Annual results for the year ended 31 December 2022

Fenikso Limited

06 June 2023

 

06 June 2023

Fenikso Limited

("Fenikso" or "the Company")

Annual results for the year ended 31 December 2022

Fenikso Limited (AQSE: FNK) the Cayman Islands enterprise company, announces its final audited results for the year ended 31 December 2022 (the "Accounts").

A copy of the Accounts will shortly be available on the Company's website: https://feniksoplc.com/investors/corporate-documents/

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.

For further information, please visit https://feniksoplc.com/ or contact:

Fenikso Limited   Thomas Richardson Chairman	[e-mail]
First Sentinel Corporate Finance Ltd (AQSE Corporate Adviser) Brian Stockbridge	[phone]

Fenikso Limited

Financial statements

For the year ended 31 December 2022

Company information

Directors
	Tom Richardson (Chairman)
	Marco D'Attanasio (Non-Executive Director)
	Pade Durotoye (Non-Executive Director)
Company registration number	Cayman Islands, CWK-248859
Registered office	Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue George Town Grand Cayman KY1-9008 Cayman Islands
Auditor	Bright Grahame Murray Emperor's Gate 114a Cromwell Road Kensington London SW7 4AG
Corporate Adviser	First Sentinal Corporate Finance Limited 72 Charlotte Street London, W1T 4QQ
Broker	Tennyson Securities 65 Petty France London SW1H 9EU
Website	feniksoplc.com

Contents

Chairman's statement                                                                                              4

Strategic report                                                                                                         5

Report of the directors                                                                                              7

Corporate governance statement                                                                            11

Audit & risk committee report                                                                                  13

Remuneration report                                                                                               14 

Report of the independent auditor                                                                           15

Statement of comprehensive income                                                                      19

Statement of financial position                                                                                 20

Statement of changes in equity                                                                                21

Statement of cash flows                                                                                           22

Notes to the financial statements                                                                             23

Chairman's statement

2022 was a challenging year for Fenikso Limited (the "Company", formerly known as Lekoil Limited). The first three quarters of the year were spent in litigation against Lekoil Nigeria where the Company worked on multiple fronts to try and recover the value of the assets that its money had funded since the IPO in 2013. The litigation was across multiple jurisdictions and extremely complex. In Q4 of 2022 both parties agreed the basis for a settlement that was finalised on December 31^st 2022. The settlement resulted in the Company changing its name to Fenikso and exchanging all subsidiary companies and inter company loans in return for a US$51.9 million loan from Lekoil Nigeria payable out of the proceeds of oil sales from the Otakikpo production. The settlement was supported by the board and the majority of shareholders in the December EGM.

As a result of the litigation Fenikso was left with significant financial liabilities which had impacted its position as a going concern throughout 2022. Since the settlement the Company has settled the majority of its current liabilities and is now looking forward to building a positive cash position before the end of 2023. The primary focus for the board during 2022 was to try to recover as much value for Fenikso shareholders as possible. The board is now focused on ensuring the Company is in a stable financial position in 2023 and can assess the best way forward to further enhance shareholder value with the cash that it receives from Lekoil Nigeria. The board is focused on repaying historic creditors as soon as possible, starting to repay the loan to Savanah Energy and keeping costs at a minimum whilst it stabilises the Company and works on the new strategy for Fenikso. I believe that the Company will soon be in a position to consider a number of different options that it can discuss with shareholders on how best to create value from the money received from the repayment of the loan from Lekoil Nigeria.   

Financial review

The Company's financial position as at the end of 2022 was very simple. It ended the year with one major asset which the loan outstanding to Lekoil Nigeria of US$51.9 million that is to be repaid from the proceeds of oil sales at the Otakikpo field. In terms of liabilities the Company had approximately US$2.6 million owed to creditors who had provided services during the litigation and settlement process. In addition the Company agreed to pay Savanah Energy US$16.2 million (to be paid out of the repayment of the loan from Lekoil Nigeria) in return for the cancellation of its option agreement over the Mayfair Loan and the cancellation of its 25% shareholding in Fenikso Limited. The Company's only current source of income is from the proceeds of oil sales at the Otakikpo field in Nigeria. The oil sales take place on approximately a six to eight week basis and so far the Company has received 3 payments under this settlement agreement. The Company has no subsidiaries and has no remaining liabilities in connection with any of its historic subsidiaries. The Company has three board members and is listed on the AQSE stock exchange in the United Kingdom. 

Corporate Structure and Board and Management update

The Company has simplified its corporate structure, having sold all its subsidiaries and restructured all its inter company loans into one loan owed by Lekoil Oil & Gas Investments (which in turn owns a 40% interest in the Otakikpo oil and gas field in Nigeria). The board consists of three people Marco D'Attanasio, Tom Richardson and Pade Durotoye. Pade is a representative of Savanah Energy and sits on the board to ensure Savanah's rights under their loan are upheld. Tom Richardson carries out the executive functions required in the Company as it pays down its creditors. The Board does not intend to hire any management until such a point where its strategy would require a management team. The Board is able to carry out the day to day activities of the Company to keep it listed and stabilise the financial position of the business. 

Outlook

The Board is optimistic we can stabilise the financial position of Fenikso over 2023 and be in a position to grow shareholder value from the cash received under the Lekoil Nigeria loan agreement. We thank our shareholders for their support during this period whilst we work on a new strategy for the Company.

Tom Richardson

Chairman                                                                      6 June 2023

 

Strategic Report

PRINCIPAL ACTIVITY, FINANCIAL REVIEW, OPERATIONS REPORT AND ASSET SUMMARY

PRINCIPAL ACTIVITY

The Company is an exempted limited liability company incorporated and registered in the Cayman Islands on 3 December 2010.

Fenikso is the restructured holding company that used to be called Lekoil Limited. The Company holds one main asset which is a US$51.9 million loan made to Lekoil Oil & Gas Investments ("LOGI"), a wholly owned subsidiary of Lekoil Nigeria. The Company is an AQSE listed enterprise company. These accounts are for the Company only on the basis of the principal accounting policy for 'Consolidation' included in Note 1.

FINANCIAL REVIEW

Financial overview and performance

The Company reported a loss of $15,397,000 for the year ended 31 December 2022. (restated 2021: $326,417,000) The loss was primarily as a consequence of the impairment of the Company's intercompany receivables (Note 12) following a restructure and settlement agreement.

Net assets of the Company at the year end were $19,518,000 (restated 2021: $34,187,000). Cash balances as at the year end were $208,000. (2021: $50,000).           

OPERATIONS REPORT AND ASSET SUMMARY

The Company no longer operates or oversees operations of any Oil & Gas assets in Nigeria. The principal business of the Company is to manage and ensure the full recovery of the LOGI Loan. The Company has received three payments under the LOGI Loan as at the end of May 2023 and the Board will continue to monitor the compliance with the terms and conditions of the LOGI Loan. As at the end of May 2023 LOGI had complied with all conditions of the settlement agreement save for the cancellation of certain shares in the Company owned by Lekoil Nigeria, Lekan Akinyami and Samuel Olutu. The total shares that should have been cancelled are 107,658,847 ordinary shares and the Company is working with such parties to cancel such shares as soon as practicably possible. In the interim, the relevant holders have agreed to not vote such shares in any general meeting.  All other conditions under the loan have been satisfied to date.

Principal risks and uncertainties

The principal risk of the business is the non-payment of the LOGI Loan, which leads to the Company having no income to cover costs and build shareholder value. This is the Company's only current source of income. The possible risks to non payment are:

1.   LOGI fails to pass on the proceeds from the sale of oil at the Otakikpo field

2.   The Otakikpo field has to shut in all production and has no sales of oil

3.   The Oil price falls to such an extent that the value of the oil sales is insufficient to cover the running costs of the Company

4.   The crude oil sales are from oil sales in Nigeria. This means the income of the company is exposed to changes in the political and economic environment in Nigeria that could prevent the repayment of the loan.

Going concern

The assessment of the going concern risk has been detailed in the Directors' Report.

Liquidity risk

The Company manages its liquidity through the repayment of the LOGI Loan by LOGI. The Company's liquidity position could be at risk should the repayments stop for any reason.

Credit risk

The Company's principal financial asset is the LOGI Loan. This is secured against the proceeds from oil sales at the Otakikpo field. There is always a risk with Oil & Gas that production may have to be shut in or that the Oil price could fall substantially both of which would impact the value of the Company's assets.

This strategic report was approved by the Board on 6 June 2023 and signed on its behalf.

Tom Richardson Chairman

6 June 2023

Report of the Directors

The Directors present their report and the audited financial statements of the Company for the year ended 31 December 2022.

RESULTS FOR THE YEAR

The Company has made a loss of $15.4 million (restated 2021: loss of US$326.4 million).

DIVIDENDS

The Directors are unable to recommend the payment of a dividend (2021: Nil).

ACCOUNTING POLICIES

The Company's accounting policies and details of the significant judgments and critical accounting estimates are disclosed within the notes to the financial statements.

DIRECTORS AND THEIR INTERESTS

The Directors who served during the year are listed below.

Name	Period as a Director of the Company
Anthony Hawkins	1 January 2022 to 30 June 2022
Tom Richardson	8 January 2022 to 31 December 2022
Marco D'Attanasio	21 April 2022 to 31 December 2022
Al Tindall	1 January 2022 2021 to 30 June 2022
Olapade Durotoye	1 January  2022 to 31 December 2022
Adeoye Adefulu	1 January 2022  to 31 December 2022
Guy Oxnard	9 June 2022 to 31 December 2022
Dipo Sofola	9 June to 31 December 2022

As at 31 December 2022, none of the then current Directors of the Company had any legal or beneficial interest in the share capital of the Company other than as follows:

Director's Name	Beneficial Interest held via	Number of ordinary shares held by legal or beneficial owner at 31 December 2022	Percentage of Company's issued share capital held by legal or beneficial owner at 31 December 2022
Tom Richardson	TDR Enterprises	21,807,151	3.6%
Marco D'Attanasio	Hadron Master Fund	25,025,000	4.2%

DIRECTORS' RESPONSIBILITIES STATEMENT

The directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law and the Company's Articles of Association require the directors to prepare financial statements for each financial year using International Financial Reporting Standards (as adopted by the European Union (IFRSs)). Under company law the directors must not approve the financial statements unless they are satisfied

that they give a true and fair view of the state of affairs and profit or loss of the Company for that period. In preparing these financial statements, the directors are required to:

§  select suitable accounting policies and then apply them consistently;

§  make judgements and accounting estimates that are reasonable and prudent;

§  state whether applicable IFRSs have been followed, subject to any material departures disclosed and explained in the financial statements;

§  prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company's transactions and disclose with reasonable accuracy at any time the financial position of the company. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The directors confirm that:

§  in so far as each of the directors is aware, there is no relevant audit information of which the company's auditor is unaware; and

§  the directors individually have taken all steps that they ought to have taken to make themselves aware of any relevant audit information and to establish that the auditor is aware of that information.

GOING CONCERN

The Directors have assessed the ability of the Company to continue as a going concern having prepared detailed cash, funding and liquidity forecast through to June 2024. The Directors, having made due and careful enquiry, are of the opinion that the Company will have access to adequate working capital to meet its obligations over the next 12 months from the date of approval of these financial statements. The Directors therefore have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in the preparation of the annual financial statements.

CORPORATE ADVISORS

The Company's AQSE corporate adviser during 2022 was First Sentinel Corporate Finance Limited.  Bright Grahame Murray act as auditors to the Company.

DIRECTORS' INDEMNITY AND INSURANCE

The Company provides indemnity to Directors in respect of liabilities incurred as a result of their office. However, neither the indemnity nor the insurance provides cover if the Director is proven to have acted dishonestly or fraudulently.  The Company provided directors and officers insurance for its directors for the financial year ended 31 December 2022.

POST-REPORTING DATE EVENTS

All events that have occurred since the year end which require reporting have been disclosed in the financial statements and/or the Chairman's Statement.

HEALTH, SAFETY AND ENVIRONMENT

The Company is committed to fulfil its health, safety, and environmental responsibility. The Company has limited operational activities outside of office based activities. There have been no known breaches of HSE or environmental laws during the reporting period.

FINANCIAL INSTRUMENTS

Details of the use of any financial instruments by the Company are contained in the financial statements.

INDICATION OF FUTURE DEVELOPMENTS

The details of the future developments of the Company are given in the Strategic Report.

FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The details of financial risk management are given in the Strategic Report.

BOARD MEMBERS

The current Board is constituted by the following members:

Mr. Tom Richardson, Chairman

Mr. Richardson has over 20 years of experience across banking and oil & gas. Mr Richardson served as CFO of Nostrum Oil & Gas Plc a UK premium listed company. Prior to joining Nostrum in 2011, Mr Richardson has worked for ING, JP Morgan and NM Rothschild covering investment banking, capital markets and credit.

Mr. Olapade Durotoye, Non-Executive Director

Pade Durotoye is the Chief Executive Officer and Founder of West Titan Energy. He has over 32 years of management experience across the value chain of the oil and gas Industry internationally.

He began his career with Schlumberger Oilfield Services where he worked in various Management capacities in Field Operations, Operations Management, Line (Country) Management, Human Resources Management and Business Development for close to 20 years in 8 countries in Africa, Europe and Asia.

He served as the MD/CEO of Ocean and Oil Holdings Group, a principal investment and advisory services group, where advised on and in some cases led the company's Management and Technical Services advisory contract with Oando. He was a core member of Oando's Group Leadership Council and a key part of the company's Upstream Diversification Strategy & Execution Team that acquired oilfield assets and drilling rigs.

Pade served as Managing Director/CEO of Oando Energy Resources (OER), a position he held for over 8 years. In his capacity as MD/CEO, he led the team that delivered on the acquisition of the Nigerian upstream

oil and gas business of ConocoPhillips in 2014, making OER Nigeria's leading Indigenous Independent Oil Company by production with over 40,000boepd of oil and gas and 16 participating Licenses in Nigeria and the Gulf of Guinea. He proceeded to join Nigerdock FZE as Managing Director/CEO, where he served for a year to strategically direct the organization.

Pade has a deep knowledge of the oil and gas sector and is passionate about resolving value traps in in the industry. He holds a BSc. Electronics and Engineering from the University of Ife (now Obafemi Awolowo University) and is a member of several professional bodies and associations which include the Society of Petroleum Engineers, the Nigeria Society of Engineers, and the Institute of Directors.

Mr. Marco D'Attanasio, Non-Executive Director

Mr D'Attanasio is a senior banker and investment manager with over 23 years of experience in banking, finance, technology and oil & gas. He is the Founder and Portfolio Manager for Hadron Capital LLP and Hadron Capital (Cayman) Limited, each company managing numerous Alternative Investment Funds and being FCA and CIMA regulated, respectively. With Hadron Capital LLP he is the winner of multiple performance-based awards. He is the co-founder of Cricklo Ltd, an online community of professionals active in transforming their enterprises into sustainable businesses and a NED with Argo Blockchain plc. Mr D'Attanasio has a degree in physics ("Laurea") from Pisa University and a PhD in Theoretical Physics from Parma University.

BOARD COMMITTEES

As at 31 December 2022, the Audit& Risk and Remuneration Committees of the Board of Directors have the following directors as members:

Audit & Risk Committee

Name	Position
Tom Richardson	Member
Marco D'Attanasio	Member

Remuneration Committee

Name	Position
Tom Richardson	Member
Marco D'Attanasio	Member

This report was approved by the board on 6 June 2023 and signed on its behalf.

T Richardson Chairman

6 June 2023

Corporate Governance Statement

The Company has formally adopted the Quoted Companies Alliance Corporate Governance Code for Small and Mid-Size Quoted Companies ("QCA Code") and its replacement, the QCA Corporate Governance Code that was published in April 2018. The Company's application of the QCA Code is set out on its website (feniksoplc.com) and is updated from time to time.

The Company recognises the importance of sound corporate governance commensurate with the size, corporate structure and nature of the Company, even though there is no applicable regime of corporate governance to which Directors of a Cayman Islands company must adhere to over and above the general fiduciary duties of care, diligence and skill imposed on such Directors under Cayman Islands law.

The Company updated its policies in line with the EU Market Abuse Regulation ("MAR") with effect from 3 July 2016 (and as applied in the United Kingdom pursuant to applicable English law).

The Company will continue to implement internal policies as necessary to provide guidance on Corporate Governance issues. These policies are the same as those summarised in the Company's Annual Report for the year ended 31 December 2021.  These policies are reviewed periodically to ensure continued relevance:

·      Related Party Transactions Policy

·      Disclosure and Insider Trading Policy

·      Share Dealing Code

·      Whistleblowing Policy

·      Anti-Bribery Policy

·      Risk Management Policy

·      Gifts and Hospitality Policy

·      Code of Ethics

·      Safety, Health, Environment and Security Policy

The Company implements these policies in a manner commensurate with the size and available resources.  In the course of preparing this Annual Report and Accounts, the Board has noted the need to review the Corporate Governance framework and its practical implementation.

Website publication

The Company's Corporate Governance statement is published on its website.  The Directors are responsible for ensuring the annual report and the financial statements are made available on a website. Financial statements are published on the Company's website in accordance with legislation in the United Kingdom governing the preparation and dissemination of financial statements, which may vary from legislation in other jurisdictions. The maintenance and integrity of the Company's website is the responsibility of the Directors.

Auditor

All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of any information needed by the Company's auditor for the purposes of their audit and to establish that the auditor is aware of that information. The Directors are not aware of any relevant audit information of which the auditor is unaware.

Business model and strategy

Information on our strategy is included in the Strategic Report set out above.

Obligations to our stakeholders

We are committed to communicating openly with our shareholders and stakeholders to ensure that our strategy, our financial position and the effects of those on our stakeholder is clearly understood.

Review of risks

The Board is responsible for setting the Company's risk philosophy and appetite and approving the overall risk management policy. It is responsible for maintaining a sound system of internal control that supports the achievement of its goals and objectives. 

The Board is also responsible for overseeing the establishment, implementation and review of the Company's risk management systems and, to this end, has delegated certain functions relating to risk to the Audit and Risk Committee and to management.

The Company has adopted a Risk Management Policy appropriate for a company of its size and resources.

Management framework

As at 31 December 2022, the Board comprised of an Executive Chairman and two Non-Executive Directors. The Company believes that its current composition is appropriate for the Company given its current corporate structure and financial resources. Each Board member brings a wealth of business leadership experience to foster the collective strength of the Board in setting the strategic goals of the Company and overseeing the effective performance of management in achieving these goals.

Under their appointment letters, the Company may call on the Directors to spend at least 20 days per year on Company business.

Directors

We believe that our Board has the appropriate balance of skills, experience and capabilities required to direct the management of the Company. These include sector-specific experience in the oil and gas industry, as well as more general finance, accounting and business management skills.

The Board is supported by the Audit & Risk and Remuneration Committees, the terms of reference of which can be found on our website.

Succession planning is managed through regular reviews and management discussions. The composition of the Board will reflect the size of the Company and the resources available to it.

Reward

The Company manages its activities via the Board of Directors and one executive director. Of the Company's two non-executive directors, one is rewarded in cash, while the other receives no fee.

Further information

The Corporate Governance section of our website sets out our approach to corporate governance, and the roles and responsibilities of the Chairman and any other Directors who have specific individual responsibilities or remits (e.g. for engagement with shareholders or other stakeholder groups) are shown.

The roles and terms of reference of the Audit & Risk Committee and Remuneration Committee, and a formal written schedule of matters reserved for the Board are also shown on the Company's website https://feniksoplc.com/.

Previous annual reports and other corporate documents, including notices of all general meetings held in the last five years, are also available on the Company's website https://feniksoplc.com/.

Audit & Risk Committee Report

Composition

As at 31 December 2022, the Committee was composed of Tom Richardson and Marco D'Attanasio, each of whom  have relevant financial experience.

Role and Responsibilities

The Audit & Risk Committee's terms of reference designate the role and responsibilities of the audit committee

These are available on the Company's  website https://feniksoplc.com/

2022 Financial reporting

The following are the main key judgements and new accounting standards that were considered by the Committee in its review of the 2022 full year Financial Statements:

·      Going Concern basis of accounting;

·      Assessment of impairment;

·      Assessment of impairment of inter-company receivables; and

·      the impact of new accounting standards.

Internal Controls

The internal control framework is based on the Company's assessment of the risks it faces. The effectiveness of the internal control system is monitored by the Board, and material exceptions are reported to the Committee.  The Company does not consider it appropriate, given its size and complexity, to have an internal audit function.

External auditor

Bright Grahame Murray were first appointed auditors of the Company in May 2022. The Committee has recommended to the Board that the auditors are reappointed for the year ending 31 December 2023. Bright Grahame Murray has expressed a willingness to continue in office as auditor and a resolution to re-appoint them will be proposed at the next Annual General Meeting of the Company. 

Remuneration report

Composition and Role

As at 31 December 2022, the remuneration committee (the "Remuneration Committee") was composed of Thomas Richardson and Marco D'Attanasio.

The Remuneration Committee is responsible for determining and reviewing the terms and conditions of service (including remuneration) and termination of employment of Executive Director(s), and the administration of the Company's share option and share award schemes. It is responsible for determining individual remuneration packages including, where appropriate, bonuses, incentives and share options.

Remuneration Policy

The Remuneration Committee, in forming its policy on remuneration has given due consideration to the needs of the Company, Shareholders and best practice provisions set out in the QCA Code.

There is no pension scheme for Non-Executive Directors.

Performance Share Plan

There were no share awards in 2022.

Options

There were no share awards in 2022.

Independent auditor's report to the members of Fenikso Limited

Opinion

We have audited the financial statements of Fenikso Limited (the 'company') for the year ended 31 December 2022 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom adopted International Accounting Standards.

In our opinion the financial statements:

·    give a true and fair view of the state of the company's affairs as at 31 December 2022 and of its loss for the year then ended;

·    have been properly prepared in accordance with United Kingdom adopted International Accounting Standards.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. 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 in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, 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.

Emphasis of matter - LOGI Loan

The directors have prepared the financial statements on the going concern basis as they do not intend to liquidate the company or to cease its operations, and as they have concluded that the company's financial position means that this is realistic. They have also concluded that there are no material uncertainties that could have cast significant doubt over its ability to continue as a going concern for at least a year from the date of approval of the financial statements ("the going concern period").

We are required to report to you if we have concluded that the use of the going concern basis of accounting is inappropriate or there is an undisclosed material uncertainty that may cast significant doubt over the use of that basis for a period of at least a year from the date of approval of the financial statements. In our evaluation of the director's conclusions, we considered the inherent risks to the company's business model and analyzed how those risks might affect the company's financial resources or ability to continue operations over the going concern period. We have nothing to report in these respects.

However, as we cannot predict all future events or conditions and as subsequent events may result in outcomes that are inconsistent with judgments that were reasonable at the time they were made, the absence of reference to a material uncertainty in this auditor's report is not a guarantee that the company will continue in operation.

We specifically draw attention to the principal risks and uncertainties surrounding the LOGI loan as set out in the Strategic Report. This loan is the company's sole source of income and any issues with the recoverability of this loan will have a consequential impact on the company's income and its ability to build shareholder value. These risks include:

·      LOGI not adhering to the terms of the settlement agreement by failing to pass on the proceeds from the sale of oil at Otakikpo field.

·      Production being shut with no consequential sale of oil.

·      Fall in oil prices to such an extent that the overhead costs cannot be covered.

·      Political and economic risks prevalent in Nigeria.

Our opinion is not modified in this regard.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the director's use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report. Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. 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.

Responsibilities of directors

As explained more fully in the director's responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determines are 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, the directors are responsible for assessing the company'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 the directors either intend to liquidate the company or to cease operations, or have 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 (UK) 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.

Extent to which the audit was considered capable of detecting irregularities, including fraud

We identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and then design and perform audit procedures responsive to those risks, including obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion.

In identifying and addressing risks of material misstatement in respect of irregularities, including fraud and non- compliance with laws and regulations, our procedures included the following:

·    We obtained an understanding of laws and regulations that affect the company, focusing on those that had a direct effect on the financial statements such as or that had a fundamental effect on its operations such as AQSE Growth Market regulations .

·    We enquired of the directors and reviewed directors meeting minutes for evidence of non-compliance with relevant laws and regulations. We also reviewed controls the directors have in place to ensure compliance.

·    We gained an understanding of the controls that the directors have in place to prevent and detect fraud. We enquired of the directors about any incidences of fraud that had taken place during the accounting period.

·    The risk of fraud and non-compliance with laws and regulations and fraud was discussed within the audit team and tests were planned and performed to address these risks. We identified the potential for fraud in the following areas: related parties outside normal course of business, management override, misappropriation of cash and other assets and compliance with specific legal frameworks that are applicable to the client, as detailed above.

·    We reviewed financial statements disclosures and tested to supporting documentation to assess compliance with relevant laws and regulations discussed above.

·    We enquired of the directors about actual and potential litigation and claims.

·    We performed analytical procedures to identify any unusual or unexpected relationships that might indicate risks of material misstatement due to fraud.

·    In addressing the risk of fraud due to management override of internal controls we tested the appropriateness of journal entries and assessed whether the judgements made in making accounting estimates were indicative of a potential bias.

Due to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with auditing standards. For example, as with any audit, there remained a higher risk of non-detection of irregularities, as these may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing fraud or non-compliance with laws and regulations and cannot be expected to detect all fraud and non-compliance with laws and regulations.

A further description of our responsibilities is available on the Financial Reporting Council's website at: https:// www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members as a body. Our audit work has been undertaken so that we might state to the company's member those matters we are required to state to the member in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's member for our audit work, for this report, or for the opinions we have formed.

Ahsan Miraj

Senior Statutory Auditor

For and on behalf of Bright Grahame Murray

Emperor's Gate

114a Cromwell Road

Kensington

London

SW7 4AG

Date: 6 June 2023

Statement of comprehensive income

	Note		2022 $000	2022 $000	2021 Restated $000	2021 Restated $000
			Continuing Operations	Total	Continuing Operations	Total
OTHER OPERATING INCOME
Cost of sales			-	-	-	-
Gross (loss)			-	-	-	-
Impairment of investments	11		-	-	(7,396)	(7,396)
Cancellation of share based payment  reserve	16		-	-	(10,259)	(10,259)
Impairment of intercompany receivables	12		-	-	(306,697)	(306,697)
Fair value adjustment of  receivables	12		(20,710)	(20,710)	-	-
Impairment of loan receivable	12		-	-	(1,647)	(1,647)
Fair value adjustment borrowings	14		6,839	6,839	-	-
Recurring administrative costs			(1,526)	(1,526)	(418)	(418)
OPERATING LOSS	3		(15,397)	(15,397)	(326,417)	(326,417)
Finance income	6		-	-	-	-
Finance cost	7		-	-	-	-
PROFIT/(LOSS) FROM CONTINUING ACTIVITIES BEFORE TAXATION			(15,397)	(15,397)	(326,417)	(326,417)
Tax expense	8		-	-	-	-
LOSS FOR THE YEAR ATTRIBUTABLE TO THE EQUITY HOLDERS			(15,397)	(15,397)	(326,417)	(326,417)
TOTAL COMPREHENSIVE LOSS ATTRIBUTABLE TO THE EQUITY HOLDERS			(15,397)	(15,397)	(326,417)	(326,417)
Loss per share - basic	9		(0.02)	(0.02)	(0.61)	(0.61)
Loss per share - diluted	9		(0.02)	(0.02)	(0.61)	(0.61)

Statement of financial position

			2022		2021 Restated
		Note	$000		$000
CURRENT ASSETS
Trade and other receivables falling due within one year		12	2,114		-
Cash and cash equivalents			208		50
TOTAL CURRENT ASSETS			2,322		50
Trade and other receivables falling after one year		12	29,095		51,919
TOTAL ASSETS			31,417		51,969
EQUITY
Share capital		15	30		27
Share premium account			264,729		264,004
Share based payment reserve			-		-
Retained earnings			(245,241)		(229,844)
TOTAL EQUITY			19,518		34,187
CURRENT LIABILITIES
Trade and other payables falling due within one year		13	4,501		1,526
TOTAL CURRENT LIABILITIES			4,501		1,526
Trade and other payables falling due after one year		13	7,398		16,256
TOTAL LIABILITIES			11,899		17,782
TOTAL EQUITY AND LIABILITIES			31,417		51,969

These financial statements were approved by the directors on 6 June 2023 and are signed on their behalf by:

T Richardson Chairman

6 June 2023

Statement of changes in equity

	Share capital	Share premium account	Share based payment reserve	Retained earnings	Total equity
	$000	$000	$000	$000	$000
At 1 January 2022	27	264,004	-	(229,844)	34,187
Loss for the year	-	-	-	(15,397)	(15,397)
Total comprehensive  income	27	264,004	-	(245,241)	18,790
Transactions with owners:
Shares issued	13	1,863	-	-	1,876
Shares cancelled	(10)	(1,138)	-	-	(1,148)
Total transactions with owners	3	725	-	-	728
At 31 December 2022	30	264,729	-	(245,241)	19,518

	Share capital	Share premium account	Share based payment reserve	Retained earnings	Total equity
			Restated	Restated	Restated
	$000	$000	$000	$000	$000
At 1 January 2021	27	264,004	10,173	96,573	370,777
Loss for the year	-	-	(10,259)	(326,417)	(336,676)
Total comprehensive income	27	264,004	(86)	(229,844)	34,101
Transactions with owners:	-	-	86	-	86
Total transactions with owners	-	-	86	-	-
At 31 December 2021	27	264,004	-	(229,844)	34,187

Statement of cash flows

	Note	2022 $000		2021 $000
CASH FLOWS USED IN OPERATING ACTIVITIES	17	158		(187)
INVESTING ACTIVITIES
Loans received		-		237
CASH FLOWS FROM INVESTING ACTIVITIES				237
NET INCREASE IN CASH AND CASH EQUIVALENTS		158		50
Cash and cash equivalents brought forward		50		-
CASH AND CASH EQUIVALENTS CARRIED FORWARD	18	208		50

Notes to the financial statements

1.   ACCOUNTING POLICIES

a.   General Information

Fenikso Limited ("the Company") is a company incorporated and domiciled in the Cayman Islands. The address of the registered office is 190 Elgin Avenue, George Town,Grand Cayman KY1-9008,Cayman Islands. These financial statements are prepared in US dollars, because that is the currency of the primary economic environment in which the Company operates. The review of the business is contained within the Strategic Report on page 5.

b.   Basis of preparation of financial statements

The financial statements have been prepared in accordance with EU-endorsed International Financial Reporting Standards ('IFRSs'), IFRIC interpretations as adopted by the EU.

The financial statements have been prepared under the historical cost convention except for financial instruments and share based payments which are measured at fair value. Monetary amounts in these financial statements are rounded to the nearest $000.

As at 31 December 2022 the Company had cash balances of $208,000 (2021: $50,000).   The Directors have prepared a cash flow forecast for the coming 12 months which demonstrates the ability for the Company to actively pursue its stated strategy.  Accordingly, the Directors consider it appropriate to continue to prepare the financial statements of the Company on a going concern basis.

c.   Basis of consolidation

The financial statements incorporate the financial statements of the Company made up to 31 December each year.  Control is achieved where the company has the power to govern the financial statements and operating policies of an investee entity so as to obtain benefits from its activities.

There are no subsidiaries where control was exercised accordingly these financial statements show only the result of the Company.

d.   Segment reporting

In identifying its operating segments management generally follows the Company's service lines, which represent the main products and services provided by the Company.

Management considers that all activities undertaken by the Company are from one operating segment. The on-going sole activity of the Company, being the pursuit of acquisition opportunities have been allocated to one continuing operating segment.

The measurement policies the Company uses for segment reporting under IFRS 8 are the same as those used in its financial statements.

e.   Taxation

Under current laws of the Cayman Islands, there is no income, estate, transfer, sales or other Cayman Islands taxes payable by the Company and management believes the Company is not liable for tax in any other jurisdiction. Accordingly no tax charges or tax liabilities are reflected in the financial statements.

f.    Investments

Subsidiary Undertakings

Investments in subsidiaries are valued at cost less provision for impairment.

Notes to the financial statements

1.   ACCOUNTING POLICIES (continued)

g. Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either designated to this category or do not qualify for inclusion in any of the other categories of financial assets.

The equity investment is measured at fair value with gains and losses recognised in other comprehensive income and reported within the available for sale financial asset reserve within equity, except for impairment losses, which are recognised in profit or loss, An assessment for impairment is undertaken at least at each balance sheet date. Reversals of impairment losses are not recognised in profit or loss and any subsequent increase in fair value is recognised in other comprehensive income.

When the asset is disposed of or determined to be impaired, the cumulative gain or loss recognised in other comprehensive income is reclassified from the equity reserve to profit or loss.

h.   Impairment

An impairment test of assets is performed whenever events and circumstances indicate that the carrying value of the asset may exceed its recoverable amount. The carrying amounts of the Company's assets, are reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the asset's recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognised in the income statement.

i.    Financial assets and liabilities

Financial assets and liabilities are recognised on the Company's balance sheet when the Company

becomes a party to the contractual provisions of the instrument.

        (i) Trade and other receivables

Trade and other receivables are measured at initial recognition at fair value plus transaction costs, and are subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. Any change in their value through impairment or reversal of impairment is recognised in the income statement.

Provision against trade and other receivables is made when there is objective evidence that the Company will not be able to collect all amounts due to it in accordance with the original terms of those receivables. The amount of the write-down is determined as the difference between the asset's carrying amount and the present value of estimated future cash flows.

        (ii) Cash and cash equivalents

Cash and cash equivalents comprises cash on hand and demand deposits, and other short term highly liquid investments that are readily convertible to a known amount of cash and are subject to an insignificant risk of changes in value.

        (iii) Financial liabilities and equity

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the Company after deducting all of its liabilities. A financial liability is any liability which gives rise to a contractual obligation to deliver cash or another financial asset to another entity.

Notes to the financial statements

1.   ACCOUNTING POLICIES (continued)

(iv) Bank borrowings

Interest-bearing bank loans and overdrafts are initially recorded at fair value, net of direct issue costs and subsequently at amortised cost using the effective interest rate method.  Finance charges, including premiums payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the income statement using the effective interest rate method.

        (v) Convertible loan notes containing embedded derivatives

The Company may issue convertible loan notes which carry an option for the issuer to convert the liability into a variable number of equity shares. 

Contracts which result in the entity delivering a variable number of its own equity instruments are classed as financial liabilities.

The conversion option is an embedded derivative and is carried at fair value through profit and loss.

The convertible loan is also classified as a financial liability. It is recorded initially at fair value and subsequently measured at amortised cost using the effective interest rate method.

When shares are issued in consideration for extinguishment of debt any difference between the face value of the loan notes and the fair value of shares issued is recognised in profit and loss.

(vi) Convertible loan notes accounted for as compound instruments

The Company may issue convertible loan notes which carry an option for the issuer to convert the liability into a fixed number of equity shares. 

Contracts which result in the entity delivering a fixed number of its own equity instruments are classed as compound instruments, containing both a financial liability and an equity instrument.

Equity instruments are instruments that evidence a residual interest in the assets of an entity after deducting all of its liabilities. Therefore, when the initial carrying amount of the compound financial instrument is allocated to its equity and liability components, the equity component is assigned the residual amount after deducting from the fair value of the instrument as a whole the amount separately determined for the liability component.

No gain or loss arises from initially recognising the components of the instrument separately.

(vii) Trade and other payables

Trade payables are initially measured at fair value, and are subsequently measured at amortised cost, using the effective interest rate method.

(viii) Equity instruments

Equity instruments issued by the Company or company are recorded at the proceeds received, net of direct issue costs.

Share warrants

The Company has issued share warrants which have been accounted for as equity instruments as the substance of the contractual arrangement is such that the warrants evidence a residual interest in the assets of the Company after deducting all liabilities.

Notes to the financial statements

1.     ACCOUNTING POLICIES (continued)

(ix) Held for trading financial assets

Assets held in this category are measured at fair value with gains or losses recognised in profit or loss. The fair value of financial assets in this category are determined with reference to active market transactions.

j.    Equity and reserves

(i)         Share capital

Share capital represents the nominal value of shares that have been issued.

 (ii)       Share premium

Share premium includes any premiums received on issue of share capital. Any transaction costs associated with the issuing of shares are deducted from share premium, to the extent there is a premium on that issue, net of any related income tax benefits.

(iii)       Equity-settled share based payment

All goods and services received in exchange for the grant of any share-based payment are measured at their fair values.  Where employees are rewarded using share-based payments, the fair values of employees' services are determined indirectly by reference to the fair value of the instrument granted to the employee.  This fair value is appraised at the grant date and excludes the impact of non-market vesting conditions (for example, profitability and sales growth targets).

All equity-settled share-based payments are ultimately recognised as an expense in profit and loss with a corresponding credit to equity reserve.

If vesting periods or other non-market vesting conditions apply, the expense is allocated over the vesting period, based on the best available estimate of the number of share options expected to vest.  Estimates are revised subsequently if there is any indication that the number of share options expected to vest differs from previous estimates.  Any cumulative adjustment prior to vesting is recognized in the current period.  No adjustment is made to any expense recognised in prior periods if share options that have vested are not exercised.

Upon exercise of share options, the proceeds received net of attributable transaction costs are credited to share capital, and where appropriate share premium.

k.   Exceptional items

The Company identified and reports material, non-recurring costs and income as exceptional items separately from underlying operating expenses and income. Exceptional items may include impairment charges and acquisition costs.

l.    Key estimates and judgements

The directors have identified the following as key judgements in the preparation of the Company accounts:

·      assessment of recoverability of  intercompany receivables (Note 12 )

·      assessment of going concern (Note 2)

    m.    New standards, interpretations and amendments adopted from 1 January 2022

The following amendments are effective for the period beginning 1 January 2022:

• Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37);

• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);

• Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and

Notes to the financial statements

1.   ACCOUNTING POLICIES (continued)

• References to Conceptual Framework (Amendments to IFRS 3). These amendments to various IFRS standards are mandatorily effective for reporting periods beginning on or after 1 January 2022.

These standards have not had any material impact on the amounts reported for the current and prior years.

New standards, interpretations and amendments not yet effective

There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are effective in future accounting periods that the company has decided not to adopt early. The following amendments are effective for the period beginning 1 January 2023:

• Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2);

• Definition of Accounting Estimates (Amendments to IAS 8); and

• Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).

The company is currently assessing the impact of these new accounting standards and amendments and expects there will be no material impact on the financial statements of the company.

m.        Prior year adjustment

The prior year comparatives have been adjusted to reflect the true economic value of the Company following the Settlement Agreement, which was finalised on 31 December 2022. The adjustments better and more accurately represent the true financial position of the Company.  The corrections and adjustments are noted below, further detail is included in the relevant notes to the financial statements.  The following line items within the financial statements were affected:

	Ref	31 December  2020	Movement for the year		31 December 2021
		As reported	As previously reported	Prior year adjustment	As restated
		$'000	$'000	$'000	$'000
STATEMENT OF COMPREHENSIVE INCOME
Loss for the year	1	-	(237,164)	(89,253)	(326,417)
STATEMENT OF FINANCIAL POSITION
Trade and other receivables	2	382,115	(246,941)	(83,255)	51,919
Trade and other payables	3	18,734	(17,209)	10,374	11,899
STATEMENT OF CHANGES IN EQUITY
Share based payment reserve	4	10,173	86	(10,259)	-
Retained earnings	5	96,573	(237,164)	(89,253)	(229,844)
Total		106,746	(237,078)	(99,512)	(229,844)

1 Adjustment represents net effect on the income statement of the 2021 adjustments noted below.

2 Adjustment reflects the final agreed position on intercompany receivables and former director's loan as reached under the Settlement Agreement (Note 12)

3 Adjustment reflects the final agreed position on the Savannah Energy loan (Note 14).

4 Adjustment represents the effect of the cancellation of all share based schemes following the Settlement Agreement (Note 16).

5. Adjustment represents the net effect on retained deficit.

There was a negative impact of 0.17 on loss per share in respect of the comparative year as a result of the prior year adjustments.  There is no impact on the cash flow statement as a result of the adjustments.

2.   GOING CONCERN

The Directors have assessed the ability of the Company to continue as a going concern having prepared detailed cash, funding and liquidity forecast through to June 2024. The Directors, having made due and careful enquiry, are of the opinion that the Company will have access to adequate working capital to meet its obligations over the next 12 months from the date of approval of these financial statements. The Directors therefore have made an informed judgement, at the time of approving the financial statements, that there is a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. As a result, the Directors have adopted the going concern basis of accounting in the preparation of the annual financial statements.

3.   OPERATING LOSS

Operating loss is stated after charging:	2022 $000		2021 Restated $000
Impairment of investments			7,396
Cancellation of share option reserve	-		10,259
Loan write off	-		1,647
Impairment of intercompany receivables	-		306,697
Fair value adjustment on receivable	20,710		-
Fair value adjustment on borrowings	(6,839)		-
Fees payable to the company's auditor : - for the audit of the financial statements	43		51

4.     STAFF COSTS

Staff costs, being amounts payable to key management personnel, were as follows:

	2022		2021
	$000		$000
Wages and salaries	220		295
	220		295

The average monthly number of employees during the year, including directors was as follows:

	No.		No.
Directors	6		6

5.      DIRECTORS' REMUNERATION

Directors' emoluments were as follows:

	2022	2021
Director	Salary and total emoluments	Salary and total emoluments
	$000	$000
T Hawkins (resigned 30 June 2022)	20	144
A Tindall (resigned 30 June 2022)	20	63
T Richardson	40	26
A Adefulu	40	4
M D'Attanasio	40	19
P Durotoye	40	4
A Oyebode* (resigned 18/6/21)	-	35
D Sofola	20	-
Total	220	295

No retirement benefits were accruing to directors at 31 December 2022 (2021: £nil).The directors received £nil (2021: £nil) in respect of share based payments.

6.     FINANCE INCOME

	2022		2021
			Restated
	$000		$000
Interest on intercompany loan	-		-
	-		-

7.     FINANCE COST

	2022		2021
	$000		$000
Total interest expense for financial liabilities	-		-
	-		-

8.     TAX EXPENSE

As per accounting policy 1 (e) under current laws of the Cayman Islands, there is no income, estate, transfer, sales or other Cayman Islands taxes payable by the Company and management believes the Company is not liable for tax in any other jurisdiction. Accordingly, no tax charges or tax liabilities are reflected in the financial statements.

9.   (LOSS)/EARNINGS PER SHARE

Basic earnings per ordinary share for the year is based on the loss of $15,397,000 (restated 2021: loss:$326,417,000) and a weighted average of 736,566,685 (2021: 536,779,983) ordinary shares.

For diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion of all potential dilutive ordinary shares.  Items included in the calculation are options and warrants for ordinary shares.

The effect of conversion of all potential dilutive ordinary shares would have an anti-dilutive effect on earnings per share and therefore they have not been incorporated in the diluted earnings per share calculation. Potential ordinary shares are only treated as dilutive when their conversion to ordinary shares would decrease profit per share or increase loss per share.

10.  SEGMENT REPORTING

              Management currently considers that the Company has one operating segment as described in accounting policy 1(c). Segment information can be analysed as follows for the reporting periods under review. 

	Investment strategy 2022	Total 2022	Investment strategy 2021	Total 2021
	Continuing operations		Continuing operations
			Restated	Restated
	$000	$000	$000	$000
Segment operating profit/(loss)	(15,397)	(15,397)	(326,417)	(326,417)
Segment assets	31,417	31,417	51,969	51,969

11.   INVESTMENTS

Company investment in subsidiaries - Shares in Company undertakings

			2022	2021
Non-current			$000	$000
At 1 January			-	7,396
Impairment			-	(7,396)
At 31 December			-	-

The Directors assessed the carrying value of its investments in its subsidiaries as part of its formal review of its various intercompany and related party loan positions in 2021 and wrote down the value of the shares in Company undertakings to nil at that point. The Company no longer has subsidiaries (Note 21).

12.   TRADE AND OTHER RECEIVABLES

			2022	2021
				Restated
			$000	$000
Current - falling due within one year
Other receivables			-	-
Intercompany receivable			2,114	-
			2,114	-
Non current - falling due after one year
Intercompany receivable			29,095	51,919
Total			31,209	51,919

An unsecured loan of US$1,500,000 was granted to a Director on 9 December 2014. The loan had a three-year term and bore interest at a rate of four per cent per annum. In September 2017, the loan's maturity date was extended by 3 years to 9 December 2020 under the same terms and conditions. On 9 December 2020, at the expiration of the extension, the Board approved a final extension to loan for 12 months conditional on the adherence to the following repayment terms: immediate payment of US$0.4 million, while the balance on the loan is settled by quarterly payments of interest and principal at a revised interest rate of 10% plus 3-month LIBOR. The initial US$0.4 million was settled by the Director although no other settlements were made and the loan is in default and accruing interest at a rate of LIBOR plus 14 per cent on the default amount. At 31 December 2021, the balance outstanding was US$1,646,696. During 2022, the Company sought litigation proceedings to recover the amounts owing.  Under a settlement deed on 7 December 2022, the Company agreed with the party, with no admission of liability, to agree to, among other things, the release and discharge of all relevant claims, the withdrawal of legal proceedings, surrenders of certain shares and other transactions, a new framework for their future relationship and fully and finally to resolve their differences, dispose of ongoing litigation and agree certain ancillary matters. Accordingly, the Company waived all rights to repayment in respect of any and all existing indebtedness. The amount outstanding at the end of 31 December 2021 of $1,646,696 has therefore been written off to reserves as at 31 December 2022, the balance being reduced to nil.

In 2021, the Company commenced a formal review of all the various intercompany and related party loan positions and impaired certain intercompany balances, resulting in a balance owed at 31 December 2021 of $133,527,153.  Under the settlement deed of 7 December 2022, the Company granted a new loan of approximately $51,919,467 to Lekoil Oil and Gas Investments Limited ("LOGI") (the "LOGI Loan") in consideration for the transfer of certain loans granted to Lekoil Nigeria and its related entities to LOGI, the release of security related to such loans and the waiver of any repayment of amounts due under such loans. Accordingly the balance of intercompany receivable at 31 December 2022 is $51,919,467 with residual balances written off to reserves. The loan is to be repaid by 8.653% of the aggregate proceeds of the sales received from Shell Western in respect of each lifting of crude oil by LOGI. Thus far, in 2023, the Company has announced it has received a total of $1,305,970 as partial repayment of the loan of US$51,919,467. The amount received equates to 8.65% of the value of the crude oil sales by LOGI. The proceeds will go towards reducing the Company's creditor balances. The Company has carried out an assessment of the value of the amounts due at 31 December 2022 on a discounted basis using a rate of 16.821% to effect a current market value of the loan of $31,209,408. The difference of $20,710,059 has been recognised in the statement of comprehensive income.

Intercompany receivable:	2022
	$000
Book value	51,919
Fair value adjustment	(20,710)
At 31 December	31,209

13.   TRADE AND OTHER PAYABLES

			2022	2021
				Restated
			$000	$000
Current - falling due within one year
Trade payables			1,494	1,019
Other payables (Note14)			2,020	237
Accruals			987	270
			4,501	1,526
Non current - falling due after one year
Other payables (Note 14)			7,398	16,256
Total			11,899	17,782

The carrying values are considered to be a reasonable approximation to fair value.

14.   BORROWINGS

			2022	2021
				Restated
			$000	$000
Current
Short term loans - falling due within one year			2,020	237
Non current - falling due after one year			7,398	16,256
Total			9,418	16,493

In 2021, the Company entered into a Convertible Facility Agreement ("CFA") with Hadron Master Fund, TDR Enterprises Ltd (a company controlled by Tom Richardson) and a non-related third party (together "the Lenders") to allow it access GBP200,000 for working capital purposes for a 6-month period. Hadron

would provide GBP100,000 while TDR Enterprises Ltd and the third party will provide up to GBP50,000 each. The purpose of the facility was for the payment of corporate costs (regulatory and compliance and legal fees) and for general corporate purposes as approved by the Board of Directors. There was an option to convert the facility in the event of non-payment and expiration of term to ordinary shares of the Group at the conservation price of 0.5 pence. Interest rate as at 10% per annum.

On 28 February 2022, the Company announced that Savannah Energy had entered into a convertible facility agreement (the "CFA2") and option agreement (the "Option Agreement") with the Company, together with the grant of certain related security by the Company over the loans owed by the Lekoil Nigeria group, in order to support the Company's restructuring. Lekoil Nigeria brought legal proceedings

against the Company seeking (among other remedies) orders to set aside CFA1, CFA2 and the Option Agreement with Savannah Energy and to set aside the issue of shares to the CFA1 Parties and Savannah Energy pursuant to those agreements. 

The Company entered into the Option Agreement with Savannah Energy granting it an option to be assigned the intercompany debt owed to the Company by Mayfair, its associated security related to OPL 310 and all rights and benefits of the Company with respect to the Mayfair Loan. A US$1 million payment is payable by Savannah Energy to the Company upon such exercise and assignment (which has not currently been exercised). Pursuant to the Option Agreement, the Company would be paid deferred consideration in the event that Savannah Energy obtains a working interest in OPL 310 (for example, upon enforcement of security for repayment of the Mayfair Loan) and OPL 310 is

14.   BORROWINGS (cont)

developed.  Such deferred consideration (capped at US$50 million) is structured as a royalty of 0.5% on crude oil sales attributable to Mayfair's actual participating interest in OPL 310 (being a 17.14% participating interest). 

Pursuant to the Settlement Deed, the Company has agreed to terminate the Option Agreement (and the associated security related to OPL 310).

Under the terms of a separate agreement with Savannah Energy, Savannah Energy shall surrender all of its shares in the Company (the "SEIL Shares").  Savannah Energy currently holds 179,997,756 Ordinary Shares.  Savannah Energy has converted £100,000 of the outstanding amount due under the CFA2 into Ordinary Shares, resulting in the issue of 20,000,000 Ordinary Shares to Savannah Energy in respect of such repayment and conversion. 

In consideration for the surrender of Savannah Energy's interests, the termination of the Option Agreement, the release by Savannah Energy of any security interests in favour of it in respect of the Mayfair Loan and the release of all remaining amounts due under the CFA2, the Company has  entered into a loan agreement with Savannah Energy pursuant to which the Company shall agree to pay Savannah Energy certain upfront payments together with 25% of all amounts received by the Company from LOGI pursuant to the LOGI Loan, subject to a maximum total payment of approximately $16,256,159.  The Company has assessed the value of the loan amount at 31 December 2022 on a discounted basis using a rate of 16.821% to effect a current market value of $9,417,555. The difference of $6,838,604 has been recognised in the statement of comprehensive income.

Borrowings:	2022
	$000
Book value	16,256
Fair value adjustment	(6,838)
At 31 December	9,418

15.   SHARE CAPITAL

	2022	2021
	$	$
Authorised, Allotted, called up and fully paid
Ordinary shares
Beginning of the year	26,839	26,839
New Shares issued (262,614,194 ordinary shares)	13,131	-
Shares cancelled (199,997,756 ordinary shares)	(10,000)	-
As at 31 December: 599,396,421 ordinary shares of $0.00005 (2021: 536,779,583 ordinary shares of $0.00005 each)	29,970	26,839

The authorised share capital is 1,000,000,000 shares at par value of $0.00005 each

Following the Settlement Arrangements agreed at the Company's EGM on 29 December 2022, it was agreed that between the Company and Savannah Energy that it would surrender all of its shares in the Company comprising 199,997,756 Ordinary Shares.

As at the end of May 2023 LOGI had complied with all conditions of the settlement agreement save for the cancellation of certain shares in the Company owned by Lekoil Nigeria, Lekan Akinyami and Samuel Olutu. The total shares that should have been cancelled are 107,658,847 ordinary shares. The Company is working with such parties to cancel such shares as soon as practicably possible.

16.   SHARE-BASED PAYMENTS

Following the Settlement Agreement in December 2022 the Company has transferred or cancelled all previous share arrangements. The balance on the reserve account at 31 December 2022 of $10,258,792 has been written off to the Statement of Comprehensive Income.

Long Term Incentive Plan scheme (equity-settled)

The long-term incentive plan ("LTIP") was approved on 19 November 2014 and amended on 21 December 2015. The Company awarded no share options under the plan in the year (2021: nil). The existing options have all been transferred as part of the Settlement Agreement. Accordingly no share based payment arrangements exist at 31 December 2022.

	Weighted average exercise price US$	Number of options	Weighted average exercise price US$	Number of options
	2022		2021
Outstanding at 1 January	0.32	20,106,500	0.33	30,099,000
Granted during the year	-	-	0.03	-
Transferred during the year	0.33	(20,106,500)	0.33	(9,992,500)
Outstanding at 31 December	0.32	-	0.32	20,106,500

Share option scheme (equity-settled)

The Group established a share option scheme available to Directors, key management personnel, employees and consultants providing employment-type services, which provides the opportunity to purchase shares in the Group. In accordance with the scheme, holders of vested options are entitled to purchase shares at prices of the shares established at the date of grant, during a period expiring on the tenth anniversary of the effective date i.e. grant date. The grant dates for awards were 3 December 2010, 1 June 2011, 1 November 2011, 4 June 2012, 19 February 2013, 7 April 2013, 17 May 2013 and 26 March 2014 based upon a shared understanding of the terms of the awards at that time. This share option scheme has been replaced by the LTIP scheme described above.  No new options were granted in 2022 under this scheme and all options expired in the year to 31 December 2022.

The number and weighted average exercise prices of share options are as follows:

	Weighted average exercise price US$	Number of options	Weighted average exercise price US$	Number of options
	2022		2021
Outstanding at 1 January	0.46	16,358,125	0.46	16,358,125
Granted during the year	-	-	-	-
Expired during the year	-	(16,358,125)	0.46	-
Exercised during the year	-	-	-	-
Outstanding at 31 December	-	-	0.46	16,358,125
Exercisable at 31 December	-	-	0.46	16,358,125

16.   SHARE-BASED PAYMENTS (cont)

Non-Executive Director Share Plan (equity-settled)

The Board established the Non-Executive Director share plan on 21 December 2015. Following the Settlement Agreement in December 2022, the plan has ceased.

The number and weighted average exercise prices of share options are as follows:

	Weighted average exercise price US$	Number of options	Weighted average exercise price US$	Number of options
	2022		2021
Outstanding at 1 January	0.20	250,000	0.20	2,600,000
Granted during the year	-	-	-	-
Transferred during the year	-	(250,000)	-	(2,350,000)
Outstanding at 31 December	0.03	-	0.03	250,000

17.   RECONCILIATION OF OPERATING LOSS TO NET CASH USED IN OPERATING ACTIVITIES

	2022	2021
		Restated
	$000	$000
Loss for the year	(15,397)	(326,416)
Impairment	-	7,396
Decrease/(increase) in receivables	20,710	325,668
Increase/(decrease) in payables	(5,155)	(6,835)
Net cash used in continuing operations	158	(187)
Net cash outflow used in operations	158	(187)

18.   FINANCIAL INSTRUMENTS

The carrying amounts presented in the statement of financial position relate to the following categories of assets and liabilities:

Company	2022 $000	2021 Restated $000
Financial assets
Loans and receivables:
Trade and other receivables	31,209	51,919
Cash and cash equivalents	208	50
	31,417	51,969
Financial liabilities
Financial liabilities measured at amortised cost:
Current:
Loans	9,418	16,493
Trade and other payables	2,481	1,289
	11,899	17,782

The carrying values of the Company's financial assets and liabilities approximate to their fair values.

Financial assets comprise cash and cash equivalents, trade and other receivables and exclude prepayments. The financial liabilities are all short-term liabilities and due on demand or within agreed contractual terms.

18.   FINANCIAL INSTRUMENTS (cont)

Risk management

The board is charged with managing the various risk exposures, including those which arose through holding the following financial instruments which apply to both the Company and the Company:

(a)    Capital risk management

The Company manages its capital to ensure that all the companies within the Company will be able to continue as a going concern while maximising the return to equity holders, through optimisation of debt equity balance.  The capital structure of the Company includes debt, consisting of borrowings, cash and cash equivalents and equity attributable to the equity holders of the parent. Where necessary additional loans are provided to the Company to ensure liquidity at critical times.

Capital for the reporting period under review is summarised as follows:

	2022 $000	2021 Restated $000
Total equity	19,518	34,187
Borrowings	9,418	16,493
Cash and cash equivalents	208	50
Capital	29,144	50,730

(b)    Interest rate risk

The Company is exposed to interest rate risk as it has borrowings and cash and cash equivalent balances that are subject to variable interest rates.  The Company does not enter into hedging transactions for the purposes of minimising its exposure to interest rate risk, but manages its exposure by monitoring the levels of interest payable and receivable on a regular basis.

At 31 December 2022 amounts on short term deposits totalled $208,000 (2021: $50,000).  Loans receivables and loan notes are contracted at a fixed rate of interest.

 (c)   Liquidity rate risk

The Company's approach to liquidity risk is to ensure that sufficient liquidity is available to meet foreseeable requirements, by having adequate reserves, banking and borrowing facilities and by investing funds securely and profitably.  The board further manages its exposure to liquidity risk by ensuring that cash flow forecasts and budgets are produced annually and monitored on a regular basis. All trade payables and borrowings have a maturity date of within one year.

(d)    Credit rate risk

Credit risk refers to the risk that a third party will default on its contractual obligations resulting in financial loss to the Company.  The Company manages the exposure to this risk by carrying out credit verification procedures on all clients and monitoring receivable balances on an ongoing basis.  The Company's receivable balance principally comprises amounts due from other Company companies for financing purposes.

19.   RELATED PARTY TRANSACTIONS

Transactions with key management personnel

Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. These are the Directors.

Loans and transactions with key management personnel

An unsecured loan of US$1,500,000 granted to a Director on 9 December 2014. The loan had a three-year term and bore interest at a rate of four per cent per annum. In September 2017, the loan's maturity date was extended by 3 years to 9 December 2020 under the same terms and conditions. On 9 December 2020, at the expiration of the extension, the Board approved a final extension to loan for 12 months conditional on the adherence to the following repayment terms: immediate payment of US$0.4 million, while the balance on the loan is settled by quarterly payments of interest and principal at a revised interest rate of 10% plus 3-month LIBOR. The initial US$0.4 million was settled by the Director although no other settlements were made and the loan is in default and accruing interest at a rate of LIBOR plus 14 per cent on the default amount. At 31 December 2021, the balance outstanding was US$1,646,696. During 2022, the Company sought litigation proceedings to recover the amounts owing.  Under a settlement deed on 7 December 2022, the Company agreed with the party, with no admission of liability, to agree to, among other things, the release and discharge of all relevant claims, the withdrawal of legal proceedings, surrenders of certain shares and other transactions, a new framework for their future relationship and fully and finally to resolve their differences, dispose of ongoing litigation and agree certain ancillary matters. Accordingly, the Company waived all rights to repayment in respect of any and all existing indebtedness. The amount outstanding at the end of 31 December 2021 has therefore been written off to reserves as at 31 December 2022, the balance being reduced to nil.

On 2 September 2021, the Company entered into a Convertible Facility Agreement ("CFA") with Hadron Master Fund ("Hadron") (a company associated with Marco D'Attanasio), TDR Enterprises Ltd (a company controlled by Tom Richardson) and a non-related third party (together "the Lenders") to allow it to access up to £200,000 for working capital purposes.   The key terms of the CFA were: (i) Amount: an amount of up to £200,000 in total, with Hadron providing up to £100,000 and each of TDR Enterprises Ltd and the third party providing up to £50,000 each; (ii) Use of proceeds: for payment of corporate costs (regulatory and compliance and legal fees) and for general corporate purposes as approved by the Board and the Lenders; (iii) Availability: £100,000 available immediately, with £100,000 available after 1 October 2021. (iv) Term: 6 months. (v) Repayment: Principal and interest to be repaid from proceeds of capital raise and/or monies recovered from CEO Loan.  Repayment immediately due on a change of control of the Company. No conversion before expiry of the Term. (vi) Conversion right: In the event of non-payment at the expiry of the Term, Lenders have the option to convert the outstanding amounts into ordinary shares of the Company at the Conversion Price of 0.5 pence. (vii) Interest Rate: 10% per annum. (viii) Shareholder approval/Security for Repayment: Approval at Company's AGM. In the event shareholder approval was not obtained, the Lenders would have been be entitled to an assignment by way of security of the CEO Loan.

Anthony Hawkins, whilst the Interim Executive Chairman of the Company, made a number of interest free loans to the Company to pay its day to day administrative costs.  Those loans have been repaid by the Company.

20.   ULTIMATE CONTROLLING PARTY

As at 31 December 2022 and 31 December 2021 there is no single ultimate controlling party.

21.   PRINCIPAL SUBSIDIARIES

As at 31 December 2022, following the Settlement Agreement, there are no principal subsidiaries.

As at 31 December 2021 the Company had the following subsidiaries:

Company name	Country	Ownership interest
Lekoil Nigeria Limited	Nigeria	40%
Lekoil Exploration and Production (Pty) Limited	Namibia	80%
Lekoil Management Corporation	USA	100%
Lekoil 310 Limited	Cayman	100%
Princeton Assets and Trust Pte Limited	Singapore	100%
Lekoil Management Services	Cayman	100%

 

END