PetroNeft Resources : 2021 Annual Report

PetroNeft Resources plc

Annual Report and

Financial Statements

for the year ended 31 December 2021

PetroNeft Resources plc

Table of Contents
Group Information ..................................................................................................................................	2
Board of Directors...................................................................................................................................	4
Highlights ................................................................................................................................................	6
Chairman's Statement ............................................................................................................................	7
Chief Executive Officer's Report .............................................................................................................	9
Financial Review....................................................................................................................................	18
Directors' Report...................................................................................................................................	27
Independent Auditor's Report to the Members of PetroNeft Resources plc ......................................	34
Consolidated Income Statement ..........................................................................................................	41
Consolidated Statement of Comprehensive Income............................................................................	42
Consolidated Statement of Financial Position......................................................................................	43
Consolidated Statement of Changes in Equity .....................................................................................	44
Consolidated Cash Flow Statement ......................................................................................................	45
Company Statement of Financial Position............................................................................................	46
Company Statement of Changes in Equity ...........................................................................................	47
Company Cash Flow Statement ............................................................................................................	48
Notes to the Financial Statements........................................................................................................	49
Corporate Governance Code ..............................................................................................................	110
Section 172(1) Statement ...................................................................................................................	120
Glossary...............................................................................................................................................	123

Annual Report and Financial Statements

Forward Looking Statements

This report contains forward-looking statements. These statements relate to the Group's prospects, developments, and business strategies. Forward- looking statements are identified by their use of terms and phrases such as 'believe', 'could', 'envisage', 'potential', 'estimate', 'expect', 'may', 'will' or the negative of those, variations, or comparable expressions, including references to assumptions.

The forward-looking statements in this report are based on current expectations and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed or implied by those statements. These forward-looking statements speak only as at the date of these financial statements.

PetroNeft Resources plc

Group Information

Directors	Alastair McBain (British citizen- appointed 29 January 2021)
	(Non- Executive Chairman)
	David Sturt (British citizen) (Chief Executive Officer)
	Pavel Tetyakov (Russian citizen) (Vice President Business
	Development)
	Anthony Sacca (Australian citizen) (Independent Non-
	Executive Director)
	Daria Shaftelskaya (Non-Executive Director)
	Eskil Jersing (British citizen - appointed 1 November 2021),
	(Independent Non - Executive Director)

Registered Office and Business Address	20 Holles Street
	Dublin 2
	Ireland
Secretary	Michael Power FCA
Auditor	BDO
	Beaux Lane House
	Mercer Street Lower
	Dublin 2
	Ireland
Nominated Adviser and	Davy
Euronext Growth Market Adviser	49 Dawson Street
	Dublin 2
	Ireland

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PetroNeft Resources plc

Group Information (continued)

Broker	Davy
	49 Dawson Street
	Dublin 2
	Ireland

Principal Bankers	KBC Bank Ireland	AIB Bank
	Sandwith Street	1 Lower Baggot Street
	Dublin 2	Dublin 2
	Ireland	Ireland

Raiffeisen Bank

Novosibirsk branch

Tomsk

Russia

Solicitors	Byrne Wallace
	88 Harcourt Street
	Dublin 2
	Ireland
Registered Number	408101

Registrar	Computershare
	3100 Lake Drive,
	Citywest Business Campus,
	Dublin 24, D24 AK82,
	Ireland

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PetroNeft Resources plc

Board of Directors

Alastair McBain - (Non-Executive Chairman) (Age 66)

Alastair was appointed a Non-Executive Director of the Company in January 2021 and became Non-Executive Chairman on 19 February 2021. He has had a highly successful 37 years career in the international oil and gas industry. Initially working for 17 years at Royal Dutch Shell in numerous senior international commercial positions. He joined the Vitol group in 1995 to head up the growth of the group's portfolio of upstream assets and became CEO of Arawak Energy in 2002. He grew the company from an initial US$20M valuation with zero production to a US$0.5Bn company producing 12,000 boepd from assets in Kazakhstan, Russia, and Azerbaijan. He also oversaw the migration of Arawak Energy from a junior listing on the Toronto exchange to a full listing on the London Stock Exchange. Following Arawak's acquisition by Vitol, he worked with Vitol in a variety of senior positions including board Chairman of GeoAlliance, one of Ukraine's leading independent producers of natural gas and gas liquids. He left Vitol in early 2020 to form Sarum Energy, a company which acquired a 50% interest in Licence 67. Sarum Energy still retains a 10% interest in Licence 67, having sold the remaining 40% to PetroNeft in March of 2021. He holds an MA in Oriental Studies from the University of Oxford and in addition to his native English, is also a fluent Mandarin speaker.

David Sturt - (Chief Executive Officer and Executive Director) (Age 60)

David was appointed a Non-Executive Director of the Company in April 2016 and became Chief Executive Officer on 25 March 2019. He was a member of the Remuneration Committee up until his appointment as CEO. David has over 35 years international experience in the oil and gas industry gained working on projects in Europe, CIS, Africa, and SE Asia in a variety of senior technical and managerial positions at Conoco-Philips, Hess, PetroKazakhstan, Exillon Energy, Ukrnafta and Azimuth Energy. In 2010 he was a founding partner in VistaTex Energy which built a portfolio of producing assets across the onshore US, the company was later successfully sold to Dome Energy in 2014. In June 2022 he resigned his position as a non-Executive director of Petrosibir AB, a Swedish Company with oil and gas interests in the Bashkiria and Komi regions of Russia. David holds a BSc honours degree in Earth Sciences from Kingston University, an MSc degree in Exploration Geophysics from Leeds University, and a postgraduate diploma in business administration from Heriot Watt University.

Pavel Tetyakov - (Vice President Business Development and Executive Director) (Age 42)

Pavel was appointed to the Board as an Executive Director in January 2020. He has 20 years of experience in senior and top management positions working for a variety of E&P companies including: PetroKazakhstan, Exillon Energy, Ukrnafta, Sibgasoil and Petrosibir. His main areas of expertise are M&A and operations management. He negotiated the acquisition of several licences in PetroKazakhstan, was responsible for building the asset portfolio of Exillon Energy, managed divestment of Sibgasoil oil fields in several regions of Russia and led the transformation of Petrosibir that resulted in improved operational performance and new oil field discoveries. He joined the Company in May 2016 as Vice-President Business Development. In July 2018 Mr Tetyakov took over the management of the Russian subsidiaries of PetroNeft as General Director. Pavel holds a Bachelor of Arts degree in Business Administration from Budapest University of Economic Sciences and Public Administration

Anthony Sacca - (Independent Non-Executive Director) (Age 50)

Anthony was appointed an Independent Non-Executive Director of the Company in April 2016. He is chairman of the Audit Committee. He is principal of Karri Tree Executive Coaching. Anthony was previously the Chief Financial Officer of Rolf Group of Companies, one of Russia's largest independent automotive distributor/retailers. Prior to that he was a Partner with PwC in Moscow. Anthony is a Fellow of the Institute of Chartered Accountants in Australia and New Zealand. He holds a Bachelor of Business and Administration (Distinction) from Curtin University of Technology Perth, Australia. He is a member of the Russian Independent Directors Association and is a Fellow Chartered Director with the Institute of Directors in the United Kingdom.

Daria Shaftelskaya - (Non-Executive Director) (Age 43)

Daria was appointed a Non-Executive Director in January 2020. She has 20 years of experience in the oil & gas exploration and production business within the West-Siberian basin (Tomsk region). More recently she has been working as chief financial officer in several Russian companies including: "Finco", "Hermes - Moscow" and "Sever" where she was primarily focused on oil & gas trading and operational facilities construction in the West Siberian region. She holds a degree in economics and engineering from Tomsk Technical University (1999) and a Master's Degree in Economics also from Tomsk Technical University (2001).

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