Nautical Petroleum plc
Report and Accounts
2008
Nautical Petroleum plc
Parnell House
25 Wilton Road
London
SW1V 1YD
T: 020 7550 4890
F: 020 7550 4946
Nautical Petroleum plc Report and Accounts 2008
www.nauticalpetroleum.com nauticalpetroleum.com
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.
01	 Highlights	2008
02	 Chairman’s	statement
04	 Heavy	oil	marketing
06	 Chief	Executive’s	review
08	 Operational	review	–	 	 Our	portfolio
10	 Operational	review	–	 	 UK	continental	shelf
20	 Operational	review	–	France
22	 Finance	Director’s	review
24	 Board	of	Directors
26	 Directors’	report
29	 Remuneration	report
30	 Corporate	governance
31	 Directors’	responsibilities	for	the	 	 financial	statements
32	 Independent	auditors’	report
33	 Consolidated	income	statement
34	 Consolidated	balance	sheet
35	 Consolidated	statement	of	 	 changes	in	equity
36	 Consolidated	cash	flow	statement
37	 Notes	to	the	financial	statements
52	 Nautical	Petroleum	plc	Company	only	 accounts	2008
53	 Independent	auditors’	report
54	 Company	balance	sheet
55	 Notes	to	the	Company	 	 financial	statements
58	 Supplementary	information
IBC	Shareholder	information
IBC	Glossary
Shareholder information
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 Broker
KBC Peel Hunt
111	Old	Broad	Street
London
EC2N	1PH
+44	(0)20	7418	8900
Solicitors
CMS Cameron McKenna LLP
Mitre	House
160	Aldersgate	Street
London
EC1A	4DD
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
API	 American	Petroleum	Institute
®
bbl	 barrels
bcf	 billion	cubic	feet
bn	 billion
bopd	 barrels	of	oil	per	day
cp	 centipoises	 D	 Darcy
DBERR	 	Department	of	Business,	Environment	 	 and	Regulatory	Reform
DST drill	stem	test
EWT	 extended	well	test
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
Glossary Report and 
Accounts 2008 01
Cornerstone assets
23  
mmbo
Proven and 
probable 
reserves
Drilled 4 wells, including successful Kraken 
9/2b-02 well.
Greatly increased best estimate contingent 
resources to 94mmbo (a 68% uplift on June 2007), 
primarily on Mariner and Kraken.
Raised £20.0m in October 2007.
Farmouts once again endorsed quality of assets, 
with premium terms being achieved, meaning 
limited financial exposure on the wells drilled 
during the period and late 2008.
Kraken and Mariner on track for Field Development 
Plan (FDP) submissions in late 2009/mid-2010.
Cash resources of £20.1m to take your Company to  
FDP submissions.
•
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44
mmbo
Best estimate 
contingent 
resources
37 
mmbo
Best estimate 
contingent 
resources
Field development 
plan submission by 
the end 2009
Field development 
plan submission by 
mid 2010
Mariner
Kraken
Highlights 2008 Nautical  
Petroleum plc 02
Chairman’s 
statement
 “Aside from the activity programme to move  
the Kraken and Mariner discoveries to FDP, the 
Company will continue the active appraisal of its 
substantial exploration portfolio. Nautical is on the 
move and is well into transition on the journey from 
prospects to production.” 
I am pleased to present 
this Report and 
Accounts for Nautical 
Petroleum for the year 
ended 30 June 2008. 
Introduction 
The Company maintained its specialist 
focus and has achieved considerable 
progress through a wide ranging 
programme of asset appraisal activity 
aimed at the key objectives of near term 
production development and early oil flow. 
The prospectivity of the Company’s 
licence portfolio was further endorsed  
by a series of farmin transactions which 
have now completed, on terms which 
clearly evidence industry partner 
confidence in the quality of Nautical’s 
assets. 5 wells and 1 seismic acquisition, 
with a combined cost of £46m, have 
been farmed out. Partners will pay  
£50m, resulting in a £4m suplus and a 
significant contribution to Nautical’s 
strong cash position.
In addition to the 23mmbo of probable 
reserves in Mariner, the Company has 
greatly increased contingent resources, 
achieving a step change from 56mmbo 
in the 2007 Report to 94mmbo – a 68% 
increase. This is accounted for primarily 
by results for the “cornerstone” Kraken 
and Mariner discoveries. In oil resource 
terms, Nautical shareholders have 
benefited significantly from the 
exceptional gains associated with 
the considerable progress made over 
this period. 
Financial results
A successful share placing was completed 
in October 2007 to raise £20m ahead of 
the first Nautical operated well drilled  
on the Kraken discovery late 2007. The 
funds raised, together with the plans for 
progressive multi-block farmouts, ensure 
that sufficient cash exists to cover 
Nautical’s planned equity funding 
requirements to reach FDP (Field 
Development Plan) submissions.
The Company continued to apply 
outsourcing services and risk sharing 
policies aimed at limiting overhead and 
sharing asset appraisal risk to conserve 
cash resources. 
Success in this respect has been 
evidenced by the latest farmouts, which 
have minimised the Nautical share of 
costs of a substantially expanded 
appraisal activity programme. Not all 
drilling has been successful, but where 
drill results were negative, the impact on 
Nautical cash resources was negligible. 
The Company continues to be debt  
free and has also secured a £7.5m 
contingency facility. This facility is 
regarded as fallback for unforeseen 
events and has not, to date, been drawn. 
Portfolio management 
Nautical has had exceptional success 
in attracting industry participation  
in sharing risk by farming in to the 
portfolio. The commercial skills of the 
management team have been evidenced 
by the ability to successfully close deals 
on highly beneficial terms. 
While drilling results have been mixed, 
the execution of drilling projects has 
been exemplary. Management has 
demonstrated a consistent ability to plan 
effectively and complete on time and 
within agreed budget. This performance 
has enhanced the Company’s standing 
both in the industry and with the 
regulatory authorities. 
While the prime focus has been on the 
discovered “cornerstone assets”, 
progress has also been made on the 
extensive portfolio of high graded 
prospects. The portfolio has been  Report and 
Accounts 2008 03
successfully expanded with partners in 
on-shore Europe, with further additions 
secured in France. 
Directors, staff and associates 
The extended Nautical team comprises a 
blend of management, expert specialist 
consultants, independent non-executive 
directors, partner secondees and 
contractors. The Company is very 
appreciative of the commitment and 
goodwill of all who have contributed  
to Nautical’s progress during the year.
The next phase of development  
will require additional specialist 
management capacity and several 
related changes are planned over the 
period to December 2008. 
Since formation the Company has 
contracted the services of Hemant 
Thanawala as CFO and Finance Director, 
sharing these services with other 
companies. The increase in business 
complexity, associated with planned 
progression to production development, 
now warrant the appointment of full  
time financial management in the direct 
employ of the Company. 
The appointment of a Chief Financial 
Officer has been made, effective October 
2008 and it is anticipated that the 
incumbent will also be appointed to the 
Board as Finance Director. 
The Nautical Board is highly appreciative 
of the contribution made by Hemant 
Thanawala from the formation of the 
Company to the present time and 
extends their thanks and best wishes to 
him for his services to the Company. 
It is intended to strengthen the 
management team by the appointment 
of a General Manager, Engineering.  
This appointment is also in preparation 
for the formulation of Field Development 
Approval over the period to 2010 and 
subsequent progression to production 
development and oil flow. 
Market rating 
The disconnect between the evidenced 
and assessed value in the Nautical 
portfolio and the market rating as 
reflected in the Company share price 
over the recent past has been a cause  
for considerable concern to the Board 
and management. 
Advice sought from many quarters failed 
to provide any rational explanation for 
this divergence other than that Nautical 
is a victim of the general market malaise 
associated with international financial 
events and conditions. 
Studies suggesting that Nautical is more or 
less in line with peer group trends are cold 
comfort. The exasperating contradiction  
is that at a time when the value of the 
portfolio is increasing rapidly by all 
conventional assessments, the market 
capitalisation has trended downwards. 
Reality is that Nautical has a well balanced 
portfolio of assets and opportunities. The 
Company has the partners, the cash and 
the capabilities to implement its objective 
of moving our core assets into the 
development phase within an estimated 
18 months. Peer group research of 
comparable upstream oil juniors reveal 
very few able to say the same.
Share consolidation
Having sought advice it was felt 
appropriate and in shareholders’ best 
interests that the company undertake  
a 1 for 20 share consolidation which took 
place on 25 September 2008. The 
associated effective reduction in the bid 
to offer spread is expected to reduce 
volatility, a feature generally supported 
by the institutional investment sector.
Outlook 
The outlook for Nautical continues to be 
extremely positive on all parameters 
which drive and deliver value – the more 
so given the confirmation of recoverable 
resources and the strong financial 
condition of the Company. 
As previously predicted, global trends 
continue to reflect the progressively 
heavier production barrel. Although the 
oil price has come down from the highs 
of well above $100 per barrel, Nautical 
believes that a step change to high 
energy prices has taken place. While 
expert opinion varies at the extremes, 
consensus suggests that price should 
remain well within the range required  
for viable near term production from 
Nautical’s “cornerstone” assets.
Aside from the activity programme to 
move the Kraken and Mariner 
discoveries to FDP, the Company will 
continue the active appraisal of its 
substantial exploration portfolio. 
Nautical is on the move and is well into 
transition on the journey from prospects 
to production. The Company has added 
considerable value over the past year 
and intends to continue to do so in the 
coming year.
Ian Williams
Chairman  Nautical  
Petroleum plc 04
Heavy oil 
marketing
The UK has been 
producing heavy oil in 
the North Sea since the 
1990s. Currently there 
are 3 major fields 
producing heavy oil, 
Captain, Harding, and 
Alba, which equates to 
8% of current UK oil 
production. 
The perception is that these heavy  
crude oils can be difficult to market  
due to the properties of the oil. The 
general concerns relate to the high  
levels of residue in the crude (low value 
product), the acidity (Total Acid Number, 
TAN), metals content (Nickel, Vanadium 
etc) and sulphur content.
The heavy crude oils in the North Sea 
do have a high residue content as can  
be seen from the table below when 
compared with Brent and are therefore 
less valuable to most refiners. The TAN 
figures are high, with anything above 
0.3mg/g, considered problematic for 
conventional refiners. Metals and 
sulphur levels for these heavy crude oils 
are at acceptable levels. Historically 
these issues have been reflected in the 
price the market is prepared to pay.
The discount for these crudes have been 
in excess of 20%. However, more recently 
as conventional crude oil prices have 
risen to the $100 per barrel level we have 
seen the discount narrow to a point 
where some heavy North Sea crude oils 
have been trading at close to parity  
with Brent. 
The Alba crude has recently been 
trading at a 6-7% discount to Brent while 
the Captain discount has been as low  
as 3%. This improvement in the price  
for these crude oils is due to 2 main 
factors. These oils are acidic and have 
characteristics that are of interest to 
specialist naphthenic refiners. These 
refiners have seen a decline in the 
supplies of naphthenic crudes. The main 
source has been from Venezuela, where 
over recent years the production levels of 
these oils have declined severely. 
The UK has also been another major 
source but again there has been a decline 
in production from these fields, with 
Leadon coming off stream completely  
3 years ago. At the same time there has 
been a surge in worldwide demand for the 
specialist products from the naphthenic 
refiners. The combined effect has led to 
the substantial decrease in the discount 
for these types of crude oil.
The products supplied by these refiners 
include, cutting and grinding fluids, 
grease, industrial lubricants, general 
base oils, transformer oils, switchgear 
oils and bitumen products.
We at Nautical Petroleum recognise the 
challenges that heavy oil presents from 
both a technical and marketing aspect and 
are working towards appropriate solutions 
to maximise value for the Company.
   Conventional  Venezuelan  
   oil heavy oil North sea heavy oil
    Tia Juana 
   Brent Pesado Alba Captain Mariner M
API   38.3 11.0 19.4 18.99 14.49
Sulphur wt %   0.36 2.66 1.24 0.72 1.11
TAN mg KOH/g   0.05 4.22 1.42 2.50 4.42
Metals (V+Ni) w ppm   6 463 45 16 35
Vacuum residue wt %    15.1 53.1 33.7 28.3 28.9
 “ The Alba crude has recently been trading at a 6-7% 
discount to Brent while the Captain discount has 
been as low as 3%.”  Report and 
Accounts 2008 05 Nautical  
Petroleum plc 06
Chief Executive’s
review
We were pleased  
to welcome a new 
operator on Mariner 
(StatoilHydro) and  
look forward to 
development on both 
Mariner and Kraken.
Nautical entered into a new exciting 
phase of its development, drilling its first 
operated well on the Kraken discovery – 
a well which confirmed oil in the main 
reservoir and found further oil in a lower 
sand, resulting in an increased oil 
column and increased resources. This 
was followed by 2 operated exploration 
wells on Mermaid and Selkie.
We were pleased to welcome a new 
operator on Mariner (StatoilHydro) and 
look forward to development on both 
Mariner and Kraken. Our focus continues 
to be to build and manage a portfolio of 
heavy oil assets, primarily on the East 
Shetland Platform by means of licensing 
rounds (most cost effective acquisition). 
Nautical will continue to drill both 
appraisal and exploration wells but has 
successfully attracted partners which 
has limited our financial exposure and 
enabled your company to maintain a 
healthy cash balance despite the high 
level of drilling activity, seismic 
acquisition and driving the Mariner and 
Kraken developments forward. Nautical 
maintains its position as the only UK 
listed company offering significant 
exposure to a portfolio ranging from 
heavy oil developments to large 
exploration prospects.
Managing our portfolio
Your Company’s portfolio now has 3 solid 
opportunity legs, the first and second 
being developments of Kraken and 
Mariner and the 3rd an extensive 
portfolio of appraisal/exploration projects 
maintaining balance. The combined 
portfolio is now 17 blocks (13 licences) 
Nautical operating 7 blocks (5 licences).
Our strategy
 Nautical Petroleum plc 
intends to become a 
significant producer of 
heavy oil, initially in the 
UKCS and in Europe. 
Secure further heavy oil 
discoveries in UKCS and 
EU through acquisitions, 
farmins and licensing 
rounds.
Achieve near  
term production  
on current assets. 
> >
Kraken – successful appraisal well
Nautical’s first operated well (9/2b-2) 
was a successful well on the Kraken 
accumulation 2.7 kilometres north of  
9/2-1 encountering heavy oil in both  
the main Heimdal sand and lower  
sands. The result exceeded Nautical’s 
expectations pushing the oil-down-to 
(ODT) down 51 metres, giving a gross 
hydrocarbon column of at least 77 metres 
of lower viscosity than predicted oil.  
The well result indicates a large oil 
accumulation which your Company  
and its aligned Joint Venture partners 
are determined to develop in the shortest 
possible timeframe. In order to achieve 
this both development and technical 
studies are either completed or ongoing 
and a further appraisal well was drilled 
in September/October 2008 on the 
extreme north-eastern flank of the 
mapped structure. Submission of a field 
development plan is anticipated before 
the end of 2009.
Mariner – a new energised operator
StatoilHydro purchased Chevron’s equity 
in Mariner, East Mariner and Bressay 
and became operator in October 2007. 
Nautical is particularly pleased that the 
new operator shares its enthusiasm for 
heavy oil in the East Shetland Platform 
and endorses your Company’s heavy oil 
strategy. StatoilHydro are aggressively 
leading the joint Mariner and East 
Mariner group to develop both 
accumulations. A vigour illustrated 
elsewhere in the drilling and production 
testing of a Bressay well (directly 
northeast of Kraken).
Both the new 3D and ocean bottom 
cable surveys were acquired in the 
summer with results expected by  
the end of 2008. This accelerated  Report and 
Accounts 2008 07
“ We look forward to progressing both Kraken and 
Mariner to early FDP submission and drilling up  
our large appraisal and exploration portfolio to add 
to these development opportunities.”
Enhance crude value and 
mitigate risk through our 
relationships.
Acquire heavy oil 
exploration blocks  
with low/moderate 
commitments.
> >
Farmout to mitigate 
portfolio risk.
Resulting in enhanced 
shareholder value
programme was the first operational 
activity for 11 years over the Mariner 
accumulation. 
The Joint Venture will now proceed to 
submit a field development plan (FDP) 
covering both reservoirs in mid 2010, 
heralding the long awaited first oil  
from Mariner. 
Further significant appraisal and 
exploration opportunities
On both our operated blocks and as 
an active joint venture partner, we 
continue to acquire seismic data and 
carry out integrated studies over the 
blocks to elevate leads to drillable 
prospects, before releasing the potential 
through drilling.
The large Jurassic Hydra prospect was 
confirmed by acquiring our first operated 
seismic and will be drilled in October 
2008, to be followed by a well on Catcher 
in 2009 (28/9 and 28/10b) postponed 
from 2008 due to the operator’s high level 
of activity elsewhere.
Work continues apace on Merrow in the 
East Irish Sea basin confirming a large 
prospect at both Triassic and Permian 
levels. Contingent resources have 
increased on the Tudor Rose discovery 
due to mapping of reprocessed 3D 
seismic and new seismic is planned  
over the Scylla channel (contiguous and 
directly west of the Kraken discovery).
Nautical has been very successful in 
mitigating risk by farming out both 
exploration and appraisal wells, first  
to Celtic Oil Limited, then Canamens 
Energy Limited and Silverstone Energy. 
During the period further farmins were 
agreed with Canamens over the blocks 
8/25a, 9/2b and 3/27a, thus the impact of 
the unsuccessful exploration wells on 
Mermaid and Selkie were minimal and 
your Company has little financial 
exposure to the just completed Kraken 
appraisal well and the forthcoming 
Hydra exploration well whilst retaining 
35% equity interests in both. Your 
Company will continue to attract new 
partners to opportunities and aims to 
retain an equity interest of 30-50% in 
operated blocks and a meaningful 
interest in non-operated licences. 
Portfolio management includes the high 
grading of the blocks resulting in the 
relinquishment of non-prospective 
blocks. However, these will be replaced 
by new opportunities through farmin 
and most likely through licence awards.
Our extensive database and 
understanding of the hydrocarbons 
systems over the East Shetland Platform 
has enabled Nautical to attract new 
partners and retain existing co-venturers 
in high grading blocks for application  
in the 25th Seaward Licensing Round.  
In addition we have joined with our 
existing operators in making selective 
applications in the Moray Firth. The 
blocks are likely to be awarded at 
the end of 2009 or in the new year. 
Further successful French permit 
applications at Pontenx and Gex  
will augment the portfolio when  
officially awarded. 
Oil portfolio audit
RPS Energy carried out an audit  
as at 30 June 2008. A summary of their 
report is included in supplementary 
information at the end of this report.  
The figures in this report for reserves  
are proven plus probable and all 
contingent resources and prospective 
resources are best estimates.
Oil price still high but so are costs
Nautical expects the oil price to remain 
high despite the recent sharp fall off  
from record levels. The narrow quality 
discount is likely to persist since heavy 
oil production in the UKCS is still in 
decline and the sources of naphthenic oil 
are still few and far between.
Operational costs still remain high but 
rig slots seem to be appearing. We aim 
to control costs through farming down 
to reduce our financial exposure to 
upcoming wells. Nautical appears to be 
making some progress in lobbying the 
UK Treasury for improved fiscal terms  
for heavy oil development.
Skill shortages still prevail, however  
we aim to strengthen the engineering 
expertise in our core team whilst 
fostering our relationships with aligned 
contractors. We have demonstrated our 
operational capability by drilling 3 wells 
safely and on budget (2 in the winter). 
This is a great testament to all involved, 
including specific expertise from our 
Joint Venture partners.
The future
We look forward to progressing both 
Kraken and Mariner to early FDP 
submission and drilling up our large 
appraisal and exploration portfolio to  
add to these development opportunities. 
Steve Jenkins
Chief Executive Nautical  
Petroleum plc 08
Operational 
review
Our portfolio
Kraken: Block 9/2b
(Licence P1077 – 35% interest)
A successful appraisal well was 
drilled in October 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 was drilled 
September/October 2008.
Aim to submit FDP before end 2009.
Contingent resources of 106mmbo 
(gross), 37mmbo (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 were acquired 
mid 2008 to better image the large 
Heimdal Sandstone reservoir. 
No more drilling is required and FDP 
submission is planned for mid 2010.
Reserves of 94mmbo (gross), 23mmbo 
(net) and contingent resources of 
180mmbo (gross), 44mmbo (net).
Hydra: Block 3/27a
(Licence P1203 – 35% interest)
High density, high resolution 2D 
seismic was acquired in 2007 and 
a potentially large prospect has 
been defined.
Drilling will commence in  
October 2008. 
Scylla: Blocks 8/5 and 9/1
(Licence P1277 – 100% interest)
High resolution 2D seismic was 
acquired in September and  
October 2008.
Results to be integrated with  
previous data to ascertain if there  
are drillable prospects. 
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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.
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). As at 
September 2008.
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 2009.
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.
Evaluation of seismic and other data 
has confirmed the large Merrow 
prospect, adjacent to Walney Island.
This offshore prospect can be tested 
by a well from a site onshore.
Mermaid: Block 9/11c 
(Licence P979 – 50% interest)
An unsuccessful well was drilled in 
November 2007. 
Remaining prospectivity will be 
determined by the work on the 
adjacent Mariner block, with a 
possible field extension into 9/11c.
Selkie: Block 8/25a 
(Licence P976 – 30% interest)
An unsuccessful well was drilled  
in May 2008 on the Selkie prospect. 
The block also contains the  
Kelpie prospect and is being  
further evaluated.
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Dragon: Blocks 2/3a and 2/4b 
(Licence P1492 – 33.33% interest)
Following evaluation of the blocks  
the Group has decided to relinquish 
the licence.
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. 
An appraisal well drilled in January 
2008 failed to find viable reservoir  
and hydrocarbons. Evaluations are 
being undertaken on the oil bearing 
reservoir to determine the feasibility 
of drilling a production well.
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 contingent resources of 
12.8mmbo (gross), 2.8mmbo (net).
Pontenx: France 
(20% interest)
Located in the Parentis Basin, south-
west France, the permit application 
was successful, with official award 
expected in October 2008.
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 permit application 
was successful, with official award 
expected in October 2008.
Previous drilling on the block 
encountered shallow oil and  
the initial work programme  
will be to reprocess and interpret 
existing seismic and carry out 
geological studies.
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• 3 2
8 9
15
28
14
113
UNITED
KINGDOM
UK NORTH SEA
THE ORKNEY
ISLANDS
THE SHETLAND
ISLANDS
8/5 & 9/1
2/3a & 2/4b
3/27a
9/2b
MARINER (9/11a)
(9/11c)
8/25a
14/30a
28/9 & 28/10a
113/29c
& 113/30
KRAKEN 
Report and 
Accounts 2008 09
FRANCE
SPAIN
ST LAURENT PERMIT
- 24TH ROUND BLOCK
KEY
PONTENX
GEX Nautical  
Petroleum plc 10
Kraken 
Discovery
5 kilometres
Bressay
Lead A
9/2b-2
9/2b-c
9/2b-1A
3/27b-1
3/27a
4
1
2
9/1 9/2b
Operational 
review
UK continental  
shelf
“ The aligned Joint 
Venture aims to submit 
a Field Development 
Plan before the end  
of 2009.”
Kraken
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 and contains the 9/2-1A 
discovery well drilled in 1985 and the 
successful 9/2b-2 appraisal well drilled 
in October 2007 which confirmed the 
substantial Kraken oil accumulation. The 
discovery well tested 15 API oil on drill 
stem test (DST) from the Heimdal 
Sandstone Member of the Tertiary 
(Palaeocene) system. 
Interpretation of over 200 square 
kilometres of reprocessed 3D seismic, 
integrated with newly acquired 2D high 
resolution 2D seismic confirmed a large  
3 way dip closed structure which was 
appraised in October 2007 with the  
9/2b-2 commitment well located 2.7 
kilometres north of the 9/2-1A well  
(the licence entered the 2nd phase on  
1 January 2008). Oil bearing sands were 
encountered in Heimdal sands which 
were readily correlated with those in the 
southern well albeit at a higher elevation. 
A lower sand (represented only by sand 
stringers in the discovery well) was also 
oil bearing.
9/2b-2 proved an oil-down-to (ODT)  
51 metres deeper than 9/2-1 thus 
confirming a substantial accumulation. 
This exceeded the predicted maximum  Report and 
Accounts 2008 11
“The field could be developed using a conventional platform facility. Alternatively 
the field could be developed in phases, initially using a floating production 
vessel (FPSO) to produce from the primary part of the reservoir followed by  
a fixed platform facility.”
Kraken
Contains Kraken oil discovery
Large 3 way dip closed structure
15 API oil
9/2b-2 confirmed substantial 
accumulation
FDP by end 2009
•
•
•
•
•
Key stats
 110    
cp or  
less
Viscosity
(similar to  
the producing 
Captain field)
 106   
mmbo
Gross best 
estimate 
contingent 
resources
pre-drill estimate resulting in an 
upgrade of gross best estimate 
contingent resources from 53mmbo to 
106mmbo within the block of which 
37mmbo are net to Nautical. 
The reservoir quality in all sands was 
excellent with high porosity and 
permeability. Gravity of the recovered  
oil samples was slightly higher than 
expected and viscosity was around 
110cp or less, being a higher API and 
much less viscous than both Bressay 
(1000-1500cp) and Bentley (>2000cp)  
and more similar to the producing 
Captain field. 
The lack of Oil Water Contact (OWC) 
encountered in both the 9/2-1A and  
9/2b-2 wells indicates edge rather than 
bottom water which will delay water 
production when the discovery is 
produced. 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.
A series of transactions negotiated by 
Nautical during the period led to an 
advantageous combination of acquisition 
and farmout (to Canamens) resulting in 
retention of a 45% interest in the 9/2b-2 
well, coupled with a lower share of 
appraisal drilling. 
In anticipation of a further appraisal well 
and submission of a Field Development 
Plan, a high level scoping study was 
commenced by the Joint Venture. Several 
development scenarios were costed, 
production profiles generated and 
economic feasibility studies carried out 
confirming that the Kraken discovery 
was economically viable down to less 
than 30mmbo. If the current best 
estimate contingent resources are 
confirmed by future drilling and reservoir 
simulation, the field could be developed 
using a conventional platform facility. 
Alternatively the field could be developed 
in phases, initially using a floating 
production vessel (FPSO) to produce from 
the primary part of the reservoir followed 
by a fixed platform facility.
 
A wide range of technical studies have 
been conducted in the period which led 
to the choice of the 9/2b-C appraisal  
well location sited on the extreme  
north-eastern flank of the mapped 
structure. This well was designed to 
intersect the oil-water contact and  
to assess the opportunity of upside 
reserves. The studies have also identified 
potential upside in the south west (e.g. 
seismic elastic inversion anomalies, 
which may indicate oil filled sands) and 
this area will be considered for future 
upside appraisal drilling.
Again in order to mitigate risk, Nautical 
has farmed out a further gross 10% 
equity to Canamens in exchange for 
back costs and a carry for your 
Company’s 35%. On FDP submission an 
additional cash bonus will be paid to 
Nautical. The combination of the farmout 
to Canamens and the previously 
negotiated farmout to Celtic Oil Limited 
reduced Nautical’s exposure in the  
9/2b-C appraisal well to zero, whilst 
retaining operatorship and maintaining 
a significant interest in this large oil 
discovery. In the event of successful 
delineation of the Kraken accumulation 
the aligned Joint Venture aims to submit 
a Field Development Plan (FDP) before 
the end of 2009. Nautical  
Petroleum plc 12
9X
3
8
2
5
7
8Y
8Z
6
12
1
9Y
Mariner
Heimdal
Maureen
East
Mariner
5 kilometres
9/11a-10
9/11a
9/11c-13
9Z
4
10Z
9
9X
9/11b-11
11Z
Operational 
review
UK continental  
shelf
Mariner
Path to FDP 
approval (Field 
Development 
Plan) 
Interpretation of 3D and Ocean 
Bottom Cable (OBC) seismic 
surveys to image the Heimdal
No more drilling required
Evaluate field development 
options
•
•
•
FDP submission 
by mid 2010 Report and 
Accounts 2008 13
“StatoilHydro have used their considerable expertise in the Heimdal to modify 
the geological model, away from the multiple well penetrations, resulting in the 
upgrade in the in-place oil volumes and the upgrading of gross best estimate 
contingent resources of Mariner and East Mariner to 180mmbo.”
Mariner
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
•
•
•
•
Key stats
94
mmbo
Gross proven and 
probable reserves
 180 
mmbo
Gross best estimate 
contingent  
resources
contingent resources in the Mariner field 
from 56mmbo to 180mmbo (44mmbo net 
to Nautical, within the block). This 
reservoir has flowed up to 1,800bopd on 
a vertical test. 
Most encouragingly, StatoilHydro ASA 
were assigned operatorship from 
Chevron in October 2007. The new 
operator is a major developer of 
worldwide heavy oil fields including the 
nearby Grane field in Norway which has 
an analogous Heimdal Sandstone 
reservoir and currently produces in the 
order of 200,000bopd and the Peregrino 
field, offshore Brazil which has a similar 
deep water turbidite reservoir to the 
Maureen reservoir in Mariner. As well as 
acquiring Mariner from Chevron, Statoil 
also acquired East Mariner and Bressay, 
reinforcing their North Sea heavy oil 
focus. Mariner and East Mariner are to 
be developed together under a cost 
sharing arrangement with the Mariner 
partners paying 91.5% of costs.
Subsurface, development concept  
and economic studies have continued 
apace confirming Mariner to be an 
economically viable development. 
StatoilHydro have used their 
considerable expertise in the Heimdal to 
modify the geological model, away from 
the multiple well penetrations, resulting 
in the upgrade in the in place oil volumes 
and the upgrading of gross best estimate 
contingent resources of Mariner and 
East Mariner to 180mmbo.
Further characterisation of the Heimdal 
reservoir and its aereal distribution is 
required prior to FDP submission. To this 
end StatoilHydro have applied their 
experience in the Grane field and the 
Joint Venture has acquired 151 square 
kilometres of new 3D seismic data, 
orientated parallel to the depositional 
direction of both the Heimdal and 
Maureen sands. Most importantly this 
was the first significant operational 
activity on the block since the EWT (in 
1997) and lifted the block’s fallow status.
In August 2008 an ocean bottom cable 
(OBC) seismic survey was acquired and 
the processed data will be integrated 
with the 3D seismic (a method proven  
at Grane) to image and determine the 
distribution of the Heimdal. The aim is 
to submit an FDP in mid 2010.
Nautical is carrying a 6.67% interest  
in the Mariner block. Upon field 
development plan approval, Nautical will 
either be required to pay £1 to retain this 
interest or will be reimbursed past costs 
through the development phase, being 
£9.0m at June 2008.
Mariner Block 9/11a (Licence P726)
(Nautical 26.67%)
Located on the East Shetland Platform, 
west of the Viking Graben, Block 9/11a 
contains the Mariner discovery drilled in 
1981. Since then data from several 3D 
seismic surveys have been acquired and 
9 vertical and 6 high-angle horizontal 
appraisal wells have been drilled.  
The vertical wells produced 1,000  
to 1,595bopd.
In 1997, an extended well test (EWT) 
produced 662,000 barrels of oil over 63 
days at a maximum rate of 14,991bopd 
(14.5 API). The main reservoir is the 
Palaeocene Maureen Sandstone which 
has a gross thickness of up to 122 metres 
and excellent reservoir characteristics. 
The trap is both structural and 
stratigraphic, with the reservoir pinching 
out to the west, north and south. In 
2006/07 mapping of reprocessed merged 
3D seismic data resulted in better 
imaging of the Maureen reservoir, 
reducing the range of hydrocarbon 
volumes, as well as the stratigraphic  
and structural uncertainty. There are 
probable reserves of 94mmbo in the 
Mariner field (23mmbo net to Nautical, 
within the block). A shallower 
Palaeocene reservoir, the Heimdal 
Sandstone Member, has been the focus 
of recent work by the new operator 
Statoil, which has led to a substantial 
increase in best estimate gross  Nautical  
Petroleum plc 14
Hydra
Gas 
Chimneys?
Hydra West
Bressay
Kraken
3/27a
3/27b-1
4
1
2
3/27-2
9/1 9/2b
5 kilometres
Proposed 3/27a-C
Operational 
review
UK continental  
shelf
Hydra
Block 3/27a (Licence P1203) 
(Nautical 35% Operator)
Located directly north of Block 9/2b 
(Kraken discovery) on the East Shetland 
Platform, the interpretation of both 2D 
and 3D seismic data was sufficiently 
encouraging to convert the licence from 
Promote to Traditional in October 2006 
and commit to the Department of BERR 
to acquire high resolution, high density 
2D seismic data and drill a contingent 
well to penetrate the Jurassic.
During the autumn of 2007, 1,413 
kilometres of 2D seismic was acquired 
over Block 3/27a extending into Block 
9/2b, representing Nautical’s first 
operated seismic acquisition. The data 
showed considerable improvement in 
imaging both the Heimdal sands and the 
Jurassic wedge. Interpretation confirmed 
both the Jurassic Hydra and the 
Palaeocene Hydra West prospects. 
Hydra appears to be larger than 
previously mapped. However, given  
the stratigraphic nature of the trap and 
the uncertainty of Jurassic sand 
development, Nautical considers this  
to be one of its higher risk exploration 
wells. To mitigate this risk your company 
has farmed down to both Celtic Oil 
Limited and Canamens and reduced its 
exposure to less than £1m. A rig has 
been contracted to drill the Hydra well in 
October 2008.
Drilling 3/27a-C 
October 2008
Hydra
1,413 kilometres 2D seismic acquired 
autumn 2007
Interpretation confirms both  
Jurassic Hydra and Palaeocene 
Hydra West prospects
•
•
Key stats Report and 
Accounts 2008 15
Scylla
survey area
8/5 9/1
5 kilometres
Scylla
Blocks 8/5 and 9/1 (Licence P1277) 
(Nautical 100% Operator)
Blocks 8/5 and 9/1 are contiguous to  
the west of block 9/2b (containing the 
Kraken discovery). Initial mapping of an 
extensive legacy 2D seismic database 
highlighted 2 culminations on a north- 
west, south-east trending channel  
like feature at both the Heimdal and 
Maureen levels. The seismic signature  
is analogous to sand rich channels 
elsewhere on the platform. The 
reprocessing of 250 kilometres of 2D 
seismic has significantly enhanced the 
character of the 2 reservoir horizons and 
the Base Tertiary event. 
A single new 2D high resolution seismic 
line was acquired in October 2007 which 
showed greater clarity at the reservoir 
targets. The licence was converted from 
Promote to Traditional by committing  
to acquire 150 kilometres of new 2D 
seismic and drilling a well, the latter 
contingent on a viable prospect being 
mapped on the new seismic.
A new high resolution 2D seismic survey 
was acquired in September and October 
2008 covering over 700 kilometres. The 
results will be integrated with previous 
data to determine if there are drillable 
prospects. If the contingent well is to  
be drilled, Nautical will undertake a 
farmout campaign prior to drilling.
700 
+kilometres
2D Seismic acquisition 
September/October 2008
Scylla
Seismic signature is analogous to 
sand rich channels elsewhere on  
the platform
250 kilometres reprocessed seismic 
and 1 new line (October 07)
700 kilometres 2D high resolution 2D 
seismic September/October 2008
•
•
•
Key stats Nautical  
Petroleum plc 16
Tudor Rose 
Discovery
Hannay
Lead 1
(Jurassic)
Lead 2
(Jurassic)
Lead 3
(Cretaceous)
14/30c
14/30b
14/30a-2
14/30a
15/26b-8
14/30a-4
14/30b-3
15/26b-5
14/29a-4
20/4-3
20/5-6
14/30-1
14/25-2
14/25-1
5 kilometres
Oil
Gas
Cretaceous
Jurassic
Operational 
Review
UK continental  
shelf
Tudor Rose
Block 14/30a (Licence P1463)
(Nautical 20%)
Located in the Outer Moray Firth 
adjacent to Ivanhoe, Rob Roy and 
Goldeneye fields this Traditional Block, 
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.
The 4 year work programme for the block 
includes reprocessing 3D seismic data 
and a contingent well to be drilled on the 
14/30a-2 discovery. 
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 2 sand bodies  
(1 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, the Joint Venture will then 
decide if a new well is merited by  
early 2011.
Tudor Rose
Contains undeveloped Tudor Rose 
discovery
208 kilometres of 3D seismic 
interpreted 
49mmbo gross best estimate 
contingent resources
•
•
•
Key stats Report and 
Accounts 2008 17
Lead P1
Lead P2
Lead E4
Lead P3
Lead P4
Lead P5
Lead E2
East Catcher
Lead E3
Lead JU1
Lead
JU2 
Catcher
Prospect
(Tertiary)
28/9   28/10b 
Tertiary
Jurassic
5 kilometres
Proposed 29/8-A Well
Catcher
Blocks 28/9 and 28/10b  
(Licence P1430)
(Nautical 15%)
This Traditional 24th Seaward Licencing 
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 2 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.
The work programme includes drilling  
a firm well to test the Catcher prospect. 
The operator (Oilexco) undertook to  
drill the well during the period but its 
development commitments on other 
discoveries has rescheduled the drilling 
into 2009.
Catcher
Well planned to test the Catcher 
prospect in 2009
3D seismic has defined traps
2 large Jurassic leads
21.8mmbo gross best estimate 
prospective resources
•
•
•
•
Key stats Nautical  
Petroleum plc 18
Walney Isl 3BG
Ultramar Biggar1
Walney Isl 1BG
2 2BG, 3&4
Walney Isl
Walney Isl 5
Walney Isl 6
Kennedy Bros
Kendals 17
Sowerby
Brit Cellophane
Devonshire
Dock 1
Davy Street 1
Inst. Geo
Roosecote 1
Rampside 1&2
Inst. Geo
Gleaston 
Castle Farm 1
Walney Isl 1
Lead A
Clyde
112/29a-3
Clyde
112/28a-2
Clyde
113/29-2
113/29c 113/30
Northern Lead
(Collyhurst)
ORMONDE
NORTH
ORMONDE
SOUTH
Merrow
Prospect
(Collyhurst)
Walney Isl
Merrow
prospect
(Ormskirk)
Collyhurst
Ormskirk
5 kilometres
Operational 
review
UK continental  
shelf
Merrow 
Blocks 113/29c and 113/30  
(Licence P1475)
(Nautical 50% Operator)
Awarded as a Traditional Licence in the 
24th Seaward Licencing 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 the 
Blocks are proven by heavy oil columns 
and hydrocarbon shows in the onshore 
wells to the east.
Integration and interpretation of over 700 
kilometres of onshore transition zone and 
offshore seismic, gravity, magnetics and 
outcrop data has confirmed the large 
Merrow prospect at both the Ormskirk 
Sandstone (Triassic) and Collyhurst 
Sandstone (Permian) reservoirs. A small 
4 way dip closed high has been mapped 
at the shallower Ormskirk level but larger 
traps at both levels are mapped by 
relying on sealing in the footwall of an 
antithetic fault to the basin edge (a 
common trapping mechanism elsewhere 
in the basin).
Both reservoirs are proven in the basin, 
the Ormskirk Sandstone being a prolific 
gas producer in numerous fields, 
including the 6tcf Morecambe Field and 
the soon to be developed Ormonde North 
and South Fields, immediately to the 
west of the blocks. Merrow appears to  
Merrow and the North Sea
Located in east Irish Sea basin
700 kilometres onshore transition 
zone and offshore seismic 
Large Merrow prospect at both 
Triassic (Ormskirk) and Permian 
(Collyhurst) reservoirs
•
•
•
Key stats
700 
+kilometres
Onshore transition zone and 
offshore seismic interpreted Report and 
Accounts 2008 19
be analogous to the basin margin 
Lennox oil and gas field, to the south. 
Hydrocarbons are expected to be heavy 
oil or gas. 
Block 9/11c (Licence P979) 
(Nautical 50% Operator)
Located on the East Shetland Platform, 
directly south of the Mariner discovery, 
the Block contains the Mermaid 
prospect, which was drilled in late 2007. 
Unfortunately, despite encountering the 
target Heimdal and Maureen sands on 
prognosis, they were both water wet and 
the well was plugged and abandoned. 
The drilling of the well lifted the Fallow 
status on the Block and no further 
activity is requested by BERR until  
31 December 2010.
In accordance with Nautical’s strategy 
to mitigate risk on exploration wells the 
Mermaid 50% interest in the well was 
farmed out to Celtic Oil Limited and 
Silverstone Energy at a premium, 
meaning Nautical was exposed to 
significantly less than its 50% equity 
interest. Remaining prospectivity  
in the Block is very dependent on the 
interpretation of 2 seismic surveys over 
Mariner and adjacent blocks indicating 
the oil bearing Heimdal extends into the 
North. Similarly, the Group will monitor 
the Broch well, targeting the Eocene in 
adjacent Block 9/11e to be drilled in 
December 2008.
“Merrow appears to be analogous to the basin 
margin Lennox oil and gas field, to the south. 
Hydrocarbons are expected to be heavy oil or gas.”
Selkie: Block 8/25a (Licence P976)
(Nautical 30%)
Selkie was drilled in May 2008 in 13 days 
but, despite the Dornoch Formation 
being penetrated close to prognosis,  
the well was dry. Initial interpretation 
indicated that the shale seal, which 
proved competent in the nearby Skipper 
discovery, was developed as a siltstone 
causing an ineffective top seal to the 
reservoir sands. Nautical had no financial 
exposure to the well having successfully 
farmed out its interest to Canamens  
and Celtic Oil Limited. The Block also 
contains the Kelpie prospect and is 
currently being evaluated for further 
prospectivity. Under the farmout 
agreement, Canamens became  
operator for the Licence.
Blocks 2/3a and 2/4b (Licence P1430)
(Nautical 33.33%)
Awarded as a Promote Licence in the 
24th Seaward Licencing Round in 
February 2007, the Blocks are located in 
the north of the East Shetland Platform 
directly west of the Heather and Broom 
oil fields and contain 2 oil discoveries. 
Well 2/4-1 encountered 16.6° API in the 
Triassic on a bald Brent high. Further 2D 
and 3D seismic was purchased and 
reprocessed to confirm the prospectivity 
of these shallow prospects and further 
Tertiary and Jurassic leads, A 
geochemical study confirmed the 
reported API gravity of the discovered oil.
No further upside in the discoveries and 
limited prospectivity has led the group 
to decide to relinquish the Block. 
Bluebeard: Block 9/12b (Licence 
P1079) and Skipper: Block 9/21 
(Licence P1080)
(Nautical 98.5% Operator)
The blocks contain 3 small discoveries, 
which after extensive seismic reprocessing 
and mapping, were judged to be  
sub-commercial on a standalone basis. 
The discoveries did not merit drilling 
and the Blocks were relinquished. 
Other North Sea activity Nautical  
Petroleum plc 20
Grenade Oil
Discovery
Audignon
Ridge
Pecorade
Oilﬁeld
Albian Gas 
Play
Erosional limit 
of Vraconian
Bg-3
Bg-2
Bg-1
Ec-1
Gaq-2
Gaq-1
Gaq-2fcc
Gaq-2f
Lrb-1
Aud-10
Aud-9
Aud-6
Air-1
Lo-1
But-1
Lvg-1
Lu-1
Mm-1
Mm-2
Mm-1
Bn-1
Vm-1
Gar-3
Gar-1
Gar-2
Poc-2
Ct-101
Cld-201
Poc-4
Poc-3
Aud-8
Aud-4
Aud-11
Scb-1
Scb-201
Srg-1
Cod-1
Nat-1
Nat-2
Bra-201
Tiz-1
Aud-3
5
2
Aud-1
10 kilometres
Operational 
review
France
St Laurent Permit 
Gex and Pontenx applications
St Laurent Permit
(Nautical 22%)
The Saint Laurent Permit in South West 
France contains the undeveloped 
Grenade heavy oil accumulation and 
several further hydrocarbon exploration 
plays. 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.
At the end of 2005, the Company 
acquired 40 kilometres of 2D seismic and 
12 square kilometres of 3D seismic data 
over Grenade, and by integrating the 
new data with both existing reprocessed 
2D seismic data and the results of an 
extensive core study on the Grenade-
Sur-Adour 1 and 2 and Maurrin-1 
reservoirs, were able to better define  
the trap. The resultant mapped trap  
is a large 3-way up-dip pinch-out  
of the reservoirs on a low energy 
carbonate platform.
The Group elected to drill Grenade 3 in 
January 2007. This relatively low cost 
onshore well did not encounter reservoir 
quality carbonates nor any shows but 
proved useful information on the eastern 
boundary of the oil bearing reservoir. 
St Laurent Permit
Grenade heavy oil accumulation with 
12.8mmbo gross best estimate 
contingent resources
Large subsalt gas prospect in the 
Triassic Bunter Sandstone under the 
Audignon Ridge 
•
•
Key stats
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. Report and 
Accounts 2008 21
FRANCE
SPAIN
ST LAURENT PERMIT
PONTENX
GEX
Despite this result, there is remaining 
upside in the Grenade oil accumulation. 
The operator is currently assessing the 
economics of drilling a further 
production well. 
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. 
Gas shows and tests are common in the 
shallow Cretaceous Albian reservoirs in 
the area. 
A farmin partner will be sought before a 
well is drilled. Before renewal and entering 
the next 3 year period, mandatory 
relinquishment of a portion of St Laurent 
Permit has been notified. The attendant 
work programme is very modest.
Gex and Pontenx applications
(Nautical 20%)
As a co-venturer of a group operated by 
Egdon Resources, licence applications 
made in the previous period have been 
successful as of September 2008. Under 
the French licencing system, there will 
now be an official ratification process, 
which may take some time. The permits 
contain redevelopment, appraisal  
and exploration opportunities. Work 
programmes for the first 2 years  
are modest (seismic purchasing, 
reprocessing and studies), with new 
“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.”
“ There is remaining upside in the Grenade oil 
accumulation. The operator is currently assessing 
the economics of drilling a further production well.” 
seismic for year 3 and drilling in year 4 
and beyond. In both permits there is a 
break at the end of year 2 and year 3, if 
prospectivity levels are low. 
Pontenx Permit
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 will have 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
The Gex Permit covers an area of 932 
square kilometres and is located in 
eastern France near the Swiss border. 
This permit will have a 5 year duration 
and the initial 2 year work programme 
will comprise the reprocessing and 
interpretation of the existing seismic 
data and detailed geological studies. 
The area covers the Alpine Molasse 
basin, where seepage 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. Nautical  
Petroleum plc 22
Finance  
Director’s review
The prime focus for  
the Group and its 
management during 
the year was to  
engage in substantial 
exploration and 
appraisal drilling 
activity to progress  
the business towards 
first oil and revenue. 
Introduction
The prime focus for the Group and its 
management during the year was to 
engage in substantial exploration and 
appraisal drilling activity to progress the 
business towards first oil and revenue. 
This involved the drilling of Nautical’s 
first operated appraisal well on the 
Kraken discovery as well as 2 operated 
exploration wells on the Mermaid and 
Selkie prospects. In addition, a further 
non-operated well was drilled by Egdon 
Resources on the Grenade discovery in 
south-west France. The results of this 
drilling programme is covered in more 
detail in the Chief Executive’s review. 
In keeping with the established business 
strategy, Nautical has been successful in 
minimising the call on its own resources 
in the exploration drilling programme 
during the year by entering into further 
farmout arrangements. Whilst these 
have not only carefully conserved the 
existing financial resources of the  
Group during the drilling programme 
undertaken, they have in fact provided 
further capacity for the programme 
going forward. The management  
firmly believe that on the execution  
of the latest farmout agreement with 
Canamens, the Group now has sufficient 
cash resources to take both its key 
assets, Kraken and Mariner, through to 
field development plan approvals during 
the course of 2009/early 2010.
The farmout arrangements that Nautical 
has been able to secure over the last  
3 years not only demonstrates the 
quality of the assets within its portfolio 
but also management’s ability and 
determination to manage risks 
effectively, secure strong industry 
partners and provide the means to  
take the core assets to production  
on a planned and timely basis. With 
StatoilHydro coming in as the operator of 
the Mariner field during the year through 
the acquisition of Chevron’s interest in it, 
Nautical is assured of the commitment  
to bring this field into production on a 
faster track.
Results for the year
The after-tax loss for the year to 30 June 
2008 is £4.5m (2007: £0.4m). This 
includes a write off of exploration costs 
of £3.2m (2007: £nil), general and 
administrative expenses of £1.7m (2007: 
£1.3m) and bank deposit interest income 
of £1.0m (2007: £0.5m). The charge  
for the share options, included in the 
general and administrative expenses,  
is £0.5m (2007: £0.4m).
Exploration costs written off principally 
comprised costs associated with the 
unsuccessful well drilled on the 
Mermaid prospect during the year. 
Basic and diluted loss per share is 0.37p 
(2007: 0.05p).
Balance sheet
At 30 June 2008, the Group had net 
assets of £65.5m (30 June 2007: £50.6m). 
The most significant balances are 
intangible exploration and evaluation 
assets of £56.4m (2007: £49.8m) and  
cash and short-term deposits of £20.1m 
(2007: £8.9m).
The net movement in the total 
exploration and evaluation assets of 
£6.6m comprises £10.5m of expenditures 
less £0.7m of exchange effects and £3.2m 
of write-offs. The significant components 
of spend in the year included £7.2m  
on the Kraken, Mermaid, Selkie and 
Grenade licences, primarily for drilling; 
£0.6m on Hydra, principally for seismic  Report and 
Accounts 2008 23
 “The management firmly believe that on the 
execution of the latest farmout agreement with 
Canamens, the Group now has sufficient cash 
resources to take both its key assets, Kraken and 
Mariner, through to field development plan approvals 
during the course of 2009/early 2010.”
and £2.6m on the Mariner field, including 
development preparation work. £2.2m  
of costs were reimbursed post year end, 
following conclusion of the farmout of 
the Selkie well.
Cash flow
The Group ended the year with £20.1m 
of cash and short-term deposits  
(2007: £8.9m). The Group remains  
debt free, although it has at its disposal 
an undrawn standby loan facility with 
Bank of Scotland for £7.5m expiring in 
May 2009. 
On 17 October 2007 the Group placed 
190,476,191 ordinary shares of 1p  
each at 10.5p each, raising £19.2m  
net of expenses.
During the year, the Group spent £1.7m 
funding the operations, of which £0.9m 
related to staff costs. £7.2m was spent  
on intangible exploration and evaluation 
assets after adjustments for working 
capital movements. Post year end, in 
addition to the £2.2m for the drilling  
of the Selkie well, a further £4.8m was 
received as part of the farmout of Kraken, 
Hydra and Selkie.
All the Group’s cash is held with Bank  
of Scotland and BNP Paribas, and at  
30 June 2008, £15m was held on 
short-term deposits.
Capital structure
The Group had 1,268,165,810 ordinary 
shares of 1p each in issue, out of its 
authorised share capital of 2,000,000,000 
ordinary shares, at 30 June 2008. 
Following a 20:1 share consolidation on 
25 September 2008, there are currently 
63,408,291 ordinary shares of 20p each 
in issue out of 100,000,000 authorised. 
Taking into consideration the 
outstanding options, warrants and 
committed shares, the Board presently 
has a remaining authority to issue 
25,000,000 ordinary shares under section 
80 and 4,267,723 ordinary shares under 
section 89 of the Companies Act 1985. 
These authorities will be reviewed at the 
next AGM, as appropriate.
Treasury and financial  
risk management
Control over treasury and risk 
management is exercised by the Board 
and its Audit Committee through the 
setting of policy and the regular review 
of forecasts and financial exposures. 
Presently, the Group’s financial 
instruments comprise principally  
cash and liquid resources and other 
items, such as accounts receivable  
and payable, which arise directly from 
its operations. It is still the Group’s 
policy not to undertake any trading 
activity in financial instruments, 
including derivatives.
The Board and management are actively 
monitoring the current turmoil in the 
financial markets and have already taken 
measures to reduce credit and liquidity 
risk by ensuring cash deposits are not all 
held with one financial institution.
 
Taxation
At 30 June 2008, the Group has tax 
losses of approximately £3.5m (2007: 
£2.9m) arising in the UK that are 
available indefinitely against future 
taxable profits under current legislation. 
Deferred tax assets of approximately 
£1.9m (2007: £1.1m) have not, however, 
been recognised in the financial 
statements as a result of the 
uncertainties of their realisation  
in the foreseeable future. 
A deferred tax liability of £6.4m (2007: 
£6.6m) has been recognised in the 
financial statements on the acquisition 
of a subsidiary company prior to the 
transition date for IFRS (1 January 2005). 
The tax rate applicable for the periods 
after April 2007 has been reduced to 28% 
for this purpose.
Outlook
The Group has firmly adhered to its core 
business strategy during the year under 
review and will continue to do so going 
forward. We believe that in following this 
strategy, the Group is well positioned  
to reach its primary goal of taking its 
core assets, Kraken and Mariner, right 
through to their field development plan 
approvals without the call for any further 
financial support from our shareholders. 
At the same time, the Group should be 
able to continue with its exploration 
activity on a number of its assets,  
on a selective basis, in conjunction  
with its partners. 
The management continues to place a 
strong emphasis on both our financial 
strategy and risk management strategy 
in order to ensure not only a rapid but  
a carefully managed progression to 
revenue. As noted in the Chairman’s 
statement, steps have already been 
taken in the new year to further 
strengthen the financial management 
function within the Group not only to 
support these strategies but also the 
anticipated increase in the level of 
activity in the foreseeable future.
Hemant Thanawala
Finance Director Nautical  
Petroleum plc 24
Board of  
Directors
1. 2.
3. 4.
5. 6..
7. Report and 
Accounts 2008 25
1. Ian Williams 
Chairman
Ian’s wide-ranging industry experience 
encompasses 27 years with the Royal 
Dutch/Shell Group including 
appointments as Managing Director and 
Deputy Chairman, Shell South Africa, 
Vice President (Downstream), Shell 
Philippines and Head of Strategy & 
Consultancy (Downstream) at Shell 
International Petroleum Company.
 
Ian became Chairman of Nautical on 
1 April 2005. Ian joined the Masefield 
Group in 1999 and holds directorships  
in several Group companies.
2. Steve Jenkins 
Chief Executive 
Stephen has an MSc in Petroleum 
Geology and DIC from Imperial College 
of Science and Technology (University  
of London), a BSc Hons in Geology from 
the Queen’s University Belfast, and is  
a Fellow of the Geological Society of 
London. As part of a 20 year career in  
oil and gas, Stephen spent the 11 years 
prior to joining Masefield at Nimir 
Petroleum as Business Development  
and HSE Manager.
 
Stephen became Chief Executive of 
Nautical on 1 April 2005, having joined 
the Masefield Group in 2003 to be 
responsible for all upstream technical 
management prior to floating the 
Masefield assets through Nautical.
3. Hemant Thanawala
Finance Director 
Hemant is a Chartered Accountant  
with over 25 years’ professional and 
commercial experience, qualifying in 
1981 with KMG Thomson McLintock 
(now KPMG). Post qualification, he was 
in professional practice for 8 years before 
serving as Chief Financial Officer of 
Rostel Holdings Group for 9 years and 
Premier Telesports Group for 3 years.
 
Hemant became Finance Director  
of Nautical on 1 April 2005. Having 
joined the Masefield Group in 2001, 
Hemant holds directorships in several 
Group companies.
4. Paul Jennings
Commercial Director
Paul has over 25 years’ experience in  
the oil and gas sector spanning the  
roles of accountant, economist and 
commercial and business development 
director. He has worked with BP and 
acted as adviser to the Russian and 
Chinese Governments.
Paul became Commercial Director  
of Nautical on 1 April 2005. Paul  
joined the Masefield Group in  
2000, assuming responsibility for 
exploration and production finance  
and business development.
5. Philip Dimmock 
Non-Executive Director
Philip has over 30 years’ experience  
in the upstream oil and gas business, 
both in the UK and internationally and  
is currently chief operating officer of 
Equator Exploration Ltd. 
Philip 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.
6. 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 corporate leaders 
and high net worth individuals in the UK 
and overseas. He is CEO of PK Group, the 
London based financial services group 
and serves on the Boards of both public 
and private companies.
 
A Director since 30 May 2002, Patrick is 
Chairman of Nautical’s Audit Committee.
7. Audrey Clarke
Company Secretary
A fellow of the Institute of Chartered 
Secretaries with experience covering  
a wide range of corporate secretarial 
work with private, AIM and fully  
quoted companies. Nautical  
Petroleum plc 26
The directors present their report together with the Group and Company financial statements for the year ended 30 June 2008.
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 and is listed in London on AIM under the designation NPE.  
A 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 £4.52m (2007: £0.39m), including exploration write offs of £3.24m (2007: £nil) primarily for the 
unsuccessful Mermaid exploration well, a foreign exchange loss of £0.17m (2007: gain of £0.27m) and a £0.45m charge for share 
options (2007: £0.39m). The directors do not recommend the payment of a dividend.
Events since the balance sheet date
On 18 July 2008 the Company completed the farmout to Canamens of a 30% interest in its Selkie North Sea exploration asset.  
This had been agreed in principle in May 2008 dependent upon certain conditions, including approval by the Department of 
Business Enterprise and Regulatory Reform (DBERR). The farmout comprises a cash payment of $1.0m upon completion plus 
payment of 40% of the cost of the well drilled in May 2008, representing a carry of 10% of the costs.
On 20 September 2008 the Company completed the farmout to Canamens of an additional 10% interest in the Kraken 9/2b block, 
Canamens already having a 25% interest. Canamens will carry Nautical’s 35% share of the 2nd Kraken appraisal well subject to  
a minimum dry hole cost of $20.0m and a maximum well cost of $25.0m. There is a cash payment of $6.0m upon completion and  
a further payment of $5.0m upon approval of the Field Development Plan (FDP) by DBERR.
On 20 September 2008 the Company completed the farmout to Canamens of a 35% interest in the Hydra 3/27a block. The farmout 
comprises a cash payment of $1.5m upon completion plus the carry of 5% of the costs of the planned exploration well.
On 25 September 2008, the Company carried out a 1 for 20 share consolidation, following which the authorised share capital is 
100 million shares of 20p each (previously 2,000 million shares of 1p each) and the issued share capital is 63,408,291 shares of 20p 
each (previously 1,268,165,820 shares of 1p each). Using the post consolidation numbers, the loss per share of 0.37p would have 
been 7.44p.
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 2008 were:
Number of ordinary shares and options held:
 At 30 June 2008 At 30 June 2007
  
    Ordinary Share Ordinary  Share 
    shares options shares options 
    Number Number Number Number
I Williams (Chairman)    25,631,286 11,000,000 25,631,286 9,500,000
S Jenkins (Chief Executive)    17,521,929 16,500,000 17,521,929 13,500,000
H Thanawala (Finance Director)   15,873,043 9,000,000 15,773,043 8,000,000
P Jennings (Commercial Director)   17,521,929 11,500,000 17,521,929 9,500,000
P Dimmock (Non-Executive Director)   Nil 4,000,000 Nil 3,500,000
P Kennedy (Non-Executive Director)   1,500,000 4,000,000 1,500,000 3,500,000
The above directors have been directors throughout the year. 
The interests of I Williams are held through Tile House Limited, a Jersey registered company whose ultimate beneficiaries are 
members of I Williams’ family. The interests of H Thanawala are held through Foscote International Limited, a British Virgin 
Islands registered company whose ultimate beneficiaries are members of H Thanawala’s family. S Jenkins and P Jennings hold 
part of their shareholding with OMX Securities Nominees Limited.
Retirement of directors
P Kennedy retires in accordance with section 108 of the Company’s articles of association and offers himself for re-election.
Directors’ report Report and 
Accounts 2008 27
Directors’ 3rd party indemnity provisions
The Company maintains indemnity insurance for its directors and officers against liability in respect of proceedings brought  
by 3rd parties, subject to the terms and conditions of the Companies Act 1985.
Substantial shareholders
At 6 October 2008 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 Limited    3,697,072 5.83%
* Post 1 for 20 share consolidation.
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’s Nominated adviser and broker is KBC Peel Hunt Limited.
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 2008 amount to 69 days of purchases made 
in the year (2007: 39 days).
Financial instruments
The Group’s principal financial instruments comprise cash balances, balances with related parties, and other debtors or creditors 
that arise through the normal course of business as set out in note 17. The financial risk management objectives and policies are 
discussed in the Finance Director’s review and note 17.
Principal business risks
As a participant in the upstream oil & gas industry, Nautical encounters and has to manage several business risks of varying 
degrees. These include:
Loss of key employees.
Taxation – legislative changes.
Delays and cost over-run on major projects.
Lack of operational resources.
Poor reservoir performance.
Commercial misalignment with co-venturers.
Oil price movements and fluctuations in discounts for heavy oil.
Exploration and appraisal well failures.
These risks are considered typical for an upstream group of Nautical’s size and stage of development. The Board conducts  
an annual review of the Group’s system of risk management for the specific risks it faces.
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.
•
•
•
•
•
•
•
• Nautical  
Petroleum plc 28
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.
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 2 December 2008 as stated in the Notice of Meeting, which accompanies this 
Annual Report.
On behalf of the Board.
Steve Jenkins
Director
15 October 2008
Directors’ report continued Report and 
Accounts 2008 29
Remuneration report
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 2008 2007 
Name   £’000 £’000 £’000 £’000 £’000 £’000
S Jenkins   136 – 184 10 330 236
I Williams   – 151 – – 151 88
H Thanawala   – 111 – – 111 71
P Jennings   – 181 – – 181 107
P Dimmock   – 29 – – 29 12
P Kennedy   – 35 – – 35 12
Total  136 507 184 10 837 526
I Williams, H Thanawala and P Jennings provide services to the Company through a service agreement with International Energy 
Services Limited, which is a related party.
S Jenkins has entered into a loan agreement with the Company for £3,769 with an outstanding balance due to the Company at  
30 June 2008 of £1,570.
The pension is a defined contribution scheme.
Share options granted to directors
 Year to June 2008  Year to June 2007  
 Issued 18 January 2008 Issued 18 January 2007 
  
    Number Exercise price Number Exercise price 
    of shares per share of shares per share
I Williams    1,500,000 10.55p 1,500,000 8.85p
S Jenkins    3,000,000 10.55p 2,500,000 8.85p
H Thanawala    1,000,000 10.55p 1,000,000 8.85p
P Jennings    2,000,000 10.55p 1,500,000 8.85p
P Dimmock    500,000 10.55p 500,000 8.85p
P Kennedy    500,000 10.55p 500,000 8.85p
For the options granted in the year, 25% are exercisable after 17 July 2008, 25% after 17 January 2009, 25% after 17 July 2009  
and 25% after 17 January 2010. The options must be exercised by 18 January 2016. None of the directors exercised options during 
the year.
Philip Dimmock
Chairman of the Remuneration Committee
15 October 2008 Nautical  
Petroleum plc 30
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. The Board comprises 4 executive 
and 2 non-executive directors who are independent of management and do not participate in the Group’s bonus or pension 
schemes although both non-executive directors have share options and Mr P Kennedy is a shareholder. Mr Kennedy is also a 
partner in PK Partners LLP, which has provided consultancy services to the Group and the services of Mr C Gill, the Company 
Secretary until May 2008.
The roles of the Chairman and Chief Executive, both of which are executive, are separate, thus ensuring a division of 
responsibility at the head of the Group. 
The Chief Executive is employed under a service contract with the Company but the services of the other executive directors are 
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. Each of the non-executives 
could not attend 1 meeting during the year. There was full attendance at all other meetings throughout the year.
Audit Committee
The Audit Committee comprises the 2 non-executive directors and is chaired by P Kennedy. Executive directors may attend by 
invitation. The minutes of every meeting are taken by the Audit Committee Chairman 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 P Kennedy. The minutes of every meeting are 
taken by the Remuneration Committee Chairman 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.
Internal control
The Board is responsible for the effectiveness of the Group’s internal control 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 and can only provide reasonable and not absolute assurance against 
material misstatement or loss.
Corporate governance Report and 
Accounts 2008 31
Group financial statements
The directors are responsible for preparing the Annual 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.
The directors are required to prepare Group financial statements for each financial year, which present fairly the financial position 
of the Group and the financial performance and cash flows of the Group for that year. In preparing those 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 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 IFRS, subject to any material departures disclosed and explained in the  
financial statements.
The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the 
financial position of the Group and enable them to ensure that the Group financial statements comply with the Companies Act 
1985. 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 Nautical  
Petroleum plc 32
We have audited the Group financial statements of Nautical Petroleum plc for the year ended 30 June 2008 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 26. These Group financial statements have been prepared under  
the accounting policies set out therein.
We have reported separately on the parent company financial statements of Nautical Petroleum plc for the year ended 30 June 2008.
This report is made solely to the Company’s members, as a body, in accordance with Section 235 of the Companies Act 1985.  
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
The directors’ responsibilities for preparing the Annual Report and the Group financial statements in accordance with applicable 
United Kingdom law and International Financial Reporting Standards (IFRS) as adopted by the European Union are set out in the 
Statement of Directors’ Responsibilities.
Our responsibility is to audit the Group financial statements in accordance with relevant legal and regulatory requirements and 
International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the Group financial statements give a true and fair view and whether the Group 
financial statements have been properly prepared in accordance with the Companies Act 1985. We also report to you whether  
in our opinion the information given in the Directors’ report is consistent with the financial statements. The information in the 
Directors’ report includes that specific information presented in the Operating and Financial Review that is cross referenced  
from the Business Review section of the Directors’ report.
In addition we report to you if, in our opinion, we have not received all the information and explanations we require for our audit, 
or if information specified by law regarding director’s remuneration and other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited group financial 
statements. The other information comprises only the highlights, the Chairman’s statement, the explanation of heavy oil 
marketing, the Chief Executive’s review, the Operational review, the Finance Director’s review, the Board of Directors, 
Shareholder information, the Directors’ report, the Remuneration report, the Corporate governance statement, the Supplementary 
information and the Glossary. We consider the implications for our report if we become aware of any apparent misstatements or 
material inconsistencies with the Group financial statements. Our responsibilities do not extend to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the Group 
financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the 
preparation of the Group financial statements, and of whether the accounting policies are appropriate to the Group’s 
circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order 
to provide us with sufficient evidence to give reasonable assurance that the Group financial statements are free from material 
misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall 
adequacy of the presentation of information in the Group financial statements.
Opinion
In our opinion:
the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union,  
of the state of the Group’s affairs as at 30 June 2008 and of its loss for the year then ended; 
the Group financial statements have been properly prepared in accordance with the Companies Act 1985; and
the information given in the Directors’ report is consistent with the Group financial statements.
Ernst & Young LLP
Registered auditor
Aberdeen
15 October 2008
•
•
•
Independent auditors’ report to the members 
of Nautical Petroleum plc Report and 
Accounts 2008 33
      2008 2007 
     Notes £’000 £’000
Operating costs      (157) (161)
Gross loss      (157) (161)
Administrative expenses      (1,711)  (1,269)
      (1,868)  (1,430)
Exploration costs written off     (3,244) –
Operating loss     4 (5,112) (1,430)
Finance income     9 1,130 741
Finance costs     9 (538) (174)
Loss before tax      (4,520)  (863)
Tax     10 – 472
Loss for the year      (4,520)  (391)
Attributable to:
Equity holders of the Company     (4,505) (490)
Minority interests      (15) 99
      (4,520)  (391)
 Basic and diluted loss per share    11 (0.37) (0.05)
The results above were entirely derived from continuing operations.
Consolidated income statement 
For the year ended 30 June 2008 Nautical  
Petroleum plc 34
      At At 
      30 June 2008 30 June 2007 
     Notes £’000 £’000
Non-current assets
Intangible assets     12 56,400 49,768
Property, plant and equipment    12 2,446 2,588
      58,846 52,356
Current assets
Trade and other receivables     13 604 290
Short-term deposits     14 15,000 –
Cash and cash equivalents     14 5,118 8,943
      20,722 9,233
Total assets      79,568 61,589
Current liabilities     
Trade and other payables     15 (4,658) (1,386)
Non-current liabilities
Deferred tax     15 (6,431) (6,609)
Other payables     15 (3,024) (2,974)
      (9,455) (9,583)
Total liabilities      (14,113) (10,969)
Net assets      65,455 50,620
Equity attributable to equity holders
Called up share capital     18 11,588 9,683
Share premium      37,748 20,491
Other reserves     19 29,169 29,169
Cumulative translation reserve     (1,659) (1,330)
Accumulated losses      (11,391) (11,612)
Equity attributable to equity holders     65,455 46,401
Minority interests      – 4,219
Total equity      65,455 50,620
The financial statements were approved by the Board on 15 October 2008 and were signed on its behalf by:
I Williams H Thanawala
Chairman Finance Director
Consolidated balance sheet 
As at 30 June 2008 Report and 
Accounts 2008 35
    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 2006 9,627 20,116 29,169 (12) (11,513) 4,537 51,924
Currency translation 
 adjustments – – – (1,318) – (417) (1,735)
Total expenses recognised 
 directly in equity – – – (1,318) – (417) (1,735)
Loss for the year – – – – (490) 99 (391)
Total recognised income 
 and expense for the year – – – (1,318) (490) (318) (2,126)
Share-based payments – – – – 391 – 391
New shares issued 56 375 – – – – 431
At 30 June 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
Consolidated statement of changes in equity 
For the year ended 30 June 2008 Nautical  
Petroleum plc 36
      2008 2007 
     Notes £’000 £’000
Net cash outflow from operating activities    20 (1,684) (677) 
Cash flows from investing activities
Finance income      988 493
Expenditure on intangible assets     (7,222) (2,695)
Net cash flow from investing activities     (6,234) (2,202)
Cash flows from financing activities
Proceeds from issue of ordinary shares     19,162 –
Increase in amounts due to JV Partners     562 –
Repayment of loans      – (360)
Finance expense      (366) –
Increase in cash placed on short-term deposit   14 (15,000) –
Decrease in balances due to related undertakings    (265) (118)
Net cash flow from financing activities     4,093 (478)
Decrease in cash and cash equivalents     (3,825) (3,357)
Cash and cash equivalents at beginning of year    8,943 12,300
Cash and cash equivalents at end of year    14 5,118 8,943
Consolidated cash flow statement
For the year ended 30 June 2008 Report and 
Accounts 2008 37
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 2008 were authorised for issue by the Board 
of Directors on 15 October 2008 and the balance sheet was signed on the Board’s behalf by Ian Williams and Hemant Thanawala. 
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
The consolidated financial information presented has been prepared on a historical cost basis. The consolidated financial 
statements are presented in UK sterling (“£”), due to the nature of the Group’s activities and the fact that the Group is expected to 
transact more of its business in UK sterling than any other currency. All values are rounded to thousands of pounds except when 
otherwise indicated. 
These financial statements have been prepared in accordance with the requirements of IFRSs (International Financial Reporting 
Standards) and IFRIC (International Financial Reporting Interpretations Committee) interpretations which have been issued and 
effective, or issued and early adopted, as at the date of these statements. 
The preparation of financial statements in conformity with IFRS accounting principles requires the use of estimates and 
assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported 
amounts of expenses during the reporting year. Although these estimates are based on management’s best knowledge of the 
amount, event or actions, actual results ultimately may differ from those estimates. The Board has reviewed the accounting 
policies set out below and considers them to be the most 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 2008, 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 2.8.
The estimates determining the unwinding of the discount on long-term payables, 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 2.10. 
(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. To date the Group is in a pre-revenue generating phase. 
•
•
•
Notes to the financial statements Nautical  
Petroleum plc 38
2. Accounting policies for the Consolidated Financial Statements continued
(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 during the year 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.
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) Business combinations
The results of businesses acquired are consolidated from the effective date of acquisition, whereby upon the acquisition of a 
business, assets and liabilities are restated at fair value in accordance with IFRS.
(2.7) Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost of the business 
combination over the Group’s interest in the fair value of the identifiable assets, liabilities and contingent liabilities. Following 
initial recognition, goodwill is measured at cost less any accumulated impairment loss. Goodwill is reviewed annually, or more 
frequently, if events or changes in circumstances indicate that the carrying value may be impaired. 
(2.8) Intangible assets
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. 
(2.9) Development and Production assets
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. 
Notes to the financial statements
continued Report and 
Accounts 2008 39
Depreciation 
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.
Nautical currently does not have any D&P assets.
(2.10) 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. 
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 year 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. 
(2.11) 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. Nautical  
Petroleum plc 40
2. Accounting policies for the Consolidated Financial Statements continued
(2.12) Other financial assets
Financial assets are classified as either financial assets at fair value through the profit or loss, loans and receivables, held to 
maturity investments or available-for-sale financial assets, as appropriate. When financial assets are recognised initially, they  
are at fair value plus, in the case of investments not at fair value through the profit or loss, directly attributable transaction costs. 
The Group determines the classification of its financial assets after initial recognition and, where allowed and appropriate,  
re-evaluates this designation at each financial year end. 
Loans and receivables
Trade and other receivables and trade and other payables are initially recognised at fair value. Fair value is considered to be the 
original invoice amount, discounted where material, for short-term receivables and payables. Long-term receivables and payables 
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. Where amounts are denominated 
in a foreign currency, retranslation is made in accordance with the foreign currency accounting policy previously stated.
(2.13) Taxation
Current tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from,  
or paid to, the tax authorities. The tax rates and the tax laws used are those that are enacted, or substantively enacted, by the 
balance sheet date. 
Deferred tax
Deferred tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of 
assets and liabilities and their carrying amounts for financial reporting purposes. 
Deferred tax liabilities are recognised for all taxable temporary differences except:
(a) where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is 
not a business combination and, at the time of the transaction, affects neither the accounting profit or loss; and
(b) in respect of taxable temporary differences associated with investments in subsidiaries and associates 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. 
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and 
unused tax losses, to the extent that it is probable that taxable profits will be available against which the deductible temporary 
differences, and the carry-forward of unused tax credits and unused tax losses can be utilised except:
(a) where the deferred income tax asset relating to the deductible temporary differences arise from the initial recognition of an 
asset or liability; 
(b) in respect of deductible temporary differences associated with investments in subsidiaries and associates, deferred tax assets 
are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future; and
(c) deferred income tax assets are recognised only to the extent that it is probable that taxable profit will be available against 
which deductible temporary differences, carried forward tax credits or tax losses can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance sheet date and reduced to the extent that it is no 
longer probable that sufficient taxable profits will be available to allow all or part of the deferred income tax asset to be utilised. 
Unrecognisable deferred income tax assets are reassessed at each balance sheet date and are recognised to the extent that it has 
become probable that future taxable profits will allow the deferred tax asset to be recovered. 
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset  
is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the 
balance sheet date.
Income tax relating to items recognised directly in equity is recognised in equity and not 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. 
Notes to the financial statements
continued Report and 
Accounts 2008 41
(2.15) Share-based payments
Employees (including directors and senior executives) of the Group receive remuneration in the form of share-based payment 
transactions, whereby these individuals render services as consideration for equity instruments (“equity-settled transactions”). 
These individuals are granted share option rights as approved by the Board, which can only be settled in shares of the respective 
companies that award the equity-settled transactions. No cash settled awards have been made or are planned. 
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) 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.
(2.18) Interest bearing loans and borrowings
All loans and borrowings are initially recognised at fair value of the consideration received less directly attributable transaction 
costs. After initial recognition, interest bearing loans and borrowings, are subsequently measured at amortised cost using the 
effective interest rate method. Interest payable is accounted for on the accruals basis in the income statement using the effective 
interest rate method. No interest or borrowing costs have been capitalised. 
(2.19) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is 
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable 
estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the 
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to 
any provision is presented in the income statement net of any reimbursement. If the effect of the time value of money is material, 
provisions are discounted using a current pre-tax rate that reflects, where appropriate, the risks specific to the liability. Where 
discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. 
(2.20) 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.
(2.21) Impact of new standards and interpretations
In the current year, the Group has adopted IFRS 7 Financial Instruments: Disclosures, which is effective for annual reporting 
periods beginning on or after 1 January 2007, and the related amendment to IAS 1 Presentation of Financial Statements. The 
impact of the adoption of IFRS 7 and the changes to IAS 1 has been to expand the disclosures provided in these financial 
statements regarding the Group’s financial instruments and management of capital (see note 17). 
No other IFRS/IFRIC effective during the year have impacted on the results or disclosures of the Group.  Nautical  
Petroleum plc 42
2. Accounting policies for the Consolidated Financial Statements continued
(2.21) Impact of new standards and interpretations continued
Standards and interpretations not yet adopted:
International Accounting Standards (IAS/IFRS) Effective date 
IFRS 2 (Amendment) Share Based Payment – vesting conditions and cancellations 1 January 2009
IFRS 3 (Revised) Business Combinations 1 July 2009 
IFRS 8 Operating Segments 1 January 2009 
IAS 1 (Revised) Presentation of Financial Statements 1 January 2009 
IAS 23 (Revised) Borrowing Costs 1 January 2009 
IAS 27 (Amended) Consolidated and Separate Financial Statements 1 July 2009 
IAS 32 Financial Instruments: Presentation 1 January 2009 
IAS 39 (Amended) Financial Instrument Recognition and Measurement – re-eligible 1 July 2009
 hedged items
Amendment to IAS 27 and IFRS 1 re cost of an investment in a subsidiary, jointly controlled  1 January 2009 
 entity or associate
Amendment to IAS 32 and IAS 1 re puttable financial instruments and obligations arising 1 January 2009 
 on liquidation
International Financial Reporting Interpretations Committee (IFRIC) 
IFRIC 13 Customer Loyalty Programmes      1 July 2008
IFRIC 15  Agreements for the construction of Real Estate     1 January 2009
IFRIC 16 Hedges of a Net Investment in 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 when adopted or recognised from the accounting periods noted above. 
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 Group’s current business activities, the identification, aggregation and measurement of reportable segments 
under IFRS 8, would not result in any differences from the Group’s 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
No turnover has arisen to date.
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.
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.
       
      2008 2007 
Segment assets      £’000 £’000
United Kingdom      58,563 52,427
Europe      887 219
Assets held centrally      20,118 8,943
      79,568 61,589
      2008 2007 
Capital expenditure      £’000 £’000
United Kingdom      9,898 3,065
Europe      668 60
      10,566 3,125
•
•
•
•
•
Notes to the financial statements
continued Report and 
Accounts 2008 43
4. Operating loss
      2008 2007 
      £’000 £’000
Operating loss is stated after charging:
Exploration costs written off (see note 12)     3,244 –
Depreciation of property, plant and equipment    142 144
Foreign exchange losses/(gains)     171 (267)
5. Auditors’ remuneration
      2008 2007 
      £’000 £’000
Audit of the Group accounts      52 50
Audit of the Company’s accounts     6 6
      58  56
Other fees to auditors:
Audit of the Company’s subsidiaries pursuant to legislation    15 14
Other services pursuant to legislation     16 62
Taxation services      51 43
Corporate finance services – transaction costs    – 40
      82 159
6. Information regarding directors’ emoluments
Aggregate directors’ emoluments, which exclude pensions, are £827k (2007: £516k). The emoluments of the highest paid director 
were £320k (2007: £226k). In addition he received contributions to a defined contribution pension scheme of £10k (2007: £10k). 
Further information is included in the Remuneration report.
7. Employees
Headcount
      2008 2007 
      Number Number
Average number of employees of the Group (including executive directors) during the year was: 
Management      4 4
Technical staff/support/other     2 2
Three directors provide services to the Company through a service agreement with International Energy Services Limited, which 
is a related party.
Staff costs
      2008 2007 
      £’000 £’000
Wage and salaries      672 469
Bonuses      191 97
Social security costs      55 39
Other pension costs      16 17
      934 622
Equity settled share-based payments     450 391
      1,384 1,013
Wages and salaries include fees for three executive directors through a service agreement with International Energy  
Services Limited.
8. Pension commitments 
For direct employees of Nautical Petroleum plc, the Company contributes 7% of salary to a defined contribution pension scheme. 
£16k has been charged to the income statement for the year (2007: £17k). Nautical  
Petroleum plc 44
9. Interest and similar items 
      2008 2007 
Finance income      £’000 £’000
Bank interest      988 493
Other financial income      142 248
      1,130 741
      2008 2007 
Finance costs      £’000 £’000
Costs of borrowing facility      366 –
Unwinding of discounts on long-term payables    172 174
      538 174
10. Tax on loss on ordinary activities
      2008 2007 
Current and deferred taxation      £’000 £’000
Loss before tax      (4,520) (863)
Loss before tax at the standard UK corporation tax rate of 28% (2007: 30%)   (1,266) (259) 
Effects of:
Expenses and (income) not deductible for tax purposes     191 (34)
Changes in tax rates on deferred tax liability     – (472)
Ring fence expenditure supplement     (297) –
Depreciation in excess of capital allowances     914 –
Unrelieved tax losses and other deductions arising    458 293
Total tax credit on loss on ordinary activities     – (472)
Movement on the deferred tax liability representing changes in exchange rates is accounted for through reserves whilst the 
movement attributable to tax rate changes is reflected through the income statement. The Group has tax losses of approximately 
£3.5m (2007: £2.9m) arising in the UK that are available indefinitely against future taxable profits. The Group has depreciation in 
excess of capital allowances of £3.2m (2007: £nil). Deferred tax assets of approximately £1.9m at 28% (2007: £1.1m at 28%) have 
not been recognised as a result of existing uncertainties of their realisation. 
11. Loss per share
      2008 2007
Loss for the year attributable to equity holders (£’000)    (4,505) (490)
Basic weighted average number of shares in issue in the year (thousands)   1,211,806 1,075,450
Basic and diluted loss per ordinary share (pence)    (0.37) (0.05)
In addition at 30 June 2008 there were a total of 59.05 million options (2007: 49.75 million) and 26.3 million warrants (2007: 26.3 
million) in issue, which have not been included in the above calculations. On 25 September 2008 a 1 for 20 share consolidation 
took place. Applying this to the above numbers would have resulted in a loss per share of 7.44p in 2008 and 0.91p in 2007.
Notes to the financial statements
continued Report and 
Accounts 2008 45
12. Intangible assets and property, plant and equipment
Movements during the year were as follows:
    Intangible  Property, plant 
    assets and equipment 
    Exploration Extended  
    and evaluation well test  
    assets equipment Other Total 
Cost    £’000 £’000 £’000 £’000
At 1 July 2006    49,279 2,796 7 52,082
Additions    3,125 – – 3,125
Exchange adjustments    (2,636) – – (2,636)
At 30 June 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
Depletion and depreciation 
At 1 July 2006    – 70 1 71
Provided in year    – 140 4 144
At 30 June 2007    – 210 5 215
Provided in year    – 140 2 142
At 30 June 2008    – 350 7 357
Net book value
At 30 June 2008    56,400 2,446 – 58,846
At 30 June 2007    49,768 2,586 2 52,356
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 the Mermaid well) and to licences relinquished in 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 £9.0m as at June 2008 (2007: £8.3m). If the party declines to 
take up its option, the Company retains the 6.67% interest upon payment of £1.
Management has carried out an impairment review on the extended well test equipment in accordance with the policy set out in 
note 2.10 and have considered the following:
Due to the specialist nature of the equipment there has 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.
Management is currently in discussions over the sale of the equipment and are of the opinion that the carrying value 
represents the fair value of the equipment.
Management have therefore concluded that no impairment is necessary
13. Trade and other receivables
      30 June 2008  30 June 2007 
      £’000 £’000
Other debtors      481 160
Prepayments and accrued interest     123 130
      604 290
None of the above are impaired.
•
•
•
• Nautical  
Petroleum plc 46
14. Cash and short-term deposits
      30 June 2008  30 June 2007 
      £’000 £’000
Cash at bank and in hand      3,649 556
Deposits of 3 months or less      1,469 8,387
      5,118 8,943
Short-term deposits      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.
15. Trade and other payables
      30 June 2008  30 June 2007 
Current liabilities      £’000 £’000
Trade creditors      1,806 383 
Amounts owed to related companies     509 896
Accruals      2,343 107
      4,658 1,386
Amounts owed to related parties are due on demand and are treated as creditors and are analysed further below.
 
      2008 2007 
Amounts owed to related parties      £’000 £’000
At 1 July      896 1,079
Cash flow      (265) (118)
Acquisition      (193) –
Exchange adjustments      71 (65)
At 30 June      509 896
The acquisition of UAH Limited on 31 October 2007 (see note 26) resulted in an amount of £193k previously owed by the Group 
being eliminated on consolidation and is presented above as a non cash movement.
      Deferred Conditional 
      tax payments 
Non-current liabilities      £’000 £’000
At 1 July 2007      6,609 2,974
Exchange adjustments      (178) 20
Effect of change in estimates     – (142)
Unwinding of discount      – 172
At 30 June 2008      6,431 3,024
The deferred tax balance relates entirely to exploration assets which were acquired prior to the transition date for IFRS (1 January 
2005). Hence the income statement movement was booked to reserves on transition. Since the transaction relates to the assets in 
Nautical Petroleum AG (NPAG), it was based in US dollars and there are exchange fluctuations. These movements are recorded in 
the cumulative translation reserve. NPAG changed its functional currency to UK sterling on 31 October 2007, after which there 
are no further exchange adjustments.
The 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 Business, Environment and Regulatory Reform which is not expected before end of 2009; and (2) 
$2.8m due on first oil which is not expected before the end of 2011. 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.
16. 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. Any amounts drawn are repayable in full by 2 May 2009. 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 Bank of Scotland 
base rate plus a margin of 2.5%.
Notes to the financial statements
continued Report and 
Accounts 2008 47
17. Financial instruments
      30 June 2008 30 June 2007 
      Book value Book value 
      £’000 £’000
Financial assets
Cash and cash equivalents      5,118 8,943
Short-term deposits      15,000 –
Other debtors (note 13)      481 160
Financial liabilities
Trade and other payables – current     4,794 1,386
Trade and other payables – non-current     3,024 2,974
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 rates.
(1) Commodity price risk
The Group does not yet have revenue, so is not exposed to commodity price risk on its financial instruments.
(2) Foreign currency risk
The Group has transactional currency exposure whereby expenditure is incurred in currencies which are not the functional 
currency (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 16, which are in US dollars.  
The impact of a 10% change in the UK sterling/USD exchange rate would have caused ±£302k (2007: £297k) 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 the Bank of Scotland base rate.
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 has very 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 and short-term deposits, all of which were with Bank of Scotland 
at 30 June 2008. Subsequent to the year end some funds were transferred to BNP Paribas.
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. 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 15. 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. The Group’s policy is to utilise debt where possible. A credit facility has been arranged with Bank of Scotland in 
order to provide added flexibility (see note 16). As the Group begins to develop its fields, debt will be become more significant. Nautical  
Petroleum plc 48
18. Share capital 
 At 30 June 2008 At 30 June 2007
  
    Number £’000 Number £’000
Authorised
Ordinary shares of 1p each    2,000,000,000 20,000 1,600,000,000 16,000
Allotted, called up and fully paid
Ordinary shares of 1p each    77,500,000 100 77,500,000   100
Reverse acquisition capital adjustment   697,500,000 6,556 697,500,000 6,556
Ordinary shares of 1p each    493,165,810 4,932 302,689,619  3,027
    1,268,165,810 11,588 1,077,689,619  9,683
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.
The movement on issued shares is set out in the following table. All movements are for ordinary 1p shares.
       Number of 
     Date issued Issue price  shares issued
At 1 July 2006       1,072,129,880
Asset purchase    24 November 2006 7.75p 5,559,739
At 30 June 2007       1,077,689,619
Private equity placing     17 October 2007 10.50p 190,476,191
At 30 June 2008       1,268,165,810
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 387,755 new ordinary shares of 1p each. The acquisition is subject to approval 
from the Ministere de l’Economie des Finances et de l’Industrie, France, which has now been received. 
On 4 July 2005 the Group announced the issuance of 11,666,667 warrants to subscribe for new ordinary shares at 20p 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 40p per share for 90 consecutive trading days in the year to 3 July 2009.
On 3 January 2006 the Group announced the issuance of 14,637,800 warrants to subscribe for new ordinary shares at 20p 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 40p 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:
Share options to subscribe for 20 million ordinary shares were granted on 7 March 2005, exercisable at 4p per share on or before  
1 April 2008. 10 million were exercisable from 1 April 2006 and 10 million from 1 April 2007. On 20 November 2007, the terms  
of these options were changed to conform with the provisions of the Rules of the Nautical Petroleum PLC Share Option Scheme. 
Following the change the options are now exercisable on or before 7 March 2013. None of the options have been exercised.  
They are all held by directors as set out in the Directors’ report. 
Share options to subscribe for 20.5 million ordinary shares were granted on 26 September 2005, exercisable at 11p per share  
on or before 26 April 2010. 10.25 million were exercisable from 27 September 2006 and 10.25 million from 27 September 2007.  
On 20 November 2007, the terms of these options were changed to conform with the provisions of the Rules of the Nautical 
Petroleum PLC Share Option Scheme. Following the change the options are now exercisable on or before 26 September 2013. 
None of the options have been exercised. 20 million are held by directors as set out in the Directors’ report. 
Share options to subscribe for 1.0 million ordinary shares were granted on 23 September 2005 in association with the acquisition 
of the Alba Resources (Holdings) Group, exercisable at 12.5375p per share at any time on or before 23 September 2010. None of 
the options have been exercised. 
Notes to the financial statements
continued Report and 
Accounts 2008 49
Share options to subscribe for 8.25 million ordinary shares were granted on 18 January 2007, exercisable at 8.85p per share on or 
before 18 January 2015. 2,062,500 options are exercisable after 17 July 2007, 2,062,500 options are exercisable after 17 January 
2008, 2,062,500 options are exercisable after 17 July 2008 and 2,062,500 options are exercisable after 17 January 2009. None of 
the options have been exercised. 7.5 million are held by directors as set out in the Directors’ report. 
Share options to subscribe for 9.0 million ordinary shares were granted on 18 January 2008, exercisable at 10.55p per share on or 
before 18 January 2016. 2,250,000 options are exercisable after 17 July 2008, 2,250,000 options are exercisable after 18 January 
2009, 2,250,000 options are exercisable after 17 July 2009 and 2,250,000 options are exercisable after 17 January 2010. None of the 
options have been exercised. 8.5 million are held by directors as set out in the Directors’ report. 
Share options to subscribe for 0.3 million ordinary shares were granted on 15 April 2008, exercisable at 9.25p per share on or 
before 15 April 2016. 75,000 options are exercisable after 14 October 2008, 75,000 options are exercisable after 14 April 2009, 
75,000 options are exercisable after 14 October 2009 and 75,000 options are exercisable after 14 April 2010. None of the options 
have been exercised. 
The weighted average share price in the year was 9.71p (2007: 8.95p). The weighted average remaining contract life at 30 June 
2008 was 5.55 years (2007: 2.79 years). The weighted average fair value of options granted in the year was 4.24p (2007: 3.97p).  
The expense recognised for share-based payments in the year to 30 June 2008 was £450k (2007: £391k). 
The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options 
during the year.
    2008 2008 2007 2007 
     Number WAEP Number WAEP
Outstanding at beginning of year   49,750,000 7.86  41,500,000 7.66
Granted during the year    9,300,000 10.51  8,250,000 8.85
At 30 June    59,050,000 8.28  49,750,000 7.86
At 30 June 2008, 45.63 million options are exercisable (2007: 31.25 million).
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. 
      2008 2007
Dividend yield      – –
Expected share price volatility      54% 52%
Risk free interest rate      4.50% 5.46%
Leaver rate      5% 5%
Volatility has been based on a weighted average of Nautical’s and its peer group’s share prices. For those options whose terms 
were changed in the year, a revised calculation was performed. Volatility used was 53%, risk free rate used was 5.46% and leaver 
rate used was 5%. There was a charge to income and equity of £121k as a result of this revision. 
In addition to the above terms, the options expire 1 year after the person ceases being connected to Nautical either by way of 
direct employment or service contract, with the exception of the 1,000,000 options granted on 23 September 2005 in association 
with the acquisition of the Alba Resources (Holdings) Group.
19. 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 18.
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 change its functional currency from US dollars to UK sterling in 
October 2007, following which no further movements have been recorded. Nautical  
Petroleum plc 50
19. Reconciliation of movements in equity continued
Other reserves
Other reserves comprise the following:
      30 June 2008  30 June 2007 
      £’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 18 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.
20. Net cash flows from operating activities
      2008 2007 
      £’000 £’000
Loss for the year      (4,521) (391)
Finance income      (1,130) (741)
Finance costs      538 174
Taxation      – (472)
Exploration costs written off     3,244 –
Share-based payment charges     450 391
Depreciation      142 144
Foreign exchange movements     171 (267)
Operating cash flow before working capital movements    (1,106) (1,162)
(Increase)/decrease in trade and other receivables    (432) 443
(Decrease)/increase in trade and other payables    (146) 42
Net cash outflow from operating activities     (1,684) (677)
21. Analysis of net cash
   At  At    At 
   1 July 2006 Cash flow 1 July 2007 Cash flow 30 June 2008 
   £’000 £’000 £’000 £’000 £’000
Cash at bank and in hand   12,300 (3,357) 8,943 (3,825) 5,118
Short-term deposits   – – – 15,000 15,000
Net cash   12,300 (3,357) 8,943 11,175 20,118
22. Commitments
The Group has an obligation to drill a well on block 3/27a. All other licence commitments have been met. The Group has capital 
commitments of £nil (2007: £5.8m).
23. Related party transactions
(a) Key management personnel
The Group defines key management personnel as the directors of the Company. 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 provide services under a service agreement with International 
Energy Services Limited (IESL). The charges in the year were £443k (2007: £266k).
Notes to the financial statements
continued Report and 
Accounts 2008 51
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 £273k (2007: £257k), which 
was in addition to the services of the directors. At the year end an amount of £157k (2007: £302k) was due to IESL. In addition, at 
the year end there was £451k (2007: £401k) due to IEG.
Non-executive director P Kennedy is also a partner in PK Partners LLP which has provided to the Group consulting services and 
the services of C Gill, the Company Secretary until May 2008, for the amount of £7k (2007: £14k). 
On 31 October 2007 Nautical Holdings Limited acquired 100% of UAH Limited (see note 26).
24. Events since the balance sheet date
On 18 July 2008 the Company completed the farmout to Canamens Energy North Sea Limited (Canamens) of a 30% interest in its 
Selkie North Sea exploration asset. This had been agreed in principle in May 2008 dependent upon certain conditions, including 
approval by the Department of Business Enterprise and Regulatory Reform (DBERR). The farmout comprises a cash payment of 
$1.0m upon completion plus payment of 40% of the cost of the well drilled in May 2008, representing a carry of 10% of the costs.
On 20 September 2008 the Company completed the farmout to Canamens of an additional 10% interest in the Kraken 9/2b block, 
Canamens already having a 25% interest. Canamens will carry Nautical’s 35% share of the 2nd Kraken appraisal well subject to a 
minimum dry hole cost of $20.0m and a maximum well cost of $25.0m. There is a cash payment of $6.0m upon completion and a 
further payment of $5.0m upon approval of the Field Development Plan (FDP) by DBERR.
On 20 September 2008 the Company completed the farmout to Canamens of a 35% interest in the Hydra 3/27a block. The farmout 
comprises a cash payment of $1.5m upon completion plus the carry of 5% of the costs of the planned exploration well.
On 25 September 2008, the Company carried out a 1 for 20 share consolidation, following which the authorised share capital is 
100 million shares of 20p each (previously 2,000 million shares of 1p each) and the issued share capital is 63,408,291 shares of 20p 
each (previously 1,268,165,820). Using the post consolidation numbers, the loss per share of 0.37p would have been 7.44p.
25. Ultimate parent undertaking and controlling party
Following the private placing on 17 October 2007, the shareholding of International Energy Group AG (IEG), a company registered 
in Switzerland, fell from a 44.1% direct shareholding to 37.5%, at which point it ceased to be considered the ultimate controlling 
party. Following a share sale on 14 April 2008, the shareholding of IEG decreased a further 5% to 32.5%. The directors consider 
that no company has a controlling interest in Nautical.
26. Subsidiary undertakings
 Country of  
 incorporation/ 
Subsidiary registration Activity
Nautical Holdings Limited England Investment and oil equipment
UAH Limited* England Investment
Nautical Petroleum AG* Switzerland Exploration, development and production
Alba Resources (Holdings) Limited Scotland Investment
Alba Resources Limited* Scotland Exploration, development and production
Mountwest 560 Limited* Scotland Exploration, development and production
Mountwest 561 Limited* Scotland Exploration, development and production
Mountwest 562 Limited* Scotland Dormant
First Mariner Limited England Exploration, development and production
* Held by subsidiary undertakings
Nautical Petroleum AG carries out its activities through a UK Branch.
100% of UAH limited (UAH) was acquired by Nautical Holdings Limited (NHL) on 31 October 2007. UAH holds a 25% interest 
in Nautical Petroleum AG (NPAG) which holds interests in the 9/2b (Kraken) and 3/27a (Hydra) North Sea licences. The 
consideration for the transaction was £1. UAH had previously been 100% owned by International Energy Group AG (IEG). It has 
been treated as an asset acquisition, with the additional impact being that the Group no longer has any minority interests, as it 
has acquired the minority interest held by IEG in full. Following the transaction NPAG became a 100% Group company.
  Nautical  
Petroleum plc 52
Directors’ responsibilities for the parent company financial statements
The directors are responsible for preparing the Annual 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). The financial statements are required by law to give a true and fair view of 
the state of affairs of the Company for that year. In preparing those financial statements, the directors are required to:
select suitable accounting policies and then apply them consistently;
make judgements and 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; and
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 proper accounting records that disclose with reasonable accuracy at any time the 
financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 
1985. 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 2008 Report and 
Accounts 2008 53
We have audited the parent company financial statements of Nautical Petroleum plc for the year ended 30 June 2008 which 
comprise the Company Balance Sheet and the related notes 27 to 36. These parent company financial statements have been 
prepared under the accounting policies set out therein. 
We have reported separately on the Group financial statements of Nautical Petroleum plc for the year ended 30 June 2008.
This report is made solely to the company’s members, as a body, in accordance with Section 235 of the Companies Act 1985.  
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
The directors’ responsibilities for preparing the Annual Report and the parent company financial statements in accordance with 
applicable United Kingdom law and Accounting Standards (United Kingdom Generally Accepted Accounting Practice) are set out 
in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the parent company financial statements in accordance with relevant legal and regulatory 
requirements and International Standards on Auditing (UK and Ireland).
We report to you our opinion as to whether the parent Company financial statements give a true and fair view and whether  
the parent company financial statements have been properly prepared in accordance with the Companies Act 1985. We also 
report to you whether in our opinion the information given in the parent company directors’ report is consistent with the  
financial statements. 
In addition we report to you if, in our opinion, the Company has not kept proper accounting records, if we have not received all the 
information and explanations we require for our audit, or if information specified by law regarding directors’ remuneration and 
other transactions is not disclosed.
We read other information contained in the Annual Report and consider whether it is consistent with the audited parent 
company financial statements. The other information comprises only the Highlights, the Chairman’s statement, the explanation 
of heavy crude oil, the Chief Executive’s review, the Operational review, the Finance Director’s review, the Directors’ report,  
the Board of Directors, Shareholder information, the Remuneration report, the Corporate governance statement, the 
Supplementary information and the Glossary. We consider the implications for our report if we become aware of any apparent 
misstatements or material inconsistencies with the parent company financial statements. Our responsibilities do not extend  
to any other information.
Basis of audit opinion
We conducted our audit in accordance with International Standards on Auditing (UK and Ireland) issued by the Auditing 
Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the parent 
company financial statements. It also includes an assessment of the significant estimates and judgements made by the directors 
in the preparation of the parent company financial statements, and of whether the accounting policies are appropriate to the 
Company’s circumstances, consistently applied and adequately disclosed.
We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order 
to provide us with sufficient evidence to give reasonable assurance that the parent company financial statements are free from 
material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall 
adequacy of the presentation of information in the parent company financial statements.
Opinion
In our opinion:
the parent company financial statements give a true and fair view, in accordance with United Kingdom Generally Accepted 
Accounting Practice, of the state of the Company’s affairs as at 30 June 2008; 
the parent company financial statements have been properly prepared in accordance with the Companies Act 1985; and
the information given in the directors’ report is consistent with the parent company financial statements.
Ernst & Young LLP
Registered auditor
Aberdeen
15 October 2008
•
•
•
Independent auditors’ report to the members 
of Nautical Petroleum plc Nautical  
Petroleum plc 54
      2008 2007 
     Notes £’000 £’000
Fixed assets
Intangible assets     30 1,289 1,482
Tangible assets     31 – 2
Investments     32 11,884 11,884
Total fixed assets      13,173 13,368
Current assets
Trade debtors and other receivables    33 12,491 4,603
Cash at bank and in hand      20,096 8,921
Total current assets      32,587 13,524
Creditors: amounts falling due within 1 year    34 (2,207) (729)
Net current assets      30,380 12,795
Net assets      43,553 26,163
Capital and reserves     35
Called up share capital      12,682 10,777
Share premium      37,015 19,758
Warrant reserve      263 263
Profit and loss reserve      (6,407) (4,635)
Total shareholders’ funds      43,553 26,163
The financial statements were approved by the Board on 15 October 2008 and were signed on its behalf by:
I Williams H Thanawala
Chairman Finance Director
Company balance sheet 
As at 30 June 2008 Report and 
Accounts 2008 55
27. 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
(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. The 
resulting profits or losses are dealt with in the profit and loss account.
(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 Company applies section 131 of the Companies Act 
1985 and accounts for the transactions using merger relief. The share element of the transaction is recorded at the nominal value 
of the shares issued.
28. Losses attributable to Nautical Petroleum plc
The loss for the year dealt with in the accounts of Nautical Petroleum plc was £2,222k (2007: £1,086k). As provided by s230 of the 
Companies Act 1985, no profit and loss account is presented in respect of Nautical Petroleum plc.
Notes to the Company financial statements Nautical  
Petroleum plc 56
29. Employees
Headcount
      2008 2007 
      Number Number
Average number of employees of the Company (including executive directors) during the year was:
Management      4 4
Technical staff/support/other     2 2
3 directors provide services to the Company through a service agreement with International Energy Services Limited, which is a 
related party.
Staff costs
      2008 2007 
      £’000 £’000
Wage and salaries      672 466
Bonuses      191 97
Social Security costs      55 39
Other Pension costs      16 17
      934 619
Wages and salaries include fees for 3 executive directors through a service agreement with International Energy Services Limited.
      2008 2007 
      £’000 £’000
Equity settled share-based payments     450 391
30. Intangible assets
       Total 
Exploration and evaluation assets       £’000
At 1 July 2007       1,482
Additions       1,005
Exploration costs written off      (1,197)
At 30 June 2008       1,289
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.
31. Tangible assets
       Total 
Computer equipment       £’000
Cost:
At 1 July 2007       5
Additions       –
At 30 June 2008       5
Depreciation:
At 1 July 2007       3
Additions       2
At 30 June 2008       5
Net book value
At 30 June 2008       –
At 30 June 2007       2
Notes to the Company financial statements
continued Report and 
Accounts 2008 57
32. Investments
       Total 
Investments in subsidiary companies      £’000
Cost
At 1 July 2007 and at 30 June 2008      11,884
Details of subsidiary companies are shown in note 26. 
In accounting for the acquisitions of Nautical Holdings Limited, the Alba Resources (Holdings) Group and First Mariner Limited 
the Company has applied section 131 of the Companies Act 1985 and has accounted for the transactions using merger relief.
33. Trade debtors and other receivables
      2008 2007 
      £’000 £’000
Amounts owed by subsidiaries     11,888 4,270
Other debtors      480 202
Prepayments and accrued interest     123 131
      12,491 4,603
34. Creditors: amounts falling due to within 1 year
      2008 2007 
      £’000 £’000
Trade creditors      1,651 225
Amounts owed to related companies     213 397
Accruals      343 107
      2,207 729
35. Share capital and reserves
   Share  Share Warrant Profit and 
   capital premium reserve loss reserve Total equity 
   £’000 £’000 £’000 £’000 £’000
At 1 July 2007   10,777 19,758 263 (4,635) 26,163
Shares issued in the year    1,905 17,257 – – 19,162
Share option charges added back  – – – 450 450
Loss for the year   – – – (2,222) (2,222)
At 30 June 2008   12,682 37,015 263 (6,407) 43,553
Details of share capital and share-based payments are set out in note 18.
36. Related party transactions
Executive directors, I Williams, H Thanawala and P Jennings provide services under a service agreement with International 
Energy Services Limited (IESL). The charges in the year were £443k (2007: £266k).
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 £273k (2007: £257k), which 
was in addition to the services of the directors. At the year end an amount of £157k (2007: £302k) was due to IESL.
 
Non-executive director P Kennedy is also a partner in PK Partners LLP which has provided to the Group consulting services and 
the services of C Gill, the Company Secretary until May 2008, for the amount of £7k (2007: £14k). 
At the year end there was £113k (2007: £25k) due to IEG. Nautical  
Petroleum plc 58
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 a number 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 (Quad 9): the previous Operator has been replaced by StatoilHydro ASA, an established North Sea Operator with 
experience of heavy oil development in similar reservoirs. The results of StatoilHydro’s studies are quoted by the Company. 
These studies have ratified the previous Operator’s estimates of reserves for the Maureen formation, and have increased the 
estimated Contingent Resources for the Heimdal formation. 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 RPS has no reason to assume that these 
estimates are invalid.
Tudor Rose (14/30a): the 3D seismic data have been reprocessed resulting in a revised interpretation and an increase in 
estimated Contingent Resources.
Kraken (9/2b): an appraisal well has been drilled resulting in an increase in estimated Contingent Resources. 
The Company has also stated that it will not re-run economic evaluations of the properties despite the increase in commodity 
prices compared to last year. 
On this basis, we can repeat our opinion that the Company’s estimates of Proved plus Probable reserves and 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
1
.
We draw your attention to the following points, some of which are being repeated from previous years:
The recoverable volumes in the Mariner field (for the Maureen formation only) remain classified as Reserves based on past and 
current assurances that the field will be developed within a reasonable timeframe, which we take to be a maximum of five 
years from the date of evaluation, and that the arrival of a new Operator does not endanger this in any way. Significant delays 
to the submission of a development plan, or indeed other contingencies, would require these volumes to be re-classified as 
Contingent Resources.
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. 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.
2 October 2008
1 SPE/AAPG/WPC/SPEE Petroleum Resource Management System (2007).
•
•
•
•
•
•
• Report and 
Accounts 2008 59
Notes Nautical  
Petroleum plc 60
Notes nauticalpetroleum.com
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.
01	 Highlights	2008
02	 Chairman’s	statement
04	 Heavy	oil	marketing
06	 Chief	Executive’s	review
08	 Operational	review	–	 	 Our	portfolio
10	 Operational	review	–	 	 UK	continental	shelf
20	 Operational	review	–	France
22	 Finance	Director’s	review
24	 Board	of	Directors
26	 Directors’	report
29	 Remuneration	report
30	 Corporate	governance
31	 Directors’	responsibilities	for	the	 	 financial	statements
32	 Independent	auditors’	report
33	 Consolidated	income	statement
34	 Consolidated	balance	sheet
35	 Consolidated	statement	of	 	 changes	in	equity
36	 Consolidated	cash	flow	statement
37	 Notes	to	the	financial	statements
52	 Nautical	Petroleum	plc	Company	only	 accounts	2008
53	 Independent	auditors’	report
54	 Company	balance	sheet
55	 Notes	to	the	Company	 	 financial	statements
58	 Supplementary	information
IBC	Shareholder	information
IBC	Glossary
Shareholder information
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 Broker
KBC Peel Hunt
111	Old	Broad	Street
London
EC2N	1PH
+44	(0)20	7418	8900
Solicitors
CMS Cameron McKenna LLP
Mitre	House
160	Aldersgate	Street
London
EC1A	4DD
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
API	 American	Petroleum	Institute
®
bbl	 barrels
bcf	 billion	cubic	feet
bn	 billion
bopd	 barrels	of	oil	per	day
cp	 centipoises	 D	 Darcy
DBERR	 	Department	of	Business,	Environment	 	 and	Regulatory	Reform
DST drill	stem	test
EWT	 extended	well	test
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
Glossary Nautical Petroleum plc
Report and Accounts
2008
Nautical Petroleum plc
Parnell House
25 Wilton Road
London
SW1V 1YD
T: 020 7550 4890
F: 020 7550 4946
Nautical Petroleum plc Report and Accounts 2008
www.nauticalpetroleum.com