Predator Oil Regulatory News (PRD)

FOR IMMEDIATE RELEASE

28 April 2023

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 2022

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 2022, 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 2022 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 2022.

Highlights of Financial Results for 2022

· Loss from operations of GBP2,558,844 (2021: Re-stated loss of £1,517,571).

The increase in operating loss is entirely attributable to share based payments (the award of options).

· Administrative expenses of GBP2,545,789 (2021: Re-stated £1,517,552).

Excluding share based payments for options and warrants corporate administrative expenses were GBP1,310,909 (GBP1,323,268 for the restated period to 31 December 2021).

· Increased cash balance at period end of 2022 GBP3,323,161 (2021: Re-stated GBP1,523,035).

· Additional, restricted cash of USD1,500,000 (USD1,500,000 for the period ended 31 December 2021).

· Placed 66,500,000 new ordinary shares of no par value in the Company to raise GBP4,335,000 (before expenses).

· Exercise of warrants Novum Securities Ltd. resulted in the issue of 5,949,210 new ordinary shares of no par value in the Company to raise GBP242,253.

· Exercise of share options by directors and former directors resulted in the issue of 18,363,712 new ordinary shares of no par value in the Company to raise GBP837,852

· Debt-free except for directors loans of GBP507,604

Highlights of key Operational Activities in 2022

· Completed post-well geological desktop studies for MOU-1 drilled in 2021.

· Validated the Moulouya Fan geological concept.

· Validated a thermogenic gas source in MOU-1.

· Re-evaluated the MOU-1 rigless testing programme to determine cost-effective ways to perforate additional potential targets for testing.

· Reprocessed 278 kilometres of 2D seismic data in Guercif.

· Completed geophysical studies for MOU-1 to confirm seismic amplitude response

Is in response to presence of gas at the top of the Moulouya Fan.

· Mapped an area of stronger seismic amplitudes for the Moulouya Fan of at least 30km².

· Technical work supports 2022 SLR CPR Best Estimate net gas resources of 295 BCF.

· Identified several potential drilling locations on the Moulouya Fan.

· Completed all well planning, well inventory purchases and mobilisation of well services in preparation for commencing MOU-2 drilling operations.

· Identified a drilling location for the MOU-NE Jurassic target.

· Executed a binding term sheet with Challenger Energy Group Plc to settle historical issues and to acquire TRex Holdings Trinidad Ltd. and the Cory Moruga field subject to the consent of the Ministry of Energy and Energy Industries.

· Continued to raise awareness in Ireland in respect of the Mag Mell offshore LNG import option and its applications for successor authorisations for Corrib South and Ram Head in the context of security of energy supply.

Highlights of Directorate Changes

· Board was strengthened by the appointment of Alistair Jury and Carl Kindinger as Non-executive directors with additional financial experience to replace outgoing Non-executive directors.

Post Period End:

· MOU-2 was drilled to 1,260 meters Measured Depth and suspended awaiting technical assessments for a potential re-entry.

· Optiva Securities Ltd. exercised warrants resulting in the issue of 2,035,714 new Ordinary shares in the Company of no par value to raise GBP79,500.

· An update on the proposed rigless testing of MOU-1 was provided.

· Placed 14,174,056 new ordinary shares of no par value in the Company and a director loaned 22,189,580 existing ordinary shares to raise GBP2,000,000 (before expenses).

· Update on MOU-3 civil engineering well site preparations.

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

"We are pleased to have managed operating losses and administrative expenses in 2022, after allowing for share-based payments whilst increasing cash balances at the end of the period and maintaining a debt-free status. This has been achieved despite rising global cost inflation and maintaining momentum in our three areas of business operations in what again has been very challenging times due to the UK-Russian conflict.

Preparing for the drilling of MOU-2 and beyond has resulted in us having to establish a brand new operational base in Morocco to ensure that we can source well inventory and services in a competitive manner and continue to press forward with drilling operations at the pace required to avail of opportunities to sell gas to the Moroccan industrial market.

The Moulouya Fan has been identified as a sizeable asset capable of in itself potentially supplying all of the current industrial market's CNG requirements. It will require additional wells over time to maintain and scale up the gas supply, but the priority at present will be to complete a drilling and rigless testing programme to validate the commercial CNG concept.

There will be geological and operational challenges to overcome which are no different to those faced by other operators along this particular trend of gas discoveries and fields.

Currently the Company is the only operator in Morocco preparing for imminent drilling.

We thank our shareholders for their continued support as always but particularly in what has been another volatile year in the financial markets coupled with unprecedented rises in modern times in inflation and cost of living. We will continue to focus on developing our Moroccan asset during 2023."

This announcement contains inside information for the purposes of Article 7 of the Regulation (EU) No 596/2014 on market abuse

For further information visit www.predatoroilandgas.com

Follow the Company on twitter @PredatorOilGas.

This announcement contains inside information for the purposes of Article 7 of the Regulation (EU) No 596/2014 on market abuse

For more information please visit the Company's website at www.predatoroilandgas.com: 

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 and suitable for the development of Compressed Natural Gas for Morocco's industrial sector. The MOU-1 well has been completed and is subject to a follow-up testing programme. The MOU-2 well is currently suspended pending a potential re-entry.

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 in oil reservoirs.

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.

The accompanying accounting policies and notes on pages 85 to 112 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 £2.55 million (2021 (restated): £1.5 million loss).

The financial statements on pages 81 to 112 were approved and authorised for issue by the Board of Directors on 27 April 2023 and were signed on its behalf by:

Paul Griffiths

Director

The accompanying accounting policies and notes on pages 85 to 112 form an integral part of these financial statements.

The accompanying accounting policies and notes on pages 85 to 112 form an integral part of these financial statements.

Significant non-cash transactions

During the year there were various significant non-cash transactions relating to share options, warrants issued during the year and loans to directors for shares lent, which are detailed in notes 15, 17 and 19.

Statement of accounting policies

For the year ended 31 December 2022

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.

Basis or preparation and going concern assessment

The principal accounting policies adopted in the preparation of the financial information are set out below. The policies have been consistently applied throughout the current year and prior year, unless otherwise stated. These financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs and IFRIC interpretations) issued by the International Accounting Standards Board (IASB) as adopted by the European Union and with those parts of the Companies (Jersey) Law, 1991 applicable to companies preparing their accounts under IFRS. The Company has adopted the exemption under Companies (Jersey) Law 1991 Article 105 (11) not to prepare separate accounts.

The consolidated financial statements incorporate the results of Predator Oil & Gas Holdings Plc and its subsidiary undertakings as at 31 December 2022. In prior years, the financial statements notes were rounded to the nearest thousands and did not follow the same treatment as the prime statements, therefore, the Directors have decided to change the notes to be rounded to the nearest pound.

The financial statements are prepared under the historical cost convention on a going concern basis. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, income and expenses and profits and losses resulting from intra-group transactions that are recognised in assets, are eliminated in full. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control, and continue to be consolidated until the date that such control ceases.

The preparation of financial statements requires an assessment on the validity of the going concern assumption. At the date of these financial statements the Directors expect that the Group will require further funding for the Group's corporate overheads; Irish licence interests, Moroccan licence and for the development of a CO2 EOR pilot project. Post the year end the Group issued shares for a total capital raised of £2.0mil before expenses, largely to progress MOU-3 surface location and drilling programme as well as a small portion of the total capital raised being used for general working capital. Following this capital raise, the Directors are confident that the Group will be able meet requirements over the course of the next 24 months, in cash, as debt finance, joint venture or farminee partner equity, share issues or otherwise.

The Group expects the acquisition of Cory Moruga to be completed in the near future, should it receive consent from the Trinidadian Ministry of Energy Industries. The acquisition would involve an initial cash outflow of USD2.0 million settlement, which the Board is confident that it would be able to raise in a further capital placing.

Failing the success of these fund raising activities the Directors will be prepared to accept appropriate reductions in their remuneration to conserve cash resources.

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 IAS 37 - Provisions, Contingent Liabilities and Contingent Assets - Onerous contracts

- Amendments to IFRS 3 - Business Combinations - Reference to Conceptual Framework

- Amendments to IAS 16 - Property, Plant and Equipment - Proceeds before Intended Use

New Standards, amendments and interpretations effective after 1 January 2022 and have not been early adopted

The Group does not believe that the below standards not yet effective, will have a material impact on the consolidated financial statements:

- Amendments to IAS 1 - Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting Policies

- Amendments to IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors - Definition of Accounting Estimates

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 2021.

a) Going concern and Inter-company loan recoverability.

The Group's cash flow projections indicate that, following the latest fundraise in April 2023, the Group has sufficient resources to continue as a going concern for the near future. The Board is confident that should the Group require further funds to complete and future works, that it will be able to raise further funds through issuing equity.

The recoverability of inter-company loans advanced by the Company to subsidiaries depends also on the subsidiaries realising their cash flow projections. This is the case for Predator Oil & Gas Trinidad Ltd. where production revenues are forecast from the near-term from pilot CO2 EOR operations where project economics have been stress-tested at lower oil prices. In the event of sustained lower oil prices positive cash flow will be less and the time taken to recover inter-company loans longer.

In the case of Predator Gas Ventures Ltd., recovery of inter-company loans is dependent upon the Guercif drilling programme successfully recovering commercial quantities of gas that can be developed and brought to market. The Moroccan gas market is commercially attractive and even relatively low volumes of discovered gas are likely to be economic. A partial sale of equity in a future potential gas discovery is the preferred strategy for recovery of inter-company loans rather than a longer term dependency on a gas development.

In the case of Predator Oil and Gas Ventures Ltd., the quantum of inter-company loan is relatively small and no substantive expenditures are anticipated going forward. The change in business strategy to a focus on LNG and gas storage offshore Ireland, creates a marketing opportunity for the Group's relevant experience and expertise within this sector of the industry. It creates the potential as promoters of the project to receive introduction and service providers' fees and a free minority equity position in a joint venture vehicle to move to the project development stage. Under these circumstances the inter-company loan would constitute past costs contributing to the level of free equity. Recovery of the relatively modest inter-company loan therefore has a variety of ways of being repaid.

Management have also assessed that the carrying value and recoverability of the investment, including intercompany receivables is ultimately dependent on the value of the underlying assets of the Group. Further evidence of its realisable value can also be noted by reference the market capitalisation of the Group on the London Stock exchange at the date of this report which can be used as a guide and to provide further assurance of its carrying value subsequent to the year end.

b) Recoverability of loan

The Group entered into an agreement FRAM Exploration Trinidad Limited ("FRAM"), a wholly owned subsidiary of Columbus Energy Resources PLC, who are listed on AIM.

Management have concluded that there is no impairment required at the reporting date, as the Group has entered into a settlement agreement with Challenger Energy Group Plc ("CEG") for the acquisition of T-Rex Trinidad Limited and the total liability due from FRAM will be offset against the total consideration agreed when the transaction is complete.

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 over the vesting period, based on the Group's estimate of shares that will eventually vest and adjusted for the effect of non-market based vesting conditions.

During the year, the Company issued warrants in lieu of fees to stockbrokers. The warrant agreements do not contain vesting conditions and therefore the full share-based payment charge, being the fair value of the warrants using the Black-Scholes model, has been recorded immediately. The charge is recognised within the statement of changes in equity. The valuation of these warrants involves making a number of estimates relating to price volatility, future dividend yields and continuous growth rates (see Note 19).

The fair value of the share options is estimated by using the Black Scholes model on the date of grant based on certain assumptions. Those assumptions are described in note 19 and include, among others, the expected volatility and expected life of the options. The expected life used in the model has been adjusted, based on management's best estimate, for the effects of non-transferability exercise restrictions and behavioural considerations. The market price used in the model is the 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 warrants, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

Where equity instruments are granted to persons or entities other than staff, the fair value of goods and services received is charged to profit or loss, except where it is in respect to costs associated with the issue of shares, in which case, it is charged to the share premium account.

The fair values calculated are inherently subjective and uncertain due to the assumptions made and the limitation of the calculations used. Further details of the specific amounts concerned are given in note 19.

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.

For more information please refer to note 10.

Basis of consolidation

Where the Group has control over an investee, it is classified as a subsidiary. The Group controls an investee if all three of the following elements are present: power over the investee, exposure to variable returns from the investee, and the ability of the investor to use its power to affect those variable returns. Control is reassessed whenever facts and circumstances indicate that there may be a change in any of these elements of control.

The consolidated financial statements present the results of the Company and its subsidiaries ("the Group") as if they formed a single entity. Inter-company transactions and balances between Group companies are therefore eliminated in full. Uniform accounting policies are applied across the Group.

The consolidated financial statements incorporate the results of business combinations using the acquisition method. In the statement of financial position, the acquirer's identifiable assets, liabilities and contingent liabilities are initially recognised at their fair values at the acquisition date. The results of acquired operations are included in the consolidated statement of comprehensive income from the date on which control is obtained. They are deconsolidated from the date on which control ceases.

Intangible assets

Mineral exploration and evaluation expenditure relates to costs incurred in the exploration and evaluation of potential mineral resources and includes exploration and mineral licences, researching and analysing historical exploration data, exploratory drilling, trenching, sampling and the costs of pre-feasibility studies.

Exploration and evaluation expenditure for each area of interest, other than that acquired from another entity, is charged to the consolidated statement of income as incurred except when the expenditure is expected to be recouped from future exploitation or sale of the area of interest and it is planned to continue with active and significant operations in relation to the area, or at the reporting period end, the activity has not reached a stage which permits a reasonable assessment of the existence of commercially recoverable reserves, in which case the expenditure is capitalised. Purchased exploration and evaluation assets are recognised at their fair value at acquisition. As the capitalised exploration and evaluation expenditure asset is not available for use, it is not depreciated.

Exploration and evaluation assets have an indefinite useful life and are assessed for impairment annually or when facts and circumstances suggest that the carrying amount of an asset may exceed its recoverable amount. The assessment is carried out by allocating exploration and evaluation assets to cash generating units, which are based on specific projects or geographical areas. IFRS 6 permits impairments of exploration and evaluation expenditure to be reversed should the conditions which led to the impairment improve. The Group continually monitors the position of the projects capitalised and impaired.

Whenever the exploration for and evaluation of mineral resources in cash generating units does not lead to the discovery of commercially viable quantities of mineral resources and the Group has decided to discontinue such activities of that unit, the associated expenditures are written off to the Statement of comprehensive income.

Financial assets

The Financial assets currently held by the Group and Company are classified as loans and receivables and cash and cash equivalents. These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method less provision for impairment.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in the statement of comprehensive income. On confirmation that the receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

Cash and cash equivalents

These amounts comprise cash on hand and balances with banks. Cash equivalents are short term, highly liquid accounts that are readily converted to known amounts of cash. They include short-term bank deposits and short-term investments.

Any cash or bank balances that are subject to any restrictive conditions, such as cash held in escrow pending the conclusion of conditions precedent to completion of a contract, are disclosed separately as "Restricted cash". The security deposit is recognised within trade and other receivables in note 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 functional currency of the Group and all of its subsidiaries is the British Pound Sterling.

Transactions entered into by the Group entities in a currency other than the currency of the primary economic environment in which it operates (the "functional currency") are recorded at the rates ruling when the transactions occur. Foreign currency monetary assets and liabilities are translated at the rates ruling at the date of the statement of financial position. Exchange differences arising on the retranslation of unsettled monetary assets and liabilities are similarly recognised immediately in profit or loss, except for foreign currency borrowings qualifying as a hedge of a net investment in a foreign operation.

The exchange rates applied at each reporting date were as follows:

31 December 2022 - £1: US$1.2041, £1: Euro1.1313 and £1: MAD12.5824

31 December 2021 - £1: US$1.3846 and £1: Euro1.1633

Investments in subsidiaries

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

Plant and equipment

Plant and equipment owned by the Group relates solely to computer equipment.

Depreciation is provided on equipment so as to write off the carrying value of items over their expected useful economic lives. It is applied at the following rates:

Computer equipment - 20% per annum, straight line

Share options and Equity Instruments

Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period. Where equity instruments are granted to persons other than consultants, the fair value of goods and services received is charged to profit or loss, except where it is in respect to costs associated with the issue of shares, in which case, it is charged to the share capital or share premium account.

Equity instruments

Share capital represents the amount subscribed for shares at each of the placings.

The reconstruction reserve account represents premiums received on the share capital of subsidiaries and also includes directly related share issue costs.

Warrants issuance cost reserve includes any costs relating to warrants issued for services rendered accounted for in accordance with IFRS 2 - Equity-settled instruments.

The share-based payments reserve represents equity-settled shared-based employee remuneration for the fair value of the options issued.

Retained earnings include all current and prior period results as disclosed in the Statement of comprehensive income, less dividends paid to the owners of the Company.

Taxation

The Company and all subsidiaries ('the Group') are registered in Jersey, Channel Islands and are taxed at the Jersey company standard rate of 0%. However, the Group's projects are situated in jurisdictions where taxation may become applicable to local operations.

The major components of income tax on the profit or loss include current and deferred tax.

Current tax

Current tax is based on the profit or loss adjusted for items that are non-assessable or disallowed and is calculated using tax rates that have been enacted or substantively enacted by the reporting date.

Tax is charged or credited to the statement of comprehensive income, except when the tax relates to items credited or charged directly to equity, in which case the tax is also dealt with in equity.

Deferred tax

Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the statement of financial position differs to its tax base, except for differences arising on:

• The initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction affects neither accounting or taxable profit; and

• Investments in subsidiaries and jointly controlled entities where the Group is able to control the timing of the reversal of the difference and it is probable that the differences will not reverse in the foreseeable future.

Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which the difference can be utilised.

The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date and are expected to apply when deferred tax liabilities/ (assets) are settled/ (recovered). Deferred tax balances are not discounted.

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

Notes to the financial statements

For the year ended 31 December 2022

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.

(1) During the year, the Group attempted to move to AIM and was subsequently aborted.

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.

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 £236,575 (2021: £229,850). The Group does not have employees. All personnel are engaged as service providers.

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. 16,209,770 shares were issued since 31 December 2022 and therefore the weighted average number of shares at the date of the financial statements is 335,420,297.

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.

The total carrying amount of Project Guercif as at 31 December 2022 of £5,275,720 (2021: £2,687,026) relates to costs incurred with wells MOU-1 and MOU-2.

MOU-1:

On 7 March 2023, the Company announced an update on the proposed testing of the MOU-1 well drilled and completed in 2021 in the area of the Guercif Petroleum Agreement onshore Morocco.

In conformance with the current Moroccan regulatory procedures for rigless well testing, the Company has expressed in writing to the Office National des Hydrocarbures et des Mines ("ONHYM") the intention to test MOU-1.

The Company will begin MOU-1 rigless testing at the very earliest opportunity once the regulatory process has been fully complied with.

MOU-2:

On 25 January 2023, the Company announced that MOU-2 well had been suspended with an option to re-enter after reaching a depth of 1,260 metres Measured Depth.

Wireline logs were acquired from the 95/8" casing point at 677 metres to 1,010 metres Measured Depth. The wireline logging tools were not able to log deeper than this depth due the presence of extremely sticky clays in a geological formation overlying the Moulouya Fan primary objective.

The debris flow potentially forms a highly effective seal on the underlying Moulouya Fan. The thickness of the Moulouya Fan reservoir interval is expected to increase between MOU-1 and MOU-2 based on the sand content of the debris-flow penetrated in MOU-2 allowed an extrapolation across to MOU-1 to be made. A re-entry and deepening of MOU-2 will be fully evaluated once a solution to optimising the drilling mud programme and mud properties has been completed.

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.

In accordance with IFRS 6, the Directors undertook an assessment of the following areas and circumstances which could indicate the existence of impairment:

• The Group's right to explore in an area has expired, or will expire in the near future without renewal

• No further exploration or evaluation is planned or budgeted for

• A decision has been taken by the Board to discontinue exploration and evaluation in an area due to the absence of a commercial level of reserves

• Sufficient data exists to indicate that the book value may not be fully recovered from future development and production

Following their assessment, the Directors concluded that no impairment charge in respect to any licences still held, was necessary for the year ended 31 December 2022(2021: £nil).

The principal subsidiaries of Predator Oil and Gas Holdings Plc, all of which are included in these consolidated Annual Financial Statements, are as follows: