20 June 2023

Petrel Resources plc

("Petrel" or "the Company")

Audited Results for the Year Ended 31^st December 2022

Petrel announces its results for the year ended 31^st December 2022.

A copy of the Company's Annual Report and Accounts for 2022 will be mailed shortly only to those shareholders who have elected to receive it and extracts are set out in the announcement below. Otherwise shareholders will be notified that the Annual Report will be available on the website at www.petrelresources.com.  Copies of the Annual Report will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland.

The Company's Annual General Meeting will be held on 27^th July 2023 in the Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, Dublin 1, D01 C3W7 at 12.00 pm.

ENDS

 For further information please visit http://www.petrelresources.com/  or contact:

Enquiries:

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). The person who arranged for the release of this announcement on behalf of the Company was Jim Finn, Director.

CHAIRMAN'S STATEMENT

Europe is de-industrialising, due to policies hostile to reliable fuels.  But global oil & gas demand continues to recover, as Asia and especially China recovers from C-19 policies, including lock-downs. 

The withdrawal of most major oil and gas players from non-core basins killed the farm-out market from 2014.  Majors who had entered projects in OPEC specific countries, often on uneconomic terms, now seek to exit marginally profitable or non-core projects as they buy shares back and issue record dividends instead of investing in exploration activities.

At the same time, there has been a shortage of institutional investor finance in London for several years now.  Funds are available, but mainly from private clients and traders who demand discounts.  In such circumstances, we have avoided issuing stock and incurring expensive work commitments which would only have diluted shareholders by issuing shares at too low a price.  It is wiser to keep our powder dry and prepare a portfolio of early-stage projects to fund or farm out when markets turn.

However, it is worth remembering that Europe is now less than 15% of global energy consumption.  BRICS+ now have a larger GDP than the G-7.  Europe is in decline, but Asia is not.  The future is in the emerging economies. Australian brokers and investors have profited through the liquidity of Petrel's sister company, Clontarf Energy plc. They are pressing Petrel Resources plc to open its books for greater Australian and Asian participation.  So far, the board has been keen to avoid dilution, but as we roll out high-potential new projects, it may be worthwhile to accept funding - hopefully at much higher share prices.

Petrel has assessed a number of expansion projects in recent months.  So far, none have completed necessary due diligence or in some cases demonstrated available funds on satisfactory terms.

Financing

The directors and their supporters have funded working capital needs during C-19, etc. and are prepared to participate in any necessary, future financing.

David Horgan

Chairman

19 June 2023

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2022

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2022

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2022

NOTES:

1.    ACCOUNTING POLICIES

There were no changes in accounting policies from those used to prepare the Group's Annual Report for financial year ended 31 December 2021.  The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and in accordance with the provisions of the Companies Act 2014.

2.    LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the year attributable to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year. Diluted loss per share is computed by dividing the loss after taxation for the year by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.

The following tables set out the computation for basic and diluted earnings per share (EPS):

3.    GOING CONCERN

The Group incurred a loss for the financial year of €310,813 (2021: loss of €322,077) and had net current liabilities of €689,811 (2021: €664,924) at the balance sheet date. These conditions as well as those noted below, represent a material uncertainty that may cast significant doubt on the Group and Company's ability to continue as a going concern.

Included in current liabilities is an amount of €857,531 (2021: €767,531) owed to key management personnel in respect of remuneration due at the balance sheet date. Key management have confirmed that they will not seek settlement of these amounts in cash for a period of at least one year after the date of approval of the financial statements or until the Group has generated sufficient funds from its operations after paying its third-party creditors.

The Group had a cash balance of €166,309 (2021: €101,843) at the balance sheet date. The directors have prepared cashflow projections for a period of at least twelve months from the date of approval of these financial statements which indicate that additional finance may be required to fund working capital requirements and develop existing projects. As the Group is not revenue or cash generating it relies on raising capital from the public market.

These conditions as well as those noted below, represent a material uncertainty that may cast significant doubt on the Group's ability to continue as a going concern.

As in previous years the Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements and believe the going concern basis is appropriate for these financial statements. The financial statements do not include the adjustments that would result if the Group was unable to continue as a going concern.

4.    INTANGIBLE ASSETS

Segmental analysis

Exploration and evaluation assets relate to expenditure incurred in exploration in Ghana. The directors are aware that by its nature there is an inherent uncertainty in exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalized exploration and evaluation assets.

During 2018 the Group resolved the outstanding issues with the Ghana National Petroleum Company (GNPC) regarding a contract for the development of the Tano 2A Block. The Group has signed a Petroleum Agreement in relation to the block and this agreement awaits ratification by the Ghanian government.

Relating to the remaining exploration and evaluation assets at the financial year end, the directors believe there were no facts or circumstances indicating that the carrying value of the intangible assets may exceed their recoverable amount and thus no impairment review was deemed necessary by the directors. The realisation of these intangible assets is dependent on the successful discovery and development of economic reserves and is subject to a number of significant potential risks, as set out below:

·    licence obligations;

·    exchange rate risks;

·    uncertainty over development and operational costs;

·    political and legal risks, including arrangements with Governments for licences, profit sharing and taxation;

·    foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

·    financial risk management; and

·    ability to raise finance.

Directors' remuneration of €Nil (2021: €Nil) and salaries of €Nil (2021: €Nil) were capitalised as exploration and evaluation expenditure during the financial year.

5.    OTHER PAYABLES

It is the Group's normal practice to agree terms of transactions, including payment terms, with suppliers. It is the Group's policy that payments are made between 30 - 45 days and suppliers are required to perform in accordance with the agreed terms. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

Key management personnel have confirmed that they will not seek settlement in cash of the amounts due to them in relation to remuneration for a period of at least one year after the date of approval of the financial statements or until the Group has generated sufficient funds from its operations after paying its third party creditors.

6.    SHARE CAPITAL

On 24 October 2022 a total of 20,833,333 shares were placed at a price of 1.2 pence per share. Proceeds were used to provide additional working capital and fund development costs.  For each share subscribed for, the investors also received one warrant to subscribe for an additional ordinary share at a price of 1.8p per share for a period of 2 years.

7.    SHARE BASED PAYMENTS

The Group issues equity-settled share-based payments to certain directors and individuals who have performed services for the Group. Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured by the use of a Black-Scholes valuation model.

Options

The Group plan provides for a grant price equal to the average quoted market price of the ordinary shares on the date of grant. The options vest immediately.

The options outstanding at 31 December 2022 have a weighted average remaining contractual life of 4 years.

Warrants

On 24 October 2022 a total of 20,833,333 warrants were issued at an exercise price of 1.8p per warrant as part of a placing. Further information is note 6 above.

8.    OTHER RESERVES

Capital redemption reserve

The Capital redemption reserve reflects nominal value of shares cancelled by the Company.

Capital conversion reserve fund

The ordinary shares of the company were renominalised from €0.0126774 each to €0.0125 each in 2001 and the amount by which the issued share capital of the company was reduced was transferred to the capital conversion reserve fund.

 Share Based Payment Reserve

The share-based payment reserve arises on the grant of share options under the share option plan. Share options expired are reallocated from the share-based payment reserve to retained deficit at their grant date fair value.

9.    RETAINED DEFICIT

Retained deficit

Retained deficit comprises of losses incurred in the current and prior years.

10.  POST BALANCE SHEET EVENTS

There were no material post balance sheet events affecting the Group.

11.  ANNUAL GENERAL MEETING

The Company's Annual General Meeting will be held on 27 July 2023 in the Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, Dublin 1, D01 C3W7 at 12.00 pm.

12.  GENERAL INFORMATION

The financial information prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS") as adopted by the European Union included in this preliminary statement does not constitute the statutory financial statements for the purposes of Chapter 4 of part 6 of the Companies Act 2014.  Full statutory statements for the year ended 31 December 2022 prepared in accordance with IFRS, upon which the auditors have given an unqualified report, have not yet been filed with the Registrar of Companies.  Full financial statements for the year ended 31 December 2021 prepared in accordance with IFRS and containing an unqualified report, have been filed with the Registrar of Companies.

A copy of the Company's Annual Report and Accounts for 2022 will be mailed shortly only to those shareholders who have elected to receive it. Otherwise shareholders will be notified that the Annual Report will be available on the website at www.petrelresources.com.  Copies of the Annual Report will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland.