Uk Oil & Gas Share Price (UKOG)

Share Name Share Symbol Market Type Share ISIN Share Description
Uk Oil & Gas Plc LSE:UKOG London Ordinary Share GB00B9MRZS43 ORD 0.01P
  Price Change % Change Share Price Shares Traded Last Trade
  -0.025 -3.23% 0.75 27,797,282 16:35:03
Bid Price Offer Price High Price Low Price Open Price
0.75 0.80 0.80 0.775 0.775
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Oil & Gas Producers 0.21 -2.27 -0.08 52
Last Trade Time Trade Type Trade Size Trade Price Currency
16:44:07 O 1,500,000 0.775 GBX
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Bp (BP.), Royal Dutch Shell (RDSA), Spitfire Oil (SRO), Nautilus Marine Services (NAUT)

Uk Oil & Gas (UKOG) Latest News

Uk Oil & Gas News

Date Time Source Headline
13/1/202016:18ALNCUK Oil & Gas Issues GBP250,000 In Shares Via Partial Loan Conversion
13/1/202015:27ALNCFAlliance News Flash Headline
13/1/202015:25UKREGUK Oil & Gas PLC Loan Balance Reduction
07/1/202011:09UKREGUK Oil & Gas PLC Holding(s) in Company
02/1/202015:55UKREGUK Oil & Gas PLC Issue of Shares
30/12/201913:01ALNCUK Oil & Gas Issues GBP150,000 In Shares Via Partial Loan Conversion
30/12/201912:47UKREGUK Oil & Gas PLC Loan Balance Reduction
23/12/201910:56ALNCUK Oil & Gas Completes First Phase Open Hole EWT Test At Horse Hill-2z
23/12/201907:00UKREGUK Oil & Gas PLC HH-1 and HH-2z Extended Well Test Update
02/12/201914:43ALNCUK Oil & Gas Raises GBP2.0 Million Via Placing For Horse Hill Works
More Uk Oil & Gas News
Uk Oil & Gas Takeover Rumours

Uk Oil & Gas (UKOG) Discussions and Chat

Uk Oil & Gas Forums and Chat

Date Time Title Posts
19/1/202017:02UKOG strikes oil 2016135,573
19/1/202008:52UK OIL & GAS 2018 - "The Gatwick Gusher"11,198
16/1/202017:46Grotto 4 - The Birth of the Franchise764
15/1/202023:14whats happening?90
13/1/202009:32UKOG - Oil Heading for $9 - $10 per Barrel According to BNP Paribas 86

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DateSubject
19/1/2020
08:20		Uk Oil & Gas Daily Update: Uk Oil & Gas Plc is listed in the Oil & Gas Producers sector of the London Stock Exchange with ticker UKOG. The last closing price for Uk Oil & Gas was 0.78p.
Uk Oil & Gas Plc has a 4 week average price of 0.73p and a 12 week average price of 0.73p.
The 1 year high share price is 1.90p while the 1 year low share price is currently 0.73p.
There are currently 6,973,683,381 shares in issue and the average daily traded volume is 32,338,616 shares. The market capitalisation of Uk Oil & Gas Plc is £52,302,625.36.
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21/12/2019
14:57		hans christian andersen: Well F my old boots! 3 reasons why I’d buy the UKOG share price for 2020 HTTps://www.fool.co.uk/investing/2019/12/21/3-reasons-why-id-buy-the-ukog-share-price-for-2020/ What do you get if you cross Santa with a duck? A Christmas quacker
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01/12/2019
20:03		atino: (Snippet 🙇) The Share price The UKOG share price remains stuck in the 1-1.1p range as YA continues to sell the stock and investors, for now, are staying away. The RNS confirms that Preliminary HH-2z electric log analysis suggests the horizontal trajectory has penetrated good to excellent reservoir quality and high oil saturations throughout the 35 ft thick sweet-spot zone. The drilling fluid density required whilst drilling the horizontal is also strongly indicative that HH-2z has penetrated an area of the Portland oil pool with significantly lower pressure depletion than expected, a positive indication for possible larger connected oil volumes than previously recognised. All looks good. UKOG just need some buying interest. I see nothing negative in this RNS despite the gloomsters. https://contrarianinvestor.net/posts/category/AIM+oil+and+gas
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06/11/2019
13:59		atino: (Quote 🙇) Here’s what I’d do about the UKOG share price right now | Rupert Hargreaves | Wednesday, 6th November, 2019 Here’s what I’d do about the UKOG share price right now The last time I covered UKOG (LSE: UKOG), I concluded that shares in the oil minnow might be an attractive investment if the company manages to execute its drilling and production plans without any setbacks over the next six-to-12 months. That was at the beginning of October. Since then, the firm has continued to push ahead with its drilling and testing schedule. The company is currently concentrating on developing its Horse Hill-2z (HH-2z) Portland horizontal well. This is designed to tap into the Portland reservoir’s most oil-productive zone, or “sweet spot“, which was defined by the HH-2 pilot well’s successful coring and electric logging programmes. These operations were completed in the middle of October, and management is hoping to get the HH-2z well into production by year-end. Risky business Drilling for oil is a risky business, and there’s never any guarantee everything will go to plan. However, UKOG’s operations at HH-2z are making progress. We should find out in the next week or two if the company has successfully managed to complete drilling at the prospect. The next stage will be the clean-up and flow testing. As I noted last time I covered the business, the results from HH-2z could be make-or-break for UKOG. Management claims this new prospect could be “capable of delivering flow rates significantly higher” than the HH-1 vertical Portland discovery well, which has been recorded as being able to produce just over 300 barrels of oil per day. As my Foolish colleague Alan Oscroft recently noted, on October 9 the company reported production from the Horse Hill-1 test well had reached 41,800 barrels although, as he went on to add, this figure “tells us nothing whatsoever about any prospective daily production rate.” However, what does tell us is that UKOG is now producing oil and, perhaps more importantly, producing revenues. What’s next? So what does this all mean for investors? Well, the next few months are going to be critical for the UKOG share price. If the company does have success at its HH-2z well, then there’s a genuine chance this business could become a fully operational oil producer in 2020. On the other hand, if the new prospect fails to live up to expectations, then there will be more delays, costs, and dilution for shareholders ahead. With this being the case, I’m not a buyer of the stock at current levels. While I believe there could be a significant upside on offer for shareholders if the company does push through and strike black gold. But if it doesn’t, there’s no telling how far the stock could fall. I would rather sit on the sidelines and wait for news of further progress before initiating a position on this particular oiler. Under-The-Radar Investment There are a number of small-cap stocks that could be worth buying right now, and our investing analysts have written a FREE guide called “1 Top Small-Cap Stock From The Motley Fool”. The company in question may have flown under your investment radar until now, but could help you to build a great income from your investments and retire early, pay off the mortgage, or simply enjoy a more abundant lifestyle. https://www.fool.co.uk/investing/2019/11/06/heres-what-id-do-about-the-ukog-share-price-right-now-2/
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03/11/2019
10:58		johncasey: best news in ages! UKOG Fracking to be halted gov say. Conventional Oil and gas extraction is the way to go onshore. Very good news for UKOG share holders . Not so good for #igas. Could be the reason igas dropped and UKOG share price rose on Friday :)
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01/11/2019
12:03		gizmogizmo: TO ALL REAL UKOG INVESTORS. What do you think/hope the ukog share price will be on the 29th December 2019. I think 7/8p at least. some FANTASY share holders can participate as well (BUT) have to realise that they will not get anything out of it as there portfolio is NOT real..LOL.🤣
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14/10/2019
18:43		atino: This certainly ain’t “off topic” 😃👍 (Quote 🙇) “The UKOG share price: Is it set to soar in 2020?” 🤷🏻‍♂️ Something strange has happened to the UK Oil & Gas (LSE: UKOG) share price – it’s risen, and it’s kind of stayed up. Admittedly we’re still looking very much at penny share levels, but at 1.043p as I write, the price is up 30% since a low on 7 August. Over the past 12 months the UKOG share price has slumped by 46% (even after the latest gain), and we’re looking at a 90% loss since 2017’s peak. Could things really be different this time? Outpourings UKOG is turning up its rate of communications, and we’ve seen as many RNS releases from the company in the past month as in the previous five. It started with the announcement, on 11 September, that UKOG had expanded its holding in the Horse Hill oil field to a controlling 85.6%, from its previous 50.6% stake. Updates regarding drilling at Horse Hill have been rather mired in detailed technical progress. Frankly, I don’t really care about the specific time of day an activity commenced, exactly which diameter casing has just been cemented into place, to precisely what depth, and so on. We’re still getting regular flow test updates, with the test production from the Horse Hill-1 test well apparently reaching 41,800 barrels by 9 October. That’s total, by the way, which really tells us nothing whatsoever about any prospective daily production rate or the potential size of any reserves. These updates are really just saying “Oil is still trickling out of that hole we drilled.” More new shares UKOG is also still handing out new shares as if they find them on trees. Recently it’s been to convert some of its debt owed to YA II PN Ltd. In three new tranches, the company has issued 114.6m new shares in exchange for a reduction in its loan from £5.5m to £4.35m. Oh, and options for over 121.5m new shares were awarded to directors and employees on 27 September. And the firm’s newly formed Employee Benefit Trust is subscribing to 201m new shares. It’s easy to lose track of all these millions of new shares being issued, but despite this extra dilution, the UKOG share price is so far remaining relatively buoyant – though it did reach a higher point of 1.374p on 10 September, a level from which it has retrenched a little. I’ve scrutinised the past month’s worth of company updates, and I’m seeing nothing that inspires optimism. To me it all just seems like noise added to the news of all the new share issues. Meanwhile, there’s one substantial question that remains unanswered, and towards which I’m seeing no real progress. That question is – what commercial reserves are actually down there? A real milestone A key milestone for most oil explorers is getting good analysis done, leading to a Competent Person’s Report. Such a report would provide an independent technical report on UKOG’s hydrocarbon assets, split into three categories: reserves currently anticipated to be commercially recoverable, contingent resources that are not yet ready for commercial development, and prospective resources that could be potentially recoverable from new discoveries. UKOG has shown little enthusiasm for procuring such a report. But until I see one, I’ll continue to rate UKOG’s prospects as a pipe dream. I’m still giving it a wide berth. https://www.fool.co.uk/investing/2019/10/14/the-ukog-share-price-is-it-set-to-soar-in-2020/
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23/9/2019
15:34		hans christian andersen: Probably one of the few times when the name matches the content. The UKOG share price is flying. Time to buy? G A Chester | Monday, 23rd September, 2019 | More on: UKOG Arrowings ascending on a chalkboardImage source: Getty Images. The UK Oil & Gas (LSE: UKOG) share price has been on a tear over the last couple of months. It gained 13% in August and has gushed over 20% higher so far in September. Despite the rise, the current price of 1.3p remains a long way below its highs of over 8p this time two years ago. What’s behind the market’s rekindled enthusiasm for the stock? And could now be the time to jump aboard for a new run-up to the old highs and perhaps beyond? Good news It’s been just over five years since drilling commenced at Horse Hill — a test well (HH-1) that produced high initial flow rates and was dubbed the ‘Gatwick Gusher’. However, while there’s been some ad hoc revenue from further testing, a permanent producing well has yet to be established. The revenues from such production are important because, since the Gatwick Gusher was first drilled, UKOG has been raising cash — and burning through it at a rate of knots. Up to the end of 31 March this year, it had raised a total of £41m and burnt through £34.7m. Investors have had their pips well and truly squeaked, with the company having issued 4.7bn new shares over the period, taking the number of shares in issue from 1.3bn to 6bn. And there’s been further fundraisings (and cash burn) since 31 March. Shares in issue are up to 6.4bn at the latest count. The good news — and the reason I think market excitement about the stock has been reignited — is that a permanent production well finally appears to be within touching distance. On 12 September, the company announced a rig is scheduled to arrive by the end of the month to drill “the much anticipated HH-2/2z Portland horizontal well, a key step towards establishing significant long-term production and cash flow from Horse Hill by the end of the year.” Hothouse stock When I say market excitement about the stock has been reignited, you need to understand what the market for UKOG stock is. Like a lot of loss-making AIM-listed oilers, there are no institutional investors among the company’s major shareholders. Price action is driven entirely by retail investors, some of whom are in for the long haul. But many hop from oil stock to oil stock as company news and sentiment waxes and wanes, or are speculative day traders, following wherever there’s volume and momentum, and adding to it. In this hothouse environment, share prices — and the valuations of the companies — can move out of all proportion to the underlying fundamentals of the business, which is what investors should be focused on. Fundamentals It’s looking like the Portland producing well is finally going to happen, having been originally scheduled for late 2018/early 2019. While the cash flow will be welcome, there’ll still be a need for further dilutive fundraisings to develop the field, even in the best case targeted rate of production, which there’s no guarantee will be achieved. Furthermore, UKOG has yet to publish a promised updated independent Competent Persons Report (CPR) with recoverable reserves and net present values of cash flows associated with the envisaged field development. Based on the existing CPR, I think the company’s £83m market valuation is much too high. As such, I’m avoiding the stock at this stage.
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15/9/2019
14:50		gizmogizmo: Looks like crude oil price may jump up tomorrow along with ukog share price. GOODLUCK ALL.
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04/5/2019
19:57		atino: UK Oil & Gas (UKOG) share price: hit and hope? 🤷‍♂;️🤦‍♂️ By all metrics, UK Oil & Gas (UKOG) is an extraordinary stock. A mixture of patriotism, hyperactivity on internet bulletin boards and high trading volumes have led to wild swings in the share price. Launched by serial entrepreneur, David Lenigas, as a cash shell in late December 2013, UKOG is an oil and gas exploration company with several assets in the Weald Basin of the South of England. In March 2016 it attracted national news coverage with the discovery of the ‘Gatwick Gusher’, an onshore oil field at Horse Hill in Surrey, and claims of up to 100 billion barrels of oil, which has sparked ongoing investor interest ever since. The company is AIM-listed, one of many junior exploration and production businesses that have listed on the market. As of April 2019, there were 93 companies in the AIM Energy classification, of which just 15 reported profits. To finance the firm’s activity to date, UKOG has regularly tapped the markets for more cash to expand operations, with a further placing raising £3.5 million in March 2019. This has caused significant dilution for shareholders, doubling the number of share outstanding over the past two years, to a fraction over 6 billion, a ten fold increase since December 2013. The result of this is that while the share price has gone nowhere over five years, the market cap has increased from a very low base. UKOG – the speculator’s favourite Now sporting a market cap of just over £70 million, but never having got close to generating meaningful revenues. Data on Google searches reveals astonishing search volumes for such a small business, with around 400,000 monthly searches for terms such as ‘UKOG’ or ‘UKOG share price’. In comparison, similar search terms for HSBC’s share price are around ten times lower. This is reflected in the number of posts on the popular bulletin board, ADVFN; 137,000 posts for the former and just 8000 posts on the latter. Unusually for a high profile share, it is not covered by any sell side analysts and has a shareholder list that is almost uniformly made up of non-professional investors. For many people that would be a genuine red flag: in the absence of institutional investors, have the necessary levels of due diligence been performed by the shareholders? UKOG’s management have been awarded share options as part of their compensation, but appear not to own many shares (if any) in the business. Possibly uniquely, the ten largest registered owners are all retail investor platforms, with Hargreaves Lansdown and Interactive Investor alone accounting for 40% of the holders. IG’s clients are also active in this stock, and at the turn of the year nearly 3% of clients had a position in it. Table: UKOG shareholder list Owner Holding % Hargreaves Lansdown 26.0 Interactive Investor 14.0 Halifax Share Dealing 12.8 Barclays (client accounts) 7.5 HSBC Holdings 4.6 Share Centre 3.2 AJ Bell 2.4 Equiniti Shareview 2.4 IG Markets 1.9 Jarvis Investment Management 1.9 Total 76.7 Source: Bloomberg, April 2019 Oil exploration is costly Finding and the extracting oil is a costly business, particularly in the crowded South East of England, and UKOG is not alone in having its share of disappointments. 2018 saw write-offs totaling £11.56 million, with the announcement in February of ‘formation damage’ at the Broadford Bridge oil well knocking more than £50 million off the market cap in one day. This is the crux of the problem. Finding oil is relatively simple compared to the challenges of extracting it, and it simply may not be viable to pump commercial quantities of oil to the surface. Revenues of just £0.2 million a year reflect this difficulty. UKOG clearly outlines its project plans in the latest investor presentation, prospecting in a number of areas, but the reality is that this is very much an exploration company which could be many years from making large revenues. If indeed it ever gets there. The extract from the presentation below illustrates this point quite neatly. The question investors will inevitably be asking, is why a loss-making business has continued to use precious cash on acquiring further assets from Europa Oil & Gas and Union Jack Oil, if the existing asset at Horse Hill is expected to be so productive? Another concern for investors would be that company’s share price is determined by speculators, rather than investors, many of whom are waiting for the next big price spike. If, or when, the share price does rally, it’s inevitable that not everyone will be able to sell at once. Conclusion – UKOG just another ‘lottery stock’? UKOG has similar characteristics to Sirius Minerals, a North Yorkshire potash miner, only on a scale many times smaller. It’s easy to dismiss these types of loss-making thematic stocks as ones to avoid, and certainly the share price volatility of both these businesses have a casino-like element which offers a high probability of making capital losses – yet by their very nature some of them will pay off. The academics Bjorn Eraker and Mark Ready, in a 2014 paper, ran an analysis of US-listed penny stocks, finding that a substantial majority of these investments underperformed the wider market when costs were taken into account. However, the dataset exhibited strong positive skew, meaning that there were very large outsized gains to be made in a smaller subset of names. UKOG may not be a lottery ticket, in the truest sense, but investors should take more care than usual before allocating large amounts of their capital to it. https://www.ig.com/uk/investments/news/share-dealing/2019/04/29/uk-oil---gas--ukog--share-price--hit-and-hope-
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20/4/2019
20:15		datait2: Enjoy, I do trust you have read UKOG's propectus before you invested here !! RISKS RELATING TO THE COMPANY AND ITS BUSINESS STRATEGY Internal systems and controls The Company faces risks frequently encountered by developing companies such as undercapitalisation, cash shortages and limited resources. In particular, its future growth and prospects will depend on its ability to manage growth and to continue to maintain, expand and improve operational, financial and management information systems on a timely basis, whilst at the same time maintaining effective cost controls. Any damage to, failure of or inability to maintain, expand and upgrade effective operational, financial and management information systems and internal controls in line with the Company’s growth could have a material adverse effect on the Company’s business, financial condition and results of operations. Attraction and retention of key employees and personnel The Company’s success will depend on its current and future executive management team. If any key person resigns, there is a risk that no suitable replacement with the requisite skills, contacts and experience will be found to replace such person. The senior executive personnel currently have equity or share option interests in the Company. Notwithstanding this, if key personnel were to leave the Company, it could have a material adverse effect on the Company’s business, financial condition and operating results. Retention of key business relationships The Company will rely significantly on strategic relationships with other entities on good relationships with regulatory and governmental departments and upon third parties to provide essential contracting services. There can be no assurance that its existing relationships will continue to be maintained or that new ones will be successfully formed and the Company could be adversely affected by changes to such relationships or difficulties in forming new ones. Any circumstance which causes the early termination or non-renewal of one or more of these key business alliances or contracts or the failure successfully to form new ones, could adversely impact the Company, its business, operating results and prospects. Political conditions and government regulations Although political conditions in the UK are generally stable, changes may occur in its political, fiscal and legal systems, which might adversely affect the ownership or operation of the Company’s interests including, inter alia, changes in exchange rates, exchange control regulations, expropriation 30 of oil and gas rights, changes in government and in legislative, fiscal and regulatory regimes. The Company’s strategy has been formulated in the light of the current regulatory environment and likely future changes. Although the Directors believe that the Company’s activities are currently carried out in accordance with all applicable rules and regulations, no assurance can be given that new rules, laws and regulations will not be enacted or that existing or future rules and regulations will not be applied in a manner which could serve to limit or curtail exploration production or development of the Company’s business or have an otherwise negative impact on its activities. Amendments to existing rules, laws and regulations governing the Company’s operations and activities, or increases in or more stringent enforcement, implementation or interpretation thereof, could have a material adverse impact on the Company’s business, results of operations and financial condition and its industry in general in terms of additional compliance costs. Project development risks There can be no assurance that the Company will be able to manage effectively the expansion of its operations or that the Company’s current personnel, systems, procedures and controls will be adequate to support the Company’s operations. This includes among other things, the Company managing the acquisition of required land tenure, infrastructure development and other related issues. Any failure of the Board to manage effectively the Company’s growth and development could have a material adverse effect on the Company’s business, financial condition and results of operations. There is no certainty that all, or indeed, any of the elements of the Company’s current strategy will develop as anticipated and that the Company will be profitable. Environmental, health and safety and other regulatory standards The projects in which the Company invests and its existing and potential production and exploration activities are subject to various laws and regulations relating to the protection of the environment (including regular environmental impact assessments and the obtaining of appropriate permits or approvals by relevant environmental authorities) and are also required to comply with applicable health and safety and other regulatory standards. Environmental legislation in particular can comprise numerous regulations which might conflict with one another and which cannot be consistently interpreted. Such regulations typically cover a wide variety of matters including without limitation prevention of waste pollution and protection of the environment, labour regulations and worker safety. The Company may also be subject under such regulations to clean-up costs and liability for toxic or hazardous substances which may exist on or under any of its properties or which may be produced as a result of its operations. As a result, although the Company intends to operate in accordance with the highest standards of environmental practice and comply in all material respects, full compliance with applicable environmental laws and regulations may not always be ensured. The current and anticipated operations of the Company, including further exploration, appraisal, development, production and ultimately decommissioning activities require permits from various national and local governmental authorities. Such operations are subject to a substantial body of laws and regulations governing land use, the protection of the environment, production, taxes, labour standards, occupational health, waste disposal, toxic substances, mine safety and other matters. Any changes to, and increases in, current regulation or legal requirements, with the enforcement thereof, may have a material adverse effect upon the Company in terms of additional compliance costs. Unfavourable amendments to current laws, regulations and permits governing operations and activities of development and/or production companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by the Company. Any failure to comply with relevant environmental, health and safety and other regulatory standards may subject the Company to extensive liability, fines and/or penalties and have an adverse effect on the business and operations financial results or financial position of the Company. Furthermore, the future introduction or enactment of new laws, guidelines and regulations could serve to limit or curtail the growth and development of the Company’s business or have an otherwise negative impact on its operations. Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions thereunder, including orders issued by regulatory or judicial authorities 31 causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation or additional equipment or remedial actions. Currency risks The Company receives revenue from the sale of oil from its Projects; oil is priced in US dollars whilst the bulk of the Company’s costs are in GBP and therefore the Company’s financial position and performance will be affected by fluctuations in the US dollar, sterling exchange rate along with fluctuations in the oil price. In addition the Company may make investments in currencies other than Sterling and the Company does not currently intend to hedge against exchange rate fluctuations. Accordingly, the value of such investments may be adversely affected by changes in currency exchange rates notwithstanding the performance of the investments themselves, which may have a material adverse effect on the business, financial condition, results of operations and prospects of the Company. Insurance coverage and uninsured risks The Company insures its operations in accordance with industry practice and plans to insure the risks it considers appropriate for the Company’s needs and circumstances. However, the Company may elect not to have insurance for certain risks, due to the high premium costs associated with insuring those risks or for various other reasons, including an assessment that the risks are remote. No assurance can be given that the Company will be able to obtain insurance coverage at reasonable rates (or at all), or that any coverage it obtains will be adequate and available to cover any claims arising. The Company may become subject to liability for pollution or other hazards against which it has not insured or cannot insure, including those in respect of past activities for which it was not responsible. In the event that insurance coverage is not available or the Company’s insurance is insufficient to fully cover any losses, claims and/or liabilities incurred, the Company’s business and operations, financial results or financial position may be disrupted and adversely affected. The payment by the Company’s insurers of any insurance claims may result in increases in the premiums payable by the Company for its insurance cover and adversely affect the Company’s financial performance. In the future, some or all of the Company’s insurance coverage may become unavailable or prohibitively expensive. Fluctuations of revenues, expenses and operating results Future revenues, expenses and operating results of the Company could vary significantly from period to period as a result of a variety of factors, some of which are outside its control. These factors include general economic conditions, adverse movements in interest rates, conditions specific to the oil and gas market, seasonal trends in revenues, capital expenditure and other costs and the introduction of new products or services to the market. In response to a changing competitive environment, the Company may elect from time to time to make certain pricing, service or marketing decisions or investments that could have a material adverse effect on the Company’s revenues, results of operations and financial conditions and prospects. Third-Party Credit Risk The Company is and may in the future be exposed to third-party credit risk through its contractual arrangements with its current or future joint venture partners, marketers of its petroleum and production and other parties. Significant changes in the oil and natural gas industry, including fluctuations in commodity prices and economic conditions, environmental regulations, government policy and other geopolitical factors, could adversely affect the Company’s ability to realise the full value of its accounts receivable. Typically, oil and gas operations are funded pro rata to the participants’ interests in the licences or concessions, accordingly to budgets and work programmes drawn up by the operator and approved by the requisite majority of the participants, subject to variations as agreed between the participants. Any failure of a participant to pay its share of operational costs in whole or in part may increase the costs for the other participants and/or lead to delays or changes to proposed operations, which may have a material and adverse effect on the Company’s business, financial condition, results of operations or prospects. 32 Decommissioning and abandonment As a party to certain Licences, the Company (together with the other participants) has undertaken obligations to restore production areas to standards acceptable to the OGA and the environmental regulator at the end of the production fields’ commercial lives. The Company will be liable for its share of any decommission work. Any obligation to decommission a production facility may involve a substantial expenditure. These decommissioning costs are necessarily incurred at a time when the related production facilities are no longer generating revenue and no provisioning has been made in the Company’s accounts for such future decommissioning costs. It is intended that the decommissioning costs, when they arise, will be borne by the Company out of production revenue. There can, however, be no assurance that the production revenue will be sufficient to meet these decommissioning costs as and when they arise, and if the Company has to apply other or additional financial resources to meet these costs instead, it could have a material adverse effect on the Company’s business, financial condition, cash flows, results of operations and prospects. Upon cessation of any operations on a licence area, the Company is likely to be responsible for costs associated with abandoning infrastructure and restoring the operational sites by taking reasonable and necessary steps in accordance with generally accepted environmental practices in the international petroleum industry. The Company’s environmental permits may specify commitments to the relevant government authority for specific rehabilitation activities on a site. Licensing, planning permission and other consents The development of the Company’s current and future assets may be dependent on the receipt of planning permission from the appropriate local authorities as well as other necessary consents such as environmental permits, leases and regulatory consents. Obtaining the necessary consents and approvals may be costly, and they may not be granted or may be withdrawn or made subject to limitations. The failure to gain such permissions, or gain such permissions on terms or at a cost acceptable to the Company, may limit the Company in its ability to develop and extract value from its assets and could have a material adverse effect on the Company’s business, results of operations, financial conditions and prospects. Onshore oil and gas operations in the UK have recently been subject to extensive planning and environmental approval procedures, the outcome of which has been uncertain. Unforeseen circumstances or circumstances beyond the control of the Company may lead to commitments given to licencing authorities not being discharged on time. In particular, the Company’s activities are dependent upon the grant and maintenance of appropriate permissions from, amongst others, the OGA. As operator of certain of the Licences, the Company is responsible for adhering to the work programme in the form approved by the OGA. Failure to do so may result in the rescinding of permission by the OGA, which could result in the Company suffering significant damage through loss of the opportunity to identify and extract hydrocarbons. The expiry dates of the Licences in which the Company is interested are set out in Part V of this Document. The Licences are not automatically renewed. Although the Company believes that the Licences will be renewed or extended following expiry, provided oil and gas operations are continuing at the licence areas and operations have complied with all applicable regulatory requirements, there can be no assurance that such Licences will be renewed or extended. Production The delivery of the Company’s plans depends on the successful continuation of existing field production operations and the development of key projects. Both of these involve risks normally incidental to such activities including blowouts, oil spills, explosions, fires, equipment damage or failure, natural disasters, geological uncertainties, unusual or unexpected rock formations, abnormal pressures, seismic events, availability of technology and engineering capacity, availability of skilled resources, maintaining project schedules and managing costs, as well as technical, fiscal, regulatory, political and other conditions. Such potential obstacles may impair the Company’s continuation of existing field production and delivery of key projects and, in turn, the Company’s operational performance and financial position (including the financial impact from failure to fulfil contractual commitments related to project delivery). The Company may face interruptions or delays in the availability of infrastructure, including pipelines and storage tanks, on which exploration and production activities are dependent. The production performance of the reservoirs and wells may also be different to that forecast due to normal geological or mechanical uncertainties. Such interruptions, delays or performance differences could result in disruptions or changes to the 33 Company’s existing production and projects, lower production and increased costs, and may have an adverse effect on the Company’s profitability. Social Media The Company is aware that it has a large following of stakeholders and is often covered and mentioned in the media, including social media. It is important to note that UKOG has no direct influence on articles published by third parties however such publications hold the potential to effect its share price. This was evident during June 2015, when UKOG was forced to provide clarifications on its earlier RNS statements following media reports of the Company’s announcements and associated interviews with the Company’s management. Consequently, the Board has implemented a Social Media Policy across its operations which applies to all employees, officers, consultants, contractors, interns, casual workers and agency workers. Although this policy will ensure that the Company does not publish any un-authorised media itself, it is important to note that other media providers and individuals may publish their own information without consultation with the company and such articles may therefore may have an unqualified effect on UKOG’s share price and should not be relied upon. Undated documents The Group does not have in its possession certain dated contractual documents relating to the acquisition and disposal of interests in, and the operations of, its oil and gas assets (including the Licences), the terms of which are referred to in Part V of this document. The descriptions of the contracts contained in this document accurately reflect the documentation held by the Company and which the Company believes represents the final form of the definitive executed agreements between the respective counterparties. The operations of the Group’s assets and dealings with the counterparties to the respective agreements have been conducted in accordance with the terms of such documentation held by the Group, which follow standard industry terms and provide for usual pro rata costs of and entitlements in the Licences for the participants therein, and terms of appointment of the operator. The interests of the Group in the Licences referred to in this document, as shown on the OGA’s website, are also in accordance with the contractual documentation held by the Group. Therefore, whilst the Directors are confident that the position and terms of the interests in its oil and gas are as described in Part V of this document and that there would be a very small chance of legal challenge, should any counterparty dispute the terms of the agreements and assert that different terms and conditions had been agreed with the Group, the Group may require legal process to be followed to establish that the documentation it holds is definitive in governing the contractual relationship. Any finding that terms are materially different from the terms of the material contracts as described in this document may have a material adverse effect on the Group’s business, financial condition, results of operations and prospects. RISKS ASSOCIATED WITH THE OIL AND GAS INDUSTRY Payment obligations Under the Licences and certain other contractual agreements to which the Company is or may in the future become a party, the Company is or may become subject to payment and other obligations. In particular, the Licence holders are required to expend the funds necessary to meet the minimum work commitments attaching to permits and licences. Failure to meet these work commitments will render the Licence liable to be cancelled. Further, if any contractual obligations are not complied with when due, in addition to any other remedies which may be available to other parties, this could result in dilution or forfeiture of interests held by the Company. Litigation The operating hazards inherent in the Company’s business expose the Company to litigation, including personal injury litigation, environmental litigation, contractual litigation with clients, intellectual property litigation, tax or other litigation. As the date of this Document the Company is involved in legal proceedings, further details of which are set out in paragraph 17 of Part V. There is no assurance that the outcome of these proceedings will be favourable to the Company. The Company cannot predict with certainty the outcome or effect of these proceedings or any other litigation matter that it may be involved in the future. The current 34 proceedings and any future litigation may have an adverse effect on the Company’s business, financial position, results of operations and the Company’s ability to pay dividends, because of potential negative outcomes, the costs associated with prosecuting or defending such lawsuits, and the diversion of management’s attention to these matters. The petroleum industry, as with all industries, may be subject to legal claims including personal injury claims, both with and without merit, from time to time. The Directors cannot preclude that such litigation may be brought against the Company in the future. Defence and settlement costs can be substantial, even with respect to claims that have no merit. Due to the inherent uncertainty of the litigation process, there can be no assurance that the resolution of any particular legal proceeding will not have a material adverse effect on the Company’s financial position, results or operations. The Company’s business may be materially adversely affected if the Company and/or its employees or agents are found not to have met the appropriate standard of care or not exercised their discretion or authority in a prudent or appropriate manner in accordance with accepted standards. Ability to exploit successful discoveries It may not always be possible for the Company to participate in the exploitation of all successful discoveries made in areas in which the Company has an interest. Such exploitation may involve the need to obtain licences or consents from the relevant authorities, which may require conditions to be satisfied and/or the exercise of discretion by such authorities. It may, or may not, be possible for such conditions to be satisfied. Furthermore, the decision to proceed to further exploitation may require the participation of other companies whose interest and objectives may not be the same as those of the Company. Such further work may also require the Company to meet, or commit to, financing obligations, which it may not have anticipated or may not be able to commit to, due to lack of funds, or inability to raise funds. Market risk The continued marketing of the oil that the Company produces will be dependent on market fluctuations and the availability of processing and refining facilities and transportation infrastructure, including access to roads, train lines and any other relevant options at economic tariff rates, over which the Company may have limited or no control. Transport links (including roads and pipelines) may be inadequately maintained and subject to capacity constraints and economic tariff rates may be increased with little or no notice and without taking into account producer concerns. Producers of oil negotiate sales contracts directly with oil purchasers, with the result that the market determines the price of oil. The price depends in part on oil quality, prices of competing fuels, distance to market, the value of refined products and the supply/demand balance. The marketability and prices of oil that may be discovered or acquired by the Company will be affected by numerous factors beyond its control. Technological developments The Company may not be able to keep pace with technological developments in its industry. The oil industry is characterised by rapid and significant technological advancements and introductions of new products and services using new technologies. As others use or develop new technologies, the Company may be placed at a competitive disadvantage, and competitive pressures may force the Company to implement those new technologies at substantial cost. In addition, other oil companies may have greater financial, technical and personnel resources that allow them to enjoy technological advantages and may in the future allow them to implement new technologies before the Company can. The Company may not be able to respond to these competitive pressures and implement new technologies on a timely basis or at an acceptable cost. If one or more of the technologies the Company uses now or in the future were to become obsolete or if the Company is unable to use the most advanced commercially available technology, the Company’s business, financial condition and results of operations could be materially and adversely affected. Competition The Company operates in a very challenging business environment and competition for access to explorations acreage, oil services and rigs, technology and processes, and human resources is intense. Competitors include companies with, in many cases, greater financial resources, local contacts, staff and facilities than those of the Company for exploration and production licences as well as other regional investment or acquisition opportunities may increase in the future. This may 35 lead to increased costs in the carrying on the Company’s activities and reduced available growth opportunities. Any failure by the Company to compete effectively could adversely affect the Company’s operating results and financial condition. Increase in drilling and production costs and the availability of drilling equipment The oil industry historically has experienced periods of rapid cost increases. Increases in the cost of exploration, production and development would affect the Company’s ability to invest in prospects and to purchase or hire equipment, supplies and services. In addition, the availability of drilling rigs and other equipment and services is affected by the level and location of drilling activity around the world. The reduced availability of equipment and services may delay its ability to exploit reserves and adversely affect the Company’s operations and profitability. Such pressures are likely to increase the actual cost of services, extend the time to secure such services and add costs for damages due to any accidents sustained from the overuse of equipment and inexperienced personnel. Delays in drilling and other exploration activities, the possibility of poor services coupled with potential damage to downhole reservoirs and personnel injuries may also result in increased costs. Other factors affecting the production and sale of oil and natural gas that could result in decreases in profitability or otherwise adversely affect the Company’s operations include: (i) expiration or termination of leases, concession right, consents, permits or licences, or sales price redeterminations or suspension of deliveries; (ii) future litigation; (iii) the timing and amount of insurance recoveries; (iv) work stoppages or other labour difficulties; (v) worker vacation schedules and related maintenance activities; and (vi) limitations on access to transport capacity. There can be no assurance that these or similar issues may not cause disruptions to the Company’s ability to produce or sell oil in the future. Delays in production and transportation Various production, marketing and transportation conditions may cause delays in oil production and adversely affect the Company’s business. The inability to complete wells in a timely manner would result in production delays and could have a material adverse effect on the Company’s financial position and future results of operations. Restrictions on the Company’s ability to access necessary infrastructure services may adversely affect the Company’s operations Inadequate supply of the critical infrastructure elements for drilling activity could result in reduced production or sales volumes, which could have a negative effect on the Company’s financial performance. Disruptions in the supply of essential utility services, such as water and electricity, can halt the Company’s production for the duration of the disruption and, when unexpected, may cause loss of life or damage to its drilling equipment or facilities, which may in turn affect its ability to recommence operations on a timely basis. The Company may be dependent on third party providers of utility and transportation services. As such, third party provision of services, maintenance of networks and expansion and contingency plans will be outside of the Company’s control. Volatility of prices for oil and gas The demand for, and price of, oil and gas is highly dependent on a variety of factors beyond the Company’s control, including international supply and demand, weather conditions, the price and availability of alternative fuels, actions taken by governments and international cartels, supply and demand of capital, employment trends, international economic trends, currency exchange rate fluctuations, the level of interest rates and the rate of inflation, the cost of freight, global or regional political events and international events, as well as a range of other market forces. The aggregate effect of these factors is impossible to predict. International oil and gas prices have fluctuated widely in recent years and may continue to fluctuate significantly in the future. Sustained downward movements in oil and gas prices could render less economic, or wholly uneconomic, some or all of the exploration and the existing, and potential future, oil production related activities to be undertaken by the Company. Any material decline in oil and gas prices could result in a reduction of the Company’s net production revenue and overall value. The economics of producing from some wells may change as a result of lower prices, which could result in a reduction in the volumes of the Company’s reserves. The Company might also elect not to produce from certain wells at lower prices. All of these factors could result in a material decrease in the Company’s net production revenue causing a reduction in its acquisition and development 36 activities. A substantial material decline in prices from historical average prices could reduce the Company’s ability to borrow funds. The Company’s operations and development projects could be adversely affected by shortages of, as well as lead times to deliver, certain key inputs The inability to obtain, in a timely manner, strategic consumables, raw materials, drilling and processing equipment could have an adverse impact on any results of operations and financial condition. Periods of high demand for such supplies can result in periods when availability of supplies are limited and cause costs to increase above normal inflation rates. Any interruption to supplies or increase in costs could adversely affect the operating results and cash flows of the Company. Over-run of drilling programme and costs over-run It may not be possible for the Company, as the operator of certain Licences, to adhere to agreed drilling schedules. This may impact all participants in the Licences, and their future plans. The project partners’ final determination of whether to drill any scheduled or budgeted wells will depend on a number of factors including: l results of the exploration efforts and the acquisition, review and analysis of seismic data, if any; l availability of sufficient capital resources and any other participants for the drilling of the prospects; l approval of the prospects by other participants after additional data has been compiled; l economic and industry conditions at the time of drilling, including prevailing and anticipated process for oil and natural gas and the availability and prices of drilling rigs and crews; and l availability of leases, licence options, farm-outs, other rights to explore and permits on reasonable terms for the prospects Although the Company, as the operator of certain Licences, will at the time identify or budget for drilling prospects, it will require the approval of all or a requisite majority of the participants of those Licences. It may not be possible to drill those prospects within the expected timeframe, or at all, and the drilling schedule, once agreed, may vary from its expectations because of future uncertainties and rig availability and access to drilling locations. In addition, there is a risk that no commercially productive oil or gas reservoirs will be discovered. Dependence on third party services The Company may rely on products and services provided by independent third parties, such as undertaking due diligence and technical reviews, carrying out drilling activities and delivering oil products, and providing general financial and strategic advice. If there is any interruption to the products or services provided, or failure to perform those services with due care and skill, by such third parties, the Company’s business could be adversely affected and the Company may be unable to find adequate replacement services on a timely basis, if at all, and/or on acceptable commercial terms. This may have a material adverse effect on the business, financial conditions, results of operations and prospects of the Company. Exploration, development and production activities are capital intensive and inherently uncertain in their outcome. As a result, the Company may not generate a return on its investments or recover its costs and it may not be able to generate cash flows or secure adequate financing for its discretionary capital expenditure plans Exploration, development and production activities are capital intensive and inherently uncertain in their outcome. The Company’s projects may involve unprofitable efforts, either from dry wells or from wells that are productive but do not produce sufficient net revenues to return a profit after development, operating and other costs. Furthermore, completion of a well does not guarantee a profit on the investment or recovery of the costs associated with that well. In addition, drilling hazards or environmental damage could significantly affect operating costs, and production from successful wells may be adversely affected by conditions including delays in obtaining governmental approvals or consents, shut-ins of connected wells resulting from extreme weather conditions, insufficient storage or transportation capacity or adverse geological conditions. Production delays and declines, whether or not as a result of the foregoing conditions, may result in lower revenue or cash flows from 37 operating activities until such time, if at all, that the delay or decline is cured or arrested. In the event that such cash flows are reduced in the future, the Company may be forced to scale back or delay discretionary capital expenditure resulting in delays to, or the postponement of, the Company’s planned production and development activities which could have a material adverse effect on its business, results of operations, financial condition or prospects. Operational risks Drilling, appraisal, exploration, construction, development and production activities may involve significant risks and operational hazards and environmental, technical and logistical difficulties, as usually associated with oil and gas operations. These include, inter alia, the possibility of uncontrolled hydrocarbon emissions, fires, earthquake activity, extreme weather conditions, coastal erosion, explosions, blowouts, cratering, over-pressurised formations, unusual or unexpected geological conditions, unpredictable drilling-related problems, equipment failure, labour disputes and the absence of economically viable reserves. These hazards may result in delays or interruption to production, cost over-runs, the failure to produce oil in commercial quantities, substantial losses and/or exposure to substantial environmental and other liabilities, including potential litigation and clean-up or other remedial costs. Damages claimed in connection with any consequent litigation and the costs to the Company in defending itself against such litigation are difficult to predict and may be material. In addition, the Company could experience adverse publicity as a result of any such litigation. Any loss of production or adverse legal consequences stemming from production hazards could have a material adverse effect on the Company’s business, results of operations, financial condition or prospects. Non achievement of anticipated timetables Drilling rigs or other equipment may not be available at the time envisaged (due to, for example, delays in making appropriate modifications, adverse weather conditions, insolvency of the owners or total loss) or may fail to perform in accordance with the Directors’ expectations in regard to the timetable. There is no guarantee that replacement equipment will be available on reasonable commercial terms or at all. Failure to meet the expected timetables may result in the Company being unable to generate cash from those assets. This would have a material adverse effect on the Company’s business, prospects, financial condition and operations. The Company’s anticipated timetables for all of its current and expected operations are estimates of the Directors based on a number of variables not all of which are under the Company’s direct control. If the timetable estimates prove to be wrong or the operators or any of the participants in the Licences do not take the actions in relation to maintaining or developing the assets then it may lead to delays or further problems which may have a material adverse effect on the Company’s business, prospects, financial conditions and operations. Existing and proposed legislation and regulation affecting greenhouse gas emissions may adversely affect certain of the Company’s operations Many participants in the oil and gas sector are subject to current and planned legislation in relation to the emission of carbon dioxide, methane, nitrous oxide and other so called ‘greenhouse gases’. Failure to comply with existing legislation or any future legislation could adversely affect the Company’s profitability. Future legislative initiatives designed to reduce the consumption of hydrocarbons could also have an impact on the ability of the Company to market its commodities and/or the prices which it is able to obtain. These factors could have a material adverse effect on the Company’s business, results of operations, financial condition or prospects. Failure to discover new reserves, enhance existing reserves or adequately develop new projects could adversely affect the Company’s business Exploration and development are costly, speculative and often unproductive, but are necessary for the Company’s business. This is particularly the case in the oil and gas industry, where there may be many reasons why the Company may not be able to find oil reserves or develop them for commercially viable production. For instance, factors such as adverse weather conditions, natural disasters, equipment or services shortages, procurement delays or difficulties arising from the environmental and other conditions in the areas where the reserves are located or through which production is transported may increase costs and make it uneconomical to develop potential 38 reserves. Failure to discover new reserves, to enhance existing reserves or to extract resources from such reserves in sufficient amounts and in a timely manner could materially and adversely affect the Company’s results of operations, cash flows, financial condition and prospects. In addition, the Company may not be able to recover the funds used in any exploration programme to identify new opportunities. Increasingly stringent requirements relating to regulatory, environmental and social approvals can result in significant delays in construction of additional facilities and may adversely affect new drilling projects, the expansion of existing operations and, consequently, the Company’s results of operations, cash flows and financial condition, and such effects could be material. Reserve and resource estimates No assurance can be given that hydrocarbon reserves and resources reported by the Company in the future are present as estimated, will be recovered at the rates estimated or that they can be brought into profitable production. Hydrocarbon reserve and resource estimates may require revisions and/or changes (either up or down) based on actual production experience and in light of the prevailing market price of oil and gas. A decline in the market price for oil and gas could render reserves uneconomic to recover and may ultimately result in a reclassification of reserves as resources. Unless stated otherwise, the hydrocarbon resources data contained in this Document are taken from the Competent Person’s Report. The reserves and resources data contained in this Document have been certified by Xodus unless stated otherwise. There are uncertainties inherent in estimating the quantity of reserves and resources and in projecting future rates of production, including factors beyond the Company’s control. Estimating the amount of hydrocarbon reserves and resources is an interpretive process and, in addition, results of drilling, testing and production subsequent to the date of an estimate may result in material revisions to original estimates. The hydrocarbon resources data contained in this Document and in the Competent Person’s Report are estimates only and should not be construed as representing exact quantities. The nature of reserve quantification studies means that there can be no guarantee that estimates of quantities and quality of the resources disclosed will be available for extraction. Therefore, actual production, revenues, cash flows and development and operating expenditures may vary from these estimates. Such variances may be material. Reserves estimates contained in this Document are based on production data, prices, costs, ownership, geophysical, geological and engineering data, and other information assembled by the Company (which it may not necessarily have produced). The estimates may prove to be incorrect and potential investors should not place reliance on the forward looking statements contained in this Document (including data included in the Competent Person’s Report or taken from the Competent Person’s Report and whether expressed to have been certified by the Competent Person or otherwise) concerning the Company’s reserves and resources or production levels. Hydrocarbon reserves and resources estimates are expressions of judgment based on knowledge, experience and industry practice. They are therefore imprecise and depend to some extent on interpretations, which may prove to be inaccurate. Estimates that were reasonable when made may change significantly when new information from additional analysis and drilling becomes available. This may result in alterations to development and production plans which may, in turn, adversely affect operations. If the assumptions upon which the estimates of the Company’s hydrocarbon resources have been based prove to be incorrect, the Company (or the operator of an asset in which the Company has an interest) may be unable to recover and produce the estimated levels or quality of hydrocarbons set out in this Document and the Company’s business, prospects, financial condition or results of operations could be materially and adversely affected. Failure to manage relationships with local communities, government and non-government organisations could adversely affect future growth potential of the Company Natural resources businesses often face increasing public scrutiny of their activities. Operations located in or near communities that may regard oil and gas activities as detrimental to their environmental, economic or social circumstances. Negative community reaction to such operations could have a material adverse impact on the cost, profitability, ability to finance or even the viability of an operation. Such events could also lead to disputes with national or local governments or with 39 local communities and give rise to material reputational damage. These disputes are not always predictable and may cause disruption to projects or operations. Oil and gas operations can also have an impact on local communities. Failure to manage relationships with local communities, government and non-government organisations may adversely affect the Company’s reputation, as well as its ability to commence production projects, which could in turn affect the Company’s revenues, results of operations and cash flows. The Company, like other companies in the onshore oil and gas industry in the UK, has been subject to various protests from campaigners and activists who oppose the Company’s business activities. Sometimes these protests have taken the form of unlawful activity which seeks to disrupt the Company’s operations by activities such as trespass to land and other obstructive behaviour (including slow walking on the public highway, lorry surfing, intimidation of contractors or unlawful means conspiracy). The Company, as lead claimant, commenced proceedings in the High Court of Justice in London seeking various restraining orders against persons unknown who may fall into certain categories of prohibited behaviour (further details of which are set out in paragraph 17 of Part V of this Document). There is no assurance that the outcome of these proceedings will be favourable to the Company. Regardless of the outcome of these proceedings, the Company may be subject to further protests and related activities (both lawful and unlawful) which are beyond the control of the Company and which could result in damage or destruction of the Company’s equipment, business interruption, monetary losses and possible adverse publicity for the Group. RISKS RELATING TO ORDINARY SHARES Fluctuations in the price of Ordinary Shares The market price of Ordinary Shares may be subject to fluctuations in response to many factors, including variations in the operating results of the Company, divergence in financial results from analysts’ expectations, changes in earnings estimates by stock market analysts and factors outside the Company’s control including but not limited to general economic conditions, the performance of the overall stock market, other Shareholders buying or selling large numbers of Ordinary Shares and changes in legislation or regulations. In addition, stock markets have from time to time experienced extreme price and volume fluctuations, which, as well as general economic and political conditions, could adversely affect the market price for Ordinary Shares. The value of Ordinary Shares may go down as well as up. Investors may therefore realise less than, or lose all of, their original investment. Realisation of investment The market price of the Ordinary Shares may not reflect the underlying value of the Company’s net assets. Potential investors should be aware that the value of Ordinary Shares can rise or fall and that there may not be proper information available for determining the market value of an investment in the Company at all times. Admission should not be taken as implying that there will be a liquid market in the Ordinary Shares. An investment in the Ordinary Shares may thus be difficult to realise. In the event of a winding-up of the Company, the Ordinary Shares will rank behind any liabilities of the Company and therefore any return for Shareholders will depend on the Company’s assets being sufficient to meet prior entitlements of creditors. Liquidity of Ordinary Shares Admission to AIM should not be taken as implying that there will be a liquid market for Ordinary Shares. It may be more difficult for an investor to realise their investment in the Company than in a company whose shares are quoted on the Official List. Financing risks and requirements for further funds Successful exploration for, or the development of, oil and gas on any project will require very significant capital investment. The major source of financing currently available to the Company (other than through the cash raised pursuant to the Placing) is through the issue of additional equity capital or through bringing in partners to fund exploration and development costs, or obtaining debt. The Company’s ability to raise further funds will depend on the success of its strategy and operations. The Company may not be successful in procuring the requisite funds on terms which are acceptable to it (or at all) and, if such funding is unavailable, the Company may be required to 40 reduce the scope of its investments or anticipated expansion, forfeit its interest in some or all of its assets, incur financial penalties, miss certain acquisition opportunities or reduce or terminate its operations. If additional funds are raised through the issue of new equity or equity-linked securities of the Company other than on a pro rata basis to existing Shareholders, the percentage ownership of the existing Shareholders may be reduced. Shareholders may also experience subsequent dilution and/or such securities may have preferred rights, options and pre-emption rights senior to the Ordinary Shares. The Company may also issue Ordinary Shares as consideration for acquisitions or investments that would also dilute Shareholders’ respective shareholdings. Share issues may be priced below the then market price of the Ordinary Shares, or below the price at which previous share issues have been made, and the issue of additional Ordinary Shares by the Company, or the possibility of such an issue, may cause the market price of the Ordinary Shares to decline. Such equity issues may result in a change of control of the Company. Furthermore, any debt financing, if available, may include conditions that would restrict the Company’s freedom to operate its business, such as conditions that: l limit the Company’s ability to pay dividends or require it to seek consent for the payment of dividends; l increase the Company’s vulnerability to general adverse economic and industry conditions; l require the Company to dedicate a portion of any cash flow arising from future operations to payments on its debt, thereby reducing the availability of its cash flow to fund capital expenditures, working capital and other general corporate purposes; and l limit the Company’s flexibility in planning for, or reacting to, changes in its business and its industries, including the potential to take advantage of business opportunities as they arise. There can be no guarantee or assurance that such debt funding or additional equity will be forthcoming when required, or as to the terms and price on which such funds would be available if at all. If the Company is unable to obtain additional financing as needed, or on terms which are acceptable, it may not be able to fulfil its strategy, which could have a material adverse effect on the Company’s business, financial position and prospects. Suitability of Ordinary Shares as an investment Ordinary Shares may not be suitable for all the recipients of this Document. Before making any investment, prospective investors are advised to consult with an organisation or firm authorised or exempted pursuant to the FSMA and in the case of a resident in any other jurisdiction an appropriately authorised or exempted adviser for that jurisdiction, before making any investment decision. As the Directors believe the Company is unlikely to pay dividends in the foreseeable future, if ever, the Ordinary Shares are not suitable for investors requiring income. An investment in the Company is highly speculative, involves a considerable degree of risk and is suitable only for persons or entities which have substantial financial means and who can afford to hold their ownership interests for an indefinite amount of time. Future sales of Ordinary Shares by Shareholders may depress the price of the Ordinary Shares. Future sales or the availability for sale of substantial amounts of the Ordinary Shares in the public market could adversely affect the prevailing market price of the Ordinary Shares and could also impair the Company’s ability to raise capital through future issues of Shares. Dividend payments on the Ordinary Shares are not guaranteed Payment of dividends by the Company to Shareholders will depend on a number of factors, including its financial condition and results of operations, contractual restrictions, and other factors considered relevant by the Board. Under English law, any payment of dividends would be subject to the Act. All final dividends to be distributed by the Company must be recommended by the Board and approved by Shareholders. Moreover, under English law, the Company may pay dividends on its Ordinary Shares only out of profits available for distribution in accordance with the Act and under its Articles. 41 Dilution of Shareholders’ interests as a result of additional equity fundraising The Company may need to raise additional funds in the future to finance, amongst other things, working capital, expansion of the business, new developments relating to existing operations or acquisitions. If additional funds are raised through the issuance of new equity or equity-linked securities of the Company other than on a pre-emptive basis to existing shareholders, the percentage ownership of the existing shareholders may be reduced. Shareholders may also experience subsequent dilution and/or such securities may have preferred rights, options and pre-emption rights senior to the Ordinary Shares. Forward looking statements This Document contains forward-looking statements that involve risks and uncertainties. The Company’s results could differ materially from those anticipated in the forward-looking statements as a result of many factors, including the risks faced by the Company, which are described above and elsewhere in the Document. Additional risks and uncertainties not currently known to the Directors may also have an adverse effect on the Company’s business.
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