TIDMOEX
RNS Number : 5830E
Oilex Ltd
11 February 2015
OILEX LTD
ABN 50078652632
CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT
For the half-year ended 31 December 2014
CONTENTS
Directors' Report
Auditor's Independence Declaration
Condensed Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Condensed Consolidated Statement of Financial Position
Condensed Consolidated Statement of Changes in Equity
Condensed Consolidated Statement of Cash Flows
Notes to the Condensed Consolidated Interim Financial Report
Directors' Declaration
Independent Review Report
DIRECTORS REPORT
The Directors of Oilex Ltd present their report together with
the condensed consolidated interim financial report of the Group
comprising of Oilex Ltd (the "Company") and its subsidiaries for
the half-year ended 31 December 2014 and the auditor's review
report thereon.
Directors
The directors of the Company at any time during the interim
period and until the date of this report are detailed below. All
directors were in office for this entire period unless otherwise
stated.
Mr Max Dirk Jan Cozijn Non-Executive Chairman
Mr Sundeep Bhandari Non-Executive Vice Chairman
Mr Jeffrey Auld Non-Executive Director (Appointed 28 January 2015)
Mr Ronald Miller Managing Director
Dr Bruce Henry McCarthy Non-Executive Director (Resigned 18 November 2014)
Review of Operations
Oilex is continuing its transition to an early mover
unconventional energy producer, focusing on assets around the
Indian Ocean Rim. The Company is evaluating and commercialising the
extensive Eocene low permeability ("tight") reservoirs in its
onshore Cambay Field project located in the state of Gujarat,
India, where energy market fundamentals are attractive. Oilex is
applying tight reservoir evaluation, drilling and production
techniques which have been developed in recent years in the rapidly
expanding shale gas and tight oil ("SGTO") industry in North
America. Oilex also has a large acreage position in the onshore
Canning Basin, Western Australia, which is anticipated to be
prospective for conventional and SGTO resources. The interest in
the exploration asset offshore Timor Sea is currently under
temporary suspension of the PSC for a further 3 month period to
April 2015 to enable the completion of the ANP legal assessment and
continued discussion between the parties to address the way
forward. Oilex is pursuing enforcement of the Arbitration Award
with respect to its interest in the West Kampar PSC, onshore
Sumatra, Indonesia.
Cambay Field
Significant progress was achieved during the period on the
Cambay Field development. The Company successfully completed the
Cambay-77H production test. The test was focused on acquiring long
term performance data which is essential for assessment of
reservoir properties and will supplement surface data collected
during flowback. A 5 day shut-in period preceded the test to allow
the well to stabilise after 85 days of flowback production.
Cambay-77H produced 3,372 bbls (net to Oilex 1,517 bbls) of light
oil which was sold to a local refinery and 43 MMscf of gas which
was flared for the safety of personnel and equipment at site.
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 drilling operations demonstrating the repeatability of targeting the Y zone
-- Y zone reservoir properties are laterally consistent, having
variability within expectations
-- Successful completion of 8 fracture treatments
-- 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
Gas sales agreements
Oilex has concluded two gas sale agreements ("GSA") 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 is secured, above the floor
price recently established by the Indian Government.
During the period Oilex received the endorsement from the
relevant Government of India authorities for the Gas Sales
Agreement for the sale of Cambay-73 gas, a critical milestone for
increasing production from the field and supplying gas to the local
market. With Cambay-73, gas production from the Cambay Field will
recommence for the first time since the early 1990's.
Bhandut Field
During the period Oilex received endorsement from the Government
of India for the sale of gas from the Bhandut-3 well, located
within the Bhandut Field. This is a critical milestone for
returning the field to production, supplying gas to the local
market and generating positive cash flow for the Company from a
previously idle asset.
Now that endorsement of the gas sales agreement has been
received, the Bhandut Joint Venture will proceed 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.
Sabarmati Field
During the period the Joint Venture finalised cost estimates for
the plug and abandonment of the Sabarmati-1 well and commenced the
process to obtain Government of India approval to relinquish the
Sabarmati Field. Plug and abandonment activities are expected to be
completed during the remainder of Q1 2015. As part of the
relinquishment of the Sabarmati Field, Oilex plans to transfer
equipment from Sabarmati EPS facility for possible future use at
Cambay Field.
Canning Basin
During the period the WA Department of Mines and Petroleum (DMP)
approved Oilex's application to convert the Special Prospecting
Authority (SPA) (SPA 17 AO) to Exploration Permit Application
(STP-EPA-0131).
The committed work program for SPA 17 AO was fulfilled by the
acquisition, processing and interpretation of a 4,060 line km
gravity gradiometry/magnetic survey ("Survey"). Under the terms of
the SPA, Oilex had exclusive rights to negotiate a formal
exploration permit with the Government of Western Australia. The
terms of the SPA state that the area retained as an exploration
permit from within the SPA is limited to 30-50% of the total
area.
The final report for SPA 17 AO incorporating the newly acquired
Survey data with 2D seismic, regional gravity, magnetic, surface
geological and well data, confirmed Oilex's structural model of the
Wallal Graben and its extension into SPA 17 AO.
The graben is present in Oilex's three, 100%-owned, exploration
areas encompassing approximately 11,900 km2 (3 million acres). 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.
This activity has led to the 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.
Oilex continues to negotiate Native Title agreements with
Traditional Owners. Upon finalisation of the agreements the
regulatory process of conversion of STP-EPA-0106 and STP-EPA-0107
to formal exploration permits will commence.
Financial
The Group incurred a consolidated loss after income tax of
$3,118,088 for the half-year (31 December 2013: loss of
$2,776,134). Revenue for the period has increased due to increased
production from the Cambay Field. The loss includes $1,040,131 (31
December 2013: $1,058,838) incurred on exploration expenditure and
$1,718,780 (31 December 2013: $1,637,860) incurred on employee and
administrative expenditure. The Company's focus on reducing costs,
which do not impact its technical and commercial capabilities, is
continuing. Cash and cash equivalents held by the Group as at 31
December 2014 totalled $5,426,328 (30 June 2014: cash and cash
equivalents $7,455,572).
Significant Events After Balance Date
Oilex received approval from the Government of India for the
grant of an extension of the Petroleum Mining Lease for the Cambay
Field to 22 September 2019.
The receipt of endorsement from the relevant authorities of the
Government of India for the sale of gas from Cambay Field,
specifically from the Cambay-77H well.
The Autoridade Nacional do Petroleo ("ANP") with prior consent
of the Joint Commission for the Joint Petroleum Development Area
under the Timor Sea Treaty, advised on 16 January 2015 that it had
further extended the expiry date of the PSC from 15 January 2015 to
15 April 2015 for the purpose of completing an assessment and to
continue discussions with the Joint Venture partners.
Significant Events After Balance Date (Continued)
On 28 January 2015 Oilex announced the appointment of Mr Jeffrey
D Auld as a Non-Executive Director. The appointment of a UK based
independent non-executive director, with significant experience in
the London Capital markets and upstream oil and gas industry is in
line with the Company's decision to appoint additional directors to
achieve the right mix of skills, experience and diversity which
reflects the Company's strategy and increase the balance of
independence on the Board.
There are no other significant subsequent events occurring after
balance date.
Lead Auditor's Independence Declaration
The lead auditor's independence declaration is set out on page 4
and forms part of the Directors' Report for the half-year ended
31 December 2014.
Signed in accordance with a resolution of the Board of
Directors.
Mr Max Cozijn Mr Ronald Miller
Chairman Managing Director
Leederville
Western Australia
10 February 2015
KPMG
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 review for the half-year ended 31 December 2014
there have been:
(i) no contraventions of the auditor independence requirements
as set out in the Corporations Act 2001 in relation to the review;
and
(ii) no contraventions of any applicable code of professional
conduct in relation to the review.
KPMG
Brent Steedman
Partner
Perth
10 February 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
CONDENSED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE HALF-YEAR ENDED 31 DECEMBER 2014
31 December 31 December
2014 2013
Note $ $
-------------- --------------
Revenue 6(a) 232,992 121,927
Cost of sales 6(b) (272,005) (197,596)
-------------- --------------
Gross loss (39,013) (75,669)
Other income 6(c) 6,573 336,514
Exploration expenditure (1,040,131) (1,058,838)
Administration expense 6(d) (1,718,780) (1,637,860)
Share-based payments expense (407,152) (289,549)
Other expenses 6(e) (35,625) (42,920)
-------------- --------------
Results from operating activities (3,234,128) (2,768,322)
-------------- --------------
Finance income 33,959 21,447
Finance costs (41) (5)
Foreign exchange gain/(loss) 6(f) 82,122 (19,254)
-------------- --------------
Net finance income 116,040 2,188
-------------- --------------
Loss before income tax (3,118,088) (2,766,134)
Tax expense - -
-------------- --------------
Loss for the period (3,118,088) (2,766,134)
-------------- --------------
Other comprehensive income/(loss)
Items that may be reclassified
subsequently to profit or loss
Foreign currency translation
difference 4,250,375 507,701
-------------- --------------
Other comprehensive (loss)/income
for the period, net of income
tax 4,250,375 507,701
-------------- --------------
Total comprehensive income/(loss)
for the period 1,132,287 (2,258,433)
-------------- --------------
Earnings per share
Basic loss per share (cents per
share) 0.48 0.66
Diluted loss per share (cents
per share) 0.48 0.66
The above Condensed Consolidated Statement of Profit or Loss and
Other Comprehensive Income is to be read in conjunction with the
accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2014
Note 31 December 30 June 2014
2014
$ $
-------------- --------------
Assets
Cash and cash equivalents 5,426,328 7,455,572
Trade and other receivables 5,987,480 3,684,488
Prepayments 576,259 733,654
Inventories 1,200,540 1,047,630
-------------- --------------
Total current assets 13,190,607 12,921,344
-------------- --------------
Trade and other receivables 92,887 80,585
Exploration and evaluation 7 33,841,997 26,320,952
Property, plant and equipment 265,414 254,741
Total non-current assets 34,200,298 26,656,278
-------------- --------------
Total assets 47,390,905 39,577,622
-------------- --------------
Liabilities
Trade and other payables 3,474,923 2,776,075
Employee benefits 442,422 386,198
Provisions 153,263 132,966
Total current liabilities 4,070,608 3,295,239
-------------- --------------
Provisions 3,375,128 2,928,141
Total non-current liabilities 3,375,128 2,928,141
-------------- --------------
Total liabilities 7,445,736 6,223,380
-------------- --------------
Net assets 39,945,169 33,354,242
-------------- --------------
Equity
Issued capital 9 154,154,028 149,250,072
Reserves 7,624,280 5,179,638
Accumulated losses (121,833,139) (121,075,468)
-------------- --------------
Total equity 39,945,169 33,354,242
-------------- --------------
The above Condensed Consolidated Statement of Financial Position
is to be read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE HALF-YEAR ENDED 31 DECEMBER 2014
Attributable to Owners of the Company
Foreign
Currency
Issued Option Translation Accumulated
Capital Reserve Reserve Losses Total Equity
$ $ $ $ $
------------ ------------ ------------- -------------- -------------
Balance at 1 July
2013 135,371,619 3,663,824 2,644,735 (117,416,789) 24,263,389
------------ ------------ ------------- -------------- -------------
Total Comprehensive
(loss)/income for
the period
Loss - - - (2,766,134) (2,766,134)
------------ ------------ ------------- -------------- -------------
Other comprehensive
income
Foreign currency
translation differences - - 507,701 - 507,701
------------ ------------
Total other comprehensive
income - - 507,701 - 507,701
------------ ------------ ------------- -------------- -------------
Total comprehensive
(loss)/ income
for the period - - 507,701 (2,766,134) (2,258,433)
------------ ------------ ------------- -------------- -------------
Transactions with owners
of the Company
Contributions and
distributions
Shares issued 3,394,957 - - - 3,394,957
Capital raising
costs (357,765) - - - (357,765)
Shares issued on
exercise of listed
options 120 - - - 120
Transfers on forfeited
options - (93,932) - 93,932 -
Share-based payment
transactions - 289,549 - - 289,549
------------ ------------ ------------- -------------- -------------
Total transactions
with owners of
the Company 3,037,312 195,617 - 93,932 3,326,861
------------ ------------ ------------- -------------- -------------
Balance at 31 December
2013 138,408,931 3,859,441 3,152,436 (120,088,991) 25,331,817
------------ ------------ ------------- -------------- -------------
Balance at 1 July
2014 149,250,072 4,089,004 1,090,634 (121,075,468) 33,354,242
------------ ------------ ------------- -------------- -------------
Total Comprehensive
(loss)/income for
the period
Loss - - - (3,118,088) (3,118,088)
------------ ------------ ------------- -------------- -------------
Other comprehensive
income
Foreign currency
translation differences - - 4,250,375 - 4,250,375
Total other comprehensive
income - - 4,250,375 - 4,250,375
------------ ------------ ------------- -------------- -------------
Total comprehensive
(loss)/ income
for the period - - 4,250,375 (3,118,088) 1,132,287
------------ ------------ ------------- -------------- -------------
Transactions with owners
of the Company
Contributions and
distributions
Shares issued 4,362,379 - - - 4,362,379
Capital raising
costs(1) (552,676) 147,532 - - (405,144)
Shares issued on
exercise of listed
options 1,094,253 - - - 1,094,253
Transfers on forfeited
options - (2,360,417) - 2,360,417 -
Share-based payment
transactions - 407,152 - - 407,152
------------ ------------ ------------- -------------- -------------
Total transactions
with owners of
the Company 4,903,956 (1,805,733) - 2,360,417 5,458,640
------------ ------------ ------------- -------------- -------------
Balance at 31 December
2014 154,154,028 2,283,271 5,341,009 (121,833,139) 39,945,169
------------ ------------ ------------- -------------- -------------
(1) Capital raising costs include unlisted options granted to
the underwriter and sub-underwriters.
The above Condensed Consolidated Statement of Changes in Equity
is to be read in conjunction with the accompanying notes.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE HALF-YEAR ENDED 31 DECEMBER 2014
31 December 31 December
2014 2013
$ $
------------ ------------
Cash flows from operating activities
Cash receipts from customers 241,668 89,084
Payments to suppliers and employees (1,995,279) (1,745,293)
------------ ------------
Cash outflows from operations (1,753,611) (1,656,209)
Payments for exploration and evaluation
expenses (879,195) (1,827,686)
Cash receipts from government grants 358,517 198,148
Interest received 33,925 20,855
Interest paid (41) (5)
Net cash used in operating activities (2,240,405) (3,264,897)
------------ ------------
Cash flows from investing activities
Advances (to)/from joint ventures (25,202) 33,071
Advance from sale of petroleum interests
(refer Note 10) - 4,272,013
Payments for capitalised exploration and
evaluation (5,204,371) (565,611)
Proceeds from sale of assets 600 -
Acquisition of property, plant and equipment (30,900) (44,557)
------------ ------------
Net cash (used in)/from investing activities (5,259,873) 3,694,916
------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital 5,725,960 3,395,077
Payment for share issue costs (323,261) (357,765)
Net cash from financing activities 5,402,699 3,037,312
------------ ------------
Net (decrease)/increase in cash held (2,097,579) 3,467,331
Cash and cash equivalents at 1 July 7,455,572 3,598,640
Effect of exchange rate fluctuations 68,335 118,776
------------ ------------
Cash and cash equivalents at 31 December 5,426,328 7,184,747
------------ ------------
The above Condensed Consolidated Statement of Cash Flows is to
be read in conjunction with the accompanying notes.
NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL REPORT
FOR THE HALF-YEAR ENDED 31 DECEMBER 2014
1. REPORTING ENTITY
Oilex Ltd (the "Company") is domiciled in Australia. The
condensed consolidated interim financial report of the Group as at
and for the half-year ended 31 December 2014 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.
The consolidated annual financial report of the Group as at and
for the year ended 30 June 2014 is available upon request from the
Company's registered office at Level One, 660 Newcastle Street,
Leederville, Western Australia 6007 or at www.oilex.com.au.
2. BASIS OF PREPARATION
(a) Statement of Compliance
The condensed consolidated interim financial report is a general
purpose condensed financial report which has been prepared in
accordance with Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Act 2001, and IAS 34 Interim
Financial Reporting. The condensed consolidated interim financial
report does not include all of the notes and information included
in an annual financial report and accordingly this report should be
read in conjunction with the consolidated annual financial report
of the Group as at and for the year ended 30 June 2014.
This condensed consolidated interim financial report was
authorised for issue by the Board of Directors on 10 February
2015.
(b) Going Concern
The Directors believe it is appropriate to prepare the
consolidated financial report on a going concern basis, which
contemplates realisation of assets and settlement of liabilities in
the normal course of business. The Group has incurred a loss of
$3,118,088, and had cash outflows from operating and investing
activities of $2,240,405 and $5,259,873 respectively. As at 31
December 2014, the Group's current assets exceeded current
liabilities by $9,119,999 and the Group had cash and cash
equivalents of $5,426,328.
The Company has in place a GBP7,500,000 three year equity
financing facility with a UK company, Darwin Strategic Limited
("Darwin"). Under the terms of the facility, the Company may (at
its discretion) issue placement shares to Darwin at any time until
December 2016. Any drawdown of the facility and resultant issue of
shares on the AIM of the London Stock Exchange is limited to the
Company's equity placement capacity under ASX Listing Rules.
GBP6,300,000 is available in financing as at 31 December 2014.
The Group will continue to manage its expenditure to ensure that
it has sufficient cash reserves for at least the next twelve
months. The Group will require funds within the next twelve months
in order to meet planned expenditures for its projects, noting that
the timing and amount of discretionary expenditures may be able to
be varied if required although some commitments exist in the medium
term as per note 14.
The Directors believe it is appropriate to prepare the
consolidated financial report on a going concern basis as, and in
the opinion of the Directors, the Company has adequate plans in
place to meet its minimum administrative, evaluation and
development expenditures for at least twelve months from the date
of this report. If further funds are not able to be raised or
realised, possible funding options available to the Group include
the sale of interests in the Group's assets, farm out opportunities
or a future capital raising, including but not limited to the
Darwin facility.
3. SIGNIFICANT ACCOUNTING POLICIES
Except as disclosed below, the accounting policies applied by
the Group in this condensed consolidated interim financial report
are the same as those applied by the Group in its consolidated
financial report as at and for the year ended 30 June 2014.
The Group has adopted the following new and revised accounting
standards that are mandatory for entities with an annual reporting
period beginning on 1 July 2014:
Offsetting Financial Assets and Financial Liabilities
(Amendments to AASB 132);
Recoverable Amount Disclosures for Non-Financial Assets
(Amendments to AASB 136);
Annual Improvements to Australian Accounting Standards 2010-2012
and 2011-2013 Cycles: and
IFRIC 21 Levies.
The adoption of these newly effective standards have no material
effect on the financial position or the consolidated financial
statements of the Group.
4. ESTIMATES AND JUDGEMENTS
The preparation of an interim financial report requires
management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported
amounts of assets and liabilities, income and expense. Actual
results may differ from these estimates.
In preparing this condensed consolidated interim financial
report, the significant judgements made by management in applying
the Group's accounting policies and the key sources of estimation
uncertainty were the same as those that applied to the consolidated
financial report as at and for the year ended 30 June 2014.
5. OPERATING SEGMENTS
The Group has identified its operating segments based upon the
internal reports that are reviewed and used by the executive
management team (the chief operating decision makers) in assessing
performance and that are used to allocate the Group's resources.
There has been no change in the basis of segmentation from the
Group's 30 June 2014 annual consolidate financial report.
India Australia JPDA (1) Indonesia Corporate (2) Consolidated
Six months 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013
ended 31
December
--------------- ----------- ----------- ---------- ---------- --------- -------- --------- --------- ------------ ------------ ------------ ------------
$ $ $ $ $ $ $ $ $ $ $ $
Revenue
Revenue - Oil
Sales 232,992 121,927 - - - - - - - - 232,992 121,927
--------------- ----------- ----------- ---------- ---------- --------- -------- --------- --------- ------------ ------------ ------------ ------------
Reportable
segment
profit/(loss)
before income
tax (733,220) (790,642) (398,316) (432,361) (40,141) 90,279 (25,399) (59,668) (2,037,052) (1,575,930) (3,234,128) (2,768,322)
--------------- ----------- ----------- ---------- ---------- --------- -------- --------- --------- ------------ ------------ ------------ ------------
Net finance
income 33,918 21,442
Foreign
exchange
gain/(loss) 82,122 (19,254)
Loss for the
period (3,118,088) (2,766,134)
------------ ------------
India Australia JPDA (1) Indonesia Corporate (2) Consolidated
31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June 31 Dec 30 June
2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014 2014
--------------- ----------- ----------- ---------- ---------- --------- -------- --------- --------- ------------ ------------ ------------ ------------
$ $ $ $ $ $ $ $ $ $ $ $
Segment assets 40,879,333 29,837,428 384,302 431,174 310,950 305,703 - - 5,816,320 9,003,317 47,390,905 39,577,622
Segment
liabilities 6,154,574 5,023,492 - 203,880 9,133 5,522 270,747 157,996 1,011,282 832,490 7,445,736 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 and assets to the consolidated figure.
6. REVENUE AND EXPENSES
31 December 31 December
2013
2014 $
$
------------ ------------
(a) Revenue
Oil sales 232,992 121,927
------------ ------------
(b) Cost of Sales
Production costs (251,731) (211,134)
Movement in oil stocks inventory (20,274) 13,538
------------ ------------
(272,005) (197,596)
------------ ------------
(c) Other Income
Government Grants - research and development - 336,514
Insurance proceeds 6,573 -
------------ ------------
6,573 336,514
------------ ------------
(d) Administrative Expenses
Employee benefits expense (662,875) (489,886)
Administration expense (1,055,905) (1,147,974)
------------ ------------
(1,718,780) (1,637,860)
------------ ------------
(e) Other Expenses
Depreciation expense (33,500) (42,285)
Loss on disposal of assets (2,125) (635)
------------ ------------
(35,625) (42,920)
------------ ------------
(f) Foreign Exchange Gain/(Loss)
Foreign exchange gain/(loss) - realised 3,473 (28,446)
Foreign exchange gain - unrealised 78,649 9,192
------------ ------------
82,122 (19,254)
------------ ------------
7. EXPLORATION AND EVALUATION
31 December Year Ended
2014 30 June
2014
$ $
------------ -----------
Opening balance 26,320,952 22,553,085
Expenditure capitalised 3,188,884 4,521,508
Effect of movements in foreign exchange rates 4,332,161 (753,641)
------------ -----------
Closing balance 33,841,997 26,320,952
------------ -----------
Exploration and evaluation assets are reviewed at each reporting
date to determine whether there is any indication of impairment or
reversal of impairment. 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.
8. SHARE-BASED PAYMENTS
The Company has an established share option program that
entitles directors, key management personnel and advisors to
purchase shares in the Company. The terms and conditions of the
share option program are disclosed in the consolidated financial
report as at and for the year ended 30 June 2014. During the
half-year ended 31 December 2014 further grants on similar terms
were made to key management personnel, employees and financiers and
advisors. All options are to be settled by the physical delivery of
shares.
The basis of measuring fair value of options is consistent with
that disclosed in the consolidated financial report as at and for
the year ended 30 June 2014. The terms and conditions of the grants
made during the half-year ended 31 December 2014 are as
follows:
Option Grant Date Number of Vesting Conditions Exercise Contractual Life
Instruments Price of Options
-------------------------- ------------- -------------------- --------- -----------------
Key Management Personnel
5 August 2014 500,000 Vest immediately $0.25 3 years
5 August 2014 500,000 One year of service $0.35 4 years
25 August 2014 1,500,000 Vest immediately $0.25 3 years
25 August 2014 1,500,000 One year of service $0.35 5 years
Employees
5 August 2014 825,000 Vest immediately $0.25 3 years
5 August 2014 825,000 One year of service $0.35 4 years
Financiers and Advisors
22 December 2014 5,000,000 Vest immediately $0.10 3 years
Total Options 10,650,000
-------------
During the half-year ended 31 December 2014, the following
options lapsed unexercised:
Option Grant Date Number of Expiry Date Exercise
Instruments Price
-------------------------- ------------- ----------------- ---------
Key Management Personnel
17 August 2009 300,000 1 July 2014 $0.30
26 November 2009 750,000 1 July 2014 $0.30
10 November 2010 3,250,000 10 November 2014 $0.37
7 February 2011 2,000,000 10 November 2014 $0.37
Employees
17 August 2009 1,500,000 1 July 2014 $0.30
24 August 2009 100,000 1 July 2014 $0.30
26 November 2009 1,500,000 1 July 2014 $0.30
10 November 2010 3,162,500 10 November 2014 $0.37
16 November 2010 325,000 10 November 2014 $0.37
Total Options 12,887,500
-------------
Fair value of options granted during the half-year ended 31
December 2014 has been determined using the following
assumptions:
Option Grant Date 5/8/2014 5/8/2014 25/08/2014 25/08/2014 22/12/2014
------------------------------------------- --------- --------- ----------- ----------- -----------
Assumptions
Fair value per option at measurement date $0.10 $0.11 $0.10 $0.12 $0.03
Share price at grant date $0.18 $0.18 $0.17 $0.17 $0.05
Exercise price $0.25 $0.35 $0.25 $0.35 $0.10
Expected volatility 106.59% 106.59% 108.62% 108.62% 114.71%
Option life 3 years 4 years 3 years 5 years 3 years
Expected dividends - - - - -
Risk-free interest rate 2.50% 2.50% 2.50% 2.50% 2.50%
The fair value of the options is calculated at the date of grant
using the Black-Scholes Model.
As at 31 December 2014 Oilex Ltd had 35,225,000 unlisted options
on issue exercisable at prices of between $0.10 and $0.63.
9. ISSUED CAPITAL
31 December 31 December 30 June 30 June
2014 2014 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) 7,295,020 1,094,253 1,200 180
Capital raising costs (405,144) (917,497)
Underwriter and sub-underwriter options (147,532) (120,000)
------------ ---------------- ------------ ----------------
On issue at the end of the period - fully paid 677,905,419 591,034,789
Issued Capital as at the end of the period 154,154,028 148,980,743
Shares contracted to be issued - not fully paid(1) - - 2,350,000 269,329
------------ ---------------- ------------ ----------------
Balance at the end of the period 677,905,419 154,154,028 593,384,789 149,250,072
------------ ---------------- ------------ ----------------
Number of Listed Options
Listed Options (ASX) 31 December 30 June 2014
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) (7,295,020) (1,200)
------------ -------------
Total listed options 188,597,091 195,892,111
------------ -------------
All listed options are exercisable at $0.15 per share and expire
7 September 2015.
(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.
(3) 7,295,020 listed options with an exercise price of $0.15
were exercised during the period.
10. ADVANCES RECEIVED FROM FARMOUT
On 9 August 2013 the Company announced that it had entered into
a Sale and Purchase Agreement ("SPA") to sell up to a 15%
participating interest in the Cambay Production Sharing Contract
("PSC") to Magna. Under the terms of the transaction, the Company
had agreed to sell a 10% participating interest (gross) in the
Cambay PSC for US$4 million, ("sale interest"), and an additional
5% participating interest, if Magna exercised an option to acquire
an additional 5% participating interest (gross) for US$2 million,
("option interest"). The sale of the Cambay asset was conditional
upon a number of conditions, including obtaining a waiver of the
pre-emptive rights from GSPC, the Company's non-operating joint
venture partner, and the consent of the Government of India. In the
event that certain conditions, including the approval of the
Government of India, had not been satisfied or, waived prior to 1
May 2014, the parties agreed that any payments made by Magna to the
Company, to the extent practicable, would be converted into shares
in the Company. The issue of shares, under the unwind provisions,
was limited to 19.9% of the enlarged issued capital of the Company
at the time of issue, with any balance of the investment not
satisfied in shares repayable in cash. Shareholders approved the
unwind provisions at the General Meeting held 4 October 2013. The
consent of the Government of India was not received by the cut-off
date, and Magna on 1 May 2014 requested that the Company issue US$4
million unwind shares in accordance with the SPA. The number of
unwind shares was determined in accordance with the SPA formula at
the contracted foreign exchange rate of US$0.91 to AUD$1.00.
Funds for the 10% sale interest were received from Magna during
the half year ended 31 December 2013. As the transaction could not
be completed until the Government of India advised of the approval
or rejection of the potential sale of the Cambay asset, the funds
were classified as an advance received from the farmout.
On 2 May 2014 the Company announced the issue of 73,505,090 new
ordinary shares to Magna Energy Limited ("Magna") under the terms
of the unwind provisions approved by shareholders on 4 October 2013
at a deemed price of $0.0598 per share and the funds received were
subsequently disclosed as proceeds from issue of share capital as
at 30 June 2014.
11. CONTINGENCIES
On 12 July 2013 Oilex (JPDA 06-103) Ltd, on behalf of the Joint
Venture participants, submitted to the Autoridade Nacional do
Petroleo ("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 requires the consent of the Timor Sea Designated
Authority. Should this consent not be forthcoming, then the Company
would need to assess the consequences. Refer note 15 for details of
the extension by the ANP with prior consent of the Joint Commission
for the Joint Petroleum Development Area under the Timor Sea
Treaty, of the extension of the expiry date of the PSC to 15 April
2015.
12. RELATED PARTIES
Arrangements with related parties continue to be in place. For
details of these arrangements, refer to the consolidated annual
financial report of the Group as at and for the year ended 30 June
2014.
13. CHANGE IN THE COMPOSITION OF THE GROUP
Since the last annual reporting date, there have been no
significant changes in the composition of the Group.
14. EXPENDITURE COMMITMENTS
Exploration and Evaluation Expenditure Commitments
In order to maintain rights of tenure to exploration permits,
the Group is required to perform minimum 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:
31 December
2014 30 June 2014
$ $
------------ --------------
Within one year 2,206,821 4,094,433
One year or later and no later than five
years 12,930,000 10,250,000
15,136,821 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
exploration leases.
Capital Expenditure Commitments
The Group had no capital expenditure commitments as at 31
December 2014 (30 June 2014: Nil).
15. SUBSEQUENT EVENTS
Oilex received approval from the Government of India for the
grant of an extension of the Petroleum Mining Lease for the Cambay
Field to 22 September 2019.
The receipt of endorsement from the relevant authorities of the
Government of India for the sale of gas from Cambay Field,
specifically from the Cambay-77H well.
The Autoridade Nacional do Petroleo with prior consent of the
Joint Commission for the Joint Petroleum Development Area under the
Timor Sea Treaty, advised on 16 January 2015 that it had further
extended the expiry date of the PSC from 15 January 2015 to 15
April 2015 for the purpose of completing an assessment and to
continue discussions with the Joint Venture partners.
On 28 January 2015 Oilex announced the appointment of Mr Jeffrey
D Auld as a Non-Executive Director. The appointment of a UK based
independent non-executive director, with significant experience in
the London capital markets and upstream oil and gas industry is in
line with the Company's decision to appoint additional directors to
achieve the right mix of skills, experience and diversity which
reflects the Company's strategy and increase the balance of
independence on the Board.
There are no other significant subsequent events occurring after
balance date.
DIRECTORS' DECLARATION
In the opinion of the Directors of Oilex Ltd (the
"Company"):
1. the condensed consolidated financial statements and notes set
out on pages 5 to 16, are in accordance with the Corporations Act
2001 including:
(a) giving a true and fair view of the Group's financial
position as at 31 December 2014 and of its performance for the
half-year ended on that date; and
(b) complying with Australian Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Regulations 2001;
and
2. there are reasonable grounds to believe that the Company will
be able to pay its debts as and when they become due and
payable.
Signed in accordance with a resolution of the Directors.
Mr Max Cozijn Mr Ronald Miller
Chairman Managing Director
Leederville
Western Australia
10 February 2015
KPMG
Independent auditor's review report to the members of Oilex
Ltd
Report on the financial report
We have reviewed the accompanying interim financial report of
Oilex Ltd, which comprises the condensed consolidated statement of
financial position as at 31 December 2014, condensed consolidated
statement of profit or loss and other comprehensive income,
condensed consolidated statement of changes in equity and condensed
consolidated statement of cash flows for the half-year ended on
that date, notes 1 to 15 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 half-year's end or from time to time
during the half-year.
Directors' responsibility for the interim financial report
The directors of the company are responsible for the preparation
of the interim 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
interim financial report that is free from material misstatement,
whether due to fraud or error.
Auditor's responsibility
Our responsibility is to express a conclusion on the interim
financial report based on our review. We conducted our review in
accordance with Auditing Standard on Review Engagements ASRE 2410
Review of a Financial Report Performed by the Independent Auditor
of the Entity, in order to state whether, on the basis of the
procedures described, we have become aware of any matter that makes
us believe that the interim financial report is not in accordance
with the Corporations Act 2001 including: giving a true and fair
view of the Group's financial position as at 31 December 2014 and
its performance for the half-year ended on that date; and complying
with Australian Accounting Standard AASB 134 Interim Financial
Reporting and the Corporations Regulations 2001. As auditor of
Oilex Ltd, ASRE 2410 requires that we comply with the ethical
requirements relevant to the audit of the annual financial
report.
A review of an interim financial report consists of making
enquiries, primarily of persons responsible for financial and
accounting matters, and applying analytical and other review
procedures. A review is substantially less in scope than an audit
conducted in accordance with Australian Auditing Standards and
consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in
an audit. Accordingly, we do not express an audit opinion.
Independence
In conducting our review, we have complied with the independence
requirements of the Corporations Act 2001.
Conclusion
Based on our review, which is not an audit, we have not become
aware of any matter that makes us believe that the interim
financial report of Oilex Ltd is not in accordance with the
Corporations Act 2001, including:
(a) giving a true and fair view of the Group's financial
position as at 31 December 2014 and of its performance for the
half-year ended on that date; and
(b) complying with Australian Accounting Standard AASB 134
Interim Financial Reporting and the Corporations Regulations
2001.
KPMG
Brent Steedman
Partner
Perth
10 February 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
This information is provided by RNS
The company news service from the London Stock Exchange
END
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