Corporate Governance

Principle 1 Establish a strategy and business model which promotes long-term value for shareholders

The Company is an oil and gas exploration specialist, with operations in Morocco, Trinidad and Ireland. Our goal is to deliver long term value for our shareholders. We aim to do this by identifying prospective and earlystage exploration projects. Consequently we:

• use our expertise to identify areas with economically feasible resources,
• assess the business environment of the target country and its attractiveness for prospecting and eventual development and production,
• understand existing interests in a licence area in order to ensure we can earn-in to existing interests on terms favourable to our shareholders.

Oil and gas exploration is by its nature speculative and we aim to reduce the risks inherent in the industry by careful application of funds in individual projects. We do that by:

• Reviewing existing exploration data;
• Establishing close in-country partnerships for our projects;
• Applying the most appropriate cost-effective exploration techniques in order to determine whether further work, using increasingly expensive exploration techniques, is justified; and
• Appreciating the likely realisation routes that will be available to us as the project moves towards development.

Principle 2 Seek to understand and meet shareholder needs and expectations

The Company is committed to engaging with its shareholders to ensure that its strategy, operational result and financial performance are clearly understood. We engage with our shareholders via webinars, holding investor presentations and through our regular reporting on the London Stock Exchange. Presentations are typically timed to follow the release of significant operational information and where appropriate interim and final results. LSE announcements include details of the website, and include phone numbers to contact the Company and its professional advisors. The Company has a zero tolerance to the potential dissemination of Inside Information which restricts the amount of information it can relay specific shareholder enquiries.

Private shareholders

The AGM is the main forum for dialogue with retail shareholders and the Board. The Notice of Meeting is sent to shareholders at least 21 days before the meeting. All Directors attend the AGM and are available to answer questions raised by shareholders. For each vote, the number of proxy votes received for, against and withheld is announced at the meeting. The results of the AGM are announced via the London Stock Exchange. In addition, the Executive Directors hold webinars and online interviews at which common shareholder queries are addressed where possible. Investors can contact us via our website or by email.

Retail shareholders also attend investor evenings held by our brokers or other industry bodies and we publicise our attendance via LSE announcements. In addition, our up to date Corporate presentation is made available on our website.

Institutional shareholders

The Directors actively seek to build a relationship with institutional shareholders. Shareholder relations are managed primarily by the Executive Chairman. The Executive Chairman makes presentations to institutional shareholders and analysts during the year, mainly in London, though also virtually. We also have ad-hoc meetings with our shareholders via conference call and email. The Board as a whole is kept informed of the views and concerns of major shareholders by the Executive Chairman. Any significant investment reports and research notes from analysts are also circulated to the Board. The Non-Executive Directors are available to talk with major shareholders if required to discuss issues of importance to them and are considered to be Independent from the executive management of the Company.

Principle 3 Take into account wider stakeholder and social responsibilities and their implications for long term success.

Aside from our shareholders, our most important stakeholder groups are our personnel and local partners and those local communities that may be impacted by our exploration activities. The Board is regularly updated on stakeholder issues and their potential impact on our business to enable the Board to understand and consider these issues in decision-making. The Board understands that maintaining the support of all its stakeholders is paramount for the long-term success of the Company.

Personnel

The Group does not have permanent staff in Jersey, Channel Islands. All staff are recruited under consultancy agreements as service providers. We aim to provide an environment which will attract the best, retain and motivate our team and we monitor the effectiveness by regular one-on-one discussion. Our goal is to treat all staff fairly and equally and to promote ethical behaviour, diversity and non-discrimination.

Local partners and communities

Our operations often provide employment in remote areas of developing countries. Essential to our success is the establishment of close working relationships with local partners. We seek local partners who have a good understanding of the local exploration and oil and gas exploration industry and regulations within their country, and with the capacity and capability to assist with the management and maintenance of the project.

We are mindful of our obligations to the local environment and operate to high levels of health and safety in respect of both our local workers and the local community. Staff training focuses on operating safety. Engagement with local communities is dependent on jurisdiction and the stage of exploration but is typically by public forum or with local or regional leaders, including site visits and workshops. Social projects in the local communities are dependent on local need and also the stage of exploration/level of project investment. As projects move forward, towards potential production activities, we seek to bring in partners who can credibly make the investments to move towards development and production. In doing so we have regard for their ability and desire to move projects forward, their industry reputation and their commitment to treating the local communities fairly and protecting the environment. We enter agreements that allow us to monitor their activities and have monthly updates on project progress.

Principle 4 Embed effective risk management, considering both opportunities and threats, throughout the organisation

Financial controls

The Company has an established framework of internal financial controls, the effectiveness of which is regularly reviewed by the Executive Management, the Audit Committee and the Board. The key financial controls are:

• The Board is responsible for reviewing and approving overall company strategy, approving new exploration projects and budgets, and for determining the financial structure of the Company including treasury, tax and dividend policy. Regular results and variances from plans and forecasts are reported to the Board;
• The Audit Committee, comprising the two Non-executive Directors, assists the Board in discharging its duties regarding the financial statements, accounting policies and the maintenance of proper internal business, and operational and financial controls;
• Regular budgeting and forecasting is performed to monitor the Company’s ongoing cash requirements and cash flow forecasts are circulated to the Board on a monthly basis;
• Actual results are reported against budget and prior year and are circulated to the Board;
• The Company has an investment appraisal system that considers expected costs against a range of potential outcomes arising from the exploration opportunities that we are invited to participate in;
• Regular reviews of exploration results are performed as the basis for decisions regarding future expenditure commitment;
• Due to the international nature of the business there are, at times, significant foreign exchange rate movement exposures. Cash flow forecasting is done at the ‘required currency’ level and foreign currency balances are maintained to meet expected requirements; and
• For exploration projects, we manage the risk of failure to find economic deposits by low cost early stage exploration techniques, with detailed analysis of results. Moving projects to more expensive exploration techniques requires a rigorous review of results data prior to deciding whether to proceed with further work.

Non-financial controls

The Board has ultimate responsibility for the Group’s system of internal control and for reviewing its effectiveness. However, any such system of internal control can provide only reasonable, but not absolute, assurance against material misstatement or loss. The Board considers that the internal controls in place are appropriate for the size, complexity and risk profile of the Group. The principal elements of the Group’s internal control system include:

• Close management of the day-to-day activities of the Group by the Executive Directors;
• An organisational structure with defined levels of responsibility, which promotes entrepreneurial decision-making and rapid implementation whilst minimising risks; and
• Central control over key areas such as capital expenditure authorisation and banking facilities.

The Group reviews at least annually the effectiveness of its system of internal control, whilst also having regard to its size and the resources available. As part of the Group’s plans we continue to review a number of non-financial controls covering areas such as regulatory compliance, business integrity, health and safety, and corporate social responsibility. All personnel are aware of their obligations under anti-bribery and corruption legislation.

Principle 5 Maintaining the Board as a well-functioning, balanced team led by the Chair

During the year under review the Board comprised the Executive Chairman, one Executive Director and two non-executive Directors. Casting vote is held by the non-executive Directors. During the year, there were 12 meetings, of which Paul Griffiths attended 12(100%), Lonny Baumgardner attended 12 (100%). Alistair Jury attended 12 (100%) and Carl Kindinger attended 12 (100%). Both non-executive Directors have extensive experience in the oil and gas industry and are qualified accountants. Both have considerable experience of serving on the Board of public companies and are expected to commit 3 days per month to the Group.

The Board is satisfied that it has a suitable balance between independence on the one hand, and knowledge of the Company and industry on the other, to enable it to discharge its duties and responsibilities effectively. All Directors are encouraged to use their independent judgement and to challenge all matters, whether strategic or operational.

The Board aim to meet at least monthly either formally or through a Board Call. The agenda is set by the Company Secretary in consultation with the Chairman and Managing Director. The standard agenda points include:

• Review of previous meeting minutes and actions arising therefrom;
• A report by the Managing Director covering all operational matters;
• Any update to the Register of Conflicts
• Updating the Insider Register and
• Any other business.

Directors’ conflict of interest

The Company has effective procedures in place to monitor and deal with conflicts of interest. The Board is aware of the other commitments and interests of its Directors, and changes to these commitments and interests are reported to and, where appropriate, agreed with the rest of the Board. A Register of Conflicts is maintained and is a standard agenda item at each Board Meeting. The Board has access to the Company’s advisers, including its brokers and its lawyers. The advisers do not typically provide materials for Board meetings except if requested to do so for the purposes of discussing upcoming regulations and other issues.

Board meetings are deemed quorate if two Board members are present and providing 7 days’ notice of such meeting has been given and waived by the non-attending Directors.

Directors and Officers Liability insurance is maintained for all Directors.

Principle 6 Ensure that between them the Directors have the necessary up-to-date experience, skills and capabilities

The Board is satisfied that, between the Directors, it has an effective and appropriate balance of skills and experience, particularly so in the area of oil and gas exploration and evaluation as per each of the Directors bios shown on pages 69 and 70. All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings by the Company Secretary. Contracts are available for inspection at the Company’s registered office and at the Annual General Meeting (“AGM”).

Directors are selected having regard to the Company’s needs for a balance of operational, industry, legal and financial skills. Experience of the Oil and Gas exploration industry is important but not critical, as is experience of running a public company.

All Directors retire by rotation at regular intervals in accordance with the Company’s Articles of Association. The Board makes decisions regarding the appointment and removal and re-election of Directors, and there is a formal, rigorous and transparent procedure for appointments. The Company’s Articles of Association require that at every AGM any director (i) who has been appointed by the board since the last AGM or (ii) who held office since the first of the three previous AGMs and who did not retire at either of them or (iii) who has been selected by the board for re-election shall retire from office and may offer himself for re-appointment by the members.

Independent advice

All Directors are able to take independent professional advice in the furtherance of their duties, if necessary, at the Company’s expense from lawyers, brokers and other professional advisors that they deem relevant. In addition, the Directors have direct access to the advice and services of the Company Secretary.

Principle 7 Evaluate Board performance based on clear and relevant objectives, seeking continuous improvement

In each 12 month reporting period we intend to review the performance of the team as a unit to ensure that the members of the Board collectively function in an efficient and productive manner. Over the same period the Non-Executive Directors will be seeking to set clear and relevant objectives for the Executive Directors, and for the Board as a whole. For further information on Directors, please refer to the Directors’ Remuneration report on pages 77 to 83.

Principle 8 Promote a culture that is based on ethical values and behaviour

The Board aims to lead by example and do what is in the best interests of the Company, its stakeholders and the environment. This is enacted through on-site meetings in the countries we do business in where all contractors and service personnel and consultants are reminded of their responsibilities to adhere to the strict guidelines laid down in our executed contracts and environmental assessments and approvals. We operate in remote and under-developed areas and ensure that our staff understand their obligations towards the environment and in respect of anti-bribery and corruption.

Principle 9 Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board

Board programme

The Board aims to meet monthly and as and when required. The Board sets direction for the Company through a formal schedule of matters reserved for its decision. During the year to 31st December 2023 the Board met 12 times. The Board and its Committees receive appropriate and timely information prior to each meeting; a formal agenda is produced for each meeting and Board and Committee papers are distributed by the Company Secretary several days before meetings take place. Any Director may challenge Company proposals and decisions are taken democratically after discussion. Any Director who feels that any concern remains unresolved after discussion may ask for that concern to be noted in the minutes of the meeting, which are then circulated to all Directors. Any specific actions arising from such meetings are agreed by the Board or relevant Committee and are then followed up by the Company’s management.

Roles of the Board, Chairman and Managing

The Board is responsible for the long-term success of the Company. There is a formal schedule of matters reserved to the Board. It is responsible for overall Group strategy, approval of exploration projects, approval of the annual and interim results, annual budgets, dividend policy and Board structure. It monitors the exposure to key business risks. There is a clear division of responsibility at the head of the Company. The Chairman is responsible for running the business of the Board and for ensuring appropriate strategic focus and direction.

The Managing Director (“MD”) is responsible for proposing the operational focus to the Board, implementing it once it has been approved and overseeing the management of the operations. The Executive Chairman is responsible for establishing and enforcing systems and controls, liaison with external advisors and communicating with shareholders.

All Directors receive regular and timely information on the Group’s operational and financial performance. Relevant information is circulated to the Directors in advance of meetings. The business reports regularly on its headline performance against its agreed budget; the Board reviews these updates and any significant variances at each board meeting.

Board committees

The Board is supported by the Audit and Remuneration committees. Each committee has access to such resources, information and advice as it deems necessary, at the cost of the Company, to enable the committee to discharge its duties. The two committees comprise both of the Non-Executive Directors.

The Audit Committee provides a formal review of the effectiveness of the internal control systems, the Group’s financial reports and results announcements and the external audit process. The Committee meets twice per year to review the published financial information and to meet with the Auditors.

The Remuneration Committee provides a formal and transparent review of the remuneration of the Executive Directors and senior personnel and makes recommendations to the Board on individual remuneration packages. The Committee met four times during the year.

The Audit Committee meets when required to consider the Company’s financial risks and mitigating actions (including financial controls), review audit plans and completion reports prepared by its auditor, and to review financial statements and recommend them for approval by the Board. This includes the appropriateness of the underlying accounting judgements, going concern and asset impairment considerations. The Audit Committee met twice during the year.

Principle 10 Communicate how the Company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders

The Company communicates with shareholders through the Annual Report and Accounts, full-year and halfyear results announcements, the Annual General Meeting (AGM) and one-to-one meetings with large existing or potential new shareholders. The Company regularly posts LSE announcements covering operational and corporate matters, such as drilling results and significant changes in ownership positions across historic projects in which it still retains an investment. A range of corporate information (including all Company announcements and a corporate presentation) is also available to shareholders, investors and the public on the Company’s corporate website.

The Board receives regular updates on the views of shareholders through briefings and reports from Investor Relations, the Executive Chairman and the Company’s brokers. The Company communicates with institutional investors through briefings with management. In addition, analysts’ notes and brokers’ briefings are reviewed to achieve a wide understanding of investors’ views.

The Company is aware of the new disclosure requirement with regards to the Task Force on Climate Related Financial Disclosures and have made such disclosures that are relevant to the Company’s current business strategies. Information relating to ESG and sustainability has been disclosed throughout these financial statements.