Annual
report
2023
The fully integrated
onshore Brazilian oil
and gas producer
Seacrest Petroleo
4
Company in brief
4
Assets and history
6
Key figures
8
Letter from the President of the Executive Committee
10
Strategy and targets
11
Sustainability
14
Introduction
15
Health and Safety
16
Climate and the Environment
18
People
19
Local Communities
20
Governance
27
Board of Directors’ report
28
Board of Directors
33
Executive management
34
Corporate Governance
36
Reporting on payments to governments
44
Financials
45
Consolidated financial statements
46
Parent company financial statements
85
Statement of Reserves
99
Responsibility statement
100
Alternative Performance Measures
101
Independent Auditor’s report
103
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
33
Seacrest Petroleo in brief
Seacrest Petroleo is an independent oil and gas production company with an
integrated portfolio of producing oil and gas fields, and export infrastructure
onshore in Espírito Santo, Brazil. The Company has exclusive control over its
infrastructure, from field production to an offshore tanker loading terminal,
enabling cost-efficient operations, schedule control and direct access to
markets for its premium grade products.
2P reserves
144
mmboe
Target life of field opex
USD 15
per boe
Target oil production 2027
>30k bbls/d
(7.6k bbls in 2023)
“From reservoir to
premium fuel”
Figures from the 2023 CPR
Seacrest Petroleo Annual Report 2023
4 Seacrest PetroleoSeacrest Petroleo | Company in brief
High quality assets
Considerable reserves with significant
organic upside recovery factor potential.
Proven success in Brazil through
execution by international standard
development and operations team with
the backing of industry leaders Seacrest
and Mercuria.
Fully owned infrastructure
Large-scale infrastructure enables the
Company to process, transport and
deliver oil production directly to sea
tankers through a uniquely integrated
system providing control, risk mitigation
and global market access.
Potential for growth
Significant ramp up of production
targeted through simple, low-risk
workovers, recompletions and infill
drilling. Oil production increased 82%
during the 12 months since year end
2022 and is targeted to more than triple
in the coming years.
Attractive economics
Low incremental operating cost per
barrel and premium fuel pricing,
targeted to generate fast payback on
capex and low incremental cash flow
break-even.
Seacrest Petroleo in brief
Seacrest Petroleo Annual Report 2023
5 Seacrest PetroleoSeacrest Petroleo | Company in brief
Assets and history
Seacrest Petroleo is an independent oil and gas producer focused on the redevelopment of midlife onshore
producing oil and gas fields. The Company’s assets are onshore in Espírito Santo, Brazil and represent a
cohesive set of attractive producing fields, interconnecting pipelines and an integrated export terminal. The
assets were acquired through the divestment program run by Brazil’s national oil company, Petróleo Brasileiro
S.A. – Petrobras.
The portfolio consists of the Cricaré Cluster and the adjacent
Norte Capixaba Cluster, both owned 100%. The Cricaré Cluster was
acquired in December 2021 and the Norte Capixaba Cluster in
April 2023.
The fields have an estimated 1.2 billion barrels of oil equivalents
(bnboe) in place and certified proven and probable reserves (“2P”
per 2023 reserve report) of 144 million barrels of oil equivalent
(mmboe) as of 31 December 2023. Average daily production in
2023 was 8 324 boepd, which is targeted to increase significantly
in the coming years as a result of the execution of the planned
drilling programme, the largest onshore in Brazil. The Company
has exclusive control over its infrastructure, all the way from field
production to the offshore tanker loading terminal, allowing for
cost-effective operations growth and direct access to markets
for its premium grade products. Approximately 85% of the fields’
planned oil production is of a specification that is priced as very
low sulphur fuel oil, without the need for refining.
Seacrest Petroleo has a seasoned management team and
organisation of 314 employees, with an experienced operational,
technical and commercial track-record in Brazil, combining a
disciplined capital allocation strategy with expertise in revitalising
mid- and late-life fields.
Our commitment
With the commitment to deliver maximum value to its investors,
Seacrest Petroleo targets high productivity, sustainable best
practices and financial discipline, striving for organic growth and
development of its acquired assets, always focused on efficiency
and value creation.
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66 Seacrest PetroleoSeacrest Petroleo | Assets and historySeacrest Petroleo | Assets and history
Preparations
Established to bid
in the Petrobras
divestment program
Successful bid
for Cricaré
Successful bid for
Norte Capixaba
Cricaré takeover and
production ramp-up
Norte Capixaba takeover
USD 300m credit
facility and IPO on
Euronext Oslo Børs
Starting the
largest drilling
programme
onshore Brazil
20202019 2021 2022 2023 2024
Bidding Financing Well optimisation Drilling
202320222021
0
1 261
7 646
202320222021
297
130
0
Daily oil production Producing wells
1
1
Including Norte Capixaba on a pro forma basis from 1 January
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
77 Seacrest PetroleoSeacrest Petroleo | Assets and historySeacrest Petroleo | Assets and history
20232022
33.6
177.4
20232022
1 373
8 329
20232022
-11.1
17.1
2023ProducedAdditions2022
139.6
7.3
-3.0
143.9
20232022
-38.3
-10.5
20232022
27.9
23.8
20232022
6.2
23.8
20232022
381
2 314
Petroleum revenues
USD million
Production
Boepd
CFFO
USD million
Production cost
USD per boe
Capex
USD million (excluding Norte
Capixaba acquisition)
Offtake of oil
‘000 bbls
EBITDA
USD million
2P Reserves
Mmboe
2023 Key figures
1
Including Norte Capixaba on a pro forma basis from 1 January
1
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88 Seacrest PetroleoSeacrest Petroleo | Key figuresSeacrest Petroleo | Key figures
Transforming from a private M&A focused
company to a publicly listed producer
Q1 2023 Q3 2023Q2 2023 Q4 2023 Q1 2024
$300M debt
with bluechip
lenders in Brazil
Oil production
Bbls/d
Process and
organisation
change kick-off
Production
ramp up in line
with PDNP
One Seacrest
OPS culture
workshop
Start of drilling
Inhambu field
Internalisation
of operations
Offtaker force
majeure –
production
temporarily
reduced
Restart of infill
drilling
$260M IPO
in Oslo
$426M takeover
of Norte Capixaba
$26M equity
private
placement
$80M unsecured
bond issue
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99 Seacrest PetroleoSeacrest Petroleo | Key figuresSeacrest Petroleo | Key figures
Letter from the President of
the Executive Committee
Successful listing enabling
access to growth capital
In February 2023, Seacrest Petroleo successfully raised USD 260
million in an IPO on Euronext Expand Oslo, which was the largest
upstream oil company IPO of 2023. Furthermore, USD 300 million
in secured debt was provided from a blue chip consortium
of lenders in Brazil. This funding facilitated the closing of the
USD 427 million Norte Capixaba acquisition in April 2023 –
a cornerstone of our growth strategy.
At the end of a challenging fourth quarter, we raised an additional
USD 26 million of equity through a private placement of shares
and secured further funding in January 2024 through issuing
USD 80 million of senior unsecured bonds. This strengthened
the Seacrest Petroleo balance sheet as it commences its industry
leading drilling programme, which is expected to more than triple
production in the coming years.
Strong production growth
We have been operating the Cricaré Cluster since January 2022
and managed another excellent year in 2023, growing total
production by more than 80% compared to the previous year.
Since taking over at Norte Capixaba in April 2023, production has
grown 35% through the re-opening of previously shut-in wells and
a rise in overall well productivity.
Overall, total production in December 2023 was 82% higher than
one year ago (including Norte Capixaba on pro-forma basis),
driven by a very successful workover programme across 91 wells.
This reflects the reserve base and the merits of the optimisas-
tion efforts driving up well productivity and reliability. Year-end
production was particularly improved as a result of the 96 projects
the Company executed throughout 2023 to mitigate the impact
of the rainy season.
Dealing with challenges
The year was not all smooth sailing as our growth trajectory was
challenged during the second half of the year. Electricity outages
in some of our fields, in part as a consequence of poor mainte-
nance by the prior owner, periodically interrupted production and
suppressed third quarter production growth. Having successfully
resolved these issues, we encountered extreme weather condi-
tions in Brazil, resulting in an offtaker force majeure cancellation
in the fourth quarter, necessitating a temporary reduction of
production as our storage was near full capacity.
Our team acted with swiftness and determination in adapting
to the situation and, although November production fell signifi-
cantly, we rapidly recovered in December, ending the year with
production almost in line with our targets.
Building a strong corporate culture
Both our successes during 2023, as well as our management of the
challenges in the second half of the year, reflect our developing
organisation and a resilient corporate culture. We tripled the number
of employees during the year and maintained an excellent health
and safety track record with no serious incidents for two consecutive
years and a lost time injury rate of only 0.38 for 2023. We continue to
develop our organisation to enable us to achieve our ambitions.
Focused on the future
Seacrest Petroleo has embarked on the largest onshore drilling
programme in Brazil, targeting 300 infill wells in the next four
years, with 40-50 wells during 2024. Our reserve base has deliv-
ered on our expectations so far. We remain focused on our target
to more than triple production by 2027, generating growing value
for our stakeholders.
Scott Aitken
President of the
Executive Committee
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
1010 Seacrest PetroleoSeacrest Petroleo | Letter from the President of the Executive CommitteeSeacrest Petroleo | Letter from the President of the Executive Committee
Strategy and targets
Strategy
The Company was formed expressly for the purpose of partici-
pating in Petrobras’ asset divestment program and successfully
acquired from Petrobras two clusters of oil and gas production
concessions onshore Brazil. The Company’s strategy is to revitalise
the assets through the reopening of shut-in wells, the optimi-
sation of existing wells and drilling additional wells to tap more
reservoirs.
Oil and gas assets
Combined, the Cricaré and Norte Capixaba clusters are estimated
to hold total reserves of 1.2 billion oil equivalent (mmboe) per
the 2023 reserve report. The recovery rate to date is 17% and the
target is to achieve a recovery rate of at least 29%. This leaves 144
mmboe of reserves to be produced through to 2050, of which 41 is
estimated to be recoverable by the end of this decade.
By 2023, a total of 77 wells have been re-opened and well
productivity has been improved by 15% across the two clusters. A
further 300 infill wells are targeted to be drilled in the next four
years through a comprehensive and industry-leading drilling
programme.
Unique integrated infrastructure
The two clusters have a very close proximity to each other in the
state of Espírito Santo, enabling synergistic gains. The Company
also has seven processing facilities with a total treatment capacity
of 115 000 bopd and 200 km of pipelines within the state. This
enables low incremental operating costs and a high degree of
schedule control. Finally, the Terminal Norte Capixaba on the
coast has 500 000 barrels of storage capacity and an offshore
loading buoy that gives direct access to seaborne transport to
both domestic and international markets.
Premium product
About 85% of the oil production from the fields targets a specifica-
tion that is priced as very low sulphur fuel oil, without the need for
refining. Such a product has historically traded at a premium to
conventional crude oil.
Targets
Seacrest Petroleo aims to increase oil production from 7 646
bopd in 2023, to between 8 500 bopd and 11 000 bopd in 2024.
The long-term ambition is to reach a plateau production level of
above 30 000 bopd in 2027.
The execution of these ambitious targets is dependent on the
drilling of up to 300 new infill wells as part of a drilling programme
that was started towards the end of 2023. The guidance for 2024
is 40-50 wells, funded by a capex allocation of USD 70-100 million.
The payback cycle for new wells is short and the programme will
eventually become self-funding.
People
The Seacrest Petroleo organisation has developed since inception.
At the end of 2023, the Company had 314 employees, triple that of
a year ago. In addition, more than 1300 contractor personnel are
employed in the operations.
The management team is composed of seasoned professionals
with strong international backgrounds and experience from
multiple oil and gas producing regions worldwide. The opera-
tions and development teams have significant experience from
working in onshore operations in Brazil for a variety of local and
international operators.
The Company has a strong focus on building a business culture
that fosters integrity, ethical business conduct and safe opera-
tions, stimulating our employees’ personal development, their
ability to take responsibility and improve their skills. Seacrest
Petroleo is proud of its excellent HSSE performance with only one
lost time incident and four injuries recorded in the past two years,
despite more than 3.5 million hours worked.
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1111 Seacrest PetroleoSeacrest Petroleo | Strategy and targetsSeacrest Petroleo | Strategy and targets
Upstream Midstream Downstream
Exploration Production Port MarketingAppraisal
Cricaré
26 onshore fields
138 producing wells
Norte Capixaba
5 onshore fields
159 producing wells
Terminal Norte Capixaba
500kbbls storage capacity
7 treatment stations
115kbbls/day capacity
200 km pipelines
Storage RefiningProcessing
Q4'23Q3'23Q2'23Q1'23Q4'22Q3'22Q2'22Q1'22
830
1 213
1 601
1 836
2 296
3 018
2 933
1 792
Gas Oil
Seacrest operations
Q4'23Q3'23Q2'23Q1'23Q4'22Q3'22Q2'22Q1'22
5 635
5 941
5 811
4 698
4 777
5 777
6 271 6 428
Gas Oil
Seacrest operations
Assets, people, strategy and targets
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
1212 Seacrest PetroleoSeacrest Petroleo | Strategy and targetsSeacrest Petroleo | Strategy and targets
Capex FCF
0
100
200
300
400
500
600
2030202920282027202620252024
0
20
40
60
80
100
120
2030202920282027202620252024
2023 CPR 2022 CPR
5
10
15
20
25
204020382036203420322030202820262024
2023 CPR IPO Guidance
130
135
140
145
31 Dec '31AdditionsProduced1 Jan '23
140
3
7
144
0
10 000
20 000
30 000
40 000
2040
20382036203420322030202820262024
2023 CPR 2022 CPR
A strong reserve base
2P Reserves Production (bopd) Production cost (USD per barrel) 2P Upstream CFFO (USD million)
Scope for reserve upgrades
Upstream capex (USD million)
2P Reserves
Development of 2P Reserves (mmboe)
With stable and attractive economics Results in strong future cash
flows with reserve upside
1 196 mmboe
Larger oil and gas reserves
Produced 2P CPR
50%
29%
17%
Analogue fields
By renewing appraisals and reducing costs of extraction
598 mmboe
347 mmboe
CPR 2P
Reserves
204 mmboe
Produced
Existing target
Potential target
Oil and gas in place
Higher recovery rate
50% RF already
achieved in some
Cricaré fields
By type
Oil 90% Gas 10%
By asset
Norte Capixaba 73%
Cricaré 27%
By status
2P 40% PDP 13%
PDNP 16%PUD 31%
A complete strategy for cashflows and long term growth
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
1313 Seacrest PetroleoSeacrest Petroleo | Strategy and targetsSeacrest Petroleo | Strategy and targets
Sustainability
Seacrest Petroleo Annual Report 2023
14 SustainabilitySustainability
Introduction
Seacrest Petroleo was established in 2019 and started full operations in January 2022 at the Cricaré Cluster.
Since then, the operations have grown significantly. The number of employees has grown more than ten-fold
to 314, with an additional 1 332 contractors as part of operations. The total production volumes managed by the
Company are now more than 13 times higher than at the start of 2022 and the number of wells operated has
increased nearly four-fold.
Seacrest has developed a growing operational track record
thanks to a clear focus on health and safety and a dedication to
responsible operations and local community engagement.
Sustainability in a strategy context
The fields in the Cricaré and Norte Capixaba clusters have been
in operation for decades but had previously been subject to
underinvestment by the prior owner. The strategy of Seacrest
Petroleo is to increase production and the ultimate recovery rate
from the fields through various means such as re-opening and
maintenance of existing wells, drilling new infill wells and well
recompletions, as well as steam and water injection programmes.
The Company owns all related infrastructure for the fields,
consisting of pipelines and treatment facilities. This infrastructure
transports the oil to the Termninal Norte Capixaba, which is fully
owned by the Company and consists of storage tanks and export
facilities, including an offshore loading buoy.
With all infrastructure already in place, the Group enjoys favour-
able incremental cost economics and can control emissions and
reduce risk of spills and environmental damage.
Seacrest Petroleo executed its growth strategy during 2023,
tripling its organisation and raising oil production by more than
80% by the end of the year. Going forward, the ambition is to
more than triple production through the largest onshore drilling
programme in Brazil.
As a result, the Company is targeting to be in a growth mode
for years to come. Therefore, the focus will be on maintaining an
excellent health and safety track record, avoiding environmental
impacts, contributing jobs and value creation to local communi-
ties and building on a strong corporate culture with high ethical
standards. Strong growth generates challenges, which can
only be successfully dealt with through the development of a
high-performing and competent organisation.
Key sustainability
factors for Seacrest
Health and Safety
Climate impact
Protection of the environment
Work and development opportunities
Local community relationships
Ethics and business conduct
Seacrest Petroleo Annual Report 2023
15 SustainabilitySustainability | Introduction
Health and Safety
Why it is important
Seacrest Petroleo follows the principles
of “no harm to people” and “no
accidents”. Maintaining good health
and safety performance is essential for
operations. It is integral to attracting
and retaining a skilled workforce,
and to continuously maintain good
relations with the local communities
where the Company operates. Seacrest
Petroleo is subject to strict health and
safety regulations in Brazil, as well
as evolving industry standards and
international conventions. The impact
of breaching such regulations and
standards may be material.
Policies related to Health and Safety
Seacrest Petroleo has a Health, Environment and Safety Policy,
reflecting its commitment to operate responsibly and securely
and to never compromise on the Company’s standards for health,
safety and the environment. The Policy reflects the Company’s
commitments to:
• Comply with or exceed legal requirements and other
requirements
• Define objectives and goals that lead to improvements
• Support and train staff and ensure their competence in HSE
matters
• Manage the risks associated with contractors
• Report, investigate and learn from any accidents or near misses
• Routinely inspect workplaces and to audit systems and
processes
• Look for ways to improve our performance
Everyone involved with Seacrest Petroleo has the responsibility to
comply with this Policy and to assist in its execution.
Health and Safety performance
The Company is satisfied with its health and safety performance
during 2023, which built on a very strong 2022 – the first year of
actual operations. During the year, 134 critical operations and
maintenance contractors were converted to staff to more deeply
embed the Company’s HSE culture and secure further perfor-
mance improvement.
Seacrest Petroleo adopt the Heinrich risk management approach,
where near-miss identification and investigation reduces the
risk of higher impact events. The focus going forward is to
further strengthen the safety culture to eliminate high potential
incidents and near misses. As the activities grew significantly
during 2023, these parameters increased meaningfully and are
therefore deserving of renewed attention. Another focus area is to
ensure that the large contractor workforce adheres to and follows
Seacrest Petroleo’s principles and internal regulations.
Seacrest Petroleo Annual Report 2023
16 SustainabilitySustainability | Health and Safety
HEALTH AND SAFETY METRICS
Unit 2022 2023 Change
Percentage of own workforce covered by
health and safety management system % n.a. 100% n.m.
Number of fatailities as a result of work-related injuries or ill health # - - n.m.
- Own workforce # - - n.m.
- Other workers on the undertaking's sites # - - n.m.
Number of recordable work-related accidents (TRI) # - 4 n.m.
Rate of recordable work-related accidents for own workforce (TRIF) # / mn hrs - 1.5 n.m.
Number of cases of recordable work-related ill health of employees # n.a. - n.m.
Number of days lost to work-related injuries, fatalites or ill health (LTI) # - 1 n.m.
Rate of days lost to work-related injuries (LTIF) # / mn hrs - 0.4 n.m.
Serious incidents (SI) # - - n.m.
Serious incidents frequency (SIF) # / mn hrs - - n.m.
High Potential Incidents # 1 1 -
Near misses # 3 56 1 767%
Restricted workday cases # - 3 n.m.
Medical treatment cases # - - n.m.
Hours worked for own workforce 000 hrs 110 357 226%
Hours worked for contractors 000 hrs 898 2 247 150%
Total hours worked 000 hrs 1 008 2 605 158%
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1717 SustainabilitySustainability | Health and SafetySustainability | Health and Safety
Climate and the
Environment
Why it is important
Leveraging its existing infrastructure
for its activities is core to Seacrest
Petroleo. With no need for
construction and development activity
in the operations, a substantial source
of emissions is removed. Moreover,
onshore oil & gas production is
generally lower in emissions than
offshore oil & gas and entails reduced
oil spill risk compared to offshore
operations. The infrastructure is
already in place, which implies
reduced impacts on the native
vegetation and environment.
The Company is subject to strict environmental regulations and
permits in Brazil. Seacrest Petroleo complies with all license-to-op-
erate requirements when it comes to environmental management,
from water management to GHG emissions and aims to exceed all
environmental regulations through a continuous process of meas-
urement and improvement.
Physical climate risk is a relevant factor for the operations due to
the increased frequency and severity of storms that may result
in production disruptions and damage to equipment and assets.
Such events affected the Company’s operations during 2023, both
through severe droughts in the Amazonas, as well as extreme
storms affecting marine downstream logistics.
Longer term transition risks include global carbon emission taxation
schemes, which may have a negative impact on demand for hydrocar
-
bons or reduce the profitability of the operations, if levied on the producers.
Access to financing may also become more restricted as lenders may be
incentivised away from fossil fuels towards renewable energies.
Seacrest Petroleo therefore takes its climate responsibility seriously
and plans to set clear targets for performance related to carbon
emissions to ensure that it delivers a product that is low on emis-
sions and low on environmental impact. A process to identify ranked
projects for improvement has been started.
Climate and environmental performance
Seacrest Petroleo is required to track GHG emissions and energy
use related to production, and report this to the ANP (the Brazil
National Petroleum Agency) and the IBAMA (the Brazilian Institute
of Environment and Renewable Natural Resources), as specified in
the environmental licenses for the fields. The reporting covers both
Scope 1 and Scope 2 emissions.
The crude oil and petroleum products used refer to diesel oil used for
power generation, while the renewable energy consumption refers
to alcohol-based additives mixed into the fuel.
The Group has engaged with a sustainability consultancy to expand
the reporting structure, and to include other relevant parameters
such as water use, waste, and environmental impacts. The reporting
data for 2023 has been developed with the assistance of this third
party and has resulted in a restatement of the reported 2022
numbers. The adjustments reflect incorrect data calculations for
diesel consumption, as well as a revision of the GHG emissions data
to include only those reported to the ANP, in line with industry stand
-
ards in Brazil. The restatements are summarised in a separate table.
The increase in energy consumption in 2023 reflects the significant
increase in activity for the Company. In particular, the use of steam
units to boost production from the production wells resulted in a
significant increase in natural gas consumption, while the pump units
and vehicles recorded a significant uptick in diesel consumption.
Beginning in 2023, Seacrest Petroleo started to report some of the
upstream Scope 3 emissions, which refer primarily to the emissions
from trucks used to transport oil in the Company’s operations.
Other environmental parameters have only been reported from 2023
and onwards, so there is no comparison with the prior year. The ambi
-
tion is to broaden the disclosures of environmental data, including
pollution metrics, and to set performance targets where necessary.
Seacrest Petroleo Annual Report 2023
18 SustainabilitySustainability | Climate and the Environment
CLIMATE AND ENVIRONMENTAL PERFORMANCE
Unit 2022 2023 Change
Production Numbers
Oil 000 boe 460 2 300 400%
Natural gas 000 boe 41 246 500%
Total production 000 boe 501 2 546 408%
ENERGY
Energy Consumption
Fuel consumption from coal and coal products MWh - - n.m.
Fuel consumption from crude oil and petrolum products MWh 3 347 74 305 2120%
Fuel consumption from natural gas MWh 41 991 298 687 611%
Fuel consumption from other fossil fuel sources MWh - - n.m.
Consumption of purchased or acquired electricity,
heat, steam, or cooling from fossil sources MWh 5 045 32 661 547%
Total fossil energy consumption MWh 50 383 405 653 705%
Share of fossil sources in total energy consumption % 99% 100% 1%
Energy consumption from nuclear sources MWh - - n.m.
Share of energy consumption from nuclear sources % - - -
Unit 2022 2023 Change
Fuel consumption from renewable sources MWh 395 491 24%
Consumption of purchased or acquired electricity,
heat, steam, or cooling from renewable sources MWh - - n.m.
Consumption of self-generated non-fuel renewable energy MWh - - n.m.
Total renewable energy consumption MWh 395 491 24%
Percentage of renewable sources in total energy consumption % 1% - (1%)
Total energy consumption 50 778 406 144 700%
Non-renewable energy production MWh - - n.m.
Renewable energy production MWh - - n.m.
Energy intensity from activities in high climate impact sectors MWh/USDm 1 510 2 289 52%
Net revenue from activities other than in high climate impact sectors
USDm - - n.m.
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1919 SustainabilitySustainability | PeopleSustainability | People
GHG EMISSIONS
Unit 2022 2023 Change
Scope 1 GHG Emissions
Gross Scope 1 GHG emissions tCO
2
e 12 356 103 203 735%
Share of Scope 1 GHG emissions from regulated emission trading schemes
% - - n.m.
Scope 2 GHG Emissions
Gross location-based Scope 2 emissions tCO
2
e 638 1 391 118%
Gross market-based Scope 2 emissions tCO
2
e n.a. n.a. n.m.
Significant Scope 3 Emissions
- From employee business travel tCO
2
e n.a. 30 n.m.
- From employee commuting tCO
2
e n.a. 30 n.m.
- From upstream transport tCO
2
e n.a. 2 178 n.m.
- From downstream transportation and distribution tCO
2
e n.a. 6 489 n.m.
Total Scope 3 Emissions n.a. 8 727 n.m.
Total GHG emissions (Location Based) tCO
2
e 12 993 113 321 772%
Total GHG emissions (Market Based) tCO
2
e n.a. n.a. n.m.
GHG emission intensity
Net revenues USDm 34 177 428%
GHG emission intensity (Scope 1+2, location based)
tCO
2
e/USDm
387 589 53%
GHG emission intensity (Scope 1+2, location based) kgCO
2
e/boe 25.9 41.1 58%
RESTATEMENT OF 2022 DATA
Unit
2022
restated
2022
reported Change
Energy metrics
Total fossil energy consumption MWh 50 383 63 735 (21%)
Total renewable energy consumption MWh 395 1 116 (65%)
Total energy consumption MWh 50 778 64 851 (22%)
Energy intensity from activities in high climate impact sectors MWh/USDm 1 510 1 929 (22%)
Energy intensity in own operations MWh/boe 101 129 (22%)
Total energy consumption from activities
in high climate impact sectors MWh 50 778 64 851 (22%)
Net revenue from activities in high climate impact sectors USDm 34 34 -
Net revenue from activities other
than in high climate impact sectors USDm - - -
GHG emissions metrics
Scope 1 GHG emissions tCO
2
e 12 356 42 112 (71%)
Scope 2 GHG emissions tCO
2
e 638 638 -
Scope 1+2 GHG emissions tCO
2
e 12 993 42 750 (70%)
GHG emission intensity (Scope 1+2, location based) tCO
2
e/USDm 387 1272 (70%)
GHG emission intensity (Scope 1+2, location based) kgCO
2
e/boe 26 85 (70%)
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ENVIRONMENTAL PERFORMANCE
Unit 2022 2023 Change
Spills and leakages
Hydrocarbon spills to the environment - oil # 3 5 67%
Hydrocarbon spills to the environment - gas
# - - n.m.
Water
Surface water withdrawn from freshwater 000 m
3
n.a. 2.2 n.m.
Produced water withdrawn from freshwater 000 m
3
n.a. 4.8 n.m.
Total water withdrawal 000 m
3
n.a. 7.0 n.m.
Water discharge to surface water 000 m
3
n.a. - n.m.
Water discharge to groundwater 000 m
3
n.a. 1.6 n.m.
Water discharge to third-party water 000 m
3
n.a. - n.m.
Total water discharge 000 m
3
n.a. 1.6 n.m.
Total water consumption 000 m
3
n.a. 5.4 n.m.
n.a.
Share of water from regions with High Water Baseline Stress % n.a. - n.m.
Share of water from regions with Extremely High Water Baseline Stress
% n.a. - n.m.
Water discharge share of water withdrawal % n.a. 23% n.m.
Water consumption per produced unit m
3
/boe n.a. 0.02 n.m.
Waste water discharge per produced unit m
3
/boe n.a. 0.01 n.m.
Unit 2022 2023 Change
Waste
Hazardous waste generated Mt 250 1 444 478%
Hazardous waste diverted from disposal Mt - - n.m
Hazardous waste directed to disposal Mt 250 1 444 478%
Non-hazardous waste generated Mt 16 33 112%
Non-hazardous waste diverted from disposal Mt - - n.m
Non-hazardous waste directed to disposal Mt 16 33 112%
Total waste generated Mt 266 1 478 456%
Total waste diverted from disposal Mt - - n.m
Total waste directed to disposal Mt 266 1 478 456%
Waste Intensity
Hazardous waste per produced unit Mt/000 boe 0.5 0.6 14%
Total waste per produced unit Mt/000 boe 0.5 0.6 9%
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People
Why it is important
At year-end 2023, Seacrest Petroleo
had 314 employees, of which 305 were
in Brazil. The Company also had 1 332
contracted personnel, all located in
Brazil and engaged in the Company’s
operations.
Access to skilled personnel is key
to the success of Seacrest Petroleo
due to its reliance on engineers and
specialists within a wide range of
sciences. The Company is committed
to recognising diversity and to ensure
equal opportunities, including fair
employment conditions.
Characteristics of workforce and performance
During 2023, there was an effort to collect more data relating to
the workforce, particularly relating to gender characteristics and
parameters, which has improved the Company’s disclosures.
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22 SustainabilitySustainability | Local Communities
Local Communities
Why it is important
The operations of Seacrest Petroleo
takes place in regions in Brazil that
are considered affected by poverty
and characterised by low incomes
and high unemployment.
The Company is an important
employer locally and with the
substantial growth ambitions
going forward, Seacrest Petroleo
will increase its importance to local
communities through job creation
and tax. The approach is therefore
to treat the local communities as
partners, both in terms of business
and as source of human resources.
Engagement with local communities
The Company’s practices are based on close relationships with the communities: holding continuous meetings, providing an effective
communication channel and a grievances management. Engagement is carried out directly by the Company’s Social Responsibility team,
with respect and appreciation of the singularities present in the social context of each community.
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23 SustainabilitySustainability | Local Communities
OWN WORKFORCE
Unit 2022 2023 Change
Characteristics of own workforce
Total number of permanent employees # 105 314 199%
- Female
# 27 57 111%
- Male # 78 258 231%
Total new hires # 75 237 216%
- Female # n.a. 14% n.m.
- Male # n.a. 86% n.m.
Number of employee turnover (leavers) # 3 30 900%
Peromanent employee turnover rate % 5% 14% 9%
Total number of non-employees in own workforce # n.a. 1 332 n.m.
Number of employees (head count) at executive management level # 16 19 19%
- Female % 25% 26% 1%
- Male % 75% 74% (1%)
Number of employees (head count) at leadership level # 28 33 18%
- Female
% 18% 27% 9%
- Male % 82% 73% (9%)
Employees by region
South America (Brazil) # 97 305 214%
North America (US and Bermuda)
#
2 2 -
Europe (UK and Norway) # 5 6 20%
Middle East (UAE) # 1 1 -
South America (Brazil) % 92% 97% 5%
North America (US and Bermuda) % 2% 1% (1%)
Europe (UK and Norway) % 5% 2% (3%)
Middle East (UAE) % 1% - (1%)
Unit 2022 2023 Change
Employees - by age
< 30 # 9 16 78%
30-50 # 77 249 223%
> 50 # 19 49 158%
< 30 % 9% 5% (3%)
30-50 % 73% 79% 6%
> 50 % 18% 16% (2%)
Training and skills development
Average number of training hours per employee # n.a. 24 n.m.
Remuneration metrics
Gender pay gap % 65% 78% 14%
Incidents, complaints and severe human rights impacts
Incidents of discrimination # - - n.m.
Number of complaints filed through channels for
people in own workforce to raise concerns # n.a. - n.m.
Amount of material fines, penalties and compensation
for damages as a result of human rights violations USD '000 n.a. - n.m.
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Business Conduct
Why it is important
Seacrest Petroleo is committed to
upholding high ethical standards
in all its business activities. All
employees and others performing
work for and on behalf of Seacrest
Petroleo and/or any of its affiliates
are expected to adhere to all
applicable laws and regulations
and the Company’s code of
conduct, and to demonstrate
ethical behaviour in their business
relations and decisions.
Policies related to business conduct
The policy framework consists of:
• Anti-corruption Policy
• Gifts and Entertainment Policy
• Oversight of Service Providers Policy
• AML and Sanctions Compliance Policy
• Business Continuity Plan and Policy
The full set of policies are available at the Company’s website,
www.seacrestpetroleo.com.
Seacrest Petroleo has zero tolerance with respect to bribery
and corruption and each group company and all personnel are
required to comply with all relevant anti-corruption and anti-
bribery laws, rules and regulations of all jurisdictions where the
Seacrest Petroleo has operations.
The Anti-Corruption Policy reflects the commitment to conduct
business with the utmost integrity and provides the framework
for what is considered responsible conduct in business and oper-
ations. Compliance with all applicable laws, rules and regulations,
including anti-corruption laws, is fundamental. The Policy applies
to the Company’s personnel and all representatives, business
partners, and to all to joint ventures, mergers and acquisitions and
other transactions in which the Company participates.
The Chief Compliance Officer (CCO) has responsibility for the
administration of the Anti-Corruption Policy and other compliance
policies and procedures and monitors the compliance with such
policies across the Group.
As directed by the CCO or Management, the Company
shall undertake periodic global corruption risk assessments
with respect to its then current and anticipated activities.
Management will ensure that group personnel and represent-
atives understand and are able to comply with the policies and
procedures through internal and external communication,
including training.
It is the Company’s policy to conduct due diligence on critical
third-party service providers prior to their engagement. Such
reviews include the service provider’s compliance with the terms
of agreements in place and assessment of the service provider’s
continued suitability and capacity to perform the activities being
outsourced. The Company also determines whether the service
provider maintains adequate physical and data security controls,
transaction procedures, business continuity and IT contingency
arrangements (including periodic testing), insurance coverage,
and compliance with applicable laws and regulations. Seacrest
Petroleo has established a reporting channel with partner
Contato Seguro for employees, contractors, and other stake-
holders to confidentially report any concerns or complaints
about issues in the corporate environment.
The Company has a compliance training programme which
comprises regular online training provided by a third party, with
certifications awarded upon approval, as well as weekly newslet-
ters delivered to the operations teams in Brazil.
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25 SustainabilitySustainability | Local Communities
BUSINESS CONDUCT
Unit 2022 2023 Change
Human rights and corruption
Human rights violations recorded # n.a. - n.m.
Proportion of workforce completed anti-corruption training
% n.a. 90% n.m.
Whistleblower incidents recorded # n.a. 41 n.m.
Composition of Board of Directors
Male % 100% 100% n.m.
Female % - - n.m.
Number of Directors 9 7 (22%)
Independent Directors 4 4 -
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Governance
Seacrest Petroleo Annual Report 2023
27 GovernanceGovernance
Board of Directors’ report
Introduction
Seacrest Petroleo is an independent oil and gas production
company with an integrated portfolio of producing oil fields
and export infrastructure onshore in Espírito Santo, Brazil. The
Company has exclusive control over its infrastructure, continu-
ously from field production to an offshore tanker loading terminal,
allowing for cost-effective operations growth, and enabling direct
access to markets for its premium grade products.
The Company was incorporated in Bermuda on 5 June 2019 as
an exempted company limited by shares under the Bermuda
Companies Act. The Company’s registered office address is
Victoria Place, 31 Victoria Street, Hamilton HM 10, Bermuda, and its
website is www.seacrestpetroleo.com.
Seacrest Petroleo is headquartered in Bermuda, while the Group’s
business activities are conducted in Brazil through the Rio de
Janeiro office. The Company also has representatives in Uruguay,
the United Kingdom and Norway.
The Company was formed to acquire assets from Petrobras’
divestment programme. In August 2020, the Company entered
into an agreement with Petrobras to acquire the Cricaré cluster,
which comprises 27 onshore oil concessions and the related oil
and gas production assets. The acquisition closed in December
2021 and the Company assumed operational responsibility of
Cricaré from January 2022.
In February 2022, the Company entered into a purchase agree-
ment with Petrobras for the acquisition of the Norte Capixaba
cluster, which comprises four onshore oil concessions with related
oil and gas production assets and the Terminal Norte Capixaba,
which is operated by a subsidiary of Petrobras. The closing of the
Norte Capixaba acquisition took place on 12 April 2023, resulting
in the Company becoming the third largest onshore oil and gas
producer in Brazil.
Operational review
During 2023, Seacrest Petroleo continued with initiatives to
further raise production from the Cricaré Cluster through
re-opening of more wells, pump stroke optimisation, steam injec-
tion and workovers. More wells in production and a significantly
higher well productivity resulted in production from the Cluster
almost doubling from 2022.
Seacrest Petroleo took over operations in the Norte Capixaba
Cluster on 12 April 2023 and immediately executed a similar
strategy of re-opening wells and improving well productivity. The
Cluster is younger than Cricaré and with more modern infrastruc-
ture, yielding higher production per well. Production since the
takeover has been approximately 15% higher than was the case in
the 12 months prior to takeover.
Overall, the Company exited 2023 with a production level 82%
higher than one year earlier (including Norte Capixaba on a pro
forma basis), showing the quality of the assets, as well as the
benefits of Seacrest Petroleo’s targeted efforts.
Nevertheless, the Company experienced several challenges in the
second half of the year. Electricity outages in some of the fields, in
part as a consequence of poor maintenance by the prior owner,
periodically affected production in the third quarter, slowing
down the scheduled production ramp up. In the fourth quarter,
unprecedented weather events put several offtakes on hold and
with oil storage capacity full, production had to be temporarily
reduced until offtakes could resume. This resulted in a significant
drop in November production and, while recovery was swift in
December, the fourth quarter production was lower than had
been expected.
There was a delay to the completion of required maintenance
work at the Terminal Norte Capixaba (TNC). Testing and certifi-
cation of the terminal pipelines and monobuoy for the export of
on-spec very low sulphur fuel oil has also been delayed into 2024,
and remains the highest priority to resolve in the first half of the
year. Thus, Seacrest Petroleo has not been able to start selling this
premium product on the planned timeline.
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The organisation has been strengthened throughout 2023
along with the significant expansion of activities. The number of
employees has grown from 105 at the end of 2022 to 314 at the
end of 2023. Both the central management teams and the oper-
ational teams have been able to attract highly skilled personnel
with very strong industry track records.
Reserves and resources
At year-end 2023, Seacrest Petroleo had certified 2P reserves of
143.9 mmboe, consisting of of 90% oil reserves and 10% natural gas
reserves. Of this, 60% are regarded as 1P reserves (86 mmboe) and
the remaining 58 mmboe as 2P reserves. There is an additional
23 mmboe in 3P reserves. Overall 2P reserves represent a year-
over-year increase of 3%. Adjusting for production during 2023,
the increase amounts to 5%. The Company’s focus on increasing
production and developed reserves resulted in PDP and PD
reserves being maintained, despite the production of 3 mmboe
during the year and the expected PDP cash flows for the first
five-year period is up 50% from last year. The gas reserves have
been raised significantly and allows for steam generation fuel
self-sufficiency until 2040.
Certified resources in place amount to 1.2 bnboe and the recovery
rate to date is a combined 17%. The certified 2P reserves target a
recovery rate of 29% for both clusters combined.
Health, safety, security, environ-
ment and quality (HSSEQ)
Health, safety, security, environment and quality (“HSSEQ”) have
the highest priority throughout the Seacrest Petroleo organisa-
tion. The Company has established policies for safety, security,
occupational health and environmental management.
The Company prioritises safety in all its operations and has “zero
harm” as an overriding objective for personnel and the environ-
ment. The Company also shows due respect for the individual,
human rights and employment practices.
The HSSEQ performance has been excellent during 2023 with
only one lost time incident recorded, resulting in a lost time inci-
dent rate of only 0.47. The total number of recordable incidents
were four. There were five reportable hydrocarbon spills to the
environment, all of which were swiftly rectified without harm to
the environment, and subject to investigation to identify lessons
to be applied in ongoing operations.
Financial review
The consolidated financial figures for Seacrest Petroleo relate to
the full-year 2023. The comparable figures from 2022 include only
the operation of the Cricaré Cluster, while the 2023 figures include
Norte Capixaba from 12 April.
Profit and loss
Income statement revenue was USD 177.4 million in 2023
compared to USD 33.6 million in 2022. Production costs and
general and administrative expenses were USD 160.4 million in
2023 compared to USD 44.7 million in 2022.
Earnings before interest, taxes, depreciation, and amortization
(EBITDA) for 2023 were USD 17.1 million compared to losses of
USD 11.1 million in 2022. EBITDA had a strong up-trend during the
year with the fourth quarter run-rate indicating further growth in
2024.
Operating loss was USD 44.8 million in 2023 compared to a loss of
USD 34.2 million in 2022.
The changes in revenue and EBITDA were due to the Company
taking over operations at the Norte Capixaba from 12 April 2023,
and from a general increase in oil production and offtakes.
The operating losses were affected by amortization of the intan-
gible assets related to the Norte Capixaba cluster and by the
increase in overall production.
Net financial expenses were USD 60.5 million compared to
USD 104.6 million in 2022. The increase in interest expense from
the prior year was USD 22 million, which was offset by USD 55
million in lower expensed hedging costs.
Tax income (deferred) was USD 25.9 million in 2023, compared to
USD 19.6 million in 2022.
Net losses were USD 79.3 million in 2023 compared to net losses
of 119.2 million in 2022.
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Balance sheet
At of 31 December 2023, Seacrest Petroleo had a total equity of
USD 160.1 million, compared to minus USD 52.7 million in 2022.
As of 31 December 2023, the Company had interest-bearing debt
of USD 315.7 million compared to USD 65.7 million in 2022.
Cash flow
Net cash flow from operating activities was negative by USD 10.5
million in 2023 compared to USD 38.3 million negative in 2022.
Net cash outflow from investment activities amounted to
USD 440.8 million in 2023 compared to USD 39.7 million in 2022.
The investments were largely related to the USD 426.65 million
Norte Capixaba acquisition.
Net cash inflow from financing activities in 2023 was USD 503.0
million, reflecting the proceeds from the IPO and the private
placement in December, as well as USD 263 million net increase
in financial loans and lease debt. In 2022, the net cash inflow from
financing activities was USD 67.6 million.
Liquidity and financing
As of 31 December 2023, Seacrest Petroleo had cash and cash
equivalents of USD 50.5 million compared to USD 7.7 million in
2022.
Parent company accounts
Seacrest Petroleo Bermuda Limited reported a net loss of USD 7.4
million for 2023 (USD 14.1 million). As at 31 December 2023 total
assets amounted to USD 316.1 million (USD 73.9 million) and
equity was USD 312.0 million (USD 50.3 million).
Going concern
Based on Seacrest Petroleo’s overall position at the end of the year,
as well as the current outlook, the Board of Directors believes that
Seacrest Petroleo has a good foundation for continued operations.
The accounts have been prepared on a going concern basis.
Corporate governance policy
Seacrest Petroleo supports the principles of the Norwegian Code
of Practice for Corporate Governance (the Code) issued by the
Norwegian Corporate Governance Board (NUES/NCGB). As a
company incorporated in Bermuda, the Company is also subject
to Bermuda laws and regulations with respect to corporate
governance.
More detailed information can be found in the separate Corporate
Governance Report section of this Annual Report.
Risk factors
Seacrest Petroleo’s risk exposure is analysed and evaluated to
ensure sound internal control and appropriate risk management
based on internal values, policies, and code of ethics. Seacrest
Petroleo is exposed to market risk,including commodity price risk,
political risk, climate risk, credit risk, and liquidity risk.
Development of oil and gas fields is associated with risks
including but not limited to, the price of crude oil, cost overruns
and production disruptions, as well as delays compared to initial
plans. Some of the most important risk factors are related to the
estimation and recoverability of reserves. Changes to energy
prices might influence the economic viability of ongoing and
planned developments and anticipated revenues from the
production of such developments. Furthermore, the global
energy transition trend has heightened risks related to climate
change for Seacrest Petroleo.
The development and operation of oil and gas fields is capital
intensive and Seacrest Petroleo may, from time to time, require
access to capital. The Company is therefore exposed to risks
related to the availability of such capital in a timely manner and to
the cost of such capital.
Seacrest Petroleo expects continued regulatory attention,
including changes to taxation relating to climate change. The
overall risk management programme focuses on addressing
these risks and seeks to minimise potential adverse effects on
Seacrest Petroleo’s financial performance.
The most important operational risk factors are related to
the operation of the Cricaré and Norte Capixaba clusters, the
management and timing of offtakes, and the execution of
projects, which could lead to accidents, oil spills and damage to
the environment if not managed properly.
Seacrest Petroleo’s ability to make payments on or refinance
any debt and to fund working capital and capital investments
will depend on its future operating performance and ability
to generate sufficient cash. This depends on the success of its
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business strategy and on general economic and other factors,
many of which are beyond Seacrest Petroleo’s control. Seacrest
Petroleo cannot assure that its business will generate sufficient
cash flow from operations or that future debt and equity financings
will be available to it in an amount sufficient to enable it to pay its
debt or to fund its other liquidity needs. Also, any failure by Seacrest
Petroleo to comply with covenants in its debt obligations, or to
make debt repayments on a timely basis would likely cause an
event of default under its debt arrangements.
Recent global macroeconomic and geopolitical developments
have supported higher energy prices amid concerns for regional
energy shortages. At the same time, inflationary pressures and
higher interest rates are dampening global economic growth,
resulting in headwinds for oil demand growth and prices.
Seacrest Petroleo’s operational activities are subject to tax in
Brazil. As assets and production are long-term in nature, Seacrest
Petroleo’s results could be exposed to risk of changes to tax legis-
lation in Brazil.
Seacrest Petroleo is also subject to risks associated with the
overall energy policies in Brazil, as well as changes to regulatory
regimes, that may emerge for political reasons.
For more information about risk factors identified for the
Company, see the prospectus dated 8 February 2023, in relation
to the IPO of Seacrest Petroleo.
Outlook
Seacrest Petroleo prioritises safety first with zero harm as an over-
riding objective for people and the environment. Seacrest Petroleo
is reducing its carbon footprint by developing discovered oil and
gas resources through the use of existing production infrastructure.
Seacrest Petroleo expects oil and gas to remain an important part
of the global energy mix in the decades to come and remains
focused on realising long-term value creation via its phased
development strategy and targeting investments in high-return
activities. This flexible investment strategy fits a range of market
scenarios and positions Seacrest Petroleo to address both short-
and long-term opportunities to drive cash flows and earnings.
Energy prices remain at high levels despite a softening of macroe-
conomic drivers during 2023 as inflation and higher interest rates
slowed global economic growth.
Seacrest Petroleo has a target to create significant value for its
stakeholders going forward. Short-term, the focus is on raising
production and ultimate resource recovery from the Cricaré
and Norte Capixaba Clusters significantly through pursuing the
largest drilling programme onshore Brazil. The Company aims to
triple the combined production from the two clusters by 2027 and
to add additional reserves to its 2P reserve base in the process.
This should support significant positive cash flow at current
oil price levels medium term. However, the ambitious drilling
programme will require significant investments short term which
will have to be financed by the Company’s ongoing cash flow,
existing cash on the balance sheet and potentially access to
further liquidity from banks, partners or the capital markets..
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Events after the reporting date
In January 2024, Seacrest Petroleo Bermuda Limited paid the
contingent consideration of USD 36 million under the terms of
the Cricaré and Norte Capixaba Sale and Purchase Agreements
with Petrobras and successfully issued a 3-year USD 80 million
senior unsecured bond with a coupon of 16% p.a.
The net proceeds from the bond issue will strengthen the
Company’s ability to grow production through drilling, work-overs
and other field development optimisations at the Norte Capixaba
and Cricaré Clusters.
Rio de Janeiro, Brazil/Hamilton, Bermuda 24 April 2023
The Board of Directors of Seacrest Petroleo Bermuda Limited
Erik Tiller
Executive Chairman
Rune Olav Pedersen
Director
Denis Chatelan
Director
Martin Bachmann
Director
Robert Lawson
Director
Pedro Magalhães
Director
José Alcides Santoro Martins
Director
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Board of
Directors
Erik Tiller
Executive Chairman
Erik Tiller has more than 25 years of experience in finance and
business, both within the oil and gas industry and the asset
management industry. In 2011 Tiller co-founded the Seacrest
Group, an international oil and gas private equity group. In
addition to being a co-founder of the Company, Mr. Tiller also
co-founded the Norwegian oil and gas company OKEA ASA
in 2015. Mr. Tiller holds a BA in Business Administration and
International Management from California Lutheran University.
Mr Tiller is a Norwegian citizen residing in Bermuda.
Robert Lawson
Board Member
Mr Lawson is the Executive Vice President of and a member of
the board of directors of Mercuria Energy Group. Prior to joining
Mercuria in 2022, Mr Lawson spent 32 years working at BP in its
upstream, downstream and trading businesses, including as
commercial vice president for BP’s refining and marketing busi-
ness and as global head of M&A. Mr Lawson is also a non-executive
director of London-listed Serica Energy plc. Mr Lawson is a British
citizen residing in Switzerland.
Rune Olav Pedersen
Board Member
Rune Olav Pedersen has served as President & CEO of PGS ASA
since 2017. Mr. Pedersen has previously held the position of executive
vice president & general counsel at the company. Prior to joining
PGS he was a partner in the oil and gas department of the law firm
Arntzen de Besche. He has a law degree from the University of Oslo,
a post-graduate diploma in European competition law from Kings
College London and an Executive MBA from London Business
School. Mr Pedersen is a Norwegian citizen and a resident of Norway.
Denis Chatelan
Board Member
Denis Chatelan has more than 30 years of experience within
finance and management and has extensive board experi-
ence. Since 2016, he has held the position of Head of Business
Development at Perenco, an independent Anglo-French oil and
gas company. Prior to joining Perenco in 2004, he worked as CFO
Africa at Rougier S.A. and as a consultant at Deloitte & Touche
(France). He holds a major in finance from Paris ESCP Business
School. Mr Chatelan holds both French and UK citizenship and is
a UK resident.
Martin Bachmann
Board Member
Martin Bachmann is a trained geophysicist, with more than 35
years’ executive experience across the global oil and gas business.
He is currently chairman of the boards of directors of Sval Energi
and NEO Energy Group, both North Sea-focused producers.
Prior to that, he was a member of Wintershall’s board of exec-
utive directors for 10 years. Previously, he had a 25-year career
with Shell, managing various businesses in the FSU, Spain, the
Netherlands, the North Sea and the Middle East. Mr Bachmann is
a Swiss citizen residing in Switzerland.
Pedro Magalhães
Board Member
Pedro Magalhães is a partner at the Brazilian law firm Nunes
Fernandes & Advogados Associados since 2005 and has extensive
experience in the power business regulation and in the oil and
gas sector. He is currently a member of the board of directors of
several companies, including TEP – Termoeletrica Potiguar S.A.,
Água Limpa Energia S.A and Areia Energia S.A, São Francisco
Energia S.A. Mr. Magalhães holds a Bachelor of Laws from the
Federal university of Bahia and an MSc in Energy lndustry
Regulation from the University of Salvador. Mr Magalhães is a
Brazilian citizen and a resident of Brazil.
José Alcides Santoro Martins
Board Member
José Alcides Santoro Martins is a civil engineer and a petroleum
engineer. He graduated from the Escola Politecnica da USP in
1978 and from the Petroleum Engineering Course offered by
Petrobras in 1981. Mr Martins has more than 43 years’ experience
in exploration and exploitation of petroleum, including the admin-
istration of subsidiaries of Petrobras and Gaspetro and as board
member in Gaspetro, Transpetro and other companies in the oil
industry. Mr Martins is a Brazilian citizen and a resident of Brazil.
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Michael Stewart
CEO
Michael Stewart has more than 30
years of experience in the energy
and finance industries. Prior to
joining the Seacrest Group, he
worked for SBCM (the Sumitomo
Bank trading division), SmithBarney,
Salomon Brothers, and Bearing
Capital. Mr. Stewart holds an A.B.
from Columbia College of Columbia
University in the City of New York.
Scott Aitken
President of the Executive
Committee
Scott Aitken has 30 years of expe-
rience within management and
engineering, mainly within the oil
and gas industry. Mr Aitken has 16
years’ experience as a chief exec-
utive officer, 6 years’ experience at
regional management level and
6 years in petroleum engineering
and asset management. Mr Aitken
is currently the CEO of High Power
Petroleum LLC. Mr Aitken holds
a degree in physics from the
University of Strathclyde.
Torgeir Dagsleth
Group CFO
Torgeir Dagsleth has over 30 years
of experience in the oil and gas
industry. Prior experience includes
serving as CFO of Seacrest Capital
Group, Vice President Finance of
Kongsberg Automotive ASA, CFO of
Terra Global Ltd and Assistant Group
Controller of PGS ASA. He holds
a bachelor´s degree in business
management from the Norwegian
Business School (BI).
Juan Alves
Senior VP Production and
Operations
Juan Alves has more than 10 years
of experience within the oil and gas
industry in Brazil, with particular
expertise in mature and marginal oil
fields management, revitalisation,
development and optimization works.
Mr Alves has previously worked as
general manager at PetroReconcavo.
Mr Alves holds a degree in chemical
engineering and a postgraduate
degree in specialisation of drilling
fluids, completion and stimulation
of wells, both from the Federal
University of Rio Grande do Norte.
Felipe Vigne Germini
Senior VP of Well Construction
(Drilling)
Felipe Germini has over two
decades of global experience in the
energy sector. With a proven track
record at Schlumberger, his exper-
tise in upstream oilfield services and
management consulting includes
deep experience in the Brazilian
onshore sector, but also spans North
America, Latin America, the Middle
East, Europe, and Africa. Mr Germini
holds a Bachelor’s degree from the
Federal University of Rio de Janeiro.
Executive management
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Rogerio Marques Vasques
SVP Development
Rogerio Vasques has more than 24
years of experience in the petroleum
industry, including international
experience in the US and Argentina
for companies such as Chevron,
PetroReconavo and Repsol YPS.
Mr Vasques holds an MBA from
Fundacão Dom Cabral and an engi-
neering degree from Universidade
Estadual de Campinas.
Thomas Kandel
Asset Investment Director
Thomas Kandel has more than
10 years’ experience from the oil
industry. He previously served in
M&A and Portfolio Management at
Seacrest Group and Engie. He holds
master’s degree in engineering
from Ecole Centrale de Lyon and
from IFP School.
Peter O’Driscoll
General Counsel
Peter O’Driscoll has served as
General Counsel of the Company
since June 2019. For the period
from June 2005 to June 2019, he
was a partner of Orrick, Herrington
& Sutcliffe LLP, and prior to that
worked in other recognised interna-
tional law firms in London and New
York. Mr. O’Driscoll is a member of
the Bar of the State of New York.
He obtained his law degree from
Northwestern University School of
Law and a BA in English Literature
from Oral Roberts University.
John de los Santos
Head of Investor Relations
John de los Santos has more than
10 years of experience in finance
and investment research. Before
joining Seacrest Petroleo he was an
equity research analyst at Redburn,
where he covered the oil majors,
European E&Ps and carbon capture;
and at UBS, where he covered oil
macro and a wide range of oil and
gas companies in London and New
York. He has an MBA from Columbia
Business School and prior experi-
ence in credit analysis covering the
Asia Pacific TMT sector at Citibank.
Giovanna Siracusa
General Manager
Giovanna Siracusa has held the
position of General Manager at
Seacrest Petroleo since October
2020. She has over 10 years’ experi-
ence in business administration and
financial analysis. She has previously
worked in M&A and equity research
within the oil and gas industry. She
holds bachelor’s degree in business
administration from Fundação
Getulio Vargas, São Paulo, Brazil.
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Corporate Governance
Seacrest Petroleo strives to protect and enhance shareholder value through openness, integrity and equal
shareholder treatment. The Company is committed to maintaining high standards of corporate governance
and investor relations as a key element of the strategy to reduce risks and increase value creation for the
benefit of shareholders, employees, the environment and the society as a whole.
1. Corporate Governance in Seacrest
Seacrest Petroleo Bermuda Limited is a Bermuda excempted
limited company listed on Euronext Expand Oslo.
The Company and its activities are primarily governed by the
Bermuda Companies Act, its Memorandum of Association and its
Bye-laws. In addition, the Company is subject to certain aspects of
the Norwegian Securities Trading Act, the Norwegian Accounting
Act and the continuing obligations for companies listed on the
Oslo Stock Exchange.
The Board of Directors of the Company (the “Board”) has prepared
the following report that explains the Group’s corporate govern-
ance practices and how it has complied with the Norwegian Code
of Practice for Corporate Governance (the “Corporate Governance
Code”) in the preceding year. The application of the Corporate
Governance Code is based on the “comply or explain” principle
and deviations from the Code, if any, are explained under the
relevant item. The Group’s corporate governance practices are
subject to annual reviews and discussions by the Board.
Subject to the deviations identified below, the Company will seek
to comply with the Norwegian Code of Practice for Corporate
Governance.
Deviations to the Code
In its own assessment, the Company as at 31 December 2023 did
not comply with the following recommendations of the Corporate
Governance Code:
• Section 2 – The Business: Pursuant to the Company’s
Memorandum of Association, the objects for which the
Company was formed and incorporated are unrestricted
• Section 3 – Equity and dividends:
– The Board’s authority to increase the Company’s issued share
capital is limited to the extent of its authorized but unissued
share capital at any time and is not restricted to specific
purposes
– The Company’s Bye-laws permit the Board to grant share
options in respect of authorized but unissued shares or
shares held in treasury to employees without requiring that
a general meeting of shareholders be presented with the
volume or other terms and conditions of such grant
– Under the Company’s Bye-laws, the Board may declare
dividends and distributions without the approval of a general
meeting of shareholders
• Section 4 – Transactions with close associates: The Bermuda
Companies Act does not contain special case management
requirements concerning how specifically defined agreements
between public companies and close associates are to be handled
• Section 6 – General meetings of shareholders:
– The Company will normally not have the entire Board attend
general meetings of shareholders, as this is not required by
Bermuda law
– Pursuant to the Company’s Bye-laws, general meetings of
shareholders are chaired by the chairperson of the Board or,
in his or her absence, another member of the Board
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• Section 7 – Board of Directors, composition
and independence:
– The chairperson of the Board is elected by the Board and not
by the shareholders
– The Board will include members of the Management
• Section 8 – The work of the board of directors:
– The Board has not established board rules as the Company’s
Bye-laws are more detailed than the articles of association
typically used by Norwegian companies
– Section 8.2 and 8.3: The Nomination and Corporate
Governance Committee is established by and reports to
the Board. Further, members of the Board comprise the
members of the Nomination and Corporate Governance
Committee
• Section 10 – Remuneration of the board of directors: The
remuneration of the Board is determined by the Board based
on recommendations made by the Remuneration Committee.
Further, members of the Board will participate in the
Company’s share option plan
• Section 13 – Take-overs: The Company does not have separate
guidelines on how to respond in the event of a takeover bid
2. The business
Seacrest Petroleo is an independent oil and gas producer focused
on the redevelopment of mid-life onshore producing oil and gas
fields.
The Company’s principal strategies are described in the Strategy
section of the annual report and on the Company’s website
www.seacrestpetroleo.com.
The Company’s Memorandum of Association provides that the
Company’s objects and purposes are unrestricted. This deviates
from the recommendation in the Corporate Governance Code but
is in line with the requirements of the Bermuda Companies Act
3. Equity and dividends
Equity
On 31 December, 2023, the Company’s consolidated equity was
USD 160.1 million, which is equivalent to 20% of total assets. The
Board considered the capital structure at year end to be satisfactory
in relation to the Company’s objectives, strategy and risk profile.
Dividend policy
The Company has not paid dividends on its shares during the
period from its incorporation and up to the date of this report. The
Company’s priority is to return excess free cash to its shareholders
whenever possible, as determined by the Board. Any dividends
declared in the future will be at the sole discretion of the Board
and will depend upon earnings, market prospects, current capital
expenditure programs and investment opportunities.
Since the Company is a holding company with no material assets
other than the shares of the Company’s subsidiaries through
which the Company conducts its operations, the Company’s
ability to pay dividends will depend on its subsidiaries distributing
their earnings and cash flow to the Company. Furthermore,
certain covenants in the Company’s New Credit Agreement and
senior unsecured bonds restrict the payment of dividends unless
certain covenant tests are met.
Under the Company’s Bye-laws, the Board may declare dividends
and distributions without the approval of a general meeting of
shareholders. This is in line with Bermuda corporate practices but
deviates from the Corporate Governance
Code and Norwegian corporate practices whereby dividends and
distributions require the approval of a general meeting of share-
holders.
Under Bermuda law, a company may not declare or pay a divi-
dend or distribution if there are reasonable grounds for believing
that: (a) it is, or would after the payment be, unable to pay its
liabilities as they become due; or (b) the realisable value of its
assets would as a result of the dividend or distribution be less than
its liabilities.
Share capital increases and issuance of shares
The Board is authorised by the Company’s Bye-laws to issue
shares in the Company up to the number of shares representing
the Company’s authorised share capital. The Board is also author-
ised to cause the Company to purchase its own shares and hold
these in treasury.
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The authorisations to issue shares and acquire the Company’s
own shares are not restricted to any specific purposes or to a
specific period as the Corporate Governance Code recommends.
4. Equal treatment of shareholders
The Company has one class of shares. Each share in the Company
carries one vote, and all shares carry equal rights, including the
right to participate in general meetings. All shareholders shall be
treated on an equal basis, unless there is just cause for treating
them differently in the best common interest of the Company
and its shareholders.
Pre-emption rights to subscribe
Under the Bermuda Companies Act, no shareholder has a pre-
emptive right to subscribe for new shares in a limited company
unless (and only to the extent that) such right is expressly granted
to the shareholder under the Bye-laws of such company or under
a contract between the shareholder and such company. The
Company’s Bye-laws do not provide for pre-emptive rights.
Trading in treasury shares
In the event of a future share buy-back programme, the Board
of Directors will aim to ensure that all transactions pursuant to
such programme will be carried out either through the trading
system on the Oslo Stock Exchange or at prevailing prices on the
Oslo Stock Exchange and in accordance with the Market Abuse
Regulation (“MAR”). In the event of such programme, the Board
will take the Company’s and shareholders’ interests into consid-
eration and aim to maintain transparency and equal treatment
of all shareholders. If there is limited liquidity in the Company’s
shares, the Company shall consider other ways to ensure equal
treatment of all shareholders.
The Board may consider establishing internal rules governing
the Company’s trading in treasury shares and other financial
instruments.
Transactions with close associates
The Board aims to ensure that any material future transactions
between the Company and shareholders, a shareholder’s parent
company, Board members, executive personnel or close associ-
ates of any such parties are entered into on arm’s length terms.
The Bye-Laws do not prohibit a Board member from being a
party to, or otherwise having an interest in, any transaction or
arrangement with the Company or in which the Company is
otherwise interested. The Bye-Laws provide that a Board member
who has an interest in any transaction or arrangement with
the Company and who has complied with the provisions of the
Bermuda Companies Act and with the Bye-Laws with regard
to disclosure of such interest shall, subject to limited exceptions
under the Bye-Laws, be entitled to vote in respect of any transac-
tion or arrangement in which he or she is so interested and taken
into account in determining whether a quorum is present.
In contrast to Norwegian legislation, the Bermuda Companies
Act does not contain special case management requirements
concerning how specifically defined agreements between public
companies and close associates are to be handled. The Board will
consider and determine, on a case-by-case basis, whether any
independent third-party evaluations are required when entering
into agreements with close associates (but is not required by
Bermuda law to do so).
5. Freely negotiable shares
The shares of the Company are freely transferable. The Board
has certain discretion to decline to register a transfer of shares
pursuant to the Company’s Bye-laws, including to (i) decline to
register a transfer of any share which is not a fully-paid share (the
Company does not, however, expect to issue any shares which are
not fully paid) and (ii) where the holder of the shares concerned
has defaulted on an obligation to disclose the information
required by the Company’s Bye-laws in respect of the holder’s
interest in those shares
6. General meetings
The Board shall ensure that as many of the Company’s share-
holders as possible are able to exercise their voting rights at the
Company’s general meetings of shareholders, and that each
general meeting is an effective forum for shareholders and the
Board. Special general meetings (SGMs) can be called by the
Board if deemed necessary or upon the requisition of share-
holders representing at least ten per cent (10%) of the Company’s
share capital. In addition, pursuant to the Bye-Laws, for such time
as a shareholder of the Company beneficially owns at least twenty
per cent (20%) of the issued shares in the Company, SGMs shall
also be called by the Board or the Chairperson of the Board on the
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written request of such shareholder delivered to the Company’s
registered office.
Notification
To form a view on all matters to be considered at the meeting, the
deadline for shareholders to submit proxy votes is set as close to
the date of the meeting as possible.
Participation and execution
Representatives of the Board will attend the Company’s general
meetings. However, the Company will not normally have the
entire Board attend general meetings, unless this is considered
necessary in light of the matters to be dealt with. This is not a
requirement by Bermuda law but represents a deviation from
the Corporate Governance Code which states that arrangements
shall be made to ensure participation by all directors. The Board
and the chair of the general meeting will ensure that the share-
holders are able to vote separately on each candidate nominated
for election to the Board.
The general meeting is chaired by the chairperson of the Board or
a person appointed by the chairperson. This simplifies the prepa-
rations for the general meetings. In the Company’s experience, its
procedures for the chairmanship and execution of general meet-
ings have proven satisfactory. However, this represents a deviation
from the Corporate Governance Code which states that the Board
should seek to ensure that an independent chair is appointed, if
considered necessary based on the agenda items or other rele-
vant circumstances.
The right to participate and vote at the general meeting may only
be exercised by shareholders whose shareholdings are entered
in the register of shareholders, including the Norwegian Central
Securities Depository (the “VPS”), on the record date set for the
meeting by the Board, as stipulated by the Company’s Bye-laws
in accordance with statutory law. Instead of participating at the
general meeting, shareholders may vote in advance by a proxy,
with or without voting instructions.
7. Board of directors: composition
and independence
Pursuant to the Company’s Bye-laws, the Board shall consist of
between five and seven members. On 31 December 2023, the Board
consisted of seven members (see overview in the Board of Directors’
report). The chairperson of the Board is elected by the Board.
The Board’s composition ensures that it can attend to the common
interests of all shareholders in the Company and meet the Company’s
need for expertise, capacity and diversity. Attention is paid to ensure
that the Board can function effectively as a collegiate body.
The composition of the Board ensures that it can operate inde
-
pendently of any particular interests. The composition of the Board
is in compliance with the independence requirements of the
Corporate Governance Code, meaning that the majority of the
shareholder-elected members of the Board are independent of the
Company’s executive management and material business contacts.
The Board will, in accordance with normal procedures for Bermuda
companies, elect its chairperson. This differs from the recommenda
-
tion in the Corporate Governance Code that the general meeting of
shareholders shall elect the chairperson of the Board.
Each member of the Board of Directors will hold office until the
next annual general meeting following his or her election or until
his or her earlier removal or resignation.
The Company’s annual report and the website provide information
to illustrate the expertise of the members of the Board. The Board
considers its composition to be diverse and to represent required
competencies including financial and industrial experience. Board
members are encouraged to own shares in the Company.
8. The work of the Board of Directors
The Board is responsible for the overall management of the
Company and may exercise all of the powers of the Company not
reserved for the Company’s shareholders by the Bye-laws and
Bermuda law.
The Board shall evaluate its performance and expertise annually.
This evaluation shall include the composition of the Board and
the manner in which its members function, both individually and
as a group, in relation to the objectives set out for its work. The
report shall be made available to the Nomination and Corporate
Governance Committee.
A director who has a personal interest in any contract with the
Company must declare his interest at the first opportunity.
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The Board may establish ad hoc board committees as it deter-
mines necessary, and has the following permanent Board
committees:
• Audit Committee
• Remuneration Committee
• Nomination and Corporate Governance Committee
• Technical Committee
Each committee has its own written terms of reference. The terms of
reference set forth the purposes and responsibilities of the commit-
tees, consistent with the provisions of the Company’s Bye-Laws,
applicable law, and listing standards and “best practices”. The chair
of each committee, in consultation with the appropriate members
of the committee, will develop the committee’s agenda.
Committee members will be appointed by the Board upon
recommendation of the Nomination and Corporate Governance
Committee. Each committee will be composed of no fewer than the
number of members set forth in their respective terms of reference.
In addition, each committee member must satisfy the membership
requirements set forth in the relevant committee terms of reference.
A member of the Board may serve on more than one committee.
8.1 The Audit Committee
The Board has established an Audit Committee comprised of two
members of the Board. The members of the Audit Committee are
appointed by and among the members of the Board. At least one
of the members shall be independent of the Company’s business,
of which at least one member shall have qualifications within
accounting or auditing.
The primary purpose of the Audit Committee shall be to assist
the Board in the preparation of decisions on issues regarding risk
management, internal control, financial reporting and auditing.
The duties of the Audit Committee include, but are not limited to,
oversight of:
• reviewing and discussing with Management and the auditors
prior to public dissemination the Company’s audited financial
statements and quarterly financial statements, including
matters required to be discussed by the applicable auditing
standards from time to time;
• approving the audit and non-audit services to be performed by
the independent auditors;
• in consultation with the auditors, Management and internal
finance team, monitoring the integrity of the Company’s finan-
cial reporting processes;
• overseeing the performance of the Company’s internal finance
and audit function;
• reviewing and discussing with the Company’s general counsel
any legal matters that could have a significant impact on the
Company financial statements; and
• reviewing and discussing with Management and the auditors
the Company guidelines and policies with respect to risk
assessment and risk management.
On 31 December 2023, the Audit Committee consisted of Rune
Olav Pedersen and Denis Chatelan.
8.2 The Remuneration Committee
The Board has established a Remuneration Committee
comprised of two members of the Board.
The purpose of the Remuneration Committee is, inter alia, to
evaluate and propose the compensation of the Company’s CEO
and other members of the Management and the members of the
Board.
The members of the Remuneration Committee shall be
appointed by and among the members of the Board, and shall be
independent of the Management.
On 4 February 2024, Martin Bachmann and José Alcides
Santoro Martins were elected as members of the Remuneration
Committee.
8.3 The Nomination and Corporate
Governance Committee
The Board has established a Nomination and Corporate
Governance Committee comprised of three members of the
Board.
The Nomination and Corporate Governance Committee is respon-
sible for assisting the Board in (i) identifying individuals qualified
to become members of the Board, consistent with criteria
approved by the Board, (ii) recommending to the Board nomi-
nees to stand for election as directors at the next annual general
meeting, (iii) developing and recommending to the Board a set
of corporate governance principles applicable to the Company
and assisting the Board in complying with them, (iv) overseeing
the evaluation of the Board and Management, (v) recommending
members of the Board of Directors to serve on other committees
of the Board and evaluating the functions and performance of
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such committees, (vi) overseeing and approving the Management
continuity planning process and (vii) otherwise taking a leader-
ship role in shaping the corporate governance of the Company.
The Nomination and Corporate Governance Committee is
established by and reports to the Board. This deviates from
the Corporate Governance Code which recommends that a
nomination committee shall be established by and report its
recommendations to the general meeting of shareholders.
Pursuant to the Corporate Governance Code, a nomination
committee should not include any executive personnel or any
member of the Company’s Board. The Company only partly
complies with this recommendation as members of the Board
comprise the members of the Nomination and Corporate
Governance Committee.
On 4 February 2024 Erik Tiller, Robert Lawson and Pedro
Magalhães were elected as members of the Nomination and
Corporate Governance Committee.
8.4. Technical Committee
The Board established a Technical Committee on 4 February
2024, consisting of Martin Bachmann, Denis Chatelan and José
Alcides Santoro Martins. The terms of reference for the Technical
Committee are not yet formally approved by the Board.
9. Risk management and internal control
Risk management and internal control are given high priority by
the Board, ensuring that adequate systems for risk management
and internal control are in place. The control system consists of
interdependent areas which include risk management, control
environment, control activities, information and communication
and monitoring.
The Management is responsible for establishing and maintaining
sufficient internal controls over financial reporting. Company
specific policies, standards and accounting principles have been
developed for the annual and quarterly financial reporting of the
Group. The CEO and the CFO supervise and oversee the external
reporting and the internal reporting processes. This includes
assessing financial reporting risks and internal controls over finan-
cial reporting of the Group. The Company’s consolidated financial
statements are prepared in accordance with International
Financial Reporting Standards (IFRS) and International
Accounting Standards.
The Board shall ensure that the Company has sound internal
controls and systems for risk management, including compliance
with the Company’s corporate values, ethical guidelines and
guidelines for corporate social responsibility.
The Board shall undertake a complete annual review of risks related
to the Group’s business, to be carried out together with the review
of the annual financial statements. The Audit Committee shall assist
the Board on an ongoing basis in monitoring the Company’s system
for risk management and internal control. In connection with the
quarterly financial statements, the Audit Committee shall present
to the Board reviews and information regarding the Company’s
current business performance and risks.
10. Remuneration of the Board of Directors
The remuneration of the Board is determined by the Board
based on recommendations by the Remuneration Committee in
accordance with the policies and principles set forth in its terms of
reference and the terms of such plans as may be adopted by the
Board from time to time. The Corporate Governance Code recom
-
mends that the remuneration of the Board is determined by the
general meeting of shareholders based on the recommendations of
a nomination committee. As such, the determination of remunera
-
tion by the Board deviates from the Corporate Governance Code.
Board members may also be paid all travel, hotel and other
expenses properly incurred by them in connection with the
Company’s business or the discharge of their duties as directors.
The remuneration of the Board shall reflect the Board’s respon-
sibility, expertise, time commitment and the complexity of the
Company’s activities. Performance-related remuneration of the
executive management shall be linked to value creation for share
-
holders or to the Company’s profit over time. Such arrangements
are meant to incentivise performance and shall be based on quan
-
tifiable factors the employee may influence, and then be rewarded
accordingly. There should be a cap on performance-related
remuneration. Pursuant to the Corporate Governance Code, board
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members should not participate in any incentive or share option
programmes. The Company’s Board members will participate in
the Company’s share option plan as the Company considers such
participation beneficial to attract and retain competent board
members and is in line with Bermuda corporate practices.
With reference to regulations of the Norwegian Accounting Act,
the Corporate Governance Code recommends that the annual
report provides details of all elements of the remuneration and
benefits for each board member. The Company is not required
under Bermuda law to disclose the remuneration of the Board on
an individual basis and does not, at present, consider it necessary
to provide such information in the annual report.
Further, the Corporate Governance Code recommends that
members of the Board should not take on specific assignments
for the Company in addition to their appointment as members of
the Board. The Company will not refrain from engaging members
of the Board for specific assignments for the Company if such
engagement is considered beneficial for the Company. This differs
from the recommendation in the Corporate Governance Code.
However, such assignments will be disclosed to the Board and the
Board shall approve the assignment, as well as the remuneration.
11. Remuneration of the executive personnel
The Board shall, with the assistance from the Company’s
Remuneration Committee, prepare a clear policy for the determi-
nation of salary and other remuneration of executive personnel.
The policy shall contribute to the Company’s commercial strategy,
long-term interests and financial viability.
The Remuneration Committee shall oversee the Company’s
arrangements in respect of salary and other remuneration to
help ensure the alignment of interests of the Management and
shareholders.
Any performance-related remuneration shall be subject to an
absolute limit.
The Corporate Governance Code recommends that the Company
prepares a report on remuneration to executive management
on an annual basis, in accordance with the Norwegian Public
Limited Liability Companies Act section 6-16 b. The Company is
not required under Bermuda law to prepare a report on remuner-
ation to executive management. At present, the Company does
not consider it necessary to prepare a report on remuneration to
executive management but will assess whether to prepare such
report going forward.
12. Information and communications
The Board has adopted Instructions for the Contact Person with
the Oslo Stock Exchange and an Investor Relations Policy, which
set forth the Company’s disclosure obligations and procedures.
The Board will seek to ensure that market participants receive
correct, clear, relevant and up-to-date information in a timely
manner, taking into account the requirement for equal treatment
of all participants in the securities market.
The Company shall have procedures for establishing discussions
with its main shareholders to enable the Board to develop a
balanced understanding of the circumstances and focus of such
shareholders. Such discussions shall be undertaken in compliance
with the provisions of applicable laws and regulations All informa
-
tion distributed to the Company’s shareholders will be published on
the Company’s website at the same time as it is sent to shareholders.
13. Takeovers
In the event the Company becomes the subject of a takeover bid,
the Board shall seek to ensure that the Company’s shareholders are
treated equally, and that the Company’s business is not unneces-
sarily interrupted. The Board shall also ensure that the shareholders
have sufficient information and time to assess any such offer.
Bermuda law does not provide for a takeover code governing acqui-
sition of Bermuda-registered listed companies.
The Company’s Bye-laws contain the following defensive measures
that are intended to hinder a hostile acquisition of shares in the
Company:
• The creation of new shares from undesignated share rights
that would enable the Company to issue such new shares with
enhanced voting or economic shares, by Board action only, in the
case of a hostile approach
• Giving the Company the right to demand information from regis-
tered shareholders as to the beneficial interests in shares and to
suspend share rights in the case of failure to disclose interests
• The shareholder approval required to approve a merger/ amal-
gamation is increased from simple majority to 75%, if the merger/
amalgamation is not approved by the Board
• The shareholder approval required to approve a migration of the
company out of Bermuda, if not approved by the Board is increased
from a simple majority to 75%
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
4242 GovernanceGovernance | Corporate GovernanceGovernance | Corporate Governance
• Cumulative voting applies to the election of Board members to
create an increased power for minority shareholders to secure
representation on the Board
• Procedural requirements to the appointment of a director
proposed by a shareholder, and not the Board
• Directors can only be removed by shareholders by a 75% majority
vote
• The threshold shareholder vote for an amendment of the Bye-laws
is increased from a simple majority to 75% shareholder approval.
However, the Board has not established written guiding principles
for how it will act in the event of a takeover bid, as such situations
are normally characterised by concrete and one-off situations
which make a guideline challenging to prepare.
In the event a takeover offer were to be made, the Board will
consider the relevant recommendations in the Corporate
Governance Code and whether the concrete situation entails that
the recommendations in the Corporate Governance Code can be
complied with.
14. Auditor
The Board will require the Company’s auditor to annually
present to the Audit Committee a review of the Company’s
internal control procedures (including weaknesses identified
by the auditor and proposals for improvement) and submit
the main features of the plan for the audit of the Company. On
31 December 2023, the external auditor of the Company was
KPMG Auditores Independentes Ltda.
Furthermore, the Board will require the Company’s auditor to
participate in meetings of the Board that deal with the annual
financial statements, in which the auditor shall report on (i) any
material changes in the Company’s accounting principles and
key aspects of the audit, (ii) any material estimated accounting
figures and (iii) all material matters which have been subject to a
disagreement between the auditor and the Management, if any.
The Audit Committee shall review and monitor the independence
of the Company’s auditor, including in particular the extent to
which services other than auditing provided by the auditor or the
audit firm represents a threat to the independence of the auditor.
The remuneration of the auditor for statutory audit will be set
by the Board subject to authorisation by the annual general
meeting.
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
4343 GovernanceGovernance | Corporate GovernanceGovernance | Corporate Governance
Reporting on
payments to
governments
This report is prepared in accordance with the Norwegian
Accounting Act Section § 3-3 d and the Securities Trading Act §
5-5a which stipulates that companies engaged in activities within
the extractive industries shall annually prepare and publish a
report containing information about their payments to govern-
ments at country and project level. The Ministry of Finance has
issued a regulation (F20.12.2013 no. 1682) stipulating that the
reporting obligation only applies to reporting entities above a
certain size and to payments above certain threshold amounts.
In addition, the regulation stipulates that the report shall include
other information than payments to governments, as included in
section 6 of this report, and it provides more detailed rules appli-
cable to definitions, publication and group reporting.
The reportable payments are defined in the regulation
(F20.12.2013 nr 1682) §3. The management of Seacrest Petroleo
has applied judgment in the interpretation of the regulation
regarding the type of payments to be included in the reporting
and on what level it should be reported. When payments are
required to be reported on a project-by-project basis, it is reported
by license or cluster basis. All activities in Seacrest Petroleo within
the extractive industries are located in Brazil and all the reported
payments below have been made to the Brazilian government.
1. Federal tax in Brazil
The PIS (Program of Social Integration) and COFINS (Contribution
for the Financing of Social Security) are federal taxes based on
the gross revenues of companies in Brazil. The PIS is intended
to finance the unemployment insurance system, and COFINS to
fund Social Security. During 2023, Seacrest Petroleo paid USD 190
000 in PIS and zero in COFINS.
2. Royalties in Brazil
Royalties are payable on production revenue at variable rates
depending on the location of production in Brazil. During 2023,
Seacrest Petroleo paid USD 12 804 000 in royalties on the produc-
tion from the Cricaré Cluster and the Norte Capixaba Cluster in
the state of Espírito Santo.
3. Income tax
Seacrest Petroleo is liable for income taxes on its operations in
Brazil. During 2023, the Company did not pay any income tax
in Brazil as the Company generated a net loss for the period. As
of 31 December 2023, Seacrest Petroleo had recognised USD 45
320 000 in deferred tax assets in its balance sheet and will utilise a
tax loss carry forward to offset future tax costs in Brazil.
Under current Bermuda law, Seacrest Petroleo is not required to
pay tax in Bermuda on either income or capital gains.
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
4444 GovernanceGovernance | Reporting on payments to governmentsGovernance | Reporting on payments to governments
Consolidated financial statements
46
Parent company financial statements
85
Statement of Reserves
99
Responsibility statement
100
Alternative Performance Measures
101
Independent Auditor’s report
103
Financial
statements
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
4545 FinancialsFinancials Financials
Consolidated financial statements
Consolidated statements of financial position
47
Consolidated statement of profit and loss
49
Consolidated statement of changes in equity
50
Consolidated statement of cash flows
52
Notes to the consolidated financial statements
53
Note 1 Operations
53
Note 2 Basis of preparation
54
Note 3 Significant accounting policies
55
Note 4 Cash and cash equivalents
60
Note 5 Securities
60
Note 6 Advances for the acquisition of oil and gas assets
61
Note 7 Related party transactions
61
Note 8 Recoverable taxes
64
Note 9 Inventory
64
Note 10 Property, plant & equipment
65
Note 11 Intangible assets
68
Note 12 Taxes payable
70
Note 13 Employee benefits and compensation payable
70
Note 14 Leases payable
71
Note 15 Financial loans
72
Note 16 Contingent consideration
73
Note 17 Equity
74
Note 18 Revenue from oil sales
76
Note 19 Production costs
76
Note 20 Selling, general and administrative expenses
76
Note 21 Depreciation and amortisation
77
Note 22 Net financial results
77
Note 23 Income tax and social contribution
78
Note 24 Operating Segments
79
Note 25 Financial instruments and risk management
80
Note 26 Subsequent Events
84
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
4646 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Consolidated statements of financial position
USD '000 Note 31 Dec 2023 | 31 Dec 2022 | ||
| Assets | |||
| Current assets | |||
Cash and cash equivalents | 4 | ||
Securities | 5 | ||
Advances, prepaid expenses and others | |||
Accounts receivable with related parties | 7.1 | ||
Derivative assets | 24 | ||
Derivative assets - related parties | 7.6 | ||
Recoverable taxes | 8 | ||
Inventory | 9 | ||
Total current assets | |||
| Non-current assets | |||
Accounts receivable with related parties | 7.2 | ||
Recoverable taxes | 8 | ||
Derivative assets - related parties | 7.6 | ||
Advances for the acquisition of oil and gas assets | 6 | ||
Deferred tax asset | 23 | ||
Property, plant & equipment | 10 | ||
Intangible assets | 11 | ||
Total non-current assets | |||
Total assets |
USD '000 Note 31 Dec 2023 | 31 Dec 2022 | ||
| Liabilities | |||
| Current liabilities | |||
Taxes payable | 12 | ||
Supplier and other accounts payable | |||
Accounts payable to related parties | 7.4 | ||
Lease payable | 14 | ||
Employee benefits and compensation payable | 13 | ||
Financial loans | 15 | ||
Derivative financial instruments with related parties | 7.7 | ||
Derivative financial instruments | 25 | ||
Total current liabilities | |||
| Non-current liabilities | |||
Accounts payable to related parties | 7.3 | ||
Financial loans with related parties | 7.5 | ||
Financial loans | 15 | ||
Lease payable | 14 | ||
Provision for decommissioning costs | 10 | ||
Contingent consideration | 16 | ||
Derivative financial instruments with related parties | 7.7 | ||
Derivative financial instruments | 25 | ||
Total non-current liabilities | |||
Total liabilities |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
4747 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
USD '000 Note 31 Dec 2023 | 31 Dec 2022 | ||
| Equity | |||
Share capital | 17.1 | ||
Share premium | 17.1 | ||
Other reserves | 17.3 | ||
Currency translation adjustments | |||
Accumulated losses | ( | ( | |
Total equity | ( | ||
Total equity and liabilities |
The notes are an integral part of these financial statements
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
4848 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Consolidated statement of profit and loss
Including comprehensive income
USD '000 Note 2023 | 2022 | |||
| Operating revenue | ||||
Revenue from oil sales | 18 | |||
Other revenue | ||||
Total operating income | ||||
Production costs | 19 | ( | ( | |
Depreciation and amortisation | 21 | ( | ( | |
Impairment loss and reversals | ||||
General and administrative expenses | 20 | ( | ( | |
Total operating expenses | ( | ( | ||
Operating profit / (loss) | ( | ( | ||
Financial income | 22 | |||
Financial expenses | 22 | ( | ( | |
Profit / (loss) before taxes | ( | ( | ||
Tax (expense) / income | 23 | |||
Net profit / (loss) for the period | ( | ( | ||
| Other comprehensive income | ||||
| Items that may be reclassified subsquently to the income statement: | ||||
Currency translation differences | ||||
Other comprehensive income / (loss) for the period, net of tax | ||||
Total comprehensive income / (loss) | ( | ( | ||
Earnings / (loss) | per share (USD) | |||
Basic | ( | ( | ||
Diluted | ( | ( |
The notes are an integral part of these financial statements
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
4949 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Consolidated statement of changes in equity
| Currency | ||||||
USD '000 Share capital | Share premium | translation reserve | Other reserves | Accumulated losses | Total equity | |
Balance at December 31, 2022 | ( | ( | ||||
| Comprehensive income | ||||||
Loss for the period | ( | ( | ||||
Other comprehensive income | - | - | - | - | - | - |
Currency translation adjustment | ||||||
Total comprehensive income for the year | ( | ( | ||||
Capital increase | ||||||
Share-based payment | ( | ( | ||||
Others | ||||||
Total transactions with owners of Group, recognized directly in equity | ( | |||||
Balance at December 31, 2023 | ( |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5050 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
| Currency | ||||||
USD '000 Share capital | Share premium | translation reserve | Other reserves | Accumulated losses | Total equity | |
Balance at 31 December 2021 | ( | |||||
| Comprehensive income | ||||||
Loss for the period | ( | ( | ||||
Other comprehensive income | – | – | – | – | – | – |
Currency translation adjustment | ||||||
Total comprehensive income for the year | ( | ( | ||||
Capital increase | ||||||
Share-based payment | ||||||
Others | ||||||
Total transactions with owners of Group, recognized directly in equity | ||||||
Balance at 31 December 2022 | ( | ( |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5151 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Consolidated statement of cash flows
USD '000 Notes 2023 | 2022 | ||
| Cash flows from operating activities | |||
Net loss for the period | ( | ( | |
| Adjustments to reconcile net to net cash flows: | |||
Depreciation and amortization | 21 | ||
Shared-based payment | ( | ||
Contingent liability adjustment | 16 | ||
Asset retirement obligation adjustment | |||
Hedging costs (unrealised) | ( | ||
Interest on leasing | 14 | ||
Interest on financial loan | 15 | ||
Loan fees amortisation | 15 | ||
Interest on bank deposits | 22 | ( | ( |
Deferred taxes | 23 | ( | ( |
| Working capital adjustments: | |||
Changes in inventories, accounts payable and receiveables | ( | ||
Changes in other current balance sheet items | ( | ||
| Other items: | |||
Interest paid | 22 | ( | ( |
Income tax received / (paid) | 8, 23 | ( | ( |
Employee benefits and compensation payable | 13 | ||
Options converted to equity | 17.3 | ||
Net cash used in operating activities | ( | ( |
USD '000 Notes 2023 | 2022 | ||
| Cash flows from investing activities | |||
Advances for the acquisition of oil and gas assets | ( | ||
Property, plant & equipment acquisition | ( | ( | |
Intangible acquisition | 10 | ( | |
Net cash used in investing activities | 11 | ( | ( |
| Cash flow from financing activity | |||
Capital increase | 17.1 | ||
Capital raise costs | 17.1 | ( | |
Financial loan – received | 15 | ||
Financial loan – repaid | 15 | ( | |
Lease payments | 15 | ( | ( |
Dividends paid | 14 | ||
Net cash from financing activities | |||
Increase / (decrease) in cash and cash equivalent | ( | ||
Cash and cash equivalents at beginning of the year | |||
Effect of movements in exchange rates on cash held | ( | ||
Cash and cash equivalents at end of the period |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5252 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Notes to the consolidated financial statements
Note 1 Operations
the “Group”) is an oil and gas explorations group. The Group’s parent
company was incorporated on 5 June 2019 and domiciled in Bermuda
The address of its registered office is Victoria Place, 31 Victoria Street,
On 27 August 2020, Seacrest SPE Cricaré S.A., formerly known as Karavan
Seacrest SPE (“SPE Cricaré”), a subsidiary of the Group, and Petróleo
Brasileiro S.A. (“Petrobras”) entered into an agreement under which
Petrobras sold its total interest in 27 oil exploration and production conces
-
sions (the “Cricaré Cluster”) to SPE Cricaré. On December 29, 2021, the last
required regulatory approval was obtained, and SPE Cricaré completed
the acquisition of the Cricaré Cluster. The Group began its operation of the
Cricaré Cluster in January 2022.
On 9 December 2021, the Group acquired a 100% interest in Seacrest
Petróleo SPE Norte Capixaba Ltda. (“SPE Norte Capixaba”) from the
individuals Leonardo Luis do Carmo and Cristina da Silva Camargo.
SPE Norte Capixaba was an off-the-shelf Brazilian company and it has
a fully subscribed and paid-up capital of USD 18.00, represented by one
hundred (100) shares, with a nominal value of USD 0.18 each.
On 30 December 2021, Seacrest Petróleo S.A. (formerly known as Seacrest
Exploração e Produção de Petróleo Ltda.), a subsidiary of the Group,
pursuant to a shareholders agreement dated April 17, 2020, exercised a call
option, for USD 1,000, over 50.1% (49.9% at December 31, 2020) of the shares
held by Karavan Oil e Gás Participações e Consultoria Ltda in SPE Cricaré,
and the name of SPE Cricaré was changed to Seacrest SPE Cricaré S.A.
On 23 February 2022, SPE Norte Capixaba entered into a purchase
agreement with Petrobras to acquire four onshore oil concessions with
integrated facilities, located in the state of Espírito Santo, collectively
referred to as the Norte Capixaba Cluster. The transaction was finalized
in April 2023 for a total consideration of USD 528.5 million.
The Norte Capixaba Cluster is made up of four onshore fields: Cancã,
Fazenda Alegre, Fazenda São Rafael and Fazenda Santa Luzia, The
Terminal Norte Capixaba and all production facilities contained in the
ring fence of the four concessions also form the Norte Capixaba Cluster,
as well as the ownership of some plots of land.
In February 2023, the Company raised approximately NOK 2,662 million
(equivalent to USD 260 million) in gross proceeds through the allocation
of 443,666,666 new shares in an initial public offering. The Offer Shares
were priced at NOK 6 per Offer Share.
In December 2023, the Company raised approximately NOK 280 million
(equivalent to USD 25.6 million) in gross proceeds through the allocation
of 31,111,111 new shares in private placement.
The Company currently trades on the Oslo Børs exchange in Norway
(Ticker: SEAPT).
-
mulated losses of USD 219 796 520 (USD 140 458 301 in December 2022),
operating cash flow of negative USD 10 470 053 (negative USD 38 331 742
in 2022), in addition to loss for the year of USD 79 338 219 (USD 119 171 582
in 2022). Management knows that this is expected for oil exploration and
production companies with recently acquired assets, considering the
high investments and expenses incurred in the pre-operational phase.
The Company just recently started operations and expects improve
-
ment in financial indicators as the operation is optimized, with material
gains expected in 2024. The Company has an aggressive investment
plan to increase production via new wells and capital improvements
to existing wells. Oil production is expective to increase significantly in
2024. It is important to emphasize that the Company has significant
reserves and contracts signed for the sale of oil produced in the fields
guaranteeing incoming cash flows for the oil it produces. The Company
engages an independent third party, Degolyer and MacNaughton, to
analyze reserves. In their latest reserves report, PDP (proved, developed,
producing) production for 2024 is estimated at 1,917,000 bbls, resulting
in a net present value of $78,559,800. This is a conservative view, given
Management’s targets are well in excess of PDP, but as a base, this
supports strong profitability in the preceding 12 months. Through opera
-
tions in 2024, alongside current cash reserves, management will honour
their term obligations.
Management has not identified any relevant uncertainty about the
Company’s ability to continue its activities over the next 12 months.
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5353 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Note 2 Basis of preparation
Country | 31 Dec 2023 | 31 Dec 2022 | |
Seacrest Petroleo Cricaré Bermuda Ltd. | Bermuda | 100% | 100% |
| Seacrest Petroleo Norway AS | Norway | 100% | n.a. |
| Seacrest Petroleo UK Limited | UK | 100% | n.a. |
SeaPet Offshore Limited | Bermuda | 100% | 100% |
Seacrest Uruguay S.A. | Uruguay | 100% | 100% |
Seacrest Petróleo S.A. | Brazil | 100% | 100% |
Seacrest SPE Cricaré S.A. | Brazil | 100% | 100% |
Seacrest Petróleo SPE Norte Capixaba Ltda. | Brazil | 100% | 100% |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5454 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Note 3 Significant accounting policies
The accounting policies set out below have been applied consistently to
all periods presented in these consolidated annual financial statements.
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5555 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5656 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5757 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5858 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
5959 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
USD '000 31 Dec 2023 | 31 Dec 2022 | |
Bank – current account | 50 366 | 7 683 |
| Bank Deposit Certificates – CDBs | 92 | 62 |
Cash and cash equivalents at end of the period | 50 458 | 7 745 |
Note 5 Securities
USD '000 | 31 Dec 2023 | 31 Dec 2022 |
Bank deposits certificates – CDBs 1 | 6 077 | 5 608 |
1
Bank deposit certificates are compensated on a rate of 100% of the Interbank Deposit Certificate (CDI) on 31 December 2023, the
same as what was in place as of 31 December 2022. This investment was pledged as a guarantee of the future decommissioning
of Cricaré Cluster, which is required by the National Agency of Oil, Natural Gas and Biofuels (“ANP”). The funds are restricted for the
Group’s use, however, they are recorded in current assets because the guarantee is expected to be replaced by another type of
guarantee, as described in the concession agreement.
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6060 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Note 6 Advances for the acquisition of oil and gas assets
USD '000 31 Dec 2023 | 31 Dec 2022 | |
Norte Capixaba cluster deposit 1 | - | 35 850 |
1
The cash deposit made with Petróleo Brasileiro S.A. (“Petrobras”) for the acquisition of the Norte Capixaba cluster, as described in
Note 1. The transaction was completed in April 2023.
Affiliated companies (USD ‘000) | 31 Dec 2023 | 31 Dec 2022 |
Azibras Exploracao de Petróleo e Gás Ltda | 18 | 17 |
Seacrest Partners III, L.P. | 6 | 6 |
Seapulse Limited | 1 | 1 |
Seacrest Group Limited | 10 | 9 |
Total | 35 | 33 |
Affiliated companies (USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Azibras Exploração de Petróleo e Gás Ltda | 320 | 297 |
Affiliated companies (USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Seacrest Capital Group Limited | 3 518 | 49 |
Azimuth Group Services Limited | 180 | 221 |
Total | 3 698 | 270 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6161 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Affiliated companies (USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Mercuria Energy Trading S.A. | 10 321 | - |
Total | 10 321 | - |
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
| Mercuria Energy Trading S.A. (“Senior facility”) | - | 34 207 |
| Mercuria Energy Trading S.A. (“Junior facility”) | - | 10 038 |
| Mercuria Asset Holdings (Hong Kong) Limited | - | 16 300 |
Closing balance | - | 60 545 |
Changes in loan (USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Opening balance | 60 545 | 44 245 |
| Senior facility principal | - | - |
| Junior facility principal | - | - |
| Senior facility interest | 1 464 | 4 874 |
| Junior facility interest | 493 | 1 697 |
| Convertible loan notes | - | 15 000 |
| Convertible loan note interest | 213 | 1 300 |
Interest paid | (2 169) | (6 571) |
Conversion to equity | (16 513) | |
Principal paid | (44 032) | - |
Closing balance | - | 60 545 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6262 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Mercuria Energy Trading S.A. 1 | 801 | - |
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Mercuria Energy Trading S.A. 1 | 640 | - |
Affiliated companies (USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Mercuria Energy Trading S.A. 1 | 10 541 | 19 925 |
Mercuria Energy Trading S.A. 2 | - | 2 100 |
Total | 10 541 | 22 025 |
Affiliated company (USD ‘000) 2023 | 2022 | |
Mercuria Energy Trading S.A. 1 | 8 727 | 20 851 |
(USD ‘000) | 31 Dec 2023 | 31 Dec 2022 |
| Salaries and other employee benefits incurred during the period ended | ||
December 31, 2023 and the year ended December 31, 2022 | 7 195 | 3 779 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6363 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
| Federal taxes | 10 775 | 1 187 |
| Other taxes | - | 382 |
State taxes | 27 | 2 |
Total | 10 802 | 1 571 |
Note 9 Inventory
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
| Packaging and storeroom materials | 15 901 | 2 847 |
| Crude oil | 16 257 | 7 330 |
Total | 32 158 | 10 177 |
1
2
1
These are warehouse materials that are being acquired to support operations.
2
Inventories comprise volumes of oil already treated and specified for sale.
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6464 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
| Cumulative | ||||||
| Balances on | Conversion | Remeasurements | Balances on | |||
| 01 Jan 2023 | Adjustment | Additions | Depreciation | and adjustments | 31 Dec 2023 | |
Land | - | - | 2 424 | 3 | - | 2 427 |
Facilities | 4 | - | - | - | - | 4 |
Furniture and fixtures | 73 | 7 | 58 | (17) | - | 121 |
Machinery and equipment | 2 635 | 232 | 7 055 | (766) | (93) | 9 063 |
Machinery and equipment - Right-of-use - IFRS 16 | 2 609 | 229 | 1 588 | (1 797) | (2 350) | 279 |
Vehicles | 16 | 2 | - | (5) | - | 13 |
Vehicles - Right-of-use - IFRS 16 | 2 466 | 218 | 5 561 | (3 008) | 1 112 | 6 349 |
Gas Compressor - Right-of-use - IFRS 16 | - | - | 2 115 | (730) | (29) | 1 356 |
Workover and drilling - Right-of-use - IFRS 16 | - | - | 3 835 | (632) | 385 | 3 588 |
Communication equipment | 16 | 1 | 48 | (9) | - | 56 |
IT equipment | 74 | 7 | 139 | (36) | - | 184 |
Tools | - | - | 44 | (1) | - | 42 |
Improvements | 182 | 17 | 477 | (119) | (1) | 555 |
Other assets in progress | 794 | 70 | 3 208 | - | (79) | 3 993 |
Advance for acquisition of property, plant and equipment | - | - | 2 | - | (3) | - |
Provision for decommissioning of assets | 15 696 | 1 387 | 5 970 | (4 253) | 1 895 | 20 696 |
| Steam generating units | 1 450 | 128 | 419 | (324) | - | 1 673 |
Terminal Norte Capixaba | - | - | 60 054 | (3 191) | - | 56 863 |
Recompletion of wells - production phase | - | - | 14 751 | (309) | (1 222) | 13 219 |
Administrative indirect costs | - | - | 1 | - | - | 1 |
Total | 26 015 | 2 299 | 107 748 | (15 195) | (385) | 120 482 |
Cost | 36 529 | 148 018 | ||||
Accumulated depreciation | (10 514) | - | - | - | - | (27 536) |
Property, plant and equipment, net | 26 015 | - | - | - | - | 120 482 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6565 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
| Cumulative | |||||||
| Balances on | Conversion | Additions and | Balances on | ||||
01 Jan 2022 | Transfer | Adjustment | adjustments | Depreciation | Write-offs | 31 Dec 2022 | |
Facilities | 4 | - | - | - | - | - | 4 |
Furniture and fixtures | - | - | - | 74 | - | - | 73 |
Machinery and equipment | 1 616 | (1 703) | 89 | 2 855 | (210) | (13) | 2 635 |
Machinery and equipment - Right-of-use - IFRS 16 | - | - | 3 | 3 945 | (1 228) | (112) | 2 609 |
Vehicles | 20 | - | 1 | - | (4) | - | 16 |
Vehicles - Right-of-use - IFRS 16 | - | - | 3 | 4 152 | (1 603) | (86) | 2 466 |
Communication equipment | - | - | - | 16 | (1) | - | 16 |
IT equipment | - | - | - | 182 | - | - | 182 |
Improvements | 49 | - | 2 | 43 | (12) | (8) | 74 |
Other assets in progress | - | - | 1 | 793 | - | - | 794 |
Advance for acquisition of property, plant and equipment | 16 | - | - | - | - | (16) | - |
Provision for decommissioning of assets | 44 164 | - | 2 403 | 2 080 | (6 977) | (25 974) | 15 696 |
| Steam generating units | - | 1 703 | 2 | - | (255) | - | 1 450 |
Total | 45 869 | - | 2 504 | 14 141 | (10 290) | (26 209) | 26 015 |
Cost | 45 873 | 34 508 | |||||
Accumulated depreciation | (4) | - | - | - | - | - | (10 514) |
Property, plant and equipment, net | 45 869 | - | - | - | - | - | 26 015 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6666 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Initial balance | 15 696 | 44 164 |
| Additions to the period of acquisition | 5 970 | - |
| Remeasurement | 3 339 | (23 894) |
Cumulative translation adjustment | 1 388 | 2 403 |
Transfer | (1 444) | - |
Depreciation | (4 253) | (6 977) |
Final balance | 20 696 | 15 696 |
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Initial balance | 27 938 | 44 164 |
Additions to the period of acquisition | 5 970 | - |
| Remeasurement | 3 339 | (23 894) |
Transfer | (1 444) | - |
Cumulative translation adjustment | 2 534 | 1 752 |
Interest adjustment | 2 647 | 5 916 |
Final balance | 40 984 | 27 938 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6767 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
| USD | |
Amount paid in cash | 28 516 |
Contingent consideration (Note 16) | 82 877 |
Cash advances paid for oil and gas asset acquisition | 11 865 |
Total | 123 258 |
| USD | |
Property, plant and equipment (Note 10) | 1 617 |
Intangible asset in relation to Cricaré concession agreement | 121 641 |
Total | 123 258 |
| USD | |
Amount paid in cash | 426 650 |
Contingent consideration (Note 16) | 55 000 |
Cash advances paid for oil and gas asset acquisition | 35 850 |
Total | 517 500 |
| USD | |
Property, plant and equipment (Note 10) | 75 067 |
Intangible asset in relation to Cricaré concession agreement | 442 433 |
Total | 517 500 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6868 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
| Cumulative | |||||
| Balances on | Conversion | Balances on | |||
1 Jan 2023 | Additions | Adjustment | Amortization | 31 Dec 2023 | |
Right to exploration | 109 126 | 442 433 | 33 520 | (46 636) | 538 444 |
Total | 109 126 | 442 433 | 33 520 | (46 636) | 538 444 |
Cost | 128 270 | 604 207 | |||
Accumulated depreciation | (19 145) | (65 763) | |||
Intangible assets, net | 109 126 | 538 444 |
| Cumulative | |||||
| Balances on | Conversion | Balances on | |||
1 Jan 2022 | Additions | Adjustment | Amortization | 31 Dec 2022 | |
Right to exploration | 121 641 | 2 | 6 628 | (19 145) | 109 126 |
Total | 121 641 | 2 | 6 628 | (19 145) | 109 126 |
Cost | 121 641 | 128 270 | |||
Accumulated depreciation | - | (19 145) | |||
Intangible assets, net | 121 641 | 109 126 |
Oil (bbls) | Gas (boe) | |
Cricaré | 16 545 420 | 2 548 920 |
Norte Capixaba | 62 047 650 | 3 793 397 |
Total | 78 593 070 | 6 342 317 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
6969 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Taxes on revenue | 1 835 | 1 |
Withholding taxes 1 | - | 709 |
Total | 1 835 | 710 |
(USD ‘000) 31 Dec 2023 | 31 Dec 2022 | |
Salaries payable | 1 619 | 373 |
Vacation time payable | - | 382 |
Taxes on payroll payable | 349 | 271 |
Final balance | 1 968 | 1 026 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7070 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
| Natural gas | Drilling | Machine and | |||
| (USD ‘000) Vehicles | compression | rigs | equipment | Total | |
As of 1 January 2023 | 2 466 | - | - | 2 608 | 5 074 |
Initial recognition of right-of-use assets | 9 029 | 2 115 | 3 835 | 1 588 | 16 567 |
Remeasurement adjustments | (595) | (68) | (219) | (26) | (909) |
Cumulative conversion adjustment | 218 | - | - | 230 | 448 |
Reclassification | - | - | 2 350 | (2 350) | - |
Depreciation expenses for the period | (4 769) | (690) | (2 340) | (1 771) | (9 570) |
31 December 2023 | 6 349 | 1 356 | 3 625 | 279 | 11 610 |
As of 1 January 2022 | 3 103 | - | - | 3 695 | 6 798 |
Initial recognition of right-of-use assets | 1 079 | - | - | 284 | 1 363 |
Remeasurement adjustments | (86) | - | - | (112) | (198) |
Cumulative conversion adjustment | - | - | - | - | - |
Reclassification | - | - | - | - | - |
Depreciation expenses for the period | (1 630) | - | - | (1 258) | (2 888) |
31 December 2022 | 2 466 | - | - | 2 608 | 5 074 |
| Natural gas | Drilling | Machine and | |||
| (USD ‘000) Vehicles | compression | rigs | equipment | Total | |
As of 1 January 2023 | 3 230 | - | - | 3 418 | 6 648 |
Initial recognition of right-of-use assets | 8 699 | 2 115 | 3 835 | 1 588 | 16 238 |
Remeasurement adjustments | (265) | (68) | (219) | (26) | (579) |
Cumulative conversion adjustment | 290 | - | - | 296 | 586 |
Transfer | - | - | 3 261 | (3 261) | - |
Payments | (3 489) | (607) | (2 431) | (1 946) | (8 473) |
Interest | 1 301 | 151 | 648 | 285 | 2 385 |
31 December 2023 | 9 767 | 1 590 | 5 094 | 353 | 16 805 |
As of 1 January 2022 | 3 230 | - | 3 418 | - | 6 648 |
Initial recognition of right-of-use assets | 3 124 | - | - | 3 721 | 6 845 |
Remeasurement adjustments | (70) | - | - | (105) | (175) |
Recognition of the contractual increase | 1 063 | - | - | 276 | 1339 |
Transfer | - | - | - | - | - |
Payments | (1 438) | - | - | (926) | (2 364) |
Interest | 551 | - | - | 452 | 1 003 |
31 December 2022 | 3 230 | - | - | 3 418 | 6 648 |
(USD ‘000) 2023 | 2022 | |
Interest on leases | 2 385 | 1 003 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7171 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Contracts by term and average discount rate (p.a.) 2023 | 2022 | |
2 years | 18.85% | 14.47% |
Note 15 Financial loans
Financial loans (non-current) 31 Dec 2023 | 31 Dec 2022 | |
| Morgan Stanley | 296 305 | - |
| OVMK Special Bond Fund ("OVMK") | - | 3 218 |
Total | 296 305 | 3 218 |
3
1
Changes in loan 2023 | 2022 | |
Opening balance | 3 218 | - |
Morgan Stanley | 300 000 | - |
Morgan Stanley interest | 27 257 | - |
Morgan Stanley fees | (9 866) | - |
Payments | (21 086) | - |
| Convertible loan notes | - | 3 000 |
| Convertible loan note interest | 43 | 218 |
| Conversion to equity | (3 261) | - |
Closing balance | 296 305 | 3 218 |
1
1
2
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7272 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Financial loans (current) 31 Dec 2023 | 31 Dec 2022 | |
| Banco Bradesco | 5 149 | - |
| Banco Itaú Unibanco S.A | 4 120 | 1 893 |
| Banco do Brasil | 10 128 | - |
Total | 19 397 | 1 893 |
Changes in loan USD’000 (current) | 2023 | 2022 |
Opening balance | 1 893 | - |
Bradesco | 5 149 | - |
Bradesco interest | - | - |
Itaú | 26 803 | 1 893 |
Itaú interest | 51 | - |
Branco do Brasil | 10 000 | - |
Banco do Brasil interest | 149 | - |
Cumulative Conversion Adjustment | 147 | - |
Payments | (24 795) | - |
Closing balance | 19 397 | 1 893 |
1
2
3
1
A BRL 25 million revolving credit facility with floating interest rate of the overnight Brasil interbank rate + 4.1509 annually
2
A BRL 20 million revolving credit facility with floating interest rate of the overnight Brasil interbank rate + 0.605 per month.
3
A USD 10 million facility maturing on 29 April 2024 with fixed interest rate of 8.93%.
Contingent consideration (USD ‘000) | 31 Dec 2023 | 31 Dec 2022 |
Cricaré Cluster acquisition | 138 961 | 115 430 |
Norte Capixaba acquisition | 51 672 | - |
Total | 190 633 | 115 430 |
Changes in the period | 2023 | 2022 |
Opening balance | 115 430 | 82 877 |
Initial recognition | 55 000 | - |
Interest component | 18 398 | 4 928 |
Present value adjustment | 1 805 | 27 626 |
Closing balance | 190 633 | 115 430 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7373 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
USD Share capital | Share premium | Total | |
| Opening January 1, 2023 | |||
(185 926 155 fully paid ordinary shares) | 2 | 76 052 | 76 054 |
| Issued during the period | |||
(499 887 820 fully paid ordinary shares) | 5 | 269 081 | 269 086 |
| Reverse share split | |||
(327 263 958 fully paid ordinary shares) | - | - | - |
| Balance at December 31, 2023 | |||
(358 550 017 fully paid ordinary shares) | 7 | 345 133 | 345 140 |
Share capital, USD Share capital | Share premium | Total | |
| Opening January 1, 2022 | |||
(114 922 237 fully paid ordinary shares) | 1 | 25 998 | 25 999 |
| Issued during the year | |||
(71 003 918 fully paid ordinary shares) | 1 | 50 054 | 50 055 |
| Balance at December 31, 2022 | |||
(185 926 155 fully paid ordinary shares) | 2 | 76 052 | 76 054 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7474 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
2023 | 2022 | |
Weighted average number of shares ('000 shares) | 313 050 | 174 614 |
Net loss for the period (USD '000) | (79 338) | (119 172) |
Net loss per weighted average share | (0.2534) | (0.6825) |
| Exercise price in $ | |||
Grant-vest | Expiry date | per share option | Share option |
2020-2023 | 7 October 2025 | USD 0.00002 | 596 250 |
2020-2024 | 31 August 2025 | USD 0.20 | 125 000 |
2023-2025 | 31 March 2025 | USD 0.20 | 175 000 |
2023-2026 | 19 January 2033 | NOK 12.00 | 2 075 000 |
2023-2027 | 31 July 2033 | NOK 10.74 | 6 465 000 |
| 9 436 250 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7575 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Note 18 Revenue from oil sales
2023 | 2022 | |
Oil sales in Brazil | 178 498 | 35 529 |
Gross revenue | 178 498 | 35 529 |
| Tax on revenue | ||
PIS | (190) | (341) |
COFINS | (877) | (1 571) |
Net revenue | 177 431 | 33 617 |
2023 | 2022 | |
Employee benefits and charges | 9 127 | 1 372 |
Field operation and stations | 10 673 | 2 844 |
Maintenance and preservation | 16 208 | 2 498 |
Oil treatment | 252 | 1 106 |
Royalties | 12 804 | 2 411 |
Storage | 15 470 | 2 584 |
Transportation | 10 651 | 991 |
Ground production rig-service | 2 572 | 871 |
Oil acquired | 20 717 | - |
Other operating costs | 14 593 | 2 070 |
Total | 113 067 | 16 746 |
2023 | 2022 | |
Employee benefit and compensation | 7 194 | 7 062 |
Travel and other sundry items | 2 274 | 1 377 |
Office rent and running costs | 483 | 137 |
Taxes and fees | 4 419 | 1 205 |
| Contractual guarantee fees | 3 595 | 3 540 |
| Services hired | 17 890 | 13 304 |
| Marketing cost | 9 420 | - |
Other operating expenses | 2 013 | 1 365 |
Total | 47 288 | 27 988 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7676 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
2023 | 2022 | |
| Amortisation of exploration rights | 48 231 | 14 352 |
| Amortisation with deactivation cost | 3 636 | 5 916 |
| Depreciation related to production | 9 910 | 2 748 |
Other depreciation | 55 | 17 |
Total | 61 832 | 23 033 |
2023 | 2022 | |
| Financial income | ||
Interest on bank deposits | 1 905 | 723 |
| Financial instrument gains | 2 620 | 4 661 |
Other financial income | 186 | 57 |
Exchange rate gains | 552 | 58 |
Total | 5 263 | 5 499 |
| Financial expenses | ||
| Present value adjustment | 6 836 | 34 545 |
| Hedging costs | - | 55 146 |
| Standby letter of credit costs (Norte Capixaba) | 4 605 | 7 201 |
Interest on financial loans (Note 15) | 29 668 | 8 089 |
Interest on contingent payment (Note 16) | 18 398 | 4 928 |
Other financial expenses | 6 206 | 206 |
Total | 65 713 | 110 115 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7777 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
2023 | 2022 | |
Provision for deferred IRPJ 1 | 33 323 | 14 304 |
Provision for deferred CSLL 2 | 11 997 | 5 149 |
Total | 45 320 | 19 453 |
| Social | ||
| 2023 Income tax | contribution | |
Deferred IR and Social Contribution on tax loss | 13 776 | 4 960 |
Total | 13 776 | 4 960 |
Temporary Differences | 19 547 | 7 037 |
Exchange rate variations in Brazil (unrealised) | (11 348) | (4 085) |
Decommissioning costs | 2 956 | 1 064 |
Present value adjustment | 23 728 | 8 542 |
Rentals | 4 174 | 1 503 |
Hedge | 36 | 13 |
Total tax credits - Income Tax and Social Contribution | 33 323 | 11 997 |
Opening | 14 304 | 5 149 |
Additions | 19 019 | 6 848 |
Closing | 33 323 | 11 997 |
| Social | ||
2022 | Income tax | contribution |
Deferred IR and Social Contribution on tax loss | 5 298 | 1 907 |
Total | 5 298 | 1 907 |
Temporary Differences | 9 006 | 3 242 |
Exchange rate variations in Brazil (unrealised) | (3 021) | (1 088) |
Decommissioning costs | 1 740 | 626 |
Present value adjustment | 9 894 | 3 562 |
Rentals | 393 | 142 |
Total tax credits - Income Tax and Social Contribution | 14 304 | 5 149 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7878 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Year | USD |
2024 | 8 745 |
2025 | 32 499 |
Note 24 Operating Segments
Operating segments are defined as components of an entity for which separate financial statements are
available and are regularly evaluated by the chief operating decision maker in order to allocate resources in
evaluating the performance of managers in a given segment. By this definition, the Group has a single operating
segment, which consists of oil and gas exploration and production (E&P).
All E&P costs within the Group are located in Brazil.
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
7979 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
2023 | Fair Value | Amortised Cost | Total |
| Assets | |||
Cash and cash equivalentes | - | 50 458 | 50 458 |
Securities | 6 077 | - | 6 077 |
Derivative financial instruments | 1 699 | - | 1 699 |
Accounts receivable with related parties | - | 35 | 35 |
Accounts receivable with related parties (non-current) | - | 320 | 320 |
| Liabilities | |||
Accounts payable to related parties | - | 14 018 | 14 018 |
Financial loans | 315 072 | - | 315 702 |
Derivative financial instruments | 27 487 | - | 27 487 |
2022 Fair Value | Amortised Cost | Total | |
| Assets | |||
Cash and cash equivalentes | – | 7 745 | 7 745 |
Securities | 5 608 | – | 5 608 |
Accounts receivable with related parties | – | 33 | 33 |
Accounts receivable with third parties | – | 909 | 909 |
Accounts receivable with related parties (non-current) | – | 296 | 296 |
| Liabilities | |||
Accounts payable to related parties | – | 270 | 270 |
Financial loans with related parties | 60 545 | – | 60 545 |
Financial loans | 5 111 | – | 5 111 |
Derivative financial instruments | 42 876 | – | 42 876 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8080 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Assets Level 1 | Level 2 | Level 3 | Total | |
USD | USD | USD | USD | |
Securities | - | 6 077 | - | 6 077 |
Derivative financial instruments | - | 1 699 | - | 1 699 |
Total Assets | - | 7 776 | - | 7 776 |
Liabilities Level 1 | Level 2 | Level 3 | Total | |
USD | USD | USD | USD | |
Derivative financial instruments | - | 27 487 | - | 27 487 |
Financial loans | - | 315 702 | - | 315 702 |
Total Liabilities | - | 343 189 | - | 343 189 |
Assets Level 1 | Level 2 | Level 3 | Total | |
USD | USD | USD | USD | |
Securities | - | 5 608 | - | 5 608 |
Liabilities Level 1 | Level 2 | Level 3 | Total | |
USD | USD | USD | USD | |
Derivative financial instruments | - | 42 876 | - | 42 876 |
Financial loans with related parties | - | 44 245 | 16 300 | 60 545 |
Financial loans | - | - | 5 111 | 5 111 |
Total Liabilities | - | 87 121 | 21 411 | 108 532 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8181 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Notional Value | Fair Value Position | Maturity | |||
(USD ’000) | 2023 | 2022 | 2023 | 2022 | Date |
| Forward Contracts | |||||
Long Position / Foreign Currency Forward (BRL/USD) 1 | - | 51 121 | - | (2 100) | 2023 |
| Swap | |||||
Commodity Price Swap 2 | 3 403 | 2 543 | (25 788) | (40 776) | 2026 |
Total Recognized in Statement of Financial Position | 3 403 | 53 664 | (25 788) | (42 876) |
(USD ’000) 2023 | 2022 | |
| Forward Contracts | ||
Long Position / Foreign Currency Forward (BRL/USD) | 2 510 | 2 561 |
| Swap | ||
Commodity Price Swap | 110 | (53 046) |
Total Recognised in Statement of Profit and Loss | 2 620 | (50 485) |
| Possible | Remote | ||
| Scenario | Scenario | ||
| <25%> | <50%> | ||
| Exchange Rate - Depreciation of the Real | |||
| NDF | Compared to USD | - | - |
Swap | Crude Oil - Price Changes | 63 431 | 126 862 |
Total | 63 431 | 126 862 |
Foreign exchange risks (BRL) (USD ’000) 31 Dec 2023 | 31 Dec 2022 | |
| Assets | ||
Cash and cash equivalents in BRL | 22 598 | 2 573 |
Securities in BRL | 6 077 | 5 608 |
Advances, prepaids and others in BRL | 4 759 | 1 773 |
Recoverable taxes in BRL | 8 529 | 1 570 |
Deferred tax asset | 41 243 | 19 124 |
| Liabilities | ||
Taxes payable in BRL | (1 812) | (710) |
Leases payable in BRL | (16 805) | (6 648) |
Employee benefits and compensation payable in BRL | (1 932) | (1 026) |
Supplier and other accounts payable in BRL | (41 301) | (3 582) |
Financial loans in BRL | (9 248) | (1 893) |
Total | 12 108 | 16 789 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8282 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Loans (USD ’000) 31 Dec 2023 | 31 Dec 2022 | |
Morgan Stanley ("Credit Agreement")1 | 296 305 | - |
| Itaú Unibanco S.A. | 4 016 | - |
| Banco Bradesco S.A. | 5 231 | - |
Mercuria Energy Trading S.A. (“Senior facility”) | - | 34 207 |
Mercuria Energy Trading S.A. (“Junior facility”) | - | 10 038 |
Mercuria Energy Group Limited (Cyprus) Limited | - | 16 300 |
OVMK Special Bond Fund (“OVMK”) | - | 3 218 |
Total | 305 552 | 63 763 |
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8383 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
| More than | ||||
Up to 1 year | 1–2 years | 2–5 years | 5 years | |
Contingent consideration | 31 000 | 56 000 | 97 000 | - |
Suppliers and other accounts payable | 41 730 | - | - | |
Accounts payable to related parties | - | 14 018 | - | - |
Financial loans | 19 397 | - | - | 296 305 |
Derivative instruments | 17 576 | 8 236 | 1 715 | - |
Total | 109 703 | 78 254 | 98 715 | 296 305 |
| 31 Dec 2022 | More than | |||
Up to 1 year | 1–2 years | 2–5 years | 5 years | |
Contingent consideration | - | 20 000 | 98 000 | - |
Suppliers and other accounts payable | 9 426 | - | ||
Accounts payable to related parties | - | 270 | - | - |
Financial loans with related parties | - | - | 16 300 | 44 245 |
Financial loans | 1 893 | - | 3 218 | - |
Derivative instruments | 22 025 | 20 098 | 753 | - |
Total | 33 344 | 40 368 | 118 271 | 44 245 |
Note 26 Subsequent Events
In January 2024, the Company paid the contingent consideration of USD 36 million under the terms of the
Cricaré and Norte Capixaba Sale and Purchase Agreements with Petrobras, and successfully closed the book
on a 3 year USD 80 million senior unsecured bond issue with a coupon of 16% p.a. The net proceeds from the
bond issue will strengthen the Company’s ability to grow production through drilling, work-overs and other field
development optimisations at the Norte Capixaba and Cricaré Clusters.
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8484 FinancialsFinancials | Consolidated financial statementsFinancials | Consolidated financial statements
Parent company financial statements
Balance sheet
86
Income statement
87
Statement of changes in equity
88
Statement of cash flows
90
Notes
91
Note 1 General Information
91
Note 2 Basis for preparation
91
Note 3 Significant accounting policies
92
Note 4 Cash and cash equivalents
93
Note 5 Investment in subsidiaries
93
Note 6 Related party transactions
94
Note 7 Financial loans (non-current)
95
Note 8 Equity
96
Note 9 General and administrative expenses
97
Note 10 Net financial results
97
Note 11 Subsequent events
98
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8585 FinancialsFinancials | Parent company financial statementsFinancials | Parent company financial statements
Balance sheet
USD '000 Note 31 Dec 2023 31 Dec 2022
Assets
Current assets
Cash and cash equivalents 4 138 3 096
Advances, prepaid expenses and others 678 331
Accounts receivable with related parties 6.1 37 32
Total current assets 853 3 459
Non-current assets
Investments in subsidiaries 5 249 081 -
Accounts receivable with related parties 6.2 66 123 70 406
Total non-current assets 315 204 70 406
Total assets 316 057 73 865
Liabilities
Current liabilities
Supplier and other accounts payable - 3 831
Accounts payable to related parties 6.3 404 233
Total current liabilities 404 4 064
Non-current liabilities
Accounts payable to related parties 6.4 3 698 -
Financial loans 7 - 3 218
Financial loans with related parties 6.4 - 16 300
Total non-current liabilities 3 698 19 518
Total liabilities 4 102 23 582
USD '000 Note 31 Dec 2023 31 Dec 2022
Equity
Share capital 8.1 7 2
Share premium 8.1 345 133 76 052
Other reserves 8.2 3 094 4 301
Currency translation adjustments 1 265 85
Accumulated losses (37 544) (30 155)
Total equity 311 955 50 285
Total equity and liabilities 316 057 73 867
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8686 FinancialsFinancials | Parent company financial statementsFinancials | Parent company financial statements
Income statement
USD '000 Note 2023 2022
Operating revenue
Revenue from oil sales - -
Other revenue - -
Total operating income - -
Production costs - -
Depreciation and amortisation - -
Impairment loss and reversals - -
General and administrative expenses 9 (8 915) (14 341)
Total operating expenses (8 915) (14 341)
Operating profit / (loss) (8 915) (14 341)
Financial income 10 1 789 1 789
Financial expenses 10 (264) (1 555)
Profit / (loss) before taxes (7 389) (14 106)
Tax (expense) / income - -
Net profit / (loss) for the period (7 389) (14 106)
Other comprehensive income
Net loss for the period (7 389) (14 106)
Other comprehensive income - -
Currency translation adjustments 1 180 96
Total comprehensive income / (loss) (6 209) (14 010)
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8787 FinancialsFinancials | Parent company financial statementsFinancials | Parent company financial statements
Statement of changes in equity
USD 1000 Share capital Share premium
Currency translation
reserve Other reserves Accumulated losses Total equity
Balance at December 31, 2022 2 76 052 85 4 301 (30 155) 50 285
Comprehensive income
Loss for the period - - - - (7 389) (7 389)
Other comprehensive income - - - - - -
Currency translation adjustment - - 1 180 - - 1 180
Total comprehensive income for the year - - 1 180 - (7 389) (6 209)
Capital increase 5 269 081 - - - 269 086
Share-based payment - - - (1 208) - (1 208)
Others - - - - - -
Total transactions with owners of Group, recognized directly in equity 5 269 081 - (1 208) - 267 878
Balance at December 31, 2023 7 345 133 1 265 3 093 (37 544) 311 954
Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
8888 FinancialsFinancials | Parent company financial statementsFinancials | Parent company financial statements
USD 1000 Share capital Share premium
Currency translation
reserve Other reserves Accumulated losses Total equity
Balance at 31 December 2021 1 25 998 (11) 3 355 (16 048) 13 294
Comprehensive income
Loss for the period - - - - (14 106) (14 106)
Other comprehensive income - - - -
Currency translation adjustment - - - - - 96
Total comprehensive income for the year - - 96 - (14 106) (14 010)
Capital increase 1 50 553 - - - 50 054
Share-based payment - - - 945 - 945
Others - - - - -
Total transactions with owners of Group, recognized directly in equity 1 50 503 - 945 - 51 000
Balance at 31 December 2022 2 76 052 85 4 301 (30 155) 50 284
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Statement of cash flows
USD '000 2023 2022
Cash flows from operating activities
Net loss for the period (7 389) (14 106)
Adjustments to net loss
Share-based payment (1 206) 945
Interest on financial loan 255 -
Changes in assets and liabilities
Advances, prepaid expenses and others (347) (331)
Accounts receivable with related parties 4 278 (54 025)
Supplier and other accounts payable (3 427) 3 560
Supplier and other accounts payable - related parties 3 465 -
Accounts payable to related parties - (4 173)
Net cash used in operating activities (4 371) (68 130)
USD '000 2023 2022
Cash flows from investing activities
Investment in subsidiary (249 081) -
Net cash used in investing activities (249 081) -
Cash flow from financing activity
Capital increase 269 086 50 054
Borrowing costs - -
Financial loan (19 773) 14 957
Net cash from financing activities 249 313 65 011
Increase / (decrease) in cash and cash equivalent (4 139) (3 119)
Cash and cash equivalents at beginning of the year 3 096 6 119
Effect of movements in exchange rates on cash held 1 180 96
Cash and cash equivalents at end of the period 138 3 096
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Notes
Note 1 General Information
Seacrest Petroleo Bermuda Limited (the ‘Company’ or the ‘Parent Company’ is a public limited liability company
incorporated and domiciled in Bermuda, with registered address at Victoria Place, 31 Victoria Street, Hamilton,
HM10, Bermuda. The principal activities of the Company is to be a holding company for its subsidiaries which are
engaged in oil and gas exploration, development, production and trade activities.
The shares of the Company are listed on Euronext Expand Oslo under the ticker ‘SEAPT’.
.
Note 2 Basis for preparation
These financial statements for the period 1 January 2023 – 31 December 2023 are prepared in accordance with
International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board
(IASB).
The financial statements are based on historical cost except as disclosed in the accounting policies.
The financial statements are presented in US Dollar (USD), which is the functional currency of the Company.
Amounts are rounded to the nearest thousand, unless otherwise stated.
The financial statements are prepared based on the assumption of going concern.
Only standards and interpretations that are applicable to the Company have been included and the Company
reviews the impact of these changes in its financial statements. There are some amendments to the standards
effective from 1 January 2022. None of these have had any effect on the Financial Statements. The Company will
adopt the relevant new and amended standards and interpretations when they become effective. At the date of
the approval of these FS, the Company has not identified significant impact to the Company FS as a result of new
standards or amendments effective 2024 or later.
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Note 3 Significant accounting policies
3.1 Administrative expenses
Administrative expenses are accounted for on an accrual basis. Expenses are charged to the income statement,
except for those incurred in the acquisition of an investment which are capitalised as part of the cost of the
investment. Expenses arising on the disposal of investments are deducted from the disposal proceeds.
3.2 Financial income and expenses and exchange variations, net
Financial income represents interest income, yields from securities, discounts, other financial income and mone-
tary and foreign exchange rate variations.
Financial costs represent bank expenses, interest, late payment charges, other financial costs and monetary and
foreign exchange rate variations.
Financial income and expenses are recognized on an accrual basis when ascertained or incurred by the Group.
3.3 Foreign currency transactions
Transactions in foreign currencies are recorded in the functional currency rate at the date of the transaction.
Monetary assets and liabilities in foreign currency are translated at the functional currency rate prevailing at
the balance sheet date. Exchange differences arising from translations into functional currency are recorded in
the income statement. Non-monetary assets and liabilities measured at historical cost in foreign currency are
translated into the functional currency using the historical exchange rate. Non-monetary assets and liabilities
recognised at fair value are translated using the exchange rate on the date of the determination of the fair value.
3.4 Taxes
The Company is not subject to ordinary taxation in Bermuda.
3.5 Related parties
Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise signif-
icant influence over the party in making financial and operating decisions. Parties are also related if they are
subject to common control or common significant influence.
Related party transactions are recorded to estimated fair value. Investments in subsidiaries Shares in subsidiaries
are recorded at acquired cost and reviewed for impairment when indications are identified suggesting the
carrying amount may not be recoverable.
3.6 Investment in subsidiaries
The Company accounts for investments in subsidiaries using the cost method of accounting. No income or
dividends are recorded related to the investments in subsidiaries. At each reporting date the Company assesses
if an event has occured or circumstances have changed that would indicate that the recoverable amount of
the investment in a subsidiary was below the carrying value. This assessment includes a review of internal
and external factors which include, but is not limited to, changes in the technological, political, economic or
legal environment in which the subsidiary operates, structural changes in the industry, changes in the level of
demand, physical damage and obsolescence due to technological changes.
The following provides information about the Company’s wholly owned subsidiaries as at 31 December 2023:
Country 31 Dec 2023 31 Dec 2022
Seacrest Petroleo Cricaré Bermuda Ltd. Bermuda 100% 100%
SeaPet Offshore Limited Bermuda 100% 100%
Seacrest Petroleo Norway AS
1
Norway 100% n.a.
Seacrest Petroleo UK Limited
2
UK 100% n.a.
1
Incorporated on 27 February 2023
2
Incorporated on 31 August 2023
The paid-in capital investment for each of the above subsidiaries was USD 100.00.
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3.7 Trade and other receivables
Trade and other receivables are measured at transaction price upon initial recognition and subsequently meas-
ured at amortized cost less expected credit losses.
3.8 Cash and cash equivalents
Cash and cash equivalents include cash in hand, bank deposits and other highly liquid investments with original
maturities of three months or less.
3.9 Classification in the statement of financial position
Current assets and short-term liabilities include items due less than one year from the balance sheet date, as well
as items due more than one year from the balance sheet date, that are related to the operating cycle. Liabilities
with maturity less than one year from the balance sheet date are classified as current. All other debt is classified
as long-term debt. Long-term debt due for repayment within one year from the balance sheet date is classified
as current.
3.10 Statement of cash flows
The statement of cash flows has been prepared based on the indirect method
Note 4 Cash and cash equivalents
USD ‘000 31 Dec 2023 31 Dec 2022
Bank – current account 138 3 096
Cash and cash equivalents at end of the period 138 3 096
The cash is kept in order to meet short-term commitments and responsibilities and not for investments.
The cash are held at the following financial institutions:
• HSBC (Bermuda)
• Alpha FX (United Kingdom)
Note 5 Investment in subsidiaries
USD ‘000 31 Dec 2023 31 Dec 2022
Seacrest Petroleo Cricaré Bermuda Limited 249 081 -
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Note 6 Related party transactions
6.1 Accounts receivable with related parties – Current
Affiliated companies (USD ‘000) 31 Dec 2023 31 Dec 2022
Seapet Offshore 21 16
Seacrest Partners III, L.P. 6 6
Seapulse Limited 1 1
Seacrest Group Limited 10 9
Total 37 32
6.2 Accounts receivable with related parties – Non-Current
Affiliated companies (USD ‘000) 31 Dec 2023 31 Dec 2022
SPE Norte Capixaba LTDA 40 286 41 756
Seacrest Petroleo Cricaré Bermuda Ltd 5 927 9 564
Seacrest Uruguay 15 271 15 258
Seacrest UK 44 -
Seacrest Norway 639 -
Seacrest Petroleo SA 3 956 3 828
Total 66 123 70 406
6.3 Accounts payable to related parties – Current
Affiliated companies (USD ‘000) 31 Dec 2023 31 Dec 2022
Seacrest Capital Group Limited - 49
Azimuth Group Services Limited - 184
Total - 233
6.4 Accounts payable to related parties – Non-Current
Affiliated companies (USD ‘000) 31 Dec 2023 31 Dec 2022
Seacrest Capital Group Limited 3 518 49
Azimuth Group Services Limited 180 184
Total 3 698 233
6.5 Financial loans
(USD ‘000) 31 Dec 2023 31 Dec 2022
Mercuria Energy Group Limited (Cyprus)
1,
2
- 16 300
Total - 16 300
Changes in loan (USD ‘000) 31 Dec 2023 31 Dec 2022
Opening balance 16 300 -
Convertible loan notes 3 - 15 000
Convertible loan note interest 3 213 1 300
Interest paid - -
Conversion to equity (16 513)
Principal paid - -
Closing balance - 16 300
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1
On 22 February 2022, the Company issued convertible loan notes in the principal amount of USD 15 million to Mercuria (the
“Notes”). The Notes mature in 2025 and bear interest at a fixed rate that steps up on an annual basis: 10% for the first year of
the Notes’ term, 12.5% for the second year and 15% for the third year. The proceeds of the Notes were used to pay a portion of
the deposit owed by SPE Norte Capixaba to Petrobras under the purchase agreement for the Norte Capixaba acquisition. The
Notes will be automatically converted into the Company’s shares immediately prior to the closing of a public share offering. The
number of shares to be converted will be determined on the settlement date considering the share price, which is not under the
Company’s control. Therefore, the instrument was classified as a financial liability measured at fair value.
2
As consideration for Mercuria facilitating the financing of the Company’s acquisition of the Cricaré Cluster and the signing of the
purchase agreement with Petrobras for the Norte Capixaba acquisition, the Company issued the following warrants to Mercuria
Asset Holdings (Hong Kong) Limited:
i. a warrant instrument exercisable in respect of common shares representing 1% of the Company’s fully diluted share capital at
the time of exercise (“Mercuria Warrant 1”);
ii. a warrant instrument exercisable in respect of common shares representing 2% of the Company’s fully diluted share capital at
the time of exercise, with such warrant only exercisable if the Norte Capixaba acquisition is not completed or the Company sells
the Cricaré Cluster at a time when it does not own the Norte Capixaba Cluster (“Mercuria Warrant 2”); and
iii. a warrant instrument exercisable in respect of 1,302,246 common shares, representing 1% of the Company’s fully diluted share
capital at 15 February 2022 (“Mercuria Warrant 3”).
Warrant 1 was exercised on 23 February 2022 and Mercuria Asset Holdings (Hong Kong) Limited received 1 302 245 of the
Company’s Shares. Mercuria Warrant 2 became obsolete in April 2023 once the Company executed the acquisition of the Norte
Capixaba Cluster (April 2023). Warrant 3 was exercised on 23 February 2023 and Mercuria Energy Group Limited received 1 302 246
of the Company’s Shares.
On 23 December 2022, Mercuria Asset Holdings (Hong Kong) Limited transferred 100% of its interests in the Notes, Mercuria
Warrant 2 and Mercuria Warrant 3, as well as all its Shares in the Company, to Mercuria Energy Group Limited, a Cyprus company.
3
The Notes, including accrued interest, were mandatorily converted into shares on 20 February 2023 which was immediately prior
to the closing of the Offering. The number of shares into which the Notes were convertible was based on a discount to the Offer
Price, as determined by a formula set out in the Notes. Considering the Offer Price, conversion of the Notes resulted in an issuance
of 39 756 951 new shares in the Company at a subscription price of NOK 5.10 per share.
Note 7 Financial loans (non-current)
(USD ‘000) 31 Dec 2023 31 Dec 2022
OVMK Special Bond Fund (’OVMK’)
1
- 3 218
Total - 3 218
Changes in loan (USD ‘000) 2023 2022
Opening balance 3 218 -
Convertible loan notes
2
- 3 000
Convertible loan note interest
2
43 218
Conversion to equity (3 261) -
Closing balance - 3 218
1
On 22 February 2022, the Company issued convertible loan notes in the principal amount of USD 3 million to OMVK (the “Notes”).
The Notes mature in 2025 and bear interest at a fixed rate that steps up on an annual basis: 10% for the first year of the Notes’ term,
12.5% for the second year and 15% for the third year. The proceeds of the Notes were used to pay a portion of the deposit owed by
SPE Norte Capixaba to Petrobras under the purchase agreement for the Norte Capixaba acquisition. The Notes will be automat-
ically converted into the Company’s shares immediately prior to the closing of a public share offering. The number of shares to
be converted will be determined on the settlement date considering the share price, which is not under the Company’s control.
Therefore, the instrument was classified as a financial liability measured at fair value.
2
The convertible loan notes (the “Notes”) issued by the Company were mandatorily converted into shares on 20 February 2023
which was immediately prior to the closing of the initial pubic offering (IPO). The number of shares into which the Notes
were convertible was based on a discount to the Offer Price, as determined by a formula set out in the Notes. Considering the
Offer Price, conversion of the Notes resulted in an issuance of 6 556 345 new shares in the Company at a subscription price of
NOK 5.10 per share.
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Note 8 Equity
8.1 Share capital
Issued capital at 31 December 2023 comprised:
(USD ‘000) Share capital Share premium Total
Opening January 1, 2023
(185 926 155 fully paid ordinary shares) 2 76 052 76 054
Issued during the period
(499 887 820 fully paid ordinary shares) 5 269 081 269 086
Reverse share split
(327 263 958 fully paid ordinary shares) - - -
Balance at December 31, 2023
(358 550 017 fully paid ordinary shares) 7 345 133 345 140
Issued capital at 31 December 2022 comprised:
(USD ‘000) Share capital Share premium Total
Opening January 1, 2022
(114 922 237 fully paid ordinary shares) 1 25 998 25 999
Issued during the year
(71 003 918 fully paid ordinary shares) 1 50 054 50 055
Balance at December 31, 2022
(185 926 155 fully paid ordinary shares) 2 76 052 76 054
Ordinary shares
Ordinary shares each have a par value of USD 0.00001 and 700 000 000 (200 000 000 in 2022) shares have been
authorised. The Company issued 468 601 709 thus far in 2023 (71 003 918 in 2022) shares and each ordinary share
carries one vote.
In February 2023, the Company raised approximately NOK 2 662 million (equivalent to USD 260 million) in gross
proceeds through the allocation of 443 666 666 new shares in the Offering. The Offer Shares were priced at
NOK 6 per Offer Share. This included an overallotment of 40 333 333 shares which subsequently repurchased
resulting in net shares issued of 403 333 333.
The convertible loan notes (the “Notes”) issued by the Company were mandatorily converted into shares on
20 February 2023 which was immediately prior to the closing of the Offering. The number of shares into which
the Notes were convertible was based on a discount to the Offer Price, as determined by a formula set out in the
Notes. Considering the Offer Price, conversion of the Notes resulted in an issuance of 39 756 951 new shares in
the Company at a subscription price of NOK 5.10 per share.
The Company’s Series A shares were mandatorily converted into common shares on 20 February 2023 which
immediately prior to the closing of the Offering. However, because the Offer Price was below an amount
per Series A share equal to 1.6 times the Series A share issue price of USD 0.57142857, equal to approximately
NOK 9.35 (the “Series A Minimum Return”), the 39 372 384 Series A shares did not convert into common shares
on a 1 for 1 basis prior to the admission to trading of the shares. Instead, the Series A shareholders received a total
of 61 521 338 common shares upon the conversion of the Series A shares. Of these, 22 148 954 were additional
common shares so that the Series A shareholders achieved the Series A Minimum Return. Upon the conversion
of the Series A shares, the Company issued and delivered such additional common shares to the Series A share
-
holders’ respective VPS accounts.
On 28 February 2023 the Board of Directors approved a reverse stock spilt whereby shareholder would receive
one common share for two owned. The resulted in total shares issued reducing to 327 263 932.
On 6 December 2023 the Company completed a private share placement of 31 111 111 new common shares which
in turn raised gross proceeds of USD 25.6 million (equal to approx. NOK 280 million).
During the period 1 205 112 employee options were converted to 1 205 112 ordinary shares..
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8.2 Other reserves
The Company has granted share options to selected employees. Total options issued to each individual were
divided into tranches. The Group has no legal or constructive obligation to repurchase or settle the options in cash.
The fair value of options is determined using the Black-Scholes valuation model. The significant inputs into
the model were: share price at the grant date, exercise prices per and volatility. The volatility measured at the
standard deviation of continuously compounded share returns was based on statistical analysis of the daily share
prices of two comparable quoted share over a period of one year.
In February 2023 the total options were adjusted as a result of the Company’s reverse stock split (Note 17.1). Also,
during the year ended 31 December 2023, 1 205 112 options were converted to common shares and 4 214 992 options
were cancelled leaving 9 436 250 share options outstanding as at 31 December 2023.
Share options outstanding at the end of the year have the following expiry date and exercise prices:
Grant-vest Expiry date
Exercise price in
USD per share
option Share option
2020-2023 7 October 2025 USD 0.00002 596 250
2020-2024 31 August 2025 USD 0.20 125 000
2023-2025 31 March 2025 USD 0.20 175 000
2023-2026 19 January 2033 NOK 12.00 2 075 000
2023-2027 31 July 2033 NOK 10.74 6 465 000
Total 9 436 250
As at 31 December 2023, the weighted average remaining option life was 9.19 years and the total reserve related
to employee options is USD 3 094 446 (2022: 4 300 ,538).
For the period ended 31 December 2023, the expense recognized in the Consolidated Statement of Profit or Loss
arising from the share options issuance is USD 59 835 (USD 1 999 513 for the year ended 31 December 2022). The
cost associated with issuing new options has been partially offset by a negative adjustment associated with the
cancelation / conversion adjustment of previous issued share options.
Note 9 General and administrative expenses
(USD ‘000) 2023 2022
Employee benefit and compensation 1 136 3 254
Travel and other sundry items 999 1 054
Office rent and running costs 242 88
Director fees 320 -
Services hired
1
2 063 6 296
Contractual guarantee fees
2
3 569 3 540
Other operating expenses 586 109
Total 8 915 14 341
1
Professional and technical services were hired, such as lawyers, environmental specialists, geology, and geography consultation, as
support for operations.
2
Fees associated with the financial guarantee that was contractually required in order to acquire the Cricaré Cluster.
Note 10 Net financial results
(USD ‘000) 2023 2022
Interest on related party loans 1 572 1 731
Exchange rate gains 217 58
Financial income 1 789 1 789
Banking expenses (8) (37)
Interest on financial loans (note 6) (256) (1 518)
Financial expenses (264) (1 555)
Net financial results 1 525 234
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Note 11 Subsequent events
In January 2024 the Company successfully closed the book on a 3 year USD 80 million senior unsecured bond
issue with a coupon of 16% p.a. The net proceeds from the bond issue will strengthen the Company’s ability to
grow production through drilling, work-overs and other field development optimisations at the Norte Capixaba
and Cricaré Clusters.
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Statement of Reserves (unaudited)
Seacrest Petroleo has engaged DeGolyer and MacNaughton for reserve and resource certification. The eval-
uations are based on standard petroleum engineering and evaluation principles according to the Petroleum
Resources Management System (PRMS) approved in 2007 and revised in 2018. The figures represent the best
estimate of proven and probable reserves (2P/P50).
As in all aspects of oil and gas evaluation, there are uncertainties inherent in in the interpretation of engineering
and geoscience data; therefore, conclusions necessarily represent only informed professional judgement.
At Seacrest Petroleo’s request and for the purposes of the report, the estimates of net reserves for 2022 were
proforma and assumed the acquisition of the Norte Capixaba Cluster. The production numbers for 2023 also
include production from this Cluster from 1 January 2023 on a proforma basis. The acquisition of Norte Capixaba
was completed on 12 April 2023.
Reference is made to the competent persons report (CPR) per 31 December 2023 available at
www.seacrestpetroleo.com.
PROVEN AND PROBABLE RESERVES
Mill barrels of oil equivalents (mmboe) 2023 2022
Balance at 1 January 140 97
Production (3) (3)
Revision of previous estimate 7 45
Total reserves at 31 December 144 140
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Responsibility statement
We confirm that, to the best of our knowledge,
the financial statements for the period ended
31 December 2023 have been prepared in
accordance with current applicable accounting
standards and give a true and fair view of the
assets, liabilities, financial position and profit or
loss of the Company and the Seacrest Petroleo
Group taken as a whole. We also confirm that the
Board of Directors’ Report includes a true and fair
review of the development and performance of the
business and the position of the Company and the
Seacrest Petroleo Group, together with a description
of the principal risks and uncertainties facing the
Company and the Seacrest Petroleo Group.
Rio de Janeiro, Brazil/Hamilton, Bermuda 24 April 2023
The Board of Directors of Seacrest Petroleo Bermuda Limited
Erik Tiller
Executive Chairman
Rune Olav Pedersen
Director
Denis Chatelan
Director
Martin Bachmann
Director
Robert Lawson
Director
Pedro Magalhães
Director
José Alcides Santoro Martins
Director
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Reconciliations of alternative performance measures
Seacrest Petroleo discloses alternative performance measures as part of its financial reporting as a supplement to
the financial statements prepared in accordance with international accounting standards (IFRS). The Company
believes that the alternative performance measures provide useful supplement information to management,
investors, lenders and other stakeholders and are meant to provide an enhanced insight and better understanding
into the financial development of Seacrest Petroleo and improve comparability between periods.
USD 1000 2023 2022
Capex
Investments in fixed assets (excluding capitalised interest) 87 368 3 816
Advances for the acquisition of oil and gas assets - 35 850
Payments of lease debt (investments in fixed assets) 8 473 2 364
CAPEX 95 841 42 030
EBITDA and EBITDAX
Total Income 177 431 33 617
Production costs (113 067) (16 746)
General and administrative expenses (47 288) (27 988)
EBITDA 17 076 (11 117)
Exploration expenses - -
EBITDAX 17 076 (11 117)
EBITDA margin 10% (33%)
EBITDAX margin 10% (33%)
Equity ratio
Total equity 161 748 (52 743)
Total assets 810 213 217 236
Equity ratio 20% (24%)
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USD 1000 Note 2023 2022
Net interest-bearing debt
Long-term financial loans 296 305 63 764
Long-term lease debt 7 289 3 201
Short-term financial loans 19 397 1 893
Short-term lease debt 9 515 3 447
Cash and cash equivalents (50 458) (7 745)
Net interest-bearing debt 282 049 64 560
Free cash flow
Net cash from / (used) in operating activities (7 595) (38 332)
Capital expenditures (95 841) (42 030)
Free cash flow (103 436) (80 362)
Production cost per boe
Production costs 19 113 067 16 746
- Less storage costs (15 470) (3 059)
- Less royalties (12 804) (2 855)
- Less oil acquired (20 717) -
- Less other adjustments (3 057) -
Adjusted production cost based on sold volumes 61 019 10 832
Adjustment for over (-) / under lift (+) (426) 3 142
Production cost based on produced volumes 60 594 13 974
Total produced volumes ('000 boe) 2 546 501
Production cost per boe produced (USD/boe) 23.8 27.9
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Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
103103 FinancialsFinancials | Independent Auditor’s reportFinancials | Independent Auditor’s report
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Seacrest Petroleo Annual Report 2023Seacrest Petroleo Annual Report 2023
104104 FinancialsFinancials | Independent Auditor’s reportFinancials | Independent Auditor’s report
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