CHALLENGER ENERGY GROUP PLC

Annual / Quarterly Financial Statement • Sep 30, 2022

National Storage Mechanism | Additional information RNS Number : 2574B Challenger Energy Group PLC 30 September 2022 12 Right of use assets Cost Leased properties $ 000's 468 17 - (1) Motor vehicles $ 000's 62 - (30) - Group Total $ 000's 530 17 (30) (1) 2021 Company Leased properties $ 000's 42 17 At 1 January 2021 Additions Disposals Foreign exchange difference on translation At 31 December 2021 484 32 516 59 Accumulated depreciation 398 35 433 30 At 1 January 2021 Depreciation 72 14 86 15 Disposals - (17) (17) Foreign exchange difference on translation - - - - At 31 December 2021 470 32 502 45 Net book value At 31 December 2021 14 - 14 14 At 31 December 2020 70 27 97 12 Right of use assets Leased properties $ 000's Motor vehicles $ 000's Group Total $ 000's 2020 Company Leased properties $ 000's Cost At 1 January 2020 355 62 417 42 Acquisition of Columbus Energy Resources PLC (note 15) 53 - 53 - Additions 60 - 60 - Foreign exchange difference on translation - - - - At 31 December 2020 468 62 530 42 Accumulated depreciation 206 13 219 15 At 1 January 2020 Depreciation 192 22 214 15 Foreign exchange difference on translation - - - - At 31 December 2020 398 35 433 30 Net book value 70 27 97 12 At 31 December 2020 At 31 December 2019 149 49 198 27 13 Investment in associate - Group 2021 2020 Cost $ 000's $ 000's At 1 January 47 - Acquisition of Columbus Energy Resources PLC (note 15) - 47 Disposal of associate (47) At 31 December - 47 * In 2020, the Group had a 25% interest in Beach Oilfield Limited, following a restructuring of the commercial arrangement with Beach Oilfield Limited which took effect in Q4 2021, the Group no longer holds an interest in this company and management determined that the recoverable amount of this investment is nil. 14 Investment in subsidiaries 2021 $ 000's 2020 $ 000's Company Cost 50,940 29,560 At 1 January Acquisition of Columbus Energy Resources PLC (note 15) - 21,380 At 31 December 50,940 50,940 Challenger Energy Group PLC, the parent company of the Group, holds 100% of the share capital of the following companies: Company Country of registration Proportion held Nature of business Direct BPC (A) Limited Isle of Man 100% Holding Company BPC (B) Limited Isle of Man 100% Holding Company BPC (C) Limited Isle of Man 100% Holding Company BPC (D) Limited Isle of Man 100% Holding Company BPC (A) Limited Bahamas 100% Oil and Gas Production and Exploration Company Columbus Energy Resources Limited England & Wales 100% Holding Company Indirect Via BPC (A) Limited BPC Limited Bahamas 100% Investment Company Bahamas Offshore Petroleum Ltd Bahamas 100% Investment Company Island Offshore Petroleum Ltd Bahamas 100% Investment Company Sargasso Petroleum Ltd Bahamas 100% Investment Company Privateer Petroleum Ltd Bahamas 100% Investment Company Columbus Oil & Gas Limited Bahamas 100% Investment Company Via Columbus Energy Resources Limited Columbus Energy Holdings Ltd Cyprus 100% Holding Company Columbus Energy Resources South America B.V. Netherlands 100% Holding Company (for Suriname Branch) BPC Uruguay Holdings Limited England & Wales 100% Dormant Company Via Columbus Energy Holdings Ltd Columbus Energy CPS (Cyprus) Ltd Cyprus 100% Investment Company Columbus Energy Byron Ltd Cyprus 100% Investment Company Columbus Energy (Cyprus) Ltd Cyprus 100% Investment Company Columbus Energy Investments Ltd Cyprus 100% Investment Company Via Columbus Energy CPS (Cyprus) Ltd Compa��ia Petrolifera de Sedano S.L.U. Spain 100% Oil and Gas Production and Exploration Company Via Columbus Energy Byron Ltd Leni Gas and Oil US Inc. United States 100% Dormant Company Via Columbus Energy (Cyprus) Ltd Columbus Energy (St Lucia) Ltd St Lucia 100% Investment Company Via Columbus Energy (St Lucia) Ltd CEG Icacos Trinidad Ltd Trinidad & Tobago 100% Oil and Gas Production and Exploration Company CEG Management Services Trinidad Ltd Trinidad & Tobago 100% Oil and Gas Services Company CEG Goudron Trinidad Ltd Trinidad & Tobago 100% Oil and Gas Production and Exploration Company CEG Bonasse Trinidad Limited Trinidad & Tobago 100% Oil and Gas Production and Exploration Company Caribbean Rex Ltd St Lucia 100% Investment Company Steeldrum Oil Company Inc St Lucia 100% Investment Company Steeldrum Petroleum Group Ltd Trinidad & Tobago 100% Investment Company CEG Inniss-Trinity Trinidad Ltd Trinidad & Tobago 100% Oil and Gas Production and Exploration Company CEG South Erin Trinidad Ltd Trinidad & Tobago 100% Oil and Gas Production and Exploration Company Cory Moruga Holdings Ltd Trinidad & Tobago 100% Dormant Company West Indian Energy Group Ltd Trinidad & Tobago 100% Oil and Gas Services Company T-REX Resources (Trinidad) Ltd Trinidad & Tobago 100% Oil and Gas Production and Exploration Company CEG Well Services Trinidad Ltd Trinidad & Tobago 100% Oil and Gas Services Company 15 Business combination Acquisition in 2020 On 7 August 2020, the Company completed a merger with Columbus Energy Resources PLC (CERP), effected by means of a Court sanctioned scheme of arrangement under Part 26 of the UK Companies Act 2006 (the "Scheme"). Pursuant to the Scheme, a total of 757,261,511 new ordinary shares of the Company (pre-consolidation) were issued and allotted to holders of CERP shares. Assets acquired and liabilities assumed The fair values of the identifiable assets and liabilities of the Columbus Energy Group at the date of acquisition were: Fair value recognised on acquisition $ 000's Assets Cash and cash equivalents 1,039 Restricted cash 911 Trade and other receivables 3,086 Inventories 154 Investment in associate (note 13) 47 Right of use assets (note 12) 53 Property, plant and equipment and decommissioning costs (note 11) 3,665 Oil and gas properties (note 11) 23,412 Intangible assets (note 10) 2,492 Abandonment fund 1,257 Deferred tax asset 9,274 45,390 Liabilities Trade and other payables (12,281) Lease liabilities (note 20) (56) Provisions (note 22) (6,169) Borrowings (3,276) Deferred tax liability (9,273) (31,055) Total identifiable net assets at fair value 14,335 Goodwill (note 10) 7,045 Purchase consideration transferred (shares issued at fair value) 21,380 Analysis of cash flows on acquisition Net cash acquired with the subsidiary (included in cash flows from investing activities) 1,039 Net cash flow on acquisition 1,039 The fair value of the trade receivables amounted to $252,000 which were collected during 2021. Goodwill arising on acquisition is attributable to the Group's enhanced strength following the creation of a portfolio of operations in varying jurisdictions and in various stages of the hydrocarbon value cycle. In 2020, from the date of acquisition, Columbus Energy Resources PLC contributed $1,417,000 of revenue and $4,149,000 of loss before tax from continuing operations of the Group. If the combination had taken place at the beginning of 2020, revenue from continuing operations would have been $3,507,000 and loss before tax from continuing operations for the Group would have been $28,251,000. 16 Trade and other receivables 2021 2020 Group $ 000's Company $ 000's Group $ 000's Company $ 000's Current trade and other receivables Trade and other receivables 308 - 291 - VAT receivable () 1,768 18 1,468 101 Other receivables () 1,427 26 1,447 92 Prepayments 768 122 2,092 45 Other deposits 3 - 15 - Total 4,274 166 5,313 238 Non-current trade and other receivables Escrow and Abandonment funds () 1,564 - 1,297 - Amounts owed by subsidiary undertakings () - 113,187 - 83,839 Total 1,564 113,187 1,297 83,839 Set out below is the movement in the allowance for expected credit losses on amounts owed by subsidiary undertakings: Group Company Group Company $ 000's $ 000's $ 000's $ 000's At 1 January - 7,171 - - Provision for expected credit losses () - 5,813 - 7,171 At 31 December 2021 - 12,984 - 7,171 () VAT receivable is stated after impairments to recoverable amounts totalling $313,000, which have been recognised in the year (2020: $139,000). (**) Other receivables predominantly comprises balances owing from joint venture partners in Trinidad and Tobago and certain other receivables. () Pursuant to certain production and exploration licences, the Company is obligated to remit payments into an Escrow Fund and a separate Abandonment fund based on production, amounts paid vary by licence. The Company remits US$0.25 per barrel of crude oil sold (Escrow fund), and between US$0.28 to US$1.00 (varying by licence) to an abandonment fund and the funds will be used for the future abandonment of wells in the related licenced area. (*) The amounts owed by subsidiary undertakings are interest free and repayable on demand. At 31 December 2021 a loss allowance for expected credit losses of $12,984,000 is provided for with $5,813,000 recognised in the year (2020: $7,171,000) in respect of the recoverability of amounts due from subsidiary undertakings. () A 100% provision for expected credit losses has been applied to all receivable balances relating to Trinidad and Tobago and Suriname operations as the Company cannot reasonably foresee the actual timing of recovery of these balances. 17 Inventories 2021 2020 Group $ 000's Company $ 000's Group $ 000's Company $ 000's Crude oil Consumables 73 186 - - 60 112 - - Total 259 - 172 - 18 Restricted cash 2021 2020 Group $ 000's Company $ 000's Group $ 000's Company $ 000's Credit card security 76 27 77 27 Licence related bonds 484 30 469 30 Bank deposits - - 400 - Total 560 57 946 57 Bank deposits consist of funds held as security for bank loans in Trinidad and Tobago. Funds restricted against licence related bonds consist of $30,000 (2020: $30,000) relating to the Group Uruguay licence and $454,000 (2020: $439,000) relating to the Group's licences in Trinidad and Tobago. Amounts held at the year-end have been classified as current as they may be recovered at any point following cancellation of the associated corporate credit card facilities, discharge of the relevant licence obligation or cancellation of the relevant licence and repayment of the relevant bank loans. 19 Trade and other payables 2021 2020 Group Company Group Company $ 000's $ 000's $ 000's $ 000's Current trade and other payables Trade and other payables 14,701 9,852 5,353 72 Accruals 8,836 923 13,267 432 Total 23,537 10,775 18,620 504 2021 2020 Group $ 000's Company $ 000's Group $ 000's Company $ 000's Current trade and other payables Trade and other payables 14,701 9,852 5,353 72 Accruals 8,836 923 13,267 432 Total 23,537 10,775 18,620 504 Included in the current trade and other payables are exploration and evaluation payables balances amounting to $7,916,000 (2020: $4,707,000). As noted in an RNS on the 13th December 2021 the Group undertook a comprehensive balance sheet restructuring process, which process was completed in March 2022. This process resulted in a reduction in balance sheet payables, debts and potential liability exposure from approximately $23.5 million to approximately $2.5 million, being the estimated liabilities amount that would require settlement in cash in the foreseeable future. The substantial majority of these settlements, whilst agreed during the last quarter of 2021, were only due and paid in the first quarter of 2022 and beyond. As these restructuring agreements were conditional on making settlements post year end the liabilities are recorded in full and are undiscounted at the balance sheet date. See note 28 for more detail. 20 Lease liabilities 2021 2020 Group $ 000's Company $ 000's Group $ 000's Company $ 000's At 1 January 105 13 205 28 Acquisition of Columbus Energy Resources PLC (note 15) - - 56 - Additions 17 17 60 - Accretion of interest 7 1 17 1 Payments (93) (17) (233) (16) At 31 December 36 14 105 13 Current 36 14 105 13 Non-current - - - - Set out above are the carrying amounts of lease liabilities and the movements during the period. The following are the amounts recognised in profit or loss: 2021 2020 Lease liabilities Group Company Group Company $ 000's $ 000's $ 000's $ 000's Depreciation expense of right-of-use assets 86 15 214 15 Interest expense on lease liabilities 7 1 17 1 Expense relating to short-term leases 265 - 13 - At 31 December 358 16 244 16 The Group has elected not to recognise right of use assets and lease liabilities for short term leases lease term of 12 months or less and leases for low value assets. The Group recognises the payments associated with these leases as expenses on a straight-line basis over the lease term. 21 Borrowings 2021 2020 Group $ 000's Company $ 000's Group Company $ 000's $ 000's Current borrowings Convertible loan1 462 462 - - Secured loan2 26 - 27 - Unsecured loan3 83 - 249 - Secured loan4 - - 17 - Secured loan5 - - 132 - Secured loan6 72 - 62 - Unsecured loan7 - - 11 - Total 643 462 498 - 2021 2020 Group $ 000's Company Group $ 000's $ 000's Company $ 000's Non-current borrowings Convertible loan1 - - 1,120 1,120 Secured loan2 - - 54 - Secured loan4 - - 6 - Secured loan5 - - 200 - Secured loan6 187 - 259 - Total 187 - 1,639 1,120 1 On 30 December 2020, the Company drew down ��1,110,000 (US$1,511,000) of a ��3,000,000 (US$4,084,000) first tranche of a convertible loan previously agreed with Bizzell Capital Partners Pty Ltd. As part of this initial draw down in 2020, ��287,000 (US$396,000) was recognised as the equity component. Tranche 1 had a total fair value, after deduction of all facility costs, of ��2,800,000 (US$3,812,000). The term of the loan was 3 years from the date of draw-down. The holder had the right, at any time prior to maturity, to elect to convert the Notes (principal plus any accrued interest) into fully paid ordinary shares in the Company. Initially, the conversion price was set at a 25% premium to the price of the Company's next capital raising (if any) or at 6p per share, whichever was the lower. Subsequently, in February 2021 the conversion price was amended by agreement to 0.8p per share. In May 2021 the balance of the ��3,000,000 facility was drawn down in full, resulting in a further ��370,000 (US$505,000) equity component being recognised. Thereafter ��2,500,000 (US$3,496,000) of the facility amount was converted into ordinary shares resulting in a ��579,000 (US$787,000) equity conversion, leaving a remaining principal outstanding of ��342,000 (US$462,000) and residual equity component of ��84,000 (US$114,000) at 31 December 2021. Subsequent to year end the remaining balance was converted into ordinary shares as part of the restructuring completed in March 2022. 2 The loan was issued by RBC Royal Bank Limited in June 2015 in respect of the Columbus Energy Resources Plc business. Repayments were over 7 years and the loan is denominated in Trinidad and Tobago Dollars. 3 The loan was issued by BNP Paribas in 2015 in respect of the Columbus Energy Resources Plc business. In December 2016, the outstanding balance of US$2.6m was refinanced and retired, and all security was removed, leaving a final unsecured payment of US$0.25m due on 31 December 2019. In November 2020 this loan balance was refinanced with the outstanding balance to be repaid over one year commencing in February 2021. In November 2021 this loan balance was subject to a re-settlement resulting in a reduced payment terms with final settlement made in February 2022. The loan is denominated in US Dollars. 4 The loan was issued by Ansa Merchant Bank Limited in May 2018 in respect of the Columbus Energy Resources Plc business. Repayments are over 4 years and the loan is denominated in Trinidad and Tobago Dollars. The loan was fully repaid during 2021. 5 In December 2019 the Columbus Energy Resources Plc business drew down on a new working capital loan facility with Republic Bank Limited. Repayments were over 3 years with the final payment due in November 2022. The loan is denominated in Trinidad and Tobago Dollars. The loan was fully repaid during 2021. 6 In July 2019 the Columbus Energy Resources Plc business drew down on a new working capital loan facility (New Sunchit Loan). Repayments are over 5 years with the final payment due in June 2024. The loan is denominated in Trinidad and Tobago Dollars. 7 In January 2020 the Columbus Energy Resources Plc business drew down on a new working capital facility (Solution One). Repayments are over 1 year and the loans are denominated in Trinidad and Tobago Dollars. The loan was fully repaid in 2021. The carrying amounts of all the borrowings approximate to their fair value. Group Borrowings Leases Cash Total Net debt reconciliation $ 000's $ 000's $ 000's $ 000's At 1 January 2020 - (205) 11,152 10,947 Acquisition of Columbus Energy Resources PLC (note 15) (3,276) (56) 1,039 (2,293) Cash flows 1,179 216 5,491 6,886 Acquisition - leases - (60) - (60) Foreign exchange adjustments (40) - 180 140 At 31 December 2020 (2,137) (105) 17,862 15,620 At 1 January 2021 (2,137) (105) 17,862 15,620 Cash flows (1,105) 93 (16,364) (17,376) Acquisition - leases - (17) - (17) Realisation of conversion feature 2,899 - - 2,899 Other (371) (7) - (378) Foreign exchange adjustments (116) - 57 (59) At 31 December 2021 (830) (36) 1,555 689 Net debt reconciliation Company Borrowings $ 000's Leases $ 000's Cash $ 000's Total $ 000's At 1 January 2020 - (28) 11,100 11,072 Cash flows (1,120) 15 5,917 4,812 Foreign exchange adjustments - - 143 143 At 31 December 2020 (1,120) (13) 17,160 16,027 At 1 January 2021 (1,120) (13) 17,160 16,027 Cash flows (1,753) 17 (16,149) (17,885) Acquisition - leases - (17) - (17) Realisation of conversion feature 2,899 - - 2,899 Other (371) - - (371) Foreign exchange adjustments (117) (1) (97) (215) At 31 December 2021 (462) (14) 914 438 22 Provisions - Group Decommissioning $ 000's Other $ 000's Total $ 000's At 1 January 2020 - - - Acquisition of Columbus Energy Resources PLC 5,226 943 6,169 New provisions and allocations 26 4 30 Unwinding of discount 24 - 24 Foreign exchange difference on translation 91 - 91 At 31 December 2020 5,367 947 6,314 At 1 January 2021 5,367 947 6,314 New provisions and allocations 341 - 341 Unwinding of discount (126) - (126) Foreign exchange difference on translation (230) (5) (235) At 31 December 2021 5,352 942 6,294 * The provisions relate to the estimated costs of the removal of Trinidadian and Spanish production facilities and site restoration at the end of the production lives of the facilities. Decommissioning provisions in Trinidad and Tobago have been subject to a discount rate of 5% (2020: 6%), expected cost inflation of 1.4% (2020: 1.3%) and assumes an average expected year of cessation of production of 2032. Decommissioning provisions relating to facilities in Spain are undiscounted and uninflated as the field is no longer operating. Other provisions In one of the Group's Trinidad and Tobago subsidiaries, there are licence fees relating to an exploration and production licence that the subsidiary is expecting to settle by way of negotiation with the Trinidadian Ministry of Energy and Energy Industries ("MEEI"). A provision has been organised to reflect management's best estimate of its obligation at balance sheet date. However, the Group has formally written to MEEI proposing rebasing of this licence whereby all claimed past dues would be cancelled, the annual licence fees rebased to an appropriate level, and a new future work programme agreed. To the extent a suitable arrangement of this nature cannot be agreed with MEEI, the Company intends to surrender the licence, in which case the subsidiary company holding the licence will be placed into administration, and all liabilities claimed in respect of this licence will be eliminated, without recourse to the Company, as confirmed by a legal opinion. 23 Share capital - Group & Company Called up, allotted, issued and fully paid ordinary shares of 0.02p (pre-consolidation 0.002p) each Number of shares Nominal value $ 000's Share premium $ 000's At 1 January 2020 2,134,762,786 61 96,157 Shares issued at average price of 2.4p per share 48,000,000 1 1,454 Shares issued at average price of 2p per share 3,250,000 - 82 Shares issued at average price of 1p per share 62,500,000 2 788 Shares issued at average price of 0.9p per share 79,059,830 2 914 Shares issued at average price of 1p per share 120,866,141 3 1472 Shares issued at average price of 2p per share 35,337,328 1 884 Shares issued at average price of 2.1p per share 868,888,792 23 24,220 Shares issued at average price of 2.6p per share 61,713,763 2 2,087 Shares issued at average price of 2.9p per share 5,429,206 - 205 Shares issued at average price of 2p per share 475,000,000 12 11,417 Shares issued at average price of 2p per share 154,552,357 4 1,190 Shares issued at average price of 2.9p per share 5,429,206 - 211 Shares issued at average price of 2.9p per share 35,759,140 1 1,412 Shares issued at average price of 2p per share 412,500,000 11 10,126 Shares issued at average price of 2p per share 3,624,800 - 98 At 31 December 2020 before capital reorganisation 4,506,673,349 123 152,717 At 31 December 2020 after capital reorganisation 450,667,335 123 152,717 At 1 January 2021 450,667,335 123 152,717 Shares issued at average price of 1.9p per share 19,687,500 5 5,106 Shares issued at average price of 0.27p per share 13,500,000 4 515 Shares issued at average price of 0.15p per share 14,938,577 4 300 Shares issued at average price of 3.5p per share 196,688,957 55 8,689 Shares issued at average price of 3.5p per share 74,658,600 21 3,665 Shares issued at average price of 0.15p per share 19,111,423 5 391 Shares issued at average price of 0.15p per share 7,270,522 1 351 At 31 December 2021 796,522,914 218 171,734 On 28 May 2021, the Company organised its share capital by way of a share consolidation reducing the number of ordinary shares in issue by a ratio of 10:1. The nominal value of each ordinary share post share consolidation is 0.02p (pre-consolidation: 0.002p). During the year, approximately 346 million shares were issued on a post consolidation basis. At the end of 2021, the number of shares in issue comprised approximately 797 million ordinary shares. During the year, transaction costs for issued share capital totalled $754,000 (2020: $1,888,000). Of these $19,000 were paid in cash, $391,000 were offset against the proceeds received from the issue of shares, with the balance settled through the issue of share capital, these amounts were allocated against share premium. The total authorised number of ordinary shares at 31 December 2021 is 1,000,000,000 shares with a par value of 0.02 pence per share (2020: pre-consolidation 10,000,000,000 shares with a par value of 0.002p). All issued shares of 0.02 pence are fully paid. Post balance sheet date, as part of a restructuring and recapitalisation exercise, the Group issued 8,823,676,565 new ordinary shares of 0.02p each through a placing and open offer to existing shareholders. Refer to note 28 for further details. As at the date of this report the Company's issued share capital consists of 9,620,199,479 Ordinary Shares. Reverse acquisition Total other Merger reserve reserve reserves Other reserves $ 000's $ 000's $ 000's At 31 December 2020 77,131 (53,847) 23,284 At 31 December 2021 77,131 (53,847) 23,284 In 2008, BPC Jersey Limited acquired Falkland Gold and Minerals Limited ('FGML') via a reverse acquisition, giving rise to the reverse acquisition reserve. BPC Jersey Limited was the acquirer of FGML although FGML became the legal parent of the Group on the acquisition date. FGML subsequently changed its name to BPC Limited. The merger reserve arose in 2010 as a result of the Group undergoing a Scheme of Arrangement which saw the shares in the then parent company BPC Limited replaced with shares in Challenger Energy Group PLC. In the Company Financial Statements, the Other reserve balance of $29,535,463 (2020: 29,535,463) arises from the issue of shares in the Company as part of the Scheme of Arrangement undertaken in 2010, which saw the shares in the then parent company BPC Limited replaced with shares in Challenger Energy Group PLC (formerly known as Bahamas Petroleum Company PLC and known as (BPC PLC at that point), which became the new parent company of the Group. 24 Share based payments reserve - Group & Company (A) Options and warrants Share options have been granted to Directors, selected employees and consultants to the Company. The Group had no legal or constructive obligation to repurchase or settle any options in cash. Movements in the number of share options and warrants outstanding during the year are as follows: 2021 2020 Average exercise price per share No. Options & Warrants Average exercise price per share No. Options & Warrants At beginning of year before capital reorganisation 2.76p 486,159,599 2.34p 200,357,073 At beginning of year after capital reorganisation Expired Granted Exercised 27.60p 33.08p 8.66p - 48,615,960 (21,285,707) 69,467,641 - - - 2.87p 0.0072p - - 309,706,720 (23,904,194) At end of year 12.81p 96,797,894 2.76p 486,159,599 Exercisable at end of year - - 1.97p 106,659,599 On 31 October 2019, all options then in issue were cancelled by mutual consent with the option holders, and new options were issued during 2020 and 2021 to various parties including management, various consultants and various finance providers as detailed below. The fair value of the warrants and options granted in the year was estimated using the Black Scholes model. The inputs and assumptions used in calculating the fair value of options granted in the year were as follows: Warrants and options granted in 2021 Name Date granted Share price at date of grant pence Vesting date/criteria Number Exercise price pence Expiry date Expected volatility Expected life (years) Risk Dividend free yield return Fair value per option $ Finance provider 11/01/2021 1.849 11/01/2021 4,687,500 30.000 11/01/2022 14% 0.43 (0.11%) - $0.00 Finance provider 11/01/2021 1.849 11/01/2021 4,687,500 40.000 11/01/2022 14% 0.43 (0.11%) - $0.00 Consultant 25/01/2021 2.020 25/01/2021 937,500 20.000 25/01/2024 14% 0.39 (0.13%) - $0.12 Finance provider 27/05/2021 3.000 27/05/2021 1,300,000 3.500 26/05/2025 82% 0.32 0.06% - $0.06 Consultant 01/06/2021 2.890 01/06/2021 3,455,141 3.500 01/06/2023 82% 0.32 0.06% - $0.06 Consultant 01/06/2021 2.890 01/06/2021 2,235,715 3.500 01/06/2023 82% 0.32 0.06% - $0.06 Finance provider 01/06/2021 2.890 01/06/2021 1,964,285 3.500 01/06/2023 82% 0.32 0.06% - $0.06 Finance provider 01/06/2021 2.890 01/06/2021 1,000,000 3.500 01/06/2023 82% 0.32 0.06% - $0.06 Management options (Tranche 1) 23/07/2021 1.950 23/07/2021 16,000,000 4.000 22/07/2026 30% 0.41 0.08% - $0.00 Management options (Tranche 2) 23/07/2021 1.950 31/12/2021 16,000,000 4.500 22/07/2026 89% 0.87 0.08% - $0.01 Management options (Tranche 3) 23/07/2021 1.950 31/03/2022 16,000,000 5.000 22/07/2026 18% 0.87 0.08% - $0.00 Finance provider 02/09/2021 1.385 02/09/2021 1,200,000 3.500 01/09/2025 27% 0.3 0.20% - $0.00 69,467,641 Warrants and options granted in 2020 Name Date granted Share price at date of grant pence Vesting date/criteria Number Exercise price pence Expiry date Expected volatility Expected life (years) Risk Dividend free yield return Fair value per option $ Management options (Tranche 3) 14/08/2020 1.899 19/12/2020 8,700,000 2.800 14/08/2025 14% 0.53 (0.02%) - - CERP Management nil cost options 14/08/2020 1.899 17/08/2020 17,029,394 0.002 2024-2027 - - - - - Consultant 07/10/2020 1.939 07/10/2020 3,624,800 2.000 07/10/2022 35% 0.73 (0.01%) - $0.26 Management options (Tranche 2) 14/10/2020 2.300 14/10/2020 12,500,000 2.400 14/10/2025 35% 0.71 (0.04%) - $0.29 Management options (Tranche 3) 14/10/2020 2.300 19/12/2020 8,300,000 2.800 14/10/2025 14% 0.52 (0.04%) - - Consultant 15/10/2020 2.255 15/10/2020 17,052,526 2.000 15/10/2022 35% 0.71 (0.05%) - $0.51 Management options (Tranche 2) 30/11/2020 2.525 30/11/2020 12,500,000 2.400 30/11/2025 35% 0.58 (0.02%) - $0.30 Finance provider 13/12/2020 2.354 13/12/2020 93,750,000 3.000 13/12/2021 14% 0.55 (0.13%) - - Finance provider 13/12/2020 2.354 13/12/2020 93,750,000 4.000 13/12/2021 14% 0.55 (0.13%) - - Consultant 21/12/2020 2.128 21/12/2020 37,500,000 2.000 21/12/2023 14% 0.52 (0.10%) - $0.20 Finance provider 21/12/2020 2.128 21/12/2020 5,000,000 2.000 21/12/2023 14% 0.52 (0.10%) - $0.20 309,706,720 The weighted average remaining contractual life of the options and warrants in issue at 31 December 2021 was 3.25 years (31 December 2020: 2.46 years) and the weighted average exercise price of these instruments was 12.81 pence per share (31 December 2020: 2.76 pence). The range of exercise prices for options outstanding at 31 December 2021 was 3.5 pence to 40 pence (31 December 2020: 2.0 pence to 4.0 pence). The expected price volatility used in calculating the fair value of options and warrants granted by the Company is determined based on the historical volatility of the Company share price (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information. Post balance sheet date, as part of the reorganisation and restructure of the Group, the substantial majority of options in issue were cancelled in agreement with their holders. Of those options that were not cancelled the exercise price is such that the options are expected to lapse unexercised in accordance with their terms. Moreover, new options have been issued to management, staff and various external consultants and advisors to the Group. Refer to note 28 for further details. B) Salary and fee deferrals On 17 December 2014, the then Directors entered into an agreement for the deferral of 20% of their salary and fees. On 1 April 2016, the then Directors entered into a further agreement for the deferral of 50% of their fees and the then CEO entered into an agreement for the deferral of 90% of his salary. On 1 January 2018 the then Directors (excluding the CEO) entered into a further agreement for the deferral of 90% of their fees. In general terms the deferrals were conditional on certain milestones being met and to be satisfied in cash and in shares (calculated as the value of fees/salary forgone divided by the volume weighted average closing price of the Company shares over each month). From 1 July 2018 the ongoing deferral of the then CEO's salary into conditional share entitlements ceased, resulting in no further share-based payment charges arising as regards the CEO salary from that date. See note 27 for further details. On 15 October 2020, the Board determined that the criteria for cessation and settlement of all deferred fees, namely the raising of at least $25m in funding for the Perseverance 1 well, had been met. Furthermore, the Board elected to novate all deferred fees that were to be settled in cash into shares. Consequently, all deferred fees and salaries by directors and executive management were settled through the issuance of 146,818,765 new ordinary shares in the Company. See note 27 for further details. Under IFRS 2, entitlements to ordinary shares under the above agreements constitute the issuance of equity settled share-based payment instruments with the following terms: �� Each month of deferred fee entitlements was treated as a separate grant of options with the date of grant being the first day of the month. �� The fair value of the options at grant was estimated as the share price on the date of grant. �� Options awarded each month vested at the end of that month. The value of the instruments was estimated and was being charged to the statement of total comprehensive income in monthly tranches as each month's award of options vested. Following approval by the Company shareholders at the AGM held on 17 September 2019, conditional entitlements to 21,300,000 shares in the Company were granted to consultants in lieu of fees. All conditions associated with these entitlements were identical to those granted to the Directors in the prior years. The fair value of these instruments was estimated by reference to the agreed value of services received by the Group. The value of the instruments was estimated and was being charged to the statement of total comprehensive income in monthly tranches as each month's award of options vested, up to 30 September 2020, being the effective settlement date of the deferred pay arrangements. C) Expense arising from share-based payment transactions Total expense arising from equity-settled share-based payment transactions: 2021 2020 $ 000's $ 000's Options and warrants 84 274 Salary deferrals - 86 Total 84 360 The above charges in relation to share-based payments include $9,000 relating to Directors (2020: $126,000), $8,000 related to staff and consultants (2020: $45,000), $43,000 relating to warrants granted to the Company's advisors (2020: $177,000) and $24,000 (2020: $12,000) relating to options granted to providers of conditional convertible note finance. 2021 2020 Share settled payments $ 000's $ 000's Professional advisory fees* 482 2,245 Issuance of shares in satisfaction of deferred salaries 506 1,425 Total 988 3,670 * Represents the fair value of shares issued to various advisors and consultants in lieu of cash for their fees. Included in this amount is a $344,000 advisory fee in respect of the May 2021 share placement. In 2020 shares were issued to various advisors for fees in relation to the acquisition of Columbus on 7 August 2020, further shares were issued to advisors following the share placements in October and December 2020. The fair value of these shares has been calculated based on the number of shares issued and the market price of the Company shares on the date of issuance. These expenses have been recognised in the Group statement of comprehensive income under "Professional fees - share settled" within administrative expenses or share premium with respect to the $344,000 advisory fee. These transactions do not fall within the scope of IFRS 2, Share based payments. ** Represents the fair value of shares issued to directors and staff during the year in settlement of deferred salary and fees, less the total value of accrued salaries and fees on the date of settlement. The fair value of these shares has been calculated based on the number of shares issued and the market price of the Company shares on the date of issuance. Accruals for deferred salary and fees had been recognised based on the value of contractual payments forgone. The excess of the fair value of these shares issued over the total accrued costs for deferred salary and fees to the date of settlement has been recognised in the Group statement of comprehensive income under "Staff costs - share settled" within 'Administrative expenses'. These transactions do not fall within the scope of IFRS 2, Share based payments. The table below discloses the total share-based payment charges for the year included in the statement of comprehensive income by expense category. 2021 $ 000's 2020 $ 000's Staff costs 17 171 Professional fees 43 177 Finance costs 24 12 Total 84 360 25 Financial instruments and risk management - Group & Company The Group's activities expose it to a variety of financial risks: oil price, liquidity, interest rate, foreign exchange, credit and capital risk. The Group's overall risk management programme focuses on minimising potential adverse effects on the financial performance of the Group. Risk management is carried out by the CEO under policies approved by the Board of Directors. The CEO identifies, evaluates and addresses financial risks in close cooperation with the Group's management. The Board provides principles for overall risk management, as well as policies covering specific areas, such as mitigating foreign exchange risk, interest rate risk, credit risk and investing excess liquidity. The Group uses financial instruments comprising cash, and debtors/creditors that arise from its operations. The net fair value of financial assets and liabilities approximates the carrying values disclosed in the financial statements. The financial assets comprise cash balances in bank Financial Statements at call. Oil Price Risk The Group has been exposed to commodity price risk regarding its sales of crude oil which is an internationally traded commodity. The Group sales prices are closely linked to the West Texas Intermediate (WTI) Crude Oil benchmark for sales in Trinidad and Tobago. The pricing of Group oil sales in Trinidad and Tobago is set by the state oil company Heritage and the price realised by the Company is typically at approximately 10% discount to WTI benchmark. The Group does not take out hedging instruments for changes in oil prices, with the risks to Group cashflows associated with changes in the oil price obtained from Heritage being mitigated by controls over elective costs of well workovers and other such production enhancing expenditure. The spot prices per barrel for WTI are shown below: 2021 2020 Low Average High Low Average High US$ US$ US$ US$ US$ US$ WTI 47.47 68.14 85.64 35.79 42.00 49.10 The below shows the Group's revenue sensitivity (gross of royalty deductions) to an average price that is up to 30% lower and up to 30% higher than the average price for that year: 2021 Decrease Current Increase 30% $ 000's 20% $ 000's 10% $ 000's $ 000's 10% $ 000's 20% $ 000's 30% $ 000's Trinidad and Tobago 4,151 4,744 5,337 5,930 6,523 7,116 7,709 Total 4,151 4,744 5,337 5,930 6,523 7,116 7,709 2020 Decrease Current Increase 30% $ 000's 20% $ 000's 10% $ 000's $ 000's 10% $ 000's 20% $ 000's 30% $ 000's Trinidad and Tobago 1,253 1,432 1,611 1,790 1,969 2,148 2,327 Total 1,253 1,432 1,611 1,790 1,969 2,148 2,327 Liquidity risk The Group monitors its rolling cash flow forecasts and liquidity requirements to ensure it has sufficient cash to meet its operational needs. Surplus cash is invested in interest bearing current Financial Statements and money market deposits. Future funding requirements The Group's internal cashflow forecasts monitor both the short and long-term timelines, factoring in the known risks and uncertainties. These forecasts are regularly updated and demonstrate that with the current cash reserves and forecasted future revenue and available sources of funding, the Group is able to continue in operation for at least the next 12 months. The Group financial statements have therefore been prepared on a going concern basis. See noted 1.28 (ii) for further detail. Financial liabilities The Group's financial liabilities comprise its trade and other payables and lease liabilities. Trade and other payables all fall due within 1 year and it is the Group's payment policy to settle amounts in accordance with agreed terms which is typically 30 days. The tables below analyse the Group's financial liabilities into relevant maturity groupings based on their contractual maturities for all non-derivative financial liabilities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances, because the impact of discounting is not significant. Contractual maturities of financial liabilities at Less than 6 months 6 to 12 months Between 1 and 2 years Between 2 and 5 years Total contractual cash outflows Carrying amount 31 December 2021 - Group $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's Trade and other payables 23,537 - - - 23,537 23,537 Lease liabilities 30 6 - - 36 36 Borrowings 607 36 187 - 830 830 Total 24,174 42 187 - 24,403 24,403 Note: The amounts above do not reflect the effect of the restructuring commenced by the Group in late 2021 as the financial settlement of a substantial portion of these liabilities occurred in 2022 (see further information in Note 19 and Note 28). Contractual maturities of financial liabilities at Less than 6 months 6 to 12 months Between 1 and 2 years Between 2 and 5 years Total contractual cash outflows Carrying amount 31 December 2021 - Company $ 000's $ 000's $ 000's $ 000's $ 000's $ 000's Trade and other payables 10,775 - - - 10,775 10,775 Lease liabilities 9 5 - - 14 14 Borrowings 462 - - - 462 462 Total 11,246 5 - - 11,251 11,251 Note: The amounts above do not reflect the effect of the restructuring commenced by the Group in late 2021 as the financial settlement of a substantial portion of these liabilities occurred in 2022 (see further information in Note 19 and Note 28). Contractual maturities of financial liabilities at 31 December 2020 - Group Less than 6 months $ 000's 6 to 12 months $ 000's Between 1 and 2 years $ 000's Between 2 and 5 years $ 000's Total contractual cash outflows $ 000's Carrying amount $ 000's Trade and other payables 18,620 - - - 18,620 18,620 Lease liabilities 41 52 12 - 105 105 Borrowings 12 486 198 1,441 2,137 2,137 Total 18,673 538 210 1,441 20,862 20,862 Contractual maturities of financial liabilities at 31 December 2020 - Company Less than 6 months $ 000's Between 6 to 12 months 1 and 2 years $ 000's $ 000's Between 2 and 5 years $ 000's Total contractual cash outflows $ 000's Carrying amount $ 000's Trade and other payables 504 - - - 504 504 Lease liabilities 8 5 - - 13 13 Borrowings - - - 1,120 1,120 1,120 Total 512 5 - 1,120 1,637 1,637 Interest rate risk The Group's strategy for managing cash is to maximise interest income whilst ensuring its availability to match the profile of the Group's expenditure. This is achieved by regular monitoring of interest rates and monthly review of expenditure forecasts. The Group's exposure to interest rate risk relates to the Group's cash deposits which are linked to short term deposit rates and therefore affected by changes in bank base rates. At 31 December 2021 short term deposit rates were in the range of 0% to 0.5% (31 December 2020: 0% to 0.5%) and therefore the interest rate risk is not considered significant to the Group. An increase in interest rate of 0.25% in the year would have had an insignificant effect on the Group's loss for the year and the prior year. Group borrowings are at fixed interest rates and therefore do not present an interest rate risk. Foreign currency risk The Group operates internationally and therefore is exposed to foreign exchange risk arising from currency exposures, primarily with regard to Pound Sterling, Trinidad and Tobago Dollars and Euros. The Company has a policy of not hedging foreign exchange and therefore takes market rates in respect of currency risk; however, it does review its currency exposures on an ad hoc basis. Currency exposures relating to monetary assets held by foreign operations are included within the foreign exchange reserve in the Group statement of financial position. The following table details the Group's sensitivity to a 10% increase and decrease in the US Dollar against the relevant foreign currencies of Pound Sterling, Euro and Trinidadian Dollar. 10% represents management's assessment of the reasonably possible change in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated investments and other financial assets and liabilities and adjusts their translation at the year-end for a 10% change in foreign currency rates. The table below sets out the potential exposure, where the 10% increase or decrease refers to a strengthening or weakening of the US Dollar: Profit or loss sensitivity Equity sensitivity 10% increase $ 000's 10% decrease $ 000's 10% increase $ 000's 10% decrease $ 000's Year ended 31 December 2021 Euro Pounds Sterling Trinidad and Tobago dollars 32 (30) 654 (39) 36 (800) 225 - 537 (276) - (656) Total 656 (803) 762 (932) Year ended 31 December 2020 Euro Pounds Sterling Trinidad and Tobago dollars 17 63 243 (21) (77) (297) 249 21 331 (304) (26) (404) Total 323 (395) 601 (734) Rates of exchange to $1 used in the financial statements were as follows: At 31 December 2021 Average for the relevant consolidated year to 31 December 2021 At 31 December 2020 Average for the relevant consolidated year to 31 December 2020 Euro 0.845 0.883 0.814 0.842 Pounds Sterling 0.727 0.741 0.734 0.761 Trinidad and Tobago dollars 6.791 6.796 6.762 6.78 The Group holds cash as a liquid resource to fund the obligations of the Group. The Group's cash balances are held in various currencies. The currency profile of the financial assets is as follows: Cash and short-term deposits 2021 $ 000's 2020 $ 000's Sterling 341 723 Euros 27 3 US dollars 847 16,733 Trinidad and Tobago dollars 340 403 Total 1,555 17,862 The Group also has operations denominated in the Bahamian Dollar. As the Bahamian Dollar is pegged to the US Dollar on a one for one basis these operations do not give rise to any currency exchange exposures. Credit risk Credit risk is managed on a Group basis. Credit risk arises from prepayments to suppliers for services, recoverable amounts from joint venture partners, cash and cash equivalents, restricted cash and funds held in escrow and abandonment funds. Prepayments made to suppliers are reviewed to assess the credit risk presented before entering into contractual relationships that give rise to prepaid balances. Periodic review of joint venture party balances is undertaken to assess recoverability and discussions held with the partners to address any potential recoverability issues. For banks and financial institutions, only independently rated parties with a minimum rating of 'A' are accepted. In order to mitigate credit risk arising from cash balances the Group holds cash reserves with more than one counterparty. Funds in escrow and abandonment funds are held with the Government of Trinidad and Tobago and so are not considered to be subject to a material level of credit risk. For the Company, credit risk also arises on recoverability of loans due from subsidiary undertakings. Management assesses and manages these risks through regular budgeting and performance analysis. Where it is deemed that there is low probability with regards to the timing of recovery amounts receivable from subsidiary undertakings provisions have been recognised, refer to note 16 for further details. The Group applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. Capital risk management Capital is defined by the Group as all equity reserves, including share capital and share premium. The Group's objectives when managing capital are to safeguard the Group's ability to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to support the Group's business operations and maximise shareholder value. The Group is not subject to any externally imposed capital requirements. 26 Commitments and contingencies - Group & Company Contingencies One of the Group companies, CEG Inniss-Trinity Trinidad Limited (formerly known as FRAM Exploration (Trinidad) Ltd), has been named as a defendant in an ongoing matter in the High Court of Trinidad and Tobago in place since 2019, and still ongoing at 31 December 2021. The Group's exposure, in the event of an unsuccessful defence of the claim, is estimated to be in the region of $0.7m to $0.9m, referable to the sums claimed, interest and legal costs. The Group has filed a counterclaim which, if successful, may either fully extinguish the Group's potential exposure or will substantially reduce the Group's exposure. The parties to the claims continue to be in the process of settlement discussions. The matter has not been concluded and its outcome cannot be reliably estimated at this stage. In accordance with International Accounting Standards (IASs) - 10 and 37, no provision has been made in these financial statements in relation to this matter. Other than as set out above, at 31 December 2021 and 2020, the Group and the Company had no other material contingent liabilities that require disclosure in these financial statements. Expenditure commitments The Group has certain minimum work obligations under the various of its licences across its portfolio. In general, minimum work obligations are specific to individual operating subsidiaries, and are not guaranteed by the Company, and are therefore non-recourse to the Company. The consequence of failing to meet a minimum work obligation, after unsuccessful renegotiation of these obligations with the relevant regulatory authorities, is the potential loss of the operating licence, and loss of associated business income. A summary of the nature of such minimum work obligations and estimated capital expenditure commitments, as of 31 December 2021, are set out below. Nature of work Within one year Within two to five years More than five years Trinidad and Tobago1 Drilling of 1 well; Heavy workovers; Water injection Drilling of 2 wells; Heavy workovers; Water injection Heavy workovers Suriname2 - An extended well test of 2 stratigraphic horizons - Uruguay3 - Geological and geophysical studies; 2,000km seismic licencing and reprocessing - The Bahamas4 N/A - pending licence renewal - Estimated Costs - $000 Within one year Within two to five years More than five years Trinidad and Tobago 1,450 4,750 450 Suriname - 700 - Uruguay - 800 - The Bahamas - - - Total 1,450 6,250 450 1 Trinidad and Tobago The Group has certain minimum work commitments under its licences in Trinidad and Tobago which generally include carrying out heavy work overs, drilling of exploration and / or development wells, undertaking enhanced oil recovery projects including water injection and / or carbon dioxide injection. As of 31 December 2021, the term of one of the Group's licences was extended to 31 March 2022 (and, subsequent to the year end, to 30 June 2022 and then 30 September 2022) to allow for ministerial approval required for the finalisation and execution of the agreed form documentation in relation to a fresh enhanced production service contract ("EPSC") with 30 September 2031 expiry. The EPSC will include certain minimum work obligations comprising CO2 pilot project, heavy workovers and the drilling of new wells. 2 Suriname The Group holds an onshore licence for the exploration for and production of hydrocarbons in Suriname. Under the terms of this licence, the Group is obliged to undertake an extended well test in the licence area by October 2022. The Group has applied for an extension of the exploration period by 18 months in view of the Covid-19 pandemic and awaits confirmation of the extension from the Surinamese regulator. In parallel, the Group is undertaking detailed technical work to establish the design and scope for the extended well test. The Group expects that such work will be carried out during 2023. 3 Uruguay In June 2020, the Group was notified by ANCAP, the Uruguayan state oil company, of the award of the Area OFF-1 block offshore Uruguay. At the balance sheet date, formal issuance of the licence remained outstanding, however, subsequent to the balance sheet date, the licence was formally signed on 25 May 2022. As a consequence, the Group will have a commitment to undertake various technical investigations over the licence block before the expiry of the four-year exploration period commencing 25 August 2022. 4 The Bahamas On 21 February 2019, the Group received notification from the Bahamian Government of the extension of the term of its four southern licences to 31 December 2020, with the requirement that the Group commence an exploration well before the end of the extended term. In November 2020 the term of the licence period was extended to 30 June 2021 following the outbreak of the global Covid-19 pandemic and the declaration of the Group of force majeure under the terms of its licences. On 20 December 2020, the Group commenced the drilling of its licence obligation well in the Bahamas, Perseverance 1, which was completed on 7 February 2021. As such, at present, the Group does not have any committed work obligations in The Bahamas. In March 2021 the Company notified the Government of the Bahamas that it was renewing the four southern offshore exploration licences for a further three-year period, having discharged its obligations under the previous licence term. The Group remains in discussions with the Government over the terms of the renewal of these licences and, once renewed, will have the obligation to commence a further exploration well in the licence area before the expiry of the next three-year term. Annual licence rental commitments The Group is required under its Bahamian exploration licences to remit annual rentals in advance to the Government in respect of the licenced areas. On 27 February 2020, the Company advised that, consequent on the granting of Environmental Authorisation for the Perseverance #1 well, the Company and the Government of The Bahamas had agreed a process seeking a final agreement on the amount of licence fees payable for the balance of the second exploration period (including the additional period of time to which the licence period was extended as a result of force majeure). At the time, the parties entered into discussions with a view to finalising this outstanding matter. This discussion has been delayed owing to the State of Emergency declared and ongoing business disruption caused by the national response to the Covid-19 outbreak in The Bahamas. However, subject to said confirmation, the Company expects that an appropriate side-letter agreement will be finalised in due course. In March 2021 the Company notified the Government of The Bahamas that it was renewing the four southern offshore exploration licences for a further three-year period, having discharged its obligations under the previous licence term. The Group remains in discussions with the Government over the terms of the renewal of these licences, which will include agreement on the level of annual rental fees payable over the renewed term. The Group does not have any material annual rental payments payable on its licences in Trinidad and Tobago, and Suriname and Uruguay, except for licence fees in relation to an exploration and production licence that the subsidiary is expecting to settle by way of negotiation with the Trinidadian Ministry of Energy and Energy Industries ("MEEI") and expects to either relinquish the licence or retain with immaterial annual licence fees obligation (see Note 22 for further details). 27 Related party transactions - Group & Company Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. Transactions between other related parties are outlined below. Remuneration of Key Management Personnel The Directors of the Company are considered to be the Key Management Personnel. Details of the remuneration of the Directors of the Company are disclosed below, by each of the categories specified in IAS24 Related Party Disclosures. 2021 $ 000's 2020 $ 000's Short-term employee benefits 796 575 Share-settled payments* 506 992 Share-based payments 9 126 Total 1,311 1,693 * Represents the fair value of shares issued to directors during the year in settlement of deferred salary and fees, less the total value of accrued salaries and fees on the date of settlement. See note 7 for further details of the Directors' remuneration and note 24 for details of the Directors' share-based payment benefits. On 28 March 2019 the Company and the then CEO, Mr Simon Potter, agreed to extend the term of his CEO contract for a further 12 months. On expiry of the extended contract on 31 March 2020 the contract became cancellable by either party on a rolling 3 month notice period basis. Effective 1 September 2020, the Company and the then CEO, Mr Simon Potter, agreed an increase to the annual CEO salary from $375,000 to $600,000. On 15 October 2020, the then Board determined that the criteria for cessation and settlement of all deferred fees (see note 24B), namely the funding for the Perseverance 1 well, had been met. Furthermore, the then Board elected to novate all deferred fees that were to be settled in cash into shares. Consequently, all deferred fees and salaries owing to directors were settled through the issuance of 107,413,150 new ordinary shares in the Company. On 31 October 2019, share options were granted to key management personnel as follows. Tranche 1 Options Tranche 2 Options Tranche 3 Options Total Simon Potter 20,000,000 15,000,000 25,000,000 60,000,000 William Schrader (resigned 5 March 2022) 1,500,000 750,000 750,000 3,000,000 James Smith (resigned 5 March 2022) 750,000 375,000 375,000 1,500,000 Adrian Collins (resigned 25 May 2021) 750,000 375,000 375,000 1,500,000 Ross McDonald (resigned 1 June 2021) 750,000 375,000 375,000 1,500,000 Total 23,750,000 16,875,000 26,875,000 67,500,000 On 31 October 2019, all share options previously granted to key management personnel were cancelled by mutual consent, see note 24 for further details. On 31 October 2020, share options were granted to key management personnel as follows. Tranche 1 Options Tranche 2 Options Tranche 3 Options Total Simon Potter - 6,250,000 - 6,250,000 William Schrader (resigned 5 March 2022) - - - - James Smith (resigned 5 March 2022) - - - - Adrian Collins (resigned 25 May 2021) - - - - Ross McDonald (resigned 1 June 2021) - - - - Total - 6,250,000 - 6,250,000 On 30 November 2020, share options were granted to key management personnel as follows. Tranche 1 Options Tranche 2 Options Tranche 3 Options Total Simon Potter - William Schrader (resigned 5 March 2022) - James Smith (resigned 5 March 2022) - Adrian Collins (resigned 25 May 2021) - Ross McDonald (resigned 1 June 2021) - 6,250,000 - - - - - 6,250,000 - - - - - - - - Total - 6,250,000 - 6,250,000 On 23 July 2021, share options were granted to key management personnel as follows. Tranche 1 Options Tranche 2 Options Tranche 3 Options Total Simon Potter 500,000 500,000 500,000 1,500,000 Eytan Uliel (appointed 1 June 2021) 5,500,000 5,500,000 5,500,000 16,500,000 William Schrader (resigned 5 March 2022) 500,000 500,000 500,000 1,500,000 James Smith (resigned 5 March 2022) 500,000 500,000 500,000 1,500,000 Total 7,000,000 7,000,000 7,000,000 21,000,000 Post balance sheet date, as part of the reorganisation and restructure of the Group, the options on issue to management personnel were cancelled in agreement with their holders with new options issued. Refer to note 28 for further details. There is no ultimate controlling party of the Group. Other related party transactions During the current and prior year, the Group operated banking facilities with RBC Royal Bank (Bahamas) Limited in Nassau, The Bahamas. Ross McDonald, a director of the Company during the year, is also a director of RBC Royal Bank (Bahamas) Limited. At 31 December 2021, $4,000 was held on deposit with RBC Royal Bank (Bahamas) Limited (31 December 2020: $97,000). Transactions between the Company and its subsidiaries during the year are as follows: 2021 2020 $ 000's $ 000's Loans, goods and services provided to Columbus Energy Resources Ltd 2,262 6,897 Loans, goods and services provided to BPC Ltd 29,348 17,117 Loans, goods and services provided to Columbus Energy Resources South America B.V. 64 64 Loans, goods and services provided to CEG Bonasse Trinidad Ltd 2,667 35 Loans, goods and services provided to CEG Goudron Trinidad Ltd 88 69 Loans, goods and services provided to CEG Management Services Ltd 273 44 Loans, goods and services provided to CEG Icacos Trinidad Ltd 49 2 Loans, goods and services provided to CEG Inniss-Trinity Trinidad Ltd 123 40 Loans, goods and services provided to CEG South Erin Trinidad Ltd 67 19 Loans, goods and services provided to T-REX Resources (Trinidad) Ltd 38 2 Loans, goods and services provided to Compa��ia Petrolifera de Sedano S.L.U. 182 - 35,161 24,289 At balance sheet date the Company is holding payables balance totalling $7,916,000 relating to outstanding Perseverance-1 well creditors which remain outstanding. Consequently, the Company's cashflow statement reflects this non cash difference in the 'Advances to and payments on behalf of Group companies' line totalling $27,239,000. 28 Events after the reporting period - Group & Company On 13 December 2021 the Group announced that it had engaged in a comprehensive restructuring process. Through this process, agreements had been reached with various creditors and contractors such that the previously reported aggregate balance sheet payables, debts and potential liability exposure position of approximately $23.5 million was expected to be reduced by way of agreed discounted final settlement payments, such that following such payments only approximately $2.5 million of balance sheet payables, debts and potential liability exposures would remain in total, being the estimated amounts required to be settled in cash over the foreseeable future. However, as the substantial portion of the settlements agreed in accordance with the restructuring exercise were only due for payment in 2022, the impact of the restructuring was deemed to be a non-adjusting post balance sheet event and the amounts on the balance sheet as of 31 December 2021 do not fully reflect the outcome of the restructuring. The post balance sheet date outcome of the restructuring is summarised below: �� Perseverance-1 creditors: all remaining creditors from the drilling of the Perseverance-1 well in The Bahamas in early 2021 (approximately US$11.3 million) agreed to be settled for total payment of approximately $2.0 million in cash, of which approximately $0.6 million had been paid prior to the year-end, with the remaining balance of approximately $1.4 million payable during 2022; �� Trinidad and Tobago payables and creditors: approximately $3.0 million of payables and legacy creditors in Trinidad and Tobago had agreed to be settled for total payment of approximately $1.0 million in cash, of which approximately $0.6 million had been paid prior to the year-end, and approximately $0.4 million payable during 2022, to reduce remaining payables and legacy creditors in Trinidad and Tobago to approximately $1.5 million. These payables and creditors all are at the level of Trinidadian subsidiary entities with no recourse to the Company; �� Claims, legacy licencing payables and potential exposures in Trinidad and Tobago: approximately $6.5 million of legacy claims, licencing payables and potential financial exposures in Trinidad and Tobago were expected to be reduced to less than US$1.0 million at nil cash cost. The residual amount had been rescheduled on the basis of various agreed deferral and payment plans, and was expected to be eliminated in the ordinary course of business over the following 18 months; �� Convertible notes: approximately $0.7 million of outstanding convertible notes (inclusive of accrued coupon) was agreed to be converted into ordinary shares thereby eliminating this long-term liability at nil cash cost - this conversion occurred in March 2022; and �� Well control insurance balancing payment: as a result of the ultimate cost of the Perseverance-1 well, a "top-up" premium amount may be sought by insurers in relation to the final overall cost of the insurance. As at the date of this report the matter remains subject to negotiation with the insurers given that the well was completed safely and without incident over 18 months ago. On 26 January 2022 the Group announced its intention to undertake a fundraising of up to ��6.0 million (the "Fundraising") by way of a ��4.0 million firm and conditional placing, including a firm and conditional direct subscription, (the "Placing") of new ordinary shares of 0.02 pence each in the capital of the Company ("Ordinary Shares") to new institutional and other investors (the "Placing Shares") and a ��2.0 million offer of new Ordinary Shares to existing shareholders (the "Broker Option"). Completion of the fundraising was conditional on passing of a number of resolutions at an EGM of shareholders that was called for 4 March 2022. On 4 March 2022 the Group announced that each of the three resolutions put to shareholders at the Extraordinary General Meeting held at 11.00 a.m. on 4 March 2022 (the "EGM") were duly passed. As a result, the Company proceeded to issue a total of 6,601,216,434 ordinary shares in respect of the Placing and Broker Option, as well as up to 1,903,058,641 Settlement Shares as set out in the Notice of EGM. The shares were issued and admitted to trading on AIM in two tranches. As part of this process approximately ��400,000 of convertible loan notes outstanding as of 31 December 2021 were converted into shares, resulting in the issuance of a total of 570,000,000 new ordinary shares in the Company. Accordingly, the Company completed the Fundraising on 4 March 2022, which was oversubscribed, with the Company ultimately raising approximately ��7.3 million (US$9.74 million) (before fees). At the same time a number of changes to the Board and management team took effect on 5 March 2022 including: - Iain McKendrick joining the Board as Non-Executive Chairman; - William Schrader and James Smith stepping down from the Board; - Tim Eastmond was appointed as Chief Financial Officer of Group joining the Board as an Executive Director and subsequently resigning on 15 July 2022; and - Gagan Khurana, the Group's Commercial Manager, assuming the role of Chief Commercial Officer. In addition, as part of the restructuring process, mutual agreements were reached with certain of the Board members, staff, consultants and advisers of the Group to cancel approximately 64 million options in issue as of 31 December 2021. As part of the restructuring the Company advised of its intention to implement revised incentive arrangements on completion of the Company's restructuring. On 26 May 2022 the Group announced that final approvals were granted by decree of the President of Uruguay resulting in the AREA OFF-1 licence being formally signed on 25 May 2022, with the first 4-year exploration period under the licence commencing on 25 August 2022. On 15 July 2022, Mr Tim Eastmond resigned as a Chief Financial Officer and Executive Director of the Company for personal reasons and Mr Gagan Khurana, the Group's Chief Commercial Officer assumed the role of acting Chief Financial Officer in addition to his commercial duties. 29 Comprehensive expense for the year - Company The Company's expense for the year was $15,515,000 (2020: $12,392,000). Glossary 1P proved reserves 2P proved plus probable reserves 3P proved plus probable plus possible reserves AIM London Stock Exchange PLC's Alternative Investment Market barrel or bbl 42 US gallons of oil bbls barrels of oil best estimate or P50 the most likely estimate of a parameter based on all available data, also often termed the P50 (or the value of a probability distribution of outcomes at the 50% confidence level) bopd barrels of oil per day contingent resources those quantities of petroleum estimated, as of a given date, to be potentially recoverable from known accumulations, but the applied project(s) are not yet considered mature enough for commercial development due to one or more contingencies. Contingent Resources may include, for example, projects for which there are currently no viable markets, or where commercial recovery is dependent on technology under development, or where evaluation of the accumulation is insufficient to clearly assess commerciality CPR Competent Persons Report EOR enhanced oil recovery EUR Estimated Ultimate Recovery are those quantities of petroleum estimated, as of a given date, to be potentially recoverable (referred to as Remaining Estimated Ultimate Recoverable) plus those quantities that have been already produced EPSC Enhanced production service contract, the form of contract under which the Goudron field is operated on behalf of Heritage Heritage Heritage Petroleum Company Limited, the Trinidadian state-owned oil & gas company, and the successor of erstwhile Petroleum Company of Trinidad and Tobago Limited (Petrotrin) IPSC incremental production service contract, the form of contract under which the Inniss-Trinity field is operated on behalf of Heritage MEEI Trinidad and Tobago Ministry of Energy and Energy Industries (formally the Ministry of Energy and Energy Affairs, MEEA) m thousand mm million mmbbls million barrels of oil PPL private petroleum rights license proved reserves those quantities of petroleum, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be commercially recoverable (1P), from a given date forward, from known reservoirs and under defined economic conditions, operating methods, and government regulations probable reserves those additional reserves which analysis of geoscience and engineering data indicate are less likely to be recovered than Proved Reserves but more certain to be recovered than Possible Reserves. It is equally likely that actual remaining quantities recovered will be greater than or less than the sum of the estimated Proved plus Probable Reserves (2P) possible reserves those additional reserves which analysis of geoscience and engineering data suggest are less likely to be recoverable than Probable Reserves. The total quantities ultimately recovered from the project have a low probability to exceed the sum of Proved plus Probable plus Possible (3P) Reserves, which is equivalent to the high estimate scenario PRMS Petroleum Resources Management System PSC Production Sharing Contract reserves those quantities of petroleum anticipated to be commercially recovered by application of development projects to known accumulations from a given date forward under defined conditions Staatsolie Staatsolie Maatschappij Suriname N.V, the state oil company of Suriname STOIIP or oil in place stock tank oil initially in place, those quantities of oil that are estimated to be in known reservoirs prior to production commencing SWP South West Peninsula of Trinidad Weg naar Zee PSC signed with Staatsolie in October 2019 for the Weg naar Zee Block, an onshore appraisal and development project in Suriname WTI West Texas Intermediate, oil price marker crude Corporate Directory Company Number Registered in the Isle of Man with registered number 123863C Current Directors Iain McKendrick Simon Potter Non-Executive Chairman Non-Executive Stephen Bizzell Eytan Uliel Non-Executive Chief Executive Officer Secretary Benjamin Proffitt Registered Office and 34 North Quay Corporate Headquarters Douglas Isle of Man IM1 4LB Registrar Link Market Services (IOM) Limited Clinch's House Lord Street Douglas Isle of Man IM99 1RZ Auditor PricewaterhouseCoopers LLC Sixty Circular Road Douglas Isle of Man IM1 1SA Principal Legal Advisors Quinn Legal 30 Ridgeway Street Douglas Isle of Man IM1 1EL Clyde & Co St Botolph Building 138 Houndsditch London EC3A 7AR United Kingdom Nominated Advisor Strand Hanson Limited 26 Mount Row London W1K 3SQ United Kingdom Brokers Arden Partners plc 125 Old Broad Street London EC2N 1AR United Kingdom This information is provided by RNS, the news service of the London Stock Exchange. 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