Predator Oil & Gas Holdings Plc

("Predator" or the "Company" and together with its subsidiaries "the Group")

Report and Interim Financial Statements for the 6 months to 30 June 2021

Financial highlights: 

·           Loss from operations for the 6 months period is £929,089 (2020: full year Loss of £1,689,521).

·           Cash balance, at period end of £2,258,567 (2020 year end: £1,325,751).

·           A further £1,083,298 (US$1,500,000) held as restricted cash and £487,477 by way of a loan to FRAM Exploration Trinidad Ltd. for the investment in the Pilot CO2 EOR Project.

·           Fully-funded for Morocco drilling programme and Pilot CO2 EOR Trinidad.

·           £3,285,000 (before expenses) raised through two over-subscribed Placings.

·           1,020,000 warrants issued exercisable at £0.105 before 12 March 2025.

·           600,000 warrants issued exercisable at £0.157 before 18 June 2025.

·           No debt

Operational highlights:

·          MOU-1, first exploration well for 35 years in Guercif Basin, Morocco commences on schedule.

·          Initial drilling confirms extension of gas-producing Rharb Basin into Guercif Basin.

·          Significant gas readings encountered whilst drilling.

·           Phase 3 of Trinidad Pilot CO2 EOR Project commenced and 469 metric tonnes of anthropogenic CO2 injected.

·          Changes in CO2 injection parameters result in an accelerated reservoir pressure increase of up

    to 4 months ahead of pre-injection forecasts.

·          Exclusivity over surplus liquid CO2 supply extended until 2023.

·          Submission made to Cork County Council Development Plan to highlight role of the Mag Mell

            FRSU Project in the context of security and diversification of Ireland's energy supply.

           Post reporting date:

·         MOU-1 completed for subsequent rigless testing.

·         Six zones selected for perforating within the pre-drill seismic amplitude "bright spot"

·         Re-correlation of the interval to be perforated supports MOU-1 having tested the western edge

           of the MOU-4 Prospect (CPR (2020) gross Best Estimate resources of 393 BCF). 

·         Environmental Impact Assessment commenced for step-out wells to MOU-1 within the MOU-4

   Prospect.

·         Compressed Natural Gas development option independently costed for profile of 10 mm cfgpd.

·         Operator of the Inniss-Trinity Incremental Production Services Contract unilaterally elects to

   shut down the CO2 EOR Pilot Project.

·         Predator Oil & Gas Trinidad Ltd. considering its next steps under the terms of the Inniss-Trinity

   Well Participation Agreement.

·       £1,300,000 (before expenses) raised through an over-subscribed Placing.

·         Lonny Baumgardner appointed as Chief Operating Officer and Ronald Pilbeam steps down from

   the Board.

Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas Company ("Predator" or "the Company") with operations in Morocco, Trinidad and Ireland focussed on gas as a sustainable lower carbon fuel for the Energy Transition, is pleased to announce its unaudited interim results for the six-month period ended 30 June 2021.

Chief Executive Officer's Report

Dear Shareholder,

The first six months of 2021 has been a busy period for the Company, thus far focussed on operations in Morocco and Trinidad. Despite the ongoing challenges created by the COVID pandemic we have successfully and safely executed the drilling of our first well as an approved operator. This is a significant milestone for the Company. The focus on gas exploration and appraisal drilling is consistent with the requirements of the Energy Transition whereby the reliance on carbon-intensive imported fuels (mainly coal and oil) can be reduced whilst maintaining economic growth on emergence from the COVID pandemic. The Company's drilling programme has paved the way to the opening up and de-risking of a new gas basin in northern Morocco with significant "running room" to add material gas resources. The industrial sector in Morocco is starved of indigenous gas resources and heavily reliant on imported fuel oil. The Company's development strategy is focussed on compressed natural gas ("CNG") distribution to industries isolated from gas pipeline infrastructure. This is attractive to potential end users and the Company has initiated discussions with several parties regarding aligning interests and commercial goals through joint venture participation at project level.

In Trinidad we commenced Phase 3 of the Inniss-Trinity Pilot Enhanced Oil Recovery using injected anthropogenic carbon dioxide ("Pilot CO2 EOR"). During the period under review the Government of Trinidad and Tobago established a Carbon Capture and Carbon Dioxide Enhanced Oil Recovery ("CO2 EOR") Steering Committee to give recognition to the vital role CO2 EOR could play in response to the need for emission mitigation and carbon management and Carbon Capture and Storage in the context of the Paris Agreement. This important and timely initiative has ensured that the Company, being the only CO2 EOR operator in Trinidad and with exclusivity over Trinidad's surplus liquid CO2 supply, is well-positioned to offer its technology and operations experience as a valuable catalyst to co-venture with other operators of producing oil fields onshore Trinidad and to help develop the Government's strategic carbon capture plans. Financing of the CO2 EOR services offered by the Company must be borne by those producers wishing to avail themselves of such services to further the development and retention of their assets mainly held under Incremental Production Service Contracts. Implementing CO2 EOR plans are crucial if inward investment in the energy sector in Trinidad is to be secured on the basis of compatibility with the demands to address the level of global CO2 emissions.

In Ireland the Company submitted its Floating Storage and Regasification Unit ("FSRU") LNG import solution ("Mag Mell") to the Draft Cork County Development Plan 2021 for public consultation.  In addition, the Company also made a submission to the Department of Housing, Local Government and Heritage in respect of the Public Consultation on the Marine Protected Area ("MPA") Advisory Group's Report entitled "Expanding Ireland's Marine Protected Area Network." Both submissions focussed on Mag Mell's ability to address, at the earliest opportunity, Ireland's security and diversity of energy supply, particularly in relation to gas. The Company could never have foreseen how timely these submissions turned out to be in hindsight, as post the end of the period under review an "Energy Crisis" developed on a pan-European scale which saw supply constraints and unprecedented rises in wholesale gas prices.

It was emphasised in the submissions for the public consultations that Mag Mell offered one of the most attractive options to address security and diversity of energy supply, as the proposed technical solution utilised existing gas pipelines and required no new fixed infrastructure to be constructed, unlike other options, including those for renewable energy. Furthermore, the Mag Mell project could be advanced far more quickly than any other competing project.

Similar to Morocco, the developing "Energy Crisis" has forced end users of energy in Ireland to re-consider their options for securing access to different forms of indigenous energy to potentially create an economic buffer against times of volatility in the global energy markets and rising energy prices. The Company has maintained its position in relation to significant gas assets offshore Ireland and management has a deep understanding, based on experience, of the gas sector in Ireland. This creates an opportunity to develop commercial collaborations with downstream entities seeking to navigate themselves through the "Energy Crisis" and the Energy Transition.

Post period

The most significant event following the reporting period to 30 June 2021 was the completion of the MOU-1 well for perforating and rigless testing. The core focus of the Company has been re-aligned to prioritising step-out drilling from MOU-1 to appraise and develop the MOU-4 Prospect for a CNG development. With this strategy in mind Lonny Baumgardner, former Country Manager and Managing Director of SDX Energy Plc in Morocco, was appointed to the Board as Chief Operating Officer with Ronald Pilbeam stepping down. The developing "Energy Crisis" and a slow realisation of the requirement for gas for decades to come to support the Energy Transition, further underpins the Company's original decision in 2019 to enter Morocco to seek to find and develop gas resources.

Operational overview

Morocco

Despite COVID restrictions, the MOU-1 well commenced drilling on schedule at 01:00 hours on Sunday 20th June 2021.

The well was forecast to take up to 20 days to drill and to run wireline logs.

At the end of the period under review the well had reached its 95/8" casing point at 729 metres TVD KB.

Significant dry gas readings were encountered in the shallow section including formation gas shows, in line with drilling experiences in the gas-producing Rharb Basin to the west.

Initial drilling results in the shallow section confirmed the gas-generating potential of this area of the Guercif Basin, which had only before been tested by one well in 1972, long before the gas potential of the Rharb Basin was understood and realised.

During the period under review SLR Consulting (Ireland) Ltd completed an independent study for the Company of scoping capital and operating costs for a CNG development option utilising potential gas produced at Guercif. The model assumed a scoping gas delivery profile of 10 mm cfgpd (3.65 BCF of gas annually) trucked to industrial customers and to the end of existing gas pipelines in the Rharb Basin. The preferred site of a CNG facility at the MOU-4 Prospect location is only 1.5 kilometres from the highway running westwards and connecting with Morocco's most significant industrial centres. Trucks would run on CNG rather than diesel fuel. Start-up CNG costs net to the Company (75%) facilities CAPEX estimates are US$12.21 million and net (75%) CNG operating costs are estimated at US$2.09/mcf. Costs exclude drilling costs and potential requirement for booster compression later in field life. At an average gas sales price of US$11/mcf to the Moroccan industrial market the commercial model for CNG gas sales is attractive.

As a consequence of the COVID pandemic the original term of the Initial Period of the Guercif Petroleum Agreement has been extended by one year to 18 September 2022.

Trinidad

Phase 3 of the of the Inniss-Trinity Pilot CO2 EOR project commenced in the period under review. The planned operations were in accordance with the Company's Project Proposal PRD25092019 submitted by the Operator (FRAM Exploration Trinidad Ltd. or "FRAM") of the Inniss-Trinity Incremental Production Services Contract, or "IPSC", as a consequence of which Heritage Petroleum Trinidad Ltd., the licence holder, granted FRAM a two-year extension to the IPSC and the Ministry of Energy and Energy Industries approved the commissioning of the CO2 EOR facilities at Inniss-Trinity.

It was planned for CO2 to be injected into the AT-13 well continuously over a period of up to 275 days during which production time rates would be recorded at AT-5X.

It became apparent very quickly that the AT-13 well was not suitable for CO2 injection at higher pressures and regulatory approval was sought and subsequently granted for CO2 injection to return to the original 2020 CO2 injector well AT-5X. AT-12, defined in the submitted Proposal PRD25092019 as a production well and included in the AT-4 Block Pilot CO2 EOR Project, remained available for continuous production. It was determined that additional wells within the AT-4 Block would be surveyed and investigated for potential workovers and the return to production. AT-6, AT-7 and AT-10 were considered for the restoration of production and IN-6 was considered as a candidate for perforating in the unperforated Herrera #2 Sand. Workover well costs were generated and approved internally.

From April 2021 469 metric tonnes of CO2 were injected through AT-5X. Operations were limited to daylight hours due to best practice HSE restrictions for handling CO2 at a time of COVID restrictions.

Curtailing injected daily CO2 volumes and restricting injection pressures had a beneficial effect on the rate of reservoir pressure build-up whilst establishing a preferred orientation and pattern for accelerated CO2 migration routes. Of five wells where pressure data could be interpreted, two were broadly in line with pre-injection forecasts whereas three showed accelerated reservoir pressure build-up relative to the pre-injection estimates. In the most notable case one well reached a static bottom hole pressure of 1,089 psi on 9 June 2021, whereas the pre-injection forecast estimated that this pressure was only to be achieved over four months later.

The encouraging results provide valuable information for the design and resulting effectiveness of CO2 EOR projects for the Herrera reservoir sands.

The implementation of CO2 EOR technology, the operational experience and the significant empirical database, combined with exclusivity over Trinidad's surplus liquid CO2 supply until at least 2023, has placed the Company in a unique position to offer CO2 EOR collaboration agreements to operators of mature producing fields onshore Trinidad.

The establishment of the CO2 EOR Steering Committee by the Government of Trinidad and Tobago during the reporting period has been the commercial catalyst for the Company to engage with local operators regarding CO2 EOR technology and services that the Company can provide to align operators with the strategically important Government initiative.  

Ireland

During the period under review the Company changed the name of its subsidiary Predator LNG Ireland Ltd. to Mag Mell Energy Ireland Ltd., a name from Irish mythology that reflects the ethos behind the move to offshore LNG facilities below the horizon that can contribute with very much reduced environmental impact to security of energy supply during the Energy Transition.

In June a submission was made to the Draft Cork County Council Development Plan detailing the Mag Mell FSRU LNG Project and the potential benefits for the industries and communities of Cork, which historically has been the hub of Irish indigenous gas production. The vital role this project could have in addressing security of energy supply during the Energy Transition was also outlined in the Company's published document for the purpose of facilitating informed public consultation.

At the same time the Company made a submission to the Department of Housing, Local Government and Heritage in respect of the Public Consultation on the Marine Protected Area ("MPA") Advisory Group's Report entitled "Expanding Ireland's Marine Protected Area Network."

The steps taken are to ensure that the Mag Mell FSRU LNG Project was fully in the public domain ahead of a planned meeting later in the year of the Oireachtas Committee on the Environment to examine energy security, LNG and power usage by data centres.

Partnership building has been a key objective of the Company. The establishment of a FSRU technical and commercial solution specific to the environment and conditions of the Celtic Sea offshore Ireland is a significant tool to use to meet conditions for regulatory approvals and to develop partnerships to attract project finance to allow a Financial Investment Decision to be made. This is a long process, but the "Energy Crisis" post the reporting period has potentially provided a greater sense of urgency to address volatile energy markets during the Energy Transition.

The Company remains at the disposal of the regulatory authorities to accelerate the potential award of successor authorisations for the Corrib South and Ram Head projects. Both these projects are potentially valuable assets for indigenous gas production and gas storage that could assist an orderly progress through the Energy Transition.

Financial review

The Company reported an operating loss for the period to 30 June 2021 £929,089 (£784,156 for the period to 30 June 2020). The increase in operating loss is attributable to an increase in administrative costs for the period to 30 June 2021 which were £929,070 (£572,247 for the period to 30 June 2020) and which principally reflected adverse foreign exchange movements and increased directors', management and technical consultancy fees associated with the planning and execution of the Guercif drilling programme.  

Administrative expenses for the period to 30 June 2021 also included £257,691 (£147,181 for the period to 30 June 2020) fair value adjustment to warrants and share options.

The Company is finishing the reporting period with cash reserves of £2,258,567 (£2,098,177 for the period to 30 June 2020) and restricted cash of £1,083,298 (£1,221,200 for the period ended 30 June 2020) in the form of the security deposit for the Guercif Bank Guarantee in favour of ONHYM. The balance outstanding of the loan by the Company to FRAM for the investment in the Pilot CO2 EOR Project was £487,477 (£396,136 for the period to 30 June 2020) at the end of the period to 30 June 2021.

During the period to 30 June 2021, we have completed two over-subscribed Placings to raise £3,285,000 (before expenses). As a result of these transactions 27,000,000 new shares have been issued and the issued share capital increased to 266,946,267 by the end of the period to 30 June 2021. This figure included the exercise of 267,750 existing warrants at £0.028. 1,020,00 new warrants exercisable at £0.105 before 12 March 2025 and 600,000 new warrants exercisable at £0.157 before 18 June 2025 were issued.

2,000,000 existing warrants exercisable at £0.12 had their original expiry date of 15 February 2021 extended to 15 February 2022. 2,053,678 existing warrants exercisable at £0.028 had their original expiry date of 24 May 2021 extended to 24 May 2022. The one-year extensions requested by the warrant holders to reflect the fact that drilling operations were delayed by one year due to the COVID pandemic were approved by the Board. By extending the warrants expiry date, the Group had to assess the impact of the extensions on the warrant's initial fair value assumptions. An expense of £24,366 has been recognised in respect of the fair value of the warrants as detailed in note 12.

Placing funds were to provide the working capital to fully fund the Company's planned operations in Morocco and Trinidad following the delays caused by the COVID pandemic.

As a result of the transactions successfully concluded during the period under review, the Company is well-capitalised, free of debt and is in a position to deploy prudent levels of administrative expenditure focussed on enhancing and promoting the potential of the Company's portfolio in order to attract potential partners to share in the costs of further developing its assets to realise shareholder value.

COVID pandemic

The Company took all commensurate steps during the period under review to minimise unnecessary capital expenditures and operating costs whilst COVID restrictions continue to impact the industry's business operations worldwide. Despite ongoing international travel restrictions that imposed a more complex logistical challenge to moving essential personnel across international borders, the Company successfully managed the planning and execution of its first well as operator.

Maintaining adequate cash reserves and delivering a high impact drilling programme in Morocco focussed on the opportunity to supply gas to the Moroccan industrial market is a prudent risk-reward proposition for our shareholders. Continuing with demonstrating the capability of delivering CO2 sequestration using CO2 EOR technology in Trinidad is an important contribution to helping to reduce CO2 emissions during the Energy Transition. These Company objectives have been sustained during the COVID pandemic and are allowing the Company to demonstrate to potential partners its ability to perform and create exciting business development opportunities compatible with the requirements for an effective Energy Transition.

Summary

During the period under review, the Company has successfully overcome challenges posed by COVID to achieve key operational objectives within our strict budget guidelines.

De-risking the gas potential of the Guercif Basin after 35 years without drilling activity, has set up a timely opportunity to appraise, develop and deliver gas to the Moroccan gas market on very favourable commercial terms and with manageable capital requirements for a Company with our current market capitalisation. Partnering with downstream off-takers of gas is a sensible solution to reducing our financial requirements for developing our CNG business model. This is the overriding objective of the Company in 2022.

In Trinidad we are firmly established as the country's only CO2 EOR services provider following the technical and operational success of the Inniss-Trinity pilot CO2 EOR project and the important lessons that have been learnt. The establishment by the Government of Trinidad and Tobago of the Steering Committee for Carbon Capture and CO2 EOR supports our efforts to partner with indigenous, well-financed, onshore producers to provide ESG support and credentials through CO2 sequestration and to provide secondary recovery technology, expertise and experience to increase profits from mature fields. Our services will need to be funded by the producers with profit sharing thereafter to be negotiated.

In Ireland we have an environmentally aware technical and commercial solution to Ireland's lack of security and diversity of gas supply. We are making excellent progress with regard to the hugely important public consultation process. Regulators are aware of what the Mag Mell FSRU project has to offer Ireland. Sentiment is being forced to adapt to the realities of the Energy Transition and the volatility in energy markets. Post the period under review the Oireachtas Committee on the Environment met to examine energy security, LNG and power usage by data centres. The requirement for gas in Ireland is a necessity for years to come and the Company is well-positioned to seek partnerships with indigenous companies in the Irish energy sector where our assets, expertise and specific Irish offshore experience can be traded for a strong balance sheet that allows us to close out opportunities with multi-nationals to develop our niche position in Ireland. This position has been nurtured through unfashionable times to a point where the "Energy Crisis" makes gas fashionable again.

During the period under review we have taken the opportunity, when possible and advisable to do so, to raise funds in the public markets. This is necessary for us to maintain our projects in good standing and to strengthen our hand in commercial negotiations with much larger potential partners. Our management is under-valued in the public markets based on what it has achieved with limited financial resources. We have three exciting projects on three continents, managed by a small team of experienced professionals. Post period, on 17 September 2021 the Company was trading at a 77.08% premium to its original IPO share price despite COVID, Brexit, financial market volatility and after investing in value-creating projects and operations.

On behalf of the Board, I would like to thank our shareholders for their patience and continued support of the Company through what has been a unique period dominated by COVID and now the emerging "Energy Crisis". We look forward over the next 12 months to continue to make positive progress in further developing the Company's assets.

Paul Griffiths

Chief Executive Officer

28 October, 2021

Paul Griffiths, Chief Executive of Predator, commented:

"Despite the recent "demonisation" of certain parts of the upstream and downstream Energy Sector, gas has a vital role to play in ensuring a stable Energy Transition and reducing the volatility in the energy markets that is leading to unprecedented spikes in the cost of energy for consumers. We are focussed on developing our gas asset in Morocco as a replacement for carbon-intensive imported fuel oil and coal. In Ireland gas is important for restoring confidence in securing gas supplies that do not ultimately become wholly dependent on the Interconnector with the UK. In Trinidad we retain the ability to offer commercial CO2 sequestration which at present cannot be offered by renewable energy. Pragmatism is therefore required during the Energy Transition and integrated practical solutions to achieve the common goal of reducing CO2 emissions. This has been a busy year so far for us in developing these goals whilst maintaining a commercial perspective and we look forward to further progress over the next 12 months".

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: 

Enquiries:

Notes to Editors:

Predator is operator of the Guercif Petroleum Agreement onshore Morocco which is prospective for Tertiary gas in prospects less than 10 kilometres from the Maghreb gas pipeline.  The MOU-1 well has been completed and a follow-up drilling programme is under review.

Predator is an oil and gas exploration company participating with FRAM in further developing the remaining oil reserves and sequestrating anthropogenic carbon dioxide in the producing Inniss Trinity oil field onshore Trinidad, primarily through the application of CO2 EOR technology. Potential for cash flow exists by pursuing Enhanced Oil Recovery using locally sourced liquid carbon dioxide for injection into and storage within the oil reservoirs. Near-term expansion and production growth potential is focussed on upscaling the CO2 EOR operations in the Inniss-Trinity oil field, subject to all necessary approvals. 

In addition, Predator also owns and operates exploration and appraisal assets in licensing options offshore Ireland, for which Successor Authorisations have been applied for. These are adjoining Vermilion's Corrib gas field in the Slyne Basin on the Atlantic Margin and east of the Kinsale gas field and Barryroe oil field in the Celtic Sea.

The Company has a highly experienced management team with a proven track record in the oil and gas industry.

The interim management report and interim results are set out in the following pages.

The Directors present their report and the unaudited consolidated financial statements together with related notes, of Predator Oil & Gas Holdings Plc and its subsidiaries ("the Group") for the six months ended 30 June 2021. The statements have been prepared in accordance with IAS 34 Interim Financial Reporting. They do not include all the information required for a complete set of IFRS financial statements. However, selected explanatory notes are included to explain events and transactions that are significant to an understanding of the changes in the Group's financial position and performance since the last annual consolidated financial statements as at the year ended 31 December 2020.  The results for the period ended 30 June 2021 are unaudited. These statements are in agreement with accounting records which have been properly kept in accordance with Article 103 of the Companies (Jersey) Law 1991.

Responsibility Statement

We confirm that to the best of our knowledge:

-       The Interim Report has been prepared in accordance with International Accounting Standards 34, Interim Financial Reporting, as adopted by the EU and applicable law

-       The condensed set of financial statements, which has been prepared in accordance with the applicable set of accounting standards, gives a true and fair view of the assets, liabilities, financial position and profit or loss of the issuer, or the undertakings included in the consolidation as a whole as required by DTR 4.2.10

-       The Interim Report includes a fair review of the information required by DTR 4.2.7R of the Disclosure and Transparency Rules, being an indication of important events that have occurred during the first six months of the financial year and their impact on the set of interim financial statements; and a description of the principal risks and uncertainties for the remaining six months of the year and

-       The Interim Report includes a fair review of the information required by DTR 4.2.8R of the Disclosure and Transparency Rules, being the information required on related party transactions.

The Interim Report was approved by the Board of Directors and the above responsibility statement was signed on its behalf by

Dr. Stephen Staley

Chairman

28 October 2021

COVID statement and global outlook

The six-month period ended 30 June 2021, has continued to be dominated by the COVID pandemic and the resulting impact on travel, restrictions on operations, commodity prices, financial markets, overall investment sentiment and, at the beginning of the period, the slowdown of the global economy. Businesses have learnt how to adapt to these prevailing circumstances in order to navigate through very challenging times.

At the end of the period under review, COVID restrictions are being relaxed and global economies are beginning to rebound rapidly. This in turn creates new challenges in the form of rising demand for services and equipment which is likely to lead to an increase in costs as the pool of services and equipment has contracted due to COVID. Supply chain delays for key well equipment are to be expected as manufacturing output was curtailed during COVID and surplus inventory used up. Maintenance of key equipment is likely to have been postponed and time will be required to make such equipment fully operational again.

Public awareness of climate change concerns and unsustainable accelerating levels of CO2 emissions is now fully developed. The fossil fuel industry has been the primary focus of attention during this time, given its high-profile current and historical contribution to generating CO2 emissions through use by, largely, third parties of its products. This has created a difficult environment for attracting equity and debt finance as banks and institutions react to pressure to disassociate themselves from fossil fuel investments. This has resulted in reduced investment in fossil fuel infrastructure, field development and exploration drilling (needed to replace declining reserves).

An inclusive and informed debate regarding the short-term future of the fossil fuel industry has not matured in the context of the Energy Transition.

As a result of all these factors and a surge in economic activity following the break-out from COVID restrictions, significant volatility in the energy markets (particularly in relation to gas) is now occurring. This is resulting in unsustainable increases in electricity and gas prices that threaten the economic welfare of consumers and the growth plans of industry alike. New unforeseen political alliances are being forged to guarantee security of gas supply. The inability to secure adequate gas resources is leading to an increased reliance on carbon-intensive fuels. Ireland, a pioneer of renewable energy, is a classic example of inverse logic. Ireland is now burning more imported coal than previously and as a result is increasing its CO2 emissions. Many countries, including China, are burning coal which has resulted in increased prices paid for coal whilst fuelling demand for this product. In hindsight therefore the blanket "demonisation" of the fossil fuel industry is now resulting in increased CO2 emissions in a number of countries, political instability and rising costs of living. This is counter to the longer term common, all-inclusive goal to reach a sustainable level of CO2 emissions.

The Energy Transition has a key role to play in navigating the way to lowering of CO2 emissions by gas replacing coal and oil. The wind does not always blow, the sun does not always shine and large amounts of electricity cannot yet be stored! It is therefore inevitable that gas will be required for years to come as a back-up energy supply when renewables cannot meet the demand. The fossil fuel industry produces gas. The fossil fuel industry has the knowledge and expertise to develop underground reservoirs for CO2 sequestration. Investment should be focussed on these aspects of the industry to address the "Energy Crisis" and the Energy Transition. Like the response to climate change, too little is being done too late to make a difference.

It is inevitable that our industry will contract unless informed pragmatic and practical action is taken. At Company level we are already, and have been for some time, implementing an Energy Transition strategy focussed on gas and CO2 sequestration. It allows us to work with energy users and producers to align our strategic and commercial objectives to grow organically our respective businesses to the mutual benefit of our different shareholders - until such time as financial institutions and governments realise that a commercially viable Energy Transition is the only way to meet the longer-term common goal of reducing CO2 emissions.