Who are we

Corporate governance

The Board is committed to maintaining high standards of corporate governance. The Listing Rules of the Financial Conduct Authority incorporate the Combined Code, which sets out the principles of Good Governance, and the Code of Best Practice for listed companies. Whilst the Company is not required to comply with the Combined Code, the Company's corporate governance procedures take due regard of the principles of Good Governance set out in the Combined Code in relation to the size and the stage of development of the Company.

The Board of Directors currently comprises two Executive Directors and two Non-Executive Director. The Directors are of the opinion that the Board comprises a suitable balance and that the recommendations of the Combined Code have been implemented to an appropriate level. The Board, through the Chairman, will maintains regular contact with its advisers and public relations consultants in order to ensure that the Board develops an understanding of the views of major shareholders about the Company.

The Board meets regularly throughout the year to discuss normal operational matters. The Board is responsible for formulating, reviewing and approving the Company's strategy, financial activities and operating performance. Day to day management is devolved to the Executive Directors who are charged with consulting the Board on all significant financial and operational matters. All Directors have access to the advice of the Company's solicitors and the Company Secretary ensures necessary information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively, and all Directors have access to independent professional advice, at the Company's expense, as and when required.

The Board has established the following committees, each which has its own terms of reference:

Audit committee

The Audit Committee considers the Group’s financial reporting (including accounting policies) and internal financial controls. The Audit Committee comprises three Directors, Neil Ritson (Chairman), Don Strang and Daniel Maling is responsible for ensuring that the financial performance of the Group is properly monitored and reported on.

Remuneration committee

The Remuneration Committee is responsible for making recommendations to the Board on Directors’ and senior executives’ remuneration. It comprises two Directors,Neil Ritson (Chairman) and Don Strang. Non-Executive Directors’ remuneration and conditions are considered and agreed by the Board. The Committee will also have regard to the terms which may be required to attract an experienced executive to join the Board from another company.

Nomination committee

The directors do not consider that, given the size of the Board, it is appropriate to have a Nomination Committee. The appropriateness of such a committee will however, be kept under regular review by the Board.

 

 

The Directors acknowledge their responsibility for the Group’s systems of internal controls and for reviewing their effectiveness. These internal controls are designed to safeguard the assets of the Company and to ensure the reliability of financial information for both internal use and external publication. Whilst they are aware that no system can provide absolute assurance against material misstatement or loss, in light of increased activity and further development of the Company, continuing reviews of internal controls will be undertaken to ensure that they are adequate and effective.

The company’s objectives may not be fulfilled

The value of an investment in the Company is dependent upon the Company achieving the aims set out in this Document. There can be no guarantee that the Company will achieve the level of success that the Board expects.

Suitability of ordinary shares as an investment

The Ordinary Shares may not be a suitable investment for all recipients of this Document. Before making a decision, investors are advised to consult an appropriate independent investment adviser authorised through FSMA who specialises in advising on investments of this nature. The value of Ordinary Shares can go down as well as up and investors may get back less than their original investment.

Attraction and retention of key employees

The Company’s success will depend on its current and future executive management team. The loss of the services of certain employees could have a materially adverse effect upon the Company’s business and future.

Requirement for further funds

The existing resources of the Company may not be sufficient for the future working capital requirements of the Company or allow the Company to exploit new opportunities. It may therefore be necessary for the Company to raise further funds in the future, which may be by way of issue of further Ordinary Shares on a non pre-emptive basis. Although it is the Company’s intention to issue Ordinary Shares to satisfy all or part of any consideration payable on an acquisition, vendors of suitable companies or businesses may not be prepared to accept Ordinary Shares at the quoted market price.

Market information and nature of ordinary shares

The market price of the Ordinary Shares may not reflect the underlying value of the Company’s net assets. Potential investors should be aware that the value of shares can rise or fall and that there may not be proper information available for determining the market value of an investment in the Company at all times.

An investment in a share which is traded on AIM, such as the Ordinary Shares, may be difficult to realise and carries a high degree of risk. The ability of an investor to sell Ordinary Shares will depend on there being a willing buyer for them at an acceptable price. Consequently, it might be difficult for an investor to realise his/her investment in the Company and he/she may lose all of his/her investment.

AIM

There can be no assurance that an active trading market for the Ordinary Shares will be maintained. AIM is a market for emerging or smaller growing companies and may not provide the liquidity normally associated with the Official List or other exchanges.

The future success of AIM and liquidity in the market for the Ordinary Shares cannot be guaranteed. In particular, the market for the Ordinary Shares may be, or may become, relatively illiquid and therefore the Ordinary Shares may be or may become difficult to sell.

Share price volatility and liquidity

The market price of the Ordinary Shares could be subject to significant fluctuations due to a change in investor sentiment regarding the Company or the industry in which the Company operates or in response to specific facts and events, including positive or negative variations in the Company’s interim or full year operating results and business developments of the Company and/or competitors.

The market price of the existing Ordinary Shares may not reflect the underlying value of the Company and it is possible that the market price of the Ordinary Shares will trade at a discount to net asset value. Potential investors should be aware that the value of shares and the income from them can go down as well as up and that investment in a share which is traded on AIM might be less realisable and might carry a higher risk than a share quoted on the Official List.

Exploration and operational risks

The availability of a ready market for oil, gas and hydrocarbon products which may be sold by the entities in which the Company will invest depends upon numerous factors beyond its control, the exact effects of which cannot be accurately predicted. These factors (the list of which is not exhaustive) include: general economic activity, the world oil and gas prices, the marketability of the hydrocarbons produced, action taken by other producing nations, the availability of transportation capacity, the availability and pricing of competitive fuels, and the extent of governmental regulation and taxation.

All drilling activities to establish productive hydrocarbon reserves are inherently speculative and involves many risks and is frequently unsuccessful. The techniques presently available to geophysicists, geologists, petro-physicists, reservoir and petroleum engineers, and other technical specialists to identify the existence and location of accumulations of oil and gas are indirect and subject to a wide variety of variables which are subjective in nature with respect to the environment in which they exist and are not precise on their application, and therefore, a considerable amount of personal judgment is involved in the selection of any prospect for drilling or identifying potentially profitable producing hydrocarbon accumulation.

In addition, even when drilling successfully encounters oil and gas and a well is completed as a producing oil or gas well, unforeseeable operating problems may arise which render it uneconomical to produce such oil and natural gas.

There can be no assurance that any prospect drilled will result in an increase in the proven and probable reserves. If reserves are developed, it can take a number of years from the initial phases of drilling and appraisal operations until production is possible, during which time the economic feasibility of production may change. Substantial expenditures are required to establish reserves through drilling.

As a result of these uncertainties, no assurance can be given that any exploration programmes will result in any new commercial development operations being brought into operation.

Historical facts, information gained from historic experience, present facts, circumstances and information, and assumptions from all or any of these are not a guide to the future. Aims, targets, plans and intentions referred to herein are no more than that and do not imply forecasts.

Price of crude oil and gas

The sale of oil and gas is likely to be the investments entities’ primary source of revenue and such revenues are linked to the price of crude oil and gas which are affected by a variety of factors beyond their control. Therefore, the business, prospects, financial condition and results if operations are heavily dependent on prevailing crude oil and gas prices. Historically, crude oil and gas prices have been highly volatile. Any declines in oil and gas prices could adversely affect the business, prospects, financial condition and results of operations.

Lower crude oil and gas prices may reduce the amount of oil and gas that the investment entity is able to produce economically or may reduce the economic viability of the production levels of specific wells or of projects planned or in development because production costs would exceed anticipated income from such production.

Prices for oil and gas are subject to large fluctuations in response to a variety of factors beyond the entity’s control, including:

  • changes in the supply of and demand for oil and gas;
  • market uncertainty and speculative activities by those who buy and sell oil on the world markets;
  • effects of the world economy and of geo-political events;
  • general economic conditions;
  • actions of the Organisation of Petroleum Exporting Countries;
  • government regulation;
  • political stability in oil producing regions; and
  • availability of alternate fuel sources

Oil and gas reserve estimates

There are numerous uncertainties inherent in estimating the quantity and the quality of reserves and in projecting future rates of production, including many factors beyond the entity’s control. Estimating the amount and quality of oil and gas reserves is a subjective process and estimates made by different experts often vary significantly. In addition, results of drilling, testing and production subsequent to the date of an estimate may result in revisions to that estimate. Accordingly, reserves estimates may be different from the quantity or quality of crude oil and gas that is ultimately recovered and, consequently, the revenue therefrom could be less than that currently expected. The significance of such estimates is highly dependent upon the accuracy of assumptions on which they are based, the quality of the information available and the ability to verify such information against industry standards.

The reserves data are estimates only and should not be construed as representing exact quantities. These estimates are based on production data, prices, costs, ownership, geological and engineering data, and other assembled information. These assumptions may prove to be incorrect and potential investors should not place undue reliance on the forward looking statements contained herein concerning the reserves or future production levels.

If the assumptions upon which the estimates of reserves of crude oil or gas have been based are wrong, the entity may be unable to produce the estimated levels or quality of crude oil or gas and the business, prospects, financial condition or results of operations could be materially and adversely affected. In addition, if oil and gas prices fall, some of the reserves may not be commercially viable to extract.

Drilling and production risks

Future success will depend, in part, on the entity’s ability to develop existing oil and gas reserves in a timely and cost-effective manner using secondary, enhanced recovery and well stimulation techniques.

Drilling activities may be unsuccessful and the actual costs incurred of drilling, operating wells and completing well workovers may exceed budget. The entity may be required to curtail, delay or cancel any drilling operations because of a variety of factors, including unexpected drilling conditions, pressure or irregularities in geological formations, equipment failures or accidents, adverse weather conditions, compliance with governmental requirements and shortages or delays in the availability of drilling rigs and the delivery of equipment. The occurrence of any of these events could have a material adverse effect on the business, prospects, financial condition and results of operations. Specifically, secondary recovery and well stimulation techniques may not work due to factors or operational difficulties unknown.

The production operations are also subject to all the production hazards typically associated with the production of crude oil and gas resources. These risks include natural catastrophe, fire, explosion, blowouts, encountering formations with abnormal pressure, the use of secondary recovery techniques, the level of water cut, cratering and oil spills, each of which could result in substantial damage to oil wells, producing facilities, other property and the environment or in personal injury. Any of these risks could result in loss of crude oil and gas or could lead to environmental pollution and other damage to the properties or surrounding areas and increase cost.

Environmental factors

Operations will be subject to environmental regulation (including regular environmental impact assessments and permitting) in all the jurisdictions in which the entity operates. Such regulation covers a wide variety of matters, including, without limitation, prevention of waste, pollution and protection of the environment, labour regulations and worker safety.

Future capital requirements

There can be no assurances that future capital requirements can be obtained on favourable terms.

The Group maintains insurance in respect of its Directors and Officers against liabilities in relation to the Company.

The Group finances its operations through equity and holds its cash as a liquid resource to fund the obligations of the Group. Decisions regarding the management of these assets are approved by the Board.

The Board has adopted a Share Dealing Code that applies to Director, senior management and any employee who is in possession of ‘inside information’. All such persons are prohibited from trading in the Company’s securities if they are in possession of ‘inside information’. Subject to this condition and trading prohibitions applying to certain periods, trading can occur provided the relevant individual has received the appropriate prescribed clearance.

The Group finances its operations through equity and holds its cash as a liquid resource to fund the obligations of the Group. Decisions regarding the management of these assets are approved by the Board.