Annual Report and Accounts and Notice of AGM

THE INFORMATION CONTAINED WITHIN THIS ANNOUNCEMENT IS DEEMED BY THE COMPANY TO CONSTITUTE INSIDE INFORMATION AS STIPULATED UNDER THE MARKET ABUSE REGULATION (EU) NO. 596/2014 AS IT FORMS PART OF UK DOMESTIC LAW PURSUANT TO THE EUROPEAN UNION (WITHDRAWAL) ACT 2018, AS AMENDED. UPON THE PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

06 March 2025

Angus Energy PLC

("Angus Energy", the "Company" or together with its subsidiaries, the "Group") (AIM:ANGS)

Annual Report and Accounts and Notice of Annual General Meeting

Angus Energy is pleased to announce its audited annual accounts for the year ended 30 September 2024 (the "Accounts"), extracts of which are set out below.

In addition, the Company's 2025 annual general meeting ("AGM") will be held on 31 March 2025 at

11.00 a.m. at the offices of Fieldfisher, 9th Floor, Riverbank House, 2 Swan Lane, London EC4R 3TT, United Kingdom. The full copy of the Accounts along with the AGM Notice were posted to all shareholders today and are also available on the Company's website, http://www.angusenergy.co.uk/

END

For further information please visit www.angusenergy.co.uk

Angus Energy Plc

Richard Herbert

Chief Executive Director Via Flagstaff

SP Angel Corporate Finance LLP (Nomad and Broker) www.spangel.co.uk

Stuart Gledhill / Jen Clarke / Richard Hail Tel: +44 (0)20 3470 0470

Flagstaff PR/IR [email protected]

Tim Thompson / Fergus Mellon / Alison Alfrey Tel: +44 (0) 207 129 1474

About Angus Energy plc

Angus Energy plc is a UK AIM quoted independent oil and gas company. Angus is the leading onshore gas producer in the UK and has ambitious plans to grow onshore production and diversify internationally. Angus Energy has a 100% interest in the Saltfleetby Gas Field (PEDL005), majority owns and operates conventional oil production fields at Brockham (PL 235) and Lidsey (PL 241) and has a 25% interest in the Balcombe Licence (PEDL244). Angus Energy operates all fields in which it has an interest.

Chairman's statement

Dear Fellow Shareholders,

It is my pleasure to present you with the Annual Report of Angus Energy plc (the "Company" or "Angus Energy") with its subsidiary undertakings (the "Group") for the year ended 30 September 2024.

During the year, we focused on maximizing revenue, refinancing of the Company's debt, improving operational efficiency, and maintaining a disciplined approach to capital allocation. There has also been a strong focus on organic and inorganic growth opportunities. Our dedication to sustainable practices, combined with a strong commitment to shareholder returns, positions us well for future success.

Angus has delivered strong revenue of £21.802 million and EBITDA of £10.803 million. Historic hedges, set at less than 50% of current spot gas prices which stop in June 2025, will lead to a substantial improvement in cashflow and overall profits going forwards.

In February 2024, we successfully closed a £20m senior secured loan facility provided by Trafigura PTE Ltd. This allowed the company to exit its previous expensive debt and provided funds to pay legacy creditors and invest in a booster compressor to increase gas production from Saltfleetby Field in Lincolnshire and to restart oil production from the Brockham Oil Field in Southern England.

Operationally, we have maintained steady gas production at Saltfleetby and work on the installation of the booster compressor is progressing with commissioning expected in late first quarter of 2025. The new compressor is planned to boost production and prolong the life of the field.

In line with this strategy, we have completed the geological remapping of the Saltfleetby Gas Field, enabling us to produce an updated dynamic reservoir model calibrated with production history data. With this data we are able to select the best targets for infill drilling opportunities to accelerate production. Geologically the Saltfleetby Gas Field also has gas storage potential and has been identified as the best hydrogen storage reservoir candidate onshore in the UK and 3rd best, including offshore fields. Energy security is high on the Government's agenda, and we will continue to work with all stakeholders to assess the viability of storage opportunities covering hydrogen (production and storage) and carbon capture schemes.

To complement Angus's organic growth, we have created a strong team to look at inorganic opportunities and are in the process of identifying targets, mergers and development candidates. This will be a strong theme for 2025.

Financial and Statutory Information

Revenue from oil and gas production during the year were £21.802m (2023: £28.208m) on production of gross 44 mbbls of condensate oil, 2.6 kbbls of crude oil and 26.5 million therms of natural gas (2023: 32 kbbls of condensate oil, NIL crude oil and 25 million therms of natural gas). This was the result of production from the Saltfleetby Gas Field and Brockham Oil Field.

The Group recorded a loss of £4.301m, which included an impairment of £4.770m for the Brockam Oil Field due to lower than expected production rates. EBITDA (Revenue less Expenses - excluding tax, interest, depletion, impairment and derivative charge) for the period was £10.803m (2023: £17.022m). The group recorded a derivative profit of £10.822m in relation to the fair value movement of the derivative instrument which is based on future production and calculated using forward gas prices as at 30 September 2024. The derivative will be realised to a profit or loss when the payments under the derivative instruments become due (see note 22).

The Company has continued to make a conscious effort to maintain a low cost base at both corporate and operational levels while still maintaining a high level of safety, professionalism and operatorship. Administrative costs have increased by £0.347m to £3.253m (2023: £2.906m), reflecting one off restructuring costs and inflation.

Outlook

With the legacy hedges rolling off in June 2025 the Company looks forward to the benefit of substantially higher free cashflows. After the installation of the booster compressor is completed, the Company will turn its intentions to drilling a fourth well at Saltfleetby, increasing production and adding value for shareholders.

The market for oil and gas continues to evolve, and we remain confident in our ability to navigate these changes, leveraging our experienced team, world-class assets, and strategic partnerships. Looking ahead, we are focused on maximising production from our existing reserves and advancing key development projects by expanding our footprint outside of the UK. We deeply value the trust and support of our shareholders, employees, and stakeholders. I am excited about the opportunities that lie ahead as we continue to build on our success.

Krzysztof Zielicki

Interim Non-Executive Chairman

5 March 2025

Operating Review

I am pleased to report that all operations were performed without any safety incidents or environmental damage.

The Group produced 26.5 million therms of natural gas and 44 mbbls of condensate oil during the period from its Saltfleetby Gas Field and 2.6 kbbls of crude oil from its Brockham Oil Field. The performance of the reservoir and the three producing wells (A4, B2 and B7) have been modelled and well performance has been optimised to deliver quarterly production targets with all quarterly production targets met during 2024.

For the period, operational efficiency was 92% including June and August planned shutdowns for the delivery of safety critical and regulatory driven maintenance, compressor and engine maintenance work, and gas export metering maintenance work. This represents a 2% increase over last year's operating efficiency and was largely due to the improvement in equipment reliability and continued well performance management.

In October 2023 Angus announced the publication of an updated independent Competent Persons Report ("CPR") for its Saltfleetby Gas Field ("SGF") conducted by Oilfields International Limited. The summary of the results, which includes resources and reserves for both sales gas and associated liquids is summarised below:

The new CPR has taken account of production performance from 3 wells currently in production and the addition of two further development wells in the Main Westphalian reservoir, SF9 and SF10, which are scheduled to enter production in January 2025 and January 2026 respectively.

The CPR also gives the net present value of the cash flows from SGF, including the impact from the revised capex from additional drilling, projected impact of the Energy Profits Levy, the senior loan facility debt service costs, the associated royalties and the mandatory hedging. Oilfield International Limited has used a discount rate of 10%.

We highlight below the NCF and NPV10, discounted to August 1st, 2023: Net Attributable to the Company:

MOD: money of the day

The full CPR is available for download in the "Presentations" section of the Company's website (www.angusenergy.co.uk/media/presentations).

Under the heading "Review of activities" below we provide a more in-depth summary of operational activities. I will reiterate that our first concern as a Group must be for the safety of our staff, contractors, the public at large and the environment on which we rely on. We will continue to work in close co-operation with all of our regulators, ensuring a spotless record of compliance - the North Sea Transition Authority ("NSTA"), the Environment Agency ("EA") the Health and Safety Executive ("HSE") and our local councils.

Business Review

The principal activity of the Group during the year continued to be on-shore, conventional production and development of hydrocarbons in the UK.

Review of activities

Angus is very conscious of the requirement to operate in a safe and environmentally responsible manner. This is a priority of the management and all our field operators. The activities for the year were carried out with no reportable HSE or Environmental breaches.

Saltfleetby

During the period the Company continued to develop its well performance program and improving equipment reliability. The annual 5-day shutdown in July was conducted with all safety related maintenance completed without incident. Planned maintenance included an 8,000-hour service carried out on the 'A' compressor, including the change out of suction and discharge plate valve assemblies, piston rods, piston rod seals, and piston rings. Top-end services on the 'A' and B' engines were completed with a full changeout of cylinder heads for upgraded non-OEM cylinder head and valve assemblies.

Operational Efficiency for the year improved on the previous year's performance with an average efficiency of 92% achieved, primarily driven by improvements in equipment reliability.

Building on the seismic reprocessing and remapping work completed in 2023, a geocellular, dynamic reservoir model has been constructed across the Westphalian Sandstone and underlying Namurian reservoir at the Saltfleetby Gas Field. The reservoir model gives us a great understanding of the reservoir properties and fluid flow within the reservoir and in turn has then been used to identify several infill drilling opportunities. Additionally, this reservoir model will be fundamental in the progression of the long-term plan for the Satlfleetby field as a storage facility for CO2, Natural Gas or Hydrogen.

Angus is evaluating the drilling of a new well, adding a fourth producer to the field to accelerate production and increase shareholder value. The well is in the preliminary design phase with a target drilling date of late 2025, pending delivery time for long lead items. The target drill date would allow for 2-6 mmcf/d incremental field production in early 2026.

The Company met all its obligations under its live hedging programme and has deferred payments on the crystallised hedges by up to 12 months in agreement with Trafigura. Legacy monthly hedged volumes are currently set at 1,250,000 Therms per month and terminate in June. In July-December 2025, monthly hedged volumes are set at an average volume of 1,075,000 Therms per month at an average price of c. 88 pence per therm. As required under its loan agreement with Trafigura, Angus has struck hedges in for 2026 set at an average volume of 530,000 Therms per month at an average price of c. 103 pence per therm. Please see note 22 and 27 for further details.

Brockham

BRX2Y was brought back on-line May 28th after a successful workover. The well came on-line producing c. 60% water cut at a total fluids rate of approximately 120 bbls/d with only minor operational upsets. Since restarting production, the water cut has fluctuated, with a range of between 60% and 80%, and total fluid rates have stabilized at c. 90 bbls/d, equating to c. 20-25 bbls/d oil production.

The forward strategy now focuses on the optimization of oil production through improvements in operational efficiency. The company recognised an impairment of £4.770 million in relation to the carrying value of Brockham, due to the lower than expected production rates which have impacted on the expected future cash flows from the assets. Production will continue to be monitored, and an assessment is being undertaken to determine if BRX4Z, a suspended offset well, can be commercially brought into production to increase recovery from the Portland reservoir.

Following the initial 7-day well test in the Autumn of 2018, a planning application was submitted in late 2019 for a longer 3-year well test on the Balcombe-2Z well. The aim of the planned operation is to recover remaining drilling fluids from the wellbore and conduct a long-term extended well test to indicate to what degree the well and field can produce hydrocarbons at a commercial rate. The Planning Inspectorate's decision in October 2023 to grant the Company the right to test the existing well, was appealed by a residents' organization and heard in court on the 26th and 27th of January 2025. The decision of the High Court is expected to be made public in April or May 2025.

Lidsey

Due to the high cost of water disposal, Lidsey has remained shut in, however, as previously stated, a planning application has been submitted to allow for transportation of produced water off-site to the Brockham oil field for voidage replacement and pressure maintenance. Should this application be granted, work will be progressed to test the integrity of the well in readiness for future production, confirm the operability of the currently installed artificial lift, and establish the re-instatement production potential of the X2 well. This is low-cost operation, and if successful, it will allow for the reinstatement of the site with produced water trucked to Brockham for injection.

Strategy and Sustainability

The Directors' objective remains unchanged, to create long-term value for shareholders by building the Group into a profitable energy production company with a reputation for technical excellence with strict cost discipline. The Director's will continue to focus on the UK onshore but do not rule out acquisitions overseas in jurisdictions where the rule of law is strong. We understand the energy requirements and infrastructure constraints, combined with a development plan based on fundamentals, can lead to sustainable and profitable opportunities for investors. As such we are constantly reviewing potential projects that will complement our existing core skills and portfolio of assets.

From the point of view of sustainability, the Directors are aligned with the national energy objectives and look forward with enthusiasm to the opportunities ahead in the common goal of net zero. Whilst we will continue to win a return from legacy oil fields, the long-term preference remains for the acquisition of gas assets. There will be a requirement for oil and gas in Britain's energy mix for decades to come and Angus is committed to providing that energy during the transition to lower-carbon energy in the future.

Global Environment and Stewardship

As a Group we do have duties of stewardship to the wider environment of which we are acutely aware. At Angus we realise there needs to be significant improvement in the Energy Mix and the transition begins with the proper operation of the existing energy assets and the responsible development of new ones. We understand hydrocarbons are still needed but must be produced to the highest ESG standards.

When it comes to our existing operations or evaluating potential new projects, we are always focused on creating the least possible impact on the environment.

Local Environment

As a responsible North Sea Transition Authority ("NSTA") approved and Environment Agency ("EA") permitted UK operator, Angus Energy is committed to utilising industry best practices and achieving the highest standards of environmental management and safety. Our operations:

· Continuously assess and monitor environmental impact

· Promote internally and across our industry best practices for environmental management and safety

· Constant attention to maintaining our exemplary track record of safe oil and gas production

There were no reportable health and safety incidents during the year.

Community

Angus Energy seeks and maintains positive relationships with its local communities. We achieve this through our various forms of communication which include community liaison meetings, social media updates, RNS's and Investor Q & A sessions.

In general, we are guided by the following principles:

· Open and honest dialogue

· Engagement with stakeholders at all stages of development

· Proactively addressing local concerns

· Actively minimise impact on our neighbours

· Adherence to a strict health and safety code of conduct

Section 172 Statement

Under Section 172, 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 specified areas that relate, by and large, to wider stakeholder interest. Further details of these areas have been enumerated in the Stakeholder Engagement section on page 31 of the annual report.

Financial Review

The Group began the period with the following interests: 80% of Brockham (PL235), 80% of Lidsey (PL241), 25% of Balcombe (PEDL244) and 100% of Saltfleetby Gas Field (PEDL005) after acquisition of Saltfleetby Energy Limited on 23 May 2022.

The Group had a cash balance of £2.172m as at 30 September 2023.

During the period, the Company issued the following shares (please refer to note 15 for a detailed breakdown):

· 516,033,308 ordinary shares in relation to the conversion of the Kemexon Bridge facility,

· 25,000,000 ordinary shares in relation to the settlement of fees,

· 226,513,000 ordinary shares in relation to the settlement of fees,

· 27,447,470 ordinary shares in relation to the Overriding Royalty Interest ("ORRI") payable on production from the Saltfleetby Gas Field,

The Group had a cash balance of £2.163m at the end of the reporting year.

The Group generated £21.802m revenue from oil and gas production during the year (2023:

£28.208m).

The Group recorded a loss of £4.301m, which included an impairment of £4.770m. EBITDA for the period was £10.803m (2023: £17.002m). The group recorded a derivative profit of £10.822m in relation to the fair value movement of the derivative instrument which is based on future production and calculated using forward gas prices as at 30 September 2024. The derivative will be realised to a profit or loss when the payments under the derivative instruments become due (see note 22).

The Group's overall financial objectives are to increase revenue, return to profitability and enhance the asset base supporting the business. In order to monitor its progress towards achieving these objectives, the Group has set a number of key performance indicators, which deal predominately with revenue, profitability, margin and cash flow as above.

Governance, Compliance and Shareholder Relations

The Board consists of a Chief Executive Officer and Finance Director supervised by two experienced Non-Executive Directors. The Board meets regularly alongside with AIM Rules Committee, Remuneration Committee and Audit Committee meetings.

In general, the management structure is very flat. In total we have 27 employees, including management. The Company also relies on experienced third-party contractors.

We have appointed three compliance officers to deal with all our regulators and planning authorities, which are presently Surrey, Lincolnshire and West Sussex County Council, the NSTA, the Environment Agency and the Health & Safety Executive. Additionally, as a publicly listed company, we are answerable to the AIM Market Division and to the Financial Conduct Authority.

Compliance is an area which has grown more complicated and expensive in recent years, and we expect it to get more so. Regulators are being more proactive and pre-emptive, and we must anticipate their needs and expectations better than we have in the past. We should aim to maintain better dialogue with all regulators and planners and engage in more frequent use of pre-approval procedures where they are available.

Principal risks and uncertainties

Currency risks

The Group sells its produced crude oil and gas; oil is priced in US dollars and gas is priced in GBP. As the bulk of the Company's revenue and costs are in GBP, fluctuations in the US dollar, sterling exchange rate or fluctuations in the oil price have a minimal impact on the Group's financial position and performance. Notwithstanding the latter, the value of such transactions may be adversely affected by changes in currency exchange rates, which may have an adverse effect on the business, financial condition, results of operations and prospects of the Group. Management regularly reviews currency exposure with the aim of mitigating any downside exposure where possible.

Market risk

The demand for, and price of, oil and gas are highly dependent on a variety of factors beyond the Group's control. The continued marketing of the Group's oil and gas will be dependent on market fluctuations and the availability of processing and refining facilities and transportation infrastructure, including pipelines, access to roads, train lines and any other relevant options at economic tariff rates over which the Group may have limited or no control. Transport links (including roads and pipelines) may be inadequately maintained and subject to capacity constraints and economic tariff rates may be increased with little or no notice and without taking into account producer concerns. Producers of oil and gas negotiate sales contracts directly with oil and gas purchasers, with the result that the market determines the price of oil and gas. The price depends in part on oil and gas quality, prices of competing fuels, distance to market, the value of refined products and the supply/demand balance. The marketability and prices of oil and gas that may be discovered or acquired by the Group will be affected by numerous factors beyond its control. The Group has entered into commodity derivatives for its gas product to protect it from any downside market risk (see note 22 for further details).

Permitting risk

The Group exposed to the planning, environmental, licensing and other permitting risks associated with its operations particularly with development and exploration drilling operations.

The Group has to date been successful in obtaining the required permits to operate. Therefore, the Group considers that such risks are mitigated through compliance with regulations, proactive engagement with regulators, communities and the expertise and experience of the management team.

Reserve and resource estimates

No assurance can be given that hydrocarbon reserves and resources reported by the Group in the future are present as estimated, will be recovered at the rates estimated or that they can be brought into profitable production. Hydrocarbon reserve and resource estimates may require revisions and/or changes (either up or down) based on actual production experience and in light of the prevailing market price of oil and gas. A decline in the market price of oil and gas could render reserves uneconomic to recover and may ultimately result in a reclassification of reserves as resources. Unless stated otherwise, the hydrocarbon reserve and resources data relating to Lidsey and Brockham contained in the financial statements are taken from the Competent Person's Report, at the time of AIM admission on 14 November 2016 and the hydrocarbon reserve and resources data relating to Saltfleetby are taken from the Saltfleetby Competent Person's Report published in October 2023. 

There are uncertainties inherent in estimating the quantity of reserves and resources and in projecting future rates of production, including factors beyond the Group's control. Estimating the amount of hydrocarbon reserves and resources is an interpretive process and, in addition, results of drilling, testing and production subsequent to the date of an estimate may result in material revisions to original estimates.

The hydrocarbon resources data extracted from the Competent Person's Report are estimates only and should not be construed as representing exact quantities. The nature of reserve quantification studies means that there can be no guarantee that estimates of quantities and quality of the resources disclosed will be available for extraction. Therefore, actual production, revenues, cash flows, royalties and development and operating expenditures may vary from these estimates. Such variances may be material. Reserves estimates are based on production data, prices, costs, ownership, geophysical, geological and engineering data, and other information assembled by the Group (which it may not necessarily have produced).

The estimates may prove to be incorrect, and potential investors should not place reliance on the forward-looking statements (including data included in the Competent Person's Report

or taken from the Competent Person's Report and whether expressed to have been certified by the Competent Person or otherwise) concerning the Group's reserves and resources or production levels. Hydrocarbon reserves and resources estimates are expressions of judgment based on knowledge, experience and industry practice. They are therefore imprecise and depend to some extent on interpretations, which may prove to be inaccurate. Estimates that were reasonable when made may change significantly when new information from additional analysis and drilling becomes available.

This may result in alterations to development and production plans which may, in turn, adversely affect operations. If the assumptions upon which the estimates of the Group's hydrocarbon resources have been based prove to be incorrect, the Group (or the operator of an asset in which the Group has an interest) may be unable to recover and produce the estimated levels or quality of hydrocarbons set out in this document and the Group's business, prospects, financial condition or results of operations could be materially and adversely affected.

Events after the reporting period

On 25 February 2025, the Company struck additional hedges as per the requirements of the rolling gas price protection policy in the Trafigura Facility. Please see note 27 for details.

Outlook

With the successful refinancing of the Company's debt and steady production at Saltfleetby, the Company looks forward to achieving positive operational cashflow with the introduction of the new booster compressor, the rolling off of unfavourable legacy hedges and the potential drilling of an additional production well. The Company will continue to explore further oil and gas opportunities and mature its storage project with the intention of not only creating shareholder value but also to address the urgent need for transition energy projects.

Approved by the Board of Directors and signed on behalf of the Board.

Richard Herbert

Chief Executive Officer

5 March 2025

Details of all our assets and operations can be found at www.angusenergy.co.uk

Directors' Report  

The Directors present their report together with the audited consolidated financial statements of Angus Energy plc for the year ended 30 September 2024.

Results and Dividends

The Group recorded a loss of £4.301m, which included an impairment of £4.770m. EBITDA for the period was £10.803m (2023: £17.002m). The Group recorded an Operating loss of £2.697m and when adjusted for the derivative financial instrument profit, realised derivative costs and finance costs during the period, resulted in an adjusted operating loss of £15.123m (2023: loss of £19.156m). The derivative profit is based on future production and calculated using forward gas prices as at 30 September 2024. The derivative will be realised to a profit or loss when the payments under the derivative instruments become due (see note 22).

Directors

The Directors who were in office during the year and up to the date of signing the financial statements, unless stated, were:

The Directors of the Company at the date of this report, and their biographical summaries, are given on page 26 of the annual report.

The Directors' remuneration is detailed in the Directors' Remuneration Report on page 24 to 25 of the annual report. All Directors benefit from the provision of Directors' and Officers' indemnity insurance policies. Premiums payable to third parties were £26,000 (2023- £23,000).

Research and development

As disclosed in Note 10 and 11, the Group incurred expenditure in the development of oil and gas fields.

Share Capital

At the date of this report ordinary shares are issued and fully paid. Details of movement in share capital during the year are given in note 15 to the financial statements.

Substantial Shareholders

As of the date of this report the Group had been notified of the following interests of 3% or more in the Group's ordinary share capital:

Share options

There were 57,500,000 Share Options issued and 50,999,803 surrendered during the reporting period. See note 16 for further details.

Financial Instruments

The financial risk management objectives and policies of the Group in relation to the use of financial instruments and the exposure of the Group and its subsidiary undertakings to its main risks, credit risk and liquidity risk, are set out in note 23 to the financial statements.

Employees

The Group had an average 27 employees as of 30 September 2024 (2023: 28). Employees are encouraged to directly participate in the business through an Enterprise Management Incentive Scheme, which set out in note 16 to the financial statements. In accordance with the Company's Bonus arrangements, the Board has approved a performance-related bonus scheme for all employees which will pay out if business targets in 2025 are achieved.

Going Concern

The Directors have assessed the Group's working capital forecasts for a minimum of 12 months from the date of the approval of these financial statements. In undertaking this assessment, the Directors have reviewed the underlying business risks, and the potential implications these risks would have on the Group's liquidity and its business model over the assessment period. This assessment included a detailed cash flow analysis prepared by the management, and they also considered several reasonably plausible downside scenarios. The scenarios included potential delays to expected future revenues. In making their overall assessment, the Directors took into account the advanced stage of the development of the Saltfleetby gas field and the impact of any breaches in covenants under the Trafigura Debt Facility and the derivative instrument if there were delays in gas production. As outlined in note 22 the Group has committed to future cash flows as a result of the derivatives in place which are due even if gas is delayed.

Forecast cashflows place reliance on there not being a suspension of gas production for an unforeseen significant period. Current production levels are in excess of derivative requirements. There are no present operational concerns and whilst there are mitigating steps that could be taken, the contracted derivative will need to be settled at a fixed point in time. In the event of any significant production delays or continued covenant breaches, this would be subject to negotiation with Trafigura or further funding may be required.

Based on the current management plan, management considered that the working capital from the expected revenue generation, along with the funds made available from the recently announced Trafigura refinancing, are sufficient for the expenditure to date as well as the planned forecast expenditure for the forthcoming twelve months from the date of the approval of this financial statement. As a result of that review the Directors consider that it is appropriate to adopt the going concern basis preparation, notwithstanding the material uncertainty relating to the continued production of gas as outlined above. The Director has assessed the company's ability to continue as a going concern and has reasonable expectation that the company has adequate resources to continue operations for a period of at least 12 months from the date of approval of these financial statements.

These financial statements do not include any adjustment that would be required if the Group or Company was not a going concern.

Events after the reporting period

Events after the reporting period have been disclosed in Note 27.

Disclosure of Information to the Auditor

In the case of each person who was a Director at the time this report was approved:

· so far as the Director was aware there was no relevant audit information of which the Company's auditor was unaware; and

· the Director has taken all steps that he ought to have taken as a Director to make himself aware of any relevant audit information and to establish that the Company's auditor was aware of that information.

Auditor

A resolution to reappoint the auditor, Crowe U.K. LLP, will be proposed at the forthcoming Annual General Meeting.

Approved by the Board of Directors and signed on behalf of the Board.

Richard Herbert

Chief Executive Officer

5 March 2025

Opinion

We have audited the financial statements of Angus Energy plc (the "Parent Company") and its subsidiaries (the "Group") for the year ended 30 September 2024, which comprise:

· the Consolidated statement of comprehensive income for the year ended 30 September 2024;

· the Consolidated and Parent Company statements of financial position as at 30 September 2024;

· the Consolidated and Parent Company statements of changes in equity for the year then ended;

· the Consolidated statement of cash flows for the year then ended; and

· the notes to the financial statements, including a summary of accounting policies.

The financial reporting framework that has been applied in the preparation of the Group financial statements is in accordance with UK adopted international accounting standards. The financial reporting framework that has been applied in the preparation of the Parent Company financial statements is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion:

· the financial statements give a true and fair view of the state of the Group's and of the Parent

Company's affairs as at 30 September 2024 and of the Group's loss for the year then ended;

· the Group financial statements have been properly prepared in accordance with UK adopted international accounting standards;

· the Parent Company financial statements have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

· the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.

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 Group and Parent Company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard as applied to listed entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material uncertainty related to going concern

We draw attention to note 3.3 in the financial statements, which identifies that the Group and Parent Company are reliant on the ability to generate working capital from their producing assets in order to meet their obligations under the Group's derivative agreements. As stated in note 3.3, these events or conditions, along with the other matters as set forth in note 3.3, indicate that a material uncertainty exists that may cast significant doubt on the Group's and Parent Company's ability to continue as a going concern. Our opinion is not modified in respect of this matter.

In auditing the financial statements. We have concluded that the Directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the Directors' assessment of the Group's and Parent Company's ability to continue to adopt the going concern basis of accounting included:

• Reviewing management's detail cash flow analysis for the Group and parent company for a period of more than 12 months from the date of approval of the financial statements.

• Checking the numerical accuracy of management's detail cash flow analysis

• Challenging management on the assumptions underlying those detail cash flow analysis and sensitised them to reduce anticipated net cash inflows from future trading activities.

• Obtained the latest management results post year end 30 September 2024 to review how the Group and parent company are trending toward achieving the forecast.

• Performed sensitivity analysis on key inputs of the forecast by calculating the impact of various scenarios and considering the impact on the group and parent Company's ability to continue as a going concern in the event that a downward scenario occurs.

• Reviewed post year end production levels against budgeted amounts.

• Assessing the completeness and accuracy of the matters described in the going concern disclosure within the accounting policies as set out in Note 3.3.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

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 is £1,000,000 (2023: £2,739,000) which is based on approximately 2.5% of Group net assets (2023: based on 2% of the derivative's fair value movement of £136.9m). In 2023, a Specific materiality for the Group financial statements other than the derivative was determined to be £917,000 based on 3% of Group net assets excluding the derivative balance. The parent company overall materiality is set at £500,000 based on a percentage of total assets.

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. This is set at £700,000 (2023: £512,000) for the group and £350,000 (2023: £55,000) for the parent company.

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 £50,000 (2023:

£46,000). 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 Group audit scope included full scope audits of the three Group companies which account for 100% of the Group's net assets and loss before tax by the Group audit team.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified. These matters included 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. We set out below, together with the material uncertainty related to going concern above, those matters we identified as key audit matters.

This is not a complete list of all risks identified by our audit.

Our audit procedures in relation to these matters were designed in the context of our audit opinion as a whole. They were not designed to enable us to express an opinion on these matters individually and we express no such opinion.

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; and;

• the strategic report and directors' report have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In light of the knowledge and understanding of the Group and the Parent Company and their 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 Parent Company, or returns adequate for our audit have not been received from branches not visited by us; or

• the parent company financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

Responsibilities of the directors for the financial statements

As explained more fully in the directors' responsibilities statement set out on page 30, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the group's and parent company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below however the primary responsibility for the prevention and detection of fraud lies with management and those charged with governance of the Company.

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 financial reporting standards and 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.

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 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

· We obtained an understanding of the legal and regulatory frameworks that are applicable to the Group and the procedures in place for ensuring compliance. The most significant identified were the Companies Act 2006 and the terms of the Group's licence. Our work included direct enquiry of the Company Secretary who oversees all legal proceedings, reviewing Board and relevant committee minutes and inspection of correspondence. We tested the appropriateness of journal entries recorded in the general ledger and other adjustments made in the preparation of the Financial Statements

· We used data analytic techniques to identify any unusual transactions or unexpected relationships, including considering the risk of undisclosed related party transactions; and

· 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).

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 for the audit of the financial statements is located 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 Parent Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Parent Company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Parent Company and the Parent Company's members as a body, for our audit work, for this report, or for the opinions we have formed.

Leo Malkin

Senior Statutory Auditor

For and on behalf of

Crowe U.K. LLP

Statutory Auditor

55 Ludgate Hill

London EC4M 7JW

Date: 5 March 2025

The notes on page 47 to 74 of the annual report form part of these financial statements

All amounts are derived from continuing operations.

The notes on page 47 to 74 of the annual report form part of these financial statements

The financial statements were approved by the Board of Directors and authorised for issue on 5 March 2025 and were signed on its behalf by:

Richard Herbert - Director

Company number: 09616076

The notes on page 47 to 74 of the annual report form part of these financial statements

The notes on page 47 to 74 of the annual report form part of these financial statements

1. General information

Angus Energy Plc (the "Company") is incorporated and domiciled in the United Kingdom. The address of the registered office is Building 3 Chiswick Park, 566 Chiswick High Road, London, W4 5YA.

The principal activity of the Company is that of investment holding. The principal activity of the Group is that of oil and gas extraction for distribution to third parties. The principal activities of the various operating subsidiaries are disclosed in note 12.

2. Presentation of financial statements

The financial statements have been presented in Pounds Sterling (£) as this is the currency of the primary economic environment that the group operates in. The amount is rounded to the nearest thousand (£'000), unless otherwise stated.

3. Accounting policies

The material accounting policies applied in the preparation of these financial statements are set out below.

3.1 Basis of preparation

These financial statements have been prepared in accordance with UK adopted international accounting standards and with the requirements of the Companies Act 2006. The financial statements have been prepared on the historical cost basis except for certain assets and liabilities which are stated at their fair value.

3.2 New standards, amendments to and interpretations to published standards not yet effect

The Directors have considered those standards and interpretations, which have not been applied in the financial statements but are relevant to the Group's operations, that are in issue but not yet effective and do not consider that they will have a material impact on the future results of the Group.

3.3 Going concern

The Group recorded a loss of £4.301m, which included an impairment of £4.770m. EBITDA for the period was £10.803m (2023: £17.002m). The group recorded a derivative profit of £10.822m in relation to the fair value movement of the derivative instrument which is based on future production and calculated using forward gas prices as at 30 September 2024. The derivative will be realised to a profit or loss when the payments under the derivative instruments become due (see note 22).

The Group meets its day to day working capital requirements through existing cash reserves. At 30 September 2024, the Group had £2.163 million of available cash. During the year, the Group raised capital to cover outstanding liabilities of £4.405 million as a result of placing of new ordinary shares. On 27 February 2024, the Company announced that the terms had been agreed with a subsidiary of Trafigura Group PTE Ltd ("Trafigura ") for a refinancing of its existing debt. The Company signed definitive loan documentation and drew down the full £20m available under the facility (see note 21 for further details), with the funds used to pay down existing debt, stabilise the Company's creditor position and provide the short and medium-term capex needs to advance key programmes at Saltfleetby and Brockham Fields.

The Directors continue to take the prudent decisions to preserve working capital. The Directors have assessed the Group's working capital forecasts for a minimum of 12 months from the date of the approval of these financial statements. In undertaking this assessment, the Directors have reviewed the underlying business risks, and the potential implications these risks would have on the Group's liquidity and its business model over the assessment period. This assessment included a detailed cash flow analysis prepared by the management, and they also considered several reasonably plausible downside scenarios. The scenarios included potential delays to expected future revenues. In making their overall assessment, the Directors took into account the performance of the Saltfleetby gas field, the introduction of a third compressor (booster compressor) to increase production in the short term and extend field life. The Directors also assessed the impact of any breaches under the Trafigura Debt Facility and the derivative instrument if there were delays in gas production. As outlined in note 22 the Group has committed to future cash flows as a result of the derivatives in place which are due even if gas is delayed.

Forecast cashflows place reliance on there not being a suspension of gas production for an unforeseen significant period. Current production levels are in excess of derivative requirements and there are no present operational concerns. Contracted derivatives will need to be settled at fixed points in time. In the event of any significant production delays or ongoing breaches under the Trafigura Facility, this would be subject to negotiation with Trafigura or further funding may be required.

Based on the Company's current plan, management considered that the working capital from available cash and the expected revenue generation are sufficient for the expenditure to date as well as the planned forecast expenditure for the forthcoming twelve months from the date of the approval of this financial statement. As a result of that review the Directors consider that it is appropriate to adopt the going concern basis of preparation, notwithstanding the material uncertainty relating to the continued production of gas as outlined above. The Directors have assessed the company's ability to continue as a going concern and have reasonable expectation that the Company has adequate resources to continue operations for a period of at least 12 months from the date of approval of these financial statements.

These financial statements do not include any adjustment that would be required if the Group or Company was not a going concern.

3.4 Basis of consolidation

The consolidated financial statements comprise the financial information of the Company and its subsidiaries (the "Group") made up to the end of the reporting period. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

The consolidated financial statements present the results of the Company and its subsidiaries and joint arrangements as if they formed a single entity. Inter-company transactions and balances between group companies are therefore eliminated in full. The financial information of subsidiaries is included in the Group's financial statements from the date that control commences until the date that control ceases.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group. When necessary, adjustments are made to the financial information of subsidiaries to bring their accounting policies into line with the Group's accounting policies. All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full, on consolidation.

3.5 Oil and natural gas exploration and evaluation (E&E) expenditure

Oil and natural gas exploration and evaluation expenditure are accounted for by using the successful efforts method of accounting.

(a) Licence and property acquisition costs

Licence and property leasehold acquisition costs are capitalised within intangible fixed assets and amortised on a straight-line basis over the estimated period of exploration. Upon determination of economically recoverable reserves, amortisation the remaining costs are aggregated with exploration expenditure and held on a field-by-field basis as proved properties awaiting determination within intangible fixed assets. When development is sanctioned, the relevant expenditure is transferred to tangible production assets.

(b) Exploration expenditure

Geological and geophysical exploration costs are charged against income as incurred. Costs directly associated with an exploration well are capitalised as an intangible asset until drilling of the well is complete and the results have been evaluated. If hydrocarbons are not found, the exploration expenditure is written off as a dry hole. If hydrocarbons are found, and subject to further appraisal activity, are likely to be capable of commercial development, the costs continue to be carried as an asset. All such carried costs are subject to regular technical and commercial management review to confirm the continued intent to develop or otherwise extract value from the discovery. When this is no longer the case, the costs are written off. When proven and probable reserves of oil and gas are determined and development is sanctioned, the relevant expenditure is transferred to tangible production assets.

(c) Development expenditure

Expenditure on the construction, installation and completion of infrastructure facilities such as platforms, pipelines and the drilling of development wells, including unsuccessful development or delineation wells, is capitalised within tangible production assets.

(d) Maintenance expenditure

Expenditure on major maintenance, refits or repairs is capitalised where it enhances the performance of an asset above its originally assessed standard of performance; replaces an asset or part of an asset which was separately depreciated, and which is then written off; or restores the economic benefits of an asset which has been fully depreciated. All other maintenance expenditure is charged to income as incurred.

Treatment of E&E assets at conclusion of appraisal activities

Intangible E&E assets related to each exploration licence/prospect are carried forward, until the existence (or otherwise) of commercial reserves has been determined. If commercial reserves have been discovered, the related E&E assets are assessed for impairment on a cost pool basis as set out below, and any impairment loss of the relevant E&E assets is then reclassified as development and production assets.

3.6 Financial instruments

Financial assets and financial liabilities are recognised in the Group's statement of financial position when the Group becomes a party to the contractual provisions of the instrument.

Loan and receivables

Loans and receivables are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses.

Trade receivables are recognised initially at the transaction price and subsequently measured at amortised cost, less any impairment losses.

Trade and other payables

Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured at amortised cost, where applicable, using the effective interest method, with interest expense recognised on an effective yield basis.

Borrowing cost

Borrowing costs that are directly attributable to the acquisition, development, or production of a qualifying asset, that necessarily takes substantial time to prepare, are capitalised as part of the cost the respective asset. It consists of interest and other costs in connection with the borrowing of the funds. Capitalisation commences when activities to prepare the asset are in progress or in future re-development activities and ceases when all activities necessary to prepare the asset are completed. Other borrowing costs are recognised in the statement of profit and loss and other comprehensive income in the period in which they are incurred.

Derivative financial instrument

The group uses derivative financial instruments to hedge its commodity price risk, such as commodity swap contracts. The Group has elected not to apply hedge accounting on this derivative. Derivative financial instruments are recognised at fair value on the date on which the contract is entered into and subsequently measured at fair value. Derivatives are carried as a financial asset when the fair value is greater than its initial measurement and financial liabilities when fair value is negative. Any gains or losses arising from the changes in fair value of the derivatives are recognised in the statement of Comprehensive Income as a profit or loss for the year.

As at 30 September 2024, the Group's derivative liability amounted to £10.892 million as a result of the hedging agreement entered into with Trafigura Group PTE Ltd under a Swap Contract (see Note 22)

In determining the fair values of the financial asset and liabilities, instruments are analysed into Level 1 to 3 as follows:

Level 1: Fair value measurements derive from quoted prices (unadjusted) in active market for identical assets or liabilities.

Level 2: Fair value measurement derives from inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3: Fair value measurements derive from valuation techniques that include inputs for the asset or liability that are not based on observable market data.

The carrying value of the financial instrument approximates their fair value and was valued using Level 2 fair value hierarchy valuation.

3.7 Impairment of assets

(a) Financial assets

Impairment provisions for current receivables are recognised based on the simplified approach within IFRS 9. During this process the probability of the non-payment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receivables. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised within administration costs in the consolidated statement of comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset. For those for which credit risk has increased significantly, lifetime expected credit losses are recognised, unless further information becomes available contrary to the increased credit risk. For those that are determined to be permanently credit impaired, lifetime expected credit losses are recognised.

(b) Non-financial assets

The carrying amounts of the Group's non-financial assets, other than deferred tax assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, then the asset's recoverable amount is estimated. For assets that have indefinite lives, the recoverable amount is estimated at each reporting date.

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its 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 risk specific to the asset. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the "cash generating unit").

An impairment loss is recognised if the carrying amount of an asset or its cash generating unit exceeds its estimated recoverable amount. Impairment losses are recognised in the profit or loss.

3.8 Oil and gas production assets

Expenditures related to the construction, installation or completion of infrastructure facilities, such as platforms and pipelines, and the drilling of development wells, including delineation wells, are capitalised within oil and gas production assets. The initial cost of an asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of the abandonment cost for qualifying assets, and borrowing costs (see note 3.13 on decommissioning).

Oil and gas production assets are depreciated using a unit of production method. The cost of producing wells is amortised over total proved and undeveloped oil and gas reserves of the field concerned, except in the case of assets whose useful life is shorter than the lifetime of the field, in which case the straight-line method is applied. Rights and concessions are depleted on the unit-of-production basis over the total proved developed and undeveloped reserves of the relevant area. The unit-of-production rate calculation for the depreciation of field development costs takes into account expenditures incurred to date, together with sanctioned future development expenditure.

The consideration receivable on disposal of an item of property, plant and equipment or an intangible asset is recognised initially at its fair value by the Group. However, if payment for the item is deferred, the consideration received is recognised initially at the cash price equivalent. The difference between the nominal amount of the consideration and the cash price equivalent is recognised as interest revenue. Any part of the consideration that is receivable in the form of cash is treated as a financial asset and is accounted for at amortised cost.

3.9 Contingent liabilities

A contingent liability is a possible obligation that arises from past events and whose existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. It can also be a present obligation arising from past events that is not recognised because it is not probable that outflow of economic resources will be required, or the amount of obligation cannot be measured reliably.

A contingent liability is not recognised but is disclosed in the notes to the accounts. When a change in the probability of an outflow occurs so that the outflow is probable, it will then be recognised as a provision. A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain events not wholly within the control of the Group.

The Company and its subsidiaries are, from time-to-time, parties to legal proceedings and claims which arise in the ordinary course of business. The Directors do not anticipate that the outcome of these proceedings and claims will have a material adverse effect on the Group's financial position or on the results of its operations.

3.10 Cash and Cash Equivalent

Cash in the statement of financial position is cash held on call with banks.

3.11 Income tax

Income tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit as reported in the comprehensive 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 not taxable or tax deductible. The Group's liability for current tax is calculated using tax rates (and tax laws) that have been enacted or substantively enacted in countries where the Group and its subsidiaries operate by the end of the financial period.

Deferred income taxes are calculated using the balance sheet method. Deferred tax is generally provided on the temporary difference between the carrying amounts of assets and liabilities and their tax bases. However, deferred tax is not provided on the initial recognition of goodwill, nor on the initial recognition of an asset or liability unless the related transaction is a business combination or affects tax or accounting profit or at the time of the transaction, it does not give rise to equal taxable and deductible temporary differences. Deferred tax on temporary differences associated with shares in subsidiaries and joint ventures is not provided if reversal of these temporary differences can be controlled by the Group and it is probable that reversal will not occur in the foreseeable future. In addition, tax losses available to be carried forward as well as other income tax credits to the Group are assessed for recognition as deferred tax assets.

Deferred tax liabilities are provided in full, with no discounting. Deferred tax assets are recognised to the extent that it is probable that the underlying deductible temporary differences will be able to be offset against future taxable income. Current and deferred tax assets and liabilities are calculated at tax rates that are expected to apply to their respective period it is recognised, provided they are enacted or substantively enacted at the reporting date.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Consolidated Statement of Comprehensive Income, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity.

3.12 Foreign currencies

Monetary assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the reporting date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of the transaction. Exchange differences are recognised in profit or loss.

3.13 Decommissioning

Provision for decommissioning is recognised in full on the installation of oil and gas production facilities. The amount recognised is the present value of the estimated future expenditure determined in accordance with local conditions and requirements. A corresponding tangible fixed asset of an amount equivalent to the provision is also created. This is subsequently depreciated as part of the capital costs of the production and transportation facilities. Any change in the present value of the estimated expenditure is reflected in an adjustment to the provision and fixed assets.

3.14 Revenue

As described in note 5, the Group's revenue is driven by the sale of natural gas, condensate and crude oil, the goods are sold on their own in separate identified contracts with customers. The gas sales agreement has a fixed discount to the ICIS Heren NBP price, the oil offtake agreement has a fixed discount to the Brent forward curve while the condensate offtake agreement has a fixed discount to the Naphtha forward curve. Delivery point of the sale is the point at which the natural gas passes from the Company's pipeline to the national grid or when crude oil passes from the delivery tanker to the customers specified storage terminal, which represents the point at which the Group fulfils its single performance obligation to its customer under contracts for the sale of natural gas or crude oil. Revenue from the production of oil and gas, in which the Group has an interest with other producers is recognised proportionately based on the Group's working interest and the terms of the relevant production sharing contracts.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the applicable effective interest rate.

3.15 Share-based payments

The Group has applied IFRS 2 Share-based Payment for all grants of equity instruments.

The Group issues equity-settled share-based payments to its employees. Equity-settled share-based payments are measured at fair value at the date of grant. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group's estimate of the shares that will eventually vest.

Fair value is measured using the Black Scholes model. The expected life used in the model has been adjusted, based on management's best estimate. The inputs to the model include: the share price at the date of grant, exercise price expected volatility, risk free rate of interest.

4. Critical accounting estimates and sources of estimation uncertainty

In applying the accounting policies, the directors may at times require to make critical accounting judgements and estimates about the carrying amount of assets and liabilities. These estimates and assumptions, when made, are based on historical experience and other factors that the directors consider are relevant.

The key estimates and assumptions concerning the future and other key sources of estimation uncertainty at the end of the financial year, that have significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are reviewed are as stated below.

Key accounting judgements

(a) Impairment of non-current asset

The Group's non-current assets represent its most significant assets, comprising oil and gas production assets, exploration and evaluation (E&E) assets on its onshore sites.

Management is required to assess exploration and evaluation (E&E) assets for indicators of impairment and has considered the economic value of individual E&E assets. The carrying amount of the E&E assets are subject to a separate review for indicators of impairment, by reference to the impairment indicators set out in IFRS 6, which is inherently judgmental.

Processing operations are large, scarce assets requiring significant technical and financial resources to operate. Their value may be sensitive to a range of characteristics unique to each asset and key sources of estimation uncertainty include proved reserve estimates, future cash flow expected to arise from the cash-generating unit and a suitable discount rate.

In performing impairment reviews, the Group assesses the recoverable amount of its operating assets principally with reference to the Group's independent competent person's report, estimates of future oil and gas prices, operating costs, capital expenditure necessary to extract those reserves and the discount rate to be applied to such revenues and costs for the purpose of deriving a recoverable value.

As detailed in notes 10 and 11, the carrying amount of the Group's E&E assets and oil and gas production assets at 30 September 2024 were approximately £70.951 (2023: £80.248 million) and £5.456 million (2023: £5.628 million) respectively.

The methods, key assumptions, sensitivity and possible outcomes in relation to the calculation of the estimates are detailed in note 10.

(b) Going concern

Forecast cashflows place reliance on there not being a suspension of gas production for an unforeseen significant period. Current production levels are in excess of derivative requirements. There are no present operational concerns and whilst there are mitigating steps that could be taken, the contracted derivative will need to be settled at a fixed point in time. In the event of any significant delay this would be subject to further negotiation with the derivative holder or further funding may be required.

As disclosed in note 3.3, the directors consider the Group and the Company to be a going concern while the Group will continue to operate under the management's plan and the Group expects to be able to continue to meet all finance obligations as they fall due for at least next twelve months from the date of approval these financial statements.

Key accounting estimates

(a) Decommissioning costs

Decommissioning costs will be incurred by the Group at the end of the operating life of some of the Group's facilities and properties. The Group assesses its decommissioning provision at each reporting date. The ultimate decommissioning costs are uncertain, and cost estimates can vary in response to many factors, including changes to relevant legal requirements, the emergence of new restoration techniques or experience at other production sites. The expected timing, extent and amount of expenditure may also change - for example, in response to changes in reserves or changes in laws and regulations or their interpretation. Therefore, significant estimates and assumptions are made in determining the provision for decommissioning. As a result, there could be significant adjustments to the provisions established which would affect future financial results.

External valuers may be used to assist with the assessment of future decommissioning costs. The involvement of external valuers is determined on a case-by-case basis, taking into account factors such as the expected gross cost and timing of abandonment, and is approved by the directors. Selection criteria include market knowledge, reputation, independence and whether professional standards are maintained.

As detailed in note 20, the provision at the reporting date represents management's best estimate of the present value of the future decommissioning costs required.

(b) Valuation of derivative liability

On 01 June 2021, Angus Energy Weald Basin no. 3 Limited (AWB3) entered into a derivative agreement with Mercuria Energy Trading SA (METS) under a Swap contract as part of the condition of the Loan Facility (see note 21). The derivative instrument was used to mitigate price risk on the expected future cash flow from the production of Saltfleetby Gas Field. Under the Swap contract, AWB3 will pay METS the floating price while METS will pay AWB3 the fixed price on the sale of gas from the field.

After the refinancing with Trafigura, the existing Mercuria hedges were novated and restructured with Trafigura, incurring a credit charge of 6 pence per therm.

The carrying value of the financial instrument approximates their fair value and was valued using Level 2 fair value hierarchy valuation. The fair value has been determined with reference to commodity yield curves, as adjusted for liquidity and trading volumes as at the reporting date supplied by the Group's hedging partner, Trafigura. Management also assessed the valuation of these swaps using publicly available forward pricing curves.

5. Revenue and segment information

Currently, the Group's principal revenue is derived from the sale of natural gas and oil. All revenue arose from continuing operations within the United Kingdom. Therefore, management considers no detail of operating and geographical segments information is to be reported. Nonetheless, the Group's revenue can be classified into the following streams:

All the non-current assets of the Group are located in the United Kingdom. All revenue arising from the sale of natural gas is derived from sales to Trafigura and represents over 92% of the Company's revenue.

6. Operating profit

Operating profit is stated after charging:

Adjusted operating loss

The adjusted operating loss has been arrived at after crediting:

7. Finance cost

8. Employee benefit expense

In addition to the above, directors remuneration from the group totalled £609,000 which comprised £574,000 salaries and £35,000 termination payment (2023: £1,188,000 salaries).

Key management are considered to be the directors. Details of each director's emoluments are in the directors' remuneration report.

9. Taxation on ordinary activities

No liability to corporation tax arose for the years ended 30 September 2024 and 2023, as a result of underlying losses brought forward.

Reconciliation of effective tax rate

The Group has incurred indefinitely available tax losses of £166.4m (2023: £179.1m), which includes tax loss incurred on the acquisition of Saltfleetby Energy Limited, to carry forward against future taxable income of the subsidiaries in which the losses arose and they cannot be used to offset taxable profits elsewhere in the Group.

10. Oil and gas production assets

As at 30 September 2024, the Group retained a 100% interest in the Saltfleetby Gas Field, an 80% interest in the Lidsey Oil Field, an 80% interest in the Brockham Oil Field and is still the operator of all the fields.

In assessing whether an impairment is required, the carrying value of the asset or cash generating unit ("CGU") is compared with its recoverable amount. The recoverable amount is determined from value in use calculations based on cash flow projections from revenue and expenditure forecasts covering the economic life of the field. Assumptions involved in impairment measurement include estimates of commercial reserves and production volumes, future crude oil and gas prices, discount rates and the level and timing of expenditures, all of which are inherently uncertain. The key assumptions used are as follow:

The growth rate is assumed to be zero and the level of production is constant on the basis the production plant is assumed to be at the most efficient capacity over the period of extraction.

Commercial reserves are proven and probable ("2P") oil and gas reserves, calculated on an entitlement basis. Estimates of commercial reserves underpin the calculation of depletion and amortisation on a Unit of Production ("UOP") basis. Estimates of commercial reserves include estimates of the amount of oil and gas in place, assumptions about reservoir performance over the life of the field and assumptions about commercial factors which, in turn, will be affected by the future oil and gas price.

Annual estimates of oil and gas reserves are generated internally by the Group with external input from operator profiles and/or a Competent Person. These are reported annually to the Board. The self-certified estimated future production profiles are used in the life of the fields which in turn are used as a basis in the value-in-use calculation.

The discount rate is based on the specific circumstances of the Group and its operating segment, with appropriate adjustments made to reflect the risks specific to the CGU and to determine the pre-tax rate. In considering the discount rates applying to the CGU, the directors have considered the relative sizes, risks and the inter-dependencies of its CGU. An increase of 6% to the discount rate used for the Saltfleetby Gas Field would lead to an increased impairment to the carrying value of the CGU and an increase of 4% to the discount rate used for the Brockham Oil Field would lead to an increased impairment of £100,000 to the carrying value of the CGU.

In performing the impairment review, management assessed the economic value of individual production assets. Following the analysis in which management considered the lower than expected production rates of BRX4Z following the workover performed in May 2024, an impairment charge of £4.770m was recorded for Brockham Oil Field.

Furthermore, a sensitivity analysis has been carried out for Saltfleetby gas field and Brockham oil field and the results of the analysis can be summarised as follows:

· The estimated natural gas price would need to fall by circa 10 percentage points lower than the basis assumption before an impairment of the Saltfleetby gas field would need to be considered.

· The estimated brent crude price would need to fall by circa 4 percentage points lower than the base assumption for Brockham before an increased impairment of £100,000 to the respective oil field would need to be considered.

11. Exploration and evaluation assets

In performing impairment review, the Group assessed the economic value of individual exploration and evaluation (E&E) assets and had considered no indication of impairment to these E&E assets. In respect of Balcombe, the Directors have considered the likelihood of a successful appeal. Should the appeal be unsuccessful the management will consider further legal options and assess whether an impairment is necessary. See Strategic Review on page 6 of the annual report.

12. Subsidiaries

The details of the subsidiaries are as follows:

* indirect wholly owned by Angus Energy Weald Basin No.2 Limited (AEWB2).

The registered office address of the respective entity as follow:

13. Available for sale financial investments

Financial investments are shares held in Alba Mineral Resources Plc (Alba) consisting of 12,407,910 shares.

The changes in the value of these investments have been determined directly by reference to the published price quoted on AIM at the reporting date.

14. Trade and other receivables

The carrying amount of trade and other receivables approximates to their fair value.

15. Share capital and Share Premium

Allotted, called up and fully paid:

On 6 November 2023, the company issued 516,033,308 ordinary shares at 0.66 pence per share. They were issued in relation to the Kemexon £3m Bridge Loan facility conversion.

On 7 March 2024, the company issued 25,000,000 ordinary shares at 0.4 pence per share. They were fee shares issued in relation to Trafigura Loan Facility.

On 27 March 2024, the company issued 226,513,000 ordinary shares at 0.4 pence per share. They were fee shares issued in relation to Trafigura Loan Facility.

On 15 May 2024, the company issued 27,448,470 shares at 0.3544 pence per share. They were issued in relation to the agreed ORRI settlement.

16. Share-based payments

In 2016, the Group implemented an Enterprise Management Incentive Scheme followed by a NED and Consultant Share Option Scheme (The Scheme).

At 30 September 2024, the following share options and warrants were outstanding in respect of the Ordinary shares:

The weighted average exercise price of share options and warrants was £0.01717 at 30 September 2024 (2023: £0.0195). The weighted average remaining contractual life of options and warrants outstanding at the end of the year was 5 years (2023:3 years). The weighted average fair value of share option was £0.0067 (2023: £0.0128) each on the grant date. The vesting criteria for the share options are subject to share price growth reaching the target level.

These fair values were calculated using the Black Scholes warrant pricing model. The inputs into the model were as follows:

The Group recognised a share-based payment charge of approximately £0.410m (2023: £1.377m) relating to the options issued in the period. The Group recognised finance costs of £0.817m (2023: £1,663) relating to the warrants issued as part of the loan arrangement during the period.

No options were exercised in both reporting year 2023 and 2024. There were 50,999,803 share options cancelled during 2024. There were no Warrants exercised during 2024. There remain 33,426,188 options and 791,633,886 warrants exercisable as at 30 September 2024.

17. Reserves

Merger reserve

The merger reserve arose on the acquisition of Angus Energy Holdings Limited by the Company.

18. (Loss)/Earnings per share ((LPS)/EPS)

Basic LPS/EPS amounts are calculated by dividing the profit or loss for the year attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the period.

Diluted LPS/EPS amounts are calculated by dividing the profit or loss for the year attributable to equity holders of the Group by the weighted average number of ordinary shares outstanding during the period plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The earnings per share information based upon the 4,421,854,810 (2023: 3,626,860,032) ordinary shares are as follows: