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four, four and three occasions, respectively. The Issuer has established criteria for the evaluation of the Board’s
performance and has also adopted a Delegation of Authority document which establishes the framework for the
management and authorisation of all aspects of the business and affairs of the Issuer. To further enhance the Issuer’s
corporate governance, the Issuer plans to appoint at least two additional Independent Non-Executive Directors and make
any other necessary changes to the composition of the Board, such that the Board will contain at least a majority of
independent directors going forward. Going forward, each member of the Group is committed to ensuring its governance
framework is continuously updated for the benefit of shareholders and other stakeholders.
As the Group grows, the Directors will aim to retain the entrepreneurial spirit, innovation and sense of ownership
developed among its employees since the Group was started. By recruiting employees locally wherever possible, the
Group’s cooperative and locally adaptive approach is intended to give employees and local communities a stake in the
long-term success of the Group, and encourage an approach to operations and growth which is in line with local
conditions. As it grows, the Group is committed to giving primary importance to the safety of its employees and the
public.
Actively manage the Group’s asset portfolio
The Group aims to pursue long-term opportunities in the core MENA region, in which the Group believes it has certain
competitive advantages, by focusing on expanding its operations and presence in the region by pursuing growth through
organic projects, as well as acquisitions that it believes will be able to realise significant value. It will also seek to divest
or reduce its operations in countries where it believes it is able to realise only limited value or which are not aligned with
its longer-term objective to be the leading independent oil and gas exploration and development company in the core
MENA region. For example, the Group is seeking attractive opportunities to sell or monetise the value of these assets or
otherwise exit Pakistan and Latvia in order to reduce its overall exposure to jurisdictions outside the core MENA region
and reduce the extent of management attention and Group financial resources devoted to these assets. In 2013 the Group
resolved to dispose of its operations in Russia and Ukraine. In April 2014 the Group completed the sale of its assets in
Ukraine. The Group is engaged in active negotiations in respect of the sale of its assets in Russia and expects to complete
the sale during the third quarter of 2014. In Latvia, after initial exploration efforts were unsuccessful, the Group and its
JV partner, PKN Orlen, have decided to relinquish its licence and are currently seeking to either sell their interests in the
licences or enter into discussions with the Latvian Ministry of Economy regarding the terms of exit. The Group’s
divestiture strategy has resulted in the Group exiting from certain jurisdictions in the past, for example from Indonesia in
2009 and from Ukraine in April 2014.
Manage financial risk through a prudent capital structure
The Group has been financially profitable and has generated positive operating cash flow since its inception. The Group
aims to continue to manage its financial risk by applying strict return criteria to new programmes and acquisitions, and
by maintaining a prudent capital structure and focusing a significant part of its operations on developed and producing
assets, and on undeveloped exploration and appraisal assets in reservoirs with a historical track record of cost-effective
hydrocarbon extraction. The Group also regularly monitors its financial liquidity to ensure that its operations are
adequately funded. The Group has therefore established controls and procedures to monitor its commitments, project
updates and budget in support of its exploration, appraisal and development programmes.
The Group’s assets
The table below summarises the Group’s current exploration, appraisal and development assets.
Location
Asset
Revenue
Interest
(%)
(1)
Cost
Interest
(%)
(2)
Operator
Status
(3)
Expiry
(4)
Fiscal
regime
(5)
Egypt
Abu Sennan
50.00
78.00
Group
PAEP
May 2016
(7)
PSC
Area A
70.00
70.00
Group
PAEP
September
2014
(6)
SC
Burg El Arab
75.00
75.00
Group
PAEP
December
2016
PSC
ERQ
49.50
49.50
ENAP
Sipetrol
PAEP
September
2012
(8)
PSC
Iraq
Block 9
70.00
70.00
Group
EA
February
SC
