Report and Financial Statements  
for the year ended 31 December 2007
Website: www.indagopetroleum.com
Contact: info@indagopetroleum.com
INDAGO PETROLEUM LTD       Report and Financial Statements      2007 Indago Petroleum Ltd. Report and Financial Statements  
for the year ended 31 December 2007
This will be pursued primarily through 
exploration for gas and gas condensate 
in Oman, but also potentially through 
acquisition of discovered resources in 
Oman and elsewhere.
 
Our competitive advantages include 
a strong acreage position in a prolific 
hydrocarbon province near existing 
infrastructure serving an established gas 
market and partnering an experienced 
operator with long-standing credentials in 
the Middle East.
Contents
Highlights 01
Indago at-a-glance 02
Chairman’s statement 04
Chief executive’s Report 06
Review of operations 10
Board of Directors 14
Directors’ Report 17
Directors’ Remuneration Report 21
Corporate Governance 23
Independent Auditors’ Report 26
Consolidated Income statement 28
Consolidated Balance sheet   29
Consolidated statement of Cash Flows 30
Consolidated statement of Changes in equity 31
notes to the Financial statements 32
supplementary Information 54
Parent Company Financial statements  56
Independent Auditors’ Report on Parent Company 57
Parent Company Profit and Loss Account 58
Parent Company Balance sheet 59
notes to the Parent Company Financial statements 60
Corporate Directory  IBC
Indago aims to become a significant oil and gas 
producer in the Middle East and surrounding regions. 01
HIgHLIgHtS
HIgHLIgHtS
Indago Petroleum Ltd. Report and Financial Statements  
for the year ended 31 December 2007
Operational
Al Jariya-1 well on Jebel Hafit prospect, Block 31 Oman, spudded early 2007 •	
Safely drilled Al Jariya-1 to 5,131 metres by early February 2008 when well •	
encountered HP/HT water 50 metres above estimated depth of reservoir
Remedial work will require at least a sidetrack at around 4,300 metres •	
Prospectivity of Jebel Hafit substantially intact, targeting 1,040 Bcf gas •	
and 157 MMB of condensate (Indago share)
Remedial costs may be wholly or partly borne by insurance •	
Probable move of rig to Zad on Block 47 Oman whilst Al Jariya special •	
equipment sourced 
Zad targeting 222 Bcf gas and 34.5 MMB condensate (Indago share) •	
Estimated spud of Zad: May 08 and return to Al Jariya: Q4 08 •	
Delay to overall programme approximately 4 months •	
Organisational
Management, technical and  commercial capabilities  •	
re-established post RAK Petroleum sale
David Bremner, former non-executive director, appointed CEO •	
Outlook
Exploration focused business •	
Results of Al Jariya-1 and Zad wells expected during 2008 •	
Entered new 3 year exploration term on Block 47, Oman •	
Full evaluation of additional onshore Oman opportunities in progress •	
Focus on completing Oman programme and seeking new ventures and •	
corporate opportunities
Financial
Profit for the year $294 million due to sale  •	
of assets to RAK Petroleum
Earnings per share (basic) $5.51 •	
Special dividend paid $318 million •	
Cash at year end $41 million –  •	
sufficient to complete firm drilling programme
Photograph courtesy  
of John Birch Indago Petroleum Ltd. 02
InDago at-a-gLance
Block 
43A
Block 31
Block 47 Block 30
United Arab emirates
sultanate of oman
Block 8
saudi Arabia
saleh  
RAK B
Retained Approximately 50%; operated by RAK Petroleum
Sold to RAK Petroleum (5/4/07) 
Area relinquished under EPSA on entering new exploration term
Report and Financial Statements  
for the year ended 31 December 2007 Indago Petroleum Ltd. 03
Block 47
Interest 50% approximately
Location onshore oman
Area (sq. km) 4,964
Prospects Adam
Drilled prospects Izz (suspended)
Leads Dham, sadood, Kabshat 
Activity Zad well on Adam scheduled to be drilled mid 2008
seismic over leads being evaluated
Blocks 8 & 30 (Oman) 
RAK B & Saleh (U.A.E)
Interests in these assets were sold in their entirety during 2007
Block 31
Interest 50% approximately
Location onshore oman
Area (sq. km) 8,526
Prospects Jebel Hafit
Leads Jebel Wa’bah
Activity Drilling at Al Jariya-1 suspended March 2008 following 
underground blowout
Indago has retained a 49.9999% interest in  
3 exploration blocks onshore the Sultanate of Oman. 
See page 10 for further details. 
Block 43A
Interest 50% approximately
Location onshore oman
Area (sq. km) 2,923
Prospects n/A
Leads Kahal
Activity 2D seismic acquisition during 2007 being evaluated
Report and Financial Statements  
for the year ended 31 December 2007 cHaIRman’S Statement
Indago Petroleum Ltd. 04
Indago’s technical and commercial expertise is currently focused on 
a tightly defined geographical area of politically stable countries with 
proven hydrocarbon reserves and an active gas market.
DeAR sHAReHoLDeR,
Financially, 2007 was an outstanding year. After-tax profits were in excess 
of $290 million and we were able to pay an interim special dividend of 
$318 million, equal to 60 pence per old share, whilst retaining sufficient cash 
to take us through the current drilling programme and beyond. I reported 
fully last year on the agreement with RAK Petroleum PCL for the sale of our 
production, development and half our exploration assets and so will not be 
going into detail again here.  suffice it to say, we were one of a relatively 
small number of AIM companies in our sector to pay a cash dividend to its 
shareholders in 2007. 
operationally, the year was one of frustrations. When I reported to you 
in s eptember last year, we had been experiencing a number of technical 
difficulties with the Al Jariya well on the Jebel Hafit prospect in the 
s ultanate of o man, but reasonable progress had been resumed and we 
were looking towards the early part of this year for first indications of the 
value of the prospect.
At the beginning of February, however, the drilling operation penetrated 
a horizon from which salt water emerged at very high temperatures and 
pressures. the problem was very professionally managed by the operator and 
the well brought under control immediately, but the impact on the Jebel Hafit 
project has been profound. It appears likely that we will need to substantially 
redrill the section of the well below 4,300 meters. this will require some 
specialised equipment which is not immediately available and, to avoid an 
Financially, 2007 was an outstanding year...we were one of 
a relatively small number of AIM companies in our sector 
to pay a cash dividend
Operationally, the year was one of frustrations
tim eggar 
Chairman
Report and Financial Statements  
for the year ended 31 December 2007 Indago Petroleum Ltd. 05
expensive stand-by period, we anticipate moving the rig to drill our Zad well 
in Block 47, oman before moving back to complete the Al Jariya well later  
in the year. our analysis of all of the geological and engineering data from  
the Al Jariya well suggests that the prospectivity of the Jebel Hafit prospect 
remains substantially undiminished, certainly at the shuaiba level where 80% 
of the pre-drill reserves are located.
o ur task now is to reshape the strategy of the business going forward. t he 
immediate focus remains onshore oman where we have several leads and 
prospects that we continue to evaluate. However, the upstream oil and gas 
industry is, as ever, in a state of flux and the next year or so is widely predicted 
to be particularly active for corporate and asset transactions involving the small 
company sector. We will be on the lookout for suitable opportunities. 
one sadness of the RAK transaction was that Indago lost the services of 
Peter sadler, John Hurst and almost all the team that had built Indago’s 
original portfolio. their contribution had been invaluable.
I would like to thank our CFo, Martin Groak, who filled in as acting Ceo after 
the RAK transaction until n ovember of last year when David Bremner moved 
over from his non-executive role to become our new Ceo. With a strong team, 
assisted by consultants and advisers, we look forward to completing our 
budgeted programme in oman, maturing additional prospects in our existing 
Blocks and, potentially, pursuing new initiatives during the coming year.
tim eggar
Chairman
Indago Petroleum Limited
The immediate focus remains onshore Oman, where  
we have several leads and prospects that we continue  
to evaluate
Report and Financial Statements  
for the year ended 31 December 2007 Dr David Bremner  
Chief executive officer
Chief exeCutive’s report
indago petroleum Ltd. 06
COMPANY HIGHLIGHTS   
Financial Highlights
Profit for the year $294 million
The disposal of the Group’s production and development assets, its cash and 
half of its exploration assets to RAK Petroleum PCL (RAK Petroleum) grossed 
$383 million and produced a profit on disposal of $306 million. This was the 
main contributor to the Group’s net profit of $294 million.
(The results of 2007 cannot readily be compared with those of 2006 (a loss 
of $3.8 million), which were based on revenues of gas condensate and from 
which the Group only benefited in the first quarter of 2007.)
Interim special dividend : $318 million
The Company paid an interim special dividend of 60 pence per share, prior  
to the 1 for 5 share consolidation. This would have been the equivalent of  
£3 per share based on the number of shares in issue now. The repayment of 
this cash to investors substantially de-risked their investment, whilst leaving 
them exposed to the upside potential of the rest of the portfolio.
To achieve this, the Company’s share premium account was cancelled in 
order to generate sufficient distributable reserves. 
The Board is not recommending a final dividend.
Cash and cash equivalents : $41 million
The Group had cash assets of over $41 million at the year end, more than 
sufficient to fund its share of the firm drilling programme. 
Exploration 
Following last year’s disposal of assets, the Group is for the time being a pure 
exploration entity with non-operated interests in three joint ventures with RAK 
Petroleum exploring Blocks 31, 43A and 47 onshore the Sultanate of Oman. 
The operator of all three blocks is RAK Petroleum.
The disposal of the Group’s production and development assets, its cash 
and half of its exploration assets to RAK Petroleum PCL (RAK Petroleum) 
grossed $383 million and produced a profit on disposal of $306 million. 
This was the main contributor to the Group’s net profit of $294 million.
Interim special dividend: $318 million. The repayment of this 
cash to investors substantially de-risked their investment
report and financial statements  
for the year ended 31 December 2007 Indago Petroleum Ltd. 07
Hawamel
Hawamel, on the Izz prospect in Block 47, was drilled at the end of 2006 
and following rather inconclusive results, decisions on next steps there 
have been deferred. t he porosity and permeability of the Cretaceous 
carbonate reservoirs were poor, although gas was inferred and one portion 
of the reservoir did show some promise in terms of possible gas saturation. 
Possible courses of action include drilling an underbalanced, horizontal leg 
from the existing wellbore through the encountered formations. Interestingly, 
this approach was used recently in an adjacent block with an acceptable 
degree of success.
the cost implications have been assessed and although initial indications 
were that it would be at a similar cost to a conventional testing programme, 
the results of the tendering process would suggest something considerably 
higher. At the moment it is not a priority for the joint venture.  the next well in 
the programme, after Al Jariya-1, is the Zad well on the Adam prospect, also 
in Block 47. A success at Adam could enhance the potential value of Izz.
Al Jariya
Most of 2007 was taken up with the drilling at Jebel Hafit. In January 2007, 
we spudded the Al Jariya-1 well, to be drilled to a depth of approximately 
5,900 metres. significant geological and mechanical challenges were 
encountered at virtually every stage, including requiring two sidetracks at 
relatively shallow depth. After a year of drilling, the operation had reached 
5,100 metres. Just beyond this depth, a strong flow of high-temperature, 
high-pressure salt water with high levels of carbon dioxide and some gas was 
encountered. the well was always considered to be a potentially difficult, very 
high pressure, high temperature project and with this in mind we had a highly 
experienced well control team at the wellsite as the well was drilled deeper. 
When the well control incident occurred on February 2nd of this year, this team 
was able to react immediately and ensure the incident did not get out of hand.
The next well in the programme is the Zad well on the 
Adam prospect in block 47. A success at Adam could 
enhance the potential value of Izz
Report and Financial Statements  
for the year ended 31 December 2007 cHIeF executIve’S RePoRt continued
Indago Petroleum Ltd. 08
Al Jariya (continued)
At the time of writing the operator is continuing attempts to rehabilitate the 
well and it looks as though the way forward will be to abandon and cement 
the open hole section of the well with cement extending up inside the casing 
to about 4,300 meters. A window will then be cut in the casing at about 
that depth and the well will be sidetracked and, hopefully, the two reservoir 
objectives penetrated in the new hole. Discussions are continuing but it 
appears likely that at least a significant portion of the cost of the well control 
and remediation will be covered by the joint venture’s well control insurance.
one source of disappointment is that the sidetrack and substantial redrill of 
the lower portion of the well will require specialised equipment which is not 
readily available. the likely outcome of this is that the most prudent course 
of action will be to suspend the Al Jariya well after cementing back and 
moving the nabors 103 rig off Jebel Hafit and on to the Zad well on the Adam 
Prospect. All being well we would hope to be spudding Zad during May and 
be back on Al Jariya during the 4th quarter 2008.
Zad
the Zad well on the Adam prospect in Block 47 is geologically very different 
to (and potentially much larger than) the nearby Izz prospect, where we were 
targetting Cretaceous age carbonates with mainly dry gas, at a depth of  
1,900 metres.  Zad is targeting Cambrian age sandstones, mainly gas and  
gas condensate, at a depth of 4,200 metres.
As discussed above, the current expectation is that Zad will spud towards the 
summer of 2008 and is forecast to take some 90 days to reach total depth. It 
is a more straightforward drilling proposition than at Jebel Hafit and we would 
certainly hope for a more routine operation. 
the drilling of Zad and the subsequent conclusion of the Al Jariya well will 
complete the current firm drilling programme.
All being well, we would hope to be spudding Zad  
during May 2008
Report and Financial Statements  
for the year ended 31 December 2007 Indago Petroleum Ltd. 09
Outlook
The seismic work being done over the three exploration blocks is nearing 
its conclusion and there are significant leads to be analysed further. New 2D 
seismic acquired during late 2006 and early 2007 has allowed us to define 
better the Dham, Sadood and Kabshat leads and prospects in Block 47, the 
Jebel Wa’bah lead in Block 31 and the Kahal structure in Block 43A.
Meanwhile, we are evaluating a number of new opportunities for joint ventures 
in the general area of the Middle East, North Africa and the Caspian. We hope 
to expand the Company’s exploration portfolio by bringing one or two of 
these opportunities to fruition over the next few months.
We are very aware of the shortage of investment funds in the UK market at 
this moment, but we have a pool of cash to take us through 2009, by which 
time our current exploration programme is expected to have completed 
and other initiatives may have come to fruition. While we determine the 
long term requirements of Indago, we have adopted a policy of outsourcing 
our technical and legal support. This has given us access to some first 
class professional resources, whilst retaining significant flexibility over our 
overhead costs. 
We are, therefore, developing the strategy to move forward. A success at 
any of the wells in our current programme would advance that strategy very 
rapidly. In the meantime, we have the resources to be patient.
Dr David Bremner
Chief executive officer
We are evaluating a number of opportunities for joint 
ventures in the general area of the Middle East,  
North Africa and the Caspian
Report and Financial Statements  
for the year ended 31 December 2007 RevIew oF oPeRatIonS
Indago Petroleum Ltd. 10
Bukha
sajaa
Margham
Gas Field 
Prospect
Lead 
Blocks with a 49.9999% interest 
Block 
43A
Block 31
Block 47 Block 30
United Arab emirates
sultanate of oman
Block 8
saudi Arabia
Block 
43A
Block 31
Block 47
United Arab emirates
sultanate  
of oman
saudi Arabia
sajaa
Margham
Kahal
Jebel Hafit
Al Jariya-1
Jebel Wa’bah
Dham
sadood
Kabshat
Hawamel
Izz
Adam
Zad
Musandam 
Peninsula 
(oman)
Hamrat Duru
Kauther
Well site
Report and Financial Statements  
for the year ended 31 December 2007 Indago Petroleum Ltd. 11
sUMMARY oF tHe GRoUP’s eXPLoRA tIon Assets
the Company has been an active explorer and commenced an exploration 
drilling campaign in the fourth quarter of 2006 comprising three onshore 
wells targeting gas and gas-condensate bearing structures in oman. this 
programme is ongoing under the operatorship of RAK Petroleum. 
Block 31, onshore oman – 50% approximate interest
(1)
 
the Company holds an approximate 50% participating interest in Block 31, 
onshore oman. 
the Company announced on 6 February, 2007 that it had spudded the  
Al Jariya well on the Jebel Hafit prospect (further details shown in t able 1 
on page 12). the Jebel Hafit prospect straddles the border between the 
sultanate of oman and the emirate of Abu Dhabi. It is the second well in the 
current onshore oman drilling campaign. 
significant geological and mechanical challenges were encountered at 
virtually every stage of the drilling, including requiring two sidetracks at a 
depth of approximately 2,000 metres. After a year of drilling, the operation 
had reached 5,100 metres. Just beyond this depth, a strong flow of high-
temperature, high-pressure salt water with high levels of carbon dioxide and 
some gas was encountered. the well was immediately brought under control 
by well control experts recruited to the rig in the summer of 2007  
in anticipation of potential high temperature and pressure incidents.
As reported in our announcement on 28 March 2008, the examination of 
the rock cuttings from the formation acquired just prior to the well control 
incident would indicate that the formation encountered is a limestone unit of 
Campanian age.  this contrasts with the first reservoir objective, the natih 
formation, which is a shelf carbonate of Cenomanian age, some 7 million 
years older.  We now estimate the natih to be between 20m and 180m (with a 
best estimate of 50m) deeper than the deepest point currently reached  
(5,131 metres). Furthermore, the main target, the shuaiba (thamama) is 
anticipated to lie another 200m deeper than the top of the natih, separated 
from the natih by the nahr Umr shale, a regional seal.
the source of the formation fluids which flowed to surface is uncertain.  
t emperature information is not conclusive but the fluids could originate from the 
limestone stringer encountered, or slightly deeper if a fault had been intersected.
the conclusions are:
the prospect probably remains untested at the natih level, and even more 1. 
so at the shuaiba (thamama) level (which was forecast to contain the 
majority of the pre-drill success case reserves).
In order to drill deeper than the current level we will, at the least, have 2. 
to abandon the existing section of open hole below 4,591 metres and 
sidetrack from inside the existing casing.
Report and Financial Statements  
for the year ended 31 December 2007 RevIew oF oPeRatIonS continued
Indago Petroleum Ltd. 12
As described in the Ceo’s Report we hope to be able to move beyond this 
point by substantially redrilling the portion of the well below 4,300 metres, 
beyond the very hard chert sequence. However, given the time required 
to secure the required specialised equipment (expandable casing), plus 
allowing time for over pressure to dissipate, we, with the o perator, have 
concluded that in all likelihood we will suspend the Al Jariya well for a 
time and redeploy the drilling rig to the Zad well on the Adam Prospect on 
Block 47 (see t able 1 below).
there is a key pipeline within 25 km of the structure which carries gas both  
to sohar, a site of major industry development in oman, and into the  
United Arab emirates (UAe). 
Further leads exist; in particular Jebel Wa’bah. the technical evaluation is 
ongoing with new seismic having been obtained during the past year.
Block 47, onshore Oman – 50% approximate interest 
(1)
the Company holds an approximate 50% participating interest in Block 47, 
onshore oman. In october 2007, the Joint Venture elected to enter the third 
three year exploration term under the exploration and Production sharing 
Agreement (ePsA).
the undrilled Adam prospect is detailed in the t able 2 below. 
Hawamel, on the Izz structure, was drilled during the fourth quarter of 2006, 
penetrating the target reservoirs over the period 6th to 12th December, during 
which gas shows were recorded. the natih formation was encountered 
at a depth of approximately 2,135 metres and the thamama formation at 
approximately 2,585 metres. Following electric logging and Modular Dynamic 
t ester (formation pressure testing) operations, the operator’s interpretation 
Table 1
Prospect  
name Well name t arget formation (depth)
Analogue 
discoveries
Gross mean 
(a)
 targeted  
reserves at IPo
Jebel Hafit Al Jariya
Cretaceous age 
carbonates (5,300m)
sajaa (140 km), 
Margham (100 km)
2,081 Bcf gas and  
314 MMB of condensate
(a)
 t able 5.20 of Competent Person’s report, Admission Document. Figures in table represent 100% of prospective resources. 
Indago share 49.9999%
Table 2
Prospect name Well name t arget formation (depth)
Analogue  
discoveries
Gross mean 
(b)
 targeted  
reserves at IPo
Adam Zad
Cambrian age  
sandstones (4,200m) Kauther (40 km.)
445 Bcf gas and  
69 MMB of condensate
(b)
 t able 5.31 of Competent Person’s report, Admission Document. Figures in table represent 100% of prospective resources. 
Indago share 49.9999% 
Report and Financial Statements  
for the year ended 31 December 2007 Indago Petroleum Ltd. 13
is that gas is present, but that the formation porosities and permeabilities 
are significantly lower than prognosed. It is considered unlikely that standard 
testing procedures would achieve a commercial flowrate and that a more 
innovative approach may be required.
For the time being, however, it has been decided to suspend the well, with 
casing down to the existing target formations, in such a way that it can be 
easily re-entered. Further operations on the Hawamel well may depend on the 
outcome of other exploration in the area.
the Zad well on the Adam prospect will now likely be drilled during the summer 
of 2008 once the drilling rig is freed up from operations on the Al Jariya well. t he 
well site has already been prepared. the reservoir issues with Hawamel have 
no influence on the prospectivity at Zad. the Izz and Adam prospects are fully 
independent, targeting different reservoirs, Cretaceous versus Cambrian and 
carbonates versus clastics and are dependent on distinct petroleum systems. 
Both have nearby analogue discoveries and the necessary elements for 
success are present in the area. 
In 2007 the acquisition of 362 km of 2D seismic in Block 47 was completed. 
this survey was focused on the Dham, sadood and Kabshat leads. the 
technical evaluation is in progress and may result in the promotion of one or 
more of these leads to drillable status. 
the chance of a discovery in the Block being a commercial success is 
enhanced by the proximity of a major pipeline which runs through the Block to 
Muscat, the capital and largest population centre of oman. the pipeline cuts 
between Zad and Hawamel, both of which are located within approximately 
10 km. of this line. the viability of the Block could be further enhanced by the 
combining of the potential output of Block 47 with that of the adjacent Block 
30 which contains currently undeveloped gas discoveries.
Block 43A, onshore Oman – 50% approximate interest
 (2)
the Company holds an approximate 50% participating interest in Block 43A, 
onshore oman, which comprises an area of 2,923 square km. the ePsA with 
the Government of the sultanate of oman was signed on 28 June 2006.
t argeting Block 43A is consistent with the Company’s regional exploration 
focus on the gas-condensate fairway of the oman Mountain Front and is 
on trend with a number of existing discoveries – the most notable being the 
multi-t cf sajaa field. 
A seismic acquisition campaign was concluded during 2007. this encompassed 
the acquisition of 225 km of 2D seismic in the Block, including over the Kahal 
lead. the Joint Venture is also re-processing seismic of older vintage. the 
technical evaluation based on this seismic and other regional data is in progress.
notes
(1) 
A third party has an option to acquire an interest of up to 10% in the ePsA subject  
to fulfilling certain conditions
(2) 
A third party has an option to acquire an interest of up to 45% in the ePsA subject  
to fulfilling certain conditions
Report and Financial Statements  
for the year ended 31 December 2007 board of directors
indago Petroleum Ltd. 14
The following served as 
direc Tors during The year: 
1. Mr Tim eggar
Non-executive chairman
Tim eggar was appointed as  
non-executive chairman of the 
company on 22 october 2005. he 
was also a chairman of harrison 
lovegrove and co. in 2005-2007, 
has an Ma from the university of 
cambridge and is a barrister. in 
1979 he was elected a Member of 
Parliament for enfield north. he held 
a number of ministerial roles from 
1985 to 1996, including Minister 
of energy in the department of 
Trade and industry. since leaving 
politics, Tim has had a number of 
senior Board positions, and was 
chief executive of Monument oil 
and gas plc from 1998 to 1999 and 
a non-executive director of lasmo 
plc from 1999 to 2000. from 2000 
to 2004 he was vice chairman of 
corporate finance at aBn aMro 
with responsibility for the integrated 
energy sector. he is also a non-
executive director of anglo-asian 
Mining and President of the russo-
British chamber of commerce.
2. dr david Bremner
Chief executive officer
david Bremner, who has been a 
director of the company since  
22 o ctober 2005, was appointed 
chief executive officer on 
16 november 2007. he holds a Bsc 
honours degree and a Phd in geology 
from the u niversity of g lasgow. h e 
joined BP in 1977, where he worked 
with their international staff in the uK 
and the usa . in 1984 he joined Merlin 
Petroleum, a small start-up exploration 
company based in san f rancisco, 
as exploration Manager. after the 
sale of Merlin Petroleum in 1989 
and a successful role in international 
petroleum consultancy, he joined 
Monument o il and g as plc in 1995 as 
exploration Manager. in 1997 david 
was appointed exploration director 
for Monument, a position he held 
until that company was sold in 1999. 
since that time he has been engaged 
in international petroleum consultancy 
with a particular emphasis on new 
business development.  
3. Mr Martin groak
Chief financial officer
Martin g roak was appointed a director 
of the c ompany on 31 March 2006. 
he is a chartered accountant with 
a degree in economics from the 
university of london and has nearly 
30 years of international business 
experience and was formerly finance 
director of chaco (since renamed 
amerisur) resources plc, an aiM 
listed oil and gas company operating 
in south america. he is multi-lingual, 
with a strong background in trade, 
project and corporate finance, mining, 
steel, logistics and energy. he is also 
a non-executive director of Bluehone 
aiM vcT plc, The Tanfield group plc 
and creative entertainment group 
plc, all publicly quoted companies.
4. Mr Barry goldberg
Non-executive director
Barry g oldberg was appointed  
a director of the c ompany on  
22 october 2005. he has a Bcl 
and an ll B from Mcg ill u niversity 
and is a member of the o ntario 
Bar. s ince January 2005 Barry 
has been a principal of genuity 
c apital Markets where he has 
continued his prominent role as a 
leading advisor in c anada’s largest 
corporate restructuring organisations 
representing stakeholders’ interests 
in the negotiation, development 
and implementation of financial 
restructuring and recapitalisation 
strategies.  he has extensive public 
1.
2.
3.
4.
report and financial statements  
for the year ended 31 december 2007 indago Petroleum Ltd. 15
company advisory experience 
having participated in some of 
c anada’s most significant public 
company restructurings.
5. Mr Paul Marchand
Non-executive director
Paul Marchand was appointed 
a director of the company on 
15 July 2005 and is a solicitor. he 
is a member of the law society of 
england and w ales and holds a Bcl 
degree from the university of oxford, 
an llB degree from the university 
of stellenbosch and Bcomm and 
hdip Tax degrees from the university 
of witwatersrand. Paul is general 
counsel of the Meridian capital 
group. he was formerly a partner of 
white & case, an international law 
firm, and spent time at its new y ork 
and london offices. Prior to joining 
white & case, Paul was a solicitor at 
linklaters, an international law firm, 
and an attorney at cliffe dekker, a 
south african law firm.
6. Mr roderick Perry
Non-executive director
rod Perry was appointed a director 
of the company on 22 october 2005. 
he is currently an adviser to 
ithmar capital in dubai. he is 
also a non-executive director of 
Partygaming Plc. he was the global 
head of venture capital for 3i, one of 
the largest venture capital companies 
in the world, from november 2001  
to July 2005. he was also a member 
of the board of 3i group and a 
member of both the executive and 
investment committees.
7. Mr erdinc nick Zana
Non-executive director
nick Zana was appointed a director 
of the company on 1 august 2006. 
he is a senior international oil 
executive with over 32 years of 
experience in the industry. Most 
recently he was chairman and 
ceo of nelson resources, an 
independent oil company operating 
in Kazakhstan. Prior to that, he 
worked for chevron, holding 
numerous executive positions, both 
in the us and internationally. he has 
a Ba in Petroleum engineering from 
the university of Tulsa and a Masters 
degree and Ph.d. in chemical 
engineering from the california 
institute of Technology.
oTher direcTors who held 
office during The year were:
Mr Peter sadler (resigned 
5 april 2007) – former chief 
executive officer
dr John h urst (resigned 5 april 2007) 
– former exploration director
oT her senior officers  
of The grouP:
8. Mr stephen lambert
Group commercial director
stephen lambert was appointed 
commercial director of indago 
Petroleum on 21 May 2007. he 
is a member of the institute of 
chartered accountants in england 
and wales and a member of The 
chartered institute of Taxation. he 
has a degree in history from the 
university of newcastle upon Tyne. 
stephen has extensive experience 
of business development and 
corporate finance in the international 
oil and gas industry, including in 
the uK, Middle east, caspian and 
indian sub-continent. Prior to joining 
indago, stephen worked for chevron 
as general Manager, strategy and 
Planning, for Business development, 
and previously had a variety of roles 
with Monument oil and gas plc, 
lasmo plc and in the M&a energy 
Team at ernst & young.
5.
6.
7.
8.
report and financial statements  
for the year ended 31 december 2007 DIRectoRS’ RePoRt anD FInancIaL StatementS
Indago Petroleum Ltd. 16
Contents
Directors’ Report      17
Directors’ Remuneration Report    21
Corporate Governance     23
Independent Auditors’ Report    26
Consolidated Income statement    28
Consolidated Balance sheet    29
Consolidated statement of Cash Flows   30
Consolidated statement of Changes in equity   31
notes to the Financial statements    32
supplementary Information     54
Parent Company  Financial statements    56
Independent Auditors’ Report on Parent Company  57
Parent Company Profit and Loss Account   58
Parent Company Balance sheet    59
notes to the Parent Company Financial statements  60
Corporate Directory    IBC
Report and Financial Statements  
for the year ended 31 December 2007 Indago Petroleum Ltd. 17 Report and Financial Statements  
for the year ended 31 December 2007
The directors present their report for the year ended 
31 December 2007.
PRINCIPAL ACTIVITIES AND BUSINESS REVIEW
The principal continuing activity of the Company is 
oil and gas exploration in the Sultanate of Oman and 
the United Arab Emirates (UAE). An overview of the 
Company’s activities during the year, and its immediate 
prospects going forward, is presented in the Chairman’s 
Statement and Chief Executive’s Report, with further 
detail in the Review of Operations.
RESULTS AND DIVIDENDS
There was a profit for the year after taxation  •	
of $293,855,000 (2006: loss of $3,836,000).
An interim special dividend of 60 pence per pre- •	
consolidation share was paid on 18 April 2007 
following the RAK Petroleum transaction.
The directors do not recommend that a final dividend be 
declared or paid for the year ended 31 December 2007.
FINANCIAL PERFORMANCE 
The Group’s financial performance during 2007 of a 
profit of $294 million (compared to a loss of $3.8 million 
in the prior year) was dominated by the disposal of the 
majority of its assets for a consideration of $383 million 
to RAK Petroleum in April 2007.
The Board resolved to distribute $318 million of that 
consideration in the form of a special interim dividend 
of 60 pence per pre-consolidation share, and this was 
done in April 2007.
At the end of 2007, the Group had in excess of  
$40 million in cash. The directors regard this as  
being sufficient to fund the Group’s exploration  
and new venture activities until the end of 2009.
CAPITAL MANAGEMENT
The primary objective of the Group’s capital 
management is to ensure that it maintains healthy 
capital ratios in order to support its business and 
maximise shareholder value.
The Group manages its capital structure and makes 
adjustments to it, in light of changes in economic 
conditions. To maintain or adjust the capital structure, 
the Company may adjust the dividend payment to 
shareholders, return capital to shareholders or issue 
new shares. No changes were made in the objectives, 
policies or processes during the years ended  
31 December 2007 and 31 December 2006.
The Group has no gearing ratio as at 1 December 2007, 
as it has no debt.
DISCLOSURE OF DIRECTORS’ INTERESTS
The beneficial and other interests of the directors and 
their families in the shares of the Company and its 
subsidiary undertakings as at 31 December 2007 were 
as follows:
Director
Shares held 
1 January 2007 
(note 1)
Shares held 
31 December 2007
T Eggar 5,714 30,714
D Bremner Nil Nil
M Groak Nil Nil
B Goldberg Nil Nil
P Marchand 2,857 15,357
R Perry 2,857 14,857
E N Zana Nil Nil
Notes:
1. At an Extraordinary General Meeting held on 3 April 2007, 
shareholders approved the consolidation of the Company’s 
share capital on a 1 for 5 basis (“the Share Consolidation”). 
In the above table, for the purposes of comparison, the 
shares held on 1 January 2007 are shown as if the Share 
Consolidation had occurred on that date.
Directors held the following unlisted options over Ordinary 
Shares in the Company as at 31 December 2007:
Unlisted 
Options Held 
1 January 2007 
(note 1)
Unlisted 
Options Held 
31 December 2007
T Eggar 533,333 533,333
M Groak 342,857 342,857
D Bremner 133,333 533,333
B Goldberg 133,333 133,333
P Marchand 133,333 133,333
R Perry 133,333 133,333
E N Zana 233,333 233,333
Notes:
1. Following the sale of the Group’s production and 
development assets and approximately 50% of its 
exploration assets to RAK Petroleum PCL and the payment 
of a special dividend to the Company’s shareholders of  
60 pence per share, the exercise price of directors’ and other 
employees’ options was reduced by 60 pence per share. 
DIRECTORS’ REPORT
Indago Petroleum Ltd. 17 Report and Financial Statements  
for the year ended 31 December 2007 Indago Petroleum Ltd. 18 Report and Financial Statements  
for the year ended 31 December 2007
DIRECTORS’ REPORT continued
DISCLOSURE OF DIRECTORS’ INTERESTS 
(CONTINUED)
For those option holders who had originally been 
granted options with an exercise price of less than  
60 pence per share, their exercise price was reduced 
to 1 pence per share and the number of shares over 
which they had an option was increased to compensate. 
Thereafter, as a result of the Share Consolidation, the 
number of shares over which option holders held an 
option was reduced by a factor of five and the exercise 
price increased by a factor of five (the above hereinafter 
referred to as “the Employee Option Reorganisation”).
In the above table, for the purposes of comparison, the 
unlisted options held on 1 January 2007 are shown as 
if the Employee Option Reorganisation had occurred on 
that date.
No director had, during or at the end of the year, a 
material interest in any contract which was significant in 
relation to the Company’s business.
RETIREMENT OF DIRECTORS
The Company’s statutes require that Messrs Eggar and 
Mr Goldberg retire by rotation and seek re-election at 
the forthcoming Annual General Meeting. 
SIGNIFICANT EVENTS
RAK Petroleum Transaction
On 5 April 2007, the Company disposed of all of 
its production and development assets, as well as 
50.0001% of its exploration assets, to RAK Petroleum 
PCL for a total consideration of £194,235,267 
(approximately $383 million) – equivalent to  
72.5 pence per share on a fully diluted basis.
This generated a profit on disposal in the books of the 
Company of approximately $275 million and in the 
Group of approximately $306 million. The Board then 
resolved to return to shareholders 60 pence per share 
via an interim, special dividend. As distributable profits 
of the Company were insufficient, it was necessary to 
cancel the Company’s share premium account, which 
stood at approximately $112 million, to create additional 
distributable reserves.
An EGM was held on 3 April 2007 to approve the 
transaction, to approve the cancellation of the share 
premium account and to approve the consolidation 
of the Company’s share capital on a 1 to 5 ratio. All  
the resolutions were passed.
The share consolidation was effected on 16 April 2007. 
A court hearing was held in Guernsey to receive 
approval for the cancellation of the share premium 
account and the special dividend was paid on  
18 April 2007.
As a result of the transaction, Peter Sadler and  
John Hurst left the Board of the Company. 
Assets disposed of completely as a result of the 
transaction were:
40 % interest in Block 8 (Bukha and West Bukha •	
production and development) offshore Oman
40% interest in RAK-B block offshore Ras  •	
Al Khaimah, UAE
40% interest in Saleh block offshore Ras  •	
Al Khaimah, UAE
100% interest in Block 30 onshore Oman. •	
Assets in which a 49.9999% interest has been retained 
by the Company:
Block 31 onshore Oman (where the Jebel Hafit •	
prospect is located)
Block 47 onshore Oman (where the Adam prospect  •	
is located)
Block 43A onshore Oman. •	
EVENTS SUBSEQUENT TO THE BALANCE SHEET DATE
Block 31 Onshore Oman: Al Jariya-1 well on the  
Jebel Hafit prospect (49.9999% interest)
On 2 February 2008, RAK Petroleum PCL, the operator 
of Block 31 (“the Operator”), advised that while drilling 
at a depth of 5,131 metres, they had encountered a 
zone of high pressure and the well took an unexpected 
influx of water and gas. These fluids were flowed to 
a pit especially created for such an eventuality and 
after a few hours the flow was shut off at surface. The 
resulting high pressures experienced at surface, and  Indago Petroleum Ltd. 19 Report and Financial Statements  
for the year ended 31 December 2007
the hole condition at the bottom of the well, severely 
complicated rig operations. Representatives of  
Boots & Coots, a firm of well control specialists, 
were present on the rig at the time of the well control 
incident and, with their support, the Operator instigated 
procedures to ascertain the status of the well with  
a view to isolating the problematic zone. 
Analysis of the available geological and geophysical 
data led to the following conclusions:
The prospectivity of Jebel Hafit has not been •	
significantly diminished by the incident. Neither of the 
target Cretaceous carbonate reservoirs is believed to 
have been penetrated at the time of the incident.
In order to drill deeper than the current level it will, •	
at the least, be necessary to abandon the existing 
section of open hole below 4,591 metres and 
sidetrack from inside the existing casing.
Specialist equipment (expandable casing) will be •	
required and that consideration, plus allowing time for 
over pressure to dissipate, will likely result in moving 
the rig and drilling the next exploration well (Zad, in 
Block 47) before returning to complete operations at 
Al Jariya in the 4th quarter of 2008.
The forward plan will be formulated when more 
information has been obtained about the state of the 
open hole section and the various options discussed 
between Indago, RAK Petroleum and the Ministry of Oil 
and Gas for the Sultanate of Oman.
The Group’s exploration activities are routinely insured 
by the Operator for serious operational events, such as 
an uncontrolled surface or sub-surface blowout. As a 
result, the Company and the Operator are in discussion 
with the insurers, whose loss adjuster has visited the 
well site and reviewed the incident with the operations 
team and with Boots and Coots. 
DIRECTORS’ RESPONSIBILITIES  
FOR THE FINANCIAL STATEMENTS
The directors are responsible for preparing the Annual 
Report and the financial statements in accordance with 
applicable law and regulations.
Guernsey Company law requires the directors to 
prepare financial statements for each financial 
year. Under that law the directors have elected to 
prepare group financial statements in accordance 
with International Financial Reporting Standards as 
adopted by the European Union, and parent company 
financial statements in accordance with United 
Kingdom Accounting Standards (United Kingdom 
Generally Accepted Accounting Practice). The financial 
statements are required by law to give a true and 
fair view of the state of affairs of the Group and the 
Company and of the profit or loss of the Group and 
Company for that period. In preparing those financial 
statements, the directors are required to:
select suitable accounting policies and then apply •	
them consistently;
make judgements and estimates that are reasonable •	
and prudent;
state whether applicable International Financial •	
Reporting Standards as adopted by the European 
Union / UK Accounting Standards have been 
followed, subject to any material departures 
disclosed and explained in the financial statements; 
and
prepare the financial statements on the going concern •	
basis unless it is inappropriate to presume that the 
Group and the Company will continue in business.
The directors are responsible for keeping proper 
accounting records which disclose with reasonable 
accuracy at any time the financial position of the 
Company and the Group and to enable them to 
ensure that the accounts comply with the Companies 
(Guernsey) Law 1994. They are also responsible for 
safeguarding the assets of the Company and the Group 
and hence for taking reasonable steps for the prevention 
and detection of fraud and other irregularities.
In so far as the directors are aware:
there is no relevant audit information of which the •	
Company’s auditors are unaware; and
the directors have taken all steps that they ought to •	
have taken to make themselves aware of any relevant 
audit information and to establish that the auditors 
are aware of that information. Indago Petroleum Ltd. 20 Report and Financial Statements  
for the year ended 31 December 2007
DIRECTORS’ REPORT continued
GOING CONCERN
After making appropriate enquiries, the directors have 
a reasonable expectation that the Group has adequate 
resources to continue in operational existence for the 
foreseeable future. For this reason, they continue to 
adopt the going concern basis in preparing the Group’s 
financial statements.
FINANCIAL INSTRUMENTS
Details of the Group’s principal financial instruments and 
risk policies are set in Note 25 to the financial statements. 
SUBSTANTIAL SHAREHOLDERS 
At 26 March 2008 the following had a disclosable 
interest in 3% or more of the nominal value of any class 
of the Company’s shares carrying voting rights: 
Name Shareholding %
Meridian Oil & Gas 
(Middle East) Limited 22,999,999 43.13%
State Street  
Nominees Limited 3,333,889 6.25%
Credit Suisse Securities 
(Europe ) Ltd 2,107,781 3.95%
Euroclear  
Nominees Limited 2,054,130 3.85%
SBS Nominees Limited 2,022,500 3.79%
Jim Nominees Limited 1,977,391 3.71%
HSBC Global Custody 
Nominee (UK) Limited 1,768,130 3.32%
SHARE OPTIONS
As at the balance sheet date there were 4,590,127  
un-issued ordinary shares of $0.0005 under options. 
Note 26 of the financial statements sets out further 
details of the outstanding options. 
Option holders do not have any right, by virtue of the 
option, to participate in any share issue of the Company 
or any related body corporate or in the interest issue of 
any other registered scheme.
PAYMENT POLICY AND PRACTICE
It is the Company’s policy to settle the terms of 
payment with suppliers when agreeing the terms of the 
transaction, to ensure that suppliers are aware of these 
terms and to abide by them. Trade creditors at the  
year-end amount to less than 30 days of average 
supplies for the period.
AUDITORS
A resolution to reappoint Ernst & Young LLP as  
auditors will be put to shareholders at the Annual 
General Meeting.
ANNUAL GENERAL MEETING
The Annual General Meeting will be held on the date 
stated in the Notice of Meeting, which accompanies this 
Annual Report.
Signed on behalf of the Board in accordance with  
a resolution of the directors.
J. Davies
Company Secretary Indago Petroleum Ltd. 21 Report and Financial Statements  
for the year ended 31 December 2007
DIRECTORS’ EMOLUMENTS
The Remuneration Committee of the Board of Directors is responsible for determining and reviewing compensation 
arrangements for the directors, the chief executive officer and the executive team. The Remuneration Committee 
assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by 
reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder 
benefit from the retention of a high quality Board and executive team. 
To assist in achieving these objectives, the Remuneration Committee links the nature and amount of executive 
directors’ and officers’ emoluments to the Group’s financial and operational performance. All senior executives have 
the opportunity to qualify for participation in the Employee Share Option Plan which currently provides share option 
incentives to executives.
Details of the nature and amount of each element of the emoluments of each director of the Company and the 
director receiving the highest emoluments for the year are as follows:
DIRECTORS’ EMOLUMENTS 
 
 Base Fee / Salary 
$
 Other 
$
Total 2007 
$
Total 2006 
$
T Eggar (ii) 119,784  119,784 119,784 117,534
M Groak (i) 339,390 105,581 444,971 297,647
D Bremner (iii) 91,187 189,000 280,187 39,178
B Goldberg (iv) 39,928 –  39,928 39,178
P Marchand (iv) 39,928 –  39,928 39,178
R Perry (iv) 39,928 –  39,928 39,178
E N Zana (iv) (v) 39,928 43,761 83,689 16,324
P Sadler (vi) 109,688 34,125 143,813 484,878
J Hurst (vi) 78,000 34,125 112,125 415,790
Total 897,761 406,592 1,304,353 1,488,885
Notes
Mr Eggar’s remuneration as chairman of £60,000 is converted at the closing $/£ rate of 0.5009. i. 
M Groak, as highest paid director, received in addition to his base salary: ii. 
$
Bonus 69,874
Pension contributions 33,007
Medical insurance 2,700
Total 105,581
Dr Bremner was appointed CEO on 16 November 2007. His remuneration as a non-executive director up to that point of iii. 
£17,500 has been converted at the closing rate. “Other” emoluments represent consultancy fees for additional work done 
between 5 April and 15 November 2007.
Messrs Goldberg, Marchand, Perry and Zana each received £20,000 with respect to fees as non-executive directors.  iv. 
These are translated at the closing $/£ rate.
“Other” emoluments paid to Mr Zana represent consultancy fees for additional work done between 5 April and  v. 
15 November 2007.
Messrs Sadler and Hurst resigned from the board on 5 April 2007. vi. 
DIRECTORS’ REMUNERATION REPORT Indago Petroleum Ltd. 22 Report and Financial Statements  
for the year ended 31 December 2007
DIRECTORS’ REMUNERATION REPORT continued
On completion of the RAK Petroleum transaction, Messrs. Peter Sadler and John Hurst left the Board of the 
Company to join RAK Petroleum. Their termination agreement took into account employee gratuity benefits and 
relinquishing options over 200,000 shares (post the Consolidation) each.
OPTIONS GRANTED TO DIRECTORS
Details of options granted over un-issued share capital in the Company, during or since the end of the period to any 
director of the Company as part of their remuneration are as follows, where AOAD is “Anniversary of Allotment Date”:
Options over one 
ordinary share Allotment Date Exercise Price
Exercise 
Period: from Expiry Date
D Bremner
133,333 
133,333 
133,334
16 November 2007 £0.575
1st AOAD 
2nd AOAD 
3rd AOAD
16 November 2017
OPTIONS RELINQUISHED BY FORMER DIRECTORS
Details of options over un-issued share capital in the Company relinquished through cancellation during or since 
the end of the period by former directors of the Company on termination of their board tenure are as follows, where 
AOAD is “Anniversary of Allotment Date”:
Options over one 
ordinary share* Allotment Date
Exercise 
Period: from Expiry Date Date cancelled
P Sadler
100,000 
100,000
25 November 2005
2nd AOAD 
3rd AOAD
25 November 2015 5 April 2007
J Hurst
100,000 
100,000
25 November 2005
2nd AOAD 
3rd AOAD
25 November 2015 5 April 2007
* Shown post the Share Consolidation  Indago Petroleum Ltd. 23 Report and Financial Statements  
for the year ended 31 December 2007
CORPORATE GOVERNANCE
COMPLIANCE WITH THE COMBINED CODE
The directors support the principles of good governance. Whilst not mandatory for AIM companies, the directors 
have implemented, where practicable for a company of this size and nature, the main principles of good 
governance and code of best practice under the Combined Code and are continually reviewing its requirements.
AREAS OF NON-COMPLIANCE
The directors recognise that the non-executive directors are not independent given that they all have options •	
to acquire shares in the Company and three of the five non-executive directors are currently shareholders.
There is no formal internal audit function. The Audit Committee has considered the establishment of such •	
a function, but deem it to be premature for the Group at this stage. The directors regard a key area worthy 
of internal audit as being the cost and profit shares in relation to its joint ventures. These are already 
independently audited on behalf of the Omani Oil and Gas Ministry by major international auditing firms.  
Other internal cross-verification is performed by the financial and commercial departments, but the 
effectiveness of this approach will be under continual review.
THE BOARD
The Board of directors of the Company is responsible for the corporate governance of the Company. The Board 
guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are 
elected and to whom they are accountable. To ensure the Board is well equipped to discharge its responsibilities 
it has established guidelines for the nomination and selection of directors and for the operation of the Board. A 
statement of the directors’ responsibilities in respect of the financial statements and a statement on going concern 
are set out on pages 19 and 20.
COMPOSITION OF THE BOARD
The composition of the Board is determined in accordance with the following principles and guidelines:
the Board of the Company should normally comprise at least six directors and should preferably maintain  •	
a majority of non-executive directors;
the chairperson may be a non-executive director; •	
the Board should comprise directors with an appropriate range of qualifications and expertise; and •	
the Board should meet at least quarterly and follow meeting guidelines set down to ensure all directors  •	
are made aware of, and have available all necessary information, to participate in an informed discussion  
of all agenda items.
The directors in office at the date of this statement are:
Name (age) Appointed director Position Area of Expertise
Tim Eggar (56) 22.10.05 Non-executive chairman
Finance, Oil and Gas, 
Mining and Energy
David Bremner, Dr (54) 22.10.05 Chief executive officer Oil and Gas Exploration
Martin Groak (57) 31.03.06 Chief financial officer Finance and Administration
Barry Goldberg (51) 22.10.05 Non-executive Corporate Finance
Paul Marchand (40) 15.07.05 Non-executive Law
Roderick Perry (62) 22.10.05 Non-executive Finance and Investment
Erdinc Nick Zana (62) 01.08.06 Non-executive Oil and Gas Exploration Indago Petroleum Ltd. 24 Report and Financial Statements  
for the year ended 31 December 2007
CORPORATE GOVERNANCE continued
NOMINATIONS COMMITTEE
To ensure that the Board is well equipped to continue 
to discharge its responsibilities and into the future, 
the Board has established guidelines for the future 
nomination and selection of potential new directors. 
To this end, a Nominations Committee was formed to 
canvas future candidates for the position of director, 
to ensure that the Company continues to be governed 
by appropriately qualified people. The Nominations 
Committee comprises the following members:
T Eggar
P Marchand
R Perry
REMUNERATION COMMITTEE
The Board is responsible for determining and reviewing 
compensation arrangements for the directors 
themselves, the chief executive officer and the 
executive management. The Board has established 
a Remuneration Committee, comprising four non-
executive directors. The Remuneration Committee 
comprises the following members:
E Zana
T Eggar
B Goldberg
P Marchand
AUDIT COMMITTEE
The Audit Committee is responsible for the nomination 
of the external auditor, reviewing the independence 
and objectivity of the external auditors, and reviewing 
the adequacy of the scope and quality of the annual 
statutory audit process and half-year review. The 
members of the Audit Committee have extensive 
and current experience of finance and investment 
and general corporate finance matters. Their input 
is sought and given on a number of financial and 
administrative matters.
The members of the Audit Committee are:
R Perry
B Goldberg
E Zana
BOARD RESPONSIBILITIES
As it acts on behalf of the shareholders and is 
accountable to the shareholders, the Board seeks to 
identify the expectations of the shareholders, as well as 
other regulatory and ethical expectations and obligations. 
In addition, the Board is responsible for identifying areas 
of significant risk and ensuring arrangements are in place 
to adequately manage those risks. The Board seeks to 
discharge these responsibilities in a number of ways.
The responsibility for the operation and administration 
of the Company is delegated by the Board to the chief 
executive officer and the executive management. 
The Board ensures that the executive management is 
appropriately experienced and qualified to discharge its 
responsibilities and constantly monitors the performance 
of the chief executive and the executive management.
The Board is responsible for ensuring that management’s 
objectives and activities are aligned with the expectations 
and risks identified by the Board. The Board has a number 
of mechanisms in place to ensure this is achieved. These 
mechanisms include the following:
implementation of operating plans, cash flows and •	
budgets by management and Board monitoring of 
progress against projections;
establishment of operational committees to report on •	
environmental issues and concerns, and occupational 
health and safety;
procedures to allow directors, and management in •	
the furtherance of their duties, to seek independent 
professional advice via the utilisation of various 
external technical consultants. Indago Petroleum Ltd. 25 Report and Financial Statements  
for the year ended 31 December 2007
MONITORING OF THE BOARD’S PERFORMANCE  
AND COMMUNICATION TO SHAREHOLDERS
In order to ensure that the Board continues to discharge its 
responsibilities in an appropriate manner, the performance 
of all directors is constantly reviewed by the chairman, 
and the performance of the chairman is reviewed by  
Mr Roderick Perry the senior non-executive director.
The Board aims to ensure that the shareholders, on 
behalf of whom they act, are informed of all information 
necessary to assess the performance of the directors. 
Information is communicated to the shareholders through:
the Annual Report which is distributed to all •	
shareholders;
the Half-Yearly Report, distributed to shareholders; •	
press releases and statutory announcements •	
communicating key events;
the Company’s website: www.indagopetroleum.com; •	
and
the Annual General Meeting and other meetings so •	
called to obtain shareholder approval for Board action 
as appropriate.
  Indago Petroleum Ltd. 26 Report and Financial Statements  
for the year ended 31 December 2007
INDEPENDENT AUDITORS’ REPORT TO THE  
MEMBERS OF INDAGO PETROLEUM LIMITED continued
We have audited the group financial statements 
of Indago Petroleum Limited (the Company) and 
its subsidiaries (the Group) for the year ended 
31 December 2007 which comprise the consolidated 
income statement, the consolidated balance sheet, the 
consolidated statement of cash flows, the consolidated 
statement of changes in equity and the related notes 
1 to 29. These group financial statements have been 
prepared under the accounting policies set out therein.
We have reported separately on the parent company 
financial statements of Indago Petroleum Limited for the 
year ended 31 December 2007.
This report is made solely to the Company’s members, 
as a body, in accordance with Section 64 of the 
Companies (Guernsey) Law 1994. Our audit work 
has been undertaken so that we might state to the 
Company’s members those matters we are required 
to state to them in an auditors report and for no other 
purpose. To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone other 
than the Company and the Company’s members as 
a body, for our audit work, for this report, or for the 
opinions we have formed. 
RESPECTIVE RESPONSIBILITIES OF DIRECTORS  
AND AUDITORS
The directors’ responsibilities for preparing the 
Annual Report and the group financial statements 
in accordance with applicable Guernsey law and 
International Financial Reporting Standards (IFRSs) 
as adopted by the European Union are set out in the 
Statement of Directors’ Responsibilities.
Our responsibility is to audit the group financial 
statements in accordance with relevant legal and 
regulatory requirements and International Standards on 
Auditing (UK and Ireland).
We report to you our opinion as to whether the group 
financial statements give a true and fair view and 
whether the financial statements have been properly 
prepared in accordance with the Companies (Guernsey) 
Law 1994. We also report to you whether in our 
opinion the information given in the Directors’ Report is 
consistent with the financial statements. The information 
given in the Directors’ Report includes that specific 
information presented in the chairman’s Statement, the 
Chief Executive’s Report and the Review of Operations 
that is cross referred from the Business Review section 
of the Directors’ Report.
In addition we report to you if, in our opinion, we have 
not received all the information and explanations we 
require for our audit, or if information specified by law 
regarding directors’ remuneration and other transactions 
is not disclosed. 
We read other information contained in the Annual 
Report and consider whether it is consistent with 
the audited group financial statements. The other 
information comprises only the Directors’ Report, 
the Directors’ Remuneration Report, the chairman’s 
Statement, the Chief Executive’s Report, the Review 
of Operations, the Corporate Governance Statement 
and the Supplementary Information. We consider the 
implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with 
the group financial statements. Our responsibilities do 
not extend to any other information.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with 
International Standards on Auditing (UK and Ireland) 
issued by the Auditing Practices Board. An audit 
includes examination, on a test basis, of evidence 
relevant to the amounts and disclosures in the group 
financial statements. It also includes an assessment 
of the significant estimates and judgements made by 
the directors in the preparation of the group financial 
statements, and of whether the accounting policies are 
appropriate to the Group’s circumstances, consistently 
applied and adequately disclosed. Indago Petroleum Ltd. 27 Report and Financial Statements  
for the year ended 31 December 2007
We planned and performed our audit so as to obtain 
all the information and explanations which we 
considered necessary in order to provide us with 
sufficient evidence to give reasonable assurance that 
the group financial statements are free from material 
misstatement, whether caused by fraud or other 
irregularity or error. In forming our opinion we also 
evaluated the overall adequacy of the presentation  
of information in the group financial statements.
OPINION
In our opinion:
the group financial statements give a true and fair •	
view, in accordance with IFRSs as adopted by the 
European Union, of the state of the Group’s affairs 
as at 31 December 2007 and of its profit for the year 
then ended; and
the group financial statements have been properly •	
prepared in accordance with the Companies 
(Guernsey) Law 1994.
Ernst & Young LLP
Registered Auditors
London
9 April 2008
Note: 
The maintenance and integrity of the Company website 1. 
is the responsibility of the directors. The work carried 
out by the auditors does not involve consideration of 
these matters and, accordingly, the auditors accept no 
responsibility for any changes that may have occurred to 
the financial statements since they were initially presented 
on the website. 
Legislation in Guernsey governing the preparation and 2. 
dissemination of financial statements may differ from 
legislation in other jurisdictions.
  Indago Petroleum Ltd. 28 Report and Financial Statements  
for the year ended 31 December 2007
CONSOLIDATED INCOME STATEMENT 
FOR THE YEAR ENDED 31 DECEMBER 2007
Notes
Year ended 
 31 December 2007
$000
Year ended 
31 December 2006
$000
Revenue 3 3,771 13,669
Cost of sales (929) (3,552)
Gross profit 2,842 10,147
Exploration costs written off (11,678) (8,923)
Administrative expenses (6,603) (8,742)
Other income 246 509
Profit on disposal of subsidiaries 14 306,024 –
Profit / (loss) before interest and taxation 5 290,831 (7,009)
Interest income 3,090 3,373
Finance costs 9 – (200)
Profit / (loss) before taxation 293,921 (3,836)
Taxation 10 (66) –
Profit / (loss) for the year attributable to equity holders of the parent 293,855 (3,836)
Basic earnings / (loss) per share in US cents – basic 11 551 (7.19)*
Diluted earnings / (loss) per share in US cents – diluted 11 511 (7.19)*
* restated following 1 for 5 share consolidation 
The accompanying notes 1 to 29 form an integral part of these consolidated financial statements. Indago Petroleum Ltd. 29 Report and Financial Statements  
for the year ended 31 December 2007
CONSOLIDATED BALANCE SHEET 
AS AT 31 DECEMBER 2007
Notes
At 
31 December 2007
$000
At 
31 December 2006
$000
Non-current assets
Intangible assets 12 22,457 36,762
Property, plant and equipment 13 112 4,687
22,569 41,449
Current assets
Inventories 15 55 6,065
Trade and other receivables 16 353 12,642
Cash and cash equivalents 17 41,315 44,537
41,723 63,244
Total assets 64,292 104,693
Current liabilities
Trade and other payables 18 (5,618) (23,905)
Non-current liabilities
Provisions 19 – (566)
Total liabilities (5,618) (24,471)
Net assets 58,674 80,222
Equity
Share capital 20 27 27
Share premium – 112,170
Retained profit / (accumulated losses) 58,647 (31,975)
Total equity 58,674 80,222
The financial statements were approved by the Board of Directors on 9 April 2008.
Martin Groak
Director
The accompanying notes 1 to 29 form an integral part of these consolidated financial statements. Indago Petroleum Ltd. 30 Report and Financial Statements  
for the year ended 31 December 2007
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER 2007
Notes
31 December 2007
$000
31 December 2006
$000
Operating activities
Profit / (loss) before taxation 293,921 (3,836)
Adjustments to reconcile profit / (loss) before taxation  
to net cash flows:
Share-based payments 2,310 4,369
Exploration costs written off 5,583 –
Amortisation of and write off of intangible assets 48 174
Depreciation of property, plant and equipment 287 1,043
Profit on disposal of subsidiaries 14 (306,024) –
Interest income (3,090) (3,373)
Finance costs – 200
Tax expense (66) –
Decrease / (increase) in inventories 63 (5,221)
Increase in receivables (1,014) (10,666)
(Decrease) / increase in payables (2,847) 13,667
Increase in provisions 161 151
Net cash flows from operating activities (10,668) (3,492)
Investing activities
Interest received 3,090 3,373 
Purchase of property, plant and equipment (7,347) (689)
Purchase of intangible assets in joint ventures (27,259) (35,452)
Proceeds from sale of subsidiaries and other assets  
net of cash and cash equivalents disposed off 14 356,675 – 
Net cash flows from investing activities 325,159 (32,768)
Financing activities
Facility and interest expense – (200)
Dividends paid 6 (317,713) –
Net cash flows from financing activities (317,713) (200)
Decrease in cash and cash equivalents (3,222) (36,460) 
Cash and cash equivalents at the start of the period 44,537     80,997 
Cash and cash equivalents at the end of the period 41,315 44,537
The accompanying notes 1 to 29 form an integral part of these consolidated financial statements. Indago Petroleum Ltd. 31 Report and Financial Statements  
for the year ended 31 December 2007
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
GROUP Notes
Share capital
$000
Share premium
$000
Retained profit 
/ (accumulated 
losses)
$000
Total
$000
At 1 January 2006 27 112,170 (32,508) 79,689
Share-based payment – – 4,369 4,369
Total income and expenses for the year 
recognised in equity – – 4,369 4,369
Loss for the year – – (3,836) (3,836)
Total income and expenses for the year – – 533 533
At 31 December 2006 27 112,170 (31,975) 80,222
Share-based payments 26 – – 2,310 2,310
Total income and expenses for the year 
recognised in equity – – 2,310 2,310
Profit for the year – – 293,855 293,855
Total income and expenses for the year – – 296,165 296,165
Cancellation of share premium account – (112,170) 112,170 –
Dividend paid 6 – – (317,713) (317,713)
At 31 December 2007 27 – 58,647 58,674
The accompanying notes 1 to 29 form an integral part of these consolidated financial statements. Indago Petroleum Ltd. 32 Report and Financial Statements  
for the year ended 31 December 2007
NOTES TO THE FINANCIAL STATEMENTS
CORPORATE INFORMATION 1. 
The consolidated financial statements (the “financial statements”) of Indago Petroleum Limited and its 
subsidiaries (the “Group”) for the year ended 31 December 2007 were authorised for issue by the Board of 
Directors on 7 April 2008 and the balance sheet was signed on the Board’s behalf by Martin Groak. Indago 
Petroleum Limited (the “Company”) was incorporated in Guernsey on 23 June 2000, under the name Novus 
Qatar Limited. The Company changed its name to Novus Middle East Limited by a special resolution passed 
on 31 March 2004 and a certificate of registration was issued on 16 April 2004. The Company subsequently 
changed its name to Indago Petroleum Limited by a special resolution passed on 4 August 2005 and a certificate 
of registration was issued on 19 August 2005.
The Company’s shares were admitted for trading on the AIM of the London Stock Exchange on 
2 December  2005.
At 31 December 2007 the Group comprised five entities: the Company, Indago Ventures 31 Limited, Indago 
Ventures 43 Limited, Indago Ventures 47 Limited and Indago (UK) Services Limited.
On 5 April 2007, the Company sold its production and development assets and 50.0001% of its exploration 
assets to RAK Petroleum PCL. The Group was headquartered in Dubai, United Arab Emirates (“UAE”), but is  
now headquartered in Guernsey, Channel Islands. The tables below illustrate the Group’s interests in 
hydrocarbon operations, in both sole and joint ventures, as at 31 December 2007.
Exploration Concessions
Date of 
Acquisition
% Holding at 
31 Dec 2007
% Holding at 
31 Dec 2006 Operator Notes
Block 31, Oman 4 May 2002 49.9999% 100%
RAK Petroleum
Oman Ltd
Sold 50.0001%
5 April 2007
Block 43A, Oman 27 June 2006 49.9999% 100%
RAK Petroleum
Oman Ltd
Sold 50.0001%
5 April 2007
Block 47, Oman 13 Oct 2001 49.9999% 100%
RAK Petroleum
Oman Ltd 
Sold 50.0001%
5 April 2007
Producing field Date of Acquisition
% Holding at 
31 Dec 2007
% Holding at 
31 Dec 2006 Operator Notes
Block 8, Oman – 
Bukha Field 
1995 (10%) & 
 1997 (30%) – 40% N/A
Sold 
5 April 2007
Developments Date of Acquisition
% Holding at 
31 Dec 2007
% Holding at 
31 Dec 2006 Operator Notes
Block 8, Oman –  
West Bukha
1995 (10%) & 
 1997 (30%) – 40% N/A
Sold 
5 April 2007
Block 17, Oman 3 Nov 1999 – 40% N/A
Cancelled
28 Feb 2007
Block 30, Oman 1 Oct 2005 – 100% N/A
Sold 
5 April 2007
RAK B,  
Ras Al Khaimah 30 May 2006 – 40% N/A
Sold
5 April 2007
Saleh, Ras Al Khaimah 13 August 2006 – 40% N/A
Sold
5 April 2007 Indago Petroleum Ltd. 33 Report and Financial Statements  
for the year ended 31 December 2007
ACCOUNTING POLICIES 2. 
Basis of preparation
These financial statements have been prepared 
in accordance with the terms of the Companies 
(Guernsey) Law 1994 and International Financial 
Reporting Standards (IFRS) as adopted by the 
European Union (EU). The financial information is 
presented in US Dollars and all values are rounded 
to the nearest thousand ($000) except when 
otherwise indicated. 
Adoption of International Financial  
Reporting Standards
For all periods up to and including the year ended 
31 December 2006, the Group prepared its financial 
statements in accordance with UK Generally 
Accepted Accounting Practice (UK GAAP). 
Indago has adopted IFRS with effect from 
1 January 2007. IFRS is the reporting basis for all 
companies listed on the Alternative Investment 
Market reporting consolidated results for time 
periods beginning on or after 1 January 2007. 
As part of the IFRS transition, Indago is herewith 
providing audited year end 31 December 2006 
restated results prepared under IFRS. Accordingly, 
the Group has prepared financial statements which 
comply with IFRSs applicable for periods beginning 
on or after 1 January 2006 and the significant 
accounting policies meeting those requirements  
are described below.
Reconciliation to IFRSs from the previous published 
UK GAAP primary financial statements are shown  
in Note 29.
Basis of Consolidation
The Group financial statements consolidate the 
financial statements of Indago Petroleum Limited 
and the entities it controls (its subsidiaries) drawn  
up to 31 December each year.
Subsidiaries are consolidated from the date of their 
acquisition, being the date on which the Group 
obtains control, and continue to be consolidated 
until the date that such control ceases. Control 
comprises the power to govern the financial and 
operating policies of the investee so as to obtain 
benefit from its activities and is achieved through 
direct or indirect ownership of voting rights; currently 
exercisable or convertible potential voting rights; 
or by way of contractual agreement. The financial 
statements of subsidiaries used in the preparation  
of the consolidated financial statements are prepared 
for the same reporting year as the parent company 
and are based on consistent accounting policies. 
All intragroup balances and transactions, including 
unrealised profits arising from them, are eliminated. 
The consolidated financial statements for the 
year ended 31 December 2007 include the results 
of Indago Petroleum Limited and its subsidiary 
undertakings (the Group). It also includes the income 
and expenditure for the period 1 January 2007 to 
31 March 2007 in relation to its former subsidiaries: 
Indago Oman Limited, Indago Technical Services 
Limited, Indago Al Khaleej Limited, Indago Oman 
Block 8 Limited and Indago Oman Block 30 Limited. 
After 31 March 2007, control of these former 
subsidiaries passed to RAK Petroleum PLC.
Joint Ventures and EPSAs
A joint venture is a contractual arrangement 
whereby two or more parties (venturers) undertake 
an economic activity that is subject to joint control. 
Joint control exists only when the strategic financial 
and operating decisions relating to the activity 
require the unanimous consent of the venturers.
The Group is engaged in oil and gas exploration, 
development and production, including through 
unincorporated joint ventures called Exploration and 
Production Sharing Agreements (EPSAs). The Group 
accounts for its share of assets, liabilities, income 
and expenditure of Joint Ventures in which the Group 
holds an interest, classified in the appropriate balance 
sheet and income statement headings. The Group’s 
principal license interests are jointly controlled assets.
Exploration, Appraisal and Development Expenditure
Exploration and appraisal costs are accounted for 
using the successful efforts method. All exploration 
and appraisal costs are initially capitalised as 
intangible assets in cost centres by well, field 
or exploration area, as appropriate, pending 
determination of commercial reserves. These costs 
are then expensed through the income statement, 
unless commercial reserves have been established 
or the determination process has not Exploration, 
been completed. Following the discovery of a 
commercially viable well, the attributable costs are 
transferred to development and producing assets 
in property, plant and equipment, in a single field 
cost centre. All development costs are capitalised 
on a field by field basis and depreciated on a 
unit-of-production basis from the commencement 
of production over the life of the field. When the 
development is approved, the relevant expenditure  
is transferred to development assets.
Intangible assets prior to the conclusion of appraisal 
activities are assessed for impairment in cost 
pools when facts and circumstances suggest that 
the carrying amount of a cost pool may exceed its 
recoverable amount. Recoverable amounts are 
determined based upon risked potential, and where 
relevant, discovered oil and gas reserves. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 34 Report and Financial Statements  
for the year ended 31 December 2007
ACCOUNTING POLICIES (CONTINUED) 2. 
Exploration, Appraisal and Development Expenditure 
(continued) 
Intangible assets have finite useful lives and are 
measured at cost and amortised or depreciated 
at rates to write off the cost, less any estimated 
residual value, based on prices prevailing at the date 
of acquisition of each asset evenly over its expected 
useful life, as follows:
Licence fees – as an intangible asset: over  
  the life of the concession
Licence fees – as property, plant and  
  equipment: on a unit of  
  production (UOP) basis
Commercial reserves
Commercial reserves are proven and probable oil 
and gas reserves. Proven and probable reserves 
are the estimated quantities of crude oil, natural 
gas and natural gas liquids which geological, 
geophysical and engineering data demonstrate with 
a specified degree of certainty to be recoverable in 
future years from known reservoirs and which are 
considered commercially producible. There should 
be a 50 per cent statistical probability that the actual 
quantity of recoverable reserves will be more than 
the amount estimated as proven and probable and  
a 50 per cent statistical probability that it will be less. 
The equivalent statistical probabilities for the proven 
component of proven and probable reserves are  
90 per cent and 10 per cent respectively.
Depletion and depreciation of oil and gas assets
All oil and gas expenditure including capitalised 
exploration expenditure carried within each field is 
depreciated from the commencement of production, 
on a unit of production basis, which is the ratio of oil 
and gas production in the period to the estimated 
quantities of commercial reserves at the end of the 
period plus the production in the period, on a  
field-by-field basis.
Costs used in the unit of production calculation 
comprise the net book value of capitalised costs plus 
the estimated future field development costs. Changes 
in the estimates of commercial reserves or future field 
development costs are dealt with prospectively.
Property, plant and equipment – non oil and  
gas assets
Property, plant and equipment assets are stated at 
cost, excluding the costs of day to day servicing, net 
of accumulated depreciation and any accumulated 
provision for impairment in value. Such cost includes 
the cost of replacing part of the property, plant 
and equipment when that cost is incurred, if the 
recognition criteria are met.
An item of property, plant and equipment is 
derecognised upon disposal or when no future 
economic benefits are expected from its use or 
disposal. Any gain or loss arising on de-recognition 
of the asset (calculated as the difference between 
the net disposal proceeds and the carrying amount 
of the asset) is included in the income statement in 
the year the asset is derecognised.
The asset’s residual values, useful lives and methods 
of depreciation are reviewed, and adjusted if 
appropriate, at each financial year end.
Depreciation on property, plant and equipment
Depreciation is provided on a straight line basis at 
rates calculated to write off the cost of the asset, 
less any estimated residual value of each asset, 
evenly over its expected useful life, as follows:
Plant and equipment – 2.5 to 4 years
Impairment of intangible assets and property,  
plant and equipment
The Group assesses whether there are any indicators 
of impairment for property, plant and equipment at 
each reporting date. Property, plant and equipment 
are tested for impairment when there are indicators 
that the carrying amounts may not be recoverable. 
Individual assets are grouped for impairment 
assessment purposes at the lowest level at which 
there are identifiable cash flows that are largely 
independent of the cash flows of other groups of 
assets. If any such indication of impairment exists, 
the Group makes an estimate of its recoverable 
amount. An asset group’s recoverable amount is 
the higher of its fair value less costs to sell and its 
value in use. Where the carrying amount of an asset 
group exceeds its recoverable amount, the asset 
group is considered impaired and is written down to 
its recoverable amount. In assessing value in use, 
the estimated future cash flows are adjusted for the 
risks specific to the asset group and are discounted 
to their present value using a pre-tax discount rate 
that reflects current market assessments of the time 
value of money. Indago Petroleum Ltd. 35 Report and Financial Statements  
for the year ended 31 December 2007
ACCOUNTING POLICIES (CONTINUED) 2. 
Decommissioning
No provision is made for decommissioning, 
dismantling, restoration, abandonment or salvage 
values with respect to EPSAs unless the Group has  
a present, legal or constructive obligation. 
Where such an obligation exists, Indago recognises 
the full discounted cost of decommissioning as an 
asset and a liability. The decommissioning asset 
is included within property, plant and equipment 
with the cost of the related installation. The 
decommissioning liability is included in provisions. 
The asset is amortised on a unit of production 
(UOP) basis. Any change in the present value of the 
estimated expenditure is reflected as an adjustment 
to the provision and the oil and gas asset. 
The unwinding of the discount of future 
decommissioning provisions is included as a 
separate financial item in the income statement 
under finance costs.
Foreign currency
The Group’s operations and the majority of all costs 
associated with foreign operations are paid in US 
Dollars and not the local currency of the country’s 
operations.
Transactions in foreign currencies are initially 
recorded at the functional currency rate ruling 
at the date of the transaction. Monetary assets 
and liabilities denominated in foreign currencies 
are retranslated at the functional currency rate 
of exchange ruling at the balance sheet date. All 
differences are recognised in the income statement 
in the period. Non-monetary items that are measured 
in terms of historical cost in a foreign currency are 
translated using the exchange rates as at the dates 
of the initial transactions.
Provisions
A provision is recognised when the Group has a 
legal or constructive obligation as a result of a past 
event, it is probable that an outflow of economic 
benefits will be required to settle the obligation and 
a reliable estimate can be made of the amount of 
the obligation. 
Share-based payments
The Group issues equity-settled share-based 
payments to certain employees in the form of 
options to acquire ordinary shares in the Company.
In accordance with IFRS 2, the cost of equity-settled 
transactions with employees, for awards granted 
after 7 November 2002, is measured by reference to 
the fair value at the date on which they are granted. 
The fair value is determined by an external valuer 
using an appropriate pricing model.
The cost of equity-settled transactions is recognised, 
together with a corresponding increase in equity, 
over the period in which the performance and/or 
service conditions are fulfilled, ending on the date 
on which the relevant employees become fully 
entitled to the award (“vesting date”). The cumulative 
expense recognised for equity-settled transactions at 
each reporting date until the vesting date reflects the 
extent to which the vesting period has expired and 
the Group’s best estimate of the number of equity 
instruments that will ultimately vest. The income 
statement charge or credit for a period represents 
the movement in cumulative expense recognised  
as at the beginning and end of that period.
No expense is recognised for awards that do not 
ultimately vest, except for awards where vesting 
is conditional upon a market condition, which are 
treated as vesting irrespective of whether or not the 
market condition is satisfied, provided that all other 
performance conditions are satisfied.
Where the terms of an equity-settled award are 
modified, the minimum expense recognised is 
the expense if the terms had not been modified. 
An additional expense is recognised for any 
modification, which increases the total fair value 
of the share based payment arrangement, or is 
otherwise beneficial to the employee as measured  
at the date of modification.
Where an equity-settled award is cancelled,  
it is treated as if it had vested on the date of 
cancellation, and any expense not yet recognised  
for the award is recognised immediately. However, 
 if a new award is substituted for the cancelled 
award, and designated as a replacement award 
on the date that it is granted, the cancelled and 
the new awards are treated as if they were a 
modification of the original award, as described  
in the previous paragraph.
The dilutive effect of outstanding options is 
reflected as share dilution in the computation  
of earnings per share. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 36 Report and Financial Statements  
for the year ended 31 December 2007
ACCOUNTING POLICIES (CONTINUED) 2. 
Revenue recognition
Revenue is recognised to the extent that it is 
probable that economic benefits will flow to the 
Group and the revenue can be reliably measured. 
The following specific revenue recognition criteria 
must also be met before revenue can be recognised:
Sale of goods – Revenue is recognised when 
significant risks and rewards of ownership of 
hydrocarbons passes to the purchaser and the costs 
in respect of the transaction can be measured reliably. 
Consultancy services – The Indago subsidiary controls 
the right to be compensated for services rendered to 
joint ventures in which the subsidiary is a participant 
from other third parties. Consultancy income is 
recognised when services have been rendered.
Inventories
Inventories of (i) petroleum products and (ii) drilling 
and maintenance stocks are carried at the lower of 
cost and net realisable value. The cost of petroleum 
products includes a proportion of production costs 
based on normal operating capacity plus a share 
of depreciation and amortisation of petroleum 
properties, plant and equipment. Costs of petroleum 
products are determined by using weighted average, 
whereas, costs of drilling and maintenance stocks 
are accounted for at purchase cost on a first-in,  
first-out basis. Net realisable value is determined on 
the basis of estimated selling price in the ordinary 
course of business less any costs likely to be 
incurred to completion and disposal.  
Operating leases
Where substantially all of the risks and rewards 
incidental to ownership are retained by the lessor  
(an “operating lease”), the total rentals payable under 
operating leases are charged in the income statement 
on a straight line basis over the lease term.
Financial instruments
Trade and other receivables »
Trade receivables are recognised and carried at 
the original invoiced amount less any allowance 
for doubtful debts. Other receivables are 
recognised and measured at nominal value which 
approximates to fair value.
Amounts owed by or to joint venture partners »
Cash calls from or to joint venture partners for their 
or the Group’s share of the investment programme 
are recognised at the original called amount.
Cash and cash equivalents »
Cash and cash equivalents comprise cash at bank 
and short-term deposits with a maturity of three 
months or less.
Trade and other payables »
Trade and other payables are non-interest bearing 
and are measured at cost which approximates  
to fair value.
Borrowing costs »
Interest payable and all other borrowing costs are 
recognised in the income statement in the period 
in which they are incurred using the effective 
interest method.
Derecognition of financial assets and liabilities
A financial asset or liability is generally derecognised 
when the contract that gives rise to it is settled, sold, 
cancelled or expires.
Where an existing financial liability is replaced by 
another from the same lender on substantially 
different terms, or the terms of an existing liability 
are substantially modified, such an exchange or 
modification is treated as a derecognition of the 
original liability and the recognition of a new liability, 
such that the difference in the respective carrying 
amounts together with any costs or fees incurred are 
recognised in the income statement. 
Impairment of financial assets
The Group assesses at each balance sheet date 
whether a financial asset or group of financial assets 
is impaired.
Critical accounting judgements and key sources  
of estimation uncertainty
The preparation of financial statements in 
accordance with IFRSs requires management to 
make estimates and judgements that affect the 
reported amounts of assets and liabilities as well as 
the disclosure of contingent assets and liabilities at 
the balance sheet date and the reported amounts of 
revenues and expenses during the reporting period.
In accordance with IAS 1, estimates and judgements 
are continually evaluated and are based on 
historical experience and other factors, including 
expectations of future events that are believed to be 
reasonable under the circumstances. The significant 
judgements made by management in applying the 
Group’s accounting policies and the key sources of 
estimation uncertainty were: Indago Petroleum Ltd. 37 Report and Financial Statements  
for the year ended 31 December 2007
Impairment of assets »
The Group assesses whether there are any 
indicators of impairment for property, plant and 
equipment at each reporting date. Property, plant 
and equipment are tested for impairment when 
there are indicators that the carrying amounts may 
not be recoverable.
When value in use calculations are undertaken, 
management must estimate the expected future 
cash flows from the asset or cash generating unit 
and choose a suitable discount rate in order to 
calculate the present value of those cash flows. 
The discount rate to be applied in discounting 
future cash flows is subject to regular review to 
take account of prevailing market conditions.
Intangible assets prior to the conclusion of 
appraisal activities are assessed for impairment 
in cost pools when facts and circumstances 
suggest that the carrying amount of a cost pool 
may exceed its recoverable amount. Recoverable 
amounts are determined based upon risked 
potential, and where relevant, discovered oil  
and gas reserves.
Depletion and depreciation »
All expenditure capitalised as oil and gas assets 
with respect to a particular field is depreciated 
from the commencement of production on a 
UOP basis. Costs used in the UOP calculation 
comprise the net book value of capitalised costs 
plus management’s estimates of future field 
development costs.
Share-based payments »
In accordance with IFRS 2 the Group records 
the fair value of the award of options to its staff 
members and directors. This fair value is assessed 
by external consultants, but included in their 
calculations are parameters given by management.
The key parameters supplied by management and 
based on their judgement are:
Expected share price volatility •	
Staff turnover ratio •	
Employee exercise multiple •	
Future changes in accounting policies
At the date of the authorisation of these financial 
statements, certain new Standards, amendments 
and Interpretations to existing Standards have been 
published but are not yet effective. The Group has 
not early adopted any of these pronouncements.  
The new Standards, amendments and Interpretations 
that are expected to be relevant to the Group’s 
financial statements are as follows:
International Accounting Standards (IAS / IFRSs)
IAS 1 ‘Presentation of Financial Statements  
 (amendment)’
This amendment affects the presentation of owner 
changes in equity and introduces a statement of 
comprehensive income. Preparers will have the 
option of presenting items of income and expense 
and components of other comprehensive income 
either in a single statement of comprehensive 
income with subtotals, or in two separate statements 
(a separate income statement followed by a 
statement of other comprehensive income). 
This amendment does not affect the financial 
position or results of the Group but will give rise to 
additional disclosures. The directors are currently 
assessing the detailed impact of this amendment on 
the Group’s financial statements.
IFRS 2 ‘Amendments to IFRS 2 – Vesting Conditions 
 and Cancellations’ 
This amendment is required to be applied to 
periods beginning on or after 1 January 2009. This 
amendment clarifies the definition of non-vesting 
conditions and prescribes accounting treatment of 
an award that is cancelled because a non-vesting 
condition is not satisfied. 
This will have no significant impact on the group’s 
financial statements. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 38 Report and Financial Statements  
for the year ended 31 December 2007
ACCOUNTING POLICIES (CONTINUED) 2. 
IFRS 3  ‘Business Combinations (Revised)’ and  
 the amended version of IAS 27 ‘Consolidated  
 and Separate Financial Statements’, 
This amendment is effective for annual periods 
beginning on or after 1 July 2009, have been 
enhanced to, amongst other reasons, specify 
the accounting treatments for acquisition costs, 
contingent consideration, pre-existing relationships 
and reacquired rights. The revised standards include 
detailed guidance in respect of step acquisitions and 
partial disposals of subsidiaries and associates as 
well as in respect of allocation of income to non-
controlling interests. Further, an option has been 
added to IFRS 3 to permit an entity to recognise  
100 per cent of the goodwill of an acquired entity, 
not just the acquiring entity’s portion of the goodwill. 
There is no impact of this standard on the group.
IFRS 8  ‘Operating Segments’
IFRS 8 Operating Segments is effective for periods 
beginning on or after 1 January 2009. This standard 
replaces IAS 14 Segment Reporting and defines 
operating segments as components of an entity 
about which separate financial information is 
available and is evaluated regularly by the chief 
operating decision maker in deciding how to allocate 
resources and in assessing performance. The 
standard replaces the requirement to determine 
primary (business) and secondary (geographical) 
reporting segments of the Group. 
There will be no effect on the Group’s reported 
income or net assets. 
International Financial Reporting Interpretations 
Committee (IFRIC)
IFRIC 11 ‘IFRS 2 – Group and Treasury  
 Share Transactions’
IFRIC 11 ‘IFRS 2 Group and Treasury Share 
Transactions’ is effective for years beginning on or 
after 1 January 2008. This interpretation requires 
arrangements whereby an employee is granted rights 
to an entity’s equity instruments to be accounted 
for as an equity-settled scheme, even if the entity 
buys the instruments from another party, or the 
shareholders provide the equity instruments needed. 
The Group will adopt this interpretation in the 
following financial period.
REVENUE 3. 
Revenue disclosed in the income statement is 
analysed as follows:
2007
$000
2006
$000
Oil and gas sales 3,771 13,669
Other income 246 509
Interest income 3,090 3,373
7,107 17,551
Revenue from oil and gas sales derives from the 
same geographical source – the Arabian Peninsula.
Other income includes recharges of services 
provided to joint ventures.
SEGMENTAL INFORMATION 4. 
The Group is engaged in oil and gas production, 
development and exploration in the Sultanate of 
Oman (and formerly the United Arab Emirates 
(UAE)). The Group’s primary segment reporting is 
determined to be the business segment and the 
secondary segment is the geographical segment.  
In the opinion of the directors, the Group’s activities 
comprise only one business segment – the 
exploration, production and sale of oil, natural gas 
and natural gas liquids and only one geographical 
segment the Arabian Peninsula. There are no other 
significant classes of business or geographical 
segment, either singularly or in aggregate.  Indago Petroleum Ltd. 39 Report and Financial Statements  
for the year ended 31 December 2007
PROFIT/(LOSS) BEFORE INTEREST AND TAXATION 5. 
Year ended
 31 December 2007
$000
Year ended 
31 December 2006
$000
Profit/(loss) before interest and taxation is stated after charging:
Fees payable to the Group’s auditors:
– for the audit of the Group’s annual financial statements 179 133
Fees payable to the Group’s auditors for the other services:
– for the audit of the Group’s subsidiaries 20 40
– for tax services 116 26
– for all other services 51 – 
Depletion and amortisation of tangible development and  
producing assets 199 899
Depreciation of plant, fittings and fixtures 88 144
Amortisation of intangible licence fees 48 174
Exploration costs written off 11,678 8,923
Foreign currency gains and losses (2,144) –
Operating lease payments – offices 85 552
Operating lease payments – gas processing and storage plant 580 1,411
Exploration costs written off in 2007 represent mainly the Group’s share of geophysical operations and technical 
evaluation in Blocks 31, 47 and 43A Oman, plus geophysical operations in Block 8 Oman prior to the sale of 
that asset. Exploration costs written off in 2006 represent costs related predominantly to technical studies on 
Blocks 31 and 47 and West Bukha (Block 8), Oman.
DIVIDEND 6. 
2007
$000
2006
$000
Declared and paid during the year:
Final dividend for 2006: £Nil (2005: £Nil) – –
Interim for 2007: £0.60 (2006: £Nil) 317,713 –
317,713 –
Proposed for approval by shareholders at the AGM:
Final dividend for 2007: Nil (2006: £Nil) – –
Total 317,713 –
INFORMATION REGARDING DIRECTORS’ EMOLUMENTS 7. 
Information regarding directors’ emoluments is included in the Directors’ Remuneration Report on page 21 above. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 40 Report and Financial Statements  
for the year ended 31 December 2007
EMPLOYEES 8. 
Headcount
Year ended 
31 December 2007
Number
Year ended
31 December 2006
Number
The average number of employees of the Group  
(including executive directors) during the year was:
Management 3 6
Technical staff 4 15
Support / other 3 12
10 33
At 31 December 2007 the Group had 4 employees (31 December 2006: 33). 
Staff costs
Year ended 
31 December 2007
$000
Year ended
31 December 2006
$000
Wages and salaries 2,227 4,679
Employee gratuity costs 157 151
Pension costs: defined contributions 50 20
Other employee benefits (housing, schooling, medical, etc) 183 420
Share-based payment (employee options) 2,310 4,369
4,927 9,639
FINANCE COSTS 9. 
Year ended 
31 December 2007
$000
Year ended
31 December 2006
$000
Commitment fees – 200
– 200
The amount in 2006 of $200,000 represented commitment fees to a related party, Meridian Capital CIS Fund,  
in relation to a borrowing facility. Indago Petroleum Ltd. 41 Report and Financial Statements  
for the year ended 31 December 2007
TAXATION 10. 
The relationship between the expected tax expense based on the standard tax rate of Indago Petroleum 
Limited at 0% (2006: 0%) and the tax expense actually recorded in the consolidated income statement can be 
reconciled as follows:
Year ended 
31 December 2007
$000
Year ended 
31 December 2006
$000
Profit / (loss) before taxation 293,855 (3,836)
Tax rate Nil Nil
Expected tax expense Nil Nil
Tax on income subject to UK corporation tax 66 – 
Actual tax expense 66 – 
Comprising:
Current tax expense:
United Kingdom 66 – 
66 –
EARNINGS PER ORDINARY SHARE 11. 
The calculation of basic earnings per share is based on a net profit after taxation attributable to 
equity shareholders of the parent for the year ended 31 December 2007 of $293,855,000 (year ended 
31 December 2006: loss $3,836,000) and 53,333,311 ordinary shares, being the weighted average number of 
ordinary shares in issue during the period (31 December 2006: adjusted for the share consolidation 53,333,311).
The calculation of the diluted earning per share is based on net profit after taxation attributable to equity 
shareholders of the parent for the year ended 31 December 2007 of $293,855,000 and 57,458,896 ordinary 
shares and options, being the weighted average number of ordinary shares in issue during the period 
(53,333,311), plus the weighted average number of 4,125,675 ordinary shares held under options by past and 
present employees, advisers and brokers. No other options would have vested by the end of the period. 
In relation to the year ended 31 December 2006, the loss attributable to ordinary shareholders and the weighted 
average number of ordinary shares for the purpose of calculating the diluted earnings per share are identical to 
those used for the basic earnings per share. This is because the exercise of share options would have the effect 
of reducing the loss per share and is therefore not dilutive under the terms of IAS 33. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 42 Report and Financial Statements  
for the year ended 31 December 2007
INTANGIBLE ASSETS 12. 
Exploration 
and appraisal 
expenditure
$000
Cost:
At 1 January 2006 2,245
Additions 35,452
At 31 December 2006 37,697
Additions 27,259
Disposals (36,916)
Write offs (5,583)
At 31 December 2007 22,457
Amortisation of licence fee and amounts written off:
At 1 January 2006 761
Charge for the period 174
At 31 December 2006 935
Charge for the period 48
Disposals (983)
At 31 December 2007 –
Net book value at 31 December 2007 22,457
Net book value at 31 December 2006 36,762
Net book value at 1 January 2006 1,484
The intangible asset disposals include West Bukha development activity and approximately 50% of amounts 
capitalised in relation to exploration drilling at Hawamel and Al Jariya-1. 
The intangible asset cost additions pertaining to retained assets include capitalised amounts as at 
31 December 2007 and not amortised of $22,457,000 relating predominantly to the drilling of the Al-Jariya-1 well 
on the Jebel Hafit prospect in Block 31 Oman ($21,638,000). The balance of $819,000 relates to work done on 
the Hawamel well and the Zad well (to be drilled in 2008), both on the Izz prospect in Block 47 Oman. Indago Petroleum Ltd. 43 Report and Financial Statements  
for the year ended 31 December 2007
PROPERTY , PLANT AND EQUIPMENT 13. 
Tangible 
development and 
producing assets
$000
Plant, fixtures and 
fittings
$000
Total
$000
Cost:
At 1 January 2006 11,832 277 12,109
Additions – 689 689
At 31 December 2006 11,832 966 12,798
Additions 7,226 121 7,347
Disposals (19,058) (939) (19,997)
At 31 December 2007 – 148 148
Depreciation, depletion and amortisation:
At 1 January 2006 7,010 58 7,068
Charge for the period 899 144 1,043
At 31 December 2006 7,909 202 8,111
Charge for the period 199 88 287
Disposals (8,108) (254) (8,362)
At 31 December 2007 – 36 36
Net book value at 31 December 2007 – 112 112
Net book value at 31 December 2006 3,923 764 4,687
Net book value at 1 January 2006 4,822 219 5,041
The disposals in the period represent the assets transferred as part of the RAK Petroleum transaction.
DISPOSAL OF SUBSIDIARIES AND OTHER ASSETS 14. 
On 5 April 2007, the Company completed the disposal of all of its production and development assets, as well 
as 50.0001% of its exploration assets, plus cash on hand, to RAK Petroleum PCL for a total consideration of 
£194,235,267 (approximately $383 million) – equivalent to 72.5 pence per share on a fully diluted basis.
This generated a profit on disposal of approximately $306 million at Group level. The Board then resolved 
to return to shareholders 60 pence per share via an interim, special dividend. As distributable profits of the 
Company were just above 50 pence per share, it was necessary to cancel the Company’s share premium 
account, which stood at approximately $112 million, to release the additional funds into distributable reserves  
in order to achieve a 60 pence per share dividend.
An Extraordinary General Meeting (EGM) was held on 3 April 2007 to approve the transaction, 
to approve the cancellation of the share premium account and to approve the consolidation of the Company’s 
share capital on a 1 for 5 ratio. All the resolutions were passed.
A court hearing was held in Guernsey to receive approval for the cancellation of the share premium account  
and the special dividend of £160.0 million ($317.7 million) was paid on 18 April 2007.
As a result of the transaction, Peter Sadler and John Hurst left the Board of the Company. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 44 Report and Financial Statements  
for the year ended 31 December 2007
DISPOSAL OF SUBSIDIARIES AND OTHER ASSETS (CONTINUED) 14. 
Assets disposed of completely as a result of the transaction were:
40% interest in Block 8 (Bukha and West Bukha production and development) offshore Oman •	
40% interest in RAK-B block offshore Ras Al Khaimah, UAE •	
40% interest in Saleh block offshore Ras Al Khaimah, UAE •	
100% interest in Block 30 onshore Oman. •	
In addition assets in which a 50.0001% interest has been disposed of by the Group are:
Block 31 onshore Oman; •	
Block 47 onshore Oman; and •	
Block 43A onshore Oman. •	
The profit on disposal has been calculated as follows:
$000 $000
Consideration 382,779
Working capital adjustment (2,563)
Net consideration 380,216
Assets and liabilities of subsidiaries disposed of:
Property, plant and equipment 11,635
Intangible asset 35,933
Current assets 15,311
Cash and cash equivalent 23,541
Less: current liabilities (15,698)
Less: non-current liabilities (723)
(69,999)
Less: professional fees (4,193)
Profit on disposal 306,024
INVENTORIES 15. 
31 December 2007
$000
31 December 2006
$000
Casing and other warehouse inventories 55 5,879
Hydrocarbons (condensate) in tanks – 186
Total 55 6,065
In the year ended 31 December 2007, $64,000 of inventory was included in the income statement as an expense 
(2006: $62,200) in cost of sales. This includes an amount of $Nil resulting from write down of inventories 
(2006: $Nil). No reversal of previous write downs was recognised as a reduction of expense in 2006 or 2007.
In the opinion of the directors, the value of inventories has not been impaired. Indago Petroleum Ltd. 45 Report and Financial Statements  
for the year ended 31 December 2007
TRADE AND OTHER RECEIVABLES 16. 
31 December 2007
$000
31 December 2006
$000
Trade receivables – 126
Amounts owed by joint venture partners – 7,443
Other receivables 188 4,324
Prepayments 165 749
353 12,642
At the balance sheet date there were no trade and other receivables past due or impaired.
CASH AND CASH EQUIVALENTS 17. 
31 December 2007
$000
31 December 2006
$000
Cash at bank and in hand 38,939 44,537
Share of joint venture party funds 2,376 –
41,315 44,537
TRADE AND OTHER PAYABLES 18. 
31 December 2007
$000
31 December 2006
$000
Trade and other payables 5,303 18,280
Accruals 315 5,625
5,618 23,905
Terms and conditions of the financial liabilities:
Trade and other payables are non-interest bearing and are normally settled on 30-day terms.
PROVISIONS 19. 
31 December 2007
$000
31 December 2006
$000
Employee gratuity provision:
At 1 January 566 415
Gratuity provision provided during the year 157 151
Gratuity entitlements transferred as part of the disposal of subsidiaries (723) –
Gratuity provision as at 31 December – 566
Provision for employee benefits related to end of contract gratuities, a legal requirement for expatriate 
employees located in Oman and UAE, and was provided based on 21 days pay for every year of the first five 
years of service and 30 days for every year of employment thereafter.
Under the terms of their employment contracts, expatriate directors of the Group were being paid a base salary 
deemed to include gratuity entitlements. 
Pursuant to the RAK Petroleum transaction, Indago Technical Services Limited, which carried the gratuity 
provision, was sold to RAK Petroleum. As a result the Group has no further provision in this regard with effect 
from 5 April 2007. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 46 Report and Financial Statements  
for the year ended 31 December 2007
AUTHORISED AND ISSUED SHARE CAPITAL 20. 
Authorised Number $000
Allotted, called up  
and fully paid Number $000
Ordinary shares of US$0.0005 each 
At 31 December 2007 80,000,000 40 53,333,311 27
Ordinary shares of US$0.0001 each 
At 31 December 2006 400,000,000 40 266,666,667 27
The impact of the 1 for 5 share consolidation on the Company’s share capital described in note 14 above was 
the following:
Before Consolidation After Consolidation
Authorised number of shares 400,000,000 80,000,000
Par value per share $0.0001 $0.0005
Number of shares in issue 266,666,667 53,333,311
Nominal share capital in issue $26,667 $26,667
An explanation of the Group’s capital management process and objectives is set out in the discussion of capital 
management on page 17 in the Directors’ Report.
COMMITMENTS 21. 
At 31 December 2007, under the terms of the Exploration & Production Sharing Agreements (EPSAs) the Group 
has satisfied the minimum expenditure obligations on Blocks 31 and 47 for the current licence period, but has 
commitments of $0.4 million (2006: $3.2 million) with respect to the Block 43A EPSA.
INTEREST IN JOINT VENTURES 22. 
The share of assets, liabilities, income and expenditure of jointly controlled assets at 31 December 2007 and 
2006 and for the years then ended, which are included in the consolidated financial statements are as follows:
2007
$’000
2006
$’000
Current assets 2,376 9,567
Non-current assets 22,471 25,827
24,847 35,394
Current liabilities (5,107) (12,589)
Non-current liabilities – (26)
19,740 22,779
Revenue 3,771 13,669
Cost of sales (929) (3,034)
Exploration costs written off (11,678) (8,923)
Administrative expenses (1,102) (431)
Other income 246 539
Finance costs – –
(Loss) /profit before income tax (9,692) 1,820
Income tax expense – –
Net (loss) / profit (9,692) 1,820 Indago Petroleum Ltd. 47 Report and Financial Statements  
for the year ended 31 December 2007
OPERATING LEASES 23. 
The Group’s future minimum operating leases payments are as follows:
At 
31 December 2007
$000
At 
31 December 2006
$000
In less than one year – 726
In one to five years 365 6,114
In more than five years – 14,110
Total 365 20,950
Pursuant to the RAK Petroleum transaction, and with effect from 5 April 2007, the Group divested itself of all 
liability for operating leases with annual commitments of $726,000 with respect to operating leases which expire 
in less than one year and an annual commitment of $1,411,000 (based on usage) with respect to operating 
leases which expire in more than five years. The Group retains an obligation for the operating lease pertaining  
to Indago (UK) Services Limited which expires in one to five years.
RELATED PARTY TRANSACTIONS 24. 
During the year, the Group entered into transactions, in the ordinary course of business, with related parties.  
All transactions with directors have been disclosed in these financial statements, in the Directors’ Report on 
pages 17 to 20 or in the Directors’ Remuneration Report on pages 21 and 22.
On 5 April 2007, the Company completed the disposal of all of its production and development assets, as well 
as 50.0001% of its exploration assets, plus cash on hand, to RAK Petroleum PCL for a total consideration of 
£194,235,267 (approximately $383 million). Further information on this transaction has been disclosed in note 14 
of these financial statements.
The Company entered into a $20,000,000 two year 10% fixed interest loan facility with Meridian Capital CIS Fund, 
a subsidiary of the largest shareholder, (the “Facility”) on 8 November 2005 for the purpose of funding working 
capital. During the 2006 financial year $200,000 of commitment fees were paid to Meridian Capital CIS Fund. 
At 31 December 2006 there were no balances due to or from Meridian Capital CIS fund or Meridian Oil and Gas 
(Middle East) Limited. Furthermore, no balances between the related parties were written off during the year.
As a result of the RAK Petroleum transaction, the Facility was cancelled on 5 April 2007.
Prior to 31 March 2007, Indago billed costs to the joint venture partners in oil and gas exploration activities 
in which Indago acted as the operator up to that date as follows:
Block 17:
Atlantis Technology Services Ltd – 12 months to December 2006 – $96,000 – 12 months to December 2007 
– $2,000. No balances were outstanding by Indago at 31 December 2007 (31 December 2006: receivable of 
$54,500).
Eagle Energy (Oman) Ltd – 12 months to December 2006 – $19,000 – 12 months to December 2007 – $1,000. 
No balances were outstanding by Indago at 31 December 2007 (31 December 2006: receivable of $7,500).
Block 8:
LG International – 12 months to December 2006 – $31,380,000 – 12 months to December 2007 – $5,472,000. 
No balances were outstanding by Indago at 31 December 2007 (31 December 2006: receivable of $6,151,000).
Eagle Energy (Oman) Ltd – 12 months to December 2006 – $6,296,000 – 12 months to December 2007 – 
$1,094,000. No balances were outstanding by Indago at 31 December 2007 (31 December 2006: receivable  
of $1,230,000). NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 48 Report and Financial Statements  
for the year ended 31 December 2007
RELATED PARTY TRANSACTIONS (CONTINUED) 24. 
During the year the Company was billed $34,149,000 for 2007 (31 December 2006 : Nil) in respect of exploration 
costs for blocks 31, 43A and 47 in the Sultanate of Oman as described more fully in note 22. 
During the year, the company received interest related credit on consideration of the disposal of assets to  
RAK Petroleum amounting to $7.7 million (net).
FINANCIAL INSTRUMENTS 25. 
The Group’s principal financial instruments comprise cash balances, balances with related parties, trade 
payables and trade receivables arising in the ordinary course of its operations. 
Foreign currency risk
The Group hedges exposures by maintaining cash balances in US$ and Sterling so as to match foreseeable 
liabilities in these currencies. With the exception of the UK company, currencies of the countries in which the 
Group operates are linked to the US Dollar, reducing the Group’s foreign currency exposure. The Group’s 
significant sales, service and procurement contracts are denominated in US Dollars.
The net monetary assets in currencies other than US Dollars at the balance sheet date were $6,928,393 
(2006: $183,921), of which nil are in currencies pegged to the US$ (2006: $156,188).
Commodity price risk
It is the Group’s policy not to undertake any commodity price hedging. The Group remains unhedged against 
these exposures.
Credit risk
There are no significant concentration of credit risk within the Group unless otherwise disclosed. The maximum 
credit risk exposure relating to financial asset is represented by carrying value as at the balance sheet date. 
Following the RAK Petroleum transaction, the Group is no longer exposed to credit risk. Prior to the RAK 
Petroleum transaction, the Group sold its gas condensate product to Sumitomo Corporation of Japan. The 
Group had the right to ask for a Letter of Credit to guarantee the payment of the transaction, or required 
prepayment before title passed. The Group sold its LPG (bottled gas) to the Ras Al Khaimah Gas Commission 
(“Rakgas”). Rakgas is a Ras Al Khaimah (UAE) state organisation and these transactions were not protected.
Interest rate risk 
The Group had no fixed rate financial liabilities at the year end. The Group has floating rate financial assets in the 
form of deposit accounts with major banking institutions.
Fair values of financial assets and liabilities 
There are no material differences between the fair value of the Group’s financial assets and liabilities and their 
carrying values in the financial information. The fair and book value of the Group’s financial assets and liabilities, 
excluding short term receivables and payables, is as follows:
31 December 2007
$000
31 December 2006
$000
Financial assets:
Cash at bank and in hand 38,939 44,537
Share of joint venture party funds 2,376 –
Total financial assets 41,315 44,537
Total financial liabilities – –
Net financial assets 41,315 44,537
  Indago Petroleum Ltd. 49 Report and Financial Statements  
for the year ended 31 December 2007
Borrowing facilities
The Group had no external borrowing facilities at the date of this report. Details of the Group’s previous funding 
arrangements with Meridian Capital CIS Fund are explained in Note 24.
The Group’s view on managing its liquidity risk is set out in the Financial Performance section of the  
Directors’ Report on pages 17 and 18.
The Group was negotiating a $40 million facility with a major lending bank to fund the Group’s share of the 
building of a pipeline linking Bukha West to the existing Bukha platform, and thence to shore. Following the 
completion of the RAK Petroleum transaction, the responsibility for the pipeline and the discussions with the 
bank, have transferred to RAK Petroleum.
SHARE-BASED PAYMENT 26. 
Options
The Company adopted the Indago Petroleum Share Option plan on 25 November 2005 prior to the listing on 
the London Stock Exchange Alternative Investment Market. The objective of the Plan is to develop the interest 
of directors, officers, key employees and certain consultants of the Group in the growth and development of 
the Group by providing them with the opportunity to acquire a shareholding in the Company and to assist the 
Company in retaining and attracting executives with experience and ability. IPL’s Remuneration Committee 
administers the Option Plan, which is unapproved for HM Revenue & Customs purposes. 
All employees and directors of the Company and any company which it controls or by which the Company is 
controlled are eligible to participate in the scheme.
The number of Ordinary Shares which may be issued under the Option Plan is limited so that, in any ten year period, 
not more than 10% of the issued ordinary share capital of the Company for the time being may, in aggregate, be 
issued or issuable under the Option Plan and any other employee share plan operated by the Company. 
As per the terms and conditions of the scheme, the vesting condition for options to the directors and employees 
is three years of continuous service with the IPL or any other company in the group from the grant date. These 
options are exercisable within 10 years from the vesting date. The options awarded to consultants at the time of 
IPO (Broker and Nominated Adviser) have already vested under separate terms and conditions. 
At the balance sheet date, the following unlisted options were outstanding:
Options to subscribe for 2,267,855 Ordinary Shares (2006: 18,417,337 a. 
1
), exercisable at various prices 
between £0.05 and £1.055 (2006: £0.505
1
 and £0.70
1
) on or before 16 November 2017 (2006: on or before  
27 November 2016) by management and staff, of which directors held options over 2,042,855 shares  
(2006: 14,533,336
1
), details of which are given in the Directors’ Report on pages 17 and 18. 
Options to subscribe for 1,824,704 Ordinary Shares, exercisable at either £0.25 or £0.50 on or before  b. 
5 October 2008 by former management and staff who joined RAK Petroleum PCL following the  
RAK Petroleum transaction.
Options to subscribe for 28,571 Ordinary Shares (2006: 142,857 c. 
1
) exercisable at £0.50 (2006: £0.70
1
) on or 
before 5 October 2008 (2006: on or before 2 December 2007
1
) by NWCF LLP (Nominated Adviser).
Options to subscribe for a total of 468,997 Ordinary Shares (2006: 2,344,987 d. 
1
) exercisable on or before 
5 October 2008 (2006: on or before 2 December 2007) by Mirabaud Securities Limited (former Broker) subject 
to the quoted Share price attaining the exercise price as follows: 
Options over 181,818 shares (2006: 909,090 •	
1
) can be exercised at £3.85 (2006: £0.77
1
);
Options over 153,846 shares (2006: 769,230 •	
1
) can be exercised at £4.55 (2006: £0.91
1
); and
Options over 133,333 shares (2006: 666,667 •	
1
) can be exercised at £5.25 (2006: £1.05
1
).
1
 before consolidation of share capital on a 1 for 5 basis. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 50 Report and Financial Statements  
for the year ended 31 December 2007
SHARE-BASED PAYMENT (CONTINUED) 26. 
No options had been exercised or expired since the inception of the scheme as at the date of this report. 
The movements in options are as follows:
Held by
As at
 1 January 2007
Added during 
the year
Cancelled during 
the year
As at 
31 December 2007
Directors 1,439,998 602,857 – 2,042,855
Other management and staff 35,000 190,000 – 225,000
Former management and staff 2,239,237 – 414,533 1,824,704
Nominated Adviser and Broker 497,568 – – 497,568
Total 4,211,803 792,857 414,533 4,590,127
The following table illustrates the number and weighted average exercise price (WAEP) of and movements  
in share options during the year: 
Held by
2007
No. of options
2007
WAEP- pence
2006
No. of options
2006
WAEP – pence
Outstanding as at 1 January 4,211,803 90 3,553,936 105
Granted during the year 792,857 39 793,333 16
Cancelled during the year (414,533) 50 (135,466) 50
Outstanding 31 December 4,590,127 84 4,211,803 90
Two members of staff holding options over 72,667 shares left the Group prior to the RAK Petroleum transaction 
and their options lapsed.
Following a) the RAK Petroleum transaction, b) the consolidation of the share capital on a 1 for 5 basis, and  
c) the payment of a special dividend of 60 pence per share on 5 April 2007, the Remuneration Committee of the 
Board approved the following:
All options held by optionholders moving to RAK Petroleum with an exercise price of 70p would be re-priced i. 
at 10p pre-consolidation / 50p post-consolidation
All options held by optionholders moving to RAK Petroleum with an exercise price of 65p would be re-priced ii. 
at 5p pre-consolidation / 25p post-consolidation
All options held by optionholders moving to RAK Petroleum with an exercise price below 61p would be iii. 
re-priced at 1p pre-consolidation / 5p post-consolidation, and the individual compensated for the financial 
shortfall by the granting of options over additional shares.
Furthermore, all options held by optionholders moving to RAK Petroleum would vest on 5 April 2007 and expire 
18 months later, on 5 October 2008. The above does not apply to Peter Sadler and John Hurst.
All options held by directors with an exercise price of 70p would be re-priced at 10p. iv. 
pre-consolidation / 50p post-consolidation.
All options held by directors and senior staff with an exercise price below 61p would be re-priced at 1p  v. 
pre-consolidation / 5p post-consolidation, and the individual compensated for the financial shortfall by 
increasing the number of shares over which their options were originally granted.
All options held by Nabarro Wells (NWCF LLP – Nominated Adviser) would be re-priced at 10p pre- vi. 
consolidation / 50p post-consolidation.
Messrs. Sadler and Hurst gave up options over 1 million shares each as part of their termination settlement when vii. 
they joined RAK Petroleum, and their remaining options will be dealt with as per those of the remaining directors. Indago Petroleum Ltd. 51 Report and Financial Statements  
for the year ended 31 December 2007
The modification of options has resulted in an incremental fair value of $1.8 million which is included in this 
year’s share-based payment charge. The modification has been consistently valued in line with the Group’s 
valuation policy using Monte Carlo simulation. 
The fair values of share options have been derived by independent consultants using a Monte Carlo simulation 
with the inputs as described below to estimate the fair value of the option awards, taking into account the terms 
and conditions upon which the options were granted:
2007 2006
Dividend yield (%) 0 0
Expected share price volatility (%) 45 40
Risk-free interest rate (%) 4.66 – 5.29 4.53 – 4.62
Employee exercise multiple 2 2
Fair value of options granted during the year – US$ 000 310 308
Weighted average option price 66.8 pence 59 pence
The charge to the Group in 2007, included in general and administration costs, amounted to $2,309,813 
(2006: $4,368,948). 
EVENTS SUBSEQUENT TO BALANCE SHEET DATE 27. 
Block 31 Onshore Oman: Al Jariya-1 well on the Jebel Hafit prospect (49.9999% interest)
On 2 February 2008, RAK Petroleum PCL, the operator of Block 31 (“the Operator”), advised that while drilling at 
a depth of 5,131 metres, they had encountered a zone of high pressure and the well took an unexpected influx of 
water and gas. These fluids were flowed to a pit especially created for such an eventuality and after a few hours 
the flow was shut off at surface. The resulting high pressures experienced at surface, and the hole condition at 
the bottom of the well, severely complicated rig operations. Representatives of Boots & Coots, a firm of well 
control specialists, were present on the rig at the time of the well control incident and, with their support, the 
Operator instigated procedures to ascertain the status of the well with a view to isolating the problematic zone. 
Analysis of the available geological and geophysical data led to the following conclusions:
The prospectivity of Jebel Hafit has not been significantly diminished by the incident. Neither of the target •	
Cretaceous carbonate reservoirs is believed to have been penetrated at the time of the incident.
In order to drill deeper than the current level it will, at the least, be necessary to abandon the existing section •	
of open hole below 4,591 metres and sidetrack from inside the existing casing.
Specialist equipment (expandable casing) will be required and that consideration, plus allowing time for over •	
pressure to dissipate, will likely result in moving the rig and drilling the next exploration well (Zad, in Block 47) 
before returning to complete operations at Al Jariya in the 4th quarter of 2008.
The forward plan will be formulated when more information has been obtained about the state of the open hole 
section and the various options discussed between Indago, RAK Petroleum and the Ministry of Oil and Gas for 
the Sultanate of Oman.
The Group’s exploration activities are routinely insured by the Operator for serious operational events, such as an 
uncontrolled surface or sub-surface blowout. As a result, the Company and the Operator are in discussion with 
the insurers, whose loss adjuster has visited the well site and reviewed the incident with the operations team and 
with Boots and Coots. 
ULTIMATE PARENT UNDERTAKING AND CONTROLLING PARTY 28. 
As at 31 December 2007 and at the date of this report, Indago Petroleum Limited does not have a  
majority shareholder. NOTES TO THE FINANCIAL STATEMENTS continued
Indago Petroleum Ltd. 52 Report and Financial Statements  
for the year ended 31 December 2007
FIRST TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS 29. 
Indago has adopted IFRS with effect from 1 January 2007. IFRS is the reporting basis for all companies listed 
on the Alternative Investment Market reporting consolidated results for time periods beginning on or after 
1 January 2007. As part of the IFRS transition, Indago is herewith providing audited year end 31 December 2006 
restated results prepared under IFRS. These restatements have been prepared on the basis of revised 
accounting policies. This restated financial information is presented in this note along with reconciliations from 
UK Generally Accepted Accounting Principles (“UK GAAP”) to IFRS and these revised accounting policies.  
The general principle in adopting IFRS is that all applicable accounting standards should be applied fully 
retrospectively. IFRS 1 “First time adoption of International Financial Reporting Standards” allows certain 
exemptions which companies are allowed to apply.
The exemptions the Group has applied are as follows:
IFRS 2 – Share-Based Payments has not been applied to share based awards granted before 7 November 2002 •	
or vested before 1 January 2006;
IFRS 3 – Business Combinations has not been applied retrospectively to business combinations prior to •	
1 January 2006; and
IAS 21 – The effects of changes in foreign exchange rates has not been applied for cumulative translation •	
differences up to 1 January 2006 which have been set to zero.
The transition from UK GAAP to IFRS has no effect upon the reported cash flows generated by the Group. The 
IFRS cash flow statement is presented in a different format from that required under UK GAAP with cash flows 
split into three categories of activities – operating activities, investing activities and financing activities. The 
reconciling items between the UK GAAP presentation and the IFRS presentation have no net impact on the cash 
flows generated.
In preparing the cash flow statement under IFRS, cash and cash equivalents include cash at bank and in hand, 
highly liquid interest bearing securities with original maturities of three months or less and bank overdrafts. 
Under UK GAAP highly liquid interest bearing securities were not classified as cash equivalents.  Indago Petroleum Ltd. 53 Report and Financial Statements  
for the year ended 31 December 2007
(A). GROUP IFRS INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2006 29. 
UK GAAP
(Audited)
$000
Adjustment
     $000
IFRS
(Audited)
$000
Revenue 14,063 (364)
i
13,699
Cost of sales (3,552) (3,552)
Gross profit 10,511 10,147
Exploration costs written off (8,923) (8,923)
Administrative expenses (8,742) (8,742)
Other income 509 509
Loss before interest and taxation (6,645) (7,009)
Interest income 3,373 3,373
Finance costs (200) (200)
Loss before taxation (3,472) (3,836)
Taxation on loss on ordinary activities (364) 364
i
–
Loss for the year attributable to equity holders (3,836) (3,836)
Loss per share in US cents – basic (7,19)* (7.19)*
Loss per share in US cents – diluted (7.19)* (7.19)*
* restated following 1 for 5 Share Consolidation
i 
Subsidiaries of Indago are registered in countries of low taxation. Bukha is the only producing asset of the Group and 
accordingly the Group suffers Oman tax with respect to the Group’s 40% share of production from Bukha. Under the 
Exploration and Production Sharing Agreement (EPSA) in place with the Government of Oman, which governs the taxation 
of revenues generated by Bukha, tax is only payable on the profit share element of revenues. The profit share element of 
revenues is determined by the net level of revenues after allowable cost-recoveries.
The tax liability will be discharged by the Government of Oman out of the Government’s share of oil profits.
Under UK GAAP , Indago has recorded the tax expense with a corresponding credit to the revenue account.  
This treatment is allowable and consistent with the accounting for oil and gas industry SORP .
However, in accordance with the framework of IFRS, Indago has no present or future obligation in relation to the 
tax arrangements. Accordingly, Indago has adjusted the presentation of the income statement by removing the 
tax expense and the corresponding credit to the revenue account. 
(B). GROUP IFRS BALANCE SHEET AND STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED  29. 
31 DECEMBER 2006
As at 1 January 2006 and 31 December 2006 there are no changes to amounts previously reported under  
UK GAAP in the Group balance sheet and the Group statement of changes in equity.
   Indago Petroleum Ltd. 54 Report and Financial Statements  
for the year ended 31 December 2007
SUPPLEMENTARY INFORMATION
COMMERCIAL RESERVES 
 
Condensate
Millions of barrels
LPG
Millions of barrels
Gas
Millions of cubic
 feet
Proven and Probable Reserves  
As at 1 January 2006 0.90 0.45 20,160
Production (0.17) (0.10) (3,664)
Proven and Probable Reserves  
As at 31 December 2006 0.73 0.35 16,496
Production (0.03) (0.02) (872)
Disposal – RAK Petroleum transaction (0.70) (0.33)   (15,624)
As at 31 December 2007         –         – –
Commercial reserves are proven and probable oil and gas reserves.
Group reserves have been presented on a working interest basis. Working interest basis is the Group’s share  
of production, calculated by reference to its joint venture participating interest.
VOTING RIGHTS
No restrictions.
On a show of hands every member present in person or by proxy will have one vote and upon a poll each share 
shall have one vote.
STOCK EXCHANGE LISTING
Indago Petroleum Limited shares are listed on the AIM market of the London Stock Exchange. The Company’s 
shares were admitted to AIM on 2 December 2005 and following the consolidation of its share capital, the new 
shares were admitted to AIM on 16 April 2007.
WEBSITE
In accordance with AIM Rule 26, the Company has a website www.indagopetroleum.com on which statutory 
information, press releases and background information on the Company and its operations can be found.
SHARE PRICE
The Share Price is quoted on a daily basis in the Financial Times. Shares may be bought or sold through  
a stockbroker who is a member of the London Stock Exchange.
REVIEW BY QUALIFIED PERSON
The technical information and opinions contained in this annual report have been reviewed by Don Scott, a qualified 
Geoscientist (BSc (Hons) Geology – Southampton 1963, MSc Applied Geophysics – Birmingham 1964) and a Fellow 
of the Geological Society of London since 1964. Indago Petroleum Ltd. 55 Report and Financial Statements  
for the year ended 31 December 2007
TOP TWENTY SHAREHOLDERS (AS AT 26 MARCH 2008) 
Shareholder    Shares % Rank
Meridian Oil & Gas (Middle East) Limited 22,999,999 43.13 1
State Street Nominees Limited 3,333,889 6.25 2
Credit Suisse Securities (Europe) Limited 2,107,781 3.95 3
Euroclear Nominees Limited 2,054,130 3.85 4
SBS Nominees Limited 2,022,500 3.79 5
Jim Nominees Limited 1,977,391 3.71 6
HSBC Global Custody Nominee (UK) Limited 1,768,130 3.32 7
Roy Nominees Limited 1,333,555 2.50 8
Bear Stearns Securities Corp 960,000 1.80 9
Pershing Keen Nominees Limited 956,745 1.79 10
HSBC Global Custody Nominee (UK) Limited 950,000 1.78 11
Credit Agricole Cheuvreux International 852,500 1.60 12
Barclayshare Nominees Limited 848,644 1.59 13
Hero Nominees Limited 800,000 1.50 14
Vidacos Nominees Limited 690,108 1.29 15
TD Waterhouse Nominees (Europe) Limited 576,013 1.08 16
L R Nominees Limited 462,407 0.87 17
Forest Nominees Limited 436,394 0.82 18
HSBC Global Custody Nominee (UK) Limited 400,000 0.75 19
James Capel (Nominees) Limited 375,980 0.70 20
Glossary of terms:
Bbl(s)  Barrel(s)
Bbl/d  Barrels per day
Bcf  Billions of cubic feet: measurement of gas volume
Boe  Barrels of oil equivalent: assumes 6,000 scf of gas = the equivalent of 1 bbl oil
Boe/d  Barrels of oil equivalent per day: used when output is a mix of liquids and gas
Bopd  Barrels of oil per day
M  Thousand
MM  Million 
MMscf  Millions of standard cubic feet: used to express the volume of gas at standard  
  temperature and pressure
Tcf  Trillions of cubic feet: measure of gas volume. 1 Tcf = 167 million boe approximately Indago Petroleum Ltd. 56 Report and Financial Statements  
for the year ended 31 December 2007
PARENT COMPANY FINANCIAL STATEMENTS OF INDAGO PETROLEUM LTD
STATEMENT OF DIRECTORS’ RESPONSIBILITIES IN RESPECT OF THE PARENT COMPANY  
FINANCIAL STATEMENTS.
The directors are responsible for preparing the Annual Report and the financial statements in accordance with 
applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that law the 
directors have elected to prepare the parent company financial statements in accordance with United Kingdom 
Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law).
The parent company financial statements are required by law to give a true and fair view of the state of affairs of 
the Company and of the profit or loss of the Company for that period. In preparing those parent company financial 
statements, the directors are required to:
select suitable accounting policies and then apply them consistently; •	
make judgements and estimates that are reasonable and prudent; and •	
state whether applicable UK Accounting Standards have been followed, subject to any material departures •	
disclosed and explained in the financial statements.
The directors are responsible for keeping proper accounting records that disclose with reasonable accuracy at any 
time the financial position of the Company and enable them to ensure that the parent company financial statements 
comply with the Companies (Guernsey) Law 1994. They are also responsible for safeguarding the assets of the 
Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. Indago Petroleum Ltd. 57 Report and Financial Statements  
for the year ended 31 December 2007
We have audited the parent company financial 
statements (the company financial statements) of Indago 
Petroleum Limited (the Company) for the year ended 
31 December 2007 which comprise the company profit 
and loss account, the company balance sheet and notes 
1 to 11. These company financial statements have been 
prepared under the accounting policies set out therein.
We have reported separately on the consolidated 
financial statements of Indago Petroleum Limited for the 
year ended 31 December 2007. 
This report is made solely to the Company’s members, 
as a body, in accordance with Section 64 of the 
Companies (Guernsey) Law 1994. Our audit work 
has been undertaken so that we might state to the 
Company’s members those matters we are required 
to state to them in an auditor’s report and for no other 
purpose. To the fullest extent permitted by law, we do 
not accept or assume responsibility to anyone other 
than the Company and the Company’s members as 
a body, for our audit work, for this report, or for the 
opinions we have formed. 
RESPECTIVE RESPONSIBILITIES OF DIRECTORS  
AND AUDITORS
The directors’ responsibilities for preparing the Annual 
Report and the company financial statements in 
accordance with Guernsey law and for preparing the 
company financial statements in accordance with 
applicable United Kingdom Accounting Standards are 
set out in the Statement of Directors’ Responsibilities.
Our responsibility is to audit the company financial 
statements in accordance with relevant legal and 
regulatory requirements and International Standards  
on Auditing (UK and Ireland).
We report to you our opinion as to whether the company 
financial statements give a true and fair view and 
whether the company financial statements have been 
properly prepared in accordance with the Companies 
(Guernsey) Law 1994. We also report to you whether in 
our opinion the information given in the Directors’ Report 
is consistent with the company financial statements. 
The information given in the Directors’ Report includes 
that specific information presented in the Chairman’s 
Statement, the Chief Executive’s Report and the Review 
of Operations that is cross referred from the Business 
Review section of the Directors’ Report.
In addition we report to you if, in our opinion, the 
Company has not kept proper accounting records, if we 
have not received all the information and explanations 
we require for our audit, or if information specified 
by law regarding directors’ remuneration and other 
transactions is not disclosed. 
We read other information contained in the Annual 
Report and consider whether it is consistent with 
the audited company financial statements. The other 
information comprises only the Directors’ Report, 
the Directors’ Remuneration Report, the Chairman’s 
Statement, the Chief Executive’s Report, the Review 
of Operations, the Corporate Governance Statement 
and the Supplementary Information. We consider the 
implications for our report if we become aware of any 
apparent misstatements or material inconsistencies with 
the company financial statements. Our responsibilities 
do not extend to any other information.
BASIS OF AUDIT OPINION
We conducted our audit in accordance with 
International Standards on Auditing (UK and Ireland) 
issued by the Auditing Practices Board. An audit 
includes examination, on a test basis, of evidence 
relevant to the amounts and disclosures in the 
company financial statements. It also includes an 
assessment of the significant estimates and judgments 
made by the directors in the preparation of the 
company financial statements, and of whether  
the accounting policies are appropriate to the 
Company’s circumstances, consistently applied  
and adequately disclosed.
We planned and performed our audit so as to obtain all 
the information and explanations which we considered 
necessary in order to provide us with sufficient evidence 
to give reasonable assurance that the company financial 
statements are free from material misstatement, whether 
caused by fraud or other irregularity or error. In forming 
our opinion we also evaluated the overall adequacy  
of the presentation of information in the company 
financial statements.
OPINION
In our opinion the company financial statements give a 
true and fair view, in accordance with United Kingdom 
Accounting Standards, of the state of the Company’s 
affairs as at 31 December 2007 and the company 
financial statements have been properly prepared in 
accordance with the Companies (Guernsey) Law 1994. 
Ernst & Young LLP
Registered Auditors
London 
9 April 2008
INDEPENDENT AUDITORS’ REPORT  
TO THE MEMBERS OF INDAGO PETROLEUM LIMITED Indago Petroleum Ltd. 58 Report and Financial Statements  
for the year ended 31 December 2007
COMPANY PROFIT AND LOSS ACCOUNT 
AS AT 31 DECEMBER 2007
Notes
Year ended 
 31 December 2007
$000
Year ended 
31 December 2006
$000
Revenue 806 –
Cost of sales – –
Gross profit 806 –
Administrative expenses (4,826) (7,521)
Other income 246 1,811
Profit on disposal of subsidiaries and other assets 4 275,426 –
Profit / (loss) before interest and taxation 271,652 (5,710)
Interest income 3,087 3,373
Finance costs – (200)
Profit / (loss) before taxation 274,739 (2,537)
Taxation – –
Profit / (loss) for the year attributable to equity holders of the parent 274,739 (2,537)
The accompanying notes 1 to 11 form an integral part of these financial statements. Indago Petroleum Ltd. 59 Report and Financial Statements  
for the year ended 31 December 2007
Notes
At 
31 December 2007
$000
At 
31 December 2006
$000
Fixed assets
Tangible fixed assets 2 – 49
Investments 3 – 23,267
– 23,316
Current assets
Amounts due from related parties 5 28,372 47,641
Sundry debtors 5 249 394
Cash at bank and in hand 38,770 38,395
67,391 86,430
Creditors: amounts falling due within one year 6 (182) (741)
Net current assets 67,209 85,689
Net assets 67,209 109,005
Capital and reserves
Called up share capital 7 27 27
Share premium 8 – 112,170
Profit and loss account 8 67,182 (3,192)
Total shareholders funds 9 67,209 109,005
The company financial statements were approved by the Board of Directors on 9 April 2008.
Martin Groak
Director
The accompanying notes 1 to 11 form an integral part of these financial statements.
COMPANY BALANCE SHEET
AS AT 31 DECEMBER 2007 Indago Petroleum Ltd. 60 Report and Financial Statements  
for the year ended 31 December 2007
NOTES TO THE COMPANY FINANCIAL STATEMENTS
ACCOUNTING POLICIES 1. 
The Company financial statements have been 
prepared under the historical cost convention and 
in accordance with Guernsey law and applicable 
United Kingdom accounting standards. 
The Company has taken the exemption under FRS 1 
not to present a cash flow statement.
Reporting Currency
The financial information is presented in US Dollars. 
The Company’s operations and the majority of all 
costs associated with foreign operations are paid in 
US Dollars and not the local currency of operations; 
therefore the reporting and functional currency is the 
US Dollar. Gains and losses through foreign currency 
transactions are recognised in the current profit or 
loss for the period.
Tangible Fixed Assets
Tangible fixed assets are stated at cost, net of 
depreciation and any provision for impairment.
Depreciation
Depreciation is provided on plant and equipment 
at rates calculated to write off the cost, less any 
estimated residual value, based on prices prevailing 
at the date of acquisition of each asset evenly over 
its expected useful life, as follows:
Plant and equipment – 2.5 to 4 years
Impairment
The Company undertakes a review of impairment of 
a fixed asset or intangible asset if events or changes 
in circumstance indicate that the carrying amount 
of the fixed asset or intangible asset may not be 
recoverable. To the extent that the carrying amount 
exceeds the recoverable amount (being the higher 
of the net realisable value and the value in use) the 
fixed asset or intangible asset is written down to its 
recoverable amount.
Foreign Currencies
Transactions in foreign currencies are recorded 
at the rate ruling at the date of the transaction. 
Monetary assets and liabilities denominated in 
foreign currencies are retranslated at the rate of 
exchange ruling at the balance sheet date. Exchange 
differences are included in profit for the year.
Investments
Investments are measured at cost less provisions  
for impairment.
Share-Based Payment
The Group issues equity-settled share-based 
payment to certain employees and third parties  
in the form of options to acquire ordinary shares  
in the Company.
During the previous year the Company has 
adopted FRS 20: Share Based Payments. Under 
the transitional requirements of the standard, the 
Company has applied FRS 20 to equity settled 
awards granted after 7 November 2002 that were 
unvested at 1 January 2006.
The cost of equity-settled transactions with 
employees is measured by reference to the fair 
value at the date at which they are granted and is 
recognised as an expense over the vesting period, 
which ends on the date on which the relevant 
employees become fully entitled to the award. Fair 
value is determined by an external valuer using an 
appropriate pricing model. In valuing equity-settled 
transactions, no account is taken of any vesting 
conditions, other than conditions linked to the price 
of the shares of the company (market conditions).
 TANGIBLE FIXED ASSETS 2. 
Plant and 
equipment 
$000
Cost:
At 1 January 2007 49
Disposals (49)
At 31 December 2007 –
Depreciation:
At 1 January 2007  
and 31 December 2007 –
Net book value at 31 December 2007 –
Net book value at 31 December 2006 49
Plant and equipment of the Company relate to 
improvements to the Dubai corporate office that 
were still in progress at 31 December 2006 and 
hence not depreciated. These assets were disposed 
of as part of the RAK Petroleum transaction. Indago Petroleum Ltd. 61 Report and Financial Statements  
for the year ended 31 December 2007
 INVESTMENTS 3. 
Investment in subsidiary undertakings
$000
Cost:
At 1 January 2007 23,267
Disposals in year (23,267)
At 31 December 2007 –
Details of the investments in which the Company held 90% or more of the nominal value of any class of share 
capital during the period are as follows:
Name
Voting Rights and 
Shares Held
Country of 
Incorporation
Country of 
Operation Activity
Indago (UK) Services Limited 100% England UK Services
Indago Ventures 31 Limited 100% Guernsey Oman Exploration
Indago Ventures 43 Limited 100% Guernsey Oman Exploration
Indago Ventures 47 Limited 100% Guernsey Oman Exploration
Indago Oman Limited 
(*1)
100% Bermuda Oman
Exploration &
 Production
Indago Al Khaleej Limited 
(*1)
100% Guernsey
United Arab
 Emirates (UAE) Exploration 
Indago Technical Services Ltd 
(*1)
100% Guernsey Oman and UAE Services
Indago Oman Block 30 Ltd
(*1)
100% Bermuda Oman Exploration 
Indago Oman Block 30 Ltd
(*1)
100% Guernsey Oman Exploration 
(*1)
 represents subsidiary undertakings disposed of as part of the RAK Petroleum transaction.
DISPOSAL OF SUBSIDIARIES 4. 
On 5 April 2007, the Company completed the disposal of the subsidiaries marked (*1) in the table in Note 3 above:
Indago Oman Ltd •	
Indago Al Khaleej Ltd •	
Indago Technical Services Ltd •	
Indago Oman Block 30 Ltd (Bermuda registered) •	
Indago Oman Block 30 Ltd (Guernsey registered) •	
Prior to that, on 13th March 2007, 49.9999% of the Group’s interests in Blocks 31, 43A and 47 Oman were 
assigned respectively to 
Indago Ventures 31 Ltd •	
Indago Ventures 43 Ltd •	
Indago Ventures 47 Ltd •	
The transaction generated a profit on disposal of approximately $275 million at Company level. The Board then 
resolved to return to shareholders 60 pence per share via an interim, special dividend. As distributable profits 
of the Company were just above 50 pence per share, it was necessary to cancel the Company’s share premium 
account, which stood at approximately $112 million, to release the additional funds into distributable reserves in 
order to achieve a 60 pence per share dividend.
An Extraordinary General Meeting (EGM) was held on 3 April 2007 to approve the transaction, to approve the 
cancellation of the share premium account and to approve the consolidation of the Company’s share capital  
on a 1 for 5 ratio. All the resolutions were passed. Indago Petroleum Ltd. 62 Report and Financial Statements  
for the year ended 31 December 2007
NOTES TO THE COMPANY FINANCIAL STATEMENTS continued
DISPOSAL OF SUBSIDIARIES (CONTINUED) 4. 
A court hearing was held in Guernsey to receive approval for the cancellation of the share premium account and 
the special dividend of £160.0 million ($317.7 million) was paid on 18 April 2007.
The profit on disposal has been calculated as follows:
$000 $000
Consideration 382,779
Working capital adjustment (2,575)
Net consideration 380,204
Net assets disposed of:
Investment in subsidiaries 23,267
Fixed assets 50
Current assets 77,787
Less: current liabilities (517)
(100,587)
Less: professional fees (4,193)
Profit on disposal 275,426
DEBTORS 5. 
31 December 2007
$000
31 December 2006
$000
Amounts owed by subsidiaries 28,372 47,641
Other debtors 186 –
Prepayments 63 394
28,621 48,035
The amounts owed by subsidiaries to the Company were disposed of as part of the RAK Petroleum transaction.
CREDITORS  6. 
31 December 2007
$000
31 December 2006
$000
Amounts falling due within one year:
Trade creditors and other payables – 231
Amounts owed to subsidiaries – 251
Accruals 182 259
182 741
The amounts owed to subsidiaries by the Company were disposed of as part of the RAK Petroleum transaction.
SHARE CAPITAL  7. 
Authorised Number $000
Allotted, called 
up and fully paid 
Number $000
Ordinary shares of US$0.0005 each 
At 31 December 2007 80,000,000 40 53,333,311 27
Ordinary shares of US$0.0001 each 
At 31 December 2006 400,000,000 40 266,666,667 27
At an Extraordinary General Meeting held on 3 April 2007, shareholders approved the consolidation of the 
Company’s share capital on a 1 for 5 basis. Indago Petroleum Ltd. 63 Report and Financial Statements  
for the year ended 31 December 2007
SHARE CAPITAL (CONTINUED) 7. 
The impact of the 1 for 5 share consolidation on the Company’s share capital described in note 12 to the 
consolidated financial statements was the following:
Before Consolidation After Consolidation
Authorised number of shares 400,000,000 80,000,000
Par value per share $0.0001 $0.0005
Number of shares in issue 266,666,667 53,333,311
Nominal share capital in issue $26,667 $26,667
RESERVES 8. 
Company
Share capital
$000
Share premium
$000
Profit and loss
account
$000
Total
$000
At 1 January 2007 27 112,170 (3,192) 109,005
Retained profit for the year – – 274,739 274,739
Cancellation of share premium account – (112,170) 112,170 –
Share-based payment (Options) – – 1,178 1,178
Dividends paid – – (317,713) (317,713)
At 31 December 2007 27 – 67,182 67,209
MOVEMENT IN SHAREHOLDERS’ FUNDS 9. 
Year ended
31 December 2007
$000
Year ended
31 December 2006
$000
Profit / (loss) for the financial period 274,739 (2,537)
Share-based payment 1,178 3,736
Dividends paid (317,713) – 
Net increase in shareholders’ funds (41,796) 1,199
Shareholders’ funds at 1 January 2007 109,005 107,806
Shareholders’ funds at 31 December 2007 67,209 109,005
SHARE-BASED PAYMENT 10. 
The Company issued options over ordinary shares in the Company to its directors, its nominated adviser  
and its former broker. 
Options granted to directors prior to the flotation of the Company were issued on 25 November 2005 and 
vested in three approximately equal tranches on the first, second and third anniversaries of the date of grant 
and priced at the flotation price of 70 pence. The options expire after ten years. Directors joining thereafter were 
granted options as close as possible to their date of joining and priced at the lower of the price ruling at close 
of business on the day before grant, or the average of the five days before grant. Vesting and expiration criteria 
were analogous to the original options granted to directors.
Following a) the RAK Petroleum transaction, b) the consolidation of the share capital on a 1 for 5 basis, and c) the 
payment of a special dividend of 60 pence per share on 5 April 2007, the Remuneration Committee of the Board 
approved the following as part of the Employee Option Reorganisation (as defined in the Directors’ Report above):
All options held by directors with exercise price of 70p would be re-priced at 10p pre-consolidation/50p  a. 
post-consolidation.
All options held by directors with an exercise price below 61p would be re-priced at 1p pre-consolidation/5p b. 
post-consolidation, and the individual compensated for the financial shortfall by increasing the number of 
shares over which their options were originally granted. Indago Petroleum Ltd. 64 Report and Financial Statements  
for the year ended 31 December 2007
NOTES TO THE COMPANY FINANCIAL STATEMENTS continued
SHARE-BASED PAYMENT (CONTINUED) 10. 
All options held by Nabarro Wells (NWCF LLP – Nominated Adviser) would be re-priced at 10p  c. 
pre-consolidation / 50p post-consolidation and the expiry date extended to 5 October 2008.
Following the RAK Petroleum transaction, two directors, Peter Sadler and John Hurst, left the Group to join d. 
RAK Petroleum. They each gave up options over one million ordinary shares (pre the Consolidation, equal 
to two hundred thousand ordinary share post the Consolidation). The terms and conditions governing their 
remaining options were otherwise unchanged.
Options held by Mirabaud, the Company’s former broker, were not re-priced, but the expiry date was e. 
extended to 5 October 2008. They can be exercised in 3 tranches when the share price reaches £3.85,  
£4.55 and £5.25*
The following table shows the movement in options over the year. The opening position is shown as if the 1 for 5 
share consolidation had occurred on 1 January 2007.
Held by
As at 
1 January 2007
Added during 
the year
Cancelled 
during the year
As at 
31 December 2007
Directors 1,439,998 602,857 – 2,042,855
Former Directors 1,466,666 – 400,000 1,066,666
Nominated Adviser and Broker 497,568 – – 497,568
Total 3,404,232 602,857 400,000 3,607,089
At the balance sheet date, the following options were outstanding and none had been exercised:
Held by
Number of
Options Price Date of grant
Of which
Vested Expiry
Directors 1,066,665 50p 25/11/05 711,106 25/11/15
342,857 5p 01/05/06 114,285 01/05/16
233,333 5p 01/08/06 77,777 01/08/16
400,000 57.5p 16/11/07 – 16/11/17
Former Directors 1,066,666 50p 25/11/05 777,777 25/11/15
Nominated Adviser 28,571 50p 02/12/05 28,571 05/10/08
Former Broker 468,997 Various* 02/12/05 468,997 05/10/08
Total 3,607,089 2,178,513
The bases of the calculation of the share-based payment, which relate to share options issued, are given in 
the Group financial statements in note 26, as well as information on the modification of options. The part of the 
charge attributable to the Company in 2007 was $1,178,076 (2006: $3,735,732).
RELATED PARTY TRANSACTION NOTE 11. 
Under FRS 8 no disclosure is required in the company financial statements of transactions between the parent 
company and subsidiaries greater than 90% owned. All transactions with directors have been disclosed in these 
company financial statements, in the Directors’ Report on pages 17 and 18, or in the Directors’ Remuneration 
Report on pages 21 and 22. 
In the ordinary course of business, the Company received services amounting to $807,000 (2006: $203,000) from 
its subsidiary Indago (UK) Services Limited. 
The Company entered into a $20,000,000 two year 10% fixed interest loan facility with Meridian Capital CIS Fund, 
a subsidiary of the largest shareholder, (the “Facility”) on 8 November 2005 for the purpose of funding working 
capital. During the 2006 financial year $200,000 of commitment fees were paid to Meridian Capital CIS Fund. 
At 31 December 2006 there were no balances due to or from Meridian Capital CIS fund or Meridian Oil and Gas 
(Middle East) Limited. Furthermore, no balances between the related parties were written off during the year.
As a result of the RAK Petroleum transaction, the Facility was cancelled on 5 April 2007. DIRECTORS
Tim Eggar (non-executive chairman)
Dr David Bremner (chief executive officer)
Martin Groak  (chief financial officer)
Barry Goldberg (non-executive director)
Paul Marchand (non-executive director)
Roderick Perry (non-executive director)
Erdinc Nick Zana (non-executive director)
All c/o Equity Trust (Guernsey) Limited
Mignot Plateau
St. Peter Port
Guernsey, C.I.
REGISTERED OFFICE
P .O.Box 124
Mignot Plateau
St. Peter Port
Guernsey, GU1 4EG
C.I.
COMPANY SECRETARY
Ms. Jan Davies
NOMINATED ADVISER
Nabarro Wells & Co. Limited
Old Change House 
128 Queen Victoria Street
London
EC4V 4BJ
BROKER
JPMorgan Cazenove
20 Moorgate
London
EC2R 6DA 
WEBSITE
www.indagopetroleum.com
SOLICITORS
White & Case
5 Old Broad Street
London
EC2N 1DW
AUDITORS
Ernst & Young LLP
1 More London Place
London
SE1 2AF
FINANCIAL PUBLIC RELATIONS
College Hill
The Registry 
Royal Mint Court
London
EC3N 4QN
REGISTRARS
Computershare Investor Services
(Channel Islands) Limited
Ordnance House
31 Pier Road
St Helier
Jersey, C.I.
REGIONAL OFFICE UK
Indago (UK) Services Limited
Universty House 3rd Floor 
11-13 Lower Grosvenor Place 
London
SW1W 0EX
Tel. +44 (0)20 7096 3460
CORPORATE DIRECTORY Report and Financial Statements  
for the year ended 31 December 2007
Website: www.indagopetroleum.com
Contact: info@indagopetroleum.com
INDAGO PETROLEUM LTD       Report and Financial Statements      2007