PETROLIA SE - ANNUAL REPORT 2024
ANNUAL REPORT 24
PETROLIA SE
20
24
ANNUAL REPORT 2024 PETROLIA SE
CONTENT
STATEMENT OF DIRECTORS AND RESPONSIBILITY STATEMENT 05
MANAGEMENT REPORT 07
CORPORATE SOCIAL RESPONSIBILITY 10
FINANCIAL STATEMENTS – GROUP
Consolidated Income Statement 12
Consolidated Statement of Comprehensive Income 13
Consolidated Statement of Financial Position – Assets 14
Consolidated Statement of Financial Position – Equity and Liabilities 15
Consolidated Statement of Changes in Equity 16
Consolidated Statement of Cash Flows 17
Notes to the consolidated financial statements 18
FINANCIAL STATEMENTS – PARENT COMPANY
Statement of profit or loss and other Comprehensive Income 55
Statement of Financial Position 56
Statement of Changes in Equity 57
Statement of Cash Flows 58
Notes to the financial statements 59
AUDITOR’S REPORT 82
CORPORATE GOVERNANCE REPORT 89
4
RESPONSIBILITY
STATE
MENT
04
ANNUAL REPORT 2024 PETROLIA SE
05
STATE
MENT
RESPONSIBILITY STATEMENT
STATEMENT OF THE MEMBERS OF THE
BOARD OF DIRECTORS AND OTHER
RESPONSIBLE PERSONS OF PETROLIA
SE FOR THE FINANCIAL STATEMENTS
IN THE ANNUAL REPORT FOR THE YEAR
ENDING 31 DECEMBER 2024
In accordance with Article 9, sections (3)
(c) and (7) of the Cyprus Transparency
Requirements (Securities for Trading on
Regulated Market) Law of 2007 (“Law”),
we, the members of the Board of Directors
and the other responsible persons for the
consolidated and separate financial state
-
ments of Petrolia SE for the year ended 31
December 2024, confirm that, to the best of
our knowledge:
(a) the annual consolidated and separate
financial statements that are presented on
pages 12 to 80:
•
(i) were prepared in accordance with
the International Financial Reporting
Standards as adopted by the European
Union, and in accordance with the pro-
visions of Article 9, section (4), of the
Law; and
•
(ii) give a true and fair view of the assets
and liabilities, the financial position and
the profit or losses of Petrolia SE and
the undertakings included in the consol-
idated accounts taken as a whole; and
(b) the Management Report gives a fair review
of the developments and performance of
the business and the financial position of
Petrolia SE and the undertakings included in
the consolidated accounts taken as a whole
together with a description of the principal
risks and uncertainties that they are facing.
RESPONSIBILITY
STATEMENT
Limassol, 29th of April 2025
Berge Gerdt Larsen
Chair of the Board
Polycarpos Protopapas
Board member
Managing director
Sjur Storaas
Board member
Marios Tornaritis
Finance manager
George Hadjineophytou
Board member
6
MANAGEMENT
06
REPORT
ANNUAL REPORT 2024 PETROLIA SE
07
MANAGEMENT REPORT
INTRODUCTION AND STRATEGY
Petrolia SE Group, which comprises Petrolia
SE (“Petrolia” or the "Company”) and its
subsidiaries (together referred to as the
“Group”) has two business divisions: Energy
and Energy Service. Petrolia SE is listed on
the Oslo Stock Exchange under the ticker
code PSE.
Energy division
The Energy division focuses primarily on
exploration for and production of oil and gas.
Petrolia is the largest shareholder (49.9%) of
Petrolia NOCO AS ("PNO"), an independent
E&P company on the Norwegian Continental
Shelf ("NCS"). The company is a Licence
Partner and Operator and is registered on
NOTC. PNO has various licence shares and
has made one commercial discovery. The ac-
quisition of a 12.26% interest in Brage was
completed on 29 December 2023. Reserves
as at 31 December 2024 were 1.38 million
barrels of oil equivalent ("boe") net to PNO.
Net production to PNO in Q4 2024 was 2,183
boe per day.
Energy Service division
The Energy Service division has since 2007
primarily focused on well services for oil
and gas drilling, mainly through the global
Independent Oil Tools AS Group ("IOT").
Well services are also provided for thermo
and salt drilling.
The Group owns one landrig, drills and per-
forms workover on land wells as a drilling
contractor with this rig and hired in rigs
whenever drilling contracts are secured.
Through CO2 Management AS, the division is
involved with managing CO2 reduction pro-
jects as well as Carbon Capture, Utilisation
and Storage (CCUS) activities.
The subsurface competence of PNO may
be used for CO2 Storage Wells on the NCS.
ANALYSIS OF THE FINANCIAL STATEMENTS
Petrolia SE presents its financial information
in USD.
Financial information, Group
Total revenue amounted to USD 53.5 million for
the fiscal year 2024 (2023: USD 54.2 million),
mainly relating to the Energy Service segment.
Operating profit for the Group in 2024
amounted to USD 5.9 million, after deduc-
tion of depreciation of USD 7.2 million and
impairment of fixed assets of USD 0.8 mil-
lion. Operating profit for the Group in 2023
amounted to USD 5.4 million, after deduction
of depreciation of USD 6.8 million and impair-
ment of fixed assets of USD 0.4 million. Profit
after tax for the Group amounted to USD
3.3 million in 2024 (2023: USD 1.8 million).
As at 31 December 2024, the total assets
of the Group amounted to USD 63.1 million.
Total assets of the Group amounted to USD
66.9 million as at 31 December 2023.
Total equity of the Group amounted to USD
42.6 million as at 31 December 2024, including
a minority interest of USD 1.8 million.
Total equity of the Group amounted to USD
41.1 million as at 31 December 2023, including
a minority interest of USD 2.6 million.
As at 31 December 2024, the total number
of shares outstanding in Petrolia SE was
59,133,786 with par value USD 0.10 each.
Cash inflows from operations was USD 11.5
million in 2024 (2023: USD 11.0 million).
Cash outflows from investments was USD 2.9
million in 2024 (2023: USD 6.2 million). Cash
outflows from financing activities in 2024
was USD 5.9 million (2023: USD 5.8 million)
mainly related to interest, lease interest and
lease instalments.
Total cash position as at 31 December 2024
was USD 13.4 million (2023: USD 10.8 mil-
lion). This included restricted cash of USD
213 thousand (2023: 212 thousand).
Financial information, Parent
Total revenues amounting to USD 162 thou-
sand for 2024 (2023: USD 158 thousand),
related to management (USD 118 thousand)
and consultancy (USD 44 thousand) fees
for the rendering of services to the Group
by the Norwegian branch.
Operating profit for the parent company
amounted to USD 1.6 million (2023: loss
of USD 0.8 million).
Profit after tax for the parent amounted
to USD 6.4 million (2023: loss of USD 8.8
million).
As at 31 December 2024, the total assets of
the Parent amounted to USD 42.6 million of
which investments in subsidiaries were USD
34.7 million, loan assets was USD 5.2 million,
cash at bank was USD 1.7 million, investment
in associates was USD nil and USD 0.7 million
in trade and other receivables.
Total equity of the Parent amounted to USD
40.3 million as at 31 December 2024 (2023:
USD 34.0 million).
As at 31 December 2024, the total number
of shares outstanding in Petrolia SE was
59,133,786, with par value USD 0.10 each.
Cash outflows from operations were USD
0.7 million in 2024 (2023: inflows of USD 1.3
million). Cash inflows from investing were USD
0.8 million (2023: outflows of 1.6 million).
Cash outflows from financing were USD 68
thousand (2023: USD 44 thousand).
Total cash position as at 31 December 2024
was USD 1.8 million (2023: USD 1.8 million).
This included restricted cash of USD 28 thou-
sand (2023: 31 thousand).
FINANCIAL AND LIQUIDITY RISK
The Group’s long-term financing is mainly
financial lease of equipment totalling USD
4.2 million (Note 19).
Additional information on liquidity risk is pre-
sented in Note 23.
GOING CONCERN
Management has conducted a review of the
going concern assumption considering all
relevant information available up to the date
the consolidated and parent financial state-
ments were issued, taking into account all
available information about the future, for
MANAGEMENT REPORT
ANNUAL REPORT 2024 PETROLIA SE
08
MANAGEMENT REPORT
at least 12 months from the reporting date.
The forecast cash flows from the Energy
Service division provide sufficient cash flows
and the Group expects to be in a position to
serve its working capital needs and other
obligations as and when they fall due. These
forecasts have been made based on past
experiences and detailed knowledge of the
local markets.
The Group’s management expects a good
environment for both segments in 2025 and
remains confident in the Group’s ability to
continue to adapt cost levels to the activity
and to maintain sufficient financial resources
to enable it to continue as a going concern
for the foreseeable future.
Following its review, management confirms
that the requirements of the going concern
assumption are met and that these financial
statements have been prepared on that basis.
WORKING ENVIRONMENT AND PERSONNEL
Petrolia SE has five employees, three men
and two women.
In total, the Group had 251 highly competent
employees worldwide as at 31 December
2024. The Group is an equal opportunity
employer and will not tolerate discrimination.
Recruitment, promotion and reward are based
entirely on merit.
There have not been any serious accidents
reported in the Group in 2024.
Petrolia’s Board of Directors consisted of 4
men as at 31 December 2024.
ENVIRONMENT REPORTING
The Group’s objective is that all of its activities
are carried out with the minimum of risk to
people or damage to the surroundings. The
Group’s activities during 2024 have con-
formed with the demands of the prevailing
authorities in its worldwide operations.
The Group is committed to complying with
the requirements set forth by the Corporate
Sustainability Reporting Directive (CSRD)
to the extend possible and in alignment with
the ongoing discussions surrounding the EU
omnibus package and its final transposition
into legislation. Continuous monitoring of
developments in this area will ensure adher-
ence to applicable regulations and support
sustainable business practices.
CORPORATE GOVERNANCE STATEMENT
The Board believes it is important that the
Group is run and managed on sound principles
of Corporate Governance. Reference is made
to the section on Corporate Governance in
this report.
As Petrolia is listed on the Oslo Stock
Exchange, it follows the Norwegian Code of
Practice for Corporate Governance of 14
October 2021.
Significant shareholders are present-
ed in note 17 to the consolidated financial
statements.
As at 31 December 2024 and as at 25 April
2025, the directors who held shares in the
Company are shown in note 17.
There are no restrictions in voting rights
or special control rights in relation to the
shares of the Company.
Any amendment or addition to the Articles
of Association of the Company is only valid if
approved by a special resolution at a share-
holders’ meeting.
The rules governing the composition of the
Board of Directors, appointment and re-
placement of its members and holding of
Company’s shares are set out in Section 8 of
the Corporate Governance Report for 2024.
The powers of the Board of Directors and
its Audit and Remuneration Committees are
also set out in the Corporate Governance
Report in section 9.
The Company, through internal controls im-
plemented by management and supervised by
the Audit Committee, implemented effective
procedures for the composition and prepa-
ration of financial statements and periodic
information, as provided by the Laws and
Regulations of listed companies. In addition
to the above, the main features of these pro-
cedures, are as follows:
•
The financial statements of the Group
companies and the consolidated financial
statements are prepared with the respon-
sibility of the Chief Financial Officer and
reviewed by the Audit Committee.
•
The periodic announcements of the Company
and the detailed explanatory notes are
prepared by the Chief Financial Officer and
reviewed by the Audit Committee.
•
The financial statements and the periodic
announcements are approved by the Board
of Directors prior to their publication.
EXISTENCE OF BRANCHES
To facilitate its operations, the Company has
established a branch in Norway.
CHANGES IN SHARE CAPITAL
There have been no changes to the share
capital during 2024.
BOARD OF DIRECTORS
The members of the Company’s Board of
Directors as at 31 December 2024 and at the
date of this report are Berge Gerdt Larsen,
Sjur Storaas, George Hadjineophytou and
Polycarpos Protopapas.
The Annual General Meeting on 31 May 2024
re-elected Mr Berge Gerdt Larsen, Mr Sjur
Storaas, Mr George Hadjineophytou and
Mr Polycarpos Protopapas as directors of
the Board.
In accordance with the Company’s Articles of
Association, all Directors who are presently
ANNUAL REPORT 2024 PETROLIA SE
members of the Board will continue in office
until the next Annual General Meeting and
are eligible for re-election.
The Directors’ interests in shares of the
Company is disclosed in note 17 of the
financial statements.
INDEPENDENT AUDITOR
The independent auditors of the Company,
Ernst & Young Cyprus Limited, have expressed
their willingness to continue in office. A res-
olution proposing the firm’s re-appointment
and authorising the Directors to set the remu-
neration for audit services will be proposed at
the Annual General Meeting of the Company.
EVENTS AFTER THE REPORTING PERIOD
Please refer to note 29.
09
MANAGEMENT REPORT
Limassol, 29th of April 2025
Berge Gerdt Larsen
Chair of the Board
Polycarpos Protopapas
Board member
Managing director
Sjur Storaas
Board member
Marios Tornaritis
Finance manager
George Hadjineophytou
Board member
10
ANNUAL REPORT 2024 PETROLIA SE
THE BOARD OF DIRECTORS'
REPORT ON CORPORATE SOCIAL
RESPONSIBILITY
In this report, we disclose informa-
tion relating to our CORPORATE SOCIAL
RESPONSIBILITY (‘CSR’) policy and per
-
formance of this policy in 2024. This report
relates to the period 1 January 2024 to 31
December 2024 and should be read as part
of the Company's Annual Report for 2024.
During 2024, the Group had subsidiaries
in Cyprus, Norway, The Netherlands, the
UK, Romania, Australia, New Zealand, Iraq,
Malaysia, and UAE, therefore the majority of
the information in this CSR report relates to
the Group’s operations in these countries.
Our approach to CSR focuses on the way in
which we conduct relationships with all of
our stakeholders and the wider impact that
we can have on society and the environment.
In this context, we continuously address the
following key aspects of our business:
HEALTH & SAFETY
The safety of our employees, contractors,
partners and all of our stakeholders is of
utmost importance to the Group. We aim to
employ high Health & Safety standards to our
operations. All our employees and contractors
have the responsibility and the authority to
stop any unsafe work. Our contracts include
health and safety requirements consistent
with our code of conduct. Our main objective
is that all of our activities are carried out with
the minimum of risk to people or damage to
the environment and our safety and opera-
tional risk team works together to achieve
this objective. Incidents and near misses are
required to be reported and investigated.
We are pleased to report that during 2024,
no incident of pollution to the environment
was reported and the Group conformed with
the safety and environmental demands of
the prevailing authorities in its worldwide
operations. We continued to have an excel
-
lent health and safety record with no major
injuries or fatalities in 2024.
ENVIRONMENT & SUSTAINABILITY
We recognise the potential to damage the
environment through our operations and
our responsibility to implement effective
management to safeguard the environment
by minimising such an impact. We have ca-
pable people to manage such risks at every
stage. We are committed to making a positive
contribution to global sustainability and to
protect the environment. We aim to operate to
the highest international social, environmental
and safety standards within the industry and
believe that it is important to make a positive
contribution to all of the geographical areas
where we operate. Climate change and the
transition to a lower carbon economy has
been identified as a possible risk and an
opportunity but presently does not materially
affect our accounts. Our subsidiary, CO2
Management AS aims to mitigate this risk by
taking steps to reduce the Group’s carbon
footprint and in addition, makes investments
aimed at reducing CO2 emissions, including
Carbon Capture & Storage (CCS).
EMPLOYEES
Our ability to create sustainable shareholder
value is linked to our ability to recruit, moti-
vate and retain highly competent employees.
People continue to be our most important
asset. The Group is an equal opportunities
employer and will not tolerate discrimination
in recruitment, advancement and remuner-
ation in the workplace. We have a shared
commitment with employees to create a safe
working environment where there is respect
for others, and we are responsive to employee
needs. Employees are encouraged to speak up
if they have any concerns through our Whistle
Blowing Policy. Recruitment, promotion and
reward are entirely based on merit. We believe
in shared prosperity and wherever possible,
we employ nationals of our host countries.
COMMUNITY AND HUMAN RIGHTS
Our continuous presence in a number of dif-
ferent territories brings challenges, which we
meet through the application of our existing
approach and policies. We aim to have a pos-
itive and enduring impact on the communities
in which we operate and contribute to their
development. We invest in our relationships
with the local communities and ensure that all
of our activities are conducted with absolute
respect to these communities. We contribute
to these communities by employing local staff
and cooperating with local suppliers wher-
ever possible. We respect internationally
recognised human rights and we set our
commitments in our human rights policy and
our Code of Conduct. All of our initiatives
during 2024 were focused on health and social
involvement across our operating regions.
BUSINESS CONDUCT
CSR encompasses the Company’s manage-
ment of relationships with shareholders,
employees, contractors, partners and the
local communities where we work, together
with the impact it has on society and the
environment. In this respect, we have a re-
sponsibility to ensure that we deliver our
business objectives in a way that benefits
all of our stakeholders. In recognition of
this responsibility, we have robust policies
and systems in place, which are continuously
reviewed. We aim for the highest standards of
business conduct across all of our worldwide
operations. Our CSR policy aims to ensure
a responsible and transparent performance
of our business in all of the areas in which
we operate. It reflects our commitment to
generate and sustain long-term value growth
for the Company, whilst creating long last-
ing legacies in local communities. Operating
to high international social, environmental
and safety standards and maintaining high
standards of corporate governance is a key
requirement of our policy. Our Code of Conduct
ensures that we compete fairly and explicitly
prohibits engaging in any form of bribery or
corruption whilst our Integrity Due Diligence
procedures ensure that we select our busi-
ness partners carefully and do not expose
the Group to any reputational risk with zero
tolerance for unethical business practices.
We also prohibit the use of funds to support
political parties.
CORPORATE GOVERNANCE
We continue to operate with high stand-
ards of corporate governance, which helps
us deliver our strategic objectives. We are
committed to protecting the interests of all
of our stakeholders through complete and
absolute compliance with the relevant legal
and regulatory environments and through
the effective management of risk.
Every effort has been made to ensure that in-
formation contained in this report is accurate.
ANNUAL REPORT 2024 PETROLIA SE
11
FINANCIAL
STATEMENTS
GROUP
12
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS
Petrolia SE – Group
CONSOLIDATED INCOME STATEMENT
for the year ended 31 December 2024
(Amounts in USD 1,000)
Note 2024 2023
Revenue from contracts with customers 5 53,468 54,199
Wages cost 6 -15,257 -14,043
Other operating expenses 7 -24,388 -27,533
Operating result before depreciation and impairments 13,823 12,623
Depreciation 11 -7,192 -6,822
Net impairment of fixed assets 11 -754 -427
Operating result 5,877 5,374
Result from associated companies 12 0 -1,476
Interest income 8 924 510
Financial income 8 80 8
Interest expenses 8 -799 -956
Financial expenses 8 -2,096 -544
Result before income taxes 3,986 2,916
Income tax 9 -709 -1,143
Result for the year 3,277 1,773
Attributable to:
Equity holders of the parent 3,975 2,008
Non-controlling interests -698 -235
Attributable to the equity holders (USD per share)
Earnings per share (Basic and diluted, from continuing operations) 10 0.07 0.03
FINANCIAL STATEMENTS / GROUP
13
ANNUAL REPORT 2024 PETROLIA SE
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
for the year ended 31 December 2024
(Amounts in USD 1,000) Note 2024 2023
Result for the year 3,277 1,773
Other comprehensive income:
Other comprehensive income to be reclassified to profit or loss in subsequent periods
(net of tax):
Exchange differences on translation of foreign operations -729 505
Other comprehensive income that will not be reclassified to profit or loss in subse-
quent periods (net of tax):
Loss on equity instruments designated at fair value through other comprehensive
income
13 -1,004 0
Total comprehensive income for the year, net of tax 1,544 2,278
Attributable to:
Equity holders of the parent 2,390 2,472
Non-controlling interests -846 -194
Total comprehensive income for the year 1,544 2,278
FINANCIAL STATEMENTS / GROUP
14
ANNUAL REPORT 2024 PETROLIA SE
ASSETS (Amounts in USD 1,000) Note 2024 2023
Non-current assets
Goodwill 28 249 249
Right of use assets 11 12,369 15,491
Land and buildings 11 1,499 2,292
Energy Service and other equipment 11 12,865 12,005
Land rigs 11 1,071 1,418
Investment in associated companies 12 0 0
Other financial assets 13 0 1,004
Restricted cash 16 8 3
Total non-current assets 28,061 32,462
Current assets
Inventory 26 1,834 1,683
Trade receivables 14 13,035 14,934
Other current receivables 14 1,488 1,039
Other financial assets 13 5,212 5,920
Financial assets at fair value through profit or loss 15 33 36
Free cash 16 13,184 10,595
Restricted cash 16 205 209
Total current assets 34,991 34,416
TOTAL ASSETS 63,052 66,878
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2024
FINANCIAL STATEMENTS / GROUP
15
ANNUAL REPORT 2024 PETROLIA SE
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2024
EQUITY AND LIABILITIES (Amounts in USD 1,000)
Note 2024 2023
Equity
Share capital 17 5,913 5,913
Own shares 17 -39 -39
Share premium 12,222 12,222
Other reserves 22,728 20,338
Equity attributable to equity holders of the parent 40,824 38,434
Non-controlling interests 1,773 2,619
Total equity 42,597 41,053
Liabilities
Non-current liabilities
Lease liabilities 19 5,372 8,622
Bank loan 21 756 463
Deferred tax liabilities 9 296 564
Other non-current liabilities 213 234
Current liabilities
Lease liabilities 19 4,655 5,573
Trade payables 20 3,217 4,017
Other payables 20 5,455 5,824
Bank loan and overdraft 21 258 199
Income tax payable 233 329
Total liabilities 20,455 25,825
TOTAL EQUITY AND LIABILITIES 63,052 66,878
FINANCIAL STATEMENTS / GROUP
Limassol, 29th of April 2025
Berge Gerdt Larsen
Chair of the Board
Polycarpos Protopapas
Board member
Managing director
Sjur Storaas
Board member
Marios Tornaritis
Finance manager
George Hadjineophytou
Board member
16
ANNUAL REPORT 2024 PETROLIA SE
Attributable to equity holders of the parent
(Amounts in USD 1,000)
Share
capital
Own
shares
Share
premium
Reorgan-
isation
reserve
Retained
earnings
Fair value
reserve
of
financial
assets at
FVOCI
Currency
transla-
tion
Subtotal Non-
con-
trolling
interests
Total
equity
Equity 1 January 2023 5,913 0 12,222 -15,075 31,389 482 1,459 36,390 2,624 39,014
Profit/(loss) for the year 0 0 0 0 2,008 0 0 2,008 -235 1,773
Other comprehensive income
Exchange differences
on translation of foreign
operations
Total comprehensive income/
(loss)
Acquisition of own shares
(Note 17)
Acquisition of non-controlling
interests (Note 28)
Equity 31 December 2023 5,913 -39 12,222 -15,075 33,008 482 1,923 38,434 2,619 41,053
Profit/(loss) for the year 0 0 0 0 3,975 0 0 3,975 -698 3,277
Other comprehensive income
Loss on equity instruments
designated at fair value
through other comprehensive
income (Note 13)
Exchange differences
on translation of foreign
operations
Total comprehensive income/
(loss)
Equity 31 December 2024 5,913 -39 12,222 -15,075 36,983 -522 1,342 40,824 1,773 42,597
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2024
FINANCIAL STATEMENTS / GROUP
17
ANNUAL REPORT 2024 PETROLIA SE
CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2024
FINANCIAL STATEMENTS / GROUP
(Amounts in USD 1,000) Note 2024 2023
Operating activities
Profit before taxes 3,986 2,916
Reversal of expected credit losses 7 -412 -278
Profit on disposal of property, plant and equipment 11 -223 -745
Depreciation of property, plant and equipment and right of use assets 11 7,192 6,822
Impairment of property, plant, equipment 11 754 427
Interest income 8 -924 -510
Change in financial assets at fair value through profit or loss 8 2 16
Interest expense on lease liabilities 8 746 932
Other interest expenses 8 53 24
Change in inventory -151 282
Change in trade receivables 1,899 -3,984
Change in other current receivables -201 1,689
Change in trade payables -800 636
Change in other payables -369 984
Change in other non-current liabilities -21 -39
Result from investment in associated companies 12 0 1,476
Income tax paid -1,158 -1,123
Other, incl unrealised foreign currency gain 1,108 1,502
Net cash generated from operating activities 11,481 11,027
Investing activities
Purchase of fixed assets 11 -4,640 -4,536
Disposal of equipment 11 769 601
Dividends 4 6
Repayment of loans granted 13 0 934
Loan granted 13 0 -2,934
Investment in associates 12 0 -930
Proceeds from sale of shares 15 0 111
Interest received 924 510
Net cash used in investing activities -2,943 -6,238
Financing activities
(Increase)/release of restricted cash -1 28
Leasing instalments (capital) 23 -5,558 -5,193
Other interest paid 8 -53 -24
Interest paid on lease liabilities 19 -746 -932
Bank loan, drawn down 23 633 435
Bank loan, repaid 23 -224 -135
Net cash used in financing activities -5,949 -5,821
Net cash flow of the period 2,589 -1,032
Free cash and cash equivalents at the beginning of the period 16 10,595 11,627
Free cash and cash equivalents balance at 31 December 16 13,184 10,595
18
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FINANCIAL
STATEMENTS
PARENT
PETROLIA SE
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
31 December 2024
2024 2023
Note USD 000 USD 000
Revenue from contracts with customers 8 162 158
Dividend income 23.4 2,856 500
Administration expenses (1,438) (1,443)
Operating profit/(loss) 9 1,580 (785)
Finance income 11 1,036 446
Finance costs 11 (895) (198)
Reversal of impairment/(impairment) on subsidiary companies - net 14 4,642 (7,846)
Impairment charge on investments in associates 15 - (124)
Expected credit losses on loan receivable
23.7
- (250)
Profit/(loss) before tax
6,363 (8,757)
Tax
12
- (5)
Net profit/(loss) for the year
6,363 (8,762)
Total comprehensive income/(loss) for the year
6,363 (8,762)
The notes on pages 5 to 26 form an integral part of these financial statements.
1
55
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS
Petrolia SE - Parent Company - 31 December 2024
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
31 December 2024
2024 2023
Note USD 000 USD 000
Revenue from contracts with customers 8 162 158
Dividend income 23.4 2,856 500
Administration expenses (1,438)
(1,443)
Operating profit/(loss) 9 1,580 (785)
Finance income 11 1,036 446
Finance costs 11 (895) (198)
Reversal of impairment/(impairment) on subsidiary companies - net 14 4,642 (7,846)
Impairment charge on investments in associates 15 - (124)
Expected credit losses on loan receivable
23.7
-
(250)
Profit/(loss) before tax
6,363 (8,757)
Tax
12
-
(5)
Net profit/(loss) for the year
6,363
(8,762)
Total comprehensive income/(loss) for the year
6,363
(8,762)
The notes on pages 5 to 26 form an integral part of these financial statements.
1
56
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
Polycarpos Protopapas
Board member
Managing director
Sjur Storaas
Board member
Marios Tornaritis
Finance manager
George Hadjineophytou
Board member
PETROLIA SE
STATEMENT OF FINANCIAL POSITION
31 December 2024
2024 2023
Note USD 000 USD 000
ASSETS
Non-current assets
Property, plant and equipment 13 1 2
Right-of-use assets 19 129 194
Investments in subsidiaries 14 34,716 30,074
Investments in associates
15
-
-
34,846 30,270
Current assets
Trade and other receivables
17 722 842
Loans receivable from associate 16 5,212 5,920
Restricted cash 18 28 31
Cash at bank
20
1,746
1,733
7,708 8,526
Total assets 42,554 38,796
EQUITY AND LIABILITIES
Equity
Share capital 21 5,913 5,913
Share premium 12,222 12,222
Distributable reserve 67,093 67,093
Accumulated losses (44,881)
(51,244)
Total equity
40,347
33,984
Non-current liabilities
Lease liabilities
19
65
120
65 120
Current liabilities
Trade and other payables
22 2,080 4,618
Lease liabilities
19
62
74
2,142 4,692
Total liabilities 2,207 4,812
Total equity and liabilities 42,554 38,796
On 29 April 2025 the Board of Directors of Petrolia SE authorised these financial statements for issue.
Polycarpos Protopapas Sjur Storaas Berge Gerdt Larsen George Hadjineophytou Marios Tornaritis
Board Member Board Member Chairman of the Board Board Member Finance Manager
Managing Director
The notes on pages 5 to 26 form an integral part of these financial statements.
2
Berge Gerdt Larsen
Chair of the Board
PETROLIA SE
STATEMENT OF CHANGES IN EQUITY
31 December 2024
The notes on pages 5 to 26 form an integral part of these financial statements.
3
Share capital Share premium Merger reserve
Distributable
reserve
Accumulated
losses Total
Note USD 000 USD 000 USD 000 USD 000 USD 000 USD 000
Balance at 1 January 2023 5,913 12,222 67,093 (42,483) 42,745
Comprehensive income
Loss for the year / Total
comprehensive loss for the year - - - - (8,761) (8,761)
5,913 12,222 67,093 (51,244) 33,984
Transactions with owners
Transfer between reserves
(1) - - (67,093) 67,093 - -
Balance at 31 December
2023/ 1 January 2024 5,913 12,222 - 67,093 (51,244) 33,984
Comprehensive income
Profit for the year / Total
comprehensive income for the
year - - - - 6,363 6,363
Balance at 31 December
2024 5,913 12,222 - 67,093 (44,881) 40,347
Share capital Share premium Merger reserve
Distributable
reserve
Accumulated
losses Total
Note USD 000 USD 000 USD 000 USD 000 USD 000 USD 000
Balance at 1 January 2023 5,913 12,222 67,093 (42,483) 42,745
Comprehensive income
Loss for the year / Total
comprehensive loss for the year - - - - (8,761) (8,761)
5,913 12,222 67,093 (51,244) 33,984
Transactions with owners
Transfer between reserves
(1) - - (67,093) 67,093 - -
Balance at 31 December
2023/ 1 January 2024 5,913 12,222 - 67,093 (51,244) 33,984
Comprehensive income
Profit for the year / Total
comprehensive income for the
year - - - - 6,363 6,363
Balance at 31 December
2024 5,913 12,222 - 67,093 (44,881) 40,347
By a Court Order dated 30/06/2023 sanctioning the shareholder's special resolution dated 31/05/2023 the Merger reserve
of USD 67,093,489.64 was reduced to USD 0, and the said reduction was effected by crediting the reduction amount of
USD 67,093,489.64 to a distributable reserve of the Company. The distributable reserve shall be available to the Directors
of the Company to treat as they deem fit in their absolute discretion.
1)
57
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
STATEMENT OF FINANCIAL POSITION
31 December 2024
2024 2023
Note USD 000 USD 000
ASSETS
Non-current assets
Property, plant and equipment 13 1 2
Right-of-use assets 19 129 194
Investments in subsidiaries 14 34,716 30,074
Investments in associates
15
- -
34,846 30,270
Current assets
Trade and other receivables
17 722 842
Loans receivable from associate 16 5,212 5,920
Restricted cash 18 28 31
Cash at bank
20
1,746 1,733
7,708 8,526
Total assets 42,554 38,796
EQUITY AND LIABILITIES
Equity
Share capital 21 5,913 5,913
Share premium 12,222 12,222
Distributable reserve 67,093 67,093
Accumulated losses (44,881) (51,244)
Total equity
40,347 33,984
Non-current liabilities
Lease liabilities
19
65 120
65 120
Current liabilities
Trade and other payables
22 2,080 4,618
Lease liabilities
19
62 74
2,142 4,692
Total liabilities 2,207 4,812
Total equity and liabilities 42,554 38,796
On 29 April 2025 the Board of Directors of Petrolia SE authorised these financial statements for issue.
Polycarpos Protopapas Sjur Storaas Berge Gerdt Larsen George Hadjineophytou Marios Tornaritis
Board Member Board Member Chairman of the Board Board Member Finance Manager
Managing Director
The notes on pages 5 to 26 form an integral part of these financial statements.
2
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
STATEMENT OF CHANGES IN EQUITY
31 December 2024
The notes on pages 5 to 26 form an integral part of these financial statements.
3
Share capital Share premium Merger reserve
Distributable
reserve
Accumulated
losses Total
Note USD 000 USD 000 USD 000 USD 000 USD 000 USD 000
Balance at 1 January 2023 5,913 12,222 67,093 (42,483) 42,745
Comprehensive income
Loss for the year / Total
comprehensive loss for the year -
- - - (8,761) (8,761)
5,913 12,222 67,093 (51,244) 33,984
Transactions with owners
Transfer between reserves
(1) - - (67,093) 67,093 - -
Balance at 31 December
2023/ 1 January 2024 5,913 12,222 - 67,093 (51,244) 33,984
Comprehensive income
Profit for the year / Total
comprehensive income for the
year -
- - - 6,363 6,363
Balance at 31 December
2024 5,913
12,222 - 67,093 (44,881) 40,347
Share capital Share premium Merger reserve
Distributable
reserve
Accumulated
losses Total
Note USD 000 USD 000 USD 000 USD 000 USD 000 USD 000
Balance at 1 January 2023 5,913 12,222 67,093 (42,483) 42,745
Comprehensive income
Loss for the year / Total
comprehensive loss for the year -
- - - (8,761) (8,761)
5,913 12,222 67,093 (51,244) 33,984
Transactions with owners
Transfer between reserves
(1) - - (67,093) 67,093 - -
Balance at 31 December
2023/ 1 January 2024 5,913 12,222 - 67,093 (51,244) 33,984
Comprehensive income
Profit for the year / Total
comprehensive income for the
year -
- - - 6,363 6,363
Balance at 31 December
2024 5,913
12,222 - 67,093 (44,881) 40,347
By a Court Order dated 30/06/2023 sanctioning the shareholder's special resolution dated 31/05/2023 the Merger reserve
of USD 67,093,489.64 was reduced to USD 0, and the said reduction was effected by crediting the reduction amount of
USD 67,093,489.64 to a distributable reserve of the Company. The distributable reserve shall be available to the Directors
of the Company to treat as they deem fit in their absolute discretion.
1)
58
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
STATEMENT OF CASH FLOWS
31 December 2024
2024 2023
Note USD 000 USD 000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before tax 6,363 (8,757)
Adjustments for:
Depreciation of property, plant and equipment 13 1 -
Depreciation of right-of-use assets 19 - 68
Net exchange loss 958 178
Impairment charge - investments in associates 15 - 124
(Reversal of impairment)/impairment - investment in subsidiaries 14 (4,642) 7,846
Expected credit losses on loan receivable 16 - 250
Reversal of expected credit loss on receivables from related parties 23.5 (228) -
Dividend income 23.4 (2,856) (500)
Interest income 11 (732) (369)
Financial Guarantee income
11
(76)
-
(1,212) (1,160)
Changes in working capital:
Decrease/(increase) in trade and other receivables 120 (48)
(Decrease)/increase in trade and other payables (2,461)
2,109
(3,553) 901
Dividends received 2,856 500
Tax paid
- (59)
Net cash (used in)/generated from operating activities
(697)
1,342
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for purchase of computer hardware 13 - (1)
Loans granted 16 - (2,934)
Loans repayments received 16 - 927
Interest received 16 764 390
Financial guarantee
22
14
-
Net cash generated from/(used in) investing activities
778
(1,618)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of leases liabilities capital 19 (63) (68)
Payments of leases liabilities interest 19 (8) -
Decrease in restricted cash 3
24
Net cash used in financing activities
(68)
(44)
Net increase/(decrease) in cash and cash equivalents 13 (320)
Cash and cash equivalents at beginning of the year 1,733
2,053
Cash and cash equivalents at end of the year
20
1,746 1,733
The notes on pages 5 to 26 form an integral part of these financial statements.
4
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
1. Incorporation and principal activities
Country of incorporation
Petrolia SE (the ''Company'') was incorporated in Cyprus on 9 August 2011 as a limited liability company under the
Cyprus Companies Law, Cap. 113. Its registered office is at Christodoulou Chatzipavlou 205, Louloupis court, 4th
Floor, Office 401, 3036, Limassol, Cyprus.
On 17 November 2011, the Company changed its name from Petrolia E&P Holdings Limited to Petrolia E&P Holdings
Plc. Following a shareholders’ plan to re-domicile to Cyprus that was approved on 30 December 2011, Petrolia ASA
merged (“cross-border merger”) with Petrolia E&P Holdings Plc (“surviving entity”) and the latter was at the same
time converted into a European public company limited by shares (“Societas Europaea” or “SE”) in accordance with
Article 2 no. 1 of the European Council Regulation no. 2157/2001 (the “SE Regulation”) and Section 5 of the
Norwegian Act on European Companies of 1 April 2005 (the “SE Act”).
Following the completion of the cross-border merger on 26 October 2012 and the creation of Petrolia E&P Holdings
SE, the Company on 28 January 2013 changed its name to Petrolia SE.
The Company’s shares are listed on the Oslo Stock Exchange (Ticker: “PSE”). On 21 September 2018, the Company
changed its ticker name from ''PDR'' to ''PSE''.
Principal activities
The principal activities of the Company, which are unchanged from prior year, are the financing of group companies
and the holding of investments in subsidiaries and associates engaged in two business segments: Energy and Energy
Service. The core activities of the Company include the holding in a subsidiary company (Petrolia AS), which is a well
established international oil service company. The Company has established a branch (Petrolia NUF) in Norway in
order to facilitate its operations.
Environment and sustainability
The Company recognises the potential to damage the environment through its operations and its responsibility to
implement effective management to safeguard the environment by minimising such an impact and has capable
people to manage such risks at every stage. CO2 emissions from its activities receive the greatest attention. The
Company is committed to making a positive contribution to global sustainability and to protect the environment. The
Company aims to operate to the highest international social, environmental and safety standards within the industry
and believes that it is important to make a positive contribution to all of the geographical areas where it operates.
Climate change and the transition to a lower carbon economy has been identified as a possible risk and a opportunity
but presently does not affect the Company's accounts.
The Company's objective is that all of its activities are carried out with minimum risk to people or damage to the
surroundings. The Company’s activities have conformed with the demands of the prevailing authorities in its
worldwide operations regarding the pollution of the environment.
2. Basis of preparation
These parent company financial statements have been prepared in accordance with IFRS Accounting Standards as
adopted by the European Union and the requirements of the Cyprus Companies Law, Cap.113. The financial
statements have been prepared under the historical cost convention. The notes to the consolidated financial
statements provide additional information to the parent company financial statements. The accounting policies
applied to the Group accounts have also been applied to the parent company, Petrolia SE. The parent company
financial statements should be read in conjunction with the consolidated financial statements. Investments in
subsidiaries and associates are carried at cost less impairment in these separate financial statements. In case of
impairment, the investment is written down to its recoverable amount. The Company’s functional currency is US
dollars (USD) and the financial statements are presented in USD, rounded to the nearest thousand.
These parent company financial statements include the stand-alone results and position of the Company including its
Norwegian registered branch, Petrolia NUF.
5
59
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
STATEMENT OF CASH FLOWS
31 December 2024
2024 2023
Note USD 000 USD 000
CASH FLOWS FROM OPERATING ACTIVITIES
Profit/(loss) before tax 6,363 (8,757)
Adjustments for:
Depreciation of property, plant and equipment 13 1 -
Depreciation of right-of-use assets 19 - 68
Net exchange loss 958 178
Impairment charge - investments in associates 15 - 124
(Reversal of impairment)/impairment - investment in subsidiaries 14 (4,642) 7,846
Expected credit losses on loan receivable 16 - 250
Reversal of expected credit loss on receivables from related parties 23.5 (228) -
Dividend income 23.4 (2,856) (500)
Interest income 11 (732) (369)
Financial Guarantee income
11
(76) -
(1,212) (1,160)
Changes in working capital:
Decrease/(increase) in trade and other receivables 120 (48)
(Decrease)/increase in trade and other payables (2,461) 2,109
(3,553) 901
Dividends received 2,856 500
Tax paid
- (59)
Net cash (used in)/generated from operating activities
(697) 1,342
CASH FLOWS FROM INVESTING ACTIVITIES
Payment for purchase of computer hardware 13 - (1)
Loans granted 16 - (2,934)
Loans repayments received 16 - 927
Interest received 16 764 390
Financial guarantee
22
14 -
Net cash generated from/(used in) investing activities
778 (1,618)
CASH FLOWS FROM FINANCING ACTIVITIES
Payments of leases liabilities capital 19 (63) (68)
Payments of leases liabilities interest 19 (8) -
Decrease in restricted cash 3 24
Net cash used in financing activities
(68) (44)
Net increase/(decrease) in cash and cash equivalents 13 (320)
Cash and cash equivalents at beginning of the year 1,733 2,053
Cash and cash equivalents at end of the year
20
1,746 1,733
The notes on pages 5 to 26 form an integral part of these financial statements.
4
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
1. Incorporation and principal activities
Country of incorporation
Petrolia SE (the ''Company'') was incorporated in Cyprus on 9 August 2011 as a limited liability company under the
Cyprus Companies Law, Cap. 113. Its registered office is at Christodoulou Chatzipavlou 205, Louloupis court, 4th
Floor, Office 401, 3036, Limassol, Cyprus.
On 17 November 2011, the Company changed its name from Petrolia E&P Holdings Limited to Petrolia E&P Holdings
Plc. Following a shareholders’ plan to re-domicile to Cyprus that was approved on 30 December 2011, Petrolia ASA
merged (“cross-border merger”) with Petrolia E&P Holdings Plc (“surviving entity”) and the latter was at the same
time converted into a European public company limited by shares (“Societas Europaea” or “SE”) in accordance with
Article 2 no. 1 of the European Council Regulation no. 2157/2001 (the “SE Regulation”) and Section 5 of the
Norwegian Act on European Companies of 1 April 2005 (the “SE Act”).
Following the completion of the cross-border merger on 26 October 2012 and the creation of Petrolia E&P Holdings
SE, the Company on 28 January 2013 changed its name to Petrolia SE.
The Company’s shares are listed on the Oslo Stock Exchange (Ticker: “PSE”). On 21 September 2018, the Company
changed its ticker name from ''PDR'' to ''PSE''.
Principal activities
The principal activities of the Company, which are unchanged from prior year, are the financing of group companies
and the holding of investments in subsidiaries and associates engaged in two business segments: Energy and Energy
Service. The core activities of the Company include the holding in a subsidiary company (Petrolia AS), which is a well
established international oil service company. The Company has established a branch (Petrolia NUF) in Norway in
order to facilitate its operations.
Environment and sustainability
The Company recognises the potential to damage the environment through its operations and its responsibility to
implement effective management to safeguard the environment by minimising such an impact and has capable
people to manage such risks at every stage. CO2 emissions from its activities receive the greatest attention. The
Company is committed to making a positive contribution to global sustainability and to protect the environment. The
Company aims to operate to the highest international social, environmental and safety standards within the industry
and believes that it is important to make a positive contribution to all of the geographical areas where it operates.
Climate change and the transition to a lower carbon economy has been identified as a possible risk and a opportunity
but presently does not affect the Company's accounts.
The Company's objective is that all of its activities are carried out with minimum risk to people or damage to the
surroundings. The Company’s activities have conformed with the demands of the prevailing authorities in its
worldwide operations regarding the pollution of the environment.
2. Basis of preparation
These parent company financial statements have been prepared in accordance with IFRS Accounting Standards as
adopted by the European Union and the requirements of the Cyprus Companies Law, Cap.113. The financial
statements have been prepared under the historical cost convention. The notes to the consolidated financial
statements provide additional information to the parent company financial statements. The accounting policies
applied to the Group accounts have also been applied to the parent company, Petrolia SE. The parent company
financial statements should be read in conjunction with the consolidated financial statements. Investments in
subsidiaries and associates are carried at cost less impairment in these separate financial statements. In case of
impairment, the investment is written down to its recoverable amount. The Company’s functional currency is US
dollars (USD) and the financial statements are presented in USD, rounded to the nearest thousand.
These parent company financial statements include the stand-alone results and position of the Company including its
Norwegian registered branch, Petrolia NUF.
5
FINANCIAL STATEMENTS / PARENT
60
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
3. Adoption of new or revised standards and interpretations
During the current year the Company adopted all the new and revised IFRS Accounting Standards that are relevant
to its operations and are effective for accounting periods beginning on 1 January 2024.
IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024, and are applied
retrospectively. The objective of the amendments is to clarify the principles in IAS 1 for the classification of liabilities
as either current or non-current. The amendments clarify the meaning of a right to defer settlement, the requirement
for this right to exist at the end of the reporting period, that management intent does not affect current or non-
current classification, that options by the counterparty that could result in settlement by the transfer of the entity’s
own equity instruments do not affect current or non-current classification. Also, the amendments specify that only
covenants with which an entity must comply on or before the reporting date will affect a liability’s classification.
Additional disclosures are also required for non-current liabilities arising from loan arrangements that are subject to
covenants to be complied within twelve months after the reporting period. The amendments had no impact on the
Company’s financial statements.
IFRS 16 Leases: Lease Liability in a Sale and Leaseback (Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The amendments
are intended to improve the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and
leaseback transaction in IFRS 16, while it does not change the accounting for leases unrelated to sale and leaseback
transactions. Under the amendments, the seller-lessee determines ‘lease payments’ or ‘revised lease payments’ in
such a way that the seller-lessee would not recognise any amount of the gain or loss that relates to the right of use it
retains. Applying these requirements does not prevent the seller-lessee from recognising, in profit or loss, any gain or
loss relating to the partial or full termination of a lease. The amendments apply retrospectively to sale and leaseback
transactions entered into after the date of initial application, being the beginning of the annual reporting period in
which an entity first applied IFRS 16. The amendments had no impact on the Company’s financial statements.
IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments Disclosures - Supplier Finance Arrangements
(Amendments)
The amendments are effective for annual reporting periods beginning on or after January 1, 2024. The amendments
supplement requirements already in IFRS and require an entity to disclose the terms and conditions of supplier
finance arrangements. Additionally, entities are required to disclose at the beginning and end of reporting period the
carrying amounts of supplier finance arrangement financial liabilities and the line items in which those liabilities are
presented as well as the carrying amounts of financial liabilities and line items, for which the finance providers have
already settled the corresponding trade payables. Entities should also disclose the type and effect of non-cash
changes in the carrying amounts of supplier finance arrangement financial liabilities, which prevent the carrying
amounts of the financial liabilities from being comparable. Furthermore, the amendments require an entity to disclose
at the beginning and end of the reporting period the range of payment due dates for financial liabilities owed to the
finance providers and for comparable trade payables that are not part of those arrangements. The amendments had
no impact on the Company’s financial statements.
4. Material accounting policies
The material accounting policies adopted in the preparation of these financial statements are set out below. These
policies have been consistently applied to all years presented in these financial statements unless otherwise stated.
Subsidiary companies
Investments in subsidiary companies are stated at cost less provision for impairment in value, which is recognised as
an expense in the period in which the impairment is identified.
6
61
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Associates
Associates are all entities over which the Company has significant influence but not control, generally accompanying
a shareholding of between 20% and 50% of the voting rights. Significant influence is the power to participate in the
financial and operating policy decisions of the investee without the power to control or jointly control those policies.
Investments in associated undertakings are stated at cost less provision for impairment in value, which is recognised
as an expense in the period in which the impairment is identified.
Impairment of non-financial assets
Assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment.
These assets include Investments in subsidiaries and associates which are the main assets of the Company. Assets
that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate
that the carrying amount may not be recoverable. An impairment loss is recognised at the amount by which the
asset's carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair
value, less selling costs and value in use. For the purposes of assessing impairment, assets are grouped at the lowest
levels for which there are separately identifiable cash flows (cash generating units). Non financial assets, other than
goodwill that suffered impairment, are reviewed for possible reversal of the impairment at each reporting date.
Revenue
Recognition and measurement
Revenue shall be recognised in such a way to depict the transfer of services to customers and reflect the
consideration that the entity expects to be entitled to in exchange for transferring those services to the customer; the
transaction price.
Revenue from contracts with customers is recognised when control of the services are transferred to the customer at
an amount that reflects the consideration to which the Company expects to be entitled in exchange for those
services.
Identification of performance obligations
The Company assesses whether contracts that involve the provision of a range of services contain one or more
performance obligations (that is, distinct promises to provide a service) and allocates the transaction price to each
performance obligation identified on the basis of its stand-alone selling price. A service that is promised to a
customer is distinct if the customer can benefit from the service, either on its own or together with other resources
that are readily available to the customer (that is the service is capable of being distinct) and the Company's promise
to transfer the service to the customer is separately identifiable from other promises in the contract (that is, the
service is distinct within the context of the contract).
Management and consultancy fees
Revenue from rendering of services is recognised over time while the Company satisfies its performance
obligation by transferring control over the promised service to the customer in the accounting period inwhich
the services are rendered. For fixed price contracts, revenue is recognised based on the actual service
provided to the end of the reporting period as a proportion of the total services to be provided because the
customer receives and uses the benefits simultaneously. This is determined based on the annual or monthly
fee under contract and the period for which the Company has provided services to subsidiaries, group
subsidiaries and associate company.
7
62
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Dividend income
Dividends are received from investments in subsidiaries and associates. Dividends are recognised as dividend income
in profit or loss when the right to receive payment is established.
Dividend income for the year includes group contributions received from subsidiaries of the Company based on
Norwegian group contributions rules, which under IFRS are assessed by the Company to be treated similar to
dividends and are recognised in the period these are approved by the subsidiaries’ general meetings.
Employee benefits
The Company and its employees contribute to the Government Social Insurance Fund based on employees' salaries.
The Company's contributions are expensed as incurred and are included in staff costs. The Company has no legal or
constructive obligations to pay further contributions if the scheme does not hold sufficient assets to pay all
employees benefits relating to employee service in the current and prior periods.
Finance income
Interest income is recognised on a time-proportion basis using the effective interest rate method.
Finance costs
Interest expense and other borrowing costs are charged to profit or loss as incurred.
Foreign currency translation
(1) Functional and presentation currency
Items included in the Company's financial statements are measured using the currency of the primary
economic environment in which the entity operates ('the functional currency'). The financial statements are
presented in United States Dollars (USD 000), which is the Company's functional and presentation currency.
(2) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
Tax
Current tax liabilities and assets are measured at the amount expected to be paid to or recovered from the taxation
authorities, using the tax rates and laws that have been enacted, or substantively enacted, by the reporting date.
Leasing
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as lessee
The Company applies a single recognition and measurement approach for all leases, except for short term leases and
leases of low value assets. The Company recognises lease liabilities to make lease payments and right of use assets
representing the right to use the underlying assets.
8
63
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Dividend income
Dividends are received from investments in subsidiaries and associates. Dividends are recognised as dividend income
in profit or loss when the right to receive payment is established.
Dividend income for the year includes group contributions received from subsidiaries of the Company based on
Norwegian group contributions rules, which under IFRS are assessed by the Company to be treated similar to
dividends and are recognised in the period these are approved by the subsidiaries’ general meetings.
Employee benefits
The Company and its employees contribute to the Government Social Insurance Fund based on employees' salaries.
The Company's contributions are expensed as incurred and are included in staff costs. The Company has no legal or
constructive obligations to pay further contributions if the scheme does not hold sufficient assets to pay all
employees benefits relating to employee service in the current and prior periods.
Finance income
Interest income is recognised on a time-proportion basis using the effective interest rate method.
Finance costs
Interest expense and other borrowing costs are charged to profit or loss as incurred.
Foreign currency translation
(1) Functional and presentation currency
Items included in the Company's financial statements are measured using the currency of the primary
economic environment in which the entity operates ('the functional currency'). The financial statements are
presented in United States Dollars (USD 000), which is the Company's functional and presentation currency.
(2) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such
transactions and from the translation at year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
Tax
Current tax liabilities and assets are measured at the amount expected to be paid to or recovered from the taxation
authorities, using the tax rates and laws that have been enacted, or substantively enacted, by the reporting date.
Leasing
The Company assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Company as lessee
The Company applies a single recognition and measurement approach for all leases, except for short term leases and
leases of low value assets. The Company recognises lease liabilities to make lease payments and right of use assets
representing the right to use the underlying assets.
8
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Leasing (continued)
Right of use assets
The Company recognises right of use assets at the commencement date of the lease (i.e. the date the underlying
asset is available for use). Right of use assets are measured at cost, less any accumulated depreciation and
impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right of use assets includes
the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the
commencement date less any lease incentives received.
Right of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated
useful lives of the assets, in accordance with the depreciation accounting policy on property, plant and equipment.
The estimated useful lives of buildings is 33 years from the date of construction. The right of use assets are also
subject to impairment testing in the same manner as other non-financial assets.
Lease liabilities
At the commencement date of the lease, the Company recognises lease liabilities measured at the present value of
lease payments to be made over the lease term i.e the non-cancellable period of the lease including reasonably
certain to exercise extension or termination options.
In calculating the present value of lease payments, the Company uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease
payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change
in the lease term, a change in the in substance fixed lease payments or a change in the assessment to purchase the
underlying asset.
Short term leases and leases of low value assets
The Company applies the short-term lease recognition exemption (i.e. those leases that have a lease term of 12
months or less from the commencement date and do not contain a purchase option). It also applies the low value
lease recognition exemption in respect of miscellaneous assets. Lease payments on short term and low value leases
are recognised as expense on a straight-line basis over the lease term.
The Company does not act as a lessor in any transaction.
Financial instruments
(i) Financial assets
Financial assets are classified, at initial recognition, as subsequently measured at amortised cost, fair value through
OCI and fair value through the income statement. The classification of financial assets at initial recognition depends
on the financial asset’s contractual cash flow characteristics and the Company’s business model for managing them.
With the exception of trade receivables that do not contain a significant financing component or for which the
Company has applied the practical expedient, the Company initially measures a financial asset at its fair value plus, in
the case of a financial asset not at fair value through profit or loss, transaction costs. Trade receivables that do not
contain a significant financing component are measured at the transaction price determined under IFRS 15.
Financial assets at amortised cost (debt instruments)
This category is most relevant to the Company. The Company measures financial assets at amortised cost if both of
the following conditions are met:
- The financial asset is held within a business model with the objective to hold financial assets in order to collect
contractual cash flows.
And
- The contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
9
64
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Financial assets (continued)
(i) Financial assets (continued)
Financial assets at amortised cost are initially measured at fair value and are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when
the asset is derecognised, modified or impaired.
The Company’s financial assets at amortised cost includes trade and other receivables, cash at bank and loans
receivable.
Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results
from default events possible within the next 12 months or until contractual maturity, if shorter (''12 Months ECL''). If
the Company identifies a significant increase in credit risk (''SICR'') since initial recognition, the asset is transferred to
Stage 2 and its ECL is measured based on ECL on a lifetime basis, that is, up until contractual maturity but
considering expected prepayments, if any (''Lifetime ECL''). Refer to note 6, Credit risk section, for a description of
how the Company determines when a SICR has occurred. If the Company determines that a financial asset is credit
impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL. The Company's definition of
credit impaired assets and definition of default is explained in note 6, Credit risk section.
Additionally the Company has decided to use the low credit risk assessment exemption for investment grade financial
assets. Refer to note 6, Credit risk section for a description of how the Company determines low credit risk financial
assets.
Financial assets - Impairment - credit loss allowance for ECL
The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the
original effective interest rate.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible
within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The Company applies the simplified approach for trade and other receivables and general approach for bank deposits
in relation to the calculation of ECLs. In particular for trade and other receivables that are due within twelve months,
the 12 month ECLs are the same as the lifetime ECLs. By using the simplified approach, the Company does not track
changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. In
relation to trade and other receivables, in order to measure the expected credit losses, the Company measured the
historical loss rates based on the payment profiles of revenue, the historical loss rates are adjusted to reflect forward
looking factors specific to the receivables and the economic environment affecting the ability of the customers to
settle the receivables.
In relation to the loans due from related parties and amounts receivable from related parties, management has
completed some high level analysis, which considers both historical and forward looking qualitative and quantitative
information, to determine if a related party loan and balance is low credit risk at 31 December 2024. Management
has considered the financial performance and financial position as well as the remaining term of the loans, and
whether the related parties will have sufficient cash throughout that period to meet all of their working capital and
other obligations, including repayment of the related party balances. Management does not expect that there will be
adverse changes in economic and business conditions during that period. Consequently, management has
determined that the loans and amounts receivable from related parties, are low credit risk, falls within ‘stage 1’ of
IFRS 9’s impairment model, and 12 month expected credit losses can be calculated.
10
65
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Financial assets (continued)
(i) Financial assets (continued)
Financial assets at amortised cost are initially measured at fair value and are subsequently measured using the
effective interest (EIR) method and are subject to impairment. Gains and losses are recognised in profit or loss when
the asset is derecognised, modified or impaired.
The Company’s financial assets at amortised cost includes trade and other receivables, cash at bank and loans
receivable.
Financial assets in Stage 1 have their ECL measured at an amount equal to the portion of lifetime ECL that results
from default events possible within the next 12 months or until contractual maturity, if shorter (''12 Months ECL''). If
the Company identifies a significant increase in credit risk (''SICR'') since initial recognition, the asset is transferred to
Stage 2 and its ECL is measured based on ECL on a lifetime basis, that is, up until contractual maturity but
considering expected prepayments, if any (''Lifetime ECL''). Refer to note 6, Credit risk section, for a description of
how the Company determines when a SICR has occurred. If the Company determines that a financial asset is credit
impaired, the asset is transferred to Stage 3 and its ECL is measured as a Lifetime ECL. The Company's definition of
credit impaired assets and definition of default is explained in note 6, Credit risk section.
Additionally the Company has decided to use the low credit risk assessment exemption for investment grade financial
assets. Refer to note 6, Credit risk section for a description of how the Company determines low credit risk financial
assets.
Financial assets - Impairment - credit loss allowance for ECL
The Company recognises an allowance for expected credit losses (ECLs) for all debt instruments not held at fair value
through profit or loss. ECLs are based on the difference between the contractual cash flows due in accordance with
the contract and all the cash flows that the Company expects to receive, discounted at an approximation of the
original effective interest rate.
ECLs are recognised in two stages. For credit exposures for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit losses that result from default events that are possible
within the next 12-months (a 12-month ECL). For those credit exposures for which there has been a significant
increase in credit risk since initial recognition, a loss allowance is required for credit losses expected over the
remaining life of the exposure, irrespective of the timing of the default (a lifetime ECL).
The Company applies the simplified approach for trade and other receivables and general approach for bank deposits
in relation to the calculation of ECLs. In particular for trade and other receivables that are due within twelve months,
the 12 month ECLs are the same as the lifetime ECLs. By using the simplified approach, the Company does not track
changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. In
relation to trade and other receivables, in order to measure the expected credit losses, the Company measured the
historical loss rates based on the payment profiles of revenue, the historical loss rates are adjusted to reflect forward
looking factors specific to the receivables and the economic environment affecting the ability of the customers to
settle the receivables.
In relation to the loans due from related parties and amounts receivable from related parties, management has
completed some high level analysis, which considers both historical and forward looking qualitative and quantitative
information, to determine if a related party loan and balance is low credit risk at 31 December 2024. Management
has considered the financial performance and financial position as well as the remaining term of the loans, and
whether the related parties will have sufficient cash throughout that period to meet all of their working capital and
other obligations, including repayment of the related party balances. Management does not expect that there will be
adverse changes in economic and business conditions during that period. Consequently, management has
determined that the loans and amounts receivable from related parties, are low credit risk, falls within ‘stage 1’ of
IFRS 9’s impairment model, and 12 month expected credit losses can be calculated.
10
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Financial assets (continued)
(i) Financial assets (continued)
The Company considers a financial asset in default when contractual payments are 90 days past due. However, in
certain cases, the Company may also consider a financial asset to be in default when internal or external information
indicates that the Company is unlikely to receive the outstanding contractual amounts in full before taking into
account any credit enhancements held by the Company. A financial asset is written off when there is no reasonable
expectation of recovering the contractual cash flows.
Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise cash at bank.
Financial guarantee contracts
Financial guarantee contracts are contracts that require the Company to make specified payments to reimburse the
holder of the guarantee for a loss it incurs because a specified debtor fails to make payment when due in accordance
with the terms of debt instrument. Such financial guarantees are given to banks, financial institutions and others on
behalf of a counterparty to secure loans, overdrafts and other banking facilities.
Financial guarantees are recognised as a financial liability at the time the guarantee is issued.
Financial guarantees are initially recognised at their fair value, which is normally evidenced by the amount of fees
received. This amount is amortised on a straight line basis over the life of the guarantee in other income in profit or
loss.
Financial guarantees are subsequently measured at the higher of (i) the amount determined in accordance with the
expected credit loss model under IFRS 9 ''Financial Instruments'', and (ii) the amount initially recognised less, where
appropriate, the cumulative amount of income recognised in accordance with the principles of IFRS 15 ''Revenue
from Contracts with customers''.
(ii) Financial liabilities
The Company’s financial liabilities include trade and other payables and borrowings which are initially measured at
fair value and are subsequently measured at amortised cost.
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a result of past events,
it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the
amount can be made. Where the Company expects a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain.
Non-current liabilities
Non-current liabilities represent amounts that are due more than twelve months from the reporting date.
Climate-related matters
The Company considers climate-related matters in estimates and assumptions, mostly related to its investments in
subsidiaries and associates. Even though the Company believes its subsidiaries will not be significantly affected by the
transition to a low-carbon economy, climate-related matters increase the uncertainty in estimates and assumptions
underpinning their valuation. Even though climate-related risks might not currently have a significant impact on
measurement, the Company is closely monitoring relevant changes and developments, such as new climate-related
legislation. Refer also to note 7.
11
66
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Share capital
Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the
Company and the nominal value of the share capital being issued is taken to the share premium account.
Comparatives
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.
5. New accounting pronouncements
At the date of approval of these financial statements, standards and interpretations were issued by the International
Accounting Standards Board which were not yet effective. Some of them were adopted by the European Union and
others not yet. The Board of Directors expects that the adoption of these accounting standards in future periods will
not have a material effect on the financial statements of the Company, apart from IFRS18 that its impact will be
assessed upon becoming effective.
6. Financial risk management
Financial risk factors
The Company is exposed to credit risk, liquidity risk, currency risk and capital risk management arising from the
financial instruments it holds. The risk management policies employed by the Company to manage these risks are
discussed below:
6.1 Credit risk
The Company is primarily exposed to credit risk related to receivables from related parties, loans receivable and cash
at bank. The maximum risk exposure is represented by the carrying value of receivables from related parties referred
to in note 17, loan receivable shown in note 16 and cash at bank in note 20.
The Company's revenues arise from a limited number of transactions and customers and therefore credit risk is
transparent.
Management has assessed the collectability of receivables and do not expect losses other than the expected credit
allowance already provided in line with the accounting policy. In 2023 expected credit loss of USD 250 thousand was
provided for the loan receivable from the Company's associate. In 2024 the change in ECL related to the loan was
estimated to be insignificant. Refer also to note 16.
The Group does not hold any collateral as security for its receivables.
Cash and cash equivalents
The Company assesses, on an individual basis, its exposure to credit risk arising from cash at bank. This assessment
takes into account, ratings from external credit rating institutions.
Bank balances held with banks with investment grade rating are considered as low credit risk.
The gross carrying amounts below represent the Company's maximum exposure to credit risk on these assets as at
31 December 2024 and 31 December 2023:
External credit rating 2024 2023
USD 000 USD 000
Svenska Handelsbanken AB A2 1,356 1,281
Bank of Cyprus Public Company Limited Ba1 390
452
Total 1,746 1,733
The Company does not hold any collateral as security for any cash at bank balances.
12
67
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
4. Material accounting policies (continued)
Share capital
Ordinary shares are classified as equity. The difference between the fair value of the consideration received by the
Company and the nominal value of the share capital being issued is taken to the share premium account.
Comparatives
Where necessary, comparative figures have been adjusted to conform to changes in presentation in the current year.
5. New accounting pronouncements
At the date of approval of these financial statements, standards and interpretations were issued by the International
Accounting Standards Board which were not yet effective. Some of them were adopted by the European Union and
others not yet. The Board of Directors expects that the adoption of these accounting standards in future periods will
not have a material effect on the financial statements of the Company, apart from IFRS18 that its impact will be
assessed upon becoming effective.
6. Financial risk management
Financial risk factors
The Company is exposed to credit risk, liquidity risk, currency risk and capital risk management arising from the
financial instruments it holds. The risk management policies employed by the Company to manage these risks are
discussed below:
6.1 Credit risk
The Company is primarily exposed to credit risk related to receivables from related parties, loans receivable and cash
at bank. The maximum risk exposure is represented by the carrying value of receivables from related parties referred
to in note 17, loan receivable shown in note 16 and cash at bank in note 20.
The Company's revenues arise from a limited number of transactions and customers and therefore credit risk is
transparent.
Management has assessed the collectability of receivables and do not expect losses other than the expected credit
allowance already provided in line with the accounting policy. In 2023 expected credit loss of USD 250 thousand was
provided for the loan receivable from the Company's associate. In 2024 the change in ECL related to the loan was
estimated to be insignificant. Refer also to note 16.
The Group does not hold any collateral as security for its receivables.
Cash and cash equivalents
The Company assesses, on an individual basis, its exposure to credit risk arising from cash at bank. This assessment
takes into account, ratings from external credit rating institutions.
Bank balances held with banks with investment grade rating are considered as low credit risk.
The gross carrying amounts below represent the Company's maximum exposure to credit risk on these assets as at
31 December 2024 and 31 December 2023:
External credit rating 2024 2023
USD 000 USD 000
Svenska Handelsbanken AB A2 1,356 1,281
Bank of Cyprus Public Company Limited Ba1 390 452
Total 1,746 1,733
The Company does not hold any collateral as security for any cash at bank balances.
12
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
6. Financial risk management (continued)
6.1 Credit risk (continued)
Cash and cash equivalents (continued)
There were no significant cash at bank balances written off during the year that are subject to enforcement activity.
Financial guarantees
Guarantees which represent irrevocable assurances that the Company will make payments in the event that a
counterparty cannot meet its obligations to third parties, carry the same credit risk as loans receivable.
At the reporting date, the Company acts as a guarantor joint and several to the loan of associate company Petrolia
Noco AS. As at 31 December 2024, the outstanding loan balance subject to this guarantee totalled NOK 50 million
and the loan was properly served by Petrolia Noco AS with no defaults. A financial guarantee liability of USD 14
thousand is included in trade and other payables in note 22, which represents the guarantee fee charged less
cumulative amortisation. No expected credit losses have been recognised as of the reporting date in respect of these
financial guarantees provided by the Company, since it was assessed that the present value of related expected
payments is immaterial.
Until the date of the approval of the financial statements, no claim has been raised for the loan guarantee and the
Board of Directors does not expect any claim in the future.
6.2 Liquidity risk
Liquidity risk is the risk that arises when the maturity of assets and liabilities does not match. An unmatched position
potentially enhances profitability, but can also increase the risk of losses. The Company has procedures with the
object of minimising such losses such as maintaining sufficient cash and other highly liquid current assets.
The following tables detail the Company's remaining contractual maturity for its financial liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
Company can be required to pay. The table includes both interest and principal cash flows.
31 December 2024 Carrying
amounts
Contractual
cash flows
Up to 12
months 1-2 years 2-5 years
More than
5 years
USD 000 USD 000 USD 000 USD 000 USD 000 USD 000
Lease liabilities 127 134 67 67 - -
Trade and other payables
170 170 170 - - -
Payables to related parties 1,741
1,741 1,741 - - -
2,038 2,045 1,978 67 - -
31 December 2023 Carrying
amounts
Contractual
cash flows
Up to 12
months 1-2 years 2-5 years
More than
5 years
USD 000 USD 000 USD 000 USD 000 USD 000 USD 000
Lease liabilities 194 210 70 70 70 -
Trade and other payables
231 231 231 - - -
Payables to related parties 4,186
4,186 4,186 - - -
4,611 4,627 4,487 70 70 -
Liquidity risk may also arise from the financial guarantee contracts provided by the Company to secure credit facilities
obtained by the associate of the Company, as further analysed in Credit risk (section 6.1) above.
13
68
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
6. Financial risk management (continued)
6.3 Foreign Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange
rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated
in a currency that is not the Company's measurement currency. The Company is exposed to foreign exchange risk
arising from various currency exposures primarily with respect to the Norwegian Krone and the Euro. The Company's
Management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at
the reporting date are as follows:
Liabilities Assets
2024 2023 2024 2023
USD 000 USD 000 USD 000 USD 000
Norwegian Krone 1,998 4,495 6,709 10,621
Euro 239
319 186 166
2,237 4,814 6,895 10,787
The following table demonstrates the sensitivity to a reasonably possible change in Euro and Norwegian Krone
currency exchange rate, with all other variables held constant, of the Company's profit before tax and the Company's
equity:
2024 Change in
currency rate
Profit before
tax Equity
% USD 000 USD 000
Euro 5 (3) (3)
Euro (5) 3 3
Norwegian Krone 5 236 236
Norwegian Krone (5)
(236) (236)
2023 Change in
currency rate
Profit before
tax Equity
% USD 000 USD 000
Euro 5 (8) (8)
Euro (5) 8 8
Norwegian Krone 5 189 189
Norwegian Krone (5)
(189) (189)
6.4 Capital risk management
Capital includes equity shares and share premium.
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the
return to shareholders. The Company's overall strategy remains unchanged from last year.
7. Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting
estimates and requires Management to exercise its judgment in the process of applying the Company's accounting
policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on Management's best
knowledge of current events and actions, actual results may ultimately differ from those estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
14
69
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
6. Financial risk management (continued)
6.3 Foreign Currency risk
Currency risk is the risk that the value of financial instruments will fluctuate due to changes in foreign exchange
rates. Currency risk arises when future commercial transactions and recognised assets and liabilities are denominated
in a currency that is not the Company's measurement currency. The Company is exposed to foreign exchange risk
arising from various currency exposures primarily with respect to the Norwegian Krone and the Euro. The Company's
Management monitors the exchange rate fluctuations on a continuous basis and acts accordingly.
The carrying amounts of the Company's foreign currency denominated monetary assets and monetary liabilities at
the reporting date are as follows:
Liabilities Assets
2024 2023 2024 2023
USD 000 USD 000 USD 000 USD 000
Norwegian Krone 1,998 4,495 6,709 10,621
Euro 239 319 186 166
2,237 4,814 6,895 10,787
The following table demonstrates the sensitivity to a reasonably possible change in Euro and Norwegian Krone
currency exchange rate, with all other variables held constant, of the Company's profit before tax and the Company's
equity:
2024 Change in
currency rate
Profit before
tax Equity
% USD 000 USD 000
Euro 5 (3) (3)
Euro (5) 3 3
Norwegian Krone 5 236 236
Norwegian Krone (5) (236) (236)
2023 Change in
currency rate
Profit before
tax Equity
% USD 000 USD 000
Euro 5 (8) (8)
Euro (5) 8 8
Norwegian Krone 5 189 189
Norwegian Krone (5) (189) (189)
6.4 Capital risk management
Capital includes equity shares and share premium.
The Company manages its capital to ensure that it will be able to continue as a going concern while maximising the
return to shareholders. The Company's overall strategy remains unchanged from last year.
7. Critical accounting estimates and judgments
The preparation of financial statements in conformity with IFRSs requires the use of certain critical accounting
estimates and requires Management to exercise its judgment in the process of applying the Company's accounting
policies. It also requires the use of assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of
revenues and expenses during the reporting period. Although these estimates are based on Management's best
knowledge of current events and actions, actual results may ultimately differ from those estimates.
Estimates and judgments are continually evaluated and are based on historical experience and other factors,
including expectations of future events that are believed to be reasonable under the circumstances.
14
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
7. Critical accounting estimates and judgments (continued)
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are discussed below:
Impairment of investments in subsidiaries and associates
The Company periodically evaluates the recoverability of investments in subsidiaries/associates whenever
indicators of impairment are present. Indicators of impairment include such items as declines in revenues,
earnings or cash flows or material adverse changes in the economic or political stability of a particular
country, which may indicate that the carrying amount of an asset is not recoverable. If facts and
circumstances indicate that investment or the fair value of their net assets in subsidiaries/associates may be
impaired, the estimated future discounted cash flows associated with these investments or the fair value of
their net assets would be compared to their carrying amounts to determine if a write-down to fair value is
necessary. The valuation may be impacted in several different ways by transition risk in particular, such as
climate-related legislation and regulations and changes in demand for the subsidiaries' and associates'
products. The Company has concluded that no single climate-related assumption is a key assumption for the
2024 impairment testing. Refer to additional disclosures in Notes 14 and 15.
Impairment of financial assets - allowance for credit losses on loan receivables and amounts
receivable from related parties
The loss allowances for financial assets are based on assumptions about risk of default and expected loss
rates. In relation to the loans and amounts due from related parties, in order to calculate the ECL, the
Company applied the 12 month ECL model and the general approach. In determining the recoverability of
the loans and amounts due from related parties, the Company considered the historic repayments made in
conjunction with the parties’ financial position at year end and their ability to make future repayments based
on their current and expected future trading activities.
8. Revenue from contracts with customers
The Company derives its revenue from contracts with customers for the transfer of services over time as follows:
Disaggregation of revenue 2024 2023
USD 000 USD 000
Management fees 118 114
Consultancy fees (Note 23.3) 44
44
162 158
15
70
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
9. Operating profit/(loss)
2024 2023
USD 000 USD 000
Operating profit/(loss) is stated after charging the following items:
Depreciation of right-of-use assets (Note 19) 65 68
Depreciation of property, plant and equipment (Note 13) 1 -
Directors' fees (Note 23.1) 99 96
Staff costs including Directors in their executive capacity (Note 10) 585 546
Auditors' remuneration - current year 187 187
Auditors' remuneration (branch) - current year 24 22
Auditors’ remuneration for tax compliance - current year 13 15
Auditors’ remuneration for other non-audit services - 9
Auditors' remuneration - prior years 9
4
The auditors remuneration as presented in the table includes irrecoverable VAT. The total fees, including VAT,
charged by the statutory audit firm for the statutory audit of the Parent's separate and consolidated annual financial
statements for the year ended 31 December 2024 amounted to USD 187,319 (2023: USD 187,065). The total fees,
including VAT, charged by the statutory audit firm for the year ended 31 December 2024 for tax advisory services
amounted to USD 13,013 (2023: 15,351).
10. Staff costs
2024 2023
USD 000 USD 000
Directors' and key management remuneration (Note 23.1) 266 257
Wages 286 259
Social security costs 33
30
585 546
The average number of employees during the year was 5 (2023: 4).
11. Finance income/(costs)
2024 2023
USD 000 USD 000
Loan interest income (Note 16) 690 369
Income from financial guarantees 76 2
Other interest income 42 75
Reversal of ECL on related party receivables (Note 23.5) 228
-
Finance income 1,036 446
Net foreign exchange losses (884) (193)
Interest expense on lease liabilities (Note 19) (8) -
Sundry finance expenses (3)
(5)
Finance costs (895) (198)
Net finance income
141
248
16
71
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
9. Operating profit/(loss)
2024 2023
USD 000 USD 000
Operating profit/(loss) is stated after charging the following items:
Depreciation of right-of-use assets (Note 19) 65 68
Depreciation of property, plant and equipment (Note 13) 1 -
Directors' fees (Note 23.1) 99 96
Staff costs including Directors in their executive capacity (Note 10) 585 546
Auditors' remuneration - current year 187 187
Auditors' remuneration (branch) - current year 24 22
Auditors’ remuneration for tax compliance - current year 13 15
Auditors’ remuneration for other non-audit services - 9
Auditors' remuneration - prior years 9 4
The auditors remuneration as presented in the table includes irrecoverable VAT. The total fees, including VAT,
charged by the statutory audit firm for the statutory audit of the Parent's separate and consolidated annual financial
statements for the year ended 31 December 2024 amounted to USD 187,319 (2023: USD 187,065). The total fees,
including VAT, charged by the statutory audit firm for the year ended 31 December 2024 for tax advisory services
amounted to USD 13,013 (2023: 15,351).
10. Staff costs
2024 2023
USD 000 USD 000
Directors' and key management remuneration (Note 23.1) 266 257
Wages 286 259
Social security costs 33 30
585 546
The average number of employees during the year was 5 (2023: 4).
11. Finance income/(costs)
2024 2023
USD 000 USD 000
Loan interest income (Note 16) 690 369
Income from financial guarantees 76 2
Other interest income 42 75
Reversal of ECL on related party receivables (Note 23.5) 228 -
Finance income 1,036 446
Net foreign exchange losses (884) (193)
Interest expense on lease liabilities (Note 19) (8) -
Sundry finance expenses (3) (5)
Finance costs (895) (198)
Net finance income
141 248
16
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
12. Tax
2024 2023
USD 000 USD 000
Defence contribution -
5
Charge for the year - 5
The tax on the Company's profit before tax differs from theoretical amount that would arise using the applicable tax
rates as follows:
2024 2023
USD 000 USD 000
Profit/(loss) before tax 6,363
(8,757)
Tax calculated at the applicable tax rates
795 (1,095)
Effect of different tax rates on foreign earnings 99 76
Tax effect of expenses not deductible for tax purposes
104 1,102
Tax effect of allowances and income not subject to tax
(937) (64)
Tax effect of carried forward losses
(186) (218)
Tax effect of tax loss for the year for which no deferred tax asset was recognised
125 199
Defence contribution current year -
5
Tax refund - 5
The Company is resident in Cyprus for tax purposes.
Interest income is subject to Income Tax at the standard rate of 12.5% if the interest is considered to be generated
in the ordinary carrying on of a business or closely connected to it. If the interest income is neither generated in the
ordinary carrying on of a business nor closely connected to it, it is subject to Defence Tax at a rate of 30%. The
interest income of the Company is considered to be generated in the ordinary carrying of the business
Dividends received from a non-resident (foreign) company are exempt from Defence Tax if the dividend paying
company derives more than 50% of its income directly or indirectly from activities which do not lead to investment
income or the foreign tax burden on the profit to be distributed as dividend has not been substantially lower than the
Cypriot tax rate at the level of the dividend paying company
Companies, which do not distribute 70% of their profits after tax, as defined by the Special Contribution for the
Defence of the Republic Law, within two years after the end of the relevant tax year, will be deemed to have
distributed this amount as dividend on the 31 of December of the second year. The amount of the deemed dividend
distribution is reduced by any actual dividend already distributed by 31 December of the second year for the year the
profits relate. The Company pays special defence contribution on behalf of the shareholders over the amount of the
deemed dividend distribution at a rate of 17% (applicable since 2014) when the entitled shareholders are natural
persons tax residents of Cyprus and have their domicile in Cyprus. In addition, the Company pays on behalf of the
shareholders General Healthcare System (GHS) contribution at a rate of 2.65%, when the entitled shareholders are
natural persons tax residents of Cyprus, regardless of their domicile.
The Company’s Branch in Norway (the “Branch”) is subject to income tax at the rate of 22% (2023: 22%) on the tax
profits realized in Norway. The Branch under current legislation may carry forward the balance of tax losses
indefinitely in the future. The Company in Cyprus is subject to income tax at the rate of 12.5% (2023: 12.5%) on the
tax profits realized in Cyprus. The Company's tax losses in Cyprus amounts to USD 965 thousand and can be carried
forward for 5 years. No deferred tax asset has been recognised as it is not expected that future taxable profits will be
available to be utilised.
17
72
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
13. Property, plant and equipment
Computer
hardware
USD 000
Cost
Balance at 1 January 2023 1
Additions
1
Balance at 31 December 2023/ 1 January 2024 2
Balance at 31 December 2024
2
Depreciation
Balance at 1 January 2023 -
Charge for the year -
Balance at 31 December 2023
-
Charge for the year 1
Balance at 31 December 2024
1
Net book amount
Balance at 31 December 2024
1
Balance at 31 December 2023
2
During 2023, the Company through its branch, has acquired a new laptop at a cost of NOK 21 (USD 1).
18
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
14. Investments in subsidiaries
2024 2023
USD
000 USD 000
Balance at 1 January 30,074 37,920
Net reversal of impairment/(impairment) 4,642 (7,846)
Balance at 31 December 34,716 30,074
The details of the subsidiaries are as follows:
Name Country of
incorporation
Principal
activities
2024
Holding
%
2023
Holding
%
2024
USD
000
2023
USD 000
Petrolia AS (1) Norway Holding company
of IOT Group -
Energy service
100 100 33,568 29,337
Petrolia Tool Pool AS Norway Holding company 100 100 17 17
Independent Oil Tools International
(Cyprus) Ltd (2)
Cyprus Holding company 100 100 1,131 720
34,716 30,074
The Company performs an impairment assessment of its subsidiaries when there are indicators for impairment or
reversal of impairment in accordance with the relevant accounting standard.
(1) During 2024, a reversal of impairment of USD 4,231 thousand was recognized (2023: impairment USD 7,846
thousand). The accumulated impairment as at 31 December 2024 is USD 91,242 thousand (2023: USD 95,473
thousand). Petrolia AS is the holding company of the oil service sub-group.
As at 31 December 2024, and based on the economic performance of the oil service sub-group which was better
than expected, the Management identified reversal of impairment indicators and calculated the recoverable amount
of the investment using the discounted cash flow model for a period of 5 years with an exit price. The discounted
cash flow calculations included the following main inputs and assumptions:
Capital expenditure based on historic averages: range of USD 4.3m - USD 4.6m (2023: USD 3.1m - USD 3.3m)
Forecasted EBITDA: range of USD 13.7m - USD 14.9m (2023: USD 11.1m - USD 13.8m)
Discount rate of 11.3% (2023: 11.3%)
Terminal growth rate of 2% (2023: 2%)
The following sensitivity analysis has been performed by management as at the year-end:
A decrease in projected EBITDA rates by 10% would result in a total of USD 9,203 thousand impairment charge
whereas an increase in projected EBITDA rates by 5% would result in a total of USD 10,948 thousand reversal of
impairment.
An increase in the discount rate by 1% would result in a total of USD 915 thousand reversal of impairment.
(2) As at 31 December 2024 a reversal of impairment of USD 411 thousand was recognised, after comparing the
investment’s carrying amount with its recoverable amount, due to reversal of impairment indicators being present.
Independent Oil Tools International (Cyprus) Ltd is a holding company, and management has based its impairment
assessment on the net assets of the investee which considered to be a close approximation of its fair value less cost
to disposal. The accumulated impairment as at 31 December 2024 is USD 12,468 thousand (2023: USD 12,879
thousand). No impairment or reversal of impairment was recognised during the year ended 31 December 2023.
19
73
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
13. Property, plant and equipment
Computer
hardware
USD 000
Cost
Balance at 1 January 2023 1
Additions
1
Balance at 31 December 2023/ 1 January 2024 2
Balance at 31 December 2024
2
Depreciation
Balance at 1 January 2023 -
Charge for the year -
Balance at 31 December 2023
-
Charge for the year 1
Balance at 31 December 2024
1
Net book amount
Balance at 31 December 2024
1
Balance at 31 December 2023
2
During 2023, the Company through its branch, has acquired a new laptop at a cost of NOK 21 (USD 1).
18
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
14. Investments in subsidiaries
2024 2023
USD
000 USD 000
Balance at 1 January 30,074 37,920
Net reversal of impairment/(impairment) 4,642
(7,846)
Balance at 31 December 34,716 30,074
The details of the subsidiaries are as follows:
Name Country of
incorporation
Principal
activities
2024
Holding
%
2023
Holding
%
2024
USD
000
2023
USD 000
Petrolia AS (1) Norway Holding company
of IOT Group -
Energy service
100 100 33,568 29,337
Petrolia Tool Pool AS Norway Holding company 100 100 17 17
Independent Oil Tools International
(Cyprus) Ltd (2)
Cyprus Holding company 100 100 1,131
720
34,716 30,074
The Company performs an impairment assessment of its subsidiaries when there are indicators for impairment or
reversal of impairment in accordance with the relevant accounting standard.
(1) During 2024, a reversal of impairment of USD 4,231 thousand was recognized (2023: impairment USD 7,846
thousand). The accumulated impairment as at 31 December 2024 is USD 91,242 thousand (2023: USD 95,473
thousand). Petrolia AS is the holding company of the oil service sub-group.
As at 31 December 2024, and based on the economic performance of the oil service sub-group which was better
than expected, the Management identified reversal of impairment indicators and calculated the recoverable amount
of the investment using the discounted cash flow model for a period of 5 years with an exit price. The discounted
cash flow calculations included the following main inputs and assumptions:
Capital expenditure based on historic averages: range of USD 4.3m - USD 4.6m (2023: USD 3.1m - USD 3.3m)
Forecasted EBITDA: range of USD 13.7m - USD 14.9m (2023: USD 11.1m - USD 13.8m)
Discount rate of 11.3% (2023: 11.3%)
Terminal growth rate of 2% (2023: 2%)
The following sensitivity analysis has been performed by management as at the year-end:
A decrease in projected EBITDA rates by 10% would result in a total of USD 9,203 thousand impairment charge
whereas an increase in projected EBITDA rates by 5% would result in a total of USD 10,948 thousand reversal of
impairment.
An increase in the discount rate by 1% would result in a total of USD 915 thousand reversal of impairment.
(2) As at 31 December 2024 a reversal of impairment of USD 411 thousand was recognised, after comparing the
investment’s carrying amount with its recoverable amount, due to reversal of impairment indicators being present.
Independent Oil Tools International (Cyprus) Ltd is a holding company, and management has based its impairment
assessment on the net assets of the investee which considered to be a close approximation of its fair value less cost
to disposal. The accumulated impairment as at 31 December 2024 is USD 12,468 thousand (2023: USD 12,879
thousand). No impairment or reversal of impairment was recognised during the year ended 31 December 2023.
19
74
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
14. Investments in subsidiaries (continued)
Total reversal of impairment for the year amounted to USD 4,642 thousand (2023: impairment USD 7,846 thousand).
Total accumulated impairment as at 31 December 2024 amounted to USD 171,493 thousand (2023: USD 176,135
thousand).
15. Investment in associate
The details of the investment are as follows:
2024 2023
USD 000 USD 000
Balance at 1 January - 124
Impairment charge -
(124)
Balance at 31 December - -
The details of the investment are as follows:
Name Country of
incorporation
Principal
activities
2024
Holding
%
2023
Holding
%
2024
USD 000
2023
USD 000
Petrolia Noco
AS
Norway Oil & Gas 10.61 10.61 -
-
During 2023, the investment in Petrolia Noco AS has increased its capital by the issuance of additional share capital.
The associate has completed a private placement issue where 10,000,000 shares have been issued at a price of NOK
2.00 per share. Petrolia SE, has not participated directly in the purchase of additional shares but 4,985,000 shares
were subscribed by Petrolia AS, a 100% subsidiary of Petrolia SE and therefore its shareholding decreased from
11.27% to 10.61%. During 2024, Petrolia SE shareholding remained unchanged from 2023 at 10.61%. The Company
exercises significant influence through participating in the financial and operating policy decisions of the investee
(Petrolia Noco AS) through its common director Berge Gerdt Larsen and Sjur Storaas who remain on the board of
directors of both companies, the Parent (Petrolia SE) and associate (Petrolia Noco AS).
By reference to the net assets of the associate and as a result of losses incurred by the associate during the year the
investment in associate remained fully impaired. The accumulated impairment as at 31 December 2024 amounted to
USD 25,658 thousand (2023: USD 25,658 thousand).
Through its subsidiaries the Company owns 49.9% (2023: 49.9%) of the shares of Petrolia NOCO AS.
16. Loan receivable from associate
2024 2023
USD 000 USD 000
Balance at 1 January 5,920 4,362
Loans granted - 2,934
Principal repayments - (927)
Interest charged (Note 11) 690 369
Interest repayments for the year (764) (391)
Foreign exchange differences (634) (177)
Expected credit loss movement -
(250)
Balance at 31 December 5,212 5,920
Less current portion (5,212) (5,920)
Non-current portion
- -
20
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
16. Loan receivable from associate (continued)
On 14 May 2020, Petrolia Noco AS (borrower) and Independent Oil & Resources Plc (lender and security agent) have
signed a loan agreement. According to the loan agreement, the borrower can enter into any additional loans with any
additional lender by entering into an accession letter, provided that 10 days prior notice is given to the lender and the
security agent. During 2021, Petrolia SE through its branch Petrolia NUF (additional lender) has provided a loan to
Petrolia Noco AS amounting to NOK 71,750,000 (USD 8,225,838). The loan balance as at 31 December 2024 was
NOK 31,780,000. The loan bears an interest of 10% p.a and was repayable by 31 December 2024. The interest
income for the year related to this loan is NOK 3,178,000 (USD 293,992) (2023: NOK 3,714,581 (USD 353,255).
On 22 December 2023, according to a signed loan addendum, Petrolia SE and Independent Oil & Resources Plc
mutually agree a new loan of NOK 75,000,000 (Petrolia SE to give NOK 30,000,000 and Independent Oil & Resources
Plc to give NOK 45,000,000) and to become joint and several guarantors to remaining lenders for an additional loan
amount of NOK 75.9 million. During 2023, Petrolia SE through its branch Petrolia NUF (additional lender) has
provided a loan to Petrolia Noco AS amounting to NOK 30,000,000 (USD 2,934,129). The loan balance as at 31
December 2024 was NOK 30,000,000. The additional loan bears an interest of 13.2% p.a and was repayable by 31
December 2024. The interest income for the year related to this loan is NOK 3,960,000 (USD 366,334) (2023: NOK
165,000 (USD 16,224).
The loans' repayment period for both loans have been renewed until 31 December 2025.
Within 2024, Petrolia SE through its branch Petrolia NUF (lender), according to a signed liquidity loan agreement,
provided short term liquidity loans of total NOK 30,500,000 to Petrolia Noco AS (borrower). All loans have been fully
repaid within 2024. The short term liquidity loans bear an interest of 13.2% p.a. The interest income for the year
related to these loans is NOK 317,717 (USD 29,633).
The loans are repayable as follows:
2024 2023
USD 000 USD 000
Within one year 5,212 5,920
5,212 5,920
Loan is denominated in NOK.
Refer also to Note 13 to the consolidated financial statements.
The exposure of the Company to credit risk in relation to loans receivable is reported in
note 6 of the financial
statements.
There is no history of credit losses related to the loan. The management assessed that there is very little risk
regarding its recoverability and that the related expected credit losses recognised amounting to USD 250,000 are not
considered significant.
17. Trade and other receivables
2024 2023
USD 000 USD 000
Receivables from related parties (Note 23.5) 705 804
Deposits and prepayments 13 24
VAT refundable 4 14
722 842
The fair values of trade and other receivables due within one year approximate to their carrying amounts as
presented above.
21
75
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
14. Investments in subsidiaries (continued)
Total reversal of impairment for the year amounted to USD 4,642 thousand (2023: impairment USD 7,846 thousand).
Total accumulated impairment as at 31 December 2024 amounted to USD 171,493 thousand (2023: USD 176,135
thousand).
15. Investment in associate
The details of the investment are as follows:
2024 2023
USD 000 USD 000
Balance at 1 January - 124
Impairment charge - (124)
Balance at 31 December - -
The details of the investment are as follows:
Name Country of
incorporation
Principal
activities
2024
Holding
%
2023
Holding
%
2024
USD 000
2023
USD 000
Petrolia Noco
AS
Norway Oil & Gas 10.61 10.61 - -
During 2023, the investment in Petrolia Noco AS has increased its capital by the issuance of additional share capital.
The associate has completed a private placement issue where 10,000,000 shares have been issued at a price of NOK
2.00 per share. Petrolia SE, has not participated directly in the purchase of additional shares but 4,985,000 shares
were subscribed by Petrolia AS, a 100% subsidiary of Petrolia SE and therefore its shareholding decreased from
11.27% to 10.61%. During 2024, Petrolia SE shareholding remained unchanged from 2023 at 10.61%. The Company
exercises significant influence through participating in the financial and operating policy decisions of the investee
(Petrolia Noco AS) through its common director Berge Gerdt Larsen and Sjur Storaas who remain on the board of
directors of both companies, the Parent (Petrolia SE) and associate (Petrolia Noco AS).
By reference to the net assets of the associate and as a result of losses incurred by the associate during the year the
investment in associate remained fully impaired. The accumulated impairment as at 31 December 2024 amounted to
USD 25,658 thousand (2023: USD 25,658 thousand).
Through its subsidiaries the Company owns 49.9% (2023: 49.9%) of the shares of Petrolia NOCO AS.
16. Loan receivable from associate
2024 2023
USD 000 USD 000
Balance at 1 January 5,920 4,362
Loans granted - 2,934
Principal repayments - (927)
Interest charged (Note 11) 690 369
Interest repayments for the year (764) (391)
Foreign exchange differences (634) (177)
Expected credit loss movement - (250)
Balance at 31 December 5,212 5,920
Less current portion (5,212) (5,920)
Non-current portion
- -
20
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
16. Loan receivable from associate (continued)
On 14 May 2020, Petrolia Noco AS (borrower) and Independent Oil & Resources Plc (lender and security agent) have
signed a loan agreement. According to the loan agreement, the borrower can enter into any additional loans with any
additional lender by entering into an accession letter, provided that 10 days prior notice is given to the lender and the
security agent. During 2021, Petrolia SE through its branch Petrolia NUF (additional lender) has provided a loan to
Petrolia Noco AS amounting to NOK 71,750,000 (USD 8,225,838). The loan balance as at 31 December 2024 was
NOK 31,780,000. The loan bears an interest of 10% p.a and was repayable by 31 December 2024. The interest
income for the year related to this loan is NOK 3,178,000 (USD 293,992) (2023: NOK 3,714,581 (USD 353,255).
On 22 December 2023, according to a signed loan addendum, Petrolia SE and Independent Oil & Resources Plc
mutually agree a new loan of NOK 75,000,000 (Petrolia SE to give NOK 30,000,000 and Independent Oil & Resources
Plc to give NOK 45,000,000) and to become joint and several guarantors to remaining lenders for an additional loan
amount of NOK 75.9 million. During 2023, Petrolia SE through its branch Petrolia NUF (additional lender) has
provided a loan to Petrolia Noco AS amounting to NOK 30,000,000 (USD 2,934,129). The loan balance as at 31
December 2024 was NOK 30,000,000. The additional loan bears an interest of 13.2% p.a and was repayable by 31
December 2024. The interest income for the year related to this loan is NOK 3,960,000 (USD 366,334) (2023: NOK
165,000 (USD 16,224).
The loans' repayment period for both loans have been renewed until 31 December 2025.
Within 2024, Petrolia SE through its branch Petrolia NUF (lender), according to a signed liquidity loan agreement,
provided short term liquidity loans of total NOK 30,500,000 to Petrolia Noco AS (borrower). All loans have been fully
repaid within 2024. The short term liquidity loans bear an interest of 13.2% p.a. The interest income for the year
related to these loans is NOK 317,717 (USD 29,633).
The loans are repayable as follows:
2024 2023
USD 000 USD 000
Within one year 5,212
5,920
5,212 5,920
Loan is denominated in NOK.
Refer also to Note 13 to the consolidated financial statements.
The exposure of the Company to credit risk in relation to loans receivable is reported in
note 6 of the financial
statements.
There is no history of credit losses related to the loan. The management assessed that there is very little risk
regarding its recoverability and that the related expected credit losses recognised amounting to USD 250,000 are not
considered significant.
17. Trade and other receivables
2024 2023
USD 000 USD 000
Receivables from related parties (Note 23.5) 705 804
Deposits and prepayments 13 24
VAT refundable 4
14
722 842
The fair values of trade and other receivables due within one year approximate to their carrying amounts as
presented above.
21
76
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
17. Trade and other receivables (continued)
The exposure of the Company to credit risk and impairment losses in relation to trade and other receivables is
reported in note 6 of the financial statements.
18. Restricted cash
2024 2023
USD 000 USD 000
Bank deposits 28 31
Less non-current portion - -
Current portion 28 31
Refer also to Note 16 to the consolidated financial statements.
19. Leases
The Company has an office rental agreement with a contractual lease term until 31 December 2023, with options to
extend. During the year 2023, the Company has assessed that it was reasonably certain that the extension option will
be exercised for three more years until 31 December 2026. Management exercises judgement in determining
whether it is reasonably certain to continue to use the premises for additional periods after 31 December 2026.
Management has assessed that the extension for additional optional periods is not reasonably certain and therefore
these optional periods were not taken into account in the lease calculations. The incremental borrowing rate used in
the calculation was 4.8%. The addition of one more year in the lease calculations will result in an increase in Right of
use asset and lease liability by USD 48 thousand whereas the addition of two years will result in an increase of USD
102 thousand.
Set out below are the carrying amounts of right of use assets recognised and the movements during the year:
Right of Use Asset:
2024 2023
USD 000 USD 000
Balance at 1 January 194 68
Additions - 194
Depreciation charge for the year (Note 9) (65)
(68)
Balance at 31 December 129 194
Set out below are the carrying amounts of lease liabilities and the movements during the year:
Lease liability
2024 2023
USD 000 USD 000
Balance at 1 January 194 68
Additions - 194
Repayments (71) (68)
Interest expense (Note 11) 8 -
Exchange differences (4)
-
Balance at 31 December 127 194
Less current portion (62) (74)
Non-current portion 65 120
22
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
20. Cash at bank
Cash balances are analysed as follows:
2024 2023
USD 000 USD 000
Cash at bank 1,746 1,733
1,746 1,733
Cash and cash equivalents by currency:
2024 2023
USD 000 USD 000
Norwegian Krone 1,324 1,277
US Dollars 236 297
Euro 186 159
1,746 1,733
The exposure of the Company to credit risk and impairment losses in relation to cash and cash equivalents is
reported in note 6 of the financial statements.
21. Share capital
2024 2024 2023 2023
Number of
shares USD 000
Number of
shares USD 000
Authorised
Ordinary shares of USD1 each 272,358,670 27,236 272,358,670 27,236
Issued and fully paid
Balance at 1 January 59,133,786 5,913 59,133,786 5,913
Balance at 31 December 2024 59,133,786 5,913 59,133,786 5,913
Refer also to Note 17 to the consolidated financial statements.
22. Trade and other payables
2024 2023
USD 000 USD 000
Trade payables
96 150
Social insurance and other taxes 74 81
Shareholders' current accounts - credit balances (Note 23.8) 2 10
Financial guarantee 14 81
Accruals 155 120
Payables to own subsidiaries (Note 23.6) 12 123
Payables to related parties (Note 23.6) 1,727 4,053
2,080 4,618
In 2023, Petrolia Noco AS has paid to Petrolia SE the guarantee fee of NOK 850,000 (USD 83,134). During 2024, the
amount was fully amortised. On 19 December 2024, based on an addendum signed, Petrolia Noco AS has paid to
Petrolia SE the guarantee fee of NOK 162,500 (USD 14,561). The amount at year end represents the guarantee fee
charged less cumulative amortisation for the year. During the year 2024, income from financial guarantee was
recognised in the income statement amounting to USD 75,673 (2023: USD 1,807) (Note 11).
The fair values of trade and other payables due within one year approximate to their carrying amounts as presented
above.
23
77
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
17. Trade and other receivables (continued)
The exposure of the Company to credit risk and impairment losses in relation to trade and other receivables is
reported in note 6 of the financial statements.
18. Restricted cash
2024 2023
USD 000 USD 000
Bank deposits 28 31
Less non-current portion - -
Current portion 28 31
Refer also to Note 16 to the consolidated financial statements.
19. Leases
The Company has an office rental agreement with a contractual lease term until 31 December 2023, with options to
extend. During the year 2023, the Company has assessed that it was reasonably certain that the extension option will
be exercised for three more years until 31 December 2026. Management exercises judgement in determining
whether it is reasonably certain to continue to use the premises for additional periods after 31 December 2026.
Management has assessed that the extension for additional optional periods is not reasonably certain and therefore
these optional periods were not taken into account in the lease calculations. The incremental borrowing rate used in
the calculation was 4.8%. The addition of one more year in the lease calculations will result in an increase in Right of
use asset and lease liability by USD 48 thousand whereas the addition of two years will result in an increase of USD
102 thousand.
Set out below are the carrying amounts of right of use assets recognised and the movements during the year:
Right of Use Asset:
2024 2023
USD 000 USD 000
Balance at 1 January 194 68
Additions - 194
Depreciation charge for the year (Note 9) (65) (68)
Balance at 31 December 129 194
Set out below are the carrying amounts of lease liabilities and the movements during the year:
Lease liability
2024 2023
USD 000 USD 000
Balance at 1 January 194 68
Additions - 194
Repayments (71) (68)
Interest expense (Note 11) 8 -
Exchange differences (4) -
Balance at 31 December 127 194
Less current portion (62) (74)
Non-current portion 65 120
22
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
20. Cash at bank
Cash balances are analysed as follows:
2024 2023
USD 000 USD 000
Cash at bank 1,746
1,733
1,746 1,733
Cash and cash equivalents by currency:
2024 2023
USD 000 USD 000
Norwegian Krone 1,324 1,277
US Dollars 236 297
Euro 186
159
1,746 1,733
The exposure of the Company to credit risk and impairment losses in relation to cash and cash equivalents is
reported in note 6 of the financial statements.
21. Share capital
2024 2024 2023 2023
Number of
shares USD 000
Number of
shares USD 000
Authorised
Ordinary shares of USD1 each 272,358,670
27,236 272,358,670 27,236
Issued and fully paid
Balance at 1 January 59,133,786
5,913 59,133,786 5,913
Balance at 31 December 2024 59,133,786 5,913 59,133,786 5,913
Refer also to Note 17 to the consolidated financial statements.
22. Trade and other payables
2024 2023
USD 000 USD 000
Trade payables
96 150
Social insurance and other taxes 74 81
Shareholders' current accounts - credit balances (Note 23.8) 2 10
Financial guarantee 14 81
Accruals 155 120
Payables to own subsidiaries (Note 23.6) 12 123
Payables to related parties (Note 23.6) 1,727
4,053
2,080 4,618
In 2023, Petrolia Noco AS has paid to Petrolia SE the guarantee fee of NOK 850,000 (USD 83,134). During 2024, the
amount was fully amortised. On 19 December 2024, based on an addendum signed, Petrolia Noco AS has paid to
Petrolia SE the guarantee fee of NOK 162,500 (USD 14,561). The amount at year end represents the guarantee fee
charged less cumulative amortisation for the year. During the year 2024, income from financial guarantee was
recognised in the income statement amounting to USD 75,673 (2023: USD 1,807) (Note 11).
The fair values of trade and other payables due within one year approximate to their carrying amounts as presented
above.
23
78
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
23. Related party transactions and balances
The Company is controlled by Berge Gerdt Larsen. For more details refer to Note 17 of the consolidated financial
statements.
The following transactions were carried out with related parties:
23.1 Directors' and key management personnel remuneration
The remuneration of Directors was as follows:
2024 2023
USD 000 USD 000
Directors' fees (Note 9) 99 96
Directors' and key management personnel remuneration (Note 10) 266
257
365 353
2024 2023
USD 000 USD 000
Director's fees
George Hadjineophytou - Board member, Audit & Remuneration committees (re-
elected on 31 May 2024) 52 49
Sjur Storaas - Board member, Audit & Remuneration committees (re-elected on 31
May 2024) 47 47
99
96
Directors' and key management personnel remuneration
Polycarpos Protopapas (27 November 2019), Managing Director, Cyprus 57 57
Solve Nilsen (1 October 2010), General manager of the Branch, Norway 187 198
Marios Tornaritis (1 December 2023), Finance manager, Cyprus 22 2
266
257
Total Directors' and key management personnel remuneration 365 353
23.2 Management fees charged to related parties (Note 8)
2024 2023
Nature of transactions
USD 000 USD 000
Subsidiaries and sub-subsidiaries
Trade
118 114
118 114
23.3 Consultancy fees charged to related parties (Note 8)
2024 2023
Name
Nature of transactions
USD 000 USD 000
Petrolia Noco AS
Trade
44 44
44 44
24
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
23. Related party transactions and balances (continued)
23.4 Dividend income
2024 2023
USD 000 USD 000
Independent Oil Tools International (CY) 300 500
Venture Drilling AS 2,359 -
Petrolia Tool Pool AS 197 -
2,856 500
23.5 Receivables from related parties (Note 17)
2024 2023
Name
USD 000 USD 000
IO & R Ltd - 569
Petrolia AS 705 983
Petrolia Invest AS - 15
Catch Holding BV - 228
Petrolia Tool Pool - (194)
Less: Accumulated expected credit losses - (797)
705 804
The receivables from related parties are interest free, and have no specified repayment date.
The accumulated ECL provisions were made in accordance with the relevant accounting policy. The accumulated ECL
for the year amounted to USD nil (2023: USD 797 thousand).
Movement of Accumulated expected credit losses
2024 2023
USD 000 USD 000
Balance at 1 January/31 December 797 797
Reversal of impairment for the year (Note 11) (228) -
Write off (569) -
Balance at 31 December - 797
23.6 Payables to own subsidiaries and related parties (Note 22)
2024 2023
Name Nature of transactions
USD 000 USD 000
Independent Oil Tools International (Cyprus)
Ltd
Finance
12 123
Venture Drilling Limited Finance 1,727 4,053
1,739 4,176
The payables to related parties are provided interest free, and have no specified repayment date.
23.7 Loans receivable from associate (Note 16)
2024 2023
USD 000 USD 000
Petrolia Noco AS 5,212 5,920
5,212 5,920
For further information refer to note 16.
25
79
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
23. Related party transactions and balances
The Company is controlled by Berge Gerdt Larsen. For more details refer to Note 17 of the consolidated financial
statements.
The following transactions were carried out with related parties:
23.1 Directors' and key management personnel remuneration
The remuneration of Directors was as follows:
2024 2023
USD 000 USD 000
Directors' fees (Note 9) 99 96
Directors' and key management personnel remuneration (Note 10) 266 257
365 353
2024 2023
USD 000 USD 000
Director's fees
George Hadjineophytou - Board member, Audit & Remuneration committees (re-
elected on 31 May 2024) 52 49
Sjur Storaas - Board member, Audit & Remuneration committees (re-elected on 31
May 2024) 47 47
99 96
Directors' and key management personnel remuneration
Polycarpos Protopapas (27 November 2019), Managing Director, Cyprus 57 57
Solve Nilsen (1 October 2010), General manager of the Branch, Norway 187 198
Marios Tornaritis (1 December 2023), Finance manager, Cyprus 22 2
266 257
Total Directors' and key management personnel remuneration 365 353
23.2 Management fees charged to related parties (Note 8)
2024 2023
Nature of transactions
USD 000 USD 000
Subsidiaries and sub-subsidiaries
Trade
118 114
118 114
23.3 Consultancy fees charged to related parties (Note 8)
2024 2023
Name Nature of transactions
USD 000 USD 000
Petrolia Noco AS
Trade
44 44
44 44
24
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
23. Related party transactions and balances (continued)
23.4 Dividend income
2024 2023
USD 000 USD 000
Independent Oil Tools International (CY) 300 500
Venture Drilling AS 2,359 -
Petrolia Tool Pool AS 197
-
2,856 500
23.5 Receivables from related parties (Note 17)
2024 2023
Name
USD 000 USD 000
IO & R Ltd - 569
Petrolia AS 705 983
Petrolia Invest AS - 15
Catch Holding BV - 228
Petrolia Tool Pool - (194)
Less: Accumulated expected credit losses -
(797)
705 804
The receivables from related parties are interest free, and have no specified repayment date.
The accumulated ECL provisions were made in accordance with the relevant accounting policy. The accumulated ECL
for the year amounted to USD nil (2023: USD 797 thousand).
Movement of Accumulated expected credit losses
2024 2023
USD 000 USD 000
Balance at 1 January/31 December 797 797
Reversal of impairment for the year (Note 11) (228) -
Write off (569)
-
Balance at 31 December - 797
23.6 Payables to own subsidiaries and related parties (Note 22)
2024 2023
Name
Nature of transactions
USD 000 USD 000
Independent Oil Tools International (Cyprus)
Ltd
Finance
12 123
Venture Drilling Limited Finance 1,727
4,053
1,739 4,176
The payables to related parties are provided interest free, and have no specified repayment date.
23.7 Loans receivable from associate (Note 16)
2024 2023
USD 000 USD 000
Petrolia Noco AS 5,212
5,920
5,212 5,920
For further information refer to note 16.
25
80
ANNUAL REPORT 2024 PETROLIA SE
FINANCIAL STATEMENTS / PARENT
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
23. Related party transactions and balances (continued)
23.8 Shareholders' current accounts - credit balances (Note 22)
2024 2023
USD 000 USD 000
Berge Gerdt Larsen 2
10
2 10
The shareholders' current accounts are interest free, and have no specified repayment date.
24. Contingent liabilities
The Company had no contingent liabilities as at 31 December 2024 and 31 December 2023 other than financial
guarantees disclosed in Note 22.
25. Commitments
The Company had no capital or other commitments as at 31 December 2024 and 31 December 2023.
26. Events after the reporting period
There were no material events after the reporting period, which have a bearing on the understanding of the financial
statements.
26
81
ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE
NOTES TO THE FINANCIAL STATEMENTS
31 December 2024
23. Related party transactions and balances (continued)
23.8 Shareholders' current accounts - credit balances (Note 22)
2024 2023
USD 000 USD 000
Berge Gerdt Larsen 2 10
2 10
The shareholders' current accounts are interest free, and have no specified repayment date.
24. Contingent liabilities
The Company had no contingent liabilities as at 31 December 2024 and 31 December 2023 other than financial
guarantees disclosed in Note 22.
25. Commitments
The Company had no capital or other commitments as at 31 December 2024 and 31 December 2023.
26. Events after the reporting period
There were no material events after the reporting period, which have a bearing on the understanding of the financial
statements.
26
AUDITOR'S
REPORT
82
ANNUAL REPORT 2024 PETROLIA SE
Ernst & Young Cyprus Ltd is a member firm of Ernst & Young Global Ltd.
Ernst & Young Cyprus Ltd is a limited liability company incorporated in Cyprus with registration number HE 222520. A list of the directors’ names is available at the company’s
registered office, 10 Esperidon Street, 1087 Nicosia, Cyprus.
Offices: Nicosia, Limassol.
Ernst & Young Cyprus Ltd
Ernst & Young House
27 Spyrou Kyprianou
4001 Mesa Geitonia
P.O. Box
50123
3601 Limassol, Cyprus
Tel: + 357 25209999
Fax: +
357 25209998
ey.com
Independent Auditor's Report
To the Members of Petrolia SE
Report on the Audit of the Consolidated and Separate Financial Statements
Opinion
We have audited the consolidated financial statements of Petrolia SE and its subsidiaries (the ''Group''), and the
separate financial statements of Petrolia SE (the ''Company''), which are presented in pages 12 to 80 and comprise
the consolidated statement of financial position and the statement of financial position of the Company as at 31
December 2024, and the consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows and the statements of profit or
loss and other comprehensive income, changes in equity and cash flows of the Company for the year then ended, and
notes to the consolidated and separate financial statements, including material accounting policy information.
In our opinion, the accompanying consolidated and separate financial statements give a true and fair view of the
financial position of the Group and the Company as at 31 December 2024, and of their financial performance and their
cash flows for the year then ended in accordance IFRS Accounting Standards as adopted by the European Union and
the requirements of the Cyprus Companies Law, Cap. 113.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated and Separate
Financial Statements section of our report. We are independent of the Group and the Company in accordance with the
International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code) together with the ethical requirements that are
relevant to our audit of the consolidated and separate financial statements in Cyprus, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the IESBA Code. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters incorporating the most significant risks of material misstatements, including assessed
risk of material misstatements due to fraud
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the
consolidated and separate financial statements of the current period. These matters were addressed in the context of
our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and
we do not provide a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Consolidated and
Separate Financial Statements section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of material misstatement
of the consolidated and separate financial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the accompanying consolidated
and separate financial statements.
AUDITORS REPORT
83
ANNUAL REPORT 2024 PETROLIA SE
Recoverability of investment in Petrolia AS, Impairment of property, plant and equipment and
Recoverability of trade receivables
Recoverability of investment in Petrolia AS (Separate Financial Statements only)
The key audit matter
Investment in Petrolia AS with a carrying amount of USD 33,568 thousand as at 31 December 2024 represents 79% of
the Company’s total assets and 97% of the Company’s investments in subsidiaries. An analysis of the investments in
subsidiaries is presented in Note 14 of the Company’s separate financial statements. Petrolia AS is the holding company
of the energy service sub-group. The economic performance of the energy service sub-group was better than expected
during 2024, and Management identified reversal of impairment indicators and proceeded to estimate the recoverable
amount of the investment using a discounted cash flow model. As a result of the exercise performed, a reversal of
impairment of USD 4,231 thousand was recognized during the year ended 31 December 2024. Management's
assessment of the recoverable amount of the investment in Petrolia AS requires estimation and judgement around key
assumptions used. Changes to key assumptions could lead to material changes in the estimated recoverable amount
of the investment, thus impacting the amount of reversal of impairment recognized and/or leading to additional
impairment.
Due to the significant balance of the investment in Petrolia AS and the estimation uncertainty involved in the
assessment of its recoverable amount, we have considered this area as a key audit matter.
How the matter was addressed in our audit
In this area, among others, we considered management's identification of indicators of impairment or reversal of
impairment. We also assessed the methodology used by management to estimate the recoverable amount of the
investment in Petrolia AS and considered its consistency with IFRS Accounting Standards. We analyzed the key
assumptions used in management's estimates of the recoverable amount of the subsidiary, such as its profitability and
financial position, future cash flows and discount rates and concluded on its recoverability. In doing so, we also involved
our internal valuation specialists for the review of methodology applied, discount factor and appropriateness of terminal
period and growth rate. We also performed sensitivity analysis by stressing the key assumptions used in the
management’s discounted cash flow model and we checked the mathematical accuracy of the relevant calculations.
We finally evaluated the relevance of the Company’s disclosures regarding the impairment assessment of its investment
in Petrolia AS and its recoverability.
Impairment of property, plant and equipment (Consolidated Financial Statements only)
The key audit matter
Property, plant and equipment with a total carrying amount of USD 15,435 thousand (Note 11) as at 31 December
2024 represent 24% of the Group’s total assets. As at 31 December 2024, Group assessed whether indications of
impairment exist considering internal and external factors. Impairment triggers were identified for property, plant and
equipment located in Iraq due to the geopolitical situation in the Middle East. For these reasons, the Group subjected
property, plant and equipment located in Iraq to an impairment test, as a result of which it recognized a total
impairment loss of USD 754 thousand, relating to an impairment loss of USD 526 thousand regarding plant and USD
228 thousand regarding equipment. The recoverable amount was estimated based on value in use, which was based
on a discounted cash flow model. No impairment indications were identified for property, plant and equipment of other
locations.
We have considered this area as a key audit matter, due to the size of the property, plant and equipment on the
Group’s consolidated statement of financial position and the estimation uncertainty, complexity and subjectivity
involved during the recoverable amount estimation process. The Group provides details on the impairment tests in
Note 11 to the consolidated financial statements.
AUDITORS REPORT
84
ANNUAL REPORT 2024 PETROLIA SE
Impairment of property, plant and equipment (Consolidated Financial Statements only) (continued)
How the matter was addressed in our audit
In this area, among others, we considered management's identification of indicators of impairment. We also assessed
the methodology used by management to estimate the recoverable amount of property, plant and equipment located
in Iraq and considered its consistency with IFRS Accounting Standards. Our audit procedures also included an
assessment of the key assumptions and method used in the impairment testing of property, plant and equipment
located in Iraq, focusing our assessment on the principal assumptions used, such as the discount rate, the expected
trend in turnover, operating expenses and capital expenditure, and comparing them to historical data and internal
budgets. In doing so, we have also involved our internal valuation specialists for the review of the discount rate used.
In addition, we have tested the mathematical accuracy of the relevant impairment calculations. Further, we assessed
the adequacy and completeness of the Group's disclosures as regards to the impairment testing.
Recoverability of trade receivables (Consolidated Financial Statements only)
The key audit matter
Trade receivables with a carrying amount of USD 13,035 thousand (Note 14) as at 31 December 2024 represent 21%
of the Group’s total assets and as at 31 December 2024 the accumulated allowance for expected credit losses (“ECLs”)
amounted to USD 3,752 thousand. The collectability of trade receivables is a key element of the Group’s working
capital management, which is managed on an ongoing basis by both the Group and local management.
The determination as to whether a trade receivable is collectable involves management judgement. Key judgements
and estimates in respect of the timing and measurement of ECLs include:
Ͳ The use of a general ECL provision matrix to calculate ECLs, determining the provision rates based on trade
receivables ageing analysis and adjusting historical loss rates with forward-looking information, if necessary.
Ͳ The use by management of this information to determine whether any additional loss allowance for ECL is
required for individual trade receivables in respect of the biggest customers with significant long outstanding
balances.
We focused on this area because it requires a high level of management judgement and due to the size of the amounts
involved. The accounting policy for provisions for ECLs of trade receivables is described in Note 2.3 and further analyzed
in Notes 3, 14 and 23 to the consolidated financial statements.
How the matter was addressed in our audit
We focused on assessing the assumptions used to calculate the ECLs on trade receivables, notably through analyzing
the provision matrix used for the collective assessment and the individual customer balances determined to be assessed
individually, evaluating the reasonability of ECL rates and loss patterns. We also performed recalculations of ECLs. In
our trade receivable ECLs evaluation, we also considered the results from other audit procedures such as the testing
of a sample of sales transactions to supporting documents, obtaining trade receivable confirmations, and performing
subsequent receipts testing of bank payments by customers. Furthermore, we assessed the appropriateness and
completeness of the presentation and disclosures of trade receivables and related ECLs in line with the requirements
of IFRS 9.
Reporting on Other Information
The Board of Directors is responsible for the other information. The other information comprises the information
included in the Management Report, the Board of Directors’ report on Corporate Social Responsibility and the Board
of Directors’ report on Corporate Governance, but does not include the consolidated and separate financial statements
and our auditor’s report thereon.
Our opinion on the consolidated and separate financial statements does not cover the other information and we do
not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the
other information identified above and, in doing so, consider whether the other information is materially inconsistent
with the consolidated and separate financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact. We have nothing to report in this regard.
AUDITORS REPORT
85
ANNUAL REPORT 2024 PETROLIA SE
Responsibilities of the Board of Directors and Those Charged with Governance for the Consolidated
and Separate Financial Statements
The Board of Directors is responsible for the preparation of consolidated and separate financial statements that give
a true and fair view in accordance with
IFRS Accounting Standards
as adopted by the European Union and the
requirements of the Cyprus Companies Law, Cap. 113, and for such internal control as the Board of Directors
determines is necessary to enable the preparation of consolidated and separate financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated and separate financial statements, the Board of Directors is responsible for assessing
the
Group’s and the
Company's ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate
the Group and the Company or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Group’s
and the Company’s
financial reporting
process.
Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated and separate financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of these consolidated and separate financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism
throughout the audit. We also:
Ͳ Identify and assess the risks of material misstatement of the consolidated and separate financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting
a material misstatement res
ulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
Ͳ Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of
the Group’s and the Company’s internal control.
Ͳ Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by the Board of Directors.
Ͳ Conclude on the appropriateness of the Board of Directors' use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group's and the Company’s
ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to
the related disclosures in the consolidated and separate financial statements
or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date
of our auditor's report. However, future events or conditions may cause the Group and the
Company to cease
to continue as a going concern.
Ͳ Evaluate the overall presentation, structure and content of the consolidated and separate financial
statements, including the disclosures, and whether the consolidated and separate financial statements
represent the underlying transactions and events in a manner that achieves a true and fair view.
Ͳ
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business within the Group as a basis for forming an opinion on the consolidated
financial statements. We are responsible
for the direction, supervision and review of the audit work performed
for the purposes of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control that we identify
during our audit.
AUDITORS REPORT
AUDITORS REPORT
86
ANNUAL REPORT 2024 PETROLIA SE
Auditor's Responsibilities for the Audit of the Consolidated and Separate Financial Statements
(continued)
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or
safeguards applied
.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the consolidated and separate financial statements of the current period and are therefore
the key audit matters.
Report on Other Legal and Regulatory Requirements
Requirements of Article 10(2) of the EU Regulation 537/2014
1.
Appointment of the Auditor and Period of Engagement
We were first appointed as auditors of the
Company and the
Group on 30 November 2012 by the Board of Directors.
Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted
engagement appointment of
13 years. In 2018,
the Company conducted a tendering process and we were
recommended for re
-appointment.
2.
Consistency of the Additional Report to the Audit Committee
We confirm that our audit opinion on the consolidated and separate financial statements expressed in this report is
consistent with the additional report to the Audit Committee of the Company, which we issued on 2
4 April 2025
in
accordance with Article 11 of the EU Regulation 537/2014.
3.
Provision of Non-audit Services
We declare that no prohibited non
-audit services referred to in Article 5 of the EU Regulation 537/2014 and Section
72 of the Auditors Law of 2017 were provided. In addition, there are no non
-audit services which were provided by
us to the Group and
the Company which have not been disclosed in the consolidated and separate financial
statements or the
Management Report.
European Single Electronic Format
We have examined the digital files of the European Single Electronic Format (ESEF) of Petrolia SE for the year ended
31 December 2024 comprising the XHTML file which includes the consolidated financial statements for the year then
ended and XBRL files with the marking up carried out by the entity of the consolidated statement of financial position
as at 31 December 2024, and the consolidated income statement, consolidated statement of comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and
all disclosures made in the consolidated financial statements or made by cross-reference therein to other parts of the
annual financial report for the year ended 31 December 2024 that correspond to the elements of Annex II of the EU
Delegated Regulation 2019/815 of 17 December 2018 of the European Commission, as amended from time to time
(the “ESEF Regulation”) (the “digital files”).
The Board of Directors of Petrolia SE is responsible for preparing and submitting the consolidated and separate
financial statements for the year ended 31 December 2024 in accordance with the requirements set out in the ESEF
Regulation.
Our responsibility is to examine the digital files prepared by the Board of Directors of Petrolia SE. According to the
Audit Guidelines issued by the Institute of Certified Public Accountants of Cyprus (the “Audit Guidelines”), we are
required to plan and perform our audit procedures in order to examine whether the content of the consolidated and
separate financial statements included in the digital files corresponds to the consolidated and separate financial
statements we have audited, and whether the format and marking up included in the digital files have been prepared
in all material respects, in accordance with the requirements of the ESEF Regulation.
AUDITORS REPORT
87
ANNUAL REPORT 2024 PETROLIA SE
European Single Electronic Format
(continued)
In our opinion, the digital files examined correspond to the consolidated and separate financial statements, and the
consolidated and separate financial statements included in the digital files are presented
and marked-up
in all material
respects, in accordance with the requirements of the ESEF Regulation.
Other Legal Requirements
Pursuant to the additional requirements of the Auditors Law of 2017, we report the following:
Ͳ In our opinion, based on the work undertaken in the course of our audit, the Management Report has been
prepared in accordance with the requirements of the Cyprus Companies Law, Cap. 113, and the information
given is consistent with the consolidated and separate financial statements.
Ͳ In light of the knowledge and understanding of the Group and the Company and their environment obtained
in the course of the audit, we are required to report if we have identified material misstatements in the
Management Report. We have nothing to report in this respect.
Ͳ In our opinion, based on the work undertaken in the course of our audit, the information included in the
corporate governance statement in accordance with the requirements of subparagraphs (iv) and (v) of
paragraph 2(a) of Article 151 of the Cyprus Companies Law, Cap. 113, and which is included as a specific
section of the Management Report, has been prepared in accordance with the requirements of the Cyprus
Companies Law, Cap, 113, and is consistent with the consolidated and separate financial statements.
Ͳ In our opinion, based on the work undertaken in the course of our audit, the corporate governance statement
includes all information referred to in subparagraphs (i), (ii), (iii), (vi) and (vii) of paragraph 2(a) of Article
151 of the Cyprus Companies Law, Cap. 113.
Ͳ In light of the knowledge and understanding of the Group and the Company and their environment obtained
in the course of the audit, we are required to report if we have identified material misstatements in the
corporate governance statement in relation to the information disclosed for items (iv) and (v) of subparagraph
2(a) of Article 151 of the Cyprus Companies Law, Cap. 113. We have nothing to report in this respect.
Other Matter
This report, including the opinion, has been prepared for and only for the Company’s members as a body in accordance
with Article 10(1) of the EU Regulation 537/2014 and Section 69 of the Auditors Law of 2017 and for no other purpose.
We do not, in giving this opinion, accept or assume responsibility for any other purpose or to any other person to
whose knowledge this report may come to.
The engagement partner on the audit resulting in this independent auditor’s report is Andreas Avraam.
Andreas Avraam
Certified Public Accountant and Registered Auditor
for and on behalf of
Ernst & Young Cyprus Limited
Certified Public Accountants and Registered Auditors
Limassol, 29 April 2025
AUDITORS REPORT
ANNUAL REPORT 2024 PETROLIA SE
88
CORPORATE
GOVER
NANCE
89
ANNUAL REPORT 2024 PETROLIA SE
THE BOARD OF DIRECTORS' REPORT
ON CORPORATE GOVERNANCE
CORPORATE GOVERNANCE
The Corporate Governance Policy of Petrolia
SE (“Petrolia” or “the Company”) addresses
the responsibility and interaction between
shareholders, the General Assembly, the
Board of Directors (“the Board”) and the
executive management. The purpose of this
document is to outline the current status
of Petrolia’s Corporate Governance Policy.
As Petrolia is listed on the Oslo Stock
Exchange, it follows the Norwegian Code
of Practice for Corporate Governance of
14 October 2021 (the “Code of Practice”).
Adherence to the Code of Practice is based
on a “comply or explain” principle, whereby
companies will be expected to either comply
with the Code of Practice or explain why
they have chosen an alternative approach.
The Code of Practice is published on www.
nues.no/English.
Below is an account outlining how Petrolia
has implemented the Code of Practice. This
account follows the same structure as the
Code of Practice and covers all sections
thereof. Petrolia complies with the Code of
Practice. Any deviations from the Code of
Practice are discussed under the relevant
sections. In addition to the Code of Practice,
the Norwegian Accounting Act § 3-3 stipu-
lates that companies must provide a report
on their policies and practices for corporate
governance either in the annual report or in
a document referred to in the annual report.
This report is integrated in this Corporate
Governance statement.
The holding company Petrolia SE is domiciled
in Cyprus and adheres to Cypriot law, con-
sequently various associated policies can be
subject to updates and revisions. Any updates
and changes in the Company’s Corporate
Governance Policy will be published on www.
petrolia.eu.
1. IMPLEMENTATION AND REPORTING ON
CORPORATE GOVERNANCE
Petrolia believes that maintaining solid stand-
ards of Corporate Governance will improve the
quality of discussions and work to be carried
out by the corporate bodies. Sound Corporate
Governance practice will strengthen confi
-
dence in the Company among shareholders,
the capital market and other interested par-
ties and thus contribute to value creation for
the shareholders over time.
2. BUSINESS GOALS AND STRATEGY
Petrolia’s business scope is clearly defined
in the Company’s Articles of Association,
as follows: “The purpose of the Company
is to conduct business within the areas of
petroleum, shipping, offshore, transport,
trade, industry and finance and other related
areas and also participate as shareholder or
otherwise in other businesses”.
As of April 2025, the Company is described
as follows in Stock Exchange Notices: Petrolia
SE has two business segments: Energy divi-
sion and Energy Service division and is listed
on Oslo Stock Exchange under the ticker
code PSE. The activity includes investments
in Petrolia NOCO AS, an independent oil &
gas company approved as a licensee and
pre-qualified as an operator on the Norwegian
Continental Shelf, and a group of leading
rental equipment companies for the global
oil industry.
The Company’s core objective is to secure
a competitive return on the invested capital
of the shareholders in the longer term. In
accordance with this purpose, the Board of
Directors and management shall actively de-
velop and control the Company and its assets.
Petrolia is under several obligations provided
for in the relevant Cypriot and Norwegian
laws and the laws of other jurisdictions in
respect of the business operations carried
out by the Company and its subsidiaries. The
Board of Directors has formulated a Code
of Ethics, implemented across the Company,
based on corporate values and corporate
social responsibility principles. The Code of
Ethics summarises the Company’s values and
standards of behaviour in, among others,
human rights, safety, security and the working
environment. In addition, the Company has
implemented a strict policy regarding Health,
Safety, Security and Environment (HSSE).
3. EQUITY AND DIVIDENDS
Petrolia shall have a capital structure at a
level appropriate to the Company’s objective,
strategy and risk profile. Dividend payments
will depend on Petrolia’s earnings, financial
situation and cash flow. The possibility of
further value creation through investments
will also be taken into account.
The Company’s key targets for 2024 were
to improve the Company’s financial position,
to improve the profitability of the Energy
Services division following the improved
market and to develop Petrolia NOCO AS.
Dividends to shareholders may be given on
an ad hoc basis.
Authorisations granted to the Board of
Directors to increase Petrolia’s share cap-
ital or to purchase its own shares shall, as
a general rule be restricted to defined pur-
poses. At each Annual General Meeting, the
shareholders shall have the opportunity to
evaluate and consider the authorisations
granted by the Board. Thus, the authorisa-
tions should be limited in time to no later than
the date of the next Annual General Meeting.
All authorisations not in compliance with
these guidelines should be accounted for in
the Annual Report.
As of 31 December 2024, the Company had
equity of USD 43 million, representing an
equity ratio of 68 per cent.
4. EQUAL TREATMENT OF SHAREHOLDERS
AND TRANSACTIONS WITH CLOSELY
RELATED PARTIES
Petrolia has one class of shares and all shares
are equal in all respects. Each share in the
Company carries one vote. All shares are
freely transferable. No shareholder shall be
treated unequally unless it is in the Company’s
and the shareholders’ common interests.
Any decision to waive the pre-emption rights
of existing shareholders to subscribe for
shares in the event of an increase in Petrolia’s
share capital must be justified, and an ex-
planation shall be appended to the agenda
for the General Meeting.
Any transactions carried out by Petrolia in
its own shares shall be made either through
the stock exchange or, if carried out in any
other way, at prevailing stock exchange prices.
If there is limited liquidity in the Company’s
shares, the Company should consider other
ways to ensure equal treatment of all
shareholders.
At the Annual General Meeting on 31 May
2024 the Board of Directors was granted
authorisations relating to acquiring its own
shares and issuing up to 13,250,000 new
shares (22.4%) waiving pre-emptive rights.
The details of the authorisations are provided
in the minutes to the Annual General Meeting,
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ANNUAL REPORT 2024 PETROLIA SE
CORPORATE GOVERNANCE
published 31 May 2024 on the Company’s
website www.petrolia.eu.
5. FREELY NEGOTIABLE SHARES
The shares are listed on the Oslo Stock
Exchange and are freely transferable. No
form of restriction on negotiability is included
in the Articles of Association of Petrolia.
6. GENERAL MEETING
Through the General Meeting the share-
holders exercise the highest authority in
Petrolia. General Meetings are convened by
written notice to all shareholders with known
addresses and a minimum of 21 days’ notice.
All shareholders are entitled to submit items
to the agenda, meet, speak and vote at the
General Meetings as is normally outlined in
the summons to the General Meeting and as
required by law.
Summons to general meetings, including
supporting documentation on relevant items
on the agenda, are made available on the
Company’s website no later than 21 days
prior to the General Meeting. The Company’s
Articles of Association stipulate that docu-
ments pertaining to matters to be deliberated
by the General Meeting shall only be made
available on the Company’s website, and not
normally be sent physically by post to the
shareholders unless required by law. In order
to ensure that the General Meeting is an ef-
fective forum for the views of the shareholders
and the Board of Directors, the Board shall
ensure that the information distributed is
sufficiently detailed and comprehensive as
to allow the shareholders to form a view on
all matters to be considered.
The Board of Directors shall take steps to
ensure that as many shareholders as possible
can exercise their rights by participating in
General Meetings in Petrolia, for instance
by setting deadlines for shareholders to give
notice of their intention to attend the meeting
(if any) as close to the date of the meeting
as possible and by giving shareholders who
are not able to attend the option to vote by
proxy. To the extent practicable, the Board
of Directors shall make arrangements for
shareholders voting by proxy to give voting
instructions on each matter to be considered
at the meeting.
As it is a priority for the General Meeting
to be conducted in a sound manner, with all
shareholder votes to be cast, to the extent
possible, on the basis of the same informa-
tion, the Company has thus far not deemed
it advisable to recommend the introduction
of electronic attendance. The Company will
contemplate the introduction of such arrange-
ments on an on-going basis in view of, inter
alia, the security and ease of use offered by
available systems.
The General Meetings shall be organised
in such a way as to facilitate dialogue be-
tween shareholders and the officers of the
Company. Thus, the Board of Directors must
ensure that the members of the Board and
the chairperson of the nomination commit-
tee are present at all General Meetings. In
addition, the Board of Directors shall make
arrangements to ensure an independent
Chair for each General Meeting, for instance
by arranging for the person who opens the
General Meeting to put forward a specific
proposal for a Chair.
The Minutes of the General Meetings will be
made available as soon as practicable on the
announcement system of the Oslo Stock Ex-
change, www.newsweb.no (ticker: PSE), and
on Petrolia’s own web site, www.petrolia.eu.
7. NOMINATION COMMITTEE
In accordance with its Articles, the Company
shall have a Nomination Committee. The com-
mittee shall present to the General Meeting
a proposal, justifying each candidate, for
candidates to be elected as members of the
Board. The committee shall also propose to
the General Meeting the Board members’
remuneration. The Nomination Committee
shall consist of three members who shall be
elected by the General Meeting. The committee
shall be independent of the Board and the
management of the Company. The General
Meeting shall set the committee members’
remuneration. The General Meeting may adopt
instructions for the Nomination Committee.
The costs of the Nomination Committee shall
be covered by the Company.
On 31 May 2024, Rob Arnott, Tove Kate Larsen
and Andros Constantinou were elected as
members of the Nomination Committee.
The work of the Nomination Committee is
regulated through Terms of Reference.
During this period, the Committee has un-
dertaken several key initiatives, including
Board Composition: We have reviewed the
composition of the Board to ensure it reflects
a diverse range of skills, experiences, and
perspectives necessary for effective deci-
sion making. Our aim has been to maintain
a balanced mix of expertise while promoting
diversity and inclusivity. The Committee will be
carrying out a detailed analysis of the skills
and experience for each director, in line with
the draft Director Diversity policy to be ap-
proved by the Board of Director during 2025.
8. BOARD OF DIRECTORS: COMPOSITION
AND INDEPENDENCE
The Articles of Association stipulate that the
Board of Directors shall consist of three to
five directors elected by the General Meeting.
According to the Articles of Association, the
Board of Directors is appointed for one year
by the General Meeting.
The Board of Directors comprised four direc-
tors as at 31 December 2024. The current
composition of the Board of Directors is de-
scribed in note 6 in the Petrolia SE Annual
Report 2024. The Board shall attend to the
common interests of all shareholders, and its
members shall meet the Company’s need for
expertise, capacity and diversity. Attention
should be paid to the fact that the Board
of Directors can function effectively as a
collegiate body. The Board shall consist of
individuals who are willing and able to work
as a team. Each member shall have suffi-
cient time available to devote to his or her
appointment as a director.
The Board of Directors has prepared a Board
Diversity Policy with the purpose to set out
the approach to diversity on the Board of
Directors and Senior Management, which
will be approved during 2025. The Board
will consider all aspects on diversity when
reviewing the composition and balance of
the Board and when conducting the annual
Board effectiveness review. The Board of
Directors expect to progress on the Board
members and senior management diversity
in the near future.
The composition of the Board of Directors
shall ensure that it can operate independently
91
ANNUAL REPORT 2024 PETROLIA SE
CORPORATE GOVERNANCE
of any special interests. Two of the four mem-
bers of the Board are independent of the
Company’s executive management, material
business contacts and main shareholder(s).
The two independent members are George
Hadjineophytou and Sjur Storaas. Polycarpos
Protopapas is the Managing Director of the
Company.
The Petrolia Group cannot, without the ap-
proval of the Board of Directors of Petrolia,
buy consultancy services from a board
member or from companies in which any board
member is an owner, employee or otherwise
has an interest.
Six board meetings were held during 2024,
with a complete attendance among the board
members.
All the directors are encouraged to hold
shares in Petrolia, however not to an extent
that can encourage a short-term approach
that is not in the best interest of Petrolia and
its shareholders. The shareholdings of the
directors as at 31 December 2024 are set
out in Note 17 to the consolidated financial
statements.
9. THE WORK OF THE BOARD OF DIRECTORS
The proceedings and responsibilities of the
Board of Directors have been laid down in
written guidelines adopted by the Board of
Directors. The main responsibilities of the
Board of Directors are to:
• Lead Petrolia’s strategic planning and make
decisions that form the basis for the executive
management to prepare for and implement
investments and structural measures. The
Company’s strategy shall be reviewed on a
regular basis;
• Ensure that all instructions given by the
Board of Directors are complied with;
• Ensure that the Board of Directors are
well informed about the Company’s and the
Group’s financial position;
• Ensure the adequacy of the Company’s
executive management and issue instructions
for its work in which the areas of responsi-
bilities and duties are clearly defined, also
with respect to the relationship between
the executive management and the Board
of Directors;
• Agree on dividend policy;
• Annually evaluate its work, performance,
composition, expertise, and that of the
managing director (the "MD”). The evalu-
ation of the Board’s work should be made
available to the Nomination Committee. The
Board of Directors did not evaluate its own
work in 2024;
• Ensure that a system of direction and in-
ternal control is established and maintained
as to ensure that the Group activities are
conducted in accordance with all rules and
regulation applicable to the Group, Petrolia’s
Articles of Association, its corporate values
and its ethical guidelines, as well as au-
thorisations and instructions approved by
the General Meeting. The internal control
arrangements must address the organisa-
tion and implementation of the Company’s
financial reporting. The Board of Directors
contributes its knowledge and experience
to the Company and has frequent meetings
with the executive management for updates
on the recent developments.
The Chair of the Board of Directors carries
a particular responsibility for ensuring that
the Board of Directors performs its duties in
a satisfactory manner and that the Board is
well organised. The Board of Directors will
elect a Deputy Chair who takes chair in the
event that the Chair of the Board cannot or
should not lead the work of the Board, in-
cluding matters of a material nature in which
the Chair has an active involvement.
The Board of Directors has appointed an Audit
Committee. The committee, which is composed
of Sjur Storaas and George Hadjineophytou,
shall prepare the Board’s follow up of the
financial reporting process, monitor inter-
nal control and risk handling systems and
communicate with the Group’s auditor on a
regular basis in connection with the prepa-
ration of the annual accounts. Furthermore,
the committee shall assess the auditor’s
independence, in particular to which extent
other services to the Group may jeopardise
the independence. The Audit Committee held
regular meetings in 2024 and in 2025 (up
to 29 April 2025) and reviewed all interim
reports prior to publication. The committee
works closely with the auditor.
The Board of Directors has appointed a
Remuneration Committee. The committee
is composed of Sjur Storaas, Berge Gerdt
Larsen and George Hadjineophytou.
The Managing Director is responsible for
the day-to-day management of the Company.
Furthermore, the Managing Director is
responsible for ensuring that the Company’s
accounts are in accordance with all applicable
legislation, and that the assets of the Company
are managed appropriately.
The Managing Director is appointed by the
Board of Directors and reports to the Board
of Directors. His or her powers and respon-
sibilities are defined by detailed instructions
adopted by the Board of Directors.
In the event of any material transactions
between the Company and its shareholders,
directors, members of the executive manage-
ment or close associates of any such parties,
the Board of Directors shall arrange for valu-
ation to be obtained from an independent third
party. The same shall apply to transactions
between companies within the Petrolia Group
where any of the companies involved have
minority shareholders. All such transactions
shall be reported by the Board of Directors
in the Annual Report. The Company has es-
tablished and operates guidelines to ensure
that members of the Board of Directors and
the executive management promptly notify the
Board of Directors if they have any significant
direct or indirect interest in any transaction
entered into by the Company.
A disclosure of any related party transaction
is presented in Note 24 in the Annual Report.
10. RISK MANAGEMENT AND INTERNAL
CONTROL
Risk management is primarily handled locally
in each Group company in accordance with
applicable rules and regulations. Internal
control in the Group is performed through
Group companies reporting to Petrolia on
operational and financial risk factors re-
lated to accounting, operations and HSE.
Key figures and information are reported
on a monthly basis, enabling the Board to
monitor the situation on a continuous basis
throughout the year.
The most important risk factors applicable
to the Group are thoroughly considered in
connection with yearly budgeting. The Audit
Committee reviews interim reports from the
Group companies and reports to the Board.
The annual accounts for all Group companies
are audited by the Group’s external auditor.
The Company’s risk management systems are
described in Note 23 of this Annual Report.
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ANNUAL REPORT 2024 PETROLIA SE
CORPORATE GOVERNANCE
11. REMUNERATION OF THE BOARD OF
DIRECTORS
The remuneration awarded to the members of
the Board of Directors is determined annually
by the General Meeting, based on the Board’s
responsibility, expertise, time commitment
and the complexity of the operations of the
Group. The Nomination Committee will pro-
pose the remuneration for approval by the
General Meeting.
The remuneration is not linked to the Group’s
performance. No directors have been granted
or will be granted share options, and no di-
rectors participate in the incentive programs
available for the executive management and/
or other employees.
More detailed information about the reward
of individual directors in 2024 is provided in
Note 6 to the consolidated financial state-
ments for the Group.
No members of the Board of Directors (or
companies with which they are associated)
shall take on specific assignments for the
Group, in addition to their appointment as
director unless instructed by the Board. If
such assignments are taken on, they shall be
disclosed to the full Board, and the remuner-
ation shall be approved by the Board. Further,
all remuneration paid to each of the directors
shall be described in the Annual Report. Such
description shall include details of all elements
of the remuneration and benefits of each
member of the Board and any remuneration
paid in addition to normal director’s fees.
Details regarding Polycarpos Protopapas’
remuneration are disclosed in Note 6 to the
consolidated financial statements.
12. REMUNERATION OF EXECUTIVE
MANAGEMENT
The Managing Director’s remuneration shall
be determined by a convened meeting of the
Board of Directors and the Board has adopt-
ed guidelines for the reward of executive
management.
Remuneration for the other members of the
executive management is determined by the
Managing Director and Chair of the Board
in accordance with guidelines provided by
the Board of Directors. The guidelines are
annually communicated to the General Meeting
and included in the Annual Report together
with detailed information on all elements of
the remuneration. The General Meeting shall
be informed of any changes made during
the last year.
The Company has no bonus schemes or in-
centives in place. As of 31 December 2024,
executive management held common shares
in the Company following the rights issue
offered to key employees and the Board of
Directors on 2 September 2011, in addition
to shares and options bought in the market.
Details regarding management remuneration
can be found in Note 6 to the consolidated
financial statements.
13. INFORMATION AND COMMUNICATION
Petrolia will ensure that the shareholders
receive accurate, clear, relevant and timely
information related to all matters of signif-
icance to shareholders. All information is
published in a way ensuring simultaneous
and equal access for all equity shareholders:
• Each year, Petrolia publishes a Financial
Calendar detailing key events.
• Information to shareholders is distributed
through stock exchange notices and/or on
www.petrolia.eu. To the extent required by
law, information is also sent by regular post
to shareholders.
• All information is available in English, and,
when required, Norwegian.
The Board of Directors has adopted guidelines
for the Company’s reporting of financial and
other information that is based on open-
ness, equal treatment of all shareholders
and participants in the securities market,
and restrictions imposed by law. The guide-
lines also include instructions on the internal
treatment of market sensitive information
and insider trading instructions and for the
Company’s contact with shareholders other
than through General Meetings.
To increase the share liquidity, the Company
aims to increase the investor activities going
forward, in addition to attending industry
conferences.
14. TAKE-OVERS
The Company’s objective is to create share-
holder value and the Board of Directors
and the executive management will not seek
to hinder or obstruct takeover bids for the
Company’s shares or activities unless there
are good reasons for this. In the event of any
possible takeover or restructuring situation,
the Board of Directors will take particular
care to protect shareholder value and the
common interests of all shareholders. The
Board of Directors will not exercise man-
dates or pass any resolutions to obstruct the
takeover bid unless approved by the General
Meeting following announcement of the bid. In
a takeover situation, the Board of Directors
will issue a recommendation to the share-
holders and arrange a valuation from an
independent expert.
Any transaction, which is in fact a disposal of
the Company’s activities, should be decided
by a General Meeting.
15. AUDITORS
Petrolia’s auditor is Ernst & Young Cyprus
Limited.
The auditor is elected by the General Meeting
and shall report to the General Meeting.
Excessive non-auditing work assigned to
the auditor may jeopardise his position and
diminish the public confidence in the auditor’s
integrity and independence from Petrolia.
The primary task of the auditor shall be to
perform the audit work required by law and
professional standards with the care, com-
petence and integrity prescribed by law or
said standards. The auditor will submit the
main features of the plan for the audit to the
Board of Directors annually. Further, the
Board of Directors will receive an annual
written confirmation from the auditor that the
requirements of independence and objectivity
have been met. The auditor shall also at least
once a year present to the Board of Directors
a review of the Company’s internal control
procedures, including identified weaknesses
and proposals for improvement.
The auditor will participate in any meetings
of the Board of Directors that deal with the
Annual Accounts. At these meetings, the au-
ditor shall review material changes in the
Company’s accounting principles, comment on
any material estimated accounting figures and
report all material matters on which there has
been disagreement between the auditor and
the executive management of the Company.
At least once a year, the Board of Directors
shall have a meeting with the auditor in which
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ANNUAL REPORT 2024 PETROLIA SE
no member of the Executive Management
is present. The Audit Committee will adopt
guidelines in respect of the use of the auditor
by the Company’s Executive Management for
services other than audit. Each year, the au-
ditor shall provide the Board with a summary
of all services in addition to audit work which
have been undertaken for the Company.
The Board of Directors must report the re-
muneration paid to the auditor at the Annual
General Meeting, including details of the fee
paid for audit work and any fees paid for
other specific assignments.
CORPORATE GOVERNANCE
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ANNUAL REPORT 2024 PETROLIA SE
PETROLIA SE - ANNUAL REPORT 2024
Tel: +357 25 725 777 Fax: +357 25 356 500 E-mail: post(@)petrolia.eu
PETROLIA SE: 205 Christodoulou Chatzipavlou Street, Loulloupis Court, 4th floor, office 401, 3036 Limassol, CYPRUS