www.nauticalpetroleum.com
Nautical Petroleum plc
Annual Report and Accounts 2009
Nautical Petroleum Annual Report and Accounts 2009
www.nauticalpetroleum.com
Nautical Petroleum plc
 
Parnell House
25 Wilton Road
London
SW1V 1YD
T: 020 7550 4890
F: 020 7550 4946 Nautical Petroleum plc  
is an independent 
hydrocarbon exploration 
and development company 
listed on the London AIM. 
The Company’s mission  
is to acquire, develop and 
add value to discovered 
heavy oil, on the United 
Kingdom Continental 
Shelf and Europe.
Contents
Business review
Highlights 2009 01
The heavy oil market 02
Chairman’s statement 04
Chief Executive’s review 06
Operational review  
 Our portfolio 08
 UK continental shelf 10
 France  18
Finance Director’s review 20
Board of Directors 22
Governance 
Directors’ report 24
Remuneration report 27
Corporate governance 28
Directors’ responsibilities  
for the financial statements 30
Independent auditors’ report 31
 
Accounts
Consolidated income statement 32
Consolidated balance sheet 33
Consolidated statement  
of changes in equity 34
Consolidated cash flow statement 35
Notes to the financial statements 36
Nautical Petroleum plc Company  
only accounts 2009 51
Independent auditors’ report 52
Company balance sheet 53
Notes to the Company  
financial statements 54
Supplementary information 57
Shareholder information ibc
Glossary  ibc
Glossary
Registered and Corporate Office
Parnell House
25 Wilton Road
London
SW1V 1YD
+44 (0)20 7550 4890
+44 (0)20 7550 4946
www.nauticalpetroleum.com
Nominated Adviser and Joint Broker
Evolution Securities Limited
100 Wood Street
London EC2V 7AN 
Tel: +44 (0) 20 7071 4317
Joint Broker
Ambrian Partners Limited
Old Change House
128 Queen Victoria Street
London EC4V 4BJ
Tel: +44 (0)20 7634 4700
Solicitors
CMS Cameron McKenna LLP
Mitre House
160 Aldersgate Street
London
EC1A 4DD
Shareholder information
API American Petroleum Institute
®
bbl barrels
bcf billion cubic feet
bn billion
bopd barrels of oil per day
cp centipoises 
D Darcy
DECC Department of Energy and Climate Change 
DST drill stem test
EWT extended well test
Financial Public Relations
Buchanan Communications Limited
45 Moorfields
London
EC2Y 9AE
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Auditors 
Ernst & Young
Blenheim House
Fountainhall Road
Aberdeen
AB15 4DT
Company Secretary
Audrey Clarke, FCIS
Parnell House
25 Wilton Road
London 
SWIV 1YD
FDP field development plan
km kilometres
K thousand
m million
mmbo million barrels of oil
MWD measurement while drilling
OWC oil-water contact
UKCS United Kingdom Continental Shelf
FPSO Floating, Production, Storage and Offtake
FEED Front End Engineering and Design Nautical Petroleum plc Annual Report and Accounts 2009 01
Operational highlights
3D and Ocean Bottom Cable (OBC) seismic surveys completed  
over Mariner
Site survey completed over Mariner for production platform location
Controlled Source Electromagetic Survey (CSEM) performed over Kraken
Drilled appraisal well on Kraken
Awarded 8 new blocks in the North Sea and a further 2 licence  
awards in France
34% increase in Mariner net best estimate contingent resources  
(development pending)
Financial highlights
Strong cash position of £19.1m at 30 June 2009
Debt free with £7.5m secured facility undrawn and fully available
Completed farmouts on Kraken, Hydra and Selkie for £11.9m of cash and  
past cost contribution
£11.8m spent on portfolio development
Cornerstone Assets
Field development submission in 2011 »
Field development submission target end 2010 »
Mariner
90
mmbo
Net best estimate contingent resources 
(development pending)
Kraken
29
mmbo
Net best estimate contingent resources
40
mmbo
Best estimate prospective resources
Highlights 
2009 Business Review Nautical Petroleum plc 02
The heavy oil discount to Brent has continued to narrow over the 
last year as heavy oil production declines in Mexico and 
Venezuela, reducing supply to the US and North West Europe 
markets.
In addition there are a number of large scale refinery modifications 
in Europe which are due to come on stream in 2010 and 2011. 
These are aimed at absorbing heavier oil at a time when supply of 
these oils is declining.
 
The UK production of heavy oil has been significant, mainly from 
Captain, Harding, and Alba, but these fields are also in decline, the 
most recent published figures indicate an annual drop of 20%.
The market for these UK heavy oils remains strong, specifically 
from specialist refiners. This is reflected in prices achieved for 
Alba, Captain and Harding. Both Captain and Harding have 
recently traded at a small premium to Brent. The specialist refiners 
in North West Europe are now looking further afield for supplies. 
Some cargoes from Australia are now finding homes here.
The heavy 
oil market
With interests in Kraken and Mariner, the location and specific  
oil qualities of these oils put us in a strong position to meet  
this demand.
We at Nautical Petroleum recognise the challenges that heavy oil 
presents from both a technical and marketing aspect. We 
understand the importance of early marketing and are working 
closely with the consumers to find solutions to maximise value for 
the Company.  Annual Report and Accounts 2009 03
Lincolnshire
Leadon
Harding
Gryphon
Captain
Alba
UKCS Heavy Oil Production
2003 2004
100,000
200,000
Barrels per day
2005 2006 2007 2008 2009 2010 2011 2012
We understand the importance of early 
marketing and are working closely with 
consumers to find solutions to maximise 
value for the Company. Nautical Petroleum plc 04 Business Review
Nautical Petroleum is pleased to report  
to Shareholders a further year of 
significant progress in the development  
of its asset portfolio. 
John Conlin
Chairman
Chairman’s 
statement
Nautical Petroleum is pleased to report to Shareholders a further 
year of significant progress in the development of its asset portfolio. 
This progress has however been tempered by a period driven 
primarily by the dramatic collapse in oil prices seen in the second 
half of 2008 and the onset of global recession. Our market 
capitalisation bottomed out at a value equivalent to our cash in 
hand, where it remained for some six months. Plainly at oil prices 
of around $40 per barrel, the market assigned no value to our 
portfolio of discovered hydrocarbons or our diverse exploration 
portfolio. Stimulated by the welcome fiscal boost from the 
Chancellor’s April 2009 budget announcement of the new Field 
Allowance’s for heavy oil fields, and subsequently by a recovery in 
oil price to levels above $70, the share price has stabilised to its 
current level. 
While short term oil prices trends can be very uncertain there is 
reasonable consensus that over the medium to long-term 
timeframe, prices will not drop below $70 per barrel for a sustained 
period, while the probability of further growth remains. 
Importantly for our future heavy oil production streams, the 
narrowing of the discount related to heavy oil is also a broadly 
accepted trend. 
With this commodity pricing backdrop, the potential value of 
Nautical’s interests in the successful development of Mariner and 
Kraken is still very heavily discounted but we are confident that 
increasing value will be attached to these assets once the 
respective Joint Ventures move these field developments into the 
execution phase. This therefore remains our top priority and key to 
this is the role of Statoil on Mariner. 
Mariner
Statoil’s strong commitment to the Mariner project, highlighted 
recently in the media and during the recent visit of its CEO to the 
UK, is greatly encouraging. Moreover their experience of 
developing heavy oil fields becomes increasingly visible in the 
diverse range of technical studies initiated by them to identify the 
optimal shape of a Mariner development.
As an example, Statoil has applied geophysical techniques proven in 
their successful Grane heavy oil field by acquiring two further 
seismic surveys during the period. These mark the first major 
operational activities on Mariner since the extended well test in 
1997. Both surveys have significantly improved our understanding of 
the Maureen and Heimdal reservoirs and we anticipate the improved 
imaging will be reflected in updated reservoir forecasting models 
early in 2010. All the signs are that the Mariner development is 
economically robust and moving inexorably forward to project 
sanction and Field Development Plan (FDP) submission in 2011 with 
first oil in 2015.
One consequence of the projected first oil date of 2015 is the 
decision to reclassify the Maureen hydrocarbons from reserves to 
contingent resources in line with industry best practice on 
resource definition. Based on updated estimates from the Operator 
Statoil, combined gross contingent resources for the Maureen and 
Heimdal reservoirs combined are now 369mmbo gross (90mmbo 
net). This compares to 274mmbo (67mmbo net) carried in 2008. 
Kraken
Nautical operates the Kraken discovery with a 35% equity share, 
and therefore dictates the pace of development. It is also important 
to note that the oil viscosity in Kraken is within the range of the 
Captain Field which currently produces at around 25,000bopd and  Annual Report and Accounts 2009 05
is targeting a recovery factor of over 50%.
While buoyed by the tremendous results of 9/2b-2, the failure of a 
third well (9/2b-3 drilled in September/October 2008), albeit 
aggressively located to the northeast of the discovery wells to 
chase an upside resources scenario, needed to be fully understood. 
As a result, a controlled source electromagnetic (CSEM) survey 
was commissioned to further define the extent of the reservoir. 
Enhanced seismic processing and regional studies are also in 
progress. In combination with the CSEM results, this study 
programme is focussed on the identification of the target for a 
further appraisal well to be drilled in the first half of 2010.
 
As a result of the dry well 9/2b-3, the gross contingent resource 
estimate for Kraken has been reduced from 106mmbo (37mmbo 
net) to the 83mmbo (29mmbo net) contained in a core area to the 
north and south of the two successful wells. Encouragingly, the 
new seismic data has identified significant exploration potential to 
the west of the core area. 
Development concept studies have meanwhile continued, with the 
Joint Venture favouring a phased development solution. It is 
anticipated that the results of the upcoming well can be quickly 
incorporated into our assessment, and hence we believe that it 
remains realistic to target project sanction and FDP submission by 
the end of 2010.
Rest of the Portfolio
Whilst Kraken and Mariner have been our key areas of focus, we 
continued to strengthen our position on the East Shetland Platform 
by adding a further six blocks to the portfolio in the 25
th
 Licensing 
Round. We were also pleased to further consolidate our position in 
France with the award of two further licences.
Financial Positioning 
Since the inception of Nautical in 2005, £38m has been raised of 
which £19.1m remained at year end. Nautical remains debt free 
and our £7.5m secured debt facility remains undrawn and fully 
available. The impact of the global financial crisis on the cash 
positions of small and mid cap E&P companies in particular, 
suggests that our creative farm-out deals of the recent past may be 
more challenging to replicate in the immediate future. 
Nevertheless, we are confident that we have sufficient financial 
resources to meet the immediate needs of the business as we 
progress Kraken and Mariner towards development decisions.
Looking further ahead, we continue to position the Group to obtain 
the necessary financing to implement our heavy oil development 
strategy through the most effective combination of debt, equity 
funding and other means. In that regard, the fact that a number of 
capital raisings have recently being achieved in the E&P sector at 
moderate discounts, is evidence of emerging confidence in the 
sector. In parallel, we continue to receive encouraging signals from 
advisers and the principal lending institutions of fertile ground for 
project financing particularly for those heavy oil projects put under 
the spotlight by HM Government’s fiscal encouragement.
Capability
We continued with our model of outsourcing evaluation work 
during the period, enabling us to keep our administration 
expenses to a minimum, whilst maintaining access to a highly 
capable group of technical experts. That this works so effectively, 
is a tribute to the cohesion and versatility of the core executive 
team. In particular, the commercial creativity of the team is widely 
acknowledged and will serve Nautical well in our efforts to 
capitalise on our portfolio of opportunities. However, looking 
forward to a sharpened focus on field development definition in 
Mariner and Kraken and the consequential major investment 
decisions, it is our intention to complement the core in-house team 
with a full-time Engineering Manager.
I would like to take this opportunity to thank Ian Williams who led 
Nautical energetically as chairman through its formative years 
until his departure at the end of 2008. The Board would also wish 
to express our appreciation for the supportive leadership of Patrick 
Kennedy who took on the role of acting Chairman during the first 
half of 2009.
Moving Forward in 2010 
The past 12 months has been turbulent for E&P companies, and 
whilst the overall economy remains fragile there are signs of 
confidence returning to the sector. Importantly for Nautical, there 
is some evidence albeit mixed as yet, of a lower cost environment 
emerging and having successfully preserved our financial 
resources during this period of instability, we are now better 
positioned to take advantage of this.
Our planned activity for next year anticipates a further appraisal 
well on Kraken as we push towards the goal of project sanction 
and FDP submission by the end of 2010. In parallel we expect 
Statoil to continue to progress toward concept selection on 
Mariner and award of the contract for Front End Engineering and 
Design (FEED). Whilst our key focus will remain on Kraken and 
Mariner, we will continue to progress our exploration portfolio, 
with the first material activity scheduled to be the drilling of the 
Catcher prospect in Q2, 2010.
John Conlin
Chairman
Our planned activity for next year
anticipates a further appraisal well on
Kraken as we push towards the goal of 
project sanction FDP submission by the 
end of 2010. In parallel, we expect 
Statoilto continue to progress toward 
concept selection on Mariner and award 
of the contract for FEED. Business Review Nautical Petroleum plc 06
Steve Jenkins
Chief Executive Officer
Nautical is committed to progressing 
both Mariner and Kraken to FDP 
submission and adding value to the 
third leg of material appraisal and 
exploration opportunities
Chief Executive’s
review
Nautical is pleased to report that against the backdrop of difficult 
economic conditions during the period significant progress has 
been made. 
Steady Progress in Challenging Times
During the period Nautical focused on the technical development 
and appraisal of our cornerstone assets by drilling a well and 
acquiring both test and controlled source electro magnetic (CSEM) 
surveys over Kraken and participating in three seismic surveys 
over Mariner. 
Exploration activity was somewhat muted, restricted to an 
operated seismic survey over blocks 8/5 and 9/1. During the 
autumn a planned well on the Hydra block encountered an 
extensive period of severe weather conditions which prevented  
the well spudding and resulted in the demobilisation of the rig.  
The period also saw a drop of over $100 per barrel in the Brent spot 
price before recovering to a more comfortable $70 per barrel, well 
above the break even price for both the Company’s main projects.
Costs have not fallen in line with the oil price, especially on semi 
submersible day rates which remain around $250,000 per day. 
Fortunately large jack up rigs rates have fallen to around $150,000 
per day and can be utilised on most of Nautical’s blocks. It has 
become apparent that rig stacking is occurring as service 
companies seek to maintain day rates and insulate their exposure 
to the cost decreases seen elsewhere in the industry. Whilst 
unhelpful, Nautical believes competition will remedy this situation 
and we hope to see rig rates following the downward trends of 
other services.
A Good Result from the Chancellor
Nautical’s share price tracked the fall in global equity markets, 
with the AIM market particularly impacted by the economic and 
financial crisis which gripped the industry in the period. However 
the Company received a welcome uplift in the April budget, with 
the introduction of the new Field Allowance in which licence 
holders will be able to offset against the Supplementary Charge 
(20%). Heavy oil related developments have been given a Field 
Allowance of £800m as a specific target. This will enhance the 
value of all Nautical’s heavy oil portfolio and specifically improve 
the profitability of the Kraken and Mariner developments. Nautical 
has been engaged with Government since inception to secure this 
positive fiscal change, as both an individual company and through 
the Chairmanship of the Oil and Gas Independents Association 
(the main voice of UKCS independents). The company is pleased 
with this outcome and will continue to try to secure further 
incentives for both exploration and development activity.
Managing Our Portfolio Through Growth and Judicious 
Pruning
Nautical is committed to progressing both Mariner and Kraken to 
FDP submission and adding value to the third leg of material 
appraisal and exploration opportunities which has benefited from 
the addition of a producing asset (Keddington). Including the 
awards in the 25th Licensing Round, blocks secured post round 
and two further awards in France, the augmented portfolio now 
consists of 25 blocks (18 licences) of which 11 blocks (8 licences) 
are operated by Nautical. However through active portfolio 
management this will be reduced through relinquishments of 
blocks with diminished prospectivity, thus enabling resources to 
be directed towards the most promising blocks.
  Annual Report and Accounts 2009 07
We look forward to an increased level of 
operational activity in the coming year 
as we progress Mariner and Kraken 
further towards development decisions, 
as well as seek further resources from 
our exploration portfolio through 
successful drilling. 
Mariner – Less Risk and Increasingly Robust
Statoil (UK) Ltd (operator) continues to share Nautical’s enthusiasm 
and commitment to bring Mariner to development. Activity levels 
remained high with the acquisition of three seismic surveys 
namely, high resolution 3D seismic, ocean bottom cable (OBC) 
seismic and a platform site survey. The combination of the 3D and 
OBC (a technique proven on the Grane heavy oil field – Norway) 
was successful in imaging and defining the areal distribution of 
the Heimdal Sandstone reservoir and defining the Top Maureen 
Sand reservoir (increasing the hydrocarbon column). Additionally 
areas of Maureen Sand erosion proved to be more limited than on 
previous mapping. These increased volumes have not been 
included in the quoted resources since modified reservoir 
simulations have yet to be run. Furthermore studies through the 
period which have revealed reduced platform drilling costs, 
increased recovery rates, decreased water cut (using autonomous 
valves) will also be incorporated in the simulation and we aim to 
report the anticipated increase in resources in 2010.
The joint venture intends to pass through a major decision gate at 
the end of 2010 before submitting an FDP in 2011, followed by first 
oil in 2015.
Kraken – An Operated Substantial Accumulation
A third well was drilled on the north east flank of the Kraken 
hydrocarbon accumulation, 3.3km ENE of the successful 9/2b-2 
well and 5km from the 9/2-1A discovery well. The well was 
designed to intersect the oil water contact and investigate the 
upside (P10) resources. The reservoir (Heimdal Sandstone) proved 
to be absent. However, there are still substantial best estimate 
contingent resources (83mmbo gross, 29mmbo net) both around 
the successful wells and to the north and south. Exploration upside 
is evident to the west with best estimate prospective resources of 
114mmbo gross (40mmbo net).
Considerable technical efforts are focused on predicting the areal 
distribution of the reservoir over Kraken. Both sedimentological 
and seismic studies will be integrated with CSEM survey results 
to locate an appraisal well to be drilled in 2010 prior to submitting 
an FDP before end 2010. We are strengthening our management 
team to fulfil our ambition for first oil in 2012.
Again Nautical was successful in mitigating risk and reducing  
its financial exposure by farming out the 9/2b-3 appraisal to  
both Canamens Energy and Celtic Oil Limited, resulting in a  
zero cost participation in the well and an additional cash bonus to 
be received on FDP approval. 
Exploration and Appraisal Opportunities – Expansion in 
the UKCS and France
Nautical continues to be a significant operator and an active joint 
venture partner, although operational activity was below 2008 
levels with a seismic survey acquired over the Scylla channel 
(blocks 8/5 and 9/1) and the aborted spud of the Hydra well in 
block 3/27a. The Scylla prospect proved to be too high risk and 
small, consequently both blocks and the Hydra the will be  
allowed to lapse or be relinquished. On a more positive note  
the new operator of Catcher (Blocks 28/9 and 28/10b) will  
drill a well in the first half of 2010 (postponed due to Oilexco 
entering administration).
Further interpretation of recently reprocessed seismic has 
confirmed the large Merrow prospect at Collyhurst (Permian) level 
and identified further leads. The joint venture is currently 
identifying onshore drilling locations.
Nautical strengthened its position on the East Shetland Platform with 
the award of six blocks (four as operator) and securing the merger of 
the previously relinquished portion of 9/2b with the retained area. In 
the Moray Firth two additional blocks were secured post round to add 
to the award of Block 15/21g (containing the exciting ‘Spaniards’ 
prospect, downdip from tested oil). 
At the end of 2008 Nautical purchased its first production (10% of the 
Keddington field) from Egdon Resources. We see considerable upside in 
this field and aim to drill a sidetrack in late 2009 to boost production.
Our position in France has also been strengthened by two further 
awards, Pontenx and Gex. Both permits offer heavy oil appraisal/
development opportunities with added conventional oil upside in 
Pontenx and potentially large oil/gas traps in the Jura basin (Gex). 
These complement the existing development opportunity in St 
Laurent (Grenade-sur-Adour) and the large gas prospect beneath 
the Audignon Ridge.
We have made strong applications for heavy oil exploration blocks 
in Europe and are negotiating on a potential heavy oil field 
reactivation. Being mindful of overstretching our treasury we will 
concentrate on evaluating discovered oil blocks in the upcoming 
UKCS 26th Licensing Round. 
Oil portfolio audit
RPS Energy audited our oil portfolio held at 30 June 2009. Resources 
quoted in this report refer to the figures verified by this audit. All 
contingent resources and prospective resources are best estimates.
Firm Heavy Oil Demand Coupled with a Stable Price
Nautical agrees with the consensus that the oil price will remain 
stable and will rise as the world emerges more fully from recession 
and demand rises. We see this price upswing being mirrored or 
being more acute for naphthenic crude as world sources are few 
and distant and the UKCS heavy oil production is in rapid decline. 
The fall in development costs and the recently announced tax 
incentives, combined with this price scenario make our 
development projects increasingly robust and attractive. 
A More Active Future
We look forward to an increased level of operational activity in the 
coming year as we progress Mariner and Kraken further towards 
development decisions, as well as seek further resources from our 
exploration portfolio through successful drilling. Your board will 
make every effort to gain equity markets appreciation of our 
potential, resulting in a share price that fully reflects the 
Company’s substantial net resources.
Steve Jenkins
Chief Executive Officer Business Review Nautical Petroleum plc 08
Scotland
England
Pontenx
Gex
St Laurent (Grenade)
UK North Sea
Norway
Orkney 
Islands
Shetland
Islands
28
113
14 15
8
9
3
Keddington Field
North Somercotes
113/29c & 113/30
28/9 & 28/10b
14/30a
15/21g
15/7 &
15/12a
9/6
9/7b
9/2b
3/27a
3/22
3/26
8/5 & 9/1
8/25a &
8/25b
9/11a &
9/11c
France
Operational 
review
Our portfolio Annual Report and Accounts 2009 09
Kraken: Block 9/2b
(Licence P1077 – 35% interest)
A successful appraisal well was drilled in 2007 on the Kraken  »
discovery. A deeper oil-down-to (ODT) was encountered and 
the oil is of a higher API with less viscosity then predicted. 
A further appraisal well drilled September/October 2008 was  »
dry - the well was plugged and abandoned.
Controlled source Electro Magnetic survey (CSEM) acquired in  »
June 2009.
Target to submit FDP before end 2010. »
Contingent resources of 83mmbo (gross), 29mmbo (net). »
Prospective resources of 114 mmbo (gross), 40 mmbo (net). »
Mariner: Block 9/11a
(Licence P335 – 26.67% interest)
This highly appraised field has produced 662,000 barrels of oil  »
on extended test at a maximum rate of 14,991bopd (14.5 API) 
from the Maureen Formation sands and has flowed up to 
1,800bopd from the shallower Heimdal reservoir.
3D seismic and an Ocean Bottom Cable (OBC) survey acquired  »
mid 2008 have improved imaging of both Heimdal and Maureen 
reservoirs. 
Platform site survey acquired in Summer 2009. »
No more drilling is required and FDP submission is planned   »
for 2011.
Best estimate contingent resources (development pending) of  »
369 mmbo (gross), 90 mmbo (net).
Hydra: Block 3/27a
(Licence P1203 – 35% interest)
Well spud aborted due to poor weather in November 2008. »
 Block will be relinquished. »
Scylla: Blocks 8/5 and 9/1
(Licence P1277 – 100% interest)
Prospect considered too small and too high risk. Blocks to be  »
relinquished.
Tudor Rose: Block 14/30a
(Licence P1463 – 20% interest)
The block contains the Tudor Rose discovery. »
Interpretation of 208 square kilometres of 3D seismic has  »
yielded encouraging results and interpretation of Amplitude 
verses offset (AVO) volume is ongoing.
Engineering studies are underway on the 14/30a-2 discovery  »
well to determine the case for further drilling.
Contingent resources of 49mmbo (gross), and 10mmbo (net). »
Catcher: Blocks 28/9 and 28/10b
(Licence P1430 – 15% interest)
The blocks contain several leads and prospects including the  »
Catcher and Catcher East prospects.
Catcher is to be drilled in 2010. »
Prospective resources of 21.8mmbo (gross), 3.3mmbo (net). »
Merrow: Blocks 113/29c and 113/30
(Licence P1475 – 50% interest)
The blocks lie on the edge of the East Irish Sea basin. »
Interpretation of reprocessed seismic has confirmed the large  »
Merrow prospect adjacent to Walney Island. 
Offshore prospect will be tested from onshore by a well in  »
2010/2011.
Mermaid: Block 9/11c 
(Licence P979 – 80% interest)
Possible southern extension of Mariner accumulation in  »
Heimdal Sandstone. 
Remaining prospectivity will be determined by the work on the  »
adjacent Mariner block, with a possible field extension into 9/11c.
Blocks 8/25a and 8/25b
(Licence P976 – 50% interest)
Contains Coelocanth and Kelpie prospects. »
Evaluation of reprocessed seismic will establish future  »
prospectivity.
Blocks 3/22 and 3/26
(Licences P1573 and P1574 – 40% interest)
New 2D high density, high resolution data confirms Lusca  »
prospect.
EM feasibility studies ongoing. »
Scylla south: Blocks 9/6 and 9/7
(Licences P1575 – 35% interest)
New award continuation of Scylla channel and possible Kraken  »
analogue. 
EM feasibility studies ongoing. »
Spaniards: Block 15/21g
(Licences P1655 – 30% interest)
3D seismic to be obtained and reprocessed.  »
Large Jurassic prospect down from 15/21a-38 oil discovery.  »
Blocks 15/7 and 15/12a
(Licences P1652 – 33% interest)
Contains Funnel and Atco prospects  »
Evaluation of reprocessed 3D and 2D seismic in progress.  »
Keddington
(Licence PEDL005, 10% interest)
Acquired interest in this UK onshore producing field in   »
January 2009. 
St Laurent: France 
(22% interest)
Located in Aquitaine Basin, south-west France, the Grenade- »
Sur-Ardour well produced 8,000 barrels in a series of tests. 
Following 2D seismic reprocessing on the large Audignon  »
Ridge, subsalt gas prospect in the block, we will seek to 
farmout prior to drilling a well.
Grenade has best estimate contingent resources of 4.2 mmbo  »
(gross), 0.9 mmbo (net).
Pontenx: France 
(20% interest)
Located in the Parentis Basin, south-west France. »
The permit contains the abandoned Mimizan Nord field   »
which produced 3.5mmbls of 12 API oil and a number of high 
potential prospects.
Gex: France 
(20% interest)
Located in eastern France near the Swiss border, the official  »
award granted May 2009.
Previous drilling on the block encountered shallow oil. »
Additional prospectivity on large basement involved anticlines  »
at Triassic level. Business Review Nautical Petroleum plc 10
9/6 9/7b 9/8
9/3b
9/3a
9/2a
9/2b-3
9/2b-2
9/2b-1A
3/27b
9/2b
3/27a
9/1
3/26
3/27b-1
Bressay
5 kilometres
1
2 4
6
Kraken 
Discovery
Operational 
review
UK continental shelf
Key stats
Contains Kraken oil discovery  »
Large 3 way dip closed structure  »
15 API oil  »
9/2b-2 confirmed substantial accumulation »
FDP submission target end 2010 »
Kraken Annual Report and Accounts 2009 11
Block 9/2b (Licence P1077) 
(Nautical 35% Operator)
Nautical’s first awarded licence in the UKCS is located on the East 
Shetland Platform, west of the North Viking Graben. The Kraken 
structure is a large 3 way dip closed high on which oil was 
discovered in the Heimdal Sandstone Member of the Tertiary 
(Palaeocene) system by the 9/2-1A well drilled in 1985 and 
successfully appraised by the joint venture’s 9/2b-2 commitment 
well in 2007. This appraisal well not only encountered oil bearing 
Heimdal Sandstone which correlates with the 9/2b-1A well (known 
as Unit III sands) but also penetrated an additional thin lower oil 
bearing Heimdal Unit I sandstone.
The results of 9/2b- 2 proved an oil column of at least 77 metres 
and an oil down to (ODT) 51 metres deeper than 9/2- 1A. A third 
appraisal well, drilled in September 2008, was located in a down 
dip area to the northeast of the discovery wells in order to 
substantiate the oil column by intersecting the oil water contact 
and to investigate the upside (P10) resources. However, in this 
outlying area, the Heimdal Sandstone Member proved to be 
absent, which limits the northeastern upside and curtails the best 
estimate contingent resources to 83mmbo (29mmbo net) in the 
core area and to the north and south of the 2 successful wells. 
There are additional best estimate prospective resources of 
114mmbo (40mmbo net) to the west of the fault, above the ODT in 
the 9/2b-2 well.
The reservoir quality in all sands is excellent, exhibiting both high 
porosity and permeability. Gravity of the oil is 15° API and 
viscosity is around 110cp or less, being a higher API and much less 
viscous than both Bressay (1,000-1,500cp) and Bentley (>2,000cp) 
and more similar to the producing Captain Field which is expected 
to exceed a 50% recovery and continues to produce at around 
25,000 bopd.
The fact that an oil water contact (OWC) was not encountered in 
the 9/2-1A and 9/2b-2 wells enhances the probability that the 
aquifer support will be through an edge water drive rather than a 
bottom water drive which allows improved control over water 
production and injection thus optimising oil production and 
ultimate recovery from the reservoir. This is supported by 
geochemical analysis which indicates that, although the oil is 
biodegraded, it is not water washed implying the water leg is 
remote from the core of the structure.
During 2009, controlled source electromagnetic (CSEM) surveying, 
a relatively new geophysical technique to the North Sea designed 
to distinguish high resistivity oil zones from their surroundings, 
has been commissioned to further define the extent of the 
reservoir. A single test line acquired in January has confirmed a 
high resistivity anomaly which is indicative of oil filled sands both 
to the north, east and south of the discovery wells but not around 
the 9/2b-3 well which is consistent with the sands being absent. 
Given these encouraging results a broader CSEM coverage of six 
lines was acquired in June aimed at delineating the oil filled sands 
over the structure. Further encouragement is evolving from the 
preliminary processing of these data. 
Enhanced seismic processing techniques such as special  
filtering and regional structural and sedimentological studies  
are in progress to more accurately predict sand distribution over 
Kraken. These studies along with detailed analysis of seismic 
amplitudes interpreted at shallower Heimdal levels will be 
combined with the CSEM results and integrated with previous 
models to define the reservoir distribution and to establish a target 
for a further appraisal well. Nautical intends to drill this in the first 
half of 2010 prior to submitting a field development plan (FDP) to 
the Department of Energy and Climate Change (DECC) by the  
end of 2010. The joint venture is currently favouring a phased 
development solution. 
Through judicious farmouts to both Canamens AS and Celtic Oil 
Limited, Nautical has retained a substantial interest and 
operatorship of this large oil discovery. The most recent 
farmdowns have resulted in Nautical’s exposure to the 9/2b-3 well 
being reduced to zero and the securing of an additional cash bonus 
on FDP approval.
110cp 
or less Viscosity (similar to 
producing Captain field)
83mmbo 
Gross best estimate 
contingent resources
114mmbo 
Gross best estimate 
prospective resources Business Review Nautical Petroleum plc 12
3D & OBC
Survey Area
9/11a
9/11c
9/11a-10
9/11c-13
3
4
East
Mariner
8/15-1
9/11b-11
11Z
Mariner
5 kilometres
Conoco
9/12b-7
Maureen
Heimdal
9Z
9
8
9X
10Z
2
12
5
9Y
7
8Y
6
8Z
1
Key stats
Large oil accumulations in the Maureen   »
and Heimdal
Highly appraised with 16 wells »
63 day test produced 662,000 barrels at  »
10,000+ bopd
14.5 API oil »
Mariner
Operational 
review
UK continental shelf Annual Report and Accounts 2009 13
Mariner Block 9/11a (Licence P726)
(Nautical 26.67%)
Operated by Statoil Hydro ASA and located on the East Shetland 
Platform, west of the Viking Graben, the Mariner oil accumulation, 
discovered in 1981 and with 15 subsequent well penetrations, is 
the largest, most highly appraised undeveloped discovery in the 
UKCS. These wells have tested oil at 1,000 to 1,595bopd from both 
the Palaeocene Maureen Sandstone and the shallower Heimdal 
Sandstone. Both sands have excellent reservoir characteristics and 
during an extended well test (EWT) in 1997 a single horizontal well 
in the Maureen Sandstone produced 662,000 barrels of oil over 63 
days at a maximum rate of 14,991bopd (14.5 API).
During the period the joint ventures’ resources were focused on 
characterising and defining the areal distribution of the shallower 
Heimdal Sandstone reservoir and enhancing our already detailed 
knowledge of the deeper Maureen sandstone. Statoil have applied 
the proven geophysical techniques used in their successful Grane 
heavy oil field by acquiring two further seismic surveys. Firstly in 
June 2008, a high resolution 3D seismic survey was acquired to 
enhance the interpretation of the Maureen reservoir. In August 
2008 Statoil added a 3D ocean bottom cable (OBC) survey over the 
core of the Heimdal reservoir to record shear wave seismic data 
which is beneficial to the interpretation of the low impedance 
contrasts typical of the oil filled sands. These mark the first 
operational activities over the discovery since the EWT.
The new 3D seismic has been successful in defining the top of  
the Maureen sand which now appears to be shallower than 
previously mapped in some areas which will increase the 
hydrocarbon column and volume. As anticipated, the OBC data 
has imaged the main Heimdal channels and other sand bodies 
higher in the sequence. Both the improved Maureen and Heimdal 
reservoir models will be input into reservoir simulations by end 
2009. Production profiles for both reservoirs are expected to be 
generated in early 2010.
Since successfully passing through a major decision gate in 
October 2008 Statoil has been identifying development options  
and will shortlist and propose the preferred development concept 
before the next major decision gate at the end of 2010. 
Following on from site surveys acquired in the summer of 2009 
over three considered production platform locations, geotechnical 
and environmental studies will be conducted to aid platform 
design and development.
Considerable operator effort has been guided towards evaluation of 
polymer injection to improve oil recovery factor and simplifying well 
design to reduce costs. Furthermore the use of autonomous valves 
in the completion assemblies to control water influx has shown 
encouraging test results. In addition blending tests to both decrease 
viscosity and increase marketability is yielding positive outcomes. 
Prior to the performance of the above work programme the operator 
reported best estimate contingent resources of 369mmbo gross 
(90mmbo net) for both the Maureen and Heimdal reservoirs. 
Mariner is a large, economically robust development which will 
pass through the next decision gate at the end of 2010 before 
commencing Front End Engineering and Design (FEED) and 
completing an Environmental Impact Assessment in 2011. This 
will lead to project sanction by the joint venture followed by FDP 
submission during 2011 and first oil in 2015 or earlier if Maureen 
wells are pre-drilled.
369mmbo 
Gross best estimate contingent 
resources (development pending)
Mariner is a large, economically robust 
development which will pass through 
the next decision gate at the end of 2010 
before commencing Front End 
Engineering and Design (FEED)  Business Review Nautical Petroleum plc 14
14/30b
14/30c 14/30a
14/30b-3
15/26b-5
15/26b-8
Lead 3
(Cretaceous)
Lead 2
(Jurassic)
5 kilometres
14/29a-4
20/4-3
20/5-6
Tudor Rose
Discovery
14/30a-4
14/30a-1
14/30a-2
14/25-2
14/25-1
Hannay
Lead 1
(Jurassic)
Oil
Gas
Prospects
Block 14/30a (Licence P1463)
(Nautical 20%)
Located in the Outer Moray Firth adjacent to Ivanhoe, Rob Roy and 
Goldeneye fields this Traditional Licence, contains 1 undeveloped 
discovery, 14/30a-2, named Tudor Rose. The well encountered a 24 
metre oil column beneath a 3 metre gas cap at around 1000 metres 
subsea within Tertiary, Dornoch formation sands. Further 
prospects have been mapped on 3D seismic within the Lower 
Cretaceous Kopervik sand and the Jurassic Sgiath sand.
Interpretation of 208 square kilometres of 3D seismic was completed 
in the period, yielding encouraging results. The western pinch out of 
the Dornoch sands was confirmed and the area of the stratigraphic 
trap in two sand bodies (one undrilled) extended to the south. 
Gas anomalies (1 coincident with the gas in 14/30a-2) were 
mapped within the stratigraphic closure. Nautical attributes 
49mmbo of gross best estimate contingent resources to the Tudor 
Rose discovery. Pending further engineering studies and the 
interpretation of recently acquired amplitude versus offset (AVO) 
seismic volume, the Joint Venture will then decide if a new well is 
merited by early 2011.
Key stats
Contains undeveloped Tudor Rose discovery  »
208 kilometres of 3D seismic interpreted  »
Tudor Rose
Operational 
review
UK continental shelf
49mmbo
gross best estimate  
contingent resources Annual Report and Accounts 2009 15
Proposed
28/9-A
Cromarty Sand Play (Tertiary)
Tay Sand Play (Tertiary)
Fulmar Sand Play (Jurassic)
Lead 
P4
28/9 28/10b
Lead 
P1
Lead
JU2
Lead 
P3
Lead 
P5
Lead
JU1
Lead 
E3
Lead 
E1
Lead 
E2
Lead 
E4
Lead 
P2
Catcher
Prospect
(Tertiary)
5 kilometres
Blocks 28/9 and 28/10b (Licence P1430)
(Nautical 15%)
This Traditional 24th Seaward Licensing Round Block is located  
on the West Central Platform, west of the Central Graben and 
the nearby Guillemot Field.
The blocks are undrilled but contain numerous structural/
stratigraphic leads and prospects at both Eocene (Tay Sandstone) 
and two large Jurassic leads. Traps are defined on recent 3D 
seismic which has been reprocessed and interpreted, revealing 
several seismic anomalies. The strongest and most convincing is 
over the Catcher prospect in the Palaeocene, where a seismic 
amplitude anomaly (class 2 AVO) indicates a thick sand sequence 
which is likely to be oil bearing. A flatspot evident on the seismic, 
which corresponds to closing contour within the prognosed  
thick, clean sand of this prospect, supports the opportunity  
for an oil accumulation.
Encore Oil assumed operatorship due to the uncertainty created by 
Oilexco being placed into administration. Subsequently Premier 
purchased Oilexco’s interest and have agreed to honour previous 
farmin arrangements which includes Nautical’s 20% carry. The 
operator will drill the Catcher well in the first half of 2010, the site 
survey for the agreed well location having already been acquired.
Key stats
Well planned to test the Catcher prospect   »
in Q2, 2010 
3D seismic has defined traps  »
2 large Jurassic leads  »
Catcher
21.8mmbo
gross best estimate  
prospective resources Business Review Nautical Petroleum plc 16
Ormskirk Structure
Collyhurst Structure
Merrow
Prospect
Sea 
Serpent
Ormonde 
South
Ormonde 
North
Northern
Lead
Clyde
113/29a-3
Clyde
113/28-2
Clyde
113/29-2
Walney Isl 6
Kendals 17
Sowerby
Brit Cellphane
Davy Streey 1
Rampside 1&2
Walney Isl
2, 2BG, 3&4
Walney Isl 1BG
Ultramar Biggar 1
Walney Isl 3BG
Walney Isl 1
Ramsden
Dock
Inst. Geo
Roosecote 1
Levonshire
Dock 1
Walkney Isl 5
Inst. Geo
Gleaston
Castle Farm 1
Kennedy 
Bros
113/29c 113/30
5 kilometres
Blocks 113/29c and 113/30 
(Licence P1475)
(Nautical 50% Operator)
Awarded as a Traditional Licence in the 24th Seaward Licensing 
Round in 2007, the blocks are located in the East Irish Sea Basin 
adjacent to Walney Island on the Cumbrian coast. There are 
numerous oil and gas shows in the offshore wells and hydrocarbon 
migration through these prospective blocks is proven by heavy oil 
columns and hydrocarbon shows in the onshore wells to the east.
Integration and interpretation of over 700 kilometres of reprocessed 
onshore, transition zone and offshore seismic combined with 
gravity, magnetics and outcrop data has confirmed the existence 
of the large Merrow prospect at the Permian Collyhurst Sandstone 
and a significant lead, named Sea Serpent, at the Triassic Ormskirk 
Sandstone. The Collyhurst Sandstone has tested gas elsewhere in 
the basin and is under production at the onshore Elswick Field. 
Merrow appears to be analogous to the basin margin Lennox oil 
and gas field, to the south. The joint venture is currently identifying 
an onshore location from which to drill a directional well offshore 
to test the Merrow prospect before 2011. 
Key stats
Located in east Irish Sea basin »
700 kilometres onshore transition zone and  »
offshore seismic 
Large Merrow prospect at Permian  »
(Collyhurst) level
Merrow
Operational 
review
UK continental shelf
The joint venture is currently identifying 
an onshore location from which to drill a 
directional well offshore to test the 
Merrow prospect before 2011.  Annual Report and Accounts 2009 17
Lincolnshire
North
Somercotes
Prospect
K1z
K2y
K2
Mablethorpe
Louth
Louth
Louth East
Keddington South
2 kms
Saltﬂeetby
Gas Field
Keddington Oilﬁeld
538000mE
390000mN
Block 3/27a (Licence P1203)
(Nautical 35% Operator)
Nautical started to drill a well on the Hydra prospect in November 
2008. Unfortunately, very poor weather prevented the well from 
spudding. Due to high standing costs that would have been 
incurred if the rig had been held until drilling could commence, 
the Joint Venture demobilised the rig. Your Company has been 
unsuccessful in obtaining a further extension to the licence to  
drill the well and intends to relinquish the block.
Hydra
Blocks 8/5 and 9/1 (Licence P1277) 
(Nautical 100% Operator)
Over 700 kilometres of high resolution 2D seismic was acquired in 
September and October 2008. The results have been integrated with 
previous data to reveal a small, high risk prospect at Maureen sand 
level which does not merit the drilling of the contingent well. Nautical 
has been granted a waiver from the contingent well from DECC which 
will allow the licence to lapse at the end of the initial term. 
Scylla
Licence PEDL005 
(Nautical 10%)
Nautical Petroleum through its wholly owned subsidiary Alba 
Resources Limited, acquired a 10% interest in Onshore Licence 
PEDL005 (Remainder) which contains the producing Keddington 
oil field and North Sommercates gas prospect, both adjacent to the 
Saltfleetby gas field. Nautical anticipates considerable upside in 
the Keddington field and aims to boost production from the current 
50bopd (5bopd net) by using the recently reprocessed 3D to spot a 
bottom hole location for a sidetrack off the Keddington 2 well from 
In the event of a successful well, production could increase to 
150-200bopd (15-20bopd net). The well is planned for end 2009.
Keddington
Nautical anticipates considerable upside in 
the Keddington field and aims to boost 
production from the current 50bopd (5bopd 
net) by using the recently reprocessed 3D 
to spot a bottom hole location for a 
sidetrack off the Keddington 2 well. Business Review Nautical Petroleum plc 18
Grenade Oil 
Discovery
Pecorade
Oilﬁeld
Albian Gas
Play
Audignon
Ridge
Bg-1
Bg-3
Bg-2
Ec-1 Gaq-2f
Gaq-1
Gaq-2
Gaq-1cc
Bra-201
Nat-1
Nat-2
Lrb-1
Aud-11
Aud-3
5
Aud-1
2
Tiz-1
Aud-8
Aud-10
Mm-1
Mm-2
Bn-1
Mm-1
Lvg-1
Lu-1
Vm-1
Aud-9
Aud-6
But-1
Lo-1
Air-1
Poc-3
Poc-2
Pecorade
Oilﬁeld
Poc-2
Poc-4
Ct-101
Cld-201
Aud-4
Scb-201
Scb-1
Cod-1
Srg-1
Gar-2
Gar-1
Gar-3
10 kilometres
Switzerland
Geneva
GEX
Chatillon 1
La Chandeliere 1
Chaleyriat 1
Bellegarde-Sur-Valserine
Grande Cret
Charmont 1
Savole 106
Savole 109
Musicges 1
Mont 
Vuache
Sub-Saleve
Humily 2
Gex CD6
Gex CD5
Gex CD4
GexCD3
Gex CD2
Gex CD1
Molasse
Mont Mourix
Amont Gex
Humily 1
Saleve 1&2
Savole 108
Annecy
Savole 104&5
Amont 
Chesny
Molasse Sst
Jurassic Carbonate
Triassic Sst
Oil seeps
Asphalt mine
20 kms
Pontenx
Atlantic 
Ocean
Pontenx
Lucats
Mimizan
Village
Pontenx
Village
Parentis
Mothes
Cabeil
Bourrache
Tennedou 1
Cap de Pin 1B
Mezos 1 Bias 1
Mimizan 2 Mimizan 1
Mimizan Plage 1
La Jaougue 1
MN 
1,2 &3
Sainte Eulalie 1
Burlade
Sainte
Eulalie 1
Mimizan
Nord
La 
Mancha 1
Pontenx
Village 1
Pontenx 1
Mimizan 
Village 1
Aureilhan 1
Mimizan
Nord 8 St Paul en Born 1
Gambade 1
Massion 1
Pontenx 2&3
Sainte Trosse 1
Dupouy 1
Ploublanc 
Ychoux 1
Liposthey 1
Ychoux 1
Mouquet 1
Lanusse 1
Biscarrosse
Parentis
Ouest 1
Quinch 1
Piron 1
Le Terme 1
Bourdieu 1
Parentis
Ouest 2
Mothes
Ouest 1
Saugnacq 1
Lue 1
Courgeyre 1
Marlenx 1
Marlenx
Cantaure 1
5 kilometres
Operational 
review
France
Pontex
Gex France
St Laurent Permit
Pontenx
Gex
St Laurent (Grenade)
France
The St Laurent Permit contains several 
large hydrocarbon exploration plays  
and the undeveloped Grenade heavy  
oil accumulation. Annual Report and Accounts 2009 19
St Laurent key stats
Grenade heavy oil accumulation with  »
4.2mmbo gross best estimate contingent 
resources
Large subsalt gas prospect in the Triassic  »
Bunter Sandstone under the Audignon Ridge 
with 3TCF gross best estimate prospective 
resources
St Laurent Permit (Nautical 22%)
The Saint Laurent Permit in South West France contains several 
large hydrocarbon exploration plays and the undeveloped Grenade 
heavy oil accumulation. The discovery well, Grenade-Sur-Adour-1 
was drilled by SNEAP (Elf) in 1975 and encountered a 97 metre oil 
column of 10 API oil in Cretaceous Albian carbonates. Between 
1976 and 1985 around 8,000 barrels of oil were recovered from 
intermittent tests, the well being finally plugged and abandoned 
during a period of low oil prices in 1985.
The Grenade 3 appraisal well drilled in 2008 did not encounter 
hydrocarbons. Studies are focused on determining the extent of 
this accumulation and whether to sidetrack or abandon the GAR-3 
well. Best estimate gross oil in place is now estimated to be 88 
million barrels (0.9 million net recoverable).
Deeper in the geological section to the south-west the joint 
venture has reprocessed 2D seismic data and successfully 
delineated a large subsalt gas prospect in the Triassic Bunter 
Sandstone under the Audignon Ridge. The operator estimates best 
net prospective resources of 3TCF (660BCF net to Nautical). A 
farmin partner is being sought prior to drilling this high potential 
prospect. The Conseil De Mines granted a renewal of the St 
Laurent permit up to August 2013. 
Pontenx Permit (Nautical 20%)
Awarded in December 2008, the Pontenx Permit is located in 
south-west France on the southern margins of the Parentis Basin, 
an oil productive region on the west coast of France, and covers an 
area of 313 square kilometres. This licence contains the abandoned 
Mimizan Nord heavy oil field and a number of other high potential 
prospects with good oil shows and tests. 
The licence has a 4 year term and the initial 2 year programme will 
comprise the reprocessing and interpretation of the existing 
seismic data, a review of the rejuvenation potential of the Mimizan 
Nord field and detailed geological studies.
The Mimizan Nord field produced 3.5mmbls of 12 API oil from the 
Apto-Albian cretaceous reefal limestone from 1960 to 1986. 
Various other wells on the blocks have yielded encouraging results, 
with a number testing oil at rates up to 250bopd.
Gex Permit (Nautical 20%)
The Gex Permit covers an area of 932 square kilometres and is 
located in eastern France near the Swiss border. 
The area is located in the Alpine Molasse/Jura Basin where  
active oil seeps, bitumen mines and shallow drilling has proven  
an extensive zone of shallow (<500 metres) oil in the Molasse 
sands and deeper drilling indicates a working hydrocarbon  
system with trapping potential. The majority of wells on the  
block encountered oil.
The initial focus on the deeper targets will be the large surface Grand 
Cret anticline which has closure at Triassic level. Analysis of recently 
collected oil samples, geological studies and the interpretation of 
the existing seismic should give increased definition of both the 
Grand Cret and the other illustrated anticlines.
Pontenx key stats
Contains the abandoned Mimizan Nord heavy  »
oil field which produced 3.5 mmbls of 12 API oil.
Other high potential prospects »
Existing seismic will be reprocessed and  »
interpreted
Evaluate rejuvenation potential of Mimizan  »
Nord field.
GEX key stats
Proven extensive zone of shallow (<500  »
metres) oil in the Molasse sands
Drilling has also proved a deeper working  »
hydrocarbon system with trapping potential Business Review Nautical Petroleum plc 20
In challenging times Nautical has 
successfully maintained a strong cash 
position and remained debt free whilst 
continuing to progress our operational 
and pre-development activity.
Will Mathers
Finance Director
In challenging times Nautical has successfully maintained a 
strong cash position and remained debt free whilst continuing to 
progress our operational and pre-development activity.
Results
The Group made a loss after taxation of £5.9m for the year (2008: 
£4.5m). This included exploration and evaluation expenses of 
£4.5m, a £2.4m charge relating to the extended well test 
equipment and administration expenses of £1.6m, offset by  
£0.5m in net foreign exchange gains, finance income of £1.3m  
and a net taxation credit of £0.7m.
Exploration and evaluation expenses were primarily related to 
unsuccessful exploration costs on 3/27a Hydra and 8/5 & 9/1 Scylla.
A concerted effort had been undertaken to utilise the extended 
well test equipment over the past two years, however this has not 
been successful. As a consequence, the decision was made in 
December 2008 to impair the asset, resulting in a £2.4m non-cash 
charge to the income statement. 
Administration costs of £1.6m (2008: £1.5m) continued to be 
managed tightly and included a non-cash charge of £0.2m (2008: 
£0.4m) relating to share option charges.
Farmouts were completed on 9/2b Kraken, 3/27a Hydra and 8/25 
Selkie during the year with receipts in excess of the carrying  
value of assets disposed of, resulting in a net gain of £0.5m. The 
completion of the farmout of 9/2b Kraken resulted in a partial write 
back of the provision for deferred taxation, resulting in a deferred 
tax credit of £1.1m, which was offset by a deferred tax charge  
of £0.4m.
Balance sheet
As at 30 June 2009, the Group has net assets of £59.8 (2008: 
£65.5m), dominated by capitalised exploration and evaluation 
assets of £48.9m (2008: £56.4m) and cash and deposits of £19.1m 
(2008: £20.1m). The Group continues to be debt free. 
Cash flow 
Our cash management continued to be very strong during the year, 
with £19.1m cash and deposits at year end. £11.9m of cash and 
past cost contribution was received during the year from farmouts, 
sufficient to fund the £11.5m that was spent during the year on the 
continued exploration and evaluation of our assets.
Our £7.5m secured debt facility with the Bank of Scotland, was 
extended during the year to May 2012 and remains undrawn and 
available for working capital purposes. 
Finance Director’s  
review  Annual Report and Accounts 2009 21
Against a background of low interest rates, interest received on 
cash and deposits was £0.8m (2008: £1.0m), equivalent to half of 
our overall administration spend. 
At year end our cash and deposits were primarily deposited with 
the Bank of Scotland, however subsequent to year end funds have 
also been placed with Abbey, Scottish Widows Bank and Anglo 
Irish Bank. 
New Field Allowances
Nautical welcomed the Chancellor’s 2009 Budget announcement of 
the introduction of new Field Allowance’s applying to small fields, 
heavy oil fields and high temperature/high pressure fields. 
Under the existing North Sea Fiscal Regime, a conventional UKCS 
oil field is subject to taxation of 30%, plus a Supplementary Charge 
of 20%, equating to a 50% charge on taxable income. As a 
consequence of the new Field Allowances announced, heavy oil 
fields have been given a per field allowance of £800m, which 
licence holders are able to utilise to offset the Supplementary 
Charge, providing a tax benefit of up to £160m per field. Both 
Kraken and Mariner qualify for the heavy oil field allowance and 
we see this as a highly positive development to ensure continued 
investment in the North Sea.
Outlook
Nautical’s share price performance over the period reflects the 
reality that the Company hasn’t been immune to recent economic 
conditions. We will continue to manage our cash resources wisely 
and reserve spending only for those activities which we believe 
will lead to a material increase in shareholder value.
The development of the Group’s assets going forward will depend 
not only on technical success, but also on the continued ability of 
the Group to obtain financing through the availability of debt and 
equity funding and other means. Based on the year end cash 
position of £19.1m and the full availability of the £7.5m secured 
facility, the Group currently believes it has sufficient financial 
resources to meet the immediate needs of the business as we 
progress Kraken and Mariner towards development decisions.
Whilst the overall economy is fragile and the farmout market 
remains soft, we are encouraged by the recent capital raising 
transactions in the E&P sector, which suggest both an 
improvement of the capital markets and a refocusing on the North 
Sea sector. This, combined with the tax incentives for heavy oil, a 
more competitive cost environment and a steadier oil price, gives 
Nautical significant cause for optimism.
Will Mathers
Finance Director
As a consequence of the new Field 
Allowances announced, heavy oil fields 
have been given a per field allowance of 
£800m, which licence holders are able 
to utilise to offset the Supplementary 
Charge, providing a tax benefit of up to 
£160m per field.  Business Review Nautical Petroleum plc 22
Board of Directors
John Conlin
Non-Executive Director and Chairman
John Conlin was appointed as Non-Executive Director and 
Chairman of Nautical Petroleum plc in June 2009. John has over 34 
years experience in the Oil and Gas industry, including 28 years 
with Royal Dutch Shell. He has held senior technical and 
management positions with Shell in the UK, Denmark, Oman, 
Australia, Russia and Saudi Arabia, in addition to Corporate roles 
in the Netherlands. 
His Executive experience includes the roles of President, Sakhalin 
Energy Investment Company and General Manager, Woodside 
Petroleum. He has also previously served as a Non-Executive 
Director of Hardman Resources Limited and Delphian Technology 
Limited, and as Chairman of Fuelture Limited. 
A petroleum engineer by profession, John holds a BSc (Hons.)  
in Chemical Engineering from Edinburgh University and  
has completed the Harvard Business School, Advanced 
Management Programme. 
Stephen Jenkins 
Chief Executive Officer
As part of a 27 year career in oil and gas, Steve spent the 11 years 
prior to Nautical at Nimir Petroleum as Business Development  
and HSE Manager, where he was responsible for acquisition 
strategy and technical dimensions of strategic planning. He 
successfully led multidisciplinary teams to evaluate opportunities 
in the Americas, the Middle East, North Africa, and other  
OECD countries, which led to the acquisition and subsequent 
turnaround of a Venezuelan oil producing field. 
Steve also managed a drilling programme that resulted in the 
quadrupling of production in a field on Sakhalin Island in the 
Russian Federation and identified and secured a farm-out with  
a major oil company for a substantial carry on a large oilfield in 
Kazakhstan. 
Steve has an MSc in Petroleum Geology and DIC from Imperial 
College of Science and Technology, the University of London, a  
BSc Hons in Geology from the Queen’s University Belfast and is  
a Fellow of the Geological Society of London. He is currently 
Chairman of the Oil & Gas Independents Association (OGIA),  
and a director of Oil & Gas UK.
Paul Jennings
Commercial Director 
Paul’s experience in the oil and gas sector exceeds 30 years and 
spans the roles of accountant, economist and commercial and 
business development director. 
Paul worked with BP for 17 years, with responsibility for projects 
in China, Russia, Mongolia, Mozambique and West Africa. After 
leaving BP Paul established exploration and production companies 
in both Russia and Nigeria, before jointly founding Nautical 
Petroleum with Steve Jenkins Annual Report and Accounts 2009 23
Will Mathers
Finance Director
Will is a Chartered Accountant, qualifying with Deloitte Touche 
Tohmatsu in Australia and holding a Bachelors degree from the 
University of Western Australia. Following 6 years in professional 
practice, where he specialised in the energy and mining sectors, 
Will held financial roles with Woodside Petroleum Limited, 
working in both the USA and Australia. 
On relocation to the UK, he worked for the Royal Dutch/Shell Group 
in the position of Global Office Controller for Shell Gas (LPG) in 
London. Prior to his appointment as CFO of Nautical in October 
2008, Will held the position of Group Financial Controller for 
International Energy Group AG.
Patrick Kennedy
Non-Executive Director 
Patrick is a Chartered Accountant with bachelors and masters 
degrees in Economics and has over 20 years experience in 
business development and strategy, working with high net worth 
individuals and corporate leaders in the UK and overseas. He is 
CEO of the PK Group, the London based services group and serves 
on the Boards of both private and public companies. 
A Director since 30 May 2002, Patrick is Chairman of Nautical’s 
Audit Committee. 
Philip Dimmock 
Non-Executive Director 
Philip has 30 years’ experience in the upstream oil and gas, both in 
the UK and internationally and is currently chief operating officer 
of Equator Exploration Ltd. 
Phillip spent a significant part of his career at BP in a wide variety 
of senior positions, and at Ranger oil where he held the post of  
Vice President of the International Division, and served as 
Chairman. He has also been an Executive Officer of the UK 
Offshore Operators Association.
Philip is Chairman of Nautical’s Remuneration Committee. Governance Nautical Petroleum plc 24
Directors’ report
The Directors present their report together with the Group and Company financial statements for the year ended 30 June 2009.
Business review and future activities
The principal activity of the Company is heavy oil exploration, development and production in the UK and Europe. The Company is a 
public limited company incorporated in England and Wales (company number 4362104) and is listed in London on AIM under the 
designation NPE. The Company is required by the Companies Act to set out in this report a review of the business of the Group during 
the year end 30 June 2009 and the position of the Group at the end of year and uncertainties facing the Group. The information that fulfils 
these requirements, including discussion of the business and future developments, are set out in the Chairman’s statement, Chief 
Executive’s review, Operational review and the Finance Director’s review. 
Results and dividends
The Group’s loss for the year was £5.89m (2008: £4.52m), including exploration write offs of £4.06m (2008: £3.24m) primarily for Hydra and 
Scylla, an impairment charge of £2.38m (2008: £0m) for the extended well test equipment, interest income of £0.78m (2008: £0.99m) a 
foreign exchange gain of £0.49m (2008: loss of £0.17m) and a tax credit of £0.75million (2008: £0m). The Directors do not recommend the 
payment of a dividend.
Directors and their interests
The beneficial and other interests of the Directors and their families in the shares of the Company for the Directors holding office at 30 
June 2009 were:
Number of ordinary shares and options held:
   At 30 June 2009 At 30 June 2008
     Ordinary Share Ordinary  Share
     shares options shares options
     Number Number Number Number
S Jenkins (Chief Executive)     876,096 975,000 876,096 825,000
P Jennings (Commercial Director)     876,096 700,000 876,096 575,000
W Mathers (Finance Director)     Nil 100,000 Nil Nil
J Conlin (Non-Executive Chairman)     Nil 30,000 Nil Nil
P Dimmock (Non-Executive Director)     Nil 225,000 Nil 200,000
P Kennedy (Non-Executive Director)     75,000 225,000 75,000 200,000
On 17 October 2008, I Williams (Chairman) and H Thanawala (Finance Director) resigned and W Mathers was appointed Finance 
Director. On 24 June 2009 J Conlin was appointed Non-Executive Chairman. The other Directors have been Directors throughout  
the year. 
S Jenkins and P Jennings hold part of their shareholding with OMX Securities Nominees Limited.
Retirement of Directors
P Jennings retires in accordance with section 99(2) of the Company’s Articles of Association and offers himself for re-election. J Conlin 
retires in accordance with section 103(1) of the Company’s Articles of Association and offers himself for election.
Directors’ third party indemnity provisions
The Company maintains indemnity insurance for its Directors and officers against liability in respect of proceedings brought by third 
parties, subject to the terms and conditions of the Companies Act 2006.
Share Capital
At the date of this report 63,408,291 ordinary shares are issued and fully paid. On 25 September 2008 a 1 for 20 share consolidation  
took place. Annual Report and Accounts 2009 25
Substantial shareholders
At 28 October 2009 the following had a disclosable interest in 3% or more of the nominal value of the ordinary share capital of 
the Company:
       Number of 
       shares* Percentage
International Energy Group AG       19,609,425 30.93%
MHR Advisors LLC       5,027,686 7.93%
Shin Cheon Co. Limited       3,814,971 6.02%
Drawbridge Global Macro Master Fund       3,697,072 5.83%
The Company has not been notified of any other person who has an interest in 3% or more in the Companies share capital.
Employees
The success of the business depends upon maintaining a highly qualified and well-motivated workforce and every effort is made to 
achieve a common awareness of the financial and economic factors affecting the performance of the Group. Nautical Petroleum, despite 
being a young company, is committed to being an equal opportunity employer and plans to engage employees with broad backgrounds 
and skills. 
Nominated adviser and broker
The Company has joint brokers, Evolution Securities Limited and Ambrian Partners. Evolution Securities are also the Company’s 
Nominated Adviser.
Supplier payment policy and practice
It is the Group’s policy to settle the terms of payment with suppliers when agreeing the terms of the transaction, to ensure that suppliers 
are aware of these terms and to abide by them. Trade creditors at 30 June 2009 amount to 14 days of purchases made in the year (2008: 
69 days).
Donations
During the year the Group made charitable donations of £1,050 (2008: £250) and no political contributions (2008: £nil).
Financial instruments
The Group’s principal financial instruments comprise cash balances, short term and long term deposits and debtors or creditors that 
arise through the normal course of business as set out in note 20. The financial risk management objectives and policies are discussed  
in note 20.
Key performance indicators
The board reviews the key performance indicators of the business and the company’s progress towards achieving its objectives on a 
quarterly basis. These KPI’s include items such as the cash position, net assets, reportable incidents, drilling results and reserves.
Principal business risks
The Directors are responsible for the effectiveness of the Group’s risk management activities and internal control processes. As a participant in the 
upstream oil & gas industry, Nautical is exposed to a wide range of risks in the conduct of its operations. These risks include:
Financial risks:
Cost inflation »
Oil price movements and fluctuation in discounts for heavy oil »
Adverse taxation legislative changes »
Co-venturer and third party counterparty credit risk »
Operational risks:
Loss of key employees »
Delay and cost overrun on projects, including weather related delay »
HSE incidents »
Poor reservoir performance »
Exploration and appraisal well failures »
Strategic and external risks:
Weak capital markets, inhibiting efficient capital raising »
Commercial misalignment with co-venturers »
Oil price volatility » Governance Nautical Petroleum plc 26
The risks set out above are not exhaustive and additional risks and uncertainties may arise or become material in the future. Any of the 
risks, as well as other risks and uncertainties discussed in this document, could have a material adverse effect on our business. There is 
no absolute assurance that the Group’s exploration and development activities will be successful. The Group seeks to manage these risks 
through its portfolio management, balancing risk across a range of prospects and leads, carrying varying technical and commercial risks, 
and carefully managing the financial exposure to each through the arrangements set out with joint venture partners. 
Going concern
Following the Board’s review of the Group’s financial position and forward cash forecasts, the Directors are of the view that the Group has 
adequate financial resources to continue its operational activities and meet its liabilities as and when they fall due for the foreseeable 
future and for a period of at least 12 months from the date of authorisation of these financial statements. For this reason the financial 
statements are prepared on a going concern basis. 
Board committees
Information on the Audit Committee and the Remuneration Committee is included in the Corporate Governance section of the Annual 
Report. The report of the Remuneration Committee will be the subject of an ordinary resolution at the Annual General Meeting.
 
Disclosure of information to the auditors
Having made enquiries of fellow Directors and of the Company’s auditors, each of the Directors confirms that, to the best of each 
Director’s knowledge and belief, there is no information relevant to the preparation of their report of which the Company’s auditors are 
unaware; and each Director has taken all the steps a Director might reasonably be expected to have taken to be aware of the relevant 
audit information and to establish that the Company’s auditors are aware of that information. This confirmation is given, and should be 
interpreted, in accordance with the provisions of s418 of the Companies Act 2006.
Auditors
A resolution to reappoint Ernst & Young LLP as auditors will be proposed at the forthcoming Annual General Meeting at a fee to be 
agreed in due course by the Audit Committee and the Directors.
Annual General Meeting
The Annual General Meeting will be held on 16 December 2009 as stated in the Notice of Meeting, which accompanies this  
Annual Report.
On behalf of the Board.
Stephen Jenkins
Director
6 November 2009
Directors’ report continued Annual Report and Accounts 2009 27
Directors’ emoluments
The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation arrangements for  
all Executive Directors. The Remuneration Committee assesses the appropriateness of the nature and amount of emoluments of such 
officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum 
stakeholder benefit from the retention of a high quality Board and executive team.
To assist in achieving these objectives, the Remuneration Committee links the nature and amount of Executive Directors’ and officers’ 
emoluments to the Company’s financial and operational performance. 
Details of the nature and amount of each element of the emoluments of each Director of the Company for the previous 12 months are  
as follows:
       Total Total
   Salary Fees Bonus Pension 2009 2008
Name    £’000 £’000 £’000 £’000 £’000 £’000
S Jenkins    191 – 140 13 344 330
P Jennings    81 33 76 6 196 181
W Mathers    81 – 19 6 106 –
I Williams    – 46 – – 46 151
H Thanawala    – 16 – – 16 111
J Conlin    – 1 – – 1 –
P Dimmock    – 28 – – 28 29
P Kennedy    – 41 – – 41 35
Total   353 165 235 25 778 837
I Williams, H Thanawala and P Jennings provided services to the Company through a service agreement with International Energy 
Services Limited, which is a related party. In November 2008, P Jennings became an employee of Nautical. The fees for Ian Williams 
include a payment of £30k which is subject to approval at the AGM in accordance with resolution 8.
S Jenkins has entered into a loan agreement with the Company for £3,948 with an outstanding balance due to the Company at 30 June 
2009 of £1,645 (2008: £1,570).
The pension is a defined contribution scheme.
Share options granted to Directors
     Year to June 2008
   Year to June 2009 Issued 18 January 2008
      Exercise  Exercise
    Date Number price Number price
    issued of shares per share of shares per share
S Jenkins   12 January 2009 150,000 26.75p 125,000 211p
P Jennings   12 January 2009 125,000 26.75p 75,000 211p
W Mathers (appointed 17 October 2008)   13 November 2008 100,000 36.17p Nil –
I Williams (retired 17 October 2008)   – – – 75,000 211p
H Thanawala (retired 17 October 2008)   – – – 50,000 211p
J Conlin (appointed 24 June 2009)   24 June 2009 30,000 57.10p Nil –
P Dimmock   12 January 2009 25,000 26.75p 25,000 211p
P Kennedy   12 January 2009 25,000 26.75p 25,000 211p
The options were all granted under the Nautical share option scheme rules, whereby from the date of issue 25% are exercisable after 6 
months, 25% after 12 months, 25% after 18 months and 25% after 24 months. The options must be exercised within 8 years of issue. None 
of the Directors exercised options during the year. I Williams and H Thanawala resigned on 17 October 2008 and therefore had until 17 
October 2009 to exercise any exercisable options. None were exercised.
Philip Dimmock
Chairman of the Remuneration Committee
6 November 2009
Remuneration report Governance Nautical Petroleum plc 28
As the Company is listed on the Alternative Investment Market (AIM) of the London Stock Exchange, it is not required to comply with 
the provisions of the Combined Code. However, the Board is committed to the high standards of good corporate governance embodied in 
the Combined Code on Corporate Governance and seeks to apply the principles of the Combined Code where practicable for a company 
of Nautical’s size and complexity.
Board of Directors
The Board is responsible for the direction and overall performance of the Group with emphasis on policy and strategy, financial results 
and major operational issues. 
The Code recommends that smaller companies should have at least 2 Non-Executive Directors. Following changes in the year the Board 
now comprises 3 Executive and 3 Non-Executive Directors, one of which is the Chairman, who are independent of management and do 
not participate in the Group’s bonus or pension schemes although the Non-Executive Directors have share options and Mr P Kennedy is  
a shareholder.
The roles of the Chairman and Chief Executive are separate, thus ensuring a division of responsibility at the head of the Group. 
The current Executive Directors are all employed under service contracts with the Company. The services of I Williams and H Thanawala 
until 17 October 2008 and P Jennings until 31 October 2008 were secured through a contract for services with International Energy 
Services Limited, a related party. 
All Directors are subject to re-election by shareholders every 3 years and, on appointment, at the first Annual General Meeting after 
appointment. Appropriate directors and officers’ liability insurance has been arranged by the Company.
Meetings of the Board of Directors
The Board meets at least 4 times a year after all relevant information has been circulated in good time, to discuss a formal scheduled 
agenda covering key areas of the Group’s affairs including operational and financial performance and quarterly management accounts. 
All members of the Board are expected to attend Board Meetings which are scheduled in advance. There was full attendance at all 
meetings throughout the year.
Audit Committee
The Audit Committee is chaired by P Kennedy and its other member is J Conlin. Executive Directors may attend by invitation. The 
minutes of every meeting are taken by the Company Secretary and circulated to the Board at the next Board Meeting at which the 
Chairman provides a verbal report of meetings of the Committee.
The Audit Committee, which meets at least twice a year, is responsible for keeping under review the scope and results of the audit, its 
cost effectiveness and the independence and objectivity of the auditors. It also has oversight responsibility for public reporting and the 
Company’s internal controls. 
Remuneration Committee
The Remuneration Committee is chaired by P Dimmock and its other member is J Conlin. The minutes of every meeting are taken by the 
Company Secretary and circulated to the Board at the next Board Meeting at which the Chairman provides a verbal report of meetings of 
the Committee.
The Remuneration Committee, which meets at least twice a year, is responsible for considering the remuneration packages for executive 
directors and the bonus and share option strategy for the Group and making recommendations as appropriate.
The Remuneration Committee is also responsible for reviewing the performance of the Executive Directors and ensuring that they are 
fairly and responsibly rewarded for their individual contributions to the Group’s overall performance. The Committee’s scope extends to 
all remuneration of Directors including bonus and share options.
None of the Committee has any day-to-day involvement in running the Company and no director participates in discussions about his 
own remuneration.
Nominations Committee
A Nominations Committee was established prior to the appointment of Mr J Conlin as Non-Executive Chairman and currently comprises 
S Jenkins, P Dimmock and P Kennedy. It reviews and recommends to the Board the appointment of Directors and is charged with 
ensuring the necessary balance of skills, knowledge and experience is maintained and represented on the Board. The Nominations 
Committee considers that the current composition of the Board is satisfactory to provide the appropriate governance, administration and 
business counsel in respect of the Company’s affairs.
Corporate governance Annual Report and Accounts 2009 29
Relations with Shareholders
Communication with shareholders is given high priority. Extensive information about the Group’s activities is provided in the Annual 
Reports and Accounts and the Interim Report, which is sent to all shareholders. There is regular dialogue with institutional investors as 
well as presentations to analysts to the time of the release of the annual and interim results. The Company maintains a website (www.
nauticalpetroleum.com) for the purpose of improving information flow to shareholders as well as potential investors. The website 
contains all press announcements and financial reports as well as extensive operational information about the Group’s activities and 
enquiries from individual shareholders on matters relating to their shareholdings and the business of the Group are welcomed. The Board 
encourages shareholders to attend the Annual General Meeting, at which members of the Board, are available to answer questions. 
Internal controls
The Board is responsible for the effectiveness of the Group’s internal controls and is supplied with information to enable it to discharge its 
duties. Internal control systems are designed to meet the particular needs of the Group and to manage rather than eliminate the risk of 
failure to meet business objectives. The internal controls cover financial, operational and compliance matters and are reviewed on an 
ongoing basis. The Group’s internal controls can only provide reasonable and not absolute assurance against material misstatement or 
loss or the risk of failure to meet business objectives. Governance Nautical Petroleum plc 30
Group financial statements
The Directors are responsible for preparing the Directors Report and the Group financial statements in accordance with applicable United 
Kingdom law and those International Financial Reporting Standards (IFRS) as adopted by the European Union.
Under company law the Directors must not approve the Group financial statements unless they are satisfied that they present fairly the 
financial position of the Group and the financial performance and cash flows of the Group for that period. In preparing these financial 
statements, the Directors are required to:
select suitable accounting policies in accordance with IAS 8: Accounting Policies, Changes in Accounting Estimates and Errors and  »
then apply them consistently;
present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable  »
information;
provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand  »
the impact of particular transactions, other events and conditions on the Group’s financial position and financial performance; and
state that the Group has complied with IFRSs, subject to any material departures disclosed and explained in the financial statements. »
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions 
and disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial 
statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Group and hence for 
taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s 
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions.
Directors’ responsibilities for the financial statements Annual Report and Accounts 2009 31
We have audited the Group financial statements of Nautical Petroleum plc for the year ended 30 June 2009 which comprise the 
Consolidated Income Statement, the Consolidated Balance Sheet, the Consolidated Statement of Changes in Equity and the Consolidated 
Cash Flow Statement and the related notes 1 to 28. The financial reporting framework that has been applied in their preparation is 
applicable law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
This report is made solely to the Company’s members, as a body, in accordance with Sections 495 and 496 of the Companies Act 2006. 
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state to them in 
an auditors’ report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone 
other than the Company and the Company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of Directors and auditors
As explained more fully in the Directors’ Responsibilities Statement set out of page 30 the Directors are responsible for the preparation of 
the Group financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the Group financial 
statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to 
comply with the Auditing Practice Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an 
assessment of: whether the accounting policies are appropriate to the group’s circumstances and have been consistently applied and 
adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the 
financial statements.
Opinion on financial statements
In our opinion the group financial statements:
give a true and fair view of the state of the group’s affairs as at 30 June 2009 and of its loss for the year then ended; »
have been properly prepared in accordance with IFRSs as adopted by the European Union; and »
have been prepared in accordance with the requirements of the Companies Act 2006. »
Opinion on other matter prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the group financial statements are prepared is 
consistent with the group financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in our 
opinion:
certain disclosures of directors’ remuneration specified by law are not made; or »
we have not received all the information and explanations we require for our audit. »
Other matter
We have reported separately on the parent company financial statements of Nautical Petroleum Plc for the year ended 30 June 2009.
Kevin Weston (Senior statutory auditor)
For and on behalf of Ernst &Young LLP, Statutory Auditor
Aberdeen
6 November 2009
Independent auditors’ report 
to the members of Nautical Petroleum plc Accounts Nautical Petroleum plc 32
Consolidated income statement 
For the year ended 30 June 2009
       2009 2008
      Notes £’000 £’000
Revenue      3 25 –
Cost of sales       (28) –
Impairment & operating costs of extended well test equipment      (2,472) (157)
Gross loss       (2,475) (157)
Exploration & evaluation: gain on farmout       491 –
Exploration & evaluation: expense       (4,526) (3,294)
Administrative expenses       (1,577)  (1,490)
Foreign exchange gain/(loss)       486 (171)
Operating loss      4 (7,601) (5,112)
Finance income      9 1,314 1,130
Finance costs      9 (349) (538)
Loss before tax       (6,636)  (4,520)
Tax      10/17 749 –
Loss for the year       (5,887)  (4,520)
Attributable to:
Equity holders of the Company       (5,887) (4,505)
Minority interests       – (15)
       (5,887)  (4,520)
Basic and diluted loss per share      11 (9.28) (7.44)
The results above were entirely derived from continuing operations. Annual Report and Accounts 2009 33
       At At
       30 June 30 June 
       2009 2008
      Notes £’000 £’000
Non-current assets
Intangible assets      12 48,857 56,400
Property, plant and equipment      12 277 2,446
Long-term deposits      12 1,000 –
       50,134 58,846
Current assets
Trade and other receivables      14 573 604
Short-term deposits      15 16,000 15,000
Cash and cash equivalents      15 3,061 5,118
       19,634 20,722
Total assets       69,768 79,568
Current liabilities     
Trade and other payables      16 (809) (4,658)
Non-current liabilities
Deferred tax      17 (5,682) (6,431)
Provisions      18 (3,466) (3,024)
       (9,148) (9,455)
Total liabilities       (9,957) (14,113)
Net assets       59,811 65,455
Equity attributable to equity holders
Called up share capital      21 11,588 11,588
Share premium       37,748 37,748
Other reserves      22 29,169 29,169
Cumulative translation reserve       (1,659) (1,659)
Accumulated losses       (17,035) (11,391)
Total equity       59,811 65,455
The financial statements were approved by the Board on 6 November 2009 and were signed on its behalf by:
S Jenkins W Mathers
Chief Executive Finance Director
Consolidated balance sheet 
As at 30 June 2009 Accounts Nautical Petroleum plc 34
     Cumulative
  Share  Share Other translation Retained Minority Total
  capital premium reserves reserve earnings interests equity
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
At 1 July 2007  9,683 20,491 29,169 (1,330) (11,612) 4,219 50,620
Currency translation adjustments  – – – (329) – 72 (257)
Total expenses recognised directly in equity  – – – (329) – 72 (257)
Loss for the year  – – – – (4,505) (15) (4,520)
Total recognised income and expense for the year  – – – (329) (4,505) 57 (4,777)
Share-based payments  – – – – 450 – 450
New shares issued  1,905 18,095 – – – – 20,000
Costs associated with issuance of shares  – (838) – – – – (838)
Effect of change in minority interest  – – – – 4,276 (4,276) –
At 30 June 2008  11,588 37,748 29,169 (1,659) (11,391) – 65,455
Loss for the year  – – – – (5,887) – (5,887)
Total recognised income and expense for the year  – – – – (5,887) – (5,887)
Share-based payments  – – – – 243 – 243
At 30 June 2009  11,588 37,748 29,169 (1,659) (17,035) – 59,811
Consolidated statement of changes in equity 
For the year ended 30 June 2009 Annual Report and Accounts 2009 35
       2009 2008
      Notes £’000 £’000 
Net cash outflow from operating activities      23 (367) (1,684) 
Cash flows from investing activities
Finance income       840 988
Expenditure on development and production assets       (285) –
Expenditure on intangible assets       (11,519) (7,222)
Increase in cash placed on short-term deposit      15 (1,000) (15,000)
Increase in cash placed on long-term deposit      13 (1,000) –
Proceeds from asset disposals       11,938 –
Net cash flow from investing activities       (1,026) (21,234)
Cash flows from financing activities
Proceeds from issue of ordinary shares       – 19,162
Increase in amounts due to JV Partners       – 562
Finance expense       (156) (366)
Repayment of balances due to related undertakings       (508) (265)
Net cash flow from financing activities       (664) 19,093
Decrease in cash and cash equivalents       (2,057) (3,825)
Cash and cash equivalents at beginning of year       5,118 8,943
Cash and cash equivalents at end of year      15 3,061 5,118
Consolidated cash flow statement
For the year ended 30 June 2009 Accounts Nautical Petroleum plc 36
Notes to the financial statements
1. Authorisation of Financial Statements and Statement of Compliance with IFRS
The Group’s financial statements of Nautical Petroleum plc for the year ended 30 June 2009 were authorised for issue by the Board of 
Directors on 6 November 2009 and the balance sheet was signed on the Board’s behalf by Stephen Jenkins and William Mathers. 
Nautical Petroleum plc is a public limited company incorporated in England and Wales. The Company’s ordinary shares are traded on 
AIM on the London Stock Exchange.
2. Accounting policies for the Consolidated Financial Statements
(2.1) Basis of preparation
These consolidated financial statements have been prepared in accordance with the requirements of IFRSs (International Financial 
Reporting Standards) as adopted by the European Union (EU) as they apply to the consolidated financial statements of the Group for the 
year ended 30 June 2009, and applied in accordance with the provisions of the Companies Act 2006.
The Board has reviewed the accounting policies set out below and considers them to be appropriate to the Group’s business activities. 
On 1 April 2005 the Company became the legal Parent Company of Nautical Holdings Limited in a share-for-share transaction and 
changed its name from Bullion Resources plc to Nautical Petroleum plc. Due to the relative size of the companies, Nautical Holdings 
Limited shareholders became the majority holders of the enlarged share capital. Further, the Company’s continuing operations and 
executive management became those of Nautical Holdings Limited. Accordingly, the substance of the combination was that Nautical 
Holdings Limited acquired Nautical Petroleum plc in a reverse acquisition. The share capital of the Group is determined using reverse 
acquisition rules as set out in the note on share capital.
(2.2) Basis of consolidation 
These consolidated financial statements of the Group comprise the financial statements of Nautical Petroleum plc (“Nautical”) and its 
subsidiaries as at 30 June 2009, including the results of the subsidiaries, which are prepared for the same reporting year as the Parent 
Company using consistent accounting policies. 
All intercompany balances, transactions, income and expenses and profits and losses resulting from intra-group transactions are 
eliminated in full. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and 
continue to be consolidated until the date that such control ceases. Control is normally evident when Nautical, or a company which it 
controls, owns more than 50% of the voting rights of a company’s share capital. 
Minority interests represent the portion of profit or loss and net assets not held by the Group and are presented separately in the income 
statement and within equity in the consolidated balance sheet, separately from parent shareholders’ equity.
Where a minority interest is acquired, the difference between the cost of the additional interest in the subsidiary and the minority 
interest’s share of the assets and liabilities reflected in the consolidated balance sheet at the date of the acquisition of the minority 
interest is reflected as being a transaction between owners and the difference is therefore taken to equity.
(2.3) Significant accounting judgements and estimates
In the process of applying the Group’s accounting policies, management make judgements and estimates. The key assumptions 
concerning the future, and other sources of estimation uncertainty at the balance sheet date, that have a significant risk of causing a 
material adjustment to the carrying amounts of assets and liabilities in the financial year are as follows:
The Group determines whether the exploration and evaluation assets are impaired in accordance with policy 2.7. »
The estimates determining the unwinding of the discount on long-term conditional payments, being the expected timings of field  »
development approval and first oil on the Mariner field.
The Group determines whether the Extended Well test equipment has been impaired in accordance with policy 2.8.  »
(2.4) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenues can be reliably 
measured. 
(2.5) Foreign currency translation
The consolidated financial statements are presented in UK sterling, which is the Company’s functional and presentation currency.
Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are 
measured using that functional currency. Transactions in foreign currencies are initially recorded in the functional currency using the 
rate ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are re-translated at the 
functional currency rate of exchange ruling at the balance sheet date. All differences are taken to the income statement. 
The functional currency of Nautical Petroleum AG (NPAG) changed in the year to June 2007 from US dollars to UK sterling. The trigger for 
the change was an underlying change in the currency in which the majority of the underlying cash flows are denominated. At the time of 
the change in October 2007 major work programmes were being undertaken in NPAG, including drilling and seismic, which were 
predominantly denominated in UK sterling. Annual Report and Accounts 2009 37
Up until October 2007 NPAG was accounted for as a foreign subsidiary whereby the assets and liabilities of this subsidiary were 
translated into UK sterling at the rate of exchange ruling at the balance sheet date and its income statement was translated at the 
weighted average rates for the period. The exchange differences arising on the translation were taken directly to a separate component of 
equity (“Cumulative Translation Reserve”). On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating 
to that particular foreign operation is recognised in the income statement as part of the gain or loss on sale. 
(2.6) Intangible assets – Exploration and evaluation assets
Capitalisation
Certain costs (other than payments to acquire the legal right to explore) incurred prior to acquiring the rights to explore are charged 
directly to the income statement. All costs incurred after the rights to explore an area have been obtained, such as geological and 
geophysical costs and other direct costs of exploration (drilling, trenching, sampling and technical feasibility and commercial viability 
activities) and appraisal are accumulated and capitalised as intangible exploration and evaluation (“E&E”) assets. 
E&E costs are not amortised prior to the conclusion of appraisal activities. At completion of appraisal activities, if technical feasibility is 
demonstrated and commercial reserves are discovered, then, following development sanction, the carrying value of the relevant E&E 
asset will be reclassified as a development and production asset, but only after the carrying value of the relevant E&E asset has been 
assessed for impairment, and where appropriate, its carrying value adjusted. If, after completion of appraisal activities in an area, it is not 
possible to determine technical feasibility and commercial viability or if the legal right to explore expires or if the Company decides not 
to continue exploration and evaluation activity, then the costs of such unsuccessful exploration and evaluation is written off to the 
income statement in the period the relevant events occur. 
Impairment 
If and when facts and circumstances indicate that the carrying value of an E&E asset may exceed its recoverable amount an impairment 
review is performed. For E&E assets when there are such indications, an impairment test is carried out by grouping the E&E assets with 
the development and production assets belonging to the same geographical segment to form the Cash-Generating Unit (“CGU”) for 
impairment testing. The equivalent combined carrying value of the CGU is compared against the CGU’s recoverable amount and any 
resulting impairment loss is written off to the income statement. The recoverable amount of the CGU is determined as the higher of its 
fair value less costs to sell and its value in use. 
Acquisitions and Disposals
Farm-in and farm-out transactions of E&E assets are accounted for at cost. Costs are capitalised according to the Group’s interest, net of 
premium received or paid, as costs are incurred. Proceeds from the disposal of an E&E asset, or part of an E&E asset, are deducted from 
the capitalised costs and the difference recognised in the income statement as a gain or loss.
(2.7) Development and Production assets
Capitalisation
Development and Production (D&P) assets are accumulated into single field cost centres and represent the cost of developing the 
commercial reserves and bringing them into production together with the E&E expenditures incurred in finding commercial reserves 
previously transferred from E&E assets as outlined in the policy above. 
Depletion
Costs relating to each single field cost centre are depleted on a unit of production method based on the commercial proven and probable 
reserves for that cost centre. Development assets are not depreciated until production commences. The amortisation calculation takes 
account of the estimated future costs of development of recognised proven and probable reserves, based on current price levels. Changes 
in reserve quantities and cost estimates are recognised prospectively from the last reporting date. 
Impairment
A review is performed for any indication that the value of the Group’s D&P assets may be impaired. For D&P assets when there are such 
indications, an impairment test is carried out on the cash-generating unit. Each cash-generating unit is identified in accordance with IAS 
36. Nautical’s cash-generating units are those assets which generate largely independent cash flows and are normally, but not always, 
single development or production areas. If necessary, additional depletion is charged through the income statement if the capitalised 
costs of the cash-generating unit exceed the associated estimated future discounted cash flows of the related commercial oil and  
gas reserves.
(2.8) Plant and equipment
All equipment is stated at cost less depreciation unless otherwise shown. Cost includes all relevant external expenditure incurred in 
acquiring the asset. No property assets are held within the Group.
The initial cost of equipment comprises its purchase price, including import duties and non-refundable purchase taxes and any directly 
attributable costs of bringing the asset to its working condition and location for its intended use. Expenditures incurred 
after the equipment has been placed into operation, such as repairs and maintenance and overhaul costs, are normally charged 
to the income statement in the year in which the costs are incurred. In situations where it can be clearly demonstrated that the 
expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of equipment 
beyond its original assessed standard of performance, the expenditures are capitalised as an additional cost of equipment.  Accounts Nautical Petroleum plc 38
Notes to the financial statements continued
2. Accounting policies for the Consolidated Financial Statements continued
(2.8) Plant and equipment continued
Depreciation
The Group selects its depreciation rates carefully and reviews them regularly to take account of any changes in circumstances. When 
determining expected economic lives, the Group considers the expected rate of technological developments and the intensity at which 
the assets are expected to be used. Depreciation is calculated on a straight-line basis over the useful life. Useful lives of major classes of 
depreciable assets are:
Extended well test equipment 20 years
Computer equipment        3 years
The useful life and depreciation method are reviewed periodically to ensure that the method and period of depreciation are consistent 
with the expected pattern of economic benefits from items of equipment. 
An item of equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any 
gain or loss on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the 
asset) is included in the income statement in the year the asset is derecognised. 
Impairment
At each balance sheet date, reviews are carried out of the carrying amounts of the assets to determine whether there is any indication 
that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in 
order to determine the extent, if any, of the impairment loss. Where the asset does not generate cash flows that are independent from the 
other assets, estimates are made of the cash-generating unit to which the asset belongs. 
The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, estimated future cash 
flows are discounted to their present value using a discount rate appropriate to the specific asset or cash-generating unit. If the 
recoverable amount of an asset or cash-generating unit is estimated to be less than its carrying amount, the carrying amount of the asset 
or cash-generating unit is reduced to its recoverable amount. Impairment losses are recognised immediately in the income statement. 
(2.9) Joint ventures
The Group is engaged in oil and gas exploration, development and production through unincorporated joint ventures. The Group 
accounts for its share of the results and net assets of these joint ventures as jointly controlled assets. Where Nautical acts as operator to 
the joint venture, the gross liabilities, cash and receivables (including amounts due to or from non-operating partners) of the joint venture 
are included in the Group balance sheet.
(2.10) Provisions
Provision for Decommissioning
Provision for decommissioning is recognised in full as an asset and liability when the obligation arises. The asset is included within 
development and productions assets. The liability is included within provisions. The amount recognised is the estimated cost of 
decommissioning, discounted where appropriate to its net present value, and is reassessed each year in accordance with local conditions 
and requirements. Revisions to estimated costs of commissioning which alter the level of provisions required are also reflected in 
adjustments to decommissioning asset.
Conditional payments
Non-current conditional payments are measured at amortised cost using the effective interest rate method, with the unwinding of the 
discount passing though income statement as a finance cost. At each balance sheet, the estimates used to determine the discount 
period are assessed and changes made as appropriate, with the effect of the change being recorded in the current year. 
 
(2.11) Financial assets
Cash and cash equivalents
Cash and cash equivalents comprise cash-in-hand and deposits held with banks with original maturities of 3 months or less.
Short-term deposits
Short-term deposits comprise deposits held with banks which mature in between 3 and 12 months at the balance sheet date.
Long-term deposits
Long-term deposits comprise deposits held with banks which mature in more than 12 months at the balance sheet date.
Trade and other receivables
Trade and other receivables are initially recognised at fair value. Fair value is considered to be the original invoice amount, discounted 
where material. Appropriate allowances for estimated irrecoverable amounts are recognised in the Income Statement if there is objective 
evidence that the receivable is impaired.  Annual Report and Accounts 2009 39
(2.12) Financial liabilities
Trade and Other Payables 
Current trade and other payables are initially recognised at fair value. Fair value is considered to be the original invoice amount, 
discounted where material. 
(2.13) Taxation
Current tax
Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities, based on 
tax rates and laws that are enacted or substantively enacted by the balance sheet date. 
Deferred tax
Deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying 
amounts in the financial statements, with the following exceptions: 
where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a  »
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss;
in respect of taxable temporary differences associated with investment in subsidiaries, associates and joint ventures, where the  »
timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse 
in the foreseeable future; and
deferred income assets are recognised only to the extent that it is probable that taxable profit will be available against which the  »
deductible temporary differences, carried forward tax credits or tax losses can be utilised.
Deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the 
related asset is realised or liability is settled, based on tax rates and laws enacted or substantively enacted at the balance sheet date.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date. Deferred income tax assets and liabilities are 
offset, only if a legally enforcement right exists to set off current tax assets against current tax liabilities, the deferred income taxes relate 
to the same taxation authority and that authority permits the Group to make a single net payment.
Income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity. Otherwise income tax is 
recognised in the income statement.
(2.14) Employee benefits
The Group operates a defined contribution pension scheme. Contributions payable for the year are charged to the income statement. 
(2.15) Share-based payments
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the year in which the 
performance and/or service conditions are fulfilled, ending on the date on which the relevant individuals become fully entitled to the 
award (“vesting point”). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date 
reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments and value 
that will ultimately vest. The income statement charge for the year represents the movement in cumulative expense recognised as at the 
beginning and end of that year. 
The fair value of share-based remuneration is determined at the date of grant and recognised as an expense in the income statement on a 
straight-line basis over the vesting period, taking account of the estimated number of shares that will vest.
The fair value is determined by use of a binomial model.
(2.16) Separately disclosable items
Items that are both material in size and unusual and infrequent in nature are presented as separately disclosable items in the income 
statement or separately disclosed in the notes to the financial statements. The Directors are of the opinion that the separate disclosure of 
these items provides helpful information about the Group’s underlying business performance.
(2.17) Commitments and contingencies
Commitments and contingent liabilities are not recognised in the financial statements. They are disclosed unless the possibility of an 
outflow of resources embodying economic benefits is remote. A contingent asset is not recognised in the financial statements but 
disclosed when an inflow of economic benefits is probable. Accounts Nautical Petroleum plc 40
Notes to the financial statements continued
2. Accounting policies for the Consolidated Financial Statements continued
(2.18) New standards and interpretations not applied
The IASB and IFRIC have issued the following standards and interpretations with an effective date after the commencement date of 
these financial statements:
New standards and interpretations not applied:
International Accounting Standards (IAS/IFRS) Effective date 
IFRS 8 Operating Segments 1 January 2009 
IAS 23 (Revised) Borrowing Costs 1 January 2009
IFRS 2 (Amendment) Share Based Payment – vesting conditions and cancellations 1 January 2009
IFRS 3 (Revised) Business Combinations 1 July 2009 
IAS 1 (Revised) Presentation of Financial Statements 1 January 2009 
Amendment to IAS 32 and IAS 1 “Puttable financial instruments and obligations arising 
 on liquidations” 1 January 2009
Amendment to IFRS 1 and IAS 27 “Amendments for determining the cost of an investment
 in separate financial statements” 1 January 2009
Amendment to IAS 39 ‘eligible hedged items’ 1 January 2009
Improvements to IFRSs (April 2009) 1 July 2009
Improvements to IFRSs (May 2008)  1 January 2009
Amendments to IFRS 2 ‘Group cash settled share-based payment arrangements’ 1 January 2010
International Financial Reporting Interpretations Committee (IFRIC) 
IFRIC 17 Distribution of non-cash assets to owners 1 July 2009
IFRIC 18 Transfer of assets from customers 1 July 2009
IFRIC 15 Agreements for the construction of real estate 1 January 2009
IFRIC 16 Hedges of a Net Investment in a foreign operation 1 October 2008
The Directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the Group’s 
financial statements. 
Upon adoption of IFRS 8, the Group will have to disclose information to enable users of its financial statements to evaluate the nature and 
financial effects of the different business activities in which it engages and the economic environment in which it operates. For the 
Groups’ current business activities, the identification, aggregation and measurement of reportable segments under IFRS 8, would not 
result in any differences from the Groups’ current interpretation of IAS 14 Segment Reporting, the prevailing standard that IFRS 8 will 
replace. IFRS 8 will however, require additional disclosures for each reportable segment as follows:
Criteria for identification  »
Nature, geographic location of business and main customers  »
Financial performance metrics, both Income Statement and Balance Sheet  »
Inter-segment transactions  »
Differences in Accounting policy and methodology between segments »
3. Turnover and segmental information
Revenue disclosed in the income statement is analysed as follows:
       2009 2008
       £’000 £’000
Oil sales       25 –
Revenue       25 –
Finance income       1,314 1,130
Total revenue       1,339 1,130
For the purposes of segmental information the primary segment reporting format is determined to be the business segment. The Group 
has one class of business segment, the exploration for and production of hydrocarbon liquids. No further disclosure is required in relation 
to primary segment reporting in this note as all the relevant disclosure is already detailed throughout the Group financial statements. Annual Report and Accounts 2009 41
The secondary segment information is reported geographically. The Group’s geographical segments are the United Kingdom and Europe. 
The following tables present certain asset information regarding the Group’s geographical segments.
       2009 2008
Segment revenue       £’000 £’000
United Kingdom       25 –
    
       2009 2008
Segment assets       £’000 £’000
United Kingdom       48,781 58,563
Europe       926 887
Assets held centrally       20,061 20,118
       69,768 79,568
       2009 2008
Capital expenditure       £’000 £’000
United Kingdom       8,206 9,898
Europe       40 668
       8,246 10,566
4. Operating loss
       2009 2008
Operating loss is stated after charging:       £’000 £’000
Exploration and evaluation: gain*       (491) –
Exploration and evaluation: expense
− Exploration costs written off (see note 12)       4,057 3,244
− Pre licence expenditure       469 50
Impairment of extended well test equipment       2,376 –
Depreciation of property, plant and equipment       78 142
Foreign exchange losses on conditional payments       660 24
Other foreign exchange (gains)/losses       (1,146) 147
* Gains from farmout of 8/25a Selkie well.
5. Auditors’ remuneration
       2009 2008
       £’000 £’000
Audit of the Group accounts       52 52
Audit of the Company’s accounts       6 6
       58  58
Other fees to auditors:
Audit of the Company’s subsidiaries pursuant to legislation      15 15
Other services pursuant to legislation       29 16
Taxation services       49 51
       93 82
6. Information regarding Directors’ emoluments
Aggregate Directors’ emoluments, which exclude pensions, are £753k (2008: £827k). The emoluments of the highest paid Director were 
£331k (2008: £320k). In addition he received contributions to a defined contribution pension scheme of £13k (2008: £10k). Further 
information is included in the Remuneration report.
7. Employees
Headcount
       2009 2008
       Number Number
Average number of employees of the Group (including Executive Directors) during the year was: 
Management       3 4
Technical staff/support/other       2 2 Accounts Nautical Petroleum plc 42
Notes to the financial statements continued
7. Employees continued
Staff costs
       2009 2008
       £’000 £’000
Wage and salaries       575 672
Bonuses       255 191
Social security costs       92 55
Other pension costs       34 16
       956 934
Equity settled share-based payments       243 450
       1,199 1,384
Wages and salaries include fees for three executive directors through a service agreement with International Energy Services Limited for 
part of the year. Two directors resigned on 17 October 2008 and the third became an employee of Nautical on 1 November 2008.
8. Pension commitments 
For direct employees of Nautical Petroleum plc, the Company contributes 7% of salary to a defined contribution pension scheme. £34k 
has been charged to the income statement for the year (2008: £16k).
9. Interest and similar items 
       2009 2008
Finance income       £’000 £’000
Bank interest       775 988
Other financial income       426 142
Gain on settlement of amounts due to related undertakings      113 –
       1,314 1,130
       2009 2008
Finance costs       £’000 £’000
Costs of borrowing facility       161 366
Unwinding of discounts on long-term payables       188 172
       349 538
10. Tax on loss on ordinary activities 
The major components of the tax credit are:
       2009 2008
Deferred income tax:       £’000 £’000
Relating to origination and reversal of temporary differences      1,151 –
Benefit of previously unrecognised tax losses       (1,900) –
       (749) –
A reconciliation between the tax credit and the product of the accounting profit multiplied by the standard income tax rate is as follows:
       2009 2009
       £’000 £’000
Loss before tax       (6,636) (4,520)
Loss before tax at the standard UK corporation tax of 28% (2008: 28%)     (1,858) (1,266)
Effects of:
Expenses and (income) not deductible for tax purposes       (179) (106)
Deferred tax assets not recognised        3,008 1,211
Utilisation of deferred tax assets not recognised        (1,900) –
Effect of supplementary charge       180  –
Unrelieved tax losses and other deductions arising       – 161
Total tax credit on loss on ordinary activities       (749) – Annual Report and Accounts 2009 43
11. Loss per share
       2009 2008
Loss for the year attributable to equity holders (£’000)       (5,887) (4,505)
Basic weighted average number of shares in issue in the year (thousands)     63,408 60,590
Basic and diluted loss per ordinary share (pence)       (9.28) (7.44)
In addition at 30 June 2009 there were a total of 3.48 million options (2008: 2.95 million) and 1.32 million warrants (2008: 1.32 million) in 
issue, which have not been included in the above calculations. All numbers have been adjusted for the 1 for 20 share consolidation, which 
took place on 25 September 2008. Potential ordinary shares resulting from the exercise of share options and warrants are not dilutive.
12. Development & production assets; intangible assets; property, plant and equipment 
Movements during the year were as follows:
      Property, 
    Intangible Property, plant and
    assets plant and equipment
    Exploration equipment Development 
    and  Extended and
    evaluation well test  production 
    assets equipment assets Other Total
Cost    £’000 £’000 £’000 £’000 £’000
At 1 July 2007    49,768 2,796 – 7 52,571
Additions    10,566 – – – 10,566
Exchange adjustments    (690) – – – (690)
Written off    (3,244) – – – (3,244)
At 30 June 2008    56,400 2,796 – 7 59,203
Additions    7,961 – 285 – 8,246
Disposals     (11,447) (2,796) – (7) (14,250)
Written off    (4,057) – – – (4,057)
At 30 June 2009    48,857 – 285 – 49,142
Depletion and depreciation 
At 1 July 2007    – 210 – 5 215
Provided in year    – 140 – 2 142
At 30 June 2008    – 350 – 7 357
Provided in year    – 70 8 – 78
Impairment    – 2,376 – – 2,376
Disposals    – (2,796) – (7) (2,803)
At 30 June 2009    – – 8 – 8
Net book value
At 30 June 2009    48,857 – 277 – 49,134
At 30 June 2008    56,400 2,446 – – 58,846
The exploration and evaluation balance represents the costs related to the fields currently being evaluated and appraised. The amounts 
written off relate to unsuccessful exploration costs primarily due to licences being relinquished or in the process of being relinquished, 
principally the 3/27a Hydra and 8/5 and 9/1 Scylla licences. The disposals of exploration and evaluation assets relate to the farmouts of 
9/2b Kraken, 3/27a Hydra and 8/25a Selkie, which were completed during the year.
The above balances include amounts relating to a 6.67% interest in the Mariner Field, being carried by the Company. Upon field 
development approval, the party to the carry agreement has the option to earn back its 6.67% interest by reimbursement of costs during 
the development phase. These costs amount to approximately £9.5m as at June 2009 (2008: £9.0m). If the party declines to take up its 
option, the Company retains the 6.67% interest upon payment of £1.
In December 2008 management carried out an impairment review on the extended well test equipment in accordance with the policy set 
out in note 2.9 and considered the following:
Due to the specialist nature of the equipment there had been infrequent interest from companies wishing to rent or buy it. »
In the absence of a binding sale agreement or an active market, management is required to make their best estimate of fair value less  »
cost to sell.
Although there had been some interest over a number of years in the equipment none of the enquiries had led to tangible results.  »
Therefore in the current difficult financial markets and the general slow down in industry activity during the past year, management 
have impaired the asset in full.
The equipment was disposed of in June 2009 for zero consideration, although there is a possibility of future consideration if the  »
purchaser finds a buyer. Management do not think the probability of this to be sufficient to attribute any value to it. Accounts Nautical Petroleum plc 44
Notes to the financial statements continued
13. Long-term deposits
       30 June  30 June
       2009 2008
       £’000 £’000
       1,000 –
Long-term deposits represent a fixed deposit with Abbey National of £1.0m earning interest at 3.2% which matures on 2 July 2010.
14. Trade and other receivables
       30 June 30 June
        2009 2008
       £’000 £’000
Other debtors       494 481
Prepayments and accrued interest       79 123
       573 604
None of the above are impaired.
15. Cash and short-term deposits
       30 June  30 June
       2009  2008
       £’000 £’000
Cash at bank and in hand       1,286 3,649
Deposits of 3 months or less       1,775 1,469
       3,061 5,118
Short-term deposits       16,000 15,000
Cash at bank earns interest at floating rates. Deposits of 3 months or less earn interest at the respective bank deposit rates. Short-term 
deposits are made for varying original periods of greater than 3 months and less than 12 months depending on the immediate cash 
requirements of the Group, and earn interest at the respective short-term deposit rates.
In addition the Company has £1.0m on deposit for more than one year, details of which are in note 13.
16. Trade and other payables
       30 June  30 June
       2009 2008
Current liabilities       £’000 £’000
Trade creditors       504 1,806
Amounts owed to related companies       13 509
Accruals       292 2,343
       809 4,658
17. Deferred taxation
       30 June  30 June
       2009 2008
Balance sheet movements: deferred tax asset       £’000 £’000
Tax losses       3,918 –
       30 June  30 June
       2009 2008
Balance sheet movements: deferred tax liability       £’000 £’000
Accelerated capital allowances       4,328 –
Acquisition fair value adjustments       5,272 6,431
       9,600 6,431
Net Deferred tax liability       5,682 6,431 Annual Report and Accounts 2009 45
       30 June  30 June
       2009 2008
Income statement movements       £’000 £’000
Accelerated capital allowances       4,328 –
Acquisition fair value adjustments       (1,159) –
Tax losses       (3,918) –
       (749) –
In addition to the above balances for tax losses and accelerated capital allowances, which were recognised at a tax rate of 50%, the  
group has a deferred tax asset not yet recognised at a tax rate of 28% of £3.5m (2008: £2.4m), which has not been recognised as a result  
of existing uncertainties of their realisation. These arise from tax losses of £3.4m (2008: £5.3m), depreciation in excess of capital 
allowances of £6.3m (2008: £3.2m) and deferred consideration of £2.8m (2008: £nil). The tax losses are available indefinitely against  
future taxable profits.
18. Provisions
      Provision for Conditional
      Decommissioning payments
      £’000 £’000
At 1 July 2008       – 3,024
Additions       20 –
Exchange adjustments       – 660
Effect of change in estimates       – (426)
Unwinding of discount       – 188
At 30 June 2009       20 3,446
At 30 June 2009 a £20k provision has been made for decommissioning costs related to the Keddington field. 
Conditional payments comprise 2 amounts relating to the Mariner Field of: (1) $4.0m due on Field Development Plan (FDP) approval by 
the Department of Energy and Climate Change (DECC) which is not expected before 2011; and (2) $2.8m due on first oil which is not 
expected before 2014. The Company believes these events to be sufficiently probable as to provide for their payment. The liabilities were 
acquired as part of the acquisition of the Alba Resources (Holdings) Group in August 2005. At this date they were fair valued. The 
movement in the year includes both exchange movements and unwinding of the discount, which are shown in the income statement. 
The change in estimates applies to a revision of the estimated trigger dates.
19. Borrowing facility
On 2 November 2007, the Group entered into an 18 month £7.5m borrowing facility with the Bank of Scotland for general working capital 
purposes. On 30 March 2009 this facility was extended to 31 May 2012 with any amounts drawn repayable in full by that date. No 
amounts had been drawn at the balance sheet date. The facility is secured by a first ranking debenture over the assets of the Company 
and the assets of certain subsidiaries, principally Alba Resources Limited which has a 26.67% interest in the Mariner field. Interest is 
chargeable at 3 or 6 months LIBOR, as chosen by the Company, plus a margin of 2.75%. 
20. Financial instruments
       30 June  30 June
       2009 2008
       Book value Book value
       £’000 £’000
Financial assets
Cash and cash equivalents       3,061 5,118
Short-term deposits       16,000 15,000
Long-term deposits       1,000 –
Other debtors (note 14)       573 481
Financial liabilities
Trade and other payables – current       809 4,658
There is no material difference between the carrying value and fair value of the financial instruments.
Financial risks
The Group is exposed to financial risks arising out of market risks, credit risks and liquidity risks. The Board reviews and establishes 
appropriate policies for the management of these risks and monitors them on a regular basis.
Market risks
Market risks relate to commodity prices, foreign currency exchange rates and interest rate risks.
(1) Commodity price risk
The Group has only a small amount of revenue, so is not exposed to any material commodity price risk on its financial instruments. Accounts Nautical Petroleum plc 46
Notes to the financial statements continued
20. Financial instruments continued
(2) Foreign currency risk
The Group has transactional currency exposure whereby expenditure is incurred in currencies which are not the functional currency of 
the relevant Group company (UK sterling). The primary exposure is to the US dollar. The Group monitors exchange rate movements and 
considers forward purchase of US dollars prior to major capital programmes requiring dollars.
The non-current liabilities are payments which are triggered on future events as set out in note 18, which are in US dollars. The impact of 
a 10% change in the UK sterling/USD exchange rate would have caused ±£344k (2008: £320k) effect on the profit before tax.
(3) Interest rate risk
The Group has not drawn on its bank facility. If it were to do so, it would be exposed to interest movements, as the rate is linked to LIBOR 
rates as described in note 19.
There is an insignificant risk of change in value of cash deposits.
Credit risks
Credit risk is primarily that a partner fails to pay amounts due causing financial loss to the Group. The Group currently has limited 
exposure to such credit risk. Maximum exposure would be the amounts shown in the balance sheet.
The Group is exposed to credit risk on the financial institutions with which it holds cash, short-term deposits and deposits maturing in 
greater than one year. At June 2009 the Company had a £1.0 million deposit which matures on 2 July 2010 with Abbey National (part of 
the Santander group). Substantially all other cash was with Bank of Scotland, except for small balances with BNP Paribas and UBS. 
Subsequent to the year end, further funds were placed with Abbey, Scottish Widows and Anglo Irish Bank. 
Liquidity risks
Liquidity risk is the risk that sources of funding for the Group’s business activities are not available. As a business which primarily 
focuses on oil and gas exploration and appraisal, the primary source of funding of the Group’s activities is equity. The Group has been 
successful in raising equity on a number of occasions, most recently in October 2007, when £20.0m (before issue costs) were raised. 
When appropriate, the Group seeks to supplement equity funding with borrowing and a £7.5m facility was secured with Bank of Scotland 
in November 2007 for general working capital purposes, which has been extended to May 2012. The Board always ensures that there is 
sufficient funding available before committing to any significant expenditure. In addition the Group has been successful at mitigating 
risk through its farmout programmes whereby the majority of expenditure on its drilling programmes is borne by partners. There is 
currently, therefore, limited exposure to a liquidity risk. 
The maturity profile of the Group’s non-current financial liabilities is dependent upon certain events as explained in note 18. The current 
liabilities are all due within 1 year. The Group’s payment policy is to settle amounts in accordance with agreed payment terms which is 
typically 30 days.
Capital management 
The Group defines capital as the total equity of the Group. The objective of the Group’s capital management is to ensure that it makes the 
maximum use of its capital to support its business and maximise shareholder value. There are no external constraints on the Group’s 
capital. As the Group’s primary focus is on exploration and appraisal, equity has been the principal form of funding. A credit facility has 
been arranged with Bank of Scotland in order to provide added flexibility (see note 19). As the Group begins to develop its fields, debt will 
be become more significant.
21. Share capital 
   At 30 June 2009 At 30 June 2008
    Number £’000 Number £’000
Authorised
Ordinary shares of 20p each    100,000,000 20,000 100,000,000 20,000
Allotted, called up and fully paid
Ordinary shares of 20p each    3,875,000 100 3,875,000   100
Reverse acquisition capital adjustment    34,875,000 6,556 34,875,000 6,556
Ordinary shares of 20p each    24,658,291 4,932 24,658,291 4,932
    63,408,291 11,588 63,408,291  11,588
All numbers have been adjusted for the 1 for 20 share consolidation, which took place on 25 September 2008.
Under reverse acquisition accounting, the legal parent is Nautical Petroleum plc, but the Group results at the date of acquisition are as if 
Nautical Holdings Limited were the parent. The value of the shares at the date of acquisition is based on the value of the share capital of 
Nautical Holdings Limited at the date of acquisition (1 April 2005). Following the reverse acquisition, the Group shows the additions 
made for Nautical Petroleum plc only. The reverse acquisition capital adjustment is the deemed value of capital acquired on the reverse 
takeover and the associated number of shares is the share capital issued for the takeover. Annual Report and Accounts 2009 47
The movement on issued shares is set out in the following table. All movements are for ordinary 20p shares as adjusted for the 1 for 20 
share consolidation, which took place on 25 September 2008.
        Number
       of shares
      Date issued Issue price  issued
At 1 July 2007       53,884,481
Private equity placing     17 October 2007 210p 9,523,810
At 30 June 2008       63,408,291
Movement in year       –
At 30 June 2009       63,408,291
All movements in the following notes have been adjusted for the 1 for 20 share consolidation, which took place on 25 September 2008.
The Group announced on 24 November 2005 the acquisition of 22% of the St Laurent Permit onshore France field with the consideration 
to be satisfied by the issuance of 19,388 new ordinary shares of 20p each. The seller has not yet requested the issue of these shares. 
On 4 July 2005 the Group announced the issuance of 583,334 warrants to subscribe for new ordinary shares at 400p per share exercisable 
up to 3 July 2009. The Company has the right to require warrant holders to exercise their warrants should the closing price of the 
Company’s ordinary shares remain above 800p per share for 90 consecutive trading days in the year to 3 July 2009. These warrants 
expired post year end without being exercised.
On 3 January 2006 the Group announced the issuance of 731,890 warrants to subscribe for new ordinary shares at 400p per share 
exercisable up to 3 January 2010. The Company has the right to require warrant holders to exercise their warrants should the closing 
price of the Company’s ordinary shares remain above 800p per share for 90 consecutive trading days in the year to 3 January 2010.
Equity settled share options
At the balance sheet date and at the date of this report, the following share options are outstanding:
       Exercisable  Exercisable
      Held by at  at
Date    Exercisable Exercise Total current 30 June 9 November
Issued   by Price Issued Directors 2009 2009
7 March 2005  7 March 2013 80.00p 1,000,000 600,000 1,000,000 600,000
23 September 2005  23 September 2010 250.75p 50,000 – 50,000 50,000
26 September 2005  26 September 2013 220.00p 1,025,000 650,000 1,025,000 675,000
18 January 2007  18 January 2015 177.00p 412,500 250,000 412,500 287,500
18 January 2008  18 January 2016 211.00p 447,500 300,000 223,750 337,500
15 April 2008  15 April 2016 185.00p 15,000 – 7,500 11,250
13 November 2008  13 November 2016 36.17p 100,000 100,000 25,000 25,000
12 January 2009  12 January 2017 26.75p 395,000 325,000 – 98,750
24 June 2009  24 June 2017 57.10p 30,000 30,000 – –
Balance at 30 June 2009     3,475,000 2,255,000 2,743,750 2,085,000
Balance at 6 November 2009     3,475,000 2,255,000 2,743,750 2,085,000
The options were all granted under the Nautical share option scheme rules (with the exception of the 50,000 options granted on 23 
September 2005 in association with the acquisition of the Alba Resources (Holdings) Group), whereby from the date of issue 25% are 
exercisable after 6 months, 25% after 12 months, 25% after 18 months and 25% after 24 months. The options must be exercised within 8 
years of issue. The exercise price is the highest of either: the nominal value of the shares (20p), the average price for the 30 days 
preceding grant date or the price on grant date. None of the Directors exercised options during the year. I Williams and H Thanawala 
resigned on 17 October 2008 and therefore had until 17 October 2009 to exercise any exercisable options. None were exercised.
The weighted average share price in the year was 55.7p (2008: 194.2p). The weighted average remaining contract life at 30 June 2009 was 
4.90 years (2008: 5.55 years). The weighted average fair value of options granted in the year was 13.96p (2008: 84.8p). 
The expense recognised for share-based payments in the year to 30 June 2009 was £243k (2008: £450k). 
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options during the year.
     2009 2009 2008 2008
      Number WAEP Number WAEP
Outstanding at beginning of year     2,952,500 165.6  2,487,500 157.2
Granted during the year     525,000 30.3  465,000 210.2
At 30 June     3,477,500 145.1  2,952,500 165.6
At 30 June 2009, 2.75 million options are exercisable (2008: 2.28 million). Accounts Nautical Petroleum plc 48
Notes to the financial statements continued
21. Share capital continued
The fair value of the share options granted is estimated using a binomial model. The following table lists the inputs and assumptions 
used in the model. 
     13 November 12 January 24 June 
     2009 2009 2009 2008
Dividend yield     – – – –
Expected share price volatility      67.4% 73.7% 74.0% 54.0%
Risk free interest rate     3.00% 3.00% 3.45% 4.50%
Leaver rate     5% 5% 5% 5%
Volatility has been based on a weighted average of Nautical’s and its peer group’s share prices. 
22. Reconciliation of movements in equity
The reconciliation of movements in equity is detailed in the consolidated statement of changes in equity. The following is a description of 
the nature and purpose of each reserve.
Share capital and share premium
The Group’s share capital and share premium are explained in note 21.
Cumulative translation reserve
The cumulative translation reserve is used to record exchange differences arising from the translation of the financial statements of 
subsidiaries whose functional currency is not UK sterling and any fair value adjustments associated with their acquisition. These 
movements related to Nautical Petroleum AG, which changed its functional currency from US dollars to UK sterling in October 2007, 
following which no further movements have been recorded.
Other reserves
Other reserves comprise the following:
       30 June  30 June
       2009 2008
       £’000 £’000
Capital contribution       2,702 2,702
Merger reserve       12,173 12,173
Warrant reserve       263 263
Capital reserve       14,031 14,031
       29,169 29,169
The capital contribution arose on the formation of Nautical Holdings Limited (see note 21 for explanation of reverse acquisition 
accounting) when equipment was contributed to the Company.
The merger reserve arises from UK law for merger relief, which sets out rules for subsidiaries acquired in whole or in part for shares, 
where at least 90% of the Company is acquired. In such circumstances, where the Company prepares accounts under UK GAAP, the 
investment in the Company’s financial statements is at the nominal value of the shares issued. In the Group’s financial statements, the 
premium is recorded in the merger reserve.
The warrant reserve shows the value of share warrants issued.
The capital reserve arose from the fair value exercise on acquisition of Nautical Petroleum AG. Annual Report and Accounts 2009 49
23. Net cash flows from operating activities
 
       2009 2008
       £’000 £’000
Loss for the year       (5,887) (4,521)
Finance income       (1,314) (1,130)
Finance costs       349 538
Taxation       (749) –
Impairment of equipment       2,376 –
Exploration gain       (491) –
Exploration costs written off       4,057 3,244
Share-based payment charges       243 450
Depreciation       79 142
Unrealised foreign exchange movements       804 171
Operating cash flow before working capital movements       (533) (1,106)
Decrease/(increase) in trade and other receivables       38 (432)
Increase/(decrease) in trade and other payables       128 (146)
Net cash outflow from operating activities       (367) (1,684)
24. Analysis of net cash
    At  At    At
    1 July   1 July  30 June
    2007 Cash flow 2008 Cash flow 2009
    £’000 £’000 £’000 £’000 £’000
Cash at bank and in hand    8,943 (3,825) 5,118 (2,057) 3,061
Short-term deposits    – 15,000 15,000 1,000 16,000
Net cash    8,943 11,175 20,118 (1,057) 19,061
25. Commitments
The Group has capital commitments of £1.7 million (2008: £nil).
26. Related party transactions
(a) Key management personnel
The Group defines key management personnel as the Directors of the Company. S Jenkins has entered into a loan agreement with the 
Company for £3,948 with an outstanding balance due to the Company at 30 June 2009 of £1,645 (2008: £1,570). There are no transactions 
with Directors, other than their remuneration as disclosed in the Remuneration report.
(b) Other related parties
Executive Directors, I Williams, H Thanawala and P Jennings provided services under a service agreement with International Energy 
Services Limited (IESL) for part of the year. I Williams and H Thanawala resigned on 17 October 2008 and P Jennings became an 
employee of Nautical on 1 November 2008. The charges in the year were £66k (2008: £443k).
IESL is a 100% subsidiary of International Energy Group AG (IEG). Nautical Petroleum plc is an associate of IEG and as such IESL is a 
related party. IESL provides services to companies within the IEG Group and associates. Such shared services include the occupation of 
shared office space and facilities and some administrative functions and amounted to £301k (2008: £273k), which was in addition to the 
services of the Directors. At the year end an amount of £30k (2008: £157k) was due to IESL. In addition, at the year end there was £11k 
(2008: £451k) due to IEG.
27. Ultimate parent undertaking and controlling party
Details of substantial shareholders are set out in the Directors report with the largest shareholder being International Energy Group AG 
(IEG), a company registered in Switzerland. At 30 June 2009 IEG had a holding of 30.93%. The Directors consider that no company has a 
controlling interest in Nautical. Accounts Nautical Petroleum plc 50
28. Subsidiary undertakings
 Country of   Proportion of
 incorporation/  voting rights
Subsidiary registration Holding & shares held  Activity
Nautical Holdings Limited England Ordinary shares 100% Investment and oil equipment
UAH Limited* England Ordinary shares 100% Investment
Nautical Petroleum AG* Switzerland Ordinary shares 100% Exploration, development and production
Alba Resources (Holdings) Limited Scotland Ordinary shares 100% Investment
Alba Resources Limited* Scotland  Ordinary shares 100% Exploration, development and production
Mountwest 560 Limited* Scotland Ordinary shares 100% Exploration, development and production
Mountwest 561 Limited* Scotland Ordinary shares 100% Exploration, development and production
Mountwest 562 Limited* Scotland Ordinary shares 100% Dormant
First Mariner Limited England Ordinary shares 100% Exploration, development and production
* Held by subsidiary undertakings
Nautical Petroleum AG carries out its activities through a UK Branch.
Notes to the financial statements continued Annual Report and Accounts 2009 51
Directors’ responsibilities for the Parent Company financial statements
The Directors are responsible for preparing the Directors Report and the financial statements in accordance with applicable law  
and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to 
prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom 
Accounting Standards and applicable law). Under company law the Directors must not approve the financial statements unless they are 
satisfied that they give a true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period. 
In preparing these financial statements, the Directors are required to:
select suitable accounting policies and then apply them consistently; »
make judgements and accounting estimates that are reasonable and prudent; »
state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in  »
the financial statements;
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue   »
in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the 
financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and 
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s 
website. Legislation in the United Kingdom governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions.
Nautical Petroleum plc Company only accounts 2009 Accounts Nautical Petroleum plc 52
We have audited the parent company financial statements of Nautical Petroleum plc for the year ended 30 June 2009 which comprise the 
Company Balance Sheet and the related notes 29 to 38. The financial reporting framework that has been applied in their preparation is 
applicable law and United Kingdom Accounting Standards (United Kingdom Generally Accepted Accounting Practice).
This report is made solely to the company’s members, as a body, in accordance with Sections 495 and 496 of the Companies Act 2006. 
Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 
an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone 
other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Respective responsibilities of directors and auditors
As explained more fully in the Directors’ Responsibilities Statement set out on page 30, the directors are responsible for the preparation 
of the parent company financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit the 
parent company financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those 
standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an 
assessment of: whether the accounting policies are appropriate to the parent company’s circumstances and have been consistently 
applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall 
presentation of the financial statements.
Opinion on financial statements
In our opinion the parent company financial statements:
give a true and fair view of the state of the company’s affairs as at 30 June 2009; »
have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and »
have been prepared in accordance with the requirements of the Companies Act 2006. »
Opinion on other matters prescribed by the Companies Act 2006
In our opinion the information given in the Directors’ Report for the financial year for which the financial statements are prepared is 
consistent with the parent company financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you if, in  
our opinion:
adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from  »
branches not visited by us; or
the parent company financial statements are not in agreement with the accounting records and returns; or »
certain disclosures of directors’ remuneration specified by law are not made; or »
we have not received all the information and explanations we require for our audit. »
Other matter
We have reported separately on the group financial statements of Nautical Petroleum plc for the year ended 30 June 2009.
Kevin Weston (Senior statutory auditor)
For and on behalf of Ernst &Young LLP, Statutory Auditor
Aberdeen
6 November 2009
Independent auditors’ report 
to the members of Nautical Petroleum plc Annual Report and Accounts 2009 53
       2009 2008
      Notes £’000 £’000
Fixed assets
Intangible assets      32 1,365 1,289
Tangible assets      33 – –
Investments      34 11,884 11,884
Total fixed assets       13,249 13,173
Current assets 
Trade debtors and other receivables      35 11,542 12,491
Cash at bank and in hand       20,022 20,096
Total current assets       31,564 32,587
Creditors: amounts falling due within 1 year      36 (1,893) (2,207)
Net current assets       29,671 30,380
Net assets       42,920 43,553
Capital and reserves      37
Called up share capital       12,682 12,682
Share premium       37,015 37,015
Warrant reserve       263 263
Profit and loss reserve       (7,040) (6,407)
Total shareholders’ funds       42,920 43,553
The financial statements were approved by the Board on 6 November 2009 and were signed on its behalf by:
S Jenkins  W Mathers
Chief Executive  Finance Director
Company balance sheet 
As at 30 June 2009 Accounts Nautical Petroleum plc 54
29. Accounting policies
(a) Basis of accounts preparation
The financial statements have been prepared under the historic cost convention and in accordance with applicable United Kingdom 
accounting standards. In addition to the requirements of UK accounting standards, the accounting for oil and gas exploration and 
production activities is guided by the Statement of Recommended Practice (“SORP”) “Accounting for Oil and Gas Exploration, Production 
and Decommissioning Activities” issued by the UK Oil Industry Accounting Committee on 7 June 2001. The financial information has 
been prepared in accordance with the provisions of the SORP.
(b) Exploration, evaluation and development expenditure
All costs incurred after the rights to explore an area have been obtained are accumulated and capitalised as intangible exploration and 
evaluation (E&E) assets. If facts and circumstances indicate that the carrying value of the E&E asset may exceed its recoverable amount 
an impairment review is performed.
Development and Production (D&P) assets are accumulated into single field cost centres and represent the costs of developing the 
commercial reserves and bringing them into production together with the E&E expenditures incurred in finding commercial reserves.
When production commences the capital costs incurred plus an estimate of future costs of development are depleted on the unit of 
production method based on proven and probable reserves for the cost centre. Changes in reserve quantities are recognised 
prospectively from the last reporting date.
(c) Depreciation
The cost of fixed assets is written off over their expected useful lives as follows:
Computer equipment        3 years
As of June 2009 the Company no longer has any equipment capitalised.
(d) Foreign currencies
Assets, liabilities, revenues and costs denominated in foreign currencies are recorded at the rates of exchange ruling at the date of the 
transactions; monetary assets and liabilities at the balance sheet date are translated at the year end rate of exchange. 
(e) Share-based payments
Employees (including Directors and senior Executives) of the Company receive remuneration in the form of share-based payment 
transactions, whereby these individuals render services as consideration for equity instruments (“equity-settled transactions”).
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the 
performance and/or service conditions are fulfilled, ending on the date on which the relevant individuals become fully entitled to the 
award (“vesting point”). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date 
reflects the extent to which the vesting period has expired and the Company’s best estimate of the number of equity instruments and 
value that will ultimately vest. The income statement charge for the year represents the movement in cumulative expense recognised as 
at the beginning and end of that year. 
The fair value of share-based remuneration is determined at the date of grant and recognised as an expense in the income statement on a 
straight-line basis over the vesting period, taking account of the estimated number of shares that will vest. The fair value is determined 
by use of a binomial model.
(f) Investments in subsidiaries
The Company records investments in subsidiaries at cost less provision for impairment. Where subsidiaries have been acquired in part 
for shares and at least 90% of the Company has been acquired the merger relief provisions of the Companies Act 2006 have been applied. 
The share element of the transaction is recorded at the nominal value of the shares issued.
30. Losses attributable to Nautical Petroleum plc
The loss for the year dealt with in the accounts of Nautical Petroleum plc was £876k (2008: £2,222k). As provided by s408 of the 
Companies Act 2006, no profit and loss account is presented in respect of Nautical Petroleum plc.
Notes to the Company financial statements Annual Report and Accounts 2009 55
31. Employees
Headcount
       2009 2008
       Number Number
Average number of employees of the Company (including Executive Directors) during the year was:
Management       3 4
Technical staff/support/other       2 2
Three directors provided services to the Company through a service agreement with International Energy Services Limited, which  
is a related party, for part of the year. Two directors resigned on 17 October 2008 and the third became an employee of Nautical on  
1 November 2008. 
Staff costs
       2009 2008
       £’000 £’000
Wage and salaries       575 672
Bonuses       255 191
Social Security costs       92 55
Other Pension costs       34 16
       956 934
Wages and salaries include fees for three directors provided services to the Company through a service agreement with International 
Energy Services Limited for part of the year. Two directors resigned on 17 October 2008 and the third became an employee of Nautical  
on 1 November 2008. Further Information regarding the remuneration awarded to Directors is provided in the Remuneration Report on 
page 27.
       2009 2008
       £’000 £’000
Equity settled share-based payments       243 450
 
32. Intangible assets
        Total
Exploration and evaluation assets        £’000
At 1 July 2008        1,289
Additions        825
Exploration costs written off        (749)
At 30 June 2009        1,365
The exploration and evaluation balance represents the costs related to the fields currently being evaluated and appraised. The amounts 
written off correspond to licences relinquished in the year.
33. Tangible assets
        Total
Computer equipment        £’000
Cost:
At 1 July 2008        5
Disposals        (5)
At 30 June 2009        –
Depreciation:
At 1 July 2008        5
Disposals        (5)
At 30 June 2009        –
Net book value
At 30 June 2009        –
At 30 June 2008        –
  Accounts Nautical Petroleum plc 56
34. Investments
        Total
Investments in subsidiary companies        £’000
Cost
At 1 July 2008 and at 30 June 2009        11,884
Details of subsidiary companies are shown in note 29. 
In accounting for the acquisitions of Nautical Holdings Limited, the Alba Resources (Holdings) Group and First Mariner Limited the 
Company has applied the merger relief provisions of the Companies Act 2006.
35. Trade debtors and other receivables
 
       2009 2008
       £’000 £’000
Amounts owed by subsidiaries       10,994 11,888
Other debtors       469 480
Prepayments and accrued interest       79 123
       11,542 12,491
36. Creditors: amounts falling due to within 1 year
       2009 2008
       £’000 £’000
Amounts owed to subsidiaries       1,130 –
Trade creditors       430 1,651
Amounts owed to related companies       41 213
Accruals       292 343
       1,893 2,207
37. Share capital and reserves
    Share  Share Warrant Profit and
    capital premium reserve loss reserve Total equity
    £’000 £’000 £’000 £’000 £’000
At 1 July 2008    12,682 37,015 263 (6,407) 43,553
Share option charges added back    – – – 243 243
Loss for the year    – – – (876) (876)
At 30 June 2009    12,682 37,015 263 (7,040) 42,920
Details of share capital and share-based payments are set out in note 21.
38. Related party transactions
Executive Directors, I Williams, H Thanawala and P Jennings provided services under a service agreement with International Energy 
Services Limited (IESL) for part of the year. I Williams and H Thanawala resigned on 17 October 2008 and P Jennings became an 
employee of Nautical on 1 November 2008. The charges in the year were £66k (2008: £443k). S Jenkins has entered into a loan agreement 
with the Company for £3,948 with an outstanding balance due to the Company at 30 June 2009 of £1,645 (2008: £1,570). 
IESL is a 100% subsidiary of International Energy Group AG (IEG). Nautical Petroleum plc is an associate of IEG and as such IESL is a 
related party. IESL provides services to companies within the IEG Group and associates. Such shared services include the occupation of 
shared office space and facilities and some administrative functions and amounted to £301k (2008: £273k), which was in addition to the 
services of the Directors. At the year end an amount of £30k (2008: £157k) was due to IESL.
 
At the year end there was £11k (2008: £113k) due to IEG.
Notes to the Company financial statements continued Annual Report and Accounts 2009 57
Supplementary information
Audit of Reserves and Resource Volumes for Annual Report and Accounts of Nautical Petroleum plc (“the Company”)
We have been asked to provide an updated comment on the resources and reserves estimates for two of the assets of the Company.
The Company asserts that there have been no material technical changes to the inputs and methods that the Company would use in the 
estimation of these quantities, save for the following material changes to the data or interpretations available that have taken place on 
the following assets over the past year: -
Mariner  » (License P.335, UKCS Block 9/11a): the new Operator, Statoil (UK) Ltd, has continued studies and data acquisition to better 
understand the reservoirs. The net result of the new data and studies has been to increase its estimate of the recoverable volumes in 
the Mariner and Heimdal formations. RPS has not had sufficient access to data to verify these estimates. However, given the new 
Operator’s experience in the heavy oil play in the region and the rigour of in its methods, of RPS has no reason to assume that these 
estimates are invalid.
Kraken  » (License P.1077, UKCS Block 9/2b): a third well has been drilled in Kraken, which was dry and resulted in a reduction in 
estimated Contingent Resources. RPS has reviewed the Best Estimate Contingent Resources quoted in the Annual Report and 
concurs with this estimate.
On this basis, we can repeat our opinion that the Company’s estimates of Best Estimate Contingent Resources are, in aggregate, 
reasonable and have been prepared in accordance with generally accepted petroleum engineering and evaluation principles as set forth 
in the Petroleum Resource Management System (2007) and the Standards Pertaining to the Estimating and Auditing of Oil and Gas 
Reserve Information, both promulgated by the Society of Petroleum Engineers et al .
We draw your attention to the following points:
The recoverable volumes in the Mariner field have this year been classified as Best Estimate Contingent Resources (development  »
pending) in line with the Operator’s revised classification, with which we concur.
Estimates of Reserves and Resources are inherently imprecise and uncertain. Presentation of a single estimate does not illustrate the  »
inherent uncertainty in the methods used to arrive at the estimate.
Many of the Company’s projects remain relatively immature and are the subject to ongoing technical evaluation by the Company. As a  »
result there is a large range between low and high volume estimates. Although we deem the estimates to be reasonable, these 
estimates may be subject to significant change as new data becomes available.
We have not reviewed the “risking” or “chance of success” associated with any of the Prospective or Contingent Resources in your  »
portfolio.
Yours faithfully,
R. T. Kelly
Technical Director
RPS Energy Ltd.
5 November 2009  Accounts Nautical Petroleum plc 58
Notes Annual Report and Accounts 2009 59
Notes Accounts Nautical Petroleum plc 60
Notes Nautical Petroleum plc  
is an independent 
hydrocarbon exploration 
and development company 
listed on the London AIM. 
The Company’s mission  
is to acquire, develop and 
add value to discovered 
heavy oil, on the United 
Kingdom Continental 
Shelf and Europe.
Contents
Business review
Highlights 2009 01
The heavy oil market 02
Chairman’s statement 04
Chief Executive’s review 06
Operational review  
 Our portfolio 08
 UK continental shelf 10
 France  18
Finance Director’s review 20
Board of Directors 22
Governance 
Directors’ report 24
Remuneration report 27
Corporate governance 28
Directors’ responsibilities  
for the financial statements 30
Independent auditors’ report 31
 
Accounts
Consolidated income statement 32
Consolidated balance sheet 33
Consolidated statement  
of changes in equity 34
Consolidated cash flow statement 35
Notes to the financial statements 36
Nautical Petroleum plc Company  
only accounts 2009 51
Independent auditors’ report 52
Company balance sheet 53
Notes to the Company  
financial statements 54
Supplementary information 57
Shareholder information ibc
Glossary  ibc
Glossary
Registered and Corporate Office
Parnell House
25 Wilton Road
London
SW1V 1YD
+44 (0)20 7550 4890
+44 (0)20 7550 4946
www.nauticalpetroleum.com
Nominated Adviser and Joint Broker
Evolution Securities Limited
100 Wood Street
London EC2V 7AN 
Tel: +44 (0) 20 7071 4317
Joint Broker
Ambrian Partners Limited
Old Change House
128 Queen Victoria Street
London EC4V 4BJ
Tel: +44 (0)20 7634 4700
Solicitors
CMS Cameron McKenna LLP
Mitre House
160 Aldersgate Street
London
EC1A 4DD
Shareholder information
API American Petroleum Institute
®
bbl barrels
bcf billion cubic feet
bn billion
bopd barrels of oil per day
cp centipoises 
D Darcy
DECC Department of Energy and Climate Change 
DST drill stem test
EWT extended well test
Financial Public Relations
Buchanan Communications Limited
45 Moorfields
London
EC2Y 9AE
Registrars
Capita Registrars
The Registry
34 Beckenham Road
Beckenham
Kent
BR3 4TU
Auditors 
Ernst & Young
Blenheim House
Fountainhall Road
Aberdeen
AB15 4DT
Company Secretary
Audrey Clarke, FCIS
Parnell House
25 Wilton Road
London 
SWIV 1YD
FDP field development plan
km kilometres
K thousand
m million
mmbo million barrels of oil
MWD measurement while drilling
OWC oil-water contact
UKCS United Kingdom Continental Shelf
FPSO Floating, Production, Storage and Offtake
FEED Front End Engineering and Design www.nauticalpetroleum.com
Nautical Petroleum plc
Annual Report and Accounts 2009
Nautical Petroleum Annual Report and Accounts 2009
www.nauticalpetroleum.com
Nautical Petroleum plc
 
Parnell House
25 Wilton Road
London
SW1V 1YD
T: 020 7550 4890
F: 020 7550 4946