TIDMMSMN
RNS Number : 4505X
Mosman Oil and Gas Limited
24 November 2017
24 November 2017
Mosman Oil and Gas Limited
("Mosman" or the "Company")
Final Results for the Year ended 30 June 2017
Mosman Oil and Gas Limited (AIM: MSMN) the oil exploration,
development and production company, announces its final results for
the year ended 30 June 2017.
Overview of the financial year
Mosman's strategic objective remains to identify opportunities
which will provide operating cash flow and have development upside,
in conjunction with progressing exploration of existing exploration
permits. Mosman operates with a small number of Employees and
Consultants. This is designed to minimize unnecessary costs. Given
the Company now operates in several countries and in four-time
zones, it is most important that the Board recognises the efforts
of all those people in 2017, a year which has seen a solid change
to producer status.
During the year the Company has been successful in slightly
reducing operational and corporate costs as it looks to meet its
strategic objective. This reduction comes after an even bigger
reduction in 2016, and increases in activity in the United
States.
The activity in the USA led to the evaluation of a number of
producing oil projects and in the last quarter of the financial
year to 30 June 2017 the objective of becoming a producer was
achieved. This has expanded with Mosman now having interests in
three producing projects.
United States
Throughout the year the Company evaluated a number of projects
in the US.
As previously announced the Pine Mills acquisition from Cue
Energy (ASX.CUE) which was initiated in October 2016 was
subsequently abandoned in November 2016 due to a pre-emptive right
being exercised by another party.
Subsequent to this in partnering through strategic alliances
with Blackstone Oil and Gas Inc and other local commercial partners
the Company has established a local US network capable of sourcing
and transacting on deals that provided opportunities to Mosman.
The Strawn acquisition announced in April 2017 was the first
such acquisition and was important for Mosman for a number of
reasons:
1. Established the US presence and locally controlled Mosman operatorship;
2. First opportunity to work through strategic alliance with
Blackstone Oil and Gas (BOG) and establish a jointly funded
project;
3. Gave the Company 'producer' status.
Following the acquisition of Strawn, the Board continued to
examine other projects to expand in the US and gain cost
efficiencies from the local presence. This led to the announcement
of the Arkoma Stacked Pay, in which a 10% direct interest was
acquired in May 2017. It also meant a second transaction with BOG
who purchased a 45% option alongside Mosman who also purchased two
options totalling a further 45% option over the project.
In recognition of Mosman's efforts and costs in sourcing the
Arkoma project BOG paid a cost contribution of US$100,000.
Recently Mosman secured the Welch project, resulting in three
producing projects.
Australia
Throughout the year the Company also completed technical work on
its exploration projects in Australia and reviewed the scope of
further work programs in 2018 whilst conserving cash
commitments.
New Zealand
On the Murchison Permit after several weather delays, the LIDAR
survey was completed in July 2016. In the interests of also
reducing cash committed to exploration Mosman also applied
throughout the year for a Change of Condition application in
December 2016 on its Murchison permit to defer the work program to
allow a measured pace of exploration based on work to date. This
Change of Condition was not granted and recently the necessary but
reluctant decision to surrender the project was made and NZP&M
notified of the Company's surrender of the permit during November
2017.
The Company also announced that it planned to plug and abandon
the three wells on Petroleum Creek. Planning and securing a rig to
carry out the works was a key focus during the year as the return
of the bonds and sale proceeds from local NZ assets following
completion would yield a cash flow surplus following surrender of
the permit.
Post Year End Events
The Board has continued the search for projects that meet the
strategic objectives of the board.
Subsequent to the end of year the Company announced and
completed the acquisition of the Welch project.
The Project is located in the Permian Basin, in and around the
Welch Township in Dawson County, West Texas, approximately 550 km
west of Dallas. It consists of 653 acres of leases (held by
production) with 10 producing wells, 7 injector wells, and 10
shut-in wells. The acquisition included production equipment and
facilities.
Mosman has started workovers and the production optimisation
process, which is already making good progress. Sales for October
2017 were 843 barrels (gross).
To assist in funding the Welch acquisition and upcoming Arkoma
option the Company successfully completed a capital raise in
September 2017 for GBP600,000 by way of a placing and subscription
of 50,000,000 new ordinary shares of no par value in the capital of
the Company at 1.2p per share.
During November 2017 two directors travelled to the US to
discuss the First Option to acquire an additional 20% of the Arkoma
project, as well as meetings with banks to discuss potential debt
facilities.
The outcome was a deferral of Mosman's first option over the
Arkoma project to 1 April 2018. At the same time Mosman also agreed
to fund the cost of three targeted production enhancement
initiatives for US$125,000. The funds would be credited against
Mosman's first option exercise which would therefore become
US$875,000 rather than US$1,000,000 and the three well
recompletions would not only increase production but also provide
further technical data for Mosman to evaluate further investment
into the project and the exercise of future options.
In November 2017, the Company announced its 2017 Annual general
Meeting will be held on 18 December 2017.
Outlook
The future is not yet radiant and life for junior oil and gas
companies is still challenging; but we again look forward with
cautious optimism and the further expansion of production
increasing initiatives in the Company's production assets. The
ongoing work on the Australian permits will continue.
Report and accounts posting
The Company's Annual Report has been dispatched to shareholders
today and will shortly be available from the Company's website
www.mosmanoilandgas.com.
Competent Person's Statement
The information contained in this announcement has been reviewed
and approved by Andy Carroll, Technical Director for Mosman, who
has over 35 years of relevant experience in the oil industry. Mr
Carroll is a member of the Society of Petroleum Engineers.
Market Abuse Regulation (MAR) Disclosure
Certain information contained in this announcement would have
been deemed inside information for the purposes of Article 7 of
Regulation (EU) No 596/2014 until the release of this
announcement.
Enquiries:
Mosman Oil & Gas Limited NOMAD and Broker
John W Barr, Executive SP Angel Corporate Finance
Chairman LLP
Andy Carroll, Technical Stuart Gledhill / Richard
Director Hail / Soltan Tagiev
jwbarr@mosmanoilandgas.com +44 (0) 20 3470 0470
acarroll@mosmanoilandgas.com
Gable Communications Limited
Justine James / John Bick
+44 (0) 20 7193 7463
mosman@gablecommunications.com
Updates on the Company's activities are regularly posted on its
website
www.mosmanoilandgas.com
Glossary of Oil and Gas Terms
% per cent
------------- -----------------------------------------
API American Petroleum institute gravity
is a measure of how heavy or light a
petroleum liquid is compared to water:
if its API gravity is greater than 10,
it is lighter and floats on water, if
less than 10, it is heavier than water
and sinks
------------- -----------------------------------------
bbl barrel
------------- -----------------------------------------
bopd barrels of oil per day
------------- -----------------------------------------
km kilometre
------------- -----------------------------------------
m metre
------------- -----------------------------------------
LPG liquefied petroleum gas
------------- -----------------------------------------
Md or md millidarcy
------------- -----------------------------------------
MMbbl million barrels of oil
------------- -----------------------------------------
OOIP Oil originally in place
------------- -----------------------------------------
Permeability measure of the ease with which a fluid
flows through a rock. The units are
millidarcies or darcies
------------- -----------------------------------------
Porosity measure of how much of a rock is open
space. This space can be between grains
or within cracks or cavities of the
rock. Measured in %.
------------- -----------------------------------------
Directors' Report
Your Directors provide their report as to the results and state
of affairs of the Mosman Oil and Gas Limited Group of Companies,
being the Company (hereafter referred to as "Mosman" or "the
Company"). and its controlled and associated entities, for the year
ended 30 June 2017. Please note that all amounts quoted are
Australian Dollars, unless otherwise stated.
Operations Overview
Summary of Oil & Gas Permits at year end:
Asset Mosman Status Licence Area
Interest Expiry
Date
------------------------ ---------- ------------ ------------ ----------
New Zealand, Petroleum 4 September
Creek 100% Exploration 2017 143 km(2)
------------------------ ---------- ------------ ------------ ----------
31 March
New Zealand, Murchison 100% Exploration 2025 517 km(2)
------------------------ ---------- ------------ ------------ ----------
Australia, Amadeus 15 August
Basin 100% Exploration 2019 818 km(2)
------------------------ ---------- ------------ ------------ ----------
Australia, Amadeus
Basin 100% Application N/A 378 km(2)
------------------------ ---------- ------------ ------------ ----------
Australia, Amadeus 6 November 4,164
Basin 100% Exploration 2018 km(2)
------------------------ ---------- ------------ ------------ ----------
USA, Arkoma 10% Operation N/A 400 acres
------------------------ ---------- ------------ ------------ ----------
1,300
USA, Strawn 50% Operation N/A acres
------------------------ ---------- ------------ ------------ ----------
Recently, the Directors made the decision to write off
previously capitalised costs for the New Zealand assets. The write
offs amounted to $6,708,674 for Petroleum Creek and $719,769 for
Taramakau and Murchison respectively.
Mosman has endeavored to rationalise costs where possible, and
satisfy work obligations on existing permits including Directors
fees which also decreased by over $80,000 over the 2017 year when
compared to 2016.
Murchison Permit, South Island New Zealand (100%)
The potential of a joint venture at Murchison was considered,
however no realistic offers were received and accordingly the
Company announced in November 2017 its decision to surrender this
permit.
Petroleum Creek Permit, South Island New Zealand (100%)
Mosman continues planning the timing of the plug and abandonment
of the three wells drilled on the Petroleum Creek permit in 2014.
No further exploration activity is currently planned for this
permit. Activity may be scheduled when other nearby wells are
abandoned to minimise costs and is likely to occur during first
quarter 2018.
EP 145, EP 156 and EPA 155 (Application), Northern Territory,
Australia (100%)
The Northern Territory Government announced a gas pipeline
connection from the existing NT pipelines to the gas market in
Eastern Australia, which is stimulating acquisitions and gas
exploration in the wider region. The pipeline is now under
construction.
In this context, EP 145 is well placed, adjacent to the Mereenie
producing oil and gas field.
An airborne magnetic survey occurred over EP 156. The results of
that work are currently being incorporated into the geological
model.
The third permit area, EPA 155, is adjacent to an existing oil
field, but is currently in native title moratorium. Discussions
were continuing with Central Land Council (CLC) and subsequent to
balance date a two year extension on consideration of the
application was granted to allow further meetings to discuss land
access and evaluation of the application.
Corporate Financial Position
As at 30 June 2017 the Company had current assets of $2,384,723
(2016: $4,398,773).
Results of Operations
The net loss of the Company for the year ended 30 June 2017 was
$9,186,307 (2016: $4,894,765) principally as a result of a non-cash
write off of previously capitalised assets of $7,428,444 (2016:
$1,456,942).
The Company has been successful in reducing operational and
corporate costs overall.
Events Subsequent to the End of the Financial Period
Material transactions arising since 30 June 2017 which will
significantly affect the operations of the Company, the results of
those operations, or the state affairs of the Company in subsequent
financial periods are:
Welch Permian Basin Project Acquisition - West Texas
On 11 September 2017, the Company purchased several oil and gas
leases that comprise the Welch Permian Basin Project for
USD$310,000. The project consists of 653 acres of leases, with 10
producing well, 7 injector wells and 10 shut-in wells.
Issue of Equity to Fund Expansion
On 29 September 2017, the Company issued 50,000,000 new ordinary
shares at a price of 1.2p per share, raising GBP600,000. Proceeds
from the share issue will allow the Company to concentrate on
expansion opportunities, further development of its USA assets and
providing for working capital requirements.
Murchison Permit Surrender
Mosman has been advised previously by NZPAM that the Change of
Condition application made in December 2016 had been declined.
Mosman's application was to defer the work program to allow a
measured pace of exploration based on work to date However, the
length of time taken to get a decision on this and a prior
application left Mosman in a position whereby the Company had to
make a decision to acquire seismic and drill two wells prior to
April 2018, or surrender the permit.
Since the application for the licence in 2014, the decision by
NZPAM should be seen in the light of the significant drop in the
oil price, with the result investor appetite for expenditure on
long term frontier exploration has changed significantly. Whilst
the exploration potential remains untested, the commercial position
of a discovery in the South Island of NZ remains challenging, as
there are significant capital and operating costs of transporting
any oil or gas to market. Furthermore, there are currently no NZ
approved drilling rigs on the South Island of NZ.
Given the short lead time associated with the work commitments
and significant cost obligations imposed between now and April
2018, the Board has had to make a difficult decision based on the
best interests of shareholders and has, regretfully, decided to
surrender the permit.
Petroleum Creek Update
The Company is planning to plug and abandon the three wells on
the site. The freehold property has been placed for sale and the
sale proceeds are expected to cover the costs associated with
abandonment.
There have been no significant events subsequent to reporting
date other than stated above.
Arkoma Option Extension
On 15 November 2017, the Company announced a deferral of
Mosman's second option over the Arkoma acreage to 1 April 2018 in
exchange for US$125,000. The funds would be credited against
Mosman's first option exercise which would therefore become
US$875,000 rather than US$1,000,000 and there was a requirement for
the funds to be invested into three well recompletions that were
targeted at increasing production and providing further technical
data for Mosman to evaluate further investment into the
project.
Consolidated Statement of Profit or Loss and Other Comprehensive
Income
Year Ended 30 June 2017
All amounts are in Australian Dollars
Notes Consolidated Consolidated
2017 2016
$ $
Revenue 16,037 -
Interest income 2,550 6,623
Other income 31,854 9,923
Administrative expenses (253,313) (322,118)
Corporate expenses 2 (1,152,665) (1,184,225)
Exploration expenses - (37,181)
Employee benefits expense (79,250) (188,539)
Gain/(Loss) on foreign exchange (50,832) (300,354)
Depreciation expense (13,203) (18,171)
Finance expense - (3,383)
Cost of abandoned projects 3 (280,762) (1,293,295)
Loss on financial assets - (89,674)
Pre acquisition costs (40,320) -
Capitalised costs written off (7,428,444) (1,456,942)
Loans to associated entities forgiven - (17,429)
Share of net profit from joint operation 62,041 -
Loss from ordinary activities before income tax expense (9,186,307) (4,894,765)
Income tax expense 4 - -
Net loss for the year (9,186,307) (4,894,765)
-------------------- ----------------------
Other comprehensive loss
Items that may be reclassified to profit or loss:
Exchange differences arising on translation of foreign
- operations (246,484) 523,825
Total comprehensive income attributable to members of the
entity (9,432,791) (4,370,940)
==================== ======================
Basic loss per share
(cents per share) 20 (4.46) cents (2.53) cents
Diluted loss per share
(cents per share) 20 (4.46) cents (2.53) cents
The accompanying notes form part of these financial
statements.
Consolidated Statement of Financial Position
As at 30 June 2017
All amounts are in Australian Dollars
Notes Consolidated Consolidated
30 June 2017 30 June 2016
$ $
Current Assets
Cash and cash equivalents 6 1,666,139 3,758,556
Trade and other receivables 7 394,605 194,115
Other assets 8 35,690 446,095
Other financial assets 9 288,288 7
-------------- --------------
Total Current Assets 2,384,722 4,398,773
-------------- --------------
Non-Current Assets
Property, plant & equipment 10 211,016 224,448
Capitalised formation and acquisition costs 749,620 -
Capitalised oil and gas exploration 11 4,073,115 10,955,203
-------------- --------------
Total Non-Current Assets 5,033,751 11,179,651
-------------- --------------
Total Assets 7,418,473 15,578,424
-------------- --------------
Current Liabilities
Trade and other payables 12 353,769 177,692
Provisions 13 158,165 11,846
Total Current Liabilities 511,934 189,538
-------------- --------------
Total Liabilities 511,934 189,538
-------------- --------------
Net Assets 6,906,539 15,388,886
============== ==============
Shareholders' Equity
Contributed equity 14 25,286,313 25,235,869
Reserves 15 1,058,126 1,304,610
Accumulated losses 16 (19,499,941) (11,151,593)
Equity attributable to shareholders 6,844,498 15,388,886
Non-Controlling interest 62,041 -
Total Shareholders' Equity 6,906,539 15,388,886
============== ==============
The accompanying notes form part of these financial
statements.
Consolidated Statement of Changes in Equity
Year Ended 30 June 2017
All amounts are in Australian Dollars
Accumulated
Losses Contributed Equity Reserves Total
$ $ $ $
Balance at 1 July 2015 (6,256,828) 18,585,595 780,785 13,109,552
Comprehensive income
Loss for the year (4,894,765) - - (4,894,765)
Other comprehensive income for the year - - 523,825 523,825
------------- ------------------- ---------- ------------
Total comprehensive loss for the year (4,894,765) - 523,825 (4,370,940)
Transactions with owners, in their capacity as owners,
and other transfers:
Shares issued to shareholders - 7,242,293 - 7,242,293
Capital raising costs - (592,019) - (592,019)
Total transactions with owners and other transfers - 6,650,274 - 6,650,274
------------- ------------------- ---------- ------------
Balance at 30 June 2016 (11,151,593) 25,235,869 1,304,610 15,388,886
============= =================== ========== ============
Balance at 1 July 2016 (11,151,593) 25,235,869 1,304,610 15,388,886
------------- ------------------- ---------- ------------
Comprehensive income
Loss for the year (9,186,307) - - (9,186,307)
Other comprehensive loss for the year - - (246,484) (246,484)
------------- ------------------- ---------- ------------
Total comprehensive loss for the year (9,186,307) - (246,484) (9,432,791)
Transactions with owners, in their capacity as owners,
and other transfers:
Cancellation of shares on selective share buyback 900,000 (900,000) - -
Shares issued to shareholders - 1,006,536 - 1,006,536
Capital raising costs - (56,759) - (56,759)
Non-controlling interests on acquisition - 667 - 667
Total transactions with owners and other transfers 900,000 50,444 - 950,444
------------- ------------------- ---------- ------------
Balance at 30 June 2017 (19,437,900) 25,286,313 1,058,126 6,906,539
============= =================== ========== ============
These accompanying notes form part of these financial
statements
Consolidated Statement of Cash Flows
Year Ended 30 June 2017
All amounts are in Australian Dollars
Notes Consolidated 2017 Consolidated 2016
$ $
Cash flows from operating activities
Receipts from customers 4,333 -
Interest received & other income 34,565 16,546
Payments to suppliers and employees (1,536,854) (2,507,041)
Interest paid - (3,383)
------------------ ------------------
Net cash outflow from operating activities 21 (1,497,956) (2,493,878)
------------------ ------------------
Cash flows from investing activities
Bonds refunded - 45,300
Disposal of MEO shares - 185,125
Payments for property, plant & equipment - (6,304)
Payments for exploration and evaluation (546,356) (1,717,319)
Payment for Shares in GEM International Limited (504,081) (423,549)
Acquisition of subsidiary, net of cash acquired (789,937) -
Payments for abandoned projects (137,904) -
------------------ ------------------
Net cash outflow from investing activities (1,978,278) (1,916,747)
------------------ ------------------
Cash flows from financing activities
Proceeds from shares issued 1,426,852 7,242,293
Transactions with non-controlling interests 62,041 -
Repayment of borrowings (48,317) -
Payments for costs of capital (56,759) (592,019)
Net cash inflow from financial activities 1,383,817 6,650,274
------------------ ------------------
Net (decrease)/increase in cash and cash equivalents (2,092,417) 2,239,649
------------------ ------------------
Exchange rate adjustment - 401,052
------------------ ------------------
Cash and cash equivalents at the beginning of the financial year 3,758,556 1,117,855
------------------ ------------------
Cash and cash equivalents at the end of the financial year 6 1,666,139 3,758,556
------------------ ------------------
The accompanying notes from part of these financial
statements
Notes to the Financial Statements
Year Ended 30 June 2017
All amounts are Australian Dollars
1 Statement of Accounting Policies
The principal accounting policies adopted in preparing the
financial report of Mosman Oil and Gas Limited (or "the Company")
and Controlled Entities ("Consolidated entity" or "Group"), are
stated to assist in a general understanding of the financial
report. These policies have been consistently applied to all the
years presented, unless otherwise indicated.
Mosman Oil and Gas Limited is a Company limited by shares
incorporated and domiciled in Australia.
(a) Basis of Preparation
This general purpose financial report has been prepared in
accordance with Australian Accounting Standards (including
Australian Interpretations) adopted by the Australian Accounting
Standards Board and the Corporations Act 2001. Compliance with
Australian Accounting Standards ensures that the financial
statements also comply with International Financial Reporting
Standards.
The financial report has been prepared on the basis of
historical costs and does not take into account changing money
values or, except where stated, current valuations of non-current
assets.
The financial report was authorised for issue by the Directors
on 24 November 2017.
(b) Principles of Consolidation and Equity Accounting
The consolidated financial statements incorporate the assets,
liabilities and results of entities controlled by Mosman Oil and
Gas Limited at the end of the reporting period. A controlled entity
is any entity over which Mosman Oil and Gas Limited has the ability
and right to govern the financial and operating policies so as to
obtain benefits from the entity's activities.
Where controlled entities have entered or left the Group during
the year, the financial performance of those entities is included
only for the period of the year that they were controlled. Details
of Controlled and Associated entities are contained in Notes 25 and
26 to the financial statements.
In preparing the consolidated financial statements, all
inter-group balances and transactions between entities in the
consolidated group have been eliminated in full on
consolidation.
Under AASB 11 Joint Arrangements, investments in joint
arrangements are classified as either joint operations or joint
ventures. The classification depends on the contractual rights and
obligations of each investor, rather than the legal structure of
the joint arrangement. Mosman Oil and Gas Limited has a joint
venture.
Joint ventures
Interests in joint ventures are accounted for using the equity
method (see below), after initially being recognised at cost in the
consolidated balance sheet.
Equity method
Under the equity method of accounting, the investments are
initially recognised at cost and adjusted thereafter to recognise
the group's share of the post-acquisition profits or losses of the
investee in profit or loss, and the group's share of movements in
other comprehensive income of the investee in other comprehensive
income. Dividends received or receivable from associates and joint
ventures are recognised as a reduction in the carrying amount of
the investment.
When the group's share of losses in an equity-accounted
investment equals or exceeds its interest in the entity, including
any other unsecured long-term receivables, the group does not
recognise further losses, unless it has incurred obligations or
made payments on behalf of the other entity.
Unrealised gains on transactions between the group and its
associates and joint ventures are eliminated to the extent of the
group's interest in these entities. Unrealised losses are also
eliminated unless the transaction provides evidence of an
impairment of the asset transferred. Accounting policies of equity
accounted investees have been changed where necessary to ensure
consistency with the policies adopted by the group.
The carrying amount of equity-accounted investments is tested
for impairment in accordance with the policy described in note
1(p).
(c) Use of Estimates and Judgements
The preparation of financial statements requires management to
make judgements, estimates and assumptions that affect the
application of accounting policies and reported amounts of assets
and 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 estimate is revised and in
any future periods affected.
Critical Accounting Estimates and Judgements
Impairment of Exploration and Evaluation Assets
The ultimate recoupment of the value of exploration and
evaluation assets, is dependent on the successful development and
commercial exploitation, or alternatively, sale, of the exploration
and evaluation assets.
Impairment tests are carried out when there are indicators of
impairment in order to identify whether the asset carrying values
exceed their recoverable amounts. There is significant estimation
and judgement in determining the inputs and assumptions used in
determining the recoverable amounts.
The key areas of judgement and estimation include:
-- Recent exploration and evaluation results and resource estimates;
-- Environmental issues that may impact on the underlying tenements;
-- Fundamental economic factors that have an impact on the
operations and carrying values of assets and liabilities.
Taxation
Balances disclosed in the financial statements and the notes
related to taxation, are based on the best estimates of directors
and take into account the financial performance and position of the
Group as they pertain to current income tax legislation, and the
directors understanding thereof. No adjustment has been made for
pending or future taxation legislation. The current tax position
represents the best estimate, pending assessment by the tax
authorities.
Exploration and Evaluation Assets
The accounting policy for exploration and evaluation expenditure
results in expenditure being capitalised for an area of interest
where it is considered likely to be recoverable by future
exploitation or sale or where the activities have not reached a
stage which permits a reasonable assessment of the existence of
reserves.
This policy requires management to make certain estimates as to
future events and circumstances. Any such estimates and assumptions
may change as new information becomes available. If, after having
capitalised the expenditure under the policy, a judgement is made
that the recovery of the expenditure is unlikely, the relevant
capitalised amount will be written off to profit and loss.
(d) Income Tax
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used
to compute the amounts are those that are enacted or substantively
enacted at the balance sheet date.
Deferred income tax is provided on all temporary differences at
the balance sheet date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting
purposes.
Deferred income tax liabilities are recognized for all taxable
temporary differences.
Deferred income tax assets are recognized for all deductible
temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable
profit will be available against which the deductible temporary
differences and the carry-forward of unused tax credits and unused
tax losses can be utilized;
The carrying amount of deferred income tax assets is reviewed at
each balance sheet date reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow
all or part of the deferred income tax asset to be utilized.
Unrecognized deferred income tax assets are reassessed at each
balance sheet date and are recognized to the extent that it has
become probable that future taxable profit will allow the deferred
tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the
tax rates that are expected to apply to the period when the asset
is realized or the liability is settled, based on tax rates (and
tax laws) that have been enacted or substantively enacted at the
balance sheet date.
Income taxes relating to items recognized directly in equity are
recognized in equity and not in the income statement.
Deferred tax assets and deferred tax liabilities are offset only
if a legally enforceable right exists to set off current tax
liabilities and the deferred tax assets and liabilities relate to
the same taxable entity and the same taxation authority.
(e) Goods and Services Tax
Revenues, expenses and assets are recognized net of the amount
of GST except:
(i) Where the GST incurred on a purchase of goods and services
is not recoverable from the taxation authority, in which case the
GST is recognized as part of the cost of acquisition of the asset,
or as part of the expense item as applicable;
(ii) Receivables and payables are stated with the amount of GST
included;
(iii) The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or payables
in the Statement of Financial Position;
(iv) Cash flows are included in the Statement of Cash Flows on a
gross basis and the GST component of cash flows arising from
investing and financing activities, which is recoverable from, or
payable to, the taxation authority, are classified as operating
cash flows; and
(v) Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation
authority.
(f) Property, 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 recognized either in profit or
loss, or as a revaluation decrease if the impairment losses relate
to a revalued asset. A formal assessment of recoverable amount is
made when impairment indicators are present (refer to Note 1(p) for
details of impairment).
The carrying amount of plant and equipment is reviewed annually
by 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.
(g) Depreciation
The depreciable amount of all fixed assets is depreciated on a
straight-line basis over the asset's useful life to the
consolidated 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.
(h) Exploration and Evaluation Assets
Mineral exploration and evaluation expenditure incurred is
accumulated in respect of each identifiable area of interest and is
subject to impairment testing. These costs are carried forward only
if they relate to an area of interest for which rights of tenure
are current and in respect of which:
Such costs are expected to be recouped through the successful
development and exploitation of the area of interest, or
alternatively by its sale; or
Exploration and/or evaluation activities in the area have not
reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves and
active or significant operations in, or in relation to, the area of
interest are continuing.
In the event that an area of interest is abandoned accumulated
costs carried forward are written off in the year in which that
assessment is made. A regular review is undertaken of each area of
interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest.
Where a resource has been identified and where it is expected
that future expenditures will be recovered by future exploitation
or sale, the impairment of the exploration and evaluation is
written back and transferred to development costs. Once production
commences, the accumulated costs for the relevant area of interest
are amortized over the life of the area according to the rate of
depletion of the economically recoverable reserves.
Costs of site restoration and rehabilitation are recognized when
the Company has a present obligation, the future sacrifice of
economic benefits is probable and the amount of the provision can
be reliably estimated.
The amount recognized as a provision is the best estimate of the
consideration required to settle the present obligation at the
reporting date, taking into account the risks and uncertainties
surrounding the obligation. Where a provision is measured using the
cash flows estimated to settle the present obligation, its carrying
amount is the present value of those cash flows.
Exploration and evaluation assets are assessed for impairment if
facts and circumstances suggest that the carrying amount exceeds
the recoverable amount.
For the purpose of impairment testing, exploration and
evaluation assets are allocated to cash-generating units to which
the exploration activity relates. The cash generating unit shall
not be larger than the area of interest.
(i) Accounts Payable
These amounts represent liabilities for goods and services
provided to the Group prior to the end of the financial year and
which are unpaid. The amounts are unsecured and are usually paid
within 30 days of recognition.
(j) Contributed Equity
Issued Capital
Incremental costs directly attributable to issue of ordinary
shares and share options are recognised as a deduction from equity,
net of any related income tax benefit.
(k) Earnings Per Share
Basic earnings per share ("EPS") are calculated based upon the
net loss divided by the weighted average number of shares. Diluted
EPS are calculated as the net loss divided by the weighted average
number of shares and dilutive potential shares.
(l) Share-Based Payment Transactions
The Group provides benefits to Directors KMP and consultants of
the Group in the form of share-based payment transactions, whereby
employees and consultants render services in exchange for shares or
rights over shares ("Equity-settled transactions").
The value of equity settled securities is recognised, together
with a corresponding increase in equity.
Where the Group acquires some form of interest in an exploration
tenement or an exploration area of interest and the consideration
comprises share-based payment transactions, the fair value of the
assets acquired are measured at grant date. The value is recognised
within capitalised mineral exploration and evaluation expenditure,
together with a corresponding increase in equity.
(m) Comparative Figures
When required by Accounting Standards, comparative figures have
been adjusted to conform to changes in presentation for the current
financial year.
(n) Financial Risk Management
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework, to
identify and analyse the risks faced by the Group. These risks
include credit risk, liquidity risk and market risk from the use of
financial instruments. The Group has only limited use of financial
instruments through its cash holdings being invested in short term
interest bearing securities. The Group has no debt, and working
capital is maintained at its highest level possible and regularly
reviewed by the full board.
(o) Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and
financial liabilities, are recognized when the entity becomes a
party to the contractual provisions of the instrument. Trade date
accounting is adopted for financial assets that are delivered
within timeframes established by marketplace convention.
Financial instruments are initially measured at fair value plus
transactions costs where the instrument is not classified as a fair
value through profit or loss. Transaction costs related to
instruments classified as a fair value through profit or loss are
expensed to profit or loss immediately. Financial instruments are
classified and measured as set out below.
Derecognition
Financial assets are derecognized where the contractual rights
to receipt of cash flows expires or the asset is transferred to
another party whereby the entity is no longer has any significant
continuing involvement in the risks and benefits associated with
the asset. Financial liabilities are derecognized where the related
obligations are either discharged, cancelled or expire. The
difference between the carrying value of the financial liability
extinguished or transferred to another party and the fair value of
consideration paid, including the transfer of non-cash assets or
liabilities assumed, is recognized in profit or loss.
Classification and Subsequent Measurement
(a) Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit or
loss when they are held for trading for the purpose of short term
profit taking, where they are derivatives not held for hedging
purposes, or designated as such to avoid an accounting mismatch or
to enable performance evaluation where a Group of financial assets
is managed by key management personnel on a fair value basis in
accordance with a documented risk management or investment
strategy. Realized and unrealized gains and losses arising from
changes in fair value are included in profit or loss in the period
in which they arise.
(b) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market and are subsequently measured at amortized cost using the
effective interest rate method.
(c) Held-to-maturity investments
Held-to-maturity investments are non-derivative financial assets
that have fixed maturities and fixed or determinable payments, and
it is the Group's intention to hold these investments to maturity.
They are subsequently measured at amortized cost using the
effective interest rate method.
(d) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial
assets that are either designated as such or that are not
classified in any of the other categories. They comprise
investments in the equity of other entities where there is neither
a fixed maturity nor fixed or determinable payments.
(e) Financial Liabilities
Non-derivative financial liabilities (excluding financial
guarantees) are subsequently measured at amortized cost using the
effective interest rate method.
(f) Impairment
At each reporting date, the Group assesses whether there is
objective evidence that a financial instrument has been impaired.
In the case of available-for-sale financial instruments, a
prolonged decline in the value of the instrument is considered to
determine whether an impairment has arisen. Impairment losses are
recognized in the income statement.
(p) Impairment of Assets
At each reporting date, the Group reviews the carrying values of
its tangible assets to determine whether there is any indication
that those assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher of the
asset's fair value less costs to sell and value in use, is compared
to the asset's carrying value. Any excess of the asset's carrying
value over its recoverable amount is expensed to the income
statement. Impairment testing is performed annually for goodwill
and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of
an individual asset, the Group estimates the recoverable amount of
the cash-generating until to which the asset belongs.
(q) Employee Entitlements
Liabilities for wages and salaries, annual leave and other
current employee entitlements expected to be settled within 12
months of the reporting date are recognized in other payables 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
recognized when the leave is taken and measured at the rates paid
or payable.
Contributions to employee superannuation plans are charged as an
expense as the contributions are paid or become payable.
(q) Provisions
Provisions are recognized 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 results and
that outlay can be reliably measured.
(r) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at
call with banks, other short-term highly liquid investments with
original maturities of 3 months or less, and bank overdrafts. Bank
overdrafts are shown within short-term borrowings in current
liabilities on the balance sheet.
(s) Revenue and Other Income
Interest revenue is recognized using the effective interest rate
method, which, for floating rate financial assets, is the rate
inherent in the instrument.
(t) Acquisition of Subsidiary Not Deemed a Business Combination
When an acquisition of assets does not constitute a business
combination, the assets and liabilities are assigned a carrying
amount based on their relative fair values in an asset purchase
transaction and no deferred tax will arise in relation to the
acquired assets and assumed liabilities as the initial exemption
for deferred tax under AASB 12 applies. No goodwill will arise on
the acquisition and transaction costs of the acquisition will be
included in the capitalised cost of the asset.
(u) New standards and interpretations
Account Standard and Interpretation
The Group has adopted all of the new, revised or amending
Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the
current reporting period. These changes do not materially impact on
this financial report.
Any new, revised or amending Accounting Standards or
Interpretations that are not yet mandatory have not been adopted
early. Adoption would not materially impact on this financial
report.
Consolidated Consolidated
2017 2016
$ $
2 Corporate Costs
Accounting, Company Secretary
and Audit fees 198,034 153,010
Director fees 120,000 120,000
Consulting fees 707,809 779,501
Legal and compliance fees 126,822 131,714
---------------------- -------------
1,152,665 1,184,225
---------------------- -------------
3 Costs associated with projects
Costs incurred 417,687 1,555,284
Reimbursements (136,925) (261,989)
280,762 1,293,295
---------------------- -------------
4 Income Tax
No income tax is payable by the Group as it has
incurred losses for income tax purposes for the
year, therefore current tax, deferred tax and
tax expense is $NIL (2016 - NIL).
(a) Numerical reconciliation of income tax expense
to prima facie tax payable
Consolidated Consolidated
2017 2016
$ $
Loss before tax (9,186,307) (4,894,765)
Income tax calculated at
27.5% (2016: 30%) (2,526,234) (1,468,429)
Tax effect of amounts which
are deductible/non-deductible
In calculating taxable income:
JV share of profit 16,878 -
Project abandonment costs - 128,733
Legal and consulting expenses 15,885 -
Capital raising costs - 86,788
Impairment expense 2,079,964 442,311
Upfront exploration expenditure
claimed (152,894) (177,804)
Other (207,087) (178,665)
Effects of unused tax losses
and tax offsets not recognized
as deferred tax assets 773,488 1,167,066
------------- -------------
Income tax expense attributable
to operating profit NIL NIL
(b) Tax Losses
As at 30 June 2017 the Company had Australian tax losses of
$6,804,870 (2016: $3,899,473). The benefit of deferred tax assets
not brought to account will only be realized if:
-- Future assessable income is derived of a nature and of an
amount sufficient to enable the benefit to be realized; and
-- The conditions for deductibility imposed by tax legislation
continue to be complied with and no changes in tax legislation
adversely affect the Company in realizing the benefit.
(c) Unbooked Deferred Tax Assets and Liabilities
Consolidated Consolidated
2017 2016
$ $
Unbooked deferred tax assets comprise:
Capital Raising Costs 256,270 486,874
Provisions/Accruals/Other 20,561 36,329
Tax losses available for offset
against future taxable income 1,935,955 3,899,473
---------- ----------
2,212,786 4,922,676
========== ==========
5 Auditors Remuneration
Audit - Somes Cooke
Audit of the financial
statements - 7,000
Audit - Greenwich & Co Audit Pty Ltd
Audit of the financial
statements 27,000 18,000
------- -------
27,000 25,000
------- -------
6 Cash and Cash Equivalents
Cash at Bank 1,666,139 3,758,556
---------- ----------
7 Trade and Other Receivables
Deposits 198,851 150,533
GST receivable 44,197 43,419
Other receivables 151,557 163
-------- --------
394,605 194,115
-------- --------
8 Other assets
Prepayments 23,985 22,546
Accrued income 11,705 -
Share applications - 423,549
------- --------
35,690 446,095
------- --------
9 Other financial assets
Shares in a listed entity 288,288 7
--------
10 Property, Plant and Equipment
Land and Buildings Office Equipment and Furniture Vehicles Total
$
$
$ $
Cost
Balance at 1 July 2016 176,387 161,472 24,871 362,730
Additions - - - -
Effective movement in exchange rates (186) - (24) (210)
------------------- ------------------------------- --------- --------
Balance at 30 June 2017 176,201 161,472 24,847 362,520
------------------- ------------------------------- --------- --------
Depreciation
Balance at 1 July 2016 908 128,325 9,049 138,282
Depreciation for the year 450 9,785 2,968 13,203
Effective movement in exchange rates 4 - 15 19
------------------- ------------------------------- --------- --------
Balance at 30 June 2017 1,362 138,110 12,032 151,504
------------------- ------------------------------- --------- --------
Carrying amounts
Balance at 30 June 2016 175,479 33,147 15,822 224,448
------------------- ------------------------------- --------- --------
Balance at 30 June 2017 174,839 23,362 12,815 211,016
------------------- ------------------------------- --------- --------
Consolidated Consolidated
2017 2016
$ $
11 Capitalised Oil and Gas Expenditure
Cost brought forward 10,955,203 11,733,041
Exploration costs incurred during the year 552,550 1,480,667
Exploration expenditure previously capitalised, written off in financial year (7,428,444) (1,456,942)
Costs related to terminated acquisitions (i) - (1,293,295)
FX movement (6,194) 491,732
-------------- -------------
Carrying value at end of year 4,073,115 10,955,203
-------------- -------------
The recoupment of costs carried forward is dependent on the successful development and/or
commercial exploitation or alternatively sale of the respective areas of interest.
(i) On 1 February 2016, the Company cancelled the Sale and Purchase Agreement with Origin
Energy Limited ("Origin") to acquire the South Taranaki Project ("STEP"). As a result all
costs associated with the transaction were written off.
12 Trade and Other Payables
Trade creditors 279,582 66,448
Unearned revenue 11,867 -
Other creditors and accruals 62,320 111,244
---------------- ----------------
353,769 177,692
---------------- ----------------
Included within trade and other creditors and accruals is an amount of $NIL (2016 $13,842)
relating to exploration expenditure.
13 Provisions Consolidated Consolidated
2017 2016
$ $
Employee provisions 15,308 11,846
Provision for abandonment 142,857 -
_________________________________
158,165 11,846
_________________________________
14 Contributed Equity
Ordinary Shares :
Value of Ordinary Shares
fully paid
Movement in Contributed Equity Number Contributed
of shares Equity $
Balance as at 1 July 2015: 122,578,066 18,585,595
Nature of Issue
Date Transaction Price
Shares issued
28/07/2015 (i) $0.0377 22,857,143 857,143
Shares issued
22/09/2015 (i) $0.0980 33,333,333 3,261,018
Shares issued
30/10/2015 (i) $0.0848 36,822,466 3,124,132
Capital raising costs - (592,019)
------------ ------------
Balance as at 1 July 2016: 215,591,008 25,235,869
Share buy-back
02/08/2016 (ii) $0.1000 (9,000,000) (900,000)
Shares issued
21/06/2017 (i) $0.0234 42,857,143 1,006,536
Acquisition
of joint
operations
04/05/2017 (iii) $1.0000 667 667
Capital raisings costs - (156,759)
------------ ------------
Balance at end of year 249,448,818 25,286,313
============ ============
(i) Placements via capital raising as announced
(ii) Selective share buy-back as announced
(iii) Acquisition of joint operations equity as
announced. Refer to Note 25.
15 Reserves
Consolidated Consolidated
2017 2016
$ $
Options reserve 1,063,440 1,063,440
Asset revaluation reserve (215,793) -
Foreign currency translation
reserve 210,479 (241,170)
------------- -------------
1,058,126 1,304,610
------------- -------------
Options Reserve
Nature and purpose of the Option reserve
The options reserve represents the fair value of equity
instruments issued to employees as compensation and issued to
external parties for the receipt of goods and services. This
reserve will be reversed against issued capital when the underlying
shares are converted and reversed against retained earnings when
they are allowed to lapse.
Consolidated Consolidated
2017 2016
Movement in Options Reserve $ $
Options Reserve at the beginning
of the year 1,063,440 1,063,440
Options Reserve at the end
of the year 1,063,440 1,063,440
------------- -------------
Foreign Currency Translation Reserve
Nature and purpose of the Foreign Currency Translation
Reserve
Functional currency balances are translated into the
presentation currency using the exchange rates at the balance sheet
date. Value differences arising from movements in the exchange rate
is recognised in the Foreign Currency Translation Reserve.
Consolidated Consolidated
Movement in Foreign Currency
Translation Reserve 2017 2016
$ $
Foreign Currency Translation
Reserve at the beginning of
the year 241,170 (282,655)
Current year movement (30,691) 523,825
------------- -------------
Foreign Currency Translation
Reserve at the end of the
year 210,479 241,170
------------- -------------
16 Accumulated Losses
Accumulated losses at the
beginning of the year 11,151,593 6,256,828
Net loss attributable to members 9,186,307 4,894,765
Cancellation of shares on (900,000) -
selective buy-back
Profit associated with non-controlling 62,041 -
interest
----------- -----------
Accumulated losses at the
end of the year 19,437,900 11,151,593
----------- -----------
17 Related Party Transactions
Key Management Personnel Remuneration
Cash Payments to Directors
and Management (i) 708,538 789,016
Total 708,538 789,016
================== =========
17 Related Party Transactions (continued)
I. During the year to 30 June 2017:
a. Directors fees of $60,000 and consulting fees of $227,500
were paid and payable to Kensington Advisory Services Pty Ltd;
b. Director fees of $ 30,000 and consulting fees of $260,000
were paid and payable to Australasian Energy Pty Ltd;
c. Directors fees of $30,000 were paid to Metallon Resources Pty Ltd;
d. CFO, Company Secretary and Consulting Fees totaling $101,038
were paid and payable to J T White's accounting firm, Traverse
Accountants Pty Ltd.
Movement in Shares and Options
The aggregate numbers of shares and options of the Company held
directly, indirectly or beneficially by Key Management Personnel of
the Company or their personally-related entities are fully detailed
in the Directors' Report.
Amounts owing to the Company from subsidiaries:
Petroleum Creek Limited
At 30 June 2017 the Company's 100% owned subsidiary, Petroleum
Creek Limited (PCL), owed Mosman Oil and Gas Limited $7,949,054
(2016: $7,660,930). The Company has executed a Loan Agreement with
PCL covering amounts up to $2,000,000 bearing interest at 7% pa and
secured by a Fixed and Floating charge over the assets of PCL, as
registered with the NZ Ministry of Economic Development Companies
Office on 17 April, 2014.
Mosman Oil and Gas (NZ) Limited
At 30 June 2017 the Company's 100% owned subsidiary, Mosman Oil
and Gas (NZ) Limited, owed Mosman Oil and Gas Limited $197,847
(2016: $169,128).
Trident Energy Pty Ltd
At 30 June 2017 the Company's 100% owned subsidiary, Trident
Energy Pty Ltd, owed Mosman Oil and Gas Limited $2,675,440 (2016:
$2,453,911).
OilCo Pty Ltd
At 30 June 2017 the Company's 100% owned subsidiary, OilCo Pty
Ltd (OilCo), owed Mosman Oil and Gas Limited $688,851 (2016:
$607,878).
Mosman Oil USA, Inc
At 30 June 2017 the Company's 100% owned subsidiary, Mosman Oil
USA, Inc, owed Mosman Oil and Gas Limited $863,968 (2016:
$NIL).
Mosman Texas, LLC
At 30 June 2017 the Company's 100% owned subsidiary, Mosman
Texas, LLC, owed Mosman Oil and Gas Limited $NIL (2016: $NIL).
18 Expenditure Commitments
(a) Exploration
The Company has certain obligations to perform minimum
exploration work on Oil and Gas tenements held. These obligations
may vary over time, depending on the Company's exploration programs
and priorities. At 30 June 2017, total exploration expenditure
commitments for the next 12 months are as follows:
2017 2016
Entity Tenement $ $
Mosman Oil & Gas
Limited PEP385326 572,028 572,028
Trident Energy Pty
Ltd EP145 121,500 121,500
Oilco Pty Ltd EPA155 10,000 10,000
Oilco Pty Ltd EP 156 155,000 155,000
Mosman Oil and Gas
(NZ) Ltd PEP 57067 - -
Mosman Oil and Gas
(NZ) Ltd PEP 57068 - 1,239,394
Mosman Oil and Gas
(NZ) Ltd PEP 57058 - -
--------
858,528 2,097,922
-------- ----------
At the date of report the Company had resolved to abandon New
Zealand related projects and the commitments as at 30 June 2017
(particularly for PEP385326) are not considered to be
obligations.
These obligations are subject to variations by farm-out
arrangements, sale of the relevant tenements or seeking expenditure
exemption for previous year's expenditure. The Company has the
option to elect to not carry out the minimum work program
commitments pertaining to a specific permit, in which case the
Company will relinquish its interest in the relevant permit.
(b) Capital Commitments
The Company had no capital commitments at 30 June 2017 (2016 -
$NIL).
19 Segment Information
The Group has identified its operating segments based on the
internal reports that are reviewed and used by the board to make
decisions about resources to be allocated to the segments and
assess their performance.
Operating segments are identified by the board based on the Oil
and Gas projects in Australia, New Zealand and the USA. Discrete
financial information about each project is reported to the board
on a regular basis.
The reportable segments are based on aggregated operating
segments determined by the similarity of the economic
characteristics, the nature of the activities and the regulatory
environment in which those segments operate.
The Group has three reportable segments based on the
geographical areas of the mineral resource and exploration
activities in Australia, New Zealand and the USA. Unallocated
results, assets and liabilities represent corporate amounts that
are not core to the reportable segments.
(i) Segment performance
New Zealand United States Australia Total
$ $ $ $
------------ -------------- ------------ -------------------
Year ended 30 June 2017
Revenue
Revenue - 2,825 13,212 16,037
Interest income - - 2,550 2,550
Share of net profit of joint operation - 62,043 - 62,043
Other income 2,095 20,018 9,741 31,854
------------ -------------- ------------ -------------------
Segment revenue 2,095 84,886 25,503 112,484
------------ -------------- ------------ -------------------
Segment Result
Loss
Allocated
- Corporate Costs (70,343) (10,816) (1,071,506) (1,152,665)
- Administrative Costs (48,655) (41,117) (163,541) (253,313)
- Foreign Exchange Loss gain/ (loss) - - (50,834) (50,834)
------------ -------------- ------------ -------------------
Segment net loss before tax (116,903) 32,954 (1,260,378) (1,344,328)
------------ -------------- ------------ -------------------
Reconciliation of segment result to net loss
before tax
Amounts not included in segment result but
reviewed by the Board
- Exploration expenditure previously
capitalised, written off in financial year (7,428,444) - - (7,428,444)
- Costs of projects abandoned (149,293) - (131,470) (280,763)
- Pre acquisition costs - - (40,320) (40,320)
Unallocated items
- Employee Benefits Expense (79,250)
- Depreciation (13,202)
Net Loss before tax from continuing operations (9,186,307)
-------------------
19 Segment Information (continued)
(i) Segment performance (continued)
New Zealand United States Australia Total
$ $ $ $
------------ -------------- ------------ ------------
Year ended 30 June 2016
Revenue
Interest income 6 - 6,616 6,622
Other income 6,000 - 3,924 9,924
------------ -------------- ------------ ------------
Segment revenue 6,006 - 10,540 16,546
------------ -------------- ------------ ------------
Segment Result
Loss
Allocated
- Corporate Costs (108,617) - (1,075,608) (1,184,225)
- Administrative Costs (29,754) - (310,535) (340,289)
- Exploration expenses - - (37,181) (37,181)
- Foreign Exchange Loss gain/ (loss) 386 - (300,740) (300,354)
------------ -------------- ------------ ------------
Segment net loss before tax (131,979) - (1,713,524) (1,845,503)
------------ -------------- ------------ ------------
Reconciliation of segment result to net loss before tax
Amounts not included in segment result but reviewed by
the Board
- Exploration expenditure written off (1,031,306) - (261,989) (1,293,295)
- Exploration expenditure impaired - - (1,456,942) (1,456,942)
- Loans to associated entities forgiven - - (17,429) (17,429)
Unallocated items
- Employee Benefits Expense (188,539)
- Loss on financial assets (89,674)
- Finance costs (3,383)
Net Loss before tax from continuing operations (4,894,765)
------------
19 Segment Information (continued)
(ii) Segment assets
New Zealand United States Australia Total
$ $ $ $
------------ -------------- ------------ ------------
As at 30 June 2017
Segment assets as at 1 July 2016 7,332,986 - 3,622,217 10,955,203
Segment asset increases/(decreases) for the year
- Exploration and evaluation 101,650 - 450,898 552,548
- Foreign exchange impact (6,193) - - (6,193)
- Exploration expenditure previously capitalised,
written off in financial year (7,428,443) - - (7,428,443)
------------ -------------- ------------ ------------
- - 4,073,115 4,073,115
------------ -------------- ------------ ------------
Reconciliation of segment assets to total assets:
Other assets 392,510 953,669 1,999,178 3,345,357
------------ -------------- ------------ ------------
Total assets from continuing operations 392,510 953,669 6,072,293 7,418,472
------------ -------------- ------------ ------------
As at 30 June 2016
Segment assets as at 1 July 2015 6,691,897 - 5,041,144 11,733,041
Segment asset increases for the year
- Exploration and evaluation 641,089 - (1,418,927) (777,838)
---------- ------------ -----------
7,332,986 - 3,622,217 10,955,203
---------- ------------ -----------
Reconciliation of segment assets to total assets:
Other assets 273,460 - 4,349,761 4,623,221
---------- ------------ -----------
Total assets from continuing operations 7,606,446 - 7,971,978 15,578,424
---------- ------------ -----------
19 Segment Information (continued)
(iii) Segment liabilities
New Zealand United States Australia Total
$ $ $ $
------------ -------------- ---------- ----------
As at 30 June 2017
Segment liabilities as at 1 July 2016 9,154 - 180,384 189,538
Segment liability (decreases) for the year 153,324 69,679 99,393 322,396
------------ -------------- ---------- ----------
162,478 69,679 279,777 511,934
------------ -------------- ---------- ----------
Reconciliation of segment liabilities to total liabilities:
Other liabilities - - - -
------------ -------------- ---------- ----------
Total liabilities from continuing operations 162,478 69,679 279,777 511,934
------------ -------------- ---------- ----------
As at 30 June 2016
Segment liabilities as at 1 July 2015 108,895 - 519,531 628,426
Segment liability (decreases) for the year (99,741) - (339,147) (438,888)
------------ -------------- ---------- ----------
9,154 - 180,384 189,538
------------ -------------- ----------
Reconciliation of segment liabilities to total liabilities:
Other liabilities - - - -
------------ -------------- ---------- ----------
Total liabilities from continuing operations 9,154 - 180,384 189,538
------------ -------------- ---------- ----------
20 Earnings/ (Loss) per shares
Consolidated
Consolidated 2017 2016
$ $
The following reflects the loss and share data used in the calculations of
basic and diluted
earnings/ (loss) per share:
Earnings/ (loss) used in calculating basic and diluted earnings/
(loss) per share (9,432,791) (4,894,765)
------------------ -----------------
Number of shares Number of shares
2017 2016
Weighted average number of ordinary shares used in calculating basic
earnings/(loss) per
share: 208,461,458 193,534,581
Basic loss per share (cents per share) 4.46 2.53
21 Notes to the statement of cash flows
Reconciliation of loss from
ordinary activities after
income tax to net cash outflow Consolidated Consolidated
from operating activities: 2017 2016
$ $
------------- -------------
Loss from ordinary activities
after related income tax (9,186,307) (4,894,765)
Exploration expenses written
off - 1,293,295
Depreciation 13,203 18,171
Previously capitalised expenses,
written off 7,428,444 1,456,942
Loss on financial assets - 89,674
Decrease in other assets 157,814 20,536
(Increase)/decrease in trade
and other receivables (236,180) 107,265
Increase/(decrease) in trade
and other payables 325,071 (584,996)
Net cash outflow from operating
activities (1,497,956) (2,493,878)
------------- -------------
22 Financial Instruments
The Company's activities expose it to a variety of financial and
market risks. The Company's overall risk management program focuses
on the unpredictability of financial markets and seeks to minimize
potential adverse effects on the financial performance of the
Company.
(i) Interest Rate Risk
The Company's exposure to interest rate risk, which is the risk
that a financial instrument's value will fluctuate as a result of
changes in market, interest rates and the effective weighted
average interest rates on those financial assets, is as
follows:
Consolidated
2017
Note Funds Fixed Assets/ Total
Weighted Available Interest (Liabilities)
Average at a Floating Rate Non
Effective Interest Interest
Interest Rate Bearing
% $ $ $ $
-------------------- ----- ----------- --------------- ---------- --------------- ----------
Financial
Assets
Cash and
Cash Equivalents 6 0.1% 1,666,139 - - 1,666,139
Trade and
other Receivables 7 - - 394,605 394,605
Other assets 8 - - 35,690 35,690
Other financial
assets 9 - - 288,288 288,288
--------------- ---------- --------------- ----------
Total Financial
Assets 1,666,139 - 718,583 2,384,722
--------------- ---------- --------------- ----------
Financial
Liabilities
Trade and
other Payables 12 - - 353,769 353,769
Provisions 13 - - 158,165 158,165
--------------- ---------- --------------- ----------
Total Financial
Liabilities - - 511,934 511,934
--------------- ---------- --------------- ----------
Net Financial
Assets 1,666,139 - 206,849 1,872,788
=============== ========== =============== ==========
22 Financial Instruments (continued)
Consolidated
2016
Financial
Assets
Cash and
Cash Equivalents 6 0.2% 3,758,556 - - 3,758,556
Trade and
other Receivables 7 - - 194,115 194,115
Other assets 8 - - 446,095 446,095
Other financial
assets 9 - - 7 7
---------- ---- -------- ----------
Total Financial
Assets 3,758,556 - 640,217 4,398,773
---------- ---- -------- ----------
Financial
Liabilities
Trade and
other Payables 12 - - 177,692 177,692
Provisions 13 - - 11,846 11,846
---------- ---- -------- ----------
Total Financial
Liabilities - - 189,538 189,538
---------- ---- -------- ----------
Net Financial
Assets 3,758,556 - 450,679 4,209,235
========== ==== ======== ==========
(ii) Credit Risk
The maximum exposure to credit risk, excluding the value of any
collateral or other security, at balance date, is the carrying
amount, net of any provisions for doubtful debts, as disclosed in
the balance sheet and in the notes to the financial statements. The
Company does not have any material credit risk exposure to any
single debtor or group of debtors, under financial instruments
entered into by it.
(iii) Commodity Price Risk and Liquidity Risk
At the present state of the Company's operations it has minimal
commodity price risk and limited liquidity risk due to the level of
payables and cash reserves held. The Company's objective is to
maintain a balance between continuity of exploration funding and
flexibility through the use of available cash reserves.
(iv) Net Fair Values
For assets and other liabilities, the net fair value
approximates their carrying value. No financial assets and
financial liabilities are readily traded on organised markets in
standardised form. The Company has no financial assets where the
carrying amount exceeds net fair values at balance date.
The aggregate net fair values and carrying amounts of financial
assets and financial liabilities are disclosed in the balance sheet
and in the notes to the financial statements.
23 Contingent Liabilities
There were no material contingent liabilities not provided for
in the financial statements of the Company as at 30 June 2017.
24 Mosman Oil and Gas Limited - Parent Entity Disclosures
2017 2016
$ $
------------ ------------
Financial position
Assets
Current Assets 1,723,088 3,836,354
Non-Current Assets 12,073,612 11,555,969
------------ ------------
Total Assets 13,796,700 15,392,323
------------ ------------
Liabilities
Current Liabilities 242,332 180,382
Total Liabilities 242,332 180,382
------------ ------------
Net Assets 13,554,368 15,211,941
============ ============
Equity
Contributed equity 25,285,646 25,235,869
Reserves 847,647 1,063,440
Accumulated losses (12,578,925) (11,087,368)
Total Equity 13,554,368 15,211,941
============ ============
Financial Performance
Loss for the year (1,508,985) (2,890,667)
Other comprehensive income - -
------------ ------------
Total comprehensive income (1,508,985) (2,890,667)
============ ============
25 Controlled Entities
Investments in group entities comprise:
Beneficial
percentage
Principal held by economic
Name activities Incorporation entity
--------------------- --------------- --------------- --------------------
2017 2016
% %
--------------------- --------------- --------------- --------- ---------
Mosman Oil and
Gas Limited Parent entity Australia
Wholly owned
and controlled
entities:
Mosman Oil & Oil & Gas
Gas Limited exploration New Zealand 100 100
Mosman Oil and Oil & Gas
Gas (NZ) Limited exploration New Zealand 100 100
Petroleum Portfolio Oil & Gas
Pty. Ltd exploration Australia - 100
Oil & Gas
OilCo Pty Limited exploration Australia 100 100
Trident Energy Oil & Gas
Pty Ltd exploration Australia 100 100
Mosman Oil USA, Oil & Gas
INC. operations U.S.A. 100 -
Mosman Texas, Oil & Gas
LLC operations U.S.A. 100 -
Mosman Operating, Oil & Gas
LLC operations U.S.A. 100 -
Mosman Oil and Gas Limited is the Parent Company of the Group,
which includes all of the controlled entities. See also Note 27
Subsequent Events for additional corporate activity in progress
subsequent to the 30 June 2017 year end.
25 Controlled Entities (continued)
Set out below is summarised financial information for each
subsidiary that has non-controlling interests that are material to
the group. The amounts disclosed are for Mosman Operating, LLC and
are before inter-company eliminations.
Summarised Statement of Financial Position 2017 2016
$ $
Current Assets
Cash and cash equivalents 125,527 -
Trade and other receivables 78,593 -
Total Current Assets 204,120 -
-------- -----
Total Assets 204,120 -
-------- -----
Current Liabilities
Trade and other payables 69,679 -
-------- -----
Total Current Liabilities 69,679 -
-------- -----
Non-Current Liabilities
Loan to Joint Operator - Mosman Oil USA Inc. 13,558 -
Total Non-Current Liabilities 13,558 -
-------- -----
Net Assets 120,883 -
======== =====
Equity
Contributed equity 1,335 -
Reserves (3,204) -
Retained earnings 122,752 -
Total Equity 120,883 -
======== =====
Accumulated Non-controlling interest 60,442 -
25 Controlled Entities (continued)
Summarised Statement of Comprehensive Income 2017 2016
$ $
Revenue 198,313 -
Other income 40,035 -
Administrative expenses (82,233) -
Corporate expenses (13,345) -
Employee benefits expense (20,018) -
-------- -----
Profit from ordinary activities before income tax expense 122,752 -
Income tax expense - -
Net profit for the year 122,752 -
-------- -----
Total comprehensive profit for the year is attributable to:
Shareholders - -
Non-controlling interest - -
Total comprehensive profit attributable to member of the entity 122,752 -
======== =====
Profit allocated to non-controlling interest 61,376 -
Summarised Statement of Cash Flows 2017 2016
$ $
Cash flows from operating activities 92,303 -
Cash flows from investing activities 33,224 -
Cash flows from financing activities - -
-------- -----
Net increase in cash and cash equivalents 125,527 -
26 Associated Entity
Name Principal activities Incorporation Beneficial percentage held by Group
----- ----------------------- -------------- ----------------------------------------
2017 2016
Holds interest in Officer Basin Licence
Australasian Petroleum Portfolio Pty. Ltd. Application - Oil & Gas exploration Australia - 25
--------------------------------------------- ---------------------------------------------- ----------- ---
Throughout the year the Company transferred its interest in
Petroleum Portfolio Pty. Ltd. (a 100% owned subsidiary) to Andrew
Carroll in exchange for the return and cancellation of 9,000,000
shares in the Company via the selective share buyback approved by
shareholders on 2 August 2016. Petroleum Portfolio Pty Ltd held a
25% interest in Australasian Petroleum Portfolio Pty Ltd ('APPPL')
which owned a 100% interest in the Officer Basin License
Application. From 2 August 2016 APPPL therefore ceased to be an
associated entity.
27 Share Based Payments
Consolidated Consolidated
2017 2016
$ $
Basic loss per share (cents per share) 4.46 2.53
The following share based payment arrangements existed at 30
June 2017:
Each of the three classes of unlisted options detailed below
entitle the holder to acquire one Ordinary share of the Company on
the terms disclosed, but do not entitle the holder to participate
in any share issue or dividends of the Company and are not
transferable. All options vested on the grant date and were
therefore not dependent on performance. Options do not lapse on a
Director leaving the Company.
(1) On 15 January 2014, 800,000 Options were issued to
consultants, an employee and others to take up ordinary shares of
the Company at an exercise price of $0.15 each. The options are
exercisable on or before 13 January, 2019. As at 30 June 2017
700,000 options still remain outstanding.
(2) On 15 January 2014, 2,500,000 Options were issued to KMP to
take up ordinary shares of the Company at an exercise price of
$0.15 each. The options are exercisable on or before 13 January,
2019.
(3) On 20 March 2014, 1,227,674 Options were issued to UK
consultants involved in the AIM IPO to take up ordinary shares of
the Company at an exercise price of $0.146 (8 GB pence) each. The
options are exercisable on or before 20 March, 2019. At 30 June
2017 859,372 options still remain outstanding.
(4) On 28 November 2014, 3,800,000 Options were issued to
Directors, employee & consultants to take up ordinary shares of
the Company at an exercise price of $0.58 each. The options are
exercisable on or before 28 November 2017.
A summary of the movements of all company option issues to 30
June, 2017 is as follows:
Company Options 2017 2016 2017 2016
Number of Options Number of Options Weighted Average Weighted Average
Exercise Price Exercise Price
------------------------ ------------------- ------------------- ------------------------ ------------------------
Outstanding at the
beginning of the year 7,859,372 9,859,372 $0.31 $0.31
------------------------ ------------------- ------------------- ------------------------ ------------------------
Granted - - - -
------------------------ ------------------- ------------------- ------------------------ ------------------------
Exercised - - - -
------------------------ ------------------- ------------------- ------------------------ ------------------------
Expired - (2,000,000) $0.58 $0.58
------------------------ ------------------- ------------------- ------------------------ ------------------------
Outstanding at the end
of the year 7,859,372 7,859,372 $0.24 $0.24
------------------------ ------------------- ------------------- ------------------------ ------------------------
Exercisable at the end
of the year 7,859,372 7,859,372 $0.24 $0.24
------------------------ ------------------- ------------------- ------------------------ ------------------------
No Options Granted were granted during the financial year ended
30 June 2017.
28 Subsequent Events
Material transactions arising since 30 June 2017 which will
significantly affect the operations of the Company, the results of
those operations, or the state affairs of the Company in subsequent
financial periods are:
Welch Permian Basin Project Acquisition - West Texas
On 11 September 2017, the Company purchased several oil and gas
leases that comprise the Welch Permian Basin Project for
USD$310,000. The project consists of 653 acres of leases, with 10
producing well, 7 injector wells and 10 shut-in wells.
Issue of Equity to Fund Expansion
On 29 September 2017, the Company issued 50,000,000 new ordinary
shares at a price of 1.2p per share, raising GBP600,000. Proceeds
from the share issue will allow the Company to concentrate on
expansion opportunities, further development of its USA assets and
providing for working capital requirements.
Murchison Permit Surrender
Mosman has been advised previously by NZPAM that the Change of
Condition application made in December 2016 had been declined.
Mosman's application was to defer the work program to allow a
measured pace of exploration based on work to date. However, the
length of time taken to get a decision on this and a prior
application left Mosman in a position whereby the Company had to
make a decision to acquire seismic and drill two wells prior to
April 2018, or surrender the permit.
Since the application for the licence in 2014, the decision by
NZPAM should be seen in the light of the significant drop in the
oil price, with the result investor appetite for expenditure on
long term frontier exploration has changed significantly. Whilst
the exploration potential remains untested, the commercial position
of a discovery in the South Island of NZ remains challenging, as
there are significant capital and operating costs of transporting
any oil or gas to market. Furthermore, there are currently no NZ
approved drilling rigs on the South Island of NZ.
Given the short lead time associated with the work commitments
and significant cost obligations imposed between now and April
2018, the Board has had to make a difficult decision based on the
best interests of shareholders and has, regretfully, decided to
surrender the permit.
Petroleum Creek Update
The Company is planning to plug and abandon the three wells on
the site. The freehold property has been placed for sale and the
sale proceeds are expected to cover the costs associated with
abandonment.
There have been no significant events subsequent to reporting
date other than stated above.
Arkoma Option Extension
On 15 November 2017, the Company announced a deferral of
Mosman's second option over the Arkoma acreage to 1 April 2018 in
exchange for US$125,000. The funds would be credited against
Mosman's first option exercise which would therefore become
US$875,000 rather than US$1,000,000 and there was a requirement for
the funds to be invested into three well recompletions that were
targeted at increasing production and providing further technical
data for Mosman to evaluate further investment into the
project.
Annual General Meeting
On 20 November 2017, the Company announced that its 2017 annual
general meeting would be held on 18 December 2017.
There have been no significant events subsequent to reporting
date other than stated above.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR USUWRBVAAURA
(END) Dow Jones Newswires
November 24, 2017 04:05 ET (09:05 GMT)
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