ANNUAL REPORT
AND FINANCIAL
STATEMENTS
UNION JACK OIL plc
Hydrocarbon Production,
Drilling, Development and
Investment onshore United
Kingdom and the United
States of America
Directors,
Officers
and Advisers
DIRECTORS
David Bramhill
Executive Chairman
Joseph O’Farrell
Executive
Graham Bull
Non-Executive
Craig Howie
Non-Executive
COMPANY OFFICE
6 Charlotte Street,
Bath BA1 2NE,
England
Telephone: +44 (0) 1225 428139
Email: info@unionjackoil.com
Web: www.unionjackoil.com
: @unionjackoilplc
REGISTERED NUMBER
07497220
SECRETARY AND
REGISTERED OFFICE
Matthew Small
c/o Berkeley Hall Marshall Limited
6 Charlotte Street,
Bath BA1 2NE,
England
REGISTRARS
Computershare Investor Services PLC
The Pavilions,
Bridgwater Road,
Bristol BS13 8AE,
England
AUDITOR
Crowe U.K. LLP
2nd Floor,
55 Ludgate Hill,
London EC4M 7JW,
England
SOLICITORS
Keystone Law
48 Chancery Lane,
London WC2A 1JF,
England
BANKERS
Royal Bank of Scotland plc
Drummond House,
PO Box 1727,
1 Redheughs Avenue,
Edinburgh EH12 9JN,
Scotland
BancFirst
BancFirst Tower,
100 North Broadway,
Oklahoma City,
Oklahoma 73102,
USA
FINANCIAL ADVISER
Gneiss Energy Limited
5th Floor,
64 North Row, Mayfair,
London W1K 7DA,
England
NOMINATED ADVISER
AND JOINT BROKER
SP Angel Corporate Finance LLP
Prince Frederick House,
35-39 Maddox Street,
London W1S 2PP,
England
JOINT BROKER
Zeus Capital Limited
125 Old Broad Street,
London EC2N 1AR,
England
INVESTOR RELATIONS USA
Harbor Access
107 Elm Street,
4th Floor, Stamford CT 06092,
USA
BUSINESS & STRATEGY
BUSINESS AND STRATEGY
Chairman’s Statement
2
Operational Review
6
Strategic Report
18
Environmental, Social and Governance (ESG)
26
Licence Interests
28
GOVERNANCE
Directors’ Report
30
Corporate Governance Report
33
Independent Auditor’s Report
on the Financial Statements
46
FINANCIAL STATEMENTS
Income Statement
51
Statement of Comprehensive Income
52
Balance Sheet
53
Statement of Changes in Equity
54
Statement of Cash Flows
55
Principal Accounting Policies
56
Notes to the Financial Statements
64
ANNUAL GENERAL MEETING
Notice of Annual General Meeting
83
Union Jack Oil plc is primarily an onshore oil and gas company with
a focus on production, drilling, development and investment in the
United Kingdom and the United States of America.
The issued share capital is traded on the AIM Market of the London
Stock Exchange (Ticker: UJO) and the OTCQB Venture Market in the
United States of America (Ticker: UJOGF).
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.
Contents
STRATEGIC PARTNERSHIPS ONSHORE UNITED
KINGDOM AND THE UNITED STATES OF AMERICA
1
www.unionjackoil.com
Our geographic expansion and strategic partnership in
the United States with our very capable drilling partner
Reach Oil & Gas Inc. (“Reach”), is already contributing
revenues from a portfolio of US onshore production and
development assets. We are delighted to have now drilled
four exploration wells with a 100% success rate. In addition,
we have also selectively expanded our US portfolio of
revenue-generating, high-return Mineral Royalties.
The financial and operational results for 2024 are positive,
with the Company remaining profitable for the third
consecutive year, free of debt and in possession of a
balanced work programme of potentially transformational
development and drilling activities, encompassing both sides
of the Atlantic.
Having been originally UK onshore focused, I reflect on
the past 12 months with satisfaction, having pursued an
additional cash flow driven growth strategy, concentrated in
the USA to complement our excellent revenue generating
onshore projects in the United Kingdom, namely Wressle
and Keddington.
During a relatively short period, this strategy has delivered
excellent results and offers further catalysts for growth that
provide me with confidence in the future of Union Jack.
In Oklahoma, USA, where our drilling activities are
focused, the oil industry remains central to its economy,
with new drilling technologies revitalising and unlocking
new resources, making the state a top US hydrocarbon
producer.
I am delighted to present to the shareholders of Union Jack Oil plc
(“Union Jack” or the “Company”), a profitable onshore UK and USA
focused hydrocarbon production, development and investment
Company, the Annual Report and Financial Statements for the year
ended 31 December 2024.
OPERATIONAL HIGHLIGHTS
• Wressle Competent Person’s Report
(“CPR”) upgrades 2P Reserves by 263%
• West Newton Carbon Intensity Study
given AA rating by GaffneyCline Associates
• Successful Andrews 1-17 and Andrews
2-17 oil and gas discovery wells in
Oklahoma, USA, now in commercial
production
• The Taylor 1-16 well in Oklahoma awaiting
completion of the Hunton and Cromwell
formations
• Commencement of the UK onshore
Keddington Oilfield upgrade
• Acquisition of a 45% interest in the Rogers
Secondary Recovery Project in Oklahoma,
with post Balance Sheet positive results
seen in pressure build up
• Further acquisition of revenue generating
Mineral Royalty packages in the Bakken
Shale, Permian Basin and Eagle Ford Shale,
USA, delivering pleasing returns in excess
of 25% on original investment
• Post Balance Sheet date, successful
Moccasin 1-13 oil discovery in Oklahoma,
now in production from the 1st Wilcox
formation with two further oil-bearing
formations to be completed
Chairman’s
Statement
2
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
Profitability continued throughout the period under review,
thanks mainly to the cash flow from our 40% interest in the
exceptional UK flagship project, Wressle. This development
continues to produce at the top end of the CPR production
profile forecast and from which revenues continued to
bolster the Company’s Balance Sheet, enabling Union Jack
to announce a net profit. Additionally, revenues from our
rapidly expanding activities in the USA for the full year
contributed to our bottom line.
The ERC Equipoise Limited (“ERCE”) CPR in respect of
Wressle and Broughton North, announced in January
2024, matched our high expectations, demonstrating a
263% increase in 2P Reserves to 2.373 million barrels of oil
equivalent (“boe”) gross, adding significant additional value
to a material project within Union Jack’s production and
development portfolio within the UK.
West Newton, another key onshore project within Union
Jack’s portfolio, with impressive Contingent Resources
reported within the RPS Group Limited (“RPS”) CPR,
is expected to see future activity.
A further UK based project, Keddington, where Union
Jack holds a 55% interest, has been the subject of material
upgrades and is in readiness for resumption of production
in the near future.
The decision made to seek further growth opportunities
in the USA, where operations can be executed unhindered
and a sensible and fair tax policy is applied, was a correct
one. Union Jack’s relationship with Reach, based in
Oklahoma, has grown over the past year and our Joint
Ventures with highly engaged partners have prospered,
especially with the success of the Moccasin 1-13 well, post
Balance Sheet date.
During 2024, Union Jack entered into a number of Joint
Ventures with Reach to drill wells in Oklahoma. The first
two wells drilled on the 45% held West Bowlegs Prospect,
the Andrews 1-17 and the Andrews 2-17, now named
the Andrews Field, are predominantly gas producers,
penetrating the primary objective, the Hunton Limestone,
one of the main hydrocarbon reservoirs in Oklahoma.
The Board has high expectations of Union Jack’s USA
ventures, guided by both Reach’s and Union Jack’s very
able technical teams, already confirmed by the success
of the Moccasin 1-13, Andrews 1-17, Andrews 2-17 and
Taylor 1-16 discoveries.
Following this initial success, Union Jack and Reach are in
the process of identifying a number of additional material
drilling targets that could deliver a dynamic drilling campaign
for the future, with a range of risks and reserves across
Southern Oklahoma.
Additional information on the Company’s projects within the
UK and USA can be found within the Operational Review.
FINANCIAL HIGHLIGHTS
• Gross profit of £1,968,101 (2023: £3,298,844)
• Net profit of £649,213 (2023: £859,089)
• Basic earnings per share 0.61 pence
(2023: 0.79 pence)
• Oil and gas revenues £3,929,722
(2023: £5,065,679)
• The Company continues to be debt free
CHAIRMAN’S STATEMENT
3
www.unionjackoil.com
The 12 month period under review has, for the third
consecutive year, seen Union Jack remain a cash generating
and profitable entity.
Revenues from oil and gas sales of £3,929,722 (2023:
£5,065,679) reported for the period continued to have
a positive effect on the Income Statement, resulting
in the Company being able to report a gross profit of
£1,968,101 (2023: £3,298,844), and net profit of £649,213
(2023: £859,089).
Basic Earnings per share of 0.61 pence were reported
(2023: 0.79 pence).
The Company has a policy of returning cash to shareholders
when deemed appropriate.
Since the commencement of our dividend policy and share
buy-back programme, approximately £3,000,000 has been
returned to shareholders.
The Company holds 6,300,000 ordinary shares in Treasury
which increase the Earnings Per Share, hold no voting rights
and are not entitled to a dividend payment.
To increase the Company’s corporate visibility in the USA,
in April 2024, Union Jack’s ordinary shares were admitted
to trading on the OTCQB Venture Market (Ticker: UJOGF).
The Board believes that dual trading of the Company’s
shares on AIM and the OTCQB will provide enhanced
investor benefits, which include easy trading access for
investors based in the USA and increased liquidity, due
to a broader geographic pool of potential investors.
Ray Godson made the decision to step down from the
Board of Union Jack at the 2024 AGM and Craig Howie
joined the team as an independent non-executive director
during April 2024. Craig has over 20 years of City and
advisory experience, especially within the oil industry
and is well known within his peer group in respect of his
knowledge of oil enterprises, both junior and major.
Further information can be found on the Company’s
website www.unionjackoil.com, presenting detailed technical
information on Union Jack’s projects and designed to inform
shareholders and attract new investors to the Company.
In addition, Union Jack hosts a growing and active
X account @unionjackoilplc.
CORPORATE AND FINANCIAL
CHAIRMAN’S STATEMENT
4
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
The Board’s confidence has once again been supported by
the Company’s profitable 2024 financial results, confirming
its resilience, both financially and operationally.
In the UK, Union Jack will remain focused on the
development of its flagship project, Wressle, where the
Operator and Joint Venture partners have high-value
appraisal and development programmes planned for the
future, in particular the unlocking of the material proven
reserves of oil and gas that remain in place within the
Penistone Flags formation. The Board is confident that
within the Wressle development there remains significant
upside which will support the Company with revenues
for at least another decade.
I also look forward to progress at West Newton.
Encouragingly, the results from this key project, to date,
signal a potentially highly valuable onshore project with
resources comparable to those usually reported offshore.
A significant onshore domestic gas resource, as indicated at
West Newton, has the potential to become an important
transition fuel in helping the UK achieve its 2050 Net Zero
emissions target.
At time of writing, Keddington is expected to be, following
site upgrades, close to being operational and poised to
deliver the Company additional revenues.
Union Jack’s initial success in the USA over the past 12
months, highlights the ease of entry and ability to execute
our business in that country, justifying the Board’s decision
to seek further growth opportunities internationally to
bolster the Company’s robust production and appraisal
assets in the United Kingdom.
Our appetite for additional growth opportunities has
been whetted by our recent positive experiences in the
USA and discussions are at an advanced stage with Reach
in respect of expanding our activities over the coming
months and beyond.
I believe the Board’s optimism in our further expansion
in the USA, executed alongside a proactive drilling and
development campaign, will deliver material rewards in
due course.
I am confident that the increase in drilling, appraisal and
development activity being evaluated in the pursuit of
growth from our balanced UK and USA portfolios has the
potential for notable value creation for shareholders. We
believe our heightened activity and the expected additional
news-flow generated, combined with effective investor
engagement on both sides of the Atlantic, will continue to
attract the ongoing support of our existing shareholders
and the attention of new investors, broadening the appeal
of the Company to a wider audience.
The Company retains a strong Balance Sheet and a clear
focus on the development of its assets both in the UK and
the opportunity-charged USA. This includes a balanced
portfolio of Mineral Royalties, along with the production
assets that are now assembled, that are expected to
contribute meaningful revenue and growth opportunities
going forward.
I take this opportunity to thank our shareholders for
their continued support, as well as my co-directors and
advisers, both in the UK and USA, all of whom continue
to contribute towards the development and growth of
the Company.
The future of Union Jack remains bright.
David Bramhill
Executive Chairman
16 May 2025
OUTLOOK
CHAIRMAN’S STATEMENT
5
www.unionjackoil.com
Wressle is located in Lincolnshire, on the western margin
of the Humber Basin and is one of the most productive
conventional producing onshore oilfields in the UK.
The Wressle-1 (“Wressle”) discovery was defined on
proprietary 3D seismic data. The structure is on trend
with the Crosby Warren oilfield and the Broughton North
Prospect, both located to the immediate northwest and
the Brigg-1 discovery to the southeast. These wells contain
hydrocarbons in several different sandstone reservoirs
within the Upper Carboniferous succession. The majority
of the Broughton North Prospect is covered by the same
3D seismic survey to that of the Wressle field.
Since the proppant squeeze and coiled tubing operations
conducted during August 2021, Wressle has established
itself as Union Jack’s key project with initial production rates
far exceeding original expectations. Wressle has generated
revenues in excess of US$23,000,000 net to Union Jack
before taxes, allowing the Company to be self-sustaining for
almost four years. To date, over 700,000 barrels of high-
quality oil have been produced and sold from Wressle.
During the period, Wressle produced on constrained
flow an average of 416 barrels of oil per day (“bopd”),
Union Jack net 166.4 bopd.
•
Average oil price of US$80.76
•
Average water cut of 32%
•
Site downtime of 14 days
Water produced is easily managed and disposed of at a
nearby facility.
Production during 2023 was at the higher rate, however,
due to initial water breakthrough a down-hole jet pump
was installed which operates within regulatory controls.
In early January 2024, the Joint Venture partnership
published the results of a CPR compiled by ERCE for
Wressle and Broughton North Prospect.
The highlights of this CPR are as follows:
•
263% increase in 2P Reserves
•
Reclassification of 1,883 mboe in Penistone Flags
Contingent Resources to 2P Reserves
•
59% upgrade to the Ashover Grit and Wingfield Flags
Estimated Ultimate Recoverable
•
23% upgrade to Broughton North Prospective 2U
Resources
WRESSLE DEVELOPMENT
PEDL180 AND PEDL182 (40%)
WRESSLE IS ONE OF THE MOST
PRODUCTIVE CONVENTIONAL
ONSHORE OILFIELDS IN THE UK
AND HAS GENERATED IN EXCESS OF
US$23,000,000 IN REVENUES SINCE
RECOMMENCEMENT OF PRODUCTION
IN AUGUST 2021
OPERATIONAL
REVIEW
6
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
CPR Wressle Gross Oil and Gas Reserves (mboe)
Category
Gross Reserves
1P
2P
3P
2016 CPR
303
655
1,356
Added
–
–
–
Produced to
30 June 2023
(519)
(519)
(519)
Revisions
258
354
403
Reclassified
864
1,883
3,647
2023 CPR
906
2,373
4,887
Reserves Change
199%
263%
261%
Note: One barrel of oil equivalent (“boe”) is equal to 5,714
standard cubic foot (“scf”) of natural gas
CPR Broughton North Gross Oil and Gas
Prospective Resources (mboe)
Category
Gross Unrisked Prospective
Resources
1U
2U
3U
2016 CPR
180
494
1,156
Added
–
–
–
Produced to
30 June 2023
–
–
–
Revisions
33
114
376
Reclassified
–
–
–
2023 CPR
213
608
1,532
Planning consent was received for the development plan
during September 2024, which included the drilling of
two new wells and the installation of a gas pipeline and
processing equipment. However, the North Lincolnshire
Council’s decision to grant planning was subsequently
rescinded following a third-party challenge in light of the
Finch Supreme Court judgement.
The Operator, Egdon Resources U.K. Limited, on behalf
of the Joint Venture partners, has subsequently completed
the newly required Scope 3 emissions report such that the
planning application for further development of the Wressle
field can be re-assessed.
The Board believes that the Company’s interest in Wressle
will continue to deliver significant revenues for at least the
next decade. The Board looks forward to the remainder of
2025 and beyond with enthusiasm and expect to crystallise
the additional value of this primary asset as soon as the
required approvals are received.
WRESSLE CONTINUES TO PRODUCE
AT THE TOP END OF THE CPR
PRODUCTION PROFILE FORECAST
PEDL241
Crosby Warren
WRESSLE 1
HIBALDSTOW 1
Scrawby
WRESSLE
Scunthorpe
BRIGG 1
NORTH KELSEY
PROSPECT
PEDL180
GLANDFORD 1
BROUGHTON 1
BROUGHTON NORTH
PROPECT
PEDL182
OPERATIONAL REVIEW
7
www.unionjackoil.com
PEDL183 is located onshore UK, north of the River
Humber, encompassing the town of Beverley, East
Yorkshire. The licence area is within the western sector
of the Southern Zechstein Basin.
The West Newton A-2 and B-1Z drilling programmes
have yielded substantial hydrocarbon discoveries within
the Kirkham Abbey formation.
The table below notes the West Newton gross unrisked
technically recoverable sales volumes as calculated
by independent engineers RPS Group Limited (“RPS”)
in late 2022.
Category
Gross Technically Recoverable
Gas (bcf)
Liquids (mbbl)
1C
99.7
299.4
2C
197.6
593.0
3C
393.0
1,178.9
Laboratory reports confirm that the hydrocarbon-bearing
Kirkham Abbey reservoir is extremely sensitive to aqueous
fluids and that previous drilling of the West Newton wells
with water-based mud had created near well-bore damage,
affecting the natural porosity and permeability of the
formation, which in turn had a detrimental effect on its
ability to flow. Further analyses have concluded that the
use of dilute water-based acids during well testing would
have also affected the flow characteristics of the Kirkham
Abbey reservoir.
A Gas Export feasibility study was undertaken and
completed during Q2 2024 by independent energy
consultants CNG Services Limited (“CNG”).
CNG concluded that an initial single well development and
gas export plan is economically and technically feasible,
allowing for advanced production and cash flow with
relatively modest capital expenditure.
First gas production is planned to be from a single
horizontal well, processed through a modular plant, tied in
from the West Newton A site to the National Transmission
system via an overground pipeline.
WEST NEWTON Development
PEDL183 (16.665%)
OPERATIONAL REVIEW
8
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
The North Sea Transition Authority (“NSTA”) has approved
a revised work programme for PEDL183, allowing progress
in the most efficient manner.
The revised minimum work programme is subject to
regulatory and other approvals.
Expectations are that the Joint Venture partners will approve
the recompletion of the A2 well as this is deemed the best
low-risk and low-cost approach to de-risk the project.
Commercial gas production could be brought to market
within months of a successful well test whilst additional
activity is carried out on the further development of
West Newton.
The Operator, Rathlin Energy, has been informed by the
Environment Agency that its application on behalf of the
Joint Venture partners has been ‘Duly Made’ and further
updates will be provided in due course.
GaffneyCline Associates, an international petroleum
consultancy has compiled a Carbon Intensity Study in
respect of the gas resource at West Newton resulting
in an AA Rating, the lowest possible carbon intensity
grade on that company’s rating scale, for its potential
gas and upstream production.
Union Jack believes investors will only wish to provide
finance to companies and projects that support a
transition to a low-carbon economy. As part of the
Company’s ongoing strategy in respect of the environment,
Union Jack commits to be totally transparent in respect
of its projects and on how its carbon management practice
is implemented.
The Joint Venture partners continue to plan the most
efficient and economic method to convert the impressive
West Newton Contingent Resource into a viable
hydrocarbon development within an acceptable time frame.
A future West Newton development will benefit from
being located in an area that provides access to substantial
local infrastructure and could deliver significant volumes of
onshore low-carbon sales gas into the UK’s energy market.
GREAT
HATFIELD 1
WEST
NEWTON
ELLERBY
PROSPECT
SPRING HILL
PROSPECT
WITHERNSEA
PROPECT
WINESTEAD 1
RISBY 1
CRAWBERRY HILL 1
Hull
Immingham
Easington
Beverley
PEDL183
A2
A1
B1Z
B1
THE JOINT venture PARTNERS
CONTINUE TO PLAN THE MOST
EFFICIENT AND ECONOMIC METHOD
TO CONVERT THE IMPRESSIVE WEST
NEWTON CONTINGENT RESOURCE
INTO A VIABLE HYDROCARBON
DEVELOPMENT WITHIN AN
ACCEPTABLE TIME FRAME
OPERATIONAL REVIEW
9
www.unionjackoil.com
KEDDINGTON
PEDL005(R) (55%)
The Keddington oilfield is located along the highly
prospective East Barkwith Ridge, an east-west structural
high on the southern margin of the Humber Basin.
During 2024, a major upgrade of the site’s production
facilities and bund area was undertaken and is planned
to reach completion during May 2025. Production from
Keddington will be reinstated in the very near future
where oil production rates and reliability are anticipated
to increase dramatically, especially with early flush
production expected.
A technical review by the Operator has confirmed that
there remains an undrained oil resource located on the
eastern side of the Keddington field. Planning consent for
further drilling is already in place, presenting an opportunity
to increase production via a development side-track from
one of the existing wells.
To facilitate confirmation of the target definition and well
design planning, re-processing of legacy 3D seismic data
has been completed.
The Operator’s modelling indicates that infill drilling is
forecast to improve recovery from the Keddington field
by between 113,000 to 183,000 barrels of oil, depending
on the reservoir permeability model selected and the
combination of infill targets.
The sub-surface target of a step-out well has been identified
and it is planned to drill the well, where planning consent
is already granted, when macro-economic conditions are
favourable.
CHAIRMAN’S STATEMENT
THE UPGRADED KEDDINGTON
OILFIELD IS EXPECTED TO BE
COMMISSIONED IN THE NEAR
FUTURE AND OIL PRODUCTION
RATES ALONG WITH EFFICIENCY
ARE EXPECTED TO INCREASE
DRAMATICALLY
OPERATIONAL REVIEW
10
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
BISCATHORPE
PEDL253 (45%)
PEDL253 is situated within the proven hydrocarbon fairway
of the South Humber Basin and is on-trend with the
Keddington oilfield and the Saltfleetby gasfield.
While drilling the Biscathorpe-2 well, there were
hydrocarbon shows, elevated gas readings and sample
fluorescence observed over the entire interval from
the top of the Dinantian to the total depth of the well,
with 68 metres being interpreted as being oil-bearing.
Independent consultants APT also conducted analyses,
confirming a hydrocarbon column of 33-34 API gravity
oil, comparable with the oil produced at the nearby
Keddington oilfield.
Further evaluation of the results of the Biscathorpe-2 well,
together with the reprocessing of 264 square kilometres of
3D seismic, indicate a potentially material and commercial
hydrocarbon resource that remains to be appraised.
A side-track well is planned, targeting the Dinantian
Carbonate where the Operator has assessed, in accordance
with the PRMS Standard, a gross Mean Prospective
Resource of 2.55 million barrels of oil (“mmbbl”). The
overlying Basal Westphalian Sandstone has the potential
to add gross Mean Prospective Resources of 3.95 mmbbl.
Economic modelling demonstrates that the Westphalian
target remains economically robust in the current oil
price environment.
During November 2023, the Planning Inspectorate upheld
the appeal against the refusal of planning permission
by Lincolnshire County Council for a side-track drilling
operation, associated testing and long-term oil production
at the Biscathorpe-2 wellsite.
Due to the ramifications of the ‘Finch Case’ the successful
planning appeal decision was overturned following a judicial
review and the Planning Inspectorate is arranging a new
appeal process.
Union Jack’s technical team believe that Biscathorpe remains
one of the largest unappraised conventional onshore
discoveries within the UK.
PEDL5
PEDL5
SCUPHOLME 1
KEDDINGTON
KELSTERN 1
BISCATHORPE 2
SALTFLEETBY
BISCATHORPE 1
PEDL253
PEDL334
BISCATHORPE
PROSPECT
NORTH KELSEY
PEDL241 (50%)
North Kelsey is a conventional oil exploration prospect on
trend with, and analogous to Wressle. The prospect has
been mapped from 3D seismic data and has the potential for
oil in four stacked Upper Carboniferous reservoir targets.
The Operator, Egdon Resources U.K. Limited has
recently completed an updated resource assessment
for the North Kelsey prospect. This work is pending
review by Union Jack.
Should the Joint Venture partners decide to drill an
exploration well, a new planning application will be
submitted to Lincolnshire County Council to enable the
prospect to be drilled to assess the resource potential.
OTHER LICENCE
INTERESTS
Union Jack has interests in a small number of other
non-core projects, EXL294 Fiskerton Airfield
and PEDL209 Laughton, where its interests in
these licences have all been fully impaired.
Fiskerton Airfield (EXL294) is currently shut in. Longer
term potential for the site is to manage produced water
through the existing water injection well on site.
During the year, PEDL118 Dukes Wood and PEDL203
Kirklington were relinquished and the Company
is in the process of relinquishing PEDL209.
OPERATIONAL REVIEW
11
www.unionjackoil.com
For numerous reasons, including the punitive Energy Profit
Levy of 38% imposed on profits generated within the
UK and totally unacceptable planning delays, the Board
commenced the execution of a plan to seek growth
opportunities in regimes with sympathetic views towards
the hydrocarbon industry, without compromising global
environmental objectives and the aim of achieving net zero
emissions by 2050.
The Board of Union Jack saw significant potential for growth
in the USA and in late 2023 embarked on a programme of
rapid expansion where in the timeframe of just over one
year the Company has:
•
Material ownership stakes in numerous drilling,
development and production projects
•
Formed a drilling partnership with Reach
•
Built a quality, cash generating, Mineral Royalty portfolio
in the Permian Basin, Bakken Shale and Eagle Ford Shale
•
Material cash flows from operations
•
Formed relationships with an excellent team of advisers
Union Jack’s drilling partners Reach, established in 2018,
are a quality, accredited private company operating
numerous oil and gas producing facilities in Seminole
and Pottawatomie Counties in Oklahoma, USA.
Reach was formed by Miles Newman and Isabel Davies,
successful explorationists with prominent O&G experience
and Jim McKenny, a hydrocarbon expert specialising
in advanced seismic acquisition and processing in the
US mid-continent.
Union Jack harbours enterprising plans in the USA going
forward with its partnership with Reach.
UNITED STATES OF AMERICA
STRATEGIC GROWTH AND
EXPANSION PLAN
NORTH
DAKOTA
OKLAHOMA
TEXAS
OPERATIONAL REVIEW
12
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
During January 2024, the Company signed a farm-in
agreement with Reach to acquire a 45% interest in the
West Bowlegs Prospect, located in Seminole County,
Oklahoma, USA, on which two exploration wells
were successfully drilled and are now known as the
Andrews Field (“Andrews”).
Andrews, comprising of the Andrews 1-17 and Andrews
2-17 discovery wells, drilled and completed during 2024,
are predominantly gas producers with associated oil from
the Hunton Limestone formation (“Hunton”), one of the
main hydrocarbon reservoirs in Oklahoma.
The Hunton, the primary objective for the Andrews wells,
is a prolific, producing hydrocarbon reservoir in Oklahoma,
which is unconformably overlain by the main oil-prone rock,
the Woodford Shale.
The Andrews wells confirmed the presence of the primary
objective, showing high porosity with elevated gas readings
with good reservoir qualities being interpreted on the
wireline logs. Subsequently both wells were completed
and put onto production.
Since the commencement of production, the Andrews Field
has produced and sold over 50,000,000 cubic feet of clean
natural gas and 10,000 barrels of high-quality oil with an
average API of 45.5 degrees.
In-house assessment of gas reserves by the Operator,
Reach, is that over 1.2 billion cubic feet of recoverable gas
remain in place with an estimated field life of approximately
20 years.
OPEX costs associated with Andrews are remarkably low,
currently at approximately US$3,500 per month, translating
into production costs of less than US$5 per barrel of oil
equivalent (“boe”) and driving healthy operating netbacks.
The West Bowlegs drilling, the Company’s first operating
venture in the USA, was a commercial success and an
excellent start for Union Jack in its initial enterprise with
Reach and met the Board’s criteria of acquiring material
interests in near-term, low-cost drilling projects being
capable of quickly adding cash-flow.
WEST BOWLEGS PROSPECT ANDREWS 1-17
AND ANDREWS 2-17 DISCOVERY WELLS
OKLAHOMA – THE ANDREWS FIELD
(45%)
THE WEST BOWLEGS DRILLING,
the FIRST OPERATING VENTURE
IN THE USA RESULTING IN A
COMMERCIAL SUCCESS WAS AN
EXCELLENT START FOR UNION JACK
IN ITS INITIAL drill programme
WITH REACH
OPERATIONAL REVIEW
13
www.unionjackoil.com
MOCCASIN 1-13 DISCOVERY
(45%)
The Moccasin 1-13 well (“Moccasin”), located in
Pottawatomie County, Oklahoma and declared a commercial
discovery was drilled to Total Depth of 5,690 feet to test
a dip and fault closed structure, mapped from 3D seismic,
downthrown on the west side of the Wilzetta Fault.
Moccasin was an untested structural prospect with several
targets, both primary and secondary. The structure was a
compressive feature, associated with the Wilzetta Fault. This
strike slip-fault was active through the Ordovician to early
Carboniferous periods and is responsible for several large
oil accumulations. The Woodford Shale, the main source
for light oil across the region, is present within the Moccasin
structure and between the primary reservoir targets.
Several potential oil-bearing intervals were highlighted on
electric logs as hydrocarbon bearing following appraisal.
The primary objective, the 1st Wilcox formation, was
perforated, tested and confirmed as a significant oil producer.
Initial open hole average flow rate was over several test
periods and a number of days was recorded at 25.88 barrels
of oil per hour, equating to over 600 barrels of oil per day.
Moccasin is currently being evaluated and is on test
production, producing at a highly constrained rate of circa
80-100 barrels of oil per day, prior to determining the rate
for maximum ultimate oil recovery.
Permanent production facilities have been installed,
comprising oil storage tanks, separator and flowlines
and light crude oil with an API of 32 degrees is being
sold. To date, over 3,000 barrels of oil have been
produced and sold whilst testing.
Two other secondary zones, the Red Fork and the
Bartlesville Sandstones will be perforated and tested
in due course.
Based on current flow rates, Moccasin is expected to
provide material revenues to the Company going forward.
The success of Moccasin has opened a raft of new and
compelling opportunities in Oklahoma for the Company.
The Company signed a farm-in agreement with Reach
to acquire a 75% interest in a high-impact well, Diana-1,
planned to be drilled at a future date to test the Footwall
Fold Prospect in the Wilzetta Fault play, a proven oil
producing location and in an area of associated interest.
The prolific Wilzetta Fault plays are the sites of numerous
oilfields across Central Oklahoma which include:
•
North-East Shawnee field, three miles south of the
Prospect, which has produced more than 5,800,000
barrels of oil to date
•
West Bellmont field, adjacent to the Prospect, which
has produced more than 580,000 barrels of oil to date
•
Arlington Field, ten miles north-east of the Prospect,
which has produced more than 1,800,000 barrels
of oil to date
Typical wells drilled in the Wilzetta Fault can produce
approximately 250 barrels of oil per day providing pay-back
within three months.
The Diana-1 well will be drilled to a depth of 6,000 feet
where the prospect integrity is supported by recently
reprocessed 3D seismic data.
WILZETTA FAULT PLAY AND DRILLING IN OKLAHOMA
(75%)
OPERATIONAL REVIEW
14
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
The Rogers enhanced oil recovery project is located
approximately two kilometres from the Andrews Field
and is planned to materially increase delivery from the
S&M and Rogers, two legacy production wells.
Base-case secondary recovery volumes calculated by the
Operator, Reach, suggest that up to a further 124,000
barrels of oil can be recovered. Union Jack believes the
project economics are attractive, indicating future gross
revenues at prevailing oil and gas prices of approximately
US$5.0 million with a remarkable IRR approaching 60%.
Water produced from the Andrew 1-17 well is being
injected into the Coker well and reservoir pressure is being
rebuilt. Signs are encouraging with a small amount of oil and
gas having been recovered.
ROGERS SECONDARY RECOVERY PROJECT
(45%)
The Taylor 1-16 well (“Taylor”), located in Seminole County,
Oklahoma, was drilled to a Total Depth of 4,577 feet and
encountered the Hunton, Misner and Cromwell Sand
formations.
The Cromwell was perforated and returned oil which has
been sold to market. To enhance production, the well will
need to undergo a hydraulic fracturing operation.
The Hunton, following perforation was confirmed to be
oil bearing and lifting measures for production are being
considered.
Going forward, work will be carried out on the Cromwell
later in 2025 and the Hunton will be added back to
production in due course.
TAYLOR 1-16 WELL
(45%)
OPERATIONAL REVIEW
15
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MINERAL ROYALTIES
During late 2023 and early 2024, Union Jack acquired
six quality Mineral Royalty packages, all brokered by the
Company’s Oklahoma based agent and adviser, Reach.
The Mineral Royalties portfolio delivered attractive returns
in excess of 25% by contributing revenues of £196,737
in 2024 (£35,142 in 2023) based on a capitalised value
of £783,219 at year end 2025 (£679,524 in 2023).
The general attractions of USA Mineral Royalties include:
•
Exposure to active and productive basins and some
of the largest operators in the USA
•
Monthly income with no development or operating
costs
•
Ownership in perpetuity, with no forward liabilities
or obligations
•
Royalties estimated to have a long economic life, in
some cases more than 26 years and an IRR in excess
of 25% during 2024
The Mineral Royalties assembled to date are summarised
below:
•
Cronus Unit, containing a 25 well package in the
Permian Basin, Midland County, Texas, (effective
date December 2023); the property is comprised
of nine Chevron and 16 XTO (a subsidiary of Exxon)
operated wells
•
COG Operating LLC (a subsidiary of ConocoPhillips)
operated Powell Ranch Unit, consisting of 15 wells in
the Permian Basin, Upton County, Texas (effective date
November 2023); the property is comprised of seven
horizontal and eight vertical wells
•
Occidental operated Palm Springs Unit, containing 10
horizontal wells in the Permian Basin, Howard County,
Texas (effective date January 2024)
•
Bakken Shale, a diversified 96 well interest package,
located in Dunn, McKenzie and Williams Counties,
North Dakota. Quality Operators include Burlington
Resources, Continental and Hess (effective date
March 2024)
•
Permian Basin, an eight well producing unit, located
in Howard and Borden Counties, Texas. Operated
by Vital Energy Inc, a quoted, Permian Basin focused
entity, based in Tulsa, Oklahoma (effective date
March 2024)
•
Eagle Ford Shale, a nine producing horizontal well
package, located in DeWitt County, Texas, operated
by ROCC Operating (effective date March 2024)
The Mineral Royalties also provide additional upside as
new wells are completed and drilled on the properties
at no cost to Union Jack. Chevron, one of the operators,
has publicly stated their commitment to expanding
activities in the Permian Basin.
The operators associated with the Royalties are all major
producers, ranking highly in the S&P Global (formerly
Standard & Poor’s), Fitch, and Moody credit ratings.
The Company’s intent is to expand its Mineral
Royalty portfolio as and when appropriate acquisition
opportunities arise.
ROYALTIES ARE ESTIMATED TO HAVE
A LONG ECONOMIC LIFE, IN SOME
CASES MORE THAN 26 YEARS AND
AN EXCELLENT RATE OF RETURN ON
INVESTMENT
OPERATIONAL REVIEW
16
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
Union Jack’s corporate growth in the USA during
the past 12 months has been noteworthy, marked by
planned strategic expansion and the assembly of balanced
production, development and exploration assets in
Oklahoma, leveraging on the regional proficiency of its
partners, Reach.
The appointment of key advisers in the Company’s area of
hydrocarbon operations is essential. As Union Jack expands
its presence in the USA, an integral part of the Company’s
broader strategy to enhance its operational abilities and
expand its influence within the industry is to appoint a
combined selection of like-minded professionals to assist
a smooth passage as it delivers growth in the USA.
To date, Union Jack has appointed a number of advisers,
all of whom bring specialised knowledge and insights that
align with its long-term vision of innovation, sustainable
growth and adaptability.
By integrating its advisers’ expertise into the decision
making framework, the Board is of the belief that these
appointments underscore its proactive approach to
navigating the Company’s corporate presence in the
USA and maximise the potential for continued success.
BancFirst
High interest account and banking facilities
Sidoti
Lighthouse Universe sponsored research
Harbor Access
Investor Relations Consultants
Haynes Boone
Legal Counsel
Hogan Taylor
Tax Consultants
OTC Markets
Quoted on the OTCQB under ticker UJOGF
USA CORPORATE GROWTH AND ADVISERS
OPERATIONAL REVIEW
17
www.unionjackoil.com
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
18
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
STRATEGY
The Company’s strategy is the appraisal and development
of the licence interests currently owned in the United
Kingdom and United States of America.
BUSINESS REVIEW
Union Jack Oil plc is a UK registered company, focused on
the exploration and future development of the hydrocarbon
project interests held by the Company within the UK and
the USA.
A review of the Company’s operations during the year
ended 31 December 2024 and subsequent to the date
of this report is contained in the Chairman’s Statement,
Operational Review and the Strategic Report.
The gross profit for the year amounted to £1,968,101
(2023: £3,298,844),
The net profit for the year amounted to £649,213
(2023: £859,089).
The profit for the year includes impairments to Property,
Plant and Equipment, of which total costs are £10,148
(2023: £56,829). The 2024 impairments are in relation
to EXL294.
Administrative expenses, excluding impairment costs,
amounted to £1,878,089 (2023: £2,057,506).
Cash and cash equivalents at year end amounted
to £2,527,831 (2023: £5,198,303).
Total Assets at year end amounted to £23,846,105
(2023: £24,176,606).
Non-current assets at year end amounted to £20,451,145
(2023: £17,431,036).
Intangible Assets totalled £12,417,818 (2023: £10,905,630).
Tangible assets totalled £7,691,397 (2023: £5,888,456).
Of the asset figures above, the net effect is a reduction
in capital due to a dividend payment.
The Company’s Income Statement reports revenues of
£3,929,722 (2023: £5,065,679) in respect of production
income.
During February 2024, a farm-in agreement was
announced with Reach to drill the West Bowlegs
Prospect in Oklahoma, USA.
In February 2024, the Company acquired a 75% working
interest in the Wilzetta drilling project comprising the
Diana-1 well in Oklahoma, USA.
During March 2024, the Company acquired Mineral Royalty
packages located within the Bakken Shale, North Dakota,
Permian Basin, Texas and the Eagle Ford Shale Texas,
all in the USA.
In April 2024, the Company obtained a trading facility
on the OTCQB Venture Market in the USA.
During May 2024, the Company announced the intent
to pay a 0.25 pence dividend in July 2024 to all qualifying
shareholders.
In April 2024, Craig Howie joined the Board of Union Jack
as an independent non-executive director.
During May 2024, a Carbon Intensity Study on the
West Newton gas development project, compiled by
GaffneyCline was published showing an AA rating.
In June 2024, the Company acquired a 45% interest in the
Rogers Secondary Recovery project in Oklahoma, USA.
In June 2024, Ray Godson, non executive director retired
from the Board at the Annual General Meeting.
During October 2024, planning approval for further
development at Wressle was rescinded by North
Lincolnshire Council as a consequence of the Supreme
Court Finch ruling in June 2024.
In November 2024, the Taylor 1-16 well in Oklahoma,
USA was drilled and awaits completion in the Hunton
and Cromwell formations during H1 2025.
BUSINESS & STRATEGY
Table of Key Performance Indicators
KEY PERFORMANCE INDICATORS
FOR THE YEAR ENDING
31 DECEMBER 2024
£
FOR THE YEAR ENDING
31 DECEMBER 2023
£
Revenue
3,929,722
5,065,679
Total Comprehensive Income
240,421
733,687
Cash and Cash Equivalents
2,527,831
5,198,303
Net Current Assets
3,172,066
6,356,047
Total Equity
21,870,751
21,896,746
19
www.unionjackoil.com
FUTURE DEVELOPMENTS
The directors intend to continue with the Company’s stated
strategy, reviewing the licence interests held in respect of
future viability, any potential impairment indicators that may
arise during the year and adjusting as soon as possible to
any changes that may be required in the operation of the
licence interests held.
In the UK the Company holds a number of key, quality
project interests, namely, Wressle, West Newton,
Biscathorpe, Keddington and North Kelsey, where
development, appraisal and exploration plans are in place
for the future benefit of stakeholders and the Company.
The initial success as a result of the drilling and development
of the Andrews 1-17, Andrews 2-17 (the Andrews Field),
Taylor 1-16 and Moccasin 1-13 (post Balance Sheet
date) wells is highly encouraging and further drilling and
development in the USA is planned for the future.
KEY PERFORMANCE INDICATORS
The Financial Statements for the year ended 31 December
2024, show production from Wressle and Keddington
within the UK, and the Andrews Field and Mineral Royalties
in the USA.
The Board is extremely pleased with the business
performance of the Company and notes the positive
financial figures reported within the Key Performance
Indicators table.
During the year, the Company remained profitable and
paid a dividend.
Further events which took place after the Balance Sheet
date are described in the Directors’ Report and note 23
to the Financial Statements.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
SECTION 172 STATEMENT
All large companies must include a separate statement
within their Strategic Report that explains how the
directors have had regard to broader stakeholder interests
when performing their duty under section 172 of the
Companies Act 2006, to promote the success of the
Company for the benefit of its members as a whole.
The past few years have seen intense focus and debate
on UK corporate governance. A decline in public trust in
business has been caused in part by high-profile business
failures, accusations of excessive executive pay, unethical
tax avoidance by multinational businesses and deteriorating
relationships with employees over pay and contractual
terms. These factors have led to Prime Ministerial
statements, select committee inquiries, public consultations,
a Government white paper and, ultimately, to changes in
legislation, stock exchange rules and governance codes.
Many of the matters noted have resulted from decisions
made in the board room and their effects have been felt by
employees, pension scheme members, customers, suppliers
and other stakeholders, as well as shareholders, the
interests of all of whom directors have a statutory duty
to consider when making a decision.
Under section 172, the directors have a duty to promote
the success of the Company for the benefit of the members
as a whole and, in doing so, they should have regard to
(amongst other matters) six specified areas that relate,
by-and-large, to wider stakeholder interests.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
Duty to promote the
success of the Company
for the benefit of its
members as a whole,
having regard to:
Foster business
relationships with
suppliers, customers
and others
Likely consequence
of any decision in
the long term
Act fairly as
between members
of the Company
Interests of
employees
Maintain a reputation
for high standards of
business conduct
Impact of operations
on the community
and the environment
20
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
Likely consequences of any decision in the
long-term
The Company has a clear aim which is to build a
safe, sustainable and successful onshore hydrocarbon
exploration, development and production business,
within the UK and the USA.
The Company’s activities of investment in licence interests
to explore and/or produce oil and/or gas are in general
focused on the longer term. This is particularly the case
given that the Company itself is not an operator of any
of the oil or gas fields in which it has an interest, which
means that the Board is able to focus on longer term
strategic decisions rather than day-to-day operating
decisions. The Company undertakes its strategic acquisitions
in conjunction with three JOA partners, Egdon Resources
U.K. Limited, Rathlin Energy (UK) Limited and Reach Oil
& Gas Company Inc (“Reach”) (the “JOA Partners”).
Through its financing activities and production revenues,
the Board has ensured that the Company is well
capitalised and has cash resources for all of its current
and anticipated capital requirements, to ensure that the
Company has a viable operating plan for the long-term.
Stakeholder identification and engagement
The Company recognises the importance of fostering
strong relationships with its stakeholders in order
to create sustainable long-term value, and the Board
encourages active dialogue and transparency with all
its stakeholder groups.
Business decisions are made with the needs of the
Company’s key stakeholders in mind. The Company has
identified external and internal stakeholder groups which
are principally relevant to the proper discharge of the
duty of the directors under section 172(1) to promote
the success of the Company.
Customers and suppliers
The Company does not deal directly with customers
or suppliers in relation to the oil and gas fields, save for
its relationship with the JOA Partners who operate the
relevant fields, both within the UK and the USA.
The Company’s strategy in respect of its customers and
suppliers is to ensure a sustainable relationship with its
JOA Partners.
The Company has implemented this strategy in the
following ways:
•
The Board ensures that there is a direct relationship
at Board level with the Company’s partners
•
The Board is careful to select JOA and other partners
with experience, resources and similar values to the
Company
•
The Board only invests in interests in licences where
the Company has a degree of influence over the manner
in which the operations of that block are operated
•
The Board is mindful in its decisions of the indirect
impact that the Company’s actions may have through
the activities of its operators and other partners on
suppliers, customers and others
•
The Board maintains good relations with its suppliers
by adhering to a strict policy of settling all invoices
in a timely manner
Regulators
The Company is subject to a variety of laws and regulations
both in the UK and the USA that involve matters central
to the business.
In particular, site operations in the UK are also subject
to scrutiny by the North Sea Transition Authority, the
Environment Agency and the Health and Safety Executive
before commencement. In response to regulation
in this area, the Board ensures that the Company is
partnered with JOA partners that adhere diligently to
all requirements for a safe working environment via the
Operators. For example, the JOA Partners ensure that
site personnel are subject to all health and safety measures
which include induction courses before admission to
site and the mandatory wearing of safety equipment in
order to ensure the wellbeing of site staff and visitors.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
21
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Shareholders
The Company recognises the importance of active
shareholder engagement, to enable the views of the
Company’s wider shareholder base to be considered
as part of the Board’s decision making process.
The Board has implemented this strategy in the
following ways:
•
The Board is very active in encouraging and participating
in direct dialogue with shareholders in order to ensure
the Company’s shareholders are kept regularly updated
and are able to discuss strategy and performance
directly with the Board (subject always to compliance
with legal and regulatory requirements, including
the Market Abuse Regulations (“MAR”)). This also
allows the Board to obtain a clear understanding
of shareholders’ motivations and concerns
•
The Board facilitates direct communication
with shareholders through the timely release
of regulatory news, via a regulatory information
service, which can be accessed through various
channels, including the London Stock Exchange
website www.londonstockexchange.com and
the Company’s website www.unionjackoil.com
•
The Executive Chairman and the Company’s Nominated
Adviser and Investor Relations consultants manage
investor communications. For example, there has been
recent investor speculation around junior hydrocarbon
companies and the Board recognises the particular
importance of regular, clear and timely communications
with shareholders, to ensure that they are kept updated
of major developments and potential risks in respect of
the Company and the Industry in a timely manner
•
The Board believes that shareholders are seeking a
return on their investment primarily through capital
appreciation as a result of exploration and appraisal
success. Therefore the Company ensures that work
programmes are fully funded and utilises the Board’s
technical expertise to reduce or mitigate the risk
of exploration
Employees
During the period, the Company directly employed five
people all of whom were directors of the Company. As part
of its strategy, the Board recognises that the Company’s
employees are critical to the success of the Company and
takes steps to ensure that the interests of its employees are
protected, for example:
•
The Company ensures that the employees possess
a variety of complementary experiences and skill sets,
including experience of industry-specific technical,
financial and public capital markets sectors
•
The Company has a Remuneration Committee to
review the executive directors’ remuneration packages
•
The executive directors determine the non-executive
directors’ remuneration packages
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
22
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
Impact on the environment and the community
The Company is committed to the highest standards
of health, safety and environmental protection. These
aspects command equal prominence with other business
considerations and the Board is committed to operating
the Company in a sustainable way. In particular, the Board
is keenly aware of the local environment and the inhabitants
in which the Company’s licence interests are situated.
The onshore oil and gas industry in both the UK and the
USA has an excellent record in relation to health, safety
and the protection of the environment.
The industry is also regulated by a number of statutory
bodies including the Environment Agency in England and
is recognised as being robust. Please refer to “Regulators”
within this Strategic Report for further details.
Union Jack Oil strives to understand its impact on the
environment and with the people that they engage and
work with. We are focused on providing economic benefits
to the areas in which we work, and contributing to the
energy security and supply of the countries in which we
are based.
To increase our awareness we have voluntarily chosen
to undertake a double materiality assessment, utilising
the Global Reporting Initiative (GRI) 11: Oil and Gas
sector specific guidance (see https://www.globalreporting.
org/media/0e3nzjr5/oil-gas-sector-standard-leaflet.pdf
and associated documents for more information). This
assessment can be seen on pages 26 - 27.
The desirability of the Company maintaining a
reputation for high standards of business conduct
The Company has adopted various strategies and
governance structures. The Board believes that its
reputation for high standards of business conduct will
follow from ensuring that appropriate governance
structures are in place and from taking the right decisions,
as noted within this Strategic Report. These strategies also
ensure the continued success of the Company’s business
model and response to specific risks.
The need to act fairly as between members
of the Company
As an AIM quoted company, Union Jack is subject to
governance requirements and rules (including the AIM Rules
for Companies and MAR), which are intended to ensure
that shareholders are treated fairly. The Board takes its
obligations to comply with these requirements seriously
and has regular contact with its experienced professional
advisers to ensure that these requirements are satisfied.
The directors, with the exception of independent non-
executive Craig Howie, all hold shares in the Company
and their interests are therefore aligned to those of the
other shareholders.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
23
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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 be adversely affected. However, onshore development
costs are generally 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 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. 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.
Operational: Operational events can have
an adverse effect
The main risk is the potential failure to obtain planning
permission in respect of the Company’s licence interests.
This risk is mitigated by the appointment of specialist
professional entities who work together to compile planning
applications designed to achieve a positive result.
A further potential risk is the reliance upon the Operators,
Egdon Resources U.K. Limited, Rathlin Energy (UK) Limited,
and Reach Oil & Gas Company Inc and their ability to
determine timetables and priorities which are beyond the
control of the Company.
External Risk: Lack of growth caused by political,
industry or market factors
The Company operates within the UK and the
USA. The Board considers that the UK and USA
onshore hydrocarbon arenas offer excellent value.
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 generally lower than for offshore.
The oil price environment is always being monitored,
however, the Company’s key assets are cashflow positive.
Lack of control over key assets is mitigated by the fact
that our Operators of choice, Egdon Resources U.K.
Limited, Rathlin Energy (UK) Limited and Reach Oil & Gas
Company Inc have 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 capabilities are further supported
by external consultants involved at all times and who
together participate in regular technical meetings.
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
24
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
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 project commitments.
All expenditure associated with exploration and
development assets is forecast and budgeted at least
12 months in advance. The Company could raise its funds
through the financial market by share issues, derivatives
or 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 liquidity risk, oil price risk, credit risk and
cash flow 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 would not
use derivative financial instruments for speculative purposes
and has had no requirement for their use to date.
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.
OIL PRICE RISK
The Company is exposed to oil price risk associated
with sales of oil from production. The Company does
not currently consider it necessary to use hedging
instruments to manage its exposure to this risk.
CREDIT RISK
The Company’s principal financial assets are its cash
balances. The credit risk on liquid funds is limited because
the counterparty is a bank with high credit-rating.
CASH FLOW RISK
During the year, the Company’s activities did not expose
it to financial risks of changes in foreign currency exchange
rates. Whilst oil revenues are paid in US dollars, currency
is exchanged at a spot price, unless allocated to US near
future expenditure.
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 and this
Strategic Report. The directors’ forecasts demonstrate
that the Company will meet its day-to-day working
capital and share of estimated project costs over the
forecast period being at least 12 months from the sign-
off 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 is able to operate within the level
of funds currently held at the date of approval of these
Financial Statements. 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 expectations 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
should be placed on the forward-looking statements.
On behalf of the Board
David Bramhill
Executive Chairman
16 May 2025
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
25
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MATERIALITY MATRIX – BUILDING AN UNDERSTANDING
OF OUR COMPANY IMPACTS, RISKS AND OPPORTUNITIES
Our matrix has been determined through evaluation of the 22 GRI 11 topics following the general advice and approach as
outlined in the European Financial Reporting Advisory Group (EFRAG) guidance (https://www.efrag.org).
This approach requires careful consideration of our stakeholders and the environments in which we work. For each of the
topics, we have first considered the external impacts, risks and opportunities, and then assessed the financial opportunities
and risks to our company.
As a non-operator for the assets in which we are involved, the control over these impacts, risks and opportunities can be
somewhat limited, however we are focused on working with all of our partners to deliver the best outcomes possible for
all involved.
1
GHG emissions
2
Climate adaptation, resilience, and transition
3
Air emissions
4
Biodiversity
5
Waste
6
Water and effluents
7
Closure and rehabilitation
8
Asset integrity and critical incident management
9
Occupational health and safety
10 Employment practices
11 Non-discrimination and equal opportunity
12 Forced labour and modern slavery
13 Freedom of association and collective bargaining
14 Economic impacts
15 Local communities
16 Land and resource rights
17 Rights of indigenous peoples
18 Conflict and security
19 Anti-competitive behaviour
20 Anti-corruption
21 Payments to governments
22 Public policy
ENVIRONMENTAL, SOCIAL
AND GOVERNANCE (ESG)
3
4
Impact Materiality
Double Materiality
9
11
12
14
15
7
19
20
21
22
5
10
13
16
17
18
Not Material
Financial Materiality
1
2
6
8
26
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
BUSINESS & STRATEGY
KEY FOCUS AREAS
As a result of our double materiality assessment and the
areas for which we have most control as a non-operator
of the assets, we have identified four key areas of focus
for the ESG and broader sustainability focused work
we take forward. These have been chosen as topics
where we believe we have the greatest capacity to
make improvements or to reduce/mitigate potential
negative impacts.
•
GHG emission reduction
•
Biodiversity and nature
•
Climate Adaption, Resilience and Transition
•
Local Communities and Economic Impacts
Combining our material topics with our focus areas, we
have selected five United Nations Sustainable Development
Goals to associate our efforts with. These cover the three
pillars of environment, social and governance and we will
further develop our awareness, data gathering and progress
towards these over time and as our company grows.
ENVIRONMENTAL, SOCIAL AND GOVERNANCE (ESG)
UN SDG
definition
“Promote sustained,
inclusive and
sustainable
economic growth,
full and productive
employment and
decent work for all”
“Build resilient
infrastructure,
promote inclusive
and sustainable
industrialization and
foster innovation”
“Ensure sustainable
consumption and
production patterns”
“Protect, restore and
promote sustainable
use of terrestrial
ecosystems,
sustainably manage
forests, combat
desertification, and
halt and reverse
land degradation
and halt biodiversity
loss”
“Promote peaceful
and inclusive
societies for
sustainable
development,
provide access to
justice for all and
build effective,
accountable and
inclusive institutions
at all levels“
Our
ambition
Ensure we provide a
safe, equitable and
rewarding place of
work, which benefits
the communities
with whom we
interact
Utilise new
technologies and
approaches to
energy production
and foster new ideas
within our company
Encourage our
operating partners
to reduce emissions
and other waste
sources as much as
possible across our
joint assets
Encourage our
operating partners
to understand
and respect
the interactions
with nature and
biodiversity across
our joint assets
Ensure our
operating policies
and procedures
enable fair working
approaches both
internally and
with all of our
stakeholders
SUSTAINABLE DEVELOPMENT GOALS
27
www.unionjackoil.com
28
UNION JACK OIL PLC ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
PEDL146
PEDL183
NORTH SEA
PEDL241
PEDL180
PEDL173
PL162
PL161
PEDL 169
PEDL043
PEDL161
PEDL200
PEDL202
BOTHAMSALL
FARLEYS WOOD
EAKRING
REMPSTONE
WELTON
STAINTON
SCAMPTON NORTH
SOUTH LEVERTON
SCAMPTON
BECKERING
COLD HANWORTH
EAST
GLENTWORTH
HATFIELD
HATFIELD
TRUMFLEET
WEST FIRSBY
NETTLEHAM
WHISBY
EGMANTON
CORRINGHAM
SALTFLEETBY
BECKINGHAM
NEWTON-ON-TRENT
KIRKLINGTON
PEDL012
PEDL006
ML007
PEDL090
PEDL208
PEDL204
PEDL255
PEDL254
PEDL201
PL220
PL220
ML003
PEDL140
PEDL209
PEDL182
ML004
ML004ML004
PEDL
210
PEDL
210
PEDL210
PL179
EXL294
PEDL253
PEDL005
PEDL005
PEDL005
PEDL006
PEDL007
PEDL130
PEDL043
PL162
EXL288
EXL288
PEDL
118
PEDL
203
WEST NEWTON A-1
PEDL183
West Newton
PEDL182
Broughton
North
PEDL180
PEDL182
Wressle
Oilfield
PEDL253
Biscathorpe
PEDL005(R)
Keddington
Oilfield
PEDL005(R)
North
Somercotes
Prospect
EXL294
Fiskerton Oilfield
PEDL241
North Kelsey
PEDL209
Laughton
PEDL005(R)
Louth
Prospect
10km
Gas Field
Oil Field/Discovery
Prospect
UNION JACK’S CURRENT
LICENCE INTERESTS
BUSINESS & STRATEGY
29
www.unionjackoil.com
Andrews Field
45%
Taylor 1-16
45%
Moccasin 1-13
45%
Diana 1
75%
Rogers Secondary
Recovery Project
45%
Royalties
1
PEDL180
PEDL182
Wressle
Development
Broughton North
40%
2
PEDL183
West Newton
16.665%
3
PEDL253
Biscathorpe
45%
4
PEDL005(R)
Keddington
Oilfield
Louth
North Somercotes
55%
5
EXL294
Fiskerton Oilfield
20%
6
PEDL241
North Kelsey
50%
7
PEDL209
Laughton
10%
United Kingdom
Licence Interests
United States of
America Licence and
royalty INTERESTS
30
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors present their report together with the
Financial Statements for the year ended 31 December 2024.
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 during the year, and their interests
in the shares of the Company as at 1 January 2024 and
31 December 2024, were as shown in the table below:
ORDINARY SHARES
31 December
1 January
2024
2024
D Bramhill
416,646
416,646
J O’Farrell
2,031,314
2,031,314
G Bull
20,000
20,000
C Howie
–
–
R Godson
*392,058
392,058
* R Godson holding as at 27 June 2024.
Directors who served during the year are as follows:
David Bramhill (Executive Chairman)
Joseph O’Farrell (Executive Director)
Raymond Godson (Non-executive Director)
Graham Bull (Non-executive Director)
Craig Howie (Non-executive Director)
Raymond Godson retired from the Board of Directors
at the 2023 AGM on 27 June 2024.
Craig Howie was appointed as an independent Non-
executive Director on 22 April 2024 and a resolution
for his re-election was passed at the 2023 AGM held
on 27 June 2024.
DIRECTORS’ REMUNERATION
The remuneration of the directors in office at the year end
31 December 2024 was as follows:
SALARIES AND FEES
2024
2023
£
£
D Bramhill
325,000
398,333
J O’Farrell
150,000
177,500
G Bull
50,000
57,500
C Howie
37,500
–
R Godson*
25,000
47,500
* Retired 27 June 2024
OPTIONS
2024
2023
D Bramhill
1,200,000
1,200,000
J O’Farrell
700,000
700,000
G Bull
550,000
550,000
C Howie
–
–
R Godson*
–
150,000
*R Godson retired and still retains his options as a good
leaver.
Directors’ remuneration is disclosed in note 3 to the
Financial Statements.
No options were granted to directors or officers during
2024.
Further information in respect of options can be found
in note 13(B) to the Financial Statements.
Copies of the Service Agreements in respect of David
Bramhill and Joseph O’Farrell are available for inspection
at the Company’s Registered Office. Copies of the
Letters of Appointment in respect of Graham Bull
and Craig Howie are available for inspection at the
Company’s Registered Office.
DIVIDEND
The Board declared a dividend of 0.25 pence per ordinary
share which was paid in July 2024.
GOVERNANCE
31
www.unionjackoil.com
PURCHASE OF OWN SHARES
Under section 724 of the Companies Act 2006, a company
may purchase its own shares to be held in treasury
(“Treasury Shares”). The existing authority given to the
Company at the last AGM to purchase Treasury Shares
of up to 10% of its issued share capital will expire at the
conclusion of the next AGM. The Board considers it would
be appropriate to renew this authority and intends to
seek shareholder approval to purchase Ordinary Shares
of up to 10% of its issued share capital at the forthcoming
AGM in line with current investor sentiment. Details of the
resolution renewing the authority is included in the Notice
of Annual General Meeting on page 83, within this Report.
At 31 December 2024, the Company held 6,300,000
Treasury Shares with a total nominal value of £315,000
and representing 5.58% of its issued share capital.
DIRECTORS’ RESPONSIBILITY STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
The directors are responsible for preparing the Annual
Report and 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’s Financial
Statements in accordance with UK adopted international
accounting standards (IFRSs). 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 UK adopted international accounting standards,
subject to any material departures disclosed and
explained in the Financial Statements
•
Prepare the Financial Statements on a going concern
basis unless it is inappropriate to presume that the
Company will continue in business
The directors are responsible for keeping adequate
accounting records that are sufficient to show and
explain the Company’s transactions and disclose with
reasonable accuracy at any time the financial position of
the Company and enable them to ensure that the Financial
Statements comply with the Companies Act 2006. They
are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The directors are responsible for ensuring the Annual
Report and 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.
ANNUAL GENERAL MEETING
The Annual General Meeting of the Company will be held
on 27 June 2025, in accordance with the Notice of Annual
General Meeting on page 83. Details of the resolutions to
be passed are included in the notice.
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
32
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
DIRECTORS’ REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
EVENTS AFTER THE BALANCE SHEET DATE
The following events have taken place after the year end:
During January 2025, the Moccasin 1-13 well (Moccasin),
located in Pottawatomie County, Oklahoma, USA was
spudded and drilled to a Total Depth of 5,690 feet.
Moccasin penetrated the primary objective, the 1st Wilcox
and two other secondary zones, the Bartlesville and Red
Fork Sands.
Subsequently the 1st Wilcox was perforated and the
formation flowed at an open hole rate equating to
621 barrels of oil per day.
Moccasin is now in test production under a restricted
choke.
The Bartlesville and Red Fork sands await completion.
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 13(A) to the Financial
Statements.
DISCLOSURE OF INFORMATION
TO THE AUDITOR
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
•
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
A resolution to reappoint Crowe U.K. LLP will be proposed
at the forthcoming Annual General Meeting.
COMPANY NAME AND REGISTERED NUMBER
The registered number of Union Jack Oil plc is 07497220.
On behalf of the Board
David Bramhill
Executive Chairman
16 May 2025
GOVERNANCE
33
www.unionjackoil.com
CORPORATE GOVERNANCE REPORT
The Company’s securities are traded on the AIM market
of the London Stock Exchange and the OTCQB Venture
Market in the USA.
The London Stock Exchange requires all AIM listed
companies to adopt and comply with a recognised
corporate governance code.
The Corporate Governance Report has been prepared
by David Bramhill, the Executive Chairman of the
Company, and has been approved by the Company’s
board of directors (the “Board”) in accordance with the
recommendations of the 2018 Quoted Companies Alliance
Corporate Governance Code (the “Code”), as that is the
edition of the Code that Union Jack has to comply with
in respect of 2024.
This statement explains how the 10 principles of the Code
are applied by the Company and where the Company
departs from the Code, an explanation of the reasons
for doing so is provided.
The Company holds interests in a number of onshore UK
hydrocarbon licences which are managed and operated
by one of two Joint Operating Agreement Partners (“JOA
Partners”), being Egdon Resources U.K. and Rathlin Energy
(UK) Limited. Onsite operational matters in the UK are
managed by the relevant site operator, which will be either
one of the two JOA Partners (“the Operators”). In the
USA, the Company also has a number of Joint Venture
agreements with Reach Oil & Gas Company Inc in respect
of numerous drilling projects.
QCA Code principle and
summary explanation
Application by the Company
Principle 1
Establish a strategy and
business model which
promotes long-term
value for shareholders.
The Board must be able to
express a shared view of the
Company’s purpose, business
model and strategy.
It should go beyond the simple
description of products and
corporate structures and set
out how the Company intends
to deliver shareholder value in
the medium to long-term.
It should demonstrate that the
delivery of long-term growth is
underpinned by a clear set of
values aimed at protecting the
Company from unnecessary
risk and securing its long-term
future.
The primary objective of the Company is to build a safe, sustainable and successful
conventional onshore hydrocarbon exploration, development and production
business, which the Board seeks to deliver through the acquisition of, and subsequent
investment in, carefully selected licence interests. In the UK, the company undertakes
this in conjunction with the JOA Partners. In the USA, the Company has a number of
Joint Venture agreements with Reach Oil & Gas Company Inc in respect of numerous
drilling projects.
The Company’s strategy is the appraisal and exploitation of the assets currently
owned. Simultaneous with this process, the Board expects to continue to use its
expertise and cash resources to acquire further or expand licence interests and
production in the UK and the USA.
The Board is optimistic about the prospect of delivering shareholder value in
the medium to long-term via the acquisition and increased interest in various
high impact licence areas with proven reserves, contingent resources and drill-ready
prospects.
The Board is acutely aware of the risks associated with hydrocarbon exploration,
development and production and seeks to mitigate the risk of exploration by having
interests in a portfolio of petroleum licences, and so not being overly exposed to
any single asset.
The Company’s strategy is underpinned by a well-balanced and diverse onshore
UK and USA asset portfolio, ensuring the relevant components of production,
development, appraisal and discovery are all in place, as is adequate and prudently
sourced funding for the Company’s commitments going forward.
The key challenges in the execution of the Company’s business model and strategy
are referred to within the Strategic Report.
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
34
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 2
Seek to understand and
meet shareholder needs
and expectations.
Directors must develop a
good understanding of the
needs and expectations of all
elements of the Company’s
shareholder base.
The Board must manage
shareholder expectations and
should seek to understand
the motivations behind
shareholder voting decisions.
Since the Company’s incorporation in January 2011, members of the Board have
been very active in encouraging and participating in direct dialogue with shareholders
in order to ensure the Company’s shareholders are kept regularly updated and are
able to discuss strategy and performance directly with the Board (subject always
to compliance with legal and regulatory requirements, including the UK version of
the Market Abuse Regulation (“MAR”)). This also allows the Board to obtain a clear
understanding of shareholders’ motivations and concerns.
Direct communication with shareholders is achieved primarily through the
timely release of regulatory news, via a regulatory information service, which
can be accessed through various channels, including the London Stock Exchange
website www.londonstockexchange.com and the Company’s website
www.unionjackoil.com.
All shareholders are encouraged to attend the Company’s Annual General Meeting,
where the directors are available to answer questions. Investors also have access to
current information on the Company through its website and via genuine enquiries
sent to: info@unionjackoil.com.
Investor communications are managed by the Executive Chairman, in conjunction
with the Company’s Nominated Adviser and other Investor Relations entities.
Due to investor speculation around junior hydrocarbon companies, the Board
recognises the particular importance of regular, clear and timely communications
with shareholders, to ensure that they are kept abreast without delay of major
developments and potential risks in respect of the Company and the industry.
Management believes that shareholders are seeking a return on their investment
primarily through capital appreciation as a result of exploration and appraisal success.
Management prudently manages the Company to ensure that work programmes are
fully funded and uses the Board’s technical expertise to reduce or mitigate the risk
of exploration.
GOVERNANCE
35
www.unionjackoil.com
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 3
Take into account wider
stakeholder and social
responsibilities and their
implications for long-
term success.
Long-term success relies upon
good relations with a range of
different stakeholder groups
both internal (workforce) and
external (suppliers, customers,
regulators and others). The
Board needs to identify the
Company’s stakeholders
and understand their needs,
interests and expectations.
Where matters relate to the
Company’s impact on society,
the communities within which
it operates or the environment
have the potential to affect
the Company’s ability to
deliver shareholder value over
the medium to long-term,
then those matters must be
integrated into the Company’s
strategy and business model.
Feedback is an essential part
of all control mechanisms.
Systems need to be in
place to solicit, consider
and act on feedback from
all stakeholder groups.
The Board is keenly aware of the local environment and the inhabitants in which the
Company’s licence interests are situated. While the Company does not manage these
relationships directly on a day-to-day basis, the Board works with the JOA Partners
to ensure that any queries or concerns any community members may have are
swiftly addressed and, at the same time, all community members are treated with
the respect and attention they deserve.
The JOA Partners act, via the Operators, to the highest standards and operate in
a safe and conscientious manner in respect of site safety and environmental policies.
Site operations in the UK are subject to scrutiny by the North Sea Transition
Authority, the Environment Agency and the Health and Safety Executive before
commencement. The relevant site Operator adheres diligently to all requirements
for a safe working environment. All site personnel are subject to all Health and
Safety measures which include induction courses before admission to site and the
mandatory wearing of safety equipment in order to ensure the wellbeing of site staff
and visitors.
As set out above, due to the specific nature of the Company’s business, the Company
currently relies on its three key JOA Partners, Egdon Resources U.K. Limited, Rathlin
Energy (UK) Limited and Reach Oil & Gas Company Inc, who manage and operate
the Company’s licence interests on its behalf, in the UK and the USA respectively.
The Company takes very seriously its relationship with its JOA Partners and its
third party professional advisers (both of whom it sees as key stakeholders) and the
Board continues to discuss in an open, direct and constructive manner any issues and
queries which the Company’s JOA Partners may have.
The Company also acknowledges the importance of maintaining good relations with
its suppliers and creditors and it adheres to a strict policy of settling all invoices in a
timely manner.
36
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 4
Embed effective risk
management, considering
both opportunities and
threats, throughout the
organisation.
The Board needs to ensure
that the Company’s risk
management framework
identifies and addresses all
relevant risks in order to
execute and deliver strategy;
companies need to consider
their extended business,
including their supply chain,
from key suppliers to end-
customers.
Setting strategy includes
determining the extent of
exposure to the identified
risks that the Company is able
to bear and willing to take (risk
tolerance and risk appetite).
The management of the business and the execution of the Company’s strategy are
subject to a number of risks. The Board ensures risks are mitigated as far as reasonably
practicable by performing a detailed review of the issues pertaining to each significant
decision. Significant decisions are reviewed by the Board having consulted the
Company’s professional third party advisers (e.g. legal, financial or technical). The Board
formally convenes on a regular basis, either by telephone or in person, to discuss risk
management as explained in Principle 5.
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 include
operating reliance on third parties, the ability to monetise discoveries, the price of
products and the costs of exploration and/or production.
The principal risks to the Company as well as the mitigation actions by the Board
are set out below:
Strategic risk: a weak or poorly executed acquisition and development process
fails to create shareholder value. This risk is mitigated through performing a detailed
technical review, both internally by management and externally by advisers, for each
investment which includes valuation exercises on the potential return on capital invested.
Operational risk: operational events can have an adverse effect. The main risk is
the potential failure to obtain planning permission in respect of the Company’s licence
interests. This risk is mitigated by the appointment of specialist professional entities who
work together to compile planning applications designed to achieve a positive result.
Onsite operational risks are managed by the relevant site operators, Egdon Resources
U.K. Limited, Rathlin Energy (UK) Limited and Reach Oil & Gas Company Inc, who have,
to date, safety records of the highest standard.
External Risk: lack of growth caused by political, industry or market factors. The
Company operates within the UK and USA. Whilst the Board considers that both
countries’ onshore hydrocarbon arenas offer political security, the USA also provides
excellent value under a regime with a very clearly spelt out protocol, giving the
opportunity to develop assets unhindered.
Financial Risk: the lack of ability to meet financial obligations. The Company has
historically raised its funds through equity capital markets by share issues and has
not been involved in derivative instruments and debt financing to meet its financial
obligations.
Product Price Risk: due to the nature of the periodic fluctuation of oil prices, any
such adverse fluctuation could potentially have an impact on the Company’s resulting
return to its shareholders.
The Company holds Directors’ and Officers’ Liability Insurance cover and the Company
is covered by the relevant operator’s insurance policies during drilling and other
operational situations for specific projects both in the UK and in the USA.
GOVERNANCE
37
www.unionjackoil.com
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 5
Maintain the Board
as a well-functioning,
balanced team led by the
Chairman.
The Board members have a
collective responsibility and
legal obligation to promote the
interests of the Company, and
are collectively responsible for
defining corporate governance
arrangements. Ultimate
responsibility for the quality
of, and approach to, corporate
governance lies with the chair
of the Board.
The Board (and any
committees) should be
provided with high quality
information in a timely manner
to facilitate proper assessment
of the matters requiring a
decision or insight.
The Board should have an
appropriate balance between
executive and non-executive
directors and should have
at least two independent
non-executive directors.
Independence is a Board
judgement.
The Board should be
supported by committees
(e.g. audit, remuneration,
nomination) that have the
necessary skills and knowledge
to discharge their duties and
responsibilities effectively.
Directors must commit
the time necessary to fulfil
their roles.
The Board consists of two executive directors, David Bramhill and Joseph O’Farrell,
and two non-executive directors, Graham Bull and Craig Howie, who are responsible
for the management of the Company. Craig joined the Board on 22 April 2024.
Both non-executive directors are considered by the Board to be independent.
Although Graham Bull holds ordinary shares and options in the Company, these
are considered by the Board not to affect his independence and judgement.
No members of the Board have other commitments that would prevent them from
spending as much time as required to ensure the aims and best interests of the
Company are met. Any changes to directors’ commitments and interests will be
reported to and where appropriate, agreed with the rest of the Board.
The Board meets regularly in person and by telephone throughout the year. The
Board also holds frequent informal project appraisal and strategy discussions, and
meets every quarter, to review trading performance, budgets, ensure adequate
funding, set and monitor strategy, examine acquisition opportunities and assess risks
on an ongoing basis in respect of operational projects.
The directors encourage a collaborative Board culture to ensure that each decision
reached is always in the Company’s and its shareholders’ best interests and that no
one individual opinion ever dominates the decision making process. The Board seeks,
so far as possible, to achieve decisions by consensus and all directors are encouraged
to use their independent judgement and to challenge all matters whether strategic
or operational. To date all decisions have been unanimous.
During 2024, ten Board meetings, one Audit and one Remuneration Committee
meetings were held, either by telephone or in person.
Board Member
Board Meetings
Attended
(10 held in the
period)
Audit
Committee
(1 held in the
period)
Remuneration
Committee
(1 held in the
period)
D Bramhill
10
–
–
J O’Farrell
10
–
–
G Bull
8
1
1
C Howie
5
1
–
R Godson*
8
1
1
* Ray Godson retired from the Board of Directors at the Annual General Meeting
held on 27 June 2024.
There are no mandatory hours for directors to be available for Company business.
The executive directors and non-executive directors are available for any Company
business when it may arise.
The Board delegates certain decisions to an Audit Committee and a Remuneration
Committee. The Audit Committee has joint responsibility for reviewing the year end
accounts with the Auditor. The Remuneration Committee reviews the remuneration
of the executive directors on an annual basis. Both committees are dedicated to
establish and maintain robust internal financial control systems for the Company.
38
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 6
Ensure that between
them the directors have
the necessary up-to-date
experience, skills and
capabilities.
The Board must have an
appropriate balance of sector,
financial and public markets
skills and experience, as well
as an appropriate balance
of personal qualities and
capabilities. The Board should
understand and challenge
its own diversity, including
gender balance, as part of its
composition.
The Board should not be
dominated by one person
or a group of people. Strong
personal bonds can be
important but can also
divide a Board.
As companies evolve, the
mix of skills and experience
required on the Board
will change, and Board
composition will need to
evolve to reflect this change.
Succession planning has been
considered at Board level and
a strategy agreed upon.
The directors are committed
to promoting diversity and
equal opportunities and
consider the Company to
be a supportive employer.
The current Board composition of the Company and each director’s experience
is set out in this report. The Board’s view is that the directors have a variety of
complementary experiences and skillsets, including experience of industry-specific
technical, financial and public capital markets sectors. The Company believes that
the current Board of Directors collectively hold the relevant experience, skills and
personal qualities and capabilities to deliver the strategy of the Company for the
benefit of the shareholders over the medium to long-term. An overview
of the directors are as follows:
The majority of the directors have experience of working in the USA and an
understanding of the assets and their control.
David Bramhill, Executive Chairman, 74
Mr Bramhill has over 40 years’ experience in the natural resources industry.
Mr Bramhill has directed and managed several energy companies and was the former
managing director of OilQuest Resources plc, subsequently acquired by EnCore Oil
plc. Mr Bramhill was an executive director at the time of Nighthawk Energy plc’s
AIM flotation in March 2007 and a non-executive Chairman of Wessex Exploration
plc when that company floated on AIM in March 2011. He resigned from these
companies in 2010 and 2012 respectively.
Mr Bramhill had previously consulted in an engineering capacity for over 20 years
on projects for Shell, ExxonMobil, Petrofina, BP and numerous other international
energy companies.
Joseph O’Farrell, Executive Director, 73
Mr O’Farrell has over 30 years’ corporate experience in the hydrocarbon and mining
industry. He has managed several energy companies and is a former director of
OilQuest Resources plc and Nighthawk Energy plc, having been a director of these
two companies at the time of their respective flotations on AIM. He has assisted a
number of companies working in conjunction with corporate advisers in pre-IPO
fundraising and project acquisition.
Graham Bull, Non-Executive Director, 79
Mr Bull is a geologist with over 50 years’ of international oil and gas industry
exploration experience. Following graduation from the University of Leicester
in 1968 with a BSc Hons Geology, he worked in Canada and held positions with
Chevron, Dome Petroleum, Siebens Oil and Gas and Poco Petroleum and also
provided exploration expertise to a Canadian drilling fund. He returned to the UK in
1982, taking the position as Chief Geologist to Sovereign Oil and Gas plc. In addition,
Mr Bull has operated as a geological adviser for OilQuest Resources plc (subsequently
acquired by EnCore plc), Premier Oil plc, Cirque Energy and DSM Energy.
Mr Bull is a member of the Petroleum Exploration Society of Great Britain, the
American Association of Petroleum Geologists and a Fellow of the Geological Society
of London.
Mr Bull is the Chairman of the Remuneration Committee and a member of the Audit
Committee.
GOVERNANCE
39
www.unionjackoil.com
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 6 (continued)
Craig Howie, Non-Executive Director, 49
Mr Howie is an Extel-ranked financial oil and gas analyst with wide-ranging
financial markets experience and skills. Mr Howie holds several securities industry
qualifications and is a Society of Petroleum Engineers (SPE) member. Mr Howie has
held roles with Murray Johnstone Limited, Williams de Broe Plc, KPMG Corporate
Finance and Blue Oar Securities. For the past 10 years, Mr Howie had responsibility
for E&P sector research at Shore Capital, regularly producing detailed financial models
on production-led companies. In addition, Mr Howie’s proactive engagement with
corporate and institutional clients have assisted in building the business development
skills required to establish the ongoing growth of several companies.
The directors are mindful of the need to ensure the Company has in place a diverse
Board that encompasses the right skills required to ensure the Company’s continued
success, including creating an atmosphere of constructive challenge and consensus for
any decision reached. As such, and given the current size of the Company, the Board
is of the opinion its composition and skillset is sufficient to maintain and drive the
long-term success for the Company’s shareholders.
Each director takes his continued professional and technical development seriously,
so in order to ensure the Board keeps abreast of the current challenges faced by
the industry the Company operates in, the directors attend both trade shows and
technical sessions during the course of any given year.
The Board ensures it is well advised and supported by utilising a range of external
experts in various fields, and employs accountants, legal counsel, a Company
Secretary and a Nominated Adviser, in accordance with the AIM rules. On the
industry specific front, it also employs three technical consultancies:
JL Geophysics Ltd, Calderdale Geoscience Limited and Oil & Gas Advisers Limited.
JL Geophysics Ltd and Calderdale Geoscience Limited are responsible for supplying
technical advice on specific projects. Both companies work closely with non-executive
director Graham Bull and are responsible, on a permanent basis, for updating
and reviewing independently all technical information provided to the Company
on its key projects.
Oil & Gas Advisors Limited provides a financial overview in respect of due diligence
on potential project acquisitions and ongoing economics of our project interests.
Matthew Small is Company Secretary and, via Berkeley Hall Marshall Limited,
represents the Company as de facto Financial Controller, working closely with
the Executive Chairman and the Audit and Remuneration Committees.
40
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 7
Evaluate Board
performance based
on clear and relevant
objectives, seeking
continuous improvement.
The Board should regularly
review the effectiveness of its
performance as a unit, as well
as that of its committees and
the individual directors.
The Board performance
review may be carried out
internally or, ideally, externally
facilitated from time to time.
The review should identify
development or mentoring
needs of individual directors
or the wider senior
management team.
It is healthy for membership
of the Board to be periodically
refreshed. Succession planning
is a vital task for the Board.
No member of the Board
should become indispensable.
While the Board is very much aware of the needs of the Company in ensuring
effectiveness of Board performance and the periodic refreshment of the composition
of the Board, the Board believes that due to the Company’s current size and its
current corporate culture of constructive challenge and consensus on each decision
reached, the procedures already in place are sufficient for monitoring Board
performance and no external performance reviews are required at this time.
This will be kept under review.
The Board is also of the opinion that the Company has appropriate measures in place
to ensure any refreshment of the Board occurs in a timely manner, and always with
the best interests of the shareholders in mind.
The Company has adopted and discussed succession planning and the processes
by which it approaches board and other senior management appointments.
GOVERNANCE
41
www.unionjackoil.com
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 8
Promote a corporate
culture that is based
on ethical values and
behaviours.
The Board should embody and
promote a corporate culture
that is based on sound ethical
values and behaviours and use
it as an asset and a source of
competitive advantage.
The policy set by the Board
should be visible in the actions
and decisions of the chief
executive and the rest of the
management team. Corporate
values should guide the
objectives and strategy of
the Company.
The culture should be
visible in every aspect of the
business, including recruitment,
nominations, training and
engagement. The performance
and reward system should
endorse the desired ethical
behaviours across all levels
of the Company.
The corporate culture should
be recognisable throughout
the disclosures in the Annual
Report, website and any
other statements issued by
the Company.
The directors recognise that their decisions regarding strategy and risk will impact
the corporate culture of the Company as a whole and that this will impact the
performance of the Company. The Board seeks to embody and promote a corporate
culture that is based on sound ethical values as it believes the tone and culture set by
the Board impacts all aspects of the Company, including the way that employees and
other stakeholders behave.
The Company has adopted a share dealing code which is appropriate for a company
whose securities are traded on AIM and is in accordance with the requirements
of MAR.
The Board believes that, as evidenced through the disclosures made throughout
this statement, its corporate governance regime and culture are at the core
of its operations and are appropriate given the current size of the Company.
Furthermore, through its interaction with its stakeholders and in the communities
in which it operates (described above), it maintains a collaborative and constructive
dialogue that embodies a dynamic, accessible, open door and vibrant corporate
culture.
The Company’s corporate culture is monitored and assessed regularly, taking on
board immediately any changes made by AIM Rule 26 and where advisers may
advise. All financial transactions are reviewed independently by Berkeley Hall Marshall
Limited. An anti-bribery policy is in place.
The Board ensures the Company has the means to determine that ethical values
and behaviours are recognised and respected.
42
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 9
Maintain governance
structures and processes
that are fit for purpose
and support good
decision-making by
the Board.
The Company should maintain
governance structures
and processes in line with
its corporate culture and
appropriate to its:
•
Size and complexity
•
Capacity, appetite and
tolerance for risk
The governance structures
should evolve over time in
parallel with its objectives,
strategy and business model
to reflect the development
of the Company.
As disclosed throughout this statement, the Company maintains and employs robust
corporate governance practices to support an effective and collaborative Board, always
working in the best interests of its shareholders.
The roles of the individual Board members are as follows:
• The Executive Chairman, David Bramhill, is responsible for running the
business of the Board, ensuring strategic focus and direction and for managing
investor communications
• The Executive Director, Joseph O’Farrell, is responsible for assisting the
Executive Chairman to execute the Board’s strategy and coordinating corporate
finance activities
• The Non-Executive Director, Graham Bull, is a petroleum geologist and is
responsible for identifying and evaluating potential projects and to provide technical
oversight of the Company’s existing projects. Mr Bull chairs the Remuneration
Committee
• The Non-Executive Director, Craig Howie is an experienced financial
profiler. Mr Howie chairs the Audit Committee and becomes a member of the
Remuneration Committee.
Two Board committees are in place to ensure control over the Company’s financial
reporting processes and directors’ remuneration. Details of the two Board
committees are as follows:
The Audit Committee
The Audit Committee comprises Craig Howie, who acts as its Chairman, and Graham
Bull. The Audit Committee is responsible for considering a wide range of financial
matters which include the reviewing of Half Yearly and Annual Reports, discussions
with the Auditor, share placing agreements and the oversight of internal controls
and new accounting standards relevant to the Company.
This Committee also provides a forum for reporting by the Company’s auditor.
The executive directors may attend meetings by invitation.
The Remuneration Committee
The Remuneration Committee comprises Graham Bull, who acts as its Chairman,
and Craig Howie.
The remuneration of non-executive directors is determined by the executive directors.
The current executive director remuneration package comprises basic salary and share
options. Directors’ remuneration for the year is noted in the Directors’ Report in the
Company’s Annual Report.
Due to the size of the Company, it is not considered necessary to have a separate
Nominations Committee at this time. Instead this role is fulfilled by the Board
as a whole. The Board also reserves to itself the process by which a new director
is appointed.
Each committee has access to such resources, information and advice as it deems
necessary, at the cost of the Company, to enable the committee to discharge
its duties.
The Board intends that the Company’s governance structures will evolve over time
in parallel with its objectives, strategy and business model to reflect the development
of the Company.
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.
GOVERNANCE
43
www.unionjackoil.com
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
QCA Code principle and
summary explanation
Application by the Company
Principle 10
Communicate how the
Company is governed
and is performing by
maintaining a dialogue
with shareholders
and other relevant
stakeholders.
A healthy dialogue should exist
between the Board and all
of its stakeholders, including
shareholders, to enable all
interested parties to come to
informed decisions about the
Company.
In particular, appropriate
communication and reporting
structures should exist
between the Board and
all constituent parts of its
shareholder base.
This will assist:
•
The communication of
shareholders’ views to
the Board
•
The shareholders’
understanding of the
unique circumstances
and constraints faced
by the Company
It should be clear where these
communication practices are
described (Annual Report or
website).
The Company ensures:
•
A printed Annual Report is delivered to each registered shareholder, and also
made available on the Company’s website
•
A Half Yearly Report is made available on the Company’s website
•
All RNS announcements are released in a timely manner, while also ensuring
all announcements are drafted in a clear and concise fashion
The Company includes historical Annual Reports, Notices of General Meetings
and RNS announcements over the last five years on its website. The Company also
lists contact details on its website, should shareholders wish to communicate with
the Board.
The Company intends to include, where relevant, in its Annual Report, any matters
of note arising from the Audit or Remuneration Committees. A Remuneration or
Audit Committee report is not included separately within these Financial Statements.
All relevant information has been included where required.
Shareholders are actively encouraged to both attend the Company’s Annual General
Meeting and throughout the year to contact the Chairman to discuss any queries
or concerns they may have. The outcome of all shareholder votes are disclosed
in a clear and transparent manner via a RNS.
Given the size of the Company, the Board is of the opinion that no formal
communication structures are required at this time.
The Company does however:
•
Ensure continued disclosure of all items in conjunction with AIM Rule 26
on its website
•
Disclose the results of all shareholder votes once held, in conjunction with
the Company’s Annual General Meeting
•
Keep in constant communication and dialogue with its key stakeholders and JOA
partners through an accessible and open-door policy, with the Executive Chairman
acting as the key conduit. For avoidance of doubt, it is important to note that
any conversations shareholders and the Executive Chairman may have are always
conducted in accordance of what is permissible under MAR
The Company’s communication practices are set out on its website at:
www.unionjackoil.com/aim-rule-26/
44
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
THE BOARD
During the year the Board of Union Jack Oil plc consisted
of two executive directors and two non-executive
directors (three for part of the year), 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, seven
times during the year. In addition, the Board held numerous
project appraisal and strategy discussions during the year.
REMUNERATION COMMITTEE
The Remuneration Committee comprises Graham Bull,
who acts as its Chairman, and Craig Howie.
The current executive director remuneration package
comprises basic salary and share options. Directors’
remuneration for the year is noted in the Directors’ Report
and shown in note 3 on pages 66 and 67.
The remuneration of non-executive directors is determined
by the Board.
AUDIT COMMITTEE
The Audit Committee comprises Craig Howie, who acts
as its Chairman, and Graham Bull. The Audit Committee
is responsible for considering a wide range of financial
matters, which include the reviewing of Half Yearly and
Annual Reports, discussions with the Auditor, share placing
agreements and the oversight of internal controls and new
accounting standards relevant to the Company.
This Committee also provides a forum for reporting by
the Company’s Auditor. The executive directors may attend
meetings by invitation.
INTERNAL FINANCIAL CONTROL
The directors are responsible for establishing and
maintaining the Company’s internal financial control
systems. These are designed to meet the particular needs
of the Company and the risks to which it is exposed, and
by their nature can provide reasonable but not absolute
assurance against material misstatement or loss.
The key procedures that the directors have established
to provide effective internal financial controls are:
• Identification of Business Risks
The Board is responsible for identifying the major
business risks faced by the Company and for
determining the appropriate course of action
to manage these risks
• Investment Appraisal
Capital expenditure is regulated by authorisation limits.
For expenditure beyond the specified limits including
investments in exploration projects, detailed proposals
are submitted to the Board for review and sign-off
• Financial Reporting
The Company has a comprehensive system for
reporting financial results to the Board
• Audit Committee
The Audit Committee considers and determines
relevant action in respect of any control issues raised
by the external auditor
GOVERNANCE
45
www.unionjackoil.com
CORPORATE GOVERNANCE REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
CLIMATE CHANGE AND ENVIRONMENTAL
POLICY
The Company does not operate the projects in which it
has invested.
The Company’s policy is to work with the site Operators
whose vision is to provide locally derived, secure and
affordable energy to meet the UK’s evolving needs. In
addition, and in line with the international treaty on climate
change known as the Paris Agreement, the companies
that we align with must be committed to attaining Net
Zero emissions by no later than 2050. This commitment
by the Operator’s include their share of Scope 1 (direct
emissions), Scope 2 (purchase of indirect power) and Scope
3 (emissions from operated and non-operated assets).
This forms part of Union Jack’s commitment to safety,
environmental and social responsibility within the UK.
To achieve the above, our site operators have:
•
Established time bound targets that support the
ambitions of the Paris Agreement
•
Identified and pursued opportunities to minimise their
carbon footprint and greenhouse gas emissions within
their operations
•
Participated with industry and academic partners to
evaluate, identify and invest in technology and studies
that can help mitigate or offset their emissions
•
Communicated with internal and external stakeholders
in a transparent manner on their climate related
performance and their associated governance, risk
management and target setting
•
Considered carbon emissions as part of their decision-
making process across our asset portfolio to test the
robustness of investments against net zero strategy
•
Incentivised emission reduction opportunities identified
by their staff and contractors with an emphasis on
operational plant efficiency
The management of the Company has been assured that
the policies highlighted above will be continually reviewed
and updated as understanding of climate related risks, new
technologies and associated regulations evolve.
The Company’s Joint Venture partner in the USA, Reach,
state on their website www.reachoilgas.com that it is
committed to a culture of excellence.
Compliance with rules and regulations at local, state and
federal level is a critical part of the development process
at Reach.
There is direct oversight for environmental compliance
in all Reach projects.
The Company’s Environmental, Social and Governance
(“ESG”) policy is available to view on its website under
the ESG section, and is included on pages 26 and 27.
46
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
INDEPENDENT AUDITOR’S REPORT
ON THE FINANCIAL STATEMENTS
TO THE MEMBERS OF UNION JACK OIL PLC
OPINION
We have audited the Financial Statements of
Union Jack Oil plc (the “Company”) for the year
ended 31 December 2024, which comprise:
•
The Income Statement for the year ended
31 December 2024
•
The Statement of Comprehensive Income for
the year ended 31 December 2024
•
The Balance Sheet as at 31 December 2024
•
The Statement of Changes in Equity for the year
then ended
•
The Statement of Cash Flows for the year
then ended
•
The Notes to the Financial Statements,
including Principal Accounting Policies
The financial reporting framework that has been applied
in the preparation of the Financial Statements is applicable
law and UK-adopted international accounting standards.
In our opinion, the Financial Statements:
•
Give a true and fair view of the Company’s affairs
as at 31 December 2024 and of its profit for the year
then ended
•
Have been properly prepared in accordance with
UK-adopted international accounting standards
•
Have been prepared in accordance with the
requirements of the Companies Act 2006
BASIS FOR OPINION
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable
law. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit
of the Financial Statements section of our report. We
are independent of the Company in accordance with the
ethical requirements that are relevant to our audit of the
Financial Statements in the UK, including the FRC’s Ethical
Standard as applied to listed entities, and we have fulfilled
our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for
our opinion.
CONCLUSIONS RELATING TO GOING
CONCERN
In auditing the Financial Statements, we have concluded
that the directors’ use of the going concern basis of
accounting in the preparation of the Financial Statements is
appropriate. Our evaluation of the directors’ assessment of
the entity’s ability to continue to adopt the going concern
basis of accounting included:
•
Reviewing directors’ assessment of the going concern
assumption covering a period of not less than 12
months from the date of approval of the Financial
Statements
•
Enquiring of directors as to their knowledge of
events or conditions beyond the period of directors’
assessment that may cast significant doubts on the
entity’s ability to continue as a going concern
•
Reviewing the cashflow projections prepared by
directors and making an assessment of the assumptions
included therein taking into consideration the timing of
costs, scope of work programmes and oil prices
•
Performing a review of committed expenditure and
minimum spend amounts under licence agreements
and other contracts
•
Evaluating the adequacy of disclosures made in the
Financial Statements in respect of going concern
Based on the work we have performed, we have not
identified any material uncertainties relating to events
or conditions that, individually or collectively, may cast
significant doubt on the entity’s ability to continue as a going
concern for a period of at least twelve months from when
the Financial Statements are authorised for issue.
Our responsibilities and the responsibilities of the directors
with respect to going concern are described in the relevant
sections of this report.
GOVERNANCE
47
www.unionjackoil.com
INDEPENDENT AUDITOR’S REPORT
ON THE FINANCIAL STATEMENTS
TO THE MEMBERS OF UNION JACK OIL PLC
OVERVIEW OF OUR AUDIT APPROACH
Materiality
In planning and performing our audit we applied the
concept of materiality. An item is considered material if
it could reasonably be expected to change the economic
decisions of a user of the Financial Statements. We used
the concept of materiality to both focus our testing and
to evaluate the impact of misstatements identified.
Based on our professional judgement, we determined
overall materiality for the Company Financial Statements as
a whole to be £235,000 (2023: £243,000), based on 1% of
total assets. Total assets was used as the benchmark as the
Company has a mix of exploration and production assets.
A profit measure alone is susceptible to fluctuation mainly
due to periods of shut in or movements in oil prices. The
asset measure provides a stable basis for the assessment
of materiality.
We use a different level of materiality (“performance
materiality”) to determine the extent of our testing for the
audit of the Financial Statements. Performance materiality
is set based on the audit materiality as adjusted for the
judgements made as to the entity risk and our evaluation
of the specific risk of each audit area having regard to
the internal control environment. Performance materiality
was set at 70% of materiality for the Financial Statements
as a whole, which equates to £164,500 (2023: £170,000).
Where considered appropriate performance materiality
may be reduced to a lower level, such as, for related party
transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all
identified errors in excess of £11,750 (2023: £12,150).
Errors below that threshold would also be reported to
it if, in our opinion as auditor, disclosure was required
on qualitative grounds.
Overview of the scope of our audit
Our engagement was in respect of the audit of the
Financial Statements of the Company. Our audit approach
was developed by obtaining a thorough understanding
of the Company’s activities and is risk based.
Based on this understanding we assessed those aspects of
the Company’s transactions and balances which were most
likely to give rise to a material misstatement and were most
susceptible to irregularities including fraud or error.
Specifically, we identified what we considered to be areas
of increased risk and planned an audit approach to focus on
these areas accordingly. We undertook a combination of
analytical procedures and substantive testing on significant
transactions, balances and disclosures, the extent of which
was based on various factors such as our overall assessment
of the control environment, the effectiveness of controls
over individual systems and the management of specific risks.
Key Audit Matter
Key audit matters are those matters that, in our
professional judgment, were of most significance in our
audit of the Financial Statements of the current period
and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified,
including those which had the greatest effect on the overall
audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the
Financial Statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
In addition to Going Concern, noted earlier, we identified
the following Key Audit Matter. This is not a complete list
of all risks identified by our audit.
48
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
Key audit matter(S)
How the scope of our audit addressed the key audit matter
Carrying value of Oil and
Gas Assets
Refer to notes 7 and 8 to the
Financial Statements.
The Company’s oil and gas assets
amounted to £20,011,631 as of
31 December 2024. Exploration
and evaluation interests (E&E)
amounted to £12,417,318.
Property, plant and equipment
or development and producing
interests (D&P) amounted to
£7,594,313.
Given the material carrying value
of these assets, there is a risk that
the carrying value is higher than
the recoverable amount.
The assessment of the carrying
value of the oil and gas assets
under IFRS 6 and IAS 36 requires
management to apply significant
judgement and estimates.
Our work in respect of both the E&E assets and the D&P assets focused on
evaluating the directors’ impairment indicator review for both producing and
exploration licences.
We challenged the considerations made as to whether or not there were any
indicators of impairment identified in accordance with the requirements of the
relevant accounting standards. Our specified procedures are included below:
Exploration and evaluation (E&E) assets - IFRS 6 Exploration and
Evaluation of Mineral Resources
•
Understanding of the controls operating in respect of the Company’s
impairment reviews
•
Reviewing directors’ assessment of impairment under IFRS 6 and consider
whether there are any indicators of impairment
•
Obtaining and reviewing agreements and other information available during
the audit to identify any additional interests
•
Making enquiries and reviewing publicly available information as to whether the
licences are in good standing and whether the terms of the licences are being
adhered to
•
Obtaining the Company’s budget and ensuring that expenditure has been
planned to maintain licences and for future expenditure to be spent to develop
these licence areas
•
Reviewing the available resource statements to determine if there is any
evidence of impairment including publications by the respective operators
•
Reviewing board minutes for evidence of impairment
•
Assessing the adequacy of the disclosures in the Financial Statements
Development and production assets (D&P) assets - IAS 36 Impairment
of Assets
•
Understanding the controls operating in respect of the Company’s impairment
reviews
•
Reviewing directors’ assessment of impairment under IAS 36 and considering
whether there are any indicators of impairment
•
Reviewing the available resource statements to determine if there is any
evidence of impairment including publications by the respective operators
•
Confirming the consistency of the reserves and resources in the models with
the updated Competent Person reports
•
Assessing the competence and objectivity of external and internal Competent
Persons
•
Reviewing public information and Board minutes for evidence of indicators of
impairment
•
Reviewing impairment models prepared by the directors. We reviewed the
assumptions used in the value-in-use calculations prepared by the directors.
We engaged internal specialists as part of reviewing the assumptions used
in the model. considered necessary
•
Reviewing the disclosures in the Financial Statements, including the
appropriateness of key judgements and sensitivities regarding asset carrying
values and impairment
INDEPENDENT AUDITOR’S REPORT
ON THE FINANCIAL STATEMENTS
TO THE MEMBERS OF UNION JACK OIL PLC
GOVERNANCE
49
www.unionjackoil.com
OTHER INFORMATION
The directors are responsible for the other information
contained within the annual report. The other information
comprises the information included in the annual report,
other than the Financial Statements and our auditor’s
report thereon. Our opinion on the Financial Statements
does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and,
in doing so, consider whether the other information is
materially inconsistent with the Financial Statements or
our knowledge obtained in the audit or otherwise appears
to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements,
we are required to determine whether this gives rise
to a material misstatement in the Financial Statements
themselves. If, based on the work we have performed,
we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
OPINION ON OTHER MATTER PRESCRIBED
BY THE COMPANIES ACT 2006
In our opinion based on the work undertaken in the course
of our 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
•
The Strategic Report and the Directors’ Report have
been prepared in accordance with applicable legal
requirements
MATTERS ON WHICH WE ARE REQUIRED TO
REPORT BY EXCEPTION
In 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
RESPONSIBILITIES OF THE DIRECTORS FOR
THE FINANCIAL STATEMENTS
As explained more fully in the directors’ responsibilities
statement set out on page 31, the directors are responsible
for the preparation of the Financial Statements and for
being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary
to enable the preparation of Financial Statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the Financial Statements, the directors are
responsible for assessing the Company’s ability to continue
as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate
the Company or to cease operations, or have no realistic
alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE
AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about
whether the Financial Statements as a whole are free from
material misstatement, whether due to fraud or error,
and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is
not a guarantee that an audit conducted in accordance
with ISAs (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these
Financial Statements.
Irregularities, including fraud, are instances of non-
compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above,
to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are
capable of detecting irregularities, including fraud is detailed
as follows:
We obtained an understanding of the legal and regulatory
frameworks that are applicable to the Company and
the procedures in place for ensuring compliance. Based
on our understanding of the Company and industry,
discussions with those charged with governance we
identified Companies Act 2006 as having a direct effect on
the amounts and disclosures in the Financial Statements.
Our work included direct enquiry of those charged with
governance, reviewing Board and relevant committee
minutes and inspection of correspondence.
INDEPENDENT AUDITOR’S REPORT
ON THE FINANCIAL STATEMENTS
TO THE MEMBERS OF UNION JACK OIL PLC
50
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
INDEPENDENT AUDITOR’S REPORT
ON THE FINANCIAL STATEMENTS
TO THE MEMBERS OF UNION JACK OIL PLC
AUDITOR’S RESPONSIBILITIES FOR THE
AUDIT OF THE FINANCIAL STATEMENTS
(CONTINUED)
As part of our audit planning process, we assessed the
different areas of the Financial Statements, including
disclosures, for the risk of material misstatement. This
included considering the risk of fraud where direct enquiries
were made of those charged with governance concerning
both whether they had any knowledge of actual or
suspected fraud and their assessment of the susceptibility
of fraud. We considered the risk was greater in areas
involving significant estimate or judgement. Based on this
assessment we designed audit procedures to focus on
key areas of estimate or judgement, this included specific
testing of journal transactions, both at the year end and
throughout the year.
We identified the significant laws and regulations of the UK
and the USA to be those relating to the industry including,
Oil & Gas Regulations, the financial reporting framework,
tax legislation and the AIM listing rules. The Company is
subject to laws and regulations where the consequence
of non-compliance could have a material impact on
the amount or disclosures in the Financial Statements,
through the imposition of fines or litigations. These laws
and regulations include those relating to health and safety,
licensing and the environment.
Our audit procedures included:
•
Enquiry of directors about the Company’s policies,
procedures and related controls regarding compliance
with laws and regulations and if there are any known
instances of non-compliance including fraud
•
Discussions with directors to consider any known
or suspected instances of non-compliance with laws
and regulations identified by them
•
Reviewing minutes of meetings of those charges with
governance for any instances of non-compliance with
laws and regulations
•
Reviewing correspondences with regulatory and tax
authorities including HMRC and Environmental Agency
for any instances of non-compliance with laws and
regulations
•
Engaging tax specialists in the audit to assess compliance
with relevant tax laws and regulations
•
Testing the appropriateness of journal entries recorded
in the general ledger and other adjustments made in the
preparation of the Financial Statements
•
Reviewing accounting estimates for biases and Financial
Statement disclosures and agreeing to surround
information
Owing to the inherent limitations of an audit, there is
an unavoidable risk that some material misstatements
of the Financial Statements may not be detected, even
though the audit is properly planned and performed in
accordance with the ISAs (UK). We are not responsible
for preventing non-compliance and cannot be expected
to detect non-compliance with all laws and regulations.
The potential effects of inherent limitations are particularly
significant in the case of misstatement resulting from fraud
because fraud may involve sophisticated and carefully
organised schemes designed to conceal it, including
deliberate failure to record transactions, collusion or
intentional misrepresentations being made to us.
A further description of our responsibilities is available
on the Financial Reporting Council’s website at:
www.frc.org.uk/auditorsresponsibilities. This description
forms part of our auditor’s report.
USE OF OUR REPORT
This report is made solely to the Company’s members,
as a body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken
so that we might state to the Company’s members
those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and
the Company’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
Matthew Stallabrass (Senior Statutory Auditor)
for and on behalf of Crowe U.K. LLP
Statutory Auditor
London EC4M 7JW
16 May 2025
FINANCIAL STATEMENTS
51
www.unionjackoil.com
31.12.24
31.12.23
Notes
£
£
Revenue
3,929,722
5,065,679
Cost of sales - operating costs
(1,443,518)
(1,118,794)
Cost of sales - depreciation
(398,654)
(463,782)
Cost of sales - Net Profit Interest payment
2
(119,449)
(184,259)
Gross profit
1,968,101
3,298,844
Administrative expenses (excluding impairment charge)
(1,878,089)
(2,057,506)
Impairment
(10,148)
(56,829)
Total administrative expenses
(1,888,237)
(2,114,335)
Operating profit
79,864
1,184,509
Finance income
4
129,617
141,672
Royalty income
4
196,737
35,142
Profit before taxation
406,218
1,361,323
Taxation
5
242,995
(502,234)
Profit for the financial year
649,213
859,089
Attributable to:
Equity shareholders of the Company
649,213
859,089
Earnings per share
Basic (pence)
6
0.61
0.79
Diluted (pence)
6
0.60
0.79
The accompanying accounting policies and notes on pages 56 to 82 form an integral part of these financial statements.
INCOME STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
52
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
31.12.24
31.12.23
Notes
£
£
Profit for the financial year
649,213
859,089
Items which will not be reclassified
subsequently to profit
Other comprehensive income
(Loss)/profit on investment revaluation
10
(408,792)
44,984
Taxation
–
(170,386)
Total comprehensive profit for the financial year
240,421
733,687
The accompanying accounting policies and notes on pages 56 to 82 form an integral part of these financial statements.
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
FINANCIAL STATEMENTS
53
www.unionjackoil.com
31.12.24
31.12.23
Notes
£
£
Assets
Non-current assets
Exploration and evaluation assets
7
12,417,318
10,905,630
Property, plant and equipment
8
7,691,397
5,888,456
Investments
10
121,320
530,112
Deferred tax asset
5
221,110
106,838
20,451,145
17,431,036
Current assets
Inventories
11,149
21,313
Trade and other receivables
11
855,980
1,525,954
Cash and cash equivalents
12
2,527,831
5,198,303
3,394,960
6,745,570
Total assets
23,846,105
24,176,606
Liabilities
Current liabilities
Trade and other payables
19
222,894
389,523
Non-current liabilities
Provisions
20
1,688,740
1,890,337
Deferred tax liability
5
63,720
–
1,752,460
1,890,337
Total liabilities
1,975,354
2,279,860
Net assets
21,870,751
21,896,746
Capital and reserves attributable to the
Company’s equity shareholders
Share capital
13(A)
7,514,576
7,514,576
Share-based payments reserve
14
712,634
712,634
Treasury reserve
14
(1,736,700)
(1,736,700)
Accumulated profit
14
15,380,241
15,406,236
Total equity
21,870,751
21,896,746
The financial statements of Union Jack Oil plc, registered number 07497220, were approved and authorised for issue
by the Board of Directors on 16 May 2025 and were signed on its behalf by:
David Bramhill
Director
The accompanying accounting policies and notes on pages 56 to 82 form an integral part of these financial statements.
BALANCE SHEET
AS AT 31 DECEMBER 2024
54
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
The accompanying accounting policies and notes on pages 56 to 82 form an integral part of these financial statements.
Share-based
Share
payment
Treasury Accumulated
capital
reserve
reserve
profit
Total
£
£
£
£
£
Balance at 1 January 2024
7,514,576
712,634
(1,736,700)
15,406,236
21,896,746
Profit for the financial year
–
–
–
649,213
649,213
Other comprehensive profit
–
–
–
(408,792)
(408,792)
Total comprehensive
–
–
–
240,421
240,421
profit for the year
Contributions by and
distributions to owners
Dividends
–
–
–
(266,416)
(266,416)
Total contributions by
and distributions to owners
–
–
–
(266,416)
(266,416)
Balance at
31 December 2024
7,514,576
712,634 (1,736,700)
15,380,241 21,870,751
Balance at 1 January 2023
7,514,576
712,634
(214,227)
14,992,248
23,005,231
Profit for the financial year
–
–
–
859,089
859,089
Other comprehensive profit
–
–
–
44,984
44,984
Taxation
–
–
–
(170,386)
(170,386)
Total comprehensive
–
–
–
733,687
733,687
profit for the year
Contributions by and
distributions to owners
Dividends
–
–
–
(319,699)
(319,699)
Treasury shares
–
–
(1,522,473)
–
(1,522,473)
Total contributions by
and distributions to owners
–
– (1,522,473)
(319,699) (1,842,172)
Balance at
31 December 2023
7,514,576
712,634 (1,736,700)
15,406,236 21,896,746
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
FINANCIAL STATEMENTS
55
www.unionjackoil.com
The accompanying accounting policies and notes on pages 56 to 82 form an integral part of these financial statements.
31.12.24
31.12.23
Notes
£
£
Cash flow from operating activities
15
344,371
1,984,019
Cash flow from investing activities
Purchase of intangible assets
(1,596,514)
(1,814,716)
Purchase of property, plant and equipment
(2,469,451)
(766,424)
Disposal of assets
–
227,272
Fixed term deposit
1,000,000
–
Purchase of investments
10
–
(770,173)
Sale of investments
10
–
883,725
Royalties received
187,921
–
Interest received
129,617
141,672
Net cash used in investing activities
(2,748,427)
(2,098,644)
Cash flow from financing activities
Dividends paid
(266,416)
(319,699)
Treasury shares
–
(1,522,473)
Net cash used in financing activities
(266,416)
(1,842,172)
Net decrease in cash and cash equivalents
(2,670,472)
(1,956,797)
Cash and cash equivalents at beginning of financial year
5,198,303
7,155,100
Cash and cash equivalents at end of financial year
12
2,527,831
5,198,303
STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2024
56
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
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 Chairman’s Statement,
Strategic Report and the Directors’ Report. These Financial
Statements are presented in pounds sterling because that
was the currency of the primary economic environment
in which the Company operated during 2024.
BASIS OF PREPARATION
The annual Financial Statements of Union Jack Oil plc
(“the Company”) have been prepared in accordance
with UK adopted international accounting standards (“IFRS”)
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. These accounting policies
comply with each IFRS that is mandatory for accounting
periods ending on 31 December 2024 and subject to
adoption by the UK Endorsement Board (“UKEB”).
The Financial Statements have been prepared under the
historical cost convention except for the valuation of
investments that have been measured at fair value through
other comprehensive income. 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 and
this Strategic Report. The directors’ forecasts demonstrate
that the Company will meet its day-to-day working capital
and share of estimated project costs over the forecast
period being at least 12 months from the sign-off of these
Financial Statements through to 30 June 2026.
There are a number of risks to the Company’s working
capital position, which have been identified by the directors
and its independent advisor, OGA, namely: (i) timing of
incurred costs; (ii) scope of work programmes undertaken;
and (iii) realised oil price.
The impact of those risks on the Company’s working
capital position has been assessed under a range of differing
scenarios, with the most adverse, given the current
operating environment and stage of development that the
Company’s assets are at, being identified as being the basis
for evaluating the impact for the Going Concern assessment
using the worst case “stress test.”
The Company has sufficient funding to meet planned
expenditures and a level of contingency. Taking account
of the risks, the stress test shows that the Company is
able to operate within the level of funds currently held
at the date of approval of these Financial Statements.
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
The Company’s revenue is primarily derived from selling
hydrocarbons, and revenue is recognised at the point in
time when the performance obligation to supply oil has
been satisfied, i.e. when control of goods has passed to the
customer. This is when oil sold is delivered to a third-party
storage on behalf of the customer.
Transaction prices are agreed in writing in advance of sales
and do not include any variable elements, including the oil
price. As the product sold is clearly identifiable, there is a
single performance obligation in each case to which the
transaction price is allocated. There are no volume rebates
offered and nor are there any payments in the nature of
financing arrangements.
ROYALTIES
The Company does not believe the ownership of royalties
meet the definition of a revenue contract, given there are
no contracts with the customer, or performance obligations
to fulfil, and the Company has no input in the running of
the relevant oilfields. As a result, revenue is recognised as
Royalty income.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash on hand and
deposits held at call with banks.
PRINCIPAL ACCOUNTING POLICIES
FINANCIAL STATEMENTS
57
www.unionjackoil.com
FINANCIAL INSTRUMENTS
Recognition and Derecognition
Financial assets and financial liabilities are recognised
when the Company becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual
rights to the cash flows from the financial asset expire, or
when the financial asset and substantially all the risks and
rewards are transferred.
A financial liability is derecognised when it is extinguished,
discharged, cancelled or expires.
Classification and Initial Measurement of
Financial Assets
Except for those trade receivables that do not contain a
significant financing component and are measured at the
transaction price in accordance with IFRS 9, all financial
assets are initially measured at fair value adjusted for
transaction costs (where applicable).
Financial assets are classified into the following categories:
•
Amortised cost
•
Fair value through profit or loss (“FVTPL”)
•
Fair value through other comprehensive income
(“FVOCI”)
In the periods presented the Company does not have
any financial assets categorised as FVTPL.
The classification is determined by both:
•
The entity’s business model for managing the
financial asset
•
The contractual cash flow characteristics of the
financial asset
Subsequent Measurement of Financial Assets
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets
meet the following conditions:
•
They are held within a business model whose objective
is to hold the financial assets and collect its contractual
cash flows
•
The contractual terms of the financial assets give rise
to cash flows that are solely payments of principal
and interest on the principal amount outstanding
After initial recognition, these are measured at amortised
cost using the effective interest method. Discounting is
omitted where the effect of discounting is immaterial. The
Company’s cash and cash equivalents, trade and most other
receivables fall into this category of financial instruments.
Financial assets at Fair Value through Other Comprehensive
Income (“FVOCI”)
The Company accounts for financial assets at FVOCI if the
assets meet the following conditions:
•
They are held under a business model whose objective
it is “hold to collect” the associated cash flows and sell
•
The contractual terms of the financial assets give rise
to cash flows that are solely payments of principal and
interest on the principal amount outstanding
The Company’s investments are classified as financial assets
at FVOCI based on the fair value hierarchy groups listed
in note 16. The fair value of quoted securities are based
on published market prices (Level 1 inputs). The fair value
of the unquoted securities are based on Level 3 inputs.
Classification and Measurement of Financial
Liabilities
The Company’s financial liabilities include trade and other
payables.
Financial liabilities are initially measured at fair value, and,
where applicable, adjusted for transaction costs.
Subsequently, financial liabilities are measured at amortised
cost using the effective interest method.
Impairment of Financial Assets
IFRS 9 requires the Company to recognise a loss allowance
for expected credit losses on trade receivables.
In particular, IFRS 9 requires the Company to measure the
loss allowance for a financial instrument at an amount equal
to the lifetime expected credit losses (“ECL”) if the credit risk
on that financial instrument has increased significantly since
initial recognition, or if the financial instrument is a purchased
or originated credit impaired financial asset. However, if
the credit risk on a financial instrument has not increased
significantly since initial recognition, the Company is required
to measure the loss allowance for that financial instrument
at an amount equal to 12 months ECL.
Any loss allowances measured in accordance with the above
are recognised as a deduction from trade receivables in the
Balance Sheet and movements in the loss allowance are
recognised as an expense / (or gain) within administrative
expenses in the income statement.
PRINCIPAL ACCOUNTING POLICIES
58
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
INTANGIBLE ASSETS – EXPLORATION AND
EVALUATION ASSETS
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 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.
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 cash generating unit 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.
INTANGIBLE ASSETS – ROYALTIES
Royalties are classified as intangible assets by the Company.
The Company considers the substance of the royalty to
be economically similar to holding a direct interest in the
underlying asset. Existence risk (the commodity physically
existing in the quantity demonstrated), production risk
(that the operator can achieve production and operate a
commercially viable project), timing risk (commencement and
quantity produced, determined by the operator) and price
risk (returns vary depending on the future commodity price,
driven by future supply and demand) are all risks which the
Company participates in on a similar basis to an owner of the
underlying licence. Furthermore, in the royalty, there is only
a right to receive cash to the extent there is a production
and there are no interest payments, minimum payment
obligations or means to enforce production or guarantee
repayment. These are accounted for as intangible assets
under IAS 38 and accordingly are amortised over their useful
economic life, which management consider to be 26 years.
PROPERTY, PLANT AND EQUIPMENT –
DEVELOPMENT AND PRODUCTION ASSETS
Development and Production (“D&P”) assets are
accumulated into cash generating units ("CGU") and
represent the cost of developing the commercial reserves
and bringing them into production together with the
Exploration and Evaluation (“E&E”) expenditures previously
transferred from E&E assets as outlined in the policy above.
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.
On acquisition of a D&P asset from a third party, the asset
will be recognised in the Financial Statements on signature
of the sale and purchase agreement, subject to satisfaction
of any substantive conditions within the agreement.
Costs relating to each CGU are depleted on a unit of
production method based on the commercial Proven and
Probable Reserves for that CGU. Development assets
are not depreciated until production commences. The
depreciation calculation takes account of the residual
value of site equipment and the estimated future costs of
development of recognised Proven and Probable Reserves,
based on current price levels. Changes in reserve quantities
and cost estimates are recognised prospectively.
Other, non-producing property, plant and equipment
is depreciated over its useful life on a straight-line basis.
The assets currently held are all considered to have a
useful life of four years.
DECOMMISSIONING AND SITE
RESTORATION PROVISIONS
Licensees have an obligation to restore fields to a condition
acceptable to the relevant authorities at the end of their
commercial lives.
Provision for decommissioning and reinstatement is
recognised in full as a liability and an asset when the
obligation arises.
The asset is included within exploration and evaluation
assets or property, plant and equipment as is appropriate.
The liability is included within provisions.
The amount recognised is the estimated cost of
decommissioning and reinstatement, discounted where
appropriate to its net present value, and is reassessed each
year in accordance with local conditions and requirements.
PRINCIPAL ACCOUNTING POLICIES
FINANCIAL STATEMENTS
59
www.unionjackoil.com
Revisions to the estimated costs of decommissioning and
reinstatement which alter the level of the provisions required
are also reflected in adjustments to the decommissioning
and reinstatement asset.
CONTINGENT LIABILITIES
Contingent consideration payable in respect of the
Company’s interest in certain licences is considered to be a
contingent liability, which is not recognised due to the lack of
estimation certainty of both the timing and amount payable.
These will be recognised as a provision when it is possible to
accurately estimate costs and the timing is known.
IMPAIRMENT
The carrying amounts of non-current assets are reviewed for
impairment, under IAS 36 for Production and Development
assets and IFRS 6 for Exploration and Evaluation assets, 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 industry-specific
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, and more general
triggers would include external sources such as significant
changes in the industry or internal evidence such as changes
in expectation of an asset’s economic performance. 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 Income Statement 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 higher 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’
recoverable amount. The revised recoverable amounts are
amortised in line with the Company’s accounting policies.
JOINT ARRANGEMENTS, FARM-IN AND
PROFIT SHARING AGREEMENTS
The Company is party to a Joint Arrangement when there
is a contractual agreement that sets out the terms of the
relationship over the relevant activities of the Company
and at least one other party.
Management has a legal degree of control over these
joint operating arrangements through Joint Operating
Agreements.
The Company classifies its interests in Joint Arrangements
as joint operations: where the Company has both the rights
to assets and obligations for the liabilities of the joint
arrangement.
The Company accounts for its interests in joint operations
by recognising its share of assets, liabilities, revenues and
expenses in accordance with its contractually conferred
rights and obligations.
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
revenue and cost of sales include revenues and operating
costs associated with the Company’s interest.
Where the percentage ownership in Joint Arrangements
changes during a reporting period, the arrangement is
reassessed to ensure it is still appropriately classified, and
the Company’s share of income and expenses is adjusted
prospectively from the date of change.
NET PROFIT INTEREST
A Net Profit Interest (“NPI”) agreement exists between
Egdon Resources U.K. Limited, Union Jack Oil plc and
Valhalla Oil & Gas AS (“Valhalla”), which was activated in
September 2022. Under this agreement Union Jack Oil plc,
pay Valhalla a maximum of 2.75% NPI of PEDL180 income,
less deductible expenditure. Expenditure regarding this
contract is recognised in the Income Statement in the period
it arises, as calculated based on the income produced by
the licence in that period, less deductible expenditure, as
set out in the original agreement. Due to the nature of this
expenditure, arising directly from the revenue stream, it is
recognised as a direct cost in the Income Statement.
PRINCIPAL ACCOUNTING POLICIES
60
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
PRINCIPAL ACCOUNTING POLICIES
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.
ENERGY PROFITS LEVY
With effect from 26 May 2022 the UK government
introduced an Energy Profit Levy (“EPL”) that would apply
to the ring fence profits and chargeable at 25%. The EPL
rate was increased to 35%, enacted on 10 January 2023
and subsequently increased to 38% by the Provisional
Collection of Taxes Act from 1 November 2024, at which
point EPL uplift on capital expenditure was also abolished.
The Finance Bill 2024-25 extended the end date for EPL to
31 March 2030. This change was not substantially enacted
at the Balance Sheet date.
DEFERRED TAX
Deferred tax is the tax expected to be payable or
recoverable on differences between the carrying amounts
of assets and liabilities in the Financial Statements and the
corresponding tax bases used in the computation of taxable
profit, and is accounted for using the Balance Sheet liability
method. Deferred tax liabilities are generally recognised
for all taxable temporary differences and deferred tax assets
are recognised to the extent that it is probable that taxable
profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are
not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and
liabilities in a transaction that affects neither the taxable
profit nor the accounting profit, with the exception of
transactions that give rise to equal taxable and deductible
temporary differences.
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.
The equity instrument in respect of the Company
is in relation to the issue of ordinary shares.
SHARE-BASED PAYMENTS
Equity-settled share-based payments in respect of options
issued by the Company are measured at the fair value of
the equity instruments at the grant date.
Details regarding the determination of the fair value of
equity-settled share-based transactions are set out in note
13(B). The fair value determined at the grant date of the
equity-settled share-based payments is expensed 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.
When a share-based payment expires, the cumulative
expense recognised in the share based payment reserve
is reclassified to the relevant component of equity
in line with the original recognition of the expense.
FINANCIAL STATEMENTS
61
www.unionjackoil.com
PRINCIPAL ACCOUNTING POLICIES
ADOPTION OF NEW AND REVISED INTERNATIONAL FINANCIAL REPORTING STANDARDS
The Company has adopted the following standards, amendments to standards and interpretations which are effective for
the first time this year. The impact is shown below:
New and revised International Financial
Reporting Standards
Effective Date:
Annual periods
beginning on or
after:
UKEB
adopted
Impact on the
Company
IAS 1
Amendments to IAS 1: Classification of Liabilities
as Current or Non-current
1 January 2024
Yes
No material
impact
IAS 7 &
IFRS 7
Amendments to IAS 7 and IFRS 7: Supplier
Finance Arrangements
1 January 2024
Yes
No material
impact
At the date of authorisation of the Financial Statements, the IASB and IFRS Interpretations Committee have issued
standards, interpretations and amendments which are applicable to the Company. For the next reporting period,
applicable International Financial Reporting Standards will be those endorsed by the UK Endorsement Board (UKEB).
Whilst these standards and interpretations are not effective for, and have not been applied in the preparation of, these
Financial Statements, the following could potentially have a material impact on the Company’s Financial Statements going
forward:
New and revised International Financial Reporting Standards
Effective Date:
Annual periods
beginning on or after:
UKEB adopted
IAS 21
Lack of Exchangeability (Amendments to IAS 21)
1 January 2025
Yes
IFRS 7 &
IFRS 9
Amendments to the Classification and Measurement of
Financial Instruments
1 January 2026
No
IFRS 18
Presentation and Disclosure in Financial Statements
1 January 2027
No
New and revised International Financial Reporting Standards which are not considered to potentially have a material impact
on the Company’s Financial Statements going forwards have been excluded from the above.
Management anticipates that all relevant pronouncements will be adopted in the Company’s accounting policies for the
first period beginning after the effective date of the pronouncement.
There are no other standards and interpretations in issue but not yet adopted that the directors anticipate will have
a material effect on the reported income or net assets of the Company.
62
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
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:
CRITICAL ESTIMATES
Exploration and Evaluation Costs
The Company’s accounting policy leads to the development
of tangible and intangible fixed assets, where it is considered
likely that the amount will be recoverable by future
exploitation or sale, or alternatively where the activities
have not reached a stage which permits a reasonable
assessment of the existence of reserves.
This requires management to make assumptions as
to the future events and circumstances, especially in
relation to whether an economically viable extraction
operation can be established. Such estimates are
subject to change and following initial capitalisation,
should it become apparent that recovery of the
expenditure is unlikely, the relevant capitalised amount
will be written off to the Income Statement.
Decommissioning and Site Restoration Provisions
Management use independent estimates for future
decommissioning expenditure. A discount rate of 4.83% and
inflation rate of 2.28% are used to determine appropriate
decommissioning provisions for the UK and USA assets.
These may change as a result of revisions to the estimated
timing and future cost of decommissioning.
Carrying Value of Property, Plant and Equipment
The Company assesses at each reporting period whether
there is any indication that these assets may be impaired
as indicated in note 8.
If such indication exists, the Company estimates the
recoverable amount of the asset. The recoverable amount
is assessed by reference to the higher of ‘value in use’ (being
the net present value of expected future cash flows of the
relevant cash generating unit) and ‘fair value less cost to sell’.
The Company considers the quantities of the Proven and
Probable Reserves, future production levels and future oil
prices as well as other IAS 36 criteria in their assessment of
indicators of impairment. The directors do not believe there
are any indicators of impairment in respect of the assets.
Depreciation
Production assets are depreciated on a unit of production
method based on the commercial proven reserves for each
separate asset. Development assets are not depreciated
until production commences. The unit of production rate
calculation for the depreciation of costs takes into account
expenditures incurred to date.
FINANCIAL STATEMENTS
63
www.unionjackoil.com
PRINCIPAL ACCOUNTING POLICIES
Reserve Estimates
Reserves are estimates of the amount of product that can
be economically and legally extracted from the Company’s
properties. In order to calculate the reserves, estimates
and assumptions are required about a range of geological,
technical and economic factors, including quantities,
production techniques, recovery rates, production costs,
transport costs, commodity demand, commodity prices
and exchange rates.
Estimating the quantity and/or grade of reserves requires
the size, shape and depth of fields to be determined by
analysing geological data such as drilling samples. This
process may require complex and difficult geological
judgements and calculations to interpret the data.
Given that the economic assumptions used to estimate
reserves change from year to year, and because additional
geological data is generated during the course of operations,
estimates of reserves may change from year to year.
Changes in reported reserves may affect the Company’s
financial results and financial position in a number of ways,
including the following:
•
Asset carrying values may be affected by possible
impairment due to adverse changes in estimated future
cash flows;
•
Depreciation, depletion and amortisation charged in the
Income Statement may change where such charges are
determined by the units of production basis, or where
the useful economic lives of assets change.
JUDGEMENTS IN APPLYING ACCOUNTING
POLICIES
Impairment
Management is required to assess the Exploration and
Evaluation assets and the Development and Production
assets for indicators of impairment. Note 7 discloses the
carrying value of the Exploration and Evaluation assets.
Note 8 discloses the carrying value of the Development
and Production assets.
Impairment is considered on a Cash Generating Unit basis.
In assessing the need to impair Exploration and Evaluation
assets and Development and Production assets the Board
makes assumptions about the future progress and likely
successful outcome of exploration and drilling activities as
well as the estimated level of reserves and resources and
the discount rate. 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 any available information from each licence’s
main Operator.
In the case of those licences where drilling has commenced
and management is committed to further exploration
and evaluation with sufficient financial resources available
to do so, impairment is not recognised unless technical
analysis confirms that commercially viable hydrocarbons
are insufficient to recover costs incurred.
Investments
The Company’s investments in equity instruments are held
for strategic purposes and as such these investments are
held at Fair Value Through Other Comprehensive Income
(“FVTOCI”). Management assesses these assets for any
indication of change in their fair value by reviewing the
market value of the relevant companies and therefore the
value of the underlying asset.
Deferred Tax
In determining the deferred tax asset to recognise, the
directors have considered the likelihood of generating
taxable profits in the foreseeable future against which
losses and other timing differences can be offset. The
directors have used assumptions consistent with those
adopted in preparing the going concern assessment and
have not anticipated profits that may arise following future
exploration activity. Foreseeable future has been considered
to be 24 months. The deferred tax asset recognised is
disclosed in note 5 and amounted to £221,110 at the year
end. There is also a deferred tax liability of £63,720 based
on temporary timing differences in US fixed assets.
64
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1
BUSINESS AND OPERATING SEGMENTS
The Company is considered to have two operating segments, being the exploration and evaluation of, and the development
and production of hydrocarbon discoveries onshore United Kingdom (“UK") and the United States of America (“USA”).
For the year ending 31 December 2024
Exploration
Development
and Evaluation
and Production
Corporate
Total
UK segment
£
£
£
£
Revenue
–
3,737,564
–
3,737,564
Operating Expenses
–
(1,513,628)
–
(1,513,628)
Depreciation
–
(366,145)
–
(366,145)
Impairment
–
(10,148)
–
(10,148)
Other administrative
–
–
(1,795,087)
(1,795,087)
Profit from continuing operations
–
1,847,643
(1,795,087)
52,556
Finance income
–
–
125,880
125,880
Profit before taxation
–
1,847,643
(1,669,207)
178,436
USA segment
Revenue
–
192,158
–
192,158
Operating Expenses
–
(49,339)
–
(49,339)
Depreciation
–
(32,509)
–
(32,509)
Other administrative
–
–
(83,002)
(83,002)
Profit from continuing operations
–
110,310
(83,002)
27,308
Finance income
–
–
3,737
3,737
Royalty income
196,737
–
–
196,737
Profit before taxation
196,737
110,310
(79,265)
227,782
Total for the Company
196,737
1,957,953
(1,748,472)
406,218
For the year ending 31 December 2023
Exploration
Development
and Evaluation
and Production
Corporate
Total
UK segment
£
£
£
£
Revenue
–
5,065,679
–
5,065,679
Operating Expenses
–
(1,303,053)
–
(1,303,053)
Depreciation
–
(463,782)
–
(463,782)
Impairment
–
(56,829)
–
(56,829)
Other administrative
–
–
(2,057,506)
(2,057,506)
Profit from continuing operations
–
3,242,015
(2,057,506)
1,184,509
Finance income
–
–
141,672
141,672
Profit before taxation
–
3,242,015
(1,915,834)
1,326,181
USA segment
Royalty income
35,142
–
–
35,142
Profit before taxation
35,142
–
–
35,142
Total for the Company
35,142
3,242,015
(1,915,834)
1,361,323
FINANCIAL STATEMENTS
65
www.unionjackoil.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
1
BUSINESS AND OPERATING SEGMENTS (CONTINUED)
For the year ending 31 December 2024
Exploration
Development
and Evaluation
and Production
Corporate
Total
UK segment
£
£
£
£
Non-current assets
10,714,920
5,975,307
342,430
17,032,657
Current assets
9,326
234,126
1,442,174
1,685,626
Non-current liabilities
(550,005)
(725,457)
(376,030)
(1,651,492)
Current liabilities
(39,565)
(73,837)
(102,825)
(216,227)
Net assets
10,134,676
5,410,139
1,305,749
16,850,564
USA segment
Non-current assets
1,702,398
1,716,090
–
3,418,488
Current assets
463,971
96,450
1,148,913
1,709,334
Non-current liabilities
–
(37,248)
(63,720)
(100,968)
Current liabilities
(6,667)
–
–
(6,667)
Net assets
2,159,702
1,775,292
1,085,193
5,020,187
Total for the Company
12,294,378
7,185,431
2,390,942
21,870,751
For the year ending 31 December 2023
Exploration
Development
and Evaluation
and Production
Corporate
Total
UK segment
£
£
£
£
Non-current assets
10,226,088
5,888,456
636,950
16,751,494
Current assets
19,237
440,005
6,251,186
6,710,428
Non-current liabilities
(606,169)
(753,611)
(530,557)
(1,890,337)
Current liabilities
(44,284)
(224,539)
(120,700)
(389,523)
Net assets
9,594,872
5,350,311
6,236,879
21,182,062
USA segment
Non-current assets
679,542
–
–
679,542
Current assets
35,142
–
–
35,142
Net assets
714,684
–
–
714,684
Total for the Company
10,309,556
5,350,311
6,236,879
21,896,746
66
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2
OPERATING PROFIT
31.12.24
31.12.23
£
£
Operating profit is stated after charging:
Depletion of producing assets
398,654
463,782
Net Profit Interest payment
119,449
184,259
Staff costs (see note 3)
657,344
767,219
Fees payable to the Company’s auditor for:
– The audit of these Financial Statements
59,580
57,977
A historical Net Profit Interest (“NPI”) agreement between Egdon Resources U.K. Limited, Union Jack Oil plc and
Valhalla Oil & Gas AS (“Valhalla”) was activated in September 2022.
Under this agreement Union Jack Oil plc, pay Valhalla a maximum of 2.75% NPI of PEDL180 income, less
deductible expenditure.
3
EMPLOYEE INFORMATION AND REMUNERATION OF DIRECTORS
The aggregate payroll cost in the year of the employees, all of whom are directors, was as follows:
31.12.24
31.12.23
£
£
Salaries
587,500
680,833
Social security costs
69,844
86,386
657,344
767,219
The number of persons employed by the Company was 5 (2023: 4).
Ray Godson retired on 27 June 2024. Craig Howie was appointed on 22 April 2024.
Details of each director’s emoluments are included in the Directors’ Report and within this note.
The salaries of individual directors were as follows:
Salaries
31.12.24
31.12.23
£
£
D Bramhill
325,000
398,333
J O’Farrell
150,000
177,500
G Bull
50,000
57,500
C Howie
37,500
–
R Godson
25,000
47,500
587,500
680,833
The emoluments of the highest paid director were £325,000 (2023: £398,333).
FINANCIAL STATEMENTS
67
www.unionjackoil.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
3
EMPLOYEE INFORMATION AND REMUNERATION OF DIRECTORS (CONTINUED)
Directors’ share options outstanding at 31 December 2024 and at 31 December 2023:
2024
2023
D Bramhill
1,200,000
1,200,000
J O’Farrell
700,000
700,000
G Bull
550,000
550,000
R Godson*
–
150,000
* R Godson retired on 27 June 2024 and retains his options as a good leaver.
4
OTHER INCOME
31.12.24
31.12.23
Finance Income
£
£
Bank interest
120,468
141,672
HMRC interest
9,149
–
129,617
141,672
31.12.24
31.12.23
Royalty Income
£
£
Mineral royalties
196,737
35,142
68
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
5
TAXATION
The major components of income tax for the years ended 31 December 2024 and 2023 are:
2024
2023
£
£
Current tax expense
Current income tax credit
(192,443)
(318,206)
Total current tax
(192,443)
(318,206)
Deferred tax
Origination and reversal of temporary differences
(603,933)
46,096
Change in amount recognised
–
3,736,870
Adjustment in respect of deferred tax assets not recognised
706,305
–
Adjustment in respect of prior years
(102,372)
(1,977,942)
US deferred tax
63,720
–
Energy Profits Levy
(114,272)
(984,584)
Total deferred tax
(50,552)
820,440
Total tax (credit)/charge
(242,995)
502,234
A reconciliation between tax charge/(credit) and the product of the accounting profit and the standard rate
of tax in the UK for the years ended 31 December 2024 and 2023 is as follows:
2024
2023
£
£
Accounting profit before tax from continuing operations
406,218
1,361,323
Profit multiplied by the standard rate of tax of 40% (2023: 40%)
162,487
544,529
Expenses not permitted for tax
75,062
26,701
Non ring fence income
(88,561)
–
Other adjustments in respect of prior years
(294,815)
(2,125,762)
Change in amount recognised
–
3,736,870
Adjustment in respect of deferred tax assets not recognised
706,305
–
Gross timing difference on US assets
101,952
–
Difference in US tax rate
(38,232)
–
Energy profits levy
(114,272)
(984,584)
Ring Fence Expenditure Supplement effect
(752,921)
(695,520)
Total tax (credit) / charge
(242,995)
502,234
Deferred tax
The movement on the deferred tax asset account is shown below:
2024
2023
£
At 1 January
(106,838)
(927,278)
Recognised in profit and loss
(114,272)
820,440
At 31 December
(221,110)
(106,838)
FINANCIAL STATEMENTS
69
www.unionjackoil.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
5
TAXATION (CONTINUED)
The movement on the deferred tax liability account is shown below:
2024
2023
£
At 1 January
–
–
Recognised in profit and loss
63,720
–
Deferred tax movement - US assets
63,720
–
Current tax adjustments in respect of prior years of £192,443 represents the repayment of EPL.
The adjustment in respect of prior years deferred corporation tax of £102,372 derives from a reduction in the deferred tax
asset on losses, and a decrease in the deferred tax liability on the fixed asset temporary timing differences at year end.
In determining the deferred tax to recognise, the directors have considered the likelihood of generating taxable profits
in the foreseeable future against which losses can be offset. The directors have used assumptions consistent with those
adopted in preparing the going concern assessment and have not anticipated profits that may arise following future
exploration activity. Foreseeable future has been considered to be 24 months.
Adjustment in respect of deferred tax assets not recognised of £706,305 is the tax impact of the increase in unrecognised
tax losses. This has increased through tax losses relating to the effect of capital expenditure on UK projects.
As at 31 December 2024 there are unrecognised deferred tax assets of £4,264,828 (2023: £3,558,523) in relation
to Corporation Tax and £463,909 (2023: £494,307) in respect of Energy Profits Levy.
Energy Profits Levy (“EPL”)
With effect from 26 May 2022 the UK government introduced an Energy Profit Levy ("EPL") that would apply to the ring
fence profits and chargeable at 25%. The EPL rate was increase to 35%, enacted on 10 January 2023, and subsequently
increased to 38% by the Provisional Collection of Taxes Act from 1 November 2024, at which point EPL uplift on capital
expenditure was also abolished.
The Finance Bill 2024-25 extended the end date for EPL to 31 March 2030. This change was not substantially enacted at
the Balance Sheet date however if it has been enacted the effect of this extension would be the recognition of a deferred
tax liability of £78,163.
The EPL credit to the Company during 2024, after an OPEX allowance of 100% and CAPEX relief of 129% was £192,443
(2023: £147,820).
The planned development and drilling programme for 2025 are expected to provide a cushion in respect of EPL payments
made by the Company during the year.
Tax losses
In addition to the above recognised tax losses the Company also has the following tax losses for which no deferred tax
asset has been recognised:
2024
2023
£
£
Unrecognised tax losses
9,008,386
7,029,687
Potential tax benefit @ 40% (2023: 40%)
3,603,354
2,811,875
70
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
6
EARNINGS PER SHARE
The Company has issued options over ordinary shares which could potentially dilute the basic earnings per share in the
future. Further details are given in note 13(B).
Basic earnings per share is calculated by dividing the profit attributable to ordinary shareholders by the weighted average
number of ordinary shares outstanding during the year.
These options have been taken into account when calculating the diluted earnings per share.
Earnings per share
2024
2023
Pence
Pence
Profit per share from continuing operations
– Basic
0.61
0.79
– Diluted
0.60
0.79
The profit and weighted average number of ordinary shares used in the calculation of profit per share are as follows:
2024
2023
£
£
Profit used in the calculation of total basic and diluted profit per share
649,213
859,089
Number of shares
2024
2023
Weighted average number of ordinary shares for the purposes of basic
and diluted profit per share
– Basic
106,565,896
108,268,772
– Diluted
107,915,896
108,531,272
As detailed in note 13(A), the Company has 831,680,400 (2023: 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 profit per share as their impact was anti-dilutive.
FINANCIAL STATEMENTS
71
www.unionjackoil.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
7
INTANGIBLE ASSETS
31.12.24
31.12.24
31.12.24
31.12.23
Exploration and evaluation
Royalties
Total
Total
£
£
£
£
Cost
At 1 January
10,229,400
681,727
10,911,127
9,160,176
Costs incurred in the year
1,408,011
134,287
1,542,298
1,844,561
Disposals
–
–
–
(93,610)
At 31 December
11,637,411
816,014
12,453,425
10,911,127
Depreciation and impairment
At 1 January
3,312
2,185
5,497
26,170
Amortisation charge for the year
–
30,610
30,610
2,185
Disposals
–
–
–
(22,858)
At 31 December
3,312
32,795
36,107
5,497
Net book value
At 31 December
11,634,099
783,219
12,417,318
10,905,630
At 1 January
10,226,088
679,542
10,905,630
9,134,006
Additions to exploration and evaluation costs represent exploration and appraisal costs incurred in the year in respect
of unproven properties and provisions recognised for decommissioning and restoration liabilities.
The directors have reviewed whether there were any potential indicators for impairment evidence for each of the assets.
If an indicator was identified, the directors considered the potential value of the projects and licences. The directors have
also considered the likely opportunities for realising the value of licences and have concluded that the likely value of each
exploration area is individually in excess of its carrying amount. There was no impairment for 2024.
Included in the above intangible asset additions during the year are amounts arising in relation to changes in decommissioning
and restoration provisions (note 20).
Intangible assets (less any impairment and provisions) comprise amounts capitalised as follows:
31.12.24
31.12.23
£
£
West Newton
PEDL183
6,418,468
6,137,178
Biscathorpe
PEDL253
3,804,139
3,666,898
North Kelsey
PEDL241
492,313
422,012
US Royalties
783,219
679,542
Moccasin
298,770
–
Diana
275,977
–
Rogers Secondary Recovery Project
183,282
–
East Shawnee
161,150
–
12,417,318
10,905,630
72
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
8
PROPERTY, PLANT AND EQUIPMENT
31.12.24
31.12.24
31.12.24
31.12.23
Development and production
Equipment
Total
Total
£
£
£
£
Cost
At 1 January
10,005,023
172,587
10,177,610
9,412,146
Additions
2,254,890
–
2,254,890
804,454
Disposals
–
–
–
(38,990)
At 31 December
12,259,913
172,587
12,432,500
10,177,610
Depreciation and impairment
At 1 January
4,256,798
32,356
4,289,154
3,745,934
Depreciation charge for the year
398,654
43,147
441,801
496,138
Disposals
–
–
–
(9,747)
Costs impaired
10,148
–
10,148
56,829
At 31 December
4,665,600
75,503
4,741,103
4,289,154
Net book value
At 31 December
7,594,313
97,084
7,691,397
5,888,456
At 1 January
5,748,225
140,231
5,888,456
5,666,212
The Board has assessed the Development and Production assets as at 31 December 2024 and has identified indicators of
impairment as set out in IAS36 Impairment of assets in respect of EXL294 Fiskerton Airfield. This impairment amounts
to a total of £10,148 (2023: £56,829). This licence has a carrying value of nil (2023: nil) and the impairment shown here
represents a movement in the abandonment provision.
There were no indicators for impairment on any other assets.
Development and Production assets comprise amounts capitalised as follows:
31.12.24
31.12.23
£
£
Wressle
PEDL180/182
4,906,764
4,844,894
Keddington
PEDL005(R)
971,459
903,331
Andrews 1-17
849,181
–
Andrews 2-17
280,662
–
Taylor
586,247
–
7,594,313
5,748,225
FINANCIAL STATEMENTS
73
www.unionjackoil.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
9
JOINT OPERATIONS
The Company is party to 13 Joint Arrangements which carry out exploration and development of hydrocarbons in the
United Kingdom and the United States of America. The Joint Operations in which the Company held an interest as at
31 December 2024 are as below:
Licence
Name
Proportion of
Proportion of
Principal place
ownership
ownership
of business
interest 2024
interest 2023
PEDL180/182
Wressle/Broughton North
40%
40%
England
PEDL183
West Newton
16.665%
16.665%
England
PEDL005(R)
Keddington
55%
55%
England
PEDL253
Biscathorpe
45%
45%
England
PEDL241
North Kelsey
50%
50%
England
PEDL118
Dukes Wood
16.67%
16.67%
England
EXL294
Fiskerton Airfield
20%
20%
England
PEDL209
Laughton
10%
10%
England
PEDL203
Kirklington
–
16.67%
England
PEDL201
Widmerpool Gulf
–
26.25%
England
3513325407/9
Andrews Field
45%
–
Oklahoma, USA
3513325410
Taylor
45%
–
Oklahoma, USA
3512523989
Moccasin
45%
–
Oklahoma, USA
3513321369
Rogers Secondary Recovery Project
45%
–
Oklahoma, USA
–
Diana
75%
–
Oklahoma, USA
During the year, PEDL201 (Widmerpool Gulf) and PEDL203 (Kirklington) were relinquished. During January 2025
PEDL118 (Duke’s Wood) was relinquished.
10
INVESTMENTS
2024
2023
£
£
Investments in equity instruments designated as at FVTOCI
Shares
121,320
530,112
These investments in equity instruments are not held for trading. Instead, they are held for medium to long-term strategic
purposes. Accordingly, the directors of the Company have elected to designate these investments in equity instruments as
at FVTOCI as they believe that recognising short-term fluctuations in these investments’ fair value in profit or loss would
not be consistent with the Company’s strategy of holding these investments for long-term purposes and realising their
performance potential in the future. Measurement criteria for investments are given in note 16.
74
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
10
INVESTMENTS (CONTINUED)
31 December
31 December
2024
2023
£
£
At 1 January
530,112
552,043
Additions
–
770,173
Disposals
–
(837,088)
Changes in fair value of investments
(408,792)
44,984
At 31 December
121,320
530,112
Elephant Oil Corp
The Company is the beneficial holder of 56,650 (2023: 56,650) ordinary shares of Elephant Oil Corp, registered
in Nevada, United States of America (USA).
The principal activity of Elephant Oil Corp is the exploration and evaluation of hydrocarbon assets in West Africa.
The value of the unquoted Elephant Oil Corp shares are deemed to be US$2.25 per share and, on this basis, the
Company has valued its holding at £101,970 (2023: £100,112).
Beacon Energy plc
The Company is the beneficial owner of 430,000,000 (2023: 430,000,000) ordinary shares in Beacon Energy plc (“Beacon”),
a company registered in the Isle of Man, which represents a 2.32% (2023: 3.22%) interest in that company at year end.
Beacon, under AIM rule is, currently classified as a cash shell.
The investment in Beacon was revalued at the year end at 0.0045 pence per share with a total value of £19,350
(2023: £430,000).
The change in valuation for the above investments are reported in the Statement of Comprehensive Income on page 52.
HYDROCARBON VENTURES LIMITED
Hydrocarbon Ventures Limited, incorporated on 30 July 2024, is a wholly owned subsidiary of the Company and was
dormant in the current and prior periods.
11
TRADE AND OTHER RECEIVABLES - CURRENT
The average credit period on sales of goods is 30 days. No interest is charged on outstanding trade receivables. The
Company measures the loss allowance for trade receivables at an amount equal to 12 months ECL. The ECL on trade
receivables are estimated using a provision matrix by reference to past default experience of the debtor and an analysis
of the debtor current financial position, adjusted for factors that are specific to the debtors, general economic conditions
of the industry in which the debtors operate and an assessment of both the current as well as the forecast direction of
conditions at the reporting date.
The Company has recognised no loss allowance for the trade receivables as there has been no historical experience to
indicate that these receivables are not recoverable.
The Company has other receivables of £43,958 which is accrued royalty income.
There has been no change in the estimation techniques or significant assumptions made during the current reporting period.
FINANCIAL STATEMENTS
75
www.unionjackoil.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11
TRADE AND OTHER RECEIVABLES - CURRENT (CONTINUED)
31.12.24
31.12.23
£
£
Trade receivables
189,776
357,706
Term deposit
–
1,000,000
Other receivables
43,958
35,142
VAT
88,239
103,114
Prepayments
534,007
29,992
855,980
1,525,954
12
CASH AND CASH EQUIVALENTS
31.12.24
31.12.23
£
£
Cash at bank
2,527,831
5,198,303
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.
13(a) SHARE CAPITAL
Allotted and issued:
Nominal
31.12.24
31.12.23
Number
Class
value
£
£
112,865,896
Ordinary
5p
5,643,295
5,643,295
(31 December 2023: 112,865,896)
831,680,400
Deferred
0.225p
1,871,281
1,871,281
(31 December 2023: 831,680,400)
Total
7,514,576
7,514,576
Ordinary shares hold voting rights and are entitled to any distributions made on winding up. Deferred shares do not hold
voting or dividend rights and are not entitled to distributions made on winding up.
Treasury shares
2024
2023
Number
£
Number
£
Ordinary shares held in treasury
by the Company
6,300,000
1,736,700
6,300,000
1,736,700
76
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
13(b) SHARE-BASED PAYMENTS – OPTIONS
No options were granted to directors of the Company during 2024. Options are Issued with an exercise price equating
to the mid-market closing price on the date of Issue.
Options have a vesting period of 3 years and are subject to a further condition that the options can only be exercised
if the share price is at a 30% premium to the exercise price.
Details of the number of options and the weighted average exercise price (WAEP) outstanding during the year are
as follows:
Number of options
WAEP
£
Outstanding at the beginning of the year
3,050,000
0.374
Granted during 2024
–
–
Exercised during 2024
–
–
Outstanding at the end of the year
3,050,000
0.374
Exercisable at the end of the year
3,050,000
0.374
The fair values of options in issue are calculated using the Black-Scholes model. The inputs into the model are as follows:
Date of grant
06.08.19
19.07.19
04.12.18
07.11.18
18.07.18
Number in issue at 31 December 2024
400,000
1,300,000
150,000
300,000
900,000
Share price at date of grant
53p
53p
22p
22p
18p
Exercise price
53p
53p
22p
22p
18p
Expected volatility
70%
70%
63%
62%
55%
Expected life (years)
6.5
6.5
6.5
6.5
6.5
Risk-free rate
0.3161%
0.5187%
0.8840%
1.1035%
0.9427%
Expected dividend yield
0%
0%
0%
0%
0%
Fair value at date of grant
£133,497
£435,086
£19,491
£58,106
£85,822
Earliest vesting date
06.08.22
19.07.22
04.12.21
07.11.21
18.07.21
Expiry date
06.08.29
19.07.29
04.12.28
07.11.28
18.07.28
The Company recognised total expenses in the Income Statement of £nil in relation to share options accounted
for as equity-settled share-based payment transactions during the year (2023: £nil).
Expected volatility was determined based on a historic 5-year volatility of the Company.
FINANCIAL STATEMENTS
77
www.unionjackoil.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
14
RESERVES
The nature and purpose of each reserve within equity is as follows:
Share capital – represents the nominal value of shares issued.
Share-based payment reserve – represents the cumulative cost of options issued in return for professional services.
Treasury reserve – own shares held in treasury by the Company.
Retained earnings – represents cumulative profits, and all other net gains and losses and transactions with owners
not recognised elsewhere.
15
RECONCILIATION OF PROFIT TO CASH GENERATED FROM OPERATIONS
31.12.24
31.12.23
£
£
Profit for the year
406,218
1,361,323
Depletion of producing assets
398,654
463,782
Accretion
(19,132)
97,751
Impairment of assets
10,148
56,829
Provision adjustment
(62,442)
–
Amortisation / depreciation
73,757
34,541
Loss on disposal of assets
–
18,299
Finance income
(129,617)
(141,672)
Royalty income
(196,737)
(35,142)
480,849
1,855,711
Decrease in inventories
10,164
6,725
(Increase) / decrease in trade and other receivables
(321,210)
373,029
(Decrease) / increase in trade and other payables
(17,875)
10,167
Cash generated from operations
108,781
2,245,632
Income taxes received / (paid)
192,443
(261,613)
Net cash flows from operating activities
344,371
1,984,019
78
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
16
FINANCIAL INSTRUMENTS
Classification of measurement of financial instruments
The fair value hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used
in measuring the fair value of the financial assets and liabilities.
The fair value hierarchy has the following levels:
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
•
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability,
either directly (i.e. as prices) or indirectly (i.e. derived from prices); and
•
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
The level within which the financial asset or liability is classified is determined based on the lowest level of significant
input to the fair value measurement.
The Company holds investments at fair value through other comprehensive income. Investments in listed shares
are a level 1 valuation. Investments in unlisted shares are a level 3 valuation as the quoted price is not available.
The tables below set out the Company’s accounting classification of each class of its financial assets and liabilities.
Financial assets measured at fair value
£
At 31 December 2024
Level 1
Level 3
Total
Investments: FVOCI
19,350
101,970
121,320
At 31 December 2023
Investments: FVOCI
430,000
100,112
530,112
Financial assets measured at amortised cost
£
At 31 December 2024
Other receivables
666,204
Trade receivables
189,776
Cash and cash equivalents
2,527,831
Total carrying value
3,383,811
At 31 December 2023
Other receivables
1,168,248
Trade receivables
357,706
Cash and cash equivalents
5,198,303
Total carrying value
6,724,257
All of the above financial assets’ carrying values approximate to their fair values at 31 December 2024 and 31 December
2023, given their nature and short times to maturity.
FINANCIAL STATEMENTS
79
www.unionjackoil.com
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
16
FINANCIAL INSTRUMENTS (CONTINUED)
Financial liabilities measured at amortised cost
£
At 31 December 2024
Trade payables
113,169
Accruals
109,725
Total carrying value
222,894
At 31 December 2023
Trade payables
285,244
Accruals
104,279
Total carrying value
389,523
All of the above financial liabilities’ carrying values approximate to their fair values at 31 December 2024 and
31 December 2023 given their nature and short times to maturity.
17
FINANCIAL INSTRUMENT RISK EXPOSURE AND MANAGEMENT
The principal financial risks to which the Company is exposed are: liquidity risk, oil price 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 measures credit risk on trade receivables using a provision matrix by reference to past default experience
of the debtor and an analysis of the debtor current financial position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the debtors operate and an assessment of both the current as well
as the forecast direction of conditions at the reporting date. The Company has recognised no loss allowance for the trade
receivables as there has been no historical experience to indicate that these receivables are not recoverable. All outstanding
trade receivables of £189,776 have been received prior to approval of the Financial Statements and the credit risk is
believed to be unchanged from previous years.
The Company has other receivables which are accrued royalty income of £43,958. Union Jack has a management
agreement with Reach whereby Reach obtain all the royalty payments, which are subsequently paid into Union Jack’s USA
bank account with BancFirst. Union Jack has an Internal Revenue Service number.
Under IFRS 9 the 12 month expected credit losses have been considered on all of these receivables and these assessments
resulted in no credit losses being recognised after taking into consideration the credit risk associated with the trade and
other receivables, of £233,734.
The Company’s credit risk is otherwise largely attributable to its cash balances and such risk is limited as the third parties
are international banks of which the latest S&P Global (formerly Standard & Poors) long term rating is A+.
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 £2,761,565 (2023: £6,591,151).
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 following table on page 80 shows the undiscounted cash flows on the Company’s financial liabilities as at 31 December
2024 and 31 December 2023, on the basis of their earliest possible contractual maturity.
80
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
17
FINANCIAL INSTRUMENT RISK EXPOSURE AND MANAGEMENT (CONTINUED)
At 31 December 2024
Within
Within
Greater than
Total
2 months
2-6 months
6 months
£
£
£
£
Trade payables
113,169
113,169
–
–
Accruals
109,725
109,725
–
–
222,894
222,894
–
–
At 31 December 2023
Trade payables
285,244
285,244
–
–
Accruals
104,279
104,279
–
–
389,523
389,523
–
–
Oil price risk
The Company is exposed to oil price risk associated with sales of oil from production. The Company does not currently
consider it necessary to use hedging instruments to manage its exposure to this risk.
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.
18
FINANCIAL COMMITMENTS
The Company had no financial commitments as at 31 December 2024 or 31 December 2023, other than those recognised
in the Financial Statements and where Authority for Expenditure has been agreed with the Operator.
19
TRADE AND OTHER PAYABLES
31.12.24
31.12.23
£
£
Trade payables
113,169
285,244
Accruals
109,725
104,279
222,894
389,523
FINANCIAL STATEMENTS
81
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
20
PROVISIONS
Decommissioning
and reinstatement
provision
£
As at 1 January 2023
1,700,069
Adjustment to provision estimates
92,517
Accretion of provision
97,751
At 31 December 2023
1,890,337
Adjustment to provision estimates
(182,465)
Accretion of provision
(19,132)
At 31 December 2024
1,688,740
At 31 December 2023
1,890,337
A provision has been made for decommissioning costs on productive fields. A provision has also been made for
reinstatement costs relating to exploration and evaluation assets where work performed to date gives rise to an obligation,
principally for site restoration. Assumptions, based on the current economic environment, have been made which the
directors believe are a reasonable basis upon which to estimate the future liability. This estimate will be reviewed regularly
to take into account any material changes to assumptions. Actual costs will depend on a number of factors, including future
market prices and any variation in the extent of decommissioning and reinstatement to be performed.
Decommissioning and reinstatement costs are currently expected to be used between 2026 and 2045.
Provisions created during the year, based on an independent review, relate to obligations in respect of Keddington,
Fiskerton Airfield, Dukes Wood, Kirklington, Wressle and West Newton assets.
The provision on the Balance Sheet also includes £63,720 deferred tax liability, the detail of which is given in note 5.
Sensitivity to key assumption changes
Variations to the key assumptions used in the decommissioning provision estimates would cause increases/(reductions)
to the provision as follows:
Further
decommissioning
provision
Inflation rate (current assumption 2.275%)
1%
(123,059)
3%
137,617
Discount rate (current assumption 4.826%)
4%
150,649
6%
(106,704)
82
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
21
CONTINGENT LIABILITIES
At the year end there were no contingent liabilities.
22
RELATED PARTY TRANSACTIONS
Details of key management personnel remuneration are disclosed in note 3. Key management comprises only the directors.
Charnia Resources (UK), an entity owned by Graham Bull, non-executive director, was paid £120,360 (2023: £121,962)
in respect of consulting fees. £12,000 was outstanding at the year end (2023: £12,138).
Jayne Bramhill, spouse of David Bramhill, received the sum of £12,000 (2023: £12,000) from the Company in
respect of office management and administration costs. No amounts were outstanding at the year end (2023: £nil).
23
EVENTS AFTER THE BALANCE SHEET DATE
The following events have taken place after the year end:
During January 2025, the Moccasin 1-13 well (Moccasin), located in Pottawatomie County, Oklahoma, USA was spudded
and drilled to a Total Depth of 5,690 feet.
Moccasin penetrated the primary objective, the 1st Wilcox and two other secondary zones, the Bartlesville and Red
Fork Sands.
Subsequently the 1st Wilcox was perforated and the formation flowed at an open hole rate equating to 621 barrels
of oil per day.
Moccasin is now in test production under a restricted choke.
The Bartlesville and Red Fork sands await completion.
ANNUAL GENERAL MEETING
83
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Notice is hereby given that the Annual General Meeting
(the “AGM”) of Union Jack Oil plc (the “Company”) will be
held in the George White Suite at The Bristol Hotel, Prince
Street, Bristol BS1 4QF on Friday 27 June 2025 at 11.00 a.m.
to consider and, if thought fit, pass the following resolutions,
of which resolutions numbered 1 to 9 will be proposed as
ordinary resolutions and resolution numbered 10 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 2024, together with
the Directors’ Report and the Auditor’s Report on those
annual accounts.
2 Re-election of director
To re-elect David Bramhill as a director of the Company
3 Re-election of director
To re-elect Joseph O’Farrell as a director of the Company
4 Re-election of director
To re-elect Graham Bull as a director of the Company
5 Re-election of director
To re-elect Craig Howie as a director of the Company
6 Re-appointment of auditor
To re-appoint Crowe U.K. LLP as auditor of the Company
to hold office from the conclusion of this AGM until the
conclusion of the next general meeting at which accounts
are laid before the Company.
7 Auditor’s remuneration
To authorise the directors to determine the remuneration
of the auditor.
8 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 £2,664,147 (representing
approximately 50% of the issued share capital of the
Company (excluding treasury shares) at the date of this
notice) provided that, unless previously revoked, varied
or extended, this authority shall expire on the conclusion
of the next AGM 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.
9 Directors’ authority to repurchase shares
That the Company be and is hereby unconditionally and
generally authorised for the purposes of section 701 of
the Act to make market purchases (within the meaning of
section 693(4) of the Act) of its ordinary shares of 5 pence
each (“Ordinary Shares”) provided that:
(a) the maximum number of Ordinary Shares authorised
to be purchased is 10,656,589;
(b) the minimum price which may be paid for any such
Ordinary Share is 5 pence;
(c) the maximum price which may be paid for an Ordinary
Share shall be the higher of:
(i) 105% of the average of the middle market quotations
for an Ordinary Share derived from the London Stock
Exchange Daily Official List for the five business days
immediately prior to the day on which the share is
contracted to be purchased, and
(ii) an amount equal to the higher of the price of:
(A) the last independent trade of an Ordinary Share;
and
(B) the highest current independent bid for an
Ordinary Share, as derived from the London Stock
Exchange Trading System; and
(d) this authority shall, unless previously renewed, revoked or
varied, expire on the earlier of the date falling 15 months
after the date of the passing of this resolution and the
conclusion of the next Annual General Meeting, but the
Company may enter into a contract for the purchase
of Ordinary Shares before the expiry of this authority
which would or might be completed (wholly or partly)
after its expiry.
SPECIAL RESOLUTION
10 Directors’ power to issue shares for cash
That, conditional upon the passing of resolution
numbered 8, 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, and/ or by way of a sale of treasury shares (in
accordance with section 573 of the Act), wholly for cash
pursuant to the authority of the directors under section
551 of the Act conferred by resolution numbered 8 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 £2,664,147
(representing approximately 50% of the issued share
capital of the Company (excluding treasury shares) at the
date of this notice) and, unless previously revoked, varied
or extended, this power shall expire on the conclusion of
the next AGM 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
Matthew Small
Company Secretary
Dated: 16 May 2025
Registered Office: 6 Charlotte Street, Bath BA1 2NE
NOTICE OF ANNUAL GENERAL MEETING
84
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
EXPLANATORY NOTES RELATING TO
RESOLUTIONS
Resolution 1 - Report and accounts
All public companies are required by law to lay their
annual accounts before a general meeting of the Company,
together with the directors’ reports and auditors’ report
on the accounts. At the AGM, the directors will present
these documents to the shareholders for the financial year
ended 31 December 2024.
Resolutions 2,3,4 and 5 - Re-election of directors
The Company’s Articles require any director who has
not been appointed or re-appointed at either of the two
previous Annual General Meetings of the Company to
retire from office at the following AGM. As permitted
by the Articles, however, the board of directors has
determined that each of the other directors as at the
date of this AGM notice shall also retire from office at
the AGM in line with best practice. Each of the directors
intends to stand for re-election by the shareholders.
Resolutions 6 and 7 - Auditors
Resolution 6 concerns the re-appointment of Crowe U.K.
LLP as auditors until the conclusion of the next general
meeting at which accounts are laid, that is, the next
Annual General Meeting.
Resolution 7 authorises the directors to fix the auditor’s
remuneration.
Resolution 8 – Directors’ authority to allot
shares
This resolution grants the directors authority to allot
shares in the capital of the Company and other relevant
securities up to an aggregate nominal value of £2,664,147,
representing approximately 50% of the nominal value of
the issued ordinary share capital of the Company (excluding
treasury shares) as at the date of this AGM notice. Unless
revoked, varied or extended, this authority will expire at
the conclusion of the next AGM of the Company.
Resolution 9 – Directors’ authority to
repurchase shares
This resolution authorises the board to make market
purchases of up to 10,656,589 ordinary shares
(representing approximately 10% of the Company’s issued
ordinary shares (excluding treasury shares) as at the
date of this AGM notice). Shares so purchased may be
cancelled or held as treasury shares. The authority will
expire at the end of the next Annual General Meeting
of the Company or 15 months from the passing of the
resolution, whichever is the earlier.
The minimum price that can be paid for an ordinary share
is 5p being the nominal value of an ordinary share. The
maximum price that can be paid is 5% over the average
of the middle market prices for an ordinary share, derived
from the Daily Official List of the London Stock Exchange,
for the five business days immediately before the day on
which the share is contracted to be purchased.
Resolution 10 – Directors’ power to issue shares
for cash
This resolution authorises the directors to allot equity
securities for cash other than in accordance with the
statutory pre-emption rights (which require a company to
offer all allotments for cash first to existing shareholders in
proportion to their holdings). The authorisation is limited
to a maximum nominal amount of £2,664,147, representing
approximately 50% of the nominal value of the issued
ordinary share capital of the Company (excluding treasury
shares) as at the date of this AGM notice. Unless revoked,
varied or extended, this authority will expire at the
conclusion of the next AGM of the Company.
The Company may hold any shares it buys back “in
treasury” and then sell them at a later date for cash
rather than simply cancelling them. Any such sales are
required to be made on a pre-emptive, pro-rata basis
to existing shareholders unless shareholders agree by
special resolution to disapply such pre-emption rights.
Accordingly, in addition to giving the directors power
to allot unissued ordinary shares on a non pre-emptive
basis, resolution 10 will also give directors power to sell
ordinary shares held in treasury on a non pre-emptive
basis, subject always to the limitations noted above.
The directors consider that the power proposed to be
granted by resolution 10 is necessary to retain financial
flexibility.
NOTICE OF ANNUAL GENERAL MEETING
ANNUAL GENERAL MEETING
85
www.unionjackoil.com
NOTICE OF ANNUAL GENERAL MEETING
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 25 June 2025 (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 A member who is entitled to attend, speak and vote
at the AGM may appoint a proxy to attend, speak and
vote instead of them. 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.
3 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 25 June 2025. A proxy form which may
be used to make such appointment and give proxy
instructions accompanies this notice. If you
do not have a proxy form and believe that you should
have one, or if you require additional forms, please
contact Computershare Investor Services PLC on
0370 702 0000.
4 CREST members who wish to appoint a proxy
or proxies through the CREST electronic proxy
appointment service may do so for the AGM and any
adjournment by using the procedures described in the
CREST manual (euroclear.com/crest). CREST personal
members or other CREST-sponsored members
and those CREST members who have appointed a
voting service provider should refer to their CREST
sponsor or voting service provider, who will be able
to take the appropriate action on their behalf. In
order for a proxy appointment or instruction made
using the CREST service to be valid, the appropriate
CREST message (a CREST proxy instruction)
must be properly authenticated in accordance
with Euroclear’s specifications and must contain
the information required for such instructions, as
described in the CREST manual. All messages relating
to the appointment of a proxy or an instruction to a
previously appointed proxy must be transmitted so
as to be received by Computershare (ID: 3RA50) by
11.00 a.m. on 25 June 2025. It is the responsibility of
the CREST member concerned to take such action
as shall be necessary to ensure that a message is
transmitted by means of the CREST system by any
particular time. In this connection, CREST members
and, where applicable, their CREST sponsors or voting
service providers, are referred, in particular, to those
sections of the CREST manual concerning practical
limitations of the CREST system and timings. The
Company may treat a CREST proxy instruction as
invalid in the circumstances set out in Regulation 35(5)
(a) of the Uncertificated Securities Regulations 2001.
5 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.
86
ANNUAL REPORT AND FINANCIAL STATEMENTS 2024
UNION JACK OIL PLC
NOTICE OF ANNUAL GENERAL MEETING
NOTES (CONTINUED)
6 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 2,3 and 4) 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.
7 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.
ANNUAL GENERAL MEETING
87
www.unionjackoil.com
Union Jack Oil plc
6 Charlotte Street,
Bath BA1 2NE,
England
Telephone: +44 (0) 1225 428139
Email: info@unionjackoil.com
X: @unionjackoilplc
Web: www.unionjackoil.com