Company registration number 02299264 (England and Wales)
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
ANNUAL REPORT AND FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
COMPANY INFORMATION
Directors
Mr P J Johnson
Mr R P Moore
Mr R M Smith
(Appointed 20 August 2024)
Secretary
Mrs D A Johnson
Company number
02299264
Registered office
1-2 Apollo Studios
Charlton Kings Road
London
NW5 2SB
Auditor
Bright Grahame Murray
Emperor's Gate
114a Cromwell Road
Kensington
London
SW7 4AG
Bankers
Natwest
Baker Street Branch
69 Baker Street
London
W1A 2BA
Solicitors
Wagner & Co
25 Church Crescent
Whetstone
London
N20 0JR
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
CONTENTS
Page
Strategic report
1 - 3
Directors' report
4 - 6
Independent auditor's report
7 - 9
Group statement of comprehensive income
10
Group statement of financial position
11
Parent company statement of financial position
12 - 13
Group statement of changes in equity
14
Parent company statement of changes in equity
15
Group statement of cash flows
16
Parent company statement of cash flows
17
Notes to the group financial statements
18 - 40
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 1 -

The directors present the strategic report for the year ended 31 December 2023.

Review of the business

Established in 1988, OPC is a global energy consultancy, providing our clients with the capability and capacity to enable the delivery of upstream energy projects globally. We specialise in the provision of technical support services to clients across the upstream energy, CO2 and gas storage sectors.

OPC offer the following main service to our clients.

The results for the period and the financial position of the Company and Group are shown in the annexed financial statements.

In 2023 the OPC Group reported and EBITDA of £556,303. The overall success that OPC enjoyed resulted from a growing portfolio of clients, repeat business and a general stability of overall global market conditions. In 2023, OPC acquired OPES International Pty Ltd, an upstream energy consultancy based in Australia, which has been renamed OPC APAC Pty Ltd. OPC APAC has expanded OPC’s service offering into the Asia Pacific region and allowed OPC to build on and add value to an already successful consulting business. Furthermore, OPC’s Energy Transition business, primarily focusing on Carbon Capture Utilisation and Storage (CCUS), gained significant traction in 2023, diversifying OPC’s service offering and opening up new revenue streams which have resulted in profitable results for the group.

The Directors of OPC remain optimistic about the future prospects of the company and for continuing development of its core activities. The company has established robust business practices over its 35 years in operation and continually adapts its strategy to align with changing market conditions and the business needs. Continued positive performance has been demonstrated by the OPC Group in 2024.

Value Adding Assets

OPC has purchased proprietary software over the years which it utilises in the provision of technical studies services. The software that OPC own has a value of over £1,000,000 based not only on the historical purchase price but on its current replacement cost. This software is almost fully depreciated, with its value not evident from examining the balance sheet. However, the software that OPC own is charged out for a fee and is thus a valuable income generating asset vital to the provision of almost all technical projects.

OPC Limited also has unrelieved tax losses of £4,192,142 that remain available to offset against future taxable gains.

Principal risks and uncertainties

 

The management team at OPC has identified the following factors as major potential risks to the successful performance of its business. Some, such as global pandemics, political uncertainties in the regions where OPC operate, ongoing conflict, IT failure, quality of service and staffing are specific risks that require specific, identified actions to mitigate their effects. Others, such as the impact of competition, are areas addressed through strategic planning and operational management processes. Like with most industries, the energy industry has been impacted by pandemics, wars and political instability which can result in a decline in global natural resource demand and a fall in commodity prices. The directors have taken steps to refocus the business during periods of risk and uncertainty to ensure the business identifies and minimises its risks, capitalises on its opportunities and remains in a strong financial position with the ability to continue to service new and existing clients to the highest standards.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 2 -

Competition in the technical consulting industry

The Company operates in a niche market by providing technical services, training and consultancy to companies in the energy sector and conducting various outsourced projects. Although the company has seen a fall in competition in the last year, its failure to compete effectively could have a material adverse effect on its results. The Company has been successful in contracting with significant new clients over the past year, some of which have diverted from competitors, as well as tendering for several large projects. OPC has also diversified its services offering to capitalising on new emerging markets such as those associated with decarbonisation initiatives.

Consumer preferences, perception and spending

The technical consulting industry is subject to changes in consumer preferences, perceptions and spending habits. The Company's performance depends on factors which may affect the level and patterns of consumer spending in the energy sector and on its ability to anticipate and respond to changes in consumer preferences. The prices the Company’s clients are willing to pay for its services have remained at relatively stable levels which tend to be positively correlated to oil prices. However, with a fall in competition in the industry and the stabilisation of the market, OPC has implemented a strategy that has seen its rates follow an upward trend.

Poor political and economic conditions

The Company derives a substantial proportion of its profits from the Middle East region and is therefore sensitive to political stability and fluctuations in the region. UK governmental policy for the energy industry directly impacts OPC’s business from an opportunity, regulatory and financial standpoint. When supply is affected in the local UK market, as we are experiencing, we are seeing positive impacts on opportunities for growth and prosperity in our industry.

Failure or interruption in service supply

The Company employs highly skilled staff in order to deliver quality services to the companies in the energy industry. Its operations may be interrupted or otherwise adversely affected by non-availability of these skilled staff. However, the Company has access to a broad base of skilled flexible labour which can be utilised to mitigate any permanent staff shortage. OPC’s Consultant Services division is dedicated to ensuring that OPC actively grows and maintains the in-house database, allowing OPC access to the best expertise to service its operations.

In order to improve staff retention, OPC launched an Employee Management Incentive (EMI) Scheme in 2023, which has seen the company offer options to its employees to purchase equity in OPC.

Failure or unavailability of operational infrastructure

Any failure, interruption or unavailability of the Company's operational infrastructure could lead to increased costs or disruption to supply. The Company has invested in cloud-based IT solutions to ensure continuity of service in the unlikely event of infrastructure failure at the Company’s premises.

Cost inflation and legislative change

The Company's operational costs are affected by underlying cost inflation and legislative and fiscal policy changes in relation to, for example, wages, property overheads and taxation on profits.

Global energy prices

The Company operates in a market which can be heavily influenced by global commodity prices. A significant drop in prices can adversely affect the performance of the company. Although there is a lag commodity price movement and the company performance, the two are largely positively correlated. However, to ensure profit margins are maintained, OPC will renegotiate its rates with suppliers and ensure that any fall in demand or rate reductions can be mitigated by a lower cost base.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 3 -

Energy Transition and the drive to Net Zero

OPC has developed services to support our clients transition of their energy systems to net zero and mitigating the carbon intensity of existing processes. Whilst the transition does represent an opportunity for long-term growth, it also enables businesses to begin thinking about how to mitigate climate change risks on their business models, avoid stranded assets and reputational harm, and prepare for net zero in the future. OPC can offer clients an opportunity to leverage this change to their benefit.

Services offered by OPC to address our clients energy transition needs consist of the following;

On behalf of the board

Mr P J Johnson
Director
11 October 2024
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2023
- 4 -

The directors present their report with the financial statements of the company and the group for the year ended 31 December 2023.

Principal activities

The principal activity of the company and its subsidiaries, and the nature of the group’s operations are set out in the Strategic Report.

Branches

The parent company, Oilfield Production Consultants (OPC) UK Limited, performs a proportion of its operations through foreign branches based in Kazakhstan, Dubai and Qatar.

Results and dividends

The results for the year are set out on page 10.

No ordinary dividends were paid. The directors do not recommend payment of a further dividend.

Future Developments

The company continues to provide consultancy services onshore & offshore globally and continued positive performance is expected in 2024. OPC’s sales continue to grow and it is expected that OPC will maintain profitability during this time and beyond.

Directors

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

Mr P J Johnson
Mr R P Moore
Mr R M Smith
(Appointed 20 August 2024)
Supplier payment policy

The group's current policy concerning the payment of trade creditors is to follow the CBI's Prompt Payers Code (copies are available from the CBI, Centre Point, 103 New Oxford Street, London WC1A 1DU).

 

The group's current policy concerning the payment of trade creditors is to:

 

Trade creditors of the group at the year end were equivalent to 64 day's purchases, based on the average daily amount invoiced by suppliers during the year.

Financial instruments
Liquidity risk

The Company and the Group manage their cash and borrowing requirements in order to maximise interest income and minimise interest expense, whilst ensuring the Company and the Group have sufficient liquid resources to meet the operating needs of the businesses.

Foreign currency risk

The Company's and the Group's foreign currency exposure arises from trading with overseas companies. Company and Group policy permits but does not demand that this exposure is hedged in order to fix the cost in sterling. The Company and the Group take advantage of natural trading hedges to minimise such foreign currency exposure.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 5 -
Credit risk

Investments of cash surpluses and borrowings are made through banks and companies which must fulfil credit rating criteria approved by the board.

 

All customers who wish to trade on credit terms are subject to credit verification procedures. Trade debtors are monitored on an ongoing basis and provision is made for doubtful debts where necessary.

Future developments

The company continues to provide upstream energy consultancy services globally and continued positive performance is expected in 2024. OPC’s sales continue to grow and it is expected that OPC will maintain profitability during this time and beyond.

Auditor

In accordance with the company's articles, a resolution proposing that be reappointed as auditor of the company and group will be put at a General Meeting.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

 

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the group and parent company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the United Kingdom. Under company law the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

 

In preparing these financial statements, International Accounting Standard 1 requires that directors:

 

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Statement of disclosure to auditor

Each director in office at the date of approval of this annual report confirms that:

 

This confirmation is given and should be interpreted in accordance with the provisions of section 418 of the Companies Act 2006.

Small companies exemption

This report has been prepared in accordance with the provisions applicable to companies entitled to the small companies exemption.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 6 -
On behalf of the board
Mr P J Johnson
Director
11 October 2024
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
INDEPENDENT AUDITOR'S REPORT
TO THE MEMBERS OF OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
- 7 -
Opinion

We have audited the financial statements of Oilfield Production Consultants (OPC) Limited (the ‘parent company’) and its subsidiaries (the ‘group’) for the year ended 31 December 2023 which comprise the group statement of comprehensive income, the group and parent company statement of financial position, the group and parent company statement of changes in equity, the group and parent company statement of cash flows and the group and parent company notes to the financial statements, including significant accounting policies.

 

The financial reporting framework that has been applied in their preparation is applicable law and UK adopted international accounting standards.

In our opinion:

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the group and parent company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

 

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the group's and parent company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

 

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
- 8 -
Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and parent company and their environment obtained in the course of the audit, we have not identified material misstatements in the directors' report.

 

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

Responsibilities of directors

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, the directors are responsible for assessing the parent 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 directors either intend to liquidate the parent company or to cease operations, or have no realistic alternative but to do so.

Auditor's responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the 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 (UK) 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 financial statements.

The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

The auditor’s assessment of the susceptibility of the entity’s financial statements to material misstatement, including how fraud might occur. ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5

Which laws and regulations the auditor identified as being of significance in the context of the entity. ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5

The auditor’s explanation of its audit response will depend on the risks identified but may include:

- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.

- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing minutes of meetings of those charged with governance.

- Reviewing internal audit reports.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
INDEPENDENT AUDITOR'S REPORT (CONTINUED)
TO THE MEMBERS OF OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
- 9 -

The auditor’s explanation of its audit response will depend on the risks identified but may include:

- Enquiry of management, those charged with governance and the entity’s solicitors (or in-house legal team) around actual and potential litigation and claims.

- Enquiry of entity staff in tax and compliance functions to identify any instances of non-compliance with laws and regulations.

- Reviewing minutes of meetings of those charged with governance.

- Reviewing internal audit reports.

- Reviewing financial statement disclosures and testing to supporting documentation to assess compliance with applicable laws and regulations.

- Auditing the risk of management override of controls, including through testing journal entries and other adjustments for appropriateness, and evaluating the business rationale of significant transactions outside the normal course of business.

ICAEW guidance relating to reporting on irregularities, November 2020, based on ISA 700 A39-1 to A39-5

A further description of our responsibilities is available on the Financial Reporting Council's website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.

Robert Moore (Senior Statutory Auditor)
For and on behalf of Bright Grahame Murray
Chartered Accountants
Statutory Auditor
Emperor's Gate
114a Cromwell Road
Kensington
London
SW7 4AG
14 October 2024
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2023
- 10 -
2023
2022
Notes
£
£
Revenue
4
7,911,942
7,374,203
Cost of sales
(5,781,295)
(5,642,718)
Gross profit
2,130,647
1,731,485
Other operating income
-
879
Administrative expenses less depreciation, foreign exchange, and impairments
(1,574,344)
(1,388,634)
EBITDA
5
556,303
343,730
Depreciation
(90,957)
(110,806)
Investment revenues
9
3,706
420
Finance costs
10
(209,479)
281,108
Profit before taxation
259,573
514,452
Income tax expense
11
(90,089)
(112,000)
Profit and total comprehensive income for the year
169,484
402,452
Profit for the financial year is all attributable to the owners of the parent company.
Total comprehensive income for the year is all attributable to the owners of the parent company.
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
GROUP STATEMENT OF FINANCIAL POSITION
AS AT
31 DECEMBER 2023
31 December 2023
- 11 -
2023
2022
Notes
£
£
Non-current assets
Goodwill
12
145,922
-
0
Property, plant and equipment
13
915,464
895,989
Right-of-use assets
15
34,227
42,201
Investments
17
5,000
5,000
1,100,613
943,190
Current assets
Trade and other receivables
20
2,550,554
2,440,610
Cash and cash equivalents
921,513
1,231,541
3,472,067
3,672,151
Current liabilities
Trade and other payables
25
1,522,620
1,246,393
Borrowings
23
247,105
200,000
Lease liabilities
34
47,944
63,422
1,817,669
1,509,815
Net current assets
1,654,398
2,162,336
Non-current liabilities
Borrowings
23
383,334
583,333
Net assets
2,371,677
2,522,193
Equity
Called up share capital
28
10,000
10,000
Share premium account
29
136,570
136,570
Revaluation reserve
30
362,554
362,554
Cumulative translation reserve
32
(43,692)
(43,692)
Capital redemption reserve
31
392
392
Retained earnings
1,905,853
2,056,369
Total equity
2,371,677
2,522,193
The financial statements were approved by the board of directors and authorised for issue on 11 October 2024 and are signed on its behalf by:
Mr P J Johnson
Director
Company registration number 02299264 (England and Wales)
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
31 December 2023
- 12 -
2023
2022
Notes
£
£
Non-current assets
Property, plant and equipment
14
914,015
894,493
Right-of-use assets
16
34,227
42,201
Investments
18
143,650
9,747
1,091,892
946,441
Current assets
Trade and other receivables
22
3,129,958
3,133,595
Cash and cash equivalents
744,812
1,162,961
3,874,770
4,296,556
Current liabilities
Trade and other payables
26
1,429,497
1,264,845
Borrowings
24
200,000
200,000
Lease liabilities
47,944
63,422
1,677,441
1,528,267
Net current assets
2,197,329
2,768,289
Non-current liabilities
Borrowings
24
383,334
583,333
Net assets
2,905,887
3,131,397
Equity
Called up share capital
10,000
10,000
Share premium account
136,570
136,570
Revaluation reserve
362,554
362,554
Cumulative translation reserve
(174,333)
(174,333)
Capital redemption reserve
392
392
Retained earnings
2,570,704
2,796,214
Total equity
2,905,887
3,131,397

As permitted by trues408 Companies Act 2006, the company has not presented its own income statement and related notes. The company’s profit for the year was £94,490 (2022 - £531,632 profit).

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
COMPANY STATEMENT OF FINANCIAL POSITION (CONTINUED)
AS AT 31 DECEMBER 2023
31 December 2023
- 13 -
The financial statements were approved by the board of directors and authorised for issue on 11 October 2024 and are signed on its behalf by:
Mr P J Johnson
Director
Company registration number 02299264 (England and Wales)
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 14 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Cumulative translation reserve
Retained earnings
Total
£
£
£
£
£
£
£
Balance at 1 January 2022
10,000
136,570
362,554
392
(43,692)
1,754,077
2,219,901
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
-
-
-
402,452
402,452
Transactions with owners:
Own shares acquired
-
-
-
-
-
(100,160)
(100,160)
Balance at 31 December 2022
10,000
136,570
362,554
392
(43,692)
2,056,369
2,522,193
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
-
-
169,484
169,484
Transactions with owners:
Own shares acquired
-
-
-
-
-
(320,000)
(320,000)
Balance at 31 December 2023
10,000
136,570
362,554
392
(43,692)
1,905,853
2,371,677
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2023
- 15 -
Share capital
Share premium account
Revaluation reserve
Capital redemption reserve
Cumulative translation reserve
Retained earnings
Total
£
£
£
£
£
£
£
Balance at 1 January 2022
10,000
136,570
362,554
392
(174,333)
2,364,742
2,699,925
Year ended 31 December 2022:
Profit and total comprehensive income
-
-
-
-
-
531,632
531,632
Transactions with owners:
Own shares acquired
-
-
-
-
-
(100,160)
(100,160)
Balance at 31 December 2022
10,000
136,570
362,554
392
(174,333)
2,796,214
3,131,397
Year ended 31 December 2023:
Profit and total comprehensive income
-
-
-
-
-
94,490
94,490
Transactions with owners:
Own shares acquired
-
-
-
-
-
(320,000)
(320,000)
Balance at 31 December 2023
10,000
136,570
362,554
392
(174,333)
2,570,704
2,905,887
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
GROUP STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 16 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
36
506,193
897,373
Interest paid
(89,462)
(25,247)
Income taxes paid
(90,089)
(112,000)
Net cash inflow from operating activities
326,642
760,126
Investing activities
Purchase of subsidiary
(49,546)
-
0
Purchase of property, plant and equipment
(63,209)
(9,483)
Purchase of right of use asset
(39,249)
(66,745)
Interest received
3,706
420
Net cash used in investing activities
(148,298)
(75,808)
Financing activities
Purchase of treasury shares
(320,000)
(100,160)
Repayment of bank loans
(152,894)
(200,001)
Payment of lease liabilities
(15,478)
8,496
Net cash used in financing activities
(488,372)
(291,665)
Net (decrease)/increase in cash and cash equivalents
(310,028)
392,653
Cash and cash equivalents at beginning of year
1,231,541
838,888
Cash and cash equivalents at end of year
921,513
1,231,541
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
COMPANY STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 17 -
2023
2022
Notes
£
£
£
£
Cash flows from operating activities
Cash generated from operations
37
490,819
913,577
Interest paid
(85,945)
(25,216)
Income taxes paid
(80,562)
(108,913)
Net cash inflow from operating activities
324,312
779,448
Investing activities
Purchase of property, plant and equipment
(63,256)
(9,085)
Purchase of right of use asset
(39,249)
(66,745)
Purchase of subsidiary
(104,979)
-
0
Interest received
500
420
Net cash used in investing activities
(206,984)
(75,410)
Financing activities
Purchase of treasury shares
(320,000)
(100,160)
Repayment of bank loans
(199,999)
(200,001)
Payment of lease liabilities
(15,478)
8,496
Net cash used in financing activities
(535,477)
(291,665)
Net (decrease)/increase in cash and cash equivalents
(418,149)
412,373
Cash and cash equivalents at beginning of year
1,162,961
750,588
Cash and cash equivalents at end of year
744,812
1,162,961
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2023
- 18 -
1
Accounting policies
Company information

Oilfield Production Consultants (OPC) Limited is a private company limited by shares incorporated in England and Wales. The registered office is 1-2 Apollo Studios, Charlton Kings Road, London, NW5 2SB. The company's principal activities and nature of its operations are disclosed in the Strategic report.

 

The group consists of Oilfield Production Consultants (OPC) Limited and all of its subsidiaries.

1.1
Accounting convention

The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted for use in the United Kingdom and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS, except as otherwise stated.

The financial statements are prepared in sterling, which is the functional currency of the group. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention. The principal accounting policies adopted are set out below.

1.2
Business combinations

The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as goodwill.

The cost of the combination includes the estimated amount of contingent consideration that is probable and can be measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.

 

Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair values determined in the 12 months following the acquisition date.

1.3
Basis of consolidation

The consolidated group financial statements consist of the financial statements of the parent company Oilfield Production Consultants (OPC) Limited together with all entities controlled by the parent company (its subsidiaries) and the group’s share of its interests in joint ventures and associates.

 

All financial statements are made up to 31 December 2023. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by other members of the group.

 

All intra-group transactions, balances and unrealised gains on transactions between group companies are eliminated on consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

Subsidiaries are consolidated in the group’s financial statements from the date that control commences until the date that control ceases.

Entities in which the group holds an interest and which are jointly controlled by the group and one or more other venturers under a contractual arrangement are treated as joint ventures. Entities other than subsidiary undertakings or joint ventures, in which the group has a participating interest and over whose operating and financial policies the group exercises a significant influence, are treated as associates.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 19 -

Investments in joint ventures and associates are carried in the group statement of financial position at cost plus post-acquisition changes in the group’s share of the net assets of the entity, less any impairment in value. The carrying values of investments in joint ventures and associates include acquired goodwill.

 

If the group’s share of losses in a joint venture or associate equals or exceeds its investment in the joint venture or associate, the group does not recognise further losses unless it has incurred obligations to do so or has made payments on behalf of the joint venture or associate.

 

Unrealised gains arising from transactions with joint ventures and associates are eliminated to the extent of the group’s interest in the entity.

1.4
Going concern

The directors have at the time of approving the financial statements, a reasonable expectation that the truegroup has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

1.5
Revenue

When the outcome of a transaction involving the rendering of services can be estimated reliably, revenue associated with the transaction is recognised by reference to the stage of completion of the transaction at the end of the reporting period. The outcome of a transaction can be estimated reliably when all the following conditions are satisfied:

 

- the amount of revenue can be measured reliably;

- it is probable that the economic benefits associated with the transaction will flow to the group;

- the stage of completion of the transaction at the end of the reporting period can be measured reliably; and

- the costs incurred for the transaction and the costs to complete the transaction can be measured reliably.

 

When the outcome of the transaction involving the rendering of services cannot be estimated reliably, revenue shall be recognised only to the extent of the expenses recognised that are recoverable.

 

Revenue is measured at the fair value of the consideration received or receivable and represents the amounts receivable for goods and services provided in the normal course of business, net of trade discounts and volume rebates, and value added tax. Interest is recognised, in profit or loss, using the effective interest rate method. Dividends are recognised, in profit or loss, when the company's right to receive payment has been established.

1.6
Goodwill

Goodwill represents the excess of the cost of acquisition of unincorporated businesses over the fair value of net assets acquired. It is initially recognised as an asset at cost and is subsequently measured at cost less impairment losses.

 

The gain on a bargain purchase is recognised in profit or loss in the period of the acquisition.

 

For the purposes of impairment testing, goodwill is allocated to the cash-generating units expected to benefit from the acquisition. Cash-generating units to which goodwill has been allocated are tested for impairment at least annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not subsequently reversed.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 20 -
1.7
Property, plant and equipment

Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses.

Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on the following bases:

Leasehold land and buildings
Over the remaining period of the lease
Leasehold improvements
Over the remaining period of the lease
Fixtures and fittings
25% straight line per annum on cost and 15% staight line per annum on cost
Plant and equipment
25% straight line per annum on cost and 15% straight line per annum on cost
Computers
25% to 50% straight line on cost and 25% and 33% staight line on cost

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is recognised in the income statement.

1.8
Investment property

Investment property, which is property held to earn rentals and/or for capital appreciation, is initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. The surplus or deficit on revaluation is recognised in profit or loss.

1.9
Non-current investments

Interests in subsidiaries, associates and jointly controlled entities are initially measured at cost and subsequently measured at cost less any accumulated impairment losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of impairment losses are recognised immediately in profit or loss.

A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies of the entity so as to obtain benefits from its activities.

An associate is an entity, being neither a subsidiary nor a joint venture, in which the group holds a long-term interest and has significant influence. The group considers that it has significant influence where it has the power to participate in the financial and operating decisions of the associate.

Entities in which the group has a long term interest and shares control under a contractual arrangement are classified as jointly controlled entities.

1.10
Impairment of tangible and intangible assets

At each reporting end date, the group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually, and whenever there is an indication that the asset may be impaired.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 21 -

Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.

 

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

 

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

1.11
Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

1.12
Financial assets

Financial assets are recognised in the group's statement of financial position when the group becomes party to the contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and purpose of the financial assets.

 

At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially measured at fair value plus transaction costs.

Financial assets at fair value through profit or loss

When any of the above-mentioned conditions for classification of financial assets is not met, a financial asset is classified as measured at fair value through profit or loss. Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the reporting period in which it arises.

Financial assets held at amortised cost

Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment where necessary.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 22 -
Financial assets at fair value through other comprehensive income

Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the financial assets are held within the group’s business model whose objective is achieved by both collecting contractual cash flows and selling financial assets, 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.

 

A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive income are directly transferred to profit or loss when the debt instrument is derecognised.

The parent company has made an irrevocable election to recognize changes in fair value of investments in equity instruments through other comprehensive income, not through profit or loss. A gain or loss from fair value changes will be shown in other comprehensive income and will not be reclassified subsequently to profit or loss. Equity instruments measured at fair value through other comprehensive income are recognized initially at fair value plus transaction cost directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes in fair value included in other comprehensive income. Accumulated gains or losses recognized through other comprehensive income are directly transferred to retained earnings when the equity instrument is derecognized or its fair value substantially decreased. Dividends are recognized as finance income in profit or loss.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 23 -
Impairment of financial assets

Financial assets, other than those at FVTPL, are assessed for indicators or impairment at each balance sheet date. Financial assets are impaired where there is objective evidence that, as at result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.

 

For listed and unlisted equity investments classified as AFS, a significant or prolonged decline in the fair value of the security below its cost is considered to be objective evidence of impairment.

 

For all other financial assets, including redeemable notes classified as AFS and finance lease receivables, objective evidence of impairment could include:-

 

 

For certain categories of financial assets, such as trade receivables, asset that are assessed not to be impaired individually are, in addition, assessed for impairment on a collective basis. Objective evidence of impairment for a portfolio of receivables could include the group’s past experience of collecting payments, an increase in the number of delayed payments in the portfolio past the average credit period of 60 days, as well as observable changes in national or local economic conditions that correlate with default on receivables.

 

For financial assets carried at amortised cost, the amount of the impairment is the differences between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original interest rate.

 

The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss.

 

When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period.

 

With the exception of AFS equity instruments, if, in a subsequent period, the amount of the impairment loss decreases can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit of loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised.

 

In respect of AFS equity securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increases in fair value subsequent to an impairment loss is recognised in other comprehensive income and accumulated under the heading of investments revaluation reserves. In respect of AFS debt securities, impairment losses are subsequently reversed through profit or loss if an increase in the fair value of the investment can be objectively related to an event occurring after the recognition of the impairment loss.

Derecognition of financial assets

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership to another entity.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 24 -
1.13
Financial liabilities

The group recognises financial debt when the group becomes a party to the contractual provisions of the instruments. Financial liabilities are classified as either 'financial liabilities at fair value through profit or loss' or 'other financial liabilities'.

Other financial liabilities

Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding.

Derecognition of financial liabilities

Financial liabilities are derecognised when, and only when, the group’s obligations are discharged, cancelled, or they expire.

1.14
Equity instruments

Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.

1.15
Derivatives

Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

 

A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are classified as current.

1.16
Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The group’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 25 -
Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

 

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the group has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

1.17
Employee benefits

The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be recognised as part of the cost of inventories or non-current assets.

 

The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.

 

Termination benefits are recognised immediately as an expense when the group is demonstrably committed to terminate the employment of an employee or to provide termination benefits.

1.18
Retirement benefits

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.

1.19
Leases

At inception of the contract, the company assesses whether a contract is, or contains, a lease. It recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee. The right-of-use assets and the lease liabilities are presented as separate line items in the statement of financial position.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the company uses its incremental borrowing rate. It is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, plus lease payments   made on or before the commencement day, less any lease incentives received and plus any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
1
Accounting policies
(Continued)
- 26 -
1.20
Foreign exchange

The individual financial statements of each group company are presented in the currency of the primary economic environment in which it operates (its functional currency). For the purpose of the consolidated financial statements, the results and financial position of each group company are expressed in sterling, which is the functional currency of the Company, and the presentation currency for the consolidated financial statements.

 

In preparing the financial statements of the individual companies, transactions in currencies other than the entity’s functional currency (foreign currencies) are recognised at the rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and liabilities that are denominated in foreign currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are denominated in foreign currencies are translated at the rats prevailing at the date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated.

 

Exchange differences are recognised in profit or loss in the period in which they arise expect for:

 

 

For the purpose of presenting consolidated financial statements, the assets and liabilities of the group’s foreign operations are translated at exchange rates prevailing on the balance sheet date. Income and expense items are translated at the average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange rates at the date of transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income and accumulated in a separate component of equity (attributed to non-controlling interests as appropriate).

 

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the operating result.

2
Adoption of new and revised standards and changes in accounting policies
Standards which are in issue but not yet effective

At the date of authorisation of these financial statements, the following standards and interpretations, which have not yet been applied in these financial statements, were in issue but not yet effective (and in some cases had not yet been adopted by the EU):

The directors of the group anticipate that the adoption of these standards and interpretations in future periods will have no material impact on the financial statements of the group. The group does not intend to apply any of these pronouncements early.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 27 -
3
Critical accounting estimates and judgements

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

 

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods.

 

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are outlined below.

Critical judgements
Trade receivables

Trade and other receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market other than those that the Group intends to sell in the short-term. Trade and other receivables are initially recognised at fair value. Subsequently, trade and other receivables are measured at amortised cost using the effective interest rate method. A provision for impairment is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms.

Fair value estimation

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or a liability, the Group takes into account the characteristics of the asset or liability, if market participants would take those characteristics into account when pricing the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these annual consolidated financial statements is determined on such a basis, except for measurements that have some similarities to fair value but are not fair value such as value in use in IAS 36 - Impairment of Assets.

 

In addition, for financial reporting purposes, fair value measurements are categorised into level 1, 2 or 3 based on the degree to which the inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are defined as follows:

 

- Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can assess at the measurement date.

 

- Level 2 inputs are inputs, other than quoted prices included in level 1, that are observable for the asset or liability, either directly or indirectly.

 

- Level 3 inputs are unobservable inputs for the asset or liability.

Impairment testing

The group reviews and tests the carrying value of assets when events or changes in circumstances suggest that the carrying amount may not be recoverable. When such indicators exist, management determine the recoverable amount by performing value in use and fair value calculations. These calculations require the use of estimates and assumptions. When it is not possible to determine the recoverable amount for an individual asset, management assesses the recoverable amount for the cash generating unit to which the asset belongs.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 28 -
4
Revenue
2023
2022
£
£
Revenue analysed by class of business
Consultants services
5,386,934
5,659,452
Technical services
2,346,448
1,652,183
Technical training services
178,560
62,568
7,911,942
7,374,203
2023
2022
£
£
Revenue analysed by geographical market
Middle East
4,419,712
4,953,042
UK
2,283,269
1,444,173
Kazakstan
597,192
431,597
USA
224,502
545,391
Australia
387,267
-
7,911,942
7,374,203
5
Operating profit/(loss)
2023
2022
Operating profit for the year is stated after charging/(crediting):
£
£
Exchange losses/(gains)
120,017
(306,355)
Depreciation of property, plant and equipment
43,734
43,976
Depreciation of investment property
47,223
66,830
6
Auditor's remuneration
2023
2022
Fees payable to the company's auditor and associates:
£
£
For audit services
Audit of the financial statements of the group and company
32,000
28,000
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 29 -
7
Employees

The average monthly number of persons (including directors) employed by the group during the year was:

2023
2022
Number
Number
Management
4
5
Admnistration
8
6
Technical
8
8
Total
20
19

Their aggregate remuneration comprised:

2023
2022
£
£
Wages and salaries
1,189,463
1,035,732
Social security costs
108,948
110,086
Pension costs
31,899
42,136
1,330,310
1,187,954
8
Directors' remuneration
2023
2022
£
£
Remuneration for qualifying services
289,883
269,487
Company pension contributions to defined contribution schemes
14,121
14,113
304,004
283,600
Remuneration disclosed above includes the following amounts paid to the highest paid director:
2023
2022
£
£
Remuneration for qualifying services
146,720
142,800
9
Investment income
2023
2022
£
£
Interest income
Financial instruments measured at amortised cost:
Bank deposits
3,706
420
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 30 -
10
Finance costs
2023
2022
£
£
Interest on bank overdrafts and loans
89,462
25,247
Loss on foreign exchange
120,017
(306,355)
Total interest expense
209,479
(281,108)
11
Income tax expense
2023
2022
£
£
Current tax
Foreign taxes and reliefs
90,089
112,000
90,089
112,000

The charge for the year can be reconciled to the profit/(loss) per the income statement as follows:

2023
2022
£
£
Profit before taxation
259,573
514,452
Expected tax charge based on a corporation tax rate of 23.52% (2022: 19.00%)
61,052
97,746
Effect of expenses not deductible in determining taxable profit
84,599
46,630
Other permanent differences
-
418
Foriegn tax
90,089
112,000
Capital items expensed
891
713
Branch profits
(246,780)
(102,968)
Other permanent differences
21,747
15
Increase/ (decrease) in losses carried forward
78,491
(42,554)
Taxation charge for the year
90,089
112,000
12
Intangible assets
Goodwill
£
Cost
Additions - purchased
145,922
At 31 December 2023
145,922
Carrying amount
At 31 December 2023
145,922
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 31 -
13
Property, plant and equipment
Leasehold land and buildings
Leasehold improvements
Plant and equipment
Fixtures and fittings
Computers
Total
£
£
£
£
£
£
Cost
At 1 January 2022
992,583
184,884
55,669
89,229
683,538
2,005,903
Additions
-
0
2,500
-
0
5,065
1,918
9,483
Foreign currency adjustments
-
0
-
0
-
0
(118)
-
0
(118)
At 31 December 2022
992,583
187,384
55,669
94,176
685,456
2,015,268
Additions
-
0
2,202
-
0
1,917
59,090
63,209
At 31 December 2023
992,583
189,586
55,669
96,093
744,546
2,078,477
Accumulated depreciation and impairment
At 1 January 2022
148,161
112,876
55,669
86,101
672,596
1,075,403
Charge for the year
20,434
13,558
-
0
1,207
8,777
43,976
Foreign currency adjustments
-
0
-
0
-
0
(100)
-
0
(100)
At 31 December 2022
168,595
126,434
55,669
87,208
681,373
1,119,279
Charge for the year
20,435
13,520
-
0
2,224
7,555
43,734
At 31 December 2023
189,030
139,954
55,669
89,432
688,928
1,163,013
Carrying amount
At 31 December 2023
803,553
49,632
-
6,661
55,618
915,464
At 31 December 2022
823,988
60,950
-
6,968
4,083
895,989
14
Property, plant and equipment (Parent)
Long leasehold
Improvements to property
Plant and machinery
Fixtures and fittings
Computers
Total
£
£
£
£
£
£
Cost
At 1 January 2022
992,583
184,884
55,669
88,131
683,538
2,004,805
Additions
-
0
2,500
-
0
4,667
1,918
9,085
Foreign currency adjustments
-
0
-
0
-
0
(118)
-
0
(118)
At 31 December 2022
992,583
187,384
55,669
92,680
685,456
2,013,772
Additions
-
0
2,202
-
0
1,964
59,090
63,256
At 31 December 2023
992,583
189,586
55,669
94,644
744,546
2,077,028
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
14
Property, plant and equipment (Parent)
Long leasehold
Improvements to property
Plant and machinery
Fixtures and fittings
Computers
Total
£
£
£
£
£
£
(Continued)
- 32 -
Accumulated depreciation and impairment
At 1 January 2022
148,161
112,875
55,669
86,224
672,597
1,075,526
Charge for the year
20,434
13,558
-
0
1,084
8,777
43,853
Foreign currency adjustments
-
0
-
0
-
0
(100)
-
0
(100)
At 31 December 2022
168,595
126,433
55,669
87,208
681,374
1,119,279
Charge for the year
20,435
13,521
-
0
2,224
7,554
43,734
At 31 December 2023
189,030
139,954
55,669
89,432
688,928
1,163,013
Carrying amount
At 31 December 2023
803,553
49,632
-
5,212
55,618
914,015
At 31 December 2022
823,988
60,951
-
5,472
4,082
894,493
15
Right of use asset
2023
2022
£
£
Cost
At 1 January 2023
276,863
210,118
Addition through subsequent expenditure
39,249
66,745
At 31 December 2023
316,112
276,863
Accumulated depreciation
At 1 January 2023
234,662
167,832
Charge for the year
47,223
66,830
At 31 December 2023
281,885
234,662
Carrying value
At 31 December 2023
34,227
42,201
At 31 December 2022
42,201
42,286
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 33 -
16
Right of use asset (Parent)
2023
2022
£
£
Cost
At 1 January 2023
276,863
210,118
Addition through subsequent expenditure
39,249
66,745
At 31 December 2023
316,112
276,863
Accumulated depreciation
At 1 January 2023
234,662
167,832
Charge for the year
47,223
66,830
At 31 December 2023
281,885
234,662
Carrying value
At 31 December 2023
34,227
42,201
At 31 December 2022
42,201
42,286
17
Investments
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Other investments
-
-
5,000
5,000
Fair value of financial assets carried at amortised cost

The directors consider that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

18
Investments (Parent)
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Investments in subsidiaries
-
0
-
0
138,650
4,747
Other investments
-
-
5,000
5,000
-
0
-
0
143,650
9,747

The company has not designated any financial assets that are not classified as held for trading as financial assets at fair value through profit or loss.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
18
Investments (Parent)
(Continued)
- 34 -
Fair value of financial assets carried at amortised cost

Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the financial statements approximate to their fair values.

Investment in subsidiary undertakings

Details of the company's principal operating subsidiaries are included in note 19.

19
Subsidiaries

Details of the company's subsidiaries at 31 December 2023 are as follows:

Name of undertaking
Registered office
Class of
% Held
shares held
Direct
Oilfield Production Consultants USA LLC
United States of America
Ordinary
100.00
Oilfield Production Consultants Asia LLP
Kazakhstan
Ordinary
100.00
Oilfield Production Norway AS
Norway
Ordinary
100.00
Diverse Recuitments Solutions (DRS) Limited
United Kingdom
Ordinary
100.00
OPES International Pty Ltd.
Australia
Ordinary
100.00
20
Trade and other receivables
2023
2022
£
£
Trade receivables
2,477,871
2,276,104
Provision for bad and doubtful debts
(125,563)
(124,698)
2,352,308
2,151,406
VAT recoverable
13
-
Other receivables
93,191
139,201
Prepayments
105,042
150,003
2,550,554
2,440,610
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 35 -
21
Trade receivables - credit risk
Fair value of trade receivables

The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.

 

No significant receivable balances are impaired at the reporting end date.

 

 

Trade Receivables < 90 days

1,880,498

Trade Receivables balance > 90 days

403,332

Qatargas Retentions

194,041

 

 

Total Trade Receivable Balance

2,477,871

 

________

 

OPC’s standard payment terms are 30 days from date of invoice. However, OPC is not always able to dictate its payment terms to its clients. With most of OPC’s larger clients, OPC has to agree to its client’s payment terms which range between 30 and 65 days from receipt of invoice.

 

The vast majority of OPC’s clients are NOC’s, IOC’s and Independents who are backed by major investors and private equity. These clients have strong balance sheets supported by producing oil and gas assets. OPC’s clients have a low credit risk rating and it is very rare that a debt will remain outstanding for longer than 30 days past the collection period. Therefore, bad debts are generally uncommon. However, during the year £3,406 was allocated to doubtful debts in relation to the underpayment of an invoice by Cornerstone North Sea Limited.

 

Before accepting a new client, OPC screens the company’s operations, financial status and political risk to determine if they are a potential credit risk. If there is any doubt, OPC may decline the engagement or OPC may request payment in advance of work commencing or a sizable down payment to cover costs in the event of default.

 

OPC has a total trade receivables balance of £2,477,871. Within this balance there is £194,041 which relate to retentions held by an NOC in Qatar, QatarEnergy LNG, which will be released after submittal of a tax clearance certificate from the Qatar Ministry of Finance. OPC has never experienced any issues with receiving tax clearance or obtaining the retentions albeit it can be a lengthy process to obtain a certificate from the tax office in Qatar. OPC has been working with this client since 2003 and retentions have always been returned upon submittal of a tax clearance certificate.

 

£277,796 of OPC’s trade receivables are past 90 days. Of the outstanding sum, £135,930 relates to a debt with CDC LLC who operate in a JV with OPC for servicing of our client, QatarEnergy. The amount was unable to be paid as there were contractual complications which prevented payment. A contract amendment has now been approved by QatarEnergy which will see the remaining sum paid before the end of 2024. A Further £70,847 relates to invoices from Robert A Price Limited who invoice OPC consultants fees to our Kazakhstan entity, this amount was paid in full in 2024. Lastly, an amount of £37,042 related to a disputed invoice from QatarEnergy which was paid in full in 2024.

 

It is not automatic that interest is charged on outstanding debts. Interest is only charged when a client does not pay as per the agreed terms and fails to respond to notices of final demand. In 2023 interest was charged on overdue invoices to BP Mauritania.

 

Customer payments that remain outstanding for 12 months are to be written off as bad debts if after numerous attempts to contact the client have not resulted in a response and there is no legal method of obtaining the outstanding balance, or obtaining the debt is either too costly. A debt may also be written off if a client is insolvent and the debt, or part of it, cannot be covered through liquidation procedures.

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
21
Trade receivables - credit risk
(Continued)
- 36 -

Bad Debts

 

In 2023 the following bad debt provisions were recorded:

 

£

Cornerstone North Sea Limited

3,406

 

OPC provided technical services to Cornerstone in 2022 for which a small proportion of the outstanding invoices were deemed to be at risk of non payment.

Movement in the allowances for doubtful debts
2023
2022
£
£
Balance at 1 January 2023 and at 31 December 2023
125,563
124,698
22
Trade and other receivables (Parent)
2023
2022
£
£
Trade receivables
2,285,526
2,162,882
Provision for bad and doubtful debts
(125,563)
(124,698)
2,159,963
2,038,184
Amounts owed by subsidiary undertakings
793,076
860,530
Other receivables
80,239
98,940
Prepayments
96,680
135,941
3,129,958
3,133,595

Trade receivables disclosed above are classified as loans and receivables and are therefore measured at amortised cost.

23
Borrowings
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Borrowings held at amortised cost:
Bank loans
200,000
200,000
383,334
583,333
Other loans
47,105
-
-
-

The bank loan of £583,334 (2022: £783,333) is unsecured and repayable over 60 months with the first such payment paid December 2021. It bears interest of 3.39% per annum over base rate.

 

OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 37 -
24
Borrowings (Parent)
Current
Non-current
2023
2022
2023
2022
£
£
£
£
Borrowings held at amortised cost:
Bank loans
200,000
200,000
383,334
583,333

The bank loan of £583,333 (2022: £783,333) is unsecured and repayable over 60 months with the first such payment paid December 2021. It bears interest of 3.39% per annum over base rate.

25
Trade and other payables
2023
2022
£
£
Trade payables
1,004,168
763,484
Accruals
372,008
345,565
Social security and other taxation
57,953
57,749
Other payables
88,491
79,595
1,522,620
1,246,393
26
Trade and other payables (Parent)
2023
2022
£
£
Trade payables
845,305
705,491
Amounts owed to subsidiary undertakings
88,254
99,422
Accruals
372,008
345,565
Social security and other taxation
57,953
57,749
Other payables
65,977
56,618
1,429,497
1,264,845
27
Retirement benefit schemes
2023
2022
Defined contribution schemes
£
£
Charge to profit or loss in respect of defined contribution schemes
31,899
42,136

The group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the group in an independently administered fund.

28
Share capital
2023
2022
2023
2022
Ordinary share capital
Number
Number
£
£
Issued and fully paid
Ordinary Shares of £1 each
10,000
10,000
10,000
10,000
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
28
Share capital
(Continued)
- 38 -

As at 31 December 2023, 1,050 (2022: 745) Ordinary Shares are held by Oilfield Production Consultants (OPC) Ltd.

29
Share premium account
2023
2022
£
£
At the beginning and end of the year
136,570
136,570
30
Revaluation reserve
2023
2022
£
£
At the beginning and end of the year
362,554
362,554
31
Capital redemption reserve
2023
2022
£
£
At the beginning and end of the year
392
392
32
Cumulative translation reserve
2023
2022
£
£
At the beginning and end of the year
(43,692)
(43,692)
33
Capital risk management

The group is not subject to any externally imposed capital requirements.

34
Lease liabilities
2023
2022
Maturity analysis
£
£
Within one year
85,607
85,020
All lease liabilties are expected to be settled within 12 months from the reporting date.
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 39 -
35
Acquisitions of a business

On 1 May 2024 the group acquired 100 percent of the issued capital of OPES International Pty Ltd.

Book Value
Adjustments
Fair Value
Net assets of business acquired
£
£
£
Trade and other receivables
300,484
-
300,484
Cash and cash equivalents
55,433
-
55,433
Trade and other payables
(367,936)
-
(367,936)
Total identifiable net assets
(12,019)
-
(12,019)
Non-controlling interests
-
Goodwill
145,922
Total consideration
133,903
The consideration was satisfied by:
£
Cash
104,979
Deferred consideration
28,924
133,903
Net cash outflow arising on acquisition
£
Cash consideration
104,979
Less: Cash and cash equivalents acquired
(55,433)
49,546
Contribution by the acquired business for the reporting period included in the group statement of comprehensive income since acquisition:
£
Revenue
379,726
Profit after tax
18,700
OILFIELD PRODUCTION CONSULTANTS (OPC) LIMITED
NOTES TO THE GROUP FINANCIAL STATEMENTS (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2023
- 40 -
36
Cash generated from operations
2023
2022
£
£
Profit for the year before income tax
259,573
514,452
Adjustments for:
Finance costs
89,462
25,247
Investment income
(3,706)
(420)
Depreciation and impairment of property, plant and equipment
43,734
43,976
Impairment of right of use assets
47,223
66,830
Foreign exchange gains on cash equivalents
-
18
Deferred consideration on purchase of subsidiary
(28,924)
-
Movements in working capital:
Decrease in trade and other receivables
190,540
302,251
Decrease in trade and other payables
(91,709)
(54,981)
Cash generated from operations
506,193
897,373
37
Cash generated from/(absorbed by) operations - company
2023
2022
£
£
Profit for the year before tax
175,052
640,545
Adjustments for:
Finance costs
85,945
25,216
Investment income
(500)
(420)
Depreciation and impairment of property, plant and equipment
43,734
43,853
Impairment of right of use asset
47,223
66,830
Foreign exchange gains on cash equivalents
-
18
Deferred consideration on purchase of subsidiary
(28,924)
-
Movements in working capital:
Decrease in trade and other receivables
3,637
205,371
Increase/(decrease) in trade and other payables
164,652
(67,836)
Cash generated from operations
490,819
913,577
2023-12-312023-01-01falseCCH SoftwareCCH Accounts Production 2024.300Mr P J JohnsonMr R P MooreMr R M SmithMrs D A JohnsonfalsePrepared in accordance with special provisions small companiesmember has not required the company to obtain an auditExempt section 477 of the Companies Act 2006Director acknowledges responsibilities Companies Act 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