Preliminary Results for the Year Ended 31 Dec 2024

20 June 2025

Petrel Resources plc

("Petrel" or the "Company")

Preliminary Results for the Year Ended 31st December 2024

Petrel Resources, the hydrocarbon explorer with interests in Iraq and Ghana today announces its unaudited preliminary results for the year ending 31 December 2024.

The Company expects to publish its 2024 audited Annual Report & Accounts and Notice of AGM next week, which will be notified in due course.

For further information please visit http://www.petrelresources.com/ or contact:

Enquiries:

CHAIRMAN'S STATEMENT

Petrel is a hydrocarbon explorer with interests in Iraq, and Ghana.

Highlights

Market overview

• 2024 set consumption records for oil and LNG consumption, but oil prices fell in early 2025 due to the 'Trump tariff war' triggering fears of reduced demand.

• Uncertainty increases risk and delays investment decisions.

• Available fiscal terms, however, reflect the boom conditions between 2003 and 2014 rather than current market conditions. States have been slow to update contractual terms to align interests, which deters development.

• Oil explorers are not yet attracting strong investor interest in western markets. Majors buy shares back and issue dividends rather than invest the c. $610 billion necessary to supply future demand. 

Assets overview

• In Ghana, ratification discussions with the Ghanaian authorities on Tano acreage have re-commenced - though acreage adjustments are likely, and governance remains an issue.

• In Iraq, there may be early opportunities to recover gas and liquids currently being flared.

• Petrel submitted a proposal to undertake contractor obligations on a relinquished Block from the 4th Bid Round.

• An updated Merjan oil field development proposal has been prepared.

• Iraqi oil output was c.4 million barrels daily in Spring 2025, with export growth constrained by contractual terms and OPEC+ agreements.

• Petrel seeks direct negotiations, where possible, rather than bid rounds, which are expensive and high risk, thus inappropriate for juniors.

Outlook

• The board is considering expansion opportunities in oil & gas, and energy-related projects worldwide. Our group participates in the EU Commission's Critical Resource Minerals' Initiative, which offers attractive diversification given current market conditions. We offer an established record and potentially high liquidity and capital appreciation for the right story. As investors re-focus on 'hard industries' and cash flow, this is a time of opportunity.

Recent months remind investors of some eternal truths: market uncertainty has increased, amid armed conflict and trade wars. Western dependence on Chinese processing of Critical Resource Minerals means that efforts to reduce dependence on fossil fuels will not reduce exposure to distant sources and supply chains.

Policy-makers have discovered the limits of their bold dreams of a Green transition: energy costs have risen rather than fallen. The new technologies bring new headaches: electricity storage turns out to be prohibitively expensive for grid-scale coverage. EVs continue to penetrate markets but are price-competitive only in China. But developed economies prefer to protect their automotive sectors rather than import cheap Chinese EVs. In such policy myopia lies the roots of the next oil boom.

Like all previous energy transitions, Green sources turn out to be additive to rather than replacing traditional, reliable fuels - which will continue to dominate the 21st century:

During 2024/25 there were a serious of close-calls, power failures, and brown-outs globally, culminating in the Iberian black-outs of April 2025. These were not the routine power failures common in the global south, or planned "load-shedding" in South Africa. 

These power failures were caused by over-dependence on intermittent renewable generation, allied with inadequate investment in legacy grids designed for centralised, reliable world-scale plants fuelled traditionally by coal, and then increasingly by nuclear and natural gas. The failure was not that of renewable generation per se, since hydro-power or geothermal generally provide reliable supplies. 

The problem was with unpredictable intermittent generation, which produces Direct Current, rather than Alternating Current, and consequently does not deliver significant inertia to protect against periodic interruptions. Battery storage, is expensive and would require vast quantities of Critical Resource Minerals to adequately back a grid up. Traditional storage methods such as hydro are available for only a small percentage of demand. It turns out that the intermittent renewable generation on which the "Green transition" relies is only suitable for up to 30% of demand which is the natural surplus in electrical systems. Beyond that point, costs and risks soar.

This means that Natural Gas will continue to dominate electrical generation, both directly, and as essential back-up for the reliability modern economies require. In price-sensitive markets, coal will continue to dominate. Nuclear power is also an effective solution, but involves bureaucratic planning requirements, up-front costs, and is opposed politically in some developed societies.

Consumption data bear this out: recent years have seen record demand for oil and even coal. LNG is now 55% of total traded gas, helped by malicious damage to pipelines and the time needed to extend more gas pipelines to Asian consumers.

Markets are always transitioning, which is why an average 3.75% global economic growth translates into only 2.1% energy consumption growth due to greater efficiencies. But every energy transition in history has added new fuels rather than substituted them. Legislators are unlikely to achieve what market forces cannot.

And yet there has been a dramatic under-investment in reliable energy exploration & development since 2014. This is also true even of those Critical Resource Minerals necessary to fuel the new industries, which include Copper and Nickel as well as Lithium, Cobalt and the other 50-odd minerals.

To maintain adequate oil & gas supplies the world needs about $610 billion of investment (depending on materials' costs and rig-rates), but the industry invests only c.$360 billion - much of it in existing properties and basins of super-majors and National Oil Companies.  There has been little frontier exploration since 2015.  Most of the developing world is starved of investment.  Instead, producers prefer to issue dividends and buy shares back.

Part of the reason is that politicians also display myopia about how to deliver effective exploration. Risk-investors require a risk-adjusted rate of return. The higher the uncertainty, the more return investors require. Best results are achieved by aligning interests, and linking taxes to profits, rather than requiring up-front payments, or royalties.

Formal bid rounds, involving up-front fees, qualification criteria designed for majors, and limited upside, are not how you expedite projects, keep cost control and optimise reservoir recovery. That is why Petrel prefers direct negotiations, where possible, after which we can bring partners via farm-ins.

But our industry is cyclical, and majors' caution offers opportunities for independents - who have always pioneered new approaches, from offshore drilling to fracking. So far, the emerging supply constraints have not filtered through to exploration & development. But when they do, there will be a sharp reversal in sentiment, rewarding those farsighted enough to develop attractive acreage ripe for exploitation.

We have received several approaches offering new oil & gas exploration projects but also in Helium and other energy-related projects. So far, all prospects have fallen short on legal title, price expectations, or financing terms. There is no value for Petrel shareholders in over-paying.

Petrel is an EU company, and our involvement in the EU Commission's Critical Resource Minerals' "Team Europe" has fostered relationships with industrial buyers, financing institutions and key decision-makers. There are surprisingly few juniors able to swim in all these seas.

In the meantime, there is market interest in Petrel's strong shareholder following and liquidity - especially at times of intense news-flow. Accordingly, we continue to explore expansion opportunities.

Financing

There are contrarian investors keen to fund the right project. As during the pandemic and previous times of turbulence, directors and their supporters are open to covering working capital needs, and are prepared to participate in any necessary, future fundings.

David Horgan

Chairman

19 June 2025

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2024

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2024

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

PETREL RESOURCES PLC

CONSOLIDATED STATEMENT OF CASH FLOWS

FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2024

NOTES:

1. ACCOUNTING POLICIES

There were no changes in accounting policies from those used to prepare the Group's Annual Report for financial year ended 31 December 2023. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and in accordance with the provisions of the Companies Act 2014.

2. LOSS PER SHARE

Basic loss per share is computed by dividing the loss after taxation for the year attributable to ordinary shareholders by the weighted average number of ordinary shares in issue and ranking for dividend during the year. Diluted loss per share is computed by dividing the loss after taxation for the year by the weighted average number of ordinary shares in issue, adjusted for the effect of all dilutive potential ordinary shares that were outstanding during the year.

The following tables set out the computation for basic and diluted earnings per share (EPS):

3. GOING CONCERN

The Group incurred a loss for the financial year of €469,878 (2023: loss of €491,086) and had net current liabilities of €1,150,434 (2023: €973,503) at the balance sheet date. These conditions as well as those noted below, represent a material uncertainty that may cast significant doubt on the Group and Company's ability to continue as a going concern.

Included in current liabilities is an amount of €1,037,531 (2023: €947,531) owed to key management personnel in respect of remuneration due at the balance sheet date. Key management have confirmed that they will not seek settlement of these amounts in cash for a period of at least one year after the date of approval of the financial statements or until the Group has generated sufficient funds from its operations after paying its third party creditors.

The Group and Company had a cash balance of €4,838 (2023: €35,667) at the balance sheet date. The directors have prepared cashflow projections for a period of at least twelve months from the date of approval of these financial statements which indicate that additional finance will be required to fund working capital requirements and develop existing projects. As the Group is not revenue or cash generating it relies on raising capital from the public market.

In January 2024, the Group received €106,313 (£90,000) from the exercise of warrants. On 6 March 2025 the Company raised €298,586 (£250,000) via a placing of shares. Further information is detailed in Note 24.

These conditions as well as those noted below, represent a material uncertainty that may cast significant doubt on the Group and Company's ability to continue as a going concern.

As in previous years the Directors have given careful consideration to the appropriateness of the going concern basis in the preparation of the financial statements and believe the going concern basis is appropriate for these financial statements. The financial statements do not include the adjustments that would result if the Group and Company were unable to continue as a going concern.

4. INTANGIBLE ASSETS

Exploration and evaluation assets relate to expenditure incurred in exploration in Ghana. The directors are aware that by its nature there is an inherent uncertainty in Exploration and evaluation assets and therefore inherent uncertainty in relation to the carrying value of capitalized exploration and evaluation assets.

During 2018 the Group resolved the outstanding issues with the Ghana National Petroleum Company (GNPC) regarding a contract for the development of the Tano 2A Block. The Group has signed a Petroleum Agreement in relation to the block and this agreement awaits ratification by the Ghanian government.

As ratification has not yet been achieved in the current year the directors, as a matter of prudence, opted to write down 20% of the carrying value of the Tano 2A Block historic expenditure. Accordingly, an impairment charge of €186,633 was recorded in the current year and the prior year.

Relating to the remaining exploration and evaluation assets at the financial year end, the directors believe there were no facts or circumstances indicating that the carrying value of the intangible assets may exceed their recoverable amount and thus no impairment review was deemed necessary by the directors. The realisation of these intangible assets is dependent on the successful discovery and development of economic reserves and is subject to a number of significant potential risks, as set out below:

· licence obligations;

· exchange rate risks;

· uncertainty over development and operational costs;

· political and legal risks, including arrangements with Governments for licences, profit sharing and taxation;

· foreign investment risks including increases in taxes, royalties and renegotiation of contracts;

· financial risk management; and

· ability to raise finance.

5. OTHER PAYABLES

It is the Group's normal practice to agree terms of transactions, including payment terms, with suppliers. It is the Group's policy that payments are made between 30 - 45 days and suppliers are required to perform in accordance with the agreed terms. The Group has financial risk management policies in place to ensure that all payables are paid within the credit timeframe.

Key management personnel have confirmed that they will not seek settlement in cash of the amounts due to them in relation to remuneration for a period of at least one year after the date of approval of the financial statements or until the Group has generated sufficient funds from its operations after paying its third party creditors.

6. SHARE CAPITAL

On 21 December 2023 a total of 1,000,000 warrants were exercised at a price of 1.8p per warrant.

On 5 January 2024 a total of 5,000,000 warrants were exercised at a price of 1.8p per warrant.

7. SHARE BASED PAYMENTS

The Group issues equity-settled share-based payments to certain directors and individuals who have performed services for the Group. Equity-settled share-based payments are measured at fair value at the date of grant. Fair value is measured by the use of a Black-Scholes valuation model.

Options

The Group plan provides for a grant price equal to the average quoted market price of the ordinary shares on the date of grant. The options vest immediately.

The options outstanding at 31 December 2024 have a weighted average remaining contractual life of 3 years.

Warrants

On 5 January 2024 a total of 5,000,000 warrants were exercised at an exercise price of 1.8p per warrant. Further information is detailed in note 6 above.

On 24 October 2024 the remaining 14,833,333 warrants expired.

8. POST BALANCE SHEET EVENTS

On 6 March 2025 the Company announced that it had raised £250,000 (before expenses) through a placing of 23,809,523 new ordinary shares (the "Placing Shares") at a placing price of 1.05p per Placing Share ("Placing"). Each Placing Share has one warrant attached with the right to subscribe for one new ordinary share at 2p per new ordinary share for a period of two years.

9. ANNUAL GENERAL MEETING

The Company's Annual General Meeting will be held on 30 July 2025 in the Hotel Riu Plaza The Gresham, 23 O'Connell Street Upper, Dublin 1, D01 C3W7 at 12.00 pm.

10. GENERAL INFORMATION

The financial information prepared using accounting policies consistent with International Financial Reporting Standards ("IFRS") as adopted by the European Union included in this preliminary statement does not constitute the statutory financial statements for the purposes of Chapter 4 of part 6 of the Companies Act 2014. Full statutory statements for the year ended 31 December 2024 prepared in accordance with IFRS, upon which the auditors have given an unqualified report, have not yet been filed with the Registrar of Companies. The financial information for 2023 is derived from the financial statements for 2023 which have been filed with the Registrar of Companies. The auditors had reported on the 2023 statements; their report was unqualified.

A copy of the Company's Annual Report and Accounts for 2024 will be mailed shortly only to those shareholders who have elected to receive it. Otherwise, shareholders will be notified that the Annual Report will be available on the website at www.petrelresources.com. Copies of the Annual Report will also be available for collection from the Company's registered office, 162 Clontarf Road, Dublin 3, Ireland.