wwwnauticalpetroleumcom
nautical petroleum plc
annual report and accounts 2009
nautical petroleum annual report and accounts 2009
wwwnauticalpetroleumcom
nautical petroleum plc
 
parnell house
25 wilton road
london
sw1v 1yd
t 020 7550 4890
f 020 7550 4946 nautical petroleum plc  
is an independent 
hydrocarbon exploration 
and development company 
listed on the london aim 
the company’s mission  
is to acquire develop and 
add value to discovered 
heavy oil on the united 
kingdom continental 
shelf and europe
contents
business review
highlights 2009 01
the heavy oil market 02
chairman’s statement 04
chief executive’s review 06
operational review  
 our portfolio 08
 uk continental shelf 10
 france  18
finance director’s review 20
board of directors 22
governance 
directors’ report 24
remuneration report 27
corporate governance 28
directors’ responsibilities  
for the financial statements 30
independent auditors’ report 31
 
accounts
consolidated income statement 32
consolidated balance sheet 33
consolidated statement  
of changes in equity 34
consolidated cash flow statement 35
notes to the financial statements 36
nautical petroleum plc company  
only accounts 2009 51
independent auditors’ report 52
company balance sheet 53
notes to the company  
financial statements 54
supplementary information 57
shareholder information ibc
glossary  ibc
glossary
registered and corporate office
parnell house
25 wilton road
london
sw1v 1yd
44 020 7550 4890
44 020 7550 4946
wwwnauticalpetroleumcom
nominated adviser and joint broker
evolution securities limited
100 wood street
london ec2v 7an 
tel 44 0 20 7071 4317
joint broker
ambrian partners limited
old change house
128 queen victoria street
london ec4v 4bj
tel 44 020 7634 4700
solicitors
cms cameron mckenna llp
mitre house
160 aldersgate street
london
ec1a 4dd
shareholder information
api american petroleum institute
®
bbl barrels
bcf billion cubic feet
bn billion
bopd barrels of oil per day
cp centipoises 
d darcy
decc department of energy and climate change 
dst drill stem test
ewt extended well test
financial public relations
buchanan communications limited
45 moorfields
london
ec2y 9ae
registrars
capita registrars
the registry
34 beckenham road
beckenham
kent
br3 4tu
auditors 
ernst  young
blenheim house
fountainhall road
aberdeen
ab15 4dt
company secretary
audrey clarke fcis
parnell house
25 wilton road
london 
swiv 1yd
fdp field development plan
km kilometres
k thousand
m million
mmbo million barrels of oil
mwd measurement while drilling
owc oilwater contact
ukcs united kingdom continental shelf
fpso floating production storage and offtake
feed front end engineering and design nautical petroleum plc annual report and accounts 2009 01
operational highlights
3d and ocean bottom cable obc seismic surveys completed  
over mariner
site survey completed over mariner for production platform location
controlled source electromagetic survey csem performed over kraken
drilled appraisal well on kraken
awarded 8 new blocks in the north sea and a further 2 licence  
awards in france
34 increase in mariner net best estimate contingent resources  
development pending
financial highlights
strong cash position of £191m at 30 june 2009
debt free with £75m secured facility undrawn and fully available
completed farmouts on kraken hydra and selkie for £119m of cash and  
past cost contribution
£118m spent on portfolio development
cornerstone assets
field development submission in 2011 »
field development submission target end 2010 »
mariner
90
mmbo
net best estimate contingent resources 
development pending
kraken
29
mmbo
net best estimate contingent resources
40
mmbo
best estimate prospective resources
highlights 
2009 business review nautical petroleum plc 02
the heavy oil discount to brent has continued to narrow over the 
last year as heavy oil production declines in mexico and 
venezuela reducing supply to the us and north west europe 
markets
in addition there are a number of large scale refinery modifications 
in europe which are due to come on stream in 2010 and 2011 
these are aimed at absorbing heavier oil at a time when supply of 
these oils is declining
 
the uk production of heavy oil has been significant mainly from 
captain harding and alba but these fields are also in decline the 
most recent published figures indicate an annual drop of 20
the market for these uk heavy oils remains strong specifically 
from specialist refiners this is reflected in prices achieved for 
alba captain and harding both captain and harding have 
recently traded at a small premium to brent the specialist refiners 
in north west europe are now looking further afield for supplies 
some cargoes from australia are now finding homes here
the heavy 
oil market
with interests in kraken and mariner the location and specific  
oil qualities of these oils put us in a strong position to meet  
this demand
we at nautical petroleum recognise the challenges that heavy oil 
presents from both a technical and marketing aspect we 
understand the importance of early marketing and are working 
closely with the consumers to find solutions to maximise value for 
the company  annual report and accounts 2009 03
lincolnshire
leadon
harding
gryphon
captain
alba
ukcs heavy oil production
2003 2004
100000
200000
barrels per day
2005 2006 2007 2008 2009 2010 2011 2012
we understand the importance of early 
marketing and are working closely with 
consumers to find solutions to maximise 
value for the company nautical petroleum plc 04 business review
nautical petroleum is pleased to report  
to shareholders a further year of 
significant progress in the development  
of its asset portfolio 
john conlin
chairman
chairman’s 
statement
nautical petroleum is pleased to report to shareholders a further 
year of significant progress in the development of its asset portfolio 
this progress has however been tempered by a period driven 
primarily by the dramatic collapse in oil prices seen in the second 
half of 2008 and the onset of global recession our market 
capitalisation bottomed out at a value equivalent to our cash in 
hand where it remained for some six months plainly at oil prices 
of around 40 per barrel the market assigned no value to our 
portfolio of discovered hydrocarbons or our diverse exploration 
portfolio stimulated by the welcome fiscal boost from the 
chancellor’s april 2009 budget announcement of the new field 
allowance’s for heavy oil fields and subsequently by a recovery in 
oil price to levels above 70 the share price has stabilised to its 
current level 
while short term oil prices trends can be very uncertain there is 
reasonable consensus that over the medium to longterm 
timeframe prices will not drop below 70 per barrel for a sustained 
period while the probability of further growth remains 
importantly for our future heavy oil production streams the 
narrowing of the discount related to heavy oil is also a broadly 
accepted trend 
with this commodity pricing backdrop the potential value of 
nautical’s interests in the successful development of mariner and 
kraken is still very heavily discounted but we are confident that 
increasing value will be attached to these assets once the 
respective joint ventures move these field developments into the 
execution phase this therefore remains our top priority and key to 
this is the role of statoil on mariner 
mariner
statoil’s strong commitment to the mariner project highlighted 
recently in the media and during the recent visit of its ceo to the 
uk is greatly encouraging moreover their experience of 
developing heavy oil fields becomes increasingly visible in the 
diverse range of technical studies initiated by them to identify the 
optimal shape of a mariner development
as an example statoil has applied geophysical techniques proven in 
their successful grane heavy oil field by acquiring two further 
seismic surveys during the period these mark the first major 
operational activities on mariner since the extended well test in 
1997 both surveys have significantly improved our understanding of 
the maureen and heimdal reservoirs and we anticipate the improved 
imaging will be reflected in updated reservoir forecasting models 
early in 2010 all the signs are that the mariner development is 
economically robust and moving inexorably forward to project 
sanction and field development plan fdp submission in 2011 with 
first oil in 2015
one consequence of the projected first oil date of 2015 is the 
decision to reclassify the maureen hydrocarbons from reserves to 
contingent resources in line with industry best practice on 
resource definition based on updated estimates from the operator 
statoil combined gross contingent resources for the maureen and 
heimdal reservoirs combined are now 369mmbo gross 90mmbo 
net this compares to 274mmbo 67mmbo net carried in 2008 
kraken
nautical operates the kraken discovery with a 35 equity share 
and therefore dictates the pace of development it is also important 
to note that the oil viscosity in kraken is within the range of the 
captain field which currently produces at around 25000bopd and  annual report and accounts 2009 05
is targeting a recovery factor of over 50
while buoyed by the tremendous results of 92b2 the failure of a 
third well 92b3 drilled in septemberoctober 2008 albeit 
aggressively located to the northeast of the discovery wells to 
chase an upside resources scenario needed to be fully understood 
as a result a controlled source electromagnetic csem survey 
was commissioned to further define the extent of the reservoir 
enhanced seismic processing and regional studies are also in 
progress in combination with the csem results this study 
programme is focussed on the identification of the target for a 
further appraisal well to be drilled in the first half of 2010
 
as a result of the dry well 92b3 the gross contingent resource 
estimate for kraken has been reduced from 106mmbo 37mmbo 
net to the 83mmbo 29mmbo net contained in a core area to the 
north and south of the two successful wells encouragingly the 
new seismic data has identified significant exploration potential to 
the west of the core area 
development concept studies have meanwhile continued with the 
joint venture favouring a phased development solution it is 
anticipated that the results of the upcoming well can be quickly 
incorporated into our assessment and hence we believe that it 
remains realistic to target project sanction and fdp submission by 
the end of 2010
rest of the portfolio
whilst kraken and mariner have been our key areas of focus we 
continued to strengthen our position on the east shetland platform 
by adding a further six blocks to the portfolio in the 25
th
 licensing 
round we were also pleased to further consolidate our position in 
france with the award of two further licences
financial positioning 
since the inception of nautical in 2005 £38m has been raised of 
which £191m remained at year end nautical remains debt free 
and our £75m secured debt facility remains undrawn and fully 
available the impact of the global financial crisis on the cash 
positions of small and mid cap ep companies in particular 
suggests that our creative farmout deals of the recent past may be 
more challenging to replicate in the immediate future 
nevertheless we are confident that we have sufficient financial 
resources to meet the immediate needs of the business as we 
progress kraken and mariner towards development decisions
looking further ahead we continue to position the group to obtain 
the necessary financing to implement our heavy oil development 
strategy through the most effective combination of debt equity 
funding and other means in that regard the fact that a number of 
capital raisings have recently being achieved in the ep sector at 
moderate discounts is evidence of emerging confidence in the 
sector in parallel we continue to receive encouraging signals from 
advisers and the principal lending institutions of fertile ground for 
project financing particularly for those heavy oil projects put under 
the spotlight by hm government’s fiscal encouragement
capability
we continued with our model of outsourcing evaluation work 
during the period enabling us to keep our administration 
expenses to a minimum whilst maintaining access to a highly 
capable group of technical experts that this works so effectively 
is a tribute to the cohesion and versatility of the core executive 
team in particular the commercial creativity of the team is widely 
acknowledged and will serve nautical well in our efforts to 
capitalise on our portfolio of opportunities however looking 
forward to a sharpened focus on field development definition in 
mariner and kraken and the consequential major investment 
decisions it is our intention to complement the core inhouse team 
with a fulltime engineering manager
i would like to take this opportunity to thank ian williams who led 
nautical energetically as chairman through its formative years 
until his departure at the end of 2008 the board would also wish 
to express our appreciation for the supportive leadership of patrick 
kennedy who took on the role of acting chairman during the first 
half of 2009
moving forward in 2010 
the past 12 months has been turbulent for ep companies and 
whilst the overall economy remains fragile there are signs of 
confidence returning to the sector importantly for nautical there 
is some evidence albeit mixed as yet of a lower cost environment 
emerging and having successfully preserved our financial 
resources during this period of instability we are now better 
positioned to take advantage of this
our planned activity for next year anticipates a further appraisal 
well on kraken as we push towards the goal of project sanction 
and fdp submission by the end of 2010 in parallel we expect 
statoil to continue to progress toward concept selection on 
mariner and award of the contract for front end engineering and 
design feed whilst our key focus will remain on kraken and 
mariner we will continue to progress our exploration portfolio 
with the first material activity scheduled to be the drilling of the 
catcher prospect in q2 2010
john conlin
chairman
our planned activity for next year
anticipates a further appraisal well on
kraken as we push towards the goal of 
project sanction fdp submission by the 
end of 2010 in parallel we expect 
statoilto continue to progress toward 
concept selection on mariner and award 
of the contract for feed business review nautical petroleum plc 06
steve jenkins
chief executive officer
nautical is committed to progressing 
both mariner and kraken to fdp 
submission and adding value to the 
third leg of material appraisal and 
exploration opportunities
chief executive’s
review
nautical is pleased to report that against the backdrop of difficult 
economic conditions during the period significant progress has 
been made 
steady progress in challenging times
during the period nautical focused on the technical development 
and appraisal of our cornerstone assets by drilling a well and 
acquiring both test and controlled source electro magnetic csem 
surveys over kraken and participating in three seismic surveys 
over mariner 
exploration activity was somewhat muted restricted to an 
operated seismic survey over blocks 85 and 91 during the 
autumn a planned well on the hydra block encountered an 
extensive period of severe weather conditions which prevented  
the well spudding and resulted in the demobilisation of the rig  
the period also saw a drop of over 100 per barrel in the brent spot 
price before recovering to a more comfortable 70 per barrel well 
above the break even price for both the company’s main projects
costs have not fallen in line with the oil price especially on semi 
submersible day rates which remain around 250000 per day 
fortunately large jack up rigs rates have fallen to around 150000 
per day and can be utilised on most of nautical’s blocks it has 
become apparent that rig stacking is occurring as service 
companies seek to maintain day rates and insulate their exposure 
to the cost decreases seen elsewhere in the industry whilst 
unhelpful nautical believes competition will remedy this situation 
and we hope to see rig rates following the downward trends of 
other services
a good result from the chancellor
nautical’s share price tracked the fall in global equity markets 
with the aim market particularly impacted by the economic and 
financial crisis which gripped the industry in the period however 
the company received a welcome uplift in the april budget with 
the introduction of the new field allowance in which licence 
holders will be able to offset against the supplementary charge 
20 heavy oil related developments have been given a field 
allowance of £800m as a specific target this will enhance the 
value of all nautical’s heavy oil portfolio and specifically improve 
the profitability of the kraken and mariner developments nautical 
has been engaged with government since inception to secure this 
positive fiscal change as both an individual company and through 
the chairmanship of the oil and gas independents association 
the main voice of ukcs independents the company is pleased 
with this outcome and will continue to try to secure further 
incentives for both exploration and development activity
managing our portfolio through growth and judicious 
pruning
nautical is committed to progressing both mariner and kraken to 
fdp submission and adding value to the third leg of material 
appraisal and exploration opportunities which has benefited from 
the addition of a producing asset keddington including the 
awards in the 25th licensing round blocks secured post round 
and two further awards in france the augmented portfolio now 
consists of 25 blocks 18 licences of which 11 blocks 8 licences 
are operated by nautical however through active portfolio 
management this will be reduced through relinquishments of 
blocks with diminished prospectivity thus enabling resources to 
be directed towards the most promising blocks
  annual report and accounts 2009 07
we look forward to an increased level of 
operational activity in the coming year 
as we progress mariner and kraken 
further towards development decisions 
as well as seek further resources from 
our exploration portfolio through 
successful drilling 
mariner – less risk and increasingly robust
statoil uk ltd operator continues to share nautical’s enthusiasm 
and commitment to bring mariner to development activity levels 
remained high with the acquisition of three seismic surveys 
namely high resolution 3d seismic ocean bottom cable obc 
seismic and a platform site survey the combination of the 3d and 
obc a technique proven on the grane heavy oil field – norway 
was successful in imaging and defining the areal distribution of 
the heimdal sandstone reservoir and defining the top maureen 
sand reservoir increasing the hydrocarbon column additionally 
areas of maureen sand erosion proved to be more limited than on 
previous mapping these increased volumes have not been 
included in the quoted resources since modified reservoir 
simulations have yet to be run furthermore studies through the 
period which have revealed reduced platform drilling costs 
increased recovery rates decreased water cut using autonomous 
valves will also be incorporated in the simulation and we aim to 
report the anticipated increase in resources in 2010
the joint venture intends to pass through a major decision gate at 
the end of 2010 before submitting an fdp in 2011 followed by first 
oil in 2015
kraken – an operated substantial accumulation
a third well was drilled on the north east flank of the kraken 
hydrocarbon accumulation 33km ene of the successful 92b2 
well and 5km from the 921a discovery well the well was 
designed to intersect the oil water contact and investigate the 
upside p10 resources the reservoir heimdal sandstone proved 
to be absent however there are still substantial best estimate 
contingent resources 83mmbo gross 29mmbo net both around 
the successful wells and to the north and south exploration upside 
is evident to the west with best estimate prospective resources of 
114mmbo gross 40mmbo net
considerable technical efforts are focused on predicting the areal 
distribution of the reservoir over kraken both sedimentological 
and seismic studies will be integrated with csem survey results 
to locate an appraisal well to be drilled in 2010 prior to submitting 
an fdp before end 2010 we are strengthening our management 
team to fulfil our ambition for first oil in 2012
again nautical was successful in mitigating risk and reducing  
its financial exposure by farming out the 92b3 appraisal to  
both canamens energy and celtic oil limited resulting in a  
zero cost participation in the well and an additional cash bonus to 
be received on fdp approval 
exploration and appraisal opportunities – expansion in 
the ukcs and france
nautical continues to be a significant operator and an active joint 
venture partner although operational activity was below 2008 
levels with a seismic survey acquired over the scylla channel 
blocks 85 and 91 and the aborted spud of the hydra well in 
block 327a the scylla prospect proved to be too high risk and 
small consequently both blocks and the hydra the will be  
allowed to lapse or be relinquished on a more positive note  
the new operator of catcher blocks 289 and 2810b will  
drill a well in the first half of 2010 postponed due to oilexco 
entering administration
further interpretation of recently reprocessed seismic has 
confirmed the large merrow prospect at collyhurst permian level 
and identified further leads the joint venture is currently 
identifying onshore drilling locations
nautical strengthened its position on the east shetland platform with 
the award of six blocks four as operator and securing the merger of 
the previously relinquished portion of 92b with the retained area in 
the moray firth two additional blocks were secured post round to add 
to the award of block 1521g containing the exciting ‘spaniards’ 
prospect downdip from tested oil 
at the end of 2008 nautical purchased its first production 10 of the 
keddington field from egdon resources we see considerable upside in 
this field and aim to drill a sidetrack in late 2009 to boost production
our position in france has also been strengthened by two further 
awards pontenx and gex both permits offer heavy oil appraisal
development opportunities with added conventional oil upside in 
pontenx and potentially large oilgas traps in the jura basin gex 
these complement the existing development opportunity in st 
laurent grenadesuradour and the large gas prospect beneath 
the audignon ridge
we have made strong applications for heavy oil exploration blocks 
in europe and are negotiating on a potential heavy oil field 
reactivation being mindful of overstretching our treasury we will 
concentrate on evaluating discovered oil blocks in the upcoming 
ukcs 26th licensing round 
oil portfolio audit
rps energy audited our oil portfolio held at 30 june 2009 resources 
quoted in this report refer to the figures verified by this audit all 
contingent resources and prospective resources are best estimates
firm heavy oil demand coupled with a stable price
nautical agrees with the consensus that the oil price will remain 
stable and will rise as the world emerges more fully from recession 
and demand rises we see this price upswing being mirrored or 
being more acute for naphthenic crude as world sources are few 
and distant and the ukcs heavy oil production is in rapid decline 
the fall in development costs and the recently announced tax 
incentives combined with this price scenario make our 
development projects increasingly robust and attractive 
a more active future
we look forward to an increased level of operational activity in the 
coming year as we progress mariner and kraken further towards 
development decisions as well as seek further resources from our 
exploration portfolio through successful drilling your board will 
make every effort to gain equity markets appreciation of our 
potential resulting in a share price that fully reflects the 
company’s substantial net resources
steve jenkins
chief executive officer business review nautical petroleum plc 08
scotland
england
pontenx
gex
st laurent grenade
uk north sea
norway
orkney 
islands
shetland
islands
28
113
14 15
8
9
3
keddington field
north somercotes
11329c  11330
289  2810b
1430a
1521g
157 
1512a
96
97b
92b
327a
322
326
85  91
825a 
825b
911a 
911c
france
operational 
review
our portfolio annual report and accounts 2009 09
kraken block 92b
licence p1077 – 35 interest
a successful appraisal well was drilled in 2007 on the kraken  »
discovery a deeper oildownto odt was encountered and 
the oil is of a higher api with less viscosity then predicted 
a further appraisal well drilled septemberoctober 2008 was  »
dry  the well was plugged and abandoned
controlled source electro magnetic survey csem acquired in  »
june 2009
target to submit fdp before end 2010 »
contingent resources of 83mmbo gross 29mmbo net »
prospective resources of 114 mmbo gross 40 mmbo net »
mariner block 911a
licence p335 – 2667 interest
this highly appraised field has produced 662000 barrels of oil  »
on extended test at a maximum rate of 14991bopd 145 api 
from the maureen formation sands and has flowed up to 
1800bopd from the shallower heimdal reservoir
3d seismic and an ocean bottom cable obc survey acquired  »
mid 2008 have improved imaging of both heimdal and maureen 
reservoirs 
platform site survey acquired in summer 2009 »
no more drilling is required and fdp submission is planned   »
for 2011
best estimate contingent resources development pending of  »
369 mmbo gross 90 mmbo net
hydra block 327a
licence p1203 – 35 interest
well spud aborted due to poor weather in november 2008 »
 block will be relinquished »
scylla blocks 85 and 91
licence p1277 – 100 interest
prospect considered too small and too high risk blocks to be  »
relinquished
tudor rose block 1430a
licence p1463 – 20 interest
the block contains the tudor rose discovery »
interpretation of 208 square kilometres of 3d seismic has  »
yielded encouraging results and interpretation of amplitude 
verses offset avo volume is ongoing
engineering studies are underway on the 1430a2 discovery  »
well to determine the case for further drilling
contingent resources of 49mmbo gross and 10mmbo net »
catcher blocks 289 and 2810b
licence p1430 – 15 interest
the blocks contain several leads and prospects including the  »
catcher and catcher east prospects
catcher is to be drilled in 2010 »
prospective resources of 218mmbo gross 33mmbo net »
merrow blocks 11329c and 11330
licence p1475 – 50 interest
the blocks lie on the edge of the east irish sea basin »
interpretation of reprocessed seismic has confirmed the large  »
merrow prospect adjacent to walney island 
offshore prospect will be tested from onshore by a well in  »
20102011
mermaid block 911c 
licence p979 – 80 interest
possible southern extension of mariner accumulation in  »
heimdal sandstone 
remaining prospectivity will be determined by the work on the  »
adjacent mariner block with a possible field extension into 911c
blocks 825a and 825b
licence p976 – 50 interest
contains coelocanth and kelpie prospects »
evaluation of reprocessed seismic will establish future  »
prospectivity
blocks 322 and 326
licences p1573 and p1574 – 40 interest
new 2d high density high resolution data confirms lusca  »
prospect
em feasibility studies ongoing »
scylla south blocks 96 and 97
licences p1575 – 35 interest
new award continuation of scylla channel and possible kraken  »
analogue 
em feasibility studies ongoing »
spaniards block 1521g
licences p1655 – 30 interest
3d seismic to be obtained and reprocessed  »
large jurassic prospect down from 1521a38 oil discovery  »
blocks 157 and 1512a
licences p1652 – 33 interest
contains funnel and atco prospects  »
evaluation of reprocessed 3d and 2d seismic in progress  »
keddington
licence pedl005 10 interest
acquired interest in this uk onshore producing field in   »
january 2009 
st laurent france 
22 interest
located in aquitaine basin southwest france the grenade »
surardour well produced 8000 barrels in a series of tests 
following 2d seismic reprocessing on the large audignon  »
ridge subsalt gas prospect in the block we will seek to 
farmout prior to drilling a well
grenade has best estimate contingent resources of 42 mmbo  »
gross 09 mmbo net
pontenx france 
20 interest
located in the parentis basin southwest france »
the permit contains the abandoned mimizan nord field   »
which produced 35mmbls of 12 api oil and a number of high 
potential prospects
gex france 
20 interest
located in eastern france near the swiss border the official  »
award granted may 2009
previous drilling on the block encountered shallow oil »
additional prospectivity on large basement involved anticlines  »
at triassic level business review nautical petroleum plc 10
96 97b 98
93b
93a
92a
92b3
92b2
92b1a
327b
92b
327a
91
326
327b1
bressay
5 kilometres
1
2 4
6
kraken 
discovery
operational 
review
uk continental shelf
key stats
contains kraken oil discovery  »
large 3 way dip closed structure  »
15 api oil  »
92b2 confirmed substantial accumulation »
fdp submission target end 2010 »
kraken annual report and accounts 2009 11
block 92b licence p1077 
nautical 35 operator
nautical’s first awarded licence in the ukcs is located on the east 
shetland platform west of the north viking graben the kraken 
structure is a large 3 way dip closed high on which oil was 
discovered in the heimdal sandstone member of the tertiary 
palaeocene system by the 921a well drilled in 1985 and 
successfully appraised by the joint venture’s 92b2 commitment 
well in 2007 this appraisal well not only encountered oil bearing 
heimdal sandstone which correlates with the 92b1a well known 
as unit iii sands but also penetrated an additional thin lower oil 
bearing heimdal unit i sandstone
the results of 92b 2 proved an oil column of at least 77 metres 
and an oil down to odt 51 metres deeper than 92 1a a third 
appraisal well drilled in september 2008 was located in a down 
dip area to the northeast of the discovery wells in order to 
substantiate the oil column by intersecting the oil water contact 
and to investigate the upside p10 resources however in this 
outlying area the heimdal sandstone member proved to be 
absent which limits the northeastern upside and curtails the best 
estimate contingent resources to 83mmbo 29mmbo net in the 
core area and to the north and south of the 2 successful wells 
there are additional best estimate prospective resources of 
114mmbo 40mmbo net to the west of the fault above the odt in 
the 92b2 well
the reservoir quality in all sands is excellent exhibiting both high 
porosity and permeability gravity of the oil is 15° api and 
viscosity is around 110cp or less being a higher api and much less 
viscous than both bressay 10001500cp and bentley 2000cp 
and more similar to the producing captain field which is expected 
to exceed a 50 recovery and continues to produce at around 
25000 bopd
the fact that an oil water contact owc was not encountered in 
the 921a and 92b2 wells enhances the probability that the 
aquifer support will be through an edge water drive rather than a 
bottom water drive which allows improved control over water 
production and injection thus optimising oil production and 
ultimate recovery from the reservoir this is supported by 
geochemical analysis which indicates that although the oil is 
biodegraded it is not water washed implying the water leg is 
remote from the core of the structure
during 2009 controlled source electromagnetic csem surveying 
a relatively new geophysical technique to the north sea designed 
to distinguish high resistivity oil zones from their surroundings 
has been commissioned to further define the extent of the 
reservoir a single test line acquired in january has confirmed a 
high resistivity anomaly which is indicative of oil filled sands both 
to the north east and south of the discovery wells but not around 
the 92b3 well which is consistent with the sands being absent 
given these encouraging results a broader csem coverage of six 
lines was acquired in june aimed at delineating the oil filled sands 
over the structure further encouragement is evolving from the 
preliminary processing of these data 
enhanced seismic processing techniques such as special  
filtering and regional structural and sedimentological studies  
are in progress to more accurately predict sand distribution over 
kraken these studies along with detailed analysis of seismic 
amplitudes interpreted at shallower heimdal levels will be 
combined with the csem results and integrated with previous 
models to define the reservoir distribution and to establish a target 
for a further appraisal well nautical intends to drill this in the first 
half of 2010 prior to submitting a field development plan fdp to 
the department of energy and climate change decc by the  
end of 2010 the joint venture is currently favouring a phased 
development solution 
through judicious farmouts to both canamens as and celtic oil 
limited nautical has retained a substantial interest and 
operatorship of this large oil discovery the most recent 
farmdowns have resulted in nautical’s exposure to the 92b3 well 
being reduced to zero and the securing of an additional cash bonus 
on fdp approval
110cp 
or less viscosity similar to 
producing captain field
83mmbo 
gross best estimate 
contingent resources
114mmbo 
gross best estimate 
prospective resources business review nautical petroleum plc 12
3d  obc
survey area
911a
911c
911a10
911c13
3
4
east
mariner
8151
911b11
11z
mariner
5 kilometres
conoco
912b7
maureen
heimdal
9z
9
8
9x
10z
2
12
5
9y
7
8y
6
8z
1
key stats
large oil accumulations in the maureen   »
and heimdal
highly appraised with 16 wells »
63 day test produced 662000 barrels at  »
10000 bopd
145 api oil »
mariner
operational 
review
uk continental shelf annual report and accounts 2009 13
mariner block 911a licence p726
nautical 2667
operated by statoil hydro asa and located on the east shetland 
platform west of the viking graben the mariner oil accumulation 
discovered in 1981 and with 15 subsequent well penetrations is 
the largest most highly appraised undeveloped discovery in the 
ukcs these wells have tested oil at 1000 to 1595bopd from both 
the palaeocene maureen sandstone and the shallower heimdal 
sandstone both sands have excellent reservoir characteristics and 
during an extended well test ewt in 1997 a single horizontal well 
in the maureen sandstone produced 662000 barrels of oil over 63 
days at a maximum rate of 14991bopd 145 api
during the period the joint ventures’ resources were focused on 
characterising and defining the areal distribution of the shallower 
heimdal sandstone reservoir and enhancing our already detailed 
knowledge of the deeper maureen sandstone statoil have applied 
the proven geophysical techniques used in their successful grane 
heavy oil field by acquiring two further seismic surveys firstly in 
june 2008 a high resolution 3d seismic survey was acquired to 
enhance the interpretation of the maureen reservoir in august 
2008 statoil added a 3d ocean bottom cable obc survey over the 
core of the heimdal reservoir to record shear wave seismic data 
which is beneficial to the interpretation of the low impedance 
contrasts typical of the oil filled sands these mark the first 
operational activities over the discovery since the ewt
the new 3d seismic has been successful in defining the top of  
the maureen sand which now appears to be shallower than 
previously mapped in some areas which will increase the 
hydrocarbon column and volume as anticipated the obc data 
has imaged the main heimdal channels and other sand bodies 
higher in the sequence both the improved maureen and heimdal 
reservoir models will be input into reservoir simulations by end 
2009 production profiles for both reservoirs are expected to be 
generated in early 2010
since successfully passing through a major decision gate in 
october 2008 statoil has been identifying development options  
and will shortlist and propose the preferred development concept 
before the next major decision gate at the end of 2010 
following on from site surveys acquired in the summer of 2009 
over three considered production platform locations geotechnical 
and environmental studies will be conducted to aid platform 
design and development
considerable operator effort has been guided towards evaluation of 
polymer injection to improve oil recovery factor and simplifying well 
design to reduce costs furthermore the use of autonomous valves 
in the completion assemblies to control water influx has shown 
encouraging test results in addition blending tests to both decrease 
viscosity and increase marketability is yielding positive outcomes 
prior to the performance of the above work programme the operator 
reported best estimate contingent resources of 369mmbo gross 
90mmbo net for both the maureen and heimdal reservoirs 
mariner is a large economically robust development which will 
pass through the next decision gate at the end of 2010 before 
commencing front end engineering and design feed and 
completing an environmental impact assessment in 2011 this 
will lead to project sanction by the joint venture followed by fdp 
submission during 2011 and first oil in 2015 or earlier if maureen 
wells are predrilled
369mmbo 
gross best estimate contingent 
resources development pending
mariner is a large economically robust 
development which will pass through 
the next decision gate at the end of 2010 
before commencing front end 
engineering and design feed  business review nautical petroleum plc 14
1430b
1430c 1430a
1430b3
1526b5
1526b8
lead 3
cretaceous
lead 2
jurassic
5 kilometres
1429a4
2043
2056
tudor rose
discovery
1430a4
1430a1
1430a2
14252
14251
hannay
lead 1
jurassic
oil
gas
prospects
block 1430a licence p1463
nautical 20
located in the outer moray firth adjacent to ivanhoe rob roy and 
goldeneye fields this traditional licence contains 1 undeveloped 
discovery 1430a2 named tudor rose the well encountered a 24 
metre oil column beneath a 3 metre gas cap at around 1000 metres 
subsea within tertiary dornoch formation sands further 
prospects have been mapped on 3d seismic within the lower 
cretaceous kopervik sand and the jurassic sgiath sand
interpretation of 208 square kilometres of 3d seismic was completed 
in the period yielding encouraging results the western pinch out of 
the dornoch sands was confirmed and the area of the stratigraphic 
trap in two sand bodies one undrilled extended to the south 
gas anomalies 1 coincident with the gas in 1430a2 were 
mapped within the stratigraphic closure nautical attributes 
49mmbo of gross best estimate contingent resources to the tudor 
rose discovery pending further engineering studies and the 
interpretation of recently acquired amplitude versus offset avo 
seismic volume the joint venture will then decide if a new well is 
merited by early 2011
key stats
contains undeveloped tudor rose discovery  »
208 kilometres of 3d seismic interpreted  »
tudor rose
operational 
review
uk continental shelf
49mmbo
gross best estimate  
contingent resources annual report and accounts 2009 15
proposed
289a
cromarty sand play tertiary
tay sand play tertiary
fulmar sand play jurassic
lead 
p4
289 2810b
lead 
p1
lead
ju2
lead 
p3
lead 
p5
lead
ju1
lead 
e3
lead 
e1
lead 
e2
lead 
e4
lead 
p2
catcher
prospect
tertiary
5 kilometres
blocks 289 and 2810b licence p1430
nautical 15
this traditional 24th seaward licensing round block is located  
on the west central platform west of the central graben and 
the nearby guillemot field
the blocks are undrilled but contain numerous structural
stratigraphic leads and prospects at both eocene tay sandstone 
and two large jurassic leads traps are defined on recent 3d 
seismic which has been reprocessed and interpreted revealing 
several seismic anomalies the strongest and most convincing is 
over the catcher prospect in the palaeocene where a seismic 
amplitude anomaly class 2 avo indicates a thick sand sequence 
which is likely to be oil bearing a flatspot evident on the seismic 
which corresponds to closing contour within the prognosed  
thick clean sand of this prospect supports the opportunity  
for an oil accumulation
encore oil assumed operatorship due to the uncertainty created by 
oilexco being placed into administration subsequently premier 
purchased oilexco’s interest and have agreed to honour previous 
farmin arrangements which includes nautical’s 20 carry the 
operator will drill the catcher well in the first half of 2010 the site 
survey for the agreed well location having already been acquired
key stats
well planned to test the catcher prospect   »
in q2 2010 
3d seismic has defined traps  »
2 large jurassic leads  »
catcher
218mmbo
gross best estimate  
prospective resources business review nautical petroleum plc 16
ormskirk structure
collyhurst structure
merrow
prospect
sea 
serpent
ormonde 
south
ormonde 
north
northern
lead
clyde
11329a3
clyde
113282
clyde
113292
walney isl 6
kendals 17
sowerby
brit cellphane
davy streey 1
rampside 12
walney isl
2 2bg 34
walney isl 1bg
ultramar biggar 1
walney isl 3bg
walney isl 1
ramsden
dock
inst geo
roosecote 1
levonshire
dock 1
walkney isl 5
inst geo
gleaston
castle farm 1
kennedy 
bros
11329c 11330
5 kilometres
blocks 11329c and 11330 
licence p1475
nautical 50 operator
awarded as a traditional licence in the 24th seaward licensing 
round in 2007 the blocks are located in the east irish sea basin 
adjacent to walney island on the cumbrian coast there are 
numerous oil and gas shows in the offshore wells and hydrocarbon 
migration through these prospective blocks is proven by heavy oil 
columns and hydrocarbon shows in the onshore wells to the east
integration and interpretation of over 700 kilometres of reprocessed 
onshore transition zone and offshore seismic combined with 
gravity magnetics and outcrop data has confirmed the existence 
of the large merrow prospect at the permian collyhurst sandstone 
and a significant lead named sea serpent at the triassic ormskirk 
sandstone the collyhurst sandstone has tested gas elsewhere in 
the basin and is under production at the onshore elswick field 
merrow appears to be analogous to the basin margin lennox oil 
and gas field to the south the joint venture is currently identifying 
an onshore location from which to drill a directional well offshore 
to test the merrow prospect before 2011 
key stats
located in east irish sea basin »
700 kilometres onshore transition zone and  »
offshore seismic 
large merrow prospect at permian  »
collyhurst level
merrow
operational 
review
uk continental shelf
the joint venture is currently identifying 
an onshore location from which to drill a 
directional well offshore to test the 
merrow prospect before 2011  annual report and accounts 2009 17
lincolnshire
north
somercotes
prospect
k1z
k2y
k2
mablethorpe
louth
louth
louth east
keddington south
2 kms
saltﬂeetby
gas field
keddington oilﬁeld
538000me
390000mn
block 327a licence p1203
nautical 35 operator
nautical started to drill a well on the hydra prospect in november 
2008 unfortunately very poor weather prevented the well from 
spudding due to high standing costs that would have been 
incurred if the rig had been held until drilling could commence 
the joint venture demobilised the rig your company has been 
unsuccessful in obtaining a further extension to the licence to  
drill the well and intends to relinquish the block
hydra
blocks 85 and 91 licence p1277 
nautical 100 operator
over 700 kilometres of high resolution 2d seismic was acquired in 
september and october 2008 the results have been integrated with 
previous data to reveal a small high risk prospect at maureen sand 
level which does not merit the drilling of the contingent well nautical 
has been granted a waiver from the contingent well from decc which 
will allow the licence to lapse at the end of the initial term 
scylla
licence pedl005 
nautical 10
nautical petroleum through its wholly owned subsidiary alba 
resources limited acquired a 10 interest in onshore licence 
pedl005 remainder which contains the producing keddington 
oil field and north sommercates gas prospect both adjacent to the 
saltfleetby gas field nautical anticipates considerable upside in 
the keddington field and aims to boost production from the current 
50bopd 5bopd net by using the recently reprocessed 3d to spot a 
bottom hole location for a sidetrack off the keddington 2 well from 
in the event of a successful well production could increase to 
150200bopd 1520bopd net the well is planned for end 2009
keddington
nautical anticipates considerable upside in 
the keddington field and aims to boost 
production from the current 50bopd 5bopd 
net by using the recently reprocessed 3d 
to spot a bottom hole location for a 
sidetrack off the keddington 2 well business review nautical petroleum plc 18
grenade oil 
discovery
pecorade
oilﬁeld
albian gas
play
audignon
ridge
bg1
bg3
bg2
ec1 gaq2f
gaq1
gaq2
gaq1cc
bra201
nat1
nat2
lrb1
aud11
aud3
5
aud1
2
tiz1
aud8
aud10
mm1
mm2
bn1
mm1
lvg1
lu1
vm1
aud9
aud6
but1
lo1
air1
poc3
poc2
pecorade
oilﬁeld
poc2
poc4
ct101
cld201
aud4
scb201
scb1
cod1
srg1
gar2
gar1
gar3
10 kilometres
switzerland
geneva
gex
chatillon 1
la chandeliere 1
chaleyriat 1
bellegardesurvalserine
grande cret
charmont 1
savole 106
savole 109
musicges 1
mont 
vuache
subsaleve
humily 2
gex cd6
gex cd5
gex cd4
gexcd3
gex cd2
gex cd1
molasse
mont mourix
amont gex
humily 1
saleve 12
savole 108
annecy
savole 1045
amont 
chesny
molasse sst
jurassic carbonate
triassic sst
oil seeps
asphalt mine
20 kms
pontenx
atlantic 
ocean
pontenx
lucats
mimizan
village
pontenx
village
parentis
mothes
cabeil
bourrache
tennedou 1
cap de pin 1b
mezos 1 bias 1
mimizan 2 mimizan 1
mimizan plage 1
la jaougue 1
mn 
12 3
sainte eulalie 1
burlade
sainte
eulalie 1
mimizan
nord
la 
mancha 1
pontenx
village 1
pontenx 1
mimizan 
village 1
aureilhan 1
mimizan
nord 8 st paul en born 1
gambade 1
massion 1
pontenx 23
sainte trosse 1
dupouy 1
ploublanc 
ychoux 1
liposthey 1
ychoux 1
mouquet 1
lanusse 1
biscarrosse
parentis
ouest 1
quinch 1
piron 1
le terme 1
bourdieu 1
parentis
ouest 2
mothes
ouest 1
saugnacq 1
lue 1
courgeyre 1
marlenx 1
marlenx
cantaure 1
5 kilometres
operational 
review
france
pontex
gex france
st laurent permit
pontenx
gex
st laurent grenade
france
the st laurent permit contains several 
large hydrocarbon exploration plays  
and the undeveloped grenade heavy  
oil accumulation annual report and accounts 2009 19
st laurent key stats
grenade heavy oil accumulation with  »
42mmbo gross best estimate contingent 
resources
large subsalt gas prospect in the triassic  »
bunter sandstone under the audignon ridge 
with 3tcf gross best estimate prospective 
resources
st laurent permit nautical 22
the saint laurent permit in south west france contains several 
large hydrocarbon exploration plays and the undeveloped grenade 
heavy oil accumulation the discovery well grenadesuradour1 
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 8000 barrels of oil were recovered from 
intermittent tests the well being finally plugged and abandoned 
during a period of low oil prices in 1985
the grenade 3 appraisal well drilled in 2008 did not encounter 
hydrocarbons studies are focused on determining the extent of 
this accumulation and whether to sidetrack or abandon the gar3 
well best estimate gross oil in place is now estimated to be 88 
million barrels 09 million net recoverable
deeper in the geological section to the southwest the joint 
venture has reprocessed 2d seismic data and successfully 
delineated a large subsalt gas prospect in the triassic bunter 
sandstone under the audignon ridge the operator estimates best 
net prospective resources of 3tcf 660bcf net to nautical a 
farmin partner is being sought prior to drilling this high potential 
prospect the conseil de mines granted a renewal of the st 
laurent permit up to august 2013 
pontenx permit nautical 20
awarded in december 2008 the pontenx permit is located in 
southwest france on the southern margins of the parentis basin 
an oil productive region on the west coast of france and covers an 
area of 313 square kilometres this licence contains the abandoned 
mimizan nord heavy oil field and a number of other high potential 
prospects with good oil shows and tests 
the licence has a 4 year term and the initial 2 year programme will 
comprise the reprocessing and interpretation of the existing 
seismic data a review of the rejuvenation potential of the mimizan 
nord field and detailed geological studies
the mimizan nord field produced 35mmbls of 12 api oil from the 
aptoalbian cretaceous reefal limestone from 1960 to 1986 
various other wells on the blocks have yielded encouraging results 
with a number testing oil at rates up to 250bopd
gex permit nautical 20
the gex permit covers an area of 932 square kilometres and is 
located in eastern france near the swiss border 
the area is located in the alpine molassejura basin where  
active oil seeps bitumen mines and shallow drilling has proven  
an extensive zone of shallow 500 metres oil in the molasse 
sands and deeper drilling indicates a working hydrocarbon  
system with trapping potential the majority of wells on the  
block encountered oil
the initial focus on the deeper targets will be the large surface grand 
cret anticline which has closure at triassic level analysis of recently 
collected oil samples geological studies and the interpretation of 
the existing seismic should give increased definition of both the 
grand cret and the other illustrated anticlines
pontenx key stats
contains the abandoned mimizan nord heavy  »
oil field which produced 35 mmbls of 12 api oil
other high potential prospects »
existing seismic will be reprocessed and  »
interpreted
evaluate rejuvenation potential of mimizan  »
nord field
gex key stats
proven extensive zone of shallow 500  »
metres oil in the molasse sands
drilling has also proved a deeper working  »
hydrocarbon system with trapping potential business review nautical petroleum plc 20
in challenging times nautical has 
successfully maintained a strong cash 
position and remained debt free whilst 
continuing to progress our operational 
and predevelopment activity
will mathers
finance director
in challenging times nautical has successfully maintained a 
strong cash position and remained debt free whilst continuing to 
progress our operational and predevelopment activity
results
the group made a loss after taxation of £59m for the year 2008 
£45m this included exploration and evaluation expenses of 
£45m a £24m charge relating to the extended well test 
equipment and administration expenses of £16m offset by  
£05m in net foreign exchange gains finance income of £13m  
and a net taxation credit of £07m
exploration and evaluation expenses were primarily related to 
unsuccessful exploration costs on 327a hydra and 85  91 scylla
a concerted effort had been undertaken to utilise the extended 
well test equipment over the past two years however this has not 
been successful as a consequence the decision was made in 
december 2008 to impair the asset resulting in a £24m noncash 
charge to the income statement 
administration costs of £16m 2008 £15m continued to be 
managed tightly and included a noncash charge of £02m 2008 
£04m relating to share option charges
farmouts were completed on 92b kraken 327a hydra and 825 
selkie during the year with receipts in excess of the carrying  
value of assets disposed of resulting in a net gain of £05m the 
completion of the farmout of 92b kraken resulted in a partial write 
back of the provision for deferred taxation resulting in a deferred 
tax credit of £11m which was offset by a deferred tax charge  
of £04m
balance sheet
as at 30 june 2009 the group has net assets of £598 2008 
£655m dominated by capitalised exploration and evaluation 
assets of £489m 2008 £564m and cash and deposits of £191m 
2008 £201m the group continues to be debt free 
cash flow 
our cash management continued to be very strong during the year 
with £191m cash and deposits at year end £119m of cash and 
past cost contribution was received during the year from farmouts 
sufficient to fund the £115m that was spent during the year on the 
continued exploration and evaluation of our assets
our £75m secured debt facility with the bank of scotland was 
extended during the year to may 2012 and remains undrawn and 
available for working capital purposes 
finance director’s  
review  annual report and accounts 2009 21
against a background of low interest rates interest received on 
cash and deposits was £08m 2008 £10m equivalent to half of 
our overall administration spend 
at year end our cash and deposits were primarily deposited with 
the bank of scotland however subsequent to year end funds have 
also been placed with abbey scottish widows bank and anglo 
irish bank 
new field allowances
nautical welcomed the chancellor’s 2009 budget announcement of 
the introduction of new field allowance’s applying to small fields 
heavy oil fields and high temperaturehigh pressure fields 
under the existing north sea fiscal regime a conventional ukcs 
oil field is subject to taxation of 30 plus a supplementary charge 
of 20 equating to a 50 charge on taxable income as a 
consequence of the new field allowances announced heavy oil 
fields have been given a per field allowance of £800m which 
licence holders are able to utilise to offset the supplementary 
charge providing a tax benefit of up to £160m per field both 
kraken and mariner qualify for the heavy oil field allowance and 
we see this as a highly positive development to ensure continued 
investment in the north sea
outlook
nautical’s share price performance over the period reflects the 
reality that the company hasn’t been immune to recent economic 
conditions we will continue to manage our cash resources wisely 
and reserve spending only for those activities which we believe 
will lead to a material increase in shareholder value
the development of the group’s assets going forward will depend 
not only on technical success but also on the continued ability of 
the group to obtain financing through the availability of debt and 
equity funding and other means based on the year end cash 
position of £191m and the full availability of the £75m secured 
facility the group currently believes it has sufficient financial 
resources to meet the immediate needs of the business as we 
progress kraken and mariner towards development decisions
whilst the overall economy is fragile and the farmout market 
remains soft we are encouraged by the recent capital raising 
transactions in the ep sector which suggest both an 
improvement of the capital markets and a refocusing on the north 
sea sector this combined with the tax incentives for heavy oil a 
more competitive cost environment and a steadier oil price gives 
nautical significant cause for optimism
will mathers
finance director
as a consequence of the new field 
allowances announced heavy oil fields 
have been given a per field allowance of 
£800m which licence holders are able 
to utilise to offset the supplementary 
charge providing a tax benefit of up to 
£160m per field  business review nautical petroleum plc 22
board of directors
john conlin
nonexecutive director and chairman
john conlin was appointed as nonexecutive director and 
chairman of nautical petroleum plc in june 2009 john has over 34 
years experience in the oil and gas industry including 28 years 
with royal dutch shell he has held senior technical and 
management positions with shell in the uk denmark oman 
australia russia and saudi arabia in addition to corporate roles 
in the netherlands 
his executive experience includes the roles of president sakhalin 
energy investment company and general manager woodside 
petroleum he has also previously served as a nonexecutive 
director of hardman resources limited and delphian technology 
limited and as chairman of fuelture limited 
a petroleum engineer by profession john holds a bsc hons  
in chemical engineering from edinburgh university and  
has completed the harvard business school advanced 
management programme 
stephen jenkins 
chief executive officer
as part of a 27 year career in oil and gas steve spent the 11 years 
prior to nautical at nimir petroleum as business development  
and hse manager where he was responsible for acquisition 
strategy and technical dimensions of strategic planning he 
successfully led multidisciplinary teams to evaluate opportunities 
in the americas the middle east north africa and other  
oecd countries which led to the acquisition and subsequent 
turnaround of a venezuelan oil producing field 
steve also managed a drilling programme that resulted in the 
quadrupling of production in a field on sakhalin island in the 
russian federation and identified and secured a farmout with  
a major oil company for a substantial carry on a large oilfield in 
kazakhstan 
steve has an msc in petroleum geology and dic from imperial 
college of science and technology the university of london a  
bsc hons in geology from the queen’s university belfast and is  
a fellow of the geological society of london he is currently 
chairman of the oil  gas independents association ogia  
and a director of oil  gas uk
paul jennings
commercial director 
paul’s experience in the oil and gas sector exceeds 30 years and 
spans the roles of accountant economist and commercial and 
business development director 
paul worked with bp for 17 years with responsibility for projects 
in china russia mongolia mozambique and west africa after 
leaving bp paul established exploration and production companies 
in both russia and nigeria before jointly founding nautical 
petroleum with steve jenkins annual report and accounts 2009 23
will mathers
finance director
will is a chartered accountant qualifying with deloitte touche 
tohmatsu in australia and holding a bachelors degree from the 
university of western australia following 6 years in professional 
practice where he specialised in the energy and mining sectors 
will held financial roles with woodside petroleum limited 
working in both the usa and australia 
on relocation to the uk he worked for the royal dutchshell group 
in the position of global office controller for shell gas lpg in 
london prior to his appointment as cfo of nautical in october 
2008 will held the position of group financial controller for 
international energy group ag
patrick kennedy
nonexecutive director 
patrick is a chartered accountant with bachelors and masters 
degrees in economics and has over 20 years experience in 
business development and strategy working with high net worth 
individuals and corporate leaders in the uk and overseas he is 
ceo of the pk group the london based services group and serves 
on the boards of both private and public companies 
a director since 30 may 2002 patrick is chairman of nautical’s 
audit committee 
philip dimmock 
nonexecutive director 
philip has 30 years’ experience in the upstream oil and gas both in 
the uk and internationally and is currently chief operating officer 
of equator exploration ltd 
phillip spent a significant part of his career at bp in a wide variety 
of senior positions and at ranger oil where he held the post of  
vice president of the international division and served as 
chairman he has also been an executive officer of the uk 
offshore operators association
philip is chairman of nautical’s remuneration committee governance nautical petroleum plc 24
directors’ report
the directors present their report together with the group and company financial statements for the year ended 30 june 2009
business review and future activities
the principal activity of the company is heavy oil exploration development and production in the uk and europe the company is a 
public limited company incorporated in england and wales company number 4362104 and is listed in london on aim under the 
designation npe the company is required by the companies act to set out in this report a review of the business of the group during 
the year end 30 june 2009 and the position of the group at the end of year and uncertainties facing the group the information that fulfils 
these requirements including discussion of the business and future developments are set out in the chairman’s statement chief 
executive’s review operational review and the finance director’s review 
results and dividends
the group’s loss for the year was £589m 2008 £452m including exploration write offs of £406m 2008 £324m primarily for hydra and 
scylla an impairment charge of £238m 2008 £0m for the extended well test equipment interest income of £078m 2008 £099m a 
foreign exchange gain of £049m 2008 loss of £017m and a tax credit of £075million 2008 £0m the directors do not recommend the 
payment of a dividend
directors and their interests
the beneficial and other interests of the directors and their families in the shares of the company for the directors holding office at 30 
june 2009 were
number of ordinary shares and options held
   at 30 june 2009 at 30 june 2008
     ordinary share ordinary  share
     shares options shares options
     number number number number
s jenkins chief executive     876096 975000 876096 825000
p jennings commercial director     876096 700000 876096 575000
w mathers finance director     nil 100000 nil nil
j conlin nonexecutive chairman     nil 30000 nil nil
p dimmock nonexecutive director     nil 225000 nil 200000
p kennedy nonexecutive director     75000 225000 75000 200000
on 17 october 2008 i williams chairman and h thanawala finance director resigned and w mathers was appointed finance 
director on 24 june 2009 j conlin was appointed nonexecutive chairman the other directors have been directors throughout  
the year 
s jenkins and p jennings hold part of their shareholding with omx securities nominees limited
retirement of directors
p jennings retires in accordance with section 992 of the company’s articles of association and offers himself for reelection j conlin 
retires in accordance with section 1031 of the company’s articles of association and offers himself for election
directors’ third party indemnity provisions
the company maintains indemnity insurance for its directors and officers against liability in respect of proceedings brought by third 
parties subject to the terms and conditions of the companies act 2006
share capital
at the date of this report 63408291 ordinary shares are issued and fully paid on 25 september 2008 a 1 for 20 share consolidation  
took place annual report and accounts 2009 25
substantial shareholders
at 28 october 2009 the following had a disclosable interest in 3 or more of the nominal value of the ordinary share capital of 
the company
       number of 
       shares percentage
international energy group ag       19609425 3093
mhr advisors llc       5027686 793
shin cheon co limited       3814971 602
drawbridge global macro master fund       3697072 583
the company has not been notified of any other person who has an interest in 3 or more in the companies share capital
employees
the success of the business depends upon maintaining a highly qualified and wellmotivated workforce and every effort is made to 
achieve a common awareness of the financial and economic factors affecting the performance of the group nautical petroleum despite 
being a young company is committed to being an equal opportunity employer and plans to engage employees with broad backgrounds 
and skills 
nominated adviser and broker
the company has joint brokers evolution securities limited and ambrian partners evolution securities are also the company’s 
nominated adviser
supplier payment policy and practice
it is the group’s policy to settle the terms of payment with suppliers when agreeing the terms of the transaction to ensure that suppliers 
are aware of these terms and to abide by them trade creditors at 30 june 2009 amount to 14 days of purchases made in the year 2008 
69 days
donations
during the year the group made charitable donations of £1050 2008 £250 and no political contributions 2008 £nil
financial instruments
the group’s principal financial instruments comprise cash balances short term and long term deposits and debtors or creditors that 
arise through the normal course of business as set out in note 20 the financial risk management objectives and policies are discussed  
in note 20
key performance indicators
the board reviews the key performance indicators of the business and the company’s progress towards achieving its objectives on a 
quarterly basis these kpi’s include items such as the cash position net assets reportable incidents drilling results and reserves
principal business risks
the directors are responsible for the effectiveness of the group’s risk management activities and internal control processes as a participant in the 
upstream oil  gas industry nautical is exposed to a wide range of risks in the conduct of its operations these risks include
financial risks
cost inflation »
oil price movements and fluctuation in discounts for heavy oil »
adverse taxation legislative changes »
coventurer and third party counterparty credit risk »
operational risks
loss of key employees »
delay and cost overrun on projects including weather related delay »
hse incidents »
poor reservoir performance »
exploration and appraisal well failures »
strategic and external risks
weak capital markets inhibiting efficient capital raising »
commercial misalignment with coventurers »
oil price volatility » governance nautical petroleum plc 26
the risks set out above are not exhaustive and additional risks and uncertainties may arise or become material in the future any of the 
risks as well as other risks and uncertainties discussed in this document could have a material adverse effect on our business there is 
no absolute assurance that the group’s exploration and development activities will be successful the group seeks to manage these risks 
through its portfolio management balancing risk across a range of prospects and leads carrying varying technical and commercial risks 
and carefully managing the financial exposure to each through the arrangements set out with joint venture partners 
going concern
following the board’s review of the group’s financial position and forward cash forecasts the directors are of the view that the group has 
adequate financial resources to continue its operational activities and meet its liabilities as and when they fall due for the foreseeable 
future and for a period of at least 12 months from the date of authorisation of these financial statements for this reason the financial 
statements are prepared on a going concern basis 
board committees
information on the audit committee and the remuneration committee is included in the corporate governance section of the annual 
report the report of the remuneration committee will be the subject of an ordinary resolution at the annual general meeting
 
disclosure of information to the auditors
having made enquiries of fellow directors and of the company’s auditors each of the directors confirms that to the best of each 
director’s knowledge and belief there is no information relevant to the preparation of their report of which the company’s auditors are 
unaware and each director has taken all the steps a director might reasonably be expected to have taken to be aware of the relevant 
audit information and to establish that the company’s auditors are aware of that information this confirmation is given and should be 
interpreted in accordance with the provisions of s418 of the companies act 2006
auditors
a resolution to reappoint ernst  young llp as auditors will be proposed at the forthcoming annual general meeting at a fee to be 
agreed in due course by the audit committee and the directors
annual general meeting
the annual general meeting will be held on 16 december 2009 as stated in the notice of meeting which accompanies this  
annual report
on behalf of the board
stephen jenkins
director
6 november 2009
directors’ report continued annual report and accounts 2009 27
directors’ emoluments
the remuneration committee of the board of directors is responsible for determining and reviewing compensation arrangements for  
all executive directors the remuneration committee assesses the appropriateness of the nature and amount of emoluments of such 
officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum 
stakeholder benefit from the retention of a high quality board and executive team
to assist in achieving these objectives the remuneration committee links the nature and amount of executive directors’ and officers’ 
emoluments to the company’s financial and operational performance 
details of the nature and amount of each element of the emoluments of each director of the company for the previous 12 months are  
as follows
       total total
   salary fees bonus pension 2009 2008
name    £’000 £’000 £’000 £’000 £’000 £’000
s jenkins    191 – 140 13 344 330
p jennings    81 33 76 6 196 181
w mathers    81 – 19 6 106 –
i williams    – 46 – – 46 151
h thanawala    – 16 – – 16 111
j conlin    – 1 – – 1 –
p dimmock    – 28 – – 28 29
p kennedy    – 41 – – 41 35
total   353 165 235 25 778 837
i williams h thanawala and p jennings provided services to the company through a service agreement with international energy 
services limited which is a related party in november 2008 p jennings became an employee of nautical the fees for ian williams 
include a payment of £30k which is subject to approval at the agm in accordance with resolution 8
s jenkins has entered into a loan agreement with the company for £3948 with an outstanding balance due to the company at 30 june 
2009 of £1645 2008 £1570
the pension is a defined contribution scheme
share options granted to directors
     year to june 2008
   year to june 2009 issued 18 january 2008
      exercise  exercise
    date number price number price
    issued of shares per share of shares per share
s jenkins   12 january 2009 150000 2675p 125000 211p
p jennings   12 january 2009 125000 2675p 75000 211p
w mathers appointed 17 october 2008   13 november 2008 100000 3617p nil –
i williams retired 17 october 2008   – – – 75000 211p
h thanawala retired 17 october 2008   – – – 50000 211p
j conlin appointed 24 june 2009   24 june 2009 30000 5710p nil –
p dimmock   12 january 2009 25000 2675p 25000 211p
p kennedy   12 january 2009 25000 2675p 25000 211p
the options were all granted under the nautical share option scheme rules whereby from the date of issue 25 are exercisable after 6 
months 25 after 12 months 25 after 18 months and 25 after 24 months the options must be exercised within 8 years of issue none 
of the directors exercised options during the year i williams and h thanawala resigned on 17 october 2008 and therefore had until 17 
october 2009 to exercise any exercisable options none were exercised
philip dimmock
chairman of the remuneration committee
6 november 2009
remuneration report governance nautical petroleum plc 28
as the company is listed on the alternative investment market aim of the london stock exchange it is not required to comply with 
the provisions of the combined code however the board is committed to the high standards of good corporate governance embodied in 
the combined code on corporate governance and seeks to apply the principles of the combined code where practicable for a company 
of nautical’s size and complexity
board of directors
the board is responsible for the direction and overall performance of the group with emphasis on policy and strategy financial results 
and major operational issues 
the code recommends that smaller companies should have at least 2 nonexecutive directors following changes in the year the board 
now comprises 3 executive and 3 nonexecutive directors one of which is the chairman who are independent of management and do 
not participate in the group’s bonus or pension schemes although the nonexecutive directors have share options and mr p kennedy is  
a shareholder
the roles of the chairman and chief executive are separate thus ensuring a division of responsibility at the head of the group 
the current executive directors are all employed under service contracts with the company the services of i williams and h thanawala 
until 17 october 2008 and p jennings until 31 october 2008 were secured through a contract for services with international energy 
services limited a related party 
all directors are subject to reelection by shareholders every 3 years and on appointment at the first annual general meeting after 
appointment appropriate directors and officers’ liability insurance has been arranged by the company
meetings of the board of directors
the board meets at least 4 times a year after all relevant information has been circulated in good time to discuss a formal scheduled 
agenda covering key areas of the group’s affairs including operational and financial performance and quarterly management accounts 
all members of the board are expected to attend board meetings which are scheduled in advance there was full attendance at all 
meetings throughout the year
audit committee
the audit committee is chaired by p kennedy and its other member is j conlin executive directors may attend by invitation the 
minutes of every meeting are taken by the company secretary and circulated to the board at the next board meeting at which the 
chairman provides a verbal report of meetings of the committee
the audit committee which meets at least twice a year is responsible for keeping under review the scope and results of the audit its 
cost effectiveness and the independence and objectivity of the auditors it also has oversight responsibility for public reporting and the 
company’s internal controls 
remuneration committee
the remuneration committee is chaired by p dimmock and its other member is j conlin the minutes of every meeting are taken by the 
company secretary and circulated to the board at the next board meeting at which the chairman provides a verbal report of meetings of 
the committee
the remuneration committee which meets at least twice a year is responsible for considering the remuneration packages for executive 
directors and the bonus and share option strategy for the group and making recommendations as appropriate
the remuneration committee is also responsible for reviewing the performance of the executive directors and ensuring that they are 
fairly and responsibly rewarded for their individual contributions to the group’s overall performance the committee’s scope extends to 
all remuneration of directors including bonus and share options
none of the committee has any daytoday involvement in running the company and no director participates in discussions about his 
own remuneration
nominations committee
a nominations committee was established prior to the appointment of mr j conlin as nonexecutive chairman and currently comprises 
s jenkins p dimmock and p kennedy it reviews and recommends to the board the appointment of directors and is charged with 
ensuring the necessary balance of skills knowledge and experience is maintained and represented on the board the nominations 
committee considers that the current composition of the board is satisfactory to provide the appropriate governance administration and 
business counsel in respect of the company’s affairs
corporate governance annual report and accounts 2009 29
relations with shareholders
communication with shareholders is given high priority extensive information about the group’s activities is provided in the annual 
reports and accounts and the interim report which is sent to all shareholders there is regular dialogue with institutional investors as 
well as presentations to analysts to the time of the release of the annual and interim results the company maintains a website www
nauticalpetroleumcom for the purpose of improving information flow to shareholders as well as potential investors the website 
contains all press announcements and financial reports as well as extensive operational information about the group’s activities and 
enquiries from individual shareholders on matters relating to their shareholdings and the business of the group are welcomed the board 
encourages shareholders to attend the annual general meeting at which members of the board are available to answer questions 
internal controls
the board is responsible for the effectiveness of the group’s internal controls and is supplied with information to enable it to discharge its 
duties internal control systems are designed to meet the particular needs of the group and to manage rather than eliminate the risk of 
failure to meet business objectives the internal controls cover financial operational and compliance matters and are reviewed on an 
ongoing basis the group’s internal controls can only provide reasonable and not absolute assurance against material misstatement or 
loss or the risk of failure to meet business objectives governance nautical petroleum plc 30
group financial statements
the directors are responsible for preparing the directors report and the group financial statements in accordance with applicable united 
kingdom law and those international financial reporting standards ifrs as adopted by the european union
under company law the directors must not approve the group financial statements unless they are satisfied that they present fairly the 
financial position of the group and the financial performance and cash flows of the group for that period in preparing these financial 
statements the directors are required to
select suitable accounting policies in accordance with ias 8 accounting policies changes in accounting estimates and errors and  »
then apply them consistently
present information including accounting policies in a manner that provides relevant reliable comparable and understandable  »
information
provide additional disclosures when compliance with the specific requirements in ifrss is insufficient to enable users to understand  »
the impact of particular transactions other events and conditions on the group’s financial position and financial performance and
state that the group has complied with ifrss subject to any material departures disclosed and explained in the financial statements »
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain the group’s transactions 
and disclose with reasonable accuracy at any time the financial position of the group and enable them to ensure that the financial 
statements comply with the companies act 2006 they are also responsible for safeguarding the assets of the group and hence for 
taking reasonable steps for the prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s 
website legislation in the united kingdom governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions
directors’ responsibilities for the financial statements annual report and accounts 2009 31
we have audited the group financial statements of nautical petroleum plc for the year ended 30 june 2009 which comprise the 
consolidated income statement the consolidated balance sheet the consolidated statement of changes in equity and the consolidated 
cash flow statement and the related notes 1 to 28 the financial reporting framework that has been applied in their preparation is 
applicable law and international financial reporting standards ifrss as adopted by the european union
this report is made solely to the company’s members as a body in accordance with sections 495 and 496 of the companies act 2006 
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 
an auditors’ report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone 
other than the company and the company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities statement set out of page 30 the directors are responsible for the preparation of 
the group financial statements and for being satisfied that they give a true and fair view our responsibility is to audit the group financial 
statements in accordance with applicable law and international standards on auditing uk and ireland those standards require us to 
comply with the auditing practice board’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to the group’s circumstances and have been consistently applied and 
adequately disclosed the reasonableness of significant accounting estimates made by the directors and the overall presentation of the 
financial statements
opinion on financial statements
in our opinion the group financial statements
give a true and fair view of the state of the group’s affairs as at 30 june 2009 and of its loss for the year then ended »
have been properly prepared in accordance with ifrss as adopted by the european union and »
have been prepared in accordance with the requirements of the companies act 2006 »
opinion on other matter prescribed by the companies act 2006
in our opinion the information given in the directors’ report for the financial year for which the group financial statements are prepared is 
consistent with the group financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in our 
opinion
certain disclosures of directors’ remuneration specified by law are not made or »
we have not received all the information and explanations we require for our audit »
other matter
we have reported separately on the parent company financial statements of nautical petroleum plc for the year ended 30 june 2009
kevin weston senior statutory auditor
for and on behalf of ernst young llp statutory auditor
aberdeen
6 november 2009
independent auditors’ report 
to the members of nautical petroleum plc accounts nautical petroleum plc 32
consolidated income statement 
for the year ended 30 june 2009
       2009 2008
      notes £’000 £’000
revenue      3 25 –
cost of sales       28 –
impairment  operating costs of extended well test equipment      2472 157
gross loss       2475 157
exploration  evaluation gain on farmout       491 –
exploration  evaluation expense       4526 3294
administrative expenses       1577  1490
foreign exchange gainloss       486 171
operating loss      4 7601 5112
finance income      9 1314 1130
finance costs      9 349 538
loss before tax       6636  4520
tax      1017 749 –
loss for the year       5887  4520
attributable to
equity holders of the company       5887 4505
minority interests       – 15
       5887  4520
basic and diluted loss per share      11 928 744
the results above were entirely derived from continuing operations annual report and accounts 2009 33
       at at
       30 june 30 june 
       2009 2008
      notes £’000 £’000
noncurrent assets
intangible assets      12 48857 56400
property plant and equipment      12 277 2446
longterm deposits      12 1000 –
       50134 58846
current assets
trade and other receivables      14 573 604
shortterm deposits      15 16000 15000
cash and cash equivalents      15 3061 5118
       19634 20722
total assets       69768 79568
current liabilities     
trade and other payables      16 809 4658
noncurrent liabilities
deferred tax      17 5682 6431
provisions      18 3466 3024
       9148 9455
total liabilities       9957 14113
net assets       59811 65455
equity attributable to equity holders
called up share capital      21 11588 11588
share premium       37748 37748
other reserves      22 29169 29169
cumulative translation reserve       1659 1659
accumulated losses       17035 11391
total equity       59811 65455
the financial statements were approved by the board on 6 november 2009 and were signed on its behalf by
s jenkins w mathers
chief executive finance director
consolidated balance sheet 
as at 30 june 2009 accounts nautical petroleum plc 34
     cumulative
  share  share other translation retained minority total
  capital premium reserves reserve earnings interests equity
  £’000 £’000 £’000 £’000 £’000 £’000 £’000
at 1 july 2007  9683 20491 29169 1330 11612 4219 50620
currency translation adjustments  – – – 329 – 72 257
total expenses recognised directly in equity  – – – 329 – 72 257
loss for the year  – – – – 4505 15 4520
total recognised income and expense for the year  – – – 329 4505 57 4777
sharebased payments  – – – – 450 – 450
new shares issued  1905 18095 – – – – 20000
costs associated with issuance of shares  – 838 – – – – 838
effect of change in minority interest  – – – – 4276 4276 –
at 30 june 2008  11588 37748 29169 1659 11391 – 65455
loss for the year  – – – – 5887 – 5887
total recognised income and expense for the year  – – – – 5887 – 5887
sharebased payments  – – – – 243 – 243
at 30 june 2009  11588 37748 29169 1659 17035 – 59811
consolidated statement of changes in equity 
for the year ended 30 june 2009 annual report and accounts 2009 35
       2009 2008
      notes £’000 £’000 
net cash outflow from operating activities      23 367 1684 
cash flows from investing activities
finance income       840 988
expenditure on development and production assets       285 –
expenditure on intangible assets       11519 7222
increase in cash placed on shortterm deposit      15 1000 15000
increase in cash placed on longterm deposit      13 1000 –
proceeds from asset disposals       11938 –
net cash flow from investing activities       1026 21234
cash flows from financing activities
proceeds from issue of ordinary shares       – 19162
increase in amounts due to jv partners       – 562
finance expense       156 366
repayment of balances due to related undertakings       508 265
net cash flow from financing activities       664 19093
decrease in cash and cash equivalents       2057 3825
cash and cash equivalents at beginning of year       5118 8943
cash and cash equivalents at end of year      15 3061 5118
consolidated cash flow statement
for the year ended 30 june 2009 accounts nautical petroleum plc 36
notes to the financial statements
1 authorisation of financial statements and statement of compliance with ifrs
the group’s financial statements of nautical petroleum plc for the year ended 30 june 2009 were authorised for issue by the board of 
directors on 6 november 2009 and the balance sheet was signed on the board’s behalf by stephen jenkins and william mathers 
nautical petroleum plc is a public limited company incorporated in england and wales the company’s ordinary shares are traded on 
aim on the london stock exchange
2 accounting policies for the consolidated financial statements
21 basis of preparation
these consolidated financial statements have been prepared in accordance with the requirements of ifrss international financial 
reporting standards as adopted by the european union eu as they apply to the consolidated financial statements of the group for the 
year ended 30 june 2009 and applied in accordance with the provisions of the companies act 2006
the board has reviewed the accounting policies set out below and considers them to be appropriate to the group’s business activities 
on 1 april 2005 the company became the legal parent company of nautical holdings limited in a shareforshare 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
22 basis of consolidation 
these consolidated financial statements of the group comprise the financial statements of nautical petroleum plc “nautical” and its 
subsidiaries as at 30 june 2009 including the results of the subsidiaries which are prepared for the same reporting year as the parent 
company using consistent accounting policies 
all intercompany balances transactions income and expenses and profits and losses resulting from intragroup 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
23 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 27 »
the estimates determining the unwinding of the discount on longterm conditional payments being the expected timings of field  »
development approval and first oil on the mariner field
the group determines whether the extended well test equipment has been impaired in accordance with policy 28  »
24 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 
25 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 retranslated at the 
functional currency rate of exchange ruling at the balance sheet date all differences are taken to the income statement 
the functional currency of nautical petroleum ag npag changed in the year to june 2007 from us dollars to uk sterling the trigger for 
the change was an underlying change in the currency in which the majority of the underlying cash flows are denominated at the time of 
the change in october 2007 major work programmes were being undertaken in npag including drilling and seismic which were 
predominantly denominated in uk sterling annual report and accounts 2009 37
up until october 2007 npag was accounted for as a foreign subsidiary whereby the assets and liabilities of this subsidiary were 
translated into uk sterling at the rate of exchange ruling at the balance sheet date and its income statement was translated at the 
weighted average rates for the period the exchange differences arising on the translation were taken directly to a separate component of 
equity “cumulative translation reserve” on disposal of a foreign entity the deferred cumulative amount recognised in equity relating 
to that particular foreign operation is recognised in the income statement as part of the gain or loss on sale 
26 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 “ee” assets 
ee 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 ee 
asset will be reclassified as a development and production asset but only after the carrying value of the relevant ee 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 ee asset may exceed its recoverable amount an impairment 
review is performed for ee assets when there are such indications an impairment test is carried out by grouping the ee assets with 
the development and production assets belonging to the same geographical segment to form the cashgenerating unit “cgu” for 
impairment testing the equivalent combined carrying value of the cgu is compared against the cgu’s recoverable amount and any 
resulting impairment loss is written off to the income statement the recoverable amount of the cgu is determined as the higher of its 
fair value less costs to sell and its value in use 
acquisitions and disposals
farmin and farmout transactions of ee assets are accounted for at cost costs are capitalised according to the group’s interest net of 
premium received or paid as costs are incurred proceeds from the disposal of an ee asset or part of an ee asset are deducted from 
the capitalised costs and the difference recognised in the income statement as a gain or loss
27 development and production assets
capitalisation
development and production dp 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 ee expenditures incurred in finding commercial reserves 
previously transferred from ee assets as outlined in the policy above 
depletion
costs relating to each single field cost centre are depleted on a unit of production method based on the commercial proven and probable 
reserves for that cost centre development assets are not depreciated until production commences the amortisation calculation takes 
account of the estimated future costs of development of recognised proven and probable reserves based on current price levels changes 
in reserve quantities and cost estimates are recognised prospectively from the last reporting date 
impairment
a review is performed for any indication that the value of the group’s dp assets may be impaired for dp assets when there are such 
indications an impairment test is carried out on the cashgenerating unit each cashgenerating unit is identified in accordance with ias 
36 nautical’s cashgenerating 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 cashgenerating unit exceed the associated estimated future discounted cash flows of the related commercial oil and  
gas reserves
28 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 nonrefundable purchase taxes and any directly 
attributable costs of bringing the asset to its working condition and location for its intended use expenditures incurred 
after the equipment has been placed into operation such as repairs and maintenance and overhaul costs are normally charged 
to the income statement in the year in which the costs are incurred in situations where it can be clearly demonstrated that the 
expenditure has resulted in an increase in the future economic benefits expected to be obtained from the use of an item of equipment 
beyond its original assessed standard of performance the expenditures are capitalised as an additional cost of equipment  accounts nautical petroleum plc 38
notes to the financial statements continued
2 accounting policies for the consolidated financial statements continued
28 plant and equipment continued
depreciation
the group selects its depreciation rates carefully and reviews them regularly to take account of any changes in circumstances when 
determining expected economic lives the group considers the expected rate of technological developments and the intensity at which 
the assets are expected to be used depreciation is calculated on a straightline basis over the useful life useful lives of major classes of 
depreciable assets are
extended well test equipment 20 years
computer equipment        3 years
the useful life and depreciation method are reviewed periodically to ensure that the method and period of depreciation are consistent 
with the expected pattern of economic benefits from items of equipment 
an item of equipment is derecognised upon disposal or when no future economic benefits are expected from its use or disposal any 
gain or loss on derecognition of the asset calculated as the difference between the net disposal proceeds and the carrying amount of the 
asset is included in the income statement in the year the asset is derecognised 
impairment
at each balance sheet date reviews are carried out of the carrying amounts of the assets to determine whether there is any indication 
that those assets have suffered an impairment loss if any such indication exists the recoverable amount of the asset is estimated in 
order to determine the extent if any of the impairment loss where the asset does not generate cash flows that are independent from the 
other assets estimates are made of the cashgenerating 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 cashgenerating unit if the 
recoverable amount of an asset or cashgenerating unit is estimated to be less than its carrying amount the carrying amount of the asset 
or cashgenerating unit is reduced to its recoverable amount impairment losses are recognised immediately in the income statement 
29 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 nonoperating partners of the joint venture 
are included in the group balance sheet
210 provisions
provision for decommissioning
provision for decommissioning is recognised in full as an asset and liability when the obligation arises the asset is included within 
development and productions assets the liability is included within provisions the amount recognised is the estimated cost of 
decommissioning discounted where appropriate to its net present value and is reassessed each year in accordance with local conditions 
and requirements revisions to estimated costs of commissioning which alter the level of provisions required are also reflected in 
adjustments to decommissioning asset
conditional payments
noncurrent conditional payments are measured at amortised cost using the effective interest rate method with the unwinding of the 
discount passing though income statement as a finance cost at each balance sheet the estimates used to determine the discount 
period are assessed and changes made as appropriate with the effect of the change being recorded in the current year 
 
211 financial assets
cash and cash equivalents
cash and cash equivalents comprise cashinhand and deposits held with banks with original maturities of 3 months or less
shortterm deposits
shortterm deposits comprise deposits held with banks which mature in between 3 and 12 months at the balance sheet date
longterm deposits
longterm deposits comprise deposits held with banks which mature in more than 12 months at the balance sheet date
trade and other receivables
trade and other receivables are initially recognised at fair value fair value is considered to be the original invoice amount discounted 
where material appropriate allowances for estimated irrecoverable amounts are recognised in the income statement if there is objective 
evidence that the receivable is impaired  annual report and accounts 2009 39
212 financial liabilities
trade and other payables 
current trade and other payables are initially recognised at fair value fair value is considered to be the original invoice amount 
discounted where material 
213 taxation
current tax
current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities based on 
tax rates and laws that are enacted or substantively enacted by the balance sheet date 
deferred tax
deferred income tax is recognised on all temporary differences arising between the tax bases of assets and liabilities and their carrying 
amounts in the financial statements with the following exceptions 
where the temporary difference arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a  »
business combination that at the time of the transaction affects neither accounting nor taxable profit or loss
in respect of taxable temporary differences associated with investment in subsidiaries associates and joint ventures where the  »
timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse 
in the foreseeable future and
deferred income assets are recognised only to the extent that it is probable that taxable profit will be available against which the  »
deductible temporary differences carried forward tax credits or tax losses can be utilised
deferred income tax assets and liabilities are measured on an undiscounted basis at the tax rates that are expected to apply when the 
related asset is realised or liability is settled based on tax rates and laws enacted or substantively enacted at the balance sheet date
the carrying amount of deferred income tax assets is reviewed at each balance sheet date deferred income tax assets and liabilities are 
offset only if a legally enforcement right exists to set off current tax assets against current tax liabilities the deferred income taxes relate 
to the same taxation authority and that authority permits the group to make a single net payment
income tax is charged or credited directly to equity if it relates to items that are credited or charged to equity otherwise income tax is 
recognised in the income statement
214 employee benefits
the group operates a defined contribution pension scheme contributions payable for the year are charged to the income statement 
215 sharebased payments
the cost of equitysettled transactions is recognised together with a corresponding increase in equity over the year in which the 
performance andor 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 equitysettled 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 sharebased remuneration is determined at the date of grant and recognised as an expense in the income statement on a 
straightline 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
216 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
217 commitments and contingencies
commitments and contingent liabilities are not recognised in the financial statements they are disclosed unless the possibility of an 
outflow of resources embodying economic benefits is remote a contingent asset is not recognised in the financial statements but 
disclosed when an inflow of economic benefits is probable accounts nautical petroleum plc 40
notes to the financial statements continued
2 accounting policies for the consolidated financial statements continued
218 new standards and interpretations not applied
the iasb and ifric have issued the following standards and interpretations with an effective date after the commencement date of 
these financial statements
new standards and interpretations not applied
international accounting standards iasifrs effective date 
ifrs 8 operating segments 1 january 2009 
ias 23 revised borrowing costs 1 january 2009
ifrs 2 amendment share based payment – vesting conditions and cancellations 1 january 2009
ifrs 3 revised business combinations 1 july 2009 
ias 1 revised presentation of financial statements 1 january 2009 
amendment to ias 32 and ias 1 “puttable financial instruments and obligations arising 
 on liquidations” 1 january 2009
amendment to ifrs 1 and ias 27 “amendments for determining the cost of an investment
 in separate financial statements” 1 january 2009
amendment to ias 39 ‘eligible hedged items’ 1 january 2009
improvements to ifrss april 2009 1 july 2009
improvements to ifrss may 2008  1 january 2009
amendments to ifrs 2 ‘group cash settled sharebased payment arrangements’ 1 january 2010
international financial reporting interpretations committee ifric 
ifric 17 distribution of noncash assets to owners 1 july 2009
ifric 18 transfer of assets from customers 1 july 2009
ifric 15 agreements for the construction of real estate 1 january 2009
ifric 16 hedges of a net investment in a foreign operation 1 october 2008
the directors do not anticipate that the adoption of these standards and interpretations will have a material impact on the group’s 
financial statements 
upon adoption of ifrs 8 the group will have to disclose information to enable users of its financial statements to evaluate the nature and 
financial effects of the different business activities in which it engages and the economic environment in which it operates for the 
groups’ current business activities the identification aggregation and measurement of reportable segments under ifrs 8 would not 
result in any differences from the groups’ current interpretation of ias 14 segment reporting the prevailing standard that ifrs 8 will 
replace ifrs 8 will however require additional disclosures for each reportable segment as follows
criteria for identification  »
nature geographic location of business and main customers  »
financial performance metrics both income statement and balance sheet  »
intersegment transactions  »
differences in accounting policy and methodology between segments »
3 turnover and segmental information
revenue disclosed in the income statement is analysed as follows
       2009 2008
       £’000 £’000
oil sales       25 –
revenue       25 –
finance income       1314 1130
total revenue       1339 1130
for the purposes of segmental information the primary segment reporting format is determined to be the business segment the group 
has one class of business segment the exploration for and production of hydrocarbon liquids no further disclosure is required in relation 
to primary segment reporting in this note as all the relevant disclosure is already detailed throughout the group financial statements annual report and accounts 2009 41
the secondary segment information is reported geographically the group’s geographical segments are the united kingdom and europe 
the following tables present certain asset information regarding the group’s geographical segments
       2009 2008
segment revenue       £’000 £’000
united kingdom       25 –
    
       2009 2008
segment assets       £’000 £’000
united kingdom       48781 58563
europe       926 887
assets held centrally       20061 20118
       69768 79568
       2009 2008
capital expenditure       £’000 £’000
united kingdom       8206 9898
europe       40 668
       8246 10566
4 operating loss
       2009 2008
operating loss is stated after charging       £’000 £’000
exploration and evaluation gain       491 –
exploration and evaluation expense
− exploration costs written off see note 12       4057 3244
− pre licence expenditure       469 50
impairment of extended well test equipment       2376 –
depreciation of property plant and equipment       78 142
foreign exchange losses on conditional payments       660 24
other foreign exchange gainslosses       1146 147
 gains from farmout of 825a selkie well
5 auditors’ remuneration
       2009 2008
       £’000 £’000
audit of the group accounts       52 52
audit of the company’s accounts       6 6
       58  58
other fees to auditors
audit of the company’s subsidiaries pursuant to legislation      15 15
other services pursuant to legislation       29 16
taxation services       49 51
       93 82
6 information regarding directors’ emoluments
aggregate directors’ emoluments which exclude pensions are £753k 2008 £827k the emoluments of the highest paid director were 
£331k 2008 £320k in addition he received contributions to a defined contribution pension scheme of £13k 2008 £10k further 
information is included in the remuneration report
7 employees
headcount
       2009 2008
       number number
average number of employees of the group including executive directors during the year was 
management       3 4
technical staffsupportother       2 2 accounts nautical petroleum plc 42
notes to the financial statements continued
7 employees continued
staff costs
       2009 2008
       £’000 £’000
wage and salaries       575 672
bonuses       255 191
social security costs       92 55
other pension costs       34 16
       956 934
equity settled sharebased payments       243 450
       1199 1384
wages and salaries include fees for three executive directors through a service agreement with international energy services limited for 
part of the year two directors resigned on 17 october 2008 and the third became an employee of nautical on 1 november 2008
8 pension commitments 
for direct employees of nautical petroleum plc the company contributes 7 of salary to a defined contribution pension scheme £34k 
has been charged to the income statement for the year 2008 £16k
9 interest and similar items 
       2009 2008
finance income       £’000 £’000
bank interest       775 988
other financial income       426 142
gain on settlement of amounts due to related undertakings      113 –
       1314 1130
       2009 2008
finance costs       £’000 £’000
costs of borrowing facility       161 366
unwinding of discounts on longterm payables       188 172
       349 538
10 tax on loss on ordinary activities 
the major components of the tax credit are
       2009 2008
deferred income tax       £’000 £’000
relating to origination and reversal of temporary differences      1151 –
benefit of previously unrecognised tax losses       1900 –
       749 –
a reconciliation between the tax credit and the product of the accounting profit multiplied by the standard income tax rate is as follows
       2009 2009
       £’000 £’000
loss before tax       6636 4520
loss before tax at the standard uk corporation tax of 28 2008 28     1858 1266
effects of
expenses and income not deductible for tax purposes       179 106
deferred tax assets not recognised        3008 1211
utilisation of deferred tax assets not recognised        1900 –
effect of supplementary charge       180  –
unrelieved tax losses and other deductions arising       – 161
total tax credit on loss on ordinary activities       749 – annual report and accounts 2009 43
11 loss per share
       2009 2008
loss for the year attributable to equity holders £’000       5887 4505
basic weighted average number of shares in issue in the year thousands     63408 60590
basic and diluted loss per ordinary share pence       928 744
in addition at 30 june 2009 there were a total of 348 million options 2008 295 million and 132 million warrants 2008 132 million in 
issue which have not been included in the above calculations all numbers have been adjusted for the 1 for 20 share consolidation which 
took place on 25 september 2008 potential ordinary shares resulting from the exercise of share options and warrants are not dilutive
12 development  production assets intangible assets property plant and equipment 
movements during the year were as follows
      property 
    intangible property plant and
    assets plant and equipment
    exploration equipment development 
    and  extended and
    evaluation well test  production 
    assets equipment assets other total
cost    £’000 £’000 £’000 £’000 £’000
at 1 july 2007    49768 2796 – 7 52571
additions    10566 – – – 10566
exchange adjustments    690 – – – 690
written off    3244 – – – 3244
at 30 june 2008    56400 2796 – 7 59203
additions    7961 – 285 – 8246
disposals     11447 2796 – 7 14250
written off    4057 – – – 4057
at 30 june 2009    48857 – 285 – 49142
depletion and depreciation 
at 1 july 2007    – 210 – 5 215
provided in year    – 140 – 2 142
at 30 june 2008    – 350 – 7 357
provided in year    – 70 8 – 78
impairment    – 2376 – – 2376
disposals    – 2796 – 7 2803
at 30 june 2009    – – 8 – 8
net book value
at 30 june 2009    48857 – 277 – 49134
at 30 june 2008    56400 2446 – – 58846
the exploration and evaluation balance represents the costs related to the fields currently being evaluated and appraised the amounts 
written off relate to unsuccessful exploration costs primarily due to licences being relinquished or in the process of being relinquished 
principally the 327a hydra and 85 and 91 scylla licences the disposals of exploration and evaluation assets relate to the farmouts of 
92b kraken 327a hydra and 825a selkie which were completed during the year
the above balances include amounts relating to a 667 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 667 interest by reimbursement of costs during 
the development phase these costs amount to approximately £95m as at june 2009 2008 £90m if the party declines to take up its 
option the company retains the 667 interest upon payment of £1
in december 2008 management carried out an impairment review on the extended well test equipment in accordance with the policy set 
out in note 29 and considered the following
due to the specialist nature of the equipment there had been infrequent interest from companies wishing to rent or buy it »
in the absence of a binding sale agreement or an active market management is required to make their best estimate of fair value less  »
cost to sell
although there had been some interest over a number of years in the equipment none of the enquiries had led to tangible results  »
therefore in the current difficult financial markets and the general slow down in industry activity during the past year management 
have impaired the asset in full
the equipment was disposed of in june 2009 for zero consideration although there is a possibility of future consideration if the  »
purchaser finds a buyer management do not think the probability of this to be sufficient to attribute any value to it accounts nautical petroleum plc 44
notes to the financial statements continued
13 longterm deposits
       30 june  30 june
       2009 2008
       £’000 £’000
       1000 –
longterm deposits represent a fixed deposit with abbey national of £10m earning interest at 32 which matures on 2 july 2010
14 trade and other receivables
       30 june 30 june
        2009 2008
       £’000 £’000
other debtors       494 481
prepayments and accrued interest       79 123
       573 604
none of the above are impaired
15 cash and shortterm deposits
       30 june  30 june
       2009  2008
       £’000 £’000
cash at bank and in hand       1286 3649
deposits of 3 months or less       1775 1469
       3061 5118
shortterm deposits       16000 15000
cash at bank earns interest at floating rates deposits of 3 months or less earn interest at the respective bank deposit rates shortterm 
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 shortterm deposit rates
in addition the company has £10m on deposit for more than one year details of which are in note 13
16 trade and other payables
       30 june  30 june
       2009 2008
current liabilities       £’000 £’000
trade creditors       504 1806
amounts owed to related companies       13 509
accruals       292 2343
       809 4658
17 deferred taxation
       30 june  30 june
       2009 2008
balance sheet movements deferred tax asset       £’000 £’000
tax losses       3918 –
       30 june  30 june
       2009 2008
balance sheet movements deferred tax liability       £’000 £’000
accelerated capital allowances       4328 –
acquisition fair value adjustments       5272 6431
       9600 6431
net deferred tax liability       5682 6431 annual report and accounts 2009 45
       30 june  30 june
       2009 2008
income statement movements       £’000 £’000
accelerated capital allowances       4328 –
acquisition fair value adjustments       1159 –
tax losses       3918 –
       749 –
in addition to the above balances for tax losses and accelerated capital allowances which were recognised at a tax rate of 50 the  
group has a deferred tax asset not yet recognised at a tax rate of 28 of £35m 2008 £24m which has not been recognised as a result  
of existing uncertainties of their realisation these arise from tax losses of £34m 2008 £53m depreciation in excess of capital 
allowances of £63m 2008 £32m and deferred consideration of £28m 2008 £nil the tax losses are available indefinitely against  
future taxable profits
18 provisions
      provision for conditional
      decommissioning payments
      £’000 £’000
at 1 july 2008       – 3024
additions       20 –
exchange adjustments       – 660
effect of change in estimates       – 426
unwinding of discount       – 188
at 30 june 2009       20 3446
at 30 june 2009 a £20k provision has been made for decommissioning costs related to the keddington field 
conditional payments comprise 2 amounts relating to the mariner field of 1 40m due on field development plan fdp approval by 
the department of energy and climate change decc which is not expected before 2011 and 2 28m due on first oil which is not 
expected before 2014 the company believes these events to be sufficiently probable as to provide for their payment the liabilities were 
acquired as part of the acquisition of the alba resources holdings group in august 2005 at this date they were fair valued the 
movement in the year includes both exchange movements and unwinding of the discount which are shown in the income statement 
the change in estimates applies to a revision of the estimated trigger dates
19 borrowing facility
on 2 november 2007 the group entered into an 18 month £75m borrowing facility with the bank of scotland for general working capital 
purposes on 30 march 2009 this facility was extended to 31 may 2012 with any amounts drawn repayable in full by that date no 
amounts had been drawn at the balance sheet date the facility is secured by a first ranking debenture over the assets of the company 
and the assets of certain subsidiaries principally alba resources limited which has a 2667 interest in the mariner field interest is 
chargeable at 3 or 6 months libor as chosen by the company plus a margin of 275 
20 financial instruments
       30 june  30 june
       2009 2008
       book value book value
       £’000 £’000
financial assets
cash and cash equivalents       3061 5118
shortterm deposits       16000 15000
longterm deposits       1000 –
other debtors note 14       573 481
financial liabilities
trade and other payables – current       809 4658
there is no material difference between the carrying value and fair value of the financial instruments
financial risks
the group is exposed to financial risks arising out of market risks credit risks and liquidity risks the board reviews and establishes 
appropriate policies for the management of these risks and monitors them on a regular basis
market risks
market risks relate to commodity prices foreign currency exchange rates and interest rate risks
1 commodity price risk
the group has only a small amount of revenue so is not exposed to any material commodity price risk on its financial instruments accounts nautical petroleum plc 46
notes to the financial statements continued
20 financial instruments continued
2 foreign currency risk
the group has transactional currency exposure whereby expenditure is incurred in currencies which are not the functional currency of 
the relevant group company uk sterling the primary exposure is to the us dollar the group monitors exchange rate movements and 
considers forward purchase of us dollars prior to major capital programmes requiring dollars
the noncurrent liabilities are payments which are triggered on future events as set out in note 18 which are in us dollars the impact of 
a 10 change in the uk sterlingusd exchange rate would have caused ±£344k 2008 £320k effect on the profit before tax
3 interest rate risk
the group has not drawn on its bank facility if it were to do so it would be exposed to interest movements as the rate is linked to libor 
rates as described in note 19
there is an insignificant risk of change in value of cash deposits
credit risks
credit risk is primarily that a partner fails to pay amounts due causing financial loss to the group the group currently has limited 
exposure to such credit risk maximum exposure would be the amounts shown in the balance sheet
the group is exposed to credit risk on the financial institutions with which it holds cash shortterm deposits and deposits maturing in 
greater than one year at june 2009 the company had a £10 million deposit which matures on 2 july 2010 with abbey national part of 
the santander group substantially all other cash was with bank of scotland except for small balances with bnp paribas and ubs 
subsequent to the year end further funds were placed with abbey scottish widows and anglo irish bank 
liquidity risks
liquidity risk is the risk that sources of funding for the group’s business activities are not available as a business which primarily 
focuses on oil and gas exploration and appraisal the primary source of funding of the group’s activities is equity the group has been 
successful in raising equity on a number of occasions most recently in october 2007 when £200m before issue costs were raised 
when appropriate the group seeks to supplement equity funding with borrowing and a £75m facility was secured with bank of scotland 
in november 2007 for general working capital purposes which has been extended to may 2012 the board always ensures that there is 
sufficient funding available before committing to any significant expenditure in addition the group has been successful at mitigating 
risk through its farmout programmes whereby the majority of expenditure on its drilling programmes is borne by partners there is 
currently therefore limited exposure to a liquidity risk 
the maturity profile of the group’s noncurrent financial liabilities is dependent upon certain events as explained in note 18 the current 
liabilities are all due within 1 year the group’s payment policy is to settle amounts in accordance with agreed payment terms which is 
typically 30 days
capital management 
the group defines capital as the total equity of the group the objective of the group’s capital management is to ensure that it makes the 
maximum use of its capital to support its business and maximise shareholder value there are no external constraints on the group’s 
capital as the group’s primary focus is on exploration and appraisal equity has been the principal form of funding a credit facility has 
been arranged with bank of scotland in order to provide added flexibility see note 19 as the group begins to develop its fields debt will 
be become more significant
21 share capital 
   at 30 june 2009 at 30 june 2008
    number £’000 number £’000
authorised
ordinary shares of 20p each    100000000 20000 100000000 20000
allotted called up and fully paid
ordinary shares of 20p each    3875000 100 3875000   100
reverse acquisition capital adjustment    34875000 6556 34875000 6556
ordinary shares of 20p each    24658291 4932 24658291 4932
    63408291 11588 63408291  11588
all numbers have been adjusted for the 1 for 20 share consolidation which took place on 25 september 2008
under reverse acquisition accounting the legal parent is nautical petroleum plc but the group results at the date of acquisition are as if 
nautical holdings limited were the parent the value of the shares at the date of acquisition is based on the value of the share capital of 
nautical holdings limited at the date of acquisition 1 april 2005 following the reverse acquisition the group shows the additions 
made for nautical petroleum plc only the reverse acquisition capital adjustment is the deemed value of capital acquired on the reverse 
takeover and the associated number of shares is the share capital issued for the takeover annual report and accounts 2009 47
the movement on issued shares is set out in the following table all movements are for ordinary 20p shares as adjusted for the 1 for 20 
share consolidation which took place on 25 september 2008
        number
       of shares
      date issued issue price  issued
at 1 july 2007       53884481
private equity placing     17 october 2007 210p 9523810
at 30 june 2008       63408291
movement in year       –
at 30 june 2009       63408291
all movements in the following notes have been adjusted for the 1 for 20 share consolidation which took place on 25 september 2008
the group announced on 24 november 2005 the acquisition of 22 of the st laurent permit onshore france field with the consideration 
to be satisfied by the issuance of 19388 new ordinary shares of 20p each the seller has not yet requested the issue of these shares 
on 4 july 2005 the group announced the issuance of 583334 warrants to subscribe for new ordinary shares at 400p per share exercisable 
up to 3 july 2009 the company has the right to require warrant holders to exercise their warrants should the closing price of the 
company’s ordinary shares remain above 800p per share for 90 consecutive trading days in the year to 3 july 2009 these warrants 
expired post year end without being exercised
on 3 january 2006 the group announced the issuance of 731890 warrants to subscribe for new ordinary shares at 400p per share 
exercisable up to 3 january 2010 the company has the right to require warrant holders to exercise their warrants should the closing 
price of the company’s ordinary shares remain above 800p per share for 90 consecutive trading days in the year to 3 january 2010
equity settled share options
at the balance sheet date and at the date of this report the following share options are outstanding
       exercisable  exercisable
      held by at  at
date    exercisable exercise total current 30 june 9 november
issued   by price issued directors 2009 2009
7 march 2005  7 march 2013 8000p 1000000 600000 1000000 600000
23 september 2005  23 september 2010 25075p 50000 – 50000 50000
26 september 2005  26 september 2013 22000p 1025000 650000 1025000 675000
18 january 2007  18 january 2015 17700p 412500 250000 412500 287500
18 january 2008  18 january 2016 21100p 447500 300000 223750 337500
15 april 2008  15 april 2016 18500p 15000 – 7500 11250
13 november 2008  13 november 2016 3617p 100000 100000 25000 25000
12 january 2009  12 january 2017 2675p 395000 325000 – 98750
24 june 2009  24 june 2017 5710p 30000 30000 – –
balance at 30 june 2009     3475000 2255000 2743750 2085000
balance at 6 november 2009     3475000 2255000 2743750 2085000
the options were all granted under the nautical share option scheme rules with the exception of the 50000 options granted on 23 
september 2005 in association with the acquisition of the alba resources holdings group whereby from the date of issue 25 are 
exercisable after 6 months 25 after 12 months 25 after 18 months and 25 after 24 months the options must be exercised within 8 
years of issue the exercise price is the highest of either the nominal value of the shares 20p the average price for the 30 days 
preceding grant date or the price on grant date none of the directors exercised options during the year i williams and h thanawala 
resigned on 17 october 2008 and therefore had until 17 october 2009 to exercise any exercisable options none were exercised
the weighted average share price in the year was 557p 2008 1942p the weighted average remaining contract life at 30 june 2009 was 
490 years 2008 555 years the weighted average fair value of options granted in the year was 1396p 2008 848p 
the expense recognised for sharebased payments in the year to 30 june 2009 was £243k 2008 £450k 
the following table illustrates the number and weighted average exercise price waep of and movements in share options during the year
     2009 2009 2008 2008
      number waep number waep
outstanding at beginning of year     2952500 1656  2487500 1572
granted during the year     525000 303  465000 2102
at 30 june     3477500 1451  2952500 1656
at 30 june 2009 275 million options are exercisable 2008 228 million accounts nautical petroleum plc 48
notes to the financial statements continued
21 share capital continued
the fair value of the share options granted is estimated using a binomial model the following table lists the inputs and assumptions 
used in the model 
     13 november 12 january 24 june 
     2009 2009 2009 2008
dividend yield     – – – –
expected share price volatility      674 737 740 540
risk free interest rate     300 300 345 450
leaver rate     5 5 5 5
volatility has been based on a weighted average of nautical’s and its peer group’s share prices 
22 reconciliation of movements in equity
the reconciliation of movements in equity is detailed in the consolidated statement of changes in equity the following is a description of 
the nature and purpose of each reserve
share capital and share premium
the group’s share capital and share premium are explained in note 21
cumulative translation reserve
the cumulative translation reserve is used to record exchange differences arising from the translation of the financial statements of 
subsidiaries whose functional currency is not uk sterling and any fair value adjustments associated with their acquisition these 
movements related to nautical petroleum ag which changed its functional currency from us dollars to uk sterling in october 2007 
following which no further movements have been recorded
other reserves
other reserves comprise the following
       30 june  30 june
       2009 2008
       £’000 £’000
capital contribution       2702 2702
merger reserve       12173 12173
warrant reserve       263 263
capital reserve       14031 14031
       29169 29169
the capital contribution arose on the formation of nautical holdings limited see note 21 for explanation of reverse acquisition 
accounting when equipment was contributed to the company
the merger reserve arises from uk law for merger relief which sets out rules for subsidiaries acquired in whole or in part for shares 
where at least 90 of the company is acquired in such circumstances where the company prepares accounts under uk gaap the 
investment in the company’s financial statements is at the nominal value of the shares issued in the group’s financial statements the 
premium is recorded in the merger reserve
the warrant reserve shows the value of share warrants issued
the capital reserve arose from the fair value exercise on acquisition of nautical petroleum ag annual report and accounts 2009 49
23 net cash flows from operating activities
 
       2009 2008
       £’000 £’000
loss for the year       5887 4521
finance income       1314 1130
finance costs       349 538
taxation       749 –
impairment of equipment       2376 –
exploration gain       491 –
exploration costs written off       4057 3244
sharebased payment charges       243 450
depreciation       79 142
unrealised foreign exchange movements       804 171
operating cash flow before working capital movements       533 1106
decreaseincrease in trade and other receivables       38 432
increasedecrease in trade and other payables       128 146
net cash outflow from operating activities       367 1684
24 analysis of net cash
    at  at    at
    1 july   1 july  30 june
    2007 cash flow 2008 cash flow 2009
    £’000 £’000 £’000 £’000 £’000
cash at bank and in hand    8943 3825 5118 2057 3061
shortterm deposits    – 15000 15000 1000 16000
net cash    8943 11175 20118 1057 19061
25 commitments
the group has capital commitments of £17 million 2008 £nil
26 related party transactions
a key management personnel
the group defines key management personnel as the directors of the company s jenkins has entered into a loan agreement with the 
company for £3948 with an outstanding balance due to the company at 30 june 2009 of £1645 2008 £1570 there are no transactions 
with directors other than their remuneration as disclosed in the remuneration report
b other related parties
executive directors i williams h thanawala and p jennings provided services under a service agreement with international energy 
services limited iesl for part of the year i williams and h thanawala resigned on 17 october 2008 and p jennings became an 
employee of nautical on 1 november 2008 the charges in the year were £66k 2008 £443k
iesl is a 100 subsidiary of international energy group ag ieg nautical petroleum plc is an associate of ieg and as such iesl is a 
related party iesl provides services to companies within the ieg group and associates such shared services include the occupation of 
shared office space and facilities and some administrative functions and amounted to £301k 2008 £273k which was in addition to the 
services of the directors at the year end an amount of £30k 2008 £157k was due to iesl in addition at the year end there was £11k 
2008 £451k due to ieg
27 ultimate parent undertaking and controlling party
details of substantial shareholders are set out in the directors report with the largest shareholder being international energy group ag 
ieg a company registered in switzerland at 30 june 2009 ieg had a holding of 3093 the directors consider that no company has a 
controlling interest in nautical accounts nautical petroleum plc 50
28 subsidiary undertakings
 country of   proportion of
 incorporation  voting rights
subsidiary registration holding  shares held  activity
nautical holdings limited england ordinary shares 100 investment and oil equipment
uah limited england ordinary shares 100 investment
nautical petroleum ag switzerland ordinary shares 100 exploration development and production
alba resources holdings limited scotland ordinary shares 100 investment
alba resources limited scotland  ordinary shares 100 exploration development and production
mountwest 560 limited scotland ordinary shares 100 exploration development and production
mountwest 561 limited scotland ordinary shares 100 exploration development and production
mountwest 562 limited scotland ordinary shares 100 dormant
first mariner limited england ordinary shares 100 exploration development and production
 held by subsidiary undertakings
nautical petroleum ag carries out its activities through a uk branch
notes to the financial statements continued annual report and accounts 2009 51
directors’ responsibilities for the parent company financial statements
the directors are responsible for preparing the directors report and the financial statements in accordance with applicable law  
and regulations
company law requires the directors to prepare financial statements for each financial year under that law the directors have elected to 
prepare the financial statements in accordance with united kingdom generally accepted accounting practice united kingdom 
accounting standards and applicable law under company law the directors must not approve the financial statements unless they are 
satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period 
in preparing these financial statements the directors are required to
select suitable accounting policies and then apply them consistently »
make judgements and accounting estimates that are reasonable and prudent »
state whether applicable uk accounting standards have been followed subject to any material departures disclosed and explained in  »
the financial statements
prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue   »
in business
the directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s 
transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the 
financial statements comply with the companies act 2006 they are also responsible for safeguarding the assets of the company and 
hence for taking reasonable steps for the prevention and detection of fraud and other irregularities
the directors are responsible for the maintenance and integrity of the corporate and financial information included on the company’s 
website legislation in the united kingdom governing the preparation and dissemination of financial statements may differ from 
legislation in other jurisdictions
nautical petroleum plc company only accounts 2009 accounts nautical petroleum plc 52
we have audited the parent company financial statements of nautical petroleum plc for the year ended 30 june 2009 which comprise the 
company balance sheet and the related notes 29 to 38 the financial reporting framework that has been applied in their preparation is 
applicable law and united kingdom accounting standards united kingdom generally accepted accounting practice
this report is made solely to the company’s members as a body in accordance with sections 495 and 496 of the companies act 2006 
our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in 
an auditor’s report and for no other purpose to the fullest extent permitted by law we do not accept or assume responsibility to anyone 
other than the company and the company’s members as a body for our audit work for this report or for the opinions we have formed
respective responsibilities of directors and auditors
as explained more fully in the directors’ responsibilities statement set out on page 30 the directors are responsible for the preparation 
of the parent company financial statements and for being satisfied that they give a true and fair view our responsibility is to audit the 
parent company financial statements in accordance with applicable law and international standards on auditing uk and ireland those 
standards require us to comply with the auditing practices board’s ethical standards for auditors
scope of the audit of the financial statements
an audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable 
assurance that the financial statements are free from material misstatement whether caused by fraud or error this includes an 
assessment of whether the accounting policies are appropriate to the parent company’s circumstances and have been consistently 
applied and adequately disclosed the reasonableness of significant accounting estimates made by the directors and the overall 
presentation of the financial statements
opinion on financial statements
in our opinion the parent company financial statements
give a true and fair view of the state of the company’s affairs as at 30 june 2009 »
have been properly prepared in accordance with united kingdom generally accepted accounting practice and »
have been prepared in accordance with the requirements of the companies act 2006 »
opinion on other matters prescribed by the companies act 2006
in our opinion the information given in the directors’ report for the financial year for which the financial statements are prepared is 
consistent with the parent company financial statements
matters on which we are required to report by exception
we have nothing to report in respect of the following matters where the companies act 2006 requires us to report to you if in  
our opinion
adequate accounting records have not been kept by the parent company or returns adequate for our audit have not been received from  »
branches not visited by us or
the parent company financial statements are not in agreement with the accounting records and returns or »
certain disclosures of directors’ remuneration specified by law are not made or »
we have not received all the information and explanations we require for our audit »
other matter
we have reported separately on the group financial statements of nautical petroleum plc for the year ended 30 june 2009
kevin weston senior statutory auditor
for and on behalf of ernst young llp statutory auditor
aberdeen
6 november 2009
independent auditors’ report 
to the members of nautical petroleum plc annual report and accounts 2009 53
       2009 2008
      notes £’000 £’000
fixed assets
intangible assets      32 1365 1289
tangible assets      33 – –
investments      34 11884 11884
total fixed assets       13249 13173
current assets 
trade debtors and other receivables      35 11542 12491
cash at bank and in hand       20022 20096
total current assets       31564 32587
creditors amounts falling due within 1 year      36 1893 2207
net current assets       29671 30380
net assets       42920 43553
capital and reserves      37
called up share capital       12682 12682
share premium       37015 37015
warrant reserve       263 263
profit and loss reserve       7040 6407
total shareholders’ funds       42920 43553
the financial statements were approved by the board on 6 november 2009 and were signed on its behalf by
s jenkins  w mathers
chief executive  finance director
company balance sheet 
as at 30 june 2009 accounts nautical petroleum plc 54
29 accounting policies
a basis of accounts preparation
the financial statements have been prepared under the historic cost convention and in accordance with applicable united kingdom 
accounting standards in addition to the requirements of uk accounting standards the accounting for oil and gas exploration and 
production activities is guided by the statement of recommended practice “sorp” “accounting for oil and gas exploration production 
and decommissioning activities” issued by the uk oil industry accounting committee on 7 june 2001 the financial information has 
been prepared in accordance with the provisions of the sorp
b exploration evaluation and development expenditure
all costs incurred after the rights to explore an area have been obtained are accumulated and capitalised as intangible exploration and 
evaluation ee assets if facts and circumstances indicate that the carrying value of the ee asset may exceed its recoverable amount 
an impairment review is performed
development and production dp 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 ee expenditures incurred in finding commercial reserves
when production commences the capital costs incurred plus an estimate of future costs of development are depleted on the unit of 
production method based on proven and probable reserves for the cost centre changes in reserve quantities are recognised 
prospectively from the last reporting date
c depreciation
the cost of fixed assets is written off over their expected useful lives as follows
computer equipment        3 years
as of june 2009 the company no longer has any equipment capitalised
d foreign currencies
assets liabilities revenues and costs denominated in foreign currencies are recorded at the rates of exchange ruling at the date of the 
transactions monetary assets and liabilities at the balance sheet date are translated at the year end rate of exchange 
e sharebased payments
employees including directors and senior executives of the company receive remuneration in the form of sharebased payment 
transactions whereby these individuals render services as consideration for equity instruments “equitysettled transactions”
the cost of equitysettled transactions is recognised together with a corresponding increase in equity over the period in which the 
performance andor 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 equitysettled 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 sharebased remuneration is determined at the date of grant and recognised as an expense in the income statement on a 
straightline basis over the vesting period taking account of the estimated number of shares that will vest the fair value is determined 
by use of a binomial model
f investments in subsidiaries
the company records investments in subsidiaries at cost less provision for impairment where subsidiaries have been acquired in part 
for shares and at least 90 of the company has been acquired the merger relief provisions of the companies act 2006 have been applied 
the share element of the transaction is recorded at the nominal value of the shares issued
30 losses attributable to nautical petroleum plc
the loss for the year dealt with in the accounts of nautical petroleum plc was £876k 2008 £2222k as provided by s408 of the 
companies act 2006 no profit and loss account is presented in respect of nautical petroleum plc
notes to the company financial statements annual report and accounts 2009 55
31 employees
headcount
       2009 2008
       number number
average number of employees of the company including executive directors during the year was
management       3 4
technical staffsupportother       2 2
three directors provided services to the company through a service agreement with international energy services limited which  
is a related party for part of the year two directors resigned on 17 october 2008 and the third became an employee of nautical on  
1 november 2008 
staff costs
       2009 2008
       £’000 £’000
wage and salaries       575 672
bonuses       255 191
social security costs       92 55
other pension costs       34 16
       956 934
wages and salaries include fees for three directors provided services to the company through a service agreement with international 
energy services limited for part of the year two directors resigned on 17 october 2008 and the third became an employee of nautical  
on 1 november 2008 further information regarding the remuneration awarded to directors is provided in the remuneration report on 
page 27
       2009 2008
       £’000 £’000
equity settled sharebased payments       243 450
 
32 intangible assets
        total
exploration and evaluation assets        £’000
at 1 july 2008        1289
additions        825
exploration costs written off        749
at 30 june 2009        1365
the exploration and evaluation balance represents the costs related to the fields currently being evaluated and appraised the amounts 
written off correspond to licences relinquished in the year
33 tangible assets
        total
computer equipment        £’000
cost
at 1 july 2008        5
disposals        5
at 30 june 2009        –
depreciation
at 1 july 2008        5
disposals        5
at 30 june 2009        –
net book value
at 30 june 2009        –
at 30 june 2008        –
  accounts nautical petroleum plc 56
34 investments
        total
investments in subsidiary companies        £’000
cost
at 1 july 2008 and at 30 june 2009        11884
details of subsidiary companies are shown in note 29 
in accounting for the acquisitions of nautical holdings limited the alba resources holdings group and first mariner limited the 
company has applied the merger relief provisions of the companies act 2006
35 trade debtors and other receivables
 
       2009 2008
       £’000 £’000
amounts owed by subsidiaries       10994 11888
other debtors       469 480
prepayments and accrued interest       79 123
       11542 12491
36 creditors amounts falling due to within 1 year
       2009 2008
       £’000 £’000
amounts owed to subsidiaries       1130 –
trade creditors       430 1651
amounts owed to related companies       41 213
accruals       292 343
       1893 2207
37 share capital and reserves
    share  share warrant profit and
    capital premium reserve loss reserve total equity
    £’000 £’000 £’000 £’000 £’000
at 1 july 2008    12682 37015 263 6407 43553
share option charges added back    – – – 243 243
loss for the year    – – – 876 876
at 30 june 2009    12682 37015 263 7040 42920
details of share capital and sharebased payments are set out in note 21
38 related party transactions
executive directors i williams h thanawala and p jennings provided services under a service agreement with international energy 
services limited iesl for part of the year i williams and h thanawala resigned on 17 october 2008 and p jennings became an 
employee of nautical on 1 november 2008 the charges in the year were £66k 2008 £443k s jenkins has entered into a loan agreement 
with the company for £3948 with an outstanding balance due to the company at 30 june 2009 of £1645 2008 £1570 
iesl is a 100 subsidiary of international energy group ag ieg nautical petroleum plc is an associate of ieg and as such iesl is a 
related party iesl provides services to companies within the ieg group and associates such shared services include the occupation of 
shared office space and facilities and some administrative functions and amounted to £301k 2008 £273k which was in addition to the 
services of the directors at the year end an amount of £30k 2008 £157k was due to iesl
 
at the year end there was £11k 2008 £113k due to ieg
notes to the company financial statements continued annual report and accounts 2009 57
supplementary information
audit of reserves and resource volumes for annual report and accounts of nautical petroleum plc “the company”
we have been asked to provide an updated comment on the resources and reserves estimates for two of the assets of the company
the company asserts that there have been no material technical changes to the inputs and methods that the company would use in the 
estimation of these quantities save for the following material changes to the data or interpretations available that have taken place on 
the following assets over the past year 
mariner  » license p335 ukcs block 911a the new operator statoil uk ltd has continued studies and data acquisition to better 
understand the reservoirs the net result of the new data and studies has been to increase its estimate of the recoverable volumes in 
the mariner and heimdal formations rps has not had sufficient access to data to verify these estimates however given the new 
operator’s experience in the heavy oil play in the region and the rigour of in its methods of rps has no reason to assume that these 
estimates are invalid
kraken  » license p1077 ukcs block 92b a third well has been drilled in kraken which was dry and resulted in a reduction in 
estimated contingent resources rps has reviewed the best estimate contingent resources quoted in the annual report and 
concurs with this estimate
on this basis we can repeat our opinion that the company’s estimates of best estimate contingent resources are in aggregate 
reasonable and have been prepared in accordance with generally accepted petroleum engineering and evaluation principles as set forth 
in the petroleum resource management system 2007 and the standards pertaining to the estimating and auditing of oil and gas 
reserve information both promulgated by the society of petroleum engineers et al 
we draw your attention to the following points
the recoverable volumes in the mariner field have this year been classified as best estimate contingent resources development  »
pending in line with the operator’s revised classification with which we concur
estimates of reserves and resources are inherently imprecise and uncertain presentation of a single estimate does not illustrate the  »
inherent uncertainty in the methods used to arrive at the estimate
many of the company’s projects remain relatively immature and are the subject to ongoing technical evaluation by the company as a  »
result there is a large range between low and high volume estimates although we deem the estimates to be reasonable these 
estimates may be subject to significant change as new data becomes available
we have not reviewed the “risking” or “chance of success” associated with any of the prospective or contingent resources in your  »
portfolio
yours faithfully
r t kelly
technical director
rps energy ltd
5 november 2009  accounts nautical petroleum plc 58
notes annual report and accounts 2009 59
notes accounts nautical petroleum plc 60
notes nautical petroleum plc  
is an independent 
hydrocarbon exploration 
and development company 
listed on the london aim 
the company’s mission  
is to acquire develop and 
add value to discovered 
heavy oil on the united 
kingdom continental 
shelf and europe
contents
business review
highlights 2009 01
the heavy oil market 02
chairman’s statement 04
chief executive’s review 06
operational review  
 our portfolio 08
 uk continental shelf 10
 france  18
finance director’s review 20
board of directors 22
governance 
directors’ report 24
remuneration report 27
corporate governance 28
directors’ responsibilities  
for the financial statements 30
independent auditors’ report 31
 
accounts
consolidated income statement 32
consolidated balance sheet 33
consolidated statement  
of changes in equity 34
consolidated cash flow statement 35
notes to the financial statements 36
nautical petroleum plc company  
only accounts 2009 51
independent auditors’ report 52
company balance sheet 53
notes to the company  
financial statements 54
supplementary information 57
shareholder information ibc
glossary  ibc
glossary
registered and corporate office
parnell house
25 wilton road
london
sw1v 1yd
44 020 7550 4890
44 020 7550 4946
wwwnauticalpetroleumcom
nominated adviser and joint broker
evolution securities limited
100 wood street
london ec2v 7an 
tel 44 0 20 7071 4317
joint broker
ambrian partners limited
old change house
128 queen victoria street
london ec4v 4bj
tel 44 020 7634 4700
solicitors
cms cameron mckenna llp
mitre house
160 aldersgate street
london
ec1a 4dd
shareholder information
api american petroleum institute
®
bbl barrels
bcf billion cubic feet
bn billion
bopd barrels of oil per day
cp centipoises 
d darcy
decc department of energy and climate change 
dst drill stem test
ewt extended well test
financial public relations
buchanan communications limited
45 moorfields
london
ec2y 9ae
registrars
capita registrars
the registry
34 beckenham road
beckenham
kent
br3 4tu
auditors 
ernst  young
blenheim house
fountainhall road
aberdeen
ab15 4dt
company secretary
audrey clarke fcis
parnell house
25 wilton road
london 
swiv 1yd
fdp field development plan
km kilometres
k thousand
m million
mmbo million barrels of oil
mwd measurement while drilling
owc oilwater contact
ukcs united kingdom continental shelf
fpso floating production storage and offtake
feed front end engineering and design wwwnauticalpetroleumcom
nautical petroleum plc
annual report and accounts 2009
nautical petroleum annual report and accounts 2009
wwwnauticalpetroleumcom
nautical petroleum plc
 
parnell house
25 wilton road
london
sw1v 1yd
t 020 7550 4890
f 020 7550 4946


Summary:
 nautical petroleum plc 04 business review
nautical petroleum is pleased to report  
to shareholders a further year of 
significant progress in the development  
of its asset portfolio 
john conlin
chairman
chairman’s 
statement
nautical petroleum is pleased to report to shareholders a further 
year of significant progress in the development of its asset portfolio 
this progress has however been tempered by a period driven 
primarily by the dramatic collapse in oil prices seen in the second 
half of 2008 and the onset of global recession our market 
capitalisation bottomed out at a value equivalent to our cash in 
hand where it remained for some six months plainly at oil prices 
of around 40 per barrel the market assigned no value to our 
portfolio of discovered hydrocarbons or our diverse exploration 
portfolio stimulated by the welcome fiscal boost from the 
chancellor’s april 2009 budget announcement of the new field 
allowance’s for heavy oil fields and subsequently by a recovery in 
oil price to levels above 70 the share price has stabilised to its 
current level 
while short term oil prices trends can be very uncertain there is 
reasonable consensus that over the medium to longterm 
timeframe prices will not drop below 70 per barrel for a sustained 
period while the probability of further growth remains 
importantly for our future heavy oil production streams the 
narrowing of the discount related to heavy oil is also a broadly 
accepted trend 
with this commodity pricing backdrop the potential value of 
nautical’s interests in the successful development of mariner and 
kraken is still very heavily discounted but we are confident that 
increasing value will be attached to these assets once the 
respective joint ventures move these field developments into the 
execution phase this therefore remains our top priority and key to 
this is the role of statoil on mariner 
mariner
statoil’s strong commitment to the mariner project highlighted 
recently in the media and during the recent visit of its ceo to the 
uk is greatly encouraging moreover their experience of 
developing heavy oil fields becomes increasingly visible in the 
diverse range of technical studies initiated by them to identify the 
optimal shape of a mariner development
as an example statoil has applied geophysical techniques proven in 
their successful grane heavy oil field by acquiring two further 
seismic surveys during the period these mark the first major 
operational activities on mariner since the extended well test in 
1997 both surveys have significantly improved our understanding of 
the maureen and heimdal reservoirs and we anticipate the improved 
imaging will be reflected in updated reservoir forecasting models 
early in 2010 all the signs are that the mariner development is 
economically robust and moving inexorably forward to project 
sanction and field development plan fdp submission in 2011 with 
first oil in 2015
one consequence of the projected first oil date of 2015 is the 
decision to reclassify the maureen hydrocarbons from reserves to 
contingent resources in line with industry best practice on 
resource definition based on updated estimates from the operator 
statoil combined gross contingent resources for the maureen and 
heimdal reservoirs combined are now 369mmbo gross 90mmbo 
net this compares to 274mmbo 67mmbo net carried in 2008 
kraken
nautical operates the kraken discovery with a 35 equity share 
and therefore dictates the pace of development it is also important 
to note that the oil viscosity in kraken is within the range of the 
captain field which currently produces at around 25000bopd and  annual report and accounts 2009 05
is targeting a recovery factor of over 50
while buoyed by the tremendous results of 92b2 the failure of a 
third well 92b3 drilled in septemberoctober 2008 albeit 
aggressively located to the northeast of the discovery wells to 
chase an upside resources scenario needed to be fully understood 
as a result a controlled source electromagnetic csem survey 
was commissioned to further define the extent of the reservoir 
enhanced seismic processing and regional studies are also in 
progress in combination with the csem results this study 
programme is focussed on the identification of the target for a 
further appraisal well to be drilled in the first half of 2010
 
as a result of the dry well 92b3 the gross contingent resource 
estimate for kraken has been reduced from 106mmbo 37mmbo 
net to the 83mmbo 29mmbo net contained in a core area to the 
north and south of the two successful wells encouragingly the 
new seismic data has identified significant exploration potential to 
the west of the core area 
development concept studies have meanwhile continued with the 
joint venture favouring a phased development solution it is 
anticipated that the results of the upcoming well can be quickly 
incorporated into our assessment and hence we believe that it 
remains realistic to target project sanction and fdp submission by 
the end of 2010
rest of the portfolio
whilst kraken and mariner have been our key areas of focus we 
continued to strengthen our position on the east shetland platform 
by adding a further six blocks to the portfolio in the 25
th
 licensing 
round we were also pleased to further consolidate our position in 
france with the award of two further licences
financial positioning 
since the inception of nautical in 2005 £38m has been raised of 
which £191m remained at year end nautical remains debt free 
and our £75m secured debt facility remains undrawn and fully 
available the impact of the global financial crisis on the cash 
positions of small and mid cap ep companies in particular 
suggests that our creative farmout deals of the recent past may be 
more challenging to replicate in the immediate future 
nevertheless we are confident that we have sufficient financial 
resources to meet the immediate needs of the business as we 
progress kraken and mariner towards development decisions
looking further ahead we continue to position the group to obtain 
the necessary financing to implement our heavy oil development 
strategy through the most effective combination of debt equity 
funding and other means in that regard the fact that a number of 
capital raisings have recently being achieved in the ep sector at 
moderate discounts is evidence of emerging confidence in the 
sector in parallel we continue to receive encouraging signals from 
advisers and the principal lending institutions of fertile ground for 
project financing particularly for those heavy oil projects put under 
the spotlight by hm government’s fiscal encouragement
capability
we continued with our model of outsourcing evaluation work 
during the period enabling us to keep our administration 
expenses to a minimum whilst maintaining access to a highly 
capable group of technical experts that this works so effectively 
is a tribute to the cohesion and versatility of the core executive 
team in particular the commercial creativity of the team is widely 
acknowledged and will serve nautical well in our efforts to 
capitalise on our portfolio of opportunities however looking 
forward to a sharpened focus on field development definition in 
mariner and kraken and the consequential major investment 
decisions it is our intention to complement the core inhouse team 
with a fulltime engineering manager
i would like to take this opportunity to thank ian williams who led 
nautical energetically as chairman through its formative years 
until his departure at the end of 2008 the board would also wish 
to express our appreciation for the supportive leadership of patrick 
kennedy who took on the role of acting chairman during the first 
half of 2009
moving forward in 2010 
the past 12 months has been turbulent for ep companies and 
whilst the overall economy remains fragile there are signs of 
confidence returning to the sector importantly for nautical there 
is some evidence albeit mixed as yet of a lower cost environment 
emerging and having successfully preserved our financial 
resources during this period of instability we are now better 
positioned to take advantage of this
our planned activity for next year anticipates a further appraisal 
well on kraken as we push towards the goal of project sanction 
and fdp submission by the end of 2010 in parallel we expect 
statoil to continue to progress toward concept selection on 
mariner and award of the contract for front end engineering and 
design feed whilst our key focus will remain on kraken and 
mariner we will continue to progress our exploration portfolio 
with the first material activity scheduled to be the drilling of the 
catcher prospect in q2 2010
john conlin
chairman
our planned activity for next year
anticipates a further appraisal well on
kraken as we push towards the goal of 
project sanction fdp submission by the 
end of 2010 in parallel we expect 
statoilto continue to progress toward 
concept selection on mariner and award 
of the contract for feed