PRODUCTION,
DRILLING,
DEVELOPMENT
AND INVESTMENT
IN THE UNITED
KINGDOM ONSHORE
HYDROCARBON
SECTOR
UNION JACK OIL plc
ANNUAL REPORT AND
FINANCIAL STATEMENTS
2015
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
DIRECTORS, OFFICERS AND ADVISERS
DIRECTORS
David Bramhill
Executive Chairman
Joseph O’Farrell
Executive
Graham Bull
Non-Executive
Raymond Godson
Non-Executive
COMPANY OFFICE
6 Charlotte Street,
Bath BA1 2NE,
England
Telephone: +44 (0) 1225 428139
+44 (0) 1225 428140
Fax:
Email: info@unionjackoil.com
Web: www.unionjackoil.com
REGISTERED NUMBER
07497220
SECRETARY AND
REGISTERED OFFICE
Brian Marshall
6 Charlotte Street,
Bath BA1 2NE,
England
NOMINATED ADVISER
Shore Capital and Corporate Limited
Bond Street House,
14 Clifford Street,
London W1S 4JU,
England
REGISTRARS
JOINT BROKERS
Computershare Investor Services PLC
The Pavilions,
Bridgwater Road,
Bristol BS13 8AE,
England
Shore Capital Stockbrokers Limited
Bond Street House,
14 Clifford Street,
London W1S 4JU,
England
AUDITOR
Deloitte LLP
3 Rivergate,
Temple Quay,
Bristol BS1 6GD,
England
SOLICITORS
Osborne Clarke
2 Temple Back East,
Temple Quay,
Bristol BS1 6EG,
England
BANKERS
Royal Bank of Scotland plc
8-9 Quiet Street,
Bath BA1 2JN,
England
SP Angel Corporate Finance LLP
Prince Frederick House,
35-39 Maddox Street,
London W1S 2PP,
England
OIL AND GAS ADVISERS
SP Angel Corporate Finance LLP
Prince Frederick House,
35-39 Maddox Street,
London W1S 2PP,
England
PUBLIC RELATIONS
CONSULTANTS
Yellow Jersey PR Limited
South Building,
Upper Farm,
Wootton St. Lawrence,
Basingstoke RG23 8PE,
England
1
CONTENTS
BUSINESS AND STRATEGY
2
6
8
Chairman’s Statement
Strategic Report
Review of Operations
GOVERNANCE
Directors’ Report
Corporate Governance Report
Directors’ Responsibilities
Statement
Independent Auditor’s Report
on the Financial Statements
FINANCIAL STATEMENTS
Income Statement
Statement of
Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Principal Accounting Policies
Notes to the Financial Statements
16
18
19
20
21
22
23
24
25
26
30
ANNUAL GENERAL MEETING
43
Notice of Annual General Meeting
Union Jack Oil plc is an onshore
oil and gas exploration and
production company with a
focus on drilling, development,
investment and production
in the United Kingdom
hydrocarbon sector. The issued
share capital is traded on the
AIM Market of the London
Stock Exchange (Ticker: UJO).
Our strategy is the appraisal
and exploitation of the assets
currently owned. Simultaneous
with this process, the
Company’s management expects
to continue to use its expertise
to acquire further licence
interests over areas where
there is a short lead time
between the acquisition of the
interest and either exploration
drilling or initial production
from any oil or gas fields that
may be discovered.
SUMMARY OF LICENCE
INTERESTS HELD BY
UNION JACK OIL PLC
PEDL180
WRESSLE
8.33%
PEDL005(R)
KEDDINGTON OILFIELD
LOUTH
NORTH SOMERCOTES
10%
PEDL253
BISCATHORPE
12%
PEDL241
NORTH KELSEY
20%
PEDL201
BURTON ON
THE WOLDS
10%
PEDL209
LAUGHTON
10%
www.unionjackoil.com
2
CHAIRMAN’S
STATEMENT
I am pleased to present to the shareholders of Union Jack Oil plc
(“Union Jack” or the “Company”), the Annual Report and Financial
Statements for the year ended 31 December 2015.
2015 has been a successful year for Union Jack in which
two significant advances within our asset portfolio took
place. A decision was made to develop the Wressle
discovery with a view to commencing commercial
hydrocarbon production during H2 2016 and the
Company acquired a 10% interest of PEDL005(R)
incorporating the Keddington oilfield. In addition,
first income was generated from test production from
Wressle and other income was received from the sale
of oil at Keddington. Subject to obtaining the necessary
consents and permissions, management also expects
revenues to be generated from successful development
of the Wressle discovery.
Our strategic objective remains focused on building
a successful UK onshore production and exploration
hydrocarbon company. We intend to continue to
develop and expand our existing portfolio of drill-ready
prospects, with a view to generating shareholder value by
the drill bit. The Board is actively reviewing a number of
further projects across the UK with a focus on acquiring
attractive low-cost producing or appraisal assets
that bring production upside or additional late stage
exploration/appraisal prospects that fit our strategy.
PEDL180 - Wressle
The Wressle discovery on PEDL180 located in
Lincolnshire, on the western margin of the Humber
Basin, in which Union Jack holds an 8.33% interest,
is moving closer to development with a view to
commencing commercial oil production during H2
2016. Applications for the various consents such as
planning and environmental and the compilation of
a Field Development Plan (“FDP”) are currently
being finalised for submission. Subject to receipt of
these approvals it is anticipated that production will
commence at rates of approximately 500 barrels of
oil per day (“bopd”) gross from the Ashover Grit
reservoir, with the development of the Penistone Flags
to follow at a later time. In addition, a Competent
Persons Report is being finalised which will highlight
the reserves and resource volumes in place and will
be a key component for use in finalising the FDP.
“”
2015 has been a successful year for Union
Jack and two significant advances in our
asset portfolio took place.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015 3
OPERATIONAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS
• Successful hydrocarbon
discovery at Wressle and
decision to develop with a view
to commencing commercial
production during H2 2016
• The acquisition of a 10% interest
in PEDL005(R) incorporating
the Keddington oilfield
• Cash balance in excess of
£2.6 million as at 30 April 2016
• £800,000 before expenses
raised in October 2015
to further expand the
Company’s asset portfolio
• The Company remains debt free
Following the results of the UK 14th Onshore Oil
and Gas Licensing Round in December 2015, Egdon
Resources plc (“Egdon”), the operator of PEDL005(R),
and its application partners were offered Block TF38c,
now known as PEDL339, located within the Humber
Basin. As part of the acquisition agreement for
PEDL005(R), a 10% interest in any new licence block
awarded to Egdon, containing a portion of the Louth
Prospect, is to be transferred to Union Jack at no upfront
cost. This transfer in respect of TF38c/PEDL339 is
pending, subject to Oil and Gas Authority approval.
The Louth Prospect is planned to be drilled in late 2017,
subject to partner approval, planning and other consents.
Located on the margins of the Humber Basin and
defined using re-processed 3D seismic data, the Louth
Prospect is estimated by the operator to contain Stock
Tank Oil Initially in Place of 5.5 million barrels and gross
mean Prospective Resources of 1.4 million barrels of oil
with an attractive geological chance of success of 37%.
PEDL005(R) - Incorporating the
Keddington Oilfield
In September 2015, Union Jack completed the acquisition
of a 10% interest in the producing Keddington oilfield
located within PEDL005(R) also located in Lincolnshire.
This transaction gave the Company its first combined
exposure to production, development and appraisal
and provides a measure of increased balance to the
portfolio by introducing production to its base. The
acquisition of the interest in PEDL005(R) supports the
Board’s objectives of creating shareholder value and
contributes a modest income toward the Company’s
aim of reaching a position of self-sustainability.
Keddington has to date produced in excess of 300,000
barrels of oil and the Keddington-3Z well is currently
producing approximately 30 barrels a day gross. Union
Jack owns a 10% interest in the production and the
associated infrastructure and production facilities.
In addition, PEDL005(R) incorporates the Louth and
North Somercotes Prospects which could be drilled
in the future. The Keddington-5 development well was
drilled post year end and during the course of drilling,
elevated gas readings, indicative of the presence of
hydrocarbons, were recorded from a gross interval
of 141 metres, containing 62 metres of net sand.
Subsequent testing of Keddington-5 sidetrack has initially
seen production dominated by water and plans are being
considered to isolate the zone of water production.
BUSINESS AND STRATEGYwww.unionjackoil.com 4
CHAIRMAN’S
STATEMENT
“”
The Wressle discovery on
PEDL180 in which Union Jack
holds an 8.33% interest is moving
closer to development with a
view to commencing commercial
oil production during H2 2016.
PEDL201 - Burton on the Wolds
Drilling operations were completed in October 2014
on the Burton on the Wolds-1 well located on PEDL201,
in which the Company has a 10% interest, following
which the well was plugged and abandoned. Drill
cutting samples of shale source rock collected at
the well in 2015 were sent for analysis by experts in
source rock evaluation. This analysis concluded that
the Upper Bowland-Hodder shale interval is a very
good source rock containing dominantly oil prone
Type II organic matter though conditions at this location
were not conducive to hydrocarbon generation.
Regional well correlations show the Bowland Shale
to be buried at much greater depth and is believed
to be thermally mature for hydrocarbon generation
in the north of the licence area. This supports the
earlier work undertaken in 2014 that highlighted the
unconventional potential within the licence area.
The directors are continuing to evaluate the site
with a view to future exploration and production.
Other Assets
Other assets within the Union Jack exploration
portfolio include a 12% interest in PEDL253 containing
the Biscathorpe Prospect and a 20% interest in
PEDL241 containing the North Kelsey Prospect. Post
year end the Company acquired a 10% conventional
interest in PEDL209 which saw the drilling of the
Laughton-1 exploration well in early 2016 which failed
to discover commercial hydrocarbons. There was
no upfront consideration for this licence interest.
A detailed review of Union Jack’s asset base
can be found in the Review of Operations
section within this Annual Report.
CORPORATE AND FINANCIAL
The Company remains debt free and our cash balance as
at 30 April 2016 stands in excess of £2.6 million, enough
to cover the costs of our current planned production
and development projects and to fund our existing
exploration drilling programme over a 12 month period
from the date of approving the financial statements.
In October 2015, the Company raised £800,000
before expenses of £104,000 by means of a placing.
These funds are being used to take advantage of
the current opportunities within the oil and gas
market to further expand Union Jack’s portfolio
through the acquisition of interests in drill-ready
projects onshore UK on attractive terms.
We apply strict financial and technical disciplines to our
activities and we pride ourselves on our low general
and administrative costs. The Board intends to continue
with the same low salary commitment going forward.
A further reduction in the Supplementary Tax rate
from 20% to 10% in the March 2016 budget is
constructive and positively impacts the economics of
onshore hydrocarbon projects. This would reduce the
effective tax rate from 50% to 40% going forward.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015 5
SUMMARY
I am enthusiastic in respect of the year ahead. Union Jack
is in a sound position with an interest in a discovery at
Wressle, which is moving closer to development, with a
view to commencing commercial oil production during
2016, together with a healthy cash balance to progress
projects and fund its existing portfolio of drill-ready
potentially high impact exploration prospects.
In addition, Union Jack has firm intentions of expanding
its interests in other areas of the UK.
I look forward to reporting progress with our projects
and new acquisitions during 2016 and beyond.
David Bramhill
Executive Chairman
16 May 2016
Our strategy of focusing on late stage drill-ready
prospects helps to manage the portfolio from a technical
perspective and shortens the lead time between the
acquisition of an interest in an asset and drilling or initial
production from any resulting discoveries. Union Jack is
primarily involved in conventional hydrocarbon projects
where costs are manageable and development of any
discoveries can be achieved within a relatively short
timeframe and on a cost effective basis by applying
simple development techniques. We believe the full-cycle
costs associated with onshore production, development
and exploration in the UK remain attractive in the
current low oil price environment.
Union Jack has been insulated somewhat from the low
oil price environment which has been observed by the
industry for the past 15 months due to low operating
costs onshore in the UK and no material production to
date. Our focus remains on relatively low cost projects
and means our future growth plans have not been
materially impacted. The search for new assets continues
in tandem with our desire to develop our discovery at
Wressle which, when on production, should transform
cash flows to the Company.
I take this opportunity to thank the rest of my Board,
Joe O’Farrell, Graham Bull and Ray Godson for their
sound advice, technical support and expert guidance
in respect of Company matters. The same comment
applies to our advisors for their help in assisting the
Company, all of whom diligently look after our interests.
“”
In September 2015, Union Jack
completed the acquisition of a
10% interest in the producing
Keddington oilfield located
within PEDL005(R).
BUSINESS AND STRATEGYwww.unionjackoil.com 6
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015
STRATEGY
Our strategy is the appraisal and exploitation of the assets
currently owned. Simultaneous with this process, the
Company’s management expects to continue to use its
expertise and cash resource to acquire further licence
interests in the UK over areas where there is a short lead
time between the acquisition of the interest and either
exploration drilling or initial production from any oil or
gas fields that may be discovered.
BUSINESS REVIEW
Union Jack Oil plc is a UK registered company, focused on
the exploration for, and future development of, hydrocarbon
projects.
A review of the Company’s operations during the year ended
31 December 2015 and subsequently to the date of this
report is contained in the Chairman’s Statement and Review
of Operations.
The loss for the year amounted to £587,301 (2014: £547,256).
The directors do not recommend the payment of a dividend
(2014: nil).
In January 2015, 280,600,000 warrants issued on 22 July 2013,
exercisable at 0.30 pence, expired and were cancelled from
the Company's Warrant Register, leaving 55,052,548 warrants
outstanding at 31 December 2015.
In October 2015, 470,588,235 new ordinary shares were
issued for cash at 0.17 pence per share raising £800,000 before
expenses of £104,000.
The enlarged issued share capital following the issue of new
shares described in this section is 2,888,708,805 ordinary
shares of 0.025 pence each.
FUTURE DEVELOPMENTS
The directors intend to continue their involvement with
the licences as disclosed in the Review of Operations. They
continue to seek further acquisition opportunities for onshore
oil and gas exploration and development.
KEY PERFORMANCE INDICATORS
The Company has made good progress during the year ended
31 December 2015.
The directors were successful in raising funds to ensure the
Company is adequately funded to meet all of its current
commitments in respect of licence terms and drilling
commitments to the end of May 2017.
In July 2015, the Company agreed to acquire a 10% interest in
PEDL005(R), which includes the Keddington oilfield, Louth oil
prospect and the North Somercotes gas prospect.
In October 2015, the Joint Venture partners made the decision
to proceed with a Field Development Plan in respect of the
Wressle discovery with a view to early oil production from
the Ashover Grit formation during H2 2016.
PRINCIPAL RISKS AND UNCERTAINTIES
As with the majority of companies within the energy sector
the business of oil and gas exploration and development
includes varying degrees of risk. These risks broadly include
operating reliance on third parties, the ability to monetise
discoveries and the risk of cost overruns. There are also
specific, political, regulatory, and licensing risks attached
to various projects as well as issues of commerciality,
environmental, economic, competition, reliance on key
personnel, contractor and judicial factors.
Commodity prices will have an impact on potential revenues
and forward investment decisions by the operator on the
projects invested in as the economics may adversely be
affected. However, onshore development costs are lower
than for offshore developments. The Company does not use
hedging facilities. The Company holds adequate Directors’
Insurance cover and the Company is covered by the operator’s
insurance during drilling and other operational situations. The
Board, in its opinion, has mitigated risks as far as reasonably
practicable.
The principal risks to the Company as well as the mitigation
actions are set out below:
Strategic: A weak or poorly executed development
process fails to create shareholder value
This can be effected by poor selection of exploration projects
where hydrocarbons are not located.
This risk is mitigated through performing a detailed technical
review, both internally by management and externally by
advisers before an investment decision is taken, for each
investment which includes a valuation exercise on the potential
return on monies spent. All but one of the Company’s current
project investments are at a stage where drilling and potential
development can be executed within a relatively short lead
time. The amount of interest acquired in each project is
dependent upon the Company’s financial capability to fulfil
its obligation. The Company’s technical management team is
highly skilled with many years industry experience.
No commercially viable hydrocarbons were identified at
Burton on the Wolds-1 drilled in October 2014. However,
source rock analysis completed in 2015 indicates the presence
of unconventional potential in the licence area, of which the
potential revenues from this analysis would exceed costs and
accordingly, the directors continue to actively evaluate the
licence with a view to possible future explorative drilling.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015 7
Operational: Operational events can have an
adverse effect
The main risk is the failure to find economic hydrocarbons.
CASH FLOW RISK
During the year the Company’s activities did not expose it to
financial risks of changes in foreign currency exchange rates.
This risk is mitigated by an ongoing review of each project and
maintaining strong relationships with the project operators.
All external technical project meetings are attended by at least
one member of the Union Jack management team and its
results reported to the Board.
A further potential risk is the reliance upon the operator
Egdon Resources plc and its ability to determine timetables and
priorities which are beyond the control of Union Jack Oil plc.
External Risk: Lack of growth caused by political,
industry or market factors
The Company operates exclusively within the United
Kingdom (“UK”) and the Board considers that the UK
onshore hydrocarbon arena offers excellent value under
a regime with a very clearly spelt out protocol giving
the opportunity to develop assets unhindered.
As mentioned in this review, oil and gas price volatility
can cause concern, however, onshore developments can
continue as planned in most cases as development costs
are lower than for offshore. Lack of control over key assets
is mitigated by the fact that our operator of choice, Egdon,
has a very transparent operating protocol and all partners
are involved, both formally and informally with offering
input to the ongoing development of the projects in which
they are involved. The Company’s in-house technical
team is involved at all times and regular technical meetings
are held in which opportunity is given to comment.
Financial Risk: The lack of ability to meet financial
obligations
The main risk is the lack of funds being available to pay for
our future drilling commitments.
All drilling expenditure associated with exploration assets
are forecast and budgeted at least 12 months in advance.
The Company raises its funds through the financial
market by share issues and does not become involved in
derivatives and borrowing to fund its financial obligations.
Further comment in respect of Financial Risk Management
Objectives and Policies, Cash Flow Risk, Credit Risk, and
Liquidity Risk are also covered within this Strategic Report.
FINANCIAL RISK MANAGEMENT OBJECTIVES
AND POLICIES
The Company’s activities expose it to a number of financial
risks including cash flow risk, credit risk and liquidity risk.
The use of financial derivatives is governed by the Company’s
policies approved by the Board of Directors, which provide
written principles on the use of financial derivatives to manage
these risks. The Company does not use derivative financial
instruments for speculative purposes.
CREDIT RISK
The Company’s principal financial assets are bank balances
and cash. The credit risk on liquid funds is limited because
the counterparty is a bank with high credit-rating.
LIQUIDITY RISK
In order to maintain liquidity to ensure that sufficient
funds are available for ongoing operations and future
developments, the Company uses its existing cash funds.
GOING CONCERN
The Company’s business activities, together with the factors
likely to affect its future development, performance and
position are set out in the Chairman’s Statement, Review of
Operations and the Strategic Report. The directors’ forecasts
demonstrate that the Company will meet its day-to-day
working capital and share of estimated drilling costs over the
forecast period from the cash held on deposit at the year
end. The principal risk to the Company’s working capital
position is drilling cost overruns. The Company has sufficient
funding to meet planned drilling expenditures and a level of
contingency. Taking account of these risks, sensitised forecasts
show that the Company should be able to operate within the
level of funds currently held. The directors have a reasonable
expectation that the Company has adequate resources
to continue in operational existence for the foreseeable
future. Thus they continue to adopt the going concern
basis of accounting in preparing the financial statements.
APPROVAL OF THE BOARD
This Strategic Report contains certain forward- looking
statements that are subject to the usual risk factors and
uncertainties associated with the oil and gas exploration
and production business. While the directors believe the
expectation reflected within the Annual Report to be
reasonable in light of the information available up to the
time of their approval of this report, the actual outcome
may be materially different owing to factors either beyond
the Company’s control or otherwise within the Company’s
control, for example owing to a change of plan or strategy.
Accordingly, no reliance may be placed on the forward -
looking statements.
On behalf of the Board
David Bramhill
Executive Chairman
16 May 2016
BUSINESS AND STRATEGYwww.unionjackoil.com 8
Review of Operations
PEDL146
YORK
NORTH SEA
LEEDS
NORTH YORKSHIRE
PEDL183
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
BARNSLEY
PEDL011
PEDL011
PEDL179
PL162
PEDL 178
NORTH LINCOLNSHIRE
CROSBY WARREN
PEDL182
BROUGHTON
PEDL181
PEDL173
PEDL180
NORTH EAST LINCOLNSHIRE
EXL288
1
6
1
L
D
E
P
8
8
2
L
X
E
PEDL 174
TRUMFLEET
PL161
HATFIELD
DONCASTER
9
6
1
L
D
E
P
HATFIELD
PL162
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
ROTHERHAM
SHEFFIELD
PEDL012
PEDL200
PEDL001
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
PEDL007
TORKSEY
SCAMPTON NORTH
LINCOLNSHIRE
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
PEDL001
PEDL001
DERBYSHIRE
C.E.
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
FARLEYS WOOD
PEDL001
ML003
PEDL130
PEDL090
EGMANTON
WHISBY
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
NOTTINGHAMSHIRE
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
IRONVILLE
PEDL202
NOTTINGHAMSHIRE
GEDLING VENT
PEDL255
CITY OF NOTTINGHAM
CROPWELL BUTLER
PEDL208
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
PEDL180
Wressle
Discovery
10km
Gas Field
Oil Field/Discovery
Prospect
Union Jack holds an 8.33% interest in
PEDL180 located in Lincolnshire, on
the western margin of the Humber
Basin which contains the Wressle-1
oil discovery, and is on trend with the
producing Crosby Warren oilfield
and the Brigg-1 oil discovery, situated
to the immediate northwest and
southeast of the licence respectively.
In respect of the Wressle-1
discovery, the Joint Venture group
completed a detailed review of the
data gathered and concluded that
a Field Development Plan should
be compiled with a view to early
oil production from Wressle-1.
The drilling and test data from the
well, together with the reprocessed
3D seismic data are currently
being applied to quantify the
developable resource volumes
attributable to Wressle.
Applications for the various consents
are currently being finalised by the
operator for submission. Subject to
these approvals it is anticipated that
production will commence during
H2 2016 at rates of approximately
500 barrels of oil a day gross from
the Ashover Grit formation, with the
development of the Penistone Flags
formation following at a later time.
The Wressle-1 well was spudded in
July 2014. The Wressle-1 Prospect
was defined on proprietary 3D seismic
data acquired in 2012, and the well
was drilled as a deviated well to a total
depth (TD) of 2,240 metres and was
designed to intersect a number of
prospective Upper Carboniferous age
sandstone reservoirs in a structurally
favourable position near the crest
of the Wressle structure. Pre-drill
gross mean Prospective Resources
at Wressle were estimated by the
operator to be 2.1 million barrels
of oil.
PEDL180
WRESSLE
UNITED KINGDOM
INTEREST HELD BY
UNION JACK OIL PLC
8.33%
A decision was made
during the period
to proceed with the
development of the
Wressle discovery,
anticipating production
from the Ashover
Grit formation at
a planned rate of
approximately 500
barrels of oil per day
gross in H2 2016.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
9
“”
IN FEBRUARY 2015, SHAREHOLDERS
WERE UPDATED ON THE INITIAL
SUCCESSFUL ASHOVER GRIT FLOW
TEST WHICH RECORDED 80 BOPD
AND 47,000 CUBIC FEET
OF GAS PER DAY DURING A
16 HOUR MAIN FLOW PERIOD.
“”
FOCUS IS NOW
CONCENTRATED
ON DELIVERING THE
REQUIRED CONSENTS
TO ENABLE COMMERCIAL
PRODUCTION FROM THE
WRESSLE DISCOVERY.
On 23 August 2014, TD was reached
and elevated mud gas readings were
observed over large parts of the
interval from the top of the Penistone
Flags reservoir target (1,831.5 metres
MD - measured depth) to TD.
The well was logged using
measurement whilst drilling (MWD)
logging tools run on the drill string.
Petrophysical evaluation of the
log data indicated the presence of
hydrocarbon pay in three intervals.
• Penistone Flags – up to 19.8 metres
measured thickness (15.9 metres
vertical thickness)
• Wingfield Flags – up to 5.64 metres
measured thickness (5.1 metres
vertical thickness)
• Ashover Grit – up to 6.1 metres
measured thickness (5.8 metres
vertical thickness)
In February 2015, shareholders were
updated on the initial successful
Ashover Grit flow test which recorded
80 bopd and 47,000 cubic feet of
gas per day during a 16 hour main
flow period.
No appreciable volumes of water were
observed. The oil is of good quality
with a gravity of 39-40º API.
Following the Ashover Grit test,
shareholders were updated on the
initial successful Wingfield Flags flow
test which recorded up to 182 bopd
of good quality oil with a gravity of
39-40º API along with up to 456,000
cubic feet of gas per day.
The next horizon to be flow tested
was the Penistone Flags, the last of
three hydrocarbon bearing zones
identified in the well. The Penistone
Flags test produced gas at restricted
flow rates of up to 1.7 million cubic
feet of gas per day with associated oil
of up to 12 bopd and no free water
from a 9 metre perforated zone at the
top of the formation. Gas flow rates
were constrained by the equipment
and flaring limits imposed by the
environmental permit. The gas and oil
are of good quality with the oil having
a gravity of 35º API.
The downhole pressure data recorded
during the testing will now be analysed
to estimate the gas flow rates that
could be achieved under production,
unconstrained by the flare and permit
restrictions.
BUSINESS AND STRATEGYwww.unionjackoil.com 10
REVIEW OF OPERATIONS
“”
AVERAGE RATES OVER
A TWO DAY PERIOD
ON THE 8/64” CHOKE
WERE 105 BOPD WITH
465,000 CUBIC FEET OF
GAS PER DAY, TOGETHER
TOTALLING 182 BOEPD.
A further test was carried out to
evaluate the gas-oil and oil-water
contacts in the Penistone Flags by
perforating the formation deeper in
the section. Zone 3a was perforated
over a 7.5 metre interval and produced
good quality oil with a gravity of 33º
API. A total of 98.5 barrels of oil were
recovered during the test, of which
flow induced by swabbing operations
produced 34.3 barrels of oil. This
equates to approximately 77 bopd.
The Penistone Flags Zone 3a interval
was pumped for a period of time and
achieved average rates over a three day
period of 131 bopd and 222,000 cubic
feet of gas per day, together totalling
168 barrels of oil equivalent per day
("boepd")with an average producing
gas oil ratio of approximately 1,700
cubic feet of gas per barrel of oil.
Due to increasing gas rates, the
pump was then stopped and the
well allowed to naturally flow to
surface with a series of decreasing
choke sizes from 12/64” down to
8/64” (being the smallest available).
Average rates over a two day period
on the 8/64” choke were 105 bopd
with 465,000 cubic feet of gas per
day, together totalling 182 boepd.
Following the Extended Well Test on
Zone 3a, it was noted that both oil and
gas had flowed without evidence of any
water. Encouragingly, the well test data
together with the log data indicate that
the elevation of the oil water contact
is deeper than originally considered for
the Penistone Flags reservoir.
Focus is now concentrated on
delivering the required consents
such as planning and environmental
permissions to enable commercial
production from the Wressle discovery.
THE INTERESTS IN PEDL180 ARE HELD BY:
Egdon Resources UK Limited (operator)
Celtique Energie Petroleum Limited
Europa Oil & Gas Limited
Union Jack Oil plc
25.00%
33.33%
33.34%
8.33%
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015 PEDL005(R)
KEDDINGTON
UNITED KINGDOM
INTEREST HELD BY
UNION JACK OIL PLC
10.00%
Producing oilfield with
increased production
potential from two
additional prospects.
In July 2015, Union Jack agreed
to acquire a 10% interest from
Egdon in PEDL005(R) located in
Lincolnshire and incorporating
the Keddington oilfield, the
Louth oil prospect and the
North Somercotes gas prospect.
Under the terms of the
acquisition agreement Union Jack
agreed to pay 20% of the costs
of the Keddington-5 sidetrack
development well drilled in
January 2016 and the proposed
Louth exploration well planned
for late 2017. The Company
has not paid any upfront cash
to earn the 10% economic
interest in PEDL005(R). Under
the terms of the agreement
Union Jack would also earn a
10% interest from Egdon in any
new licence awarded to the
existing Joint Venture group
in the UK 14th Landward Oil
and Gas Licensing Round which
contains the mapped extension
to the Louth Prospect.
11
In December 2015 Egdon and its
application partners were offered
Block TF38c, now known as PEDL339,
located within the Humber Basin and
containing the western section of
the Louth Prospect. Consequently,
subject to approvals and final award
by the Oil and Gas Authority,
Egdon will transfer a 10% interest in
PEDL339 to Union Jack at no cost.
KEDDINGTON OILFIELD
Union Jack owns a 10% interest
in Keddington and the associated
infrastructure and production facilities.
Union Jack receives 10% of all
production revenues. The partners
in Keddington are seeking to maximise
the value of the “Greater Keddington”
area through two additional prospects
located within PEDL005(R), namely the
Louth oil and the North Somercotes
gas prospects. As part of the
acquisition, Union Jack also holds a
10% interest in both of these prospects.
Keddington has produced in excess
of 300,000 barrels of oil to date and
is currently producing approximately
30 barrels of oil per day from the
Keddington-3Z well. Testing of the
recently drilled Keddington-5 sidetrack
well has initially seen production
dominated by formation water and
plans are being considered to isolate the
zone of water production in the well.
LOUTH PROSPECT
The Louth oil prospect is located
mostly within PEDL005(R) and
extends into the Block TF38c/
PEDL339. Located on the margins
of the Humber Basin, the prospect is
defined on reprocessed 3D seismic
data and is estimated by the operator
to contain Stock Tank Oil Initially
in Place (“STOIIP”) of 5.5 million
barrels and gross mean Prospective
Resources of 1.4 million barrels
with an attractive chance of success
(“COS”) of 37%. A well to test this
prospect could be drilled in late 2017
subject to partner approval and receipt
of planning and other consents.
NORTH SOMERCOTES
Located on the margins of the Humber
Basin, the North Somercotes gas
prospect is within PEDL005(R) to
the north of the Saltfleetby gasfield
and is estimated by the operator
to contain gross mean Prospective
Resources of 11.0 billion cubic feet
of gas and to have a COS of 25%.
THE INTERESTS IN PEDL005(R) ARE HELD BY:
KEDDINGTON
OILFIELD
PEDL005(R)
EXCLUDING KEDDINGTON
Egdon Resources UK Limited (operator)
45.00%
Nautical Petroleum Limited
PEDL146
YORK
Terrain Energy Limited
10.00%
35.00%
NORTH SEA
LEEDS
Union Jack Oil plc
NORTH YORKSHIRE
PEDL183
10.00%
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
BARNSLEY
PEDL011
PEDL011
PEDL179
PL162
PEDL 178
NORTH LINCOLNSHIRE
CROSBY WARREN
PEDL182
BROUGHTON
PEDL173
PEDL180
EXL288
1
6
1
L
D
E
P
8
8
2
L
X
E
PEDL 174
TRUMFLEET
PL161
HATFIELD
DONCASTER
9
6
1
L
D
E
P
HATFIELD
PL162
PEDL181
NORTH EAST LINCOLNSHIRE
PEDL005(R)
Louth Prospect
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
ROTHERHAM
SHEFFIELD
PEDL012
PEDL200
PEDL001
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
PEDL007
TORKSEY
SCAMPTON NORTH
LINCOLNSHIRE
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
65.00%
10.00%
15.00%
10.00%
PEDL005(R)
North
Somercotes
Prospect
PEDL001
PEDL001
DERBYSHIRE
C.E.
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
FARLEYS WOOD
PEDL001
ML003
PEDL130
PEDL090
EGMANTON
WHISBY
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
NOTTINGHAMSHIRE
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
10km
IRONVILLE
PEDL202
NOTTINGHAMSHIRE
Gas Field
Oil Field/Discovery
Prospect
GEDLING VENT
PEDL255
CITY OF NOTTINGHAM
CROPWELL BUTLER
PEDL208
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
PEDL005(R)
Keddington
Oilfield
BUSINESS AND STRATEGYwww.unionjackoil.com
12
REVIEW OF OPERATIONS
PEDL253
BISCATHORPE
UNITED KINGDOM
INTEREST HELD BY
UNION JACK OIL PLC
12.00%
Drill-ready prospect
expected to be
drilled during
H2 2016 / H1 2017
adding considerable
risk adjusted value.
In March 2013, Union Jack
entered into an agreement
with Egdon, the licence
operator, and Montrose
Industries Limited to acquire
a 10% interest in PEDL253
containing the Biscathorpe
Prospect. During June 2015,
Union Jack subsequently
acquired an additional 2%
interest pro-rata from Egdon
and Montrose bringing the
Company’s interest to 12%.
PEDL253 is located in Lincolnshire,
within the proven hydrocarbon
fairway of the Humber Basin,
on trend with the Saltfleetby gas
field and the Keddington oilfield
which produces oil from the
Upper Carboniferous Westphalian
aged reservoir sandstones.
The Biscathorpe Prospect is a well-
defined four way dip closed structure
mapped from recently reprocessed
3D seismic and adds considerable
risk adjusted value that also offers
lower geological risk than a pure
exploration well given that a prior
well, Biscathorpe-1, encountering oil
bearing sands, has already been drilled.
The Biscathorpe structure was
initially drilled and tested by BP in
1987 with the Biscathorpe-1 well
which encountered a 1.2 metre
thick, oil-bearing sandstone of
lower Westphalian age within
a 24 metre gross sequence.
Biscathorpe-2 will be located in
a direction towards a potentially
thicker sand development within
the structural closure of the trap.
The sand unit is predicted to thicken
away from the crest of the structure
and the operator's Best Estimate is
a gross Prospective Resource of 14
million barrels of oil, with a COS of
40%, within the mapped structural
closure. There is also the potential
for stratigraphic trapping to the west
which, if present, could increase the
expected gross Prospective Resources
to 41 million barrels of oil. The same
sand unit is the producing reservoir in
the Keddington oilfield in which Union
Jack has acquired a 10% interest.
A subsurface target location to
evaluate the exploration potential of
the Biscathorpe Prospect and a surface
drilling location have been identified
from which a vertical well to the depth
of 2,100 metres can be drilled.
In March 2015, planning consent
was granted for the drilling and
any subsequent testing of the
Biscathorpe-2 exploration well.
Drilling of the Biscathorpe-2
conventional exploration well is
expected in H2 2016/H1 2017.
THE INTERESTS IN PEDL253 ARE HELD BY:
Egdon Resources UK Limited (operator)
Montrose Industries Limited
PEDL146
Union Jack Oil plc
YORK
52.80%
35.20%
12.00%
NORTH SEA
LEEDS
NORTH YORKSHIRE
PEDL183
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
BARNSLEY
PEDL011
PEDL011
PEDL179
PL162
PEDL 178
NORTH LINCOLNSHIRE
CROSBY WARREN
PEDL182
BROUGHTON
PEDL181
PEDL173
PEDL180
NORTH EAST LINCOLNSHIRE
EXL288
1
6
1
L
D
E
P
8
8
2
L
X
E
PEDL 174
TRUMFLEET
PL161
HATFIELD
DONCASTER
9
6
1
L
D
E
P
HATFIELD
PL162
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
ROTHERHAM
SHEFFIELD
PEDL012
PEDL200
PEDL001
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
PEDL007
TORKSEY
SCAMPTON NORTH
LINCOLNSHIRE
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
PEDL001
PEDL001
DERBYSHIRE
C.E.
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
FARLEYS WOOD
PEDL001
ML003
PEDL130
PEDL090
EGMANTON
WHISBY
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
NOTTINGHAMSHIRE
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
IRONVILLE
PEDL202
NOTTINGHAMSHIRE
GEDLING VENT
PEDL255
CITY OF NOTTINGHAM
CROPWELL BUTLER
PEDL208
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
PEDL253
Biscathorpe
Prospect
10km
Gas Field
Oil Field/Discovery
Prospect
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
13
PEDL241
NORTH KELSEY
UNITED KINGDOM
INTEREST HELD BY
UNION JACK OIL PLC
20.00%
Drill-ready prospect.
Union Jack holds a 20% interest
in PEDL241 containing the
North Kelsey Prospect. The
initial holding was 10% which
was acquired from Egdon, the
operator, during 2013 on a two
for one promote agreement
whereby Union Jack earned its
interest by bearing an increased
share of certain costs.
In June 2015 Celtique Energie
Petroleum Limited relinquished its
interest in PEDL241 and the Company
acquired pro-rata a further 10%
interest for a nominal consideration
and without promote.
PEDL241 is located within the
proven hydrocarbon fairway of
the Humberside platform. The
North Kelsey Prospect is located
approximately 10 kilometres to the
south of the Wressle-1 discovery
in PEDL180.
The prospect is defined on 3D
seismic data and has the potential
for up to four stacked sandstone
reservoirs in the Chatsworth,
Beacon Hill, Raventhorpe and
Santon sandstones. The nearby
Crosby Warren oilfield and the
Brigg oil discovery are productive
from the Upper Carboniferous
Namurian aged reservoirs.
The gross mean combined
Prospective Resources for these
multiple objectives, as calculated
by Egdon, are estimated to be
6.7 million barrels of oil.
The subsurface target location to
evaluate the exploration of the
North Kelsey Prospect has been
defined and a surface drilling location
has been identified from which
a vertical well can be drilled.
In December 2014, the Planning
and Regulation Committee of
Lincolnshire County Council granted
planning consent for the drilling
of, and any subsequent testing
of, the North Kelsey-1 well.
Drilling of the North Kelsey-1
well is subject to farm out and is
targeted to commence during
H2 2016/H1 2017.
THE INTERESTS IN PEDL241 ARE HELD BY:
Egdon Resources UK Limited (operator)
Union Jack Oil plc
PEDL146
YORK
NORTH SEA
80.00%
20.00%
LEEDS
NORTH YORKSHIRE
PEDL183
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
BARNSLEY
PEDL011
PEDL011
PEDL179
PL162
PEDL 178
NORTH LINCOLNSHIRE
CROSBY WARREN
PEDL182
BROUGHTON
PEDL181
PEDL173
PEDL180
NORTH EAST LINCOLNSHIRE
EXL288
1
6
1
L
D
E
P
8
8
2
L
X
E
PEDL 174
TRUMFLEET
PL161
HATFIELD
DONCASTER
9
6
1
L
D
E
P
HATFIELD
PL162
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
ROTHERHAM
SHEFFIELD
PEDL012
PEDL200
PEDL001
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
PEDL007
TORKSEY
SCAMPTON NORTH
LINCOLNSHIRE
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
NETTLEHAM
FISKERTON AIRFIELD
PEDL241
North Kelsey
Prospect
TORKSEY
PEDL001
PEDL001
DERBYSHIRE
C.E.
BOTHAMSALL
NEWTON-ON-TRENT
PEDL001
PEDL001
FARLEYS WOOD
PEDL001
ML003
PEDL130
PEDL090
EGMANTON
WHISBY
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
NOTTINGHAMSHIRE
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
IRONVILLE
PEDL202
NOTTINGHAMSHIRE
GEDLING VENT
PEDL255
CITY OF NOTTINGHAM
CROPWELL BUTLER
PEDL208
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
10km
Gas Field
Oil Field/Discovery
Prospect
BUSINESS AND STRATEGYwww.unionjackoil.com
14
REVIEW OF OPERATIONS
PEDL201
BURTON ON
THE WOLDS
UNITED KINGDOM
INTEREST HELD BY
UNION JACK OIL PLC
10.00%
Significant Bowland-
Hodder Shale potential.
Drilling operations were completed in
October 2014 on the Burton on the
Wolds-1 well located on PEDL201
in Leicestershire which was drilled
on a geological feature known as
the Hathern Shelf, a stable platform
area, evaluating a conventional oil
prospect in the Rempstone sand,
productive at the Rempstone
oilfield to the west of PEDL201.
The well encountered the Rempstone
sand in the primary reservoir which
was water wet and as a result the
well was plugged and abandoned.
However, a thickness of Bowland Shale
was encountered during drilling, which
according to studies undertaken by the
British Geological Survey, has potential
for unconventional resources of shale
oil or gas if buried to greater depths.
Drill cutting samples of the Bowland
Shale source rock collected at
the well were sent for analysis
to Houston based, Weatherford
Laboratories to determine source rock
quality. Weatherford are recognised
experts in source rock evaluation.
Following analysis, Weatherford
concluded that the Upper Bowland-
Hodder Shale interval in the Burton
on the Wolds well from the East
Midlands region of the UK is a very
good source rock containing dominantly
oil prone Type 11 organic matter.
The Bowland Shale at the site of the
Burton on the Wolds-1 well is deemed,
not unsurprisingly, to be thermally
immature owing to its shallow depth.
Source rock maturity is a function of
heat flow, burial depth and time. To the
north of the well location is the Hoton
Fault which forms the southern boundary
of the Widmerpool Trough. Regional
well correlations show the Bowland
Shale to be buried at a much greater
depth and is believed to be thermally
mature for hydrocarbon generation.
The results of the Weatherford
analysis and the BGS studies suggest
an unconventional shale play is present
under the retained part of PEDL201.
In June 2014, industry consultants
Molten Limited completed a report
commissioned by Union Jack reviewing
the shale resource potential within
PEDL201. Molten's review and summary
concluded that the mean deterministic
un-risked in place volumes within that
shale area could be approximately 5.4
billion barrels of oil and in excess of 2.7
trillion standard cubic feet of gas gross.
Elsewhere in the world, the combination
of the technologies has permitted
extensive shale developments such as
the Bakken oil play in the US. Shale oil
recovery factors in the US have ranged
from 1% to nearly 10%. If recovery
factors, even at the low end of those
achieved in the US can be seen in the
UK these volumes would represent
significant economic developments.
Awards of licences adjacent to
PEDL201 to other parties under the
14th Round, offer great encouragement
regarding the unconventional play
within the area under licence.
The directors are considering their
options to generate cash inflows from
this development. As unconventional
potential has been highlighted in the
licence area, of which the potential
revenues would exceed costs, no
impairment is considered appropriate
at this time whilst further evaluation
is planned and budgeted.
THE INTERESTS IN PEDL201 ARE HELD BY:
Egdon Resources UK Limited (operator)
Celtique Energie Petroleum Limited
PEDL146
Terrain Energy Limited
YORK
Corfe Energy Limited
LEEDS
Union Jack Oil plc
NORTH YORKSHIRE
NORTH SEA
PEDL183
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
BARNSLEY
PEDL011
PEDL011
PEDL179
PL162
PEDL 178
NORTH LINCOLNSHIRE
CROSBY WARREN
PEDL182
BROUGHTON
PEDL181
PEDL173
PEDL180
NORTH EAST LINCOLNSHIRE
EXL288
1
6
1
L
D
E
P
8
8
2
L
X
E
PEDL 174
TRUMFLEET
PL161
HATFIELD
DONCASTER
9
6
1
L
D
E
P
HATFIELD
PL162
32.50%
32.50%
12.50%
12.50%
10.00%
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
ROTHERHAM
SHEFFIELD
PEDL012
PEDL200
PEDL001
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
PEDL007
TORKSEY
SCAMPTON NORTH
LINCOLNSHIRE
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
PEDL001
PEDL001
DERBYSHIRE
C.E.
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
FARLEYS WOOD
PEDL001
ML003
PEDL130
PEDL090
EGMANTON
WHISBY
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
NOTTINGHAMSHIRE
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
IRONVILLE
PEDL202
NOTTINGHAMSHIRE
GEDLING VENT
PEDL255
CITY OF NOTTINGHAM
CROPWELL BUTLER
PEDL208
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
PEDL201
Burton on
the Wolds
10km
Gas Field
Oil Field/Discovery
Prospect
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
15
PEDL209
LAUGHTON
UNITED KINGDOM
INTEREST HELD BY
UNION JACK OIL PLC
10.00%
Two additional
conventional prospects
and hydrocarbon
potential to be further
evaluated.
After the financial year end,
in January 2016, Union Jack
acquired from Egdon Resources
plc a 10% interest in PEDL209
in respect of the conventional
prospects only within the
licence area for no upfront
consideration.
PEDL209 is located along the
eastern side of the Gainsborough
Trough, a proven hydrocarbon
province within the East Midlands and
contains the Laughton Prospect.
The Laughton Prospect had multiple
conventional Carboniferous sandstone
targets with the primary objective
being the Silkstone Rock, a sandstone
interval which is productive in the
analogous Corringham oilfield located
five kilometres to the south east.
Two other potential reservoirs,
the Kilburn Sandstone and the
Wingfield Flags were also targeted
by the Laughton-1 well.
In February 2016 the Laughton-1 well
was spudded, targeting a structural
trap at a depth of over 1,500 metres
below ground level defined on
re-processed 2D seismic data.
The Laughton-1 well reached a total
depth of 1,700 metres in line with
the pre-drill prognosis. During drilling,
the well recorded hydrocarbon shows
from a number of potential reservoir
sequences including the Kilburn
Sandstone, Chatsworth Grit, Ashover
Grit and Kinderscout Grit. The
Silkstone Rock primary objective was
poorly developed in the well. Analysis
of the wireline log data indicated that
the hydrocarbon saturations associated
with the shows were not sufficiently
encouraging to warrant testing.
No costs have been capitalised
with regard to this well to date.
The rig was released from contract
and in due course the wellsite will be
fully restored to its original condition.
The drilling of the Laughton-1
well completes the farm-in deal
between Egdon and Union Jack and
also the work commitment for the
licence’s first term which allows it
to proceed into its second term.
Two further conventional
prospects within PEDL209 and the
remaining hydrocarbon potential
are to be further evaluated.
THE INTERESTS IN PEDL209 ARE HELD BY:
Egdon Resources UK Limited (operator)
Blackland Park Exploration Limited
PEDL146
Stelinmatvic Industries Limited
YORK
Union Jack Oil plc
NORTH SEA
LEEDS
NORTH YORKSHIRE
PEDL183
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
BARNSLEY
PEDL011
PEDL011
PEDL179
PL162
PEDL 178
NORTH LINCOLNSHIRE
CROSBY WARREN
PEDL182
BROUGHTON
PEDL181
PEDL173
PEDL180
NORTH EAST LINCOLNSHIRE
EXL288
1
6
1
L
D
E
P
8
8
2
L
X
E
PEDL 174
TRUMFLEET
PL161
HATFIELD
DONCASTER
9
6
1
L
D
E
P
HATFIELD
PL162
50.00%
28.00%
12.00%
10.00%
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
ROTHERHAM
SHEFFIELD
PEDL012
PEDL200
PEDL001
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
PEDL007
TORKSEY
SCAMPTON NORTH
LINCOLNSHIRE
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
PEDL001
PEDL001
DERBYSHIRE
C.E.
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
FARLEYS WOOD
PEDL001
ML003
PEDL130
PEDL090
EGMANTON
WHISBY
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
NOTTINGHAMSHIRE
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
IRONVILLE
PEDL202
NOTTINGHAMSHIRE
GEDLING VENT
PEDL255
CITY OF NOTTINGHAM
CROPWELL BUTLER
PEDL208
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
PEDL209
Laughton
10km
Gas Field
Oil Field/Discovery
Prospect
BUSINESS AND STRATEGYwww.unionjackoil.com
16
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015
The directors present their report together with the
financial statements for the year ended 31 December 2015.
DIRECTORS
The directors in office at the end of the year, and their
interests in the shares of the Company as at 1 January 2015
and 31 December 2015, were as shown in the table below.
ORDINARY SHARES
31 December
2015
1 January
2015
D Bramhill
J O’Farrell
R Godson
52,164,580
52,164,580
G Bull
118,870,063
110,164,180
25,764,706
14,000,000
4,000,000
4,000,000
D Bramhill
J O’Farrell
R Godson
G Bull
Directors who served during the year and subsequently
are as follows:
David Bramhill (executive director);
Joseph O’Farrell (executive director);
Raymond Godson (non-executive director);
Graham Bull (non-executive director).
DIRECTORS’ REMUNERATION
The remuneration of the directors for the year ended
31 December 2015 and the year ended 31 December 2014
was as follows:
SALARIES AND FEES
2014
2015
£
£
80,000
50,000
25,000
25,000
59,167
29,167
10,416
8,333
Directors’ remuneration is disclosed in note 4 of these
financial statements.
Copies of the Service Agreements in respect of D Bramhill
and J O’Farrell are available for inspection at the Company’s
Registered Office. Copies of the Letters of Appointment in
respect of G Bull and R Godson are available for inspection
at the Company’s Registered Office.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held
on 22 June 2016 in accordance with the Notice of Annual
General Meeting on page 43. Details of the resolutions to
be passed are included in this notice.
EVENTS AFTER THE BALANCE SHEET DATE
The following events have taken place after the year end:
In January 2016, a 10% interest in PEDL209 containing the
Laughton Prospect was acquired from Egdon Resources plc.
In January 2016, the Keddington-5 sidetrack well was
drilled. The well has initially seen production dominated by
formation water and plans are being considered to isolate
the zone of water production in the well.
In March 2016 the Laughton-1 conventional well was drilled.
This well was subsequently plugged and abandoned as the
amount of hydrocarbons discovered was deemed to be
uncommercial. No costs have been capitalised with regards
to this well to date.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
1717
CAPITAL STRUCTURE
Details of the issued share capital, together with details
of the movements in the Company’s issued share capital
during the year, are shown in note 12.
DISCLOSURE OF INFORMATION TO THE
AUDITOR
The directors at the date of the approval of this Annual
Report individually confirm that:
SUBSTANTIAL SHAREHOLDINGS
On 31 December 2015, the Company’s shareholders’
register showed the following persons holding voting rights
of 3% or more as a shareholder of the Company.
•
•
Name of holder
Percentage of No. of ordinary Nature of
holding
voting rights
shares
9.07%
JIM Nominees Ltd (Jarvis)
HSDL Nominees Ltd
7.77%
Barclayshare Nominees Ltd 6.95%
6.50%
TD Direct Investing
262,062,573
224,371,704
200,867,266
187,851,602
Beneficial
Beneficial
Beneficial
Beneficial
On 9 May 2016, (the latest practical date before publication
of these accounts) the Company’s shareholders’ register
showed the following persons holding voting rights
of 3% or more as a shareholder of the Company.
Name of holder
Percentage of No. of ordinary Nature of
holding
voting rights
shares
9.77%
JIM Nominees Ltd (Jarvis)
8.82%
HSDL Nominees Ltd
Barclayshare Nominees Ltd 6.23%
6.10%
TD Direct Investing
282,314,100
254,686,439
180,035,122
176,029,610
Beneficial
Beneficial
Beneficial
Beneficial
so far as the director is aware, there is no relevant
audit information of which the Company’s auditor
is unaware; and
the director has taken all the steps that he ought to
have taken as a director in order to make himself aware
of any relevant audit information and to establish that
the Company’s auditor is aware of that information.
This confirmation is given and should be interpreted in
accordance with the provisions of Section 418 of the
Companies Act 2006.
AUDITOR
A resolution to reappoint the Auditor, Deloitte LLP, will
be proposed at the forthcoming Annual General Meeting.
COMPANY NAME AND REGISTERED NUMBER
The registered number of Union Jack Oil plc is 07497220.
On behalf of the Board
David Bramhill
Executive Chairman
16 May 2016
www.unionjackoil.comGOVERNANCE
18
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2015
INTERNAL FINANCIAL CONTROL
The directors are responsible for establishing and
maintaining the Company’s internal financial control
systems. These are designed to meet the particular needs
of the Company and the risks to which it is exposed, and
by their nature can provide reasonable but not absolute
assurance against material misstatement or loss.
The key procedures that the directors have established
to provide effective internal financial controls are:
•
Identification of Business Risks
The Board is responsible for identifying the major
business risks faced by the Company and for
determining the appropriate course of action
to manage these risks.
•
Investment Appraisal
Capital expenditure is regulated by authorisation limits.
For expenditure beyond the specified limits including
investments in exploration projects, detailed proposals
are submitted to the Board for review and sign-off.
• Financial Reporting
The Company has a comprehensive system for
reporting financial results to the Board.
• Audit Committee
The Audit Committee considers and determines
relevant action in respect of any control issues raised
by the external auditor.
The Company’s securities are traded on the AIM Market
of the London Stock Exchange (“AIM”). The Company
has considered the Quoted Company Alliance (“QCA”)
corporate governance guidelines for AIM companies
relevant to the Company.
THE BOARD
During the year the Board of Directors of Union Jack Oil
plc consisted of two executive directors and two non-
executive directors as disclosed within the Directors,
Officers and Advisers section of this report, who were
responsible for the proper management of the Company.
The Board met in person or by telephone, as permitted
by the current Articles of Association, three times during
the year. In addition, the Board held numerous project
appraisal and strategy discussions during the year.
The Board will meet at least four times in the coming
year to review trading performance and budgets,
ensure adequate funding, set and monitor strategy,
examine acquisition opportunities and report to
shareholders. The Board has a formal schedule of
matters specifically reserved to it for decisions.
REMUNERATION COMMITTEE
The Remuneration Committee comprises Graham Bull,
who acts as its Chairman, and Raymond Godson.
The current executive director remuneration package
comprises basic salary only. Directors’ remuneration
for the year is noted in the Directors’ Report and shown
in note 4 on page 30.
Those disclosures form part of this report.
The remuneration of non-executive directors is determined
by the Board.
AUDIT COMMITTEE
The Audit Committee comprises Raymond Godson,
who acts as its Chairman, and Graham Bull. The
Committee is responsible for considering a wide range
of financial matters.
This Committee also provides a forum for reporting
by the Company’s auditor. The executive directors may
attend meetings by invitation.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
DIRECTORS’ RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2015
1919
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the financial
statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors are responsible for the maintenance and
integrity of the corporate and financial information
included on the Company’s website. Legislation in
the United Kingdom governing the preparation and
dissemination of financial statements may differ from
legislation in other jurisdictions.
The directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors are required to prepare the Company financial
statements in accordance with International Financial
Reporting Standards (IFRSs) as adopted by the European
Union. Under company law the directors must not approve
the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the
Company and of the profit or loss of the Company
for that period. In preparing these financial statements,
International Accounting Standard 1 requires that directors:
• properly select and apply accounting policies;
• present information, including accounting policies,
in a manner that provides relevant, reliable, comparable
and understandable information;
• provide additional disclosures when compliance with
the specific requirements in IFRSs are insufficient to
enable users to understand the impact of particular
transactions, other events and conditions on the entity’s
financial position and financial performance; and
• make an assessment of the Company’s ability
to continue as a going concern.
www.unionjackoil.comGOVERNANCE 20
INDEPENDENT AUDITOR’S REPORT
ON THE FINANCIAL STATEMENTS
TO THE SHAREHOLDERS OF UNION JACK OIL PLC
We have audited the financial statements of Union
Jack Oil plc (“the Company”) for the year ended
31 December 2015 which comprise the Income
Statement, Statement of Comprehensive Income,
Balance Sheet, Statement of Changes in Equity,
Statement of Cash Flows, Principal Accounting Policies
and the related notes 1 to 22. The financial reporting
framework that has been applied in their preparation
is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s shareholders,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s shareholders
those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and
the Company’s shareholders as a body, for our audit
work, for this report, or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS
AND AUDITOR
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. Our responsibility is to audit
and express an opinion on the financial statements in
accordance with applicable law and International Standards
on Auditing (UK and Ireland). Those standards require
us to comply with the Auditing Practices Board’s Ethical
Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL
STATEMENTS
An audit involves obtaining evidence about the amounts
and disclosures in the financial statements sufficient to
give reasonable assurance that the financial statements
are free from material misstatement, whether caused by
fraud or error. This includes an assessment of: whether
the accounting policies are appropriate to the Company’s
circumstances and have been consistently applied and
adequately disclosed; the reasonableness of significant
accounting estimates made by the directors, and the overall
presentation of the financial statements. In addition, we
read all the financial and non-financial information in the
annual report to identify material inconsistencies with the
audited financial statements and to identify any information
that is apparently materially incorrect based on, or
materially inconsistent with, the knowledge acquired by us
in the course of performing the audit. If we become aware
of any apparent material misstatements or inconsistencies
we consider the implications for our report.
OPINION ON FINANCIAL STATEMENTS
In our opinion the financial statements:
• give a true and fair view of the state of the Company’s
affairs as at 31 December 2015 and of its loss for the
year then ended;
• have been properly prepared in accordance with IFRSs
as adopted by the European Union; and
• have been prepared in accordance with the
requirements of the Companies Act 2006.
OPINION ON OTHER MATTER PRESCRIBED
BY THE COMPANIES ACT 2006
In our opinion 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.
MATTERS ON WHICH WE ARE REQUIRED
TO REPORT BY EXCEPTION
We have nothing to report in respect of the following
matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept, or
returns adequate for our audit have not been received
from branches not visited by us; or
•
the financial statements and the part of the Directors’
Remuneration Report to be audited 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.
Delyth Jones
Senior Statutory Auditor
for and on behalf of Deloitte LLP
Chartered Accountants and Statutory Auditor
Bristol, United Kingdom
16 May 2016
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015 2121
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2015
Revenue
Administrative expenses
Operating loss
Other income
Finance income
Loss before taxation
Taxation
Loss for the financial year
Attributable to:
Equity shareholders of the Company
Loss per share
Basic and diluted loss per share (pence)
Notes
31.12.15
£
31.12.14
£
–
–
(605,742)
(551,056)
(605,742)
(551,056)
12,713
6,569
–
4,702
(586,460)
(546,354)
(841)
(902)
(587,301)
(547,256)
(587,301)
(547,256)
(0.02)
(0.04)
2
3
5
6
7
The accompanying accounting policies and notes form an integral part of these financial statements.
www.unionjackoil.comFINANCIAL STATEMENTS
22
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2015
Loss for the financial year
Other comprehensive income
31.12.15
£
31.12.14
£
(587,301)
–
(547,256)
–
Total comprehensive loss for the financial year
(587,301)
(547,256)
The accompanying accounting policies and notes form an integral part of these financial statements.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
2323
BALANCE SHEET
AS AT 31 DECEMBER 2015
Assets
Non-current assets
Exploration and evaluation assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Provisions
Total liabilities
Net assets
Capital and reserves attributable to the
Company’s equity shareholders
Called up share capital
Share premium account
Share-based payments reserve
Retained earnings
Total equity
Notes
31.12.15
£
31.12.14
£
8
9
10
11
18
19
12
13
13
1,165,077
40,000
1,205,077
832,100
20,000
852,100
27,232
3,078,311
33,238
3,474,320
3,105,543
3,507,558
4,310,620
4,359,658
85,649
18,000
260,974
–
103,649
260,974
4,206,971
4,098,684
2,593,458
4,042,698
167,924
(2,597,109)
2,475,811
3,282,848
349,833
(2,009,808)
4,206,971
4,098,684
The financial statements of Union Jack Oil plc, registered number 07497220, were approved and authorised for issue
by the Board of Directors on 16 May 2016 and were signed on its behalf by:
David Bramhill
Director
The accompanying accounting policies and notes form an integral part of these financial statements.
www.unionjackoil.comFINANCIAL STATEMENTS
24
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2015
Share
capital
£
Retained
earnings
£
Share
premium
£
Share-based
payment
reserve
£
Total
£
Balance at 1 January 2014
2,079,201
(1,462,552)
–
284,263
900,912
Changes in equity
Issue of share capital
Share issue costs
Total comprehensive income
Share-based payment charge
396,610
–
–
–
–
–
(547,256)
–
3,847,302
(564,454)
–
–
–
–
–
65,570
4,243,912
(564,454)
(547,256)
65,570
Balance at 31 December 2014
2,475,811
(2,009,808)
3,282,848
349,833
4,098,684
Balance at 1 January 2015
2,475,811
(2,009,808)
3,282,848
349,833
4,098,684
Changes in equity
Issue of share capital
Share issue costs
Expiry of share-based payments
Total comprehensive income
117,647
–
–
–
–
–
–
(587,301)
682,353
(104,412)
181,909
–
–
–
(181,909)
–
800,000
(104,412)
–
(587,301)
Balance at 31 December 2015
2,593,458
(2,597,109)
4,042,698
167,924
4,206,971
The accompanying accounting policies and notes form an integral part of these financial statements.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
2525
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2015
Notes
31.12.15
£
31.12.14
(restated)
£
Cash flow from operating activities
14
(543,846)
(574,154)
Cash flow from investing activities
Purchase of intangible assets
Purchase of investments
Interest received
(534,320)
(20,000)
6,569
(568,463)
–
4,702
Net cash used in investing activities
(547,751)
(563,761)
Cash flow from financing activities
Proceeds on issue of new shares
Cost of issuing new shares
800,000
(104,412)
4,243,912
(498,884)
Net cash generated from financing activities
695,588
3,745,028
Net (decrease) / increase in cash and cash equivalents
(396,009)
2,607,113
Cash and cash equivalents at beginning of financial year
3,474,320
867,207
Cash and cash equivalents at end of financial year
11
3,078,311
3,474,320
Amounts in 2014 have been restated to classify £219,343 of accrued evaluation and exploration expenditure previously
classified as a cash flow from operating activities into cash flow from investing activities.
The accompanying accounting policies and notes form an integral part of these financial statements.
www.unionjackoil.comFINANCIAL STATEMENTS
26
PRINCIPAL ACCOUNTING POLICIES
Union Jack Oil plc is a company incorporated in the United
Kingdom under the Companies Act 2006. The address of
the registered office is 6 Charlotte Street, Bath BA1 2NE,
England. The nature of the Company’s operations and
its principal activities are set out in the Directors’ Report,
Strategic Report and Review of Operations. These financial
statements are presented in pounds sterling because that
is the currency of the primary economic environment in
which the Company operates.
BASIS OF PREPARATION
The annual financial statements of Union Jack Oil plc
(“the Company”) have been prepared in accordance
with International Financial Reporting Standards (“IFRS”)
as adopted by the European Union (“EU”) applied in
accordance with the provisions of the Companies Act 2006.
IFRS is subject to amendment and interpretation by
the International Accounting Standards Board (“IASB”)
and the IFRS Interpretations Committee, and there
is an ongoing process of review and endorsement
by the European Commission. These accounting
policies comply with each IFRS that is mandatory for
accounting periods ending on 31 December 2015.
The financial statements have been prepared under
the historical cost convention. The principal accounting
policies set out below have been consistently applied
to all periods presented.
GOING CONCERN
The directors have, at the time of approving the financial
statements, a reasonable expectation that the Company
has adequate resources to continue in operational existence
for the foreseeable future. Thus they continue to adopt the
going concern basis of accounting in preparing the financial
statements. Further detail is contained in the Strategic
Report on page 7.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand
and deposits held at call with banks.
FINANCIAL INSTRUMENTS
Financial assets and financial liabilities are recognised
on the Balance Sheet when the Company becomes
a party to the contractual provisions of the instrument.
Trade and other receivables are initially measured at fair
value, and are subsequently measured at amortised cost
using the effective interest method.
Trade and other payables are initially measured at fair value,
and are subsequently measured at amortised cost using the
effective interest rate method.
EXPLORATION AND EVALUATION COSTS
The Company follows a successful efforts-based accounting
policy for oil and gas assets.
Costs (including research costs) incurred prior to obtaining
the legal rights to explore an area will be expensed
immediately to the Income Statement.
Expenditure incurred on the acquisition of a licence interest
will initially be capitalised on a licence-by-licence basis.
Costs will be held, unimpaired, within exploration and
evaluation costs until such a time as the exploration phase
on the licence area is complete or commercial reserves
have been discovered.
Exploration expenditure incurred in the process of
determining exploration targets will be capitalised initially
within intangible assets as exploration and evaluation
costs. Exploration costs will initially be capitalised whilst
exploration and evaluation activities are continuing, and
until the success or otherwise has been established. The
success or failure of each exploration/evaluation effort will
be judged generally on a licence-by-licence basis. Capitalised
costs will be written off on completion of exploration
and evaluation activities unless the results indicate that
hydrocarbon reserves exist and that these reserves are
commercially viable.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015 2727
PRINCIPAL ACCOUNTING POLICIES
All such costs will be subject to regular technical,
commercial and management review for indicators of
impairment on at least an annual basis which includes
confirming the continued intent to develop or otherwise
extract value from the licence, prospect or discovery.
Where this is no longer the case, the costs will be
immediately expensed.
Following evaluation of successful exploration wells, if
commercial reserves are established and the technical
feasibility of extraction is demonstrated, and once a project
is sanctioned for commercial development, then the related
capitalised exploration/evaluation costs will be transferred
into a single field cost centre within development/producing
assets after testing for impairment within Property, Plant
and Equipment. Where results of exploration drilling
indicate the presence of hydrocarbons which are ultimately
not considered commercially viable, all related costs will
be written off to the Income Statement.
All costs incurred after the technical feasibility and
commercial viability of producing hydrocarbons have
been demonstrated will be capitalised within development/
producing assets on a field-by-field basis. Subsequent
expenditure will be capitalised only where it either enhances
the economic benefits of the development/producing asset
or replaces part of the existing development/producing
asset. Any costs remaining associated with the part replaced
will be expensed.
Net proceeds from any disposal of an exploration
asset will initially be credited against the previously
capitalised costs. Any surplus proceeds will
be credited to the Income Statement.
Plug and suspend and demobilisation costs will be
recognised in full when wells have been suspended or
facilities installed. A corresponding amount equivalent
to the provision will also be recognised as part of the
cost of the asset. The amount recognised will be the
estimated cost of decommissioning, discounted to its
net present value, and will be reassessed each year.
Changes in the estimated timing or cost estimates will
be dealt with prospectively by recording an adjustment
to the provision, and a corresponding adjustment to the
decommissioning asset. The unwinding of the discount
on the decommissioning provision will be included as a
finance cost.
TAXATION
The tax expense represents the sum of current and
deferred tax.
CURRENT TAX
Current tax is based on taxable profit for the year. Taxable
profit differs from net profit as reported in the income
statement because it excludes items of income or expense
that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The
Company’s liability for current tax is calculated using tax
rates that have been enacted or substantively enacted by
the Balance Sheet date.
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, and is accounted for using the Balance Sheet liability
method. Deferred tax liabilities are generally recognised for
all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from the initial
recognition of goodwill or from the initial recognition (other
than in a business combination) of other assets and liabilities
in a transaction that affects neither the taxable profit nor
the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and
associates, and interests in joint ventures, except where the
Company is able to control the reversal of the temporary
difference and it is probable that the temporary difference
will not reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at
each Balance Sheet date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be
available to allow all or part of the asset to be recovered.
www.unionjackoil.comFINANCIAL STATEMENTS 28
PRINCIPAL ACCOUNTING POLICIES
Deferred tax is calculated at the tax rates that are
expected to apply in the period when the liability
is settled or the asset is realised based on tax laws
and rates that have been enacted or substantively
enacted at the Balance Sheet date. Deferred tax is
charged or credited in the Income Statement, except
when it relates to items charged or credited in other
comprehensive income, in which case the deferred tax
is also dealt with in other comprehensive income.
Deferred tax assets and liabilities are offset when
there is a legally enforceable right to set off current
tax assets against current tax liabilities and when they
relate to income taxes levied by the same taxation
authority and the Company intends to settle its
current tax assets and liabilities on a net basis.
of the equity instruments at the grant date, on the basis
that this is immaterially different from the fair value of the
services provided. There are no vesting conditions. Details
regarding the determination of the fair value of equity-
settled share-based transactions are set out in note 12. 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 Company’s estimate
of equity instruments that will eventually vest. At each
Balance Sheet date, the Company revises its estimate
of the number of equity instruments expected to vest
as a result of the effect of non-market-based vesting
conditions. The impact of the revision of the original
estimates, if any, is recognised in the Income Statement such
that the cumulative expense reflects the revised estimate,
with a corresponding adjustment to equity reserves.
EQUITY INSTRUMENTS
INVESTMENTS
An equity instrument is any contract that evidences
a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments
issued by the Company are recognised at the
proceeds received, net of direct issue costs.
SHARE-BASED PAYMENTS – WARRANTS
Equity-settled share-based payments in respect of warrants
for professional services are measured at the fair value
Investments represent available-for-sale investments and
are initially held at fair value and are subsequently measured
at fair value or at cost where fair value is not readily
ascertainable. Gains and losses arising from changes in fair
value are recognised directly in equity until the investment
is disposed of or is determined to be impaired, at which
time the cumulative gain or loss recognised previously
in equity is included in the net profit or loss for the year.
INTERNATIONAL FINANCIAL REPORTING STANDARDS IN ISSUE BUT NOT YET EFFECTIVE
At the date of authorisation of these financial statements, the IFRS Interpretations Committee has issued standards, interpretations
and amendments which are applicable to the Company. Whilst these standards and interpretations are not effective for, and have
not been applied in the preparation of, these financial statements, the following may have an impact going forward:
IFRS 9 Financial Instruments
IFRS 15 Revenue from Contracts with Customers
IFRS 16 Leases
Amendments to IAS 16 and IAS 38: Clarification of Acceptable Methods of Depreciation and Amortisation
Annual Improvements 2012-2014 Cycle
IFRS 7 Financial Instruments: Disclosures
Amendments to IAS 1 Disclosure Initiative
The directors anticipate that the adoption of these standards and interpretations in future periods will have no material
impact on the financial statements of the Company.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015 2929
PRINCIPAL ACCOUNTING POLICIES
CRITICAL ACCOUNTING JUDGEMENTS AND
KEY SOURCES OF ESTIMATION UNCERTAINTY
In the application of the Company’s accounting policies,
which are described in this note, the directors are required
to make judgements, estimates and assumptions about the
carrying amounts of assets and liabilities that are not readily
apparent from other sources. The estimates and associated
assumptions are based on historical experience and other
factors that are considered to be relevant. Actual results
may differ from these estimates.
Warrants
In determining the fair value of warrants and the related
charges to the Income Statement, the Company makes
assumptions about future events and market conditions.
The fair value is determined using a valuation model which
is dependent on estimates, including the future volatility
of the Company’s share price and the expected life of the
warrants. This is determined by using historic data from
similar companies and historic trends on exercising warrants
by warrant holders.
The estimates and underlying assumptions are reviewed
on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised
if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both
current and future periods.
The following are the critical judgements and estimates
that the directors have made in the process of applying
the Company’s accounting policies and that have the
most significant effect on the amounts recognised in
the financial statements:
Impairment
Management is required to assess the exploration
and evaluation assets for indicators of impairment.
Note 8 discloses the carrying value of the exploration
and evaluation assets.
Impairment is considered on a licence-by-licence basis.
In assessing the need to impair exploration and evaluation
assets the Board makes assumptions about the future
progress and likely successful outcome of exploration and
drilling activities. Due diligence is performed at the outset
of the investment before an investment is made. At an
early stage of exploration of each investment the need for
impairment is determined through monitoring market and
industry conditions, competent person reports on each
prospect and information from each licence’s main operator.
In the case of those licences where drilling has commenced
and management is committed to further exploration
and evaluation with sufficient financial resources
available to do so, impairment is not recognised unless
technical analysis confirms that commercially viable
hydrocarbons are insufficient to recover costs incurred.
In respect of PEDL201, the Burton on the Wolds-1 well
was drilled and no conventional commercial hydrocarbons
were discovered.
However, unconventional potential has been highlighted
within the licence area, of which the potential revenues
would exceed costs.
The directors are considering their options to generate cash
inflows from this development and accordingly the directors
continue to actively evaluate the licence with a view to
possible future explorative drilling. As unconventional
potential has been highlighted in the licence area, of which
the potential revenues would exceed costs, no impairment
is considered appropriate at this time.
www.unionjackoil.comFINANCIAL STATEMENTS 30
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
1
BUSINESS AND OPERATING SEGMENTS
The Company is considered to have one operating segment, being the exploration for, and future development of,
hydrocarbon projects in the United Kingdom.
2
OPERATING LOSS
Operating loss is stated after charging:
Staff costs (see note 4)
Fees payable to the Company’s auditor for:
– The audit of these financial statements
– Tax compliance services
3
OTHER INCOME
31.12.15
£
31.12.14
£
198,362
116,250
23,000
6,000
20,000
5,800
During the year a sum of £12,713 (2014: £nil) was received in respect of the Company's share of test production from
the Wressle-1 well and the Keddington oilfield, currently under development.
4
STAFF COSTS
The aggregate payroll cost in the year of the employees, all of whom are directors, was as follows:
Salaries
Social security costs
31.12.15
£
31.12.14
£
180,000
18,362
107,083
9,167
198,362
116,250
The average number of persons employed by the company during the year was 4 (2014: 4).
Details of each director’s remuneration are included in the Directors’ Report.
Highest paid director
The highest paid director received remuneration of £80,000 (2014: £59,167).
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
5
FINANCE INCOME
Bank interest
6
TAXATION
Current tax
UK corporation tax
Adjustment in respect of prior periods
Total UK corporation tax charge
3131
31.12.15
£
31.12.14
£
6,569
4,702
31.12.15
£
31.12.14
£
–
841
841
–
902
902
The differences between the current tax shown above and the amount calculated by applying the standard rate of UK
corporation tax for oil and gas companies of 50% (2014: 62%) to the loss before tax is as follows:
Loss on ordinary activities before tax
Tax on Company loss on ordinary activities at standard UK
corporation tax rate of 50% (2014: 62%)
Effects of:
Taxable finance income
Losses carried forward
Adjustment in respect of prior periods
Current tax charge for year
£
£
(586,460)
(546,354)
293,230
338,740
3,284
(296,514)
841
841
2,915
(341,655)
902
902
During the year the Company paid £841 corporation tax on its finance income for the previous year of £4,702.
A deferred tax asset of £967,243 (2014: £670,729) relating to the carry forward of losses from trading and pre-trading
expenditure has not been recognised in the year as at present it is not envisaged that any tax will become payable in the
foreseeable future against which those losses could be utilised as deductions.
On 16 March 2016, the Government announced a reduction in the supplementary charge to 10%. This would reduce
the effective tax rate to 40%. The reduction in the supplementary charge is expected to be substantively enacted in the
Finance Bill 2016.
www.unionjackoil.comFINANCIAL STATEMENTS
32
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
7
LOSS PER SHARE
The Company has issued warrants over ordinary shares which could potentially dilute basic earnings per share in the future.
Further details are given in note 12.
Basic loss per share is calculated by dividing the loss attributable to ordinary shareholders by the weighted average number
of ordinary shares outstanding during the year.
During the current and prior year the Company had warrants in issue as detailed in note 12. At 31 December 2015 the
company has 55,052,548 warrants in issue. These warrants have not been taken into account when calculating the diluted
loss per share as their impact was anti-dilutive. Therefore the basic and diluted loss per share are the same.
Loss per share
2015
Pence
2014
Pence
Loss per share from continuing operations
(0.02)
(0.04)
The loss and weighted average number of ordinary shares used in the calculation of loss per share are as follows:
2015
£
2014
£
Loss used in the calculation of total basic and diluted earnings per share
(587,301)
(547,256)
Number of shares
2015
2014
Weighted average number of ordinary shares for the purposes of basic
and diluted loss per share
2,492,898,974
1,558,344,760
As detailed in note 12, the Company has 831,680,400 deferred shares. These have not been included within the calculations
of basic shares above on the basis that IAS 33 defines an ordinary share as an equity instrument that is subordinate to all
other classes of equity instruments. Any residual interest in the assets of the Company would not currently, on liquidation,
go to the deferred shareholders, hence they are not currently considered subordinate. These deferred shares have not
been taken into account when calculating the diluted loss per share as their impact was anti-dilutive.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
8
INTANGIBLE ASSETS
At 1 January
Costs incurred during the year
Provision for site restoration
3333
31.12.15
£
31.12.14
£
832,100
314,977
18,000
44,294
787,806
–
At 31 December
1,165,077
832,100
Intangible assets includes amounts capitalised for Wressle (PEDL180) of £723,703 (2014: £486,057), Burton on the Wolds
(PEDL201) £340,877 (2014: £285,195) and other licences £100,497 (2014: £60,848).
9
INVESTMENTS
The Company is the beneficial owner of 169,959 (2014: 90,908) ordinary shares in Elephant Oil Limited, a company
registered in England and Wales, for which it paid £40,000 (2014: £20,000). Elephant Oil Limited has 22,822,927
(2014: 21,387,341) ordinary shares in issue. Union Jack Oil plc has a 0.74% (2014: 0.425%) interest in that company.
The principal activity of Elephant Oil Limited is the exploration and evaluation of hydrocarbon assets.
10
TRADE AND OTHER RECEIVABLES
VAT
Other receivables
Prepayments
31.12.15
£
31.12.14
£
5,645
4,362
17,225
7,541
–
25,697
27,232
33,238
The directors consider that the carrying values of trade and other receivables are approximate to their fair value.
All of the Company’s receivables have been reviewed for indications of impairment. None of the receivables was found
to be impaired.
www.unionjackoil.comFINANCIAL STATEMENTS
34
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
11
CASH AND CASH EQUIVALENTS
Cash at bank
31.12.15
£
31.12.14
£
3,078,311
3,474,320
Cash and cash equivalents comprise cash and short-term bank deposits with an original maturity of three months or less.
The carrying amount of these assets is equal to their fair value.
12(a)
SHARE CAPITAL
Allotted and issued:
Number
Class
Nominal
value
31.12.15
£
31.12.14
£
2,888,708,805
(31 December 2014: 2,418,120,570)
831,680,400
(31 December 2014: 831,680,400)
Total
Ordinary
0.025p
722,177
604,530
Deferred
0.225p
1,871,281
1,871,281
2,593,458
2,475,811
Ordinary shares hold voting rights and are entitled to any distributions made on winding up. Deferred shares do not hold
voting rights and are not entitled to distributions made on winding up.
Allotments during the year
In October 2015, 470,588,235 new ordinary shares with a par value of 0.025 pence were issued at 0.17 pence per share
and are fully paid.
Total consideration received was £800,000, of which £682,353 has arisen in share premium. All amounts were fully paid.
Issue costs of £104,412 have been recognised in the share premium account.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
3535
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
12(b) SHARE-BASED PAYMENTS – WARRANTS
Details of the number of warrants and the weighted average exercise price (WAEP) outstanding during the year
are as follows:
Year ended December 2015
Number of warrants
Outstanding at the beginning of the year
Expired in the year
335,652,548
(280,600,000)
WAEP
£
0.003
0.003
Outstanding and exercisable at the end of the year
55,052,548
0.003
Year ended December 2014
Number of warrants
Outstanding at the beginning of the year
Issued in the year
Exercised in the year
348,919,216
57,333,332
(70,600,000)
WAEP
£
0.003
0.003
0.003
Outstanding and exercisable at the end of the year
335,652,548
0.003
The fair values of warrants in issue are calculated using the Black-Scholes model. The inputs into the model are as follows:
Date of grant
04.12.12
20.12.12
17.03.14
26.09.14
Number in issue
Share price at date of grant
Exercise price
Expected volatility
Expected life (years)
Risk-free rate
Expected dividend yield
Fair value at date of grant
Earliest vesting date
Expiry date
6,074,510
0.3p
0.25p
69%
5.0
0.8464%
0%
£11,099
20.12.12
20.12.22
3,644,706
0.3p
0.25p
69%
2.5
0.8464%
0%
£5,194
20.12.12
20.12.17
17,333,333
0.23p
0.225p
77%
2.5
0.26%
0%
£22,000
17.03.14
17.03.19
39,999,999
0.38p
0.225p
77%
2.5
0.26%
0%
£43,570
26.09.14
26.09.19
In respect of the warrants granted on 17 March 2014 totalling 17,333,333, a number of 12,000,000 have been exercised in
2014 leaving 5,333,333 unexercised at 31 December 2015.
The Company recognised income of £181,909 (2014: expenses of £65,570) related to equity-settled share-based payment
transactions during the year. As those costs relate to the raising of equity, they have been debited to retained earnings
rather than expensed.
During the year 280,600,000 warrants expired. On expiry, the fair value of those warrants being £181,909 was transferred
from the share-based payment reserve to share premium, where the expense was initially recognised.
www.unionjackoil.comFINANCIAL STATEMENTS
36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
13
RESERVES
Retained
earnings
£
Share
premium
£
Share-based
payment
reserve
£
At 1 January 2015
Loss for the year
Issue of share capital
Share issue costs (note 12a)
Expiry of share-based payments
(2,009,808)
(587,301)
–
–
–
3,282,848
–
682,353
(104,412)
181,909
349,833
–
–
–
(181,909)
Totals
£
1,622,873
(587,301)
682,353
(104,412)
–
At 31 December 2015
(2,597,109)
4,042,698
167,924
1,613,513
At 1 January 2014
Loss for the year
Issue of share capital
Share issue costs (note 12a)
Credit for the year (note 12b)
(1,462,552)
(547,256)
–
–
–
–
–
3,847,302
(564,454)
–
284,263
–
–
–
65,570
(1,178,289)
(547,256)
3,847,302
(564,454)
65,570
At 31 December 2014
(2,009,808)
3,282,848
349,833
1,622,873
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
3737
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
14
RECONCILIATION OF LOSS TO CASH GENERATED FROM OPERATIONS
Loss before taxation
Finance income
Income taxes paid
Decrease in trade and other receivables
Increase / (decrease) in trade and other payables
31.12.15
£
(586,460)
(6,569)
(841)
31.12.14
(restated)
£
(546,354)
(4,702)
(902)
(593,870)
(551,958)
6,006
44,018
7,435
(29,631)
Cash used in operations
(543,846)
(574,154)
Amounts in 2014 have been restated to classify £219,343 of accrued evaluation and exploration expenditure previously
classified as a cash flow from operating activities into cash flow from investing activities.
www.unionjackoil.comFINANCIAL STATEMENTS
38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
15
FINANCIAL INSTRUMENTS
Classification of financial instruments
The tables below set out the Company’s accounting classification of each class of its financial assets and liabilities.
Financial assets measured at cost
At 31 December 2015
Investments: available-for-sale
At 31 December 2014
Investments: available-for-sale
Financial assets measured at amortised cost
At 31 December 2015
Other receivables
Cash and cash equivalents
Total carrying value
At 31 December 2014
Other receivables
Cash and cash equivalents
Total carrying value
£
40,000
20,000
£
4,362
3,078,311
3,082,673
–
3,474,320
3,474,320
All of the above financial assets’ carrying values approximate to their fair values at 31 December 2015 and
31 December 2014 given their nature and short times to maturity.
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
15
FINANCIAL INSTRUMENTS (CONTINUED)
Financial liabilities measured at amortised cost
At 31 December 2015
Trade payables
Accruals
Other creditors
Total carrying value
At 31 December 2014
Trade payables
Accruals
Other creditors
Total carrying value
All of the above financial liabilities’ carrying values approximate to their fair values at 31 December 2015 and
31 December 2014 given their nature and short times to maturity.
3939
£
57,649
28,000
–
85,649
15,831
25,800
219,343
260,974
www.unionjackoil.comFINANCIAL STATEMENTS
40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
16
FINANCIAL INSTRUMENT RISK EXPOSURE AND MANAGEMENT
The principal financial risks to which the Company is exposed are: capital management, liquidity risk and credit risk.
This note describes the Company’s objectives, policies and processes for managing those risks and the methods used
to measure them.
Financial assets held at fair value represent investments classified as available-for-sale. These have been classified
as Level 3 financial instruments as their fair value has been based on cost in light of no observable market data.
No financial liabilities are held at fair value.
Credit risk
The Company’s credit risk is primarily attributable to its cash balances and such risk is limited because the third party
is an international bank.
The Company’s total credit risk amounts to the total of the sum of the receivables, cash and cash equivalents.
At the year end this amounted to £3,088,318 (2014: £3,481,861).
Liquidity risk
In managing liquidity risk, the main objective of the Company is to ensure that it has the ability to pay all of its liabilities
as they fall due. The Company monitors its levels of working capital to ensure that it can meet its debt repayments as
they fall due.
The table below shows the undiscounted cash flows on the Company’s financial liabilities as at 31 December 2015
and 31 December 2014 on the basis of their earliest possible contractual maturity.
At 31 December 2015
Trade payables
Accruals
At 31 December 2014
Trade payables
Accruals
Other creditors
Within
2 months
£
Within Greater than
6 months
£
2-6 months
£
Total
£
57,649
28,000
57,649
–
–
28,000
85,649
57,649
28,000
15,831
25,800
219,343
15,831
–
219,343
–
25,800
–
260,974
235,174
25,800
–
–
–
–
–
–
–
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
4141
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
16
FINANCIAL INSTRUMENT RISK EXPOSURE AND MANAGEMENT (CONTINUED)
Capital management
The Company’s objectives when managing capital are to safeguard its ability to continue as a going concern, add
shareholder value and to maintain an optimal capital structure to reduce the cost of capital. The Company defines
capital as being share capital plus reserves as disclosed in the Balance Sheet.
The Board of Directors monitors the level of capital as compared to the Company’s commitments, and adjusts the
level of capital as is determined to be necessary, by issuing shares.
The Company is not subject to any externally imposed capital requirements.
17
FINANCIAL COMMITMENTS
The Company had no financial commitments as at 31 December 2015.
18
TRADE AND OTHER PAYABLES
Trade payables
Accruals
Other creditors
19
PROVISIONS
Provisions for future site restoration costs for Wressle (PEDL180)
Outstanding at 31 December 2015
31.12.15
£
31.12.14
£
57,649
28,000
–
15,831
25,800
219,343
85,649
260,974
£
18,000
18,000
No provision has been made in respect of other licences held as there are, at 31 December 2015, no site works
requiring restoration.
www.unionjackoil.comFINANCIAL STATEMENTS
42
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2015
20
RELATED PARTY TRANSACTIONS
Details of key management personnel remuneration are disclosed in the note 4.
Charnia Resources (UK), an entity owned by Graham Bull, non-executive director, was paid £27,840 (2014: £5,356)
in respect of consulting fees. As at 31 December 2015 £3,892 (2014: £nil) of the above was owed.
Jayne Bramhill, spouse of David Bramhill, received the sum of £4,500 (2014: £nil) from the Company in respect
of IT maintenance and administration costs.
On 27 October 2015 Joseph O'Farrell purchased 8,705,883 ordinary placing shares in the Company at a price
of 0.17 pence settled in cash on the same terms as other investors.
On 27 October 2015 Raymond Godson purchased 11,764,706 ordinary placing shares in the Company at a price
of 0.17 pence settled in cash on the same terms as other investors.
21
CONTINGENT LIABILITIES
The directors are not aware of any contingent liabilities at 31 December 2015 nor 31 December 2014.
22
EVENTS AFTER THE BALANCE SHEET DATE
The following events have taken place after the year end:
In January 2016, a 10% interest in PEDL209 containing the Laughton Prospect was acquired from Egdon Resources plc.
In January 2016, the Keddington-5 sidetrack well was drilled. The well has initially seen production dominated by
formation water and plans are being considered to isolate the zone of water production in the well.
In March 2016 the Laughton-1 conventional well was drilled. This well was subsequently plugged and abandoned
as the amount of hydrocarbons discovered was deemed to be uncommercial. No costs have been capitalised with
regards to this well to date.
NOTICE OF ANNUAL GENERAL MEETING
4343
SPECIAL RESOLUTION
6 Directors’ power to issue shares for cash
That, conditional upon the passing of resolution
number 5, the directors be and they are empowered
pursuant to Section 570(1) of the Act to allot equity
securities (as defined in Section 560(1) of the Act)
of the Company wholly for cash pursuant to the
authority of the directors under Section 551 of the
Act conferred by resolution 5 above as if Section
561(1) of the Act did not apply to such allotment
provided that the power conferred by this resolution
shall be limited to the allotment of equity securities up
to an aggregate nominal value equal to £361,088.60
(representing approximately 50% of the issued share
capital of the Company at the date of this notice) and,
unless previously revoked, varied or extended, this
power shall expire on the conclusion of the next Annual
General Meeting of the Company, except that the
Company may before the expiry of this power make
an offer or agreement which would or might require
equity securities to be allotted after such expiry and the
directors may allot equity securities in pursuance of such
an offer or agreement as if this power had not expired.
By order of the Board
Brian Marshall FCA
Company Secretary
Dated: 16 May 2016
Registered Office:
6 Charlotte Street
Bath BA1 2NE
Notice is hereby given that the Annual General Meeting
(the “AGM”) of Union Jack Oil plc (the “Company”) will
be held at the offices of Osborne Clarke, 2 Temple Back
East, Temple Quay, Bristol BS1 6EG on 22nd June 2016 at
11.00 a.m. to consider and, if thought fit, pass the following
resolutions, of which resolutions numbered 1 to 5 will be
proposed as ordinary resolutions and resolution number
6 will be proposed as a special resolution:
ORDINARY RESOLUTIONS
1 Report and accounts
To receive the audited annual accounts of the Company
for the year ended 31 December 2015, together with
the Directors’ Report and the Auditor’s Report on
those annual accounts.
2 Re-election of director retiring by rotation
To re-elect David Bramhill as a director, who retires
by rotation in accordance with the Company’s Articles
of Association.
3 Re-appointment of auditor
To re-appoint Deloitte LLP as auditor of the Company
to hold office from the conclusion of this Annual
General Meeting until the conclusion of the next general
meeting at which accounts are laid before the Company.
4 Auditor’s remuneration
To authorise the directors to determine the
remuneration of the auditor.
5 Directors’ authority to allot shares
That, in substitution for any equivalent authorities and
powers granted to the directors prior to the passing of
this resolution, the directors be and they are generally
and unconditionally authorised pursuant to Section 551
of the Companies Act 2006 (the “Act”) to exercise all
powers of the Company to allot shares in the Company,
and to grant rights to subscribe for or to convert
any security into shares in the Company (“Relevant
Securities”) up to an aggregate nominal amount of
£361,088.60 (representing approximately 50% of the
issued share capital of the Company at the date of
this notice) provided that, unless previously revoked,
varied or extended, this authority shall expire on the
conclusion of the next Annual General Meeting of the
Company, except that the Company may at any time
before such expiry make an offer or agreement which
would or might require Relevant Securities to
be allotted after such expiry and the directors may
allot Relevant Securities in pursuance of such an offer
or agreement as if this authority had not expired.
www.unionjackoil.comANNUAL GENERAL MEETING
44
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2015
8 Copies of the executive directors’ service contracts with the
Company and letters of appointment of the non-executive
directors are available for inspection at the registered office
of the Company during the usual business hours on any weekday
(Saturday, Sunday or public holidays excluded) from the date
of this notice until the conclusion of the AGM.
Notes:
1 Pursuant to Regulation 41 of the Uncertificated Securities
Regulations 2001 (as amended), only those members registered
in the register of members of the Company at 6.00 p.m.
on 20 June 2016 (or if the AGM is adjourned, 48 hours
before the time fixed for the adjourned AGM) shall be
entitled to attend and vote at the AGM in respect of
the number of shares registered in their name at that
time. In each case, changes to the register of members
after such time shall be disregarded in determining the
rights of any person to attend or vote at the AGM.
2 If you wish to attend the AGM in person, you should arrive at
the offices of Osborne Clarke, 2 Temple Back East, Temple
Quay, Bristol BS1 6EG in good time before the AGM, which
will commence at 11.00 a.m. In order to gain admittance to
the AGM, members may be required to prove their identity.
3 A member who is entitled to attend, speak and vote at the AGM
may appoint a proxy to attend, speak and vote instead of him.
A member may appoint more than one proxy provided each
proxy is appointed to exercise rights attached to different shares
(so a member must have more than one share to be able to
appoint more than one proxy). A proxy need not be a member
of the Company but must attend the AGM in order to represent
you. A proxy must vote in accordance with any instructions
given by the member by whom the proxy is appointed.
Appointing a proxy will not prevent a member from attending
in person and voting at the AGM (although voting in person at
the AGM will terminate the proxy appointment). A proxy form
is enclosed. The notes to the proxy form include instructions on
how to appoint the Chairman of the AGM or another person as
a proxy. You can only appoint a proxy using the procedures set
out in these notes and in the notes to the proxy form.
4 To be valid, a proxy form, and the original or duly certified
copy of the power of attorney or other authority (if any) under
which it is signed or authenticated, should reach the Company’s
registrar, Computershare Investor Services PLC of The Pavilions,
Bridgwater Road, Bristol BS99 6ZY, by no later than 11.00 a.m.
on 20 June 2016.
5 The notes to the proxy form include instructions on how to
appoint a proxy by using the CREST proxy appointment service.
6 In the case of joint holders of shares, the vote of the first named
in the register of members who tenders a vote, whether in
person or by proxy, shall be accepted to the exclusion of the
votes of other joint holders.
7 A member that is a company or other organisation not having
a physical presence cannot attend in person but can appoint
someone to represent it. This can be done in one of two ways:
either by the appointment of a proxy (described in Notes 3 to 5
above) or of a corporate representative. Members considering
the appointment of a corporate representative should check
their own legal position, the Company’s Articles of Association
and the relevant provision of the Companies Act 2006.
Union Jack Oil plc
6 Charlotte Street,
Bath BA1 2NE,
England
Telephone: +44 (0) 1225 428139
Fax:
+44 (0) 1225 428140
Email: info@unionjackoil.com
Web: www.unionjackoil.com