TIDMOEX
RNS Number : 0819A
Oilex Ltd
24 September 2015
OILEX LTD
Foundations for value and growth
Oilex has a diversified oil and gas portfolio, focused on Indian
Ocean rim countries with proven onshore hydrocarbon provinces.
Strategic Focus
-- Assets with deep markets, existing infrastructure & good geology
-- Production, cash flow and reserves
-- Targeting cash positive operations in India(1)
Portfolio
-- India - Cambay asset in Gujarat State, a leading industrialised
state in India
-- Partnered with Gujarat State Petroleum Corporation
-- Australia - low cost entry into 3 million acres in Canning Basin
Value Catalysts
-- Assets in a premium market, with a low cost structure
-- Experienced executive team focused on delivery
-- Building a sustainable business
2P 20MMBoe
3P 37MMBoe
2C 80MMBoe
(1) Excluding Cambay Field capex
Contents
Chairman's Review
Business Review
Permit Schedule
Directors' Report
Remuneration Report - Audited
Lead Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Audit Report
Shareholder Information
Definitions
Business Directory
Corporate Information
CHAirman's review
Dear Shareholder,
The 2014/15 Financial Year was a landmark year for Oilex, with
significant progress achieved at our Cambay Field Project,
successfully delivering the proof-of-concept well Cambay-77H. Oilex
is the first company to successfully apply proven North American
drilling and completion technology to develop and produce oil and
gas within the Cambay Basin, by completing a long term production
test of a multi stage fracture stimulated horizontal tight oil/gas
well in India. Following this success, Oilex obtained Joint Venture
and Government of India approval for a comprehensive 2015/16 work
programme and delivered a significant upgrade to Reserves and
Contingent Resources.
Subsequent to the upgrade of Reserves and Contingent Resources,
Oilex has successfully raised, after the end of the year, $30
million (before expenses) from new institutional, sophisticated,
strategic and existing shareholders. Oilex is pleased to welcome a
new strategic investor Zeta Resources Limited following completion
of this capital raising.
Oilex is focused on executing the 2015/16 work programme to
deliver production growth and cash flow, underpinned by gross 2P
Reserves of 206 Bcf plus 8 MMbbl of liquids independently assessed
by RISC Operations Pty Ltd (RISC).
Your board believes that India offers a compelling investment
proposition as the world's fourth largest energy consumer with a
large unsatisfied gas demand. India is forecast to be the world's
fastest growing large economy over the next two years. Strong
growth, combined with a growing middle class forecast to be 475
million people by 2030 results in significant growth in energy and
natural gas consumption.
The Cambay Field is located at the hub of India's large gas
distribution network close to the existing gas pipeline grid in the
State of Gujarat. This position adjacent to an existing gas
pipeline grid with spare capacity should facilitate the rapid
commercialisation of Cambay Field gas on a cost-effective basis to
bring Reserves into production and unlock value for all
stakeholders.
It is anticipated that while the global energy markets are
experiencing significant price constraints, with our unique
position to supply onshore gas close to infrastructure in Gujarat
state, the growing demand for energy should ensure that domestic
prices will be insulated from external price pressures.
On behalf of the Board I wish to record our appreciation for the
support and dedication of our Executive Management, staff, Joint
Venture partners, contractors, local communities, shareholders and
stakeholders during the year and look forward to the successful
commercialisation of the Cambay Field and moving into production in
2016 and beyond.
Mr MDJ Cozijn
Chairman
24 September 2015
BUSINESS REVIEW
Strategy
Oilex's strategy is to become a leading "tight" oil and gas
producer in India by utilising North American drilling and
completion technology to develop and produce tight resources in the
Cambay Basin. Significant advancements in drilling and stimulation
techniques have been extensively proven in North America in recent
years, yet they have not been applied widely in India.
The Oilex strategy is focused on proven onshore hydrocarbon
provinces demonstrating three key qualities essential to deliver
sustainable value for Shareholders:
-- Markets
-- Infrastructure
-- Geology
India
During the year Oilex remained firmly focused on developing the
major tight hydrocarbon potential at the Company's Cambay Project,
onshore Gujarat, India. This focus is driven by the large
independently assessed Reserves and Contingent Resource within the
Cambay PSC located within a fast growing energy market. India is
the world's fourth largest energy consumer with a significant
unsatisfied gas demand and relatively high sustainable gas prices.
The International Energy Agency forecasts India's gas demand to
increase by over 5% per annum over the next 15 years and to
continue to outpace domestic gas supplies.
India's global middle class is small, at around 50 million
people, or 5% of its population. India's middle class is projected
to grow steadily over the next decade, reaching 200 million by
2020(1) after which, India's middle-class growth is expected to
accelerate, reaching 475 million people by 2030(1) and adding more
people than the Chinese to the global middle class worldwide after
2027. As the middle class expands, the energy consumption per
capita represents significant growth potential for consumption of
hydrocarbon energy.
Importantly, the Cambay Project is ideally located at a hub of
India's large gas distribution network and approximately 10 km from
the existing gas pipeline grid and well-positioned to rapidly
commercialise production in the fast-growing, demand-driven
domestic energy market.
Cambay Field, Onshore Gujarat, India
(Oilex - 45%, Operator)
Background
Oilex operates the Cambay Field Production Sharing Contract
(PSC) in the Cambay Basin onshore Gujarat, India on behalf of its
Joint Venture with Gujarat State Petroleum Corporation Limited.
The Cambay Basin lies in the heart of Gujarat's industrial
corridor which is India's largest centre of heavy industry. There
is extensive existing infrastructure of oil and gas pipelines
connecting the Cambay Basin fields to local industries and other
major centres as far north as Delhi.
The 161 km(2) Cambay Contract Area contains thick, low
permeability Eocene reservoirs. The Contract Area was previously
explored and developed by Oil and Natural Gas Corporation (ONGC),
India's largest state-owned oil and gas company in the period from
1957 through to the 1980's. However it was developed as a gas field
mainly from the shallower Oligocene (OSII) reservoirs in the
southern part of the Contract Area. Since its inception, the Cambay
Field has produced about 52 billion cubic feet of gas until it was
shut-in in the early 1990's due to water and sand production issues
in the OSII.
ONGC drilled over 30 wells to variable total depths through the
Eocene "tight" siltstone reservoirs, using conventional drilling
and completion technology. The deepest well, Cambay-40 was drilled
in 1963 to a depth of more than 3,200 metres with gas shows at the
total depth of the well. The flow rates from conventional tests in
the Eocene section of the various historical, conventional wells
were in the range of 0.3 - 4.2 MMscfd.
In 2009 the sophisticated "tight" reservoir drilling and
production technology which has driven the North American "shale"
revolution became more widely accessible and Oilex sought to
acquire access to those technologies to facilitate the evaluation
and commercialisation of the Eocene reservoirs. Oilex was well
placed to exploit these technologies on behalf of the Cambay Joint
Venture given the existing comprehensive technical data base, its
international industry contacts and operating experience in
India.
In 2014 significant progress was achieved on the Cambay Field
development. The Company successfully completed the Cambay-77H
production test. The test objective was acquiring long term
performance data from the Eocene Y zone, which is essential for the
assessment of reservoir properties.
Delivering the Proof of Concept
Proof of Concept objectives are critical to demonstrating that
the Cambay Field can be commercially developed using multi-stage
fracture treatments (fracs) in horizontal wells. Key objectives
achieved include:
-- Efficient horizontal drilling operations demonstrating the
repeatability of targeting the Y zone
-- Y zone reservoir properties are laterally consistent, having
variability within expectations
-- Successful completion of 24 fracture treatments in 2 wells
-- Successful acquisition and deployment of fracture data using micro-seismic
-- Successfully demonstrated "Plug and Perf" completion technique in India
-- First horizontal well in the Cambay Basin with multiple
fracture treatments to achieve flowback
-- Flowback data used to calibrate horizontal well model for the first time
-- Future well designs may have wider frac spacing, leading to significant cost savings
Figure 1 : Cambay Field - recorded hydrocarbon flowrates from Y
zone reservoir
Work Programme and Budget 2015/16
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
The work programme and budget for the 2015/16 year has been
approved by both the Joint Venture and the Government of India.
Oilex has commenced work on schedule critical, tendering activities
and expects to take advantage of the recent decrease in global oil
& gas activity to achieve a reduction in drilling and other
costs.
The work programme consists of a firm 2 well drilling campaign
and 2 contingent wells. Tenders are currently being evaluated and
it is anticipated that spudding of the first well will commence
late in H2 2015. Full diameter core across the Y zone will be
collected in each firm well. Special analysis will be conducted on
each core and the data obtained from the analysis will be used to
finalise the frac design for each well. Core analysis is widely
undertaken in North America and it is anticipated that core data
will enable a better frac efficiency to be achieved compared to
Cambay-77H.
Also forming part of the approved work programme are 5 well
work-overs to boost oil and possibly gas production from existing
wells. This work-over campaign is integral to achieving the
Company's target of cash flow positive operations (excluding
exploration and field development costs) in India during 2015. A
number of existing wells are able to deliver gas for the local low
pressure market that exists within the immediate vicinity of the
field and serviced by a low pressure gas reticulation network.
Engineering studies for permanent production and gas treatment
facilities have commenced. These studies will examine the cost and
schedule parameters of a range of throughput sizes as part of the
development planning for the field. The work includes conceptual
design of a small throughput plant that would enable pipeline
quality gas to be sold into the gas grid relatively quickly and
thus tapping into a larger market.
Oilex has concluded two gas sale agreements (GSAs) to date. GSAs
are conducted via a bid system, with buyers submitting offers to
purchase via a tender process. Given the demand for gas by nearby
industrial users, strong pricing has been secured.
Existing industry located within 15km of the Cambay Field also
means very low capital cost is associated with sales of gas to the
local market and the tie-in to the existing gas transmission
pipeline network. The network has excess capacity for additional
gas that can be used for gas from the Cambay Field.
Oilex is working towards putting three wells in two separate
fields into production in the 2015/16 year:
-- Cambay-73 (production commenced in June 2015)
-- Cambay-77H
-- Bhandut-3
Oilex recommenced gas production in the Cambay Field in June
2015 for the first time since the early 1990's. Production from the
three historical wells will be a substantial step towards cash
positive operations in India for the Company as a result of the
strong gas demand and associated robust gas price structure in
Gujarat State.
Cambay-77H Well
During the financial year Oilex successfully completed the
fracture stimulation of four stages (8 fractures) in the 350 metre
lateral section. Milling operations were successfully completed
with the commencement of a controlled flow-back of fluids with
light oil/condensate being recovered to surface and separated for
sale along with associated reservoir gas.
Cambay-73 Well
Cambay-73 is located about 1 km to the south of Cambay-77H.
Cambay-73 and Cambay-77H have intersected the same Y zone reservoir
and both have produced gas and light oil/condensate. Gas
composition analyses conclude that gas from Cambay-77H and
Cambay-73 is almost identical with minimal processing required to
reach pipeline specification.
In April 2013 Oilex announced a GSA was signed for "offspec" gas
from Cambay-73 and was submitted to the Government for endorsement.
The initial term was for two years and additional wells can be
added to the contract if potential production exists. In July 2014,
the relevant authorities within the Government endorsed the GSA.
This was a critical milestone for increasing production from the
field and supplying gas to the local market.
Construction of production facilities at Cambay-73 was completed
during May 2015, with tie-in of the low pressure pipeline
subsequently completed in June 2015. Cambay-73 will supply gas to a
low pressure gas market in the vicinity of the Cambay Field and
commenced production at 50 boepd of gas and condensate. The
condensate will be separated at the field and trucked to a nearby
refinery together with other Cambay crude oil.
Figure 2: Cambay 73 production facility
Reserves and Contingent Resources
In April 2015 RISC, an Australian based, internationally
recognised independent petroleum advisory group, completed an
independent Resource Report of the Eocene Formation of the Cambay
Field. This work follows on from its evaluation of Cambay-77H
flowback and test data in December 2014. RISC has evaluated 2 of 6
potential Eocene reservoirs, the X and Y zones, and the results for
Reserves and Contingent Resources are summarised below.
Table 1: Reserves
Estimated Cambay Field Reserves
------------------- ---------------------------------------------------
1P* 2P 3P
----------------- --------------- ---------------
Gas C5(+) Gas C5(+) Gas C5(+)
Y Zone Bcf MMbbls Bcf MMbbls Bcf MMbbls
------------------- ------ --------- ----- -------- ----- --------
Total - Gross Nil Nil 206 8.0 377 17.3
------------------- ------ --------- ----- -------- ----- --------
Oilex net working
interest Nil Nil 93 3.6 170 7.8
------------------- ------ --------- ----- -------- ----- --------
*Gross 90 Bcf of gas and 2.9 MMbbls of C5(+) (Oilex net working
interest of 40.5 Bcf of gas and 1.3 MMbbls of C5(+) ) would be
categorised as 1P subject to securing finance for the development,
according to the PRMS guidelines. These quantities are included in
the 1C Contingent Resources in Table 2.
Table 2: Contingent Resources
Unrisked Cambay Field Contingent Resource Estimates
------------------- --------------------------------------------------------------
1C 2C 3C
------------------- --------------------- ------------------ -------------------
X and Y Zones Gas C5(+) Gas C5(+) Gas C5(+)
Bcf MMbbls Bcf MMbbls Bcf MMbbls
------------------- -------- ----------- ------ ---------- ------- ----------
Total - Gross 388 23.7 720 52.8 1239 104
------------------- -------- ----------- ------ ---------- ------- ----------
Oilex net working
interest 215** 12** 324 23.8 557.6 46.8
------------------- -------- ----------- ------ ---------- ------- ----------
**Includes Oilex net working interest of 40.5 Bcf of gas and 1.3
MMbbls of C5(+) that would be categorised as 1P subject to securing
finance for the development.
Notes to Tables
(1) The Reserves and Contingent Resources estimates prepared by
RISC as of 1 April 2015, and stated in the tables above, have been
prepared in accordance with the definitions and guidelines set
forth in Petroleum Resources Management System, 2007 (PRMS)
approved by the Society of Petroleum Engineers (SPE).
(2) The Reserves and Contingent Resources shown in the above
tables have been estimated using probabilistic methods. The total
in Table 2 is the statistical aggregate of the relevant
volumes.
(3) The estimates included in Table 2 Contingent Resources have
not been adjusted for the chance of development due to one or more
contingencies.
(4) These estimates have not been endorsed by the Government of
India or the Directorate General of Hydrocarbons, India.
(5) Oilex is operator of, and has a 45% net working interest in,
the Cambay Field Production Sharing Contract (PSC). Net working
interest is not the same as the net economic entitlement under the
Cambay PSC and the net economic entitlement varies with development
strategy and size. For reference, Oilex's net economic entitlement
for the 2P volumes is estimated to be 94.4% of its net working
interest.
(6) Cambay Field covers 161 km(2) and environmental approvals
have been granted for 60 wells and modernisation and expansion of
the Gas Gathering Station (GGS). 34 new wells are estimated to be
required for recovery of the Reserves. The actual well count may
vary.
(7) Contingent Resources were previously announced on 11 October
2011 and there has been no revision until this announcement.
Reserves and Contingent Resources Reconciliation by Period
Table 3: Reserves
Estimated Cambay Field Reserves
------------------------------------------------------------------------------
Cambay India 1P* Undeveloped 2P Undeveloped 3P
--------------------- -------------------- ----------------- ---------------
Y Zone Gas C5(+) Gas C5(+) Gas C5(+)
Bcf MMbbls Bcf MMbbls Bcf MMbbls
--------------------- -------- ---------- ------ --------- ----- --------
Total - Gross Nil Nil Nil Nil Nil Nil
30/06/2014
--------------------- -------- ---------- ------ --------- ----- --------
Recognition of
new reserves April
2015 Nil* Nil* 206 8.0 377 17.3
--------------------- -------- ---------- ------ --------- ----- --------
Revision, extension - - - - - -
and discoveries
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
--------------------- -------- ---------- ------ --------- ----- --------
Acquisitions and - - - - - -
divestments
--------------------- -------- ---------- ------ --------- ----- --------
Production -** -** -** -** -** -**
--------------------- -------- ---------- ------ --------- ----- --------
Total - Gross
30/06/2015 Nil Nil 206 8.0 377 17.3
--------------------- -------- ---------- ------ --------- ----- --------
Oilex net working
interest Nil Nil 93 3.6 170 7.8
--------------------- -------- ---------- ------ --------- ----- --------
*Gross 90 Bcf of gas and 2.9 MMbbls of C5(+) (Oilex net working
interest of 40.5 Bcf of gas and 1.3 MMbbls of C5(+) ) would be
categorised as 1P subject to securing finance for the development,
according to the PRMS guidelines. These quantities are included in
the 1C Contingent Resources in Table 4.
**Actual Cambay Field production in the quarter ended 30 June
2015 was 669 Bbls and 1082 Mscf (gross), net to Oilex 301 Bbls and
487 Mscf. Production for the period 1 April to 30 June 2015 has
been excluded from the table above as these amounts are immaterial
relative to total Reserves and Oilex net working interest.
Table 4: Contingent Resources
Unrisked Cambay Field Contingent Resource Estimates
----------------------- --------------------------------------------------------------
Cambay India 1C 2C 3C
----------------------- --------------------- ------------------ -------------------
X and Y Zones Gas C5(+) Gas C5(+) Gas C5(+)
Bcf MMbbls Bcf MMbbls Bcf MMbbls
----------------------- -------- ----------- ------ ---------- ------- ----------
Total - Gross Nil Nil Nil Nil Nil Nil
30/06/2014
----------------------- -------- ----------- ------ ---------- ------- ----------
Recognition of
contingent resources
April 2015 388 23.7 720 52.8 1239 104.0
----------------------- -------- ----------- ------ ---------- ------- ----------
Total - X and
Y Zones
Gross 30/6/2015 388 23.7 720 52.8 1239 104
----------------------- -------- ----------- ------ ---------- ------- ----------
Oilex net working
interest 215** 12** 324 23.8 557.6 46.8
----------------------- -------- ----------- ------ ---------- ------- ----------
**Includes Oilex net working interest of 40.5 Bcf of gas and 1.3
MMbbls of C5(+) that would be categorised as 1P subject to securing
finance for the development.
Infrastructure
The Cambay Field is located approximately 10km from the gas
pipeline network with spare capacity. The pipeline connection to
the high pressure grid will be constructed and owned by a third
party, which is likely to be an affiliate of Oilex's Joint Venture
partner, Gujarat State Petroleum Corporation (GSPC). Timing of
construction has yet to be determined.
The 2P Reserves are anticipated to support a plateau gas
production rate of 50MMscfd, whilst the 2P + 2C combined volumes
may support a plateau gas production rate of 125 - 250MMscfd.
Studies, yet to be completed, will determine an optimum field gas
production profile and incorporate data from wells drilled as part
of the 2015/16 budget.
The establishment of reserves provides a strong foundation for
the expedited development of the Cambay Field and achievement of
our key corporate goals of increasing production, cash flow and
reserves. Oilex's first-mover advantage in opening the Cambay Basin
(and India) to development of its significant tight oil and gas
resources, places the Company on a strong growth trajectory in a
robust energy market.
Figure 3: Gujarat: Gas Pipeline Network to the Nation
Bhandut Field, Onshore Gujarat, India
(Oilex - 40%, Operator)
The field was discovered and developed initially by ONGC. The
field has produced 17,572 bbls of oil since acquisition.
Bhandut-3 has previously flowed at a maximum rate of 6.5MMscfd
through a 10mm choke with a flowing tubing head pressure of 1,190
psia during an isochronal test. The test confirmed the reservoir
sand has a permeability of 124mD, making it a conventional
reservoir. It is planned to deliver approximately 0.5-1MMscfd from
the Bhandut-3 well. The Company anticipates the cost of the
production facilities payback in seven months from commencement of
production based upon the contracted gas price.
Bhandut-3 is a lean gas composition with 98.9% hydrocarbons, of
which 94% is methane, and 1.1% is inert gases (Nitrogen and Carbon
Dioxide). As such minimal treatment is required.
Having received endorsement of the gas sales agreement, the
Bhandut Joint Venture has commenced the process to establish the
appropriate production facilities for Bhandut-3. This will include
a compressed natural gas (CNG) loading facility that will enable
CNG "bullet" trucks to be loaded at site for transportation of the
gas to end users. Bhandut-3 gas is "lean" and therefore no material
condensate production is expected.
Design engineering work for the gas production facilities
required for Bhandut-3 has been completed. Scope of work and
materials requirements have been completed. The production facility
is expected to be completed during Q3 2015.
Sabarmati Field, Onshore Gujarat, India
(Oilex - 40%, Operator)
The Sabarmati Field Petroleum Mining Lease expired on 22
September 2014. On 28 February 2015 the Joint Venture and the
Government of India approved the plug & abandonment of
Sabarmati-1 (SMT-1), the removal & transfer of equipment to
Cambay Field and a site restoration plan. Plug & abandonment
workover for well SMT-1 was completed in early March 2015 and site
restoration works were subsequently completed. In May 2015 the
regulator, the Directorate General Hydrocarbons completed a site
visit and Oilex is now awaiting their report to finalise the
relinquishment of the Field.
Canning Basin, Western Australia
Oilex acquired a large SPA 17 AO (Special Prospecting
Authority), now converted to exploration permit STP-EPA-0131, and
two adjacent exploration areas, STP-EPA-0106 and STP-EPA-0107 in
the onshore Canning Basin, Western Australia. The combined total
area is 3 million acres.
The Canning Basin asset is located adjacent to the Pilbara, a
global resource centre for iron ore and LNG. Oilex has a low cost
entry into a province with the key determinates for success
being:
-- Markets
-- Infrastructure
-- Geology
The acreage is in a unique position in the Canning Basin as it
is adjacent to many world class mining projects in the Pilbara
region. There has been development of a significant amount of
infrastructure in the area with the Great Northern Highway,
numerous sealed roads, good quality graded roads and multiple
airstrips being present within the Oilex acreage. The Telfer Gas
pipeline traverses STP-EPA-0131 and any future pipelines from the
Canning Basin to the export terminals at Port Hedland and Karratha
would have to pass through the acreage (Figure 4).
Figure 4: Significant infrastructure within and adjacent to
Oilex's Wallal Graben permits - a unique situation in the Canning
Basin
Oilex acquired this acreage as it is contained within a unique
setting. The Canning Basin has sometimes been considered to be low
prospectivity due to the diluted nature of the key source rock
intervals. However, the U.S. EIA identified the Canning Basin as
having the largest unconventional potential in Australia. The
primary attraction of the narrow, restricted Wallal Graben is its
interpreted potential for the deposition of source rocks which have
not endured dilution from more oxygen-rich oceanic circulation.
Also, being located directly adjacent to the large Archaean Pilbara
Craton protects this area from significant uplift and erosion which
has sometimes occurred in the Canning Basin resulting in either the
stripping-off of key source intervals or the inability for the
source-rocks to achieve suitable depth of burial.
Prospectivity
A review of prospective onshore basins in Australia resulted in
the identification of a deep, undrilled half graben (Wallal Graben)
in the south-west Canning Basin. Only low resolution
gravity/magnetic data and sparse vintage 2D seismic data of
variable quality have been acquired over this area. No wells have
been drilled sufficiently deep to penetrate the graben-fill.
Comparing interpretations of the different geophysical surveys
revealed possible discrepancies. While the gravity/magnetic data
interpretation defined a relatively shallow graben feature, the 2D
seismic data and subsequent depth conversion facilitated the
interpretation of an extensive half graben up to 5.5 km deep, which
is viewed positively for the generation of hydrocarbons.
Numerous identified play-types are expected to continue along
the length of the Wallal Graben beyond the area covered by 2D
seismic grid resulting in potentially substantial hydrocarbon
volumes being present within all three permits. This assumption has
been demonstrated by a new 2D seismic line in 2014 by Geological
Survey of Western Australia in collaboration with Geoscience
Australia within the northern STP-EPA-0106 permit. This new line is
located 9 km north of the vintage 2D seismic. The identified
prospectivity on the vintage dataset is clearly imaged on the new
2D seismic line supporting that the prospectivity is laterally
extensive along the graben.
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
The leads and prospects inventory comprises multiple play-types
ranging from simple structural traps (Figure 5) to well-defined fan
systems (Figure 6). Due to the concentrated prospectivity, a range
of play-types and reservoir targets can be tested by a single
vertical well resulting in the evaluation of potentially
substantial hydrocarbon volumes at numerous intervals.
The Goldwyer Formation, a well acknowledged tight (shale) play,
is interpreted to exist which is a focus objective for Oilex.
Significant, high value farmin activity by industry majors
targeting the Goldwyer Formation has occurred elsewhere in the
Canning Basin. The Wallal Graben may be a relative sweet spot for
these organic-rich source rocks due to the geological history of
this area of the Canning Basin. Also numerous conventional plays
are interpreted to exist within the Wallal Graben, enhancing the
attractiveness of the acreage.
Figure 5: Example of structural lead - simple tilted fault block
with overlying channel. Note the two interpreted unconventional
plays.
Figure 6: Example of combination lead - fan systems within dip
closure along basin margin fault with larger stratigraphic trapping
element. Note the clearly defined, extensive fan systems
interpreted on 2D seismic (strike line).
Based upon the sparse information the Goldwyer Formation is
interpreted to be favourably located in the oil/condensate maturity
window and within normal drilling depths (2,000-3,000m). Horizontal
wells with multi-stage fracture stimulation programmes may enable
the economic extraction of hydrocarbons from this interval. Oilex
has significant experience in unconventional plays as this is the
main focus of Oilex's flagship project in Cambay, India.
There has been some significant progress made on the Canning
Project during the financial year, including:
-- Detailed interpretation of the airborne gravity gradiometry and magnetics survey
-- Negotiating a formal exploration permit with the Government
of Western Australia following the submission of the final report
and other documentation to the Department of Minerals and Petroleum
for SPA 17 AO
-- The final interpretation confirms Oilex's structural model of
the Wallal Graben, which is clearly-imaged by 2D seismic data in
Oilex's adjacent permits, extends into SPA 17 AO
-- Negotiations with Traditional Owner Groups either holding
Native Title or claiming Native Title over the entire project
The newly acquired airborne gravity and magnetic survey,
together with 2D seismic, regional gravity, magnetic, surface
geological and well data has confirmed Oilex's structural model of
the Wallal Graben.
The Graben is present in Oilex's three, 100%-owned, exploration
areas.
Oilex continues to negotiate Native Title agreements with
Traditional Owners. Upon finalisation of the agreements the
regulatory process of conversion of STP-EPA-0131, STP-EPA-0106 and
STP-EPA-0107 to formal exploration permits will commence.
Figure 7: Interpretation of the Wallal Graben extent overlain on
the magnetic depth to basement horizon (meters relative to sea
level)
JPDA 06-103, Timor Sea
(Oilex - 10%, Operator)
The Joint Venture submitted a request to the Autoridade Nacional
do Petroleo (ANP) to terminate the PSC by mutual agreement in
accordance with its terms and without penalty or claim on 12 July
2013 (Request to Terminate).
The Request to Terminate followed Joint Venture concerns over
the security of PSC tenure as a result of developments within the
JPDA, including JPDA (06-103), which are outside the control and
influence of the Joint Venture Participants, including:
-- existence of separate unilateral rights to terminate the
Certain Maritime Arrangements in the Timor Sea (CMATS) arising in
2013 in favour of both the Government of Timor Leste and the
Government of Australia; and
-- formal arbitration proceedings being initiated by the Timor
Leste Government against the Government of Australia to have CMATS
declared void ab initio.
On 15 January, 2014 the ANP suspended the PSC for 3 months to
provide sufficient time for a response to the Request to Terminate
be determined. The ANP subsequently granted successive 3 month
extensions to the PSC.
In May 2015 the ANP responded to the Joint Venture and advised
that the Request to Terminate had been rejected. Shortly
thereafter, the Joint Venture received a Notice of Intent to
Terminate the PSC (Notice) from the ANP.
The Notice asserts a monetary claim against the Joint Venture
for payment of the estimated cost of exploration activities not
carried out in 2013 and certain local content obligations set out
in the PSC. The total amount sought to be recovered by the ANP in
the Notice is approximately US$17 million (Oilex share US$1.7
million).
The Joint Venture has previously requested credit for excess
expenditure on the approved work programme in the amount of circa
US$56 million and this issue remains unresolved. The Notice does
not include any reference to, nor allowance for, credit for excess
monies which have been spent by the Joint Venture during the PSC
term. Oilex considers such excess expenditure should be included as
part of any financial assessment incorporated in the termination
process.
Subsequent to the end of the year, the ANP issued the Notice of
Termination of the PSC JPDA 06-103 effective 15 July 2015.
The Joint Venture continues to discuss the financial liability
of the Contractor upon termination with the ANP.
West Kampar PSC, Central Sumatra
(Oilex - 45% + further 22.5% secured - Non operator)
Oilex continues to pursue a commercial resolution to the Joint
Venture dispute with the Operator in the West Kampar PSC, in
parallel with considering options to enforce its Arbitration Award
in Jakarta. During the financial year Oilex received good faith
payments from PT Sumatera Persada Energi (SPE) toward the US$4.8
million arbitration award in favour of Oilex.
Background
Oilex (West Kampar) Limited (OWKL), a wholly owned subsidiary of
Oilex Ltd, was assigned a 45% participating interest in the West
Kampar PSC pursuant to a farmout agreement entered into with SPE in
May 2007. The initial area of the West Kampar PSC was 4,471 km(2)
.
In August 2008, OWKL entered into a second farmout agreement to
acquire 15% additional equity interest in the PSC thereby
increasing its interest from 45% to 60% subject to meeting certain
conditions precedent. In January 2009 OWKL terminated the second
farmout agreement when conditions were not met by the due date and
many issues remained unresolved with the Operator. With the
termination of that agreement, SPE was required to reimburse the
monies advanced by OWKL under the terms of that agreement. OWKL
commenced International Chamber of Commerce (ICC) Arbitration
against PT Asiabumi Petroleo (Asiabumi) in Singapore in April 2009
following the failure of SPE in early 2009 to repay a debt owing to
OWKL. SPE's obligations to repay the debt were secured by a parent
company guarantee granted by Asiabumi to OWKL in 2008. On 24 June
2010, the International Court of Arbitration of the ICC found in
favour of OWKL in its claim against Asiabumi for the recovery of
US$4.8 million that is owed to OWKL. The Award granted in Oilex's
favour took effect immediately. OWKL is pursuing the recovery of
the monies owing under the Award. OWKL maintains that it is further
entitled to have assigned an additional 22.5% to its 45% holding
through the exercise of its rights under a Power of Attorney
granted by SPE following the failure of SPE to repay the funds due
referred to above. The assignment documentation has been provided
to the Indonesian regulator, BPMigas (now SKK Migas), but these
have not yet been approved or rejected. If the debt due to OWKL is
satisfied, OWKL will not pursue this assignment.
During the financial year, following application by a creditor,
the Commercial Court in Jakarta appointed an Administrator and
implemented a scheme of arrangement to repay creditors over a 10
year period. As this scheme excluded Oilex's claim, Oilex has
commenced legal action to recover the balance of the arbitration
award and to ensure its interests are protected.
Financial
Treasury policy
The funding requirements of the Group are reviewed on a regular
basis by the Group's Chief Financial Officer and reported to the
Board to ensure the Group is able to meet its financial obligations
as and when they fall due. Internal cash flow models are used to
review and to test investment decisions. Until sufficient operating
cash flows are generated from its operations, the Group remains
reliant on equity or debt funding, as well as assets divestiture or
farmouts to fund its expenditure commitments.
Formal control over the Group's activities is maintained through
a budget and cash flow monitoring process with annual budgets
considered in detail by the Board and forming the basis of the
Company's strategy.
Cash flows are tested under various scenarios to ensure that
expenditure commitments are able to be met under all reasonably
likely scenarios. Expenditures are also carefully monitored against
budget.
The Company continues to actively develop funding options in
order that it can meet its expenditure commitments (refer note 26
of the consolidated financial statements) and its' planned future
discretionary expenditure
Liquidity and funding
In December 2013 the Company secured a GBP7,500,000 three year
Equity Financing Facility (EFF) with Darwin Strategic Limited
(Darwin). Under the terms of the Placing Agreement with Westhouse
Securities Limited executed in July 2015, Oilex has agreed to make
no further use or issue any shares pursuant to the equity draw down
facility with Darwin.
As at 30 June 2015 the Group had no loan borrowings.
Corporate
During the financial year Oilex undertook a number of funding
transactions.
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
In August 2014 the Company raised GBP1,171,800 or $2,131,708,
before expenses of $136,630 with a placement of 18,600,000 shares
at 6.3 pence or 11.46 cents costs via drawdown on the Equity
Financing Facility with Darwin Strategic Limited.
In December 2014 the Company completed an underwritten Share
Purchase Plan raising $2,500,000 before expenses of $382,079,
allotting 60,975,610 shares at 4.1 cents per share, including the
issue of 5,000,000 underwriter options exercisable at ten cents per
share and expiring on 22 December 2014.
Risk Management
The Audit and Risk Committee oversees the Group's internal
financial control system and oversees the Company's risk management
framework. Management of business risk, particularly exploration,
development and operational risk is essential for success in the
oil & gas business. The Group manages risk through a formal
risk identification and risk management system.
Health, Safety, Security and Environment
Policy
Oilex is committed to protecting the health and safety of
everybody who plays a part in our operations or lives in the
communities where we operate. Wherever we operate, we will conduct
our business with respect and care for both the local and global,
natural and social environment and systematically manage risks to
drive sustainable business growth. We will strive to eliminate all
injuries, occupational illness, unsafe practise and incidents of
environmental harm from our activities. The safety and health of
our workforce and our environment stewardship are just as important
to our success as operational and financial performance and the
reputation of the Company.
Oilex respects the diversity of cultures and customs that it
encounters and endeavours to incorporate business practices that
accommodate such diversity and that have a beneficial impact
through our working involvement with local communities. We strive
to make our facilities safer and better places in which to work and
our attention to detail and focus on safety, environmental, health
and security issues will help to ensure high standards of
performance. We are committed to a process of continuous
improvement in all we do and to the adoption of international
industry standards and codes wherever practicable. Through
implementation of these principles, Oilex seeks to earn the
public's trust and to be recognised as a responsible corporate
citizen.
Qualified Petroleum Reserves and Resources Evaluator
statement
Pursuant to the requirements of Chapter 5 of the ASX Listing
Rules, the information in this report relating to petroleum
reserves and resources is based on and fairly represents
information and supporting documentation prepared by or under the
supervision of Mr. Peter Bekkers, Chief Geoscientist employed by
Oilex Ltd. Mr. Bekkers has over 19 years' experience in petroleum
geology and is a member of the Society of Petroleum Engineers and
AAPG. Mr. Bekkers meets the requirements of a qualified petroleum
reserve and resource evaluator under Chapter 5 of the ASX Listing
Rules and consents to the inclusion of this information in this
report in the form and context in which it appears. Mr. Bekkers
also meets the requirements of a qualified person under the AIM
Note for Mining, Oil and Gas Companies and consents to the
inclusion of this information in this report in the form and
context in which it appears.
PERMIT SCHEDULE
PERMIT SCHEDULE
AS AT 30 JUNE 2015
----------------------------------------------------------------------------------------
ASSET LOCATION ENTITY EQUITY OPERATOR
%
-------------- ------------------- -------------------- ------- --------------------
Cambay Field Cambay/Gujarat/ Oilex Ltd 30 Oilex Ltd
PSC
India Oilex NL Holdings 15
(India) Limited
-------------- ------------------- -------------------- ------- --------------------
Bhandut Field Cambay/ Gujarat/ Oilex NL Holdings 40 Oilex NL Holdings
PSC India (India) Limited (India) Limited
-------------- ------------------- -------------------- ------- --------------------
Sabarmati Cambay/ Gujarat/ Oilex NL Holdings 40 Oilex NL Holdings
Field PSC India (India) Limited (India) Limited
-------------- ------------------- -------------------- ------- --------------------
West Kampar Central Sumatra/ Oilex (West Kampar) 67.5 PT Sumatera Persada
PSC Indonesia Limited (1) Energi
-------------- ------------------- -------------------- ------- --------------------
JPDA 06-103 Flamingo/ Oilex (JPDA 06-103) 10 Oilex (JPDA 06-103)
PSC Joint Petroleum Ltd Ltd
Development
Area/ Timor-Leste
& Australia
-------------- ------------------- -------------------- ------- --------------------
STP-EPA-0131 Canning/ Admiral Oil Pty 100 Admiral Oil Pty Ltd
Western Australia Ltd
-------------- ------------------- -------------------- ------- --------------------
STP-EPA-0106 Canning/ Admiral Oil and 100 Admiral Oil and Gas
Western Australia Gas (106) Pty Ltd (106) Pty Ltd
-------------- ------------------- -------------------- ------- --------------------
STP-EPA-0107 Canning/ Admiral Oil and 100 Admiral Oil and Gas
Western Australia Gas (107) Pty Ltd (107) Pty Ltd
-------------- ------------------- -------------------- ------- --------------------
(1) Oilex (West Kampar) Limited is entitled to have assigned an
additional 22.5% to its holding through the exercise of its rights
under a Power of Attorney granted by PT Sumatera Persada Energi
(SPE) following the failure of SPE to repay funds due. The
assignment has been provided to BPMigas (now SKK Migas) but has not
yet been approved or rejected. If Oilex is paid the funds due it
will not pursue this assignment.
2015 FINANCIAL REPORT
CONTENTS
Directors' Report
Remuneration Report - Audited
Lead Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors' Declaration
Independent Audit Report
Shareholder Information
DIRECTORS' REPORT
For the year ended 30 June 2015
The directors present their report together with the
consolidated financial statements of the Group comprising of Oilex
Ltd (the Company) and its subsidiaries for the financial year ended
30 June 2015 and the auditors' report thereon.
DIRECTORS
The directors of the Company at any time during or since the end
of the financial year are:
Mr Max Cozijn
(Non-Executive Chairman)
BCom CPA MAICD
Chairman since the Company listed on the Australian Securities
Exchange (ASX) in 2003, Mr Cozijn has over 35 years of experience
in the administration of listed mining and industrial companies. He
is a Non-Executive Chairman of Jacka Resources Limited and Finance
Director of Energia Minerals Limited, and is a director of various
private companies.
During the last three years Mr Cozijn has been a director of the
following listed companies:
-- Energia Minerals Limited (from May 1997 to current)
-- Jacka Resources Limited (from May 2014 to current)
-- Malagasy Minerals Limited (from September 2006 to August 2013)
-- Carbon Energy Limited (from September 1992 to April 2015)
Mr Sundeep Bhandari
(Non-Executive Vice Chairman)
BCom
Mr Bhandari was appointed as a Director (Vice Chairman) in
November 2011. Mr Bhandari has over 31 years of business experience
in India, of which more than 21 years have been in the energy
business. He has worked with several multinational petroleum
companies, including Cairn Energy, Mobil, Marathon, ENI, PGS and
Command Petroleum. Mr Bhandari was also Chairman of the Corporate
Advisory Board of Cairn India Ltd from 2006 to March 2014. Mr
Bhandari is also a director and shareholder of India Hydrocarbons
Ltd.
During the last three years Mr Bhandari has not been a director
of any other listed companies.
Mr Jeffrey Auld
(Non-Executive Director)
MBA BA (Econ)
Mr Auld was appointed as a UK based Director in January 2015. Mr
Auld has over 24 years of experience in the oil and gas sector,
focused on financial and commercial management in upstream oil and
gas development. He has worked with a number of major financial
institutions, including Macquarie Capital (Europe) Limited in
London where he served as Managing Director - Head of EMEA Oil and
Gas. Mr Auld has also worked for Canaccord Adams Limited and
Goldman, Sachs & Co. Mr Auld's experience includes corporate
and commercial management in exploration and production companies
including London Stock Exchange listed Premier Oil Plc, as well as
PetroKazakhstan Inc and Equator Exploration Limited. Mr Auld
currently is a director of AIM listed Lansdowne Oil and Gas plc. He
is also a director and CEO of various private UK oil and gas
development companies.
During the last three years Mr Auld has not been a director of
any other listed companies.
Mr Ronald Miller
(Managing Director)
MSc Engineering and BSc Ocean Engineering, MAICD (Retired
Chartered Engineer)
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
Initially appointed as a Non-Executive Director in July 2009, Mr
Miller was appointed Managing Director on 1 January 2013. A
chartered professional engineer (1989 - 2011), Mr Miller has more
than 39 years of experience in the international petroleum
industry. Further details of Mr Miller's qualifications and
experience can be found in the Executive Management section of the
Directors' Report.
During the last three years Mr Miller has not been a director of
any other listed companies.
Dr Bruce McCarthy
(Non-Executive Director - Resigned 18 November 2014)
BSc (Hons) PhD Geology
Dr McCarthy was the Managing Director from February 2005 until
January 2013, when he became a Non-Executive
Director. Dr McCarthy retired from the Board in November 2014.
During the last three years, up to the date of his resignation,
Dr McCarthy has not been a director of any other listed
companies.
DIRECTORS' MEETINGS
Directors in office, committee membership and directors'
attendance at meetings during the 2014/15 financial year are as
follows:
Board Audit Remuneration Committee Nomination
Meetings Committee Meetings(1) Meetings(1) Committee Meetings(1)
------------ ------------------- ------------------------ -------------------------- -------------------------
Held(2) Attended Held(2) Attended Held(2) Attended Held(2) Attended
------------ -------- --------- ----------- ----------- ----------- ------------- ----------- ------------
M D J
Cozijn 11(3) 11 4 4 1 1 1 1
S Bhandari 10 10 4(4) 3 1(5) 1 1(3) 1
J D Auld
(7) 6 6 2 2 - - - -
B H
McCarthy 4 4 1 1 1 - - -
R L Miller 11 11 - 4(6) - - 1 1
------------ -------- --------- ----------- ----------- ----------- ------------- ----------- ------------
(1) Please refer to the Corporate Governance Statement on the
Oilex website for details of the change tothe composition of the
Audit, Remuneration and Nomination Committees during the financial
year.
(2) "Held" indicates the number of meetings available for
attendance by the director during the period of each director's
tenure.
(3) Chairman of respective meetings. When the Board meets in its
capacity as the Nomination committee, Mr S Bhandari chairs the
meeting.
(4) Mr S Bhandari chairs the meetings. Mr Cozijn acted as Chair
for 12 September 2014 Audit Committee Meeting.
(5) Mr S Bhandari chairs the meetings.
(6) "Attended" indicates attendance by invitation. Where a
director is not a member of a Committee but attended meetings
during the period only the number of meetings attended, rather than
held, is disclosed.
(7) Appointed to Audit Committee effective 10 February 2015.
EXECUTIVE MANAGEMENT
Mr Ronald Miller
(Managing Director)
MSc Engineering and BSc Ocean Engineering, MAICD (Retired
Chartered Engineer)
Mr Miller was appointed as a Non-Executive Director in July 2009
and Managing Director from 1 January 2013. A chartered engineer in
Australia from 1989 to 2011, Mr Miller brings more than 39 years of
experience in the international petroleum industry including
corporate governance, extensive background in leading
multi-disciplinary upstream organisations and project developments,
including the design and construction of oil and gas projects. Mr
Miller has extensive experience in commercialising and developing
oil and gas discoveries. During his career, Mr Miller held a range
of senior positions including with Mobil, Ampolex, Clough and
Hyundai Heavy Industries.
Mr Chris Bath
(Chief Financial Officer & Company Secretary - Appointed 24
October 2014)
CA MAICD
Mr Bath was appointed Chief Financial Officer and Company
Secretary in October 2014. He is a Chartered Accountant with
significant experience in the energy and resource sectors in both
Australia and Asia. Most recently he was CFO and Company Secretary
for an ASX S&P/ASX 200 listed oil and gas company. Prior to
that, Mr Bath was Deputy CFO Asia Pacific for a Fortune 500 global
commodity business, based in Singapore. Mr Bath has been involved
in the energy and resource sectors operating across Asia and with
listed entities in Australia, Indonesia, Singapore and the United
Kingdom. He has experience in the areas of debt and equity markets,
mergers and acquisitions, joint venture management and
operations.
Mr Peter Bekkers
(Chief Geoscientist)
BSC (Hons) Geology and Geophysics
Mr Bekkers joined Oilex in 2007 as the Senior Explorationist. He
has over 19 years of experience in Australian and international oil
and gas exploration activities including the Far East, Middle East,
West Africa and South East Asia. Prior to joining Oilex, Mr Bekkers
held various roles with Woodside Energy Ltd, Santos Ltd and Boral
Energy Ltd in exploration and new ventures evaluation. Mr Bekkers
was appointed Chief Geoscientist for Oilex in April 2010.
Mr Jayant Sethi
(Head - India Assets - Appointed 16 February 2015)
Geology (Masters)
Mr Sethi joined Oilex in February 2015 as Head - India Assets
and is based in Gandhinagar India. Mr Sethi has over 30 years of
experience in the Indian oil and gas upstream industry. Mr Sethi
previously held senior management positions with Cairn Energy Ltd
and the Oil & Natural Gas Corporation, India's National Oil
Company in areas of exploration, development, portfolio evaluation,
joint venture management, procurement supply chain and enhanced oil
recovery.
COMPANY SECRETARIES
Mr Chris Bath CA MAICD was appointed Company Secretary on 24
October 2014.
Mr Cathal Smith LLB, LLM, MBA is the alternate Company
Secretary.
Mr Robert Ierace was Company Secretary from 30 January 2013
until 24 October 2014.
PRINCIPAL ACTIVITIES
The principal activities of the consolidated entity during the
course of the financial year included:
-- Exploration for oil and gas;
-- Appraisal and development of oil and gas; and
-- Production and sale of oil and gas.
There were no significant changes in the nature of these
activities during the year.
OPERATING RESULTS
The loss after income tax of the consolidated entity for the
year ended 30 June 2015 amounted to $17,388,524 (2014: loss of
$3,752,611). The increase in the loss was due to $11,870,051 for
the impairment of exploration and evaluation assets in the current
year (2014: nil).
FINANCIAL POSITION
The net assets of the consolidated entity totalled $26,603,951
as at 30 June 2015 (2014: $33,354,242).
DIVIDENDS
No dividend was paid or declared during the year and the
directors do not recommend the payment of a dividend.
REVIEW OF OPERATIONS
A review of the operations of the Group during the financial
year and the results of those operations are set out in the Review
of Operations on pages 3 to 16 of this report.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
The Review of Operations details those changes that have had a
significant effect on the Group.
Other than those matters, there have been no other significant
changes in the state of affairs of the Group that occurred during
the financial year.
SIGNIFICANT EVENTS AFTER BALANCE DATE
On 7 July 2015 the Company announced a two tranche placement and
an underwritten rights issue to raise $30 million. Tranche One
utilised the existing placement capacity under ASX Listing Rule 7.1
with 45,393,463 shares being issued at $0.041 to raise $1,861,132
before expenses. Tranche One was completed on 15 July 2015. The
fully underwritten rights issue closed on 28 July 2015, with a
total of 169,476,565 shares being issued at $0.041 to raise
$6,948,539 before expenses.
At a general meeting on 12 August 2015, shareholders approved
the issue of 287,303,619 Tranche Two shares at $0.041 to raise
$11,779,448 before expenses.
In addition, shareholders approved the issue of 124,019,608 Zeta
Deferred Shares at a price of A$0.0418 to raise $5,184,020 before
expenses, and the issue of A$4,243,500 of 20 year, zero coupon
unsecured convertible loan notes to Zeta, which will be convertible
into shares at Zeta's option at any time, subject to compliance
with Australian law, at a conversion price of A$0.0418 per share.
The issue of these convertible notes will occur contemporaneously
with the issue to Zeta of 124,019,608 new ordinary shares under
Tranche Two, to be settled no later than 12 November 2015.
On 27 July 2015 the Company issued a further 341,300 shares on
the exercise of listed options with an exercise price of $0.15.
On 15 July 2015 the Autoridade Nacional do Petroleo (ANP)
advised that it had terminated the PSC JPDA 06-103 as at that date.
The Notice of Termination included a demand for payment of the
monetary claim, previously advised, against the Joint Venture for
payment of the estimated cost of exploration activities not
undertaken in 2013 and certain local content obligations set out in
the PSC. The total amount sought to be recovered by the ANP in the
Notice is approximately US$17 million (Oilex share US$1.7million).
The Company has not provided for a monetary settlement in its
financial statements. As the Joint Venture has made significant
overpayments in the work programme, it is of the opinion that the
excess expenditure should be included as part of any financial
assessment incorporated in the termination process. Refer note
28.
There were no other significant subsequent events occurring
after year end.
LIKELY DEVELOPMENTS
Additional comments on expected results on operations of the
Group are included in the Review of Operations on pages 3 to
16.
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
Further disclosure as to likely developments in the operations
of the Group and expected results of those operations have not been
included in this report as, in the opinion of the Board, these
would be speculative and as such, disclosure would not in the best
interests of the Group.
ENVIRONMENTAL ISSUES
The Group's oil and gas exploration and production activities
are subject to environmental regulation under the legislation of
the respective states and countries in which they operate. The
majority of the Group's activities involve low level disturbance
associated with its exploration drilling programmes. The Board
actively monitors compliance with these regulations and as at the
date of this report is not aware of any material breaches in
respect of these regulations.
DIRECTORS' INTERESTS
The relevant interest of each director in shares and unlisted
options issued by the Company, as notified by the directors to the
ASX in accordance with Section 205G (1) of the Corporations Act
2001, at the date of this report is as follows:
Number of Ordinary Number of Options Over
Shares Ordinary Shares
Direct Indirect Direct Indirect
-------------- ----------- ---------- ---------- -------------
M D J Cozijn - 1,848,218 - -
S Bhandari - 8,600,000 - 4,000,000
J D Auld 1,219,513 - - -
R L Miller - 6,517,242 - 6,000,000
-------------- ----------- ---------- ---------- -------------
SHARE OPTIONS
Unissued shares under options
At the date of this report unissued ordinary shares of the
Company under option (with an exercise price) are:
Expiry Date Exercise Number of Expiry Date Exercise Number of
Price Shares Price Shares
Unlisted Unlisted Options
Options
17 December 25 August
2015 $0.15 3,000,000 2017 $0.25 1,500,000
11 November
8 March 2016 $0.25 5,000,000 2017 $0.25 2,000,000
22 December
27 June 2016 $0.15 500,000 2017 $0.10 5,000,000
4 November 16 February
2016 $0.15 2,000,000 2018 $0.25 500,000
11 November
2016 $0.15 2,000,000 5 August 2018 $0.35 1,075,000
5 December 16 February
2016 $0.15 3,000,000 2019 $0.35 500,000
27 June 2017 $0.25 500,000 29 April 2019 $0.15 4,000,000
5 August 25 August
2017 $0.25 1,075,000 2019 $0.35 1,500,000
Total 33,150,000
------------------------- ---------- ------------------------- -----------
These options do not entitle the holder to participate in any
share issue of the Company or any other body corporate.
Unissued Shares Under Option that Expired During the Year
During the financial year, the following unlisted employee
options were cancelled:
Date Lapsed Number Exercise Price
------------------ ---------- ---------------
1 July 2014 4,150,000 $0.30
10 November 2014 8,737,500 $0.37
27 January 2015 1,000,000 $0.15
27 January 2015 1,000,000 $0.25
20 May 2015 250,000 $0.35
------------------ ---------- ---------------
Shares issued on exercise of unlisted options
During or since the end of the financial year, the Company has
not issued ordinary shares as a result of the exercise of unlisted
options.
Shares issued on exercise of listed options
During and since the end of the financial year, the Company
issued ordinary shares as a result of the exercise of listed
options as follows (there were no amounts unpaid on the shares
issued):
Number of Shares Amount Paid on Each
Share
---------------------- ----------------- --------------------
During the financial
year 7,295,640 $0.15
Since the end of the
financial year 347,613 $0.15
---------------------- ----------------- --------------------
On 7 September 2015, all the listed options issued by the
Company expired unexercised.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Group paid a premium in respect of insurance cover for the
directors and officers of the Group. The Group has not included
details of the nature of the liabilities covered or the amount of
the premium paid in respect of the directors' liability and legal
expense insurance contracts, as such disclosure is prohibited under
the terms of the insurance contract.
PROCEEDINGS ON BEHALF OF THE COMPANY
No proceedings have been brought on behalf of the Company, nor
has any application been made in respect of the Company under
Section 237 of the Corporations Act 2001.
NON-AUDIT SERVICES
The Company may decide to employ the Auditor on assignments
additional to their statutory audit duties where the Auditor's
expertise and experience with the Group is important.
The Board has considered its position and, in accordance with
the advice received from the Audit Committee, is satisfied that the
provision of the non-audit services is compatible with, and did not
compromise, the general standard of independence for auditors
imposed by the Corporations Act 2001. The directors are satisfied
that the provision of non-audit services by the auditor, as set out
below, did not compromise the auditor independence requirements of
the Corporations Act 2001 for the following reasons:
-- all non-audit services have been reviewed by the Audit
Committee to ensure they do not impact the impartiality and
objectivity of the auditor; and
-- the non-audit services provided do not undermine the general
principles relating to auditor independence as set out in APES 110
Code of Ethics for Professional Accountants, as they did not
involve reviewing or auditing the auditor's own work, acting in a
management or decision making capacity for the Group, acting as an
advocate for the Group or jointly sharing risks and rewards.
Refer note 23 for details of the amounts paid to the auditor of
the Group, KPMG Australia, and its network firms for audit and
non-audit services provided during the year.
LEAD AUDITOR'S INDEPENDENCE DECLARATION
The Lead Auditor's Independence Declaration for the year ended
30 June 2015 has been received and can be found on page 38.
REMUNERATION REPORT - AUDITED
1. PRINCIPLES OF COMPENSATION - AUDITED
Remuneration is referred to as compensation throughout this
report. The Remuneration Report explains the remuneration
arrangements for directors and senior executives of Oilex Ltd who
have authority and responsibility for planning, directing and
controlling the activities of the Group (key management
personnel).
Compensation levels for key management personnel of the Group
are competitively set to attract, retain and motivate appropriately
qualified and experienced directors and senior executives. The
Remuneration Committee obtains advice on the appropriateness of
compensation packages of both the Company and the Group given
trends in comparative companies both locally and internationally
and the objectives of the Group's compensation strategy.
The compensation structures explained below are designed to
attract, retain and motivate suitably qualified candidates, reward
the achievement of strategic objectives and achieve the broader
outcome of creation of value for shareholders. The compensation
structures take into account:
-- the capability and experience of the key management personnel;
-- the ability of key management personnel to control the performance of the relevant segments;
-- the Company's performance including:
-- the Group's earnings; and
-- the growth in share price and delivering constant returns on shareholder wealth;
-- exploration success; and
-- development of projects.
Compensation packages include a mix of fixed compensation and
long-term performance-based incentives. In specific circumstances
the Group may also provide short-term cash incentives based upon
the achievement of Company performance hurdles.
1.1 Fixed Compensation
Fixed compensation consists of base compensation, as well as
leave entitlements and employer contributions to superannuation
funds. Compensation levels are reviewed annually by the
Remuneration Committee through a process that considers individual,
sector and overall performance of the Group. In addition, reviews
of available data on oil and gas industry companies provide
comparison figures to ensure the directors' and senior executives'
compensation is competitive in the market. Compensation for senior
executives is separately reviewed at the time of promotion or
initial appointment.
1.2 Performance Linked Compensation
Performance linked compensation includes both short-term and
long-term incentives designed to reward key management personnel
for growth in shareholder wealth. The short-term incentive (STI) is
an "at risk" bonus provided in the form of cash, while the
long-term incentive plan (LTI) is used to reward performance by
granting options over ordinary shares of the Company.
Short-term incentive bonus
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September 24, 2015 05:14 ET (09:14 GMT)
The Group does not utilise short-term incentives on an annual or
regular basis, as these are not considered part of the standard
compensation package for key management personnel. In certain
circumstances the Remuneration Committee may, for reasons of
retention or motivation, consider the use of short-term incentives.
Short-term incentives, if granted, are at the discretion of the
Remuneration Committee having regard to the business plans set
before the commencement of the financial year as well as the
achievement of performance targets as determined by the Board.
These targets include a combination of key strategic, financial and
personal performance measures which may have a major influence over
company performance in the short-term.
There were no short-term incentives awarded during the period.
The short-term incentive cash bonus awarded in the previous year
was accrued as compensation and paid in the current year.
Long-Term Incentive Bonus
Options issued to senior executives during the year are issued
under the Australian Securities Exchange Rule 7.1.
The issue of options is designed to allow the Group to attract
and retain talented employees. The issue of options aims to closely
align the interests of senior executives and employees with those
of shareholders and create a link between increasing shareholder
value and employee reward.
The issue of unlisted options and the vesting dates are at the
discretion of the Board following recommendations received from the
Remuneration Committee.
The exercise price of the unlisted options is set at a premium
to the share price at the time they are granted. The change in
share price is the key performance criteria for achieving a benefit
for the options issued as the value that may be generated on
exercise of options is dependent upon an increase in the share
price above the exercise price of the options.
Whilst the Company has moved certain assets to development on 30
June 2015, during the reporting period the Company was an
exploration and appraisal company that was not generating profits
or net operating cash inflows and as such does not pay any
dividends, and consequently remuneration packages are not linked to
profit performance. It is the performance of the overall
exploration and appraisal programme and ultimately the share price
that largely determines Oilex's performance. The Remuneration
Committee therefore considered that fixed compensation combined
with short-term and long-term incentive components is the best
remuneration structure for achieving the Company's objectives to
the benefit of shareholders. The table below sets out the closing
share price at the end of the current and four previous financial
years.
2015 2014 2013 2012 2011
Share Price
(cents) 6.1 11.5 5.0 11.0 33.0
The remuneration of directors, consists of a cash component as
well as an equity component, and is designed to retain directors of
a high calibre, whilst rewarding them for their ongoing commitment
and contribution to the Company on a cost effective basis. The
issue of options to directors, subject to shareholder approval, is
judged by the Company, to further align the directors' interests
with that of shareholders, whilst maintaining the cash position of
the Company. The Board does not consider that there are any
significant opportunity costs to the Company or benefits foregone
by the Company in issuing options to directors.
1.3 Non-Executive Directors
Total compensation for all Non-Executive Directors is set based
on comparison with external data with reference to fees paid to
Non-Executive Directors of comparable companies. Directors' fees
cover all main Board activities and membership of committees.
The Chairman's base annual fee including superannuation was set
at $87,200 on 1 July 2009 and remains unchanged as at 30 June 2015
other than to include the legislated increases to the
superannuation guarantee levy of 0.25 per cent.
The Vice Chairman's base annual fee including superannuation was
set at $65,400 on 29 July 2011 and remains unchanged as at 30 June
2015.
The company's United Kingdom based Non-Executive Director Mr
Auld, appointed in January 2015, receives a fee of GBP45,000 per
annum.
The aggregate maximum fixed annual amount of remuneration
available for Non-Executive Directors of $500,000 per annum was
approved by Shareholders on 9 November 2011.
In addition to this fixed component, the Company can remunerate
any director called upon to perform extra services or undertake any
work for the Company beyond their general duties. This remuneration
may either be in addition to, or in substitution for, the
director's share of remuneration approved by Shareholders.
Gross fees paid to India Hydrocarbons Limited ("IHL"), a related
party of Mr Bhandari, are for consultancy services provided in
addition to directorial services and therefore are not part of the
fixed component. Payments made for consultancy services to IHL are
for services undertaken under a consultancy contract with the
Company negotiated effective from 1 May 2006, six years prior to Mr
S Bhandari becoming a Non-Executive Director on 9 November 2011.
The gross annual amounts paid of $161,059 (2014: $244,911) relating
to consultancy services are disclosed in the key management
personnel disclosures in the Related Parties note 27 to the
Consolidated Financial Statements. The Group's share of these fees
of $77,845 (2014: $115,108) are disclosed in other related party
transactions in the Related Parties note 27 to the Consolidated
Financial Statements. The balance of 52% (2014: 53%) is payable by
the Joint Operations.
Following the departure of Oilex's Chief Operating Officer the
previous financial year, Mr Bhandari took on a more active role in
India, assisting in strategy, commercial and joint venture related
issues. This work ceased on 30 September 2014.
1.4 Remuneration Consultants
There were no remuneration recommendations made in relation to
key management personnel by remuneration consultants in the
financial year ended 30 June 2015.
1.5 Clawback Policy
The Board has adopted a Clawback Policy to apply from August
2015 in relation to circumstances where an employee acts
fraudulently or dishonestly, or wilfully breaches their duties to
the Company.
2. EMPLOYMENT CONTRACTS - AUDITED
The following table summarises the terms and conditions of
contracts between key executives and the Company:
Termination
Notice
Contract Resignation Unvested Required
Contract Termination Notice Options on from the Termination
Executive Position Start Date Date Required Resignation Company (1) Payment
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
R Miller (2) Managing n/a n/a n/a Forfeited n/a n/a
Director
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
C Bath Chief 24 October n/a 1 month Forfeited 1 month For
Financial 2014 termination
Officer and by the
Company Company, one
Secretary months'
salary plus
any accrued
leave
entitlement.
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
P Bekkers Chief 6 March 2007 n/a 1 month Forfeited 1 month For
Geoscientist termination
by the
Company, one
months'
salary plus
any accrued
leave
entitlement.
If
a Material
Change Event
occurs,
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
employee may
give notice
to the
Company
within 60
days of
the Material
Change
Event,
terminating
the Contract
of
Employment
and
following
that
effective
date, the
Company will
pay a
Termination
Payment
equal to
$125,000.
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
J Sethi Head - India 16 February n/a 1 month Forfeited 30 days For
Assets 2015 termination
by the
Company, one
months'
salary plus
any accrued
leave
entitlement.
------------- ------------- ------------- ------------- ------------- ------------- ------------- -------------
(1) The Company may terminate the contract immediately if
serious misconduct has occurred. In this case the termination
payment is only the fixed remuneration earned until the date of
termination and any unvested options will immediately be
forfeited.
(2) The Managing Director's services are retained via a
consultancy arrangement approved by the Board in December 2012. The
Board intends to negotiate and enter into an appropriate agreement
with Mr Miller.
3. DIRECTORS' AND EXECUTIVE OFFICERS' REMUNERATION - AUDITED
Details of the nature and amount of each major element of
remuneration of each director of the Company and other key
management personnel of the consolidated entity are:
Share-based
Short-Term Payments
--------------- ------ ------------------------------------------------------------- ---------------- ---------- ------------ ------------ ---------- -------------
Proportion
STI Other of
Cash Post-Employment Long-Term Remuneration
Salary & Bonus Benefits Superannuation Benefits Termination Performance
Fees (1) (including Non-Monetary)(2) Total Benefits (3) Benefits Options (4) Total Related
---------- ------- ---------------------------- ---------- ---------------- ---------- ------------ ------------ ---------- -------------
Year $ $ $ $ $ $ $ $ $ %
--------------- ------ ---------- ------- ---------------------------- ---------- ---------------- ---------- ------------ ------------ ---------- -------------
Non-Executive
Directors
M D J Cozijn
(5) 2015 104,000 - - 104,000 9,880 - - - 113,880 -
Chairman 2014 80,000 - - 80,000 7,400 - - - 87,400 -
S Bhandari (6) 2015 226,459 - - 226,459 - - - - 226,459 -
Vice Chairman 2014 419,160 - - 419,160 - - - 189,289 608,449 31%
J D Auld (7) 2015 39,285 - - 39,285 - - - - 39,285 -
Non-Executive
Director 2014 - - - - - - - - - -
B H McCarthy
(8) 2015 19,132 - - 19,132 1,818 - - - 20,950 -
Non-Executive
Director 2014 50,000 - - 50,000 4,625 - - - 54,625 -
Executive
Directors
R L Miller (9) 2015 451,521 - 6,380 457,901 9,104 - - - 467,005 -
Managing
Director 2014 256,000 - 1,890 257,890 54,625 - - 63,550 376,065 17%
Executives
C Bath (10) 2015 280,067 - 1,733 281,800 - 13,862 - 293,044 588,706 50%
Chief
Financial
Officer /
Company
Secretary 2014 - - - - - - - - - -
P Bekkers 2015 294,443 - 2,352 296,795 30,347 21,614 - 101,001 449,757 22%
Chief
Geoscientist 2014 277,776 25,000 1,890 304,666 25,694 29,326 - 9,442 369,128 9%
J Sethi (11) 2015 84,545 - 9,467 94,012 9,308 - - 10,915 114,235 10%
Head - India
Assets 2014 - - - - - - - - - -
R Ierace (12) 2015 90,000 - 618 90,618 10,096 - 24,373 125,087 -
Chief
Financial
Officer /
Company
Secretary 2014 270,000 - 1,890 271,890 24,975 16,642 - 14,676 328,183 4%
Total 2015 1,589,452 - 20,550 1,610,002 70,553 35,476 24,373 404,960 2,145,364
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
Total 2014 1,352,936 25,000 5,670 1,383,606 117,319 45,968 - 276,957 1,823,850
--------------- ------ ---------- ------- ---------------------------- ---------- ---------------- ---------- ------------ ------------ ---------- -------------
The Directors of the Company may be Directors of the Company's
subsidiaries. No remuneration is received for directorships of
subsidiaries. All key management personnel are employed by the
parent entity.
Refer to the following explanatory notes for additional
information.
Notes in Relation to the Table of Directors' and Executive
Officers' Remuneration
(1) The amount represents the STI earned in the respective year
ended 30 June, with the amount being paid in the following
year.
(2) Benefits, including non-monetary include relocation costs
and related expenses, as well as minor benefits, such as payments
on behalf of employees considered personal, car parking and any
associated fringe benefits tax.
(3) Includes, where applicable, accrued employee leave entitlements.
(4) The fair value of the options is calculated at the date of
grant using the Black-Scholes Model. The fair value of the options
is allocated to each reporting period evenly over the period from
grant date to vesting date. The value disclosed is the portion of
the fair value of the options allocated in each reporting period.
In valuing the options, market conditions have been taken into
account.
The following factors and assumptions were used in determining
the fair value of 2015 options on grant date:
Price of Risk Free
Vesting Fair Value Exercise Shares on Expected Interest Dividend
Grant Date Date Expiry Date Per Option Price Grant Date Volatility Rate Yield
------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- -----------
05 August 05 August 05 August
2014 2014 2017 $0.10 $0.25 $0.18 106.59% 2.50% -
05 August 05 August 05 August
2014 2015 2018 $0.11 $0.35 $0.18 106.59% 2.50% -
25 August 25 August 25 August
2014 2014 2017 $0.10 $0.25 $0.17 108.62% 2.50% -
25 August 25 August 25 August
2014 2015 2019 $0.12 $0.35 $0.17 108.62% 2.50% -
16 February 16 February 16 February
2015 2015 2018 $0.02 $0.25 $0.04 119.84% 2.25% -
16 February 16 February 16 February
2015 2016 2019 $0.02 $0.35 $0.04 119.84% 2.25% -
------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- -----------
(5) Mr Cozijn received additional remuneration during the
financial year of $24,000 plus 9.5% superannuation in relation to
extra duties undertaken for Oilex (West Kampar) Limited.
(6) Mr Bhandari was appointed a Non-Executive Director on 9
November 2011. Prior to this appointment, India Hydrocarbons
Limited (IHL) provided consultancy services to the Group, which
continue to be provided. With the departure of the India Chief
Operating Officer the previous financial year, additional
responsibilities continued to be undertaken by IHL and Mr Bhandari
until 30 September 2014. Mr Bhandari assisted in strategy,
commercial and joint venture related issues and the board considers
that the additional remuneration was reasonable in the
circumstances. Mr Bhandari's salary and fees consist of director
fees of $65,400 (2014 $65,000) and the IHL consultancy service
fees, the majority of work which is undertaken by Mr Bhandari, of
$161,059 (2014: $244,911). The net cost to the Group (after Joint
Venture recoveries) in relation to the consultancy service was
$77,845 (2014: $115,108).
(7) Mr Auld was appointed a Non-Executive Director on 27 January
2015. Mr Auld is based in the United Kingdom and is paid GBP45,000
per annum. The amount disclosed is the pro rata amount converted
into Australian dollars at the applicable exchange rate at the date
of payment.
(8) Dr McCarthy resigned as Non-Executive Director on 18 November 2014.
(9) On 1 January 2013 Mr Miller was appointed Managing Director,
prior to this Mr Miller was a Non-Executive Director. Of the total
amount of salaries, fees and superannuation paid to Mr Miller in
the current year of $467,005 (2014: $312,515), $9,104 (2014:
$54,625) was salary sacrificed into superannuation. Included in the
$451,521 (2014: $256,000) invoiced to the Group for his services as
Managing Director, was $190,000 (2014: $40,000) in the current year
to compensate for additional time spent overseas.
(10) On 24 October 2014 Mr Bath became key management personnel
after a transition period working with the incumbent. The salary
disclosed includes $54,003 paid prior to Mr Bath becoming Chief
Financial Officer and Company Secretary. Mr Bath elected to receive
employer superannuation contributions as salary having reached the
prescribed contribution limit prior to appointment.
(11) On 16 February 2015 Mr Sethi become key management personnel.
(12) Ceased employment on 24 October 2014.
Analysis of bonuses included in remuneration
There were no short-term incentive cash bonuses awarded as
remuneration to key management personnel during the financial
year.
The amount disclosed in the prior year was paid in the current
year.
4. Equity Instruments - AUDITED
All options refer to unlisted options over shares of the
Company, which are exercisable on a one-for-one basis.
4.1 Options Over Equity Instruments Granted as Compensation
Details on options over ordinary shares in the Company that were
granted as compensation to each key management person during the
financial year and details on options that vested during the
financial year are as follows:
Fair Value of Exercise Price
Number of Options at of Options Expiry Date of Number of
Options Granted Grant Date Grant Date Granted Options Granted Options Vested
----------- ---------------- ---------------- --------------- ---------------- ---------------- ----------------
P Bekkers 500,000 5 August 2014 $0.10 $0.25 05 August 2017 500,000
P Bekkers 500,000 5 August 2014 $0.11 $0.35 05 August 2018
C Bath 1,500,000 25 August 2014 $0.10 $0.25 25 August 2017 1,500,000
C Bath 1,500,000 25 August 2014 $0.12 $0.35 25 August 2019
16 February 16 February
J Sethi 500,000 2015 $0.02 $0.25 2018 500,000
16 February 16 February
J Sethi 500,000 2015 $0.02 $0.35 2019
22 February
R Ierace 1,000,000 2013 $0.02 $0.25 30 January 2017 1,000,000
----------- ---------------- ---------------- --------------- ---------------- ---------------- ----------------
With the exception of options that have vested, which can be
retained by the employee in accordance with the timeframes in the
option terms and conditions, all options expire on the earlier of
their expiry date or termination of the individual's employment.
Options that have vested can be retained by directors and some
executives until expiry date, and do not expire on termination of
employment. Further details, including grant dates and exercise
dates regarding options granted to key management personnel are in
note 19 to the Consolidated Financial Statements.
4.2 Options Over Equity Instruments Granted as Compensation
Granted Since Year End
No options over ordinary shares in the Company were granted as
compensation to key management personnel and executives since the
end of the financial year.
4.3 Modification of Terms of Equity-Settled Share-based Payment
Transactions
No terms of equity-settled share-based payment transactions
(including options granted as compensation to key management
personnel) have been altered or modified by the issuing entity
during the financial year.
4.4 Exercise of Options Granted as Compensation
During the financial year no shares were issued on the exercise
of options previously granted as compensation.
4.5 Details of Equity Incentives Affecting Current and Future
Remuneration
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Details of vesting profiles of the options held by each key
management person of the Group are detailed below:
Financial Years in
Number of Options Grant Date % Vested in Year % Lapsed in Year (1) Which Grant Vests
-------------- ------------------ ----------------- ----------------- --------------------- ---------------------
R L Miller 750,000 26 November 2009 - 100% (a)
R L Miller 2,000,000 28 October 2013 - - (b)
R L Miller 2,000,000 11 November 2013 - - (b)
R L Miller 2,000,000 11 November 2013 - - (b)
M D J Cozijn 500,000 10 November 2010 - 100% (c)
S Bhandari 2,000,000 7 February 2011 - 100% (b)
S Bhandari 4,000,000 29 April 2014 - - (b)
B H McCarthy 2,000,000 10 November 2010 - 100% (b)
C Bath 3,000,000 25 August 2014 50% - (d)
P Bekkers 300,000 17 August 2009 - 100% (a)
P Bekkers 750,000 10 November 2010 - 100% (c)
P Bekkers 1,000,000 27 June 2013 50% - (d)
P Bekkers 1,000,000 5 August 2014 50% - (d)
J Sethi 1,000,000 16 February 2015 50% - (d)
R Ierace 2,000,000 22 February 2013 - 100% (d)
-------------- ------------------ ----------------- ----------------- --------------------- ---------------------
(8) The number of options lapsed also includes forfeited options.
----------------------------------------------------------------------------------------------------------------------
(a) The options issued vested and were exercisable from 1 July
2010. All options that have been vested can be retained by the
employee upon registration or termination of employment, within the
timeframes specified under the now lapsed Employee Performance
Rights Plan rules applicable at date of grant. All options that
have vested can be retained by the director upon resignation or
termination of employment.
(b) The options issued vested on date of grant. All options that
have vested can be retained by the director upon resignation or
termination of employment.
(c) The options issued vested and were exercisable from 10
November 2010. All options that have vested can be retained by the
employee upon resignation or termination of employment, within the
timeframe specified under the now lapsed Employee Performance
Rights Plan rules applicable at date of grant. All options that
have vested can be retained by the director upon resignation or
termination of employment.
(d) The options issued may vest and can be exercised as one half
immediately and in full one year from grant date. All options that
have vested can, upon resignation or termination of employee be
retained by the employee within three months from the date on which
the employee ceases employment. All options will lapse upon
resignation or termination of employment prior to the option's
vesting date.
4.6 Analysis of Movements in Equity Instruments
The movement during the financial year of unlisted options over
ordinary shares in the Company held by each key management person
is detailed below:
Financial
Value of Value of Number of Options Year Lapsed
Options Granted Options Exercised Lapsed in Year Options
in Year (1) in Year (2) Granted
-------------- ------------------ -------------------- -------------------- -------------
R L Miller - - 750,000 June 2010
M D J Cozijn - - 500,000 June 2011
S Bhandari - - 2,000,000 June 2011
J D Auld - - - -
B H McCarthy - - 2,000,000 June 2011
C Bath 319,581 - - -
P Bekkers
(3) 106,377 - 300,000 June 2010
P Bekkers
(3) - - 750,000 June 2011
J Sethi 16,606 - - -
R Ierace - - 2,000,000 June 2013
-------------- ------------------ -------------------- -------------------- -------------
(1) The value of options granted in the year is the fair
value of the options calculated at grant date using the
Black-Scholes Model. The total value of the options granted
is included in the table above. This amount is allocated
to remuneration over the vesting period.
(2) The number of options lapsed also includes forfeited
options.
(3) The number of options lapsed were issued prior to Mr
Bekkers becoming a key management person.
---------------------------------------------------------------------------------------------
4.7 Options over Equity Instruments Granted as Compensation
No unlisted options held by key management personnel are vested
but not exercisable. The movement during the financial year in the
number of options over ordinary shares in the Company held,
directly, indirectly or beneficially, by each key management
person, including their related parties, is as follows:
Held Vested
at 1 Other Held at Vested and Exercisable
July Granted Changes 30 June During at 30
2014 as Compensation Exercised (1) 2015 the Year June 2015
-------------- ---------- ----------------- ---------- ------------ ---------- ---------- -----------------
R L Miller 6,750,000 - - (750,000) 6,000,000 - 6,000,000
M D J Cozijn 500,000 - - (500,000) - - -
S Bhandari 6,000,000 - - (2,000,000) 4,000,000 - 4,000,000
J D Auld
(2) n/a - - - - - -
B H McCarthy
(3) 2,000,000 - - (2,000,000) n/a - n/a
C Bath (4) n/a 3,000,000 - - 3,000,000 1,500,000 1,500,000
P Bekkers 2,050,000 1,000,000 - (1,050,000) 2,000,000 500,000 1,500,000
J Sethi
(5) n/a 1,000,000 - - 1,000,000 500,000 500,000
R Ierace
(6) 2,000,000 - - (2,000,000) n/a 1,000,000 n/a
-------------- ---------- ----------------- ---------- ------------ ---------- ---------- -----------------
(1) Other changes represent options that expired or were forfeited
during the year.
(2) Mr Auld appointed 27 January 2015.
(3) Mr McCarthy resigned 18 November 2014.
(4) Mr Bath appointed 24 October 2014.
(5) Mr Sethi appointed 16 February 2015.
(6) Mr Ierace ceased employment 24 October 2014.
------------------------------------------------------------------------------------------------------------------
5. KEY MANANGEMENT PERSONNEL TRANSACTIONS - AUDITED
5.1 Other Transactions with Key Management Personnel
Two key management persons, or their related parties, hold
positions in other entities that result in them having control or
joint control over the financial or operation policies of those
entities.
These entities transacted with the Group during the year. The
terms and conditions of the transactions with key management
personnel and their related parties were no more favourable than
those available, or which might reasonably be expected to be
available, on similar transactions to non-key management personnel
related entities on an arm's length basis.
These transactions have all been disclosed in the remuneration
table.
5.2 Movements in Shares
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The movement during the financial year in the number of ordinary
shares in the Company held, directly, indirectly or beneficially,
by each key management person, including their related parties, is
as follows:
Held at Held at
1 July 2014 Received on Exercise of Options Other Changes (1) 30 June 2015
------------------ ------------- -------------------------------- ------------------ --------------
R L Miller 6,029,436 - 121,952 6,151,388
M D J Cozijn 1,500,000 - 146,340 1,646,340
S Bhandari 8,600,000 - - 8,600,000
J D Auld (2) n/a - - -
B H McCarthy (3) 1,610,000 - - n/a
C Bath (4) n/a - 1,951,220 1,951,220
P Bekkers 400,000 - - 400,000
J Sethi (5) n/a - - -
R Ierace (6) 200,000 - (200,000) n/a
------------------ ------------- -------------------------------- ------------------ --------------
(1) Other changes represent shares that were purchased or sold during the year and includes
participation in December 2014 Share Purchase Plan.
(2) Mr Auld appointed 27 January 2015.
(3) Mr McCarthy resigned 18 November 2014.
(4) Mr Bath appointed 24 October 2014.
(5) Mr Sethi appointed 16 February 2015.
(6) Mr Ierace ceased employment 24 October 2014.
-------------------------------------------------------------------------------------------------------
5.3 Movements in Listed Options
The movement during the financial year in the number of listed
options in the Company held, directly, indirectly or beneficially,
by each key management person, including their related parties, is
as follows:
Held at Other Changes Held at
1 July 2014 Purchased (1) 30 June 2015
-------------- ------------- ---------- -------------- --------------
R L Miller 3,252,500 - - 3,252,500
M D J Cozijn 200,000 - - 200,000
S Bhandari - - - -
J D Auld
(2) n/a - - -
B H McCarthy
(3) 230,000 - - n/a
C Bath (4) n/a - - -
P Bekkers 200,000 - - 200,000
J Sethi (5) n/a - - -
R Ierace
(6) 100,000 - (100,000) n/a
-------------- ------------- ---------- -------------- --------------
(1) Other changes represent listed options that were exercised
or sold during the year.
(2) Mr Auld appointed 27 January 2015.
(3) Mr McCarthy resigned 18 November 2014.
(4) Mr Bath appointed 24 October 2014.
(5) Mr Sethi appointed 16 February 2015.
(6) Mr Ierace ceased employment 24 October 2014.
-------------------------------------------------------------------------
END OF REMUNERATION REPORT - AUDITED
Mr Max Cozijn Mr Ronald Miller
Chairman Managing Director
Signed in accordance with a resolution of the Directors
West Perth
Western Australia
24 September 2015
Lead Auditor's Independence Declaration under Section 307C of
the Corporations Act 2001
To: the directors of Oilex Ltd
I declare that, to the best of my knowledge and belief, in
relation to the audit for the financial year ended 30 June 2015
there have been:
i) no contraventions of the auditor independence requirements as
set out in the Corporations Act 2001 in relation to the audit;
and
ii) no contraventions of any applicable code of professional conduct in relation to the audit.
KPMG
Brent Steedman
Partner
Perth
24 September 2015
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative ("KPMG International"), a Swiss
entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Note 2015 2014
$ $
------------- ------------
Revenue 6(a) 290,294 250,620
Cost of sales 6(b) (498,390) (415,207)
------------- ------------
Gross loss (208,096) (164,587)
Other income 6(c) 331,853 695,032
Exploration expenditure 6(d) (13,174,108) (1,718,674)
Administration expense 6(e) (3,078,163) (2,855,933)
Share-based payments expense 19 (552,139) (399,112)
Other expenses 6(f) (900,828) (109,982)
------------- ------------
Results from operating activities (17,581,481) (4,553,256)
------------- ------------
Finance income 39,426 67,705
Finance costs (256) (28)
Foreign exchange gain 6(g) 153,787 732,968
------------- ------------
Net finance income 192,957 800,645
------------- ------------
Loss before tax (17,388,524) (3,752,611)
Income tax expense 7 - -
------------- ------------
Loss (17,388,524) (3,752,611)
------------- ------------
Other comprehensive income
Items that may be reclassified to profit or loss
Foreign operations - foreign currency translation differences 5,260,588 (1,554,101)
------------- ------------
Other comprehensive income/(loss), net of tax 5,260,588 (1,554,101)
------------- ------------
Total comprehensive loss (12,127,936) (5,306,712)
------------- ------------
Earnings per share
Basic loss per share (cents per share) 8 (2.7) (0.8)
Diluted loss per share (cents per share) 8 (2.7) (0.8)
The above Consolidated Statement of Profit or Loss and Other
Comprehensive Income is to be read in conjunction with the
accompanying notes.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
2015 2014
Note $ $
-------------- --------------
Assets
Cash and cash equivalents 9 1,187,158 7,455,572
Trade and other receivables 10 3,575,545 3,684,488
Prepayments 595,587 733,654
Inventories 11 1,249,482 1,047,630
-------------- --------------
Total current assets 6,607,772 12,921,344
-------------- --------------
Trade and other receivables 10 98,958 80,585
Exploration and evaluation 12 11,644,674 26,320,952
Development assets 13 15,647,996 -
Property, plant and equipment 14 280,151 254,741
Total non-current assets 27,671,779 26,656,278
-------------- --------------
Total assets 34,279,551 39,577,622
-------------- --------------
Liabilities
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Trade and other payables 15 3,673,015 2,776,075
Employee benefits 16 406,843 386,198
Provisions 17 - 132,966
Total current liabilities 4,079,858 3,295,239
-------------- --------------
Provisions 17 3,595,742 2,928,141
Total non-current liabilities 3,595,742 2,928,141
-------------- --------------
Total liabilities 7,675,600 6,223,380
-------------- --------------
Net assets 26,603,951 33,354,242
-------------- --------------
Equity
Issued capital 18 153,928,046 149,250,072
Reserves 18 8,693,281 5,179,638
Accumulated losses (136,017,376) (121,075,468)
-------------- --------------
Total equity 26,603,951 33,354,242
-------------- --------------
The above Consolidated Statement of Financial Position is to be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Attributable to Owners of the Company
Foreign Currency
Issued Capital Option Reserve Translation Reserve Accumulated Losses Total Equity
$ $ $ $ $
--------------- --------------- ----------------------- ------------------- -------------
Balance at 30 June
2013 135,371,619 3,663,824 2,644,735 (117,416,789) 24,263,389
--------------- --------------- ----------------------- ------------------- -------------
Total comprehensive
(loss)/income
Loss - - - (3,752,611) (3,752,611)
--------------- --------------- ----------------------- ------------------- -------------
Other comprehensive
income
Foreign exchange gain
on disposal of foreign
subsidiary transferred
to profit and loss - - (1,800,029) - (1,800,029)
Foreign currency
translation
differences - - 245,928 - 245,928
--------------- --------------- ----------------------- ------------------- -------------
Total other
comprehensive income - - (1,554,101) - (1,554,101)
--------------- --------------- ----------------------- ------------------- -------------
Total comprehensive
(loss)/income - - (1,554,101) (3,752,611) (5,306,712)
--------------- --------------- ----------------------- ------------------- -------------
Transactions with
owners of the Company
Contributions and
distributions
Shares issued 14,915,770 - - - 14,915,770
Capital raising costs (1,037,497) 120,000 - - (917,497)
Shares issued on
exercise of listed
options 180 - - - 180
Transfer on exercise -
of options - - - -
Transfers on forfeited
options - (93,932) - 93,932 -
Share-based payment
transactions - 399,112 - - 399,112
--------------- --------------- ----------------------- ------------------- -------------
Total transactions
with owners of the
Company 13,878,453 425,180 - 93,932 14,397,565
--------------- --------------- ----------------------- ------------------- -------------
Balance at 30 June
2014 149,250,072 4,089,004 1,090,634 (121,075,468) 33,354,242
--------------- --------------- ----------------------- ------------------- -------------
Balance at 30 June
2014 149,250,072 4,089,004 1,090,634 (121,075,468) 33,354,242
--------------- --------------- ----------------------- ------------------- -------------
Total comprehensive
(loss)/income
Loss - - - (17,388,524) (17,388,524)
--------------- --------------- ----------------------- ------------------- -------------
Other comprehensive
income
Foreign exchange gain
on disposal of foreign
subsidiary transferred
to profit and loss - - - - -
Foreign currency
translation
differences - - 5,260,588 - 5,260,588
Total other
comprehensive income - - 5,260,588 - 5,260,588
--------------- --------------- ----------------------- ------------------- -------------
Total comprehensive
(loss)/income - - 5,260,588 (17,388,524) (12,127,936)
--------------- --------------- ----------------------- ------------------- -------------
Transactions with
owners of the Company
Contributions and
distributions
Shares issued 4,362,379 - - - 4,362,379
Capital raising costs
(1) (778,751) 147,532 - - (631,219)
Shares issued on
exercise of listed
options 1,094,346 - - - 1,094,346
Transfer on exercise
of options - (38,414) - 38,414 -
Transfers on forfeited
options - (2,408,202) - 2,408,202 -
Share-based payment
transactions - 552,139 - - 552,139
--------------- --------------- ----------------------- ------------------- -------------
Total transactions
with owners of the
Company 4,677,974 (1,746,945) - 2,446,616 5,377,645
--------------- --------------- ----------------------- ------------------- -------------
Balance at 30 June
2015 153,928,046 2,342,059 6,351,222 (136,017,376) 26,603,951
--------------- --------------- ----------------------- ------------------- -------------
(1) Capital raising costs include cash payments and the fair
value of options granted to the underwriter.
The above Consolidated Statement of Changes in Equity is to be
read in conjunction with the accompanying notes.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
2015 2014
Note $ $
------------ ------------
Cash flows from operating activities
Cash receipts from customers 313,502 245,713
Payments to suppliers and employees (3,420,490) (3,399,131)
------------ ------------
Cash outflow from operations (3,106,988) (3,153,418)
Payments for exploration and evaluation expenses (2,773,193) (3,096,786)
Cash receipts from government grants 358,517 336,515
Interest received 39,403 67,922
Interest paid (256) (27)
Net cash used in operating activities 20 (5,482,517) (5,845,794)
------------ ------------
Cash flows from investing activities
Advances from/(to) joint ventures 3,158 33,784
Payments for capitalised exploration and evaluation (6,118,722) (3,872,230)
Proceeds from sale of assets and materials 600 1,984
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Acquisition of property, plant and equipment (107,643) (64,480)
------------ ------------
Net cash used in investing activities (6,222,607) (3,900,942)
------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital 4,631,708 14,646,442
Proceeds from exercise of share options 1,094,346 180
Payment for share issue costs (400,028) (951,061)
Net cash from financing activities 5,326,026 13,695,561
------------ ------------
Net (decrease)/increase in cash and cash equivalents (6,379,098) 3,948,825
Cash and cash equivalents at 1 July 7,455,572 3,598,640
Effect of exchange rate fluctuations on cash held 110,684 (91,893)
Cash and cash equivalents at 30 June 9 1,187,158 7,455,572
------------ ------------
The above Consolidated Statement of Cash Flows is to be read in
conjunction with the accompanying notes.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR
ENDED 30 JUNE 2015
NOTE 1 - REPORTING ENTITY
Oilex Ltd (the Company) is domiciled in Australia. These
consolidated financial statements comprise the Company and its
subsidiaries (collectively the Group and individually Group
Entities). Oilex Ltd is a company limited by shares incorporated in
Australia whose shares are publicly traded on the Australian
Securities Exchange (ASX) and on the Alternative Investment Market
(AIM) of the London Stock Exchange. The Group is a for-profit
entity and is primarily involved in the exploration, evaluation,
development and production of hydrocarbons.
NOTE 2 - BASIS OF PREPARATION
(a) Statement of Compliance
The consolidated financial statements are general purpose
financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001.
The consolidated financial statements comply with International
Financial Reporting Standards (IFRS) adopted by the International
Accounting Standards Board (IASB).
The consolidated financial statements were authorised for issue
by the Board of Directors on 23 September 2015.
(b) Basis of Measurement
The consolidated financial statements have been prepared on the
historical cost basis except for the following material items in
the statement of financial position:
Foreign Currency Translation Reserve; and
Share-based payment arrangements are measured at fair value.
(c) Functional and Presentation Currency
These consolidated financial statements are presented in
Australian dollars, which is the Company's functional currency. The
functional currency of the majority of the Company's subsidiaries
is United States dollars.
(d) Use of Estimates and Judgements
In preparing these consolidated financial statements, management
continually evaluate judgements, estimates and assumptions that
affect the application of the Group's accounting policies and the
reported amounts of assets, liabilities, income and expenses. All
judgements, estimates and assumptions made are believed to be
reasonable based on the most current set of circumstances. Actual
results may differ from these judgements, estimates and
assumptions. Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to estimates are recognised
prospectively.
Judgements, assumptions and estimation uncertainties
In the process of applying the Group's accounting policies,
judgements assumptions and estimation uncertainties that have a
significant risk of resulting in a material adjustment within the
next financial year are as follows:
i) Exploration and Evaluation Assets
The Group's accounting policy for exploration and evaluation
expenditure is set out in note 3(e). The application of this policy
necessarily requires management to make certain estimates and
assumptions as to future events and circumstances, including, in
particular, the assessment of whether economic quantities of
resources have been found, or alternatively, that the sale of the
respective areas of interest will be achieved. Critical to this
assessment is estimates and assumptions as to contingent and
prospective resources, the timing of expected cash flows, exchange
rates, commodity prices and future capital requirements. These
estimates and assumptions may change as new information becomes
available. If, after having capitalised expenditure under this
policy, it is determined that the expenditure is unlikely to be
recovered by future exploitation or sale, then the relevant
capitalised amount will be written off to the consolidated
statement of profit or loss and other comprehensive income. The
carrying amounts of exploration and evaluation assets are set out
in note 12.
ii) Reserve Estimates
Development costs are amortised on a units of production basis
over the life of economically recoverable reserves, so as to write
off costs in proportion to the depletion of the estimated reserves.
The estimation of reserves requires interpretation of geological
and geophysical data. The geological and economic factors which
form the basis of reserve estimates may change over reporting
periods.
iii) Rehabilitation Provisions
The Group estimates the future removal costs of onshore oil and
gas production facilities, wells and pipeline at the time of
installation of the assets. In most instances, removal of assets
occurs many years into the future. This requires judgemental
assumptions regarding removal date, future environmental
legislation, the extent of reclamation activities required, the
engineering methodology for estimating cost, future removal
technologies in determining the removal cost, and discount rates to
determine the present value of these cash flows. For more detail
regarding the policy in respect of provision for rehabilitation
refer to note 3(l).
iv) Impairment of Assets
The recoverable amount of the Group's non-financial assets are
reviewed at each reporting date to determine whether there is any
indication of impairment. An impairment loss is recognised if the
carrying amount of an asset or its cash-generating unit exceeds its
estimated recoverable amount. A cash-generating unit is the
smallest identifiable asset group that generates cash flows that
are largely independent from other assets and groups. Impairment
losses are recognised in profit or loss.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset, as well as the timing of the
cash flows and expected life of the relevant area of interest,
exchange rates, commodity prices, future capital requirements and
future operating performance. Changes in these estimates and
assumptions impact the recoverable amount of the asset of
cash-generating unit, and accordingly could result in an adjustment
to the carrying amount of that asset or cash-generating unit.
v) Recognition of Tax Losses
The Group's accounting policy for deferred taxes is set out in
note 3(p). A deferred tax asset is recognised for unused losses
only if it is probable that future taxable profits will be
available to utilise those losses. The application of this policy
necessarily requires management to make certain estimates and
assumptions as to future events and circumstances, including, in
particular, the assessment of whether economic quantities of
resources have been found, or alternatively, that the sale of the
respective areas of interest will be achieved. Any such estimates
and assumptions may change as new information becomes
available.
(e) Changes in Accounting Polices
Except for the following changes, the Group has consistently
applied the accounting polices set out in note 3 to all periods
presented in these consolidated financial statements.
-- AASB 2014-1 Amendments to Australian Accounting Standards -
Part C Materiality sets out amendments to particular Australian
Accounting Standards to delete their references to AASB 1031
Materiality and was effective for annual reporting periods
beginning on or after 1 July 2014.
-- AASB 2014-1 Amendments to Australian Accounting Standards -
Part A Annual Improvements to IFRSs 2010-2012 Cycle and Annual
Improvements to IFRSs 2011-2013 Cycle sets out amendments to
International Financial Reporting Standards and the related bases
for conclusions and guidance made during the International
Accounting Standards Board's Annual Improvement process. These
amendments have been adopted by the AASB and are effective for
annual reporting periods beginning on or after 1 July 2014.
-- AASB 2013-3 Amendments to AASB 136 - Recoverable Amount
Disclosures for Non-Financial Assets.
-- AASB 2013-9 (part B) Amendments to Australian Accounting Standards - Materiality.
The adoption of new and amended Standards had no impact on the
financial position or the consolidated financial statements of the
Group.
The Group has not elected to early adopt any other new or
amended AASB's that are issued but not yet effective (refer note
3(u)).
NOTE 3 - SIGNIFICANT ACCOUNTING POLICIES
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The accounting policies set out below have been applied
consistently to all periods presented in these consolidated
financial statements and have been applied consistently by Group
entities, except as explained in note 2(e) which addresses any
changes in accounting policies.
(a) Basis of Consolidation
i) Subsidiaries
Subsidiaries are entities controlled by the Group. The Group
controls an entity when it is exposed to, or has rights to,
variable returns from its involvement with the entity and has the
ability to affect those returns through its power over the entity.
The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control
commences until the date that control ceases.
ii) Joint Arrangements - Joint Ventures
Joint ventures are those entities over whose activities the
Group has joint control, established by contractual agreement.
iii) Joint Arrangements - Joint Operations
The interest of the Group in unincorporated joint operations and
jointly controlled assets are brought to account by recognising, in
its consolidated financial statements, the assets it controls, the
liabilities that it incurs, the expenses it incurs and the share of
income that it earns from the sale of goods or services by the
joint operations.
iv) Transactions Eliminated on Consolidation
Intragroup balances and transactions, and any unrealised gains
and losses or income and expenses arising from intragroup
transactions, are eliminated in preparing the consolidated
financial statements.
(b) Foreign Currency
i) Foreign Currency Transactions
Transactions in foreign currencies are translated into the
respective functional currencies of Group entities at exchange
rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies at the reporting date are retranslated to the functional
currency at the foreign exchange rate at that date. The foreign
currency gain or loss on monetary items is the difference between
amortised cost in the functional currency at the beginning of the
period, adjusted for effective interest and payments during the
period, and the amortised cost in foreign currency translated at
the exchange rate at the end of the reporting period.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are retranslated to the
functional currency at the exchange rate at the date that the fair
value was determined. Foreign currency differences arising on
retranslation are recognised in profit or loss. Non-monetary items
that are measured in terms of historical cost in a foreign currency
are translated using the exchange rate at the date of the
transaction.
ii) Foreign Operations
The assets and liabilities of foreign operations are translated
to Australian dollars at exchange rates at the reporting date. The
income and expenses of foreign operations are translated to
Australian dollars at exchange rates at the dates of the
transactions.
Foreign currency differences are recognised in other
comprehensive income and presented in the foreign currency
translation reserve (FCTR). When the settlement of a monetary item
receivable from or payable to a foreign operation is neither
planned nor likely in the foreseeable future, foreign exchange
gains and losses arising from such a monetary item are considered
to form part of a net investment in a foreign operation and are
recognised in other comprehensive income and are presented within
equity in the FCTR.
When a foreign operation is disposed of in its entirety or
partially such that control, significant influence or joint control
is lost, the cumulative amount in the translation reserve related
to that foreign operation is reclassified to profit or loss as part
of the gain or loss on disposal.
(c) Financial Instruments
i) Share Capital
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax
effects.
ii) Non-derivative Financial Assets
The Group initially recognises loans and receivables and
deposits on the date that they are originated. All other financial
assets (including assets designated at fair value through profit or
loss) are recognised initially on the trade date at which the Group
becomes a party to the contractual provisions of the
instrument.
The Group derecognises a financial asset when the contractual
rights to the cash flows from the asset expire, or it transfers the
rights to receive the contractual cash flows on the financial asset
in a transaction in which substantially all the risks and rewards
of ownership of the financial asset are transferred. Any interest
in transferred financial assets that is created or retained by the
Group is recognised as a separate asset or liability.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends
either to settle on a net basis or to realise the asset and settle
the liability simultaneously.
The Group has the following non-derivative financial assets:
loans and receivables and cash and cash equivalents (refer note
3(d)).
Loans and Receivables
Loans and receivables are financial assets with fixed or
determinable payments that are not quoted in an active market. Such
assets are recognised initially at fair value plus any directly
attributable transaction costs. Subsequent to initial recognition
loans and receivables are measured at amortised cost using the
effective interest method, less any impairment losses.
Loans and receivables comprise trade and other receivables.
iii) Non-derivative Financial Liabilities
The Group initially recognises debt securities issued and
subordinated liabilities on the date that they are originated. All
other financial liabilities (including liabilities designated at
fair value through profit or loss) are recognised initially on the
trade date at which the Group becomes a party to the contractual
provisions of the instrument. The Group derecognises a financial
liability when its contractual obligations are discharged or
cancelled or expire. Financial assets and liabilities are offset
and the net amount presented in the statement of financial position
when and only when, the Group has a legal right to offset the
amounts and intends either to settle on a net basis or to realise
the asset and settle the liability simultaneously. The Group
classifies non-derivative financial liabilities into the other
financial liabilities category. Such financial liabilities are
recognised initially at fair value plus any directly attributable
transaction costs. Subsequent to initial recognition these
financial liabilities are measured at amortised cost using the
effective interest rate method.
Other financial liabilities comprise trade and other
payables.
(d) Cash and Cash Equivalents
Cash and cash equivalents comprise cash balances, call deposits,
cash in transit and short-term deposits with an original maturity
of three months or less from the acquisition date that are subject
to an insignificant risk of changes in their fair value, and are
used by the Group in the management of its short-term
commitments.
(e) Exploration and Evaluation Expenditure
Exploration and evaluation of hydrocarbons resources is the
identification and evaluation of oil and gas resources, as well as
the determination of the technical feasibility and commercial
viability of extracting the resources. Exploration and evaluation
expenditure in respect of each area of interest is accounted for
under the successful efforts method. Accounting for exploration and
evaluation expenditure is assessed separately for each area of
interest. An area of interest is an individual geological area
which is considered to constitute a favourable environment for the
presence of hydrocarbon resources or has been proven to contain
such resources.
Expenditure incurred on activities that precede exploration and
evaluation of hydrocarbon resources including all expenditure
incurred prior to securing legal rights to explore an area, is
expensed as incurred.
Exploration licence acquisition costs relating to established
oil and gas exploration areas are capitalised.
The costs of drilling exploration wells are initially
capitalised pending the results of the well. Costs are expensed
where the well does not result in the successful discovery of
potentially economically recoverable reserves.
All other exploration and evaluation expenditure, including
general administration costs, geological and geophysical costs and
new venture expenditure is expensed as incurred, except where:
-- The expenditure relates to an exploration discovery for
which, at balance date, an assessment of the existence or otherwise
of economically recoverable reserves is not yet complete; or
-- The expenditure relates to an area of interest under which it
is expected that the expenditure will be recouped through
successful development and exploitation, or by sale.
When an oil or gas field has been approved for commercial
development, the accumulated exploration and evaluation costs are
transferred to development expenditure. Amortisation of capitalised
costs is not charged on revenues earned from production
testing.
Impairment of Exploration and Evaluation Expenditure
Exploration and evaluation assets are assessed for impairment if
sufficient data exists to determine technical feasibility and
economic viability or facts and circumstances suggest that the
carrying amount exceeds the recoverable amount.
Exploration and evaluation assets are reviewed for impairment if
any of the following facts and circumstances exist:
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The exploration licence term in the specific area of interest
has expired during the reporting period or will expire in the near
future and it is not anticipated that this will be renewed;
Expenditure on further exploration and evaluation of specific
areas is not budgeted or planned;
Exploration for and evaluation of oil and gas assets in the
specific area has not lead to the discovery of potentially
commercial reserves; or
Sufficient data exists to indicate that the carrying amount of
the exploration and evaluation asset is unlikely to be recovered in
full, either by development or sale.
Exploration and evaluation expenditure is reviewed for
impairment at each reporting date where there is an indication that
the individual geological area may be impaired (refer note
3(i)(ii)).
In the statement of cash flows, those cash flows associated with
capitalised exploration and evaluation expenditure are classified
as cash flows used in investing activities. Exploration and
evaluation expenditure expensed is classified as cash flows used in
operating activities.
(f) Development Expenditure
Development expenditure includes past exploration and evaluation
costs, pre-production development costs, development drilling,
development studies and other subsurface expenditure pertaining to
that area of interest. Costs related to surface plant and equipment
and any associated land and buildings are accounted for as
property, plant and equipment.
The definition of an area of interest for development
expenditure is narrowed from the exploration permit for exploration
and evaluation expenditure to the individual geological area where
the presence of an oil or natural gas field exists, and in most
cases will comprise an individual oil or gas field.
Development expenditure is reviewed for impairment at each
reporting date where there is an indication that the individual
geological area may be impaired (refer note 3(i)(ii)).
Amortisation is not charged on costs carried forward in respect
of areas of interest in the development phase until production
commences. When production commences, carried forward development
costs are amortised on a units of production basis over the life of
economically recoverable reserves.
(g) Joint arrangements
Joint arrangements are arrangements of which two or more parties
have joint control. Joint control is the contractual agreed sharing
of control of the arrangements which exists only when decisions
about the relevant activities required unanimous consent of the
parties sharing control. Joint arrangements are classified as
either a joint operation or joint venture, based on the rights and
obligations arising from the contractual obligations between the
parties to the arrangement.
To the extent the joint arrangement provides the Group with
rights to the individual assets and obligations arising from the
joint arrangement, the arrangement is classified as a joint
operation and as such, the Group recognises its:
-- Assets, including its share of any assets held jointly;
-- Liabilities, including its share of any liabilities incurred jointly;
-- Revenue from the sale of its share of the output arising from the joint operation;
-- Share of revenue from the sale of the output by the joint operation; and
-- Expenses, including its share of any expenses incurred jointly.
The Group's interest in unincorporated entities are classified
as joint operations.
Joint Ventures provides the Group a right to the net assets of
the venture and are accounted for using the equity method. The
Group currently has no joint venture arrangements.
(h) Inventories
Inventories comprising materials and consumables and petroleum
products are measured at the lower of cost and net realisable
value. Net realisable value is the estimated selling price in the
ordinary course of business, less the estimated costs of completion
and selling expenses.
(i) Impairment
i) Non-derivative Financial Assets (including receivables)
A financial asset not carried at fair value through profit or
loss is assessed at each reporting date to determine whether there
is objective evidence that it is impaired. A financial asset is
impaired if objective evidence indicates that a loss event has
occurred after the initial recognition of the asset, and that the
loss event had a negative effect on the estimated future cash flows
of that asset that can be estimated reliably. Objective evidence
that financial assets are impaired can include default or
delinquency by a debtor, restructuring of an amount due to the
Group on terms that the Group would not consider otherwise,
indications that a debtor or issuer will enter bankruptcy or the
disappearance of an active market for a security.
The Group considers evidence of impairment for receivables at
both a specific asset and collective level. All individually
significant receivables are assessed for specific impairment. All
individually significant receivables found not to be specifically
impaired are then collectively assessed for any impairment that has
been incurred but not yet identified. Receivables that are not
individually significant are collectively assessed for impairment
by grouping together receivables with similar risk
characteristics.
In assessing collective impairment the Group uses historical
trends of the probability of default, timing of recoveries and the
amount of loss incurred, adjusted for management's judgement as to
whether current economic and credit conditions are such that the
actual losses are likely to be greater or less than suggested by
historical trends.
An impairment loss in respect of a financial asset measured at
amortised cost is calculated as the difference between its carrying
amount and the present value of the estimated future cash flows
discounted at the asset's original effective interest rate. Losses
are recognised in profit or loss and reflected in an allowance
account against receivables. Interest on the impaired asset
continues to be recognised through the unwinding of the discount.
When a subsequent event causes the amount of impairment loss to
decrease, the decrease in impairment loss is reversed through
profit or loss.
ii) Non-financial Assets
The carrying amounts of the Group's non-financial assets, other
than inventories and deferred tax assets, are reviewed at each
reporting date to determine whether there is any indication of
impairment. If any such indication exists then the asset's
recoverable amount is estimated. Exploration and evaluation assets
are assessed for impairment in accordance with note 3(e).
An impairment loss is recognised if the carrying amount of an
asset or its cash-generating unit exceeds its estimated recoverable
amount. A cash-generating unit is the smallest identifiable asset
group that generates cash flows that are largely independent from
other assets and groups. Impairment losses are recognised in profit
or loss.
The recoverable amount of an asset or cash-generating unit is
the greater of its value in use and its fair value less costs to
sell. In assessing value in use, the estimated future cash flows
are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money
and the risks specific to the asset.
Impairment losses recognised in prior periods are assessed at
each reporting date for any indications that the loss has decreased
or no longer exists. An impairment loss is reversed if there has
been a change in the estimate used to determine the recoverable
amount. An impairment loss is reversed only to the extent that the
asset's carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation or amortisation, if
no impairment loss had been recognised.
(j) Employee Benefits
i) Short-term Employee Benefits
Short-term employee benefits for wages, salaries and fringe
benefits are measured on an undiscounted basis and expensed as the
related service is provided. A liability is recognised based on
remuneration wage and salary rates that the Group expects to pay as
at the reporting date as a result of past service provided by the
employee, if the obligation can be measured reliably.
ii) Long-term Employee Benefits
The Group's net obligation in respect of long-term service
benefits is the amount of future benefit that employees have earned
in return for their service in the current and prior periods. The
obligation is calculated using expected future increases in wage
and salary rates including related on-costs and expected settlement
dates, and is discounted using the high quality corporate bond rate
at the balance sheet date which have maturity dates approximating
to the terms of the Group's obligations.
iii) Share-based Payment Transactions
Options allow directors, employees and advisors to acquire
shares of the Company. The fair value of options granted is
recognised as an employee expense with a corresponding increase in
equity. The fair value is measured at grant date and spread over
the period during which the employees become unconditionally
entitled to the options. Options are also provided as part of
consideration for services by financiers and advisors. The fair
value of the options granted is measured using the Black-Scholes
Model, taking into account the terms and conditions upon which the
options were granted. The amount recognised as an expense is
adjusted to reflect the actual number of share options that vest
except where forfeiture is only due to share prices not achieving
the threshold for vesting.
When the Group grants options over its shares to employees of
subsidiaries, the fair value at grant date is recognised as an
increase in the investments in subsidiaries, with a corresponding
increase in equity over the vesting period of the grant.
(k) Product Revenue
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Revenue is recognised when the significant risks and rewards of
ownership have transferred to the buyer. Risks and rewards of
ownership are considered passed to the buyer at the time of
delivery of the product to the customer. Revenues from test
production are accounted for as revenue. All revenue is stated net
of the amount of Goods and Services Tax (GST).
(l) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, and
it is probable that an outflow of economic benefits will be
required to settle the obligation and when a reliable estimate can
be made of the amount of the obligation. Provisions are determined
by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money
and where appropriate, the risks specific to the liability.
Provisions are made for site rehabilitation of an oil and gas
field on an incremental basis during the life of the field (which
includes the field plant closure phase). Provisions include
reclamation, plant closure, waste site closure and monitoring
activities. These costs have been determined on the basis of
current costs, current legal requirements and current technology.
At each reporting date the rehabilitation provision is re-measured
to reflect any changes in the timing or amounts of the costs to be
incurred. Any such changes are dealt with on a prospective
basis.
(m) Leases
Payments made under operating leases are recognised in profit or
loss on a straight line basis over the term of the lease. Lease
incentives received are recognised as an integral part of the total
lease expense and are allocated over the lease term.
(n) Finance Income and Finance Costs
Finance income comprises interest income on funds invested.
Interest income is recognised as it accrues in profit or loss,
using the effective interest method. Finance costs comprise
interest expense on borrowings and unrealised foreign exchange
losses. Foreign currency gains and losses are reported on a net
basis as either finance income or finance cost depending on whether
foreign currency movements are in a net gain or net loss
position.
(o) Property, Plant and Equipment
i) Recognition and Measurement
Items of property, plant and equipment are measured at cost less
accumulated depreciation and any accumulated impairment losses. The
cost of self-constructed assets includes the cost of materials,
direct labour, the initial estimate, where relevant, of the costs
of dismantling and removing the items and restoring the site on
which they are located and an appropriate proportion of
overheads.
Gains and losses on disposal of an item of property, plant and
equipment are determined by comparing the proceeds from disposal
with the carrying amount of property, plant and equipment and are
recognised net within other income in profit or loss.
ii) Subsequent Costs
The cost of replacing part of an item of property, plant and
equipment is recognised in the carrying amount of the item if it is
probable that the future economic benefits embodied within the part
will flow to the Group and its cost can be measured reliably.
Ongoing repairs and maintenance is expensed as incurred.
iii) Depreciation
Depreciation is recognised in profit or loss using the reducing
balance method over the estimated useful life of the assets, with
the exception of software which is depreciated at prime cost. The
estimated useful lives in the current and comparative periods are
as follows:
Motor vehicles 4 to 7 years
Plant and equipment 2 to 7 years
Office furniture 2 to 10 years
Depreciation methods, useful lives and residual values are
reviewed and adjusted if appropriate, at each financial year
end.
(p) Income Tax
Income tax expense comprises current and deferred tax. Income
tax is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in
equity, or in other comprehensive income.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of
previous years.
In determining the amount of current and deferred tax the Group
takes into account the impact of uncertain tax positions and
whether additional taxes and interest may be due. The Group
believes that its accruals for tax liabilities are adequate for all
open tax years based on its assessment of many factors, including
interpretations of tax law and prior experience. This assessment
relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become
available that causes the Group to change its judgement regarding
the adequacy of existing tax liabilities; such changes to tax
liabilities will impact tax expense in the period that such a
determination is made.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be realised
simultaneously.
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for differences relating
to investments in subsidiaries to the extent that they probably
will not reverse in the foreseeable future. Deferred tax is
measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting
date.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and reduced to the extent that
it is no longer probable that the related tax benefit will be
realised.
The Company and its wholly-owned Australian resident entities
formed a tax-consolidated group with effect from 1 July 2004 and
are therefore taxed as a single entity from that date. The head
entity within the tax-consolidated group is Oilex Ltd.
Current tax expense/income, deferred tax liabilities and
deferred tax assets arising from temporary differences of the
members of the tax-consolidated group are recognised in the
separate financial statements of the members of the
tax-consolidated group using the 'separate taxpayer within group'
approach by reference to the carrying amounts of assets and
liabilities in the separate financial statements of each entity and
the tax values applying under tax consolidation.
(q) Goods and Services Tax and Other Indirect Taxes
Revenues, expenses and assets are recognised net of the amount
of good and services tax (GST) except:
-- When the GST incurred on a purchase of goods and services is
not recoverable from the taxation authority, in which case the GST
is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
-- Receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables
in the consolidated statement of financial position.
Cash flows are included in the Consolidated Statement of Cash
Flows on a gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable from,
or payable to, the taxation authority, is classified as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of
GST recoverable from, or payable to, the taxation authority.
(r) Government Grants
Grants from the government are recognised as a receivable at
their fair value when there is reasonable assurance that the grant
will be received and the Group will comply with all the attached
conditions.
Government grants that compensate the group for expenses
incurred are recognised as other income in profit or loss on a
systematic basis in the same period in which the expenses are
recognised.
Government grants relating to exploration and evaluation assets
are deducted against the carrying amount of these assets. The
grants are then recognised in profit or loss on a systematic basis
over the useful life of the asset.
(s) Earnings Per Share
Basic earnings per share is calculated as net profit or loss
attributable to members of the Group, divided by the weighted
average number of ordinary shares, adjusted for any bonus
element.
Diluted earnings per share is determined by adjusting the profit
attributable to ordinary shareholders and weighted average number
of shares outstanding for the effects of all dilutive potential
ordinary shares, which comprise share options granted to
employees.
(t) Segment Reporting
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components. All
operating segments' operating results are regularly reviewed by the
Group's Managing Director to make decisions about resources to be
allocated to the segment and assess its performance and for which
discrete financial information is available.
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
Segment results that are reported to the Managing Director
include items directly attributable to a segment as well as those
that can be allocated on a reasonable basis. Unallocated items
comprise mainly corporate assets (primarily the Company's
headquarters), head office expenses and income tax assets and
liabilities.
Segment capital expenditure is the total cost incurred during
the period to acquire exploration and development assets, property,
plant and equipment and intangible assets other than goodwill.
(u) New Standards and Interpretations Not Yet Adopted
The following standards, amendments to standards and
interpretations have been identified as those which may impact the
entity in the period of initial application. They are not yet
effective and have not been applied in preparing this financial
report.
-- AASB 9 Financial Instruments replaces the existing guidance
in AASB139 Financial Instruments: Recognition and Measurement.
AASB9 includes requirements in the areas of classification and
measurement, impairment, hedge accounting and derecognition. AASB 9
is effective for annual periods beginning on or after 1 January
2018 with early adoption permitted. The adoption of AASB 9 is not
expected to have a material impact on the Group's financial assets
or financial liabilities.
-- AASB 15 Revenue from Contracts with Customer provides a
single, principles based five-step model to be applied to all
contracts with customers. Guidance is provided for determining
whether, how much and when revenue is recognised. New disclosures
about revenue are also introduced. AASB 15 is effective for annual
periods beginning on or after 1 January 2017 with early adoption
permitted. The adoption of AASB 15 is not expected to have a
material impact on the Group's revenue.
-- AASB 2014-4 Clarification of Acceptable Methods of
Depreciation and Amortisation (amendments to AASB 116 and ASBB 138)
clarifies that a depreciation method that is based on revenue that
is generated by an activity that includes the use of an asset is
not appropriate for property, plant and equipment and is effective
for annual reporting periods beginning on or after 1 July 2016.
-- AASB 2014-3 Amendments to Australian Accounting Standards -
Accounting for Acquisitions of Interests in Joint Operations sets
out the guidance on the accounting for acquisition of interests in
joint operation in which the activity constitutes a business and is
effective for annual reporting periods beginning on or after 1 July
2016.
-- AASB 2015-1 Amendments to Australian Accounting Standards -
Annual Improvements to Australian Accounting Standards 2012 - 2014
Cycle - sets out clarification of amendments to existing accounting
standards.
The potential effect of these Standards is yet to be fully
determined, however it is not expected that these will have a
significant impact on the consolidated financial statements.
NOTE 4 - DETERMINATION OF FAIR VALUES
A number of the Group's accounting policies and disclosures
require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been
determined for measurement and/or disclosure purposes based on the
following methods. Where applicable, further information about the
assumptions made in determining fair values is disclosed in the
notes specific to that asset or liability.
Trade and Other Receivables
The fair value of trade and other receivables is estimated as
the present value of future cash flows, discounted at the market
rate of interest at the reporting date. Short term receivables with
no stated interest rate are measured at the original invoice amount
if the effect of discounting is immaterial.
Non-derivative Financial Liabilities
Fair value of trade and other payables, which is determined for
disclosure purposes, is calculated based on the present value of
future principal and interest cash flows, discounted at the market
rate of interest at the reporting date.
Share-based Payment Transactions
The fair value of options is measured using the Black-Scholes
Model. Measurement inputs include share price on measurement date,
exercise price of the instrument, expected volatility (based on
weighted average historic volatility adjusted for changes expected
due to publicly available information), weighted average expected
life of the instruments (based on historical experience and general
option holder behaviour), expected dividends and the risk-free
interest rate. Service and non-market performance conditions
attached to the transactions are not taken into account in
determining fair value.
NOTE 5 - OPERATING SEGMENTS
The Group has identified its operating segments based upon the
internal management reports that are reviewed and used by the
executive management team in assessing performance and that are
used to allocate the Group's resources. The operating segments
identified by management are based on the geographical location of
the business which are as follows: India, Australia, Joint
Petroleum Development Area and Indonesia. Each managed segment has
responsible officers that are accountable to the Managing Director
(the Group's chief operating decision maker).
The Group's executive management team evaluates the financial
performance of the Group and its segments principally with
reference to revenues, production costs, expenditure on exploration
evaluation and development costs.
The Group undertakes the exploration, development and production
of hydrocarbons and its revenue from the sale of oil and gas.
Information reported to the Group's chief operating decision maker
is on a geographical basis.
Financing requirements, finance income and expenses are managed
at a Group level. Other items include non-segmental revenue,
expenses and associated assets and liabilities not allocated to
operating segments, mostly comprising corporate assets and
expenses. It also includes expenses incurred by non-operating
segments, such as new ventures and those undergoing
relinquishment.
Major Customer
The Group's most significant customer, Indian Oil Corporation
Limited, in its capacity as nominee of the Government of India,
represents 98% of the Group's total revenues (2014:100%).
NOTE 5 - OPERATING SEGMENTS
India Australia JPDA (1) Indonesia Corporate (2) Consolidated
--------------- --------------------------- ------------------------ -------------------- -------------------- -------------------------- ---------------------------
2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
$ $ $ $ $ $ $ $ $ $ $ $
--------------- ------------- ------------ ------------ ---------- --------- --------- --------- --------- ------------ ------------ ------------- ------------
Revenue
External
revenue 290,294 250,620 - - - - - - - - 290,294 250,620
--------------- ------------- ------------ ------------ ---------- --------- --------- --------- --------- ------------ ------------ ------------- ------------
Cost of sales
Production
costs (467,938) (421,741) - - - - - - - - (467,938) (421,741)
Movement in
oil stocks
inventory (30,452) 6,534 - - - - - - - - (30,452) 6,534
Total cost of
sales (498,390) (415,207) - - - - - - - - (498,390) (415,207)
--------------- ------------- ------------ ------------ ---------- --------- --------- --------- --------- ------------ ------------ ------------- ------------
Gross
profit/(loss) (208,096) (164,587) - - - - - - - - (208,096) (164,587)
--------------- ------------- ------------ ------------ ---------- --------- --------- --------- --------- ------------ ------------ ------------- ------------
Exploration
expenditure
expensed (173,232) (1,396,013) (1,011,978) (672,276) (73,341) 58,644 (42,458) 291,609 (3,048) (638) (1,304,057) (1,718,674)
Impairment of
exploration
and
evaluation
expenditure (11,870,051) - - - - - - - - - (11,870,051) -
Depreciation (28,990) (26,732) - - - - - - (41,318) (58,447) (70,308) (85,179)
Share-based
payments (84,701) (15,959) - - - - - - (467,438) (383,153) (552,139) (399,112)
Other income - - - - - - - - 331,853 695,032 331,853 695,032
Other expenses (493,558) (24,652) - - (10,043) (39,007) (24,115) (22,401) (3,380,967) (2,794,676) (3,908,683) (2,880,736)
--------------- ------------- ------------ ------------ ---------- --------- --------- --------- --------- ------------ ------------ ------------- ------------
Reportable
segment
profit/(loss)
before income
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September 24, 2015 05:14 ET (09:14 GMT)
tax (12,858,628) (1,627,943) (1,011,978) (672,276) (83,384) 19,637 (66,573) 269,208 (3,560,918) (2,541,882) (17,581,481) (4,553,256)
--------------- ------------- ------------ ------------ ---------- --------- --------- --------- --------- ------------ ------------ ------------- ------------
Net finance
income 39,170 67,677
Foreign
exchange gain 153,787 732,968
Income tax
expense - -
------------- ------------
Loss for the
period (17,388,524) (3,752,611)
------------- ------------
Segment assets 31,017,658 29,837,428 383,582 431,174 294,264 305,703 - - 2,584,047 9,003,317 34,279,551 39,577,622
--------------- ------------- ------------ ------------ ---------- --------- --------- --------- --------- ------------ ------------ ------------- ------------
Segment
liabilities 5,525,769 5,023,492 - 203,880 7,900 5,522 285,530 157,996 1,856,401 832,490 7,675,600 6,223,380
--------------- ------------- ------------ ------------ ---------- --------- --------- --------- --------- ------------ ------------ ------------- ------------
There were no significant inter-segment transactions during the
year.
(1) Joint Petroleum Development Area.
(2) Corporate represents a reconciliation of reportable segment
revenues, profit or loss, assets and liabilities to the
consolidated figure.
note 6 - revenue and expenses
Loss from ordinary activities before income tax has been
determined after the following revenues and expenses:
Note 2015 2014
$ $
------------- ------------
(a) Revenue
Oil sales 290,294 250,620
------------- ------------
(b) Cost of Sales
Production costs (467,938) (421,741)
Movement in oil stocks inventory (30,452) 6,534
------------- ------------
(498,390) (415,207)
------------- ------------
(c) Other Income
Workers Compensation Proceeds 6,573 -
Government grants - research and development 325,280 695,032
------------- ------------
331,853 695,032
------------- ------------
(d) Exploration Expenditure
Exploration expenditure (1,304,057) (1,718,674)
Impairment of exploration and evaluation assets 12 (11,870,051) -
------------- ------------
(13,174,108) (1,718,674)
------------- ------------
(e) Administration Expenses
Employee benefits expense (919,352) (886,318)
Administration expense (2,158,811) (1,969,615)
------------- ------------
(3,078,163) (2,855,933)
------------- ------------
(f) Other Expenses
Depreciation expense 14 (70,308) (85,179)
Doubtful debts expense 10 (743,383) -
Well abandonment (52,950) -
Loss on disposal of other assets (34,187) (635)
Impairment of inventory - (24,168)
------------- ------------
(900,828) (109,982)
------------- ------------
(g) Foreign Exchange Gain
Foreign exchange gain/(loss) - realised 34,724 (971,504)
Foreign exchange gain on disposal of foreign subsidiary
transferred from foreign currency translation reserve - 1,800,029
Foreign exchange gain/(loss) - unrealised 119,063 (95,557)
------------- ------------
153,787 732,968
------------- ------------
NOTE 7 - INCOME TAX EXPENSE
Numerical reconciliation between tax expense and pre-tax
accounting loss:
2015 2014
$ $
------------- ------------
Loss before income tax (17,388,524) (3,752,611)
------------- ------------
Income tax using the domestic corporation tax rate of 30% (2014: 30%) (5,216,557) (1,125,783)
Effect of tax rate in foreign jurisdictions (1,627,757) (346,357)
Non-deductible expenses
Share-based payments 165,642 119,734
Foreign expenditure non-deductible 844,186 872,012
Reversal of interest income previously brought to account - (1,068,400)
Non-deductible foreign impairment expenditure (1,935,149) -
Other non-deductible expenses 365,073 424,840
Non-assessable income
Government grants - research and development (97,584) (208,510)
------------- ------------
(7,502,146) (1,332,464)
------------- ------------
Unrecognised deferred tax assets generated during the year and not
brought to account at balance date as realisation is not regarded as probable 7,502,146 1,332,464
------------- ------------
Income tax expense - -
------------- ------------
2015 2014
$ $
----------- -----------
Unrecognised deferred tax assets not brought to account at balance date as realisation is
not regarded as probable - temporary differences
Other 23,425,978 9,442,256
Losses available for offset against future taxable income 11,092,871 15,670,582
----------- -----------
Deferred tax asset not brought to account 34,518,849 25,112,838
----------- -----------
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September 24, 2015 05:14 ET (09:14 GMT)
The deductible temporary differences and tax losses do not
expire under current tax legislation.
The deferred tax asset not brought to account for the 2015
financial year will only be realised if:
-- It is probable that future assessable income will be derived
of a nature and of an amount sufficient to enable the benefit to be
realised;
-- The conditions for deductibility imposed by the tax
legislation continue to be complied with; and
-- The companies are able to meet the continuity of ownership
and/or continuity of business tests.
The foreign component of the deferred tax asset not brought to
account for the 2015 financial year will only be realised if the
Group derives future assessable income of a nature and of an amount
sufficient to enable the benefit to be realised and the Group
continues to comply with the deductibility conditions imposed by
the Income Tax Act 1961 (India) and there is no change in income
tax legislation adversely affecting the utilisation of the
benefits.
Tax Consolidation
In accordance with tax consolidation legislation the Company, as
the head entity of the Australian tax-consolidated group, has
assumed the deferred tax assets initially recognised by members of
the tax-consolidated group. Total tax losses of the Australian
tax-consolidated group, available for offset against future taxable
income are $7,117,062 (2014: $7,076,881).
NOTE 8 - LOSS PER SHARE
(a) Basic Loss Per Share
The calculation of basic loss per share at 30 June 2015 was
based on the loss for the period attributable to ordinary
shareholders of $17,388,524 (2014: loss of $3,752,611) and a
weighted average number of ordinary shares outstanding during the
financial year ended 30 June 2015 of 647,558,014 (2014:
447,617,093), calculated as follows:
2015 2014
$ $
------------ ------------
i) Loss Attributable to Ordinary Shareholders
Loss for the Period 17,388,524 3,752,611
------------ ------------
2015 2014
Number Number
------------ ------------
ii) Weighted Average Number of Ordinary Shares
Issued ordinary shares at 1 July 593,384,789 354,778,499
Effect of shares issued 47,534,497 92,837,930
Effect of share options exercised 6,638,728 664
------------ ------------
Weighted average number of ordinary shares at 30 June 647,558,014 447,617,093
------------ ------------
(b) Diluted Loss Per Share
The Company's potential ordinary shares, being its options
granted, are not considered dilutive as the conversion of these
options and rights would result in a decrease in the net loss per
share.
(c) Details of transactions involving ordinary shares between
the reporting date and the date of completion of the financial
statements
The Company has issued 502,520,960 ordinary shares since year
end. Refer note 29.
NOTE 9 - CASH AND CASH EQUIVALENTS
2015 2014
$ $
---------- ----------
Cash at bank and on hand 1,187,158 6,078,336
Short-term bank deposits - 1,377,236
---------- ----------
1,187,158 7,455,572
---------- ----------
The Group's exposure to interest rate risk and a sensitivity
analysis for financial assets and liabilities are disclosed in note
22.
NOTE 10 - TRADE AND OTHER RECEIVABLES
2015 2014
$ $
------------ ----------
Current
Joint venture receivables 6,061,381 2,250,556
Transfer to development assets (2,819,139) -
Provision for doubtful debts (782,919) -
Other receivables 1,116,222 1,433,932
------------ ----------
3,575,545 3,684,488
------------ ----------
Non-Current
Other receivables - India TDS (tax deducted at source) 98,958 80,585
------------ ----------
Joint venture receivables includes the Group's share of
outstanding cash calls and recharges owing from Joint Venture
partners. Other receivables includes research and development grant
income and GST refunds owing from the Australian Taxation
Office.
The Group considers that there is evidence of impairment if any
of the following indicators are present, financial difficulties of
the debtor, probability that the debtor will dispute amounts owing
and default or delinquency in payment (more than one year old). The
Group has been in discussions with its joint venture partner for
repayment of disputed and other amounts owing. As at 30 June 2015,
each receivable not relating to Cambay 77H has been assessed
individually for recovery and those deemed to have a low chance of
recovery, have been fully provided for in the current year. The
Group is continuing discussions in order to resolve the outstanding
issues and recover payment of the outstanding amounts, however due
to the age of the receivables amounts, cannot be certain of full
recovery.
Oilex Ltd, as operator of the Cambay Joint Venture, has incurred
expenditure related to Cambay 77H, which remains unpaid by its
joint venture partner. Oilex has been in discussions with its joint
venture partner to recover these amounts, however given the delay
in resolving these issues, Oilex has decided to reclassify this
expenditure from joint venture receivables to development assets,
as it represents costs paid by Oilex for which it is probable that
future economic benefits associated with this item will flow to the
Company. Refer note 13.
2015 2014
$ $
---------- -----
Movement in Provision for Doubtful Debts
Balance at 1 July - -
Provisions made during the year (743,383) -
Effect of movements in exchange rates (39,536) -
---------- -----
Balance at 30 June (782,919) -
---------- -----
NOTE 11 - INVENTORIES
2015 2014
$ $
---------- ----------
Oil on hand - net realisable value 14,034 38,493
Drilling inventory - net realisable value 1,235,448 1,009,137
---------- ----------
1,249,482 1,047,630
---------- ----------
There were no reversal of writedowns to net realisable
value.
NOTE 12 - EXPLORATION AND EVALUATION
2015 2014
$ $
------------- -----------
Balance at 1 July 26,320,952 22,553,085
Expenditure capitalised 3,503,305 4,521,508
Transfer to development assets (12,828,857) -
Impairment of exploration and evaluation expenditure (11,870,051) -
Effect of movements in foreign exchange rates 6,519,325 (753,641)
------------- -----------
Balance at 30 June 11,644,674 26,320,952
------------- -----------
During the 2015 financial year Cambay-73 and Cambay-77H were
designated as production wells (2014: undergoing evaluation and
designated as exploration and evaluation) and were therefore
transferred to development assets as at 30 June, 2015.
At the end of the financial year Cambay-76H was fully impaired,
as the condition of the well will not enable production of
hydrocarbons in future. As a consequence of this assessment
$11,870,051 (2014: Nil) was impaired at balance sheet date.
The remaining Cambay Field is currently under evaluation. It has
minimal production from ongoing well tests that is sold to a third
party.
Exploration and evaluation assets are reviewed at each reporting
date to determine whether there is any indication of impairment or
reversal of impairment, refer note 3(e). When a well does not
result in the successful discovery of potentially economically
recoverable reserves, or if sufficient data exists to indicate the
carrying amount of the exploration and evaluation asset is unlikely
to be recovered in full, either by development or sale, it is
impaired.
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NOTE 13 - DEVELOPMENT ASSETS
2015 2014
$ $
----------- -----
Cost
Balance at 1 July - -
Transfer from exploration 12,828,857 -
Transfer from joint venture receivables 2,819,139 -
Balance at 30 June 15,647,996 -
----------- -----
During the 2015 financial year Cambay-73 and Cambay-77H were
designated as production wells (2014: undergoing evaluation and
designated as exploration and evaluation) and were therefore
transferred to development assets as at 30 June 2015. Refer note 10
for details of the transfer from joint venture receivables.
NOTE 14 - PROPERTY, PLANT AND EQUIPMENT
Motor Office
Vehicles Plant and Equipment Furniture Total
$ $ $ $
---------- -------------------- ----------- ----------
Cost
Balance at 1 July 2013 12,146 1,747,456 151,337 1,910,939
Acquisitions - 64,480 - 64,480
Disposals - (2,762) - (2,762)
Currency translation differences (373) (9,245) (1,906) (11,524)
---------- -------------------- ----------- ----------
Balance at 30 June 2014 11,773 1,799,929 149,431 1,961,133
---------- -------------------- ----------- ----------
Balance at 1 July 2014 11,773 1,799,929 149,431 1,961,133
Acquisitions - 94,911 12,732 107,643
Disposals - (771,984) (32,146) (804,130)
Currency translation differences 2,683 69,621 13,694 85,998
---------- -------------------- ----------- ----------
Balance at 30 June 2015 14,456 1,192,477 143,711 1,350,644
---------- -------------------- ----------- ----------
Depreciation and Impairment Losses
Balance at 1 July 2013 10,737 1,542,089 78,394 1,631,220
Depreciation charge for the year 363 76,699 8,117 85,179
Disposals - (1,727) - (1,727)
Currency translation differences (339) (6,588) (1,353) (8,280)
---------- -------------------- ----------- ----------
Balance at 30 June 2014 10,761 1,610,473 85,158 1,706,392
---------- -------------------- ----------- ----------
Balance at 1 July 2014 10,761 1,610,473 85,158 1,706,392
Depreciation charge for the year 295 62,924 7,089 70,308
Disposals - (762,861) (6,482) (769,343)
Currency translation differences 2,481 50,471 10,184 63,136
---------- -------------------- ----------- ----------
Balance at 30 June 2015 13,537 961,007 95,949 1,070,493
---------- -------------------- ----------- ----------
Carrying amounts
At 1 July 2013 1,409 205,367 72,943 279,719
---------- -------------------- ----------- ----------
At 30 June 2014 1,012 189,456 64,273 254,741
---------- -------------------- ----------- ----------
At 1 July 2014 1,012 189,456 64,273 254,741
---------- -------------------- ----------- ----------
At 30 June 2015 919 231,470 47,762 280,151
---------- -------------------- ----------- ----------
NOTE 15 - TRADE AND OTHER PAYABLES
2015 2014
$ $
---------- ----------
Trade creditors 2,034,964 819,955
Accruals 1,638,051 1,956,120
---------- ----------
3,673,015 2,776,075
---------- ----------
NOTE 16 - EMPLOYEE BENEFITS
2015 2014
$ $
-------- --------
Employee entitlements 406,843 386,198
-------- --------
NOTE 17 - PROVISIONS
2015 2014
$ $
---------- ----------
Site Restoration and Well Abandonment
Balance at 1 July 3,061,107 3,158,220
Provisions utilised during the year (149,606) -
Effect of movements in exchange rates 684,241 (97,113)
---------- ----------
Balance at 30 June 3,595,742 3,061,107
---------- ----------
Current - 132,966
Non-current 3,595,742 2,928,141
---------- ----------
3,595,742 3,061,107
---------- ----------
NOTE 18 - ISSUED CAPITAL AND RESERVES
(d) Issued Capital
A reconciliation of the movement in capital and reserves for the
consolidated entity can be found in the Consolidated Statement of
Changes in Equity.
2015 2015 2014 2014
Number $ Number $
of Shares Issued Capital of Shares Issued Capital
------------ ---------------- ------------ ----------------
Shares
On issue 1 July - fully paid 591,034,789 148,980,743 354,778,499 135,371,619
Shares contracted to be issued - not fully paid (1) 2,350,000 269,329 - -
------------ ---------------- ------------ ----------------
Balance at the start of the period 593,384,789 149,250,072 354,778,499 135,371,619
Issue of share capital
Shares issued for cash - - 236,255,090 14,646,441
Shares issued for cash (1) 16,250,000 1,862,379 - -
Shares issued for cash (2) 60,975,610 2,500,000 - -
Exercise of listed options (3) 7,295,640 1,094,346 1,200 180
Capital raising costs (631,219) (917,497)
Underwriter and sub-underwriter options (2) (147,532) (120,000)
------------ ---------------- ------------ ----------------
On issue at the end of the period - fully paid 677,906,039 153,928,046 591,034,789 148,980,743
Shares contracted to be issued - not fully paid (1) - - 2,350,000 269,329
------------ ---------------- ------------ ----------------
Balance at the end of the period 677,906,039 153,928,046 593,384,789 149,250,072
------------ ---------------- ------------ ----------------
Number of Listed Options
Listed Options 2015 2014
------------- ------------
On issue at 1 July 195,892,111 151,893,311
Issue of listed options - 34,000,000
Issue of listed underwriter and sub-underwriter
options - 10,000,000
Exercise of listed options (3) (7,295,640) (1,200)
------------- ------------
188,596,471 195,892,111
------------- ------------
Refer notes following for additional information.
Refer note 19 for details of unlisted options.
Additional information of the issue of ordinary shares and
listed options:
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
(1) On 15 July 2014, the Company issued 18,600,000 shares at an
issue price of 6.3 pence per share (AUD$0.1146) via a draw down on
its Equity Financing facility with Darwin Strategic Limited raising
GBP1,171,800 (AUD$2,131,708) before expenses. Of the total issued
shares, 2,350,000 shares were contracted to be issued prior to 30
June 2014. All shares were issued and fully paid in July 2014.
(2) On 22 December 2014, the Company issued 60,975,610 new
ordinary shares under the fully underwritten Share Purchase Plan
announced 26 November 2014. This placement was priced at $0.041 per
share. Remuneration for the underwriters included five million
unlisted options exercisable at $0.07 with a three year expiry date
of 22 December 2017.
(3) 7,295,640 listed options with an exercise price of $0.15 had
been exercised as at 30 June 2015. The listed options have an
expiry date of 7 September 2015.
The Company does not have authorised capital or par value in
respect of its issued shares. All issued shares at 30 June 2015 are
fully paid.
The holders of ordinary shares are entitled to receive dividends
as declared from time to time and are entitled to one vote per
share at meetings of the Company.
(e) Option Reserve
The option reserve recognises the fair value of options issued
but not exercised. Upon the exercise, lapsing or expiry of options,
the balance of the option reserve relating to those options is
transferred to accumulated losses.
(f) Foreign Currency Translation Reserve
The foreign currency translation reserve comprises all foreign
currency differences arising from the translation of the financial
statements of foreign operations.
NOTE 19 - SHARE-BASED PAYMENTS
At 30 June 2015 the terms and conditions of unlisted options
granted by the Company to directors, employees, financiers and
advisors are as follows, whereby all options are settled by
physical delivery of shares:
Number of Contractual Life
Grant Date Instruments Vesting Conditions of Options
----------------- ------------- -------------------- -----------------
Key Management Personnel
7 July 2012 3,000,000 One year of service 3.5 years
28 October
2013 2,000,000 Vest immediately 3 years
27 June 2013 500,000 Vest immediately 3 years
27 June 2013 500,000 One year of service 4 years
11 November
2013 2,000,000 Vest immediately 3 years
11 November
2013 2,000,000 Vest immediately 4 years
29 April 2014 4,000,000 Vest immediately 5 years
5 August 2014 500,000 Vest immediately 3 years
5 August 2014 500,000 One year of service 4 years
25 August
2014 1,500,000 Vest immediately 3 years
25 August
2014 1,500,000 One year of service 4 years
16 February
2015 500,000 Vest immediately 3 years
16 February
2015 500,000 One year of service 4 years
Other Employees
1 August 2011
(1) 75,000 Vest immediately 4 years
10 March 2014 250,000 Vest immediately 3 years
10 March 2014 250,000 One year of service 4 years
5 August 2014 825,000 Vest immediately 3 years
5 August 2014 575,000 One year of service 4 years
Financiers and Advisors
8 March 2013 5,000,000 One year 3 years
5 December
2013 3,000,000 Vest immediately 3 years
22 December
2014 5,000,000 Vest immediately 3 years
Total Options 33,975,000
-------------
(1) Options issued under The Employee Performance Rights Plan
("Plan"). The Plan was last approved by shareholders at the
Company's AGM held on 26 November 2009. If the Company wanted to
continue to issue equity securities under the Plan beyond 26
November 2012 without affecting the Company's ability to issue up
to 15% of its total ordinary securities in any 12 month period, the
Plan needed to have been renewed. The Board of Directors decided
not to seek Shareholder approval to renew the Plan and therefore
allowed the plan to lapse.
The number and weighted average exercise prices of unlisted
share options are as follows:
Weighted Average Weighted Average
Exercise Price Number of Options Exercise Price Number of Options
2015 2015 2014 2014
------------------------ ------------------
Outstanding at 1 July $0.24 37,462,500 $0.28 27,537,500
Forfeited during the year $0.22 (2,250,000) $0.24 (3,500,000)
Lapsed during the year $0.35 (12,887,500) $0.50 (75,000)
Exercised during the year - - - -
Granted during the year $0.21 11,650,000 $0.17 13,500,000
------------------------ ------------------ ------------------------ ------------------
Outstanding at 30 June $0.19 33,975,000 $0.24 37,462,500
------------------------ ------------------ ------------------------ ------------------
Exercisable at 30 June $0.18 30,900,00 $0.24 37,212,500
------------------------ ------------------ ------------------------ ------------------
The unlisted options outstanding at 30 June 2015 have an
exercise price in the range of $0.10 to $0.63 (2014: $0.15 to
$0.63) and a weighted average remaining contractual life of 2.0
years (2014: 1.8 years).
No unlisted options were exercised during the years ended 30
June 2015 and 30 June 2014.
The fair value of unlisted options is calculated at the date of
grant using the Black-Scholes Model. Expected volatility is
estimated by considering historical volatility of the Company's
share price over the period commensurate with the expected term.
The following factors and assumptions were used in determining the
fair value of options on grant date:
Price of Risk Free
2015 Vesting Fair Value Exercise Shares on Expected Interest Dividend
Grant Date Date Expiry Date Per Option Price Grant Date Volatility Rate Yield
5 August 5 August 5 August
2014 2014 2017 $0.10 $0.25 $0.18 106.59% 2.50% -
5 August 5 August 5 August
2014 2015 2018 $0.11 $0.35 $0.18 106.59% 2.50% -
25 August 25 August 25 August
2014 2014 2017 $0.10 $0.25 $0.17 108.62% 2.50% -
25 August 25 August 25 August
2014 2015 2019 $0.12 $0.35 $0.17 108.62% 2.50% -
22 December 22 December 22 December
2014 2014 2017 $0.03 $0.10 $0.05 114.71% 2.50% -
16 February 16 February 16 February
2015 2015 2018 $0.02 $0.25 $0.04 119.84% 2.25% -
16 February 16 February 16 February
2015 2016 2019 $0.02 $0.35 $0.04 119.84% 2.25% -
------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- -----------
Price of Risk Free
2014 Vesting Fair Value Exercise Shares on Expected Interest Dividend
Grant Date Date Expiry Date Per Option Price Grant Date Volatility Rate Yield
28 October 28 October 4 November
2013 2013 2016 $0.02 $0.15 $0.05 90.00% 2.50% -
11 November 11 November 11 November
2013 2013 2016 $0.02 $0.15 $0.05 91.38% 2.50% -
11 November 11 November 11 November
2013 2013 2017 $0.02 $0.25 $0.05 91.38% 2.50% -
5 December 5 December 5 December
2013 2013 2016 $0.02 $0.15 $0.05 91.09% 2.50% -
29 April 29 April 29 April
2014 2014 2019 $0.05 $0.15 $0.07 99.39% 2.50% -
10 March 10 March 10 March
2014 2014 2017 $0.04 $0.15 $0.07 104.44% 2.50% -
10 March 10 March 10 March
2014 2015 2018 $0.03 $0.25 $0.07 104.44% 2.50% -
------------ ------------ ------------ ----------- ----------- ----------- ----------- ----------- -----------
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
The following share-based payments expense in relation to
unlisted options have been recognised in the Consolidated Statement
of Profit or Loss and Other Comprehensive Income:
2015 2014
$ $
-------- --------
Share options - equity settled
Directors and employees 552,139 292,502
Financiers and advisors - 106,610
Total share-based payments expense 552,139 399,112
-------- --------
NOTE 20 - RECONCILIATION OF CASH FLOWS FROM OPERATING
ACTIVITIES
2015 2014
$ $
------------- ------------
Net loss for the period (17,388,524) (3,752,611)
Depreciation 70,308 85,179
Loss on disposal of assets and materials 34,187 635
Impairment of exploration and evaluation
assets 11,870,051 -
Doubtful debts 743,383 -
Equity-settled share-based payments 552,139 399,112
Unrealised foreign exchange (loss)/gain (681,668) 981,274
Foreign exchange gain on disposal of foreign
subsidiary
transferred from foreign currency translation
reserve - (1,800,029)
Impairment of inventory - 24,168
Operating Loss Before Changes in Working
Capital and Provisions (4,800,124) (4,062,272)
Movement in trade and other payables 1,128,375 (810,290)
Movement in prepayments 138,068 (279,112)
Movement in trade and other receivables (1,618,022) (1,105,587)
Movement in provisions (157,115) 7,394
Movement in inventory (201,852) 260,115
Movement in employee benefits 28,153 143,958
Net Cash Used In Operating Activities (5,482,517) (5,845,794)
------------- ------------
NOTE 21 - CONSOLIDATED ENTITIES
Country of Ownership Interest %
Incorporation
----------------
2015 2014
-------------------------------------- ---------------- ----------- ----------
Parent Entity
Oilex Ltd Australia
Subsidiaries
Independence Oil and Gas Limited Australia 100 100
Admiral Oil and Gas Holdings Pty Ltd Australia 100 100
Admiral Oil and Gas (106) Pty Ltd Australia 100 100
Admiral Oil and Gas (107) Pty Ltd Australia 100 100
Admiral Oil Pty Ltd Australia 100 100
Oilex NL Holdings (India) Limited Cyprus 100 100
Oilex Oman Limited (1) Cyprus 100 100
Oilex (JPDA 06-103) Ltd Australia 100 100
Oilex (West Kampar) Limited Cyprus 100 100
-------------------------------------- ---------------- ----------- ----------
(1) Oilex Oman Limited, a dormant company registered in Cyprus,
was placed under voluntary liquidation and a liquidator appointed
on 19 June 2014. This entity has sufficient assets to fund the
liquidation process.
NOTE 22 - FINANCIAL INSTRUMENTS
(a) Financial Risk Management
The Group has exposure to the following risks from their use of
financial instruments:
(i) Credit Risk
(ii) Liquidity Risk
(iii) Market Risk
This note presents qualitative and quantitative information in
relation to the Group's exposure to each of the above risks and the
management of capital.
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework and
the development and monitoring of risk management policies. Risk
management policies are established to identify and analyse the
risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group's activities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations, and arises principally from the
Group's receivables from customers and joint ventures.
Trade and Other Receivables
The Group's exposure to credit risk is influenced mainly by the
individual characteristics of each customer. The demographics of
the Group's customer base, including the default risk of the
industry and country in which customers operate, has less of an
influence on credit risk.
The maximum exposure to credit risk is represented by the
carrying amount of each financial asset. The maximum exposure to
credit risk at the reporting date was:
2015 2014
$ $
---------- -----------
Cash and cash equivalents 1,187,158 7,455,572
Trade and other receivables - current 3,575,545 3,684,488
Trade and other receivables - non-current 98,958 80,585
4,861,661 11,220,645
---------- -----------
The Group's cash and cash equivalents are held with major banks
and financial institutions.
The Group's most significant customer, an Indian public sector
petroleum company, accounts for $144,644 of the trade and other
receivables carrying amount as 30 June 2015 (2014: $143,293). The
Group's gross share of outstanding cash calls and recharges owing
from joint venture partners and joint operations is $3,242,242
(2014: $2,250,556). The amounts owing from the Australian Taxation
Office total $334,415 (2014: $720,322).
Impairment Losses
The aging of the trade and other receivables at the reporting
date was:
2015 2014
$ $
---------- ----------
Consolidated Gross
Not past due 1,205,681 1,933,856
Past due 0-30 days 645,047 144,679
Past due 31-120 days 657,710 439,793
Past due 121 days to one year 817,468 400,057
More than one year 1,131,516 846,688
---------- ----------
4,457,422 3,765,073
Provision for doubtful debts (782,919) -
---------- ----------
Trade and other receivables net of provision 3,674,503 3,765,073
---------- ----------
Trade and other receivables net of provision
Current 3,575,545 3,684,488
Non-current 98,958 80,585
---------- ----------
3,674,503 3,765,073
---------- ----------
Receivable balances are monitored on an ongoing basis. The Group
may at times have a high credit risk exposure to its joint venture
parties arising from outstanding cash calls.
The Group considers that there is evidence of impairment if any
of the following indicators are present, financial difficulties of
the debtor, probability that the debtor will dispute amounts owing
and default or delinquency in payment (more than one year old). The
Group has been in discussions with its joint venture partner for
repayment of disputed and other amounts owing. As at 30 June 2015,
each receivable not relating to Cambay 77H has been assessed
individually for recovery and those deemed to have a low chance of
recovery, have been fully provided for in the current year. The
Group is continuing discussions in order to resolve the outstanding
issues and recover payment of the outstanding amounts, however due
to the age of the receivables amounts, cannot be certain of full
recovery.
(c) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its
liabilities when due without incurring unacceptable losses or
risking damage to the Group's reputation.
The Group manages liquidity by monitoring present cash flows and
ensuring that adequate cash reserves, financing facilities and
equity raisings are undertaken to ensure that the Group can meet
its obligations.
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
The table below analyses the Group's financial liabilities by
relevant maturity groupings based on the remaining period at the
balance date to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash
flows.
Contractual Cash Flows
------------------------------------------------------------
Carrying Amount Total 2 months or less 2 - 12 months Greater than
$ $ $ $ 1 year
$
---------------- ---------- ----------------- -------------- -------------
2015
Trade and other payables 3,673,015 3,673,015 3,673,015 - -
Total financial liabilities 3,673,015 3,673,015 3,673,015 - -
---------------- ---------- ----------------- -------------- -------------
2014
Trade and other payables 2,776,075 2,776,075 2,776,075 - -
Total financial liabilities 2,776,075 2,776,075 2,776,075 - -
---------------- ---------- ----------------- -------------- -------------
(d) Market Risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimising the return.
i) Currency risk
An entity is exposed to currency risk on sales and purchases
that are denominated in a currency other than the functional
currency of the entity. The currencies giving rise to this risk are
the United States dollar, Indian rupee and British pound.
The amounts in the table below represent the Australian Dollar
equivalent of balances in the Oilex Group Entities that are held in
a currency other than the functional currency in which they are
measured in that Group Entity. The exposure to currency risk at
balance date was as follows:
2015 2014
USD INR GBP USD INR GBP
In equivalents $ $
of Australian
dollar $ $ $ $
---------- ------------ --------- ---------- ---------- ---------
Cash and cash
equivalents 277,769 195,677 27,586 2,770,249 283,841 985,353
Trade and other
receivables
Current 41,878 1,436,845 - 92,746 311,268 -
Non-current 98,958 - - 80,585 - -
Prepayments 376,545 - - 489,956 - -
Trade and other
payables (629,062) (1,138,810) (84,793) (2,234) (362,391) (17,448)
---------- ------------ --------- ---------- ---------- ---------
Net balance sheet
exposure 166,088 493,712 (57,207) 3,431,302 232,718 967,905
---------- ------------ --------- ---------- ---------- ---------
The following significant exchange rates applied during the
year:
Average Rate Reporting Date Spot Rate
AUD 1 2015 2014 2015 2014
------- ------- ------- ------------- ------------
USD 0.8382 0.9187 0.7680 0.9431
INR 51.917 56.449 48.979 56.652
GBP 0.5307 0.5657 0.4885 0.5512
------- ------- ------- ------------- ------------
Foreign Currency Sensitivity
A 10% strengthening/weakening of the Australian dollar against
the following currencies at 30 June would have (increased)/
decreased the loss by the amounts shown below. This analysis
assumes that all other variables, in particular interest rates,
remain constant. The analysis is performed on the same basis for
2014.
2015 2014
$ $
--------- ----------
10% Strengthening
United States dollars (USD) 18,454 381,256
Indian rupees (INR) 54,857 25,858
British Pounds (GBP) (6,356) 107,545
10% Weakening
United States dollars (USD) (15,099) (311,937)
Indian rupees (INR) (44,883) (21,156)
British Pounds (GBP) 5,201 (87,991)
Interest rate risk
At the reporting date the interest rate profile of the Group's
interest-bearing financial instruments was:
Carrying Amount
2015 2014
$ $
---------- ----------
Fixed Rate Instruments
Financial assets (short-term deposits
included in trade receivables) 188,959 1,377,236
Variable Rate Instruments
Financial assets (cash at bank) 1,187,158 6,078,336
---------- ----------
Fair Value Sensitivity Analysis for Fixed Rate Instruments
The Group does not account for any fixed rate financial
instruments at fair value through profit or loss so a change in
interest rates at the reporting date would not affect profit or
loss or equity.
Cash Flow Sensitivity Analysis for Variable Rate Instruments
An increase of 100 basis points in interest rates at the
reporting date would have decreased the loss by the amounts shown
below. A decrease of 100 basis points in interest rates at the
reporting date would have had the opposite impact by the same
amount. This analysis assumes that all other variables, in
particular foreign currency rates, remain constant. The analysis is
performed on the same basis for 2014.
2015 2014
$ $
------- -------
Impact on profit or loss 11,872 60,783
------- -------
ii) Other market price risks
The Group had no financial instruments with exposure to other
price risks at June 2015 or June 2014.
Equity Price Sensitivity
The Group had no exposure to equity price sensitivity at June
2015 or June 2014.
(e) Capital Risk Management
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the business. The capital structure of the
Group consists of equity attributable to equity holders of the
Company, comprising issued capital, reserves and accumulated losses
as disclosed in the consolidated statement of changes in
equity.
(f) Fair Values of Financial Assets and Liabilities
The net fair values of financial assets and liabilities of the
Group approximate their carrying values. The Group has no
off-balance sheet financial instruments and no amounts are
offset.
NOTE 23 - AUDITORS' REMUNERATION
2015 2014
$ $
Audit and review services
Auditors of the Company - KPMG
Audit and review of financial reports (KPMG Australia) 114,080 125,689
Audit of Joint Operations operated by Oilex Ltd
Operator proportion only (KPMG Australia) 1,878 1,800
Audit and review of financial reports (KPMG related practices) 20,408 27,921
-------- --------
136,366 155,410
Other Auditors
Audit and review of financial reports (India Statutory) 6,398 6,108
-------- --------
142,764 161,518
Other services
Auditors of the Company - KPMG
Taxation compliance services (KPMG Australia) 18,600 46,750
Corporate services (KPMG Australia) 6,132 10,654
Taxation compliance services (KPMG related practices) 19,255 19,469
-------- --------
43,987 76,873
Other Auditors
Taxation compliance services (India Statutory) 8,530 8,144
-------- --------
52,517 85,017
-------- --------
NOTE 24 - OPERATING LEASES
Leases as Lessee
2015 2014
$ $
-------- --------
Within one year 161,280 127,815
One year or later and no later than five 229,647 -
years
-------- --------
390,927 127,815
-------- --------
(MORE TO FOLLOW) Dow Jones Newswires
September 24, 2015 05:14 ET (09:14 GMT)
Non-cancellable operating lease rentals are payable as
follows:
The Group leases its head office premises at Ground Floor, 44a
Kings Park Road, West Perth under an operating lease. The current
lease has a three year term, with an option to renew for a further
two years.
2015 2014
$ $
-------- --------
Operating lease rentals expensed during the financial year 179,749 164,822
-------- --------
The Group leases office premises in Dili (Timor-Leste) and
Gujarat (India) under operating leases. The leases run for periods
of between 3 months and 1 year, with an option to renew the lease
for a further term after that date.
NOTE 25 - JOINT ARRANGEMENTS
The Group's interests in joint arrangements as at 30 June 2015
are detailed below. Principal activities are oil and gas
exploration, evaluation, development and production.
(a) Joint Operations Interest
2015 2014
Permit % %
------------------- ------------------------------ --------- ---------
OFFSHORE
JPDA 06-103 Timor-Leste/Australia (JPDA) 10.0 10.0
ONSHORE
Cambay Field India (Cambay Basin) 45.0 45.0
Bhandut Field India (Cambay Basin) 40.0 40.0
Sabarmati Field India (Cambay Basin) 40.0 40.0
West Kampar Block Indonesia (Central Sumatra) 67.5 (1) 67.5 (1)
------------------- ------------------------------ --------- ---------
(1) Oilex (West Kampar) Limited is entitled to have assigned an
additional 22.5% to its holding of 45% through exercise of its
rights under a Power of Attorney granted by PT Sumatera Persada
Energi ("SPE"), following the failure by SPE to repay funds due.
The assignment has been provided to BPMigas (now SKKMigas), the
Indonesian Government regulator, and has not been approved or
rejected. If Oilex is paid the funds due then it will not pursue
this assignment.
(b) Joint Operations
The aggregate of the Group's interests in all joint operations
is as follows:
2015 2014
$ $
Current Assets
Cash and cash equivalents 335,777 430,402
Trade and other receivables 3,127,048 433,495
Inventory 1,235,448 1,009,137
Prepayments 166,450 73,014
------------ ------------
Total current assets 4,864,723 1,946,048
------------ ------------
Non-Current Assets
Exploration and evaluation 7,587,300 22,422,556
Development assets 14,835,248 -
Property, plant and equipment 190,139 111,892
------------ ------------
Total non-current assets 22,612,687 22,534,448
------------ ------------
Total assets 27,477,410 24,480,496
------------ ------------
Current Liabilities
Trade and other payables (1,606,389) (1,728,058)
------------ ------------
Total liabilities (1,606,389) (1,728,058)
------------ ------------
Net assets 25,871,021 22,752,438
------------ ------------
(c) Joint Operations Commitments
The aggregate of the Group's commitments attributable to joint
operations is as follows:
2015 2014
$ $
------ ----------
Exploration expenditure commitments - 2,214,433
------ ----------
NOTE 26 - EXPENDITURE COMMITMENTS
Exploration Expenditure Commitments
In order to maintain rights of tenure to exploration permits,
the Group is required to perform exploration work to meet the
minimum expenditure requirements specified by various state and
national governments. These obligations are subject to
renegotiation when application for an exploration permit is made
and at other times. These obligations are not provided for in the
financial report. The expenditure commitments are currently
estimated to be payable as follows:
2015 2014
$ $
----------- -----------
Within one year 880,000 4,094,433
One year or later and no later than five years 12,050,000 10,250,000
----------- -----------
12,930,000 14,344,433
----------- -----------
The commitments include the Canning Basin Exploration Permit
Applications. The formal exploration permit period commences once
Native Title is granted.
When obligations expire, are re-negotiated or cease to be
contractually or practically enforceable, they are no longer
considered to be a commitment.
Further expenditure commitments for subsequent permit periods
are contingent upon future exploration results. These cannot be
estimated and are subject to renegotiation upon expiry of the
existing exploration leases.
Capital Expenditure Commitments
The Group had no capital commitments as at 30 June 2015 (2014:
Nil).
NOTE 27 - RELATED PARTIES
Identity of Related Parties
The Group has a related party relationship with its subsidiaries
(refer note 21), joint operations (refer note 25) and with its key
management personnel.
Key Management Personnel
The following were key management personnel of the Group at any
time during the financial year and unless otherwise indicated were
key management personnel for the entire period:
Non-Executive Directors Position
-------------------------- --------------------------------------------------------------------------
Max Cozijn Non-Executive Chairman
Sundeep Bhandari Non-Executive Vice Chairman
Jeffrey Auld Non-Executive Director (appointed 27 January 2015)
Bruce McCarthy Non-Executive Director (resigned 18 November 2014)
Executive Directors Position
-------------------------- --------------------------------------------------------------------------
Ronald Miller Managing Director
Executives Position
-------------------------- --------------------------------------------------------------------------
Chris Bath Chief Financial Officer and Company Secretary (appointed 24 October 2014)
Pete Bekkers Chief Geoscientist
Jayant Sethi Head - India Assets (appointed 16 February 2015)
Robert Ierace Chief Financial Officer and Company Secretary (resigned 24 October 2014)
-------------------------- --------------------------------------------------------------------------
Key Management Personnel Compensation
Key management personnel compensation (with the 2014 comparative
re-presented to reflect current year key management personnel)
comprised the following:
2015 2014
$ $
---------- ----------
Short-term employee benefits 1,589,452 1,377,936
Other long-term benefits 35,476 45,968
Non monetary benefits 20,550 5,670
Post-employment benefits 70,553 117,319
Termination benefits 24,373 -
Share-based payments 404,960 276,957
---------- ----------
2,145,364 1,823,850
---------- ----------
Individual Directors' and Executives' Compensation
Disclosures
Information regarding individual Directors' and Executives'
compensation is provided in the Remuneration Report section of the
Directors' Report. Apart from the details disclosed in this note,
or in the Remuneration Report, no Director has entered into a
material contract with the Company since the end of the previous
financial year and there were no material contracts involving
Directors' interests existing at year end.
Key Management Personnel Transactions with the Company or its
Controlled Entities
A number of key management personnel, or their related parties,
hold positions in other companies that result in them having
control or significant influence over these companies.
A number of these companies transacted with the Group during the
year. The terms and conditions of these transactions were no more
favourable than those available, or which might reasonably be
expected to be available, on similar transactions with non-key
management personnel related entities on an arm's length basis.
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The aggregate value of these transactions and outstanding
balances related to key management personnel and entities over
which they have control or significant influence were as
follows:
Transactions Group's Share Balance Outstanding
Value
Key Management Transaction 2015 2014 2015 2014 2015 2014
Personnel
----------------
$ $ $ $ $ $
---------------- -------------- -------- -------- -------- -------- ---------- ----------
Mr R L Miller Management
(1) services 451,521 256,000 451,521 256,000 81,104 38,000
Mr S Bhandari Consultancy
(2) services 161,059 244,911 77,845 115,108 17,895 53,064
Mr S Bhandari Introduction
(3) fee - 108,849 - 108,849 - -
---------------- -------------- -------- -------- -------- -------- ---------- ----------
(1) Oilex used the services of La Jolla Enterprises Pty Ltd, of
which Mr Miller is an employee. Rates charged were at market rates
and have been included in the remuneration of key management
personnel disclosure.
(2) Oilex used the services of India Hydrocarbons Limited (IHL)
of which Mr Bhandari is a principal director and shareholder. The
gross monthly fee for services of US$7,500 (which remains unchanged
since 1 July 2010), was augmented last financial year by US$15,000
per month to cover the additional responsibilities undertaken by
IHL following the departure of the India based Chief Operating
Officer in October 2013 and this work ceased on 30 September 2014.
Gross fees have been included in the remuneration of key management
personnel disclosures.
The Group's share of the consultancy services of US$7,500 gross
per month, is 50% with the balance of 50% being payable by the
joint operations. The Group's share of the additional consultancy
services of US$15,000 gross per month was 45% with the balance of
55% being payable by the joint operations.
(3) Magna Energy Limited was introduced to Oilex in the previous
financial year by IHL, who assisted the Company in managing the
negotiation of the Sale and Purchase Agreement (SPA), initially for
the partial sale of its Cambay asset. This was subsequently
converted into equity under the terms of the SPA. This introduction
fee was assessed on normal commercial terms and was at an arm's
length basis
Other Related Party Transactions
2015 2014
$ $
------ --------
India Hydrocarbons Limited
Options granted - 189,289
La Jolla Enterprises Pty Ltd
Options granted - 63,550
No unlisted options were issued to related parties during the
financial year ended 30 June 2015.
NOTE 28 - CONTINGENCIES
The Directors are of the opinion that provisions are not
required in respect of these matters, as it is not probable that a
future sacrifice of economic benefits will be required or the
amount is not capable of reliable measurement.
(a) Oilex Ltd has issued guarantees in relation to the lease of
the current corporate office in West Perth, vacated office in
Leederville, as well as corporate credit cards. The bank guarantees
amount to AUD$186,645.
(b) In November 2006, Oilex (JPDA 06-103) Ltd (Operator) and the
Joint Venture parties entered into a Production Sharing Contract
(PSC) with the Designated Authority for JPDA 06-103 and the PSC was
signed in January 2007 (effective date 15 January 2007). In January
2011 after the completion of the first two wells, the Autoridade
Nacional do Petroleo (ANP) approved the JPDA 06-103 Joint Venture's
proposal to vary the PSC work programme. Under the approved
variation the decision to drill the fourth commitment well on the
JPDA 06-103 PSC would be at the discretion of the Joint Venture if
the third well was unsuccessful. The ANP had also agreed that the
PSC may be relinquished if the Operator and the Joint Venture
parties decided not to proceed with any further exploration after
the third well. On 12 July 2013 the Operator, on behalf of the
Joint Venture participants, submitted to the ANP, a request to
terminate the PSC by mutual agreement in accordance with its terms
and without penalty or claim due to the ongoing uncertainty in
relation to security of tenure. This request required the consent
of the Timor Sea Designated Authority.
The ANP with prior consent of the Joint Commission for the Joint
Petroleum Development Area under the Timor Sea Treaty, initially
advised on 15 January 2014 that it had suspended the expiry date of
the PSC from 15 January 2014 to 15 April 2014 for the purpose of
completing an assessment and to continue discussions with the Joint
Venture partners. The ANP subsequently granted successive three
months extensions to the PSC.
On 15 May 2015 the ANP issued a Notice of Intention to Terminate
and on 15 July 2015 issued a Notice of Termination and Demand for
Payment (Notice). The demand for payment of the monetary claim of
US$17,018,790 is the ANP's estimate of the cost of exploration
activities not undertaken in 2013, as well as certain local content
obligations set out in the PSC. Since Oilex (JPDA 06-103) Limited
has a 10% equity interest in the PSC, its share of the monetary
claim is US$1,701,879. The company has not provided for a monetary
settlement in its financial statements. As the Joint Venture has
made significant overpayments in the work programme, it is of the
opinion that the excess expenditure should be included as part of
any financial assessment incorporated in the termination process.
The Joint Venture continues to discuss the financial liability of
the Contractor upon termination with the ANP.
NOTE 29 - SUBSEQUENT EVENTS
On 7 July 2015 the Company announced a two tranche placement and
an underwritten rights issue to raise $30 million. Tranche One
utilised the existing placement capacity under ASX Listing Rule 7.1
with 45,393,463 shares being issued at $0.041 to raise $1,861,132
before expenses. Tranche One was completed on 15 July 2015. The
fully underwritten rights issue closed on 28 July 2015, with a
total of 169,476,565 shares being issued at $0.041 to raise
$6,948,539 before expenses.
At a general meeting on 12 August 2015, shareholders approved
the issue of 287,303,619 Tranche Two shares.
On 27 July 2015 the Company issued 341,300 shares on the
exercise of listed options with an exercise price of $0.15, and on
7 September 2015 a further 6,313 shares on the exercise of listed
options were issued.
Details of transactions involving ordinary shares between the
reporting date and the date of completion of the financial
statements are as follows:
Gross Amount
Number of Number of Raised
Allotment Date Shares Shares
--------------------------------- ------------ ------------ -------------
15 July 2015 - first tranche
placement 45,393,463 1,861,132
27 July 2015 - conversion of
$0.15 listed options 341,300 51,195
05 August 2015 - rights issue 16,235,098
06 August 2015 - rights issue
shortfall 153,241,467
Total of the rights issue 169,476,565 6,948,539
18 August 2015 - second tranche
placement 287,303,319 11,779,436
07 September 2015 - conversion
of $0.15 listed options 6,313 947
Total 502,520,960 20,641,249
--------------------------------- ------------ ------------ -------------
In addition, shareholders approved the issue of 124,019,608 Zeta
Resources Limited (Zeta) deferred shares at a price of A$0.0418 to
raise approximately $5,184,020 before expenses and the issue of
A$4,243,500 of 20 year, zero coupon unsecured convertible loan
notes to Zeta, which will be convertible into shares at Zeta's
option at any time, subject to compliance with Australian law, at a
conversion price of A$0.0418 per share. The issue of these
convertible notes will occur contemporaneously with the issue to
Zeta of 124,019,608 new ordinary shares under Tranche Two, to be
settled no later than 12 November 2015.
On 15 July 2015 the Autoridade Nacional do Petroleo (ANP)
advised that it had terminated the PSC JPDA 06-103 as at that date,
following a request in 2014, by Oilex (JPDA 06-103) Ltd, on behalf
of the Joint Venture participants, to terminate the PSC by mutual
agreement in accordance with its terms and without penalty or claim
due to the ongoing uncertainty in relation to security of tenure.
The Notice of Termination included a demand for payment of the
monetary claim, previously advised, against the Joint Venture for
payment of the estimated cost of exploration activities not
undertaken in 2013 and certain local content obligations set out in
the PSC. The total amount sought to be recovered by the ANP in the
Notice was US$17,018,790 (Oilex (JPDA 06-103) Ltd share
US$1,701,879). Oilex (JPDA 06-103) Ltd has not provided for a
monetary settlement in its financial statements. As the Joint
Venture has made significant overpayments in the work programme, it
is of the opinion that the excess expenditure should be included as
part of any financial assessment incorporated in the termination
process. The Joint Venture continues to discuss the financial
liability of the Contractor upon termination with the ANP. Refer
note 28.
There were no other significant subsequent events occurring
after year end.
NOTE 30 - PARENT ENTITY DISCLOSURE
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As at, and throughout, the financial year ended 30 June 2015 the
parent entity of the Group was Oilex Ltd.
2015 2014
$ $
Result of the Parent Entity
Loss for the year (7,793,740) (5,937,927)
Other comprehensive income (4,338,245) 612,202
-------------- --------------
Total comprehensive income/(loss)
for the year (12,131,985) (5,325,725)
-------------- --------------
Financial Position of the Parent
Entity at Year End
Current assets 7,012,935 12,412,505
Total assets 31,547,796 37,015,550
Current liabilities 3,006,980 2,114,422
Total liabilities 5,129,243 3,842,659
Net Assets 26,418,553 33,172,891
-------------- --------------
Total Equity of the Parent Entity
Comprising of:
Issued capital 153,928,046 149,250,072
Option reserve 2,342,059 4,089,004
Foreign currency translation reserve (1,064,413) 3,273,830
Accumulated losses (128,787,139) (123,440,015)
-------------- --------------
Total Equity 26,418,553 33,172,891
-------------- --------------
Parent Entity Contingencies
The directors are of the opinion that provisions are not
required in respect to these matters, as it is not probable that a
future sacrifice of economic benefits will be required or the
amount is not capable of reliable measurement.
(a) Oilex Ltd has issued guarantees in relation to the lease of
corporate offices, as well as corporate credit cards. The bank
guarantees amount to AUD$186,645. An equal amount is held in cash
and cash equivalents as security by the banks.
(b) Oilex Ltd on 7 November 2006 issued a Deed of Parent Company
Performance Guarantee in relation to the Production Sharing
Contract entered into with the Timor Sea Designated Authority dated
15 November 2006.
Parent entity capital commitments for acquisition of property
plant and equipment
Oilex Ltd had no capital commitments as at 30 June 2015 (2014:
Nil).
Parent entity guarantee (in respect of debts of its
subsidiaries)
Other than the Performance Guarantee disclosed as parent entity
contingencies above, Oilex Ltd has issued no guarantees in respect
of debts of its subsidiaries.
DIRECTORS' DECLARATION
(1) In the opinion of the Directors of Oilex Ltd (the "Company"):
(a) the consolidated financial statements and notes set out on
pages 39 to 78 and the Remuneration Report in the Directors'
Report, set out on pages 26 to 37, are in accordance with the
Corporations Act 2001, including:
i) giving a true and fair view of the Group's financial position
as at 30 June 2015 and of its performance for the financial year
ended on that date; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) there are reasonable grounds to believe that the Company
will be able to pay its debts as and when they become due and
payable.
(2) The Directors have been given the declarations required by
Section 295A of the Corporations Act 2001 from the Managing
Director and Chief Financial Officer for the financial year ended
30 June 2015.
(3) The Directors draw attention to note 2(a) to the
consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors.
Mr Max Cozijn Mr Ronald Miller
Chairman Managing Director
West Perth
Western Australia
24 September 2015
INDEPENDENT AUDIT REPORT
KPMG
Independent auditor's report to the members of Oilex Ltd
Report on the financial report
We have audited the accompanying financial report of Oilex Ltd
(the company), which comprises the consolidated statement of
financial position as at 30 June 2015, and consolidated statement
of profit or loss and other comprehensive income, consolidated
statement of changes in equity and consolidated statement of cash
flows for the year ended on that date, notes 1 to 30 comprising a
summary of significant accounting policies and other explanatory
information and the directors' declaration of the Group comprising
the company and the entities it controlled at the year's end or
from time to time during the financial year.
Directors' responsibility for the financial report
The directors of the company are responsible for the preparation
of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the
financial report that is free from material misstatement whether
due to fraud or error. In note 2(a), the directors also state, in
accordance with Australian Accounting Standard AASB 101
Presentation of Financial Statements, that the financial statements
of the Group comply with International Financial Reporting
Standards.
Auditor's responsibility
Our responsibility is to express an opinion on the financial
report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. These Auditing Standards
require that we comply with relevant ethical requirements relating
to audit engagements and plan and perform the audit to obtain
reasonable assurance whether the financial report is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial report. The
procedures selected depend on the auditor's judgement, including
the assessment of the risks of material misstatement of the
financial report, whether due to fraud or error. In making those
risk assessments, the auditor considers internal control relevant
to the entity's preparation of the financial report that gives a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal
control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting
estimates made by the directors, as well as evaluating the overall
presentation of the financial report.
We performed the procedures to assess whether in all material
respects the financial report presents fairly, in accordance with
the Corporations Act 2001 and Australian Accounting Standards, a
true and fair view which is consistent with our understanding of
the Group's financial position and of its performance.
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative ("KPMG International"), a Swiss
entity.
Liability limited by a scheme approved under Professional
Standards Legislation.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our audit
opinion.
Independence
In conducting our audit, we have complied with the independence
requirements of the Corporations Act 2001.
Auditor's opinion
In our opinion:
(a) the financial report of the Group is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Group's financial
position as at 30 June 2015 and of its performance for the year
ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001.
(b) the financial report also complies with International
Financial Reporting Standards as disclosed in note 2(a).
Report on the remuneration report
We have audited the Remuneration Report included in pages 26 to
37 of the directors' report for the year ended 30 June 2015. The
directors of the company are responsible for the preparation and
presentation of the remuneration report in accordance with Section
300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the remuneration report, based on our audit conducted
in accordance with auditing standards.
Auditor's opinion
In our opinion, the remuneration report of Oilex Ltd for the
year ended 30 June 2015 complies with Section 300A of the
Corporations Act 2001.
KPMG
Brent Steedman
Partner
Perth
24 September 2015
SHAREHOLDER INFORMATION
Shareholder information as at 8 September 2015
Additional information required by the ASX Limited Listing Rules
and not disclosed elsewhere in this report is set out below.
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(1) Shareholding
(a) Distribution of share and option holdings:
Size of holding Number of Number of
shareholders unlisted option
holders
----------------- -------------- -----------------
1 - 1,000 297 -
1,001 - 5,000 527 -
5,001 - 10,000 380 -
10,001 - 100,000 997 3
100,001 and over 540 18
-------------- -----------------
Total 2,741 21
-------------- -----------------
(b) Of the above total 1,323 ordinary shareholders hold less than a marketable parcel.
(c) Voting Rights:
The voting rights attached to the ordinary shares are governed
by the Constitution.
On a show of hands every person present who is a Member or
representative of a Member shall have one vote and on a poll, every
Member present in person or by proxy or by attorney or duly
authorised representative shall have one vote for each share held.
None of the options or performance rights give an entitlement to
voting rights.
(2) The name of the Company Secretary is Mr C Bath.
(3) The address of the principal registered office is Ground
Floor, 44a Kings Park Road, West Perth, Western Australia 6005,
Australia, Telephone +61 8 9485 3200.
(4) Register of Securities
The register of securities listed on the Australian Securities
Exchange is held by Link Market Services Limited, Central Park,
Level 4, 152 St Georges Terrace, Perth, Western Australia 6000,
Australia, Telephone +61 8 9211 6670.
The register of securities listed on the Alternative Investment
Market of the London Stock Exchange is held by Computershare
Investor Services PLC, PO Box 82, The Pavilions, Bridgwater Road,
Bristol BS13 8AE, United Kingdom, Telephone +44 870 702 003.
(5) Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the
Company on all Member Exchanges of the Australian Securities
Exchange and the Alternative Investment Market of the London Stock
Exchange (AIM) and trades under the symbol OEX.
(6) Detailed schedules of exploration and production permits
held are included in the Business Review.
(7) Directors' interest in share capital and listed options are
disclosed in the Directors' Report.
(8) Unquoted Securities - Options
Total unlisted options on issue are 33,150,000.
Mr Miller (Managing Director) holds a total of 6,000,000 options
as at 8 September 2015 which represents 18% of all outstanding
unlisted options.
There is currently no on-market buy-back in place.
Twenty Largest Shareholders
% of issued
Shareholders Shares Held capital
---------------------------------------- -------------- ------------
Zeta Resources Limited 121,323,567 10.28
Magna Energy Limited 119,825,833 10.15
Standard Life Investments (Holdings)
Limited 101,760,000 # 8.62
Curmi and Partners Ltd 73,604,878 6.24
Barclayshare Nominees Limited 53,035,272 # 4.49
TD Direct Investing Nominees (Europe)
Limited <SMKTNOMS> 35,468,237 # 3.00
J P Morgan Nominees Australia Limited 23,136,793 1.96
Westhouse Securities Limited <2037800> 20,833,554 # 1.76
James Capel (Nominees) Limited 19,727,986 # 1.67
Hargreaves Lansdown (Nominees) Limited
<VRA> 19,634,734 # 1.66
HSDL Nominees Limited 18,252,373 # 1.55
Hargreaves Lansdown (Nominees) Limited
<15942> 18,162,431 # 1.54
Vidacos Nominees Limited <FGN> 13,590,000 # 1.15
Investor Nominees Limited <WRAP> 12,856,921 # 1.09
HSBC Custody Nominees (Australia)
Limited 12,359,721 1.05
TD Direct Investing Nominees (Europe)
Limited SMKTISAS> 11,905,300 # 1.01
Hargreaves Lansdown (Nominees) Limited
<HLNOM> 11,297,595 # 0.96
Roy Nominees Limited 9,897,623 # 0.84
Rock (Nominees) Limited 9,892,785 # 0.84
HSDL Nominees Limited <MAXI> 9,268,589 # 0.79
Total 715,834,192 60.65
Total issued shares as at 8 September
2015 1,180,426,999 100.00
---------------------------------------- -------------- ------------
Substantial shareholders as disclosed in the most recent
substantial shareholder notices given to the company are as
follows:
%
Zeta Resources Limited 121,232,567 10.28
Magna Energy Limited 119,825,833 10.15
Standard Life Investments
(Holdings) Limited 101,760,000 8.62
Zeta Resources Limited and Magna Energy Limited hold shares on
both ASX and AIM.
(#) Included within the total issued capital are 655,647,532
shares held on the AIM register. Included within the top 20
shareholders are certain AIM registered holders as marked.
DEFINITIONS
Associated Natural gas found in contact with or dissolved in crude
Gas oil in the reservoir. It can be further categorized
as Gas-Cap Gas or Solution Gas.
------------ ---------------------------------------------------------------
Bbls Barrels of oil or condensate.
------------ ---------------------------------------------------------------
BCF Billion Cubic Feet of gas at standard temperature and
pressure conditions.
------------ ---------------------------------------------------------------
BCFE Billion Cubic Feet Equivalent of gas at standard temperature
and pressure conditions.
------------ ---------------------------------------------------------------
BOE Barrels of Oil Equivalent. Converting gas volumes to
the oil equivalent is customarily done on the basis
of the nominal heating content or calorific value of
the fuel. Common industry gas conversion factors usually
range between 1 barrel of oil equivalent (BOE) = 5,600
standard cubic feet (scf) of gas to 1 BOE = 6,000 scf.
(Many operators use 1 BOE = 5,620 scf derived from
the metric unit equivalent 1 m(3) crude oil = 1,000
m(3) natural gas).
------------ ---------------------------------------------------------------
BOPD Barrels of oil per day.
------------ ---------------------------------------------------------------
GOR Gas to oil ratio in an oil field, calculated using
measured natural gas and crude oil volumes at stated
conditions. The gas/oil ratio may be the solution gas/oil,
symbol Rs; produced gas/oil ratio, symbol Rp; or another
suitably defined ratio of gas production to oil production.
Volumes measured in scf/bbl.
------------ ---------------------------------------------------------------
MMscfd Million standard cubic feet of gas per day.
------------ ---------------------------------------------------------------
MMbbls Million barrels of oil or condensate.
------------ ---------------------------------------------------------------
PSC Production Sharing Contract.
------------ ---------------------------------------------------------------
mD Millidarcy - unit of permeability.
------------ ---------------------------------------------------------------
MD Measured Depth.
------------ ---------------------------------------------------------------
Contingent Those quantities of petroleum estimated, as of a given
Resources date, to be potentially recoverable from known accumulations
by application of development projects, but which are
not currently considered to be commercially recoverable
due to one or more contingencies.
Contingent Resources may include, for example, projects
for which there are currently no viable markets, or
where commercial recovery is dependent on technology
under development, or where evaluation of the accumulation
is insufficient to clearly assess commerciality. Contingent
Resources are further categorized in accordance with
the level of certainty associated with the estimates
and may be sub-classified based on project maturity
and/or characterised by their economic status.
------------ ---------------------------------------------------------------
Prospective Those quantities of petroleum which are estimated,
Resources as of a given date, to be potentially recoverable from
undiscovered accumulations.
------------ ---------------------------------------------------------------
Reserves Reserves are those quantities of petroleum anticipated
to be commercially recoverable by application of development
projects to known accumulations from a given date forward
under defined conditions.
Proved Reserves are those quantities of petroleum,
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