Basis of preparation

The financial statements have been prepared on the historical cost basis, except for the measurement of certain assets and financial instruments at fair value as described in the accounting policies below.

The financial statements have been prepared on a going concern basis, refer to the Going Concern section below for more details.

The financial statements are presented in United States dollars ($) and all values are rounded to the nearest thousand dollars ($'000) unless otherwise stated.

Basis of consolidation

The financial statements incorporate the results of the Company and its subsidiaries (the "Group") using the acquisition method. Control is achieved where the Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.

Inter-company transactions and balances between Group companies are eliminated in full.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used in line with those used by the Group.

The investment in associate (an entity over which the Group had significant influence) had been recorded at cost and had not been adjusted to reflect the Group's 25% share of the net profits/losses and assets/liabilities of the associate from the date of acquisition to the balance sheet date as it was deemed immaterial. Pursuant to commercial negotiations in relation to the associate during 2021, the Group relinquished its interest in the associate for nil consideration and does not hold any further interest in this associate at 30 June 2022 and at 31 December 2021.

Going Concern

These financial statements have been prepared by the Directors on a going concern basis, which assumes that the Group and Company will continue in operation for the foreseeable future.

At 30 June 2022, the Group and Company had $5.3 million and $4.2 million in unrestricted cash funding.

During the reporting period, the Group and Company completed a comprehensive restructuring and recapitalisation exercise which resulted in:

i)         the Group and Company raising approximately £7.3 million (or approximately $10 million) (before expenses) via the issue of new shares, to fund certain payments to creditors as part of the agreed discounted payment plan, as well as to fund a work programme for 2022;

ii)        a substantial reduction in balance sheet payables, debts and potential liability exposures, that would have reasonably required settlement in cash, from approximately $23.5 million as of 31 December 2021 to approximately $2.5 million, being the estimated liabilities amount that would be required for settlement in cash by the Group in the foreseeable future. The substantial majority of liability settlements took place during the reporting period; and

iii)       the Company reducing its net current liability position from approximately $10.1 million at 31 December 2021 to a net current asset position of approximately $4.1 million at 30 June 2022 as a result of the settlements made during the reporting period.

Following the restructuring and recapitalisation, the Directors have prepared a cash flow forecast which anticipates the Group and Company being able to continue in operation for at least the next twelve months from the date of this report. 

The cash flow forecast includes underlying assumptions and estimates, including oil price, sustained production from the Group's producing fields in Trinidad and Tobago along with certain incremental production from the intended work programme, reliability of reserves estimates and renewal of licences upon expiry.

In addition, the projections assume offsetting of certain tax liabilities and deferral of certain historical liabilities in Trinidad and Tobago that the Directors believe are either not likely to require settlement in cash or are capable of being deferred and settled on long-dated payment terms so as to not require material amounts of cash during the forecast period.

Certain of these items are outside of the Group and Company's control and unfavourable actual outcomes may materially and adversely affect the Group's cash resources and cast significant doubt on the Group and the Company's ability to continue as a going concern. In such an event, the Group and the Company may be required to implement certain other measures including, but not limited to,

i)       raising additional third-party capital in form of equity, debt or other instruments of a similar nature, and / or

ii)      undertake cost reduction, and / or

iii)     sell certain assets of the Group,

and a successful outcome of such measures cannot be guaranteed.

These financial statements do not include the adjustments that would result if the Group or the Company were unable to continue as a going concern.