REG - Predator O&G Hldgs - Financial Statements Year Ended 31 December 2023
10/04/2024 07:00
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RNS Number : 9396J Predator Oil & Gas Holdings PLC 10 April 2024
FOR IMMEDIATE RELEASE
10 April 2024
Predator Oil & Gas Holdings Plc / Index: LSE
/ Epic: PRD / Sector: Oil & Gas
LEI 213800L7QXFURBFLDS54
Predator Oil & Gas Holdings Plc
("Predator" or the "Company" and together with its subsidiaries the "Group")
Financial Statements for the Year
Ended 31 December 2023
Predator Oil & Gas Holdings Plc (LSE: PRD), the Jersey based Oil and Gas
Company with near-term hydrocarbon operations focussed on Morocco and
Trinidad, is pleased to announce its audited financial statements for the year
ended 31 December 2023, extracts of which are set out below.
The Company's Annual Report is available to shareholders to download from the
Company's website at www.predatoroilandgas.com
(http://www.predatoroilandgas.com/) . In line with ESG best practice no
hard copies of the Annual Report will be printed.
In addition, a copy of the 2023 Annual Report will be uploaded to the National
Storage Mechanism and will be available for viewing at
https://data.fca.org.uk/#/nsm/nationalstoragemechanism
(https://data.fca.org.uk/#/nsm/nationalstoragemechanism) .
The financial information set out below does not constitute the Company's
statutory accounts for the year ending 31 December 2023.
Highlights of Financial Results for 2023
· Loss from operations of GBP 4,815,984 (GBP 2,558,844 for the period
to 31 December 2022).
The increase in operating loss is primarily due to increased drilling
activity in Morocco (MOU-2, MOU-3 and MOU-4 wells)
· Administrative expenses of GBP 3,224,721 (GBP 2,545,789 for the
period to 31 December 2022).
Excluding share based payments for options and warrants corporate
administrative expenses were GBP 1,540,481 (GBP 1,248,084 for the period to
31 December 2022).
Corporate administrative expenses have been prudently managed despite
inflationary pressures during 2023 despite the significant increase in
corporate activities which included Project Allosaurus costs of GBP 217,241
related to progressing a Secondary Prospectus with the FCA.
· Executive directors' fees have increased to GBP 604,506 (GBP414,709
for the period to 31 December 2022) as a result of the significant increase in
the Company's corporate and operational activities in the period to 31
December 2023 to maintain business growth potential. This increase is mainly
attributable to technical services consulting fees charged by the executive
directors in providing technical support and reports that would otherwise
would have been out-sourced to third parties at competitive market rates.
· Increased cash balance at period end of 2023 GBP 6,484,034 (GBP
3,323,161 for the period to 31 December 2022).
· Additional, restricted cash of USD1,500,000 (USD 1,500,000 for the
period ended 31 December 2022).
· The Company has no debt.
Directors' loans of £507,999 were capitalised and linked to a repayment in
full upon the Company flowing a minimum of 1 million cubic feet/day from the
rigless testing programme to be executed in the Guercif Licence or from the
flow of a minimum of 100 bopd from the well workovers planned for the Cory
Moruga Exploration and Production Licence.
· Balance outstanding of the loan made by the Company to FRAM
Exploration Trinidad Ltd. ("FRAM") for the investment in the Inniss-Trinity
Pilot CO2 EOR Project was GBP NIL (GBP 659,504 the period to 31 December 2022)
at the end of the period.
In 2023 the Company announced that it had completed the acquisition (the
"Acquisition") of the entire issued share capital of T-Rex, a wholly owned
subsidiary of Challenger Energy Group Plc ("CEG"). FRAM is also a wholly owned
subsidiary of CEG. T-Rex holds an 83.8% in the Cory Moruga Exploration and
Production Licence containing the Snowcap-1 oil discovery. The Acquisition was
for a gross consideration ("Gross Consideration") that included USD1,000,000
payable to CEG in cash and allowed for the offset of the outstanding FRAM Loan
balance against the agreed Gross Consideration. The Cory Moruga Independent
Technical Report and resource potential of the Snowcap-1 discovery by Scorpion
Geoscience Limited gives 2C and 3C Contingent Resources of 1.40 and 1.84
million barrels respectively and 2C and 3C Prospective Resources of 12.91
and 19.57 million barrels respectively net to the Company. The Company through
the Acquisition has acquired TT $323,652,447 (US $ 47,948,510 @ a forex rate
of 6.75) of T-Rex tax losses as of 2022 that can be offset against 50%
Petroleum Profit Tax on future net operating profits from oil production in
the Cory Moruga Exploration and Production License.
· Placed 97,231,500 new ordinary shares of no par value in the Company
to raise GBP10,360,377 (before expenses).
· Exercise of broker warrants resulted in the issue of 2,035,714 new
ordinary shares of no par value in the Company to raise GBP 79,500.
· Exercise of share options by directors and former directors resulted
in the issue of 20,112,049 new ordinary shares of no par value in the Company
to raise GBP 1,646,986.
· 6,401,077, 15,710,972 and 6,000,000 share options have been issued
exercisable at £0.10, £0.08 and £0.125 respectively.
· 8,318,182, 1,080,000, 2,181,818 and 1.780,412 broker warrants have
been issued exercisable at £0.11, £0.055 and £0.057 respectively.
· 2,659,574 new ordinary shares were issued to the executive directors
for no Consideration in accordance with the Executive Directors' Bonus
arrangements established by the independent Remuneration Committee.
· Following the admission of the above exercised share options and
warrants, bonus shares, returned Loan Shares and the Placing Shares the issued
share capital increased to 565,161,662 by the end of the period to 31 December
2023 (383,759,189 for the period ended 31 December 2022).
Highlights of key Operational Activities in 2023
· MOU-2 was drilled to 1,260 metres Measured Depth before being
suspended for operational reasons for a possible later re-entry.
Three gas samples collected whilst drilling.
100 metres of variable quality sand in primary target.
· MOU-3 was drilled to 1,509 metres Measured Depth and completed
for rigless testing.
Seven gas samples collected whilst drilling.
50.5 metres of gross sand interval in primary target.
Secondary targets Ma and TGB-6 sand intervals confirmed to be present and
gas-bearing based on NuTech petrophysics and gas samples collected whilst
drilling.
Ma and TGB-6 intervals correlated with MOU-1 drilled in 2021 to potentially
define a single structure covering up to 21 km2.
11 metres of unexpected sand encountered at shallow depth with over-pressured
gas.
Formation damage predicted due to necessity to drill with heavy drilling mud -
to be potentially penetrated using Sandjet rigless testing technology.
· MOU-4 was drilled to 1,199 metres Measured Depth and completed for
rigless testing.
Unexpected 58 metres of gross M1 Sand potential reservoir interval,
interpreted by NuTech as gas-bearing.
21 metres of gross sand in primary target with improved reservoir
characteristics compared to MOU-3 and interpreted as gas-bearing by NuTech
petrophysics.
MOU-3 and MOU-4 confirmed potential for stratigraphic trap covering 68km2 for
the primary Moulouya Fan target.
MOU-4 achieved its secondary objective by defining the edge of the Jurassic
carbonate prospect located to the east of the MOU-4.
The new post-drill well tie to the seismic data validated the pre-drill
Jurassic prospect and increased the area of structural closure from 126 to 177
km².
Formation damage also predicted due to necessity to drill with heavy drilling
mud - to be potentially penetrated using Sandjet.
· Successful completion of the drilling programme allowed the Company
to enter into the signing of a Memorandum of Understanding in relation to gas
sales and collaboration for up to 50 million cubic feet of gas per day (50 mm
cf/d) with Afriquia Gaz.
· 29 additional prospects and leads have been identified during 2023.
· On 7 November 2023 the acquisition of T-Rex and an 83.8% interest in
and operatorship of the Cory Moruga Exploration and Production Licence was
completed following receipt of agreements from the Trinidadian Ministry of
Energy and Energy Industries ("MEEI").
· Work Programme agreed by the Company with the MEEI will be conducted
over the next three years with the initial focus will on a low-cost re-entry
of the Snowcap-1 discovery well to restore production and a re-entry of the
Snowcap-2ST1 and Jacobin-1 wells to establish potential production.
ESG
· In 2023 the Company spent 25,855,427 Dirhams in Morocco on local
services in relation to drilling of three wells 10 kilometers northwest of
Guercif city.
Beneficiaries included civil engineering contractors; field support activities
including provision and mobilisation of cabins; provision of Guercif warehouse
staff (renting of warehouse in Guercif city); provision
of water and waste disposal; fuel supplies; transport and drivers; local hotel
accommodation for rig and well services crews; heavy lifting equipment;
internet services and provision of office equipment; and accounting and
customs administration services. This was a significant boost for the local
economy.
Highlights of Directorate Changes
· There were no directorate changes during 2023.
Post Period End:
· The Company published an Independent Technical Report ("ITR") by
Scorpion Geoscience Ltd. for the Cory Moruga block and resource potential of
the Snowcap Discovery.
· The Company provided an update on the Phase 1 and Phase 2 rigless
testing programmes for the Guercif Licence.
· The Company published an Independent Technical Report ("ITR") by
Scorpion Geoscience Ltd. for the Guercif block and resource potential of the
Moulouya Sub-Area following an evaluation of the 2023 drilling programme
results.
· The Company announced that it had received a communication from the
GeoScience Regulation Office ("GSRO") at the Department of the Environment,
Climate and Communications informing the Company that consideration of its
application for a successor authorisation to Licensing Option 16/26 Corrib
South was hoped to be concluded during Q1 2024.
· The Company indicated that the commencement of the Phase 1 rigless
testing programme was expected to occur on or about 29 January 2024.
· The Company extended its 2022 rig contract for the use of the Star
Valley Rig 101 to facilitate the drilling of MOU-5 subject to regulatory
approvals.
· The Company announced the results of the Phase 1 rigless testing
programme and confirmed potential formation damage.
The results of the Phase 1 rigless testing programme allows the design
parameters for the Sandjet testing programme to be set with a higher degree of
confidence in relation to achieving key objectives of reservoir penetration.
Seven gas samples collected in isotubes in MOU-3 whilst drilling were analysed
by Applied Petroleum Technology (UK) Ltd. ("APT") in Oslo. Gas composition is
in the range 98.04 to 99.57% methane, making it ideal for a Compressed Natural
Gas development with minimum processing. Isotope analysis indicates the gas is
biogenic in origin.
The Company also announced that it would continue to progress planning
activities for the drilling of the MOU-5 well to test a large Jurassic
structure updip from MOU-4.
Paul Griffiths, Executive Chairman of Predator Oil & Gas Holdings
Plc commented:
"We are pleased to have completed successfully and within budget a
transformational 3-well drilling programme in Morocco.
We have identified a significant potential gas structure linking the MOU-1 and
MOU-3 wells that will be evaluated by a rigless testing programme using
Sandjet perforating technology to reach beyond potential formation damage.
We have also encountered shallow higher pressure gas that was better protected
from formation damage whilst drilling by the setting of a shallow casing
string. This can also be perforated and tested now using Sandjet, even though
it sits behind two casing strings.
The shallow and intermediate reservoir sands combined with the analysis of the
gas samples collected whilst drilling, confirming very high purity methane gas
composition at all reservoir levels, are ideal for an easily scalable CNG
development project.
We are confident that potential gas flow rates using Sandjet will fulfil the
potential 50 million cubic feet of gas per day profile facilitated by the
Collaboration Agreement with Afriquia Gaz.
Additionally we have increased the areal extent through drilling of the
pre-drill primary target, the Moulouya Fan, to 68 km2 and that of the Jurassic
target tested at its extremity by MOU-4, to 177 km2. Further appraisal of
these large traps may facilitate a later gas-to-power project. The potential
for significant condensate resources in the Jurassic target may also exist and
will be tested by the MOU-5 well in 2024.
We are excited by the biogenic gas potential at Guercif and the areal scale of
the individual tested structures, which is unique for Northern Morocco, but
not in terms of the large biogenic gas finds in the area of the Mediterranean
region.
We have completed the acquisition of a large equity interest in the onshore
Cory Moruga Exploration and Production Licence in Trinidad. This is a unique
opportunity to develop an onshore oil field that has not been developed
previously and hence has none of the historical issues linked to low well
productivity for mature oil fields. Combined with the substantial legacy tax
losses this potentially drives a brand new and most probably unique economic
model for onshore Trinidad driven by higher well deliverability, lower
operating costs, organically-funded modest and manageable capital investments
out of production and the application of new technologies such as Sandjet and
NuTech.
The Company is a prudent and experienced operator, as we have shown in 2023
and will continue to deliver in 2024. We manage costs carefully, even during
times when inflationary pressures and "shrinkflation" have become a normal
modus operandi for some suppliers and services.
Like many listed companies of our size we are extremely disappointed with the
over-regulated London public markets and their poor appreciation of the value
of businesses and opportunities that several companies have created and
further developed. Many of our shareholders, including the executive
directors, seek to re-set the valuation of our assets through means other than
the intra-day share price. This will be the top priority for 2024 and will
focus on entities that understand the true value of natural resources in oil
and gas commodity sector, as has been proven cyclically time and time again
and which continues to support the global economy and is the catalyst for
promoting viable economic growth.
We thank our shareholders for their continued support along our journey
towards achieving our ultimate goal. It is not an easy path when wedded to a
public market that is contracting in relation to its global peers through an
inability to reform and refresh in a timely manner to become more attractive
and competitive. You might surmise that it would be "in the public interest"
so to do, but there again perhaps it's not. 2024 should be an interesting
year."
For further information visit www.predatoroilandgas.com (about:blank)
Follow the Company on X @PredatorOilGas.
This announcement contains inside information for the purposes of Article 7 of
the Regulation (EU) No 596/2014 on market abuse
For more information please visit the Company's website
at www.predatoroilandgas.com (about:blank) :
Enquiries:
Predator Oil & Gas Holdings Plc Tel: +44 (0) 1534 834 600
Paul Griffiths Executive Chairman Info@predatoroilandgas.com (about:blank)
Lonny Baumgardner Managing Director
Novum Securities Limited Tel: +44 (0)207 399 9425
David Coffman / Jon Belliss
Oak Securities Tel: +44 (0)203 973 3678
Jerry Jerry.keen@oak-securities.com
Keen
Tel: +44 (0)203 884 9388
Fox Davies Capital
Daniel Fox-Davies/James Hehn
Flagstaff Strategic and Investor Communications Tel: +44 (0)207 129 1474
Tim Thompson predator@flagstaffcomms.com (about:blank)
Mark Edwards
Fergus Mellon
Notes to Editors:
Predator is operator of the Guercif Petroleum Agreement onshore Morocco which
is prospective for Tertiary and Jurassic gas. The current focus of the
exploration and appraisal drilling programme is located less than 10
kilometres from the Maghreb gas pipeline. The MOU-1 well drilled in 2021 and
the MOU-3 and MOU-4 wells drilled in 2023 have been completed for rigless
testing in early 2024. Near-term focus is on supplying compressed natural gas
("CNG") to the Moroccan industrial market. A Collaboration Agreement for
potential CNG gas sales of up to 50 mm cfgpd has been executed with Afriquia
Gaz. Further drilling activity is anticipated in 2024 to further evaluate the
MOU-4 Jurassic prospect.
Predator is seeking in the medium term to apply CO2 EOR techniques onshore
Trinidad which have the advantage of sequestrating anthropogenic carbon
dioxide. The acquisition of T-Rex Resources (Trinidad) Ltd. ("T-Rex") is a
first step to realising this objective. T-Rex holds the Cory Moruga Production
Licence. Cory Moruga is a largely undeveloped near-virgin oil field of similar
potential size to the nearby Moruga West and Inniss-Trinity mature oil fields.
The Cory Moruga Production Licence is a potentially significant asset for the
Company with the capability of generating positive operating profits in the
near-term. Capital required for staged field development can be implemented
potentially utilising operating profits generated from an increasing level of
gross production revenues.
Predator owns and operates exploration and appraisal assets in licensing
options offshore Ireland, for which successor authorisations have been applied
for, adjoining Vermilion's Corrib gas field in the Slyne Basin on the Atlantic
Margin and east of the decommissioned Kinsale gas field in the Celtic Sea. The
applications for successor authorisations remain "under consideration" by the
DECC.
Predator has developed a Floating Storage and Regasification Project ("FSRUP")
for the import of LNG and its regassification for Ireland and is also
developing gas storage concepts to address security of gas supply and
volatility in gas prices during times of peak gas demand.
Further progress for the Mag Mell FSRUP will be dependent on government policy
in relation to security of energy supply. A generalised FSRUP concept has now
been recognised by the government as an option for security of energy supply.
The Company has a small but highly experienced management team with a proven
track record in successfully executing drilling operations in the oil and gas
sector and in acquiring assets where there is a potential to generate multiple
returns for relatively low and manageable levels of investment.
Consolidated statement of comprehensive income
For the year ended 31 December 2023
01.01.2023 to 31.12.2023 01.01.2022 to 31.12.2022
Notes £ £
Administrative expenses 4 (3,224,721) (1,297,705)
Share based payments 4 (1,540,481) (1,248,084)
Total operating expenses (4,765,202) (2,545,789)
Operating loss (4,765,202) (2,545,789)
Finance Income 3 36,495 4,477
Finance expense 5 (87,277) (17,532)
Loss for the year before taxation (4,815,984) (2,558,844)
Taxation 6 - -
Loss for the year after taxation (4,815,984) (2,558,844)
Total comprehensive loss for the year attributable to the owner of the parent (4,815,984) (2,558,844)
Earnings per share basic and diluted (pence) 8 (1.193) (0.792)
The accompanying accounting policies and notes on pages 94 to 121 form an
integral part of these financial statements.
All items in the above statement derive from continuing operations.
Consolidated statement of financial position
As at 31 December 2023
31.12.2023 31.12.2022
Notes £ £
Non-current assets
Tangible fixed assets 11 1,181 3,448
Intangible assets 10 17,587,929 5,275,720
17,589,110 5,279,168
Current assets
Trade and other receivables 13 1,852,821 1,986,670
Cash and cash equivalents 14 6,484,034 3,323,161
8,336,855 5,309,831
Total assets 25,925,965 10,588,999
Equity attributable to the owner of the parent
Share capital 17 33,067,028 16,840,165
Reconstruction reserve 531,233 1,909,540
Warrants 18 (1,711,756) (583,825)
issuance cost
Share based payments reserve 18 2,844,770 1,379,964
Retained deficit (13,822,475) (10,210,097)
Total equity 20,908,800 9,335,747
Current liabilities
Trade and other payables 15 5,017,165 1,253,252
Total liabilities 5,017,165 1,253,252
Total liabilities and equity 25,925,965 10,588,999
The Company has adopted the exemption under Companies (Jersey) Law 1991
Article 105 (11) not to prepare separate accounts. The Group reported a loss
after taxation for the year of £4.8 million (2022: £2.6 million loss). The
financial statements were approved and authorised for issue by the Board of
Directors on 9 April 2024 and were signed on its behalf
by:
Paul Griffiths
Director
Consolidated statement of changes in equity
For the year ended 31 December 2023
Attributable to owner of the parent
Share based payments reserve Retained deficit
Share Capital Reconstruction reserve Warrants issuance cost reserve Total
£ £ £ £ £ £
Balance at 31 December 2021 11,425,061 2,386,321 (376,820) 611,173 (8,337,551) 5,708,184
Issue of ordinary share capital 4,335,000 - - - - 4,335,000
Issue of warrants - - - 449,656 - 449,656
Fair value of share options - - - 1,234,880 - 1,234,880
Transaction costs (476,781) - - - (476,781)
Exercised options 837,851 - - (728,618) 728,618 837,851
Exercised warrants 242,253 - 187,127 (187,127) - 242,253
Cancelled/expired warrants - - 42,320 - (42,320) -
Warrants issuance costs - - (436,452) - - (436,452)
Total contributions by and distributions to owners of the parent recognised 5,415,104 (476,781) (207,005) 768,791 686,298 6,186,407
directly in equity
Loss for the year - - - - (2,558,844) (2,558,844)
Total comprehensive income for the year - - - - (2,558,844) (2,558,844)
Balance at 31 December 2022 16,840,165 1,909,540 (583,825) 1,379,964 (10,210,097) 9,335,747
Issue of ordinary share capital 14,500,377 - - - - 14,500,377
Issue of warrants - - - 1,219,130 - 1,219,130
Fair value of share options - - - 1,540,481 - 1,540,481
Transaction costs - (1,378,307) - - - (1,378,307)
Exercised options 1,646,986 - - (1,250,663) 1,250,663 1,646,986
Exercised warrants 79,500 - 44,142 (44,142) - 79,500
Cancelled/expired warrants - - 47,057 - (47,057) -
Warrants issuance costs - - (1,219,130) - - (1,219,130)
Total contributions by and distributions to owners of the parent recognised 16,226,863 (1,378,307) (1,127,931) 1,464,806 1,203,606 16,389,037
directly in equity
Loss for the year - - - - (4,815,984) (4,815,984)
Total comprehensive income for the year - - - - (4,815,984) (4,815,984)
Balance at 31 December 2023 33,067,028 531,233 (1,711,756) 2,844,770 (13,822,475) 20,908,800
Consolidated statement of cash flows
For the year ended 31 December 2023
01.01.2023 to 31.12.2023 01.01.2022 to 31.12.2022
Notes £ £
Cash flows from operating activities
Loss for the period before taxation (4,815,984) (2,558,844)
Adjustments for:
Issue of share options 19 1,540,481 1,234,880
Finance expense 5 87,277 17,532
Finance income (36,495) (4,477)
Fair value of warrants - 13,204
Depreciation 2,267 2,436
Foreign exchange 157,790 (67,840)
Bonus payable in shares 250,000 -
Increase in receivables on acquisition of T-Rex Resources (Trinidad) Ltd 12 584,130 -
Increase in payables on acquisition of T-Rex Resources (Trinidad) Ltd 12 (3,572,027) -
Waiver of loans on acquisition of T-Rex Resources (Trinidad) Ltd 12 (643,909) -
Decrease/(increase) in trade and other receivables 14,811 (249,412)
(Decrease)/increase in trade and other payables 3,763,913 1,008,233
Net cash used in operating activities (2,667,746) (604,288)
Cash flow from investing activities
Acquisition of T-Rex Resources (Trinidad) Ltd 12 (1,620,131) -
Capitalised costs - Project Guercif - Morocco 10 (7,060,272) (2,588,694)
Net cash used in investing activities (8,680,403) (2,588,694)
Cash flows from financing activities
Proceeds from issuance of shares, net of issue costs 17 14,598,556 4,938,323
Finance expense paid (87,277) (12,206)
Finance income received 36,495 4,477
Net cash generated from financing activities 14,547,774 4,930,594
Effect of exchange rates on cash (38,752) 62,514
Net increase in cash and cash equivalents 3,160,873 1,800,126
Cash and cash equivalents at the beginning of the year 3,323,161 1,523,035
Cash and cash equivalents at the end of the year 6,484,034 3,323,161
Significant non-cash transactions
During the year there were various The significant non-cash transactions
relating to share options and warrants issued during the year, which are
detailed in notes 17 and 19.
Statement of accounting policies
For the year ended 31 December 2023
General information
Predator Oil & Gas Holdings Plc ("the Company") and its subsidiaries
(together "the Group") are engaged principally in the operation of an oil and
gas development business in the Republic of Trinidad and Tobago and an
exploration and appraisal portfolio in Ireland and Morocco. The Company's
ordinary shares are on the Official List of the UK Listing Authority in the
standard listing section of the London Stock Exchange.
Predator Oil & Gas Holdings plc was incorporated in 2017 as a public
limited company under Companies (Jersey) Law 1991 with registered number
125419. It is domiciled and registered at IFC5, 3rd Floor, Castle Street, St
Helier, Jersey, JE2 3BY.
Basis or preparation and going concern assessment
The principal accounting policies adopted in the preparation of the financial
information are set out below. The policies have been consistently applied
throughout the current year and prior year, unless otherwise stated. These
financial statements have been prepared in accordance with International
Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the
International Accounting Standards Board (IASB) as adopted by the European
Union and with those parts of the Companies (Jersey) Law, 1991 applicable to
companies preparing their accounts under IFRS. The Company has adopted the
exemption under Companies (Jersey) Law 1991 Article 105 (11) not to prepare
separate accounts.
The consolidated financial statements incorporate the results of Predator Oil
& Gas Holdings Plc and its subsidiary undertakings as at 31 December 2023.
In prior years, the financial statements notes were rounded to the nearest
thousands and did not follow the same treatment as the prime statements,
therefore, the Directors have amended the presentation of the notes to be
rounded to the nearest pound.
The financial statements are prepared under the historical cost convention on
a going concern basis. The financial statements of the subsidiaries are
prepared for the same reporting period as the parent company, using consistent
accounting policies. All intra-group balances, transactions, income and
expenses and profits and losses resulting from intra-group transactions that
are recognised in assets, are eliminated in full. Subsidiaries are fully
consolidated from the date of acquisition, being the date on which the Group
obtains control, and continue to be consolidated until the date that such
control ceases.
The preparation of financial statements requires an assessment on the validity
of the going concern assumption. At the date of these financial statements the
Directors do not expect that the Group will require further funding for the
Group's corporate overheads, Irish licence interests, Moroccan licence and the
Trinidad licence. Pursuant to a Prospectus in August 2023 total capital of
£10 million before expenses, was raised. At 31 December 2023 the Group held
£6.5 million in cash. In 2024 a minor quantum of these funds will be
required for general working capital for corporate overheads and for overheads
in Morocco, Ireland and Trinidad. The Group has committed to a programme of
testing wells following a successful drilling campaign in Morocco and
following the acquisition of TRex Resources, to well workovers in Trinidad.
Expenditures on these activities will be comfortably met through the course of
2024 and into 2025 without resorting to raising fresh funding. The Group
also has announced an intention to pursue various incremental activities in
Morocco and Trinidad. Progressing these discretionary activities will be
dependent partly, on further equity and or debt fund raises and in the case of
Trinidad will be supported by the proceeds of oil production following the
aforesaid workovers. Directors are confident that the Group will be able
to meet requirements over the course of the next 24 months.
Change in Accounting Policies
At the date of approval of these financial statements, certain new standards,
amendments and interpretations have been published by the International
Accounting Standards Board but are not as yet effective and have not been
adopted early by the Group. All relevant standards, amendments and
interpretations will be adopted in the Group's accounting policies in the
first period beginning on or after the effective date of the relevant
pronouncement.
At the date of authorisation of these financial statements, a number of
Standards and Interpretations were in issue but were not yet effective. The
Directors do not anticipate that the adoption of these standards and
interpretations, or any of the amendments made to existing standards as a
result of the annual improvements cycle, will have a material effect on the
financial statements in the year of initial application.
Standards and amendments to existing standards effective 1 January 2023
- Amendment to IAS 37 - Provisions, Contingent Liabilities and Contingent
Assets - Onerous contracts.
- Amendments to IFRS 3 - Business Combinations - Reference to Conceptual
Framework
- Amendments to IAS 16 - Property, Plant and Equipment - Proceeds before
Intended Use
New Standards, amendments and interpretations effective after 1 January 2023
and have not been early adopted
The Group does not believe that the standards not yet effective, will have a
material impact on the consolidated financial statements.
Areas of estimates and judgement
The preparation of the group financial statements in conformity with generally
accepted accounting principles requires the use of estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on management's best knowledge of current
events and actions, actual results may ultimately differ from those estimates.
The Group commenced operations in 2018 and did not enter into material
operational transactions requiring significant estimates and assumptions to be
effected in preparation of financial statements for the reporting period. The
critical accounting estimates and judgements made are in line with those made
in the audited financial statements for the year ended 31 December 2022 with
the exception of estimates used in the relation to the valuation of the
acquisition of T-Rex Resources (Trinidad) Limited as detailed in note 12.
Provisions
Provisions are recognised when the Group has a present obligation (legal or
constructive) as a result of a past event and it is probable that an outflow
of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the
obligation. Where the Group expects some or all of a provision to be
reimbursed, the reimbursement is recognised as a separate asset but only when
the reimbursement is virtually certain. The expense relating to any provision
is presented in the statement of comprehensive income net of any
reimbursement. If the effect of the time value of money is material,
provisions are discounted using a current pre-tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used,
the increase in the provision due to the passage of time is recognised as a
borrowing cost.
a) Going concern
The Group's cash flow projections indicate that the Group should have
sufficient resources to continue as a going concern. As at 31 December 2023
the Group had cash of £6.5 million, no debt and minimal licence commitments
for the ensuing year. As a result, the Group's overheads will not require
funding for a minimum of 12 months from the date of this review. In
addition, the Group is fully funded for all firm operational commitments for
2024.
Heretofore the Group has not generated revenues from operations. Going
forward the Group will depend on raising equity, debt finance and licence and
or joint venture partnerships to finance the Group's projects to maturity and
revenue generation.
The Group's subsidiaries are funded by inter-company loans advanced by
Predator Oil & Gas Holdings plc ('the Company'). The recoverability of the
inter-company loans advanced depends also on the subsidiaries realising their
cash flow projections.
The Board have reviewed a range of potential cash flow forecasts for the
period to 31 December 2025, including reasonable possible downside scenarios.
This has included the following assumptions:
1. Trinidad - Cory Moruga licence
For Predator Oil & Gas Trinidad Ltd. where production revenues from its
wholly Trinidad owned subsidiary, T-Rex Resources (Trinidad) Limited ('TRex')
are forecast to be generated in the latter part of 2024 following a program of
well workovers in early 2024. The workovers will be funded out of existing
cash resources. Leading into 2025 production revenues are forecast from the
near-term well workovers of the Snowcap field wells to re-establish production
and the medium implementation of a Field Development Plan, where project
economics have been stress-tested at lower oil prices. Accumulated material
tax losses in T-Rex significantly improve the near-term positive cash flow
projections even at a lower oil price. The Licence provides the Group with
the potential to generate strongly positive cashflows so as possibly to
contribute organically towards further development of the Group's assets.
Capital required for a staged field development in 2025 could be funded from
operating profits generated from an increasing level of gross production
revenues following the well workovers. The Group may resort to the option of
raising equity funding to accelerate this development if need be.
The Initial Work Programme agreed by TRex with the MEEI will be conducted over
the next three years without any fixed commitments to be met in the first two
years.
2. Morocco - Guercif licence
In the case of Predator Gas Ventures Ltd., recovery of inter-company loans is
dependent upon the two phases of the Guercif rigless testing programme
successfully recovering commercial quantities of gas that can be developed and
brought to market. Following significant gas discoveries in 2023 a programme
of rigless testing is underway in H1 2024. Phase1 of this programme is fully
funded. The Company may drill two appraisal or development wells to
potentially, if successful, add incremental gas resources to support and
extend the production profiles of a CNG project. Funding and timing of the
discretionary drilling programme will be dictated by the availability and
quantum of production revenues generated by Cory Moruga and the opportunity
for partial monetisation of gas assets in Guercif. The Moroccan gas market is
commercially attractive and even relatively low volumes of discovered gas are
likely to be economic. The Collaboration Agreement with Afriquia Gaz for
negotiating a Gas Sales Agreement de-risks the marketing of even small volumes
of gas. Funding for a CNG project likely will be secured by project finance
which may include a leasing arrangement for CNG trailers and equipment and or
a partial sale of equity in the project. The Company also is seeking to drill
in H1 2024 the Jurassic target, the extreme edge of which was penetrated in
the MOU-4 downdip. Funding for this well be either through an equity placing
and or the Group's internal cash resources.
3. Ireland
In the case of Predator Oil and Gas Ventures Ltd., the quantum of
inter-company loan is relatively small, and no substantive expenditures are
anticipated going forward in 2024. The Group is awaiting the outcome of
applications for successor authorisations to Licensing Options 16/26 (Corrib
South) and 16/30 (Ram Head) which remain under consideration by the Department
of the Environment, Climate and Communications. There are not likely to be any
significant funding implications emerging from this process in 2024. In the
future, the potential exists for the Company, as promoters of an LNG project
to receive introduction and service providers' fees and a free minority equity
position in a joint venture vehicle to move to the project development stage.
Alternatively, should an award of a successor authorisation occur in 2024 our
Corrib South asset may attract interest from a Corrib gas field participant
possibly resulting in a monetisation event. During 2023 the Company had an
unsolicited approach from a partner in the Corrib gas field to potentially
acquire some or all of its interest in Corrib South in the event a successor
authorisation is awarded in 2024. Under these circumstances the
inter-company loan would constitute past costs contributing to the level of
free equity. The commercial terms of any future potential transaction may or
may not be capable of satisfying the quantum of the inter-company loan.
Management have also assessed that the carrying value and recoverability of
the investment, including intercompany receivables is ultimately dependent on
the value of the underlying assets of the Group. Further evidence of its
realisable value can also be noted by reference the market capitalisation of
the Group on the
London Stock exchange at the date of this report which can be used as a guide
and to provide further assurance of its carrying value subsequent to the year
end.
b) Share based payments
The Group has applied the requirements of IFRS 2 Share-based Payment for all
grants of equity instruments.
The Group operates an equity settled share option scheme for directors. The
increase in equity is measured by reference to the fair value of equity
instruments at the date of grant. The liabilities incurred under these
arrangements are assumed to be converted into shares in the parent company,
under an option arrangement. The fair value of the service received in
exchange for the grant of options and warrants is recognised as an expense.
Equity-settled share-based payments are measured at fair value (excluding the
effect of non-market based vesting conditions) at the date of grant. The fair
value determined at the grant date of equity-settled share-based payment is
expensed over the vesting period, based on the Group's estimate of shares that
will eventually vest and adjusted for the effect of non-market based vesting
conditions.
During the year, the Company issued warrants in lieu of fees to stockbrokers.
The warrant agreements do not contain vesting conditions and therefore the
full share-based payment charge, being the fair value of the warrants using
the Black-Scholes model, has been recorded immediately. The charge is
recognised within the statement of changes in equity. The valuation of these
warrants involves making a number of estimates relating to price volatility,
future dividend yields and continuous growth rates (see Note 19).
The fair value of the share options is estimated by using the Black Scholes
model on the date of grant based on certain assumptions. Those assumptions are
described in note 19 and include, among others, the expected volatility and
expected life of the options. The expected life used in the model has been
adjusted, based on management's best estimate, for the effects of
non-transferability exercise restrictions and behavioural considerations. The
market price used in the model is the market price at the date of the issue of
the options. Where the terms and conditions of options are modified before
they vest, the increase in the fair value of the warrants, measured
immediately before and after the modification, is also charged to profit or
loss over the remaining vesting period.
Where equity instruments are granted to persons or entities other than staff,
the fair value of goods and services received is charged to profit or loss,
except where it is in respect to costs associated with the issue of shares, in
which case, it is charged to the share premium account.
The fair values calculated are inherently subjective and uncertain due to the
assumptions made and the limitation of the calculations used. Further details
of the specific amounts concerned are given in note 19.
c) Intangible assets - Project Guercif
All expenditure relating to oil and gas activities is capitalised in
accordance with the "successful efforts" method of accounting, as described in
IFRS 6 - "Exploration for and Evaluation of Mineral Resources". Under this
standard, the Group's exploration and appraisal activities are capitalised as
intangible assets.
The direct costs of exploration and appraisal are initially capitalised as
intangible assets, pending determination of the existence of commercial
reserves in the licence area. Such costs are classified as intangible
assets based on the nature of the underlying asset, which does not yet have
any proven physical substance. Exploration and appraisal costs are held,
un-depreciated, until such a time as the exploration phase on the licence area
is complete or commercial reserves have been discovered.
If no commercial reserves exist, then that particular exploration/appraisal
effort was "unsuccessful" and the costs are written off to the income
statement in the period in which the evaluation is made. The success or
failure of each exploration/appraisal effort is judged on a field by field
basis.
Net proceeds from any disposal of an exploration asset are initially credited
against the previously capitalised costs. Any surplus proceeds are credited to
the income statement. Net proceeds from any disposal of exploration assets are
credited against the previously capitalised cost. A gain or loss on disposal
of an exploration asset is recognised in the income statement to the extent
that the net proceeds exceed or are less than the appropriate portion of the
net capitalised costs of the asset.
Upon commencement of production, capitalised costs will be amortised on a unit
of production basis which is calculated to write off the expected cost of each
asset over its life in line with the depletion of proved and probable
reserves.
For more information, please refer to note 10.
Business combinations
Business combinations are accounted for using the acquisition method. The cost
of an acquisition is measured as the fair value of the assets given, equity
instruments issued, and liabilities incurred or assumed at the acquisition
date.
Identifiable assets acquired and liabilities assumed are measured and
recognized at their fair value at the date of the acquisition, with the
exception of income taxes, and lease liabilities. Any deferred tax asset or
liability arising from a business combination is recognized at the acquisition
date. Transaction costs associated with a business combination are expensed as
incurred. Results of acquisitions are included in the financial statements
from the closing date of the acquisition. If the consideration of the
acquisition is less than the fair value of the net assets received, the
difference is recognized immediately in the statements of comprehensive
income. If the consideration of the acquisition is greater than the fair value
of the net assets received, the difference is recognised as goodwill on the
consolidated balance sheet.
The directors have included provisional fair values within the business
combination note as presented above, which represent their best estimates
using information available at the year end. Under IFRS 3, there is a
measurement period which shall not exceed one year from the acquisition date,
during which the company can, if necessary, retrospectively adjust the
provisional amounts recognised at the acquisition date to reflect new
information obtained about facts and circumstances that existed as of the
acquisition date.
Basis of consolidation
Where the Group has control over an investee, it is classified as a
subsidiary. The Group controls an investee if all three of the following
elements are present: power over the investee, exposure to variable returns
from the investee, and the ability of the investor to use its power to affect
those variable returns. Control is reassessed whenever facts and circumstances
indicate that there may be a change in any of these elements of control.
The consolidated financial statements present the results of the Company and
its subsidiaries ("the Group") as if they formed a single entity.
Inter-company transactions and balances between Group companies are therefore
eliminated in full. Uniform accounting policies are applied across the Group.
The consolidated financial statements incorporate the results of business
combinations using the acquisition method. In the statement of financial
position, the acquirer's identifiable assets, liabilities and contingent
liabilities are initially recognised at their fair values at the acquisition
date. The results of acquired operations are included in the consolidated
statement of comprehensive income from the date on which control is obtained.
They are deconsolidated from the date on which control ceases.
Intangible assets
Mineral exploration and evaluation expenditure relates to costs incurred in
the exploration and evaluation of potential mineral resources and includes
exploration and mineral licences, researching and analysing historical
exploration data, exploratory drilling, trenching, sampling and the costs of
pre-feasibility studies.
Exploration and evaluation expenditure for each area of interest, other than
that acquired from another entity, is charged to the consolidated statement of
income as incurred except when the expenditure is expected to be recouped from
future exploitation or sale of the area of interest and it is planned to
continue with active and significant operations in relation to the area, or at
the reporting period end, the activity has not reached a stage which permits a
reasonable assessment of the existence of commercially recoverable reserves,
in which case the expenditure is capitalised. Purchased exploration and
evaluation assets are recognised at their fair value at acquisition. As the
capitalised exploration and evaluation expenditure asset is not available for
use, it is not depreciated.
Exploration and evaluation assets have an indefinite useful life and are
assessed for impairment annually or when facts and circumstances suggest that
the carrying amount of an asset may exceed its recoverable amount. The
assessment is carried out by allocating exploration and evaluation assets to
cash generating units, which are based on specific projects or geographical
areas. IFRS 6 permits impairments of exploration and evaluation expenditure to
be reversed should the conditions which led to the impairment improve. The
Group continually monitors the position of the projects capitalised and
impaired.
Whenever the exploration for and evaluation of mineral resources in cash
generating units does not lead to the discovery of commercially viable
quantities of mineral resources and the Group has decided to discontinue such
activities of that unit, the associated expenditures are written off to the
Statement of comprehensive income.
Financial assets
The Financial assets currently held by the Group and Company are classified as
loans and receivables and cash and cash equivalents. These assets are
non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market. They are initially recognised at fair value
plus transaction costs that are directly attributable to their acquisition or
issue and are subsequently carried at amortised cost using the effective
interest rate method less provision for impairment.
Impairment provisions are recognised when there is objective evidence (such as
significant financial difficulties on the part of the counterparty or default
or significant delay in payment) that the Group will be unable to collect all
of the amounts due under the terms receivable, the amount of such a provision
being the difference between the net carrying amount and the present value of
the future expected cash flows associated with the impaired receivable. For
receivables, which are reported net, such provisions are recorded in a
separate allowance account with the loss being recognised within
administrative expenses in the statement of comprehensive income. On
confirmation that the receivable will not be collectable, the gross carrying
value of the asset is written off against the associated provision.
Cash and cash equivalents
These amounts comprise cash on hand and balances with banks. Cash equivalents
are short term, highly liquid accounts that are readily converted to known
amounts of cash. They include short-term bank deposits and short-term
investments.
Any cash or bank balances that are subject to any restrictive conditions, such
as cash held in escrow pending the conclusion of conditions precedent to
completion of a contract, are disclosed separately as "Restricted cash". The
security deposit is recognised within trade and other receivables in note 14.
There is no significant difference between the carrying value and fair value
of receivables.
Derecognition
The Group derecognises a financial asset when the contractual rights to the
cash flow from the asset expire, or it transfers the asset and substantially
all the risk and rewards of ownership of the asset to another entity.
Financial liabilities
The Group's financial liabilities consist of trade and other payables
(including short terms loans) and long term secured borrowings. These are
initially recognised at fair value and subsequently carried at amortised cost,
using the effective interest method. All interest and other borrowing costs
incurred in connection with the above are expensed as incurred and reported as
part of financing costs in profit or loss. Where any liability carries a right
to convertibility into shares in the Group, the fair value of the equity and
liability portions of the liability is determined at the date that the
convertible instrument is issued, by use of appropriate discount factors.
Derecognition
The Group derecognises a financial liability when the obligations are
discharged, cancelled or they expire.
Foreign currency
The functional currency of the Group and all of its subsidiaries is the
British Pound Sterling.
Transactions entered into by the Group entities in a currency other than the
currency of the primary economic environment in which it operates (the
"functional currency") are recorded at the rates ruling when the transactions
occur. Foreign currency monetary assets and liabilities are translated at the
rates ruling at the date of the statement of financial position. Exchange
differences arising on the retranslation of unsettled monetary assets and
liabilities are similarly recognised immediately in profit or loss, except for
foreign currency borrowings qualifying as a hedge of a net investment in a
foreign operation.
The exchange rates applied at each reporting date were as follows:
31 December 2023 - £1: £1 : US$1.2731, £1 : Euro1.1505 , £1 : MAD12.5947
and £1: TT$ 8.34
31 December 2022 - £1: US$1.2041, £1: Euro1.1313 and £1: MAD12.5824
Investments in subsidiaries
The Group's investment in its subsidiaries are recorded at cost.
Plant and equipment
Plant and equipment owned by the Group relates solely to computer equipment.
Depreciation is provided on equipment so as to write off the carrying value of
items over their expected useful economic lives. It is applied at the
following rates:
Computer equipment - 20% per annum, straight line
Share options and Equity Instruments
Where the terms and conditions of options are modified before they vest, the
increase in the fair value of the options, measured immediately before and
after the modification, is also charged to profit or loss over the remaining
vesting period. Where equity instruments are granted to persons other than
consultants, the fair value of goods and services received is charged to
profit or loss, except where it is in respect to costs associated with the
issue of shares, in which case, it is charged to the share capital or share
premium account.
Equity instruments
Share capital represents the amount subscribed for shares at each of the
placings.
The reconstruction reserve account represents premiums received on the share
capital of subsidiaries and also includes directly related share issue costs.
Warrants issuance cost reserve includes any costs relating to warrants issued
for services rendered accounted for in accordance with IFRS 2 - Equity-settled
instruments.
The share-based payments reserve represents equity-settled shared-based
employee remuneration for the fair value of the options issued.
Retained earnings include all current and prior period results as disclosed in
the Statement of comprehensive income, less dividends paid to the owners of
the Company.
Taxation
The Company and all subsidiaries ('the Group') are registered in Jersey,
Channel Islands and are taxed at the Jersey company standard rate of 0%.
However, the Group's projects are situated in jurisdictions where taxation may
become applicable to local operations.
The major components of income tax on the profit or loss include current and
deferred tax.
Current tax
Current tax is based on the profit or loss adjusted for items that are
non-assessable or disallowed and is calculated using tax rates that have been
enacted or substantively enacted by the reporting date.
Tax is charged or credited to the statement of comprehensive income, except
when the tax relates to items credited or charged directly to equity, in which
case the tax is also dealt with in equity.
Deferred tax
Deferred tax assets and liabilities are recognised where the carrying amount
of an asset or liability in the statement of financial position differs to its
tax base, except for differences arising on:
• The initial recognition of an asset or liability in a transaction which is
not a business combination and at the time of the transaction affects neither
accounting or taxable profit; and
• Investments in subsidiaries and jointly controlled entities where the
Group is able to control the timing of the reversal of the difference and it
is probable that the differences will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it
is probable that taxable profit will be available against which the difference
can be utilised.
The amount of the asset or liability is determined using tax rates that have
been enacted or substantively enacted by the reporting date and are expected
to apply when deferred tax liabilities/ (assets) are settled/ (recovered).
Deferred tax balances are not discounted.
Predator Gas Ventures Limited has a Withholdings Tax Liability in Morocco for
all services that are carried out in in relation to wells. The
Withholdings Tax is charged at 10% on all services (excluding material) (see
note 4).
1. Segmental analysis
The Group operates in one business segment, the exploration, appraisal and
development of oil and gas assets. The Group has interests in three
geographical segments being Africa (Morocco), Europe (Ireland) and the
Caribbean (Trinidad and Tobago).
The Group's operations are reviewed by the Board (which is considered to be
the Chief Operating Decision Maker ('CODM')) and split between oil and gas
exploration and development and administration and corporate costs.
Exploration and development are reported to the CODM only on the basis of
those costs incurred directly on projects.
Administration and corporate costs are further reviewed on the basis of spend
across the Group.
Decisions are made about where to allocate cash resources based on the status
of each project and according to the Group's strategy to develop the
projects. Each project, if taken into commercial development, has the
potential to be a separate operating segment. Operating segments are
disclosed below on the basis of the split between exploration and development
and administration and corporate.
Europe Caribbean Africa Corporate
Year ended 31 December 2023 £ £ £ £
Finance income - - - 36,495
Gross loss
Administrative and overhead expenses (68,038) 6,204 (401,261) (2,761,626)
Share options and warrant expense - - - (1,540,481)
Finance expense - - - (87,277)
Loss for the year from continuing operations (68,038) 6,204 (401,261) (4,352,889)
Total reportable segment intangible assets - 5,251,937 12,335,992 -
Total reportable segment non-current assets - - - 1,181
Total reportable segment current assets - 584,130 1,322,331 6,430,397
Total reportable segment assets - 5,836,067 13,658,323 6,431,578
Total reportable segment liabilities - (3,572,030) (536,793) (908,342)
Europe Caribbean Africa Corporate
Year ended 31 December 2022 £ £ £ £
Finance income - - - 4,477
Gross Loss
Administrative and overhead expenses (205,580) (67,843) (657,988) (366,294)
Share options and warrant expense - - - (1,248,084)
Finance expense - - - (17,532)
Loss for the year from continuing operations (205,580) (67,843) (657,988) (1,627,433)
Total reportable segment intangible assets - - 5,275,720 -
Total reportable segment non-current assets - - - 3,448
Total reportable segment current assets - 659,504 1,634,816 3,015,511
Total reportable segment assets - 659,504 6,910,536 3,018,959
Total reportable segment liabilities (10,049) (2,821) (598,002) (642,380)
2023 2022
Group Group
2 Auditor's remuneration £ £
Audit of the accounts of the Group 66,000 61,200
Review of interim financial statements 3,000 2,500
69,000 63,700
2023 2022
Group Group
3 Finance income £ £
Bank interest received 36,495 4,477
36,495 4,477
2023 2022
Group Group
4 Administration expenses £ £
Administration fees 154,753 107,425
Audit fee - refer to note 2 69,000 63,700
Annual return fee 1,350 1,350
Non-executive director fees 92,864 107,342
Insurance 152,395 102,947
Legal and professional fees 158,488 106,890
AIM listing costs - 62,089
Listing costs 501,215 216,877
Website costs 3,776 3,950
Directors fees 92,864 245,331
Technical Consultancy fees 1,300,725 296,653
Travel expenses 40,169 119,090
Computer/system costs/IT support 8,766 114,429
Bank charges 32,143 34,559
Depreciation 2,267 2,436
Sundry expenses 5,280 2,717
WHT payable 489,629 -
Foreign exchange 119,038 (290,080)
Share based payments - options 1,540,481 1,234,880
Share based payments - warrants - 13,204
4,765,203 2,545,789
2023 2022
Group Group
5 Finance expense £ £
Bank interest paid - -
Interest on Stock Lending Agreement (1) - See note 15 46,735 14,330
Directors' loan (2) - See note 15 40,542 3,202
87,277 17,532
2023 2022
Group Group
6 Taxation £ £
Loss on ordinary activities before tax (4,815,984) (2,558,844)
Loss on ordinary activities at Jersey standard 0% tax (2021 : 0%) - -
Tax charge for the year - -
No charge to taxation arises due to the losses incurred.
Predator Gas Ventures Limited is subject to tax in its operating jurisdiction
of Morocco; however, the Company is loss making and has no taxable profits to
date.
No deferred tax asset has been recognised on accumulated tax losses because of
uncertainty over the timing of future taxable profits against which the losses
may be offset.
No deferred tax asset or liability has been recognised as the Standard Jersey
corporate tax rate is 0%.
2023 2022
Group Group
7 Personnel £ £
Executive and non-executive directors 460,520 522,051
Share option scheme 1,540,481 1,234,880
2,001,001 1,756,931
The average number of personnel (including directors) during the year was:
Management - (Executive directors) 2 2
Non-management - (Non-executive directors) 2 2
4 4
Four Directors at the end of the period have share options receivable under
long term incentive schemes. The highest paid Director received an amount of
£321,622 (2022: £236,575). The Group does not have employees. All personnel
are engaged as service providers.
2023 2022
8 Earnings per share £ £
Weighted average number of shares 403,768,275 323,184,523
Loss for the year (4,815,984) (2,558,844)
Earnings per share basic and diluted (pence) (1.193) (0.792)
Dilutive loss per Ordinary Share equals basic loss per Ordinary Share as, due
to the losses incurred in 2023 and 2022, there is no dilutive effect from the
subsisting share options.
9 Loss for the financial year
The Group has adopted the exemption in terms of Companies (Jersey) law 1991
and has not presented its own income statement in these financial statements.
10 Other intangible assets Project Guercif Cory Moruga Total
Gross carrying amount
Balance at 1 January 2023 5,275,720 - 5,275,720
Additions 7,060,272 7,060,272
Acquired through Business Combinations (see note 12) 5,251,937 5,251,937
At 31 December 2023 12,335,992 5,251,937 17,587,929
Depreciation and impairment
Balance at 1 January 2023 - - -
Depreciation - - -
Balance at 31 December 2023 - - -
Carrying amount at 31 December 2022 5,275,720 - 5,275,720
Carrying amount at 31 December 2023 12,335,992 5,251,937 17,587,929
Project Guercif
The total carrying amount of Project Guercif as at 31 December 2023 of
£12,335,992 (2022: £5,275,000) relates to costs incurred with wells MOU-1,
MOU-2, MOU-3 and MOU-4.
MOU-1, MOU-3 and MOU-4
In conformance with the current Moroccan regulatory procedures for rigless
well testing, the Company has expressed in writing to the Office National des
Hydrocarbures et des Mines ("ONHYM") the intention to test MOU-1, MOU-3 and
MOU-4. Planning for these activities was carried out in Q4 2023.
The Company will begin Phase 1 rigless well testing for MOU-1 and MOU-3 at the
very earliest opportunity once the regulatory process has been fully complied
with all approvals and consents are given.
MOU-2:
On 25 January 2023, the Company announced that MOU-2 well had been suspended
with an option to re-enter after reaching a depth of 1,260 metres Measured
Depth.
Wireline logs were acquired from the 95/8" casing point at 677 metres to 1,010
metres Measured Depth. The wireline logging tools were not able to log deeper
than this depth due the presence of extremely sticky clays in a geological
formation overlying the Moulouya Fan primary objective.
The debris flow potentially forms a highly effective seal on the underlying
Moulouya Fan. The thickness of the Moulouya Fan reservoir interval is expected
to increase between MOU-1 and MOU-2 based on the sand content of the
debris-flow penetrated in MOU-2 allowed an extrapolation across to MOU-1 to be
made. A re-entry and deepening of MOU-2 will be fully evaluated once a
solution to optimising the drilling mud programme and mud properties has been
completed.
Isotube gas samples were recovered from the shallow section above 700 metres
measured depth.
All costs relating to Project Guercif have been capitalised and will only be
depreciated once gas discovery is declared commercial and a Plan of
Development has been approved.
In accordance with IFRS 6, the Directors undertook an assessment of the
following areas and circumstances which could indicate the existence of
impairment:
• The Group's right to explore in an area has expired, or will expire in the
near future without renewal
• No further exploration or evaluation is planned or budgeted for
• A decision has been taken by the Board to discontinue exploration and
evaluation in an area due to the absence of a commercial level of reserves
• Sufficient data exists to indicate that the book value may not be fully
recovered from future development and production
Following their assessment, the Directors concluded that no impairment charge
in respect to any licences still held, was necessary for the year ended 31
December 2023(2022: £nil).
11 Property, plant and equipment £
Cost
At 31 December 2022 11,181
Additions -
At 31 December 2023 11,181
Amortisation
At 31 December 2022 7,733
Charge for the year 2,267
At 31 December 2023 10,000
Carrying amount
At 31 December 2022 3,448
At 31 December 2023 1,181
12 Investment in subsidiaries 2023 2022
£ £
Cost at the beginning of the year 537,088 537,088
Acquisition of T-Rex Resources (Trinidad) Limited ("T-Rex") 2,264,037 -
2,801,125 537,088
The principal subsidiaries of Predator Oil and Gas Holdings Plc, all of which
are included in these consolidated Annual Financial Statements, are as
follows:
Country of registration Class Proportion held by Group Nature of business
Predator Oil and Gas Ventures Limited Jersey Ordinary 100% Licence options in offshore Ireland - Application for successor authorisations
Predator Oil & Gas Trinidad Limited Jersey Ordinary 100% Cory Moruga Exploration & Production Licence, Trinidad
T-Rex Resources (Trinidad) Limited Trinidad Ordinary 100% Exploration licence onshore Trinidad
Predator Gas Ventures Limited Jersey Ordinary 100% Exploration licence onshore Morocco
Mag Mell Energy Ireland Limited (formerly Predator LNG Ireland Limited) Jersey Ordinary 100% Mag Mell FSRU Project concept
The registered address of all of the Group's companies is at 3rd Floor, IFC5,
Castle Street, St Helier, JE2 3BY, Channel Islands.
On 7 November 2022 the Group through its wholly owned subsidiary Predator Oil
& Gas Trinidad Limited ("POGT") entered into a binding purchase and sale
agreement to acquire 100% of the entire issued share capital of T-Rex which
holds an 83.8% interest in and operatorship of the Cory Moruga Exploration and
Production Licence onshore Trinidad, from Challenger Energy Group Plc
("CEG") for a consideration of US$1 million (£810,066) and the waiver of a
loan of £643,906 due to POGT by FRAM Exploration Trinidad Ltd, a subsidiary
of CEG for the investment in the Inniss-Trinity Pilot CO2 EOR Project.
Integral to this transaction, POGT agreed with the MEEI to address legacy
liabilities accrued by the previous operator with a payment of US$ 1 million
(£810,066), in part settlement of aforesaid liabilities, to the MEEI. The
acquisition cost for P50 Prospective and Contingent resources represented
US$0.14 per barrel. The acquisition enabled the Group to expand its Trinidad
operations from a CO2 EOR project to one with near term cash flow generation
potential.
The T-Rex assets and liabilities are an integrated set of activities and
assets that are capable of being managed and conducted for the purpose of
providing a return, and therefore constitute a business. Accordingly, the
transaction has been accounted for in accordance with IFRS 3 'Business
Combinations' which requires the assets acquired and liabilities assumed to be
recognised on the acquisition date at their fair value.
The fair value of the assets acquired have been based on resources as
reported by Scorpion Geoscience Limited in the Cory Moruga Independent
Technical Report including the resource potential of the Snowcap-1 discovery,
which gives 2C and 3C Contingent Resources of 1.40 and 1.84 million barrels
respectively and 2C and 3C Prospective Resources of 12.91 and 19.57 million
barrels respectively net to the T-Rex. The after-tax undiscounted net-back is
forecast to be US$19.61 per barrel (using a flat WTI oil spot price of US$76
per barrel. Project economics support a valuation of NPV10% of US$85m.
Management considers a 10% discount factor as an appropriate measure of the
risk profile of the project. The Group has recognised £5,251,939 as an
intangible asset in respect of the valuation of Cory Moruga instead of
recording a goodwill of the same amount on consolidation of TRex's balance
sheet with POGT.
With the acquisition TT $323,652,447 (£38,813,400) of tax losses as of 2022
were acquired and are offsetable against 50% Petroleum Profit Tax on future
net operating profits from oil production in the Cory Moruga Exploration and
Production Licence. Further details of the transaction are provided in the
Strategy Report.
The acquisition of T-Rex had no impact on the statement of comprehensive
income. In the period from 1 January 2023 to acquisition date T-Rex made a
loss of £932,440.
The amounts recognised in respect of the identifiable assets acquired and
liabilities assumed are:
Consideration US$ £
Transfer to CEG 1,000,000 810,066
Transfer to MEEI 1,000,000 810,066
FRAM loan unwind 762,216 643,906
Costs of acquisition - -
Total 2,762,216 2,264,038
T-Rex Assets and Liabilities £
Trade and other receivables 584,130
Intangible asset 5,251,939
Liabilities (TTD 24,950,313) (3,572,032)
Total 2,264,037
13 Trade and other receivables 2023 2022
Group Group
£ £
Current
Loans receivable (i) - 659,504
Security deposit (US$1,500,000) (ii) 1,178,189 1,245,795
Prepayments and other debtors (iii) 674,632 81,371
1,852,821 1,986,670
(i) The brought forward loans receivable were waived in full in accordance
with the terms of the T-Rex acquisition detailed in Note 12.
On 7 November 2023, the Company announced the Completion of the acquisition of
100% of the share capital of T-Rex Resources (Trinidad) Limited ("T-Rex"). A
settlement agreement with Challenger, for Part of the transaction includes the
settlement of the total outstanding loan amounts from FRAM.
(ii) A security deposit of USD1,500,000 (2022: USD1,500,000) is held by
Barclays Bank in respect of a guarantee provided to Office National des
Hydrocarbures et des Mines (ONHYM) as a condition of being granted the Guercif
exploration licence. These funds are refundable on the completion of the
Minimum Work Programme set out in the terms of the Guercif Petroleum Agreement
and Association Contract. Subject to ratification by a Joint Ministerial
Order, the Bank Guarantee is being rolled over into the First Extension Period
of the Guercif Licence.
(iii) Prepayments are in respect of amounts paid in advance to the Financial
Conduct Authority, media service providers, an insurance premium and a debtor
in respect of the Joint Operating Agreement between Touchstone and MEEI of
£550,209.
There are no material differences between the fair value of trade and other
receivables and their carrying value at the year end.
14 Cash and cash equivalents 2023 2022
Group Group
£ £
Barclays Bank Plc 6,417,092 2,967,535
Société Générale 66,940 355,626
6,484,033 3,323,161
15 Trade and other payables 2023 2022
Group Group
£ £
Current
Trade payables and other payables (i) 1,453,484 679,138
Accruals (ii) 2,586,288 61,183
Provisions (ii) 977,393 -
Directors' loans (iv) - 512,931
5,017,165 1,253,252
i) On the 12 May 2023, the Executive Directors were compensated for the
capitalisation of the loans in the sum of £323,785 and £183,813 (as per
iv). They will receive cash payments from the Company upon either a) a
flow rate of 1 million cfg/day being achieved from any well of Guercif
petroleum or b) a flow rate of 100 bopd being achieved from any well in
Trinidad.
(i) On 1 December 2023 the Executive Directors were awarded a performance
bonus in recognition of the work undertaken to bring forth the Group's
drilling programme in Morocco and the successful drilling results. The bonus
was settled by the issue of 1,329,787 new Ordinary Shares to each Executive
Director representing an award of £125,000 each. The remaining 50% of the
performance award remains payable and the Executive Directors have the option
of receiving the remaining amount by way of additional shares or cash at their
discretion. An amount of £250,000 has been recognised in trade and other
payables in respect of the amount payable.
(ii) The amount of GBP2,586,288 recognised in accruals relates to an amount of
USD3.2 million payable to the Trinidadian Ministry of Energy and Energy
Industries in respect of past dues on the Cory Moruga licence.
(iii) The amount of GBP977,393 relates to provisions in respect of financial
obligations and decommissioning in respect of the Cory Moruga licence.
(iv) The Directors' loans were interest bearing at rates of 4% and 6%. The
loans and interest thereon were fully settled in the year.
16.Financial instruments - risk management
Details of the significant accounting policies in respect of financial
instruments are disclosed on pages 94 to 101. The Group's financial
instruments comprise cash and items arising directly from its operations such
as other receivables, trade payables and loans.
Financial risk management
The Board seeks to minimise its exposure to financial risk by reviewing and
agreeing policies for managing each financial risk and monitoring them on a
regular basis. No formal policies have been put in place in order to hedge the
Group's activities to the exposure to currency risk or interest risk; however,
the Board will consider this periodically.
The Group is exposed through its operations to the following financial risks:
• Credit risk
• Market risk (includes cash flow interest rate risk and foreign currency
risk)
• Liquidity risk
The policy for each of the above risks is described in more detail below.
The principal financial instruments used by the Group, from which financial
instruments risk arises are as follows:
• Receivables
• Cash and cash equivalents
• Trade and other payables (excluding other taxes and social security)
• Loans: payable within one year and payable in more than one year
The table below sets out the carrying value of all financial instruments by
category and where applicable shows the valuation level used to determine the
fair value at each reporting date. The fair value of all financial assets
and financial liabilities is not materially different to the book value.
2023 2022
£ £
Cash and trade receivables
Cash and cash equivalents 6,484,033 3,323,161
Trade and other receivables 1,852,821 1,905,299
Other liabilities
Trade and other payables (excluding short term loans) 2,430,877 1,192,069
Credit risk
Financial assets, which potentially subject the Group to concentrations of
credit risk, consist principally of cash, short-term deposits and other
receivables. Cash balances are all held at recognised financial institutions.
Other receivables are presented net of allowances for doubtful receivables.
Other receivables currently form an insignificant part of the Group's business
and therefore the credit risks associated with them are also insignificant to
the Group as a whole.
The Company has a credit risk in respect of inter-company loans to
subsidiaries. The Company is owed £18,435,673 by its subsidiaries (this
amount is not carried in the Statement of Financial Position as the accounts
are consolidated). The recoverability of these balances is dependent on the
commercial viability of the exploration activities undertaken by the
respective subsidiary companies. The credit risk of these loans is managed as
the directors constantly monitor and assess the viability and quality of the
respective subsidiary's investments in intangible oil & gas assets.
Maximum to credit risk
The Group's maximum exposure to credit risk by category of financial
instrument is shown in the table below:
2023 2023 2022 2022
carrying maximum carrying maximum
value exposure value exposure
£ £ £ £
Cash and cash equivalents 6,484,033 11,182,775 3,323,161 5,521,472
Receivables 1,852,822 2,512,326 1,986,670 1,986,670
The holding company's maximum exposure to credit risk by class of financial
instrument is shown in the table below:
2023 2023 2022 2022
carrying maximum carrying maximum
value exposure value exposure
£ £ £ £
Cash and cash equivalents 6,413,027 9,585,897 2,965,032 5,122,751
Receivables 17,370 17,370 1,905,300 1,905,300
Loans to Group Companies 18,435,673 18,435,673 9,546,184 9,546,184
Market risk
Cash flow interest rate risk
The Group has adopted a non-speculative policy on managing interest rate
risk. Only approved financial institutions with sound capital bases are used
to borrow funds and for the investments of surplus funds.
The Group seeks to obtain a favourable interest rate on its cash balances
through the use of bank deposits. The Group's bank paid a total of £32,143
(2022: £4,477) interest on cash balances during the year. At 31 December
2023, the Group had a cash balance of £6.413 million (2022: £3.323 million)
which was made up as follows:
2023 2022
£ £
Sterling 2,454,151 2,108,558
United States Dollar 3,830,035 830,810
Euro 132,910 28,168
Moroccan dirham 66,937 355,625
6,484,033 3,323,161
Foreign currency risk
Foreign exchange risk is inherent in the Group's activities and is accepted as
such. The majority of the Group's expenses are denominated in Sterling and
therefore foreign currency exchange risk arises where any balance is held, or
costs incurred, in currencies other than Sterling. At 31 December 2023 and 31
December 2022, the currency exposure of the Group was as follows:
Sterling US Dollar Other Total
£ £ £ £
at 31 December 2023
Cash and cash equivalents 2,454,151 3,830,035 199,847 6,484,033
Trade and other receivables 47,951 1,220,740 584,130 1,852,821
Trade and other payables (1,453,484) - (3,563,681) (5,017,165)
at 31 December 2022
Cash and cash equivalents 2,108,558 830,810 383,793 3,323,161
Trade and other receivables 107,831 1,878,839 - 1,986,670
Trade and other payables (803,549) (228,339) (221,364) (1,253,252)
Liquidity risk
Any borrowing facilities are negotiated with approved financial institutions
at acceptable interest rates. All assets and liabilities are at fixed and
floating interest rate. The Group seeks to manage its financial risk to ensure
that sufficient liquidity is available to meet the foreseeable needs both in
the short and long term. See also references to Going Concern disclosures in
the Strategic Report.
Capital
The objective of the directors is to maximise shareholder returns and minimise
risks by keeping a reasonable balance between debt and equity. At 31 December
2023 the Group's only debt balance which related to Directors was fully repaid
in year (2022: £512,931) as per note 15.
Number of shares Nominal value
17 Share capital
Issued and fully paid
Opening Balance 383,759,189 16,840,165
09 March 2023
Warrants exercise - Please refer to note 20 2,035,714 79,500
03 April 2023
Share Issue (i) 14,174,056 2,000,000
12 May 2023
Share options exercised - Please refer to note 20 19,112,049 1,596,986
12 May 2023
Share Issue 2,500,000 142,500
26 May 2023
Share options exercised - Please refer to note 20 1,000,000 50,000
26 May 2023
Share issue 3,822,410 217,877
15 August 2023
Share issue (ii) 45,189,580 1,890,000
15 August 2023
Share issue 90,909,090 10,000,000
01 December 2023
Bonus Payment (iii) 2,659,574 250,000
565,161,662 33,067,028
(i) On the share placing dated 3 April 2023 for a total
of 36,363,636 shares of no-par value, only 14,174,056 were shares considered
to be issued, the other 22,189,580 were lent by Paul Griffiths, a Director of
the Company.
(ii) On the share placing dated 15 August 2023 for a total
of 45,189,580 shares of no-par value, 44,689,580 shares were returned to Paul
Griffiths and 500,000 shares to Lonny Baumgardner. The value of the shares
returned to both Directors was based on the loan payable balance outstanding.
(iii) On 1 December 2023 the Executive Directors were
awarded a performance bonus in recognition of the work undertaken to bring
forth the Group's drilling programme in Morocco and the successful drilling
results. The bonus was settled by the issue of 1,329,787 new Ordinary Shares
to each Executive Director representing an award of £125,000 each.
18 Other reserves 2023 2022
Group Group
Warrants No of warrants £ £
issuance cost reserve
Balance brought forward 9,564,232 (583,825) (376,820)
Issue of warrants 13,360,411 (1,219,130) (436,452)
Exercised warrants at fair value (2,035,714) 44,142 187,127
Cancelled and/or expired warrants (i) (2,318,750) 47,057 42,320
Balance carried forward 18,570,179 (1,711,756) (583,825)
(i) The movement in reserve is £47,057 (2022:
£42,320), relates to warrants that expired in 2022 but only reflected in
reserves during this year.
2023 2022
Group Group
Share based payments reserve No of share options £ £
Balance brought forward 40,360,972 1,379,964 611,173
Issue of warrants 28,112,049 1,219,130 436,452
Extension of warrants exercise date - - 13,204
Cancelled share options - - -
Fair value movement of share options - 1,540,481 1,234,880
Share options exercised (20,112,049) (1,250,663) (728,618)
Warrants exercised - (44,142) (187,127)
Balance carried forward 48,360,972 2,844,770 1,379,964
19 Share based payments 2023 2022
Warrant and share option expense £ £
Warrant and share option expense:
- in respect of remuneration contracts 1,540,481 1,234,880
- in respect of expired remuneration contracts - -
- in respect of expiry date extension - 13,204
1,540,481 1,248,084
Share Options
The Group operates a share option plan for directors. Details of share
options granted and exercised during the year on a Director basis are noted
below:
Paul Griffiths
Share options issued during the year:
On 12 May 2023, the Company issued 3,328,119 share options at an exercise
price of 10.0p. The share options are exercisable immediately.
On the same day the Company issued 7,855,486 share options at an exercise
price of 8.0p. The share options are exercisable immediately.
Share options exercised during the year:
On 12 May 2023 the following share options were exercised:
· Share options agreement dated 9 November 2022 - 3,328,119 were
exercised at 10.0p each.
· Share options agreement dated 23 November 2022 - 7,855,486 were
exercised at 8.0p each.
Share options held as at year end:
· Share options agreement dated 9 November 2022 - 4,171,881 share
options at an exercise price of 10.0p. The share options are exercisable by 9
November 2029.
· Share options agreement dated 12 May 2023 - 3,328,119 share
options at an exercise price of 10.0p. The share options are exercisable
immediately.
· Share options agreement dated 12 May 2023 - 7,855,486 share
options at an exercise price of 8.0p. The share options are exercisable by
immediately.
Lonny Baumgardner
Share options issued during the year:
On 12 May 2023, the Company issued 72,958 share options at an exercise price
of 10.0p. The share options were exercisable immediately.
On the same day, 12 May 2023 the Company issued 7,855,486 share options at an
exercise price of 8.0p. The share options were exercisable immediately.
Share options exercised during the year:
On 12 May 2023, exercised the following share options:
· Share options agreement dated 9 November 2022 - 72,958 were
exercised at 10.0p each.
· Share options agreement dated 23 November 2022 - 7,855,486 were
exercised at 8.0p each.
Share options held at year end:
· Share options agreement dated 9 November 2022 - 7,427,042 share
options at an exercise price of 10.0p. The share options are exercisable by 8
November 2029.
· Share options agreement dated 12 May 2023 - 72,958 share options
at an exercise price of 10.0p. The share options are exercisable immediately.
· Share options agreement dated 12 May 2023 - 7,855,486 share
options at an exercise price of 8.0p. The share options are exercisable
immediately.
Alistair Jury
Share options issued during the year:
On 13 October 2023, the Company issued 3,000,000 share options at an
exercise price of 12.5p. The share options are exercisable by 12 October 2030.
Share options held at year end:
· Share options agreement dated 5 July 2022 - 2,000,000 share
options at an exercise price of 8.125p. The share options are exercisable by 4
July 2029.
· Share options agreement dated 13 October 2023 - 3,000,000 share
options at an exercise price of 12.5p. The share options are exercisable by 12
October 2030.
Carl Kindinger
Share options issued during the year:
On 13 October 2023, the Company issued 3,000,000 share options at an exercise
price of 12.5p. The share options are exercisable by 12 October 2030.
Share options held at year end:
· Share options agreement dated 9 November 2022 - 2,000,000 share
options at an exercise price of 7.75p. The share options are exercisable by 8
November 2029.
· Share options agreement dated 13 October 2023 - 3,000,000 share
options at an exercise price of 12.5p. The share options are exercisable by 12
October 2030.
Tom Evans
Share options issued and exercised during the year:
No share options were issued of exercised in the year.
Share options held at year end:
· Share options agreement dated 5 July 2022 - 2,000,000 share
options at an exercise price of 8.125p. The share options are exercisable by 4
July 2029.
Dr Steve Staley
Share options issued and exercised during the year:
No share options were issued of exercised in the year.
Share options held at year end:
· Share options agreement dated 27 October 2020 - 1,650,000 share
options at an exercise price of 5.0p. The share options are exercisable by 26
October 2027.
Moyra Scott
Share options issued during the year:
On 29 March 2023, the Company issued 3,000,000 share options at an exercise
price of 10.0p. The share options are exercisable immediately.
Share options held at year end:
· Share options agreement dated 29 March 2023 -3,000,000 share
options at an exercise price of 10.0p. The share options are exercisable
immediately.
The Board is not planning to consider any other components of director
remuneration during the year under review.
The Black Scholes model has been used to fair value the options, the inputs
into the model were as follows:
Grant date 29 March 23 12 May 23
Share price £0.0720 £0.0660
Exercise price £0.0100 £0.0800
Term 6 months immediate
Expected volatility 148.21% 150%
Expected dividend yield 0% 0%
Risk free rate 3.45% 3.59%
Fair value per option £0.0224 £0.0000
Total fair value of the options £67,076 £0
Grant date (continued) 12 May 23 13 October 23
Share price £0.0660 £0.1100
Exercise price £0.1000 £0.1250
Term immediate 6 months
Expected volatility 148% 128%
Expected dividend yield 0% 0%
Risk free rate 3.59% 4.56%
Fair value per option £0.0000 £0.0035
Total fair value of the options £0 £208,658
The total share option reserve expense in respect of 2023 is £1,540,481
(2022: 1,234,880).
Warrants
During the year, the Company has granted the below warrants to Novum
Securities Limited ("Novum"):
• On 16 March 2023, 2,181,818 warrants were issued exercisable at 5.50p,
which were based on 6% of the total share placing of 36,363,636 shares. The
Warrants have an expiry date of 16 March 2026.
• On 11 May 2023, 1,780,412 warrants were issued exercisable at 5.7p, which
were based on 7% of the total share placing of 25,434,459 shares. The Warrants
have an expiry date of 11 May 2026.
• On 28 June 2023, 1,080,000 warrants were issued exercisable at 10.5p,
which were based on 6% of the total share placing of 18,000,000.
• On 1 August 2023, 2,863,636 warrants were issued exercisable at 11.0p,
which were based on 6% of the total share placing of 47,727,267.
During the year, the Company has granted the below warrants to Foxie-Davies
Capital Limited ("Foxie"):
• On 1 August 2023, 5,454,545 warrants were issued exercisable at 11.0p,
which were based on 11% of the total share placing of 47,727,267.
The total warrant agreements for the aforesaid 13,360,411 warrants issued
during the year ended 31 December 2023 do not contain vesting conditions and
therefore the full share-based payment charge, being the fair value of the
warrants using the Black-Scholes model, has been recorded immediately.
As at the year ended 31 December 2023, the total number of warrants in issue
are:
Number of warrants Exercise price £
Party Issue date Expiry date
Novum Securities Limited 12/03/2021 12/03/2025 1,020,000 0.105
Novum Securities Limited 18/06/2021 12/03/2025 600,000 0.150
Novum Securities Limited 28/03/2022 01/04/2025 690,000 0.090
Novum Securities Limited 23/08/2022 23/08/2025 1,800,000 0.055
Novum Securities Limited 23/11/2022 23/11/2025 1,099,768 0.080
Novum Securities Limited 16/03/2023 16/03/2026 2,181,818 0.055
Novum Securities Limited 11/05/2023 11/05/2026 1,780,412 0.057
Novum Securities Limited 28/06/2023 28/06/2026 1,080,000 0.105
Novum Securities Limited 01/08/2023 01/08/2026 2,863,636 0.110
Foxie-Davies Capital Limited 01/08/2023 01/08/2026 5,454,545 0.110
The valuation of these warrants involves making a number of estimates relating
to price volatility, future dividend yields and continuous growth rates.
The Black Scholes model has been used to fair value the options, the inputs
into the model were as follows:
Grant date 16 March 11 May 28 June
Share price £0.0750 £0.0680 £0.1100
Exercise price £0.0550 £0.0570 £0.1050
Term 3 years 3 years 3 years
Expected volatility 128% 128% 128%
Expected dividend yield 0% 0% 0%
Risk free rate 3.44% 3.66% 4.93%
Fair value per warrants £0.059 £0.052 £0.083
Total fair value of the warrants £128,727 £92,581 £89,640
Grant date 01 August 01 August
Share price £0.1300 £0.1300
Exercise price £0.1100 £0.1100
Term 3 years 5 years
Expected volatility 128% 128%
Expected dividend yield 0% 0%
Risk free rate 4.78% 4.78%
Fair value per warrants £0.100 £0.114
Total fair value of the warrants £286,364 £621,818
The weighted average exercise price of the warrants at the year end is £0.09
(2022: £0.08). The weighted average life of the warrants at the year end is
2.2 years (2022: 1.4 years).
20. Reserves
Details of the nature and purpose of each reserve within owners' equity are
provided below:
• Share capital represents the nominal value each of the shares in issue.
• Share Based Payments Reserve are included in the Consolidated Statement of
Changes in Equity and in the Consolidated Statement of Financial Position and
represent the accumulated balance of share benefit charges recognised in
respect of share options and warrants granted by the Company, less transfers
to retained losses in respect of options exercised or lapsed.
• Warrants Issuance Cost Reserve are included in the Consolidated Statement
of Changes in Equity and in the Consolidated Statement of Financial Position
and represent the accumulated balance of charges recognised in respect of
warrants granted by the Company less transfers to retained losses in respect
of options exercised or lapsed.
• The Retained Deficit Reserve represents the cumulative net gains and
losses recognised in the Group's statement of comprehensive income.
• The Reconstruction Reserve arose through the acquisition of Predator Oil
& Gas Ventures Limited. This entity was under common control and therefore
merger accounting was adopted.
21. Related party transactions
Directors and key management emoluments are disclosed note 7 and 19 and in the
Directors' remuneration report on pages 77 to 83.
In addition to the Directors and key management emoluments, the Executive
Directors had various transactions that are disclosed in note 15. The
Directors loans were fully paid in 2023 (2022: £512,931). As at 31 December
2023, the following amounts were due by the Company to the Executive
Directors, see below and note 15 (i):
· Lonny Baumgarnder - £308,813
· Paul Griffiths - £448,785
During the year, the Company incurred costs of EUR63,000 (£54,856) (2022: EUR
52,500) relating to capitalised operations and logistic costs in Morocco, of
which nil (2022: EUR10,500) remains outstanding at the year end. These costs
are payable to Earthware Energy Inc a company owned by/related to Karima Absa,
the wife of Lonny Baumgardner.
As at year end, the balance owed to Directors for their services are as
follows:
· Paul Griffiths - £21,068
· Lonny Baumgardner - £12,661
· Alistair Jury - £2,043
· Carl Kindinger - £2,833
22. Contingent liabilities and capital commitments
The Group had at the reporting date no capital commitments or contingent
liabilities.
23. Litigation
As at 31 December 2023, the Group is not currently involved in any litigation.
24. Events after the reporting date
12 January 2024
The Company announced that further to the announcement of 7 November 2023 in
respect of the acquisition of T-Rex Resources (Trinidad) Limited ("T-Rex"),
the Company was publishing an Independent Technical Report ("ITR") by Scorpion
Geoscience Ltd. for the Cory Moruga block and resource potential of the
Snowcap Discovery.
A preliminary Base Case 15-year production profile was compared with that for
the adjoining former BP and Shell Moruga West field and uses only the P90 oil
resources (9.13 million barrels of oil recoverable) contained in the ITR. It
assumes 14 new production wells and a peak scoping gross production rate of
3,500 bopd are assumed.
Project economics indicate at WTI US$76/barrel spot price the gross
undiscounted operating profit based on the proposed FDP is US$202.12 million.
NPV @10% is US$ 85.14 million and IRR is 240.9%. Undiscounted net-back is
US$19.61 per barrel of oil.
The Company also announced an update on the rigless testing programme for the
Guercif Licence. Phase 1 rigless testing using conventional perforating guns
would test four zones in MOU- 1 and MOU-3. Phase 2 rigless testing using
Sandjet perforating technology would test multiple zones in MOU-1, MOU-2 and
MOU-3.
26 January 2024
The Company announced that it had published an Independent Technical Report
("ITR") by Scorpion Geoscience Ltd. for the Guercif block and resource
potential of the Moulouya Sub-Area following an evaluation of the 2023
drilling programme results.
The possible range of 2C and 3C recoverable resources allowed for a scoping
CNG gas profile of 20 mm cf/day to be maintained for 6 years to recover a
gross volume of 43.8 BCF based on a minimum of 4 production wells.
Based on this profile the ITR gave, using a flat industrial gas market price
of US$12 per mcf, an unrisked scoping NPV@10% of US$108 million and an IRR of
138% with undiscounted positive cash revenues of US$ 207.504 million for the
net Predator economic interest, equivalent to an unrisked and undiscounted
US$6.345 million per BCF of CNG production.
The Company also announced that it had received since its last operations
update a communication from the GeoScience Regulation Office ("GSRO") at the
Department of the Environment, Climate and Communications informing the
Company that consideration of its application for a successor authorisation to
Licensing Option 16/26 Corrib South is hoped to be concluded during Q1 2024
and that the GSRO would be writing to the Company shortly in relation to this
matter.
26 January 2024
The Company announced that the commencement of the rigless testing programmes
was expected to occur on or about 29 January 2024.
The testing programme was forecast to last for up to 14 days.
5 February 2024
The Company announced that it had signed an extension to the Company's 2022
rig contract for the use of the Star Valley Rig 101.
The extension will facilitate, subject to regulatory approvals and consent,
the drilling of the MOU-5 well to evaluate the 177km² Jurassic structural
closure.
MOU-5 is expected to be drilled between 1 April to 31 May 2024.
The Company is fully funded to drill MOU-5 using currently uncommitted,
discretionary, cash on the Company's balance sheet.
20 February 2024
The Company announced the results of the Phase 1 rigless testing programme,
using conventional but under-sized perforating guns that were the only option
at the time, which was designed to confirm the extent and minimum depth of
potential formation damage,
The information was critical for designing the Phase 2 Sandjet programme,
including perforating parameters, and for evaluating additional potential
reservoir intervals interpreted by NuTech but where conventional wireline logs
were potentially impacted by deep invasion of drilling mud into these
intervals.
It was recognised that the perforating guns were likely to be under-sized but
a third-party analysis indicated a maximum 12" penetration into the reservoir
formation versus their interpreted zone of formation damage for the TGB-2 Sand
in MOU-1 of 8".
All four zones in MOU-1 and MOU-3 to be tested were perforated and operations
were completed on 19 February 2024. For all four zones tested the under-sized
111/16" perforating guns failed to penetrate beyond the zone of formation
damage caused by the necessity to use heavy drilling muds whilst drilling.
Seven gas samples collected in isotubes in MOU-3 whilst drilling at measured
depths of 446, 508, 555, 750, 817, 846 and 1395 metres Measured Depth were
analysed by Applied Petroleum Technology (UK) Ltd. ("APT") in Oslo. Gas
composition is in the range 98.04 to 99.57% methane, making it ideal for a
Compressed Natural Gas development with minimum processing. Isotope analysis
indicates the gas is biogenic in origin.
The results of the Phase 1 rigless testing programme allows the design
parameters for the Sandjet testing programme to be set with a higher degree of
confidence in relation to achieving key objectives as follows:
· to penetrate sufficiently beyond the formation damage: and
· to perforate multiple potential reservoir zones recognised by
NuTech but for which conventional wireline logs may be adversely impacted by
invasion of drilling mud.
The Sandjet rigless well testing programmes for MOU-1, MOU-3 and MOU-4 will be
finalised and thereafter Sandjet will be mobilised to carry out the testing
operations.
The Company also announced that it would continue to progress planning
activities for the drilling of the MOU-5 well to test a large Jurassic
structure updip from MOU-4.
25.Ultimate controlling party
In the opinion of the Directors there is no ultimate controlling party as no
one individual is deemed to satisfy this definition.
Corporate information
Directors
Paul Stanard Griffiths (Executive Director - Chairman)
Lonny Baumgardner (Managing Director)
Alistair Jury (appointed 12 May 2022)
Carl Kindinger (appointed 24 October 2022)
Company
Secretary
Oak Secretaries (Jersey) Limited
3rd Floor, IFC5
Castle Street
St. Helier
Jersey JE2 3BY
Registered
Office
3rd Floor, IFC5
Castle Street
St. Helier
Jersey JE2 3BY
Telephone+44 (0) 1534
834 600
Joint Broker and Placing
Agent
Novum Securities Limited
2(nd) Floor
7-10 Chandos Street
London W1G 9DQ
Joint Broker and Placing
Agent
Optiva Securities Limited terminated - 6(th) July 2023
118 Piccadilly
London W1J 7NW
Joint Broker and Placing
Agent
Oak Securities
90 Jermyn Street
LONDON SW1Y 6JD
Corporate
Advisor
Fox Davies Capital Limited
5 Technology Park
Colindeep Lane
LONDON NW9 6BX
Auditors
PKF Littlejohn LLP
15 Westferry Circus Canary Wharf
London E14 4HD
Legal advisers to the Group as to English law
Charles Russell Speechlys LLP
5 Fleet Place
London EC4M 7RD
Legal advisers to the Group as to Jersey law
Pinel Advocates
One Liberty Place St. Helier
Jersey JE2 3NY
Competent
Person
SLR Consulting (Ireland) Ltd
7 Dundrum Business Park
Windy Arbour
Dublin 14, D14 N2Y7
Republic of Ireland
Scorpion Geoscience Limited
Oakmoore Court
Kingswood Road
Hampton Lovett
Droitwich, Worcestershire
WR9 0QH
Registrar
Computershare Investor Services (Jersey) Limited
Queensway House
13 Castle Street
St. Helier
Jersey JE1 1ES
Financial
PR
Flagstaff Strategic and Investor Communications
1 King Street
London EC2V 8AU
Principal
Bankers
Barclays Bank
Plc
13 Library Place
St. Helier
Jersey
JE4 8NE
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