REG - Pennpetro Energy PLC - 2025 Annual Report & Accounts
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RNS Number : 5369X Pennpetro Energy PLC 20 March 2026
10166359 (England and Wales)
PENNPETRO ENERGY PLC
ANNUAL REPORT AND FINANCIAL STATEMENTS FOR THE YEAR ENDED
31 MARCH 2025
CONTENTS
Page
Company Information 2
Chairman's Statement 3
Strategic Report 6
TCFD Disclosures 7
Directors' Report 13
Directors' Information 17
Statement of Directors' Responsibilities 18
Corporate Governance Report 19
Directors' Remuneration Report 24
Audit Committee Report 27
Independent Auditor's Report 29
Consolidated Statement of Comprehensive Income 34
Consolidated Statement of Financial Position 35
Company Statement of Financial Position 36
Consolidated Statements of Changes in Equity 37
Company Statements of Changes in Equity 38
Consolidated Statements of Cash Flows 39
Company Statements of Cash Flows 40
Notes to the Financial Statements 41
COMPANY INFORMATION
Directors Olof Nils Rapp (Senior Non-Executive Director)
Mavriky Kalugin (Chief Executive Officer) (appointed 16 October 2025)
Richard Spinks (Executive Chairman) (appointed 29 October 2025)
Sergiy Lesyk (Non-Executive Director) (appointed 27 January 2026)
Secretary MSP Corporate Services Limited
Registered Office Eastcastle House,
27-28 Eastcastle Street
London, W1W 8DH
Legal Advisors UK Legal Advisers US Legal Advisers
DMH Stallard LLP Walne Law, PLLC
6 New Street Square 4900 Woodway
New Fetter Lane, London Houston, Texas
EC4A 3BF TX 77056
Porter Hedges LLP
1000 Main Street, 36th Fl.
Houston, Texas
TX 77002
Corporate broker Oak Securities Ltd
90 Jermyn Street
London
SW1Y 6JD
Independent Auditor Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
Registrars Computershare Investor Services plc
The Pavilions
Bridgewater Road
Bristol
BS13 8AE
Communications Capital Market Communications Limited
40 Strand
London
WC2N 5RW
Registered Number 10166359
Chairman's Statement
The period under review has been one of profound transition for Pennpetro
Energy plc, marked by significant operational, financial and governance
challenges, which since October 2025, after the period of these accounts have
been dramatically improved and overhauled to support the Company's stated goal
of returning to trading on the exchange by a new and experienced board. The
delays in producing the audited accounts were created by legacy management
clearly pursuing an agenda at odds with the successful reorganisation of and
improvement of the Company's prospects, whereby the goal appeared to be one of
maintaining control by a number of means, including, delaying the return of
over 50% those who should have held shares with the associated voting
capacity, whilst simultaneously maintaining directorships and control over
access to financial and other documentation, long after their resignation and
departure from the Company. This despite the clear requirement that at the
point of standing down as director/s of Pennpetro Energy Plc, they should have
immediately resigned directorships at all group companies and subsidiaries.
Something they deliberately did not do, in my personal opinion.
These difficulties were compounded by a sustained and coordinated campaign by
certain former directors and management and supported by associated
shareholders and other individuals who, in particular between the departure
date of the former CEO, right up until the General Meeting held on the
23/12/2025 at which time a significant improvement in this situation was
noticed, sought to undermine through false narratives the Company, at every
possible opportunity.
This delayed progress, bringing the Company to an operational and commercial
standstill, incurring the Company in otherwise unnecessary costs and putting
shareholder investments at significant risk of a total loss. Had the new
directors not taken so seriously the situations created by these actions and
persisted in their efforts to return the Company to good governance and worked
with outside backer, RMD Group, closely and openly, this report would not have
been published.
This board have constantly stated that it was critical that all shareholders
who have in the past been disenfranchised be made whole in their lent share
positions was a critical and necessary step to return the business to trading.
These individuals tried every possible approach to maximise disruption and to
thwart the Company's efforts to stabilise operations, return shares to
rightful owners from historical arrangements, perform this final outstanding
audit 2024/25 and ultimately, prepare the Company for its expected return to
trading. Whilst in a severely weakened form the final remnants of this
activity persists to this day, the board will fully end this in the near
future, the Company will succeed going forward.
Following the recent changes in leadership, the Board has constantly reviewed
and identified deficiencies in prior management oversight and governance,
beginning at the listing date of the business on the exchange and continuing
until the departure of Thomas Evans and associates in 2024. Ironically, they
sought to use projection, social media, to create a false narrative that what
they themselves had perpetrated somehow was created post-departure, by others.
In the most difficult stages of the turnaround of PPP, the Company was forced
to consider administration on more than one occasion, had no choice but to
impair certain US assets, and seek short-term funding arrangements to avoid
imminent delisting and liquidation.
The departure of the former CEO of Pennpetro Energy Plc, in 2024 should have
been the end of the concerns for the Company, yet if anything the subsequent
obstruction in accessing key financial and banking information orchestrated by
at least this individual, post-departure and likely involving certain
remaining personnel at the Company connected with the US subsidiaries,
materially delayed the Company's ability to restore compliance, file complete
audited accounts and secure funding to take the Company forward, whilst,
resulting in the continuation of the already lengthy, ongoing suspension of
trading.
The current Board, now in its third composition since this current suspension
began, has worked tirelessly with auditors, legal advisers and regulators to
rectify historic issues, strengthen internal controls, and rebuild corporate
governance frameworks. This process has been both time-consuming and costly,
particularly given the financial position at PPP that was inherited.
Nonetheless, the Company secured interim funding via, thus far, two
Convertible Loan Notes from Canadian RMD Group, enabling the settlement of
long-dated legacy creditor balances and providing working capital during this
transition; as well as providing legal support for the Company as the new
directors unravelled the complex circumstances being actively obfuscated by
legacy directors and other employees and online assets, to create a situation
where their past actions may not be discovered by the Company, as it would not
exist to do so.
What for most companies would have been business as usual, was for PPP a
significant milestone, achieved in November 2025 with the holding of the
Annual General Meeting and the publication of the 2023/24 accounts prior to
that.
A complete revamp of how the Company communicates with existing and potential
shareholders, stakeholders and partners has followed.
The audited 2024/25 accounts presented here bring the Company up to date with
its statutory reporting obligations in regard to overdue, audited, accounts
filings, and ending the cycle of missed account filings, impaired accounts and
audits caused by mismanagement in the past.
In conjunction with the release of the upcoming 2025/26 Interim Report, in
short order from today, the Company will have been brought fully into
compliance, upon publication and filing, removing the reasons for the
suspension of the Company from the exchange.
From an accounting perspective, this clears the path to apply for re-admission
to trading on the London Stock Exchange, which the Board intends to request
immediately. There can be no guarantee that this request will be met with a
positive response and immediate return to trading.
For the record, it is not the intention of this board to delay the return of
the Company to trading on the exchange until after the RTO announced in
Q4:2025, this is still an active situation, but will not be allowed, nor used,
to delay an orderly return to trading of the Company.
The Board has prioritised governance reform, implemented strengthened
compliance structures and appointed experienced professionals, including, most
recently, Mr. Sergiy Lesyk as an Independent Non-Executive Director for
Corporate Governance and Compliance, and Advisory with advanced discussions
regarding the appointment of a quality Sponsor in anticipation, following
re-admission of increased M & A activity at the Company in the coming
months.
We believe these steps demonstrate a decisive shift toward robust oversight
and disciplined management and that our shareholders are already feeling the
benefits of the same.
A key focus for the board is a swift resolution of all issues surrounding
historically lent shares. Back in 2023, Thomas Evans, the CEO responsible for
creating this unacceptable situation, promised, in writing to those who he had
convinced to lend shares, that the lenders of the same would have their shares
returned to them within 4-6 weeks. This situation was dramatically improved by
the current board when shareholders voted at the General Meeting (23/12/25) to
authorise the issuance of sufficient new shares to return to their rightful
owners those owed by the Company; a turnaround from 90% votes against (July
'25) to 53% in favour (December '25). This will be resolved by the current
board and all who should be able vote will have that opportunity, again.
Encouraged by the wind change seen at the December 2025 General Meeting, from
shareholders, the board is advancing the necessary processes to regularise
outstanding matters and ensure that shares are issued where clear legal
entitlement is demonstrated. Shareholders are being kept informed throughout
this process.
Transparency has been returned with clear visibility now attained. The
situation regarding the impaired US assets is such that the impairments cannot
be justifiably lifted by the board at this time, and it is not the view of the
directors that this is likely to happen in the near future, if at all.
This board prefers to focus its available funding, time and resources in the
best interest of all shareholders on strong, high value and properly
documented and managed assets.
While 2025 was an exceptionally challenging year, the foundations for recovery
have now been firmly established. This current Board believes that the Company
is well positioned to move forward with strengthened governance, renewed
strategic focus, real, tangible and well due diligence assets and
relationships, with the objective of returning to cash-generative operations.
Importantly, the Company has dramatically improved, and this board will
continue to provide clarity, transparency and communication to and with all
shareholders existing and new alike.
Richard Spinks
Executive Chairman
20 March 2026
Strategic Report
The Directors present their strategic report on the group for the year ended
31 March 2025.
Principal Activities
The principal activity and purpose of the Group is to focus on developing
strategic traditional and transition energy projects. The Board ensures that
the Company's strategy, operational activities, and governance framework are
aligned with this purpose and directed toward the creation and preservation of
long-term value for shareholders, while having regard to wider stakeholder
interests. Pennpetro Energy Plc acts as a holding company and provides
direction and other services to its subsidiaries.
Pennpetro USA Corp., holds 100% of the US operational subsidiary Nobel
Petroleum USA, Inc. ("Nobel USA"), an independent oil and gas production
company based in the City of Gonzales, Gonzales County, Texas, USA. Nobel
USA's core area of business is in the Austin Chalk and Eagleford Shale oil and
gas horizontal formations together with the lower oil and gas reservoir, the
Buda Formation in South Texas, United States.
Strategic Approach
The Board's strategic intent is to maximise shareholder value through the
continuing investment into developing strategic traditional and transition
energy projects.
Review of Business
The year under review represented a period of decisive restructuring and
renewal for Pennpetro Energy Plc. Following the suspension of trading in the
Company's shares, the Board prioritised restoring compliance, strengthening
governance and stabilising the Company's financial position. Short term
funding has been secured for the Company through a Convertible Loan Note,
enabling the settlement of outstanding creditors and supporting the Company
through its transition. With compliance restored, and engagement with advisers
and regulators ongoing, the Company is focused on progressing its application
for re-admission to trading and advancing plans to secure longer term
financing and operational development to deliver sustainable shareholder
value.
Financial Performance Review
The loss of the Group for the year ended 31 March 2025 amounts to $1,717,113
(year ended 31 March 2024: loss of $8,897,048).
The Board monitors the activities and overall performance of the Group on a
regular basis by reference to certain key milestones. The main Key Performance
Indicators ("KPIs") for the Group are as follows:
KPIs 2025 2024
$ $
(814,669) (763,259)
Net cash flows from operating activities
101,852 6,266
Cash and short-term investments
Participation in well drilling programmes are monitored on an individual
project basis in terms of revenue and cost per barrel of oil or Mcf (one
thousand cubic feet) of gas, together with the anticipated payback period on
each project.
Board diversity
Although the Board consisted of four male Directors, the Board supports
diversity in the boardroom. Aside from the Directors, there are no employees
in the Company. The Board will pursue an equal opportunity policy and seek to
employ those persons most suitable to delivering value for the Company.
Corporate responsibility
The Group operates a management system that embodies Environmental, Health,
Safety and Social Responsibility principles.
A number of objectives have been set by the Board to address these principles
and the Chief Executive Officer is responsible for demonstrating to the Board
that these principles are adhered to in its US Oil and Gas operation.
The policy of the Board of Pennpetro is to be fully accountable for the
necessary practices, procedures and means being in place so as to ensure that
each objective is demonstrated and that continuous improvement practices are
operating to ensure that the required practices, procedures and means are
being monitored, refined and optimised as necessary.
The objectives of the Environmental, Health, Safety and Social Responsibility
Policy include:
• The Group shall manage all operations in a manner that protects the
environment and the health and safety of employees, third parties and the
community.
• Risk identification, assessment and prioritisation can reduce risk and
mitigate hazards to employees, third parties, the community and the
environment. Management of risk is a continuous process.
• The use of internationally recognised standards, procedures and
specifications for design, construction and commissioning activities are
essential for achieving operational excellence.
• The minimisation of environmental risks and liabilities are integral
parts of the Group's operations.
• Third parties who provide materials and services or operate facilities
on the Group's behalf have an impact on Environmental, Health and Safety and
Social Responsibility excellence. It is essential that third-party services
are provided in a manner consistent with the Group's Policy.
• Preparedness and planning for emergencies are essential to ensuring
that all necessary actions are taken if an incident occurs, to protect
employees, third parties, the public, the environment, the assets and brand of
Pennpetro.
• Open and honest communication with the communities, authorities and
stakeholders with which the Group operates builds confidence and trust in the
integrity of Pennpetro.
The Group has determined that the greenhouse gas emissions from the operations
of the Company and its subsidiaries are sufficiently low that it does not have
responsibility to produce the disclosures required under the Companies Act
2006 (Strategic Report and Directors' Report) Regulations 2013. The reason for
this is that there was only limited activity from its US based operating
subsidiary during the current and prior period.
During the year to 31 March 2025, the Group closely monitored the limited
drilling, completion and production operations of its 5H well and there have
been no breaches of any applicable Acts recorded against the Group during the
reporting period.
Task Force on Climate-related Financial Disclosures (TCFD)
This section of the report sets out our climate-related disclosures in
relation to the four pillars of the TCFD framework; Governance, Strategy, Risk
Mitigation and Metrics & Targets.
Governance
The Board of Directors is responsible for oversight of climate related risks
and opportunities - refer to the principal risk exposure on climate related
matters on page 11. Climate related risks and opportunities are reviewed each
six months.
Strategy
The principal focus of environmental risk is around potential flaring gas
related issues but is highly cognisant as to the impact of climate change
issues prevailing within the petroleum industry.
The Company's operational activity is situated in Texas, where weather
patterns can influence activities. The county of Gonzales where activities are
located can be impacted by windstorms and especially hurricanes during certain
months of the year. This can lead to flooding of operational sites as has
happened to the Company in the past resulting in severe flooding to drilling
operations, resulting in additional expenditures for water recovery.
The Board has considered the resilience of the Company's strategy under
difference climate-related scenarios, including a scenario consistent with
limiting global warming to 2°C or below. Given the Company's current limited
operational footprint, direct transition risk exposure is presently modest.
However, the Board recognises that longer-term regulatory changes, carbon
pricing mechanisms, and shifts in energy demand could affect the sector.
Risk Management
The Board of Directors is responsible for identifying and assessing climate
related risks. Although there's currently no formal process for this, the
Board is considering developing one as the Group's activities are expected to
increase in the coming years.
As current onsite operations are limited at present, there have not been
significant physical environmental risks identified. The Board works with the
operator at its sites to ensure measures are in place to mitigate the impact
of climate-related risks such as flooding or storm damage.
The Directors also monitor the activities of the Texas petroleum authority -
the Texas Railroad Commission - regarding obligations and regulatory matters
with operational requirements on both a State and Federal perspective such
that the Company can be pro-active in complying with new requirements.
Metrics and Targets
The Group has limited operational and administrative activity at present and
hence the Directors are in the process of developing climate related metrics
and targets appropriate to the current extent of operations. The Group
performs regular checks of air quality operational equipment and analyses the
results against local township vectors.
The Directors have assessed there to be limited Scope 1, Scope 2, and Scope 3
emissions from the Group's administrative and operational activities; Scope 3
emissions relating to the supply chain have not yet been evaluated. The Group
did not generate any Scope 2 emissions during the year, as it did not consume
purchased energy in its operations.
Section 172 Statement
Section 172 of the Companies Act 2006 requires Directors to take into
consideration the interests of stakeholders and other matters in their
decision making. The Directors continue to have regard to the interests of the
Company's employees and other stakeholders, the impact of its activities on
the community, the environment and the Company's reputation for good business
conduct, when making decisions. In this context, acting in good faith and
fairly, the Directors consider what is most likely to promote the success of
the Company for its members in the long term. We explain in this annual
report, and referenced herein, how the Board engages with stakeholders.
Promotion of the Company for the benefit of the members as a whole
The Directors believe they have acted in the way most likely to promote the
success of the Company for the benefit of its members as a whole, as required
by s172 of the Companies Act 2006.
The requirements of s172 are for the Directors to:
· Consider the likely consequences of any decision in the long term,
· Act fairly between the members of the Company,
· Maintain a reputation for high standards of business conduct,
· Consider the interests of the Company's employees,
· Foster the Company's relationships with suppliers, customers and
others, and
· Consider the impact of the Company's operations on the community
and the environment.
The Company is quoted on the London Stock Exchange, and its members will be
fully aware, through detailed announcements, shareholder meetings and
financial communications, of the Board's broad and specific intentions and the
rationale for its decisions. The application of the s172 requirements are
demonstrated throughout this report and the financial statements as a whole,
with the following examples representing some of the key decisions made in
this reporting period and up to the date of approval of these financial
statements:
The likely consequences of any decision in the long term
The application of the Section 172 (1) requirements can be demonstrated in
relation to some of the key decisions made during the reporting period,
including:
· Renegotiation of strategic transactions and liabilities
· Focus on developing strategic energy projects
· Strengthening financial governance and management
The need to act fairly between members of the Company
After weighing up all relevant factors, the Directors consider which course of
action best enables delivery of our strategy over the long-term, taking into
consideration the impact on stakeholders. The Directors believe they have
acted in the way they consider most likely to promote the success of the
Company for the benefit of its members as a whole.
The Board is committed to maintaining good communication and having
constructive dialogue with its shareholders. The Company has close ongoing
relationships with key private shareholders, analysts, and brokers, providing
the opportunity to discuss issues and provide feedback at meetings with the
Company. All shareholders are encouraged to attend the Company's Annual
General Meeting and any general meetings held by the Company.
The desirability of the Company maintaining a reputation for high standards of
business conduct
The Board periodically reviews and approves clear frameworks to ensure that
its high standard are maintained both within the Group and the business
relationships we maintain. This, complemented by the various ways the Board is
informed and monitors compliance with relevant governance standards, help
ensure its decisions are taken and that the Group acts in ways that promote
high standards of business conduct.
The interests of the Company's employees
The Company had no employees during the year. Accordingly, the Directors did
not have any matters to consider in respect of the interests of employees when
performing their duties under section 172 (1) of the Companies Act 2006. The
Board keeps the Company's resourcing requirements under review and will give
due consideration to employee interest should staff be engaged in the future.
The fostering of relationships with suppliers, customers and others
Delivering on our strategy requires strong mutually beneficial relationships
with suppliers. The Group values all of its suppliers and aims to build strong
positive relationships through open communication and adherence to option
agreement terms. The Group is committed to being a responsible entity and
doing the right thing for its suppliers and business partners.
The impact of the Company's operations on the community and the environment
The Group is committed to the highest environmental, social and governance
standards both internally and within the Group and externally with its
partners. The Group is committed to being a responsible entity in terms of the
community and the wider environment. As an oil and gas production Company
operating in Texas, the Board takes seriously its ethical responsibilities to
the communities and environment in which it works. We abide by the local and
relevant UK laws on anti-corruption & bribery. The Company, recognizing
the global impact of environmental concerns, initiated due diligence to expand
its experiences and core competencies in the fossil energy sector to specific
green energy initiatives. These initiatives were secured with US intellectual
property filings and are being expanded internationally.
Conclusion
Having considered the matter set out above, the Directors are satisfied that
they have fulfilled their duty under section 172 (1) of the Companies Act 2006
to act in good faith in a manner most likely to promote the success of the
Company for the benefit of its members as a whole.
Principal Risks and Uncertainties
The Group's activities expose it to a variety of risks and uncertainties.
Market risk
The Group operates in an international market for hydrocarbons and is exposed
to risk arising from variations in the demand for and price of the
hydrocarbons. Oil and gas prices historically have fluctuated widely and are
affected by numerous factors over which the Group does not have any control,
including world production levels, international economic trends, currency
exchange fluctuations, inflation, speculative activity, consumption patterns
and global or regional political events. The Group will consider hedging
against the risks of fluctuating oil prices and currency exchange once
commercial production recommences.
Environmental risk
The Group's operations are subject to environmental regulation in all the
jurisdictions in which it operates. The Group is unable to predict the effect
of additional environmental laws and regulations which may be adopted in the
future, including whether any such laws or regulations would adversely affect
the Group's operations. There can be no assurance that such new environmental
legislation once implemented will not oblige the Group to incur significant
expenses and undertake significant investments. The Group identifies, assesses
and prioritises environmental risks on an ongoing basis, as part of its
management system.
Financing and liquidity risk
The Group is dependent on external funding to meet its working capital
requirements, settle creditor balances, and progress its strategic objectives.
At the reporting date, the Group has limited cash resources and remains
reliant on future equity fundraisings, debt restructuring, and asset
transactions. There is no certainty that additional funding will be available.
Failure to secure sufficient funding in a timely manner could result in an
inability to meet liabilities as they fall due, delays to operational plans,
loss of key assets, or further dilution for shareholders. The Board actively
monitors short-term cash flow forecasts, engages with existing creditors
regarding restructuring options, and evaluates potential funding alternatives.
If required, the Board will take appropriate mitigating actions, including
deferral of discretionary expenditure, renegotiation of payment terms, and
prioritisation of essential costs.
Oil and gas exploration and production risks
Whilst Nobel Petroleum USA, Inc., a Group subsidiary, took over the
operatorship during 2019 with the formal approval of the regulator, the Texas
Railroad Commission, and is the Working Interest owner, the previous operator
is still engaged under sub-contracting terms. This allows the Group to fully
integrate its operational teams in Houston.
Although it does not engage in exploration activities, per se, it might engage
in some limited exploration activity if it was in an area offsetting producing
assets and the Company decided such activity was worthwhile on a minimised
risk basis to enhance its lease profile. There are significant risks and
hazards inherent in the exploration and production of oil and gas, including
environmental hazards, industrial incidents, labour disputes, fire, drought,
flooding and other acts of God. The occurrence of any of these hazards can
delay or interrupt production and increase production costs. The Group
operates a management system that embodies Environmental, Health, Safety and
Social Responsibility principles in order to mitigate these hazards.
There is no guarantee that oil and/or gas will be discovered in any of the
Group's existing or future licenses/permitted acreage or that commercial
quantities of oil and/or gas can be recovered.
Licences and title
The leases in which the Group has or is seeking to have an interest will be
subject to termination after the primary term of such leases unless there is
current production of oil and/or gas in commercial quantities. If a lease is
not extended after the primary term, the Group may lose the opportunity to
develop and discover any hydrocarbon resources on that lease area. The Group
would then not be able to continue to access or benefit from these leased
assets, which could result in a loss of future economic benefits. The
Directors have concluded that the uncertainties and conditions giving rise to
the impairment recognised in the year ended 31 March 2024 remain unchanged.
This report was approved by the Board on 20 March 2026 and signed on its
behalf:
Richard Spinks
Executive Chairman
Directors' Report
The Directors present their Annual Report and the audited Financial Statements
for the year ended 31 March 2025.
The new UK Listing Rules, which came into force on 29 July 2024, replaced the
former standard and premium listing segments of the London Stock Exchange Main
Market with a single segment.
The Company's ordinary shares are listed on the London Stock Exchange in the
Equity Shares (Transition) category of the Official List, in accordance with
the new UK Listing Rules.
Organisation Review
The Board is responsible for providing strategic direction for the Group. This
incorporates setting out objectives, management policies and performance
criteria. The Board assesses its performance against these on a monthly basis.
Composition of the Board at 31 March 2025 was one Executive Director,
Executive Chairman and one Non-Executive Director. During the year, on 16
December 2024, Thomas Evans resigned from his position in the Company as Chief
Executive Officer. Post year end, on 16 October 2025, Mavriky Kalugin was
appointed as an Executive Director of the Company. On 29 October 2025, Richard
Spinks was appointed as an Executive Director of the Company. Composition of
the Board at the date of signing these financial statements was one Executive
Director, one Executive Chairman, and two Non-Executive Directors. The Board
believes that the present composition provides an appropriate mix to conduct
the Group's affairs.
The Board is responsible for monitoring risks and uncertainties faced by the
Group. These risks and uncertainties are detailed in the Strategic Report and
note 3 to the financial statements.
The corporate governance arrangement of the Group is disclosed in the
Corporate Governance Report.
Directors and Directors' interests
The Directors who held office during the year to the date of approval of these
financial statements, together with their beneficial interests in the ordinary
shares of the Company, are shown below.
31 March 2025 31 March 2024
Ordinary shares (number) Share options (number) Ordinary shares (number) Share options (number)
Olof Rapp 2,500,000 - 2,500,000 -
Thomas Evans (resigned 16 December 2024) (1) 500,000 - 500,000 -
Andy Clifford (resigned 25 March 2024) 1,000,000 - 1,000,000 -
Stephen Lunn (resigned 7 November 2025) 1,404 - 1,404 -
Robert Menzel (appointed 21 January 2025) - - - -
Mavriky Kalugin (appointed 16 October 2025) - - - -
Richard Spinks (appointed 29 October 2025) - - - -
(1) Thomas Martin Evans shares are held by FHF Securities (A'Asia)
Limited. FHF assisted the Company in contributing 4,500,000 shares to the
April 2023 placement. The 4,500,000 shares are under agreement with the
Company to be replaced through the mechanism of a new prospectus.
The Directors who held office at 31 March 2025 are summarised as follows:
Name of Director Position
Stephen Lunn Executive Chairman (resigned 7 November 2025)
Thomas Evans Executive Director (resigned 16 December 2024)
David Lenigas Executive Chairman (resigned 31 October 2024)
Robert Menzel Executive Director (appointed 21 January 2025)
Olof Rapp Senior Non-Executive Director
Directors' Remuneration
The Remuneration Committee assesses the appropriateness of the nature and
amount of emoluments of the Directors on a periodic basis by reference to
relevant employment market conditions with the overall objective of ensuring
maximum stakeholder benefit from the retention of a high-quality Board and
senior executive team.
The Directors' remuneration and policies for appointment or replacement of
directors are disclosed in the Directors' Remuneration Report.
Dividends
The Directors do not recommend the payment of a dividend (2024: $Nil).
Share capital and major shareholdings
The issued share capital of the Company as at 31 March 2025 comprised
112,299,089 Ordinary shares of 1p (2024: 100,299,089).
The Company has only one class of share capital formed of ordinary shares. All
shares forming part of the ordinary share capital have the same rights and
each carry one vote.
As at 27 February 2026 the Company had been notified of the following
interests in the Company's ordinary share capital:
Number of shares Percentage (%)
Hargreaves Lansdown (Nominees) Limited 9,899,411 8.82
Interactive Investor Services Nominees Limited 8,697,695 7. 75
Hargreaves Lansdown (Nominees) Limited 7,558,903 6.73
Hargreaves Lansdown (Nominees) Limited 7,317,390 6.52
Interactive Investor Services Nominees Limited 6,891,873 6.14
Pennpetro Energy Plc 6,000,000 5.34
Barclays Direct Investing Nominees Limited 5,434,715 4.84
HSDL Nominees Limited 4,980,290 4.43
Pershing Nominees Limited 4,639,527 4.13
HSDL Nominees Limited 3,875,662 3.45
Interactive Investor Services Nominees Limited 3,672,134 3.27
To the best of the Directors' knowledge, no shareholder directly or indirectly
exercises, or could exercise, control over the Company.
Going Concern
These financial statements have been prepared on the going concern basis, as
set out in Note 2.3.
Under the going concern assumption, an entity is ordinarily viewed as
continuing in business for the foreseeable future with neither the intention
nor the necessity of liquidation, ceasing trading or seeking protection from
creditors pursuant to laws or regulations.
The Group received minimum income from oil sales in the year to 31 March 2025,
even along with reducing expenditure for the financial year 2026, the
forecasts indicate that the Group and Parent Company, in order to meet their
operational objectives, and expected liabilities as they fall due, will be
required to raise additional funds within the next 12 months.
On 24 September 2025, the Company entered into a convertible loan note
agreement to provide the Company with £250,000 for working capital
requirements. Another convertible loan note agreement to provide the Company
with £250,000 for working capital requirements was entered into on 28 January
2026. Further details are set out in Note 29.
Whilst the Directors are confident that they will secure the necessary
funding, the current conditions do indicate the existence of a material
uncertainty that may cast significant doubt regarding the applicability of the
going concern assumption. The Directors are confident in the Company's ability
to raise additional funds as required, from existing and/or new investors,
within the next 12 months. Thus, they continue to adopt the going concern
basis of accounting preparing these financial statements.
Events after the Reporting Period
Corporate Undertaking
Petroquest Energy Limited issued a Corporate Undertaking on 25 August 2025,
within which the majority of the Petroquest loan note would be written off and
its security over assets held in Nobel Petroleum LLC be released. The balance
of the loan will be converted into a 50% stake in Pennpetro USA Corp. This
process has not yet been finalised as of the date of approval of these
financial statements.
Heads of Terms agreement Limnytskyi Oil Field
The Company announced that it signed a Heads of Terms Agreement to acquire a
new asset in the Lymnytskyi Oil Field in conjunction with RMD Holdings Ltd.
Details of proceeds raised after the reporting period are detailed in note 29.
Provision of Information to Auditor
So far as each of the Directors is aware at the time this report is approved:
• there is no relevant audit information of which the Company's auditor
is unaware; and
• the Directors have taken all steps that they ought to have taken to
make themselves aware of any relevant audit information and to establish that
the auditor is aware of that information.
Independent Auditor
The auditor, Crowe U.K. LLP will be proposed for reappointment in accordance
with section 485 of the Companies Act 2006. Crowe U.K. LLP has signified its
willingness to continue in office as auditor.
This report was approved by the board on 20 March 2026 and signed on its
behalf:
Richard Spinks
Executive Chairman
As at the date of this report, the following directors held office in the
Company:
Olof Nils Anders Rapp, Senior Non-Executive Director
Olof Rapp has vast international experience in the aerospace and automotive
sector and has held leading managerial positions with Rolls- Royce
International, Volvo Truck Corporation and VistaJet International in South
America, Middle East and Asia. His last position at Rolls Royce was as
Regional Director, Malaysia, with overall responsibility for Rolls-Royce Plc's
business in Malaysia and Brunei (Aviation, Marine, Nuclear and Oil & Gas).
Olof serves as a Board Director in Serunai Commerce Sdn Bhd. He has also
served as Director of European Chamber of Commerce Malaysia (EuroCham), and
Vice President of Swedish Chamber of Commerce Malaysia (SwedCham).
Richard George Spinks, Executive Chairman
Richard, a serial entrepreneur, has 40 years' experience working across
sectors including technology, fisheries, agriculture, forestry, and for the
past 13 years, renewable energy and decarbonisation fuel product development.
He has founded several disruptive companies in traditional industry sectors,
held executive and board positions in privately held, and in both US and UK
listed entities. Richard works internationally and has deep knowledge ad
strong connections, including in Ukraine where he has been active for over 20
years. Richard is multi-lingual and a strong communicator in multiple
languages.
Mavriky Anisimovich Kalugin, Chief Executive Officer
Mavriky Kalugin has over 28 years of experience in the oil and gas sector and
extensive global expertise in managing upstream and service companies,
greenfield and brownfield development, and production optimization. He
recently served as Executive Director and COO and Naftogaz Group in Ukraine.
Mavriky also works as Deputy Chair for Ukrnafta JSC, and Executive Vice
President for production and refining. Previously, Mavriky held senior
positions for Petrofac, Cairn India, TNK-BP, ConocoPhillips, and ARCO-Alaska.
He has a BSc Chemical Engineering degree from the University of Idaho and is a
US citizen, from Alaska.
Sergiy Lesyk, Non-Executive Director
Sergiy Lesyk has over 25 years of experience in the international financial
services sector, including wealth management, corporate finance, and
investment banking. He is currently Director of Research and Analytics at FTSE
Russell, a subsidiary of the London Stock Exchange Group. He previously served
as Head of Representative Office at UBS AG, representing the largest Wealth
Manager in Ukraine, and Head of Research at Millenium Capital. Sergiy is a
chartered certified accounting, having started his career at Price Waterhouse
in 1994, and graduating from the London School of Economics.
Statement of Directors' Responsibilities
The Directors are responsible for preparing the Annual Report and the
Financial Statements in accordance with applicable laws and regulations.
Under Company law the Directors must not approve the Financial Statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the Company and Group as at the end of the financial year and of
the profit or loss of the Group for that period. In preparing these Financial
Statements, the Directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgments and accounting estimates that are reasonable and
prudent;
· state whether the applicable UK adopted international accounting
standards have been followed subject to any material departures disclosed and
explained in the Financial Statements; and
· prepare the Financial Statements on a going concern basis unless it
is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and the
Group and enable them to ensure that the Financial Statements comply with the
Companies Act 2006. They are also responsible for safeguarding the assets of
the Company and Group and hence for taking reasonable steps for the prevention
and detection of fraud and other irregularities.
The Directors are also responsible for the maintenance and integrity of the
corporate and financial information included on the Company's website.
Legislation in the United Kingdom governing the preparation and dissemination
of the Financial Statements may differ from legislation in other
jurisdictions.
Directors' Responsibility pursuant to DTR4
Each of the Directors whose names and functions are listed on page 2 confirm
that, to the best of their knowledge and belief:
· The Financial Statements give a true and fair view of the assets,
liabilities, financial position and loss of the Group and Company; and
· The Annual Report and Financial Statements, including the Strategic
Report, includes a fair review of the development and performance of the
business and the position of the Group and Company, together with a
description of the principal risks and uncertainties that they face.
This statement was approved by the board on 20 March 2026 and signed on its
behalf:
Richard Spinks
Executive Chairman
20 March 2026
Corporate Governance Practices
Pennpetro Energy plc's ordinary shares are listed on the London Stock Exchange
in the Equity Shares (Transition) category and is thus not required to comply
with the requirements of the U.K. Corporate Governance Code ("the Code") as
issued by the Financial Reporting Council. The disclosures below are required
by the UKLA's Disclosure and Transparency Rule 7.
The Board is committed to ensuring the highest standards of corporate
governance, and voluntarily complies with, subject to the exceptions listed
below, the supporting principles and provisions set out in the Code.
The Company is small with a modest resource base. The Company has a clear
mandate to optimise the allocation of limited resources to support its
development plans. As such, the Company strives to maintain a balance between
conservation of limited resources and maintaining robust corporate governance
practices. As the Company evolves, the Board is committed to enhancing the
Company's corporate governance policies and practices deemed appropriate for
the size and maturity of the Company.
Principle 1: Board Leadership and Company Purpose
The Company's purpose is to focus on developing strategic traditional and
transition energy projects. The Board ensures that the Company's strategy,
operational objectives, and governance framework are aligned with this
purpose.
The Board determines the strategic objectives of the Company and oversees
their implementation with a focus on long-term value generation and
preservation.
The Board reviews opportunities and risks to the future success of the Company
through regular Board Meetings. The Board usually meets a minimum of four
times per year but may meet more frequently on an ad-hoc basis as and when
required. The Chairman is ultimately responsible for ensuring that each board
decision is taken having sufficient information on and with all due discussion
as is relevant to such discussion.
Culture underpins the delivery of strategy and long-term success. The Board
monitors and assesses culture through
· Review of operational performance and conduct;
· Oversight of regulatory compliance;
· Consideration of stakeholder feedback; and
· Review of adherence to expected standards of behaviour.
The Board takes corrective action where behaviours or practices are not
aligned with the Company's values or governance expectations.
During the year to 31 March 2025, no resolutions received 20% or more of votes
cast against the Board's recommendation.
The Board has procedures in place to identify and manage conflicts of
interest. The Board is aware of the other commitments and interests of its
Directors and changes to these commitments and interests are report to, and,
where appropriate, agreed with the rest of the Board. Declared interests are
recorded in the minutes.
Principle 2: Division of Responsibilities
The Group has a schedule of matters reserved for its own decision and two
committees comprised of Non-Executive Directors: The Audit Committee and the
Remuneration Committee, each with delegated duties and responsibilities set
out in respective Terms of Reference.
The division of responsibilities between the Chairman and the Chief Executive
Officer is clearly defined, however, they work closely together to ensure
effective decision making and successful delivery of the Group's strategy.
During the year, the Board held 3 meetings. Attendance was as follows:
Director Meetings Attended Meetings Eligible
David Lenigas 1 1
Thomas Evans 2 2
Olof Rapp 3 3
Stephen Lunn 3 3
Robert Menzel 0 0
Principle 3: Composition, Succession and Evaluation
During the year, the Board comprised of one Executive Director, one Executive
Chairman and one Non-Executive Director. All Directors are subject to annual
re-election at the following Annual General Meeting.
The Board has established an Audit Committee and a Remuneration Committee,
however, each currently comprises one member. The Code recommends that a small
company Audit Committee and Remuneration Committee should have at least two
members. Given the current size and scale of the Company's operations, the
Board considers the present structure appropriate. Committee composition will
be reviewed as the Company develops.
The Board has significant experience in the oil and gas sector and from that,
a strong network of individuals working in the sector. The Board leads the
process for Board appointments and is responsible for review of the Board
size, structure, and composition (both executive and non-executive) including
any potential new applicants to ensure the Board contains the right balance of
skills, knowledge, and experience to manage and grow the business.
The Board does not carry out a formal annual evaluation of its performance,
its committees, the Chairman, and individual Directors, which is contrary to
the recommendation of Code Provision 21. However, the Chairman continuously
considers the performance of the Board, its committees and of individual
directors and provides feedback when appropriate.
The Board considers the time and cost involved in carrying out a formal
process, especially one that is externally facilitated, cannot be justified
for the Company at this stage in its development. Nonetheless, the Board
acknowledges the merits in carrying out formal board evaluations and will
monitor the continuing suitability of this stance as the Company grows in
size.
Principle 4: Audit, Risk and Internal Control
The Audit Committee currently comprises one member, Olof Rapp. The Code
recommends that a small company Audit Committee should have at least two
members. Given the current size and scale of the Company's operations, the
Board considers the present structure appropriate. Committee composition will
be reviewed as the Company develops.
The Board considers both principal and emerging risks as part of its ongoing
risk review process. Emerging risks are identified through:
· Regular Board discussions;
· Engagement with advisers;
· Monitoring regulatory and industry developments; and
· Assessment of operational and environmental developments.
Where emerging risks are identified, the Board evaluates their potential
impact and likelihood and implements mitigating actions, which may include
operational controls, insurance, contractual protections or strategic
adjustments.
The Board is responsible for the Company's risk management and internal
control systems. The Board monitors these systems on an ongoing basis and has
conducted an internal review post year end.
Principle 5: Remuneration
During the year, the Remuneration Committee:
· Reviewed directors' remuneration arrangements;
· Assessed the appropriateness of directors' fees in light of the
Company's size, performance, and financial position; and
· Considered market comparators where appropriate.
The Committee ensures that remuneration arrangements support the long-term
success of the Company and do not encourage excessive risk-taking.
As the Company is in a transition stage, the use of traditional performance
standards, such. as corporate profitability, is not considered to be
appropriate in the evaluation of corporate or directors' performance.
Discretionary bonuses may be paid to aid staff retention and reward
performance. The Board considers that the remuneration policy has operated as
intended in terms of Company performance and quantum.
Provisions not applied
The following describes the ways in which the Company does not comply with the
detailed provisions of the Code and the Board's rationale thereon:
• given the size of the Board and the Company's current limited
operational status, certain provisions of the Corporate Governance Code (in
particular the provisions relating to the composition of the Board and the
division of responsibilities between the Chairman and chief executive and
executive compensation), are not being complied with by the Company as the
Board does not consider these provisions to be appropriate for the Company;
• the Board has considered the requirement to prepare a viability
statement. As the Group is in the early stages of establishing operations and
has not yet achieved a stable revenue base, the Board does not consider it
appropriate to provide a viability statement this year. This position will be
reviewed annually, and a viability statement will be prepared once operations
and revenue generation have reached a stable and sustainable level. Further
details regarding the Group's assessment of going concern are provided in note
2 of these financial statements;
• the Board as a whole reviews audit and risk matters in accordance with
adopted terms of reference which govern the matters to be reviewed and the
frequency with which such matters are considered. The Board is responsible for
the appointment of auditors and approval of their remuneration, monitors and
reviews the integrity of the Company's financial statements, and takes
responsibility for any formal announcements on the Company's financial
performance;
• the Board as a whole will be responsible for the appointment of
executive and non-executive Directors. The Company does not currently believe
it is necessary to have a separate nominations committee at this time. The
requirement for a nominations committee will be considered on an ongoing
basis;
• the Board believes in the benefits of diversity, including the need for
diversity in order to effectively represent shareholders' interests. This
diversity is not restricted to gender but also includes geographic location,
nationality, skills, age, educational and professional background. The board's
policy remains that selection should be based on the best person for the role;
• the Board as a whole will consider the Board's size, structure and
composition and the scale and structure of the Directors' fees, taking into
account the interests of Shareholders and the performance of the Company;
• the Board does not comply with the provision of the Corporate Governance
Code that at least half of the Board, excluding the Chairman, should comprise
non-executive directors determined by the Board to be sufficiently
independent;
• the Company has in place procedures ensuring compliance with the new
Market Abuse Regulation and the Board will be responsible for taking all
proper and reasonable steps to ensure compliance with the Market Abuse
Regulation by the Directors; and
• the Company will not seek Shareholder approval at a general meeting in
respect of any further acquisitions it may make, unless it is required to do
so for the purposes of facilitating the financing arrangements or for other
legal or regulatory reasons.
• the Board does not comply with the provision that the Audit Committee
and Remuneration Committee should comprise of at least two members.
• the Board did not carry out a review of the effectiveness of the
Company's risk management and controls, however, this has been carried out
after the year end.
The Board of Directors
As at 31 March 2025, the Board of Directors comprised three members: one
Executive Director, one Executive Chairman and one Non-Executive Director. The
Executive Chairman and Executive Director have a wealth of experience
analytically covering the oil and gas industry. Similarly, the Non-Executive
Director has extensive corporate and financial experience. Since the year end,
the Executive Chairman resigned and was replaced with a new Executive
Chairman. A new Chief Executive Officer was appointed since the year end, both
of whom have significant experience covering the oil and gas industry.
The Company has a policy of appraising Board performance annually and had
adopted an internal policy of regular face to face meetings in which all Board
members discuss any issues as and when they arise in relation to the Board or
any individual member's performance.
Board Meetings
The Board ordinarily meets on a monthly basis and as and when further
required, providing effective leadership and overall management of the Group's
affairs by reference to those matters reserved for its decision. This includes
the approval of the budget and business plan, major capital expenditure,
acquisitions and disposals, risk management policies and the approval of the
financial statements. Formal agendas, papers and reports are sent to the
Directors, in a timely manner, prior to the Board meetings. Board meetings
were mostly held telephonically.
Internal Controls
The Board recognises the importance of both financial and non-financial
controls and has reviewed the Group's control environment and any related
shortfalls during the year. Since the Group was established, the Directors are
satisfied that, given the current size and activities of the Group, adequate
internal controls have been implemented. Whilst they are aware that no system
can provide absolute assurance against material misstatement or loss, in light
of the current activity and proposed future developments of the Group,
continuing reviews of internal controls will be undertaken to ensure that they
are adequate and effective.
Relations with Shareholders
The Board is committed to providing effective communication with the
shareholders of the Company. Significant developments are disseminated through
stock exchange announcements and regular updates on the Company website. The
Board views the Annual General Meeting as a forum for communication between
the Group and its shareholders and encourages their participation in its
agenda.
Richard Spinks
Executive Chairman
20 March 2026
Directors' Remuneration Report
The Company's Remuneration Committee comprises one Non-Executive Director,
Olof Rapp.
The Company's Remuneration Committee operates within the terms of reference
approved by the Board. In the year to 31 March 2025, the Remuneration
Committee documented one review.
The items included in this report are unaudited unless otherwise stated.
Committee's main responsibilities
• The Remuneration Committee considers the remuneration policy,
employment terms and remuneration of the Executive Director;
• The Remuneration Committee's role is advisory in nature and it
makes recommendations to the Board on the overall remuneration package for the
Executive Director in order to attract, retain and motivate high quality
executives capable of achieving the Company's objectives;
• The Remuneration Committee also reviews proposals for any share
option plans and other incentive plans, makes recommendations for the grant of
awards under such plans as well as approving the terms of any
performance-related pay schemes;
• The Board's policy is to remunerate the Company's executives
fairly and in such a manner as to facilitate the recruitment, retention and
motivation of suitably qualified personnel; and
• The Remuneration Committee, when considering the remuneration
packages of the Company's executives, will review the policies of comparable
companies in the industry.
Directors' remuneration (audited)
Fees and benefits of $421,367 were payable to Directors who held office during
the year ended 31 March 2025 (2024: $226,222).
Other receipts received 2025
Salary Valuation of Taxable benefits $ Pension benefits Total
$ options $ $ $
$
Olof Rapp 57,402 - - - - 57,402
David Lenigas 84,263 - - - - 84,263
Thomas Evans 123,840 - - - 3,428 127,268
Stephen Lunn 89,292 - - - - 89,292
Robert Menzel 63,142 - - - - 63,142
417,939 - - - 3,428 421,367
Other receipts received 2024
Salary Valuation of Taxable benefits $ Pension benefits Total
$ options $ $ $
$
Olof Rapp 37,704 - - - - 37,704
David Lenigas 150,814 - - - - 150,814
Thomas Evans 37,704 - - - - 37,704
226,222 - - - - 226,222
The Directors' remuneration is disclosed in full in the above table and is not
linked to performance. All current Directors' service contracts are kept
available for inspection at the Company's registered office.
All shares and interests held by the Directors are disclosed in the Directors'
report.
Total pension entitlements (audited)
The Company currently does not have any pension plans for any of the Directors
and does not pay pension amounts in relation to their remuneration.
The Company has not paid out any excess retirement benefits to any Directors
or past Directors.
Payments to past directors (audited)
The Company has not paid any compensation to past Directors.
Payments for loss of office (audited)
No payments were made for loss of office during the year.
Directors' interests in share warrants (audited)
None of the Directors had interests in share warrants.
Consideration of shareholder views
The Remuneration Committee considers shareholder feedback received and
guidance from shareholder bodies. This feedback, plus any additional feedback
received from time to time, is considered as part of the Company's periodic
reviews of its policy on remuneration.
Statement of policy on Directors' remuneration
The Company's policy is to maintain levels of remuneration so as to attract,
motivate, and retain Directors and Senior Executives of the highest calibre
who can contribute their experience to deliver industry leading performance
with the Company's operations. Currently Director's remuneration is not
subject to specific performance targets.
In the future, the Company may introduce a remuneration policy that aligns
Executive compensation with corporate and individual performance. This policy
aims to align the interests of Directors with those of shareholders and
incentivize them to excel. The Remuneration Committee reviews the remuneration
policy and employment terms for Directors, making recommendations to the Board
of Directors for the overall remuneration packages. No Director participates
in any decision directly affecting their own remuneration.
Policy for new appointments
Base salary levels will take into account market data for the relevant role,
internal relativities, the individual's experience and their current base
salary. Where an individual is recruited at below market norms, they may be
re-aligned over time (e.g. two to three years), subject to performance in the
role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Committee may agree that the
Company will meet certain relocation and/or incidental expenses as
appropriate.
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee,
taking into account contractual obligations.
Other matters
The Company does not currently have any annual or long-term incentive schemes
in place for any of the Directors and as such there are no disclosures in this
respect.
Olof Rapp
Non-Executive Director
20 March 2026
Audit Committee Report
The Audit Committee comprised two Directors, Olof Rapp (Chair of the Audit
Committee) and Thomas Evans, until Thomas's retirement from the Company on 16
December 2024. The Audit Committee oversees the Company's financial reporting
and internal controls and provides a formal reporting link with the external
auditors. The ultimate responsibility for reviewing and approving the annual
report and accounts and the half-yearly report remains with the Board.
Main Responsibilities
The Audit Committee acts as a preparatory body for discharging the Board's
responsibilities in a wide range of financial matters, with terms of reference
including:
• monitoring the integrity of the financial statements and formal
announcements relating to the Company's financial performance;
• reviewing significant financial reporting issues, accounting
policies and disclosures in financial reports, which are considered to be in
accordance with the key audit matters identified by the external auditors;
• overseeing that an effective system of internal control and risk
management systems are maintained;
• ensuring that an effective whistle-blowing, anti-fraud and bribery
procedures are in place;
• overseeing the Board's relationship with the external auditor and,
where appropriate, the selection of new external auditors;
• approving non-audit services provided by accounting firms; and
• ensuring compliance with legal requirements, accounting standards
and the Listing Rules and the Disclosure and Transparency Rules.
Governance
The Code requires that at least one member of the Audit Committee has recent
and relevant financial experience. Both directors have served in financial
executive and managing director roles. As a result, the Board is satisfied
that the Audit Committee has recent and relevant financial experience.
Members of the Audit Committee are appointed by the Board and whilst
shareholders, the Company believes they are considered to be independent in
both character and judgement.
The Company's external auditor, Crowe U.K. LLP, did not provide any non-audit
services in the period.
The Audit Committee believes that the Company does not require an internal
audit function due to the current size of the organisation and its operations.
Meetings
In the year to 31 March 2025 the two members of the Audit Committee have met
once. The key work to be undertaken by the Audit Committee is as follows;
• interview of external auditors and recommendation to the Board;
• review of audit planning and update on relevant accounting
developments;
• consideration and approval of the risk management framework,
appropriateness of key performance indicators;
• consideration and review of full-year results;
• review of the effectiveness of the Audit Committee; and
• review of internal controls.
The Code states that the Audit Committee should have primary responsibility
for making a recommendation on the appointment, reappointment or removal of
the external auditor.
External auditor
The Audit Committee appointed Crowe U.K. LLP as auditors to the Company,
commencing with the first audit for the year ended 31 December 2018. The
external auditor has unrestricted access to the Audit Committee Chairman. The
Committee is satisfied that Crowe U.K. LLP has adequate policies and
safeguards in place to ensure that auditor objectivity and independence are
maintained.
The external auditors report to the Audit Committee annually on their
independence from the Company. In accordance with professional standards, the
partner responsible for the audit is changed every five years. The current
auditor, Crowe U.K. LLP were first appointed by the Company in 2019 following
a tender process and therefore a new partner was rotated onto the engagement
for the March 2024 audit. Having assessed the performance objectivity and
independence of the auditors, the Committee will be recommending the
reappointment of Crowe U.K. LLP as auditors to the Company at the 2025 Annual
General Meeting.
Olof Rapp
Non-Executive Director
20 March 2026
Independent auditor's report to the members of Pennpetro Energy Plc
Disclaimer of opinion
We were engaged to audit the financial statements of Pennpetro Energy plc (the
"Parent Company") and its subsidiaries (the "Group") for the year ended 31
March 2025 which comprise the Consolidated Statement of Comprehensive Income,
the Consolidated and Parent Company Statements of Financial Position, the
Consolidated and Parent Company Statements of Changes in Equity, the
Consolidated and Parent Company Statements and of Cash Flows and notes to the
financial statements, including a summary of material accounting policies.
The financial reporting framework that has been applied in the preparation of
the financial statements is applicable law and UK-adopted international
accounting standards.
We do not express an opinion on the accompanying Group and Parent Company
financial statements. Because of the significance of the matters described in
the basis for disclaimer of opinion section of our report, we have not been
able to obtain sufficient appropriate audit evidence to provide a basis for an
audit opinion on these financial statements.
Basis for disclaimer of opinion
The disclaimer of opinion arises as a result of the following matters:
1. Severe limitations over the evidence available for the audit of the Group
entities, including for the main operating subsidiaries which are incorporated
in the United States of America. Due to the death of the individual acting as
Company Secretary and financial controller in April 2024 and changes to the
board there was a significant loss of financial information during the year
ended 31 December 2024 which the company has been unable to reinstate.
We were unable to obtain sufficient appropriate audit evidence over the
following balances and transactions in the prior year, and as such do not have
appropriate evidence over the opening balances to which these relate:
· A share lending transaction involving some previous directors.
The value of this transaction was $425,617.
· The other gains/losses of $423,563 and legal expenditure of
$299,436 included in the financial statements. These amounts represent
expenditure for which there is no supporting information.
· Receipt of part of the proceeds, £180,000, from the issue of 5.8
million shares in the Group.
· Certain decommissioning liabilities, currently included in the
financial statements at $50,000.
2. In addition to the matters in connection with the opening balances, we have
not been able to perform a review of management override of controls through
the conduct of journal entry testing for some subsidiaries in the Group. This
has occurred due to the absence of complete general ledgers which also agree
to the individual trial balances as of the year end. We were not provided
general ledgers for the subsidiary companies Pennpetro USA Corp, Nobel
Petroleum LLC, Pennpetro Greentec Limited, Pennpetro Greentec UK Limited and
Pennpetro Green Energy Limited. We are therefore unable to determine the
completeness of the trial balance for these entities for purposes of inclusion
in the consolidation.
3. We were unable to obtain sufficient, appropriate audit evidence over the
following transactions and balances in the current financial year relating to
the subsidiary company Nobel Petroleum USA Inc:
· Cash at bank of $66,382
· Supporting documentation for the sample of journal transactions
selected
As a result of these matters which together we consider material and
pervasive, we were unable to determine whether any adjustments might have been
found in the financial statement line items and the elements making up the
Consolidated Statement of Comprehensive Income, the Consolidated and Parent
Company Statements of Financial Position, the Consolidated Statement of
Changes in Equity and the Consolidated and Parent Company Statements of Cash
Flows.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept of materiality. An
item is considered material if it could reasonably be expected to change the
economic decisions of a user of the financial statements. We used the concept
of materiality to both focus our testing and to evaluate the impact of
misstatements identified.
Based on our professional judgement, we determined overall materiality for the
financial statements as a whole to be $50,000 which represents 3% of the loss
before taxation (2024: $250,000, based on 3% of loss before tax). Materiality
for the parent company financial statements as a whole was set at $26,000
which represents 3% of the loss before taxation (2024: $80,000, based on 3% of
loss before tax).
We use a different level of materiality ('performance materiality') to
determine the extent of our testing for the audit of the financial
statements. Performance materiality is set based on the audit materiality as
adjusted for the judgements made as to the entity risk and our evaluation of
the specific risk of each audit area having regard to the internal control
environment. Performance materiality was set at 60% of materiality for the
financial statements as a whole, which equates to $30,000 (2024 $150,000) and
$15,600 (2024: $48,000) for the Parent Company.
We agreed with the Audit Committee to report to it all identified errors in
excess of $2,500 (2024: $12,500). Errors below that threshold would also be
reported to it if, in our opinion as auditor, disclosure was required on
qualitative grounds.
Overview of the scope of our audit
The Company and Group finance function is based in the United Kingdom, and
audit procedures were carried out thereon from our office, with discussions
with management as required and information being requested from the US where
appropriate. All procedures were performed by the group audit team.
We assessed the Parent Company to be a significant component, on which we
carried out a full scope audit. The subsidiary entities were assessed to
comprise a second component, on which we carried out specific audit
procedures.
Given the limited activity during the year, we did not consider that a visit
to the Group's US locations was required.
Key Audit Matters
In accordance with ISA (UK) 705, we have described below the matters that we
have determined to be key audit matters. Our responsibility is to address
these matters in the context of our audit of the financial statements as a
whole and to form our opinion thereon. However, because we do not express an
opinion on the financial statements due to the matters described in the Basis
for Disclaimer of Opinion section, we do not provide an opinion or any level
of assurance on the financial statements as a whole, including the matters
described below.
Key audit matter How the scope of our audit addressed the key audit matter
Adequacy of accounting records
• We requested from management supporting detail to the accounting
records, including breakdowns, contracts, invoices and other documentation.
The Group has experienced significant challenges in compiling the accounting
records for the year ended 31 March 2024, partly as a result of the individual • We held discussions with the Directors and the Group's outsourced
acting as Company Secretary and financial controller passing away in April accountants, to obtain an understanding of accounting transactions, and the
2024. As a result, certain opening balances include amounts without adequate extent of audit evidence available.
supporting information.
Opinions on other matters prescribed by the Companies Act 2006
Due to the significance of the matters described in the basis for disclaimer
of opinion section of our report, we have been unable to form an opinion,
whether based on the work undertaken in the course of the audit:
• the information given in the strategic report and directors' report for
the financial year for which the financial statements are prepared is
consistent with the financial statements; and
• the strategic report and the directors' report have been prepared in
accordance with applicable legal requirements.
Matters on which we are required to report by exception
Notwithstanding our disclaimer of an opinion on the financial statements, in
the light of the knowledge and understanding of the Group and the Parent
Company and their environment obtained in the course of the audit performed
subject to the pervasive limitation described above, we have not identified
material misstatements in the strategic report or the directors' report.
Arising from the limitation of our work referred to above:
• we have not obtained all the information and explanations that we
considered necessary for the purpose of our audit; and
• we were unable to determine whether adequate accounting records have been
kept or whether the financial statements are in agreement with the accounting
records and returns.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
• returns adequate for our audit have not been received from branches not
visited by us; or
• certain disclosures of directors' remuneration specified by law are not
made;
Responsibilities of directors
As explained more fully in the Directors' responsibilities statement, the
Directors are responsible for the preparation of the financial statements and
for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of
financial statements that are free from material misstatement, whether due to
fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group's and Parent Company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or company or to cease operations, or have no realistic
alternative but to do so.
Auditors responsibilities for the audit of the financial statements
Our responsibility is to conduct an audit on the Group and Parent Company
financial statements in accordance with applicable law and International
Standards on Auditing (UK) and to issue an auditor's report. However, because
of the matters described in the basis for disclaimer of opinion section of our
report, we were not able to obtain sufficient appropriate audit evidence to
provide a basis for an audit opinion on these financial statements. We are
independent of the Group and Parent Company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the
UK, including the FRCs Ethical Standards applicable to public interest
entities, and we have fulfilled our other responsibilities in accordance with
these requirements.
Explanation as to what extent the audit was considered capable of detecting
irregularities, including fraud
We design procedures in line with our responsibilities, set out above, to
detect material misstatements in respect of irregularities, including fraud.
Owing to the inherent limitations of an audit, there is an unavoidable risk
that material misstatements in the financial statements may not be detected,
even though the audit is properly planned and performed in accordance with the
ISAs (UK). We are unable to determine whether the audit was capable in its
ability to detect irregularities, including fraud, on the basis that we were
unable to obtain sufficient appropriate audit evidence due to the matters
described in the basis for disclaimer of opinion section of our report.
Other matters which we are required to address
We were first appointed by the Board on 25 March 2019 to audit the financial
statements for the period ending 31 December 2018. Our total uninterrupted
period of engagement is seven years, covering the periods ending 31 December
2018 to 31 March 2025.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the Group or the Parent Company and we remain independent of the
Group and the Parent Company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of our report
This report is made solely to the Parent Company's members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the Parent Company's members
those matters we are required to state to them in an auditor's report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the Parent Company and the Parent
Company's members as a body, for our audit work, for this report, or for the
opinions we have formed.
John Glasby
Senior Statutory Auditor
For and on behalf of Crowe U.K. LLP
Statutory Auditor
London
Date:
Year ended 31 March 2025 Year ended 31 March 2024
Note
$ $
Continuing Operations
Revenue 5 30,067 493,005
Cost of Sales - (5,608)
Gross Profit 30,067 487,397
Administrative expenses 7 (1,285,069) (1,592,150)
Other losses 7 - (423,563)
Impairments 14 (104,142) (7,108,447)
Operating Loss (1,359,144) (8,636,763)
Finance costs 10 (357,969) (260,285)
Loss before Tax (1,717,113) (8,897,048)
Income tax 11 - -
Loss for the year attributable to owners of the parent (1,717,113) (8,897,048)
Other Comprehensive Income:
Items that may be reclassified subsequently to profit or loss
Currency translation differences (107,889) (472,718)
Other Comprehensive Loss for the Year (107,889) (472,718)
Total Comprehensive Loss for the Year attributable to the owners of the parent (1,825,002) (9,369,766)
Loss per share attributable to the owners of the parent during the year
Basic (cents per share) 12 (1.59) (9.02)
Diluted (cents per share) (1.59) (9.02)
The notes on pages 41 to 65 form part of these financial statements.
Note 31 March 31 March
2025 2024
$ $
ASSETS
Current Assets
Trade and other receivables 16 - 307,881
Cash and cash equivalents 18 101,852 6,266
Total Current Assets 101,852 314,147
TOTAL ASSETS 101,852 314,147
EQUITY AND LIABILITIES
Equity Attributable to Owners of Parent
Share capital 19 1,431,895 1,277,639
Share premium 19 9,255,778 8,443,248
Convertible reserve 4,172,846 4,172,846
Reorganisation reserve (6,578,229) (6,578,229)
Foreign exchange reserve (354,497) (246,608)
Retained losses (14,946,927) (13,229,814)
Total Equity (7,019,134) (6,160,918)
Current Liabilities
Trade and other payables 21 2,403,955 2,129,116
Borrowings 20 4,717,031 4,345,949
Total Current Liabilities 7,120,986 6,475,065
TOTAL EQUITY AND LIABILITIES 101,852 314,147
These financial statements were approved by the Board of Directors on 20 March
2026 and signed on its behalf by:
Richard Spinks
Chairman
Company registration number: 10166359
The notes on pages 41 to 65 form part of these financial statements.
Note 31 March 31 March
2025 2024
$ $
ASSETS
Current Assets
Trade and other receivables 16 98,325 14,240
Cash and cash equivalents 18 35,122 41
Total Current Assets 133,447 14,281
TOTAL ASSETS 133,447 14,281
EQUITY AND LIABILITIES
Equity Attributable to Shareholders
Share capital 19 1,431,895 1,277,639
Share premium 19 9,255,778 8,443,248
Convertible reserve 4,172,846 4,172,846
Foreign exchange reserve (268,138) (214,671)
Retained losses (16,438,239) (15,459,199)
Total Equity (1,845,858) (1,780,137)
Current Liabilities
Trade and other payables 21 1,979,305 1,794,418
Total Current Liabilities 1,979,305 1,794,418
TOTAL EQUITY AND LIABILITIES 133,447 14,281
The Company has elected to take the exemption under Section 408 of the
Companies Act 2006 from presenting the parent company Statement of
Comprehensive Income. The loss for the parent company for the period was
$979,040 (2024: $12,052,736).
These financial statements were approved by the Board of Directors on 20 March
2026 and were signed on its behalf by:
Richard Spinks
Executive Chairman
Company registration number: 10166359
The notes on pages 41 to 65 form part of these financial statements.
Share Capital Share Premium Convertible Reserve Reorganization Reserve Foreign Retained Losses Total Equity
Group Exchange Reserve
$ $ $ $ $ $ $
Balance at 31 March 2023 1,079,101 6,610,719 4,172,846 (6,578,229) 226,110 (4,332,766) 1,177,781
Loss for the period - - - - - (8,897,048) (8,897,048)
Foreign currency translation differences - - - - (472,718) - (472,718)
Total comprehensive income for the period - - - - (472,718) (8,897,048) (9,369,766)
Share issue (note 19) 198,538 2,053,847 - - - - 2,252,385
Cost of share issue (note 19) - (221,318) - - - - (221,318)
Balance at 31 March 2024 1,277,639 8,443,248 4,172,846 (6,578,229) (246,608) (13,229,814) (6,160,918)
Loss for the period - - - - - (1,717,113) (1,717,113)
Foreign currency translation differences - - - - (107,889) - (107,889)
Total comprehensive income for the period - - - - (107,889) (1,717,113) (1,825,002)
Share issue (note 19) 154,256 849,224 - - - - 1,003,480
Cost of share issue (note 19) - (36,694) - - - - (36,694)
Balance at 31 March 2025 1,431,895 9,255,778 4,172,846 (6,578,229) (354,497) (14,946,927) (7,019,134)
The notes on pages 41 to 65 form part of these financial statements.
Share Capital Share Premium Convertible Reserve Foreign Exchange Retained Losses Total Equity
Company Reserve
$ $ $ $ $ $
Balance at 31 March 2023 1,079,101 6,610,719 4,172,846 (334,293) (3,406,463) 8,121,910
Loss for the period - - - - (12,052,736) (12,052,736)
Foreign currency translation differences - - - 119,622 - 119,622
Total comprehensive income for the period - - - 119,622 (12,052,736) (11,933,114)
Share issue (note 19) 198,538 2,053,847 - - - 2,252,385
Cost of share issue (note 19) - (221,318) - - - (221,318)
Balance at 31 March 2024 1,277,639 8,443,248 4,172,846 (214,671) (15,459,199) (1,780,137)
Loss for the period - - - - (979,040) (979,040)
Foreign currency translation differences - - - (53,467) - (53,467)
Total comprehensive income for the period - - - (53,467) (979,040) (1,032,507)
Share issue (note 19) 154,256 849,224 - - - 1,003,480
Cost of share issue (note 19) - (36,694) - - - (36,694)
Balance at 31 March 2025 1,431,895 9,255,778 4,172,846 (268,138) (16,438,239) (1,845,858)
The notes on pages 41 to 65 form part of these financial statements.
Year ended 31 March 2025 Year ended 31 March 2024
$ $
Cash Flows from Operating Activities
Loss before tax (1,717,113) (8,897,048)
Foreign exchange (107,504) (471,786)
Finance costs 357,969 260,285
Impairment charge 104,142 7,108,447
(1,362,506) (2,000,102)
Changes to working capital
Decrease in trade and other receivables 307,881 7,418
Increase in trade and other payables 239,956 1,229,425
547,837 1,236,843
Net Cash used in Operating Activities (814,669) (763,259)
Cash Flows from Investing Activities
Purchases of property, plant and equipment (104,142) (1,337,392)
Decrease / (increase) of short-term investments - 31,525
Net Cash generated from / (used in) Investing Activities (104,142) (1,305,867)
Cash Flows from Financing Activities
Proceeds from issues of ordinary shares 1,003,480 2,252,385
Transaction costs on issue of ordinary shares (36,694) (221,318)
Proceeds from borrowings 50,000 -
Repayment of borrowings (2,004) -
Net Cash generated from Financing Activities 1,014,782 2,031,067
95,971 (38,059)
Net Increase / (Decrease) in Cash and Cash Equivalents
Cash and cash equivalents at the beginning of the period 6,266 46,792
Effect of exchange rates on cash balance (385) (2,467)
Cash and Cash Equivalents at the End of the Period 101,852 6,266
The notes on pages 41 to 65 form part of these financial statements.
Period end 31 March 2025 Period end 31 March 2024
$ $
Cash Flows from Operating Activities
Loss before tax (979,040) (12,052,736)
Finance costs 38,343 -
Impairment of investment - 6,535,308
Impairment of intercompany loan balance - 4,408,041
Impairment of short-term investments - 50,699
Unrealised foreign exchange (53,467) 25,063
(994,164) (1,033,625)
Changes to working capital
Increase in trade and other receivables (84,084) (1,464,730)
Increase in trade and other payables 146,543 435,807
62,459 (1,028,923)
Net cash used in Operating Activities (931,705) (2,062,548)
Cash Flows from Investing Activities
Decrease of short-term investments - 31,525
Net Cash generated from / (used in) Investing Activities - 31,525
Cash Flows from Financing Activities
Proceeds from issue of ordinary shares 1,003,480 2,252,385
Transaction costs on issue of ordinary shares (36,694) (221,318)
Net Cash generated from Financing Activities 966,786 2,031,067
Net movement in Cash and Cash Equivalents 35,081
44
Cash and cash equivalents at the beginning of the year 41 -
Effect of exchange rates on cash balances - (3)
Cash and Cash Equivalents at the End of the 35,122 41
Year
The notes on pages 41 to 65 form part of these financial statements.
1. GENERAL INFORMATION
Pennpetro Energy plc (the "Company") is a public limited company which is
listed on the London Stock Exchange in the Equity Shares (Transition) category
of the Official List and incorporated and domiciled in England and Wales. Its
registered office address is 6 Heddon Street, London, W1B 4BT.
The consolidated financial statements of the Company consist of the following
companies (together "the Group"):
Pennpetro Energy plc UK registered company
Pennpetro USA Corp US registered company
Nobel Petroleum USA Inc US registered company
Nobel Petroleum LLC US registered company
Pennpetro Greentec Limited Cyprus registered company
Pennpetro Greentec UK Limited UK registered company
Pennpetro Green Energy Limited UK registered company
The Group is an oil and gas developer with assets in Texas, United States. The
Company's US-based subsidiaries own a portfolio of leasehold petroleum mineral
interests centered on the City of Gonzales, in southeast Texas, comprising the
undeveloped central portion of the Gonzales Oil Field.
2. MATERIAL ACCOUNTING POLICY INFORMATION
The material accounting policies applied in the preparation of these
consolidated financial statements are set out below.
These policies have been consistently applied to all the years presented,
unless otherwise stated.
2.1. Basis of preparation
These consolidated financial statements have been prepared and approved by the
Directors in accordance with the UK adopted International Accounting
Standards.
The financial statements have been prepared under the historical cost
convention.
The preparation of financial statements in conformity with the UK adopted
International Accounting Standards requires the use of certain critical
accounting estimates. It also requires management to exercise its judgement in
the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and
estimates are significant to the consolidated financial statements are
disclosed in note 4.
The Directors note that the individual acting as Company Secretary and
financial controller passed away in April 2024. This has resulted in a
significant limitation to the accounting information and records available to
the Directors for the preparation of the consolidated financial statements for
the year ended 31 March 2025.
2.2. Basis of consolidation
The Group financial statements consolidate the financial statements of the
Company and all its subsidiaries (the "Group").
Subsidiaries include all entities over which the Group is exposed, or has
rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. The
existence and effect of potential voting rights that are currently exercisable
or convertible are considered when assessing whether the Group controls
another entity. Subsidiaries are consolidated from the date on which control
commences until the date that control ceases. Intra-group balances and any
unrealised gains and losses on income or expenses arising from intra-group
transactions, are eliminated in preparing the consolidated financial
statements.
2.3. Going concern
The Directors have assessed the Group's ability to continue as a going concern
for a period of at least 12 months from the date of approval of these
financial statements. This assessment takes into account the Group's current
financial position, expected operating costs, planned activities, and
availability of funding.
Since October 2025, the Company has engaged with a number of institutional
investors in connection with the proposed return of its shares to trading on
the London Stock Exchange and the planned acquisition of the Limnytskyi
licence in Ukraine. Feedback to date has been positive, and the directors
believe that sufficient funding can be raised to meet the Group's immediate
operational and working capital requirements following the resumption of
trading. In addition, the Company has access to funding through a convertible
loan note ("CLN") arrangement with RMD Group. In January 2025, the board
approved a second tranche of £250,000 under this facility, which is subject
to an agreed use of funds. Further funding may be made available under this or
similar arrangements, should it be required.
RMD Group has also agreed to advance funds directly to suppliers and
contractors in Ukraine to progress activities relating to the Limnytskyi
licence. These costs will not impact the Group's short-term cash flows. Upon
completion of the ongoing restructuring and should the Limnytskyi licence form
part of the continuing Group, the related assets and activities will be
transferred to the Company, together with the associated funding obligations.
Following the removal of a significant creditor from the balance sheet, the
settlement of the majority of remaining creditors, and the availability of
committed and potential funding to meet near-term obligations, the Directors
consider it appropriate to prepare the financial statements on a going concern
basis.
Whilst the Directors are confident in the Company's ability to raise
additional funds as required, from existing and/or new investors, the current
conditions do indicate the existence of a material uncertainty that may cast
significant doubt regarding the applicability of the going concern assumption.
The financial statements do not include adjustments that would arise in the
event of the Group and Company not being able to continue as a going concern.
2.4 New standards, amendments and interpretations adopted by the Group and Company
The International Accounting Standards Board has issued standards and
interpretations effective for the first time for the financial period
beginning 1 April 2024 for entities applying UK adopted International
Accounting Standards. The Directors consider their adoption has not had any
significant impact on the disclosures or on the amounts reported in these
financial statements:
The Directors have considered IFRS and amendments that are in issue but not
yet in effect for the accounting period. They have assessed that none of these
are expected to have a significant impact on the amounts reported in future
periods or to disclosures.
2.5 Revenue Recognition
Most of the Group's revenue is derived from the sale of physical goods to customers. The contract contains one performance obligation which is satisfied at the point of delivery. The performance obligation of goods sold are transferred according to the specific terms that have been formally agreed with the customer, generally upon delivery.
The transaction price for this revenue is the amount which can be invoiced to the customer once the performance obligations are fulfilled, reduced to reflect the provision recognised for local taxes. There are no material rights of return, warranties, or variable consideration affecting the transaction price. The transaction price is determined gross of sales tax, where cash is received net of such taxes. Payment terms are typically within 30 days of delivery, with no significant financing component.
For all sales of goods, revenue is recognised at a point in time, being the point at which the goods are delivered to the customer.
2.6 Investments in Subsidiaries
Investments in subsidiaries are accounted for at cost less impairment.
2.7 Foreign Currency Translation
· Functional and presentation currency
Items included in each of the financial statements of the Group's entities are
measured using the currency of the primary economic environment in which the
entity operates (the 'functional currency'). The functional currency of the UK
parent entity is pound sterling and the functional currency of the US
subsidiaries is US dollars. The financial statements are presented in US
Dollars, rounded to the nearest dollar, which is the Group's and Company's
presentation currency.
· Transactions and balances
Foreign currency transactions are translated into the functional currency
using the exchange rates prevailing at the dates of the transactions or
valuation where such items are re-measured. 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 recognised in the Statement Of Comprehensive Income.
· Group companies
The results and financial position of all the Group entities that have a
functional currency different from the presentation currency are translated
into the presentation currency as follows:
§ assets and liabilities for each Statement of Financial Position presented
are translated at the closing rate at the date of that Statement of Financial
Position;
§ income and expenses for each Statement of Comprehensive Income are
translated at average exchange rates (unless this average is not a reasonable
approximation of the cumulative effect of the rates prevailing on the
transaction dates, in which case income and expenses are translated at the
dates of the transactions); and
§ all resulting exchange differences are recognised in other comprehensive
income.
On consolidation, exchange differences arising from the translation of the net
investment in foreign entities, and of monetary items receivable from foreign
subsidiaries for which settlement is neither planned nor likely to occur in
the foreseeable future are taken to other comprehensive income. When a foreign
operation is sold, such exchange differences are recognised in the Statement
of Comprehensive Income as part of the gain or loss on sale.
2.8 Property, Plant and Equipment
Following evaluation of successful exploration of wells, if commercial
reserves are established and the technical feasibility of extraction
demonstrated, and once a project is sanctioned for commercial development,
then the related capitalised exploration costs are transferred into a single
field cost centre within 'producing properties' within property, plant and
equipment after testing for impairment.
The net book values of 'producing properties' are depreciated on a unit of
production basis at a rate calculated by reference to proven and probable
reserves and incorporating the estimated future cost of developing and
extracting those reserves once production has commenced.
The Petroleum (Mineral lease) expenditure to date is over land that has
already had historical vertical drilled wells and has proven oil reserves. All
these costs were therefore immediately capitalised within property, plant and
equipment.
All costs incurred after the technical feasibility and commercial viability of
producing hydrocarbons has been demonstrated, are capitalised within 'drilling
costs and equipment' on a well-by-well basis. Subsequent expenditure is
capitalised only where it either enhances the economic benefits of the
development/producing asset or replaces part of the existing
development/producing asset. Any costs remaining associated with the part
replaced are expensed.
2.9 Intangible Assets
• Development expenditure
Expenditure on the drilling of development wells, including service, is
capitalised initially within intangible fixed assets and when the well has
formally commenced commercial production, then it is transferred to property,
plant and equipment and is depreciated from the commencement of production as
described in the accounting policy for property, plant and equipment.
• Drilling costs and Petroleum mineral leases
The Group applies the successful efforts method of accounting for oil and gas
assets, having regard to the requirements of IFRS 6 'Exploration for and
Evaluation of Mineral Resources'. Costs incurred prior to obtaining the legal
rights to explore an area are expensed immediately to the Statement of
Comprehensive Income.
Exploration expenditure incurred in the process of determining exploration
targets is capitalised initially within intangible assets as drilling costs.
Drilling costs are initially capitalised on a well-by-well basis until the
success or otherwise has been established. Drilling costs are written off on
completion of a well unless the results indicate that hydrocarbon reserves
exist and there is a reasonable prospect that these reserves are commercially
viable. Drilling costs are subsequently transferred to 'Drilling expenditure'
within property, plant and equipment and depreciated over their estimated
useful economic life. All such costs are subject to regular technical,
commercial and management review on at least an annual basis to confirm the
continued intent to develop or otherwise extract value from the discovery.
Where this is no longer the case, the costs are immediately expensed to the
Statement of Comprehensive Income.
2.10 Impairment of Non-Financial Assets
Assets not ready for use are not subject to amortisation and are tested
annually for impairment. Assets that are subject to amortisation or
depreciation are reviewed for impairment at each reporting date. An impairment
loss is recognised for the amount by which the asset's carrying amount exceeds
its recoverable amount. The recoverable amount is the higher of an asset's
fair value less costs to sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash- generating units). Non-financial
assets other than goodwill that suffered impairment are reviewed for possible
reversal of the impairment at each reporting date.
2.11 Financial Assets
Classification
Financial assets are recognised when the Group becomes a party to the
contractual provisions of the instrument. At initial recognition, the Group
measures its financial assets at fair value plus transaction costs which
comprise 'trade and other receivables' and 'cash and cash equivalents'.
A financial asset shall be measured at amortised cost if both of the following
conditions are met:
• the financial asset is held within a business model whose objective is
to hold financial assets in order to collect contractual cash flows; 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.
Recognition and measurement
At initial recognition, an entity shall measure a financial asset at its fair
value plus transaction costs that are directly attributable to the acquisition
or issue of the financial asset.
At initial recognition, an entity shall measure trade receivables at their
transaction price if the trade receivables do not contain a significant
financing component.
Derecognition
The Group derecognises a financial asset when the contractual rights to the
cash flows from the asset expire, or it transfers the rights to receive the
contractual cash flows on the financial asset in a transaction in which
substantially all the risks and rewards of the ownership of the financial
asset are transferred. Any interest in transferred financial assets that is
created or retained by the Group is recognised as a separate asset or
liability.
Derecognition also takes place for certain assets when the Group writes-off
balances pertaining to the assets deemed to be uncollectible.
Impairment of financial assets
IFRS 9 mandates the use of an expected credit loss model to calculate
impairment losses rather than an incurred loss model, and therefore it is not
necessary for a credit event to have occurred before credit losses are
recognised. The impairment model applies to the Group's financial assets and
loan commitments. The Group recognises lifetime expected credit losses ("ECL")
when there has been a significant increase in credit risk since initial
recognition. However, if the credit risk on the financial instrument has not
increased significantly since initial recognition, the Group measures the loss
allowance for that financial instrument at an amount equal to a lifetime ECL.
At each reporting date, the Group assesses whether financial assets carried at
amortised cost are credit impaired. A financial asset is credit impaired when
one or more events that have a detrimental impact on the estimated future cash
flows of the financial asset have occurred.
2.12 Cash and Cash Equivalents
Cash and cash equivalents comprise cash at bank and in hand and demand deposits with banks.
2.13 Trade and Other Payables
Trade and other payables are initially measured at fair value, net of
transaction costs that are directly attributable to the issue of the financial
liability and are subsequently measured at amortised cost using the effective
interest method if the time value of money is significant.
2.14 Borrowings
Borrowings are recognised initially at fair value minus transaction costs that
are directly attributable to the issue of the financial liability. Borrowings
are subsequently carried at amortised cost; any difference between the
proceeds (net of transaction costs) and the redemption value is recognised in
the Income Statement over the period of the borrowings, using the effective
interest method.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the end of the reporting period.
2.15 Share Capital
Ordinary shares are classified as equity when there is no obligation to
transfer cash or other assets. Incremental costs directly attributable to the
issue of equity instruments are shown in equity as a deduction from the
proceeds, net of tax. Incremental costs directly attributable to the issue of
equity instruments as consideration for the acquisition of a business are
included in the cost of acquisition.
2.16 Reserves
On 17 May 2017 Pennpetro Energy plc ("Pennpetro") acquired 100% of the issued
capital of Nobel Petroleum UK Limited ("Nobel UK") in a share for share
exchange with the shareholders of Nobel UK's parent company at that time,
Nobel Petroleum Ireland Limited ("Nobel Ireland"). This reverse merger was
accounted for as a share-based payment transaction which should be accounted
for in accordance with IFRS 2. On the basis of the guidance in para 13A of
IFRS 2, the reverse merger has been treated as a continuation of the Nobel
Group into the Pennpetro Group. The consideration included the issue of new
share capital and the issue of a convertible bond. The total consideration
less the share capital in Nobel UK resulted in the creation of the
reorganisation reserve.
The convertible reserve represents the principal value of a mandatory
convertible note issued by Pennpetro Petroleum plc to Nobel Petroleum Ireland
Limited in part consideration for the acquisition of Nobel Petroleum UK under
an agreement dated 17 May 2017. The convertible loan note was issued by
Pennpetro to Nobel Ireland in the Reverse merger of Nobel UK. This may be
converted into 19 million ordinary shares if certain conditions are met, at a
fixed subscription price of 25 pence. The loan note was partially exercised in
March 2022 for issue of 5,833,333 shares.
The foreign exchange reserve represents effects of currency translation in the year.
2.17 Taxation
The tax expense or credit comprises current and deferred tax. It is calculated
using tax rates that have been enacted or substantively enacted by the
Statement of Financial Position date.
Deferred tax is accounted for using the balance sheet liability method in
respect of temporary differences arising from differences between the carrying
amount of assets and liabilities in the financial statements and the
corresponding tax basis used in the computation of taxable profit. In
principle, deferred tax liabilities are recognised for all taxable temporary
differences and deferred tax assets are recognised to the extent that it is
probable that taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities are not
recognised if the temporary difference arises from goodwill, from the initial
recognition (other than in a business combination) of other assets and
liabilities in a transaction, which affects neither the tax profit nor the
accounting profit, or if it does not give rise to equal taxable and deductible
temporary differences.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. Deferred tax is calculated at the tax rates
that are expected to apply to the period when the asset is realised, or the
liability is settled. Deferred tax is charged or credited in the Statement of
Comprehensive Income, except when it relates to items credited or charged
directly to equity, in which case the deferred tax is also dealt with in
equity. Deferred tax assets and liabilities are offset 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.
2.18 Segment Information
Operating segments are reported in a manner consistent with the internal
reporting provided to the chief operating decision-maker ("CODM"), who is
responsible for allocating resources and assessing performance of the
operating segments and making strategic decisions. The CODM is determined to
be the board of Directors.
3. FINANCIAL RISK MANAGEMENT
The Group's activities expose it to a variety of financial risks: market risk
(including commodity and currency risk, and cash flow and interest rate risk),
credit risk and liquidity risk.
Market risk
The Group operates in an international market for hydrocarbons and is exposed
to risk arising from variations in the demand for and price of the
hydrocarbons. Oil and gas prices historically have fluctuated widely and are
affected by numerous factors over which the Group has no control, including
world production levels, international economic trends, exchange rate
fluctuations, speculative activity and global or regional political events.
Commodity and currency risk
As the Group's potential earnings will be derived from the sale of oil, the
Group's future revenues and cash flows will be impacted by changes in the
prices and available market of this commodity. Any substantial decline in the
price of oil or in transport or distribution costs may have a material adverse
effect on the Group. Commodity prices fluctuate and are affected by a number
of factors including current and expected future supply and demand, production
cost levels in major oil producing centres, as well as macroeconomic
conditions such as inflation and interest rates.
Furthermore, the capital raises of the Company are denominated in Great
British Pounds whereas the Groups assets and liabilities are primarily held in
United States Dollars. Consequently, material changes in the Pound Sterling
exchange rate may impact the Group's ability to raise sufficient funds for
operations in Texas. Exchange rates are impacted by numerous factors beyond
the control of the Group, including inflation, interest rates, and general
economic outlook. Notes 16 and 21 detail the impact of adverse and favourable
movements in exchange rates that may impact the Group.
The Directors are confident that they have put in place a strong management
team capable of dealing with the above issues as they arise.
Credit risk
The Group's principal financial assets are cash and cash equivalents, other
receivables and short-term investments.
Credit risk represents the risk of loss the Group would incur if third party
operators and counterparties fail to fulfil their credit obligations. The risk
is concentrated between a relatively small group of operators given the small
number of parties involved in oil and gas exploration and production
activities. The Group seeks to mitigate this risk where possible by assessing
the credit quality of the participants and by establishing ongoing and
long-term relationships.
The initial credit risk on cash and cash equivalents and short-term
investments is limited because it is the Group's policy to invest with banks
that firstly offer the greatest degree of security in the view of the Group
and, secondly the most competitive interest rates. The credit risk for short
term investments and cash and cash equivalents is considered negligible since
the counterparties are reputable banks.
Other receivables include amounts due from parties that have been involved in
the Gonzales Project since its inception and continue to have an interest in
the Group in their capacity as shareholders in Pennpetro or as lenders to the
Group. Other receivables are therefore initially considered low credit risk.
Other receivables are considered in default if the entity or party has not
settled its payment obligation by the due date set out in the underlying
contracts and agreements.
A loss allowance is recognised for expected credit losses on all financial
assets held at the balance sheet date. Given risk mitigation steps undertaken
by the Directors, no provision has been made for losses.
The maximum exposure due to credit risk for the Group on financial assets
during the year was
$391,103 (2024: $336,589). All amounts are expected to be received in full and
on time.
Liquidity risk
Cash flow forecasting is performed in the operating entities of the Group and
aggregated by Group Finance. Group Finance monitors rolling forecasts of the
Group's liquidity requirements to ensure it has sufficient cash to meet
operational needs, while seeking to maintain sufficient headroom on its
undrawn committed borrowing facilities (note 20) at all times, so that the
Group does not breach borrowing limits or covenants (where applicable) on any
of its borrowing facilities. Such forecasting takes into consideration the
Group's debt financing plans, covenant compliance, compliance with internal
Statement of Financial Position ratio targets, and, if applicable, external
regulatory or legal requirements (for example, currency restrictions).
The table below analyses the Group's non-derivative financial liabilities into
relevant maturity groupings, based on the remaining period at the Statement of
Financial Position to the contractual maturity date. The amounts disclosed in
the table are the contractual undiscounted cash flows.
Group Less than Between 1 and 2 years Between 2 and 3 years
1 year $ $
At 31 March 2025 $
Borrowings (undiscounted) 4,717,031 - -
Trade and other payables 2,403,955 - -
At 31 March 2024
Borrowings (undiscounted) 4,604,181 - -
Trade and other payables 2,129,116 - -
4. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
4.1.Use of estimates and judgements
The preparation of Financial Statements in conformity with IFRSs requires
management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities, income
and expenses. The estimates and associated assumptions are based on historical
experience and various other factors that are believed to be reasonable under
the circumstances, the results of which form the basis of making the
judgements about carrying values of assets and liabilities that are not
readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognised in the period in which the
estimate is revised if the revision affects only that period, or in the period
of the revision and future periods if the revision affects both current and
future periods. In particular, information about significant areas of
estimation uncertainty and critical judgements in applying accounting policies
that have the most significant effect on the amount recognised in the
financial statements are described below.
4.2.Critical accounting judgements
• Recoverability of non-producing mineral leases and capitalised drilling costs & equipment
Management tests annually whether non-producing mineral leases have future
economic value in accordance with the accounting policies. This assessment
takes into consideration the likely commerciality of the asset, the future
revenues and costs pertaining and the discount rates to be applied for the
purposes of deriving a recoverable value. In the event that a lease does not
represent an economic drilling target and results indicate that there is no
additional upside, the mineral lease and drilling costs will be impaired.
The Directors have reviewed the estimated value of the licences and have
concluded that no adjustment to the previously impaired assets should be made.
The primary terms of the leases have expired but did not require renewal
whilst there was production from the permitted area. Production over the
permitted area stopped in April 2024 and has not yet recommenced.
• Impairment of investments, and amounts due from subsidiaries
The Directors have assessed at year end whether there is any indication that
the carrying value of the Company's investment in its subsidiaries has been
impaired, and whether the amounts due from its subsidiaries are not
recoverable. This assessment included consideration of the value of the
underlying assets held by the subsidiaries, being the mineral leases, proven
oil and gas reserves and Net Revenue Interests. Based on this review, the
directors have concluded that the assumptions, estimates, and judgements
applied in the previous accounting period remain appropriate, and accordingly
there has been no change to the impairment conclusions recognised in the
previous accounting period.
4.3 Critical accounting estimates
• Estimated impairment of producing properties and capitalised drilling costs & equipment
At 31 March 2025, petroleum mineral leases and capitalised drilling costs
& equipment on petroleum properties have a total carrying value of $Nil
(2024: $Nil), (notes 12 and 13). Management tests annually whether the assets
have future economic value in accordance with the accounting policies and has
previously placed reliance on the Competent Persons Report ("CPR") prepared in
December 2017 for the City of Gonzales Lease Area, which is now considered to
be out of date.
As detailed in section 4.2, the Whistling Straits Development Area mineral
leases have expired and therefore no drilling or production can take place
from this area at present. Existing development expenditure incurred thus has
no value in use and so the carrying value of these properties is now $Nil.
The Directors are investigating the potential for new lease agreements to be
reached and as such, reinstate the historic value of the properties. However,
there is no firm agreement as at the date of this report and as such, no
reinstatement of value can yet be made.
5. REVENUE FROM CONTRACTS WITH CUSTOMERS
Set out below, is the reconciliation of the revenue from contracts with customers with the amounts disclosed in the segment information (note 6):
Year ended 31 March 2025
Oil Sales Other
Total
$ $ $
Segments
Type of goods or service
Sale of Oil 30,067 - 30,067
Others * - - -
Total revenue from contracts with customers 30,067 - 30,067
Year ended 31 March 2024
Oil Sales Other
Total
$ $ $
Segments
Type of goods or service
Sale of Oil 486,721 - 486,721
Others * - 6,284 6,284
Total revenue from contracts with customers 486,721 6,284 493,005
*rent of office space
6. SEGMENTAL INFORMATION
The Group operates in two geographical areas, the United Kingdom and the
United States of America. Activities in the UK are mainly administrative in
nature whilst the activities in the USA relate to exploration and production
from oil and gas wells. The reports reviewed by the Board of Directors that
are used to make strategic decisions are based on these geographical segments.
Year ended 31 March 2025
Intra-segment
USA UK balances Total
$ $ $ $
Revenue 30,067 - - 30,067
Operating loss (738,073) (979,040) - (1,717,113)
Capital expenditure - - - -
Total assets 66,730 133,447 (98,325) 101,852
Total liabilities 5,043,356 1,979,305 98,325 7,120,986
Year ended 31 March 2024
Intra-segment
USA UK balances Total
$ $ $ $
Revenue 486,721 6,284 - 493,005
Operating loss (3,204,844) (12,002,239) 6,439,191 (8,767,892)
Capital expenditure 1,337,392 - - 1,337,392
Total assets 299,866 14,281 - 314,147
Total liabilities 4,680,647 1,794,418 - 6,475,065
The amounts provided to the Board of Directors with respect to total assets
are measured in a manner consistent with that of the financial statements.
These assets are allocated based on the operations of the segment and physical
location of the asset.
Reportable segments' assets are reconciled to total assets as follows:
31 March 2025 31 March 2024
$ $
Segmental assets for reportable segments 101,852 314,147
Total assets per Statement of Financial Position 101,852 314,147
7. EXPENSES BY NATURE
Year ended 31 March 2025 Year ended 31 March 2024
Group
$ $
493,793 842,948
Legal, professional and compliance costs
Foreign exchange loss / (gain) 946 (18,809)
Wages and salaries 435,627 226,222
Other costs 354,703 541,789
Total administrative expenses 1,285,069 1,592,150
Unknown expenditure - 423,563
Total other losses - 423,563
8. AUDITOR REMUNERATION
Services provided by the Company's auditor and its associates
During the period, the Group (including its overseas subsidiaries) obtained
the following services from the Company's auditor:
Period ended 31 March 2025 Period ended 31 March 2024
$ $
Fees payable to the Company's auditor for the audit
of the parent company and consolidated financial
Statements 76,536 69,123
9. STAFF COSTS
Group and Company 2025 2024
$ $
417,939 226,222
Wages and salaries
Social security costs 14,260 -
Pension contributions 3,428 -
435,627 226,222
Directors' Emoluments
2025 2024
$ $
Olof Rapp Emoluments 57,402 37,704
Thomas Evans Emoluments 123,840 37,704
David Lenigas Emoluments 84,263 150,814
Stephen Lunn Emoluments 89,292 -
Robert Menzel Emoluments 63,142 -
417,939 226,222
The Group does not employ any full-time employees at its US subsidiaries.
Instead, the Group uses specialist service providers to fulfil its well
drilling and land management requirements.
The average monthly number of staff, including the Directors, during the
financial year was as follows:
2025 2024
Directors 3 4
10. FINANCE COSTS
2025 2024
$ $
357,969 260,285
Interest expense
357,969 260,285
11. INCOME TAX
The tax charge for the year is $Nil (2024: $Nil). Factors affecting the tax
charge for the period are explained below:
2025 2024
$ $
(1,717,113) (8,897,048)
Loss for the year before taxation
(429,278) (2,224,262)
UK Loss before tax multiplied by the UK tax rate 25% (2024: 25%)
Tax effect of:
Fixed asset differences - 1,777,112
Expenses not deductible for tax purposes 117,253 121,205
Difference in overseas tax rate (2,295) -
Movement in deferred tax not recognised 314,320 -
Unutilised tax losses carried forward - 325,945
- -
The Group has UK tax losses of approximately $3,709,687 (2024: $2,944,526) to
carry forward against future profits. The Directors have not recognised a
deferred tax asset on the losses to date due to the uncertainty of recovery.
12. EARNINGS PER SHARE
The calculation of basic and diluted earnings per share is based on the
following loss and number of shares:
2025 2024
Group:
Loss attributable to equity holders of the parent ($) 1,717,113 8,897,048
Weighted average number of shares (number) 107,863,473 98,600,728
Loss per share (cents) (1.59) (9.02)
There is no difference between the basic and diluted earnings per share as the
effect would be to decrease the loss per share.
13. PROPERTY, PLANT AND EQUIPMENT
Petroleum (Mineral Leases)
Group $ Office equipment
$ Total
$
Cost
At 31 March 2023 1,484,931 11,699 1,496,630
At 31 March 2024 1,484,931 11,699 1,496,630
At 31 March 2025 1,484,931 11,699 1,496,630
Accumulated Depreciation and Impairment
At 31 March 2023 - 11,699 11,699
Impairment 1,484,931 - 1,484,931
At 31 March 2024 1,484,931 11,699 1,496,630
At 31 March 2025 1,484,931 11,699 1,496,630
Net Book Amount
At 31 March 2024 - - -
At 31 March 2025 - - -
Impairment review
This review included consideration of the status and enforceability of the
Mineral Leases, including those at Whistling Straits and COG#1-H, where the
primary lease terms have expired and, in certain cases, production has ceased.
The Directors also considered the continued relevance of the previously
obtained Competent Person's Report in supporting the commercial viability of
these assets.
Based on this review, the Directors concluded that the uncertainties and
conditions giving rise to the impairment recognised in the year ended 31 March
2024 remain unchanged. Accordingly, the assumptions and judgments applied in
the prior year continue to be appropriate, and no additional impairment charge
or reversal has been recognised in the current year.
Further details regarding consideration of the carrying value is contained in note 4.
14. INTANGIBLE ASSETS
Group Drilling costs
$ Total
$
Cost
At 31 March 2023 4,233,890 4,233,890
Additions 1,337,392 1,337,392
At 31 March 2024 5,571,282 5,571,282
Additions 104,142 104,142
At 31 March 2025 5,675,424 5,675,424
Amortisation and Impairment
At 31 March 2023 - -
Impairment 5,571,282 5,571,282
At 31 March 2024 5,571,282 5,571,282
Impairment 104,142 104,142
At 31 March 2025 5,675,424 5,675,424
Net Book Amount
At 31 March 2024 - -
At 31 March 2025 - -
Drilling costs represents acquired exploration and evaluation assets with an
undetermined useful life and are tested annually for impairment. Drilling
costs are capitalised on a well-by-well basis if the results indicate the
existence of a commercially viable level of reserves.
At 31 March 2025, the Company held, through its US based subsidiary entities,
100% in the leasehold petroleum interests centered on the City of Gonzales,
southwest Texas.
Impairment review - Intangible assets
The Directors have undertaken a review to assess whether circumstances exist
which could indicate the existence of impairment, considering the following
indicators:
• There is uncertainty over the title and enforceability of mineral
leases.
• A decision has been taken by the Board to discontinue exploration
due to the absence of a commercial level of reserves.
• Sufficient data exists to indicate that the costs incurred will
not be fully recovered from future development and participation.
Following their assessment, the Directors concluded that the uncertainties and
conditions giving rise to the impairment recognised in the year ended 31 March
2024 remain unchanged. Further details regarding consideration of the carrying
value is contained in note 4.
15. INVESTMENTS
Investments in subsidiaries
Company 2025 2024
$ $
Shares in group undertakings
At 1 April - 6,440,980
Foreign exchange movements - 94,328
Impairments - (6,535,308)
At 31 March - -
The Group comprises of the following subsidiaries:
Pennpetro USA Corp
Registered Office: 8 The Green Ste A, Dover, Delaware 19901, USA
Nature of business: Oil and Gas
Class of share: Ordinary shares
% of equity shares held by Company: 100%
Nobel Petroleum USA Inc.
Registered Office: 198 West 13th Street, Wilmington, Delaware
19801, USA
Nature of business: Oil and Gas
Class of share: Ordinary shares
% of equity shares held by Company: 100% via Pennpetro USA Corp
Nobel Petroleum LLC
Registered Office: 3867 Plaza Tower DR Baton Rouge, Louisiana 70816-4378, USA
Nature of business: Oil and Gas
Class of share: Ordinary shares
% of equity shares held by Company: 100% via Pennpetro USA Corp
Pennpetro Greentec UK Limited
Registered Office: 20b Wilton Row London SW1X 7NS, UK
Nature of business: Dormant
Class of share: Ordinary shares (£100)
% of equity shares held by Company: 100%
Pennpetro Green Energy Limited
Registered Office: 20bWilton Row, London SW1X 7NS, UK
Nature of business: Dormant
Class of share: Ordinary shares (£100)
% of equity shares held by Company: 100%
Pennpetro Greentec Limited
Registered Office: 1 Kalymnou, Q MERITO, 4th Floor, Agios Nikolaos, 6037 Larnaca, Cyprus
Nature of business: IP Holding
Class of share: Ordinary shares (€1,000)
% of equity shares held by Company: 100%
Investments in Group undertakings are stated at cost, which is the fair value
of the consideration paid, less any impairment provision.
16. TRADE AND OTHER RECEIVABLES
Group Company
2025 2024 2025 2024
$ $ $ $
Amounts owed from group undertakings - - 98,325 -
Other receivables - 307,881 - 14,240
- 307,881 98,325 14,240
The fair value of all receivables is the same as their carrying values stated
above.
Group
The carrying amounts of the Group's trade and other receivables are
denominated in the following currencies:
2025 2024
$ $
- 14,240
UK Pound Sterling
US Dollar - 293,641
- 307,881
The maximum exposure to credit risk at the reporting date is the carrying
value of the trade and other receivables mentioned above. The Group does not
hold any collateral as security.
Company
The carrying amounts of the Company's trade and other receivables are
denominated in UK Pound Sterling.
17. SHORT-TERM INVESTMENTS
Group Company
2025 2024 2025 2024
$ $ $ $
Short-term investments - - - -
Historically, cash has been held in a short term investment account by FHF
Corporate Finance Limited on behalf of Pennpetro. As at 31 March 2025, the
balance in this account was $Nil (2024: $50,699). Due to the Company not
having beneficial ownership nor control of this account, the whole amount was
impaired in the financial statements for the year ended 31 March 2024.
18. CASH AND CASH EQUIVALENTS
Group Company
2025 2024 2025 2024
$ $ $ $
Cash at bank 101,852 6,266 35,122 41
At 31 March 2025, the Group held cash of $101,852 (2024: $6,266) in banks with
a Fitch credit rating of A (Stable).
19. SHARE CAPITAL AND PREMIUM
Ordinary shares Share premium
Number of Value Value Value Value Total
Group shares £ $ £ $ $
At 1 April 2024 100,299,089 1,002,991 1,277,639 6,679,247 8,443,248 9,720,887
Share issue 12,000,000 120,000 154,256 631,200 812,530 966,786
At 31 March 2025 112,299,089 1,122,991 1,431,895 7,310,447 9,255,778 10,687,673
On 31 July 2024 6,000,000 new ordinary shares were issued at a price of 6
pence per share.
On 14 August 2024 5,000,000 new ordinary shares were issued at a price of 6
pence per share.
On 5 November 2024 1,000,000 new ordinary shares were issued at a price of 12
pence per share.
20. BORROWINGS
Group Company
2025 2024 2025 2024
$ $ $ $
Current liabilities
Corporate borrowings 4,717,031 4,345,948 - -
As at 31 March 2023, the Group had a $5 million Loan Note arrangement with
Petroquest Energy Limited, with a maturity date of 31 December 2024. At the
date of signature of these financial statements, the whole amount is due for
payment. On 20 August 2025, Petroquest Energy Limited issued a Corporate
Undertaking within which the majority of the Petroquest loan would be written
off and its security over assets held in Nobel Petroleum LLC be released.
Further details regarding this agreement are included in Note 29.
The annual interest rate is set at 1% below Barclays Bank base rate. In the
year to 31 March 2025, $179,980 was charged in interest and the effective
interest charge for the year to 31 March 2025 is $143,106 as shown in finance
costs (note 10). The undiscounted balance drawn against this loan note as at
31 March 2025 was $4,669,035 (2024: $4,604,181). The borrowing facility is
secured against certain petroleum leases owned by the Group which have now
expired, and the value of these leases impaired per note 12. The Directors are
in discussion with Petroquest to agree mutually beneficial terms to resolve
the issue. The discounted present value of the loan as at 31 March 2025 equals
the undiscounted value as the maturity date of 31 December 2024 has already
passed.
In addition to the above, on 15 October 2024, the Group entered into a new
Loan Note with Frost Bank for $50,000, with a maturity date of 15 October
2025. This Note is denominated in US dollars and at the reporting date, the
outstanding balance was $47,996. The interest rate on this Loan Note is the
U.S. Prime Rate as quote in the Wall Street Journal U.S. Edition and is
accruing daily. The Loan Note is secured against the assets of Pennpetro USA
Corp.
Subsequent to the reporting date of these financial statements, on 30 June
2025, the Frost Bank Loan Note was settled in full. Upon settlement, the
security previously granted was released.
The movement in total borrowings in the year was as follows. Borrowings are
denominated wholly in US Dollars.
Group Company
2025 2024 2025 2024
$ $ $ $
-
At 1 April 4,345,949 4,018,369 -
Interest charge 179,980 211,443 - -
Adjustment for effective interest 143,106 48,802 - -
Adjustment for historic Directors balance - 67,335 - -
Drawdown of new borrowings 50,000 -
Repayments (2,004) -
At 31 March 4,717,031 4,345,949 - -
The fair value of borrowings approximates to their carrying amount. Borrowings
are denominated in US dollars.
The net debt position (total borrowings less cash on hand) as at 31 March 2025
is $4,615,179 (2024: $4,339,683). Settlement of the Petroquest Loan Note has
been agreed since the year end. Further details regarding the settlement are
included in Note 29.
2025 2024
$ $
Opening net Debt 4,339,683 3,971,577
Net (increase) / decrease in cash (95,971) 38,059
Net Proceeds of loans 47,996 -
Interest charged 323,086 260,245
Adjustment for historic Directors amount - 67,335
Foreign exchange movements 385 2,467
Closing Net Debt 4,615,179 4,339,683
Company
The company does not carry any borrowings.
21. TRADE AND OTHER PAYABLES
Group Company
2025 2024 2025 2024
$ $ $ $
Trade and other payables 1,656,641 1,362,468 1,197,848 994,462
Amounts owed to group undertakings - - 34,143 33,308
Facility provision (1) 387,106 529,508 387,106 529,508
Accrued expenses 360,208 237,140 360,208 237,140
At 31 March 2025 2,403,955 2,129,116 1,979,305 1,794,418
(1) The facility provision relates wholly to a balance owed to a
creditor with a historic share subscription facility that the Company drew
down on for operations. This balance is due within one year of 31 March 2025.
Group
The carrying amounts of the Group's trade and other payables are denominated
in the following currencies:
2025 2024
$ $
UK Pound Sterling 1,979,307 1,794,418
US Dollar 424,648 334,698
2,403,955 2,129,116
The impact of a 10% favourable movement in the US Dollar to UK Pound would
increase the carrying value of trade and other payables denominated in UK
Pounds by approximately
$197,931 (2024: $179,442). The impact of a 10% adverse movement in the US
Dollar to UK Pound would reduce the carrying value of trade and other payables
denominated in UK Pounds by approximately $197,931 (2024: $179,442).
Company
The carrying amounts of the Company's trade and other payables are denominated
in UK Pound sterling. The carrying amounts of the Company's US subsidiary
companies are denominated in US Dollars.
22. FINANCIAL INSTRUMENTS BY CATEGORY
Group Company
2025 2024 2025 2024
$ $ $ $
Assets as per Statement of
Financial Position
Loans and receivables:
Trade and other receivables (excluding prepayments)
- 307,881 98,325 14,240
Short-term investments - - - -
Cash and cash equivalents 101,852 6,266 35,122 41
101,852 314,147 133,447 14,281
Liabilities per Statement of Financial Position
Financial liabilities at amortised cost:
Borrowings 4,717,031 4,345,949 - -
Trade and other payables (excluding non-financial liabilities) 2,403,955 2,129,116 1,979,305 1,794,418
7,120,986 6,475,065 1,979,305 1,794,418
23. CONTINGENT LIABILITIES
In the usual course of business, the Group may receive various claims from customers, suppliers, and other parties. The outcomes of these proceedings are inherently uncertain, and the ultimate resolution may differ from the assessments made by management.
Based on information presently available, no individual matter is expected to have a material adverse effect on the Group's financial position.
24. TREASURY POLICY
The Company and Group operate informal treasury policies which include ongoing
assessments of interest rate management and borrowing policy. The Board
approves all decisions on treasury policy.
The Group has financed its activities by raising funds through borrowings set
out in note 20 above. There are no material differences between the book value
and fair value of the financial assets.
25. CAPITAL MANAGEMENT POLICIES
The Group and Company set the amount of capital in proportion to its overall
financing structure and manage their capital structure and make adjustments to
it in the light of changes in economic conditions and the risk characteristics
of the underlying assets.
The Group considers its equity to be its capital.
The Group and Company's capital management objectives are:
• to ensure compliance with borrowing covenants;
• to ensure the Group's and Company's ability to continue as a going
concern; and
• to provide an adequate return to shareholders.
In order to maintain or adjust the capital structure, the Group may issue new
shares or sell assets to reduce debts. The Group will continue making interest
payments in accordance with financial and non-financial loan covenants.
The Group applies itself to taking on critically analysed and early productive
asset acquisitions as a forward de-risk strategy to maintain going concern
issues.
26. CAPITAL COMMITMENTS
As at 31 March 2025, the Group had no capital commitment for drilling and
equipment costs contracted but not provided for. The Group had no other
capital commitments.
27. RELATED PARTY TRANSACTIONS
Transactions with Directors
An amount of £25,000 was previously received from Olof Rapp via Petroquest
Energy Limited. This amount remains outstanding as at 31 March 2025 and is
included in the total loan note owed to Petroquest Energy Limited.
As at 31 March 2025, Stephen Lunn was a Director of the following companies
which are considered as related parties:
• Petroquest Energy Limited: balance of $4,669,035 owed to
Petroquest Energy Limited as at 31 March 2025 (2024: $4,345,949). Total
interest charged in the year to 31 March is $323,086 (2024: $260,347). Further
details of these borrowings are detailed in note 20.
Transactions with Group undertakings
During the year ended 31 March 2025, the Company provided funds to its wholly
owned subsidiary Nobel Petroleum USA of $46,000 (2024: $1,013,447).
After the foreign exchange gains of $552 (2024: loss of $55,081), the total
amount due from the Group as at 31 March 2025 was $46,552 (2024: $Nil).
All Group transactions were eliminated on consolidation.
28. ULTIMATE CONTROLLING PARTY
As at 31 March 2025, there was no ultimate controlling party.
29. EVENTS AFTER THE REPORTING PERIOD
On 30 June 2025, the Frost Bank Loan Note was settled in full. Upon
settlement, the security previously granted was released.
On 20 August 2025, Petroquest Energy Limited issued a Corporate Undertaking
within which the majority of the Petroquest loan note would be written off and
its security over assets held in Nobel Petroleum LLC be released. The balance
of the loan will be converted into a 50% stake in Pennpetro USA Corp. This
process has not yet been finalised as of the date of approval of these
financial statements.
On 24 September 2025, the Company entered into an unsecured convertible loan
note agreement with RMD Holdings Ltd to provide the Company with £250,000 for
working capital requirements. Interest shall be payable at 6% per annum and
will accrue daily.
On 13 October 2025, the Company entered into a Heads of Agreement relating to
a transaction over the Limnytskyi Oil and Gas Exploration License.
On 28 January 2026, the Company entered into a further secured convertible
loan note agreement with RMD Holdings Ltd to provide the Company with an
additional £250,000 for working capital requirements. Interest shall be
payable at 12% per annum and will accrue daily.
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