CADOGAN ENERGY SOLUTIONS PLC

ANNUAL FINANCIAL REPORT

2024

CADOGAN ENERGY SOLUTIONS PLC

Contents

OVERVIEW

Summary of 2024 1

Group Overview 2

STRATEGIC REPORT 4

Chairman’s Statement 5

Chief Executive’s Review 6

Operations Review 9

Financial Review 10

Risks and Uncertainties 12

Summary of Reserves and Resources 16

Corporate Responsibility 17

Task force on climate-related financial disclosures 21

CORPORATE GOVERNANCE

Board of Directors 26

Report of the Directors 27

Corporate Governance Statement 34

Board Committee Reports 40

Annual Report on Remuneration 2024 46

FINANCIAL STATEMENTS

Statement of Directors’ Responsibilities 68

Independent Auditor’s Report 69

Financial Statements of Cadogan Petroleum plc

Consolidated Income Statement 77

Consolidated Statement of Comprehensive Income 78

Consolidated Balance Sheet 79

Consolidated Cash Flow Statement 80

Consolidated Statement of Changes in Equity 81

Notes to the Consolidated Financial Statements 82

Company Balance Sheet 111

Company Cash Flow Statement 112

Company Statement of Changes in Equity 113

Notes to the Company Financial Statements 114

GLOSSARY 118

SHAREHOLDER INFORMATION 119

CADOGAN ENERGY SOLUTIONS PLC

Summary of 2024

Key Financial Highlights of 2024:

▪ Loss for the year: $6.2 million (2023: profit of $1.3 million)

▪ Average realised price

: $71.13/boe (2023: $59.32/boe)

▪ Gross revenues

: $9.2 million (2023: $7.6 million)

▪ G&A

: $3.5 million (2023: $3.6 million)

▪ Loss per share: 2.6 cents (2023: profit of 0.5 cents)

▪ Cash at year end: $14.4 million (2023: $14.2 million)

Key Operational Highlights of 2024:

▪ Production: 129,272 bbl (2023: 119,057 bbl), a 9% increase year-on-year;

▪ No LTI/TRI

. All employees and assets have been secured;

▪ ISO 14001 and 45001 certifications were re-validated by respective authority for one year;

▪ Assessment of Blazhiv oil field hydrocarbon reserves by an independent expert according to PRMS

standards;

▪ Qualification of Exploenergy as gas operator in Italy by the Ministry of Environment and Energy

Transition;

▪ Development of the gas-to power project using the non-commercial gas of Blazhiv field for producing

electricity to be sold on the market; and

▪ Launch of an investment for the development of new power generation projects in Ukraine, with a

total installed capacity of 12,3 MW to enter in operation in H2 2025.

Average realised price is calculated as total revenue from oil sales for the period divided by total volume of sold oil for the period

Gross revenues of $9.2million (2023: $7.6 million) included nil (2023: $0.4 million) from trading of natural gas, $9.2 million (2023:

$7.2 million) from production

Administrative expenses (“G&A”)

LTI: Lost Time Incidents; TRI: Total Recordable Incidents

CADOGAN PETROLEUM PLC

Group overview

In 2024, while continuing to maintain exploration and production assets, and operating an oil services

business in Ukraine, Cadogan started its diversification and development in the electricity market. Cadogan’s

oil assets are concentrated in the west of the country. The oil services business focuses on workover

operations, civil works services and other services to satisfy Cadogan intra-group operational needs and

specialised machinery services to third parties. The Cadogan’s power generation assets are developed in the

center and the west of the country.

Our business model

We aim to increase value through:

▪ Maintaining a robust balance sheet, monetising the remaining value of our Ukrainian assets and

supplementing E&P cash flow with revenues from gas trading and oil services

▪ Developing new activities along the energy value chain with a lower impact on environment

▪ Diversifying Cadogan’s portfolio, both geographically and operationally

Ukraine

2024 remained a highly challenging year for Cadogan due to the ongoing invasion of Ukraine by Russia and

its consequences on the operational activities of the Group.

West Ukraine

The Group continued to produce oil from its production Blazhiv license located in the West of Ukraine.

Notwithstanding severe market volatilities caused by war time uncertainties Cadogan was able to avoid

shutdowns of its production during 2024. As a result, production grew by 9% above the one of 2023. Net oil

production was 129,272 bbl corresponding to an average of 353 bpd.

In 2024, a new assessment of hydrocarbon reserves was completed by an independent expert, according to

PRMS standards. The Blazhiv field contains 3.05 million boe of 3P reserves and additionally 0,64 million boe

of 2C contingent resources. The results of this assessment indicate a strong reserves base, highlighting our

robust position and revealing significant potential for further development.

A substantial move has been done to ensure the sustainability of the oil production activities by utilizing the

non-commercial associated gas from oil production activities for generating electricity. In 2024, progress has

been made in the development of the gas infrastructure and the overall construction works. Because of a

delay in releasing an authorisation from an administration, the gas-to-power generator should be operational

in July 2025.

Power Generation Business

In 2024, the Group further advanced its diversification into the electricity sector to become an electricity

producer. Cadogan initiated new investments in power generation projects in different locations in Ukraine,

with a total installed capacity of 12.3 MW. These projects are scheduled to become operational in H2 2025,

reinforcing the Company’s commitment to expanding its presence in the energy sector.

Subsidiary businesses

Due to the current situation in Ukraine, the Company had no gas trading operations during 2024. Cadogan

continues to monitor the gas markets in Europe and Ukraine, while keeping in storage 0.7 million m3 of gas.

Astroservice LLC, the oil services subsidiary, continued to support Blazhiv license wells’ operations and

specialized machinery services to third parties.

CADOGAN ENERGY SOLUTIONS PLC

Group overview

Italy

The Group owns a 90% interest in Exploenergy s.r.l., an Italian company, which controls two exploration areas

(Reno Centese and Corzano), located in the Po Valley region (Northern Italy).

In 2024, the Ministry for Environment and Energy Transition, confirmed again that Exploenergy is a qualified

gas operator in Italy. In September 2024, the Ministry for Environment and Energy Transition notified this

decision to the two corresponding regions for Exploenergy projects, inviting them to release the necessary

authorisations for the preliminary exploration phase. Exploenergy is expecting the release in June 2025 of

this authorisation for the project located in Lombardia.

In February 2019, Cadogan entered in a 2-year loan agreement with Proger Management & Partners Srl

(“PMP”) with a call option which Cadogan could exercise, with no obligation, to get a 33% equity interest in

Proger Ingegneria Srl which in turn held at 31 December 2020 a 75.95% equity interest in Proger Spa. Proger

is an Italian engineering company providing services in Italy and in different international areas.

The interpretation of these contracts led to controversy which has been settled by the parties in December

2024.

CADOGAN ENERGY SOLUTIONS PLC

Strategic Report

The Strategic Report has been prepared in accordance with Section 414A of the Companies Act 2006 (the

“Act”) and presented hereunder. Its purpose is to inform stakeholders and help them assess how the

Directors have performed their legal duty under Section 172 of the Act to promote the success of the

Company.

Section 172 Statement

The Company’s section 172 statement is presented on page 39 and forms part of this strategic report.

Principal activity and status of the Company

The Company is registered as a public limited company (registration number 05718406) in England and

Wales. Up to 2024, the principal activity was oil and gas exploration, development and production; the

Company also conducts gas trading and provides services. In November 2022, the shareholders approved the

change of name and the strategy to expand its activities along the energy value chain to new forms of energy

with a reduced impact on the environment. In December 2023, the Company stepped into the electricity

generation sector by launching the development of the gas-to-power project on the Blazhiv field in Ukraine.

Due to delays deriving from administrative authorisations, this project will be operational in July 2025. In

2024, the Company decided to accelerate its business diversification in the electricity market and launched

new investments to develop several projects in power generation with a total installed capacity of 12.3 MW

to be operational in H2 2025.

The Company’s shares used to have a standard listing on the Official List of the UK Listing Authority and are

traded now on the “transition” Market of the London Stock Exchange after the changes in the listing

categories which occurred in July 2024.

Key performance indicators

The Group monitors its performance through five key performance indicators (“KPIs”):

- to increase oil, gas and condensate production measured on the number of barrels of oil

equivalent produced per day (“boepd”);

- to decrease administrative expenses;

- to increase the Group’s basic earnings per share;

- to maintain no lost time incidents; and

- to grow geographically and operationally diversify the portfolio.

The Group’s performance in 2024 against these KPI’s is set out in the table below, together with the prior

year performance data.

Unit

2024

2023

2024 vs 2023

Average production (working interest basis)

boepd

353

326

+8%

Overhead (G&A)

$ million

(3.5)

(3.6)

-3%

Basic (loss)/profit per share

cents

(2.6)

0.5

-620%

Lost time incidents

incidents

Geographic and operation diversification

new assets

yes

Average production is calculated as the average daily production during the year

Basic profit/(loss) per ordinary share is calculated by dividing the net profit/(loss) for the year attributable to equity holders of

the parent company by the weighted average number of ordinary shares during the year

Lost time incidents relate to the number of injuries where an employee/contractor is injured and has time off work (IOGP

classification)

CADOGAN ENERGY SOLUTIONS PLC

Chairman’s statement

Chairman’s Statement

2024 remained a year of persistent challenges for Ukraine, as the ongoing conflict with Russia continued to

impact the country’s stability and economic environment. The geopolitical uncertainties and security risks

posed significant obstacles to our operations, yet Cadogan remained resolute in its commitment to

operational excellence, and sustainability. The safety of our employees continues to be our highest priority,

and we have taken all necessary measures to ensure their well-being while securing the continuity of our

operations.

Despite these challenges, Cadogan strengthened its position in the market by preserving stable oil production

levels, achieving results that exceeded those of 2023. Through proactive risk management and adaptability,

we successfully mitigated the impact of external uncertainties, ensuring uninterrupted production and sales.

Furthermore, Cadogan intensified its focus on diversification and investment in power generation. Despite

the adverse conditions, we increased our investments in this sector, launching a new power generation

project in Ukraine. This initiative reflects our long-term commitment to growth, sustainability, and energy

diversification.

Looking ahead, we acknowledge that geopolitical instability and economic volatility will continue to present

challenges. However, we remain committed to overcoming these hurdles with resilience, integrity, and

determination. Thanks to our dedicated team and strong leadership, we are well-positioned to maximize the

value of our assets while furthering our strategic goals. The Board remains focused on strengthening our

position and driving future growth through diversified investments, ensuring the continued success and

sustainability of Cadogan in these uncertain times.

Michel Meeus

Non-Independent Non-Executive Chairman

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Chief Executive’s Review

With the persistence of the war in Ukraine, 2024 continued to present big challenges for the energy sector

in general and for Cadogan in particular. The ongoing air strikes targeting oil, gas, and energy

infrastructure, combined with geopolitical and economic uncertainties, have added further complexities

to operations. Despite these adversities, Cadogan has remained resourceful and forward-thinking,

effectively navigating market complexities to sustain operations, drive expansion and implement its

strategy aiming at positioning Cadogan Energy Solutions as a diversified energy group developing new

activities along the energy value chain with a lower impact on environment.

The security of our employees in Ukraine remains our first concern. We are pleased to report that all of

them have remained safe throughout the year. The Group’s local operating companies in Ukraine have

been recognised critical to the Country’s economic functioning, reinforcing our essential role in the energy

sector.

In 2024, the Group successfully increased crude oil production while achieving higher sales prices and

revenues. With the aim of providing sustainability for this activity, Cadogan has developed its gas-to-

power project on the Blazhiv field to capture the non-commercial gas and the CO2 emissions for producing

electricity to be sold on the market. Due to administrative delays for delivering authorisations for the

infrastructure and connection, this project is expected to be operational in July 2025. Furthermore in

2024, Cadogan launched a new development in power generation in Ukraine with a total installed capacity

of 12.3 MW to be operational in H2 2025, underscoring its strategy to broaden its energy portfolio and

reinforcing its commitment to diversification and long-term energy sustainability.

Against this challenging background, Cadogan’s existing operational activities performed as following:

• Another year without LTIs;

• a 9% increase in oil production, from 119,057 bbl in 2023 to 129,272 bbl in 2024;

• development of the gas-to-power project and its infrastructure on Blazhiv field;

• $14.3 million of net cash at 31 December 2024, and $24.7 million at 31 January 2025 (after the

closing of the Settlement Agreement with Proger);

• further diversification in electricity generation business with the development of projects with a

total installed capacity of 12.3 MW in Ukraine to be operational in H2 2025; and

• assessment and confirmation of Blazhiv oil field hydrocarbon reserves according to PRMS

standards.

CADOGAN ENERGY SOLUTIONS PLC

Chief Executive’s Review

Operations

Cadogan has continued to safely produce from its Blazhiv field in the West of Ukraine. Oil production has

increased by 9% compared to the previous year despite ongoing severe constraints in the country.

Cadogan continued to improve its subsoil knowledge on Blazhiv field. In 2024, the assessment of the

reserves, conducted by an independent expert, confirmed that the Blazhiv field contains 3.05 million boe

of 3P reserves and additionally 0,64 million boe of 2C contingent resources. This robust position is

reinforced by the strategy of Cadogan for developing the sustainability of these activities. The gas-to-

power project on the Blazhiv field aiming to utilize the non-commercial associated gas from oil production,

converting it into electricity to be sold on the market, progressed tthroughout 2024. Due to delays in the

authorisations process, this project is expected to be operational in July 2025. On a full year basis, this

project will allow to drop significantly the CO2 emissions related to our operations on Blazhiv field. It is

expected that the intensity ratio for E&P operations (for same production volumes) will drop from 146 tons

e/Kboe to 32 tons CO

e/Kboe.

Furthermore, in 2024, Cadogan implemented its strategy, to be a diversified energy company, and

expanded its electricity generation business. The Group has launched a new investment to install new

power generation capacity with a total of 12.3 MW on different locations in centre and west of Ukraine.

This strategic move strengthens Cadogan’s role in the energy sector and contributes to addressing the

country’s growing electricity demand. The expansion aligns with the Company’s commitment to

diversification in energy production.

High operational standards of the Group have been confirmed again by zero LTI or TRI, with a total over

1,873,000 manhours since the last incident, and re-validation of ISO 14001 & 45001 certifications by

respective authority for one year.

Cadogan continues to integrate environmental considerations into its operational approach. The Group

has taken proactive steps to reduce greenhouse gas emissions by purchasing green certificates, ensuring

that the electricity consumed for its operations in Ukraine is entirely sourced from renewable energy. In

2024, the Group was able to buy green certificates to mitigate the CO2 emissions generated by its

operational activities in Q4 2024 and 2025.

In 2024, the Italian Ministry for Environment and Energy Transition, confirmed again that Exploenergy is

a qualified gas operator. In September 2024, the Ministry for Environment and Energy Transition notified

this decision to the two corresponding regions for Exploenergy projects, inviting them to release the

necessary authorisations for the preliminary exploration phase. Exploenergy is expecting the release in

June 2025 of this authorisation for the project located in Lombardia.

Other

Due to high market volatility caused by military escalation in Ukraine, The Company had no trading

operations during 2024. Cadogan continues to monitor the gas markets in Europe and Ukraine, while

keeping in storage 0.7 million m3 of gas to secure resources. The oil services activities were used primarily

to serve the Group’s wells’ operations and specialized machinery services to third parties.

CADOGAN ENERGY SOLUTIONS PLC

Chief Executive’s Review

Proger

In February 2019, Cadogan used part of its cash (Euros 13.385 million) to enter into a 2-year Loan

Agreement with Proger Managers & Partners, together with a Call Option Agreement which could have

been exercised by Cadogan, between September 2019 and February 2021, into a 33 % equity interest in

Proger Ingegneria which in turn held, a 75.95% equity interest in Proger as at 31 December 2020. The

interpretation of these contracts has led to controversy between the parties, with a refusal to deliver

financial information to Cadogan. The Call Option was not exercised. Cadogan demanded the repayment of

the Loan together with the accumulated interests. PMP contested the obligation to reimburse and asked for

arbitration. This arbitration proceeding ended in July 2022, but the interpretation of the award led to a new

controversy. Cadogan introduced a claim at the Appeal Court of Rome and asked in November 2023 for a

new arbitration. In September 2024, the parties agreed to suspend the procedures and find an amicable

settlement. This was done, and a Settlement Agreement was signed on 12 December 2024. After receiving

10 million euros in a single instalment in January 2025, Cadogan exited from the above-mentioned contracts,

ended all the litigations procedures and dissolved the pledge over the corresponding shares in Proger

Ingegneria. Whilst increasing the available cash in Cadogan by $10.3 million, the transaction is impacting the

balance sheet and the 2024 accounts with an impairment of $5.7 million which is not a cash item.

Outlook

2024 has been an important inflexion year for Cadogan Energy Solutions. Despite the tremendous

challenges imposed by the war in Ukraine, the Group has been successful in shifting its business model to

start its journey to become a diversified energy group. We are bringing sustainability to the existing oil

production activities on Blazhiv field with a solution which will allow to drop significantly the emissions of

CO2 and improve the profitability for the Group. The ongoing investments and diversification in the

electricity generation sector will create significant increase in revenues and cash-flow. In 2025, once

obtained the authorisation, the Group will start the studies for the exploration phase on the authorised

project in Lombardia (Italy), confirming its geographical diversification. Thanks to a robust balance sheet

and available cash, the Group is ready to continue to develop its activities along the energy value chain,

increasing its shift towards activities with a lower impact on environment.

This strategy is totally aligned with the Climate Change requirements for sustainability of Cadogan’s

activities.

Fady Khallouf

Chief Executive Officer

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Operations Review

Overview

At 31 December 2024, the Group held working interests in one conventional gas, condensate and oil

exploration and production license in the west of Ukraine.

Summary of the Group’s licenses (as at 31 December 2024)

Working

interest (%)

License

Expiry

License type

100

Blazhiv

November 2039

Exploration and

Production

West Ukraine

E&P activity remained focused on maintaining its license and safely and efficiently producing from the existing

wells as well as implementing non-invasive production enhancement scenarios within the Blazhiv oil field.

Blazhivska license

In 2024, the daily average net oil production reached 353 barrels per day, indicating a 9% increase compared

to 2023's production of 326 barrels per day. Proper planning, robust safety measures, and efficient resource

management allowed to achieve such production levels demonstrating operational stability even in harsh war

circumstances.

Cadogan continues to deepen its knowledge of Blazhiv area subsoil. In 2023, the Company conducted full

hydrodynamic surveys on the Blazhiv-1, Blazhiv-3, Blazhiv-Monastyrets-3, and Blazhiv-10 wells. Further, in

2024, an independent expert completed the re-assessment of reserves at the Blazhiv field, confirming 3.05

million boe of 3P reserves and 0.64 million boe of 2C contingent resources associated with the Blazhiv license.

These results indicate a strong reserves base.

The gas-to-power project, aiming to utilise non-commercial associated gas from oil production on Blazhiv

field converting it into electricity to be sold on the market, progressed tthroughout 2024. Operations focusing

on the construction of the gas collecting infrastructure and laying down the pipelines advanced steadily. A

power generator from a leading European manufacturer, along with essential equipment, was delivered on

the site.

Gas trading

Due to high market volatility caused by military escalation in Ukraine, The Company had no trading operations

during 2024. Cadogan continues to monitor the gas markets in Europe and Ukraine, while keeping in storage

0.7 million m3 of gas to secure resources.

Service

The Group continued to provide services through its wholly owned subsidiary Astro-Service LLC. The provided

services were primarily focused on serving intra-group operational needs in wells’ re-entry/repairs and

stimulation operations, well surveys and field on-site activities, but also specialized machinery services to third

parties. In the context of the prevailing situation in Ukraine, the services segment was dedicated totally to

supporting the Group’s production activities.

Electricity generation

Cadogan has further expanded its electricity generation business. The Group has launched a new investment

to install a total of 12.3 MW in different locations in Ukraine. This strategic move strengthens Cadogan’s role

in the energy sector and contributes to addressing the Country’s growing electricity demand. It is expected

that the new projects will be operational in H2 2025.

CADOGAN ENERGY SOLUTIONS PLC

Financial review

Overview

In 2024, the Group increased its oil production by 9%. The Group’s operating divisions delivered a positive

contribution of $4.1 million (2023: positive contribution of $2.2 million excluding the impairment of oil and

gas assets).

The average realised oil price increased by 20% from $59.3 to $71.13 per barrel.

The cash position slightly increased to $14.4 million as at 31 December 2024 compared to $14.2 million as at

31 December 2023.

The trading business of the Group had no activities during the period.

Income statement

The Revenues from production increased from $7.6 million in 2023 to $9.2 million in 2024. This result is

integrating mainly an increase in oil average realised prices by 20% and an increase in crude oil production

by 9%. E&P costs of sales are almost at the same level: $5.1 million in 2024 and $5.39 million in 2023. These

costs include production royalties and taxes, fees paid for the rented wells, depreciations, depletion of

producing wells, direct staff costs and other costs for exploration and development. Overall, in 2024, E&P

made a positive contribution of $4.1 million (2023: $2.2 million) to gross profit.

Administrative expenses (“G&A”) continued to be under strict control.

Balance sheet

The Property Plant & Equipment (PP&E) balance was $5.3 million at 31 December 2024 (2023: $5.8 million). It

primarily represents the carrying value of the assets invested and engaged in relation with the Blazhiv license.

The E&E and PP&E are held by Ukrainian subsidiaries with functional currency Ukrainian Hryvna. The Ukrainian

Hryvna was devaluated by 11% as at 31 December 2024 compared to 31 December 2023, generating a

movement in the E&E and PP&E value presented in the US Dollar.

Trade and other receivables of $0.3 million (2023: $0.3 million) include $0.2 million of prepayment for gas-

to-power facility construction, $0.07 million of recoverable VAT (2023: $0.2 million), which is expected to be

recovered through production activities, and $0.03 million (2023: $0.1 million) of other receivables.

Inventories slightly increased from $0.4 million to $0.5 million principally due to the revaluation of the gas in

the stock.

The Proger loan was held at amortised cost at $10.4 million (2023: $17.1 million). Refer to the Chief

Executive’s Report for further details together with note 4(d) and 28.

The $1.7 million of trade and other payables as at 31 December 2024 (2023: $1.4 million) consist of $0.8

million (2023: $0.4 million) of accrued expenses, $0.2 million trade payables (2023:$0.2 million) and $0.7

million (2023: $0.8 million) of other payables.

Provisions include $0.2 million (2023: $0.2 million) of long-term and current provisions for decommissioning

costs which represents the present value of these costs that are expected to be incurred in 2039 for

producing assets, when the existing Blazhiv license will expire, and current provision for the decommissioning

costs of the Bitlyanska license.

Net cash slightly increased to $14.4 million at 31 December 2024 compared to $14.2 million at 31 December

2023.

CADOGAN ENERGY SOLUTIONS PLC

Financial review (continued)

Cash flow statement

The Consolidated Cash Flow Statement on page 80 shows operating cash inflow before movements in

working capital of $1.4 million (2023: outflow of $0.6 million), which represents mostly cash generated by

the E&P net of corporate expenses.

Related party transactions

Related party transactions are set out in note 30 to the Consolidated Financial Statements.

Treasury

The Group continually monitors its exposure to currency risk. It maintains a portfolio of cash mainly in US

dollars (“USD”) and Euro held primarily in the UK. The production revenues from the sale of hydrocarbons

are received in Hryvna, the local currency in Ukraine. Since the Martial Law established in February 2022 in

Ukraine, the cash generated in Ukraine must be kept in Hryvna.

CADOGAN ENERGY SOLUTIONS PLC

Risks and uncertainties

There are several potential risks and uncertainties that could have a material impact on the Group’s long-

term performance and could cause the results to differ materially from expected and historical results.

Executive management review the potential risks and then classify them as having a high impact if above $5

million, medium impact if above $1 million but below $5 million, and low impact if below $1 million. They

also assess the likelihood of these risks occurring. Risk mitigation factors are reviewed and documented

based on the level and likelihood of occurrence. The Audit Committee reviews the risk register and monitors

the implementation of risk mitigation procedures via Executive management, who are carrying out a robust

assessment of the principal risks facing the Group, including those potentially threatening its business model,

future performance, solvency and liquidity.

The Group has analysed the following categories as key risks:

Risk

Mitigation

War risks

Since Spring 2021, Russia has gradually

increased the concentration of military

equipment, weapons and troops near the

Ukrainian borders. On 24 February 2022, the

Russian troops attacked Ukraine and invaded

its territory. Severe fights have been engaged

in Kyiv, and several other main cities like

Kharkiv, Mariupol, Kherson, Sumy and

Chernihiv.

Missile attacks and bombing are used by the

Russian troops to destroy infrastructures and

facilities even in the western cities, like Lviv.

Cyber-attacks have increased. Given the

unpredictability of the issue of this war, a full-

scale invasion of Ukraine or a much longer

duration of this war could have material

impacts on the Group’s operations and on its

human, industrial and financial resources. In

2024, the situation remained highly

challenging and complicated with the

possibility for further escalation.

Anticipating the beginning of the war, the Group put in

place, since the beginning of February 2022, emergency

procedures communicated to all employees on the

different sites in Ukraine with an Emergency Committee

communicating every day. Safety measures have been

dispatched with a remote working organization. Specific

measures have been put in place for the operations on

site. In case of need, specific measures were put in place

to suspend the operations of the Blazhiv field wells, with

technical measures for decommissioning and temporary

conservation of the wells. The transmission and internet

connection systems have been secured with a satellite

connection. IT security has been reinforced. The Group is

monitoring the situation daily and taking appropriate

action to ensure the safety and the essential needs of its

employees. In 2024, Cadogan employees in Ukraine

continued operating in the combined (remote/ office)

work mode with the key focus on the safety measures.

Operational risks

Health, Safety and Environment (“HSE”)

The oil and gas industry by its nature conducts

activities, which can cause health, safety and

environmental incidents. Serious incidents

can have not only a financial impact but can

also damage the Group’s reputation and the

opportunity to undertake further projects.

The Group maintains a HSE management system in place

and demands that management, staff and contractors

adhere to it. The system ensures that the Group meets

Ukrainian legislative standards and, for the CO2 emissions

the British standards and achieves international

standards to the maximum extent possible.

Management systems and processes have been certified

as ISO 14001 and ISO 45001 compliant.

Climate change

After the Paris Agreement (COP 21) the

international community is committed to

reduce greenhouse gas emissions to slow

down the climate change and contain its

effects. Countries may impose moratorium

A moratorium on domestic production is deemed highly

unlikely in Ukraine given the country’s need for

affordable energy. Such risks exist in Italy. The Italian

moratorium ended in 2021. Exploenergy, Cadogan’s

subsidiary has been obtaining, in 2023, the status of

CADOGAN ENERGY SOLUTIONS PLC

Risks and uncertainties (continued)

on E&P activities or enact tight limits to

emissions level, which may curtail

production. Shareholders may also request

that the Company adopt stringent targets in

terms of emissions reduction.

qualified gas operator and its projects validated by the

Ministry for Environment and Energy Transition in 2024.

The Group has adopted a strategy allowing to provide,

sustainability for its existing oil production activities and,

to develop new activities along the energy value chain

with a lower impact on environment.

Management strives to reduce emissions in everything

the Group does and is implementing alternatives to offset

and/or mitigate emissions. In 2024, the Group purchased

green certificates, ensuring that the electricity consumed

for its operations and activities in Ukraine is entirely

sourced from renewable energy.

The Group has also developed its gas-to-power project on

its Blazhiv oil field in Ukraine. The aim of this project is to

capture the gas emissions during oil production and use

them to generate electricity to be sold on the market. This

project will allow to decrease significantly Cadogan’s

annual gas emissions deriving from its oil production

activities. The project will be operational in July 2025.

Furthermore, in 2024, the Group has accelerated its

development in the electricity market and has launched

investments for the development of several power

generation projects totalling an installed capacity of 12.3

MW to be operational in 2025.

In the future, the Group will continue to diversify its

activities by investing in new energy solutions activities

with a lower impact on environment.

Drilling and Work-Over operations

The technical difficulty of drilling or re-

entering wells in the Group’s locations and

equipment limitations can result in the

unsuccessful completion of the well.

The incorporation of detailed sub-surface analysis into a

robustly engineered well design and work programme,

with appropriate procurement procedures and

competent on-site management, aims to minimise risk.

Only certified personnel are hired to operate on the rig

floor. Contractor’s access to the operational sites is

allowed only after control of staff qualification and check-

up of appropriate technical condition of the equipment

and machinery.

Production and maintenance

There is a risk that production or

transportation facilities could fail due to non-

adequate maintenance, control or poor

performance of the Group’s suppliers.

All plants are operated and maintained at standards

above the Ukrainian minimum legal requirements.

Operative staff are experienced and receive

supplemental training to ensure that facilities are

properly operated and maintained. When not in use the

facilities are properly kept under conservation and

routinely monitored.

Service providers are rigorously reviewed at the tender

stage and are monitored during the contract period.

Sub-surface risks

The success of the business relies on accurate

and detailed analysis of the sub-surface. This

can be impacted by poor quality data, either

All externally provided and historic data is rigorously

examined and discarded when appropriate. New data

acquisition is considered, and appropriate programmes

CADOGAN ENERGY SOLUTIONS PLC

Risks and uncertainties (continued)

historic or recently gathered, and limited

coverage. Certain information provided by

external sources may not be accurate.

implemented, but historic data can be reviewed and

reprocessed to improve the overall knowledge base.

Agreements with qualified local and international

contractors have been entered into to supplement and

broaden the pool of expertise available to the Company.

Data can be misinterpreted leading to the

construction of inaccurate models and

subsequent plans.

All analytical outcomes are challenged internally and peer

reviewed. Analysis is performed using modern geological

software.

The area available for drilling operations is

limited due to logistics, infrastructures and

moratorium. This increases the risk for setting

optimum well coordinates.

Bottom hole locations are always checked for their

operational feasibility, well trajectory, rig type, and

verified on updated sub-surface models. They are

rejected if deemed to be too risky.

The Group may not be successful in proving

commercial production from its licenses and

consequently the carrying values of the

Group’s oil and gas assets may have to be

impaired.

The Group performs, on an annual basis, a review of its

oil and gas assets, impairs if necessary, and considers

whether to commission a review by a third party or a

Competent Person’s Report (“CPR”) from an independent

expert depending on the circumstances.

Financial risks

The Group is at risk from changes in the

economic environment both in Ukraine and

globally, which can cause foreign exchange

movements, changes in the rate of inflation

and interest rates and lead to credit risk in

relation to the Group’s key counterparties.

The martial law in Ukraine forbids the transfer

of cash outside of Ukraine. The cash held in

Ukraine must be held in the local currency

(Hryvna).

The decrease of the value of the Hryvna is a

major risk on the cash held by the Group in

Ukraine. Since the martial law in Ukraine,

there is an obligation to keep the cash held by

Cadogan in Ukraine in Hryvna with period

restrictions for transfers out of the country.

In February 2019, Cadogan entered into a 2-

year Loan Agreement (Euros 13.385 million)

with Proger Management & Partners with a

Call Option that could be exercised by

Cadogan, between September 2019 and

February 2021, with no obligation, allowing a

33 % equity interest in Proger Ingegneria. This

represented a key transaction and element of

the Group balance sheet. At 25 February 2021,

being the Maturity Date, Cadogan did not

exercise its Call Option and PMP must

reimburse Euros 14,857,350. At the end of

Revenues in Ukraine are received in hryvnia and

expenditure is made in Hryvnia.

The Group continues to hold most of its cash reserves in

the UK mostly in GBP, USD and Euro. Cash reserves are

placed with leading financial institutions, which are

approved by the Audit Committee. Before the war in

Ukraine, foreign exchange risk was considered a normal

and acceptable business exposure, and the Group did not

hedge against this risk for its E&P operations. The Group

is currently analysing different options.

This Loan Agreement has led to controversy with several

litigation procedures.

In September 2024, the parties agreed to suspend the

procedures and find an amicable settlement. This was

done, and a Settlement Agreement was signed on 12

December 2024. After receiving 10 million euros in a single

instalment in January 2025, Cadogan exited from the

above-mentioned contracts, ended all the litigations

procedures and dissolved the pledge over the

corresponding shares in Proger Ingegneria. The risks and

uncertainties deriving from the Loan Agreement no longer

exist at the date of this report. In January 2025, Cadogan

received the 10 million euros.

CADOGAN ENERGY SOLUTIONS PLC

Risks and uncertainties (continued)

March 2021, PMP did not reimburse and

asked for an arbitration to get the Loan

Agreement recognised as an equity

investment contract.

Refer to note 28 to the Consolidated Financial Statements

for detail on financial risks.

The Group is at risk that counterparties will

default on their contractual obligations

resulting in a financial loss to the Group.

Procedures are in place to scrutinize new counterparties

via a Know Your Customer (“KYC”) process, which covers

their solvency. In addition, when trading gas, the Group

seeks to reduce the risk of customer non-performance by

limiting the title transfer to product until the payment is

received, prepaying only to known credible suppliers.

The Group is at risk that fluctuations in gas

prices will have a negative result for the

trading operations resulting in a financial loss

to the Group.

The Group mostly enters back-to-back transactions

where the price is known at the time of committing to

purchase and sell the product. Sometimes the Group

takes exposure to open inventory positions when justified

by the market conditions in Ukraine, which is supported

by analysis of the specific transactions, market trends and

models of the gas prices and foreign exchange rate

trends.

Country risks

Legislative changes may bring unexpected risk

and create delays in securing licenses or

ultimately prevent licenses and license

renewals /conversions from being secured.

Compliance procedures, monitoring and appropriate

dialogue with the relevant authorities are maintained to

minimise the risk. In all cases, deployment of capital in

Ukraine is limited and investments are kept at the level

required to fulfil license obligations.

Other risks

The Group's success depends upon skilled

management as well as technical and

administrative staff. The loss of service of

critical members from the Group's team could

have an adverse effect on the business.

The Group periodically reviews the compensation and

contract terms of its staff in order to remain a competitive

employer in the markets where it operates.

The Group is at risk of underestimating the risk

and complexity associated with the entry into

new business and/or new countries.

The Group applies rigorous screening criteria to evaluate

potential investment opportunities. It also seeks input

from independent and qualified experts when deemed

necessary. Additionally, the required rate of return is

adjusted to the perceived level of risk.

Local communities and stakeholders may

cause delays to the project execution and

postpone activities.

The Group maintains a transparent and open dialogue

with authorities and stakeholders (i) to identify their

needs and propose solutions which address them as well

as (ii) to illustrate the activities which it intends to

conduct and the measures to mitigate their impact. Local

needs and protection of the environment are always

taken into consideration when designing mitigation

measures, which may go beyond the legislative minimum

requirement.

The Group devotes the highest level of attention and

engage qualified consultants to prepare the

Environmental Impact Assessment studies and to attend

public hearings, both introduced in Ukraine in 2019.

CADOGAN ENERGY SOLUTIONS PLC

Statement of Reserves and Resources

In 2024, the company conducted routine rig-less production support activities at the Blazhiv-1, Blazhiv-3 and

Blazhiv-Monastyrets-3 and Blazhiv-10 wells to maintain sustainable production using sucker rod pumping

systems.

Summary of Reserves

at 31 December 2024

Mmboe

Proved, Probable and Possible Reserves at 1 January 2024

3.05

Production

0,13

Proved, Probable and Possible Reserves at 31 December 2024

2.92

1 The new study was completed end of February 2024 by Brend Vik LTD LLC.

In addition to the tabled reserves, Cadogan has 0.64 million boe of 2C contingent resources associated with

the Blazhiv license.

CADOGAN ENERGY SOLUTIONS PLC

Corporate Responsibility

Under Section 414C of the Companies Act 2006 (the “Act”), the Board is required to disclose information

about environmental matters, employees, human rights and community issues, including information about

any policies it has in relation to these matters and the effectiveness of these policies.

Being sustainable in our activities means conducting our business with respect for the environment and for

the communities hosting us, with the aim of increasing the benefit and value to our stakeholders. We

recognise that this is a key element to be competitive and to maintain our license to operate.

The Board recognises that the protection of the health and safety of its employees, the communities, and

the environment in which it operates is not just an obligation but is part of the personal ethics and beliefs of

management and staff. These are the key drivers for a sustainable development of the Company’s activity.

Cadogan Energy Solutions, its management and employees are committed to continuously improve Health,

Safety and Environment (HSE) performance; follow our Code of Ethics and apply, in conducting our

operations, internationally recognised best practices and standards.

Our activities are carried out in accordance with a policy manual, endorsed by the Board, which has been

disseminated to all staff. The manual includes a “Working with Integrity” policy and policies on “business

conduct and ethics”, “anti-bribery”, “acceptance of gifts and hospitality” and “whistleblowing”. Such policies

are subject to regular review.

In August 2018, Cadogan Ukraine LLC obtained ISO 14001 and ISO 45001 certifications for the following

scope: “Supervision, coordination, management support, control in the field of oil and gas onshore

exploration and production”. This provides formal recognition of the process embedded in the Company and

demonstrates the commitment and efforts delivered by our employees and management. It is considered a

baseline to continue with the efforts to improve the way we conduct the business. These certifications have

been renewed every year since then.

The Board believes that health and safety procedures, and training across the Group should be in line with

best practice in the oil and gas sector. Accordingly, it has set up a committee to review and agree on the

health and safety initiatives for the Company and to report back to the Board on the progress of these

initiatives. Management regularly reports to the Board on HSE and key safety and environmental issues,

which are discussed at the Executive Management level. The report of the Health, Safety and Environment

Committee can be found on page 42 to 43.

The General Director of Cadogan Ukraine is presently the acting Chairman of the HSE Committee and is

supported in his role by Cadogan Ukraine’s HSE Manager. In accordance with the ISO 14001 and ISO 45001,

his role is to ensure that the Group continuously develops suitable procedures, that operational management

and their teams incorporate them into daily operations and that the HSE management has the necessary

level of autonomy and authority to discharge their duties effectively and efficiently.

Health, safety and environment

2024 remained extremely challenging due to the Russian invasion of Ukraine and the resulting subsequent

war. Since February 2022, Cadogan has been applying measures to mitigate the risks of personnel injuries

and loss of well control. Kiev office personnel have been working in the combined office-remote work regime

with precise execution of air alert safety requirements, on-field staff as well as all offices have been equipped

with satellite means of communication, established internal emergency committee that coordinated the

work and liaising with company management of the daily basis. Two employees have been demobilized from

the army during 2024, none remained serving.

The Group has implemented an integrated HSE management system in accordance with the ISO

requirements. The system aims to ensure that a safe and environmentally friendly/protection culture is

embedded in the organization with a focus on the local community involvement. The HSE management

system ensures that both Ukrainian and international standards are met, with the Ukrainian HSE legislation

requirements taken as an absolute minimum. All the Group’s local operating companies actively participate

CADOGAN ENERGY SOLUTIONS PLC

Corporate Responsibility

in the process. ISO 14001 and ISO 45001 certification were re-validated by the respective authority in August

2024 for a new term.

A proactive approach based on a detailed induction process and near miss reporting has been in place

throughout 2024 to prevent incidents. Staff training on HSE matters and discussions on near miss reporting

are recognised as the key factors to continuously improve. In-house training is provided to help staff meet

international standards and follow best practice. The process enacted by the certification, enhances

attention to training on risk assessments, emergency response, incident prevention, reporting and

investigation, as well as emergency drills regularly run-on operations’ sites and offices. This process is

essential to ensure that international best practices and standards are maintained to comply with, or exceed,

those required by Ukrainian legislation, and to promote continuous improvement.

The Board monitors the main Key Performance Indicators (lost time incidents, mileage driven, training

received, CO2 emissions) as business parameters. The Board has benchmarked safety performance against

the HSE performance index measured and published annually by the International Association of Oil and Gas

Producers. In 2024, the Group recorded over 153,000 man-hours worked with no incidents and over

1,870,000 hours have been worked since the last injury in February 2016.

During 2024, the Group continued to monitor its greenhouse gas emissions and collect statistical data relating

to the consumption of electricity, industrial water and fuel consumption by cars, plants, and other work sites,

recording a continuous improvement in the efficient use of resources.

Employees

Wellness and professional development are part of the Company’s sustainable development policy and

wherever possible, local staff are recruited. The Group’s activity in Ukraine is managed by local staff. Qualified

local contractors are engaged to supplement the required expertise when and to the extent it is necessary.

Procedures are in place to ensure that recruitment is undertaken on an efficient, open, transparent, and fair

basis with no discrimination against applicants. Each operating company has its own Human Resources

function to ensure that the Group’s employment policies are properly implemented and followed. The

Group’s Human Resources policy covers key areas such as equal opportunities, wages, overtime and non-

discrimination. As required by Ukrainian legislation, Collective Agreements are in place with the Group’s

Ukrainian subsidiary companies, which outline agreed level of staff benefits and other safeguards for

employees.

All staff are aware of the Group’s grievance procedures. All employees have access to health insurance

provided by the Group to ensure that all employees have access to adequate medical facilities.

Each employee’s training needs are assessed on an individual basis to ensure that the skills are adequate to

support the Group’s operations, and to help them to develop.

Diversity

The Board recognises the benefits and importance of diversity (gender, ethnic, age, sex, disability,

educational and professional backgrounds, etc.) and strives to apply diversity values across the business. We

endeavour to employ a skilled workforce that reflects the demographic of the jurisdictions in which we

operate. The board review the existing policies on a regular basis and intends to develop a diversity policy.

The Board of Directors acknowledges the significance of diversity in decision-making and the overall success

of the company. As such, the company actively collects data on the various dimensions of diversity

mentioned, including but not limited to gender, ethnicity, age, and professional backgrounds. This data is

gathered through internal surveys, recruitment processes, and employee feedback mechanisms to ensure a

diverse and inclusive workplace.

CADOGAN ENERGY SOLUTIONS PLC

Corporate Responsibility

Board diversity

Until 21 June 2024, the Board consisted of four male and one female director of three different nationalities

and resident in four different jurisdictions. Since then, the Board consisted of five male and one female

director of four different nationalities and resident in five different jurisdictions.

The Board recognises that gender is only one aspect of diversity, and there are many other attributes and

experiences that can improve the Board’s ability to act effectively. Our policy is to search for the highest

quality people with the most appropriate experience for the requirements of the business, be they men or

women.

Gender diversity

The Board of Directors of the Company comprised of six Directors as of 31 December 2024.

As at the date of this report, the Company does not meet the FCA's recommended target of at least 40%

women on the board. The current board comprises six directors, of whom one is a woman, representing less

than 20% female representation.

As a smaller company with and a correspondingly lean governance structure, the board has historically

prioritised experience directly aligned with the Company's market and operational requirements.

We recognise the importance of gender diversity in contributing to a broad range of perspectives and

effective decision-making. While we currently do not meet the 40% threshold, we are committed to

improving diversity across the organisation. Gender diversity has always been included as a consideration

within our board succession planning framework and reviewed by the Nomination Committee as and when

new directors are appointed to the Board.

The appointment of any new Director is made based on merit. See pages 26 and 27 for more information on

the composition of the Board.

As at 31 December 2024, the Company comprised a total of 76 persons, as follows:

Male

Female

Non-executive directors

Executive director

Management, other than Executive directors

Other employees

Total

Human rights

Cadogan’s commitment to the fundamental principles of human rights is embedded in our HSE policies and

throughout our business processes. We promote the core principles of human rights pronounced in the UN

Universal Declaration of Human Rights and our support for these principles is embedded throughout our

Code of Conduct, our employment practices and our relationships with suppliers and partners wherever we

do business.

Community

The Group’s operational activities are carried out in rural areas of Ukraine and the Board is aware of its

responsibilities to the local communities in which it operates and from which some of the employees are

recruited. On our operational sites, management work with the local councils to ensure that the impact of

operations is as low as practicable by putting in place measures to mitigate their effect. Projects undertaken

include improvement of the road infrastructure in the area, which provides easier access to the operational

sites while at the same time minimizing inconvenience for the local population and allowing improved road

communications in the local communities, especially during winter season or harsh weather conditions.

CADOGAN ENERGY SOLUTIONS PLC

Corporate Responsibility

Specific community activities are undertaken for the direct benefit of local communities. All activities are

followed and supervised by managers who are given specific responsibility for such tasks.

The Group’s companies in Ukraine see themselves as part of the community and are involved and offer

practical help and support. All these activities are run in accordance with our “Working with Integrity” policy

and procedures. The recruitment of local staff generates additional income for areas that otherwise are

predominantly dependent on the agricultural sector.

The enactment in 2018 of a new legislation which introduces Environmental Impact Assessment studies and

public hearings as part of the license’s award/renewal processes was anticipated effectively by the Group.

The Group is complying with these requirements, building on the recognised competence of its people and

advisors as well as on the good communication and relations established with local communities.

Cadogan is committed to the territory and the communities where it operates and has fully financed social

programs commitment for 2024 as per signed Memorandum between the Company, Lviv Regional

Administration and local communities in 2019.

Approval

The Strategic Report was approved by the Board of Directors on 25 April 2025 and signed by order of the

Board by:

Ben Harber

Company Secretary

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Task Force on Climate-Related Financial Disclosures

Task force on climate-related financial disclosures (‘TCFD’)

Climate change remains one of the Group’s principal risks with governance over climate-related transition and

physical risks provided at the Board and operational levels. The Board of Directors recognizes the awareness of

Climate Change and the absolute need to understand its potential impacts on the oil and gas industry through

relevant disclosures as recommended by the Task Force on Climate-related Financial Disclosures (TCFD) and

those required by the Companies Act. The Group has complied with these requirements and has qualified and

quantified the risks and the opportunities within its strategy.

The Board has ultimate accountability for ensuring Cadogan maintains sound climate risk management and

internal control systems. The Board is ultimately accountable for Cadogan’s strategic response to climate

change and the energy transition. Directors are responsible for ensuring they remain sufficiently informed of

climate related risks to Cadogan and the broader energy sector. In November 2022, the Group has initiated this

transformation to achieve sustainability of its historic activities and adopted a new name “Cadogan Energy

Solutions” to reflect its ambition of being a more diversified energy operator. In 2023, the Group reviewed its

vision and strategy for its future business, and subsequently its administrative and operational process to

identify the areas of further improvement in the limitation of its environmental impact for the existing

activities and the development of new ones with a lower impact on environment. The Group decided to

minimize the CO2 emissions deriving from its oil production activities by investing in decarbonation project.

TCFD related disclosures

TCFD Disclosure Requirement

Cadogan Energy Solutions Disclosure

Additional

information

Governance

The Board’s oversight of

climate-related risks and

opportunities.

The Board of Directors is dedicated to achieving sustainability of

historic activities in oil and gas, and diversification in new

activities along the value chain with a lower impact on

environment as part of the Energy Transition framework. The

Board takes full responsibility for the governance of climate-

related risks and opportunities. The Group reviews

environmental and climate risk factors quarterly. A dedicated

Climate Task Force monitors key climate metrics and ESG

reporting.

p.12-15

Management’s role in assessing

and managing climate-related

risks and opportunities.

Management, led by the CEO, is responsible for executing the

climate strategy and ensuring compliance with climate

regulations. The CEO has wide expertise in Environment and

Energy Transition. He has led the activities of international

groups acting in the environment, the energy, and particularly

the renewable energy industries.

Through a combination of executive management, operations

management, HSE management, and financial reporting, the

Group regularly reviews its performance and the Group’s risks.

p.42-43

Strategy

The climate-related risks and

opportunities the organisation

has identified over the short,

medium, and long term.

Key risks include landslides, floods, infrastructure instability,

additional costs related to CO2 emissions and financial non

sustainability. Till 2023, the Group was focused on activities in

the oil and gas industry. However, as climate change becomes

p.4-11

p.25

CADOGAN ENERGY SOLUTIONS PLC

Task Force on Climate-Related Financial Disclosures

increasingly important globally, we consider these activites

alone to be unsustainable in the long term. On the short and

medium term, the existing operations in oil and gas are in

Ukraine. A moratorium on domestic production is deemed

highly unlikely given the country’s need for affordable energy.

However, to be able to ensure the sustainability of its historic

activities in the oil and gas, to allow the continuous generation

of cash-flow to finance its transformation in the Energy

Transition framework, in 2023, the Group adopted the strategy

based on decarbonation of these activities. Opportunities

include capturing methane and investing in technologies for an

effective use of this methane.

An investment has been launched for collecting the non-

commercial gas generated on Blazhiv field and using it to

produce electricity. Furthermore, in 2024, the Group adopted

the strategy based on diversifying its activities by entering in the

electricity generation industry. This business model will allow a

smooth transition to a lower impact on environment and

provides remedies to the potential climate-related transition

risks.

The impact of climate-related

risks and opportunities on the

organisation’s businesses,

strategy, and financial planning.

Cadogan Energy Solutions PLC acknowledges the evolving

nature of climate-related risks and opportunities and the

importance of robust scenario analysis. While this disclosure

provides a preliminary assessment of potential impacts, we

recognise the need for a more granular and data-driven

evaluation. Accordingly, we are committed to undertaking a

more in-depth assessment of the financial implications of

climate-related risks and opportunities across our operations

and strategy. We aim to enhance the level of detail and

comprehensiveness in our next reporting cycle, in line with best

practice and stakeholder expectations.

p. 4-11

p.12-15

p.25

The resilience of the

organization’s strategy, taking

into consideration different

climate-related scenarios,

including a 2°C or lower

scenario.

Under a 1.5°C scenario, oil demand may drop 30–40% by 2040.

As at 31 December 2024, the Group held working interest in one

conventional gas, condensate and oil exploration and

production license in the west of Ukraine (Blazhiv field). This

license will end in 2039. In 2023, Cadogan conducted full

hydrodynamic surveys on the four operated wells. In 2024, an

independent expert completed the re-assessment of reserves at

the Blazhiv field confirming 3.05 million boe of 3P reserves and

0.64 million boe of 2C contingent resources. The strategy

adopted by the Group for the sustainability of this activity,

through investment in decarbonation, together with a

sophisticated planning, reporting and continuous monitoring of

the HSE and the financial indicators allow keeping the resilience

of these activities under the different scenarios.

Cadogan Energy Solutions PLC recognises the importance of

testing the resilience of its business strategy under various

climate scenarios, including a 2°C or lower pathway. While this

disclosure outlines preliminary qualitative scenario analysis, we

are committed to developing a more detailed and quantitative

CADOGAN ENERGY SOLUTIONS PLC

Task Force on Climate-Related Financial Disclosures

assessment of climate-related scenario resilience. In the coming

reporting cycle, we aim to enhance the depth of our scenario

modelling, covering both transition and physical risks, and to

refine our strategic responses accordingly.

Risk management

Company’s processes for

identifying and assessing

climate-related risks

Climate risks are embedded in the ERM framework and

assessed at each operational site, especially in high-altitude

areas.

p.12-15

Company’s processes for

managing climate-related risks

Emergency response plans and infrastructure reinforcements

are in place to mitigate physical risks.

p.42-43

Processes for identifying,

assessing, and managing

climate-related risks are

integrated into the

organisation’s overall risk

management.

All climate risks are integrated into Cadogan’s enterprise risk

management system.

The principal climate-related

risks and opportunities arising in

connection with the company’s

operations, the time periods

over which these are assessed,

and the actual and potential

impacts on the company’s

business model and strategy.

Principal risks include physical risks such as landslides, floods,

forest fire and temperature variability that may disrupt

operations, and transition risks such as regulatory changes and

carbon pricing. Opportunities include emissions reduction,

energy efficiency, and potential access to green finance. Risks

and opportunities are assessed over short-term (1–3 years),

medium-term (3–10 years), and long-term (10+ years)

horizons. These factors influence Cadogan’s infrastructure

planning, investment decisions, and market positioning

strategy.

p.25

Metrics and targets

Metrics used by the

organisation to assess climate-

related risks and opportunities,

in line with its strategy and risk

management process

Cadogan tracks GHG emissions (Scope 1, 2, and where relevant

Scope 3), carbon intensity, and climate risk indicators like

landslide etc. In order to express the GHG emissions in relation

to a quantifiable factor associated with the Company's activities,

wellhead production of crude oil and natural gas has been

chosen as the normalisation factor for calculating the intensity

ratio. This will allow comparison of the Company’s performance

over time, as well as with other companies in the Company’s

peer group.

p.31-32

Targets used by the

organisation to manage climate-

related risks, opportunities, and

performances against targets.

Cadogan has set a target to reduce Scope 1 and Scope 2 GHG

emissions by 25% by 2030 compared to 2020 levels.

Performance is tracked annually using key performance

indicators (KPIs) such as:

- Total tonnes of CO₂e emissions (Scopes 1 and 2)

- Carbon intensity: tonnes CO₂e per barrel of oil equivalent (boe)

produced

- Energy efficiency ratio: energy consumption per boe

KPI calculations are based on internationally accepted

methodologies. The Greenhouse Gases Inventory considers the

effects of the six types of greenhouse gases (GHG), identified by

the Kyoto Protocol: carbon dioxide (CO2), methane (CH4),

nitrous oxide (N2O), hydrofluorocarbons (HFCs), sulphur

hexafluoride (SF6) and perfluorocarbons (PFCs). The unit with

p.42-43

CADOGAN ENERGY SOLUTIONS PLC

Task Force on Climate-Related Financial Disclosures

which the result of a carbon footprint study is expressed, is the

CO2 equivalent, which allows to compare the effects of different

gases, which can have different persistency in the atmosphere.

The normalisation occurs through a specific index called Global

Warming Potential (GWP), which varies according to the

considered time span. Data collection and calculation of GHG

emissions deriving from the activities of Cadogan are performed

according to the guidelines and international standards.

Progress toward targets is monitored internally and reported by

HSE committee on a regular basis.

In 2024, Cadogan has developed its gas-to-power project on its

Blazhiv oil field in Ukraine. The aim of this project is to capture

the gas emissions during oil production and use them to

generate electricity to be sold on the market. This project,

operational in 2025, will allow to decrease significantly

Cadogan’s annual emissions related to the oil production

activities with the intensity ratio emission to drop from 146 to

32 tons of CO2 e/Kboe on an annual basis. Furthermore, in

2024 the Group was able to buy green certificates to mitigate

the CO2 emissions generated by its operational activities.

Governance

As a company, we acknowledge the increasing significance of comprehending the effects of climate change on

our operating environment and its potential implications for our business.

We view this as a chance to expand upon our existing efforts in this area, enhance the quality of our disclosures,

and offer clear transparency, while continuing our TCFD reporting roadmap.

The Board recognizes the societal and investor focus on climate change and especially the potential impacts of

the oil and gas activities which constitute the historic activities of Cadogan before the launch of its

diversification activities. The climate-related risks and opportunities are at the center of Cadogan’s strategy. In

2023, the Board adopted the current strategy aiming to limit the impact of its oil production activities and to

mitigate the remaining ones. The Board takes full responsibility for the governance of climate-related risks and

opportunities. The CEO manages climate-related risks and opportunities. Through a combination of

management governance and reporting, regular reviews of the Group performance and the strategy

implementation are conducted, mitigation actions are developed where required in order to support the

Group’s initiatives to limit CO2 emissions and other impacts on the environment.

Strategy

In 2024, the Group invested in the infrastructure to collect the non-commercial gas produced on Blazhiv field,

previously released in the atmosphere and the generator to use them to produce electricity. Furthermore, the

Group bought green certificates to mitigate the impact of CO2 emissions related to its operational activities.

With the continuous improvement of operational margin in these activities, together with the additional

financial margin which will be generated by the gas-to-power project, Cadogan will be able to buy green

certificates on a regular basis to mitigate the impact of the CO2 emissions generated by its operational activities.

In 2024, the Group accelerated the transformation of its business model towards activities with a lower impact

on environment. Investments were launched for the development of new electricity generation projects which

will be operational in H2 2025. Subsequently, the business model will not be focused only on oil production as

the Group will be shifting towards a multi-energy business model.

CADOGAN ENERGY SOLUTIONS PLC

Task Force on Climate-Related Financial Disclosures

Risk Management

The Group maintains a HSE management system in place and demands that management, staff and

contractors adhere to it. The system ensures that the Group meets Ukrainian legislative standards and for

the CO2 emissions the British standards and achieves international standards to the maximum extent

possible. Daily parameters outcome on an operational control basis. These are monitored, reviewed and

reported to the HSE manager and to the management on a regular basis. Corrective actions are implemented

when necessary.

Detailed Breakdown of Climate-related Risks and Opportunities:

Risk description

Timeframe

Potential

Consequences

Business

Response

Mitigations /

Actions

Physical Risk

Landslides disrupting

production sites

Short to

Medium

Term

Operational

downtime, safety

risks, equipment

damage

Infrastructure

resilience

strategy

Geotechnical

monitoring, site

hardening, early

warning systems

Flooding due to

changing precipitation

patterns

Medium to

Long Term

Asset damage,

production halts,

regulatory fines

Flood risk

modelling and

preparedness

planning

Drainage upgrades,

seasonal operations

scheduling, flood

insurance

Transition Risk

Regulatory changes such

as new carbon pricing

mechanisms

Medium

Term

Increased

operational costs,

margin pressure

Regulatory

tracking and cost

modelling

Carbon efficiency

projects: the gas-to-

power investment

implementation

Market shift towards

renewables reducing oil

demand

Long Term

Revenue decline,

asset stranding

Strategic

diversification

Investment in

renewables,

offsetting, portfolio

transition

Opportunity

Methane capture and

utilisation technologies

Short Term

Revenue

generation,

reduced GHG

footprint

Technology

partnerships and

feasibility studies

The gas-to-power

investment

implementation

Increased demand for

low-carbon energy in

Europe

Medium to

Long Term

Market expansion,

new revenue

streams

New opportunity

investment road-

mapping

Feasibility studies

into low-carbon

technologies and

green technologies.

Metrics and targets

The principal methodology used to calculate the emissions is drawn from the ‘Environmental Reporting

Guidelines: including mandatory greenhouse gas emissions reporting guidance (June 2013)’, issued by the

Department for Environment, Food and Rural Affairs (“DEFRA”) and DEFRA GHG conversion factors for

company reporting were utilised to calculate the CO2 equivalent of emissions from various sources (2024

update). Also, the used methodology was also updated based on methods proposed by DNV GL and in of GHG

emissions Inventory referring to the following guidelines and international standards.

The gas-to-power investment will allow a significant drop in the intensity ratio from 146 to 32 for the existing

oil production activities on a full year basis.

CADOGAN ENERGY SOLUTIONS PLC

Board of Directors

Directors

Fady Khallouf, 64, French

Chief Executive Officer

Fady Khallouf was appointed as Director and CEO on 15 November 2019. He has more than 35-year experience

in the energy, the environment, the engineering, and the infrastructure sectors. He has previously held the

position of CEO of FUTUREN (Renewable Energy, listed on Euronext Paris) where he achieved the restructuring

and the turnaround of the group. Prior to that, he was the CEO of Tecnimont group (Petrochemicals and Oil &

Gas), the Vice-President Strategy and Development of EDISON group (Electricity and Gas, E&P), the Head of

M&A of EDF group (Energy). Fady Khallouf had beforehand held various management positions at ENGIE

(Energy), Suez (Environmental Services), and DUMEZ (Construction and Infrastructures).

Michel Meeus, 72, Belgian

Non-Independent Non-Executive Interim Chairman

Michel Meeus was appointed as a Non-executive Director on 23 June 2014. Mr. Meeus was former Chairman

of the Board of Directors of Theolia, an independent international developer and operator of wind energy

projects. Since 2007, he has been a director within the Alcogroup SA Company (which gathers the ethanol

production units of the Group), as well as within some of its subsidiaries. Before joining Alcogroup, Mr Meeus

carved out a career in the financial sector, at Chase Manhattan Bank in Brussels and London, then at Security

Pacific Bank in London, then finally at Electra Kingsway Private Equity in London.

Mr Meeus is currently Chairman of the Remuneration and Nomination Committees.

Lilia Jolibois, 60, American

Independent Non-Executive Director

Lilia Jolibois was appointed as Director on 15 November 2019. She is currently a member of three Boards:

Cadogan Energy Solutions Plc, INSEAD Foundation, and Tremau SA. She is also a Venture and CEO Advisor at

Loyal Venture Capital, a global VC fund. Her career spans Merrill Lynch Investment Banking, Sara Lee, and

Lafarge in the USA and Europe. At Lafarge Group, Ms. Jolibois served in numerous positions in finance, strategy,

business development, CEO and Chair of the Board for Lafarge Cement and Gypsum in Ukraine, and SVP and

Chief Marketing-Sales-Supply Chain Officer for Lafarge Aggregates, Asphalt & Paving.

Mrs Jolibois is currently Chairman of the Company’s Audit Committee and a member of the Remuneration

and Nomination Committees.

Gilbert Lehmann, 79, French

Senior Independent Non-Executive Director

Gilbert Lehmann was appointed to the Board on 18 November 2011. He was an adviser to the Executive

Board of Areva, the French nuclear energy business, having previously been its Deputy Chief Executive Officer

responsible for finance. He is also a former Chief Financial Officer and deputy CEO of Framatone, the

predecessor to Areva, and was CFO of Sogee, part of the Rothschild Group. Mr Lehmann was also Deputy

Chairman and Chairman of the Audit Committee of Eramet, the French minerals and alloy business. He is

Deputy Chairman and Audit Committee Chairman of Assystem SA, the French engineering and innovation

consultancy. He was Chairman of ST Microelectronics NV, one of the world’s largest semiconductor

companies, from 2007 to 2009, and stepped down as Vice Chairman in 2011.

Mr Lehmann is currently a member of the Remuneration and Nomination Committees.

CADOGAN ENERGY SOLUTIONS PLC

Report of the Directors

Charles Mack, 65, British

Independent Non-Executive Director

Charles Mack is both an advocate and a certified insolvency practitioner focused on cross-border restructuring

cases. He has been appointed as administrator, liquidator and CRO manager in several national/international

medium size as well as large companies. He is a member of the bar in both Munich and Padova and a Registered

European Lawyer at the Bar of England & Wales. Charles has been with Studio Legale Trabucchi since he passed

his law examinations and a partner since 2000 and has been a partner with White & Case as well as Brinkmann

Partners in Germany. He is currently a member of the board of TMA Europe and a former president of Insol

Europe.

Mr Mack is currently a member of the Audit, Remuneration and Nomination Committees.

Thibaut de Gaudemar, 64, French

Independent Non-Executive Director

Thibaut de Gaudemar has more than 35 years of experience in investment banking working for prominent

international financial institutions in London. His last position was Vice Chairman of Capital Markets for EMEA

at Credit-Suisse. He previously co-managed the Global Markets Solution Group, which encompassed Equity

Capital Markets, Debt Capital Markets, Leveraged Finance and Derivatives. He was a member of the Global and

the European Investment Banking Committees. Prior to joining Credit-Suisse in 2005, he was a Managing

Director at Deutsche Bank and Bankers Trust in charge of the Strategic Equity Derivative Business in Europe.

Mr de Gaudemar is currently a member of the Audit, Remuneration and Nomination Committees.

Directors

The Directors in office during the year and to the date of this report are as shown below:

Non-Executive Directors Executive Director

Michel Meeus (Chairman) Fady Khallouf

Gilbert Lehmann

Lilia Jolibois

Charles Mack (appointed 21 June 2024)

Thibaut de Gaudemar (appointed 21 June 2024)

Jacques Mahaux (resigned 19 April 2024)

Directors’ re-election

The Board has decided previously that all Directors are subject to annual election by shareholders, in

accordance with industry best practice and as such, all Directors will be seeking re-election at the Annual

General Meeting to be held on 20 June 2025.

The biographies of the Directors in office at the date of this report are shown on pages 26 and 27.

CADOGAN ENERGY SOLUTIONS PLC

Report of the Directors (continued)

Appointment and replacement of Directors

The Company’s Articles of Association allow the Board to appoint any individual willing to act as a director either

to fill a vacancy or act as an additional Director. The appointee may hold office only until the next annual general

meeting of the Company whereupon his or her election will be proposed to the shareholders.

The Company’s Articles of Association prescribe that there shall be no fewer than three Directors and no more

than fifteen.

Directors’ interests in shares

The beneficial interests of the Directors in office at 31 December 2024 and their connected persons in the

Ordinary shares of the Company at 31 December 2024 are set out below.

Director

Number of

Michel Meeus

26,023,651

Fady Khallouf

17,454,105

Gilbert Lehmann

Lilia Jolibois

Charles Mack

Thibaut de Gaudemar

Jacques Mahaux

Conflicts of Interest

The Company has procedures in place for managing conflicts of interest. Should a director become aware that

they, or any of their connected parties, have an interest in an existing or proposed transaction with the

Company, its subsidiaries or any matters to be discussed at meetings, they are required to formally notify the

Board in writing or at the next Board meeting. In accordance with the Companies Act 2006 and the Company’s

Articles of Association, the Board may authorize any potential or actual conflict of interest that may otherwise

involve any of the directors breaching his or her duty to avoid conflicts of interest. All potential and actual

conflicts approved by the Board are recorded in register of conflicts, which is reviewed by the Board at each

Board meeting.

Directors’ indemnities and insurance

The Company’s Articles of Association provide that, subject to the provisions of the Companies Act 2006, all

Directors of the Company are indemnified by the Company in respect of any liability incurred in connection with

their duties, powers or office. Save for such indemnity provisions, there are no qualifying third-party indemnity

provisions. In addition, the Company continues to maintain Directors’ and Officers’ Liability Insurance for all

Directors who served during the year.

Powers of Directors

The Directors are responsible for the management of the business and may exercise all powers of the Company

subject to UK legislation and the Company’s Articles of Association, which includes powers to issue or buy back

the Company’s shares given by special resolution. The authorities to issue and buy back shares, granted at the

2024 Annual General Meeting, remains unused.

Dividends

The Directors do not recommend payment of a dividend for the year ended 31 December 2024 (2023: nil).

CADOGAN ENERGY SOLUTIONS PLC

Report of the Directors (continued)

Principal activity and status

The Company is registered as a public limited company (registration number 05718406) in England and Wales.

The principal activity and business of the Company is oil and gas exploration, development and production.

Subsequent events

In January 2025, Cadogan received the 10,000,000 € cash as agreed in the Settlement Agreement signed in

December 2024. Subsequently, Cadogan exited from the Loan Agreement and engaged the necessary actions

to stop all the litigation procedures in course. Proger Management & Partners, Proger Ingegneria, MA.LO.,

and TIFS Partecipazioni, did the same.

In February 2025, Cadogan Energy Solutions plc issued 7,000,000 new ordinary shares of £0.03 each, in the

capital of the Company for cash on the basis of £0.03 per share to the CEO, Mr Fady Khallouf, to be satisfied

in full using 50% of the amount of the bonus due relating to the recovery of the loan to Proger Management

& Partners srl and approved by shareholders at the Annual General Meeting held on 25 June 2021. Following

the issue of the new ordinary shares, the total number of ordinary shares in issue is 251,128,487. As there

are 66 ordinary shares held in treasury, the total number of voting rights in the Company is 251,128,421.

In April 2025, Astroinvest Energy, a fully owned subsidiary in Ukraine entered in negotiations, with one of the

main banks in Ukraine, for a 5-year non-recourse credit line loan (up to € 7.0 M) aiming to finance part of the

investment for the power generation projects in 2025.

Structure of share capital

The authorised share capital of the Company is currently £30,000,000 divided into 1,000,000,000 Ordinary

shares of 3 pence each. The number of shares in issue as at 31 December 2024 was 244,128,487 Ordinary shares

(each with one vote) with a nominal value of £7,323,854.61. The total number of voting rights in the Company

is 244,128,421. The Companies (Acquisition of Own Shares) (Treasury Shares) Regulations 2003 allow

companies to hold shares in treasury rather than cancel them. Following the consolidation of the issued capital

of the Company on 10 June 2008, there were 66 residual Ordinary shares, which were transferred to treasury.

No dividends may be paid on shares whilst held in treasury and no voting rights attached to shares held in

treasury. After the issue of 7,000,000 new ordinary shares in February 2025, the number of shares is now

251,128,487 ordinary shares. The total number of voting rights is now 251,128,421.

Rights and obligations of Ordinary shares

In accordance with applicable laws and the Company’s Articles of Association, holders of Ordinary shares are

entitled to:

• receive shareholder documentation including the notice of any general meeting;

• attend, speak and exercise voting rights at general meetings, either in person or by proxy; and

• a dividend, where declared and paid out of profits available for such purposes. On a return of capital

on a winding up, holders of Ordinary shares are entitled to participate in such a return.

Exercise of rights of shares in employee share schemes

None of the share awards under the Company’s incentive arrangements are held in trust on behalf of the

beneficiaries.

Agreements between shareholders

The Board is unaware of any agreements between shareholders, which may restrict the transfer of securities

or voting rights.

Restrictions on voting deadlines

The notice of any general meeting of the Company shall specify the deadline for exercising voting rights and

appointing a proxy or proxies to vote at a general meeting. To accurately reflect the views of shareholders,

where applicable it is the Company’s policy at present to take all resolutions at any general meeting on a poll.

CADOGAN ENERGY SOLUTIONS PLC

Report of the Directors (continued)

Following the meeting, the results of the poll are released to the market via a regulatory news service and

published on the Company’s website.

Substantial shareholdings

As at 31 December 2024 and 22 April 2025, being the last practicable date, the Company had been notified of

the following interests in voting rights attached to the Company’s shares:

31 December 2024

22 April 2025

Major shareholder

Number of

shares held

% of total

voting rights

Number of

shares held

% of total

voting rights

SPQR Capital Holdings SA

67,298,498

27.57

67,298,498

26.8

Mrs Veronique Salik

51,368,000

21.04

59,488,000

23.69

Mr Michel Meeus

26,023,651

10.66

26,023,651

10,36

Mr Fady Khallouf

17,454,105

7.15

24,454,105

9.74

Kellet Overseas Inc.

14,002,696

5.74

14,002,696

5.57

Mr Pierre Salik

8,120,000

3.32

Cynderella International SA

7,657,886

3.14

7,657,886

3.04

Amendment of the Company’s Articles of Association

The Company’s Articles of Association may only be amended by way of a special resolution of shareholders.

Disclosure of information to auditor

As required by section 418 of the Companies Act 2006, each of the Directors as at 25 April 2025 confirms that:

(a) so far as the Director is aware, there is no relevant audit information of which the Company’s auditor is

unaware; and

(b) the Director has taken all the steps that he ought to have taken as a Director to make himself aware of any

relevant audit information and to establish that the Company’s auditor is aware of that information.

Going concern

The Group’s business activities, together with the factors likely to affect its future development, performance,

and position, are set out on pages 12 to 15.

Having considered the Group’s financial position and its principal risks and uncertainties, including uncertainties

regarding the war in Ukraine. The Directors have a reasonable expectation that the Company and the Group

have adequate resources to continue in operational existence for the foreseeable future. Accordingly, they

continue to adopt the going concern basis in preparing the Consolidated and Company Financial Statements.

For further detail please refer to the detailed discussion of the assumptions outlined in note 3(b) to the

Consolidated Financial Statements.

Reporting year

The reporting year coincides with the Company's fiscal year, which is 1 January 2024 to 31 December 2024.

Financial risk management objectives and policies

The Company’s financial risk management objectives and policies including its policy for managing its exposure

of the Company to price risk, credit risk, liquidity risk and cash flow risk.

Management co-ordinates access to domestic and international financial markets and monitors and manages

the financial risks relating to the operations of the Group in Ukraine through internal risks reports, which

CADOGAN ENERGY SOLUTIONS PLC

Report of the Directors (continued)

analyse exposures by degree and magnitude of risks. These risks include commodity price risks, foreign

currency risk, credit risk, liquidity risk and cash flow interest rate risk. The Group does not enter into or trade

financial instruments, including derivative financial instruments, for speculative purposes.

Outlook

Future developments in the business of the Company are presented on pages 2 and 8.

Change of control – significant agreements

The Company has no significant agreements containing provisions, which allow a counterparty to alter and

amend the terms of the agreement following a change of control of the Company.

Should a change in control occur then certain Executive directors are entitled, within a period of six months

following the change of control, to a payment of salary and benefits equal to 24 months’ base salary plus

benefits plus bonus (if any).

Streamlined energy and carbon reporting

This section contains information on greenhouse gas (“GHG”) emissions required by the Companies Act 2006

(Strategic Report and Directors' Report).

Methodology

The principal methodology used to calculate the emissions is drawn from the ‘Environmental Reporting

Guidelines: including mandatory greenhouse gas emissions reporting guidance (June 2013)’, issued by the

Department for Environment, Food and Rural Affairs (“DEFRA”) and DEFRA GHG conversion factors for

company reporting were utilised to calculate the CO2 equivalent of emissions from various sources (2024

update). Also, the used methodology was also updated based on methods proposed by DNV GL and in of GHG

emissions Inventory referring to the following guidelines and international standards.

The Company has reported on all the emission sources required under the Regulations.

The Company does not have responsibility for any emission sources that are not included in its consolidated

statement.

Consolidation approach and organisation boundary

An operational control approach was used to define the Company's organisational boundary and responsibility

for GHG emissions. All material emission sources within this boundary have been reported upon, in line with

the requirements of the Regulations.

Scope of reported emissions

Emissions data from the sources within Scope 1 and Scope 2 of the Company's operational boundaries is

detailed below. This includes direct emissions from assets that fall within the Company’s organisational

boundaries (Scope 1 emissions), as well as indirect emissions from energy consumption, such as purchased

electricity and heating (Scope 2 emissions).

Scope 1 emissions in 2024 increased compared to the previous year (18,888 tons in 2024 vs 14,933 tons in

2023). This was caused by the increase of the annual oil production and associated gas production as well as

increase of greenhouse gas reporting conversion factors for Scope 1 components.

Conversely, Scope 2 emissions decreased in 2024 (76 tons in 2024 vs 111 tons in 2023), as a result of proactive

steps to reduce greenhouse gas emissions by purchasing green certificates, ensuring that the electricity

consumed for its operations in Ukraine is entirely sourced from renewable energy. Total emissions in 2024

were 18,964 tons versus 15,044 tons in 2023.

CADOGAN ENERGY SOLUTIONS PLC

Report of the Directors (continued)

Intensity ratio

In order to express the GHG emissions in relation to a quantifiable factor associated with the Company's

activities, wellhead production of crude oil and natural gas has been chosen as the normalisation factor for

calculating the intensity ratio. This will allow comparison of the Company’s performance over time, as well as

with other companies in the Company’s peer group.

The intensity ratio for E&P operations (same reporting perimeter) has increased to 146 tons CO

e/Kboe in 2024

vs 126,36 tons CO

e/Kboe in 2023 mainly due to increase in CH4/CO2 conversion factor (28 in 2024 vs 25 in

2023).

Total greenhouse gas emissions data for the year from 1 January to 31 December.

As previously mentioned in the report, the implementation of the electricity generation project utilising

associated gas will lead to a substantial reduction in the CO2 emissions into the atmosphere starting from

2025.

Greenhouse gas emissions source

E&P

2024

2023

Scope 1

Direct emissions, including combustion of fuel and operation of facilities

(tonnes of CO

equivalent)

18,888

14,933

Scope 2

Indirect emissions from energy consumption, such as electricity and heating purchased

for own use (tonnes of CO

equivalent)

111

Total (Scope 1 & 2)

18,964

15,044

Normalisation factor

Barrels of oil equivalent, net

129,272

119,057

Intensity ratio

Emissions reported above normalised to tonnes of CO

- per total wellhead production

of crude oil, condensates, and natural gas, in thousands of Barrels of Oil Equivalent, net

146.70

126.36

Energy consumption

The Company started in 2020 to monitor energy consumption in KwH.

2024

2023

% change

Ukraine

KwH

607,063

557,631

Energy efficiency ratio

KwH/boe

4.69

Energy consumption in the UK is immaterial.

CADOGAN ENERGY SOLUTIONS PLC

Report of the Directors (continued)

2025 Annual General Meeting

The 2025 Annual General Meeting (“AGM”) of the Company provides an opportunity to communicate with

shareholders and the Board welcomes their participation. Board members constantly strive to engage with

shareholders on strategy, governance, and a number of other issues.

The Board looks forward to welcoming shareholders to the AGM. The AGM notice will be issued to shareholders

well in advance of the meeting with notes to provide an explanation of all resolutions to be put to the AGM.

In addition, shareholder information will be enclosed as usual with the AGM notice to facilitate voting and

feedback in the usual way.

The Chairman of the Board and the members of its committees will be available to answer shareholder

questions at the AGM. All relevant shareholder information including the annual report for 2024 and any other

announcements will be published on our website – www.cadoganenergysolutions.com.

This Report of Directors comprising pages 27 to 33 has been approved by the Board and signed by the order of

the Board by:

Ben Harber

Company Secretary

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Corporate Governance Statement

This Corporate Governance Statement forms part of the Report of Directors

On 29 July 2024, entities which had a standard listing were moved into a new category called “transition”.

The rules of this category are based on the standard listing rules the Company was used to. As a Company

previously listed on the standard segment of the London Stock Exchange, it is not required to apply a specific

corporate governance code and, given its size, has elected not to do so. However, the Board of the Company is

committed to the highest standards of corporate governance and believe that the 2018 UK Corporate

Governance Code (“the Code”) issued by the Financial Reporting Council (“FRC”) provides a suitable benchmark

for the Company’s corporate governance framework.

This Statement outlines how Cadogan Energy Solutions plc (“Cadogan” or the “Company”) has applied the

relevant principles of the Code and complied with its provisions.

During the year under review, the Company complied with all the provisions of the Code, other than the

exceptions noted below or elsewhere in this statement:

• Provision 5 (Workforce Engagement): Given the size of the business, the Board does not consider it

appropriate to adopt the suggested methods outlined within the UK Corporate Governance Code 2018

to engage with its employees given the size of the Company. Employee engagement continues to be

undertaken by senior management and any issues are escalated to the Board through the Chief

Executive Officer. The Board believes that the arrangements in place are effective but will continue to

keep this under review.

• Provision 9 (regarding the independence criteria of the Chair on appointment): Under the 2018

Corporate Governance Code, the Company’s Chair during the year, Mr Michel Meeus, was not

considered to be independent given the size of his shareholding in the Company. Despite this, the Board

considered Mr Meeus to be independent in character, mindset and judgement.

• Provision 21 (Board Evaluation): Given the size of the Board it was felt that a board evaluation would

not provide added value however the Board will continue to assess this provision periodically.

Board Leadership and Company Purpose

The Board provides leadership and oversight, and its role is to ensure the long-term success of the Company by

implementing the Company’s strategy and business plan, overseeing its affairs, and providing constructive

challenge to management as they do this. In addition to this, the Board oversees financial matters, governance,

internal controls, and risk management.

The purpose of the Board is to:

• monitor Group activities to see that sustainable value is being created;

• evaluate business strategies and monitor their implementation;

• monitor and review the performance of management;

• provide accountability to shareholders through appropriate reporting and regulatory compliance;

• understand and ensure the management of operational business and financial risks to which the Group

is exposed; and

• ensure that the financial controls and systems of risk management are robust and defensible.

CADOGAN ENERGY SOLUTIONS PLC

Corporate Governance Statement (continued)

The Board comprises a Non-Independent Non-Executive Chairman, a Chief Executive Officer, and four

Independent Non-Executive Directors. The Board has appointed Mr Lehmann as the Senior Independent

Director, given Mr Lehmann’s tenure the Board remains confident that Mr Lehmann is independent. During the

year, the Nomination Committee reviewed the size and composition of the Board and its committees with

regard to increasing the number of independent non-executive directors and as a subsequence appointed two

new independent Non-Executive Directors to the Board.

The biographical details for each of the Directors and their membership of Committees are incorporated into

this report by reference and appear on pages 26 and 27.

The formal schedule of matters reserved for the Board’s decision is available on the Company’s website.

The Board recognises the importance of building strong relationships with stakeholders and understanding

their views in order to help the Company deliver its strategy and promote the development of the business

over the long-term. The Board is committed to having effective engagement with its stakeholders. Our section

172 statement can be found on page 39 which summarises the Board’s engagement with the Company’s main

stakeholders and some examples of how their views have been taken into account in the Board’s decision-

making.

The Company seeks to ensure that it always acts lawfully, ethically and with integrity. The Company has in place

the following policies which the Board reviews periodically:

• Code of Business Conduct and Ethics

• Anti-Bribery Policy

• Share Dealing Code

• Disclosure Policy

• Health, Safety and Environmental policies

The Company has procedures in place for managing conflicts of interest. Should a director become aware that

they, or any of their connected parties, have an interest in an existing or proposed transaction with the

Company, its subsidiaries or any matters to be discussed at meetings, they are required to formally notify the

Board in writing or at the next Board meeting. In accordance with the Companies Act 2006 and the Company’s

Articles of Association, the Board may authorize any potential or actual conflict of interest that may otherwise

involve any of the directors breaching his or her duty to avoid conflicts of interest. All potential and actual

conflicts approved by the Board are recorded in register of conflicts, which is reviewed by the Board at each

Board meeting.

Directors’ declarations of interests is a regular Board agenda item. A register of directors’ interests (including

any actual or potential conflicts of interest) is maintained and reviewed regularly to ensure all details are kept

up to date. Authorisation is sought prior to a director taking on a new appointment or if any new conflicts or

potential conflicts arise. New Directors are required to declare any conflicts, or potential conflicts, of interest

to the Board at the first Board meeting after his or her appointment. The Board believes that the procedures

established to deal with conflicts of interest are operating effectively.

CADOGAN ENERGY SOLUTIONS PLC

Corporate Governance Statement (continued)

Division of Responsibilities

The Directors possess a wide range of skills, knowledge and experience relevant to the strategy of the Company,

including financial, legal, governance, regulatory and industry experience as well as the ability to provide

constructive challenge to the views and actions of executive management in meeting agreed strategic goals

and objectives.

The roles and responsibilities of the Chairman and Chief Executive Officer are separate with a clear and formal

division of each individual’s responsibilities, which has been agreed and documented by the Board.

The Non-Executive Directors bring an independent view to the Board’s discussions and the development of its

strategy. Their range of experience ensures that management’s performance in achieving the business goals is

challenged appropriately. Ms Lilia Jolibois, Mr Charles Mack and Mr Thibaut de Gaudemar are considered by

the Board to be fully independent.

Mr Gilbert Lehmann, Senior Independent non-executive Director, has served on the Board for longer than 9

years since his appointment, however, the Board is of the view that he retains his independent judgement and

continues to make a valuable contribution to the Board.

Mr Michel Meeus, who is a significant shareholder is not considered independent as defined within the UK

Corporate Governance Code 2018, however the Board believes that Mr Michel Meeus is independent in

character and judgement and free from relationships or circumstances that could affect his judgement.

The Board has access to the advice of the company secretary.

Composition, Succession and Evaluation

The Company has established a nomination committee which leads the process for Board appointments by

identifying and nominating candidates for the approval of the Board to fill Board vacancies and making

recommendations to the Board on Board’s composition and balance. The Company’s Nomination Committee

Report can be found on pages 44 and 45.

Under the Company’s Articles of Association, all Directors must seek re-election by members at least once every

three years. However, the Board has agreed that all Directors will be subject to annual election by shareholders

in line with Corporate Governance best practice. Accordingly, all members of the Board will be standing for re-

election at the 2025 Annual General Meeting due to be held on 20 June 2025.

All Directors continue to be effective and have sufficient time available to perform their duties. The letters of

appointment for the Non-Executive Directors are available for review at the Registered Office and prior to the

Annual General Meeting. Each of the Non-Executive Directors independently ensures that they update their

skills and knowledge sufficiently to enable them to fulfil their duties appropriately.

The Chairman, in conjunction with the Company Secretary, plans the programme for the Board during the year.

While no formal structured continuing professional development program has been established for the non-

executive Directors, every effort is made to ensure that they are fully briefed before Board meetings on the

Company’s business. The agenda for Board and Committee meetings are considered by the relevant Chairman

and issued with supporting papers during the week preceding the meeting. For each Board meeting, the

Directors receive a Board pack including management accounts, briefing papers on commercial and operational

matters and major capital projects including acquisitions. The Board also receives briefings from key

management on specific issues.

CADOGAN ENERGY SOLUTIONS PLC

Corporate Governance Statement (continued)

Audit, Risk and Internal Control

The Board has delegated certain responsibilities to its committees including its Audit Committee. The

Company’s Audit Committee Report can be found on pages 40 to 41.

The role of the Audit Committee is to monitor the integrity of the Company’s financial reporting, to review the

Company’s internal control and risk management systems and to oversee the relationship with the Group’s

external auditors. The Audit Committee focuses particularly on compliance with legal requirements, accounting

standards and the rules of the Financial Services Authority. The Audit Committee will meet at least three times

a year with further meetings that are determined by the committee. Any member of the committee or the

external auditors may request any additional meetings they consider necessary.

The Directors are responsible for the Group’s system of internal control and for maintaining and reviewing its

effectiveness. The Group’s systems and controls are designed to safeguard the Group’s assets and to ensure

the reliability of information used both within the business and for publication. The Board has delegated

responsibility for the monitoring and review of the Group’s internal controls to the Audit Committee.

Systems are designed to manage, rather than eliminate the risk of failure to achieve business objectives and

can provide only reasonable, and not absolute assurance against material misstatement or loss.

The key features of the Group’s internal control and risk management systems that ensure the accuracy and

reliability of financial reporting include clearly defined lines of accountability and delegation of authority,

policies and procedures that cover financial planning and reporting, preparing consolidated financial

statements, capital expenditure, project governance and information security.

The key features of the internal control systems, which operated during 2024 and up to the date of signing the

Financial Statements are documented in the Group’s Corporate Governance Policy Manual and Finance

Manual. These manuals and policies have been circulated and adopted throughout the Group throughout the

period.

Day-to-day responsibility for the management and operations of the business has been delegated to the Chief

Executive Officer and senior management. Certain specific administrative functions are controlled centrally.

Taxation and treasury functions report to the Group Director of Finance who reports directly to the Chief

Executive Officer.

The legal function for Ukraine’s related assets and activities is managed by the General Counsel, who reports

to the General Director of Cadogan Ukraine. The Health, Safety and Environment functions report to the

Chairman of the HSE Committee, the HSE Committee Report can be found on pages 42 to 43. The Group does

not have an internal audit function. Due to the small scale of the Group’s operations at present, the Board does

not feel that it is appropriate or economically viable to have an internal audit function in place, however this

will be kept under review by the Audit Committee on an annual basis.

The Board has reviewed internal controls and risk management processes, in place from the start of the year

to the date of approval of this report. During its review the Board did not identify nor were advised of any

failings or weaknesses which it has deemed to be significant.

A summary of the principal risks facing the Company and the mitigating actions in place are contained on pages

12 to 15 of the annual report.

The Company’s going concern assessment is contained on page 30 of the annual report.

Further information on the work undertaken by the Committee during the year can be found on pages 40 to 41

of the annual report.

CADOGAN ENERGY SOLUTIONS PLC

Corporate Governance Statement (continued)

Remuneration

The Board has established a Remuneration Committee and the Company’s Remuneration Committee Report

can be found on pages 44 to 67 of the annual report.

The role of the Remuneration Committee is to determine and agree with the Board the broad policy for the

remuneration of executives and Senior Managers as designated, as well as for setting the specific remuneration

packages, including pension rights and any compensation payments of all executive Directors and the Chairman.

The Company’s remuneration policies and practices are designed to support its long-term strategy and promote

the long-term sustainable success of the Company.

Attendance at Meetings

Ten Board meetings took place during 2024. The attendance of those Directors in place at the year end at Board

and Committee meetings during the year was as follows:

Board

Audit

Committee

Nomination

Committee

Remuneration

Committee

No. Held

No. Attended:

M Meeus***

F Khallouf

n/a

L Jolibois

G Lehmann

n/a

C Mack*

T de Gaudemar*

J Mahaux **

*Appointed on 21 June 2024

** Resigned 19 April 2024

*** M Meeus was temporarily appointed to the Audit Committee upon the resignation of J Mahaux.

Responsibilities and membership of Board Committees

The Board has agreed written terms of reference for the Nomination Committee, Remuneration Committee,

Audit Committee and HSE Committee. The terms of reference for the Board Committees are published on

the Company’s website, www.cadoganenergysolutions.com, and are also available from the Company

Secretary at the Registered Office. A review of the Committees including their membership and activities of

all Board Committees is provided on pages 40 to 45.

Relations with shareholders

The Chairman and Executive Directors of the Company have a regular dialogue with analysts and substantial

shareholders. The outcome of these discussions is reported to the Board at quarterly meetings and discussed

in detail. Mr Lehmann, as the Senior Independent Director, is available to meet with shareholders who have

questions that they feel would be inappropriate to raise via the Chairman or Executive Directors.

The Annual General Meeting is used as an opportunity to communicate with all shareholders. In addition,

financial results are posted on the Company’s website, www.cadoganenergysolutions.com, as soon as they

are announced. The Notice of the Annual General Meeting is also contained on the Company’s website,

www.cadoganenergysolutions.com. It is intended that the Chairmen of the Nomination, Audit and

Remuneration Committees will be present at the Annual General Meeting. The results of all resolutions will

be published on the Company’s website, www.cadoganenergysolutions.com.

CADOGAN ENERGY SOLUTIONS PLC

Corporate Governance Statement (continued)

Directors’ section 172 statement

The disclosure describes how the Directors have regard to the matters set out in section 172(1)(a) to (f) and

forms the Directors’ statement required under section 414CZA of the Companies Act 2006.

The matters set out in section 172(1) (a) to (f) are that a Director must act in the way they consider, in good

faith, would be most likely to promote the success of the Company for the benefit of its members as a whole,

and in doing so have regard (amongst other matters) to:

(a) the likely consequences of any decision in the long term;

(b) the interests of the Company’s employees;

(d) the impact of the Company’s operations on the community and the environment;

(e) the desirability of the Company maintaining a reputation for high standards of business conduct; and

(f) the need to act fairly between members of the Company.

Being sustainable in our activities means conducting our business with respect for the environment and for

the communities hosting us, with the aim of increasing the benefit and value to our stakeholders. We

recognize that this is a key element to be competitive and to maintain our licence to operate.

Further details of how the Directors have regard to the issues, factors and stakeholders considered relevant

in complying with S 172 (1) (a)-(f), the methods used to engage with stakeholders and the effect on the

Group’s decision making can be found throughout the annual report and in particular page 38 (which outlines

how the Company engages with its stakeholders), pages 17 to 20 (which contains Cadogan’s corporate

responsibility statement), and pages 31 to 32 (which contains the Company’s report on greenhouse gas

emissions).

The Group has implemented an integrated HSE management system aiming to ensure a safe and

environmentally friendly culture in the organization (pages 17 to 18). However, regarding the environmental

sustainability of the Group’s activities, the Directors are fully aware of the need to direct future development

in new activities with a lower impact on environment (CEO outlook page 8, 31).

When assessing the Proger Loan, the Directors carefully considered the issues and decisions with their impact

on the Group and all its stakeholders (pages 7, 8, 18, 19).

The Board has a formal schedule of matters specifically reserved for its decision, including approval of

acquisitions and disposals, major capital projects, financial results, Board appointments, dividend

recommendations, material contracts and Group strategy. For each Board meeting, the Directors receive a

Board pack including management accounts, briefing papers on commercial and operational matters and

major capital projects including acquisitions. The Board also receives briefings from key management on

specific issues.

In particular, as a consequence of the invasion of Ukraine by Russia in February 2022, and the war situation

prevailing in Ukraine, the Board discussed the current situation and its consequences on the security of the

employees, the organisation of the operations in Ukraine and the potential impacts on its human, financial

and operational assets. The Group has been able to implement immediately emergency procedures with

safety and protection measures communicated to all employees and put in place for every location. Specific

measures have been put in place for the operations on site to ensure the human, the industrial and the

environmental safety. The Group is monitoring the situation daily and taking appropriate action to ensure

the safety and essential needs of employees.

CADOGAN ENERGY SOLUTIONS PLC

Board Committee Reports

Audit Committee Report

The Audit Committee is appointed by the Board, on the recommendation of the Nomination Committee, from

the Non-Executive Directors of the Group. The Audit Committee’s terms of reference are reviewed from time

to time by the Audit Committee and any changes are then referred to the Board for approval. The terms of

reference of the Committee are published on the Company’s website www.cadoganenergysolutions.com, and

are also available from the Company Secretary at the Registered Office. Two members constitute a quorum.

Responsibilities

▪ To monitor the integrity of the annual and interim financial statements, the accompanying reports to

shareholders, and announcements regarding the Group’s results;

▪ To review and monitor the effectiveness and integrity of the Group’s financial reporting and internal

financial controls;

▪ To review the effectiveness of the process for identifying, assessing and reporting all significant business

risks and the management of those risks by the Group;

▪ To oversee the Group’s relations with the external auditor and to make recommendations to the Board,

for approval by shareholders, on the appointment and removal of the external auditor;

▪ To consider whether an internal audit function is appropriate to enable the Audit Committee to meet its

objectives; and

▪ To review the Group’s arrangements by which staff of the Group may, in confidence, raise concerns about

possible improprieties in matters of financial reporting or other matters.

Governance

Ms Jolibois, Mr Meeus (partly), Mr Mack and Mr de Gaudemar (from 21 June till 31 December 2024) were

members of the Audit Committee during the period. The Audit Committee is chaired by Ms Jolibois who had

relevant financial experience within a major European company as well as holding several non-executive roles

in major international entities.

At the invitation of the Audit Committee, the Group Director of Finance and external auditor regularly attend

meetings. The Company Secretary attends all meetings of the Audit Committee.

The Audit Committee also meets the external auditor without management being present.

Activities of the Audit Committee

During the year, the Audit Committee discharged its responsibilities as follows:

Assessment of the effectiveness of the external auditor

The Committee has assessed the effectiveness of the external audit process. They did this by:

▪ Reviewing the 2024 external audit plan;

▪ Discussing the results of the audit including the auditor’s views on material accounting issues and key

judgements and estimates, and their audit report;

▪ Considering the robustness of the audit process;

▪ Reviewing the quality of the service and people provided to undertake the audit; and

▪ Considering their independence and objectivity.

Financial statements

The Audit Committee examined the Group’s consolidated and Company’s financial statements and, prior to

recommending them to the Board, considered:

• the appropriateness of the accounting policies adopted;

• reviewed critical judgements, estimates and underlying assumptions; and

• assessed whether the financial statements are fair, balanced and understandable.

CADOGAN ENERGY SOLUTIONS PLC

Board Committee Reports (continued)

Going concern

After making enquiries and considering the uncertainties described on pages 12 to 15, the Committee has a

reasonable expectation that the Company and the Group has adequate resources to continue in operational

existence for the foreseeable future and consider the going concern basis of accounting to be appropriate. For

further detail including the basis for the conclusion, please refer to the detailed discussion of the assumptions

outlined in note 3 (b) to the Consolidated Financial Statements.

Internal controls and risk management

The Audit Committee reviews and monitors financial and control issues throughout the Group including the

Group’s key risks and the approach for dealing with them. Further information on the risks and uncertainties

facing the Group are detailed on pages 106 to 109 and in note 28 to the financial statements.

External auditor

The Audit Committee is responsible for recommending to the Board, for approval by the shareholders, the

appointment of the external auditor.

The Audit Committee considers the scope and materiality for the audit work, approves the audit fee, and

reviews the results of the external auditor’s work. Following the conclusion of each year’s audit, it considers

the effectiveness of the external auditor during the process. An assessment of the effectiveness of the audit

process was made, considering reports from the auditor on its internal quality procedures. The Committee

reviewed and approved the terms and scope of the audit engagement, the audit plan and the results of the

audit with the external auditor, including the scope of services associated with audit-related regulatory

reporting services. Additionally, auditor independence and objectivity were assessed, considering the auditor’s

confirmation that its independence is not impaired, the overall extent of non-audit services provided by the

external auditor and the past service of the auditor.

Internal audit

The Audit Committee considers annually the need for an internal audit function and believes that, due to the

size of the Group and its current stage of development, an internal audit function will be of little benefit to the

Group.

Whistleblowing

The Group’s whistleblowing policy encourages employees to report suspected wrongdoing and sets out the

procedures employees must follow when raising concerns. The policy, which was implemented during 2008 is

reviewed periodically. The Group’s policies on anti-bribery, the acceptance of gifts and hospitality, and business

conduct and ethics are circulated to staff as part of a combined manual on induction with changes regularly

communicated.

Overview

As a result of its work during the year, the Audit Committee has concluded that it has acted in accordance with

its terms of reference and has ensured the independence and objectivity of the external auditor.

The Chairman of the Audit Committee will be available at the Annual General Meeting to answer any questions

about the work of the Audit Committee.

Lilia Jolibois

Chair of the Audit Committee

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Board Committee Reports (Continued)

Health, Safety and Environment Committee Report

The Health, Safety and Environment Committee (the ”HSE Committee”) is appointed by the Board, on the

recommendation of the Nomination Committee. The HSE Committee’s terms of reference are reviewed

annually by the Committee and any changes are then referred to the Board for approval. The terms of reference

of the Committee are published on the Company’s website www.cadoganenergysolutions.com, and are also

available from the Company Secretary at the Registered Office. Two members constitute a quorum, one of

whom must be a Director.

Governance

The Committee is chaired by Mr Andrey Bilyi (Cadogan Ukraine General Director) as acting Head of the HSE

Committee and its other member is Ms Snizhana Buryak (HSE Manager). The CEO attends meetings of the HSE

Committee as necessary. During 2024, the HSE Committee held four meetings to monitor the HSE risks and

activities across the business, following which actions were identified for the continuous improvement of the

various processes and the mitigation of risk.

Responsibilities

• To regularly maintain and implement the continuous improvement of the HSE Management System with

the aim of improving the Company’s performances;

• Assessments of the risks to employees, contractors, customers, partners, and any other people who

could be affected by the Group’s activities with the aim of reducing the global risk of the Group and

increasing its level of acceptability;

• Evaluate the effectiveness of the Group’s policies and systems for identifying and managing health, safety

and environmental risks within the Group’s operation;

• Assess the policies and systems within the Group for ensuring compliance with health, safety and

environmental regulatory requirements;

• Assess the performance of the Group with regard to the impact of health, safety, environmental and

community relations decisions and actions upon employees, communities and other third parties and

also assess the impact of such decisions and actions on the reputation of the Group and make

recommendations to the Board on areas for improvement;

• On behalf of the Board, receive reports from management concerning any fatalities and serious accidents

within the Group and actions taken by management as a result of such fatalities or serious accidents;

• Evaluate and oversee, on behalf of the Board, the quality and integrity of any reporting to external

stakeholders concerning health, safety, environmental and community relations issues; and

• Where it deems it appropriate to do so, appoint an independent auditor to review performance with

regard to health, safety, environmental and community relations matters and review any strategies and

action plans developed by management in response to issues raised and, where appropriate, make

recommendations to the Board concerning the same.

Activities of the Health, Safety and Environment Committee

The HSE Committee in discharging its duties reviewed and considered the following:

• Company activities execution and control over contractors services execution in line with Company

policies and HSE procedures;

• Monthly statistics and reports on the activity were regularly distributed to the CEO, Management and to

the members of the committee;

• Ensured that the implementation of new legislation and requirements were punctually followed-up and

promptly updated;

• Compliance with HSE regulatory requirements was ensured through discussion of the results of

inspections, both internal inspections and those carried out by the Authorities. The results of the

inspections and drills were analysed and commented to assess the need for corrective actions and/or

training initiatives;

CADOGAN ENERGY SOLUTIONS PLC

Board Committee Reports (Continued)

• A standing item was included on the agenda at every meeting to monitor monthly HSE performance, key

indicators and statistics allowing the HSE Committee to assess the Company’s performance by analysing

any lost-time incidents, near misses, HSE training and other indicators;

• Interaction with contractors, Authorities, local communities and other stakeholders were discussed

among other HSE activities;

• Compliance to ISO 14001 and ISO 45001 has been proved by the authorised third party auditor. Also, the

Company had its entire data calculation process as well as emissions measurement system re-validated

by a different independent third party; and

• Ensuring all the Observation and Actions requested by the Certification Body have been implemented.

Overview

The Company’s HSE Management System and the Guidelines and Procedures have been updated to fit with the

ISO requirements and are adequate for the proper execution of the Company’s operations.

As a result of its work during the year, the HSE Committee has concluded that it has acted in accordance with

its terms of reference.

CADOGAN ENERGY SOLUTIONS PLC

Board Committee Reports (Continued)

Nomination Committee Report

The Board delegates some of its duties to the Nomination Committee and appoints the members of the

Nomination Committee which are non-executive Directors of the Group. The membership of the Committee is

reviewed from time to time and any changes to its composition are referred to the Board for approval. The

terms of reference of the Nomination Committee are published on the Company’s website,

www.cadoganenergysolutions.com, and are available from the Company Secretary at the Registered Office.

Two members constitute a quorum.

Governance

Mr. Michel Meeus (Remuneration and Nomination Committee Chairman), Ms. Lilia Jolibois, and Mr. Gilbert

Lehmann, Mr, Charles Mack and Mr Thibaut de Gaudemar (Non-Executive Directors) are the members of the

Nomination Committee. The Company Secretary attends all meetings of the Nomination Committee.

Responsibilities

• To regularly review the structure, size and composition (including the skills, knowledge and experience)

required of the Board compared to its current position and make recommendations to the Board with

regard to any changes;

• Be responsible for identifying and nominating candidates to fill Board vacancies as and when they arise,

for the Board’s approval;

• Before appointments are made by the Board, evaluate the balance of skills, knowledge, experience and

diversity (gender, ethnic, age, sex, disability, educational and professional backgrounds, etc.) on the

Board and, in the light of this evaluation, prepare a description of the role and capabilities required for a

particular appointment; and

• In identifying suitable candidates, the Nomination Committee shall use open advertising or the services of

external advisers to facilitate the search and consider candidates from a wide range of backgrounds on

merit, ensuring that appointees have enough time available to devote to the position.

The Nomination Committee shall also make recommendations to the Board concerning:

• Formulating plans for succession for both executive and non-executive Directors and in particular for the

key roles of Chairman and Chief Executive Officer;

• Membership of the Audit and Remuneration Committees, in consultation with the Chairmen of those

committees;

• The reappointment of any non-executive Director at the conclusion of their specified term of office, having

given due regard to their performance and ability to continue to contribute to the Board in the light of the

knowledge, skills and experience required; and

• The re-election by shareholders of any Director having due regard to their performance and ability to

continue to contribute to the Board in the light of the knowledge, skills and experience required.

Any matters relating to the continuation in office of any Director at any time including the suspension or

termination of service of an executive Director as an employee of the Company subject to the provisions of the

law and their service contract.

Michel Meeus

Nomination Committee Chairman

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Board Committee Reports (continued)

Remuneration Committee

Statement from the Chairman

I am pleased to present the Annual Report on Remuneration for the year ended 31 December 2024.

Cadogan’s Remuneration Policy was approved as proposed by the shareholders at the Annual General Meeting

on 21 June 2024 and is attached at the end of the Annual Report on Remuneration. The Remuneration

Committee is not proposing to make any changes to the existing Policy however in line with industry best

practice and the three-year Policy cycle the Company will be seeking shareholder approval at this year’s AGM.

The key elements of the Remuneration Policy are:

• A better long-term alignment of the executives’ remuneration with the interests of the shareholders;

• A material reduction in the maximum remuneration level for the Executive Directors, both in terms of

annual bonus and of long-term incentive (performance share plan);

• The payment of at least 50% of the Annual Bonus in shares with the remaining 50% to be paid in cash

or shares at the discretion of the Remuneration Committee. Shares will be priced for this award based

on their market value at closing on the Business Day prior to the Subscription Date;

• The introduction of claw-back and malus provisions on both bonuses and share awards; and

• The expectation that the Executive Directors build a substantial shareholding position in the Company

through their mandate.

Michel Meeus

Chairman of the Remuneration Committee

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024

ANNUAL REPORT ON REMUNERATION

Remuneration Committee Report

The Remuneration Committee is committed to principles of accountability and transparency to ensure that

remuneration arrangements demonstrate a clear link between reward and performance.

Governance

The Remuneration Committee is appointed by the Board from the non-executive Directors of the Company.

The Remuneration Committee’s terms of reference are reviewed annually by the Remuneration Committee

and any changes are then referred to the Board for approval. The terms of reference of the Remuneration

Committee are published on the Company’s website, www.cadoganenergysolutions.com, and are also available

from the Company Secretary at the Registered Office.

The Remuneration Committee consists of Mr. Michel Meeus, Ms. Lilia Jolibois, Mr. Gilbert Lehmann, Mr Charles

Mack and Mr Thibaut de Gaudemar. At the discretion of the Remuneration Committee, the Chief Executive

Officer is invited to attend meetings when appropriate but is not present when his own remuneration is being

discussed. None of the directors are involved in deciding their own remuneration. The Company Secretary

attends the meetings of the Remuneration Committee.

Responsibilities

In summary, the Remuneration Committee’s responsibilities, as set out in its terms of reference, are as follows:

▪ To determine and agree with the Board the policy for the remuneration of the executive Directors, the

Company Secretary and other members of executive management as appropriate;

▪ To consider the design, award levels, performance measures and targets for any annual or long-term

incentives and approve any payments made and awards vesting under such schemes;

▪ Within the terms of the agreed remuneration policy, to determine the total individual remuneration

package of each executive Director and other senior executives including bonuses, incentive payments

and share options or other share awards; and

▪ To ensure that contractual terms on termination, and any payments made, are fair to the individual and

the Company, that failure is not rewarded and that the duty to mitigate loss is fully recognised.

Overview

The Chairman and Executive Directors of the Company have a regular dialogue with analysts and substantial

shareholders, which includes the subject of Directors’ Remuneration. The outcome of these discussions is

reported to the Board and discussed in detail both there and during meetings of the Remuneration Committee.

As a result of its work during the year, the Remuneration Committee has concluded that it has acted in

accordance with its terms of reference. The chairman of the Remuneration Committee will be available at the

Annual General Meeting to answer any questions about the work of the Committee.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Remuneration consultants

The Remuneration Committee did not take any advice from external remuneration consultants in the year.

Single total figure of remuneration for executive and non-executive directors (audited)

Salary and fees

Taxable benefit

Contributions to

pension schemes

Annual bonus

Total

Executive Director

2024

2023

2024

2023

2024

2023

2024

2023

2024

2023

F Khallouf

467,282

493,136

20,957

27,037

80,263

78,258

568,502

598,431

Non-executive Directors

M Meeus

62,041

89,000

62,041

89,000

L Jolibois

48,000

J Mahaux

26,505

43,000

26,505

43,000

G Lehmann

38,000

C Mack

22,516

T de

Gaudemar

22,516

Total Fixed Remuneration

Total Variable Remuneration

2024

2023

2024

2023

Executive Director

568,502

598,431

Non-executive Directors

219,578

218,000

Notes to the table

Mr Fady Khallouf

Mr Khallouf was appointed as Chief Executive Officer on 15 November 2019. Mr Khallouf’s salary is €440,000

per annum.

KPIs

The CEO is subject to a performance-related, bonus scheme built around a scorecard with a set of challenging

KPI’s aligned with the Company strategy. Given the current situation in Ukraine and any potential future

difficulties for the Company, Mr Fady Khallouf had requested that any annual performance related bonus to

be considered and paid by the Remuneration Committee during 2024, in respect of the financial year ended

31 December 2024, be waived. Whilst the bonus of Euros 500,000 has been accrued at 31 December 2024 it

was still conditional on receiving the funds from the Proger loan according to the Settlement Agreement,

which occurred in January 2025. Therefore, on that basis the bonus has been excluded from the 2024

directors’ remuneration and will be included in 2025 when it became due and payable.

Taxable benefits include insurance provided to the executive and leased car.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Benefits

Benefits may be provided to the executive director, in the form of private medical insurance and life assurance.

The Chairman and Non-Executive Directors

As mentioned above, fees for non-Executive Directors were reduced by 20% on 15

January 2020 with effect

from 15

November 2019. The fees are as follows: the Chairman’s fee at $89,000 and the fee for acting as a non-

executive Director at $38,000 with an additional $10,000 for acting as Chairman of the Audit Committee and

an additional $5,000 for a committee membership. Since July 2024, the Chairman’s fee is $65,000.

Scheme interests awarded during the financial year (audited)

There were no scheme interests awarded during the year.

Payments to past directors (audited)

In 2024 there were no payments to past directors.

Payments for loss of office (audited)

No notice period was either worked or paid.

Directors’ interests in shares (audited)

The beneficial interests of the Directors in office as at 31 December 2024 and their connected persons in the

Ordinary shares of the Company at 31 December 2024 are set out below.

Shares as at 31 December

2024

2023

Michel Meeus

26,023,651

10,200,000

Fady Khallouf

17,454,105

10,875,455

Gilbert Lehmann

Lilia Jolibois

Charles Mack

Thibaut de Gaudemar

Jacques Mahaux

The Company does not currently operate formal shareholding guidelines. Whilst there is no specified level, the

Company expects that under the new Remuneration Policy, the Executive Director will continue to build up a

significant shareholding position in the Company during his mandate.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

The Company’s performance

The graph below highlights the Company’s total shareholder return (“TSR”) performance for the last fourteen

years compared to the FTSE All Share Oil & Gas Producers index. This index has been selected on the basis that

it represents a sector specific group, which is an appropriate group for the Company to compare itself against,

and has been retained ever since, primarily for continuity purposes TSR is the return from a share or index

based on share price movements and notional reinvestment of declared dividends.

Historic Remuneration of Chief Executive

Salary

Taxable

benefits

Annual

bonus

Long-term

incentives

Pension

Loss of

office

Total

2009

422,533

284,552

707,085

2010

547,067

2011

669,185

2012

511,459

31,966

126,808

670,233

2013

384,941

2014

405,433

20,734

426,167

2015

432,409

15,987

243,132

691,528

2016

487,080

15,353

210,504

712,937

2017

497,288

27,273

81,392

605,953

2018

521,664

39,838

201,872

763,374

2019

492,581

45,453

495,109

1,033,143

2020

517,389

59,294

58,300

634,983

2021

535,999

30,173

78,619

644,791

2022

479,720

29,486

75,035

584,241

2023

493,136

27,037

78,258

598,431

2024

467,282

20,957

80,263

568,502

2015 CEO’s salary is the sum of Mr. des Pallieres' salary for the period January to June and of Mr. Michelotti's salary for the period

July to December.

In relation to performance in 2016 and 2015, the CEO used the entire amount of the bonus to buy at market price newly issued

company shares on 22 September 2017.

According to the 2017 performance results, the CEO was awarded a bonus that partially comprised shares; However, Mr.

Michelotti never exercised his right to claim those shares.

2019 Annual bonus is a sum of Mr Michelotti’s bonus of $112,140 and welcome bonus for Mr Khallouf equivalent in value of

5,500,000 ordinary shares based on share’s price of £0.0525. Welcome bonus for Mr Khallouf was provided in May 2020 based on

share’s price of £0.03. Respective correction of the bonus reserve equivalent to $185,000 was recognised through share premium

account in 2020.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

In 2024, the Remuneration Committee, after consultation with the CEO, have decided to postpone any variable

performance related bonus for the year ended 31 December 2024.

The annual bonus received by the CEO as a percentage of the maximum opportunity is presented in the

following table.

Year

CEO

CEO single figure of total

remuneration $

Annual bonus pay-out against

maximum opportunity %

2024

Mr. Khallouf

568,502

2023

Mr. Khallouf

598,431

2022

Mr. Khallouf

584,241

2021

Mr. Khallouf

644,791

2020

Mr. Khallouf

634,983

2019

Mr. Khallouf

444,465

Mr. Michelotti

588,678

2018

Mr. Michelotti

763,374

2017

Mr. Michelotti

605,953

2016

Mr. Michelotti

712,937

2015

Mr. Michelotti

502,021

Mr. des Pallieres

189,507

2014

Mr. des Pallieres

426,167

2013

Mr. des Pallieres

384,941

2012

Mr. des Pallieres

389,935

Mr. Barron

280,298

2011

Mr. des Pallieres

273,201

Mr. Barron

395,984

2010

Mr. Barron

547,067

2009

Mr. Barron

707,085

Percentage change in the remuneration of the Chief Executive

The following table shows the percentage change in the remuneration of the Chief Executive in 2024 and

2023 compared to that of all employees within the Group.

2024

2023

Average

$’000

change, %

Base salary

CEO

467

493

-5%

All employees

1,750

2,042

-14%

Taxable benefits

CEO

101

105

-4%

All employees

121

119

Annual Bonus

CEO

n/a

All employees

n/a

Total

CEO

568

598

-5%

All employees

1,911

2,161

-12%

Includes a welcome bonus for Mr Khallouf equivalent in value of 5,500,000 ordinary shares based on share’s price of £0.0525.

Mr Michelotti undertook to use the entire bonus to buy company’s share at market price in order to leave the Company cash

neutral.

Year-end performance-based bonus was an alternative to an up-front sign-on bonus. Mr Michelotti used the entire bonus to buy

company’s share at market price on 22 September 2017.

$280,298 paid as fees, pension, and loss of office.

From 1 August 2011.

From 19 March 2009.

All employees mean all employees of the Group, including CEO and other Directors (note 12, page 94).

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

In 2024 none of the directors participated in long-term incentive schemes.

In 2024 there was no increase in executive and non-executive directors' salary in base currency. The difference

in pay represents the change in exchange rate between the base currency and USD as a reporting currency.

Percentage change in non-executive director remuneration

Michel Meeus

All employees

2024

$’000

2023

$’000

% change

2024 – 2023

% change

2024 – 2023

Base salary/fees

62,041

89,000

-30%

-14%

Taxable benefits (including pensions)

Annual bonus

Total

62,041

89,000

-30%

-11.6%

The 1 January 2024, Michel Meeus stepped down as Chairman of the Company, remained as a non-executive

director and became a member of the Audit Committee. Starting from 22 April 2024, Mr. Meeus has been

appointed by the Board as Interim Chairman of the Company (Note: previous remuneration level has been

reinstated).

Lilia Jolibois

All employees

2024

$’000

2023

$’000

% change

2024 - 2023

% change

2024 - 2023

Base salary/fees

48,000

-14%

Taxable benefits (including pensions)

Annual bonus

Total

48,000

-11.6%

Jacques Mahaux

All employees

2024

$’000

2023

$’000

% change

2024 - 2023

% change

2024 - 2023

Base salary/fees

26,505

43,000

-38%

-14%

Taxable benefits (including pensions)

Annual bonus

Total

26,505

43,000

-38%

-11.6%

Gilbert Lehmann

All employees

2024

$’000

2023

$’000

% change

2024 - 2023

% change

2024 - 2023

Base salary/fees

38,000

-14%

Taxable benefits (including pensions)

Annual bonus

Total

38,000

-11.6%

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Charles Mack

All employees

2024

$’000

2023

$’000

% change

2024 - 2023

% change

2024 - 2023

Base salary/fees

22,516

n/a

-14%

Taxable benefits (including pensions)

n/a

Annual bonus

n/a

Total

22,516

n/a

-11.6%

Thibaut de Gaudemar

All employees

2024

$’000

2023

$’000

% change

2024 - 2023

% change

2024 - 2023

Base salary/fees

22,516

n/a

-14%

Taxable benefits (including pensions)

n/a

Annual bonus

n/a

Total

22,516

n/a

-11.6%

Relative importance of spend on pay

The table below compares shareholder distributions (i.e. dividends and share buybacks) and total employee

pay expenditure of the Group for the financial years ended 31 December 2023 and 31 December 2024.

2024

$’000

2023

$’000

Year-on-year change, %

All-employee remuneration

1,911

2,161

-12%

Distributions to shareholders

Shareholder voting at the Annual General Meeting

The Directors’ Remuneration Policy was approved by shareholders at the Annual General Meeting held on

21 June 2024 and remains unchanged. The Remuneration Policy can be found on the Group’s website and at

pages 54 to 67 of this Annual Report on Remuneration. The votes cast by proxy were as follows:

Directors’ Remuneration Policy

Number of votes

% of votes cast

For

120,854,549

63.29

Against

70,110,197

36.71

Total votes cast

190,964,746

100.00

Number of votes withheld

6,908,137

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

The Directors’ Annual Report on Remuneration is approved by shareholders at each Annual General Meeting.

A summary of the votes cast by proxy in 2024 and 2023 were as follows:

2024

2023

Director’s Annual Report

on Remuneration

Number of votes

% of votes cast

Number of votes

% of votes

cast

For

120,854,549

63.29

105,995,725

99.97

Against

70,110,197

36.71

26,984

0.03

Total votes cast

190,964,746

100.00

106,022,709

100.00

Number of votes withheld

6,908,137

Implementation of Remuneration Policy in 2025

The performance related elements of remuneration remain unchanged and will be built around a scorecard

with a set of KPI’s aligned with the Group strategy. The Remuneration Policy can be found on the Group’s

website and at pages 54 to 67 of this Annual Report on Remuneration.

Approval

The Directors’ Annual Report on Remuneration was approved by the Board on 25 April 2025 and signed on its

behalf by:

Michel Meeus

Chairman

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Directors’ Remuneration Policy

▪ Introduction

This Directors’ Remuneration Policy (the “Policy”) contains the information required to be set out as the

directors’ remuneration policy for the purposes of The Large and Medium-sized Companies and Groups

(Accounts and Reports) (Amendment) Regulations 2013.

The Policy was approved by shareholders at the 2024 AGM of the Company. The Remuneration Committee

is not proposing to make any changes to the existing Policy however in line with industry best practice and

the three-year Policy cycle the Company will be seeking shareholder approval at this year’s AGM. The

effective date of this Policy is the date on which the Policy is approved by shareholders.

The Policy applies in respect of all executive officers appointed to the Board of Directors (“executive

directors”) and non-executive directors. Other senior executives may be subject to the Policy, including in

relation to annual bonus and shares incentive arrangements in particular if and to the extent that the

Remuneration Committee determines it is appropriate.

The Remuneration Committee will keep the Policy under review to ensure that it continues to promote the

long-term success of the Company by giving the Company its best opportunity of delivering on the business

strategy. It is the Remuneration Committee’s intention that the Policy be put to shareholders for approval

every three years unless there is a need for the Policy to be approved at an earlier date.

The Company aims to provide sufficient flexibility in the Policy for unanticipated changes in compensation

practices and business conditions to ensure the Remuneration Committee has appropriate discretion to

retain its top executives who perform. The Remuneration Committee reserves the right to approve any

payments that may be outside the terms of this Policy, where the terms of that payment were agreed before

the Policy came into effect, or before the individual became a director of the Company.

Maximum caps are provided to comply with the required legislation and should not be taken to indicate an

intent to make payments at that level. The maximum caps are valid at the time that the relevant employment

agreement or appointment letter is entered into and the caps may be adjusted to take into account

fluctuations in exchange rates.

▪ Remuneration policy table: executive directors

Component

Purpose and link to

strategy

Maximum opportunity

Operation and performance measures

Salary and

Fees

To provide fixed

remuneration at an

appropriate level,

to attract and retain

directors as part of

the overall

compensation

package.

The maximum annual

base combined salary

and fees for executive

directors is €440,000

The Remuneration

Committee will

consider the factors

set out under the

"Operation" column

when determining the

appropriate level of

base salary within the

Salary is paid on a monthly basis.

The Remuneration Committee takes into

account a number of factors when

setting salaries including:

▪ scope and difficulty of the role;

▪ skills and experience of the individual;

▪ salary levels for similar roles within

the international industry; and

▪ pay and conditions elsewhere in the

Group. Salaries are reviewed on an

annual basis, but are not necessarily

increased at each review.

▪

Please note that the salary of the CEO for 2023 remains at €440,000.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Component

Purpose and link to

strategy

Maximum opportunity

Operation and performance measures

formal Policy

maximum.

No performance measures.

Annual Bonus

To incentivise and

reward the

achievement of

individual and

business objectives

which are key to

the delivery of the

Company's business

strategy.

The maximum award is

125% of combined

base salary and fees.

The payment of any bonus is at the

discretion of the Board with reference to

the performance year.

▪ The Remuneration Committee sets, in

advance, a scorecard with a set of Key

Performance Indicators ("KPIs")

aligned with the Company's strategy.

The measures and the relative

weightings are substantiated by the

Remuneration Committee and aim to

be stretching and to support the

Company's business strategy.

Measures are related to Company

financial performance, operational

performance and the Company’s

health and safety record. In general,

relative weightings of each KPI are

expected not to exceed 50% and not

to be less than 10%.

▪ The Remuneration Committee retains

the flexibility to determine and, if it

considers appropriate, change the

KPIs and weightings of the KPIs based

on the outcome of its annual review.

The Remuneration Committee may

also adjust KPIs during the year to

take account of material events, such

as (without limitation) material

corporate events, changes in

responsibilities of an individual and/

or currency exchange rates. Any such

changes will be within the overall

target and maximum payouts

approved in the policy.

▪ The KPI targets and specific

weightings in the scorecard are

defined annually early in the year,

once the budget has been approved. A

summary of the KPI targets,

weightings for the KPIs and how far

the KPIs are met will be included

retrospectively each year in the

Implementation Report for the year.

▪ All bonuses that may become payable

are subject to malus and clawback

provisions in the event of material

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Component

Purpose and link to

strategy

Maximum opportunity

Operation and performance measures

financial misstatement of the

Company or fraud or material

misconduct on the part of the

executive, as explained further below.

▪ 50% of the bonuses that may become

payable must be applied to subscribe

for or acquire shares in the Company

(after the deduction of any income tax

and/ or employee social security

contributions payable). The Company

is proposing to adopt and operate a

Deferred Bonus Plan as a framework

plan for the delivery of shares to

executives, which may be satisfied by

the issue of new shares or transfer of

existing or treasury shares.

▪ The Remuneration Committee will

determine whether the remainder of

the bonus shall be paid in cash or

must be applied to subscribe for or

acquire shares (after the deduction of

any income tax and/ or employee

social security contributions payable).

In making its determination as to how

the remainder of the bonus shall be

paid, the Remuneration Committee

may take into account: profitability of

the Company; the executive's

shareholding as measured against any

Company shareholding guidelines;

potential liabilities of the recipients to

income tax and social security

contributions, among other things.

Additional shares representing the

value of dividends payable on the

deferred shares may be paid.

▪ The Remuneration Committee may

impose holding periods of up to three

years on any of the shares delivered

pursuant to the annual bonus plan.

▪ There are no prescribed minimum

levels of performance in the annual

bonus structure and so it is possible

that no bonus award would be made.

Incentive

Arrangements

To incentivise,

retain and reward

eligible employees

and align their

Awards can be made

under the PSP with a

value of up to a

maximum of 200% of

The Company has adopted and operates

the 2018 Performance Share Plan ("PSP")

to replace the 2008 Performance Share

Plan. The PSP offers the opportunity to

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Component

Purpose and link to

strategy

Maximum opportunity

Operation and performance measures

interests with those

of the shareholders

of the Company.

base salary and fees or

300% in exceptional

circumstances.

earn shares in the Company subject to

the achievement of stretching but

realistic performance conditions.

Performance conditions will be a main

feature of the PSP.

The PSP will be administered by the

Remuneration Committee.

▪ Awards can be made under the PSP at

the direction of the Remuneration

Committee within the policy

maximum in the form of contingent

share awards.

▪ PSP awards will have a minimum

vesting period of 3 years and, for

directors, the PSP awards have a

further holding period of 2 years

following the end of the vesting

period (subject to any number of

shares that may need to be sold to

meet any income tax and employee

social security contributions due on

vesting).

▪ The Remuneration Committee will

develop clear KPIs that aim to align

directors with Company strategy over

time periods in excess of one financial

year. Any performance measures and

targets used for share incentive

awards during 2019 will be relevant

and stretching in line with the overall

strategy of the Company.

▪ The Remuneration Committee may

adjust or change the PSP measures,

targets and weightings for new

awards under the PSP to ensure

continued alignment with Company

strategy.

▪ PSP awards are subject to malus and

clawback in the event of material

financial misstatement of the

Company or fraud or material

misconduct on the part of the

executive.

▪ Upon vesting of an award, the award

holder must pay the nominal value in

respect of each share that vests.

▪ PSP Awards will normally lapse where

the award holder ceases employment

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Component

Purpose and link to

strategy

Maximum opportunity

Operation and performance measures

with the Company before vesting. PSP

Awards will not lapse and will vest

immediately if the award holder is

considered to be a Good Leaver

(leaves due to death or disability)

subject to the Remuneration

Committee being satisfied that

performance conditions have been

satisfied or are likely to be satisfied as

at the end of the relevant

performance period. In other

circumstances, the Remuneration

Committee may determine that

awards will not lapse and will

continue to vest at their normal

vesting date, subject to pro-ration to

reflect the period of service during the

performance period and performance

conditions. The Remuneration

Committee has residuary discretions

to disapply pro ration and bring

forward the date of vesting.

▪ In the event of a change of control of

the Company, if the acquiring

company agrees, awards will be

exchanged for equivalent awards over

shares in the acquiring company and

continue to vest according to the

original vesting schedule. If the

acquiring company does not agree to

exchange the awards, the awards will

vest at the Committee's absolute

discretion. Awards that vest will be

subject to time pro-ration and

performance conditions.

▪ Benefits under the PSP will not be

pensionable.

▪ The PSP Plan Limits are set out at Note

2.4 below.

Pension

To provide a

retirement benefit

that will foster

loyalty and retain

experienced

executive directors.

Any pension benefits

will be set at an

appropriate level in

line with market

practice, and in no

event will the

contributions paid by

No performance measures.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Component

Purpose and link to

strategy

Maximum opportunity

Operation and performance measures

the Company exceed

15% of combined base

salary and fees.

Benefits

To provide a market

competitive level of

benefits to

executive directors.

Any benefits will be set

at an appropriate level

in line with market

practice, and in no

event will the value of

the benefits exceed

15% of combined base

salary and fees.

▪ The executive directors are entitled to

private medical insurance and life

assurance cover (of four times the

combined salary and fee) and

directors' and officers' liability

insurance.

▪ The Remuneration Committee may

decide to provide other benefits

commensurate with the market. Such

benefits may include (for instance)

company car or allowance, physical

examinations and medical support,

professional advice, assistance with

filling out tax returns and occasional

minor benefits. A tax equalisation

payment may be paid to an executive

director if any part of the

remuneration of the executive

director becomes subject to double

taxation. Tax gross ups may be paid,

where appropriate. The Company

does not, at present, provide other

taxable benefits to the executive

directors.

▪ Executive directors are reimbursed for

reasonable business expenses

incurred in the course of carrying out

their duties.

▪ No performance measures.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Notes to the executive directors' remuneration policy table

The Remuneration Committee's philosophy is that remuneration arrangements should be appropriately

positioned to support the Group's business strategy over the longer term and the creation of value for

shareholders. In this context the following key principles are considered to be important:

- remuneration arrangements should align executive and employee interests with those of

shareholders;

- remuneration arrangements should help retain key executives and employees; and

- remuneration arrangements should incentivise executives to achieve short, medium and long-term

business targets which represent value creation for shareholders. Targets should relate to the

Group's performance in terms of overall revenue and profit and the executive's own performance.

Exceptional rewards should only be delivered if there are exceptional returns.

The Remuneration Committee reserves the right to make any remuneration payments (including satisfying

awards of variable remuneration) and payments for loss of office notwithstanding that they are not in line

with the Policy set out above, where the terms of that payment were agreed before the Policy came into

effect, or before the individual became a director of the Company (provided the payment was not in

consideration for the individual becoming a director).

▪ Performance measures and targets

(a) Annual Bonus

The performance measures for executive directors comprise of financial measures and

business goals linked to the Company's strategy, which could include financial and non-

financial measures. The business goals are tailored to reflect each executive director's role

and responsibilities during the year. The performance measures are chosen to enable the

Remuneration Committee to review the Company's and the individual's performance against

the Company's business strategy and appropriately incentivise and reward the executive

directors.

Annual bonus targets are set by the Remuneration Committee each year. They are stretching

but realistic targets which reflect the most important areas of strategic focus for the

Company. The factors taken into consideration when setting targets include the Company's

Key Performance Indicators (which are determined annually by the Remuneration

Committee), and the extent to which they are under the control or influence of the executive

whose remuneration is being determined.

Performance is measured over the financial year against the measures and targets set

according to the scorecard. The Remuneration Committee retains the right to exercise its

judgement to adjust the bonus outcome for an individual to ensure the outcome reflects any

other aspects of the Company's performance that become relevant during the financial year.

The Remuneration Committee used Company operational and financial performances and

safety as performance measures for the 2020 scorecard. For years following 2020, the

structure of the annual bonus scorecard will be reviewed by the Remuneration Committee.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

2024 Annual bonus scorecard measures for executive director

40% weighting

50% weighting

Operational performance, such as

production, sales, geographical

diversification, and starting new projects.

Company financial performance, including cash targets and

profit targets.

10% weighting

Indicators of health and safety to

promote the effective risk management

of the Company.

(b) Share Plans

The Remuneration Committee will make the vesting of a Plan award conditional upon the

satisfaction of stretching but realistic performance conditions. These conditions are meant

to achieve a long-term alignment of the executives’ remuneration with the interest of the

shareholders.

EBITDA growth, increase of P1 reserves (in millions boe), and changes to the free cash-flow

are the key KPIs to be used by the Remuneration Committee and will be measured over time

periods of three financial years. The performance measures are chosen to align the

performance of participants with the attainment of financial performance targets over the

vesting period of the award. The targets are set by the Remuneration Committee by

reference to the Company's strategy and business plan and the results achieved at the time

of the vest are determined by the Remuneration Committee.

Under the PSP plan rules, the Board may vary a performance target where it considers that

any performance target to which an award is subject is no longer a true or fair measure of

the participant's performance, provided that the Board must act fairly and reasonably and

that the new performance target is materially no more difficult and no less difficult to satisfy

than the original performance target.

▪ Malus and clawback (applicable to bonuses and share awards)

The Remuneration Committee has the discretion to reduce the bonus before payment or require the

executive director to pay back shares or a cash amount in the event of material financial

misstatement of the Company or fraud or material misconduct on the part of the executive. The

amount that may be clawed back on any such event is limited to the value of the bonus, taking into

account the cash paid and the shares delivered to the executive, taking the value of the shares at the

time of the clawback, less any income tax or employee social security contributions paid on the

bonuses.

▪ Share ownership guidelines for executives

The Remuneration Committee is planning to implement share ownership guidelines for executive

directors to further align the interests of the executive directors with those of shareholders. The

share ownership guidelines will include an expectation that executive directors build up their

shareholding to 200% of base salary over a period of five years from the later of: the date of adoption

of this policy and the date of appointment.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Once the shareholding guideline is reached, executive directors would be expected to maintain it.

The intention would be for the shareholding guideline to be reached through the retention of vested

shares from share plans (e.g. the deferred share element of the annual bonus and shares vested

under the PSP). As such, the Remuneration Committee's discretion may be used to increase the

proportion of an annual bonus to be delivered in shares to assist the executive director in meeting

this guideline. The deferred share mechanism in the annual bonus and the design of the PSP will

assist executive directors in reaching the guidelines. Executive directors will not be expected to top

up their shareholding with personal acquisitions of Company shares outside the usual share plans

described in the Policy. The Remuneration Committee will monitor the executive directors'

shareholdings and may adjust the guideline in special individual and Company circumstances, for

example in the case of a share price fall.

▪ PSP Plan Limits

The PSP may operate over new issue shares, treasury shares or shares purchased in the market. In

any ten-calendar year period, the Company may not issue (or grant rights to issue) more than:

(a) 10% of the issued ordinary share capital of the Company under the Plan and any other

employee share plan adopted by the Company; and

(b) 5% of the issued ordinary share capital of the Company under the Plan and any other

executive share plan adopted by the Company.

Treasury shares will count as new issue shares for the purposes of these limits unless institutional

investors decide that they need not count. These limits do not include rights to shares which have

been renounced, released, lapsed or otherwise become incapable of vesting, awards that the

Remuneration Committee determines after grant to be satisfied by the transfer of existing shares

and shares allocated to satisfy bonuses (including pursuant to the Deferred Bonus Plan).

▪ Remuneration throughout the Group

Differences in the Company's pay policy for executive directors from that applying to employees

within the Group generally reflect the appropriate market rate for the individual executive roles.

▪ Remuneration policy table: non-executive directors

Component

Purpose and link

to strategy

Maximum opportunity

Operation and performance

measures

Fees

To provide an

appropriate

reward to attract

and retain high-

calibre

individuals with

the relevant

skills, knowledge

and experience

to progress the

Company

strategy.

▪ The maximum annual fees

paid to non-executive

directors is £50,000 for a

non-executive director

role, and £100,000 for the

role of Chairman. An

additional £10,000 will be

paid to the individual

acting as Chairman of the

Audit Committee.

Non-executive directors receive a

standard annual fee, which is paid

on a quarterly basis in arrears.

Additional fees may also be paid to

recognise the additional work

performed by members of any

committees set up by the Board,

and for the role of chair of a

committee.

Fees are reviewed on an annual

basis, but are not necessarily

increased at each review. Fees are

set at a rate that takes into account:

▪ market practice for comparative

roles;

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Component

Purpose and link

to strategy

Maximum opportunity

Operation and performance

measures

▪ the financial results of the

Company;

▪ the time commitment and duties

involved; and

▪ the requirement to attract and

retain the quality of individuals

required by the Company.

The remuneration of the non-

executive directors is a matter for

the Board to consider and decide

upon.

There are no performance measures

related to non-executive directors'

fees.

Notes to the Policy Table

The payment policy for non-executive directors is to pay a rate which will secure persons of a suitable calibre.

The remuneration of the non-executive directors is determined by the Board. External benchmarking data

and specialist advisers are used when setting fees, which will be reviewed at appropriate intervals. The

maximum caps are valid at the time that the relevant appointment letter is entered into and the caps may

be adjusted to take into account fluctuations in exchange rates.

Expenses reasonably and wholly incurred in the performance of the role of non-executive director of the

Company may be reimbursed or paid for directly by the Company, as appropriate, and may include any tax

due on the expense.

The non-executive directors' fees are non-pensionable. The non-executive directors have not to date been

eligible to participate in any incentive plans (such as bonuses or share plans); however, the Board considers

that it may be appropriate in the future to enable such participation, subject to suitably stretching

performance thresholds.

Non-executive directors may receive professional advice in respect of their duties with the Company which

will be paid for by the Company. They will be covered by the Company's insurance policy for directors.

▪ Recruitment

The Company's policy on the recruitment of directors is to pay a fair remuneration package for the role

being undertaken and the experience of the individual being recruited. The Remuneration Committee

will consider all relevant factors, which include the abilities of the individual, their existing remuneration

package, market practice, and the existing arrangements for the Company's current directors.

The Remuneration Committee will determine that any arrangements offered are in the best interests of

the Company and shareholders and will endeavour to pay no more than is necessary.

The Remuneration Committee intends that the components of remuneration set out in the policy tables,

and the approach to the components as set out in the policy tables, will be equally applicable to new

recruits, i.e. salary, annual bonus, share plan awards, pension and benefits for executive directors, and

fees for non-executive directors. However, the Company acknowledges that additional flexibility may be

required to ensure the Company is in the best position to recruit the best candidate for any vacant roles

and, as such, a buy-out arrangement may be required.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

▪ Flexibility

The salary and compensation package designed for a new recruit may be higher or lower than that

applying for existing directors. The Remuneration Committee may decide to appoint a new executive

director to the Board at a lower than typical salary, such that larger and more frequent salary increases

may then be awarded over a period of time to reflect the individual's growth in experience within the

role.

Remuneration will normally not exceed those set out in the policy table above. However, to ensure that

the Company can sufficiently compete with its competitors, the Remuneration Committee considers it

important that the recruitment policy has sufficient flexibility in order to attract and appropriately

remunerate the high-performing individuals that the Company requires to achieve its strategy. As such,

the Remuneration Committee reserves discretion to provide a buy-out arrangement and benefits (such

as a sign-on bonus and additional share awards) in addition to those set out in the policy table (or

mentioned in this section) where the Remuneration Committee considers it reasonable and necessary to

do so in order to secure an external appointment (see below for more detail in relation to buy-out

arrangements).

▪ Buy-out arrangements

The Remuneration Committee retains the discretion to enter into buy-out arrangements to compensate

new hires for incentive awards forfeited in joining the Company. The Remuneration Committee will use

its discretion in awarding and setting any such compensation, which will be decided on a case-by-case

basis and likely on an estimated like-for-like basis. In deciding the appropriate type and quantum of

compensation to replace existing awards, the Remuneration Committee will take into account all

relevant factors, including the type of award being forfeited, the likelihood of any performance measures

attached to the forfeited award being met, and the proportion of the vesting period remaining. The

Remuneration Committee will appropriately discount the compensation payable to take account of any

uncertainties over the likely vesting of the forfeited award to ensure that the Company does not, in the

view of the Remuneration Committee, pay in excess of what is reasonable or necessary.

Compensation for awards forfeited may take the form of a bonus payment or a share award. For the

avoidance of doubt, the maximum amounts of compensation contained in the policy table will not apply

to such buy-out arrangements. The Company has not placed a maximum value on the compensation that

can be paid under this section, as it does not believe it would be in shareholders' interests to set any

expectations for prospective candidates regarding such awards.

▪ Payments for loss of office

Any compensation payable in the event that the employment of an executive director is terminated will

be determined in accordance the terms of the employment contract between the Company and the

executive, as well as the relevant rules of any share plan and this Policy, and in accordance with the

prevailing best practice.

The Remuneration Committee will consider a variety of factors when considering leaving arrangements

for an executive director and exercising any discretions it has in this regard, including (but not limited to)

individual and business performance during office, the reason for leaving, and any other relevant

circumstances (for example, ill health).

In addition to any payment that the Remuneration Committee may decide to make, the Remuneration

Committee reserves discretion as it considers appropriate to:

(a) pay an annual bonus for the year of departure;

(b) continue providing any benefits for a period of time; and

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

Non-executive directors are subject to one month notice periods prior to termination of service and are

not entitled to any compensation on termination save for accrued fees as at the date of termination and

reimbursement of any expenses properly incurred prior to that date.

▪ Share plan awards

The treatment of any share award on termination will be governed by the PSP rules.

Under the PSP, outstanding share awards held by an individual who ceases to be a director or employee

of the Company will lapse, unless the cessation is due to death, illness, injury or disability, redundancy,

retirement, the Company ceasing to be a member of the Group or the transfer of an undertaking or part

of an undertaking to a person who is not a member of the Group, or the Board exercises its discretion

otherwise.

Under the PSP, the Board has discretion to decide the period of time for which the award will continue,

and whether any unvested award shall be treated as vesting on the date of cessation of employment or

in accordance with the original vesting schedule, in both cases have regard to the extent to which the

performance targets have been satisfied prior to the date of cessation.

For executive directors, the vesting period will be set by the Remuneration Committee with a minimum

three-year period. The Remuneration Committee will (unless the vesting period is set as a period equal

to or longer than five years) impose a holding period on shares (or awards) so that the executive is not

able to sell the shares that the executive director acquires through the PSP until the fifth anniversary of

the date of the award. The holding period will not apply to the number of shares equivalent in value to

the amount required by the Company or the executive director to fund any income tax and employee

social security contributions due on the vesting of the awards or otherwise in connection with the

awards.

▪ Executive director employment agreements

This section contains the key employment terms and conditions of the executive directors that could

impact on their remuneration or loss of office payments.

The Company's policy on employment agreements is that executive directors' agreements should be

terminable by either the Company or the director on not more than six months' notice. The employment

agreements contain provision for early termination, among other things, in the event of a breach by the

executive but make no provision for any termination benefits except in the event of a change of control

of the Company, where the executive becomes entitled to a lump sum equal to 24 months' base salary

plus benefits plus (if any), bonus received on termination by the Company. The employment agreements

contain restrictive covenants for a period of 12 months following termination of the agreement. Details

of employment agreements in place as at the date of this report are set out below:

Director

Current agreement start date

Notice period

F Khallouf

15 November 2019

Six months

Directors' employment agreements are available for inspection at the Company's registered office in

London.

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

▪ Non-executive directors' letters of appointment

This section contains the key terms of the appointments of non-executive directors that could impact on

their remuneration.

Typically, the non-executive directors are appointed by letter of appointment for an initial term of three

years which may be extended. All non-executive directors are subject to annual re-election by the

Company's shareholders and their appointments may be terminated earlier with one month's prior

written notice (or with immediate effect, in the case of specific serious circumstances such as fraud or

dishonesty). On termination of appointment, non-executive directors are usually only entitled to accrued

fees as at the date of termination together with reimbursement of any expenses properly incurred prior

to that date and the company has no obligation to pay further compensation when the appointment

terminates. Non-executive directors' letters of appointment are available for inspection at the

Company's registered office in London.

Non-executive Director

Current agreement start date

Term

Michel Meeus

23 June 2023

Two years

Lilia Jolibois

21 June 2024

Two years

Gilbert Lehmann

23 June 2023

Two years

Charles Mack

21 June 2024

Three years

Thibaut de Gaudemar

21 June 2024

Three years

▪ Illustration of the Remuneration Policy

The bar charts below show the levels of remuneration that the CEO could earn over the coming year

under the Policy.

CEO: minimum and maximum remuneration

Notes:

I. The remuneration for an "on-target” scenario is purely illustrative as actual remuneration will depend on how

challenging the target is for the relevant year as well as on the financial conditions of the Company

II. The maximum award under the share incentive plan is 200% which can increase up to 300% (400% in the old

policy) in exceptional circumstances

CADOGAN ENERGY SOLUTIONS PLC

Annual Report on Remuneration 2024 (continued)

The bar chart shows future possible maximum remuneration.

Pension entitlements were provided in 2023.

▪ Consideration of shareholder views

The Chairman and executive directors of the Company have a regular dialogue with analysts and

substantial shareholders, which includes the subject of directors' remuneration. The outcome of these

discussions is reported to the Board and discussed in detail both there and during meetings of the

Remuneration Committee.

The Remuneration Committee will take into account the results of the shareholder vote on remuneration

matters when making future remuneration decisions. The Remuneration Committee remains mindful of

shareholder views when evaluating and setting ongoing remuneration strategy.

▪ Consideration of employment conditions within the Group

When determining remuneration levels for its executive directors, the Board considers the pay and

employment conditions of employees across the Group. The Remuneration Committee will be mindful

of average salary increases awarded across the Group when reviewing the remuneration packages of the

executive directors.

▪ Minor changes

The Remuneration Committee may make, without the need for shareholder approval, minor

amendments to the Policy for regulatory, exchange control, tax or administrative purposes or to take

account of changes in legislation.

Michel Meeus

Chairman

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Statement of Directors’ Responsibilities

Statement of Directors’ Responsibilities in respect of the Annual Report and the Financial Statements

The Directors are responsible for preparing the Annual Report and the financial statements in accordance with

applicable law and regulation.

Company law requires the directors to prepare financial statements for each financial year. Under that law the

directors have prepared the group and company financial statements in accordance with UK-adopted

International Accounting Standards. In preparing the Company and Group’s financial statements, IAS

Regulation requires that Directors:

▪ properly select and apply accounting policies;

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

▪ present information, including accounting policies, in a manner that provides relevant, reliable,

comparable and understandable information;

▪ state whether applicable UK-adopted International Accounting Standards have been followed, subject

to any material departures disclosed and explained in the financial statements;

▪ provide additional disclosures when compliance with the specific requirements in IFRSs are insufficient

to enable users to understand the impact of particular transactions, other events and conditions on

the Company’s and Group’s financial position and financial performance; and

▪ make an assessment of the Company’s and Group’s ability to continue as a going concern, prepare the

financial statements on the going concern basis unless it is inappropriate to presume that the Company

and Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain

the Company and Group’s transactions and disclose with reasonable accuracy at any time the financial position

of the Company and Group and enable them to ensure that the financial statements comply with the

Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking

reasonable steps for the prevention and detection of fraud and other irregularities. Under applicable law and

regulations, the Directors are also responsible for preparing a Strategic Report, Report of the Directors, Annual

Report on Remuneration, Directors’ Remuneration Policy and Corporate Governance Statement that comply

with that law and those regulations. The Directors are responsible for the maintenance and integrity of the

corporate and financial information and statements included on the Company’s website,

www.cadoganenergysolutions.com. Legislation in the United Kingdom governing the preparation and

dissemination of the financial statements may differ from legislation in other jurisdictions. The directors'

responsibility also extends to the ongoing integrity of the financial statements contained therein.

Responsibility Statement of the Directors in respect of the Annual Report

We confirm to the best of our knowledge:

(1) the financial statements, prepared in accordance with UK-adopted International Accounting Standards in

conformity with the requirements of the Companies Act 2006, give a true and fair view of the assets, liabilities,

financial position and profit or loss of the Company and the undertakings included in the consolidation as a

whole; and

(2) the Annual Report, includes a fair review of the development and performance of the business and the

position of the Company and the undertakings included in the consolidation taken as a whole, together with a

description of the principal risks and uncertainties that they face; and

(3) the annual report and the financial statements, taken as a whole, are fair, balanced and understandable,

and provide the information necessary for the shareholders to assess the Group’s position, performance,

business model and strategy.

On behalf of the Board

Michel Meeus

Chairman

25 April 2025

CADOGAN ENERGY SOLUTIONS PLC

Independent auditor’s report to the members of Cadogan Energy Solutions Plc

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF CADOGAN ENERGY SOLUTIONS PLC

Qualified Opinion

We have audited the financial statements of Cadogan Energy Solutions Plc (the ‘Parent Company’) and its

subsidiaries (the Group) for the year ended 31 December 2024 which comprise the Consolidated Income

Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Balance Sheet, the

Consolidated Cash Flow Statement, the Consolidated Statement of Changes in Equity, the Company Balance

Sheet, the Company Cash Flow Statement, the Company Statement of Changes in Equity, and Notes to the

Financial Statements, including significant accounting policies. The financial reporting framework that has

been applied in their preparation is applicable law and UK adopted International Accounting Standards and,

as regards the Parent company financial statements, as applied in accordance with the provisions of the

Companies Act 2006.

In our opinion, except for the effect of the matter described in the Basis for qualified opinion paragraph below:

• the financial statements give a true and fair view of the state of the Group’s and of the Parent

company’s affairs as at 31 December 2024 and of the Group’s loss for the year then ended;

• the Group financial statements have been properly prepared in accordance with UK adopted

International Accounting Standards;

• the Parent Company financial statements have been properly prepared in accordance with UK

adopted International Accounting Standards and as applied in accordance with the provisions of the

Companies Act 2006; and

• the financial statements have been prepared in accordance with the requirements of the Companies

Act 2006.

Basis for qualified opinion

In February 2019, the Group advanced a Euro 13,385,000 loan to Proger Managers & Partners Srl (“PMP”), a

privately owned Italian company whose only asset is a 72.92% interest in Proger Ingegneria Srl (“Proger

Ingegneria”), a privately owned company which itself held a 67.91% participating interest in Proger S.P.A

(“Proger”) at the date of the loan was advanced.

The loan carries an entitlement to interest at a rate of 5.5% per year, payable at maturity (which is 24 months

after the execution date of February 2019 and assuming that the call option described below was not

exercised). The principal of the loan is secured by a pledge over PMP’s current participating interest in Proger

Ingegneria Srl, up to a maximum guaranteed amount of Euro 13,385,000.

Through the Agreement, the Group was granted a call option to acquire, at its sole discretion, a 33%

participating interest in Proger Ingegneria; the exercise of the option would have given Cadogan, through

Cadogan Petroleum Holdings BV, an indirect 25% interest in Proger. The call option was granted at no

additional cost and could be exercised at any time between the 6th and 24th months following the execution

date of the loan agreement.

The call option was not exercised within the relevant timeframe (February 2021) and consequently in

accordance with the loan agreement the principal amount and any accrued interest became repayable in full.

At that date the Group reclassified the asset from a financial asset held at fair value through profit and loss to

a financial asset held at amortised cost.

In March 2021, PMP requested arbitration to have the loan agreement recognised as an equity investment

contract. In July 2022, the Arbitral panel in Rome decided to reject the main claim of PMP to recognise the

loan as an equity investment.

In November 2023, the Group initiated a second arbitration to assert its right to restitution and obtain PMP’s

condemnation of the consequent payment.

CADOGAN ENERGY SOLUTIONS PLC

Independent auditor’s report to the members of Cadogan Energy Solutions Plc

As discussed in note 4(d) and note 28 to the financial statements, the Group and PMP entered into a settlement

agreement in December 2024 to conclude their litigation in respect of the loan agreement with PMP entered

into in February 2019. Consequently, management recorded the carrying value of Proger loan at USD

$10,388,000, which was management’s best estimate of its recoverable amount in accordance with the

settlement agreement signed with PMP. Subsequently the Group received an amount of Euro 10,001,000

(USD $10,388,000) in January 2025 in accordance with the settlement agreement. As a result an impairment

charge of USD $5,657,000 was recorded for the year ended 31 December 2024, as shown in note 13 to the

financial statements.

Due to the litigation, which was ongoing at 31 December 2023, we were unable to obtain sufficient appropriate

audit evidence as to whether the carrying value of the loan note recorded at $17,074,000 in the consolidated

balance sheet represented its recoverable amount as at 31 December 2023 and as a result the audit opinion

for the year ended 31 December 2023 was qualified. Consequently, we were unable to determine whether the

impairment charge recognised for the year ended 31 December 2024 was materially correct and we were

therefore unable to obtain sufficient appropriate audit evidence in respect of the loss of the Group for the year.

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and

applicable law. Our responsibilities under those standards are further described in the Auditor’s

Responsibilities for the audit of the financial statements section of our report. We are independent of the Group

in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK,

including the FRC’s Ethical Standard as applied to listed public interest entities, and we have fulfilled our other

ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have

obtained is sufficient and appropriate to provide a basis for our qualified opinion. Our audit opinion is consistent

with the additional report to the audit committee.

Our approach to the audit

We tailored the scope of our audit to ensure we performed sufficient work to be able to express an opinion on

the financial statements as a whole, taking into account the structure of the Group and the Company, its

environment, including the group’s system of internal control, and assessing the risks of material misstatement

in the financial statements. We also addressed the risk of management override of internal controls, including

assessing whether there was evidence of bias by the directors that may have represented a risk of material

misstatement.

The significant majority of the Group’s operations are located in the Ukraine and account for 100% of the

Group’s revenue. We instructed a component audit team in the Ukraine to perform a full scope audit of the

Ukrainian sub-group. In our assessment the Group comprises three full scope components together with the

Ukrainian sub-group and one limited scope component. The audit of the Ukrainian sub-group was performed

by Crowe Erfolg in the Ukraine under the supervision and direction of the Group audit engagement team, as

described in more detail below. The remaining full scope components of the Group namely Cadogan Energy

Solutions Plc (the Parent Company), Cadogan Petroleum Holdings Limited and the limited scope component

Cadogan Petroleum Holdings B.V. were audited by the Group audit engagement team.

Our involvement with the component auditors

As part of our supervision and direction of the component audit team, we determined the level of involvement

needed in order to be able to conclude whether sufficient appropriate audit evidence has been obtained in

respect of the Ukraine sub-group as a basis for our opinion on the Group financial statements as a whole. Our

involvement with the component auditors included the following:

• We issued detailed Group reporting instructions to the component auditor, which included the

significant areas to be covered by the audit (including areas that were considered to be key audit

matters as detailed below) and set out the information required to be reported to the Group audit team.

• Due to the travel restrictions resulting from the ongoing war in the Ukraine, the Group audit

engagement partner and senior members of the Group audit engagement team were unable to visit

the Ukraine to meet with component management and the component audit team during the audit.

Accordingly, we performed a remote review of the component audit files in the Ukraine using

appropriate technologies and held regular calls and video conferences with component management

and component audit team during the audit.

CADOGAN ENERGY SOLUTIONS PLC

Independent auditor’s report to the members of Cadogan Energy Solutions Plc

• The Group audit team performed reviews of relevant working papers and undertook additional

procedures where necessary in respect of the significant risk areas that represented Key Audit Matters

for the Group.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit

of the financial statements of the current period and include the most significant assessed risks of material

misstatement (whether or not due to fraud) we identified, including those which had the greatest effect on: the

overall audit strategy, the allocation of resources in the audit; and directing the efforts of the audit engagement

team. These matters were addressed in the context of our audit of the financial statements as a whole, and in

forming our opinion thereon, and we do not provide a separate opinion on these matters.

In addition to the matter described in the basis for qualified opinion section, we have determined the matters

described below to be the key audit matters to be communicated in our report.

Key Audit Matters

How our scope addressed this matter

Valuation of development and production

assets

Refer to page 88 (Accounting policy) and 100

(note 17 Property, plant and equipment).

As at 31 December 2024 the Group held

development and production assets with a

carrying value of $4.5m (2023: $5.6m).

Management has performed an impairment

review of development and production assets

and concluded that no impairment is required.

The assessment of the recoverable amount of

the development and production assets

required judgments and estimates by

management regarding the inputs applied in the

models including future oil prices, production

forecasts, estimates of reserves, operating and

development costs and discount rates.

The carrying value of the Group’s development

and production assets was therefore

considered to be a key audit matter.

• We critically assessed management’s

impairment assessment which was

based on the value in use model (ViU).

• We challenged the key judgements and

estimates made by management,

including forecast oil prices and the

production output levels.

• We critically assessed management’s

assumptions in estimating the discount

rate used.

• We compared forecast production

included in the model to the most recent

geological and economic evaluation

report produced by the management’s

external expert.

• We assessed the independence and

competence of management’s external

expert.

• We held discussions with operational

management to evaluate the basis of

production forecasts associated with

wells, considered the historical impact of

such activities and evaluated the extent

to which appropriate costs were included

in the forecasts.

• We performed sensitivity analysis on the

impairment model to establish the

impact of possible changes of the key

assumptions and estimates.

• We reviewed the adequacy of the

disclosures in the financial statements in

accordance with IAS 36.

Based on our procedures performed we were

satisfied that there was no impairment of

development and production assets and that the

associated disclosures included in the financial

statements were appropriate.

Our application of materiality

The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds

for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit,

CADOGAN ENERGY SOLUTIONS PLC

Independent auditor’s report to the members of Cadogan Energy Solutions Plc

the nature, timing and extent of our audit procedures, both individually and in aggregate on the financial

statements as a whole. Based on our professional judgement, we determined materiality for the financial

statements as follows:

The Group

The Parent Company

Overall group

materiality

$470,000 (2023: $570,000)

$300,000 (2023: $350,000)

Basis of

determining

materiality

1.5% of total assets (2023:

1.5% of total assets)

1.5% of total assets restricted to $300,000 (2023:

1.5% of total assets restricted to $350,000)

Rationale for the

benchmark

applied

When determining materiality, we determine an appropriate percentage of our chosen

benchmark, with the choice of an appropriate benchmark as our starting point. We

determined that an asset based measure of materiality is appropriate as the Group and

the Company holds significant cash and loan balances and its principal activity is the

exploration and development of oil and gas assets. As a result we concluded that the

asset base is a key financial metric for the users of the financial statements.

Performance

materiality

$235,000 (2023: $285,000)

$150,000 (2023: $175,000)

Basis for

performance

materiality

We use performance materiality to reduce to an appropriately low level the probability

that the aggregate of uncorrected and undetected misstatements exceeds overall

materiality. Specifically, we use performance materiality in determining the scope of our

audit and the nature and extent of our testing of account balances, classes of

transactions and disclosures, for example in determining sample sizes.

Our performance materiality was 50% of overall materiality, amounting to £235,000 for

the Group financial statements and $150,000 for the Company

financial statements.

When considering the level at which to set performance materiality, we considered a

number of factors, including the risk assessment and aggregation risk, the effectiveness

of controls and our knowledge of the business.

We agreed with the Board and Audit Committee that we would report to them misstatements identified during

the audit greater than 5% of overall materiality. We also agreed to report differences below this threshold that,

in our view, warranted reporting on qualitative grounds.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of

accounting in the preparation of the financial statements is appropriate. Our evaluation of the directors’

assessment of the Group’s and the Parent Company’s ability to continue to adopt the going concern basis of

accounting included:

• We reviewed management’s going concern assessment paper and the cash flow forecast prepared

by management and approved by the Board.

• We critically assessed the going concern paper and the forecast taking into account key

assumptions and various scenarios prepared by management and the impact they would have on

the Group’s ability to continue operating as a going concern.

• We performed sensitivity assessments over the key assumptions in the forecast including the impact

of severe but plausible scenarios and severe but unlikely downside scenarios, and extended these

beyond the 12 months from the date of approval of these financial statements to assess the Group’s

ability to continue as a going concern.

• As part of our sensitivity assessment of these forecasts and scenarios we critically assessed the

level of headroom available and the assumptions used including, mitigating actions available to

management, potential geopolitical impacts, oil production, oil prices, operating expenditure and

capital expenditure.

CADOGAN ENERGY SOLUTIONS PLC

Independent auditor’s report to the members of Cadogan Energy Solutions Plc

• We compared production forecasts to historical trends and considered the oil price assumptions

against consensus market prices and historical discount levels between Brent oil prices and the local

market. We also compared forecast costs with historical expenditure.

• We reviewed the adequacy of the disclosures in the financial statements in respect of going concern

against the requirements of UK-adopted international accounting standards.

Based on the work we have performed, we have not identified any material uncertainties relating to events or

conditions that, individually or collectively, may cast significant doubt on the Group’s and Parent company's

ability to continue as a going concern for a period of at least twelve months from when the financial statements

are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the

relevant sections of this report.

Emphasis of Matter

We draw attention to Note 3 (b) on page 83 to the financial statements which describes the uncertainty related

to the outcome of the ongoing war in Ukraine. The Group has included various scenarios that take into account

the ongoing war in the Ukraine in its cash flow projections. However, due to the unpredictable outcome, length,

scale and extent of the conflict its impact on the Group and the Company cannot be predicted with any

certainty. Our opinion is not modified in respect of this matter.

Other information

The other information comprises the information included in the annual report, other than the financial

statements and our auditor’s report thereon. The directors are responsible for the other information contained

within the annual report. Our opinion on the financial statements does not cover the other information and,

except to the extent otherwise explicitly stated in our report, we do not express any form of assurance

conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and,

in doing so, consider whether the other information is materially inconsistent with the financial statements or

our knowledge obtained in the course of the audit or otherwise appears to be materially misstated. If we identify

such material inconsistencies or apparent material misstatements, we are required to determine whether there

is a material misstatement in the financial statements themselves. If, based on the work we have performed,

we conclude that there is a material misstatement of this other information, we are required to report that fact.

As described in the basis for qualified opinion section of our report, our audit opinion is qualified because we

were unable to obtain sufficient appropriate audit evidence in respect of the loss of the Group for the year

ended 31 December 2024, as a consequence of our qualified opinion in respect of certain loan receivables for

the year ended 31 December 2023. We have concluded that where the other information refers to the loss for

the year, the prior year loan receivables or to related balances or classes of transactions it may also be

materially misstated for the same reason.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion the part of the directors’ remuneration report to be audited has been properly prepared in

accordance with the Companies Act 2006.

Except for the possible effect of the matter described in the basis for the qualified opinion section of our report,

in our opinion, based on the work undertaken in the course of the audit:

• the information given in the Strategic report and the Directors’ report for the financial year for which

the financial statements are prepared is consistent with the financial statements; and

• the Strategic report and the Directors’ report have been prepared in accordance with applicable legal

requirements;

CADOGAN ENERGY SOLUTIONS PLC

Independent auditor’s report to the members of Cadogan Energy Solutions Plc

Matters on which we are required to report by exception

Except for the possible effect of the matter described in the basis for the qualified opinion section of our report,

in the light of the knowledge and understanding of the Group and the Parent Company and its environment

obtained in the course of the audit, we have not identified material misstatements in the Strategic report or the

Directors’ report.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to

report to you if, in our opinion:

• returns adequate for our audit have not been received from branches not visited by us; or

• the Parent Company financial statements and the part of the Directors’ remuneration report to be

audited are not in agreement with the accounting records and returns; or

• certain disclosures of Directors’ remuneration specified by law are not made; or

• a corporate governance statement has not been prepared by the Parent Company.

Responsibilities of directors

As explained more fully in the directors’ responsibilities statement set out on page 68, the directors are

responsible for the preparation of the financial statements and for being satisfied that they give a true and fair

view, and for such internal control as the directors determine is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the Group’s and the Parent

company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern

and using the going concern basis of accounting unless the directors either intend to liquidate the Group or

the Parent Company or to cease operations, or have no realistic alternative but to do so.

Auditor’s Responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free

from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our

opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in

accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise

from fraud or error and are considered material if, individually or in aggregate, they could reasonably be

expected to influence the economic decisions of users taken on the basis of these financial statements.

A further description of our responsibilities is available on the FRC’s website at

https://wwww.frc.org.uk/auditors/auditor-assurance/auditor-s-responsibilities-for-the-audit-of-the-

fi/description-of-the-auditor's-responsibilities-for

Explanation as to what extent the audit was considered capable of detecting irregularities, including

fraud

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design

procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of

irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities,

including fraud is detailed below.

The objectives of our audit in respect of fraud, are; to identify and assess the risks of material misstatement of

the financial statements due to fraud; to obtain sufficient appropriate audit evidence regarding the assessed

risks of material misstatement due to fraud, through designing and implementing appropriate responses to

those assessed risks; and to respond appropriately to instances of fraud or suspected fraud identified during

the audit. However, the primary responsibility for the prevention and detection of fraud rests with both

management and those charged with governance of the company.

CADOGAN ENERGY SOLUTIONS PLC

Independent auditor’s report to the members of Cadogan Energy Solutions Plc

Based on our understanding of the Group and its operations, we identified the principal risks of non-compliance

with laws and regulations related to UK and Ukrainian tax legislation, employment and health and safety

regulations, and licensing regulations and we considered the extent to which non-compliance might have a

material effect on the financial statements. We also considered those laws and regulations that have a direct

impact on the financial statements such as UK adopted International Accounting Standards, the Companies

Act 2006, the Listing Rules and the Disclosure and Transparency Rules.

• We obtained an understanding of how the Group and the Parent Company complies with these

requirements by discussions with management and those charged with governance;

• Based on this understanding, we designed specific appropriate audit procedures to identify instances

of non-compliance with laws and regulations. This included making enquiries of management and

those charged with governance and obtaining additional corroborative evidence as required.

• We inquired of management and those charged with governance as to any known instances of non-

compliance or suspected non-compliance with laws and regulations.

• We performed a review of external press releases;

• We assessed the risk of material misstatement of the financial statements, including the risk of material

misstatement due to fraud and how it might occur, by holding discussions with management and those

charged with governance.

• We challenged assumptions and judgements made by management in relation to the estimates made

in respect of development and production assets.

• Identifying and testing journal entries, in particular any journal entries posted with unusual account

combinations, and unusual users.

There are inherent limitations in the audit procedures described above. We are less likely to become aware of

instances of non-compliance with laws and regulations that are not closely related to events and transactions

reflected in the financial statements. Also, the risk of not detecting a material misstatement due to fraud is

higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by,

for example, forgery or intentional misrepresentations, or through collusion.

Other matters which we are required to address

We were appointed by the Board of Directors on 17 February 2023 to audit the financial statements for the

year ended 31 December 2022. Our total uninterrupted period of engagement is three years, covering the year

ended 31 December 2022 to the year ended 31 December 2024.

The non-audit services prohibited by the FRC’s Ethical Standard were not provided to the Group or the Parent

Company and we remain independent of the Group and the Parent Company in conducting our audit.

Our audit opinion is consistent with the additional report to the Audit Committee.

CADOGAN ENERGY SOLUTIONS PLC

Independent auditor’s report to the members of Cadogan Energy Solutions Plc

Use of our report

This report is made solely to the company’s members, as a body, in accordance with Chapter 3 of Part 16 of

the Companies Act 2006. Our audit work has been undertaken for no purpose other than to draw to the

attention of the company’s members those matters which we are required to include in an auditor’s report

addressed to them. To the fullest extent permitted by law, we do not accept or assume responsibility to any

party other than the company and company’s members as a body, for our work, for this report, or for the

opinions we have formed.

[Signature] [25 April 2025]

Matthew Banton (Senior Statutory Auditor)

for and on behalf of Moore Kingston Smith LLP, Statutory Auditor

9 Appold Street

London

EC2A 2AP

CADOGAN ENERGY SOLUTIONS PLC

Consolidated Income Statement

For the year ended 31 December 2024

Notes

		2024	2023
		$’000	$’000
CONTINUING OPERATIONS
Revenues	6	9,152	7,550
Cost of sales	7	(5,047)	(5,391)
Gross profit		4,105	2,159
Administrative expenses	8	(3,522)	(3,574)
Adjustments to end of concession obligations for E&E assets	16	(6)	218
Reversal of impairment of other assets	9	39	56
Impairment of other assets	9	(39)	(49)
Other operating (expenses)/income, net	10	(19)	25
Net foreign exchange (losses)/gain		(1,123)	538
Operating loss		(565)	(627)
Loss on Proger loan, net	13	(5,657)	757
Finance income, net	13	759	1,128
(Loss)/Profit before tax		(5,463)	1,258
Taxation	14	(769)	-
(Loss)/Profit for the year		(6,232)	1,258
Attributable to:
Owners of the Company		(6,232)	1,259
Non-controlling interest		-	(1)
		(6,232)	1,258
(Loss)/Earnings per Ordinary share		Cents	Cents
Basic and diluted	15	(2.6)	0.5

CADOGAN ENERGY SOLUTIONS PLC

Consolidated Statement of Comprehensive Income

For the year ended 31 December 2024

	2024	2023
	$’000	$’000
(Loss)/Profit for the year	(6,232)	1,258
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss:
Unrealised currency translation differences	(1,141)	(321)
Other comprehensive loss	(1,141)	(321)
Total comprehensive (loss)/profit for the year	(7,373)	937
Attributable to:
Owners of the Company	(7,373)	938
Non-controlling interest	-	(1)
	(7,373)	937

CADOGAN ENERGY SOLUTIONS PLC

Consolidated Balance Sheet

As at 31 December 2024

The consolidated financial statements of Cadogan Energy Solutions plc, registered in England and Wales no.

05718406, were approved by the Board of Directors and authorised for issue on 25 April 2025. They were

signed on its behalf by:

Fady Khallouf

Chief Executive Officer

25 April 2025

The notes on pages 82 to 110 form an integral part of these financial statements.

Notes

		2024	2023
ASSETS		$’000	$’000
Non-current assets
Intangible exploration and evaluation assets	16	-	-
Property, plant and equipment	17	5,329	5,768
Right-of-use assets	23	165	246
Deferred tax asset	22	-	370
		5,494	6,384
Current assets
Inventories	19	515	364
Trade and other receivables	20	354	310
Loan receivable at amortised cost	28	10,388	17,074
Cash	21	14,381	14,155
		25,638	31,903
Total assets		31,132	38,287
LIABILITIES
Non-current liabilities
Long-term lease liability	23	(75)	(148)
Provisions	25	(110)	(114)
Current liabilities		(185)	(262)
Trade and other payables	24	(1,652)	(1,366)
Short-term lease liability	23	(98)	(87)
Current provisions	25	(129)	(131)
		(1,879)	(1,584)
Total liabilities		(2,064)	(1,846)
NET ASSETS		29,068	36,441
EQUITY
Share capital	26	13,832	13,832
Share premium		514	514
Retained earnings		179,571	185,803
Cumulative translation reserves		(166,438)	(165,297)
Other reserves	27	1,589	1,589
Equity attributable to owners of the Company		29,068	36,441
Non-controlling interest		-	-
TOTAL EQUITY		29,068	36,441

CADOGAN ENERGY SOLUTIONS PLC

Consolidated Cash Flow Statement

For the year ended 31 December 2024

		2024	2023
	Note	$’000	$’000
Operating loss		(565)	(627)
Adjustments for:
Depreciation and depletion of property, plant and equipment, and right-of-use	17,23	813	821
assets
Changes in provision of oil and gas assets	16	6	(218)
Loss on disposal of property, plant and equipment	17	-	19
Impairment of inventories	9	28	44
Impairment of receivables	9	11	3
Reversal of impairment of VAT recoverable	9,20	(39)	(54)
Effect of foreign exchange rate changes		1,122	(538)
Operating cash inflow/(outflow) before movements in working capital		1,376	(550)
Increase in inventories		(219)	(131)
Increase in receivables		(663)	(127)
Increase in payables		644	370
Cash used by operations		1,138	(438)
Income tax paid		(447)	-
Net cash inflow/(outflow) from operating activities		691	(438)
Investing activities
Purchases of property, plant and equipment		(1,048)	(58)
Interest received		800	796
Net cash (used by)/generated in investing activities		(248)	738
Financing activities
Repayment of lease liability		(118)	(132)
Net cash from financing activities		(118)	(132)
Net increase in cash		326	168
Effect of foreign exchange rate changes		(100)	53
Cash at beginning of year		14,155	13,934
Cash at end of year		14,381	14,155

As at 31 January 2025, following the conclusion of the Settlement Agreement with Proger, the Group’s cash

balance stood at $24.7 million.

CADOGAN ENERGY SOLUTIONS PLC

Consolidated Statement of Changes in Equity

For the year ended 31 December 2024

						Equity
		Share		Cumulative		attributable		Non-
	Share Retained premium			translation		controlling Other to owners of
	capital	account	earnings	reserves reserves		the	interest	Total
	$’000	$’000	$’000	$’000	$’000	Company	$’000	$’000
As at 1 January 2023	13,832	514	184,331	(164,976)	1,589	35,290	237	35,527
Net loss for the year	-	-	1,259	-	-	1,259	(1)	1,258
Other comprehensive	-	-	-	(321)	-	(321)	-	(321)
profit/loss
Total comprehensive	-	-	1,259	(321)	-	938	(1)	937
profit/loss for the year
Acquisition of non- controlling interests	-	-	213	-	-	213	(236)	(23)
As at 1 January 2024	13,832	514	185,803	(165,297)	1,589	36,441	-	36,441
Net income for the year	-	-	(6,232)	-	-	(6,232)	-	(6,232)
Other comprehensive	-	-	-	(1,141)	-	(1,141)	-	(1,141)
profit/loss
Total comprehensive loss	-	-	(6,232)	(1,141)	-	(7,373)	-	(7,373)
for the year
As at 31 December 2024	13,832	514	179,571	(166,438)	1,589	29,068	-	29,068

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements

For the year ended 31 December 2024

1. General information

Cadogan Energy Solutions plc (the “Company”, together with its subsidiaries the “Group”), is registered in

England and Wales under the Companies Act 2006. The address of the registered office is 6th Floor, 60

Gracechurch Street, London EC3V 0HR.

The Group principal activity has been up to 2024 oil and gas exploration, development and production; the

Group also conducts gas trading and provides services to other E&P operators. The strategy of the Group is

to expand its activities along the energy value chain, beyond current activities to new forms of energy with a

reduced impact on the environment. The Group is developing several projects for electricity generation,

operational in 2025. Starting from 2025, this activity will become also a main one.

The Company’s shares have a standard listing on the Official List of the UK Listing Authority and are traded

now on the “transition” Market of the London Stock Exchange after the changes in the listing categories

which occurred in July 2024.

2. Adoption of new and revised Standards

New IFRS accounting standards, amendments and interpretations effective from 1 January 2024

The disclosed policies have been applied consistently by the Group for both the current and previous financial

year with the exception of the new standards adopted.

The IFRS financial information has been drawn up on the basis of accounting policies consistent with those

applied in the financial statements for the year to 31 December 2024, except for the following:

(a) Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-

current and Non-current Liabilities with Covenants;

(b) Amendments to IFRS 16 Leases: Lease Liability in a Sale and Leaseback;

Finance Arrangements;

(d) Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of

Accounting Estimates; and

(e) Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single

Transaction.

The application of the above standards has had no impact on the disclosures or the amounts recognised in the

Group's consolidated financial statements.

New IFRS accounting standards, amendments and interpretations not yet effective

Below is a list of new and revised IFRSs that are not yet mandatorily effective (but allow early application) for

the year ended 31 December 2024 and have not been early adopted by the Group. These standards are not

expected to have a material impact on the Group in the future reporting periods and on foreseeable future

transactions.

IFRS accounting standards	Effective	periods
	beginning on or after
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability	1 January 2025
Amendments to IFRS 9, Financial Instruments and IFRS 7, Financial Instruments: Disclosures:	1 January 2026
Classification and Measurement of Financial Instruments
Amendments to IFRS 9 and IFRS 7: Power Purchase Agreements (PPAs), Contracts	1 January 2026
Referencing Nature-dependent Electricity
IFRS 18, Presentation and Disclosure in Financial Statements	1 January 2027
IFRS 19, Subsidiaries without Public Accountability: Disclosures	1 January 2027

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies

(a)

Basis of accounting

The financial statements have been prepared in accordance with UK-adopted International Accounting

Standards in conformity with the requirements of the Companies Act 2006, applicable to companies reporting

under IFRS.

The financial statements have been prepared on the historical cost convention basis.

The financial statements are prepared to nearest thousand.

The principal accounting policies adopted are set out below:

(b)

Going concern

The Group’s cash balance at 31 December 2024 was $14.4 million (2023: $14.2 million). Following the closing

of the Settlement Agreement with Proger in January 2025, the Group’s cash balance was $24.7 million as at 31

January 2025. The Directors consider that the funds available at the date of the issue of these financial

statements are sufficient for the Group to manage its business risks and planned investments successfully and

meet its ongoing liabilities as they full due for at least twelve months from the date of signing of these financial

statements.

The Directors’ have carried out a robust assessment of the principal risks facing the Group.

The Group’s forecasts and projections, taking into account reasonably possible changes in trading activities,

operational performance, flow rates for commercial production and the price of hydrocarbons sold to Ukrainian

customers, show that there are reasonable expectations that the Group will be able to operate on funds

currently held and those generated internally, for the foreseeable future.

Notwithstanding the Group’s current financial performance and position, the Board are cognisant of the actual

risks related to the war situation in Ukraine. The Board has considered possible reverse stress case scenarios

for the impact on the Group’s operations, financial position and forecasts. Whilst the potential future impacts

of the invasion of Ukraine by Russia are unknown, the Board has considered operational disruption that may

be caused by the factors such as a) restrictions applied by governments, illness amongst our workforce and

disruption to supply chain and sales channels; b) market volatility in respect of commodity prices associated in

addition to military and geopolitical factors.

In addition to sensitivities that reflect future expectations regarding country, commodity price and currency

risks that the Group may encounter reverse stress tests have been run to reflect possible negative effects of

the war in Ukraine. The Group’s forecasts demonstrate that owing to its cash resources the Group is able to

meet its operating cash flow requirements and commitments whilst maintaining significant liquidity for a period

of at least the next 12 months from the date of signing of these financial statements allowing for sustained

reductions in commodity prices and extended and severe disruption to operations should such a scenario occur.

After making enquiries and considering the uncertainties described above, the Directors have a reasonable

expectation that the Company and the Group have adequate resources to continue in operational existence for

the foreseeable future and consider the going concern basis of accounting to be appropriate and, thus, they

continue to adopt the going concern basis of accounting in preparing the annual financial statements.

(c)

Basis of consolidation

The consolidated financial statements incorporate the financial statements of the Company and entities

controlled by the Company (its subsidiaries) made up to 31 December each year. IFRS 10 defines control to be

investor control over an investee when it is exposed, or has rights, to variable returns from its involvement with

the investee and has the ability to control those returns through its power over the investee. The results of

subsidiaries disposed of during the year are included in the consolidated income statement from the effective

date of acquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are

made to the financial statements of subsidiaries to bring accounting policies used into line with those used by

the Group. All intra-group transactions, balances, income and expenses are eliminated on consolidation.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies (continued)

(c)

Basis of consolidation (continued)

Non-controlling interests in subsidiaries are identified separately from the Group’s equity therein. Those

interests of non-controlling shareholders that are present ownership interests entitling their holders to a

proportionate share of net assets upon liquidation may be initially measured at fair value or at the non-

controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The choice

of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are initially

measured at fair value.

Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests at

initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total

comprehensive income is attributed to non-controlling interests even if this results in the non-controlling

interests having a deficit balance.

Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity

transactions. The carrying amount of the Group’s interests and the non-controlling interests are adjusted to

reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which

the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised

directly in equity and attributed to the owners of the Company.

(d)

Revenue recognition

Revenue from contracts with customers is recognised when or as the Group satisfies a performance obligation

by transferring a promised good or service to a customer. A good or service is transferred when the customer

obtains control of that good or service. Revenue is measured based on measurement principles of IFRS 15 and

represents amounts receivable for hydrocarbon products and services provided in the normal course of

business, net of value added tax (‘VAT’) and other sales-related taxes, excluding royalties on production.

Royalties on production are recorded within cost of sales.

The crude oil produced by the upstream operations is sold to external customers. Revenue from the sale of

crude oil is recognised at the point in time when control of the product is transferred to the customer, which is

typically when goods are despatched, and title has passed. The Group despatches oil at the production point

(EXW incoterms) therefore the Group has no transportation and shipping costs associated with the transfer of

the product to the customer.

The Group’s sales of crude oil are priced based on the consideration specified in contracts with customers based

on a conducted tender result on the opened tender platform. Invoices are typically paid at the day of product

despatch.

E&P and Trading business segments

The transfer of control of hydrocarbons usually coincides with title passing to the customer and the customer

taking physical possession as the product passes a physical point such as a designated point in the pipeline for

the sale of gas or loading point in the case of oil. The Group principally satisfies its performance obligations at

a point in time.

To the extent that revenue arises from test production during an evaluation programme, an amount is credited

to evaluation costs and charged to cost of sales, to reflect a zero-net margin.

Interest income is accrued on a time basis, by reference to the principal outstanding and at the effective interest

rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected

life of the financial asset to that asset’s net carrying amount on initial recognition.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies (continued)

(e)

Foreign currencies

The functional currency of the Group’s Ukrainian operations is Ukrainian Hryvnia. The functional currency of

the Group’s UK subsidiaries and the parent company is US Dollar. The Group’s presentational currency is US

Dollar accordingly.

In preparing the financial statements of the individual companies, transactions in currencies other than the

functional currency of each Group company (‘foreign currencies’) are recorded in the functional currency at the

rates of exchange prevailing on the dates of the transactions. At each balance sheet date, monetary assets and

liabilities that are denominated in foreign currencies are retranslated into the functional currency at the rates

prevailing on the balance sheet date. Non-monetary assets and liabilities carried at fair value that are

denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was

determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not

retranslated. Foreign exchange differences on cash are recognized in operating profit or loss in the period in

which they arise.

Exchange differences are recognized in the profit or loss in the period in which they arise except for exchange

differences on monetary items receivable from or payable to a foreign operation for which settlement is neither

planned nor likely to occur. This forms part of the net investment in a foreign operation, which is recognized in

the foreign currency translation reserve and in profit or loss on disposal of the net investment.

For the purpose of presenting consolidated financial statements, the results and financial position of each entity

of the Group, where the functional currency is not the US dollar, are translated into US dollars as follows:

i. assets and liabilities of the Group’s foreign operations are translated at the closing rate on the

balance sheet date;

ii. income and expenses are translated at the average exchange rates for the period, where it

approximates to actual rates. In other cases, if exchange rates fluctuate significantly during that

period, the exchange rates at the date of the transactions are used; and

iii. all resulting exchange differences arising, if any, are recognised in other comprehensive income

and accumulated equity (attributed to non-controlling interests as appropriate), transferred to the

Group’s translation reserve. Such translation differences are recognised as income or as expenses

in the period in which the operation is disposed of.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and

liabilities of the foreign entity and translated at the closing rate.

The relevant exchange rates used were as follows:

			Year ended 31 December 2024	Year ended 31 December 2023
	GBP/USD	EURO/USD	USD/UAH	GBP/USD	EURO/USD	USD/UAH
Closing rate	1.25369	1.0388	42.3997	1.2732	1.1038	38.3480
Average rate	1.2782	1.0821	40.4528	1.2440	1.0817	37.0867

(g)

Taxation

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as

reported in the consolidated income statement because it excludes items of income or expense that are taxable

or deductible in other years and it further excludes items that are never taxable or deductible. The Group’s

liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the

balance sheet date.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies (continued)

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of

assets and liabilities in the financial statements and the corresponding tax bases used in the computation of

taxable profit. This is accounted for using the balance sheet liability method. Deferred tax liabilities are generally

recognized for all taxable temporary differences and deferred tax assets are recognised to the extent that it is

probable that taxable profits will be available against which deductible temporary differences can be utilised.

Such assets and liabilities are not recognised if the temporary difference arises from the initial recognition of

goodwill or from the initial recognition (other than in a business combination) of other assets and liabilities in a

transaction that affects neither the taxable profit nor the accounting profit. Deferred tax liabilities are

recognised for taxable temporary differences arising on investments in subsidiaries and associates, and

interests in joint ventures, except where the Group is able to control the reversal of the temporary difference,

and it is probable that the temporary difference will not reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent

that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be

recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability

is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it

relates to items charged or credited in other comprehensive income, in which case the deferred tax is also dealt

with in other comprehensive income.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets

against current tax liabilities and when they relate to income taxes levied by the same taxation authority and

the Group intends to settle its current tax assets and liabilities on a net basis.

In case of the uncertainty of the tax treatment, the Group assesses, whether it is probable or not, that the tax

treatment will be accepted, and to determine the value, the Group use the most likely amount or the expected

value in determining taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates.

(h)

Other property, plant and equipment

Property, plant and equipment (‘PP&E’) are carried at cost less accumulated depreciation and any recognized

impairment loss. Depreciation and amortisation is charged so as to write-off the cost or valuation of assets,

other than land, over their estimated useful lives, using the straight-line method, on the following bases:

Other PP&E 10% to 30%

The gain or loss arising on the disposal or retirement of an asset is determined as the difference between the

sales proceeds and the carrying amount of the asset and is recognised in income.

(i)

Right-of-use assets

The Group leases various offices, equipment, wells, and land. Contracts may contain both lease and non-lease

components. The Group allocates the consideration in the contract to the lease and non-lease components

based on their relative stand-alone prices.

Assets arising from a lease are initially measured on a present value basis.

Right-of-use assets are measured at cost comprising the following:

● the amount of the initial measurement of the lease liability;

● any lease payments made at or before the commencement date less any lease incentives received;

● any initial direct costs; and

● costs to restore the asset to the conditions required by lease agreements.

Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease term on a

straight-line basis.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies (continued)

(j)

Intangible exploration and evaluation assets

The Group applies the modified full cost method of accounting for intangible exploration and evaluation (‘E&E’)

expenditure, which complies with requirements set out in IFRS 6 Exploration for and Evaluation of Mineral

Resources. Under the modified full cost method of accounting, expenditure made on exploring for and

evaluating oil and gas properties is accumulated and initially capitalized as an intangible asset, by reference to

appropriate cost centres being the appropriate oil or gas property. E&E assets are then assessed for impairment

on a geographical cost pool basis, which are assessed at the level of individual licences.

E&E assets comprise costs of (i) E&E activities which are in progress at the balance sheet date, but where the

existence of commercial reserves has yet to be determined (ii) E&E expenditure which, whilst representing part

of the E&E activities associated with adding to the commercial reserves of an established cost pool, did not

result in the discovery of commercial reserves.

Costs incurred prior to having obtained the legal rights to explore an area are expensed directly to the income

statement as incurred.

Exploration and Evaluation costs

E&E expenditure is initially capitalised as an E&E asset. Payments to acquire the legal right to explore, costs of

technical services and studies, seismic acquisition, exploratory drilling, and testing are also capitalised as

intangible E&E assets.

Tangible assets used in E&E activities (such as the Group’s vehicles, drilling rigs, seismic equipment and other

property, plant and equipment) are normally classified as PP&E. However, to the extent that such assets are

consumed in developing an intangible E&E asset, the amount reflecting that consumption is recorded as part

of the cost of the intangible asset. Such intangible costs include directly attributable overheads, including the

depreciation of PP&E items utilised in E&E activities, together with the cost of other materials consumed during

the exploration and evaluation phases.

E&E assets are not amortised prior to the conclusion of appraisal activities.

Treatment of E&E assets at conclusion of appraisal activities

Intangible E&E assets related to each exploration property are carried forward, until the existence (or

otherwise) of commercial reserves has been determined. If commercial reserves have been discovered, the

related E&E assets are assessed for impairment on individual assets basis as set out below and any impairment

loss is recognized in the income statement. Upon approval of a development programme, the carrying value,

after any impairment loss, of the relevant E&E assets is reclassified to the development and production assets

within PP&E.

Intangible E&E assets which relate to E&E activities that are determined not to have resulted in the discovery

of commercial reserves remain capitalised as intangible E&E assets at cost less accumulated amortization,

subject to meeting a pool-wide impairment test in accordance with the accounting policy for impairment of

E&E assets set out below.

Impairment of E&E assets

E&E assets are assessed for impairment when facts and circumstances suggest that the carrying amount may

exceed its recoverable amount. Such indicators include, but are not limited to those situations outlined in

paragraph 20 of IFRS 6 Exploration for and Evaluation of Mineral Resources such as, a) license expiry during year

or in the near future and will not likely to be renewed; b) expenditure on E&E activity neither budgeted nor

planned; c) commercial quantities of mineral resources have been discovered; and d) sufficient data exists to

indicate that carrying amount of E&E asset is unlikely to be recovered in full from successful development or

sale.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies (continued)

Where there are indications of impairment, the E&E assets concerned are tested for impairment. Where the

E&E assets concerned fall within the scope of an established full cost pool, which are not larger than an

operating segment, they are tested for impairment together with all development and production assets

associated with that cost pool, as a single cash generating unit.

The aggregate carrying value of the relevant assets is compared against the expected recoverable amount of

the pool, generally by reference to the present value of the future net cash flows expected to be derived from

production of commercial reserves from that pool. Where the assets fall into an area that does not have an

established pool or if there are no producing assets to cover the unsuccessful exploration and evaluation costs,

those assets would fail the impairment test and be written off to the income statement in full.

Impairment losses are recognised in the income statement and are separately disclosed.

(k) Development and production assets

Development and production assets are accumulated on a field-by-field basis and represent the cost of

developing the commercial Reserves discovered and bringing them into production, together with E&E

expenditures incurred in finding commercial Reserves transferred from intangible E&E assets.

The cost of development and production assets comprises the cost of acquisitions and purchases of such assets,

directly attributable overheads, finance costs capitalised, and the cost of recognising provisions for future

restoration and decommissioning.

Depreciation of producing assets

Depreciation is calculated on the net book values of producing assets on a field-by-field basis using the unit of

production method. The unit of production method refers to the ratio of production in the reporting year as a

proportion of the Proved and Probable Reserves of the relevant field

based on assessments of internal

geologists utilising the most recent Competent Person Report and subsequent drilling and exploration, taking

into account future development expenditures necessary to bring those Reserves into production.

Producing assets are generally grouped with other assets that are dedicated to serving the same Reserves for

depreciation purposes, but are depreciated separately from producing assets that serve other Reserves.

(l) Impairment of development and production assets and other property, plant and equipment

At each balance sheet date, the Group reviews the carrying amounts of its PP&E to determine whether there is

any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable

amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the

asset does not generate cash flows that are independent from other assets, the Group estimates the

recoverable amount of the cash-generating unit to which the asset belongs.

The recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,

the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects

current market assessments of the time value of money and the risks specific to the asset for which the

estimates of future cash flows have not been adjusted.

In determining fair value less cost to sell, the estimated

future cash flows are discounted to their present value using a post-tax discount rate that reflects current

market assessments of the time value of money and the risks specific to the asset for which the estimates of

future cash flows have not been adjusted. Such cash flows include relevant development expenditure that a

market participant would reasonably be expected to undertake.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,

the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment

loss is recognised as an expense immediately.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies (continued)

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is

increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does

not exceed the carrying amount that would have been determined had no impairment loss been recognised for

the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognized as income

immediately.

(m) Inventories

Oil and gas stock and spare parts are stated at the lower of cost and net realisable value. Costs comprise direct

materials and, where applicable, direct labour costs and those overheads that have been incurred in bringing

the inventories to their present location and condition. Cost is allocated using the weighted average method.

Net realisable value represents the estimated selling price less all estimated costs of completion and costs to

be incurred in marketing, selling and distribution.

(n) Financial instruments

Financial assets and financial liabilities are recognised in the consolidated statement of financial position when

the Group becomes party to the contractual provisions of the instrument.

Loan classified at amortised cost

Loan is measured at the amount recognised at initial recognition minus principal repayments, plus or minus the

cumulative amortisation of any difference between that initial amount and the maturity amount, and any loss

allowance. Interest income is calculated using the effective interest method and is recognised in profit and loss.

Changes in fair value are recognised in profit and loss when the asset is derecognised or reclassified. In

accordance with IFRS 9, the loan is measured at amortised cost. The Group applies the simplified approach to

providing for expected credit losses (ECL) prescribed by IFRS 9, which permits the use of the lifetime expected

loss provision for the loan. Expected credit losses are assessed on a forward-looking basis. The loss allowance

is measured at initial recognition and throughout its life at an amount equal to lifetime ECL. Any impairment is

recognized in the income statement.

Trade and other payables

Payables are initially measured at fair value, net of transaction costs and are subsequently measured at

amortized cost using the effective interest method.

Trade and other receivables

Trade and other receivables are recognised initially at their transaction price in accordance with IFRS 9 and are

subsequently measured at amortised cost. The Group applies the simplified approach to providing for expected

credit losses (ECL) prescribed by IFRS 9, which permits the use of the lifetime expected loss provision for all

trade receivables. Expected credit losses are assessed on a forward-looking basis. The loss allowance is

measured at initial recognition and throughout its life at an amount equal to lifetime ECL. Any impairment is

recognised in the income statement.

Cash

Cash comprise cash on hand and on-demand deposits. Deposits are recorded as cash and cash equivalents

when they have a maturity of less than 90 days at inception.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies (continued)

(o) Equity instruments

Ordinary shares are classified as equity. Equity instruments issued by the Company and the Group are recorded

at the proceeds received, net of direct issue costs. Any excess of the fair value of consideration received over

the par value of shares issued is recorded as share premium in equity.

(p) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past

event, it is probable that the Group will be required to settle that obligation, and a reliable estimate can be

made of the amount of the obligation. The amount recognised as a provision is the best estimate of the

consideration required to settle the present obligation at the balance sheet date, taking into account the risks

and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to

settle the present obligation, its carrying amount is the present value of those cash flows.

(q) Decommissioning

A provision for decommissioning is recognized in full when the related facilities are installed. The

decommissioning provision is calculated as the net present value of the Group’s share of the expenditure

expected to be incurred at the end of the producing life of each field in the removal and decommissioning of

the production, storage and transportation facilities currently in place. The cost of recognising the

decommissioning provision is included as part of the cost of the relevant asset and is thus charged to the income

statement on a unit of production basis in accordance with the Group’s policy for depletion and depreciation

of tangible non-current assets. Period charges for changes in the net present value of the decommissioning

provision arising from discounting are included within finance costs.

(r) Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease based on whether the

contract conveys the right to control the use of an identified asset for a period of time in exchange for

consideration. Service agreements for equipment on the working sites are not considered leases as, based upon

an assessment of the terms and nature of their contractual arrangements, the contracts do not convey the right

to control the use of an identified asset.

The right-of-use asset is initially measured based on the initial amount of the lease liability adjusted for any

lease payments made at or before the commencement date, plus any initial direct costs incurred and an

estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site

on which it is located, less any lease incentives received.

The asset is depreciated to the earlier of the end of the useful life of the right-of-use asset or the lease term

using the straight-line method as this most closely reflects the expected pattern of consumption of the future

economic benefits. The lease term includes periods covered by an option to extend if the Group is reasonably

certain to exercise that option. In addition, the right-of-use asset is periodically reduced by impairment losses,

if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the

commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily

determined, the incremental borrowing rate. The lease liability is measured at amortized cost using the

effective interest method. It is remeasured when there is a change in future lease payments arising from a

change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable

under a residual value guarantee, or if the Group changes its assessment of whether it will exercise a purchase,

extension or termination option. When the lease liability is remeasured in this way, a corresponding adjustment

is made to the carrying amount of the right-of-use asset, or the effect is recorded in profit or loss if the carrying

amount of the right-of-use asset has been reduced to zero.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

3. Significant accounting policies (continued)

The Group elected to apply the practical expedient not to recognise right-of-use assets and lease liabilities for

short-term leases that have a lease term of 12 months or less and leases of low-value assets. The Group also

made use of the practical expedient to not recognise a right-of-use asset or a lease liability for leases for which

the lease term ends within 12 months of the date of initial application.

The lease payments associated with these leases are recognised as an expense on a straight-line basis over the

lease term.

Critical accounting judgements and key sources of estimation uncertainty

In the application of the Group’s accounting policies, which are described in note 3, the Directors are required

to make judgements, estimates and assumptions about the carrying amounts of the assets and liabilities that

are not readily apparent from other sources. The estimates and associated assumptions are based on historical

experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates

are recognised in the period in which the estimate is revised if the revision affects only that period or in the

period of the revision and future periods if the revision affects both the current and future periods.

The following are the critical judgements and estimates that the Directors have made in the process of applying

the Group’s accounting policies and that have the most significant effect on the amounts recognised in the

financial statements.

Critical judgements and estimates

(a) Impairment indicator assessment for E&E assets

Cadogan had fully complied with legislative requirements and submitted its application for a 20-year

exploration and production license 5 months before its expiry on 23 December 2019. A decision on the award

was expected to be provided by State Geological Service of Ukraine before 19 January 2020, since all other

intermediary approvals had been secured in line with the applicable legislation requirements. Given the delay

in granting of the new license beyond the regular timeline provided by legislation in Ukraine, Cadogan launched

a claim before the Administrative Court to challenge the non-granting of the 20-year production license by the

Licensing Authority.

In 2022, the claims of Usenco Nadra have been rejected by the Court of 1st Instance, the Court of Appeal and

the Supreme Court.

Considering the circumstances, the Bitlyanska license was fully impaired in 2021.

(b) Impairment of PP&E

Management assesses its development and production assets for impairment indicators and if indicators of

impairment are identified performs an impairment test. Management performed an impairment assessment

using a discounted cash flow model which required estimates including forecast oil prices, reserves and

production, costs and discount rates (note 17).

This test compares the carrying value of the assets at the reporting date with the expected discounted cash

flows from each project prepared under the fair value less cost of disposal approach. For the discounted cash

flows to be calculated, management has used a production profile based on its best estimate of proven reserves

of the assets and a range of assumptions, including an internal oil and gas price profile benchmarked to mean

analysts’ consensus and third party estimates and a discount rate which, taking into account other assumptions

used in the calculation, management considers to be reflective of the risks.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

4. Critical accounting judgements and key sources of estimation uncertainty (continued)

This assessment involves judgement as to (i) the likely commerciality of the asset, (ii) proven (‘1P’) reserves

which are estimated using standard recognised evaluation techniques (iii) future revenues and estimated

development costs pertaining to the asset, (iv) the discount rate to be applied for the purposes of deriving a

recoverable value including estimates of the relevant levels of risk premiums applied to the assets.

The carrying value of PP&E assets at 31 December 2024 was $5.3 million. The impairment assessment was

identified at the level of $13.97 million. Thus, no other impairment was identified.

Judgment is required in assessing the recoverability of VAT assets and the extent to which historical impairment

provisions remain appropriate, particularly noting the recent recoveries against historically impaired VAT. In

forming this assessment, the Group considers the nature and age of the VAT, the likelihood of eligible future

supplies to VAT, the pattern of recoveries and risks and uncertainties associated with the operating

environment (note 9).

Historically, the general volume of accumulated VAT credit was fully reserved as there were no permanent

sources of its utilisation yet (at 31 December 2024: $0.8 million). However, over the course of the year, the

Group managed to realise $39,000, and the reserve was accordingly reversed (note 9). Starting in 2025, the

new electricity generation initiative is set to provide a dynamic solution for utilising the accumulated VAT credit,

enabling its realisation within the first year of the project's operation.

(d) Proger Loan recoverability

The recoverability of the carrying value of the loan to PMP represents a significant accounting judgment. In

making their assessment over estimated recoverability of the loan, management considered the Settlement

Agreement signed with Proger in December 2024. As a result, management concluded that $10.4 million

represents its best estimate of recoverable amount as at 31 December 2024 (2023: $17.1 million). For further

details please refer to note 28.

(e) Well services and rental agreements

The Group’s well rental arrangements in Ukraine for oil and gas extraction activities are outside of the scope of

IFRS 16. Judgment was required in forming this assessment, based on analysis of the scope of IFRS 16 and the

nature of the well rental arrangements. This assessment focused on the extent to which the rental agreements

provided access to sub-surface well structures to extract hydrocarbons versus surface level infrastructure for the

transport and processing of extracted hydrocarbons.

(f) Deferred tax assets

Deferred tax assets and liabilities require management judgement in determining the amounts to be recognised.

In particular, significant judgement is used when assessing the extent to which deferred tax assets should be

recognised, with consideration given to the timing and level of future taxable income in the relevant tax

jurisdiction.

Deferred tax assets are recognised only to the extent it is considered probable that those assets will be

recoverable. This involves an assessment of when those deferred tax assets are likely to reverse, and a

judgement as to whether or not there will be sufficient taxable profits available to offset the tax assets when

they do reverse. This requires assumptions regarding future profitability and is therefore inherently uncertain.

To the extent assumptions regarding future profitability change, there can be an increase or decrease in the level

of deferred tax assets recognised that can result in a charge or credit in the period in which the change occurs.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

4. Critical accounting judgements and key sources of estimation uncertainty (continued)

(g) Determination of oil and gas reserves

Proven oil and gas reserves is the expected quantity of crude oil, natural gas and gas condensate liquids, the

geological and engineering features of which reliably indicate that such reserves can be produced from known

deposits within future years under existing economic and operating conditions. Proven developed reserves are

reserves that are expected to be produced through the use of existing wells using existing equipment and

operating methods. The determination of the level of oil and gas reserves is inherently characterised by

uncertainty and requires the use of professional judgment and periodic revisions in the future. All proven

reserves are subject to revision in accordance with new information regarding exploration drilling, production

activity or changes in economic factors, including commodity prices, contract terms and exploration plans.

Accordingly, financial and accounting estimates based on proven reserves are also subject to changes.

Changes in the level of proven developed reserves, affect the depreciation charges recognised in the financial

statements in the property, plant and equipment item related to development and production assets. Such

changes, for example, can be both the result of production and revision of estimates. A reduction in proven

developed reserves will increase depreciation charges (provided constant production) and will also increase

costs.

The last independent valuation of the Group's oil and gas reserves was carried out as at 31 December 2023.

(h) Depreciation of wells related to hydrocarbon production

Wells related to the production of hydrocarbons (hereinafter referred to as "Wells") are depreciated using the

unit of production method. The cost of Wells is depreciated based on the available reserves of the relevant

hydrocarbons categories (proven developed produced), estimated in accordance with the standards of the

Petroleum Resources Management System (PRMS), prepared by the Oil and Gas Reserves Committee of the

Society of Petroleum Engineers (SPE).

(i) Depreciation of special subsoil use permits related to hydrocarbon extraction

Special permits for the subsoil use, which grant the right to extract hydrocarbons (hereinafter referred to as the

"Permit"), are depreciated using the unit of production method. The cost of the Permit is depreciated based on

the volumes of available reserves of the relevant hydrocarbons of the proved, probable and possible categories

assessed in accordance with SPE-PRMS.

(j) Decommissioning costs

The provision for asset decommissioning represents the present value of costs of decommissioning oil and gas

facilities that are expected to be incurred in the future (Note 25). These provisions were recognised based on

the Company's internal estimates. The underlying estimates include future market prices for the required

decommissioning costs and are based on market conditions and factors, as well as a discount rate. An additional

uncertainty relates to the deadline of decommissioning costs, which depend on the field depletion, future oil

and gas prices and, as a result, the expected point in time when future economic benefits from production are

not expected to be realised. Changes in these estimates may result in changes in the provisions recognised in

the Statement of financial position.

5. Segment information

Segment information is presented on the basis of management’s perspective and relates to the parts of the

Group that are defined as operating segments. Operating segments are identified on the basis of internal

reports provided to the Group’s chief operating decision maker (“CODM”). The Group has identified its senior

management team as its CODM and the internal reports used by the senior management team to oversee

operations and make decisions on allocating resources serve as the basis of information presented. These

internal reports are prepared on the same basis as these consolidated financial statements.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

5.Segment information (continued)

Segment information is analysed on the basis of the type of activity, products sold, or services provided. The

majority of the Group’s operations and all Group’s revenues are located within Ukraine. Segment information

is analysed on the basis of the types of goods supplied by the Group’s operating divisions. The Group’s

reportable segments under IFRS 8 are therefore as follows:

Exploration and Production

▪ E&P activities on the exploration and production licences for natural gas, oil and condensate.

Trading

▪ Import of natural gas from European countries; and

▪ Local purchase and sales of natural gas operations with physical delivery of natural gas.

The accounting policies of the reportable segments are the same as the Group’s accounting policies described

in note 3. Sales between segments are carried out at rates considered to approximate market prices. The

segment result represents operating profit under IFRS before unallocated corporate expenses. Unallocated

corporate expenses include management remuneration, representative expenses and expenses incurred in

respect of the maintenance of office premises. This is the measure reported to the CODM for the purposes of

resource allocation and assessment of segment performance. The Group does not present information on

segment assets and liabilities as the CODM does not review such information for decision-making purposes.

As at 31 December 2024 and for the year then ended the Group’s segmental information was as follows:

	Exploration	Trading	Consolidated
	and Production
	$’000	$’000	$’000
Sales of hydrocarbons	9,119	-	9,119
Other revenue	33	-	33
Sales between segments	-	-	-
Total revenue	9,152	-	9,152
Cost of sales	(5,047)	-	(5,047)
Administrative expenses	(378)	-	(378)
Impairment of other assets	(39)	-	(39)
Adjustments of end of concession	(6)	-	(6)
obligations for E&E assets
Other operating income, net	(19)	-	(19)
Reversal of impairment of other assets	39	-	39
Finance income (1)	507	-	507
Segment results	4,209	-	4,209
Unallocated administrative expenses			(3,144)
Finance income/costs, net			(5,405)
Net foreign exchange loss			(1,123)
Loss before tax			(5,463)

(1) Net finance income includes $507 thousand of interest on cash deposits in Ukraine.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

5.Segment information (continued)

As at 31 December 2023 and for the year then ended the Group’s segmental information was as follows:

	Exploration	Trading	Consolidated
	and Production
	$’000	$’000	$’000
Sales of hydrocarbons	7,141	403	7,544
Other revenue	6	-	6
Sales between segments	-	-	-
Total revenue	7,147	403	7,550
Cost of sales	(4,991)	(400)	(5,391)
Administrative expenses	(497)	(118)	(615)
Impairment of oil and gas assets	(49)	-	(49)
Other operating expenses, net	218	-	218
Impairment of other assets	25	-	25
Reversal of impairment of other assets	2	54	56
Finance income (2)	431	-	431
Segment results	2,286	(61)	2,225
Unallocated administrative expenses			(2,959)
Other income, net			1,454
Net foreign exchange loss			538
Profit before tax			1,258

(2) Net finance income includes $431 thousand of interest on cash deposits used for operations.

Fixed assets related to Exploration and Production segment are disclosed in the note 17.

6. Revenue

	2024	2023
	$’000	$’000
Sale of oil (production) – point in time	9,152	7,147
Sale of gas (trading) – point in time	-	403
Total	9,152	7,550

Revenue is generated in Ukraine. Refer to note 3(e) for details of the performance obligations. Service

revenue and associated contract assets and liabilities are immaterial.

Information about major customers

79% of production business segment revenue arose from sales to five largest customers. Three of them

contributed more than 10% of the total revenue of the production business segment revenue for the year

ended 31 December 2024.

81% of prior year production business segment revenue arose from sales to five largest customers. Each of

them contributed more than 10% of the total revenue of the production business segment revenue for the

year ended 31 December 2023.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

Cost of sales

	2024	2023
	$’000	$’000
Subsoil tax	2,804	2,668
Well rent	870	699
Depreciation	718	713
Staff cost	232	237
Machinery services	110	115
Materials cost	102	126
Electricity	100	80
Security services	69	68
Other expenses	67	81
Insurance	22	204
Natural Gas cost	(47)	400
Total	5,047	5,391

Administrative expenses

	2024	2023
	$’000	$’000
Staff	2,126	1,805
Professional fees	746	1,051
Insurance	170	188
Depreciation	124	169
Office costs including utilities and maintenance	57	57
IT and communication	53	43
Cars and travel	28	43
Bank charges	26	23
Travelling	37	23
Other	155	172
Total	3,522	3,574

Reversal of impairment of other assets

$0.8 million (2023: $0.9 million) of historical VAT receivables remain impaired. Refer to Note 4 and 20.

	2024	2023
	$’000	$’000
VAT recoverable	39	54
Other receivables	-	2
Reversal of impairment of other assets	39	56

	2024	2023
	$’000	$’000
Inventories	(28)	(44)
Other receivables	(11)	-
Other assets	-	(5)
Impairment of other assets	(39)	(49)

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

10.

Other operating (expenses)/income, net

11. Auditor’s remuneration

The analysis of auditor’s remuneration is as follows:

	2024	2023
Audit fees	$’000	$’000
Fees payable to the Company’s auditor and the component auditor for the audit of the Company’s annual accounts	255	192
Fees payable to the Company’s auditor and the component auditor for other services to the Group:
- The audit of the Company’s subsidiaries	8	8
Total audit fees	263	200

12. Staff costs

The average monthly number of employees (including Executive Directors) was:

	2024	2023
	Number	Number
Executive Director	1	1
Other employees	75	73
Total	76	74

Their aggregate remuneration comprised:	$’000	$’000
Wages and salaries	1,566	1,757
Provision for bonus	260	-
Provision for bonus granted in shares	260	-
Social security costs	193	207
Pension costs	79	78
Total	2,358	2,042

13. Finance income/(costs), net

	2024	2023
	$’000	$’000
Reversal of liability accrual	-	395
Interest income on cash deposits in United Kingdom	292	367
Interest income on cash deposits in Ukraine	507	431
Total interest income on financial assets	799	1,193
Interest on lease	(22)	(10)
Unwinding of discount on decommissioning provision (note 25)	(18)	(55)
Total	759	1,128

	2024	2023
	$’000	$’000
Other (expenses)/income	(19)	25
Total	(19)	25

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

13. Finance income/(costs), net (continued)

Loss on Proger loan, net

	2024	2023
	$’000	$’000
Interest on loan (note 28)	1,515	1,457
Total interest income on financial assets	1,515	1,457
Impairment of loan	(7,172)	(700)
Total	(5,657)	757

14. Tax

	2024	2023
	$’000	$’000
Current tax	434	-
Deferred tax	335	-
Total	769	-

The Group’s operations are conducted primarily outside the UK, namely in Ukraine. The most appropriate

tax rate for the Group is therefore considered to be 18% (2023: 18%), the rate of profit tax in Ukraine, which

is the primary source of revenue for the Group. Taxation for other jurisdictions is calculated at the rates

prevailing in the respective jurisdictions.

The taxation charge for the year can be reconciled to the (loss) / profit per the income statement as follows:

	2024	2023
	$’000	$’000
(Loss)/Profit before tax	(5,463)	1,258
Tax (credit) / charge at Ukraine corporation tax rate of 18% (2023: 18%)	(1,031)	226
Permanent differences	1,353	(583)
Unrecognised tax losses generated in the year	835	47
Recognition of previously unrecognised deferred tax assets	-	318
Reversal of deferred tax assets	(335)	-
Effect of different tax rates	(101)	(8)
Adjustments recognised in the current year in relation	721	-
with the current tax of prior years	48	-
Income tax expense recognised in profit or loss	769	-

Permanent differences mostly represent items, including provisions, accruals and impairments related to

taxation in Ukraine, these are items not deductible in tax computations.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

15. (Loss) / Earnings per Ordinary share

Basic earnings/(loss) per Ordinary share is calculated by dividing the net profit/(loss) for the year attributable

to owners of the Company by the weighted average number of Ordinary shares outstanding during the year. In

2024 the Group generated a loss and therefore there is no difference between basic and diluted EPS.

16. Intangible exploration and evaluation assets

Cost	$’000
At 1 January 2023	7,515
Additions	1
Disposals	(615)
Change in estimate of decommissioning assets (note 25)	(218)
Exchange differences	(224)
At 1 January 2024	6,459
Additions	-
Disposals	-
Change in estimate of decommissioning assets (note 25)	6
Exchange differences	(617)
At 31 December 2024	5,848
Impairment
At 1 January 2023	7,515
Disposals	1
Addition	(615)
Change in estimate of decommissioning assets (note 25)	(218)
Exchange differences	(224)
At 1 January 2024	6,459
Addition	-
Disposals	-
Change in estimate of decommissioning assets (note 25)	6
Exchange differences	(617)
At 31 December 2024	5,848
Carrying amount
At 31 December 2024	-
At 31 December 2023	-

The carrying amount of E&E assets at 31 December 2024 relates to the Bitlyanska license.

	2024	2023
(Loss)/earnings attributable to owners of the Company	$’000	$’000
(Loss)/earnings for the purposes of basic loss per share being net loss attributable to owners	(6,232)	1,259
of the Company

Number of shares

	Number	Number
	‘000	‘000
Weighted average number of Ordinary shares used in calculation of earnings per share:
Basic	244,128	244,128
Diluted	244,128	244,128
(Loss)/earnings per Ordinary share	Cent	Cent
Basic and diluted	(2.55)	0.5

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

100

16. Intangible exploration and evaluation assets (continued)

Usenco Nadra has fully complied with legislative requirements and submitted its application for a 20-year

exploration and production license 5 months before its expiry on 23 December 2019. A decision on the award

was expected to be provided by State Geological Service of Ukraine before 19 January 2020, since all other

intermediary approvals had been secured in line with the applicable legislation requirements. Given the delay

for granting of the new license beyond the regular timeline provided by legislation in the Ukraine, Cadogan

filed a claim before the Administrative Court to challenge the non-granting of the 20-year production license

by the Licensing Authority.

After the rejection of its claims, in February 2022, the Company exercised its right for appeal. The Appeal

Court and further on the Supreme Court rejected all the Company’s claims.

The Company fully impaired the Bitlyanska license in 2022.

17. Property, plant and equipment

		Development Constructi
	and	on in
	production assets	progress	Other	Total
Cost	$’000	$’000	$’000	$’000
At 1 January 2023	10,286	-	2,200	12,486
Additions	43	-	15	58
Change in estimate of decommissioning assets (note 25)	20	-	-	20
Disposal	(1,734)	-	(1,160)	(2,894)
Exchange differences	(288)	-	(35)	(323)
At 1 January 2024	8,327	-	1,020	9,347
Additions	120	709	26	855
Change in estimate of decommissioning assets (note 25)	(6)	-	-	(6)
Reclassification to inventory	-	-	(40)	(40)
Disposal	(5)	-	(137)	(142)
Exchange differences	(800)	(33)	(90)	(923)
At 31 December 2024	7,636	676	779	9,091
Accumulated depreciation and impairment
At 1 January 2023	3,846	-	2,007	5,853
Charge for the year	692	-	37	729
Disposals	(1,711)	-	(1,167)	(2,878)
Exchange differences	(95)	-	(30)	(125)
At 1 January 2024	2,732	-	847	3,579
Charge for the year	702	-	30	732
Reversal of impairment	-	-	(37)	(37)
Disposals	(7)	-	(139)	(146)
Exchange differences	(293)	-	(73)	(366)
At 31 December 2024	3,134	-	628	3,762
Carrying amount
At 31 December 2024	4,502	676	151	5,329
At 31 December 2023	5,595	-	173	5,768

Other property, plant and equipment include fixtures and fittings for the development and production

activities.

Construction in progress represents new assets acquired by the Group for its emerging business segment,

the gas-to-power project. As at 31 December 2024, the assets' value includes an electricity generator

Janbacher delivered in December, which is expected for starting operations in July 2025.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

101

17. Property, plant and equipment (continued)

The carrying amount of development and production assets at 31 December 2024 of $4.5 million relates to

the Blazhiv license. Depreciation includes $0.7 million for the Blazhiv license.

Management has performed an impairment review of Development and production assets based on the

underlying discounted cash flow forecasts. The impairment review supported the conclusion that no

impairment was applicable. Key assumptions, used in the impairment assessment, were: future oil prices

which were assumed at a constant $445 (2023: $467), real per tonne; a production forecast with a natural

decline; estimated reserves and a discount rate of 25% for first four years then declining by 1.5% each year

to 8.5% in 2039.

Sensitivity analysis for the Development and production assets

Any impairment is dependent on judgement used in determining the most appropriate basis for the

assumptions and estimates made by management, particularly in relation to the key assumptions described

above. Sensitivity analysis to potential changes in key assumptions to reach break-even has been provided

below:

Change in the assumptions to be break-even

Oil price	(25 %)
Oil production volumes	(17 %)
Discount rate	56 %

18. Subsidiaries

The Company had investments in the following subsidiary undertakings at 31 December 2024:

	Country of	Proportion
	incorporation	of voting
Name	and operation	interest %	Activity	Registered office
Directly held
Cadogan Petroleum Holdings Ltd	UK	100	Holding	6th Floor 60 Gracechurch Street, London,
			company	United Kingdom, EC3V 0HR
Indirectly held
Cadogan Petroleum Holdings BV	Netherlands	100	Holding	Hoogoorddreef 15, 1101 BA Amsterdam
			company
Cadogan Bitlyanske BV	Netherlands	100	Holding	Hoogoorddreef 15, 1101 BA Amsterdam
			company
Zagoryanska Petroleum BV	Netherlands	100	Holding	Hoogoorddreef 15, 1101 BA Amsterdam
			company
LLC Cadogan Ukraine	Ukraine	100	Management	48/50a, Zhylyanska Street, Kyiv, Ukraine
			company
LLC Astroinvest-Energy	Ukraine	100	Trading	5a, Pogrebnyak Street, ap. 2, Zinkiv,
				Poltava region, Ukraine, 38100
SE USENCO Ukraine	Ukraine	100	Production	8, Mitskevycha sq.,Lviv, Ukraine,79000
LLC USENCO Nadra	Ukraine	100	Production	9a, Karpenka-Karoho str., Sambir, Lviv
				region, Ukraine
LLC Astro-Service	Ukraine	100	Service	3 Petro Kozlaniuk str, Kolomyia, Ukraine
			Company
Exploenergy s.r.l.	Italy	90	Exploration	Via Adige 17, San Donato Milanese_
				Milano, CAP 20097, Italy

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

102

19. Inventories

	2024	2023
	$’000	$’000
Natural gas	239	265
Crude oil	126	105
Other inventories	1,178	1,116
Impairment provision	(1,028)	(1,122)
Carrying amount	515	364

	2024	2023
	$’000	$’000
At 1 January	1,122	1,116
Accrual of provision	61	52
Reversal of provision	(47)	(8)
Exchange differences	(108)	(38)
At 31 December	1,028	1,122

The impairment provision at 31 December 2024 is made so as to reduce the carrying value of the inventories

to the net realisable value

and includes $1.03 million provision for other inventories (2023: $1.07million

provision for other inventories, and $52,000 provision for natural gas).

20. Trade and other receivables

	2024	2023
	$’000	$’000
Trade receivables	32	68
Impairment provision for bad debts	(38)	(49)
VAT recoverable	862	1,097
Impairment provision for VAT	(793)	(918)
Prepayments	256	81
Other receivables	35	31
	354	310

This table represents the movements in the impairment provision.

		2024		2023
	VAT	Trade and Other	VAT	Trade and Other
	recoverable	Receivables	recoverable	Receivables
	$’000	$’000	$’000	$’000
At 1 January	918	49	1,003	52
Accrual of provision	-	11	-	-
Reversal of provision	(39)	-	(54)	(2)
Exchange differences	(86)	(22)	(31)	(1)
At 31 December	793	38	918	49

The Group considers that the carrying value of receivables approximates their fair value.

VAT recoverable is presented net of the cumulative provision of $0.8 million (2023: $0.9 million) against

Ukrainian VAT receivable that has been recognised as at 31 December 2024. VAT recoverable relates to the

oil production and gas trading operations and is expected to be recovered through the gas and oil sales VAT.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

103

21. Notes supporting statement of cash flows

Cash at 31 December 2024 of $14.4 million (2023: $14.2 million) comprise cash held by the Group. Ukrainian

subsidiaries of the Group hold $7.3 million as at 31 December 2024 (2023: $5.4 million).

With the start of the Russian invasion into Ukraine on 24 February 2022, the Ukrainian government

introduced Martial Law affecting, among others, aspects relating to lending agreements, foreign exchange

and currency controls and banking activities. As a result of the introduced Martial Law, the National Bank of

Ukraine (“NBU”) has introduced significant currency and capital control restrictions in Ukraine. These

measures are affecting the Group in terms of its cross-border payments to be made, which are restricted and

may be carried out only in exceptional cases specified in the amendments to the resolution No. 18.

Based on the regulations, Ukrainian subsidiaries of the Group are not able to pay dividends to the parent

Company but are able to use the cash in normal course of business.

The Directors consider that the carrying amount of these assets approximates to their fair value.

In addition, lease liability payments have been included as part of the financing activities for the year 2024.

22. Deferred tax

The following are the major deferred tax liabilities and assets recognised by the Group and movements

thereon during the current and prior reporting period:

	Temporary differences
	$’000
Asset at 1 January 2023	319
Deferred tax benefit	-
Exchange differences	51
Asset at 1 January 2024	370
Deferred tax disposal	(335)
Exchange differences	(35)
Asset at 31 December 2024	-

At 31 December, the Group had the following unused tax losses available for offset against future taxable

profits:

	2024	2023
	$’000	$’000
UK	18,685	18,197
Ukraine	39,367	42,113
Netherlands	1,957	1,902
	60,009	62,212

Deferred tax assets have been disposed due to reorganisation and new projects implementation. After

launching new projects, the Group is going to recalculate potential deferred tax assets in respect of those tax

losses where there will be sufficient certainty that profit will be available in future periods against which they

can be utilised. The Group’s unused tax losses of $18.7 million (2023: $18.2 million) relating to losses incurred

in the UK are available to shelter future non-trading profits arising within the Company. Unused tax losses

incurred by Netherlands subsidiaries amount to $1.96 million (2023: $1.9 million). These losses are not

subject to a time restriction on expiry. No deferred tax asset is recorded.

Unused tax losses incurred by Ukraine subsidiaries amount to $39.4 million (2023: $42.1 million). Under

general tax law provisions, these losses may be carried forward indefinitely to be offset against any type of

taxable income arising from the same company. Tax losses may not be surrendered from one Ukraine

subsidiary to another.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

104

23. Lease liabilities

The Group continued to recognise right-of-use assets and lease liabilities based on a rental contract for the

rent of a Kyiv office with maturity date end of February 2024. Additionally, in December 2023 a new rental

contract for the rent of a Kyiv office was signed with the maturity date at the end of January 2027. Right-of-

use assets are depreciated over the useful life of the underlying asset. Depreciation represented as a part of

administrative expenses. Total carrying value of right-of-use assets is $165,000 as of 31 December 2024.

Right of use assets

		Accumulated	Net book
	Cost	depreciation	value
	$’000	$’000	$’000
Right-of-use asset	292	-	-
Accumulated charge	-	(184)	-
At 1 January 2023	292	(184)	108
Additions for the new agreement	230	-	-
Charge for the year	-	(92)	-
At 1 January 2024	522	(276)	246
Disposal for the prior agreement	(292)	-	-
Charge for the prior agreement	-	(16)	-
Disposal of accumulated charge for the prior agreement	-	292	-
Charge for the year	-	(65)	-
At 31 December 2024	230	(65)	165

The following table sets out a maturity analysis of lease liabilities, showing the undiscounted lease payments

to be paid after the reporting date.

	2024	2023
	$’000	$’000
2024	-	95
2025	87	88
2026	92	92
2027	8	8
Less: unearned interest	(14)	(48)
Lease liabilities	173	235

	2024	2023
Analysed as:	$’000	$’000
Current	98	87
Non-current	75	148
Lease liabilities	173	235

24. Trade and other payables

	2024	2023
	$’000	$’000
Accruals	826	430
Trade payables	89	140
Prepayments received	49	54
Other payables	688	742
	1,652	1,366

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

105

24. Trade and other payables (continued)

Trade payables and accruals principally comprise amounts outstanding for ongoing costs. The average credit

period taken for trade purchases is 31 days (2023: 29 days). The Group has financial risk management policies

to ensure that all payables are paid within the credit timeframe.

Other payables include unused vacation reserve provision of $0.4 million (2023: $0.39 million), subsoil tax

payables of $0.22 million (2023: $0.22) and other payables of $0.07 million (2023: $0.13 million).

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

No interest is generally charged on outstanding balances.

25. Provisions

The provisions at 31 December 2024 comprise $0.2 million (2023: $0.2 million) of decommissioning provision.

Decommissioning

	$’000
At 1 January 2023	397
Change in estimate: exploration and evaluation assets (note 16)	(218)
Change in estimate: development and production assets	20
Unwinding of discount on decommissioning provision (note 13)	55
Exchange differences	(9)
At 1 January 2024	245
Change in estimate: exploration and evaluation assets (note 16)	6
Change in estimate: development and production assets	(6)
Unwinding of discount on decommissioning provision (note 13)	18
Exchange differences	(24)
At 31 December 2024	239

	$’000
Non-current	114
Current	131
At 31 December 2023	245
Non-current	110
Current	129
At 31 December 2024	239

In accordance with the Group’s environmental policy and applicable legal requirements as of 31 December

2024 the Group intends to restore the sites it is working on after completing the development activities.

Provision for the decommissioning and site restoration used by development and production assets has been

decreased by $6 thousand due to change in discounting rate used for the provision calculation (2024: 15%;

2023: 17%). The change in the provision has been recognised as development and production assets charge

for the year together with unwinding of discount on decommissioning provision. The change in the provision

of E&E assets has been recognised as impairment.

A long-term provision of $0.11 million (2023: $0.11 million) has been made for decommissioning costs for

Borynya-3 well, which is expected to be incurred in 2039, and Blazhiv-10 well, which is to be incurred at the

end of Blazhiv license period as a result of the demobilisation of oil and gas facilities and respective site

restoration. Current provision of $0.13 million (2023: $0.13 million) has been made for decommissioning

costs, which are expected to be incurred in 2025 as a result of the demobilisation of oil and gas facilities and

respective site restoration on Bitlyanska license.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

106

26. Share capital

Authorised and issued equity share capital

		2024		2023
	Number		Number
Authorised	(‘000)	$’000	(‘000)	$’000
Ordinary shares of £0.03 each Issued	1,000,000	57,713	1,000,000	57,713
Ordinary shares of £0.03 each	244,128	13,832	244,128	13,832

Authorised but unissued share capital of £30 million has been translated into US dollars at the historic

exchange rate of the issued share capital. The Company has one class of Ordinary shares, which carry no right

to fixed income.

Issued equity share capital

	Ordinary shares
	of £0.03
At 31 December 2022	244,128,487
Issued during year	-
At 31 December 2023	244,128,487
Issued during year	-
At 31 December 2024	244,128,487

27. Other reserves

	Reorganisation
	$’000
At 1 January 2024	1,589
Charge for the year	-
At 31 December 2024	1,589

The accumulated amount of reserves at 31 December 2024 is made as accounting entry relating to the

acquisition of CPHL by PLC by means of share exchange in 2006. This was not deemed to be a business

combination as there was no change in control.

28. Financial instruments

Capital risk management

The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern,

while maximising the return to shareholders.

The capital resources of the Group consist of cash arising from equity attributable to owners of the Company,

comprising issued capital, reserves and retained earnings as disclosed in the Consolidated Statement of

Changes in Equity.

Externally imposed capital requirement

The Group is not subject to externally imposed capital requirements.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

107

28. Financial instruments (continued)

Categories of financial instruments

	2024	2023
Financial assets (includes cash)	$’000	$’000
Loan provided at amortised cost	10,388	17,074
Cash	14,381	14,155
Trade and other receivables – amortised cost	29	50
Financial liabilities – measured at amortised cost	24,798	31,279
Trade payables	89	140
Lease liabilities	173	235
Accruals	826	430
Other payables	688	742
	1,776	1,547

The Proger loan is recorded at management’s best estimate of recoverable amount according to the

Settlement Agreement signed with Proger in December 2024.

Since the Call Option was not exercised before the Maturity Date and the asset is held within a business model

whose objective is to hold assets in order to collect contractual cash flows, the Loan provided was reclassified

from ‘Financial assets at fair value through profit and loss’ to ‘Financial assets at amortised cost’.

The year-end loan balance of $10.4 million, the €10 million equivalent, which aligns with the amount

stipulated in the Settlement Agreement. The payment of this amount was made to the Group in January

2025.

Financial risk management objectives

Management co-ordinates access to domestic and international financial markets and monitors and manages

the financial risks relating to the operations of the Group in Ukraine through internal risks reports, which

analyse exposures by degree and magnitude of risks. These risks include commodity price risks, foreign

currency risk, credit risk, liquidity risk and cash flow interest rate risk. The Group does not enter into or trade

financial instruments, including derivative financial instruments, for speculative purposes.

The Audit Committee of the Board reviews and monitors risks faced by the Group at meetings held

throughout the year.

	$’000
As at 1 January 2023	15,825
Movement in accrued interest	1,457
Movement in accrued provision	(700)
Exchange differences	492
As at 1 January 2024	17,074
Movement in accrued interest	1,515
Movement in accrued provision	(7,172)
Exchange differences	(1,029)
As at 31 December 2024	10,388

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

108

28. Financial instruments (continued)

Interest rate risk

Interest rate risk arises from the possibility that changes in interest rates will affect the value of the financial

instruments. The Group is not exposed to interest rate risk because entities of the Group borrow funds at

fixed interest rates.

Commodity price risk

The commodity price risk related to Ukrainian gas and condensate prices and prices for crude oil are the

Group’s most significant market risk exposures. World prices for gas and crude oil are characterised by

significant fluctuations that are determined by the global balance of supply and demand and worldwide

political developments, including actions taken by the Organization of Petroleum Exporting Countries.

The Group does not hedge market risk resulting from fluctuations in gas, condensate and oil prices, and holds

no financial instruments, which are sensitive to commodity price risk.

Foreign exchange risk and foreign currency risk management

The Group holds a large portion of its monetary assets in the US Dollars and Euro, mitigating the exchange

risk between the US Dollars and Euro and monetary liability in the US Dollars. Besides, The Group has

accumulated cash position in hryvnia in Ukraine for new projects, so the hryvnias was added to sensitivity

analysis.

Sensitivity analysis is represented below based on 10% exchange rate deviation:

	As at 31 December	Change in		Change in
	2024	EURO/USD		UAH/USD
		exchange rate		exchange rate
	$’000	10%	-10%	10%	-10%
Cash positions	14,381	139	(139)	723	(723)
Loan receivable at amortised cost	10,388	1,039	(1,039)	-	-
Net assets	29,068	1,178	(1,178)	723	(723)

Inflation risk management

Inflation in Ukraine and in the international market for oil and gas may affect the Group’s cost for equipment

and supplies. The Directors will proceed with the Group’s practices of keeping deposits in US dollar accounts

until funds are needed and selling its production in the spot market to enable the Group to manage the risk

of inflation.

Credit risk management

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial

loss to the Group. The Group’s credit management process includes the assessment, monitoring and

reporting of counterparty exposure on a regular basis. Credit risk with respect to receivables is mitigated by

active and continuous monitoring the credit quality of its counterparties through internal reviews and

assessment. There was no material past due receivables as at year end.

The Group makes allowances for expected credit losses on receivables in accordance with its accounting

policy.

The credit risk on liquid funds (cash) is considered to be limited because the counterparties are financial

institutions with high and good credit ratings, assigned by international credit-rating agencies in the UK and

Ukraine respectively.

The carrying amount of financial assets as at 31 December 2024 of $24.8 million (2023: $31.3 million)

recorded in the financial statements represents the Group’s maximum exposure to credit risk.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

109

28. Financial instruments (continued)

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an

appropriate liquidity risk management framework for the management of the Group’s short, medium and

long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining

adequate cash reserves and by continuously monitoring forecast and actual cash flows.

The following tables sets out details of the expected contractual maturity of financial liabilities.

	Within	3 months More than 1		Total
	3 months	to 1 year	year
At 31 December 2023	$’000	$’000	$’000	$’000
Trade and other payables	1,312	-	-	1,312
Lease liability	5	90	188	283
At 31 December 2024
Trade and other payables	1,603	-	-	1,603
Lease liability	22	65	86	173

The carrying amount of financial liabilities as at 31 December 2024 of $1.8 million (2023: $1.6 million)

recorded in the financial statements demonstrates the stable financial condition of the Group.

2 9. Commitments and contingencies

License contingent liability

The Group has working interests in Blazhiv license to conduct its exploration and development activities in

Ukraine. The license held does not include any obligation on a settlement of exploration activities within its

term.

Tax contingent liabilities

The Group assesses its liabilities and contingencies for all tax years open for audit by UK, Netherlands and

Ukraine tax authorities based upon the latest information available.

Where management concludes that it is not probable that a particular tax treatment is accepted, a provision

is recorded based on the most likely amount or the expected value of the tax treatment when determining

taxable profit (tax loss), tax bases, unused tax losses, unused tax credits and tax rates. The decision should

be based on which method provides better predictions of the resolution of the uncertainty.

Inherent uncertainties exist in estimates of tax contingencies due to complexities of interpretation and

changes in tax laws.

Whilst the Group believes it has adequately provided for the outcome of these matters, certain periods are

under audit by the UK, Netherlands and Ukraine tax authorities, and therefore future results may include

favourable or unfavourable adjustments to these estimated tax liabilities in the period the assessments are

made or resolved. The final outcome of tax examinations may result in a materially different outcome than

assumed in the tax liabilities.

Electricity Generation Commitments

As part of Group’s strategic objectives and approved budget for 2025, the Group is embarking on a new line

of business "electricity generation”. To ensure timely implementation and the launch of the project by year-

end, several agreements were signed with contractors in late 2024 for the provision of essential services. The

total value of these commitments amounts to about $451,000 including VAT.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Consolidated Financial Statements (continued)

For the year ended 31 December 2024

110

30. Related party transactions

All transactions between the Company and its subsidiaries, which are related parties, have been eliminated

on consolidation and are not disclosed in this note.

In February 2019, the Group entered in a 2-year loan agreement with Proger Management & Partners Srl

with an option to convert it into a direct 33% equity interest in Proger Ingegneria. At that time, Mr Michelotti

was a non-executive Director of Proger Ingegneria Srl and Proger Spa, and CEO of Cadogan Petroleum PLC.

Mr Michelotti did not participate to the voting for the approval of the loan agreement at the Board of

Cadogan.

Directors’ remuneration

The remuneration of the Directors, who are the key management personnel of the Group, is set out below

in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. Further information

about the remuneration of individual Directors is provided in the audited part of the Annual Report on

Remuneration 2024 on page 47.

	Purchase of services		Amounts owing
	2024	2023	2024	2023
	$’000	$’000	$’000	$’000
Directors’ remuneration	687	712	23	54
Social contribution on Directors’ remuneration	75	72	-	-

The total remuneration of the highest paid Director was $0.5 million in the year (2023: $0.5 million).

No guarantees have been given or received, and no provisions have been made for doubtful debts in respect

of the amounts owed by related parties.

31. Events after the balance sheet date

In January 2025, Cadogan received 10 million euros as provided in the Settlement Agreement signed with

Proger in December 2024. Subsequently, Cadogan exited from the Loan Agreement, ended all the litigations

procedures and dissolved the pledge over the corresponding shares in Proger Ingegneria.

At the AGM in June 2021, the shareholders approved the resolution 11 for an exceptional bonus of 5% of the

monies recovered from Proger to be paid to Mr Khallouf upon the successful resolution of the reimbursement

of the Proger Loan. After receiving the €10 million in January 2025, the exceptional bonus of Euros 500,000

was due.

In February 2025, AstroInvest Energy signed a €6.2 million purchase agreement for several generators

totalling 12,3 MW of installed capacity to be delivered, installed and be operational in H2 2025.

Exploenergy is expecting the release in June 2025 of the authorisation for the preliminary exploration phase

for its project located in Lombardia (Italy).

CADOGAN ENERGY SOLUTIONS PLC

Company Balance Sheet

As at 31 December 2024

111

Notes

2024

$’000

2023

$’000

ASSETS

Non-current assets

Receivables from subsidiaries

33,874

35,659

33,874

35,659

Current assets

Trade and other receivables

Cash

1,211

1,796

1,211

1,798

Total assets

35,085

37,457

LIABILITIES

Current liabilities

Trade and other payables

(915)

(350)

(915)

(350)

Total liabilities

(915)

(350)

Net assets

34,170

37,107

EQUITY

Share capital

13,832

Share premium

514

Retained earnings

128,543

131,480

Cumulative translation reserves

(108,719)

Total equity

34,170

37,107

As permitted by section 408 of the Companies Act 2006, the Company has elected not to present its profit

and loss account for the year. The loss for the financial year ended 31 December 2024 was $2.9 million (2023:

loss $0.9 million).

The financial statements of Cadogan Energy Solution plc, registered in England and Wales no. 05718406,

were approved by the Board of Directors and authorised for issue on 25 April 2025.

They were signed on its behalf by:

Fady Khallouf

Chief Executive Officer

25 April 2025

The notes on pages 114 to 117 form part of these financial statements.

CADOGAN ENERGY SOLUTIONS PLC

Company Cash Flow Statement

For the year ended 31 December 2024

112

2024

$’000

2023

$’000

Operating activities

(Loss) for the year

(2,937)

(865)

Adjustments for:

Interest received

Effect of foreign exchange rate changes

Movement in provisions

(25)

953

570

(26)

(491)

Operating cash outflows before movements in working capital

(1,439)

(1,337)

Decrease in receivables

912

698

Decrease in payables

(6)

(37)

Cash used in operations

(533)

(676)

Income taxes paid

Net cash outflow from operating activities

(533)

(676)

Investing activities

Interest received

Net cash generated from investing activities

Net decrease in cash

(508)

(650)

Effect of foreign exchange rate changes

(77)

Cash at beginning of year

1,796

2,391

Cash at end of year

1,211

1,796

CADOGAN ENERGY SOLUTIONS PLC

Company Statement of Changes in Equity

For the year ended 31 December 2024

113

capital

$’000

premium

account

$’000

Retained

earnings

$’000

Other

Reserve

$’000

Cumulative

translation

reserves

$’000

Total

$’000

As at 1 January 2023

13,832

514

132,345

(108,719)

37,972

Net loss for the year

(865)

Total comprehensive loss for the year

(865)

Issue of ordinary shares

As at 1 January 2024

13,832

514

131,480

(108,719)

37,107

Net loss for the year

(2,937)

Total comprehensive loss for the year

(2,937)

As at 31 December 2024

13,832

514

128,543

(108,719)

34,170

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Company Financial Statements

For the year ended 31 December 2024

114

32. Significant accounting policies

The separate financial statements of the Company are presented as required by the Companies Act 2006 (the

“Act”). As permitted by the Act, the separate financial statements have been prepared in accordance with

UK-adopted International Accounting Standards.

The financial statements have been prepared on the historical cost basis. The principal accounting policies

adopted are the same as those set out in note 3 to the Consolidated Financial Statements except as noted

below.

Investments

Investments in subsidiaries are stated at cost less, where appropriate, provisions for impairment.

Receivables from subsidiaries

Loans to subsidiary undertakings are subject to IFRS 9’s expected credit loss model. As all intercompany loans

are repayable on demand, the loan is considered to be in stage 3 of the IFRS 9 ECL model on the basis the

subsidiary does not have enough liquid assets in order to repay the loans if demanded. Lifetime ECLs are

determined using all relevant, reasonable and supportable historical, current and forward-looking

information that provides evidence about the risk that the subsidiaries will default on the loan and the

amount of losses that would arise as a result of that default. Analysis indicated that the Company will fully

recover the carrying value of the loans (net of historic credit loss provisions) so no additional ECL has been

recognised in the current period.

Critical accounting judgements and key sources of estimation uncertainty

The Company’s financial statements, and in particular its investments in and receivables from subsidiaries, are

affected by certain of the critical accounting judgements and key sources of estimation uncertainty.

The critical estimates and judgments referred to application of the expected credit loss model to

intercompany receivables (note 34). Management determined that the interest free on demand loans were

required to be assessed on the lifetime expected credit loss approach and assessed scenarios considering

risks of loss events and the amounts which could be realised on the loans. In doing so, consideration was

given to factors such as the cash held by subsidiaries and the underlying forecasts of the Group’s divisions

and their incorporation of prospective risks and uncertainties.

33. Auditor’s remuneration

The auditor’s remuneration for audit and other services is disclosed in note 11 to the Consolidated Financial

Statements.

34. Investments

The Company’s subsidiaries are disclosed in note 18 to the Consolidated Financial Statements. The

investments in subsidiaries are all stated at cost less any provision for impairment.

35. Financial assets

The Company’s principal financial assets are bank balances and cash and receivables from related parties

none of which are past due. The Directors consider that the carrying amount of receivables from related

parties approximates to their fair value.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Company Financial Statements (continued)

For the year ended 31 December 2024

115

35. Financial assets (continued)

Receivables from subsidiaries

At the balance sheet date gross amounts receivable from the fellow Group companies were $346.9 million

(2023: $348.7 million). The Company did not recognise additional expected credit loss provisions in relation

to receivables from subsidiaries in 2024 (2023: nil). The accumulated provision on receivables at 31 December

2024 was $313 million (2023: $313 million). The carrying value of the receivables from the fellow Group

companies at 31 December 2024 was $33.9 million (2023: $35.7 million). Receivables from subsidiaries are

interest free and repayable on demand. There are no past due receivables. The receivables are classified as

non-current based on the expected timing of receipt notwithstanding their terms.

Cash

Cash comprises cash held by the Company and short-term bank deposits with an original maturity of three

months or less. The carrying value of these assets approximates to their fair value.

36. Financial liabilities

Trade and other payables

2024

$’000

2023

$’000

Accruals

211

166

Unused vacation provision

111

105

Amounts owing to Directors

542

Trade payables

915

350

Trade payables principally comprise amounts outstanding for trade purchases and ongoing costs. The

average credit period taken for trade purchases is 30 days (2023: 30 days).

Unused vacation provision of $111,450 accrued for CEO of the Company (2023: $105,000).

The Directors consider that the carrying amount of trade and other payables approximates to their fair value.

No interest is charged on balances outstanding.

37. Share capital

The Company’s share capital is disclosed in note 26 to the Consolidated Financial Statements.

38. Cumulative translation reserve

The directors decided to change the functional currency of the Company from sterling to US dollars with effect

from 1 January 2016. The effect of a change in functional currency is accounted for prospectively. In other

words, the Company translates all items into the US dollar using the exchange rate at the date of the change.

The resulting translated amounts for non-monetary items are treated as their historical cost. Exchange

differences arising from the translation of an operation previously recognised in other comprehensive income

in accordance with paragraphs 32 and 39(c) IAS 21 “Foreign Currency” are not reclassified from equity to profit

or loss until the disposal of the operation.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Company Financial Statements (continued)

For the year ended 31 December 2024

116

39. Financial instruments

The Company manages its capital to ensure that it is able to continue as a going concern while maximising

the return to shareholders. Refer to note 28 for the Group’s overall strategy and financial risk management

objectives.

The capital resources of the Company consist of cash arising from equity, comprising issued capital, reserves

and retained earnings.

Categories of financial instruments

2024

$’000

2023

$’000

Financial assets – measured at amortised cost

Cash

1,211

1,796

Amounts due from subsidiaries

33,874

35,659

35,085

37,455

Financial liabilities – measured at fair value

Trade creditors

(185)

(184)

(185)

(184)

Interest rate risk

All financial liabilities held by the Company are non-interest bearing. As the Company has no committed

borrowings, the Company is not exposed to any significant risks associated with fluctuations in interest rates.

Credit risk

Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial

loss to the Company. For cash, the Company only transacts with entities that are rated equivalent to

investment grade and above. Other financial assets consist of amounts receivable from related parties.

The Company’s credit risk on liquid funds is limited because the counterparties are banks with high credit

ratings assigned by international credit-rating agencies.

The carrying amount of financial assets recorded in the Company financial statements, which is net of any

impairment losses, represents the Company’s maximum exposure to credit risk.

Liquidity risk management

Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an

appropriate liquidity risk management framework for the management of the Company’s short, medium and

long-term funding and liquidity management requirements. The Company maintains adequate reserves, by

continuously monitoring forecast and actual cash flows.

The Company’s financial liabilities are immaterial and therefore no maturity analysis has been presented.

Foreign exchange risk and foreign currency risk management

The Company holds a large portion of its monetary assets in the US Dollars and Euro, mitigating the exchange

risk between the US Dollars and Euro and monetary liability in the US Dollars. More information on the

foreign exchange risk and foreign currency risk management is disclosed in note 28 to the Consolidated

Financial Statements.

CADOGAN ENERGY SOLUTIONS PLC

Notes to the Company Financial Statements (continued)

For the year ended 31 December 2024

117

40. Related parties

Amounts due from subsidiaries

The Company has entered into a number of unsecured related party transactions with its subsidiary

undertakings. The most significant transactions carried out between the Company and its subsidiary

undertakings are mainly for short and long-term financing. Amounts owed from these entities are detailed

below:

2024

$’000

2023

$’000

Cadogan Petroleum Holdings Limited

33,874

35,659

33,874

35,659

Refer to note 34 for details on the Company’s receivables due from subsidiaries.

The remuneration of the Directors, who are the key management personnel of the Group, is set out below

in aggregate for each of the categories specified in IAS 24 Related Party Disclosures. In 2024 there were no

other employees in the Company. Further information about the remuneration of individual Directors is

provided in the audited part of the Annual Report on Remuneration 2024 on pages 44 to 48.

Purchase of services

Amounts owing

2024

$’000

2023

$’000

2024

$’000

2022

$’000

Directors’ remuneration

687

712

Social contribution on Directors’ remuneration

The total remuneration of the highest paid Director was $0.47 million in the year (2023: $0.5 million).

41. Events after the balance sheet date

Events after the balance sheet date are disclosed in note 31 to the Consolidated Financial Statements.

CADOGAN ENERGY SOLUTIONS PLC

Glossary

118

IFRSs International Financial Reporting Standards

JAA Joint activity agreement

UAH Ukrainian hryvnia

GBP Great Britain pounds

$ United States dollars

bbl Barrel

boe Barrel of oil equivalent

mmboe Million barrels of oil equivalent

mboe Thousand barrels of oil equivalent

mboepd Thousand barrels of oil equivalent per day

boepd Barrels of oil equivalent per day

bcf Billion cubic feet

mmcm Million cubic metres

mcm Thousand cubic metres

Reserves Those quantities of petroleum anticipated to be commercially

recoverable by application of development projects to known

accumulations from a given date forward under defined conditions.

Reserves include proved, probable and possible reserve categories.

Proved Reserves Those additional Reserves which analysis of geoscience and engineering

data can be estimated with reasonable certainty to be commercially

recoverable, from a given date forward, from reservoirs and under

defined economic conditions, operating methods and government

regulations.

Probable Reserves Those additional Reserves which analysis of geoscience and engineering

data indicate are less likely to be recovered than proved Resources but

more certain to be recovered than possible Reserves.

Possible Reserves Those additional Reserves which analysis of geoscience and engineering

data indicate are less likely to be recoverable than probable Reserves.

Contingent Resources Those quantities of petroleum estimated, as of a given date, to be

potentially recoverable from known accumulations by application of

development projects, but which are not currently considered to be

commercially recoverable due to one or more contingencies.

Prospective Resources Those quantities of petroleum which are estimated as of a given date to

be potentially recoverable from undiscovered accumulations.

P1 Proved Reserves

P2 Probable Reserves

P3 Possible Reserves

1P Proved Reserves

2P Proved plus Probable Reserves

3P Proved plus Probable plus Possible Reserves

Workover The process of performing major maintenance or remedial treatment of

an existing oil or gas well

E&E / E&P Exploration and Evaluation / Exploration and Production

LTI Lost time incidents

CADOGAN ENERGY SOLUTIONS PLC

Shareholder Information

119

Enquiries relating to the following administrative matters should be addressed to the Company’s

registrars: Link Group, 10th Floor, Central Square, 29 Wellington Street, Leeds LS1 4DL.

Telephone: 0371 664 0300. Calls are charged at the standard geographic rate and will vary by

provider. Calls outside the United Kingdom will be charged at the applicable international rate.

Lines are open between 09:00 – 17:30, Monday to Friday excluding public holidays in England

and Wales.

▪ Loss of share certificates.

▪ Notification of change of address.

▪ Transfers of shares to another person.

▪ Amalgamation of accounts: if you receive more than one copy of the Annual Financial

Report, you may wish to amalgamate your accounts on the share register.

You can access your shareholding details and a range of other services at the Shareholder Portal

www.signalshares.com.

Information concerning the day-to-day movement of the share price of the Company can be

found on the Group’s website www.cadoganpetroleum.com or that of the London Stock

exchange www.prices.londonstockexchange.com.

Unsolicited mail

As the Company’s share register is, by law, open to public inspection, shareholders may receive

unsolicited mail from organisations that use it as a mailing list. To reduce the amount of

unsolicited mail you receive, contact: The Mailing Preference Service, FREEPOST 22, London

W1E 7EZ. Telephone: 0845 703 4599. Website: www.mpsonline.org.uk.

CADOGAN ENERGY SOLUTIONS PLC

Shareholder Information

120

Financial calendar 2024/2025

Annual General Meeting 20 June 2025

Half Yearly results announced September 2024

Annual results announced 25 April 2025

Investor relations

Enquiries to: info@cadogan-es.com , info@cadoganpetroleum.com

Registered office, United Kingdom

Shakespeare Martineau LLP,

6th Floor, 60 Gracechurch Street, London EC3V 0HR

Registered in England and Wales no. 05718406

Ukraine

48/50A Zhylyanska Street

Business center “Prime”, 8th floor

01033 Kyiv

Ukraine