the development of the licences. In
the absence of an accounting
standard for farm-out accounting, the
Directors’ have used their judgement
in forming an accounting policy with
reference
to commonly adopted
approaches in the industry. The cash
proceeds received from the farm out
partner in the year of £9,103,944 have
been deducted from the carrying value
of the Exploration and Evaluation
assets.
the
Given the financial significance of the
intangible assets in the context of the
Group’s statement of financial position
significant degree of
and
judgement involved in forming and
farm out accounting policy, we
considered this to be a key audit
matter.
How the scope of our audit addressed the key
audit matter
In addressing the KAM, we have performed the
following audit procedures:
- We
have
reviewed
and
impairment
challenged
management’s
indicator
assessment and considered whether there are
any indicators of impairment in line with criteria
set out under IFRS 6;
- We have obtained and reviewed relevant
license agreements relating to the GBA assets
and NSTA correspondence to consider any
indicators that the licenses will not be extended
past current term;
- We have corroborated the independence and
competence of management’s expert opining
on reserves and resources and assessed
whether these are indicative of the GBA asset
not being recoverable;
- We have considered
information obtained
during our audit work to assess whether there
are any other potential indicators of impairment
that have not identified by Management. In
doing so, we have reviewed the results of
studies undertaken in the year on the GBA
asset, to evaluate whether there are indicators
of impairment;
- We have assessed the impact of climate
change and how it has been factored into
management’s assessment; and
- Reviewed and assessed management’s
financial
included within
the
disclosures
statements.
Key observations:
Based on the procedures performed, we have found
the Directors’ assessment of the carrying value of
intangible assets to be acceptable.
In addressing the KAM, we have performed the
following audit procedures:
- We have obtained management’s assessment
of the understanding and the nature of the farm-
the
out
judgement
in selecting and applying an
accounting policy;
arrangement,
challenged
and
- We have agreed the underlying arrangement to
the signed contracts between the respective
entities;
- We have corroborated the cash consideration
received, and have verified that it has been
adequately reflected in the financial statements;
and
- Reviewed and assessed management’s
financial
included within
the
disclosures
statements.
Key observations:
Based on the procedures performed, we concur with
the accounting treatment for the farm out transaction,
deeming it to be acceptable.
42
Jersey Oil and Gas plc
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions
of reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these
levels will not necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the
particular circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance
materiality as follows:
Materiality
Group financial statements
2023
£
418,000
Parent company financial statements
2023
£
165,000
Basis for determining materiality
1.5% of total assets
1.7% of total assets
Rationale
applied
for
the benchmark
We considered total assets to be the
most significant determinant of the
Group’s financial performance for
users of the financial statements,
given the Group’s exploration focus.
We considered total assets to be the most
the parent
significant determinant of
company’s financial performance for users of
the financial statements, given the nature of
the entity as a holding company within the
group.
Performance materiality
271,700
107,200
determining
for
Basis
performance materiality
Rationale
applied
materiality
for
for
the percentage
performance
65% of overall materiality
Performance materiality was set considering factors including the nature of activities
and expected total value of known and likely misstatements, based on our
understanding of the group.
Component materiality
For the purposes of our Group audit opinion, we set materiality for each significant component of the Group, apart from the Parent
Company whose materiality is set out above, based on a percentage of between 55% and 85% of Group materiality dependent
on the size and our assessment of the risk of material misstatement of that component. Other than the parent company,
component materiality ranged from £229,000 to £355,000. In the audit of each component, we further applied performance
materiality levels of 65% of the component materiality to our testing to ensure that the risk of errors exceeding component
materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of £12,500. We also
agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other information
The directors are responsible for the other information. The other information comprises the information included in the annual
report other than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance
conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears
to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to
determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we
have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
43
Jersey Oil and Gas plc
We have nothing to report in this regard.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions and matters as described below.
Strategic
and
report
report
Directors’
Matters on which
we are required to
report
by
exception
In our opinion, based on the work undertaken in the course of the audit:
the information given in the Strategic report and the Directors’ report for the financial year for which
the financial statements are prepared is consistent with the financial statements; and
the Strategic report and the Directors’ report have been prepared in accordance with applicable
legal requirements.
In the light of the knowledge and understanding of the Group and Parent Company and its environment
obtained in the course of the audit, we have not identified material misstatements in the strategic report
or the Directors’ report.
We have nothing to report in respect of the following matters in relation to which the Companies Act
2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept by the Parent Company, or returns
adequate for our audit have not been received from branches not visited by us; or
the Parent Company financial statements are not in agreement with the accounting records
and returns; or
certain disclosures of Directors’ remuneration specified by law are not made; or
we have not received all the information and explanations we require for our audit.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities statement, the Directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the Directors determine is
necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, the Directors are responsible for assessing the Group’s and the Parent 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 Parent Company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or
in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
Extent to which the audit was capable of detecting irregularities, including fraud
44
Jersey Oil and Gas plc
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:
Non-compliance with laws and regulations
Based on:
Our understanding of the Group and the industry in which it operates;
Obtaining and understanding of the Group’s policies and procedures regarding compliance with laws and regulations
Discussion with management and the Audit Committee, and;
We considered the significant laws and regulations to be UK adopted International Accounting Standards, UK tax legislation,
Petroleum Act 1998, the AIM Listing Rules and Companies Act 2006.
The Group is also subject to laws and regulations where the consequence of non-compliance could have a material effect on the
amount or disclosures in the financial statements, for example through the imposition of fines or litigations. We identified such
laws and regulations to be the Petroleum Act 1998.
Our procedures in respect of the above included:
Review of minutes of meeting of those charged with governance for any instances of non-compliance with laws and
regulations;
Review of correspondence with regulatory and tax authorities including the NSTA and HMRC for any instances of non-
compliance with laws and regulations;
Review of financial statement disclosures and agreeing to supporting documentation;
Involvement of tax specialists in the audit; and
Review of legal expenditure accounts to understand the nature of expenditure incurred.
Fraud
We assessed the susceptibility of the financial statements to material misstatement, including fraud. Our risk assessment
procedures included:
Enquiry with management and those charged with governance regarding any known or suspected instances of fraud;
Obtaining an understanding of the Group’s policies and procedures relating to:
o Detecting and responding to the risks of fraud; and
o
Internal controls established to mitigate risks related to fraud.
Review of minutes of meeting of those charged with governance for any known or suspected instances of fraud;
Discussion amongst the engagement team as to how and where fraud might occur in the financial statements;
Performing analytical procedures to identify any unusual or unexpected relationships that may indicate risks of material
misstatement due to fraud; and
Considering remuneration incentive schemes and performance targets and the related financial statement areas
impacted by these.
Based on our risk assessment, we considered the areas most susceptible to fraud to be management override of controls, and
areas of judgment due to the level of subjectivity involved in them.
Our procedures in respect of the above included:
Holding fraud inquiries with management and those charged with governance to identify whether any instances of fraud
were noted in the period;
Testing the financial statement disclosures to supporting documentation, performing testing on account balances which
were considered to be a greater risk of susceptibility to fraud. These balances relate to our key audit matters as
disclosed above;
Making enquiries of management as to whether there was any correspondence with regulators and the Government,
in so far as the correspondence related to the financial statements and reviewed this correspondence;
Performing targeted journal entry testing based on identified characteristics the audit team considered could be
indicative of fraud to address the presumed risk of management override of controls. For example, we tested
45
Jersey Oil and Gas plc
capitalisation to the exploration assets with the opposite entry being processed against bank and cash accounts and
not against liability accounts.
Reviewing the Group’s year end unadjusted entries, consolidated entries and investigating any that appear unusual as
to nature or amount by agreeing to supporting documentation; and
Assessing significant estimates made by management for bias.
We also communicated relevant identified laws and regulations and potential fraud risks to all engagement team members who
were all deemed to have appropriate competence and capabilities and remained alert to any indications of fraud or non-
compliance with laws and regulations throughout the audit.
Our audit procedures were designed to respond to risks of material misstatement in the financial statements, recognising that 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, misrepresentations or through collusion. There are inherent
limitations in the audit procedures performed and the further removed non-compliance with laws and regulations is from the
events and transactions reflected in the financial statements, the less likely we are to become aware of it.
further description of our
A
responsibilities
www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
is available on
the Financial Reporting Council’s website at:
Use of our report
This report is made solely to the Parent Company’s members, as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company’s members those
matters we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law,
we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company’s members as a
body, for our audit work, for this report, or for the opinions we have formed.
/s/BDO LLP
John Black (Senior Statutory Auditor)
For and on behalf of BDO LLP, Statutory Auditor
London, UK
10 May 2024
BDO LLP is a limited liability partnership registered in England and Wales (with registered number OC305127).
46
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2023
Jersey Oil and Gas plc
Continuing operations
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
7
6
6
7
8
9
9
2023
£
(5,706,675)
(5,706,675)
114,825
(3,503)
(5,595,353)
-
(5,595,353)
(5,595,353)
2022
£
(3,185,103)
(3,185,103)
82,842
(4,730)
(3,106,991)
-
(3,106,991)
(3,106,991)
(5,595,353)
(3,106,991)
(17.19)
(17.19)
(9.54)
(9.54)
The notes on pages 51 to 71 are an integral part of these financial
statements
47
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
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
Term deposits
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
2023
£
2022
£
10
11
12
13
14
15
16
20
17
18
12
16,421,797
-
139,661
2,692
16,564,150
478,234
5,482,935
5,000,000
10,961,169
27,525,319
2,574,529
110,535,059
3,890,986
(89,960,102)
(382,543)
26,657,929
71,309
71,309
740,927
55,154
796,081
867,390
27,525,319
24,372,882
10,203
81,328
31,112
24,495,525
167,060
6,579,349
-
6,746,409
31,241,934
2,573,395
110,309,524
2,566,343
(84,600,273)
(382,543)
30,466,446
-
-
688,796
86,692
775,488
775,488
31,241,934
The financial statements on pages 47 to 50 were approved by the Board of Directors and authorised for issue on 10
May 2024 They were signed on its behalf by Graham Forbes – Chief Financial Officer.
O
v
e
r
v
i
e
w
O
u
r
G
o
v
e
r
n
a
n
c
e
Graham Forbes
Chief Financial Officer
10 May 2024
Company Registration Number: 07503957
The notes on pages 51 to 71 are an integral part of these financial
statements
48
Jersey Oil and Gas plc
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Called up
share
capital
£
2,573,395
Share
premium
account
£
110,309,524
Share
options
reserve
£
1,397,287
Note
Accumulated
losses
£
Reorganisation
reserve
£
(81,551,730)
(382,543)
Total
equity
£
32,345,933
-
-
-
(3,106,991)
-
(3,106,991)
20
20
-
-
2,573,395
-
-
110,309,524
(58,448)
1,227,504
2,566,343
58,448
-
(84,600,273)
-
-
(382,543)
-
1,227,504
30,466,446
-
-
-
(5,595,353)
-
(5,595,353)
20
20
20
20
1,134
-
-
-
-
2,574,529
225,535
-
-
-
-
110,535,059
-
-
(148,178)
(87,346)
1,560,167
3,890,986
-
-
148,178
87,346
-
(89,960,102)
-
-
-
-
-
(382,543)
226,669
-
-
-
1,560,167
26,657,929
At 1 January 2022
Loss and total
comprehensive
loss for the year
Transactions with owners in
their capacity as owners
Expired share options
Share based payments
At 31 December 2022 and
1 January 2023
Loss and total
comprehensive
loss for the year
Transactions with owners in
their capacity as owners
Issue of share capital
Expired share options
Lapsed share options
Exercised share options
Share based payments
At 31 December 2023
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
Accumulated losses
Reorganisation 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
49
CONSOLIDATED STATEMENT OF CASH FLOWS
Jersey Oil and Gas plc
For the year ended 31 December
Cash flows from operating activities
Cash from/(used in) operations
Interest received
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Farm-out proceeds
Purchase of intangible assets
Investing cash flows before movements in capital balances
Changes in Term deposits:
Net cash used in investing activities
Cash flows from financing activities
Principal elements of lease payments
Net cash (used in)/generated from financing activities
Decrease in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
Note
22
6
6
10
15
22
14
14
2023
£
2022
£
(4,185,049)
114,825
(3,503)
(4,073,727)
9,103,944
(1,013,081)
8,090,863
(3,319,445)
82,842
(4,730)
(3,241,333)
-
(3,092,186)
(3,092,186)
(5,000,000)
3,090,863
-
(3,092,186)
(113,550)
(113,550)
(1,096,414)
6,579,349
5,482,935
(125,520)
(125,520)
(6,459,039)
13,038,388
6,579,349
The notes on pages 51 to 71 are an integral part of these financial statements
50
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
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 England & Wales 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. Material 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 2023 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").
The financial statements have been prepared under the historic cost convention, except as disclosed in the
accounting policies below. All amounts disclosed in the financial statements and notes have been rounded off to the
nearest one thousand pounds unless otherwise stated.
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. The Group has substantial cash reserves following the successful farm-
out of the GBA licences and receipt of initial funds resulting from the two transactions with NEO and Serica. The
Group now has a fully funded 20% interest in the on-going Buchan redevelopment project. Other work that the
Group is undertaking in respect of the GBA licenses and surrounding areas is modest relative to its current cash
reserves. 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.
Even in an extreme scenario where the Buchan development project did not progress for any unforeseen reason and
any future instalment payments were not realised, the Group has the flexibility within its cost structure to amend its
expenditure profile and continue in business beyond the next 12 months solely from utilisation of its existing cash
resources. The directors have also considered the risk associated with contractual arrangements associated with the
farm-out and are satisfied that the group is not exposed to any contractual commitments which could impact on the
Group’s going concern status over the next 12 months. Based on these circumstances, the directors have considered
it appropriate to adopt the going concern basis of accounting in preparing the consolidated financial statements.
51
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
New and amended standards adopted by the Group. The Group has applied the following amendments for the first
time for the annual reporting period commencing 1 January 2023:
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);
Definition of Accounting Estimates (Amendments to IAS 8);
Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12);
IFRS 17 Insurance Contracts (Amendments to IFRS 17).
The amendments listed above did not have any impact on the amounts recognised in prior periods and are not
expected to significantly affect the current or future periods.
New standards and interpretations not yet adopted
Certain new accounting standards, amendments to accounting standards and interpretations have been published
that are not mandatory for 31 December 2023 reporting periods and have not been early adopted by the Group.
These standards, amendments or interpretations are not expected to have a material impact on the entity in the
current or future reporting periods or on foreseeable future transactions.
IFRS 16 Leases (Amendment – Liability in a Sale and Leaseback);
IAS 1 Presentation of Financial Statements (Amendment – Classification of Liabilities as Current or Non-
current);
IAS 1 Presentation of Financial Statements (Amendment – Non-current Liabilities with Covenants).
Significant Accounting Judgements and Estimates
The preparation of the financial statements requires management to make estimates and assumptions that affect the
reported amounts of expenses, assets and liabilities at the date of the financial statements. If in the 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 judgement of the existence of impairment triggers (note 10).
The estimation of share-based payment costs (note 20).
The judgement associated with the treatment of farm-out transactions.
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.
52
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
Share-Based Payments
The Group currently has several share schemes that give rise to share-based payment charges. The charge to
operating profit for these schemes amounted to £1,560,167 (2022: £1,227,504). 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 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.
Estimates are also used when calculating the likelihood of share options vesting given the vesting conditions of time
and performance on the options granted.
Farm-out transactions
Determining the value of the consideration received for a farm-out disposal of assets with proven resources can be
challenging. This is even more the case for assets which are farmed out in the pre proven resources phase. A
judgement has been made that for such farm-outs only cash payments received will be recognised and no
recognition will be made of any consideration in respect of the future value of work to be performed and carried by
the farmee. Rather, the Group will carry the remaining interest at the previous full interest cost reduced by the
amount of any cash consideration received from entering into the agreement. The effect will be that there is no gain
recognised on the farm-out unless the cash consideration received exceeds the carrying value of the entire asset
held. Upon FID, the Group will start recognising both cash payments received and the value of future carried assets
to be received, and will recognise a future asset receivable with an accompanying gain in the income statement for
the equity share of the asset disposed of.
Basis of Consolidation
(a) Subsidiaries
Subsidiaries are all entities over which the Group has the power to govern their financial and operating policies
generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of
potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group
controls another entity. The Group also assesses the existence of control where it does not have more than 50% of the
voting power but is able to govern the financial and operating policies by virtue of de facto control. De facto control
may arise in circumstances where the size of the Group’s voting rights relative to the size and dispersion of holdings
of other Shareholders give the Group the power to govern the financial and operating policies.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated
from the date the Group ceases to have control.
(b) Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions
- that is, as transactions with the owners in their capacity as owners. The difference between fair value of any
consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in
equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.
(c) Disposal of subsidiaries
When the Group ceases to have control any retained interest in the entity is remeasured to its fair value at the date
when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying
amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture, or financial
asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are
accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts
previously recognised in other comprehensive income are reclassified to profit or loss.
53
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
Inter-company transactions, balances, income and expenses on transactions between Group companies are
eliminated on consolidation. Profits and losses resulting from inter-company transactions that are recognised in assets
are also eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the Group.
The following subsidiaries which are included in these consolidated accounts are exempt from the requirements of
the Companies Act relating to the audit of their accounts under section 479A of the Companies Act 2006:
Subsidiary
Jersey North Sea Holdings Ltd
Jersey Petroleum Ltd
Jersey V&C Ltd
JOG Fox Ltd
Jersey E & P Ltd
Jersey Oil Ltd
Jersey Exploration Ltd
Jersey Oil & Gas E & P Ltd
Registration number
06451896
06490608
10853027
15224480
SC319467
SC319461
SC319459
115157
Acquisitions, Asset Purchases and Disposals
Country of Incorporation
England & Wales
England & Wales
England & Wales
England & Wales
Scotland
Scotland
Scotland
Jersey
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 meet 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 on a business combination 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.
54
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
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 soon 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 and value in use.
As at 31 December 2023, the carrying value of intangible assets was £16.4m, 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 likely be extended by the NSTA. Based on this
assessment, no impairment triggers existed in relation to exploration assets as of 31 December 2023.
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55
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
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 payments 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 rates provided by
banks or financial institutions 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.
56
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
Joint Ventures
The Group participates in joint venture/co-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.
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.
57
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
Current Tax
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 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 using the Black-Scholes Model:
•
•
•
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.
58
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Contingent Liabilities & Provisions
In accordance with IAS 37, provisions are recognised where a present obligation exists to third parties as a result of a
past event, where a future outflow of resources with economic benefits is probable and where a reliable estimate of
that outflow can be made. If the criteria for recognising a provision are not met, but the outflow of resources is not
remote, such obligations are disclosed in the notes to the consolidated financial statements (see note 19).
Contingent liabilities are only recognised if the obligations are more certain, i.e. the outflow of resources with
economic benefits has become probable and their amount can be reliably estimated.
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.
The Board is the Group’s chief operating decision maker within the meaning of IFRS 8 “Operating Segments”.
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During 2023 and 2022 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.
59
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
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 towards production then typically more debt is available. The Group seeks to
maintain progress in developing its assets in a timely fashion. With the completion of the NEO Energy farm-out
during the year and the Serica Energy farm-out post year end (refer to Note 23, Post Balance Sheet Events) the Group
expects ’s that the introduction of these two industry partners will deliver sufficient cash to progress its assets to first
oil in return for a capital (equity) contribution via the farm-outs. As the GBA development project progresses towards
first oil, debt becomes available and may be sought in order to enhance equity returns. As at 31 December 2023 there
are no borrowings within the Group (2022: 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
2023
£
410,011
-
-
410,011
2023
£
613,067
-
-
613,067
2023
£
14,585
14,585
102,095
131,265
2022
£
69,735
-
31,112
100,847
2022
£
620,713
-
-
620,713
2022
£
31,971
32,212
22,509
86,692
60
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Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
5. Employees and Directors
Wages and salaries
Social security costs
Share-based payments (note 20)
Other pension costs
Jersey Oil and Gas plc
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2023
£
2,860,964
289,654
1,560,167
265,538
4,976,323
2022
£
2,312,653
194,332
1,227,504
209,394
3,943,883
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 20)
Benefits
2023
No.
5
1
8
14
2023
£
1,174,317
39,047
853,551
9,585
2,076,500
2022
No.
5
1
9
15
2022
£
664,200
26,500
618,914
12,645
1,322,259
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
2023
No.
2
2022
No.
2
2023
£
520,586
324,902
26,667
872,155
2022
£
255,699
228,648
25,000
509,347
61
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Key management compensation
Key management includes Directors (Executive and Non-Executive) and an adviser 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 20)
Pension Contributions
6. Net Finance Income
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
Foreign exchange gain
2023
£
1,193,901
853,551
39,047
2,086,499
2022
£
698,513
618,914
26,500
1,343,927
2023
£
2022
£
114,825
114,825
82,842
82,842
-
(3,503)
(3,503)
111,322
(7)
(4,723)
(4,730)
78,112
2023
£
10,203
94,988
85,000
-
-
(26,774)
2022
£
29,873
103,680
105,000
25,000
-
(6,735)
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62
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
8. Tax
Reconciliation of tax charge
Loss before tax
Tax at the standard rate of 23.5% avg. (2022: 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
Jersey Oil and Gas plc
2023
£
(5,595,353)
(1,314,908)
(671,854)
370,622
1,616,140
–
2022
£
(3,106,991)
(590,328)
(90,204)
234,654
445,878
–
No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2023, or for the year
ended 31 December 2022.
In April 2023, the rate of corporation tax rose to 25% for profits over £250,000.
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 £63 million (2022: £62 million).
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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 a loss recorded in the
year.
The share options (note 20) issued in the Group that would potentially dilute earnings per share in the future have
not been included in the calculation of diluted loss per share as their effect would be anti-dilutive.
Year ended 31 December 2023
Basic and Diluted EPS
Basic & Diluted
Year ended 31 December 2022
Basic and Diluted EPS
Basic & Diluted
Loss attributable
to ordinary
shareholders
£
Weighted
average number
of shares
Per share amount
pence
(5,595,353)
32,557,964
(17.19)
(3,106,991)
32,554,293
(9.54)
63
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
10. Intangible assets
Cost
At 1 January 2022
Additions
At 31 December 2022
Additions
Farm-out
At 31 December 2023
Accumulated Amortisation
At 1 January 2022
Charge for the year
At 31 December 2022
At 31 December 2023
Net Book Value
At 31 December 2023
At 31 December 2022
Jersey Oil and Gas plc
Exploration
costs
£
21,689,394
2,858,729
24,548,122
1,152,860
(9,103,944)
16,597,038
175,241
–
175,241
175,241
16,421,797
24,372,882
At the start of 2022 and 2023 the Company owned 100% interests in two licenses; P2498 containing the Buchan
field and J2 Discovery, and P2170 containing the Verbier discovery.
At the end of 2023 the costs incurred in acquiring and advancing the licenses to their current state was £25,700,982
(2022: £24,548,122). During 2023 the farm-out of a 50% interest in both licenses to NEO energy was completed in
exchange for a series of cash payments and both a predevelopment and development carry on the Buchan
Redevelopment project. In accordance with our farm-out policy for assets at this stage of development (please refer
to section on Acquisitions, Asset Purchases and Disposals on page 54) the cash proceeds in the year of £9,103,944
have been deducted from the carrying value of the assets.
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 2023 there are not deemed to be
indicators that the licences are not commercial and the carrying value of £16,475,394 continues to be supported by
ongoing exploration and development work on the licence areas with no impairments considered necessary.
64
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
11. Property, Plant and Equipment
Cost
At 1 January 2022
Additions
At 31 December 2022
Additions
At 31 December 2023
Accumulated Depreciation
At 1 January 2022
Charge for the year
At 31 December 2022
Charge for the year
At 31 December 2023
Net Book Value
At 31 December 2023
At 31 December 2022
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
£
228,447
-
228,447
-
228,447
188,370
29,873
218,244
10,203
228,447
-
10,203
2022
£
81,328
81,328
86,692
-
86,692
2023
£
139,661
139,661
55,154
71,309
126,463
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 2023 remained at 3% and the leases relate to office space.
A new lease agreement was entered into in June 2023 for a total of 9 years with break clauses after 3 and 6 years The
interest rate implicit in the agreement was 3% over the Bank of England’s base rate. Given the 3-year break clause and
the future plans for the business it was deemed appropriate to recognise the liability relating to a 3-year period. This
lease was in relation to an office in Jersey.
Amounts Recognised in the Statement of comprehensive income
Depreciation charge of right-of-use asset
Buildings
Interest expenses (included in finance cost)
2023
£
94,988
94,988
(3,503)
2022
£
103,680
103,680
(4,723)
65
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
13. Trade and other receivables
Current:
Other receivables
Value added tax
Prepayments
Jersey Oil and Gas plc
2023
£
328,166
81,846
68,222
478,234
2022
£
30
69,702
97,328
167,060
Included within other receivables is an amount of £233,055 relating to monies outstanding from the exercise of
share options.
14. Cash and cash equivalents
Cash in bank accounts
The cash balances are placed with creditworthy financial institutions with a minimum rating of ‘A’.
2023
£
5,482,935
2022
£
6,579,349
15. Term deposits
Maturing within ten months
Term deposits are placed with a creditworthy financial institution with a minimum rating of ‘A’. The £5m was placed in
Dec 2023 with an interest rate of 5%.
2023
£
5,000,000
2022
£
-
16. Called up share capital
Issued:
Number:
32,667,627 (2022: 32,554,293)
Ordinary shares have a par value of 1p. They entitle the holder to participate in dividends, distributions 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.
Included in the above are ordinary shares of 1,667 (2022; nil) which were committed to be issued at the year end but
not allotted until January 2024.
In 2023, 113,334 new ordinary shares were issued to satisfy the exercise of share options which raised £233,053 (gross)
which was not paid at year end and is included in other receivables. All other issued share capital was fully paid.
2023
£
2,574,529
Nominal
value
1p
£
2,573,395
Class
Ordinary
2022
17. Trade and other payables
Current:
Trade payables
Accrued expenses
Other payables
Taxation and Social Security
2023
£
345,814
256,283
10,970
127,860
740,927
2022
£
459,461
161,253
-
68,082
688,796
66
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
18. Lease liabilities
Non-Current
Lease Liabilities
19. Contingent Liabilities
Jersey Oil and Gas plc
2023
£
71,309
71,309
2022
£
-
-
(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 consisted 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 had 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 included 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 FDP.
The earliest of the milestone payments in respect of the acquisition is not currently anticipated being payable before
the start of 2025.
67
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
20. 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 the number of shares that will eventually vest.
The Group’s share option schemes are for Directors, Officers and employees. The charge for the year was £1,560,167 (2022:
£1,227,504) and details of outstanding options are set out in the table below.
Exercise
price
(pence)
1,500
1,500
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
230
230
230
230
230
230
247.5
247.5
247.5
247.5
247.5
247.5
Date of Grant
May-13
May-13
Jan-18
Jan-18
Jan-18
Jan-18
Nov-18
Jan-19
Jan-19
Jan-19
Jan-19
Jan-19
Jan-19
Jun-19
Jun-19
Jan-21
Jan-21
Jan-21
Mar-21
Mar-21
Mar-21
Mar-21
Mar-21
Mar-21
Nov-21
Nov-21
Nov-21
Apr-22
Apr-22
Apr-22
Apr-22
Apr-22
Apr-22
Apr-23
Apr-23
Apr-23
Apr-23
Apr-23
Apr-23
Vesting date
May-14
May-15
Jan-21
Jan-18
Jan-19
Jan-20
Nov-21
Jan-20
Jan-21
Jan-22
Jan-20
Jan-21
Jan-22
Jan-21
Jun-19
Jan-22
Jan-23
Jan-24
Mar-22
Mar-23
Mar-24
Mar-22
Mar-23
Mar-24
Nov-22
Nov-23
Nov-24
Apr-23
Apr-24
Apr-25
Apr-23
Apr-24
Apr-25
Apr-24
Apr-25
Apr-26
Apr-24
Apr-25
Apr-26
Expiry date
May-23
May-23
Jan-25
Jan-23*
Jan-23*
Jan-23*
Nov-25
Jan-26
Jan-26
Jan-26
Jan-24
Jan-24
Jan-24
Jun-29
Jun-29
Jan-28
Jan-28
Jan-28
Mar-26
Mar-26
Mar-26
Mar-28
Mar-28
Mar-28
Nov-28
Nov-28
Nov-28
Apr-29
Apr-29
Apr-29
Apr-27
Apr-27
Apr-27
Apr-30
Apr-30
Apr-30
Apr-28
Apr-28
Apr-28
Options
lapsed/non
vesting
during the
year
No. of shares
for which
options
outstanding at
31 Dec 2023
No. of shares
for which
options
Options
Options
outstanding at
Exercised
issued
1 Jan 2023
- (9,500)
-
-
9,500
- (9,500)
-
-
9,500
420,000
-
-
-
420,000
- (40,000)
36,666
-
76,666
- (40,000)
36,667
-
76,667
- (33,333)
36,667
-
70,000
150,000
-
-
-
150,000
88,333
-
-
-
88,333
88,333
-
-
-
88,333
68,333
-
-
-
68,333
11,667
-
-
-
11,667
-
-
-
11,667
11,667
- 11,667
-
-
11,667
120,000
-
-
-
120,000
-
-
-
40,000
40,000
83,333
- 83,333
-
-
75,000
-
-
-
75,000
- (15,000)
60,000
-
75,000
11,666
-
-
-
11,666
11,667
-
-
-
11,667
11,667
-
-
-
11,667
- (6,667)
130,001
-
136,668
- (6,667)
86,666
-
93,333
- (15,000)
78,333
-
93,333
233,334
-
-
-
233,334
233,333
-
-
-
233,333
233,333
-
-
-
233,333
- (6,667)
278,333
-
285,000
- (16,667)
268,333
-
285,000
- (16,667)
268,333
-
285,000
45,000
-
-
-
45,000
45,000
-
-
-
45,000
45,000
-
-
-
45,000
- (2,500)
169,167
- 171,667
- (2,500)
169,167
- 171,667
- (2,500)
169,166
- 171,666
28,334
-
-
- 28,334
28,333
-
-
- 28,333
28,333
-
-
- 28,333
*The share options issued in January 2018 had their expiry dates extended due to the Company being in several close periods whereby according to the
scheme rules the options were unable to be exercised. The amended expiry date for these options was 29 January 2024 with the remaining
outstanding balances expiring on this date.
Total
3,910,832
68
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
Jersey Oil and Gas plc
The weighted average value 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 ranging between 3.9% and 4.1%. The volatility measured at the standard deviation of
continuously compounded share returns is based on a statistical analysis of daily share prices from over a four year
period. The weighted average exercise price for the options granted in 2023 was 247.50 pence, the weighted
average remaining contractual life of the options was 6 years (for all schemes 4 years), the weighted average
volatility rate was 115% and the dividend yield was nil. During the year 19,000 share options from the May 2013
issuance expired, these had an exercise price of 1,500 pence, a further 90,835 share options were forfeited due to
the departure of employees, these had a weighted exercise price of 213 pence. In December 2023 113,333 share
options that were granted in January 2018 were exercised by former employees, these had an exercise price of 200
pence. The weighted average exercise price for all outstanding options at 31 December 2023 was 200 pence. For
details of the schemes and scheme rules, please refer to the Remuneration Report.
21. 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
JOG Fox 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%
100%
Country of
Incorporation
England & Wales
England & Wales
England & Wales
England & Wales
Scotland
Scotland
Scotland
Jersey
Principal
Activity
Non-Trading
Oil Exploration
Oil Exploration
Oil Exploration
Non-Trading
Non-Trading
Non-Trading
Management
services
Registered
Office
1
1
1
1
2
2
2
3
10 The Triangle, ng2 Business Park, Nottingham, NG2 1AE
7 Queen’s Gardens, Aberdeen, AB15 4YD
1.
2.
3. First Floor, Tower House, La Route es Nouaux, St Helier, Jersey JE2 4ZJ
22. 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
Depreciation right-of-use asset
Share-based payments
Finance costs
Finance income
(Increase)/decrease in trade and other receivables
Decrease in trade and other payables
Cash from/(used in) operations
2023
£
(5,595,353)
10,203
94,988
1,560,167
3,503
(114,825)
(4,041,317)
(109,685)
(34,047)
(4,185,049)
2022
£
(3,106,991)
29,873
103,680
1,227,504
4,730
(82,842)
(1,824,046)
186,054
(1,681,452)
(3,319,445)
69
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Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
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 2023
Cash and cash equivalents
Year ended 2022
Cash and cash equivalents
31 Dec 2023
£
5,482,935
31 Dec 2022
£
6,579,349
Cash and cash equivalents
Net cash
£
6,579,349
6,579,349
At 1 Jan 2023
Analysis of net cash
Cash outflow
£
01 Jan 2023
£
6,579,349
01 Jan 2022
£
13,038,388
At 31 Dec 2023
£
In December 2023 £5m was placed on 10-month deposit at a fixed rate of 5%.
(1,096,414)
(1,096,414)
5,482,935
5,482,935
70
Jersey Oil and Gas plc
Notes to the Consolidated Financial Statements
For the year ended 31 December 2023
23. Post balance sheet events
On 26 February 2024, Jersey Oil & Gas plc announced that, further to the press release issued on 23 November 2023,
the Company had completed its farm-out of a 30% interest in the Greater Buchan Area (“GBA”) licences to Serica
Energy (UK) Limited (“Serica”) and received the associated milestone cash payment of $6.8 million.
The farm-out transaction with Serica is on identical pro-rata terms to that previously completed with NEO Energy
("NEO") earlier in 2023. In aggregate, the two transactions result in JOG retaining a 20% interest in the GBA
licences, a full carry on the capital expenditure required to bring the Buchan field into production and a number of
milestone cash payments. Upon completion of the Serica Farm-out, the combined cash payments received from the
two farm-outs were approximately $18 million, with up to a further $20 million due to be paid to JOG upon Buchan
Field Development Plan ("FDP") approval.
In exchange for entering into definitive agreements to divest a 30% working interest in the GBA licences, the Company
is set to receive from Serica:
a 7.5% carry of the estimated $25 million cost to take the Buchan field through to FDP approval
a 7.5% carry of the Buchan field development costs, up to the budget included in the approved
FDP; equivalent to a 1.25 carry ratio
a $6.8 million cash payment on completion, which includes a $5.6 million payment associated
with the finalisation of the GBA development solution and associated acquisition of the "Western
Isles" FPSO – this payment has been received
a $7.5 million cash payment on approval of the Buchan FDP by the NSTA
a $3 million cash payment on each FDP approval by the NSTA in respect of the J2 and Verbier oil
discoveries
The primary condition precedent to completing the Serica Farm-out was receipt of approval from the NSTA for the
transaction.
24. Availability of the annual report 2023
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.
71
Contents for the Company Financial Statements
For year ended 31 December 2023
Company Statement of Financial Position
Company Statement of Changes in Equity
Notes to the Company Financial Statements
Jersey Oil and Gas plc
Pages
73
74
75
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COMPANY STATEMENT OF FINANCIAL POSITION
As at 31 December 2023
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
Term deposits
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
4
5
6
7
8
9
10
6
11
6
Note
2023
£
2022
£
-
10,010
45,649
55,659
-
-
-
-
377,091
4,520,924
5,000,000
9,898,015
9,898,015
31,842,163
6,436,069
-
38,278,232
38,333,891
2,574,529
110,535,059
3,890,981
(112,653,103)
4,347,466
2,573,395
110,309,524
2,566,338
(77,623,549)
37,825,708
-
-
5,550,549
-
5,550,549
9,898,015
471,893
36,290
508,183
38,333,891
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 £35,265,078
(2022: Loss of £1,395,692).
The financial statements on pages 73 and 74 were approved by the Board of Directors and authorised for issue on 10 May
2024. They were signed on its behalf by Graham Forbes – Chief Financial Officer.
Graham Forbes
Chief Financial Officer
10 May 2024
Company Registration Number: 07503957
The notes on pages 75 to 80 are an integral part of these financial
statements
73
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2023
Jersey Oil and Gas plc
At 1 January 2022
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners
Expired share options
Transactions with owners (share-
based payments)
At 31 December 2022
Total comprehensive loss for the
year
Transactions with owners in their
capacity as owners
Issue of share capital
Lapsed share options
Exercised share options
Transactions with owners (share-
based payments)
At 31 December 2023
Note
Called up
share
capital
£
2,573,395
–
Share
premium
account
£
110,309,524
–
Share
options
reserve
£
1,397,282
–
Accumulated
losses
£
(76,286,305)
(1,395,692)
Total
equity
£
37,993,896
(1,395,692)
5
5
–
–
–
–
(58,448)
1,227,504
58,448
–
–
1,227,504
2,573,395
–
110,309,524
–
2,566,338
–
(77,623,549)
(35,265,078)
37,825,708
(35,265,078)
1,134
–
–
–
225,535
–
–
–
–
(148,178)
(87,346)
1,560,167
–
148,178
87,346
–
226,669
–
–
1,560,167
2,574,529
110,535,059
3,890,981
(112,653,103)
4,347,466
The following describes the nature and purpose of each reserve:
Description and purpose
Represents the nominal value of shares issued
Reserve
Called up share
capital
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
Amount subscribed for share capital in excess of nominal value
Accumulated losses Cumulative net gains and losses recognised in the profit and loss and other comprehensive income
or loss
The notes on pages 75 to 80 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 2023
1. Significant accounting policies
The financial statements of Jersey Oil and Gas Plc have been prepared in accordance with Financial Reporting
Standard 101, ‘Reduced Disclosure Framework’ (FRS 101). 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.
The material 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 these 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; and
o paragraph 73(e) of IAS 16, 'Property, plant and equipment';
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.
75
Jersey Oil and Gas plc
Notes to the Company Financial Statements
For the year ended 31 December 2023
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. The Group has substantial cash reserves following the successful farm-
out of the GBA and receipt of initial funds resulting from the two transactions with NEO and Serica. The Group now
has a fully funded 20% interest in the on-going Buchan redevelopment project. Other work that the Group is
undertaking in respect of the GBA licenses and surrounding areas is modest relative to its current cash reserves. 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. Even in an
extreme scenario where the Buchan development did not progress for any unforeseen reason and any future
instalment payments were not realised the Group has the flexibility within its cost structure to amend its expenditure
profile and continue in business beyond the next 12 months solely from utilisation of its existing cash resources. The
directors have also considered the risk associated with contractual arrangements associated with the farm-out and
are satisfied that the group is not exposed to any contractual commitments which could impact on the Group’s going
concern status over the next 12 months. Based on these circumstances, the directors have considered it appropriate
to adopt the going concern basis of accounting in preparing the 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
2023
£
2,110,259
270,036
1,560,167
219,753
4,160,215
2022
£
1,499,246
198,718
1,227,504
165,019
3,090,487
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
2023
4
1
6
11
2021
4
1
7
12
For details relating to the remuneration for the Directors and highest paid Director please refer to note 5 of the
consolidated financial statements.
76
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Notes to the Company Financial Statements
For the year ended 31 December 2023
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 £35,265,078 (2022: Loss of £1,395,692).
Auditors’ remuneration is disclosed in note 7 in the consolidated financial statements.
4. Investment in subsidiaries
Company – shares in subsidiary undertakings:
2023
£
–
2022
£
–
Following the waive of the intercompany balance owed by Jersey Petroleum Limited by way of a deed or forgiveness,
£27.5m was capitalised as an investment in subsidiary then subsequently impaired due to a doubt in recoverability.
The subsidiary undertakings at 31 December 2023 were as
follows:
% owned
Subsidiary
Jersey Petroleum Ltd*
Jersey North Sea Holdings Ltd*
County of
Incorporation
England & Wales
England & Wales
Jersey V&C Ltd*
England & Wales
JOG Fox Ltd*
England & Wales
Jersey E & P Ltd**
Scotland
Jersey Oil Ltd**
Scotland
Jersey Exploration Ltd**
Scotland
Jersey Oil & Gas E & P Ltd***
Jersey
* Registered address: 10 The Triangle, ng2 Business Park, Nottingham, NG2 1AE
100%
100%
100%
100%
100%
100%
100%
100%
** Registered address: 7 Queen’s Gardens, Aberdeen AB15 4YD
*** Registered address: First Floor, Tower House, La Route es Nouaux, St Helier, Jersey, JE2 4ZJ
5. Property, plant and equipment
Cost
At 1 January 2023
At 31 December 2023
Accumulated depreciation
At 1 January 2023
Charge for year
At 31 December 2023
Net book value
At 31 December 2023
At 31 December 2022
Principal Activity
Non-Trading
Oil Exploration
Oil Exploration
Oil Exploration
Non-Trading
Non-Trading
Non-Trading
Management services
Office
equipment
£
178,960
178,960
168,950
10,010
178,960
-
10,010
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Notes to the Company Financial Statements
For the year ended 31 December 2023
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
2023
£
-
-
-
-
-
2022
£
45,649
45,649
36,290
-
36,290
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 2023 remained at 3% and the leases relate
to office space.
A new lease agreement was entered into in September 2023 with a lease end date of September 2024 this had a
rolling 3-month notice clause, this was in relation to the London office, 3 months’ notice on this lease was served in
January 2024. The lease was treated as a short-term lease and not a right-of-use asset.
Amounts Recognised in the Statement of comprehensive income
Depreciation charge of right-of-use asset
Buildings
Interest expenses (included in finance cost)
2023
£
45,649
45,649
(410)
2022
£
60,865
60,865
(2,430)
78
Notes to the Company Financial Statements
For the year ended 31 December 2023
7. Trade and other receivables
Current:
Other receivables (net)
Value Added Tax
Amounts due from Group undertakings
Prepayments
Deposits
Jersey Oil and Gas plc
2023
£
233,054
79,862
-
61,483
2,692
377,091
2022
£
-
67,532
31,704,534
67,405
2,692
31,842,163
On 19th May 2023, the Company waived the balance owed by Jersey Petroleum Limited as at 31st March 2023
totalling £97,253,142 by way of a deed of forgiveness.
The balances in previous years were assessed for recoverability under the expected credit loss model and amounts
due from Group undertakings are stated net of losses of £69,800,211. The amounts due from Group undertakings
are unsecured, non-interest bearing, have no fixed date of repayment and are repayable on demand.
8. Cash and cash equivalents
Cash at bank
2023
£
4,520,924
2022
£
6,436,069
Cash deposits are placed with creditworthy financial institutions with a minimum rating of ‘A’.
9. Term deposits
Maturing within ten months
Term deposits are placed with creditworthy financial institutions with a minimum rating of ‘A’. £5m was placed in
December 2023 at a rate of 5%.
5,000,000
2023
£
2022
£
-
10. Called up share capital
Issued:
Number:
32,667,627 (2022: 32,554,293)
Class
Ordinary
Nominal
Value
1p
2023
£
2,574,529
2022
£
2,573,395
Ordinary shares have a par value of 1p. They entitle the holder to participate in dividends, distributions 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.
Included in the above are ordinary shares of 1,667 (2022; nil) which were committed to be issued at the year end but
not allotted until January 2024.
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Notes to the Company Financial Statements
For the year ended 31 December 2023
11. Trade and other payables
Current:
Amounts due to Group undertakings
Trade payables
Other payables
Accrued expenses
Jersey Oil and Gas plc
2023
£
5,192,160
96,135
130,914
131,340
5,550,549
2022
£
211,678
79,002
61,996
119,217
471,893
Amounts shown as Current: Amounts owed to Group undertakings are unsecured, interest bearing, have no fixed date of
repayment and are repayable on demand.
12. Post balance sheet events
For all Group related post balance sheet events please see note 23 of the consolidated financial statements.
80
Jersey Oil and Gas plc
Ground Floor
5 St Andrew’s Place
St Helier, Jersey Channel Islands
JE2 3RP
+44(0)1534 858 622