FOR IMMEDIATE RELEASE

29 June 2022

 

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 2021

Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas Company with operations in Trinidad, Morocco and Ireland is pleased to announce its audited financial statements for the year ended 31 December 2021, 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.  In line with ESG best practice no hard copies of the Annual Report will be printed.

 

In addition, a copy of the 2021 Annual Report will be uploaded to the National Storage Mechanism and will be available for viewing at 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 2021.

 

Highlights of Financial Results for 2021

 

·      Reduced loss from operations of £1,398,821 (2020: Re-stated loss of £1,589,070).

 

·      Reduced administrative expenses of £1,398,802 (2020: Re-stated £1,363,711)

 

·      Increased cash balance at period end of 2021 £1,523,035 (2020: £1,325,751).

 

·      Additional, restricted cash of USD1,500,000 (USD1,500,000 for the period ended 31 December 2020).

 

·      Placed 53,000,000 new ordinary shares of no par value in the Company to raise £4,585,000 (before expenses).

 

·      Issued warrants to brokers to subscribe for 1,020,000 new shares exercisable at £0.105 before 12 March 2025 and 600,000 new shares exercisable at £0.150 before 18 June 2025

 

·      Debt-free and fully-funded for current commitments

 

Highlights of key Operational Activities in 2021

 

·      In Morocco MOU-1 was successfully drilled in 15.18 days on budget and within pre-drill budget guidance.

 

·      Pre-drill seismic amplitude "bright spot" and primary target validated by drilling results.

 

·      Formation gas shows whilst drilling and wireline NuTech log interpretation identified intervals within the primary target for rigless testing.

 

·      MOU-1 therefore suspended and completed for rigless testing.

 

·      Primary target confirmed as covering approximately 32 km² and supporting pre-drill CPR Prospective Gas Resources of 295 BCF net to the Company

 

·      EIA for follow-up wells MOU-4, MOU-5 and MOU-NE commissioned.

 

·      New MOU-NE Jurassic structure covering 102 km²identified.

 

·      Decommissioning of the CO2 EOR surface facilities and down-hole equipment at Inniss-Trinity commenced.

 

·      Planning with Lease Operators Ltd. for new CO2 EOR project in the PS1 field progresses with submission of an application for Certificate of Environmental Clearance.

 

·      FSRU LNG Project in Ireland secures collaboration agreement with supplier of gas, LPG and LNG in the UK and Ireland.

 

·      Successor authorisations to the Licensing Options 16/26 (Corrib South) and 16/30 (Ram Head) under active review by the Geoscience Regulation Office in Ireland.

 

·      Proposal submitted to evaluate the potential for the conversion of the undeveloped Ardmore gas field (Ram Head) to gas storage.

 

Highlights of Directorate Changes

·      Board strengthened with appointment of Lonny Baumgardner, with extensive Moroccan drilling and gas marketing experience, as Chief Operating Officer.

 

Post Period End:

 

·      295 BCF of Contingent Gas Resources likely to be commercially viable supported by independent CPR.

 

·      EIA approval for MOU-4, MOU-5 and MOU-NE received.

 

·      Civil works contract awarded for the construction of the MOU-4 well pad.

 

·      Source of long-lead well inventory items identified and purchase orders being prepared.

 

·      Confidentiality agreements executed with potential partners for follow-up drilling and potential gas development in Morocco.

 

·      Discussions opened with FRAM Exploration Trinidad Ltd. regarding a settlement to the dispute surrounding the premature termination of the Inniss-Trinity CO2 EOR project contrary to the terms of the Well Participation Agreement.

 

·      Final information submitted to GSRO to enable a decision on the Corrib South and Ram Head successor authorisations to be made.

 

·      Potential green hydrogen acquisition being evaluated.

 

·      Placed 11,500,000 new ordinary shares of no par value in the Company to raise £1,035,000 (before expenses).

 

·      Appointed Tom Evans and Alistair Jury as Non-executive Directors to replace Dr. Stephen Staley and Louis Castro.

 

·      Issued warrants to brokers to subscribe for 690,000 new shares exercisable at £0.09 before 17 March 2025.

Paul Griffiths, Executive Chairman of Predator Oil & Gas Holdings Plc commented:

"We are pleased to have reduced operating losses and administrative expenses in 2021 whilst increasing cash balances at the end of the period and maintaining a debt-free status. This has been achieved despite a significant increase in both operational activity and corporate strategic  planning and execution.

 

Successful drilling and the completion of MOU-1 for rigless testing was a milestone achievement for the Company in that it established the Company as a highly competent operator whilst also unlocking the gas potential of a vast licence area in northern Morocco, linked via infrastructure to Europe, covering 7,269km².

 

Whilst disappointed with the manner in which the Inniss-Trinity CO2 EOR project was unilaterally and unexpectedly terminated by our joint venture partner, we are pleased that the project established "Proof of Concept" for CO2 EOR operations in Trinidad. This has allowed us to move forward quickly with a new CO2 EOR project better suited to our commercial guidelines for business development in Trinidad. We remain a niche provider of CO2 EOR services with unique practical operational experience and subsurface technical understanding of CO2 sequestration.

 

In Ireland we have maintained progressed on our applications for successor authorisations and towards gaining recognition of an FSRU LNG import facility as an important contributor to Ireland's security of energy supply. We alone in Ireland have taken ownership of the FSRU concept based on management's long experience and understanding of the vital role of the Kinsale offshore pipeline and the importance of the Inch entry point to the gas grid.

 

The next stage of the Company's development will be challenging as we seek to take our various projects to the next level of financing which is why we have taken the opportunity to refresh the Board with Non-executive Directors with the necessary experience to encourage and oversee this critical next step.

 

Maintaining undiluted project equity has been a priority of the Company during the last 3 years as we juggle and develop our niche positions in three diverse geographies. With the focus now firmly on near-term security of energy supply we are now well placed to potentially trade our project equity for access to financial backing to take projects to development and cash flow as we understand and can navigate our way through the regulatory and environmental processes that would delay new start-up projects of a similar scale to ours.

 

We thank our shareholders for their continued support. The Company could not have achieved the progress it has made without our supportive shareholders. We will continue to apply our management philosophy and experience to the further development of our assets over the next 12 months. We are a small, cost-effective team that proportional to our size delivers operational success and strategic opportunities for potential project partners on a much larger scale."

 

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:

Predator Oil & Gas Holdings Plc Paul Griffiths               Executive Chairman Lonny Baumgardner  Managing Director	Tel: +44 (0) 1534 834 600 [email protected]
Novum Securities Limited Jon Belliss   Optiva Securities Limited Christian Dennis   Peterhouse Capital Limited Charles Goodfellow	Tel: +44 (0) 207 399 9425     Tel: +44 (0) 203 137 1902     Tel: +44 (0) 207 220 9791
Flagstaff Strategic and Investor Communications Tim Thompson  Mark Edwards Fergus Mellon	Tel: +44 (0) 207 129 1474 [email protected]

 

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 testing programme is being developed and a further drilling programme is under review.

 

Predator is seeking to further develop the remaining oil reserves of Trinidad's mature onshore oil fields through the application of CO2 EOR techniques and by sequestrating anthropogenic carbon dioxide to produce "greener" oil.

 

In addition, Predator also 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.

 

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.

 

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

 

 

 

 

 

 

 

 

 

 

 

Consolidated statement of comprehensive income
For the year ended 31 December 2021
		01.01.2021 to 31.12.2021		01.01.2020 to 31.12.2020
				£
	Notes	£		(restated)*
Administrative expenses	4	(1,398,802)		(1,363,711)
Operating loss		(1,398,802)		(1,363,711)
Finance expense	5	(19)		(225,359)
Loss for the year before taxation		(1,398,821)		(1,589,070)
Taxation	6	-		-
Loss for the year after taxation		(1,398,821)		(1,589,070)
Comprehensive income		-		-
Total comprehensive loss for the year attributable to the owner of the parent		(1,398,821)		(1,589,070)
Earnings per share basic and diluted (pence)	8	(0.5)		(0.8)

* For further information on the restatement, please refer to note 27 on page 31 of these financial statements

The accompanying accounting policies and notes on pages 9 to 31 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 2021
				31.12.2020
		31.12.2021		£
	Notes	£		(restated)*
Non-current assets
Tangible fixed assets	11	5,884		5,592
Intangible asset	10	2,687,026		-
		2,692,910		5,592
Current assets
Trade and other receivables	13	1,737,258		1,577,858
Cash and cash equivalents	14	1,523,035		1,325,751
		3,260,293		2,903,609
Total assets		5,953,203		2,909,201
Equity attributable to the owner of the parent
Share capital	17	11,425,061		6,832,564
Reconstruction reserve		2,386,321		2,797,421
Warrants  issuance cost	19	(376,820)		(208,887)
Share based payments reserve	19	729,700		458,840
Retained deficit		(8,456,078)		(7,054,229)
Total equity		5,708,184		2,825,709
Current liabilities
Trade and other payables	15	245,019		83,492
Total liabilities		245,019		83,492
Total liabilities and equity		5,953,203		2,909,201

* For further information on the restatement, please refer to note 27 on page 31 of these financial statements

The accompanying accounting policies and notes on pages 9 to 31 form an integral part of these financial statements.

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 £1.28 million (2020: £1.59 million loss). The financial statements on pages 65 to 91 were approved and authorised for issue by the Board of Directors on 28 June 2022 and were signed on its behalf by:

 

 

 

Paul Griffiths

Director

 

 

 

 

Consolidated statement of changes in equity
For the year ended 31 December 2021
	Attributable to owner of the parent
	Share Capital	Reconstruction reserve	Warrants issuance cost reserve	Share based payments reserve	Retained deficit	Total
			£			£
	£	£	(restated)*	£	£	(restated)*
Balance at 31 December 2019	2,346,336	3,270,648	(108,436)	256,416	(5,465,159)	299,805
						-
Issue of ordinary share capital	4,486,228	-	-	-	-	4,486,228
Issue of warrants	-	-	-	100,451	-	100,451
Fair value of share options	-	-	-	101,973	-	101,973
Loan note conversion premium	-	(473,227)	-	-	-	(473,227)
Reallocation of warrants issuance costs *	-	-	(100,451)	-	-	(100,451)
Total contributions by and distributions to owners of the parent recognised directly in equity	6,832,564	2,797,421	(208,887)	458,840	(5,465,159)	4,414,779
Loss for the year	-	-	-	-	(1,589,070)	(1,589,070)
Total comprehensive income for the year	-	-	-	-	(1,589,070)	(1,589,070)
Balance at 31 December 2020	6,832,564	2,797,421	(208,887)	458,840	(7,054,229)	2,825,709
Issue of ordinary share capital	4,585,000	-	-	-	-	4,585,000
Issue of warrants	-	-	-	195,327	-	195,327
Fair value of share options	-	-	-	75,533	-	75,533
Transaction costs		(411,100)	-	-	-	(411,100)
Exercised warrants	7,497	-	3,028	-	(3,028)	7,497
Warrants issuance costs	-	-	(170,961)	-	-	(170,961)
Total contributions by and distributions to owners of the parent recognised directly in equity	11,425,061	2,386,321	(376,820)	729,700	(7,057,257)	7,107,005
Loss for the year	-	-	-	-	(1,398,821)	(1,398,821)
Total comprehensive income for the year	-	-	-	-	(1,398,821)	(1,398,821)
Balance at 31 December 2021	11,425,061	2,386,321	(376,820)	729,700	(8,456,078)	5,708,184

* For further information on the restatement, please refer to note 27 on page 31 of these financial statements.

The accompanying accounting policies and notes on pages 9 to 31 form an integral part of these financial statements.

 

 

Consolidated statement of cash flows
For the year ended 31 December 2021
			01.01.2021 to 31.12.2021		01.01.2020 to 31.12.2020
					£
		Notes	£		(restated)*
Cash flows from operating activities
Loss for the period before taxation			(1,398,821)		(1,589,070)
Adjustments for:
Issue of share options		20	75,534		101,973
Finance expense		5	19		128,765
Share issue costs			-		195,000
Fair value of warrants			24,366		-
Amortisation of transaction costs		5	-		96,594
Depreciation			2,338		1,642
Foreign exchange			(244,281)		252,867
(Increase)/decrease in trade and other receivables			(6,059)		25,919
Increase/(decrease) in trade and other payables			161,527		(196,346)
Net cash used in operating activities			(1,385,377)		(982,656)
Cash flow from investing activities
Loan advances			(115,881)		(290,419)
Purchase of computer equipment		11	(2,629)		(842)
Capitalised costs - Project Guercif - Morocco		10	(2,687,026)		-
Disposal of computer equipment		11	-		767
Net cash used in investing activities			(2,805,536)		(290,494)
Cash flows from financing activities
Proceeds from issuance of shares, net of issue costs			4,173,900		3,535,550
Proceeds from issue of convertible loan notes, net of issue costs			7,497		-
Redemption of convertible loan notes			-		(746,000)
Finance expense paid			(19)		(115,315)
Net cash generated from financing activities			4,181,378		2,674,235
Effect of exchange rates on cash			206,819		(185,049)
Net increase in cash and cash equivalents			197,284		1,216,035
Cash and cash equivalents at the beginning of the year			1,325,751		109,716
Cash and cash equivalents at the end of the year			1,523,035		1,325,751

* For further information on the restatement, please refer to note 27 on page 31 of these financial statements                 

The accompanying accounting policies and notes on pages 9 to 31 form an integral part of these financial statements.

 

 

 

 

 

 

Statement of accounting policies

For the year ended 31 December 2021

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 from 28 February 2022.

Basis of 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 2021.

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 the financial statements requires an assessment on the validity of the going concern assumption. At the date of these financial statements the Directors expect that the Group will require further funding for the Group's longer term corporate overheads; an award of either or both of the Group's successor authorisations in the Republic of Ireland; the execution of a discretionary drilling programme in the Guercif Licence in Morocco and entry into the First Extension Period of the Guercif Petroleum Agreement; and for the development of new CO2 EOR projects in the Republic of Trinidad and Tobago for which there are currently no commitments to finance. The Directors are confident that existing funds are adequate to meet the Group's firm commitments over the next 18 months allowing for a reduction of the Group's corporate overheads to conserve cash if and when required. The Directors are confident, based on their previous track record, that the Group will be able to raise further funds as it considers appropriate to meet requirements for discretionary work programme options and ensuing commitments if exercised over the next 24 months, in cash, joint venture or farminee partner equity, share issue, debt finance or otherwise. Failing the success of the fund-raising activities the Directors will be prepared not to enter into any discretionary work programmes or new commitments and liabilities. Under these circumstances the Directors would continue to focus on the return of the US$1,500,000 bank guarantee in favour of ONHYM in respect of the Initial Period of the Guercif Petroleum Agreement and on amicably resolving the dispute with FRAM Exploration Trinidad Ltd. whereby the Group can potentially receive value for its investment in the Inniss-Trinity pilot CO2 EOR Project and its loan advanced to Fram Exploration Trinidad Ltd.

 

 

 

 

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 2022

- Amendment to IFRS 16 Leases - COVID-19 related rent concessions Extension of the practical expedient

- Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41 - Annual Improvements to IFRS Standards 2018-2020

- Amendments to IAS 1 - Presentation of financial statements on classification of liabilities

- Amendment to IAS 12 - deferred tax related to assets and liabilities arising from a single transaction

- Amendment to IFRS 17 - Insurance contracts

New Standards, amendments and interpretations effective after 1 January 2020 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 2018, with the exception of IFRS 6 - Exploration and evaluation costs of mineral resources being introduced in this year.  The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities in the financial year are discussed below:

(a)           Going Concern and Inter-company loan recovery

The Group's cash flow projections indicate that the Group should have sufficient resources to continue as a going concern.

The recoverability of the inter-company loans advanced by the Company to subsidiaries depends also on the subsidiaries realising their cash flow projections. In the case of Predator Oil & Gas Trinidad Ltd. ("POGT") this cannot now be achieved through profits from production revenues from the Inniss-Trinity CO2 EOR Project, which was unilaterally terminated for no reason by FRAM Exploration Trinidad Ltd. in breach of the terms of the Inniss-Trinity Well Participation Agreement.

 

 

 

In the case of Predator Gas Ventures Ltd., recovery of inter-company loans is dependent on the Guercif drilling programme (executed in 2021 and with discretionary follow-up drilling proposed for 2022) successfully recovering commercial quantities of gas that can be developed and brought to market based on a pilot Compressed Natural Gas development option. The Moroccan industrial gas market is commercially attractive and even relatively low volumes of discovered gas at a scoping production rate of 5 mm cfgpd (or even less with the rise in oil and gas commodity prices) are very likely to be economic taking into account also Morocco's benign petroleum tax regime. MOU-1 successfully encountered gas and was suspended and completed for rigless testing in 2022. Until gas test rates are confirmed the commerciality of the well cannot be determined. The Company has appointed SLR Consulting Ireland Ltd. to update the Company's Moroccan CPR and it is likely its gas resources attributed to the MOU-1 drilling target will be re-categorised as Contingent Resources pending development from the pre-drill status of Prospective Resources. Re-categorising the gas resources will potentially assist with a partial sale of equity in the discovered gas to fund a pilot CNG development.

In the case of Predator Oil and Gas Ventures Ltd. and Mag Mell Energy Ireland Ltd., the quantum of inter-company loans remain relatively small and no substantive non-discretionary expenditures are anticipated going forward. The change in business strategy to focus on an FSRU LNG gas import option and gas storage is timely. The Directors believe that the business strategy for Ireland, focussed on security of energy supply and gas, is attractive to potential joint venture partners and investors in gas infrastructure.  This is demonstrated by the execution at the end of the year under review of a collaboration agreement in the area of gas marketing with one of Ireland's leading company's in the field of the marketing of petroleum products. The Company believes that given its unique position in Ireland as having the potential to realise a diverse portfolio of gas assets covering LNG import, gas storage, gas field development and gas exploration gives it the opportunity to promote a number of different business development options to include commercial propositions that would recover the modest level of investment in its projects represented by the inter-company loans. All of the Company's projects are being actively reviewed by the Irish regulatory authorities.

Management have also assessed that the carrying value and recoverability of the investment, including inter-company receivables, is ultimately dependent on the carrying value of the underlying assets of the Group.  Further evidence of its realisable value can also be obtained by reference to 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)            Recoverability of Loan

The Group entered into an agreement (the "Loan Agreement") with FRAM Exploration Trinidad Ltd. ("FRAM"), a wholly owned subsidiary of Challenger Energy Group Plc, who are listed on AIM.

Since the unilateral termination for no reason by FRAM of the Inniss-Trinity CO2 EOR Project in breach of the terms of the Inniss-Trinity Well Participation Agreement, the Directors have sought to engage with FRAM to seek to settle the dispute. The Directors are of the opinion that there is a willingness on the part of FRAM Exploration Trinidad Ltd. to find a mechanism to amicably settle the dispute. The Directors do not believe that this will result in a cash settlement in favour of the Company but rather a settlement in kind involving the acquisition of an asset and/or the creation of a business opportunity that would have a resulting value that could be offset to eliminate the liabilities created by FRAM Exploration Trinidad Ltd. under the Well Participation Agreement, which has not been formally terminated. Until commercial negotiations are either successfully or unsuccessfully concluded the Directors are of the opinion that the investment made by POGT in the Inniss-Trinity CO2 EOR Project may be recoverable in some form.

On 7 June 2022 the Company announced an update on the Company's position with regard to the loan receivable (the "FRAM Loan") from FRAM Exploration Trinidad Ltd. ("FRAM"), a wholly owned subsidiary of Challenger Energy Group Plc ("Challenger"), in respect of the Inniss-Trinity CO2 EOR Project (the "CO2 EOR Project"). The CO2 EOR Project was prematurely and unilaterally terminated by Challenger on 1 August 2021.

 

 

 

In the absence of receiving a response to the Company's correspondence to Challenger dated 23 March 2022,  and subsequent follow-up correspondence proposing the terms for a potential commercial settlement, receipt of which was acknowledged by Challenger, and in the light of FRAM and Challenger's refusal in writing to comply with a request for information from the Company via its auditors that was necessary for its financial reporting of the FRAM Loan, the Company has elected to initiate a legal process to initially prioritise the recovery of the FRAM Loan.

Pending the outcome of commercial negotiations with FRAM Management to settle the dispute management have concluded that there is no impairment required at the reporting date. Should negotiations not reach a satisfactory conclusion for the Company then management consider that the FRAM Loan cannot be recovered and an impairment of £591,065 would be required.

The Company notes the Challenger RNS dated 8 June 2022 but does not accept its conclusions. The Company will not elaborate further at this time so as not to prejudice any future legal process

c)             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 assumed under these arrangements 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 on a graded vesting basis 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 20).

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 20 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 issue price of the Company's shares at the last placement of shares immediately preceding the calculation date.  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 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 20.

 

 

 

 

 

 

 

d)            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.

The Directors have assessed the value of Project Guercif and consider that the fair value of the exploration asset is equal to the consideration paid to 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.

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 13.                                           

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 parent company raises funds and most of its expenses paid are in in British Pound Sterling. The same applies to its subsidiaries, where most of its expenses paid are also in British Pound Sterling.  This results in the functional currency of the Group and all of its subsidiaries being the British Pound Sterling. The Group's financial statements are therefore prepared in 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 2021	£1: US$1.3846 and £1: Euro1.1633
31 December 2020	£1: US$1.3642 and £1: Euro1.1089

 

Investments in subsidiaries

The Group's investment in its subsidiaries are recorded at cost.

Plant and equipment

The only assets the Group currently has are personal computers.

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.

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.

The Group currently does not hold any deferred tax asset or liability.

 

 

 

 

 

 

 

 

 

 

 

Notes to the financial statements

For the year ended 31 December 2021

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.

Year ended 31 December 2021	Europe			Caribbean		Africa		Corporate
	£'000			£'000		£'000		£'000
Gross loss
Administrative and overhead expenses	(150)			(141)		(266)		(841)
Share options and warrant expense	-			-		-		-
Finance expense	-			-		-		-
Loss for the year from continuing operations	(150)			(141)		(266)		(841)
Total reportable segment intangible assets	-			-		2,687		-
Total reportable segment non-current assets	-			-		-		6
Total reportable segment current assets	4			595		1,173		1,488
Total reportable segment assets	4			595		3,860		1,494
Total reportable segment liabilities	(10)			(9)		(81)		(145)
Year ended 31 December 2020	Europe			Caribbean		Africa			Corporate
*(restated)	£'000			£'000		£'000			£'000
Gross Loss
Administrative and overhead expenses	(128)			(187)		(235)			(814)
Share options and warrant expense	-			-		-			-
Finance expense	-			-		-			(225)
Loss for the year from continuing operations	(128)			(187)		(235)			(1,039)
Total reportable segment non-current assets	-			-		-			6
Total reportable segment current assets	2			512		1,108			1,282
Total reportable segment assets	2			512		1,108			1,288
Total reportable segment liabilities	(1)			(14)		(3)			(65)
									2020
						2021			Group
						Group			£'000
2              Group loss from operations						£'000			(restated)*
Operating loss is stated after charging/(crediting):
Auditors' remuneration (note 3)						28			23
Depreciation						2			2
Share option expense						-			-
Foreign exchange (gain)/loss						(14)			105

 

				2021		2020
				Group		Group
3              Auditors remuneration				£'000		£'000
Audit of the accounts of the Group				28		23
				28		23

 

						2020
				2021		Group
				Group		£'000
4              Administration expenses				£'000		(restated)*
Administration fees				85		81
Design, publishing, presentation and printing fees				1		15
Audit fee				28		23
Annual return fee				1		1
Non-executive director fees				90		74
Share based payments - options				76		102
Share based payments - warrants				24		-
Insurance				59		11
Legal and professional fees				52		86
Listing costs				303		155
Website costs				4		3
Directors' fees				229		161
Technical Consultancy fees				360		286
Project costs				-		150
Travel expenses				41		37
Computer/system costs/IT support				4		23
Bank charges				49		42
Depreciation				2		2
Sundry expenses				4		1
Foreign exchange				(14)		105
Formation costs				-		3
Accountancy fees				-		3
				1,399		1,364

 

 

 

 

 

				2021		2020
				Group		Group
5              Finance costs				£'000		£'000
Loan interest paid				-		17
Loan redemption fees				-		112
Amortisation of transaction costs				-		96
				-		225

 

					2021		2020
					Group		Group
6              Group taxation					£'000		£'000
Loss on ordinary activities before tax					(1,399)		(1,589)
Loss on ordinary activities at Jersey standard 0% tax (2020: 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.

					2021		2020
					Group		Group
7              Personnel					£'000		£'000
Executive and non-executive directors including bonuses					546		521
Share option scheme					90		102
					636		623
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 £229,850 (2020: £178,200). The Group does not have employees. All personnel are engaged as service providers.

 

 

 

 

 

 

						2020
				2021		Group
8              Earnings per share				Group		(restated)*
Weighted average number of shares				266,433,024		209,959,715
Loss for the year (£'000)				(1,280)		(1,589)
Earnings per share basic and diluted (pence)				(0.5)		(0.8)

 

Dilutive loss per Ordinary Share equals basic loss per Ordinary Share as, due to the losses incurred in 2021 and 2020, 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           Intangible asset				Project Guercif		£
Gross carrying amount
Balance at 1 January 2021				-		-
Additions, separately acquired				2,687,026		2,687,026
At 31 December 2021				2,687,026		2,687,026
Depreciation and impairment
Balance at 1 January 2021				-		-
Depreciation				-		-
Balance at 31 December 2021				-		-
Carrying amount at 31 December 2021				2,687,026		2,687,026

 

On 18 March 2021, the Company announced scoping and development and operating costs for a pilot Compressed Natural Gas ("CNG") Project at Guercif in Morocco based on a 10mm cfgpd profile for 10 years, with net capital costs to the Company of £8.2 to £8.6 million.

The Directors confirmed that on the 20 June 2021, MOU-1 well was spudded at 01:00 hours with drilling ahead in progress to the first planned 133/8" casing point. The well is forecast to take up to 20 days to drill and to run wireline logs.

The Directors announced on 6 July 2021 the completion of the drilling of MOU-1, which is operated in a joint venture with the Office National des Hydrocarbures et des Mines ("ONHYM") acting on behalf of the State (25%) on schedule and within pre-drill budget estimates. On the basis of the occurrence of formation gas shows at several levels and the results of the wireline logging programme the well was suspended and completed for future rigless well testing.

All costs relating to Project Guercif have been capitalised and will be depreciated once gas discovery is declared commercial and a Plan of Development has been approved.

·      The Directors have undertaken an assessment of the following areas and circumstances that 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; or

·      Sufficient data exists to indicate that the book value will not be fully recovered from future development and production.

 

Following their assessment, the Directors concluded that no impairment charge was required at 31 December 2021.

11           Property, plant and equipment						£
Cost
At 31 December 2020						8,551
Additions						2,630
At 31 December 2021						11,181
Amortisation
At 31 December 2020						2,959
Charge for the year						2,338
At 31 December 2021						5,297
Carrying amount
At 31 December 2020						5,592
At 31 December 2021						5,884

 

				2021		2020
				Group		Group
12          Investment in subsidiaries				£'000		£'000
Cost at the beginning of the year				537		537
Additions				-		-
Disposals				-		-
				537		537

 

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
Predator Oil and Gas Trinidad Limited	Jersey		Ordinary		100%		Profit rights for production revenues from a CO2 enhanced oil recovery project
Predator Gas Ventures Limited	Jersey		Ordinary		100%		Exploration licence onshore Morocco
Mag Mell Energy Ireland Ltd (Formerly Predator LNG Ireland Limited)	Jersey		Ordinary		100%		Licence application to import liquified natural gas

 

Since 28 February 2022, the registered address of all of the Group's companies is at 3rd Floor, IFC5, Castle Street, St Helier, JE2 3BY, Channel Islands. The previous registered address was 3rd Floor, Standard Bank House, 47-49 La Motte Street, Jersey, JE2 4SZ, Channel Islands.

				2021		2020
				Group		Group
13          Trade and other receivables				£'000		£'000
Current
Loans receivable				591		468
Security deposit (US$1,500,000)				1,111		1,100
Prepayments and other debtors				35		10
				1,737		1,578

 

Loans receivable relates to a loan of £591,065 effected to FRAM Exploration Trinidad Limited ('FRAM') in respect of the CO2 EOR project comprising USD360,096 advanced as cash and USD402,120 and GBP26,461 advanced as equipment. The loans are denominated in both US Dollars and British Pound Sterling, which are unsecured, interest free and repayable at the discretion of Predator Oil & Gas Trinidad Limited provided not less than one week's notice is given. The CO2 EOR project has been unilaterally terminated by FRAM in breach of the Well Participation Agreement with FRAM dated 17 November 2017. Pending the outcome of commercial negotiations to settle the dispute with FRAM the aforesaid loan may or may not be recovered.

A security deposit of $1,500,000 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.

Prepayments in are in respect of amounts paid in advance to the Financial Conduct Authority, media service providers and an insurance premium.

There are no material differences between the fair value of trade and other receivables and their carrying value at the year end.

Further information on the loans receivable from FRAM has been disclosed on note 25.

				2021		2020
				Group		Group
14          Cash and cash equivalents				£'000		£'000
Royal Bank of Scotland International Limited				1,481		1,317
Barclays Bank Plc				2		9
Société Générale				40		-
				1,523		1,326

 

				2021		2020
				Group		Group
15          Trade and other payables				£'000		£'000
Current
Trade payables				245		83
				245		83

 

All payables are required to be settled within 30 days.

 

16           Financial instruments - risk management

Details of the significant accounting policies in respect of financial instruments are disclosed on pages 70 to 73. 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.

			2021		2020
			£'000		£'000
Cash and trade receivables
Cash and cash equivalents			1,523		1,326
Trade and other receivables			1,737		1,578
Other liabilities
Trade and other payables (excluding short term loans)			245		83

 

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 Group has a credit risk in respect of inter-company loans to subsidiaries. The Company is owed £6,015,001 by its subsidiaries. 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:

 

	2021		2021		2020		2020
	carrying		maximum		carrying		maximum
	value		exposure		value		exposure
	£'000		£'000		£'000		£'000
Cash and cash equivalents	1,523		4,009		1,326		3,327
Receivables	1,737		1,737		1,578		1,578

 

The holding company's maximum exposure to credit risk by class of financial instrument is shown in the table below:

	2021		2021		2020		2020
	carrying		maximum		carrying		maximum
	value		exposure		value		exposure
	£'000		£'000		£'000		£'000
Cash and cash equivalents	1,473		3,893		1,271		3,272
Receivables	1,737		1,737		1,578		1,578
Loans to Group Companies	5,819		5,819		2,507		2,507

 

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 did not pay interest on cash balances during the year, therefore the Group is not currently affected by interest rate changes. At 31 December 2021, the Group had a cash balance of £1.523 million (2020: £1.326 million) which was made up as follows:

				2021		2020
				£'000		£'000
Sterling				848		165
United States Dollar				632		1,161
Euro				3		-
Moroccan dirham				40		-
				1,523		1,326

 

The Group had no interest bearing debts at the year end (2020: £nil).

 

 

 

 

 

 

 

 

 

 

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 2021 and 31 December 2020, the currency exposure of the Group was as follows:

	Sterling		US Dollar		Other		Total
	£'000		£'000		£'000		£'000
at 31 December 2021
Cash and cash equivalents	848		632		43		1,523
Trade and other receivables	1,173		565		-		1,737
Trade and other payables	163		43		38		245
at 31 December 2020
Cash and cash equivalents	165		1,161		-		1,326
Trade and other receivables	13		1,565		-		1,578
Trade and other payables	83		-		-		83

 

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 2021 the Group had no debt (2020: £nil).

				Number of shares		Nominal value
17           Share capital
Issued and fully paid
Opening Balance				239,678,517		6,832,564
15 March 2021
Warrant option exercised				267,750		7,497
26 March 2021
Share issue				5,215,155		547,591
18 June 2021
Share issue				11,784,845		1,237,409
18 June 2021
Share issue				10,000,000		1,500,000
4 August 2021
Share issue				26,000,000		1,300,000
				292,946,267		11,425,061

 

 

 

 

 

 

 

 

				2021		2020
				Group		Group
18          Non-Current Liability				£'000		£'000
Arato Global Opportunities LLC
Brought forward				-		918
Redemptions				-		(1,015)
Amortisation of transaction costs				-		97
				-		-

 

The Company entered into a Convertible Loan Note Instrument with Arato Global Opportunities LLC on 15 February 2019 for £1,500,000, the nominal amount of each note was £1.00 and could be increased to £1,750,000.  The notes were converted at 105% in multiples of £50,000 as a conversion price per ordinary share being 90% of the VWAC for the 2 trading days preceding the conversion, and to the extent not already redeemed or converted were to be redeemed in full the earlier of 15 February 2021 or in the event of default.

The loan notes carried no coupon, and were repayable at a premium of 5%. A fee of 10% of the principal amount applied if the loan notes were not converted into equity prior to 15 February 2021. The lender was issued with 2,083,333 warrants at an exercise price of 12p with a vesting period of two years. Novum Securities Limited, the arranger of the convertible loan notes, was issued with 2,000,000 in warrants on the same terms.

The fair value of the 4,083,333 warrants were determined at £81,384.

Novum Securities Limited was paid a £90,000 placement fee in for the Convertible Loan Note Instrument. The total transaction cost of £171,384 was accounted for in terms of IFRS9 was offset against the carrying value of the Convertible Loan Note and amortised according to the effective interest rate method giving rise to a £96,594 charge to the income statement during the year.

During the previous year loan notes with a value of £269,000 were converted to shares. The remaining balance of the loan of £746,000 was repaid on 15 May 2020.

 19          Other reserves

						2020
				2021		Group
Share based payments reserve				Group		£'000
				£'000		(restated)*
Balance brought forward				459		256
Issue of warrants				171		101
Extension of warrants exercise date				24		-
Fair value movement of share options				76		102
Balance carried forward				730		459

 

 

 

 

 

 

 

 

 

						2020
				2021		Group
Warrants issuance cost reserve				Group		£'000
				£'000		(restated)*
Balance brought forward				(209)		(108)
Issue of warrants				(171)		(101)
Exercised warrants at fair value				3		-
Balance carried forward				(377)		(209)

 

20           Share based payments

						2020
Warrant and share option expense				2021		£'000
				£'000		(restated)*
Warrant and share option expense:
- in respect of remuneration contracts				76		102
- in respect of financing arrangements				-		-
				76		102

 

Share Options

 

The Group operates a share option plan for directors.  Details of share options granted are noted below:

On 24 May 2018 both Paul Griffiths and Ron Pilbeam were granted share options each of 4,005,486 exercisable at £0.028 each and Steve Staley and Sarah Cope were granted share options each of 1,001,370 exercisable at £0.028 each.  The options are subject to the following vesting conditions:

1/3 of the option shares 3,337,904 on gross production from the wells drilled under the Well Participation Agreement Predator Oil and Gas Ventures Limited and FRAM Exploration Trinidad Limited of 50 BOPD (measured over a consecutive 30 day period)

1/3 of the option shares 3,337,904 on incremental total gross production from wells for which the Company receives revenues of 1,000 BOPD (measured over a consecutive 30 day period)

Each option shall lapse 5 years after the date on which it vests, assuming it is not exercised before then and no event occurs to cause it to lapse early.

On 27 October 2020 both Paul Griffiths and Ron Pilbeam were granted share options each of 3,850,000 exercisable at £0.05 each and Steve Staley and Louis Castro were granted share options each of 1,650,000 exercisable at £0.05 each.

In February 2021 vesting requirements for all options held by Executive Directors Paul Griffiths and Ronald Pilbeam became subject to any one of certain targets being reached as follows:

Injection/sequestration of 600MT Liquid CO2 has been achieved for the CO2 EOR Pilot Project under the Well Participation Agreement between Predator Oil & Gas Trinidad Ltd and FRAM Exploration Trinidad Ltd dated 17 November 2017 and as amended from time to time; OR

A production test at AT-5X has flowed first oil; OR

An average daily increase of 75% in oil production at AT-12 has been achieved over a consecutive period of 30 days when measured against historical  AT-12 production over the period 1 January to 30 April 2020 immediately prior to the commencement of CO2 injection in the AT-4 Block on 18 May 2020.

Vesting requirements for Non-executive Directors Steve Staley and Louis Castro are subject to the expiration of six months from the date of grant.

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				2018		2020
Share price				£0.028		£0.0325
Exercise price				£0.028		£0.050
Term				5 years		7 years
Expected volatility				400%		400%
Expected dividend yield				0%		0%
Risk free rate				0.80%		-0.09%
Fair value per option				£0.028		£0.0325
Total fair value of the options				£280,382		£357,500

 

During the year, the Company cancelled all share options issued to Ron Pilbeam at the time of his resignation, which resulted in  the removal of future share option costs from the date of resignation. The total share option reserve in respect of 2021 is £75,533 (2020: £101,973).

Warrants

During the year, the Company has granted the below warrants to Novum Securities Limited ("Novum"):

• On 12 March 2021, 1,020,000 warrants were granted to Novum, which were based on 6% of the total share placing of 17,000,000 shares. The Warrant initially had an expiry date of 12 March 2024, however, Novum has requested that the expiry date be extended by a further year to 12 March 2025;

• On 18 June 2021, 600,000 warrants were granted to Novum, which were based on 6% of the total share placing of 10,000,000 shares. The Warrant initially had an expiry date of 18 June 2024, however, Novum has requested that the expiry date be extended by a further year to 18 June 2025;

As at the year ended 31 December 2021, the total number of warrants in issue at are:

1. On 24 May 2018 2,321,428 warrants were issued exercisable at 2.8p with an initial expiry date of 24 May 2021, with an option to extend the expiry date. As at 31 December 2021, 267,750 warrants have been exercised, with the outstanding exercisable warrants total being 2,053,678, which had their expiry date extended by one year to 24 May 2022.

2. On 15 February 2019 4,083,333 warrants were issued exercisable at 12p with an initial expiry date of 15 February 2021, with an option to extend the expiry date by one year. Of the total, 2,083,333 warrants were issued to Arato Global Opportunities LLP and expired on 15 February 2021 as the option to extend was not actioned. The exercise date on the remainder 2,000,000 warrants issued to Novum Securities Ltd was extended by one year to 15 February 2022 and as at 31 December 2021 remain outstanding.

3. On 17 February 2020 4,450,000 warrants were issued exercisable at 4p with an initial expiry date of 27 February 2023. Of the total, 1,875,000 warrants were issued to Optiva Securities Limited and the remainder 2,575,000 warrants were issued to Novum Securities Limited. As at 31 December 2021, no warrants have been exercised, with the outstanding exercisable warrants total being 4,450,000.

4. On 12 March 2021 1,020,000 warrants were issued to Novum Securities Limited exercisable at 10.5p with an initial expiry date of 12 March 2024, which was extended by a further year to 12 March 2025, following a request by the holders, which was approved by the Directors. As at 31 December 2021, no warrants have been exercised, with the outstanding exercisable warrants total being 1,020,000.

 

5. On 18 June 2021 600,000 warrants were issued to Novum Securities Limited exercisable at 15p with an initial expiry date of 18 June 2024, which was extended by a further year to 18 June 2025, following a request by the holders, which was approved by the Directors. As at 31 December 2021, no warrants have been exercised, with the outstanding exercisable warrants total being 600,000.

The total warrant agreements for the aforesaid 1,620,000 warrants issued on 11 March 2021 and 18 June 2021 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 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				12 March 2021		18 June 2021
Share price				£0.120		£0.158
Exercise price				£0.105		£0.150
Term				3 years		3 years
Expected volatility				80%		80%
Expected dividend yield				0%		0%
Risk free rate				0.25%		0.28%
Fair value per warrants				£0.093		£0.125
Total fair value of the warrants				£95,821		£75,140

 

In addition to the warrants fair value movement of £95,821 and £75,140, a further £24,366 (2020: £nil) was recognised in the total fair value movement for the year, reflecting the impact of the warrants extension mentioned on the above note.

21           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.   

 

 

 

 

 

 

 

 

22           Related party transactions

Directors and key management emoluments are disclosed note 7.

Further to note 7, as per the Company's announcement of 12 March 2021, in which Predator Oil & Gas Holdings Plc (PRD), the Jersey-based Oil and Gas Company with operations in Trinidad, Morocco and Ireland announced that it had raised £1,785,000 (before expenses) in a Placing conducted by the Company's broker Novum Securities Ltd, the Company provided the following update:

The Company did not have sufficient headroom to enable the issue and admission of all of the 17,000,000 Placing Shares which are required to be issued pursuant to the Placing without the production of an FCA approved prospectus.  The Company is therefore proposing to issue and admit 5,215,155 new ordinary shares (up to its existing headroom) (the Placing Shares) and for a director, Paul Griffiths, to make up the shortfall with a transfer of 11,784,845 existing shares held by him to Novum Securities.

 When the Company has the ability to issue further shares the Company intends to issue Paul Griffiths 11,784,845 new Ordinary Shares and will take all necessary steps required in order to such shares and make the necessary listing and admission hearing applications.  This will put Paul Griffiths back into the position that existed, in terms of his aggregate shareholding in the Company, had he not made the transfer of Ordinary Shares. For the avoidance of doubt the transfer of shares to Novum Securities Ltd from Paul Griffiths involves no consideration being paid to Paul Griffiths.

On 11 June 2021 the Company announced that it had the ability to issue headroom shares and accordingly would issue 11,784,845 new Ordinary Shares of no par value in the Company to Paul Griffiths.

23           Contingent liabilities and capital commitments

The Group had at the reporting date no capital commitments or contingent liabilities.

24           Litigation

The Group is not involved in any litigation, other than the litigation mentioned on note 25,

25           Events after the reporting date

On 31 January 2022, the Company issued a total of 8,855,486 share options exercisable at 5.66p per share to two Board members, Lonny Baumgardner (CFO) and Louis Castro (Non-executive Director). Lonny Baumgardner was awarded 7,855,486 and Louis Castro was awarded 1,000,000 options. Both options issued have a vested period of 6 months.

On 28 February 2022, the registered office of the Company changed to IFC5, 3rd Floor, Castle Street, St Helier, Jersey, JE2 3BY.

On 8 March 2022, the Company agreed to extend the below warrants exercise date, as shown below:

- The warrants issued on 15 February 2019 granting the right to subscribe in cash for 2,000,000 ordinary shares exercisable at a price per share equal to the subscription price (12p per share) is being amended to allow the exercise date of the warrants to be extended by one year to the fourth anniversary of the date of the Warrant Instrument.

- The warrants issued on 24 May 2018 granting the right to subscribe in cash for 2,053,678 ordinary shares exercisable at a price per share equal to the subscription price (2.8p per share) is being amended to allow the exercise date of the warrants to be extended by one year to the fifth anniversary of the date of the Warrant Instrument

- The warrants issued on 24 May 2018 granting the right to subscribe in cash for 160,714 ordinary shares exercisable at a price per share equal to the subscription price (2.8p per share) is being amended to allow the exercise date of the warrants to be extended by one year to the fifth anniversary of the date of the Warrant Instrument.

On 12 May 2022, the Company appointed both Tom Evans and Alistair Jury as Non-executive Directors. During the same meeting, it was noted that Louis Castro would be stepping down from the Board with effect from 31 May 2022.

7 June 2022

 

The Company announced an update on the Company's position with regard to the loan receivable (the "FRAM Loan") from FRAM Exploration Trinidad Ltd. ("FRAM"), a wholly owned subsidiary of Challenger Energy Group Plc ("Challenger"), in respect of the Inniss-Trinity CO2 EOR Project (the "CO2 EOR Project"). The CO2 EOR Project was prematurely and unilaterally terminated by Challenger on 1 August 2021.

In the absence of receiving a response to the Company's correspondence to Challenger dated 23 March 2022 and in the light of FRAM and Challenger refusal in writing to comply with a request for information from the Company via its auditors that was necessary for its financial reporting of the FRAM Loan, the Company has elected to initiate a litigation process.

The scope of the litigation process involves the Company seeking recompense in relation to the following matters:

1.     The FRAM Loan outstanding to the Company of £591,065 as of 31 December 2021.

 

2.     The Company is seeking full repayment of its project costs (the "Project Costs") invested in the CO2 EOR Project under the terms of the Inniss-Trinity Well Participation Agreement (the "WPA"), which remains in place.

Under the WPA the Company has invested the minimum required commitment of US$1,500,000 (inclusive of the outstanding FRAM Loan).

3.     The Company is seeking substantial consequential losses from Challenger under the WPA and arising from Challenger's failure to facilitate the execution of Phase 3 of the CO2 EOR Project as defined in the approved Inniss-Trinity CO2 EOR Project Proposal PRD25092019.

 

Based on an average WTI spot price of US$100, the Company is attributing an undiscounted value to the potential 853,000 barrels of oil resources in the AT-4 Block to have potentially been developed under Phase 3 of the CO2 EOR Project of US$30/barrel. The Company therefore determines that the potential claim for estimated consequential losses against Challenger, based on 50% of net profits under the WPA, could be up to US$12,800,000 but may be revised upwards depending on forward oil price projections.

 

4.     Phase 4 of the approved Inniss-Trinity CO2 EOR Project Proposal PRD25092019 allows for the application of the CO2 EOR Pilot learnings to be applied within new areas of the Inniss-Trinity field for upscaling CO2 EOR.

 

The SLR Consulting Ireland Ltd independent Competent Persons Report for the Inniss-Trinity field published 19 February 2020 gives Best Estimate recoverable CO2 EOR resources for the entire Inniss-Trinity field of 6.8 million barrels.

 

Based on 50% of net profits under the WPA and US$30/barrel this would amount potentially to estimated undiscounted consequential losses of up to US$102 million but may be revised upwards depending on forward oil price projections.

 

26           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.

 

 

 

 

 

27           Restatement of prior period

During the year, it was decided by the Directors that the Company was to restate prior years' warrant issue costs.

The restatement was implemented to bring prior years' warrant costs to be aligned with IFRS 2 in the oil and gas industry, whereby any warrants issued for services provided, are to be fully recognised with the equity section of the Company.

			Effect on year ended 31 December 2020		Effect on year ended 31 December 2019		Effect on year ended 31 December 2018
			GBP		GBP		GBP
Loss for the year			(1,689,521)		(1,279,243)		(792,461)
Reclassification of warrants issue costs			100,451		81,385		27,051
Restated total loss for the year			(1,589,070)		(1,197,858)		(765,410)
Warrants issuance cost reserve balance brought forward			(108,436)		(27,051)		-
Warrants issuance cost			(100,451)		(81,385)		(27,051)
Restated Equity attributable to the owner of the parent			(208,887)		(108,436)		(27,051)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate information

Directors                                                                                     Paul Stanard Griffiths (Executive Director - CEO) Ronald Pilbeam (Executive Director) (resigned 27 July 2021)

                                                                                                                Louis Castro (appointed 13 July 2020)

Dr George Henry Stephen Staley (Non-Executive Chairman) (resigned 8 March 2022)

Lonny Baumgardner (appointed 12 July 2021)

 

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

                                                 Lansdowne House

                                                                                                             57 Berkeley Square

                                                                  London W1J 6ER

 

Joint Broker and Placing Agent                                             Optiva Securities Limited

                                                                                                 49 Berkeley Square London W1J 5AZ

                                                                                                                           

 

Auditors                                                                                    PKF Littlejohn LLP

15 Westferry Circus Canary Wharf

London E14 4HD