Predator Oil & Gas : Annual Report 2021

Contents

Predator Oil and Gas Holdings Plc

For the year ended 31 December 2021

Chairman's Statement

Dear Shareholder,

On behalf of the Board of Directors, I hereby present the consolidated financial statements of Predator Oil & Gas Holdings Plc (the "Group", "Predator" or the "Company") for the year ended 31 December 2021.

2021 has once again been a particularly active period for the Company and its small management team focussed mainly on operations in Morocco and, in the earlier part of the year, Trinidad. Despite the continuing challenges presented by the COVID pandemic we have demonstrated our resilience to external global influences by successfully and safely executing the drilling of our first well, MOU-1, as an approved operator in Morocco. This is a significant milestone for the Company and the implementation of its business strategy, which is heavily weighted towards gas as the greener fossil fuel option to accelerate the decarbonisation of the energy sector, by replacing more carbon- intensive coal and oil, and to maintain security of energy supply during the Energy Transition and the roll-out of renewable energy alternatives.

The Company's drilling programme has paved the way to the opening up and de-risking of a new gas basin in northern Morocco with significant "running room" to add material gas resources. The industrial sector in Morocco is starved of indigenous gas resources and heavily reliant on imported carbon-intensive fuel oil. The Company's development strategy is focussed on compressed natural gas ("CNG") distribution to industries isolated from gas pipeline infrastructure. This is attractive to potential end users and by the end of 2021 the Company has initiated discussions with several parties regarding aligning interests and commercial goals through joint venture participation at project level. In a pan-European context of security of gas supply, potential additional Guercif gas discoveries are connected to the European gas grid and provide for diversification of European gas supplies.

In Trinidad we successfully commenced Phase 3 of the Inniss-Trinity Pilot Enhanced Oil Recovery project using injected anthropogenic carbon dioxide ("Pilot CO2 EOR"). During the period under review the Government of Trinidad and Tobago established a Carbon Capture and Carbon Dioxide Enhanced Oil Recovery ("CO2 EOR") Steering Committee to give recognition to the vital role CO2 EOR could play in response to the need for emission mitigation and carbon management and Carbon Capture and Storage in the context of the Paris Agreement. This important and timely initiative has ensured that the Company, being the only CO2 EOR operator in Trinidad and with exclusivity over Trinidad's surplus liquid CO2 supply, is well-positioned to offer its technology and operations experience as a valuable catalyst to co-venture with other operators of producing oil fields onshore Trinidad and to help develop the Government's strategic carbon capture plans. Financing of the CO2 EOR services offered by the Company must be borne by those producers wishing to avail themselves of such services to further the development and retention of their assets mainly held under Incremental Production Service Contracts. Implementing CO2 EOR plans are crucial if inward investment in the energy sector in Trinidad is to be secured on the basis of compatibility with the demands to address the level of global CO2 emissions.

Changes in the ultimate ownership of FRAM Exploration Trinidad Ltd. ("FRAM") completed in 2020 resulted in the parent company of FRAM unilaterally terminating the Inniss-Trinity CO2 EOR project without prior consultation with the Company or the regulatory authorities. As a consequence the Company decided that it would be prudent to decommission its CO2 EOR facilities at Inniss-Trinity. The Company also elected to seek redress from FRAM for breach of the terms of the Inniss-Trinity Well Participation Agreement and for failure to repay the Loan advanced to FRAM repayable out of profits arising from the sale of CO2 EOR enhanced oil production during 2020 and 2021. The Company has a reasonable expectation that an amicable settlement of the dispute will be achieved in 2022 which will facilitate the Company establishing its in-country CO2 EOR services Special Purpose Vehicle ("SPV") using its subsidiary Predator Oil & Gas Trinidad Ltd. New CO2 EOR projects resulting from the provision of advisory services and in addition potential assets suitable for CO2 EOR over which the Company will have full unfettered title will be incorporated into the SPV. There is no guarantee however that this objective will be achieved as it will be subject to concluding successful commercial negotiations and agreements and the granting of regulatory consents. The termination of the Inniss-Trinity CO2 EOR Project has unexpectedly been the catalyst to make substantial progress towards the Company's preferred business objective of achieving a self-financing CO2 EOR and CO2 sequestration business in Trinidad. The promising results of the Inniss-Trinity CO2 EOR Project have demonstrated the potential for the development of CO2 EOR with CO2 sequestration in Trinidad during the Energy Transition and has revitalised

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Predator Oil and Gas Holdings Plc

For the year ended 31 December 2021

interest from third parties in being part of the government strategy for CO2 EOR going forward focussed in the near- term on the Company's pre-eminent position in Trinidad as a CO2 EOR specialist.

In Ireland the Company submitted its Floating Storage and Regasification Unit ("FSRU") LNG import solution ("Mag Mell") to the Draft Cork County Development Plan 2021 for public consultation. In addition, the Company also made a submission to the Department of Housing, Local Government and Heritage in respect of the Public Consultation on the Marine Protected Area ("MPA") Advisory Group's Report entitled "Expanding Ireland's Marine Protected Area Network." Both submissions focussed on Mag Mell's ability to address, at the earliest opportunity, Ireland's security and diversity of energy supply, particularly in relation to gas.

The Company's management highlighted from 2016 onwards the risks for security and cost of energy supply for Ireland, and for Europe in general, of an over-reliance on Russian gas imported through fixed pipelines and a UK gas infrastructure that was no longer regulated by the EU after Brexit. This scenario sowed the seeds for the application of geopolitical leverage in the context of energy supply. Accordingly in 2016 the Company created a portfolio of Irish gas assets focussed on proximity to existing offshore infrastructure; undeveloped discovered gas; and the presence of proven gas storage reservoirs.

By the end of 2021 the conditions for the implementation and execution of this medium-term business development strategy have never been more favourable as the value of gas assets continues to rise based on belated EU recognition of the importance of gas as an Energy Transition fuel suitable for "green finance" and the importance of diversification of the origin of gas supplies to counteract an over-reliance on Russian gas.

At the end of 2021 the Mag Mell FSRU LNG import option was firmly positioned with the regulatory authorities as a near-term solution to security of energy supply. Furthermore, it was shown that the Mag Mell project could be advanced far more quickly than any other competing project.

Additional information requested by the Geoscience Regulation Office ("GSRO") division of the Department of Environment, Climate and Communications was provided in support of the review of the terms and conditions for the award of the successor authorisations to the Corrib South Licensing Option 16/26 and the Ram Head Licensing Option 16/30. The submitted technical data for the Ram Head Licensing Option 16/30 successor authorisation included an initial work programme to evaluate the gas storage potential of the undeveloped Ardmore gas field.

Ireland is committed to using natural gas for the foreseeable future and is proposing new-buildgas-fired power stations to satisfy severe peak-day winter demand for electricity. The commercial model for the operation of these power stations will be tested by the lack of an all-year-round market for additional gas-fired power when low demand in the summer months is satisfied by renewable electricity generation. Additional sources of indigenous gas and Mag Mell FSRU regasified LNG not only supports gas storage volumes independent of fixed import pipelines for security of energy supply but also potentially allows gas-fired power generation in the summer months to support hydrogen production through the electrolysis of water. Accelerating the roll-out of the hydrogen economy at competitive prices compared to energy derived wholly from fossil fuels will help to replace fuel oil, coal and potentially some natural gas usage and storage. Accelerating decarbonisation of the energy sector can occur where other forms of weather-dependent renewable energy cannot be applied all-year-around on a similar scale across as many industrial sectors.

A wholistic and inclusive approach to collaboration within the entire energy sector is needed to navigate a socially just pathway through the Energy Transition in order to meet the goal of mitigating against climate change and ameliorating the rise in energy costs which can lead to economic recession on a significant scale if left unchecked.

Whilst the Company has a "visionary" business development strategy aimed at establishing value through "First Mover" status, our primary objective remains to develop near-term shareholder value and to move towards generating an operating income. The focus is currently on Morocco to build in 2022 upon the success of the MOU-1 exploration well at Guercif. The pathway to monetisation of this asset is clear and the commercial model is compelling. The financial commitments are manageable and the potential for joint venture partners to carry some of the burden of financing is high.

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Predator Oil and Gas Holdings Plc

For the year ended 31 December 2021

Trinidad also offers a route to establishing a near-term operating revenue. The fiscal regime in Trinidad is however more challenging, the operating conditions are more demanding and the contractual arrangements are more complex. Lessons learnt during 2021 will be taken into account and applied to developing the Company's position in Trinidad during 2022. However Trinidad has the potential to be self-financing if the appropriate commercial agreements are entered into based on the in-country expertise the Company has established through the successful execution of CO2 EO operations..

Ireland is potentially a significant asset yet to crystallise in terms of value creation. If the Corrib South and Ram Head successor authorisations were to be awarded in 2022 the impact on supporting the Company's contingent and prospective resources would be material. Currently there is no significant shareholder value factored into these assets in Ireland.

During the period under review we have taken the opportunity, when possible and advisable to do so, to raise funds in the public markets. This is necessary for us to maintain our projects in good standing and to strengthen our hand in commercial negotiations with much larger potential partners by demonstrating our ability and track record to fund our projects ourselves if and when required to do so. The Company strengthened its finances through three oversubscribed Placings to raise an aggregate of £4,585,000 (before expenses). In so doing the Company was able to maintain the momentum of the roll-outof its business development strategy, particularly by executing the successful drilling operations in Morocco, without any dilution of its equity in its portfolio of assets. This has been achieved without entering into any debt arrangements and without taking on any onerous liabilities that cannot be funded by cash on the Company's balance sheet.

At a corporate level the Board was refreshed and the Company's operating and gas marketing experience was further enhanced with the appointment of Mr. Lonny Baumgardner as Chief Operating Officer. Mr. Ronald Pilbeam resigned from the Board.

As I write, the business outlook for the Company for the coming year is positive, attributable to a sustained rise in commodity prices due to supply constraints and geopolitical tensions in Europe. There is a growing acceptance of gas as a "greener" fossil fuel to provide Security of Energy Supply and to underpin the Energy Transition to help decarbonise the energy sector by replacing more carbon-intensive coal and oil. Gas can also work in tandem with Green Hydrogen projects to help roll-out the Green Hydrogen Economy. The further maturing of the Company's business development strategy focussed on gas, gas storage and sequestrating anthropogenic CO2, where commercially viable, dictates that our projects are well-placed to attract finance and project partners in 2022 by demonstrating their relevance to the Energy Transition.

I should like to thank our shareholders for their continued support and patience over the year. I expect the coming year once again to be both a busy one and an exciting one for our investors.

Paul Griffiths

Executive Chairman

28 June 2022

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