Scirocco Energy : Interim Results

Company Registration No. 05542880 (England and Wales)

30 September 2021

Scirocco Energy plc

("Scirocco" or the "Company")

UNAUDITED INTERIM RESULTS FOR THE SIX

MONTHS ENDED 30 JUNE 2021

Contents
Operational highlights and contact information	1-2
Chairman's statement	3-5
Principle risks and uncertainties	6
Directors' responsibilities	7
Condensed interim statement of profit or loss and other comprehensive income	8
Condensed interim statement of financial position	9
Condensed interim statement of cash flows	10
Condensed statement of changes in equity	11
Notes to the condensed interim financial statements	12-27

Operational Highlights

Scirocco Energy (AIM: SCIR), the AIM investing company targeting attractive assets within the European sustainable energy and circular economy markets, is pleased to announce its unaudited interim results for the six months ended 30 June 2021.

Period Highlights:

• The Board announced its proposed investment into Energy Acquisitions Group Ltd ("EAG"), a specialist acquisition and operating vehicle in the sustainable energy sector signaling the Company's first investment as part of the Company's revised strategy that targets opportunities within the sustainable energy and circular economy markets in Europe;
• Invested in EAG which allows Scirocco Energy to leverage EAG's strong network and industry leading expertise to gain access to a series of already identified acquisition opportunities within the Anaerobic Digestion ("AD") sector totalling c.£30 million in value;
• Provided initial investment for EAG which will be used to acquire 100% of Greenan Generation Limited ("GGL") and associated 0.5 MWe AD plant located in County Londonderry, Northern Ireland. AD is a process that creates biogas, a renewable energy source that will help the UK deliver on its decarbonisation commitments:
• • The initial investment of £1.2 million will be funded from current cash resources;
  • Scirocco and EAG will jointly explore further opportunities; and
  • GGL is a cash generative, operational AD plant and EAG has identified steps to optimize and enhance EBITDA margins and free cash flow.
• The Company made progress on its Tanzanian asset sales process, which is key to delivering its broader strategy;
• Amended the financing facility, announced to the market on 29 June 2020, with Prolific Basins LLC which ensures that the Company is able to fund its near-term commitments. As a result of the amendment, Scirocco's access to the potential investment of up to US$1,000,000 (to be provided at the option of the Subscriber) has been extended until 31 December 2021;
• The Company partially exited its shareholding in Helium One realizing c. £3.3 million in proceeds during the period;
• Continued the Company's focus on cost discipline and cash preservation; and
• Held group cash at 30 June 2021 of £2.3million

Post Period Highlights:

• The Company announced that the operator of the Ruvuma joint venture, ARA Petroleum Tanzania Limited ("APT"), secured a two-year extension to its licence under the Ruvuma PSA from the Ministry of Energy of Tanzania which will run from 15 August 2021. The extension allows for the completion of the following:
• • Acquisition of 200 km2(surface coverage) of 3D seismic data;
  • Drilling of the Chikumbi-1 well; and
  • Conclusion of negotiations of the Gas Terms for the Ruvuma PSA.
• The joint venture completed the tender for the acquisition of 3D seismic and awarded the seismic acquisition contract to Africa Geophysical Services Limited ("AGS"). The operator secured a Lumpsum contract considerably below the joint venture's expected budget for the activity. AGS intends to commence activities in the Ntorya location within the Ruvuma PSA area from October 2021.
• The acquisition will consist of approximately 338 km² of 3D seismic data focusing on the area of primary interest. AGS will mobilise, weather permitting, and focus on the proposed location for the Chikumbi-1 well ("CH-1") to acquire as much data as possible before the start of the rainy season with the programme re-commencing after that with no additional cost to the JV partners.
• The Company announced that following technical work by APT earlier this year, their revised mapping and internal management estimates suggest a mean risked gas initially in place ("GIIP") for the Ntorya accumulation of 3,024

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Bcf, in multiple lobes to be tested and a mean risked recoverable gas resource of 1,990 Bcf, which will be appraised by the planned seismic and drilling programme.

• Announced a new investment policy - focusing on asset opportunities within the European sustainable energy and circular economy markets - which was approved by Shareholders at the Company's AGM on 9 July 2021
• Sale of Helium One shares held by the Company continued realizing a further c. £0.2 million in proceeds after the end of the period

Commenting on the Interim Results, Alastair Ferguson, Non-Executive Chairman said:

"Since we emerged from 2020 the board of directors has implemented a change of investment policy which targets assets within the European sustainable energy and circular economy markets. This policy will see Scirocco allocating capital in assets which support the energy transition and offer a stable, growing source of cash flow going forward.

Scirocco is itself in transition and I was delighted to see the Company taking the first concrete steps under the new investment policy with its investment in EAG. Although a small initial investment this is strategically very significant as it creates a platform for a series of acquisitions.

We have also seen concrete progress in our most significant legacy asset at Ruvuma with the award of a two-year licence extension and the much-awaited seismic acquisition project being kicked off with the award of a contract to AGS. We expect this work programme to be an important catalyst for value as the project is better defined and derisked.

With the pivot to investment in assets within the sustainable energy and circular economy we have set out our stall that we intend to recycle value delivered from Scirocco's legacy assets to fund new investment. The funding of the initial investment in EAG predominantly from proceeds delivered by the sale of Helium One shares is an excellent demonstration of this. From a funding perspective, we were also pleased to see continued support from Prolific Basins with the extension and amendment of the facility.

We now look forward to growing the portfolio and the team are working hard to deliver this."

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 ("MAR").

For further information:
Scirocco Energy plc	[phone]
Tom Reynolds, CEO
Doug Rycroft, COO
Strand Hanson Limited, Nominated Adviser	[phone]
James Spinney / Ritchie Balmer / Rory Murphy
WH Ireland Limited, Broker	[phone]
Harry Ansell / Katy Mitchell
Buchanan, Financial PR	[phone]
Ben Romney / Jon Krinks / James Husband

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Chairman's Statement

Introduction

I am pleased to be providing this statement in my capacity as Non-Executive Chairman of Scirocco. The Company emerged from 2020 with a new investment policy and positive developments within its legacy asset portfolio.

The Board's focus in the first half of the year was three-fold:

• To Implement the new investment policy to invest in attractive assets within the sustainable energy and circular economy with a view to growing a portfolio of cash generative assets over time;
• To Grow the company's access to resources and personnel within the target space; and
• To Review, on an ongoing basis, new opportunities and progressing the EAG investment.

Additionally, the Company has continued to focus on the monetization opportunities for its existing natural gas portfolio. The underlying assets, particularly the Ruvuma PSA containing the Ntorya Gas development onshore Tanzania, has made significant operational progress so far in 2021. The securing of a 2-year licence extension allows the Joint Venture to progress with seismic and drilling programmes in the near-term providing catalyst for value in the Scirocco portfolio.

Strategy and Business Development

From 2007 until 2018, the Company focused on investments in a diverse portfolio of direct and indirect interests within natural resources and principally in the oil and gas sector, as well as other subsurface gas assets of potential commercial significance. These assets were located worldwide but predominantly in the Americas, Europe and Africa.

In March 2019, the Company announced a new strategy to create long-term, sustainable value within the European energy market. Since announcing the new strategy, the Board observed market dynamics which led to a re-assessment of the opportunities available to Scirocco and the Company's strategic direction:

1. a deterioration of the level of funding support for small oil and gas companies, driven by environmental concerns which could undermine a sustainable access to growth capital;
2. a growing demand for environmentally positive investments, with a limited supply of companies in which to invest, particularly on the AIM Market; and
3. a large and growing market of investment opportunities within the sustainable energy and circular economy space.

The Board concluded that the conditions were in place to support the development of the Company's acquisition-led strategy within the European sustainable energy market. The Company therefore focused on identifying near-term, cash generative investment opportunities within the low-carbon space, including renewable energy, circular economy and energy storage and transfer sectors.

The Board believes the evolution of its strategy will better enable long-term value creation for its shareholders. The areas of investment being screened represent a compelling market opportunity, with strategically consistent assets that complement Scirocco's ambitions to be part of the energy transition space, as the world looks to embrace a more sustainable energy future. Scirocco's objective is to acquire a portfolio of cash generative assets within the following three core areas:

• Energy - assets which generate energy for sale through sustainable or renewable means in the form of biogas or electrical power;
• Circular - assets which recover a valuable component of an industrial, municipal or agricultural waste stream for re- use, generally reducing the system carbon footprint in parallel; and

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