PETROLIA SE - ANNUAL REPORT 2025
ANNUAL REPORT 25
PETROLIA SE
20
25
ANNUAL REPORT 2025 PETROLIA SE
CONTENT
STATEMENT OF DIRECTORS AND RESPONSIBILITY STATEMENT 05
MANAGEMENT REPORT 07
CORPORATE SOCIAL RESPONSIBILITY 10
FINANCIAL STATEMENTS – GROUP
Consolidated Income Statement 12
Consolidated Statement of Comprehensive Income 13
Consolidated Statement of Financial Position – Assets 14
Consolidated Statement of Financial Position – Equity and Liabilities 15
Consolidated Statement of Changes in Equity 16
Consolidated Statement of Cash Flows 17
Notes to the consolidated financial statements 18
FINANCIAL STATEMENTS – PARENT COMPANY
Statement of profit or loss and other Comprehensive Income 55
Statement of Financial Position 56
Statement of Changes in Equity 57
Statement of Cash Flows 58
Notes to the financial statements 59
AUDITOR’S REPORT 83
CORPORATE GOVERNANCE REPORT 91
4
RESPONSIBILITY
STATE
MENT
04
ANNUAL REPORT 2025 PETROLIA SE
05
STATE
MENT
RESPONSIBILITY STATEMENT
STATEMENT OF THE MEMBERS OF THE
BOARD OF DIRECTORS AND OTHER
RESPONSIBLE PERSONS OF PETROLIA
SE FOR THE FINANCIAL STATEMENTS
IN THE ANNUAL REPORT FOR THE YEAR
ENDING 31 DECEMBER 2025
In accordance with Article 9, sections (3)
(c) and (7) of the Cyprus Transparency
Requirements (Securities for Trading on
Regulated Market) Law of 2007 (“Law”),
we, the members of the Board of Directors
and the other responsible persons for the
consolidated and separate financial state
-
ments of Petrolia SE for the year ended 31
December 2025, confirm that, to the best of
our knowledge:
(a) the annual consolidated and separate
financial statements that are presented on
pages 12 to 81:
•
(i) were prepared in accordance with
the International Financial Reporting
Standards as adopted by the European
Union, and in accordance with the pro-
visions of Article 9, section (4), of the
Law; and
•
(ii) give a true and fair view of the assets
and liabilities, the financial position and
the profit or losses of Petrolia SE and
the undertakings included in the consol-
idated accounts taken as a whole; and
(b) the Management Report gives a fair review
of the developments and performance of
the business and the financial position of
Petrolia SE and the undertakings included in
the consolidated accounts taken as a whole
together with a description of the principal
risks and uncertainties that they are facing.
RESPONSIBILITY
STATEMENT
Limassol, 27th of April 2026
Berge Gerdt Larsen
Chair of the Board
Polycarpos Protopapas
Board member
Managing director
Sjur Storaas
Board member
Marios Tornaritis
Finance manager
George Hadjineophytou
Board member
6
MANAGEMENT
06
REPORT
ANNUAL REPORT 2025 PETROLIA SE
07
MANAGEMENT REPORT
INTRODUCTION AND STRATEGY
Petrolia SE Group, which comprises Petrolia
SE (“Petrolia” or the "Company”) and its
subsidiaries (together referred to as the
“Group”) has two business divisions: Energy
and Energy Service. Petrolia SE is listed on
the Oslo Stock Exchange under the ticker
code PSE.
Energy division
The Energy division focuses primarily on
exploration for and production of oil and gas.
Petrolia is the largest shareholder (49.9%)
of Petrolia NOCO AS ("PNO"), an inde-
pendent E&P company on the Norwegian
Continental Shelf ("NCS") and an associate
of the Company. The company is a Licence
Partner and Operator and is registered on
NOTC. PNO has various licence shares and
has made one commercial discovery. The
acquisition of a 12.26% interest in Brage
was completed on 29 December 2023. PNO,
in its published unaudited condensed interim
financial statements for Q4 2025, reported
that net production to PNO in Q4 2025 was
2,084 boe per day.
Energy Service division
The Energy Service division has since 2007
primarily focused on well services for oil
and gas drilling, mainly through the global
Independent Oil Tools AS Group ("IOT"), a
subsidiary of the Company. Well services are
also provided for thermo and salt drilling.
The Group owns one landrig, drills and per-
forms workover on land wells as a drilling
contractor with this rig and hired in rigs
whenever drilling contracts are secured.
Through CO2 Management AS, the division is
involved with managing CO2 reduction pro-
jects as well as Carbon Capture, Utilisation
and Storage (CCUS) activities.
The subsurface competence of PNO may
be used for CO2 Storage Wells on the NCS.
ANALYSIS OF THE FINANCIAL STATEMENTS
Petrolia SE presents its financial information
in USD.
Financial information, Group
Total revenue amounted to USD 60.4 million for
the fiscal year 2025 (2024: USD 53.5 million),
mainly relating to the Energy Service segment.
Operating profit for the Group in 2025
amounted to USD 4.5 million, after deduction
of depreciation of USD 7.7 million. Operating
profit for the Group in 2024 amounted to USD
5.9 million, after deduction of depreciation
of USD 7.2 million and impairment of fixed
assets of USD 0.8 million. Profit after tax
for the Group amounted to USD 5.2 million
in 2025 (2024: USD 3.3 million).
As at 31 December 2025, the total assets of
the Group amounted to USD 77.8 million. Total
assets of the Group amounted to USD 63.1
million as at 31 December 2024.
Total equity of the Group amounted to USD
50.2 million as at 31 December 2025, including
a minority interest of USD 1.8 million.
Total equity of the Group amounted to USD
42.6 million as at 31 December 2024, including
a minority interest of USD 1.8 million.
As at 31 December 2025, the total number
of shares outstanding in Petrolia SE was
59,133,786 with par value USD 0.10 each.
Cash inflows from operating activities were
USD 10.2 million in 2025 (2024: USD 11.5
million). Cash outflows from investing activi-
ties were USD 0.7 million in 2025 (2024: USD
2.9 million). Cash outflows from financing
activities in 2025 were USD 6.3 million (2024:
USD 5.9 million) mainly related to interest,
lease interest and lease instalments.
Total cash position as at 31 December 2025
was USD 17.1 million (2024: USD 13.4 million).
This included restricted cash of USD 707
thousand (2024: 213 thousand).
Financial information, Parent
Total revenues amounting to USD 171 thou-
sand for 2025 (2024: USD 162 thousand),
related to management (USD 122 thousand)
and consultancy (USD 49 thousand) fees
for the rendering of services to the Group
by the Norwegian branch.
Operating loss for the parent company
amounted to USD 1.7 million (2024: profit
of USD 1.6 million).
Profit after tax for the parent amounted to
USD 3.6 million (2024: profit of USD 6.4
million).
As at 31 December 2025, the total assets
of the Parent amounted to USD 44.7 million
of which investments in subsidiaries were
USD 39.3 million, loan assets was USD 4.9
million, cash at bank was USD 0.3 million and
investment in associate was USD nil.
Total equity of the Parent amounted to USD
43.9 million as at 31 December 2025 (2024:
USD 40.3 million).
As at 31 December 2025, the total number
of shares outstanding in Petrolia SE was
59,133,786, with par value USD 0.10 each.
Cash outflows from operating activities were
USD 2.2 million in 2025 (2024: outflows of
USD 0.7 million). Cash inflows from investing
activities were USD 0.9 million (2024: inflows
of 0.8 million). Cash outflows from financing
activities were USD 76 thousand (2023: USD
68 thousand).
Total cash position as at 31 December 2025
was USD 0.4 million (2024: USD 1.8 million).
This included restricted cash of USD 30 thou-
sand (2024: 28 thousand).
FINANCIAL AND LIQUIDITY RISK
The Group’s long-term financing is mainly
bank loans totalling USD 1.7 million (Note
21) and leases of equipment totalling USD
4.4 million (Note 19). The Group also has
leases of land and buildings totalling USD
8.5 million (Note 19).
Additional information on liquidity risk is pre-
sented in Note 23.
GOING CONCERN
Management has conducted a review of the
going concern assumption considering all rel-
evant information available up to the date the
consolidated and parent financial statements
MANAGEMENT REPORT
ANNUAL REPORT 2025 PETROLIA SE
08
MANAGEMENT REPORT
were issued, taking into account all available
information about the future, for at least 12
months from the reporting date.
The forecast cash flows from the Energy
Service division provide sufficient cash flows
and the Group expects to be in a position to
serve its working capital needs and other
obligations as and when they fall due. These
forecasts have been made based on past
experiences and detailed knowledge of the
local markets.
The Group’s management remains confident
in the Group’s ability to continue to adapt cost
levels to the activity and to maintain sufficient
financial resources to enable it to continue as
a going concern for the foreseeable future.
Following its review, management confirms
that the requirements of the going concern
assumption are met and that these financial
statements have been prepared on that basis.
WORKING ENVIRONMENT AND PERSONNEL
Petrolia SE has five employees, three men
and two women.
In total, the Group had 214 highly competent
employees worldwide as at 31 December
2025. The Group is an equal opportunity
employer and will not tolerate discrimination.
Recruitment, promotion and reward are based
entirely on merit.
There have not been any serious accidents
reported in the Group in 2025.
Petrolia’s Board of Directors consisted of 4
men as at 31 December 2025.
ENVIRONMENT REPORTING
The Group’s objective is that all of its activities
are carried out with the minimum of risk to
people or damage to the surroundings. The
Group’s activities during 2025 have con-
formed with the demands of the prevailing
authorities in its worldwide operations.
Based on the current transposition of the
Corporate Sustainability Reporting Directive
(CSRD) into Cypriot law, the Group is no
longer required to prepare sustainability
reporting in accordance with CSRD require-
ments. Nevertheless, the Group will continue
to monitor regulatory and legislative de-
velopments at both EU and national level
and will consider the adoption of voluntary
sustainability reporting, where appropriate.
In parallel, the Group will continue to assess
and consider the impacts of climate-related
matters on its financial position and perfor-
mance, as reflected in its financial statements,
in accordance with applicable financial re-
porting requirements.
CORPORATE GOVERNANCE STATEMENT
The Board believes it is important that the
Group is run and managed on sound principles
of Corporate Governance. Reference is made
to the section on Corporate Governance in
this report.
As Petrolia is listed on the Oslo Stock
Exchange, it follows the Norwegian Code of
Practice for Corporate Governance of 28
August 2025.
Significant shareholders are present-
ed in note 17 to the consolidated financial
statements.
As at 31 December 2025 and as at 23 April
2026, the directors who held shares in the
Company are shown in note 17.
There are no restrictions in voting rights
or special control rights in relation to the
shares of the Company.
Any amendment or addition to the Articles
of Association of the Company is only valid if
approved by a special resolution at a share-
holders’ meeting.
The rules governing the composition of the
Board of Directors, appointment and re-
placement of its members and holding of
Company’s shares are set out in Section 8 of
the Corporate Governance Report for 2025.
The powers of the Board of Directors and
its Audit and Remuneration Committees are
also set out in section 9 of the Corporate
Governance Report.
The Company, through internal controls im-
plemented by management and supervised by
the Audit Committee, implemented effective
procedures for the composition and prepa-
ration of financial statements and periodic
information, as provided by the Laws and
Regulations of listed companies. In addition
to the above, the main features of these pro-
cedures, are as follows:
•
The financial statements of the Group
companies and the consolidated financial
statements are prepared with the respon-
sibility of the Chief Financial Officer and
reviewed by the Audit Committee.
•
The periodic announcements of the Company
and the detailed explanatory notes are
prepared by the Chief Financial Officer and
reviewed by the Audit Committee.
•
The financial statements and the periodic
announcements are approved by the Board
of Directors prior to their publication.
EXISTENCE OF BRANCHES
To facilitate its operations, the Company has
established a branch in Norway.
CHANGES IN SHARE CAPITAL
There have been no changes to the share
capital during 2025.
BOARD OF DIRECTORS
The members of the Company’s Board of
Directors as at 31 December 2025 and at the
date of this report are Berge Gerdt Larsen,
Sjur Storaas, George Hadjineophytou and
Polycarpos Protopapas.
The Annual General Meeting on 29 May 2025
re-elected Mr Berge Gerdt Larsen, Mr Sjur
ANNUAL REPORT 2025 PETROLIA SE
Storaas, Mr George Hadjineophytou and
Mr Polycarpos Protopapas as directors of
the Board.
In accordance with the Company’s Articles of
Association, all Directors who are presently
members of the Board will continue in office
until the next Annual General Meeting and
are eligible for re-election.
The Directors’ interests in shares of the
Company is disclosed in note 17 of the
financial statements.
INDEPENDENT AUDITOR
The independent auditors of the Company,
Ernst & Young Cyprus Limited, have expressed
their willingness to continue in office. A res-
olution proposing the firm’s re-appointment
and authorising the Directors to set the remu-
neration for audit services will be proposed at
the Annual General Meeting of the Company.
EVENTS AFTER THE REPORTING PERIOD
Please refer to note 28.
09
MANAGEMENT REPORT
Limassol, 27th of April 2026
Berge Gerdt Larsen
Chair of the Board
Polycarpos Protopapas
Board member
Managing director
Sjur Storaas
Board member
Marios Tornaritis
Finance manager
George Hadjineophytou
Board member
10
ANNUAL REPORT 2025 PETROLIA SE
THE BOARD OF DIRECTORS'
REPORT ON CORPORATE SOCIAL
RESPONSIBILITY
In this report, we disclose information relating
to our CORPORATE SOCIAL RESPONSI-
BILITY (‘CSR’) policy and performance of
this policy in 2025. This report relates to
the period 1 January 2025 to 31 Decem-
ber 2025 and should be read as part of the
Company’s Annual Report for 2025. During
2025, the Group had subsidiaries in Cyprus,
Norway, The Netherlands, the UK, Romania,
Australia, New Zealand, Iraq, Malaysia, and
UAE, therefore most of the information in
this CSR report relates to the Group’s op-
erations in these countries. Our approach to
CSR focuses on the way in which we conduct
relationships with all of our stakeholders
and the wider impact that we can have on
society and the environment. In this context,
we continuously address the following key
aspects of our business:
HEALTH & SAFETY
The safety of our employees, contractors,
partners and all our stakeholders is of utmost
importance to the Group. We aim to employ
high Health & Safety standards to our op-
erations. All our employees and contractors
have the responsibility and the authority to
stop any unsafe work. Our contracts include
health and safety requirements consistent
with our code of conduct. Our main objective
is that all our activities are carried out with
the minimum of risk to people or damage to
the environment and our safety and opera-
tional risk team works together to achieve
this objective. Incidents and near misses are
required to be reported and investigated.
We are pleased to report that during 2025,
no incident of pollution to the environment
was reported and the Group conformed with
the safety and environmental demands of
the prevailing authorities in its worldwide
operations. We continued to have an excel
-
lent health and safety record with no major
injuries or fatalities in 2025.
ENVIRONMENT & SUSTAINABILITY
We recognise the potential to damage the
environment through our operations and
our responsibility to implement effective
management to safeguard the environment
by minimising such an impact. We have ca-
pable people to manage such risks at every
stage. We are committed to making a positive
contribution to global sustainability and to
protect the environment. We aim to operate to
the highest international social, environmental
and safety standards within the industry and
believe that it is important to make a positive
contribution to all the geographical areas
where we operate. Climate change and the
transition to a lower carbon economy has
been identified as a possible risk and an
opportunity but presently does not materially
affect our accounts. Our subsidiary, CO2
Management AS aims to mitigate this risk by
taking steps to reduce the Group’s carbon
footprint and in addition, makes investments
aimed at reducing CO2 emissions, including
Carbon Capture & Storage (CCS).
EMPLOYEES
Our ability to create sustainable shareholder
value is linked to our ability to recruit, moti-
vate and retain highly competent employees.
People continue to be our most important
asset. The Group is an equal opportunities
employer and will not tolerate discrimination
in recruitment, advancement and remuner-
ation in the workplace. We have a shared
commitment with employees to create a safe
working environment where there is respect
for others, and we are responsive to employee
needs. Employees are encouraged to speak up
if they have any concerns through our Whistle
Blowing Policy. Recruitment, promotion and
reward are entirely based on merit. We believe
in shared prosperity and wherever possible,
we employ nationals of our host countries.
COMMUNITY AND HUMAN RIGHTS
Our continuous presence in several different
territories brings challenges, which we meet
through the application of our existing ap-
proach and policies. We aim to have a positive
and enduring impact on the communities in
which we operate and contribute to their
development. We invest in our relationships
with the local communities and ensure that
all our activities are conducted with absolute
respect to these communities. We contrib-
ute to these communities by employing local
staff and cooperating with local suppliers
wherever possible. We respect internation-
ally recognised human rights, and we set
our commitments in our human rights policy
and our Code of Conduct. All our initiatives
during 2025 were focused on health and social
involvement across our operating regions.
BUSINESS CONDUCT
CSR encompasses the Company’s manage-
ment of relationships with shareholders,
employees, contractors, partners and the
local communities where we work, together
with the impact it has on society and the
environment. In this respect, we have a re-
sponsibility to ensure that we deliver our
business objectives in a way that benefits
all our stakeholders. In recognition of this
responsibility, we have robust policies and
systems in place, which are continuously
reviewed. We aim for the highest standards
of business conduct across all our worldwide
operations. Our CSR policy aims to ensure
a responsible and transparent performance
of our business in all the areas in which we
operate. It reflects our commitment to gen-
erate and sustain long-term value growth
for the Company, whilst creating long last-
ing legacies in local communities. Operating
to high international social, environmental
and safety standards and maintaining high
standards of corporate governance is a key
requirement of our policy. Our Code of Conduct
ensures that we compete fairly and explicitly
prohibits engaging in any form of bribery or
corruption whilst our Integrity Due Diligence
procedures ensure that we select our busi-
ness partners carefully and do not expose
the Group to any reputational risk with zero
tolerance for unethical business practices.
We also prohibit the use of funds to support
political parties.
CORPORATE GOVERNANCE
We continue to operate with high standards
of corporate governance, which helps us
deliver our strategic objectives. We are com-
mitted to protecting the interests of all our
stakeholders through complete and absolute
compliance with the relevant legal and regu-
latory environments and through the effective
management of risk.
Every effort has been made to ensure that in-
formation contained in this report is accurate.
ANNUAL REPORT 2025 PETROLIA SE
11
FINANCIAL
STATEMENTS
GROUP
12
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS
Petrolia SE – Group
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2025
(Amounts in USD 1,000)
Note 2025 2024
Revenue from contracts with customers 5 60,350 53,468
Wages cost 6 -16,796 -15,257
Other operating expenses 7 -31,383 -24,388
Operating result before depreciation and impairments 12,171 13,823
Depreciation 11 -7,677 -7,192
Net impairment of fixed assets 11 0 -754
Operating result 4,494 5,877
Result from associated companies 12 -912 0
Interest income 8 1,110 924
Financial income 8 2,450 80
Interest expenses 8 -939 -799
Financial expenses 8 -9 -2,096
Result before income taxes 6,194 3,986
Income tax 9 -963 -709
Result for the year 5,231 3,277
Attributable to:
Equity holders of the parent 5,449 3,975
Non-controlling interests -218 -698
5,231 3,277
Attributable to the equity holders (USD per share)
Earnings per share (Basic and diluted, from continuing operations) 10 0.09 0.07
FINANCIAL STATEMENTS / GROUP
13
ANNUAL REPORT 2025 PETROLIA SE
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2025
(Amounts in USD 1,000) Note 2025 2024
Result for the year 5,231 3,277
Other comprehensive income:
Other comprehensive income to be reclassified to profit or loss in subsequent periods
(net of tax):
Exchange differences on translation of foreign operations 2,353 -729
Other comprehensive income that will not be reclassified to profit or loss in subse-
quent periods (net of tax):
Loss on equity instruments designated at fair value through other comprehensive
income
13 0 -1,004
Total comprehensive income for the year, net of tax 7,584 1,544
Attributable to:
Equity holders of the parent 7,523 2,390
Non-controlling interests 61 -846
Total comprehensive income for the year 7,584 1,544
FINANCIAL STATEMENTS / GROUP
14
ANNUAL REPORT 2025 PETROLIA SE
ASSETS (Amounts in USD 1,000) Note 2025 2024
Non-current assets
Goodwill 249 249
Right of use assets 11 14,977 12,369
Land and buildings 11 1,619 1,499
Energy Service and other equipment 11 16,248 12,865
Land rigs 11 724 1,071
Investment in associated companies 12 8 0
Restricted cash 16 463 8
Total non-current assets 34,288 28,061
Current assets
Inventory 26 2,088 1,834
Trade receivables 14 16,947 13,035
Other current receivables 14 2,822 1,488
Other financial assets 13 4,949 5,212
Financial assets at fair value through profit or loss 15 57 33
Free cash 16 16,407 13,184
Restricted cash 16 244 205
Total current assets 43,514 34,991
TOTAL ASSETS 77,802 63,052
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2025
FINANCIAL STATEMENTS / GROUP
15
ANNUAL REPORT 2025 PETROLIA SE
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2025
EQUITY AND LIABILITIES (Amounts in USD 1,000)
Note 2025 2024
Equity
Share capital 17 5,913 5,913
Own shares 17 -39 -39
Share premium 12,222 12,222
Other reserves 30,251 22,728
Equity attributable to equity holders of the parent 48,347 40,824
Non-controlling interests 1,834 1,773
Total equity 50,181 42,597
Liabilities
Non-current liabilities
Lease liabilities 19 8,615 5,372
Bank loans 21 1,316 756
Deferred tax liabilities 9 523 296
Other non-current liabilities 230 213
10,684 6,637
Current liabilities
Lease liabilities 19 4,297 4,655
Trade payables 20 4,208 3,217
Other payables 20 7,992 5,455
Bank loans and overdraft 21 375 258
Income tax payable 65 233
16,937 13,818
Total liabilities 27,621 20,455
TOTAL EQUITY AND LIABILITIES 77,802 63,052
FINANCIAL STATEMENTS / GROUP
Limassol, 27th of April 2026
Berge Gerdt Larsen
Chair of the Board
Polycarpos Protopapas
Board member
Managing director
Sjur Storaas
Board member
Marios Tornaritis
Finance manager
George Hadjineophytou
Board member
16
ANNUAL REPORT 2025 PETROLIA SE
Attributable to equity holders of the parent
(Amounts in USD 1,000)
Share
capital
Own
shares
Share
premium
Reorgan-
isation
reserve
Retained
earnings
Fair value
reserve
of
financial
assets at
FVOCI
Currency
transla-
tion
Subtotal Non-
con-
trolling
interests
Total
equity
Equity 1 January 2024 5,913 -39 12,222 -15,075 33,008 482 1,923 38,434 2,619 41,053
Profit/(loss) for the year 0 0 0 0 3,975 0 0 3,975 -698 3,277
Other comprehensive income
Loss on equity instruments
designated at fair value
through other comprehensive
income (Note 13)
0 0 0 0 0 -1,004 0 -1,004 0 -1,004
Exchange differences
on translation of foreign
operations
0 0 0 0 0 0 -581 -581 -148 -729
Total comprehensive income/
(loss)
0 0 0 0 3,975 -1,004 -581 2,390 -846 1,544
Equity 31 December 2024 5,913 -39 12,222 -15,075 36,983 -522 1,342 40,824 1,773 42,597
Profit/(loss) for the year 0 0 0 0 5,449 0 0 5,449 -218 5,231
Other comprehensive income
Exchange differences
on translation of foreign
operations
0 0 0 0 0 0 2,074 2,074 279 2,353
Total comprehensive income 0 0 0 0 5,449 0 2,074 7,523 61 7,584
Equity 31 December 2025 5,913 -39 12,222 -15,075 42,432 -522 3,416 48,347 1,834 50,181
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2025
FINANCIAL STATEMENTS / GROUP
17
ANNUAL REPORT 2025 PETROLIA SE
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2025
FINANCIAL STATEMENTS / GROUP
(Amounts in USD 1,000) Note 2025 2024
Operating activities
Profit before taxes 6,194 3,986
Allowance/(reversal) of expected credit losses 7 226 -412
Profit on disposal of property, plant and equipment 11 -1,365 -223
Depreciation of property, plant and equipment and right of use assets 11 7,677 7,192
Impairment of property, plant, equipment 11 0 754
Interest income 8 -1,110 -924
Change in financial assets at fair value through profit or loss 8 -24 2
Interest expense on lease liabilities 8 879 746
Other interest expenses 8 60 53
Change in inventory -254 -151
Change in trade receivables -3,912 1,899
Change in other current receivables -1,440 -201
Change in trade payables 991 -800
Change in other payables 2,537 -369
Change in other non-current liabilities 17 -21
Result from investment in associated companies 12 912 0
Income tax paid -770 -1,158
Other, including unrealised foreign currency gain -390 1,108
Net cash generated from operating activities 10,228 11,481
Investing activities
Purchase of fixed assets 11 -4,085 -4,640
Disposal of equipment 11 3,197 769
Dividends 5 4
Investment in associate 12 -920 0
Interest received 1,110 924
Net cash used in investing activities -693 -2,943
Financing activities
Increase in restricted cash -494 -1
Leasing instalments (capital) 23 -5,421 -5,558
Other interest paid 8 -60 -53
Interest paid on lease liabilities 19 -879 -746
Bank loan, drawn down 23 834 633
Bank loan, repaid 23 -292 -224
Net cash used in financing activities -6,312 -5,949
Net cash flow of the period 3,223 2,589
Free cash and cash equivalents at the beginning of the period 16 13,184 10,595
Free cash and cash equivalents balance at 31 December 16 16,407 13,184
18
ANNUAL REPORT 2025 PETROLIA SE
2.1 BASIS OF PREPARATION
The consolidated financial statements of
Petrolia SE have been prepared in compli-
ance with IFRS Accounting Standards as
endorsed by the EU and the requirements of
the Cyprus Companies Law, Cap.113.
The consolidated financial statements have
been prepared under the historical cost
convention with the following modification:
Financial assets recognised at fair value
through profit or loss and financial assets
at fair value through other comprehensive
income.
The preparation of financial statements in
conformity with IFRS Accounting Standards
requires the use of certain critical account-
ing estimates. It also requires management
to exercise its judgement in the process of
applying the Group’s accounting policies. The
areas involving a higher degree of judgement
or complexity, or areas where assumptions
and estimates are significant to the consol-
idated financial statements are discussed
in note 3 below.
The consolidated financial statements are
presented in United States Dollars (USD)
and all values are rounded to the nearest
thousand (USD 1,000), except when other-
wise indicated.
The accounting year follows the calendar year.
FAIR VALUE MEASUREMENT
Fair value is the price that would be received
from the sale of an asset or paid to transfer
a liability in an orderly transaction between
market participants at the measurement date.
The fair value measurement is based on the
presumption that the transaction whereby
an asset is sold, or a liability is transferred
takes place either in the principal market for
the asset or liability or in the absence of a
principal market, in the most advantageous
market for the asset or liability.
The principal or the most advantageous
market must be accessible by the Group.
The fair value of an asset or a liability is
measured using the assumptions that market
participants would use when pricing the asset
or liability, assuming that market participants
act in their economic best interest. A fair
value measurement of a non-financial asset
takes into account a market participant's
ability to generate economic benefits by using
the asset in its highest and best use or by
NOTE 1 GENERAL INFORMATION
NOTES - GROUP
to the consolidated financial statements
Petrolia SE (the "Company") is a European
public limited company organised under the
laws of Cyprus. The Company's registered
office is at 205 Christodoulou Chatzipavlou
Street, Loulloupis Court, 4th floor, office 401,
3036 Limassol, Cyprus. The Company also has
a Norwegian branch with registered office at
Haakon VIIs gate 1 (2. etg.), Oslo, Norway.
The main activity of the Group is the sale
and rental of energy service equipment to
the global energy industry.
The annual financial statements were adopt-
ed by the Board of Directors on the 27th of
April 2026 and will be passed to the Annual
General Meeting for approval.
Petrolia SE was established on the 26th of
October 2012 as a result of the merger be-
tween Petrolia ASA (established on the 13th
of March 1997) and Petrolia E&P Holdings
Plc. The consolidated financial statements for
the financial year 2025 comprise the Company
and its subsidiaries and the Group’s share
of associated companies. The Company is
listed on the Oslo Stock Exchange with
ticker "PSE" and ISIN "CY 010 263 0916".
The table below presents general ESEF data.
NOTE 2 MATERIAL ACCOUNTING POLICIES
Domicile of entity Limassol Principal place of business Cyprus
Legal form of entity European public limited company
Description of nature of entity's
operations and principal activities
The main activity of the Group
is the sale and rental of
energy service equipment to
the global energy industry
Country of incorporation Cyprus Name of parent entity Petrolia SE
Address of entity's registered
office
205 Christodoulou Chatzipavlou
Street, Loulloupis Court
Name of ultimate parent of group
Petrolia SE
FINANCIAL STATEMENTS / GROUP / NOTES
19
ANNUAL REPORT 2025 PETROLIA SE
selling it to another market participant that
would use the asset in its highest and best
use. The Group uses valuation techniques
that are appropriate in the circumstances
and for which sufficient data are available
to measure fair value, maximising the use of
relevant observable inputs and minimising the
use of unobservable inputs. All assets and
liabilities for which fair value is measured
or disclosed in the consolidated financial
statements are categorised within the fair
value hierarchy, described in note 18.
GOING CONCERN
Management has conducted a review of the
going concern assumption considering all
relevant information available up to the date
the consolidated and parent financial state-
ments were issued, taking into account all
available information about the future, for
at least 12 months from the reporting date.
The forecast cash flows from the Energy
Service division provide sufficient cash flows
and the Group expects to be in a position to
serve its working capital needs and other
obligations as and when they fall due. These
forecasts have been made based on past
experiences and detailed knowledge of the
local markets.
The Group’s management remains confident
in the Group’s ability to continue to adapt cost
levels to the activity and to maintain sufficient
financial resources to enable it to continue as
a going concern for the foreseeable future.
Following its review, management confirms
that the requirements of the going concern
assumption are met and that these financial
statements have been prepared on that basis.
2.2 BASIS OF CONSOLIDATION
The consolidated financial statements com-
prise the financial statements of the Company
and its subsidiaries as at 31 December 2025.
Control is achieved when the Group is ex-
posed, or has rights, to variable returns from
its involvement with the investee and has
the ability to affect those returns through
its power over the investee. Specifically, the
Group controls an investee if, and only if, the
Group has:
•
power over the investee (i.e., existing
rights that give it the current ability
to direct the relevant activities of the
investee)
•
exposure, or rights, to variable returns
from its involvement with the investee
• ability to use its power over the investee
to affect its returns
Generally, there is a presumption that a
majority of voting rights results in control.
To support this presumption and when the
Group has less than a majority of the voting
or similar rights of an investee, the Group
considers all relevant facts and circumstances
in assessing whether it has power over an
investee, including:
• the contractual arrangement(s) with the
other vote holders of the investee
•
rights arising from other contractual
arrangements
•
the Group’s voting rights and potential
voting rights
The Group re-assesses whether or not it
controls an investee if facts and circum-
stances indicate that there are changes to
one or more of the three elements of control.
Consolidation of a subsidiary begins when the
Group obtains control over the subsidiary
and ceases when the Group loses control
of the subsidiary. Assets, liabilities, income
and expenses of a subsidiary acquired or
disposed of during the year are included in
the consolidated financial statements from the
date the Group gains control until the date
the Group ceases to control the subsidiary.
Profit or loss and each component of other
comprehensive income (OCI) are attributed
to the equity holders of the parent of the
Group and to the non-controlling interests,
even if this results in the non-controlling
interests having a deficit balance. When nec-
essary, adjustments are made to the financial
statements of subsidiaries to bring their
accounting policies in line with the Group’s
accounting policies. All intra-group assets
and liabilities, equity, income, expenses and
cash flows relating to transactions between
members of the Group are eliminated, in full,
on consolidation.
A change in the ownership interest of a sub-
sidiary, without a loss of control, is accounted
for as an equity transaction.
If the Group loses control over a subsidiary,
it derecognises the related assets (including
goodwill), liabilities, non-controlling interest
and other components of equity, while any
resultant gain or loss is recognised in profit
or loss. Any investment retained is recognised
at fair value.
2.3 MATERIAL ACCOUNTING POLICIES
The material accounting policies applied in the
preparation of these consolidated financial
statements are set out below. These policies
have been consistently applied to all the
years presented, unless otherwise stated.
BUSINESS COMBINATIONS AND GOODWILL
a) Business combinations and goodwill
Business combinations are accounted for
using the acquisition method. The cost of an
acquisition is measured as the aggregate of
the consideration transferred measured at
acquisition date fair value and the amount of
any non-controlling interest in the acquiree.
For each business combination, the Group
elects whether to measure the non-controlling
interest in the acquiree at fair value or at
the proportionate share of the acquiree’s
identifiable net assets. Acquisition-related
costs are expensed as incurred and included
in administrative expenses.
Goodwill is initially measured at cost, being the
excess of the aggregate of the consideration
transferred and the amount recognised for
non-controlling interest over the net identifi-
able assets acquired and liabilities assumed.
If the fair value of the net assets acquired
is in excess of the aggregate consideration
transferred, the gain is recognised in profit
or loss.
After initial recognition, goodwill is measured
at cost less any accumulated impairment
losses.
b) Investment in associate
The group holds an interest in an associate,
Petrolia NOCO AS. The financial statements
of the associate are prepared for the same
reporting period as the Group. The accounting
policies of the company are aligned with those
FINANCIAL STATEMENTS / GROUP / NOTES
20
ANNUAL REPORT 2025 PETROLIA SE
of the Group. Therefore, no adjustments are
made when measuring and recognising the
Group’s share of the profit or loss of the
investees after the date of acquisition. The
aggregate of the Group’s share of profit or
loss of an associate is shown on the face
of the statement of profit or loss outside
operating profit and represents profit or
loss after tax and non-controlling interests
in the subsidiaries of the associate. Goodwill
relating to the associate or joint venture
is included in the carrying amount of the
investment and is not tested for impairment
separately. Thus, reversals of impairments
may effectively include reversal of goodwill
impairments.
If an entity’s share of losses of an associate
equals or exceeds its interest in the associate,
the entity discontinues recognising its share
of further losses. The interest in an associate
is the carrying amount of the investment in the
associate determined using the equity method
together with any long-term interests that,
in substance, form part of the entity’s net
investment in the associate or joint venture.
Impairments and reversals are presented
within ‘Share of profit of an associate and a
joint venture’ in the statement of profit or loss.
FOREIGN CURRENCY TRANSLATION
Functional and presentation currency
Items included in the financial statements of
each of the Group’s entities are measured
using the currency of the primary economic
environment in which the entity operates
(‘the functional currency’). The consolidated
financial statements are presented in USD.
The functional and presentation currency of
the parent company is USD.
Converting from a functional currency other
than USD will normally result in conversion
differences in the consolidated financial
statements.
Transactions and balances
Foreign currency transactions are trans
-
lated into the functional currency using the
exchange rates prevailing at the dates of
the transactions or valuation where items
are remeasured. Foreign exchange gains
and losses resulting from the settlement of
such transactions and from the translation at
year-end exchange rates of monetary assets
and liabilities denominated in foreign curren-
cies are recognised in the income statement
under financial income / financial expenses.
Non-monetary items that are measured in terms
of historical cost in a foreign currency are
translated using the exchange rates at the dates
of the initial transactions. Non-monetary items
measured at fair value in a foreign currency
are translated using the exchange rates at the
date when the fair value is determined. The gain
or loss arising on translation of non-monetary
items measured at fair value is treated in line
with the recognition of the gain or loss on the
change in fair value of the item (i.e., translation
differences on items whose fair value gain
or loss is recognised in OCI or profit or loss
are also recognised in OCI or profit or loss,
respectively).
Group companies
The results and financial position of all the
Group entities that have a functional currency
different from the presentation currency are
translated into the presentation currency
as follows:
•
assets and liabilities in each statement of
financial position presented are translated
at the closing rate;
•
income and expenses in each income
statement are translated at the average
exchange rates for the period;
•
all resulting exchange differences are
recognised in the statement of compre-
hensive income and as a separate item of
equity (recycled to income statement upon
disposal of the underlying investments).
Currency translation differences on net in-
vestment in foreign operations and financial
instruments designated as hedges of such
investments are recorded as part of the com-
prehensive income and as a separate item in
equity. Goodwill and fair value adjustments
arising on the acquisition of a foreign entity
are treated as assets and liabilities of the for-
eign entity and translated at the closing rate.
REVENUE FROM CONTRACTS WITH CUSTOMERS
Rental of equipment – Service transferred
over time:
The primary business function of the Group
is the rental of equipment for upstream ex-
ploration & production activity, as such, the
primary source of revenue is based on rental
of equipment. The performance obligation
is satisfied over time as the customer si-
multaneously receives and consumes the
benefits provided by the Group. This perfor-
mance obligation has two alternative payment
options. The rental projects that continue
throughout the month (more than 30 days)
are invoiced in bulk at the end of each month,
whereas the projects that terminate prior
to the months end are invoiced ad hoc as
the customer has confirmed the final rental
day. The payment terms vary depending on
the individual contract with customers, but
due dates normally range from 30 to 90 days
from the invoice date.
On projects where the Group does not own
the required equipment, there are contracts
with customers to acquire, on their behalf, the
required equipment from external suppliers.
The Group is acting as principal in these
arrangements.
Services – Service transferred over time:
Service and repairs:
All equipment returned from rental assign-
ments are subject to inspection where it is
determined whether service and/or repair
is required. This performance obligation is
satisfied upon completion of service and
payment is generally due 30 to 90 days upon
completion and acceptance by the customer.
Hire of personnel:
Personnel services comprise casing & tubing
running, drilling and make & brake servic-
es. These services have fixed daily rates in
accordance with individual contracts. The
performance obligation is satisfied over time,
as the customer simultaneously receives
and consumes the benefits provided. This
performance obligation has two alternative
payment options. The projects that continue
throughout the month (more than 30 days)
are invoiced in bulk at the end of each month,
whereas the projects that terminate prior to
the month's end are invoiced ad hoc upon
completion of service. The payment terms
FINANCIAL STATEMENTS / GROUP / NOTES
21
ANNUAL REPORT 2025 PETROLIA SE
vary, depending on individual contract with
customers but due dates normally range from
30 to 90 days from the invoice date.
Sales of goods – Goods transferred at a point
in time:
Procurement services:
There are contracts with customers to
acquire, on their behalf, goods from ex-
ternal suppliers. The Group is acting
as principal in these arrangements be-
cause it typically controls the goods
before transferring them to the custom-
er. The performance obligation is satisfied
upon receipt of the goods by the customer
and payment is generally due 30 to 90 days
upon that date.
Sales of equipment:
When the group sells equipment directly to
customer the performance obligation is sat-
isfied at delivery and payment is generally
due 30-90 days upon this date.
INTEREST INCOME
Interest income is recognised using the
effective interest method. When a loan or
receivable is impaired, the Group reduces the
carrying amount to its recoverable amount.
The recoverable amount is the estimated
future cash flow discounted at the original
effective interest rate. Interest income on
impaired loans is recognised using the original
effective interest rate.
TAXES
The tax expense for the period comprises
current and deferred tax. Tax is recognised
in the income statement, except to the extent
that it relates to items recognised in other
comprehensive income or directly in equity.
In this case, the tax is also recognised in
other comprehensive income or directly in
equity, respectively.
Current income tax
The current income tax charge is calculated
on the basis of the tax laws enacted or sub-
stantively enacted at the balance sheet date
in the countries where the Company’s subsid-
iaries and associates operate and generate
taxable income. Management periodically
evaluates positions taken in tax returns with
respect to situations in which applicable tax
regulation is subject to interpretation. It
establishes provisions, where appropriate,
on the basis of amounts expected to be paid
to the tax authorities.
Deferred income tax
Deferred income tax is recognised, using the
liability method, on temporary differences
arising between the tax bases of assets and
liabilities and their carrying amounts in the
consolidated financial statements. However,
the deferred income tax is not accounted
for if it arises from initial recognition of an
asset or liability in a transaction other than a
business combination that at the time of the
transaction affects neither accounting nor
taxable profit or loss. Deferred income tax
is determined using tax rates (and laws) that
have been enacted or substantially enacted
at the balance sheet date and are expected
to apply when the related deferred income
tax asset is realised, or the deferred income
tax liability is settled.
Deferred income tax assets are recognised
only to the extent that it is probable that future
taxable profit will be available against which
the temporary differences can be utilised.
Deferred income tax is provided on tempo-
rary differences arising on investments in
subsidiaries and associates, except where
the timing of the reversal of the temporary
difference is controlled by the Group and it
is probable that the temporary difference
will not reverse in the foreseeable future.
Deferred income tax assets and liabilities are
offset when there is a legally enforceable right
to offset current tax assets against current
tax liabilities and when the deferred income
tax assets and liabilities relate to income
tax levied by the same taxation authority on
either the taxable entity or different taxable
entities where there is an intention to settle
the balances on a net basis.
Sales tax
Expenses and assets are recognised net of
the amount of sales tax, except:
•
when the sales tax incurred on a purchase
of assets or services is not recoverable
from the taxation authority, in which case
the sales tax is recognised as part of the
cost of acquisition of the asset or as part
of the expense item, as applicable,
•
when receivables and payables are stated
with the amount of sales tax included.
The net amount of sales tax recoverable from,
or payable to, the taxation authority is includ-
ed as part of receivables or payables in the
statement of financial position.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment are stated
at historical cost less depreciation and
impairment.
Depreciation on property, plant and equipment
is calculated using the straight-line method
to allocate their cost to their residual values
over their estimated useful lives.
The assets’ residual values and useful lives
are reviewed and adjusted if appropriate, at
each reporting date. In particular, the Group
considers the impact of health, safety and
environmental legislation in its assessment of
expected useful lives and estimated residual
values. Furthermore, the Group considers
climate-related matters, including physical
and transition risks. Specifically, the Group
determines whether climate-related legis-
lation and regulations might impact either
the useful life or residual values, e.g., by
banning or restricting the use of the Group’s
fossil fuel-driven machinery and equipment
or imposing additional energy efficiency re-
quirements on the Group’s buildings and
office properties. No changes were made
after these evaluations.
An asset’s carrying amount is written down
immediately to its recoverable amount if the
asset’s carrying amount is greater than its
estimated recoverable amount.
Gains on sales of equipment lost in hole or
damaged by customers are determined by
comparing the proceeds with the carrying
amount and are recognised net within ‘other
revenue’ in the income statement.
All other gains and losses are recognised
as profit/loss on disposal of property, plant
and equipment and are included in other
operating expenses.
FINANCIAL STATEMENTS / GROUP / NOTES
22
ANNUAL REPORT 2025 PETROLIA SE
LEASES
The determination of whether an arrange-
ment is, or contains, a lease is based on
the substance of the arrangement at the
inception date. The arrangement is assessed
for whether fulfilment of the arrangement is
dependent on the use of a specific asset or
assets or the arrangement conveys a right
to use the asset or assets, even if that right
is not explicitly specified in an arrangement.
Group as a lessee
The Group applies a single recognition and
measurement approach for all leases, except
for short-term leases and leases of low-value
assets. The Group recognises lease liabilities
to make lease payments and right-of-use
assets representing the right to use the un-
derlying assets.
i) Right-of-use assets
The Group recognises right-of-use assets
at the commencement date of the lease (i.e.,
the date the underlying asset is available
for use). Right-of-use assets are measured
at cost, less any accumulated depreciation
and impairment losses, and adjusted for any
remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount
of lease liabilities recognised, initial direct
costs incurred, and lease payments made at or
before the commencement date less any lease
incentives received. Right-of-use assets are
depreciated on a straight-line basis over the
shorter of the lease term and the estimated
useful lives of the assets, as follows:
•
Energy service and other equipment, 7
years
• Land and buildings, 1 to 10 years
If ownership of the leased asset transfers
to the Group at the end of the lease term or
the cost reflects the exercise of a purchase
option, depreciation is calculated using the
estimated useful life of the asset.
The right-of-use assets are also subject to
impairment. Refer to the accounting policies in
section Impairment of non-financial assets.
ii) Lease liabilities
At the commencement date of the lease, the
Group recognises lease liabilities measured
at the present value of lease payments to be
made over the lease term. In calculating the
present value of lease payments, the Group
uses its incremental borrowing rate at the
lease commencement date because the in-
terest rate implicit in the lease is not readily
determinable. After the commencement date,
the amount of lease liabilities is increased to
reflect the accretion of interest and reduced
for the lease payments made. In addition, the
carrying amount of lease liabilities is remeas-
ured if there is a modification, a change in the
lease term, a change in the lease payments
(e.g., changes to future payments resulting
from a change in an index or rate used to
determine such lease payments) or a change
in the assessment of an option to purchase
the underlying asset.
iii) Short-term leases and leases of low-value
assets
The Group applies the short-term lease rec-
ognition exemption to its short-term leases of
machinery and equipment (i.e., those leases
that have a lease term of 12 months or less
from the commencement date and do not
contain a purchase option). It also applies
the lease of low value assets recognition
exemption to leases of office equipment that
are considered to be low value. Lease pay-
ments on short-term leases and leases of
low value assets are recognised as expense
on a straight-line basis over the lease term.
Group as a lessor
Leases in which the Group does not transfer
substantially all the risks and benefits of
ownership of an asset are classified as op-
erating leases. Initial direct costs incurred in
negotiating an operating lease are added to
the carrying amount of the leased asset and
recognised over the lease term on the same
basis as rental income. Contingent rents are
recognised as revenue in the period in which
they are earned. The Group also gets into
sub-lease agreements for its ROU assets.
These sub-leases are short term and treated
as operating leases.
FINANCIAL INSTRUMENTS – INITIAL RECOG-
NITION AND SUBSEQUENT MEASUREMENT
A financial instrument is any contract that
gives rise to a financial asset of one entity
and a financial liability or equity instrument
of another entity.
i) Financial assets
Financial assets are classified, at initial
recognition, as subsequently measured at
amortised cost, fair value through OCI and
fair value through the income statement. The
classification of financial assets at initial
recognition depends on the financial asset’s
contractual cash flow characteristics and the
Group’s business model for managing them.
With the exception of trade receivables that
do not contain a significant financing com-
ponent or for which the Group has applied
the practical expedient, the Group initially
measures a financial asset at its fair value
plus, in the case of a financial asset not at
fair value through the income statement,
transaction costs. Trade receivables that do
not contain a significant financing component
are measured at the transaction price de-
termined under IFRS 15.
Financial assets at amortised cost (debt
instruments)
This category is the most relevant to the
Group. The Group measures financial assets
at amortised cost if both of the following
conditions are met:
•
the financial asset is held within a business
model with the objective to hold financial
assets in order to collect contractual cash
flows; and
•
the contractual terms of the financial
asset give rise on specified dates to cash
flows that are solely payments of princi-
pal and interest on the principal amount
outstanding.
Financial assets at amortised cost are subse-
quently measured using the effective interest
rate (EIR) method and are subject to im-
pairment. Gains and losses are recognised
in the income statement when the asset is
de-recognised, modified or impaired.
The Group’s financial assets at amortised
cost includes trade receivables, cash at bank
and loan to an associate.
Financial assets designated at fair value through
OCI (equity instruments)
Upon initial recognition, the Group can elect
to classify irrevocably its equity investments
as equity instruments designated at fair value
through OCI when they meet the definition of
equity under IAS 32 Financial Instruments
FINANCIAL STATEMENTS / GROUP / NOTES
23
ANNUAL REPORT 2025 PETROLIA SE
Presentation and are not held for trading.
The classification is determined on an in-
strument-by- instrument basis.
Gains and losses on these financial assets
are never recycled to the income statement.
Dividends are recognised as other income
in the income statement when the right of
payment has been established, except when
the Group benefits from such proceeds as a
recovery of part of the cost of the financial
asset, in which case, such gains are record-
ed in OCI. Equity instruments designated at
fair value through OCI are not subject to
impairment assessment.
The Group's equity instruments designated at
fair value through OCI are shown in note 13.
Impairment of financial assets
Further disclosures relating to impairment
of financial assets are also provided in the
following notes:
•
Critical accounting judgements, estimates
and assumptions (Note 3);
• Financial risk management, Credit risk
(Note 23).
The Group recognises an allowance for
expected credit losses (ECLs) for all debt
instruments not held at fair value through
the income statement. ECLs are based on
the difference between the contractual cash
flows due in accordance with the contract
and all the cash flows that the Group expects
to receive, discounted at an approximation
of the original effective interest rate. The
expected cash flows will include cash flows
from the sale of collateral held or other credit
enhancements that are integral to the con-
tractual terms.
ECLs are recognised in two stages. For credit
exposures for which there has not been a
significant increase in credit risk since initial
recognition, ECLs are provided for credit
losses that result from default events that
are possible within the next 12 months (a 12-
month ECL). For those credit exposures for
which there has been a significant increase
in credit risk since initial recognition, a loss
allowance is required for credit losses ex-
pected over the remaining life of the exposure,
irrespective of the timing of the default (a
lifetime ECL).
For trade receivables, the Group applies
a simplified approach in calculating ECLs.
Therefore, the Group does not track changes
in credit risk, but instead recognises a loss
allowance based on lifetime ECLs at each
reporting date. The Group has established
a provision matrix that is based on its his-
torical credit loss experience, adjusted for
forward-looking factors specific to the debt-
ors and the economic environment as well
as adjusted for individual ECL assessments
against particular customers.
The Group considers a financial asset in
default when contractual payments are 90
days past due. However, in certain cases, the
Group may also consider a financial asset
to be in default when internal or external
information indicates that the Group is un-
likely to receive the outstanding contractual
amounts in full before taking into account
any credit enhancements held by the Group.
A financial asset is written off when there is
no reasonable expectation of recovering the
contractual cash flows.
ii) Financial liabilities
All financial liabilities are recognised ini-
tially at fair value and, in the case of loans
and borrowings and payables, net of directly
attributable transaction costs.
Financial liabilities at amortised cost
This is the category most relevant to the
Group. Interest-bearing loans are initially
measured at fair value and are subsequently
measured at amortised cost using the EIR
method. Gains and losses are recognised in
the income statement when the liabilities are
de-recognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into
account any discount or premium on acqui-
sition and fees or costs that are an integral
part of the EIR. The EIR amortisation is in-
cluded as finance costs in the statement of
the income statement.
This category mainly applies to trade and
other payables and bank loan. For more in-
formation, refer to Note 20 and 21.
INVENTORIES
Inventories are valued at the lower of cost
and net realisable value. Costs incurred in
bringing each product to its present location
and condition are accounted for as follows:
•
raw materials: purchase cost on a first
in, first out basis.
•
finished goods and work in progress:
cost of direct materials and labour and a
proportion of manufacturing overheads
based on the normal operating capacity
but excluding borrowing costs.
Net realisable value is the estimated selling
price in the ordinary course of business,
less estimated costs of completion and the
estimated costs necessary to make the sale.
IMPAIRMENT OF NON-FINANCIAL ASSETS
Assets that have an indefinite useful life are
not subject to amortisation and are tested
annually for impairment. Assets that are subject
to amortisation are reviewed for impairment
whenever events or changes in circumstances
indicate that the carrying amount may not be
recoverable. An impairment loss is recognised
at the amount by which the asset’s carrying
amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’s
fair value, less selling costs and value in use.
For the purposes of assessing impairment,
assets are grouped at the lowest levels for
which there are separately identifiable cash
flows (cash-generating units). Non-financial
assets, other than goodwill that suffered im-
pairment, are reviewed for possible reversal
of the impairment at each reporting date.
CASH AND SHORT TERM DEPOSITS
Cash and cash equivalents in the statement
of financial position comprise cash at banks
and at hand and short term deposits with
an original maturity of three months or less
but exclude any restricted cash which is not
available for use by the Group.
For the purpose of the consolidated statement
of cash flows, cash and cash equivalents con-
sist of cash and cash equivalents, as defined
above, net of outstanding bank overdrafts.
SHARE CAPITAL AND PREMIUM
Ordinary shares and share premium are
classified as equity.
Incremental costs directly attributable to the
issue of new shares or options are shown
FINANCIAL STATEMENTS / GROUP / NOTES
24
ANNUAL REPORT 2025 PETROLIA SE
in equity as a deduction, net of tax, from the
proceeds.
PROVISIONS
The Group recognises provisions when it has
a present legal or constructive obligation as
a result of past events, it is probable that
an outflow of resources will be required to
settle the obligation, and the amount has
been reliably estimated.
Contingent liabilities and allocations are
reassessed at each balance sheet date and
the size of the recognised provision reflects
best estimate of the obligation.
SEGMENT REPORTING
Operating segments are reported in a manner
consistent with the internal reporting provided
to the management. The Company’s manage-
ment, who are responsible for allocating
resources and assessing performance of the
operating segments, has been identified as
General Managers and the Board of Directors.
CASH FLOW STATEMENT
The cash flow statement has been prepared
by the indirect method. The indirect method
involves reporting gross cash flow from in-
vestment and financing activities, while the
accounting result is reconciled against net
cash flow from operational activities. Cash
and cash equivalents comprise bank deposits
and other current, liquid investments which
immediately and at insignificant exchange
rate risk can be converted into known cash
amounts and with due dates of less than
three months from purchase date.
EARNINGS PER SHARE
Earnings per share are calculated by dividing
the result of the Group attributable to the
shareholders of the parent with the weighted
average number of ordinary shares of the
period.
EVENTS AFTER THE REPORTING DATE
New information about the position of the
Group existing at the reporting date regarding
the accounting period have been taken into
account in the financial statements according
to standard estimation principles. Events after
the reporting date are referred to in note 28.
CLIMATE-RELATED MATTERS
The Group considers climate-related matters
in estimates and assumptions, where appro-
priate. This assessment includes a wide range
of possible impacts on the Group due to both
physical and transition risks. Even though
the Group believes its business model and
products will still be viable after the transition
to a low-carbon economy, climate-related
matters increase the uncertainty in estimates
and assumptions underpinning several items
in the financial statements. Even though cli-
mate-related risks might not currently have a
significant impact on measurement, the Group
is closely monitoring relevant changes and
developments, such as new climate-related
legislation. The items and considerations that
are most directly impacted by climate-related
matters are:
•
Useful life of property, plant and equip-
ment. When reviewing the residual values
and expected useful lives of assets, the
Group considers climate-related matters,
such as climate-related legislation and
regulations that may restrict the use
of assets or require significant capital
expenditures of non-financial assets.
Refer to the accounting policies in sec-
tion Property, Plant and Equipment.
•
Impairment of non-financial assets. The
value-in-use may be impacted in sev-
eral different ways by transition risk
in particular, such as climate-related
legislation and regulations and changes
in demand for the Group’s products.
The Group has concluded that no single
climate-related assumption is a key as-
sumption for the 2025 test of impairment.
Refer to note 11 for further information.
2.4 ADOPTION OF NEW AND REVISED IFRS
ACCOUNTING STANDARDS
Amendments to IFRS Accounting Standards
and the new Interpretations that are man-
datorily effective for the current period
The accounting policies adopted are consist-
ent with those of the previous financial year
except for the following IFRS amendments
which have been adopted by the Group as
of 1 January 2025:
•
IAS 21 The Effects of Changes in Foreign
Exchange Rates: Lack of Exchangeability
(Amendments)
The amendments are effective for annual re-
porting periods beginning on or after January
1, 2025. The amendments specify how an
entity should assess whether a currency is
exchangeable and how it should determine
a spot exchange rate when exchangeability
is lacking. A currency is considered to be
exchangeable into another currency when
an entity is able to obtain the other cur-
rency within a time frame that allows for a
normal administrative delay and through a
market or exchange mechanism in which an
exchange transaction would create enforcea-
ble rights and obligations. If a currency is not
exchangeable into another currency, an entity
is required to estimate the spot exchange rate
at the measurement date. An entity’s objective
in estimating the spot exchange rate is to
reflect the rate at which an orderly exchange
transaction would take place at the meas-
urement date between market participants
under prevailing economic conditions. The
amendments note that an entity can use an
observable exchange rate without adjustment
or another estimation technique.
The amendments had no impact on the Group’s
consolidated financial statements.
New and revised IFRS in issue but not yet
effective
The following Standards and Interpretations
which are relevant to the Group’s operations
are in issue but not yet effective. The Group
does not intend to adopt any standard, in-
terpretation or amendment that has been
issued but is not yet effective before their
effective date.
Management anticipates that the adoption of
all other Standards and Interpretations in
future periods will have no significant impact
on the results and financial position presented
in these consolidated financial statements,
apart from IFRS 18 as disclosed below.
(i) Issued by the IASB and adopted by the
European Union
•
IFRS 9 Financial Instruments and IFRS
7 Financial Instruments: Disclosures
- Classification and Measurement of
Financial Instruments (Amendments)
FINANCIAL STATEMENTS / GROUP / NOTES
25
ANNUAL REPORT 2025 PETROLIA SE
The amendments are effective for annual
reporting periods beginning on or after
January 1, 2026. Early adoption of amend-
ments related to the classification of financial
assets and the related disclosures is per-
mitted, with the option to apply the other
amendments at a later date. The amendments
clarify that a financial liability is derecog-
nised on the ‘settlement date’, when the
obligation is discharged, cancelled, expired,
or otherwise qualifies for derecognition.
They introduce an accounting policy option
to derecognise liabilities settled via electronic
payment systems before the settlement date,
subject to specific conditions. They also pro-
vide guidance on assessing the contractual
cash flow characteristics of financial assets
with environmental, social, and governance
(ESG)-linked features or other similar con-
tingent features. Additionally, they clarify
the treatment of non-recourse assets and
contractually linked instruments and require
additional disclosures under IFRS 7 for fi-
nancial assets and liabilities with contingent
event references (including ESG-linked) and
equity instruments classified at fair value
through other comprehensive income.
•
IFRS 9 Financial Instruments and IFRS
7 Financial Instruments: Disclosures
- Contracts Referencing Nature-
dependent Electricity (Amendments)
The amendments are effective for annual re-
porting periods beginning on or after January
1, 2026, with earlier application permit-
ted. The amendments include clarifying the
application of the 'own-use' requirements,
permitting hedge accounting if contracts
in scope of the amendments are used as
hedging instruments, and introduce new
disclosure requirements to enable investors
to understand the impact of these contracts
on a company's financial performance and
cash flows. The clarifications regarding the
'own-use' requirements must be applied
retrospectively, but the guidance permitting
hedge accounting have to be applied prospec-
tively to new hedging relationships designated
on or after the date of initial application.
•
IFRS 18 – Presentation and Disclosure
in Financial Statements
IFRS 18 introduces new requirements on
presentation within the statement of profit
or loss. It requires an entity to classify all
income and expenses within its statement of
profit or loss into one of the five categories:
operating; investing; financing; income taxes;
and discontinued operations. These categories
are complemented by the requirements to
present subtotals and totals for ‘operating
profit or loss’, ‘profit or loss before financing
and income taxes’ and ‘profit or loss’. It also
requires disclosure of management-defined
performance measures and includes new
requirements for aggregation and disag-
gregation of financial information based on
the identified ‘roles’ of the primary financial
statements and the notes. In addition, there
are consequential amendments to other ac-
counting standards. IFRS 18 is effective
for reporting periods beginning on or after
January 1, 2027, with earlier application per-
mitted. Retrospective application is required in
both annual and interim financial statements.
Management will analyse the requirements
of this newly issued standard and assess its
impact before becoming effective.
• Annual Improvements to IFRS Accounting
Standards – Volume 11
The IASB’s annual improvements process
deals with non-urgent, but necessary, clar-
ifications and amendments to IFRS. In July
2024, the IASB issued Annual Improvements
to IFRS Accounting Standards — Volume 11.
An entity shall apply those amendments for
annual reporting periods beginning on or after
January 1, 2026. The Annual Improvements
to IFRS Accounting Standards - Volume 11,
includes amendments to IFRS 1, IFRS 7, IFRS
9, IFRS 10, and IAS 7. These amendments aim
to clarify wording, correct minor unintended
consequences, oversights, or conflicts be-
tween requirements in the standards.
(ii) Issued by the IASB but not yet adopted by
the European Union
•
IFRS 19 Subsidiaries without Public
Accountability: Disclosures (including
amendments)
IFRS 19 permits subsidiaries without public
accountability to use reduced disclosure re-
quirements if their parent company (either
ultimate or intermediate) prepares publicly
available consolidated financial statements
in compliance with IFRS accounting stand-
ards. These subsidiaries must still apply the
recognition, measurement and presentation
requirements in other IFRS accounting stand-
ards. Unless otherwise specified, eligible
entities that elect to apply IFRS 19 will not
need to apply the disclosure requirements
in other IFRS accounting standards. The
amendments issued in August 2025 reduce
the disclosure requirements of new IFRS
accounting standards, which had been in-
cluded in full when IFRS 19 was first issued.
IFRS 19 (including the amendments) is ef-
fective for reporting periods beginning on or
after January 1, 2027, with early application
permitted.
•
IAS 21 The Effects of Changes in Foreign
Exchange Rates: Translation to a
Hyperinflationary Presentation Currency
(Amendments)
The amendments are effective for annual re-
porting periods beginning on or after January
1, 2027, with earlier application permitted.
The amendments require translation from a
non-hyperinflationary functional currency into
a hyperinflationary presentation currency
at the closing rate. If an entity’s functional
currency is the currency of a non-hyper-
inflationary economy, but its presentation
currency is the currency of a hyperinflationary
economy, its results and financial position are
translated into the presentation currency by
translating all amounts (i.e., assets, liabilities,
equity items, income and expenses) and all
comparatives at the closing rate at the date
of the most recent statement of financial
position. An entity whose functional currency
and presentation currency are the currency
of a hyperinflationary economy, restates the
comparative amounts of a foreign opera
-
tion, whose functional currency is that of a
non-hyperinflationary economy, by applying
the general price index, to the foreign oper-
ation’s comparative figures. The amendments
also introduce certain additional disclosure
requirements.
FINANCIAL STATEMENTS / GROUP / NOTES
26
ANNUAL REPORT 2025 PETROLIA SE
•
Amendment in IFRS 10 Consolidated
Financial Statements and IAS 28
Investments in Associates and Joint
Ventures: Sale or Contribution of Assets
between an Investor and its Associate
or Joint Venture
The amendments address an acknowledged
inconsistency between the requirements in
IFRS 10 and those in IAS 28, in dealing with
the sale or contribution of assets between an
investor and its associate or joint venture.
The main consequence of the amendments is
that a full gain or loss is recognised when a
transaction involves a business (whether it
is housed in a subsidiary or not). A partial
gain or loss is recognised when a transac-
tion involves assets that do not constitute a
business, even if these assets are housed
in a subsidiary. In December 2015 the IASB
postponed the effective date of this amend-
ment indefinitely pending the outcome of its
research project on the equity method of
accounting.
FINANCIAL STATEMENTS / GROUP / NOTES
27
ANNUAL REPORT 2025 PETROLIA SE
NOTE 3 CRITICAL ACCOUNTING JUDGEMENTS,
ESTIMATES AND ASSUMPTIONS
Estimates and judgements are continually
evaluated and are based on historical experi-
ence and other factors, including expectations
of future events that are believed to be rea-
sonable under the circumstances.
The Group makes estimates and assumptions
concerning the future. The resulting account-
ing estimates will, by definition, seldom equal
the related actual results. The estimates and
assumptions that have a significant risk of
causing a material adjustment to the carry-
ing amounts of assets and liabilities within
the next financial year are addressed below.
i) Impairment of property, plant and equipment
Refer also to note 11.
The Group tests whether the drilling equip-
ment, land rigs and land and buildings have
suffered any impairment whenever events or
changes in circumstances indicate that the
carrying amount may not be recoverable. An
impairment loss is recognised for the amount
by which the asset’s carrying amount exceeds
its recoverable amount. The recoverable
amount is the higher of an asset’s fair value
less costs of disposal and value in use.
The value in use calculations are based on
discounted cash flow models. The cash flows
are based on present levels and adjusted for
expected growth or decline. The recoverable
amount is sensitive to the discount rate used
for the discounted cash flow model as well
as the expected future cash inflows and the
growth rate used for extrapolation purposes.
ii) Provision for expected credit losses of
trade receivables
The Group uses a provision matrix at each
location it operates to calculate ECLs for trade
receivables. The provision rates are based
on days past due for groupings of various
customer segments that have similar loss
patterns.
The provision matrix is initially based on the
Group’s historical observed default rates.
The Group will calibrate the matrix to adjust
the historical credit loss experience with
forward-looking information. For instance,
if the oil prices are expected to decrease
over the next year, which can lead to an
increased number of defaults in the energy
service sector, the historical default rates
are adjusted. At every reporting date, the
historical observed default rates are updated
and changes in the forward-looking estimates
are analysed.
As the number of customers at each location
is small, in addition to the collective ECL as-
sessment using the portfolio matrix approach
as adjusted by forward looking information,
the Group also performs individual ECL as-
sessments against the biggest customers
with significant long outstanding balances.
The individual assessments are taking into
account various information known locally
for each customer, such as history of credit
losses, financial performance, settlement
arrangements agreed, etc. The information
about the ECLs on the Group’s trade receiv-
ables is disclosed in Note 14.
iii) Determining the lease term of contracts
with renewal options when the Group acts
as a lessee
The Group determines the lease term as the
non-cancellable term of the lease, together
with any periods covered by an option to
extend the lease if it is reasonably certain
to be exercised, or any periods covered by
an option to terminate the lease, if it is rea-
sonably certain not to be exercised.
The Group has the option, under some of
its leases to lease the assets for additional
periods. The Group applies judgement in
evaluating whether it is reasonably certain
to exercise the option to renew. All relevant
factors including economic incentive fac-
tors, are considered to exercise the renewal.
Local teams are responsible for managing
their leases and, accordingly, lease terms
are negotiated on an individual basis and
contain a wide range of different terms and
conditions. Extension and termination options
are included, when possible, to provide local
management with greater flexibility to align its
need for access to equipment and warehouses
with the fulfilment of customer contracts
and office rentals. The individual terms and
conditions used vary across the Group.
The majority of extension and termination
options held are exercisable only by Lessee
and not by the respective lessors. In cases in
which Lessee is not reasonably certain to use
an optional extended lease term, payments
associated with the optional period are not
included within lease liabilities. In almost
all of the cases, the local teams assumes
that the options to extend a lease will not be
exercised, as on initial recognition it is not
reasonable certain what will be the market
conditions when the Group will need to decide
whether to exercise an option to extend the
lease. After the commencement date, the
Group reassesses the lease term, at each
reporting date, if there is a significant event
or change in circumstances that is within its
control and affects its ability to exercise (or
not to exercise) the option to renew.
During 2025, the financial effect of revising
lease terms to reflect the effect of exercising
extension and termination options was an
increase in recognised lease liabilities of USD
3.9 million (2024: USD 2.8 million).
FINANCIAL STATEMENTS / GROUP / NOTES
28
ANNUAL REPORT 2025 PETROLIA SE
NOTE 4 ORGANISATION
Summary of the companies of the Group:
As at 31.12.2025 the following companies are presented in the consolidated financial statements:
Company Business office , activity, objective % owned 2025 % owned 2024Subsidiaries (fully consolidated)Petrolia AS Norway. Energy Service. 100 100Petrolia Invest AS Norway. Investment company. 100 100Petrolia Rigs AS Norway. Investment company. 100 100Oil Tools Supplier AS Norway. Energy Service. 100 100Independent Oil Tools AS Norway. Energy Service. 100 100Independent Tool Pool AS Norway. Energy Service. 100 100IOT Energy Services Australia PTY LtdAustralia. Energy Service. 100 100(formerly IOT Group Australia Pty Ltd)Independent Oil Tools BV Netherlands. Energy Service. 100 100Independent Oil Tools Dosco BV Netherlands. Energy Service. 70 70Independent Oil Tools Srl Romania. Energy Service. 100 100IOT Energy Services New Zealand Limited New Zealand. Energy Service. 100 100(formerly IOT Group Limited)Venture Drilling AS Norway. Energy Service. 100 100Independent Tool Pool FZCO Jebel Ali Free Zone (Dubai). Energy 100 100Service.Petrolia Tool Pool AS Norway. Energy Service. 100 100Petrolia Rigs II AS Norway. wound-up 100Catch Fishing Services BV (Note 28) Netherlands. Energy Service. 100 100IO&R Ltd Dubai. wound-up 100Independent Oil Tools International (Cyprus) Ltd Cyprus. Energy Service. 100 100Independent Oil Tools Iraq for General Trading Co. Ltd Iraq. Energy Service. 61 61Tubulars Energy Services (M) Sdn Bhd Malaysia. Energy Service. 100 100IOT Energy Services Limited UK. Energy Service. 90 90CO2 Management AS Norway. Energy Service. 100 100Hydrogen & CCS AS Norway. wound-up 100Ammonia Energy Solutions AS Norway. wound-up 100Associated companies (equity method) (refer to note 12)Petrolia Noco AS Norway. Exploring for oil and gas on 49.90 49.90the Norwegian Continental Shelf.
FINANCIAL STATEMENTS / GROUP / NOTES
29
ANNUAL REPORT 2025 PETROLIA SE
The Group has two strategic segments: Energy and Energy Service (including land rigs).
Energy activities are presently carried out through an investment in an associate company. Operating activities are carried out from one segment:
Energy Service. Energy Service activities are described in the accounting policy "Revenue from contracts".
NOTE 5 SEGMENT INFORMATION
Non-current tangible assets include Land and
buildings, Energy Service and other equipment
and Land rigs, but exclude right of use assets.
Revenue
The major part of the Group's revenues derive
from short term rental of drilling equipment
such as drill pipes and test tubing. There are
no material contract asset balances.
Geographic allocation
Geographic allocation is primarily based on
where the Group companies are domiciled.
Some asset owning subsidiaries are allocated
as tool pools, because they only rent their
equipment to companies in the Group.
Major customers
The end customers are energy companies,
drilling contractors or energy service
companies. No single customer represents
a significant part of total revenues in excess
of 10%.
THE GROUP’S ENERGY SERVICE SEGMENT OPERATES IN THE FOLLOWING MAIN GEOGRAPHICAL AREAS:
2025 Revenue from Energy Service segmentRental of equipment Services Sales of equipment Total(amounts in USD 1,000)and consumablesNorway 11,880 5,870 0 17,750Europe outside Norway 8,776 5,216 9,570 23,562Asia and Australia 7,396 11,597 45 19,038Total 28,052 22,683 9,615 60,350Result for the year from energy service segment 6,143Result for the year from energy segment -912Total result for the year 5,2312024 Revenue from Energy Service segmentRental of equipment Services Sales of equipment Total(amounts in USD 1,000)and consumablesNorway 12,052 6,449 195 18,696Europe outside Norway 8,941 5,187 8,627 22,755Asia and Australia 6,485 5,488 44 12,017Total 27,478 17,124 8,866 53,468Result for the year from energy service segment 3,277Result for the year from energy segment 0Total result for the year 3,277Non-current tangible assets (amounts in USD 1,000)2025 2024Norway 4,059 2,887Europe outside Norway 9,526 7,441Asia and Australia 4,124 3,794Tool pools 882 1,313Total 18,591 15,435
Petrolia Noco AS (Note 12)
The associate company, Petrolia Noco AS,
operates in the Energy segment. The interest
income from the Energy segment is shown
in note 8 and the share of result in note 12.
FINANCIAL STATEMENTS / GROUP / NOTES
30
ANNUAL REPORT 2025 PETROLIA SE
(amounts in USD 1,000)2025 2024Wages and salaries 13,888 12,699Social security 1,245 1,125Pension costs 1,014 833Other contributions 649 600Total 16,796 15,257The Group had 214 employees as at the end of 2025 (2024: 251 employees).Average number of employees was 233 in 2025 (2024: 225).Remuneration and benefits to directors and key management personnel (amounts in USD 1,000)2025 2024Polycarpos Protopapas (27 November 2019 -), Managing Director, Cyprus 59 57Marios Tornaritis (1 December 2023 -), Finance Manager, Cyprus 28 22Sølve Nilsen (1 October 2010 -), General manager of the Branch, Norway 221 187Total 308 266The following fee has been paid to the members of the Board (amounts in USD 1,000) :2025 2024Berge Gerdt Larsen- Chair of the Board, Remuneration committee (re-elected on 29 May 2025) 310 0George Hadjineophytou - Board member, Audit & Remuneration committees (re-elected on 29 May 53 522025)Sjur Storaas - Board member, Audit & Remuneration committees (re-elected on 29 May 2025) 47 47Polycarpos Protopapas - Board member (re-elected on 29 May 2025) 0 0Total 410 99
NOTE 6 WAGES COST
FINANCIAL STATEMENTS / GROUP / NOTES
31
ANNUAL REPORT 2025 PETROLIA SE
NOTE 7 SPECIFICATION OF OTHER OPERATING EXPENSES
The amounts are exclusive of value added tax.Other operating expenses comprise the following main items2025 2024(amounts in USD 1,000) :Fees to external advisors, lawyers, auditors 1,150 928Cost of goods sold 25,441 18,289Allowance/(reversal) of expected credit losses (Note 14) 226 -412Expenses relating to short-term leases 29 0Expenses relating to leases of low value 2 2Profit on disposal of property, plant and equipment (Note 11) -1,365 -223Other operating expenses 5,900 5,804Total other operating expenses 31,383 24,388AUDITORS FEERecognised fee for auditors of the group and its subsidiaries (amounts in USD 1,000) :2025 2024Statutory audit 522 503Tax services 48 82Other non-audit services 21 43Total auditors' fee 591 628
The total fees charged by the statutory audit firm for the statutory audit of the Parent's separate and consolidated annual financial statements
for the year ended 31 December 2025 amounted to USD 212,477 / EUR 180,630. The total fees charged by the statutory audit firm for the
year ended 31 December 2025 for tax compliance and advisory services amounted to USD 11,763 / EUR 10,000 and for other non audit
services amounted to USD nil. The statutory audit firm fees disclosed exclude irrevocable VAT and are disclosed in EUR and USD.
FINANCIAL STATEMENTS / GROUP / NOTES
32
ANNUAL REPORT 2025 PETROLIA SE
NOTE 8 SPECIFICATION OF FINANCIAL ITEMS
(amounts in USD 1,000) 2025 2024Interest incomeInterest income from current bank deposits 411 264Interest income from associate (refer to note 13) 699 6601,110 924Financial incomeDividend income 5 4Foreign exchange gain - net 2,312 0Profit on shares at fair value through profit and loss (refer to note 15) 24 0Reversal of expected credit losses on other financial assets 35 0Financial guarantee income 74 762,450 80Interest expensesOther interest expense -60 -53Interest expense on lease liabilities (refer to note 19) -879 -746-939 -799Financial expensesForeign exchange loss - net 0 -2,040Loss on shares at fair value through profit and loss (refer to note 15) 0 -2Other financial expenses -9 -54Allowance of expected credit losses on other financial assets 0 0-9 -2,096Net finance income/(expense) 2,612 -1,891
FINANCIAL STATEMENTS / GROUP / NOTES
33
ANNUAL REPORT 2025 PETROLIA SE
NOTE 9 INCOME TAX
Temporary differences regarding non-cur-
rent assets are primarily caused by 1) for
property, plant and equipment; different
depreciation and gains/losses profiles be-
tween accounts and tax filings and 2) some
unrealised currency gains or losses are
included in the accounts but not in the tax
filings. Temporary differences regarding
current assets are primarily regarding
impairments of receivables. Temporary dif-
ferences regarding current liabilities are
regarding accruals.
For the Norwegian companies, the tax
obligation is nominated and calculated in NOK,
and then converted to USD. The tax rate is 22%.
The Group has deductible temporary
differences, including carry forward losses
mainly in Norway and Australia, of USD 33.6
million (2024: USD 32.1 million) with a tax value
of USD 10.0 million (2024: USD 9.1 million) that
are not carried as deferred tax assets since it
is uncertain that these can be utilised.
The tax on the Group's results before tax differs from the theoretical amount that would arise 2025 2024using the applicable tax rates as follows: (amounts in USD 1,000)Result before tax charges 6,194 3,986Tax calculated at domestic tax rates applicable to profits in respective countries 1,749 1,098(12.5% for parent company) Tax effect of expenses not deductible for tax purposes 864 4,763Tax effect of allowances and income not subject to tax -1,254 -7,966Utilisation of previously unrecognised tax losses -949 -93Tax losses for the year (unrecognised) 553 2,907Tax charge 963 709
Change in deferred tax is USD nil from tax losses (2024: USD -20 thousand) and USD -228 thousand from temporary differences (2024:
USD 288 thousand). In Cyprus there is a time limit of 5 years for the use of carry-forward tax losses. Effective 1 January 2026, following
tax reform in Cyprus, corporation tax rate increased from 12.5% to 15%, and companies may carry-forward tax losses for 7 years. There
is no time limit for the use of carry-forward tax losses in Norway.
Calculation of deferred tax Consolidated statement of financial position Consolidated statement of profit or loss(amounts in USD 1,000)2025 2024 2025 2024Non-current assets 4,170 2,544 359 -39Current assets -1,720 -889 -182 -172Non-current liabilities 0 0 0 0Current liabilities -127 -352 50 -77Net temporary differences 2,323 1,303 227 -288Carry forward loss 0 -2 0 20Basis for deferred tax liability 2,323 1,301Deferred tax expense/(benefit) 227 -268Deferred tax liability at nominal tax rates 523 296Carried tax asset 0 0Carried tax liability 523 296
FINANCIAL STATEMENTS / GROUP / NOTES
The tax charge (amounts in USD 1,000) 2025 2024Corporation tax 736 977Deferred tax - charge/(credit) 227 -268Tax charge 963 709
34
ANNUAL REPORT 2025 PETROLIA SE
(amounts in USD 1,000, with the exception of shares and earnings per share) 2025 2024Result attributable to the equity holders of the parent5,4493,975Weighted average number of shares59,033,78659,033,786Number of shares at period end (excluding treasury shares) 59,033,786 59,033,786Basic earnings per average number of sharesFrom continuing operations 0.09 0.07Basic earnings per share (USD per share) 0.09 0.07
NOTE 10 EARNINGS PER SHARE
The Company has no outstanding or authorised
stock options, or warrants. As at 31 December
2025 and 31 December 2024, a subsidiary of
the Company held 100,000 treasury shares.
The weighted average number of shares takes
into account the weighted average effect of
changes in treasury shares during the year,
if any. There have been no changes in the
treasury shares of the Group during the year.
FINANCIAL STATEMENTS / GROUP / NOTES
35
ANNUAL REPORT 2025 PETROLIA SE
NOTE 11 PROPERTY, PLANT AND EQUIPMENT
IMPAIRMENT OF PROPERTY, PLANT AND
EQUIPMENT
31 December 2024
As at 31 December 2024, Group assessed
whether indications of impairment exist relat-
ed to equipment, land rig, land and buildings
at each location considering internal and
external factors.
The Group identified impairment triggers for
land rig, equipment and a plant located in
Iraq and performed impairment assessment
treating the land rig as one cash generated
unit and the plant and other equipment as
another cash generated unit. For the land
rig carried at USD 1.1 million no impairment
was needed based on value in use calcula-
tions based on latest forecasts and using
a discounting rate of 15%. A decrease in
forecasts by 70% along with an increase of
the discounting rate by 5% would not result
in any impairment.
The Group recognised an impairment of USD
526 thousand regarding the plant and USD
228 thousand regarding equipment following
value in use calculations based on latest fore-
casts and using a discounting rate of 15%.
The calculation of value in use is most sen-
sitive to the following assumptions:
-Turnover projections
-Operating expenses projections
-Capital expenditure projections
-Discount rates
Turnover, operating expenses and capital
expenditure are based on present market
conditions and assuming that they will per-
sist through 2025. A decrease in projected
revenue and associated direct cost of 1%
would result in additional impairment of USD
114 thousand and a change of 10% would
result in additional impairment of USD 1.1
million. An increase of the discount rate by
1% would result in an additional impairment
of USD 116 thousand.
No impairment indications were identified
for property, plant and equipment of other
locations.
31 December 2025
As at 31 December 2025, Group assessed
whether indications of impairment exist relat-
ed to equipment, land rig, land and buildings
at each location considering internal and
external factors.
The Group identified impairment triggers
for the property, plant and equipment and
right of use assets cash generating unit
located in Iraq and performed impairment
assessment. The land rig is considered as a
(amounts in USD 1,000) Energy Land andLand rigs TotalService buildingsand other equipmentAccounting year 2024Book value 01.01.24 12,005 2,292 1,418 15,715Currency differences -354 -98 0 -452Additions 4,451 0 0 4,451Disposals -1,503 -5 0 -1,508Depreciation for the year -3,282 -169 -347 -3,798Impairment charge -228 -526 0 -754Accumulated cost of assets reclas-1,822 0 0 1,822sified from RoUAccumulated depreciation of assets -1,101 0 0 -1,101reclassified from RoUAccumulated depreciation of assets 1,055 5 0 1,060disposedAccumulated impairment of assets 0 0 0 0disposedBook value 31.12.24 12,865 1,499 1,071 15,435Per 31 December 2024Acquisition cost 300,256 4,358 14,270 318,884Accumulated impairment -28,343 -1,445 -7,656 -37,444Accumulated depreciation -259,048 -1,414 -5,543 -266,005Book value 31.12.24 12,865 1,499 1,071 15,435Accounting year 2025Book value 01.01.25 12,865 1,499 1,071 15,435Currency differences 1,077 156 0 1,233Additions 5,402 0 0 5,402Disposals -5,163 -16 0 -5,179Depreciation for the year -3,843 -36 -347 -4,226Impairment charge 0 0 0 0Accumulated cost of assets reclas-4,963 0 0 4,963sified from RoUAccumulated depreciation of assets -2,384 0 0 -2,384reclassified from RoUAccumulated depreciation of assets 914 0 0 914disposedAccumulated impairment of assets 2,417 16 0 2,433disposedBook value 31.12.25 16,248 1,619 724 18,591Per 31 December 2025Acquisition cost 306,535 4,498 14,270 325,303Accumulated impairment -27,429 -1,445 -7,656 -36,530Accumulated depreciation -262,858 -1,434 -5,890 -270,182Book value 31.12.25 16,248 1,619 724 18,591Depreciation period 5-12 years 33 years* 12 yearsResidual value 0 0 0*) Land is not depreciated
FINANCIAL STATEMENTS / GROUP / NOTES
36
ANNUAL REPORT 2025 PETROLIA SE
RIGHT OF USE ASSETS
As at 31 December 2025, management carried
out an assessment of whether there is any
indication that right of use assets may have
suffered an impairment loss in accordance
with the Group’s policy and concluded that
there is no such indication, except for the
property, plant and equipment and right of
use assets cash generating unit located in
Iraq, for which impairment indicators were
identified and an impairment assessment was
performed and disclosed above.
Energy Service and other equipment primarily
include rental equipment. Land and buildings
represent storage facilities and offices.
In 2025 lease modifications were added with
USD 4.5 million (2024: USD 16 thousand)
connected to lease extensions of land and
buildings.
(amounts in USD 1,000) Energy Ser-Land andTotalvice and other buildingsequipmentBook value 01.01.24 9,094 6,397 15,491Additions 2,018 0 2,018Modifications 0 16 16Disposal cost -45 -168 -213Disposal depreciation 10 168 178Depreciation of the year -1,585 -1,809 -3,394Accumulated cost of assets reclassified to -1,822 0 -1,822property, plant and equipmentAccumulated depreciation of assets reclas-1,101 0 1,101sified to property, plant and equipmentTranslation differences -9 -997 -1,006Book value 31.12.24 8,762 3,607 12,369Per 31 December 2024Acquisition cost 18,298 14,833 33,131Accumulated impairment -18 0 -18Accumulated depreciation -9,518 -11,226 -20,744Book value 31.12.24 8,762 3,607 12,369Additions 3,262 0 3,262Modifications 0 4,459 4,459Disposal cost -47 -37 -84Disposal depreciation 22 36 58Depreciation of the year -1,548 -1,903 -3,451Accumulated cost of assets reclassified to -4,963 0 -4,963property, plant and equipmentAccumulated depreciation of assets reclas-2,384 0 2,384sified to property, plant and equipmentTranslation differences -190 1,133 943Book value 31.12.25 7,682 7,295 14,977Per 31 December 2025Acquisition cost 16,360 20,388 36,748Accumulated impairment -18 0 -18Accumulated depreciation -8,660 -13,093 -21,753Book value 31.12.25 7,682 7,295 14,977Refer also to note 19.
RIGHT OF USE ASSETS
Set out below are the carrying amounts of right-of-use assets recognised and the move-
ments during the period:
separate cash generated unit, for which no
impairment indicators were identified. For
the property, plant and equipment and right
of use assets carried at USD 1.4 million and
USD 66 thousand no impairment was needed
based on value in use calculations based
on latest forecasts and using a discounting
rate of 22%.
The calculation of value in use is most sen-
sitive to the following assumptions:
-Turnover projections
-Operating expenses projections
-Capital expenditure projections
-Discount rates
Turnover, operating expenses and capital
expenditure are based on present market
conditions and assuming that they will per-
sist through 2026. A decrease in projected
revenue and associated direct cost of 70%,
along with an increase of the discounting rate
by 5% would still result in no impairment.
No impairment indications were identified
for property, plant and equipment and right
of use assets of other locations.
DISPOSALS AND RECLASSIFICATIONS
Energy Service and other equipment include
fixed assets for own use of USD 2.2 million
(2024: USD 2.2 million).
In 2025, the Group had a profit from disposal
of assets of USD 1.4 million (2024: profit of
USD 0.2 million). The amount is included under
other operating income. Proceeds from the
disposals were USD 3.2 million (2024: USD
0.8 million).
In 2025, the Group transferred accumulated
cost price of USD 5.0 million (2024: USD 1.8
million) and accumulated depreciation of USD
2.4 million (2024: USD 1.1 million) from Right
of Use assets to owned Property, Plant and
Equipment relating to items for which the
Group obtained legal ownership following
expiry of lease term.
CLIMATE RELATED MATTERS
The Group constantly monitors climate-related
risks, including physical risks and transi-
tion risks, when measuring the recoverable
amount. While the Group does not believe
its operations are currently significantly ex-
posed to physical risk, the value-in-use may
be impacted in different ways by transition
risk, such as climate-related legislation, cli-
mate-related regulations and changes in
demand for the Group’s products. The Group
has concluded that no single climate-relat
-
ed assumption is a key assumption for the
2025 impairment testing. Increased costs
in most value chains will be passed on by
increased sales prices and thus result in
general inflation.
FINANCIAL STATEMENTS / GROUP / NOTES
37
ANNUAL REPORT 2025 PETROLIA SE
NOTE 12 ASSOCIATED COMPANIES
The Group's interest in associated entities
is accounted for using the equity method.
PETROLIA NOCO AS
The company is an oil company exploring the
Norwegian Continental Shelf for oil and gas
and its shares are registered with ticker
“PNO” on the NOTC (www.notc.no), a market
place for unlisted shares. The company holds
interests in 12 licences, two of which as an
operator. Exploration activities are capital
intensive, especially in the short term when
drilling wells. The tax value of the expenses
are refunded with 71.8% in the following
tax year and an additional 6.2% will reduce
payable taxes on any profits from sale of
hydrocarbons. Thus in the long run, 22% of
losses has to be funded by equity. Petrolia
participate in capital issues to maintain its
49.9% ownership and has been the primary
source of equity and debt funding since PNO
was incorporated in 2011. Following a private
placement in PNO in 2015 directed towards
the largest shareholders of the Group, the
Group’s largest shareholders are now as-
sisting in the funding of PNO, as are external
lenders. In 2023 Petrolia AS subscribed for
4,985,000 new shares in Petrolia NOCO AS
at NOK 2.00 per share. No additional sub-
scriptions occurred in 2024. In 2025 Petrolia
SE subscribed for 9,985,442 new shares in
Petrolia NOCO AS at NOK 1.00 per share.
The acquisition of a 12.26% interest in Brage
was completed on 29 December 2023. PNO
reported that net production to PNO in Q4
2025 was 2,084 boe per day.
Petrolia Noco AS(amounts in USD 1,000)Book value per 31.12.2023 0Share issue 0Translation difference 0Share of result of the year 0Book value per 31.12.2024 0Share issue 920Translation difference -306Share of result of the year -606Book value per 31.12.2025 8KEY NUMBERS FROM THE ACCOUNTSCompany Incorpo-CurrentNon-cur-TotalCurrentNon-currentTotalRevenue Loss Shareholdingrated inassetsrent assetsassetsliabilitiesliabilitiesliabilitiesPetrolia Noco Bergen, ASNorway2025 17,838 79,794 97,632 37,224 60,391 97,615 62,988 -1,211 49.90%2024 20,581 71,857 92,438 36,497 56,613 93,110 62,854 -357 49.90%
The associated company had no contingent liabilities as at 31 December 2025 or 2024.
Petrolia Noco AS presently has no plans to drill exploration wells in 2026.
FINANCIAL STATEMENTS / GROUP / NOTES
38
ANNUAL REPORT 2025 PETROLIA SE
Secured loans to Petrolia NOCO AS Shares Total(amounts in USD 1,000) 10% 13.2% Total Loan Zeg Power ASBook value per 31.12.2023 2,961 2,959 5,920 1,004 6,924Interest income 294 366 660 0 660Interest received -371 -363 -734 0 -734Addition 0 0 0 0 0Fair value change 0 0 0 -1,004 -1,004Repayment 0 0 0 0 0Translation difference -326 -308 -634 0 -634Book value per 31.12.2024 2,558 2,654 5,212 0 5,212Interest income 234 395 629 0 629Interest received -234 -389 -623 0 -623Addition 0 0 0 0 0Reversal of expected credit loss 35 0 35 0 35Repayment -921 0 -921 0 -921Translation difference 283 334 617 0 617Book value per 31.12.2025 1,955 2,994 4,949 0 4,949
SECURED LOANS TO PETROLIA NOCO AS
(ASSOCIATE)
The loans are denominated in NOK and carry
an annual interest of 10% to 13.2%. The
loans mature on 1 January 2027.
In 2024, management assessed that there is
very little risk regarding their recoverability
and that the related expected credit losses
for both loans amount to USD 250,000. In
2025 a reversal of the ECL by USD 35,000
reduced the ECL balance to USD 215,000. The
assets of the company consist primarily of oil
and gas properties and associated deferred
tax liability and associated decommissioning
provisions, tax receivable and working capital
in licenses. To the extent exploration costs are
carried, in line with accounting principles, a
tax liability of 78% is also carried reducing
the net to 22%. For discoveries there will
normally be values that are not carried. The
ZEG POWER AS
(FAIR VALUE THROUGH OCI INVESTMENT)
ZEG delivers solutions for clean hydrogen
production from gas, through its novel ZEG
ICC™ Technology with integrated carbon
capture. The company is in financial distress
and in present plans, existing shareholders
will be diluted to less than 1% of a restruc-
tured share capital.
The Group owns shares and the investment
is carried at fair value through OCI (level 3).
The cost of investment was NOK 4,758,789
(USD 521,967). During the year the Group
recognised a fair value loss of nil (2024:USD
USD 1 million). For more information refer
to Note 18.
NOTE 13 OTHER FINANCIAL ASSETS
shareholders of the associate company are
also supportive by contributing additional
equity when needed to support the explora-
tion programme of the associate, including
meeting its financial obligations.
LIQUIDITY LOANS TO PETROLIA NOCO AS
(ASSOCIATE)
The loans are denominated in NOK and carry
an annual interest of 13.2% (unsecured). The
loans shall be of short duration and be repaid
latest by the end of the year they are granted.
During 2025, three drawdowns were made
of maximum NOK 15 million and duration was
less than five months. As at 31 December
2025 and 2024 the balances were USD nil.
Interest received in 2025 was USD 70 thou-
sand (2024: USD 30 thousand).
FINANCIAL STATEMENTS / GROUP / NOTES
39
ANNUAL REPORT 2025 PETROLIA SE
NOTE 14 TRADE AND OTHER CURRENT RECEIVABLES
(amounts in USD 1,000) 2025 2024Trade receivables, net of expected credit losses 16,947 13,035Other current receivables 2,822 1,488Total 19,769 14,523Ageing of trade receivables as at 31 December Not due 1-30 days 31-60 days 61-90 days 90+ days Tota l2025Trade receivables 9,411 2,755 1,221 1,519 4,610 19,516Total, gross 9,411 2,755 1,221 1,519 4,610 19,516Expected credit loss rate 0.23% 0.33% 9.17% 12.05% 14.76% 4.16%Expected credit loss (simplified approach)* 22 9 112 183 410 736Expected credit loss (individually assessed) 0 0 0 0 1,833 1,833Total, net 9,389 2,746 1,109 1,336 2,367 16,947* ) Provision matrixAgeing of trade receivables as at 31 December Not due 1-30 days 31-60 days 61-90 days 90+ days Tota l2024Trade receivables 8,049 3,390 836 171 4,341 16,787Total, gross 8,049 3,390 836 171 4,341 16,787Expected credit loss rate 0.11% 6.28% 4.78% 7.60% 21.88% 3.81%Expected credit loss (simplified approach)* 9 213 40 13 242 517Expected credit loss (individually assessed) 0 0 0 0 3,235 3,235Total, net 8,040 3,177 796 158 864 13,035* ) Provision matrixMovement of accumulated expected credit losses on trade receivables(amounts in USD 1,000) 2025 2024Opening balance 3,752 6,738Charge/(reversal) for the year 226 -412Written off -1,409 -2,574Closing balance 2,569 3,752
FINANCIAL STATEMENTS / GROUP / NOTES
40
ANNUAL REPORT 2025 PETROLIA SE
During 2025 and 2024 Petrolia Invest AS, a wholly owned subsidiary of the Company, has invested liquid reserves in shares listed on the Oslo Stock
Exchange. The table below presents details for shares in DNO International ASA, ticker DNO. The change of fair value amounting to a profit of USD
24 thousand (2024: loss of USD 2 thousand) is shown in note 8.
NOTE 15 FINANCIAL ASSETS AT FAIR VALUE
THROUGH PROFIT OR LOSS
(amounts in USD 1,000) 2025 2024DNO, shares 36,254 36,254DNO, total shares 975,000,000 975,000,000DNO, % owned 0.004% 0.004%DNO, market value (NOK 15.90 / USD 1.578) (NOK 10.47 / USD 0.922) 57 33Fair Value / Carried value (Level 1) 57 33
NOTE 16 CASH AND CASH EQUIVALENTS
(amounts in USD 1,000) 2025 2024
Bank accounts 17,114 13,397
Hereof accounts restricted
Other 463 8
Sum non-current 463 8
Other 14 14
Employees’ tax deduction 230 191
Sum current 244 205
Total restricted cash 707 213
Free cash 16,407 13,184
Cash and bank accounts per currency (amounts in USD 1,000)
Cash and bank accounts in NOK 8,328 5,662
Cash and bank accounts in USD 4,511 2,727
Cash and bank accounts in GBP 104 451
Cash and bank accounts in EUR 1,357 2,535
Cash and bank accounts in NZD 54 42
Cash and bank accounts in RON 1,906 1,462
Cash and bank accounts in MYR 16 121
Cash and bank accounts in AUD 776 99
Cash and bank accounts in AED 58 10
Cash and bank accounts in PGK 29 298
Cash and bank accounts in IQD 22 2
Expected credit loss -47 -12
Total 17,114 13,397
Restricted cash -707 -213
Total as per cash flow statement 16,407 13,184
Refer to Note 23 for information on the ECL related to cash at bank.
FINANCIAL STATEMENTS / GROUP / NOTES
41
ANNUAL REPORT 2025 PETROLIA SE
Shareholders 31 December 2025 Shares Shareholding1 INDEPENDENT OIL & RESOURCES PLC 1)27 182 571 45,97 %2 LARSEN OIL & GAS AS 1)12 410 177 20,99 %3 TIME CRITICAL PETROLEUM RESOURCES 1)3 789 897 6,41 %4 Noco Oil & Resources Ltd 1)3 709 888 6,27 %5 INCREASED OIL RECOVERY AS 1)3 446 624 5,83 %6 TROMMESTAD, OLE 962 735 1,63 %7 TOKALA AS 578 025 0,98 %8 GRØNLAND, STEINAR 419 007 0,71 %9 ELEKTROLAND NORGE AS 250 713 0,42 %10 U-TURN VENTURES AS 204 345 0,35 %11 NILSEN, SØLVE 202 971 0,34 %12 Ø. H. HOLDING AS 201 482 0,34 %13 TROKON AS 160 000 0,27 %14 REPPEN, JON CHARLES 155 523 0,26 %15 TOSKA, KETIL 150 000 0,25 %16 ØRNES AS 136 220 0,23 %17 WEMUNDSTAD, JOHAN 135 000 0,23 %18 ØSTFOLD ANLEGGSGARTNER AS 129 000 0,22 %19 SKARET INVEST AS 123 679 0,21 %20 OLSEN, ROLF ARILD 120 002 0,20 %Others 4 565 927 7,72 %Total number of shares before treasury shares 59 033 786 99,83 %Treasury shares 100 000 0,17 %Total number of shares 59 133 786 100,00 %
CHANGES TO SHARE CAPITAL
There have been no changes to the share
capital in 2025 or 2024.
In March 2023, 100,000 own shares were
purchased for a total of NOK 411,276 (NOK
4.11 per share) by Petrolia Invest AS, a
100% owned subsidiary.
LIST OF THE MAJOR SHAREHOLDERS
Petrolia SE had a total of 2.622 shareholders
as at 31 December 2025. The tables below
show the Company’s 20 largest sharehold-
ers as at 31 December 2025 and as at 23
April 2026 according to the VPS (shares with
nominal value USD 0.10):
NOTE 17 SHARE CAPITAL
Share capital of Petrolia SEAuthorised Issued Nominal value Book valueBook value(amounts in USD 1,000)sharesshares20252024Shares 272,358,670 59,133,786 USD 0.10 USD 5,913 USD 5,913
FINANCIAL STATEMENTS / GROUP / NOTES
42
ANNUAL REPORT 2025 PETROLIA SE
Name Shares SharesMembers of the board and management as at: 31 December 2025 23 April 2026Berge Gerdt Larsen, Chair of the Board 1) 3,789,897 3,789,897Sølve Nilsen, General manager (Norway) 202,971 202,971Total 3,992,868 3,992,868
1) Berge Gerdt Larsen owns 44.95% of Increased Oil Recovery AS and his son owns the remaining 55.05%. Larsen Oil & Gas AS is a
100% owned subsidiary of Increased Oil Recovery AS. Together the two companies hold 26.82% of the shares. Increased Oil Recovery AS
is a 49.63% shareholder in Independent Oil & Resources Plc, which holds 45.97% of the shares in Petrolia SE. Berge Gerdt Larsen also
controls Time Critical Petroleum Resources AS which holds 6.41% of the shares in Petrolia SE and 20.95% in shares in Independent Oil &
Resources Plc. Independent Oil & Resources Plc is a 38.75% shareholder in Noco Oil & Resources Ltd. Increased Oil Recovery AS owns
100% in Norwegian Oil Company AS which owns 38.42% in Noco Oil & Resources Ltd.
SHARES OWNED BY MEMBERS OF THE BOARD AND OTHER PRIMARY INSIDERS
The table below shows shareholding of members of the board and key management and other related parties (shares with nominal value
USD 0.10)
Shareholders 23 April 2026 Shares Shareholding1 INDEPENDENT OIL & RESOURCES PLC 1)27 182 571 45,97 %2 LARSEN OIL & GAS AS 1)12 410 177 20,99 %3 TIME CRITICAL PETROLEUM RESOURCES AS 1)3 789 897 6,41 %4 Noco Oil & Resources Ltd 1)3 709 888 6,27 %5 INCREASED OIL RECOVERY AS 1)3 446 624 5,83 %6 TROMMESTAD, OLE 985 000 1,67 %7 TOKALA AS 508 025 0,86 %8 GRØNLAND, STEINAR 499 322 0,84 %9 ELEKTROLAND NORGE AS 250 713 0,42 %10 Ø. H. HOLDING AS 218 913 0,37 %11 NILSEN, SØLVE 202 971 0,34 %12 TOSKA, KETIL 150 000 0,25 %13 U-TURN VENTURES AS 145 000 0,25 %14 TROKON AS 140 000 0,24 %15 ØRNES AS 136 220 0,23 %16 WEMUNDSTAD, JOHAN 135 000 0,23 %17 ØSTFOLD ANLEGGSGARTNER AS 129 450 0,22 %18 SKARET INVEST AS 128 685 0,22 %19 Avanza Bank AB 113 641 0,19 %20 OLSEN, ROLF ARILD 101 002 0,17 %Others 4 650 687 7,86 %Total number of shares before treasury shares 59 033 786 99,83 %Treasury shares 100 000 0,17 %Total number of shares 59 133 786 100,00 %
FINANCIAL STATEMENTS / GROUP / NOTES
43
ANNUAL REPORT 2025 PETROLIA SE
NOTE 18 FAIR VALUE
FAIR VALUE
Except financial assets at fair value through
profit or loss and financial assets through
OCI, all financial instruments are measured
at amortised cost. Fair values of loans receiv-
able are based on management's estimates
by reference to loans with similar character-
istics. The carrying amount of loan receivable
approximates its fair value. The carrying value
of cash and cash equivalents approximate the
fair value owing to the fact that these instru-
ments have short maturity. Correspondingly,
the carrying value of the trade receivables
and trade payables approximate the fair value
as they are established at normal terms and
doubtful receivables are impaired by recording
impairment loss. The carrying value of financial
leases approximate their fair value as they
made with third parties and carried interest
at floating rates.
FAIR VALUE HIERARCHY
The Group uses the following hierarchy for
determining and disclosing the fair value of
financial instruments by valuation technique:
•
Level 1: Quoted (unadjusted) prices in
active markets for identical assets or
liabilities.
•
Level 2: Other techniques for which all
inputs which have a significant effect on
the recorded fair value are observable,
either directly or indirectly.
•
Level 3: Techniques which use inputs which
have a significant effect on the recorded
fair value that are not based on observable
market data.
For assets and liabilities that are recognised
in the consolidated financial statements on a
recurring basis, the Group determines wheth-
er transfers have occurred between levels in
the hierarchy by re-assessing categorisation
(based on the lowest level input that is sig-
nificant to the fair value measurement as a
whole) at the end of each reporting period.
The Group's fair value through profit and
loss investments comprises only of listed
shares. Fair value is determined by the
quoted (unadjusted) prices in the market
(Level 1). The carrying amount as at 31
December 2025 was USD 57 thousand. The
fair value of the financial asset through
OCI was determined to be zero, as no cash
flows are expected to be realized from this
asset (level 3).
FINANCIAL STATEMENTS / GROUP / NOTES
44
ANNUAL REPORT 2025 PETROLIA SE
NOTE 19 LEASES
Set out below are the carrying amounts of lease liabilities and the movements during the period:
GROUP AS LESSEE
The Group has lease contracts in respect of equipment and land & buildings. The leases expire between 1 and 5 years for equipment and
between 1 and 10 years for land & buildings. Various extension options are attached.
(amounts in USD 1,000) 2025 2024Lease liabilityAs at 1 January 10,027 14,195Additions 3,262 2,018Modifications 4,459 16Interest 879 746Translation difference 568 -814Payments -6,283 -6,134As at 31 December 12,912 10,027Current 4,297 4,655Non-current 8,615 5,372Set out below are the carrying amounts of lease liabilities per currency:(amounts in USD 1,000) 2025 2024NOK 4,714 5,876 USD 1,489 799 EUR 1,283 1,619 NZD 161 200 AUD 4,907 1,098 RON 146 123 MYR 0 29 IQD 73 83 GBP 139 200 As at 31 December 12,912 10,027
Modifications in 2025 primarily consist of
lease extensions on our base in Australia.
A carrying amount of USD 4.4 million (2024:
USD 4.2 million) relates to equipment, and
there are no options to extend or terminate.
The lease term varies from 1 to 5 years and
the average incremental borrowing rate used
in the lease calculations is 5% (2024: 5%).
A carrying amount of USD 8.5 million (2024:
USD 5.8 million) relates to rental of offices.
In most of the rental agreements there are
options to extend. The lease term varies from
1 to 10 years and the average incremental
borrowing rate used in the lease calculations
is 5% (2024: 5%).
FINANCIAL STATEMENTS / GROUP / NOTES
45
ANNUAL REPORT 2025 PETROLIA SE
NOTE 20 TRADE AND OTHER PAYABLES
(amounts in USD 1,000) 2025 2024Trade payables 4,208 3,217Total trade payables 4,208 3,217Other payablesOther current liabilities 7,992 5,455Total other payables 7,992 5,455Total trade and other payables 12,200 8,672
NOTE 21 BANK LOANS AND OVERDRAFT
The Group has one unused overdraft facility of EUR 350 thousand.
FINANCIAL STATEMENTS / GROUP / NOTES
Current liabilities Interest Maturity Security Effective inter-2025 2024(amounts in USD 1,000)est rateBank loan GBP 50,000 Fixed 0% first year, June 2030 None 2.50 % 7 6thereafter 2.5%Bank loan AUD 680,000 Fixed 3.04% May 2026 (2024: Equipment 3.08 % 2 67June 2025)Bank loan EUR 400,000 Euribor 1M + 2% September 2029 Property, plant, bank 4.94 % 78 69Bank loan EUR 600,000 Euribor 1M + 2% December 2029 Property, plant, bank 4.92 % 131 116Bank loan EUR 728,077 Euribor 1M + 2% January 2031 Property, plant, bank 4.07 % 157 0Total 375 258Non-current liabilities Interest Maturity Security Effective in-2025 2024(amounts in USD 1,000)terest rateBank loan GBP 50,000 Fixed 0% first year, June 2030 None 2.50 % 28 33thereafter 2.5%Bank loan EUR 400,000 Euribor 1M + 2% September 2029 Property, plant, bank 4.94 % 215 260Bank loan EUR 600,000 Euribor 1M + 2% December 2029 Property, plant, bank 4.92 % 374 463Bank loan EUR 728,077 Euribor 1M + 2% January 2031 Property, plant, bank 4.07 % 699 0Total 1,316 756
46
ANNUAL REPORT 2025 PETROLIA SE
CAPITAL STRUCTURE AND EQUITY
For the purpose of the Group's capital man-
agement, capital includes issued capital, share
premium and all the equity reserves attribut-
able to the equity holders of the parent. The
main objectives of the Group when monitoring
capital are to safeguard the Group’s ability
to maintain favourable loan terms from the
lenders in accordance with the Group’s op-
erations. By maintaining a satisfactory debt
ratio and meeting its loan covenants, the
Group is supporting the current operations
and maximising the Group’s value accordingly.
The Group is managing the capital structure
and making necessary adjustments based
on a continuous assessment of the financial
conditions that the enterprise is subject to and
the present short and medium term prospects.
The capital structure is managed through
purchase of treasury shares, reduction of
share capital, issuing new shares or through
dividend policy.
NOTE 22 CAPITAL MANAGEMENT
Financial risk factors and categories of financial
instruments
The Group uses financial instruments
such as bond loans, bank loans and over-
drafts, financial leases and borrowings
from related parties. The purpose of these
financial instruments is to provide capital
for investments necessary for the Group’s
activities. In addition the Group has finan-
cial instruments like trade receivables and
trade payables which are directly connected
to the current operations of the Group.
The Group has no derivative financial in-
struments, neither for hedging nor trading
purposes. Except from the financial assets
at fair value, all the financial assets are
categorised as loans, receivables and cash
and cash equivalent and are measured
at amortised cost. In 2025 and 2024 the
Group has invested in shares listed on the
Oslo Stock Exchange.
Profit and loss effects from financial in-
struments measured at fair value through
profit and loss are disclosed in note 15.
Impairment on financial instruments con-
cerns mainly loans to associated company
and trade receivables and are disclosed
in notes 13 and 14 respectively and under
Credit risk below. The Group’s activities
expose it to a variety of financial risks:
credit risk, interest risk, liquidity risk and
currency risk. The Group’s overall risk
management programme focuses on the
unpredictability of financial markets and
seeks to minimise potential adverse effects
on the Group’s financial performance.
The Group’s management is currently mon-
itoring the risk related to credit, interest
rate, liquidity and foreign exchange. The
Group is subject to a balanced exposure
through income and expenses in USD and
NOK and financing in USD and NOK. The
Group has a fixed rate on the major part of
interest bearing liabilities, which limits the
cash flow interest rate risk. The credit risk
which the Group is exposed to is acceptable.
Credit risk
The Group is primarily exposed to credit risk
related to trade receivables, other receiva-
bles, loans receivable and cash at bank. The
maximum risk exposure is represented by
the carrying value of trade receivables and
other receivables referred to in note 14,
loan receivable shown in note 13 and cash
at bank in note 16.
The Group’s revenues arise from a limited
number of transactions and customers and
therefore credit risk is transparent.
Management has assessed the collectability
of receivables and do not expect losses other
than the expected credit allowance already
provided in line with the accounting policy.
In 2023,expected credit loss of USD 250
NOTE 23 FINANCIAL RISK MANAGEMENT
(amounts in USD 1,000) 2025 2024Equity of majority 48,347 40,824Bank loans 1,691 1,014 Leases 12,912 10,027 Trade payables 4,208 3,217 Other payables 8,222 5,668Less free cash -16,407 -13,184Net debt 10,626 6,742Equity and net debt 58,973 47,566Debt ratio 18% 14 %
FINANCIAL STATEMENTS / GROUP / NOTES
47
ANNUAL REPORT 2025 PETROLIA SE
Liquidity risk
Liquidity risk is the risk that the Group may
not be able to meet its financial liabilities as
they fall due. The Group’s strategy of handling
liquidity risk is to have sufficient liquidity at
all times to pay any liability on maturity, in
both normal and extraordinary circumstances.
Sensitivity for changes in interest rate level (amounts in USD 1,000) Changes in interest rate
level in basic items
Impact on result
before tax
Impact on
equity
2025 +50 12 9
2024 +50 -4 -3
Further information regarding the interest rate conditions of the Group’s financing is given in notes 13, 18, 19 and 21.
thousand was provided for the loans receiv-
able. In 2024 the change in ECL related to
the loans was estimated to be insignificant.
In 2025 a reversal of the ECL by USD 35,000
reduced the ECL balance to USD 215,000.
Refer also to note 13.
The Group does not hold any collateral as
security for its receivables.
The Group assesses, on an individual basis,
its exposure to credit risk arising from other
receivables. Management estimated the im-
pairment loss at 31 December 2025 of other
receivables to be immaterial.
The Group assesses, on an individual basis,
its exposure to credit risk arising from cash
at bank. This assessment takes into account,
ratings from external credit rating institutions.
Management applies the IFRS 9 general ap-
proach. Bank balances were assessed as
performing (Stage 1) and an ECL provision
of USD 47 thousand was made regarding one
bank in Iraq. The ECL on other bank accounts
is considered to be immaterial, as the cash
at bank are held with banks with investment
grade rating.
Financial guarantees
Guarantees which represent irrevocable as-
surances that the Group will make payments
in the event that a counterparty cannot meet
its obligations to third parties, carry the same
credit risk as loans receivable.
At the reporting date, the Group acts as a sole
guarantor to the loan of associate company
Petrolia Noco AS. As at 31 December 2025,
and at the reporting date, the outstanding
loan balance subject to this guarantee totalled
NOK 50.0 million (USD 5.0 million) and the loan
has been properly served by Petrolia Noco
AS with no defaults. A financial guarantee
liability of USD 129 thousand is included in
other payables in note 20, which represents
the guarantee fee charged less cumulative
amortisation. No expected credit losses have
been recognised as of the reporting date in
respect of these financial guarantees provided
by the Group, since it was assessed that the
present value of related expected payments
is immaterial.
Until the date of the approval of the financial
statements, no claim has been raised for the
loan guarantee and the Board of Directors
does not expect any claim in the future.
Interest rate risk
The Group is exposed to interest rate risk
through its financing activities (refer to notes
19 and 21). Part of the interest-bearing
liabilities is based on floating rates which
imply that the Group is exposed to changes
in the interest rate level.
The Group’s interest rate risk management
aims at reducing the interest expenses and at
the same time the volatility of future interest
payments is kept within acceptable frames.
As at 31 December 2025 the Group’s bank
loans have fixed and variable interest, while
the lease obligations are subject to floating
rates of interest.
Liquidity risk may also arise from the financial
guarantee contracts provided by the Group
to secure credit facilities obtained by the
associate of the Group, as further analysed
in Credit risk above.
The table below states the maturity profile
of the financial liabilities recognised as at
31 December 2025 and 2024.
As at 31st of December 2025 < 1 year 1-5 years > 5 years TotalTrade payables 4,208 0 0 4,208Leasing (including interest) 4,656 9,433 39 14,128Bank loans (including interests) 438 1,407 14 1,859Other liabilities 8,222 0 0 8,222Total 17,524 10,840 53 28,417
FINANCIAL STATEMENTS / GROUP / NOTES
48
ANNUAL REPORT 2025 PETROLIA SE
As at 31st of December 2024 < 1 year 1-5 years > 5 years TotalTrade payables 3,217 0 0 3,217Leasing (including interest) 4,968 6,529 150 11,647Bank loans (including interests) 355 844 12 1,211Other liabilities 5,668 0 0 5,668Total 14,208 7,373 162 21,743
Foreign exchange risk
The Group operates internationally and is
exposed to foreign exchange risk arising from
various currency exposures, primarily with
respect to the NOK. Foreign exchange risk
arises from future commercial transactions
and recognised assets and liabilities. Foreign
exchange risk arises when future commercial
transactions or recognised assets or liabilities
are denominated in a currency that is not
the entity’s functional currency. The Group
is exposed to exchange rate fluctuations
connected to the value of NOK relative to
USD due to the fact that the Group has mainly
income and operating expenses in USD while
parts of the financing and some assets are
denominated in NOK.
The Group has certain investments in foreign
operations, whose net assets are exposed to
foreign currency translation risk.
The table below illustrates the Group’s sen-
sitivity related to reasonable changes in the
currency rate between USD and NOK. The
Group's main exposure to NOK is from the
loan receivable amounting to USD 5.1 million,
excluding accrued interest and expected credit
losses, (2024: USD 5.4 million) as shown in
note 13, cash at bank amounting to USD 8.3
million (2024: USD 5.7 million) as shown in
note 16 and lease liabilities amounting to
USD 4.7 million (2024: USD 5.9 million) as
shown in note 19.
Changes in other currencies will not have
material impact on the profit & loss.
Changes in the exchange rate of NOK Impact on result before taxes Impact on equity
2025 5 % 438 341
-10 % -875 -682
2024 5 % 261 204
-10 % -523 -408
2025 1 January 2025 Cash movement Translation
difference
Non-cash
movement
Interest 31 December
2025
Bank loans 1,013 481 135 0 60 1,689
Lease liabilities 10,027 -6,283 568 7,721 879 12,912
Total 11,040 -5,802 703 7,721 939 14,601
CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES
2024 1 January 2024 Cash movement Translation
difference
Non-cash
movement
Interest 31 December
2024
Bank loans 662 356 -58 0 53 1,013
Lease liabilities 14,195 -6,134 -813 2,033 746 10,027
Total 14,857 -5,778 -871 2,033 799 11,040
FINANCIAL STATEMENTS / GROUP / NOTES
49
ANNUAL REPORT 2025 PETROLIA SE
LARSEN OIL & GAS AS (LOG AS) AND IN-
CREASED OIL RECOVERY AS (IOR AS) AND
KVER AS
IOR AS is the 100% owner of LOG AS and
Kver AS. Mr. Berge Gerdt Larsen, Chair of
the Board has economic interest of 44.95%
in IOR AS and is the Chair of the board in
IOR AS and LOG AS.
The Company has an office support agreement
with LOG AS. The annual cost coverage was
NOK 1.6 million (USD 153,089) in 2025. The
annual cost coverage was NOK 1.4 million
(USD 135,170) in 2024.
The Company has an office lease agreement
with Kver AS. Annual office rent is NOK 1.4
million (USD 134,334). In 2025 shared costs
amounted to NOK 1.3 million (USD 131,852).
In 2024 annual office rent was NOK 1.4 million
(USD 129,379) and shared costs were NOK
1.2 million (USD 105,787).
PETROLIA NOCO AS
The Group has granted two loans to Petrolia
NOCO AS (owned 49.9%). The loans are
denominated in NOK and carried an interest
rate of 10% and 13.2% in 2025. The loans
have maturity date on 1 January 2027 (Note
13). The investment in the associated com-
pany is shown in note 12 and the loans are
shown in note 13.
MOUNTWEST PETROLEUM LTD.
The Group has an office lease agreement with
Mountwest Petroleum Ltd. Annual office rent
is GBP 51,700 (USD 66,122). Mr. Berge Gerdt
Larsen, Chair of the Board has indirect eco-
nomic interest in Mountwest Petroleum Ltd.
PETRORESOURCES LTD
The Group has an advisory service agreement
with Petroresources Ltd with a quarterly
fee of EUR 30,000. In 2025 EUR 120,000
(2024: EUR 120,000) has been invoiced in
respect of the said agreement. Mr. Berge
Gerdt Larsen, Chair of the Board, has indi-
rect economic interest in, and is employed
by Petroresources Ltd.
REMUNERATION OF DIRECTORS AND KEY
MANAGEMENT PERSONNEL AND DIRECTORS
FEES
Refer to note 6.
NOTE 24 RELATED PARTIES
FINANCIAL STATEMENTS / GROUP / NOTES
50
ANNUAL REPORT 2025 PETROLIA SE
NOTE 25 MATERIAL PARTLY OWNED SUBSIDIARIES
The summarised financial information of these subsidiaries is provided below. This information is based on amounts before
inter-company eliminations.
Independent Oil Tools Independent Oil Tools Iraq DOSCO BVfor General Trading Co. LtdThe NetherlandsIraq2025 2024 2025 2024Proportion of equity interest held by non-controlling interest 30 % 30 % 39 % 39 %Accumulated balances of material non-controlling interest 2,217 2,196 -187 -275 (Loss)/profit allocated to material non-controlling interest -270 164 87 -879 Comprehensive income/(loss) allocated to material non-controlling interest 21 28 87 -879
Summarised statement of profit or loss 2025 2024 2025 2024Revenue 15,321 15,163 8,168 2,586 Cost of sales -10,425 -9,646 -5,239 -954 Administrative expenses -4,689 -4,187 -2,150 -2,442 Depreciation -1,058 -615 -477 -1,463 Finance (cost)/income -52 -1 42 19 (Loss)/profit before tax -903 714 344 -2,254 Income tax 3 -168 -120 0 (Loss)/profit for the year -900 546 224 -2,254 Exchange differences 970 -451 0 0 Total comprehensive income/(loss) 70 95 224 -2,254 Attributable to non-controlling interest 21 28 87 -879 Dividends paid to non-controlling interest 0 0 0 0Summarised statement of financial position 2025 2024 2025 2024Current assets 4,478 5,053 6,482 2,495 Non-current assets 5,711 2,733 1,443 1,892 Current liabilities 2,801 467 8,405 5,091 Non-current liabilities 0 0 0 0 Total equity 7,389 7,319 -480 -704 Attributable to:- Equity holders of parent 5,172 5,123 -293 -429 - Non-controlling interest 2,217 2,196 -187 -275
FINANCIAL STATEMENTS / GROUP / NOTES
51
ANNUAL REPORT 2025 PETROLIA SE
Finished goods represent Energy Service
equipment held for sale. For the cost of goods
sold refer to Note 7.
NOTE 26 INVENTORIES
(Amounts in USD 1,000)2025 2024Spare parts 365 295Finished goods (at lower of cost and net realisable value) 1,723 1,539Total inventories 2,088 1,834
NOTE 27 OPERATING ENVIRONMENT OF THE GROUP
The activity of the Group is closely correlated
to the oil price and events affecting supply
and/or demand, and thus price, will affect the
Group’s activity level.
When oil prices drop to a lower level, the oil
companies reduce their activity to protect their
cash flows. The reduced activity of oil compa-
nies, may lead to reduced demand and activity
for the Group's services.
When the prices increase again, the oil com-
panies first want to see their cash balances
increase before increasing the activity levels
again. There are local variations to how quickly
this is implemented.
In Iraq, the operational environment is neg-
atively affected by uncertainty regarding the
production sharing agreements between the
oil companies and the authorities and tight re-
striction on payments in USD. This resulted in a
sharp reduction in the activity in the second half
of 2023 and all of 2024. Following the opening
of the pipeline, the activity picked up in 2025.
The Group has managed to increase prices
largely in line with inflation and with limited
debt, the effects from rising interest rates
have been limited.
IRAN CONFLICT
The main effects of the conflict are increased
energy prices which on one side can improve the
cash flows of the oil companies and enable them
to increase their activity and on the other side
can cause inflation and reduced global demand
for energy. In addition, reduced available vol-
umes of hydrocarbons can reduce economic
activity due to lack of energy and thus also
reduce demand. For the Group this can be
positive if activity increases in more stable
geographic areas. Our activity in Iraq, however,
has been reduced due to the conflict.
The financial effect of the current crisis on the
global economy and overall business activities
cannot be estimated with reasonable certainty
at this stage, due to the pace at which the
conflict is evolving and the high level of un-
certainties arising from the inability to reliably
predict the outcome.
The impact on the Group largely depends on the
nature and duration of these events. Should
these circumstances become prolonged or
escalate, they may lead the Group in incurring
financial losses in respect of its Iraqi component
and increase the risk of the recoverability of
receivables from clients.
This has limited spillover effect to other loca-
tions and does not change our Going Concern
assessment.
On the basis of the Group analysis, the Group
concluded that it is in position to financially
support the Iraqi component if such a need
arises over the next 12 months of the date
of approving these Financial Statements.
FINANCIAL STATEMENTS / GROUP / NOTES
52
ANNUAL REPORT 2025 PETROLIA SE
GEOPOLITICAL SITUATION IN THE MIDDLE
EAST
On 28 February 2026, the geopolitical situation
in the Middle East escalated due to the armed
conflict. The situation has created heightened
uncertainty in international relations and fi-
nancial markets, with potential implications
for global trade, energy supply, and overall
economic stability. The extent and duration of
these effects remain uncertain and cannot be
reliably estimated at this stage.
There are events that are indicative of con-
ditions that arose after the reporting period.
Therefore, these are considered as a non-ad-
justing event and thus, are not reflected in the
recognition and measurement of the assets and
liabilities in the financial statements as at 31
December 2025. Additional disclosures have
been included in Note 27.
CYPRUS TAX REFORM
On 31 December 2025, Cyprus enacted signifi-
cant tax reform measures aimed at stimulating
economic growth and enhancing tax compliance,
with most changes effective from 1 January
2026. The tax reform includes amendments
to six tax laws, namely the Income Tax law, the
Special Contribution for Defence law, the Capital
Gains Tax law, the Assessment and Collection
of Taxes law, the Collection of Taxes law and
the Stamp Duty law. Amongst the changes is
the increase in the corporate income tax rate
from 12,5% to 15%.
NOTE 28 EVENTS AFTER THE REPORTING PERIOD
Except for the matters mentioned above, there
were no other material events after the re-
porting period, which have a bearing on the
understanding of the financial statements.
FINANCIAL STATEMENTS / GROUP / NOTES
53
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / GROUP / NOTES
ANNUAL REPORT 2025 PETROLIA SE
54
FINANCIAL
STATEMENTS
PETROLIA SE
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
31 December 2025
2025 2024
Note USD 000 USD 000
Revenue from contracts with customers 8 171 162
Dividend income 23.4 - 2,856
Administration expenses (1,853) (1,438)
Operating (loss)/profit 9 (1,682) 1,580
Finance income 11 1,642 1,036
Finance costs 11 (9) (895)
Reversal of impairment on subsidiary companies - net 14 4,534 4,642
Impairment charge on investments in associates 15
(920) -
Profit before tax
3,565 6,363
Tax
12
- -
Net profit for the year
3,565 6,363
Total comprehensive income for the year
3,565 6,363
The notes on pages 5 to 27 form an integral part of these separate financial statements.
1
55
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS
Petrolia SE - Parent Company - 31 December 2025
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
31 December 2025
2025 2024
Note USD 000 USD 000
Revenue from contracts with customers 8 171 162
Dividend income 23.4 - 2,856
Administration expenses (1,853)
(1,438)
Operating (loss)/profit 9 (1,682) 1,580
Finance income 11 1,642 1,036
Finance costs 11 (9) (895)
Reversal of impairment on subsidiary companies - net 14 4,534 4,642
Impairment charge on investments in associates 15
(920)
-
Profit before tax
3,565 6,363
Tax
12
-
-
Net profit for the year
3,565
6,363
Total comprehensive income for the year
3,565
6,363
The notes on pages 5 to 27 form an integral part of these separate financial statements.
1
56
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
Polycarpos Protopapas
Board member
Managing director
Sjur Storaas
Board member
Marios Tornaritis
Finance manager
George Hadjineophytou
Board member
PETROLIA SE
STATEMENT OF FINANCIAL POSITION
31 December 2025
2025 2024
Note USD 000 USD 000
ASSETS
Non-current assets
Property, plant and equipment 13 - 1
Right-of-use assets 19 64 129
Investments in subsidiaries 14 39,250 34,716
Investments in associates
15
-
-
39,314 34,846
Current assets
Trade and other receivables
17 28 722
Loans receivable from associate 16 4,949 5,212
Restricted cash 18 30 28
Cash at bank
20
345
1,746
5,352 7,708
Total assets 44,666 42,554
EQUITY AND LIABILITIES
Equity
Share capital 21 5,913 5,913
Share premium 12,222 12,222
Distributable reserve 67,093 67,093
Accumulated losses (41,316)
(44,881)
Total equity
43,912
40,347
Non-current liabilities
Lease liabilities
19
-
65
- 65
Current liabilities
Trade and other payables
22 681 2,080
Lease liabilities
19
73
62
754 2,142
Total liabilities 754 2,207
Total equity and liabilities 44,666 42,554
On 27 April 2026 the Board of Directors of Petrolia SE authorised these separate financial statements for issue.
Polycarpos Protopapas Sjur Storaas Berge Gerdt Larsen George Hadjineophytou Marios Tornaritis
Board Member Board Member Chairman of the Board Board Member Finance Manager
Managing Director
The notes on pages 5 to 27 form an integral part of these separate financial statements.
2
Berge Gerdt Larsen
Chair of the Board
57
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
STATEMENT OF FINANCIAL POSITION
31 December 2025
2025 2024
Note USD 000 USD 000
ASSETS
Non-current assets
Property, plant and equipment 13 - 1
Right-of-use assets 19 64 129
Investments in subsidiaries 14 39,250 34,716
Investments in associates
15
- -
39,314 34,846
Current assets
Trade and other receivables
17 28 722
Loans receivable from associate 16 4,949 5,212
Restricted cash 18 30 28
Cash at bank
20
345 1,746
5,352 7,708
Total assets 44,666 42,554
EQUITY AND LIABILITIES
Equity
Share capital 21 5,913 5,913
Share premium 12,222 12,222
Distributable reserve 67,093 67,093
Accumulated losses (41,316) (44,881)
Total equity
43,912 40,347
Non-current liabilities
Lease liabilities
19
- 65
- 65
Current liabilities
Trade and other payables
22 681 2,080
Lease liabilities
19
73 62
754 2,142
Total liabilities 754 2,207
Total equity and liabilities 44,666 42,554
On 27 April 2026 the Board of Directors of Petrolia SE authorised these separate financial statements for issue.
Polycarpos Protopapas Sjur Storaas Berge Gerdt Larsen George Hadjineophytou Marios Tornaritis
Board Member Board Member Chairman of the Board Board Member Finance Manager
Managing Director
The notes on pages 5 to 27 form an integral part of these separate financial statements.
2
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
STATEMENT OF CHANGES IN EQUITY
31 December 2025
Share
capital
Share
premium
Distributable
reserve (1)
Accumulated
losses Total
USD 000 USD 000 USD 000 USD 000 USD 000
Balance at 1 January 2024 5,913 12,222 67,093 (51,244) 33,984
Comprehensive income
Profit for the year / Total
comprehensive income for the year
-
- - 6,363 6,363
Balance at 31 December
2024/ 1 January 2025 5,913 12,222 67,093 (44,881) 40,347
Comprehensive income
Profit for the year / Total
comprehensive income for the year -
- - 3,565 3,565
Balance at 31 December 2025
5,913
12,222 67,093 (41,316) 43,912
(1) By a Court Order dated 30/06/2023 sanctioning the shareholder's special resolution dated 31/05/2023 the Merger
reserve of USD 67,093,489.64 was reduced to USD 0, and the said reduction was effected by crediting the reduction
amount of USD 67,093,489.64 to a distributable reserve of the Company. The distributable reserve shall be available
to the Directors of the Company to treat as they deem fit in their absolute discretion.
The notes on pages 5 to 27 form an integral part of these separate financial statements.
3
58
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
STATEMENT OF CASH FLOWS
31 December 2025
2025 2024
Note USD 000 USD 000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 3,565 6,363
Adjustments for:
Depreciation of property, plant and equipment 13 1 1
Net exchange (gain)/loss (830) 958
Impairment charge - investments in associates 15 920 -
Reversal of impairment - investment in subsidiaries 14 (4,534) (4,642)
Reversal of expected credit loss on loan receivable 16 (35) -
Reversal of expected credit loss on receivables from related parties 23.5 - (228)
Dividend income 23.4 - (2,856)
Interest income 11 (737) (732)
Financial Guarantee income
11
(74)
(76)
(1,724) (1,212)
Changes in working capital:
Decrease in trade and other receivables 820 120
Decrease in trade and other payables (1,282)
(2,461)
(2,186) (3,553)
Dividends received
-
2,856
Net cash used in operating activities
(2,186)
(697)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions for investments in associated undertakings 15 (920) -
Loans repayments received 16 921 -
Bank interest received 38 -
Loan interest received 16 693 764
Financial guarantee fee received
22
129
14
Net cash generated from investing activities
861
778
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of leases liabilities capital 19 (70) (63)
Payments of leases liabilities interest 19 (4) (8)
(Increase)/decrease in restricted cash
18
(2)
3
Net cash used in financing activities
(76)
(68)
Net (decrease)/increase in cash and cash equivalents (1,401) 13
Cash and cash equivalents at beginning of the year 1,746 1,733
Cash and cash equivalents at end of the year
20
345 1,746
The notes on pages 5 to 27 form an integral part of these separate financial statements.
4
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
1. Incorporation and principal activities
Country of incorporation
Petrolia SE (the ''Company'') was incorporated in Cyprus on 9 August 2011 as a limited liability company under the
Cyprus Companies Law, Cap. 113. Its registered office is at Christodoulou Chatzipavlou 205, Louloupis court, 4th
Floor, Office 401, 3036, Limassol, Cyprus.
On 17 November 2011, the Company changed its name from Petrolia E&P Holdings Limited to Petrolia E&P Holdings
Plc. Following a shareholders’ plan to re-domicile to Cyprus that was approved on 30 December 2011, Petrolia ASA
merged (“cross-border merger”) with Petrolia E&P Holdings Plc (“surviving entity”) and the latter was at the same
time converted into a European public company limited by shares (“Societas Europaea” or “SE”) in accordance with
Article 2 no. 1 of the European Council Regulation no. 2157/2001 (the “SE Regulation”) and Section 5 of the
Norwegian Act on European Companies of 1 April 2005 (the “SE Act”).
Following the completion of the cross-border merger on 26 October 2012 and the creation of Petrolia E&P Holdings
SE, the Company on 28 January 2013 changed its name to Petrolia SE.
The Company’s shares are listed on the Oslo Stock Exchange (Ticker: “PSE”). On 21 September 2018, the Company
changed its ticker name from ''PDR'' to ''PSE''.
Principal activities
The principal activities of the Company, which are unchanged from prior year, are the financing of group companies
and the holding of investments in subsidiaries and associates engaged in two business segments: Energy and Energy
Service. The core activities of the Company include the holding in a subsidiary company (Petrolia AS), which is a well
established international oil service company. The Company has established a branch (Petrolia NUF) in Norway in
order to facilitate its operations.
Environment and sustainability
The Company recognises the potential to damage the environment through its operations and its responsibility to
implement effective management to safeguard the environment by minimising such an impact and has capable
people to manage such risks at every stage. CO2 emissions from its activities receive the greatest attention. The
Company is committed to making a positive contribution to global sustainability and to protect the environment. The
Company aims to operate to the highest international social, environmental and safety standards within the industry
and believes that it is important to make a positive contribution to all of the geographical areas where it operates.
Climate change and the transition to a lower carbon economy has been identified as a possible risk and a opportunity
but presently does not affect the Company's accounts.
The Company's objective is that all of its activities are carried out with minimum risk to people or damage to the
surroundings. The Company’s activities have conformed with the demands of the prevailing authorities in its
worldwide operations regarding the pollution of the environment.
2. Basis of preparation
These parent company financial statements have been prepared in accordance with IFRS Accounting Standards as
adopted by the European Union and the requirements of the Cyprus Companies Law, Cap.113. The financial
statements have been prepared under the historical cost convention. The notes to the consolidated financial
statements provide additional information to the parent company financial statements. The accounting policies
applied to the Group accounts have also been applied to the parent company, Petrolia SE. The parent company
financial statements should be read in conjunction with the consolidated financial statements. Investments in
subsidiaries and associates are carried at cost less impairment in these separate financial statements. In case of
impairment, the investment is written down to its recoverable amount. The Company’s functional currency is US
dollars (USD) and the separate financial statements are presented in USD, rounded to the nearest thousand.
These parent company financial statements include the stand-alone results and position of the Company including its
Norwegian registered branch, Petrolia NUF.
5
59
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
STATEMENT OF CASH FLOWS
31 December 2025
2025 2024
Note USD 000 USD 000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax 3,565 6,363
Adjustments for:
Depreciation of property, plant and equipment 13 1 1
Net exchange (gain)/loss (830) 958
Impairment charge - investments in associates 15 920 -
Reversal of impairment - investment in subsidiaries 14 (4,534) (4,642)
Reversal of expected credit loss on loan receivable 16 (35) -
Reversal of expected credit loss on receivables from related parties 23.5 - (228)
Dividend income 23.4 - (2,856)
Interest income 11 (737) (732)
Financial Guarantee income
11
(74) (76)
(1,724) (1,212)
Changes in working capital:
Decrease in trade and other receivables 820 120
Decrease in trade and other payables (1,282) (2,461)
(2,186) (3,553)
Dividends received
- 2,856
Net cash used in operating activities
(2,186) (697)
CASH FLOWS FROM INVESTING ACTIVITIES
Additions for investments in associated undertakings 15 (920) -
Loans repayments received 16 921 -
Bank interest received 38 -
Loan interest received 16 693 764
Financial guarantee fee received
22
129 14
Net cash generated from investing activities
861 778
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of leases liabilities capital 19 (70) (63)
Payments of leases liabilities interest 19 (4) (8)
(Increase)/decrease in restricted cash
18
(2) 3
Net cash used in financing activities
(76) (68)
Net (decrease)/increase in cash and cash equivalents (1,401) 13
Cash and cash equivalents at beginning of the year 1,746 1,733
Cash and cash equivalents at end of the year
20
345 1,746
The notes on pages 5 to 27 form an integral part of these separate financial statements.
4
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
1. Incorporation and principal activities
Country of incorporation
Petrolia SE (the ''Company'') was incorporated in Cyprus on 9 August 2011 as a limited liability company under the
Cyprus Companies Law, Cap. 113. Its registered office is at Christodoulou Chatzipavlou 205, Louloupis court, 4th
Floor, Office 401, 3036, Limassol, Cyprus.
On 17 November 2011, the Company changed its name from Petrolia E&P Holdings Limited to Petrolia E&P Holdings
Plc. Following a shareholders’ plan to re-domicile to Cyprus that was approved on 30 December 2011, Petrolia ASA
merged (“cross-border merger”) with Petrolia E&P Holdings Plc (“surviving entity”) and the latter was at the same
time converted into a European public company limited by shares (“Societas Europaea” or “SE”) in accordance with
Article 2 no. 1 of the European Council Regulation no. 2157/2001 (the “SE Regulation”) and Section 5 of the
Norwegian Act on European Companies of 1 April 2005 (the “SE Act”).
Following the completion of the cross-border merger on 26 October 2012 and the creation of Petrolia E&P Holdings
SE, the Company on 28 January 2013 changed its name to Petrolia SE.
The Company’s shares are listed on the Oslo Stock Exchange (Ticker: “PSE”). On 21 September 2018, the Company
changed its ticker name from ''PDR'' to ''PSE''.
Principal activities
The principal activities of the Company, which are unchanged from prior year, are the financing of group companies
and the holding of investments in subsidiaries and associates engaged in two business segments: Energy and Energy
Service. The core activities of the Company include the holding in a subsidiary company (Petrolia AS), which is a well
established international oil service company. The Company has established a branch (Petrolia NUF) in Norway in
order to facilitate its operations.
Environment and sustainability
The Company recognises the potential to damage the environment through its operations and its responsibility to
implement effective management to safeguard the environment by minimising such an impact and has capable
people to manage such risks at every stage. CO2 emissions from its activities receive the greatest attention. The
Company is committed to making a positive contribution to global sustainability and to protect the environment. The
Company aims to operate to the highest international social, environmental and safety standards within the industry
and believes that it is important to make a positive contribution to all of the geographical areas where it operates.
Climate change and the transition to a lower carbon economy has been identified as a possible risk and a opportunity
but presently does not affect the Company's accounts.
The Company's objective is that all of its activities are carried out with minimum risk to people or damage to the
surroundings. The Company’s activities have conformed with the demands of the prevailing authorities in its
worldwide operations regarding the pollution of the environment.
2. Basis of preparation
These parent company financial statements have been prepared in accordance with IFRS Accounting Standards as
adopted by the European Union and the requirements of the Cyprus Companies Law, Cap.113. The financial
statements have been prepared under the historical cost convention. The notes to the consolidated financial
statements provide additional information to the parent company financial statements. The accounting policies
applied to the Group accounts have also been applied to the parent company, Petrolia SE. The parent company
financial statements should be read in conjunction with the consolidated financial statements. Investments in
subsidiaries and associates are carried at cost less impairment in these separate financial statements. In case of
impairment, the investment is written down to its recoverable amount. The Company’s functional currency is US
dollars (USD) and the separate financial statements are presented in USD, rounded to the nearest thousand.
These parent company financial statements include the stand-alone results and position of the Company including its
Norwegian registered branch, Petrolia NUF.
5
FINANCIAL STATEMENTS / PARENT
60
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
3. Adoption of new or revised standards and interpretations
During the current year the Company adopted all the new and revised IFRS Accounting Standards that are relevant
to its operations and are effective for accounting periods beginning on 1 January 2025.
IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2025. The amendments
specify how an entity should assess whether a currency is exchangeable and how it should determine a spot
exchange rate when exchangeability is lacking. A currency is considered to be exchangeable into another currency
when an entity is able to obtain the other currency within a time frame that allows for a normal administrative delay
and through a market or exchange mechanism in which an exchange transaction would create enforceable rights and
obligations. If a currency is not exchangeable into another currency, an entity is required to estimate the spot
exchange rate at the measurement date. An entity’s objective in estimating the spot exchange rate is to reflect the
rate at which an orderly exchange transaction would take place at the measurement date between market
participants under prevailing economic conditions. The amendments note that an entity can use an observable
exchange rate without adjustment or another estimation technique. The amendments had no impact on the
Company’s separate financial statements.
4. Material accounting policies
The material accounting policies adopted in the preparation of these separate financial statements are set out below.
These policies have been consistently applied to all years presented in these separate financial statements unless
otherwise stated.
Subsidiary companies
Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as
an expense in the period in which the impairment is identified.
Associates
Associates are all entities over which the Company has significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the
financial and operating policy decisions of the investee without the power to control or jointly control those policies.
Investments in associated undertakings are stated at cost less provision for impairment in value, which is recognised
as an expense in the period in which the impairment is identified.
Revenue
Recognition and measurement
Revenue shall be recognised in such a way to depict the transfer of services to customers and reflect the
consideration that the entity expects to be entitled to in exchange for transferring those services to the customer; the
transaction price.
Revenue from contracts with customers is recognised when control of the services are transferred to the customer at
an amount that reflects the consideration to which the Company expects to be entitled in exchange for those
services.
Identification of performance obligations
The Company assesses whether contracts that involve the provision of a range of services contain one or more
performance obligations (that is, distinct promises to provide a service) and allocates the transaction price to each
performance obligation identified on the basis of its stand-alone selling price. A service that is promised to a
customer is distinct if the customer can benefit from the service, either on its own or together with other resources
that are readily available to the customer (that is the service is capable of being distinct) and the Company's promise
to transfer the service to the customer is separately identifiable from other promises in the contract (that is, the
service is distinct within the context of the contract).
6
61
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
4. Material accounting policies (continued)
Management and consultancy fees
Revenue from rendering of services is recognised over time while the Company satisfies its performance
obligation by transferring control over the promised service to the customer in the accounting period in
which the services are rendered. For fixed price contracts, revenue is recognised based on the actual service
provided to the end of the reporting period as a proportion of the total services to be provided because the
customer receives and uses the benefits simultaneously. This is determined based on the annual or monthly
fee under contract and the period for which the Company has provided services to subsidiaries, group
subsidiaries and associate company.
Dividend income
Dividends are received from investments in subsidiaries and associates. Dividends are recognised as dividend income
in profit or loss when the right to receive payment is established.
Dividend income for the year includes group contributions received from subsidiaries of the Company based on
Norwegian group contributions rules, which under IFRS are assessed by the Company to be treated similar to
dividends and are recognised in the period these are approved by the subsidiaries’ general meetings.
Employee benefits
The Company and its employees contribute to the Government Social Insurance Fund based on employees' salaries.
The Company's contributions are expensed as incurred and are included in staff costs. The Company has no legal or
constructive obligations to pay further contributions if the scheme does not hold sufficient assets to pay all
employees benefits relating to employee service in the current and prior periods.
Finance income
Interest income is recognised on a time-proportion basis using the effective interest rate method.
Finance costs
Interest expense and other borrowing costs are charged to profit or loss as incurred.
Foreign currency translation
(1) Functional and presentation currency
Items included in the Company's financial statements are measured using the currency of the primary
economic environment in which the entity operates ('the functional currency'). The financial statements are
presented in United States Dollars (USD 000), which is the Company's functional and presentation currency.
(2) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
Tax
Current tax liabilities and assets are measured at the amount expected to be paid to or recovered from the taxation
authorities, using the tax rates and laws that have been enacted, or substantively enacted, by the reporting date.
Leasing
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
7
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ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
4. Material accounting policies (continued)
Leasing (continued)
Company as lessee
The Company applies a single recognition and measurement approach for all leases, except for short term leases and
leases of low value assets. The Company recognises lease liabilities to make lease payments and right of use assets
representing the right to use the underlying assets.
The Company recognises right of use assets at the commencement date of the lease (i.e. the date the underlying
asset is available for use). Right of use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes
the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received.
Right of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets, in accordance with the depreciation accounting policy on property, plant and equipment.
The estimated useful lives of buildings is 33 years from the date of construction. The right of use assets are also
subject to impairment testing in the same manner as other non-financial assets.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of
lease payments to be made over the lease term i.e the non-cancellable period of the lease including reasonably
certain to exercise extension or termination options.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the in substance fixed lease payments or a change in the assessment to purchase the
underlying asset.
Short term leases and leases of low value assets
The Company applies the short-term lease recognition exemption (i.e. those leases that have a lease term of 12
months or less from the commencement date and do not contain a purchase option). It also applies the low value
lease recognition exemption in respect of miscellaneous assets. Lease payments on short term and low value leases
are recognised as expense on a straight-line basis over the lease term.
The Company does not act as a lessor in any transaction.
Financial instruments
(i) Financial assets
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
OCI and fair value through the income statement. The classification of financial assets at initial recognition depends
on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them.
With the exception of trade receivables that do not contain a significant financing component or for which the
Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not
contain a significant financing component are measured at the transaction price determined under IFRS 15.
8
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ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
4. Material accounting policies (continued)
Leasing (continued)
Company as lessee
The Company applies a single recognition and measurement approach for all leases, except for short term leases and
leases of low value assets. The Company recognises lease liabilities to make lease payments and right of use assets
representing the right to use the underlying assets.
The Company recognises right of use assets at the commencement date of the lease (i.e. the date the underlying
asset is available for use). Right of use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes
the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received.
Right of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets, in accordance with the depreciation accounting policy on property, plant and equipment.
The estimated useful lives of buildings is 33 years from the date of construction. The right of use assets are also
subject to impairment testing in the same manner as other non-financial assets.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of
lease payments to be made over the lease term i.e the non-cancellable period of the lease including reasonably
certain to exercise extension or termination options.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the in substance fixed lease payments or a change in the assessment to purchase the
underlying asset.
Short term leases and leases of low value assets
The Company applies the short-term lease recognition exemption (i.e. those leases that have a lease term of 12
months or less from the commencement date and do not contain a purchase option). It also applies the low value
lease recognition exemption in respect of miscellaneous assets. Lease payments on short term and low value leases
are recognised as expense on a straight-line basis over the lease term.
The Company does not act as a lessor in any transaction.
Financial instruments
(i) Financial assets
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
OCI and fair value through the income statement. The classification of financial assets at initial recognition depends
on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them.
With the exception of trade receivables that do not contain a significant financing component or for which the
Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not
contain a significant financing component are measured at the transaction price determined under IFRS 15.
8
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
4. Material accounting policies (continued)
Financial instruments (continued)
(i) Financial assets (continued)
Financial assets at amortised cost (debt instruments)
This category is most relevant to the Company. The Company measures financial assets at amortised cost if both of
the following conditions are met:
The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows.
And
The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at amortised cost are initially measured at fair value and are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when
the asset is derecognised, modified or impaired.
The Company’s financial assets at amortised cost includes trade and other receivables, cash at bank and loans
receivable.
Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results
from default events possible within the next 12 months or until contractual maturity, if shorter (''12 Months ECL''). If
the Company identifies a significant increase in credit risk (''SICR'') since initial recognition, the asset is transferred to
Stage 2 and its ECL is measured based on ECL on a lifetime basis, that is, up until contractual maturity but
considering expected prepayments, if any (''Lifetime ECL''). Refer to note 6, Credit risk section, for a description of
how the Company determines when a SICR has occurred. If the Company determines that a financial asset is credit
impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL. The Company's definition of
credit impaired assets and definition of default is explained in note 6, Credit risk section.
Additionally the Company has decided to use the low credit risk assessment exemption for investment grade financial
assets. Refer to note 6, Credit risk section for a description of how the Company determines low credit risk financial
assets.
Financial assets - Impairment - credit loss allowance for ECL
The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the
original effective interest rate.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible
within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The Company applies the simplified approach for trade and other receivables and general approach for bank deposits
in relation to the calculation of ECLs. In particular for trade and other receivables that are due within twelve months,
the 12 month ECLs are the same as the lifetime ECLs. By using the simplified approach, the Company does not track
changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. In
relation to trade and other receivables, in order to measure the expected credit losses, the Company measured the
historical loss rates based on the payment profiles of revenue, the historical loss rates are adjusted to reflect forward
looking factors specific to the receivables and the economic environment affecting the ability of the customers to
settle the receivables.
9
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ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
4. Material accounting policies (continued)
Financial instruments (continued)
(i) Financial assets (continued)
In relation to the loans due from related parties and amounts receivable from related parties, management has
completed some high level analysis, which considers both historical and forward looking qualitative and quantitative
information, to determine if a related party loan and balance is low credit risk at 31 December 2025. Management
has considered the financial performance and financial position as well as the remaining term of the loans, and
whether the related parties will have sufficient cash throughout that period to meet all of their working capital and
other obligations, including repayment of the related party balances. Management does not expect that there will be
adverse changes in economic and business conditions during that period. Consequently, management has
determined that the loans and amounts receivable from related parties, are low credit risk, falls within ‘stage 1’ of
IFRS 9’s impairment model, and 12 month expected credit losses can be calculated.
The Company considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Company may also consider a financial asset to be in default when internal or external information
indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash at bank but exclude any
restricted cash which is not available for use by the Company.
10
65
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
4. Material accounting policies (continued)
Financial instruments (continued)
(i) Financial assets (continued)
In relation to the loans due from related parties and amounts receivable from related parties, management has
completed some high level analysis, which considers both historical and forward looking qualitative and quantitative
information, to determine if a related party loan and balance is low credit risk at 31 December 2025. Management
has considered the financial performance and financial position as well as the remaining term of the loans, and
whether the related parties will have sufficient cash throughout that period to meet all of their working capital and
other obligations, including repayment of the related party balances. Management does not expect that there will be
adverse changes in economic and business conditions during that period. Consequently, management has
determined that the loans and amounts receivable from related parties, are low credit risk, falls within ‘stage 1’ of
IFRS 9’s impairment model, and 12 month expected credit losses can be calculated.
The Company considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Company may also consider a financial asset to be in default when internal or external information
indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash at bank but exclude any
restricted cash which is not available for use by the Company.
10
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
4. Material accounting policies (continued)
Financial instruments (continued)
(ii) Financial liabilities
The Company’s financial liabilities include trade and other payables and borrowings which are initially measured at
fair value and are subsequently measured at amortised cost.
Financial guarantee contracts
Financial guarantee contracts are contracts that require the Company to make specified payments to reimburse the
holder of the guarantee for a loss it incurs because a specified debtor fails to make payment when due in accordance
with the terms of debt instrument. Such financial guarantees are given to banks, financial institutions and others on
behalf of a counterparty to secure loans, overdrafts and other banking facilities.
Financial guarantees are recognised as a financial liability at the time the guarantee is issued.
Financial guarantees are initially recognised at their fair value, which is normally evidenced by the amount of fees
received. This amount is amortised on a straight line basis over the life of the guarantee in finance income in profit or
loss.
Financial guarantees are subsequently measured at the higher of (i) the amount determined in accordance with the
expected credit loss model under IFRS 9 ''Financial Instruments'', and (ii) the amount initially recognised less, where
appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15 ''Revenue
from Contracts with customers''.
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events,
it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the
amount can be made. Where the Company expects a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
Non-current liabilities
Non-current liabilities represent amounts that are due more than twelve months from the reporting date.
Climate-related matters
The Company considers climate-related matters in estimates and assumptions, mostly related to its investments in
subsidiaries and associates. Even though the Company believes its subsidiaries will not be significantly affected by the
transition to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions
underpinning their valuation. Even though climate-related risks might not currently have a significant impact on
measurement, the Company is closely monitoring any climate-related risks. Refer also to note 7.
Share capital
Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the
Company and the nominal value of the share capital being issued is taken to the share premium account.
Comparatives
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.
11
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ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
5. New accounting pronouncements
At the date of approval of these separate financial statements, standards and interpretations were issued by the
International Accounting Standards Board which were not yet effective. Some of them were adopted by the
European Union and others not yet. The Board of Directors expects that the adoption of these accounting standards
in future periods will not have a material effect on the separate financial statements of the Company, apart from
IFRS18 that its impact will be assessed upon becoming effective.
6. Financial risk management
Financial risk factors
The Company is exposed to credit risk, liquidity risk, currency risk and capital risk arising from the financial
instruments it holds. The risk management policies employed by the Company to manage these risks are discussed
below:
6.1 Credit risk
The Company is primarily exposed to credit risk related to receivables from related parties, loans receivable and cash
at bank. The maximum risk exposure is represented by the carrying value of receivables from related parties referred
to in note 17, loan receivable shown in note 16 and cash at bank in note 20.
The Company's revenues arise from a limited number of transactions and customers and therefore credit risk is
concentrated.
Management has assessed the collectability of receivables and do not expect losses other than the expected credit
allowance already provided in line with the accounting policy. In 2024 expected credit loss of USD 250 thousand was
provided for the loan receivable from the Company's associate. In 2025 expected credit loss estimated to USD 215
thousand. Refer also to note 16.
The Group does not hold any collateral as security for its receivables.
Cash and cash equivalents
The Company assesses, on an individual basis, its exposure to credit risk arising from cash at bank. This assessment
takes into account ratings from external credit rating institutions.
Bank balances held with banks with investment grade rating are considered as low credit risk.
The gross carrying amounts below represent the Company's maximum exposure to credit risk on these assets as at
31 December 2025 and 31 December 2024:
External credit rating
(Moody's) 2025 2024
USD 000 USD 000
Svenska Handelsbanken AB Aa 216 1,356
Bank of Cyprus Public Company Limited A 129
390
Total 345 1,746
The Company does not hold any collateral as security for any cash at bank balances.
There were no significant cash at bank balances written off during the year that are subject to enforcement activity.
Financial guarantees
Guarantees which represent irrevocable assurances that the Company will make payments in the event that a
counterparty cannot meet its obligations to third parties, carry the same credit risk as loans receivable.
12
67
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
5. New accounting pronouncements
At the date of approval of these separate financial statements, standards and interpretations were issued by the
International Accounting Standards Board which were not yet effective. Some of them were adopted by the
European Union and others not yet. The Board of Directors expects that the adoption of these accounting standards
in future periods will not have a material effect on the separate financial statements of the Company, apart from
IFRS18 that its impact will be assessed upon becoming effective.
6. Financial risk management
Financial risk factors
The Company is exposed to credit risk, liquidity risk, currency risk and capital risk arising from the financial
instruments it holds. The risk management policies employed by the Company to manage these risks are discussed
below:
6.1 Credit risk
The Company is primarily exposed to credit risk related to receivables from related parties, loans receivable and cash
at bank. The maximum risk exposure is represented by the carrying value of receivables from related parties referred
to in note 17, loan receivable shown in note 16 and cash at bank in note 20.
The Company's revenues arise from a limited number of transactions and customers and therefore credit risk is
concentrated.
Management has assessed the collectability of receivables and do not expect losses other than the expected credit
allowance already provided in line with the accounting policy. In 2024 expected credit loss of USD 250 thousand was
provided for the loan receivable from the Company's associate. In 2025 expected credit loss estimated to USD 215
thousand. Refer also to note 16.
The Group does not hold any collateral as security for its receivables.
Cash and cash equivalents
The Company assesses, on an individual basis, its exposure to credit risk arising from cash at bank. This assessment
takes into account ratings from external credit rating institutions.
Bank balances held with banks with investment grade rating are considered as low credit risk.
The gross carrying amounts below represent the Company's maximum exposure to credit risk on these assets as at
31 December 2025 and 31 December 2024:
External credit rating
(Moody's) 2025 2024
USD 000 USD 000
Svenska Handelsbanken AB Aa 216 1,356
Bank of Cyprus Public Company Limited A 129 390
Total 345 1,746
The Company does not hold any collateral as security for any cash at bank balances.
There were no significant cash at bank balances written off during the year that are subject to enforcement activity.
Financial guarantees
Guarantees which represent irrevocable assurances that the Company will make payments in the event that a
counterparty cannot meet its obligations to third parties, carry the same credit risk as loans receivable.
12
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
6. Financial risk management (continued)
6.1 Credit risk (continued)
Financial guarantees (continued)
At the reporting date, the Company acts as a guarantor to the loan of associate company Petrolia Noco AS. As at 31
December 2025, the outstanding loan balance subject to this guarantee totalled NOK 50 million and the loan was
properly served by Petrolia Noco AS with no defaults. A financial guarantee liability of USD 129 thousand is included
in trade and other payables in Note 22, which represents the guarantee fee charged less cumulative amortisation. No
expected credit losses have been recognised as of the reporting date in respect of these financial guarantees
provided by the Company, since it was assessed that the present value of related expected payments is immaterial.
Until the date of the approval of the financial statements, no claim has been raised for the loan guarantee and the
Board of Directors does not expect any claim in the future.
6.2 Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position
potentially enhances profitability, but can also increase the risk of losses. The Company has procedures with the
object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets.
The following tables detail the Company's remaining contractual maturity for its financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Company can be required to pay. The table includes both interest and principal cash flows.
31 December 2025 Carrying
amounts
Contractual
cash flows
Up to 12
months 1-2 years
USD 000 USD 000 USD 000 USD 000
Lease liabilities 73 75 75 -
Trade and other payables
112 112 112 -
Payables to related parties 226
226 226 -
411 413 413 -
31 December 2024 Carrying
amounts
Contractual
cash flows
Up to 12
months 1-2 years
USD 000 USD 000 USD 000 USD 000
Lease liabilities 127 134 67 67
Trade and other payables
170 170 170 -
Payables to related parties 1,741
1,741 1,741 -
2,038 2,045 1,978 67
Liquidity risk may also arise from the financial guarantee contracts provided by the Company to secure credit facilities
obtained by the associate of the Company, as further analysed in Credit risk (section 6.1) above.
6.3 Foreign Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange
rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated
in a currency that is not the Company's measurement currency. The Company is exposed to foreign exchange risk
arising from various currency exposures primarily with respect to the Norwegian Krone and the Euro. The Company's
Management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.
13
68
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
6. Financial risk management (continued)
6.3 Foreign Currency risk (continued)
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at
the reporting date are as follows:
Liabilities Assets
2025 2024 2025 2024
USD 000 USD 000 USD 000 USD 000
Norwegian Krone 496 1,998 5,161 6,709
Euro 165
239 132 186
661 2,237 5,293 6,895
The following table demonstrates the sensitivity to a reasonably possible change in Euro and Norwegian Krone
currency exchange rate, with all other variables held constant, of the Company's profit before tax and the Company's
equity:
2025 Change in
currency rate
Profit before
tax Equity
% USD 000 USD 000
Euro 5 (2) (2)
Euro (5) 2 2
Norwegian Krone 5 233 233
Norwegian Krone (5)
(233) (233)
2024 Change in
currency rate
Profit before
tax Equity
% USD 000 USD 000
Euro 5 (3) (3)
Euro (5) 3 3
Norwegian Krone 5 236 236
Norwegian Krone (5)
(236) (236)
6.4 Capital risk management
Capital includes equity shares and share premium.
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the
return to shareholders. The Company's overall strategy remains unchanged from last year.
7. Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting
estimates and requires Management to exercise its judgment in the process of applying the Company's accounting
policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on Management's best
knowledge of current events and actions, actual results may ultimately differ from those estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
14
69
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
6. Financial risk management (continued)
6.3 Foreign Currency risk (continued)
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at
the reporting date are as follows:
Liabilities Assets
2025 2024 2025 2024
USD 000 USD 000 USD 000 USD 000
Norwegian Krone 496 1,998 5,161 6,709
Euro 165 239 132 186
661 2,237 5,293 6,895
The following table demonstrates the sensitivity to a reasonably possible change in Euro and Norwegian Krone
currency exchange rate, with all other variables held constant, of the Company's profit before tax and the Company's
equity:
2025 Change in
currency rate
Profit before
tax Equity
% USD 000 USD 000
Euro 5 (2) (2)
Euro (5) 2 2
Norwegian Krone 5 233 233
Norwegian Krone (5) (233) (233)
2024 Change in
currency rate
Profit before
tax Equity
% USD 000 USD 000
Euro 5 (3) (3)
Euro (5) 3 3
Norwegian Krone 5 236 236
Norwegian Krone (5) (236) (236)
6.4 Capital risk management
Capital includes equity shares and share premium.
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the
return to shareholders. The Company's overall strategy remains unchanged from last year.
7. Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting
estimates and requires Management to exercise its judgment in the process of applying the Company's accounting
policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on Management's best
knowledge of current events and actions, actual results may ultimately differ from those estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
14
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
7. Critical accounting estimates and judgments (continued)
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are discussed below:
Impairment of investments in subsidiaries and associates
The Company evaluates the recoverability of investments in subsidiaries and associates whenever indicators
of impairment are present. Indicators of impairment include such items as declines in revenues, earnings or
cash flows or material adverse changes in the economic or political stability of a particular country, which
may indicate that the carrying amount of an asset is not recoverable. If facts and circumstances indicate that
investment in subsidiaries and associates may be impaired, the estimated future discounted cash flows
associated with these investments or the recoverable amount of their net assets would be compared to their
carrying amounts to determine if a write-down is necessary. The valuation may be impacted in several
different ways by transition risk in particular, such as climate-related risks and changes in demand for the
subsidiaries' and associates' products. The Company has concluded that no single climate-related
assumption is a key assumption for the 2025 impairment testing. Refer to additional disclosures in Notes 14
and 15.
Impairment of financial assets - allowance for credit losses on loan receivables and amounts
receivable from related parties
The loss allowances for financial assets are based on assumptions about risk of default and expected loss
rates. In relation to the loans and amounts due from related parties, in order to calculate the ECL, the
Company applied the 12 month ECL model and the general approach. In determining the recoverability of
the loans and amounts due from related parties, the Company considered the historic repayments made in
conjunction with the parties’ financial position at year end and their ability to make future repayments based
on their current and expected future trading activities.
8. Revenue from contracts with customers
The Company derives its revenue from contracts with customers for the transfer of services over time as follows:
Disaggregation of revenue 2025 2024
USD 000 USD 000
Management fees (Note 23.2) 122 118
Consultancy fees (Note 23.3) 49
44
171 162
15
70
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
9. Operating (loss)/profit
2025 2024
USD 000 USD 000
Operating (loss)/profit is stated after charging the following items:
Depreciation of right-of-use assets (Note 19) 65 65
Depreciation of property, plant and equipment (Note 13) 1 1
Directors' fees (Note 23.1) 410 99
Staff costs including Directors in their executive capacity (Note 10) 635 585
Auditors' remuneration - current year 253 187
Auditors' remuneration (branch) - current year 23 24
Auditors’ remuneration for tax services - current year 14 13
Auditors' remuneration - prior years out of pocket expenses 9
9
The auditors remuneration as presented in the table includes irrecoverable VAT. The total fees, including VAT,
charged by the statutory audit firm for the statutory audit of the Parent's separate and consolidated annual financial
statements for the year ended 31 December 2025 amounted to USD 252,847 / EUR 214,950. The total fees,
including VAT, charged by the statutory audit firm for the year ended 31 December 2025 for tax compliance and
advisory services amounted to USD 13,998 / EUR 11,900.
10. Staff costs
2025 2024
USD 000 USD 000
Directors' and key management remuneration (Note 23.1) 308 266
Wages 290 286
Social security costs 37
33
635 585
The average number of employees during the year was 5 (2024: 5).
11. Finance income/(costs)
2025 2024
USD 000 USD 000
Loan interest income (Note 16) 699 690
Net foreign exchange gain 796 -
Reversal of expected credit loss on loan receivable (Note 16) 35 -
Income from financial guarantees 74 76
Other interest income 38 42
Reversal of expected credit loss on related party receivables (Note 23.5) -
228
Finance income 1,642 1,036
Net foreign exchange losses - (884)
Interest expense on lease liabilities (Note 19) (4) (8)
Sundry finance expenses (5)
(3)
Finance costs (9) (895)
Net finance income
1,633
141
16
71
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
9. Operating (loss)/profit
2025 2024
USD 000 USD 000
Operating (loss)/profit is stated after charging the following items:
Depreciation of right-of-use assets (Note 19) 65 65
Depreciation of property, plant and equipment (Note 13) 1 1
Directors' fees (Note 23.1) 410 99
Staff costs including Directors in their executive capacity (Note 10) 635 585
Auditors' remuneration - current year 253 187
Auditors' remuneration (branch) - current year 23 24
Auditors’ remuneration for tax services - current year 14 13
Auditors' remuneration - prior years out of pocket expenses 9 9
The auditors remuneration as presented in the table includes irrecoverable VAT. The total fees, including VAT,
charged by the statutory audit firm for the statutory audit of the Parent's separate and consolidated annual financial
statements for the year ended 31 December 2025 amounted to USD 252,847 / EUR 214,950. The total fees,
including VAT, charged by the statutory audit firm for the year ended 31 December 2025 for tax compliance and
advisory services amounted to USD 13,998 / EUR 11,900.
10. Staff costs
2025 2024
USD 000 USD 000
Directors' and key management remuneration (Note 23.1) 308 266
Wages 290 286
Social security costs 37 33
635 585
The average number of employees during the year was 5 (2024: 5).
11. Finance income/(costs)
2025 2024
USD 000 USD 000
Loan interest income (Note 16) 699 690
Net foreign exchange gain 796 -
Reversal of expected credit loss on loan receivable (Note 16) 35 -
Income from financial guarantees 74 76
Other interest income 38 42
Reversal of expected credit loss on related party receivables (Note 23.5) - 228
Finance income 1,642 1,036
Net foreign exchange losses - (884)
Interest expense on lease liabilities (Note 19) (4) (8)
Sundry finance expenses (5) (3)
Finance costs (9) (895)
Net finance income
1,633 141
16
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
12. Tax
The income tax on the Company's profit before tax differs from theoretical amount that would arise using the
applicable tax rates as follows:
2025 2024
USD 000 USD 000
Profit before tax 3,565
6,363
Tax calculated at the applicable tax rates
446 795
Effect of different tax rates on foreign earnings 71 99
Tax effect of expenses not deductible for tax purposes
143 104
Tax effect of allowances and income not subject to tax
(655) (937)
Tax effect of carried forward losses
(69) (186)
Tax effect of tax loss for the year for which no deferred tax asset was recognised
64 125
Tax refund - -
The Company is resident in Cyprus for tax purposes.
The corporation tax rate is 12,5% (15% from 1 January 2026).
Under certain conditions interest income earned until 31 December 2025 may be subject to defence contribution at
the rate of 17%. In such cases this interest income will be exempt from corporation tax. From 1 January 2026,
interest income is only subject to corporation tax. Dividends received from abroad may be subject to defence
contribution at the rate of 5% (subject to certain conditions).
Dividends paid out of profits of profits for tax years up and including 2025, are subject to a withholding of special
contribution for defence at 17% for individual shareholders that are both Cyprus tax resident and Cyprus domiciled.
From 1 January 2026, dividends distributed from 2026 profits onwards are subject to withholding of special
contribution for defence at a rate of 5% and in certain cases at a rate of 10%/17%. Dividends to Cyprus tax resident
and Cyprus domiciled are also subject to a 2,65% contribution to the General Healthcare System.
Companies, which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the
Defence of the Republic Law, within two years after the end of the relevant tax year, will be deemed to have
distributed this amount as dividend on the 31 of December of the second year (applicable for profits up until tax year
2025 inclusive). The amount of the deemed dividend distribution is reduced by any actual dividend already
distributed by 31 December of the second year for the year the profits relate. The Company pays special defence
contribution on behalf of the shareholders over the amount of the deemed dividend distribution at a rate of 17%
(applicable since 2014) when the entitled shareholders are natural persons tax residents of Cyprus and have their
domicile in Cyprus. In addition, the Company pays on behalf of the shareholders General Healthcare System (GHS)
contribution at a rate of 2,65%, when the entitled shareholders are natural persons tax residents of Cyprus,
regardless of their domicile.
The Company’s Branch in Norway (the “Branch”) is subject to income tax at the rate of 22% (2024: 22%) on the tax
profits realized in Norway. The Branch under current legislation may carry forward the balance of tax losses
indefinitely in the future. The Company in Cyprus is subject to income tax at the rate of 12.5% (15% as from 1
January 2026) (2024: 12.5%) on the tax profits realized in Cyprus. The Company's tax losses in Cyprus amounts to
USD 535 thousand and can be carried forward for 5 years ( 7 years as from 1 January 2026). No deferred tax asset
has been recognised as it is not expected that future taxable profits will be available to be utilised.
17
72
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
13. Property, plant and equipment
Computer
hardware
USD 000
Cost
Balance at 1 January 2024 2
Balance at 31 December 2024/ 1 January 2025
2
Balance at 31 December 2025
2
Depreciation
Balance at 1 January 2024 -
Charge for the year 1
Balance at 31 December 2024/ 1 January 2025 1
Charge for the year 1
Balance at 31 December 2025
2
Net book amount
Balance at 31 December 2025
-
Balance at 31 December 2024
1
18
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
14. Investments in subsidiaries
2025 2024
USD 000 USD 000
Balance at 1 January 34,716 30,074
Reversal of impairment 4,534 4,642
Balance at 31 December 39,250 34,716
The details of the subsidiaries are as follows:
Name Country of
incorporation
Principal
activities
2025
Holding
%
2024
Holding
%
2025
USD
000
2024
USD
000
Petrolia AS (1) Norway Holding company
of IOT Group -
Energy service
100 100 37,607 33,568
Petrolia Tool Pool AS Norway Dormant 100 100 17 17
Independent Oil Tools International
(Cyprus) Ltd (2)
Cyprus Holding company 100 100 1,626 1,131
39,250 34,716
The Company performs an impairment assessment of its subsidiaries when there are indicators for impairment or
reversal of impairment in accordance with the relevant accounting standard.
(1) During 2025, a reversal of impairment of USD 4,039 thousand was recognized (2024: reversal of impairment USD
4,231 thousand). The accumulated impairment as at 31 December 2025 is USD 87,203 thousand (2024: USD 91,242
thousand). Petrolia AS is the holding company of the oil service sub-group, IOT Group.
As at 31 December 2025, and based on the economic performance of the oil service sub-group being consistently
profitable over the last few years, Management identified reversal of impairment indicators and calculated the
recoverable amount of the investment using the discounted cash flow model for a period of 5 years with an exit
price. The discounted cash flow calculations included the following main inputs and assumptions:
Capital expenditure: range of USD 2.7m - USD 3.9m (2024: range of USD 4.3m - USD 4.6m)
Forecasted EBITDA: range of USD 11.8m - USD 12.7m (2024: USD 13.7m - USD 14.9m)
Discount rate of 12.0% (2024: 11.3%)
Growth rate over 5 years of 0%-1.4% (2024: 2%)
Terminal growth rate of 2% (2024: 2%)
The following sensitivity analysis has been performed by management as at the year-end:
A decrease in projected EBITDA rates by 10%, with all other variables held constant, would result in a total of
USD 6,748 thousand impairment charge whereas an increase in projected EBITDA rates by 5% would result in a
total of USD 9,417 thousand reversal of impairment.
An increase in the discount rate by 1%, with all other variables held constant, would result in a total of USD
1,596 thousand reversal of impairment.
19
73
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
13. Property, plant and equipment
Computer
hardware
USD 000
Cost
Balance at 1 January 2024 2
Balance at 31 December 2024/ 1 January 2025 2
Balance at 31 December 2025
2
Depreciation
Balance at 1 January 2024 -
Charge for the year 1
Balance at 31 December 2024/ 1 January 2025 1
Charge for the year 1
Balance at 31 December 2025
2
Net book amount
Balance at 31 December 2025
-
Balance at 31 December 2024
1
18
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
14. Investments in subsidiaries
2025 2024
USD 000 USD 000
Balance at 1 January 34,716 30,074
Reversal of impairment 4,534
4,642
Balance at 31 December 39,250 34,716
The details of the subsidiaries are as follows:
Name Country of
incorporation
Principal
activities
2025
Holding
%
2024
Holding
%
2025
USD
000
2024
USD
000
Petrolia AS (1) Norway Holding company
of IOT Group -
Energy service
100 100 37,607 33,568
Petrolia Tool Pool AS Norway Dormant 100 100 17 17
Independent Oil Tools International
(Cyprus) Ltd (2)
Cyprus Holding company 100 100 1,626
1,131
39,250 34,716
The Company performs an impairment assessment of its subsidiaries when there are indicators for impairment or
reversal of impairment in accordance with the relevant accounting standard.
(1) During 2025, a reversal of impairment of USD 4,039 thousand was recognized (2024: reversal of impairment USD
4,231 thousand). The accumulated impairment as at 31 December 2025 is USD 87,203 thousand (2024: USD 91,242
thousand). Petrolia AS is the holding company of the oil service sub-group, IOT Group.
As at 31 December 2025, and based on the economic performance of the oil service sub-group being consistently
profitable over the last few years, Management identified reversal of impairment indicators and calculated the
recoverable amount of the investment using the discounted cash flow model for a period of 5 years with an exit
price. The discounted cash flow calculations included the following main inputs and assumptions:
Capital expenditure: range of USD 2.7m - USD 3.9m (2024: range of USD 4.3m - USD 4.6m)
Forecasted EBITDA: range of USD 11.8m - USD 12.7m (2024: USD 13.7m - USD 14.9m)
Discount rate of 12.0% (2024: 11.3%)
Growth rate over 5 years of 0%-1.4% (2024: 2%)
Terminal growth rate of 2% (2024: 2%)
The following sensitivity analysis has been performed by management as at the year-end:
A decrease in projected EBITDA rates by 10%, with all other variables held constant, would result in a total of
USD 6,748 thousand impairment charge whereas an increase in projected EBITDA rates by 5% would result in a
total of USD 9,417 thousand reversal of impairment.
An increase in the discount rate by 1%, with all other variables held constant, would result in a total of USD
1,596 thousand reversal of impairment.
19
74
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
14. Investments in subsidiaries (continued)
(2) As at 31 December 2025 a reversal of impairment of USD 495 thousand (2024: reversal of USD 411 thousand)
was recognised, after comparing the investment’s carrying amount with its recoverable amount. The reversal was
recognised as indications for a reversal of impairment existed, primarily due to the underlying sub-subsidiary being in
a net asset position as at 31 December 2025. Independent Oil Tools International (Cyprus) Ltd is a holding company,
and management has based its impairment assessment on the net assets of the investee which are considered to be
a close approximation of its fair value less cost to disposal. The accumulated impairment as at 31 December 2025 is
USD 11,973 thousand (2024: USD 12,468 thousand).
Total reversal of impairment for the year amounted to USD 4,534 thousand (2024: reversal of impairment USD 4,642
thousand). Total accumulated impairment as at 31 December 2025 amounted to USD 166,959 thousand (2024: USD
171,493 thousand).
15. Investment in associate
The details of the investment are as follows:
2025 2024
USD 000 USD 000
Balance at 1 January - -
Additions 920 -
Impairment charge (920)
-
Balance at 31 December - -
The details of the investment are as follows:
Name Country of
incorporation
Principal
activities
2025
Holding
%
2024
Holding
%
2025
USD 000
2024
USD 000
Petrolia Noco
AS
Norway Oil & Gas
exploration
14.75 10.61 -
-
During 2025, the investment in Petrolia Noco AS has increased its capital by the issuance of additional share capital.
The associate has completed a private placement issue where 20,000,000 shares have been issued at a price of NOK
1.00 per share. Petrolia SE, has participated directly in the purchase of additional 9,985,755 shares and increased its
direct shareholding from 10.61% to 14.75%. The Company exercises significant influence through participating in
the financial and operating policy decisions of the investee (Petrolia Noco AS) through its common director Sjur
Storaas who remain on the board of directors of both companies, the Parent (Petrolia SE) and associate (Petrolia
Noco AS).
By reference to the net assets of the associate and as a result of losses incurred by the associate during the year the
investment in associate was fully impaired. The accumulated impairment as at 31 December 2025 amounted to USD
26,578 thousand (2024: USD 25,658 thousand).
Through its subsidiaries the Company owns 49.9% (2024: 49.9%) of the shares of Petrolia NOCO AS and this
remained unchanged during the year.
20
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
16. Loan receivable from associate
2025 2024
USD 000 USD 000
Balance at 1 January 5,212 5,920
Principal repayments (921) -
Interest charged (Note 11) 699 690
Interest repayments for the year (693) (764)
Foreign exchange differences 617 (634)
Expected credit loss movement - reversal (Note 11) 35 -
Balance at 31 December 4,949 5,212
Less current portion (4,949) (5,212)
Non-current portion
- -
On 14 May 2020, Petrolia Noco AS (borrower) and Independent Oil & Resources Plc (lender and security agent) have
signed a loan agreement. According to the loan agreement, the borrower can enter into any additional loans with any
additional lender by entering into an accession letter, provided that 10 days prior notice is given to the lender and the
security agent. During 2021, Petrolia SE through its branch Petrolia NUF (additional lender) has provided a loan to
Petrolia Noco AS amounting to NOK 71,750,000 (USD 8,225,838). The loan balance as at 31 December 2025, after a
repayment of NOK 10,000,000 in March 2024 following the shares private placement by Petrolia Noco AS, was NOK
21,780,000. The loan bears an interest of 10% p.a and was repayable by 31 December 2025. The interest income for
the year related to this loan is NOK 2,356,082 (USD 234,180) (2024: NOK 3,178,000 (USD 293,992)).
On 22 December 2023, according to a signed loan addendum, Petrolia SE and Independent Oil & Resources Plc
mutually agree a new loan of NOK 75,000,000 (Petrolia SE to give NOK 30,000,000 and Independent Oil & Resources
Plc to give NOK 45,000,000) and to become joint and several guarantors to remaining lenders for an additional loan
amount of NOK 75.9 million. The loan balance as at 31 December 2025 was NOK 30,000,000. The additional loan
bears an interest of 13.2% p.a and was repayable by 31 December 2025. The interest income for the year related to
this loan is NOK 3,960,000 (USD 394,675) (2024: NOK 3,960,000 (USD 336,334)).
In 2025 the loans' repayment period for both loans have been renewed until 1 January 2027. Petrolia, after renewal,
remains the single guarantor to remaining lenders for a loan amount of NOK 50 million.
Within 2025, Petrolia SE through its branch Petrolia NUF (lender), according to a signed liquidity loan agreement,
provided short term liquidity loans of total NOK 25,500,000 to Petrolia Noco AS (borrower). All loans have been fully
repaid within 2025. The short term liquidity loans bear an interest of 13.2% p.a. The interest income for the year
related to these loans is NOK 706,567 (USD 70,078).
The loans are repayable as follows:
2025 2024
USD 000 USD 000
Within one year 4,949 5,212
4,949 5,212
Loans are denominated in NOK.
Refer also to Note 13 to the consolidated financial statements.
The exposure of the Company to credit risk in relation to loans receivable is reported in
note 6 of the separate
financial statements.
Management has assessed and calculated expected credit losses on the loans amounting to USD 215,000 as at 31
December 2025 (2024: USD 250,000) leading to an ECL reversal of USD 35,000 during the year (Note 11).
21
75
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
14. Investments in subsidiaries (continued)
(2) As at 31 December 2025 a reversal of impairment of USD 495 thousand (2024: reversal of USD 411 thousand)
was recognised, after comparing the investment’s carrying amount with its recoverable amount. The reversal was
recognised as indications for a reversal of impairment existed, primarily due to the underlying sub-subsidiary being in
a net asset position as at 31 December 2025. Independent Oil Tools International (Cyprus) Ltd is a holding company,
and management has based its impairment assessment on the net assets of the investee which are considered to be
a close approximation of its fair value less cost to disposal. The accumulated impairment as at 31 December 2025 is
USD 11,973 thousand (2024: USD 12,468 thousand).
Total reversal of impairment for the year amounted to USD 4,534 thousand (2024: reversal of impairment USD 4,642
thousand). Total accumulated impairment as at 31 December 2025 amounted to USD 166,959 thousand (2024: USD
171,493 thousand).
15. Investment in associate
The details of the investment are as follows:
2025 2024
USD 000 USD 000
Balance at 1 January - -
Additions 920 -
Impairment charge (920) -
Balance at 31 December - -
The details of the investment are as follows:
Name Country of
incorporation
Principal
activities
2025
Holding
%
2024
Holding
%
2025
USD 000
2024
USD 000
Petrolia Noco
AS
Norway Oil & Gas
exploration
14.75 10.61 - -
During 2025, the investment in Petrolia Noco AS has increased its capital by the issuance of additional share capital.
The associate has completed a private placement issue where 20,000,000 shares have been issued at a price of NOK
1.00 per share. Petrolia SE, has participated directly in the purchase of additional 9,985,755 shares and increased its
direct shareholding from 10.61% to 14.75%. The Company exercises significant influence through participating in
the financial and operating policy decisions of the investee (Petrolia Noco AS) through its common director Sjur
Storaas who remain on the board of directors of both companies, the Parent (Petrolia SE) and associate (Petrolia
Noco AS).
By reference to the net assets of the associate and as a result of losses incurred by the associate during the year the
investment in associate was fully impaired. The accumulated impairment as at 31 December 2025 amounted to USD
26,578 thousand (2024: USD 25,658 thousand).
Through its subsidiaries the Company owns 49.9% (2024: 49.9%) of the shares of Petrolia NOCO AS and this
remained unchanged during the year.
20
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
16. Loan receivable from associate
2025 2024
USD 000 USD 000
Balance at 1 January 5,212 5,920
Principal repayments (921) -
Interest charged (Note 11) 699 690
Interest repayments for the year (693) (764)
Foreign exchange differences 617 (634)
Expected credit loss movement - reversal (Note 11) 35
-
Balance at 31 December 4,949 5,212
Less current portion (4,949) (5,212)
Non-current portion
- -
On 14 May 2020, Petrolia Noco AS (borrower) and Independent Oil & Resources Plc (lender and security agent) have
signed a loan agreement. According to the loan agreement, the borrower can enter into any additional loans with any
additional lender by entering into an accession letter, provided that 10 days prior notice is given to the lender and the
security agent. During 2021, Petrolia SE through its branch Petrolia NUF (additional lender) has provided a loan to
Petrolia Noco AS amounting to NOK 71,750,000 (USD 8,225,838). The loan balance as at 31 December 2025, after a
repayment of NOK 10,000,000 in March 2024 following the shares private placement by Petrolia Noco AS, was NOK
21,780,000. The loan bears an interest of 10% p.a and was repayable by 31 December 2025. The interest income for
the year related to this loan is NOK 2,356,082 (USD 234,180) (2024: NOK 3,178,000 (USD 293,992)).
On 22 December 2023, according to a signed loan addendum, Petrolia SE and Independent Oil & Resources Plc
mutually agree a new loan of NOK 75,000,000 (Petrolia SE to give NOK 30,000,000 and Independent Oil & Resources
Plc to give NOK 45,000,000) and to become joint and several guarantors to remaining lenders for an additional loan
amount of NOK 75.9 million. The loan balance as at 31 December 2025 was NOK 30,000,000. The additional loan
bears an interest of 13.2% p.a and was repayable by 31 December 2025. The interest income for the year related to
this loan is NOK 3,960,000 (USD 394,675) (2024: NOK 3,960,000 (USD 336,334)).
In 2025 the loans' repayment period for both loans have been renewed until 1 January 2027. Petrolia, after renewal,
remains the single guarantor to remaining lenders for a loan amount of NOK 50 million.
Within 2025, Petrolia SE through its branch Petrolia NUF (lender), according to a signed liquidity loan agreement,
provided short term liquidity loans of total NOK 25,500,000 to Petrolia Noco AS (borrower). All loans have been fully
repaid within 2025. The short term liquidity loans bear an interest of 13.2% p.a. The interest income for the year
related to these loans is NOK 706,567 (USD 70,078).
The loans are repayable as follows:
2025 2024
USD 000 USD 000
Within one year 4,949
5,212
4,949 5,212
Loans are denominated in NOK.
Refer also to Note 13 to the consolidated financial statements.
The exposure of the Company to credit risk in relation to loans receivable is reported in
note 6 of the separate
financial statements.
Management has assessed and calculated expected credit losses on the loans amounting to USD 215,000 as at 31
December 2025 (2024: USD 250,000) leading to an ECL reversal of USD 35,000 during the year (Note 11).
21
76
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
17. Trade and other receivables
2025 2024
USD 000 USD 000
Receivables from related parties (Note 23.5) 4 705
Deposits and prepayments 23 13
VAT refundable 1
4
28 722
The fair values of trade and other receivables due within one year approximate to their carrying amounts as
presented above.
The exposure of the Company to credit risk and impairment losses in relation to trade and other receivables is
reported in note 6 of the separate financial statements.
18. Restricted cash
2025 2024
USD 000 USD 000
Bank deposits 30 28
Less non-current portion - -
Current portion 30 28
Restricted cash is kept by the Norwegian branch in relation to employee tax.
19. Leases
The Company has an office rental agreement with a contractual lease term until 31 December 2023, with options to
extend. During the year 2023, the Company has assessed that it was reasonably certain that the extension option will
be exercised for three more years until 31 December 2026. Management exercises judgement in determining
whether it is reasonably certain to continue to use the premises for additional periods after 31 December 2026.
Management has assessed that the extension for additional optional periods is not reasonably certain and therefore
these optional periods were not taken into account in the lease calculations. The incremental borrowing rate used in
the calculation was 4.8%. The addition of one more year in the lease calculations will result in an increase in Right of
use asset and lease liability by USD 79 thousand whereas the addition of two years will result in an increase of USD
140 thousand.
Set out below are the carrying amounts of right of use assets recognised and the movements during the year:
Right of Use Asset:
2025 2024
USD 000 USD 000
Balance at 1 January 129 194
Depreciation charge for the year (Note 9) (65)
(65)
Balance at 31 December 64 129
Set out below are the carrying amounts of lease liabilities and the movements during the year:
22
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
19. Leases (continued)
Lease liability
2025 2024
USD 000 USD 000
Balance at 1 January 127 194
Repayments (70) (71)
Interest expense (Note 11) 4 8
Exchange differences 12 (4)
Balance at 31 December 73 127
Less current portion (73) (62)
Non-current portion - 65
20. Cash at bank
Cash balances are analysed as follows:
2025 2024
USD 000 USD 000
Cash at bank 345 1,746
345 1,746
Cash and cash equivalents by currency:
2025 2024
USD 000 USD 000
Norwegian Krone 182 1,324
US Dollars 40 236
Euro 123 186
345 1,746
The exposure of the Company to credit risk and impairment losses in relation to cash and cash equivalents is
reported in note 6 of the separate financial statements.
21. Share capital
2025 2025 2024 2024
Number of
shares USD 000
Number of
shares USD 000
Authorised
Ordinary shares of USD 0.1 each 272,358,670 27,236 272,358,670 27,236
Issued and fully paid
Balance at 1 January 59,133,786 5,913 59,133,786 5,913
Balance at 31 December 2025 59,133,786 5,913 59,133,786 5,913
Refer also to Note 17 to the consolidated financial statements.
23
77
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
17. Trade and other receivables
2025 2024
USD 000 USD 000
Receivables from related parties (Note 23.5) 4 705
Deposits and prepayments 23 13
VAT refundable 1 4
28 722
The fair values of trade and other receivables due within one year approximate to their carrying amounts as
presented above.
The exposure of the Company to credit risk and impairment losses in relation to trade and other receivables is
reported in note 6 of the separate financial statements.
18. Restricted cash
2025 2024
USD 000 USD 000
Bank deposits 30 28
Less non-current portion - -
Current portion 30 28
Restricted cash is kept by the Norwegian branch in relation to employee tax.
19. Leases
The Company has an office rental agreement with a contractual lease term until 31 December 2023, with options to
extend. During the year 2023, the Company has assessed that it was reasonably certain that the extension option will
be exercised for three more years until 31 December 2026. Management exercises judgement in determining
whether it is reasonably certain to continue to use the premises for additional periods after 31 December 2026.
Management has assessed that the extension for additional optional periods is not reasonably certain and therefore
these optional periods were not taken into account in the lease calculations. The incremental borrowing rate used in
the calculation was 4.8%. The addition of one more year in the lease calculations will result in an increase in Right of
use asset and lease liability by USD 79 thousand whereas the addition of two years will result in an increase of USD
140 thousand.
Set out below are the carrying amounts of right of use assets recognised and the movements during the year:
Right of Use Asset:
2025 2024
USD 000 USD 000
Balance at 1 January 129 194
Depreciation charge for the year (Note 9) (65) (65)
Balance at 31 December 64 129
Set out below are the carrying amounts of lease liabilities and the movements during the year:
22
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
19. Leases (continued)
Lease liability
2025 2024
USD 000 USD 000
Balance at 1 January 127 194
Repayments (70) (71)
Interest expense (Note 11) 4 8
Exchange differences 12
(4)
Balance at 31 December 73 127
Less current portion (73) (62)
Non-current portion - 65
20. Cash at bank
Cash balances are analysed as follows:
2025 2024
USD 000 USD 000
Cash at bank 345
1,746
345 1,746
Cash and cash equivalents by currency:
2025 2024
USD 000 USD 000
Norwegian Krone 182 1,324
US Dollars 40 236
Euro 123
186
345 1,746
The exposure of the Company to credit risk and impairment losses in relation to cash and cash equivalents is
reported in note 6 of the separate financial statements.
21. Share capital
2025 2025 2024 2024
Number of
shares USD 000
Number of
shares USD 000
Authorised
Ordinary shares of USD 0.1 each 272,358,670
27,236 272,358,670 27,236
Issued and fully paid
Balance at 1 January 59,133,786
5,913 59,133,786 5,913
Balance at 31 December 2025 59,133,786 5,913 59,133,786 5,913
Refer also to Note 17 to the consolidated financial statements.
23
78
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
22. Trade and other payables
2025 2024
USD 000 USD 000
Trade payables
19 96
Social insurance and other taxes 93 74
Shareholders' current accounts - credit balances (Note 23.8) - 2
Financial guarantee 129 14
Accruals 214 155
Payables to own subsidiaries (Note 23.6) - 12
Payables to related parties (Note 23.6) 226
1,727
681 2,080
On 19 December 2024 Petrolia Noco AS has paid to Petrolia SE the guarantee fee of NOK 162,500 (USD 14,561)
which was fully amortised in 2025. On 15 December 2025, based on an addendum signed, Petrolia Noco AS has paid
to Petrolia SE the guarantee fee of NOK 1,300,000 (USD 129,301). The amount at year end represents the guarantee
fee charged less cumulative amortisation for the year. During the year 2025, income from financial guarantee was
recognised in the income statement amounting to USD 73,811 (2024: USD 75,673) (Note 11).
The fair values of trade and other payables due within one year approximate to their carrying amounts as presented
above.
23. Related party transactions and balances
The Company is controlled by Berge Gerdt Larsen and his son. For more details refer to Note 17 of the consolidated
financial statements.
The following transactions were carried out with related parties:
23.1 Directors' and key management personnel remuneration
The remuneration of Directors was as follows:
2025 2024
USD 000 USD 000
Directors' fees (Note 9) 410 99
Directors' and key management personnel remuneration (Note 10) 308
266
718 365
24
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
23. Related party transactions and balances (continued)
23.1 Directors' and key management personnel remuneration (continued)
2025 2024
USD 000 USD 000
Director's fees
George Hadjineophytou - Board member, Audit & Remuneration committees (re-
elected on 29 May 2025) 53 52
Sjur Storaas - Board member, Audit & Remuneration committees (re-elected on 29
May 2025) 47 47
Berge Gerdt Larsen - Board Chair (re-elected on 29 May 2025) 310 -
410
99
Directors' and key management personnel remuneration
Polycarpos Protopapas (27 November 2019), Managing Director, Cyprus 59 57
Solve Nilsen (1 October 2010), General manager of the Branch, Norway 221 187
Marios Tornaritis (1 December 2023), Finance manager, Cyprus 28 22
308
266
Total Directors' and key management personnel remuneration 718 365
23.2 Management fees charged to related parties (Note 8)
2025 2024
Nature of transactions
USD 000 USD 000
Subsidiaries and sub-subsidiaries
Trade
122 118
122 118
23.3 Consultancy fees charged to related parties (Note 8)
2025 2024
Name
Nature of transactions
USD 000 USD 000
Petrolia Noco AS
Trade
49 44
49 44
23.4 Dividend income
2025 2024
USD 000 USD 000
Independent Oil Tools International (Cyprus) Ltd - 300
Venture Drilling AS - 2,359
Petrolia Tool Pool AS -
197
- 2,856
23.5 Receivables from related parties (Note 17)
2025 2024
Name
USD 000 USD 000
Petrolia AS - 705
Independent Oil Tools International (Cyprus) Ltd 4
-
4 705
The receivables from related parties are interest free, and have no specified repayment date.
The accumulated ECL provisions were made in accordance with the relevant accounting policy. The accumulated ECL
as at 31 December 2025 amounted to USD nil (2024: USD nil).
25
79
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
22. Trade and other payables
2025 2024
USD 000 USD 000
Trade payables
19 96
Social insurance and other taxes 93 74
Shareholders' current accounts - credit balances (Note 23.8) - 2
Financial guarantee 129 14
Accruals 214 155
Payables to own subsidiaries (Note 23.6) - 12
Payables to related parties (Note 23.6) 226 1,727
681 2,080
On 19 December 2024 Petrolia Noco AS has paid to Petrolia SE the guarantee fee of NOK 162,500 (USD 14,561)
which was fully amortised in 2025. On 15 December 2025, based on an addendum signed, Petrolia Noco AS has paid
to Petrolia SE the guarantee fee of NOK 1,300,000 (USD 129,301). The amount at year end represents the guarantee
fee charged less cumulative amortisation for the year. During the year 2025, income from financial guarantee was
recognised in the income statement amounting to USD 73,811 (2024: USD 75,673) (Note 11).
The fair values of trade and other payables due within one year approximate to their carrying amounts as presented
above.
23. Related party transactions and balances
The Company is controlled by Berge Gerdt Larsen and his son. For more details refer to Note 17 of the consolidated
financial statements.
The following transactions were carried out with related parties:
23.1 Directors' and key management personnel remuneration
The remuneration of Directors was as follows:
2025 2024
USD 000 USD 000
Directors' fees (Note 9) 410 99
Directors' and key management personnel remuneration (Note 10) 308 266
718 365
24
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
23. Related party transactions and balances (continued)
23.1 Directors' and key management personnel remuneration (continued)
2025 2024
USD 000 USD 000
Director's fees
George Hadjineophytou - Board member, Audit & Remuneration committees (re-
elected on 29 May 2025) 53 52
Sjur Storaas - Board member, Audit & Remuneration committees (re-elected on 29
May 2025) 47 47
Berge Gerdt Larsen - Board Chair (re-elected on 29 May 2025) 310 -
410
99
Directors' and key management personnel remuneration
Polycarpos Protopapas (27 November 2019), Managing Director, Cyprus 59 57
Solve Nilsen (1 October 2010), General manager of the Branch, Norway 221 187
Marios Tornaritis (1 December 2023), Finance manager, Cyprus 28 22
308
266
Total Directors' and key management personnel remuneration 718 365
23.2 Management fees charged to related parties (Note 8)
2025 2024
Nature of transactions
USD 000 USD 000
Subsidiaries and sub-subsidiaries
Trade
122 118
122 118
23.3 Consultancy fees charged to related parties (Note 8)
2025 2024
Name
Nature of transactions
USD 000 USD 000
Petrolia Noco AS
Trade
49 44
49 44
23.4 Dividend income
2025 2024
USD 000 USD 000
Independent Oil Tools International (Cyprus) Ltd - 300
Venture Drilling AS - 2,359
Petrolia Tool Pool AS -
197
- 2,856
23.5 Receivables from related parties (Note 17)
2025 2024
Name
USD 000 USD 000
Petrolia AS - 705
Independent Oil Tools International (Cyprus) Ltd 4
-
4 705
The receivables from related parties are interest free, and have no specified repayment date.
The accumulated ECL provisions were made in accordance with the relevant accounting policy. The accumulated ECL
as at 31 December 2025 amounted to USD nil (2024: USD nil).
25
80
ANNUAL REPORT 2025 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
23. Related party transactions and balances (continued)
Movement of Accumulated expected credit losses
2025 2024
USD 000 USD 000
Balance at 1 January/31 December - 797
Reversal of impairment for the year (Note 11) - (228)
Write off -
(569)
Balance at 31 December - -
23.6 Payables to own subsidiaries and related parties (Note 22)
2025 2024
Name
Nature of transactions
USD 000 USD 000
Independent Oil Tools International (Cyprus)
Ltd
Finance
- 12
Venture Drilling Limited Finance 226
1,727
226 1,739
The payables to related parties are provided interest free, and have no specified repayment date.
23.7 Loans receivable from associate (Note 16)
2025 2024
USD 000 USD 000
Petrolia Noco AS 4,949
5,212
4,949 5,212
For further information refer to Note 16.
23.8 Shareholders' current accounts - credit balances (Note 22)
2025 2024
USD 000 USD 000
Berge Gerdt Larsen -
2
- 2
The shareholders' current accounts are interest free, and have no specified repayment date.
24. Contingent liabilities
The Company had no contingent liabilities as at 31 December 2025 and 31 December 2024 other than financial
guarantees disclosed in Note 22.
25. Commitments
The Company had no capital or other commitments as at 31 December 2025 and 31 December 2024.
26. Operating Enviroment
In relation to the Operating Environment of the Company and the Group, refer to the disclosures in Note 27 of the
Company's consolidated financial statements.
26
81
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE
NOTES TO THE SEPARATE FINANCIAL STATEMENTS
31 December 2025
27. Events after the reporting period
Geopolitical situation in the Middle East
As explained in Note 28 of the Company's consolidated financial statements the geopolitical situation in Middle East
intensified on 28 February 2026 due to the armed conflict. As of the date of authorisation of the financial statements,
the conflict continues to evolve as military activity persists.
There are events that are indicative of conditions that arose after the reporting period. Therefore, these are
considered as a non-adjusting event and thus are not reflected in the recognition and measurement of the assets and
liabilities in the financial statements as at 31 December 2025.
Depending on the duration of the conflict, and continued negative impact on economic activity, the Company might
experience negative results and incur impairments on its assets in the future, which relate to new developments that
occurred after the reporting period. The exact impact on the Company’s activities in 2026 and thereafter cannot be
predicted.
The impact of events after the reporting date on the going concern assessment of the Group are described in Note 2
and 27 of the consolidated financial statements.
Cyprus Tax Reform
On 31 December 2025, Cyprus enacted significant tax reform measures aimed at stimulating economic growth and
enhancing tax compliance, with most changes effective from 1 January 2026. The tax reform includes amendments
to six tax laws, namely the Income Tax law, the Special Contribution for Defence law, the Capital Gains Tax law, the
Assessment and Collection of Taxes law, the Collection of Taxes law and the Stamp Duty law. Amongst the changes
is the increase in the corporate income tax rate from 12,5% to 15%.
There were no other material events after the reporting period, which have a bearing on the understanding of the
financial statements.
27
82
ANNUAL REPORT 2025 PETROLIA SE
AUDITOR'S
REPORT
83
ANNUAL REPORT 2025 PETROLIA SE
REPORT
Ernst & Young Cyprus Ltd is a member firm of Ernst & Young Global Ltd.
Ernst & Young Cyprus Ltd is a limited liability company incorporated in Cyprus with registration number HE 222520. A list of the directors’ names is available at the company’s
registered office, 10 Esperidon Street, 1087 Nicosia, Cyprus.
Offices: Nicosia, Limassol.
Ernst & Young Cyprus Ltd
Ernst & Young House
27 Spyrou Kyprianou
4001 Mesa Geitonia
P.O. Box
50123
3601 Limassol, Cyprus
Tel: + 357 25209999
Fax: +
357 25209998
ey.com
Independent Auditor's Report
To the Members of Petrolia SE
Report on the Audit of the Consolidated and Separate Financial Statements
Opinion
We have audited the consolidated financial statements of Petrolia SE and its subsidiaries (the ''Group''), and the
separate financial statements of Petrolia SE (the ''Company''), which are presented in pages 12 to 81 and comprise
the consolidated statement of financial position and the separate statement of financial position of the Company as at
31 December 2025, and the consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows and the separate statements
of profit or loss and other comprehensive income, changes in equity and cash flows of the Company for the year then
ended, and notes to the consolidated and separate financial statements, including material accounting policy
information.
In our opinion, the accompanying consolidated and separate financial statements give a true and fair view of the
financial position of the Group and the Company as at 31 December 2025, and of their financial performance and their
cash flows for the year then ended in accordance IFRS Accounting Standards as adopted by the European Union and
the requirements of the Cyprus Companies Law, Cap. 113.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the
Auditor’s Responsibilities for the Audit of the Consolidated and Separate
Financial Statements
section of our report. We are independent of the Group and the Company in accordance with the
International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code)
as applicable to audits of consolidated and separate
financial statements of public interest entities, together with the ethical requirements that are relevant to audits of the
consolidated and separate financial statements of public interest entities in Cyprus. We have also fulfilled our other
ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters incorporating the most significant risks of material misstatements, including assessed
risk of material misstatements due to fraud
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated and separate financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. For the matters below, our description of how our audit
addressed the matters is provided in that context.
We have fulfilled the responsibilities described in the
Auditor’s Responsibilities for the Audit of the Consolidated and
Separate Financial Statements
section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material misstatement
of the consolidated and separate financial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated
and separate financial statements.
AUDITORS REPORT
84
ANNUAL REPORT 2025 PETROLIA SE
Recoverability of investment in Petrolia AS, Impairment of property, plant and equipment and right of
use assets, and Recoverability of trade receivables
Recoverability of investment in Petrolia AS (Separate Financial Statements only)
The key audit matter
Investment in Petrolia AS with a carrying amount of USD 37,607 thousand as at 31 December 2025 represents 84%
of the Company’s total assets and 96% of the Company’s investments in subsidiaries. An analysis of the investments
in subsidiaries is presented in Note 14 of the Company’s separate financial statements.
Petrolia AS is the holding company of the energy service sub-group. Based on the economic performance of the energy
service sub-group, management identified reversal of impairment indicators and proceeded to estimate the recoverable
amount of the investment using discounted cash flow model. As a result of the exercise performed, a reversal of
impairment of USD 4,039 thousand was recognized for the investment in Petrolia AS during the year 31 December
2025. Management's assessment of the recoverable amount of the investment in Petrolia AS requires estimation and
judgement around key assumptions used. Changes to key assumptions could lead to material changes in the estimated
recoverable amount of the investment, thus impacting the amount of the reversal of impairment recognized and/or
leading to additional impairment.
Due to the significant balance of the investment in Petrolia AS and the estimation uncertainty involved in the
assessment of its recoverable amount, we have considered this area as a key audit matter.
How the matter was addressed in our audit
In this area, amongst others, we considered management's identification of indicators of impairment or reversal of
impairment. We also assessed the methodology used by management to estimate the recoverable amount of the
investment in Petrolia AS and considered its compliance with relevant IFRS Accounting Standards. We analyzed the
key assumptions used in management's estimate of the recoverable amount of investment in subsidiary, such as its
profitability and financial position, its estimated future cash flows and the discount rate used, and concluded on their
reasonability. In doing so, we also involved our internal valuation specialists for the review of the methodology applied
and assessing the appropriateness of discount rate and growth rates used. We also performed sensitivity analysis by
stressing the key assumptions used in management’s discounted cash flow model and we checked the mathematical
accuracy of the relevant calculations. We finally assessed the adequacy of the relevant disclosures in the separate
financial statements.
Impairment of property, plant and equipment and right of use assets (Consolidated Financial
Statements only)
The key audit matter
Property, plant and equipment with a total carrying amount of USD 18,591 thousand and right of use assets with a
total carrying amount of USD 14,977 thousand (Note 11) as at 31 December 2025 represent a total of 43% of the
Group’s total assets.
As at 31 December 2025, the Group assessed whether indications of impairment existed considering internal and
external factors. Impairment triggers were identified for property, plant and equipment and right of use assets owned
by its subsidiary Independent Oil Tools Iraq for General Trading Co. Ltd. For these reasons, the Group subjected the
property, plant and equipment and right of use assets of this component to an impairment test in line with the
requirements of IAS 36 “Impairment of Assets”. As a result of this impairment testing, no additional impairment charge
was recognized for the year ended 31 December 2025 as the recoverable amount estimated was higher than the
carrying amount of these assets as at 31 December 2025. The recoverable amount was estimated based on value in
use, which was calculated using a discounted cash flow model based on latest forecasts and projected cash flows
using a discounting rate of 22%.
No impairment indications were identified for property, plant and equipment and right of use assets of other locations.
AUDITORS REPORT
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ANNUAL REPORT 2025 PETROLIA SE
Impairment of property, plant and equipment and right of use assets (Consolidated Financial
Statements only) (continued)
We have considered this area as a key audit matter, due to the size of the property, plant and equipment and right of
use assets on the Group’s consolidated statement of financial position and the estimation uncertainty, complexity and
subjectivity involved during the recoverable amount estimation process. The Group discloses details on the impairment
testing in Note 11 to the consolidated financial statements.
How the matter was addressed in our audit
In this area, amongst others, we considered management's identification of indicators of impairment. We also assessed
the methodology used by management to estimate the recoverable amount of property, plant and equipment and
right of use assets and considered its compliance with relevant IFRS Accounting Standards. Our audit procedures also
included an assessment of the key assumptions and methodology used in the impairment testing of property, plant
and equipment and right of use assets of the Group’s subsidiary Independent Oil Tools Iraq for General Trading Co.
Ltd, focusing our assessment on the principal assumptions used, such as the discount rate, the expected trend in
turnover, operating expenses and capital expenditure, and comparing them to historical data and internal budgets. In
doing so, we have also involved our internal valuation specialists for the review of the discount rate used. In addition,
we have tested the mathematical accuracy of the relevant impairment calculations. Finally, we assessed the adequacy
of the relevant disclosures in the consolidated financial statements.
Recoverability of trade receivables (Consolidated Financial Statements only)
The key audit matter
Trade receivables with a carrying amount of USD 16,947 thousand as at 31 December 2025 represent 22% of the
Group’s total assets as at 31 December 2025, and, on that date, the accumulated allowance for expected credit losses
(“ECLs”) amounted to USD 2,569 thousand (Note 14). The collectability of trade receivables is a key element of the
Group’s working capital management, which is managed on an ongoing basis by both Group and local management
of each component.
The determination as to whether a trade receivable is collectible involves management’s judgement. Key judgements
and estimates in respect of the timing and measurement of ECLs include:
- The use of a general ECL provision matrix to calculate ECLs, determining the provision rates based on trade
receivables ageing analysis and adjusting historical loss rates with forward-looking information, if necessary.
- The use by management of this information to determine whether any additional loss allowance for ECL is
required for individual trade receivables in respect of the biggest customers with significant long outstanding
balances.
We have considered this area as a key audit matter because it requires significant management judgement and due
to the size of the amounts involved. The Group’s accounting policy for provisions for ECLs of trade receivables is
described in Note 2.3 and relevant disclosures are provided in Notes 3 and 14 to the consolidated financial statements.
How the matter was addressed in our audit
In this area, amongst others, we performed an assessment of the key assumptions used to calculate trade receivables
ECLs, notably through analyzing the provision matrix used for the collective assessment and the customer balances
determined to be assessed individually, as well as evaluating the reasonability of ECL rates and loss patterns used.
We have also tested the mathematical accuracy of management’s calculations of ECLs. In our trade receivables ECLs
evaluation, we have also considered the results from our other audit procedures such as the testing of samples of
sales transactions to supporting documentation, obtaining trade receivable confirmations, and performing subsequent
receipts testing of bank payments by customers. Furthermore, we assessed the adequacy of the relevant disclosures
in the consolidated financial statements.
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ANNUAL REPORT 2025 PETROLIA SE
Reporting on Other Information
The Board of Directors is responsible for the other information. The other information comprises the information
included in the Management Report, the Board of Directors’ report on Corporate Social Responsibility and the Board
of Directors’ report on Corporate Governance, but does not include the consolidated and separate financial statements
and our auditor’s report thereon.
Our opinion on the consolidated and separate financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially inconsistent
with the consolidated and separate financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. 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.
Responsibilities of the Board of Directors and Those Charged with Governance for the Consolidated
and Separate Financial Statements
The Board of Directors is responsible for the preparation of consolidated and separate financial statements that give
a true and fair view in accordance with
IFRS Accounting Standards
as adopted by the European Union and the
requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors
determines is necessary to enable the preparation of consolidated and separate financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated and separate financial statements, the Board of Directors is responsible for assessing
the
Group’s and the
Company's ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate
the Group and the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s
and the Company’s
financial reporting
process.
Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate 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. Re
asonable assurance is a high level of assurance but
is not a guarantee that an audit conducted
in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, in
dividually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated and separate financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and app
ropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Group’s and the Company’s internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Board of Directors.
AUDITORS REPORT
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ANNUAL REPORT 2025 PETROLIA SE
Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements
(continued)
- Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group's and the Company’s
ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the consolidated and separate financial statements
or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor's report. However, future events or conditions may cause the Group and the
Company to cease
to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated and separate financial
statements, including the disclosures, and whether the consolidated and separate financial statements
represent the underlying transactions and events in a manner that achieves a true and fair view.
-
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business within the Group as a basis for forming an opinion on the consolidated
financial statements. We are responsible
for the direction, supervision and review of the audit work performed
for the purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied
.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated and separate financial statements of the current period and are therefore
the key audit matters.
Report on Other Legal and Regulatory Requirements
Requirements of Article 10(2) of the EU Regulation 537/2014
1.
Appointment of the Auditor and Period of Engagement
We were first appointed as auditors of the
Company and the
Group on 30 November 2012 by the Board of Directors.
Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted
engagement appointment of
14 years. In 2018, the Company conducted a tendering process,
and we were
recommended for re
-appointment.
2.
Consistency of the Additional Report to the Audit Committee
We confirm that our audit opinion on the consolidated and separate financial statements expressed in this report is
consistent with the additional report to the Audit Committee of the Company, which we issued on 2
3 April 2026
in
accordance with Article 11 of the EU Regulation 537/2014.
3.
Provision of Non-audit Services
We declare that no prohibited non
-audit services referred to in Article 5 of the EU Regulation 537/2014 and Section
72 of the Auditors Law of 2017 were provided. In addition, there are no non
-audit services which were provided by
us to the Group and
the Company which have not been disclosed in the consolidated and separate financial
statements or the
Management Report.
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ANNUAL REPORT 2025 PETROLIA SE
European Single Electronic Format
We have examined the digital files of the European Single Electronic Format (ESEF) of Petrolia SE for the year ended
31 December 2025 comprising the XHTML file which includes the consolidated and separate financial statements for
the year then ended and XBRL files with the marking up carried out by the entity of the consolidated statement of
financial position as at 31 December 2025, and the consolidated income statement, consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for
the year then ended, and all disclosures made in the consolidated financial statements or made by cross-reference
therein to other parts of the annual financial report for the year ended 31 December 2025 that correspond to the
elements of Annex II of the EU Delegated Regulation 2019/815 of 17 December 2018 of the European Commission,
as amended from time to time (the “ESEF Regulation”) (the “digital files”).
The Board of Directors of Petrolia SE is responsible for preparing and submitting the consolidated and separate
financial statements for the year ended 31 December 2025 in accordance with the requirements set out in the ESEF
Regulation.
Our responsibility is to examine the digital files prepared by the Board of Directors of Petrolia SE. According to the
Audit Guidelines issued by the Institute of Certified Public Accountants of Cyprus (the “Audit Guidelines”), we are
required to plan and perform our audit procedures in order to examine whether the content of the consolidated and
separate financial statements included in the digital files corresponds to the consolidated and separate financial
statements we have audited, and whether the format and marking up included in the digital files have been prepared
in all material respects, in accordance with the requirements of the ESEF Regulation.
In our opinion, the digital files examined correspond to the consolidated and separate financial statements, the
consolidated financial statements included in the digital files
, are presented and marked-up, in all material respects,
in accordance with the requirements of the ESEF Regulation, and the separate financial statements included in the
digital file, are presented in all material respects, in accordance with the requirements of the ESEF Regulation.
Other Legal Requirements
Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:
- In our opinion, based on the work undertaken in the course of our audit, the Management Report has been
prepared in accordance with the requirements of the Cyprus Companies Law, Cap. 113, and the information
given is consistent with the consolidated and separate financial statements.
- In light of the knowledge and understanding of the Group and the Company and their environment obtained
in the course of the audit, we are required to report if we have identified material misstatements in the
Management Report. We have nothing to report in this respect.
- In our opinion, based on the work undertaken in the course of our audit, the information included in the
corporate governance statement in accordance with the requirements of subparagraphs (iv) and (v) of
paragraph 2(a) of Article 151 of the Cyprus Companies Law, Cap. 113, and which is included as a specific
section of the Management Report, has been prepared in accordance with the requirements of the Cyprus
Companies Law, Cap, 113, and is consistent with the consolidated and separate financial statements.
- In our opinion, based on the work undertaken in the course of our audit, the corporate governance statement
includes all information referred to in subparagraphs (i), (ii), (iii), (vi) and (vii) of paragraph 2(a) of Article
151 of the Cyprus Companies Law, Cap. 113.
- In light of the knowledge and understanding of the Group and the Company and their environment obtained
in the course of the audit, we are required to report if we have identified material misstatements in the
corporate governance statement in relation to the information disclosed for items (iv) and (v) of subparagraph
2(a) of Article 151 of the Cyprus Companies Law, Cap. 113. We have nothing to report in this respect.
AUDITORS REPORT
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ANNUAL REPORT 2025 PETROLIA SE
Other Matter
This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance
with Article 10(1) of the EU Regulation 537/2014 and Section 69 of the Auditors Law of 2017 and for no other purpose.
We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to
whose knowledge this report may come to.
The engagement partner on the audit resulting in this independent auditor’s report is Andreas Avraam.
Andreas Avraam
Certified Public Accountant and Registered Auditor
for and on behalf of
Ernst & Young Cyprus Limited
Certified Public Accountants and Registered Auditors
Limassol, 27 April 2026
ANNUAL REPORT 2025 PETROLIA SE
90
CORPORATE
GOVER
NANCE
91
ANNUAL REPORT 2025 PETROLIA SE
THE BOARD OF DIRECTORS' REPORT
ON CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
The Corporate Governance Policy of Petrolia
SE (“Petrolia” or “the Company”) addresses
the responsibility and interaction between
shareholders, the General Assembly, the
Board of Directors (“the Board”) and the
executive management. The purpose of this
document is to outline the current status
of Petrolia’s Corporate Governance Policy.
As Petrolia is listed on the EURONEXT Oslo
Stock Exchange, it follows the Norwegian
Code of Practice for Corporate Governance
of 28 August 2025 (the “Code of Practice”).
Adherence to the Code of Practice is based
on a “comply or explain” principle, whereby
companies will be expected to either comply
with the Code of Practice or explain why
they have chosen an alternative approach.
The Code of Practice is published on www.
nues.no/English.
Below is an account outlining how Petrolia
has implemented the Code of Practice. This
account follows the same structure as the
Code of Practice and covers all sections
thereof. Petrolia complies with the Code of
Practice. Any deviations from the Code of
Practice are discussed under the relevant
sections. In addition to the Code of Practice,
the Norwegian Accounting Act § 3-3 stipu-
lates that companies must provide a report
on their policies and practices for corporate
governance either in the annual report or in
a document referred to in the annual report.
This report is integrated in this Corporate
Governance statement.
The holding company Petrolia SE is domiciled
in Cyprus and adheres to Cypriot law, con-
sequently various associated policies can be
subject to updates and revisions. Any updates
and changes in the Company’s Corporate
Governance Policy will be published on www.
petrolia.eu.
1. IMPLEMENTATION AND REPORTING ON
CORPORATE GOVERNANCE
Petrolia believes that maintaining solid stand-
ards of Corporate Governance will improve the
quality of discussions and work to be carried
out by the corporate bodies. Sound Corporate
Governance practice will strengthen confi
-
dence in the Company among shareholders,
the capital market and other interested par-
ties and thus contribute to value creation for
the shareholders over time.
2. BUSINESS GOALS AND STRATEGY
Petrolia’s business scope is clearly defined
in the Company’s Articles of Association,
as follows: “The purpose of the Company
is to conduct business within the areas of
petroleum, shipping, offshore, transport,
trade, industry and finance and other related
areas and also participate as shareholder or
otherwise in other businesses”.
As of April 2026, the Company is described
as follows in Stock Exchange Notices: Petrolia
SE has two business segments: Energy di-
vision and Energy Service division and is
listed on EURONEXT Oslo Stock Exchange
under the ticker code PSE. The activity in-
cludes investments in Petrolia NOCO AS, an
independent oil & gas company approved as
a licensee and pre-qualified as an operator
on the Norwegian Continental Shelf, and a
group of leading rental equipment companies
for the global oil industry.
The Company’s core objective is to secure
a competitive return on the invested capital
of the shareholders in the longer term. In
accordance with this purpose, the Board of
Directors and management shall actively de-
velop and control the Company and its assets.
Petrolia is under several obligations provided
for in the relevant Cypriot and Norwegian
laws and the laws of other jurisdictions in
respect of the business operations carried
out by the Company and its subsidiaries. The
Board of Directors has formulated a Code
of Ethics, implemented across the Company,
based on corporate values and corporate
social responsibility principles. The Code of
Ethics summarises the Company’s values and
standards of behaviour in, among others,
human rights, safety, security and the working
environment. In addition, the Company has
implemented a strict policy regarding Health,
Safety, Security and Environment (HSSE).
3. EQUITY AND DIVIDENDS
Petrolia shall have a capital structure at a
level appropriate to the Company’s objective,
strategy and risk profile. Dividend payments
will depend on Petrolia’s earnings, financial
situation and cash flow. The possibility of
further value creation through investments
will also be taken into account.
The Company’s key targets for 2025 were to
improve the Company’s financial position, to
improve the profitability of the Energy Service
division following the improved market and
to develop Petrolia NOCO AS. Dividends to
shareholders may be given on an ad hoc basis.
Authorisations granted to the Board of
Directors to increase Petrolia’s share cap-
ital or to purchase its own shares shall, as
a general rule be restricted to defined pur-
poses. At each Annual General Meeting, the
shareholders shall have the opportunity to
evaluate and consider the authorisations
granted by the Board. Thus, the authorisa-
tions should be limited in time to no later than
the date of the next Annual General Meeting.
All authorisations not in compliance with
these guidelines should be accounted for in
the Annual Report.
As of 31 December 2025, the Company had
equity of USD 50 million, representing an
equity ratio of 65 per cent.
4. EQUAL TREATMENT OF SHAREHOLDERS
AND TRANSACTIONS WITH CLOSELY
RELATED PARTIES
Petrolia has one class of shares and all shares
are equal in all respects. Each share in the
Company carries one vote. All shares are
freely transferable. No shareholder shall be
treated unequally unless it is in the Company’s
and the shareholders’ common interests.
Any decision to waive the pre-emption rights
of existing shareholders to subscribe for
shares in the event of an increase in Petrolia’s
share capital must be justified, and an ex-
planation shall be appended to the agenda
for the General Meeting.
Any transactions carried out by Petrolia in
its own shares shall be made either through
the stock exchange or, if carried out in any
other way, at prevailing stock exchange prices.
If there is limited liquidity in the Company’s
shares, the Company should consider other
ways to ensure equal treatment of all
shareholders.
At the Annual General Meeting on 29 May
2025 the Board of Directors was granted
authorisations relating to acquiring its own
shares and issuing up to 13,250,000 new
shares (22.4%) waiving pre-emptive rights.
The details of the authorisations are provided
in the minutes to the Annual General Meeting,
published 29 May 2025 on the Company’s
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ANNUAL REPORT 2025 PETROLIA SE
CORPORATE GOVERNANCE
website www.petrolia.eu.
5. FREELY NEGOTIABLE SHARES
The shares are listed on the EURONEXT Oslo
Stock Exchange and are freely transfera-
ble. No form of restriction on negotiability
is included in the Articles of Association of
Petrolia.
6. GENERAL MEETING
Through the General Meeting the share-
holders exercise the highest authority in
Petrolia. General Meetings are convened by
written notice to all shareholders with known
addresses and a minimum of 21 days’ notice.
All shareholders are entitled to submit items
to the agenda, meet, speak and vote at the
General Meetings as is normally outlined in
the summons to the General Meeting and as
required by law.
Summons to general meetings, including
supporting documentation on relevant items
on the agenda, are made available on the
Company’s website no later than 21 days
prior to the General Meeting. The Company’s
Articles of Association stipulate that docu-
ments pertaining to matters to be deliberated
by the General Meeting shall only be made
available on the Company’s website, and not
normally be sent physically by post to the
shareholders unless required by law. In order
to ensure that the General Meeting is an ef-
fective forum for the views of the shareholders
and the Board of Directors, the Board shall
ensure that the information distributed is
sufficiently detailed and comprehensive as
to allow the shareholders to form a view on
all matters to be considered.
The Board of Directors shall take steps to
ensure that as many shareholders as possible
can exercise their rights by participating in
General Meetings in Petrolia, for instance
by setting deadlines for shareholders to give
notice of their intention to attend the meeting
(if any) as close to the date of the meeting
as possible and by giving shareholders who
are not able to attend the option to vote by
proxy. To the extent practicable, the Board
of Directors shall make arrangements for
shareholders voting by proxy to give voting
instructions on each matter to be considered
at the meeting.
As it is a priority for the General Meeting
to be conducted in a sound manner, with all
shareholder votes to be cast, to the extent
possible, on the basis of the same informa-
tion, the Company has thus far not deemed
it advisable to recommend the introduction
of electronic attendance. The Company will
contemplate the introduction of such arrange-
ments on an on-going basis in view of, inter
alia, the security and ease of use offered by
available systems.
The General Meetings shall be organised
in such a way as to facilitate dialogue be-
tween shareholders and the officers of the
Company. Thus, the Board of Directors must
ensure that the members of the Board and
the chairperson of the nomination commit-
tee are present at all General Meetings. In
addition, the Board of Directors shall make
arrangements to ensure an independent
Chair for each General Meeting, for instance
by arranging for the person who opens the
General Meeting to put forward a specific
proposal for a Chair.
The Minutes of the General Meetings will be
made available as soon as practicable on the
announcement system of the EURONEXT Oslo
Stock Ex-change, www.newsweb.no (ticker:
PSE), and on Petrolia’s own web site, www.
petrolia.eu.
7. NOMINATION COMMITTEE
The Company has established a Nomination
Committee in accordance with its Articles of
Association. The Committee consists of three
members elected by the General Meeting and
is independent of the Board of Directors and
the executive management.
As of 29 May 2025, the Nomination Committee
comprises of Rob Arnott, Tove Kate Larsen
and Andros Constantinou.
The composition of the Nomination Committee
is intended to reflect the interests of the
Company’s shareholders. All members are
considered independent of the Board of
Directors and executive management, with
the remuneration of its members being set
by the General Meeting. The Committee’s
mandate and procedures are governed by
Terms of Reference adopted by the General
Meeting.
The Nomination Committee is responsible for:
• Proposing candidates for election to the
Board of Directors;
• Proposing remuneration for members of
the Board of Directors;
In performing its duties, the Nomination
Committee conducts an annual assessment
of the Board’s composition, taking into account
the Company’s strategy, required competen-
cies, capacity, independence and diversity. The
Committee engages in dialogue with the Chair
of the Board, individual Board members and
relevant shareholders as part of this process.
The Nomination Committee will apply the
Company’s Diversity, Equity and Inclusion
Policy, which was recently approved by the
Board, and seeks to ensure that the Board
reflects a balanced composition with regard
to experience, expertise, gender and back
-
ground, wherever possible. The Nomination
Committee will be carrying out a detailed
analysis of the skills and experience of each
director, in line with the aforementioned policy.
Shareholders are encouraged to submit pro-
posals for Board candidates to the Nomination
Committee. Such proposals may be submitted
email to post(@)petrolia.eu within a reason-
able deadline prior to the Annual General
Meeting.
8. BOARD OF DIRECTORS: COMPOSITION
AND INDEPENDENCE
The Articles of Association stipulate that the
Board of Directors shall consist of three to
five directors elected by the General Meeting.
According to the Articles of Association, the
Board of Directors is appointed for one year
by the General Meeting.
The Board of Directors comprised four direc-
tors as at 31 December 2025. The current
composition of the Board of Directors is de-
scribed in note 6 in the Annual Report. The
Board shall attend to the common interests of
all shareholders, and its members shall meet
the Company’s need for expertise, capacity
and diversity. Attention should be paid to the
fact that the Board of Directors can function
effectively as a collegiate body. The Board shall
consist of individuals who are willing and able
to work as a team. Each member shall have
sufficient time available to devote to his or
her appointment as a director.
The Board of Directors has prepared a
Diversity, Equity and Inclusion Policy with
the purpose to set out the approach to di-
versity on the Board of Directors and Senior
Management, which was approved during
2026. The Board will consider all aspects on
93
ANNUAL REPORT 2025 PETROLIA SE
CORPORATE GOVERNANCE
diversity when reviewing the composition and
balance of the Board and when conducting
the annual Board effectiveness review.
The composition of the Board of Directors
shall ensure that it can operate independent-
ly of any special interests. Two of the four
members of the Board are independent of the
Company’s executive management, material
business contacts and main shareholder(s).
The two independent members are George
Hadjineophytou and Sjur Storaas. Polycarpos
Protopapas is the Managing Director of the
Company.
The Petrolia Group cannot, without the ap-
proval of the Board of Directors of Petrolia,
buy consultancy services from a board
member or from companies in which any board
member is an owner, employee or otherwise
has an interest.
Six board meetings were held during 2025,
with a complete attendance among the board
members.
All the directors are encouraged to hold
shares in Petrolia, however not to an extent
that can encourage a short-term approach
that is not in the best interest of Petrolia and
its shareholders. The shareholdings of the
directors as at 31 December 2025 are set
out in Note 17 to the consolidated financial
statements.
9. THE WORK OF THE BOARD OF DIRECTORS
The proceedings and responsibilities of the
Board of Directors are set out in written
guidelines adopted by the Board. The Board
of Directors has overall responsibility for
supervising the executive management. The
main responsibilities of the Board of Directors
are to:
• Lead Petrolia’s strategic planning and
make decisions that form the basis for exec-
utive management to prepare and implement
investments and structural measures. The
Company’s strategy is reviewed on a regular
basis;
• Ensure that all instructions given by the
Board of Directors are complied with;
• Ensure that the Board of Directors is kept
adequately informed of the Company’s and
the Group’s financial position
• Ensure the adequacy of the Company’s
executive management and establish clear
instructions defining responsibilities and
duties, including the relationship between
executive management and the Board
• Determine and review the Company’s div-
idend policy
• Conduct an annual evaluation of its work,
performance, composition and expertise, as
well as that of the Managing Director (the
“MD”). The results of the evaluation are made
available to the Nomination Committee. The
evaluation for 2025 was initiated but will be
finalised in 2026
• Ensure that the Company has sound
systems for risk management and internal
control, and that these systems are appropri-
ate to the scope and nature of the Company’s
activities. This includes ensuring that the
Group’s activities are conducted in accord-
ance with applicable laws and regulations, the
Company’s Articles of Association, corporate
values, ethical guidelines, and authorisations
granted by the General Meeting. The internal
control arrangements include the organisation
and implementation of the Company’s financial
reporting processes.
The Board meets regularly and maintains
close dialogue with executive management
regarding the Company’s development and
performance.
The Chair of the Board of Directors has par-
ticular responsibility for ensuring that the
Board performs its duties effectively and is
properly organised. The Board elects a Deputy
Chair to act in the absence of the Chair or
in situations where the Chair is conflicted.
There is a clear division of responsibilities
between the Board of Directors and the
Managing Director. The Board is responsible
for overall direction and supervision, while
the Managing Director is responsible for the
day-to-day management of the Company in
accordance with instructions set by the Board.
The Board of Directors has established
an Audit Committee and a Remuneration
Committee. The committees are composed of
members of the Board and assist in preparing
matters for Board consideration. The com-
mittees report regularly to the Board, which
retains overall responsibility for decisions.
The Audit Committee, composed of Sjur
Storaas and George Hadjineophytou, assists
the Board in overseeing the financial report-
ing process, monitoring internal controls and
risk management systems, and maintaining
communication with the Company’s external
auditor. The Committee also assesses the
auditor’s independence, including the extent
to which non-audit services may impact such
independence. The Audit Committee held reg-
ular meetings in 2025 and in 2026 (up to 27
April 2026) and reviewed all interim reports
prior to publication.
The Remuneration Committee is composed
of Sjur Storaas, Berge Gerdt Larsen and
George Hadjineophytou and assists the Board
in matters relating to remuneration policies
and practices.
The Managing Director is responsible for
the day-to-day management of the Company
and for ensuring that the Company’s ac-
counts are prepared in accordance with
applicable legislation and that the Company’s
assets are managed in a prudent manner.
The Managing Director is appointed by the
Board of Directors and reports to the Board.
His or her powers and responsibilities are
defined by instructions adopted by the Board.
The Board places emphasis on identifying
and managing conflicts of interest. Board
members and executive management are
required to promptly notify the Board of any
material direct or indirect interest in transac-
tions involving the Company and shall abstain
from participating in discussions or decisions
where such conflicts exist.
In the event of material transactions between
the Company and its shareholders, directors,
members of executive management or their
close associates, the Board shall ensure
that an independent valuation is obtained.
The same applies to transactions within the
Group where minority shareholders are in-
volved. All such transactions are disclosed in
the Annual Report, with disclosure of related
party transactions provided in Note 24 to the
Annual Report.
10. RISK MANAGEMENT AND INTERNAL
CONTROL
Risk management is primarily handled locally
in each Group company in accordance with
applicable rules and regulations. Internal
control in the Group is performed through
Group companies reporting to Petrolia on
operational and financial risk factors re-
lated to accounting, operations and HSE.
Key figures and information are reported
on a monthly basis, enabling the Board to
monitor the situation on a continuous basis
throughout the year.
94
ANNUAL REPORT 2025 PETROLIA SE
CORPORATE GOVERNANCE
The most important risk factors applicable
to the Group are thoroughly considered in
connection with yearly budgeting. The Audit
Committee reviews interim reports from the
Group companies and reports to the Board.
The annual accounts for all Group companies
are audited by the Group’s external auditor.
The Company’s risk management systems are
described in Note 23 of this Annual Report.
11. REMUNERATION OF THE BOARD OF
DIRECTORS
The remuneration awarded to the members of
the Board of Directors is determined annually
by the General Meeting, based on the Board’s
responsibility, expertise, time commitment
and the complexity of the operations of the
Group. The Nomination Committee will pro-
pose the remuneration for approval by the
General Meeting.
The remuneration is not linked to the Group’s
performance. No directors have been granted
or will be granted share options, and no di-
rectors participate in the incentive programs
available for the executive management and/
or other employees.
More detailed information about the reward
of individual directors in 2025 is provided in
Note 6 to the consolidated financial state-
ments for the Group.
No members of the Board of Directors (or
companies with which they are associated)
shall take on specific assignments for the
Group, in addition to their appointment as
director unless instructed by the Board. If
such assignments are taken on, they shall be
disclosed to the full Board, and the remuner-
ation shall be approved by the Board. Further,
all remuneration paid to each of the directors
shall be described in the Annual Report. Such
description shall include details of all elements
of the remuneration and benefits of each
member of the Board and any remuneration
paid in addition to normal director’s fees.
Details regarding Polycarpos Protopapas’
remuneration are disclosed in Note 6 to the
consolidated financial statements.
12. REMUNERATION OF EXECUTIVE
MANAGEMENT
The Managing Director’s remuneration shall
be determined by a convened meeting of the
Board of Directors and the Board has adopt-
ed guidelines for the reward of executive
management.
Remuneration for the other members of the
executive management is determined by the
Managing Director and Chair of the Board
in accordance with guidelines provided by
the Board of Directors. The guidelines are
annually communicated to the General Meeting
and included in the Annual Report together
with detailed information on all elements of
the remuneration. The General Meeting shall
be informed of any changes made during
the last year.
The Company has no bonus schemes or in-
centives in place. As of 31 December 2025,
executive management held common shares
in the Company following the rights issue
offered to key employees and the Board of
Directors on 2 September 2011, in addition
to shares and options bought in the market.
Details regarding management remuneration
can be found in Note 6 to the consolidated
financial statements.
13. INFORMATION AND COMMUNICATION
Petrolia will ensure that the shareholders
receive accurate, clear, relevant and timely
information related to all matters of signif-
icance to shareholders. All information is
published in a way ensuring simultaneous
and equal access for all equity shareholders:
• Each year, Petrolia publishes a Financial
Calendar detailing key events.
• Information to shareholders is distributed
through stock exchange notices and/or on
www.petrolia.eu. To the extent required by
law, information is also sent by regular post
to shareholders.
• All information is available in English, and,
when required, Norwegian.
The Board of Directors has adopted guidelines
for the Company’s reporting of financial and
other information that is based on open-
ness, equal treatment of all shareholders
and participants in the securities market,
and restrictions imposed by law. The guide-
lines also include instructions on the internal
treatment of market sensitive information
and insider trading instructions and for the
Company’s contact with shareholders other
than through General Meetings.
To increase the share liquidity, the Company
aims to increase the investor activities going
forward, in addition to attending industry
conferences.
14. TAKE-OVERS
The Company’s objective is to create share-
holder value and the Board of Directors
and the executive management will not seek
to hinder or obstruct takeover bids for the
Company’s shares or activities unless there
are good reasons for this. In the event of any
possible takeover or restructuring situation,
the Board of Directors will take particular
care to protect shareholder value and the
common interests of all shareholders. The
Board of Directors will not exercise man-
dates or pass any resolutions to obstruct the
takeover bid unless approved by the General
Meeting following announcement of the bid. In
a takeover situation, the Board of Directors
will issue a recommendation to the share-
holders and arrange a valuation from an
independent expert.
Any transaction, which is in fact a disposal of
the Company’s activities, should be decided
by a General Meeting.
15. AUDITORS
Petrolia’s auditor is Ernst & Young Cyprus
Limited.
The auditor is elected by the General Meeting
and shall report to the General Meeting.
Excessive non-auditing work assigned to
the auditor may jeopardise his position and
diminish the public confidence in the auditor’s
integrity and independence from Petrolia.
The primary task of the auditor shall be to
perform the audit work required by law and
professional standards with the care, com-
petence and integrity prescribed by law or
said standards. The auditor will submit the
main features of the plan for the audit to the
Board of Directors annually. Further, the
Board of Directors will receive an annual
written confirmation from the auditor that the
requirements of independence and objectivity
have been met. The auditor shall also at least
once a year present to the Board of Directors
a review of the Company’s internal control
procedures, including identified weaknesses
and proposals for improvement.
95
ANNUAL REPORT 2025 PETROLIA SE
The auditor will participate in any meetings
of the Board of Directors that deal with the
Annual Accounts. At these meetings, the au-
ditor shall review material changes in the
Company’s accounting principles, comment on
any material estimated accounting figures and
report all material matters on which there has
been disagreement between the auditor and
the executive management of the Company.
At least once a year, the Board of Directors
shall have a meeting with the auditor in which
no member of the Executive Management
is present. The Audit Committee will adopt
guidelines in respect of the use of the auditor
by the Company’s Executive Management for
services other than audit. Each year, the au-
ditor shall provide the Board with a summary
of all services in addition to audit work which
have been undertaken for the Company.
The Board of Directors must report the re-
muneration paid to the auditor at the Annual
General Meeting, including details of the fee
paid for audit work and any fees paid for
other specific assignments.
CORPORATE GOVERNANCE
96
ANNUAL REPORT 2025 PETROLIA SE
PETROLIA SE - ANNUAL REPORT 2025
Tel: +357 25 725 777 Fax: +357 25 356 500 E-mail: post(@)petrolia.eu
PETROLIA SE: 205 Christodoulou Chatzipavlou Street, Loulloupis Court, 4th floor, office 401, 3036 Limassol, CYPRUS
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