Final Results

Block Energy PLC

01 June 2026

 

1 June 2026

Block Energy Plc

("Block" or the "Company")

Audited Results for the Year Ended 31 December 2025 and Strategic Update

Block Energy plc, the international oil and gas company with assets in Georgia and offshore Gabon, announces its audited results for the year ended 31 December 2025. The period was defined by resilient operational delivery in a lower oil price environment, third-party validation across the Company's Georgian portfolio and, following the year end, the establishment of a new growth platform in the fairway of the Gulf of Guinea.

Highlights:

Strategic validation through partner-funded growth

·    Project IV / XIQ: announced the farm-out of XIQ to Aspect Georgia, LLC in September 2025, with completion in January 2026 following Government of Georgia approval; Block is fully carried through a staged work programme estimated at approximately US$95 million.

·     Project III: acquired the operational rights to South Dome in March 2025 for nil cost, adding 574 BCF of 2U gross prospective resources, and signed non-binding heads of terms with Sanning in December 2025, which progressed after the year end into the binding Framework Agreement announced in April 2026.

·    The April 2026 Sanning Framework Agreement provides for a 51% farm-out and up to US$75 million in carry across appraisal and early facilities workstreams, subject to definitive documentation, approvals and project elections.

o  Acquired a 10% interest in the enlarged XIQ PSC in March 2025 through GOG SLADS Limited for a US$77,000 contribution to Block's share of the 2025 work programme; following the Aspect farm-out, Block's XIQ participating interest is 9.5%.

o  Successfully executed the CCS pilot injection of CO₂ in August 2025; immediate post-injection analysis indicated 70% to 100% mineralisation and the February 2026 OPC report confirmed complete mineralisation within one to three months.

o  Drilled the KRT-39_ST sidetrack on Project I in September 2025 at approximately 40% of conventional sidetrack cost, validating the slim-hole drilling concept and establishing a lower-cost base across Project I and potentially Project II.

o  Continued subsurface and engineering work on Project II in preparation for a structured farm-out or asset-level financing process.

o  Continued subsurface evaluation of exploration prospectivity in Block IX.

o  Together, Aspect, Sanning and CCS provide meaningful external and technical validation of Block's partner-funded growth model.

·     New offshore Gabon platform

o  Post year-end, Block announced a strategic entry into offshore Gabon through a secured convertible loan to Pilgrim Exploration Limited, providing a 76.5% indirect economic interest in the Ndjila (CD2) and Mpari (CD3) PSCs.

o  The PSCs cover 5,331 km² and contain four historical oil discoveries - Iguega, Topaz, Ekouata and Pilote - alongside material pre- and post-salt exploration potential in an established Gulf of Guinea hydrocarbon fairway.

·    Operational and financial resilience

o Delivered 275,995 operational man-hours with no Lost Time Incidents (2024: 283,205 operational man-hours with one LTI).

o Existing production was above budget and in line with the 2022 ERCE reserve report: 122,474 barrels of crude oil (2024: 131,579 barrels), 245 MMCF of gas (2024: 274 MMCF) and average annual production of 447 boepd (2024: 485 boepd).

o Revenue of US$6.057 million (2024: US$7.533 million), reflecting a materially lower oil price backdrop, with Brent averaging approximately US$69/bbl in 2025 compared with approximately US$81/bbl in 2024.

·    EBITDA was negative US$0.94 million (2024: positive US$1.06 million), in line with expectations in the lower price environment and achieved while continuing to progress Project III, Project IV, CCS and new venture activity.

o Year-end cash improved to US$1.493 million (31 December 2024: US$1.136 million), supported by the successful completion in November 2025 of the Group's first equity fundraise since 2020, which raised gross proceeds of £1.5 million.

o Year-end crude oil inventory of 9,731 barrels as at 31 December 2025 (31 December 2024: 11,060 barrels).

o Cost discipline was maintained despite higher strategic project activity, reflecting the Company's continued drive to  lower-cost operations, partner-funded work programmes and asset-level financing.

o Following the year end, the associated share placing and retail share offer to support the Gabon entry raised approximately US$6.3 million before expenses, with all General Meeting resolutions passed on 18 May 2026 and the conditional fundraise shares admitted to AIM.

o Subsequent to year end, commodity prices have strengthened materially from the 2025 average. Combined with strong operational performance and enhanced efficiencies, Block is positioned to benefit from a better commodity price environment while retaining the discipline developed during the lower-price period.

o 2026 priorities include progressing definitive documentation and approvals for the Sanning transaction, commencing the Aspect-funded XIQ seismic programme, advancing CCS commercial feasibility studies and launching the Gabon technical programme.

Block Energy plc's Chief Executive Officer, Paul Haywood, said:

"2025 was a year of strategic validation for Block. In Georgia, the Aspect farm-out on XIQ and the non-binding heads of terms with Sanning on Project III demonstrated that credible counterparties recognise the scale and quality of the portfolio we continue to build. Post year-end, Project III progressed to the binding Framework Agreement with Sanning, bringing the prospect of a substantial carried appraisal and early facilities programme, with Aspect planning to execute its 3D seismic acquisition, in XIQ.

Our strategy is built on capital discipline, selectively deploying cash generated from existing production, advancing high-impact opportunities through asset-level funding, and protecting shareholders from disproportionate equity dilution.

Following the year end, our entry into offshore Gabon opened a new front for the Company in an established Gulf of Guinea hydrocarbon fairway. The Ndjila and Mpari PSCs bring meaningful historical discoveries, material exploration upside and a clear route to asset-level financing, complementing our Georgian production base and partner-funded growth strategy.

The 2025 financial result reflects a materially lower oil price environment, but cash improved, costs remained controlled and the business has been re-wired for sustainability through commodity cycles. With commodity prices materially stronger than the 2025 average, our focus in 2026 is execution: converting partnerships, assets and technical milestones into visible operational progress and shareholder value."

ENDS

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION AS STIPULATED UNDER THE UK VERSION OF THE MARKET ABUSE REGULATION NO 596/2014 WHICH IS PART OF ENGLISH LAW BY VIRTUE OF THE EUROPEAN (WITHDRAWAL) ACT 2018, AS AMENDED.  ON PUBLICATION OF THIS ANNOUNCEMENT VIA A REGULATORY INFORMATION SERVICE, THIS INFORMATION IS CONSIDERED TO BE IN THE PUBLIC DOMAIN.

For further information please visit http://www.blockenergy.co.uk/ or contact:

Paul Haywood (Chief Executive Officer)	Block Energy plc	Tel: [phone]
Neil Baldwin (Nominated Adviser)	SPARK Advisory Partners Limited	Tel: [phone]
Peter Krens (Corporate Broker)	Tennyson Securities	Tel: [phone]
Mark Antelme Philip Dennis (Financial PR Adviser)	Celicourt Communications	Tel: [phone]

Notes to Editors

Block Energy plc is an AIM-quoted independent international oil and gas company with production, development, appraisal and exploration assets in Georgia and a post year-end offshore Gabon growth platform.

In Georgia, the Company holds interests in seven Production Sharing Contracts covering an area of 4,256 km² in the central part of the country. These include the XIB and XIF licences, which host Project III's 2.77 TCF of 2C gross contingent gas resources in the Patardzueli-Samgori, Rustavi and Teleti fields, together with 574 BCF of 2U gross prospective resources at South Dome. Project III has an estimated NPV10 of approximately US$2.2 billion (Source: IER, OPC 2024 and internal estimates).

The Company is structured around a multi-project approach, progressing assets across different stages of development, hydrocarbon type and reservoir characteristics. This approach is designed to deliver a balanced portfolio of production growth, field redevelopment, new discoveries and the commercialisation of substantial gas resources, supported where appropriate by partner funding, carried work programmes and cash from existing producing assets.

Located near the Georgian capital of Tbilisi, Block Energy is well-positioned to contribute to the region's energy landscape. This proximity facilitates operations and underpins the Company's commitment to the economic and energy development of Georgia.

In April 2026, the Company announced a strategic entry into offshore Gabon through a secured convertible loan to Pilgrim Exploration Limited, providing Block with a 76.5% indirect economic interest in the Ndjila (CD2) and Mpari (CD3) PSCs. The two licences cover 5,331 km² and contain four historical oil discoveries - Iguega, Topaz, Ekouata and Pilote - together with material pre- and post-salt exploration potential in an established Gulf of Guinea hydrocarbon fairway.

Glossary

·      bbls: barrels. A barrel is 35 imperial gallons.

·      Bcf: billion cubic feet.

·      boe: barrels of oil equivalent.

·      bopd: barrels of oil per day.

·      DGH: Directorate General of Hydrocarbons of Gabon

·      Mbbls: thousand barrels.

·      MMbbls: million barrels.

·      MMboe: million barrels of oil equivalent.

·      MMCF/d: millions of cubic feet of gas per day

·      TCF: trillion cubic feet.

The following are extracts from the Annual Report & Accounts:

Chairman's Statement

Dear Shareholder,

The realisation of value from high-impact assets, such as those held by Block, inevitably takes time. As I noted last year, the work behind the scenes can be substantial yet difficult to convey in any single reporting period. 2025, by contrast, has been the year in which several years of preparatory work began to translate into clear, commercial outcomes - a transformative farm-out on Project IV, a binding Framework Agreement on Project III, and a successful pilot injection on the Carbon Capture and Storage initiative. Following the reporting period, the Company executed the acquisition of an indirect economic interest over two PSCs in Gabon. Each had been on the strategic agenda for some time, and 2025 was the year in which they began to materialise.

The Company is now at the inflection point referenced in last year's statement. The Project IV farm-out, which completed shortly after year-end, sees Block fully carried through a substantial work programme funded by an internationally recognised counterparty. The Project III Framework Agreement, executed post year-end, brings a major industrial group into the Lower Eocene and Upper Cretaceous gas appraisal. Both transactions advance the Group's most material Georgian projects while preserving capital. The post-period entry into Gabon adds jurisdictional and geological diversification and positions the Company to develop into a broader international independent oil and gas group.

Reaching this point is a testament to the strategy in place, which has balanced progress on the high-impact projects with a balance sheet able to support them, and to the strength of the management team, which continues to deliver against demanding objectives with tight cost discipline. Block has, where possible, advanced its projects on the basis of carry mechanisms and partner-funded work programmes, with new equity capital sought only when strategic optionality genuinely required it; such as for the Gabon transaction executed post the reporting period. In the listed E&P space, this disciplined approach to capital remains unusual.

I would particularly like to thank the team in Georgia, who have driven another year of operational excellence, including the successful pilot of the Group's slim-hole drilling concept, the safe and on-budget completion of the CCS pilot injection, and the continuous management of our producing portfolio - all while maintaining the highest standards of safety and environmental stewardship with no lost time incidents recorded. Their progress continues to be supported by close and productive relationships with the Georgian authorities, our joint venture partners and our commercial counterparties, built over many years and particularly important in delivering this year's principal commercial milestones.

It is appropriate at this point that I mention the loss of one of our stalwarts, Dr. Stephen James (our former head of subsurface). Stephen brought his considerable knowledge of geology and petroleum operations to bear on all of the Company's activities with great enthusiasm and humour. Even during his long tough battle with cancer, he was dedicated to the success of the Company. We carry on, of course, but we all know that Block Energy will not be the same again. All in Block Energy miss him dearly.

Georgia remains a positive environment in which to work and invest. It is pro-business, with a well-functioning political and legal system, easy market access through established infrastructure that runs close to the Company's licences, and GDP growth that continues to outstrip that of the wider EU. Safety remains the foremost priority for the Company at all levels, and is the first item on the agenda at all Board meetings.

The Board believes the strategy in place is the right one. The progress made during 2025 - together with the post year-end completion of the Project IV farm-out, the execution of the Project III Framework Agreement and the strategic entry into a new jurisdiction - demonstrates that the Group is capable of delivering meaningful change in any twelve-month period. The new assets in Gabon provide meaningful upside in an exciting hydrocarbon jurisdiction. The Board looks forward to supporting the team in the year ahead and to updating shareholders further on the Company's progress.

Philip Dimmock

Non-Executive Chairman

Chief Executive Officer's Statement

Dear Shareholder,

2025 was a year of strategic conversion for Block Energy. We took a portfolio shaped by several years of technical work and converted that work into tangible commercial validation: the Aspect farm-out on XIQ, the Sanning Framework Agreement on Project III, successful completion of the CCS pilot, validation of the slim-hole drilling model and, after year-end, entry into offshore Gabon. These milestones move Block from a business defined principally by its Georgian production base to a broader, partner-funded growth platform with multiple routes to scale in 2026 and beyond.

Safety remains the foundation of our operations. During a year that included the pilot CO₂ injection, the drilling of KRT-39_ST and continuous management of the producing portfolio, the Group recorded no lost time incidents. We also continued to strengthen local engagement through employment, training and targeted community initiatives, while investing in the environmental management systems that underpin both conventional operations and the CCS project.

Our strategic approach has been clear: advance the largest opportunities through asset-level finance and farm-outs, while preserving the balance sheet and using cash from existing operations selectively. Project IV now benefits from a fully carried work programme estimated at approximately US$95 million. Project III is the subject of a binding Framework Agreement that provides for an up to US$75 million carry, subject to definitive documentation, approvals and project elections. This strategy is designed to maximise shareholder exposure to material upside without forcing the Company into disproportionate capital commitments.

The same discipline applies to CCS. The pilot has been delivered with Rustavi Azot and supported by independent technical work, and the next phase is focused on commercial feasibility, verification and scale-up rather than committing capital before the project is commercially defined.

We also used 2025 to broaden the portfolio. The success achieved on Projects III, IV and CCS gave us the platform to pursue an international new venture without losing focus on Georgia. The Gabon transaction announced after year-end is therefore not a departure from strategy; it is an extension of the same model: low-cost entry, discovered resources, material upside and a clear route to asset-level financing.

In April 2026, we announced a strategic entry into offshore Gabon through a secured convertible loan to Pilgrim Exploration Limited, providing Block with a 76.5% indirect economic interest in the Ndjila (CD2) and Mpari (CD3) PSCs. The PSCs cover 5,331 km² and contain four historical oil discoveries - Iguega, Topaz, Ekouata and Pilote - in a proven hydrocarbon basin with established operators, infrastructure and fiscal terms. This gives the Group a new discovered-resource development pathway and material exploration upside alongside our Georgian asset base.

A central feature of the year was the way in which progress was secured. The Sanning Framework Agreement, the Aspect farm-out and the CCS pilot each advanced high-impact projects through partners, carries or technical collaboration. The KRT-39_ST slim-hole pilot, meanwhile, validated an internal cost-reduction initiative that supports a more sustainable operating model across lower-price environments. The Company has therefore not simply added projects; it has re-wired the business to progress a larger opportunity set with greater capital discipline.

During the year, we drilled and completed KRT-39_ST on Project I as the first pilot application of our slim-hole drilling technology, using the Company's own A-80 heavy workover rig and in-house crew. The well was drilled safely, on time and within budget at approximately 40% of the cost of previous conventional sidetracks. KRT-39_ST met its engineering and cost objectives and supports a broader lower-cost inventory across Project I and, potentially, Project II.

Project II remains an important part of the long-term oil growth portfolio. During the year, we continued internal subsurface and engineering work and maintained discussions with international service providers and enhanced oil recovery specialists. With 235 MMbbl of gross 2C contingent resources and a substantial legacy well stock, Project II offers a material redevelopment opportunity that is being refined ahead of a structured farm-out or asset-level financing process.

Project III is central to the next phase of Block's growth. During the year, we acquired the operational rights to South Dome, adding 574 BCF of 2U gross prospective resources. The structured farm-out process advanced through 2025, resulting in a non-binding offer in December and, post year-end, a binding Framework Agreement with Zhijiang Sanning Energy Co. Ltd. The agreement provides for Sanning to acquire a 51% participating interest in Project III, with Block retaining 49% and operatorship through appraisal, and for an up to US$75 million carry across appraisal and early facilities workstreams. Definitive documentation is targeted for the second half of 2026, with operations expected to commence in the first half of 2027, subject to approvals.

Project IV delivered one of the most significant strategic milestones of the year. Following Block's acquisition of an initial 10% interest in XIQ in March 2025, the Company announced the farm-out of XIQ to Aspect Georgia, LLC in September 2025. Government approval was received and the transaction completed in January 2026. The carried work programme, estimated at approximately US$95 million, is expected to begin with seismic acquisition in 2026 and provides a clear pathway through exploration, appraisal and, subject to results, early production facilities without further capital exposure for Block.

Our CCS initiative progressed from concept to demonstrated technical viability. In August 2025, we injected 13.64 tonnes of CO₂ dissolved in water into the Patardzueli-Samgori Middle Eocene reservoir. Post-injection analysis reported in December 2025 indicated 70% to 100% mineralisation, and the February 2026 OPC report confirmed complete mineralisation within a one-to-three-month timeframe, with no evidence of gas phase migration or leakage. The next phase, alongside Rustavi Azot, will focus on the commercial framework, scaling of injection capacity and monitoring and verification protocols.

Financially, 2025 was a year of resilience in a lower-price environment and continued re-wiring of the business to remain sustainable at lower oil prices. Revenue of US$6.057 million (2024: US$7.533 million) reflected the materially lower commodity price backdrop, with Brent averaging approximately US$69/bbl in 2025 compared with approximately US$81/bbl in 2024, while production from existing wells was better than budget. EBITDA was negative US$0.94 million (2024: positive US$1.06 million), in line with expectations. Importantly, the cost base remained controlled, cash improved to US$1.493 million (2024: US$1.136 million), and the November 2025 equity raise - the Group's first since 2020 - provided additional flexibility at a time of active farm-out and new venture execution. Subsequent to year-end, Brent prices have strengthened materially from the 2025 average; combined with strong operational performance and enhanced efficiencies, this positions the Company to benefit from a more constructive commodity price environment while retaining the discipline developed during the lower-price period.

Post year-end, we completed the corporate steps required to support the Gabon entry. The associated placing and retail offer raised approximately US$6.3 million before expenses, and following the General Meeting held on 18 May 2026 all resolutions were passed and the conditional fundraise shares were admitted to AIM. The proceeds provide the capital required to fund the Gabon work programme and general working capital as we move into the next phase of execution.

Outlook

The year ahead is about converting strategic positioning into operational delivery: definitive documentation and approvals for the Sanning transaction; preparation for Project III appraisal operations targeted to commence in 2027; commencement of the Aspect-funded XIQ seismic programme; CCS commercial feasibility work; and the operational launch of the Gabon technical programme, with initial focus on data integration, Iguega development planning and partner financing discussions.

We recognise that there remains a disconnect between the intrinsic value of the portfolio and the Group's market capitalisation. The answer to that is execution. Independent resource assessments, the calibre of our counterparties and the scale of partner-funded work now in prospect all support our view that the portfolio contains material upside. Our focus in 2026 is to convert that upside into visible operational milestones.

I would like to thank our team in Georgia, our advisers, our partners and our shareholders for their continued support. We enter 2026 with a stronger portfolio, a more efficient operating model, credible strategic partners and a clear plan to build value from Georgia, Gabon and our CCS opportunity.

Yours sincerely,

Paul Haywood
Chief Executive Officer
Block Energy PLC

Financial Review

Income Statement

The Group's revenue from oil and gas sales was US$6,057,000 (2024: US$7,533,000). The reduction was driven primarily by the lower commodity price environment, with average realised oil revenue per barrel of US$57.43 compared with US$68.20 in 2024, while production remained broadly stable and slightly ahead of budget. Crude oil sales were 92,731 barrels (2024: 97,961 barrels), and gas sales were US$731,000 (2024: US$855,000).

During the year, the Group produced 122,474 barrels of crude oil (2024: 131,579 barrels). Gas production stood at 245 MMCF (2024: 274 MMCF). This gross production figure includes the State of Georgia's share of production before cost recovery and profit sharing. The Group had 9,731 barrels of crude oil inventory as at 31 December 2025 (31 December 2024: 11,060 barrels).

The natural decline from existing Project I production was less than expected during the year. Conventional drilling was deliberately limited as the Company prioritised Project III, Project IV, CCS and new venture activity, with the only Project I drilling being the lower-cost KRT-39_ST slim-hole pilot. KRT-39_ST validated the slim-hole drilling concept and therefore supports a lower-cost development model that is more resilient in low oil price environments. Production from the existing well stock remained in line with the 2022 ERCE reserve report type curves and slightly ahead of budgetary estimates.

Subsequent to year-end, the commodity price backdrop has strengthened materially relative to the 2025 average. The Company's leaner operating model, stable production performance and enhanced capital discipline position it to benefit from higher realised oil prices while retaining the sustainability measures developed during the lower-price environment.

The loss for the year was US$2,518,000 (2024: US$609,000). The increase compared with the prior year primarily reflects lower revenue from the reduced oil price environment and the higher cost of sales charge of US$596,000 (2024: US$22,000) associated with the reduced level of oil stock held at year end.

With respect to operating activities, the Group delivered a loss of US$2,254,000 (2024: loss of US$202,000). EBITDA decreased to negative US$935,000 (2024: positive US$1,061,000), principally due to lower realised commodity prices rather than a loss of operational control. The result should be read alongside the strategic progress delivered during the year across Project III, Project IV, CCS and Gabon, where value creation is not fully reflected in the 2025 income statement.

The Company continues to closely monitor costs, operational performance and efficiency. Despite increased international cost pressures and higher activity across the strategic project portfolio, the Group maintained overall costs at a similar level to the prior year. This cost discipline is a key component of the Company's re-wired operating model and supports sustainability through commodity cycles.

Overall, 2025 was financially impacted by lower oil prices, but the Company remained stable, improved its year-end cash position, extended its strategic runway and made significant progress on the high-impact projects that are expected to be the principal catalysts for shareholder value growth.

Liquidity, Counterparty Risk and Going Concern

The Group monitors its cash position, cash forecasts and liquidity regularly, with surplus cash held on term deposits with major financial institutions. The directors have prepared cash flow forecasts for a period of 12 months from the date of signing these financial statements, which are reviewed regularly to determine whether any cost-curtailment actions are required. The Group's operations presently generate sufficient revenues to cover operating costs, supporting the preparation of the financial statements on a going concern basis. The directors have, however, identified downside scenarios - including a substantial fall in oil prices or production, and the redemption of the US$2.0 million secured loan in August 2027 - that give rise to a material uncertainty which may cast significant doubt on the Group's ability to continue as a going concern. Notwithstanding this, the directors consider it appropriate to prepare the financial statements on a going concern basis; the full Going Concern disclosure is set out in note 1.

Impairment

There was no impairment recognised in either year.

Results and Dividends

The results for the year and the financial position of the Group are shown in the following financial statements:

·      The Group has incurred a pre-tax loss of $2,518,000 (2024: loss of $609,000).

·      The Group achieved negative EBITDA of $935,000 (2024: positive $1,061,000).

·      The Group has net assets of $25,526,000 (2024: $25,313,000).

·      The Directors do not recommend the payment of a dividend (2024: $nil).

Financial Statements

Consolidated Statement of Comprehensive Income for the Year Ended 31 December 2025

	Note	Year ended 31 December 2025	Year ended 31 December 2024
Continuing operations		$'000	$'000
Revenue	4	6,057	7,533
Cost of sales:
Direct costs	3	(3,572)	(3,496)
Oil inventory adjustments	14	(596)	(22)
Depreciation and depletion of oil and gas assets	5	(1,290)	(1,236)
Total cost of sales		(5,458)	(4,754)
Gross profit		599	2,779
Other administrative costs	6	(2,629)	(2,568)
Share based payments charge	23	(195)	(386)
Foreign exchange movement		(30)	(27)
Total operating loss		(2,255)	(202)
Other income	8	65	35
Finance income		37	33
Finance expense	9	(365)	(475)
		(263)	(407)
Loss for the year before taxation		(2,518)	(609)
Taxation	10	-	-
Loss for the year from continuing operations (attributable to the equity holders of the parent)		(2,518)	(609)
Items that may be reclassified subsequently to profit and loss:
Exchange differences on translation of foreign operations		210	(135)
Total comprehensive loss for the year (attributable to the equity holders of the parent)		(2,308)	(744)
Loss per share basic and diluted	11	(0.31)c	(0.08)c
Earnings before interest, tax, depreciation and amortisation (EBITDA)	3a	(935)	1,061

All activities relate to continuing operations.

The notes on pages 58 to 84 form part of these consolidated financial statements.

Consolidated Statement of Financial Position for the Year Ended 31 December 2025

		31 December 2025	31 December 2024
	Note	$'000	$'000
Non-current assets
Intangible assets	12	745	268
Property, plant and equipment	13	22,810	22,976
Total non-current assets		23,555	23,244
Current assets
Inventory	14	3,819	4,299
Trade and other receivables	15	826	804
Cash and cash equivalents	16	1,493	1,136
Total current assets		6,138	6,239
Total assets		29,693	29,483
Equity and liabilities
Capital and reserves attributable to equity holders of the Parent Company:
Share capital	19	4,642	3,733
Share premium	20	36,958	34,879
Other reserves	21	2,441	5,066
Foreign exchange reserve		843	633
Accumulated deficit		(19,358)	(18,998)
Total equity		25,526	25,313
Non-current liabilities
Borrowings	17	-	2,000
Total non-current liabilities		-	2,000
Current liabilities
Trade and other payables	17	1,207	1,237
Borrowings	17	2,000	-
Provisions	18	960	933
Total current liabilities		4,167	2,170
Total liabilities		4,167	4,170
Total equity and liabilities		29,693	29,483

The financial statements were approved by the Board of Directors and authorised for issue on 30 May 2026 and were signed on its behalf by:

Paul Haywood
Director

The notes on pages 58 to 84 form part of these consolidated financial statement

Consolidated Statement of Changes in Equity for the Year Ended 31 December 2025

	Share Capital $'000	Share Premium $'000	Accumulated Deficit $'000	Other Reserves $'000	Foreign Exchange Reserve $'000	Total Equity $'000
Balance at 31 December 2023	3,705	34,856	(18,389)	4,766	768	25,706
Loss for the year	-	-	(609)	-	-	(609)
Exchange differences on translation of foreign operations	-	-	-	-	(135)	(135)
Total comprehensive loss for the year	-	-	(609)		(135)	(744)
Issue of shares	28	23	-	-	-	51
Share based payments	-	-	-	632	-	632
Shares held by EBT	-	-	-	(332)	-	(332)
Total transactions with owners	28	23	-	300	-	351
Balance at 31 December 2024	3,733	34,879	(18,998)	5,066	633	25,313
Loss for the year	-	-	(2,518)	-	-	(2,518)
Exchange differences on translation of foreign operations	-	-	-	-	210	210
Total comprehensive loss for the year	-	-	(2,518)	-	210	(2,308)
Issue of shares	898	2,156	-	(656)	-	2,398
Cost of issue	-	(90)	-	-	-	(90)
Share based payments	-	-	-	195	-	195
Other reserve movement	-	-	-	18	-	18
Options exercised	11	13	-	(24)	-	-
Expired warrants and options	-	-	2,158	(2,158)	-	-
Total transactions with owners	909	2,079	2,158	(2,625)	-	2,521
Balance at 31 December 2025	4,642	36,958	(19,358)	2,441	843	25,526

The notes on pages 58 to 84 form part of these consolidated financial statements.

Consolidated Statement of Cash Flows for the Year Ended 31 December 2025

	Note	Year ended 31 December 2025 $'000	Year ended 31 December 2024 $'000
Cash flow from operating activities
Loss for the year before tax		(2,518)	(609)
Adjustments for:
Depreciation and depletion	5	1,290	1,236
Finance charges	9	365	475
Finance income		(37)	(33)
Other income	8	(65)	(35)
Creditors paid in shares		21	31
Share based payments expense	7	195	386
Foreign exchange movement		206	(47)
Operating cash flows before movements in working capital		(543)	1,404
(Increase)/decrease in trade and other receivables		(22)	167
Movement in trade and other payables*		420	(252)
Decrease in inventory		480	78
Net cash flow from operating activities		335	1,397
Cash flow from investing activities
Income received		101	6
Expenditure in respect of E&E		(477)	(218)
Expenditure in respect of PP&E	13	(1,121)	(445)
Net cash used in investing activities		(1,497)	(657)
Cash flow from financing activities
Proceeds from Share issues	19	1,972	-
Cost of share issues	20	(90)	-
Interest paid	9	(365)	(311)
Net cash inflow/(outflow) from financing activities		1,517	(311)
Net increase in cash and cash equivalents in the year		355	429
Cash and cash equivalents at start of year		1,136	713
Effects of foreign exchange rate changes on cash and cash equivalents		2	(6)
Cash and cash equivalents at end of year		1,493	1,136

The notes on pages 58 to 84 form part of these consolidated financial statements.

Significant non-cash transactions*

During the year, accrued liabilities of $425,000 were extinguished through the issue of ordinary shares and nil cost options. This represents a non-cash financing transaction and has been excluded from the statement of cash flows. The shares were issued at 0.74p (0.92c) per share and the nil cost options were valued at the same amount.

Notes Forming Part of the Consolidated Financial Statements

Corporate Information

Block Energy Plc ("Block Energy") gained admission to trading on AIM on 11^th June 2018, trading under the symbol of BLOE.

The Consolidated financial statements of the Group, which comprises Block Energy Plc and its subsidiaries, for the year ended 31 December 2025 were authorised for issue in accordance with a resolution of the Directors on 30 May 2026. Block Energy is a Company incorporated in the UK whose shares are publicly traded. The address of the registered office is given in the officers and advisers section of this report. The Company's administrative office is in London, UK.

The nature of the Company's operations and its principal activities are set out in the Strategic Report on pages 4 to 35 and the Report of the Directors on pages 36 to 38.

1.      Significant Accounting Policies

IAS 8 requires that management shall use its judgement in developing and applying accounting policies that result in information which is relevant to the economic decision-making needs of users, that are reliable, free from bias, prudent, complete and represent faithfully the financial position, financial performance and cash flows of the entity.

Basis of Preparation

The principal accounting policies adopted in the preparation of these consolidated financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated. All amounts presented are in thousands of US dollars unless otherwise stated. Foreign operations are included in accordance with the policies set out below.

The consolidated financial statements have been prepared in accordance with UK-adopted international accounting standards and as regards the Company financial statements, as applied in accordance with the requirements of the Companies Act 2006. The Financial Statements have also been prepared under the historical cost convention, as modified by the revaluation of financial assets at fair value through profit or loss.

The preparation of financial statements in accordance with UK-adopted international accounting standards requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Changes in accounting estimates may be necessary if there are changes in the circumstances on which the estimate was based, or as a result of new information or more experience. Such changes are recognised in the period in which the estimate is revised.

Standard	Effective date	Overview
IFRS 18 Presentation and Disclosure in Financial Statements	1 January 2027	IFRS 18 (replacing IAS 1) introduces new profit or loss presentation requirements to enhance comparability. Early adoption is allowed.
Amendments to IFRS 9: Financial Instruments and IFRS 7 Financial Instruments: Disclosures (and Annual Improvements to IFRS standards - Volume 11	1 January 2026	Amendments to IFRS 9 and IFRS 7 clarify the classification and measurement of financial instruments, including aspects of derecognition and the assessment of contractual cash flow characteristics, while enhancing related disclosure requirements. Annual Improvements to IFRS Standards - Volume 11 introduce minor amendments across various standards to address inconsistencies and improve clarity without significantly changing existing requirements.
UK Sustainability Reporting Standards	1 January 2027	The UK Government published the final UK Sustainability Reporting Standards (UK SRS S1 and UK SRS S2) on 25 February 2026, closely aligned to the ISSB's IFRS S1 and IFRS S2. The FCA is consulting on requiring UK-listed companies to apply UK SRS from 1 January 2027, with UK SRS S2 climate disclosures mandatory from that date and Scope 3 emissions on a comply-or-explain basis from 2028. The existing TCFD-based rules for listed companies are expected to be replaced by the new UK SRS regime. The Company is monitoring developments and assessing the impact on its reporting obligations.

New and Amended Standards Adopted by the Group

There were no new or amended accounting standards that required the Group to change its accounting policies for the year ended 31 December 2025 and no new standards, amendments or interpretations were adopted by the Group.

New Accounting Standards Issued but not yet Effective

The standards and interpretations that are relevant to the Group, issued, but not yet effective, up to the date of the Financial Statements are listed below. The Group intends to adopt these standards, if applicable, when they become effective.

The Directors have evaluated the impact of transition to the above standards and do not consider that there will be a material impact of transition on the financial statements.

Crude Oil Inventory Valuation Policy

During the prior financial year, the Group changed its accounting policy and departed from IAS 2 Inventories for the valuation of its crude oil inventory. Previously, inventories were valued at the lower of cost and net realisable value. Under the new policy, inventories are now measured at their net realisable value, which is Brent market price less the contracted discount.  The Company believes that this provides a more representative view of realisable value, aligns more accurately with internal management reporting and removes the judgemental approach of allocation of certain costs.

Had IAS 2 been applied, inventory would have been valued at net realisable value as this was lower than cost. As inventory is carried at net realisable value, the current year position is consistent with the IAS 2 measurement basis and the difference is not considered material to the financial statements (2024: $59,000 lower and profit before tax $59,000 lower).

Basis of Consolidation

Where the Company has control over an investee, it is classified as a subsidiary. The Company controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control. De-facto control exists in situations where the Company has the practical ability to direct the relevant activities of the investee without holding the majority of the voting rights. In determining whether de-facto control exists the Company considers all relevant facts and circumstances, including:

·    The size of the Company's voting rights relative to both the size and dispersion of other parties who hold voting rights;

·    Substantive potential voting rights held by the Company and by other parties;

·    Other contractual arrangements; and

·    Historic patterns in voting attendance.

Business Combinations

The consolidated financial statements incorporate the results of business combinations using the purchase method. In the consolidated statement of financial position, the acquiree's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The difference between the consideration paid and the acquired net assets is recognised as goodwill. The results of acquired operations are included in the consolidated income statement from the date on which control is obtained. Any difference arising between the fair value and the tax base of the acquiree's assets and liabilities that give rise to a deductible difference result in recognition of deferred tax liability. No deferred tax liability is recognised on goodwill.

Acquisitions

The Group and Company measure consideration at the acquisition date as:

·    The fair value of the consideration transferred; plus

·    The recognised amount of any non-controlling interests in the acquiree

·    Plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less the net recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed.

When the excess of the consideration paid over the fair value of the identified net assets is negative, a bargain purchase gain is recognised immediately in profit or loss.

Cost related to the acquisition, other than those associated with the issue of debt or equity securities, that the Group incurs in connection with a business combination, are expensed as incurred.

Asset Acquisition

Acquisitions of mineral exploration licences through the acquisition of non-operational corporate structures that do not represent a business and therefore do not meet the definition of a business combination, are accounted for as the acquisition of an asset. An example of such would be increases in working interests in licences.

The consideration for the asset is allocated to the assets based on their relative fair values at the date of acquisition.

Going Concern

The directors have prepared cash flow forecasts for a period of 12 months from the date of signing these financial statements. The Group's forecasts are reviewed regularly to assess whether any actions to curtail expenditure or cut costs are required.

The Group's operations presently generate sufficient revenues to cover operating costs, supporting the continued preparation of the Group's accounts on a going concern basis.

The directors are nevertheless conscious that oil prices have been volatile during the past few years and could rise further but could also fall back in the year ahead, and that future production levels depend on both depletion rates from existing wells and the success of future drilling.

The directors also recognise that the outstanding $2.0 million secured loan is due for full redemption in August 2027 and that there are scenarios in which the Company may not be in a position to settle this liability. Nonetheless, the directors remain confident that the loan can either be repaid, or renegotiated, or that new lenders could take a portion, or that other financing options will be available to the Company and therefore judge that the Company retains sufficient flexibility and optionality around the loan to prepare the accounts on a going concern basis.

As part of their going concern assessment, the directors have examined multiple scenarios in which oil prices and/or future production levels fall substantially and have concluded that it remains possible that future revenues in at least some scenarios might not cover all operating costs and planned capital expenditures, creating a material uncertainty that may cast doubt over the Group's ability to continue as a going concern. Whilst acknowledging this material uncertainty, the directors remain confident of making further cost savings if required and, therefore, the directors consider it appropriate to prepare the financial statements on a going concern basis. The financial statements do not include the adjustments that would result if the Group were unable to continue as a going concern.

Intangible Assets

Exploration and Evaluation costs

The Group applies the full cost method of accounting for Exploration and Evaluation ("E&E") costs, having regard to the requirements of IFRS 6 'Exploration for and Evaluation of Mineral Resources'. Under the full cost method of accounting, costs of exploring and evaluating properties are accumulated and capitalised by reference to appropriate cash generating units ("CGUs"). Such CGUs are based on geographic areas such as a licence area, type or a basin and are not larger than an operating segment - as defined by IFRS 8 'Operating segments'.

E&E costs are initially capitalised within 'Intangible assets', such E&E costs may include costs of licence acquisition, technical services and studies, seismic acquisition, exploration drilling and testing, but do not include costs incurred prior to having obtained the legal rights to explore an area, which are expensed directly to the statement of comprehensive income as they are incurred. Plant and equipment assets acquired for use in exploration and evaluation activities are classified as property, plant and equipment.

However, to the extent that such an asset is consumed in developing an unproven oil and gas asset, the amount reflecting that consumption is recorded as part of the cost of the unproven oil and gas asset.

Exploration and unproven oil and gas assets related to each exploration license/prospect are not amortised but are carried forward until the technical feasibility and commercial feasibility of extracting a mineral resource are demonstrated.

Impairment of Exploration and Evaluation assets

All capitalised exploration and evaluation assets and property, plant and equipment are monitored for indications of impairment. Where a potential impairment is indicated, assessment is made for the Group of assets representing a cash generating unit.

In accordance with IFRS 6 the Group firstly considers the following facts and circumstances in their assessment of whether the Group's exploration and evaluation assets may be impaired, whether:

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

·    substantive expenditure on further exploration for and evaluation of mineral resources in the specific area is neither budgeted nor planned;

·    exploration for and evaluation of mineral resources in the specific area have not led to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities in the specific area; or

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

If any such facts or circumstances are noted, the Group perform an impairment test in accordance with the provisions of IAS 36.

The aggregate carrying value is compared against the expected recoverable amount of the cash generating unit. The recoverable amount is the higher of value in use and the fair value less costs to sell. An impairment loss is reversed if the asset's or cash-generating unit's recoverable amount exceeds its carrying amount. A reversal of impairment loss is recognised in the profit or loss immediately.

Carbon Capture and Storage ("CCS") project

Costs incurred in respect of the Group's CCS initiative are recognised as intangible assets under IAS 38 'Intangible Assets'. Costs are capitalised only when the IAS 38 development-phase criteria are met, including demonstration of technical feasibility, intention and ability to complete the asset, and the probability of future economic benefits. The CCS intangible asset is not amortised until it is available for use. At each reporting date the asset is tested for impairment in accordance with IAS 36 'Impairment of Assets'; as an asset not yet available for use it is subject to an annual impairment test irrespective of whether any indicator exists.

Property, Plant and Equipment - Development and Production ("D&P") Assets

Capitalisation

The costs associated with determining the existence of commercial reserves are capitalised in accordance with the preceding policy and transferred to property, plant and equipment as development assets following impairment testing. All costs incurred after the technical feasibility and commercial viability of producing hydrocarbons have been demonstrated are capitalised within development assets on a field-by-field basis. Subsequent expenditure is only capitalised where it either enhances the economic benefits of the development asset or replaces part of the existing development asset (where the remaining cost of the original part is expensed through the income statement). Costs of borrowing related to the ongoing construction of development and production assets and facilities are capitalised during the construction phase. Capitalisation of interest ceases once an asset is ready for production.

Depreciation

Capitalised oil assets are not subject to depreciation until commercial production starts. Depreciation is calculated on a unit-of-production basis in order to write off the cost of an asset as the reserves that it represents are produced and sold. Any periodic reassessment of reserves will affect the depreciation rate on a prospective basis. The unit-of-production depreciation rate is calculated on a field-by-field basis using proved, developed reserves as the denominator and capitalised costs as the numerator. The numerator includes an estimate of the costs expected to be incurred to bring proved, developed, not-producing reserves into production. Infrastructure that is common to a number of fields, such as gathering systems, treatment plants and pipelines are depreciated on a unit-of-production basis using an aggregate measure of reserves or on a straight-line basis depending on the expected pattern of use of the underlying asset.

Proven Oil and Gas Properties

Oil and gas properties are stated at cost less accumulated depreciation and impairment losses. The initial cost comprises the purchase price or construction cost including any directly attributable cost of bringing the asset into operation and any estimated decommissioning provision.

Once a project reaches the stage of commercial production and production permits are received, the carrying values of the relevant exploration and evaluation asset are assessed for impairment and transferred to proven oil and gas properties and included within property plant and equipment.

Proven oil and gas properties are accounted for in accordance with provisions of the cost model under IAS 16 "Property, Plant and Equipment" and are depleted on unit of production basis based on the estimated proven and probable reserves of the pool to which they relate.

Impairment of Development and Production Assets

A review is performed for any indication that the value of the Group's D&P assets may be impaired such as:

·    significant changes with an adverse effect in the market or economic conditions which will impact the assets; or

·    obsolescence or physical damage of an asset; or

·    an asset becoming idle or plans to dispose of the asset before the previously expected date; or

·    evidence is available from internal reporting that indicates that the economic performance of an asset is or will be worse than expected.

For D&P assets when there are such indications, an impairment test is carried out on the CGU. CGUs are identified in accordance with IAS 36 'Impairment of Assets', where cash flows are largely independent of other significant asset Groups and are normally, but not always, single development or production areas. When an impairment is identified, the depletion is charged through the Consolidated Statement of Comprehensive Income if the net book value of capitalised costs relating to the CGU exceeds the associated estimated future discounted cash flows of the related commercial oil reserves.

The CGU's identified by the company are the producing fields within Project I and II in Georgia. An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment charges may no longer exist or may have decreased. If such an indication exists, the Group estimates the recoverable amount. A previously recognised impairment charge is reversed only if there has been a change in the estimates used to determine the assets recoverable amount since the last impairment charge was recognised. If this is the case the carrying amount of the asset is increased to its recoverable amount, not to exceed the carrying amount that would have been determined, net of depreciation, had no impairment charges been recognised for the asset in prior years.

Property, Plant and Equipment and Depreciation

Property, plant and equipment which are awaiting use in the drilling campaigns, and storage, are recorded at historical cost less accumulated depreciation. Property, plant and equipment are depreciated using the straight-line method over their estimated useful lives, as follows:

·      IT Equipment - 3 years

·      Fixtures and Fittings - 5 years

·      Oil and Gas related assets - 8 years

The carrying value of Property, plant and equipment is assessed annually and any impairment charge is charged to the Consolidated Statement of Comprehensive income.

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, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets (such as tablets and personal computers, small items of office furniture and telephones). For these leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

Inventories

Crude oil inventories are stated at Brent less any contractual discounts. This is adjusted if the sale of inventories after that date gives additional evidence about its net realisable value at the balance sheet date.

The cost of crude oil is expensed in the period in which the related revenue is recognised.

Inventories of drilling tubulars, drilling chemicals, test separation equipment, rig spare parts and other oil and gas equipment are valued at the lower of cost or net realisable value, where cost represents the weighted average unit cost for inventory lines on a line-by-line basis. Cost comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition.

Decommissioning Provision

Provisions for decommissioning are recognised in full when wells have been suspended, or facilities have been installed.

A corresponding amount equivalent to the provision is also recognised as part of the cost of either the related oil and gas exploration and evaluation asset or property, plant and equipment as appropriate. The amount recognised is the estimated cost of decommissioning, discounted to its net present value, and is reassessed each year in accordance with local conditions and requirements.

Changes in the estimated timing of decommissioning or decommissioning cost estimates are dealt with prospectively by recording an adjustment to the provision, and a corresponding adjustment to the related asset.

The unwinding of the discount on the decommissioning provision is included as a finance cost.

Borrowing Costs

General and specific borrowing costs that are directly attributable to the acquisition, construction or production of a qualifying asset are capitalised during the period of time that is required to complete and prepare the asset for its intended use or sale. Qualifying assets are assets that necessarily take over one accounting period to get ready for their intended use or sale.

Investment income earned on the temporary investment of specific borrowings, pending their expenditure on qualifying assets, is deducted from the borrowing costs eligible for capitalisation.

Other borrowing costs are expensed in the period in which they are incurred.

Taxation and Deferred Tax

Income tax expense represents the sum of the current tax and deferred tax charge for the period.

The Group's liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Deferred tax is recognised on differences between the carrying amounts of assets and liabilities in the financial information and the corresponding tax bases and is accounted for using the balance sheet liability method.

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

Judgement is applied in making assumptions about future taxable income, including oil and gas prices, production, rehabilitation costs and expenditure to determine the extent to which the Group recognises deferred tax assets, as well as the anticipated timing of the utilisation of the losses.

Deferred tax is calculated at the tax rates that have been enacted or substantively enacted and are expected to apply in the period when the liability is settled, or the asset realised. Deferred tax is charged or credited to the statement of comprehensive income, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity.

Foreign Currencies

Monetary assets and liabilities denominated in foreign currencies are translated into US dollars at the rates of exchange prevailing at the reporting date: $1.34 /£1 (2025: $1.29 /£1). Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Exchange differences are taken to the Statement of Comprehensive Income.

Foreign Operations

The assets are translated into US dollars at the exchange rate at the reporting date and income and expenses of the foreign operations are translated at the average exchange rates. Exchange differences arising on translation are recognised in other comprehensive income and presented in the other reserves category in equity.

Determination of Functional Currency and Presentational Currency

The determination of an entity's functional currency is assessed on an entity by entity basis. A company's functional currency is defined as the currency of the primary economic environment in which the entity operates. The functional currency of the Parent Company is the pound sterling, because it operates in the UK, where the majority of its transactions are in pounds sterling. The functional currencies of Block Norioskhevi Ltd, Satskhenisi Limited, Georgia New Ventures Inc and Block Rustaveli Limited are the US dollar, because the majority of their transactions by value is in US dollars, and the functional currencies of their branches and Block Operating Company in Georgia are the Georgian Lari, because the majority of their transactions by value is in Georgian Lari.

The presentational currency of the Group for year ended 31 December 2025 is US dollars. The presentational currency is an accounting policy choice.

Revenue

Revenue from contracts with customers is recognised when the Group satisfies its performance obligation of transferring control of oil or gas to a customer. Transfer of control is usually concurrent with both transfer of title and the customer taking physical possession of the oil or gas, which is determined by reference to the oil or gas sales agreement. This performance obligation is satisfied at that point in time.

The transaction price is agreed between the Group and the customer, with the amount of revenue recognised being determined by considering the terms of the Production Sharing Contract ("PSC") and the oil sales agreement for each oil sale or the gas sales agreement for each gas sale.

Finance Income and Expenses

Finance costs are accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable. Finance expenses comprise interest or finance costs on borrowings.

Financial Instruments

Financial assets and financial liabilities are recognised on the Group's balance sheet when the Group becomes party to the contractual provisions of the instrument.

Fair Value

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities, for which fair value is measured or disclosed in the Financial Statements, are categorised within the fair value hierarchy, described as follows, based on the lowest-level input that is significant to the fair value measurement as a whole:

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

Level 2 - valuation techniques for which the lowest-level input that is significant to the fair value measurement is directly or indirectly observable; and

Level 3 - valuation techniques for which the lowest-level input that is significant to the fair value measurement is unobservable.

Financial Assets

Financial assets are initially recognised at fair value, and subsequently measured at amortised cost, less any allowances for losses using the expected credit loss model, being the difference between all contractual cash flows that are due to the Group in accordance with the contract and all the cash flows that the Group expects to receive.

Impairment provisions for receivables from related parties and loans to related parties are recognised based on a forward-looking expected credit loss model. The methodology used to determine the amount of the provision is based on whether there has been a significant increase in credit risk since initial recognition of the financial asset.

For those where the credit risk has not increased significantly since initial recognition of the financial asset, twelve month expected credit losses along with gross interest income are recognised. For those for which credit risk has increased significantly, lifetime expected credit losses along with the gross interest income are recognised. For those that are determined to be credit impaired, lifetime expected credit losses along with interest income on a net basis are recognised.

Financial Liabilities

Financial liabilities are classified as either financial liabilities at fair value through profit and loss ("FVTPL") or as other financial liabilities. The Group derecognises financial liabilities when, and only when, the Group's obligations are discharged or cancelled, or they expire.

Financial liabilities are classified at FVTPL when the financial liability is either held for trading or it is designated at FVTPL. A financial liability is classified as held for trading if it has been incurred principally for the purpose of repurchasing it in the near term or is a derivative that is not a designated or effective hedging instrument.

Financial liabilities at FVTPL are measured at fair value, with any gains or losses arising on changes in fair value recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability.

Other financial liabilities, including borrowings, are initially measured at fair value, net of transaction costs and are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Share Based Payments

The fair value of options granted to Directors and others in respect of services provided is recognised as an expense in the Statement of Comprehensive Income with a corresponding increase in equity reserves - 'other reserves'.

On exercise of, or expiry of unexercised share options, the proportion of the share-based payment reserve relevant to those options is transferred from other reserves to the accumulated deficit. On exercise, equity is also increased by the amount of the proceeds received.

The fair value is measured at grant date and charged over the accounting periods which the option becomes unconditional.

The fair value of options are calculated using the Black-Scholes model, taking into account the terms and conditions upon which the options were granted. Vesting conditions are non-market and there are no market vesting conditions. These vesting conditions are included in the assumptions about the number of options that are expected to vest. At the end of each reporting period, the Company revises its estimate of the number of options that are expected to vest. The exercise price is fixed at the date of grant and no compensation is due at the date of grant. Where equity instruments are granted to persons other than employees, the statement of comprehensive income is charged with the fair value of the goods and services received.

Warrants issued for services rendered are accounted for in accordance with IFRS 2 recognising either the costs of the service if it can be reliably measured or the fair value of the warrant (using the Black-Scholes model).  The fair value is recognised as an expense in the accounting period that the warrant is granted and there is no revision to this estimate in future accounting periods.

Warrants issued as part of share issues have been determined as equity instruments under IAS 32.  Since the fair value of the shares issued at the same time is equal to the price paid, these warrants, by deduction, are considered to have been issued at nil value.

Employee Benefit Trust ("EBT")

The Group consolidates its Employee Benefit Trust as it is under its control. Shares held by the EBT are recorded in equity as a deduction in Other Reserves. When the Group issues shares to the EBT to satisfy employee share-based payments, the shares are recorded at cost in Other Reserves, consistent with the share-based payment expense recognised. This accounting treatment aligns the issuance of shares with the associated IFRS 2 charge recognised in equity.

2.      Critical Accounting Judgments, Estimates and Assumptions

The Group makes estimates and assumptions regarding the future. Estimates and judgements are continuously evaluated based on historical experiences and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In the future, actual experience may deviate from these estimates and assumptions. The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year, are described below.

Recoverable Value of Development & Production assets - Judgement, Estimates and Assumptions

Costs capitalised in respect of the Group's development and production assets are required to be assessed for impairment under the provisions of IAS 36. Such an estimate requires the Group to exercise judgement in respect of the indicators of impairment and also in respect of inputs used in the models which are used to support the carrying value of the assets. Such inputs include estimates of oil and gas reserves, production profiles, oil price, oil quality discount, capital expenditure (including an allocation of salary costs), inflation rates, and pre-tax discount rates that reflect current market assessments of (a) the time value of money; and (b) the risks specific to the asset for which the future cash flow estimates have not been adjusted. Some indicators of impairment were noted in the year, due to the market capitalisation being lower than the net asset value and the low oil price. Management therefore conducted an impairment test and concluded that no impairment was required. (see note 13).

Asset Decommissioning Provisions - Estimates and Assumptions

The Group's activities are subject to various laws and regulations governing the protection of the environment. The Group recognises management's best estimate of the asset decommissioning costs in the period in which they are incurred. Such estimates of costs include pre-tax discount rates that reflect current market assessments of (a) the risk free rate and (b) the risks specific to the asset for which the future cash flow estimates have not been adjusted. Actual costs incurred in future periods could differ materially from the estimates.

Additionally, future changes to environmental laws and regulations, life of development and production assets, estimates and discount rates could affect the carrying amount of this provision. The Board assessed the extent of decommissioning required as at 31 December 2025 and concluded that a provision of $960,000 (2024: $933,000) should be recognised in respect of future decommissioning obligations at Rustaveli, West Rustavi, Satskhenisi and Norio (see note 18).

Share Options and Warrants - Estimates and Assumptions

Share options issued by the Group relate to the Block Energy Plc Share Option Plan and warrants issued relates to the cost of borrowing. The grant date fair value of such options and warrants is calculated using a Black-Scholes model whose input assumptions are derived from market and other internal estimates.

The key estimates include volatility rates and the expected life of the options. (see note 23).

Impairment of Investments and Loans to Subsidiaries - Parent Company only

The Company assesses at each reporting date whether there is any objective evidence that investments/receivables in subsidiaries are impaired.  To determine whether there is objective evidence of impairment, a considerable amount of estimation is required in assessing the ultimate realisation of these investments/receivables, including valuation, creditworthiness and future cashflow. Although no impairment of investments was indicated at year end the Company identified certain intercompany receivables as being impaired.

During the year the Company carried out an assessment of the expected credit loss arising on intercompany receivables. This was calculated as a total loss allowance of $8,740,000 (2024: $8,402,000) therefore an additional amount of $338,000 (2024: $305,000) was provided for in the current year parent company financial statements.

3.    Segmental Disclosures

IFRS 8 requires segmental information for the Group on the basis of information reported to the chief operating decision maker for decision making purposes. The Company considers this role as being performed by the Board of Directors. The Group's operations are focused on oil and gas development and production activities (Oil and Gas Extraction segment) in Georgia and has a corporate head office in the UK (Corporate segment). Based on risks and returns the Directors consider that there are two operating segments that they use to assess the Group's performance and allocate resources being the Oil and Gas Extraction in Georgia, and the corporate segment including unallocated costs.

The Board of Directors primarily uses a measure of adjusted earnings before interest, tax, depreciation and amortisation ('EBITDA'), see below, to assess the performance of the operating sectors. 

3 a)  EBITDA

EBITDA excludes discontinued operations and the effects of significant items of income and expenditure which might have an impact on the quality of earnings, such as restructuring costs, legal expenses, and impairments where the impairment is the result of an isolated, non-recurring event.

EBITDA	31 December 2025 $'000	31 December  2024 $'000
Oil and Gas extraction - Georgia	1,410	2,758
Corporate and other	(2,345)	(1,697)
Total EBITDA	(935)	1,061

EBITDA reconciles to operating profit before income tax as follows:

	31 December  2025 $'000	31 December  2024 $'000
Total EBITDA	(935)	1,061
Depreciation and depletion	(1,290)	(1,236)
Finance and other income	102	68
Finance costs and foreign exchange	(395)	(502)
Loss before income tax from continuing operations	(2,518)	(609)

3 b)     Other profit and loss disclosures

	Oil and Gas Extraction	Corporate and other	Group      Total
Year ended 31 December 2025	$'000	$'000	$'000
Revenue	6,057	-	6,057
Cost of sales	(4,168)	-	(4,168)
Depreciation and depletion	(1,288)	(2)	(1,290)
Administrative costs	(817)	(1,812)	(2,629)
Share based payments	(86)	(109)	(195)
Finance and other income	57	45	102
Net Finance costs and Forex	(45)	(350)	(395)
Loss before taxation	(290)	(2,228)	(2,518)
Total non-current assets	23,551	4	23,555
Year ended 31 December 2024	$'000	$'000	$'000
Revenue	7,533	-	7,533
Cost of sales	(3,518)	-	(3,518)
Depreciation and depletion	(1,235)	(1)	(1,236)
Administrative costs	(944)	(1,624)	(2,568)
Share based payments	(312)	(74)	(386)
Finance and other income	64	4	68
Net Finance costs and Forex	(92)	(410)	(502)
Profit/(loss) before taxation	1,496	(2,105)	(609)
Total non-current assets	23,240	4	23,244

3 c)          Segment assets and liabilities

Segmental Assets	31 December 2025 $'000	31 December 2024 $'000
Oil extraction - Georgia	28,145	29,050
Corporate and other	1,548	433
	29,693	29,483

Segmental Liabilities	31 December 2025	31 December 2024
	$'000	$'000
Oil extraction - Georgia	1,371	1,514
Corporate and other	2,796	2,656
	4,167	4,170

4.       Revenue

	Year ended 31 December  2025 $'000	Year ended 31 December  2024 $'000
Crude oil revenue	5,326	6,678
Gas revenue	731	855
	6,057	7,533

5.      Depreciation and Depletion on Oil and Gas assets

	Year ended 31 December  2025 $'000	Year ended 31 December  2024 $'000
Depreciation of PP&E	322	311
Depletion of oil and gas assets	968	925
	1,290	1,236

6.      Expenses by nature

	Year ended 31 December  2025	Year ended 31 December  2024
	$'000	$'000
Employee benefit expense	1,238	1,367
Share option charge	195	386
Professional and legal	729	557
Fees paid to the Group auditor - Group audit fees	137	115
Regulatory fees	29	28
Operating lease expense	75	79
Office and other costs	421	422
	2,824	2,954

7.      Directors and employees

	Year ended 31 December  2025 $'000	Year ended 31 December  2024 $'000
Employment costs (inc. Directors' remuneration):
Wages and salaries	1,757	1,637
Pensions	61	33
Social security costs	35	58
	1,853	1,728
Share based payments	195	386
	2,048	2,114

The share-based payments comprised the fair value of options granted to Directors and employees in respect of services provided.

Wages and salaries include amounts that are recharged between subsidiaries, based on timesheets, which evidence the direct attribution of employee time to exploration and evaluation activities or the construction and development of assets; only costs directly attributable to bringing an asset to its intended condition are capitalised in accordance with IFRS 6 and IAS 16 respectively, with the remainder expensed as incurred.

Of the total, $287,000 (2024: $193,000) has been capitalised within intangibles and fixed assets, $328,000 (2024: $168,000) reported within cost of sales and the remainder of $1,238,000 (2024: $1,367,000 are classified in administration expenses.

The average monthly number of employees during 2025 was 119 (2024: 114) split as follows:

	Year ended 31 December 2025	Year ended 31 December 2024
Management	4	5
Technical	100	94
Administration	15	15
	119	114

	Year ended 31 December 2025 $'000	Year ended 31 December 2024 $'000
Amounts attributable to the highest paid Director:
Director's salary and bonus	607	581
Pension	31	28
Share based payments	-	24
	638	633

Key management and personnel are considered to be the Directors.

8.      Other income

	Year ended 31 December 2025 $'000	Year ended 31 December 2024 $'000
Other income	64	4
Impairment reversal	1	31
	65	35

9.       Finance Expense

	Year ended 31 December 2025 $'000	Year ended 31 December 2024 $'000
Interest paid and payable on borrowings (note 17)	323	311
Warrant cost of borrowings (note 22)	-	244
	323	555
Less borrowing costs capitalised (note 13)	-	(124)
	323	431
Unwinding of decommissioning provision (note 18)	42	44
	365	475

10.   Taxation

Based on the results for the year, there is no charge to UK or foreign tax. This is reconciled to the accounting loss as follows:

UK taxation	Year ended 31 December  2025 $'000	Year ended 31 December  2024 $'000
UK Group loss on ordinary activities	(2,518)	(609)
Loss before taxation at the average UK standard rate of 25% (2024:25%)	(629)	(143)
Effect of:
Zero tax rate income	(1,514)	(1,883)
Disallowable expenses	-	89
Tax losses for which no deferred income tax asset was recognised	(4,160)	(2,581)
Current tax	-	-

The Group offsets deferred tax assets and liabilities if, and only if, it has a legally enforceable right to offset current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities related to corporation taxes levied by the same tax authority. Due to the tax rates applicable in the jurisdictions of the Group's subsidiary entities (being 0% in both years) no deferred tax liabilities or assets are considered to arise.

The Group has not recognised deferred tax assets for tax losses carried forward in certain entities, where, whilst future profits are anticipated, the probability and expected timing of those profits are such that it is not considered sufficiently certain that the losses will be utilised within the foreseeable future.  Unrecognised deferred income tax assets relate to unused tax losses. The Company has UK corporation tax losses available to carry forward against future profits of approximately $12,278,000 (2024: $9,889,000 - estimated).

11.  Loss Per Share

The calculation for loss per Ordinary Share (basic and diluted) is based on the consolidated loss attributable to the equity shareholders of the Company is as follows:

	Year ended 31 December 2025	Year ended 31 December 2024
Loss attributable to equity Shareholders ($'000)	(2,518)	(609)
Weighted average number of Ordinary Shares	798,087,509	729,860,105
Loss per Ordinary share ($/cents)	(0.31)c	(0.08)c

Loss and diluted loss per Ordinary Share are calculated using the weighted average number of Ordinary Shares in issue during the year. Diluted share loss per share has not been calculated as the options and warrants have no dilutive effect given the loss arising in the year.

12.  Intangible Assets

	Exploration and Evaluation Assets ("E&E Assets")	CCS Project	Total
	$'000	$'000	$'000
Brought forward 1 January 2025	197	71	268
Capitalisation of Project costs	159	223	382
Acquisition of licence through GOG SLADS	95	-	95
Carried forward 31 December 2025	451	294	745

During the year, the Group capitalised $382,000 of directly-attributable expenditure: $159,000 in respect of E&E Assets (Project III and Project IV), principally reflecting technical and geological studies and licence-related costs incurred in advancing each project towards the next stage of development; and $223,000 in respect of the CCS project, reflecting Phase 2 feasibility activities including subsurface characterisation and project-definition work. A further $95,000 was capitalised in respect of the acquisition of a 10% participating interest in the XIQ PSC, indirectly through the purchase of GOG SLADS Limited (see further details in the Investments note below).

The Directors have assessed the carrying value of the Group's E&E assets ($451,000) at the reporting date for any indicators of impairment in accordance with IFRS 6. Specifically, the Directors have confirmed that the Group's rights to explore in each licence area remain valid and are expected to be renewed where applicable, that further substantive expenditure on each project is budgeted and planned, that exploration to date has not given rise to a decision to discontinue activities in any of the relevant areas, and that there is no other evidence to suggest that the carrying amount of any E&E asset is unlikely to be recovered in full. Accordingly, no indicators of impairment were identified and a full impairment review was considered unnecessary. 

The Directors have assessed the carrying value of the CCS project ($294,000) for impairment in accordance with IAS 38. As an intangible asset not yet available for use, an annual impairment test is required irrespective of whether any indicator exists. Having performed that test, the Directors are satisfied that the carrying amount is recoverable as the Phase 2 feasibility is being progressed and further institutional funding is being actively pursued. No amortisation is charged as the asset is not yet in use. No impairment charge has been recognised in the year (2024: $nil).

All amounts capitalised are considered recoverable on the basis of the technical and commercial progress of each project at the reporting date and the Group's continued plans for further work in the next financial year.

13.  Property, Plant and Equipment

	Development & Production Assets	PPE/Computer / Office Equipment / Motor Vehicles	Total
	$'000	$'000	$'000
Cost
At 1 January 2024	31,719	2,032	33,751
Additions*	408	161	569
Disposals	-	(27)	(27)
Change in decommissioning provision	(160)	-	(160)
Foreign exchange movements	-	(9)	(9)
At 31 December 2024	31,967	2,157	34,124
Additions*	939	182	1,121
Disposals	-	(7)	(7)
Change in decommissioning provision	(15)	-	(15)
Foreign exchange movements	-	14	14
At 31 December 2025	32,891	2,346	35,237
Accumulated depreciation
At 1 January 2024	8,985	914	9,899
Disposals	-	5	5
Charge for the year	925	311	1,236
Foreign exchange movements	(1)	9	8
At 31 December 2024	9,909	1,239	11,148
Charge for the year	968	322	1,290
Foreign exchange movements	-	(11)	(11)
At 31 December 2025	10,877	1,550	12,427
Carrying Amount
At 31 December 2024	22,058	918	22,976
At 31 December 2025	22,014	796	22,810

*This includes additions of $nil (2024: $124,000) which relates to capitalised borrowing costs.

During the year, indicators of impairment were identified, being the Group's market capitalisation below net asset value and the decline in average Brent crude from $80.52/bbl (2024) to $69.14/bbl (2025). Management conducted a formal IAS 36 impairment test across its producing assets.

The recoverable amount was determined on a value in use basis using a discounted cash flow model over a ten-year, ten-well development programme on Project I, applying a pre-tax discount rate of 10%. At a base case oil price of $80/bbl the NPV exceeded the total carrying value of $23.0m. Sensitivity analysis at $60/bbl and $100/bbl produced NPV¹⁰ values in excess of $23.0m. A case at NPV¹⁴ and $60 oil was also run which was also in excess of the carrying value. These calculations are conservative in that they exclude existing production as well as the significant contingent resources associated with the Patardzueli-Samgori field (part of Project III), which had an independent NPV¹⁰ of over $500m gross. Management concluded that no impairment was required under any scenario modelled.

Carrying amount of property plant and equipment by cash generative unit (CGU):

	Georgian	UK	Total
	$'000	$'000	$'000
Carrying amount:
At 31 December 2025	22,806	4	22,810
At 31 December 2024	22,971	5	22,976

The Directors have reassessed the Group's cash-generating unit ("CGU") structure during the year and have concluded that the Georgian producing assets, previously analysed as separate CGUs by licence, are more appropriately treated as a single CGU because the underlying fields and reservoirs overlap, the assets share common infrastructure, and the cash inflows generated by individual licences are not largely independent of one another. Internal management monitoring of the producing portfolio is also undertaken on an integrated basis. The comparative information has been re-presented on the same basis; the change has no impact on the carrying amount of property, plant and equipment.

14.  Inventory

	31 December 2025 $'000	31 December 2024 $'000
Spare parts and consumables	3,346	3,230
Crude oil	473	1,069
	3,819	4,299

The amount of Crude oil recognised as an expense during the year and included within cost of sales was $596,000 (2024: $22,000).

The Directors have assessed the recoverability of the Group's Spare parts and consumables ("consumables") at the reporting date, including those items identified as slow or non-moving. The consumables comprises operational drilling, workover and production materials whose consumption is event-driven, with cost recovery under the Group's Production Sharing Contracts arising only upon use; reusable items are expected to be redeployed across wells and projects in future periods. There is no indication of physical damage, technical obsolescence or excess of carrying value over replacement cost. Accordingly, the Directors have concluded that the carrying amount of consumables does not exceed net realisable value and that no impairment loss is required (2024: $nil).

15.  Trade and Other Receivables

	31 December 2025 $'000	31 December 2024 $'000
Trade debtors	635	574
Other receivables	125	118
Prepayments	66	112
	826	804

The fair value at amortised cost is considered to be equivalent to the book value as none of these receivables are considered to be impaired.

16.  Cash and Cash Equivalents

	31 December  2025 $'000	31 December 2024 $'000
Cash and cash equivalents	1,493	1,136

Cash and cash equivalents consist of balances in bank accounts used for normal operational activities. The vast majority of the cash was held in an institution with a Standard & Poor's credit rating of A-1.

17.  Trade and Other Payables

	31 December 2025 $'000	31 December 2024 $'000
Trade and other payables	521	740
Accruals	686	497
	1,207	1,237

Trade and other payables principally comprise amounts outstanding for corporate services and operational expenditure.

In 2023, the Company entered into a $2,000,000 loan with a simple interest rate of 16% becoming payable every quarter.  This was drawn down in two tranches, with $1,060,000 being drawn down on 1 February 2023 and the remainder of $940,000 being drawn down on 10 May 2023. 

On 31 July 2024, the Company announced the extension of this loan facility for a further 18 months to 2 February 2026, with each lender receiving further warrants with an exercise price of 0.85p and expiry date of 30 July 2027.  91,185,133 warrants were issued which corresponds to an exercise value equal to 50% of the total loan commitments under this facility.  More details of these warrants and their valuation are set out in note 22.

The loan was advanced for the purpose of the drilling of side tracks and associated works as part of the Company's Project development strategy in relation to the development of the Middle Eocene reservoir within West Rustavi/Krtsanisi (Project I).

Post year end, on 29 January 2026, the Company announced a further extension of this loan facility for a further 18 months to 2 August 2027 on materially the same terms. Each lender received warrants with an exercise price of 1.2p and expiry date of 28 January 2029. 60,386,474 warrants were issued which corresponds to an exercise value equal to 50% of the total loan commitments under this facility. The loan has been classified in short-term creditors as the extension was not agreed until after the year end.

18.  Provisions

Decommissioning provision	31 December 2025 $'000	31 December 2024 $'000
Brought forward	933	1,080
Unwinding of discount on provision	42	44
Change in decommissioning provision in the year	(15)	(191)
Carried forward	960	933

Decommissioning provisions are based on management estimates of work and the judgement of the Directors. By its nature, the detailed scope of work required, and timing of such work is uncertain.

	2025	2024
Risk-free discount rate	3.7% - 4.8%	4.5% - 4.9%
Long-term inflation rate	2.7%	2.9%
Remaining licence periods	5 - 22 years	6 - 23 years
Estimated cost to decommission (undiscounted)	$1.2m	$1.2m

19.  Share Capital

Called up, allotted, issued and fully paid		No. Ordinary  Shares	No. Deferred Shares	Nominal Value $
As at 31 December 2023	724,675,812		2,095,165,355	3,705,399

Issue of equity on 28 May 2024	2,264,648	-	7,220
Issue of equity on 28 May 2024	6,455,477	-	20,580
As at 31 December 2024	733,395,937	2,095,165,355	3,733,199

Issue of equity on 12 February 2025	35,912,008	-	111,372
Issue of equity on 27 May 2025	3,345,398	-	11,247
Issue of equity on 13 November 2025	214,282,000	-	704,278
Issue of equity on 21 November 2025	17,436,737	-	57,107
Issue of equity on 23 December 2025	7,275,412	-	24,584
As at 31 December 2025	1,011,647,492	2,095,165,355	4,641,787

On 12 February 2025, the Company issued 35,912,008 Ordinary Shares to two employees for payment of their 2024 bonuses.  This included one Executive Director who received 31,167,431 Ordinary Shares in lieu of cash payment of $285,538.

On 27 May 2025, the Company issued 3,345,398 Ordinary Shares to an ex-employee on exercise of their nil cost options.

On 13 November 2025, the Company raised gross proceeds of £1.5 million through a placing and subscription, issuing 214,282,000 new Ordinary Shares at a price of £0.007 per Ordinary Share.

On 21 November 2025, the Company issued 1,868,825 Ordinary Shares to a former employee as part of their severance package and 15,567,912 Ordinary Shares to current employees following the closure of the Group Employment Benefit Trust scheme.

On 23 December 2025, the Company issued a further 7,275,412 Ordinary Shares to current employees following the closure of the Group Employment Benefit Trust scheme.

On 28 May 2024, the Company issued 2,264,648 Ordinary Shares to two service providers in lieu of cash settlement for services provided to the Company with a total value of £24,000 ($30,604).

On 28 May 2024, the Company issued 6,455,477 Ordinary Shares to the Employee Benefit Trust at par value.

The Ordinary Shares consist of full voting, dividend and capital distribution rights and they do not confer any rights for redemption. The Deferred Shares have no entitlement to receive dividends or to participate in any way in the income or profits of the Company, nor is there entitlement to receive notice of, speak at, or vote at any general meeting or annual general meeting.

20.  Share Premium Account

		$'000
Balance at 1 January 2025		34,879
Premium arising on issue of equity shares		1,513
Cost of share issue		(90)
Premium arising on capital simplification exercise (see note 23)		656
Balance at 31 December 2025		36,958
		$'000
Balance at 1 January 2024		34,856
Premium arising on issue of equity shares		23
Balance at 31 December 2024		34,879

21.  Reserves

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

Reserves	Description and purpose
Share capital	Amount subscribed for share capital at nominal value.
Share premium account	Amount subscribed for share capital in excess of nominal value, less attributable costs.
Other reserves	Other reserves comprise the fair value of all share options and warrants which have been charged over the vesting period, net of the amount relating to share options which have expired, been cancelled and have vested. It also comprises the shares issued to the EBT so their value is matched against the options charged to this reserve.  This movement has been shown in the Consolidated Statement of the Changes in Equity and is also set out in the table below
Foreign exchange reserve	Exchange differences on translating the net assets of foreign operations
Accumulated deficit	Cumulative net gains and losses recognised in the income statement and in respect of foreign exchange.

Other Reserves		$'000
Balance at 1 January 2025		5,066
Share based payments		195
Share based payments - 2024 Bonus payments		94
Capital simplification		(732)
Options movement		(24)
Warrants and options cancelled		(2,158)
Balance at 31 December 2025		2,441
Balance at 1 January 2024		4,766
Share based payments		320
Share based payments - 2023 Bonus payments		312
Netting of EBT loan		(332)
Balance at 31 December 2024		5,066

The Employee Benefit Trust (EBT) loan has been netted off against reserves as the shares held by the trust are considered part of the group and, accordingly, have been treated like treasury shares for consolidation purposes.

22.  Warrants

	Number of Warrants	31 December 2025 weighted average exercise price	Number of Warrants	31 December 2024 weighted average exercise price
Outstanding at the beginning of the year	145,426,970	1.33p	54,241,837	2.2p
Granted in the year	107,140,000	1.0p	91,185,133	0.85p
Expired in the year	(8,750,167)	3.0p	-	-
Outstanding at the end of the year	243,816,803	1.13p	145,426,970	1.33p

As at 31 December 2025, all warrants were available to exercise and were exercisable at prices between 0.85p and 12.5p (31 December 2024: 0.85p and 12.5p). The weighted average life of the warrants is 1.03 years (31 December 2024: 2.0 years).

The warrants granted in the year related to the Fundraise completed during the year and were issued as Investor Warrants on the basis of 1 warrant for every 2 new Ordinary Shares subscribed, with an exercise price of 1.0p and an expiry date of 12 December 2026.  The warrants meet the criterion in IAS 32 and were issued to investors as part of an equity-for-cash transaction; they have accordingly been recognised in equity, with no charge to profit or loss (IFRS 2 does not apply as the Warrants were not issued in exchange for goods or services).

The warrants granted during the prior year related to the cost of borrowing and therefore a fair value was calculated using the Black-Scholes Model.  This resulted in fair value charge of $244,000 being assigned to the warrants granted to the lenders.  The inputs used for the model are shown below in note 23.

23.  Share Options and Share Based Payments

On 14 November 2025, the Company announced a simplification of its capital structure. The Company reviewed its capital structure and considered the volume of unexercised share options - which, including both salary-sacrifice nil-cost options and incentive plan options, comprise around 11.3% of fully diluted share capital - to be a material overhang, highlighting the need for simplification. This was completed through a voluntary scheme whereby staff members holding options were given the choice to be issued with new ordinary shares of 0.25 pence ("Shares") in the Company in exchange for cancelling all outstanding options held by them or they could stay in the Scheme.  All staff members agreed to cancel their options and this Share Option Scheme ("EBT Scheme") was closed.

In determining the number of new Shares to be issued to each option holder, the Company has taken into account the Black-Scholes calculation of the current fair value of existing options held by each option holder. The Board believes that the value of new Shares to be issued to each respective option holder (at the current share price - being the closing mid-market price of 0.75 pence per share at close of business 13 November 2025) to be equal to or less than the intrinsic value of the options held using the Black-Scholes valuation model.  These new shares were issued via both the Employee Benefit Trust (EBT) and the Company.

In addition, former members of staff, who had been issued a total of 9,434,291 nil-cost options as part of the salary sacrifice scheme, but who subsequently left the Company were issued new three-year nil-cost options with an exercise period ending 14 November 2028. This issue accounts for the unintended consequence of the option agreements issued to them at the time which contained provisions to lapse salary sacrifice options 90 days after the cessation of their employment. To address a legacy administrative provision in the agreements affecting salary sacrifice options, the Company has issued new nil-cost options to former employees on the same terms as would have applied had their awards remained active. This was under the new share option scheme "Scheme 2025".

	Number issued
Shares issued through EBT Scheme	70,657,687
Shares issued through Company (November and December 2025)	22,843,324
Total shares issued	93,501,011
New options issued to former employees ("Scheme 2025")	9,434,291

Share Option Scheme ("EBT Scheme")

The vesting period varies between 0 days to 3 years. The options expire if they remain unexercised after the exercise period has lapsed and have been valued using the Black-Scholes model.

The following table sets out details of all outstanding options granted under the EBT Scheme.

	2025	2025	2024	2024
	Options	Weighted average exercise price	Options	Weighted average exercise price
Outstanding at beginning of year	130,395,579	$0.01	99,785,841	$0.01
Granted during the period to 13 November 2025	10,548,289	$0.01	30,909,737	$0.01
Exercised during the period	(5,399,063)	-	-	-
Expired during the period	-	$0.02	300,001	$0.02
Outstanding on 13 November 2025	135,544,805	$0.01	130,395,579	$0.01
Options cancelled on closure of Scheme	(135,544,805)	-	-	-
Exercisable at the end of the period	-	-	95,190,127	-

The weighted average exercise price of the share options exercisable at 13 November is $0.00 (31 December 2024: $0.01). The weighted average contractual life of the share-based payments outstanding at 13 November is 0 years (31 December 2024: 9.16 years).

The estimated fair values of these share options, and the inputs used in the Black-Scholes model to calculate those fair values are as follows:

Date of grant	Number of options	Estimated fair value	Share price	Exercise price	Expected volatility	Expected life	Risk free rate	Exp. dividends
30 June 2017	1,200,000	$0.04	$0.01	$0.03	84%	5.5 years	1.16%	0%
6 April 2018	4,400,000	$0.05	$0.04	$0.03	84%	10 years	1.34%	0%
11 June 2018	18,098,332	$0.04	$0.05	$0.05	84%	10 years	1.23%	0%
21 October 2019	6,325,000	$0.05	$0.06	$0.15	109%	9.0 years	0.63%	0%
1 March 2021	10,800,00	$0.04	$0.04	$0.06	192%	9.5 years	0%	0%
8 April 2022	25,200,000	$0.01	$0.02	$0.02	105%	10 years	1.75%	0%
28 May 2024	8,301,887	$0.01	$0.013	$0.013	70.5%	10 years	4.55%	0%
	Number of warrants
31 December 2020	8,750,167	$0.04	$0.04	$0.04	190%	5 years	0%	0%
1 February 2023	25,330,249	$0.003	$0.012	$0.017	70.5%	3 years	3.76%	0%
10 May 2023	19,352,394	$0.003	$0.013	$0.019	70.5%	3 years	3.57%	0%
2 August 2024	91,185,133	$0.004	$0.009	$0.009	70.5%	3 years	3.71%	0%

All share-based payment charges are calculated using the fair value of options.

The following charges were incurred on the issue of the new options to former employees and represent the only share options outstanding at year end.

	2025	2025
	Options	Weighted average exercise price
Outstanding on 14 November 2025	-	-
Granted on 12 December 2025	9,434,291	$nil
Exercisable at 31 December 2025	9,434,291	-

These nil cost options expire on 12 December 2028. They have a 3 year life and were valued at the market price on issue being $0.01 (£0.0075). 

Under IFRS 2, an expense is recognised in the statement of comprehensive income for share based payments, to recognise their fair value at the date of grant. The application of IFRS 2 gave rise to a charge of $ 195,000 for the year ended 31 December 2025. The equivalent charge for the year ended 31 December 2024 was $ 386,000. The Group recognised total expenses (all of which related to equity settled share-based payment transactions) under the current plans of:

	Year ended 31 December 2025	Year ended 31 December 2024
	$'000	$'000
Share option scheme (EBT) - before closure	102	386
New Share option scheme - "Scheme 2025"	93	-
	195	386

For the options and warrants granted in 2023 to 2025, expected volatility was determined by reviewing benchmark values from comparator companies. For the options granted prior to 2023, expected volatility was determined by reference to the volatility of historic trading prices of the Company's shares.

24.  Financial Instruments

Capital Risk Management

The Company manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders. The overall strategy of the Company and the Group is to minimise costs and liquidity risk.

The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued share capital, foreign exchange and other reserves and retained earnings as disclosed in the Consolidated Statement of Changes of Equity.

The Group is exposed to a number of risks through its normal operations, the most significant of which are interest, credit, foreign exchange and liquidity risks. The management of these risks is vested to the Board of Directors.

The sensitivity has been prepared assuming the liability outstanding was outstanding for the whole period. In all cases presented, a negative number in profit and loss represents an increase in finance expense/decrease in interest income.

Credit Risk

Credit risk is the risk that the Group will suffer a financial loss as a result of another party failing to discharge an obligation and arises from cash and other liquid investments deposited with banks and financial institutions and receivables from the sale of crude oil.

For deposits lodged at banks and financial institutions these are all held through recognised financial institutions. The maximum exposure to credit risk is $1,493,000 (2024: $1,136,000). The Group does not hold any collateral as security.

The carrying value of cash and cash equivalents and financial assets represents the Group's maximum exposure to credit risk at year end. The Group has no material financial assets that are past due.

The Company has made unsecured loans at a simple interest rate of 5% to its subsidiary companies.  The loans are repayable on demand.  A small amount of these loans have been made to subsidiaries which though revenue generating are not profit making, therefore there is a risk that they will not be fully recoverable. An assessment of the expected credit loss arising on intercompany loans is detailed in note 6 to the parent Company financial statements.

Market Risk

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices.  Market risk for the Company comprises of currency risk (discussed below) and interest rate risk. Since there are no variable interest-bearing loans in the Group (the Group Borrowings are set at a fixed rate of 16%), no risk is therefore identified.

Currency Risk

Foreign currency risk can only arise on financial instruments that are denominated in a currency other than the functional currency in which they are measured. Translation-related risks are therefore not included in the assessment of the entity's exposure to currency risks. Translation exposures arise from financial and non-financial items held by an entity (for example, a subsidiary) with a functional currency different from the Group's presentational currency. However, foreign currency-denominated inter-company receivables and payables which do not form part of a net investment in a foreign operation would be included in the sensitivity analysis for foreign currency risks; this is because, even though the balances eliminate in the consolidated balance sheet, the effect on profit or loss of their revaluation under IAS 21 is not fully eliminated.

A 10% increase in the strength of the pound sterling against the US dollar would cause an estimated increase of $30,000 (2024: $94,000 increase) in the loss after tax of the Group for the year ended 31 December 2025, with a 10% weakening causing an equal and opposite decrease.  The impact on equity is the same as the impact on loss after tax.

The Group's cash and cash equivalents and liquid investments are mainly held in US dollars, pounds sterling and Georgian Lari. At 31 December 2025, 90% (2024: 1%) of the Group's cash and cash equivalents and liquid investments were held in pounds sterling, 4% (2024: 67%) in Georgian Lari and 6% (2024: 32%) in US dollars.

Liquidity Risk

Liquidity risk arises from the possibility that the Group and its subsidiaries might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. In addition to equity funding, additional borrowings have been secured in the past to finance operations. The Company manages this risk by monitoring its financial resources and carefully plans its expenditure programmes. Financial liabilities of the Group comprise trade payables which mature in less than twelve months.

Type	<3 months	3-12 months	1-2 years	Total
	$'000		$'000	$'000
Trade payables	1,080	43	84	1,207
Borrowings	2,000	-	-	2,000
Total	3,080	43	84	3,207

25.  Categories of Financial Instruments

In terms of financial instruments, these solely comprise of those measured at amortised cost and are as follows:

	31 December 2025 $'000	31 December 2024 $'000
Liabilities at amortised cost	1,207	1,237
Borrowings at amortised cost	2,000	2,000
	3,207	3,237
Cash and cash equivalents at amortised cost	1,493	1,136
Financial assets at amortised cost	760	804
	2,253	1,940

A fixed and floating charge has been placed over the assets owned by the Group as security for the $2m borrowings. This will be discharged in full on payment of these secured liabilities.

26.  Subsidiaries

At 31 December 2024 and 2025, the Group consists of the following subsidiaries, which are wholly owned by the Company.

Company	Country of Incorporation	Proportion of voting rights and equity interest
Block Norioskhevi Ltd	British Virgin Islands	100%
Satskhenisi Ltd	Marshall Islands	100%
Georgia New Ventures Inc.	Bahamas	100%
Block Operating Company LLC	Georgia	100%
Block Rustaveli Limited	British Virgin Islands	100%
Didi Lilo & Nakarala Limited	British Virgin Islands	100%
GOG SLADS Limited	British Virgin Islands	100% (acquired in 2025)

Subsidiaries - Nature of business

The principal activity of Georgia New Ventures Inc, Satskhenisi Ltd, Block Norioskhevi Ltd, Block Rustaveli Limited, Didi Lilo & Nakarala Limited and GOG SLADS is oil and gas development and production.

The principal activity of Block Operating Company LLC is to be the operator of the oil and gas licences held in Georgia.

Registered office

The registered office of Georgia New Ventures Inc. is Bolam House, King and George Streets, P.O. Box CB 11.343, Nassau, Bahamas.

The registered office of Satskhenisi Ltd is Trust Company Complex, Ajeltake road, Ajeltake Island, Majuro, Marshall Islands MH96960.

The registered office of Block Rustaveli Limited, Block Norioskhevi Ltd, Didi Lilo & Nakarala Limited and GOG SLADS is Aleman, Cordero, Galindo & Lee Trust (BVI) Limited, 4^th Floor, Omar Hodge Building, Road Town, Tortola, VG1110, British Virgin Islands.

The registered office of Block Operating Company LLC is 13A Tamarashvili Street, Tbilisi 0162, Georgia.

27.  Commitments

Commitments at the reporting date that have not been provided for were as follows:

Operating lease commitment

At year end the total of future minimum lease payments under non-cancellable operating leases for each of the following periods was:

	31 December 2025 $'000	31 December 2024 $'000
Within 1 year	69	69
Between 1 and 5 years	-	-
Total	69	69

Short term leases are leases with a lease term of 12 months or less without a purchase option and are recognised on a straight-line basis as an expense in the profit or loss account.

28.  Related Party Transactions

The Directors consider that there is no ultimate controlling party.

Key management personnel comprise of the Directors and details of their remuneration are set out in Note 7 and the Remuneration Report.

29. Events Occurring After Year End

Project IV (XIQ) Farm-Out Completion

On 19 January 2026, the Company announced completion of the farm-out of licence XIQ (part of Project IV) to Aspect Georgia, following receipt of Government of Georgia approval. Under the transaction, Block is fully carried through a staged work programme estimated at approximately US$95 million, including seismic, exploration and appraisal drilling and early production facilities, with no capital exposure to Block. Aspect may earn up to a 75% working interest, with an option to increase to 92.5% subject to additional consideration.

Loan Facility Extension and Warrants

On 29 January 2026, the Company announced an 18-month extension of its existing secured loan facility, taking the new maturity date to 2 August 2027 on materially the same terms. In consideration for the extension, each lender was issued new warrants with an exercise price of 1.20 pence per Ordinary Share, exercisable until 2 February 2029, with the number of New Warrants issued to each lender equating to an exercise value of 50% of that lender's loan commitment. Paul Haywood, CEO, participated pro rata on the same terms as the other lenders in respect of his US$115,000 loan commitment and was issued 3,472,222 New Warrants. The independent directors, having consulted with the Company's nominated adviser, considered the terms of the related party element to be fair and reasonable insofar as shareholders are concerned.

CCS Pilot Study Completion

On 16 February 2026, the Company announced completion of the Phase 1 CCS pilot study. Independent analysis by OPC confirmed the technical viability of permanent carbon storage at Patardzueli-Samgori, with complete mineralisation of the injected CO₂ into stable carbonate minerals within one to three months and no evidence of gas phase migration or leakage.

Bonus Shares and Nil-Cost Options

On 23 February 2026, the Company issued 30,428,200 new Ordinary Shares and granted 9,231,083 nil-cost options to senior executives as performance-related bonuses in respect of the year ended 31 December 2025. The awards were determined by reference to the volume-weighted average share price of 0.93 pence in January 2026. Of the shares issued, 25,922,903 were issued to Paul Haywood, increasing his beneficial holding to 129,420,155 Ordinary Shares (representing approximately 8.81% of the Company's issued share capital as of the date of this report).

Project III Farm-Out Framework Agreement

On 14 April 2026, the Company entered into a binding Framework Agreement with Sanning in respect of a farm-out of Project III only. On completion, Sanning will acquire a 51% participating interest in Project III, Block will retain a 49% participating interest and remain operator throughout the appraisal programme, and the transaction provides for an up to US$75 million carry across appraisal and early facilities workstreams, subject to definitive documentation, approvals and relevant project elections. The transaction does not affect Block's ownership of Projects I, II, CCS, IX or existing oil and gas production.

Strategic Entry into Offshore Gabon and associated Fundraise

On 27 April 2026, the Company announced a conditional secured convertible loan of US$6.0 million to Pilgrim Exploration Limited which, upon conversion and subject to any required approvals, will deliver the Group a 76.5% indirect economic interest in the Ndjila and Mpari PSCs offshore Gabon. The PSCs cover 5,331 km² and contain four historical oil discoveries, together with broader pre- and post-salt upside.

To fund the Gabon entry and provide additional working capital, the Company launched a placing and WRAP retail offer at 1.1 pence per Ordinary Share. The placing and retail offer raised gross proceeds of approximately US$6.30 million (approximately £4.66 million). The fundraise comprised 77,314,000 Firm Fundraise Shares and 345,893,916 Conditional Fundraise Shares, including the Retail Offer Shares. The Firm Fundraise Shares were admitted to AIM on 1 May 2026 and, following shareholder approval at the General Meeting held on 18 May 2026, the Conditional Fundraise Shares were admitted to AIM on 19 May 2026, taking the enlarged issued share capital to 1,469,379,955 Ordinary Shares.

Parent Company Statement of Financial Position for the Year Ended 31 December 2025

Company number: 05356303

	Note	2025 $'000	2024 $'000
Non- current assets
Investments	2	7,032	6,422
Property, plant and equipment		4	4
		7,036	6,426
Current assets
Trade and other receivables	3	22,258	21,994
Cash and cash equivalents	4	1,435	379
Total current assets		23,693	22,373
Total assets		30,729	28,799
Capital and reserves attributable to equity shareholders
Share capital	5	4,642	3,733
Share premium	5	36,958	34,879
Other reserves	5	2,441	5,066
Foreign exchange reserve		491	(89)
Accumulated deficit		(16,600)	(17,446)
Total equity		27,932	26,143
Non-current liabilities
Borrowings	11	-	2,000
Total non-current liabilities		-	2,000
Current liabilities
Trade and other payables	6	797	656
Borrowings	11	2,000	-
Total current liabilities		2,797	656
Total liabilities		2,797	2,656
Total equity and liabilities		30,729	28,799

The Company has taken advantage of the exemption under section 408 of the Companies Act 2006 by choosing not to present its individual Statement of Comprehensive Income and related notes that form part of these approved financial statements.

The Company's loss for the year from continuing operations is $1,312,000 (2024: loss of $1,033,000).

The financial statements were approved by the Board of Directors and authorised for issue on 30 May 2026 and were signed on its behalf by:

Paul Haywood

Director

The notes on pages 88 to 92 form part of these financial statements.

Parent Company Statement of Changes in Equity for the Year Ended 31 December 2025

	Share capital	Share premium	Accumulated deficit	Other reserve	Foreign currency reserve	Total equity
	$'000	$'000	$'000	$'000	$'000	$'000
Balance at 31 December 2023	3,705	34,856	(16,413)	4,766	59	26,973
Comprehensive income
Loss for the year	-	-	(1,033)	-	-	(1,033)
Exchange differences on translation of foreign operations	-	-	-	-	(148)	(148)
Total comprehensive income for the year	-	-	(1,033)	-	(148)	(1,181)
Transactions with owners recognised directly in equity
Shares issued	28	23	-	-	-	51
Share based payments	-	-	-	632	-	632
Shares held by EBT	-	-	-	(332)	-	(332)
Total transactions with owners	28	23	-	300	-	351
Balance at 31 December 2024	3,733	34,879	(17,446)	5,066	(89)	26,143
Comprehensive income
Loss for the year	-	-	(1,312)	-	-	(1,312)
Exchange differences on translation of foreign operations	-	-	-	-	580	580
Total comprehensive income for the year	-	-	(1,312)	-	580	(732)
Transactions with owners recognised directly in equity
Shares issued	898	2,156	-	(656)	-	2,398
Cost of issue	-	(90)	-	-	-	(90)
Share based payments	-	-	-	195	-	195
Other reserve movement	-	-	-	18	-	18
Options exercised	11	13	-	(24)	-	-
Expired warrants and options	-	-	2,158	(2,158)	-	-
Total transactions with owners	909	2,079	2,158	(2,625)	-	2,521
Balance at 31 December 2025	4,642	36,958	(16,600)	2,441	491	27,932

The notes on pages 88 to 92 form part of these financial statements.

Parent Company Statement of Cash Flows for the Year Ended 31 December 2025

	Note	2025 $'000	2024 $'000
Cash flow from operating activities
Loss for the year before income tax		(1,312)	(1,033)
Adjustments for:
Depreciation		2	1
Intercompany interest and other income		(1,386)	(1,381)
Finance expense		323	431
Increase in ECL provisions for loans	10	338	305
Payables paid in shares		21	31
Share based payments expense		109	353
Foreign exchange movement		25	(19)
Operating cash flows before movements in working capital		(1,880)	(1,312)
(Increase)/decrease in trade and other receivables	3	(60)	303
Movement in trade and other payables*	6	469	(79)
Net cash used in operating activities		(1,471)	(1,088)
Cash flow from investing activities
Finance and other income		40	4
Expenditure in respect of investments/Fixed assets		(78)	-
Inter-Group amounts received (net)		1,006	1,617
Net cash used in investing activities		968	1,621
Cash flow from financing activities
Proceeds from share issues	5	1,972	-
Cost of share issues	5	(90)	-
Finance costs		(323)	(311)
Net cash inflow/(outflow) from financing activities		1,559	(311)
Net increase in cash and cash equivalents in the year		1,056	222
Cash and cash equivalents at start of year		379	157
Cash and cash equivalents at end of year	4	1,435	379

Significant non-cash transactions*

During the year, accrued liabilities of $329,000 were extinguished through the issue of ordinary shares. This represents a non-cash financing transaction and has been excluded from the statement of cash flows. The shares were issued at 0.74p (0.92c) per share.

The notes on pages 88 to 92 form part of these financial statements.

Notes Forming Part of the Parent Company Financial Statements

1. Accounting policies

Basis of Preparation

These financial statements have been prepared on a historical cost basis and in accordance with UK-adopted international accounting standards and as regards the Company financial statements, as applied in accordance with the requirements of the Companies Act 2006. All accounting policies are consistent with those adopted by the Group. These accounting policies are detailed in the notes to the consolidated financial statements, note 1. Any deviations from these Group policies by the Company are detailed below.

Going Concern

The Directors have prepared cash flow forecasts for a period of 12 months from the date of signing these financial statements. More details are included in note 1 to the consolidated financial statements.

Investments in Subsidiaries

Investments in subsidiaries are recorded at cost. The Company assesses investments for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.  If any such indication of impairment exists, the Company makes an estimate of its recoverable amount.  Where the carrying amount of an investment exceeds its recoverable amount, the investment is considered impaired and is written down to its recoverable amount.  Where these circumstances have reversed, the impairment previously made is reversed to the extent of the original cost of the investment. 

2.    Investments

Shares in Group undertakings	2025 $'000	2024 $'000
Balance at 1 January	6,422	6,533
Acquisition of subsidiary	127	-
FX movement on translation of assets	483	(111)
Balance at 31 December	7,032	6,422

Investments in subsidiaries are recorded at cost, which is the fair value of the consideration paid.

On 24 March 2025, the Company entered into a Share Purchase Agreement with Georgia Oil & Gas Limited ("GOGL") under which the Company acquired 100% of the issued share capital of GOG SLADS Limited ("GOG SLADS"), a company incorporated in the British Virgin Islands (registered number 2033094). The total cost of the investment recognised at year end comprises:

	2025 $'000
Cash consideration paid to GOGL ($1)	-
Contribution paid in relation to net work programme costs	77
Costs previously incurred through Didi Lilo - reclassified	50
Balance at 31 December	127

US$50,000 of directly-attributable acquisition costs, originally capitalised as an intangible asset within Didi Lilo, has been reclassified during the year into the cost of investment in GOG SLADS, with the corresponding intercompany balance unwound. The reclassification is non-cash and has no impact on the consolidated net assets of the Group.

The principal activity of GOG SLADS Limited is the holding of a 10% participating interest in the XIQ PSC, an oil and gas exploration block in Georgia, which, following the completion of the farm-out to Aspect Georgia in 2026 is now a 9.5% participating interest in the XIQ PSC.

At 31 December 2025, the carrying amount of the Company's net assets of $27,932,000 (2024: $26,143,000) exceeded the Group's net assets of $25,526,000 (2024: $25,313,000) which is identified by IAS 36 Impairment of Assets as an indicator that assets may be impaired. A formal impairment review of the underlying Group assets was conducted, the results of which are set out in Note 13 above. The recoverable amount of the CGUs, assessed on a value in use basis at a pre-tax discount rate of 10%, exceeded their carrying value of $22,980,000 in all scenarios modelled.

In respect of the Company's investments in subsidiaries and intercompany loans, the Directors are satisfied these are recoverable. The carrying value is underpinned by the ongoing cash-generative nature of Project I (independently valued in 2022 for a 5-well programme at $57m NPV¹⁰ on a 3P basis) and, given the significant independently assessed NPV attached to each of Projects III and IV individually - including the Patardzueli-Samgori field's (part of Project III) independently valued NPV¹⁰ of over $500m - the recoverability of the carrying value is supported by the potential of any one of these projects alone. The Company's market capitalisation of $9.6m at 31 December 2025 also exceeded the total cost of investments carried in the Company balance sheet of $7.0m. Accordingly, no impairment of the Company's investments or intercompany loans is considered necessary.

3.    Trade and Other Receivables

	2025 $'000	2024 $'000
Prepayments	66	12
Other receivables	44	37
Amounts due from Group undertakings	22,148	21,945
	22,258	21,994

All of the above amounts are due within one year.

All trade and other receivables are denominated in pounds sterling. Amounts due from Group undertakings are denominated in US dollars and repayable on demand. The Company charges 5% interest per annum on intercompany loans. 

Under IFRS 9, the Expected Credit Loss ("ECL") Model is required to be applied to the intercompany loans receivable from subsidiary companies, which are held at amortised cost. An assessment of the expected credit loss arising on intercompany loans has been calculated and a cumulative loss allowance of $8,740,000 has been provided for in the parent Company financial statements ($8,402,000 in 2024). A charge of $338,000 (2024: $305,000) was made in the year.

4.    Cash at Bank

	2025 $'000	2024 $'000
Cash and cash equivalents	1,435	379

Cash and cash equivalents consist of balances in bank accounts used for normal operational activities. The bank account is held within an institution with a credit rating of A-1.

At 31 December 2025, 93% (2024: 2%) of the cash balances held by the Company were held in pounds sterling, 7% (2024: 97%) in US dollars and nil (2024: 1%) in other currencies.

5.    Share Capital and Reserves

Details of share capital and reserve movements in the year are set out in notes 19 and 21 to the consolidated financial statements.

6.   Trade and Other Payables

	2025 $'000	2024 $'000
Trade and other payables	110	128
Accruals and other creditors	687	528
	797	656

Trade and other payables at 31 December 2025 comprised balances in US dollars and pounds sterling.

7.    Categories of Financial Instruments

                   In terms of financial instruments, these solely comprise of those measured at amortised cost and are as follows:

	31 December 2025	31 December 2024
	$'000	$'000
Trade and other payables	110	158
Borrowings	2,000	2,000
Total financial liabilities at amortised cost	2,110	2,158

The carrying amounts of trade and other payables and the Borrowings are considered to be the same as their fair values due to their short-term nature.  Details of the Borrowings are set out in note 17 to the consolidated financial statements.

	31 December 2025	31 December 2024
	$'000	$'000
Other receivables	44	37
Amounts due from Group undertakings	22,148	21,945
Cash and cash equivalents at amortised cost	1,435	379
Total financial assets at amortised cost	23,627	22,361

The amounts due from Group undertakings includes a loss allowance of $8,740,000 (2024: $8,097,000). The loans are repayable on demand and include a 5% (2024: 5%) per annum interest rate charge. They are all denominated in US dollars, which differs from the parent Company's functional currency of pounds sterling, and therefore there is an exposure to foreign currency risk. There is no exposure to price risk as the underlying investments are expected to be held to maturity.

8.      Financial and Capital Risk Management

The Company's exposure to financial risks is managed as part of the Group. Full details about the Group's exposure to financial risks and how these risks could affect the Group's future financial performance are given in note 24 to the consolidated financial statements. Information specific to the Company is given below.

Credit Risk

For deposits lodged at banks and financial institutions these are all held through recognised financial institutions. The maximum exposure to credit risk is $1,435,000 (2024: $379,000). The Company does not hold any collateral as security.

The Company has made unsecured interest payable loans to its subsidiary companies and repayments have commenced during the year. Although the loans are repayable on demand, they are unlikely to be fully repaid until the projects become more developed and the subsidiaries start to generate increased revenues. An assessment of the expected credit loss arising on intercompany loans has been calculated and a loss allowance of $8,740,000 (2024: $8,402,000) has been provided for in the parent Company financial statements.

Currency Risk

Foreign currency risk is the risk that fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign exchange rates.

The Company undertakes transactions denominated in currencies other than its functional currency (which is the pound sterling). For transactions denominated in US dollars, the Company manages this risk by holding US dollar against actual or expected US dollar commitments to act as an economic hedge against exchange rate movements.

The Company's cash and cash equivalents and liquid investments are mainly held in pounds sterling and US dollars. At 31 December 2025, 1% (2024: 1%) of the Group's cash and cash equivalents and liquid investments were held in a currency other than pounds sterling and US dollars. The currency risk is not considered to be significant and has not been calculated.  A 10% movement in the strength of the pound sterling against the US dollar would increase the net assets of the Company by $2,767,000 (2024: $2,697,000).

The exposure to other foreign currency exchange movements is not material. This sensitivity analysis includes foreign currency denominated monetary items and assumes all other variables remain unchanged. Whilst the effect of any movement in exchange rates upon revaluing foreign currency denominated monetary items is charged or credited to the income statement, the economic effect of holding pounds sterling against actual or expected commitments in pounds sterling is an economic hedge against exchange rate movements.

Capital Management

The capital of the Company is managed as part of the capital of the Group as a whole. Full details are contained in note 24 to the consolidated financial statements.

9.    Commitments

Commitments at the reporting date that have not been provided for were as follows:

UK operating lease commitment

At 31 December 2025, the total of future minimum lease payments under non-cancellable operating leases for each of the following periods was:

	2025 $'000	2024 $'000
Within 1 year	55	42
Between 1 and 5 years	-	-
Total	55	42

Short term leases are leases with a lease term of 12 months or less without a purchase option and are recognised on a straight-line basis as an expense in the profit or loss account.

10.   Related Party Transactions

At 31 December 2025, the following subsidiaries owed the parent Company for payments made and recovered on their behalf.

·    Block Norioskhevi Ltd - $nil  (31 December 2024: $nil)

·    Georgia New Ventures Inc - $21,952,000 (31 December 2024: $22,291,000)

·    Satskhenisi Ltd - $nil (31 December 2024: $nil)

·    Block Operating Company LLC - $2,775,000  (31 December 2024: $2,612,000)

·    Block Rustaveli Limited - (Debtor of $2,581,000) (31 December 2024: Debtor of $3,394,000)

·    Didi Lilo & Nakarala Limited - $nil (31 December 2024: $68,000)

·    GOG SLADS Limited - $2,000

An estimated credit loss of $338,000 (2024: $305,000) was recognised in the current year in relation to the loans to Satskhenisi Ltd, Block Norioskhevi Ltd and Didi Lilo & Nakarala Limited, resulting in their impairment to a nil carrying amount.  The total estimated credit loss recognised to date is $8,740,000 (2024: $8,402,000). Further details on related party transactions can be found in note 28 to the consolidated financial statements.

11.   Information Included in the Notes to the Consolidated Financial Statements

Some of the information included in the notes to the consolidated financial statements is directly relevant to the financial statements of the Company. Please refer to the following:

Note 6 - Auditors' remuneration

Note 17 - Trade and other payables

Note 23 - Share based payments

Note 26 - Subsidiaries

Note 29 - Events occurring after the year end

 

END