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Corporate Governance

Corporate Governance Statement

The Board recognise that good standards of corporate governance help the Company to achieve its strategic goals and is vital for the success of the Company. The Company adopts proper standards of corporate governance and follows the principles of best practice set out in the QCA Corporate Governance Code (the "QCA Code"), so far as it is appropriate for the size and nature of the Group and the constitution of the Board. Further details of the application of the principles set out in the QCA Code by the Company can be found in its Annual Report.

Board Composition, Operation and Independence

The Board currently comprises the Chief Executive Officer, the Non-Executive Chairman and two Non-Executive Directors, details for whom are outlined on the Directors page. Each of the Directors has extensive knowledge of the oil and gas industry combined with general business and financial skills. All of the Directors bring judgement to bear on issues of strategy, performance, resources, key appointments and standards. The Board meets regularly throughout the year and all the necessary information is supplied to the Directors on a timely basis to enable them to discharge their duties effectively. The Board is responsible to the shareholders for the proper management of the Company.

The Board has a formal schedule of matters specifically reserved for its decision. These include strategic planning, business acquisitions or disposals, authorisation of major capital expenditure and material contractual arrangements, changes to the Group’s capital structure, setting policies for the conduct of business, approval of budgets, remuneration policy of Directors and senior management, and taking on debt and approval of financial statements. Other matters are delegated to the Committees of the Board and executive Directors, supported by policies for reporting to the Board.

Leo Koot is the Senior Independent Director. The Senior Independent Director is available to Shareholders if they have concerns which, through the normal channels of contact with the Chairman or CEO, have not been resolved or for which such contact is inappropriate.

Induction and Training

New Directors, on their appointment to the Board, are briefed by the Board and management on the activities of the Group and its key business and financial risks, the Terms of Reference of the Board and its Committees, the list of Board reserved matters, and the latest financial information about the Group. The Chairman ensures that Directors update their skills, knowledge and familiarity with the Company to fulfil their roles on the Board and on Board Committees. Ongoing training is available as necessary and includes updates from the Company Secretary on changes to the AIM rules, the QCA Code, requirements under the Companies Act and other regulatory matters. Directors may consult with the Company Secretary at any time on matters related to their role on the Board. All Directors may have access to independent professional advice at the Company’s expense.

Evaluation of the Board’s Performance

Performance evaluation takes place for individual Directors, the Board and its Committees and includes assessing the effectiveness of the Board as a whole. The evaluation of the performance of Directors is carried out using peer appraisal questionnaires which combine business and personal performance and includes discussions with the Senior Independent Director and the Senior Independent Director with the Chairman. Aspects of performance include attendance and participation at Board meetings, quality of involvement in Committees, commitment and effectiveness of their contribution to Board activities (including the AGM and shareholder communications), the adequacy of training and non-executive Directors’ independence. The process is conducted and reviewed by the Senior Independent Director, on behalf of the Nominations Committee; the Company Secretary is advised of its completion. The performance of the Chairman is reviewed annually in a meeting of the non-executive Directors, led by the Senior Independent Director. This review takes into account the views of executive Directors.

Retirement and Re-election

The Company’s Articles of association require that any Director who has been a Director at the preceding two Annual General Meetings and who was not appointed or re-appointed by the Company, retire and stand for re-election. All new Directors appointed since the previous Annual General Meeting need to stand for election at the following Annual General Meeting.

Board Sub-Committees

The Board of Directors currently has 3 sub-committees; the Audit, Remuneration and Nomination Committees.

Terms of Reference

The terms of reference for these sub-committees may be downloaded using the links below.

The membership of each sub-committee is as follows:

Audit Committee

Leo Koot (Chairman) and Ilya Belyaev

Remuneration Committee

Leo Koot (Chairman) and Ilya Belyaev

Nominations Committee

Michael Kroupeev (Chairman), David Marshall, Leo Koot and Ilya Belyaev

No executive Directors are members of any of the Company’s Audit and Remuneration sub-committees, however, where appropriate, they may be invited to attend meetings to provide a suitable context for its discussions.