XLON:UPL ESEF Annual Report
UPLAND RESOURCES LIMITED (XLON:UPL)
ESEF Annual Report
2022-10-28
For: 2022-06-30
View Original
Added on
October 03, 2026
Jersey Company number: 129667
Annual Report and Consolidated Financial Statements
for the Year Ended 30 June 2022
Upland Resources Limited
Contents
Officers and Professional Advisers 1
Board of Directors 2
Chairman's Statement 3 – 4
Strate
g
ic Report 5
–
7
Directors' Report 8 – 11
Statement of Directors' Responsibilities 12
Independent Auditor's Report 13 – 16
Consolidated Statement of Comprehensive Income 18
Consolidated Statement of Financial Position 19
Consolidated Statement of Chan
g
es in Equit
y
20
Consolidated Statement of Cash Flows 21
Notes to the Financial Statements 22
–
34
Page 1
Upland Resources Limited
Officers and Professional Advisers
Directors
B B H Di - Chairman
D K S Wong
A A B Nasharuddin
Registered Office
3
rd
Floor
44 Esplanade
St Helier
JE4 9WG
Jersey Company
Number
129667
Brokers & Financial
Advisers
Optiva Securities Limited
118 Piccadilly
London
W1J 7NW
Auditors
Crowe U.K. LLP
55 Ludgate Hill
London
EC4M 7JW
UK Legal Advisers
Hill Dickinson LLP
The Broadgate Tower 20 Primrose Street
London
EC2A 2EW
Company Secretary
Ogier
44 Esplanade
St Helier
Jersey
JE4 9WG
Principal Bankers Coutts & Co
440 Strand
London
WC2R 0QS
Page 2
Upland Resources Limited
Board of Directors
Bolhassan Di (Age 69) – Chairman and Chief Executive
Mr Di has many years of political and commercial experience within Sarawak, one of two Malaysian
states upon the Island of Borneo. During his lengthy service within the Sarawak State Assembly, he
held positions as Chairman of the Public Accounts Committee, Assistant Minister in the Sarawak Chief
Minister’s Department and subsequently Assistant Minister at the Ministry of Infrastructure
Development and Communication.
A graduate of the School of Engineering at Sheffield University, he began his career in 1979 at Sarawak
Shell Bhd. (a subsidiary of Royal Dutch Shell plc) where he gained project planning, design,
construction, commissioning and start-up experience in offshore projects. These included the F6A
project in Sarawak waters (the largest offshore gas project in the region), the E11 and F23 gas
production projects in Sarawak waters and also projects such as the St Joseph and South Furious
offshore oil production platforms in Sabah waters. From 1987 to 1997, he was also the Chairman of the
Miri Port Authority. He has also had significant oil and gas experience with Shell in South Korea,
Singapore, the North Sea and the Netherlands.
Dixon Kit Seng Wong (Age 33) - Non-Executive Director
Mr Wong is a director of a number of businesses owned by Tune Group and has been involved in a
variety of roles within the organisation including corporate finance, group strategy, driving organisational
change and synergies across the group. One of Upland’s major shareholders, Tune Assets Limited, is
part of the Tune Group. Mr Wong has previously worked for HSBC Bank Malaysia and the Bank of
Tokyo-Mitsubishi. Mr Wong holds a BCom, Accounting and Finance from the University of Queensland,
Australia and a Master of Business degree from the Queensland University of Technology.
Aimi Aizal Bin Nasharuddin (Age 55) - Non-Executive Director
Mr Nasharuddin carries over 30 years of business, corporate finance and hands-on operational
experience. An accountant by profession, he started his career at Arthur Andersen & Co as an auditor
and business advisor where he was involved in mapping out strategies and implementing business
processes for various sectors of corporates, including manufacturing, financial and investment, property
development, construction and oil and gas-based companies. He later gained further expertise in the
corporate world at CIMB Investment Bank Berhad, the largest investment bank in Malaysia, where he
was integral to some of the largest transactions involving financial restructuring, business re-
engineering, takeovers, reverse takeovers, acquisitions and corporate financing.
Page 3
Upland Resources Limited
Chairman's Statement
We are pleased to report our audited results for the year ended 30 June 2022.
Upland has made good progress in the year under review and since the balance sheet date. It has now
put into action the first phase of its newly formed strategy, whilst laying the foundations for the second
phase. We believe that Upland has a bright future ahead of it and I look forward to reporting further
progress towards our stated goals.
Into 2022, the world changed substantially and we saw seismic shifts in demand-supply balances and,
with the lifting of global COVID-19 related restrictions, saw the world go back to work and back to
travelling, all against the backdrop of a severe and prolonged lack of capital investment in the oil and
gas exploration segment of the sector
The tragedy of war in Ukraine has caused oil and gas prices to rise as many of the world’s nation states
look elsewhere than to Russia for their energy needs. It is not necessary to go into much further detail
on the now well-established link to Europe’s requirements for energy security, energy independence
and to secure her energy needs closer to home.
This brings us to Upland’s Tunisian gas assets. We are progressing our prospective partnership with
Pennpetro and look forward to successfully developing the Tunisian Saouaf Permit with them. At the
time of writing, our application for a one-year extension to December 2023 has been submitted on 21
October 2022 . Saouaf is a large scale, potentially multi-trillion cubic feet gas asset with multiple leads
and prospects situated in near proximity to the TrasnsMed gas pipeline that supplies gas from Algeria
through Tunisia and into Europe via Sicily. Europe's energy needs have never been as vital as they are
now and further developing this asset has potential to provide exceptional returns for investors upon
success.
We are uniquely positioned in Sarawak. A new area of strategic focus; the award of the Joint Technical
Study represents a significant milestone for Upland and our shareholders. Preference for the award of
new permits is given to Sarawakian companies and to those companies partnered with Sarawakian
companies, whilst not jeopardising the interests of companies already operating in Sarawak, which the
Company believes is beneficial to the structure of its agreements and our relationships in Sarawak.
Preliminary activities on SK334 have commenced, the initial kick off meeting was held last month, all
available SK334 data has now been received from Petros and downloaded to our consultants.
Furthermore, our first workshop event has been scheduled, which we look forward to updating our
shareholders on.
The P2478 licence contains the Dunrobin prospect. Technical studies by our joint venture partners for
this highly prospective area have confirmed and enhanced the JV's geological understanding of this
potential large prospect. The prospect consists of three large shallow Jurassic rotated fault blocks that
are mapped mostly on 3D seismic data within a single culmination with Direct Hydrocarbon Indicators.
Reservoir targets are the Jurassic Beatrice and Dunrobin sandstones, overlain by a thick Kimmeridge
Clay to seabed. The prospect is approximately 30km offshore with a water depth of approximately 75m.
As such, providing further positive technical results and any drilling decision by the joint venture partners
to test Dunrobin, we see heightened potential for this asset to attract external farm-out interest and drive
shareholder value.
Regarding corporate matters, sadly as previously reported, my fellow Director, Jeremy King, passed
away in April 2022. Jeremy was an important member of our Board, managed the Company’s finances
and made an important contribution to the strategic direction of the Company. In addition, Chris Pitman
decided not to seek re-election at our AGM held on 28
th
September in order to pursue other business
opportunities. I thank Chris for his service and wish him success in his future endeavours.
Page 4
Upland Resources Limited
Chairman's Statement (continued)
We have strengthened our team with the appointments of John Forrest as CFO and Gerard Murray as
Chief Strategic Officer. Gerry is a long time Upland shareholder and supporter who has a MSc Oil &
Gas Management from the University of Aberdeen while John is a CPA who came on to assist with the
completion of the 2021 audit and re-listing of the Company’s shares in June. The Directors are delighted
to add Gerard and John to our team. We have also identified a UK-based Technical Director and are
working out the final details. With his past experience in the region, he will be a very important addition
as the Sarawak Technical Study commences in earnest.
Finally, on 25 October 2022 we announced the placement of 124,000,000 shares at 0.25p each to
generate gross proceeds of £ 310,000 which will be used for Sarawak and working capital. The issue
included 60,000,000 warrants on a 1:2 basis that are exercisable at 0.40p between 6 and 18 months
from the closing date
Our next AGM will be held on 8 December 2022.
.............................
B B H Di
Chairman
28 October 2022
Page 5
Upland Resources Limited
Strategic Report for the Year Ended 30 June 2022
The Directors present their strategic report for the year ended 30 June 2022.
Principal activity
The Company and Group was formed for the purpose of acquiring assets, businesses or target
companies that have operations in the oil and gas exploration and production sector that it will then look
to develop and expand.
Review of the business
Regarding Upland’s Tunisian gas assets, we are progressing our prospective partnership with
Pennpetro Energy plc (RNS 21 July 2022) and look forward to successfully developing the Tunisian
Saouaf Permit with them. At the time of writing, our application for a one-year extension to December
2023 is to be submitted no later than 22 October 2022. Saouaf is a large scale, potentially multi-trillion
cubic feet gas asset with multiple leads and prospects situated in near proximity to the TrasnsMed gas
pipeline that supplies gas from Algeria through Tunisia and into Europe via Sicily. Europe's energy
needs have never been as vital as they are now and further developing this asset has potential to
provide exceptional returns for investors upon success.
We are uniquely positioned in Sarawak. A new area of strategic focus; the award of the Joint Technical
Study (RNS 2 September 2022) represents a significant milestone for Upland and our
shareholders. Preference for the award of new permits is given to Sarawakian companies and to those
companies partnered with Sarawakian companies, whilst not jeopardising the interests of companies
already operating in Sarawak, which the Company believes is beneficial to the structure of its
agreements and our relationships in Sarawak. Preliminary activities on SK334 have commenced, the
initial kick off meeting was held last month, all available SK334 data has now been received from Petros
and downloaded to our consultants. Furthermore, our first workshop event has been scheduled, which
we look forward to updating our shareholders on.
The P2478 licence contains the Dunrobin prospect. Technical studies by our joint venture partners for
this highly prospective area have confirmed and enhanced the JV's geological understanding of this
potential large prospect. The prospect consists of three large shallow Jurassic rotated fault blocks that
are mapped mostly on 3D seismic data within a single culmination with Direct Hydrocarbon Indicators.
Reservoir targets are the Jurassic Beatrice and Dunrobin sandstones, overlain by a thick Kimmeridge
Clay to seabed. The prospect is approximately 30km offshore with a water depth of approximately 75m.
As such, providing further positive technical results and any drilling decision by the joint venture partners
to test Dunrobin, we see heightened potential for this asset to attract external farm-out interest and drive
shareholder value.
Significant events since the balance sheet date
On 1 September 2022, the Company’s wholly-owned subsidiary Upland Resources (Sarawak) Sdn Bhd
(“URS”) signed a Joint Technical Study Agreement with Big Oil Ventures Sdn Bhd (“BOV”) and
Petroleum Berhad Sarawak (Petros) to conduct a study on Block SK334 which covers 6685 km2 in the
northern region of Onshore Sarawak, Malaysia. On 10 October 2022, the parties to the agreement
formed a joint venture company Upland Big Oil Sdn Bhd. BOV and URS will finance the joint venture
company 80:20 respectively.
Page 6
Upland Resources Limited
Strategic Report for the Year Ended 30 June 2022 (continued)
Significant events since the balance sheet date (continued)
In conjunction with its Farm Out Agreement with Pennpetro Energy plc, which was announced in an
RNS on 21 July 2022, on 21 October 2022, the Company submitted an application to the Granting
Authority in Tunisia to extend the term of the Saouaf Permit until 23 December 2023. A decision is
pending.
On 25 October 2022 the Company announced the placement of 124,000,000 shares at 0.25p each to
generate gross proceeds of £ 310,000 which will be used for Sarawak and working capital. The issue
included 60,000,000 warrants on a 1:2 basis that are exercisable at 0.40p between 6 and 18 months
from the closing date
Principal risks and uncertainties
The directors consider that the main business risks and uncertainties of the Group are:
Sub-surface risks
Risk 1: The success of the business relies on accurate and detailed analysis of the sub-surface. This
can be impacted by poor quality data, either historical or recently gathered, and limited data coverage.
Certain information provided by external sources may not be accurate.
Mitigation: All externally provided historical data is rigorously examined and discarded when
appropriate. New data acquisition will be considered and relevant programmes implemented, but
historical data can be reviewed and reprocessed to improve the overall knowledge base.
Risk 2: Data can be misinterpreted leading to the construction of inaccurate models and subsequent
plans.
Mitigation: All analytical outcomes are challenged internally and peer reviewed. Interpretations are
carried out on modern geoscience software.
Corporate risks
Risk 1: When it expired in May 2021 the Company did not replace a USD 1M bank guarantee issued
by the Company to the Tunisian government, as beneficiary, to part-secure the work commitment of its
Tunisian subsidiary in respect of the Saouaf Permit. The bank guarantee was a condition imposed when
the Permit was granted and there is a risk that the Permit could be cancelled. There is a lesser risk that
the Tunisian government will seek compensation should the work commitment be unfunded.
Mitigation: The Company has received an opinion from its Tunisian legal advisors that the Tunisian
government has recourse to our Tunisian subsidiary but not to the Company. In addition, the Farm Out
Agreement (RNS 21 July 2022) obligates the Farminee to deliver a bank guarantee or other security
satisfactory to the Tunisian authorities to replace the original bank guarantee.
Risk 2: The Group’s success depends on skilled management as well as retention of technical and
administrative staff and consultants. The loss of critical members of the Group’s team could have an
adverse effect on the business.
Mitigation: The Group periodically reviews the compensation and contract terms of its staff and
consultants to ensure that they are competitive.
Page 7
Upland Resources Limited
Strategic Report for the Year Ended 30 June 2022 (continued)
Principal risks and uncertainties (continued)
Going concern risk
Risk: The Group has insufficient financial resources to meet its non-discretionary expenses for the 12
months from the date of approval of these accounts. There is no guarantee that funding will be raised
and as a result there is an uncertainty about the Group’s ability to continue as a going concern.
Mitigation: Despite difficult financial markets, the Group expects support from its shareholders in its
efforts to finance non-discretionary expenditures for the next 12 months, including its commitment to
the Upland/Big Oil/Petros joint study in Sarawak. On 25 October 2022 the Company announced the
placement of 124,000,000 shares at 0.25p each to generate gross proceeds of £ 310,000 which will be
used for Sarawak and working capital. The issue included 60,000,000 warrants on a 1:2 basis that are
exercisable at 0.40p between 6 and 18 months from the closing date
Approved by the Board on 28 October 2022 and signed on its behalf by:
.........................................
A A B Nasharuddin
Director
Page 8
Upland Resources Limited
Directors' Report for the Year Ended 30 June 2022
The directors present their report and the audited consolidated financial statements for the year ended
30 June 2022.
As a Jersey registered company, Upland Resources Limited is not obliged to comply with the
Companies Act 2006. However, the Directors have elected to conform to the requirements of the
Companies Act 2006, as regards the Directors' Report, to the extent they consider to be reasonably
practical and appropriate for a company of the Company's size and nature.
Details of key events during the year, significant events affecting the Company and its subsidiaries
since the end of the financial year and an indication of likely future developments in the business of the
Company and its subsidiaries are included in the Strategic Report.
Directors of the Group
The directors who held office during the year were as follows:
B B H Di – Chairman and Chief Executive
C N Pitman (resigned 28 September 2022)
J E S King (deceased 18 April 2022)
D K S Wong
A A B Nasharuddin
Results and dividends
The Group's loss on ordinary activities after taxation amounted to £494,295 for the year (2021 -
£789,892). No dividend will be paid (2021 – £nil).
Financial instruments and risk management
An explanation of the Group's financial risk management objectives, policies and strategies and
information about the use of financial instruments by the Company is given in note 9 to the financial
statements.
Capital structure
Details of the issued share capital, together with details of the movements in the Company’s issued
share capital during the period, are shown in note 16 to the financial statements. The company has one
class of ordinary shares which carry no right to fixed income.
There are no specific restrictions on the size of a holding nor on the transfer of shares, which are both
governed by the general provisions of the Articles of Association and prevailing legislation. The
Directors are not aware of any agreements between holders of the Company’s shares that may result
in restrictions on the transfer of securities or on voting rights.
No person has any special rights of control over the Company’s share capital.
With regard to the appointment and replacement of Directors, the Company is governed by its Articles
of Association, the Companies (Jersey) Law 1991 and related legislation. The Articles themselves may
be amended by special resolution of the shareholders.
Page 9
Upland Resources Limited
Directors' Report for the Year Ended 30 June 2022 (continued)
Directors' interests
As at 30 June 2022, the beneficial interests of the Directors and their connected persons in the ordinary
share capital of the Company were as follows:
Director
Number of Ordinary
Shares
% of Ordinary Share
Capital
B B H Di * 16,634,620 2.42%
A A B Nasharuddin 14,730,770 2.14%
C N Pitman ** 7,142,857 1.04%
* Included 7,788,460 shares held by the director’s wife.
** Mr Pitman resigned on 28 September 2022. Mr Pitman also held 3,571,429 warrants to subscribe for
new ordinary shares (on the basis of 1 new ordinary share for each warrant). These were issued on 14
July 2020 as part of the issue of warrants referred to below and expired without being exercised.
Substantial shareholders
The following had interests of 3 per cent or more in the Company's issued share capital as at 30 June
2022:
Party Name
Number of Ordinary
Shares
% of Ordinary Share
Capital
M N B Zakaria 125,674,475 18.30%
Tune Assets Limited 74,579,604 10.86%
Optiva Securities Limited 51,430,576 7.49%
Warrants
On 14 July 2020, the Company issued 33,571,431 warrants to subscribe for new ordinary shares (on
the basis of 1 new ordinary share for each warrant) at a subscription price of 1.3p per ordinary share
and exercisable at any time during the period of 2 years from 14 July 2020. The warrants expired on 14
July 2022 without being exercised.
Capital and returns management
The Directors believe that, following an acquisition, further equity capital raisings may be required by
the Company for working capital purposes as the Company pursues its objectives. The amount of any
such additional equity to be raised, which could be substantial, will depend on the nature of the
acquisition opportunities which arise and the form of consideration the Company uses to make the
acquisition and cannot be determined at this time.
Dividend policy
The Company would consider payment of dividends on the ordinary shares at such times (if any) and
in such amounts (if any) as the Board determines appropriate in its absolute discretion after
consideration of operating and capital commitments. The Company does not anticipate declaring any
dividends in the foreseeable future. The Company will only pay dividends to the extent that to do so is
in accordance with all applicable laws.
Page 10
Upland Resources Limited
Directors' Report for the Year Ended 30 June 2022 (continued)
Corporate governance
The Board is not subject to the provisions of a formal governance code and given its present size does
not intend to formally adopt any specific code, but will apply governance the Directors consider to be
appropriate, having due regard to the principles of governance set out in the UK Corporate Governance
Code.
In order to implement its business strategy, the Company has adopted a corporate governance structure
whereby the key features of its structure are:
• The Board of Directors is knowledgeable and experienced and has extensive experience of making
acquisitions;
• Consistent with the rules applicable to companies with a Standard Listing, unless required by law or
other regulatory process, shareholder approval is not required in order for the Company to complete an
acquisition. The Company will, however, be required to obtain the approval of the Board of Directors,
before it may complete an acquisition;
• The Company does not have separate audit and risk, nominations or remuneration committees. The
Board as a whole reviews audit and risk matters, as well as 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, and takes responsibility for the appointment of auditors and payment
of their audit fee, monitors and reviews the integrity of the Company’s financial statements and takes
responsibility for any formal announcements on the Company’s financial performance;
• At every Annual General Meeting of the Company, one-third of the Directors for the time being (or if
their number is not a multiple of three, then the number nearest to and not exceeding one-third) will
retire from office and will be eligible for re-election. In addition, any Director who has been appointed to
the Board other than pursuant to a Resolution of Members since the last Annual General Meeting of
the Company will retire and again will be eligible for re-election; and
• Following an acquisition, the Company may seek to transfer from a Standard Listing to either a
Premium Listing or other appropriate listing venue, based on the track record of the Company or
business it acquires, subject to fulfilling the relevant eligibility criteria at the time. If the Company is
successful in obtaining a Premium Listing, further rules will apply to the Company under the Listing
Rules and Disclosure Guidance and Transparency Rules and the Company will be obliged to comply
or explain any derogation from the UK Corporate Governance Code.
Internal control and risk management
The Board has the ultimate responsibility for the Group's internal control and risk management. The
Board monitors internal controls and risk management systems on an annual basis. The Group has
established a system of control and risk management involving an appropriate degree of oversight by
the Board.
The management, via the Board of Directors and board meetings, provide the Board with updates of
risk and uncertainties facing the Group and accompanying actions to mitigate such risks. The Board is
satisfied with the appropriateness of the risk management framework which provides for the
identification and management of risk factors by management and non-executive Directors.
As the Group expands, the Board will ensure that the Group's control and risk management process is
regularly reviewed and updated as the Board deems necessary.
Page 11
Upland Resources Limited
Directors' Report for the Year Ended 30 June 2022 (continued)
Going concern
The Directors have acknowledged the latest guidance on going concern from the Financial Reporting
Council (FRC). The Directors regularly review the performance of the Group to ensure that they are
able to react on a timely basis to opportunities and issues as they arise.
The Directors have completed a final assessment of the Group’s financial resources, including
forecasts. Based on this review, the Directors believe that the Group is in a position to manage its
business risks successfully within the expected economic outlook.
After making suitable enquiries, the Directors have formed a judgement at the time of approving the
financial statements that there is a reasonable expectation that the Group will have adequate resources
to continue in operational existence for a period of at least twelve months from the date of approval of
the financial statements. Accordingly, they continue to adopt the going concern basis in preparing the
financial statements. Additional discussion is included in the Principal Risks and Uncertainties section
of the Strategic Report above.
Disclosure of information to the auditors
The directors of the Company who held office at the date of the approval of this Annual Report as set
out above confirm that:
• so far as they are aware, there is no relevant audit information (information needed by the Company's
auditors in connection with preparing their report) of which the Company's auditors are unaware, and
• they have taken all the steps that they ought to have taken as directors in order to make themselves
aware of any relevant audit information and to establish that the Company's auditors are aware of that
information.
Approved by the Board on 28 October 2022 and signed on its behalf by:
A A B Nasharuddin
Director
Page 12
Upland Resources Limited
Statement of Directors' Responsibilities
The directors are required by the Companies (Jersey) Law 1991, to prepare the financial statements
for each financial year which give a true and fair view of the state of affairs of the Company as at the
end of the financial year and of the loss of the company for that period.
The directors are responsible for preparing the financial statements in accordance with UK-adopted
International accounting standards and Disclosure and Transparency Rules of the United Kingdom’s
Financial Conduct Authority (‘DTR’). 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 Group 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 apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with UK adopted International accounting
standards, subject to any material departures disclosed and explained in the financial statements;
•
prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Group will continue in business.
The directors are responsible for keeping proper accounting records that are sufficient to show and
explain the Group's transactions and disclose with reasonable accuracy at any time the financial
position of the Group and enable them to ensure that the financial statements comply with all applicable
legislation and, as regards the Group financial statements. They are also responsible for safeguarding
the assets of the Group and hence for taking reasonable steps for the prevention and detection of fraud
and other irregularities.
The directors are responsible for the maintenance and integrity of the corporate and financial
information included on the Group's website. The work carried out by the auditors does not involve the
consideration of these matters and, accordingly, the auditors accept no responsibility for any changes
that may have occurred in the accounts since they were initially presented on the website. Legislation
in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
The directors confirm that to the best of their knowledge the financial statements, prepared in
accordance with the relevant financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Group and the undertakings included in the
consolidation taken as a whole; the strategic report includes a fair review of the development and
performance of the business and the position of the Group and the undertakings included in the
consolidation taken as a whole, together with a description of the principal risks and uncertainties they
face; and the annual report and financial statements, taken as a whole, are fair, balanced and
understandable and provide the information necessary for shareholders to assess the Group’s position,
performance, business model and strategy.
This responsibility statement was approved by the Board on 28 October 2022 and signed on its behalf
by:
...................................
A A B Nasharuddin
Director
Page 13
Upland Resources Limited
Independent Auditor's Report to the Members of Upland Resources Limited
Opinion
We have audited the financial statements of Upland Resources Limited (the ‘parent company’) and its
subsidiaries (the ‘Group’) for the year ended 30 June 2022 which comprise the Consolidated Statement
of Comprehensive Income, the Consolidated Statement of Financial Position, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of Cash Flows and notes to the financial
statements, including significant accounting policies. The financial reporting framework that has been
applied in their preparation is applicable law and UK adopted international accounting standards.
In our opinion, the financial statements:
• give a true and fair view of the state of the Group’s affairs as at 30 June 2022 and of its loss for
the year then ended;
• have been properly prepared in accordance with UK adopted international accounting
standards ;
• have been properly prepared in accordance with the requirements of the Companies (Jersey)
Law 1991.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and
applicable law. Our responsibilities under those standards are further described in the Auditor’s
Responsibilities for the Audit of the Financial Statements section of our report. We are independent of
the Group in accordance with the ethical requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and we have
fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to note 2 to the financial statements. The Group raises funding from time to time to
finance its exploration and ongoing administrative activities. Note 2 indicates that there can be no
guarantee that the required funds will be raised by the parent company within the necessary time-frame.
As detailed in note 2, these events or conditions indicate that a material uncertainty exists that may cast
significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in
respect of this matter.
In auditing the financial statements, we have concluded that the directors’ use of the going concern
basis of accounting in the preparation of the financial statements is appropriate. Our evaluation of the
directors’ assessment of the entity’s ability to continue to adopt the going concern basis of accounting
included the following:
The going concern assessment period used by the Directors was at least 12 months from the date of
the approval of the financial statements. We assessed the appropriateness of the approach,
assumptions and arithmetic accuracy of the model used by management when performing their going
concern assessment.
Page 14
We evaluated the Directors’ assessment of the Group’s ability to continue as a going concern, including
challenging the underlying data and key assumptions used to make the assessment. Additionally, we
reviewed and challenged the results of management’s stress testing, to assess the reasonableness of
economic assumptions in light of the impact of Covid-19 on the Group’s solvency and liquidity position.
Our responsibilities and the responsibilities of the directors with respect to going concern are described
in the relevant sections of this report.
Our approach to the audit
Our application of 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 £23,000 (FY2021 - £28,000). It was considered appropriate to base this on approximately
5% (FY2021 - 4%) measure of operating result. The materiality is rounded to nearest thousand.
We use a different level of materiality (‘performance materiality’) to determine the extent of our testing
for the audit of the financial statements our initial amount of materiality equal to £17,250. 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.
Where considered appropriate performance materiality may be reduced to a lower level, such as, for
related party transactions and directors’ remuneration.
We agreed with the Board of Directors to report to it all identified errors in excess of £1,150 (FY2021 -
£1,400). 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 Group’s accounting function is outsourced to an accounting organisation in the UK which directly
reports to Directors. In establishing the overall approach to the Group audit, we determined the work
that needed to be performed by us. All group companies were within the scope of our audit testing.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current period and include the most significant assessed
risks of material misstatement (whether or not due to fraud) that we identified. These matters included
those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit;
and directing the efforts of the engagement team. These matters were addressed in the context of our
audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Going concern was identified as a key audit matter and has been addressed within the “Material
uncertainty related to going concern” section of the audit report. We have determined that there are no
other key audit matters to communicate in our report. Our audit procedures in relation to the matter
were designed in the context of our audit opinion as a whole. They were not designed to enable us to
express an opinion on the matter individually and we express no such opinion
Other information
The directors are responsible for the other information contained within the annual report. The other
information comprises the information included in the annual report, other than the financial statements
and our auditor’s report thereon. Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our report, we do not express any
form of assurance conclusion thereon.
Page 15
Upland Resources Limited
Independent Auditor's Report to the Members of Upland Resources Limited
(continued)
Other information (continued)
Our responsibility is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our knowledge obtained in the
course of the audit or otherwise appears to be materially misstated. If we identify such material
inconsistencies or apparent material misstatements, we are required to determine whether this gives
rise to a material misstatement in the financial statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of this other information, we are required
to report that fact.
We have nothing to report in this regard.
Matters on which we are required to report by exception
We have nothing to report to you in respect of the following matters in relation to which the Companies
(Jersey) Law 1991 requires us to report to you if, in our opinion:
• proper accounting records have not been kept by the Company, or proper returns adequate for
our audit have not been received from branches not visited by us; or
• the financial statements are not in agreement with the accounting records and returns; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the directors’ responsibilities statement (set out on page 12), 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 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 to cease
operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect
of irregularities, including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below:
Page 16
Upland Resources Limited
Independent Auditor's Report to the Members of Upland Resources Limited
(continued)
We obtained an understanding of the legal and regulatory frameworks within which the company
operates, focusing on those laws and regulations that have a direct effect on the determination of
material amounts and disclosures in the financial statements. The laws and regulations we considered
in this context were the Companies (Jersey) Law 1991 and Taxation legislation.
We identified the greatest risk of material impact on the financial statements from irregularities, including
fraud, to be the override of controls by management. Our audit procedures to respond to these risks
included enquiries of management about their own identification and assessment of the risks of
irregularities, sample testing on the posting of journals and reviewing accounting estimates for biases.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected
some material misstatements in the financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. We are not responsible for preventing non-
compliance and cannot be expected to detect non-compliance with all laws and regulations.
These inherent limitations are particularly significant in the case of misstatement resulting from fraud
as this may involve sophisticated schemes designed to avoid detection, including deliberate failure to
record transactions, collusion or the provision of intentional misrepresentations.
A further description of our responsibilities is available on the Financial Reporting Council’s website at
www.frc.org.uk. This description forms part of our auditor’s report.
Other matters which we are required to address
We were appointed by the audit committee on 29 October 2020 to audit the financial statements for the
period ending 30 June 2022. Our total uninterrupted period of engagement is 5 years, covering the
periods ended 30 June 2018 to 2022.
The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group and
we remain independent of the Group 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 Company's members, as a body, in accordance with Article 113A of
the Companies (Jersey) Law 1991. Our audit work has been undertaken so that we might state to the
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 Company and the 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
55 Ludgate Hill
London
EC4M 7JW
28 October 2022
Page 17
Page 18
Upland Resources Limited
Consolidated Statement of Comprehensive Income for the Year Ended 30 June
2022
Note
2022
£
2021
£
Revenues
Exploration and evaluation expenditure
10
(
Intangible asset impairment
10 -
(
Administrative expenses
(354,828 ) (570,676 )
Operating loss
3 (494,295 ) (789,892 )
Loss before tax
(
)
(
)
Taxation
4 -
Loss for the financial year
(494,295 ) (789,892 )
Total comprehensive expense for the financial year
(494,295 ) (789,892 )
Loss attributable to:
Owners of the Company
(494,295 ) (789,892 )
Total comprehensive expense attributable to:
Owners of the Company
(494,295 ) (789,892 )
Loss per share
Basic and diluted (pence per share) 5 (0.07 ) (0.12 )
The above results were derived from continuing operations.
The notes on pages 22 to 34 form an integral part of these financial statements.
Page 19
Upland Resources Limited
Consolidated Statement of Financial Position as at 30 June 2022
Note
2022
£
2021
£
Non-current assets
Intangible assets
10 -
Current assets
Trade and other receivables 12 7,185 8,327
Cash and cash equivalents 13 305,526 757,988
Total assets
Equity and liabilities
Stated capital 16 8,427,732 8,427,732
Retained earnings
(8,686,185 ) (8,191,890 )
Total equity
(
)
Current liabilities
Trade and other payables 14 571,164 530,473
Total equity and liabilities
These financial statements were approved and authorised for issue by the Board on 28 October 2022
and signed on its behalf by:
A A B Nasharuddin
Director
The notes on pages 22 to 34 form an integral part of these financial statements.
Page 20
Upland Resources Limited
Consolidated Statement of Changes in Equity for the Year Ended 30 June 2022
Equity attributable to equity holders of the parent company
Stated capital
£
Retained
earnings
£
Total equity
£
At 1 July 2021
(
)
Loss for the year and total comprehensive
income
At 30 June 2022
Stated capital
£
Retained
earnings
£
Total equity
£
At 1 July 2020 7,989,832 (7,450,830 ) 539,002
Loss for the year and total comprehensive
income
(
)
(
)
Transactions with shareholders
Share-based payment transactions
Issue of shares
Share issue costs
(32,100 ) - (32,100 )
At 30 June 2021
The notes on pages 22 to 34 form an integral part of these financial statements.
Page 21
Upland Resources Limited
Consolidated Statement of Cash Flows for the Year Ended 30 June 2022
Note
2022
£
2021
£
Cash flows from operatin
g
activities
Loss from operations for the year
(
)
(
)
Adjustments to cash flows from non-cash items:
Impairment of intangible assets
Share-based payment expense
Foreign exchange loss/(gain)
(37,713 ) 84,320
Operating cash flows before working capital
movements
(532,008 ) (437,524 )
Decrease/(increase) in trade and other receivables
Increase/(decrease) in trade and other payables
Net cash flow used in operating activities
(490,175 ) (462,476 )
Cash flows from investing activities
Expenditures incurred on exploration and evaluation
assets
Net cash flow used in investing activities
Cash flows from financing activities
Issue of ordinary shares, net of issue costs - 437,900
New loan finance received - 150,000
Net cash flow from financing activities
Net (decrease)/increase in cash and cash equivalents
(
)
Cash and cash equivalents at beginning of period
13 757,988 823,127
Exchange differences in respect of cash and cash
equivalents
Cash and cash equivalents at end of period
13 305,526 757,988
.
The notes on pages 22 to 34 form an integral part of these financial statements.
Page 22
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022
1 General information
The Company was incorporated in the British Virgin Islands on 14 March 2012 as a private limited
company with the name Ribes Resources Limited. On 3 September 2013 the company changed its
name to Upland Resources Limited. On 15 August 2019, the Company was registered in Jersey by way
of a continuation out of the British Virgin Islands and migration into Jersey.
The Company has a year end of 30 June.
2 Accounting policies
Summary of significant accounting policies and key accounting estimates
The Board has reviewed the accounting policies set out below and considers them to be the most
appropriate to the Group’s business activities.
Basis of preparation
The financial statements have been prepared in accordance with UK-adopted International accounting
standards The financial statements have been prepared under the historical cost convention.
No company information is included in the financial statements as it is not required by Jersey
Companies (Law) 1991.
The financial information is presented in Sterling (£).
Standards and interpretations issued but not yet applied
At the date of authorisation of these financial statements, certain new standards, interpretations and
amendments to existing standards have been published but are not yet effective and have not been
adopted early by the Company. The Directors anticipate that these standards will be adopted in the
Company’s accounting policies for the first period beginning on or after their effective dates.
The Directors have reviewed the standards in issue by the International Accounting Standards Board
(IASB) which are effective for future accounting periods and are of the opinion that none of these
standards would have a material impact on the financial reporting of the Company.
Basis of consolidation
The consolidated financial statements consolidate the financial statements of the Company and its
subsidiary undertakings drawn up to 30 June 2022.
The results of subsidiaries acquired or disposed of during the period are included in the consolidated
income statement from the effective date of acquisition or up to the effective date of disposal, as
appropriate. Where necessary, adjustments are made to the financial information of subsidiaries to
bring the accounting policies into line with those used by the Group. All intra-group transactions,
balances, income and expenses are eliminated on consolidation.
Page 23
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
2 Accounting policies (continued)
Going concern
These financial statements have been prepared on a going concern basis, which assumes that the
Group will continue to be able to meet its liabilities as they fall due for the foreseeable future. The Group
meets its current day to day working capital requirements through existing cash reserves.
The Group raises finance for its exploration and appraisal activities in discrete tranches to finance its
activities for limited periods only and further funding will be required from time to time to finance those
activities as well as ongoing administrative expenses. On 25 October 2022 the Company announced
the placement of 124,000,000 shares at 0.25p each to generate gross proceeds of £ 310,000 which will
be used for Sarawak and working capital. The issue included 60,000,000 warrants on a 1:2 basis that
are exercisable at 0.40p between 6 and 18 months from the closing date. In common with many early-
stage exploration companies, the Group will require additional funding within the next 12 months to
continue its operations.
The Directors believe that the Group will be able to raise, as required, sufficient cash or reduce its
commitments to enable it to continue its operations, including the pursuit of future exploration
opportunities, and to continue to meet, as and when they fall due, its liabilities for at least the next twelve
months from the date of approval of the Group financial statements. The Group financial statements
have, therefore, been prepared on the going concern basis. In addition, the Directors have considered
the possibility of compensation payments falling due to the Tunisian authorities and have sought a legal
opinion that indicated that any such compensation would be ring-fenced within the Group’s Tunisian
subsidiary. Having obtained this advice, the Directors have assessed outflows in this respect to be
negligible in the forecasts. Should this not be the case, further funds would be required to be raised to
satisfy any material obligations arising.
As there can be no guarantee that the required funds will be raised within the necessary timeframe,
consequently a material uncertainty exists that may cast doubt on the Group’s ability to continue to
operate as planned and to be able to meet its commitments and discharge its liabilities in the normal
course of business for a period not less than twelve months from the date of approval of this report. The
financial statements do not include the adjustments that would result if the Group was unable to
continue in operation.
Intangible assets
Oil and gas assets: exploration and evaluation
The Group has adopted the ‘successful efforts’ method of accounting for Exploration and Evaluation
(‘’E&E’’) costs, having regard to the requirements of IFRS 6 ‘Exploration for and Evaluation of Mineral
Resources’.
The successful efforts method means that only the costs which relate directly to the discovery and
development of specific oil and gas reserves are capitalised. Such costs may include costs of license
acquisition, technical services and studies, exploration drilling and testing but do not include costs
incurred prior to having obtained the legal rights to explore the area. Under successful efforts
accounting, exploration expenditure which is general in nature is charged directly to the income
statement and that which relates to unsuccessful drilling operations, though initially capitalised pending
determination, is subsequently written off. Only costs which relate directly to the discovery and
development of specific commercial oil and gas reserves will remain capitalised and to be depreciated
over the lives of the reserves. The success or failure of each exploration effort will be judged on a well-
by-well basis as each potentially hydrocarbon-bearing structure is identified and tested. Exploration and
evaluation costs are capitalised within intangible assets. Costs incurred prior to obtaining legal rights to
explore are expensed immediately to the income statement.
Page 24
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
2 Accounting policies (continued)
Intangible assets (continued)
Oil and gas assets: exploration and evaluation (continued)
All lease and licence acquisition costs, geological and geophysical costs and other direct costs of
exploration, evaluation and development are capitalised as intangible assets. Intangible assets
comprise costs relating to the exploration and evaluation of properties which the directors consider to
be unevaluated until reserves are appraised as commercial, at which time they are transferred to
tangible assets as ‘Developed oil and gas assets’ following an impairment review and depreciated
accordingly. Where properties are appraised to have no commercial value, the associated costs are
treated as an impairment loss in the period in which the determination is made.
Costs are amortised on a field by field unit of production method based on commercial proven and
probable reserves, or to the expiry of the licence, whichever is earlier.
The calculation of the ‘unit of production’ amortisation takes account of the estimated future
development costs and is based on the current period and un-escalated price levels. Changes in
reserves and cost estimates are recognised prospectively.
E&E costs are not amortised prior to the conclusion of appraisal activities.
E&E assets are assessed for impairment if facts and circumstances suggest that the carrying amount
exceeds the recoverable amount, and upon transfer to PP&E where they are allocated to cash-
generating units based on geographical proximity and other factors.
Financial assets and liabilities
The financial assets and liabilities of the Group comprise cash at bank and other debtors and payables
arising in the normal course of business.
The fair values of the financial assets and liabilities are not considered to be materially different to their
book values and they are all held at amortised cost.
Financial assets and liabilities are accounted for as follows:
Financial assets and liabilities are initially recognised on the date at which the Group becomes a party
to the contractual provisions of the instrument.
The Group derecognises a financial liability when its contractual obligations are discharged or cancelled
or expire.
Cash and cash equivalents
Cash and cash equivalents include cash at bank with an original maturity of three months or less.
Equity
Equity comprises the following:
• “Stated capital” represents the amount of cash received by the company for the issue of shares of that
class; and
• “Retained earnings” represents retained losses and credits in respect of share-based payment
transactions.
Page 25
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
2 Accounting policies (continued)
Foreign currency translation
Functional and presentation currency
Items included in the financial information are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The financial statements are
presented in Sterling (£), which is the Company’s functional and presentational currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates
prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the
settlement of such transactions, and from the translation at period-end exchange rates of monetary
assets and liabilities denominated in foreign currencies, are recognised in the income statement.
Operating segments
The Group has one operating segment, which is the exploration of oil and gas properties in the UK,
Southeast Asia, and North Africa.
Critical accounting estimates and judgements
The preparation of financial statements in conformity with UK- adopted international accounting
standards requires management to make judgements, estimates and assumptions that affect the
application of policies and reported amounts of assets and liabilities as well as the disclosure of the
reported amounts of revenues and expenses during the reporting period. Actual outcomes could differ
from those estimates.
The key source of estimation uncertainty that has a significant risk of causing material adjustment to
the carrying amounts of assets and liabilities within the next financial year is the impairment of intangible
exploration and evaluation (E&E) assets.
Page 26
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
3 Operating loss
Arrived at after charging/(crediting):
| 2022 | ||
| £ | ||
| 2021 | ||
| £ | ||
| Directors’ remuneration and fees (note 7) | ||
| 86,118 | ||
| 125,155 | ||
| Fees payable to the Company’s auditor and its associates – audit | ||
| of the financial statements | ||
| 22,000 | ||
| 19,000 | ||
| Impairment of intangible assets | ||
| - | ||
| 219,216 | ||
| Exploration and evaluation expenditure | ||
| 139,467 | ||
| - | ||
| Loss/(gain) on foreign exchange | ||
| (37,713) | 84,320 |
4 Taxation
The tax charge for the period can be reconciled to the loss in the Statement of Comprehensive Income
as follows:
| 2022 | 2021 | |
| £ | £ | |
| Loss before tax on continuing operations | (494,295) | (789,892) |
| Tax at the applicable standard tax rate of 19% (2021 – 19%) | (93,916) | (150,079) |
| Expenses not allowable for tax | - | 10,542 |
| Change in unrecognised deferred tax assets | 93,916 | 139,537 |
| Tax charge for the period | ||
| - | - |
The Company was registered as resident for tax purposes in BVI until 15 August 2019 when it migrated
to Jersey. The company has been treated as resident in the UK for tax purposes since 1 July 2018.
Management consider that the only accumulated losses incurred prior to 1 July 2018 that will be
available to offset any future profits are those accumulated in the UK subsidiaries.
The Group has £6,305,209 tax losses carried forward (2021 - £5,844,914). No deferred tax asset has
been recognised in respect of these losses as there is insufficient evidence that the amount will be
recovered in future years.
Page 27
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
5 Loss per share
The calculation of basic loss per share is based on the following loss and number of shares:
| 2022 | 2021 | |
| Loss for the period from continuing operations | ||
| £494,295 | £789,892 | |
| Weighted average shares in issue | ||
| 686,768,853 | 684,377,463 | |
| Basic loss per share (pence per share) | ||
| 0.07p | 0.12p |
Basic loss per share is calculated by dividing the loss for the period from continuing operations of the
Group by the weighted average number of ordinary shares in issue during the period.
The disclosure of the diluted loss per share is the same as the basic loss per share as the conversion
of warrants decreases the basic loss per share, thus being anti-dilutive.
6 Staff costs
There were no staff costs paid during the year other than those disclosed as directors’ emoluments in
note 7 and share-based payments disclosed in note 8.
There are no defined benefit or defined contribution pension arrangements in operation.
7 Directors’ emoluments
The Directors are considered to be the key management personnel of the Company. Directors’
remuneration details are as follows:
| 2022 | 2021 | ||
| Name of Director | Remuneration detail | £ | £ |
| C N Pitman | Fee | 40,448 | 67,566 |
| C N Pitman | Share-based payment | - | 5,195 |
| J E S King | |||
| Salary (including employers NIC) | 20,670 | 27,394 | |
| B B H Di | Fee | 25,000 | 25,000 |
| 86,118 | 125,155 |
The Upland Long Term Incentive Plan (“LTIP”)
The Company has established the LTIP as part of the general remuneration plan of the Company. All
executive directors and senior managers are eligible to participate in the LTIP. Awards under the LTIP
are determined by the non-executive directors of the Company following full consultation with the
executive directors. Awards are to be made every year, measuring performance against goals in each
year ending 25 October. During the year, no cash bonus awards (2021 - £nil) or share option awards
(2021 - £nil) have been made under the LTIP.
Page 28
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
7 Directors’ emoluments (continued)
The Upland Long Term Incentive Plan (“LTIP”) – continued
The LTIP is composed of two elements; a share option plan and an annual bonus plan. No maximum
shall apply to the number of share options that may be awarded annually. However, annual cash bonus
awards will be to a maximum of 75% of the participant’s base salary. This maximum may be waived by
the non-executive directors.
In determining the level of LTIP award in a given year, performance against the following targets is
considered: share price appreciation, increase in market capitalisation and other specified targets. The
level of LTIP award shall be made after due consideration of the level of attainment of these targets
during the year, taking into consideration general market, and specific oil industry, conditions.
8 Share-based payments
Warrants
On 14 July 2020, the Company issued 33,571,431 warrants (including 4,285,715 to Optiva Securities
Limited and 3,571,429 to C N Pitman) to subscribe for new ordinary shares (on the basis of 1 new
ordinary share for each warrant) at a subscription price of 1.3p per ordinary share and exercisable at
any time during the period of 2 years from 14 July 2020.
| Number of | ||
| warrants | ||
| Weighted | ||
| average | ||
| subscription | ||
| price (pence | ||
| per share) | ||
| Outstanding at beginning and end of the year | 33,571,431 | 1.30 |
At the end of the year, 33,571,431 warrants were exercisable (2021 – 33,571,431). The warrants
outstanding at the end of the year had a weighted average remaining contractual life of 2 weeks. The
warrants expired on 14 July 2022 without being exercised.
The total charge for the year was £nil (2021 - £48,832).
Page 29
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
9 Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including currency risk), credit
risk and liquidity risk. The Group’s overall risk management programme seeks to minimise potential
adverse effects on the Group’s financial performance. Risk management is carried out by the Board.
Market risk
Foreign exchange risk
At 30 June 2022, the company held US$366,000 in its USD bank account. The Group is therefore
exposed to foreign exchange risk arising from the funds held in the Company’s USD bank account.
The exposure to this risk is not considered material to the Group and thus the Directors consider that,
for the time being, no hedging or other arrangements are necessary to mitigate this risk.
Credit risk
Credit risk arises from cash and cash equivalents.
The Group considers the credit ratings of banks in which it holds funds in order to reduce exposure to
credit risk. The Group will only keep its holdings of cash and cash equivalents with institutions which
have a minimum credit rating of ‘A’. The Group is not subject to any externally imposed capital
requirements.
Liquidity risk
Management of liquidity risk is achieved by monitoring budgets and forecasts against actual cash flows.
Capital risk management
The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a
going concern, in order to provide returns for shareholders and benefits for other stakeholders, and to
maintain an optimal capital structure.
The Company monitors capital on the basis of the equity held by the Company, which at 30 June 2022
was negative £258,453 (2021 – positive £235,842).
| 2022 | Total | ||||
| £ | |||||
| On Demand | |||||
| £ | |||||
| Within 3 months | |||||
| £ | |||||
| 3 – 12 months | |||||
| £ | |||||
| 1 – 2 years | |||||
| £ | |||||
| Trade Payables | 154,524 | - | 154,524 | - | - |
| Short-Term Loan | 150,000 | 150,000 | - | - | - |
| Accrued Expenses | 266,640 | 10 | 216,630 | 50,000 | - |
| Total | 571,164 | 150,010 | 371,154 | 50,000 | - |
| 2021 | Total | ||||
| £ | |||||
| On Demand | |||||
| £ | |||||
| Within 3 months | |||||
| £ | |||||
| 3 – 12 months | |||||
| £ | |||||
| 1 – 2 years | |||||
| £ | |||||
| Trade Payables | 134,339 | - | 134,339 | - | - |
| Other Payables | 21,829 | 21,829 | - | - | - |
| Short-Term Loan | 150,000 | 150,000 | - | - | - |
| Accrued Expenses | 224,305 | 10 | 174,295 | 50,000 | - |
| Total | 530,473 | 171,839 | 308,634 | 50,000 | - |
Page 30
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
10 Intangible assets
Exploration and evaluation (E&E) costs
The Directors review for impairment when facts and circumstances suggest that the carrying amount of
an E&E asset may exceed its recoverable amount. In making this assessment, the Directors have
regard to the facts and circumstances noted in IFRS 6 paragraph 20.
The Saouaf Licence currently has an expiry date of 23 December 2022. For an update, please refer to
“Significant events since the balance sheet date” on page 6 of the Strategic Report. Given the amount
of the unfunded expenditure commitment of USD 2.3m which is to be spent by December 2022, the
exploration and evaluation costs to 30 June 2021 associated with this licence, which amounted to
£174,557 and had previously been capitalised, were charged through profit and loss as an impairment
charge in the prior year accounts. Further exploration and evaluation costs associated with this licence,
amounting to £134,111, incurred in the year have been charged directly to profit and loss.
In the prior year, exploration and evaluation costs associated with the P2478 Inner Moray Firth Licence,
which amounted to £44,659 and had previously been capitalised, were charged through profit and loss
as an impairment charge. Further exploration and evaluation costs associated with this licence
amounting to £5,356 have been incurred in the year. These further costs have been charged directly to
profit and loss.
11 Investments
Company
| 2022 | ||
| £ | ||
| 2021 | ||
| £ | ||
| Investments in subsidiaries | ||
| 7,030 | ||
| 7,030 |
| Subsidiaries | £ |
| Cost or valuation | |
| At 1 July 2021 and 30 June 2022 | |
| 7,030 | |
| Carr | |
y | |
| in | |
g | |
| amount | |
| At 30 June 2021 and 30 June 2022 | |
| 7,030 |
The balance, which primarily relates to Upland Resources (UK Onshore) Limited (UK
Onshore)will be written off in Company accounts to correspond with Group
accounting for project interests owned by UK Onshore. In prior years those project
interests were fully impaired.
Page 31
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
11 Investments (continued)
Details of undertakings
| Undertaking | |||
| Holding | |||
| Proportion of | |||
| voting rights and | |||
| shares held | |||
| Principal activity | |||
| Subsidiary undertakings | |||
| Upland Resources (UK | |||
| Onshore) Limited* | |||
| Ordinary | |||
| 100% | |||
| Petroleum exploration and | |||
| development | |||
| Upland (Saouaf) Limited | |||
| Ordinary | |||
| 100% | |||
| Petroleum exploration and | |||
| development | |||
| Upland (N Tunisia) | |||
| Limited* | |||
| Ordinary | |||
| 100% | |||
| Dormant | |||
| Upland (S Tunisia) | |||
| Limited* | |||
| Ordinary | |||
| 100% | |||
| Dormant | |||
| Upland (Ksar Hadada) | |||
| Limited | |||
| Ordinary | |||
| 100% | |||
| Dormant | |||
| Upland Resources | |||
| (Sarawak) Sdn Bhd* | |||
| Ordinary | |||
| 100% | |||
| Being reactivated, formerly | |||
| dormant |
* indicates a direct investment of the Company.
All the subsidiary undertakings are incorporated in the UK, other than Upland Resources (Sarawak)
Sdn Bhd, which is incorporated in Malaysia.
12 Debtors
| 2022 | ||
| £ | ||
| 2021 | ||
| £ | ||
| Prepayments | ||
| 7,185 | 8,327 | |
| Total current trade and other debtors | ||
| 7,185 | 8,327 |
13 Cash and cash equivalents
| 2022 | ||
| £ | ||
| 2021 | ||
| £ | ||
| Cash at bank | ||
| 305,526 | ||
| 757,988 |
Page 32
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
14 Creditors
| 2022 | ||
| £ | ||
| 2021 | ||
| £ | ||
| Due within one year | ||
| Trade payables | ||
| 154,524 | 134,339 | |
| Other payables | ||
| - | 21,829 | |
| Short-term loan (note 18) | ||
| 150,000 | 150,000 | |
| Accrued expenses | ||
| 266,640 | 224,305 | |
| Trade and other payables | ||
| 571,164 | 530,473 |
15
Financial instruments
The Group’s accounting classification of its financial assets and liabilities is as follows:
| 2022 | 2021 | |
| £ | £ | |
| Financial assets | ||
| Cash and cash equivalents | 305,526 | 757,988 |
| Financial liabilities | ||
| Financial liabilities measured at amortised cost | ||
| Trade and other payables | 571,164 | 530,473 |
Trade and other payables are financial liabilities measured at amortised cost.
Page 33
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
16
Stated capital
| Allotted and called up | ||
| 2022 | ||
| £ | ||
| 2021 | ||
| £ | ||
| Stated capital on 686,768,853 (2021 – 686,768,853) shares of no par | ||
| value | ||
| 8,427,732 | ||
| 8,427,732 |
The Company has one class of ordinary shares which carry no rights to fixed income. Each ordinary
share confers upon the holder: the right to one vote at a meeting of the members of the Company or on
any resolution of the members; the right to an equal share in any dividend paid by the Company; and
the right to an equal share in the distribution of the surplus assets of the Company on its liquidation.
| 2022 | ||
| 2021 | ||
| Number of shares in issue at start of year | 686,768,853 | |
| 619,625,992 | ||
| Number of shares issued in year | - | |
| 67,142,861 | ||
| Number of shares in issue at end of year | 686,768,853 | |
| 686,768,853 |
17
Capital and financial commitments
Group
At the reporting date, Upland (Saouaf) Limited (“Upland Saouaf”) held a 50% interest in the exclusive
Saouaf hydrocarbon exploration and appraisal licence (“the Licence”). That 50% is subject to a Farm
Out Agreement (RNS 21 July 2022). The other 50% interest is held by ETAP (the Tunisian state oil
company). The Licence is to be operated by Upland Saouaf subject to the Farm Out Agreement which
cedes operations to the Farminee. The terms of the Licence committed Upland Saouaf to carry out a
minimum work programme including the acquisition of 300 km of new 2D seismic data. The Licence
was for an initial term of two years, and may have been converted and thereby extended in term at
Upland Saouaf’s option, providing the work commitments of the initial term had been fulfilled within the
two years. Recently, the term of the Licence was extended by one year to 23 December 2022. On 21
October 2022, Upland Saouaf applied for a further extension to 23 December 2023. The decision is
pending. When its term expired, the Company did not replace a bank guarantee issued to the Tunisian
government, as beneficiary, to part-secure the work commitment of its Tunisian subsidiary in respect of
the Saouaf Permit. There may be a risk that the Tunisian government will seek compensation.
Management has received an opinion from its Tunisian legal advisors that the Tunisian government
only has recourse to our Tunisian subsidiary but not to the Company. As a result, management consider
that the possibility of any material outflow to be remote.
In addition, at the reporting date, Upland Resources (UK Onshore) Limited (“Upland UK”) held a 25%
interest in PEDL 299. A cost-sharing arrangement has been put in place under the Joint Operating
Agreement between the co-licencees (INEOS Upstream and Europa Oil & Gas). Recently, INEOS have
Page 34
extended the term of this licence by three years to July 2024. No firm commitments have been
established.
Upland Resources Limited
Notes to the Financial Statements for the Year Ended 30 June 2022 (continued)
18 Related party transactions
The Directors are considered to be the key management personnel of the Company. The fees paid to
the Directors, or their connected companies, during the year are disclosed in note 7. At the balance
sheet date, £120,430 (2021 - £111,476) was outstanding payable to the Directors, or their connected
companies, and included in creditors. Share-based payments made in connection with the Directors
are disclosed in note 8.
As at the year end, the Group owed £150,000 in connection with a loan made to it by a company of
which a Director of the Company was also a director and shareholder. On the death of the Director
during the year, the creditor company ceased to be a related party of the Company. There are no formal
terms agreed in respect of the £150,000 loan. Accordingly, this loan has been treated as interest-free
and repayable on demand in these accounts.
During the year, the Group was charged consultancy fees of £36,000 (2021 - £36,000) by a Director of
the Company. At the balance sheet date, £45,000 (2021 - £27,000) was outstanding payable to the
Director at the year end and included in creditors.
19 Contingent liability
Following the expiry of the $1m bank guarantee issued to the Tunisian government in respect of the
Saoauf Permit, the Group is in breach of the conditions of this permit and it is possible that the Tunisian
authorities may seek compensation of up to this amount as well as for future unfunded
commitments. Management has considered this and has taken legal advice around the scale and
scope of compensation and considers the possibility of material outflows in relation to this matter to be
negligible.
20 Ultimate controlling party
The Directors believe there to be no ultimate controlling party.
21 Events after the reporting date
Details of events after the balance sheet date impacting on the Group are included in the Strategic
Report on pages 5 to 7 of this Annual Report.
Page 35