Final audited results for the year ended 31/12/21

RNS Number : 2838J

United Oil & Gas PLC

26 April 2022

26 April 2022 Registered number: 09624969

United Oil and Gas Plc

("United" "the Group" or the "Company")

Final audited results for the year ended 31 December 2021

Shareholder call, Notice of AGM and 2021 Annual Report and Accounts

United Oil & Gas PLC (AIM: "UOG"), the growing oil and gas company with a portfolio of production, development, exploration and appraisal assets is pleased to announce its audited results for the year ended 31 December 2021. A shareholder and an analyst call will take place this morning, details are below.

Brian Larkin, Chief Executive Officer commented:

"United has delivered strong financial performance and excellent drilling success in 2021 with all five wells in the programme adding production and cashflow to the Company. We have re-focused the portfolio which offers attractive growth and investment opportunities. We enter 2022 with an asset base leveraged to the higher oil price environment and with a strong balance sheet which provide a platform for growth.

"We have much to look forward to in 2022, with the five-well drilling campaign in Egypt which has had a great start with the successful ASD-2 development well and the recent spudding of the ASD-1X exploration well. In Jamaica the combination of support from our stakeholders in the form of a licence extension and high oil price have re-invigorated the farmout campaign while in the UK, we are excited about the commercialisation opportunities that the licence containing the Maria discovery offers.

"We have multiple growth opportunities in our portfolio and with our strong balance sheet, we look to complement organic growth with the pursuit of new business opportunities "

2021 Operational summary

· Group working interest 2021 production averaged 2,327 boepd (2020: 2,195 boepd )¹ in line with production guidance of 2,100-2,300 boepd issued on 6 September 2021

- 100% drilling success in five-well 2021 drilling campaign on the Abu Sennan licence replacing reserves

- Development concessions granted over the two commercial oil discoveries made through exploration drilling

· Jamaica licence extension granted - Initial Exploration Period will now run to 31 January 2024

· Zero Lost time incidents, Medical Treatment Injury, Restricted Work Injury, Spills, fires or environmental incidents

2021 Financial summary

· Group Revenue of $19.2m (2020: $9.1m)¹

· Gross Profit of $12.2m (2020: $2.5m)

· Profit after Tax $4.1m (2020: $0.9m)

· Realised oil price of $68.9/bbl (2020: $37.8/bbl)¹

· Cash collections of $17.3m (2020:$9.5m)¹

· Cash operating costs of $5.90 /boe (2020: $5.77/boe)¹

· Repayments on BP Pre-payment facility $5.4m (2020: $1.7m)¹

· Group Cash balance of $0.4m at the period end (2020: $2.2m)²

¹ From the completion of Rockhopper Egypt acquisition to period end, 28 February 2020 to 30 June 2020

² Payment of $0.8m from EGPC received on 2 Jan 22

Post- period

· Commencement of the 2022 five-well drilling campaign with the ASD-2 development well, which encountered at least 25.5 metres of net pay and started production end-March 2022

· Second well in the drilling campaign, the ASV-1X exploration well commenced drilling on 14 April 2022

· United terminated the sale and purchase agreement with Quattro Energy Limited to sell its UK Central North Sea Licences; P2480 and P2519

· Agreement signed with Anasuria Hibiscus UK Ltd for $2.5m in relation to the Crown milestone payment

· Completion of the sale of UOG Italia Srl to Prospex Energy for €2.2m plus €0.1m working capital adjustment

· Pre-paid Swap facility maturity date extended from September 2022 to December 2023 creating further financial flexibility for the Company

2022 Guidance

· Group working interest production in Egypt for the full year 2022 is forecast to average between 1,500 - 1,650 boepd net;

- Includes production from current wells with historical decline rates applied, and production from the two further development wells to be drilled this year which are expected to come on stream Q3/Q4 2022

- Does not include any contribution from our two planned exploration wells

· Group cash capital expenditure for the full year is forecasted to be approx.$7.2m, fully funded from existing operations

- circa $6.8m to be invested in Egypt, on five wells, eight workovers, and facility upgrades

- $0.4m across the other assets in the portfolio

Outlook - Focused on growth

· Cash generation is expected to continue strongly throughout 2022 in line with low-cost production leveraged to higher commodity price environment

· United's balance sheet has been significantly strengthened recently via completion of divestments and the debt refinancing providing a platform for growth

· Multiple growth opportunities exist in our current portfolio

- Egypt through developing discovered resources, low-cost production and high impact exploration potential in a proven hydrocarbon basin

- Jamaica - Exploration assets with 2.4 billion barrel potential

- UK Central North Sea has attractive investment and commercialisation opportunities

· Pursuit of new business opportunities in line with our investment criteria

Notice of Meeting and 2021 Annual Report and Accounts

The Annual General Meeting of the Company will be held at the offices of Armstrong Teasdale, 38 - 43 Lincoln's Inn Fields, London WC2A 3PE at 12.00 p.m. on 1 June 2022.

The Annual Report & Accounts of the Company for the year ended 31 December 2021, Notice of the 2022 Annual General Meeting, and a Form of Proxy are now available on the Company's website and can be accessed via https://www.uogplc.com/investors/reports-presentations-and-meetings

Hard copies of the above two documents, together with a Form of Proxy, have been mailed to those shareholders having elected to receive paper copies.

Events today

Management is hosting a call today at 0900 BST for analysts. For dial in details please contact Tessa Gough-Allen at Camarco 0203 781 9245 or uog@camarco.co.uk

A shareholder call will take place at 1130 BST today. Investors that wish to participate in the event, please click on this link to register https://bit.ly/3MmMNgd

Confirmation email with the details of the dialling in process will be sent to your email address.

A presentation will be available today on www.uogplc.com .

**ENDS**

This announcement contains inside information for the purposes of Article 7 of Regulation 2014/596/EU which is part of domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit) regulations (SI 2019/310).

Enquiries
United Oil & Gas Plc (Company)
Brian Larkin, CEO	brian.larkin@uogplc.com
Sharan Dhami, Head of IR & ESG	sharan.dhami@uogplc.com

Beaumont Cornish Limited (Nominated Adviser)
Roland Cornish \| Felicity Geidt	+44 (0) 20 7628 3396

Tennyson Securities (Joint Broker)
Peter Krens	+44 (0) 20 7186 9030

Optiva Securities Limited (Joint Broker)
Christian Dennis	+44 (0) 20 3137 1902

Camarco (Financial PR)
Billy Clegg \| James Crothers \| Tessa Gough-Allen	+44 (0) 20 3757 4983 \| uog@camarco.co.uk

Notes to Editors

United Oil & Gas is a high growth oil and gas company with a portfolio of low-risk, cash generative production, development, appraisal and exploration assets across Egypt, UK and a high impact exploration licence in Jamaica.

The business is led by an experienced management team with a strong track record of growing full cycle businesses, partnered with established industry players and is well positioned to deliver future growth through portfolio optimisation and targeted acquisitions.

United Oil & Gas is listed on the AIM market of the London Stock Exchange. For further information on United Oil and Gas please visit www.uogplc.com

CHAIR'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

Dear Shareholders,

Introduction

I am pleased to report that in 2021 we took further steps to refocus the company into a cash generative, low-risk production business in Egypt complemented by high impact exploration opportunities.

Our production portfolio is delivering strong operational cashflow at current prices and I feel we are well placed to capitalise on the new opportunities we now see emerging across the industry and on our organic growth options.

In addition, in 2021 we strengthened our team in certain areas and I believe now have the capability to handle an asset base many times the current size without materially increasing our cost base.

Key activities in 2021

In Egypt, we continued the drilling successes of 2020 with a 100% success rate for the five exploration and development wells in the 2021 campaign. All of these wells encountered oil and were quickly brought into production, with the exploration successes further de-risking the upside on the licence. Our technical team continue to play a very important role in working closely with the operator and our Joint Venture (JV) partners in maximising the returns from these assets and realising their full potential.

While the revision in our production guidance for the Abu Sennan licence in September was disappointing, we are pleased that both the decline of the production and the increase in water-cut has been stable since September 2021. We will continue to work closely with the operator to monitor field performance and ensure that production from the field is optimise and new drilling opportunities are appropriately de-risked.

During the year, and consistent with our strategy, we took steps to divest our non-core assets in the UK Central North Sea (UK CNS) and in Italy, with a view to reinvesting the proceeds to support growth. The UK CNS transaction has now been terminated and we look forward to evaluating further commercialisation opportunities in what is now an area of significant development activity. The Italian asset divestment has completed (post-period end) and we were pleased to sign the settlement agreement on the Crown milestone payment accelerating the receipt of the milestone payment at a modest discount. The substantial proceeds raised from portfolio management will be reinvested in the business.

In Jamaica, following close consultations with the Government, we were awarded an extension of the Walton Morant licence to January 2024. This affords us the time to complete a comprehensive farmout process to attract the most suitable partners to work with ourselves and the Government of Jamaica to unlock the full potential of this highly prospective area.

Business development opportunities across the full cycle continued to be offered to and assessed by the team in the course of 2021, and a number of such opportunities are still under consideration. However, only the most attractive ones consistent with our strategy and investment criteria will be taken forward.

Board and governance

There were no changes to the Board in the year, and the Board and all Committees functioned effectively under their respective Chairs, despite not being able to meet physically until the last meetings of the year in December. An internal Board and Committee evaluation was carried out post-year end, the findings, and conclusions from which are reported in our 2021 Annual Report and Accounts.

I believe that we continue to have a good balance of technical, financial, commercial and governance experience on the Board and that the non-executive directors give appropriate support and challenge to the executives both at and outside of Board and Committee meetings.

Strategy

Our strategy remains clear: create value by actively managing our existing assets whilst growing our business through additional high-margin opportunities.

Financial results for 2021

I am very pleased to report to a profit after tax in 2021 of $4.1 With our production and revenues continuing strongly, and with operating costs in 2021 of $5.90 per barrel, we entered 2022 with an asset base resilient to low oil prices and with a strong balance sheet.

Post year end

Since year-end we have made further progress. We commenced production from the Al Jahraa-13 development well which was the last well in the 2021 drilling campaign. Our 2022 drilling campaign is fully funded from operating cashflow and includes five wells. The campaign commenced with the ASD-2 development well which encountered at least 25.5m of net pay and commenced production at the end of March. We were also pleased to report the agreement of the Crown milestone payment which will bring in $2.5m by the end of 2022 and the completion of the Italy asset divestment which resulted in payment to United of c. 2.2m.. The proceeds of both will be invested to grow the Group.

Impact of COVID-19

While COVID-19 had less of an impact on our activities in 2021 than in 2020, it continued to have some effect on the way in which we worked, our ability to travel freely and our interactions with employees, shareholders, and our other stakeholders. Despite this, I feel the company has come through this era well without significant disruption to our business and I'm pleased to report that all our staff are in good health.

Dialogue with shareholders

Shareholders' views on the company, its strategy, remuneration policy and indeed all aspects of our business and operations are very important to the Board and we welcome every opportunity to engage. We were particularly happy to have been able to meet a number of our shareholders in person in London last November and we look forward to further such meetings as COVID-19 restrictions begin to ease. However, we would be very happy to hear from you in whatever manner suits you best. I can be reached via the Company Secretary at info@uogplc.com.

Conclusion and outlook for 2022

2021 was another very successful year for the company in the development and pursuit of our strategy and I would like to record my thanks to our executives and staff for their continued commitment and energy throughout the year. We look forward very positively to the year ahead. The oil price has started the year high, we have a balanced full cycle portfolio, a fully funded drilling and work programme in Egypt, engagement with potential partners on the Jamaica farm-out, and we have exciting new opportunities under review.

Graham Martin

Chair

CEO'S STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

Dear Shareholders,

During 2021 United's focus has been to reshape the portfolio via divestment of non-core assets work with the Joint Venture (JV) partners to increase and proactively manage production from Abu Sennan, and further strengthen the business through the pursuit of organic and inorganic opportunities to build scale. We have also worked on moving forward the Jamaica farm-out process following the extension of the exploration licence and we continue to manage the business with a focus on capital and cost discipline.

COVID-19 and our response

The health, safety and wellbeing of our employees, contractors and all our stakeholders is a priority for United. As the global pandemic continued in 2021, the Joint Operating Company (JOC) in Egypt, continued with the measures in place to minimise the risk of any COVID-19 outbreak and procedures such that mitigation measure were in place to ensure the impact of any outbreak could be quickly contained. There was no disruption to the operations in Egypt. Our head office staff continued to work remotely in line with government directives with negligible disruption to our business.

Egypt success

Our Egyptian portfolio includes exploration, production, and development opportunities in the Abu Sennan licence. There are currently eight producing fields. Production in 2021 averaged 2,327 boepd (2020: 2,195 boepd). In 2021 we drilled five wells in total: two exploration and three development wells. The two exploration wells ASD-1X and AS1-1X were commercial discoveries and the JV partners were granted two new 20-year development leases covering the new discoveries. The development wells, ASH-3, AJ-8, and AJ-13 also encountered oil. All five wells were successful, replacing reserves and accelerating production of existing reserves. They were brought into production within short timeframes, adding immediate cashflow to the Company, and all of the wells demonstrated exceptionally short payback periods of 3-12 months. The sub-surface information gathered from the wells further de-risks future exploration. While JV partners had originally planned to drill four wells based on the success of the initial drilling programme and the increase in commodity price the JV partners added the AJ-13 development well to the programme making it the fifth and final well of the 2021 drilling campaign. This flexibility and adjustment to the drilling programme allows the JV partners to capitalise when oil prices are high and also allows us to adjust the drilling programme in a low oil-price environment.

Operational challenges and remedial work

Operationally 2021 was not without its challenges. In the latter part of 2021, the wells in one of the producing fields, ASH, started to experience an increase in the proportion of water to oil being produced (water-cut) and associated decline in production. As a result, the Company revised its full-year guidance for the Abu Sennan licence from 2,500-2,700 to 2,100-2,300 boepd. Although this was disappointing, the technical team now have more data and information on how the reservoir functions and can use this information to optimise future drill targets. Since the beginning of September 2021, decline of the production and the increase in water-cut has been stable, and United modestly exceeded the revised guidance. Electrical Submersible Pumps (ESP) will be installed in all three producing wells located in the ASH field as part of the 2022 work programme. The ESPs will be aiming to maintain the flow rates, optimise production and extend the life of field.

Refocusing our portfolio

I am pleased with the progress the Company has made during 2021. Following a review of the Company's portfolio we began the process to divest our non-core assets in Italy and the UK Central North Sea. Since year-end we have made further progress. We have completed the Italy divestment. We also agreed a settlement regarding the Crown milestone payment. These two transactions will bring in approximately $5m in aggregate and we will be re-investing the proceeds to support growth. We decided to terminate the UK CNS deal, and we look forward to evaluating further commercialisation opportunities in an area of significant development activity when oil prices are at a seven-year high.

The Company's portfolio is re-focused on the cash generative Egyptian producing asset and the high-impact exploration in Jamaica and a development asset in the UK, which gives us a strong platform for organic growth.

2022 production guidance

Average production for the first quarter of 2022 was 1,567 boped net, well within the guided range of 1,500-1,650 boepd for H1. The H1 production guidance range of 1,500-1,650 boepd has now been extended to the full-year 2022. A prudent approach has been taken to provide this full-year guidance, which includes production from the current wells declined in line with historic trends, production from Al Jahraa-14 commencing in Q3 and production from ASH-5 commencing in Q4. No production additions have been included for the two exploration wells that are planned for 2022.

Jamaica progress

We were delighted to report that United was granted a two-year extension to the Initial Exploration Period of the Walton Morant Licence, Jamaica, by the Jamaican Cabinet. The Initial Exploration period will now run to 31 January 2024. The support of the Government of Jamaica has been excellent and reflects our strong relationship and the positive outlook for the industry in Jamaica. United has done extensive technical work on this asset, which has over 2.4 billion barrels of unrisked oil potential and the basin-opening Colibri prospect at a drill-ready stage. The extension allows us to continue the farm-out process with confidence as we look for an investment partner(s) to unlock the vast potential in this region.

Environmental, Social, Governance

United is committed to conducting business in a safe and responsible manner to deliver long term growth. We are working with the operator in Egypt to identify, quantify and categorised our emissions. Once we establish a baseline, we will work with our JV partners to consider initiatives that may help to reduce emissions. Our community and social investment programmes focus on capacity building, health, and education. In 2021 United sponsored the Capacity Building Feature at the Upstream Technical Convention in Egypt. United also supporting the Al Amal mentorship programme for over 40 students.

Multiple Growth opportunities

United has several growth opportunities in its current portfolio and looks to complement this growth with inorganic growth to build scale. Egypt is a dynamic and growing economy, providing a stable business environment. In Egypt, we have an asset with high-quality oil production operations, development and exploration upside, and our current organic growth opportunities include near-term development from existing resources and low-risk exploration. The 2022 drilling programme has started and consists of both development and exploration wells. The exploration wells, ASF-1X and ASV-1X, will target combined mean recoverable resources estimated by United in excess of 10 mmbbls gross. This is five times the mean recoverable resources that the JV partners targeted in 2021. The two exploration wells that will be drilled in 2022 are part of a wider portfolio of over 20 exploration prospects and leads at Abu Sennan. We look forward to building on the impressive returns to date and optimising production from this licence in the years to come.

In Jamaica the sentiment to exploration and recovery of the investment cycle is returning due to higher commodity prices, the expectation that the energy transition will take time, and the recent discoveries in new basins such as Namibia and Morocco. We are encouraged by the interest shown in our farm-out process so far and we look forward to pursuing this significant opportunity.

Our people

Another year of the global pandemic has meant the lives of individuals across the globe continue to change in extraordinary ways. As variants of COVID-19 developed and lockdowns across the world occurred our colleagues had to keep adapting their working environments to working from home. I wish to add my own thanks to the staff at United for all their commitment, enthusiasm, and energy.

Outlook

We are focusing on near term-value adding activities in Egypt, which have potential to generate additional free cash flow, and on the longer-term prospects in Jamaica.

There are extensive growth opportunities remaining in the Abu Sennan licence, as demonstrated by the drilling success so far, and it has the potential to deliver large reserve and production upside.

Our Egypt production base continues to deliver operational cashflow, and this, combined with our portfolio management initiatives, ensure that United remains in a strong position to execute our strategy.

We enter 2022 as a producing, cash generative business, with a complementary portfolio of low-risk development and exploration in Egypt, with the potential of high impact exploration in Jamaica and a development asset in UK with commercialisation opportunities. We have had a great start to the year, with the encouraging result achieved on the first well in the 2022 drilling campaign. We were also pleased to finalise a Crown milestone settlement agreement and complete the divestment of our Italian assets which will bring in c.5m of proceeds.

United has a balanced portfolio, we have a constant focus on cost control, and careful investment of our capital to maximise returns for our stakeholders. With an entrepreneurial management team and a diverse, experienced Board, we can leverage on our extensive industry relationships and knowledge to use our refocused portfolio as a platform from which to grow the business through organic opportunities within our current portfolio and new business opportunities. We are confident that our continued focus on long-term growth will generate value for our shareholders. I would like to thank our shareholders and stakeholders for their continued support throughout the period.

Brian Larkin

Chief Executive Officer

REVIEW OF OPERATIONS

Introduction

T here was a significant amount of operational activity for United in 2021. In Egypt, the run of success experienced with the drill-bit since United acquired the licence continued, with successful results from all five of the wells drilled in 2021 - including two new exploration discoveries that were rapidly brought onstream. This brought the number of fields in production on the Abu Sennan licence up to eight, delivering record-high full-year average production of 2,327 boepd net.

In Jamaica, as well as the good progress that was made with the continuing work programme, the granting of a two -year extension to the Initial Exploration Period of the Walton Morant licence puts United in a strong position to take advantage of the positive sentiment that is returning to exploration and progressing the farm-down.

Egypt (22% non-operated working interest, operated by Kuwait Energy Egypt)

The Abu Sennan licence is located in the Western Desert, onshore Egypt, c.200km west of Cairo. United acquired its 22% working interest in the licence in April 2020. The licence offers low-risk development and exploration. The entirety of the Abu Sennan licence area of 644km² is covered by existing 3D seismic data, with multiple exploration prospects and leads identified in what has proven to be a prolific petroleum basin. There are eight producing fields the largest of which are the Al Jahraa and the ASH fields.

Production

F ull-year 2021 production averaged 2,327 boepd net (1,869 bopd oil and 458 boepd gas) (2020: 2,195 boepd), slightly above the production guidance of 2,100-2,300 issued on 6 September 2021.

This production is split between eight separate fields, and although there were issues with increased water-cut at the ASH field in the beginning of Q3 2021, production from Abu Sennan remained stable through the second part of Q3 and Q4.

2021 Abu Sennan work programme

The 2021 work programme at Abu Sennan consisted of five wells and six workovers. All five wells encountered oil and were quickly brought into production.

The drilling programme began with the ASH-3 development well. This reached total depth (TD) of 4,087m in February, and encountered 27.5m of net pay in the Alam El Bueib (AEB) reservoir. It was brought onstream at gross rates of over 3,000 bopd in early March, achieving payback in less than three months.

This was followed by the ASD-1X exploration well. This reached TD of 3,750m in March, and encountered 22m of net oil pay in Abu Roash, Bahariya and Kharita reservoirs. ASD-1X was announced as a commercial discovery on 4 May and after approval was granted from the Minister of Petroleum for the award of a 20-year development lease covering the new discovery, it was brought into production on 26 May with average flow-rates of c. 600 bopd, less than two months after the initial well results.

The third well in the 2021 drilling programme was the Al Jahraa-8 development well, which was side-tracked to a TD of 4,314m in July. The side-track encountered over 40m of net oil pay across three different reservoir units including over 30m of net pay in the Upper and Lower Bahariya reservoirs, significantly above pre-drill expectations. The well was brought onstream during August, with gross initial flow rates in excess of 950 boepd.

The fourth 2021 well was the ASX-1X exploration well. This reached TD of 4,272m in September, encountering over 10m of net pay in a new commercial discovery. Approval was granted from the Minister of Petroleum for the award of a 20-year development lease over the new discovery in October, and the Abu Roash C reservoir was brought onstream at an initial gross production rate of 870 bopd - just three weeks after the initial drilling results

A fifth well, the Al Jahraa-13 development well, was added to the 2021 programme in September. The well reached TD of 3,840m on the 15 December, and encountered 17.5m of net pay in the Upper and Lower Bahariya. The well was brought onstream on the 11 January 2022 at gross flow-rates of c.600bopd. This led to the Al Jahraa field becoming the largest producing field on the licence.

2022 work programme and production guidance

The 2022 approved work programme consists of five firm wells (three development and two exploration wells) and eight workovers. The fifth well was included in the programme following the results of ongoing technical studies and is planned to be the Al Jahraa-14 ("AJ-14") development well. The workovers planned for 2022 will include the installation of Electrical Submersible Pumps (ESPs) in all three producing wells located in the ASH field. The ESPs will be aiming to maintain the flow rates, optimise production and extend the life of field, and two of these have already been installed.

Seismic reprocessing of a 452km² area of the Abu Sennan 3D seismic volume is currently nearing completion. This reprocessing work will cover the ASH field and neighbouring AEB targets, as well as the ASF prospect (to be drilled in 2022). Additional seismic reprocessing in the north-east of the licence area is planned to be carried out later in 2022.

The drilling programme commenced in late January 2022 with the ASD-2 development well. This was drilled to test the north-western culmination of the ASD field discovered last year, and safely reached TD of 3,631m in March. The well encountered at least 25.5 metres of net pay and was brought onstream less than six days after completion at an initial gross rate of c. 2,100 bopd.

In March, United announced that the second well in the 2022 programme would be the ASV-1X exploration well, which spud on the 14 April. The ASV-1X exploration well is a high impact well, targeting unrisked mean recoverable resources estimated by United at c.2.6 mmbbls gross. The primary targets are Abu Roash reservoirs, similar to those currently in production at the Al Jahraa field. A secondary target will be tested at the deeper Kharita level.

This AJ-14 development well is planned to be the third well drilled in 2022. This will be followed by ASH-5, a development well to be drilled in the ASH field, targeting the prolific Alam El Bueib ( AEB) reservoirs that have so far delivered in excess of 3.5 million barrels of oil from the field.

Analysis of the ASH field incorporating the results of the ASH-3 well indicates a large in-place oil volume estimated by United to be in the range of 14-16 mmbbls gross, with significant potential remaining within the structure. Seismic reprocessing is currently underway to ensure that this development drilling is located optimally in the field.

The fifth and final well in the 2022 programme is the ASF-1X exploration well. The ASF-1X well has been high-graded by United, and will target unrisked mean recoverable resources estimated by United at c.8 mmbbls gross in the AEB and Abu Roash reservoirs to the south-west of the ASH field. The well location will be finalised using the reprocessed seismic data.

Jamaica (100% working interest)

In Jamaica, United holds a 100% working interest in the Walton Morant licence. This is a 22,400km² offshore exploration licence, located to the south of the island of Jamaica. It offers a high-impact frontier exploration opportunity with the potential to open an entirely new hydrocarbon frontier.

With extensive seismic data coverage, including 2,250km² of 3D data, numerous plays and prospects have already been identified and mapped across the area - leading to over 2.4 billion barrels unrisked mean prospective resources being assigned to the licence. Indeed, the drill-ready, high-impact Colibri prospect alone contains mean prospective resources of 406mmbbls.

The results of the work programme carried out in 2021 have enhanced understanding of regional source rock development, quantified the basin-wide potential, and demonstrated robust economics based on an independent assessment of viable development options for the high-graded Colibri prospect.

A formal farm-out campaign was launched in April 2021, assisted by Envoi, a specialist Upstream Acquisition and Divestment advisory group. In November 2021 United announced that the request for a two-year extension to the Initial Exploration Period of the Walton Morant Licence was granted by the Jamaican Cabinet. Final signature from the Ministry of Science, Energy and Technology to the amended Production Sharing Agreement was received in January 2022. The Initial Exploration period will now run to 31 January 2024.

The extension allows us to continue the farm-out process with confidence as we look for an investment partner(s) to unlock the vast potential in this region.

UK

Central North Sea (100% working interests) Licences P2480 (Zeta) and P2519 (Maria)

Licences P2480 (Zeta) and P2519 (Maria) cover a combined area of c.725km² in the Outer Moray Firth Basin of the UK Central North Sea (CNS).

Maria

Licence P2519 includes Blocks 15/18e and 15/19c and covers an area of c. 225 km². The licence contains the existing Maria discovery in the Forties Sandstone, drilled by Shell/Esso in 1976. United estimated as part of its licence application that Maria holds c. 6 mmboe mid-case recoverable resources. The P2519 Licence also contains two Jurassic discoveries, Brochel and Maol. Maol was drilled by Shell in 1987, and on test flowed at over 2,000 boepd.

Previous analysis suggests that the commercial threshold for oil developments with proximity to infrastructure in this part of the North Sea is c. 4-5 MMbbls, indicating that a viable development should be possible, and indeed these economics are likely to be further enhanced in light of the recent increase in commodity prices.

During the first- half of 2021 progress was made on the work programmes associated with the licences: new 3D seismic data was purchased and interpreted, with the initial mapping providing positive indications on the existing Maria, Brochel and Maol discoveries, and on the identified prospectivity, including Zeta, Dunvegan, and the deeper Jurassic targets.

In September 2021, the Company announced that it had entered into a binding sale and purchase agreement (SPA) with Quattro Energy Limited (Quattro) to sell its UK Central North Sea Licences. Completion of the sale was conditional on receipt of approval from the Oil and Gas Authority (OGA) and Quattro completing a fundraising process. OGA approval was received, however, Quattro did not complete a fundraising process by the long stop date (28 February 2022). In Mach 2022 United terminated the SPA with Quattro and have retained the licences as part of the Company's portfolio.

Both licences are located in a highly prospective area of the CNS, where there is significant development activity taking place. They are situated close to existing infrastructure as well as the Marigold and Yeoman discoveries, and the substantial Piper, MacCulloch and Claymore oil fields.

There are low-cost commitments on both licences, and with rising commodity prices and renewed activity in the nearby area United believes they each contain attractive investment opportunities. United look forward to progressing the commercialisation opportunities and potential partnerships the assets offer.

Waddock Cross (26.25% working interest, non-operator)

Licence PL090 containing the shut-in Waddock Cross Field is situated c. 11km to the east of Dorchester, in the onshore Wessex Basin, UK.

The operator, Egdon Resources U.K Limited has updated the modelling for the shut-in field, demonstrating that a possible phased redevelopment of Waddock Cross would be commercial. A Final Investment Decision is expected to be made by the end of 2022. Waddock Cross remains non-core, and United are continuing to review alternatives for this asset.

Italy (20% working interest, non-operator)

Selva

United has completed the sale of 100% of the share capital of UOG Italia Srl PXOG Marshall Limited, a subsidiary of Prospex Energy PLC (Prospex), for a consideration of 2.165m (c. $2.54m) with an effective date of 1 Jan 2021.

Health, Safety and Environment

While United had no field activity in 2021 in which we were the operator, we continued to work with our Joint Venture partners and as part of the Joint Operating Company (JOC) in Egypt. Measures were in place to minimise the risk of any COVID-19 outbreak and procedures were in place to ensure the impact of any outbreak could be quickly contained. There was no disruption to the operations in Egypt.

Our operator in Egypt maintained another year of zero Fatalities, Medical Treatment Cases, Restricted Work Injuries and a zero rate for Lost Time Injury frequency and Total recordable incidents frequency or environmental spills. There were three motor vehicle incidents with no harm to the drivers. All incidents were investigated, and lessons learned as appropriate and actions to prevent recurrence were implemented. There was also a fire incident, during the periodic maintenance of a plant generator by a contractor's technician. The trained team at the gas plant quickly controlled the fire using fire extinguishers. The preliminary investigation revealed that the fire caused by damaged insulation of the electric cable of the motor oil charging pump. The fire resulted in damage to the generator and minor injury on the hand of the contractor's technician. A detailed investigation will be carried out to understand mitigation measure and lessons learnt.

Group reserves and resources

Country	Egypt	Jamaica	UK	UK	UK	Total
Asset	Abu Sennan	Walton Morant	Maria	Zeta	Waddock Cross
Working Interest	22%	100%	100%	100%	26.25%
Net 2P Reserves (mmboe)	3.0¹					3.0
Net 2C Resources (mmboe)			6.1³		0.4⁴	6.5
Net Prospective Resources (mmboe)	10.4³	2,421²		27.5³	2.3³	2,461.2

¹ ERCE reserves report, April 2022. Reserves of 3.0 MMboe are Net Working Interest and do not represent the Net Entitlement share of future production legally accruing under the terms of the development and production contract

² GaffneyCline & Associates report, December 2020; Summation of Walton Morant Prospective Resources completed by United

³ Figures based on United interpretation and calculations

⁴ ERCE Competent Persons Report, December 2019

FINANCIAL REVIEW

Financial Strategy

United's Financial Strategy underpins the business strategy and is founded on three core principles: capital discipline, financial management and risk management. The existing portfolio is funded entirely from operating cashflow, and we have further strengthened the balance sheet since the start of 2022 via the refinancing of our prepaid swap facility, the agreement on the Crown milestone payment and the completion of our Italian divestment. Our balance sheet provides a stable platform for growth from both organic opportunities and via new business development opportunities. Our cash operating costs are low by industry standards and we are fully leveraged to benefit from the current high oil price environment.

Financial Results Summary	2021	2020¹
Net Average Production volumes (boepd)	2,327	2,195
Oil Price Realised ($/bbl)	68.90	37.76
Gas Price Realised ($/mmbtu)	2.63	2.63
Revenue	$19.2m	$9.1m²
Gross Profit	$12.2m	$2.5m

Cash operating cost per boe ³	$5.90	$5.77
Exploration costs written off	$0.4m	$0.3m
Impairment of property, plant and equipment	$0.6m	-
Profit after Tax	$4.1m	$.9m
Basic profit per share (cents)	0.64	0.15
Cash Capex	$5.5m	$2.5m
EBITDAX³	$13.6m	$3.5m
Operating Cashflow	$9.1m	$4.8m

¹ Amounts stated are for the 10 months from completion date of Egyptian Acquisition

² 22% interest net of government take

³ See Non-IFRS measure

Group Production and Commodity Prices

Total group working interest production 2021 was 2,327 boepd an increase of 6% for the year (2020 2,195 boepd for ten months). The Group's average realised oil price was $68.90/bbl representing an increase of 82% on the prior year, and the average (fixed) gas price was $2.63/mmbtu. Group revenue for the year totalled $19.2m representing an increase of 110% on the prior year largely down to higher commodity prices and also increased production. Revenues from the Abu Sennan concession are stated after accounting for government entitlements under the production sharing contract. Crude oil from Abu Sennan is sold as Western Desert Blend and the average discount to Brent was $1.85/bbl.

Group Operating Costs

Group cash operating costs were $4.9m (2020 $3.9m) an increase of $1.0m on the prior mainly due to an additional two months reported in 2021 and higher production during the year. The cash operating cost per barrel of $5.90/boe remains largely unchanged in 2021 (2020 $5.77/boe) which demonstrates the efficiency of our Egyptian assets.

Group DD&A

Group DD&A associated with producing and development assets amounted to $4.0m (2020; $2.6m). DD&A per boe is currently $4.70/boe.

Administrative Expenses

Administrative Expenses for the year totalled $3.4m (2020 $1.7m) Adjusting for the non-cash items under IFRS 2 Share Based Payment and IFRS 16 Leases, the administrative expense is $3m (2020:$1.4m). This included $0.4m on new venture activity relating to the evaluation of business development opportunities, a write-down of $0.39m relating to the Crown milestone agreement of $2.5m and the carried receivable was $2.85m a and a net impairment charge on development assets of $0.6m (2020: $Nil) relating to the Waddock Cross asset in the UK. The gain on non-current assets held for sale of $0.1m relates to the divestment of the Italian business

Divestments

During 2021 the Group signed conditional sale and purchase agreements (SPA's) for the disposal of the share capital of UOG Italia Srl for a consideration of 2.165m (c. $2.54m) with an effective date of 1 Jan 2021 and to sell its UK Central North Sea (UK CNS) Licences; P2480 and P2519 for a consideration of up to 3.2m (c $4.4m). On 28 February 2022 the SPA for the sale of the UKCN licences was terminated. The assets and liabilities of UOG Italia Srl are held as assets for sale on the balance sheet as at 31st December 2021. This divestment completed on 8 April 2022.

Derivative financial instrument

The Company's pre-payment facility with BP provided downside protection by effectively hedging a volume of bbls of oil at $60/bbl per month for a thirty-month term from March 2020 through to September 2022. As at 31 December 2021, an unrealised loss of $1.5m has been recognised as a result of oil price movements in the period. On January 31 2022, the Company and BP extended the maturity of this facility until 31 December 2023 to create further financial flexibility for the Company. The new terms provide downside protection at $70/bbl for a volume of bbls through to end December 2023.

Taxation and Other Income

The Egypt concession is subject to corporate income tax at the standard rate of 40.55%. However, responsibility for payment of corporate income taxes falls upon EGPC on behalf of UOG Egypt Pty Ltd. The Group records a tax charge with a corresponding increase in other income for the tax paid by EGPC on its behalf. Due to accumulated tax- deductible balances there was no tax due in the prior period.

Profit/loss post tax

The profit for the year from continuing operations and prior to any exceptional costs was $4m (2020: $0.9m).

Cash flow

Net cashflow from continuing operations amounted to $9.1 (2020: $4.8m). An increase/decrease of 90% compared to 2020. Cost control and liquidity management both served to protect the cashflows. A significant year end revenue receipt of $0.8m was not received at our bank until 2 January 2022 and hence is not reflected in the year end cash balance.

Capital investment

Total capital expenditure on continuing operations for the year amounted to $5.5m (2020 $2.5m); with $2.3m incurred on the two successful development wells, $2.7m on other exploration, development and infrastructure projects in Abu Sennan. The remaining $0.5m was invested in other assets across the remainder of the portfolio.

The company will continue to focus on capital discipline with 2022 capital investment largely directed at maximising value from the Group's producing assets. The Group's cash capital expenditure for the full year is forecasted to be approx.$6m, fully funded from existing operations, with circa $5.5m to be invested in Egypt and up to $0.5m across the other assets in the portfolio.

Balance sheet

Intangibles Assets additions during the period amounted to $3m and were then reduced by both a transfer of Exploration success wells at both ASD 1X and ASX 1X amounting to $2.5m in total, and the transfer of Italian assets for divestment to Assets Held for sale (AHFS), leaving a closing Intangibles Balance Sheet position of $5m comprised of $4.5m in Jamaica and $.5m on our North Sea assets (2020: $7.9m). Of the additions in 2021 $1.7m relates to the two exploration campaigns in Abu Sennan, $0.9m was spent in Jamaica on the Walton Morant licence and the remainder of the movement of $0.4m on other exploration assets within the portfolio. The movement in Property, Plant and Equipment was $4.4m which represents spend on the five well campaign , two exploration successes transferred from Intangibles, and two development wells plus additional facilities and workovers on the Abu Sennan producing assets in Egypt. Additions were $8.5m in total, offset by $4m of DD&A on a unit of production basis. Trade and other receivables amounted to $7.7m and included $5m of accrued income on oil and gas sales plus $2.5m relating to the Crown disposal milestone payment. Borrowings at year end were $3.8m.

Going concern

The Group's business activities, together with the factors likely to affect its future development, performance and position are set out in the Chair's statement and the Strategic Report.

United regularly monitors its business activities, financial position, cash flows and liquidity through detailed forecasts. Scenarios and sensitivities are also regularly presented to the Board, including changes in commodity prices and in production levels from the existing assets, plus other factors which could affect the Group's future performance and position. A base case forecast has been considered which uses budgeted commitments and prevailing forward curve assumptions for oil prices. The key assumptions and related sensitivities include a "Reasonable Worst Case" ("RWC") sensitivity where the Board has considered a scenario with significant aggregated downside, including a reduction in forecast production rates of 15%, a reduction in oil prices by 20% and an increase in forecast capital expenditure in Egypt by 10%.

Both the base case and RWC take into consideration the Crown Milestone Settlement Agreement for $2.5m and the completion of the Italian divestment for €2.2m in early 2022. The likelihood of all these downside sensitivities taking place simultaneously and lasting for the entire forecast period is considered to be remote. Under such a RWC scenario, we have identified appropriate mitigating actions, including the deferral of additional uncommitted capital expenditure, further divestment of the portfolio, restructuring of debt arrangements and adjustment of the Group cost base, which would be available to us and have been demonstrated as effective strategies in previous periods of low oil prices. Our business in Egypt remains robust given cash operating costs of less than $6/boe, flexible drilling contracts, downside price protection on our hedged volumes and gas contracts that are fixed price in nature. There are limited capital commitments in the other assets in our portfolio. The forecasts outlined above show that the Group will have sufficient financial headroom for the 12 months from the date of approval of the 2021 Accounts. Based on this analysis, the Directors have a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Therefore, they continue to use the going concern basis of accounting in preparing the annual Financial Statements.

Financial Outlook

United's financial strength is founded on our long-term approach to prudently managing capital to generate value. United has a streamlined portfolio of assets which are funded from operating cashflow. We have taken significant steps to strengthening our balance sheet and generate investment flexibility, via the completion of two of our asset divestments and extending the maturity on our pre-paid swap facility with the ongoing support of our debt provider BP. The measures that we have taken and the benefits of our stable low-cost production benefitting from the prevailing stronger commodity price environment ensures that o ur balance sheet provides a stable platform for growth from both organic and inorganic opportunities.

CONSOLIDATED INCOME STATEMENT

FOR THE YEAR ENDED 31 DECEMBER 2021

	Notes	Year to 31 December 2021	Year to 31 December 2020
		$	$

Revenue	2	19,228,698	9,053,657
Other income	2	1,940,574
Cost of sales	3	(8,911,815)	(6,505,011)

Gross profit		12,257,457	2,548,646

Administrative expenses:
Other administrative expenses		(1,763,362)	(1,589,529)
Impairment of intangible assets		(624,546)	(37,161)
Impairment of divestment receivable		(394,686)	-
Exploration and New Venture write offs		(377,934)	(307,557)
Foreign exchange (losses) / gains		(356,850)	189,918
Gain on non-current assets held for sale	13	118,651	-


Operating profit	4	8,858,730	804,317

Finance income	6	-	1,572,706
Finance expense	6	(2,922,754)	(1,580,842)

Profit before taxation		5,935,976	796,181

Taxation	7	(1,861,882)	56,480

Profit for the financial year attributable to the Company's equity shareholders		4,074,094	852,661


Earnings per share from continuing operations expressed in cents per share:	8
Basic		0.64	0.15
Diluted		0.62	0.14

Consolidated Statement of Comprehensive Income

	2021	2020
	$	$

Profit for the financial year	4,074,094	852,661
Foreign exchange (losses)/ gains	(209,164)	(337,713)

Total comprehensive income for the financial year attributable to the Company's equity shareholders	3,864,930	514,948

Consolidated Balance Sheet as at 31 December 2021

	Notes	2021	2020
Assets		$	$
Non-current assets
Intangible assets	10	4,970,091	7,891,743
Property, plant and equipment	11	17,990,809	13,607,167
		22,960,900	21,498,910

Non-current assets / assets in disposal groups held for sale	13	2,561,250	-
		25,522,150	21,498,910
Current assets
Inventory	14	145,570	35,729
Trade and other receivables	15	7,702,021	5,454,307
Cash and cash equivalents	16	397,308	2,188,902
		8,244,900	7,678,938
Current liabilities:
Trade and other payables	19	(5,422,734)	(2,996,115)
Derivative financial instruments	22	(1,346,044)	(992,681)
Borrowings	22	(2,422,212)	(2,133,655)
Lease liabilities	21	(83,368)	(94,050)
Current tax payable		(57,246)	(135,388)
		(9,331,604)	(6,351,889)
Non-current liabilities:
Borrowings	22	-	(2,422,146)
Derivative financial instruments	22	-	(647,376)
Lease liabilities	21	(24,494)	(96,787)
		(24,494)	(3,166,309)

Liabilities associated with assets in disposal groups held for sale	13	(116,048)	-

Net assets		24,294,904	19,659,650

Equity and liabilities
Capital and reserves
Share capital	17	8,416,182	8,138,619
Share premium	17	16,215,361	16,047,975
Share-based payment reserve	18	2,247,465	1,922,090
Merger reserve		(2,697,357)	(2,697,357)
Translation reserve		(558,104)	(348,940)
Retained earnings		671,357	(3,402,737)

Shareholders' funds		24,294,904	19,659,650

Consolidated Statement of Changes in Equity


	Share capital	Share premium	Share-based payments reserve	Retained earnings	Translation reserve	Merger reserve	Total
	$	$	$	$	$	$	$

For the year ended 31 December 2021
Balance at 1 January 2021	8,138,619	16,047,975	1,922,090	(3,402,737)	(348,940)	(2,697,357)	19,659,650
Profit for the year	-	-	-	4,074,094	-	-	4,074,094
Foreign exchange difference	-	-	-	-	(209,164)	-	(209,164)
Total comprehensive income	-	-	-	4,074,094	(209,164)	-	3,864,930
Shares issued	277,563	167,386	-	-	-	-	444,949
Share-based payments	-	-	325,375	-	-	-	325,375
Balance at 31 December 2021	8,416,182	16,215,361	2,247,465	671,357	(558,104)	(2,697,357)	24,294,904



For the year ended 31 December 2020
Balance at 1 January 2020	4,564,787	9,912,988	1,591,808	(4,255,398)	(11,227)	(2,697,357)	9,105,601
Loss for the year	-	-	-	852,661	-	-	852,661
Foreign exchange difference	-	-	-	-	(337,713)	-	(337,713)
Total comprehensive income	-	-	-	852,661	(337,713)	-	514,948
Shares issued	3,573,832	6,640,081	-	-	-	-	10,213,913
Share issue expenses	-	(505,094)	62,516	-	-	-	(442,578)
Share-based payments	-	-	267,766	-	-	-	267,766
Balance at 31 December 2020	8,138,619	16,047,975	1,922,090	(3,402,737)	(348,940)	(2,697,357)	19,659,650

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER

	2021	2020
	$	$
Cash flow from operating activities
Profit for the financial year before tax	5,935,976	796,181
Share-based payments	325,375	267,766
Depreciation	4,107,685	2,628,990
Amortisation	3,985	3,862
Fair value loss / (gain) on derivatives	1,527,250	(1,572,706)
Impairment of intangible assets	624,546	37,161
Gain on non-current assets / disposal groups held for sale	(118,651)	-
Loss on disposal of intangible assets	-	31,307
(Gain) / loss on disposal of property, plant and equipment	(25,683)	42,318
Interest expense	1,395,504	1,580,842
Foreign exchange movements	356,850	(189,918)
Tax paid	(1,940,574)	-

	12,192,263	3,625,803
Changes in working capital
(Increase) / decrease in inventory	(109,841)	64,433
(Increase) / decrease in trade and other receivables	(2,276,303)	2,530,065
Decrease in trade and other payables	(697,544)	(1,390,182)

Cash inflow from operating activities	9,108,575	4,830,119


Cash outflow from investing activities
Cash outflows on business combination	-	(11,200,000)
Cash acquired in business combination	-	46,543
Deposits received on disposal of non-current assets	160,404	-
Purchase of property, plant & equipment	(3,607,826)	(2,816,460)
Spend on exploration activities	(2,121,050)	(1,457,307)

Net cash used in investing activities	(5,568,472)	(15,427,224)

Cash flow from financing activities
Issue of ordinary shares net of expenses	444,949	5,835,834
Proceeds on issue of oil swap financing arrangement	-	7,760,288
Repayments on oil swap financing arrangement	(3,518,359)	(1,666,116)
Payments on oil price derivatives	(1,805,086)	(70,431)
Capital payments on lease	(68,914)	(73,183)
Interest paid on lease	(14,421)	(5,753)

Net cash (used in) / generated from financing activities	(4,961,831)	11,780,639


Net (decrease) / increase in cash and cash equivalents	(1,421,728)	1,183,534

Cash and cash equivalents at beginning of financial year	2,188,902	1,275,537
Effects of exchange rate changes	(369,866)	(270,169)


Cash and cash equivalents at end of financial year	397,308	2,188,902

Notes to the consolidated financial statements

1. Principal Accounting Policies

Going concern

Revenue

Revenue comprises invoiced sales of hydrocarbons to customers, excluding value added and similar taxes. Also disclosed within revenue is tariff income recognised, excluding value added and similar taxes, for gas transportation facilities provided to third parties.

Revenue is recognised at a point in time as control passes to the customer, which is typically the point of delivery of hydrocarbons. The Group does not have performance obligations subsequent to delivery.

Other Income - Tax Entitlement Volumes

Under the concession agreements in Egypt, income tax due on taxable profit is paid on the Group's behalf by EGPC. To achieve this through the agreements, the Group notionally receive a greater share of hydrocarbon production in excess of the Group's entitlement interest share of production equal to the amount required to cover the tax payable. The oil is produced and sold on the Group's behalf and proceeds remitted to the tax authorities. This income does not fall within the definition of revenue and is therefore shown as other income with an equal and opposite tax charge recorded through current taxation.

Foreign currency

Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the year-end date. All differences are taken to the Income Statement.

Assets and liabilities of subsidiaries that have a functional currency different from the presentation currency (US dollar), if any, are translated at the closing rate at the date of each balance sheet presented. Income and expenses are translated at average exchange rates. All resulting exchange differences are recognised in other comprehensive income (loss), if any.

Finance income and costs

Interest is recognised using the effective interest method which calculates the amortised cost of a financial asset or liability and allocates the interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts or payments through the expected life of the financial asset or liability to the net carrying amount of the financial asset or liability.

Exploration and evaluation assets

The group accounts for oil and gas expenditure under the full cost method of accounting.

Costs (other than payments to acquire the legal right to explore) incurred prior to acquiring the rights to explore are charged directly to the profit and loss account. All costs incurred after the rights to explore an area have been obtained, such as geological, geophysical, data costs and other direct costs of exploration and appraisal are accumulated and capitalised as intangible exploration and evaluation ("E&E") assets.

E&E costs are not amortised prior to the conclusion of appraisal activities. At the completion of appraisal activities if technical feasibility is demonstrated and commercial reserves are discovered, then following development sanction, the carrying value of the relevant E&E asset will be reclassified as a development and production asset within tangible fixed assets.

If after completion of appraisal activities in an area, it is not possible to determine technical feasibility or commercial viability, then the costs of such unsuccessful exploration and evaluation are impaired to the Income Statement. The costs associated with any wells which are abandoned are fully amortised when the abandonment decision is taken.

Development and production assets are accumulated generally on a field by-field basis and represent the costs of developing the commercial reserves discovered and bringing them into production, together with the E&E expenditures incurred in finding commercial reserves which have been transferred from intangible E&E assets.

The net book values of development and production assets are depreciated generally on a field-by-field basis using the unit of production method based on the commercial proven and probable reserves. Assets are not depreciated until production commences.

Depreciation of production assets

Production assets are accumulated into cash generating units (CGUs) and the net book values are depreciated on a prospective basis using the unit-of-production method by reference to the ratio of production in the year and the related economic commercial reserves, taking into account future development expenditures necessary to bring those reserves into production.

The gain or loss arising on disposal or scrapping of an asset is determined as the difference between the sales proceeds, net of selling costs, and the carrying amount of the asset and is recognised in the income statement.

Each asset's estimated useful life has been assessed with regard to both its own physical life limitations and the present assessment of economically recoverable reserves of the oil and gas asset at which the item is located, and to possible future variations in those assessments. Estimates of remaining useful lives are made on a regular basis for all oil and gas assets, machinery and equipment, with annual reassessments for major items. Changes in estimates which affect unit production calculations are accounted for prospectively.

Other intangible assets

Other intangible assets acquired separately from a business combination are capitalised at cost.

Intangible assets are amortised on a straight-line basis over their useful lives as follows:

Computer software 33%

The carrying value of intangible assets is assessed annually and any impairment is charged to the income statement.

Property, plant and equipment

Property, plant and equipment are stated at cost less depreciation. Depreciation is provided on a straight-line basis at rates calculated to write off the cost less the estimated residual value of each asset over its expected useful economic life. The residual value is the estimated amount that would currently be obtained from disposal of the asset if the asset were already of the age and in the condition expected at the end of its useful life.

The annual rate of depreciation for each class of depreciable asset is:

Computer equipment 33%

The carrying value of property plant and equipment is assessed annually and any impairment is charged to the income statement.

Non-current assets held for sale and disposal groups

Non-current assets and disposal groups are classified as held for sale when:

- They are available for immediate sale

- Management is committed to a plan to sell

- It is unlikely that significant changes to the plan will be made or that the plan will be withdrawn

- An active programme to locate a buyer has been initiated

- The asset or disposal group is being marketed at a reasonable price in relation to its fair value, and

- A sale is expected to complete within 12 months from the date of classification.

Non-current assets and disposal groups classified as held for sale are measured at the lower of:

- Their carrying amount immediately prior to being classified as held for sale in accordance with the Group's accounting policy; and

- Fair value less costs of disposal.

Following their classification as held for sale, non-current assets (including those in a disposal group) are not depreciated.

The results of operations disposed during the year are included in the consolidated statement of comprehensive income up to the date of disposal.

A discontinued operation is a component of the Group's business that represents a separate major line of business or geographical area of operations or is a subsidiary acquired exclusively with a view to resale, that has been disposed of, has been abandoned or that meets the criteria to be classified as held for sale.

Discontinued operations are presented in the consolidated statement of comprehensive income as a single line which comprises the post-tax profit or loss of the discontinued operation along with the post-tax gain or loss recognised on the re-measurement to fair value less costs to sell or on disposal of the assets or disposal groups constituting discontinued operations.

Impairment of non-financial assets

At each balance sheet date, the Directors review the carrying amounts of the Group's tangible and intangible assets, other than goodwill, to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss, if any. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset or cash-generating unit is reduced to its recoverable amount. If the recoverable amount of a cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit.

An impairment loss is recognised as an expense immediately.

An impairment loss recognised for goodwill is not reversed in subsequent periods.

Where an impairment loss subsequently reverses, the carrying amount of the asset or cash-generating unit is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset or cash-generating unit in prior periods. A reversal of an impairment loss is recognised in the Income Statement immediately.

Financial instruments

Recognition and derecognition

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions of the financial instrument.

Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire, or when the financial asset and substantially all the risks and rewards are transferred.

A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.

Classification and initial measurement of financial assets

Except for those trade receivables that do not contain a significant financing component and are measured at the transaction price in accordance with IFRS 15, all financial assets are initially measured at fair value adjusted for transaction costs (where applicable).

Financial assets are classified into the following categories:

· amortised cost

· fair value through profit or loss (FVTPL)

· fair value through other comprehensive income (FVOCI).

In the periods presented the Group does not have any financial assets categorised as FVOCI or FVTPL.

The classification is determined by both:

· the entity's business model for managing the financial asset

· the contractual cash flow characteristics of the financial asset.

Subsequent measurement of financial assets

Financial assets at amortised cost

Financial assets are measured at amortised cost if the assets meet the following conditions:

· they are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows; and

· the contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

After initial recognition, these are measured at amortised cost using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. The Group's cash and cash equivalents, trade and other receivables fall into this category of financial instruments.

Impairment of Financial Assets

In relation to the impairment of financial assets, IFRS 9 requires an expected credit loss model to be applied. The expected credit loss model requires the Group to account for expected credit losses and changes in those expected credit losses at each reporting date to reflect changes in credit risk since initial recognition of the financial assets.

IFRS 9 requires the Group to recognise a loss allowance for expected credit losses on trade receivables.

In particular, IFRS 9 requires the Group to measure the loss allowance for a financial instrument at an amount equal to the lifetime expected credit losses (ECL) if the credit risk on that financial instrument has increased significantly since initial recognition, or if the financial instrument is a purchased or originated credit‑impaired financial asset. However, if the credit risk on a financial instrument has not increased significantly since initial recognition, the Group is required to measure the loss allowance for that financial instrument at an amount equal to 12 months ECL.

Classification and measurement of financial liabilities

The Group's financial liabilities include borrowings, trade and other payables and embedded derivative financial instruments.

Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair value through profit or loss.

Subsequently, financial liabilities are measured at amortised cost using the effective interest method except for derivatives and financial liabilities designated at FVTPL, which are carried subsequently at fair value with gains or losses recognised in profit or loss.

All interest-related charges and, if applicable, changes in an instrument's fair value that are reported in profit or loss are included within finance costs or fair value gains/(losses) on derivative financial instruments.

Embedded derivative ﬁnancial instruments

A borrowing arrangement structured as a prepaid commodity swap with monthly repayments over 30 months has embedded in it a derivative that is indexed to the price of the commodity. This is considered to be a separable embedded derivative of a loan instrument.

At the date of issue, the fair value of the embedded derivative is estimated by considering the derivative as a series of forward contracts with modelling of the fixed and floating legs to determine a repayment schedule and derive a net present value for the forward contract embedded derivative.

This amount is recognised separately as a financial liability or financial asset and measured at fair value through the income statement. The residual amount of the loan is then recorded as a liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the instrument's maturity date.

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits held at call with banks and other short-term highly liquid investments with original maturities of three months or less.

Leases

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the lessee uses its incremental borrowing rate.

The lease liability is presented as a separate line in the statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:

· The lease term has changed in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

· The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

· A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, prepayments made on the lease at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset.

The depreciation starts at the commencement date of the lease.

Taxation

Current taxation for each taxable entity in the Group is based on the local taxable income at the local statutory tax rate enacted or substantively enacted at the balance sheet date and includes adjustments to tax payable or recoverable in respect of previous periods.

Deferred taxation

Deferred taxation is calculated using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. However, if the deferred tax arises from the 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, it is not accounted for. Deferred tax is determined using tax rates and laws that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred tax asset is realised, or the deferred tax liability is settled.

Deferred tax liabilities are provided in full.

Deferred tax assets are recognised to the extent that it is probable that future taxable profits will be available against which the temporary differences can be utilised.

Changes in deferred tax assets or liabilities are recognised as a component of tax expense in the Income Statement, except where they relate to items that are charged or credited directly to equity in which case the related deferred tax is also charged or credited directly to equity.

Deferred 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 tax assets and liabilities relate to taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

Share-based payments

Where share-based payments (warrants and options) have been granted, IFRS 2 has been applied whereby the fair value of the share-based payments is measured at the grant date and spread over the period during which they vest. A valuation model is used to assess the fair value, taking into account the terms and conditions attached to the share-based payments. The fair value at grant date is determined including the effect of market-based vesting conditions, to the extent such vesting conditions have a material impact.

The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance and/or service conditions are fulfilled, ending on the date on which the holders become fully entitled to the award ("the vesting date").

The cumulative expense recognised for equity settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group's best estimate of the number of equity instruments that will ultimately vest.

Where the terms of an equity-settled award are modified, the minimum expense recognised is the expense as if the terms had not been modified. An additional expense is recognised for any modification, which increases the total fair value of the share-based payment arrangement or is otherwise beneficial to the employee, as measured at the date of modification.

Where an equity-settled award (share options) is cancelled, it is treated as if it had vested on the date of cancellation if it had not yet fully vested, and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph.

Where an equity-settled award is forfeited, the cumulative charge expensed up to the date of forfeiture is credited to the Income Statement. Upon expiry of an equity-settled award, the cumulative charge expensed is transferred from the Share-based payment reserve to retained earnings.

Equity

Equity comprises the following:

· "Share capital" represents amounts subscribed for shares at nominal value.

· "Share premium" represents amounts subscribed for share capital, net of issue costs, in excess of nominal value.

· "Share-based payment reserve" represents the accumulated value of share-based payments.

· "Retained earnings" represents the accumulated profits and losses attributable to equity shareholders.

· "Translation reserve" represents the exchange differences arising from the translation of the financial statements of subsidiaries into the Group's presentational currency.

· "Merger reserve" represents amounts arising from statutory merger relief arising on business combinations.

New and amended International Financial Reporting Standards adopted by the Group

The Group has adopted the following standards, amendments to standards and interpretations which are effective for the first time this year. The impact is shown below:

New/Revised International Financial Reporting Standards		Effective Date: Annual periods beginning on or after:	UKEB adopted	Impact on the Group
Various	Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform - Phase 2	1 January 2021	Yes	No material impact

International Financial Reporting Standards in issue but not yet effective

At the date of authorisation of the consolidated financial statements, the IASB and IFRS Interpretations Committee have issued standards, interpretations and amendments which are applicable to the Group. For the next reporting period, applicable International Financial Reporting Standards will be those endorsed by the UK Endorsement Board (UKEB).

Whilst these standards and interpretations are not effective for, and have not been applied in the preparation of, these consolidated financial statements, the following could potentially have a material impact on the Group's financial statements going forward:

New/Revised International Financial Reporting Standards		Effective Date: Annual periods beginning on or after:	UKEB adopted
Various	Amendments to • IFRS 3 Business Combinations; • IAS 16 Property, Plant and Equipment; • IAS 37 Provisions, Contingent Liabilities and Contingent Assets • Annual Improvements 2018-2020	1 January 2022	No
IAS 12	Amendments to IAS 12: Deferred Tax relating to Assets and Liabilities arising from a Single Transaction	1 January 2023	No
IAS 1	Amendments to IAS 1: Classification of Liabilities as Current or Non-current and Classification of Liabilities as Current or Non-current	1 January 2024	No

New / revised International Financial Reporting Standards which are not considered to potentially have a material impact on the Group's financial statements going forwards have been excluded from the above.

Management anticipates that all relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. New standards, interpretations and amendments not listed above are not expected to have a material impact on the Group's financial statements.

Critical accounting judgements and key sources of estimation uncertainty

The preparation of financial statements in conformity with generally accepted accounting practice requires management to make estimates and judgements that affect the reported amounts of assets and liabilities as well as the disclosure of contingent assets and liabilities at the balance sheet date and the reported amounts of revenues and expenses during the reporting period.

Estimates and judgements 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.

The following are the key estimates used in applying the accounting policies of the Group that have the most significant effect on the financial statements:

Reserve Estimates

Reserves are estimates of the amount of product that can be economically and legally extracted from the Group's properties. In order to calculate the reserves, estimates and assumptions are required about a range of geological, technical and economic factors, including quantities, production techniques, recovery rates, production costs, transport costs, commodity demand, commodity prices and exchange rates.

Estimating the quantity and/or grade of reserves requires the size, shape and depth of fields to be determined by analysing geological data such as drilling samples. This process may require complex and difficult geological judgements and calculations to interpret the data.

Given that the economic assumptions used to estimate reserves change from year to year, and because additional geological data is generated during the course of operations, estimates of reserves may change from year to year. Changes in reported reserves may affect the Group's financial results and financial position in a number of ways, including the following:

• Asset carrying values may be affected by possible impairment due to adverse changes in estimated future cash flows;

• Depreciation, depletion and amortisation charged in the Income Statement may change where such charges are determined by the units of production basis, or where the useful economic lives of assets change.

Purchase Price Allocation

In the prior year Management used valuation techniques when determining the fair value of assets transferred and liabilities acquired in business combinations and the allocation of the purchase price thereto, which includes estimates to determine the valuation of assets.

Valuations prepared by an independent consultant taking into account risks involved in the business acquired were used to inform the purchase price allocation for the business combination in 2020.

Information regarding the purchase price allocations is disclosed in note 12.

Impairment of Property, Plant and Equipment

The Group assesses at each reporting date whether there is any indication that these assets may be impaired as indicated in note 11. If such indication exists, the Group estimates the recoverable amount of the asset. The recoverable amount is assessed by reference to the higher of 'value in use' (being the net present value of expected future cash flows of the relevant cash generating unit) and 'fair value less cost to sell'. The Group considers the quantities of the Proven and Probable Reserves, future production levels and future oil prices as well as other IAS 36 criteria in their assessment of indicators of impairment. The directors do not believe there are any indicators of impairment in respect of the assets.

Valuation of embedded derivatives within financial liability & standalone derivatives

In determining the value of both the embedded derivatives and standalone derivatives, the Group makes assumptions about future events and market conditions. The fair value is determined using a valuation model which is dependent on further estimates.

Such assumptions are based on publicly available information and are detailed further in note 22. Different assumptions about these factors to those made by the Group could materially affect the reported value of the embedded derivative liability.

As the financial liability is computed as the residual amount after deduction of the embedded derivative valuation, any material difference in the value of the embedded derivative liability on initial recognition would materially reduce (or increase) the loan financial liability thus increasing (or decreasing) the effective interest rate applicable.

The following are the significant judgements used in applying the accounting policies of the Group that have the most significant effect on the financial statements:

Impairment of exploration licences

Management reviews intangible exploration assets for indicators of impairment under IFRS 6 - Exploration for and Evaluation of Mineral Resources at the end of each reporting period. This review of assets for potential indicators of impairment requires judgement including whether renewal of licences is planned, interpretation of the results of exploration activity and the extent to which the Group plans to continue substantive expenditure on the assets. In determining whether substantive expenditure remains in the Group's plan, management considers factors including future oil prices, plans to develop or renew licences and future exploration plans. If impairment indicators exist the assets are tested for impairment and carried at the lower of the estimated recoverable amount and net book value.

Fair value of consideration in relation to Crown Disposal

Management have applied judgement in determining the consideration recognised for the Crown disposal in accordance with IFRS 5, including a receivable for milestone payment of $2.5m.

Notes to the Consolidated Financial Statements

2. Segmental reporting

Operating segments

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources, assessing the performance of the operating segment and making strategic decision, has been identified as the Board of Directors.

The Group operates in four geographic areas - the UK, Europe and greater Mediterranean, Latin America and Egypt. The Group's revenue from external customers and information about its non-current assets (other than financial instruments, investments accounted for using the equity method, deferred tax assets and post-employment benefit assets) by geographical location are detailed below.

2021
$	UK	Other EU	Latin America	Egypt	Total

Revenue	-	-	-	19,228,698	19,228,698
Other income	-	-	-	1,940,574	1,940,574

Non-current assets	505,963	2,518,642	4,460,303	17,921,194	25,406,102

2020
$	UK	Other EU	Latin America	Egypt	Total

Revenue	-	-	-	9,053,657	9,053,657

Non-current assets	779,323	2,833,287	3,602,178	14,284,122	21,498,910

3. Cost of sales

	2021	2020
	$	$

Production costs	4,906,713	3,941,743
Depreciation, depletion & amortisation	4,005,102	2,563,268

	8,911,815	6,505,011

4. Operating Profit/(loss)

	2021	2020
	$	$
Operating loss is stated after charging/(crediting):
Depreciation:
Owned assets	4,009,427	2,566,668
Right of use leased assets	98,258	62,322
Amortisation	3,985	3,862
Share based payments	325,375	267,766
Foreign exchange losses / (gains)	356,850	(189,918)
Fees payable to the Company's auditors for the audit of the annual financial statements	70,000	60,000

5. Directors and employees

The aggregate payroll costs of the employees, including Executive Directors and Non-Executive directors, were as follows:

	2021	2020
	$	$
Staff costs
Wages and salaries	1,939,014	1,700,487
Share-based payments	325,375	267,766
Pension	130,479	135,059
Social security	104,915	60,640

	2,499,783	2,163,952

Average monthly number of persons employed by the Group during the year was as follows:

	2021	2020
	Number	Number
By activity:
Administrative	7	6
Directors	6	6

	13	12

	2021	2020
	$	$
Remuneration of Directors
Emoluments and fees for qualifying services	890,604	1,149,729
Share-based payments	238,360	229,040
Pension	76,694	53,251
Social security	41,396	21,743

	1,247,054	1,453,763

Key management personnel are identified as the Executive Directors.

6. Finance income and expense

Finance income	2021	2020
	$	$

Fair value gain on derivatives	-	1,572,706

	-	1,572,706

Finance expense	2021	2020
	$	$

Fair value loss on derivatives	1,527,250	-
Effective interest on borrowings	1,381,083	1,576,607
Interest expense on lease liabilities	14,421	4,235

	2,922,754	1,580,842

7. Taxation

	2021	2020
	$	$
Profit before tax	5,935,976	796,181
Loss on ordinary activities multiplied by standard rate of corporation tax in the UK of 19% (2020: 19%)	1,127,835	151,274

Tax effects of:
Foreign tax	1,940,574	-
Adjustments in respect of prior periods	(78,692)	(56,480)
Utilisation of tax losses	(744,956)	(151,274)

Corporation tax charge/(credit)	1,861,882	(56,480)

The Group has accumulated UK tax losses of approximately $5.5m (2020: $8.0m). No deferred tax asset was recognised in respect of these accumulated tax losses as there is insufficient evidence that the amount will be recovered in future years.

8. Earnings per share

The Group has issued share warrants and options over Ordinary shares which could potentially dilute basic earnings per share in the future. Further details are given in note 18.

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

There were 113,697,454 (2020: 130,510,730) share warrants and options outstanding at the end of the year that could potentially dilute basic earnings per share in the future.

Basic and diluted earnings per share

	2021	2020
	Cents	Cents

Basic earnings per share from continuing operations	0.64	0.15

Diluted earnings per share from continuing operations	0.62	0.14

The profit and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows:

	2021	2020
	$	$
Profit used in the calculation of total basic and diluted earnings per share	4,074,094	852,661

Number of shares	2021	2020
	Number	Number

Weighted average number of ordinary shares for the purposes of basic earnings per share	637,482,325	578,248,726
Dilutive shares	24,871,644	23,207,377
Weighted average number of ordinary shares for the purposes of diluted earnings per share	662,353,969	601,456,103

9. Subsidiaries

Details of the Group's subsidiaries in 2021 are as follows:

Name & address of subsidiary	Principal activity	Class of shares	Place of incorporation and operation	% ownership held by the Group
				2021	2020

UOG Holdings plc 200 Strand, London, WC2R 1DJ	Intermediate holding company	Ordinary	England and Wales	100	100

UOG Ireland Limited* 9 Upper Pembroke Street, Dublin 2, Ireland	Intermediate holding company	Ordinary	Ireland	100	100

UOG PL090 Ltd* 200 Strand, London, WC2R 1DJ	Oil and gas exploration	Ordinary	England and Wales	100	100

UOG Italia Srl* Viale Gioacchino Rossini 9, 00198, Rome, Italy	Oil and gas exploration	Ordinary	Italy	100	100

UOG Jamaica Ltd* 200 Strand, London, WC2R 1DJ	Oil and gas exploration	Ordinary	England and Wales	100	100

UOG Crown Ltd* 200 Strand, London, WC2R 1DJ	Oil and gas exploration	Ordinary	England and Wales	100	100

UOG Colter Ltd* 200 Strand, London, WC2R 1DJ	Oil and gas exploration	Ordinary	England and Wales	100	100

UOG Egypt Pty	Oil and gas exploration	Ordinary	Australia	100	100

*held indirectly by United Oil & Gas Plc

10. Intangible assets

	Exploration and Evaluation assets $	Computer software $	Total $
Cost
At 1 January 2020	7,728,138	11,374	7,739,512
Acquired in business combinations	3,181,362	-	3,181,362
Additions	1,457,307	-	1,457,307
Transfer to production assets	(2,538,981)	-	(2,538,981)
Disposals	(31,307)	-	(31,307)
Foreign exchange differences	335,459	1,070	336,529

At 31 December 2020	10,131,978	12,444	10,144,422
Additions	3,013,536	-	3,013,536
Disposals	(2,576,724)	-	(2,576,724)
Transferred to non-current assets held for sale	(2,519,240)		(2,519,240)
Foreign exchange differences	(236,009)	(970)	(236,979)

At 31 December 2021	7,813,541	11,474	7,825,015

Amortisation and impairment
At 1 January 2020	2,158,648	-	2,158,648
Charge for the year	-	3,862	3,862
Impairment	37,161	-	37,161
Foreign exchange differences	52,722	286	53,008

At 31 December 2020	2,248,531	4,148	2,252,679
Charge for the year	-	3,985	3,985
Impairment	624,546	-	624,546
Foreign exchange differences	(25,803)	(483)	(26,286)

At 31 December 2021	2,847,274	7,650	2,854,924

Net book value
At 31 December 2021	4,966,267	3,824	4,970,091

At 31 December 2020	7,883,447	8,296	7,891,743

At 31 December 2021 the group's E&E carrying values of $5m related to our high impact exploration activity in Jamaica, and the UK North Sea exploration/development work programmes.

In Egypt United and its partners drilled, tested and took onstream two successful exploration wells in 2021, and as a result all exploration spend in Egypt to date has been transferred to PP&E as per the technical guidance of IFRS 6. Total was $2.5m transferred to PP&E in 2021.

In Jamaica technical work continues on the Work Programme to establish the development options on the Colibri prospect, in conjunction with a farm out process that continues to attract interest. In November 2021 a new exploration extension was granted taking the licence period out until end January 2024. At year end the carrying value of our exploration activity in Jamaica amounted to $4.5m.

In the UK North Sea the Company has Intangibles of $0.5m at year end, representing amount capitalised to date on the Maria discovery and Zeta exploration prospect. In 2021 we announced a binding sale and purchase agreement to sell these licences, an agreement that subsequently failed to complete and was announced in March 2022. We continue to review the options to commercialise the Maria discovery and in the meantime will continue with a work programme involving some Seismic data purchase, Rock physics and seismic inversion, and have a new CPR report later in the year.

The Company's Italian assets are now recategorized to Assets Held for sale (AHFS), at $2.6m having signed a conditional SPA with PXOG Marshall Limited, a subsidiary of Prospex Energy PLC (Prospex) for the sale of 100% of the share capital of UOG Italia Srl for a consideration of 2.165m (c. $2.54m) with an effective date of 1 Jan 2021.

Commitments on the Waddock Cross licence have stalled pending the outcome of some discussions with the operator to relinquish our 26.25% interest in the licence. Whilst the Operator continue the work programme by running some economics to better determine the numbers ahead of any well campaign, we believe at this stage full value most likely cannot be recovered in the medium term by the Company and as such the directors believed it prudent at this stage to impair the carrying value of $625k.

Management reviews the intangible exploration assets for indications of impairment at each balance sheet date based on IFRS 6 criteria such as where commercial reserves have not yet been established and the evaluation, exploration work is ongoing and a development plan has not been approved. The Directors believe the only impairment indicators relate to Waddock Cross (as described above) and have impaired all associated costs to date accordingly, with all remaining assets described continuing to be carried at cost.

11. Property, plant and equipment

	Production assets $	Computer equipment $	Fixtures and fittings $	Right of use asset $	Total $
Cost
At 1 January 2020	-	8,589		114,775	123,364
Acquired in business combinations	10,630,944	-	-	61,127	10,692,071
Transfer from E&E assets	2,538,981	-	-		2,538,981
Additions	2,806,734	6,755	2,971	204,763	3,021,223
Disposals	-	-	-	(186,700)	(186,700)
Foreign exchange differences	-	(1,638)	-	10,799	9,161

At 31 December 2020	15,976,659	13,706	2,971	204,764	16,198,100
Transfer from production assets	2,576,724	-	-	-	2,576,724
Additions	5,900,375	-	-	42,951	5,943,326
Disposals	-	-	-	(43,862)	(43,862)
Foreign exchange differences	-	(1,068)	(231)	(13,820)	(15,119)

At 31 December 2021	24,453,758	12,638	2,740	190,033	24,659,169

Depreciation
At 1 January 2020	-	5,812	-	90,830	96,642
Charge for the year	2,563,268	3,169	231	62,322	2,628,990
Disposals	-	-	-	(144,382)	(144,382)
Foreign exchange differences	-	(1,665)	17	11,331	9,683

At 31 December 2020	2,563,268	7,316	248	20,101	2,590,933
Charge for the year	4,005,103	3,373	951	98,258	4,107,685
Disposals	-	-	-	(16,625)	(16,625)
Foreign exchange differences	-	(706)	(57)	(12,870)	(13,633)

At 31 December 2021	6,568,371	9,983	1,142	88,864	6,668,360

Net book value
At 31 December 2021	17,885,387	2,655	1,598	101,169	17,990,809

At 31 December 2020	13,413,391	6,390	2,723	184,663	13,607,167

Depreciation is recognised within administrative expenses.

Management reviews the property, plant and equipment for indications of impairment at each balance sheet date in accordance with IAS 36. No indications of impairment have been identified at either 31 December 2021 or 31 December 2020.

12. Business combinations

On 28 February 2020, the company announced that it had completed the acquisition of 100% of the equity share capital of UOG Egypt Pty Ltd (formerly Rockhopper Egypt Pty Ltd). from Rockhopper Exploration plc ("Rockhopper").

The Acquisition, which had an effective date of 1 January 2019, included a 22% non-operating interest in the producing Abu Sennan concession, onshore Egypt. The consideration payable to Rockhopper for the Acquisition was US$16 million which was funded by:

· the issue to Rockhopper of 114,503,817 Consideration Shares at 3 pence per Ordinary Share representing 18.5% of the Company's Enlarged Ordinary Share Capital,

· a pre-payment financing structure of US$8 million provided by BP ('the BP Facility') and

· the issue of 150,616,669 Placing Shares at 3 pence per share with certain existing and new investors and 8,419,498 Subscription Shares also at 3 pence per share.

No goodwill has been recognised on the acquisition because the fair value of the identifiable net assets was the same as the fair value of the consideration transferred, as shown in the table below.

		$
Fair value of consideration transferred
Cash		11,500,000
Liabilities assumed		3,259,090
Shares issued		3,933,276
		18,692,366
Recognised amounts of identifiable net assets
Intangible assets		3,181,362
Property, plant and equipment		10,692,071
Total non-current assets		13,873,433
Inventory		100,162
Trade and other receivables		4,759,717
Cash at bank and in hand		46,543
Total current assets		4,906,422
Trade and other payables		(25,337)
Lease liabilities		(62,152)
Total current liabilities		(87,489)


Fair value of net assets acquired		18,692,366

The fair value of acquired receivables was equal to the contractual amounts receivable and all cash flows were collected.

	$
Net cash outflow on acquisition of subsidiary
Consideration paid in cash	11,500,000
Less: cash and cash equivalent balances acquired	(46,543)
Total	11,453,457

Post-acquisition contribution

The acquisition of UOG Egypt contributed $9,053,657 revenue and $2,136,680 profit to the Group's results for the year acquired.

If UOG Egypt had been acquired on 1 January 2020, revenue of the Group for the year would have been $11,192,276 and profit for the year would have been $5,754,327

13. Non-current assets and disposal groups held for sale

On the 11^th April 2022 United announced the completion of the sale of 100% of the share capital of UOG Italia Srl to PXOG Marshall Limited, a subsidiary of Prospex Energy PLC (Prospex), for a consideration of 2,164,701 (c. $2.54m)

Assets and liabilities held for sale

The following major classes of assets and liabilities relating to these operations have been classified as held for sale in the consolidated balance sheet at 31 December 2021:

	UOG Italia $	Elimination of inter-company payables $	Fair value adjustment $	Total held for sale $

Intangible assets	2,519,240	-	12,914	2,532,154
Trade and other receivables	28,588	-	-	28,58
Cash at bank and in hand	508	-	-	508
Assets held for sale	2,548,336	-	12,914	2,561,250

Trade and other payables	(2,456,775)	2,340,727	-	(116,048)
Liabilities held for sale	(2,456,775)	2,340,727	-	(116,048)

Fair value measurement

The fair value of the net assets of $2,445,202 are categorised as level 3 non-recurring fair value measurements.

The fair valuations have been determined by reference to signed disposal agreements, in relation to which non-refundable deposits have been received.

Gain on disposal

The net gain on disposal recognised in the income statement is comprised of:

	$

Gain on disposal of UOG Italia net of disposal expenses incurred	233,357
Loss on aborted North Sea Quattro disposal	(114,706)

	118,651

14. Inventory

	2021	2020
	$	$

Oil in tanks	145,570	35,729

	145,570	35,729

15. Trade and other receivables

	2021	2020
	$	$


Trade receivables	2,257,609	-
Other tax receivables	71,764	77,529
Prepayments	7,361	7,984
Contract assets	2,865,287	2,518,794
Crown disposal proceeds due	2,500,000	2,850,000

	7,702,021	5,454,307

The Directors consider that the carrying values of trade and other receivables are approximate to their fair values.

No expected credit losses exist in relation to the Group's receivables as at 31 December 2021 (2020: $nil).

Contract assets relate to two months Oil & and three months Gas invoices for the Abu Sennan producing assets in Egypt under the receivable terms of the agreement with EGPC.

Crown disposal proceeds due are being carried at the full value expected to be received.

16. Cash and cash equivalents

	2021	2020
	$	$

Cash at bank (GBP)	50,831	132,913
Cash at bank (EUR)	16,286	25,561
Cash at bank (USD)	3,226	16,980
Cash at bank (EGY)	326,965	2,013,448

	397,308	2,188,902

At 31 December 2021 and 2020 all significant cash and cash equivalents were deposited in creditworthy financial institutions in UK, Ireland and Egypt.

17. Share capital, share premium and merger reserve

Allotted, issued, and fully paid:

			2021
		Share capital	Share premium
	No	$	$
Ordinary shares of £0.01 each
At 1 January 2021	625,153,969	8,138,619	16,047,975

Allotments:
Shares issued for cash (exercise of warrants)	19,650,000	277,563	167,386

At 31 December 2021	644,803,969	8,416,182	16,215,361

			2020
		Share capital	Share premium
	No	$	$
Ordinary shares of £0.01 each
At 1 January 2020	345,613,985	4,564,787	9,912,988

Allotments:
Shares issued in consideration for business combination	114,503,817	1,463,002	2,470,274
Shares issued for cash	159,036,167	2,031,987	4,051,541
Shares issued for cash (exercise of warrants)	6,000,000	78,843	118,266
Share issue expenses	-	-	(505,094)

At 31 December 2020	625,153,969	8,138,619	16,047,975

As regards income and capital distributions, all categories of shares rank pari passu as if the same constituted one class of share.

18. Share-based payments

Share Options

Details of the number of share options and the weighted average exercise price (WAEP) outstanding during the year are as follows:

2021
	Number of Options	WAEP £

Outstanding at the beginning of the year	46,767,690	0.04
Issued	3,939,665	0.04
Expired	(1,102,941)	0.04

Outstanding at the year end	49,604,414	0.04


Number vested and exercisable at 31 December 2021	-	-

2020
	Number of Options	WAEP £

Outstanding at the beginning of the year	11,117,647	0.05
Issued	35,650,043	0.04

Outstanding at the year end	46,767,690	0.04


Number vested and exercisable at 31 December 2020	-	-

The fair values of share options issued in the current and previous financial year were calculated using the Black Scholes model as follows:

	Share options	Share options	Share options	Share options	Share options	Share options	Share options
Date of grant	1 Aug 2021	4 Jan 2021	27 Oct 2020	29 Sep 2020	1 July 2020	17 June 2020	20 March 2020
Number granted	2,597,403	1,342,282	1,481,481	1,565,741	6,107,843	14,767,500	8,060,811
Share price at date of grant	£0.04	£0.03	£0.03	£0.03	£0.03	£0.03	£0.01
Exercise price	£0.04	£0.03	£0.03	£0.03	£0.03	£0.04	£0.04
Expected volatility	59,25%	83.28%	85.31%	85.27%	82.66%	82.01%	65.31%
Expected life from date of grant (years)	6.5	6.5	6.5	6.5	6.5	6.5	6.5
Risk free rate	0.2867%	-0.0678%	-0.0384%	-0.0821%	-0.0280%	-0.0322%	0.2543%
Expected dividend yield	0%	0%	0%	0%	0%	0%	0%
Fair value at date of grant	£0.021	£0.021	£0.018	£0.019	£0.018	£0.019	£0.004
Earliest vesting date	1 Aug 2024	4 Jan 2024	27 Oct 2023	29 Sep 2023	1 July 2023	17 June 2023	20 March 2023
Expiry date	1 Aug 2031	4 Jan 2031	27 Oct 2030	29 Sep 2030	1 July 2030	17 June 2030	20 March 2030

Expected volatility was determined based on the historic volatility of the Company's shares for a period averaging 1 year. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The Group recognised total expenses of $325,375 (2020: $267,766) in the income statement in relation to share options accounted for as equity-settled share-based payment transactions during the year.

Warrants

Details of the number of share warrants and the weighted average exercise price (WAEP) outstanding during the year are as follows:

2021
	Number of Warrants	WAEP £

Outstanding at the beginning of the year	83,743,040	0.04
Exercised	(19,650,000)	0.02

Outstanding at the year end	64,093,040	0.05


Number vested and exercisable at 31 December 2021	64,093,040	-

2020
	Number of Warrants	WAEP £

Outstanding at the beginning of the year	82,212,206	0.04
Issued	7,530,834	0.03
Exercised	(6,000,000)	0.03

Outstanding at the year end	83,743,040	0.04


Number vested and exercisable at 31 December 2020	83,743,040	0.04

The fair values of share warrants issued or extended in the current and previous financial year were calculated using the Black Scholes model as follows:

			Share warrants
Date of grant			28 Feb 2020
Number granted			7,530,834
Share price at date of grant			£0.03
Exercise price			£0.03
Expected volatility			49.57%
Expected life from date of grant (years)			1.5
Risk free rate			0.2813%
Expected dividend yield			0%
Fair value / incremental fair value at date of grant			£0.0064
Earliest vesting date			28 Feb 2020

Expected volatility was determined based on the historic volatility of a comparable company's shares for a period averaging 1 year. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability, exercise restrictions and behavioural considerations.

The Group recognised total expenses of $nil (2020: $62,516) in relation to share warrants accounted for as equity-settled share-based payment transactions during the year in relation. These were recognised as follows:

$nil (2020: $62,516) as a deduction from share premium related to share warrants accounted for as equity-settled share-based payment transactions during the year.

19. Trade and other payables

	2021	2020
	$	$

Trade payables	1,180,088	836,759
Other payables	1,599,414	1,431,078
Deferred shares (note 20)	40,476	40,739
Accruals	2,602,756	687,539

	5,422,734	2,996,115

20. Deferred shares

On 12 October 2015, the Company issued 30,000 Deferred Shares of £1 for £30,000 to the founder, which have an entitlement to a non-cumulative annual dividend at a fixed rate of 0.1 per cent of their nominal value. The Deferred Shares have no voting rights attached to them and may be redeemed in their entirety by the Company for an aggregate redemption payment of £1.

21. Leases

Right of use assets

The Group used leasing arrangements relating to property, plant and equipment. As the Group has the right of use of the asset for the duration of the lease arrangement, a "right of use" asset is recognised within property, plant and equipment.

When a lease begins, a liability and right of use asset are recognised based on the present value of future lease payments.

	2021	2020
	$	$

Interest expense on lease liabilities	14,421	4,235
Total cash outflow for leases	(83,335)	(78,936)

Additions to right-of-use assets	42,951	265,890
Disposals from right-of-use assets	(27,237)	(42,318)
Depreciation charge - right of use assets	(98,258)	(62,322)
Foreign exchange movement on right of use assets	(949)	(532)
Right of use assets - carrying amount at the beginning of the year:	184,663	23,945

Carrying amount at the end of the year:	101,169	184,663

Lease liabilities

	2021	2020
	$	$

Current	83,368	94,050
Non-current	24,494	96,787

	107,862	190,837

22. Borrowings and derivatives

Amounts payable on borrowings held by the Group falling due within one year and in more than one year are:

	2021	2020
	$	$
Secured - at amortised cost
Other loans	2,422,212	4,555,801


Current	2,422,212	2,133,655
Non-current	-	2,422,146

	2,422,212	4,555,801

	2021	2020
	$	$
Separated embedded derivative
· Loan derivative liability (current)	1,346,044	904,702
· Loan derivative liability (non-current)	-	647,376
·
·	1,346,044	1,552,078
· Other derivative financial instruments
· Hedge derivative liability (current)	-	87,979
·

Summary of borrowing arrangements:

In February 2020, the Group entered into a prepaid commodity swap arrangement for $8 million to part-finance the acquisition of Rockhopper Egypt Pty Ltd. The repayment schedule provided for 30 monthly repayments which were structured as a fixed notional amount with variations based on movements in oil prices with a cap. During 2020 modifications were agreed to the loan whereby there was a three-month period where payments were suspended and the deferred amounts were rolled into payments in the final 12 months of the loan.

Due to the price structure, the arrangement includes an embedded derivative (a forward contract). For financial reporting purposes, this must be separately accounted for at fair value at each balance sheet date. The balance of proceeds that did not relate to the derivative were treated as the opening carrying amount of the loan which will then be measured at amortised cost over its life, with finance charges recognised to give an even return over the loan life and repayments of capital allocated appropriately.

As at 31 December 2021, a fair value loss has been recognised (as finance expense) as a result of oil price movements in the period and on forward price rates.

In January 2022 the Group extended the final maturity date on the facility from 30 September 2022 to 31 December 2023.

The valuations of the host debt and derivative on initial recognition and valuation of the remaining embedded derivative as at 31 December 2021 were undertaken using data provided by independent third parties.

The fair value of the contracts has been estimated using a valuation technique that maximises the use of observable market inputs. These are classified as Level 2 in the fair value hierarchy (see note 23).

Reconciliation of liabilities arising from financing activities

2021

	At 1 January 2021	Cash received	Interest accrued	Repaid in cash	Fair value movements	FX movements	At 31 December 2021
	$	$	$	$	$	$	$

Loan	4,555,801	-	1,381,083	(3,518,359)	-	3,687	2,422,212
Embedded derivative	1,552,078	-	-	(1,666,975)	1,477,118	(16,177)	1,346,044
Derivative	87,979	-	-	(138,111)	50,132	-	-


	6,195,858	-	1,381,083	(5,323,445)	1,527,250	(12,490)	3,768,256

2020

	At 1 January 2020	Cash received	Interest accrued	Repaid in cash	Fair value movements	FX movements	At 31 December 2020
	$	$	$	$	$	$	$

Loan	-	4,853,381	1,576,607	(1,866,712)	-	(7,475)	4,555,801
Embedded derivative	-	2,906,907	-	200,596	(1,731,116)	175,691	1,552,078
Derivative	-	-	-	(70,431)	158,410	-	87,979


	-	7,760,288	1,576,607	(1,736,547)	(1,572,706)	168,216	6,195,858

Fair value movements are recognised in finance income (see note 6).

23. Financial instruments

Classification of financial instruments

The fair value hierarchy groups financial assets and liabilities into three levels based on the significance of inputs used in measuring the fair value of the financial assets and liabilities.

The fair value hierarchy has the following levels:

Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;

Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices); and

Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The level within which the financial asset or liability is classified is determined based on the lowest level of significant input to the fair value measurement.

The only financial instruments measured at fair value in the balance sheet are the embedded derivatives and standalone derivatives which are classified as Level 2 according to the above definitions. There were no transfers in or out of Level 2 in the year.

There are no financial instruments classified at Level 1 or Level 3 in the years presented.

The tables below set out the Group's accounting classification of each class of its financial assets and liabilities.

Financial assets measured at amortised cost	2021	2020
	$	$


Trade receivables (note 15)	2,257,609	-
Contract assets (note 15)	2,865,287	2,518,794
Crown disposal proceeds due (note 15)	2,500,000	2,850,000
Cash and cash equivalents (note 16)	397,308	2,188,902

	8,020,204	7,557,696

All of the above financial assets' carrying values are approximate to their fair values, as at 31 December 2021 and 2020.

Financial liabilities

	Measured at amortised cost
	2021	2020
	$	$

Trade payables (note 19)	1,180,088	836,759
Other payables (note 19)	1,599,414	1,431,078
Lease liabilities (note 21)	107,862	190,837
Borrowings (note 22)	2,422,212	4,555,801
Accruals (note 19)	2,602,756	687,539

	7,912,332	7,702,014

In the view of management, all of the above financial liabilities' carrying values approximate to their fair values as at 31 December 2021 and 2020.

	Measured at fair value through profit or loss
	2021	2020
	$	$

Derivative financial instruments (note 22)	1,346,044	1,640,057

	1,346,044	1,640,057

Fair value measurements

This note provides information about how the Group determines fair values of various financial assets and financial liabilities.

Fair value of financial assets and financial liabilities that are not measured at fair value on a recurring basis

The directors consider that the carrying amounts of financial assets and financial liabilities recognised in the consolidated financial statements approximate their fair values (due to their nature and short times to maturity).

Fair value of financial liabilities that are measured at fair value on a recurring basis

The fair value of derivative financial instruments has been estimated using a valuation technique that maximises the use of observable market inputs.

24. Financial instrument risk exposure and management

The Group's operations expose it to degrees of financial risk that include liquidity risk, credit risk, interest rate risk.

This note describes the Group's objectives, policies and process for managing those risks and the methods used to measure them. Further quantitative information in respect of these risks is presented in notes 15, 16, 19, 21, 22, 23 and 25.

Liquidity risk

Liquidity risk is dealt with in note 25 of these financial statements.

Credit risk

The Group's credit risk is primarily attributable to its cash balances.

The credit risk on liquid funds is limited because the third parties are large international banks with a minimum investment grade credit rating.

The Group's total credit risk amounts to the total of other receivables and cash and cash equivalents. Credit assessments are routinely reviewed on all of the Group's joint venture partners and other counterparties.

Interest rate risk

The Group's only exposure to interest rate risk is the interest received on the cash held on deposit, which is immaterial. The Group's borrowings outstanding at 31 December 2021 and 31 December 2020 are structured in such a way, through the use of a pre-paid commodity swap, so that the notional interest charge is fixed and therefore there is no interest rate risk.

Commodity Price risk

The company manages its exposure to commodity price risk on an ongoing basis. As described in note 12, the loan for the acquisition of Rockhopper Egypt also involved a derivative arrangement to manage the exposure arising from having the loan payments based on oil quantities rather than a fixed cash price. The combined put and call arrangements provide the group with protection against price movements on either side of a protected collar.

Foreign exchange risk

The Group is exposed to foreign exchange movements on monetary assets and liabilities denominated in currencies other than USD. The Group's transactions are carried out in GBP, EUR and USD.. Operational transactions are carried out predominantly in USD but also in GBP, EUR and EGP.

The monetary assets and liabilities denominated in currencies other than USD are relatively immaterial (see notes 15 and 16) and transactional risk is considered manageable.

The Group does not hold material non-domestic balances and currently does not consider it necessary to take any action to mitigate foreign exchange risk due to the immateriality of that risk.

25. Liquidity risk

Prudent liquidity risk management includes maintaining sufficient cash balances to ensure the Group can meet liabilities as they fall due.

In managing liquidity risk, the main objective of the Group is therefore to ensure that it has the ability to pay all of its liabilities as they fall due. The Group monitors its levels of working capital to ensure that it can meet its debt repayments as they fall due. The table below shows the undiscounted cash flows on the Group's financial liabilities as at 31 December 2021 and 2020, on the basis of their earliest possible contractual maturity.

	Total	Payable on demand	Within 2 months	Within 2 -6 months	Within 6 - 12 months	Within 1-2 years	Within 2-5 years
	$	$	$	$	$	$	$

At 31 December 2021
Trade payables	1,180,088	-	1,180,088	-	-	-	-
Other payables	1,599,414	1,599,414	-	-	-	-	-
Lease liabilities	116,359	-	18,526	33,250	37,813	17,568	9,202
Borrowings	2,769,947	-	692,487	1,384,973	692,487	-	-
Derivative financial instruments	1,346,044	-	-	-	1,346,044	-	-
Accruals	2,602,756	-	-	2,602,756	-	-	-

	9,614,608	1,599,414	1,891,101	4,020,979	2,076,344	17,568	9,202

	Total	Payable on demand	Within 2 months	Within 2 -6 months	Within 6 - 12 months	Within 1-2 years	Within 2-5 years
	$	$	$	$	$	$	$

At 31 December 2020
Trade payables	836,759	-	836,759	-	-	-	-
Other payables	1,431,078	1,431,078	-	-	-	-	-
Lease liabilities	210,007	-	22,081	31,937	54,630	93,963	7,396
Borrowings	6,288,305	-	533,346	1,066,692	1,918,320	2,769,947	-
Derivative financial instruments	87,980	-	-	-	87,980	-	-
Accruals	687,539	-	-	687,539	-	-	-

	9,541,668	1,431,078	1,392,186	1,786,168	2,060,930	2,863,910	7,396

26. Capital management

The Group's capital management objectives are:

· To provide long-term returns to shareholders

· To ensure the Group's ability to continue as a going concern

The Group defines and monitors capital on the basis of the carrying amount of equity plus borrowings less cash and cash equivalents as presented on the face of the balance sheet and as follows:

	2021	2020
	$	$

Equity	24,294,904	19,659,650
Borrowings	2,422,212	4,555,801
Cash and cash equivalents	(397,308)	(2,188,902)

	26,319,808	22,026,549

The Board of Directors monitors the level of capital as compared to the Group's commitments and adjusts the level of capital as is determined to be necessary by issuing new shares. The Group is not subject to any externally imposed capital requirements.

These policies have not changed in the year. The Directors believe that they have been able to meet their objectives in managing the capital of the Group.

27. Related party transactions

Key management personnel are identified as the Executive Directors, and their remuneration is disclosed in note 5.

28. Financial commitments

As at 31 December 2021, the Group's commitments comprise their producing assets and exploration expenditure in Egypt, and exploration expenditure in the Walton-Morant licence. These commitments have been summarised below:

Exploration/Production licence	Year ending 31 December 2021	Year ending 31 December 2022
	$	$
Abu Sennan	4,629,900	5,639,920
Crown	140,000	-
Colter	-	-
Walton-Morant licence	402,500	359,100
Selva Malvezzi	82,564	-
Waddock Cross	47,198	-
	5,302,162	5,999,020

29. Ultimate controlling party

The directors do not consider there to be an ultimate controlling party.

30. Events after the balance sheet date

Pre-paid swap facility extension

On the 3rd of March 2022 the Company provided a corporate update to the market in which it announced it has extended the final maturity date on its existing prepayment facility from 30 September 2022 to 31 December 2023. The new terms provide downside protection at $70/bbl for a volume of bbls through to end December 2023.

UK Central North Sea Licences (UK CNS) Sale & Purchase Agreement termination

On the 3rd of March 2022 the Company announced the termination of the SPA with Quattro Energy Ltd. signed in September 2021 for the sale of its UK CNS Licences; P2480 and P2519 for a consideration of up to £3.2m (c$4.4m) and the licences have been retained as part of the Company's portfolio.

Crown milestone settlement agreement

On the 23rd of March 2022 the company announced that a confidential settlement agreement (''Settlement Agreement'') has been signed between Anasuria Hibiscus UK Ltd (''AHUK'') and United for the Crown disposal milestone payment. United will receive $2,500,000 in three separate instalments in 2022, the first of which being $500,000 was received on 25th March 2022 with the subsequent receipts of $1,000,000 on 29th June 2022 and $1,000,000 on 29th December 2022. Subject to the full amount being received, this will bring an end to the matter and no further amounts will be due to United from AHUK in connection with the sale of licence P2366. This has been accounted for in the 2021 accounts.

Completion of Italian asset divestment

On the 11th April 2022 United announced the completion of the sale of 100% of the share capital of UOG Italia Srl to PXOG Marshall Limited, a subsidiary of Prospex Energy PLC (Prospex), for a consideration of 2,164,701 (c. $2.54m)

The company has received final completion proceeds of €2,190,966 being the balance of the consideration plus a working capital adjustment from the effective date of €134,500 less the deposit of €108,235 which was received in August 2020. Completion of the transaction means that United will now exit all activities in Italy and therefore be no longer liable for a share of the Selva gas development.

Non-IFRS measures

The Group uses certain measures of performance that are not specifically defined under IFRS or other generally accepted accounting principles.

Cash-operating costs per barrel

Cash operating costs are defined as cost of sales less depreciation, depletion and amortisation, production based taxes, movements in inventories and certain other immaterial cost of sales.

Cash operating costs are then divided by barrels of oil equivalent produced to demonstrate the cash cost incurred to producing oil and gas from the Group's producing assets.

	Year ended 31 December 2021	Year ended 31 December 2020
	Audited	Audited
	$	$

Cost of Sales	8,911,815	6,505,011

Less
Depreciation, depletion and amortisation	(4,005,102)	(2,563,268)

Inventories	109,841	(64,433)

Cash operating costs	5,016,554	3,877,310

Production (BOEPD)	2,327	2,195

Cash Operating Cost BOE ($)	5.90	5.77

EBITDAX

EBITDAX is earnings from continuing activities before interest, tax, depreciation, amortisation, reversal of impairment, and exploration expenditure and exceptional items in the current year.

	Year ended 31 December 2021	Year ended 31 December 2020
	Audited	Audited
	$	$

Operating Income	8,858,730	804,317

Depreciation, Depletion & Amortisation	4,107,685	2,628,990

Exploration Expense	624,546	37,161

	13,590,961	3,470,468

Glossary

Bbl	Barrels
/Bbl	Per barrel
Bn	Billion
bopd	Barrels of oil per day
Capex	Capital Expenditure
EGPC	Egyptian General Petroleum Corporation
ESG	Environment, Social, Governance
ESP	Electrical Submersible Pumps
HCIIP	Hydrocarbon initially in place
HSE	Health, safety and environment
JOC	Joint Operating Company
JV	Joint Venture
km	Kilometres
km²	Square kilometres
KPI(s)	Key performance indicator(s)
m	Metres
M	Thousand
MBbl	Thousand barrels
Mbopd	Thousands of barrels of oil per day
MM	Million
MMBbl	Million barrels
MMboe	Million barrels of oil equivalent
MSET	Ministry for Science, Energy and Technology
NPV	Net present value
OGA	Oil and Gas Authority
OPEX	Operating expenditure
Q1	First Quarter
Q2	Second Quarter
Q3	Third Quarter
Q4	Fourth Quarter
scf	Standard cubic feet
SPA	Sales and Purchase Agreement
TD	Total Depth
UK CNS	UK Central North Sea
WI	Working interest
%	Percentage
2C	Best estimate of contingent resources
2D	Two-dimensional
3D	Three-dimensional
2P	Proved plus probable reserves

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United Oil & Gas (UOG)

Friday, 13th December 2024

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Final audited results for the year ended 31/12/21

· Group working interest production in Egypt for the full year 2022 is forecast to average between 1,500 - 1,650 boepd net;

Outlook - Focused on growth

Events today

Graham Martin

Chair

Brian Larkin

Chief Executive Officer

Jamaica (100% working interest)

UK

Maria

Waddock Cross (26.25% working interest, non-operator)

Italy (20% working interest, non-operator)

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