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Annual report 2022
Contents
PetroNor E&P in brief
......................................................
4
CEO letter
...........................................................................
6
Portfolio
..............................................................................
8
Annual statement of reserves
......................................
16
ESG report
.......................................................................
25
Corporate governance
..................................................
34
Board of directors
..........................................................
40
Management
..................................................................
44
Board of directors’ report
.............................................
47
Statement of remuneration
.........................................
64
Financial statements
.....................................................
66
Statement of directors' responsibility
.....................
117
Independent auditor’s report
.....................................
118
Contact
..........................................................................
124
3
Our business locations
1
CONGO BRAZZAVILLE
16.83 per cent indirect
participating interest in PNGF
Sud offshore licence group.
2
NIGERIA
13.1 per cent economic interest
in Aje Field in licence OML113.
3
THE MSCGC BASIN
The Gambia A4 licence
90 per cent interest.
Guinea-Bissau Bissau 100
per cent interest in the
Sinapa
(Block 2) and Esperança
(Blocks 4A and 5A) licences.
90 per cent operated interest in
the Senegalese ROP and SOSP
licences subject to arbitration.
2
1
Business Model
OUR MISSION
Our mission is to generate
shareholder value by
leveraging the technical and
commercial skillset of the
company to enhance our
reserve base, production, and
cash flow.
PetroNor E&P is committed
to the highest standards of
corporate governance, and to
deliver operational excellence
safely and efficiently.
OUR VISION
Our strategic vision is to steadily
build the company into a full
cycle, Africa-focused exploration
and production company with
an emphasis on producing and
developing assets with upside
potential.
OUR WORK
We are an independent oil and
gas exploration and production
company with multiple licenses
in countries in West Africa – the
Republic of the Congo, Guinea-
Bissau, Senegal, The Gambia,
and Nigeria. The company has
amassed a diverse and high-
quality portfolio comprising
economically robust production,
development upside, and highly
prospective exploration targets
in West Africa.
PetroNor E&P in brief
PetroNor E&P ASA, listed on the Oslo Stock Exchange (PNOR), is an
independent oil and gas company led by an experienced board and
management team, with substantial experience in oil and gas exploration,
appraisal, development, and production.
PETRONOR E&P ASA
ANNUAL REPORT 2022
4
About PetroNor E&P
Net profit (USD million):
34.3
2021:
21.1
EBITDA (USD million):
96.4
2021:
61.9
EBIT (USD million):
87.1
2021:
57.3
2P Reserves (MMboe):
20.3
2021:
21.1
2C Contingent resources (MMboe):
37.1
2021:
12.7
Market capitalisation (USD million):
111.4
2021:
131.8
Earnings per share (USD cents):
1.96
2021:
1.06
Net debt (USD million):
13.8
2021:
18.7
Delivered an average
net allocated
production of 4,021
bopd in 2022. 6
wells in 2022. The
sucessful infill drilling
program continued
with additional 4
scheduled for 2023.
Lifting of 800,177
bbls at average
realised price of USD
90.99/bbl.
The Gambia A4 licence
was awarded for an
initial exploration
period of three years.
Seeking partners
to participate in
the drilling of the
Atum-1X well.
Acquisition of
interest in OML113
offshore Nigeria was
completed.
The process to
redomicile from
Australia to Norway
was completed
successfully and
PetroNor E&P ASA
listed on Oslo Stock
Exchange on 28
February 2022.
Renegotiation of
debt facility of USD
11 million.
Extended the board
with the addition
of
two new directors
appointed in January
2023.
2022 Highlights and
subsequent events
PETRONOR E&P ASA
ANNUAL REPORT 2022
5
About PetroNor E&P
Interim Chief Executive Officer:
A transformative year
During 2022, PetroNor has delivered several foundational milestones in our business.
The ongoing infill drilling programme at the PNGF Sud field generated increased
production capacity and, going into 2023, we report production levels not seen in the
field for more than a decade. Our redevelopment plans for the Aje field advanced
following the completion of our acquisition of Panoro’s Energy ASA’s interests, and our
exploration portfolio made good progress.
PRODUCTION ABOVE EXPECTATIONS
As part of the infill drilling programme in
Congo, four infill wells in the Litanzi field were
successfully added during the year, producing
with rates significantly above expectations. The
rig subsequently drilled two infill producers in
Tchibeli Northeast. The final allocated average
net production from the PNGF Sud field complex
during 2022 was 4,021 bopd, but following the
addition of the increased well capacity from the
infill program, average working interest increased
to consistently greater than 5,200 bopd during 1
st
quarter 2023.
Separately, one Tchibeli NE well includes a deeper
exploration target that discovered an oil column
in the Vandji sandstones that is being evaluated to
understand future regional potential.
The Dagda jack-up rig that successfully drilled
four Litanzi wells and two Tchibeli wells during
2022 is now being repurposed and converted to
a permanent production platform. Meanwhile
the Axima jack-up rig that will take over drilling
responsibilities on the infill drilling programme is
currently operating for another partnership and is
expected to return to work on the Tchibeli field in
Q2 2023.
NEW LIFTING AGREEMENT
During the year, to mitigate delays to implementing
a new oil sales agreement with ADNOC, the
company re-established lifting arrangements
with operators at the Djeno terminal. These
arrangements delivered the lifting and sale of more
than 800 thousand bbls during the 4
th
quarter at an
average oil price of USD 90.99/bbl, generating full-
year revenue of USD 146 million, compared with
USD 106 million in the previous year. The increase
is driven by higher oil prices.
As a result, the group reported an EBITDA of USD
96.4 million for the year ended 31 December 2022,
compared to USD 61.9 million in the same period in
2021. Net profit attributable to the equity holders
of the parent more than doubled, from USD 12.3
million in 2021 to USD 26.9 million for the year
ended 31 December 2022.
Strong cash flow from operating activities and new
debt facilities resulted in a cash position of USD
24.8 million at year-end.
GOOD PROGRESS WITH THE AJE
RE-DEVELOPMENT
The long-awaited acquisition of Panoro’s interest
in Oil Mining Lease no. 113 offshore Nigeria was
completed during the year, and PetroNor now has
a seat at the licence group table. The acquisition of
the ownership interest in the Aje field is strategically
attractive and supports our stated growth strategy
of acquiring assets that add production, material
reserves, and resources to the company. The
planned gas deliveries to onshore West Africa also
represent opportunities within the ESG space. We are
continuing with the work to finalise elements of the
transaction with the licence operator, YFP. Meanwhile,
work progresses on the Aje field re-development
plan with partners and gas off-takers.
LARGE SCALE EXPLORATION PROSPECTS
PetroNor has a portfolio of large scale exploration
prospects in addition to those surrounding its fields
in the Congo and Nigeria. In October 2022, the A4
licence in The Gambia was awarded to the Company
and its partner, the Gambia National Petroleum
Corporation (GNPC). PetroNor is the operator with
a participating interest of 90 per cent, with GNPC
holding 10 per cent.
The PetroNor exploration team have been consistent
and passionate advocates for the potential of this
part of the Atlantic margin. It is our shared objective
PETRONOR E&P ASA
ANNUAL REPORT 2022
6
CEO letter
with our partner that these efforts will lead to a
future drilling program.
Well planning for the Atum-1X exploration well are
being advanced for the licences in Guinea-Bissau,
based on encouragement from farm-out discussions.
In Senegal, the arbitration process to resolve the
legacy licence dispute is completed and awaiting
ruling.
With this as the backdrop, I would like to thank our
team and our partners for their great efforts in 2022.
THE IMPORTANCE OF SAFE AND COMPLIANT
OPERATIONS
Although 2022 has been a year with good progress
for PetroNor, the ongoing investigations from the
National Authority for Investigation and Prosecution
of Economic and Environmental Crime in Norway
and the Department of Justice in the US continue to
represent a difficult backdrop for the company. As
previously stated, the charges are brought against
individuals and neither PetroNor nor other group
companies have been charged.
I want to reiterate that the company takes
compliance very seriously and has refreshed it’s
internal procedures consistent with a Norwegian
governance model. The company has set up a
dedicated board sub-committee to manage the
company’s response to the investigations and has
engaged an independent law firm. Part of the agreed
remit for this independent advisor has been to
conduct a targeted fact-finding process. A summary
from this process is being reviewed by the PetroNor
board and has been shared with the investigating
authorities consistent with the company’s stated
policy of co-operation. At the time of writing this
report, there are no further updates in relation to
the progress of the investigations.
FORWARD STRATEGY
The success of our infill well investments achieved
during 2022 has given evidence to the long-
term reserve growth that is possible from our
producing assets. The cash flow from oil sales
funds these investments and supports our
development and exploration assets. In addition
the company continues to consider inorganic
growth opportunities. As our production is largely
unleveraged, we have an opportunity to leverage
further to execute on value-accretive M&A
opportunities. The board is also considering other
approaches to deliver value for shareholders as our
cash position strengthens.
Sincerely,
Jens Pace
Interim CEO PetroNor E&P
– PetroNor E&P is well positioned to deliver
shareholder value from both its existing portfolio
and new opportunities.
PETRONOR E&P ASA
ANNUAL REPORT 2022
7
CEO letter
Production:
Congo-Brazzaville
The Republic of Congo (Congo Brazzaville) is the third largest producer of crude oil in
Sub-Saharan Africa after Nigeria and Angola, representing around 90 per cent of the
exports of the country. The majority of the production in Congo is located offshore,
with approximately half in deep water. Congo Brazzaville is an established oil-
producing country and a core country for PetroNor, both for production as well as for
regional development.
PetroNor holds a 16.83 per cent indirect participation
interest in the licence group of PNGF Sud (Tchibouela
II, Tchendo II and Tchibeli-Litanzi II) through Hemla
E&P Congo SA. In addition, the group holds a right
to negotiate, in good faith, along with the contractor
group of PNGF Sud, the terms of the adjacent licence
of PNGF Bis. If the group is able to secure entry into a
production sharing contract, the group expects to be
granted a 23.6 per cent indirect interest in PNGF Bis.
PNGF Sud is operated by Perenco, a world-leading
specialist in low-cost brownfield optimisation of
mature production assets like PNGF Sud.
Production has continued to grow and operating cost
per unit production has been significantly reduced,
all achieved through improving maintenance
routines, production processing capacities along
with field integrity investments in a stepwise and
prudent manner.
Tchendo debottlenecking adding (40 kbwpd) water
treatment capacity and export pumps (3x20 kbfpd)
to allow additional fluids from both Tchendo and
Litanzi.
Tchendo
Litanzi
Tchibouela
Tchibouela east
Louissima
Lusom
Suem
Tchibeli
Tchibeli
NE
Net interest:
16.8%
Producing wells:
69
2P Reserves
(net) (MMbbl):
18.5
2C Resources
(net) (MMbbl):
13.9
Accumulated
produced
1 January 2022
(MMbbl):
Gross
477
PETRONOR E&P ASA
ANNUAL REPORT 2022
8
Portfolio
The license partnership is now well underway on
its announced 17 well infill drilling programme with
a three-year investment programme of some USD
400 million to deliver increased production and
reserves.
PNGF SUD
Licence overview
Since the entry of the new contractor group in early
2017, incremental improvements via well workovers,
surface production process improvements and
structural integrity and HSE improvements have
resulted in year-on-year growth in production at a
relatively low CAPEX spending. The goal has been
to optimise the existing well stock by re-activating
producers and injectors, re-allocating production
intervals, increasing well lift capacities as well as
increasing and managing production capacities
and intra-field power consumption between the 8
wellhead-platforms in PNGF-Sud.
Licence activity
The average gross PNGF production was 23,891
bopd in 2022 with a continued low lifting cost of
$12.4/bbl. The workover programme continued
successfully in 2022. On the surface side, significant
0
5
10
15
20
25
30
35
Tchibouela
■
Tchibouela East
■
Tchendo
■
Tchibeli Albien
■
Tchibeli NE
■
Litanzi Albien
Oil production
kbopd
Jan
2017
Jun
2017
Nov
2017
Apr
2018
Sep
2018
Feb
2019
Jul
2019
Des
2019
May
2020
Oct
2020
Mar
2021
Aug
2021
Jan
2022
Jun
2022
Apr
2023
Nov
2022
Sep
2023
PETRONOR E&P ASA
ANNUAL REPORT 2022
9
Portfolio
investments were made on additional water
handling capacity, additional export pumps
plus starting the commissioning on additional
generators for intra-field power generation.
Correspondingly, integrity improvements were
made on several steel structures.
The 17 well infill drilling programme started in 2021.
A total of 6 wells on Litanzi and Tchibeli NE were
drilled between November 2021 and November
2022. Drilling progress was initially significantly
delayed due to failure of equipment such as the
top-drive system and generators. The effect of
these delays on the field was however offset by
significantly better production performance than
expected including the addition of an exploration
discovery in the pre-salt (Vanji) in Tchibeli NE which
was immediately put on production.
Production capacity thus increased from an
average 20.6 kbopd in 2021, via an average 2022
production of 23.9 kbopd to a current production
capacity significantly above 30 kbopd in the initial
period of 2023. The drilling rig used for the drilling
of these two campaigns, Petrofor Dagda, has now
been converted to a production platform in Tchibeli
NE and the derrick has been removed. Another
jack-up rig, the Petrofor Axima, is currently drilling
a four well campaign for Perenco before returning
to continue the planned infill drilling programme
on Tchibeli and Tchendo expected to start in the
second quarter of 2023. Also planned in 2023 is the
commissioning of a refurbished 14 slot production
jack-up to be added to Tchendo in the second half
of the year.
0
5
10
15
20
25
30
35
Tchibouela
■
Tchibouela East
■
Tchendo
■
Tchibeli Albien
■
Tchibeli NE
■
Litanzi Albien
Oil production
kbopd
Jan
2022
Feb
2022
Mar
2022
Apr
2022
May
2022
Jun
2022
Jul
2022
Aug
2022
Sep
2022
Oct
2022
Nov
2022
Dec
2022
Jan
2023
Feb
2023
Apr
2023
Jun
2023
Aug
2023
Mar
2023
May
2023
Jul
2023
Sep
2023
Oct
2023
Nov
2023
Dec
2023
PNGF BIS
Licence overview
Located North-West of PNGF Sud, PNGF Bis license
contains two discoveries, Louissima and Loussima
SW. The two discoveries are proven by three wells
drilled between 1985 and 1991. The partnership has
a right to negotiate the licence on given terms, such
negotiations would see PetroNor receive a 23.6 per
cent indirect participation in PNGF Bis.
The three discovery wells tested from 1,150 to 4,700
bopd of light, good quality oil. Perenco has recently
made a detailed reinterpretation, 3D modelling
and facilities study for the Loussima SW discovery,
yielding >100 MMbbl of in-place resources and a
possible tie-back to PNGF Sud via pipeline.
AGR Petroleum Services warrants 2C resources
of 29 MMbbl including verification of the tie-back
scenario given above.
PETRONOR E&P ASA
ANNUAL REPORT 2022
10
Portfolio
PETRONOR E&P ASA
ANNUAL REPORT 2022
11
Portfolio
West African
Gas
Pipeline
Lagos
OML-113
Ogo
Aje
Seme
Development:
Nigeria
Nigeria is one of the most petroleum-rich nations in the world. Nearly all of the
country’s primary reserves are concentrated in and around the Niger Delta. Nigeria is
one of the few major oil producing nations still capable of increasing its oil output.
The Aje field is located close to the Lagos shores of
Nigeria, a populated area in dire need of affordable
electrical power. It is estimated that Nigeria produces
electrical power from some 20-30 million diesel
generators around the country and the Lagos area
alone has a population exceeding 27 million people.
The Aje field constitutes a significant gas discovery
which has the potential of supplying cleaner, reliable
and more affordable gas to power to this region of
the country. Additional LPG products extracted from
the gas yields cooking gas for the local area replacing
wood burning for cooking.
The Aje Project targets production of oil, gas,
condensate, and LPG., which will replace
approximately 500MW currently generated by
diesel power and also provide 10 per cent of the
country’s cooking gas. As such, it has an attractive
ESG profile consistent with PetroNor’s values and
longer-term goals.
OML-113 (AJE FIELD)
In January 2022, PetroNor received from
the Nigeria Upstream Petroleum Regulatory
Commission (NUPRC replacing the DPR) the
approval for the transaction between Panoro
Energy and PetroNor for the acquisition of all its
interest in the Aje Field asset. This transaction was
completed with Panoro in July 2022. PetroNor now
directly holds 6.502 per cent participating interest,
with a 16.255 per cent cost-bearing interest,
representing an economic interest between 12.1913
per cent and 16.255 per cent in OML 113, containing
the Aje oil and gas field.
2P Economic
interest:
12.1%–
16.3%
2C Resources
per table
(net)(MMboe):
22.8
PETRONOR E&P ASA
ANNUAL REPORT 2022
12
Portfolio
Aje Production AS is being created as a joint
venture between PetroNor and Yinka Folawiyo
Petroleum Deep Water Limited (“YFP-DW”)
and this venture will lead the technical and
management efforts in the next phase of the Aje
field development. PetroNor will contribute the
acquired interest in Aje, and YFP-DW will contribute
all interest in Aje to the Aje Production JV.
PetroNor’s ownership will be 52 per cent in
Aje Production which will hold a 15.5 per cent
participating interest and an economic interest in
the order of 38.755 per cent in OML 113 during the
majority of the project period. YFP has undertaken
to align its voting rights with Aje Production’s
objectives in the development of the Aje field.
Licence overview
The Aje Field was discovered after drilling of the
Aje-1 well in 1996. The OML-113 block covers 835
km² with water depths ranging from 100m to
1,500m. Five wells have been drilled; oil production
is from Turonian and Cenomanian age reservoirs.
Overlying the Turonian oil rim is a significant
gas-condensate discovery which has not been
developed.
Forward plan
The development plans will target the gas,
condensate, and oil in a low-risk development
plan. Wet gas will be brought to shore for further
processing and extraction of LPG. The Nigerian
government encourages stop-flaring programmes
and the country is in dire need of electrical power.
According to the UN sustainability goals, gas is
an important transition fuel for Africa. Thus, in
addition to closing down existing gas flaring in the
field and piping additional gas to shore, this is in
sum a particularly ESG-friendly project in these
parts of the world.
Development plans for the Aje gas condensate and
additional oil are under discussion jointly with the
license partners. The plan is to proceed toward
an FID involving changeout of the FPSO, drilling
further gas and oil development wells, building a
30 km pipeline to shore to a receiving LPG plant
close to the export compressor station of the
West African Gas Pipeline (WAGP). Condensate
and oil will be produced and offloaded offshore
while offtake agreements will include gas sales
and swap arrangement for gas and LPG products.
The previous FPSO was released
from the field
as it has reached the end of economic field life
and does not have the proper ratings for gas
development.
Albeit delayed, significant progress has been made
on negotiations of gas offtake contracts and the
company is moving forward both in our discussions
with license partners and relevant financing
institutions.
PetroNor hopes to progress the project toward
final investment decision late 2023.
The landmark
Lagos bridge in
Nigeria.
PETRONOR E&P ASA
ANNUAL REPORT 2022
13
Portfolio
SOSP
A4
Block 2
(Sinapa)
Block 4A
(Esperança)
Shelf edge
Block 5A
(Esperança)
ROP
Guinea-
Bissau
Sinapa-2
and
Esperança
4A/5A
Net working interest:
100%
Area in km
2
:
4,963
Operator:
PetroNor
E&P AB
The
Gambia
Net working interest:
90%
Area in km
2
:
1,376
Operator:
PetroNor E&P
Gambia Ltd
PETRONOR E&P ASA
ANNUAL REPORT 2022
14
Portfolio
Exploration:
The MSGBC Basin
PetroNor has amassed a highly attractive exploration portfolio across the MSGBC
(Mauritania-Senegal-The Gambia-Guinea-Bissau-Conakry) basins.
GUINEA-BISSAU SINAPA-2 AND ESPERANÇA
4A/5A LICENCES
Licence overview
Following acquisition of the Sinapa (Block 2) and
Esperança (Blocks 4A and 5A) licenses offshore
Guinea Bissau in May 2021. PetroNor assumed
operatorship and an interest of 78.57 per cent in
both licenses. The two main prospects, Atum and
Anchova, are commercially attractive, low risk
prospects, with net unrisked, combined summed
mean recoverable, prospective resources of
467 MMbbl for upper and lower Albian targets
(PetroNor estimate). Oil has already been
discovered on the Sinapa licence, Atum and
Anchova prospects are analogous to the Sangomar
field to the North along the margin in Senegal.
Success at Atum-1X will be a highly significant play
extending well and will open up further exploration
activity in the country.
PetroNor has completed interpretation of the 3D
seismic data across both licences and is seeking
partners to participate in the drilling of the Atum-1X
well.
The purchase of SPE Guinea Bissau AB from
Svenska Petroleum Exploration AB received formal
in-country governmental approval in late April 2021.
Subsequently, in May 2021, the Svenska subsidiary
was formally renamed PetroNor E&P AB. The
current exploration phase of both Guinea-Bissau
licences end in October 2023. All minimum financial
commitments have been met but the drilling
obligation is outstanding.
PetroNor has re-initiated planning for drilling the
Atum-1X well, building on extensive preparation
work carried out by the previous operator,
supported by EXCEED Energy based in Aberdeen.
Long lead items required for drilling operations
were already secured before PetroNor took over
operatorship and a number of key pre-drill studies
have now been completed and more are underway.
EXCEED and PetroNor are fully engaged in drilling
preparations whilst continuing efforts to secure a
partner.
THE GAMBIA A4 LICENCE
Licence overview
In November 2022, the company was awarded
a new 30-year lease for the A4 licence with
terms based on the newly developed Petroleum,
Exploration and Production Licence Agreement
– PEPLA model. A proportion of prior sunk costs
associated with Block A4 have been carried into
the new agreement. The first three-year period
of the licence has been split into two 18 month
periods. The first period involves an extensive
work program with a drill or drop decision in
May 2024.
PetroNor has licenced additional 3D PSDM seismic
data (TGS Jaan 3D) to give an enhanced regional
perspective and to better understand recent well
results both successes and failures in this part of
the MSGBC Basin. PetroNor is seeking a partner to
join the company in drilling one exploration well in
this highly attractive acreage 40kms to the South
of the Sangomar fieldin Senegal. The key prospects
in A4 are the ‘Lamia-South’ prospect (net mean
prospective recoverable resource 295mmbo)
and
the ‘Rosewood’ prospect (net mean prospective
recoverable resource 350 mmbo), both with
commercial volumes and attractive probability of
success. PetroNor considers Lamia South to be a
genuine analogue for the Sangomar Field (unlike
recent wells in adjacent acreage). PetroNor aims
to participate in any future well at an equity level
of 30-50 per cent and hopes to drill in 2024 upon
entering the second phase of the first exploration
period.
SENEGAL
Licence overview
The Senegal Offshore Sud Profond and Rufisque
Offshore Profond licences were awarded to
the company in 2011. In July 2018, the company
registered arbitration proceedings with the
International Centre for Settlement of Investment
Disputes (ICSID) (case ARB/18/24) to protect its
interests in the licenses. The arbitration was held in
Paris in March 2022. The company awaits the final
arbitration ruling.
Senegal
Net working interest:
90%
Area in km
2
:
15,796
Operator:
African
Petroleum
Senegal Ltd
PETRONOR E&P ASA
ANNUAL REPORT 2022
15
Portfolio
Annual statement of reserves
PetroNor’s classification of reserves and resources complies with the guidelines
established by the Oslo Stock Exchange and are based on the definitions set by
the Petroleum Resources Management System (PRMS-2007), sponsored by the
Society of Petroleum Engineers / World Petroleum Council / American Association
of Petroleum Geologists/ Society of Petroleum Evaluation Engineers (SPE/PRMS)
from 2007 and 2011.
Reserves are the volume of hydrocarbons that are
expected to be produced from known accumulations:
■
On Production
■
Approved for Development
■
Justified for Development
Reserves are also classified according to the
associated risks and probability that the reserves
will be produced.
1P
Proved reserves represent volumes that will
be recovered with 90 per cent probability.
2P
Proved + probable reserves represent volumes
that will be recovered with 50 per cent
probability.
3P
Proved + probable + possible volumes will be
recovered with 10 per cent probability.
Contingent resources are the volumes of
hydrocarbons expected to be produced from
known accumulations:
■
In planning phase
■
Where development is likely
■
Where development is unlikely with present
basic assumptions
■
Under evaluation
Contingent Resources are reported as 1C, 2C, and
3C, reflecting similar probabilities as reserves.
DISCLAIMER
The information provided in this report reflects
reservoir assessments, which in general must be
recognised as subjective processes of estimating
hydrocarbon volumes that cannot be measured in
an exact way.
PETRONOR E&P ASA
ANNUAL REPORT 2022
16
Annual statement of reserves
It should also be recognised that results of recent
and future drilling, testing, production, and new
technology applications may justify revisions
that could be material. Certain assumptions
on the future beyond PetroNor’s control have
been made. These include assumptions made
regarding market variations affecting both product
prices and investment levels. As a result, actual
developments may deviate materially from what is
stated in this report.
The estimates in this report are based on third
party assessments prepared by AGR Petroleum
Services AS (“AGR”) in March 2023 for PNGF Sud
and PNGF Bis (2023 AGR CPR). For OML113 (Aje),
reserves and resources are based on a CPR from
AGR/Tracs from March 2019.
PETRONOR ASSETS PORTFOLIO
The group holds exploration and production assets
in Africa through subsidiaries and joint ventures,
namely the offshore PNGF Sud production licenses
in the Republic of Congo, the Sinapa (Block
2) and Esperança (Blocks 4A and 5A) licenses
offshore Guinea-Bissau, the A4 license offshore
The Gambia. The group reserves its rights to the
Rufisque Offshore Profond and Senegal Offshore
Sud Profond licences offshore Senegal, which are
currently in arbitration. In July 2022, PetroNor
completed the purchase of Pan-Petroleum Nigeria
Holding BV and Pan- Petroleum Services Holdings
BV that together hold 100 per cent of the shares in
Pan-Petroleum Aje Ltd (“Pan Aje”), representing an
economic interest between 12.1913 per cent and
16.255 per cent in OML 113. This transaction is now
part of this annual statement of reserves (“ASR”).
The exploration assets in Guinea-Bissau, The
Gambia and Senegal only constitute prospective
resources, therefore are not considered part of this
ASR.
PNGF Sud:
Offshore Congo Brazzaville, operator Perenco,
PetroNor 16.83 per cent
PNGF Sud is a development and exploitation license
comprising three (3) production license agreements
(Tchibouela II, Tchendo II and Tchibeli-Litanzi
II), which contain six oil fields: Tchibouela Main,
Tchibouela East, Tchendo, Tchibeli, Tchibeli North
East and Litanzi.
PetroNor E&P’s indirect subsidiary, HEPCO, holds
a 20 per cent (16.83 per cent net to PetroNor) non-
operated interest in the PNGF Sud licenses offshore
Congo. The operator of the licenses is Perenco which
holds a 40 per cent interest in the PNGF Sud licenses.
Effective since 1 January 2017, the ownership of the
licenses has an expiry date after 20 years plus a
5-year extension period.
Since granting of the licenses, Perenco, with
partner support has been committed to strict HSE
compliance while growing production, improving
maintenance routines and field integrity in a
stepwise and prudent manner.
In November 2021, the 17 well infill programme
commenced on PNGF Sud with four infill wells
on Litanzi. In November 2022, two wells were
completed in Tchibeli North East. Production
ramped up significantly in 2022 in response to the
infill drilling programme. The year ended with a
December production of 30.344 bopd (5,107 net to
PetroNor). Three or four wells are expected to be
drilled on Tchibeli in the second quarter of 2023.
Gross production during 2022 was 8.72 MMbbls of
oil and 8.3 Bcf of gas. This corresponds to average
23.891 bopd and 22.7 mmscfd.
In March 2023, AGR performed a full competent
persons report (CPR) covering the reserves (1P,
2P and 3P) and resources (1C, 2C and 3C) in both
PNGF Sud and PNGF Bis. The above figures were
evaluated as of 31 December 2022.
As per the PRMS/SPE guidelines, only the portion
of gas is contributing to power generation (on
Tchibouela and Tchendo only) and is included in
the overall reserves in the AGR CPR. The gas is
being used centrally in the field complex as fuel for
power-generating turbines which is subsequently
transmitted to the individual field platforms via
electrical power cables. For the purpose of this
report, the numbers quoted below as MMbbls do
not include the oil equivalent gas but are included
in the appendix reserves and resource tables.
This PetroNor ASR uses as the basis the reserves
and resources from the 2023 AGR CPR yielding
reserves and resources as per 31 December 2022.
As the only product sold is oil, PetroNor will in
the text below when referring to reserves and
resources mainly refer to oil and term these with
the unit MMbbls or including condensate, LPG and
gas as oil equivalents MMboe.
As at 31 December 2022, AGR evaluated that gross
1P proved reserves yield 74.5 MMbbls in all of the
PNGF Sud fields in the Cenomanian, Turonian,
Senonian and Albian reservoirs. Gross 2P proved
plus probable reserves at PNGF Sud amounted
to 110.0 MMbbls in the same reservoirs. Gross 3P
proved plus probable plus possible reserves at
PNGF Sud amounted to 146.5 MMbbls.
PETRONOR E&P ASA
ANNUAL REPORT 2022
17
Annual statement of reserves
Lagos skyline.
PETRONOR E&P ASA
ANNUAL REPORT 2022
18
Annual statement of reserves
Gross 1C resources yield 25.5 MMbbls in all of the
PNGF Sud fields in the Cenomanian, Turonian,
Senonian and Albian reservoirs. Gross 2C resources
at PNGF Sud amounted to 42.0 MMbbls in the
same reservoirs. Gross 3C resources at PNGF Sud
amounted to 72.3 MMbbls.
These evaluations yield 1P proved reserves net to
PetroNor of 12.5 MMbbls, 2P proved plus probable
reserves net to PetroNor of 18.5 MMbbls and 3P
proved plus probable plus possible reserves net to
PetroNor of 24.7 MMbbls.
Additional potentially recoverable resources net
to PetroNor are approximately 4.3 MMbbls 1C, 7.1
MMbbls 2C and 12.2 MMbbls 3C.
These reserves and contingent resources are
PetroNor’s net volumes before deductions for
royalties and other taxes, reflecting the production
and cost sharing agreements that govern the
assets.
PNGF Bis:
Offshore Congo Brazzaville, operator Perenco,
PetroNor 23.6 per cent
Located North-West of PNGF Sud, PNGF Bis license
contains two discoveries, Louissima and Loussima
SW. The two discoveries are proven by three wells
including DST’s drilled from 1985-1991. The primary
potential is identified in the pre-salt Vanji formation
with promising DST rates, but the exploration and
appraisal wells also include an oil column in the
post-salt Senji fm (not tested).
The contractor group of PNGF Sud has not yet
secured the rights to carry out petroleum activities
on PNGF Bis however a likely scenario comprises
a long-term test production period with a rented
jack-up with a purchase option and an 11 km
pipeline tie-back to one of the existing Tchibouela
process platforms. This would allow cost recovery
of the investments during the test production
and allows upscaling the production levels with
additional producers as resources are matured to
reserves.
Net to PetroNor 1C contingent resources yield 5.3
MMbbls in the Loussima SW Vanji and Senji fm.
Net 2C at PNGF Bis Loussima SW amounts to 6.8
MMbbls in the same reservoirs. Net 3C amounts to
8.4 MMbbls.
MANAGEMENT DISCUSSION AND ANALYSIS
PetroNor uses the services of AGR Petroleum
Services for 3
rd
party verifications of its reserves
and resources.
All evaluations are based on standard industry
practice and methodology for production
decline analysis and reservoir modelling based
on geological and geophysical analysis. The
following discussions are a comparison of the
volumes reported in previous reports, along with
a discussion of the consequences for the year-end
2022 ASR:
PNGF Sud
During the years from 2017 to 2022, production
and reserves have grown from the initial c. 15,000
bopd and 62 mmbo when Perenco and partners
took over. An additional c. 47 mmbo has been
produced in the period, thus representing a reserve
replacement ratio of more than 200 per cent for the
period. This has materialised through revitalising
existing producers via replacements or upsizing of
electrical submersible pumps (ESP’s), acidizing, clean
up or reperforating wells or converting wells from
the Cenomanian to the Turonian (less depleted)
formations. Significant surface debottlenecking is
also taking place, projects ranging from improved
power generation, gas-lift compressor upgrades,
pump replacements and other surface process
improvements. Production from Tchibeli has been
routed to Tchendo by installing a new pipeline to
avoid third party processing tariffs previously paid to
the Nkossa FPSO. These brick-by-brick improvements
together with infill drilling have yielded a production
level during 2022 of 23,891 bopd. The production
improvements alone have yielded more than a 100
per cent reserves replacement each year at a cost
of less than 1 USD/bbl. An infill drilling program
was decided for the Litanzi field in 2019 and in 2020
for Tchendo and Tchibeli. Development drilling of
the Tchibeli NE discovery was further sanctioned in
2021. Consequently, the 2C resources in these fields
have been converted to 2P reserves. Development
of 3D static and dynamic models has been and
will continue to form the basis of further infill
drilling programmes on PNGF Sud. As part of the
commitment to infill drilling, significant 2C resources
have been transferred to 2P reserves on Litanzi, (in
2019), Tchendo, Tchibeli and further in Tchibeli NE.
The infill potential in Tchibouela and Tchendo has
been maintained with a significant 2C potential.
Further gross/net 2C resources of 9.3/1.6 mmbo
were added in the 2023 AGR CPR in Tchibouela East
in response to identifying infill drilling potential for
another 5 wells in the field.
Gross produced volumes during 2022 constituted
net/gross 1.5/8.7 MMbbls. Only minor adjustments
were made to 2P reserves for 2022, with a
decrease of net/gross -0.6/-3.4 mmbo attributed
to production adjustments. 2C resources have
increased by 1.6/9.3 to 13.9/70.9 MMbbls, primarily
for additional infill potential in Tchibouela East.
PETRONOR E&P ASA
ANNUAL REPORT 2022
19
Annual statement of reserves
The PNGF partnership is investing in additional
power generation facilities on Tchiboela and
Tchendo. According to PRMS, gas reserves for this
should be classified as reserves. Total gas reserves
attributed to power generation has been estimated
at 9.9/59.0 bcf, corresponding to 1.8/10.5 mmboe in
the reserve’s balances.
Production rates are reported by AGR to increase
significantly in 2023 and 2024 to respectively 32,550
and 33,100 bopd.
PNGF Bis
Subject to agreement with the government and
investment decisions on the Loussima SW project,
these reserves may become reserves approved
for development. The 2C resources in PNGF Bis
have been reaffirmed by AGR as part of this years’
reserves and resource audit without change to
the numbers. It is expected that these discoveries
will have priority following the infill drilling
programmes in PNGF Sud.
Given a successful Loussima SW, a similar
development potential is also likely for the
Loussima Discovery.
Aje – OML113
As part of the completion with Panoro on this
transaction, reserves and resources from this
license are included in PetroNor’s balances.
Reserves and resources are based on a CPR from
AGR/Tracs from March 2019. As the bulk of these
are 2P reserves based on a Field Development Plan
(FDP) submitted to and approved by the Nigerian
Upstream Petroleum Regulatory Commission
(NUPRC, formerly DPR) in 2018 and the current
development plan will need a resubmission and
approval, PetroNor assumes the same reserves
now to be contingent resources. The relatively
insignificant production in the period 2019 to 2021
are subtracted from these numbers. Revenue
and cost-bearing interests vary through the
development production period from 12.2 per cent
and 16.3 per cent and net resources have been
modelled and listed in the tables below. The 2C
resources net to PetroNor are 9.7 mmbo of liquids
and 79 bcf of gas, in total 22.8 mmboe. (AGR Tracs
use 6 mscf/boe).
ASSUMPTIONS
The commerciality and economic tests for the PNGF
Sud, PNGF Bis and Aje reserves and resources
volumes were based on an oil and condensate price
of 70 USD/bbl, although the reserves and resources
are not very sensitive to this parameter as OPEX
levels are currently at 10-12 USD/bbl in PNGF
and estimated at ca 7 USD/bbl in Aje on plateau
production.
2P Reserves
(MMboe)
2021
2022
2022 PN Net
Balance – gross AGR, PNGF Sud
123.3
120.5
20.3
2P and 2C Reserves and Resources Status
(MMboe)
2021
2022
2022 PN Net
Balance 2P/2C gross, PNGF Sud
158.4
164.9
27.8
Balance 2P/2C gross, Sud+Bis
187.3
193.8
34.6
Balance – 2P/2C gross, ALL PNGF Sud +Aje
339.0
57.3
PetroNor’s total 1P Reserves at the end of 2022
amounted to 14.3 MMbbls. PetroNor’s 2P Reserves
amount to 20.6 MMbbls and PetroNor’s 3P
Reserves amount to 26.61 MMbbls. This reflects
the 6 April 2022 reserve report for the PNGF Sud
field, conducted by AGR Petroleum Services AS and
production since the field start-up.
PetroNor’s Contingent Resource base includes
discoveries of varying degrees of maturity towards
development decisions. By the end of 2022,
PetroNor’s assets contain a total 2C volume of
approximately 12.3 MMbbl.
28 April 2023
JENS PACE
Interim CEO PetroNor E&P
PETRONOR E&P ASA
ANNUAL REPORT 2022
20
Annual statement of reserves
RESERVES AND RESOURCES AS PER 31 DECEMBER 2021 (AGR CPR DATED 17 MARCH 2022)
Gross reserves (developed or under development):
1P
2P
3P
Oil
mmbo
Gas
bcf
Boe
mmboe
Oil
mmbo
Gas
bcf
Boe
mmboe
Oil
mmbo
Gas
bcf
Boe
mmboe
100% PNGF Sud
Tchibouela
38.02
31.50
43.63
48.52
37.85
55.26
59.87
43.68
67.65
Tchibouela East
2.39
2.39
3.29
-
3.29
4.30
4.30
Tchendo
14.48
13.03
16.80
23.53
21.17
27.30
31.75
21.51
35.58
Tchibeli
7.12
-
7.12
14.02
-
14.02
21.57
-
21.57
Tchibeli Northeast
4.87
-
4.87
9.56
9.56
14.86
-
14.86
Litanzi
7.64
-
7.64
11.06
-
11.06
14.16
-
14.16
Subtotal
74.52
44.53
82.45
109.98
59.02
120.49
146.51
65.19
158.12
100% PNGF Bis
Loussima (Bis)
-
-
-
-
-
-
-
-
-
Total
74.52
44.53
82.45
109.98
59.01
120.49
146.51
65.19
158.12
Gross contingent resources (undeveloped):
1C
2C
3C
Oil
mmbo
Gas
bcf
Boe
mmboe
Oil
mmbo
Gas
bcf
Boe
mmboe
Oil mmbo
Gas
bcf
Boe
mmboe
100% PNGF Sud
Tchibouela
13.60
8.90
15.19
21.20
13.80
23.66
34.10
22.30
38.07
Tchibouela East
6.45
-
6.45
11.61
-
11.61
18.93
-
18.93
Tchendo
5.40
-
5.40
9.14
-
9.14
19.20
-
19.20
Tchibeli
-
-
-
-
-
-
-
-
-
Tchibeli Northeast
-
-
-
-
-
-
-
-
-
Litanzi
-
-
-
-
-
-
-
-
-
Total
25.45
8.90
27.04
41.95
13.80
44.41
72.23
22.30
76.20
100% PNGF Bis
Loussima (Bis)
22.40
-
22.40
28.90
-
28.90
35.80
-
35.80
OML 113
Aje
35.65
292.70
84.43
63.05
492.80
145.18
104.45
791.90
236.43
Total
83.50
301.60
133.87
133.90
506.60
218.49
212.48
814.20
348.43
PETRONOR E&P ASA
ANNUAL REPORT 2022
21
Annual statement of reserves
Net PetroNor reserves (developed or under development):
1P
2P
3P
Oil
mmbo
Gas
bcf
Boe
mmboe
Oil
mmbo
Gas
bcf
Boe
mmboe
Oil mmbo
Gas
bcf
Boe
mmboe
16.83% PNGF Sud
Tchibouela
6.40
5.30
7.34
8.17
6.37
9.30
10.08
7.35
11.39
Tchibouela East
0.40
-
0.40
0.55
-
0.55
0.72
-
0.72
Tchendo
2.44
2.19
2.83
3.96
3.56
4.59
5.34
3.62
5.99
Tchibeli
1.20
-
1.20
2.36
-
2.36
3.63
-
3.63
Tchibouela East
0.82
-
0.82
1.61
-
1.61
2.50
-
2.50
Litanzi
1.29
-
1.29
1.86
-
1.86
2.38
-
2.38
Subtotal
12.55
7.49
13.88
18.51
9.93
20.27
24.65
10.97
26.61
23.56% PNGF Bis
Loussima (Bis)
-
-
-
-
-
-
-
-
-
Total
12.55
7.49
13.88
18.51
9.93
20.27
24.65
10.97
26.61
Net PetroNor contingent resources (undeveloped):
1C
2C
3C
Oil
mmbo
Gas
bcf
Boe
mmboe
Oil
mmbo
Gas
bcf
Boe
mmboe
Oil mmbo
Gas
bcf
Boe
mmboe
16.83% PNGF Sud
Tchibouela
2.29
1.5
2.56
3.57
2.32
3.98
5.74
3.75
6.41
Tchibouela East
1.09
-
1.09
1.95
-
1.95
3.19
-
3.19
Tchendo
0.91
-
0.91
1.54
-
1.54
3.23
-
3.23
Tchibeli
-
-
-
-
-
-
-
-
-
Tchibouela East
-
-
-
-
-
-
-
-
-
Litanzi
-
-
-
-
-
-
-
-
-
Subtotal
4.29
1.5
4.56
7.06
2.32
7.47
12.16
3.75
12.83
23.56% PNGF Bis
Loussima (Bis)
5.28
-
5.28
6.81
-
6.81
8.44
-
8.44
OML 113
Aje
5.35
45.70
12.97
9.66
78.70
22.78
14.49
111.50
33.08
Total
14.92
47.20
22.81
23.53
81.02
37.06
35.09
115.25
54.35
0
5
10
15
20
25
30
35
40
0
20
40
60
80
100
120
140
160
■
2023 AGR 2P
■
2023 AGR 2P+2C
– – – –
2022 AGR 2P+2C
– – – –
Cum 2P
– – – –
Cum 2C
2P+2C production rate and cumulative production from 2023 AGR CPR
Thousand
bopd gross
mmbo
gross
2021
2023
2025
2027
2029
2031
2033
2035
2037
2039
2041
PETRONOR E&P ASA
ANNUAL REPORT 2022
22
Annual statement of reserves
PETRONOR E&P ASA
ANNUAL REPORT 2022
23
Annual statement of reserves
PETRONOR E&P ASA
ANNUAL REPORT 2022
24
ESG report
ESG report 2022:
Creating value in a
sustainable manner
As PetroNor continues to grow and develop, we will continue to work to ensure that
our business is aligned with ESG objectives, addressing both the legal requirements
and the expectations of our stakeholders. PetroNor strongly believes that the ability
to create long-term and lasting values is based on maintaining high standards in
governance, operations, and business practices.
During 2023, PetroNor will further strengthen
its ESG-strategy, and will report according to
international standards also common in the oil
& gas industry, such as GRI (Global Reporting
Initiative) and TCFD (Task Force on Climate-
Related Financial Disclosures), to ensure that the
company’s efforts are documented in a reliable and
accessible manner. The company will also commit
to global guidelines, such as the UN Sustainable
Development Goals.
To enable the above, the company has started a
structured process to assess the sustainability
reporting, acknowledging new and strengthened
legislation in ESG. This process shall ensure that
policies, internal systems, and procedures comply
with the requirements of relevant acts.
AN OUTLOOK ON THE OIL AND GAS
INDUSTRY
As Russia invaded Ukraine in 2022, energy
security became a part of the equation to create
a sustainable energy system for the world and
created disruption in the energy supply to Europe
in particular. The energy transition continues
its momentum though, as policies for replacing
hydrocarbons with renewables help make each
country less dependent on imported energy. Further,
climate change poses tangible risks to the planet and
humanity.
Nations in Africa have been less exposed to the
turmoil in energy prices in Europe. However,
affordable clean energy for the environmental and
socioeconomic development of the countries in
Africa remains a priority. This was also part of the
discussions in COP27 in Sharm El-Sheik in Egypt
in December 2022. COP 27 had high on its agenda
the financing of sustainable energy systems in
developing countries, including Africa. One result
is the establishment of a fund to aid countries
facing severe damage from climate change.
PetroNor’s current operations are all located in
West Africa. The company believes that credible
operators such as PetroNor have a key role to play
in delivering a smooth and steady transition that
enables the African continent to continue to benefit
from its natural resources until a more viable and
fully sustainable solution is ready.
Natural gas is recognised as an important
transition fuel for Africa. In that context, PetroNor’s
ownership and instrumental role in the Aje license
offshore Nigeria are expected to contribute
positively in ESG terms for countries connected to
the West African Gas Pipeline (WAGP). The Aje field
ceased production and thus gas was flared in 2022.
PetroNor is seeking to provide technical advice to
the partnership, and aims to re-develop the field
providing natural gas into the WAGP, as well as
LPG to the Nigerian market. By engaging in these
activities, PetroNor will assist in lowering harmful
emissions in the region.
Debt financing of the oil and gas industry has
gradually become more demanding. Any energy
company in the sector has to demonstrate a track
record of sound operations with regards to ESG
to secure debt financing. PetroNor is taking this
challenge seriously, conducting its operations in a
prudent manner and so addressing these demands,
as well as diligently reporting on the same.
STAKEHOLDER ENGAGEMENT AND
MATERIALITY
The integrity of the capital markets is based on full
and fair disclosure of information. The company
treats all shareholders equally and seeks to provide
PETRONOR E&P ASA
ANNUAL REPORT 2022
25
ESG report
consistent and transparent information to ensure
fair treatment of all stakeholders.
On 1 July 2022, Norway enacted a new Transparency
Act. The main purpose of the Transparency Act is
to promote enterprises' respect for fundamental
human rights and decent working conditions in
connection with the production of goods and the
provision of services. The Act shall also ensure the
general public’s access to information regarding
how enterprises address adverse impacts on
fundamental human rights and decent working
conditions. As a result, the company shall publish
the required statement in accordance with the
guidelines of the Act. Further, the company will
provide adequate measures and arrangements to
support the requirements of the Act.
PetroNor will publish a statement on due diligence
in accordance with the Norwegian Transparency
Act by June 2023. The statement will be published
on the company website.
ENVIRONMENTAL IMPACT
PetroNor endeavours to conduct all operations
in an environmentally responsible manner. As an
operator of offshore concessions, it is the duty of
PetroNor to minimise any adverse impact on the
environment. It is the company’s policy to manage
all activities in a responsible manner, in accordance
with the principles of sustainable development.
Handling climate change
PetroNor is well aware that climate change is high
up on the political agenda. As a consequence,
new laws and regulations could have a material
impact on the company’s business. Additional
legal and/or regulatory measures could result
in project delays or cancellations, a decrease in
demand for fossil fuels and additional compliance
obligations. Each of these issues could materially
and adversely impact the company’s costs and/or
revenues. Another example would be sustained
lower oil and gas prices or price declines which
may inter alia lead to a material decrease in net
production revenues.
As part of an overall structured process to
strengthen its ESG efforts, PetroNor will integrate
climate risk to its risk management system and
report according to TCFD. Climate risk will be an
important aspect of financial and internal control
going forward, as well as short- and long-term
strategic planning and business development.
Reducing environmental impact
Carrying out environmental impact assessments
(EIA) prior to all major activities is one way
PetroNor seeks to minimise any adverse impact
on the environment. The company communicates
the results to all government agencies and other
relevant stakeholders. This later effort is also
part of the obligations in the new Norwegian
Transparency Act.
Further, PetroNor will ensure that environmental
management plans are in place and that their
implementation is regularly monitored. The
company will continually review and update
procedures regarding protection of the
environment to ensure they are valid and
appropriate. Contingency plans are in place to
swiftly mitigate any potential damage to the
environment. As a part of the management
plans, PetroNor will establish a plan for climate
accounting and start reporting on the company’s
emissions.
To the best of the company’s knowledge, all
operations have been conducted within the
limits set by approved environmental regulatory
authorities. The company is aware of its
environmental obligations with regards to its
exploration activities and ensures that it complies
with the relevant environmental regulations when
carrying out any exploration work.
During 2022, there have been no significant known
breaches of the environmental regulations in place
for the group’s exploration and production licenses.
SOCIAL IMPACT
Protecting Human Rights
As stated in its published code of conduct,
PetroNor is committed to conducting business
in a manner which respects human rights as set
out in the UN Universal Declaration of Human
Rights. The company seeks business partners and
contractors who follow equivalent high standards,
which is also part of the obligations in the new
Norwegian Transparency Act. In 2023, the company
will establish a tactical plan on how to verify
that partners and suppliers are prudent in the
protection of human rights.
The company has a zero-tolerance approach to
modern slavery and child labour in any part of the
organisation and supply chains. PetroNor strives
to ensure that all workers have safe, secure, and
healthy working conditions. The workplace shall
be free from any form of harsh or inhumane
treatment.
PetroNor’s customers, contractors, subcontractors,
and suppliers shall not engage in or use child
labour. Applicable national laws shall be complied
PETRONOR E&P ASA
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ESG report
with, and only workers who meet the applicable
minimum legal age requirement shall be employed.
The PetroNor management must ensure that all
PetroNor representatives (employees, directors,
consultants, etc.) are treated fairly. It is the
responsibility of the management to monitor
practices and attitudes that may lead to acts of
harassment in the workplace.
We expect our business partners and suppliers
to comply with applicable laws, respect
internationally recognised human rights and
adhere to our ethical standards when conducting
business with or on behalf of PetroNor. The
company’s standard service agreement oblige the
contractor to comply with the company’s code of
conduct where standards regarding human rights
are declared.
The company continues to follow-up its “know your
supplier policy”, using adequate judgement and
appropriate software to help make sure that it only
does business with organisations and individuals
that share its standards for compliance and
integrity.
PetroNor must refuse to do business with, and
provide no assistance to, those who engage in
illegal conduct related to PetroNor’s business.
In 2022, there were no cases identified in the
group nor its supply chains that were in violation of
human rights.
A healthy and safe work environment
Health and safety policies are essential for
PetroNor with the goal of avoiding accidents and
incidents and performing all its activities with focus
on and respect for people. The company’s objective
for health, environment, safety, and quality (HSEQ)
is zero accidents and zero unwanted incidents in all
activities.
PetroNor’s representatives frequently travel to
hold meetings or visit installations in connection
with held and prospective oil and gas assets.
The company focuses on oil and gas assets
located in West Africa. The group seeks to
ensure adequate safety levels for management
and employees travelling whether in Africa or
elsewhere.
As part of
the efforts to
achieve social
acceptability,
PetroNor aims
to work closely
alongside local
partners to
improve the
lives of the
communities it
operates in.
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With its non-operated licenses, PetroNor is
dependent on the efforts of the operators with
respect to achieving prudent ESG-performance.
However, the company has chosen to take an active
role in all license committees with the conviction
that high safety standards are the best means
to achieve successful operations. Through this
involvement, PetroNor can influence the choice of
technical solutions, vendors and quality of applied
procedures and practices.
In 2022, no accidents that resulted in loss of human
lives or serious damage to people or property have
been reported. Time lost due to employee illness or
accidents was negligible. Employee safety is of the
highest priority, and the company is continuously
working towards identifying and employing
administrative and technical solutions that ensure
a safe and efficient workplace.
Investing in local communities
PetroNor has a strong focus on corporate social
responsibility (CSR) as well as an ethical code of
conduct. Social acceptability is a foundation for
conducting the company’s business.
As part of the efforts to achieve social acceptability,
PetroNor aims to work closely alongside local
partners to improve the lives of the communities
it operates in. To ensure the company’s efforts are
sustainable, corporate social investments were
and are primarily focused on project work in the
following key areas:
■
Access to education and human capacity
development: projects designed to expand
educational opportunities through building
schools, scholarships.
■
Access to quality health: training local
health and medical professionals,
investments in medical equipment and
health facilities.
■
Projects/campaigns designed to help local
communities access/improve community
conditions.
The company is supporting the CSR projects
through its subsidiary in the Republic of Congo
such as drilling water wells to provide drinking
water to communities, as well as the projects
organised by the operator in the PNGF Sud license
group.
During 2022 this Congolese subsidiary allocated
USD 1.5 million (2021 USD 1.5 million) of its annual
profits as a provision towards CSR projects.
Petronor
E&P has an
equality concept
integrated in its
human resources
policies.
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Equality and diversity
PetroNor aims to maintain a working environment
with equal opportunities for all based on
performance; irrespective of gender, age, religion,
ethnicity, sexual preference, political belief, disability,
or any other protected status. PetroNor values each
member of the team and is committed to providing
an environment recognised for its positive energy,
equality, and professionalism, and that treats
everyone with fairness, respect, and dignity.
The company has an equality concept integrated
in its human resources policies. A diversified
working environment is embraced, and the group’s
personnel policies promote equal opportunities
and rights, and prevents discrimination based on
gender, ethnicity, colour, language, religion or belief.
All employees are governed by PetroNor’s code of
conduct, to ensure uniformity in behaviour across a
workforce representing a multitude of nationalities.
PetroNor is a knowledge-based group in which
a majority of the workforce has earned college
or university level educations; or has obtained
industry-recognised skills and qualifications
specific to their job requirements. Employees are
remunerated exclusively based upon skill level,
performance, and position.
Proportion of local employees in West Africa:
2022
actual
2021
actual
Staff
59%
61%
Board
Nil
Nil
Proportion of women:
2022
actual
2021
actual
Staff
37%
36%
Executive management team
Nil
Nil
Board
50%
50%
1)
Prior to the redomicile of PetroNor to Norway the percentage
of the board that were female was 29 per cent.
During 2022, the monthly average number of
employees and long-term consultants was 34
(2021: 35).
Harassment and intimidation
Courtesy and respect are important aspects of a
sound working environment and business dealings.
PetroNor does not tolerate discrimination of
colleagues or others affected by its business. The
company will not tolerate any verbal or physical
conduct that may lead to the harassment of others,
disrupts the work performance of others, or
conduct that creates a hostile work environment.
The company expects all employees to treat
everyone they come into contact with through work
or work-related activities in a respectful manner.
In 2022, there were no reported instances of
intimidation or harassment .
CORPORATE GOVERNANCE
The main objective of PetroNor’s corporate
governance framework is to develop a strong,
sustainable and competitive company in the best
interest of the shareholders, employees and
society at large, within the laws and regulations of
the respective country.
PetroNor’s board of directors are responsible
for establishing the Corporate Governance
framework of the company. Further, PetroNor
seeks to comply with all the requirements covered
in The Norwegian Code of Practice for Corporate
Governance (the “Code”).
The company has implemented corporate values,
ethical guidelines and guidelines for corporate
social responsibility. These values and guidelines
are described in PetroNor’s Code of Conduct with
further details in internal policies.
In accordance with the Norwegian Accounting
Act, the company annually reports on matters
relating to environmental and social issues, labour
environment, equality and non- discrimination, the
compliance with human rights and the combat of
corruption and bribery.
The board of directors and management aim for a
controlled and profitable development and long-
term creation of growth through well-founded
governance principles and risk management.
The Board will give high priority to finding the
most appropriate working procedures to achieve,
inter alia, the aims covered by these corporate
governance guidelines and principles.
The company has in this respect initiated a
structured process to ensure its adherence to
changes in legal requirements resulting in an
improved ESG strategy and corresponding results
thereof. The 2022-enacted Transparency Act is
particularly noted, and the board of directors has
actioned plans, as per the captioned Act, to publish a
statement for due diligence before end of June 2023.
HSE management
To avoid negative impact on the environment,
local communities and the workforce, the
company integrates technical, economic and
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ESG report
HSE considerations into decision making and
operational processes to achieve long-term
sustainability of the business and to reduce risk.
The company strives for continuous improvement
as lessons learned from past operations are
incorporated into business practices going forward.
The company endeavours to comply with
international and local HSE standards. The health,
safety and welfare of all personnel involved and of
the general public is the highest priority.
All employees and business partners are encouraged
to speak up and stop any work if they feel it is or
could be unsafe to life or the environment. Further
to report any instances of unsafe practices and/or
any dangerous working situations.
In 2022, there were no matters identified that were
in violation of HSE management in the group.
Code of Conduct
A prudent code of conduct is of strategic importance
to the business, and part of the overall framework of
environmental, social and governance (ESG). It has
been approved by the board of directors and is to be
revised from time to time to reflect the activities as
the company develops and as laws and regulations
may change. The code of conduct is available on
the company’s website. The code of conduct will be
updated on a yearly basis, and there will be periodic
training to ensure all representatives are up to
date on how PetroNor expects them to act when
representing the company.
PetroNor shall conduct business with integrity,
respecting the cultures, dignity, and rights of
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individuals everywhere it operates. The company
shall always strive to maintain high ethical
standards and conduct its business in a way that
makes people proud to work for PetroNor. Further,
PetroNor shall strive to ensure that activities also
create local growth in a sustainable manner in each
of the countries in which it operates, both through
local partnerships and competence transfer.
The code of conduct is based on PetroNor’s
fundamental principles of business ethics. It
summarises the company’s values and standards
and further describes what is expected of both
the company and its employees. The company
expects all its representatives to comply with
the code of conduct. PetroNor also expects all
business partners, joint venture partners and
suppliers to act in a manner that is consistent
with the principles of the code of conduct.
Further, compliance with national, regional, and
international laws and regulations is mandatory for
all activities in the company.
In 2022, no cases have been identified in the group,
its supply chains or in its business relations that are
in violation of the code of conduct.
Anti-corruption
PetroNor has a zero-tolerance approach to
bribery and corruption and is committed to acting
professionally, fairly and with integrity in all its
business dealings and relationships. The company
complies with all applicable anti-corruption laws
and regulations. Overall, the company’s policy is to
conduct all of its business in an honest and ethical
manner.
PetroNor’s representatives must not accept, make,
seek, or offer bribes or monetary advantages
of any kind. This includes money, benefits,
entertainment or services or any material benefit
to or from public officials or other business
partners, which are given with the intent of gaining
improper business or personal gain. In this respect,
the company has established a gift & hospitality
register to ensure compliance with the policy.
The current shareholders and all of PetroNor’s
representatives are required to comply with
Norwegian laws, the UK Bribery Act and the US
FCPA as well as local laws in the jurisdictions where
the company conduct business.
PetroNor’s anti-bribery and corruption policy can
be found on the company’s website. The policy
will be updated annually, with periodic training of
company representatives. Each representative of
the company signs the code of conduct, stating
they have read it and will comply with it.
The company is aware of an ongoing investigation
by Norwegian Økokrim (National Authority
for Investigation and Prosecution of Economic
and Environmental Crime) regarding alleged
corruption. As per press release from Økokrim,
the investigation is focused on individuals, and
neither PetroNor E&P ASA nor any of its subsidiary
companies have had charges brought against them.
In 2022, no cases have been identified in the group,
its supply chains or in its business relations that are
in violation with laws and/or the anti-bribery and
corruption policy.
Transparency initiative
The company registered in 2020 as a supporting
company with the Extractive Industries
Transparency Initiative, EITI.
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ESG report
Over 50 countries have committed to strengthening
transparency and accountability of their extractive
sector management by implementing the EITI
Standard. Currently, of the countries PetroNor
has oil & gas operations in, the Republic of Congo,
Nigeria and Senegal have committed to the EITI
standard. Norway and the UK are also signatories
to the initiative.
Countries are assessed on their progress in
meeting the requirements of the EITI Standard
through Validation, progress of "very high"
demonstrating
best progress in the three
juristictions in the EITI's quality assurance
mechanism:
Country
Current status
Latest validation
Republic of Congo
Moderate
2023
Nigeria
Satisfactory progress
2019
Senegal
Very high
2021
PetroNor supports the EITI Association in its
objective to make the EITI Principles and the
EITI requirements the internationally accepted
standard for transparency in the oil, gas and
mining sectors, recognising that strengthened
transparency of natural resource revenues can
PetroNor believes
in openness and
transparency for
all its business
dealings and
activities.
PETRONOR E&P ASA
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ESG report
reduce corruption, and the revenue from extractive
industries can transform economies, reduce
poverty, and raise the living standards of entire
populations in resource-rich countries.
The company discloses taxes and payments to
governments in connection to its oil and gas licences
in accordance with the legal requirements in the
Norwegian Security Trading Act. This country-by-
country reporting is included in the directors’ report.
Supporting companies uphold the EITI Standard
through reporting in EITI implementing countries
where they operate. Supporting companies are
expected to meet a lot of expectations. Many of
these expectations are also covered by the rules
of companies listed on the Oslo Stock Exchange.
Where relevant, PetroNor will make efforts to
satisfy all expectations.
Whistle blower mechanism
PetroNor believes in openness and transparency
for all its business dealings and activities. Illegal
or unethical matters may negatively impact the
working environment and the business in general.
It is important that the company deals with such
matters properly. All current and former PetroNor
representatives, who have concerns about any
aspect of the company’s business are encouraged
to raise them and to disclose any information which
relates to improper, unethical or illegal conduct
with regards to the activities of the company.
Every PetroNor representative has a right and
an obligation to raise their concerns about our
business including matters such as:
■
Potential breaches of law
■
Breach of ethical norms and internal guidelines
■
Discrimination or harassment at the workplace
■
Conditions that may endanger life or health
Whistleblowers shall not suffer any detrimental
treatment from either the company or colleagues as
a result of raising a genuine concern. An independent
disclosure service is available at:
https://petronor.
integrity.complylog.com
/. ComplyLog is part of
Euronext Corporate Services making the service
available to listed companies on any of their stock
exchanges. If a case is reported, the independent
disclosure service will contact the correct person
within the company to start dealings with the
disclosure. Also, if a disclosure is made directly to
a management representative, or to a member of
the board, the person receiving the disclosure is
obligated to follow up the disclosure according to the
agreed procedures.
No cases were reported during 2022.
Responsibility for ESG
The CEO is responsible for the company’s daily
operations. Further, the CEO ensures that all
necessary information is presented to the board
of directors. The board will evaluate the company’s
vision and strategy at least on a yearly basis.
The board has the overall responsibility for the
management and supervision of the activities in
general.
The board decides the strategy of the company and
is the ultimate decision taker in new projects and/
or investments.
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ESG report
Statement on corporate
governance in PetroNor E&P
PetroNor E&P ASA (“PetroNor” or “the company”, and with its subsidiaries; the
“group”) aspires to ensure confidence in the company and the greatest possible value
creation over time through efficient decision making, clear division of roles between
the shareholders, the management, and the board of directors (“the board”) as well as
adequate communication.
PetroNor seeks to comply with all the requirements
covered in The Norwegian Code of Practice for
Corporate Governance (the “Code”). The latest
version of the Code of 14 October 2021 is available
on the website of the Norwegian Corporate
Governance Board,
www.nues.no
. The Code is
based on the “comply or explain” principle, in that
companies should explain alternative approaches
to any specific recommendation. The company also
seeks to comply with the Oslo Stock Exchange Code
of Practice for Investor Relation (IR) of 1 July 2019.
1:
IMPLEMENTATION AND REPORTING ON
CORPORATE GOVERNANCE
The main objective for PetroNor’s corporate
governance is to develop a strong, sustainable
and competitive company in the best interest of
the shareholders, employees and society at large,
within the laws and regulations of the respective
country. The board of directors (the board) and
management aim for a controlled and profitable
development and long-term creation of growth
through well-founded governance principles and
risk management.
PetroNor seeks
to communicate
clearly with all
stakeholders.
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Corporate governance
The board will give high priority to finding the
most appropriate working procedures to achieve,
inter alia, the aims covered by these corporate
governance guidelines and principles.
The Code comprises 15 points. The corporate
governance report is available on the company’s
website
www.petronorep.com
.
2: BUSINESS
PetroNor is a full cycle oil and gas exploration
and production company listed on the Oslo Stock
Exchange with the ticker PNOR. PetroNor holds
exploration and production assets in Africa.
The company’s business is defined in the Articles of
Association §3, which states:
“The company’s business is to invest in companies
and entities that are involved in the energy industry
and the oil and gas industry worldwide, as well as
investment activities and other related activities.”
The company is focused on growing production and
reserves by leveraging existing assets to capitalise
on new venture opportunities combined with
targeted high impact exploration. With strategic
and long-term large shareholders from Abu Dhabi
and Norway, PetroNor will look to capitalise on the
industry experience and government relations in
these jurisdictions.
PetroNor’s vision is to:
■
Become a leading full-cycle E&P company.
■
Use our experience and competence in
enhancing value in projects in Africa to the
benefit of the countries we operate in and the
shareholders of the company.
■
Create values for the shareholders in a
sustainable manner where due regards are
given to economical, social, and environmental
issues. The board will evaluate the group's vision
and strategy at least on a yearly basis, also
including input from shareholders not directly
represented in the board of directors.
The oil and gas exploration and production industry
is a high-risk-high-reward industry where PetroNor
is exposed to the fluctuations in the oil price, risks
involved in petroleum production as well as drilling
of production, appraisal and exploration wells. The
company will seek opportunities across its core
region but may opportunistically invest outside of
its core area.
PetroNor will aim to steadily build and increase
its reserve base while using free cash flow to
pursue defined exploration targets in selected and
highly prospective basins with a view to delivering
significant value to its shareholders from high impact
wells whilst being a good corporate citizen and
promoting excellence in operations and innovation.
PetroNor has implemented corporate values, ethical
guidelines, and guidelines for corporate social
responsibility. These values and guidelines are
described in PetroNor’s Code of Conduct with further
details in internal policies. In accordance with the
Norwegian Accounting Act, the company annually
reports on matters relating to environmental and
social issues, labour environment, equality and non-
discrimination, the compliance with human rights,
and the combat of corruption and bribery.
The board of directors evaluates the company’s
objectives, strategies, and risk profiles yearly.
3:
EQUITY AND DIVIDENDS
The oil and gas E&P business is highly capital
dependent, requiring PetroNor to be sufficiently
capitalised. PetroNor’s board of directors will ensure
that the company at all times has an equity capital at
a level appropriate to its objectives, strategy and risk
profile. The board needs to be proactive in order for
PetroNor to be prepared for changes in the market.
Mandates granted to the board to increase the
company’s share capital or to purchase PetroNor
shares will normally be restricted to defined
purposes and are normally limited in time to the
following year’s annual general meeting. Any
acquisition of PetroNor shares will be carried
out through a regulated marketplace at market
price, and the company will not deviate from the
principle of equal treatment of all shareholders. If
there is limited liquidity in the company’s shares
at the time of such transaction, the company will
consider other ways to ensure equal treatment of
all shareholders.
Mandates granted to the board for issue of shares
for different purposes will each be considered
separately by the general meeting.
Payment of dividends will be considered in the
future, based on the company’s capital structure
and dividend capacity as well as the availability of
alternative investments.
4:
EQUAL TREATMENT OF SHAREHOLDERS
PetroNor has one class of shares representing one
vote at the annual general meeting. The Articles of
Association contains no restriction regarding the
right to vote.
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Corporate governance
Any decision to deviate from the principle of equal
treatment by waiving the pre-emption rights of
existing shareholders to subscribe for shares in the
event of an increase in share capital will be justified
and disclosed in the stock exchange announcement
of the increase in share capital. Such deviation
will be made only in the common interest of the
shareholders of the company.
Transactions in PetroNor shares will be made over
the stock exchange or by other means at market
prices. If there is a limited liquidity in the PetroNor
shares, the board will consider other ways of
dealing with equal treatment of shareholders when
making transactions in the PetroNor shares.
5:
SHARES AND NEGOTIABILITY
The shares of PetroNor are listed on the Oslo Stock
Exchange. There are no restrictions on ownership,
trading or voting of shares in PetroNor’s Articles of
Association.
6: GENERAL MEETINGS
PetroNor’s annual general meeting is to be held by
the end of June each year.
The board will take necessary steps to ensure that
as many shareholders as possible may exercise their
rights by participating in general meetings of the
company, and to ensure that general meetings are
an effective forum for the views of shareholders and
the Board. The company shall arrange the general
meetings so that the shareholders can attend by
electronic means, unless there is a reason to refuse.
An invitation and agenda (including proxy) will be
sent out no later than 21 days prior to the meeting
to all shareholders in the company. The invitation
will also be distributed as a stock exchange
notification. The invitation and support information
on the resolutions to be considered at the general
meeting will furthermore normally be posted on
the company’s website
www.petronorep.com
no
later than 21 days prior to the date of the general
meeting.
The recommendation of the nomination committee
will normally be available on the company’s website
at the same time as the notice.
PetroNor will ensure that the resolutions and
supporting information distributed are sufficiently
detailed and comprehensive to allow shareholders
to form a view on all matters to be considered at the
meeting.
According to Article 7 of the company’s Articles of
Association, registrations for the company’s annual
general meeting must be received at least five
calendar days before the meeting is held.
The chair of the board, as well as the company
auditor and CEO of the company, shall be present
at the general meetings, unless the circumstances
preclude such. The chair of the nomination
committee as well as other board members should
attend the general meetings. An independent
person to chair the general meeting will, to the
extent possible, be appointed. Normally, the general
meetings will be chaired by the company’s external
corporate lawyer.
Shareholders who are unable to attend in person
will be given the opportunity to vote by proxy.
The company will nominate a person who will
be available to vote on behalf of shareholders
as their proxy. Information on the procedure for
representation at the meeting through proxy will
be set out in the notice for the general meeting. A
form for the appointment of a proxy, which allows
separate voting instructions for each matter to
be considered by the meeting and for each of the
candidates nominated for elections will be prepared.
Dividend, remuneration to the board, and the
election of the auditor, are among the matters
that will be decided at the annual general meeting.
After the meeting, the minutes are released on the
company’s website.
7: NOMINATION COMMITTEE
According to Article 8 of the company’s Articles of
Association, the company shall have a nomination
committee of up to three members, to be elected
by the general meeting. The nomination committee
shall present proposals to the general meeting
regarding (i) election of the chair of the board,
directors and any deputy members, and (ii) election
of members of the nomination committee. The
nomination committee shall also present proposals
to the general meeting for remuneration of the
board and the nomination committee, which is to
be determined by the general meeting. The general
meeting shall adopt instructions for the nomination
committee. Due to the company's current
shareholder composition, the nomination committee
will not necessarily be independent of the major
shareholders and the company will continuously
consider this matter and whether to later propose a
more independent appointment of the nomination
committee.
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Corporate governance
8:
BOARD OF DIRECTORS – COMPOSITION
AND INDEPENDENCE
The composition of the board ensures that
the board represents the common interests
of all shareholders and meets the company’s
need for expertise, capacity, and diversity. The
members of the board represent a wide range
of experience including upstream E&P industry,
oil service, energy politics and finance. The
composition of the board ensures that it can
operate independently of any special interests.
Board members are normally elected for a period
of two years. Recruitment of members of the
board may be phased so that the entire board
is not replaced at the same time. The general
meeting elects the chair and deputy chairperson
(if any). The company’s website and annual report
provide detailed information about the directors'
expertise and independence. The company has
a policy whereby the members of the board are
encouraged to own shares in the company, but
to dissuade from a short-term approach which is
not in the best interests of the company and its
shareholders over the longer term.
The board is to be composed of at least 2
members who are independent of the company's
major shareholders, and more than half of the
members are to be independent of the company's
management and material business relations.
9:
THE WORK OF THE BOARD AND
SUB-COMMITTEES
The board has the overall responsibility for the
management and supervision of the activities in
general. The CEO is responsible for the company’s
daily operations and ensures that all necessary
information is presented to the board.
The board decides the strategy of the company
and is the final decision in new projects and/or
investments. The board’s instructions for its own
work as well as for the executive management have
particular emphasis on clear internal allocation of
responsibilities and duties. The chair of the board
ensures that the board’s duties are undertaken in
efficient and correct manner.
The board has established separate rules of
procedures for its work. Such rules of procedure
also address how the board and management shall
deal with agreements with related parties, and in
particular whether independent valuations of such
agreements should be obtained. In addition, the
board will report on such agreements in its annual
report.
The board shall stay informed of the company’s
financial position and ensure adequate control
of activities, accounts, and asset management.
The director’s experience and skills are crucial to
the company both from a financial as well as an
operational perspective.
An annual schedule for the board meetings is
prepared and discussed together with a yearly plan
for the work of the board. The board will consider
evaluating its performance and expertise annually.
The company has guidelines to ensure that
members of the board and executive personnel
notify the board if they have any material direct or
indirect interest in any transaction entered into by
the company. Should the board need to address
matters of a material character in which the chair is
or has been personally involved, the matter will be
chaired by an independent member of the board to
ensure a more independent consideration.
The board has established an audit & risk
committee and a remuneration committee as
association, of the board.
The audit & risk committee shall consist of at least
three members appointed by and among the board.
All members of the audit & risk committee must be
non-executive directors, a majority of the members
should be independent of the management and the
company, and there must be adequate accounting
and finance competence among the members of
the committee. The audit & risk committee's role is
to supervise the group's accounting and financial
performance, as well as ensuring that adequate
internal control and reporting requirements exist.
The role is further detailed in a separate audit &
risk committee charter.
The remuneration committee shall consist of up to
three members appointed by and among the board.
All members shall be independent of the
management. The remuneration committee’s role
is to assist and advise the board on matters relating
to the remuneration of the board and management,
as well as salary, bonus and benefit policies for the
employees in general. The role is further detailed in
a separate remuneration committee charter.
In addition, the board created a further sub-
committee to support the board with the
independent fact finding process relating to
Økokrim matter. The committee does not comprise
any persons subject to the charges or any
investigations.
PETRONOR E&P ASA
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37
Corporate governance
10: RISK MANAGEMENT AND INTERNAL
CONTROL
Financial and internal control, as well as short-
and long-term strategic planning and business
development, all according to PetroNor’s business
idea and vision and applicable laws and regulations,
are the board’s responsibilities and the essence of
its work. This emphasises the focus on ensuring
proper financial and internal control, including risk
control systems.
The board approves the company’s strategy and
level of acceptable risk, as documented in the
guiding tool “Risk Management” described in
the relevant note in the consolidated financial
statements in the annual report.
The board carries out an annual review of the
company’s most important areas of exposure to
risk and its internal control arrangements.
For further details on the use of financial
instruments, refer to relevant note in the
consolidated financial statements in the annual
report and the company’s guiding tool “Financial
Risk Management” described in relevant note in
the consolidated financial statements in the
annual report.
11: INFORMATION AND COMMUNICATIONS
The company has established guidelines for
the company’s reporting of financial and other
information. The chair and CEO are authorised by
the board to speak to, or be in contact with the press.
The company publishes an annual financial
calendar including the dates the company plans to
publish the quarterly and interim updates and the
date for the annual general meeting. The calendar
can be found on the company’s website and will
also be distributed as a stock exchange notification
and updated on Oslo Stock Exchange’s website.
The calendar is published at the end of the fiscal
year, according to the continuing obligations for
companies listed on the Oslo Stock Exchange.
All information to shareholders is published
simultaneously on the company’s website and to
appropriate financial news media.
PetroNor normally makes two half-year
presentations per year to shareholders, potential
investors and analysts in connection with half-
year quarterly earnings reports or trading updates,
in addition to four quarterly production updates.
The half-year presentations are held through
webinars to facilitate participation by all interested
PetroNor has
established
guidelines for
reporting
PETRONOR E&P ASA
ANNUAL REPORT 2022
38
Corporate governance
shareholders, analysts, potential investors, and
members of the financial community. A question-
and-answer session is held at the end of each
presentation to allow management to answer the
questions of attendees. A recording of the webinar
presentation is retained on the company’s website
www.petronorep.com
for a limited number of days.
The company also makes investor presentations
at conferences in Norway and internationally. The
information packages presented at such meetings
are published simultaneously on the company’s
website.
12: TAKE-OVERS
PetroNor has established the following guiding
principles for how the board will act in the event
of a take-over bid. In a bid situation, the board
shall help to ensure that shareholders are treated
equally, and that the company’s business activities
are not disrupted unnecessarily. The board shall
ensure that shareholders are given sufficient
information and time to form a view of relevant
offers.
Today, the board does not hold any authorisations
as set forth in Section 6-17 of the Securities Trading
Act, to effectuate defence measures if a takeover
bid is launched on PetroNor.
The board may be authorised by the general
meeting to acquire its own shares but will not be
able to utilise this in order to obstruct a takeover
bid, unless approved by the general meeting
following the announcement of a takeover bid.
As a rule, the company will not enter into agreements
with the purpose to limit the company’s ability to
arrange other bids for the company’s shares unless
it is clear that such an agreement is in the common
interest of the company and its shareholders. As a
starting point, the same applies to any agreement
on the payment of financial compensation to the
bidder if the bid does not proceed. Any financial
compensation will as a rule be limited to the costs
the bidder has incurred in making the bid. The
company will generally seek to disclose agreements
entered into with the bidder that are material to the
market’s evaluation of the bid no later than the time
of the publishing of the announcement that the bid
will be made.
In the event of a take-over bid for the company’s
shares, the board will not exercise mandates
or pass any resolutions with the intention of
obstructing the take-over bid unless this is
approved by the general meeting following
announcement of the bid.
If an offer is made for the company’s shares, the
Board will issue a statement evaluating the offer
and making a recommendation as to whether
shareholders should or should not accept the
offer. The board will also arrange a valuation with
an explanation from an independent expert. The
valuation will be made public no later than at
the time of the public disclosure of the board’s
statement. Any transactions that are in effect a
disposal of the company’s activities will be decided
by a general meeting.
13: AUDITOR
The auditor will be appointed by the general
meeting.
The board has appointed an audit & risk committee
as a sub-committee of the board, which will
meet with the auditor regularly. The auditor shall
on an annual basis submit an additional report
to the audit committee in which it declares its
independence and explains the results of the
statutory audit carried out by providing a range of
information about the audit.
The auditor will send a complete management
letter/report to the board – which is a summary
report of risks faced by the business. The auditor
participates in meetings of the Board that deal with
the annual accounts, where the auditor reviews
any material changes in the company’s accounting
principles, comments on any material estimated
accounting figures and reports all material matters
on which there has been disagreement between
the auditor and the executive management of the
company.
In view of the auditor’s independence of the
company’s executive management, the auditor is
also present in at least one board meeting each
year at which neither the CEO nor other members
of the executive management are present. The
board shall on an annual basis review the internal
control procedures jointly with the auditor,
including weaknesses identified by the auditor and
assess proposals for improvement.
PetroNor places importance on independence and
has established guidelines in respect of retaining
the company’s external auditor by the company’s
executive management for services other than the
audit.
The board reports the remuneration paid to the
auditor at the annual general meeting, including
details of the fee paid for audit work and any fees
paid for other specific assignments.
PETRONOR E&P ASA
ANNUAL REPORT 2022
39
Corporate governance
EYAS ALHOMOUZ
Chair of the board
Qualifications:
Mr Alhomouz graduated from Brigham Young
University in Provo, UT with a degree in Chemical
Engineering and from the Colorado School of Mines,
in Golden, CO with a master's degree in Mineral
and Energy Economics.
Experience:
Mr Alhomouz has a strong experience from the oil
and gas sector covering the US, North Africa, and
the GCC. He began his career with Schlumberger
Oilfield Service as a wireline engineer in Midland,
Texas. From there he went on to work for Cromwell
Energy in Denver, Colorado, as international
business development manager. Then, as a COO
and financial director of Prism Seismic, he oversaw
the growth of the Colorado based consulting and
oil and gas software development firm and later
the acquisition of the company by Sigma Cubed,
where, post-acquisition of Prism Seismic, he went
on to serve as a director of business development,
Middle East. Mr. Alhomouz's career then took him
to Qatar as a general manager of Jaidah Energy, an
Omani-Qatari owned company servicing the oil and
gas sector in Qatar. Mr. Alhomouz is currently the
CEO of Petromal Sole Proprietorship LLC.
Mr Alhomouz is not independent of the main
shareholding.
JOSEPH ISKANDER
Director
Qualifications:
Mr Iskander holds a Degree in Accounting and
Finance with high distinction from Helwan University,
Egypt.
Experience:
Mr Iskander brings over 25 years of experience
in the financial services industry, covering asset
management, private equity, portfolio management,
financial restructuring, research, banking, and audit.
He began his career at Deloitte & Touche (Egypt) as an
auditor. Mr. Iskander served as non-executive director
on the boards of EFG Hermes in Egypt, Oasis Capital
Bank in Bahrain, Sun Hung Kai & Co in Hong Kong,
Qalaa Holdings in Egypt, Emirates Retakaful in UAE,
Marfin Laiki Bank in Cyprus and Marfin Investment
Group in Greece. Mr. Iskander headed the research
team at Egypt’s Prime Investments and was earlier an
investment advisor at Commercial International Bank
(CIB) He then went on and joined Dubai Group as an
investment manager in 2004 and has worked on a
range of M&A transactions, advisory services, asset
management, and private equity transactions with a
collective value in excess of USD 8 billion. Mr. Iskander
was managing director of asset management at
Dubai Group and the former head of research at
Dubai Capital Group until 2009. He joined Emirates
International Investment Company in July of 2017 as
the head of investments
spearheading and managing
EIIC’s investments. He is also the chief executive
officer of Entrust Capital Limited an EIIC company. EIIC
is a subsidiary of National Holding in Abu Dhabi.
Mr Iskander is not independent of the main shareholding.
Board of directors
PETRONOR E&P ASA
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40
Board of directors
INGVIL SMINES TYBRING-GJEDDE
Director
Qualifications:
Ms Smines Tybring-Gjedde graduated from BI
Norwegian Business School with a Master’s degree
in Management Programs, with strong focus on
interaction, leadership, and strategy.
Experience:
Experienced former Norwegian minister of national
public security with overall responsibility of public
safety, emergency planning, and cybersecurity.
Mrs Tybring Gjedde was also minister of Svalbard
and the Norwegian polar regions. Before her
position as minister, she served as deputy
minister in the Ministry of Petroleum and Energy
for 4 years, with a portfolio of exploration policy,
development, operations, exploration activity,
the Ministry's contact with other petroleum-
producing countries and international forums, in
addition to the government's national climate
policy, global environmental issues, and the
government's CCs full-scale project. Mrs Tybring
Gjedde has a demonstrated history of working in
the O&G, energy, and renewable industry in private
and state-owned companies in various leading
positions for more than 20 years.
Ms Smines Tybing-Gjedde is an independent director.
GRO KIELLAND
Director
Qualifications:
Mrs Kielland holds an MSc in Mechanical
Engineering from the Norwegian University of
Science and Technology (NTNU).
Experience:
Mrs Kielland has over 30 years of experience
having held a number of leading positions in
the oil and gas industry both in Norway and
abroad, among others as CEO of BP Norway. Her
professional experience includes work related to
both operations and field development, as well as
HSE. She has been holding non-executive roles for
the last 15 years, mainly within the energy industry,
working with different ownership structures,
including listed companies, privately owned, PE
owned and start-up companies.
Mrs Kielland is an independent director.
PETRONOR E&P ASA
ANNUAL REPORT 2022
41
Board of directors
AZZA FAWZI
Director
Qualifications:
Ms Fawzi holds a B.S.B.A, Finance from American
University Kogod School of Business.
Experience:
Mrs. Fawzi is a former Shell finance executive
where her areas of responsibility included
the US,
Qatar, Brazil, Nigeria, Egypt, Oman, UAE, Malaysia,
Mexico, and India, contributing to the business
turnaround of Deep Water in the US Gulf of Mexico.
As a senior finance leader, she works not only to
ensure that the appropriate control framework are
in place but also to provide strategic direction and
ensure value maximisation for shareholders. She
is an international oil and gas finance executive
with global board, audit, and executive leadership
experience.
Mrs Fawzi is an independent director.
JARLE NORMAN-HANSEN
Director
Qualifications:
Mr Norman-Hansen holds a Bachelor’s degree in
Economics from BI Norwegian Business School and an
ICFA from The Norwegian School of Economics.
Experience:
Mr. Norman-Hansen has more than 30 years
of experience from the Nordic property and
capital markets overseeing acquisitions and asset
management of multibillion investments as well as
acting as advisor to many of Scandinavia’s largest real
estate capital markets transactions.
Mr Norman-Hansen is not independent of shareholding.
Board of directors
PETRONOR E&P ASA
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42
Board of directors
PETRONOR E&P ASA
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43
Board of directors
JENS PACE
Interim chief executive officer
Qualifications:
Mr Pace holds a BSc in Geology
and Oceanography from the
University of Wales and an MSc
in Geophysics from Imperial
College, London, UK.
Experience:
Jens Pace has over 40 years of
industry experience gained
initially with major companies,
BP, and Amoco, and since
2012, with African Petroleum
Corporation and PetroNor. With
a background in geoscience,
Jens has held senior leadership
positions in E&P for the
past 20 years, operating in a
wide variety of international
jurisdictions. Jens was CEO of
African Petroleum and following
the merger with PetroNor, he
served as a director. On 9
February 2022, Jens stepped
down from the board and was
appointed as interim CEO.
CLAUS FRIMANN-DAHL
Chief technical officer
Qualifications:
Mr Frimann-Dahl holds a BSc
in Petroleum Engineering from
Texas A&M University and an
MSc from the University of
Trondheim (NTH).
Experience:
Mr. Frimann-Dahl has 30 years’
experience from the oil and gas
industry, with managerial and
technical roles. His experience
covers operational roles with
Phillips Petroleum, Norsk Hydro,
and Hess in the North Sea
Norway and Denmark, Russia,
Egypt and the US. He was the
co-founder of Ener Petroleum
which was later acquired by
Dana Petroleum and KNOC.
MICHAEL BARRETT
Exploration officer
Qualifications:
Mr. Barrett has a BSc in
Geology & Geophysics from
Durham University and a
MSc in Petroleum Geology
& Geophysics from Imperial
College, Royal School of Mines.
Experience:
Mr. Barrett has over 30 years
global exploration experience
from his career at Chevron
Corporation, and more recently
at Addax/Sinopec International
African Petroleum and PetroNor.
Mr. Barrett has held a variety
of technical roles covering
exploration and new ventures,
and was part of Chevron’s
global Exploration Review
Team, specialising in play and
prospect risk assessment, and
volumetric assessment. He
has extensive experience in
portfolio management and
commercial evaluation of oil and
gas opportunities. Mr. Barrett
also brings added strength to
the team with his background
in quantitative geophysics,
stratigraphic interpretation
workflows and 3D visualisation.
Executive management
PETRONOR E&P ASA
ANNUAL REPORT 2022
44
Executive management
EMAD SULTAN
Strategy and contracts manager
Qualifications:
Mr. Sultan holds a BSc Mechanical
Engineering degree from the
University of Washington.
Experience:
Mr. Sultan has 20 years of
international exploration and
production experience. He has
held multiple operation and
marketing management positions
with international oil field services
companies. He has also worked in
a number of technical, contracting
and strategy management roles with
major oil and gas operators.
CHRISTOPHER BUTLER
Group financial controller
Qualifications:
Mr. Butler is a Fellow of
the Institute of Chartered
Accountants in England and
Wales and has a BSc in Physics
from Warwick University.
Experience:
Mr. Butler has over 18 years
of financial and corporate
experience from positions in
public practice, oil & gas, and
mining spread over Africa, Asia,
and Europe, with roles that
included financial reporting,
contract negotiations, M&A, due
diligence, treasury and system
implementations.
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Executive management
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46
Board of directors’ report
Board of directors’ report
PetroNor E&P has reached several operational and strategic milestones with the
ongoing infill drilling programme at the PNGF Sud field resulting in production levels
not seen for over a decade. Our redevelopment plans for the Aje field advanced
following the completion of the acquisition of the Panoro interest, and our exploration
portfolio made good progress. With the up-listing to the main Oslo stock exchange,
our restructured board, and a successful refinancing at year-end, PetroNor is well
structured to fulfil its ambitious growth strategy from both its existing portfolio and
new opportunities.
The board of directors' report is presented for
PetroNor E&P ASA (“PetroNor” or “the company”)
and its subsidiaries for the year ended 31 December
2022.
DIRECTORS
The names of directors of the ultimate parent entity
of the group in office during the financial year and
until the date of this report are as follows. Directors
were in office for this entire period unless otherwise
stated.
PetroNor E&P ASA
Role
First appointed
Resigned
E Alhomouz
Non-exec chair
1 October 2021
-
J Iskander
Non-exec director
8 October 2021
-
J Pace
Non-exec director
1 October 2021
9 February 2022
I Smines Tybring-Gjedde
Non-exec director
1 October 2021
-
G Kielland
Non-exec director
1 October 2021
-
J Norman-Hansen
Non-exec director
26 January 2023
-
A Fawzi
Non-exec director
26 January 2023
-
The names of the directors of PetroNor E&P Limited
(Australia), up to completion of the redomicile from
Australia to Norway and the company ceasing to be
the parent company of the group in February 2022,
are as follows:
PetroNor E&P Limited
Role
First appointed
Resigned
E Alhomouz
Non-exec chair
30 August 2019
-
J Iskander
Non-exec director
30 August 2019
-
J Pace
Non-exec director
1 March 2020
-
I Smines Tybring-Gjedde
Non-exec director
29 May 2020
-
G Kielland
Non-exec director
1 February 2021
-
A Neuling
Non-exec director
6 April 2020
-
R Steinepreis
Non-exec director
6 April 2020
-
PETRONOR E&P ASA
ANNUAL REPORT 2022
47
Board of directors’ report
OVERVIEW OF THE BUSINESS
The board of directors’ report for the PetroNor
group (“the group”) comprises PetroNor E&P ASA
(“the parent company“) and all subsidiaries and
associated companies.
PetroNor E&P ASA is a Norwegian publicly listed
liability company with its head office in Oslo,
Norway.
The company is an independent oil and gas
exploration and production company with a
portfolio of assets in countries offshore West
Africa (Republic of Congo, The Gambia, Guinea-
Bissau, Senegal and Nigeria).
As of 31.12.2022, the company holds, through its
Congo subsidiary, 2P oil reserves of 18.5 MMbbls
and an average net production in 2022 of 4,021
bopd. In addition, PetroNor holds a portfolio of
exploration licences in Guinea-Bissau, The Gambia,
and Senegal with net unrisked prospective
resources of approximately 3.3 billion barrels
of oil (from multiple prospects, based upon ERC
Equipoise Competent Persons Report Letter March
2015 and management updates).
The asset portfolio as described in the portfolio
section is supported by staff in Norway, multiple
locations in Africa, the UK, and the UAE. The
management team at PetroNor has in-depth
industry experience from the oil and gas upstream
industry. Together they have built a broad network
of industry contacts, and developed strong
relationships with governments, institutions and
trusted partners fostered over many years of
valued collaboration.
Strategic Platform
PetroNor is a full cycle, Sub-Saharan oriented E&P
company focused on growing production and
reserves by leveraging existing assets to capitalise
on new venture opportunities combined with
targeted high impact exploration.
The management
team at PetroNor
has in-depth
industry
experience from
the oil and gas
upstream industry.
PETRONOR E&P ASA
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48
Board of directors’ report
With strategic and long-term shareholders from
Norway and Abu Dhabi, PetroNor will look to
leverage its industry experience and government
relations in these jurisdictions.
Business Model
PetroNor will aim to steadily build and increase
its reserve base while using free cash flow to
pursue defined exploration targets in selected
and highly prospective basins, with a view to
delivering significant value to its shareholders from
high impact wells whilst being a good corporate
citizen and promoting excellence in operations and
innovation.
The synergies between PetroNor’s business
model and the latest technologies developed in
the offshore of the Norwegian Continental Shelf
allow for the maximum commercial outcome
with the least environmental impact. The transfer
of technology and excellence to the company’s
partners or host countries ensures long term
collaborations and development.
PetroNor looks at creating value through
application of cutting edge and smart technology
but always aims to strike the right balance between
innovations and proven technology. PetroNor E&P
gives special interest to IOR (improved oil recovery)
for improved and efficient operations.
The company’s area of focus is on Sub-Saharan
Africa and, more specifically, proven and producing
assets in the region with development and IOR
potential.
We leverage on our background and experience
from the oil and gas industry in Norway, the
country with the highest oil recovery rate in the
world, in our operations. The PetroNor team has a
proven track record from both IOR in the North Sea,
as well as from direct, day-to-day, on the ground
operations in Africa. The company’s flat structure
and assumed strict focus on execution and delivery
enable it to move rapidly to take advantage of
opportunities.
With many years of experience working in the
international oil and gas business, the management
and technical staff are able to apply and utilise
cutting edge industry innovations and technologies
to PetroNor's projects globally in order to maximise
their potential value. With access to the Norwegian
equity market with sophisticated investors in the
energy sector coupled with a strong cornerstone
investor from Abu Dhabi, the company is well
positioned to access capital both for smaller and
larger transaction opportunities.
IMPORTANT EVENTS
■
Lifting of 800,177 bbls occurred in 2022 at average
realised price of USD 90.99/bbl.
■
PNGF Sud gross production in 2022 was 8.72
MMbbls (2021: 7.53 MMbbls), corresponding to
a net allocated to the company of 1.47 MMbbls
(2021: 1.27), 4,021 bopd on average for the period
(2021: 3,473 bopd).
■
6 wells were drilled in PNGF Sud in 2022 with
additional 4 scheduled for 2023.
■
Listing on the main exchange of Oslo Børs
following the redomicile process from Australia to
Norway; first day of trading on 28 February 2022
■
Extended the board by addition of two new
members in January 2023
■
Acquisition of Panoro Energy ASA’s interest in Oil
Mining Lease no. 113 (“OML 113”) offshore Nigeria
was completed.
■
Award of The Gambia A4 licence (PetroNor 90
per cent equity and operator; Gambian National
Petroleum Company (GNPC) 10 per cent)
■
Successful renegotiation of debt facility for USD 11
million was completed prior to the end of the year.
PRINCIPAL ACTIVITY
The company’s principal activity during the year
was oil and gas exploration and production.
REVIEW OF OPERATIONS
Corporate
Corporate restructuring
On 7 October 2021, PetroNor E&P Limited and
PetroNor E&P ASA entered into an agreement
whereby shares in PetroNor E&P Limited
(previously listed on Euronext Expand) were
swapped for shares in PetroNor E&P ASA as part
of the process to redomicile the company from
Australia to Norway. Subsequently, PetroNor E&P
ASA submitted its application for its shares to be
listed on Oslo Stock Exchange.
On 29 November 2021, an extraordinary general
meeting was held in PetroNor E&P Ltd by order
of the Supreme Court of Western Australia where
the shareholders of the company approved the
proposed Scheme of Arrangement.
PetroNor E&P Ltd received the final approval from
the supreme court of Western Australia on 17
February 2022, followed by delisting of its shares
from Euronext Expand on 24 February 2022 in
conjunction with the listing of PetroNor E&P ASA.
PetroNor E&P ASA began trading on Oslo Stock
Exchange 28 February 2022 following the 1 to
1 share swap. The two Australian directors and
the company secretary were not reappointed
to PetroNor E&P ASA after the redomicile. In
PETRONOR E&P ASA
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49
Board of directors’ report
January 2023, following an extraordinary general
meeting, two additional directors were appointed
to the board so that the board now consists of
six directors, three of which are considered to be
independent.
Økokrim charges
In December 2021, the National Authority for
Investigation and Prosecution of Economic and
Environmental Crime (Nw.: Økokrim) in Norway
brought charges against individuals related
to the company. Økokrim announced that the
investigations were related to the individuals in
question on suspicion of corruption concerning
undisclosed projects in Africa, in addition to
confirming that no charges had been brought
against the group or other companies. The
company takes anti-corruption and the matter at
hand seriously and adopted a series of remediation
steps.
The individuals charged by Okokrim in December
were removed from business operations and Jens
Pace was appointed interim CEO of PetroNor.
The board engaged independent legal counsel
to support its governance and compliance steps,
initiating an independent fact finding process, to
identify any misconduct, to analyse the causes of
the underlying conduct, and setting up a separate
board sub-committee to support the board
with the matter at hand. These measures are
designed to assure the further implementation
of an effective anti-corruption and compliance
programme, founded on its existing code of
conduct, governing documents and related policies.
The board will instigate any other remedial action
deemed relevant to the situation. The measures
taken by the company are led by the board sub-
committee which does not comprise any persons
subject to the charges or any investigations.
Completion of OML 113 acquisition
On 13 July, PetroNor announced the completion of
the purchase of the Panoro Energy ASA (“Panoro”)
wholly owned subsidiaries Pan-Petroleum Nigeria
Holding BV (renamed “Aje Nigeria Holding BV” )
and Pan-Petroleum Services Holdings BV (renamed
“Aje Services Holding BV”) that together hold 100
per cent of the shares in Pan-Petroleum Aje Ltd (
renamed “Aje Production Ltd“). Pan Aje participates
in the exploration for and production of
hydrocarbons in Nigeria and holds a 6.502 per cent
participating interest, with a 16.255 per cent cost
bearing interest, representing an economic interest
of between 12.1913 per cent and 16.255 per cent in
OML 113, containing the Aje oil and gas field. The
upfront consideration to Panoro for the transaction
was USD 10 million which was paid via the allotment
and issue of 96,577,537 new PetroNor shares (“the
consideration shares”). The consideration shares
were issued and subsequently registered with
the Norwegian Register of Business Enterprises
(Brønnøysundregistrene) on 26 July 2022.
Asset overview
Republic of Congo – PNGF Sud
The company has three production licence
agreements (Tchbouela II, Tchendo II, and Tchibeli-
Litanzi II), which cover six oil fields located in
80-100 m water depths approximately 25 km off
the coast of Pointe-Noire. The complex oil field was
discovered in 1979, commenced production in 1987,
and is called PNGF Sud.
Since granting of the licences in January 2017,
Perenco, with partner support has been committed
to strict HSE compliance while growing production,
improving maintenance routines and field integrity
in a stepwise and prudent manner. This led to
an increase in gross production from c. 15,000
bopd gross in January 2017 to an average gross
production in 2022 of 23,891 bopd.
The 17-well drilling campaign targeting PNGF
Sud that commenced in 2021 led to six new wells
in 2022 adding to the production. The drilling
programme will continue in 2023 with work
scheduled to commence in April 2023 to add four
planned new wells.
The PNGF Sud fields are developed with eight
wellhead platforms and currently produce from 67
active production wells, with oil exported via the
onshore Djeno terminal. With its long production
history, substantial well count and extensive
infrastructure, PNGF Sud offers well diversified and
low risk production and reserves with low break-
even cost.
In March 2023, AGR Petroleum prepared a
competent person’s report (“CPR”) whereby the
reserves were calculated as at 31 December 2022.
Using the CPR and adjusting for 2022 production as
at 31 December 2022:
Participation Interest
16.83%
1P reserves (MMbbls)
12.5
2P reserves (MMbbls)
18.5
PetroNor’s contingent resource base includes
discoveries of varying degrees of maturity
towards development decisions. At the end of
the year, PNGF Sud contains a net 2C volume of
approximately 7.1 MMbbls assuming a 16.83 per
cent participation interest.
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Board of directors’ report
Gross production during 2022 was 8.72 MMbbls,
corresponding to 1.47 MMbbls net to the company.
The current indirect participation interest is 16.83
per cent following transactions during 2021.
Republic of Congo – PNGF Bis
PNGF Bis is located next to PNGF Sud and contains
two discoveries from 1985-1991 in the structures
of Loussima SW and Loussima. The company and
its PNGF Sud partners have a right to negotiate the
licence agreement.
The three discovery wells tested from 1,150 to
4,700 bopd of light, good quality oil. Perenco has
made a detailed reinterpretation, 3D modelling
and facilities study for the Loussima SW discovery,
yielding >100 MMbbl of in-place resources and a
possible tie-back to Tchibouela.
AGR Petroleum Services warrants gross 2C
resources of 28.9 MMbbl including verification
of the tieback scenario given above. PetroNor’s
indirect participation interest is 23.56 per cent
following transactions in 2021.
Nigeria – OML-113 / The Aje Field
As announced on 27 January 2022, the Nigeria
Upstream Petroleum Regulatory Commission
(formerly the Nigerian Department of Petroleum
Resources) provided its consent to PetroNor’s
acquisition of Panoro’s ownership interest in Oil
Mining Lease no. 113 (“OML 113”) offshore Nigeria,
containing the Aje oil and gas field. The acquisition
transaction completed in July 2022. PetroNor now
holds a 6.502 per cent participating interest with a
16.255 per cent cost bearing interest, representing
between 12.1916 per cent and 16.255 per cent in
the OML 113 licence area which contains the Aje oil
and gas field.
Aje Production was created as a joint venture
between PetroNor and Yinka Folawiyo Petroleum
Deep Water (“YFP-DW”) will lead the technical and
management efforts in the next phase of the Aje
field development. PetroNor will contribute the
acquired interest in Aje, and YFP-DW will contribute
all interest in Aje to the Aje Production JV.
PetroNor entered into separate agreements with
the OML 113 operator in 2019 to create a holding
company to exploit the substantial gas and liquids
reserves at Aje. The regulatory process for this
agreement was aligned with the transaction
and was approved concurrently with the Panoro
transaction. Petronor and YFP-DW are working
towards completing the formation of the jointly
owned Aje Production. PetroNor’s ownership
will be 52 per cent in Aje Production which will
hold a 15.5 per cent participating interest and an
economic interest in the order of 38.755 per cent in
OML 113 during the majority of the project period.
YFP has undertaken to align its voting rights with
Aje Production’s objectives in the development of
the Aje field.
PetroNor continues work to update the field
development plan (“FDP”) to expedite gas
development and engaged with potential off-
takers and partners. The consent from the Nigeria
Upstream Petroleum Regulatory Commission
has allowed PetroNor to re-engage financial and
industrial partners with a target to mature the
project towards an FID. Development plans for the
Aje gas condensate and additional oil is progressing
jointly with the license partners. The plan is to
proceed toward an FID involving changeout of the
FPSO, drilling further gas and oil development
wells, building a 30 km pipeline to shore to a
receiving LPG plant close to the export compressor
station of the West African Gas Pipeline (WAGP).
Condensate and oil will be produced and offloaded
offshore while offtake agreements will include
gas sales and swap arrangement for gas and LPG
products.
Exploration the MSGBC Basin
The Gambia – A4
Following positive discussions with the Gambian
Government, PetroNor announced that it has
decided to exercise its right to continue with
the Petroleum, Exploration, Development and
Production Licence Agreement (“PEPLA”) for the A4
licence in The Gambia.
PetroNor and Gambia National Petroleum
Corporation (“GNPC”) have also signed a Joint
Operating Agreement (“JOA”) for the A4 Licence
offshore Gambia. GNPC, as Government licensee,
has been assigned a 10 per cent participating
interest in the license.
The first exploration period is for three years, the
first 18 months of which are for additional prospect
technical maturation work. The well commitment
is made upon entry to the second 18-month
period. This highly prospective block lies 30 km
South of the Senegal “Sangomar” field which will
start production in 2023 at 100,000 bopd. The
block contains multiple low risk commercial size
prospects.
PetroNor E&P Gambia Ltd will be able to carry
approved prior sunk costs associated with A4 into
the new agreement.
The PEPLA is a royalty plus tax system valid for 30
years with an option of a 10-year extension. Post
PETRONOR E&P ASA
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Board of directors’ report
discovery, the licence moves into an exploration/
appraisal phase where the commercial potential
of the discovery is ascertained and a development
decision taken, followed by a development and
subsequent production phase.
The A4 licence is located offshore within the
Mauritania-Senegal-Gambia-Bissau-Conakry Basin.
Hydrocarbons are proven throughout the basin,
the most local and notable is the 460 MMbbls
Sangomar field, 30 km to the North in Senegal
due to produce first oil in late 2023, operated by
Woodside Petroleum.
PetroNor continues to seek partners to drill one
exploration well in this highly attractive acreage
and aims to participate in any future well at an
equity level of 30-50 per cent.
Guinea-Bissau – Sinapa 2 and Esperança 4A & 5A
PetroNor is continuing to advance plans to drill
the Atum prospect within the Sinapa 2 licence.
Following the publication, post period, in the
Official Gazette of Guinea-Bissau (Boletim Oficial
45), the FAR Ltd 21.43 per cent equity interest has
officially been transferred to PetroNor E&P AB. FAR
had formally applied to withdraw from the licences
following an announcement on the 15 March 2022.
Petronor now holds 100 per cent equity.
Drilling preparation was restarted with EXCEED in
the third quarter of 2022. Long lead items required
for drilling operations have been secured and
pre-drill studies and detailed well planning and
preparation are under way.
The Atum-1x well will test a highly attractive and
material prospect on the Sinapa 2 licence. Recently
reprocessed seismic data has been interpreted as
part of the ongoing evaluation of both licences and
as preparation to drilling.
Senegal – ROP & SOSP
In July 2018, the company’s subsidiary African
Petroleum Senegal Limited registered arbitration
proceedings with the International Centre for
Settlement of Investment Disputes (ICSID) (case
ARB/18/24) to protect its interests in the Senegal
Offshore Sud Profond and Rufisque Offshore
Profond blocks. We await the outcome of the ICSID
Tribunal which held a hearing on jurisdiction and
the merits in Paris during March 2022.
FINANCIAL REVIEW
The board of directors (“the board”) confirms
that the annual financial statements have
been prepared pursuant to the going concern
assumption, and that this assumption was realistic
at the balance sheet date. The going concern
assumption is based upon the financial position
of the group and the development plans currently
in place. The group recognises that in order to
fund on-going operations and pursue organic
and inorganic growth opportunities it will require
additional funding. This funding may be sourced
through joint venture equity or share issues or
through debt finance.
The going concern basis assumes the continuity
of normal business activity and the realisation of
assets and the settlement of liabilities in the normal
course of business. The underlying business of
the group created a net profit after tax of USD
34.3 million for the year ended 31 December 2022,
with strong production from the Congo assets
generating 5,206 bopd in first quarter of 2023. As
at 31 December, 2022 the group had a cash balance
of USD 24.8 million (2021 USD 31.8 million). The
company has listed on the main exchange of Oslo
Børs, successfully refinanced its debt, achieved
high production levels following a successful
in-fill drilling campaign and continues to seek
for potential partners to join the company on its
exploration portfolio. This demonstrates that the
business has continued to operate effectively, and
businesses are willing to engage with the company
and this has enabled the directors of PetroNor (“the
directors”) to form the opinion that the company
will be in a position to continue to meet its liabilities
and obligations for a period of at least twelve
months from the date of signing this report.
This financial report does not include any
adjustments relating to the recoverability and
classification of recorded asset amounts or to the
amounts and classification of liabilities that might
be necessary should the group not continue as a
going concern.
The following financial review is based on the
financial statements of PetroNor E&P ASA and its
subsidiaries. The statements have been prepared in
accordance with International Financial Reporting
Standards (IFRS) as adopted by the EU as well as
Norwegian accounting legislation.
In the view of the board, the statement of
comprehensive income, statement of changes
in equity, statement of financial position and
cashflow provide satisfactory information about
the operations, financial results and position of the
group and the parent company at 31 December
2022.
The consolidated financial statements are
presented in US dollars.
PETRONOR E&P ASA
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52
Board of directors’ report
Consolidated statement of comprehensive income
Key consolidated income statement figures
For the year ended 31 December
Amounts in USD million
2022
2021
Revenue from sales of petroleum products
72.8
57.6
Assignment of tax oil
47.6
33.1
Assignment of royalties
25.7
15.8
Revenue
146.1
106.5
EBITDA
96.4
61.9
Net profit/(loss)
34.3
21.1
Quantity of oil lifted (barrels)
800,177
831,089
Average selling price (USD per barrel)
90.99
69.31
Quantity of net oil produced after royalty, cost oil and tax oil (barrels)
900,495
821,536
The directors are pleased to report that favourable
market conditions and the on-going corporate
focus on cost control have resulted in EBITDA of
USD 96.4 million for the year.
The group generated a net profit for the year of
USD 34.3 million (2021: USD 21.1 million). These
figures are due to an improving global market price
for oil and to a steady production from PNGF Sud
throughout the year as a result of the workover
program. In fact, since the group first entered the
licences in 2017, it has seen a 59 per cent increase in
the gross field production.
PetroNor is
continuing to
advance plans
to drill the Atum
prospect within
the Sinapa 2
licence.
PETRONOR E&P ASA
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Board of directors’ report
During 2022, there were only 2 liftings of oil, with a
3.7 per cent decrease on the 831,089 barrels lifted
in 2021. Increased oil prices during 2022 resulted
in the group achieving higher revenues over lower
volumes. The group achieved an average selling
price of USD 90.99/bbl for the year, compared to
the USD 69.31/bbl in 2021. As a consequence, the
group reports USD 146.1 million in revenue, a 37.2
per cent increase on 2021 USD 106.5 million.
Exploration expenses for The Gambia licence for
the year were USD 0.5 million with licence costs
for Guinea-Bissau being USD 0.3 million. Under
PetroNor’s accounting policy, seismic data costs
and time writing are expensed and not capitalised
to intangible assets.
The administrative expense in 2022 of USD 14.4
million were higher than in 2021 (USD 13.1 million)
and included business development costs of
USD 0.5 million (USD 0.5 million 2021). The group
also incurred non-recurring third-party costs
of approximately USD 0.4 million relating to the
redomicile project, in addition to excess personnel
costs and legal fees relating to the Økokrim matter.
The company believes that the redomicile was a first
step to further streamlining the group’s corporate
structure and further reduce corporate overheads in
the longer term. Listing on the Oslo Stock Exchange
will enhance the group's profile with investors,
business partners, suppliers and customers, giving
the group better access to capital markets. The move
gives shareholders access to a more liquid market
for shares and will facilitate a more diversified
shareholder base and additional investors.
Financial position, financing and equity
The group continues to build the strength of
the balance sheet with condensed statement of
financial position below.
Condensed consolidated balance sheet
At 31 December
Amounts in USD million
2022
2021
Current assets
44.8
51.8
Non-current assets
139.6
73.4
Total assets
184.5
125.2
Current liabilities
26.4
43.1
Non-current liabilities
48.2
16.3
Total liabilities
74.6
59.4
Net assets
109.9
65.8
Capital and reserves attributable to owners of the parent
97.6
59.3
Non-controlling interests
12.3
6.5
Total equity
109.9
65.8
The OML 113 assets acquired have been fully
consolidated onto the balance sheet, which has
resulted in an addition to intangible assets of USD
34.3 million. The infill drilling programme on the
PNFG Sud asset has added USD 35.7 million to
property plant and equipment (“PPE”) and along with
the acquisition of the OML 113 PPE of USD 0.9 million
added USD 36.5 million to tangible assets. With the
award of the A4 licence in The Gambia during the
year, licence costs of USD 1.0 million were added
to intangible assets in accordance with PetroNor’s
capitalisation policy. The past costs of the former
A4 licence are allowed to be carried over to the new
licence, the past cost pool is far in excess of the
carrying value of the asset as at 31 December 2022.
Historic expenditure on the Guinea-Bissau
licences had been impaired prior to acquisition by
PetroNor; in accordance with PetroNor accounting
policies only those costs relating directly to the
licences have been capitalised to intangible assets.
Drilling inventories were written back up to cost
in the period reflecting conditions in the drilling
market. The prior impairment to inventory values
was unwound increasing the value of inventories
in Guinea-Bissau by USD 2.5 million. Material
inventories for the PNGF Sud assets have also
increased by USD 1.7 million as a result of the
ongoing infill drilling campaign. There was minimal
stock at the end of 2021 as a lifting had occurred
just before year end on 31 December 2021,
consequently crude oil inventories have increased
by USD 6.9 million in 2022.
The group has advanced USD 29.4 million (2021:
USD 26.8 million) in cash to the operator towards
the asset retirement obligation (“ARO”) of PNGF
Sud, this is considered a non-current “Other
receivable”.
The level of trade receivables has reduced as
compared to the 2021 closing position. This was
PETRONOR E&P ASA
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54
Board of directors’ report
due to the lifting on the PNFG Sud assets at year
end, trade receivables being USD 1.1 million at year
end 2022 versus USD 13.8 million in 2021.
The addition of joint venture payables for the OML
113 asset, USD 2.7 million is offset by the early
payment of joint interest billings for the PNGF asset
so that trade payables of USD 20.8 million are USD
9.2 million lower than the 2021 closing position of
USD 30.0 million. In addition, the level of liabilities
to related parties has been substantially reduced in
2022 with the payment of USD 1.3 million prior to
year-end.
The level of provisions has increased due to the
addition of an asset retirement obligation for
OML 113 of USD 3.8 million . In addition, funds set
aside for CSR projects in the PNFG Sud assets have
been reclassified as provisions USD 3.6 million.
Provisions, net of the unwinding of discount, were
USD 24.6 million versus USD 16.3 million in 2021.
Funding
At the year end, PetroNor closed on a debt
refinancing facility of USD 11 million, repayable
over 24 months. The funding was put in place at an
interest rate of 11 per cent and on similar terms to
the previous facility. Loan proceeds were received
net of a facility arrangement fee of 1.5 per cent. The
previous facility had been completed and expunged
in Q4 2022 in addition a separate USD 3.9 million
“Symero” loan was also repaid. PetroNor therefore
exit the year with a restructured balance sheet.
Cash Flow
Cash generated from operations were USD 81.9
million, however the inflows were seen in the last
part of the year due to the timing of the liftings.
The investment in PNGF Sud assets consumed USD
35.7 million in cash in the period but the benefits
in increased production were already being yielded
in record production levels by the end of the year.
Repayment of loans and borrowings were USD
13.1 million in the period with the addition of a
new financing facility at the year-end of USD 11.0
million giving a net reduction in loan debt of USD
2.1 million.
The group exits the accounting period with a cash
balance of USD 24.8 million.
Parent company results
At the presentation date of the financial
statements, the parent entity of the group was
PetroNor E&P ASA, a company domiciled in
Norway.
The company reported a loss for the period of USD
5.8 million. The company’s financial activities were
purely corporate and include professional fees and
fees for the services of the board directors.
Dividends paid or recommended
During the year, no dividend was paid or
recommended at group level.
RISK FACTORS
Operational risk factors
The group participates in oil and gas projects in
countries in West Africa with emerging economies,
such as Congo Brazzaville, Nigeria, The Gambia,
Senegal, and Guinea-Bissau.
Oil and gas exploration, development and
production activities in such emerging markets
are subject to significant political and economic
uncertainties that may include, but are not limited
to, the risk of war, terrorism, expropriation,
nationalisation, renegotiation or nullification of
existing or future licences and contracts, changes in
crude oil or natural gas pricing policies, changes in
taxation and fiscal policies, imposition of currency
controls and imposition of international sanctions.
Travel bans, asset freezes or other sanctions may
be imposed and have historically been imposed on
countries in which the group operates.
The jurisdictions in which the group operates may
also have less developed legal systems than more
established economies which could result in risks
such as:
i.
effective legal redress in the courts of such
jurisdictions, whether in respect of a breach of
law or regulation, or in an ownership dispute,
being more difficult to obtain;
ii.
a higher degree of discretion on the part of
governmental authorities;
iii.
the lack of judicial or administrative guidance on
interpreting applicable rules and regulations;
iv. inconsistencies or conflicts between and within
various laws, regulations, decrees, orders, and
resolutions; or
v. relative inexperience of the judiciary and courts
in such matters.
In certain jurisdictions, the commitment of
local business people, government officials and
agencies, and the judicial system to abide by legal
requirements and negotiated agreements may be
more uncertain, creating particular concerns with
respect to the company’s licences and agreements
for business. These may be susceptible to revision
PETRONOR E&P ASA
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55
Board of directors’ report
or cancellation and legal redress may be uncertain
or delayed. There can be no assurance that joint
ventures, licences, licence applications or other
legal arrangements will not be adversely affected
by the actions of government authorities or others
and the effectiveness of and enforcement of such
arrangements in these jurisdictions cannot be
assured. The jurisdictions in which the group has
operations have a low score on the Transparency
International's Corruption Perception Index, which
implies that these countries are perceived as
jurisdictions where there is a higher risk of corruption.
The group's current assets are located in Congo, the
Gambia, Senegal, Nigeria and Guinea-Bissau.
The group may also target acquisitions in other
countries in Africa. The production sharing or other
licencing contracts in such jurisdictions may provide
for payments to the governments and/or national
oil companies (farm-in fees, signature bonuses,
taxes, training budgets, equipment budgets,
carry of certain expenditures etc.). Furthermore,
the group has a number of consultants working
for it in the area. Although the group believes all
its consultancy agreements are entered into on
clear and transparent terms, there is a risk that
agents or other persons acting on behalf of the
group may engage in corrupt activities without the
knowledge of the group. Under applicable laws
relating to the group's assets, local participation
is or may be required in the oil and gas sector,
but it may prove difficult to always receive final
confirmation as to who the ultimate owners and
affiliations of such local partners are. Through the
group's investigation, it has not been possible to
substantiate ultimate ownership and affiliations
of all, current local partners in Congo and there
can be no assurance that there are no government
affiliations within the ultimate shareholders of
the local partners in Congo. Corrupt practices of
third parties or anyone working for the group or
any of its affiliated parties, or allegations of such
practices, may have a material adverse effect on the
reputation, performance, financial condition, cash
flow, prospects and/or results of the group.
While the Økokrim personal investigation into
individuals associated with the company continues
without resolution, business partners may be
required to perform enhanced KYC procedures on
PetroNor before they can engage with the group.
This may cause delays to new operations or even
Under applicable
laws relating to
the group's assets,
local participation
is or may be
required in the oil
and gas sector.
PETRONOR E&P ASA
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Board of directors’ report
stop possible relationships depending on the risk
profiles of individual businesses.
Business risk factors
The group's business, results of operations, value
of assets, reserves, cash flows, financial condition
and access to capital depend significantly upon,
and may be adversely affected by, the level of oil
and gas prices, which are highly volatile.
The group's revenues, cash flow, reserve estimates,
profitability and rate of growth depend substantially
on prevailing international and local prices of oil and
gas. Prices for oil and gas may fluctuate substantially
based on factors beyond the group's control.
Consequently, it is impossible to accurately predict
future oil and gas price movements. Oil and gas
prices are volatile and have witnessed significant
changes in recent years, for many reasons, including,
but not limited to, changes in global and regional
supply and demand, geopolitical uncertainty,
availability of equipment and new technologies,
weather conditions and natural disasters, terrorism
as well as global and regional economic conditions.
Sustained lower oil and gas prices or price declines
may inter alia lead to a material decrease in the
group's net production revenues.
Currently, all of the group’s production comes from
fields in the PNGF Sud asset in Congo Brazzaville.
The group’s operations and cash flow will be
restricted to a very limited number of fields.
If mechanical or technical problems, storms,
shutdowns or other events or problems affect
the current or future production of the current
producing assets of the group, or new fields coming
into production, it may have direct and significant
impact on a substantial portion of the group’s
production and hence the group’s revenue, profits
and financial position as a whole.
Rising climate change concerns have led and
could lead to additional legal and/or regulatory
measures which could result in project delays or
cancellations, a decrease in demand for fossil fuels
and additional compliance obligations, each of
which could materially and adversely impact the
group's costs and/or revenues.
In general, the group's operations are subject to
risks which are typical for the offshore oil and gas
industry, all of which may have a material adverse
effect on the group's operations, cash flow and
financial position, relating (but not limited) to the
following:
■
extension of existing licences and permits,
including whether any extensions will be subject
to onerous conditions;
■
delays, cost inflation, potential penalties,
and regulatory requirements with respect to
exploration, development projects and
■
production of hydrocarbons, which may lead
to hydrocarbon production being restricted,
delayed or terminated due to a number of
internal or external factors;
■
decommissioning obligations and activities
which will incur costs that may be in excess of
expectations and budgets;
■
third-party operators and partners and conflicts
within a licence group, such as the publicly know
disputes within the Aje group;
■
capacity constraints and cost inflation in the
service sector and lack of availability of required
services and equipment;
■
legal disputes and legal proceedings the group
may be involved in in order to defend or enforce
any of its rights or obligations under its licences,
agreements or otherwise, which may be costly
and time consuming;
■
legal charges against individuals who are related
to the company, i.e. the ongoing prosecution
against persons who are major shareholders of-
and related to the company, which may lead to
reputational damage and complications related
to the group's dealing with third parties and the
authorities and its raising of debt and equity
financing;
■
restricted or limited access to necessary
infrastructure or capacity booking for the
transportation of oil and gas;
■
restrictions with respect to offtake of oil and
gas, including currency exchange regulations
delaying or preventing timely settlement, off-
taker credit risks as well as hostilities or acts of
terrorism or war preventing offtake or impeding
offtake and further production of crude;
■
restrictions in the ability to sell or transfer
licence interests due to regulatory consent
requirements, provisions in its joint operating
agreements, including pre-emption rights, if any,
or applicable legislation;
■
extremely complex and stringent regulations
concerning health, safety, and environment
issues; and
■
capsizing, environmental pollution to sea and air
and other maritime disasters.
Financial risk factors
The overall risk management program seeks
to minimise the potential adverse effects of
unpredictable fluctuations in financial markets on
financial performance, i.e., risks associated with
currency exposures and debt servicing. Financial
instruments such as derivatives, forward contracts
and currency swaps are continuously being
evaluated for the hedging of such risk exposures.
PETRONOR E&P ASA
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57
Board of directors’ report
Due to the international nature of its operations,
the group is exposed to risk arising from currency
exposure, primarily with respect to the Norwegian
Kroner (NOK), and the Great British Pound (GBP).
The group's activities are and will continue to
be capital intensive. The group expects future
investments into existing and new hydrocarbon
assets to be served by cash flow from ongoing
operations. However, it is also expected that
the group will look to raise debt to part-fund
future growth. Such debt may not be timely
available, or only be available at terms which are
unattractive or makes investments less profitable
than first expected. Restrictions in raising, or the
unavailability of debt may prevent the group from
grosing as planned and may make the group to
forego or lose attractive opportunities which in
turn could have a negative impact on the group’s
financial position and future prospects.
SHARE CAPITAL
PetroNor E&P ASA is listed on the Oslo Stock
Exchange where it trades under the ticker symbol
PNOR. At 31 December 2022, the company’s
share capital consisted of 1,423,568,543 ordinary
shares. At an extraordinary general meeting on
23 February 2022, PetroNor E&P ASA issued new
shares in a ratio of 1:1 to the existing shareholders
of PetroNor E&P Limited.
The company has one class of shares in issue,
and in accordance with the Norwegian Public
Limited Companies Act, all shares in that class
provide equal rights in the company. Each of the
shares carries one vote. The shares are freely
transferrable. The Articles of Association do not
provide for any restrictions on the transfer of
shares, or a right of first refusal for the shares.
Share transfers are not subject to approval by
the board of directors. The shares are registered
in book-entry form with the Norwegian Central
Securities Depository (VPS) and have ISIN
NO0011157232.
At 31 March 2023, the company had 8,352
shareholders and 1,423,568,543 shares. The table
below shows the 20 largest shareholders in the
company:
#
Shareholder
Number of shares
Per cent
1
Petromal LLC
1
481,481,666
33.82%
2
Symero Limited
2
138,763,636
9.75%
3
NOR Energy AS
3
135,070,623
9.49%
4
Ambolt Invest AS
4
87,583,283
6.15%
5
Gulshagen III AS
5
45,000,000
3.16%
6
Gulshagen IV AS
5
45,000,000
3.16%
7
Energie AS
24,313,630
1.71%
8
Nordnet Livsforsikring AS
21,722,952
1.53%
9
Nordnet Bank AB
20,356,061
1.43%
10
Enga Invest AS
10,722,775
0.75%
11
Omar Al-Qattan
7,645,454
0.54%
12
Leena Al-Qattan
7,645,454
0.54%
13
Pust For Livet AS
7,497,609
0.53%
14
Danske Bank A/S
7,001,749
0.49%
15
UBS Switzerland AG
6,920,643
0.49%
16
Avanza Bank AB
4,175,551
0.29%
17
Helge Holdhus
4,014,000
0.28%
18
Sandberg JH AS
4,000,000
0.28%
19
Spit Air AS
4,000,000
0.28%
20
Kjell Rygg
3,399,200
0.24%
Subtotal
1,066,314,286
74.90%
Others
357,254,257
25.10%
Total
1,423,568,543
100.00%
1)
Non-Executive Chairman, Mr. Alhomouz is the CEO of Petromal LLC. 109,520,419 of the shares held by Petromal LLC are recorded in
the name of nominee company, Clearstream Banking S.A. on behalf of Petromal LLC.
2) Symero Ltd is the 100 per cent owned subsidiary of NOR Energy AS
3) NOR Energy AS is a company controlled jointly by former CEO, Mr. Søvold, and former subsidiary company director, Mr. Ludvigsen
through indirect beneficial interests.
4) Ambolt Invest AS is a company controlled by board member Mr.Norman-Hansen.
5) Gulshagan III AS and Gulshagan IV AS are companies controlled by Mr. Søvold through an indirect beneficial interest.
PETRONOR E&P ASA
ANNUAL REPORT 2022
58
Board of directors’ report
Options
Unissued shares under option
At the date of the publishing of this report there
were no share options in the company.
213,400 options with an exercise price of NOK 2.50
each in PetroNor E&P Limited (Australia) expired on
11 January 2022 before the redomicile to Norway.
Further 1,176,070 options with an exercise price of
NOK 7.75 each expired on 31 May 2022.
No ordinary shares were issued on the exercise of
options in 2022 (2021: nil).
Interests in Shares & Options
At the date of this report:
■
Interim CEO Mr Pace holds 1,465,524 shares.
■
Board Chair Mr Alhomouz has no personal
interests in shares, but has influence over
481,481,666 shares as the CEO of significant
shareholder Petromal LLC.
■
Board member, Jarle Norman-Hansen holds
directly and through an indirect beneficial
interest 89,733,877 shares.
No other current directors hold shares or options.
Meetings of directors
The board of PetroNor E&P ASA held a total of 11
board meetings and 2 extraordinary meetings
in 2022. The number of directors' meetings of
PetroNor E&P Limited (Australia) held during the
period where each director held office during the
financial year was five.
Indemnifying directors and officers
The group has taken out an insurance policy to
indemnify the directors and officers of the group
against liability when acting for the group.
ESG
PetroNor is required to report on its corporate
responsibility and selected related issues under
§3-3a and §3-3c of the Norwegian Accounting Act.
The detailed reporting on all relevant topics can be
found in the separate ESG report, which is included
in this Annual Report on page 25.
Outside the
PetroNor head
office in Oslo
following listing
on the Oslo Bors.
PETRONOR E&P ASA
ANNUAL REPORT 2022
59
Board of directors’ report
CORPORATE GOVERNANCE
Good corporate governance provides the
foundation for long-term value creation, to
the benefit of shareholders, employees and
other stakeholders. The Board of PetroNor has
established a set of governance principles in
order to ensure a clear division of roles between
the Board, the executive management and
the shareholders. The principles are based on
the Norwegian Code of Practice for Corporate
Governance.
PetroNor EP& ASA is subject to annual corporate
governance reporting requirements under
section 3-3b of the Norwegian Accounting Act and
the Norwegian Code of Practice for Corporate
Governance, cf. section 7 on the continuing
obligations of stock exchange listed companies.
The Accounting Act may be found (in Norwegian) at
www.lovdata.no
. The Norwegian Code of Practice
for Corporate Governance, which was last revised
on 14 October 2021, may be found at
www.nues.no
.
PetroNor revised its Code of Conduct due to the
change in legal legislation as a consequence of
installing a Norwegian entity as the new Parent
company of the group. The full policy is available on
the company’s website. The annual statement on
corporate governance for 2022 has been approved
by the board and can be found on page 34 in this
Annual Report.
RESEARCH AND DEVELOPMENT
The group made no investments in research and
development in 2022 or 2021.
PAYMENTS TO GOVERNMENTS
This country-by-country report has been developed
to comply with the legal requirements in the
Norwegian Security Trading Act ("Verdipapir-
handelloven") § 5-5a. The detailed regulation can
be found in the regulation "Forskrift om land-for-
land rapportering".
In 2022, the company was engaged in extracting
activities encompassed by the legislation above in
the following countries: Republic of Congo, Nigeria,
The Gambia, Guinea-Bissau and Senegal. This
report discloses relevant payments to governments
for extractive activities in the countries above,
in addition to some contextual information as
required by the regulation in the "Forskrift om land-
for-land rapportering".
Basis for preparation
The report includes direct payments to
governments from subsidiaries, joint operations,
and joint ventures. In some cases, however, certain
payments to governments may be made by an
operator on behalf of a partnership. This is often
the case for area fees. In such cases, the company
will report their paying interest share of the
payment made by the operator.
Definitions
Government
– In the context of this report, a
government means any national, regional, or local
authority of a country. It includes a department,
agency or undertaking controlled by that authority.
Project
– For this reporting, a project is defined as
an investment in a concession agreement.
Licence fees
– Typically levied on the right to use
a geographical area for exploration, development,
and production, and include rental fees, area
fees, entry fees, severance tax, concession fees
and other considerations for licences and/or
concessions. Administrative government fees that
are not specifically related to the extractive sector,
or to access extractive resources, are excluded.
Materiality
– As per the “Forskrift om land-for-land
rapportering”, payments made as a single payment,
or as a series of connected payments that equal or
exceed Norwegian Kroner (NOK) 800,000 during
the year are disclosed.
Reporting currency
– Payments to governments
are converted from the functional currency of each
legal entity into the presentation currency, United
States Dollars (USD). The payments for entities
whose functional currencies are other than USD are
converted into USD at the foreign exchange rate at
the average annual rate.
Payments to governments and contextual
information
The consolidated overview below discloses the sum
of the company's payments to governments in each
individual country where extractive activities are
performed, per country/project.
PETRONOR E&P ASA
ANNUAL REPORT 2022
60
Board of directors’ report
Payments per project
In USD thousand
Royalties
Oil tax
Other amounts
Total
PNGF Sud
25,650
46,803
1,987
74,440
Total Congo
25,650
46,803
1,987
74,440
A4
Nil
Nil
1,000
1,000
Total The Gambia
Nil
Nil
1,000
1,000
Sinapa
Nil
Nil
111
111
Esperanca
Nil
Nil
111
111
Total Guinea-Bissau
Nil
Nil
222
222
OML 113*
Nil
Nil
1,000
1,000
Total Nigeria
Nil
Nil
1,000
1,000
* From the point of acquisition in July 2022.
Other amounts includes payroll, payments under
licence obligations, and other local taxes. Due to
the arbitration status of the ROP and SOSP licences
in Senegal, no payments were made in relation to
these projects during 2022.
Legal entities by country
As per the "Forskrift om land-for-land rapportering"
it is required that the company report on certain
contextual information at a corporate level. This
includes information on localisation of subsidiary,
employees per subsidiary, and interests paid or
payable to other legal entities within the group.
Active legal corporate structure of the group during 2022 is set out below:
In USD thousand
Main country of
operations
EEs
1
Interest paid or payable
to a group entity
Norway
PetroNor E&P ASA
Norway
-
-
PetroNor E&P Services AS
Norway
3
-
Hemla Africa Holding AS
Norway
-
-
Aje Production AS
Norway
-
-
Australia
PetroNor E&P Pty Ltd
Australia
-
-
Cyprus
PetroNor E&P Ltd
Cyprus
1
360
Republic of Congo
Hemla E&P Congo SA
Republic of Congo
3
304
United Kingdom
PetroNor E&P Services Ltd
United Kingdom
4
-
Nigeria
PetroNor E&P Ltd
Nigeria
4
-
Aje Production Ltd
Nigeria
-
-
Netherlands
Aje Services Holding BV
The Netherlands
-
-
Aje Nigeria Holdings BV
The Netherlands
-
-
Cayman Islands
Petroleum E&P Gambia Ltd
The Gambia
3
-
African Petroleum Senegal Ltd
Senegal
-
-
Senegal
African Petroleum Senegal SAU
Senegal
2
-
Sweden
PetroNor E&P AB
Guinea-Bissau
-
-
1) Average number of employees’ during the year excluding directors.
PETRONOR E&P ASA
ANNUAL REPORT 2022
61
Board of directors’ report
SIGNIFICANT CHANGES IN THE
STATE OF AFFAIRS
Just before the year-end in 2021, the company
refreshed its code of Conduct and associated
policies in anticipation of becoming subject to the
laws and regulations of Norway with the redomicile
project and intention to move the listing to the
main Oslo Stock Exchange. The redomicile was
completed in February 2022 resulting in PetroNor
E&P ASA becoming the parent entity of the Group
and listing on the Oslo Børs.
SIGNIFICANT EVENTS AFTER THE
BALANCE DATE
On 26 January 2023, two new directors were
appointed to the board. The appointments
were pursuant to recommendations from the
nomination committee. The two new directors,
Mrs. Azza Fawzi and Mr. Jarle Norman-Hansen, take
the company’s board to a total of six directors.
In the Official Gazette of Guinea-Bissau (Boletim
Oficial 45), it was announced that following the
withdrawal of FAR Limited from the Sinapa and
Esperança licences offshore Guinea-Bissau, their
equity interest had been awarded to PetroNor.
At the start of February, 317,904 bbls of oil were
lifted from the Djeno Terminal. This sale generated
a cash inflow of USD 24.1 million. At the end of
March, a further 260,362 bbls of oil were lifted
generating USD 21.2 million of cash inflow.
In a CPR update prepared by AGR Petroleum
Services AS on the company’s PNGF Sud asset
in Congo, the 2P reserves were updated to 18.5
MMbbls
with 2C reserves updated to 23.5 MMbbls
on a gross basis.
Except for the above, the company has not
identified any events with significant accounting
impacts that have occurred between the end of the
reporting period and the date of the publishing of
this report.
LIKELY DEVELOPMENTS AND EXPECTED
RESULTS
As the infill drilling program for Litanzi and Tchendo
continues with the drilling rig returning in the
second quarter, the company looks forward to
seeing the continued impact of this significant three
year CAPEX investment program on the production
levels of the PNGF Sud licence as these new wells
come into operation.
The company will continue to seek partners for its
high equity exploration portfolio to share in the
value creation through the drill bit.
After the 2022 hearings in Paris for the arbitration
matter associated with the Senegalese licences, a
decision is expected from the Tribunal.
The board wishes to thank the staff, consultants,
services providers and shareholders for their
continued commitment to the company.
DECLARATION BY THE BOARD OF
DIRECTORS AND CEO
We hereby confirm that, to the best of our
knowledge, the consolidated annual financial
statements for 1 January to 31 December 2022
have been prepared in accordance with applicable
accounting standards and that the information in
the financial statements give a true and fair view of
the assets, liabilities, financial position and profit or
loss of the company. We confirm that the financial
statements give an accurate and fair view of the
development, profit, and position of the company,
as well as a description of the principal risks and
uncertainties it is facing.
Oslo, Norway, 28 April 2023
The board of directors and CEO – PetroNor ASA
Eyas Alhomouz
Gro Kielland
Joseph Iskander
Ingvil Smines Tybring-Gjedde
Chair
Director
Director
Director
Azza Fawzi
Jarle Norman-Hansen
Jens Pace
Director
Director
Interim CEO
PETRONOR E&P ASA
ANNUAL REPORT 2022
62
Board of directors’ report
PETRONOR E&P ASA
ANNUAL REPORT 2022
63
Board of directors’ report
Statement of remuneration
Pursuant to the Norwegian Public Limited Liability Companies Act (the "Companies
Act") Section 6-16a and related regulations, the board will present the following
statement regarding remuneration to the 2022 annual general meeting.
Purpose and general principles for operation
of the remuneration committee
The committee must at least annually review
and re-assess its terms of reference and
the instructions relating to the review and
determination of remuneration of the executives
and senior management team. Any recommended
changes must be proposed to the board, which
must have sole authority to amend the terms of
reference of the remuneration committee.
The committee must be appointed by the board to:
■
Evaluate and propose the compensation of the
company’s chief executive officer (“CEO”) and
other members of the executive management
team; and
■
Produce an annual report on the compensation
of the executive management team, which must
be included in the company’s annual accounts
pursuant to applicable rules and regulations,
including accounting standards, promulgated
from time to time.
The committee may hold meetings at such time and
location as the committee may determine, but in
no event must the committee meet less frequently
than annually. When it deems it appropriate, the
committee may meet immediately before or after
any meeting of the board, but should otherwise
meet separately from the board.
At any meeting of the committee, a majority of
its members must constitute a quorum. When a
quorum is present at any meeting, a majority of
committee members present may take any action.
The committee may establish rules and procedures
for the conduct of its meetings that are consistent
with its charter.
The members and the chair of the committee
must be appointed and replaced by the board. The
committee must be composed of three members.
The majority of the members of the committee
should be independent of the company's
management.
The chair of the committee must be elected by the
committee among those of its members who are
independent of the company’s management.
The chair of the committee must report annually
to the board in an executive session on the
committee’s activities. Such annual reports must
include a review of the committee’s performance.
The committee must annually review its own
performance.
Duties and responsibilities of the
remuneration committee
The committee’s duties and responsibilities must
be to:
■
review and approve corporate goals and
objectives relevant to the compensation of the
CEO,
■
evaluate the performance of the CEO in light
of those goals and objectives and set the
compensation level for the CEO based on this
evaluation.
In determining the long-term incentive component
of the CEO compensation, if any, the committee
may consider the company’s performance and
relative shareholder return, the value of similar
incentive awards given to CEO’s at comparable
companies and the awards given to the CEO in past
years;
■
make recommendations to the board with
respect to incentive-compensation plans and
equity-based plans;
■
conduct an annual review of director
compensation and recommend to the board
for its approval the form and amount of such
compensation;
■
assist the board in developing and evaluating
potential candidates for executive positions,
including the CEO, and oversee the development
of executive succession plans;
■
review and approve the executive management
team’s employment agreements, severance
arrangements and change in control agreements
PETRONOR E&P ASA
ANNUAL REPORT 2022
64
and provisions when, and if, appropriate, as well
as any special supplemental benefits; and
■
review major organisational and staffing
matters.
The committee has the authority to retain and
terminate compensation consultants or firms
to assist in the evaluation of the compensation
of the executive management team and the
board, including the authority to approve such
consultants’ or firms’ fees and other retention
terms, which must be borne by the company.
Principles of the company’s management pay
policy
As an international player in its industry, the
company is determined to compete in a market that
is at the top management level internationally when
determining salaries for managers in the company.
It is the board's policy that in order to ensure the
best possible leadership, salaries must be offered
at satisfactory levels for the individual, and that
are competitive in an international market. Due to
the company's international business, the level of
executive pay may, as a starting point, be relatively
high in a national context.
Principles for fixed salary
It is the company's policy that executive salaries
should mainly be expressed in a fixed monthly
salary that reflects the person's position and
experience.
Principles for pension benefits
Pension schemes shall in principle be the same for
managers as stipulated in general for employees in
the company. The board may, however, determine
additional pensions and/or insurance schemes for
certain executives.
Principles for severance schemes
Severance pay schemes established upon
resignation will normally be seen in connection
with confidentiality clauses and anti-competitive
clauses in the individual employment contract, so
that they only compensate for such restrictions
in the person's right to take up new work. As a
starting point, severance pay schemes shall have
deductions for income elsewhere.
Principles for share-based incentives and
other remuneration
Currently, the company does not have any share
based incentive schemes, nor any bonus schemes.
The board will consider to introduction of such
schemes in the future.
Any deviations from these principles will be
reported in the remuneration report for the
relevant year.
Detailed information about the individual
remuneration to the members of the board
and senior executives in 2022 and their share
ownership is detailed in the consolidated financial
statements note 25B Related Parties – Board and
key management personnel remuneration.
Oslo, Norway, 28 April 2023
The board of directors – PetroNor ASA
Eyas Alhomouz
Gro Kielland
Joseph Iskander
Ingvil Smines Tybring-Gjedde
Chair
Director
Director
Director
Azza Fawzi
Jarle Norman-Hansen
Director
Director
PETRONOR E&P ASA
ANNUAL REPORT 2022
65
Consolidated statement of comprehensive income
......................................................................
68
Consolidated statement of financial position
..................................................................................
69
Consolidated statement of changes in equity
..................................................................................
70
Consolidated statement of cash flows
...............................................................................................
71
Notes to the consolidated financial statements
............................................................................
72
Note 01
Corporate information
.........................................................................................................................................
72
Note 02
Basis of preparation
.............................................................................................................................................
72
Note 03
Significant accounting judgements, estimates, and assumptions
..............................................................
73
Note 04
Revenue
.................................................................................................................................................................
74
Note 05
Cost of sales
...........................................................................................................................................................
74
Note 06
Other operating income
......................................................................................................................................
74
Note 07
Exploration expenses
..........................................................................................................................................
75
Note 08
Administrative expenses
.....................................................................................................................................
75
Note 09
Finance expenses
.................................................................................................................................................
76
Note 10
Tax expense
...........................................................................................................................................................
76
Note 11
Earnings per share
................................................................................................................................................
77
Note 12
Inventories
.............................................................................................................................................................
77
Note 13
Trade and other receivables
...............................................................................................................................
78
Note 14
Cash and cash equivalents
..................................................................................................................................
78
Note 15
Segment information
...........................................................................................................................................
79
Note 16
Property, plant, and equipment
.........................................................................................................................
79
Note 17
Intangible assets
...................................................................................................................................................
80
Note 18
Leases
.....................................................................................................................................................................
81
Note 19
Trade and other payables
....................................................................................................................................
82
Note 20
Loans and borrowings
.........................................................................................................................................
82
Note 21
Provisions
...............................................................................................................................................................
83
Note 22
Deferred tax liabilities
..........................................................................................................................................
84
Note 23
Share capital
..........................................................................................................................................................
84
Note 24
Reserves
.................................................................................................................................................................
85
Note 25
Related party transactions
.................................................................................................................................
86
Note 26
Acquisition of subsidiaries
.................................................................................................................................
90
Note 27
Risk management
.................................................................................................................................................
92
Note 28
Financial instruments
..........................................................................................................................................
95
Note 29
Commitments and contingencies
......................................................................................................................
95
Note 30
Events subsequent to reporting date
...............................................................................................................
96
Note 31
Summary of accounting policies
........................................................................................................................
96
Financial statements
PetroNor E&P ASA
PETRONOR E&P ASA
ANNUAL REPORT 2022
66
Financial statements
Company statement of comprehensive income
...........................................................................
106
Company statement of financial position
......................................................................................
107
Company statement of changes in equity
.....................................................................................
108
Company statement of cash flows
..................................................................................................
108
Notes to the financial statements – PetroNor E&P ASA
..............................................................
109
Note 01
Corporate information
.......................................................................................................................................
109
Note 02
Basis of preparation
...........................................................................................................................................
109
Note 03
Employee benefit expenses
..............................................................................................................................
110
Note 04
Auditors’ remuneration
.....................................................................................................................................
110
Note 05
Cash and cash equivalents
...............................................................................................................................
110
Note 06
Investment in subsidiaries
................................................................................................................................
110
Note 07
Acquisition of subsidiaries
................................................................................................................................
111
Note 08
Equity
....................................................................................................................................................................
112
Note 09
Related parties
....................................................................................................................................................
113
Note 10
Risk management
...............................................................................................................................................
113
Note 11
Financial instruments
.......................................................................................................................................
114
Note 12
Commitments and contingencies
....................................................................................................................
115
Note 13
Events after the reporting period
....................................................................................................................
115
Note 14
Summary of accounting policies
......................................................................................................................
115
Statement of directors’ responsibility
.............................................................................................
117
Alternative performance measures
................................................................................................
123
Glossary and definitions
.....................................................................................................................
124
Corporate directory
.............................................................................................................................
124
PETRONOR E&P ASA
ANNUAL REPORT 2022
67
Financial statements
Consolidated statement of comprehensive income
For the year ended 31 December
Amounts in USD thousand
Note
2022
2021
Revenue
4
146,066
106,463
Cost of sales
5
(46,210)
(34,585)
Gross profit
99,856
71,878
Other operating income
6
-
866
Exploration expense
7
1,630
(2,270)
Administrative expenses
8
(14,378)
(13,131)
Profit from operations
87,108
57,343
Finance expense
9
(3,322)
(3,041)
Foreign exchange gain/(loss)
(1,932)
(56)
Profit before tax
81,854
54,246
Tax expense
10
(47,579)
(33,102)
Profit/(loss) for the year
34,275
21,144
Other comprehensive income:
Exchange losses arising on translation of foreign operations
1,418
(364)
Items that may subsequently be reclassified to profit or loss
1,418
(364)
Total comprehensive income/(loss)
35,693
20,780
Profit/(loss) for the year attributable to:
Owners of the parent
26,887
12,314
Non-controlling interest
25a
7,388
8,830
Total
34,275
21,144
Total comprehensive income/(loss) attributable to:
Owners of the parent
28,305
12,208
Non-controlling interest
25a
7,388
8,572
Total
35,693
20,780
Earnings per share attributable to members:
USD cents
USD cents
Basic profit/(loss) per share
11
1.96
1.06
Diluted profit/(loss) per share
11
1.96
1.06
The accompanying notes form part of these consolidated financial statements.
PETRONOR E&P ASA
ANNUAL REPORT 2022
68
Financial statements
Consolidated statement of financial position
At 31 December
Amounts in USD thousand
Note
2022
2021
ASSETS
Current assets
Inventories
12
18,824
6,227
Trade and other receivables
13
1,171
13,820
Cash and cash equivalents
14
24,816
31,755
Total
44,811
51,802
Non-current assets
Property, plant, and equipment
16
67,479
39,397
Intangible assets
17
42,283
7,172
Right-of-use assets
18
462
44
Other receivables
13
29,432
26,837
Total
139,656
73,450
Total assets
184,467
125,252
LIABILITIES
Current liabilities
Trade and other payables
19
20,751
29,996
Lease liability
18
179
58
Loans and borrowings
20
5,500
13,079
Total
26,430
43,133
Non-current liabilities
Loans and borrowings
20
5,500
-
Lease liability
18
280
-
Provisions
21
24,563
16,302
Deferred tax liabilities
22
9,031
-
Other payables
19
8,738
-
Total
48,112
16,302
Total liabilities
74,542
59,435
Net assets
109,925
65,817
Issued capital and reserves attributable to owners of the parent
Issued capital
23
72,115
62,115
Reserves
24
(3)
(1,421)
Retained earnings
24
25,497
(1,390)
Total
97,609
59,304
Non-controlling interests
25a
12,316
6,513
Total equity
109,925
65,817
The accompanying notes form part of these consolidated financial statements.
The financial statements were approved and authorised for issue by the board of directors on 28 April 2023.
PETRONOR E&P ASA
ANNUAL REPORT 2022
69
Financial statements
Consolidated statement of changes in equity
Amounts in USD thousand
Note
Share
capital
Share
premium
Foreign
currency
translation
reserve
Retained
earnings
Non-
controlling
interest
Total
For the year ended 31 December 2022
Balance at 1 January 2022
62,115
-
(1,421)
(1,390)
6,513
65,817
Profit for the year
-
-
-
26,887
7,388
34,275
Other comprehensive income
-
1,418
-
-
1,418
Total comprehensive loss for the year
-
-
1,418
26,887
7,388
35,693
Unwinding PetroNor E&P Ltd (Australia) share capital
(62,115)
-
-
-
-
(62,115)
Issue of shares in PetroNor E&P ASA
23
149
61,966
-
-
-
62,115
Issue of ordinary shares as consideration for business
combination
23
10
9,990
-
-
-
10,000
Dividends to non-controlling interest
-
-
-
-
(1,585)
(1,585)
Balance at 31 December 2022
159
71,956
(3)
25,497
12,316
109,925
For the year ended 31 December 2021
Balance at 1 January 2021
17,735
-
(956)
(8,853)
14,370
22,296
Profit/(loss) for the year
-
-
-
12,314
8,830
21,144
Other comprehensive income
-
-
(106)
-
(258)
(364)
Total comprehensive loss for the year
-
(106)
12,314
8,572
20,780
Issue of capital
23
45,943
-
-
-
-
45,943
Share issue costs
23
(1,563)
-
-
-
-
(1,563)
Acquisition of equity interest from non-controlling
interest
-
-
(359)
(4,851)
(16,429)
(21,639)
Balance at 31 December 2021
62,115
-
(1,421)
(1,390)
6,513
65,817
The issued share capital for PetroNor E&P Ltd (Australia)
formerly the parent entity in 2021 is adjusted to reflect historic
fair value adjustments on two reverse takeover events so as to
reflect group share capital. The like for like share exchange and
relisting on the Oslo Børs is a continuation of the business and
so group share capital remains unchanged following the issue
of 1,326,991,006 shares.
The accompanying notes form part of these consolidated financial statements.
PETRONOR E&P ASA
ANNUAL REPORT 2022
70
Financial statements
Consolidated statement of cash flows
For the year ended 31 December
Amounts in USD thousand
Note
2022
2021
Cash flows from operating activities
Profit for the year
81,854
54,246
Adjustments for:
Depreciation and amortisation
9,152
4,422
Amortisation of right-of-use asset
146
168
Unwinding of discount on decommissioning liability
842
995
Impairment reversal –
inventory
(2,519)
-
Net foreign exchange differences
1,418
(364)
Finance expense
2,444
2,038
Total
93,337
61,505
Decrease/(increase) in trade and other receivables
12,631
(8,062)
Decrease/(increase) in advance against decommissioning cost
13
(2,595)
(5,577)
Increase in abandonment provision
3,652
-
Increase in inventories
12
(10,078)
(2,649)
(Decrease)/increase in trade and other payables
(11,875)
7,758
Cash (used in) / generated from operations
85,072
52,975
Income taxes paid
10
(47,579)
(33,102)
Net cash flows from operating activities
37,493
19,873
Investing activities
Purchases of property, plant, and equipment
16
(35,756)
(19,759)
Purchases of intangible assets
17
(2,353)
(814)
Net cash flows from investing activities
(38,109)
(20,573)
Financing activities
Issue of ordinary shares
23
(52)
27,943
Share issue costs
-
(1,563)
Proceeds from loans and borrowings
20
11,000
-
Repayment of loans and borrowings
20
(13,079)
(5,833)
Interest on loans and borrowings
20
(2,444)
(2,038)
Repayment of principal portion of lease liability
18
(127)
(159)
Repayment of interest portion of lease liability
18
(36)
(8)
Dividends paid to non-controlling interest
(1,585)
-
Net cash (used in) / from financing activities
(6,323)
18,342
Net (decrease)/increase in cash and cash equivalents
(6,939)
17,642
Cash and cash equivalents at beginning of year
31,755
14,113
Cash and cash equivalents at end of year
14
24,816
31,755
The accompanying notes form part of these consolidated financial statements.
PETRONOR E&P ASA
ANNUAL REPORT 2022
71
Financial statements
Notes to the consolidated financial statements
Note 01
Corporate information
The consolidated financial statements of the company and
its subsidiaries (together “the group”) for the year ended 31
December 2022 was authorised for issue in accordance with a
resolution of the directors on 28 April 2023.
PetroNor E&P ASA is a ‘for profit entity’ and is a company
limited by shares incorporated in Norway. Its shares are
publicly traded on the Oslo Børs (code: PNOR), the main
regulated marketplace of the Oslo Stock Exchange, Norway.
The principal activities of the group are the exploration and
production of crude oil.
Note 02
Basis of preparation
PetroNor E&P ASA’s consolidated financial statements have
been prepared in accordance with International Financial
Reporting Standards (IFRS) which have been adopted by the
EU and are mandatory for financial years beginning on or after
1 January 2022, and Norwegian disclosure requirements listed
in the Norwegian Accounting Act as of 31 December 2022. The
consolidated financial statements have been prepared on a
historical cost basis. The consolidated financial statements
have been prepared on the basis of uniform accounting
principles for similar transactions and events under otherwise
similar circumstances.
The consolidated financial statements are presented in
United States Dollars, which is the functional currency for all
the material subsidiaries, and all values are rounded to the
thousand dollars unless otherwise stated.
GOING CONCERN
The board of directors confirms that the consolidated financial
statements have been prepared pursuant to the going
concern assumption, and that this assumption was realistic
as at the balance sheet date. The going concern assumption
is based upon the financial position of the company and the
development plans currently in place. In the board of directors’
view, the annual accounts give a true and fair view of the
group’s assets and liabilities, financial position and results.
PetroNor E&P ASA is the parent company of the PetroNor
Group. Its consolidated financial statements have been
prepared on the assumption that PetroNor will continue as
a going concern. The group recognises that in order to fund
on-going operations and pursue organic and inorganic growth
opportunities it will require additional funding. This funding
may be sourced through joint venture equity or share issues or
through debt finance.
The going concern basis assumes the continuity of normal
business activity and the realisation of assets and the
settlement of liabilities in the normal course of business. The
underlying business of the group created a net profit after tax
of USD 34.3 million for the year ended 31 December 2022, with
strong production from the Congo assets in the first quarter of
2023. As at 31 December 2022, the group had a cash balance
of USD 24.8 million (2021 USD 31.8 million). The company
has listed on the main exchange of Oslo Børs, successfully
refinanced its debt, achieved high production levels following
a successful in-fill drilling campaign and continues to seek
for potential partners to join the company on its exploration
portfolio. This demonstrates that the business has continued
to operate effectively, and businesses are willing to engage
with the company and this has enabled the directors of
PetroNor (“the directors”) to form the opinion that the
company will be in a position to continue to meet its liabilities
and obligations for a period of at least twelve months from the
date of signing this report.
These consolidated financial statements do not include any
adjustments relating to the recoverability and classification of
recorded asset amounts or to the amounts and classification
of liabilities that might be necessary should the group not
continue as a going concern.
The following financial review is based on the consolidated
financial statements of PetroNor E&P ASA and its subsidiaries.
The statements have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted
by the EU as well as Norwegian accounting legislation.
In the view of the board, the statement of comprehensive
income, statement of changes in equity, statement of financial
position and cashflow provide satisfactory information about
the operations, financial results and position of the group and
the parent company at 31 December 2022.
PETRONOR E&P ASA
ANNUAL REPORT 2022
72
Financial statements
Note 03
Significant accounting judgements, estimates, and assumptions
The directors evaluate estimates and judgements
incorporated in the consolidated financial statements based
on historical knowledge and the best available current
information. Estimates assume a reasonable expectation of
future events and are based on current trends and economic
data, obtained both externally and within the group.
Management has identified the following critical accounting
policies for which significant judgements, estimates, and
assumptions are made. Actual results may differ from these
estimates under different assumptions and conditions and
may materially affect financial results or the financial position
reported in future period.
Further details of the nature of these assumptions and
conditions may be found in the relevant notes to the financial
statements.
HYDROCARBON RESERVE AND RESOURCE ESTIMATES
Hydrocarbon reserves are estimates of the amount of
hydrocarbons that can be economically and legally extracted
from the group’s oil and gas properties. The group estimates
its commercial reserves and resources based on information
compiled by appropriately qualified persons relating to the
geological and technical data on the size, depth, shape and
grade of the hydrocarbon body and suitable production
techniques and recovery rates. Commercial reserves are
determined using estimates of oil and gas in place, recovery
factors and future commodity prices, the latter having an
impact on the total amount of recoverable reserves and the
proportion of the gross reserves which are attributable to the
host government under the terms of the production-sharing
agreements. Future development costs are estimated using
assumptions as to the number of wells required to produce
the commercial reserves, the cost of such wells and associated
production facilities, and other capital costs. The current long-
term Brent oil price assumption used in the estimation of
commercial reserves is USD 60/bbl. The carrying amount of
oil and gas properties and licenses at 31 December 2022 are
shown in note 16 and 17.
The group estimates and reports hydrocarbon reserves in
line with the principles contained in the Society of Petroleum
Engineers (SPE) Petroleum Resources Management Reporting
System (PRMS) framework. As the economic assumptions used
may change and as additional geological information is obtained
during the operation of a field, estimates of recoverable
reserves may change. Such changes may impact the group’s
reported financial position and results, which include:
■
The carrying value of oil and gas properties may be affected
due to changes in estimated future cash flows, note 16;
■
Depreciation and amortisation charges in the statement
of profit or loss and other comprehensive income may
change where such charges are determined using the unit
of production (UOP) method, or where the useful life of the
related assets change, note 16;
■
Provisions for decommissioning are subject to re-estimation
– where changes to reserves estimates affect expectations
about when such activities will occur and the associated cost
of these activities, note 21.
TAXES
The group operates in several tax jurisdictions, and
consequently, its income is subject to various rates and rules
of taxation. As a result, the company’s effective tax rate
may vary significantly depending upon the profitability of
operations in the different jurisdictions.
The group recognises the net future tax benefit related to
deferred income tax assets to the extent that it is probable
that the deductible temporary differences will reverse in the
foreseeable future. Assessing the recoverability of deferred
income tax assets requires the group to make significant
estimates related to expectations of future taxable income.
Estimates of future taxable income are based on forecast cash
flows from operations and the application of existing tax laws
in each jurisdiction, to the extent that future cash flows and
taxable income differ significantly from estimates. The ability of
the group to realise the net deferred tax assets recorded at the
date of the statement of financial position could be impacted.
Additionally, future changes in tax laws in the jurisdictions in
which the group operates could limit the ability of the group to
obtain tax deductions in future periods.
Additional information on the accounting policy for taxes is
explained further in note 10 and 31M.
DECOMMISSIONING COSTS
Decommissioning costs will be incurred by the group at the
end of the operating life of some of the group’s facilities and
properties. The group assesses its retirement obligation at
each reporting date. The ultimate decommissioning costs are
uncertain and cost estimates can vary in response to many
factors, including changes to relevant legal requirements, the
emergence of new restoration techniques or experience at
other production sites. The expected timing, extent and amount
of expenditure can also change, for example in response to
changes in reserves or changes in laws and regulations or
their interpretation. Therefore, significant estimates and
assumptions are made in determining the provision for
decommissioning costs. As a result, there could be significant
adjustments to the provisions established which would
affect future financial results. The provision at reporting date
represents the management’s best estimate of the present
value of the future decommissioning costs required. Additional
information is provided in note 21.
IMPAIRMENT OF OIL AND GAS ASSETS AND TECHNICAL
GOODWILL
Management must determine whether there are circumstances
indicating a possible impairment of the group’s oil and gas
assets. Changes in the circumstances or expectations of
future performance of an individual asset or a group of assets
may be an indicator that the asset is impaired, requiring the
carrying amount to be written down to its recoverable amount.
Assessment for indicators of impairment includes assessments
of expected future cash flows, future oil and gas prices, cost
profiles, indicators that the asset will be uneconomic to develop,
geological evaluation and the date of expiration of the licences.
Impairments other than impairments of goodwill are reversed
where impairment indicators are no longer present.
PETRONOR E&P ASA
ANNUAL REPORT 2022
73
Financial statements
PetroNor has recognised “technical goodwill” arising on
the OML 113 business combination. Technical goodwill is
commonly used in the oil and gas industry to describe a
category of goodwill arising as an offsetting amount to
deferred tax recognised in business combinations. The
technical goodwill has been allocated to the OML 113
Nigeria cash generating unit (CGU) and will be assessed for
impairment where there are indications that the CGU is
impaired. Goodwill is not depreciated and hence, impairment
of technical goodwill is expected on a recurring basis,
unless there are positive changes in underlying economic
assumptions for the asset. When performing the impairment
test for technical goodwill, deferred tax recognised in relation
to the acquired assets in a business combination reduces the
net carrying value prior to the eventual impairment charges.
When deferred tax from the initial recognition decreases,
more goodwill is exposed for impairment. After initial
recognition, depreciation of values calculated in the purchase
price allocations from business combinations will result in
decreased deferred tax liability.
Note 04
Revenue
Amounts in USD thousand
2022
2021
Revenue from contracts with customers
Revenue from sales of petroleum products
72,837
57,601
Other revenue
Assignment of tax oil
47,579
33,102
Assignment of royalties
25,650
15,760
Total revenue
146,066
106,463
Quantity of oil lifted (barrels)
800,177
831,089
Average selling price (USD per barrel)
90.99
69.31
Quantity of net oil produced after royalty, cost oil and tax oil (barrels)
900,495
821,536
All revenue from the sales of petroleum products in 2022
is generated, recognised and transferred at a point in time.
Invoices are due for settlement thirty days from the bill
of lading, the point at which crude oil had been loaded
onto vessel for shipment. All group revenue is derived
from production in the Republic of Congo from the PNGF
Sud offshore asset. The group presents profit oil tax and
royalties on a grossed-up basis as an income tax expense
with corresponding increase in oil and gas revenues and any
associated royalties are included in cost of sales. Refer to note
31K for additional information.
Note 05
Cost of sales
Amounts in USD thousand
2022
2021
Operating expenses
16,636
14,303
Royalty
25,650
15,760
Depreciation and amortisation of oil and gas properties
9,134
4,385
Provision for diversified investment
1,710
-
Movement in oil inventory
(6,920)
137
Total
46,210
34,585
Provision for diversified investment expenditure has been reclassified from administrative expenses to cost of sales in 2022.
Note 06
Other operating income
Amounts in USD thousand
2022
2021
Other
-
865
Total
-
865
PETRONOR E&P ASA
ANNUAL REPORT 2022
74
Financial statements
Note 07
Exploration expenses
Amounts in USD thousand
2022
2021
Impairment reversal
(2,519)
-
Seismic data acquisition
889
2,270
Total
(1,630)
2,270
Impairment on inventory was reversed in the period to reflect current market conditions in the drilling sector (refer to note 12).
Costs not capitalised to intangible assets under group policies are expensed including seismic costs and the allocated time writing
costs.
Note 08
Administrative expenses
Amounts in USD thousand
Note
2022
2021
Employee benefit expenses
8A
5,581
5,435
Travelling expenses
559
218
Legal and professional expenses
5,209
2,620
Corporate social responsibility
1,500
1,500
Provision for diversified investment
-
1,051
Business development
478
486
Other expenses
1,051
1,821
Total
14,378
13,131
Provision for diversified investment expenditure has been reclassified from administrative expenses to cost of sales in 2022.
8A.
EMPLOYEE BENEFIT EXPENSES
Amounts in USD thousand
2022
2021
Salaries
4,834
4,793
Short-term non-monetary benefits
490
304
Defined contribution pension cost
43
41
Social-security contributions and similar taxes
214
297
Total
5,581
5,435
PetroNor is required to have an occupational pension
scheme in accordance with the Norwegian law on required
occupational pension (“Lov om obligatorisk tjenestepensjon”).
The Norwegian subsidiary that employs staff PetroNor E&P
Services AS contributes to an external defined contribution
scheme and therefore no pension liability is recognised in the
statement of financial position.
Under the Pensions Act 2008, every employer in the UK
must put certain staff into a workplace pension scheme and
contribute towards it,
PetroNor E&P Services Limited the subsidiary that employs
staff in the UK, contributes into an external defined
contribution scheme. As such, no pension liability is
recognised in the statement of financial position in relation to
the company’s UK-based employees.
There are currently no share-based payment incentive
schemes in place for employees.
The cost of non-cash benefits to employees is disclosed as
short-term non-monetary benefits above.
PETRONOR E&P ASA
ANNUAL REPORT 2022
75
Financial statements
8B.
AUDITORS’ REMUNERATION
Amounts in USD thousand
2022
2021
Paid or payable to BDO
Audit review of financial statements
BDO AS
178
-
BDO Network firms
131
130
Total
309
130
Other non-assurance services
BDO related practices
19
12
Total
19
12
Paid or payable to other audit firms
Audit or review of financial reports
47
138
Other non-assurance services
104
141
Total
151
279
Fees, excluding VAT, to the auditors are included in administration expenses.
Note 09
Finance expenses
Amounts in USD thousand
Note
2022
2021
Unwinding of discount on decommissioning liability
21
842
995
Loan structuring fee
165
-
Finance cost on lease liabilities
18
36
8
Interest on loans
20
1,042
2,038
Other interest
1,237
-
Total
3,322
3,041
Note 10
Tax expense
Amounts in USD thousand
2022
2021
Petroleum revenue tax expense
Current income tax charge
47,579
33,102
Total tax expense reported in the consolidated statement of comprehensive income
47,579
33,102
The income tax expense is only related to the subsidiary in
Congo and represents the assignment of tax oil on the revenue
from sales of petroleum products, note 4. There was no
income tax expense in the other subsidiaries’ jurisdictions nor
in the parent’s jurisdiction as these companies are in taxable
loss positions in both 2022 and 2021. Average effective tax rate
for the year was 33 per cent (2021: 31 per cent) based on gross
revenue of the group.
PETRONOR E&P ASA
ANNUAL REPORT 2022
76
Financial statements
Note 11
Earnings per share
Amounts in USD thousand
2022
2021
Profit attributable to ordinary shareholders
Profit from continuing operations attributable to the ordinary equity holders used in
calculating basic/diluted profit per share
26,887
12,314
Profit attributable to the ordinary equity holders used in calculating
basic/diluted profit per share
26,887
12,314
Weighted average number of ordinary shares outstanding during
the period used in the calculation of earnings per share
Basic
1,372,236,921
1,160,438,253
Diluted
1,372,729,890
1,161,827,723
Earnings per share
Basic
1.96
1.06
Diluted
1.96
1.06
Options on issue are considered to be potential ordinary shares
and have been included in the determination of diluted loss per
share only to the extent to which they are dilutive. There are nil
options as at 31 December 2022 (2021: 1,389,470).
Note 12
Inventories
Amounts in USD thousand
2022
2021
Crude oil inventory
7,475
554
Materials and supplies
11,349
5,673
Total
18,824
6,227
Crude oil inventory is valued at cost of USD 29.43 per
bbl (2021: USD 22.84 bbl). This is derived from the direct
production costs USD 51.2 million (2021: 34.6 million) and the
unit production cost USD 1.74 million (2021: 1.51 million).
The crude oil inventory and the material and supplies
inventory are valued at the lower of cost and net realisable
value. Cost is determined using the weighted average method.
Net realisable value is the estimated selling price, less
applicable selling expenses. The cost of inventory includes all
costs related to bringing the inventory to its current condition,
including processing costs, labour costs, supplies, direct
and allocated indirect operating overhead and depreciation
expense, where applicable, including allocation of fixed and
variable costs to inventory.
In the current accounting period inventory for the Guinea-
Bissau drilling campaign was written back up to cost as current
market conditions indicate that the net realisable value
exceeds the cost.
PETRONOR E&P ASA
ANNUAL REPORT 2022
77
Financial statements
Note 13
Trade and other receivables
Amounts in USD thousand
2022
2021
Recoverability less than one year
Trade receivables
-
13,431
Other receivables
1,171
389
Total
1,171
13,820
Recoverability more than one year
Advance against decommissioning cost
29,432
26,837
Total
29,432
26,837
In addition to the booking of decommissioning cost asset and
liability, the contractors group and the Congolese Government
have decided to set up funds for the decommissioning cost
in an escrow account which is managed by the operator. The
advances of the funds for the year are made on the basis of
an average rate of USD 1.60 per barrel produced (2021: USD
3.68 per barrel). Refer to note 21 for further details on the
decommissioning liability.
The group has adopted the simplified approach allowable
under IFRS 9 Financial Instruments where the group measures
the provision for impairment for trade receivables and
amounts due from related parties at an amount equal to
lifetime ECL. The ECL on trade receivables are estimated using
a provision matrix by reference to past default experience of
the debtor and an analysis of the debtors’ current financial
position, adjusted for factors that are specific to the debtors’
general economic conditions and forward looking elements of
the industry in which the debtors operate and an assessment
of both the current as well as the forecast direction of
conditions at the reporting date.
Note 14
Cash and cash equivalents
Amounts in USD thousand
2022
2021
Cash in bank
24,775
31,673
Restricted cash
41
82
Total
24,816
31,755
Restricted cash at 31 December 2022 represents ringfenced
cash payable to Norwegian authorities.
The following table represents the changes in liabilities arising
from financing activities through cash flows and non-cash
changes:
Amounts in USD thousand
Non-current
borrowings
Current
borrowings
Total
At 1 January 2022
-
13,079
13,079
Cash flows
5,500
(7,579)
(2,079)
Non-cash flows
-
-
-
As at 31 December 2022
5,500
5,500
11,000
At 1 January 2021
14,912
4,000
18,912
Cash flows
(1,833)
(4000)
(5,833)
Non-cash flows
-
-
-
Movement non-current to current
(13,079)
13,079
-
As at 31 December 2021
-
13,079
13,079
PETRONOR E&P ASA
ANNUAL REPORT 2022
78
Financial statements
Note 15
Segment information
For management purposes, the group is organised into one
main operating segment, which involves exploration and
production of hydrocarbons. All of the group's activities are
interrelated, and discrete financial information is reported
to chief operating decision maker as a single segment.
Accordingly, all significant operating decisions are based upon
analysis of the group as one segment. The financial results
from this segment are equivalent to the financial statements
of the group as a whole.
The group only has one operating segment, being exploration
and production of hydrocarbons.
The analysis of the location of non-current assets is as follows:
Amounts in USD thousand
2022
2021
Congo
98,876
69,564
The Gambia
4,507
3,507
Guinea-Bissau
667
314
Nigeria
35,226
3
Norway
380
62
Total
139,656
73,450
Note 16
Property, plant, and equipment
PRODUCTION ASSETS AND EQUIPMENT
Amounts in USD thousand
2022
2021
Cost
At 1 January
53,204
33,445
Additions
36,681
19,759
Disposals
-
-
At 31 December
89,885
53,204
Depreciation
At 1 January
13,807
9,962
Charge for the year
8,599
3,845
Depreciation on disposals
-
-
At 31 December
22,406
13,807
Net carrying amount
At 31 December
67,479
39,397
Production assets and equipment are carried at the following values:
Amounts in USD thousand
2022
2021
Oil & gas CAPEX
62,544
33,968
Decommissioning costs
4,900
5,396
Other
35
33
Total
67,479
39,397
PPE assets are distributed geographically as follow:
Amounts in USD thousand
2022
2021
Congo
66,542
39,377
Nigeria
927
-
Other
10
20
Total
67,479
39,397
PETRONOR E&P ASA
ANNUAL REPORT 2022
79
Financial statements
Note 17
Intangible assets
LICENCES AND APPROVALS
Amounts in USD thousand
2022
2021
Cost
At 1 January
11,210
10,396
Additions in relation to business combinations (refer to note 26)
24,268
-
Additions
2,353
814
At 31 December
37,831
11,210
Accumulated amortisation and impairment
At 1 January
4,038
3,461
Amortisation
541
577
Impairment
-
-
At 31 December
4,579
4,038
Net carrying value
At 1 January
7,172
6,935
At 31 December
33,252
7,172
GOODWILL
Amounts in USD thousand
2022
2021
Cost
At 1 January
-
-
Additions in relation to business combinations (refer to note 25)
9,031
-
Impairment
-
-
At 31 December
9,031
-
GOODWILL
Goodwill of USD 9.0 million at 31 December 2022 consists of
technical goodwill related to the acquisition that occurred
during the year, note 26. Technical goodwill is subject to
impairment testing whenever there is an indicator that the
CGU to which it is allocated is impaired. Technical goodwill
has been allocated to the OML 113 CGU and impairment
assessments will be based on the underlying economics
for the asset. When performing the impairment test for
technical goodwill, deferred tax recognized in relation to the
acquired assets in a business combination reduces the net
carrying value prior to the eventual impairment charges.
When deferred tax from the initial recognition decreases,
more goodwill is exposed for impairment. After initial
recognition, depreciation of values calculated in the purchase
price allocations from business combinations will result in
decreased deferred tax liability.
LICENCE OVERVIEW
Congo
In 2017, subsidiary company Hemla E&P Congo SA acquired
interests in three development and production permits
(Tchendo: 20 per cent; Tchibouela: 20 per cent and Tchibeli-
Litanzi: 20 per cent) which will respectively end in December
2037, for each of them, with possible extensions for 5 years.
All these three licenses are called or named collectively
“PNGF Sud” and together comprise an area of 482.28km
2
. The
operator of the licences is Perenco, and the carrying value as
at 31 December 2022 is USD 2.8 million. This number is net of
depletion, the Congo intangible assets are the only intangibles
in active use and being amortised.
Nigeria
The corporate acquisition from Panoro Energy ASA during
year, added an economic interest in the OML 113 field of
12.1913 per cent that is operated by Yinka Folawiyo Petroleum.
There were two producing wells prior to suspending
production in November 2021 due to the terminated contract
with the FPSO, the Aje-4 with oil production and Aje-5ST2
with oil and gas production. The licence was renewed in 2018
and has a twenty-year term. The current strategy is to update
the field development plan to expedite gas development and
overall redevelopment of the venture. As at 31 December
2022, the carrying value of the licence was USD 24.3 million.
The Gambia
The A4 licence area is 1,376km
2
and is operated by company
subsidiary PetroNor E&P Gambia Ltd. PetroNor secured a new
exploration licence (PEPLA) on 18 November 2022 and entered
into the first exploration period which has a duration of three
years. PetroNor hold 90 per cent equity with the Gambia
National Petroleum Company as partner (10 per cent equity).
As at 31 December 2022, the carrying value of the A4 licence is
USD 4.5 million.
PETRONOR E&P ASA
ANNUAL REPORT 2022
80
Financial statements
Guinea-Bissau
As at 31 December 2022, 78.57 per cent interest of the Sinapa
and Esperança licences are held and operated by PetroNor
subsidiary PetroNor E&P AB. Post year end it was confirmed
that 21.43 per cent previously held by FAR Ltd
had been
transferred to PetroNor. The combined licences cover an area
of 4,963km
2
and have USD 0.6 million carrying value in the
financial statements as at 31 December 2022. The current
exploration phase runs to October 2023.
Senegal
As at the date of this report, the company’s subsidiary
African Petroleum Senegal Limited awaits the decision of
the arbitration proceedings with the International Centre for
the Settlement of Investment Disputes (ICSID) regarding the
interests in the Senegal Offshore Sud Profond and Rufisque
Offshore Profond blocks in Senegal (ICSID case ARB/18/24).
The combined licences cover an area of 15,796km
2
and due to
the arbitration process have nil carrying value in the financial
statements as at 31 December 2022. Please refer to board
director’s report for additional information on the arbitration
status.
Intangible assets are valued in accordance with group
accounting policies and are assessed for indications of
impairment in accordance with IAS 36. There were no
indicators of impairment as at 31 December 2022 for the
licence costs within the group. Refer to note 30I for additional
information.
RESERVES
The group has adopted a policy of regional reserve reporting
using external third-party companies to audit its work and
certify reserves and resources. Reserve and contingent
resource estimates comply with the definitions set by the
Petroleum Resources Management System (“PRMS”) issued
by the Society of Petroleum Engineers (“SPE”), the American
Association of Petroleum Geologists (“AAPG”), the World
Petroleum Council (“WPC”) and the Society of Petroleum
Evaluation Engineers (“SPEE”) in March 2007. AGR Petroleum
Services AS provided the 3
rd
party verifications of the PNGF
Sud reserves. CPR Tracs International Limited provided the 3
rd
party verification of the Aje reserves.
The following is a summary of key results from the reserve
reports (net of the group’s share):
Asset
1P reserves
2P reserves
3P reserves
MMbbls
MMbbls
MMbbls
PNGF Sud
12.5
18.5
24.7
Aje
-
-
-
Total
12.5
18.5
24.7
Definitions:
1P) Proved reserves
Proved reserves are those quantities of petroleum, which by
analysis of geoscience and engineering data, can be estimated
with reasonable certainty to be commercially recoverable,
from a given date forward, from known reservoirs and
under defined economic conditions, operating methods, and
government regulations.
2P) Proved plus probable reserves
Probable reserves are 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.
3P) Proved plus probable plus possible reserves
Possible reserves are those additional reserves which analysis
of geoscience and engineering data indicate are less likely to
be recovered than probable reserves.
Note 18
Leases
Amounts in USD thousand
Right-of-use assets
Office building
Lease liabilities
At 1 January 2022
44
58
Additions
564
492
Amortisation expense
(146)
-
Interest expense
-
36
Payments made
-
(127)
At 31 December 2022
462
459
Ageing of lease liabilities
Current
179
Non-current
280
PETRONOR E&P ASA
ANNUAL REPORT 2022
81
Financial statements
Amounts in USD thousand
Right-of-use assets
Office building
Lease liabilities
At 1 January 2021
212
225
Additions
-
-
Amortisation expense
(168)
-
Interest expense
-
8
Payments made
-
(175)
At 31 December 2021
44
58
Ageing of lease liabilities
Current
-
58
Non-current
-
-
Amounts recognised in profit and loss
Amounts in USD thousand
31 December 2022
31 December 2021
Amortisation expense on right-of-use assets
146
168
Interest expense on lease liabilities
36
8
Expense relating to short-term lease
-
-
Total
182
176
The total cash outflow for leases amount to USD 163,000 for the year.
Note 19
Trade and other payables
Amounts in USD thousand
Note
2022
2021
Amounts due less than one year
Trade payables
15,437
22,014
Due to related parties
25D
2,019
3,449
Taxes and state payables
787
120
Other payables and accrued liabilities
2,508
4,472
Total
20,751
30,055
Amounts due more than one year
Other payables
8,738
-
Total
8,738
-
Note 20
Loans and borrowings
Amounts in USD thousand
2022
2021
At 1 January
13,079
18,912
Received
11,000
-
Principal repayment
(13,079)
(5,833)
Interest on loan accrued
1,042
1,539
Interest on loan paid
(1,042)
(1,539)
At 31 December
11,000
13,079
Ageing of loans payable
Current
5,500
13,079
Non-current
5,500
-
Total
11,000
13,079
PETRONOR E&P ASA
ANNUAL REPORT 2022
82
Financial statements
In 2020, PetroNor agreed a USD 15 million facility with 12
months grace period and maturity date in October 2022. The
loan was to be repaid in monthly instalments after the initial
grace period and carried an interest rate of 9 per cent plus
one-month LIBOR payable monthly if the oil price was below
USD 40 per bbl and 12.5 per cent if the oil price was above USD
40 per bbl. The loan was secured against:
■
The assignment of receivables by subsidiary company
Hemla E&P Congo SA (“HEPCO”);
■
Pledge over one of the bank accounts of subsidiary company
Hemla Africa Holding AS (“HAH”);
■
Pledge over one of the bank accounts of subsidiary company
HEPCO;
■
Pledge over shares in subsidiary companies, HAH and
HEPCO;
■
Assignment of inter-company loan agreement between HAH
and HEPCO; and
■
Corporate guarantees by PetroNor E&P Ltd (Australia) and
its subsidiaries PetroNor E&P Ltd (Cyprus) and HEPCO.
On 29 December 2022, HAH and Acqua Diversified Holdings
SPC entered into an amended agreement to advance an
additional USD 11.0 million to be repaid in eight quarterly
instalments of USD 1.375 million. The remaining principal of
USD 2.5 million was repaid along with outstanding interest
and arrangement fees for the amended facility. The amended
facility carries an interest rate of 11.0 per cent, and due to the
group corporate restructure in February 2022, in addition to
the previous security provided, a corporate guarantee was
provided by the new parent company PetroNor E&P ASA.
The Acqua Diversified Holdings SPC loan has the following
covenants and undertakings:
■
Cash equal to the quarterly instalments must be maintained
on specific bank accounts of HAH or HEPCO on a recurring
basis;
■
At least USD 6.0 million from HEPCO oil sales must be paid
into the collection account on a 3-month rolling basis;
■
PetroNor to maintain shareholding level in excess of 70 per
cent in subsidiary company HAH;
■
HAH to maintain shareholding level in excess of 74.25 per
cent in subsidiary company HEPCO;
■
HAH shareholder equity ratio shall not be less than 30 per
cent;
■
HAH duty to report on financial statements, pledged bank
account activity and oil inventory;
■
Restrictions on distributions to HAH shareholders, unless
sufficient liquidity with cash balances exceeding USD 10.0
million immediately before any such distribution, and
distribution does not exceed 75 per cent consolidated HAH
net profit in any year.
Separately on 28 September 2020, subsidiary company HAH
paid a USD 3.9 million dividend to minority interest and related
party Symero Ltd. An amount equal to the dividend was
immediately loaned to the top company of the group at the
time, PetroNor E&P Ltd (Australia), by Symero Ltd with interest
rates matching those already provided by external financing
and no security was provided for the loan. The maturity date
was matched to the USD 15 million facility. On 21 December
2022, the principal balance of USD 3.9 million was repaid to
Symero Ltd.
All covenants were complied with and there were no
notifications of breaches during the year for both loans
payable to Acqua Diversified Holdings SPC and Symero Ltd.
Note 21
Provisions
DECOMMISSIONING LIABILITY
In accordance with joint venture agreements and legislation,
the wellheads, production assets, pipelines and other
installations may have to be dismantled and removed from oil
and natural gas fields when the production ceases. The exact
timing of the obligations is uncertain and depends on the rate
the reserves of the field are depleted.
Based on the existing production profile of the PNGF Sud field
and the size of the reserves, it is expected that expenditure
on retirement is likely to be after more than ten years. The
current bases for the provision are a discount rate of 6.5
per cent (2021: 6.5 per cent) and an inflation rate of 1.6 per
cent (2021: 1.6 per cent). The initial decommissioning liability
(ARO) study was prepared internally by the operator Perenco
and was presented to ARO committee in 2018. The company
reassessed the applicable discount rate during 2022 based
on the rates of government bonds issued in the Congo during
the year. The impact of the change in discount factor was not
considered material.
With the acquisition of the Panoro interest in the OML 113
venture, PetroNor added a decommissioning provision of USD
3.7million. The acquired OML113 assets are discounted at 2.50
per cent with an inflation rate of 2.0 per cent.
The following table presents a reconciliation of the beginning
and ending aggregate amounts of the obligations associated
with the retirement of oil and natural gas properties:
Amounts in USD thousand
Note
2022
2021
At 1 January
16,302
15,307
Arising during the year
3,768
-
Unwinding of discount on decommissioning
9
842
995
At 31 December
20,912
16,302
PETRONOR E&P ASA
ANNUAL REPORT 2022
83
Financial statements
Note 22
Deferred tax liabilities
Amounts in USD thousand
Property, plant, and equipment,
and intangible assets
Total
Deferred tax liabilities
(9,031)
(9,031)
Net asset/(liability) at 31 December 2022
(9,031)
(9,031)
Amounts in USD thousand
Property, plant, and equipment,
and intangible assets
Total
Deferred tax liabilities
-
-
Net asset/(liability) at 31 December 2021
-
-
Changes in net deferred tax liabilities during the year were as follows:
Amounts in USD thousand
2022
2021
Net deferred tax liability at 1 January
-
-
Acquisitions and disposals
(9,031)
-
Net deferred tax liability at 31 December
(9,031)
-
Deferred tax assets have not been brought to account in
respect of tax losses and unrecognised capital allowances
because as at 31 December 2022 it is uncertain when future
taxable amounts will be available to utilise those temporary
differences and losses. As at 31 December 2022, the carried
forward gross tax loss is USD 132 million (2021: USD 116
million). Tax losses carried forward has increased by USD 16
million year on year, this is predominantly due to tax losses
incurred in Norway (USD 10 million), United Kingdom (USD 1.3
million), Sweden (USD 1.1 million), other entities (3.6 million).
Carried forward losses from previous periods do not have
an expiry date. The deferred tax liability has arisen upon fair
value adjustments as part of a business combination (refer to
note 26 for additional detail).
Note 23
Share capital
Ordinary shares participate in dividends and the proceeds on
winding up of the company in proportion to the number of
shares held and in proportion to the amount paid up on the
shares held.
At shareholders’ meetings, each ordinary share entitles the
holder to one vote in proportion to the paid-up amount of the
share when a poll is called, otherwise each shareholder has
one vote on a show of hands.
Reconciliation of movement in shares on issue
Number of fully paid ordinary shares
2022
2021
Balance at the beginning of the year
1,326,991,006
971,665,288
Issue of shares
96,577,537
355,325,718
Balance at 31 December
1,423,568,543
1,326,991,006
PETRONOR E&P ASA
ANNUAL REPORT 2022
84
Financial statements
Reconciliation of movements in issued capital
Amounts in USD thousand
2022
2021
Opening balance
62,115
17,735
Reversal of shares as part of redomicile
1
(62,115)
-
Issue of shares in PetroNor E&P ASA as part of redomicile
1
149
-
Share capital issued as consideration for business combination
2
10
-
Issue of ordinary shares
-
45,943
Share issue costs
-
(1,563)
Balance at end of the period
159
62,115
1)
On 24 February 2022, the company issued 1,326,991,006 ordinary shares as part of the implementation of the scheme of arrangement and redomicile from
Australia to Norway. Shares are issued at the nominal value of 0.001 NOK and translated to 0.01 USD using the rate of exchange on the day of issue.
2)
On 13 July 2022, PetroNor E&P ASA completed the acquisition of Pan-Petroleum Nigeria Holding BV and Pan-Petroleum Services Holdings BV that hold 100
per cent of the shares in Pan-Petroleum AJE Ltd. The upfront consideration was USD 10 million paid via the allotment and issue of 96,577,537 new PetroNor
shares. The shares were issued at the nominal value of 0.001 NOK USD using the daily exchange rate published by the Bank of England. Refer to note 26 for
additional information.
Share premium
Share premium reserve represents excess of subscription
value of the shares over the nominal amount.
Amounts in USD thousand
2022
2021
Opening balance
-
-
Issue of shares as part of redomicile
61,966
-
Share capital issued as consideration for business combination
9,990
-
Balance at end of the period
71,956
-
The issued share capital for PetroNor E&P Ltd (Australia)
formerly the parent entity in 2021 is adjusted downwards to
reflect historic fair value adjustments on two reverse takeover
events so as to reflect group share capital. The like for like share
exchange and relisting on the Oslo Børs is a continuation of
the business and so group share capital remains unchanged
following the issue of 1,326,991,006 shares.
CAPITAL MANAGEMENT
The management controls the capital of the company in order
to maximise the return to shareholders and ensure that the
company can fund its operations and continue as a going
concern. Capital is defined as issued share capital.
The management effectively manages the company’s capital
by assessing the company’s financial risks and adjusting its
capital structure in response to changes in these risks and
in the market. These responses include the management of
expenditure and debt levels, distributions to shareholders and
share and option issues. There have been no changes in the
strategy adopted by the management to control the capital of
the company since the prior reporting period.
The management monitors capital requirements through cash
flow forecasting. The management may seek further capital if
required through the issue of capital or changes in the capital
structure. To maintain the listing on the Oslo Børs, PetroNor
must continue to satisfy requirements on capital set by the
Exchange. These requirements include a free float in excess of
25 per cent and a minimum number of shareholders.
Note 24
Reserves
The movement in reserves are reflected in the statement of
changes in equity.
Foreign currency translation reserve
The foreign currency translation reserve is used to recognise
foreign currency exchange differences arising on translation of
functional currency to presentation currency.
Retained earnings
All other net gains and losses and transactions with owners
not recognised elsewhere.
Dividends
No dividends were declared during the year by the parent
company.
24A.
OPTIONS
Holders of options do not have any voting or dividend rights
in relation to the options. Share options are valued using
the stochastic Black-Scholes model. The inputs to the model
are the weighted average share price, the expected average
exercise price, expected life, the risk free rate of return and the
expected volatility. All options are fully vested and so no costs
were charged in the current accounting period (2021 nil).
PETRONOR E&P ASA
ANNUAL REPORT 2022
85
Financial statements
The following table reconciles the outstanding share options
granted, exercised, and forfeited during the year:
2022
2021
Number of
options
Weighted average
exercise price
equivalent USD
Number of
options
Weighted average
exercise price
equivalent USD
Balance at beginning of the period
1,389,470
0.79
1,389,470
0.81
Lapsed
(1,389,470)
0.79
-
-
Balance at end of the year
-
-
1,389,470
0.79
Exercisable at end of the year
-
-
1,389,470
0.79
As at 31 December 2022, all share options have expired.
Note 25
Related party transactions
25A.
SUBSIDIARIES
The principal subsidiaries of the PetroNor E&P ASA, all of
which have been included in these consolidated financial
statements, are as follows:
Proportion of effective ownership
interest at 31 December
Name
Country of
incorporation
Principal place
of business
2022
2021
PetroNor E&P Pty Limited
(Previously called PetroNor E&P Ltd)
Australia
Australia
100%
100%
PetroNor E&P Ltd
Cyprus
Cyprus
100%
100%
PetroNor E&P Services AS
Norway
Norway
100%
100%
PetroNor E&P Services Ltd
United Kingdom
United Kingdom
100%
100%
PetroNor E&P AB
Sweden
Guinea-Bissau
100%
100%
PetroNor E&P Ltd
Nigeria
Nigeria
100%
100%
PetroNor E&P Gambia Ltd
Cayman Islands
The Gambia
100%
100%
Hemla Africa Holding AS
Norway
Norway
100%
100%
Hemla E&P Congo SA
Congo
Congo
84.15%
84.15%
African Petroleum Corporation Ltd
Cayman Islands
United Kingdom
100%
100%
African Petroleum Senegal Ltd
Cayman Islands
Senegal
90%
90%
African Petroleum Senegal SAU
Senegal
Senegal
90%
90%
Aje Production AS
Norway
Norway
100%
100%
Aje Services Holding BV (Previously called
Pan-Petroleum Services Holding BV)
Netherlands
Netherlands
100%
-
Aje Nigeria Holding BV (Previously called
Pan-Petroleum Services Holding BV)
Netherlands
Netherlands
100%
-
Aje Production Ltd (Previously called
Pan-Petroleum Aje Ltd)
Nigeria
Nigeria
100%
-
Material non-controlling interests
Set out below is summarised financial information for the
subsidiary that has non-controlling interests that are material
to the group. The amounts disclosed for the subsidiary are
before inter-company eliminations.
PETRONOR E&P ASA
ANNUAL REPORT 2022
86
Financial statements
Summarised statement of financial position
Hemla E&P Congo SA
Amounts in USD thousand
2022
2021
Current asset
28,363
37,936
Current liabilities
11,210
31,130
Current net assets
17,153
6,806
Non-current assets
98,876
69,577
Non-current liabilities
20,804
16,302
Non-current net assets/(liabilities)
78,072
53,275
Net assets
95,225
60,081
Accumulated NCI
16,091
10,215
Summarised statement of comprehensive income
Hemla E&P Congo SA
Amounts in USD thousand
2022
2021
Revenue
146,067
106,464
Profit for the period
45,503
31,685
Other comprehensive income
-
-
Total comprehensive income for the year
45,503
31,685
Profit allocated to NCI
7,461
8,714
Dividends paid to NCI
1,585
-
Summarised cash flows
Hemla E&P Congo SA
Amounts in USD thousand
2022
2021
Cash flows from operating activities
41,847
39,360
Cash flows from investing activities
(38,349)
(25,331)
Cash flows from financing activities
(10,028)
(6,047)
Net (decrease)/increase in cash and cash equivalents
(6,530)
8,312
25B.
BOARD AND KEY MANAGEMENT PERSONNEL
REMUNERATION
Key management personnel are those persons having
authority and responsibility for planning, directing, and
controlling the activities of the group, including the directors
listed on page 47, and the following other key personnel:
Jens Pace
Interim chief executive officer
Claus Frimann-Dahl
Chief technical officer
Emad Sultan
Strategy and contracts manager
Michael Barrett
Exploration manager
Chris Butler
Group financial controller
PETRONOR E&P ASA
ANNUAL REPORT 2022
87
Financial statements
As at the approval date of this report the base salary and fees
for the following members of key management is as follows:
Individual
Title
Group entity
Base salary and fees
/per annum
Total base salary and
fees USD equivalent
E Alhomouz
Chair
PetroNor E&P Services AS
1
USD 174,000
294,000
Hemla E&P Congo SA
USD 120,000
J Iskander
Director
2
Nil
Nil
I Tybring-Gjedde
Director
PetroNor E&P Services AS
NOK 250,000
26,000
G Kielland
Director
PetroNor E&P Services AS
NOK 250,000
26,000
J Norman-Hansen
Director
PetroNor E&P Services AS
NOK 250,000
26,000
A Fawzi
Director
PetroNor E&P Services AS
NOK 250,000
26,000
J Pace
Interim CEO
PetroNor E&P Services AS
GBP 360,000
443,000
E Sultan
Strategy & contracts manager
PetroNor E&P Services AS
USD 240,000
240,000
C Frimann-Dahl
Chief technical officer
PetroNor E&P Services AS
NOK 2,500,000
253,000
M Barrett
Exploration officer
PetroNor E&P Services Ltd
GBP 215,000
264,000
C Butler
Group financial controller
PetroNor E&P Services Ltd
GBP 140,000
238,000
Hemla E&P Congo SA
USD 66,000
1)
Fees are charged by related party Petromal LLC and are not paid to the individual; above figures represent the company’s fair value estimate of associated
costs for the individual’s services.
2)
J Iskander elected not to be remunerated, as he is not considered an independent director due to connections to the largest company shareholder.
FX rates used:
NOK 1.00 : USD 0.1038
|
GBP 1.00 : USD 1.23
Remuneration of board and key management 2022
Amounts in USD
Designation
Salary and
fees
Bonus
Other cash
benefits
Post-employment
benefits
Total
E Alhomouz
1
Chair
294,000
-
-
-
294,000
J Iskander
Director
-
-
-
-
-
I Smines Tybring
Gjedde
Director
34,598
-
-
-
34,598
G Kielland
Director
34,598
-
-
-
34,598
A Neuling
2
Director
5,728
-
-
-
5,728
R Steinepreis
2
Director
5,728
-
-
-
5,728
J Pace
Interim CEO
443,500
-
-
-
443,500
C Frimann-Dahl
Chief technical officer
253,080
-
769
20,524
274,373
M Barrett
Exploration officer
279,445
-
884
2,080
282,409
C Butler
Group financial controller
173,059
92,177
5,747
17,306
288,289
E Sultan
Strategy & contracts manager
233,000
-
-
-
233,000
A Hicks
2
Company secretary
3,598
-
-
-
3,598
Total
1,760,334
92,177
7,400
39,910
1,899,821
1)
USD 174,000 of the fees above is not paid to the individual, these fees charged on an arms-length basis are included in a monthly lump sum charged by
related party Petromal LLC, above figures represent the company’s fair value estimate of associated costs for the individual’s services.
2)
Indviduals are directors or management of the previous Australian top company, the above figure represents their remuneration up until the group
restructure on 24 February 2022.
PETRONOR E&P ASA
ANNUAL REPORT 2022
88
Financial statements
Remuneration of of board and key management 2021
Amounts in USD
Designation
Salary and
fees
Bonus
Other cash
benefits
Post-
employment
benefits
Total
E Alhomouz
1
Chair
294,000
-
-
-
294,000
J Iskander
Director
-
-
-
-
-
Jens Pace
2
Director & Interim CEO
47,909
-
-
-
47,909
I Smines Tybring Gjedde
Director
38,001
-
-
-
38,001
G Kielland
3
Director
25,994
-
-
-
25,994
A Neuling
Director
26,787
-
-
-
26,787
R Steinepreis
Director
32,546
-
-
-
32,546
G Ludvigsen
4
Director & business development manager
385,210
-
110
-
385,320
K Søvold
5
Exec director & CEO
354,118
-
821
21,721
376,659
C Frimann-Dahl
Chief technical officer
221,648
-
780
20,732
243,160
M Barrett
Exploration officer
296,475
-
2,598
-
299,073
C Butler
Group financial controller
174,825
-
3,724
17,483
196,032
E Sultan
Strategy & contracts manager
3
168,000
-
-
-
168,000
A Hicks
Company secretary
27,035
-
-
-
27,035
TOTAL
2,092,548
-
8,033
59,935
2,160,516
1)
USD 174,000 of salary and fees is not paid to the individual, these fees charged on an arms-length basis are included in a monthly lump sum charged by
related party Petromal LLC, above figures represent the company’s fair value estimate of associated costs for the individual’s services.
2)
On 16 December 2021, Mr Pace was appointed as interim CEO and subsequently resigned as a board member.
3)
Appointed 1 February 2021
4)
Following his resignation as a board member on 1 February 2021, G Ludvigsen continued to provide services charged on an arms-length by a related party
Hagan AS.
5) From 16 December 2021, individuals no longer considered key management personnel as decision making responsibilities removed.
Share holdings by directors and other key management personnel
Balance
1 January 2022
Shares
purchased
Granted as
remuneration
Net change
other
Balance
31 December 2022
J Pace
1,498,858
-
-
(33,334)
1,465,524
M Barrett
1,151,687
-
-
-
1,151,667
C Butler
234,316
-
-
-
234,296
C Frimann-Dahl
604,545
-
-
-
604,545
Total
3,498,406
-
-
(33,334)
3,456,072
As at 31 December 2022, Eyas Alhomouz held no shares
personally but holds influence over 481,481,666 shares (2021:
481,481,666 shares) as the CEO of significant shareholder
Petromal LLC. 109,520,419 of the shares held by Petromal LLC
are recorded in the name of nominee company, Clearstream
Banking S.A. on behalf of Petromal LLC.
Other directors and key management not included in the
above table held no shares during the current year.
No warrants or options were held by directors or key
management personnel during the current year.
25C.
SIGNIFICANT SHAREHOLDERS
Shareholder
Place of incorporation
Ownership
31 December 2022
Ownership
31 December 2021
Petromal LLC – Sole Proprietorship LLC
UAE
33.82%
36.28%
Symero Ltd
Cyprus
9.75%
10.47%
NOR Energy AS
Norway
9.49%
10.45%
Ambolt Invest AS
Norway
6.15%
6.61%
Gulshagen III AS
Norway
3.16%
3.39%
Gulshagen IV AS
Norway
3.16%
3.39%
PETRONOR E&P ASA
ANNUAL REPORT 2022
89
Financial statements
Symero Ltd is a company owned by NOR Energy AS, which
in turn is controlled jointly by former key management of
PetroNor, Knut Søvold, and Gerhard Ludvigsen.
Gulshagen III AS and Gulshagen IV AS are also controlled by
Knut Søvold.
Ambolt Invest AS is a company controlled by Jarle Norman-
Hansen who was appointed as a board member on 26 January
2023.
25D.
TRANSACTIONS AND PERIOD-END BALANCES WITH RELATED PARTIES
Transactions with related parties included in the consolidated statement of comprehensive income:
Amounts in USD thousand
2022
2021
Petromal – Sole Proprietorship LLC
289
554
Administrative expenses
289
554
Petromal LLC is the largest shareholder in the company and
since 2017 has had an agreement to provide technical and
project management services to the PetroNor group.
Balances due from and due to related parties disclosed in the consolidated statement of financial position:
Amounts in USD thousand
2022
2021
Other payable to NOR Energy AS
1,283
2,136
Other payable to Petromal – Sole Proprietorship LLC
736
1,281
Other payable to Symero Ltd
-
32
Total payables to related parties (note 19)
2,019
3,449
Loan payable Symero Ltd
-
3,912
Loan payable to related parties (note 20)
-
3,912
Amounts due from / to related parties included in the
consolidated statement of financial position (other than the
loans to related parties) are interest-free and have no fixed
repayment terms. The outstanding payable balances as at 31
December 2022 were settled during Q1 2023.
Note 26
Acquisition of subsidiaries
On 13 July 2022, PetroNor completed the corporate acquisition
of both Pan-Petroleum Nigeria Holding BV and Pan-Petroleum
Services Holdings BV, who together hold 100 per cent of the
shares in Pan-Petroleum AJE Ltd, from Panoro Energy ASA. The
transaction has allowed PetroNor to assume a 6.502 per cent
participating interest, 16.255 per cent cost bearing interest
and economic interest of 12.1913 per cent in Offshore Mining
Licence no.113 (OML113).
Pan-Petroleum AJE Ltd participates in the exploration and
production of hydrocarbons in the Aje oil and gas field.
Under IFRS 3 – Business combinations, an acquirer has a
maximum of twelve months from the date of acquisition
to finalise the acquisition accounting. The adjustment
period ends when the acquirer has gathered all necessary
information, subject to the twelve-month maximum. The
purchase price allocation is still subject to finalisation pending
receipt of further accounting data from counterparties.
The group has assessed and determined the transaction is a
business combination under IFRS 3 – Business combinations.
Information is respect of the assets and liabilities acquired and
the fair value allocations to the assets is as follows:
PETRONOR E&P ASA
ANNUAL REPORT 2022
90
Financial statements
ASSETS ACQUIRED
Amounts in USD thousand
Current assets
Trade and other receivables
5
Cash and bank balances
52
57
Non current assets
Intangible assets
34,299
Production assets and equipment
926
Sum
35,225
Total assets
35,282
Current liabilities
Trade and other payables
(2,745)
Non-current liabilities
Provisions
(3,768)
Deferred tax liability
(9,031)
Other payables
(8,738)
Sum
(21,537)
Total liabilities
(24,282)
Net assets
11,000
Satisfied by:
Consideration shares
10,000
Assignment fee
1,000
Total
11,000
The assets acquired have been acquired with the intention
to redevelop the field. The immediate effect on the income
statement will not be material to the group. In the current
period post acquisition, the charge to the income statement
was USD 249,000.
The upfront consideration for the transaction was USD 10
million paid via the allotment and issue of 96,577,537 new
PetroNor shares.
The volume of PetroNor shares has been
determined with reference to the contractually determined
30-day volume weighted average price (“VWAP”) of PetroNor
shares listed on the Oslo Børs. The calculation was based on
30 business trading days between 2 May 2022 and 8 July 2022.
An additional consideration of USD 0.10 per 1,000 cubic feet
of the AJE Natural Gas Sales Volume is to be paid to Panoro
Energy ASA once the conditions stipulated within the SPA are
met. This conditional consideration shall not exceed USD 16.67
million.
Non-cash adjustment
The consolidated statement of cash flows includes a non-
cash adjustment for the corporate transaction to acquire the
interest in OML 113. The acquisition of the subsidiaries has
not resulted in cash flows and therefore the statement of cash
flows has been adjusted as follows:
For the year ended 31 December 2022:
Amounts in USD thousand
Purchases of property, plant, and equipment
925
Intangible assets
33,299
Trade and other payables
(2,630)
Other non-current payables
(8,738)
Provisions
(3,769)
Deferred tax liability
(9,031)
Issue of share capital
(10,052)
The goodwill recognised in the transaction of USD 9 million
is classified as technical goodwill due to the requirement
to recognise deferred taxes for the temporary differences
between the assigned values and the tax bases of assets
acquired and liabilities assumed in a business combination.
A provision has been made in accordance with IAS 12 for
deferred tax corresponding to the tax rate (50 per cent tax
oil) multiplied by the difference between the fair values of the
acquired assets and the transferred tax depreciation basis.
The offsetting entry to this deferred tax is technical goodwill.
This goodwill is not deductible for tax purposes.
PETRONOR E&P ASA
ANNUAL REPORT 2022
91
Financial statements
Note 27
Risk management
The group’s principal financial liabilities comprise accounts
payable and amounts due to related parties. The main
purpose of these financial instruments is to manage short-
term cash flow and raise finance for the group’s capital
expenditure program. The group has various financial assets
such as accounts receivable and cash.
It is, and has been throughout the year ending 31 December
2022, the group’s policy that no speculative trading in
derivatives shall be undertaken.
The main risks that could adversely affect the group’s
financial assets, liabilities or future cash flows are credit risk,
liquidity risk, interest rate risk and foreign currency risk. The
management reviews and agrees policies for managing each of
these risks which are summarised below.
The following discussion also includes a sensitivity analysis
that is intended to illustrate the sensitivity to changes in the
market variables on the group’s financial instruments and
shows the impact on profit or loss and shareholders’ equity,
where applicable. Financial instruments affected by market
risk include accounts receivable, accounts payable and
accrued liabilities.
The sensitivity has been prepared for periods ending 31
December 2022 using the amounts of debt and other financial
assets and liabilities held as at those reporting dates.
CREDIT RISK
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss to
the group. As at 31 December 2022, the group’s maximum
exposure to credit risk without taking into account any
collateral held or other credit enhancements, which will cause
a financial loss to the group due to failure to discharge an
obligation by the counterparties and financial guarantees
provided by the group arises from the carrying amount of
the respective recognised financial assets as stated in the
statement of financial position.
To minimise credit risk, the group has tasked its management
to develop and maintain the group’s credit risk gradings
to categorise exposures according to their degree of risk
of default. The credit rating information is supplied by
independent rating agencies where available and, if not
available, the management uses other publicly available
financial information and the group’s own trading records
to rate its major customers and other debtors. The group’s
exposure and the credit ratings of its counterparties
are continuously monitored, and the aggregate value
of transactions concluded is spread amongst approved
counterparties.
The company’s current credit risk grading framework
comprises the following categories:
Category
Description
Basis for recognising expected credit losses
Performing
The counterparty has a low risk of default and does
not have any past-due amounts
12-month ECL
Doubtful
Amount is >30 days past due or there has been a
significant increase in credit risk since initial recognition
Lifetime ECL – not credit-impaired
In default
Amount is >90 days past due or there is evidence
indicating the asset is credit-impaired
Lifetime ECL – credit-impaired
Write-off
There is evidence indicating that the debtor is in
severe financial difficulty and the company has no
realistic prospect of recovery
Amount is written off
The group’s principal customers are substantial oil and gas
companies and as such credit risk is considered to be low.
There is no history of credit loss, non-payment or default. The
risk on liquid funds is limited because the counterparties are
banks with high credit ratings. The asset retirement obligation
cash is held in an Escrow bank account managed by the
operator.
PETRONOR E&P ASA
ANNUAL REPORT 2022
92
Financial statements
The tables below detail the credit quality of the company’s
financial assets as well as the company’s maximum exposure
to credit risk by credit risk rating grades.
Amounts in USD thousand
Note
External
credit
rating
Internal
credit
rating
12-month or
lifetime ECL
Gross
carrying
amount
Loss
allowance
Net
carrying
amount
31 December 2022
Trade receivables
13
N/a
(i)
Lifetime ECL
1,174
-
1,174
Due from related parties
13, 25D
N/a
-
Lifetime ECL
-
-
-
Advance against decommissioning cost
13
N/a
-
Lifetime ECL
29,432
-
29,432
Cash and cash equivalents
14
Aa3/B
N/a
12-month ECL
24,816
-
24,816
31 December 2021
Trade receivables
13
N/a
(i)
Lifetime ECL
13,431
-
13,431
Due from related parties
13, 25D
N/a
-
Lifetime ECL
-
-
-
Advance against decommissioning cost
13
N/a
-
Lifetime ECL
26,837
-
26,837
Cash and cash equivalents
14
Aa3/B
N/a
12-month ECL
31,755
-
31,755
(i) For trade receivables and amounts due from related parties, the group has applied the simplified approach in IFRS 9 to measure the loss allowance at
lifetime ECL. The expected credit losses are estimated using a provision matrix by reference to past default experience of the debtor and an analysis of the
debtor’s current financial position, adjusted for factors that are specific to the debtors, general economic conditions of the industry in which the debtors
operate and an assessment of both the current as well as the forecast direction of conditions at the reporting date.
LIQUIDITY RISK
The group seeks to limit its liquidity risk by ensuring financial
support is available from the shareholders. The group’s terms
of sales requires amounts to be paid within 45 to 60 days of
the date of approval of progress billings. Trade payables are
normally settled within 90 to 120 days of the date of receipt of
invoice.
The table below summarises the maturity profile of the
group’s financial liabilities at 31 December 2022 based on
contractual undiscounted payments.
Amounts in USD thousand
Note
On demand
Less than
1 month
Between
1 and 3
months
Between
3 months
and 1 year
More than
1 year
Total
31 December 2022
Trade accounts payable
19
-
18,732
-
-
-
18,732
Amounts due to related parties
25D
2,019
-
-
-
-
2,019
Loan payable
20
-
-
1,375
4,125
5,500
11,000
Other payable
19
-
-
-
-
8,738
8,738
Total
2,019
18,732
1,375
4,125
14,238
40,489
Amounts in USD thousand
Note
On demand
Less than
1 month
Between
1 and 3
months
Between
3 months
and 1 year
More than
1 year
Total
31 December 2021
Trade accounts payable
19
21,944
-
5
65
22,014
Amounts due to related parties
25D
3,449
-
-
-
-
3,449
Loan payable
20
-
-
2,500
10,579
-
13,079
Other payable
19
-
-
-
-
-
-
Total
3,449
21,944
2,500
10,584
65
38,542
The company had USD 24.8 million (2021: 31.8 million) in
unrestricted cash as of 31 December 2022. Should additional
funding be required in the future for additional capital
expenditure for new development phases or working capital
requirements, the company has various alternatives available
which it can explore to fulfil such additional requirements.
The options include, amongst others, debt financing, offtake
prepayment structures. As a result, the financial statements
have been prepared under the assumption of going concern
and realisation of assets and settlement of debt in normal
operations.
PETRONOR E&P ASA
ANNUAL REPORT 2022
93
Financial statements
As a result of the acquisition of the interest in the OML 113
licence, PetroNor has inherited an other payable of USD 8.7
million which relates to costs not yet agreed. The final amount
is not expected to be settled within the next twelve months,
therefore this has been classified as a non-current liability.
INTEREST RATE RISK
The group is exposed to interest rate risk on its interest-
bearing assets and liabilities and seeks to limit this risk by
obtaining favourable interest rates.
31 December 2022
31 December 2021
Amounts in USD thousand
+150bp
-150bp
+150bp
-150bp
Loans payable
(165)
165
(196)
196
The new facility put in place does not include the oil pricing
sensitivity previously applied thus providing more certainty to
interest costs.
CURRENCY RISK
The group operates internationally and is exposed to risk
arising from various currency exposures, primarily with
respect to the Norwegian Kroner (NOK), and the Great British
Pound (GBP). The group has transactional currency exposures.
Such exposure arises from sales or purchases in currencies
other than the respective functional currency.
The group reports its consolidated results in USD; any
change in exchange rates between its operating subsidiaries’
functional currencies and the USD affects its consolidated
statement of comprehensive income and statement of
financial position when the results of those operating
subsidiaries are translated into USD for reporting purposes.
Group companies are required to manage their foreign
exchange risk against their functional currency.
A 20 per cent strengthening or weakening of the USD against
the following currencies at 31 December 2022 would have
increased/(decreased) equity and profit or loss by the amounts
shown below.
The group’s assessment of what a reasonable potential change
in foreign currencies that it is currently exposed to have been
changed as a result of the changes observed in the world
financial markets. This hypothetical analysis assumes that all
other variables, including interest rates and commodity prices,
remain constant.
31 December 2022
31 December 2021
Amounts in USD thousand
+20%
-20%
+20%
-20%
USD vs NOK
Cash
106
(107)
1,040
(1,044)
Receivables
260
(260)
-
-
Payables
(423)
423
(92)
92
Total
(57)
57
948
(952)
USD vs GBP
Cash
(17)
17
3
(3)
Receivables
(3)
3
8
(8)
Payables
7
(7)
(6)
6
Total
(13)
13
5
5
CAPITAL RISK
The primary objective of the group’s capital management is
to continuously evaluate measures to strengthen its financial
basis and to ensure that the group is fully funded for its
committed 2023 activities. The group manages its capital
structure and makes adjustments to it in light of changes
in economic conditions. In order to maintain or change the
capital structure, the group may adjust the amount of dividend
payments to shareholders, return capital to shareholders or
issue new shares.
The group is continuously evaluating the capital structure, with
the aim of having an optimal mix of equity and debt capital to
reduce the group’s cost of capital and looking at avenues to
procure capital in the forthcoming years.
PETRONOR E&P ASA
ANNUAL REPORT 2022
94
Financial statements
Note 28
Financial instruments
Financial instruments comprise financial assets and financial
liabilities.
Financial assets consist of bank balances and cash, amounts
due from related parties and trade and some other
receivables. Financial liabilities consist of amounts due to
related parties, loans payable, trade account payables and
some other liabilities.
Fair value through
profit or loss
Amortised
cost
Fair value through other
comprehensive income
Amounts in USD thousand
2022
2021
2022
2021
2022
2021
Financial assets
Cash and cash equivalents
-
-
24,816
31,755
-
-
Trade and other receivables
-
-
1,171
13,820
-
-
Other receivables
-
-
29,432
26,837
-
-
Total
-
-
55,419
72,412
-
-
Financial Liabilities
Trade and other payables
-
-
29,489
30,055
-
-
Loans and borrowings
-
-
11,000
13,079
-
-
Total
-
-
40,489
43,134
-
-
The fair values of the group's financial instruments are not
materially different from their carrying amounts at the
reporting date largely due to the short-term maturities of
these instruments.
Note 29
Commitments and contingencies
COMMITMENTS
Production asset commitments
As at 31 December 2022, the group had approved the budget
for PNGF Sud operations in Congo that included planned capex
expenditure for the coming year of USD 45.6 million (2021 USD
50.6 million) representing HEPCO's equity interest funding
commitment in the licence.
Exploration commitments
The company has entered into obligations in respect of
its exploration projects. Outlined below are the minimum
expenditures required as at 31 December:
Amounts in USD thousand
2022
2021
Within one year
1
40,000
40,000
1)
The commitment in Senegal includes USD 40 million for an exploration
well in each licence, however this assumes that the company is successful
in retaining the legal title for these licences and that the company then
drills these wells with 90 per cent equity.
CONTINGENCIES
In December 2021, the National Authority for Investigation
and Prosecution of Economic and Environmental Crime in
Norway (Økokrim) initiated an investigation into allegations of
corruption and brought criminal charges against individuals
associated with the company. Økokirm has confirmed that
neither PetroNor nor any of its subsidiaries has been charged.
The US Department of Justice also began its own investigation
into the allegations based on information received from
Økokrim.
To mitigate potential corporate liability risks, the board has
taken various remediation steps, as outlined in the director’s
report, including obtaining independent legal advice and
implementing a compliance action plan. Despite the ongoing
investigations, the company has continued to operate
effectively, but has incurred costs in addressing this issue
and fully cooperating with the investigating authorities.
The company is not aware of the status or duration of
the investigations into the individuals involved, and the
uncertainty surrounding the outcome could potentially impact
the group’s ability to conduct transactions with both new and
existing partners.
PETRONOR E&P ASA
ANNUAL REPORT 2022
95
Financial statements
As part of the transaction to acquire the interest in OML 113
conditional consideration has been assessed as a potential
contingency to the group. An additional consideration
of USD 0.10 per 1,000 cubic feet of the AJE Natural Gas
Sales Volume is to be paid to Panoro Energy ASA once the
conditions stipulated within the SPA are met. This conditional
consideration shall not exceed USD 16.67 million.
Note 30
Events subsequent to reporting date
On 26 January 2023, two new directors were appointed to the
board. The appointments were pursuant to recommendations
from the nomination committee. The two new directors, Mrs.
Azza Fawzi and Mr. Jarle Norman-Hansen, take the company’s
board to a total of six directors.
In the Official Gazette of Guinea-Bissau (Boletim Oficial 45), it
was announced that following the withdrawal of FAR Limited
from the Sinapa and Esperança licences offshore Guinea-
Bissau their equity interest had been awarded to PetroNor.
At the start of February, 317,904 bbls of oil were lifted from
the Djeno Terminal, this sale generated a cash inflow of USD
24.1 million. On 1 April 2023, a further 260,362 bbls of oil were
lifted generating USD 21.2 million of cash inflow.
In a CPR update prepared by AGR Petroleum Services AS on
the Company’s PNGF Sud assets, the end of year 2P reserves
were updated to 18.5 Mmbbl with 2C reserves to 23.5 Mmbbl.
Except for the above, the company has not identified any
events with significant accounting impacts that have occurred
between the end of the reporting period and the date of this
report.
Note 31
Summary of accounting policies
Accounting policies are selected and applied in a manner
which ensures that the resulting financial information satisfies
the concepts of relevance and reliability, thereby ensuring that
the substance of the underlying transactions or other events
is reported.
The following is a summary of the material accounting policies
adopted by the group in the preparation of the consolidated
financial statements. The accounting policies have been
consistently applied, unless otherwise stated.
31A.
ADOPTION OF NEW AND REVISED ACCOUNTING
STANDARDS
IASB has issued several amendments to standards or
interpretations to standards effective as of 1 January 2022.
PetroNor have adopted these standards in the financial year,
the impacts were not material to PetroNor’s consolidated
financial statements upon adoption.
Impacts of other standards and amendments to standards,
and interpretations of standards, issued but not yet effective
are under assessment by PetroNor.
31B.
CONSOLIDATION
The consolidated financial statements comprise the financial
statements of PetroNor E&P ASA (“the company”, formerly
PetroNor E&P Ltd) and its subsidiaries for the year ended 31
December 2022 (together the group).
An entity has been assessed as being controlled by the group
when the groups is exposed, or has the rights, to variable
returns from its involvement with the entity and has the
ability to affect those returns through its power over the
entity. Specifically, the group controls an entity if and only if
the group has:
■
Power over the entity (i.e., existing rights that give it the
current ability to direct the relevant activities of the entity)
■
Exposure, or rights, to variable returns from its involvement
with the entity, and
■
The ability to use its power over the entity to affect its
returns
When the group has less than a majority of the voting or
similar rights of an entity, the group considers all relevant facts
and circumstances in assessing whether it has power over an
entity, including:
■
The contractual arrangement with the other vote holders of
the entity
■
Rights arising from other contractual arrangements
■
The group’s voting rights and potential voting rights
The group reassesses whether or not it controls an entity if
facts and circumstances indicate that there are changes to
one or more of the three elements of control. Consolidation
of a subsidiary begins when the group obtains control over
the subsidiary and ceases when the group loses control of
the subsidiary. Business combinations are accounted for by
using the acquisition method. Assets, liabilities, income, and
expenses of a subsidiary acquired or disposed of during the
year are included in the statement of comprehensive income
from the date the group gains control until the date the group
ceases to control the subsidiary.
Profit or loss and each component of other comprehensive
income (OCI) are attributed to the equity holders of the parent
of the group and to the non-controlling interests, even if this
results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial
statements of subsidiaries to bring their accounting policies
PETRONOR E&P ASA
ANNUAL REPORT 2022
96
Financial statements
into line with the group’s accounting policies. All intra-group
assets and liabilities, equity, income, expenses, and cash flows
relating to transactions between members of the group are
eliminated in full on consolidation.
A change in the ownership interest of a subsidiary, without a
loss of control, is accounted for as an equity transaction.
If the group loses control over a subsidiary, it:
■
Derecognises the assets (including goodwill) and liabilities of
the subsidiary.
■
Derecognises the carrying amount of any non-controlling
interests
■
Derecognises the cumulative translation differences
recorded in equity
■
Recognises the fair value of the consideration received
■
Recognises the fair value of any investment retained
■
Recognises any surplus or deficit in profit or loss
■
Reclassifies the parent’s share of components previously
recognised in OCI to profit or loss or retained earnings, as
appropriate, as would be required if the group had directly
disposed of the related assets or liabilities.
Joint operations
A joint arrangement is a joint operation whereby the group and
the other parties that have joint control over the arrangement,
have contractual rights to the assets and obligation for the
liabilities relating to the arrangement. All decisions about the
relevant activities require unanimous consent.
When assessing if a joint arrangement is joint operation,
the group assesses the structure of the arrangement, the
legal form, the contractual agreement and other facts and
circumstances.
The group recognises its assets, liabilities, revenue and
expenses and its relative share of assets, liabilities, revenue,
and expenses of the joint operation.
When the group enters into transactions with a joint operation
in which it is a joint operator, the group recognises gains and
losses resulting from such a transaction only to the extent of
the other parties’ interests in the joint operation.
31C.
SEGMENT REPORTING
An operating segment is a component of an entity that
engages in business activities from which it may earn revenues
and incur expenses (including revenues and expenses relating
to transactions with other components of the same entity),
whose operating results are regularly reviewed by the entity’s
chief operating decision-makers to make decisions about
resources to be allocated to the segments and assess their
performance and for which discrete financial information is
available. This includes start-up operations which are yet to
earn revenues.
Operating segments have been identified based on the
information available to chief operating decision-makers –
being the board and the executive management team.
Information about other business activities and operating
segments that are below the quantitative criteria are
combined and disclosed in a separate category called “all other
segments”.
31D.
FOREIGN CURRENCY TRANSLATION
Functional and presentation currency
The company has applied United States Dollars, being the
functional currency of all major subsidiaries in the group, as
its presentation currency. Where the functional currencies
of entities within the consolidated group differ from United
States Dollars, they have been translated into United States
Dollars. The functional currency of PetroNor E&P ASA is
Norwegian Kroner.
Transactions and balances
Transactions in foreign currencies are initially recorded in the
functional currency by applying the exchange rates ruling at
the date of the transaction. Monetary assets and liabilities
denominated in foreign currencies are retranslated at the
rate of exchange ruling at the reporting date and any gains or
losses are recognised in the income statement.
Non-monetary items that are measured in terms of historical
cost in the foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary
items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair
value was determined.
Translation of group companies' functional currency to
presentation currency
On consolidation, the assets and liabilities of foreign
operations are translated into United States Dollars at the rate
of exchange prevailing at the reporting date and their income
and expenditure are translated at exchange rates prevailing
at the dates of the transactions. The exchange differences
arising on translation for consolidation are recognised in other
comprehensive income. On disposal of a foreign operation, the
component of other comprehensive income relating to that
particular foreign operation is recognised in profit or loss.
31E.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, deposits held
at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank
overdrafts. Bank overdrafts are shown within short-term
borrowings in current liabilities on the Statement of Financial
Position.
31F.
TRADE RECEIVABLES
Trade receivables are amounts due from customers for goods
sold or services performed in the ordinary course of business.
They are generally due for settlement within 30 to 90 days
and therefore are all classified as current. Trade receivables
are recognised initially at the amount of consideration that
is unconditional unless they contain significant financing
components, when they are recognised at fair value. The
group holds the trade receivables with the objective to collect
the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest
method.
Trade receivables are written off when there is no reasonable
expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure
of a debtor to engage in a repayment plan with the group, and
a failure to make contractual payments for a period of greater
than 120 days past due.
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Impairment losses on trade receivables and contract assets
are presented as net impairment losses within operating
profit. Subsequent recoveries of amounts previously written
off are credited against the same line item.
31G.
INVENTORY
The crude oil inventory and the material and supplies
inventory are valued at the lower of cost and net realisable
value. Cost is determined using the weighted average method.
Net realisable value is the estimated selling price, less
applicable selling expenses. The cost of inventory includes all
costs related to bringing the inventory to its current condition,
including processing costs, labour costs, supplies, direct
and allocated indirect operating overhead and depreciation
expense, where applicable, including allocation of fixed and
variable costs to inventory.
31H.
TANGIBLE ASSETS
Property, plant, and equipment
Oil & gas production assets
Oil and gas production assets are aggregated exploration and
evaluation tangible assets and development expenditures
associated with the production of proved reserves.
The cost of development and production assets also includes
the cost of acquisitions and purchases of such assets, directly
attributable overheads and the cost of recognising provisions
for future restoration and decommissioning.
Where major and identifiable parts of the production assets
have different useful lives, they are accounted for as separate
items of property, plant, and equipment. Costs of minor
repairs and maintenance are expensed as incurred. Oil and
gas production assets have a finite life.
Depreciation
Oil and gas properties are depreciated using the unit-of-
production method. Unit of production rates are based on 1P
proved reserves, which are oil, gas and other mineral reserves
estimated to be recovered from existing facilities using current
operating methods. Oil and gas volumes are considered
produced once they have been measured through meters at
custody transfer or sales transaction points at the outlet valve
on the field storage tank.
Field infrastructure exceeding beyond the life of the field is
depreciated over the useful life of the infrastructure using a
straight-line method.
Property, plant, and equipment not associated with
exploration and production activities are carried at cost less
accumulated depreciation. These assets are also evaluated for
impairment. Depreciation of other assets is calculated on a
straight-line basis as follows:
Computer equipment
20 – 33.33%
Furniture, fixtures, & fittings
10 – 33.33%
Motor vehicles
20%
31I.
INTANGIBLE ASSETS
Exploration and evaluation activity involves the search for
hydrocarbon resources, the determination of technical
feasibility and the assessment of commercial viability of an
identified resource. For each area of interest, expenditure
incurred in the acquisition of rights to explore and all costs
directly associated with holding the licence such as rental,
training and corporate and social responsibility are capitalised
as exploration and evaluation intangible assets. Signature
bonuses required by licence agreements are capitalised as
exploration and evaluation intangible assets. Other costs
directly associated with the licence are expensed as incurred.
Exploration, evaluation, and development expenditure is
recorded at historical cost and allocated to cost pools on
an area of interest. Expenditure on an area of interest is
capitalised and carried forward where rights to tenure of the
area of interest are current and:
■
it is expected to be recouped through successful
development and exploitation of the area of interest or
alternatively by its sale; or
■
exploration and evaluation activities are continuing in
an area of interest but at reporting date have not yet
reached a stage which permits a reasonable assessment
of the existence or otherwise of economically recoverable
reserves.
Accumulated costs in respect of areas of interest which are
abandoned are written off in full against profit in the period in
which the decision to abandon the area is made.
Projects are advanced to development status when it is
expected that further expenditure can be recouped through
sale or successful development and exploitation of the area of
interest.
All capitalised costs are subject to commercial and
management review, as well as review for indicators of
impairment at least once a year. This is to confirm the
continued intent to develop or otherwise extract value from
the discovery. When this is no longer the case, the costs are
written off through the statement of profit or loss and other
comprehensive income.
When proved reserves of oil and natural gas are identified
and development is sanctioned by management, the relevant
capitalised expenditure is first assessed for impairment and
(if required) any impairment loss is recognised, then the
remaining balance is transferred to oil and gas properties.
Proceeds from disposal or farm-out transactions of intangible
exploration assets are used to reduce the carrying amount of
the assets. When proceeds exceed the carrying amount, the
difference is recognised as a gain. When the group disposes of
its full interests, gains or losses are recognised in accordance
with the policy for recognising gains or losses on sale of plant,
property, and equipment.
Generally Intangible assets can be viewed indefinite as
they will be retained on the balance sheet until impaired or
transferred to oil and gas properties. Certain licence related
costs capitalised as intangible assets are deemed to have a
finite life and are accreted over the life of the licence area.
Depreciation
Licence related costs capitalised as Intangible assets are
depreciated using the unit-of-production method. Unit-of
production rates are based on 1P proved reserves, which are
oil, gas and other mineral reserves estimated to be recovered
from existing facilities using current operating methods. Oil
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Financial statements
and gas volumes are considered produced once they have
been measured through meters at custody transfer or sales
transaction points at the outlet valve on the field storage tank.
Technical goodwill
Technical goodwill recognised in business combinations
is allocated to each CGU for the purposes of impairment
testing. Impairment is tested on an annual basis or when
there are impairment indicators. Indicators may be specific
to an individual CGU or groups of CGUs to which the technical
goodwill is related. When conducting impairment testing,
deferred tax recognised in relation to the acquired licences
reduces the net carrying value prior to the impairment
charges.
Impairment is recognised if the recoverable amount of the
CGU (or groups of CGUs) to which the technical goodwill relates
to is less than the carrying amount.
Impairment of goodwill cannot be reversed in future periods.
31J.
BORROWING COSTS
Borrowing costs that are directly attributable to the
acquisition, construction or production of a qualifying non-
current asset are added to the cost of the asset during the
period of time that is required to complete and prepare the
asset for its intended use. Borrowing costs are capitalised to
the extent that funds are borrowed specifically for the purpose
of obtaining a qualifying asset. To the extent that funds are
borrowed generally and used for the purpose of obtaining a
qualifying asset, the amount of borrowing costs eligible for
capitalisation is determined by applying a capitalisation rate to
the expenditures on that asset. All other borrowing costs are
expensed as incurred.
31K.
REVENUE
(i)
Revenue from petroleum products
Revenue from the sale of crude oil is recognised when a
customer obtains control (“sales” or “lifting” method), normally
this is when title passes at point of delivery. Revenues from
production of oil properties are recognised based on actual
volumes lifted and sold to customers during the period.
(ii)
Other revenue
Under a production sharing contract, where the group is
required to pay profit oil tax and royalties on production
of crude oil, such payments are settled in kind (where the
government lift the crude it is entitled to). The group presents
a gross-up of the profit oil tax as an income tax expense with
a corresponding increase in oil and gas revenues and any
associated royalties are included in the cost of sales.
The group assesses whether it acts as a principal or agent in
each of its revenue arrangements. The group has concluded
that in all sales transactions it acts as a principal.
(iii)
Variable consideration
If the consideration in a contract includes a variable amount,
the group recognises this amount as revenue only to the
extent that it is highly probable that a significant reversal will
not occur in the future.
(iv)
Interest
Interest income is recognised on a time-proportional basis
using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and
allocating the interest income over the relevant period using
the effective interest rate, which is the rate that exactly
discounts the estimated future cash receipts through the
expected useful life of the financial asset to the net carrying
amount of the financial asset.
31L.
LEASES
The group as lessee
The group assesses whether contract is or contains a lease,
at inception of the contract. The group recognises a right-of-
use asset and a corresponding lease liability with respect to all
lease arrangements in which it is the lessee, except for short-
term leases (defined as leases with a lease term of 12 months
or less) and leases of low value assets. For these leases, the
group recognises the lease payments as an operating expense
on a straight-line basis over the term of the lease unless
another systematic basis is more representative of the time
pattern in which economic benefits from the leased assets are
consumed.
The lease liability is initially measured at the present value of
the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If
this rate cannot be readily determined, the group uses its
incremental borrowing rate.
Lease payments included in the measurement of the lease
liability comprise:
■
fixed lease payments (including in-substance fixed
payments), less any lease incentives;
■
variable lease payments that depend on an index or
rate, initially measured using the index or rate at the
commencement date;
■
the amount expected to be payable by the lessee under
residual value guarantees;
■
the exercise price of purchase options, if the lessee is
reasonably certain to exercise the options; and
■
payments of penalties for terminating the lease, if the lease
term reflects the exercise of an option to terminate the
lease.
The lease liability is presented as a separate line item in the
statement of financial position.
The lease liability is subsequently measured by increasing
the carrying amount to reflect interest on the lease liability
(using effective interest method) and by reducing the carrying
amount to reflect the lease payments made.
The group remeasures the lease liability (and makes a
corresponding adjustment to the related right-of-use asset)
whenever:
■
the lease term has changed or there is a change in the
assessment of exercise of a purchase option, in which case
the lease liability is remeasured by discounting the revised
lease payments using a revised discount rate.
■
the lease payments change due to changes in an index or
rate or a change in expected payment under a guaranteed
residual value, in which cases the lease liability is
remeasured by discounting the revised lease payments
using the initial discount rate (unless the lease payments
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change is due to a change in a floating interest rate, in which
case a revise discount rate is used).
■
a lease contract is modified, and the lease modification is
not accounted for as a separate lease, in which case the
lease liability is remeasured by discounting the revised lease
payments using a revised discount rate.
The group did not make any such adjustments during the
periods presented.
Right of use assets
The group measures the right-of use asset at cost, less any
accumulated depreciation and impairment losses, adjusted for
any remeasurement of lease liabilities. The cost of the right-of-
use asset comprise:
■
The amount of the initial measurement of the lease liability
recognised
■
Any lease payments made at or before the commencement
date, less any incentives received
■
Any initial direct costs incurred by the group. An estimate
of the costs to be incurred by the group in dismantling and
removing the underlying asset, restoring the site on which it
is located or restoring the underlying asset to the condition
required by the terms and conditions of the lease, unless
those costs are incurred to produce inventories.
The group applies the depreciation requirements in IAS 16
Property, Plant and Equipment in depreciating the right-of-use
asset, except that the right-of-use asset is depreciated from
the commencement date to the earlier of the lease term and
the remaining useful life of the right-of-use asset.
The group applies IAS 36 Impairment of Assets to determine
whether the right-of-use asset is impaired and to account for
any impairment loss identified.
Variable rents that do not depend on an index or rate are not
included in the measurement of the lease liability and the
right-of-use asset. The related payments are recognised as
an expense in the period in which the event or condition that
triggers those payments occurs and are included in the line
‘Administrative expenses’ in the statement of profit or loss.
31M.
TAXES
The income tax expense or benefit for the period consists of
two components: current and deferred tax.
The current income tax payable or recoverable is calculated
using the tax rates and legislation that have been enacted or
substantively enacted at year-end in each of the jurisdictions
and includes any adjustments for taxes payable or recovery in
respect of prior periods.
Deferred tax assets and liabilities are determined using
the balance sheet liability method based on temporary
differences between the carrying value of assets and liabilities
for financial reporting purposes and their tax bases. In
calculating the deferred tax assets and liabilities, the tax
rates used are those that have been enacted or substantively
enacted by year-end in each of the jurisdictions and that
are expected to apply when the assets are recovered, or the
liabilities are settled.
Revenue-based taxes
In addition to corporate income taxes, the group’s
consolidated financial statements also include and recognise
as income taxes, other types of taxes on net income such as
certain revenue-based taxes.
Production-sharing arrangements
According to the production-sharing arrangement (PSA)
in certain licences, the share of the profit oil to which the
government is entitled in any calendar year in accordance
with the PSA is deemed to include a portion representing the
corporate income tax imposed upon and due by the group.
This amount will be paid directly by the government on behalf
of the group to the appropriate tax authorities.
The income tax expense
The current income tax is calculated using the PSA, paid in
barrels and booked as income tax and also shown as revenue.
Sales tax
Revenues, expenses and assets are recognised net of the
amount of sales tax except:
Where the sales tax incurred on a purchase of assets or
services is not recoverable from the taxation authority, in
which case, the sales tax is recognised as part of the cost
of acquisition of the asset or as part of the expense item as
applicable.
Receivables and payables that are stated with the amount of
sales tax included.
The net amount of sales tax recoverable from, or payable to,
the taxation authority is included as part of receivables or
payables in the statement of financial position.
Current and deferred tax balances attributable to amounts
recognised directly in equity are also recognised directly in
equity.
31N.
EMPLOYEE BENEFITS
Provision is made for benefits accruing to employees in
respect of wages and salaries, annual leave, and long service
leave when it is probable that settlement will be required, and
they are capable of being measured reliably. Provisions made
in respect of employee benefits expected to be settled within
12 months are measured at their nominal values using the
remuneration rate expected to apply at the time of settlement.
Provisions made in respect of employee benefits, which are
not due to be settled within 12 months are determined using
the projected unit credit method.
31O.
DEFINED CONTRIBUTION PENSION PLAN
The group pays contributions into defined contribution plans.
Obligations for contributions to defined contribution pension
plans are recognised as an expense in the income statement in
the periods during which services are rendered by employees.
31P.
TRADE AND OTHER PAYABLES
Trade and other payables are carried at amortised cost and
due to their short-term nature, they are not discounted.
31Q.
PROVISIONS
(i)
General
Provisions are recognised when the group has a present
obligation (legal or constructive) as a result of a past event, it
is probable that an outflow of resources embodying economic
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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 the provision to be
reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only
when the reimbursement is virtually certain. The expense
relating to any provision is recognised through profit and loss
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 interest
expense. The present obligation under onerous contracts is
recognised as a provision.
(ii)
Decommissioning liability
A decommissioning liability is recognised when the group has
a present legal or constructive obligation as a result of past
events, and it is probable that an outflow of resources will be
required to settle the obligation, and a reliable estimate of the
amount of obligation can be made. A corresponding amount
equivalent to the obligation is also recognised as part of the
cost of the related production plant and equipment. The
amount recognised in the estimated cost of decommissioning,
discounted to its present value. Changes in the estimated
timing of decommissioning or decommissioning cost estimates
are dealt with prospectively by recording an adjustment to
the provision, and a corresponding adjustment to production
plant and equipment. The unwinding of the discount on the
decommissioning liability is included as a finance cost.
An escrow account is maintained by the operator of the PNGF
Sud licence and is governed by a joint operating agreement
and the Congolese Government rules. The group’s share, paid
against the decommissioning liability until the balance sheet
date, is classified as an advance against decommissioning
liability in current assets.
31R.
SHARE CAPITAL
Contributed equity is recognised at the fair value of the
consideration received by the group, less any capital raising
costs in relation to the issue.
Incremental costs directly attributable to the issue of new
shares or options are shown in equity as a deduction, net of
tax, from the proceeds.
31S.
DIVIDEND DISTRIBUTION
Dividend distribution to the company’s shareholders is
recognised as a liability in the group’s financial statements
in the period in which the dividends are declared and
appropriately authorised or approved by the company’s
shareholders’ general meeting. Interim dividends proposed
by the board of directors are recognised as liabilities upon
declaration.
31T.
FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a
financial asset of any one entity and a financial liability or
equity instrument of another entity.
(i)
Financial assets
Financial assets are classified, at initial recognition, as
subsequently measured at amortised cost, fair value through
other comprehensive income (OCI), and fair value through
profit or loss, as appropriate.
The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the group’s business model for managing
them. With the exception of trade receivables that do not
contain a significant financing component or for which the
group has applied the practical expedient, the group initially
measures a financial asset at its fair value plus, in the case
of financial assets not subsequently measured at fair value
through profit or loss, transaction costs that are attributable
to the acquisition of the financial asset.
In order for a financial asset to be classified and measured at
amortised cost or fair value through OCI, it needs to give rise
to cash flows that are solely payments of principal and interest
(SPPI) on the principal amount outstanding. This assessment is
referred to as the SPPI test and is performed at an instrument
level.
The group’s business model for managing financial assets
refers to how it manages its financial assets in order to
generate cash flows. The business model determines whether
cash flows will result from collecting contractual cash flows,
selling the financial assets, or both.
Purchases or sales of financial assets that require delivery
of assets within a time frame established by regulation
or convention in the marketplace (regular way trades) are
recognised on the trade date, i.e., the date that the group
commits to purchase or sell the asset.
Financial assets are recognised initially at fair value,
normally being the transaction price. In the case of financial
assets not at fair value through profit or loss, directly
attributable transaction costs are also included. The
subsequent measurement of financial assets depends on
their classification, as set out below. The group derecognizes
financial assets when the contractual rights to the cash flows
expire or the financial asset is transferred to a 3
rd
party. This
includes the derecognition of receivables for which discounting
arrangements are entered into. The classification depends on
the business model for managing the financial assets and the
contractual cash flow characteristics of the financial asset.
Subsequent measurement
■
For purposes of subsequent measurement, financial assets
are classified in 4 categories:
■
Financial assets at amortised cost (debt instruments)
■
Financial assets at fair value through OCI with recycling of
cumulative gains and losses (debt instruments)
■
Financial assets designated at fair value through OCI with no
recycling of cumulative gains and losses upon derecognition
(equity instruments)
■
Financial assets at fair value through profit or loss
■
The group has not designated any financial assets at fair
value through profit or loss.
■
Financial assets at amortised cost (debt instruments)
■
The group measures financial assets at amortised cost if
both of the following conditions are met:
■
The financial asset is held within a business model with
the objective to hold financial assets in order to collect
contractual cash flows;
And
■
The contractual terms of the financial asset give rise on
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specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding;
Financial assets at amortised cost are subsequently measured
using the effective interest (EIR) method and are subject to
impairment. Gains and losses are recognised in profit or loss
when the asset is derecognised, modified or impaired.
Cash equivalents
Cash equivalents are short-term, highly liquid investments that
are readily convertible to known amounts of cash, are subject
to insignificant risk of changes in value and generally have a
maturity of three months or less from the date of acquisition.
Cash equivalents are classified as financial assets measured at
amortised cost.
Loans granted
Loans granted that have fixed or determinable payments that
are not quoted in an active market are classified as financial
assets at amortised cost and are measured at amortised cost
using the effective interest method, less any impairment.
Interest income is recognised by applying the effective interest
rate.
Loans granted to related parties are normally interest-free
and do not have a fixed repayment structure. These loans
are classified as financial assets at amortised cost and are
measured at amortised cost using the effective interest
method, less any impairment. Effective interest rate being zero
in this case.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the group’s consolidated
statement of financial position) when:
The rights to receive cash flows from the asset have expired or
the group has transferred its rights to receive cash flows from
the asset or has assumed an obligation to pay the received
cash flows in full without material delay to a third party under
a ‘pass-through’ arrangement; and either (a) the group has
transferred substantially all the risks and rewards of the
asset, or (b) the group has neither transferred nor retained
substantially all the risks and rewards of the asset, but has
transferred control of the asset.
When the group has transferred its rights to receive cash
flows from an asset or has entered into a pass-through
arrangement, it evaluates if, and to what extent, it has retained
the risks and rewards of ownership. When it has neither
transferred nor retained substantially all of the risks and
rewards of the asset, nor transferred control of the asset,
the group continues to recognise the transferred asset to the
extent of its continuing involvement. In that case, the group
also recognises an associated liability. The transferred asset
and the associated liability are measured on a basis that
reflects the rights and obligations that the group has retained.
Impairment of financial assets
The group recognises an allowance for expected credit losses
(ECLs) for all debt instruments not held at fair value through
profit or loss. ECLs are based on the difference between the
contractual cash flows due in accordance with the contract and
all the cash flows that the group expects to receive, discounted
at an approximation of the original effective interest rate. The
expected cash flows will include cash flows from the sale of
collateral held or other credit enhancements that are integral
to the contractual terms.
ECLs are recognised in two stages. For credit exposures
for which there has not been a significant increase in credit
risk since initial recognition, ECLs are provided for credit
losses that result from default events that are possible
within the next 12 months (a 12-month ECL). For those credit
exposures for which there has been a significant increase
in credit risk since initial recognition, a loss allowance is
required for credit losses expected over the remaining life
of the exposure, irrespective of the timing of the default (a
lifetime ECL).
For trade receivables and contract assets, the group applies a
simplified approach in calculating ECLs. Therefore, the group
does not track changes in credit risk, but instead recognises a
loss allowance based on lifetime ECLs at each reporting date.
The group has established a provision matrix that is based
on its historical credit-loss experience, adjusted for forward-
looking factors specific to the debtors and the economic
environment.
The group considers a financial asset in default when
contractual payments are 90 days past due. However, in
certain cases, the group may also consider a financial asset
to be in default when internal or external information
indicates that the group is unlikely to receive the outstanding
contractual amounts in full before taking into account any
credit enhancements held by the group. A financial asset
is written off when there is no reasonable expectation of
recovering the contractual cash flows.
(ii)
Financial liabilities
Initial recognition and measurement
Financial liabilities are classified, at initial recognition, as
financial liabilities at fair value through profit or loss, financial
liabilities at amortised cost, payables, or as derivatives
designated as hedging instruments in an effective hedge, as
appropriate.
All financial liabilities are recognised initially at fair value and,
in the case of loans and borrowings and payables, net of
directly attributable transaction costs.
The group’s financial liabilities include trade and other
payables, loans and borrowings including bank overdrafts, and
derivative financial instruments.
Subsequent measurement
After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as
finance costs in the statement of profit or loss.
PETRONOR E&P ASA
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102
Financial statements
This category generally applies to interest-bearing loans and
borrowings. For more information, refer to note 20.
Payables are measure at their nominal amount when the effect
of discounting is not material.
Foreign exchange gains and losses
For financial liabilities that are denominated in a foreign
currency and are measured at amortised cost at the end of each
reporting period, the foreign exchange gains and losses are
determined based on the amortised cost of the instruments.
These foreign exchange gains and losses are recognised in
the ‘foreign exchange gain/(loss)’ line item in profit or loss for
financial liabilities that are not part of a designated hedging
relationship. For those which are designated as a hedging
instrument for a hedge of foreign currency risk foreign exchange
gains and losses are recognised in other comprehensive income
and accumulated in a separate component of equity.
The fair value of financial liabilities denominated in a foreign
currency is determined in that foreign currency and translated
at the spot rate at the end of the reporting period. For financial
liabilities that are measured as at FVTPL, the foreign exchange
component forms part of the fair value gains or losses and is
recognised in profit or loss for financial liabilities that are not
part of a designated hedging relationship.
Derecognition of financial liabilities
The group derecognises financial liabilities when, and only
when, the group’s obligations are discharged, cancelled or
have expired. The difference between the carrying amount of
the financial liability derecognised and the consideration paid
and payable is recognised in profit or loss.
When the group exchanges with the existing lender one debt
instrument into another one with substantially different
terms, such exchange is accounted for as an extinguishment
of the original financial liability and the recognition of a new
financial liability. Similarly, the group accounts for substantial
modification of terms of an existing liability or part of it as
an extinguishment of the original financial liability and the
recognition of a new liability. It is assumed that the terms are
substantially different if the discounted present value of the
cash flows under the new terms, including any fees paid net of
any fees received and discounted using the original effective
rate is at least 10 per cent different from the discounted
present value of the remaining cash flows of the original
financial liability. If the modification is not substantial, the
difference between: (1) the carrying amount of the liability
before the modification; and (2) the present value of the cash
flows after modification is recognised in profit or loss as the
modification gain or loss within other gains and losses.
(iii)
Fair value measurement
The group measures derivatives at fair value at each balance
sheet date and, for the purposes of impairment testing,
uses fair value less costs to sell (FVLCD) to determine the
recoverable amount of some of its non-financial assets.
Fair value is the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between
market participants at the measurement date. The fair value
measurement is based on the presumption that the transaction
to sell the asset or transfer the liability takes place either:
■
In the principal market for the asset or liability
Or
■
In the absence of a principal market, in the most
advantageous market for the asset or liability
The principal or the most advantageous market must be
accessible by the group.
The fair value of an asset or a liability is measured using the
assumptions that market participants would use when pricing
the asset or liability, assuming that market participants act in
their economic best interest.
A fair value measurement of a non-financial asset takes into
account a market participant's ability to generate economic
benefits by using the asset in its highest and best use or by
selling it to another market participant that would use the
asset in its highest and best use.
The group uses valuation techniques that are appropriate in
the circumstances and for which sufficient data are available to
measure fair value, maximising the use of relevant observable
inputs and minimising the use of unobservable inputs.
All assets and liabilities, for which fair value is measured
or disclosed in the financial statements, are categorised
within the fair value hierarchy, described as follows, based
on the lowest-level input that is significant to the fair value
measurement as a whole:
Level 1
– Quoted (unadjusted) market prices in active
markets for identical assets or liabilities
Level 2
– Valuation techniques for which the lowest-level
input that is significant to the fair value measurement is
directly or indirectly observable
Level 3
– Valuation techniques for which the lowest-level
input that is significant to the fair value measurement is
unobservable
(iv)
Offsetting of financial instruments
Financial assets and financial liabilities are offset, and the net
amount is reported in the consolidated statement of financial
position if there is a currently enforceable legal right to offset
the recognised amounts and there is an intention to settle
on a net basis, to realise the assets and settle the liabilities
simultaneously.
31U.
JOINT ARRANGEMENTS
Joint arrangements are arrangements of which two or more
parties have joint control. Joint control is the contractual agreed
sharing of control of the arrangement which exists only when
decisions about the relevant activities require unanimous
consent of the parties sharing control. Joint arrangements are
classified as either a joint operation or joint venture, based
on the rights and obligations arising from the contractual
obligations between the parties to the arrangement.
To the extent the joint arrangement provides the company
with rights to the individual assets and obligations arising from
the joint arrangement, the arrangement is classified as a joint
operation and as such, the company recognises its:
PETRONOR E&P ASA
ANNUAL REPORT 2022
103
Financial statements
■
Assets, including its share of any assets held jointly;
■
Liabilities, including its share of any liabilities incurred
jointly;
■
Revenue from the sale of its share of the output arising from
the joint operation;
■
Share of revenue from the sale of the output by the joint
operation; and
■
Expenses, including its share of any expenses incurred
jointly.
To the extent the joint arrangement provides the company
with rights to the net assets of the arrangement, the
investment is classified as a joint venture and accounted for
using the equity method. Under the equity method, the cost of
the investment is adjusted by the post-acquisition changes in
the company’s share of the net assets of the venture.
31V.
CURRENT VERSUS NON-CURRENT CLASSIFICATION
The group presents assets and liabilities in the statement of
financial position based on current/non-current classification.
An asset is current when it is either:
■
Expected to be realised or intended to be sold or consumed
in the normal operating cycle;
■
Held primarily for the purpose of trading;
■
Expected to be realised within 12 months after the reporting
period;
■
Cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months
after the reporting period.
All other assets are classified as non-current.
A liability is current when either:
■
It is expected to be settled in the normal operating cycle
■
It is held primarily for the purpose of trading
■
It is due to be settled within 12 months after the reporting
period
■
There is no unconditional right to defer the settlement of the
liability for at least 12 months after the reporting period
The group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current
assets and liabilities.
31W.
BUSINESS COMBINATIONS AND GOODWILL
In order to consider an acquisition as a business combination,
the acquired asset or groups of assets must constitute
a business (an integrated set of operations and assets
conducted and managed for the purpose of providing
a return to the investors). The combination consists of
inputs and processes applied to these inputs that have the
ability to create output. Acquired businesses are included
in the financial statements from the transaction date. The
transaction date is defined as the date on which the company
achieves control over the financial and operating assets. This
date may differ from the actual date on which the assets
are transferred. Comparative figures are not adjusted for
acquired, sold or liquidated businesses. On acquisition of
a licence that involves the right to explore for and produce
petroleum resources, it is considered in each case whether
the acquisition should be treated as a business combination
or an asset purchase. Generally, purchases of licences in
a development or production phase will be regarded as a
business combination. Business combinations are accounted
for using the acquisition method. The cost of an acquisition is
measured as the aggregate of the consideration transferred,
measured at acquisition date fair value and the amount of
any non-controlling interest (NCI) in the acquiree. For each
business combination, the group elects whether to measure
NCI in the acquiree at fair value or at the proportionate share
of the acquiree’s identifiable net assets. Acquisition related
costs are expensed as incurred and included in administrative
expenses.
The initial accounting for a business combination can be
changed if new information about the fair value at the
acquisition date is present. The allocation can be amended
within 12 months of the acquisition date [provided that the
initial accounting at the acquisition date was determined
provisionally]. The non-controlling interest is set to the non-
controlling interest’s share of identifiable assets and liabilities
[alternative fair value]. The measurement principle is done
for each business combination separately. When the group
acquires a business, it assesses the assets and liabilities
assumed for appropriate classification and designation
in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition
date. This includes the separation of embedded derivatives
in host contracts by the acquiree. Those acquired petroleum
reserves and resources that can be reliably measured are
recognised separately in the assessment of fair values on
acquisition. Other potential reserves, resources and rights,
for which fair values cannot be reliably measured, are not
recognised separately, but instead are subsumed in goodwill.
Goodwill is recognised as the aggregate of the consideration
transferred and the amount of any non-controlling interest
and deducted by the net of the acquisition-date amounts of
the identifiable assets acquired and the liabilities assumed.
Goodwill is not depreciated but is tested at least annually for
impairment. In connection with this, goodwill is allocated to
cash-generating units or groups of cash-generating units that
are expected to benefit from synergies from the business
combination.
Technical goodwill is recognised due to the requirement
to recognise deferred tax for the difference between the
assigned fair values and the related tax base. In accordance
with IAS 12, a provision is made for deferred tax corresponding
to the tax rate multiplied by the difference between the
fair values of the acquired assets and the transferred tax
depreciation basis.
If the fair value of the equity exceeds the acquisition cost in a
business combination, the difference is recognised as income
immediately on the acquisition date.
PETRONOR E&P ASA
ANNUAL REPORT 2022
104
Financial statements
PETRONOR E&P ASA
ANNUAL REPORT 2022
105
Financial statements
Company statement of comprehensive income
– Petronor E&P ASA
For the period ended 31 December
Amounts in USD thousand
2022
2021
Administrative expenses
(5,753)
(6)
Profit from operations
(5,753)
(6)
Finance expense
-
-
Loss before tax
(5,753)
(6)
Tax expense
-
-
Profit/(loss) for the year
(5,753)
(6)
Other comprehensive income
(97)
-
Total comprehensive income/(loss)
(5,850)
(6)
(Loss) for the year attributable to:
Owners of the parent
(5,753)
(6)
Total
(5,753)
(6)
Total comprehensive income/(loss) attributable to:
Owners of the parent
(5,850)
-
Total
(5,850)
-
Loss per share attributable to members:
Basic (loss) per share
(0.42)
-
Diluted (loss) per share
(0.42)
-
The accompanying notes form part of these financial statements.
PETRONOR E&P ASA
ANNUAL REPORT 2022
106
Financial statements – PetroNor E&P ASA
Company statement of financial position
– PetroNor E&P ASA
At 31 December
Amounts in USD thousand
Note
2022
2021
ASSETS
Current assets
Trade and other receivables
776
-
Cash and cash equivalents
5
30
114
Total current assets
806
114
Non-current assets
Investments
6
152,579
-
Total non-current assets
152,579
-
Total assets
153,385
114
Liabilities
Current liabilities
Trade and other payables
1,171
-
Related party payables
9
6,491
6
Total current liabilities
7,662
6
Total liabilities
7,662
6
NET ASSETS
145,723
108
EQUITY
Issued capital and reserves attributable to owners of the parent
Share capital
8
159
114
Share premium
8
151,420
-
Reserves
(97)
-
Retained earnings
(5,759)
(6)
TOTAL EQUITY
145,723
108
The accompanying notes form part of these financial statements.
The financial statements were approved and authorised for issue by the board of directors on 28 April 2023.
PETRONOR E&P ASA
ANNUAL REPORT 2022
107
Financial statements – PetroNor E&P ASA
Company statement of changes in equity – PetroNor E&P ASA
Amounts in USD thousand
Share
capital
Share
premium
Other
paid
in capital
Foreign
currency
translation
reserve
Retained
earnings
Total
For the period ended 31 December 2022:
Balance at 1 January 2022
114
-
-
-
(6)
108
Loss for the year
-
-
-
-
(5,753)
(5,753)
Other comprehensive income
(97)
(97)
Total comprehensive loss for the period
-
-
-
(97)
(5,753)
(5,850)
Reduction in share capital as part of redomicile
(114)
-
-
-
-
(114)
Issue of shares in PetroNor E&P ASA
149
141,430
-
-
-
141,579
Issue of ordinary shares as consideration for business combination
10
9,990
-
-
-
10,000
Balance at 31 December 2022
159
151,420
-
(97)
(5,759)
145,723
For the period ended 31 December 2021:
Balance at 1 October 2021
114
-
-
-
-
114
Loss for the year
-
-
-
-
(6)
(6)
Other comprehensive income
-
-
-
-
-
-
Total comprehensive loss for the period
-
-
-
-
(6)
(6)
Balance at 31 December 2021
114
-
-
-
(6)
108
The accompanying notes form part of these financial statements.
Company statement of cash flows – PetroNor E&P ASA
For the period ended 31 December
(Amounts in USD thousand)
Note
2022
2021
Cash flows from operating activities
Loss for the period
(5,753)
(6)
Total
(5,753)
(6)
Adjustments for:
Net foreign exchange differences
(97)
-
Total
(97)
-
Increase/(decrease) in trade and other receivables
(776)
-
Increase/(decrease) in trade and other payables
6,542
6
Cash (used in)/generated from operations
(84)
-
Income taxes paid
-
-
Net cash flows from operating activities
(84)
-
Financing activities
Issue of ordinary shares
5
-
114
Proceeds from loans and borrowings
-
-
Net cash (used in)/from financing activities
-
114
Net increase/(decrease) in cash and cash equivalents
(84)
114
Cash and cash equivalents at beginning of period
114
-
Cash and cash equivalents at end of period
30
114
The accompanying notes form part of these financial statements.
PETRONOR E&P ASA
ANNUAL REPORT 2022
108
Financial statements – PetroNor E&P ASA
Notes to the financial statements – PetroNor E&P ASA
Note 01
Corporate information
Petronor E&P ASA is a public limited company, incorporated in
Norway on 1 October 2021.
Registered office:
Frøyas gate 13
NO-0273 Oslo
Norway
DIRECTORS
The names of directors in office during the financial period and
until the date of approval of these financial statements are as
follows. Directors were in office for this entire period unless
otherwise stated.
Current members:
Role
Appointed
E Alhomouz
Chair
1 October 2021
I Tybring-Gjedde
Director
1 October 2021
G Kielland
Director
1 October 2021
J Iskander
Director
8 October 2021
J Norman-Hansen
Director
26 January 2023
A Fawzi
Director
26 January 2023
J Pace was appointed to the board 1 October 2021 and
resigned 9 February 2022.
The financial statements were approved by the board on 28
April 2023.
On 24 February 2022, PetroNor E&P ASA issued 1,326,991,006
ordinary shares as part of the implementation of the scheme
of arrangement. The shares of PetroNor E&P Ltd (previously
listed on Euronext Expand) were swapped for shares in
PetroNor E&P ASA.
Following the 1 to 1 share swap, the group uplisted and
PetroNor E&P ASA began trading on the Oslo Børs from 28
February 2022. The shares belonging to historic investors
that had never registered their interests in the VPS, were sold
back into the market during March 2022 and the proceeds
were distributed to these investors (mostly retail investors in
Australia).
PetroNor E&P ASA replaces PetroNor E&P Ltd as the parent
company of the group, the arrangement will be treated as a
continuation of the original group for accounting purposes.
Note 02
Basis of preparation
PetroNor E&P ASA’s financial statements have been prepared
in accordance with International Financial Reporting Standards
(IFRS) as adopted by the EU and are mandatory for financial
years beginning on or after 1 January 2022. Additional
disclosures required by the Norwegian Accounting Act are also
provided.
The preparation of financial statements in conformity with
IFRSs requires the use of certain critical accounting estimates.
It also requires management to exercise its judgments in
applying the company's accounting policies.
There are no areas involving a high degree of judgment or
complexity.
The financial statements have been prepared on the basis of
uniform accounting principles for similar transactions and
events under otherwise similar circumstances.
The financial statements are presented in US Dollars being
the primary currency for group operations, the functional
currency of the company is Norwegian Kroner. Conversion
of foreign currency transactions are translated at average
exchange rates provided that they are a reasonable
approximation of exchange rates ruling at the date of
transactions. Assets and Liabilities are translated at the rates
prevailing at the balance sheet date. Exchange differences
arising on translation are recognised in equity.
PETRONOR E&P ASA
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Financial statements – PetroNor E&P ASA
Note 03
Employee benefit expenses
The company has no employees
Note 04
Auditors’ remuneration
Amounts in USD thousand
2022
2021
Paid or payable to BDO
Audit review of financial reports
BDO AS
62
-
BDO network firms
-
-
Sum
62
-
Other non-assurance services
BDO-related practices
-
12
Sum
-
12
Paid or payable to other audit firms
Audit or review of financial reports
-
-
Other non-assurance services
-
-
Total
62
-
Note 05
Cash and cash equivalents
(Amounts in USD thousand)
2022
2021
Cash in bank
30
114
Non-cash adjustment
Non-cash adjustments include the shares issued as part of
the implementation of the scheme of arrangement where
PetroNor E&P ASA issued 1,326,991,006 ordinary shares as a
direct swap with the shares of PetroNor E&P Ltd. The non-cash
adjustments are as follows:
For the year ended 31 December 2022
Amounts in USD thousand
2022
Investment in subsidiaries
141,579
Trade and other payables
(114)
Share capital
(141,465)
Note 06
Investment in subsidiaries
Amounts in USD thousand
2022
2021
Investment as at 1 January
-
-
Net income/(loss) from subsidiaries and other equity accounted investments
-
-
Investment in PetroNor E&P Ltd (Australia)
141,579
-
Investment in Aje Nigeria Holding BV and Aje Services Holding BV
11,000
-
Investments at 31 December
152,579
-
PETRONOR E&P ASA
ANNUAL REPORT 2022
110
Financial statements – PetroNor E&P ASA
Investments in subsidiaries are carried at the lower of cost and
fair market value. Investments are assessed for impairment on
annual basis.
The closing balance of investments at 31 December 2022
of USD 152.6 million, consists solely of investments in
subsidiaries. The balance represents PetroNor E&P ASA’s 100%
ownership in the subsidiaries mentioned in the below table.
The increase in 2022 is a result of the direct share swap with
PetroNor E&P Ltd (Australia) as part of the implementation
of the scheme of arrangement. In February 2022, PetroNor
E&P ASA issued 1,326,991,006 shares in a 1 for 1 swap with
PetroNor E&P Ltd (Australia) increasing its share capital by USD
141.6 million. The remaining USD 10 million of share capital
issued is in relation to the transaction to acquire an interest
in the OML 113 licence via the acquisition of subsidiaries from
Panoro Energy ASA. Refer to note 7 for further detail.
The following table shows significant subsidiaries directly held
by PetroNor E&P ASA:
Name
Ownership share
Country of Incorporation
PetroNor E&P Ltd
100%
Australia
Aje Services Holding BV
100%
Netherlands
Aje Nigeria Holding BV
100%
Netherlands
Aje Production AS
100%
Norway
Note 07
Acquisition of subsidiaries
On 13 July 2022, PetroNor completed the corporate acquisition
of Pan-Petroleum Nigeria Holding BV and Pan-Petroleum
Services Holdings BV that hold 100 per cent of the shares in
Pan-Petroleum AJE Ltd. The transaction has allowed PetroNor
to assume a 6.502 per cent participating interest, 16.255 per
cent cost bearing interest and economic interest of 12.1913 per
cent in Offshore Mining Licence no.113 (OML113)
Pan-Petroleum AJE Ltd participates in the exploration and
production of hydrocarbons in the Aje oil and gas field.
Information is respect of the assets and liabilities acquired and
the fair value allocations to the assets in accordance with the
provisions of “IFRS3 – Business Combinations “is as follows:
Amounts in USD thousand
Assets acquired
Current assets
Trade and other receivables
5
Cash and bank balances
52
Total current assets
57
Non-current assets
Intangible assets
34,299
Production assets and equipment
926
Total non-current assets
35,225
Total assets
35,282
Current liabilities
Trade and other payables
(2,745)
Total current liabilities
(2,745)
Non-current liabilities
Provisions
(3,768)
Deferred tax liabilities
(9,031)
Other payables
(8,738)
Total non-current liabilities
(21,537)
Total liabilities
(24,282)
Net assets
11,000
Satisfied by:
Consideration shares
10,000
Assignment fee
1,000
Total
11,000
PETRONOR E&P ASA
ANNUAL REPORT 2022
111
Financial statements – PetroNor E&P ASA
The upfront consideration for the transaction was USD 10
million paid via the allotment and issue of 96,577,537 new
PetroNor shares. The volume of PetroNor shares has been
determined with reference to the contractually determined
30-day volume weighted average price (“VWAP") of PetroNor
shares listed on the Oslo Børs. The calculation was based on
30 Business trading days between 2 May 2022 and 8 July 2022.
Non-cash adjustment
The consolidated statement of cash flows includes a non-cash
adjustment for the corporate transaction with Panoro Energy
ASA. The acquisition of the Panoro subsidiaries with shares
has not resulted in cash flows and therefore the statement of
cash flows has been adjusted as follows:
For the year ended 31 December 2022:
Amounts in USD thousand
Acquisition of subsidiary
11,000
Trade and other payables
(1,000)
Issue of share capital
(10,000)
Note 08
Equity
SHARE CAPITAL
All shares have equal rights and are freely transferable share capital.
Amounts in USD thousand
2022
2021
Opening balance
114
-
Reversal of shares as part of redomicile
1
(114)
-
Issue of shares as part of redomicile
1
149
-
Share capital issued as consideration for business combination
2
10
-
Issue of ordinary shares
-
114
Balance at end of the period
159
114
1)
On 24 February 2022: The company issued 1,326,991,006 ordinary shares as part of the implementation scheme arrangement and redomicile from
Australia to Norway. Shares are issued at the nominal value of 0.001 NOK and translated to 0.01 USD using the rate of exchange on the day of issue.
2)
On 13 July 2022, PetroNor E&P ASA completed the acquisition of Pan-Petroleum Nigeria Holding BV and Pan-Petroleum Services Holdings BV that hold 100
per cent of the shares in Pan-Petroleum AJE Ltd. The upfront consideration was USD 10 million paid via the allotment and issue of 96,577,537 new PetroNor
shares. The shares were issued at the nominal value of 0.001 NOK USD using the daily exchange rate published by the Bank of England.
Share premium
Share premium reserve represents excess of subscription
value of the shares over the nominal amount.
Amounts in USD thousand
2022
2021
Opening balance
-
-
Issue of shares as part of redomicile
141,430
-
Share capital issued as consideration for business combination
9,990
Balance at end of the period
151,420
-
PETRONOR E&P ASA
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112
Financial statements – PetroNor E&P ASA
Note 09
Related parties
The remuneration for board members is paid by subsidiary
company PetroNor E&P Services AS, in addition the chair also
receives remuneration through subsidiary company Hemla
E&P Congo SA.
Details on the remuneration to individual board members is
included in the notes to the consolidated financial statements
of PetroNor E&P ASA.
Transactions with related parties included in the
statement of comprehensive income:
Amounts in USD thousand
2022
2021
PetroNor E&P Services AS
2,373
-
Administrative expenses
2,373
-
PetroNor E&P Services AS is 100 per cent indirectly controlled
entity of PetroNor E&P ASA.
Balances due from and due to related parties disclosed in
the statement of financial position:
Amounts in USD thousand
2022
2021
Other payables:
PetroNor E&P Services AS
6,253
-
PetroNor E&P Ltd (Australia)
238
-
Total payables to related parties
6,491
-
Amounts in USD thousand
2022
2021
Other receivables:
Aje Services Holding BV
32
-
Aje Nigeria Holding BV
32
-
Total receivables from related parties
64
-
Note 10
Risk management
CREDIT RISK
Credit risk refers to the risk that a counterparty will default
on its contractual obligations resulting in financial loss
to the company. As at 31 December 2022, the company’s
maximum exposure to credit risk without taking into account
any collateral held or other credit enhancements, which will
cause a financial loss to the group due to failure to discharge
an obligation by the counterparties and financial guarantees
provided by the company arises from the carrying amount
of the respective recognised financial assets as stated in the
statement of financial position.
To minimise credit risk, the company has tasked its
management to develop and maintain the group’s credit
risk gradings to categorise exposures according to their
degree of risk of default. The credit rating information is
supplied by independent rating agencies where available
and, if not available, the management uses other publicly
available financial information and the company’s own
trading records to rate its major customers and other
debtors. The company’s exposure and the credit ratings of its
counterparties are continuously monitored, and the aggregate
value of transactions concluded is spread amongst approved
counterparties.
The company’s current credit risk grading framework
comprises the following categories:
Category
Description
Basis for recognising expected credit losses
Performing
The counterparty has a low risk of default and does not have
any past-due amounts
12-month ECL
Doubtful
Amount is >30 days past due or there has been a significant
increase in credit risk since initial recognition
Lifetime ECL – not credit-impaired
In default
Amount is >90 days past due or there is evidence indicating the
asset is credit-impaired
Lifetime ECL – credit-impaired
Write-off
There is evidence indicating that the debtor is in severe financial
difficulty and the company has no realistic prospect of recovery
Amount is written off
PETRONOR E&P ASA
ANNUAL REPORT 2022
113
Financial statements – PetroNor E&P ASA
The table below details the credit quality of the company’s
financial assets as well as the company’s maximum exposure
to credit risk by credit risk rating grades.
At 31 December 2022:
Other receivables
External credit rating
n/a
Internal credit rating
-
12 month or lifetime ECL
Lifetime ECL
Gross carrying amount USD’000’s
776
Loss allowance
-
Net carrying amount
776
For other receivables, the company has applied the simplified
approach in IFRS 9 to measure the loss allowance at lifetime
ECL. The expected credit losses are estimated using a
provision matrix by reference to past default experience of
the debtor and an analysis of the debtor’s current financial
position, adjusted for factors that are specific to the debtors,
general economic conditions of the industry in which the
debtors operate and an assessment of both the current as well
as the forecast direction of conditions at the reporting date.
LIQUIDITY RISK
The company seeks to limit its liquidity risk by ensuring
financial support is available from the shareholders. Trade
payables are normally settled within 90 to 120 days of the date
of receipt of invoice.
The table below summarises the maturity profile of the
group’s financial liabilities at 31 December 2022 based on
contractual undiscounted payments.
(Amounts in USD thousand)
On demand
Between 1 and
3 months
Between 3 months
and 1 year
Total
31 December 2022
Due to related parties
6,491
-
-
6,491
Trade and other payables
-
1,171
-
1,171
Total
6,491
1,171
-
7,662
Currency risk
The company operates internationally and is exposed to
risk arising from various currency exposures, primarily with
respect to the Norwegian Kroner (NOK). The group has
transactional currency exposures. Such exposure arises from
sales or purchases in currencies other than the respective
functional currency.
The company reports its results in USD; any change in
exchange rates between its functional currency and the USD
affects its statement of comprehensive income and statement
of financial position when the results are translated into USD
for reporting purposes.
The company’s assessment of what a reasonable potential
change in foreign currencies that it is currently exposed to
have been changed as a result of the changes observed in the
world financial markets. This hypothetical analysis assumes
that all other variables, including interest rates and commodity
prices, remain constant.
Note 11
Financial instruments
Financial instruments comprise financial assets and financial
liabilities.
Financial assets consist of bank balances and cash. Financial
liabilities consist of other liabilities.
The fair values of the group’s financial instruments are not
materially different from their carrying amounts at the
reporting date largely due to the short-term maturities of
these instruments.
Measurement of financial instruments by categories
The following tables present PetroNor E&P ASA’s classes
of financial instruments and their carrying amounts by
the categories as they are defined in IFRS 9 Financial
instruments. For financial investments, the difference
between measurement as defined by IFRS 9 categories and
measurement at fair value is immaterial. For trade and other
receivables and payables and cash and cash equivalents, the
carrying amounts are considered a reasonable approximation
of fair value.
PETRONOR E&P ASA
ANNUAL REPORT 2022
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Financial statements – PetroNor E&P ASA
(Amounts in USD thousand)
Amortised
cost
Fair value through
profit or loss
Non-financial
assets
Total carrying
amount
At 31 December 2022
Assets
Receivables from subsidiaries
64
-
-
-
Trade and other receivables
714
-
-
-
Cash and cash equivalents
30
-
-
-
Total financial assets
808
-
-
-
At 31 December 2021
Cash and cash equivalents
114
-
-
-
Total financial assets
114
-
-
-
Note 12
Commitments and contingencies
Commitments
The parent company has given a parent company guarantee
against an external debt facility for USD 11 million loaned to
indirect subsidiary Hemla Africa Holding AS.
Contingencies
In December 2021, the National Authority for Investigation and
Prosecution of Economic and Environmental Crime in Norway
(Økokrim) initiated an investigation into allegations of corruption
and brought criminal charges against individuals associated with
the company. Økokirm has confirmed that neither PetroNor nor
any of its subsidiaries has been charged. The US Department
of Justice also began its own investigation into the allegations
based on information received from Økokrim.
To mitigate potential corporate liability risks, the board has
taken various remediation steps, as outlined in the director’s
report, including obtaining independent legal advice and
implementing a compliance action plan. Despite the ongoing
investigations, the company has continued to operate
effectively, but has incurred costs in addressing this issue
and
fully cooperating with the investigating authorities.
The company is not aware of the status or duration of
the investigations into the individuals involved, and the
uncertainty surrounding the outcome could potentially impact
the company’s ability to conduct transactions with both new
and existing partners.
Note 13
Events after the reporting period
On 26 January 2023, two new directors were appointed to the
board. The appointments were pursuant to recommendations
from the nomination committee. The two new directors, Mrs.
Azza Fawzi and Mr. Jarle Norman-Hansen, take the company’s
board to a total of six directors.
Except for the above, the company has not identified any
events with significant accounting impacts that have occurred
between the end of the reporting period and the date of this
report.
Note 14
Summary of accounting policies
The following is a summary of the material accounting policies
adopted by the company in the preparation of the financial
statements. The accounting policies have been consistently
applied, unless otherwise stated.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents include cash on hand, demand
deposits, other short-term highly liquid investments with
original maturities of three months or less.
TRADE AND OTHER RECEIVABLES
Trade receivables are amounts due from customers for goods
sold or services performed in the ordinary course of business.
They are generally due for settlement within 30 to 90 days
and therefore are all classified as current. Trade receivables
are recognised initially at the amount of consideration that
is unconditional unless they contain significant financing
components, when they are recognised at fair value. The
group holds the trade receivables with the objective to collect
the contractual cash flows and therefore measures them
subsequently at amortised cost using the effective interest
method.
TRADE AND OTHER PAYABLES
Trade and other payables are carried at amortised cost and
due to their short-term nature, they are not discounted.
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Financial statements – PetroNor E&P ASA
SHARE CAPITAL
Incremental costs directly attributable to the issue of new
shares are shown in equity as a deduction, net of tax, from the
proceeds.
BUSINESS COMBINATIONS
In order to consider an acquisition as a business combination,
the acquired asset or groups of assets must constitute a
business (an integrated set of operations and assets conducted
and managed for the purpose of providing a return to the
investors). The combination consists of inputs and processes
applied to these inputs that have the ability to create output.
Acquired businesses are included in the financial statements
from the transaction date. The transaction date is defined as the
date on which the company achieves control over the financial
and operating assets. This date may differ from the actual
date on which the assets are transferred. Comparative figures
are not adjusted for acquired, sold or liquidated businesses.
On acquisition of a licence that involves the right to explore
for and produce petroleum resources, it is considered in each
case whether the acquisition should be treated as a business
combination or an asset purchase. Generally, purchases
of licences in a development or production phase will be
regarded as a business combination. Business combinations
are accounted for using the acquisition method. The cost of an
acquisition is measured as the aggregate of the consideration
transferred, measured at acquisition date fair value and the
amount of any non-controlling interest (NCI) in the acquiree.
For each business combination, the group elects whether to
measure NCI in the acquiree at fair value or at the proportionate
share of the acquiree’s identifiable net assets. Acquisition
related costs are expensed as incurred and included in
administrative expenses.
The initial accounting for a business combination can be
changed if new information about the fair value at the
acquisition date is present. The allocation can be amended
within 12 months of the acquisition date [provided that the
initial accounting at the acquisition date was determined
provisionally]. The non-controlling interest is set to the non-
controlling interest’s share of identifiable assets and liabilities
[alternative fair value]. The measurement principle is done
for each business combination separately. When the group
acquires a business, it assesses the assets and liabilities
assumed for appropriate classification and designation
in accordance with the contractual terms, economic
circumstances and pertinent conditions as at the acquisition
date. This includes the separation of embedded derivatives
in host contracts by the acquiree. Those acquired petroleum
reserves and resources that can be reliably measured are
recognised separately in the assessment of fair values on
acquisition. Other potential reserves, resources and rights,
for which fair values cannot be reliably measured, are not
recognised separately, but instead are subsumed in goodwill.
Goodwill is recognised as the aggregate of the consideration
transferred and the amount of any non-controlling interest
and deducted by the net of the acquisition-date amounts of
the identifiable assets acquired and the liabilities assumed.
Goodwill is not depreciated but is tested at least annually for
impairment. In connection with this, goodwill is allocated to
cash-generating units or groups of cash-generating units that
are expected to benefit from synergies from the business
combination.
If the fair value of the equity exceeds the acquisition cost in a
business combination, the difference is recognised as income
immediately on the acquisition date.
FINANCIAL INSTRUMENTS
A financial instrument is any contract that gives rise to a
financial asset of any one entity and a financial liability or
equity instrument of another entity.
Financial assets
The company´s financial assets are other receivables and cash
and cash equivalents.
The classification of financial assets at initial recognition
depends on the financial asset’s contractual cash flow
characteristics and the company’s business model for
managing them. The company initially measures a financial
asset at its fair value.
Financial assets at amortised cost
The company measures financial assets at amortised cost if
both of the following conditions are met:
■
The financial asset is held within a business model with
the objective to hold financial assets in order to collect
contractual cash flows and,
■
The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding.
Financial assets at amortised cost are subsequently measured
using the effective interest (EIR) method and are subject to
impairment. Gains and losses are recognised in profit or loss
when the asset is derecognised, modified, or impaired.
Cash equivalents
Cash equivalents are short-term, highly liquid investments that
are readily convertible to known amounts of cash, are subject
to insignificant risk of changes in value and generally have a
maturity of three months or less from the date of acquisition.
Cash equivalents are classified as financial assets measured at
amortised cost.
Trade receivables are written off when there is no reasonable
expectation of recovery. Indicators that there is no reasonable
expectation of recovery include, amongst others, the failure
of a debtor to engage in a repayment plan with the group, and
a failure to make contractual payments for a period of greater
than 120 days past due.
Impairment losses on trade receivables and contract assets
are presented as net impairment losses within operating
profit. Subsequent recoveries of amounts previously written
off are credited against the same line item.
Derecognition
A financial asset (or, where applicable, a part of a financial
asset or part of a group of similar financial assets) is primarily
derecognised (i.e., removed from the company’s statement of
financial position) when:
The rights to receive cash flows from the asset have expired
or the company has transferred its rights to receive cash
flows from the asset or has assumed an obligation to pay
the received cash flows in full without material delay to a
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Financial statements – PetroNor E&P ASA
third party under a ‘pass-through’ arrangement; and either
(a) the company has transferred substantially all the risks
and rewards of the asset, or (b) the company has neither
transferred nor retained substantially all the risks and rewards
of the asset, but has transferred control of the asset.
Financial liabilities
Financial liabilities are classified, at initial recognition, as loans
and borrowings, payables, or as derivatives designated as
hedging instruments in an effective hedge, as appropriate.
Derivatives are recognised initially at fair value. Loans,
borrowings and payables are recognised at fair value net of
directly attributable transaction costs.
Derivatives are financial liabilities when the fair value is
negative, accounted for similarly as derivatives as assets.
Loans, borrowings, and payables
After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortised cost using the EIR
method. Gains and losses are recognised in profit or loss
when the liabilities are derecognised as well as through the EIR
amortisation process.
Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees or costs that are
an integral part of the EIR. The EIR amortisation is included as
finance costs in the statement of profit or loss.
Payables are measured at their nominal amount when the
effect of discounting is not material.
Derecognition of financial liabilities
A financial liability is derecognised when the obligation under
the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an
existing liability are substantially modified, such an exchange
or modification is treated as the derecognition of the original
liability and the recognition of a new liability. The difference
in the respective carrying amounts is recognised in the
statement of profit or loss.
Statement of directors’ responsibility
Pursuant to the Norwegian Securities Trading Act section 5-5 with pertaining regulations
we hereby confirm that, to the best of our knowledge, the group’s financial statements
for 2022 have been prepared in accordance with IFRS, as provided for by the EU, and
in accordance with the requirements for additional information provided for by the
Norwegian Accounting Act. The information presented in the financial statements gives
a true and fair picture of the group's liabilities, financial position and results viewed in
their entirety.
To the best of our knowledge, the board of directors' report gives a true and fair picture
of the development, performance and financial position of the business, and includes a
description of the principal risk and uncertainty factors facing the group. Additionally,
we confirm to the best of our knowledge that the "Payments to governments" included
in the directors’ report has been prepared in accordance with the requirements in the
Norwegian Securities Trading Act Section 5-5a with pertaining regulations.
Oslo, Norway, 28 April 2023
The board of directors – PetroNor ASA
Eyas Alhomouz
Gro Kielland
Joseph Iskander
Ingvil Smines Tybring-Gjedde
Chair
Director
Director
Director
Azza Fawzi
Jarle Norman-Hansen
Director
Director
PETRONOR E&P ASA
ANNUAL REPORT 2022
117
Financial statements – PetroNor E&P ASA
BDO AS
Munkedamsveien 45
PO Box
1704 Vika
0121 Oslo
Norway
BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms
part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
Page 1 of 5
Independent Auditor's Report
To the Annual Shareholders meeting of PetroNor E&P ASA
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of PetroNor E&P ASA.
The financial statements comprise:
•
The financial statements of the parent
company, which comprise the balance
sheet as at 31 December 2022, income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies, and
•
The financial statements of the group,
which comprise the balance sheet as at
31 December 2022, and income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies.
In our opinion:
•
The financial statements comply with
applicable statutory requirements,
•
The accompanying financial statements
give a true and fair view of the
financial position of the company as at
31 December 2022, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
•
The accompanying financial statements
give a true and fair view of the
financial position of the group as at 31
December 2022, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
Our opinion is consistent with our additional
report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). 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 Company and
the Group as required by relevant laws and regulations in Norway and the International Ethics
Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), 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.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of PetroNor E&P ASA for 2 years from the election in the Memorandum of
Association on 1 October 2021 for the accounting year 2021.
PETRONOR E&P ASA
ANNUAL REPORT 2022
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Auditor’s report 2022
BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms
part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
Page 2 of 5
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. 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.
Description of the key audit matter
How the key audit matter was addressed in
the audit
Valuation of oil and gas assets and related
goodwill
PetroNor E&P ASA has property, plant and
equipment with a carrying amount of USD
67,479 thousands at 31 December 2022. In
addition, the carrying value of intangible assets
(including technical goodwill) was USD 42,283
thousands at 31 December 2022.
No impairments have been recognized during
2022 related to oil and gas assets and related
goodwill.
Due to the materiality, complexity and
estimation uncertainty concerning the oil and
gas assets and related goodwill, we consider
valuation of these assets a key audit matter.
Please refer to notes 16 and 17 in the
consolidated financial statements.
We obtained management’s impairment tests
of oil and gas assets and related goodwill as at
31 December 2022.
We evaluated the production volumes and
capital expenditures used in the forecasted
cash flows against external and internal reserve
reports and assessed commodity prices against
available market information.
We involved specialists in assessing
management’s estimates of weighted average
cost of capital including country risk premiums,
and we compared the input against available
market information.
Furthermore, we evaluated the professional
qualifications and objectivity of the external
reserve experts used by management.
We have also evaluated the adequacy of the
disclosures.
Acquisition of Pan AJE interests
On 13 July 2022, the Group acquired from
Panoro Energy ASA the wholly-owned
subsidiaries Pan-Petroleum Nigeria Holding BV
and Pan-Petroleum Services Holding BV, who
together hold a 100 per cent interest of the
shares in Pan-Petroleum AJE Ltd.
The agreed purchase price consisted of an
upfront consideration of USD 10 million paid via
the allotment and issue of 96,577,537 new
PetroNor shares, and a conditional
We have obtained and read the Sale and
Purchase Agreement (SPA) between PetroNor
E&P ASA and Panoro Energy ASA.
We challenged management as to whether
there could be other assets and liabilities than
those identified in the preliminary PPA.
In addition, we performed the following audit
procedures:
•
we compared Sale and Purchase
Agreement (SPA) and Purchase Price
PETRONOR E&P ASA
ANNUAL REPORT 2022
119
Auditor’s report 2022
BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms
part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
Page 3 of 5
consideration which shall not exceed USD 16.67
million in cumulated payments.
The acquisition was determined to constitute a
business combination and application of the
acquisition method of accounting in accordance
with IFRS 3 was deemed appropriate.
In relation to the acquisitions, the management
has prepared a preliminary purchase price
allocation (PPA). The purchase price allocation
requires the application of significant judgment
by management, in particular with respect to
identification and valuation of intangible
assets.
Due to the materiality, complexity and
estimation uncertainty, we consider accounting
for business combinations to constitute a key
audit matter in the audit of the group.
The Group’s accounting policy regarding
business combinations is disclosed in note 31W
to the consolidated financial statements.
Allocation (PPA) with respect to
consideration amounts
•
we tested the calculation of the share
consideration
•
we focused on the opening balances
and evaluated the related fair value
adjustments.
•
we tested the mathematical accuracy
of the calculations derived from the
forecast model
We involved our internal valuation specialists
to assist us with our assessment of the
appropriateness of the methodology and
valuation model used.
Furthermore, we have evaluated the adequacy
of the disclosures provided in the notes
covering business combinations.
Other information
The Board of Directors and the Managing Director (management) are responsible for the other
information. The other information comprises the Board of Directors’ report and other information
in the Annual Report, but does not include the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the other information.
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 consolidated financial statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. 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.
Opinion on the Board of Directors’ report
Based on our knowledge obtained in the audit, in our opinion the Board of Directors’ report
•
is consistent with the financial statements and
•
contains the information required by applicable statutory requirements.
Our opinion on the Board of Directors' report applies correspondingly for the statements on
Corporate Governance and Corporate Social Responsibility.
PETRONOR E&P ASA
ANNUAL REPORT 2022
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Auditor’s report 2022
BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms
part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
Page 4 of 5
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view
in accordance with International Financial Reporting Standards as adopted by the EU, and for such
internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
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 management either intends to
liquidate the Company or Group or to cease operations, or has 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 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.
For further description of Auditor’s Responsibilities for the Audit of the Financial Statements
reference is made to:
https://revisorforeningen.no/revisjonsberetninger
Report on compliance with Regulation on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Petronor E&P ASA we have performed an
assurance engagement to obtain reasonable assurance about whether the financial statements
included in the annual report, with the file name 984500AEEH2D2AK42C11-2022-12-31-en , have
been prepared, in all material respects, in compliance with the requirements of the Commission
Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and
regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes
requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of
the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF Regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
Regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
PETRONOR E&P ASA
ANNUAL REPORT 2022
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Auditor’s report 2022
BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms
part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT.
Page 5 of 5
Oslo, 28 April 2023
BDO AS
Børre Skisland
State Authorised Public Accountant
PETRONOR E&P ASA
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Alternative performance measures
PetroNor discloses alternative performance measures
(APMs) in accordance with the issued guidelines from the
European Securities and Markets Authority (ESMA). PetroNor
discloses APMs that we believe provide useful information
to management, investors, securities analysts and other
stakeholders. The disclosed APMs assist users of the financial
statements to understand operations, financial developments,
financing and future prospects. Reconciliations of relevant
APMs, definitions and explanations of the APMs are as follows:
Net debt
Amounts in USD thousand
2022
2021
Cash and cash equivalents
24,816
31,755
Loans and borrowings
11,000
13,079
Net cash/-debt
13,816
18,676
Market capitalisation
2022
2021
Share price 31 December (NOK)
0.8925
0.7710
No. shares 31 December
1,326,991,006
1,423,568,543
Market capitalisation (USD)
131,800,000
111,400,000
FX Rate NOK/USD: 0.101513
Definitions and explanations of APMs
ESMA issued guidelines on APMs that came into effect on 3 July
2016. PetroNor has defined and explained the purpose of the
following APMs:
EBITDA (earnings before interest, tax, depreciation and
amortisation)
EBITDA is calculated by excluding the interest, tax,
depreciation and amortisation from the group’s profit or loss.
PetroNor have assessed EBITDA as a key measure to convey
the group’s ability to fund capital investments and provides
useful information as a benchmark for operating performance
with those of other companies.
EBIT (earnings before interest and tax)
EBIT is calculated by excluding the interest and tax from the
group’s profit or loss. Management believe EBIT provides
useful information to stakeholders as it can be used to
analyse the business’ operating performance, profitability and
potential.
Net debt
Net debt is calculated as cash and cash equivalents less
borrowings and loans. Net debt provides useful information
to stakeholders as it provides an indication of the minimum
necessary debt financing (if the figure is negative) to which the
group is subject to at balance sheet date.
Market capitalisation
Market capitalisation as reconciled above refers to the total
value of a company’s shares of stock. Management believe
market capitalisation provides useful information to potential
investors in understanding the relative size of the company
versus others as well as understanding the company’s worth,
market perceptions and future prospects.
PETRONOR E&P ASA
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Auditor’s report 2022
Glossary and definitions
Bbl
One barrel of oil, equal to 42 US gallons or 159 litres
Bcf
Billion cubic feet
bopd
Barrels of oil per day
boepd
Barrels of oil equivalent per day
CGU
Cash Generating Unit
CPR
Competent Person’s Report
GNPC
Gambia National Petroleum Company
Group or PetroNor group
PetroNor E&P ASA and its subsidiaries
HAH
Hemla Africa Holding AS
HEPCO
Hemla E&P Congo SA
IASB
International Accounting Standards Board
IOR
Improved oil recovery
MMbbl
Million barrels of oil
MMBOE
Million barrels of oil equivalent
Mmscfd
Million standard cubic feet per day
NUPRC
Nigerian Upstream Petroleum Regulatory Commission
PEPLA
Petroleum, exploration, development and production licence agreement
PSC
Production sharing contract
SNPC
Société National des Pétroles du Congo
Corporate directory
DIRECTORS
Eyas Alhomouz
Joseph Iskander
Gro Kielland
Ingvil Smines Tybring-Gjedde
Azza Fawzi
Jarle Norman-Hansen
REGISTERED OFFICE
Frøyas gate 13
NO-0273 Oslo
Norway
STOCK EXCHANGE LISTING
Oslo Børs
Ticker: PNOR
ISIN: NO0011157232
SHARE REGISTRAR
DNB Bank ASA,
Verdipapirservice
Dronning Eufemias gate 30
0191 Oslo
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PETRONOR E&P ASA
ANNUAL REPORT 2022
124
Financial statements
PETRONOR E&P ASA
ANNUAL REPORT 2022
125
Financial statements
PetroNor E&P ASA
petronorep.com