OVERVIEW OF FY2023 BUSINESS ENVIRONMENT Brent crude prices remained volatile, driven by political instability in Eastern Europe and the Middle East and compounded by substantial fluctuations in global economic conditions. Despite this, Ping maintained healthy operating margins, though these were substantially impacted by the introduction of the Energy Profit Levy (“EPL”) by the UK government on the exceptional profits of oil and gas players in May 2022, which resulted in a net non-cash charge to the company’s bottom line of USD33.3 million. In response to this significant regulatory change, we placed focus on growing our presence in the Malaysian O&G landscape, securing three Production Sharing Contracts (“PSCs”) with PETRONAS for the Meranti Cluster, A Cluster and Abu Cluster oil fields. By expanding our asset portfolio across geographies, we aim to mitigate our risk and position ourselves to capitalise on emerging growth opportunities. At the same time, we remain committed to steadily growing our presence in the UK, acquiring an 81.25% interest in the Pilot field and a 42.5% interest in the Fyne field in November 2023. With the latter situated near our existing Anasuria operations, the new field will unlock greater cost and resource efficiencies over the medium to long term. FY2023 FOCUS AREAS & PRIORITIES OUTLOOK & PROSPECTS In FY2024, Ping will focus on ensuring the availability of financing for the progression of its Abu and Fyne developments, which will require significant capital expenditure spend. To achieve this, the company will continue to drive cost excellence and optimise cash flow within its UK operations while seeking out appropriate funding mechanisms to support its needs. Ping will also invest in the necessary manpower to develop and operate its Malaysian projects, with 2025 targeted for first oil production from the Abu Cluster. Ping still intends to strategically add to its portfolio in both UK and Malaysia moving forward. OGPC’s efforts in FY2024 will be geared towards diversifying its income away from its business-as-usual sources. Through strategic partnerships and M&A activities, the company will seek to strengthen its capabilities as an integrated service provider and secure more income from general maintenance and Maintenance, Repair and Operations (“MRO”) projects. The company will also seek to expand its user base for the SM365 app in line with its move into the downstream segment. Ping: • Establish management systems and organisational capacity to execute the development of the Abu and Meranti clusters • Complete Anasuria riser reinstatement to reinstate production and extend asset life and integrity • Secure additional reserves for existing infrastructure to support long term growth • Managing our spending and optimising cash flow at our UK operations to support capex for Malaysian projects • Secure regulatory approvals and commencing early project work at Fyne • Optimise development concept for Avalon for maximum long-term value and to optimise commerciality OGPC: • Expand our retail downstream business portfolio, including Full Service Maintenance (“FSM”) and underground piping supply solutions • Build a pipeline of general maintenance and special projects business • Undertake mergers and acquisitions (“M&As”) and strategic collaboration with industry players to become an integrated service provider Integrated Report 2023 85
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