TIDMGBP
RNS Number : 0869E
Global Petroleum Ltd
26 October 2022
26 October 2022
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 ("MAR"). Upon the
publication of this announcement via a Regulatory Information
Service ("RIS"), this inside information is now considered to be in
the public domain.
Global Petroleum Limited
("Global" or "the Company")
Annual Financial Report - Year Ended 30 June 2022
Global (AIM: GBP) is pleased to announce its financial results
for the year ended 30 June 2022.
Operational
-- Ongoing technical work has successfully mapped the
Barremian-Aptian source rock from previous drilling in the Walvis
Basin, offshore Namibia, into the Company's PEL0094 licence area;
further study work supports the Company's interpretation of a
working petroleum system in the area
-- Two significant discoveries of oil and gas in the Orange
Basin, offshore southern Namibia, announced in February 2022 by
other operators and interpreted by Global to be sourced from the
Barremian-Aptian, with highly encouraging technical similarities
between these discoveries and the prospectivity in PEL0094; further
exploration and appraisal drilling in the Orange Basin understood
to be commencing in Q4 2022
-- One year extension to PEL0094 granted by Namibian authorities, until September 2023
-- European Court judgement in the Company's favour regarding
its 4 permit applications ("Applications"), in Italian southern
Adriatic Sea; Applications confirmed as in compliance with Italian
government's new plan for sustainable energy transition, effective
in February 2022, which permits gas exploration; good progress
towards award being made
Financial
-- Further successful equity raises of GBP1.0 million gross
proceeds in August 2021, and GBP0.8 million post year-end in August
2022, strengthening the Company's finances and enabling continued
exploration activity in Namibia
-- Cash balance at year end US$1,139,775 (30 June 2021:
US$1,834,434), reflecting ongoing expenditure partly offset by the
equity raise in the period
-- Cash balance of US$1,498,293 on 30 September 2022 following
most recent equity raise in August 2022
-- Loss after tax US$1,647,094 (2021: loss US$3,927,794
following impairment write off associated with expired licence
PEL0029).
Strategy and Outlook
The recent drilling successes in the Orange Basin are expected
to bring a very strong boost to both industry and investor
confidence in relation to Namibian offshore exploration generally.
Global believes it is well positioned to benefit from this, and the
Company is continuing with its farm-out process to fund the next
stage of exploration on its licence.
In Italy, the Company will endeavour to progress its
Applications in the context of the prevailing political
climate.
Finally, the Company will continue to explore all strategic
alternatives in order to maximise shareholder value.
The Company confirms that a full copy of its latest Annual
Report and Accounts will be available shortly on the Company's
website: www.globalpetroleum.com.au
+44 (0) 20 3 875
Global Petroleum Limited 9255
Peter Hill, Managing Director & CEO
Andrew Draffin, Company Secretary
Panmure Gordon (UK) Limited (Nominated Adviser +44 (0) 20 7886
& Joint Broker) 2500
John Prior / Ailsa MacMaster
Corporate Broking: Hugh Rich
OvalX (Joint Broker) +44 (0) 20 7392
Thomas Smith 1568
Tavistock (Financial PR & IR) +44 (0) 20 7920
Simon Hudson / Nick Elwes 3150
CHAIRMAN AND CEO'S REVIEW
We are pleased to present to you the Global Annual Financial
Report for the year ended 30 June 2022.
The Company's focus during the reporting period, and
subsequently, has been on ongoing exploration work and its farm-out
process in respect of its Namibian licence PEL0094, and the
continued strengthening of its finances in order to maintain its
options for this licence and/or the possible pursuit of other
strategic investments.
In August 2021, Global notified the Ministry of Mines and Energy
of its intention to enter into the remaining one year of the
PEL0094 Initial Exploration Period, expiring in September 2022. The
commitment for this period was to shoot a 2,000 square kilometre 3D
seismic data survey. During the period Global has continued with
its technical work on the licence. After successfully mapping, with
the latest technology, the Barremian-Aptian Kudu Shale source rock
from previous drilling in the Walvis Basin into its licence area
the Company carried out a study with well-regarded consultants
which predicted that in all cases the source rock is mature in the
northern Walvis Basin and that sufficient volumes of hydrocarbons
have migrated into the prospects in PEL0094. In addition, in June
2022 the Company licensed a satellite radar study over the Walvis,
in which a number of oil seeps were identified within PEL0094. All
of this work further supports the Company's interpretation of a
working petroleum system in the area.
In April 2022 the Company announced that the Namibian
authorities had granted a one year extension to the Initial
Exploration Period, from September 2022 to September 2023.
In February 2022, the oil and gas exploration sector of Namibia
was transformed by the announcement of two significant discoveries
of oil and gas in the Orange Basin, southern Namibia, heralding a
new petroleum province offshore Namibia. The Shell operated Graff-1
well made a discovery of light oil in both primary and secondary
targets, proving a working petroleum system for light oil. This was
closely followed by the TotalEnergies operated Venus-1X well which
discovered light oil with associated gas.
Evaluation of the discoveries has commenced with Shell's La
Rona-1 well completed earlier in 2022, and further exploration and
appraisal drilling by Shell and TotalEnergies is understood to be
commencing in Q4 2022.
The Graff and Venus discoveries, and Global's prospects and
leads on PEL0094, are all interpreted by the Company to be sourced
by the Barremian-Aptian Kudu Shale. The apparent technical
similarities in both source and reservoir between these discoveries
and the prospectivity in our own licence is highly encouraging.
Accordingly the Company believes that the Walvis Basin, where
PEL0094 is situated, also has the potential to be extremely
successful, and has the advantage of much shallower water depths
generally than the discoveries in the south.
In November 2021 the Company appointed PVE Consultants to assist
in the farm-out of PEL0094, ahead of the exploration drilling in
the Orange Basin. Apart from the technical similarities with
PEL0094 referred to above, the successful outcome of the Graff-1
and Venus-1X wells has sparked much interest in Namibian offshore
exploration as a whole. The upcoming exploration and appraisal
wells are widely expected to accelerate this interest even
further.
In Italy, regarding the outstanding appeal in relation to the
Company's four licence applications in the Adriatic Sea
("Applications"), the judgement of the European Court was announced
by the Company in January 2022. The Court found, in effect, that
the Company's Applications offshore Italy do not contravene EU
law.
As previously announced by the Company, the 'Plan for
Sustainable Energy Transition of Appropriate Areas' ("Plan") came
into effect in Italy in February 2022.
A key structural component of the Plan is the provision that in
future only exploration for gas (as opposed to oil) will be
permitted in Italy, both onshore and offshore. With specific regard
to the Applications, the Plan also provides that certain sections
of the application areas as previously constituted are deemed to be
excluded, a process referred to by the relevant authorities as "re-
perimeterisation".
Notwithstanding the Company's reservations as to the
practicality of gas-only exploration - a reservation which Global
believes is widely shared within the Energy Industry and beyond -
the Company provided the Italian authorities technical evidence of
the gas prospectivity within the reduced application areas, also
thereby accepting the re-perimeterisation of those areas.
The Italian Ministry of Ecological Transition has informed
Global that the Company's exploration objectives in the
Applications are in compliance with the provisions of the Plan, and
that there is no impediment to the continuation of the process
towards eventual award of the exploration permits. The Company has
decided to continue the process accordingly, and good progress is
being made.
However, the Company will continue to monitor both the evolving
requirements of the application process and the wider legal and
political environment in Italy - we are informed that, following
the recent General Election in Italy, the coalition partners in the
new Administration have all expressed support for future
exploitation of oil & gas in the country. If the Applications
are ultimately successful and the Company decides to accept award
of exploration permits, we would seek a partner at the appropriate
time.
Corporate
The Company notes the continuing volatility of the oil price,
which had fallen significantly due to the impact of the COVID-19
pandemic. Its subsequent recovery as demand for oil has increased
has recently been over-shadowed by the invasion of the Ukraine,
which has caused the oil price to reach levels not seen for many
years, with heightened supply concerns. As a pre- revenue company
in the early stages of exploration, Global does not directly
benefit from current high oil prices. The Company has no direct or
indirect exposure to Russia and is not directly impacted by
sanctions imposed on the country and/or people and entities
connected with it.
The strengthening of the Company's financial position, which
commenced in 2020, has now seen four successful equity share
placings which have raised combined total gross proceeds of GBP4.2
million (excluding any further proceeds from the future potential
exercise of associated warrants). The most recent of these was
undertaken after the end of the reporting period, in late August
2022, and raised gross proceeds of GBP0.8 million.
We are pleased to have successfully undertaken this
strengthening of Global's finances, and are delighted to welcome
new shareholders to the Company.
Proceeds from these equity raises has enabled the Company to
continue its exploration activities in Namibia, including entering
the remaining one year Initial Exploration Period on PEL0094 now
extended until September 2023, together with ongoing efforts to
farm- out part of its equity in this licence.
Financial
During the year ended 30 June 2022, the Group recorded a loss
after tax of US$1,647,094 (2021: US$3,927,794). Cash balances at 30
June 2022 amounted to US$1,139,775 (30 June 2021: US$1,834,434),
the decrease reflecting ongoing expenditure partly offset by the
proceeds from the equity raise completed in August 2021. On 30
September 2022 Global had cash balances of US$1,498,293 following
the equity raise completed after the end of the reporting period.
The Group has no debt outside of suppliers who are settled on
normal commercial terms
Strategy and Outlook
The recent drilling successes in the Orange Basin are expected
to bring a very strong boost to both industry and investor
confidence in relation to Namibian offshore exploration generally.
We believe that Global is well positioned to benefit from this, and
we are continuing with our farm-out process to fund the next stage
of exploration on our licence.
In Italy, we will endeavour to progress our Applications in the
context of the prevailing political climate. Finally, the Company
will continue to explore all strategic alternatives in order to
maximise shareholder value.
John van der Welle Peter Hill
Chairman Chief Executive Officer
OPERATING AND FINANCIAL REVIEW
Namibian Project
The Namibian Project consists of an operated 78 per cent
participating interest in Petroleum Exploration Licence ("PEL")
0094 (acquired in 2018) which covers Block 2011A (see Figure 1).
The Company also previously held an operated 85 per cent
participating interest in PEL0029 covering Blocks 1910B and 2010A.
PEL0029 expired on 3 December 2020, enabling the Company to focus
its technical efforts on PEL0094.
In July 2020 the Company announced updated estimates of
Prospective Resources for PEL0094 after interpretation of the
existing 3D seismic data, licensed from the Namibian State Oil
Company, NAMCOR, in March 2020. The agreement with NAMCOR to
licence the 3D seismic data on Block 2011A in return for extra
equity in the licence helped conserve the Company's cash resources.
The interpretation of the 3D seismic data led to increased
confidence in the two prospects, Marula and Welwitschia Deep. The
Marula prospect is a distal pinchout of Upper Cretaceous sandstones
onto the Welwitschia high. The Welwitschia Deep prospect was also
confirmed by interpretation of the 3D seismic data as an Albian
carbonate reservoir.
The four-year Initial Exploration Period of PEL0094 had
initially been split into two sub-periods of two years each, with
the first sub-period ending in September 2020. By an amendment
agreed with the Ministry of Mines and Energy (the "Ministry"), the
Ministry gave Global a further year to fulfill a modified work
commitment, concentrated on the licensing of existing seismic data
and the carrying out of studies specifically designed to focus on
the exciting Marula and Welwitschia Deep prospects.
In November 2020 the Company purchased historic 2D seismic data
in order to map the source rock from the Wingat-1 and Murombe-1
wells in the south of the Walvis Basin into Global's acreage to the
north. The Company also commissioned studies to examine the
amplitude with offset ("AVO") response of the source rock in both
the wells and on the seismic data, and also performed seismic
inversion on some of the data. The Company's interpretation of this
data, together with the commissioned studies, enabled the source
rock to be mapped with even further confidence into Global's
acreage. In December 2020 the Company purchased further historic 2D
seismic data in order to improve interpretation of both its Marula
prospect and also the relatively under-explored eastern part of the
block.
Consequently, in January 2021 the Company announced an updated
estimate of Prospective Resources for PEL0094. The additional
Prospective Resources in the east of PEL0094 consist of 7 new leads
with a total unrisked gross Prospective Resources (Best Estimate)
of 2,048 million barrels of oil ("barrels"). As previously reported
in July 2020, the pre-existing prospects - Marula and Welwitschia
Deep - contain a total of 881 million barrels, making a new total
on the licence of 2,929 million barrels unrisked gross Prospective
Resources (Best Estimate).
Regarding the Prospective Resources attributable to Global, the
total unrisked net Prospective Resources (Best Estimate) now total
2,284 million barrels compared with the previous number of 687
million barrels net to Global - which related to Marula and
Welwitschia Deep alone. This means that the total unrisked net
Prospective Resources (Best Estimate) - both gross and net - are
over three times as large, due to the new leads identified. When
adjusted for exploration risk, Prospective Resources have
approximately doubled.
The technical work undertaken in late 2020 more than fulfilled
the firm work commitments for the extended sub-period to September
2021. As well as identification of the significant new leads in the
eastern part of PEL0094, the geological chance of success of Marula
was increased from 18 per cent to 22 per cent and the further work
significantly reinforced the Company's confidence that the source
rock is present and generating oil in PEL0094 and vindicated the
Company's view that the acreage is highly prospective.
In August 2021, Global notified the Ministry of Mines and Energy
of its intention to enter into the remaining one year of the
PEL0094 Initial Exploration Period, expiring in September 2022. The
commitment for this period was to shoot a 2,000 square kilometre 3D
seismic data survey. During the period Global has continued with
its technical work on the licence. After successfully mapping, with
the latest technology, the Barremian-Aptian Kudu Shale source rock
from previous drilling in the Walvis Basin into its licence area,
in late 2021 the company worked with the well-regarded geochemical
consultancy IGI to build a number of petroleum systems models for
the Walvis Basin. This study was further updated in summer 2022 and
predicts that in all cases the source rock is mature in the
northern Walvis Basin and that sufficient volumes of hydrocarbons
have migrated into the prospects in PEL0094. In addition, in June
2022 the Company licensed a satellite radar oil seep study over the
Walvis, in which a number of oil seeps have been identified within
PEL0094. This further supports the Company's interpretation of a
working petroleum system in the area. In April 2022 the Company
announced that the Namibian authorities had granted a one-year
extension to the Initial Exploration Period, from September 2022 to
September 2023.
In February 2022, the oil and gas exploration sector of Namibia
was transformed by the announcement of two significant discoveries
of oil and gas in the Orange Basin, southern Namibia, heralding a
new petroleum province offshore Namibia. The Shell operated Graff-1
well made a discovery of light oil in both primary and secondary
targets, proving a working petroleum system for light oil. This was
closely followed by TotalEnergies operated Venus-1X well which
discovered light oil with associated gas. Further evaluation of the
discoveries has commenced, with Shell's La Rona-1 well completed
earlier in 2022, and further exploration and appraisal drilling by
Shell and TotalEnergies is understood to be commencing in Q4
2022.
The Graff and Venus discoveries, and Global's prospects and
leads on PEL0094, are all interpreted by the Company to be sourced
by the Barremian-Aptian Kudu Shale. The apparent technical
similarities in both source and reservoir between these discoveries
and the prospectivity in our own licence is highly encouraging.
Accordingly, the Company believes that the Walvis Basin, where
PEL0094 is situated, also has the potential to be extremely
successful, and has the advantage of much shallower water depths
generally than the discoveries in the south.
In November 2021 the Company appointed PVE Consultants to assist
in the farm-out of PEL0094, ahead of the exploration drilling in
the Orange Basin. Apart from the technical similarities with
PEL0094 referred to above, the successful outcome of the Graff-1
and Venus-1X wells has sparked much interest in Namibian offshore
exploration as a whole - a development which has become evident to
Global in the course of its farmout of PEL0094, and also to
industry observers generally. The upcoming exploration and
appraisal wells are widely expected to accelerate this interest
even further.
FIGURE 1 - Map of Namibia showing Global Petroleum's Licence
Permit Applications Offshore Italy
In August 2013, the Company submitted applications, proposed
work programmes and budgets to the Italian Ministry of Economic
Development for four exploration areas offshore Italy in the
southern Adriatic (the "Applications"). The Company's four
Application Blocks are contiguous with the Italian median lines
abutting Croatia, Montenegro and Albania respectively (see Figure 2
below).
As previously reported, various local authorities and interest
groups appealed to either the Rome Tribunal or the President of the
Republic against the Environmental Decrees in relation to the
applications of the four areas. Publication of Environmental
Decrees is the final administrative stage before grant of the
Permits. All first instance appeals made to the Rome Tribunal and
to the President of the Republic were subsequently adjudicated in
Global's favour.
However, Puglia, as the Italian region principally interested,
made additional appeals to the Council of State (the highest level
of appeal in Italy) against the judgements of the Rome Tribunal.
The subsequent appeals were heard by the Council of State in
January 2020, and in February 2020 the Council of State issued a
judgement. Essentially, the Council of State suspended the
proceedings before it and referred the matter to the European
Court, requesting the Court to rule whether the four Applications
contravene a relevant EU Directive relating to the maximum
permissible size of individual permits, in particular having regard
to the fact that the four permit applications are contiguous.
The judgement of the European Court was announced by the Company
in January 2022. The Court found, in effect, that the Company's
Applications do not contravene EU law.
Separately from the appeals process above, in February 2019 the
Italian Parliament passed a Bill suspending all hydrocarbon
exploration activities - including permit applications - for a
period of 18 months. Under the proposed legislation, a
Government-appointed Commission was to review all onshore and
offshore areas for the stated purpose of evaluating their
suitability for hydrocarbon exploration and development in the
future. In doing so, the suitability of such activities in the
context of social, industrial, urban, water source and
environmental factors were to be evaluated. In offshore areas,
suitability would additionally be assessed having regard to the
impact of such activity on the littoral environment, marine
ecosystems and shipping routes. Following the 18-month evaluation
period, the intention was that a Hydrocarbon Plan would be
activated, setting out a strategy for future exploration and
development. Following the expiry of its initial 18-month term, the
moratorium was extended twice.
In February 2022, the 'Plan for Sustainable Energy Transition of
Appropriate Areas' ("Plan") was published and came into legal
effect.
A key structural component of the Plan is the provision that in
future only exploration for gas (as opposed to oil) will be
permitted in Italy, both onshore and offshore. With specific regard
to the Applications, the Plan also provides that certain sections
of the application areas as previously constituted are deemed to be
excluded, a process referred to by the relevant authorities as
"re-perimeterisation".
Notwithstanding the Company's reservations as to the
practicality of gas-only exploration - a reservation which Global
believes is widely shared within the Energy Industry and beyond -
the Company provided the Italian authorities technical evidence of
the gas prospectivity within the reduced application areas, also
thereby accepting the re-perimeterisation of those areas.
The Italian Ministry of Ecological Transition has informed
Global that the Company's exploration objectives in the
Applications are in compliance with the provisions of the Plan, and
that there is no impediment to the continuation of the process
towards eventual award of the exploration permits. The Company has
decided to continue the process accordingly, and good progress is
being made.
However, the Company will continue to monitor both the evolving
requirements of the application process and the wider legal and
political environment in Italy - we are informed that, following
the recent General Election in Italy, the coalition partners in the
new Administration have all expressed support for future
exploitation of oil & gas in the country. If the Applications
are ultimately successful and the Company decides to accept award
of exploration permits, we would seek a partner at the appropriate
time.
FIGURE 2 - Map of Global Petroleum's 4 Permit Applications
Offshore Italy in Southern Adriatic
Results of operations
2022 2021
US$ US$
Loss from continuing operations before tax (1,647,094) (3,927,794)
Corporation tax benefit (expense) - -
------------ ------------
Net profit (loss ) (1,647,094) (3,927,794)
============ ============
The results of the Group include revenue from interest income of
US$519 (2021: US$792).
Review of financial conditions
As at 30 June 2022, the Group had cash of US$1,139,775 (2021:
US$1,834,434) and had no debt outside of suppliers who are settled
on normal commercial terms.
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF PROFIT OR LOSS 2022 2021
AND OTHER COMPREHENSIVE INCOME Note US$ US$
FOR THE YEARED 30 JUNE 2022
Continuing operations
Employee benefits expense (450,400) (271,224)
Administrative expense (830,592) (873,302)
Exploration and business development expenses 11 (21,767) (16,070)
Depreciation and amortisation expense (3,439) (3,439)
Other expenses (162,970) (196,303)
Exploration written off 11 - (2,410,272)
Share based payments 19 - (236,790)
Foreign exchange gain (loss) (178,445) 78,814
----------- -----------
Results from operating activities (1,647,613) (3,928,586)
----------- -----------
Finance income 519 792
----------- -----------
Net finance income 519 792
----------- -----------
(Loss) from continuing operations before
tax (1,647,094) (3,927,794)
----------- -----------
Tax expense 3 - -
----------- -----------
(Loss) from continuing operations after
tax (1,647,094) (3,927,794)
----------- -----------
(Loss) for the year (1,647,094) (3,927,794)
=========== ===========
Earnings per share
From continuing and discontinued operations
Basic earnings per share (cents) 6 (0.21) (1.03)
Diluted earnings per share (cents) 6 (0.21) (1.03)
The accompanying notes form part of these financial
statements.
GLOBAL PETROLEUM LIMITED 2022 2021
CONSOLIDATED STATEMENT OF FINANCIAL Note US$ US$
POSITION
AS AT 30 JUNE 2022
Assets Current assets
Cash and cash equivalents 7 1,139,775 1,834,434
Trade and other receivables 8 37,020 80,622
Other assets 12 185,159 39,384
------------- ------------
Total current assets 1,361,954 1,954,440
------------- ------------
Non-current assets
Property, plant and equipment 10 13,158 16,597
Exploration and evaluation assets 11 1,291,599 972,467
------------- ------------
Total non-current assets 1,304,757 989,064
------------- ------------
Total assets 2,666,711 2,943,504
============= ============
Liabilities
Current liabilities
Trade and other payables 13 112,048 83,999
Provisions 14 220,730 163,458
------------- ------------
Total current liabilities 332,778 247,457
------------- ------------
Total liabilities 332,778 247,457
------------- ------------
Net assets 2,333,933 2,696,047
============= ============
Equity
Issued capital 15 43,474,971 42,189,991
Reserves 23 1,249,042 1,249,042
Accumulated losses (42,390,080) (40,742,986)
------------- ------------
Total equity 2,333,933 2,696,047
============= ============
The accompanying notes form part of these financial
statements.
Ordinary Option Foreign Accumulated Total
Reserve Currency Losses
Translation
Reserve
GLOBAL PETROLEUM LIMITED US$ US$ US$ US$ US$
CONSOLIDATED STATEMENT OF CHANGES
IN EQUITY
FOR THE YEARED 30 JUNE 2022
Consolidated Group
Balance at 1 July 2020 39,221,112 964,895 570,410 (37,338,245) 3,418,172
Comprehensive income
Loss for the year - - - (3,927,794) (3,927,794)
--------------- ----------- -------------- -------------- -----------
Total comprehensive income for the
year - - - (3,927,794) (3,927,794)
--------------- ----------- -------------- -------------- -----------
Transactions with owners, in their
capacity as owners, and other
transfers
Issue of shares 3,191,040 - - - 3,191,040
Transaction costs (222,161) - - - (222,161)
Expiry of options - (523,053) - 523,053 -
Issue of options - 236,790 - - 236,790
--------------- ----------- -------------- -------------- -----------
Total transactions with owners and
other transfers 2,968,879 (286,263) - 523,053 3,205,669
--------------- ----------- -------------- -------------- -----------
Balance at 30 June 2021 42,189,991 678,632 570,410 (40,742,986) 2,696,047
=============== =========== ============== ============== ===========
Balance at 1 July 2021 42,189,991 678,632 570,410 (40,742,986) 2,696,047
Comprehensive income
Loss for the year - - - (1,647,094) (1,647,094)
--------------- ----------- -------------- -------------- -----------
Total comprehensive income for the
year - - - (1,647,094) (1,647,094)
--------------- ----------- -------------- -------------- -----------
Transactions with owners, in their
capacity as owners, and other
transfers
Issue of shares 1,367,000 - - - 1,367,000
Transaction costs (82,020) - - - (82,020)
--------------- ----------- -------------- -------------- -----------
Total transactions with owners and
other transfers 1,284,980 - - - 1,284,980
--------------- ----------- -------------- -------------- -----------
Balance at 30 June 2022 43,474,971 678,632 570,410 (42,390,080) 2,333,933
=============== =========== ============== ============== ===========
The accompanying notes form part of these financial
statements.
GLOBAL PETROLEUM LIMITED
CONSOLIDATED STATEMENT OF CASHFLOWS
FOR THE YEARED 30 JUNE 2022
Note 2022 2021
US$ US$
Cash flows from operating activities
Interest received 519 792
Payments to suppliers and employees (1,551,823) (1,368,821)
GST/VAT refunds received 43,602 26,833
------------ ------------
Net cash (used in) operating activities 18a (1,507,702) (1,341,196)
------------ ------------
Cash flows from investment activities
Payments for exploration and business
development expenditure (340,900) (725,054)
Reclassification of bank guarantee (130,050) -
------------ ------------
Net cash (used in) investing activities (470,950) (725,054)
------------ ------------
Cash flows from financing activities
Proceeds from issue of shares 1,367,000 3,191,040
Payments for capital raising costs (82,020) (222,161)
------------ ------------
Net cash provided by financing activities 1,284,980 2,968,879
------------ ------------
Net (decrease)/increase in cash held (693,672) 902,629
Cash and cash equivalents at beginning
of financial year 1,834,434 932,818
Effect of exchange rates on cash holdings
in foreign currencies (987) (1,013)
------------ ------------
Cash and cash equivalents at end of
financial year 7 1,139,775 1,834,434
============ ============
The accompanying notes form part of these financial
statements.
GLOBAL PETROLEUM LIMITED
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2022
Global Petroleum Limited ("Global", the "Company") is a company
domiciled in Australia. Global is a company limited by shares
incorporated in Australia whose shares are publicly traded on the
AIM market of the London Stock Exchange ("AIM"). The consolidated
annual financial statements of the Company as at, and for the 12
months ended, 30 June 2022 comprise the Company and its controlled
entities (together referred to as the "Group"). The Group is a
for-profit entity and is primarily involved in oil and gas
exploration and development.
The consolidated annual financial statements of the Group as at,
and for the year ended, 30 June 2022 are available upon request
from the Company's registered office at C/- DW Accounting &
Advisory, Level 4, 91 William Street, Melbourne, Victoria, 3000,
Australia or at www.globalpetroleum.com.au.
The separate financial statements of the parent entity, Global
Petroleum Limited ("Parent"), have not been presented within this
annual financial report as permitted by the Corporations Act
2001.
The financial statements were authorised for issue on 24 October
2022 by the Board of Directors of the Company.
Note 1 Summary of Significant Accounting Policies
Basis of Preparation
These general purpose consolidated financial statements have
been prepared in accordance with the Corporations Act 2001,
Australian Accounting Standards and Interpretations of the
Australian Accounting Standards Board and in compliance with
International Financial Reporting Standards as issued by the
International Accounting Standards Board. The Group is a for-profit
entity for financial reporting purposes under Australian Accounting
Standards. Material accounting policies adopted in the preparation
of these financial statements are presented below and have been
consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have
been prepared on an accrual basis and are based on historical
costs, modified, where applicable, by the measurement at fair value
of selected non-current assets, financial assets and financial
liabilities.
(a) Going Concern
The financial statements have been prepared on the going concern
basis of accounting, which contemplates the continuity of normal
business activity and the realisation of assets and the settlement
of liabilities in the ordinary course of business.
The Group has no source of operating revenue and settles its
expenditure obligations from existing cash resources. It generated
a loss of US$1,647,094 (2021: loss of US$3,927,794) and had net
cash outflows from the operating activities of US$1,507,702 (2021:
net cash outflows of US$1,341,196) for the year ended 30 June 2022.
As of that date, the Group had net assets of US$2,333,933 (2021:
US$2,696,047) and cash assets of US$1,139,775 (2021: US$1,834,434).
The Group has no debt.
The Directors have prepared a cash flow forecast for the next 12
months based on best estimates of future inflows and outflows of
cash, to support the Group's ability to continue as a going
concern. The ability of the Company to continue as a going concern
is principally dependent upon a combination of one or more of the
following factors - management of existing funds; securing further
funds via raising capital from equity markets (See note 15 - Issued
Share Capital); concluding a farm-out arrangement whereby a farm-
in party would assume the costs of meeting certain future
exploration and other commitments on the Company's Namibian
licence; and the deferral of licence commitments. (See note 11 -
Exploration Assets and note 16 - Future Commitments).
The raising of additional equity capital is subject to market
conditions and investor demand; securing a farm-out requires
agreement with a suitable third party which the Group has not
achieved to date; and any deferral of licence commitments would
require the consent of the Namibian Ministry of Mines and Energy.
As each of these are not within the Company's control, these
conditions constitute a material uncertainty that may cast
significant doubt on the use of the going concern basis of
accounting. However the Directors have a reasonable expectation
that one or more of these actions will be achieved, and following a
successful equity placing in the reporting period which raised
gross proceeds of GBP1.0 million) (previous period - GBP2.4
million), in August 2022, Global announced a further successful
placing of ordinary shares in the Company, raising gross proceeds
of GBP0.8 million (See note 20 - Events After the Reporting
Period). On this basis the Group's projections indicate that it
will have sufficient liquidity to meet its expenditure related
liabilities as they fall due in the next twelve months from the
date of finalising these financial statements.
Accordingly, the Directors have a reasonable expectation that
the Group has adequate resources to continue in operational
existence for the foreseeable future, and therefore the Directors
continue to adopt the going concern basis of accounting in
preparing the financial statements. The financial statements do not
include any adjustments relating to the classification of assets
including Exploration and Evaluation assets, or the recoverability
of asset carrying values, or to the amount and classification of
liabilities, that might result should the Group be unable to
continue as a going concern.
(b) Principles of Consolidation
The consolidated financial statements incorporate all of the
assets, liabilities and results of Global Petroleum Limited and all
of its subsidiaries being entities that the Parent controls. The
Parent 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.
A list of the subsidiaries is provided in Note 9.
The assets, liabilities and results of all subsidiaries are
fully consolidated into the financial statements of the Group from
the date on which control is obtained by the Group. The
consolidation of a subsidiary is discontinued from the date that
control ceases. Inter- company transactions, balances and
unrealised gains or losses on transactions between Group entities
are fully eliminated on consolidation. Accounting policies of
subsidiaries may be changed and adjustments made where necessary to
ensure uniformity of the accounting policies adopted by the
Group.
Equity interests in a subsidiary not attributable, directly or
indirectly, to the Group are presented as "non-controlling
Interests". The Group initially recognises non-controlling
interests that are present ownership interests in subsidiaries and
are entitled to a proportionate share of the subsidiary's net
assets on liquidation at either fair value or the non-controlling
interests' proportionate share of the subsidiary's net assets.
Subsequent to initial recognition, non-controlling interests are
attributed their share of profit or loss and each component of
other comprehensive income. Non-controlling interests are shown
separately within the equity section of the statement of financial
position and statement of comprehensive income. No non-controlling
interests were recognised for the reporting period.
Business Combinations
Business combinations occur where an acquirer obtains control
over one or more businesses.
A business combination is accounted for by applying the
acquisition method, unless it is a combination involving entities
or businesses under common control. The business combination will
be accounted for from the date that control is obtained, whereby
the fair value of the identifiable assets acquired and liabilities
(including contingent liabilities) assumed is recognised (subject
to certain limited exemptions).
When measuring the consideration transferred in the business
combination, any asset or liability resulting from a contingent
consideration arrangement is also included. Subsequent to initial
recognition, contingent consideration classified as equity is not
remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or
liability is remeasured each reporting period to fair value,
recognising any change to fair value in profit or loss, unless the
change in value can be identified as existing at acquisition
date.
All transaction costs incurred in relation to business
combinations, other than those associated with the issue of a
financial instrument, are recognised as expenses in profit or loss
when incurred.
The acquisition of a business may result in the recognition of
goodwill or a gain from a bargain purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment
losses. Goodwill is calculated as the excess of the sum of:
(i) the consideration transferred at fair value;
(ii) any non-controlling interest (determined under either fair
value or proportionate interest method); and
(iii) the acquisition date fair value of any previously held equity interest,
over the acquisition date fair value of any identifiable assets
acquired and liabilities assumed.
The acquisition date fair value of the consideration transferred
for a business combination plus the acquisition date fair value of
any previously held equity interest shall form the cost of the
investment in the separate financial statements.
Changes in the Group's ownership interests in subsidiaries that
do not result in the Group losing control over the subsidiaries are
accounted for as equity transactions. The carrying amounts of the
Group's interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the
subsidiaries. Any difference between the amount by which the
non-controlling interests are adjusted and the fair value of the
consideration paid or received is recognised directly in equity and
attributed to owners of the Group.
When the Group loses control of a subsidiary, a gain or loss is
recognised in profit or loss and is calculated as the difference
between
(i) the aggregate of the fair value of the consideration
received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill), and
liabilities of the subsidiary and any non-controlling interests.
All amounts previously recognised in other comprehensive income in
relation to that subsidiary are accounted for as if the Group had
directly disposed of the related assets or liabilities of the
subsidiary (i.e. reclassified to profit or loss or transferred to
another category of equity as specified/permitted by applicable
AASB Accounting Standards). The fair value of any investment
retained in the former subsidiary at the date when control is lost
is regarded as the fair value on initial recognition for subsequent
accounting under AASB 139: Financial Instruments: Recognition and
Measurement, when applicable, the cost on initial recognition of an
investment in an associate or a joint venture.
The amount of goodwill recognised on acquisition of each
subsidiary in which the Group holds less than 100% interest will
depend on the method adopted in measuring the non-controlling
interest. The Group can elect in most circumstances to measure the
non- controlling interest in the acquiree either at fair value
(full goodwill method) or at the non-controlling interest's
proportionate share of the subsidiary's identifiable net assets
(proportionate interest method). In such circumstances, the Group
determines which method to adopt for each acquisition and this is
stated in the respective note to the financial statements
disclosing the business combination.
Under the full goodwill method, the fair value of the
non-controlling interest is determined using valuation techniques
which make the maximum use of market information where
available.
Goodwill on acquisitions of subsidiaries is included in
intangible assets. Goodwill on acquisition of associates is
included in investments in associates.
Goodwill is tested for impairment annually and is allocated to
the Group's cash-generating units or groups of cash-generating
units, representing the lowest level at which goodwill is monitored
and not larger than an operating segment. Gains and losses on the
disposal of an entity include the carrying amount of goodwill
related to the entity disposed of.
(c) Corporation Tax
The corporation tax expense (income) for the year comprises
current corporation tax expense (income) and deferred tax expense
(income).
Current corporation tax expense charged to profit or loss is the
tax payable on taxable income for the current period. Current tax
liabilities (assets) are measured at the amounts expected to be
paid to (recovered from) the relevant taxation authority using tax
rates (and tax laws) that have been enacted or substantively
enacted by the end of the reporting period.
Deferred tax expense reflects movements in deferred tax asset
and deferred tax liability balances during the year as well as
unused tax losses.
Current and deferred corporation tax expense (income) is charged
or credited outside profit or loss when the tax relates to items
that are recognised outside profit or loss or arising from a
business combination.
A deferred tax liability shall be recognised for all taxable
temporary differences, except to the extent that the deferred tax
liability arises from: (a) the initial recognition of goodwill; or
(b) the initial recognition of an asset or liability in a
transaction which: (i) is not a business combination; and (ii) at
the time of the transaction, affects neither accounting profit nor
taxable profit (tax loss).
Except for business combinations, no deferred corporation tax is
recognised from the initial recognition of an asset or liability,
where there is no effect on accounting or taxable profit or
loss.
Deferred tax assets and liabilities are calculated at the tax
rates that are expected to apply to the period when the asset is
realised or the liability is settled and their measurement also
reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability. With
respect to non-depreciable items of property, plant and equipment
measured at fair value and items of investment property measured at
fair value, the related deferred tax liability or deferred tax
asset is measured on the basis that the carrying amount of the
asset will be recovered entirely through sale. When an investment
property that is depreciable is held by the entity in a business
model whose objective is to consume substantially all of the
economic benefits embodied in the property through use over time
(rather than through sale), the related deferred tax liability or
deferred tax asset is measured on the basis that the carrying
amount of such property will be recovered entirely through use.
Deferred tax assets relating to temporary differences and unused
tax losses are recognised only to the extent that it is probable
that future taxable profit will be available against which the
benefits of the deferred tax asset can be utilised, unless the
deferred tax asset relating to temporary differences arises from
the initial recognition of an asset or liability in a transaction
that:
- is not a business combination; and
- at the time of the transaction, affects neither accounting
profit nor taxable profit (tax loss).
Where temporary differences exist in relation to investments in
subsidiaries, branches, associates, and joint ventures, deferred
tax assets and liabilities are not recognised where the timing of
the reversal of the temporary difference can be controlled and it
is not probable that the reversal will occur in the foreseeable
future.
Current tax assets and liabilities are offset where a legally
enforceable right of set-off exists and it is intended that net
settlement or simultaneous realisation and settlement of the
respective asset and liability will occur. Deferred tax assets and
liabilities are offset where: (i) a legally enforceable right of
set-off exists; and (ii) the deferred tax assets and liabilities
relate to corporation taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities
where it is intended that net settlement or simultaneous
realisation and settlement of the respective asset and liability
will occur in future periods in which significant amounts of
deferred tax assets or liabilities are expected to be recovered or
settled.
(d) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair
value on either a recurring or non-recurring basis, depending on
the requirements of the applicable accounting standard.
Fair value is the price the Group would receive to sell an asset
or would have to pay to transfer a liability in an orderly (i.e.
unforced) transaction between independent, knowledgeable and
willing market participants at the measurement date.
As fair value is a market-based measure, the closest equivalent
observable market pricing information is used to determine fair
value. Adjustments to market values may be made having regard to
the characteristics of the specific asset or liability. The fair
values of assets and liabilities that are not traded in an active
market are determined using one or more valuation techniques. These
valuation techniques maximise, to the extent possible, the use of
observable market data.
To the extent possible, market information is extracted from
either the principal market for the asset or liability (i.e. the
market with the greatest volume and level of activity for the asset
or liability) or, in the absence of such a market, the most
advantageous market available to the entity at the end of the
reporting period (i.e. the market that maximises the receipts from
the sale of the asset or minimises the payments made to transfer
the liability, after taking into account transaction costs and
transport costs).
For non-financial assets, the fair value measurement also takes
into account a market participant's ability to use the asset in its
highest and best use or to sell it to another market participant
that would use the asset in its highest and best use.
The fair value of liabilities and the entity's own equity
instruments (excluding those related to share-based payment
arrangements) may be valued, where there is no observable market
price in relation to the transfer of such financial instruments, by
reference to observable market information where such instruments
are held as assets. Where this information is not available, other
valuation techniques are adopted and, where significant, are
detailed in the respective note to the financial statements.
(e) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost
or fair value as indicated less, where applicable, any accumulated
depreciation and impairment losses.
Plant and equipment
Plant and equipment are measured on the cost basis and therefore
carried at cost less accumulated depreciation and any accumulated
impairment. In the event the carrying amount of plant and equipment
is greater than the estimated recoverable amount, the carrying
amount is written down immediately to the estimated recoverable
amount and impairment losses are recognised in profit or loss. A
formal assessment of recoverable amount is made when impairment
indicators are present (refer to Note 1(h) for details of
impairment).
The carrying amount of plant and equipment is reviewed annually
by the Directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the
basis of the expected net cash flows that will be received from the
asset's employment and subsequent disposal. The expected net cash
flows have been discounted to their present values in determining
recoverable amounts.
The cost of fixed assets constructed within the consolidated
group includes the cost of materials, direct labour, borrowing
costs and an appropriate proportion of fixed and variable
overheads.
Subsequent costs are included in the asset's carrying amount or
recognised as a separate asset, as appropriate, only when it is
probable that future economic benefits associated with the item
will flow to the Group and the cost of the item can be measured
reliably. All other repairs and maintenance are recognised as
expenses in profit or loss during the financial period in which
they are incurred.
Depreciation
The depreciable amount of all fixed assets including buildings
and capitalised leased assets, but excluding freehold land, is
depreciated on a straight-line basis over the asset's useful life
to the Group commencing from the time the asset is held ready for
use. Leasehold improvements are depreciated over the shorter of
either the unexpired period of the lease or the estimated useful
lives of the improvements.
The depreciation rates used for each class of depreciable assets
are:
Class of Fixed Asset Depreciation Rate
Plant and equipment 20%
The assets' residual values and useful lives are reviewed, and
adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its
recoverable amount if the asset's carrying amount is greater than
its estimated recoverable amount.
Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains and losses are
recognised in profit or loss in the period in which they arise.
Gains shall not be classified as revenue. When revalued assets are
sold, amounts included in the revaluation surplus relating to that
asset are transferred to retained earnings.
(f) Exploration and Evaluation Expenditure
Expenditure on exploration and evaluation is accounted for in
accordance with the 'area of interest' method and with AASB 6
Exploration for and Evaluation of Mineral Resources, which is the
Australian equivalent of IFRS 6 - Exploration for and Evaluation of
Mineral Resources.
Exploration and evaluation costs are capitalised as intangible
assets and assessed for impairment where facts and circumstances
suggest that the carrying amount of an exploration and evaluation
asset may exceed the recoverable amount. Exploration and evaluation
costs are capitalised if the rights to tenure of the area of
interest are current and either:
(i) the expenditure relates to an exploration discovery where,
at balance sheet date, activities have not yet reached a stage
which permits an assessment of the existence or otherwise of
economically recoverable reserves and active and significant
operations in, or in relation to, the area of interest are
continuing; or
(ii) it is expected that the expenditure will be recouped
through successful exploitation of the area of interest, or
alternatively, by its sale.
Costs incurred before the Group has obtained the legal rights to
explore an area are expensed.
Each potential or recognised area of interest is reviewed every
six months to determine whether economic quantities of reserves
have been found or whether further exploration and evaluation work
is underway or planned to support the continued carry forward of
capitalised costs.
Where a determination is made that there is no further value to
be extracted from the data licenses then any unamortised balance is
written off.
Once management has determined the existence of economically
recoverable reserves for an area of interest, deferred costs are
tested for impairment and then classified from exploration and
evaluation assets to oil and gas assets on the Consolidated
Statement of Financial Position.
The recoverability of the carrying amount of the exploration and
evaluation assets is dependent on successful development and
commercial exploitation, or alternatively, sale of the respective
areas of interest.
(g) Financial Instruments
Recognition and Initial Measurement
Financial assets and financial liabilities are recognised when
the Group becomes a party to the contractual provisions to the
instrument. For financial assets, this is the date that the Group
commits itself to either the purchase or sale of the asset (i.e.
trade date accounting is adopted).
Financial instruments (except for trade receivables) are
initially measured at fair value plus transactions costs except
where the instrument is classified 'at fair value through profit or
loss' in which case transaction costs are expensed to profit or
loss immediately. Where available, quoted prices in an active
market are used to determine fair value. In other circumstances,
valuation techniques are adopted.
Trade receivables are initially measured at the transaction
price if the trade receivables do not contain a significant
financing component or if the practical expedient was applied as
specified in AASB 15.63.
Classification and Subsequent Measurement
Financial liabilities
Financial instruments are subsequently measured at:
- amortised cost; or
- fair value through profit or loss.
A financial liability is measured at fair value through profit
and loss if the financial liability is:
- held for trading; or
- initially designated as at fair value through profit or loss.
All other financial liabilities are subsequently measured at
amortised cost using the effective interest method.
The effective interest method is a method of calculating the
amortised cost of a debt instrument and of allocating interest
expense in profit or loss over the relevant period. The effective
interest rate is the internal rate of return of the financial asset
or liability. That is, it is the rate that exactly discounts the
estimated future cash flows through the expected life of the
instrument to the net carrying amount at initial recognition.
A financial liability is held for trading if:
- it is incurred for the purpose of repurchasing or repaying in the near term; or
- it is part of a portfolio where there is an actual pattern of short-term profit taking.
Any gains or losses arising on changes in fair value are
recognised in profit or loss to the extent that they are not part
of a designated hedging relationship are recognised in profit or
loss.
The change in fair value of the financial liability attributable
to changes in the issuer's credit risk is taken to other
comprehensive income and are not subsequently reclassified to
profit or loss. Instead, they are transferred to retained earnings
upon derecognition of the financial liability. If taking the change
in credit risk in other comprehensive income enlarges or creates an
accounting mismatch, then these gains or losses should be taken to
profit or loss rather than other comprehensive income.
A financial liability cannot be reclassified.
Financial assets
Financial assets are subsequently measured at:
- amortised cost;
- fair value through other comprehensive income; or
- fair value through profit or loss.
Measurement is on the basis of two primary criteria:
- the contractual cash flow characteristics of the financial asset; and
- the business model for managing the financial assets.
A financial asset that meets the following conditions is
subsequently measured at amortised cost:
- the financial asset is managed solely to collect contractual cash flows; and
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding on specified dates.
A financial asset that meets the following conditions is
subsequently measured at fair value through other comprehensive
income:
- the contractual terms within the financial asset give rise to
cash flows that are solely payments of principal and interest on
the principal amount outstanding on specified dates;
- the business model for managing the financial assets comprises
both contractual cash flows collection and the selling of the
financial asset.
By default, all other financial assets that do not meet the
measurement conditions of amortised cost and fair value through
other comprehensive income are subsequently measured at fair value
through profit or loss.
The Company initially designates a financial instrument as
measured at fair value through profit or loss if:
- it eliminates or significantly reduces a measurement or
recognition inconsistency (often referred to as "accounting
mismatch") that would otherwise arise from measuring assets or
liabilities or recognising the gains and losses on them on
different bases;
- it is in accordance with the documented risk management or
investment strategy, and information about the groupings was
documented appropriately, so that the performance of the financial
liability that was part of a group of financial liabilities or
financial assets can be managed and evaluated consistently on a
fair value basis.
The initial designation of the financial instruments to measure
at fair value through profit or loss is a one-time option on
initial classification and is irrevocable until the financial asset
is derecognised.
Derecognition
Derecognition refers to the removal of a previously recognised
financial asset or financial liability from the statement of
financial position.
Derecognition of financial liabilities
A liability is derecognised when it is extinguished (i.e. when
the obligation in the contract is discharged, cancelled or
expires). An exchange of an existing financial liability for a new
one with substantially modified terms, or a substantial
modification to the terms of a financial liability is treated as an
extinguishment of the existing liability and recognition of a new
financial liability.
The difference between the carrying amount of the financial
liability derecognised and the consideration paid and payable,
including any non-cash assets transferred or liabilities assumed,
is recognised in profit or loss.
Derecognition of financial assets
A financial asset is derecognised when the holder's contractual
rights to its cash flows expires, or the asset is transferred in
such a way that all the risks and rewards of ownership are
substantially transferred.
All of the following criteria need to be satisfied for
derecognition of financial asset:
- the right to receive cash flows from the asset has expired or been transferred;
- all risk and rewards of ownership of the asset have been substantially transferred; and
- the Company no longer controls the asset (i.e. the Company has
no practical ability to make a unilateral decision to sell the
asset to a third party).
On derecognition of a financial asset measured at amortised
cost, the difference between the asset's carrying amount and the
sum of the consideration received and receivable is recognised in
profit or loss.
On derecognition of a debt instrument classified as at fair
value through other comprehensive income, the cumulative gain or
loss previously accumulated in the investment revaluation reserve
is reclassified to profit or loss.
On derecognition of an investment in equity which was elected to
be classified under fair value through other comprehensive income,
the cumulative gain or loss previously accumulated in the
investment revaluation reserve is not reclassified to profit or
loss, but is transferred to retained earnings.
Impairment
The Group recognises a loss allowance for expected credit losses
on:
- financial assets that are measured at amortised cost or fair
value through other comprehensive income.
Loss allowance is not recognised for:
- financial assets measured at fair value through profit or loss.
Expected credit losses are the probability-weighted estimate of
credit losses over the expected life of a financial instrument. A
credit loss is the difference between all contractual cash flows
that are due and all cash flows expected to be received, all
discounted at the original effective interest rate of the financial
instrument.
The Group uses the following approaches to impairment, as
applicable under AASB 9: Financial Instruments:
- the general approach
General approach
Under the general approach, at each reporting period, the Group
assesses whether the financial instruments are credit-impaired, and
if:
- the credit risk of the financial instrument has increased
significantly since initial recognition, the Group measures the
loss allowance of the financial instruments at an amount equal to
the lifetime expected credit losses; or
- there is no significant increase in credit risk since initial
recognition, the Group measures the loss allowance for that
financial instrument at an amount equal to 12-month expected credit
losses.
(h) Impairment of Assets
At the end of each reporting period, the Company assesses
whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal
sources of information, including dividends received from
subsidiaries, associates or joint ventures deemed to be out of
pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the
recoverable amount of the asset, being the higher of the asset's
fair value less costs of disposal and value in use, to the asset's
carrying amount. Any excess of the asset's carrying amount over its
recoverable amount is recognised immediately in profit or loss,
unless the asset is carried at a revalued amount in accordance with
another Standard (e.g. in accordance with the revaluation model in
AASB 116: Property, Plant and Equipment ). Any impairment loss of a
revalued asset is treated as a revaluation decrease in accordance
with that other Standard.
Where it is not possible to estimate the recoverable amount of
an individual asset, the entity estimates the recoverable amount of
the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill,
intangible assets with indefinite lives and intangible assets not
yet available for use.
When an impairment loss subsequently reverses, the carrying
amount of the asset (or cash-generating unit) is increased to the
revised estimate of its recoverable amount, but so that the
increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised
for the asset (or cash-generating unit) in prior years. A reversal
of an impairment loss is recognised immediately in profit or loss,
unless the relevant asset is carried at a revalued amount, in which
case the reversal of the impairment loss is treated as a
revaluation increase.
(i) Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control
between parties in a business venture where unanimous decisions
about relevant activities are required.
Separate joint venture entities providing joint venturers with
an interest to net assets are classified as a joint venture and
accounted for using the equity method.
Joint operations represent arrangements whereby joint operators
maintain direct interests in each asset and exposure to each
liability of the arrangement. The company's interests in the
assets, liabilities, revenue and expenses of joint operations are
included in the respective line items of the financial
statements.
Gains and losses resulting from sales to a joint operation are
recognised to the extent of the other parties' interests. When the
Company makes purchases from a joint operation, it does not
recognise its share of the gains and losses from the joint
arrangement until it resells those goods/assets to a third
party.
(j) Foreign Currency Transactions and Balances
Functional and presentation currency
The functional currency of the Company is the currency of the
primary economic environment in which that entity operates. The
financial statements are presented in United States dollars, which
is the Company's functional currency.
Transaction and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the date of the
transaction. Foreign currency monetary items are translated at the
year-end exchange rate. Non-monetary items measured at historical
cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported
at the exchange rate at the date when fair values were
determined.
Exchange differences arising on the translation of monetary
items are recognised in profit or loss, except exchange differences
that arise from net investment hedges.
Exchange differences arising on the translation of non-monetary
items are recognised directly in other comprehensive income to the
extent that the underlying gain or loss is recognised in other
comprehensive income, otherwise the exchange difference is
recognised in the profit or loss.
The Company
The financial results and position of foreign operations whose
functional currency is different from the entity's presentation
currency are translated as follows:
- assets and liabilities are translated at exchange rates
prevailing at the end of the reporting period;
- income and expenses are translated at exchange rates on the
date of transaction; and
- all resulting exchange differences are recognised in other
comprehensive income.
Exchange differences arising on translation of foreign
operations with functional currencies other than United States
dollars are recognised in other comprehensive income and included
in the foreign currency translation reserve in the statement of
financial position and allocated to non-controlling interest where
relevant. The cumulative amount of these differences is
reclassified into profit or loss in the period in which the
operation is disposed of.
(k) Employee Benefits
Short-term employee benefits
Provision is made for the Company's obligation for short-term
employee benefits. Short-term employee benefits are benefits (other
than termination benefits) that are expected to be settled wholly
before twelve months after the end of the annual reporting period
in which the employees render the related service, including wages,
salaries and sick leave. Short-term employee benefits are measured
at the (undiscounted) amounts expected to be paid when the
obligation is settled.
The Company's obligations for short-term employee benefits such
as wages, salaries and sick leave are recognised as part of current
trade and other payables in the statement of financial position.
The Company's obligations for employees' annual leave and long
service leave entitlements are recognised as provisions in the
statement of financial position.
Other long-term employee benefits
Provision is made for employees' long service leave and annual
leave entitlements not expected to be settled wholly within 12
months after the end of the annual reporting period in which the
employees render the related service. Other long-term employee
benefits are measured at the present value of the expected future
payments to be made to employees.
Expected future payments incorporate anticipated future wage and
salary levels, durations of service and employee departures and are
discounted at rates determined by reference to market yields at the
end of the reporting period on government bonds that have maturity
dates that approximate the terms of the obligations. Any
remeasurements for changes in assumptions of obligations for other
long- term employee benefits are recognised in profit or loss in
the periods in which the changes occur.
The Company's obligations for long-term employee benefits are
presented as non-current provisions in its statement of financial
position, except where the Company does not have an unconditional
right to defer settlement for at least 12 months after the end of
the reporting period, in which case the obligations are presented
as current provisions.
(l) Provisions
Provisions are recognised when the Group has a legal or
constructive obligation, as a result of past events, for which it
is probable that an outflow of economic benefits will result and
that outflow can be reliably measured.
Provisions are measured using the best estimate of the amounts
required to settle the obligation at the end of the reporting
period.
(m) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand and deposits
available on demand with banks, other short-term highly liquid
investments with original maturities of 3 months or less.
(n) Revenue and Other Income
Revenue Recognition
Interest income is recognised using the effective interest
method.
(o)Trade and Other Payables
Trade and other payables represent the liabilities for goods and
services received by the Group that remain unpaid at the end of the
reporting period. The balance is recognised as a current liability
with the amounts normally paid within 30 days of recognition of the
liability. Trade and other payables are initially measured at fair
value and subsequently measured at amortised cost using the
effective interest method.
(p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount
of GST/VAT, except where the amount of GST/VAT incurred is not
recoverable from the relevant taxation authority.
Receivables and payables are stated inclusive of the amount of
GST/VAT receivable or payable. The net amount of GST/VAT
recoverable from, or payable to, the relevant taxation authority is
included with other receivables or payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST/VAT
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to, the relevant
taxation authority are presented as operating cash flows included
in receipts from customers or payments to suppliers.
(q) Comparative Figures
When required by Accounting Standards, comparative figures have
been adjusted to conform to changes in presentation for the current
financial year.
Where the Group retrospectively applies an accounting policy,
makes a retrospective restatement or reclassifies items in its
financial statements, an additional (third) statement of financial
position as at the beginning of the preceding period in addition to
the minimum comparative financial statements is presented.
(r) Critical Accounting Estimates and Judgements
The preparation of the consolidated financial statements in
conformity with IFRS requires management to make judgements,
estimates and assumptions that affect the application of accounting
policies and the reported amounts of assets, liabilities, income
and expenses. Actual results may differ from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing
basis. Revisions to accounting estimates are recognised in the
period in which the estimates are revised and in any future periods
affected.
Information about critical judgements in applying accounting
policies that have the most significant effect on the amounts
recognised in the financial statements is included in the following
Notes:
- Note 11 - Exploration and Evaluation Assets
- Note 3 - Tax Expense
Note 2 Parent Information
The following information has been extracted from 2022 2021
the books and records of the financial information
of the parent entity has been prepared in accordance US$ US$
with Australian Accounting Standards.
Statement of Financial Position
Assets
Current assets 1,361,954 1,949,993
Non-current assets 776,640 333,879
Total assets
2,138,594
2,283,872
Liabilities
Current liabilities 322,900 243,965
Non-current liabilities - -
---------- ----------------
Total liabilities 322,900 243,965
Net assets 1,815,694 2,039,907
Equity
Issued capital 43,474,971 42,189,991
Accumulated losses (42,337,909) (40,828,716)
Option reserve 678,632 678,632
Total equity 1,815,694 2,039,907
----------------------------
Statement of Profit or Loss and Other Comprehensive
Income
Loss for the year (1,509,193) (4,062,776)
Total comprehensive income/(loss) (1,509,193) (4,062,776)
As at 30 June 2022, the parent entity has no capital
commitments (2021: Nil).
Note 3 Tax Expense
(a) The prima facie tax on profit from ordinary activities
before corporation tax is reconciled to corporation tax as
follows:
Consolidated
Group
Prima facie tax payable on profit from ordinary 2022 2021
activities before corporation tax US$ US$
at 19% (2021: 19%)
* Consolidated Group (312,948) (746,281)
Increase (decrease) in corporation tax expense
due to:
Expenditure not allowable for corporation tax purposes 2,826 500,763
Deferred tax assets not recognised 310,122 245,518
---------- ----------
Corporation tax attributable to entity - -
========== ==========
(b) Current tax payable
The Group has no current tax payable (2021: Nil).
On 1 April 2014, Global Petroleum Limited changed its tax
domicile from Australia to the United Kingdom. However, it must be
noted that under Australian tax law, Global Petroleum Limited
remains an Australian tax resident. As a result, Global Petroleum
Limited is a tax resident of both Australia and the United Kingdom.
Under the terms of the Australia-United Kingdom Double Tax Treaty,
Global Petroleum Limited will be a dual resident company deemed to
be a resident in the UK for the purposes of allocating taxing
rights.
Multilateral Instruments (MLI) came into force in January 2019
which impact the tie breaker rule previously used for dual resident
entities. The MLI changes currently cover six of Australia's double
tax treaties which includes the UK. The dual residents entitlement
to any treaty benefits will be denied where the two competent
authorities, the Australia Taxation Office and HM Revenue and
Customs do not reach an agreement on a single jurisdiction of tax
residency. On 13 October 2020, the Company received a decision from
the Australian Taxation Office determining the Company is deemed to
be a resident only in the UK.
(c) Deferred corporation tax
2022 2021
US$ US$
Deferred tax assets
Tax losses available to offset future taxable
profits 4,020,369 3,662,676
Tax benefit not brought to account (4,020,369) (3,662,676)
------------ ------------
- -
============ ============
The amount of UK tax losses carried forward is US$14.72 million
as at 30 June 2022 (2021: US$13.34 million). A corresponding
deferred tax asset, calculated using the rate of 19% (which has
been enacted in the Finance Act 2021 effective from 1 April 2023),
of US$3.68 million (2021: US$3.33 million) has not been recognised
due to insufficient certainty regarding the availability of future
profits against which the losses can be utilised.
In addition the Group has a pool of pre-trading revenue
expenditure of US$0.2 million (2021: US$0.2 million) and a pool of
pre-trading capital expenditure of c. US$8.6 million (2021: US$7.8
million) arising in the overseas subsidiaries for which no deferred
tax asset has been recognised due to insufficient certainty
regarding the availability of future profits against which the
costs can be utilised.
Note 4 Key Management Personnel Compensation
Refer to the Remuneration Report contained in the Directors'
Report for details of the remuneration paid or payable to each
member of the Group's key management personnel (KMP) for the year
ended 30 June 2022.
The totals of remuneration paid to KMP of the Company and the
Group during the year are as follows:
2022 2021
US$ US$
Short-term employee benefits 478,011 393,208
Post-employment benefits 24,135 19,070
Share-based payments - 162,014
-------- --------
Total KMP compensation 502,146 574,292
======== ========
Short-term employee benefits
- these amounts include fees and benefits paid to the
Non-Executive Chairman and Non-Executive Directors as well as all
salary, paid leave benefits, fringe benefits and cash bonuses
awarded to Executive Directors and other KMP.
Post-employment benefits
- these amounts are the current year's estimated costs of
providing for the Group's defined benefits scheme post-retirement,
superannuation contributions made during the year and
post-employment life insurance benefits.
Share-based payments
- these amounts represent the expense related to the
participation of KMP in equity-settled benefit schemes as measured
by the fair value of the options, rights and shares granted on
grant date.
Further information in relation to KMP remuneration can be found
in the Remuneration Report.
Other key management personnel transactions
A number of Directors, or their related parties, hold positions
in other entities that result in them having control or significant
influence over the financial or operating policies of those
entities. A number of these entities transacted with the Company or
its controlled entities in the reporting period.
During the year, the Company paid DW Accounting and Advisory Pty
Ltd, a company controlled by Mr A Draffin US$52,901 (2021:
US$46,671) for company secretarial services and accountancy fees
and Northlands Advisory Services Limited, a company controlled by
Mr J van der Welle, US$22,384 in 2021 financial year for consulting
services.
Note 5 Auditor's Remuneration
2022 2021
US$ US$
Remuneration of the auditor for:
* auditing or reviewing of the Group's financial
statements 23,288 23,358
--------- ---------
23,288 23,358
========= =========
Note 6 Earnings per Share
2022 2021
US$ US$
(a) Reconciliation of earnings to profit or loss
Loss used in calculating basic and diluted earnings per
share (1,647,094) (3,927,794)
Weighted average number of ordinary shares used in calculating
basic earnings per share 787,915,442 380,503,965
Effect of dilutive securities - -
------------ ------------
Adjusted weighted average number of ordinary shares
and potential ordinary shares used in calculating basic
and diluted earnings per share 787,915,442 380,503,965
============ ============
Basic and diluted (loss) per share (0.21) (0.21)
The above data reflects the income and share data used in the
calculations of basic and diluted earnings per share.
Basic earnings per share is calculated by dividing the profit
attributable to equity holders of the Company, excluding any costs
of servicing equity other than ordinary shares, by the weighted
average number of ordinary shares outstanding during the year,
adjusted for bonus elements in ordinary shares issued during the
year.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the
after tax effect of interest and other financing costs associated
with dilutive potential ordinary shares and the weighted average
number of shares assumed to have been issued for no consideration
in relation to dilutive potential ordinary shares.
Note 7 Cash and Cash Equivalents
2022 2021
US$ US$
Cash at bank and on hand 1,139,775 1,834,434
Short-term bank deposits - -
---------- ----------
1,139,775 1,834,434
========== ==========
Reconciliation of cash
Cash and cash equivalents at the end of the financial
year as shown in the
statement of cash flows is reconciled to items
in the statement of financial
position as follows:
Cash and cash equivalents 1,139,775 1,834,434
Bank overdrafts - -
---------- ----------
1,139,775 1,834,434
========== ==========
Note 8 Trade and Other Receivables
2022 2021
US$ US$
Other receivables
- -
* deposits
* GST & VAT receivable 37,020 80,622
------- -------
Total current trade and other receivables 37,020 80,622
======= =======
Credit risk
The Group has no significant concentration of credit risk with
respect to any single counter party or group of counter parties
other than those receivables specifically provided for and
mentioned within Note 8. The class of assets described as Trade and
Other Receivables is considered to be the main source of credit
risk related to the Group.
On a geographic basis, the Group has significant credit risk
exposures in United Kingdom and Australia given the substantial
operations in those regions. The Group's exposure to credit risk
for receivables at the end of the reporting period in those regions
is as follows:
2022 2021
US$ US$
Australia 5,271 11,030
United Kingdom 31,749 69,592
------- -------
37,020 80,622
======= =======
The Group always measures the loss allowance for trade
receivables at an amount equal to lifetime expected credit loss.
The expected credit losses on trade receivables are estimated using
a provision matrix by reference to past default experience of the
debtor and an analysis of the debtor's current financial position,
adjusted for factors that are specific to the debtors, general
economic conditions of the industry in which the debtors operate
and an assessment of both the current as well as the forecast
direction of conditions at the reporting date.
There has been no change in the estimation techniques or
significant assumptions made during the current reporting
period.
The Group writes off a trade receivable when there is
information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g.
when the debtor has been placed under liquidation or has entered
into bankruptcy proceedings, or when the trade receivables are over
two years past due, whichever occurs earlier. None of the trade
receivables that have been written off is subject to enforcement
activities.
2022 2021
US$ US$
Financial Assets Measured at Amortised Cost $ $
Trade and other receivables
* Total current 37,020 80,622
- -
* Total non-current
------- -------
Total financials assets measured at amortised
cost 37,020 80,622
======= =======
Note 9 Interest in Subsidiaries
(a) Information about Principal Subsidiaries
The subsidiaries listed below have share capital consisting
solely of ordinary shares or ordinary units which are held directly
by the Group. The proportion of ownership interests held equals the
voting rights held by Group. Each subsidiary's principal place of
business is also its country of incorporation.
Ownership interest held
Name of subsidiary Principal place of business 2022 2021
(%) (%)
Global Petroleum Exploration
Limited United Kingdom 100% 100%
Global Petroleum Namibia
Limited British Virgin Islands 100% 100%
Global Petroleum UK Limited
(1) United Kingdom - 100%
(1) Global Petroleum UK Limited was dissolved
effective September 2021.
Subsidiary financial statements used in the preparation of these
consolidated financial statements have also been prepared as at the
same reporting date as the Group's financial statements.
(b) Significant Restrictions
There are no significant restrictions over the Group's ability
to access or use assets, and settle liabilities, of the Group.
Note 10 Property, Plant and Equipment
2022 2021
US$ US$
Plant and Equipment
Furniture and fittings
At cost 33,535 33,535
Accumulated depreciation (20,377) (16,938)
--------- ---------
13,158 16,597
--------- ---------
Total plant and equipment 13,158 16,597
========= =========
(a) Movements in Carrying Amounts
Movements in carrying amounts for each class of property, plant
and equipment between the beginning and the end of the current
financial year:
Furniture Total
and Fitting US$
US$
Consolidated Group:
Balance at 1 July 2020 20,036 20,036
Depreciation expense (3,439) (3,439)
------------- --------
Balance at 30 June 2021 16,597 16,597
------------- --------
Depreciation expense (3,439) (3,439)
------------- --------
Balance at 30 June 2022 13,158 13,158
============= ========
Note 11 Exploration and Evaluation Assets
2022 2021
US$ US$
Balance at beginning of year 972,467 2,673,754
Expenditure capitalised during the year 319,132 708,985
Expenditure written off during the year - (2,410,272)
---------- ------------
Balance at end of year 1,291,599 972,467
========== ============
At 30 June 2022, the balance of the Group's exploration and
evaluation assets relates solely to its Namibian licence
PEL0094.
During the year, the Group did not incur any exploration and
evaluation expenditure that did not meet the criteria for
recognition as exploration assets under the Group's accounting
policy (2021: Nil).
In addition, an amount of US$21,767 (2021: US$16,070) was spent
on business development, which relates to the Group's activities in
assessing opportunities in the oil and gas sector.
Namibia
In September 2018, Global Petroleum Namibia was awarded licence
PEL0094 and a Petroleum Agreement was signed on 11 September 2018.
The Initial Exploration Period runs for four years, and is divided
into two sub periods of two years each; IEP1, and IEP2. IEP1 runs
from September 2018 to September 2020. During IEP1, Global has
undertaken to purchase and reprocess the existing available 3D
seismic data and other 2D data, as well as some additional G &
G studies. In July 2020, agreement was reached with the Ministry of
Mines and Energy ("MME") for the extension of the sub-period ending
in September 2020 for one year to September 2021, with a modified
work commitment. The Company has met all IEP1 commitments at the
date of this report. In August 2021, the Company announced that the
Namibian authorities had acknowledged the exercise by the Company
of its option to enter into the next sub-period of PEL0094 from
September 2021 to September 2022. In April 2022 the Company
announced that the Namibian authorities had granted a one year
extension to the Initial Exploration Period, from September 2022 to
September 2023.
Exploration commitments on the Company's exploration tenements
are detailed in Note 16.
Note 12 Other Assets
2022 2120
US$ US$
Current
Prepayment 55,109 39,384
Bank guarantee 130,050 -
---------- --------
185,159 39,384
========== ========
Note 13 Trade and Other Payable
2022 2021
US$ US$
Current Unsecured liabilities
Trade payables 16,935 35,161
Sundry payables and accrued expenses 95,113 48,838
-------- -------
112,048 83,999
======== =======
Financial liabilities at amortised cost classified
as trade and other payables
Trade and other payables
* Total current 112,048 83,999
- -
* Total non-current
-------- -------
Financial liabilities as trade and other payables 112,048 83,999
======== =======
Note 14 Provisions
2022 2021
US$ US$
Current Employee benefits
Opening balance at 1 July 163,458 166,309
Movement in provisions 57,272 (2,851)
-------- --------
Balance at 30 June 220,730 163,458
======== ========
Provision for Employee Benefits
Provision for employee benefits represents amounts accrued for
annual leave and long service leave.
Liabilities for wages, salaries and remuneration, including
non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the reporting date are
recognised in provisions in respect of employees' services up to
the reporting date and are measured at the amounts expected to be
paid when the liabilities are settled. Liabilities for
non-accumulating sick leave are recognised when the leave is taken
and measured at the rates paid or payable. Employee benefits
payable later than one year are measured at the present value of
the estimated future cash flows to be made for those benefits.
Note 15 Issued Capital
2022 2021
US$ US$
811,541,816 (2021: 611,541,816) fully paid ordinary
shares 43,474,971 42,189,991
----------- -----------
43,474,971 42,189,991
=========== ===========
At 30 June 2022, the Group has authorised share capital
amounting to 811,541,816 fully paid ordinary shares. The shares
have no par value.
2022 2021
(a) Ordinary Shares No. US$ No. US$
At the beginning of the reporting period 611,541,816 42,189,991 202,652,927 39,221,112
Shares issued during the year 200,000,000 1,367,000 408,888,889 3,191,040
Less: Transaction costs - (82,020) - (222,161)
------------- ----------- ------------- -----------
At the end of the reporting period 811,541,816 43,474,971 611,541,816 42,189,991
============= =========== ============= ===========
(b) Options 2022 2021
Number Weighted Number Weighted
of options average of options average
exercise exercise
price price
US$ US$
At the beginning of the reporting period 27,100,000 0.0380 8,100,000 0.0380
Options issued during the year - - 19,000,000 0.0143
------------- ----------- ------------- -----------
At the end of the reporting period 27,100,000 0.0214 27,100,000 0.0214
============= =========== ============= ===========
(c) Warrants 2022 2021
Number Weighted Number Weighted
of warrants average of warrants average
exercise exercise
price price
GBP GBP
At the beginning of the reporting period 297,777,778 0.012 - -
Warrants issued during the year 100,000,000 0.010 297,777,778 0.012
------------- ----------- ------------- -----------
At the end of the reporting period 397,777,778 0.011 297,777,778 0.012
============= =========== ============= ===========
(d) Capital 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. Given the stage of development of the Group, the Board's
objective is to minimise debt and to raise funds as required through
the issue of new shares. The Company conducted one equity fund-raisings
during the reporting period and one after the year-end. (See Note 1(a)
- Going Concern and Note 20 - Events After the Reporting Period)
There were no changes in the Group's approach to capital management
during the year. The Group is not subject to any externally imposed
capital requirements.
(e) Dividends
No dividends have been paid or declared during the reporting
year (2021: Nil).
(f) Capital Raise
In August 2022, the Company completed a capital raise where an
additional 228,571,428 ordinary shares were issued bringing the
total ordinary shares on issue to 1,040,113,244 as at the date of
this report.
Note 16 Commitments
(a) Exploration expenditure commitments
In order to maintain current rights of tenure to exploration
tenements, the Group is required to perform minimum exploration
work to meet the minimum expenditure requirements specified by
various foreign governments where exploration tenements are held.
These obligations are subject to renegotiation when application for
a tenement is made and at other times. These obligations are not
provided for in the financial statements. Financial commitments for
subsequent periods can only be determined at future dates, as the
success or otherwise of exploration programmes determines courses
of action allowed under options available in tenements. The Group's
only exploration expenditure commitments relate to its interest in
joint ventures.
(b) Namibia Licence PEL0094
Global was awarded licence PEL0094 in Namibia in September 2018,
and a Petroleum Agreement was signed on 11 September 2018. The
Initial Exploration Period ("IEP") runs for four years, and is
divided into two sub periods of two years each; IEP1, and IEP2. IEP
1 runs from December 2018 to December 2020. In July 2020, agreement
was reached with the MME for an extension of the sub period ending
September 2020 for one year to September 2021, with a modified work
commitment.
During IEP1, Global has undertaken to licence existing seismic
data and the carry out of studies specifically designed to focus on
the Marula and Welwitschia Deep prospects. The technical work
undertaken in late 2020 has more than fulfilled the firm work
commitments in respect of IEP1. In August 2021, the Company elected
to enter the next licence sub-period IEP2 until September 2022. The
commitment is to shoot and process a new 2,000 square kilometre 3D
seismic data survey. In April 2022 the Company announced that the
Namibian authorities had granted a one-year extension to the
Initial Exploration Period, from September 2022 to September
2023.
Global Petroleum Namibia Limited has an 78 per cent interest in
the PEL0094, however it is responsible for 100 per cent of the
expenditure requirements with its joint venture partners holding a
total of 22 per cent free carried interest.
With respect to PEL0029 (Blocks 1910B and 2010A), the licence
was issued on 3 December 2010 and expired under its terms on 3
December 2020, further extensions not being permitted under
Namibian petroleum exploration law. The Company completed its
outstanding licence work programme commitments for PEL0029 under
budget in the latter part of 2020.
Note 17 Operating Segments
General Information
Identification of reportable segments
The Group operates in the oil and gas exploration, development
and production segments as described below: The Group currently
holds a prospective oil and gas exploration interest offshore
Namibia.
Basis of accounting for purposes of reporting by operating
segments
(a) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of
Directors, being the chief operating decision makers with respect
to operating segments, are determined in accordance with accounting
policies that are consistent with those adopted in the annual
financial statements of the Group.
(b) Intersegment transactions
An internally determined transfer price is set for all
intersegment sales. This price is reset quarterly and is based on
what would be realised in the event the sale was made to an
external party at arm's length. All such transactions are
eliminated on consolidation of the Group's financial
statements.
Corporate charges are allocated to reporting segments based on
the segment's overall proportion of revenue generation within the
Group. The Board of Directors believes this is representative of
likely consumption of head office expenditure that should be used
in assessing segment performance and cost recoveries.
Intersegment loans payable and receivable are initially
recognised at the consideration received/to be received net of
transaction costs. If intersegment loans receivable and payable are
not on commercial terms, these are not adjusted to fair value based
on market interest rates. This policy represents a departure from
that applied to the statutory financial statements.
(c) Segment assets
Where an asset is used across multiple segments, the asset is
allocated to the segment that receives the majority of the economic
value from the asset. In most instances, segment assets are clearly
identifiable on the basis of their nature and physical
location.
(d) Segment liabilities
Liabilities are allocated to segments where there is direct
nexus between the incurrence of the liability and the operations of
the segment. Borrowings and tax liabilities are generally
considered to relate to the Group as a whole and are not allocated.
Segment liabilities include trade and other payables and certain
direct borrowings.
(e) Unallocated items
The following items of revenue, expense, assets and liabilities
are not allocated to operating segments as they are not considered
part of the core operations of any segment:
-- Derivatives
-- Net gains on disposal of available-for-sale investments
-- Impairment of assets and other non-recurring items of revenue
or expense
-- Corporation tax expense
-- Deferred tax assets and liabilities
-- Current tax liabilities
-- Other financial liabilities
-- Intangible assets
-- Discontinued operations
-- Retirement benefit obligations
(f) Segment information
(i) Segment performance Africa Consolidated
2022 2021 2022 2021
US$ US$ US$ US$
Interest income - - 519 792
Net foreign exchange gain/(loss) - - (178,445) 78,814
Corporate and administration
costs - - (1,469,168) (1,597,128)
Exploration written off - (2,410,272) - (2,410,272)
---------- ------------ ------------ ------------
Loss before corporation tax - (2,410,272) (1,647,094) (3,927,794)
---------- ------------ ------------ ------------
Corporation tax (expense)/benefit - - - -
for continuing operations
---------- ------------ ------------ ------------
Loss for the year - (2,410,272) (1,647,094) (3,927,794)
========== ============ ============ ============
(ii) Segment assets and liabilities Africa Consolidated
Segment assets 2022 2021 2022 2021
US$ US$ US$ US$
Assets 1,291,599 972,467 1,291,599 972,467
---------- ------------ ------------ ------------
Total segment assets 1,291,599 972,467 1,291,599 972,467
---------- ------------ ------------ ------------
Unallocated assets - - 1,375,112 1,971,037
---------- ------------ ------------ ------------
Consolidated assets 1,291,599 972,467 2,666,711 2,943,504
========== ============ ============ ============
Segment liabilities
Liabilities 9,877 3,500 9,877 3,500
---------- ------------ ------------ ------------
Total segment liabilities 9,877 3,500 9,877 3,500
---------- ------------ ------------ ------------
Unallocated liabilities - - 322,901 243,957
---------- ------------ ------------ ------------
Consolidated liabilities 9,877 3,500 332,778 247,457
========== ============ ============ ============
Acquisition of non-current assets,
including capitalised exploration
assets 319,132 708,985 319,132 708,985
Note 18 Cash Flow Information
2022 2021
US$ US$
(a) Reconciliation of cash flows from operating
activities with profit after
Loss after corporation tax (1,647,094) (3,927,794)
Adjustments for non-cash items:
Depreciation 3,439 3,439
Unrealised net foreign exchange (gain)/loss 193,397 (35,844)
Share based payments - 236,790
Exploration written off - 2,410,272
Changes in assets and liabilities, net of
the effects of purchase and disposal of subsidiaries:
Decrease in receivables and prepayments 27,877 15,066
(Increase) in payables (28,049) (40,274)
(Increase) in provisions (57,272) (2,851)
------------ ------------
Net cash (used in) operating activities (1,507,702) (1,341,196)
============ ============
Note 19 Share-based Payments
The aggregate share-based payments for the year ended 30 June
2022 are set out below:
30 June 2022 30 June 2021
Number Weighted Number Weighted
average average exercise
exercise price US$
price US$
Options outstanding as at
1 July 27,100,000 0.0214 8,100,000 0.0380
Granted - - 19,000,000 0.0143
----------- ----------- ----------- ------------------
Options outstanding as at
30 June 27,100,000 0.0214 27,100,000 0.0214
=========== =========== =========== ==================
The following share-based payment arrangements were in existence
during the current reporting period:
Number Grant Date Expiry Exercise Fair value Vesting
Date Price at grant Period
date
----------- --------------- ------------ ------------ ------------ ----------
(i) Option 14 November 13 November
granted 8,100,000 2017 2022 US$0.0190 441,842 N/A
(ii) Options 7 January 21 January
granted 19,000,000 2021 2026 US$0.0143 236,790 N/A
Options were valued using the Black-Scholes model. Where relevant, the
expected life used in the model has been adjusted based on management's
best estimate of the effects of non-transferability of exercise restrictions.
Expected volatility is based on the historical share price volatility
of the Company's ordinary shares over the reporting period.
Number Share price Exercise Expected Option life Risk-free
at grant date Price US$ volatility interest
US$ rate
----------- --------------- ------------ ------------ ------------ ----------
8,100,000 0.024 0.0190 85% 5 years 2.24%
19,000,000 0.013 0.0143 160% 5 years 1.49%
Note 20 Events After the Reporting Period
Other than the following, the directors are not aware of any
significant events since the end of the reporting period.
On 31 August 2022, the Company announced that it had
successfully raised GBP800,000 in aggregate before costs, through
the placing of 228,571,438 Ordinary Shares at a placing price of
0.35 pence per share.
As a further component of the placing, 114,285,714 Warrants were
also issued at an exercise price of 0.70 pence per share for a
period of 2 years (one Warrant for every two new Ordinary Shares).
In the event the Warrants are exercised in due course in full,
associated proceeds will be GBP800,000 with the result that the
Company will have raised gross proceeds of GBP1,600,000 at a
weighted average price of 0.47 pence per share.
Note 21 Related Parties
Related Parties
(a) Ultimate parent
Global Petroleum Limited is the ultimate Parent Entity of the
Group.
(b) Key Management Personnel:
The key management personnel of the Group during or since the
end of the financial year were as follows:
Directors
Mr John van der Welle Non-Executive Chairman
Mr Peter Hill Managing Director and Chief Executive Officer
Mr Andrew Draffin Non-Executive Director and Company
Secretary
Mr Garrick Higgins Non-Executive Director
Mr Peter Taylor (resigned 31 August 2021) Non-Executive Director
Note 22 Financial Risk Management
The Group's principal financial instruments comprise trade and
other receivables, trade and other payables, cash and term
deposits. The main risks arising from the Group's financial
instruments are interest rate risk, foreign currency risk, credit
risk and liquidity risk.
This note presents information about the Group's exposure to
each of the above risks, its objectives, policies and processes for
measuring and managing risk, and the management of capital. Other
than as disclosed, there have been no significant changes since the
previous financial year to the exposure or management of these
risks.
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework. Given
the nature and size of the business, no formal risk management
committees have been established, however responsibility for
control and risk management is delegated to the appropriate level
of management with the Chairman, CEO and Company Secretary (or
their equivalent) having ultimate responsibility to the Board for
the risk management and control framework.
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.
Arrangements put in place by the Board to monitor risk
management include regular reporting to the Board in respect of the
operations and financial position of the Group. The Board also
reviews risks that relate to operations and financial instruments
as required, at least every six months.
Given the uncertainty as to the timing and amount of cash
inflows and outflows, the Group has not implemented any additional
strategies to mitigate the financial risks and no hedging has been
put in place. As the Group's operations change, the Directors will
review this policy periodically going forward.
The totals for each category of financial instruments, measured
in accordance with AASB 139: Financial Instruments: Recognition and
Measurement as detailed in the accounting policies to these
financial statements, are as follows:
2022 2021
Note US$ US$
Financial Assets
Financial assets at amortised cost
* cash and cash equivalents 7 1,139,775 1,834,434
* trade and other receivables 8 37,020 80,622
* bank guarantee 12 130,050 -
---------- ----------
Total financial assets 1,306,845 1,915,056
========== ==========
Financial Liabilities
Financial liabilities at amortised cost
* trade and other payables 13 112,048 83,999
---------- ----------
Total financial liabilities 112,048 83,999
========== ==========
Specific Financial Risk Exposures and Management
The main risks the Group is exposed to through its financial
instruments are credit risk, liquidity risk and market risk
consisting of interest rate risk, foreign currency risk and other
price risk (commodity and equity price risk). There have been no
substantive changes in the types of risks the Group is exposed to,
how these risks arise, or the Board's objectives, policies and
processes for managing or measuring the risks from the previous
period.
a. 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. This arises principally from cash and
cash equivalents and trade and other receivables.
There are no significant concentrations of credit risk within
the Group with exception of cash on deposit as described below.
Trade and other receivables comprise accrued interest, GST, VAT
and other tax refunds due. Where possible, the Group trades only
with recognised, creditworthy third parties. It is the Group's
policy that all customers who wish to trade on credit terms are
subject to credit verification procedures. In addition, receivable
balances are monitored on an ongoing basis with the result that the
Group's exposure to bad debts is not significant. At 30 June 2022,
none (2021: none) of the Group's receivables are past due. No
impairment losses have been recognised in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income.
With respect to credit risk from cash and cash equivalents, the
Group's exposure to credit risk arises from default of the
counterparty, with a maximum exposure equal to the carrying amount
of these instruments.
b. Liquidity risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Board's
approach to managing liquidity is to ensure, as far as possible,
that the Group will have sufficient liquidity to meet its
liabilities when due. As at 30 June 2022, the Group has sufficient
liquid assets to meet its financial obligations.
The table below reflects an undiscounted contractual maturity
analysis for financial assets and financial liabilities. Financial
guarantee liabilities are treated as payable on demand since the
Group has no control over the timing of any potential settlement of
the liabilities.
Cash flows realised from financial assets reflect management's
expectation as to the timing of realisation. Actual timing may
therefore differ from that disclosed. The timing of cash flows
presented in the table to settle financial liabilities reflect the
earliest contractual settlement dates and do not reflect
management's expectations that banking facilities will be rolled
forward.
Financial Liability and Financial Asset Maturity Analysis
Within 1 Year 1 to 5 years Over years Total
5
Consolidated
Group 2022 2021 2022 2021 2022 2021 2022 2021
US$ US$ US$ US$ US$ US$ US$ US$
-------------- -------------- ------------ ---------- --------- -------------- ------ ------------ ---------
Financial liabilities due for
payment
Trade and
other 112,048 83,999 - - - - 112,048 83,999
payables
-------------- ------------ --------------------------------------------- ------------ ---------
Total expected 112,048 83,999 - - - - 112,048 83,999
-------------- ------------ --------------------------------------------- ------------ ---------
Within 1 Year 1 to 5 years Over 5 years Total
Consolidated
Group 2022 2021 2022 2021 2022 2021 2022 2021
US$ US$ US$ US$ US$ US$ US$ US$
-------------- -------------- ------------ ---------- --------- -------------- ------ ------------ ---------
Financial assets - cash
flows realisable
Cash and cash 1,139,775 1,834,434 - - - - 1,139,775 1,834,434
equivalents
Trade, term
and loan 37,020 80,622 - - - - 37,020 80,622
receivables
Bank guarantee 130,050 - - - - - 130,050 -
-------------- ------------ --------------------------------------------- ------------ ---------
Total
anticipated 1,306,845 1,915,056 - - - - 1,306,845 1,915,056
inflows
-------------- ------------ --------------------------------------------- ------------ ---------
Net (outflow)
/ inflow 1,194,797 1,831,057 - - - - 1,194,797 1,831,057
on financial
instruments
============== ============ ============================================= ============ =========
c. Market
Risk
i. Interest rate risk
The Group's exposure to the risk of changes in market interest
rates relates primarily to the cash at bank and term deposits with
a floating interest rate.
These financial assets with variable rates expose the Group to
cash flow interest rate risk. All other financial assets and
liabilities, in the form of receivables and payables, are
non-interest bearing.
Interest rate sensitivity
A sensitivity of 50 basis points ("bp") increase or decrease to
the existing floating rate has been selected as this is considered
reasonable given the current level of both short term and long term
interest rates.
A change of 50 basis points in interest rate at the deporting
date would have increased (decreased) profit or loss and equity by
the amount shown below. The analysis assumes that all other
variables, in particular foreign currency rates, remain
constant.
The Group currently does not engage in any hedging or derivative
transactions to manage interest rate risk.
Profit or Loss
50bp Increase 50bp
Decrease
2022 US$ US$
Cash and cash equivalents 6,349 6,349
2021
Cash and cash equivalents 9,172 9,172
ii. Foreign currency risk
The Company and its subsidiaries in the Group have a functional
currency of the US Dollar. The Group is exposed to foreign currency
risk from transactional currency exposure. Such exposure arises
from transactions denominated in currencies other than the
functional currency of the entities in the Group.
With instruments being held by overseas operations, fluctuations
in the US Dollar and UK Pound Sterling may impact on the Group's
financial results unless those exposures are appropriately
hedged.
The Group currently does not engage in any hedging or derivative
transactions to manage foreign currency risk.
Sensitivity analysis for currency risk
A sensitivity of 10% has been selected as this is considered
reasonable given historic and potential future changes in foreign
currency rates. This sensitivity analysis is prepared as at the
balance sheet date.
Profit Equity
Year ended 30 June 2022 US$ US$
------------------------------- -------------------------------------------- ----------
+/- 10% in AU$/US$ and GBP/US$ 102,021 102,021
Profit US$ Equity
Year ended 30 June 2021 US$
------------------------------- -------------------------------------------- ----------
+/- 10% in AU$/US$ and GBP/US$ 159,520 159,520
There have been no changes in any of the methods or assumptions
used to prepare the above sensitivity analysis from the prior
year.
Fair Values
Fair value estimation
The fair values of financial assets and financial liabilities
are presented in the following table and can be compared to their
carrying amounts as presented in the statement of financial
position.
Differences between fair values and carrying amounts of
financial instruments with fixed interest rates are due to the
change in discount rates being applied by the market since their
initial recognition by the Group.
Note 2022 2021
Carrying Fair Value Carrying Fair Value
Consolidated Group Amount US$ Amount US$
US$ US$
------------------------------- ----- ---------- ----------- ---------- -----------
Financial assets
Financial assets at amortised
cost:
Cash and cash equivalents 7 1,139,775 1,139,775 1,834,434 1,834,434
Trade and other receivables 8 37,020 37,020 80,622 80,622
Bank Guarantee 12 130,050 130,050 - -
---------- ----------- ---------- -----------
Total financial assets 1,306,845 1,306,845 1,915,056 1,915,056
========== =========== ========== ===========
Financial liabilities at
amortised cost
Trade and other payables 13 112,048 112,048 83,999 83,999
---------- ----------- ---------- -----------
Total financial liabilities 112,048 112,048 83,999 83,999
========== =========== ========== ===========
(i) Cash and cash equivalents, trade and other receivables, and trade
and other payables are short-term instruments in nature whose carrying
amounts are equivalent to their fair values.
(ii) Term receivables reprice to market interest rates every three
months, ensuring carrying amounts approximate fair value.
Note 23 Reserves
a. Foreign currency translation reserve
The foreign currency translation reserve comprises all foreign
exchange differences arising from the translation of the financial
statements of foreign operations where their functional currency is
different to the presentation currency of the Parent Entity. As a
result of the change in functional currency of the Company and
several of its subsidiaries on 1 July 2014, no further foreign
currency translation differences were recognised as all entities in
the Group have a US Dollar functional currency.
b. Option reserve
The option reserve comprises the cumulative grant date fair
value of options issued to Directors, other personnel and
consultants over the vesting period.
i. Analysis of items of other comprehensive income by each class of reserve
2022 2021
US$ US$
Foreign currency translation reserve
Opening balance as at 1 July 570,410 570,410
Movement in foreign currency translation reserve - -
---------- ----------
Closing balance as at 30 June 570,410 570,410
========== ==========
Option reserve
Opening balance as at 1 July 678,632 964,895
Movement in option reserve - (286,263)
---------- ----------
Closing balance as at 30 June 678,632 678,632
---------- ----------
Total reserves 1,249,042 1,249,042
========== ==========
Note 24 Interests in Joint Operations
The Group holds interest in various joint ventures, whose
principal activities are in petroleum exploration and production.
Refer to Note 11 - Exploration and Evaluation Assets.
Costs incurred attributable to joint operations have been
capitalised based on accounting policies in Note 1(f) - Exploration
and Evaluation Expenditure.
Included in the assets and liabilities of the Group are the
following assets and liabilities relating to interests in joint
ventures:
2022 2021
US$ US$
Current assets
Trade and other receivables - 4,447
---------- --------
Total current assets - 4,447
---------- --------
Non-current assets
Exploration an evaluation assets 1,291,599 972,467
---------- --------
Total non-current assets 1,291,599 972,467
========== ========
Total assets 1,291,599 976,914
========== ========
Current liabilities
Trade and other payables 9,877 3,500
---------- --------
Total current liabilities 9,877 3,500
========== ========
Total liabilities 9,877 3,500
========== ========
Net assets 1,281,722 973,414
========== ========
The Parent Entity does not guarantee to pay the deficiency of
its controlled entities in the event of a winding up of any
controlled entity.
In accordance with normal industry practice, the Group has
entered into joint ventures with other parties for the purpose of
exploring and developing petroleum interests. If a party to a joint
venture defaults and does not contribute its share of joint venture
obligations, then the other joint venture participants may be
liable to meet those obligations. In this event, the interest in
the permit held by the defaulting party may be redistributed to the
remaining joint venture participants.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
FR MABFTMTBTBTT
(END) Dow Jones Newswires
October 26, 2022 02:00 ET (06:00 GMT)
Global Petroleum (LSE:GBP)
Historical Stock Chart
From Mar 2024 to Apr 2024
Global Petroleum (LSE:GBP)
Historical Stock Chart
From Apr 2023 to Apr 2024
