Production, Drilling, Development
and Investment in the United Kingdom
Onshore Hydrocarbon Sector
UNION JACK OIL plc
Annual Report and
Financial Statements
2016
PEDL146PEDL183NORTH SEAPEDL179PEDL181PEDL241PEDL180PEDL173PL162PL161PEDL 169PEDL043PEDL161PEDL200PEDL202BOTHAMSALLFARLEYS WOODEAKRINGCAUNTONIRONVILLEKELHAM HILLSCROPWELL BUTLERGEDLING VENTBELVOIRKINOULTONREMPSTONEFISKERTON AIRFIELDWELTONSTAINTONSCAMPTON NORTHTORKSEYTORKSEYSOUTH LEVERTONSCAMPTONBECKERINGCOLD HANWORTHHEMSWELLEVERTONEAST GLENTWORTHHATFIELDHATFIELDTRUMFLEETWEST FIRSBYNETTLEHAMWHISBYEGMANTONCORRINGHAMCROSBY WARRENSALTFLEETBYBECKINGHAMNEWTON-ON-TRENTKIRKLINGTONPEDL012PEDL001PEDL001PEDL001PEDL001PEDL001PEDL001PEDL011PEDL011PEDL011PEDL011PEDL011PEDL037PEDL037PEDL037PEDL037PEDL037PEDL037PEDL037PEDL037PEDL037PEDL001PEDL001PEDL001PEDL001PEDL001PEDL006ML007PEDL090PEDL208PEDL204PEDL255PEDL254PEDL201PL220PL220ML003C.E.PEDL140PEDL209PEDL182ML004ML004ML004PEDL210PEDL210PEDL210PL179PEDL253PEDL005PEDL005PEDL005PEDL006PEDL007PEDL130PEDL043PL162PEDL 178PEDL 174EXL288EXL288PEDL021PL233PL249PEDL070PEDL231PEDL235PL211PEDL126PL240PEDL234PEDL233PL205PEDL244PEDL243PEDL143PL235PEDL137PEDL246PEDL246EXL189PL182DL004PL116ML021ML018EXL189PL241GOODWORTHHERRIARDSTOCKBRIDGEAVINGTONLOMERHORNDEANSINGLETONLIDSEYSTORRINGTONHEATHFIELDASHDOWNCOWDENBALCOMBEBOLNEYBAXTERS COPSEGODLEY BRIDGEHUMBLY GROVEALBURYBROCKHAMPALMERS WOODBLETCHINGLEYLINGFIELDHORSE HILL UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2016
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
BANKERS
Royal Bank of Scotland plc
8-9 Quiet Street,
Bath BA1 2JN,
England
REGISTRARS
Computershare Investor Services PLC
The Pavilions,
Bridgwater Road,
Bristol BS13 8AE,
England
NOMINATED ADVISER
SP Angel Corporate Finance LLP
Prince Frederick House,
35-39 Maddox Street,
London W1S 2PP,
England
AUDITOR
BDO LLP
55 Baker Street,
London W1U 7EU,
England
SOLICITORS
Osborne Clarke
2 Temple Back East,
Temple Quay,
Bristol BS1 6EG,
England
JOINT BROKERS
SP Angel Corporate Finance LLP
Prince Frederick House,
35-39 Maddox Street,
London W1S 2PP,
England
Turner Pope Investments (TPI) Limited
6th Floor,
Becket House,
36 Old Jewry,
London EC2R 8DD,
England
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
PEDL182
WRESSLE DISCOVERY
BROUGHTON NORTH
PEDL005(R)
KEDDINGTON
OILFIELD
LOUTH
NORTH SOMERCOTES
15%
PEDL253
BISCATHORPE
10%
PEDL241
NORTH KELSEY
PEDL339
LOUTH EXTENSION
10%
PEDL201
BURTON ON THE
WOLDS
PEDL143
HOLMWOOD
PROSPECT
7.5%
PEDL209
LAUGHTON
12%
20%
10%
10%
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
18
20
21
22
FINANCIAL STATEMENTS
23
Income Statement
24
Statement of
Comprehensive Income
25
26
27
28
32
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Principal Accounting Policies
Notes to the Financial Statements
ANNUAL GENERAL MEETING
43
Notice of Annual General Meeting
1
www.unionjackoil.comUNION JACK OIL PLC
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 2016.
2016 was a year that your Board regards as one of
solid progress where our Company made significant
headway in the face of the continuing low oil price
and volatile stock markets. Noteworthy were value
adding transactions and operating events that resulted
in an expansion of our portfolio of licence interests,
transforming the status of Union Jack from a pure
exploration company into one with actual oil and
gas reserves.
Looking back on my 2015 Chairman’s Statement,
I re-iterated then that the objective of the Company
remained focused on building a successful UK onshore
conventional hydrocarbon concern with the intention
of expanding and developing our existing high quality
licence interest portfolio. In this respect, in 2016 we
welcomed the addition to our portfolio of a 7.5%
interest in PEDL143 containing the drill-ready Holmwood
Prospect located in Surrey, in the Weald Basin. This
is our first foray in the South East and Holmwood-1
is expected to be drilled in H2 2017. In addition, we
purchased a further 3.34% of PEDL180 and PEDL182
containing the Wressle-1 discovery located in our
traditional area of operation in the East Midlands.
Subsequent to the acquisition of an additional 3.34%
interest in PEDL180 and PEDL182 from Europa
Oil & Gas Limited (“Europa”), in March 2017 Union
Jack acquired a further 3.33% in the blocks from
Celtique Energie Petroleum Limited, bringing Union
Jack’s combined interest to 15%. The latter acquisition
of interest is subject to the approval of the Oil and Gas
Authority (“OGA”) which is expected imminently. The
result of these two acquisitions is multi-fold, the almost
doubling of our oil and gas reserves and contingent
resources identified by ERC Equipoise Ltd (“ERCE”)
within their independent Competent Persons Report
(“CPR”), the expected increase in the production
revenues when on-stream and the additional interest in
the Broughton North Prospect in the Mean Prospective
Resources contained in this 40-49% geological Chance
of Success (“COS”) prospect.
PEDL180 AND PEDL182 – WRESSLE
The PEDL180 and PEDL182 licences are located in
Lincolnshire, on the western margin of the Humber
Basin, within the established East Midlands producing
province and are on trend with the nearby discoveries
at Crosby Warren, Brigg and Broughton.
The licences contain the Wressle-1 discovery that
produced an aggregate of 710 barrels of oil equivalent
per day from the zones tested.
As highlighted above, the Company, now holds a 15%
interest (3.33% subject to OGA approval) in these
licences, as a result of a further acquisition of interest.
During September 2016 ERCE prepared an independent
CPR in respect of the Wressle-1 discovery. A summary
of their findings can be found on the Company’s website
(www.unionjackoil.com).
The oil and gas reserves and contingent resources
identified by ERCE in the PEDL180 and PEDL182
licences, in aggregate, exceeded the operator’s original
pre-drill estimate.
ERCE has estimated that the gross oil initially in
place is 14.8 million stock tank barrels across three
reservoir sands, the Ashover Grit, Wingfield Flags and
Penistone Flags, of which 2.15 million stock tank barrels
gross are potentially recoverable as 2P Reserves.
2
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC OPERATIONAL HIGHLIGHTS
FINANCIAL HIGHLIGHTS
• Competent Persons Report
indicates gross hydrocarbons in
place at Wressle-1 to be 14.8
million barrels of oil equivalent
• Acquisition of a 7.5% interest
in PEDL143 incorporating the
drill-ready Holmwood Prospect
• Acquisition of a further 3.34% in
PEDL180 and PEDL182 containing
the Wressle-1 discovery
• Cash balance in excess of
£2.0 million as at 30 April 2017
• £700,000 before expenses
raised in September 2016
to further expand the
Company’s asset portfolio
• The Company remains debt free
In addition, ERCE has identified further Contingent
Resources of 1.53 million stock tank barrels of oil
gross and 2.0 billion cubic feet of gas (“bcf”) gross
in the Penistone Flags reservoir at Wressle which are
over and above the oil and gas 2P Reserves identified
in the Ashover Grit and Wingfield Flags reservoirs.
The conversion of the Penistone Flags Contingent
Resources into 2P Reserves, in full or in part, is
reliant upon receipt of development approvals and
commencing production at Wressle and on a subsequent
development plan being identified for considerable oil
and gas volumes present in the Penistone Flags reservoir.
Commercial oil production is expected to initiate
at an estimated 500 barrels per day following
Environmental Agency and planning approvals.
The uplift in both 2P Reserves and Contingent Resources
identified by ERCE in its CPR highlight a major attraction
of the proposed conventional onshore development
in respect of the two licence areas that contain the
Wressle-1 discovery and the resulting additional
significant upside potential. Even in this moderately low
oil price environment, the Wressle development has
the benefits of low capital and operating costs and the
same is also expected of the Penistone Flags Contingent
Resources, assuming their conversion to 2P Reserves.
ERCE also made an estimate of the Broughton North
Prospect within PEDL182. Their findings indicated
oil in place of 3.43 million stock tank barrels gross.
The Broughton North Prospect is drill-ready, subject
to obtaining planning permission, and benefits from
the results of the Wressle-1 discovery significantly
reducing the geological risk over PEDL180 and PEDL182.
Consequently, ERCE attributes a high geological COS
with a range of 40% to 49% for the prospect. Mapping
of the Broughton North Prospect also benefits from
the same high quality 3D seismic data as was used
to identify the Wressle-1 hydrocarbon discovery.
Surprisingly, in January 2017 the North Lincolnshire
Council, despite a positive recommendation by
the Council’s Planning Officer, which itself was
determined following a comprehensive and thorough
review of the Field Development Plan, declined
planning approval for development. However, at the
same meeting the application for the installation of
groundwater monitoring boreholes was approved.
Subsequently, Union Jack recently announced that
an appeal process has commenced and that a new
planning application has been submitted in parallel
with the appeal process.
The groundwater monitoring boreholes for
Wressle have now been successfully installed and
the Environmental Permit from the Environmental
Agency is expected to be issued in the near future.
Extensive work has been carried out by the operator to
progress the Wressle appeal process and environmental
clearance for the development of a conventional project.
Union Jack looks forward to progressing Wressle to first
oil from what is a significant discovery for our Company.
3
BUSINESS AND STRATEGYwww.unionjackoil.comUNION JACK OIL PLC Chairman’s Statement
PEDL253 – BISCATHORPE
PEDL143 – HOLMWOOD
PEDL253 is within the proven hydrocarbon fairway
of the South Humber Basin and is on trend with the
Saltfleetby gas field, Keddington oil field and the Louth
and North Somercotes prospects.
Biscathorpe is a large, well defined four-way dip closed
structure mapped from recently reprocessed 3D
seismic. A drill-ready prospect with planning consent
for drilling and any subsequent testing is expected
to be drilled during H2 2017, subject to partner
consent, adding considerable risk adjusted value.
The Biscathorpe-1 structure was drilled by BP
in 1987 and encountered a thin oil-bearing sandstone.
The sand unit is expected 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 geological COS of 40%.
During 2017, Union Jack commissioned an independent
review of the Biscathorpe 3D by geophysical consultants,
Sotwell Exploration Ltd. The results of this review were
highly encouraging and the comments included that well
ties, by synthetic seismogram, are high quality and allow
a robust link between the geology and seismic data.
Other key points highlighted were that, in Sotwell’s
opinion, the Biscathorpe “concept” is confirmed, with
good evidence of the possibility of the sand thickening
away from the previous well location, that the whole
area is very attractive for oil exploration and that a
“mega” play trap is potentially feasible with further
stratigraphic upside. The proposed Biscathorpe-2 well
location to appraise the prospect appears optimal and
any additional wells linked to seismic would probably
display new prospect concepts.
In March 2017, the OGA granted a further one year
extension to PEDL253 and the licence now expires
on 30 June 2018.
In May 2016, Union Jack entered into an agreement
with Europa to acquire a 7.5% interest in PEDL143
containing the drill-ready Holmwood Prospect. This
is the first Weald Basin licence interest located in the
South of England to be introduced to the Union Jack
UK onshore portfolio.
Holmwood is a conventional oil prospect first identified
by BP in 1988 and is estimated by the operator to hold
gross mean un-risked Prospective Resources of 5.6 million
barrels of oil with a geological COS of 33%. Holmwood
is on trend with, and located just 12 kilometres from,
the Horse Hill-1 discovery.
Holmwood-1 is expected to be drilled in the Autumn
of 2017.
OTHER ASSETS
Other assets held by Union Jack include interests in the
producing Keddington oil field PEDL005(R) (10%) which
provides the Company with a modest income each month
from its share of oil production, North Kelsey PEDL241
(20%), Burton on the Wolds PEDL201 (10%), PEDL339
(10%) which contains an extension of the Louth Prospect
and PEDL209 (10%) where the unsuccessful and fully
impaired Laughton well was drilled in early 2016.
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
Union Jack remains debt free and our cash balance as at
30 April 2017 stands in excess of £2 million, with more
than enough funds to cover the costs of our current
planned drilling campaign which includes Biscathorpe-2
and Holmwood-1, and surplus working capital for at
least a 12 month period from the date of approving the
financial statements.
In September 2016, the Company raised £700,000
before expenses of £73,685 to further expand its
near-term development and production portfolio. This
expansion was satisfied by the acquisition of a 3.34%
interest in PEDL180 and PEDL182 soon after completing
that funding.
4
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC During February 2017, as described in the Events
After the Balance Sheet Date note, the Company
raised £1.4 million before expenses of £129,347
in a significantly oversubscribed placing with a view
to utilising the funds raised to increase Union Jack’s
interests in the licences within its existing portfolio.
Some of the proceeds were used to acquire a further
3.33% interest in PEDL180 and PEDL182 containing
the Wressle-1 discovery and the Broughton
North Prospect. Further funds resulting from
the 2017 placing remain to be invested.
We continue to apply strict financial control and
discipline to our activities and pride ourselves on our
low general and administrative costs which during this
period were on par with those reported last year.
Union Jack was largely insulated from the low oil
price environment witnessed during the first half
of 2016 due to our low corporate overheads, low
operating costs by virtue of being onshore UK and
our strategy of remaining debt free which allowed
management to focus on low cost, late stage project
acquisitions while maintaining a tight rein on our cash
position. The result was that our growth plans were
largely unaffected and the quest for new assets was
successful along with our key aspiration to develop our
“jewel in the crown”, the Wressle-1 discovery that is
currently seeking a satisfactory outcome to obtaining
planning approval and moving into production.
I would like to take this opportunity to personally thank
the rest of my Board, Joe O’Farrell, Graham Bull and
Ray Godson for their sound advice, technical support
and professional guidance in respect of Company
matters. The same comment applies to our advisers
for their help in assisting Union Jack, all of whom
contribute to the seamless running of our Company.
SUMMARY
Given our focused strategy, I remain optimistic that 2017
will deliver positive results from the foundations that
have been nurtured over recent years. We look forward
to the drilling of Biscathorpe-2 and Holmwood-1
and, of the utmost importance, a resolution to
the development of Wressle which, if and when
positively determined, will ensure first oil resulting in
a material transformation in cash flow to Union Jack.
We believe our focused strategy and maintaining a low
cost base is key to managing risk and allowing Union
Jack to thrive in difficult conditions, while ensuring that
our asset portfolio remains well balanced by combining
appropriate components of production, appraisal,
discovery and exploration and, importantly, also ensuring
we are adequately funded for all future commitments.
The future of Union Jack remains bright.
David Bramhill
Executive Chairman
15 May 2017
5
BUSINESS AND STRATEGYwww.unionjackoil.comUNION JACK OIL PLC Strategic Report
FOR THE YEAR ENDED 31 DECEMBER 2016
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 2016 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 £892,594 (2015: £587,301).
The directors do not recommend the payment of a dividend
(2015: nil).
In September 2016, 411,764,706 new ordinary shares were
issued for cash at 0.17 pence per share raising £700,000 before
expenses of £73,685.
The enlarged issued share capital following the issue of new
shares described in this section is 3,300,473,511 ordinary
shares of 0.025 pence each and 831,680,400 deferred shares
of 0.225p 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 2016. Traditional KPIs are not appropriate
to the Company. Performance is measured by monitoring
exploration costs and ensuring sufficient funds are available
to meet exploration commitments.
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 2018.
In May 2016, the Company acquired from Europa Oil & Gas
Limited a 7.5% interest in PEDL143 containing the drill-ready
Holmwood Prospect.
In November 2016, the Company acquired a 3.34% interest
in PEDL180 and PEDL182 containing the Wressle discovery
well from Europa Oil & Gas Limited. This took the Company’s
interest in PEDL180 and PEDL182 to 11.67%.
6
Intangible Assets totalled £2,079,340 (2015:£1,165,077).
The Company’s Income Statement reports revenues for
the first time of £22,119 (2015: nil) in respect of production
income from the Keddington oil field.
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. The potential
revenues identified from this analysis would exceed costs and
accordingly, the directors continue to actively evaluate the
licence with a view to possible future explorative drilling.
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC 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.
This risk has been slightly mitigated by entering into a licence
interest acquisition where Europa Oil & Gas are the operator.
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
is 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 (being at least 12 months
from the date the financial statements were approved) 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
15 May 2017
7
BUSINESS AND STRATEGYwww.unionjackoil.comUNION JACK OIL PLC Review of Operations
PEDL146
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
PEDL011
PEDL011
EXL288
1
6
1
L
D
E
P
NORTH SEA
PEDL183
PEDL182
Broughton
North
PEDL181
PEDL179
PL162
PEDL 178
CROSBY WARREN
PEDL182
8
8
2
L
X
E
PEDL 174
PEDL173
PEDL180
HATFIELD
PL162
TRUMFLEET
PL161
HATFIELD
9
6
1
L
D
E
P
PEDL012
PEDL200
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
SCAMPTON NORTH
PEDL007
TORKSEY
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
PEDL001
PEDL001
FARLEYS WOOD
PEDL090
PEDL001
PEDL001
PEDL130
ML003
EGMANTON
WHISBY
C.E.
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
IRONVILLE
PEDL202
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
PEDL180
PEDL182
Wressle
Discovery
GEDLING VENT
PEDL255
PEDL208
CROPWELL BUTLER
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
10km
Gas Field
Oil Field/Discovery
Prospect
PEDL180
PEDL182
WRESSLE
DISCOVERY
PEDL182
BROUGHTON
NORTH
INTEREST HELD BY
UNION JACK OIL PLC
15%
Further acquisitions
have raised Union
Jack’s interest in
PEDL180 and PEDL182
containing the Wressle
hydrocarbon discovery
to 15%.
Oil and gas Reserves
and Contingent
Resources identified by
the Competent Person
in aggregate exceed
the Operator’s original
pre-drill estimates.
8
Following two further acquisitions
of interests in PEDL180 and
PEDL182 during 2016 and 2017
respectively, Union Jack now holds
a 15% interest in these licences.
These licences contain the Wressle-1
conventional discovery well from
which first commercial oil is expected
to flow at an initial constrained rate
of approximately 500 barrels a day
following receipt of Environmental
Agency and Planning approvals.
Located in Lincolnshire, on the
western margin of the Humber
Basin, the above licences contain the
Wressle-1 oil discovery and are on
trend with the nearby discoveries at
Crosby Warren, Brigg and Broughton.
Subsequent to the initial acquisition
of the 8.33% interest, the Wressle
discovery was mapped as extending
into PEDL182 and as a result the
Company acquired, from Egdon,
at no extra cost, an 8.33% interest
in the entire Wressle-1 discovery
mapped over PEDL180 and PEDL182.
PEDL021
HUMBLY GROVE
GOODWORTH
PL116
HERRIARD
PL233
In September 2016 the Company
acquired a 3.34% interest in PEDL180
and PEDL182 from Europa Oil &
Gas Limited for a consideration
of £600,000. In addition, during
February 2017 a further 3.33%
interest was acquired from Celtique
Energie Petroleum Limited for
the same consideration.
The results of a Competent Person’s
Report prepared by ERCE were
published in September 2016.
ERCE made independent estimates
of the Reserves, Contingent and
Prospective Resources associated
with the Wressle-1 discovery and
the Broughton North Prospect.
There were several highlights
considered within this
report which included:
• Oil and gas reserves and
Contingent Resources identified
by the Competent Person in
aggregate exceed the Operator’s
original pre-drill estimates
PEDL246
ML018
PEDL137
PL235
PALMERS WOOD
EXL189
DL004
BLETCHINGLEY
ML021
PL182
BROCKHAM
LINGFIELD
ALBURY
PEDL143
HORSE HILL
EXL189
PEDL246
COWDEN
STOCKBRIDGE
PL249
PEDL070
AVINGTON
LOMER
GODLEY BRIDGE
PEDL235
PEDL243
PEDL231
BALCOMBE
ASHDOWN
PEDL234
BOLNEY
PEDL244
HEATHFIELD
HORNDEAN
PL240
PEDL126
PL211
BAXTERS COPSE
PEDL233
PL205
SINGLETON
STORRINGTON
PL241
LIDSEY
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
“”
IN SEPTEMBER 2016,
SHAREHOLDERS WERE
UPDATED WITH POSITIVE
RESULTS FROM THE
COMPETENT PERSON’S
REPORT GIVING PROVEN
RESERVES TO THE PROJECT.
• Gross P Mean Oil Originally in Place
(“OOIP”) is 14.8 million stock tank
barrels in aggregate across three
reservoir sands, the Ashover Grit,
Wingfield Flags and Penistone Flags,
of which 2.15 million stock tank
barrels are potentially recoverable
• Gross 2P oil Reserves of 0.62
million stock tank barrels
identified across two reservoir
sands, the Ashover Grit and
Wingfield Flags that form the
basis of the initial development
plan which currently excludes
development of the material
Penistone Flags reservoir sands
In respect of the Broughton North
Prospect ERCE commented;
• The Broughton North Prospect
has OOIP of 3.43 million stock
tank barrels, gross unrisked
Mean Prospective Resources of
0.51 million stock tank barrels
and 0.51 bcf of gas in aggregate
across two reservoir sands, the
Ashover Grit and Penistone Flags
• Broughton North is a drill-
ready prospect, subject to
obtaining planning permission
• The Broughton North Prospect
benefits from the results of the
Wressle-1 oil and gas discovery
and the Broughton-B1 exploration
well that significantly reduces the
geological risk over PEDL180 and
PEDL182. Consequently ERCE
attributes a high geological COS
with a range of 40% to 49% for
the prospect
• Mapping of the Broughton North
Prospect also benefits from the
same high quality 3D seismic
data as was used to identify the
Wressle-1 oil and gas discovery
The table below show the net volumes of hydrocarbons attributable to Union Jack
GROSS VOLUMES
NET VOLUMES ATTRIBUTABLE TO UNION JACK
OIL MMSTB
GAS BCF
OIL EQUIV
MMBOE
OIL MMSTB
GAS BCF
OIL EQUIV
MMBOE
2P Ashover Grit and
Wingfield Flags
2C Penistone Flags
Broughton North
Mean Unrisked
Prospective Resources
0.62
1.53
0.51
0.20
2.00
0.51
0.65
1.86
0.60
0.09
0.23
0.08
0.03
0.30
0.08
0.10
0.28
0.09
9
BUSINESS AND STRATEGYwww.unionjackoil.comUNION JACK OIL PLC REVIEW OF OPERATIONS
“”
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.
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.
• 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)
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.
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.
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.
10
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC “”
MAPPING OF THE
BROUGHTON NORTH
PROSPECT ALSO BENEFITS
FROM THE SAME HIGH
QUALITY 3D DATA
SET AS WAS USED TO
IDENTIFY THE WRESSLE-1
DISCOVERY.
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 acquiring
the required consents such as planning
and environmental permissions to
enable commercial production from
the Wressle discovery.
In January 2017 the North Lincolnshire
Council declined planning consent for
the development of the Wressle-1
discovery. At the same meeting,
however, the application for the
installation of groundwater monitoring
boreholes was approved.
The Operator, Egdon, having consulted
with the Joint Venture Partners (“JV”)
and having taken further advice,
have informed the JV that they have
submitted a formal appeal against the
refusal of planning consent.
In addition, Egdon has, in parallel,
submitted a new planning application
for the Wressle development
which includes even more detailed
information to address the specific
concerns outlined by the North
Lincolnshire Council in their refusal.
The Board of Union Jack believes that
this dual track approach will provide
the best opportunity for a successful
outcome with the minimum of delay.
On this basis the licence costs are not
impaired in these financial statements.
THE INTERESTS IN PEDL180 AND PEDL182 ARE HELD BY:
Egdon Resources U.K. Limited (operator)
Celtique Energie Petroleum Limited
Europa Oil & Gas Limited
Union Jack Oil plc
25.0%
30.0%
30.0%
15.0%
11
BUSINESS AND STRATEGYwww.unionjackoil.comUNION JACK OIL PLC REVIEW OF OPERATIONS
PEDL005(R)
KEDDINGTON
PEDL339
LOUTH
EXTENSION
INTEREST HELD BY
UNION JACK OIL PLC
10%
Producing oilfield with
increased production
potential from two
additional prospects.
Louth Prospect
extends into PEDL339.
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. The Company
has not paid any upfront cash to
earn the 10% economic interest
in PEDL005(R). Under the terms
PEDL146
of the agreement Union Jack has
also earned a 10% interest from
Egdon in PEDL339, which contains
the mapped extension to the
Louth Prospect. This licence was
awarded to the existing Joint Venture
group in the UK 14th Landward
Oil and Gas Licensing Round.
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 bopd 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 target
undrained reservoir sequences.
LOUTH PROSPECT
The Louth oil prospect is located
mostly within PEDL005(R) and
extends into 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 a STOIIP of
5.5 million barrels and gross mean
Prospective Resources of 1.4 million
barrels with an attractive COS of 37%.
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:
Egdon Resources
U.K. Limited (operator)
Nautical Petroleum Limited
Terrain Energy Limited
NORTH SEA
Union Jack Oil plc
PEDL183
KEDDINGTON
OILFIELD
PEDL005(R)
EXCLUDING KEDDINGTON
45.0%
10.0%
35.0%
10.0%
65.0%
10.0%
15.0%
10.0%
PEDL181
PEDL005(R)
Louth Prospect
PEDL005(R)
North
Somercotes
Prospect
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
PEDL011
PEDL011
EXL288
1
6
1
L
D
E
P
PEDL179
PL162
PEDL 178
CROSBY WARREN
PEDL182
8
8
2
L
X
E
PEDL 174
PEDL173
PEDL180
HATFIELD
PL162
TRUMFLEET
PL161
HATFIELD
9
6
1
L
D
E
P
PEDL012
PEDL200
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
SCAMPTON NORTH
PEDL007
TORKSEY
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
PEDL001
PEDL001
FARLEYS WOOD
PEDL090
PEDL001
PEDL001
PEDL130
ML003
EGMANTON
WHISBY
C.E.
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
IRONVILLE
PEDL202
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
GEDLING VENT
PEDL255
PEDL208
CROPWELL BUTLER
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
PEDL005(R)
Keddington
Oilfield
10km
Gas Field
Oil Field/Discovery
Prospect
12
PEDL021
GOODWORTH
HERRIARD
PL116
HUMBLY GROVE
DL004
ALBURY
BROCKHAM
PL235
PALMERS WOOD
ML021
PL182
PEDL246
BLETCHINGLEY
ML018
PEDL143
PEDL137
HORSE HILL
LINGFIELD
EXL189
EXL189
PEDL246
COWDEN
PL233
PL249
STOCKBRIDGE
PEDL070
AVINGTON
LOMER
GODLEY BRIDGE
PEDL235
PEDL243
PEDL231
BALCOMBE
ASHDOWN
PEDL234
BOLNEY
PEDL244
HEATHFIELD
HORNDEAN
PL240
PEDL126
PL211
BAXTERS COPSE
PEDL233
PL205
SINGLETON
STORRINGTON
PL241
LIDSEY
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
PEDL146
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
PEDL011
PEDL011
EXL288
1
6
1
L
D
E
P
NORTH SEA
PEDL183
PEDL179
PL162
PEDL 178
CROSBY WARREN
PEDL182
PEDL181
8
8
2
L
X
E
PEDL 174
TRUMFLEET
PL161
HATFIELD
9
6
1
L
D
E
P
PEDL173
PEDL180
HATFIELD
PL162
PEDL241
CORRINGHAM
ML004
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
BECKINGHAM
ML004
ML004
PEDL012
PEDL143
HOLMWOOD
PROSPECT
PEDL006
PEDL090
PEDL200
PEDL007
PEDL001
NEWTON-ON-TRENT
PEDL
210
SOUTH LEVERTON
ML007
BOTHAMSALL
TORKSEY
PEDL001
PEDL001
FARLEYS WOOD
HEMSWELL
EAST
GLENTWORTH
WEST FIRSBY
PEDL006
COLD HANWORTH
PEDL
210
SCAMPTON NORTH
SCAMPTON
PEDL210
BECKERING
STAINTON
WELTON
PL179
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
PEDL001
PEDL130
ML003
EGMANTON
WHISBY
C.E.
PEDL001
PEDL001
TORKSEY
PEDL001
EAKRING
CAUNTON
PEDL001
PEDL001
INTEREST HELD BY
UNION JACK OIL PLC
7.5%
PEDL202
KIRKLINGTON
KELHAM HILLS
IRONVILLE
GEDLING VENT
PEDL255
PEDL208
CROPWELL BUTLER
PEDL254
PEDL204
The first Weald Basin
licence interest to Union
Jack’s expanding UK
onshore portfolio.
PEDL201
PL220
PL220
REMPSTONE
KINOULTON
BELVOIR
Unrisked gross mean
prospective resources of
5.6 million barrels from
the shallower sandstone
reservoirs only.
In May 2016, Union Jack entered
into an agreement with the
Operator, Europa to acquire
a 7.5% economic interest in
PEDL143 located within the
Weald Basin in southern England
and containing the drill-ready
Holmwood Prospect.
During 2015 planning permission
was obtained for both the surface
well location and underground
wellpath for the Holmwood-1
exploration well expected
to be drilled in H2 2017.
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
The Holmwood Prospect is a
conventional oil prospect first
identified by BP in 1988, and is
estimated by the Operator to hold
gross mean unrisked prospective
resources of 5.6 million barrels of
oil in the Portlandian and Corallian
sandstones with a geological COS
of 33%. The P90 – P10 range of
prospective resources is 1 to 11
million barrels of oil which is the
typical range for the Weald Basin,
based on the 14 oil and gas fields
that have been discovered and
produced in the Weald Basin to date.
The Holmwood Prospect lies 12
kilometres immediately to the west
of, and on trend with, the Horse
Hill-1 discovery well in PEDL137
where earlier in 2016 UK Oil & Gas
Investments PLC and its partners
reported excellent flow rates from
test production from the Upper
Portland sandstone reservoir and
the Upper and Lower Kimmeridge
limestone reservoirs. The Holmwood
Prospect also lies approximately five
kilometres south of the Brockham
oilfield that produces from the
Portland sandstone reservoir.
The Holmwood-1 exploration well
will penetrate similar stratigraphy to
the Horse Hill-1 discovery, including
the possibility that oil may be
encountered in the Jurassic Upper
and Lower Kimmeridge Micrites,
in addition to its principal targets
in the Corallian and Portlandian
sandstone. Possible resources within
the Jurassic limestones, equivalent
to those at the Horse Hill-1
discovery have not been estimated
in the Operator’s mean unrisked
prospective resources forecast of
5.6 million barrels of oil and so
offer further upside potential.
A two year extension has been
granted by the OGA to 1 October
2018 in respect of this licence.
THE INTERESTS IN PEDL143 ARE HELD BY:
Europa Oil and Gas Limited (operator)
UK Oil & Gas Investments PLC
Egdon Resources UK Limited
Angus Energy plc
Warwick Energy Exploration Limited
Union Jack Oil plc
Altwood Petroleum Limited
20.0%
30.0%
18.4%
12.5%
10.0%
7.5%
1.6%
10km
Gas Field
Oil Field/Discovery
Prospect
PEDL021
GOODWORTH
HERRIARD
PL116
HUMBLY GROVE
DL004
ALBURY
BROCKHAM
PL235
PALMERS WOOD
ML021
PL182
BLETCHINGLEY
PEDL246
ML018
PEDL143
PEDL137
HORSE HILL
LINGFIELD
EXL189
EXL189
PEDL246
COWDEN
PL233
PL249
STOCKBRIDGE
PEDL070
AVINGTON
LOMER
GODLEY BRIDGE
PEDL235
PEDL243
PEDL231
BALCOMBE
ASHDOWN
PEDL234
BOLNEY
PEDL244
HEATHFIELD
HORNDEAN
PL240
PEDL126
PL211
BAXTERS COPSE
PEDL233
PL205
SINGLETON
STORRINGTON
PL241
LIDSEY
PEDL143
Holmwood
Prospect
13
BUSINESS AND STRATEGYwww.unionjackoil.comUNION JACK OIL PLC
REVIEW OF OPERATIONS
PEDL253
BISCATHORPE
INTEREST HELD BY
UNION JACK OIL PLC
12%
Drill-ready prospect
expected to be drilled
during H2 2017 adding
considerable risk
adjusted value.
In March 2013, Union Jack
entered into an agreement with
Egdon, the licence operator,
and Montrose Industries
Limited (“Montrose”)
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 gasfield and
the Keddington oilfield which
produces oil from the Upper
Carboniferous Westphalian
aged reservoir sandstones.
PEDL146
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 a 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 during H2 2017.
A one year extension has been
granted by the OGA to 30 June 2018
in respect of this licence.
THE INTERESTS IN PEDL253 ARE HELD BY:
Egdon Resources U.K. Limited (operator)
Montrose Industries Limited
Union Jack Oil plc
NORTH SEA
PEDL183
52.8%
35.2%
12.0%
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
PEDL011
PEDL011
EXL288
1
6
1
L
D
E
P
PEDL179
PL162
PEDL 178
CROSBY WARREN
PEDL182
PEDL181
8
8
2
L
X
E
PEDL 174
PEDL173
PEDL180
HATFIELD
PL162
TRUMFLEET
PL161
HATFIELD
9
6
1
L
D
E
P
PEDL012
PEDL200
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
SCAMPTON NORTH
PEDL007
TORKSEY
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
PEDL001
PEDL001
FARLEYS WOOD
PEDL090
PEDL001
PEDL001
PEDL130
ML003
EGMANTON
WHISBY
C.E.
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
IRONVILLE
PEDL202
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
PEDL253
Biscathorpe
GEDLING VENT
PEDL255
PEDL208
CROPWELL BUTLER
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
10km
Gas Field
Oil Field/Discovery
Prospect
14
PEDL021
GOODWORTH
HERRIARD
PL116
HUMBLY GROVE
DL004
ALBURY
BROCKHAM
PL235
PALMERS WOOD
ML021
PL182
PEDL246
BLETCHINGLEY
ML018
PEDL143
PEDL137
HORSE HILL
LINGFIELD
EXL189
EXL189
PEDL246
COWDEN
PL233
PL249
STOCKBRIDGE
PEDL070
AVINGTON
LOMER
GODLEY BRIDGE
PEDL235
PEDL243
PEDL231
BALCOMBE
ASHDOWN
PEDL234
BOLNEY
PEDL244
HEATHFIELD
HORNDEAN
PL240
PEDL126
PL211
BAXTERS COPSE
PEDL233
PL205
SINGLETON
STORRINGTON
PL241
LIDSEY
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
PEDL241
NORTH KELSEY
INTEREST HELD BY
UNION JACK OIL PLC
20%
Drill-ready multi-target
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 before June 2018.
A one year extension has been
granted by the OGA to 30 June 2018
in respect of this licence.
THE INTERESTS IN PEDL241 ARE HELD BY:
Egdon Resources U.K. Limited (operator)
Union Jack Oil plc
NORTH SEA
PEDL183
80.0%
20.0%
PEDL179
PL162
PEDL 178
CROSBY WARREN
PEDL182
PEDL241
North Kelsey
PEDL181
PEDL146
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
PEDL011
PEDL011
EXL288
1
6
1
L
D
E
P
8
8
2
L
X
E
PEDL 174
PEDL173
PEDL180
HATFIELD
PL162
TRUMFLEET
PL161
HATFIELD
9
6
1
L
D
E
P
PEDL012
PEDL200
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
SCAMPTON NORTH
PEDL007
TORKSEY
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
PEDL001
PEDL001
FARLEYS WOOD
PEDL090
PEDL001
PEDL001
PEDL130
ML003
EGMANTON
WHISBY
C.E.
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
IRONVILLE
PEDL202
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
GEDLING VENT
PEDL255
PEDL208
CROPWELL BUTLER
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
10km
Gas Field
Oil Field/Discovery
Prospect
15
PEDL021
GOODWORTH
HERRIARD
PL116
HUMBLY GROVE
DL004
ALBURY
BROCKHAM
PL235
PALMERS WOOD
ML021
PL182
PEDL246
BLETCHINGLEY
ML018
PEDL143
PEDL137
HORSE HILL
LINGFIELD
EXL189
EXL189
PEDL246
COWDEN
PL233
PL249
STOCKBRIDGE
PEDL070
AVINGTON
LOMER
GODLEY BRIDGE
PEDL235
PEDL243
PEDL231
BALCOMBE
ASHDOWN
PEDL234
BOLNEY
PEDL244
HEATHFIELD
HORNDEAN
PL240
PEDL126
PL211
BAXTERS COPSE
PEDL233
PL205
SINGLETON
STORRINGTON
PL241
LIDSEY
BUSINESS AND STRATEGYwww.unionjackoil.comUNION JACK OIL PLC
REVIEW OF OPERATIONS
PEDL201
BURTON ON THE WOLDS
INTEREST HELD BY
UNION JACK OIL PLC
10%
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.
PEDL146
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
Terrain Energy Limited
NORTH SEA
PEDL183
Union Jack Oil plc
45.0%
32.5%
12.5%
10.0%
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
PEDL011
PEDL011
EXL288
1
6
1
L
D
E
P
PEDL179
PL162
PEDL 178
CROSBY WARREN
PEDL182
PEDL181
8
8
2
L
X
E
PEDL 174
PEDL173
PEDL180
HATFIELD
PL162
TRUMFLEET
PL161
HATFIELD
9
6
1
L
D
E
P
PEDL012
PEDL200
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
SCAMPTON NORTH
PEDL007
TORKSEY
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
PEDL001
PEDL001
FARLEYS WOOD
PEDL090
PEDL001
PEDL001
PEDL130
ML003
EGMANTON
WHISBY
C.E.
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
IRONVILLE
PEDL202
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
PEDL201
Burton on the
Wolds
GEDLING VENT
PEDL255
PEDL208
10km
CROPWELL BUTLER
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
Gas Field
Oil Field/Discovery
Prospect
16
PEDL021
GOODWORTH
HERRIARD
PL116
HUMBLY GROVE
DL004
ALBURY
BROCKHAM
PL235
PALMERS WOOD
ML021
PL182
PEDL246
BLETCHINGLEY
ML018
PEDL143
PEDL137
HORSE HILL
LINGFIELD
EXL189
EXL189
PEDL246
COWDEN
PL233
PL249
STOCKBRIDGE
PEDL070
AVINGTON
LOMER
GODLEY BRIDGE
PEDL235
PEDL243
PEDL231
BALCOMBE
ASHDOWN
PEDL234
BOLNEY
PEDL244
HEATHFIELD
HORNDEAN
PL240
PEDL126
PL211
BAXTERS COPSE
PEDL233
PL205
SINGLETON
STORRINGTON
PL241
LIDSEY
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
PEDL209
LAUGHTON
INTEREST HELD BY
UNION JACK OIL PLC
10%
Two additional
conventional prospects
and hydrocarbon potential
to be further evaluated.
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
contained the Laughton Prospect.
of the wireline log data indicated that
the hydrocarbon saturations associated
with the shows were not sufficiently
encouraging to warrant testing.
The rig was released from contract
and the wellsite has been fully
restored to its original condition.
Costs of £298,711 have been
impaired with regard to PEDL209.
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 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
THE CONVENTIONAL INTERESTS IN PEDL209 ARE HELD BY:
Egdon Resources UK Limited (operator)
Blackland Park Exploration Limited
Stelinmatvic Industries Limited
NORTH SEA
Union Jack Oil plc
PEDL183
38.0%
28.0%
24.0%
10.0%
PEDL146
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL037
PEDL011
PEDL011
PEDL011
PEDL011
PEDL011
EXL288
1
6
1
L
D
E
P
TRUMFLEET
PL161
HATFIELD
9
6
1
L
D
E
P
PEDL012
PEDL200
PEDL179
PL162
PEDL 178
CROSBY WARREN
PEDL182
PEDL181
8
8
2
L
X
E
PEDL 174
PEDL173
PEDL180
HATFIELD
PL162
PEDL043
PEDL043
PEDL140
PEDL209
EVERTON
ML004
BECKINGHAM
ML004
PEDL241
CORRINGHAM
ML004
HEMSWELL
EAST
GLENTWORTH
PEDL005
PEDL005
PEDL253
PEDL005
SALTFLEETBY
PEDL
210
PEDL006
PEDL
210
WEST FIRSBY
PEDL006
COLD HANWORTH
SOUTH LEVERTON
ML007
SCAMPTON NORTH
PEDL007
TORKSEY
SCAMPTON
PEDL210
PL179
BECKERING
STAINTON
WELTON
BOTHAMSALL
NEWTON-ON-TRENT
NETTLEHAM
FISKERTON AIRFIELD
PEDL001
PEDL001
PEDL001
PEDL001
FARLEYS WOOD
PEDL090
PEDL001
PEDL001
PEDL130
ML003
EGMANTON
WHISBY
C.E.
PEDL001
PEDL001
PEDL001
PEDL001
PEDL001
IRONVILLE
PEDL202
TORKSEY
EAKRING
CAUNTON
KIRKLINGTON
KELHAM HILLS
PEDL209
Laughton
GEDLING VENT
PEDL255
PEDL208
10km
CROPWELL BUTLER
PEDL254
PEDL204
BELVOIR
KINOULTON
PL220
PEDL201
REMPSTONE
PL220
Gas Field
Oil Field/Discovery
Prospect
17
PEDL021
GOODWORTH
HERRIARD
PL116
HUMBLY GROVE
DL004
ALBURY
BROCKHAM
PL235
PALMERS WOOD
ML021
PL182
PEDL246
BLETCHINGLEY
ML018
PEDL143
PEDL137
HORSE HILL
LINGFIELD
EXL189
EXL189
PEDL246
COWDEN
PL233
PL249
STOCKBRIDGE
PEDL070
AVINGTON
LOMER
GODLEY BRIDGE
PEDL235
PEDL243
PEDL231
BALCOMBE
ASHDOWN
PEDL234
BOLNEY
PEDL244
HEATHFIELD
HORNDEAN
PL240
PEDL126
PL211
BAXTERS COPSE
PEDL233
PL205
SINGLETON
STORRINGTON
PL241
LIDSEY
BUSINESS AND STRATEGYwww.unionjackoil.comUNION JACK OIL PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
The directors present their report together with the
financial statements for the year ended 31 December 2016.
The directors have chosen, in accordance with section
414C(11) of the Companies Act 2006, to set out in the
Company’s Strategic Report information required by
Schedule 7 to the Accounting Regulations to be contained
in the Directors’ Report. This information includes future
developments of the Company and the risks associated
with the use of financial instruments.
DIRECTORS
The directors in office at the end of the year, and their
interests in the shares of the Company as at 1 January 2016
and 31 December 2016, were as shown in the table below.
ORDINARY SHARES
31 December
2016
1 January
2016
52,164,580
52,164,580
118,870,063
118,870,063
30,764,706
25,764,706
D Bramhill
J O’Farrell
R Godson
G Bull
DIRECTORS’ REMUNERATION
The remuneration of the directors for the year ended
31 December 2016 and the year ended 31 December 2015
was as follows:
D Bramhill
J O’Farrell
R Godson
G Bull
SALARIES AND FEES
2015
2016
£
£
80,000
50,000
25,000
25,000
80,000
50,000
25,000
25,000
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.
4,000,000
4,000,000
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held
on 22 June 2017 in accordance with the Notice of Annual
General Meeting on page 43. Details of the resolutions to
be passed are included in this notice.
Raymond Godson purchased 5,000,000 ordinary shares
which are held in trust for the benefit of his minor
grandchildren.
These shares have been included in the above table
of interests.
Directors who served during the year are as follows:
David Bramhill (executive director);
Joseph O’Farrell (executive director);
Raymond Godson (non-executive director);
Graham Bull (non-executive director).
18
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
EVENTS AFTER THE BALANCE SHEET DATE
The following events have taken place after the year end:
DISCLOSURE OF INFORMATION TO THE
AUDITOR
In February 2017, 1,032,589,694 new ordinary shares
were issued for cash at 0.135 pence per share raising
approximately £1,400,000 before expenses.
The enlarged issued share capital following the issue of new
shares described in this section is 4,333,063,205 ordinary
shares of 0.025 pence each.
In March 2017, the Company acquired a 3.33% interest
in PEDL180 and PEDL182 containing the Wressle oil
discovery from Celtique Energie Petroleum Limited for
a consideration of £600,000. The Company now holds
an interest of 15% in PEDL180 and PEDL182.
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(a).
The directors at the date of the approval of this Annual
Report confirm that:
•
•
so far as the directors are aware, there is no relevant
audit information of which the Company’s auditor
is unaware; and
the directors have taken all the steps that they ought
to have taken as directors in order to make themselves
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
BDO LLP was appointed Auditor during the year.
A resolution to reappoint BDO 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
15 May 2017
19
GOVERNANCEwww.unionjackoil.comUNION JACK OIL PLC CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2016
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 but due to the size and nature
of its current business has not adopted the UK Corporate
Governance Code in its entirety.
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 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.
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.
REMUNERATION COMMITTEE
• Audit Committee
The Audit Committee considers and determines
relevant action in respect of any control issues raised
by the external auditor.
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 32.
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.
20
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
DIRECTORS’ RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2016
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 ensuring the annual
report and the financial statements are made available
on a website. Financial statements are published on
the Company’s website in accordance with legislation
in the United Kingdom governing the preparation and
dissemination of financial statements, which may vary
from legislation in other jurisdictions. The maintenance
and integrity of the Company’s website is the responsibility
of the directors. The directors’ responsibility also extends
to the ongoing integrity of the financial statements
contained therein.
The directors are responsible for preparing the Annual
Report and the Financial Statements in accordance with
applicable law and regulations.
Company law requires the directors to prepare financial
statements for each financial year. Under that law the
directors have elected to prepare the 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. The directors are also required to prepare
financial statements in accordance with the rules of the
London Stock Exchange for companies trading securities
on the Alternative Investment Market. In preparing these
financial statements the directors are required to:
•
select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
•
state whether they have been prepared in accordance
with IFRSs as adopted by the European Union, subject
to any material departures disclosed and explained in
the financial statements;
• prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
company will continue in business.
21
GOVERNANCEwww.unionjackoil.comUNION JACK OIL PLC INDEPENDENT AUDITOR’S REPORT
ON THE FINANCIAL STATEMENTS
TO THE MEMBERS OF UNION JACK OIL PLC
We have audited the financial statements of Union
Jack Oil plc (“the Company”) for the year ended
31 December 2016 which comprise the Income
Statement, the Statement of Comprehensive Income,
the Balance Sheet, the Statement of Changes in Equity,
the 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 members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members those
matters we are required to state to them in an auditor’s
report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility
to anyone other than the Company and the Company’s
members as a body, for our audit work, for this report,
or for the opinions we have formed.
RESPECTIVE RESPONSIBILITIES OF DIRECTORS
AND AUDITORS
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 Financial Reporting Council’s (FRC’s)
Ethical Standards for Auditors.
SCOPE OF THE AUDIT OF THE FINANCIAL
STATEMENTS
A description of the scope of an audit of financial
statements is provided on the FRC’s website at
www.frc.org.uk/auditscopeukprivate.
OPINION ON OTHER MATTERS PRESCRIBED
BY THE COMPANIES ACT 2006
In our opinion, based on the work undertaken in the course
of this audit:
•
•
the information given in the Strategic Report and
the Directors’ Report for the financial year for which
the financial statements are prepared is consistent
with the financial statements; and
the Strategic Report and Directors’ Report have
been prepared in accordance with applicable legal
requirements.
MATTERS ON WHICH WE ARE REQUIRED
TO REPORT BY EXCEPTION
In the light of the knowledge and understanding of the
Company and its environment obtained in the course
of the audit, we have not identified material misstatements
in the Strategic Report or the Directors’ Report.
We have nothing to report in respect of the following
matters where the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept by
the Company, or returns adequate for our audit have
not been received from branches not visited by us; or
•
the financial statements are not in agreement with the
accounting records and returns; or
• certain disclosures of directors’ remuneration specified
by law are not made; or
• we have not received all the information and
explanations we require for our audit.
Anne Sayers, Senior Statutory Auditor
OPINION ON FINANCIAL STATEMENTS
In our opinion:
for and on behalf of BDO LLP, Statutory Auditor,
London, United Kingdom
15 May 2017
BDO LLP is a limited liability partnership registered in
England and Wales (with registered number OC305127)
•
•
•
the financial statements give a true and fair view of the
state of the Company’s affairs as at 31 December 2016
and of the Company’s loss for the year then ended;
the financial statements have been properly prepared
in accordance with IFRSs as adopted by the European
Union;
the financial statements have been prepared in
accordance with the requirements of the Companies
Act 2006.
22
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2016
Revenue
Cost of sales
Gross loss
Administrative expenses (excluding impairment charge)
Impairment
Total adminstrative 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
31.12.16
£
31.12.15
£
22,119
(22,696)
(577)
–
–
–
(598,075)
(298,711)
(605,742)
–
(896,786)
(605,742)
(897,363)
(605,742)
–
5,654
12,713
6,569
(891,709)
(586,460)
(885)
(841)
(892,594)
(587,301)
(892,594)
(587,301)
(0.03)
(0.02)
2
2
3
5
6
7
The accompanying accounting policies and notes form an integral part of these financial statements.
23
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2016
Loss for the financial year
Other comprehensive income
31.12.16
£
31.12.15
£
(892,594)
–
(587,301)
–
Total comprehensive loss for the financial year
(892,594)
(587,301)
The accompanying accounting policies and notes form an integral part of these financial statements.
24
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
BALANCE SHEET
AS AT 31 DECEMBER 2016
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
Notes
31.12.16
£
31.12.15
£
8
9
10
11
18
19
2,079,340
40,000
1,165,077
40,000
2,119,340
1,205,077
62,700
1,861,964
27,232
3,078,311
1,924,664
3,105,543
4,044,004
4,310,620
85,312
18,000
85,649
18,000
103,312
103,649
3,940,692
4,206,971
2,696,399
4,566,072
167,924
(3,489,703)
2,593,458
4,042,698
167,924
(2,597,109)
3,940,692
4,206,971
Capital and reserves attributable to the
Company’s equity shareholders
Share capital
Share premium
Share-based payments reserve
Accumulated deficit
12(a)
13
13
13
Total equity
The financial statements of Union Jack Oil plc, registered number 07497220, were approved and authorised for issue
by the Board of Directors on 15 May 2017 and were signed on its behalf by:
David Bramhill
Director
The accompanying accounting policies and notes form an integral part of these financial statements.
25
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2016
Share Accumulated
deficit
capital
£
£
Share
premium
£
Share-based
payment
reserve
£
Total
£
Balance at 1 January 2015
2,475,811
(2,009,808)
3,282,848
349,833
4,098,684
Total comprehensive loss
–
(587,301)
–
–
(587,301)
Contributions by and
distributions to owners
Issue of share capital
Share issue costs
Expiry of share-based payments
Total contributions by and
distributions to owners
117,647
–
–
–
–
–
682,353
(104,412)
181,909
–
–
(181,909)
800,000
(104,412)
–
117,647
–
759,850
(181,909)
(695,588)
Balance at 31 December 2015
2,593,458
(2,597,109)
4,042,698
167,924
4,206,971
Balance at 1 January 2016
2,593,458
(2,597,109)
4,042,698
167,924
4,206,971
Total comprehensive loss
–
(892,594)
–
–
(892,594)
Contributions by and
distributions to owners
Issue of share capital
Share issue costs
Total contributions by and
distributions to owners
102,941
–
–
–
597,059
(73,685)
–
–
700,000
(73,685)
102,941
–
523,374
–
626,315
Balance at 31 December 2016
2,696,399
(3,489,703)
4,566,072
167,924
3,940,692
The accompanying accounting policies and notes form an integral part of these financial statements.
26
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2016
Cash flow from operating activities
Cash flow from investing activities
Purchase of intangible assets
Purchase of investments
Interest received
Notes
14
8
31.12.16
£
31.12.15
£
(694,601)
(543,846)
(1,153,715)
–
5,654
(534,320)
(20,000)
6,569
Net cash used in investing activities
(1,148,061)
(547,751)
Cash flow from financing activities
Proceeds on issue of new shares
Cost of issuing new shares
12(a)
12(a)
700,000
(73,685)
800,000
(104,412)
Net cash generated from financing activities
626,315
695,588
Net decrease in cash and cash equivalents
(1,216,347)
(396,009)
Cash and cash equivalents at beginning of financial year
3,078,311
3,474,320
Cash and cash equivalents at end of financial year
11
1,861,964
3,078,311
The accompanying accounting policies and notes form an integral part of these financial statements.
27
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS
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 2016.
The financial statements have been prepared under the
historical cost convention except for the valuation of certain
warrants for shares. The principal accounting policies set
out below have been consistently applied to all periods
presented.
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 (being at least 12 months from the date
the financial statements were approved) from the cash held
at the date of the signing of these financial statements. 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.
REVENUES
Revenues represent amounts receivable for the sale
of crude oil, net of taxes, and are recognised on delivery
to a third party storage facility on behalf of a customer.
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
Costs (including research costs) incurred prior to obtaining
the legal rights to explore an area will be expensed
immediately to the Income Statement, as these are classified
as pre-licence costs.
Expenditure incurred on the acquisition of a licence interest
will initially be capitalised on a licence-by-licence basis.
Costs will be held 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.
All such costs will be subject to regular technical,
commercial and management review for indicators of
impairment 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.
28
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC PRINCIPAL ACCOUNTING POLICIES
DEVELOPMENT AND PRODUCTION
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.
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.
DECOMMISSIONING AND SITE RESTORATION
COSTS
Plug and abandonment and demobilisation costs will be
recognised in full when wells have been suspended or
facilities installed, or as soon as a constructive obligation
arises. 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.
IMPAIRMENT
The carrying amounts of non-current assets are reviewed
for impairment if events or changes in circumstances
indicate the carrying value may not be recoverable. If
there are indicators of impairment, such as a well not
encountering commercial quantities of oil or a site being
shut-in, an exercise is undertaken to determine whether
the carrying values are in excess of their recoverable
amount. Such review is undertaken on an asset by asset
basis, except where such assets do not generate cash flows
independent of other assets, in which case the review is
undertaken at the cash generating unit level on a field-by-
field basis. For intangible exploration and evaluation assets
potential impairment triggers may include the short term
expiry of a licence, lack of budgeted spend, or the lack of
potential for commercial development of the asset. The
potential recoverable value of such assets is assessed by
the directors based on their knowledge of the assets and
available information. The Company’s cash-generating units
are the smallest identifiable groups of assets that generate
cash inflows that are largely independent of the cash inflows
from other assets or groups of assets.
A previously recognised impairment loss is reversed if the
recoverable amount increases as a result of a reversal of
the conditions that originally resulted in the impairment.
This reversal is recognised in the profit and loss account
and is limited to the carrying amount that would have been
determined, net of depreciation, had no impairment loss
been recognised in the prior years.
The recoverable amount of assets is the greater of their
value in use and fair value less costs to sell. In assessing value
in use, the estimated future cash flows are discounted to
their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money
and the risks specific to the asset. For an asset that does
not generate cash inflows largely independent of those from
other assets, the recoverable amount is determined for the
cash-generating unit to which the asset belongs.
Impairments are recognised in the income statement to the
extent that the carrying amount exceeds the assets’ carrying
amount. The revised carrying amounts are amortised in line
with the Company’s accounting policies.
FARM-INS AND PROFIT-SHARING AGREEMENTS
The Company accounts for its own assets, liabilities and
cash flows measured in accordance with the terms of the
production sharing agreement and the accounting treatment
reflects the agreement’s commercial effect. The Company’s
turnover and cost of sales include revenues and operating
costs associated with the Company’s interest.
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.
29
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS PRINCIPAL ACCOUNTING POLICIES
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.
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.
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.
EQUITY INSTRUMENTS
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
of the equity instruments at the grant date, on the basis
that this is immaterially different from the fair value of the
services provided. Details regarding the determination of
the fair value of equity-settled share-based transactions
are set out in note 12(b). 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 the number 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.
INVESTMENTS
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 15 - Revenue from contracts with customers (effective 1 Jan 2018)
Amendments to IFRS 2 - Classification and measurement of share-based payment transactions (effective 1 Jan 2018)
The Company is in the process of assessing the impact of new standards taking effect on or after 1 January 2018.
The Company’s revenues are expected to increase over the coming years and the impact of IFRS 15 will be assessed
once the structure of sale contracts is known.
30
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC 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 as at 31 December 2016 of £345,655.
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.
In February 2016 the Laughton-1 well within PEDL209
was spudded targeting a structural trap at a depth of over
1,000 metres below ground level defined on re-processed
2D data. 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.
The rig was released from contract and the wellsite has
been fully restored to its original condition.
The directors have considered their options in respect
of PEDL209 and believe that although the licence interest
currently remains in the Union Jack Oil portfolio it is
appropriate to impair the costs of £298,711 spent to date
on this licence.
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 regarding the choice and application
of accounting policies, as well as 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.
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:
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. See note 12(b).
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.
31
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
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:
Impairment charge
Staff costs (see note 4)
Fees payable to the Company’s auditor for:
– The audit of these financial statements
– Tax compliance services
31.12.16
£
31.12.15
£
298,711
197,399
18,000
6,000
–
198,362
23,000
6,000
The impairment charge of £298,711 is in respect of Laughton (PEDL209).
3
OTHER INCOME
During the year a sum of £nil (2015: £12,713) 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
31.12.16
£
31.12.15
£
180,000
17,399
180,000
18,362
197,399
198,362
The average number of persons employed by the company during the year was 4 (2015: 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 (2015: £80,000).
32
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
5
FINANCE INCOME
Bank interest
6
TAXATION
Current tax
UK corporation tax
Adjustment in respect of prior periods
Total UK corporation tax charge
31.12.16
£
31.12.15
£
5,654
6,569
31.12.16
£
31.12.15
£
–
885
885
–
841
841
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 40% (2015: 50%) 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 40% (2015: 50%)
Effects of:
Impairment of intangible assets not deductible for tax purposes
Finance income
Losses carried forward
Adjustment in respect of prior periods
Current tax charge for year
£
£
(891,709)
(586,460)
356,684
293,230
(119,484)
2,262
(239,462)
885
885
–
3,284
(296,514)
841
841
During the year the Company paid £885 corporation tax on its finance income for the previous year of £6,569.
A deferred tax asset of £909,401 (2015: £967,243) 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 has reduced
the effective tax rate to 40%.
33
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
7
LOSS PER SHARE
The Company has issued warrants over ordinary shares which could potentially dilute the basic loss per share in the future.
Further details are given in note 12(b).
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(b). At 31 December 2016
the Company had 55,052,548 (2015: 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
2016
Pence
2015
Pence
Loss per share from continuing operations
(0.03)
(0.02)
The loss and weighted average number of ordinary shares used in the calculation of loss per share are as follows:
2016
£
2015
£
Loss used in the calculation of total basic and diluted earnings per share
(892,594)
(587,301)
Number of shares
2016
2015
Weighted average number of ordinary shares for the purposes of basic
and diluted loss per share
2,994,752,318
2,492,898,974
As detailed in note 12, the Company has 831,680,400 (2015: 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.
As detailed in note 22, the Company issued 1,032,589,694 new ordinary shares after the year end. If the transaction had
occurred before the year end the weighted average number of ordinary shares used above, in the calculation of loss per
share, would have been increased.
34
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
8
INTANGIBLE ASSETS
At 1 January
Costs incurred during the year
Costs impaired
Provision for site restoration
At 31 December
31.12.16
£
31.12.15
£
1,165,077
1,212,974
(298,711)
–
832,100
314,977
–
18,000
2,079,340
1,165,077
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.
The rig was released from contract and the wellsite has been fully restored to its original condition.
Costs of £298,711 have been impaired with regard to PEDL209.
Intangible assets (less provision for impairment) comprise amounts capitalised as follows:
Wressle
Burton on the Wolds
Keddington/Louth
Biscathorpe
North Kelsey
Holmwood
Louth Extension
Broughton North
PEDL180
PEDL201
PEDL005(R)
PEDL253
PEDL241
PEDL143
PEDL339
PEDL182
31.12.16
£
31.12.15
£
1,378,156
345,655
245,324
62,163
33,252
14,260
265
265
723,703
340,877
19,471
54,006
27,020
–
–
–
2,079,340
1,165,077
9
INVESTMENTS
The Company is the beneficial owner of 169,959 (2015: 169,959) ordinary shares in Elephant Oil Limited, a company
registered in England and Wales, for which it has paid £40,000 (2015: £40,000). Elephant Oil Limited has 23,218,183
(2015: 22,822,927) ordinary shares in issue. Union Jack Oil plc has a 0.73% (2015: 0.74%) interest in that company.
The principal activity of Elephant Oil Limited is the exploration and evaluation of hydrocarbon assets.
The directors consider the cost to equate to fair value (Level 3 hierarchy).
35
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
10
TRADE AND OTHER RECEIVABLES
Trade receivables
VAT
Other receivables
Prepayments
31.12.16
£
31.12.15
£
16,902
16,343
–
29,455
–
5,645
4,362
17,225
62,700
27,232
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.
11
CASH AND CASH EQUIVALENTS
Cash at bank
31.12.16
£
31.12.15
£
1,861,964
3,078,311
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
31.12.16
£
31.12.15
£
3,300,473,511
(31 December 2015: 2,888,708,805)
831,680,400
(31 December 2015: 831,680,400)
Total
Ordinary
0.025p
825,118
722,177
Deferred
0.225p
1,871,281
1,871,281
2,696,399
2,593,458
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 September 2016, 411,764,706 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 £700,000, of which £597,059 has arisen in share premium.
Issue costs of £73,685 have been charged to the share premium account.
36
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
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 2016
Number of warrants
Outstanding and exercisable at the beginning of the year
Outstanding and exercisable at the end of the year
55,052,548
55,052,548
Year ended December 2015
Number of warrants
Outstanding and exercisable at the beginning of the year
Expired in the year
335,652,548
(280,600,000)
WAEP
£
0.003
0.003
WAEP
£
0.003
0.003
Outstanding and exercisable at the end of the year
55,052,548
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 at 31 December 2016
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
5,333,333
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 were exercised in 2014
leaving 5,333,333 unexercised at 31 December 2015 and 31 December 2016.
The Company recognised income of £nil (2015: £181,909) related to equity-settled share based payment transactions
during the year.
During the prior 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.
37
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
13
RESERVES
The nature and purpose of each reserve within equity is as follows:
Share capital – represents the nominal value of shares issued.
Share premium – represents the amount subscribed for share capital in excess of nominal value, less related share issue
costs.
Share-based payment reserve – represents the cumulative cost of warrants issued in return for professional services.
Accumulated deficit – represents cumulative profits or losses, and all other net gains and losses and transactions with
owners not recognised elsewhere.
14
RECONCILIATION OF LOSS TO CASH GENERATED FROM OPERATIONS
Loss before taxation
Impairment of intangibles
Finance income
Income taxes paid
(Increase) / decrease in trade and other receivables
(Decrease) / increase in trade and other payables
31.12.16
£
31.12.15
£
(891,709)
298,711
(5,654)
(885)
(586,460)
–
(6,569)
(841)
(599,537)
(593,870)
(35,468)
(59,596)
6,006
44,018
Cash used in operations
(694,601)
(543,846)
38
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
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 2016
Investments: available-for-sale
At 31 December 2015
Investments: available-for-sale
Financial assets measured at amortised cost
At 31 December 2016
Trade receivables
Cash and cash equivalents
Total carrying value
At 31 December 2015
Other receivables
Cash and cash equivalents
Total carrying value
All of the above financial assets’ carrying values approximate to their fair values at 31 December 2016 and
31 December 2015 given their nature and short times to maturity.
Financial liabilities measured at amortised cost
At 31 December 2016
Trade payables
Accruals
Other creditors
Total carrying value
At 31 December 2015
Trade payables
Accruals
Other creditors
Total carrying value
£
40,000
40,000
£
16,902
1,861,964
1,878,866
4,362
3,078,311
3,082,673
£
59,145
24,000
2,167
85,312
57,649
28,000
–
85,649
All of the above financial liabilities’ carrying values approximate to their fair values at 31 December 2016 and
31 December 2015 given their nature and short times to maturity.
39
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
16
FINANCIAL INSTRUMENT RISK EXPOSURE AND MANAGEMENT
The principal financial risks to which the Company is exposed are: 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.
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 £1,895,209 (2015: £3,088,318).
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 2016
and 31 December 2015 on the basis of their earliest possible contractual maturity.
Within
2 months
£
Within Greater than
6 months
£
2-6 months
£
Total
£
59,145
2,167
24,000
59,145
2,167
–
–
–
24,000
85,312
61,312
24,000
57,649
28,000
57,649
–
–
28,000
85,649
57,649
28,000
–
–
–
–
–
–
–
At 31 December 2016
Trade payables
Other creditors
Accruals
At 31 December 2015
Trade payables
Accruals
40
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
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 2016 or 31 December 2015, other than those recognised
in the Balance Sheet.
18
TRADE AND OTHER PAYABLES
Trade payables
Accruals
Other creditors
19
PROVISIONS
Provisions for future site restoration at 31 December 2015 and 31 December 2016
Outstanding at 31 December 2015 for Wressle (PEDL180)
Provided for in the year for Laughton (PEDL209)
Utilised in the year for Laughton (PEDL209)
Outstanding at 31 December 2016 for Wressle (PEDL180)
31.12.16
£
31.12.15
£
59,145
24,000
2,167
57,649
28,000
–
85,312
85,649
£
18,000
18,000
11,605
(11,605)
18,000
At 31 December 2016 there were no site works requiring restoration for which the Company has not already met the
related costs.
41
www.unionjackoil.comUNION JACK OIL PLC FINANCIAL STATEMENTS
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2016
20
RELATED PARTY TRANSACTIONS
Details of key management personnel remuneration are disclosed in note 4. Key management comprises only the directors.
Charnia Resources (UK), an entity owned by Graham Bull, non-executive director, was paid £38,400 (2015: £27,840)
in respect of consulting fees. No amounts were outstanding at the year end (2015:nil).
Jayne Bramhill, spouse of David Bramhill, received the sum of £6,000 (2015: £4,500) from the Company in respect
of IT maintenance and administration costs. No amounts were outstanding at the year end (2015:nil).
During the year, Raymond Godson, non-executive director purchased 5,000,000 ordinary shares which are held in trust
for the benefit of his minor grandchildren.
21
CONTINGENT LIABILITIES
In the event of a discovery of oil within the PEDL143 Holmwood licence area, a balance of £159,375 would become
payable to one of the other parties to the licence. The liability is not provided for in these financial statements since
at this stage the payment is not probable.
There were no contingent liabilities at 31 December 2015.
22
EVENTS AFTER THE BALANCE SHEET DATE
The following events have taken place after the year end:
In February 2017, 1,032,589,694 new ordinary shares were issued for cash at 0.135 pence per share raising approximately
£1,400,000 before expenses of £129,347.
The enlarged issued share capital following the issue of new shares described in this section is 4,333,063,205 ordinary
shares of 0.025 pence each.
In March 2017, the Company acquired a 3.33% interest in PEDL180 and PEDL182 containing the Wressle oil discovery
from Celtique Energie Petroleum Limited for a consideration of £600,000. As a result the Company holds an interest
of 15% in PEDL180 and PEDL182.
42
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC NOTICE OF ANNUAL GENERAL MEETING
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 £541,632.90
(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: 15 May 2017
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 22 June 2017 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 2016, 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 Raymond Godson as a director, who retires
by rotation in accordance with the Company’s Articles
of Association.
3 Re-appointment of auditor
To re-appoint BDO 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
£541,632.90 (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.
43
www.unionjackoil.comUNION JACK OIL PLC ANNUAL GENERAL MEETING
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 2017 (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 2017.
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.
44
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC
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
46
ANNUAL REPORT AND FINANCIAL STATEMENTS 2016UNION JACK OIL PLC