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Predator Oil & Gas Holdings plc
Annual Report for the
Year ended 31 December 2018
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Contents
Business Review
1 Chairman’s statement
3 Strategy
5 Group strategic report
Our Governance
17 Report of the directors
19 Board of directors
20 Corporate governance report
24 Directors’ remuneration report
Investor Information
48 Corporate information
Financial Statements
28 Independent auditor’s report
31 Consolidated statement of
comprehensive income
32 Consolidated statement of
financial position
33 Consolidated statement of
changes in equity
34 Consolidated statement of
cash flows
35 Statement of accounting
policies
40 Notes to the financial
statements
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BUSINESS
REVIEW
OUR
GOVERNANCE
FINANCIAL
STATEMENTS
INVESTOR
INFORMATION
Chairman’s statement
INTRODUCTION
Dear Shareholder,
I am pleased to present the 2018 Annual Report which incorporates
our financial results for the year and a detailed summary of our
activities during the year and into the early months of 2019.
Following four very difficult years for the oil and gas sector, arising
from the sharp decline in oil prices in particular, there had been a
subsequent reduction in exploration activity, availability of capital and
a severe contraction in the size of the potential farmout market.
More significantly, there is also a growing sector awareness that the
Fossil Fuel Industry must adapt quickly to address growing global
concerns regarding C02 emissions and climate change that result from
an overreliance on fossil fuels as a source of primary energy to
support economic development.
In developing the Company’s asset portfolio during 2018 the strategic
focus has been on building a responsible fossil fuel exploration and
production business.
Predator’s focus on gas reflects the fact that gas has lower
C02 emissions than oil and is a relatively flexible fossil fuel, being
more widely available and affordable and with multiple potential roles
in the energy transition towards a greater dependence on
renewable energy.
Cash flows have increased in the industry during 2018 and the sharp
decline in operating costs attributed to the fall in the price of oil has
now allowed the industry to focus on replacing reserves and
identifying new business growth opportunities through exploration,
appraisal and nearterm development. Gas assets with credible
technical merits and a clear pathway to monetisation close to existing
infrastructure are potentially an attractive proposition and
compatible with the sector backdrop outlined above.
The global energy consumption mix is still dominated by fossil fuel
energy and to reduce this reliance requires a considerable period of time
and large amounts of capital investment in renewable energy projects
whilst sustaining economic development to pay for such investments.
Natural gas continues to play a key role in Ireland’s energy system
providing approximately 30% of the country’s primary energy needs.
In 2018 50% of Ireland’s electricity was powered by natural gas, and
despite significant investment in and contributions from renewable
energy Ireland presently remains one of the worst C02 polluters per
capita within the European Union.
In Morocco 80.4% of thermal electricity generating capacity is based
on coal with minor fuel oil, which results in high levels of
C02 emissions.
By seeking to explore for and develop indigenous gas in Ireland and
Morocco Predator seeks to make a small but practical contribution to
the role gas has in decarbonising the living environment, whilst still
maintaining the security and cost effectiveness of energy supply,
which is critical to sustaining economic development.
In Trinidad Predator, through its Pilot C02 Enhanced Oil Recovery
project, is seeking to utilise some C02 emissions from one of
Trinidad’s ammonia plants which would otherwise be vented into the
atmosphere. A significant proportion of the C02 utilised in the Pilot
will be sequestrated in the ground. The potential for upscaling
enhanced oil production using C02 injection within Trinidad’s large
inventory of mature oil fields may potentially provide further business
development opportunities.
Predator was formed during the year to consolidate the acquisition
of an existing nonoperated, potentially revenuegenerating, business
opportunity in Trinidad and an operated exploration and appraisal
portfolio offshore Ireland. During the year progress was made on
adding an exploration project onshore Morocco. A successful public
listing raised £1.3 million of capital primarily to develop the Trinidad
project. Predator’s public listing was the first by a junior oil and gas
company in 2018.
Trinidad is a core asset in the Predator portfolio as it offers the
potential for early cash flow from production revenues with which to
provide mediumterm contributions to Predator’s balance sheet.
During the year the emphasis has been on prudently moving the
project scope from infill drilling to enhancing oil recoveries and
production rates using C02 injection, a process widely used to good
effect in the United States. Commercial rationale for this was based
upon reducing the quantum of capital investment per barrel of oil
produced and the payback time on investment, whilst increasing
forecast production rates per well. Securing exclusivity to the C02
supply was an important primary objective in order to have the
opportunity to be in the prime position to upscale C02 EOR
operations after a potentially successful Pilot.
During the year Predator has applied for Successor Authorisations in
Ireland, one of which has subsequently been granted in 2019, and
developed its business model for these gas assets. Ireland has proved
to be a challenging environment over the recent years for executing
projects in a timely manner. The completion of the sale of the Corrib
gas field combined with a new drive to reduce C02 emissions to avoid
EU fines and to improve security of gas supply has potentially created
the conditions to reenergised the gas sector to possibly create a
changed environment for potentially substantive transactions for gas
assets proximal to existing infrastructure with rapidly developing
capacity ullage. Predator is wellplaced to exploit such an opportunity
for business development using our management team, which has
considerable transaction experience in Ireland.
Morocco is becoming an exciting addition to the portfolio of gas
projects and offers a highquality opportunity for low capital
investment
in drilling close to existing underutilised gas
infrastructure. The level of general interest already shown in this
asset, which was screened and selected based on our management’s
long history of involvement in operations and farmout activity in
Morocco, is very encouraging. Morocco is set to become an additional
pillar supporting Predator’s business growth potential during 2019
and is consistent with current sector sentiments in relation to gas and
the environment.
Recognising the changing environment in which we operate, your
Board and management’s most recent strategic review has concluded
that Predator must focus the majority of its cash resources on
executing and developing its shortterm production capability in
Trinidad whilst maintaining in good standing an attractive portfolio of
material high quality gas assets to facilitate derisking the financing
thereof through farmouts and potential M & A transactions.
Predator will continue to operate with a very small management team
with specialist knowledge and experience and a track record in
executing and delivering projects to the highest possible standards
and for the benefit of the Company and its shareholders.
We have a robust Board experienced in many diverse aspects of the
corporate business of a public company and all of whom make
important contributions to the Board’s deliberations to provide
diligent oversight of Predator’s business. Collectively we strive to
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Chairman’s statement (continued)
meet the best corporate governance standards and maintain a strong
commitment to judiciously developing the business of the Company
in line with shareholder expectations.
The outcome to Brexit in 2019 may pose significant new challenges
in terms of creating instability in the financial markets and currency
exchange rate fluctuations, reducing access to UKbased oil field
services, and in creating conditions liable to weaken investor
sentiment and decisionmaking processes. The Company has some
protection in that it does not operate in the United Kingdom and is
intending to generate revenues in United States dollars from
production in Trinidad. However, whilst Brexit remains unresolved
uncertainty will persist and possible outcomes cannot be predicted
with confidence.
In conclusion I am encouraged by our achievements to date over a
short period of time in developing a portfolio of material assets, each
of which could potentially transform the Company in its own right.
Predator has performed well on the Standard Listing segment of the
Official List on the Main Market of the London Stock Exchange during
2018. At year end our share price was 190% higher than our IPO price
without shareholder dilution, outperforming the AIM AllShare Chart
for 2018. I look forward to reporting on our progress in the
coming year.
Finally, I would like to thank our management team for their diligence
and hard work during the year. The commitment and support of my
fellow Board members is also very much appreciated.
Sarah Cope
Chairman
30 April 2019
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BUSINESS
REVIEW
OUR
GOVERNANCE
FINANCIAL
STATEMENTS
INVESTOR
INFORMATION
Strategy
The Company’s core strategy is to build a responsible fossil fuel
business focussed on assembling material equity positions in a
portfolio of assets combining existing gas discoveries and new gas
prospects with production opportunities where enhanced oil
production can be achieved by sequestrating significant quantities of
pollutant C02.
The Company seeks to develop and provide sources of fossil
fuelderived energy that contribute to reducing C02 emissions.
The Board believes that the mediumterm future for the fossil fuel
industry relies on gas as being the flexible energy source to replace
coal and oil as a fuel for power generation, thereby reducing C02
emissions as gas by comparison is less CO2 pollutant.
The Company’s business plan is being executed to minimise where
possible capital expenditures through:
–
–
prudent lowcost investment in existing mature oil fields for C02
EOR production revenues; and
by leveraging our gas experience and licence positions around
gasgathering infrastructures with third parties to validate our
exploration and appraisal assets and to provide potential for gas
focussed M & A transactions and farmouts to defray CAPEX for
subsequent drilling/development
Geological risk mitigation has been enacted through screening
suitable projects for the Company’s portfolio using management’s
extensive and relevant industry experience. Farmout transaction risk
is being addressed by improving development economics and
lowering commercial risk by assembling projects close to
infrastructure and in areas where there is a high demand for
indigenous gas to improve security of energy supply.
KEY ACTIVITIES 2018
l
Developed a portfolio of high impact oil and gas assets in the
Republic of Trinidad and Ireland.
l Negotiated Petroleum Agreement for onshore Morocco.
Established potential for production and cash flow from Trinidad
in the near and medium term.
l
Group structure established suitable for potential M & A and
farmout transactions to reflect the diversified portfolio of
nearterm production; exploration and appraisal, and exploration
in different geographic regions with different fiscal terms.
SHARE PRICE PERFORMANCE AND CAPITAL RAISING
At the time of listing in May 2018 the Company's share price was 2.8p,
but by the end of the year it had increased by 190% to 8.13p. On
Listing a placing of 46,428,600 shares at 2.8 p raised gross proceeds
of £1.3 million. The funds raised have been or will be used in support
of the Company's 2018/19 work programmes, primarily in Trinidad.
We are very grateful for the support shown to the Company in the
fundraising by our existing shareholders and of course subsequently
by our new shareholders who we welcome to the Company.
FINANCIAL RESULTS FOR 2018
l
Loss from operations of £0.792 million (2017: Loss of
£0.448 million).
l
Cash balance at period end of 2018 £0.973 million
(2017: £0.521 million).
l On 21 March 2018, 53,708,550 shares were issued at £0.01 per
share in a ‘share for share’ exchange to acquire 100% of Predator
Oil and Gas Ventures Limited.
l On 21 May 2018 a placing of 46,428,600 shares was effected at
£0.028 per share raising £1,300,001 gross (net after costs:
£1,034,369).
l On 24 May 2018, 2,231,248 warrants at an exercise price of
£0.028 were issued to brokers, Novum Securities Limited and
160,714 warrants at an exercise price of £0.028 were issued to
brokers, Optiva Securities Limited for placing services.
l On 24 May 2018, a total of 10,013,712 options at an exercise
price of £0.028 were issued to the four directors of the Company.
Vesting conditions apply to these options.
l
Disapplication of preemptive rights over 20,027,430 equity
securities granting authority of allotment thereof to the Directors.
CASH RESOURCES
Developed Pilot C02 EOR operational plan in Trinidad, put
together by the Company. with Heritage, FRAM, Environmental
Monitoring Authority, Ministry and Massy Gas Products which
potentially forms the template for all future onshore C02 EOR
operations.
l
Progressed offshore Ireland and Morocco to maintain exposure
to high potential, transformational gas acreage by initiating the
acquisition of assets at low cost prior to rising gas prices and
renewed concerns over security of gas supply.
Generated project economic models to support the strategy for
early monetisation in a success case of the Company’s strategic
focus on gas assets around existing mature infrastructure
offshore Ireland and onshore Morocco.
Equity funds raised on IPO ensured the Company was
fullyfunded for nearterm operations with the mediumterm
strategy of completing farmouts and M & A transactions being
progressed through technical studies to derisk future capital
requirements using the Company’s material licence positions and
proprietary knowledge to secure acceptable financial terms.
Cash resources for the Group at 31 December 2018 were
£0.973 million (2017: £0.521 million). During the year, the cash
in operations were £0.619 million
outflows used
(2017: £0.147 million) and the inflows from financing activities
were a net £1.075 million (2017: £nil). The Directors monitor the
cash position of the Group closely and seek to ensure that there
are sufficient funds within the business to allow the Group to
meet its commitments and continue the development of the
assets. The Directors are of the view that the outcome to Brexit
and the general current geopolitical climate, as a result, may
create conditions liable to weaken investor confidence due to
level of uncertainty amongst the general group of investors as a
whole. The Group has some protection in that it does not
operate in the UK and whilst the impact of Brexit remains
unresolved and whilst the impact cannot be predicted, the
Directors have a reasonable expectation that they should be able
to raise fresh funds.
l
The Directors closely monitor the development of the Group’s
assets and focus on ensuring that the regulatory requirements
of its licence interests are in good standing always and that any
expenditure on the assets is closely controlled and monitored.
Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2018 ❘ 3
l
l
l
l
l
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On 12 April, 2019 following the receipt of notice from Arato Global
Opportunities Limited for the conversion of £150,000 of the Loan
Note, issued on 15 February 2019, 1,966,888 New Ordinary Shares
were allotted and issued. Following the issue of such 1,966,888 New
Ordinary Shares, the Company's issued share capital was 102,104,038
shares of no par value, each with one vote per share (and no such
shares are held in treasury). The total number of voting rights was
therefore 102,104,038 following said issue of shares.
Cash balance of £0.922 million in the Group as at 30 April, 2019
annual report date.
CONCLUSION
2018 was a busy and very successful year for the Company and on
your behalf, I would like to thank the management team for their
commitment and enthusiasm, and I look forward with confidence to
an equally successful 2019.
Sarah Cope
Chairman
30 April 2019
Strategy (continued)
EVENTS SINCE YEAR END
Operational
NearTerm Production Projects
InnissTrinity C02 EOR Pilot Project, Onshore Trinidad
l
Approval received from Heritage Petroleum Ltd for the Pilot CO2
EOR Project conditional on EMA and Ministry permits and
consents
l Option to purchase FRAM extended to 31 December 2019
l
Exclusivity period for CO2 gas supply from Massy Gas Products
Ltd extended to 31 May 2019, subject to finalising C02 Gas
Sales Contract
l New CPR specific to C02 EOR operations commissioned
NearTerm Exploration Projects
Guercif Petroleum Agreement (“PA”) Onshore Morocco
l
l
l
l
l
Bank Guarantee arranged
Guercif PA formally signed on 19 March 2019
Rig selection discussions ongoing
Planning for Environmental Impact Assessment commenced
CPR for Guercif commissioned
Medium Term Exploration and Appraisal Projects
l
l
Corrib South Licensing Option 16/26 Slyne Basin, Atlantic
Margin Ireland
Farmout and M & A activity progressing whilst waiting on award
of Frontier Exploration Licence
Ram Head Licensing Option 16/30 Celtic Sea Basin, Ireland
l New CPR
incorporating new reservoir engineering data
commissioned
l
l
Potential synergies with the decommissioning of the Kinsale
facilities being investigated with other interested parties
Award of 12month extension to the Ram Head Licensing Option
16/30 received and accepted on 10 April 2019
Financial
On 15 February 2019 £1,500,000 was raised in the form of convertible
loan notes. The loan notes carry no coupon, are repayable at a
premium of 5% and a fee of 10% of the principal amount. The loan
notes are convertible at the election of the lender at 90% of the
volume weighted average share price. The term of the loan notes is
two years. The lender Arato Global Opportunities Limited, also agreed
to make available an additional £250,000 on the same terms. 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.
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FINANCIAL
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INVESTOR
INFORMATION
Group strategic report
for year ended 31 December 2018
STRATEGIC OBJECTIVES AND BUSINESS MODEL
The company has a clear and focussed strategy of building a
responsible fossil fuel business dependent upon assembling material
equity positions in a portfolio of assets combining existing gas
discoveries and new gas prospects with production opportunities
where enhanced oil production can be achieved by sequestrating
significant quantities of pollutant C02.
Trinidad, Morocco and Ireland have been identified as geographic
regions
the Company’s
strategic objectives.
requirements of
that meet
the
The Company’s business model is being executed to minimise where
possible capital expenditures through: prudent low cost investment
in existing mature oil fields for C02 EOR production revenues; and by
leveraging with third parties our gas experience and licence positions
around gasgathering infrastructures to validate our exploration and
appraisal assets and to provide potential for gasfocussed M & A
transactions and farmouts to defray CAPEX for subsequent
drilling/development.
Geological risk mitigation has been enacted through screening
suitable projects for the Company’s portfolio using management’s
extensive and relevant industry experience to generate only high
impact growth opportunities.
2018 was a very busy and impressive year of growth for the Company
in the short time since its Listing in pursuit of our strategic objectives.
Farmout transaction risk
improving
development economics and lowering commercial risk by assembling
projects close to infrastructure and in areas where there is a high
demand for indigenous gas to improve security of energy supply.
is being addressed by
BUSINESS OPERATIONS REVIEW AND FUTURE DEVELOPMENTS
As the Chairman has shown in her remarks, the past year has been a
year of real progress in developing the strategic objectives and
business model of the Company and its associated ethos of becoming
a responsible fossil fuel business.
Highlights
Summarised below for ease of reference are the key operational
highlights for 2018.
NearTerm Production Projects
InnissTrinity C02 EOR Pilot Project, Onshore Trinidad
l Well Participation Agreement (“WPA”) with FRAM Exploration
(Trinidad) Ltd (“FRAM”) amended to refocus on C02 EOR
operations
l Option to acquire FRAM extended to 30 June 2019 (31 December
2019 after year under review)
l
l
l
l
l
Heads of Agreement for C02 Gas Sales entered with the only in
country C02 supplier and based on a minimum daily delivery of
60 Mt C02
Exclusivity Period to negotiate C02 Gas Sales Agreement initially
to 31 August 2018 and extended to 30 November 2018
(extended further after year under review to 31 May 2019)
Independent CO2 EOR Reservoir Engineering Study completed
for the AT4 Block within the InnissTrinity Field
Pilot C02 injection volumes modelled and incorporated in C02
Gas Sales Agreement discussions and design of surface facilities
Production forecasts modelled and input into design of
surface facilities
l
l
l
l
l
l
l
Surface facilities designed in consultation with Massy Gas
Products and suppliers based in the United States
Site inspections carried out to identify suitable access roads and
ground conditions for C02 transport, storage and infield
injection and production facilities
Fourwell workover programme generated to prepare wells for
C02 EOR operations based on reservoir engineering results
Layout and operational plan for C02 EOR injection and
production wells established
Environmental Monitoring Programme established with the
Environmental Monitoring Authority (“EMA”) and collection of
“Base Line” samples begun
Health and Safety Plan for C02 EOR operations drafted
Submissions to the EMA and Heritage Petroleum Company Ltd.
(resulting from the restructuring of Petrotrin) made requesting
approvals to carry out the C02 EOR Pilot Project (Heritage
conditional consent given on 27 February 2019 after year
under review)
Near Term Exploration Projects
Guercif Petroleum Agreement (“PA”) Onshore Morocco
l
l
l
An Application for an exclusive licence for exploration (PA)
covering an area of 7,269 km² in the Guercif Basin was submitted
to the Office National des Hydrocarbures et des Mines
(“ONHYM”)
The PA terms and work programme covering Guercif Permits I,
II, II and IV were successfully negotiated and a Signing Ceremony
set for Q1 2019 (Petroleum Agreement signed after the year
under review on 19th March 2019)
Administrative and compliance procedures for financing and
putting in place a Bank Guarantee in favour of ONHYM
commenced
l
The Company was accepted as operator of the PA by ONHYM
l Material working interest of 75% negotiated
l
l
l
Discussions with potential drilling contractors initiated for
various different commercial and logistical scenarios
Reevaluation of geological and geophysical database carried out
Drillready target (“Moulouya Prospect”) for gas identified 9 km
from the Maghreb gas pipeline linking Morocco to Europe
Medium Term Appraisal and Exploration Projects
l
l
l
l
Ram Head Licensing Option 16/30 Celtic Sea Basin, Ireland
Application submitted to the Department of Communications,
Climate Action and Environment to extend Ram Head Licensing
Option for a further 12 months from 30 November 2018 (awarded
and accepted post year under review on 10th April 2019)
Independent Reservoir Engineering Study completed for the
Marathon gas discovery well 49/191 (1984)
Potential modelled to assess appraising and developing the gas
discovery via 10 vertical wells at an initial rate of 400 mm cfgpd
to recover approximately 1 TCF of gas over 11 years
Screening study successfully completed to evaluate the technical
feasibility and costeffectiveness of reentering and testing the
gas sands in the 49/191 well
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Group strategic report
for year ended 31 December 2018 (continued)
l
Exploratory discussions opened with interested parties regarding
the proposed decommissioning of the Kinsale gas facilities and
the strategic importance of maintaining a landfall for gas at Inch,
County Cork
Corrib South Licensing Option 16/26 Slyne Basin, Atlantic
Margin Ireland
l
l
l
l
Application for a Successor Authorisation (Frontier Exploration
Licence) submitted to the Department of Communications,
Climate Action and Environment
Scoping production forecasts generated consistent with future
spare capacity in the Corrib infrastructure
Preliminary 18/253 well location and well prognosis determined
Farmout and M & A activity initiated and progressed during 2018
stimulated by the announcement by Vermillion confirming the
completion of the sale of Shell’s 45% interest in the Corrib gas
field for approximately US$1.3 billion
Over the past 12 months we have agreed transactions in Trinidad that
have refocussed our operations to concentrate on potentially
uplifting our forecast production entitlements in the InnissTrinity
field through a Pilot C02 Enhanced Oil Recovery Project (“CO2 EOR”).
At the same time, we have extended both our option to acquire FRAM
Exploration Trinidad Ltd. (“FRAM”) and our exclusivity in terms of
Trinidad’s only source of C02 supply suitable for C02 EOR operations.
With the Columbus Energy acquisition of Steeldrum Oil Company Inc.,
owners of FRAM, which was first proposed on 13 July 2018, the
Company elected to relinquish its option to acquire Cory Moruga
Holdings Ltd. as the assets of that company no longer were
compatible with the Company’s core strategy of developing C02 EOR
opportunities in Trinidad.
In Ireland we have maintained, through our applications for a Frontier
Exploration Licence for Corrib South Licensing Option 16/26 and a
12month extension for Ram head Licensing Option 16/30, our high
impact gas exploration and appraisal acreage through a challenging
period dominated by the political debate over the fossil fuel industry
dictated by concerns regarding C02 emissions and climate change.
In Morocco we negotiated the Guercif Petroleum Agreement and
gained acceptance as an operator. We look forward to commencing
operational activity in Morocco during 2019.
The main operational activity during 2018 was the planning and
costing of and application for consents for the InnissTrinity Pilot C02
EOR project. The commercial and technical model and transaction
structure developed by the Company is unique to Trinidad and it is
this which distinguishes the Company from its peers in Trinidad. The
Pilot C02 EOR is the first C02 EOR project to be undertaken with the
Stateowned Heritage Petroleum Company Ltd. (“Heritage”), the new
entity resulting from the restructuring of Petrotrin. Heritage
continues to hold the vast majority of resources potentially suitable
for C02 EOR operations in Trinidad’s mature onshore producing fields.
A successful Pilot C02 EOR Project for the Company therefore could
potentially unlock further upside which, given the Company’s current
exclusivity over security of C02 supply, puts us in the pole position as
the implementer of C02 operations in Trinidad.
For this reason the Company’s management has made even greater
effort to ensure that its Monitoring, Verification and Accounting
(“MVA”) strategy for C02 EOR operations and its collection of “Base
Line” samples and data together with its Health and Safety and
Environment Plan were comprehensive before they were submitted
to Trinidad’s Environmental Monitoring Authority (“EMA”) and
Heritage for consents and environmental approvals to carry out the
proposed C02 EOR operations. We are very pleased indeed to confirm
that our submissions to the EMA and Heritage have been very
favourably received and studied. This is important for establishing trust
and confidence in the Company’s ability to deliver a technically sound,
environmentally aware and safe C02 EOR project. The template the
Company has established is a valuable asset to assist with expanding
our C02 EOR capabilities and footprint in Trinidad. The Company is the
pathfinder for what is a strategic national objective.
Our Project Schedule is on track to deliver first production in 2019.
However, we will not take shortcuts to strive for earlier production at
the expense of technical credibility, safety and the environment as this
would jeopardise our longer term C02 EOR opportunities in Trinidad.
The InnissTrinity field data were evaluated to determine which area
of the site was best suited to C02 EOR operations both from a
geological and logistical perspective.
The “AT4” Block was selected as the site for the first C02 EOR Pilot
based on the fact that the previous operator, Texaco, had not placed
a dedicated water injector in this compartment within the field and
that analysis of produced formation water indicated a potentially
isolated fault compartment of a manageable size suitable for efficient
C02 reservoir “fillup” and reservoir pressure restoration within a
commercially viable time framework.
Production history in the AT4 Block for producing wells confirmed
good lateral reservoir connectivity ideal for focussed C02 injection
and efficient reservoir sweep.
The main operational activity was the complex planning of the CO2
EOR project to mitigate against the risk of high water cuts resulting
from poor well conditions in old wells and the potential for a
secondary gas cap.
Workover of the initial four wells in the AT4 Block selected for C02
EOR operations was deemed to be necessary in preparation for C02
injection and a well intervention plan has been prepared.
An independent reservoir engineering study was commissioned to
develop models to determine volumes of C02 required for injection
and the equivalent potential enhanced oil production rates. These data
were essential for designing the surface facilities and the potential
volumes of C02 required to be delivered to the InnissTrinity field site
on a daily basis. This is turn impacts the CO2 Gas Sales contract
discussions. Optimising the CO2 supply is necessary to reduce
operating costs whilst continuing to maintain the level of enhanced oil
production predicted from the reservoir engineering studies.
Initially C02 is to be injected lower down the AT4 Block structure for
a short period into the AT5X and AT12 wells to target the Herrera #4
and #5 Sands in AT5X and the Herrera #1, #2 and #3 Sands in AT12.
Maximum C02 injection rates for this initial operation were estimated
to be up to 13 metric tonnes per day at an injection pressure scaled
back to up to 1500 psia to avoid fracturing the reservoir cap rocks and
placing undo stresses on the original borehole structure. This
operation is required to repressure the reservoirs near to their
original pressures to dissolve the secondary gas cap and to reduce
the potential water cut.
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Thereafter crestal wells in the AT4 structure, AT13 and AT4, will be
injected continuously with up to 40 metric tonnes per day of C02 at
up to similar injection pressures. AT5X and AT12 will cease to be
injectors and will be converted to production wells.
It is important to emphasise to our Shareholders that this is a Pilot
C02 EOR project and that there are no historical production data for
such operations to calibrate and validate the prePilot estimates of
enhanced production. Flexibility has to be maintained during the pilot
C02 EOR operations to vary injection and production parameters in
order to strive for optimum success.
On this technical basis surface facilities have been designed in
consultation with Massy Gas Products and suppliers based in the
United States of America.
Site inspections were carried out to identify suitable access roads and
ground conditions for C02 transport, storage and infield injection and
production equipment.
Successful implementation of the Operational Plan combined with
the independent reservoir engineering analysis was forecast to result
in a combined average production rate reaching 300 bopd from up to
5 Herrera sand intervals spread over two production wells based on
reaching the desired reservoir pressure maintenance targets.
Recent production from these wells has been less than 50 bopd.
Successful Pilot C02 EOR results are therefore forecast to increase
these production rates by up to 6fold if optimum producing
conditions are established as forecast.
Based on the independent reservoir engineering study recoverable
resources within the AT4 Block are forecast to be 859,000 barrels for
fullC02 EOR where all the existing wells contribute to enhanced oil
production. This represents a 12.3% recovery factor based on the
former operator Texaco’s estimate of original oil in place. The AT4
Block represents approximately 10% of the entire area of the Inniss
Trinity field.
Original oil in place estimates for the InnissTrinity field vary between
68 million barrels (Texaco 1973), 150 million barrels (Gaffney Cline
CPR for FRAM Exploration Trinidad Ltd (“FRAM”) 2011) and 89 million
barrels (SLR Consulting CPR for the Company 2018).
Assuming the AT4 Block Pilot C02 EOR forecast recovery factor of
12.3% were to be replicated throughout the field, then substantial
additional resources may exist to be further exploited. A new CPR
has been commissioned to independently quantify the potential
C02 EOR resources.
Project economics are being regularly updated to reflect changes in
West Texas Intermediate spot oil prices and the impact of 18%
Supplementary Petroleum Profit Tax that applies at a realised oil price
of greater than US$50/barrel. Utilising FRAM’s historical tax losses
allows us, after deduction of all operating costs and inclusive of C02
supply costs, to maintain an average netback of US$10/barrel for
guidance purposes for this earlystage C02 EOR project where there
is little initial potential for economies of scale.
Every effort is being made to keep capital investment costs as low as
possible. Currently the estimate has been reduced to a range of
US$500,000 to 600,000 by carefully ensuring that specifications for
site facilities and equipment are closely compatible with the technical
requirements. Similarly, the Company controls planning costs by using
the current experienced management team, who are also executive
Board directors, supplemented occasionally by experienced
consultants with a proven track record of delivering positive results.
Future developments are focussed on the InnissTrinity Pilot C02 EOR
project being a core operational activity for 2019 and being important
as a potential source of revenue for the Company. The project has for
that reason quite rightly occupied the majority of management time
during 2018. During 2019 the intention is to advance and accelerate
our Moroccan and Irish portfolio assets to a similar level of
preparedness in alignment with our strategy of developing a diverse
portfolio of nearterm production projects, nearterm exploration
drilling opportunities for gas and suitable for accelerated farmout and
mediumterm exploration and appraisal opportunities suitable for
farmout and M & A transactions centred around gas and
infrastructure ullage. In this respect we are very pleased to have
received and accepted post the year under review the award of a
12month extension to the Ram Head Licensing Option 16/30
offshore Ireland.
Finally details of the assets are included in the remaining pages of the
operational review. Financially the Company recorded a loss for the
financial year of £640,980 which includes an impairment of £32,171
for a nonperforming loan. Losses are attributable to the running and
administrative costs unavoidably associated with a public company
and to the operational activities required for Trinidad in preparation
for the execution of the Pilot C02 EOR project. Cash on the balance
sheet was £0.973 million and the Company had no debt as at
31 December 2018.
In summary 2018 was a very busy year and 2019 is shaping up to be
equally busy. The diligent preparation for the Pilot C02 EOR Project
was absolutely pivotal for the Company and its shareholders in terms
of striving to lay the correct foundations for positive cash flow from
operations during 2019 and building trust and understanding with
Heritage and the EMA against the backdrop of the restructuring of
Petrotrin. Heritage has provided clear third party validation for
Predator’s proposed Pilot C02 EOR operations by granting approval
post year end to proceed subject to EMA and Ministry permits and
consents, which are progressing.
Finally, I would like to thank all of our stakeholders and to
acknowledge the enormous efforts of the very small Predator team
and the guidance and support of the Board of Directors.
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Group strategic report
for year ended 31 December 2018 (continued)
GROUP STRUCTURE AND LIST OF ASSETS
(cid:3)
Trinidad Near Term Production
TRINIDAD
South America
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Well Participation Agreement – Pilot C02 Enhanced Oil Recovery
Project InnissTrinity Field
The producing InnissTrinity oil field is located onshore Trinidad in the
Southern Basin approximately 10 km southeast of the producing
BarrackporePenal oil field and approximately 75 km south of the
capital Port of Spain. The InnissTrinity Licence covers an area of
23.35 km² and currently contains 86 producing wells that are available
for the application of enhanced oil recovery techniques.
Through its wholly owned subsidiary Predator Oil & Gas Trinidad Ltd.,
(“POGTL”) the Company currently holds an interest in a Well
Participation Agreement (“WPA”) signed with FRAM Exploration
(Trinidad) Ltd. (“FRAM”), a whollyowned subsidiary of Steeldrum Oil
Company Inc. (“Steeldrum”), on 17th November 2017 and relating to
the producing InnissTrinity oil field (“InnissTrinity”).
InnissTrinity is licenced to Petrotrin, the State Oil Company. Following
the closure of Petrotrin’s oil refinery in Trinidad, Petrotrin was
restructured during the end of 2018 to create the new State Oil
Company Heritage Petroleum Company Ltd. (“Heritage”).
FRAM is operator of the InnissTrinity field under the terms of an
Incremental Production Services Contract with Heritage (“IPSC”). The
IPSC allows for FRAM to invest in InnissTrinity by satisfying certain
annual infill drilling commitments during the life of the IPSC. In return
FRAM receives 100% of the benefits of all incremental production
achieved through the investment relative to the base line production
established for the field prior to the investment being made. FRAM’s
net incremental production revenues are after deduction of operating
costs and certain royalties and taxes. Historical tax losses accumulated
within FRAM are available for offset against Petroleum Profit Tax on
operating profits.
Under the WPA P0GTL is entitled to a profit split from all incremental
production revenues generated from enhanced oil production under
the same terms of the IPSC through the Company’s investment in
InnissTrinity. However, in the specific case of the WPA, POGTL has
capped the operating costs at US$10/bbl. and will also benefit from
utilising FRAM’s historical tax losses. POGTL is not a partner in the
IPSC and therefore has no exposure to any of the FRAM commitments
relating to the IPSC. POGTL will receive 100% of all operating profits
InnissTrinity Field
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Group strategic report
for year ended 31 December 2018 (continued)
until payback of its investment and thereafter operating profits will
be split 50:50 between POGTL and FRAM. Under the WPA POGTL also
has an option to acquire certain assets of Steeldrum, including FRAM
for an agreed sum of US$4.2 million.
The completion of the sale of Steeldrum Oil Company Inc., owners of
FRAM, to Columbus Energy Plc was announced on 8 October 2018.
The WPA remains in full force following the sale of FRAM.
During 2018 the WPA with FRAM was amended to refocus on
Enhanced Oil Recovery operations using locallysourced injected
carbon dioxide (“CO2 EOR”). This technique is widely used in oil fields
in the United States, where an affordable source of C02 is available.
The option to acquire FRAM was extended to 30 June 2019 (and
subsequently, following the year currently under review, to
31 December 2019). An option to acquire Cory Moruga Holdings Ltd.,
another whollyowned subsidiary of Steeldrum, was dropped in order
to focus resources on the InnissTrinity asset.
To further the initiation of a Pilot C02 EOR project in InnissTrinity, a
Heads of Agreement for C02 Gas Sales was entered into with the only
incountry C02 supplier, Massy Gas Products Ltd. (“Massy”), based on
a minimum daily delivery of 60 Mt C02.
An Exclusivity Period to negotiate the C02 Gas Sales Agreement,
initially to 31 August 2018, was extended to 30 November 2018 and
has been subsequently extended further to 31 May 2019 following
the year currently under review.
History
In the past, InnissTrinity was discovered by Texaco in 1956 and
developed from 1958 onwards. Peak production reached 4,200 bopd
in 1958 and 134 wells were drilled. Initial well productivities were
typically from 82 to 462 bopd from the prolific Miocene Herrera
turbidite reservoirs, which are the host for a number of producing
fields in the area. Estimates of InnissTrinity STOIIP range from 68 to
150 million barrels.
Waterflood was initiated by Texaco in 1973 and the field eventually
passed to Petrotrin in the 1980’s.
One area of InnissTrinity designated the “AT4 Block”, and the only
part of the field not exclusively owned by Texaco but jointly owned
with Shell, was not subject to waterflood. The AT4 Block has been
chosen by the Company as the site of the first Pilot CO2 EOR project
based on its suitable geological characteristics and accessibility for
trial C02 EOR.
During the year an independent CO2 EOR Reservoir Engineering Study
was completed for the AT4 Block within the InnissTrinity Field. Based
on this pilot C02 injection volumes have been modelled and
incorporated in the C02 Gas Sales Agreement discussions with Massy.
Oil production forecasts derived from the above study have been
modelled and input into the design schematics for the CO2
EORdedicated surface production facilities. Pilot C02 EOR is forecast
from desk top studies to increase production by four to sixfold
compared to the current production from the two existing wells in
the AT4 Block chosen for the Pilot CO2 EOR Project. Target production
of 300 bopd is forecast by the end of H1 2019 if the pilot CO2 EOR
operations are successful.
The surface facilities have been designed in consultation with Massy,
based on their experiences of operating C02 facilities, and suppliers
based in the United States of America who supply specialist
equipment for C02 EOR field operations.
Site inspections have been carried out to identify suitable access
roads and ground conditions for 32 metric tonnes C02 transport
trucks (20 metric tonne liquid C02 loads), C02 storage tanks and
dedicated CO2 EOR infield injection and production facilities. Initially
2 to 3 truckload deliveries of pressurised liquid C02 per day to the
site from the C02 Plant approximately 40 km away are envisaged. The
C02 will then be discharged into injector wells at higher pressures
using specialist C02 pumps.
Site meeting with Massy Gas Products Ltd
20MT Capacity CO2 Delivery Trucks
A fourwell workover programme has been generated to prepare
wells for C02 EOR operations based on the Company’s reservoir
engineering results.
The layout of injection wells and the operational plan for C02 EOR
injection and oil production wells has been devised.
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An Environmental Monitoring Programme has been established with
the Environmental Monitoring Authority (“EMA”) and collection of
“Base Line” samples has begun.
The Health and Safety Plan for C02 EOR operations has been drafted
and will be updated after further consultations with the EMA
and Massy.
With the preliminary planning work completed submissions to the
EMA and Heritage were made before the end of the year under
review to request approvals and consents to carry out the C02 EOR
Pilot operations in Inniss Trinity.
Forward Programme
During 2019 a new Competent Person’s Report will be commissioned
to address specifically the C02 EOR resources potential for Inniss
Trinity incorporating the studies completed during 2018.
Progress on environmental and regulatory consents and approvals
will continue to be made following the conditional consent given by
Heritage at the beginning of 2019, the licence holder, for CO2 EOR
operations.
Workover well operations will commence in 2019 to prepare up to
four wells for CO2 EOR operations (two CO2 injectors and two oil
producers).
Once workovers are completed and portable surface facilities (C02
injection pumps and CO2 storage tanks) are installed and tested, CO2
injection will commence to repressurise several or all of the
oilproducing reservoirs in the AT4 Block. Thereafter oil production
is anticipated to commence in combination with continuous
CO2 injection.
By midyear the initial results of the pilot CO2 EOR operations can be
assessed to determine the potential for expanding the CO2 EOR
operations to other geologically suitable parts of the InnissTrinity
field and potentially to other fields onshore Trinidad.
Morocco Near Term Exploration
Europe
Morocco
Mediterranean
Sea
Middle
East
Africa
Guercif Licence
Morocco
Guercif Petroleum Agreement – Moulouya Prospect
Through its wholly owned subsidiary Gas Ventures Ltd., the Company
will hold a 75% working interest in and will be operator of the Guercif
Petroleum Agreement (“PA”). ONHYM, the State oil company, will
hold 25% and is carried through exploration but funds its prorata
share of all costs upon a Declaration of Commerciality.
The Guercif PA, comprising the Guercif Permits I, II, III and IV, is
located in the Guercif Basin and covers 7,269 km², c. 250 km due east
of and on trend with the Rharb Basin where shallow commercial gas
production has been established by SDX Energy Plc for several years.
Guercif also lies approximately 180 km due northwest of Tendrara
where deep discovered gas is currently being appraised and
potentially developed by Sound Energy Plc.
The Licence is for 8 years and is split into an Initial Period of
30 months; a First Extension Period of 36 months duration; and a
Second Extension Period also of 30 months. After each Licence Period
there is an opportunity to withdraw from the Licence without
entering the next Licence Period.
In the Initial Period the work programme comprises 250 kilometres
of 2D seismic reprocessing and AVO analysis and the drilling of one
well to a minimum depth of 2,000 metres. Desktop geological and
gas marketing studies will also be carried out. Seismic reprocessing
costs are estimated to be US$150,000 and well costs US$2,000,000.
The fiscal terms in Morocco are restricted to a 5% State royalty for
gas, applicable after the first 10.6 BCF of net production to the
operator, and corporation tax charged at 31%. However, there is a 10
year “holiday” before corporation tax will be charged and any unused
tax losses can be offset against the tax due. There are no signature
bonuses but production bonuses in the form of cash payments exist
with a maximum oneoff payment of US$5,000,000 on production
greater than 30,000 BOE/day. A discovery bonus of US$1,000,000 is
also payable.
Gas prices in Morocco are currently higher than UK National
Balancing Point (NPB) prices for domestic delivery. Any future gas
exports will be priced at NPB prices.
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Group strategic report
for year ended 31 December 2018 (continued)
History
Guercif has been very lightly explored with only 4 deep exploration
wells drilled by Elf in 1972 (GRF1), Phillips in 1979 (TAF1X), ONAREP
(the forerunner of ONHYM) in 1985 and 1986 (MSD1 and KDH1) and
2 shallow stratigraphic wells drilled by BRPM for coal exploration in
the 1950’s.
TransAtlantic reentered, logged and tested the MSD1 well, originally
drilled in 1985, in 2008 but the logging and testing failed to establish
the presence of hydrocarbons in the Jurassic.
The seismic inventory includes 3,291 kilometres of 2D seismic data
acquired between 1968 and 2003 (including a new 300kilometre
ONAREP 2D seismic survey acquired in 2003, which were reprocessed
in 2006 by TransAtlantic when PreStack Time Migration was applied
for the first time to the entire seismic inventory. TransAtlantic also
acquired an aero magnetic and aero gravity survey in 2006 comprising
10,000 line kilometres.
Historical exploration focus was entirely on the Jurassic and was
completed before the shift in focus took place that resulted in shallow
(Tertiary) gas production in the Rharb Basin and successful deep
(Triassic) gas appraisal drilling at Tendrara.
In this context therefore Guercif has never been explored for these
more recent targets and this is the new focus for Predator Gas
Ventures Ltd. (“PGV”).
Current Prospectivity
The Company has reevaluated the existing reprocessed 2D seismic
database and well data and has identified the Moulouya Prospect as
being drillready. The Moulouya Prospect covers at least 40 km² and
is supported by multiple seismic amplitude anomalies.
An offset well, GRF1 drilled in 1972 before the acquisition of the
2003 ONAREP seismic, less than 1.5 kilometres to the southeast of
the edge of the seismic amplitude anomaly, had dry gas shows in
some high quality Tortonian (Miocene) reservoir sands. The same
reservoir sands are exposed at the margin of the Guercif Basin where
they are interpreted as deep water turbidites and form thick, stacked
multiple sand bodies.
The gas potential of the area is further enhanced by the recognition
of TransAtlantic of up to 128 feet of untested gas pay at the base of
the Miocene in GRF1 with average porosities of 20% and average gas
saturations of 20%. Two microseepage surveys carried out for
TransAtlantic by GeoMicrobial Technologies in 2006 and 2007 also
identified dry gas around the GRF1 well in soil samples.
The Company believes that the Moulouya Prospect therefore
represents a low risk proven gas play that is a potentially play
opening, opportunity for shallow gas in multiple, high quality
reservoirs at depths in the range 2,000 to 5,000 feet. Significantly the
potential for a very large accumulation exists due to the lack of
compartmentalisation of the mapped seismic anomaly – unlike the
situation in the producing Rharb Basin where the structures are small
but with a very high success rate for finding gas.
Commercial Rationale
The Moulouya Prospect lies just 9 kilometres from the Maghreb gas
pipeline where significant spare capacity exists for the transport of
gas either for domestic use or for export to the European Union.
Approximately 90% of Morocco’s hydrocarbons are imported from
Algeria but in 2021 ownership of the Maghreb Pipeline will pass
to Morocco.
Small volumes of gas can be utilised in the domestic gas market but
larger volumes require gastopower and export options. The
potential to get gas to market with ease exists and the Government
is supportive and aligned commercially and strategically with the
other licence partners and has a desire to keep gas incountry.
The reservoirs potentially developed in the Moulouya Prospect have
the potential to generate good well deliverability without any
stimulation whatsoever based on the production history for similar
shallow reservoirs in the Rharb Basin. Field production rates for a
successful field development are expected to be high and therefore
production costs per unit volume produced are anticipated to be
correspondingly low. Capital development costs are expected to be
very low given the shallow drilling depths, high recoveries per well
based on potentially contiguous reservoir sands (thereby reducing
the number of development wells), anticipated quality of the dry gas
(reducing complex processing requirements), and proximity to the
Maghreb Pipeline.
The Company believes that a successful gas discovery well potentially
creates the opportunity for a fasttracked, uncomplicated gas
development.
Forward Programme
The Company believes that the Moulouya Prospect is drillready and
warrants a fasttracked approach to drilling in order to capitalise upon
its attractive valuation metrics and the ability to accelerate a gas
development in the case of a gas discovery to exploit the current
demand for gas in Morocco and, in a wider context, Europe.
2019 will therefore be spent on desktop studies by management to
develop and finalise the drilling programme and to carry out an
Environmental Impact Study. Discussions with rig owners and
potential drilling partners (for a multiwell programme) will progress
further with the objective of seeking a suitable rig to drill the
Moulouya Prospect in 2019 subject to the availability of longlead
items, such as well heads, and costeffective rigsharing to reduce
mobilisation and demobilisation costs. The well is not anticipated at
present to take longer than 15 – 20 days to drill, subject to finalising
the drilling programme.
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Ireland Medium Term Appraisal and Exploration
Appraisal: North Celtic Sea Offshore Ireland
NORTHERN
IRELAND
REPUBLIC OF
IRELAND
Predator Licensing
Option 16/30
Kinsale Gas Field
Petronas
LO 16/30 – Ram Head Gas Project
Through its wholly owned subsidiary Predator Oil and Gas Ventures
Ltd., the Company currently holds a 50% working interest in and is
operator of L0 16/30 which contains the 49/191 and Ardmore 49/14
1 gas discoveries made by Marathon Oil Ireland Ltd in 1984 and 1975
but never subsequently appraised.
History
In the past, under the operatorship of Marathon, three wells were
drilled within the Licensing Option area. Of these 2 wells successfully
logged hydrocarbonbearing reservoirs and one, 49/141, was tested
for gas and flowed 8 mm cfgpd from several different horizons in the
Lower Cretaceous.
LO 16/30 is located in the North Celtic Sea Basin and covers 799 km²,
c. 75 km offshore from the current landfall of gas from the Kinsale
field at Inch, County Cork. It is situated in approximately 100 m of
water depth. The Licensing Option is located approximately 40 km
east of the giant Petronasoperated Kinsale Head Gas Field, for which
an application to decommission has been submitted to the regulatory
authorities for approval.
During 2018, following the award of a twoyear Licensing Option to
the Company and its partner Theseus Ltd., the Company carried out
a number of studies to redetermine the quality of the gas reservoirs
in the original discovery well 49/191; to complete an initial reservoir
engineering study and scoping development plan; and to assess the
technical feasibility of reentering the 49/191 well to test the
previously
logged gasbearing Jurassic reservoirs to validate
production forecasts determined from the desk top studies.
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for year ended 31 December 2018 (continued)
Prior to the completion of reservoir engineering studies, a Competent
Person’s Report by SLR Consulting commissioned by the Company in
2018 had indicated Net Prospective recoverable Gas Resources in the
Jurassic in the range of 118 to 1,370 BCF with a 12% Chance
of Success.
The programme of 2018 studies was designed to address reservoir
risk in terms of gas deliverability and also to determine a cost
effective way to flow test the discovered gas without drilling an
expensive appraisal well.
Exploration: Atlantic Margin Offshore Ireland
Reservoir studies based on new NuTech log analysis technology have
identified 64 feet of previously unrecognised good quality gas pay in
49/191. Based on these data the firstever independent reservoir
engineering study was commissioned by the Company, which has
indicated potential initial well productivities of 40 mm cfgpd and an
initial potential field development profile of 400 mm cfgpd from a
minimum of 10 vertical wells. Desk top projections indicate
approximately 1 TCF of gross gas could be recovered in 11 years. The
scoping development concept requires gas to be landed at the
existing Inch brown field site and therefore the Company has made a
submission to the regulatory authorities during 2018 stressing the
importance of
Inch site, after
decommissioning of the Kinsale Gas Field facilities, for future
potential gas developments.
the continuance of
the
Forward Programme
On completion of the above work a new Competent Person’s Report
is being commissioned, the results of which will form the catalyst to
progress farmout and M & A transactions with infrastructure owners’
offshore Ireland seeking additional gas supply to fill growing
infrastructure ullage.
L0 16/30 may be converted into an Exploration Licence upon expiry
of a 12month extension to the current Licensing Option term
following the Company’s successful application for a Successor
Authorisation. The extension to the current Licensing Option term
expires on the 30 November 2019.
The 2018 Competent Person’s Report also indicated unrisked Net
Contingent recoverable Oil Resources at the Base of the Cretaceous
in the range of 32 to 247 million barrels.
New NuTech log analysis over this interval shows 46 feet of good
quality net oil pay that was tested without success by Marathon in
1984 due to formation damage. A 32 API oil skim was recovered from
the Drill Stem Test tool.
Whilst developing conventional oil is not in the business strategy of
the Company, the Company is aware that an extensive appraisal
programme is planned for the analogous Barryroe oil discovery in
2019 by the operator Providence Resources Plc and its farminee APEC
Energy Enterprise Ltd., a privately owned Chinese company. A
successful outcome for the appraisal programme may create
additional M & A possibilities centred on the discovered light oil at
Ram Head.
LO 16/26 – Corrib South Gas Exploration
Through its wholly owned subsidiary Predator Oil and Gas Ventures
Ltd., the Company currently holds a 50% working interest in and is
operator of L0 16/26 which contains the 18/252 well drilled by
Enterprise Oil in 1999.
LO 16/26 is located in the Slyne Basin and covers 302 km², c. 70 km
offshore from the current landfall of gas from the Corrib field in
County Mayo. It is situated in approximately 335 m of water depth.
The Licensing Option is adjoining and to the south of the Vermillion
operated Corrib Gas Field, which is currently Ireland’s largest
producing gas field.
History
In the past, under the operatorship of Enterprise Oil, 640 km² of 3D
seismic were acquired in 1997 which resulted in the identification of
the Corrib Gas Field structure and two structures to the south within
the Licensing Option area. One well, 18/252, was drilled in 1999
within the Licensing Option area on the structure closest to the Corrib
Gas Field, after the first Corrib discovery well was drilled. No logged
hydrocarbonbearing reservoirs were penetrated but the Corrib Field
gas reservoir was proven to be present in the well. The second
structure, the “Deel Prospect” and renamed “Corrib South” by the
Company, was never drilled and was eventually relinquished by
Enterprise’s successor Shell prior to the approval of the Corrib Gas
Field Plan of Development by the regulatory authorities.
During 2017 and 2018, following the award of a twoyear Licensing
Option to the Company and its partner Theseus Ltd. in the 2015
Atlantic Margin Licensing Round, the Company carried out a re
assessment of the Corrib South Prospect based on integrating
regional geological and geophysical data and new information from
the producing Corrib gas field. The Company concluded that the
Corrib South Prospect was potentially larger than previously
considered and extended beyond the limit of the current 1997 3D
seismic coverage.
Based on this reinterpretation of the Corrib South Prospect, SLR
Consulting were commissioned by the Company in 2018 to produce
a Competent Person’s Report.
indicated Net Prospective
recoverable Gas Resources in the Triassic reservoir (the Corrib Gas
Field reservoir) to be in the range of 92.3 to 452.4 BCF with a 30%
Chance of Success.
It
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Forward Programme
The Company noted the announcement in the last quarter of 2018
by the new incoming operator of the Corrib Gas Field, Vermilion,
confirming the completion of the sale of Shell’s 45% interest in Corrib
for approximately $1.3 billion to Nephin Energy Holdings Limited and
the transfer of operatorship to Vermilion. The Company further noted
comments attributed to Vermilion regarding outline plans to expand
the Corrib project and in addition that it would look to do deals with
other oil and gas companies exploring in the waters around Corrib,
either by allowing those companies to use Corrib Infrastructure to
transport gas, or by buying stakes in those companies.
The announcement lends substance to the Company’s business
model in relation to focussing solely on gas in Ireland and only in
those areas where gas production has already established offshore
and onshore infrastructure.
It is a potential catalyst for farmout and M & A transactions with
infrastructure owners’ offshore Ireland seeking additional assets to
expand their existing projects.
An application to convert L0 16/26 into a Frontier Exploration Licence
was made during 2018 upon.
Regulatory Environment
Ireland remains an extremely challenging regulatory environment and
concerns over Brexit in 2019 may provide further uncertainty in the
ability of operators to efficiently access oil field services, vessels and
rigs in a costeffective manner out of the UK.
The Company therefore maintains a flexible strategy towards its
assets offshore Ireland in the context of minimising financial exposure
through generating farmout and M and A activity.
Information on the Company and its oil and gas portfolio is available
at www.predatoroilandgas.com
KEY PERFORMANCE INDICATORS
At this stage in the Group’s development, the Directors do not
consider that standard industry key performance indicators are
relevant. The Group currently has no oil and gas production and
therefore has no income. The Group is not expected to report profits
until it develops its exploration and development projects. The main
KPI is therefore considered to be the conservation of cash whilst they
continue to obtain the appropriate licences to undertake appropriate
exploration activity as described as follows:
l
l
l
l
l
Expanding total prospective, probable and proven resources and
reserves. These measure our ability to discover resources and
develop reserves,
including through the acquisition of
new licences.
Develop oil and gas projects which will result in positive cash flow
within a short time horizon. This measures our ability to assist
the internal funding of projects with longer time horizons.
Enter into value adding joint venture and farmout transactions.
This measures our ability to mitigate risk, share capital
expenditure with partners and assist in meeting licence
commitments.
Secure funding that minimises shareholder dilution, cognisant
of a judicious level of debt funding. This measures our ability to
enhance shareholder value whilst securing the means to grow
the business without unduly increasing risk.
The rate of utilisation of the Group’s cash resources. This
measures our ability to plan expenditure and conserve cash to
ensure a going concern.
PRINCIPAL RISKS AND UNCERTAINTIES
The Board has identified the principal strategic and operational risks
as including:
Exploration industry risks
Oil and gas drilling is a speculative activity and involves numerous
risks and substantial and uncertain costs that could adversely affect
the Group.
Mitigation: Where possible the Board aims to build a diversified
portfolio of assets so that an adverse outcome is mitigated by the
prospects of favourable outcomes
Oil and gas exploration and development activities are dependent on
the availability of skilled personnel, drilling and related equipment in
the particular areas where such activities will be conducted. Demand
for such personnel or equipment, or access restrictions may affect
the availability to the Group.
Mitigation: Management through many years of experience has a
network of independent contractors with skilled personnel and
equipment which it can access.
Oil and gas prices are highly volatile, and lower oil and gas prices will
negatively affect the Group’s financial position, capital expenditures
and results of operations.
Mitigation: By balancing projects with near cash inflow prospects
with projects that require long term funding the risk is mitigated.
Planning includes simulation of down side risk scenarios.
Reserve and resource data and estimated discounted future net cash
flows are estimates based on assumptions that may be inaccurate
and are based on existing economic and operating conditions that
may change in the future.
Mitigation: The Group has considerable experience in project
evaluation. It may resort from time to time to independent expert
consultants to verify assumptions
The Group is dependent on the successful development of its oil and
gas assets.
Mitigation: The Group has diversified its profile away from regular oil
and gas exploration by undertaking a CO2 EOR project.
Political risks
All of the Group’s operations are located in a foreign jurisdiction. As
a result, the Group is subject to political, economic and other
uncertainties, including but not limited to, changes in policies or the
personnel administering
terrorism, nationalisation,
them,
appropriation of property without fair compensation, cancellation or
modification of contract rights, foreign exchange restrictions,
currency fluctuations, export quotas, royalty and tax increases and
other risks arising out of foreign governmental sovereignty over the
areas in which these operations are conducted, as well as risks of loss
due to civil strife, acts of war, guerrilla activities and insurrection.
Mitigation: The Group only conducts operations in those countries
with a stable political environment and which have established
acceptable oil and gas codes. The Company adheres to all local laws
and pays heed to local customs.
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Group strategic report
for year ended 31 December 2018 (continued)
Financial and liquidity risks
The Group’s business involves significant capital expenditure and
given the current liquidity position of the Group as at the date of this
report the Group will require additional funding to meet its planned
work programme. There is no guarantee that such additional funding
will be available on acceptable terms at the relevant time.
Mitigation: Management has demonstrated an ability to raise funds.
Through timely and regular cash flow projections proactive action is
capable of being taken to preempt cash deficits. Such actions may
include farmouts and loan and equity fund raises
Insurance risks
Offshore operations are subject to various operating and other
casualty risks that could result in liability exposure.
Mitigation: The Group comprehensively surveys its exposure to these
kinds of risks and considers taking either an appropriate level of
insurance cover or selfinsuring where judicious.
The Group may not have enough insurance to cover all of its risks.
Mitigation: A judicious quantum of selfinsurance may need to be
resorted to in these circumstances
Instability in the global financial system may have impacts on the
Group’s liquidity and financial condition that currently cannot be
predicted.
COMPOSITION OF THE BOARD
A full analysis of the Board, its function, composition and policies, is
included in the Remuneration Report.
CAPITAL STRUCTURE
The Company’s capital consists of ordinary shares which rank pari
passu in all respects which are traded on the Standard segment of
the Main Market of the London Stock Exchange. There are no
restrictions on the transfer of securities in the Company or restrictions
on voting rights and none of the Company’s shares are owned or
controlled by employee share schemes. There are no arrangements
in place between shareholders that are known to the Company that
may restrict voting rights, restrict the transfer of securities, result in
the appointment or replacement of Directors amend the Company’s
articles of association or restrict the powers of the Company’s
Directors, including in relation to the issuing or buying back by the
Company of its shares or any significant agreements to which the
Company is a party that take effect after or terminate upon, a change
of control of the Company following a takeover bid or arrangements
between the Company and its Directors or employees providing for
compensation for loss of office or employment (whether through
resignation, purported redundancy or otherwise) that may occur
because of a takeover bid.
ENVIRONMENTAL AND OTHER REGULATORY REQUIREMENTS
The event of a breach of any environmental or regulatory
requirements may give rise to reputational, financial or other
sanctions against the Company, and therefore the Board considers
these risks seriously and designs, maintains and reviews its policies
and processes so as to mitigate or avoid these risks.
Paul Griffiths
Chief Executive Officer
30 April 2019
Mitigation: Judicious assumption of new licence commitments;
careful financial planning, currency hedging and economic evaluation
of opportunities with simulation of risks mitigate against these risks.
The Directors also maintain tight budgetry and financial controls to
ensure cash is spent is spent in the most efficient manner.
Foreign exchange risks
The Group operates internationally and is exposed to foreign
exchange risk arising from various currency exposures, primarily with
respect to the Euro and US Dollar.
Risks to exchange movements are mitigated by minimising the
amount of funds held overseas. All treasury matters are handled
centrally in Jersey. All requests for funds from overseas operations
are reviewed and authorised by Board members. The Group
endeavours to reduce its exposure to foreign currencies by holding
cash balances in the currency of intended expenditure and recognises
the profits and losses resulting from currency fluctuations as and
when they arise.
As the Group may undertake some exploration activity along the Irish
Sea under the terms of the agreement with the Irish authorities, the
Directors currently anticipate that the impact on the business of the
UK’s exit from the European Union will be limited to the effects of
potential increased foreign exchange fluctuations. As a result of these
fluctuations, it is expected that the reported results of the Group may
decline in the short to mediumterm. However, the Directors do not
expect there to be any significant lasting impact.
Liquidity risks
The Group’s liquidity risk is considered to be insignificant.
The Group does not enter into binding commitments for exploration
expenditure. Cash forecasts are updated continuously. The financial
exposure of the Group will reduce as it is the intention of the directors
to partner with third parties in exploration joint ventures.
Environmental risks
The Group is subject to various environmental risks and governmental
regulations and future regulations may be more stringent.
Mitigation: The Group is aware of these risks before it undertakes
licence commitments and periodically reevaluates these risks.
Climate change and climate change legislation and regulatory
initiatives could result in increased operating costs and decreased
demand for oil and gas.
Mitigation: The Group’s strategy is to diversify into greener types of
energy. The current profile of the Group is weighted towards gas
exploration, a more climate friendly energy source.
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BUSINESS
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FINANCIAL
STATEMENTS
INVESTOR
INFORMATION
Report of the directors
for the year ended 31 December 2018
The Directors present their report together with the audited financial statements for the year ended 31 December 2018.
The Company’s Ordinary Shares were admitted on 24 May 2018 to a listing on the London Stock Exchange on the Official List pursuant to
Chapters 14 of the Listing Rules, which sets out the requirements for Standard Listings.
RESULTS AND DIVIDENDS
The Directors do not recommend the payment of a dividend (2017: nil).
FINANCIAL INSTRUMENTS
Details of the use of financial instruments by the Company and its subsidiary undertakings are contained in note 12 of the financial statements.
DIRECTORS
The Directors who served during the year and up to the date hereof were as follows:
Paul Griffiths
Ron Pilbeam
Sarah Cope
Steve Staley
Date of Appointment
31 December 2017
31 December 2017
24 May 2018
24 May 2018
DIRECTORS THIRD PARTY INDEMNITY PROVISIONS
The Group maintained during the period and to the date of approval of the financial statements, indemnity insurance for its Directors and
Officers against liability in respect of proceedings brought by third parties.
GOING CONCERN
Notwithstanding the loss incurred during the year under review, the Directors have a reasonable expectation that the Group will be able to
raise funds to provide adequate resources to continue operations for the foreseeable future. The Directors do not believe that Brexit will
adversely influence the Group’s access to fresh capital. The Group is likely to need to raise fresh funds in the course of the next 12 months if
major spending commitments on newly awarded licences arise. In the unlikely event that the Group will not be able to raise the required
funds for the foreseeable future Directors will institute a programme of cuts to directors’ and consultant’s remuneration. The Directors having
made due and careful enquiry, are of the opinion that the Group has adequate working capital to execute its operations over the next 12 months
given that current spending commitments will prevail. The Group will therefore continue to adopt the going concern basis in preparing the
Annual Report and Financial Statements. Further details on their assumptions and their conclusion thereon are included in the statement on
going concern included in page 35 under accounting policies
SUBSTANTIAL SHAREHOLDERS
As at 31 December 2018, the total number of issued ordinary shares with voting rights in the Company was 100,137,150. Details of the
Company’s capital structure and voting rights are set out in note 13 to the financial statements. The Company has been notified of the following
interests of 3 per cent or more in its issued share capital as at 23 April 2019.
Entity name
Paul Griffiths
Ron Pilbeam
Hargreaves Lansdown (Nominees) Ltd
Pershing Nominees Ltd
The Bank of New York (Nominees) Ltd
Interactive Investor Services Nominees
Total
% holding
Ordinary Shares held of the Company
44,773,293
7,273,294
13,743,204
8,229,585
7,780,328
4,063,741
85,863,445
43.9%
7.1%
13.5%
8.1%
7.6%
4.0%
84.2%
FINANCIAL INSTRUMENT
Details of the use of financial instruments by the Group are contained in note 12 of the financial statements.
GREENHOUSE GAS EMISSIONS
The Group has as yet minimal greenhouse gas emissions to report from the operations of the Company and its subsidiaries and does not have
responsibility for any other emission producing sources under the Companies Act 2006 (Strategic Report and Directors’ Report)
Regulations 2014.
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to
prepare the financial statements in accordance with International Financial Reporting Standards (IFRS’s) as adopted by the EU and
applicable law.
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Report of the directors
for the year ended 31 December 2018 (continued)
Under Company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of
the state of affairs of the Group and the Company and of the profit or loss of the Group for that period. In preparing these financial statements,
the Directors are required to:
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select suitable accounting policies and then apply them consistently;
l make judgements and accounting estimates that are reasonable and prudent;
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state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the
financial statements;
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prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Group’s transactions and
disclose with reasonable accuracy at any time the financial position of the Group and enable them to ensure that the financial statements in
accordance with Section 103 of the Companies (Jersey) Law 1991.
They are also responsible for safeguarding the assets of the Group and hence for taking reasonable steps for the prevention and detection of
fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other information included in the
Annual Report and Financial Statements is prepared in accordance with applicable law in the United Kingdom.
The maintenance and integrity of the Group’s website is the responsibility of the Directors; the work carried out by the auditors does not
involve the consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred in
the accounts since they were initially presented on the website.
Legislation in Jersey governing the preparation and dissemination of the accounts and the other information included in annual reports may
differ from legislation in other jurisdictions.
FUTURE DEVELOPMENTS
The Group’s plans for future developments are more fully set down in the Strategic Report, on pages 3 and 5.
STATEMENT AS TO DISCLOSURE OF INFORMATION TO THE AUDITOR
So far as the Directors are aware, there is no relevant audit information of which the Company’s auditor are unaware, and each Director has
taken all the steps that he ought to have taken as a Director in order to make himself aware of any relevant audit information and to establish
that the Company’s auditor is aware of that information.
We confirm to the best of our knowledge:
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The financial statements, prepared in accordance with the relevant financial reporting framework, give a true and fair view of the assets,
liabilities, financial position and profit or loss of the Company and the undertakings included in the consolidation taken as whole;
The strategic report includes a fair review of the development and performance of the business and the position of the Company and the
undertakings included in the consolidation taken as a whole, together with a description of the principal risks and uncertainties that they
face; and
The annual report and financial statements, taken as a whole, are fair, balanced and understandable and provide the information necessary
for shareholders to assess the Company’s position and performance, business model and strategy.
AUDITORS
The Company’s auditor, PKF Littlejohn LLP, was initially appointed on 4 December 2017 and it is proposed by the Board that they be reappointed
as auditors at the forthcoming AGM. The auditors have expressed their willingness to continue in office.
EVENTS AFTER THE REPORTING DATE
These are more fully disclosed in Note 20.
By order of the Board
Paul Griffiths
Chief Executive Officer
30 April 2019
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FINANCIAL
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INVESTOR
INFORMATION
Board of directors
for the year ended 31 December 2018
Sarah Cope (nee Wharry), NonExecutive Chairman (age 47)
Mrs. Cope has 20 years investment banking experience working as an advisor to small and midcap companies
across numerous industry sectors, advising them at Board level on their capital raising requirements, regulatory
compliance, corporate governance, growth strategy, acquisitions and disposals. Mrs. Cope has worked on
numerous IPOs, specialised in advising companies in the Oil and Gas sector and was cohead of energy for Cantor
Fitzgerald Europe until January 2018. Mrs. Cope has previously worked at finnCap Limited as a director of
corporate finance heading up the oil and gas sector, RBC Capital Markets as a director in the equity capital markets
team and Seymour Pierce Limited as a director of corporate finance. Mrs. Cope is also a non executive director
of Anglo African Oil & Gas PLC and Mayan Energy Limited.
Paul Griffiths, Chief Executive Officer (age 65)
Mr Griffiths has 40 years’ oil and gas industry experience, including with the Libyan National Oil Corporation and
Gulf Oil, and as CEO of both Island Oil & Gas plc and Fastnet Oil and Gas plc. During this time Mr. Griffiths has
managed 2D and 3D seismic data acquisition and processing projects onshore and offshore; drilling and testing
programmes, both onshore and offshore; and geological and reservoir simulation desk top studies. Mr. Griffiths
is also experienced in business development in respect of licence acquisitions, farmins, farm outs, gas marketing
and gas sales contracts and negotiations with government agencies. In 2006, Mr. Griffiths put together and led
the team that drilled the first successful exploration well in offshore southeast Ireland in 16 years. In 2008 he
put together and led the team that generated and submitted the plan of development for the Amstel Field in
the Netherlands and in 2014 he put together and led the team that carried out the Tendrara gas field re
evaluation prior to a successful appraisal drilling programme by Sound Energy. He is a geology graduate of the
Royal School of Mines (London) and an Associate of the Royal School of Mines.
Ronald Pilbeam, Project Development Director (age 72)
Mr Pilbeam has over 40 years’ technical and commercial experience in energyrelated E&P activities. During this
time Mr Pilbeam has worked with Parsons Brinckerhoff in the United States, the Caribbean and Brazil, then with
United Technologies in Brazil, before becoming associated with Unigas International both in Brazil and South
Africa. Mr Pilbeam has undertaken the management of a number of projects in oil & gas shipping, gastoliquids,
offshore LNG, onshore petrochemical plant, gas storage, and gas handling, pipelines and terminals. In so doing,
Mr Pilbeam has also amassed considerable international experience in working with government, industry and
commerce, to achieve often challenging objectives. A British national, Mr Pilbeam is an engineering graduate of
King’s College (London), a licensed Professional Engineer (Canada) and an Associate Member of the Institution
of Civil Engineers (UK).
Dr George Henry Stephen Staley, NonExecutive Director (age 59)
Dr Staley has 35 years wideranging management, technical and commercial experience in the international oil,
gas and power sectors. He is currently the CEO, and a director and cofounder, of Upland Resources Limited, a
Londonlisted (Standard Listing) oil & gas company currently with assets onshore and offshore UK. He is also a
nonexecutive director of 88 Energy Limited, an Australian oil & gas company with assets onshore Alaska. 88
Energy has a dual listing on the ASX and AIM. Dr Staley co founded and brought to the AIM market both Fastnet
Oil & Gas plc (where he was the founding CEO) and Independent Resources plc (where he was the founding
managing director). He was also both a technical consultant to, and nonexecutive director of, Cove Energy plc –
the highly successful East Africa focused explorer that went from having a market capitalisation of £2 million in
mid2009 to being sold to PTTP for £1.2 billion in less than three years. Dr Staley is owner and founder of Derwent
Resources Limited, an upstream consultancy advising on oil and gas opportunities. Prior to this he has worked
for Cinergy Corp., Conoco and BP.
He holds a BSc (Hons.) in geophysics from Edinburgh University, a PhD in petroleum geology from Sheffield
University and an MBA from Warwick University. He is a fellow of the Geological Society and a member of the
European Association of Geoscientists & Engineers, the Petroleum Exploration Society of Great Britain and
The Arctic Club.
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Corporate Governance Report
The Chairman of the Board of Directors of Predator Resources PLC (‘Predator’ or ‘the Company’ or’ the Group’ or ‘we/our’) has a responsibility
to ensure that Predator has a sound corporate governance policy and an effective Board.
The Board has not adopted, but voluntarily follows the Quoted Companies Alliance (QCA) Corporate Governance Code. The QCA code identifies
ten principles to be followed in order for companies to deliver growth in longterm shareholder value, encompassing effective management
with regular and timely communication to shareholders. This report follows the structure of those principles and explains how we have applied
the guidance as well as disclosing any areas of noncompliance.
We will provide annual updates on our compliance with the code. The Board considers that the Group complies with the QCA code so far as
is practicable having regard to the size, nature and current stage of development of the Company.
The sections below set out how the Group applies the ten principles of the QCA code and sets out areas of noncompliance.
Key governance changes during the year include the adherence to the QCA code.
PRINCIPLE 1: ESTABLISH A STRATEGY AND BUSINESS MODEL WHICH PROMOTES LONGTERM VALUE FOR SHAREHOLDERS
The Company is a oil and gas exploration specialist, with operations in Morocco, Trinidad and Ireland. Our goal is to deliver long term value
for our shareholders. We aim to do this by identifying prospective and earlystage exploration projects. Consequently we:
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use our expertise to identify areas with economically feasible resources,
assess the business environment of the target country and its attractiveness for prospecting and eventual development and production,
understand existing interests in a licence area in order to ensure we can earnin to existing interests on terms favourable to our
shareholders.
Oil and gas exploration is by its nature speculative and we aim to reduce the risks inherent in the industry by careful application of funds
throughout individual projects. We do that by:
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Reviewing existing exploration data;
Establishing close incountry partnerships for our projects;
Applying the most appropriate costeffective exploration techniques in order to determine whether further work, using increasingly
expensive exploration techniques, is justified; and
Appreciating the likely realisation routes that will be available to us as the project moves towards development.
PRINCIPLE 2: SEEK TO UNDERSTAND AND MEET SHAREHOLDER NEEDS AND EXPECTATIONS
The Company is committed to engaging with its shareholders to ensure that its strategy, operational results and financial performance are
clearly understood. We engage with our shareholders via roadshows, attending investor conferences and through our regular reporting on
the London Stock Exchange. Roadshows are typically timed to follow the release of interim and final results. The Company regularly takes part
in investor conferences, both in the UK and internationally. LSE announcements include details of the website, and include phone numbers
to contact the Company and its professional advisors.
Private shareholders
The AGM is the main forum for dialogue with retail shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 days
before the meeting. All Directors attend the AGM and are available to answer questions raised by shareholders. For each vote, the number of
proxy votes received for, against and withheld is announced at the meeting. The results of the AGM are announced via the London Stock
Exchange. In addition, the Executive Directors regularly attend investor forums specific to the mining industry and engage with shareholders
at those events. Investors can contact us via our website or by email .
Retail shareholders also regularly attend investor evenings held by our brokers or other industry bodies and we publicise our attendance via
LSE announcements. In addition, our up to date Corporate presentation is made available on our website.
Institutional shareholders
The Directors actively seek to build a relationship with institutional shareholders. Shareholder relations are managed primarily by the Chief
Executive Officer. The Chief Executive Officer makes presentations to institutional shareholders and analysts throughout the year, mainly in
London. We also have adhoc meetings with our shareholders via conference call and email. The Board as a whole is kept informed of the
views and concerns of major shareholders by the Chief Executive Officer. Any significant investment reports from analysts are also circulated
to the Board. The NonExecutive Chairman and NonExecutive Director are available to meet with major shareholders if required to discuss
issues of importance to them and are considered to be Independent from the executive management of the Company.
PRINCIPLE 3: TAKE INTO ACCOUNT WIDER STAKEHOLDER AND SOCIAL RESPONSIBILITIES AND THEIR IMPLICATIONS FOR LONG TERM
SUCCESS.
Aside from our shareholders, our most important stakeholder groups are local partners and those local communities that may be impacted
by our exploration activities. The Board is regularly updated on stakeholder issues and their potential impact on our business to enable the
Board to understand and consider these issues in decisionmaking. The Board understands that maintaining the support of all its stakeholders
is paramount for the longterm success of the Company.
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BUSINESS
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FINANCIAL
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INVESTOR
INFORMATION
Personnel
The Group does not have permanent staff in Jersey, Channel Islands. All staff are recruited under consultancy agreements as service providers.
We aim to provide an environment which will attract, retain and motivate our team and monitor the effectiveness by regular oneonone
discussion. Our key value is to treat all staff fairly and equally and to promote ethical behaviour, diversity and nondiscrimination.
Local partners and communities
Our operations provide employment in remote areas of developing countries. Essential to our success is the establishment of close working
relationships with local partners. We seek local partners who have a good understanding of the local exploration and oil and gas exploration
industry and regulations within their country, and with the capacity and capability to assist with the management and maintenance of the
project.
We are mindful of our obligations to the local environment and operate to high levels of health and safety in respect of both our local workers
and the local community. Employee training focuses on operating safety. Engagement with local communities is dependent on jurisdiction
and the stage of exploration but is typically by public forum or with local or regional leaders, including site visits and workshops. Social projects
in the local communities are dependent on local need and also the stage of exploration/level of project investment.
As projects move forward, towards potential production activities, we seek to bring in partners who can credibly make the investments to
move towards development and production. In doing so we have regard for their ability and desire to move projects forward, their industry
reputation and their commitment to treating the local communities fairly and protecting the environment. We enter agreements that allow
us to monitor their activities and have monthly updates on project progress.
PRINCIPLE 4: EMBED EFFECTIVE RISK MANAGEMENT, CONSIDERING BOTH OPPORTUNITIES AND THREATS, THROUGHOUT THE
ORGANISATION
Audit, risk and internal control
Financial controls
The Company has an established framework of internal financial controls, the effectiveness of which is regularly reviewed by the Executive
Management, the Audit Committee and the Board. The key financial controls are:
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The Board is responsible for reviewing and approving overall Company strategy, approving new exploration projects and budgets, and for
determining the financial structure of the Company including treasury, tax and dividend policy. Monthly results and variances from plans
and forecasts are reported to the Board;
The Audit Committee, comprising the two Nonexecutive Directors, assists the Board in discharging its duties regarding the financial
statements, accounting policies and the maintenance of proper internal business, and operational and financial controls;
Regular budgeting and forecasting is performed to monitor the Company’s ongoing cash requirements and cash flow forecasts are
circulated to the Board on a monthly basis;
Actual results are reported against budget and prior year and are circulated to the Board;
The Company has an investment appraisal system that considers expected costs against a range of potential outcomes arising from the
exploration opportunities that we are invited to participate in;
Regular reviews of exploration results are performed as the basis for decisions regarding future expenditure commitment;
Due to the international nature of the business there are, at times, significant foreign exchange rate movement exposures. Cash flow
forecasting is done at the ‘required currency’ level and foreign currency balances are maintained to meet expected requirements; and
For exploration projects, we manage the risk of failure to find economic deposits by low cost early stage exploration techniques, with
detailed analysis of results. Moving projects to more expensive exploration techniques requires a rigorous review of results data prior to
deciding whether to proceed with further work.
Nonfinancial controls
The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its effectiveness. However, any such system
of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that
the internal controls in place are appropriate for the size, complexity and risk profile of the Group. The principal elements of the Group’s
internal control system include:
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Close management of the daytoday activities of the Group by the Executive Directors
An organisational structure with defined levels of responsibility, which promotes entrepreneurial decisionmaking and rapid
implementation while minimising risks; and
Central control over key areas such as capital expenditure authorisation and banking facilities.
The Group reviews at least annually the effectiveness of its system of internal control, whilst also having regard to its size and the resources
available. As part of the Group’s plans we continue to review a number of nonfinancial controls covering areas such as regulatory compliance,
business integrity, health and safety, and corporate social responsibility. All personnel are aware of their obligations under antibribery and
corruption legislation.
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Corporate Governance Report (continued)
PRINCIPLE 5: MAINTAINING THE BOARD AS A WELLFUNCTIONING, BALANCED TEAM LED BY THE CHAIR
The Board comprises the NonExecutive Chairman, two Executive Directors and one NonExecutive Director. One nonexecutive Director has
extensive experience in the oil and gas industry, is a qualified geologist and has considerable experience of serving on the Board of
public companies.
The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company and industry on
the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement
and to challenge all matters, whether strategic or operational.
The Board aim to meet at least monthly. The agenda is set by the Company Secretary in consultation with the Chairman and CEO. The standard
agenda points include:
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Review of previous meeting minutes and actions arising there from;
A report by the CEO covering all operational matters;
A report from the Financial consultant covering all financial matters;
Any other business including update of Register of Conflicts
Directors’ conflict of interest
The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments
and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest
of the Board. A Register of Conflicts is maintained and is a standard agenda item at each Board Meeting. The Board has access to the Company’s
nominated adviser, its brokers and its lawyers. The advisers do not typically provide materials for Board meetings except if requested to do so
for the purposes of discussing upcoming regulations and other issues.
Board meetings are deemed quorate if two Board members are present and providing 7 days’ notice of such meeting has been given and
waived by the nonattending Directors.
Directors and Officers Liability insurance is maintained for all Directors and key employees.
PRINCIPLE 6: ENSURE THAT BETWEEN THEM THE DIRECTORS HAVE THE NECESSARY UPTODATE EXPERIENCE, SKILLS AND CAPABILITIES
The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, particularly so in the
area of oil and gas exploration and evaluation. All Directors receive regular and timely information on the Group’s operational and financial
performance. Relevant information is circulated to the Directors in advance of meetings by the Company Secretary. Contracts are available
for inspection at the Company’s registered office and at the Annual General Meeting (“AGM”).
Directors are selected having regards to the Company’s needs for a balance of operational, industry, legal and financial skills. Experience of
the Oil and Gas exploration industry is important but not critical, as is experience of running a public company.
All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association.
Appointment, removal and reelection of Directors The Board makes decisions regarding the appointment and removal of Directors, and there
is a formal, rigorous and transparent procedure for appointments. The Company’s Articles of Association require that at every AGM any director
(i) who has been appointed by the board since the last AGM or (ii) who held office since the first of the three previous AGMs and who did not
retire at either of them or (iii) who has been selected by the board for reelection shall retire from office and may offer himself for
reappointment by the members.
Independent advice
All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense from
lawyers, the nominated adviser, brokers and other professional advisors that they deem relevant. In addition, the Directors have direct access
to the advice and services of the Company Secretary.
PRINCIPLE 7: EVALUATE BOARD PERFORMANCE BASED ON CLEAR AND RELEVANT OBJECTIVES, SEEKING CONTINUOUS IMPROVEMENT
Over the next 12 months we intend to review the performance of the team as a unit to ensure that the members of the Board collectively
function in an efficient and productive manner. Over the same period the NonExecutive Directors will be seeking to set clear and relevant
objectives for the Executive Directors, and for the Board as a whole.
PRINCIPLE 8: PROMOTE A CULTURE THAT IS BASED ON ETHICAL VALUES AND BEHAVIOURS
The Board aims to lead by example and do what is in the best interests of the Company. We operate in remote and underdeveloped areas
and ensure our employees understand their obligations towards the environment and in respect of antibribery and corruption.
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BUSINESS
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FINANCIAL
STATEMENTS
INVESTOR
INFORMATION
PRINCIPLE 9: MAINTAIN GOVERNANCE STRUCTURES AND PROCESSES THAT ARE FIT FOR PURPOSE AND SUPPORT GOOD DECISION
MAKING BY THE BOARD
Board programme
The Board aims to meet monthly and as and when required. The Board sets direction for the Company through a formal schedule of matters
reserved for its decision. During the year to December 2018 the Board met for fourteen scheduled meetings. The Board and its Committees
receive appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting and Board and Committee
papers are distributed by the Company Secretary several days before meetings take place. Any Director may challenge Company proposals
and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask
for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such
meetings are agreed by the Board or relevant Committee and are then followed up by the Company’s management.
Roles of the Board, Chairman and Chief Executive Officer.
The Board is responsible for the longterm success of the Company. There is a formal schedule of matters reserved to the Board. It is responsible
for overall Group strategy; approval of exploration projects; approval of the annual and interim results; annual budgets; dividend policy; and
Board structure. It monitors the exposure to key business risks. There is a clear division of responsibility at the head of the Company. The
Chairman is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction.
The Chief Executive Officer (‘CEO’) is responsible for proposing the strategic focus to the Board, implementing it once it has been approved
and overseeing the management of the Company. The CEO, together with the Financial consultant, is responsible for establishing and enforcing
systems and controls, and liaison with external advisors. The CEO has responsibility for communicating with shareholders.
All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated
to the Directors in advance of meetings. The business reports monthly on its headline performance against its agreed budget, and the Board
reviews the monthly update on performance and any significant variances are reviewed at each meeting. A senior executive, the Financial
consultant, attends Board meetings when deemed appropriate by the CEO or Chairman, to present business updates.
Board committees
The Board is supported by the Audit and Remuneration committees. Each committee has access to such resources, information and advice as
it deems necessary, at the cost of the Company, to enable the committee to discharge its duties. The two committees comprise both of the
NonExecutive Directors.
The Audit Committee provides a formal review of the effectiveness of the internal control systems, the Group’s financial reports and results
announcements and the external audit process. The Committee meets twice per year to review the published financial information and to
meet with the Auditors.
The Remuneration Committee provides a formal and transparent review of the remuneration of the Executive Directors and senior employees
and makes recommendations to the Board on individual remuneration packages. The Committee did not meet during the year.
The Audit committee has not provided a separate report for the current financial period, but intends to do so for next years report.
PRINCIPLE 10: COMMUNICATE HOW THE COMPANY IS GOVERNED AND IS PERFORMING BY MAINTAINING A DIALOGUE WITH
SHAREHOLDERS AND OTHER RELEVANT STAKEHOLDERS
The Company communicates with shareholders through the Annual Report and Accounts, fullyear and halfyear results announcements, the
Annual General Meeting (AGM) and onetoone meetings with large existing or potential new shareholders. The Company regularly posts LSE
announcements covering operational and corporate matters, such as drilling results and significant changes in ownership positions across
historic projects in which it still retains an investment. A range of corporate information (including all Company announcements and a corporate
presentation) is also available to shareholders, investors and the public on the Company’s corporate website.
The Board receives regular updates on the views of shareholders through briefings and reports from Investor Relations, the CEO,and the
Company’s brokers. The Company communicates with institutional investors frequently through briefings with management. In addition,
analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views.
By order of the Board
Sarah Cope
Chairman
30 April 2019
Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2018 ❘ 23
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Directors’ Remuneration Report
The Company’s Remuneration Committee comprises two NonExecutive Directors: Sarah Cope (Chairman) and Stephen Staley.
The Company’s Remuneration Committee operates within the terms of reference approved by the Board.
In the year to 31 December 2018 the two members of the Remuneration Committee have not met.
The items included in this report are unaudited unless otherwise stated.
COMMITTEE’S MAIN RESPONSIBILITIES
l
The Remuneration Committee considers the remuneration policy, employment terms and remuneration of the Executive Directors and
senior management;
l
l
l
l
The Remuneration Committee’s role is advisory in nature and it makes recommendations to the Board on the overall remuneration
packages for Executive Directors and senior management in order to attract, retain and motivate high quality executives capable of
achieving the Company’s objectives;
The Remuneration Committee also reviews proposals for any share option plans and other incentive plans, makes recommendations for
the grant of awards under such plans as well as approving the terms of any performancerelated pay schemes;
The Board’s policy is to remunerate the Company’s executives fairly and in such a manner as to facilitate the recruitment, retention and
motivation of suitably qualified personnel; and
The Remuneration Committee, when considering the remuneration packages of the Company’s executives, will review the policies of
comparable companies in the industry.
CONSIDERATION OF SHAREHOLDER VIEWS
The Remuneration Committee considers shareholder feedback received and guidance from shareholder bodies. This feedback, plus any
additional feedback received from time to time, is considered as part of the Company’s periodic reviews of its policy on remuneration.
STATEMENT OF POLICY ON DIRECTORS’ REMUNERATION
The Company’s policy is to maintain levels of remuneration so as to attract, motivate, and retain Directors and Senior Executives of the highest
calibre who can contribute their experience to deliver industry leading performance with the Company’s operations. Currently Director’s
remuneration is not subject to specific performance targets.
In future periods the Company intends to implement a remuneration policy so that a meaningful proportion of Executive and Senior
Management’s remuneration is structured so as to link rewards to corporate and individual performance, align their interests with those of
shareholders and to incentivise them to perform at the highest levels. The Remuneration Committee considers remuneration policy and the
employment terms and remuneration of the Executive Directors and makes recommendations to the Board of Directors on the overall
remuneration packages for the Executive Directors. No Director takes part in any decision directly affecting their own remuneration.
There was no vote taken during the last general meeting with regard to the Director’s remuneration policy. This is considered reasonable given
the current size and stage of development of the Company and the fact that remuneration is not currently linked to performance. This will be
revisited in future periods once a meaningful remuneration policy has been implemented as noted above.
DIRECTORS’ REMUNERATION
The Directors who held office at 31 December 2018 and who had beneficial interests in the ordinary shares of the Company are summarised
as follows:
Name of Director Position
Sarah Cope Chairman, NonExecutive Director
Dr Stephen Staley NonExecutive Director
Paul Griffiths Chief Executive Officer
Ron Pilbeam Executive Officer
The interests in the shares of the Company of the Directors who served during the year were as follows:
31 December 2018 At the date of this report
Paul Griffiths
Ron Pilbeam
Sarah Cope
Steve Staley
Total
Paul Griffiths is the Group’s controlling shareholder
Ordinary Shares
Share Options Ordinary Shares
Share Options
44,773,293
7,273,294
–
–
4,005,486 44,773,293
7,273,294
4,005,486
–
1,001,370
–
1,001,370
4,005,486
4,005,486
1,001,370
1,001,370
52,046,587
10,013,712
52,046,587
10,013,712
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INVESTOR
INFORMATION
Share Option Scheme
The following Directors have been granted rights under the Group’s Share Option Scheme:
Vesting period
In issue at Exercised/ In issue at
31 December Grant Options lapsed 31 December
2017 date Awarded during year 2018 Start
Various
Paul Griffiths 0 24 May 2018 4,005,486 – 4,005,486 24 May 2018
Ron Pilbeam 0 24 May 2018 4,005,486 – 4,005,486 24 May 2018
Sarah Cope 0 24 May 2018 1,001,370 – 1,001,370 24 May 2018
Steve Staley 0 24 May 2018 1,001,370 – 1,001,370 24 May 2018
See note14
Each of the Directors entered into service agreements at the time of the Company’s admission to the market in May 2018. Details of those
service agreements are set out below. There were no other major remuneration decisions in the period.
DIRECTORS’ SERVICE CONTRACTS
Sarah Cope was appointed as a NonExecutive Director and Chairman of the Company on 18 May 2018 when she entered into a letter of
appointment with the Company. Pursuant to his letter of appointment Mrs Cope is entitled to an annual fee of £35,000 which includes
consideration for chairing the Remuneration Committee and for being a member of the Audit Committee. The Chairman is not entitled to
receive any compensation on termination of her appointment (other than payment in respect of a notice period where notice is served) and
is entitled to be reimbursed all reasonable outofpocket expenses incurred in the proper performance of her duties. Mrs Cope’s appointment
may be terminated by either party giving to the other three month’s prior written notice. The services of Mrs Cope are provided on a
consultancy basis. The Company established a share option scheme that became effective on 24 May 2018 for a long term incentive plan for
the award of share options subject to performance conditions. The share option scheme includes Mrs. Cope as a beneficiary
Dr Stephen Staley was appointed as a NonExecutive Director of the Company on 18 May 2018 when he entered into a letter of appointment
with the Company. Pursuant to his letter of appointment Dr Staley is entitled to an annual fee of £30,000 which includes consideration for
being a member the Remuneration Committee and for being a member of the Audit Committee. Dr Staley is not entitled to receive any
compensation on termination of his appointment (other than payment in respect of a notice period where notice is served) and is entitled to
be reimbursed all reasonable outofpocket expenses incurred in the proper performance of his duties. Dr Staley’s appointment may be
terminated by either party giving to the other three month’s prior written notice. The services of Dr Staley are provided on a consultancy
basis. The Company established a share option scheme that became effective on 24 May 2018 for a long term incentive plan for the award of
share options subject to performance conditions. The share option scheme includes Dr Staley as a beneficiary
Paul Griffiths provides his services as Chief Executive Officer under a consultancy agreement with the Company. The Company entered into a
consultancy agreement dated 18 May 2018 with Petro Celtex Consultancy Limited (“PetroCeltex”) under which PetroCeltex is to provide
the services of Paul Griffiths as Chief Executive of the Company, on a parttime basis (120 hours in each calendar month). Under the consultancy
agreement, PetroCeltex is entitled to a fee of £80,000 per annum (plus VAT, if applicable) for the basic 120 hours per calendar month, £1,200
per 8 hour day (plus VAT, if applicable) for each additional day or part day in excess of the first 120 hours in any calendar month, up to an
annual cumulative cap of 320 hours in a calendar year, and reimbursement of all reasonable expenses. The consultancy agreement may be
terminated at any time by 3 months’ prior written notice served by either party. Paul Griffiths entered into a side letter dated 18 May 2018
with the Company confirming that the terms of this consultancy agreement will be binding on him as an individual. Paul Griffiths also entered
into a letter of appointment dated 21 December 2017 with the Company in respect of his continued appointment as a director of the Company
with effect from 24 May 2018, but with no additional fee payable to him over and above the fee referred to in the consultancy agreement
above. The continued appointment of Paul Griffiths as a director of the Company on the terms of such appointment letter is (subject to limited
exceptions) for an initial period of 12 months with effect from 24 May 2018 and thereafter subject to termination by either party on three
months’ written notice. In addition the Company may forthwith terminate Paul Griffiths’s appointment as a director of the Company for, inter
alia, a material breach by Petro Celtex of its obligations under the consultancy agreement referred to above and Paul Griffiths may terminate
such appointment for a material breach by the Company of its obligations under the consultancy agreement referred to above.
The Company established a share option scheme that became effective on 24 May 2018 for a long term incentive plan for the award of share
options subject to performance conditions. The share option scheme includes Paul Griffiths as a beneficiary.
Ronald Pilbeam provides his services as an Executive Director under a consultancy agreement with the Company. The Company entered into
a consultancy agreement dated 18 May 2018 with Ronald Pilbeam to provide the services of Ronald Pilbeam as project development director
of the Company, on a parttime basis (75 hours in each calendar month). Under the consultancy agreement, Ronald Pilbeam is entitled to a
fee of £50,000 per annum (plus VAT, if applicable) for the basic 75 hours per calendar month, £1,000 per 8 hour day (plus VAT, if applicable)
for each additional day or part day in excess of the first 75 hours in any calendar month, up to an annual cumulative cap of 400 hours in a
calendar year, and reimbursement of all reasonable expenses. The consultancy agreement may be terminated at any time by 3 months’ prior
written notice served by either party.
Ronald Pilbeam also entered into a letter of appointment dated 19 March 2018 with the Company in respect of his continued appointment as
a director of the Company with effect from 24 May 2018, but with no additional fee payable to him over and above the fee referred to in the
consultancy agreement above. The continued appointment of Ronald Pilbeam as a director of the Company on the terms of such appointment
letter is (subject to limited exceptions) for an initial period of 12 months following Admission and thereafter subject to termination by either
party on three months’ written notice. In addition the Company may forthwith terminate Ronald Pilbeam’s appointment as a director of the
Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2018 ❘ 25
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Directors’ Remuneration Report (continued)
Company for, inter alia, a material breach by Ronald Pilbeam of his obligations under the consultancy agreement referred to above, and Ronald
Pilbeam may terminate such appointment for a material breach by the Company of its obligations under the consultancy agreement referred
to above.
The Company established a share option scheme that became effective on 24 May 2018 for a long term incentive plan for the award of share
options subject to performance conditions. The share option scheme includes Ronald Pilbeam as a beneficiary.
REMUNERATION COMPONENTS
For the year ended 31 December 2018 consultancy fees and a share incentive scheme were the only two components of remuneration. The
Company established a share option scheme that became effective on 24 May 2018 for a long term incentive plan for the award of share
options subject to certain oil production targets being reached and sustained by the Company for a period of not less than thirty calendar
days. The Board is not planning to consider any other components of Director remuneration during the year.
DIRECTORS’ EMOLUMENTS AND COMPENSATION
Short Term Employment benefits
Director
Sarah Cope
Stephen Staley
NonExecutive total
Paul Griffiths
Ronald Pilbeam
Executive total
Total
2018
£
20,900
18,100
39,000
98,200
83,100
181,300
220,300
2017
£
–
–
–
–
–
–
–
There were no awards of annual bonuses or incentive arrangements other than share options granted in the period. Remuneration was
therefore fixed in nature and no illustrative table of the application of remuneration policy has been included in this report.
Pension entitlements
The Company does currently not have any pension plans for any of the Directors and does not pay pension amounts in relation to their
remuneration.
Directors’ interests in share warrants
Directors do not hold any share warrants over ordinary shares.
Consideration of employment conditions elsewhere in the Group
The Committee has not consulted with the only other personnel member in the Group about executive pay but considers that the current
remuneration of Executive Directors to be consistent with pay and employment benefits across the Group.
UK 10year performance graph
The Directors have considered the requirement for a UK 10year performance graph comparing the Groups Total Shareholder Return with
that of a comparable indicator. The Directors do not currently consider that including the graph will be meaningful because the Company has
only been listed since May 2018, is not paying dividends and is currently incurring losses as it gains scale. The Directors therefore do not
consider the inclusion of this graph to be useful to shareholders at the current time. The Directors will review the inclusion of this table for
future reports.
UK 10year CEO table and UK percentage change table
The Directors have considered the requirement for a UK 10year CEO table and UK percentage change table. The Directors do not currently
consider that including these tables would be meaningful because, as described under the Directors’ Service Contracts section above directors
have been engaged in the Company only since May 2018. The Directors will review the inclusion of this table for future reports.
Relative importance of spend on pay
The Directors have considered the requirement to present information on the relative importance of spend on pay compared to shareholder
dividends paid. Given that the Company does not currently pay dividends the Directors have not considered it necessary to include
such information.
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INVESTOR
INFORMATION
Policy for new appointments
Base salary levels will take into account market data for the relevant role, internal relativities, the individual’s experience and their current
base salary. Where an individual is recruited at below market norms, they may be realigned over time (e.g. two to three years), subject to
performance in the role. Benefits will generally be in accordance with the approved policy.
For external and internal appointments, the Committee may agree that the Company will meet certain relocation and/or incidental expenses
as appropriate.
Policy on payment for loss of office
Payment for loss of office would be determined by the Remuneration Committee, taking into account contractual obligations.
Approved by the Board on 30 April 2019.
Sarah Cope
Chairman of the Remuneration Committee
Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2018 ❘ 27
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Independent Auditor’s Report To The Members Of Predator Oil & Gas Holdings Plc
OPINION
We have audited the financial statements of Predator Oil & Gas Holdings Plc (the ‘parent company’) and its subsidiaries (the ‘Group’) for the
period ended 31 December 2018 which comprise of the Consolidated Statement of Comprehensive Income, Consolidated Statement of
Financial Position, Consolidated Statement of Changes in Equity, Consolidated Statement of Cash Flows and notes to the financial statements,
including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable
law and International Financial Reporting Standards (IFRSs) as adopted by the European Union.
In our opinion:
l
l
l
the financial statements give a true and fair view of the state of the Group’s affairs as at 31 December 2018 and of the Group’s loss for
the period then ended;
the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union; and
the financial statements have been prepared in accordance with the requirements the Companies (Jersey) Law 1991.
BASIS FOR OPINION
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements section of our report. We are
independent of the Group in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to SME listed entities, and we have fulfilled our other ethical responsibilities in accordance
with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
CONCLUSIONS RELATING TO GOING CONCERN
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you where:
l
l
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about
the Group’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when
the financial statements are authorised for issue.
OUR APPLICATION OF MATERIALITY
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements on our audit
and on the financial statements. For the purposes of determining whether the financial statements are free from material misstatement, we
define materiality as the magnitude of misstatement that makes it probable that the economic decisions of a reasonably knowledgeable
person, relying on the financial statements, would be changed or influenced. We also determine a level of performance materiality which we
use to assess the extent of testing needed to reduce to an appropriately low level the probability that the aggregate of uncorrected and
undetected misstatements exceeds materiality for the financial statements as a whole. When establishing our overall audit strategy, we
determined a magnitude of uncorrected misstatements that we judged would be material for the financial statements as a whole. We
determined materiality for the Group to be £10,000. We agreed with the Board that all audit differences in excess of £500, as well as differences
below that threshold, warranted reporting.
AN OVERVIEW OF THE SCOPE OF OUR AUDIT
The audit was scoped to ensure that we obtained sufficient and appropriate audit evidence in respect of:
l
l
the significant business operations of the group;
other operations which, irrespective of size, are perceived as carrying a significant level of audit risk whether through susceptibility to
fraud, or for other reasons;
l
the appropriateness of the going concern assumption used in the preparation of the financial statements.
The audit was scoped to support our audit opinion on group financial statements of Predator Oil & Gas Holdings Plc and was based on group
materiality and an assessment of risk at group level.
All entities in the Group were audited by a single engagement team. We did not rely on the work of any component auditors.
As part of our planning we assessed the risk of material misstatement including those that required significant auditor consideration at the
component and group level. Procedures were then performed to address the risk identified and for the most significant assessed risks of
material misstatement, the procedures performed are outlined above in the key audit matters section of this report.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
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INVESTOR
INFORMATION
Key Audit Matter How the scope of our audit responded to the key audit matter
Acquisition of Predator Oil and Gas Ventures Limited
During the period Predator Oil & Gas Holdings Limited acquired
Predator Oil & Gas Ventures Limited. This transaction is significant as
through it the Group now holds licences from which it can potentially
generate returns to its shareholders.
We performed the following work in order to address the identified
risk:
l Agreed acquisition details to the Share and Purchase Agreement;
l Considered the accounting treatment of the acquisition and
assessed whether in fell outside the scope of IFRS 3 “Business
Combinations”;
There is a risk that the acquisition has been accounted for incorrectly.
l Reviewed the calculations prepared by management in respect
of the acquisition for both mathematical accuracy and adherence
to accounting convention; and
l Reviewed the disclosures within the financial statements for
appropriateness.
OTHER INFORMATION
The directors are responsible for the other information. The other information comprises the information included in the annual report, other
than the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements
or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether there is a material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact.
We have nothing to report in this regard.
MATTERS ON WHICH WE ARE REQUIRED TO REPORT BY EXCEPTION
We have nothing to report in respect of the following matters where The Companies (Jersey) Law 1991 requires us to report to you if, in
our opinion:
l
proper accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by
us; or
l
the financial statements are not in agreement with the accounting records and returns; or
l we have not received all the information and explanations we require for our audit.
RESPONSIBILITIES OF DIRECTORS
As explained more fully in the directors’ responsibilities statement, the directors are responsible for the preparation of the group financial
statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the group financial statements, the directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend
to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
AUDITOR’S RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected
to influence the economic decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council’s website at:
http://www.frc.org.uk/auditors responsibilities. This description, forms part of our auditor’s report.
Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2018 ❘ 29
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Independent Auditor’s Report To The Members Of Predator Oil & Gas Holdings Plc (continued)
USE OF OUR REPORT
This report is made solely to the company’s members, as a body, in accordance with Article 113A of the Companies (Jersey) Law, 1991. Our
audit work has been undertaken so that we might state to the company’s members those matters we are required to state to them in an
auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other
than the company and the company’s members as a body, for our audit work, for this report, or for the opinions we have formed.
Zahir Khaki (Senior Statutory Auditor)
For and on behalf of PKF Littlejohn LLP
Statutory Auditor
30 April 2019
1 Westferry Circus
Canary Wharf
London E14 4HD
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FINANCIAL
STATEMENTS
INVESTOR
INFORMATION
Consolidated statement of comprehensive income
for the year ended 31 December 2018
Continuing operations
Administrative expenses
Loan impairment/write off
Operating loss
Finance income
Loss for the year before taxation
Taxation
Loss for the year after taxation
Other comprehensive income
Total comprehensive loss for the year attributable to the owners of the parent
01.01.2018 to
31.12.2018
(audited)
£
01.01.2017 to
31.12.2017
(unaudited)
£
Notes
(761,302)
(32,171)
(793,473)
1,012
(792,461)
–
(414,370)
(34,276)
(448,646)
492
(448,154)
–
(792,461)
(448,154)
–
–
(792,461)
(448,154)
Earnings per share (in pence)
6
(1.0)
(0.8)
The accompanying accounting policies and notes on pages 35 to 47 form an integral part of these financial statements
Predator Oil & Gas Holdings plc Annual Report and Financial Statements 2018 ❘ 31
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Consolidated statement of financial position
as at 31 December 2018
Noncurrent assets
Tangible fixed assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total current assets
Total assets
Equity attributable to the owner of the parent
Share capital
Reconstruction reserve
Other reserves
Retained deficit
Total equity
Current liabilities
Trade and other payables
Total liabilities
Total liabilities and equity
Notes
8
10
13
11
31.12.2018
(audited)
£
31.12.2017
(unaudited)
£
3,622
3,622
12,250
973,600
985,850
–
–
68,804
520,939
589,743
989,472
589,743
1,584,795
3,547,190
81,570
(4,294,352)
537,085
3,547,190
–
(3,501,891)
919,202
582,384
70,270
70,270
7,359
7,359
989,472
589,743
The accompanying accounting policies and notes on pages 35 to 47 form an integral part of these financial statements.
The Company has adopted the exemption in terms of Companies (Jersey) law 1991 and has not presented its own income statement in these
financial statements. The Group reported a loss after taxation for the year of £0.8 million (2017: £0.4 million loss). The financial statements
on pages 31 to 34 were approved and authorised for issue by the Board of Directors on 30 April 2019 and were signed on its behalf by:
Paul Griffiths
Director
30 April 2019
Company Registered number: 125419
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Consolidated statement of changes in equity
for the year 31 ended December 2018
Attributable to owners of the parent
Share Capital
Reconstruction
Reserve
Other
Reserves
Balance at 31 December 2016
Issue of ordinary share capital
Total contributions by and distributions to owners of the parent
recognised directly in equity
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Balance at 31 December 2017
Issue of ordinary share capital
Issue of warrants
Issue of share options
Listing costs capitalised
Total contributions by and distributions to owners of the parent
recognised directly in equity
Loss for the year
Other comprehensive income
Total comprehensive income for the year
Balance at 31 December 2018
£
£
375,000 3,375,000
172,190
162,085
537,085 3,547,190
–
–
–
–
–
–
537,085 3,547,190
£
–
–
–
–
–
–
–
Retained
deficit
£
Total
£
(3,053,737)
–
696,263
334,275
(3,053,737)
1,030,538
(448,154)
–
(448,154)
–
(448,154)
(448,154)
(3,501,891)
582,384
1,300,001
–
–
(252,292)
1,047,709
–
–
–
–
27,051
54,519
–
81,570
–
–
–
–
–
–
–
–
(792,461)
–
1,300,001
27,051
54,519
(252,292)
1,129,279
(792,461)
–
(792,461)
(792,461)
–
–
–
–
–
–
–
1,584,794 3,547,190
81,570
(4,294,352)
919,202
The accompanying accounting policies and notes on pages 35 to 47 form an integral part of these financial statements.
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Consolidated statement of cash flows
for the year ended 31 December 2018
Cash flows from operating activities
Loss for the period before taxation
Adjustments for:
Consultancy fees
Loans waived
Issue of share options
Finance income
Depreciation
Decrease/(Increase) in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
Cash flow from investing activities
Purchase of computer equipment
Net cash generated from investing activities
Cash flows from financing activities
Proceeds from issuance of shares, net of issue costs
Finance income received
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
01.01.2018
to
31.12.2018
(audited)
£
01.01.2017
to
31.12.2017
(unaudited)
£
(792,461)
(448,154)
–
32,171
54,519
(1,012)
392
24,383
62,911
300,000
34,276
–
(492)
–
(36,293)
3,238
(619,097)
(147,425)
(4,014)
(4,014)
1,074,760
1,012
1,075,772
452,661
520,939
973,600
–
–
–
–
–
(147,425)
668,364
520,939
The accompanying accounting policies and notes on pages 35 to 47 form an integral part of these financial statements.
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Statement of accounting policies
for the year ended 31 December 2018
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 3rd Floor, Standard Bank House, 47–49 La Motte Street, Jersey, JE2 4SZ, Channel Islands.
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 in terms of Companies (Jersey) law 1991 and has not presented its own income
statement in these financial statements.
The consolidated financial statements incorporate the results of Predator Oil & Gas Holdings Plc and its subsidiary undertakings as at
31 December 2018.
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 intragroup balances, transactions,
income and expenses and profits and losses resulting from intragroup 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 entered into a convertible loan note raising
£1.5 million gross, largely to progress the Moroccan Guercif licence awarded on 20 March 2019. The Directors are confident that the Group
will be able to raise further funds as it considers appropriate to 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. Failing the success of these fund raising activities the Directors
will be prepared to accept appropriate reductions in their remuneration to conserve cash resources.
CHANGES 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.
(i) New IFRS accounting standards
The following are the major new IFRS accounting standards in issue and effective from 1 January 2018:
IFRS 15 REVENUE FROM CONTRACTS WITH CUSTOMERS
The standard replaces IAS 18 ‘Revenue’ and IAS 11 ‘Construction contracts’ and related interpretations. The impact of applying this change
during the year ended 31 December 2018 is not applicable as the Group currently does not generate any revenue.
IFRS 9 FINANCIAL INSTRUMENTS (‘FINANCIAL INSTRUMENTS’)
This standard replaces IAS 39. It includes requirements on the classification and measurement of financial assets and liabilities; it also includes
an expected credit losses model that replaces the current incurred loss impairment model. The standard is effective for annual periods
beginning on or after 1 January 2018. The standard introduces an expected credit loss model for the measurement of the impairment of
financial assets so it is no longer necessary for a credit event to have occurred before a credit loss is recognised.
The Group’s adoption of IFRS 9 has not resulted in a material change to the carrying values and classification of financial assets and liabilities.
IFRS 15 and IFRS 9 became effective for the Group from 1 January 2018. As the effects of applying these standards are considered immaterial
to the Group, the Group has elected not to restate prior periods on adoption of the new standards in 2018.
All other IFRs or IFRIC interpretations that were effective for the first time for the financial year beginning 1 January 2018 has not had any
material impact on the disclosures or on the amounts reported in these financial statements.
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Statement of accounting policies
for the year ended 31 December 2018 (continued)
(ii) New and amended standards not yet adopted by the Group
IFRS 16 Leases: Effective 1 January 2019
IFRIC 23 Uncertainty over tax treatments: Effective 1 January 2019
IFRS 9 amendments Prepayment Features with Negative Compensation:
Effective 1 January 2019
IFRS 28 amendments Longterm Interests in Associates and Joint Ventures:
Effective 1 January 2019*
Annual Improvements 2015 – 2017 Cycle: Effective 1 January 2019*
IFRS 19 amendments Plan Amendment, Curtailment or Settlement: Effective
1 January 2019*
IFRS 3 amendments Business Combinations: Effective 1 January 2020*
IAS 1 & IAS 8 amendments Definition of Material: Effective 1 January 2020*
*Subject to EU endorsement
There are no IFRS’s or IFRIC interpretations that are not yet effective that would be expected to have a material impact on the Company
or Group.
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 estimates and assumptions that have a significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities in the next financial year are discussed below:
a) Going concern and Intercompany loan recoverability.
The Group's cash flow projections, which have used conservative assumptions on forward oil and gas prices, indicate that the Group should
have sufficient resources to continue as a going concern, although, as stated in the Principal risks section of the strategic report, the Group
will require additional funding for its nearterm investment plans. While the Group is confident of its capacity to raise this funding, should it
not materialise, or if the projections not be realised, the Group's going concern would depend on the success of future fundraising initiatives.
The recoverability of intercompany loans advanced by the Company to subsidiaries depends also on the subsidiaries realising their cash
flow projections.
b) Useful lives of property, plant & equipment
Property, plant and equipment are depreciated over their useful economic lives. Useful economic lives are based on management's estimates
of the period that the assets will be in operational use, which are periodically reviewed for continued appropriateness. More details, including
carrying values, are included in note 8 to the financial statements.
Provisions
c)
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount
of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset
but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the income statement net of any
reimbursement. If the effect of the time value of money is material, provisions are discounted using a current pre–tax rate that reflects, where
appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised
as a borrowing cost. Following their assessment, the directors concluded that a full impairment against the loan issued to Theseus Limited
was required.
Share based payments
d)
The Group has applied the requirements of IFRS 2 Sharebased 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 nonmarket based vesting conditions) at the date of grant.
The fair value determined at the grant date of equitysettled sharebased 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 nonmarket based vesting conditions.
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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 BlackScholes model, has been recorded
immediately. A charge was recorded against the share capital as a direct listing cost. The valuation of these warrants involves making a number
of estimates relating to price volatility, future dividend yields and continuous growth rates (see Note 14)
The fair value of these 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 14 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 nontransferability 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 14.
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.
Intercompany 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.
BUSINESS COMBINATIONS
The financial information incorporates the results of business combinations using the purchase method. In the statement of changes in equity,
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 Group statement of comprehensive income from the date on which control is obtained. The
assets acquired have been valued at their fair value. Any excess of consideration paid over the fair value of the net assets acquired is allocated
to the exploration and evaluation intangible asset. Any excess fair value over the consideration paid is considered to be negative goodwill and
is immediately recorded within the income statement.
Where business combinations are discontinued, whether by closure or disposal to third parties, any resultant gain or loss on the discontinued
operation is identified separately and dealt with in the Group’s consolidated income statement as a separate item.
Where the acquired entity is under common control it does constitute a business combination under IFRS3 merger accounting is adopted.
MERGER ACCOUNTING
On 21 March 2018 the Company acquired the entire issued share capital of Predator Oil and Gas Ventures Limited for a consideration of
£537,085. The consideration was satisfied by the issue of the 53,708,550 new Ordinary shares of No Par Value.
In these financial statements, except where reference is made to the figures only for the Company without its subsidiaries, the 2018 figures
and comparative figures for 2017 include the whole Group as it was before the aforesaid acquisition by Predator Oil and Gas Ventures Limited
(as it is the same operating business) adjusted where necessary in the balance sheet to reflect the effects of merger accounting.
Consequently the previously recognised book values and assets and liabilities of Predator Oil and Gas Ventures Limited have been retained
and the consolidated financial statements for periods ending 31 December 2018 and earlier years have been presented as if Predator Oil and
Gas Holdings Plc had always been the parent company of the Group.
In determining the appropriate accounting treatment for the transaction, the Directors considered IFRS 3 "Business Combinations". However,
they concluded that this transaction fell outside of the scope IFRS 3 since the transaction described above represents a combination of entities
under common control.
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Statement of accounting policies
for the year ended 31 December 2018 (continued)
Paragraph 10 of IAS 8 "Accounting Policies, Changes in Accounting Estimates and Errors" require management to use its judgement in
developing and applying a policy that is relevant, reliable, represents faithfully the transaction, reflected the economic substance of the
transaction, is neutral, is prudent and is complete in all material respects when selecting the appropriates methodology for
consolidation accounting.
Section 19.27 to 19.33 of FRS 102 Group reconstructions (UK) permits merger accounting as a result of a group reconstruction when an addition
of a new parent company does not alter the relative rights of the shareholders and is facilitated entirely by a share for share exchange.
The result is that the merged group is treated as if it has have been combined throughout the current and comparative accounting periods.
Merger accounting principles for these combinations gave rise to a reconstruction reserve in the consolidated statement of financial position.
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 nonderivative 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 shortterm bank deposits and shortterm 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”.
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 2017
31 December 2018
£1: US$1.35 and £1: Euro1.14
£1: US$1.274 and £1: Euro 1.114
INVESTMENT IN SUBSIDIARIES
The Group’s investment in its subsidiaries is recorded at cost.
PENSION COSTS
Contributions to defined contribution pension schemes are charged to profit or loss in the year to which they relate. The Group currently does
not have a pension scheme.
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PRODUCTION EXPENSES
Production expenses include all direct costs of production, including depreciation of property plant and equipment involved in the oil & gas
production, but excluding corporate overhead. The Group currently does not produce any oil and gas.
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 assets –
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 nonassessable 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:
l
l
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.
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Notes to the financial statements
for the year ended 31 December 2018
Segmental analysis
1.
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 is 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.
Europe
£’000
Caribbean
£’000
Africa
£’000
Corporate
£’000
Year to 31 December 2018
Gross profit (loss)
Depreciation
Other administrative and overhead expenses
Share option and warrant expense
Finance income
Finance expense
Taxation (charge)
Profit (loss) for the year from continuing operations
Total assets
Total noncurrent assets
Additions to noncurrent assets
Total current assets
Total liabilities
(71)
–
–
–
–
(71)
255
–
–
255
(4)
(123)
–
–
–
–
(123)
–
–
–
–
(137)
There are no noncurrent assets held in the Group’s country of domicile, being the Jersey Isles (2017: £nil).
2. Group loss from operations
Operating loss is stated after charging/(crediting):
Auditors’ remuneration (note 3)
Depreciation
Share option expense
Foreign exchange (gain)
3. Auditor’s remuneration
Fees payable to the Group’s auditor for the audit of the Group’s annual accounts
Fees payable to the Group’s auditor for other services:
– Audit of the accounts of the Group
– Other services
(30)
–
–
–
–
(30)
–
–
–
–
(30)
(483)
–
(55)
1
–
(569)
966
–
–
966
(61)
2018
Group
£’000
2017
Group
£’000
67.5
–
–
–
–
–
(19.0) 0.8
2018
Group
£’000
–
–
20.0
48.0
68.0
2017
Group
£’000
–
–
–
–
–
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FINANCIAL
STATEMENTS
INVESTOR
INFORMATION
4.
Taxation
Factors affecting the tax charge for the year
Loss on ordinary activities before tax:
Loss on ordinary activities at Jersey standard 0% tax (2017: 0%)
Tax charge (credit) for the year:
No deferred tax asset or liability has been recognised as the Standard Jersey corporate tax rate is 0%.
5.
Personnel
Personnel costs (including directors) consist of:
Consultancy fees
Share based payments
Healthcare costs
Pension costs
The average number of personnel (including directors) during the year was as follows:
Management
Other operations
2018
Group
£’000
(792)
0
0
2018
Group
£’000
242
55
–
–
297
5
–
5
2017
Group
£’000
(448)
0
0
2017
Group
£’000
300
–
–
–
300
2
–
2
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 £98,200 (2017: nil). The Group does not have employees. All personnel are engaged as service providers.
6.
Earnings per share
Loss per ordinary share has been calculated using the weighted
average number of ordinary shares in issue during the relevant
financial year.
The weighted average number of ordinary shares in issue for the period is:
Losses for the period: (£’000)
Earnings per share basic and diluted (pence)
31 Dec
2018
Group
£’000
31 Dec
2017
Group
£’000
82,201,718
(£792)
(1.0p)
53,708,550
(£448)
(0.8p)
Dilutive loss per Ordinary Share equals basic loss per Ordinary Share as, due to the losses incurred in 2018 and 2017, there is no dilutive effect
from the subsisting share options
Loss for the financial year
7.
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.
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Notes to the financial statements
for the year ended 31 December 2018 (continued)
Property, plant and equipment
8.
Fixed Assets
Cost
At 31 December 2017
Additions
At 31 December 2018
Amortisation
At 31 December 2017
Charge for the year
At 31 December 2018
Carrying amount
At 31 December 2017
At 31 December 2018
9.
Investments in subsidiaries
Cost at the beginning of the year
Additions during the year
Cost at the end of the year
Computer
equipment
£
–
4,014
4,014
–
392
392
–
3,622
2017
Group
£’000
–
–
–
2018
Group
£’000
–
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:
Group
Predator Oil and Gas Ventures Limited
Proportion
held by
Country of Group
registration Class 2018 2017
Jersey, Ordinary 100% 100%
Channel Islands
Predator Gas Ventures Limited
Jersey, Ordinary 100% –
Channel Islands
Nature
of business
Licence
options
offshore
Ireland
Exploitation
licence
onshore
Morocco
Predator Oil and Gas Trinidad Limited
Jersey, Ordinary 100% 100%
Channel Islands
Drilling rights
for a CO2
oil
pilot
recovery project
The registered address of all of the Group’s companies is at 3rd Floor, Standard Bank House, 47–49 La Motte Street, Jersey, JE2 4SZ,
Channel Islands.
10.
TRADE AND OTHER RECEIVABLES
Loan receivable
Provision for impairment
Prepayments
Dec 2018
Group
£’000
Dec 2017
Group
£’000
32
(32)
12
12
32
–
37
69
Prepayments in 2018 are in respect of an insurance premium paid in advance and are expensed within 60 days. There are no material
differences between the fair value of trade and other receivables and their carrying value at the year end.
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11.
TRADE AND OTHER PAYABLES
Trade payables
Accrued expenses
All payables are required to be settled within 30 days.
Dec 2018
Group
£’000
Dec 2017
Group
£’000
3
67
70
–
7
7
12. Financial instruments – risk management
SIGNIFICANT ACCOUNTING POLICIES
Details of the significant accounting policies in respect of financial instruments are disclosed on pages 35 to 39. 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. A foreign exchange hedge was entered into during the year whereby Sterling
£ was converted to United States $.
The Group is exposed through its operations to the following financial risks:
l
Credit risk
l Market risk (includes cash flow interest rate risk and foreign currency risk)
l
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 follow:
l
l
l
Receivables
Cash and cash equivalents
Trade and other payables (excluding other taxes and social security) and loans
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.
Loans and receivables
Cash and cash equivalents
Receivables
Available for sale financial assets
Available for sale investments (valuation level 1)
Other liabilities
Trade and other payables (excl short term loans)
Loans and borrowings
2018
Group
£’000
974
12
–
70
–
2017
Group
£’000
521
69
–
7
–
CREDIT RISK
Financial assets, which potentially subject the Group to concentrations of credit risk, consist principally of cash, shortterm 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 intercompany loans to subsidiaries. The Company is owed £196,830 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.
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Notes to the financial statements
for the year ended 31 December 2018 (continued)
Maximum exposure to credit risk
The Group’s maximum exposure to credit risk by category of financial instrument is shown in the table below:
Cash and cash equivalents
Receivables
Loans and borrowings
2018
Carrying
value
£’000
973
12
–
2018
Maximum
exposure
£’000
1,034
12
––
The holding company’s maximum exposure to credit risk by class of financial instrument is shown in the table below:
Cash and cash equivalents
Receivables
Loans to Group Companies
2018
Carrying
value
£’000
973
12
197
2018
Maximum
exposure
£’000
1034
12
197
2017
Carrying
value
£’000
521
69
–
2017
Carrying
value
£’000
521
69
–
2017
Maximum
exposure
£’000
521
69
2017
Maximum
exposure
£’000
521
69
–
MARKET RISK
Cash flow interest rate risk
The Group has adopted a nonspeculative 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 ceased paying
interest on cash balances during the year, therefore the Group is not currently affected by interest rate changes. At 31 December, 2018, the
Group had a cash balance of £0.973 million (2017: £0.521 million) which was made up as follows:
Sterling
United States Dollar
2018
Group
£’000
455
518
973
2017
Group
£’000
521
–
521
At the reporting date, the Group had a cash balance of £0.922 million
The Group had no interest bearing debts at the current year end
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 2018 and 31 December 2017, the currency exposure of the Group was as follows:
At 31 December 2018
Cash and cash equivalents
Trade and other receivables
Trade and other payables
At 31 December 2017
ash and cash equivalents
Trade and other receivables
Trade and other payables
Sterling
£’000
US Dollar
£’000
Euro
£’000
Other
£’000
Total
£’000
455
12
70
521
69
7
518
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
973
12
70
521
69
7
The effect of a 10% strengthening of Sterling against the US dollar at the reporting date, all other variables held constant, would have resulted
in increasing post tax losses by £51,800 (2017: £nil). Conversely the effect of a 10% weakening of Sterling against the US dollar at the reporting
date, all other variables held constant, would have resulted in decreasing post tax losses by £51,800 (2017: £nil).
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 on pages 3 and 16.
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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 2018 the Group had no debt
13. Share Capital
As at 31 December 2017
Issued during the year *
Less listing costs
As at 31 December 2018
Ordinary
No. of shares Nominal value
53,708,550
46,428,600
–
£537,085
£1,300,001
(£252,292)
100,137,150
£1,584,794
* Details of the shares issued during the year are as shown in the table below and in the Statement of Changes of Equity on page 33.
Date of issue
21 March 2018
21 May 2018
14. Share based payments
Equity – settled share based payments
Warrant and Share option expense
Warrant and share option expense:
– In respect of remuneration contracts
– In respect of financing arrangements
Total expense/(credit)
No of shares
53,708,550
Issue price
Purpose of issue
£0.01
46,428,600
£0.028
Acquire Predator
Oil & Gas
Ventures Limited
Fund operations
2018
Group
£’000
55
27
82
2017
Group
£’000
–
–
–
The Group operates a share option plan for directors. Details of share options granted in the year to 31 December 2018 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 gross production from a Pilot C02 test of 300 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.
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. The Black Scholes model has been used to fair value the options, the inputs into the model were as follows:
Grant date
Share price
Exercise price
Term
Expected volatility
Expected dividend yield
Risk free rate
Fair value per option
The total fair value of the options:
24 May, 2018
£0.028
£0.028
5 years
400%
0%
0.80%
£0.028
£54,519
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Notes to the financial statements
for the year ended 31 December 2018 (continued)
Expected volatility was determined by reference to the Company's share price since admission to the Standard List of the London Stock
Exchange and the year end. The risk free rate is based on the UK three year bond yield.
On 24 May 2018 the Company’s granted 2,231,248 warrants to Novum Securities Limited and 160,714 warrants to Optiva Securities Limited
in consideration of services provided to the Company pursuant to the terms of the Placing Agreement and conditional upon admission
becoming effective. The warrants may be exercised at £0.028 each in whole or in part at any time and from time to time from the date of
their grant until the third anniversary of admission.
The Black Scholes model has been used to fair value the warrants, the inputs into the model were as follows:
Grant date
Share price
Exercise price
Term
Expected volatility
Expected dividend yield
Risk free rate
Fair value per warrant
Total fair value of warrants
24 May, 2018
£0.028
£0.028
3 years
60%
0%
0.80%
£0.0113
£27,051
15. Reserves
Details of the nature and purpose of each reserve within owners’ equity are provided below:
l
l
l
l
Share capital represents the nominal value each of the shares in issue.
The Other Reserves 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.
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.
16. Related party transactions
Directors and key management emoluments are disclosed in note 5 and in the Remuneration report.
Paul Griffiths holds 44,773,293 ordinary shares, 44.7% (43.8% as at the reporting date) of the issued share capital in the Company, and is the
Group’s controlling shareholder.
17. Acquisition of Predator Oil & Gas Ventures Limited
On 21 March 2018 the Predator Oil and Gas Holdings Plc acquired the entire issued share capital of Predator Oil and Gas Ventures Limited for
a consideration of £537,085. The consideration was satisfied by the issue of the 53,708,550 new Ordinary shares of No Par Value.
Consideration
Issue of 53,708,550 Ordinary NPV shares
Total consideration
The assets and liabilities recognised as a result of the acquisition are as follows:
Cash
Loans receivable
Total net assets acquired
£
537,085
537,085
387,444
43,458
430,902
The acquisition of Predator Oil & Gas Ventures Limited does not constitute a business combination under IFRS3 because the entity was under
common control and therefore merger accounting has been adopted.
18. Contingent liabilities and capital commitments
The Group had at the reporting date no capital commitments or contingent liabilities.
19. Litigation
The Group is not involved in any litigation.
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20. Events after the reporting date
1. A licence was awarded to Predator Gas Ventures Limited by ONHYM on 20 March 2019 for the exploitation of Guercif Moulouya Tortonian
Prospect in Northern Morocco.
2. On 15 February, 2019 £1,500,000 gross, was raised in the form of convertible loan notes to progress inter alia the Guercif licence. The
loan notes carry no coupon, are repayable at a premium of 5% and a fee of 10% of the principal amount. The loan notes are convertible
at the election of the lender at 90% of the volume weighted average share price ruling on the preceding two trading days. The term of
the loan notes is two years. The lender, Arato Global Opportunities Limited, also agreed to make available an additional £250,000 on the
same terms. 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.
3. On 12 April, 2019 following the receipt of notice from Arato Global Opportunities limited for the conversion of £150,000 of the Loan
Note, issued on 15 February 2019, 1,966,888 New Ordinary Shares were allotted and issued. Following the issue of such 1,966,888 New
Ordinary Shares, the Company's issued share capital was 102,104,038 shares of no par value, each with one vote per share (and no such
shares are held in treasury). The total number of voting rights was therefore 102,104,038 following said issue of shares.
4. On 10 April 2019 the Company announced its acceptance of a one year extension of the term of the Licensing Option 16/30
("LO 16/30")(‘Ram Head’) to 30 November 2019 subject to the carrying out of the work programme agreed with the Department of
Communications, Climate Action and Environment, the conditions that are attached to Licensing Option 16/30 and the Licensing Terms
for Offshore Oil and Gas Exploration and Development and Production 2007 respectively.
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Corporate Information
Directors
Company Secretary
Registered Office
Joint Broker and Placing Agent
Joint Broker and Placing Agent
Auditors
Paul Stanard Griffiths (Executive Director – CEO)
Ronald Pilbeam (Executive Director)
Sarah Cope (NonExecutive Chairman)
Dr Stephen Staley (NonExecutive Director)
Consortia Secretaries Limited*
3rd Floor, Standard Bank House
47 – 49 La Motte Street
Jersey JE2 4SZ
*(Changed name in 2019 to Oak Secretaries (Jersey) Ltd)
3rd Floor, Standard Bank House
47 – 49 La Motte Street
Jersey JE2 4SZ
Telephone +44 (0) 1534 834 600
Novum Securities Limited
810 Grosvenor Gardens
London SW1W 0DH
Optiva Securities Limited
49 Berkeley Square
London W1J 5AZ
(Services terminated in July 2018)
PKF Littlejohn LLP
1 Westferry Circus
Canary Wharf
London E14 4HD
Legal advisers to the Group as to
English law
Charles Russell Speechlys LLP
5 Fleet Place
London EC4M 7RD
Legal advisers to the Group as to Jersey law Pinel Advocates
One Liberty Place
Liberty Wharf
La Route de la Liberation
St Helier
Jersey JE2 3NY
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Competent Person
Registrar
Financial PR
Principal Bankers
SLR Consulting (Ireland) Ltd
7 Dundrum Business Park
Windy Arbour
Dublin 14, D14 N2Y7
Republic of Ireland
Computershare Investor Services (Jersey) Limited
Queensway House
Hilgrove Street
St Helier
Jersey JE11ES
IFC Advisory Limited
15 Bishopsgate London EC2N 3AR
(Services terminated in August 2018)
The Royal Bank of Scotland International Limited
P.O. Box 64
Royal Bank House
71 Bath Street
St Helier
Jersey JE4 8PJ
Barclays Bank Plc
13 Library Place
St Helier
Jersey JE4 8NE
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Contents
Business Review
1 Chairman’s statement
3 Strategy
5 Group strategic report
Our Governance
17 Report of the directors
19 Board of directors
20 Corporate governance report
24 Directors’ remuneration report
Investor Information
48 Corporate information
Financial Statements
28 Independent auditor’s report
31 Consolidated statement of
comprehensive income
32 Consolidated statement of
financial position
33 Consolidated statement of
changes in equity
34 Consolidated statement of
cash flows
35 Statement of accounting
policies
40 Notes to the financial
statements