Corporate Governance

Business Strategy

Jersey Oil and Gas is a UK energy company focused on creating shareholder value through the development of oil and gas assets and the execution of accretive transactions.

The strategy of the business is focused on unlocking the organic value of our existing assets in the Greater Buchan Area, combined with the pursuit of acquisitions that bring cash flow, diversity and quality investment opportunities into the portfolio. 

Central to the strategy is identifying and stewarding the right assets, where the Company can add value.  The key strategic priorities for achieving this involve:

• Leveraging the value of our core Greater Buchan Area assets
• Capitalising on the team’s experience and track record of successfully developing and growing oil and gas businesses
• Engaging in strategic M&A
• Maintaining a prudent and disciplined financial structure

In seeking to execute its strategy, the Company faces a number of key challenges including:

• The availability and ability to obtain access to commercially viable oil and gas production and development opportunities that are of a size that is appropriate to the Company
• Inherent geological risks and uncertainties associated with the oil and gas industry, along with exposure to adverse movements in commodity prices and fiscal policies
• Compliance with regulatory obligations and the exposure to potential legislative changes concerning the approach towards continued hydrocarbon production, development and exploration
• Availability of personnel with the skills necessary to develop the business 
• Availability of industry funding and access to capital markets
• Co-venturer and other third-party services and counterparty risks

Further information on risks and uncertainties that may represent challenges to the execution of the Company’s strategy and business model and how such risks and uncertainties are managed by the Company are set out in the Annual Report.

Shareholder Communication

The Board considers that good communication with shareholders, based on the mutual understanding of objectives, is important. In addition to the publication of the Company’s Annual and Interim reports, there is regular dialogue between the Board (led by the Chief Executive Officer) and shareholders, as well as the issuance of the required public announcements. The Chief Executive Officer and the Chief Finance Officer give regular presentations to investors, including one-to-one meetings with major shareholders during the year, in addition to specific meetings with shareholders relating to major transactions.

An up-to-date information flow is also maintained on the Company’s website, which contains all press announcements and financial reports as well as investor presentations and operational information on the Company’s activities.  The Board also encourages shareholders to attend the Annual General Meeting, at which members of the Board are available to answer questions and present a summary of the year’s activity and the corporate outlook.  The Board is kept informed of the views of major shareholders by briefings from the Executive Directors and the Company’s brokers. Analyses of the share register are also periodically circulated to the Board, together with updates from analysts.

Stakeholder Responsibilities

The Board takes a very active role in addressing the environmental, social and governance aspects of the business, with the Company’s operating activities led by the principles of the UN Global Compact.

It is well recognised that the long-term success of the Company is reliant upon the efforts of the employees of the Company and its contractors, suppliers, regulators and other stakeholders. As a relatively small and inclusive organisation, the Company is readily aware of any employee practices that are inconsistent with its values and plans. The Company nevertheless has in place many of the procedures found in larger companies, together with a wealth of experience on the Board in addressing employee related matters.

The Board firmly believes that high Health, Safety, Security and the Environment (HSSE) standards crucial to the Company’s operational success. All Directors, officers, managers, employees and contractors are required to comply with its HSSE Policy, which is reviewed periodically by the Board and, if necessary, updated and re-issued. Our overall approach to stakeholder and social responsibilities, is covered in further detail in the Sustainability Report contained in the Annual report.

Risk Management

The Board is responsible for the Company’s system of internal controls and for reviewing its effectiveness. The system is designed to manage, rather than eliminate, the risk of failure to achieve the execution of the Company’s strategic objectives and business model.  These controls include Board approval for all policies, procedures and significant projects.

The Board monitors financial controls through, a) a budgeting and planning process, requiring approval by the Board, b) the receipt of monthly management reports covering the Company’s financial affairs, c) internal controls as articulated in the Company’s Financial Reporting Procedures, and d) a review by the Audit Committee of the draft annual and interim reports, and the Company’s annual budget, before being recommended to the Board.

As regards non-financial risks and opportunities, and given the current size of the Company, it is considered preferable for this part of the Company’s risk management to be the responsibility of the Board as a whole, rather than a subcommittee. As part of this process, a company-wide Risk Register is maintained and discussed at Board meetings.

Board Management

The Board is the main decision-making body of the Company which meets both formally and informally during the year.  The Board is comprised of:

• Les Thomas, Non-Executive Chairman
• Andrew Benitz, Chief Executive Officer
• Graham Forbes, Chief Financial Officer
• Frank Moxon, Senior Independent Director
• Marcus Stanton, Non-Executive Director

All the Executive Directors are employed under service contracts and work full time for the Company.  The Non-Executive Directors work part time, for approximately three to six full days each month, with additional time commitments depending on new Company developments as they arise. The Board considers that all three of the Non-Executive Directors are independent in character and judgement. All three have shareholdings (acquired with their own funds) and a limited number of share options (granted as part of the annual remuneration process and approved by the Board), and the Board considers that this does not impair their judgement.

The Board and its Committees receive appropriate and timely information prior to each meeting. A formal agenda is produced for each meeting and Board Committee papers are distributed before meetings take place. Specific actions arising from meetings are agreed by the Board or relevant committee and then followed up by management.

All directors spend such time as is necessary to effectively carry out their roles and directors have access to advice or services needed to enable them to carry out their roles and duties.  In addition, at the end of each month the Chief Executive Officer briefs the Non-Executive Directors on current developments.

Board Experience

The Board seeks to maintain an appropriate mix of experience, skills, personal qualities and capabilities in order to deliver the strategy of the Company. The size of the Board is considered to be sufficient to provide the necessary experience and perspective to its decision-making process given the size and nature of the Company.

The skills and experience of the Board are set out in the Annual Report and are considered by the Board as representing an appropriate range of capabilities needed to deliver the strategy of the Company for the benefit of its shareholders over the medium to long term. The experience and knowledge of each of the Directors, and the steps taken to keep these skill sets up to date, gives them the ability to constructively challenge strategy and to scrutinise performance.

Board Performance

The Board has determined that it shall itself be responsible for assessing the effectiveness and contributions of the Board as a whole, its committees and individual Directors. The Directors believe that the size of the Board allows for open discussion, with an evaluation of Board performance being undertaken on an annual or on an ad hoc basis, as considered appropriate. The performance of the committees is also evaluated by the Chairman of the Board.

Succession planning is reviewed periodically both at the Board level and at the level of senior management. This is undertaken from the perspective of the development of the Board as a whole as the business develops and in the scenario of any unanticipated departures.

Corporate Culture

The Board believes that the long-term success of the Company is underpinned by a corporate culture that is based on ethical values and behaviours. Many of these are highlighted in an extensive employee Staff Handbook which draws
together all the Company’s rules, policies and procedures. These values, which the Company seeks to instil throughout the business, include integrity, respect, honesty and transparency and are led by the behavioural example of individual Board members, particularly the Chief Executive Officer and the Chief Financial Officer.

The Company also operates a well-defined organisational structure through which it seeks to determine that the ethical values and behaviours are recognised and respected, in addition to which every employee is aware of the established whistleblowing procedures. These include a formal Anti-Bribery and Corruption Policy under which the Company is committed to acting legally, fairly and ethically in the course of all its activities and engagements. The Company does not tolerate bribery and corruption in any of its forms, nor will it tolerate it in those with whom it does business.

Governance Structures

The Company maintains appropriate governance structures and processes according to its size and complexity.  The Company is committed to reviewing its corporate governance policies and procedures to ensure they remain appropriate as it continues to grow and in response to any changes in regulatory and other relevant guidance.

The Board is the main decision-making body of the Company, being responsible for, a) the overall direction and strategy of the business, b) monitoring performance, c) understanding risk, and d) reviewing controls. It is collectively responsible for the success of the Company.

The Board of Directors comprises a Non-Executive Chairman (Les Thomas), a Chief Financial Officer (Graham Forbes), a Senior Independent Director (Frank Moxon) and one other Non-Executive Director (Marcus Stanton).

The Chairman’s role is part-time, and he is a Non-Executive Director. His key responsibility is the leadership of the Board, and this is primarily effected through regular Board meetings as well as contact with other Board members and interested parties between Board meetings. The Chairman is also responsible for the establishment of sound corporate governance principles and practices.

The Chief Executive Officer is responsible for the day-to-day running of the Company’s operations and for implementing the strategy agreed by the Board, in conjunction with the other members of the executive team.  The Chief Financial Officer is responsible for the Company’s finances, in addition to other aspects of the business, including risk management, property matters, insurance and human resources.

There is a formal schedule of matters specifically reserved for the Board, in addition to the formal matters required to be considered by the Board under the Companies Act. This list includes matters relating to: a) strategy and policy, b) acquisition and divestment proposals, c) approval of major capital investments, d) risk management policy, e) proposals from the Audit Committee, the Remuneration Committee and the Nomination Committee, f) significant financing matters, and g) statutory reporting to shareholders.

At the formal meetings of the Board an agenda is prepared by the Chairman which includes presentations by each of the executive directors together with reports and recommendations from the relevant sub-committees of the Board. 

The Board has established three Committees – the Audit Committee, the Remuneration Committee and the Nominations Committee.

Audit Committee
Chair: Marcus Stanton (NED)
Other Members: Frank Moxon (SID), Les Thomas (Non-Executive Chairman)

Under its terms of reference, the Audit Committee is required to meet at least twice a year, at which Executive Directors may attend by invitation, and its responsibilities include:

• Monitoring the independence and objectivity of the Auditors;
• Reviewing and approving the external auditor’s terms of engagement, scope of work, fees, the findings arising from the external audit work and external audit performance;
• Monitoring the integrity of the Group’s published financial information;
  Reviewing the risk identification and risk management processes of the Group; and
• Reviewing the Group’s procedures to prevent bribery and corruption in addition to ensuring that appropriate whistleblowing arrangements are in place.

Due to the current size of the business, it is not considered appropriate to have an internal audit function.

Remuneration Committee
Chair: Frank Moxon (SID)
Other Members: Les Thomas (Non-Executive Chairman), Marcus Stanton (NED)

Under its terms of reference, it is required to meet at least twice a year and its responsibilities include:

• Determining and agreeing with the Board the broad policy for the remuneration of the Executive Directors;
• Determine the individual remuneration package of each Executive Director;
• Review all share incentive plans; and
• Recommending option grants for the Executive Directors and other employees, as considered appropriate.

No Director is involved in deciding their own remuneration. The Non-Executive Directors’ remuneration is decided by the Executive Directors.

Nominations Committee
Chair: Frank Moxon (SID)
Other Members: Les Thomas (Non-Executive Chairman), Marcus Stanton (NED)

Under its terms of reference, it is required to meet at least twice a year and its responsibilities include:

a) Evaluating the balance of skills, experience and diversity on the Board; and
b) Approving candidates for Board vacancies, save for the appointment of the Chairman of the Board or the Chief Executive Officer, which are matters for the whole Board.

Sustainability Committee

Chair: Les Thomas (Non-Executive Chairman)
Other Members: Frank Moxon (SID), Marcus Stanton (NED)

In 2024 the Board established a specific Sustainability Committee as part of advancing its formal review of the Company’s strategic plans and objectives concerning the long term management of matters concerning the environment, safety and the business’ social licence to operator.

The Committee is required to meet at least once a year and its responsibilities include:

• Review and monitor the Company’s operational safety, health and environmental performance, along with its associated risk management strategies;
• Review the regulatory and policy developments designed to tackle climate change, as well as the requirements and initiatives set for the industry and the Company in response to decarbonisation targets and supporting the energy transition and route to net zero ;
• Review and monitor the Company’s obligations and objectives in relation to climate-related financial disclosure requirements.

Stakeholder Communications

The Board considers that good communication with shareholders and other relevant stakeholders, based on the mutual understanding of objectives, is important.  The Company maintains an ongoing dialogue with shareholders as set out in Principle 2 (Stakeholder Responsibilities), in seeking to understand and meet shareholders needs and expectations. This is achieved through direct engagement and meetings with shareholders, as well as through communications such as the Annual Report, the Interim Report, Corporate Presentations, Regulatory News Releases, the Company’s’ website and the Annual General Meeting.

With regard to industry stakeholders, the Company holds regular meetings with all the key regulatory authorities, including the North Sea Transition Authority, the Health and Safety Executive and the Offshore Petroleum Regulator for Environment and Decommissioning.  The Company also actively engages with industry bodies such as Offshore Energies UK, its peers in the oil and gas operator community and the wider supply chain that directly serves the industry and those businesses involved in supporting and leading the energy transition.