Predator Oil Regulatory News (PRD)

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:

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.

* 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.

* 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

* 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.

* 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:

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:

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.

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 £229,850 (2020: £178,200). 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.

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.

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.

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

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.