Jersey Oil and Gas : Final Results for the year ended 31 December 2019

RNS Number : 0331M

Jersey Oil and Gas PLC

06 May 2020

6 May 2020

Jersey Oil and Gas plc

("Jersey Oil & Gas", "JOG" or the "Company")

Final Results for the year ended 31 December 2019

Jersey Oil & Gas (AIM: JOG), an independent upstream oil and gas company focused on theUK Continental Shelf ("UKCS") region of the North Sea, is pleased to announce its audited results for the year ended 31 December 2019.

Highlights

• Significantly increased net discovered and recoverable resource estimates owned by the Company to more than 120 million barrels of oil equivalent ("mmboe") following transformational awards of licences in the Greater Buchan Area ("GBA") as part of theOil and Gas Authority's 31st Supplementary Offshore Licensing Round
• As part of the licence awards, the Company now owns a 100% equity interest in the Buchan field as well as the J2 and Glenn discoveries, in addition to its interest in the Verbier discovery
• Began work on a unique and major new North Sea Development Plan with a focus on delivering a low-carbon development of the GBA
• Commitment to the highest levels of environmental, social and corporate governance across the business with the Company currently looking into opportunities to achieve a low carbon emissions production facility for the GBA
• Strong year-end cash position of £12.3 million, with no debt, resulting in the Company being fully funded through concept selection and to at least the end of 2021
• Verbier Appraisal Well drilled safely and within budget, and, althoughthe well did not encounter Upper Jurassic sands as anticipated, our contingent resource estimate for the earlier Verbier discovery remain at 25 mmboe

Post year end

• Acquired an additional 70% interest in and operatorship of Licence P2170, which includes the Verbier oil discovery, increasing total 2C discovered resources across the GBA to an estimated 142 mmboe net to the Company
• The Verbier oil discovery is now a prime candidate for a tie back into the proposed GBA Hub
• Significant exploration upside across the GBA, with estimated prospective resources of 232 mmboe net to the Company
• Established the Greater Buchan Area Joint Integrated Studies Agreement between neighbouring field operators to undertake and complete technical and commercial evaluation studies for a collaborative development of the wider GBA

Outlook

• JOG has a commanding position across the prolific GBA with ownership of 5 discovered fields and 8 exploration prospects within 4 operated licences
• Project lifetime cash flows for the GBA forecast to be in excess ofUS$3bn, with an estimated project value of approximatelyUS$1.2bn
• On track to reach concept selection by Summer 2020, which will define the most prudent and commercially attractive way to achieve first oil from the GBA
• Prudent cash management being maintained
• Sales process expected to be launched post concept selection to attract a new industry partner(s) to join JOG in unlocking the potential significant value that exists within the GBA
• GBA development workstreams remain on track with the Company and contract staff working remotely in response to the COVID-19 pandemic

Andrew Benitz, CEO of Jersey Oil & Gas, commented:

"Our efforts during 2019 resulted in transformational asset growth for our Company. Our successful application in the 31 SLR has provided our business with a vastly increased portfolio and the potential to develop a highly valuable business for all of our stakeholders. The GBA Project promises to be the largest new area hub development in the UK Central North Sea in recent times.

Page 1 of 12

"The Company is currently entirely focused on the timely delivery of concept selection for this major new area hub that has the potential to create significant value for stakeholders.

"JOG has assembled a team with the right skills, experience and track record to implement its GBA development plan. I would like to thank this team for adapting seamlessly to a new remote working environment as a result of the COVID-19 pandemic, such that we continue to remain on track with our current development plans."

Enquiries:
Jersey Oil and Gas plc	Andrew Benitz, CEO	C/o Camarco:
		Tel: [phone]
Strand Hanson Limited	James Harris	Tel: [phone]
	Matthew Chandler
	James Bellman
Arden Partners plc	Paul Shackleton	Tel: [phone]
	Benjamin Cryer
BMO Capital Markets	Jeremy Low	Tel: [phone]
Limited	Tom Rider
Camarco	Billy Clegg	Tel: [phone]
	James Crothers

Notes to Editors:

Jersey Oil & Gas is a UK E&P company focused on building an upstream oil and gas business in theNorth Sea. The Company holds a significant acreage position within the Central North Sea referred to as the GreaterBuchan Area, which includes operatorship and 100% working interests in blocks that contain the Buchan oil field and J2 and Glenn oil discoveries, and, following the acquisition of an additional 70% working interest announced in late January 2020 will, subject to completion, also assume operatorship of and hold an 88% working interest in the P2170 Licence, Blocks 20/5b & 21/1d, that contains the Verbier oil discovery.

JOG's acreage is estimated by management to contain more than 140 million barrels of oil equivalent ("boe") of discovered mean recoverable resources net to JOG, in addition to significant exploration upside potential. JOG is currently progressing the concept select phase of a Field Development Plan ("FDP") for the Greater Buchan Area.

JOG is focused on delivering shareholder value and growth through creative deal-making, operational success and licensing rounds. Its management is convinced that opportunity exists within the UK North Sea to deliver on this strategy and the Company has a solid track-record of tangible success.

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation (EU) No. 596/2014.

CHAIRMAN'S STATEMENT

Overview

This past year has been an exceptional one forJersey Oil and Gas ('JOG'). We started the year with an inventory of less than 5 million barrels of oil equivalent ('mmboe') discovered recoverable resources net to our 18% interest in the Verbier discovery located on Licence P2170. The year had potential for growth given we had an appraisal well planned at Verbier and were participating in the OGA's 31st Supplementary Offshore Licensing Round ('31 SLR'). We ended the year with more than 120 mmboe of discovered recoverable oil equivalent resources net to JOG. Post year end we took this figure to over 140 mmboe with our acquisition of Equinor's interest in Licence P2170 (Verbier), representing a 30-fold increase on our 2019 starting position, which was a transformational result for JOG.

For much of 2018 and the first half of 2019, we were working extensively on our application for further licence interests under the 31 SLR, a round solely dedicated to what is known as the Greater Buchan Area ('GBA'). I am glad to report that as a result of the JOG team's well thought out strategy, and planning detail for the development of the GBA, in July 2019 the Oil and Gas Authority ('OGA') announced the award to JOG of two licences in the GBA surrounding our Verbier discovery. A further acreage award was made in August 2019, resulting in a total of three licence awards and four blocks, with each licence awarded on a 100% equity interest basis. Against this backdrop, the Verbier appraisal well drilled in 2019, did not encounter the anticipated Upper Jurassic sands. This was an unexpected result for us and, as a result, we lowered our estimate of gross recoverable resources for the Verbier discovery down to the lower end of the initial resource estimate of 25 mmboe (as estimated by Equinor following the initial discovery well result in October 2017). Nonetheless, in our view there remains significant prospectivity (>160 mmboe gross) across the P2170 licence area and, subsequent to the year end, we were pleased to have acquired an additional 70% interest in this licence, bringing our total interest in Licence P2170 up to 88% on completion. This is particularly important to JOG given that Verbier and any other discoveries in the licence are within the heart of the GBA and therefore will be prime candidates for tying back to the planned Buchan hub, for which we are currently working on the concept select phase of this new development project.

Economic Environment

For 2019, Brent Crude Oil started the year trading at a price of approximately$52 per barrel and ended the year at a price of$65 per barrel, with a sizeable level of volatility in the second half of the year. Since then the spot oil price has fallen dramatically as a result of falling demand due to the Covid-19 outbreak and excess supply notwithstanding cuts from OPEC+. At the end of April 2020 Brent was trading at around$23 per barrel.

As regards our own position, we do not currently have any production, nor do we have any debt. First oil from the GBA development project is currently planned for 2025 and we, along with all the major market commentators, believe that the effects of both the Covid-19 outbreak and the current reduction in demand for oil will have ended by that time, with the Brent spot price returning to materially higher levels. At the end of April 2020, the January 2025 forward price for Brent was approximately$48 per barrel with prices increasing for longer term contracts and many market commentators looking at forward prices of $60+.

As a result, we believe the best course of action is to carry on with the various workstreams needed to take the GBA project through, and past, the Concept Select phase.

Environmental, Social and Corporate Governance

We continue to embrace the energy transition and fully support theUK Government's commitment to net zero emissions by 2050, which the OGA are integrating into their regulatory policies. Nonetheless, we believe that these initiatives will take time to implement and that in the interim oil and gas will continue to be a vital part of the UK and broader global energy mix. Our role in this process is therefore to provide our energy product in a way that is best in class for both operational issues, such as health and safety, environmental compliance and our workplace needs and for longer term issues such as reducing the climate change risks associated with our business, in addition to reducing the carbon emissions from developing the GBA. With a new greenfield development in the North Sea, we are well placed to use the latest engineering and operational techniques to bring down its carbon emissions, in a safe and efficient manner.

Our maiden statement on JOG's approach to Environmental, Social and Governance matters is set out in the full Annual Report.

During 2018 we adopted the Quoted Companies Alliance Corporate Governance Code, which codifies our belief that a strong and transparent

Page 2 of 12

governance policy is a key ingredient to our success. Underlying this approach is the recognition that good corporate governance is based on culture rather than procedure. A separate report on the principles that we strive to implement, without constraining the entrepreneurial spirit in which the Company was created, is also set out in the full Annual Report.

The Covid-19 Virus Outbreak

As will be well understood by all, countries, businesses, organisations, individuals and families are having to change the way they operate and behave following the Covid-19 virus outbreak. As a company, we continue to place the highest priority on the safety and wellbeing of our employees. As a result, all of our employees now work from home and will continue to do so until it is safe for them to return to an office environment.

This work from home approach is working well, with all employees continuing with their respective workstreams remotely, alongside a similar approach being adopted by our contractors. We currently see the GBA Concept Select key stages largely proceeding to their original timelines of summer 2020, although this may change, depending on how events unfold.

Outlook

JOG ended 2019 in a strong position, with substantial contingent and prospective reserves, which were then increased through the 2020 acquisition of an additional 70% interest in Licence P2170 (Verbier). The GBA licences, which can now be regarded as including the Verbier licence area, should generate substantial cash flows once we reach first oil, which we currently estimate to be in 2025. We are moving ahead, at speed, through the planning phases of this development and, at the time of this statement, we will be approaching the concluding parts of the Concept Select phase. Nonetheless, the costs of developing the GBA area will be substantial and once we have passed through the key stages of Concept Select we will launch a process to attract industry partners and additional providers of capital in order to advance this important project, taking into account market conditions at that time.

We very much hope that the Covid-19 outbreak will pass, in due course. In the interim the safety of our employees remains our highest priority.

We believe that the current historically low oil price is not sustainable and that by the time we reach first oil for the GBA development project, oil prices will have returned to substantially higher levels, in part due to underinvestment in conventional growth projects.

On behalf of the Board, I would like to thank all of our employees, both old and new, for the continuing hard work that is being put into the development of the GBA, with all of us now working in difficult circumstances, outside of our normal office environment.

As always, I would also thank our Shareholders for their continuing support.

Marcus Stanton

Non-Executive Chairman

6 May 2020

CHIEF EXECUTIVE OFFICER'S REPORT

Our efforts during 2019 resulted in transformational asset growth for our Company. Our winning application in the 31 SLR has provided our business with a vastly increased portfolio and the potential to develop a highly valuable business for all of our stakeholders. The GBA Project promises to be the largest new area hub development by reserves in the UK Central North Sea in recent times. JOG is now focused on the timely delivery of selecting the development concept for this major new area hub development that has an estimated current project value of $1.2 bn. and has the potential to deliver free cash flow in excess of $3 bn.

Having grown our discovered oil resources 30-fold, we are now operating a project which is estimated to contain net to JOG approximately 140 million barrels of discovered and recoverable oil and over 200 million barrels of highly prospective exploration upside. At the core of the GBA is the Buchan oil field that benefits from 36 years of production history and once production resumes on this field we estimate more than 80 million barrels of oil is yet to be recovered from this remarkable field, that was often referred to as the field that kept on delivering. We are making excellent progress on defining not only the core hub volumes that JOG owns, but also third-party regional volumes. We have established and are leading the Greater Buchan Area Joint Integrated Studies Agreement ('JISA'). This agreement, between neighbouring field operators, will see JOG undertake and complete technical and commercial evaluation studies for a collaborative development of the wider GBA, together with other regional operators. The wider area contains discovered oil and gas resources in excess of 200 million barrels of oil equivalent.

A key objective of the JISA is to establish whether a collaborative development involving regional field operators would lead to a single new production hub in the area, potentially reducing development costs for all of the operators and delivering on the OGA's objective of Maximising Economic Recovery ('MER').

Our industry is at an inflexion point with respect to energy transition. We believe that oil and gas will remain an important part of theUK's energy mix for the foreseeable future and projects such as GBA will be a vital resource for retaining the UK's energy security as we transition to net zero. It is JOG's vision to provide cleaner, safer energy in the most responsible way. JOG is now a proud signatory of the United Nations Global Compact, the world's largest corporate sustainability initiative. We have put energy transition at the forefront of our strategic thinking, seeing this as an opportunity rather than a challenge, with the potential to unlock significant value in the GBA for JOG.

Financial Results

JOG continues to benefit from a straightforward capital structure, with a strong cash position that more than covers our current contracted work programme for the Concept Select phase of the GBA Project. We have no debt and no decommissioning liabilities. Our pre-tax loss for the year amounted to £2.1m as compared to a£2.0m loss in 2018.

Cash at year end was£12.3m, down from £19.8m at the end of 2018, largely due to our share of the costs of drilling the Verbier appraisal well in 2019.

JOG remains fully funded to deliver the Concept Select work we are progressing on our GBA development and we have implemented cost saving initiatives to cut our 2020 budget guidance by more than £3m from £10.6m to £7.5m. The Company has sufficient working capital through to at least the end of 2021, prior to any proceeds from our planned sale of a part interest in our GBA Project, the process for which is expected to be launched later this year. Cost control continues to be monitored closely by our Board.

People

We continue to build a strong and focused team in order to progress the development of theGBA Project through to first oil or, more accurately, second oil, given the Buchan field's production history. These talented industry professionals bring many skills to JOG ranging from extensive North Sea relevant field development experience through to expertise in health, safety, environment and social responsibility matters. The project team's experience has been gained from working on projects including Buzzard, Golden Eagle, Tolmount, Gannett and Goliat. This is further supplemented through the extensive project development track record of our recently appointed Board adviser. We welcome all of these individuals into the Company. We have also leased some new office space in London which enables our UK-based employees to work from the same location.

Looking Forward

Notwithstanding the very real challenges that Covid-19 is providing, JOG remains committed to building a profitable, full-cycle upstream oil and gas business. Fortunately the Government lockdown is having minimal impact on our activities, which are continuing apace despite working remotely.

JOG has delivered the GBA opportunity with a nimble and creative team, with a philosophy of a can-do attitude. We are building out the team capabilities with a broad range of industry and commercial skills and we are well placed to move forward and create further value for our Shareholders.

We are pleased to be active in an area where there is a proactive, industry facing regulator, the OGA, and we are fully aligned with the OGA's objective of MER, evidenced through our approach to progressing area collaboration initiatives across the wider GBA.

JOG has a very low current and historic carbon footprint. We have an opportunity to showcase theGBA Project as a low carbon, sustainable development and highlight JOG as a leader in the UKCS on sustainability. We fully embrace the UK Government's initiative to be carbon net zero by 2050 and are actively investigating energy transition initiatives such as platform electrification and see the potential for the GBA Project to not only be a new production hub, but potentially also a power hub. We are well placed to progress our development plans through Concept Select, before launching a

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process later this year to attract industry partners to join us in unlocking the significant value that exists within the GBA.

We are making good progress to deliver on our strategy, while adapting to an investment environment that is changing fast. We have an excellent team at JOG and I would like to thank them all for their continued dedication and relentless commitment to advancing our activities across our asset base.

Andrew Benitz

Chief Executive Officer

6 May 2020

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

For the year ended 31 December 2019

	Note	2019		2018
	£		£
Revenue	3	-		-
Cost of sales		(666,053)		(609,925)
GROSS LOSS		(666,053)		(609,925)
Other income	6	750,000		12,037
Loss on sale of assets		(17,975)		-
Administrative expenses		(2,237,429)		(1,447,383)
OPERATING LOSS		(2,171,457)		(2,045,271)
Finance income	7	106,867		48,971
Finance expense	7	(419)		-
LOSS BEFORE TAX	8	(2,065,009)		(1,996,300)
Tax	9	-		-
LOSS FOR THE YEAR		(2,065,009)		(1,996,300)
TOTAL COMPREHENSIVE LOSS FOR THE YEAR		(2,065,009)		(1,996,300)
Total comprehensive loss for the year attributable to:		(2,065,009)		(1,996,300)
Owners of the parent
Loss per share expressed in pence per share:	10	(9.46)		(9.15)
Basic
Diluted	10	(9.46)		(9.15)

The total comprehensive loss for the year was derived wholly from continuing operations.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

As at 31 December 2019

		2019		2018
	Note	£		£
NON-CURRENT ASSETS	11	10,092,564		4,306,589
Intangible assets
Property, plant and equipment	12	13,661		30,264
Right-of-use assets	13	164,125		-
Deposits			28,420		-
		10,298,700		4,336,853
CURRENT ASSETS	14	428,310		80,594
Trade and other receivables
Cash and cash equivalents	15	12,318,536		19,782,511
		12,746,846		19,863,105
TOTAL ASSETS		23,045,616		24,199,958
EQUITY	16	2,466,144		2,466,144
Called up share capital
Share premium account	20	93,851,526		93,851,526
Share options reserve	1,928,099		1,491,019
Accumulated losses		(75,727,888)	(73,662,879)
Reorganisation reserve			(382,543)	(382,543)
TOTAL EQUITY			22,135,338		23,763,267
LIABILITIES
NON-CURRENT LIABILITIES	18		154,208		-
Lease Liabilities
			154,208		-
CURRENT LIABILITIES	17	742,166		436,691
Trade and other payables
Lease Liabilities	13		13,904		-
			756,070		436,691
TOTAL LIABILITIES		910,278		436,691
TOTAL EQUITY AND LIABILITIES
	23,045,616		24,199,958

Vicary Gibbs

Chief Financial Officer

6 May 2020

Company Registration Number: 07503957

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended 31 December 2019

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	Called up	Share	Share	Accumulated Reorganisation	Total
	share	premium	options
	capital	account	reserve	losses	reserve	equity
	£		£		£		£		£		£
At 1 January 2018	2,466,144		93,851,526	1,231,055		(71,666,579)	(382,543)	25,499,603
Loss and total
comprehensive loss for the	-	-	-	(1,996,300)		-	(1,996,300)
year
Share-based payments	-	-	259,964	-	-	259,964
At 31 December 2018 and
2,466,144		93,851,526	1,491,019		(73,662,879)	(382,543)	23,763,267
1 January 2019
Loss and total
comprehensive loss for the	-	-	-	(2,065,009)		-	(2,065,009)
year
Share-based payments	-	-	437,080	-	-	437,080
At 31 December 2019	2,466,144 93,851,526 1,928,099 (75,727,888)		(382,543)		22,135,338

The following describes the nature and purpose of each reserve within owners' equity:

Reserve	Description and purpose
Called up share capital	Represents the nominal value of shares issued
Share premium	Amounts subscribed for share capital in excess of nominal value
account	Represents the accumulated balance of share-based payment charges
Share options reserve
	recognised in respect of share options granted by the Company less
	transfers to accumulated deficit in respect of options exercised or
Accumulated losses	cancelled/lapsed	in the	Consolidated Statement	of
Cumulative net gains and losses
Reorganisation reserve	Comprehensive Income
Amounts resulting from the restructuring of the Group at the time of
	the Initial Public Offering (IPO) in 2011
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2019
		Note	2019		2018
Cash flows from operating activities	£		£
22	(1,769,004)		(2,698,361)
Cash used in operations
Net interest received		7	106,867		48,971
Net interest paid		7		(419)			-
Net cash used in operating activities		(1,662,556)			(2,649,390)
Cash flows from investing activities		3,603	-
Proceeds on sale of tangible assets	11
Purchase of intangible assets	(5,785,975)	(2,948,630)
Purchase of tangible assets	12		(19,047)			(34,879)
Net cash used in investing activities		(5,801,419)			(2,983,509)
Net cash generated from financing activities			-			-
Decrease in cash and cash equivalents	22	(7,463,975)		(5,632,899)
Cash and cash equivalents at beginning of year	22	19,782,511			25,415,410
Cash and cash equivalents at end of year	22	12,318,536			19,782,511

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the year ended 31 December 2019

1. GENERAL INFORMATION

Jersey Oil and Gas plc (the "Company") and its subsidiaries (together, the "Group") are involved in the upstream oil and gas business in the UK.

The

Company

is

a

public

limited

company

incorporated

and

domiciled

in

the

United

Kingdom

and

quoted

on

AIM,

a

market

operated by London Stock Exchange plc. The address of its registered office is 10 The Triangle, ng2 Business Park, Nottingham, NG2 1AE.

2. SIGNIFICANT ACCOUNTING POLICIES

applied

in

the

preparation

of

these

consolidated

financial

statements

are

set

out

below.

These

The

principal

accounting

policies

policies have been consistently applied to all the periods presented, unless otherwise stated.

Basis of Accounting

statements

have

been

prepared

under

the

historic

cost

convention,

in

accordance

with

International

Financial

These

financial

Reporting

Standards

and

IFRS

IC

interpretations

as

adopted

by

the

European

Union

("IFRSs")

and

with

those

parts

of

the

Companies

Act 2006 applicable to companies reporting under IFRS.

Going Concern

is

required

to

have

sufficient

resources

to

cover

the

expected

running

costs

of

the

business

for

a

period

of

at

least

The

Company

12

months after

the

issue

of

these

financial

statements.

Further to

completion

of

the

detailed

studies

of

in connection

with

the

GBA

Concept

Select

contracted

work

programmes,

there

are

currently

no

is

firm

work

commitments

on

any

the

Group's

licences,

other

than ongoing Operator overheads and licence fees. Other work that the Company

undertaking

in respect

of

the

GBA

licences

and surrounding areas is modest

relative

to

its

its

current

cash

reserves.

The

Company's

current

cash

reserves

are

therefore

expected

to

more

than

exceed

estimated

liabilities

for

at

least

12 months

following

the

date of

issue

of

the

financial

statements.

Based on

these circumstances, the Directors have considered it appropriate to adopt the going concern basis of accounting in preparing the Company's consolidated financial statements.

Changes in Accounting Policies and Disclosures

(a) New and amended standards adopted by the Company:

At the start of the year the following standards were adopted:

• IFRS 16, 'Leases';
• Prepayment Features with Negative Compensation - Amendments to IFRS 9;
• Long-termInterests in Associates and Joint Ventures - Amendments to IAS 28;
• Annual Improvements to IFRS Standards 2015-2017 Cycle;
• Plan Amendment, Curtailment or Settlement - Amendments to IAS 19; and
• Interpretation 23 'Uncertainty over Income Tax Treatments'.

The Group had to change its accounting policies as a result of adopting IFRS

16. From 1 January 2019, leases are

recognised

as a

right-of-use asset

and a

corresponding

liability

at

the

date

at

which

the

leased

asset

is

available

for

use

by

the

Group.

The

Group

adopted the

practical

expedient

available

to not

apply

IFRS

16 to

leases

less

than £5,000

in

value

or less

than

12

month in

lease

Page 5 of 12

term. The other amendments listed above did not have any impact on the amounts recognised in prior periods. At 1 January 2019 the Group had no lease arrangements applicable for IFRS 16 so no transition adjustment was recognised.

(b)

Certain

new

accounting

standards

and

interpretations

have

been

published

that

are

not

mandatory

for

31

December

2019

reporting periods and have not been early

adopted by the Group. These standards are

not

expected to have a

material

impact

on the

entity

in

the

current

or

future reporting periods and on foreseeable future transactions.

Significant Accounting Judgements and Estimates

requires

management

to

make

estimates

and

assumptions

that

affect

the

reported

The

preparation

of

the

financial

statements

amounts of revenues, expenses, assets and

liabilities at

the date of

the financial

statements. If

in future

such

estimates

and assumptions, which

are

based

on

management's best judgement at the date

of the financial statements, deviate from

the

actual

circumstances,

the original estimates and assumptions will be

modified as appropriate in the period in which the circumstances change. The Group's accounting policies make use of accounting estimates and judgements in the following areas:

• The assessment of the existence of impairment triggers (note 11).
• The estimation of share-based payment costs (note 20).

Impairments

tests

its

capitalised

exploration

licence

costs

for

impairment

when

facts

and

circumstances

suggest

that

the

carrying

The

Group

amount exceeds the recoverable amount. The recoverable amounts of Cash Generating Units are determined based on fair value less costs of disposal calculations. There

were no

impairment triggers in 2019 and no impairment charge has been recorded.

Share-Based Payments

has

a

number

of

share

schemes

that

give

rise

to

share-based

charges.

The

charge

to

operating

profit

for

The

Group

currently

these

schemes

amounted

to

£437,080

(2018:

£259,964). For the

purposes

of

calculating the

fair

value

of

the

share

options,

a

Black-

Scholes option

pricing

model has been used. Based on

past

experience,

it has

been assumed that options

will

be

exercised,

on

average,

at

the

mid-

point between vesting and expiring. The share price volatility used in the calculation is based on the actual volatility of the Company's shares, since 1 January 2017. The

risk-

free rate of return is based on the implied yield available on zero coupon gilts with a term remaining equal to the expected lifetime of the options at the date of grant.

Basis of Consolidation

(a) Subsidiaries

entities

over

which

the

Group

has

the

power

to

govern

their

financial and operating

policies

generally

accompanying

a

Subsidiaries

are all

shareholding

of

more

than one half of the

voting

rights.

The existence

and

effect of

potential voting

rights

that are currently

exercisable

or

convertible

are

considered

when

assessing

whether

the

Group

controls

another

entity.

The

Group

also

assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of

de facto control. De

facto

control

may

arise

in

circumstances

where

the

size

of

the

Group's

voting

rights relative to the size and dispersion of holdings of other Shareholders give the Group the power to govern the financial and operating policies.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date the Group ceases to have control.

The Group applies the acquisition method of

accounting to

account for business combinations. The consideration

transferre d for the

acquisition of

a

subsidiary

is

The

the

fair

value

of

the

assets

transferred,

the

any

liabilities

incurred

and

the

equity

interests

issued

by

the

Group.

consideration

transferred

includes

the

fair

value

of

asset

or

liability

resulting

from

a

contingent

consideration

arrangement.

Identifiable

assets

acquired

and

liabilities

and

contingent

liabilities

assumed

in

a

business

combination

are

measured

initially at their fair value at the acquisition date. The Group recognises

any non-controlling interest in the acquiree on an acquisition- by-acquisition basis, either at fair value or

at the non-controlling interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets.

Acquisition related costs are expensed as incurred.

If the

business

combination

is

achieved

in stages,

the

acquisition

date

fair

value

of

the

acquirer's

previously held

equity

interest

in

the acquiree is remeasured to fair value at the acquisition date through profit or loss.

Any

contingent

consideration

to

be

transferred

by

the

Group

is

recognised

at

fair

value

at

the

acquisition

date.

Subsequent

changes to the fair value of the contingent consideration that is deemed to be an asset or liability are recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.

Goodwill

is

initially

measured

as

the

excess

of

the

aggregate

of

the

consideration

transferred

and

the

fair

value

of

non-controlling

interest

over

the

net identifiable

assets

acquired

and

liabilities

assumed. If

this

consideration

is

lower

than

the

fair

value

of

the

net

assets of the subsidiary acquired, the difference is recognised in profit or loss.

Inter-company transactions, balances, income and expenses on

transactions

between Group companies are eliminated. Profits

and losses resulting from inter-

company

transactions

that

are

recognised

in

assets

are

also

eliminated.

Accounting

policies

of

subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

(b) Changes in ownership interests in subsidiaries without change of control

in

loss

of

control

are

accounted

for

as

equity

transactions

-

that

is,

Transactions

with

non-controlling

interests

that

do

not

result

as

transactions with

the

owners

in

their capacity as

owners.

The

difference

between

fair

value

of

any

consideration

paid

and

the

relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(c) Disposal of subsidiaries

to

have

control

any

retained

interest

in

the

entity

is

remeasured

to

its

fair

value

at

the

date

when

control

When

the Group

ceases

is

lost,

with

the

change

in

carrying

amount

recognised

in

profit

or

loss.

The

fair value is

the

initial

carrying

amount

for

the

purposes

of

subsequently

accounting

for

the

retained

interest

as

an

associate,

joint

venture

or

financial

asset.

In

addition,

any

amounts

previously recognised in other comprehensive income in respect

of that entity are accounted for as if the Group had directly

disposed of

the

related

assets

or

liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

Acquisitions, Asset Purchases and Disposals

Acquisitions of oil and gas properties are accounted for under the purchase method where the acquisitions meet the definition of a business combination.

Transactions involving the purchase of an individual field interest, farm-ins,farm-outs, or acquisitions of exploration and evaluation licences for which a development decision has not yet been made that do not qualify as a business combination, are treated as asset purchases. Accordingly, no goodwill or deferred tax arises. The purchase consideration is allocated to the assets and liabilities purchased on an appropriate basis. Proceeds on disposal (including farm-ins/farm-outs) are applied to the carrying amount of the specific intangible asset or development and production assets disposed of and any surplus is recorded as a gain on disposal in the Consolidated Statement of Comprehensive Income.

Exploration and Evaluation Costs

The Group accounts for oil and gas exploration and evaluation costs using IFRS 6 "Exploration for and Evaluation of Mineral Resources". Such costs are initially capitalised as Intangible Assets and include payments to acquire the legal right to explore, together with the directly related costs of technical services and studies, seismic acquisition, exploratory drilling and testing. The Group only capitalises costs as intangible assets once the legal right to explore an area has been obtained. The Group assesses the intangible assets for indicators of impairment at each reporting date.

Potential indicators of impairment include but are not limited to:

a. t he period for which the Group has the right to explore in the specific area has expired during the period or will expire in the near future, and is not expected to be renewed.

1. substantive expenditure on further exploration for and evaluation of oil and gas reserves in the specific area is neither budgeted nor planned.
2. exploration for and evaluation of oil and gas reserves in the specific area have not led to the discovery of commercially viable quantities of oil and gas reserves and the entity has decided to discontinue such activities in the specific area.

d.	sufficient data exists to indicate that, although a development in the specific area is likely to proceed, the carrying amount of the
	exploration and evaluation asset is unlikely to be recovered in full from successful development or by sale.

In the event an impairment trigger is identified the Group performs a full impairment test for the asset under the requirements of IAS 36 Impairment of assets. An impairment loss is recognised for the amount by which the exploration and evaluation assets' carrying amount exceeds their recoverable amount. The recoverable amount is the higher of the exploration and evaluation assets' fair value less costs to sell and their value in use.

Cost of Sales

Within the statement of comprehensive income, costs directly associated with generating revenue are included in cost of sales. The Group only capitalises costs as intangible assets once the legal right to explore an area has been obtained, any costs incurred prior to the date of acquisition are recognised as cost of sales within the Statement of Comprehensive Income.

Property, Plant and Equipment

Property, plant and equipment is stated at historic purchase cost less accumulated depreciation. Asset lives and residual amounts are reassessed each year. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its intended use.

Depreciation on these assets is calculated on a straight-line basis as follows:

-

Computer & office equipment

3 years

Leases

Until this financial year, leases of property, plant and equipment were classified as either finance leases or operating leases. From 1 January 2019, leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset is available for use by the Group.

Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present value of the following lease payments:

• fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the commencement date;
• amounts expected to be payable by the Group under residual value guarantees;
• the exercise price of a purchase option if the Group is reasonably certain to exercise that option; and
• payments of penalties for terminating the lease, if the lease term reflects the Group exercising that option.

Page 6 of 12

Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.

The

lease payments

are

discounted

using

the interest rate implicit in the

lease.

If

that

rate

cannot b

e readily

determined,

which

is

generally

the

case

for

leases

in

the

Group,

the

lessee's

incremental

borrowing

rate

is

used,

being

the

rate

that

the

individual

lessee

would have to pay to borrow the

funds necessary to obtain an

asset

of

similar

value

to

the right-of-use

asset

in

a

similar

economic

environment with similar terms, security and conditions.

To determine the incremental borrowing

rate, the Group where possible,

uses recent third-party financing received

by

the

individual lessee

as a

starting point, adjusted to reflect changes in financing conditions since third party financing was received.

Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.

Right-of-use assets are measured at cost comprising the following:

• the amount of the initial measurement of lease liability;
• any lease payments made at or before the commencement date less any lease incentives received;
• any initial direct costs; and
• restoration costs.

Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying asset's useful life.

Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognised on a straight-line basis as an expense in profit or loss. Short- term leases are leases with a lease term of 12 months or less. Low-value assets comprise any lease with a value of £5,000 or less.

Joint Ventures

participates

in

joint

venture/operation

agreements

with

strategic

partners.

The

Group

accounts

for

its

share

of

assets,

The

Group

liabilities,

income

and

expenditure

of

these

joint

venture

agreements

and

discloses

the

details

in

the

appropriate

Statement

of

Financial Position and Statement of Comprehensive Income headings in the proportion that relates to the Group per the joint venture agreement.

Investments

Fixed asset investments in subsidiaries are stated at cost less accumulated impairment in the Company's Statement of Financial

Position and reviewed for impairment if there are any indications that the carrying value may not be recoverable.

Financial Instruments

financial

liabilities

are

recognised

in

the

Group's

Statement

of

Financial

Position

when

the

Group

becomes

Financial

assets

and

party to the contractual provisions of the instrument. The Group does not have any derivative financial instruments.

Cash and cash equivalents include cash in hand and deposits held on call with banks with a maturity of three months or less.

Trade

receivables

are

recognised

initially

at

fair

value

and

subsequently

measured

at

amortised

cost

using

the

effective

interest

method, less any expected credit loss. The Company

recognises an allowance for expected credit losses (ECLs)

for all debt instruments not held at fair value through profit or

loss.

ECLs

with

are

based

on

the

difference

between

the

contractual

cash

an

flows

due

in

accordance

the

contract

and all

the

cash

flows

that

the

Company

expects

to

receive,

discounted

at

approximation

of

the original effective interest rate. The carrying amount of the asset

is reduced

through

the

use of

an allowance account, and the amount

of the loss will be

recognised

in

the

Consolidated

Statement

of

Comprehensive

Income

within

administrative

expenses.

Subsequent recoveries of amounts previously provided for are credited against administrative expenses in the Consolidated Statement of Comprehensive Income.

Trade payables are stated initially at fair value and subsequently measured at amortised cost.

Exceptional Items

are

disclosed

separately

in

the

financial

statements

where

it

is

necessary

to

do

so

to

provide

further

Exceptional

items

understanding of the financial performance of the Group. They are material items of income or expense that have been shown separately due to the significance of their nature or amount.

Deferred Tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred taxation liabilities are provided, using the liability method, on all taxable temporary differences at the reporting date. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.

Deferred income tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date.

Foreign Currencies

currency

of

the

Group

is

Sterling.

Monetary

assets

and

liabilities

in

foreign

currencies

are

translated

into

Sterling

The

functional

the

at

the

rates

of

exchange

ruling

at

the

reporting

date. Transactions

in

foreign

currencies

are

translated

into

Sterling

at

rate

of exchange ruling at the date of the transaction. Gains and losses arising on retranslation are recognised in the Consolidated Statement of Comprehensive Income for the year.

Employee Benefit Costs

Payments to defined contribution retirement benefit schemes are recognised as an expense when employees have rendered service entitling them to contributions.

Share-Based Payments

Equity settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. The total amount to be expensed is determined by reference to the fair value of the options granted:

• including any market performance conditions (for example, an entity's share price);
• excluding the impact of any service and non-market performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period); and
• including the impact of any non-vesting conditions (for example, the requirement for employees to save).

The fair value determined at

the grant date of

the equity settled share-based

payments is

expensed on

a straight

line

basis

over

the

vesting

period,

based on

the

Group's

estimate

of

equity

instruments

that

will

eventually

vest,

with

a

corresponding

increase

in

equity.

At the

end of

each

reporting

period,

the

Group

revises

its

estimate

of

the

number of

equity

instruments

expected

to

vest.

The impact of the revision of

the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised

estimate, with a

corresponding adjustment to the equity settled employee benefits reserve.

Equity settled share-based

payment

transactions

with

parties

other

than

employees

are

measured

at

the

fair

value

of

the

goods

or

services

received,

except

where

that

fair

value

cannot be

estimated reliably,

in

which

case

they

are

measured

at

the

fair

value

of

the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service.

Exercise proceeds net of directly attributable costs are credited to share capital and share premium.

Other Income

relates

to

pro c e e d s received

from

settlements

and

is

only

recognised

in

the

statement

of

comprehensive

income

Other

income

when it is virtually certain the economic benefits will flow to the Group.

Share Capital

Ordinary shares are classified as equity.

Incremental costs directly attributable to the issue of new ordinary shares or options are shown in equity as a deduction, net of tax, from the proceeds.

3. SEGMENTAL REPORTING

Operating segments are reported in a manner consistent with the internal reporting provided to the Board of Directors.

The Board considers that the Group operates in a single segment, that of oil and gas exploration, appraisal, development and production, in a single geographical location, the North Sea of the United Kingdom and do not consider it appropriate to disaggregate data further from that disclosed.

The Board is the Group's chief operating decision maker within the meaning of IFRS 8 "Operating Segments".

During 2019 and 2018 the Group

had no turnover. During the 2019 year the Group did receive £750,000 from TEPUK

in relation to TEPUK's termination of its 2013 farm-

in

to

licence

P2032

(Blocks

21/8c,

21/9c,

21/10c,

21/14a

and

21/15b),

which

has

been

recognised

in

the Income Statement as Other Income. (2018: £12,037) from carried cost reimbursements from co-venturers which is also shown in Other Income.

4. FINANCIAL RISK MANAGEMENT

The

Group's

activities

expose

it to

financial

risks

and

its overall risk management

programme

focuses

on minimising potential adverse effects

on

the

financial

performance

of

the

Group.

The

Company's

activities

are

also

exposed

to

risks

through

its

investments in subsidiaries and it is accordingly exposed to similar financial and capital risks as the Group.

Risk

management

is

carried

out

by

the

Directors

and

they

identify,

evaluate

and

address

financial

risks

in

close

co-operation

with

the

Group's

management.

The

Board

provides

written

principles

for

overall

risk

management,

as

well

as

written

policies

covering

specific areas, such as mitigating foreign exchange risks and investing excess liquidity.

Credit Risk

Page 7 of 12

The Group's credit risk primarily relates to its trade receivables. Responsibility for managing credit risks lies with the Group's management.

A

debtor

evaluation

is

typically

obtained

from

an

appropriate

credit

rating

agency.

Where

required,

appropriate

trade

finance

instruments such as letters of credit, bonds, guarantees and credit insurance will be used to manage credit risk.

The

Group

also

has

a

number

of

joint

venture

arrangements

where

co-venturers

have

made

commitments

to

fund

certain

expenditure. Management evaluate the credit risk associated with each contract at the time of signing and regularly monitor the creditworthiness of our partners.

Liquidity Risk

is the

risk

that the Group

will not

be

able

to

meet

its

financial obligations

as they

become due. The Group

manages its

Liquidity risk

liquidity

through

continuous

monitoring

of

cash

flows

from

operating

activities,

review

of

actual

capital

expenditure

programmes,

and managing maturity profiles of financial assets and financial liabilities.

Capital Risk Management

The Group seeks to maintain an optimal capital structure. The Group considers its capital to comprise both equity and net debt.

The

Group

monitors

its

capital

needs

on

the

basis

of

suitability

of

the

type

of

capital

available

at

a

given

stage

to

the

quantum

required

for

that

stage

of

its

asset

base.

Earlier

stage

assets

(pre-production)

typically

require

equity

rather

than

debt

given

the

absence

of

cash

flow

to

service

debt.

As

the

asset

mix

becomes

biased

to

production

then

typically

more

debt

is

oil

available.

The Group seeks to maintain progress in developing its assets in a timely fashion. Given the Group's current cash position is insufficient to progress

its

assets to first

it will

be

seeking to bring an industry

partner

into

its

assets in

return for

a capital (equity) contribution.

This may be in

the

form

of

either

cash

or

payment

of

some

or

all the Group's development expenditures. As the development progresses towards first oil, debt becomes available and will be sought in order

to enhance equity returns. JOG's

debt today is nil.

The

Group

monitors

its

capital

structure

by

reference

to

its

net

debt

to

equity

ratio.

Net

debt

to

equity

ratio

is

calculated

as

net debt

divided by total equity. Net debt is calculated as borrowings less cash and cash equivalents. Total equity comprises all components of equity.

The ratio of net debt to equity as at 31 December 2019 is Nil (2018: Nil).

Maturity analysis of financial assets and liabilities

Financial Assets	2019		2018
Up to 3 months	£	£
439,014		80,595
3 to 6 months	10,704		-
Over 6 months	171,137		-
	620,855		80,595
Financial Liabilities	2019		2018
Up to 3 months	£	£
718,614		436,691
3 to 6 months	1,274	-
Over 6 months	165,574		-
	885,462		436,691

5.	EMPLOYEES AND DIRECTORS	2019		2018
	Wages and salaries	£	£
	1,519,588		956,915
	Social security costs	138,859		76,119
	Share-based payments (note 20)	437,080		259,964
	Other pensions costs	31,462		66,984
		2,126,989		1,359,982

Other pension costs include employee and Company contributions to money purchase pension schemes.

	The average monthly number of employees during the year was as follows:	2019			2018
	Directors
	5		5
	Employees - Finance	1		1
	Employees - Technical	5		5
			11			`
					11
			2019				2018
	Directors' remuneration	£				£
	914,933				557,341
	Directors' pension contributions to money purchase schemes	1,012			24,702
	Benefits		13,108				2,992
			929,053				585,035
	The average number of Directors to whom retirement benefits were accruing was as follows:	2018
	Money purchase schemes		2019
	1				2
	Information regarding the highest paid Director is as follows:	2019			2018
	Aggregate emoluments and benefits	£		£
	300,500			167,800
	Share-based payment	40,810			54,088
	Pension contributions	-			7,500
			341,310			229,388
	The Directors did not exercise any share options during the year.
	Key management compensation
	Key management includes Directors (Executive and Non-Executive) and the Company Secretary in 2018. In 2019 the Company Secretarial services were outsourced following the
	retirement of this employee at the end of January 2019. The compensation paid or payable to key management for employee services is shown below:
			2019			2018
	Wages and short-term employee benefits	£		£
	917,183			584,341
	Share-based payments (note 20)	371,449			118,423
	Pension Contributions	1,262			30,702
			1,289,894			733,466
6.	OTHER INCOME	2019				2018
	Settlement agreement with Total E&P UK Limited	£				£
	750,000				-
	Carried costs reimbursement	-				12,037
	Carried costs reimbursement: Reimbursement of well-related costs received as		750,000				12,037	interest arrangement.
	a result of the carried

Settlement agreement with Total E&P UK Limited : Funds received from TEPUK in relation to TEPUK's termination of its 2013 farm-in to licence P2032 (Blocks 21/8c, 21/9c, 21/10c, 21/14a and 21/15b) received in May 2019.

7. NET FINANCE INCOME

2019	2018
£	£

Page 8 of 12

	Finance income:	106,867		48,971
	Interest received
		106,867		48,971
	Finance costs:	(419)		-
	Net finance income	106,448		48,971
8.	LOSS BEFORE TAX
	The loss before tax is stated after charging/(crediting):	2019		2018
	Depreciation tangible assets	£	£
	14,067		4,615
	Depreciation right-of-use asset	3,568	-
	Auditors' remuneration - audit of parent company and consolidation	51,800		35,000
	Auditors' remuneration - audit of subsidiaries	18,700		12,500
	Auditors' remuneration - non-audit work	-		8,700
	Foreign exchange (gain)/loss	(2,722)		9,678

9.	TAX
	Reconciliation of tax charge
		2019		2018
		£	£
	Loss before tax	(2,065,009)		(1,996,300)
	Tax at the domestic rate of 19% (2018: 19%)	(392,352)	(379,297)
	Capital allowances in excess of depreciation	(1,121,121)		(589,363)
	Expenses not deductible for tax purposes and non-taxable income	110,834		51,292
	Deferred tax asset not recognised	1,402,639		917,368
	Total tax expense reported in the Consolidated Statement of Comprehensive	-		-
	Income

No liability to UK corporation tax arose on ordinary activities for the year ended 31 December 2019 or for the year ended 31 December 2018.

The Group has not recognised a deferred tax asset due to the uncertainty over when the tax losses can be utilised. At the year end the usable tax losses within the Group were approximately £39 million.

10. LOSS PER SHARE

Basic loss per share is calculated by dividing the losses attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year.

Diluted loss per share is calculated using the weighted average number of shares adjusted to assume the conversion of all dilutive potential ordinary shares.

			Loss	Weighted
			attributable			average		Per share
				to ordinary	number
			shareholders			of		amount
	Year ended 31 December 2019	£				shares		pence
	Basic and Diluted EPS	(2,065,009)	21,829,227			(9.46)
	Basic & Diluted
	Year ended 31 December 2018
	Basic and Diluted EPS		(1,996,300)	21,829,227		(9.15)
	Basic & Diluted
11.	INTANGIBLE ASSETS
			Exploration
					costs
	COST						£
	At 1 January 2018				1,533,200
	Additions				2,948,630
	At 31 December 2018
				4,481,830
	Additions
				5,785,975
	At 31 December 2019
				10,267,805
	ACCUMULATED AMORTISATION

At 1 January 2018 Charge for the year Amortisation on disposal

At 31 December 2018

At 31 December 2019

NET BOOK VALUE

175,241

-

-

175,241

175,241

At 31 December 2019	10,092,564
At 31 December 2018	4,306,589
At 31 December 2017
1,357,959

During 2019, the Group retained an 18% equity interest in licence P2170 (Verbier) and was awarded three additional licences with 100% working interests in the OGA's 31 SLR, Licence P2498 (Buchan and J2), Licence P2499 (Glenn) and Licence P2497 (Zermatt).

In line with the requirements of IFRS 6, we have considered whether there are any indicators of impairment on the exploration and development assets. Based on our assessment, as at 31 December 2019 there are not deemed to be indicators that the licences are not commercial and the carrying value of £10,092,564 continues to be supported by ongoing exploration work on the licence area with no further impairments considered necessary.

Page 9 of 12

12. PROPERTY, PLANT AND EQUIPMENT

					Computer
					and office
					equipment
	COST				£
	At 1 January 2018				125,786
	Additions				34,879
	At 31 December 2018
				160,665
	Additions
				19,047
	Disposals				(36,130)
	At 31 December 2019
				143,582
	ACCUMULATED DEPRECIATION
	At 1 January 2018				125,786
	Charge for the year				4,615
	At 31 December 2018
				130,401
	Charge for the year
				14,067
	Disposals				(14,547)
	At 31 December 2019
				129,921
	NET BOOK VALUE
	At 31 December 2019				13,661
	At 31 December 2018				30,264
	At 31 December 2017
				-
13.	LEASES
	Amounts Recognised in the Statement of financial position	2019			2018
	Right-of-use Assets	£		£
	164,125			-
	Buildings
	Equipment	-			-
	Vehicles	-			-
	Other	-			-
		164,125			-
	Lease liabilities
	13,904			-
	Current
	Non-Current	154,208			-
		168,112			-
	On adoption of IFRS 16, the Group recognised lease liabilities in relation to leases which had previously been classified as 'operating leases' under the principles of IAS 17,
	'Leases'. These liabilities were measured at the present value of the remaining lease payments, discounted using the lessee's incremental borrowing rate as of 1 January 2019.
	The weighted average lessee's incremental borrowing rate applied to the lease liabilities on 1 January 2019 was 3%.
	At 1 January 2019 the Group held no leases which required restating.
	Amounts Recognised in the Statement of comprehensive income	2019			2018
	Depreciation charge of right-of-use asset	£		£
	3,568		-
	Buildings
	Equipment	-			-
	Vehicles	-			-
	Other	-			-
		3,568		-
	Interest expenses (included in finance cost)	(419)			-

14. TRADE AND OTHER RECEIVABLES

Current:	2019		2018
£	£
Trade receivables (net)	-		-
Other receivables	135,548		67
Value added tax	171,344		63,818
Prepayments and accrued revenue	121,418		16,709
	428,310		80,594

As at 31 December 2019 there were no trade receivables past due nor impaired. There are no expected credit losses recognised on these balances.

15. CASH AND CASH EQUIVALENTS

					2019		2018
	Unrestricted cash in bank accounts			£	£
			4,318,536		19,782,511
	Cash in 65-day notice bank accounts				-
			8,000,000
					12,318,536		19,782,511
	The cash balances are placed with a creditworthy financial institution.
16.	CALLED UP SHARE CAPITAL
	Issued and fully paid:	Class	Nominal	2019		2018
	Number:
	21,829,227	Ordinary	value	£		£
	1p	2,466,144		2,466,144
	(2018:21,829,227)

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17. TRADE AND OTHER PAYABLES

Current:	2019		2018
£	£
Trade payables	399,791		142,565
Accrued expenses	131,706		140,932
Other payables	74,298		130,905
Taxation and Social Security	136,371		22,289
	742,166		436,691

18. NON-CURRENT LIABILITIES

Non-Current:	2019		2018
£	£
Lease Liabilities	154,208		-
	154,208		-

19. CONTINGENT LIABILITY

In accordance with a 2015 settlement agreement reached with the Athena Consortium, although Jersey Petroleum Limited remains a Licensee in the joint venture, any past or future liabilities in respect of its interest can only be satisfied from the Group's share of the revenue that the Athena Oil Field generates and up to 60% of net disposal proceeds or net petroleum profits from the Group's interest in the P2170 licence which is the only remaining asset still held that was in the Group at the time of the agreement with the Athena Consortium who hold security over this asset. Any future repayments, capped at the unpaid liability associated with the Athena Oil Field, cannot be calculated with any certainty, and any remaining liability still in existence once the Athena Oil Field has been decommissioned will be written off. A payment was made in 2016 to the Athena Consortium in line with this agreement following the farm-out of P2170 (Verbier) to Equinor and the subsequent receipt of monies relating to that farm-out.

JOG is currently contesting a fee for an uplift payment of $479,240 with TGS-NOPEC Geophysical Company ASA (TGS). In February 2018 JOG licensed 185 sq km of TGS MF CFI 3D seismic data. In November 2018 the P2170 Licence Group made a mandatory relinquishment of part of the P2170 acreage including an area that subsequently became block 20/5a.

In July 2019, JOG was awarded in the 31 SLR, as part of Licence P2498, Block 20/5a. TGS consider that as a consequence of that award an uplift payment is due. JOG disputes the validity of the uplift payment given that the TGS 3D data was obtained for use by the Verbier owners for the sole purpose of locating the Verbier appraisal well. The data was not used by the Group for the 31 SLR application and the licence granted under Clause 2 of the Supplemental Agreement does not apply to individual use by JOG. The Master Licence Agreement ('MLA') between TGS and JOG applies to the use of data by a 'Related Entity', such as Jersey Petroleum Ltd, and permits its use. In the MLA the Related Entity becomes bound when it uses the data and by doing so would trigger the uplift liability. The JOG subsidiary did not use the data and so has not become bound to pay the uplift.

20. SHARE-BASED PAYMENTS

The Group operates a number of share option schemes. Options are exercisable at the prices set out in the table below. Options are forfeited if the employee leaves the Group through resignation or dismissal before the options vest.

Equity settled share-based payments are measured at fair value at the date of grant and expensed on a straight-line basis over the vesting period, based upon the Group's estimate of shares that will eventually vest.

The Group's share option schemes are for Directors, Officers and employees. The charge for the year was £437,080 (2018: £259,964) and details of outstanding options are set out in the table below.

				No. of				No. of
				shares for			Options	shares for
				which			which
	Exercise			options			lapsed/non	options
Date of	Vesting		outstanding	Options	Options	vesting	outstanding
price	Expiry date	at 1 Jan	during the	at 31 Dec
Grant	(pence)	date	2019	issued	Exercised	year	2019
Mar 2011	100	Vested	Mar 2021	3,164	-	-	-	3,164
Mar 2011	4,300	Vested	Mar 2021	5,809	-	-	-	5,809
Mar 2011	4,300	Mar 2014	Mar 2021	4,355	-	-	-	4,355
Mar 2011	4,300	Mar 2015	Mar 2021	5,809	-	-	-	5,809
Jul 2011	4,300	Jul 2011	Jul 2021	523	-	-	-	523
Jul 2011	4,300	Jul 2012	Jul 2021	523	-	-	-	523
Jul 2011	4,300	Jul 2014	Jul 2021	523	-	-	-	523
Dec 2011	2,712	Dec 2012	Dec 2021	1,650	-	-	-	1,650
Dec 2011	2,712	Dec 2014	Dec 2021	1,650	-	-	-	1,650
May 2013	1,500	May 2014	May 2023	9,500	-	-	-	9,500
May 2013	1,500	May 2015	May 2023	9,500	-	-	-	9,500
Nov 2016	110	Nov 2016	Nov 2021	246,667	-	-	-	246,667
Nov 2016	110	Nov 2017	Nov 2021	246,667	-	-	-	246,667
Nov 2016	110	Nov 2018	Nov 2021	246,667	-	-	-	246,667
Apr 2017	310	Apr 2017	Apr 2022	20,000	-	-	-	20,000
Apr 2017	310	Apr 2018	Apr 2022	20,000	-	-	-	20,000
Apr 2017	310	Apr 2019	Apr 2022	20,000	-	-	-	20,000
Jan 2018	200	Jan 2021	Jan 2025	420,000	-	-	-	420,000
Jan 2018	200	Jan 2018	Jan 2023	76,666	-	-	-	76,666
Jan 2018	200	Jan 2019	Jan 2023	76,667	-	-	-	76,667
Jan 2018	200	Jan 2020	Jan 2023	76,667	-	-	-	76,667
Nov 2018	172	Nov 2021	Nov 2025	150,000	-	-	-	150,000
Jan 2019	175	Jan 2020	Jan 2026	-	88,333	-	-	88,333
Jan 2019	175	Jan 2021	Jan 2026	-	88,333	-	-	88,333
Jan 2019	175	Jan 2022	Jan 2026	-	88,333	-	-	88,333
Jan 2019	175	Jan 2020	Jan 2024	-	11,667	-	-	11,667
Jan 2019	175	Jan 2021	Jan 2024	-	11,667	-	-	11,667
Jan 2019	175	Jan 2022	Jan 2024	-	11,667	-	-	11,667
Apr 2019	200	Jan 2021	Jan 2025		120,000		Total	120,000
							2,063,007

The weighted average fair value of options granted during the year was determined using the Black-Scholes valuation. The significant inputs into the model were the mid-market share price on the day of grant as shown above and an annual risk-free interest rate of 2%. The volatility measured at the standard deviation of continuously compounded share returns is based on a statistical analysis of daily share prices from the date of admission to AIM to the date of grant on an annualised basis. The weighted average exercise price for the options granted in 2019 was 182 pence, the weighted average remaining contractural life of the options was 5 years, the weighted average volatility rates was 62.86% and the dividend yield was nil. For schemes and scheme rules, please refer to the Remuneration Report in the full Annual Report.

21. RELATED UNDERTAKINGS AND ULTIMATE CONTROLLING PARTY

The Group and Company do not have an ultimate controlling party or parent Company.

Subsidiary	% owned	County of	Principal Activity	Registered
Incorporation	Office
Jersey North Sea Holdings Ltd	100%	England & Wales	Non-Trading	1
Jersey Petroleum Ltd	100%	England & Wales	Oil Exploration	1
Jersey E & P Ltd	100%	Scotland	Non-Trading	2
Jersey Oil Ltd	100%	Scotland	Non-Trading	2
Jersey Exploration Ltd	100%	Scotland	Non-Trading	2
Jersey Oil & Gas E & P Ltd	100%	Jersey	Management services	3

Registered Offices

• 10 The Triangle, ng2 Business Park, Nottingham, NG2 1AE
  2 6 Rubislaw Terrace, Aberdeen, AB10 1XE
  3 First Floor, 17 The Esplanade, St Helier, Jersey JE2 3QA

22. NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS RECONCILIATION OF LOSS BEFORE TAX TO CASH USED IN OPERATIONS

	2019	2018
	£	£
Loss for the year before tax	(2,065,009)	(1,996,300)

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Adjusted for:	14,067		4,615
Amortisation, impairments, depletion and depreciation
Depreciation right-of-use asset	3,568	-
Share-based payments (net)	437,080		259,964
Loss on disposal of assets	17,980		-
Finance costs	419		-
Finance income	(106,867)	(48,971)
(Increase)/Decrease in trade and other receivables	(1,698,762)		(1,780,692)
(543,829)	275,513
Increase/(Decrease) in trade and other payables	473,587		(1,193,182)
Cash used in operations	(1,769,004)		(2,698,361)

CASH AND CASH EQUIVALENTS

The amounts disclosed on the consolidated Statement of Cash Flows in respect of Cash and cash equivalents are in respect of these statements of financial position amounts:

Year ended 2019			31 Dec			1 Jan 2019
	2019					£
Cash and cash equivalents	£
12,318,536				19,782,511
Year ended 2018			31 Dec 2018				1 Jan 2018
Cash and cash equivalents	£					£
	19,782,511			25,415,410
						Analysis of net cash	At 31 Dec 2019
			At 1 Jan 2019			Cash flow
Cash and cash equivalents	£			£			£
19,782,511		(7,463,975)			12,318,536
Net cash		19,782,511			(7,463,975)	12,318,536
23. POST BALANCE SHEET EVENTS
Sale and Purchase Agreement (SPA)	to acquire operatorship and an additional 70% working interest on
On 27 January 2020 JOG entered into a conditional
Licence P2170 (Blocks 20/5b and 21/1d) from Equinor UK Limited. The consideration for the	Acquisition consists of two milestone payments and a royalty based on
potential future oil volumes produced and sold from the Verbier Upper Jurassic (J62-J64) reservoir oil discovery (the Verbier Field).

Contingent payments of:

• US$3 million upon sanctioning by the UK's Oil & Gas Authority ("OGA") of a Field Development Plan ("FDP") in respect of the Verbier Field; and US$5 million upon first oil from the Verbier Field
• Certain royalty payments on the first 35 million barrels of oil produced and sold from the Verbier Field calculated on the basis of a 70% working interest for on- block volumes

In February 2020 a new

lease agreement

was

signed

for

offices in

10

Arthur

Street, London

EC4R 9AY, this

is

a

19

month

lease

which

expires in September 2021. The total rent for the property is £109,000 per annum.

After

the

balance sheet

date, we have seen macro-economic

uncertainty

with

regards to prices and demand

for

oil

and

gas as

a

result

of

the

Covid-19

outbreak.

Furthermore,

recent

global

developments and

uncertainty

in oil

supply

in

March

and

April

have

caused

further abnormally

large volatility

in

commodity markets.

The

scale

and

duration

of these developments

remain

uncertain

but

could impact

on

the progress of our GBA development project.

The Group consider all matters above to be non-adjusting post balance sheet events.

24. AVAILABILITY OF THE ANNUAL REPORT 2019	made	available for inspection at the Company's	registered office during normal business	hours	on
A copy of the full	2019 Annual Report will be
any weekday. The Company's registered office	is at	10 The Triangle, ng2 Business Park,	Nottingham NG2 1AE. A copy can	also	be
downloaded from the Company's website at www.jerseyoilandgas.com.Jersey Oil and Gas plc is registered in England and Wales with registration number 7503957.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] visit www.rns.com.

END

FR EAXSSESKEEFA

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