Quarterly Report For The Financial Period Ended 30 June 2024

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Unaudited Condensed Consolidated Statement Of Comprehensive Income
For The Financial Period 1 April 2024 to 30 June 2024

Unaudited Condensed Consolidated Statement Of Financial Position As At 30 June 2024

Unaudited Condensed Consolidated Statement Of Cash Flows For The Financial Period Ended 30 June 2024

Prospect

Moving forward, we continue to expect the path towards sustained demand recovery to remain fragile and uncertain as the oil market adjusts to both short-term and long-term landscapes. The industry is continuously facing headwinds from the geopolitical conflict between Russia and Ukraine which resulted in a price inflation and goods distribution disruption.

Our plan in 2024 is to drill more development wells in our North Kariman field. The North Kariman field spans approximately 5 square kilometres and currently produces around 70% of our total production output. With the addition of the new development wells, we estimate that the North Kariman field will contribute higher production output over the field life.

It's common for a well's production to decrease after its initial peak, as a means of increasing production output from oil wells we have implemented secondary production methods, specifically gas injection, in the second half of 2023. In addition, we are assessing the feasibility of implementing methods such as plunger lift and water-injection as cost-effective methods for extracting liquids from older wells, as options to enhance production in the later part of 2024.

For delivering of our production target, we will continue to place emphasis on efforts to sustain and further enhance current production level through well workover programs which will involve the replacement of electrical submersible pumps (“ESPs”) for the artificial lifting of oil to the surface, re-perforation and stimulation of certain naturally flowing wells and continue with the planned reactivation of idle wells. At the same time, we will also continue to perform maintenance works to improve facilities uptime and facilities debottlenecking; a successful planned maintenance shut-down of the facilities was undertaken in the fourth quarter of 2023 which achieved its objectives and within Health, Safety, and Environment (“HSE”) guidelines. The drilling program will be completed in stages in accordance with the Group's financial capability.

During 2023, we replaced eight ESPs and removed two others due to reaching economic viability cut-off. Currently, we have 9 wells in our Kariman and North Kariman fields installed with ESPs. This installation has contributed significantly to our production volume, with a total of 282,500 barrels produced in 2023 which represents 32% of the company's total annual oil production. We anticipate that the wells in the Proved Developed Producing category will remain operational through 2024 and beyond, with occasional ESP replacements as needed. However, we do expect the production rates of these wells to decline gradually since the Kariman field has low reservoir pressure, which is typical of a mature field and at some future point the ESPs might need to be retrieved due to economic viability.

Aside from implementing initiatives to improve our production output and increase production efficiency, we also intend to address and resolve the price differential issue that has been plaguing Emir-Oil recently and had adversely affected our export sales margins. We are in the midst of identifying alternative routes and negotiating the terms with several potential buyers to enable us to sell our crude oil closer to the international Brent oil prices.

In summary, Emir-Oil needs to drill more development wells, perform well workovers and production enhancement initiatives such as secondary recovery to increase the production and implement cost optimisation efforts.

Barring any unforeseen circumstances, the Board of Directors believe with our well positioned strategies to continue developing the plans, the Group will generate an improved performance and growth moving forward.