Become a Member
  • Track your favourite stocks
  • Create & monitor portfolios
  • Daily portfolio value
Sign Up
Quickpicks
Add shares to your
quickpicks to
display them here!

Final Results

29th May 2025 07:00

RNS Number : 5764K
Rockhopper Exploration plc
29 May 2025
 

29 May 2025

 

Rockhopper Exploration plc

("Rockhopper", the "Group" or the "Company")

 

Full-Year Results for the Year Ended 31 December 2024

 

Rockhopper Exploration plc (AIM: RKH), the oil and gas exploration and production company with key interests in the North Falkland Basin, is pleased to announce its audited results for the year ended 31 December 2024.

 

2024 AND POST PERIOD HIGHLIGHTS

 

Sea Lion Development

 

Financing

· Lead technical and lending bank mandate signed

· Financing plan now includes senior bank debt

· Positive initial feedback from potential providers of capital to the financing

· New timing for Final Investment Decision ("FID") expected H2 2025 to allow for bank to complete due diligence ("DD")

 

Resources

· Updated independent report commissioned by Navitas*

Gross 917 mmbbls 2C with additional upside (Rockhopper 35% working interest)

Phased development

5 phases

2 FPSOs

First 2 phases developed via a single FPSO with 2 drilling campaigns

· Rockhopper commissioned independent resource update to be published shortly

 

Corporate and Financial

· US$20.9 million cash and term deposits at 31 December 2024

· Share Purchase Agreement ("SPA") signed to dispose of Italian business

Awaiting consents from Falkland Islands Government ("FIG") and the Italian regulators

· Cost control remains a focus

 

Ombrina Mare Arbitration Award

· No outcome of annulment to date

· Monetisation of the Award with a regulated specialist fund ("Specialist Fund")

Completion and First Tranche payment received, €19 million retained

If successful in defending annulment, Second Tranche payment of €65 million due from Specialist Fund

· Insurance in place to ensure minimum of €31 million even in the event of annulment

 

Sam Moody, Chief Executive of Rockhopper Exploration, commented:

 

"This has been a very important period for Rockhopper and an exciting time for the Company and its shareholders as we continue to work with operator Navitas in moving the Sea Lion project towards FID. With work on financing for the development beginning to gather pace and continued progress on the technical side, we look forward to providing the market with further updates."

 

* Rockhopper is not an addressee and has not been party to the production of the March 2025 NSAI Independent Report. The March 2025 NSAI Independent Report has been produced to PRMS standards. The last independent resource report commissioned directly by Rockhopper was the ERCE 2016 Report which had an estimated 2C value of 517 mmbbls. Rockhopper has commissioned it's own independent resource update to be published shortly

 

Enquiries:

 

Rockhopper Exploration plc

Sam Moody, Chief Executive Officer

Tel. +44 (0)20 7390 0234 (via Vigo Consulting)

Canaccord Genuity Limited (NOMAD and Joint Broker)

Henry Fitzgerald-O'Connor/James Asensio/Charlie Hammond

Tel. +44 (0) 20 7523 8000

 

Peel Hunt LLP (Joint Broker)

Richard Crichton/Georgia Langoulant

Tel. +44 (0) 20 7418 8900

 

Vigo Consulting

Patrick d'Ancona/Ben Simons/Fiona Hetherington

Tel. +44 (0) 20 7390 0234

 

Note regarding financial information disclosure

 

The financial information set out below does not constitute the Group's statutory accounts for the year ended 31 December 2024, but is derived from those accounts. References within the document may refer to information in the statutory accounts and these will be sent to shareholders and published on the Company's website imminently.

 

 

 

 

CHAIR AND CEO REVIEW

 

Sea Lion

 

The period under review and subsequently has seen the most material positive development to date in relation to the potential Sea Lion development financing. A mandate has been signed by the Operator with a well known international lead technical lending bank with expertise in lending to oil and gas projects.   The Operator has indicated it is currently envisioned that the bank will cornerstone the project financing with additional capital provided by a number of other investors. We understand that initial discussions with these potential providers of capital have been positive.

 

The target is for that bank financing to be completed within 6 months, with FID now anticipated in H2 2025, giving the necessary time for the lead bank to complete all technical, regulatory and other due diligence and for the wider financing scheme to be completed. 

 

A number of LOIs, MOUs and contracts have been signed relating to the project, including for the provision of an FPSO along with various key pieces of subsea infrastructure. Discussions are also currently ongoing for the provision of a suitable drilling unit.

 

The Operator continues to work closely with FIG to secure all required consents which Rockhopper believes will be forthcoming in a timescale allowing formal FID in H2 of 2025. In the light of the positive developments on the financing, and in order to provide the most stable platform for that financing to be completed, the existing reciprocal pre-emption right contained within the Joint Operating Agreement ('JOA') that operates at the asset level, has been extended to cover a corporate change of control. That pre-emptive right, which is reciprocal between Navitas and Rockhopper, will last until the earlier of formal project sanction or 31 December 2025.

 

 

Sea Lion - Key Information

· Rockhopper holds a 35% working interest

· Rockhopper benefits from pre and post FID loan from the Operator Navitas 1

· Independent Resource Report commissioned by Navitas 2

· 2C Contingent Resources (Development Pending) phased development concept for the Sea Lion field:

· 64 wells to develop the full 730 mmbbls

· Phased development

§ Northern Area

· 1st Phase - 11 wells, 6 pre-drilled 170 mmbbls

· 2nd Phase - 12 wells. 149 mmbbls

· 3rd Phase - 16 wells, 95 mmbbls

§ Central Area

· 1st Phase - 12 wells, 212 mmbbls

· 2nd Phase - 13 wells. 102 mmbbls

 

· Northern Area Phase 1 + Phase 2 total barrels developed, 319 mmbbls

· Total barrels developed (all phases) 730 mmbbls3

· Northern AreaPhase 1 + Phase 2 peak production rate 55,000 bbls/day, increasing up to 150,000 bbls/day once all phases have been developed

· Pre first oil capex (Phase 1 only) US$1.4bn

· Production breakeven approximately US$24 per barrel (Phase1, 2 and 3)

 

1 The majority of Rockhopper's share of Sea Lion phase one related costs up to FID will be funded through a loan from Navitas with interest charged at 8% per annum (the "Pre-FID Loan"). Certain costs, such as licence costs, are excluded. Subject to a positive FID, Navitas will provide an interest free loan to Rockhopper to fund two-thirds of Rockhopper's share of Sea Lion phase one development costs (for any costs not met by third party debt financing). Certain costs, such as licence costs, are excluded

Funds drawn under the loans will be repaid from 85% of Rockhopper's working interest share of free cash flow

 

2 Rockhopper is not an addressee and has not been party to the production of the March 2025 NSAI Independent Report. The March 2025 NSAI Independent Report has been produced to PRMS standards.

The last independent resource report commissioned directly by Rockhopper was the ERCE 2016 Report which had an estimated 2C value of 517 mmbbls. Rockhopper has commissioned it own independent resource update to be published shortly.

 

3 Totals may not sum precisely due to rounding adjustments

 

 

Ombrina Mare

 

Having announced an agreement to monetise the Ombrina Mare Arbitration Award ('the "Award") on 20 December 2023 (the 'Monetisation'), Rockhopper received the Tranche 1 payment in June 2024 and retained €19mm. The annulment process has no formal timetable and may now slip into H2 2025, however we remain hopeful of an outcome in the relatively near future. Should Rockhopper succeed in defending the annulment attempt, an additional payment of €65 million will become due from the Specialist Fund. During the period, Rockhopper put in place insurance to cover the event that the Italian Republic is successful in having the Award annulled. The insurance policy will ensure that, in the event that the Italian Republic succeeds in having the entire Award annulled or in the event of partial annulment, the combination of the Tranche 2 payment and the insurance payout shall entitle Rockhopper to a total no less than €31 million.

 

The policy has been placed via a FCA-registered specialist insurance brokerage. The policy has been underwritten by a specialist underwriting agency and subscribed to by a number of A-rated insurance carriers and syndicates.

 

Tax of approximately 12.5% to 15% is likely to be due on receipts from the Monetisation.

 

Italian disposal

 

As announced on 14 October 2024, Rockhopper signed an SPA to dispose its Italian interests, other than the Ombrina Mare arbitration, to Zodiac Energy Limited ("Zodiac"), a locally run Italian E&P company.

 

The SPA is for the sale of Rockhopper Civita Limited (a wholly owned subsidiary of Rockhopper Exploration Plc). Rockhopper Civita Limited holds all Rockhopper's Italian assets and liabilities with the exception of the Ombrina Mare Arbitration Award.

 

Under the terms of the SPA, Rockhopper will pay Zodiac in two instalments, with a retained upside participation to Rockhopper in two undeveloped licences.

 

The first instalment of €3 million is payable to Zodiac on satisfaction of two precedent conditions ("Completion"), those being receipt of all necessary regulatory consents in Italy, as well as regulatory consents in the Falklands.

 

The second instalment of €2.5 million is payable to Zodiac on or after Completion, assuming the satisfaction of two additional conditions, those being successfully defending the Italian Republic's annulment application and receiving a minimum of €10 million from the Award monetisation (the Tranche 2 payment under the Award monetisation is €65 million, due on a successful defence of the annulment application, but can be reduced in the event of a partial annulment).

 

In addition, assuming the second instalment is payable, Rockhopper will retain a royalty on two assets within the Rockhopper Civita Limited portfolio, those being AC19 (a northern Adriatic licence with two gas discoveries and an additional adjacent prospect) and Serra San Bernado (which contains the Monte Grosso exploration prospect).

 

The royalties will take the form of either 10% of the revenues of the interests acquired by Zodiac or, should they realise value by on-selling the licences acquired, 25% of the gross proceeds received for the part sold.

The transaction is subject to regulatory approvals, the timing of which is uncertain but are anticipated within 12 months. 

 

The transaction will significantly reduce both Rockhoppers annual running costs and long run decommissioning liabilities.

 

Falklands Capital gains Tax ("CGT")

 

Rockhopper is in discussions with FIG to come to an agreement over the deferred CGT arising from the farm down to Premier Oil in 2012, as the current arrangements make the Sea Lion financing significantly more difficult. This is discussed in greater detail in the Financial Review.

 

Summary

 

With a lead lending bank appointed, positive feedback from potential funders, Sea Lion resources and values independently confirmed and FIG continuing to support the development of the field, the sanction of Sea Lion has never been closer with a target of H2 this year, an event that would represent the culmination of some 20 years of work for Rockhopper.

 

Whilst our balance sheet remains strong, it is possible that the Group will require additional funding in order to take FID. The final amount of that funding will be a function of the outcome of the Ombrina Mare annulment process, final project costs and Sea Lion financing details.

 

The Navitas independent NSAI report confirms the scale of Sea Lion and the possibility for it to generate significant value for all stakeholders should sanction be achieved. We also look forward to publishing shortly our own independent report which we expect to corroborate this significant resource base.

 

 

 

 

FINANCIAL REVIEW

 

OVERVIEW

 

From a finance perspective, the most significant event in 2024 was completion of the announced Monetisation. From an accounting perspective the Monetisation Agreement is a separate financial instrument to the Arbitration Award itself. This has meant recognising the fair value of the Monetisation Agreement of US$79.8 million as Other income. This fair value comprises the USD equivalent value of not only the initial €19 million Tranche 1 proceeds but also subsequent tranches, predominantly the €65 million Tranche 2 proceeds, which are receivable on success in the Arbitration Award annulment proceedings. The €19 million was received during the year with the remaining fair value of the subsequent tranches of US$58 million being held as a financial asset.

 

The Award annulment proceedings themselves concluded in 2024 and we just await the outcome. We and our advisors remain confident in the merits of our arguments but have put in place insurance to ensure a minimum €31 million should be received.

 

RESULTS FOR THE YEAR

 

For the year ended 31 December 2024 the Group, including discontinued operations, reported a profit of US$47.6 million (2023: loss of US$4.6 million).

 

DISCONTINUED OPERATIONS

 

In October 2024, the Group announced the disposal, subject to conditions precedent, of its 100% interest in Rockhopper Civita Limited which holds the Group's remaining operations in the Greater Mediterranean geographical segment. The transaction had not completed at the year end, but the assets and associated liabilities have been reclassified as held for sale on the balance sheet. Due to the fact that the disposal group has been classified as held for sale and represents a geographical area of operations it has also been treated as a discontinued operation in line with IFRS 5. As such the comparative information in the Income Statement and relevant notes have been re-presented.

 

OPERATING COSTS

 

Exploration and evaluation expenses are not material in the year. The impairment in the current year of US$0.4 million (2023: US$0.3 million) is due to cost write-offs relating to the South Falkland Basin and areas of the North Falkland Basin which will not be developed as part of the Sea Lion Phase 1 project.

 

Administrative expenses have reduced during the year to US$3.3 million (2023: US$3.8 million). The prior year included legal fees in relation to contesting the Annulment of the Award of US$1.6 million. The Group chose to use existing resources to fund all legal costs arising from contesting the request by Italy for Annulment while it explored all acceptable funding possibilities. Since signing of the Monetisation agreement, the Specialist Fund are responsible for all legal fees, therefore no costs have been incurred in relation to the Arbitration in 2024. This reduction has been offset by an increase in staff costs, which predominantly relate to discretionary bonuses to staff on receipt of the Tranche 1 proceeds of the Monetisation Agreement

 

Finance income has increased to US$1.9 million (2023: US$1.2 million). Income on cash and term deposits has increased US$0.3 million due to increased cash balances during the year. Also the current year includes the unwinding of discounts on the fair value of the Monetisation Agreement of US$1.3 million. The prior year saw a gain on derivative financial liabilities of US$0.9 million.

 

Other income and other expenses relate to the Monetisation Agreement. As noted earlier US$79.8 million of Other income relates to the fair value of the Monetisation Agreement. Other expenses of US$1.0 million relate to costs associated with the Monetisation Agreement and also associated with an insurance policy taken out during the year.

 

In October 2024 the Group decided, in line with normal market practice, that insuring to protect shareholders against loss resulting from an annulment of the Award to be the most prudent course of action. The insurance policy will ensure that, in the event that the Italian Republic succeeds in having the entire Award annulled or in the event of partial annulment, the combination of the Tranche 2 payment and the insurance payout shall entitle Rockhopper to a total of no less than €31 million. The only impact on the financial statements is the total cost of the policy, which including applicable taxes and underwriting fees, is €4 million. This cost has been spread over the life of the policy (which materially exceeds the expected time to receive an outcome from the Award annulment). As such the majority of this cost is recorded as a prepayment in the 2024 financial statements.

 

CASH MOVEMENTS AND CAPITAL EXPENDITURE

 

As at 31 December 2024, the Group had cash and term deposits of US$20.9 million (31 December 2023: US$8.0 million).

 

Cash and term deposit movements during the period:

 

US$m

Opening cash balance (31 December 2023)

8.0

Discontinued operations

(0.4)

Falkland Islands

(1.8)

Administrative expenses

(3.3)

Net proceeds of warrant exercises

2.2

Monetisation Agreement

20.6

Arbitration award insurance

(4.2)

Miscellaneous

(0.2)

Closing cash balance (31 December 2024)

20.9

 

Miscellaneous includes foreign exchange and movements in working capital during the period.

 

The additions to intangible exploration and evaluation assets during the year of US$14.7 million relate principally to the Sea Lion development. The majority of cash costs were covered by the Pre-FID co-venturer loan provided by Navitas as part of the farm out in 2022. This co- venturer loan facility was utilised for the first time during the year and costs covered and accrued interest as at the year end totalled US$15.3 million (2023: US$nil).

 

Management considered whether there were any indicators of impairment to the carrying value of the intangible as it relates to the first phase of the Sea Lion development and concluded there were none.

 

In the event of Sea Lion being sanctioned the Group benefits from a Post FID loan which will cover two thirds of its share of project equity costs. It is likely that to enable sanction the Group will need to raise additional finance to cover its proportion of unfunded project costs.

 

In addition, FIG has indicated a likely requirement for certain potential project decommissioning liabilities to be secured and funded commensurate with the contingent abandonment liabilities as the project is developed and enters production. These liabilities relate to the possible early plugging and abandonment of wells and will commence from drilling of the first well until completion of phase 1 at which point it shall be replaced with a decommissioning fund to be established and accumulated following first oil. This is likely to place an additional phased financial requirement on Rockhopper, starting at the time the first pre drilled well is spudded, and is estimated as peaking at approximately US$40million at phase 1 completion. The Company is discussing this with the Operator and investigating options to fulfil this requirement, including the possibility of using a suitably highly rated decommissioning bond. In parallel the Company is investigating other potential sources of funding, if required, to ensure that it is able to meet its share of Sea Lion project equity costs at sanction, which are currently unknown.

 

The level of equity injection into the project required for Rockhopper to take FID is a function of final project costs, details of the project financing and other potential costs or financing requirements such as contingencies, fees and any other possible costs, none of which are currently certain. The Operator currently estimates project costs to first oil of US$1.4 billion and total project financing (senior debt) is anticipated to amount to approximately US$1.0 billion.

 

A number of possible scenarios are set out below:-

 

The numbers below are indicative and subject to change and are not a prediction of the final Rockhopper share of the project equity requirement.

 

If the project cost was US$1.25 billion of which debt financing was US$700million then the Rockhopper equity contribution to the project would be approximately US$64million, being 1/3rd of the Rockhopper 35% working interest, with the remaining 2/3 of the 35% working interest costs being funded via the post FID loan from Navitas. 

 

If the project cost was US$1.5 billion of which debt financing was US$900million then the Rockhopper equity contribution to the project would be approximately US$70million, being 1/3rd of the Rockhopper 35% working interest, with the remaining 2/3 of the 35% working interest costs being funded via the post FID loan from Navitas. 

 

If the project cost was US$1.75 billion of which debt financing was US$1billion then the Rockhopper equity contribution to the project would be approximately $88million, being 1/3rd of the Rockhopper 35% working interest, with the remaining 2/3 of the 35% working interest costs being funded via the post FID loan from Navitas. 

 

The above numbers do not include an allowance for decommissioning provisions relating to the pre first oil wells as it is currently unknown how that provision will be funded. Under the terms of the post FID loan, certain costs such as licence fees and Rockhopper specific taxes and G&A are excluded and would need to be funded directly by Rockhopper.

 

Possible sources of funds for the currently unknown Rockhopper project equity requirement include but are not limited to: Any proceeds from the monetisation of the Ombrina Mare arbitration, any payout under the insurance policy put in place to cover the annulment outcome, balance sheet cash, a convertible issue or other mezzanine finance instrument, an equity issue or a farm out. In the event funding was necessary and not achievable then the Group could not sanction the project.

 

Impairment during the year is in relation to licences that hold discovered barrels of oil that would be produced in any subsequent phases of development as well as our Southern Falkland Basin licences. This is in line with accounting standards given the limited capital we are currently spending on these licences.

 

OTHER RECEIVABLES

 

Other receivables have increased to US$62.3 million (2023: US$1.2 million). This is as a result of the year end fair value of the Monetisation Agreement of US$58.2 million and the prepayment of Award annulment insurance of US$3.9 million.

 

TAXATION

 

Current tax payable of US$1.8 million relates to amounts expected to be due in relation to the Tranche 1 proceeds received from the Monetisation Agreement. Separately as a result of the recognition of the fair value of the Monetisation Agreement an additional US$6.2 million of deferred tax liability has been recognised.

 

A non-current tax payable of US$22.3 million has been recognised in the year and relates to the potential liability arising from the historic farm-outs in the Falkland Islands.

 

On the 8 April 2015, the Group agreed binding documentation ("Tax Settlement Deed") with FIG in relation to the tax arising from the Group's 2012 farm out. The Tax Settlement Deed confirms the quantum and deferment of the outstanding tax liability and is made under Extra Statutory Concession 16. The Tax Settlement Deed also states that the Group is entitled to make adjustment to the outstanding tax liability if and to the extent that the Commissioner is satisfied that any part of the Development Carry becomes irrecoverable. In September 2022 the transaction enabling Harbour Energy plc to exit and Navitas to enter the North Falkland Basin completed. Under the transaction the balance of Development Carry became irrecoverable.

 

Following the transaction professional advice (the 'Advice') was sought over whether the Group was entitled to adjust the tax returns for the irrecoverable Development Carry. The Advice confirmed that it is probable that the Group is entitled to adjust the outstanding tax liability. As such the Group submitted tax returns on this basis. FIG disagreed with this analysis and asserted that the Group continued to owe £59.6 million payable around first oil. Based on the information as at 31 December 2023 the Directors made a judgement to derecognise any liability, given that it was considered the most probable outcome based on the Advice.

 

Separately the Group submitted tax returns in relation to the farm out to Navitas that occurred immediately after their acquisition, from Harbour Energy plc of the company that holds the North Falkland's Basin licences. The consideration for this transaction was the provision of loan funding to the Group to cover the majority of its share of Sea Lion phase 1 related costs from transaction completion up to FID through a loan from Navitas with interest charged at 8% per annum (the "Pre-FID Loan"). Subject to a positive FID, Navitas will provide an interest free loan to fund two-thirds of the Group's share of Sea Lion phase 1 development costs (for any costs not met by third party debt financing). The Directors are confident that the Group has sufficient losses to ensure no tax liability will arise.

 

The Group has continued discussions with FIG to resolve differences regarding any outstanding tax liability arising from the Tax Settlement Deed and recognise that the current arrangements make the project financing for Sea Lion significantly more difficult.

 

Given these discussions, and notwithstanding the Advice, the level of uncertainty relating to the potential tax liability has increased. For this reason, the Directors' have recognised a liability this year, which has been determined with reference to a probability weighting approach to reflect the additional uncertainty. For the avoidance of doubt there is no agreement to date with FIG and the ultimate tax liability could be materially different.

 

Should it be proven that there is no entitlement to adjustment under the Tax Settlement Deed then the outstanding tax liability would be £59.6 million and still payable on the earlier of: (i) the first royalty payment date on Sea Lion; (ii) the date of which Rockhopper disposes of all or a substantial part of the Group's remaining licence interests in the North Falkland Basin; or (iii) a change of control of Rockhopper Exploration plc.

 

Warrants

 

During 2022 by way of a Placing and Subscription and an Open Offer in July 2022 the group issued Warrants. Each Warrant gave the holder the right to subscribe for one new Ordinary Share at a price of 9 pence per Ordinary Share (the "Strike Price") at any time from the issue of the Warrants up to (and including) 5.00 p.m. on 31 December 2023.

 

At the start of the year 20.3 million shares were issued in relation to Warrants that were validly exercised immediately prior to their expiry. This raised US$2.2million of net proceeds.

 

LIQUIDITY, COUNTERPARTY RISK AND GOING CONCERN

 

The Directors have performed an assessment of whether the Company and Group would be able to continue as a going concern until at least September 2026. In their assessment, the Group has taken into account its financial position, expected future performance, its debt and other available credit facilities, its working capital and capital expenditure commitments and forecasts.

 

At 31 December 2024, the Group had cash and cash equivalents and term deposits of $20.9 million and the Group benefits from loan funding for its share of all Sea Lion pre-sanction costs (other than licence fees and taxes), historically the largest annual expenditure. This loan funding is the Group's only external debt and is long term, ultimately repayable out of future cash flows from any Sea Lion Development.

 

Based on a detailed cash flow forecast prepared by management, in which it included any reasonable possible change in the key assumptions on which the cash flow forecast is based, the Board of Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence.

 

The cash flow forecast does not include the benefit of any further proceeds from the Ombrina Mare Award should that be through the Monetisation Agreement or insurance. It also does not include any post sanction Sea Lion costs. The Group benefits from a Post FID loan which will cover two thirds of its share of project equity costs. It is possible that to enable sanction the Group will need to raise additional finance to cover its proportion of unfunded project costs. The exact quantum is still to be determined but the Directors believe that, to the extent necessary, extra funding will be achievable based on current expectations of project costs and funding availability. Ultimately from a going concern perspective project sanction is a discretionary act and if funding was not achievable then the Group would not sanction the project.

 

PRINCIPAL RISK AND UNCERTAINTIES

 

A detailed review of the potential risks and uncertainties which could impact the Group are outlined elsewhere in this Strategic Report. The Group identified its key risks at the end of 2024 as being:

 

1 failure of joint venture partners to secure the requisite funding at a project level to allow a Sea Lion Final Investment Decision;

2 availability and access to capital at a Group level;

3 oil price volatility; and

4 joint venture partner and wider stakeholder alignment.

 

CONSOLIDATED INCOME STATEMENT

for the year ended 31 December 2024

 

Notes

2024

$'000

2023

$'000

Restated*

Exploration and evaluation expenses

4

(393)

(275)

Administrative expenses

5

(3,330)

(3,840)

Charge for share based payments

8

(76)

(117)

Foreign exchange movement

9

170

328

Results from operating activities

(3,629)

(3,904)

Other income

10

79,802

-

Other expenses

10

(1,024)

-

Finance income

11

1,927

1,191

Finance expense

11

(296)

(121)

Profit/(loss) before tax

76,780

(2,834)

Tax expense

12

(30,421)

-

Profit/(loss) from continuing operations

46,359

(2,834)

Profit/(loss) for the year from discontinued operations

13

1,253

(1,716)

Profit/(loss) attributable to equity shareholders of the parent company

47,612

(4,550)

Profit/(loss) per share attributable to the equity shareholders of the parent company: cents

Basic

14

7.40

(0.77)

Diluted

14

7.28

(0.77)

Basic (continuing operations)

14

7.20

(0.48)

Diluted(continuing operations)

14

7.09

(0.48)

* The comparative information has been re-presented due to a discontinued operation. See Note 13.

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

for the year ended 31 December 2024

 

 

2024

2023

$'000

$'000

Profit/(loss) for the year

47,612

(4,550)

Items that may be reclassified to profit or loss

Exchange differences on translation of foreign operations

 

(2,094)

 

(502)

Total comprehensive profit/(loss) for the year

45,518

(5,052)

The notes on pages 44 to 64 form an integral part of these consolidated financial statements.

 

CONSOLIDATED BALANCE SHEET

as at 31 December 2024

Notes

2024

$'000

2023

$'000

Non current assets

Exploration and evaluation assets

15

271,110

257,228

Property, plant and equipment

10

29

Current assets

Other receivables

16

62,330

1,241

Finance lease receivable

-

235

Restricted cash

-

529

Term deposits

17

19,969

4,501

Cash and cash equivalents

915

3,487

Assets classified as held for sale

13

1,203

-

Total assets

355,537

267,250

Current liabilities

Other payables

18

6,516

7,176

Tax payable

20

1,806

-

Derivative financial liabilities

19

-

450

Lease liability

-

246

Liabilities associated with assets held for sale

13

14,279

-

Non-current liabilities

Co-venturers loan

18

15,354

-

Tax payable

20

22,300

-

Provisions

21

1,600

20,121

Deferred tax liability

22

45,305

39,137

Total liabilities

107,160

67,130

Equity

Share capital

23

9,455

9,196

Share premium

24

12,585

10,181

Share based remuneration

24

2,185

2,109

Own shares held in trust

24

(1,320)

(1,320)

Merger reserve

24

78,208

78,208

Foreign currency translation reserve

24

(10,595)

(8,501)

Special reserve

24

175,281

175,281

Retained losses

24

(17,422)

(65,034)

Attributable to the equity shareholders of the company

248,377

200,120

Total liabilities and equity

355,537

267,250

These financial statements on pages 40 to 64 were approved by the directors and authorised for issue on 28 May 2025 and are signed on their behalf by:

 

Samuel Moody

Chief Executive Officer

Rockhopper Exploration plc Registered Company Number: 05250250

 

The notes on pages 44 to 64 form an integral part of these consolidated financial statements.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

for the year ended 31 December 2024

 

Share capital

 

Share premium

 

Share based remuneration

 

 

Shares held

in trust

 

Merger reserve

Foreign currency translation

reserve

 

Special reserve

 

Retained losses

 

Total equity

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

$'000

Balance at 31 December 2022

8,771

6,518

1,492

(1,494)

78,208

(7,999)

175,281

(60,310)

200,467

Loss for the year

-

-

-

-

-

-

-

(4,550)

(4,550)

Other comprehensive loss for the year

-

-

-

-

-

(502)

-

-

(502)

Total comprehensive loss for the year

-

-

-

-

-

(502)

-

(4,550)

(5,052)

Share based payments (see note 8)

-

-

617

-

-

-

-

-

617

Share issues (net of expenses)

425

3,663

-

-

-

-

-

-

4,088

Other transfers

-

-

-

174

-

-

-

(174)

-

Balance at 31 December 2023

9,196

10,181

2,109

(1,320)

78,208

(8,501)

175,281

(65,034)

200,120

Profit for the year

-

-

-

-

-

-

-

47,612

47,612

Other comprehensive loss for the year

-

-

-

-

-

(2,094)

-

-

(2,094)

Total comprehensive profit for the year

-

-

-

-

-

(2,094)

-

47,612

45,518

Share based payments (see note 8)

-

-

76

-

-

-

-

-

76

Share issues (net of expenses)

259

2,404

-

-

-

-

-

-

2,663

Other transfers

-

-

-

-

-

-

-

-

-

Balance at 31 December 2024

9,455

12,585

2,185

(1,320)

78,208

(10,595)

175,281

(17,422)

248,377

See note 24 for a description of each of the reserves of the Group.

Other transfers relate to Shares held in trust where they have been used to satisfy exercised options.

The notes on pages 44 to 64 form an integral part of these consolidated financial statements.

 

CONSOLIDATED STATEMENT OF CASH FLOWS

for the year ended 31 December 2024

 

Notes

2024

$'000

2023

$'000

Cash flows from operating activities

Profit/(loss) for the year

47,612

(4,550)

Adjustments to reconcile net losses to cash:

Depreciation of property, plant and equipment

19

39

Share based payment expense

8

76

117

Written off exploration costs

15

393

158

Finance expenses

11

595

482

Finance income

11

(1,322)

(889)

Foreign exchange

9

(3,786)

(356)

Income tax expense

12

30,421

-

Operating cash flows before movements in working capital

74,008

(4,999)

Changes in working capital:

(Increase)/decrease in receivables

(60,613)

517

Increase in payables

386

112

Decrease in provisions

(2.397)

(41)

Cash utilised by operating activities

11,384

(4,411)

Cash flows from investing activities

Capitalised expenditure on exploration and evaluation assets

(1,834)

(1,293)

Cash classified as held for sale

(17)

-

Investing cash flows before movements in capital balances

(1,851)

(1,293)

Changes in:

Restricted cash

542

-

Term deposits

(15,073)

4,533

Cash flow (used in)/from investing activities

(16,382)

3,240

Cash flows from financing activities

Exercise of warrants and share options

2,213

3,682

Lease liability payments

(11)

(132)

Cash flow from financing activities

2,202

3,550

Exchange gain/loss on cash and cash equivalents

224

49

Net cash flow

(2,796)

2,379

Cash and cash equivalents brought forward

3,487

1,059

Cash and cash equivalents carried forward

915

3,487

 

The notes on pages 44 to 64 form an integral part of these consolidated financial statements.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

for the year ended 31 December 2024

1. Accounting policies

1.1 Group and its operations

Rockhopper Exploration plc, the 'Company', a public limited company quoted on AIM, incorporated and domiciled in the United Kingdom ('UK'), together with its subsidiaries, collectively 'the 'Group' holds certain exploration licences for the exploration and exploitation of oil and gas in the Falkland Islands. In addition, it has operations in the Greater Mediterranean based in Italy which have been classified as discontinued operations and whose assets and liabilities are classified as held for sale. The registered office of the Company is Warner House, 123 Castle Street, Salisbury, Wiltshire, SP1 3TB.

1.2 Statement of compliance

The consolidated financial statements of the Group have been prepared on a going concern basis in accordance with UK adopted International Accounting Standards in conformity with the requirements of the Companies Act 2006. The consolidated financial statements were approved for issue by the board of directors on 28 May 2025 and are subject to approval at the Annual General Meeting of shareholders on 27 June 2025.

1.3 Basis of preparation

The results upon which these financial statements have been based were prepared using the accounting policies set out below. These policies have been consistently applied unless otherwise stated.

These consolidated financial statements have been prepared under the historical cost convention with the exception of certain items which are measured at fair value.

Items included in the results of each of the Group's entities are measured in the currency of the primary economic environment in which that entity operates (the "functional currency"). The consolidated financial statements are presented in US Dollars ($), which is Rockhopper Exploration plc's functional currency.

All values are rounded to the nearest thousand dollars ($'000) or thousand pounds (£'000), except when otherwise indicated.

1.4 Change in accounting policy

Changes in accounting standards

In the current year the following new and revised Standards and Interpretations have been adopted. None of these have a material impact on the Group's annual results.

- Supplier Finance Arrangements (Amendments to IAS7 & IFRS 7);

- Lease liability in a sale and Leaseback (Amendments to IFRS 16);

- Classification of Liabilities as Current or Non-Current (Amendments to IAS 1); and

- Non-current Liabilities with Covenants (Amendments to IAS 1).

New accounting pronouncements

At 31 December 2024, the following Standards, Amendments and Interpretations were in issue but not yet effective:

The following amendments are effective for the period beginning 1 January 2025:

- Lack of exchangeability (Amendment to IAS 21 The Effects of changes in Foreign Exchange rates).: Disclosures).

The following amendments are effective for the period beginning 1 January 2026:

- Amendments to the classification and Measurement of Financial Instruments (Amendments to IFRS 9 Financial Instruments and IFRS 7); and

- Contracts Referencing Nature-dependent Electricity (Amendments to IFRS 9 and IFRS 7).

The following amendments are effective for the period beginning 1 January 2027:

- IFRS 18 Presentation and Disclosure in Financial; and

- IFRS 19 Subsidiaries without Public Accountability: Disclosures.

The Directors do not expect that the adoption of the above Standards, Amendments and Interpretations will have a material impact on the Financial Statements of the Group in future periods.

 

1.5 Going concern

The Directors have performed an assessment of whether the Company and Group would be able to continue as a going concern until at least September 2026. In their assessment, the Group has taken into account its financial position, expected future performance, its debt and other available credit facilities, its working capital and capital expenditure commitments and forecasts.

At 31 December 2024, the Group had cash and cash equivalents and term deposits of $20.9 million and the Group benefits from loan funding for its share of all Sea Lion pre-sanction costs (other than licence fees and taxes), historically the largest annual expenditure. This loan funding is the Group's only external debt and is long term, ultimately repayable out of future cash flows from any Sea Lion Development.

Based on a detailed cash flow forecast prepared by management, in which it included any reasonable possible change in the key assumptions on which the cash flow forecast is based, the Board of Directors have a reasonable expectation that the Group will have adequate resources to continue in operational existence until at least September 2026 and that at this point in time there are no material uncertainties regarding going concern.

Key assumptions underpinning this forecast include forecast committed expenditure. The forecasts assume outflows for the completion of its announced disposal of its Italian operations, although should this transaction not complete it would not impact the going concern assessment during the period considered.

The cash flow forecast does not include the benefit of any proceeds from the Ombrina Mare Award should that be through the Monetisation Agreement or insurance. It also does not include any post sanction Sea Lion costs. The Group benefit from a Post FID loan which will cover two thirds of its share of project equity costs. It is likely that to enable sanction the Group will need to raise additional finance to cover its proportion of unfunded project costs. The exact quantum is still to be determined but the Directors believe that, to the extent necessary, extra funding will be achievable based on current expectations of project costs and funding availability. Ultimately from a going concern perspective project sanction is a discretionary act and if funding was not achievable then the Group would not sanction the project.

Cash flow forecasts prepared based on current committed expenditure and non-discretionary spend indicate that the Company has sufficient cash resources to continue in operation for a period in excess of 12 months from the date of signing the Consolidated and Parent Company Financial Statements. The Directors therefore believe there is not a material uncertainty regarding going concern and that it is appropriate to prepare the financial statements on a going concern basis.

 

1.6 Significant accounting policies

(A) Basis of accounting

The Group has identified the accounting policies that are most significant to its business operations and the understanding of its results. These accounting policies are those which involve the most complex or subjective decisions or assessments, and relate to the capitalisation of exploration expenditure. The determination of this is fundamental to the financial results and position and requires management to make a complex judgement based on information and data that may change in future periods.

Since these policies involve the use of assumptions and subjective judgements as to future events and are subject to change, the use of different assumptions or data could produce materially different results. The measurement basis that has been applied in preparing the results is historical cost.

The significant accounting policies adopted in the preparation of the results are set out below.

(B) Basis of consolidation

The Group financial statements consolidate the financial statements of the Company and its subsidiary undertakings drawn up to 31 December 2024. Subsidiaries are those entities over which the Group has control. Control is achieved where the Group has the power over the subsidiary, is exposed, or has rights to variable returns from the subsidiary and has the ability to use its power to affect its returns. All subsidiaries are 100 per cent owned by the Group and there are no non-controlling interests.

The results of subsidiaries acquired or disposed of during the year are included in the income statement from the effective date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements of subsidiaries acquired to bring the accounting policies used into line with those used by other members of the Group.

All intercompany balances have been eliminated on consolidation.

(C) Segmental reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker as required by IFRS8 Operating Segments. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the board of directors.

The Group's operations are made up of three segments, the oil and gas exploration and production activities in the geographical regions of the Falkland Islands and the Greater Mediterranean region as well as its corporate activities mainly centered in the UK.

(D) Oil and gas assets

The Group applies the successful efforts method of accounting for exploration and evaluation ("E&E") costs, having regard to the requirements of IFRS6 - 'Exploration for and evaluation of mineral resources'.

Exploration and evaluation ("E&E") expenditure Expensed exploration & evaluation costs

Expenditure on costs incurred prior to obtaining the legal rights to explore an area, geological and geophysical costs are expensed immediately to the income statement.

Capitalised intangible exploration and evaluation assets

All directly attributable E&E costs are initially capitalised in well, field, prospect, or other specific, cost pools as appropriate, pending determination.

Treatment of intangible E&E assets at conclusion of appraisal activities

Intangible E&E assets related to each cost pool are carried forward until the existence, or otherwise, of commercial reserves have been determined, subject to certain limitations including review for indicators of impairment. If commercial reserves have been discovered, the carrying value, after any impairment loss, of the relevant E&E assets, are then reclassified as development and production assets within property plant and equipment. However, if commercial reserves have not been found, the capitalised costs are charged to expense.

Development and production assets

Development and production assets, classified within property, plant and equipment, are accumulated generally on a field-by-field basis and represent the costs of developing the commercial reserves discovered and bringing them into production, together with the E&E expenditures incurred in finding commercial reserves transferred from intangible E&E assets.

Depreciation of producing assets

The net book values of producing assets are depreciated generally on a field-by-field basis using the unit-of-production method by reference to the ratio of production in the year and the related commercial reserves of the field, taking into account the future development expenditure necessary to bring those reserves into production.

Disposals

Net cash proceeds from any disposal of an intangible E&E asset are initially credited against the previously capitalised costs. Any surplus proceeds are credited to the income statement.

Decommissioning

Provision for decommissioning is recognised in full when the related facilities are installed. The amount recognised is the present value of the estimated future expenditure. A corresponding amount equivalent to the provision is also recognised as part of the cost of the related oil and gas property. This is subsequently depreciated as part of the capital costs of the production facilities. Any change in the present value of the estimated expenditure is dealt with prospectively as an adjustment to the provision and the oil and gas property. The unwinding of the discount is included in finance cost.

(E) Foreign currency translation Functional and presentation currency:

Items included in the results of each of the Group's entities are measured using the currency of the primary economic environment in which the entity operates, the functional currency. The consolidated financial statements are presented in US$ as this best reflects the economic environment of the oil exploration sector in which the Group operates. The Group maintains the financial statements of the parent and subsidiary undertakings in their functional currency. Where applicable, the Group translates subsidiary financial statements into the presentation currency, US$, using the closing rate method for assets and liabilities which are translated at the rate of exchange prevailing at the balance sheet date and rates at the date of transactions for income statement accounts. Differences are taken through the Statement of Comprehensive Income to reserves.

Transactions and balances:

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are expensed in the income statement, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges.

The year end rates of exchange were:

31 December 2024

31 December 2023

£ : US$

1.25

1.27

€ : US$

1.04

1.10

(F) Revenue and income

Investment income

There is no revenue in either this or the prior period.

Investment income consists of interest receivable for the period. Interest income is recognised as it accrues, taking into account the effective yield on the investment.

(G) Non-derivative financial instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group has become a party to the contractual provisions of the instrument.

(i) Other receivables

Other receivables are initially measured at fair value. Those that meet the following conditions are measured subsequently at fair value through other comprehensive income (FVTOCI):

· the financial asset is held within a business model whose objective is achieved by both collecting contractual cash flows and selling the financial assets; and

· the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

By default, all other financial assets are measured subsequently at fair value through profit or loss (FVTPL).

The Group recognises an allowance for expected credit losses for all debt instruments not held at fair value through profit or loss. Expected credit losses are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.

(ii) Restricted cash

Restricted cash is disclosed separately on the face of the balance sheet and denoted as restricted when it is not under the exclusive control of the Group. All amounts relate to balances held as security in relation to property leases.

(iii) Term deposits

Term deposits are disclosed separately on the face of the balance sheet when their term is equal or greater than one month and they are unbreakable.

(iv) Cash and cash equivalents

They are stated at carrying value which is deemed to be fair value. Cash and cash equivalents comprise instant access bank balances as well as a small amount of cash in hand.

(v) Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all of its liabilities.

(vi) Account and other payables

Account payables are initially recognised at fair value and subsequently at amortised cost using the effective interest method.

(vii) Derivative financial liabilities

Derivative financial liabilities are initially recognised and carried at fair value with changes in fair value recognised in the consolidated statement of comprehensive income.

(viii) Equity instruments

Equity instruments issued by the Company are recorded at the proceeds received, net of direct issue costs.

(H) Income taxes and deferred taxation

The current tax amount is based on the taxable profits or losses of the year, after any adjustments in respect of prior years. Tax, including tax relief for losses if applicable, is allocated over profits before tax and amounts charged or credited to reserves as appropriate.

Deferred taxation is recognised in respect of all taxable temporary differences that have originated but not reversed at the balance sheet date where a transaction or events have occurred at that date that will result in an obligation to pay more, or a right to pay less or to receive more, tax, with the exception that deferred tax assets are recognised only to the extent that its considered probable that there will be suitable taxable profits from which the future reversal of the underlying temporary differences can be deducted.

Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which temporary differences reverse, based on tax rates and laws enacted or substantively enacted at the balance sheet date.

Where there are uncertainties over how to apply the recognition and measurement requirements in IAS 12 the group applies IFRIC 23, Uncertainty over Income TaxTreatment.

(I) Share based remuneration

The Group issues equity settled share based payments to certain employees. Equity settled share based payments are measured at fair value (excluding the effect of non market based vesting conditions) 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 shares that will eventually vest and adjusted for non market based vesting conditions.

Cash settled share based payment transactions result in a liability. Services received and liabilities incurred are measured initially at fair value of the liability at grant date, and the liability is remeasured each reporting period until settlement. The liability is recognised on a straight line basis over the period that services are rendered.

(J) Capital commitments

Capital commitments include all projects for which specific board approval has been obtained up to the reporting date. Projects still under investigation for which specific board approvals have not yet been obtained are excluded.

2. Use of estimates, assumptions and judgements

The Group makes estimates, assumptions and judgements that affect the reported amounts of assets and liabilities. Estimates, assumptions and judgements are continually evaluated and based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

The key assumptions concerning the future, and other key sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are discussed in the relevant note as is sensitivity analysis as required. The key areas identified and the relevant note are as follows:

Fair value of Monetisation Agreement (note 10) - estimates

To calculate the fair value of the Monetisation Agreement involved estimation. Future cash flows under the agreement are contractual and it was measured at fair value using a discounted cash flow basis. This required estimating the cost to insure the same cash flows, the timing of these cash flows and the discount rate applied.

Carrying value of intangible exploration and evaluation assets (note 15) - judgements

Given the quantum of intangible exploration and evaluation assets potential impairment could have a material impact on the financial statements. Management has made a judgement as to the existence of any indicators of impairment under IFRS 6, including the right to continue exploration exists, continued expenditure is planned, exploration results indicate commercially viable quantities of resources and that the carrying amount is likely to be recovered in full.

Tax payable (note 20) - judgements and estimates

The Group's recognised an estimated Non-current tax payable of $22.3 million arising from the historic farm-outs in the Falkland Islands on open tax positions where the liabilities remain to be agreed with the Falkland Islands Tax Authority. Due to the uncertainty associated with such tax items, there is a possibility that, on conclusion of open tax matters at a future date, the final outcome may differ significantly and be as large as £59.6 million. Management had to form a judgment on the possible outcomes from a tax legislation perspective and then estimate the probability of each outcome and the associated tax liability in order to calculate the probability weighted outcome.

Decommissioning costs (note 21) - judgements and estimates

Estimates are made around appropriate inflation and discount rates to be applied as well as the timing of any future decommissioning. Decommissioning costs are uncertain and management's cost estimates can vary in response to many factors, including changes to the relevant legal requirements, the emergence of new technology or experience at other assets. The expected timing, work scope and amount of expenditure may also change.

3. Segmental information

The Group's operations are located and managed in three geographically distinct business units; namely the Falkland Islands, the Greater Mediterranean, and Corporate (includes UK and the Ombrina Mare Arbitration). Some of the business units currently do not generate any revenue or have any material operating income. The business is only engaged in one business, that of upstream oil and gas exploration and production.

 

 

Falkland Islands

Corporate

Total

(Continuing)

Greater Mediterranean

(Discontinued)

Year ended 31 December 2024

$'000

$'000

$'000

$'000

Cost of sales

-

-

-

1,685

Gross profit

-

-

-

1,685

Exploration and evaluation expense

(393)

-

(393)

-

Administrative expenses

-

(3,330)

(3,330)

(130)

Charge for share based payments

-

(76)

(76)

-

Foreign exchange gain

-

170

170

-

Results from operating activities and other income

(393)

(3,236)

(3,629)

1,555

Other income

-

79,802

79,802

-

Other expenses

-

(1,024)

(1,024)

-

Finance income

-

1,927

1,927

-

Finance expense

(285)

(11)

(296)

(302)

Profit/(loss) before tax

(678)

77,458

76,780

1,253

Tax

(22,300)

(8,121)

(30,421)

-

Profit/(loss) for year

(22,978)

69,337

46,359

1,253

Reporting segments assets

271,110

83,224

354,334

1,203

Reporting segments liabilities

84,559

8,322

92,881

14,279

Depreciation and impairments

393

19

412

-

Year ended 31 December 2023

Falkland Islands

Corporate

Total

(Continuing))

Greater Mediterranean

(Discontinued)

 

Cost of sales

-

-

-

(870)

 

Gross loss

-

-

-

(870)

 

Exploration and evaluation expense

(158)

(117)

(275)

(3)

 

Administrative expenses

-

(3,840)

(3,840)

(446)

 

Charge for share based payments

-

(117)

(117)

-

 

Foreign exchange gain/(loss)

-

328

328

(21)

 

Results from operating activities and other income

(158)

(3,746)

(3,904)

(1,340)

 

Finance income

-

1,191

1,191

-

 

Finance expense

(110)

(11)

(121)

(376)

 

Loss before tax

(268)

(2,566)

(2,834)

(1,716)

 

Tax

-

-

-

-

 

Loss for year

(268)

(2,566)

(2,834)

(1,716)

 

Reporting segments assets

256,847

9,051

265,898

1,352

 

Reporting segments liabilities

47,294

2,139

49,433

17,697

 

Depreciation and impairments

158

39

197

-

 

 

4. Exploration and evaluation expenses

 

2024

2023

$'000

$'000

Restated

Exploration and evaluation assets written off (see note 15)

393

158

Other exploration and evaluation expenses

-

117

393

275

 

5. Administrative expenses

 

2024

2023

$'000

$'000

Restated

Directors' remuneration excluding benefits and pensions (see note 6)

844

785

Other employees' salaries

1,293

856

National insurance costs

1,027

303

Pension costs

172

67

Employee benefit costs

62

52

Total staff costs

3,398

2,063

Amounts reallocated

(1,147)

(661)

Total staff costs charged to administrative expenses

2,251

1,402

Auditors' remuneration (see note 7)

212

178

Other professional fees

416

1,836

Other

733

690

Depreciation

19

39

Amounts reallocated

(301)

(305)

3,330

3,840

 

The average number of full time equivalent staff employed during the year was 7 (2023: 7). As at the year end the Group employed (including part time) 9 staff, 7 of which were in the UK and 2 in Italy.

Amounts reallocated relate to the costs of staff and associated overhead in relation to non administrative tasks. These costs are allocated to relevant expenses or capitalised as part of the intangible exploration and evaluation assets as appropriate.

6. Directors' remuneration

 

 

2024

$'000

2023

$'000

Executive salaries

585

475

Company pension contributions to money purchase schemes & pension cash allowance

62

58

Benefits

13

11

Non-executive fees

259

252

919

796

 

The total remuneration of the highest paid director in GBP, was:

2024

2023

£'000

£'000

Annual salary

458

381

Money purchase pension schemes & pension cash allowance

49

47

Benefits

5

5

512

433

 

Interest in outstanding share options, LTIPs and SARs, by director, are also separately disclosed in the directors' remuneration report.

7. Auditors' remuneration

 

2024

$'000

2023

$'000

Fees payable to the Company's auditors for the audit of the Company's annual financial statements

186

146

Fees payable to the Company's auditors and its associates for other services:

Audit of the accounts of subsidiaries

26

26

Assurance related non-audit services

-

6

212

178

 

8. Share based payments

The charge for share based payments relate to options granted to employees of the Group.

2024

$'000

2023

$'000

Charge for option scheme

76

117

Charge for services outside the Group 

-

500

76

617

 

During the prior year 4.5 million options were issued at 7.0p per share in connection with the delivery of the Sea Lion project to an individual employed outside of the Rockhopper group. These options vest in three tranches of 1.5 million each at project sanction, first oil, and reaching project completion. The value of these options was $500,000 and made with reference to the services received. The cost of the options was offset against the liability in relation to the service provided.

Option scheme

An equity option package was implemented during 2020 (the "Option Scheme") to replace the existing long term incentive plan. In place of the LTIP scheme, executive directors and senior staff received options to subscribe for Ordinary Shares, exercisable at a price of 6.25 pence per new Ordinary Share (the "Market Price Options"). The Market Price Options will vest in equal tranches after three, four and five years' further continuous employment.

Executive directors and staff in lieu of their contractual notice periods also received options to subscribe for an aggregate new ordinary shares in the capital of the Company ("Ordinary Shares"), exercisable at a price of 1 pence per new Ordinary Share (the "1p Options").

The following movements occurred during the year:

Issue date

Vesting date

Expiry date

At 31 December

2023

Lapsed/Granted

At 31 December

2024

18 May 2020

18 Nov 2020

18 May 2030

1,986,972

-

1,986,972

18 May 2020

18 May 2021

18 May 2030

3,271,917

-

3,271,917

18 May 2020

18 May 2023

18 May 2030

5,116,664

-

5,116,664

18 May 2020

18 May 2024

18 May 2030

5,116,667

-

5,116,667

18 May 2020

18 May 2025

18 May 2030

5,116,669

-

5,116,669

25 January 2023

Variable

25 January 2033

4,500,000

-

4,500,000

25,108,889

-

25,108,889

Long term incentive plan

LTIP awards relate to a historic scheme and are structured as nil cost options. All LTIPs have vested and there were no movements during the year.

 

Issue date

Expiry date

At 31 December

2023

Expired/Exercised

At 31 December

2024

16 June 2017

16 June 2027

2,352,000

-

2,352,000

31 July 2019

31 July 2029

2,337,501

-

2,337,501

4,689,501

-

4,689,501

 

9. Foreign exchange

2024

$'000

2023

$'000

Restated

Other foreign exchange movements

170

328

Total net foreign exchange gain

170

328

 

10. Other income and expense

2024

$'000

2023

$'000

Monetisation Agreement - fair value tranche 1 proceeds

20,556

-

Monetisation Agreement - fair value tranche 2 proceeds

59,246

-

Other income

79,802

-

Other expenses

(1,024)

-

In August 2022, pursuant to an ICSID arbitration which commenced in 2017, Rockhopper was awarded approximately €190 million plus interest and costs following a unanimous decision by the ICSID appointed arbitral Tribunal that Italy had breached its obligations under the Energy Charter Treaty (the "Award").

Rockhopper submitted a letter to the Italian Republic in September 2022 formally requesting payment of €247 million, representing the Award amount plus accrued interest from 29 January 2016 to 23 August 2022 and costs. Interest was paused for four months following the date of the Award (being 23 August 2022) and is now accruing at EURIBOR + 4% which Rockhopper estimates at between €1.25 million and €1.5 million per calendar month. Interest compounds annually.

Following Italy's request to seek annulment of the Award, an ad hoc Committee was constituted to hear relevant arguments and ultimately make a ruling on Italy's request to annul the Award. A hearing was held in Madrid in April 2024 as part of Italy's request to have the Award annulled following which post hearing submissions were made in response to questions raised by the Committee. No further submissions are anticipated to be needed by the Committee and our expectation is that we just await an outcome.

On 20 December 2023, Rockhopper announced its entry into a funded participation agreement (the "Agreement") with a regulated specialist fund that has experience in investing in legal assets (the "Specialist Fund") to monetise its Award.

Under the terms of the Agreement, the Specialist Fund will make cash payments to Rockhopper in up to three tranches:

· Tranche 1 - Rockhopper retain €19 million of an upfront payment of €45million on completion. As previously disclosed, Rockhopper entered into a litigation funding agreement in 2017 under which all costs relating to the Arbitration from commencement to the rendering of the Award were paid on its behalf by a separate specialist arbitration funder (the "Original Arbitration Funder"). That agreement entitles the Original Arbitration Funder to a proportion of any proceeds from the Award or any monetisation of the Award. Rockhopper has entered into an agreement with the Original Arbitration Funder to pay €26 million of the Tranche 1 proceeds to discharge all of its liabilities under the agreement with the Original Arbitration Funder.

· Tranche 2 - Additional contingent payment of €65 million upon a successful annulment outcome. Should the Award be partially annulled and the quantum reduced as a result, then Tranche 2 will be reduced such that the amounts under Tranche 1 and Tranche 2 shall be adjusted downward on a pro-rata basis. For example, if the quantum of the Award is reduced by 20%, then the amounts under Tranche 1 and Tranche 2 shall be reduced by 20%. For the avoidance of doubt, the amounts under Tranche 1 and Tranche 2 shall not reduce below €45m in any circumstance.

· Tranche 3 - Potential payment of 20% on recovery of amounts in excess of 200% of the Specialist Fund's total investment including costs.

 

At the prior year end the Agreement was still contingent on precedent conditions being satisfied and as such the Agreement was also classified as a contingent asset. In June 2024 the precedent conditions were satisfied and Rockhopper received its initial consideration of €19 million. Management have determined that the Agreement is a financial instrument within the scope of IFRS 9 and as such should be fair valued on initial recognition and subsequently through profit and loss. Other income relates to the fair value of this consideration, i.e. the retained €19 million on completion plus the fair value of subsequent tranches translated at the prevailing €:$ rate as at completion.

Other expenses relate principally to legal costs associated with the Arbitration Award and Monetisation. In October 2024 the Group decided, in line with normal market practice, that insuring to protect shareholders against loss resulting from an annulment of the Award to be the most prudent course of action. The insurance policy will ensure that, in the event that the Italian Republic succeeds in having the entire Award annulled or in the event of partial annulment, the combination of the Tranche 2 payment and the insurance payout shall entitle Rockhopper to a total no less than €31 million.

The policy has been placed via an FCA-registered specialist insurance brokerage. The policy has been underwritten by a specialist underwriting agency and subscribed to by a number of A-rated insurance carriers and syndicates. The only impact on the financial statements is the total cost of the policy, which including applicable taxes and underwriting fees, is €4 million. This cost has been spread over the life of the policy (which materially exceeds the expected time to receive an outcome from the Award annulment). As such the majority of this cost is recorded as a prepayment. The balance has been included in other expenses along with the other aforementioned legal costs.

11. Finance income and expense

2024

$'000

2023

$'000

Restated

 

Warrants (see note 19)

-

889

 

Unwinding of discounts on fair value of Monetisation Agreement (see note 10)

1,323

-

 

Bank and other interest receivable

604

302

 

Total finance income

1,927

1,191

 

 

Unwinding of discount on decommissioning provisions (see note 21)

91

110

 

Other

205

11

 

Total finance expense

296

121

 

 

 

12. Taxation

2024

$'000

2023

$'000

Current tax:

 

Overseas tax

1,840

-

Adjustment in respect of prior years (see Note 20)

22,300

-

Total current tax charge

24,140

-

Deferred tax:

 

Overseas tax

6,281

-

Total deferred tax charge - note 22

6,281

-

Tax on profit/(loss) on ordinary activities

30,421

-

 

The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax applied to profits for the year are as follows:

Profit/(loss) on ordinary activities before tax

76,780

(4,550)

Profit/(loss) on ordinary activities multiplied at 26% (31 December 2023: 26%)

19,963

(1,183)

Effects of:

 

Income and gains not subject to taxation

(15,750)

-

Expenditure not deductible for taxation

127

81

Losses (utilised)/carried forward

(3,120)

1,102

Adjustments in respect of prior years (see Note 20)

22,300

-

Deferred taxes

6,421

-

Other (including changes to, and differences in, tax rates)

(480)

-

Current tax charge for the year

30,421

-

 

The total carried forward losses and carried forward pre trading expenditures potentially available for relief are as follows:

2024

$'000

2023

$'000

UK

85,631

81,729

Falkland Islands

640,979

623,323

Italy

42,568

69,748

 

Deferred tax assets are only recognised on losses carried forward to the extent it is deemed probable that they will be utilised in the future. No deferred tax asset has been recognised in respect of temporary differences arising on losses carried forward, outstanding share options or depreciation in excess of capital allowances where there is uncertainty in the timing of profits and hence future utilisation. Losses carried forward in the Falkland Islands includes amounts held within entities where utilisation of the losses in the future may not be possible. As disclosed in Note 20 Tax payable, we are in the process of agreeing our tax returns in relation to the farm-out to Navitas that completed in September 2022. The carried forward losses is based on our returns to FIG and may be revised leading to fewer losses carried forward.

13. Discontinued operations

In October 2024, the Group announced the disposal, subject to conditions precedent, of its 100% interest in Rockhopper Civita Limited which holds the Group's remaining operations in the Greater Mediterranean geographical segment ("the disposal group"). The transaction had not completed at the year end, but the assets and associated liabilities have been reclassified as held for sale on the balance sheet.

Due to the fact that the disposal group has been classified as held for sale and represents a geographical area of operations it has also been treated as a discontinued operation in line with IFRS 5. As such the comparative information in the Income Statement and relevant notes has been re-presented.

The results of the discontinued operations, which have been included in the profit for the year, are the same as the Greater Mediterranean segment as disclosed in Note 3.

Cash flows from discontinued operations

2024

$'000

2023

$'000

Net cash from operating activities

(312)

(877)

Net cash from investing activities

(88)

-

Net cash from financing activities

-

-

 

The costs of disposal of Rockhopper Civita Limited are expected to be substantially less than the carrying amount of the related net liabilities and accordingly no impairment losses have been recognised on the classification of these operations as held for sale. The major classes of assets and liabilities comprising the operations classified as held for sale are as follows:

2024

$'000

Exploration and evaluation assets

441

Other receivables

745

Cash and cash equivalents

17

Assets classified as held for sale

1,203

 

Other payables

1,692

Provisions

12,587

Liabilities associated with assets held for sale

14,279

 

14. Basic and diluted profit/(loss) per share

2024

Number

2023

Number

 

Weighted average number of Ordinary Shares

644,879,070

595,630,305

Weighted average of shares held in Employee Benefit Trust

(1,304,500)

(1,304,500)

Weighted average number of Ordinary Shares for the purposes of basic earnings per share

643,574,570

594,325,805

Effects of

Share options and warrants

10,498,279

-

Weighted average number of Ordinary Shares for the purposes of diluted earnings per share

654,072,849

594,325,805

 

Continuing operations

Discontinued operations

Total

Continuing operations

Discontinued operations

Total

2024

2024

2024

2023

2023

2023

$'000

$'000

$'000

$'000

$'000

$'000

Net profit/(loss) after tax for purposes of basic and diluted earnings per share

46,359

1,253

47,612

(2,834)

(1,716)

(4,550)

 

The weighted average number of Ordinary Shares takes into account those shares which are treated as own shares held in trust. As at the year end the Group had 1,304,500 Ordinary shares held in an Employee Benefit Trust (2023: 1,304,500) which have been purchased to settle future exercises of options.

4.5 million options (2023: 4.5 million) have not been included in the calculation of diluted EPS because their exercise is contingent on the satisfaction of certain criteria that had not been met at 31 December 2024. The total number of options in issue is disclosed in note 8.

As the Group is reporting a loss in the prior year then in accordance with IAS33 the share options are not considered dilutive because the exercise of the share options would have the effect of reducing the loss per share.

15. Intangible exploration and evaluation assets

Falkland

Islands

Greater

Mediterranean

 

Total

$'000

$'000

$'000

At 31 December 2022

251,589

381

251,970

Additions

5,416

-

5,416

Written off exploration costs

(158)

-

(158)

Foreign exchange movement

-

-

-

At 31 December 2023

256,847

381

257,228

Additions

14,656

78

14,734

Written off exploration costs

(393)

-

(393)

Foreign exchange movement

-

(18)

(18)

Reclassified to assets held for sale

-

(441)

(441)

At 31 December 2024

271,110

-

274,110

 

Falkland Islands Licences

The amounts for intangible exploration and evaluation assets represent active exploration and evaluation projects. The additions during the year of US$14.7 million relate principally to the Sea Lion development.

Given the quantum of intangible exploration and evaluation assets potential impairment could have a material impact on the financial statements. As such whether there are indicators of impairment is a key judgement. Management looked at a number of factors in making a judgement as to whether there are any indicators of impairment during the year. In particular with regard to the carrying value of the Falkland Islands assets, which relates to the Sea Lion Phase one development these include, but are not limited to;

The Operator published an updated CPR in March 2025 which continued to evidence a robust project and publically talk of being able to sanction the project in mid 2025;

Rockhopper and Navitas have used the extensive engineering work already carried out to create a lower cost development;

Licences were due to expire during 2024. A license extension was requested across all the licences and the Falkland Islands Government have continued to be supportive and granted an extension to the end of 2026;

Financing availability at a project level and also to cover any equity shortfall of the Group after utilising Post-FID loan facilities; and

Current market conditions, including oil price and security of supply, provide stronger prospects for ultimate sanction of Sea Lion.

The Group benefit from a Post FID loan which will cover two thirds of its share of project equity costs. It is likely that to enable sanction the Group will need to raise additional finance to cover its proportion of unfunded project costs. The exact quantum is still to be determined but Management believe that, to the extent necessary, extra funding will be achievable based on current expectations of project costs and funding availability.

Management concluded that for these reasons, currently for Phase 1 of the Sea Lion development, there were no indicators of impairment.

Ultimately should any required additional funding not be available then it would not be possible to sanction the Sea Lion phase 1 development. This would possibly lead to the carrying value of the intangible asset not being recovered.

Management made the judgement that the limited near term capital being invested outside of the Phase 1 project is still an indicator of impairment in the subsequent phases of the project. Accordingly the decision continues to be to write off historic exploration costs associated with the resources which will not be developed as part of the Sea Lion Phase 1 project. This impairment has no impact on the Group's long‐term strategy for multiple phases of development in the North Falkland Basin. This will be re-evaluated when the Phase 1 project has been sanctioned and investment resumes on the Phase 2 project.

16. Other receivables

2024

$'000

2023

$'000

Current

Receivables

193

675

Prepayments

3,906

-

Other

58,238

566

62,337

1,241

 

The carrying value of receivables approximates to fair value. Other receivables relates to the fair value of the subsequent tranches of the Monetisation Agreement and prepayments relate to costs associated with an insurance policy taken out during the year. Further details of both of these amounts are disclosed in note 10. The year end fair value of the Monetisation Agreement of $58.2 million varies from the amount initially recognised of $59.2 million as a result of a $1.3 million unwinding of discount offset by a $2.3 million foreign exchange loss. These foreign exchange losses are part of the exchange differences on translation of foreign operations included the Consolidated Statement of Comprehensive Income.

 

 

17. Term deposits

 

2024

$'000

 

2023

$'000

Maturing after the period end

Within three months

19,969

4,501

19,969

4,501

 

Term deposits relate to amounts placed on fixed term deposit with various A rated deposit banks.

18. Other payables and accruals

 

Current liabilities

2024

$'000

2023

$'000

Accounts payable

225

2,309

Accruals

6,289

4,586

Other creditors

2

281

6,516

7,176

 

All amounts are expected to be settled within twelve months of the balance sheet date and so the book values and fair values are considered to be the same. Accruals include $4.7 million (2023: $3.6 million) amounts owed to Navitas in relation to Sea Lion. These amounts are expected to be invoiced and then ultimately settled using the Pre FID loan facility provided by Navitas. For further details see Non-current liabilities below.

Non current liabilities

2024

$'000

2023

$'000

Co-venturers loan

15,354

-

15,354

-

 

The Group benefits from funding to cover the majority of its share of Sea Lion phase 1 related costs up to FID through a loan from Navitas with interest charged at 8% per annum (the "Pre-FID Loan"). Subject to a positive FID, Navitas will provide an interest free loan to fund two-thirds of the Group's share of Sea Lion phase 1 development costs (for any costs not met by third party debt financing).

Co-venturers loan relate entirely to amounts utilised under the Pre-FID Loan facility and associated interest. This loan is repayable from 85% of Rockhopper's working interest share of Sea Lion Phase 1 project cash flows and as such has been classified as non current. In the event that material progress towards FID has not occurred by 23 September 2027, Rockhopper can elect to remove Navitas from the Falkland Islands petroleum licences (should the licences still be in effect at that time) by repaying the Pre-FID Loan. Should material progress have been made, but FID not achieved, then this period can be extended by 12 months and then a further six months if certain project milestones have been achieved.

19. Derivative financial liabilities

2024

$'000

2023

$'000

Brought forward

450

1,744

Changes in fair value taken to finance income (see note 11)

-

(889)

Exercise of warrants

(450)

(405)

-

450

 

Warrants issued as part of the Placing and Subscription ("Warrants") were treated as derivative financial liabilities and as such carried at fair value on the balance sheet with changes in fair value recognised in finance income or finance expenses in the income statement as appropriate. They are not designated as hedging instruments.

20. Tax payable

2024

$'000

2023

$'000

Current tax payable

1,806

-

Non current tax payable

22,300

-

Total tax payable

24,106

-

 

Current tax payable of $1.8 million relates to amounts expected to be due in relation to the Tranche 1 proceeds received from the Agreement as disclosed in note 10. Non-current tax payable of $22.3 million relates to the potential liability arising from the historic farm-outs in the Falkland Islands.

On the 8 April 2015, the Group agreed binding documentation ("Tax Settlement Deed") with FIG in relation to the tax arising from the Group's 2012 farm out. The Tax Settlement Deed confirms the quantum and deferment of the outstanding tax liability and is made under Extra Statutory Concession 16. The Tax Settlement Deed also states that the Group is entitled to make adjustment to the outstanding tax liability if and to the extent that the Commissioner is satisfied that any part of the Development Carry becomes irrecoverable.

In September 2022 the transaction enabling Harbour Energy plc to exit and Navitas to enter the North Falkland Basin completed. Under the transaction the balance of Development Carry became irrecoverable.

Following the transaction professional advice (the 'Advice') was sought over whether the Group was entitled to adjust the tax returns for the irrecoverable Development Carry. The Advice confirmed that it is probable that the Group is entitled to adjust the outstanding tax liability. As such the Group submitted tax returns on this basis. FIG disagreed with this analysis and asserted that the Group continued to owe £59.6 million payable around first oil.

Based on the information as at 31 December 2023 the Directors made a judgement to derecognise any liability, given that it was considered the most probable outcome based on the Advice.

Separately the Group submitted tax returns in relation to the farm out to Navitas that occurred immediately after their acquisition, from Harbour Energy plc of the company that holds the North Falkland's Basin licences. The consideration for this transaction was the provision of loan funding to the Group to cover the majority of its share of Sea Lion phase 1 related costs from transaction completion up to FID through a loan from Navitas with interest charged at 8% per annum (the "Pre-FID Loan"). Subject to a positive FID, Navitas will provide an interest free loan to fund two-thirds of the Group's share of Sea Lion phase 1 development costs (for any costs not met by third party debt financing). The Directors are confident that the Group has sufficient losses to ensure no tax liability will arise.

The Group has continued discussions with FIG to resolve differences regarding any outstanding tax liability arising from the Tax Settlement Deed and recognise that the arrangements make the project financing for Sea Lion significantly more difficult.

Given these discussions, and notwithstanding the Advice, the level of uncertainty relating to the potential tax liability has increased. For this reason, the Directors' have recognised a liability this year, which has been determined with reference to a probability weighting approach to reflect the additional uncertainty. For the avoidance of doubt there is no agreement to date with FIG and the ultimate tax liability could be materially different.

Should it be proven that there is no entitlement to adjustment under the Tax Settlement Deed then the outstanding tax liability would be £59.6 million and still payable on the earlier of: (i) the first royalty payment date on Sea Lion; (ii) the date of which Rockhopper disposes of all or a substantial part of the Group's remaining licence interests in the North Falkland Basin; or (iii) a change of control of Rockhopper Exploration plc.

 

21. Provisions

Decommissioning

Other

 

provision

$'000

provisions

$'000

2024

$'000

2023

$'000

Brought forward

19,099

33

19,132

19,177

Amounts utilized

-

-

-

(48)

Changes in estimate

(5,400)

-

(5,400)

-

Amounts arising in the year

-

3

3

2

Unwinding of discount

392

-

392

482

Foreign exchange

60

-

60

508

Reclassified to liabilities held for sale

(12,551)

(36)

(12,587)

-

Carried forward at year end

1,600

-

1,600

20,121

 

The decommissioning provision relates to the Group's licences in the Greater Mediterranean region and facilities in the Falkland Islands. As disclosed in note 13 amounts relating to the Greater Mediterranean have been reclassified as liabilities held for sale. Prior to reclassification Management based the liability on the Group's plans should the transaction not complete.

Judgements are made based on the long term economic environment around appropriate inflation and discount rates to be applied as well as the timing of any future decommissioning. In the Falkland Islands costs are most likely to be in $US or GB£. Management consider the UK economic environment is best when informing these judgements due to probable contractor base likely to be used. All assets in the Greater Mediterranean are in Italy and so costs are likely to be in Euros and as such management consider the Italian as well as the broader Eurozone region to inform these judgements

The Group believe it appropriate to use the following inflation and discount rates;

2024

2023

Falklands

Greater Mediterranean

Falklands

Greater Mediterranean

Inflation

1.6%

1.85%

2.0%

2.0%

Discount

5.2%

2.36% - 3.25%

2.0%

2.0%

Period (years)

30

1-25

30

2-25

 

The changes in estimate in the year all relate to the change in relative discount and inflation rates.

Decommissioning costs are uncertain and management's cost estimates can vary in response to many factors, including changes to the relevant legal requirements, the emergence of new technology or experience at other assets. The expected timing, work scope and amount of expenditure may also change. Therefore, significant estimates and assumptions are made in determining the costs associated with the provision for decommissioning. The estimated decommissioning costs are reviewed annually, and the results of the most recent available review used as a basis for the amounts in the Consolidated Financial Statements. Provision for environmental clean-up and remediation costs is based on current legal and contractual requirements, technology and price levels. However, actual decommissioning costs will ultimately depend upon future market prices for the necessary decommissioning works required which will reflect market conditions at the relevant time.

The estimated costs associated with the decommissioning works are those that are likely to have a material impact on the provision. Given the facilities in the Falkland Islands are expected to be utilised during the Sea Lion development any changes in the provision are capitalised in the intangbile asset. A 10 per cent increase in these estimates would increase both the provision and the intangible assets in the year by US$160 thousand. Similarly, a 10 per cent reduction in these estimated costs would decrease both the provision and the intangible assets in the year by US$160 thousand.

Other provisions include amounts due for accrued holiday and leaving indemnity to staff in Italy, that will become payable when they cease employment, these have also been reclassified to liabilities held for sale.

 

22. Deferred tax

 

 

The following are the major deferred tax liabilities and assets recognised by the group and movements thereon during the current and prior reporting period.

 

Accelerated tax

 depreciation

$'000

Revaluation of financial assets

$'000

Tax

losses

$'000

Total

 

$'000

 

At 1 January 2023 and 1 January 2024

(39,137)

-

-

(39,137)

 

Foreign exchange

-

309

(196)

113

 

Movement in period

-

(17,088)

10,807

(6,281)

 

At 31 December 2024

(39,137)

(16,779)

10,611

(45,305)

 

 

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the group intends to settle its current tax assets and liabilities on a net basis.

Total carried forward losses and carried forward pre-trading expenditures available for relief on commencement of trade at 31 December 2024 are disclosed in note 12 Taxation. Deferred tax assets are only recognised in relation to these losses to the extent it is probable that future suitable taxable profits will be available against which these losses can be utilised.

23. Share capital

2024

2023

$'000

Number

$'000

Number

Authorised, called up, issued and fully paid: Ordinary shares of £0.01 each

9,455

640,578,764

9,196

620,229,436

2024

Number

2023

Number

Shares in issue brought forward

620,229,436

586,485,319

Shares issued

- Issued on exercise of warrants and share options

20,349,328

33,744,117

Shares in issue carried forward

640,578,764

620,229,436

 

24. Reserves

 

Set out below is a description of each of the reserves of the Group:

Share premium

Amount subscribed for share capital in excess of its nominal value.

Share based remuneration

The share incentive plan reserve captures the equity related element of the expenses recognised for the issue of options, comprising the cumulative charge to the income statement for IFRS2 charges for share based payments less amounts released to retained earnings upon the exercise of options.

Own shares held in trust

Shares held in trust by the Employee Benefit Trust which have been purchased to settle future exercises of options.

Merger reserve

The difference between the nominal value and the fair value of shares issued on acquisition of subsidiaries.

Foreign currency translation reserve

Exchange differences arising on consolidating the assets and liabilities of the Group's subsidiaries are classified as equity and transferred to the Group's translation reserve.

Special reserve

The reserve is non distributable and was created following cancellation of the share premium account on 4 July 2013. It can be used to reduce the amount of losses incurred by the Parent Company or distributed or used to acquire the share capital of the Company subject to settling all contingent and actual liabilities as at 4 July 2013. Should not all of the contingent and actual liabilities be settled, prior to distribution the Parent Company must either gain permission from the actual or contingent creditors for distribution or set aside in escrow an amount equal to the unsettled actual or contingent liability.

Retained losses

Cumulative net gains and losses recognised in the financial statements.

25. Capital commitments

Significant capital expenditure contracted for at the end of the reporting period but not recognised as liabilities is US$0.6million (2023: US$0.7 million) relating to the Group's intangible exploration and evaluation assets.

26. Related party transactions

Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation and are not disclosed. Subsidiaries are listed in notes of the Company financial statements.

The remuneration of directors, who are the key management personnel of the Group, is set out below in aggregate. Further information about the remuneration of individual directors, including deferred salary and bonus amounts, is provided in the Directors' Remuneration Report on pages 28 to 37.

 

Year ended

31 December

Year ended

31 December

2024

$'000

 

2023

$'000

Short term employee benefits

918

796

Share based payments

48

72

966

868

 

On 6 April 2023, Alison Baker, Senior Independent Director, in order to effect a "Bed and ISA" transaction, sold 142,865 Ordinary shares of 1 pence each (Ordinary Shares) at a price of 10.725 pence per Ordinary Share and then purchased into an Individual Savings Account (ISA) 142,753 Ordinary Shares at the same price.

On the 20 December 2023 the Company received notifications from the below Directors and former Directors of the exercise of Warrants. In total an aggregate 1,071,426 new Ordinary Shares of £0.01 each ("Ordinary Shares") in the Company were issued at an exercise price of 9 pence per ordinary share, providing the Company with proceeds of £96,428.

Number of Warrants

Sam Moody

714,285

Keith Lough

214,285

Alison Baker

71,428

John Summers

71,428

 27. Financial instruments - Fair values and risk management

A. Accounting classifications and fair values

The only assets classified at fair value through profit and loss is the Agreement as disclosed in note 10 Other income and expenses.

The only liabilities classified as at fair value through profit and loss are the derivative financial liabilities as disclosed in note 19.

B. Measurement of fair values

This section explains the judgements and estimates made in determining the fair values of the financial instruments that are recognised and measured at fair value in the financial statements. To provide an indication about the reliability of the inputs used in determining fair value, the group has classified its financial instruments into the three levels prescribed under the accounting standards. An explanation of each level follows underneath.

Financial asset/liability

Level

Valuation technique/key inputs

Significant unobservable input(s)

Relationship and sensitivity of unobservable inputs

Other receivables (Note 16)

1

Discounted cash flow

Future cash flows are contractual. To the extent necessary these were risked with reference to the actual cost incurred to insure the same cash flows. These were then discounted at market observable rates.

Timing of cash flows.

 

 

The later the timing of cash flows the lower the fair value. If the timing was 3 months longer/shorter the carrying value would decrease/increase $650,000.

Derivative financial liabilities (Note 19)

1

Black-scholes model.

The following variables were taken into consideration: current underlying price of the commodity, options strike price, time until expiration, implied volatility of the commodity and Risk free rate

N/A

N/A

 

Warrants issued as part of the Placing and Subscription were treated as derivative financial liabilities and as such carried at fair value on the balance sheet with changes in fair value recognised in finance income or expenses in the income statement as appropriate. They are not designated as hedging instruments. Fair value of the Warrants were determined using a black scholes model the key inputs of which are summarised below.

C. Financial risk management

The Group has exposure to the following risks arising from financial instruments:

· Market risk see Note 27 C i

· Credit risk see Note 27 C ii

· Liquidity risk see Note 27 C iii

· Capital risk see Note 27 C iv

i. Market rate risk

Foreign exchange risks: The Group is exposed to foreign exchange movements on monetary assets and liabilities denominated in currencies other than US$. A number of the Group's subsidiaries have a functional currency other than US$, where this is the case the Group has an exposure to foreign exchange differences with differences being taken to reserves.

The Group has cash and cash equivalents and term deposits of US$20.9 million of which US$0.4 million was held in US$ denominations. The Group has expenditure in GB£ and Euro and accepts that to the extent current cash balances in those currencies are not sufficient to meet those expenditures they will need to acquire them. The following table summarises the split of the Group's assets and liabilities by currency:

Currency denomination of balance

$

$'000

£

$'000

$'000

Assets

 

 

 

31 December 2024

275,536

4,575

75,426

31 December 2023

258,152

7,743

1,355

Liabilities

 

 

 

31 December 2024

60,815

23,932

22,413

31 December 2023

47,180

2,249

17,697

 

The following table summarises the impact on the Group's pre-tax profit/(loss) and equity of a reasonably possible change in the US$ to GB£ exchange rate and the US$ to euro exchange:

Pre tax profit/(loss)

Total equity

+10% US$ rate

-10% US$ rate

+10% US$ rate

-10% US$ rate

increase

decrease

increase

decrease

$'000

$'000

$'000

$'000

US$ against GB£

31 December 2024

(194)

194

(194)

194

31 December 2023

549

(549)

549

(549)

 

US$ against euro

31 December 2024

5,301

(5,301)

5,301

(5,301)

31 December 2023

(1,634)

1,634

(1,634)

1,634

 

Interest rate risks: the Group's only external debt is the Pre-FID loan from Navitas. It is at a fixed rate of interest and the Group does not account for this at FVTPL so a change in interest rate at the reporting date would not affect profit or loss. Therefore exposure to interest rates is limited to finance income it receives on cash and term deposits. The Group is not dependent on its finance income and given the current interest rates the risk is not considered to be material.

ii. Credit risk

The Group recharges partners and third parties for the provision of services. Should the companies holding these accounts become insolvent then these funds may be lost or delayed in their release. The amounts classified as receivables as at the 31 December 2024 $193,000 (31 December 2023: $910,000).

Other receivables relates to the fair value of the Agreement to monetise the Group's Award. The counter party to the Agreement is a specialist fund with significant funds under management. In the unlikely event the contingent Tranche 2 proceeds become due and fail to be paid, then the acquirer will forfeit all their rights under the agreement along with any payments to date.

Credit risk relating to the Group's other financial assets which comprise principally cash and cash equivalents and term deposits arises from the potential default of counterparties. Investments of cash and deposits are made within credit limits assigned to each counterparty. The risk of loss through counterparty failure is therefore mitigated by the Group splitting its funds across a number of banks.

iii. Liquidity risk

The Group monitors the liquidity position by preparing cash flow forecasts to ensure sufficient funds are available. Further information can be found in the going concern assessment contained in Note 1.5.

Maturity of financial liabilities

The table below analyses the Group's financial liabilities, which will be settled on a gross basis, into relevant maturity groups based on the remaining period at the balance sheet to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows. The Co-venturers loan balance of $15,354,000 (2023: $nil) included in non-current payables has been excluded from the analysis as its repayment is to be made from its as yet unsanctioned Sea Lion development. Whilst it is expected that the project will be sanctioned in the future there is no guarantee on timing so the date of any repayment is yet to be determined and any impact on liquidity would be considered at sanction.

 

 

Within 1 year

 

2 to 5 years

More than

5 years

Total contractual

cashflows

 

Carrying amount

At 31 December 2024

$'000

$'000

$'000

$'000

$'000

Other payables

6,516

-

-

6,516

6,516

6,516

-

-

6,516

6,516

 

 

 

 

Within 1 year

 

 

2 to 5 years

More than

5 years

 

Total contractual

cashflows

 

 

Carrying amount

At 31 December 2023

$'000

$'000

$'000

$'000

$'000

Other payables

7,176

-

-

7,176

7,176

Lease liability

246

-

-

246

246

7,422

-

-

7,422

7,422

 

iv. Capital risk

The Group manages capital to ensure that it is able to continue as a going concern whilst maximising the return to shareholders. The capital structure consists of cash and cash equivalents and equity. The board regularly monitors the future capital requirements of the Group, particularly in respect of its ongoing development programme. Further information can be found in the going concern assessment contained in Note 1.5.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.
 
END
 
 
FR PKCBBPBKKOPB

Related Shares:

Rockhopper
FTSE 100 Latest
Value8,772.38
Change55.93