Maha Energy : Q1 2024 Maha Energy Eng

Q1

Report for the

THREE MONTHS ENDED 31 March 2024

(org number: 559018-9543)

Maha Energy - Three months ended 31 March 2024

Highlights

(all amounts are in US dollars unless otherwise noted)

First Quarter 2024

• Maha Energy pays EUR 4.6 million and signs agreements to potentially invest and acquire 24% of indirect equity interest in PetroUrdaneta, a Venezuelan oil company;
• Maha Energy acquires 5% of 3R Petroleum, a Brazilian oil and gas company;
• Earnout from sale of Maha Energy Brasil Ltda. of approximately 1.5 million received;
• As a result of Oman Asset Held for Sale, Oman is presented as discontinued operations in this report;
• Daily oil production for the period from continuing operations in Illinois Basin averaged 334 BOEPD, up 43% following launch of new production wells. Including non-consolidated production from investment in associate 3R Offshore of 1,713 BOEPD, total production amounted to 2,047 BEOPD;
• Revenue from continuing operations of 2.2 million, up 46% due to three new wells that increase the production and hence sales volumes;
• Operating Netback from continuing operations of 1.2 million up 82% the company maintains the production expense stable following higher sales volumes;
• EBITDA from continuing operations of 0.4 million (Q1 2023: (0.7) million);
• Continuing operations Net Result of 6.0 million (Q1 2023: (2.8) million);
• Discontinued operations Net Result of (0.3) million (Q1 2023: (1.2) million);
• Earnings per share basic and diluted of 0.04 (Q1 2023: (0.02));
• Total cash balance on 31 March 2024 of 47.6 million, including restricted cash of 38.1 million (31 December 2023: 131,1million). The company has a short investment of 79.1 million, represented by 3R Petroleum shares.

Subsequent Events

• Maha Energy has signed definitive agreements with 3R Petroleum regarding the roll-up of its 15% holdings in 3R Offshore through the merge of its wholly owned subsidiary Maha Energy (Holding) Brasil Ltda. ("Maha Holding Brazil") into 3R Petroleum;
• Maha Energy has expanded its financial exposure by investing in debentures of 3R Offshore, amounting around USD 3 million, to support its operations, in line with its precedent investment strategies. The debentures in 3R Offshore held by Maha will not be included in the transaction between 3R Petroleum and Maha and all the terms and conditions will be unchanged.

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Maha Energy - Three months ended 31 March 2024

Financial Summary

The table below presents the highlights of the continuing operations:

	Financial Summary (TUSD)			Q1 2024			Q1 2023			Full Year
							2023
Average (BOEPD)	334		233		197
Revenue	2,167	1,486		5,226
Operating Netback	1,182	648		2,197
EBITDA	441		(708)		(2,905)
Net Result	6,029		(2,839)		(5,307)
Earnings per share (basic & diluted)	0.04	(0.02)		(0.03)
Financial Liabilities	(29,190)		(42,743)		(34,379)
Financial assets	91,783		302		9,134
Cash and cash equivalents (including restricted cash)	47,684		72,802		131,119

Regarding the discontinued operationsof Maha Brazil in Q1 2023 and Oman in Q1 2024:

	Financial Summary	(TUSD)			Q1 2024			Q1 2023			Full Year
							2023
Average (BOEPD)			-	1,562		1,562
Revenue			-	9,049		9,049
Operating Netback			-	6,755		6,755
EBITDA			(252)		6,637		4,272
Net Result			(256)		(1,184)		(28,646)
Earnings per share (basic & diluted)	0.00		(0.01)		(0.16)
Financial Liabilities			-		-		-
Financial assets (3R's shares)	-		-		-
Cash and cash equivalents (including restricted cash)	445	13,985		5,998
Continuing and discontinuing operation combined:
	Financial Summary	(TUSD)			Q1 2024			Q1 2023			Full Year
							2023
Average (BOEPD)			334	1,795		1,759
Revenue			2,167	10,535		14,275
Operating Netback			1,182	7,403		8,952
EBITDA			189		5,929		1,367
Net Result			5,773	(4,023)		(33,953)
Earnings per share (basic & diluted)	0.04	(0.03)		(0.19)
Financial Liabilities			(29,190)		(42,743)		(34,379)
Financial assets			91,783		302		9,134
Cash and cash equivalents (including restricted cash)	48,129		86,787		137,117

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Maha Energy - Three months ended 31 March 2024

Letter to shareholders

Dear Friends and Fellow Shareholders,

The first quarter in 2024 turned out to be just as intense and eventful as last year. We kicked off the year by using our substantial cash position to make a strategic acquisition of 5% in the Brazilian oil and gas company 3R Petroleum. We anticipated that the Brazilian market presented an opportune time for consolidation, enabling the optimization of asset portfolios and the realization of significant synergies Soon afterwards, two of Maha's board directors were elected board members in 3R Petroleum in accordance with the proposal letter sent by Maha. During Q2, we have first announced the signing of a Memorandum of Understanding between Maha, Enauta and 3R Petroleum and later in May we announced we had signed definitive agreements with 3R Petroleum. In the merger of shares between 3R Petroleum and Enauta, Maha will roll up its 15% holdings in 3R Petroleum Offshore S.A. in exchange for shares corresponding to 2.17% of the combined entity, in addition to the current position Maha already has in 3R Petroleum. Hence, upon the conclusion of the transaction Maha would hold approximately 4.76% of the shares in one of the leading and most diversified independent companies operating in the Latin American oil and gas chain, with a robust cash flow generation and a balanced portfolio, and high growth potential over the next 5 years, with resilience to price cycles and high competitiveness for expansion.

The first quarter was also eventful for our position in Venezuela. We signed the definitive agreements and paid the first installment of EUR 4.6 million regarding an exclusivity period to exercise our call option. This concluded another important step for us in Venezuelan. During the quarter, we continued with our extensive due diligence on PetroUrdaneta and its assets. In April, the U.S. Department of the Treasury (OFAC) announced that the temporary license authorizing transactions with certain sanctioned parties in Venezuela was withdrawn, but that OFAC will consider specific license requests, on a case-by-case basis, going forward. We anticipated that this could happen and had already applied for a specific license covering our potential project in PetroUrdaneta. We remain very confident about our possibilities to start producing the vast resources of oil at the PetroUrdaneta fields, as we envisage a very attractive risk-reward profile for this transaction. I personally had the pleasure to recently visit the fields and spent two weeks in Venezuela reviewing our development plan. I am very comfortable with the potential to increase production and generate significant reserves for Maha going forward. As soon as we have clarity about our OFAC license request and about the approvals we need from PDVSA, I look forward to disclosing more details about the development plan. We also believe that Maha's entry in PetroUrdaneta will bring many positive economic, social and environmental impacts to the region and its population.

In the Middle East, Maha signed the SPA regarding the sale of our Omani operations to Mafraq Energy for USD 2 million and a potential earn-out of up to USD 12 million linked to future production. Closing of the transaction is expected for Q2, pending government approvals and other conditions precedent. Meanwhile, Mafraq is already responsible for carrying 100% of the project's costs.

The production from our assets decreased 8% compared to Q4 2023, as a result of scheduled shut down of operations at Papa Terra in January and mainly in February when the connection of a new well to the production system was conducted. However, our production in Illinois Basin increased 43% compared to Q1 2023 and over 100% compared to Q4 2023, albeit from low levels. The production increase was a result of the production launch of new wells.

Our US assets are the only production we consolidate, and our revenue for Q1 2024 increased 46% and amounted to TUSD 2,167. Our EBITDA improved to TUSD 441, up from TUSD -708 in Q1 last year. Our share of income from investment in associate, Maha's net non-cash income portion from the Papa Terra and Peroá assets, amounted to TUSD 888 for the quarter. However, the main financial events for the quarter were not related to our production. We received an earnout of approximately USD 1.5 million from last year's sale of Brazil onshore assets. Even more significant was the finance income of USD 9.3 million for the first quarter driven by an unrealized gain on our investment in 3R Petroleum's shares. The strong financial performance resulted in a net result of USD 6.0 million, up from a loss of USD 2.8 million in Q1 2023.

Last quarter, I wrote in this letter that we were committed to boosting the visibility of our assets' fair market value. The rollup transaction of our indirect interest in 3R Offshore, should - based at current share price in 3R Petroleum - mark that we have about doubled the value of the investment we made in 3R Offshore last year. It also reduced the asset portfolio risk. And it offers a substantial upside as the significant synergies between the combined companies materialize. We will continue to keep you updated on the progress of this transaction.

So stay tuned - our journey of growth continues!

Kjetil Braaten Solbraekke (CEO)

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Maha Energy - Three months ended 31 March 2024

Financial Report for the Three Months Ended 31 March 2024

OPERATIONAL AND FINANCIAL REVIEW

Assets

Maha

2P reserves year

BOEPD

Partner &

Country

Concession name

Working

Status

end 2023

Q1 2024

Associate

Interest (%)

(mmoboe)

USA

Il Basin (various)

98.41%

Producing

2.8*

334

-

Brazil

Peroá cluster

15%

Producing

1.8*

509

3R Offshore

(Associate)

3R Offshore

(Associate)

Brazil

Papa Terra cluster

9.375%

Producing

21.2*

1,204

and Nova

Técnica

Energia

* As per December 31, 2023

Exclusivity Agreement between Maha and Novonor

PetroUrdaneta

In October 2023, Maha Energy signed an exclusivity private instrument with Novonor Latinvest Energy S.à.r.l ("Novonor") granting Maha exclusive rights to acquire 60% of Novonor's 100% owned Spanish subsidiary Odebrecht E&P España SL r.l ("OE&P" or "Partner B"), which holds 40 percent equity interest of PetroUrdaneta, an O&G joint venture company operating in Venezuela. With that, Maha will indirectly hold 24% equity interest in PetroUrdaneta. The completion of the transaction is contingent on different conditions, including the approval from the Venezuelan authorities. PetroUrdaneta operates in the Maracaibo Basin in northwestern Venezuela. Maha's plan includes well recompletion and workover, with the upside of a potential production and consequent commercialization of the existing associated natural gas reserves in the area.

In March 2024, Maha Energy paid EUR 4.6 million for a 9 - month exclusivity period, representing the first exclusivity period, with additional payments for a possible extension or at closing date. Following the fulfillment of the condition precedent, Maha will be able to enforce a call option to acquire 60% of OE&P, and subsequently a call option for the remaining 40%. On April 17, 2024, the Department of the Treasury's Office of Foreign Assets Control ("OFAC") issued the Venezuela-related General License 44A ("GL 44A"), and the associated frequently asked questions ("Q&A"). GL 44A replaces and supersedes General License 44 ("GL 44"), calling for a wind down for any transactions that were previously authorized and supported by GL 44 within 45 days. Aligned with the OFAC instructions under the aforementioned Q&A, Maha already has applied for a specific license covering its projects for the Venezuelan oil company PetroUrdaneta. The application was filed with US authorities during the first quarter of 2024.

Maha Energy acquires 5% of Brazil oil and gas company 3R Petroleum

On January 17th, 2024, Maha Energy successfully finalized the acquisition of a derivative instrument, affording Maha exposure to 11,999,248 shares, which by that date represented 5% of the equity of 3R Petroleum, at an aggregate consideration of approximately USD 69 million. Following such investment, on February 07, 2024 Maha replaced the derivative instrument previously announced with a direct equity interest in 3R Petroleum.

In addition, as a consequence of the capital increase in 3R Petroleum in January 2024, Maha has acquired an additional 19.936 shares, causing Maha's total holdings to reach 12,019,184 shares, corresponding at that date to five percent (5%) of 3R Petroleum's capital stock.

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Maha Energy - Three months ended 31 March 2024

Afterwards, on February 09, 2024, Maha sent a request to the board of directors of 3R Petroleum to convene an extraordinary shareholders' meeting to resolve upon a new board of directors. Maha proposed that a general meeting in 3R Petroleum resolves on a reduction of the number of Directors from seven (7) to five (5), on a new election of Paulo Thiago Mendonça (chairman of Maha) and Fabio Vassel (board member of Maha) and reelection of Guilherme Affonso Ferreira, Paula Kovarsky Rotta and Harley Lorentz Scardoelli for a term of office of two years. Maha's opinion is that the suggested changes shall positively contribute to the corporate governance of 3R Petroleum and to the achievement of the results aimed by the shareholders.

Maha Energy Offshore

Business combination between Maha and DBO 2.0 in Q2 2023

On 23 May 2023, Maha completed the previously announced business combination with DBO 2.0 S.A. ("DBO") (later re-named Maha Energy Offshore (Brasil) Ltda.). The consideration for all shares in DBO amounted to 34,829,057 new shares in Maha. DBO holds indirectly, through shareholding in 3R Petroleum Offshore S.A., interests in the offshore oil and gas fields called Peroá cluster (15%) and the Papa Terra cluster (9,375%).

Peroá cluster: Peroá, Cangoá and Malombe

The Peroá gas cluster is located in the Espírito Santo basin, offshore Brazil in shallow waters, and includes the producing gasfields Peroá and Cangoá, and the not yet developed discovery Malombe. The cluster is developed with the Peroá platform (3R-1). The gas is sold in accordance with the contract sign in 2023 to supply 400,000 m³/day of natural gas Companhia de Gás do Espírito Santo. The Peroá Cluster has a production capacity around 650,000 m³/day of natural gas and, therefore, any volume of natural gas produced in excess of the commitment can be sold into the Brazilian spot market.

Average net production from the Peroá cluster during the first quarter 2024 remained stable to 509 BOEPD as a result of the sale of the natural gas volume outlined in the take-or-pay contract.

Papa Terra cluster

Papa Terra is a heavy oil field located in deep waters in the Campos Basin, approximately 100 km offshore the coast of the State of Rio de Janeiro, Brazil. The field is developed with an FPSO (3R-3) and a Tension Leg Wellhead Platform (3R-2), with a combined processing capacity of 140,000 barrels of oil per day.

Production at the Papa Terra cluster decreased 22% during Q1 2024 compared with Q4 2023 and amounted to 1,204 BOEPD, albeit with monthly fluctuations. Scheduled shut down of operations in January and February for the connection of well PPT-12 to the production system, affected the production temporarily. The PPT-12 well was brought into production in the second part of February. The production decline was partially offset by the increased efficiency after optimizations in the surface facilities recorded in wells PPT-16,PPT-22, and PPT-51. In addition, the work with replacing the ESP-pumps (Electrical Submersible Pump) in wells PPT-50,PPT-17, and PPT-37 has been initiated. These interventions are expected to limit the production capacity during the spring and are in line with the necessary requitements to guarantee production stability and operational efficiency planned for operation in 2024.

USA

Illinois Basin (IB)

At the beginning of October 2023, Maha commenced a program consisting of the drilling of three production wells and production battery installation. The production ramp-up began in January 2024 and a small investment was completed in Q1 2024 in Maha's core area that adds two additional productive wells, production facility and potential for 1-2 additional locations. Average net production from the Illinois basin during the actual quarter was 334 BOPD of oil (233 BOPD in Q1 2023). The capital expenditure investments made in 2024 totalizing TUSD 420 related to the acquisition, drilling, completion, and abandonment processes were recognized on Oil and Gas properties line in the balance sheet.

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Maha Energy - Three months ended 31 March 2024

Sale of Maha Energy Oman Ltd. In Q4 2023

Block 70

In Q1 2023, Maha Energy sold a 35% stake in Block 70 to Mafraq Energy LLC for USD 11.20 million, retaining 65% and operatorship. The deal covered past and 35% of future costs. Initial tests in March showed five of eight wells producing 300 barrels daily. In Q3, Oman's Ministry extended the EPSA Initial Phase for Block 70.

In Q4, Maha agreed to sell its subsidiary Maha Oman, holding a 65% interest in Block 70, to Mafraq, which will handle all future operational costs from December 1, 2023. Maha receives USD 2 million by closing and up to USD 12 million based on production. The sales and purchase agreement (SPA), completed in January 2024, relieves Maha of all related liabilities. Oman operations were reclassified as assets held for sale and discontinued operations, with a USD (25.3) million impairment loss (note 5).

The SPA is expected to be closed during the second quarter of 2024. Among other conditions precedent, the transaction is subject to the approval from the Government of the Sultanate of Oman.

Sale of Maha Energy Brasil Ltda. in Q1 2023

TIE and Tartaruga fields

On 28 February 2023, Maha Energy sold its subsidiary, Maha Energy Brasil Ltda. ("Maha Brazil"), to PetroRecôncavo S.A. for a total of USD 150.9 million. The payment was split into two installments: USD 95.9 million paid at closing and USD 55 million paid six months later, with USD 7 million held in escrow for potential liabilities. Additionally, earn-outs up to USD 36.1 million are contingent on certain conditions, including the average annual Brent oil price reaching between USD 80.0 and USD 90.0 per barrel over the next three years, and potential synergies with PetroRecôncavo's new assets.

An earnout for 2023 of approximately USD 1.5 million was paid during Q1 2024, following the average oil price in 2023 being above USD 80 per barrel. As per 31 March 2024, remaining possible earn-outs from the sale of Maha Brazil amounts to USD 27.7 million, whereof up to 8.4 million and 7.2 million relates to the average annual Brent price for 2024 and 2025, consecutively, and additional 12 million are related to other potential operational synergies. As of 2024 proceeds from divestment of Brazil will be accounted for in continued operation.

Finally, part of proceeds from the transaction were used as collateral for Maha's outstanding debt to BTG Pactual (related to the Credit Agreement dated 30 March 2021). As a result of this announcement, Maha Brazil has been presented as discontinued operations in the interim condensed consolidated statement of operations.

Financial Results Review

Continuing Operations

Production

Production volumes are net working interest volumes before any royalties. The Company's continuing operations with producing oil and gas assets are in the Illinois Basin. Production from Maha's Brazilian assets Papa-Terra and Peroá clusters, where Maha holds indirect interest, is not consolidated, and is instead included in the Group's financial reporting as share in Income from Investment in Associates. Average daily production volumes in the Illinois Basin for the first quarter increased as compared to the comparative period due to the launch of three new production wells.

Production (TUSD)	Q1 2024	Q1 2023
Total consolidated Production (BBL)	30,370	20,941
Average (BOEPD)	334	233

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Maha Energy - Three months ended 31 March 2024

Revenue

Revenue for the first quarter 2024 amounted to TUSD 2,167 (Q1 2023: TUSD 1,486), representing an increase of 46%, mainly driven by 44% higher production volumes and realized oil prices. See Note 3 for more information.

(TUSD, unless otherwise noted)	Q1 2024	Q1 2023
Total Sales volume (BBL)	29,297	20,317
Oil and Gas revenue	2,167	1,486
Oil realized price (USD/BBL)	73.97	73.14
Reference price - Average WTI (USD/BBL)	77.56	76.08

Royalties

Royalties are settled in cash and based on realized prices before discounts. Royalty expenses Increased by 41% for the first quarter which is consistent with higher revenue for the same periods.

(TUSD, unless otherwise noted)	Q1 2024	Q1 2023
Royalties	499	353
Royalties as a % of revenue	23.0%	23.8%

Production expenses

Production expenses for the continuing operations were stable for the first quarter as compared to the comparative previous period. Production expenses decrease on a per unit bases as compared to the comparative periods due to higher sales volumes to absorb the stable fixed costs.

(TUSD, unless otherwise noted)	Q1 2024	Q1 2023
Production expenses	486	485
Per unit (USD/BOE)	16.59	23.87

Operating Netback

Operating netback is a non-GAAP financial metric used in the oil and gas industry to compare performance internally and with industry peers and is calculated as revenue less royalties and production expenses. Operating netback for the first quarter was 82% higher than the comparative period mainly due to higher sales volumes and the stable production expenses.

(TUSD, unless otherwise noted)	Q1 2024	Q1 2023
Operating Netback	1,182	648
Netback (USD/BOE)	40	32

Depletion, depreciation, and amortization ("DD&A") and impairment

The depletion rate is calculated on proved and probable oil and natural gas reserves, considering the future development costs to produce the reserves. Depletion expense is computed on a unit-of-production basis. The depletion rate will fluctuate on each re-measurement period based on the capital spending and reserves additions for the period.

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Maha Energy - Three months ended 31 March 2024

DD&A expenses for the first quarter amounted to TUSD (788) (at an average depletion rate of USD 26.90 per BOE) as compared to TUSD (482) (at an average depletion rate of USD 23.72 per BOE) for the comparative period. In Q1 2024, the depletion expense increased compared to the same period last year, primarily due to higher production volumes from three new wells and new capital expenditures for the period. Depletion rate on a per BOE basis is consistent with the higher depletion expense.

Impairment/Write-off

As part of the divestment of Maha Energy (Oman) Ltd, additional non-recoverable receivable have been identified amounting to TUSD (547). As the sale of the subsidiary is expected to happen in the second quarter of 2024, the decision was to recognize the write-off in the first quarter once the sale was not concretized.

General and administration ("G&A")

In the first quarter of 2024, recurring G&A expenses increased primarily due to higher external audit costs of TUSD 191. Board remuneration shifted to a monthly basis, adding TUSD 69 to expenses. Additionally, an increase in staff in Brazil raised the payroll by TUSD 196, while a reduction in Canada's payroll decreased expenses by TUSD (330), with other miscellaneous expenses totaling TUSD 46.

Nonrecurring G&A expenses for the same period included one-off restructuring costs from severance payments in Canada, M&A transactions, and extraordinary consultant fees for legal and advisory services, aimed at exploring new business trading opportunities.

In contrast, the first quarter of 2023 saw a reversal of severance provision in Canada and a reduction in G&A allocations due to cost sharing with Maha Energy (Oman) Ltd., which was classified as held for sale. Total G&A expenses for the first quarter of 2024 reached TUSD (2,340), marking a 110% increase from the previous year's TUSD (1,113).

Recurring G&A (TUSD)	Q1 2024	Q1 2023	Variation
Total G&A of Continuing operations	(2,340)	(1,113)	(1,227)
(-) Extraordinary Consulting Fees	219	39
(-) M&A Transaction Costs	232	256
(-)One-off restructuring costs	541	(85)
(-) Reduced G&A relocations	-	(273)
Recurring G&A	(1,348)	(1,175)	(172)

Foreign currency exchange gain or loss

The net foreign currency exchange loss for the first quarter amounted to TUSD 34 (Q1 2023: TUSD 20). Foreign exchange movements occur on settlement of transactions denominated in foreign currencies. Foreign exchange gain for the first quarter is related to the Swedish Krona bank accounts, held by the parent company that has US dollars as its functional currency. The Swedish Krona weakened against the US dollar during the first quarter of the year.

Share of income from investment in associate

Share in income from investment in associate amounted to TUSD 888 (Q1 2023: nil) for the first quarter and is further detailed in Note 8. This represents Maha Energy's net income portion (non-cash) resulting from 15 percent ownership in 3R Offshore. The Company has significant influence over 3R Offshore due to the Company's share ownership and representation on 3R Offshore's Board of Directors. This investment is consolidated through the equity method and the net result of the entity is therefore recognized as a single line item in the condensed consolidated statement of operations.

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Maha Energy - Three months ended 31 March 2024

Other income/loss

In the first quarter, the Company recorded other income of TUSD 1,102 (Q1 2023: nil). This income is primarily associated with the earnout received from sales of Maha Brazil, net of other losses.

Finance income and costs

Finance income for the first quarter increased to TUSD 10,060 (Q1 2023: TUSD 333) and is mainly related to investment income generated from short-term investments. In the first quarter, the company acquired 5% of 3R Petroleum, totaling 12,019,184 shares. The shares were acquired at a price of BRL 28.52 (approximately USD 5.77) and have since increased to BRL 32.99 (approximately USD 6.57) by March 31, 2024, resulting in an unrealized net gain of TUSD 9,318. Additionally, the company consistently invests most of its available cash balances in low-risk,short-term time deposits and low-volatility investments. Finance costs for the First quarter increased as the Company amortized financial costs from bank debt and accrual of interest, the amount is TUSD (1,251) (Q1 2023: TUSD (2,002)).

Exchange differences on translation of foreign operations

The presentation currency of the Company is US Dollars; therefore, the translation differences of foreign operations are recorded within other comprehensive income. The exchange differences on translation of foreign operations presented in the Statement of Comprehensive Earnings amounted to TUSD (1,866) (Q1 2023: TUSD (7,684)).

EBITDA

In the first quarter of 2024, EBITDA (Earnings before interest, taxes, depreciation, amortization, and impairment) improved to TUSD 441 from TUSD (708) in the corresponding quarter of 2023. This improvement was primarily due to increased sales volumes, investments in associates throughout 2024, and stable production costs, despite higher general and administrative expenses. EBITDA is a non-IFRS financial measure and is reconciled as follows:

EBITDA (TUSD)	Q1 2024	Q1 2023
Operating result	(860)	(1,170)
Depletion, depreciation and amortization	788	482
Impairment/Write-off	547	-
Foreign currency exchange	(34)	(20)
EBITDA	441	(708)

Result

The net result from continuing operations for the first quarter amounted to TUSD 6,029 (Q1 2023: TUSD (2,839))

representing earnings per share of 0.04 (Q1 2023: USD (0.02)), mainly due to an exceptional finance result with an unrealized gain of TUSD 9,318 on investment in shares in 3R Petroleum. The net result was also positively affected by higher sales volumes and the stable operating expenses. Additionally, the earnout from the sale of the Brazilian operation in 2023 and the recognition of equity income from investments in associated parties, contributed to an improved results compared to the same period last year.

Liquidity and capital resources

The Company manages its capital structure and adjusts it in light of changes in economic conditions and the risk characteristics of the underlying oil and natural gas assets. To facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general market and industry conditions. The annual budget and subsequent updates are approved by the Board of Directors. The Company considers its capital structure to include shareholders' equity of USD 159 million (31 December 2023: USD 155 million).

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