TIDMOEX
RNS Number : 8627D
Oilex Ltd
02 November 2020
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Note 2020 2019
$ $
------------ ------------
Revenue 5(a) - 188,220
Cost of sales 5(b) - (504,926)
------------ ------------
Gross loss (316,706)
Other income 5(c) 98,000 -
Exploration expenditure 5(d) (1,008,719) (491,675)
Other costs 5(b) (1,270,151) -
Administration expense 5(e) (2,015,477) (1,957,850)
Share-based payments expense 24 - (110,935)
Reversal of/(Provision for) doubtful
debts expense 13 107,313 (108,206)
Impairment of development assets 9 (1,348,458) -
Other expenses 5(f) (336,921) (40,990)
------------ ------------
Results from operating activities (5,774,413) (3,026,362)
------------ ------------
Finance income 5(g) 1,659 4,403
Finance costs 5(h) (70,977) (97,162)
Foreign exchange (loss)/gain 5(i) 2,635 1,000
------------ ------------
Net finance costs (66,683) (91,759)
------------ ------------
Loss before tax (5,841,096) (3,118,121)
Tax expense 6 - -
------------ ------------
Loss (5,841,096) (3,118,121)
------------ ------------
Other comprehensive income/(loss)
Items that may be reclassified to
profit or loss
Foreign operations - foreign currency
translation differences (34,949) 79,951
------------ ------------
Other comprehensive income, net of
tax (34,949) 79,951
------------ ------------
Total comprehensive loss (5,876,045) (3,038,170)
------------ ------------
Earnings per share
Basic loss per share (cents per share) 7 (0.18) (0.13)
Diluted loss per share (cents per
share) 7 (0.18) (0.13)
The above Consolidated Statement of Profit or Loss and Other
Comprehensive Income is to be read in conjunction with the
accompanying notes.
Restated Restated
2020 2019 1 July
2018
Note $ $ $
-------------- -------------- --------------
Assets
Cash and cash equivalents 12 173,816 357,970 375,507
Trade and other receivables 13 645,344 497,974 738,784
Prepayments 24,212 156,464 115.271
Inventories 10 146,084 1,141,309 1.303.245
-------------- -------------- --------------
989,456 2,153,717 2,532,807
Assets held for sale 20 327,791 - -
-------------- -------------- --------------
Total current assets 1,317,247 2,153,717 2,532,807
-------------- -------------- --------------
Exploration and evaluation 8 581,322 568,888 539,793
Development assets 9 9,823,965 9,869,770 9,539,435
Property, plant and equipment 17 104,040 145,927 178,930
Total non-current assets 10,509,327 10,584,585 10,257,618
-------------- -------------- --------------
Total assets 11,826,574 12,738,302 12,790,425
-------------- -------------- --------------
Liabilities
Trade and other payables 14 1,071,344 697,184 779,249
Employee benefits 11 143,110 148,731 274,651
Borrowings 15 769,555 563,955 -
11,
Provisions 28 1,165,671 855,554 811,798
-------------- -------------- --------------
3,149,680 2,265,424 1,865,698
Liabilities directly associated with
the assets held for sale 20 451,469 - -
-------------- -------------- --------------
Total current liabilities 3,601,149 2,265,424 1,865,698
-------------- -------------- --------------
Provisions 11 4,505,601 3,733,837 3,542,877
Total non-current liabilities 4,505,601 3,733,837 5,408,575
-------------- -------------- --------------
Total liabilities 8,106,750 5,999,261 5,408,575
-------------- -------------- --------------
Net assets 3,719,824 6,739,041 7,382,390
-------------- -------------- --------------
Equity
Issued capital 18(a) 179,254,814 176,502,200 174,046,036
Reserves 18(b) 7,445,820 7,501,388 7,628,101
Accumulated losses (182,980,810) (177,264,547) (174,291,747)
-------------- -------------- --------------
Total equity 3,719,824 6,739,041 7,382,390
-------------- -------------- --------------
Refer to Note 3 in relation to details of the restatement.
The above Consolidated Statement of Financial Position is to be
read in conjunction with the accompanying notes.
Attributable to Owners of the Company
Foreign
Currency
Issued Option Loans Options Translation Accumulated
Capital Reserve Reserve Reserve Losses Total Equity
$ $ $ $ $ $
Note 18(a) 18(b) 18(b) 18(b)
-------------- -------------
Balance at 30 June 2018 174,046,036 331,889 - 7,296,212 (174,291,747) 7,382,390
------------ ---------- ---------------- ------------- -------------- -------------
Additional doubtful debts
provision recognised on
implementation of AASB
9 - - - - (177,874) (177,874)
Balance at 30 June 2018
- adjusted 174,046,036 331,889 - 7,296,212 (174,469,621) 7,204,516
Total comprehensive
(loss)/income
Loss - - - - (3,118,121) (3,118,121)
------------ ---------- ---------------- ------------- -------------- -------------
Other comprehensive income
Foreign currency
translation
differences - - - 79,951 - 79,951
------------ ---------- ---------------- ------------- -------------- -------------
Total other comprehensive
(loss)/income - - - 79,951 - 79,951
------------ ---------- ---------------- ------------- -------------- -------------
Total comprehensive loss - - - 79,951 (3,118,121) (3,038,170)
------------ ---------- ---------------- ------------- -------------- -------------
Transactions with owners
of the Company
Contributions and
distributions
Shares issued 2,126,049 - - - - 2,126,049
Capital raising costs
(1) (176,187) 27,791 - - - (148,396)
Shares issued on exercise
of options 395,367 (293,217) - - 293,217 395,367
Transfers on forfeited
options - (29,978) - - 29,978 -
Recognition of equity
component of loans (Note
15) - - 98,685 - - 98,685
Derecognition of equity
component of loan upon
repayment - - (9,945) - - (9,945)
Share-based payment
transactions 110,935 - - - - 110,935
------------ ---------- ---------------- ------------- -------------- -------------
Total transactions with
owners of the Company 2,456,164 (295,404) 88,740 - 323,195 2,572,695
------------ ---------- ---------------- ------------- -------------- -------------
Balance at 30 June 2019 176,502,200 36,485 88,740 7,376,163 (177,264,547) 6,739,041
Total comprehensive
(loss)/income
Loss - - - - (5,841,096) (5,841,096)
------------ ---------- ---------------- ------------- -------------- -------------
Other comprehensive income
Foreign currency
translation
differences
Total comprehensive
(loss)/income - - - (34,949) - (34,949)
------------ ---------- ---------------- ------------- -------------- -------------
Total comprehensive loss - - - (34,949) (5,841,096) (5,876,045)
------------ ---------- ---------------- ------------- -------------- -------------
Transactions with owners
of the Company
Contributions and
distributions
Shares issued 2,560,287 - - - - 2,560,287
Shares to be issued 90,449 - - - - 90,449
Capital raising costs
(1) (228,122) - - - - (228,122)
Shares issued on exercise
of options 330,000 - - - - 330,000
Transfers on forfeited
options - (8,698) (65,644) - 74,342 -
Recognition of equity
component of loans (Note
15) - - 62,978 - - 62,978
Derecognition of equity
component of loan upon
repayment - - (50,490) - 50,490 -
Share-based payment
transactions - 41,415 - - - 41,415
Total transactions with
owners of the Company 2,752,614 32,717 (53,336) - 124,832 2,856,827
------------ ---------- ---------------- ------------- -------------- -------------
Balance at 30 June 2020 179,254,814 69,202 35,404 7,341,214 (182,980,810) 3,719,824
------------ ---------- ---------------- ------------- -------------- -------------
(1) Capital raising costs include cash payments and the fair
value of options granted to the underwriter.
The above Consolidated Statement of Changes in Equity is to be
read in conjunction with the accompanying notes.
2020 2019
Note $ $
------------ ------------
Cash flows from operating activities
Cash receipts from customers - 260,501
Payments to suppliers and employees (2,018,352) (2,575,376)
------------ ------------
Cash outflow from operations (2,018,352) (2,314,875)
Payments for exploration and evaluation expenses (897,455) (629,639)
Proceeds from government assistance arrangements 98,000 -
Interest received 1,659 6,417
Interest paid (21,513) (24,466)
Net cash used in operating activities 12 (2,837,661) (2,962,563)
------------ ------------
Cash flows from investing activities
Proceeds from sale of assets and scrap materials - 572
Acquisition of exploration assets (Note 19) (72,750) -
Acquisition of exploration licence interests (49,583) -
Acquisition of property, plant and equipment (1,453) (2,149)
------------ ------------
Net cash from/(used in) investing activities (123,786) (1,577)
------------ ------------
Cash flows from financing activities
Proceeds from issue of share capital 18(a) 2,365,288 2,126,049
Proceeds from exercise of share options 330,000 395,367
Payment for share issue costs (186,708) (148,396)
Proceeds from borrowings 597,781 645,000
Repayment of borrowings (330,000) (65,000)
Net cash from financing activities 2,776,361 2,953,020
------------ ------------
Net decrease in cash and cash equivalents (185,086) (11,120)
Cash and cash equivalents at 1 July 357,970 375,507
Effect of exchange rate fluctuations on cash held 932 (6,417)
Cash and cash equivalents at 30 June 12 173,816 357,970
------------ ------------
The above Consolidated Statement of Cash Flows is to be read in
conjunction with the accompanying notes.
NOTE 1 - REPORTING ENTITY
Oilex Ltd (the Company) is a for-profit entity domiciled in
Australia. These consolidated financial statements comprise the
Company and its subsidiaries (collectively the Group and
individually Group Entities). Oilex Ltd is a company limited by
shares incorporated in Australia whose shares are publicly traded
on the Australian Securities Exchange (ASX) and on the Alternative
Investment Market (AIM) of the London Stock Exchange. The Group is
primarily involved in the exploration, evaluation, development and
production of hydrocarbons.
Parent Entity Information
In accordance with the Corporations Act 2001, these financial
statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in
note 25.
NOTE 2 - BASIS OF PREPARATION
(a) Statement of Compliance
The consolidated financial statements are general purpose
financial statements which have been prepared in accordance with
Australian Accounting Standards (AASBs) adopted by the Australian
Accounting Standards Board (AASB) and the Corporations Act 2001 .
The consolidated financial statements comply with International
Financial Reporting Standards (IFRS) adopted by the International
Accounting Standards Board (IASB).
The consolidated financial statements were authorised for issue
by the Board of Directors on 31 October 2020.
(b) Basis of Measurement
The consolidated financial statements have been prepared on the
historical cost basis except for share-based payment arrangements
measured at fair value and the foreign currency translation
reserve.
A number of the Group's accounting policies and disclosures
require the determination of fair value, for both financial and
non-financial assets and liabilities. Fair values have been
determined for some measurement and/or disclosure purposes and
where applicable, further information about the assumptions made in
determining fair values is disclosed in the notes specific to that
asset or liability.
(c) Going Concern Basis
The Directors believe it is appropriate to prepare the
consolidated financial statements on a going concern basis, which
contemplates continuity of normal business activities and the
realisation of assets and settlement of liabilities in the ordinary
course of business.
The Group has incurred a loss of $5,841,096 (2019: $3,118,121)
and had cash outflows from operating activities of $2,837,661
(2019: $2,962,563). As at 30 June 2020, the Group's current
liabilities exceeded current assets by $2,283,902 (2019: $111,707)
and the Group has cash and cash equivalents of $173,816 (2019:
$357,970).
On 17 July 2020, the Company announced that it had issued the
second tranche of 55,555,555 shares at GBP0.0009 (A$0.001792)
pursuant to the equity raise announcements on 15 March 2020 and 23
April 2020.
On 27 July 2020, the Company entered into an amendment agreement
to vary the terms of its Series C loan funding facility of
GBP125,000 entered into on 3 February 2020. Pursuant to the
amendment, the loan repayment date was extended from 1 August 2020
to 31 October 2020. In addition, the Company will issue 113,636,364
new options to the lender at an exercise price of GBP0.0011
(A$0.00197) and expiry date of 29 January 2021, which is subject to
shareholder approval on or before 30 November 2020. All other loan
terms and conditions remain the same; and are extended to 31
October 2020.
On 31 July 2020, the Company announced that it had arranged an
equity capital raising to secure funding of GBP0.25m (A$0.5m)
through the placing of 312,500,000 new shares at GBP0.0008
(A$0.00144) per share. All shares were subsequently issued on 10
August 2020.
Pursuant to an amendment agreement to the Series C loan of
GBPGBP125,000 loan announced on 30 October 2020, the loan repayment
date has been extended from 31 October 2020 to 31 December 2020.
All other terms remain the same and are extended to 31 December
2020.
NOTE 2 - BASIS OF PREPARATION (CONTINUED)
(c) Going Concern Basis (Continued)
The Group also requires further funding within the next twelve
months in order to repay the Series C & D loans (amount drawn
at 30 June 2020: GBP310,000), meet planned expenditures for its
projects and ongoing administrative expenses and to progress the
Cambay drilling programme, and for any new business opportunities
that the Group may pursue.
The Directors believe that the Group will be able to secure
sufficient funding to meet the requirements to continue as a going
concern, due to its history of previous capital raisings,
acknowledging that the structure and timing of any capital raising
is dependent upon investor support, prevailing capital markets,
shareholder participation, oil and gas prices and the outcome of
planned exploration and evaluation activities, which creates
uncertainty. In addition, the sale process towards securing a new
joint venture partner for the Cambay Production Sharing Contract
(PSC) continues to progress despite the delays being experienced by
all parties due to the impact of Covid-19 in India.
The Directors consider the going concern basis of preparation to
be appropriate based on its forecast cash flows for the next twelve
months and that the Group will be in a position to continue to meet
its minimum administrative, evaluation and development expenditures
and commitments for at least twelve months from the date of this
report.
If further funds are not able to be raised or realised, then it
may be necessary for the Group to sell or farmout its exploration
and development assets and to reduce discretionary administrative
expenditure.
The ability of the Group to achieve its forecast cash flows,
particularly the raising of additional funds, represents a material
uncertainty that may cast significant doubt about whether the Group
can continue as a going concern, in which case it may not be able
to realise its assets and extinguish its liabilities in the normal
course of business and at the stated amounts in the financial
statements.
(d) Currency and Foreign Currency Transactions
These consolidated financial statements are presented in
Australian dollars, which is the Company's functional currency. The
functional currency of the Company's subsidiaries is United States
or Australian dollars.
Transactions in foreign currencies are translated into the
respective functional currencies of Group entities at exchange
rates at the dates of the transactions.
Monetary assets and liabilities denominated in foreign
currencies are translated into the functional currency at the
foreign exchange rate at the reporting date.
Non-monetary assets and liabilities denominated in foreign
currencies that are measured at fair value are translated into the
functional currency at the exchange rate at the date that the fair
value was determined. Non-monetary items that are measured in terms
of historical cost in a foreign currency are translated using the
exchange rate at the date of the transaction. Foreign currency
differences are generally recognised in profit or loss.
(e) Basis of Consideration
These consolidated financial statements comprise the Company and
its subsidiaries (collectively the Group and individually Group
Entities).
i) Subsidiaries
Subsidiaries are entities controlled by the Group. The list of
controlled entities is contained in note 19. The financial
statements of subsidiaries are included in the consolidated
financial statements from the date that control commences until the
date that control ceases.
ii) Joint Arrangements - Joint Operations
The interests of the Group in unincorporated joint operations
and jointly controlled assets are recorded in note 21.
iii) Transactions Eliminated on Consolidation
Intragroup balances and transactions, and any unrealised gains
and losses or income and expenses arising from intragroup
transactions, are eliminated in preparing the consolidated
financial statements.
NOTE 2 - BASIS OF PREPARATION (CONTINUED)
(f) Key Estimates, Judgements and Assumptions
In preparing these consolidated financial statements, management
continually evaluate judgements, estimates and assumptions that
affect the application of the Group's accounting policies and the
reported amounts of assets, liabilities, income and expenses. All
judgements, estimates and assumptions made are believed to be
reasonable based on the most current set of circumstances. Actual
results may differ from these judgements, estimates and
assumptions. Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to estimates are recognised
prospectively.
A key assumption underlying the preparation of the financial
statements is that the entity will continue as a going concern. An
entity is a going concern when it is considered to be able to pay
its debts as and when they fall due, and to continue in operation,
without any intention or necessity to liquidate or otherwise wind
up its operations.
Judgement has been required in assessing whether the entity is a
going concern as set out in note 2(c).
In the process of applying the Group's accounting policies,
management have made judgements, assumptions and estimation
uncertainties that have a significant risk of resulting in a
material adjustment within the next financial year as follows:
Income Tax - refer note 6
Exploration and Evaluation Assets - refer note 8
Development Assets - refer note 9
Provisions - refer note 11
Trade and other receivables - refer note 13
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the
Coronavirus (COVID-19) pandemic has had, or may have, on the
consolidated entity based on known information. This consideration
extends to the nature of the products and services offered,
customers, supply chain, staffing and geographic regions in which
the consolidated entity operates.
The impact of the Coronavirus (COVID-19) up to 30 June 2020 has
been financially negative for the consolidated entity. This is
largely due to its general impact in India where significant delays
have been experienced with the sale process being conducted by GSPC
for its 55% interest in the Cambay Production Sharing Contract
(PSC). As a result, Indian operations have continued to be
maintained on a 'care and maintenance' basis for a longer period
than originally anticipated.
Other than this mater and those addressed in specific notes,
there does not currently appear to be either any other significant
impact upon the financial statements or any significant
uncertainties with respect to events or conditions which may impact
the consolidated entity unfavourably as at the reporting date or
subsequently as a result of the Coronavirus (COVID-19)
pandemic.
(g) Rounding of Amounts
The Company is a company of the kind referred to in ASIC
Corporations (Rounding in Financial/Directors' Reports) Instrument
2016/191 and therefore the amounts contained in this report and in
the financial report have been rounded to the nearest dollar,
unless otherwise stated.
(h) Accounting Policies
Significant accounting policies that are relevant to the
understanding of the consolidated financial statements have been
provided throughout the notes to the financial statements.
Accounting policies that are determined to be non-significant have
not been included in the consolidated financial statements.
The accounting policies disclosed have been applied consistently
to all periods presented in these consolidated financial statements
and have been applied consistently by Group entities, except for
the following changes in accounting policies.
Changes in significant accounting policies
a) Leases
The Group has initially adopted AASB 16 Leases from 1 July 2019.
A number of other new standards are effective from 1 July 2019 but
they do not have a material effect on the Group's financial
statements.
AASB 16 introduced a single, on-balance sheet accounting model
for leases. As a result, the Group, as a lessee, is required to
recognise use-of-right assets representing its right to use the
underlying assets and lease liabilities representing its obligation
to make lease payments.
NOTE 2 - BASIS OF PREPARATION (CONTINUED)
The Group has applied AASB 16 using the modified retrospective
approach, under which the cumulative effect of initial application
is recognised in retained earnings at 1 July 2019. Accordingly, the
comparative information presented for 2018 has not been restated. -
i.e. it is presented, as previously reported, under AASB 117 and
related interpretations. The details of the changes in accounting
policies are disclosed below.
Definition of a lease
Previously, the Group determined at contract inception whether
an arrangement was or contained a lease under AASB Interpretation 4
Determining Whether an Arrangement contains a Lease. The Group now
assesses whether a contract is, or contains, a lease if the
contract conveys a right to control the use of an identified asset
for a period of time in exchange for consideration.
At inception or on reassessment of a contract that contains a
lease component, the Group allocates the consideration in the
contract to each lease and non-lease component on the basis of
their stand-alone prices. However, for leases of properties in
which it is a lessee, the Group has elected not to separate
non-lease components and will instead account for the lease and
non-lease components as a single lease component.
As a lessee
Accounting policy (applied from 1 July 2019)
As a lessee, the Group previously classified leases as operating
or finance leases based on its assessment of whether the lease
transferred substantially all of the risks and rewards of
ownership. Under AASB 16, the Group recognises right-of-use assets
and lease liabilities for most leases - i.e. these leases are on
the balance sheet.
However, the Group has elected not to recognise right-of-use
assets and lease liabilities for some leases of low-value assets
and short-term leases (lease term of 12 months or less). The Group
recognises the lease payments associated with these leases as an
expense on a straight-line basis over the term lease.
The Group recognises a right-of-use asset and a lease liability
at the lease commencement date. The right-of-use asset is initially
measured at cost, and subsequently at cost less any accumulated
depreciation and impairment losses; and adjusted for certain
remeasurements of the lease liability.
The lease liability is initially measured at the present value
of lease payments that are not paid at the commencement date,
discounted using the interest rate implicit in the lease or, if
that rate cannot be readily determined, the Group's incremental
borrowing rate. Generally, the Group uses its incremental borrowing
rate as the discount rate.
The lease liability is subsequently increased by the interest
cost on the lease liability and decreased by lease payment made. It
is remeasured when there is a change in future lease payments
arising from a change in an index or rate, a change in the estimate
of the amount expected to be payable under a residual value
guarantee, or as appropriate, changes in the assessment of whether
a purchase or extension option is certainly reasonable certain to
be exercised or a termination option is reasonably certain not to
be exercised.
The Group shall apply judgement to determine the lease term for
some lease contracts in which it is a lessee that include renewal
options. The assessment of whether the Group is reasonably certain
to exercise such options impacts the lease term, which
significantly affects the amount of lease liabilities and
right-of-use assets recognised.
Transition
The Group has applied the exemption not to recognise
right-of-use assets and liabilities for leases with less than 12
months of lease term when applying AASB 16 to leases previously
classified as operating leases under AASB 117.
As a result of initially applying AASB 16 as at 1 July 2019,
there has been $nil impact to the balance sheet including retained
earnings, and the current loss for the financial period ending 30
June 2020.
b) Initial application of IFRIC Uncertainty over Income Tax Treatments
The Group has adopted IFRIC 23 with an initial application date
of 1 July 2019.
The IFRIC outlines what to do when there is uncertainty over
income tax treatments. The Group will determine if the uncertain
tax position needs to be assessed on an entity-by-entity-basis or
as a group. Furthermore, an assessment will be done on the
probability that the ATO (or relevant tax authority) will accept
the treatment of the uncertain tax event and determine its
accounting tax position.
In the event that it is not probable that the relevant tax
authority will accept the treatment, the Group will determine the
effect of the uncertain tax event and the accounting tax position
using either the expected value method or the most likely
amount.
NOTE 2 - BASIS OF PREPARATION (CONTINUED)
(i) Standards issued but not yet effective
A number of new standards are effective for annual periods
beginning after 1 January 2020 and earlier application is
permitted; however, the Group has not early adopted the new or
amended standards in preparing these consolidated financial
statements.
The following amended standards and interpretations are not
expected to have a significant impact on the Group's consolidated
financial statements.
- Amendments to References to Conceptual Framework in IFRS Standards.
- Definition of a Business (Amendments to AASB 3).
- Definition of Material (Amendments to AASB 1 and AASB 8).
NOTE 3 - RESTATEMENT OF COMPARATIVES - error in financial
statements
An adjustment has been made to opening retained earnings at 1
July 2018 with respect to an accounting error made with initial
recognition and subsequent adjustments to the Provision for
Restoration related to Development Assets (Note 9). In accordance
with AASB 116 - Property, Plant and Equipment the correct
accounting treatment for the costs to restore a mine site is to
recognise a Restoration Development Asset to the extent that the
development relates to future production activities. In prior years
the rehabilitation costs and respective adjustments have been
incorrectly charged to the profit and loss. The adjustment has been
made as follows:
1 July 1 July 2018
2018
$ $ $
Restated Adjustment Reported
-------------- ------------ --------------
Assets
Cash and cash equivalents 375,507 - 375,507
Trade and other receivables 738,784 - 738,784
Prepayments 115,271 - 115.271
Inventories 1,303,245 - 1.303.245
-------------- ------------ --------------
Total current assets 2,532,807 2.532,807
-------------- ------------ --------------
Exploration and evaluation 539,793 - 539,793
Development assets 9,539,435 3,374,180 6,165,255
Property, plant and equipment 178,930 - 178,930
Total non-current assets 10,257,618 3,374,180 6,883,978
-------------- ------------ --------------
Total assets 12,790,425 3,374,180 9,416,785
-------------- ------------ --------------
Liabilities
Trade and other payables 779,249 - 779,249
Employee benefits 274,651 - 274,651
Provisions 811,798 - 811,798
-------------- ------------ --------------
Total current liabilities 1,865,698 - 1,865,698
-------------- ------------ --------------
Provisions 3,542,877 - 3,542,877
Total non-current liabilities 3,542,877 - 3,542,877
-------------- ------------ --------------
Total liabilities 5,408,575 - 5,408,575
-------------- ------------ --------------
Net assets 7,382,390 3,374,180 4,008,210
-------------- ------------ --------------
Equity
Issued capital 174,046,036 - 174,046,036
Reserves 7,628,101 - 7,628,101
Accumulated losses (174,291,747) 3,374,180 (177,665,927)
-------------- ------------ --------------
Total equity 7,382,390 3,374,180 4,008,210
-------------- ------------ --------------
This section focuses on the results and performance of the
Group.
NOTE 4 - OPERATING SEGMENTS
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses, including revenues and expenses that relate to
transactions with any of the Group's other components. The Group
has identified its operating segments based upon the internal
management reports that are reviewed and used by the executive
management team in assessing performance and that are used to
allocate the Group's resources. The operating segments identified
by management are based on the geographical location of the
business. Each segment has responsible officers that are
accountable to the Managing Director (the Group's chief operating
decision maker). The operating results of a ll operating segments
are regularly reviewed by the Group's Managing Director to make
decisions about resources to be allocated to the segment and assess
its performance and for which discrete financial information is
available. Segment results that are reported to the Managing
Director include items directly attributable to a segment as well
as those that can be allocated on a reasonable basis.
The Group's executive management team evaluates the financial
performance of the Group and its segments principally with
reference to revenues, production costs, expenditure on exploration
evaluation and development costs.
The Group undertakes the exploration, development and production
of hydrocarbons and its revenue is from the sale of oil and gas.
Information reported to the Group's chief operating decision maker
is on a geographical basis.
Financing requirements, finance income and expenses are managed
at a Group level.
Corporate items include administration costs comprising
personnel costs, head office occupancy costs and investor and
registry costs. It may also include expenses incurred by
non-operating segments, such as new ventures and those undergoing
relinquishment. Assets and liabilities not allocated to operating
segments and disclosed are corporate, and mostly comprise cash,
plant and equipment, receivables as well as accruals for head
office liabilities.
Major Customer
The Group's most significant customers are Enertech Fuel
Solutions Pvt Limited with gas sales representing 0% of the Group's
total revenues (2019: 39%) and Indian Oil Corporation Limited, in
its capacity as nominee of the Government of India, with oil sales
representing 0% of the Group's total revenues (2019: 61%).
No revenues were recognised during the financial period as oil
and gas operations were maintained on a 'care and maintenance'
basis.
Revenue
The Group recognises revenue as follows:
a) Revenue from Contracts with Customers
Revenue is recognised at an amount that reflects the
consideration to which the Group is expected to be entitled in
exchange for transferring goods or services to a customer. For each
contract with a customer, the Group: identifies the contract with a
customer; identifies the performance obligations in the contract;
determines the transaction price which takes into account estimates
of variable consideration and the time value of money; allocates
the transaction price to the separate performance obligations on
the basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognises revenue
when or as each performance obligation is satisfied in a manner
that depicts the transfer to the customer of the goods or services
promised.
NOTE 4 - OPERATING SEGMENTS (CONTINUED)
b) Interest
Interest revenue is recognised as interest accrues using the
effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest
income over the relevant period using the effective interest rate,
which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the
net carrying amount of the financial asset.
c) Other Revenue
Other revenue is recognised when it is received or when the
right to receive payment is established.
Expenses
Impairment - refer notes 8 and 9
Doubtful debts - refer note 13
Depreciation - refer note 17
Amortisation - refer note 9
Employee benefits - refer note 11
Leases - refer note 27
Goods and Services Tax ('GST') and other similar Taxes
Revenues, expenses and assets are recognised net of the amount
of associated GST, unless the GST incurred is not recoverable from
the tax authority. In this case it is recognised as part of the
cost of the acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of
GST receivable or payable. The net amount of GST recoverable from,
or payable to, the tax authority is included in other receivables
or other payables in the statement of financial position.
Cash flows are presented on a gross basis. The GST components of
cash flows arising from investing or financing activities which are
recoverable from, or payable to the tax authority, are presented as
operating cash flows.
Commitments and contingencies are disclosed net of the amount of
GST recoverable from, or payable to, the tax authority.
NOTE 4 - OPERATING SEGMENTS (Continued)
India Australia JPDA (1) Indonesia United Kingdom Corporate (2) Consolidated
---------------- ------------------------ --------------- --------------------- ------------------- ----------------- -------------------------- --------------------------
2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019 2020 2019
$ $ $ $ $ $ $ $ $ $ $ $ $ $
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
Revenue
External
revenue - 188,220 - - - - - - - - - - - 188,220
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
Other costs (30
June 2019: Cost
of sales)
Care and
maintenance
costs (30 June
2019:
Production
costs) (230,684) (275,455) - - - - - - - - - - (230,684) (275,455)
Amortisation of
development
assets (18) (1,931) - - - - - - - - - - (18) (1,931)
Movement in oil
stocks
inventory (9,389) (66,186) - - - - - - - - - - (9,389) (66,186)
Write-down of
inventories to
net realisable
values (1,030,060) (161,354) - - - - - - - - - - (1,030,060) (161,354)
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
Total other
costs
(30 June 2019:
Cost of sales) (1,270,151) (504,926) - - - - - - - - - - (1,270,151) (504,926)
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
Gross loss (1,270,151) (316,706) - - - - - - - - - - (1,270,151) (316,706)
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
Exploration
expenditure
expensed (587,546) (456,892) - - - - - - (128,847) - (292,326) (34,783) (1,008,718) (491,675)
Impairment of
development
assets (1,348,458) - - - - - - - - - - - (1,348,458) -
Depreciation (19,231) (21,680) - - - - - - - - (7,635) (11,084) (26,866) (32,763)
Share-based
payments - - - - - - - - - - - (110,935) - (110,935)
Other income - - - - - - - - - - 98,000 - 98,000 -
Provision for
doubtful debts
expense - - - - - - - - - - 107,313 (108,206) 107,313 (108,206)
Other expenses (7,663) (10,459) 123,332 - (476,017) (85,050) (49,028) 233,653 - - (1,916,155) (2,104,219) (2,325,532) (1,966,075)
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
Reportable
segment
profit/(loss)
before income
tax (3,233,049) (805,737) 123,332 - (476,017) (85,050) (49,028) 233,653 (128,847) - (2,010,804) (2,369,226) (5,774,413) (3,026,360)
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
Net finance
income (69,318) (92,759)
Foreign
exchange
(loss)/gain 2,635 998
Income tax
expense - -
------------ ------------
Net loss for
the
year (5,841,096) (3,118,121)
------------ ------------
Segment assets 11,025,333 8,721,862 317,341 7 17,340 14,238 - - - - 466,560 628,015 11,826,574 12,738,302
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
Segment
liabilities 5,449,819 4,104,158 - - 1,227,090 861,776 84,950 78,454 121,673 - 1,223,218 954,873 8,106,750 5,999,261
---------------- ------------ ---------- -------- ----- ---------- --------- --------- -------- ---------- ----- ------------ ------------ ------------ ------------
There were no significant inter-segment transactions during the
year.
(1) Joint Petroleum Development Area.
(2) Corporate represents a reconciliation of reportable segment
revenues, profit or loss, assets and liabilities to the
consolidated figure.
note 5 - revenue and expenses
Loss from ordinary activities before tax has been determined
after the following revenues and expenses:
Note 2020 2019
$ $
------------ ------------
(a) Revenue
Oil sales - 115,673
Gas sales - 72,547
------------ ------------
- 188,220
------------ ------------
(b) Other costs (30 June 2019: Cost
of sales)
Care and maintenance costs (30 June
2019: Production costs) (230,684) (275,455)
Amortisation of development assets (18) (1,931)
Movement in oil stocks inventory (9,389) (66,186)
Write-down of inventory to net realisable
values (1,030,060) (161,354)
------------ ------------
(1,270,151) (504,926)
------------ ------------
(c) Other income
Government assistance arrangements
(1) 98,000 -
------------ ------------
98,000 -
------------ ------------
(d) Exploration expense 4 (1,008,719) (491,675)
------------ ------------
(e) Administration expenses
Employee benefits expense (718,210) (819,627)
Redundancy benefits - (31,928)
Administration expense (1,297,267) (1,106,295)
(2,015,477) (1,957,850)
------------ ------------
(f) Other Expenses
Depreciation expense 17 (26,867) (32,763)
Termination penalty provision JPDA
06-103 PSC (297,885) -
Loss on disposal of plant and equipment (12,169) (8,227)
(336,921) (40,990)
------------ ------------
(g) Finance income
Interest income 1,659 4,403
------------ ------------
(h) Finance costs
Interest expense - borrowings (70,977) (97,162)
(i) Foreign exchange (Loss)/Gain -
net
Foreign exchange (loss)/gain- realised 10,912 5,582
Foreign exchange (loss)/gain - unrealised (8,277) (4,582)
------------ ------------
2,635 1,000
------------ ------------
(1) Assistance packages provided by the Federal and State
government to provide assistance to businesses and employers in
response to the negative impacts of Covid-19 upon the Australian
and Western Australia economies.
Accounting Policy - Revenue
The Group's Revenue policy is outlined in note 4.
NOTE 6 - INCOME TAX EXPENSE
Numerical reconciliation between tax expense and pre-tax
accounting loss:
2020 2019
$ $
------------ ------------
Loss before tax (5,841,096) (3,118,121)
------------ ------------
Tax using the domestic corporation tax
rate of 27.5% (2019: 27.5%) (1,606,301) (857,483)
Effect of tax rate in foreign jurisdictions (265,604) (497,254)
Non-deductible expenses
Share-based payments - 30,507
Foreign expenditure non-deductible 1,939,864 1,609,412
Other non-deductible expenses 149,560 208,577
Non assessable income
Government assistance arrangements (13,750) -
203,769 493,759
------------ ------------
Unrecognised deferred tax assets generated
during the year and not
brought to account at reporting date as
realisation is not regarded as probable - -
------------ ------------
Tax expense 203,769 493,759
Tax losses utilised not previously brought
to account (203,769) (493,759)
------------ ------------
Impact of reduction in future tax rates 448,166 -
Unrecognised deferred tax assets not brought
to account (448,166) -
------------ ------------
Tax expense for the year - -
------------ ------------
Tax Assets and Liabilities
During the year ended 30 June 2020, $203,769 of tax losses were
recognised and were offset against the current tax liability
resulting in nil tax assets and liabilities.
2020 2019
$ $
----------- -----------
Unrecognised deferred tax assets not brought
to account at reporting date as realisation
is not regarded as probable - temporary
differences
Other 28,520,335 27,482,151
Losses available for offset against future
taxable income 16,819,556 17,018,120
----------- -----------
Deferred tax asset not brought to account 45,339,891 44,500,271
----------- -----------
The deductible temporary differences and tax losses do not
expire under current tax legislation.
The deferred tax asset not brought to account for the 2020
financial year will only be realised if:
-- It is probable that future assessable income will be derived
of a nature and of an amount sufficient to enable the benefit to be
realised;
-- The conditions for deductibility imposed by the tax
legislation continue to be complied with; and
-- The companies are able to meet the continuity of ownership
and/or continuity of business tests.
The foreign component of the deferred tax asset not brought to
account for the 2020 financial year will only be realised if the
Group derives future assessable income of a nature and of an amount
sufficient to enable the benefit to be realised and the Group
continues to comply with the deductibility conditions imposed by
the Income Tax Act 1961 (India) and there is no change in income
tax legislation adversely affecting the utilisation of the
benefits.
Change in Corporate Tax Rate
There has been a legislated change in the corporate tax rate
that will apply to future income tax years. The impact of this
reduction in the corporate tax rate has been reflected in the
unrecognised tax positions and the prima facie income tax
reconciliation above.
NOTE 6 - INCOME TAX EXPENSE (continued)
Tax Consolidation
In accordance with tax consolidation legislation the Company, as
the head entity of the Australian tax-consolidated group, has
assumed the deferred tax assets initially recognised by wholly
owned members of the tax-consolidated group with effect from 1 July
2004. Total tax losses of the Australian tax-consolidated group,
available for offset against future taxable income are $4,501,080
(2019: $5,480,637).
Accounting Policy
Income tax expense comprises current and deferred tax. Income
tax is recognised in profit or loss except to the extent that it
relates to a business combination, or items recognised directly in
equity, or in other comprehensive income.
Current tax is the expected tax payable on the taxable income
for the year, using tax rates enacted or substantively enacted at
the reporting date, and any adjustment to tax payable in respect of
previous years.
Deferred tax assets and liabilities are offset if there is a
legally enforceable right to offset current tax liabilities and
assets, and they relate to income taxes levied by the same tax
authority on the same taxable entity, or on different tax entities,
but they intend to settle current tax liabilities and assets on a
net basis or their tax assets and liabilities will be realised
simultaneously.
Deferred tax is recognised in respect of temporary differences
between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation
purposes. Deferred tax is not recognised for differences relating
to investments in subsidiaries to the extent that they probably
will not reverse in the foreseeable future. Deferred tax is
measured at the tax rates that are expected to be applied to the
temporary differences when they reverse, based on the laws that
have been enacted or substantively enacted by the reporting
date.
A deferred tax asset is recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary difference can be utilised. Deferred tax assets
are reviewed at each reporting date and reduced to the extent that
it is no longer probable that the related tax benefit will be
realised.
Key Estimates and Assumptions
The application of the Group's accounting policy for recognition
of tax losses requires management to make certain estimates and
assumptions as to future events and circumstances, including the
assessment of whether economic quantities of resources have been
found, or alternatively, that the sale of the respective areas of
interest will be achieved. Any such estimates and assumptions may
change as new information becomes available. A deferred tax asset
is only recognised for unused losses if it is probable that future
taxable profits will be available to utilise those losses.
In determining the amount of current and deferred tax the Group
considers the impact of uncertain tax positions and whether
additional taxes and interest may be due. The Group believes that
its accruals for tax liabilities are adequate for all open tax
years based on its assessment of many factors, including
interpretations of tax law and prior experience. This assessment
relies on estimates and assumptions and may involve a series of
judgements about future events. New information may become
available that causes the Group to change its judgement regarding
the adequacy of existing tax liabilities, such changes to tax
liabilities will impact tax expense in the period that such a
determination is made.
NOTE 7 - LOSS PER SHARE
(a) Basic Loss Per Share
2020 2019
$ $
-------------- --------------
Loss used in calculating earnings per share
Loss for the period attributable to ordinary shareholders 5,841,096 3,118,121
-------------- --------------
2020 2019
Note Number Number
-------------- --------------
Weighted average number of ordinary shares
Issued ordinary shares at 1 July 18 2,587,318,001 2,001,968,379
Effect of shares issued 575,564,712 312,684,194
Effect of share options exercised 57,280,753 61,790,019
-------------- --------------
Weighted average number of ordinary shares at 30 June 3,220,163,466 2,376,442,592
-------------- --------------
(b) Diluted Loss Per Share
The Company's potential ordinary shares, being its options
granted, are not considered dilutive as the conversion of these
instruments would result in a decrease in the net loss per
share.
Accounting Policy
Basic earnings per share is calculated by dividing net profit or
loss attributable to ordinary shareholders of the parent entity by
the weighted average number of ordinary shares outstanding during
the year, adjusted for any bonus element.
Diluted earnings per share is determined by adjusting the profit
attributable to ordinary shareholders and weighted average number
of shares outstanding for the dilutive effect of potential ordinary
shares, which may comprise outstanding options, warrants and their
equivalents.
This section provides information on the assets employed to
develop value for shareholders and the liabilities incurred as a
result.
NOTE 8 - EXPLORATION AND EVALUATION
2020 2019
$ $
---------- --------
Balance at 1 July 568,888 539,793
Acquisition of exploration licence interests 238,000 -
Reclassification to assets held for sale (238,000) -
(Note 20)
Effect of movements in foreign exchange
rates 12,434 29,095
---------- --------
Balance at 30 June 581,322 568,888
---------- --------
As at 30 June 2020, the balance of exploration and evaluation
assets relates to the Cambay Field, which is currently at
evaluation stage, and there was no impairment of this asset (2019:
Nil).
The Cambay Field has minimal production that is sold to a third
party.
Further development of the Cambay field is presently on hold
pending the completion of the sale process being conducted by GSPC
for its 55% PI in the Cambay PSC. This sale process, however, has
been subject to significant delays due to the impact of Covid-19 in
India.
Accounting Policy
Accounting for exploration and evaluation expenditure is
assessed separately for each area of interest. Exploration and
evaluation expenditure in respect of each area of interest is
accounted for under the successful efforts method. An area of
interest is an individual geological area which is considered to
constitute a favourable environment for the presence of hydrocarbon
resources or has been proven to contain such resources.
Expenditure incurred prior to securing legal rights to explore
an area is expensed. Exploration licence acquisition costs relating
to established oil and gas exploration areas are capitalised.
The costs of drilling exploration wells are initially
capitalised pending the results of the well. Costs are expensed
where the well does not result in a successful discovery.
All other exploration and evaluation expenditure, including
general administration costs, geological and geophysical costs and
new venture expenditure is expensed as incurred, except where:
-- The expenditure relates to an exploration discovery for
which, at reporting date, an assessment of the existence or
otherwise of economically recoverable reserves is not yet complete;
or
-- The expenditure relates to an area of interest under which it
is expected that the expenditure will be recouped through
successful development and exploitation, or by sale.
When an oil or gas field has been approved for commercial
development, the accumulated exploration and evaluation costs are
first tested for impairment and then reclassified as development
assets.
Impairment of Exploration and Evaluation Expenditure
The carrying value of exploration and evaluation assets are
assessed at each reporting date if any of the following indicators
of impairment exist:
-- The exploration licence term in the specific area of interest
has expired during the reporting period or will expire in the near
future and it is not anticipated that this will be renewed;
-- Expenditure on further exploration and evaluation of specific
areas is not budgeted or planned;
-- Exploration for and evaluation of oil and gas assets in the
specific area has not lead to the discovery of potentially
commercial reserves; or
-- Sufficient data exists to indicate that the carrying amount
of the asset is unlikely to be recovered in full, either by
development or sale.
Key Estimates and Assumptions
The application of the Group's accounting policy for exploration
and evaluation expenditure necessarily requires management to make
certain estimates and assumptions as to future events and
circumstances, particularly the assessment of whether economic
quantities of resources have been found, or alternatively, that the
sale of the respective areas of interest will be achieved. Critical
to this assessment are estimates and assumptions as to contingent
and prospective resources, the timing of expected cash flows,
exchange rates, commodity prices and future capital requirements.
These estimates and assumptions may change as new information
becomes available. If, after having capitalised expenditure under
this policy, it is determined that the expenditure is unlikely to
be recovered by future exploitation or sale, then the relevant
capitalised amount will be written off to the consolidated
statement of profit or loss and other comprehensive income.
NOTE 9 - DEVELOPMENT ASSETS
2020 2019
$ $
----------- -----------
Cost - Cambay Development Assets
Balance at 1 July 17,066,528 16,235,257
Effect of movements in foreign exchange
rates 355,248 831,271
----------- -----------
Balance at 30 June 17,421,776 17,066,528
----------- -----------
Amortisation and Impairment Losses - Cambay
Development Assets
Balance at 1 July 10,570,938 10,070,002
Impairment of development assets 1,348,458 -
Amortisation charge for the year 17 1,931
Effect of movements in foreign exchange
rates 183,999 499,005
----------- -----------
Balance at 30 June 12,103,412 10,570,938
----------- -----------
Carrying Amount - Cambay Development Assets 5,318,364 6,495,436
----------- -----------
Cost - Cambay Restoration Asset
Balance at 1 July 3,374,181 3,374,181
Additions during the period 1,131,420 -
Effect of movements in foreign exchange - -
rates
---------- ----------
Balance at 30 June 4,505,601 3,374,181
---------- ----------
Amortisation and Impairment Losses - Cambay
Restoration Asset
Balance at 30 June - -
---------- ----------
Carrying Amount - Cambay Restoration Asset 4,505,601 3,374,181
---------- ----------
Carrying Amounts - Total
At 1 July 9,869,770 9,539,435
---------- ----------
At 30 June 9,823,965 9,869,770
---------- ----------
Cambay Field Development Assets
Development assets are reviewed at each reporting date to
determine whether there is any indication of impairment or reversal
of impairment. Indicators of impairment can include changes in:
market conditions, future oil and gas prices and future costs,
extension of the Cambay Production Sharing Contract and the status
of the dispute resolution with GSPC. An indicator of impairment
identified in the 2020 financial year is Covid-19, which has seen
reduced global demand for energy products and caused delays to the
implementation of the dispute resolution with GSPC. (2019: No
indicators were identified)
An impairment charge of $1,348,458 has been applied to the
Cambay Field development assets for the financial year ended 30
June 2020 (2019: Nil).
Accounting Policy
Development expenditure includes past exploration and evaluation
costs, pre-production development costs, development drilling,
development studies and other subsurface expenditure pertaining to
that area of interest. Costs related to surface plant and equipment
and any associated land and buildings are accounted for as
property, plant and equipment.
The definition of an area of interest for development
expenditure is narrowed from the exploration permit for exploration
and evaluation expenditure to the individual geological area where
the presence of an oil or natural gas field exists, and in most
cases will comprise an individual oil or gas field.
Amortisation is not charged on costs carried forward in respect
of areas of interest in the development phase until production
commences. When production commences, carried forward development
costs are amortised on a units of production basis over the life of
economically recoverable reserves.
Restoration costs expected to be incurred are provided for as
part of development mine assets that give rise to the need for
restoration.
NOTE 9 - DEVELOPMENT ASSETS (CONTINUED)
Impairment of Development Assets
The carrying value of development assets are assessed on a cash
generating unit (CGU) basis at each reporting date to determine
whether there is any indication of impairment or reversal of
impairment. Indicators of impairment can include changes in market
conditions, future oil and gas prices and future costs. Where an
indicator of impairment exists, the assets recoverable amount is
estimated.
An impairment loss is recognised if the carrying amount of an
asset or its CGU exceeds its estimated recoverable amount. A CGU is
the smallest identifiable asset group that generates cash flows
that are largely independent from other assets and groups. The CGU
is the Cambay Field, India. Impairment losses are recognised in
profit or loss.
The recoverable amount of an asset or CGU is the greater of its
value in use and its fair value less costs to sell (FVLCS). As a
market price is not available, FVLCS is determined by using a
discounted cash flow approach. In assessing FVLCS, the estimated
future cash flows are discounted to their present value using a
pre-tax discount rate that reflects current market assessments of
the time value of money and the risks specific to the asset.
Valuation principals that apply when determining FVLCS are that
future events that would affect expected cash flows are included in
the calculation of FVLCS.
Impairment losses are reversed when there is an indication that
the loss has decreased or no longer exists and there has been a
change in the estimate used to determine the recoverable amount.
Such estimates include beneficial changes in reserves and future
costs, or material increases in selling prices. An impairment loss
is reversed only to the extent that the asset's carrying amount
does not exceed the carrying amount that would have been
determined, net of amortisation, if no impairment loss had been
recognised.
Key Estimates and Assumptions
Significant judgements and assumptions are required by
management in estimating the present value of future cash flows
particularly in the assessment of long life development assets. It
should be noted that discounted cash flow calculations are subject
to variability in key assumptions including, but not limited to,
the expected life of the relevant area of interest, long-term oil
and gas prices, currency exchange rates, pre-tax discount rates,
number of future wells, production profiles and operating
costs.
An adverse change in one or more of the assumptions used to
estimate FVLCS could result in an adjustment to the development
asset's recoverable amount.
Development costs are amortised on a units of production basis
over the life of economically recoverable reserves, so as to write
off costs in proportion to the depletion of the estimated reserves.
The estimation of reserves requires interpretation of geological
and geophysical data. The geological and economic factors which
form the basis of reserve estimates may change over reporting
periods. There are a number of uncertainties in estimating
resources and reserves, and these estimates and assumptions may
change as new information becomes available.
NOTE 10 - INVENTORIES
2020 2019
$ $
-------- ----------
Oil on hand - net realisable value 21,857 31,632
Drilling inventory - net realisable value 124,227 1,109,677
-------- ----------
146,084 1,141,309
-------- ----------
Inventories have been reduced by $995,225 (2019: $161,354) as a
result of write-down to net realisable value, which includes a
$166,916 write-down to Bhandut JV inventories which have been
reclassified to Assets held for sale (note 20).
Accounting Policy
Inventories comprising materials and consumables and petroleum
products are measured at the lower of cost and net realisable
value, on a 'weighted average' basis. Costs comprises direct
materials and delivery costs, direct labour, import duties and
other taxes, an appropriate portion of variable and fixed overhead
expenditure based on normal operating capacity. Given that oil
activities have not achieved commercial levels of production, oil
on hand is recognised at net realisable value. Net realisable value
is the estimated selling price in the ordinary course of business,
less the estimated costs of completion and selling expenses.
NOTE 11 - PROVISIONS
2020 2019
$ $
---------- ----------
Site Restoration, Well Abandonment and
Other Provisions
Balance at 1 July 4,589,391 4,354,675
Provision adjustments during the year 297,885 -
- Termination (refer note 28)
Provision adjustments during the year- 1,131,420 -
Restoration
Reclassification to liabilities directly (441,264) -
associated with the assets held for sale
(Note 20)
Effect of movements in exchange rates 93,840 234,716
---------- ----------
Balance at 30 June 5,671,272 4,589,391
---------- ----------
Current - Termination (refer note 28) 1,165,671 855,554
Non-current - Restoration 4,505,601 3,733,837
---------- ----------
5,671,272 4,589,391
---------- ----------
Current - Employee benefits 143,110 148,731
---------- ----------
Accounting Policy
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past event, and
it is probable that an outflow of economic benefits will be
required to settle the obligation and when a reliable estimate can
be made of the amount of the obligation.
Provisions are made for site rehabilitation of an oil and gas
field on an incremental basis during the life of the field (which
includes the field plant closure phase). Provisions include
reclamation, plant closure, waste site closure and monitoring
activities. These costs have been determined on the basis of
current costs, current legal requirements and current technology.
At each reporting date the rehabilitation provision is re-measured
to reflect any changes in the timing or amounts of the costs to be
incurred. Any such changes are dealt with on a prospective
basis.
Short-term employee benefits for wages, salaries and fringe
benefits are measured on an undiscounted basis and expensed as the
related service is provided. A liability is recognised based on
remuneration wage and salary rates that the Group expects to pay as
at the reporting date as a result of past service provided by the
employee, if the obligation can be measured reliably.
The Group's net obligation in respect of long-term service
benefits is the amount of future benefit that employees have earned
in return for their service up to the reporting date. The
obligation is calculated using expected future increases in wage
and salary rates including related on-costs and expected settlement
dates; and is discounted using the high quality corporate bond rate
at reporting date which have maturity dates approximating to the
terms of the Group's obligations.
Key Estimates and Assumptions
In relation to rehabilitation provisions the Group estimates the
future removal costs of onshore oil and gas production facilities,
wells and pipeline at the time of installation of the assets. In
most instances, removal of assets occurs many years into the
future. This requires judgemental assumptions regarding removal
date, future environmental legislation, the extent of reclamation
activities required, the engineering methodology for estimating
cost, future removal technologies in determining the removal cost,
and discount rates to determine the present value of these cash
flows.
NOTE 12 - CASH AND CASH EQUIVALENTS
2020 2019
$ $
-------- --------
Cash at bank and on hand 173,816 357,970
-------- --------
The Group's exposure to interest rate risk and a sensitivity
analysis for financial assets and liabilities are disclosed in note
23.
Accounting Policy
Cash and cash equivalents comprise bank balances, call deposits,
cash in transit and short-term deposits with an original maturity
of three months or less from the acquisition date that are subject
to an insignificant risk of changes in their fair value, and are
used by the Group in the management of its short-term
commitments.
Reconciliation of Cash Flows from Operating Activities
2020 2019
$ $
------------ ------------
Net loss (5,841,096) (3,118,121)
Amortisation of development assets 18 1,931
Depreciation 26,867 32,763
Interest expense 43,439 72,695
Provision for doubtful debts expense (107,313) 108,206
Impairment of development assets 1,348,458 -
Loss on disposal of assets 12,169 8,227
Equity settled share-based payments - 110,935
Unrealised foreign exchange (gain)/loss (6,083) (46,688)
Operating Loss Before Changes in Working
Capital and Provisions (4,523,541) (2,830,052)
Movement in trade and other payables 384,409 (82,065)
Movement in prepayments 132,253 (41,193)
Movement in trade and other receivables (114,927) (45,269)
Movement in provisions 277,744 -
Movement in inventories 991,935 161,936
Movement in employee benefits 14,520 (125,920)
Net Cash Used in Operating Activities (2,837,661) (2,962,563)
------------ ------------
NOTE 13 - TRADE AND OTHER RECEIVABLES
2020 2019
$ $
------------ ------------
Current
Allocation of receivables
Joint venture receivables 458,829 353,492
Other receivables 96,066 144,482
Shares to be issued 90,449 -
------------ ------------
645,344 497,974
------------ ------------
Joint venture receivables
Joint venture receivables 6,394,990 6,272,808
Provision for doubtful debts (5,936,161) (5,919,316)
458,829 353,492
------------ ------------
Other receivables
Corporate receivables 240,793 288,040
Provision for doubtful debts (144,727) (143,558)
96,066 144,482
------------ ------------
Joint venture receivables include the Group's share of
outstanding cash calls and recharges owing from the joint venture
partners, as well as other minor receivables.
The Group considers that there is evidence of impairment if any
of the following indicators are present; financial difficulties of
the debtor, probability that the debtor will dispute amounts owing
and default or delinquency in payment (more than one year old).
Whilst the Group has been in ongoing discussions with its joint
venture partner Gujarat State Petroleum Corporation (GSPC), for
repayment of disputed and other amounts owing, in line with
identified impairment indicators, an assessment has been made of
the recoverable balance as at 30 June 2020. Each receivable has
been assessed individually for recovery, and those deemed to have a
low chance of recovery have been fully provided for in the current
year. Accordingly, the Indian cash calls receivable have been fully
provided for.
The Group is in continuing discussions with GSPC in order to
resolve the outstanding issues and recover the outstanding
amounts.
The carrying value of trade and other receivables approximates
its fair value due to the assessment of recoverability.
Details of the Group's credit risk are disclosed in note
23(b).
2020 2019
$ $
------------ ------------
Movement in provision for doubtful debts
Balance at 1 July (6,062,874) (5,497,703)
Provisions (made)/reversed during the year 107,313 (108,206)
Provision adjustment, as at 1 July 2018,
on adoption of AASB 9 - (177,874)
Effect of movements in exchange rates (125,327) (279,091)
------------ ------------
Balance at 30 June (6,080,888) (6,062,874)
------------ ------------
Allocation of impairment loss
Joint venture receivables (5,936,161) (5,919,316)
Other receivables (144,727) (143,558)
------------ ------------
(6,080,888) (6,062,874)
------------ ------------
NOTE 13 - TRADE AND OTHER RECEIVABLES (CONTINUED)
Trade and other receivables, which includes receivables, loans
and deposits, are initially recognised when they are originated.
All other financial assets are initially recognised when the Group
becomes a party to the contractual provisions of the
instrument.
All trade and other receivables do not include a significant
financing component and are therefore initially measured at the
transaction price.
On initial recognition, trade and other receivables are
classified as measured as at amortised cost. Financial assets are
not reclassified subsequent to their initial recognition unless the
Group changes its business model for managing financial assets.
A financial asset is measured at amortised cost if it meets both
of the following conditions and is not designated as at FVTPL:
- It is held within a business model whose objective is to hold
assets to collect contractual cash flows; and
- Its contractual terms give rise on specified dates to cash
flows that are solely payments of principal and interest on the
principal amount outstanding.
For the purpose of this assessment, 'principal' is defined as
the fair value of the financial asset on initial recognition.
'Interest' is defined as consideration for the time value of money
and for the credit risk associated with the principal amount
outstanding during a particular amount of time and for other basic
lending risks and costs (e.g. liquidity risk and administrative
costs).
The Group derecognises a financial asset when the contractual
rights to the cash flows from the financial asset expire , or it
transfers the rights to receive the contractual cash flows in a
transaction in which substantially all of the risks and rewards of
ownership of the financial asset are transferred or in which the
Group neither transfers nor retains substantially all of the risks
and rewards of ownership and it does not retain control of the
financial asset.
Financial assets and liabilities are offset and the net amount
presented in the statement of financial position when, and only
when, the Group has a legal right to offset the amounts and intends
either to settle on a net basis or to realise the asset and settle
the liability simultaneously.
Impairment of Receivables
The Group recognises loss allowances for 'expected credit loss'
(ECL's) on financial assets measured at amortised cost. Loss
allowances for trade and other receivables are always measured at
an amount equal to lifetime ECL's.
When determining whether the credit risk of a financial asset
has increased significantly since initial recognition and when
estimating ECL's, the Group considers reasonable and supportable
information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information
and analysis, based on the Group's historical experience and
informed credit assessment and including forward-looking
information.
The Group assumes that the credit risk on a financial asset has
increased significantly if it is more than 30 days past due.
The Group considers a financial asset to be in default when the
financial asset is more than 90 days due past.
Lifetime ECL's are the ECL's that result from all possible
default events over the expected life of a financial
instrument.
Measurement of ECL's
ECL's are a probability-weighted estimate of credit losses.
Credit losses are measured as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the
entity in accordance with the contract and the cash flows that the
Group expects to receive. ECL's are discounted at the effective
interest rate of the financial asset.
Expected credit loss assessment
The Group uses its allowance schedule to measure the ECLs of
trade and other receivables. The allowance schedule is based on
actual credit loss experience over the past years. The ECL computed
is purely derived from historical data which management is of the
view that the historical conditions are representative of the
conditions prevailing at the reporting date.
Write-off
The gross carrying amount of a financial asset is written off
when the Group has no reasonable expectations of recovering a
financial asset in its entirety or a portion thereof.
NOTE 14 - TRADE AND OTHER PAYABLES
2020 2019
$ $
---------- --------
Trade creditors 507,204 302,338
Accruals 564,140 394,846
---------- --------
1,071,344 697,184
---------- --------
The Company's assessment in note 13, of the recoverability of
outstanding cash call amounts owing from its joint venture partner
(GSPC) has resulted in an additional impairment and consequently
the Company is of the opinion that the Cambay Joint Venture will be
unable to meet its third party liabilities, without financial
support from the Company as Operator, due to non-payment of
outstanding cash calls by the Joint Venture partner. As a result,
the Group has accrued an additional $156,946 at 30 June 2020 (2019:
$76,116) to cover Cambay and Bhandut Joint Venture third party
liabilities.
The carrying value of trade and other payables is considered to
approximate its fair value due to the short nature of these
financial liabilities.
Accounting Policy
Trade and other payables are recorded at the value of the
invoices received and subsequently measured at amortised cost and
are non-interest bearing. The liabilities are for goods and
services provided before year end, that are unpaid and arise when
the Group has an obligation to make future payments in respect of
these goods and services. The amounts are unsecured. Financial
assets and liabilities are offset and the net amount presented in
the statement of financial position when and only when, the Group
has a legal right to offset the amounts and intends either to
settle on a net basis or to realise the asset and settle the
liability simultaneously.
NOTE 15 - BORROWINGS
2020 2019
$ $
-------- --------
Unsecured Loans 769,555 563,955
769,555 563,955
-------- --------
Terms and repayment schedule
At 30 June 2020, the terms and conditions of outstanding loans
are as follows:
2020 2019
$ $
------------------- -------------------
Nominal
interest Year Face Carrying Face Carrying
Currency rate of maturity value amount value amount
---------- ---------- ------------- -------- --------- -------- ---------
Unsecured loans - from
shareholders and financiers
Series A loan - AUD $330,000
(fully repaid) AUD 5.0% - - - 330,000 325,205
Series B loan - AUD $250,000
(fully drawn) AUD 5.0% 2020 250,000 247,357 250,000 238,750
Series C loan - GBP GBP125,000
(fully drawn) GBP 5.0% 2020 223,774 221,409 - -
Series D loan - GBP GBP225,000
(drawn GBP185,000)) GBP 5.0% 2021 331,185 300,789 - -
-------- --------- -------- ---------
804,959 769,555 580,000 563,955
-------- --------- -------- ---------
At balance date, options had been issued to the lenders in
connection to the above loans, as follows:
a) Series B: 115,723,273 share options @ GBP0.0011 exercisable
on or before the loan maturity date of 31 July 2020;
b) Series C: 59,523,810 share options @ GBP0.0021 exercisable on
or before the loan maturity date of 1 August 2020; and
c) Series D: 107,142,857 share options @ GBP0.0021 exercisable
on or before 1 August 2020, and 204,545,455 share options
@GBP0.0011 exercisable on or before the loan maturity date of 30
June 2021.
In determining the fair value of the liability component of
these borrowing arrangements, it has been estimated that the
effective interest rate of similar borrowings without a share
option component is 18%. The fair value of the share options equity
component of these borrowing arrangements has been recognised in
the Loans Options Reserve as the loans have been treated as a
convertible note. That is, the borrowing arrangement falls within
the definition of a compound financial instrument and as such as
been classified as both a financial liability and equity.
The 115,723,273 share options @ GBP0.0011 exercisable on or
before 31 July 2020, attached to the above-mentioned Series B
loans, were not exercised and have lapsed.
The 59,523,810 share options @ GBP0.0021 exercisable on or
before 1 August 2020, attached to the above-mentioned Series C
loans, were not exercised and have lapsed.
The 107,142,857 share options @ GBP0.0021 exercisable on or
before 1 August 2020, attached to the above-mentioned Series D
loans, were not exercised and have lapsed.
On 23 July 2019, the Company entered into an amendment agreement
to vary the terms of its Series C loan funding facility of
GBP125,000 entered into on 3 February 2020. Pursuant to the
amendment, the loan repayment date has been extended from 1 August
2020 to 31 October 2020. In addition, the Company will issue
113,636,364 new options to the lenders at an exercise price of
GBP0.0011 and expiry date of 29 January 2021, which is subject to
shareholder approval on or before 30 November 2020. All other loan
terms and conditions remain the same; and are extended to 31
October 2020.
On 24 August 2020, the Series B A$250,000 loan was fully repaid,
together with interest payable.
Pursuant to an amendment agreement to the Series C loan of
GBPGBP125,000 loan announced on 30 October 2020, the loan repayment
date has been extended from 31 October 2020 to 31 December 2020.
All other terms remain the same and are extended to 31 December
2020.
The loans are subject to the following key undertakings without
prior approval by the lenders:
-- Not to dispose of assets having an aggregate value of more than $1 million;
-- Not to incur any financial indebtedness more than $50,000; and
-- Not to incur any aggregate payment or outgoing exceeding $1m
(except for employee benefit expenses).
NOTE 15 - BORROWINGS (CONTINUED)
Accounting Policy
General
All borrowings are initially recognised when the Group becomes a
party to the contractual provisions of the lending instrument. All
borrowings are initially recognised at fair value less transaction
costs. Borrowings are subsequently carried at amortised cost.
The Group derecognises a financial liability when its
contractual obligations are discharged, cancelled or expire. The
Group also derecognises a financial liability when its terms are
modified and the cash flows of the modified liability are
substantially different, in which case a new financial liability
based on the modified terms is recognised at fair value.
On derecognition of a financial liability, the difference
between the carrying amount extinguished and the consideration paid
(including any non-cash assets transferred or liabilities assumed)
is recognised in profit or loss.
Series A, B, C and D Loans
The liability component of loans is initially recognised at the
fair value of a similar liability that does not have an equity
conversion option. The equity component is initially recognised at
the difference between the fair value of the loan as a whole and
the fair value of the liability component. Subsequent to initial
recognition, the liability component of the loan is measured at
amortised cost using the effective interest method. The equity
component of a loan is not remeasured. Interest related to the
financial liability is recognised in profit or loss.
NOTE 16 - EXPITURE COMMITMENTS
Exploration Expenditure Commitments
In order to maintain rights of tenure to exploration permits,
the Group is required to perform exploration work to meet the
minimum expenditure requirements specified by various state and
national governments. These obligations are subject to
renegotiation when application for an exploration permit is made
and at other times. These obligations are not provided for in the
financial report. The expenditure commitments are currently
estimated to be $nil (2019: $nil).
There are no minimum exploration work commitments in the Cambay
and Bhandut Production Sharing Contracts.
There are no minimum exploration work commitments in the
Cooper-Eromanga Basins as the two Petroleum Exploration Licences
and the 27 Petroleum Retention Licences in the Basins are currently
in suspension status with the Department for Energy and Mining,
South Australia.
When obligations expire, are re-negotiated or cease to be
contractually or practically enforceable, they are no longer
considered to be a commitment.
Further expenditure commitments for subsequent permit periods
are contingent upon future exploration results. These cannot be
estimated and are subject to renegotiation upon expiry of the
existing exploration leases.
Capital Expenditure Commitments
The Group had no capital commitments as at 30 June 2020 (2019:
Nil).
NOTE 17 - PROPERTY, PLANT AND EQUIPMENT
Motor Plant and Office
Vehicles Equipment Furniture Total
$ $ $ $
---------- ----------- ----------- ----------
Cost
Balance at 1 July 2018 9,781 888,121 144,376 1,042,278
Disposals - (681) (13,841) (14,522)
Currency translation
differences 527 24,998 4,146 29,671
Balance at 30 June
2019 10,308 912,438 136,830 1,059,576
---------- ----------- ----------- ----------
Additions - 1,453 - 1,453
Disposals - (21,221) (43,673) (64,894)
Currency translation
differences 225 10,684 1,772 12,681
Reclassification to
assets held for sale
(Note 19) - (36,354) - (36,354)
---------- ----------- ----------- ----------
Balance at 30 June
2020 10,533 867,000 94,929 972,462
---------- ----------- ----------- ----------
Depreciation and Impairment
Losses
Balance at 1 July 2018 9,397 743,779 110,172 863,348
Depreciation charge
for the year 108 28,682 3,973 32,763
Disposals - (655) (5,068) (5,723)
Currency translation
differences 508 19,095 3,658 23,261
Balance at 30 June
2019 10,013 790,901 112,735 913,649
---------- ----------- ----------- ----------
Depreciation charge
for the year 94 23,275 3,498 26,867
Disposals - (17,728) (35,049) (52,777)
Currency translation
differences 217 8,100 1,551 9,869
Reclassification to
assets held for sale
(Note 19) - (29,186) - (29,186)
---------- ----------- ----------- ----------
Balance at 30 June
2020 10,324 775,362 82,736 868,422
---------- ----------- ----------- ----------
Carrying amounts
At 1 July 2019 295 121,537 24,095 145,927
---------- ----------- ----------- ----------
At 30 June 2020 209 91,638 12,193 104,040
---------- ----------- ----------- ----------
Accounting Policy
P roperty, plant and equipment is measured at cost less
accumulated depreciation and any accumulated impairment losses. The
cost of self-constructed assets includes the cost of materials,
direct labour, the initial estimate, where relevant, of the costs
of dismantling and removing the items and restoring the site on
which they are located and an appropriate proportion of
overheads.
Gains and losses on disposal are determined by comparing the
proceeds from disposal with the carrying amount of property, plant
and equipment and are recognised net in the consolidated statement
of profit or loss and other comprehensive income.
Depreciation is calculated using the reducing balance or
straight line method over the estimated useful life of the assets,
with the exception of software which is depreciated at prime cost.
The estimated useful lives in the current and comparative periods
are as follows:
-- Motor vehicles 4 to 7 years
-- Plant and equipment 2 to 7 years
-- Office furniture 2 to 10 years
Depreciation methods, useful lives and residual values are
reviewed and adjusted if appropriate, at each financial year
end.
Impairment of Property, Plant and Equipment
The carrying value of assets are assessed at each reporting date
to determine whether there is any indication of impairment. If any
such indication exists, then the assets recoverable amount is
estimated.
This section addresses the Group's capital structure, the Group
structure and related party transactions, as well as including
information on how the Group manages various financial risks.
NOTE 18 - ISSUED CAPITAL AND RESERVES
The reconciliation of the movement in capital, reserves and
accumulated losses for the consolidated entity can be found in the
consolidated statement of changes in equity.
(a) Issued Capital
2020 2020 2019 2019
Number $ Number $
Ordinary Shares of Ordinary Shares Issued Capital of Ordinary Shares Issued Capital
-------------------- ---------------- -------------------- ----------------
On issue at 1 July - fully paid 2,587,318,001 176,502,200 2,001,968,379 174,046,036
Issue of share capital
Shares issued for cash (2) (4)
(5) (7) 874,289,063 2,365,288 458,793,303 2,126,049
Shares issued for non-cash (1)
(3) 62,873,896 194,999 26,365,320 110,936
Shares to be issued (7) 55,555,556 90,449
Exercise of unlisted options (6) 124,060,150 330,000 100,190,999 395,367
Capital raising costs - (228,122) - (176,188)
Balance at 30 June - fully paid 3,704,096,666 179,254,814 2,587,318,001 176,502,200
-------------------- ---------------- -------------------- ----------------
Refer notes following for additional information and Note 23 for
details of unlisted options.
The issue of shares i n lieu of non-executive director income
were approved by shareholders at the Annual General Meeting (AGM)
held on 29 November 2018 for the period from 1 November 2018 to 31
October 2019; and the AGM held on 27 November 2019 for the period
from 1 November 2019 to 1 October 2020. The shares shall be issued
at a price based upon the 10-Day VWAP up to the applicable quarter
end for the period.
In accordance with the ASX waiver granted on 22 October 2019,
the Company advises that the number of remuneration shares that
were issued to directors totalled nil for the year ended 30 June
2020, which was equivalent to 0% of the Company's issued capital as
at 30 June 2020.
The Non-Executive directors were entitled to the issue of
10,399,814 remuneration shares during the financial year ended 30
June 2020. These remuneration shares will be issued in the next
financial year.
Additional information of the issue of ordinary shares and
unlisted options:
(1) Pursuant to an announcement on 7 August 2019 relating to an
agreement with Holloman Energy Corporation to acquire an interest
in petroleum exploration licences (PEL's 112 & 114) in the
Cooper-Eromanga Basins in South Australia, the Company issued, in
accordance with the agreement:
- 24,250,150 new ordinary shares on 7 August 2019 at a deemed price of $0.003; and
- 16,166,767 new ordinary shares on 14 October 2019 at the above-mentioned deemed price.
(2) Pursuant to an equity raise announcement on 31 July 2019,
relating to the placement of 257,329,999 new ordinary shares at an
issue price of GBP0.0013 (A$0.002330), the Company issued the
shares on 13 August 2019.
(3) Pursuant to an announcement on 14 August 2019 relating to an
agreement with Perseville Investing Inc and Terra Nova Energy
(Australia) Pty Ltd to acquire additional interests in petroleum
exploration licenses (PEL's 112 & 114), the Company issued, in
accordance with the agreement:
- 9,166,333 new ordinary shares on 14 August 2019 at a deemed price of $0.003; and
- 13,290,646 new ordinary shares on 14 October 2019 at the above-mentioned deemed price.
(4) Pursuant to an equity raise announcement on 30 September
2019, relating to the placement of 315,789,474 new ordinary shares
at an issue price of GBP0.0019 (A$0.003480):
- 118,421,053 shares were issued on 14 October 2019; and
- 197,368,421 shares were issued on 21 October 2019.
(5) Pursuant to an equity raise announcement on 30 October 2019,
relating to the placement of 78,947,368 new ordinary shares at a
price of GBP0.0019 (A$0.00356), all 78,947,368 shares were issued
on 5 November 2019.
NOTE 18 - ISSUED CAPITAL AND RESERVES (CONTINUED)
(6) Pursuant to the Company's announcement on 31 December 2019
relating to the exercise/underwriting of 124,060,150 options
convertible at $0.00266 each, 124,060,150 shares were issued on 3
January 2020.
(7) Pursuant to equity raise announcements on 15 March 2020 and
23 April 2020, relating to the placement of 277,777,778 new
ordinary shares at an issue price of GBP0.0009 (A$0.001792), the
first tranche of 222,222,222 shares were issued on 15 May 2020.
Other receivables (refer Note 13) include an amount of $90,449
receivable in connection to the second tranche of 55,555,555 shares
which have been recognised at balance date given that a contractual
right to receive settlement exists. This amount was received in
July 2020.
The Company does not have authorised capital or par value in
respect of its issued shares. The holders of ordinary shares are
entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company.
Accounting Policy
Ordinary shares are classified as equity. Transaction costs
directly attributable to the issue of ordinary shares and share
options are recognised as a deduction from equity, net of any tax
effects.
Subsequent Event
On 17 July 2020, the Company announced that it had issued the
second tranche of 55,555,555 shares at GBP0.0009 (A$0.001792)
pursuant to the equity raise announcements on 15 March 2020 and 23
April 2020.
(b) Reserves
2020 2019
$ $
---------- ----------
Foreign Currency Translation Reserve 7,341,214 7,376,163
Option Reserve 69,202 36,485
Loans Option Reserve 35,404 88,740
---------- ----------
7,445,820 7,501,388
---------- ----------
Foreign Currency Translation Reserve (FCTR)
The foreign currency translation reserve is comprised of all
foreign currency differences arising from the translation of the
financial statements of foreign operations from their functional
currency to Australian dollars.
The assets and liabilities of foreign operations are translated
to Australian dollars at exchange rates at the reporting date. The
income and expenses of foreign operations are translated to
Australian dollars at exchange rates at the dates of the
transactions.
Foreign currency differences are recognised in other
comprehensive income and accumulated in the FCTR. When the
settlement of a monetary item receivable from or payable to a
foreign operation is neither planned nor likely in the foreseeable
future, foreign exchange gains and losses arising from such a
monetary item are considered to form part of a net investment in a
foreign operation and are recognised in other comprehensive income
and are presented within equity in the FCTR.
Option Reserve
The option reserve recognises the fair value of options issued
but not exercised. Upon the exercise, lapsing or expiry of options,
the balance of the option reserve relating to those options is
transferred to accumulated losses.
NOTE 19 - CONSOLIDATED ENTITIES
Country of Ownership Interest %
Incorporation
----------------
2020 2019
-------------------------------------------------------- ---------------- ----------- ----------
Parent Entity
Oilex Ltd Australia
Subsidiaries
Independence Oil and Gas Limited Australia 100 100
Admiral Oil and Gas Holdings Pty Ltd Australia 100 100
Admiral Oil and Gas (106) Pty Ltd Australia 100 100
Admiral Oil and Gas (107) Pty Ltd Australia 100 100
Admiral Oil Pty Ltd Australia 100 100
Oilex (JPDA 06-103) Ltd Australia 100 100
Merlion Energy Resources Private Limited India 100 100
Oilex N.L. Holdings (India) Limited Cyprus 100 100
Oilex (West Kampar) Limited Cyprus 100 100
CoEra Limited (incorporated 7 October 2019) Australia 1 00 -
Holloman Petroleum Pty Ltd Australia 1 00 -
Cordillo Energy Pty Ltd (incorporated 18 October 2019) Australia 1 00 -
Oilex EIS Limited (incorporated 12 December 2019) United Kingdom 1 00 -
-------------------------------------------------------- ---------------- ----------- ----------
Acquisition of Subsidiary
On 16 October 2019, the Group completed the acquisition of 100%
of the shares in Holloman Petroleum Pty Ltd pursuant to the share
purchase agreement entered into with Holloman Energy
Corporation.
Consideration transferred
The following table summarises the acquisition-date fair value
of each major class of consideration transferred.
Cash 72,750
Equity instruments (40,416,917 ordinary shares) 121,251
------------------------------------------------- --------
Total consideration transferred 194,001
------------------------------------------------- --------
The fair value of the ordinary shares issued was based on the
listed share price of the Company at 7 August 2019 of $0.003 per
share.
Acquisition related costs
The Group incurred acquisition-related costs of $17,000 relating
to external legal fees. These costs have been included in
'administration expense' in the condensed consolidated statement of
profit or loss and OCI.
Identifiable assets acquired
The following table summarises the recognised amounts of assets
acquired at the date of acquisition. Nil liabilities were
assumed.
Trade and other receivables 48,500
Exploration and evaluation 145,501
------------------------------------ --------
Total identifiable assets acquired 194,001
------------------------------------ --------
Trade and other receivables comprised Petroleum Exploration
Licence bonds of $48,500, of which $nil was expected to be
uncollectable at the date of acquisition.
Accounting Policy
The Group controls an entity when it is exposed to, or has
rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power over
the entity.
NOTE 20 - DISPOSAL GROUPS HELD FOR SALE
On 28 January 2020, the Company announced that it had accepted
an offer from Kiri to acquire the Company's PI in Bhandut. Pursuant
to the Agreement entered with Kiri, the Company advised it will
receive US$0.14 million in cash proceeds for the sale of its PI to
Kiri. The sale has since progressed substantially with all the
necessary documentation submitted to the Government of India to
affect the transfer of the PI to Kiri. Delays with the process;
however, have been experienced due to the impact of Covid-19 in
India.
On 27 May 2020, the Company announced that it has signed a
conditional binding Heads of Agreement with Armour Energy Limited,
an ASX-listed company, for the proposed sale of all of its
interests in the Cooper-Eromanga Basin to Armour. On the 15 June
2020 the Company further announced it has entered into a
conditional binding Share Purchase Agreement (SPA) with Armour. The
transaction is subject to the satisfaction of various conditions
precedent which are expected to be satisfied.
Accordingly, these operations are presented as a disposal group
held for sale.
As at 30 June 2020, the disposal group comprised assets of
$327,791 less liabilities of $451,469, detailed as follows:
$
----------
Trade and other receivables 79,333
Inventories 3,290
Exploration and evaluation 238,000
Property, plant and equipment 7,168
Trade and other payables (10,205)
Provisions (non-current) (441,264)
----------
(123,678)
----------
Accounting Policy
Non-current assets and assets of disposal groups are classified
as held for sale if their carrying amount will be recovered
principally through a sale transaction rather than through
continued use. They are measured at the lower of their carrying
amount and fair value less costs of disposal. For non-current
assets or assets of disposal groups to be classified as held for
sale, they must be available for immediate sale in their present
condition and their sale must be highly probable.
An impairment loss is recognised for any initial or subsequent
write down of the non-current assets and assets of disposal groups
to fair value less costs of disposal. A gain is recognised for any
subsequent increases in fair value less costs of disposal of a
non-current assets and assets of disposal groups, but not in excess
of any cumulative impairment loss previously recognised.
Non-current assets are not depreciated or amortised while they
are classified as held for sale. Interest and other expenses
attributable to the liabilities of assets held for sale continue to
be recognised.
Non-current assets classified as held for sale and the assets of
disposal groups classified as held for sale are presented
separately on the face of the statement of financial position, in
current assets. The liabilities of disposal groups classified as
held for sale are presented separately on the face of the statement
of financial position, in current liabilities.
NOTE 21 - JOINT ARRANGEMENTS
The Group's interests in joint arrangements as at 30 June 2020
are detailed below. Principal activities are oil and gas
exploration, evaluation, development and production.
(a) Joint Operations Interest
2020 2019
Permit % %
----------------------- ---------------------------------- ------ -----
OFFSHORE
JPDA 06-103 (1) Timor Leste and Australia (JPDA) 10.0 10.0
ONSHORE
Cambay Field India (Cambay Basin) 45.0 45.0
Bhandut Field India (Cambay Basin) 40.0 40.0
Sabarmati Field (2) India (Cambay Basin) 40.0 40.0
West Kampar Block (3) Indonesia (Central Sumatra) 67.5 67.5
(1) The JPDA 06-103 Production Sharing Contract was terminated
on 15 July 2015. The Joint Operating Agreement between the Joint
Venture participants is still in effect.
(2) The Sabarmati Production Sharing Contract was cancelled on
10 August 2016. The Joint Operating Agreement between the Joint
Venture participants is still in effect.
(3) Oilex (West Kampar) Limited is entitled to have assigned an
additional 22.5% to its holding of 45% through exercise of its
rights under a Power of Attorney granted by PT Sumatera Persada
Energi (SPE), following the failure by SPE to repay funds due. The
assignment request had been provided to BPMigas (now SKK Migas),
the Indonesian Government regulator, and had not been approved or
rejected. The West Kampar Contract Area Production Sharing Contract
was terminated on 15 August 2018.
On 27 July 2020, the Company announced that substantial progress
has been made towards the Company's strategic objective to regain a
participating interest in the West Kampar PSC in Indonesia, which
is expected to lead, subject to financing, to recommencing
production from the Pendalian Oilfield (refer Note 29 c) for
further commentary.
(b) Joint Operations
The aggregate of the Group's interests in all joint operations
is as follows:
2020 2019
$ $
Current assets
Cash and cash equivalents 33,360 81,872
Trade and other receivables (1) 2,109,359 1,907,808
Inventories 1,133,931 1,054,795
Prepayments 5,399 36,286
----------- -----------
Total current assets 3,282,049 3,080,761
----------- -----------
Non-current assets
Exploration and evaluation 581,321 568,887
Development assets 9,823,965 6,495,591
Property, plant and equipment 95,509 111,877
----------- -----------
Total non-current assets 10,500,797 7,176,355
----------- -----------
Total assets 13,782,846 10,257,116
----------- -----------
Current liabilities
Trade and other payables (283,038) (137,094)
----------- -----------
Total liabilities (283,038) (137,094)
----------- -----------
Net assets 13,499,808 10,120,022
----------- -----------
(1) Trade and other receivables of the joint operations is
before any impairment and provisions.
NOTE 21 - JOINT ARRANGEMENTS (CONTINUED)
(c) Joint Operations Commitments
In order to maintain the rights of tenure to exploration
permits, the Group is required to perform exploration work to meet
the minimum expenditure requirements specified by various state and
national governments. These obligations are subject to
renegotiation when application for an exploration permit is made
and at other times. These obligations are not provided for in the
financial report.
The Group's has no exploration expenditure commitments
attributable to joint operations during the year (2019: $nil).
There are no minimum exploration work commitments in the Cambay
and Bhandut Production Sharing Contracts.
Accounting Policy
Joint arrangements are arrangements of which two or more parties
have joint control. Joint control is the contractual agreed sharing
of control of the arrangements which exists only when decisions
about the relevant activities required unanimous consent of the
parties sharing control. Joint arrangements are classified as
either a joint operation or joint venture, based on the rights and
obligations arising from the contractual obligations between the
parties to the arrangement.
To the extent the joint arrangement provides the Group with
rights to the individual assets and obligations arising from the
joint arrangement, the arrangement is classified as a joint
operation and as such, the Group recognises its:
-- Assets, including its share of any assets held jointly;
-- Liabilities, including its share of any liabilities incurred jointly;
-- Revenue from the sale of its share of the output arising from the joint operation;
-- Share of revenue from the sale of the output by the joint operation; and
-- Expenses, including its share of any expenses incurred jointly.
The Group's interest in unincorporated entities are classified
as joint operations.
Joint Ventures provides the Group a right to the net assets of
the venture and are accounted for using the equity method. The
Group currently has no joint venture arrangements.
NOTE 22 - RELATED PARTIES
Identity of Related Parties
The Group has a related party relationship with its subsidiaries
(refer note 19), joint operations (refer note 21) and with its key
management personnel.
Key Management Personnel
The following were key management personnel of the Group at any
time during the financial year and unless otherwise indicated were
key management personnel for the entire period:
Non-Executive Directors Position
------------------------------------------- -----------------------------------------
Brad Lingo (resigned 5 May 2020) Non-Executive Chairman
Paul Haywood Non-Executive Director
Peter Schwarz (appointed 4 September 2019) Non-Executive Director
Executive Directors Position
------------------------------------------- -----------------------------------------
Joe Salomon (1) Chairman and Managing Director
Mark Bolton (2) Executive Director and Company Secretary
Executive Position
------------------------------------------- -----------------------------------------
Ashish Khare Head - India Assets
(1) Current Chairman from 5 May 2020 following Mr Lingo's
resignation.
(2) Mr Bolton, previously Chief Financial Office and Company
Secretary, was appointed to the board on 26 March 2020(.)
Key Management Personnel Compensation
Key management personnel compensation comprised the
following:
2020 2019
$ $
-------- --------
Short-term employee benefits 757,848 615,475
Other long-term benefits 34,546 40,542
Non-monetary benefits 5,777 21,252
Post-employment benefits 67,372 59,668
Equity compensation benefits - shares issued
in lieu of salary 33,103 55,454
-------- --------
898,646 792,391
-------- --------
Individual Directors' and Executives' Compensation
Disclosures
Information regarding individual Directors' and Executives'
compensation is provided in the Remuneration Report section of the
Directors' Report. Apart from the details disclosed in this note,
or in the Remuneration Report, no Director has entered into a
material contract with the Company since the end of the previous
financial year and there were no material contracts involving
Directors' interests existing at year end.
Key Management Personnel Transactions with the Company or its
Controlled Entities
There were no transactions in the current year between the Group
and entities controlled by key management personnel.
NOTE 23 - FINANCIAL INSTRUMENTS
(a) Financial Risk Management
The Group has exposure to the following risks arising from
financial instruments.
i) Credit Risk
ii) Liquidity Risk
iii) Market Risk
This note presents qualitative and quantitative information in
relation to the Group's exposure to each of the above risks and the
management of capital.
The Board of Directors has overall responsibility for the
establishment and oversight of the risk management framework and
the development and monitoring of risk management policies. Risk
management policies are established to identify and analyse the
risks faced by the Group, to set appropriate risk limits and
controls, and to monitor risks and adherence to limits. Risk
management policies and systems are reviewed regularly to reflect
changes in market conditions and the Group's activities.
(b) Credit Risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to meet
its contractual obligations; and arises principally from the
Group's receivables from customers and joint ventures.
The Group's exposure to credit risk is influenced mainly by the
individual characteristics of each customer. The demographics of
the Group's customer base, including the default risk of the
industry and country in which customers operate, has less of an
influence on credit risk.
The maximum exposure to credit risk is represented by the
carrying amount of each financial asset. The maximum exposure to
credit risk at the reporting date was:
2020 2019
$ $
-------- --------
Cash and cash equivalents 173,816 357,970
Trade and other receivables - current 564,397 497,974
738,213 855,944
-------- --------
The Group's cash and cash equivalents are held with major banks
and financial institutions.
The Group's gross share of outstanding cash calls and recharges
owing from joint venture partners and joint operations is
$6,294,032 (2019: $6,129,333).
The Group's most significant customers are Enertech Fuel
Solutions Pvt Limited (Enertech) with gas sales representing nil%
of the Group's total revenues (2019: 39%) and Indian Oil
Corporation Limited, in its capacity as nominee of the Government
of India, with oil sales representing nil% of the Group's total
revenues (2019: 61%). Enertech accounts for $nil of trade
receivables as at June 2020 (2019: $nil), whilst the Indian Oil
Corporation Limited accounts for $nil of trade receivables (2019:
$nil).
Impairment Losses
The aging of the trade and other receivables at the reporting
date was:
2020 2019
$ $
------------ ------------
Consolidated Gross
Not past due 226,557 189,941
Past due 0-30 days 177,421 111,566
Past due 31-120 days 141,146 202,591
Past due 121 days to one year 738,319 524,518
More than one year 5,442,789 5,532,232
------------ ------------
6,726,232 6,560,848
Provision for doubtful debts (6,080,888) (6,062,874)
------------ ------------
Trade and other receivables net of provision 645,344 497,974
------------ ------------
NOTE 23 - FINANCIAL INSTRUMENTS (CONTINUED)
(b) Credit Risk (continued)
Receivable balances are monitored on an ongoing basis. The Group
may at times have a high credit risk exposure to its joint venture
partners arising from outstanding cash calls.
The Group considers an allowance for expected credit losses
(ECL's) for all debt instruments. The Group applies a simplified
approach in calculating ECL's. The Group bases its ECL assessment
on its historical credit loss experience, adjusted for factors
specific to the debtors and the economic environment including, but
not limited to, financial difficulties of the debtor, probability
that the debtor will enter bankruptcy or financial reorganisation
and delinquency in payments.
The Group has been in discussions with its joint venture partner
for repayment of disputed and other amounts owing. The Group is
continuing discussions in order to resolve the outstanding issues
and recover payment of the outstanding amounts, however due to the
age of the receivables amounts, is uncertain of the timing or of
full recovery.
(c) Liquidity Risk
Liquidity risk is the risk that the Group will not be able to
meet its financial obligations as they fall due. The Group's
approach to managing liquidity is to ensure, as far as possible,
that it will always have sufficient liquidity to meet its
liabilities when due without incurring unacceptable losses or
risking damage to the Group's reputation.
The Group manages liquidity by monitoring present cash flows and
ensuring that adequate cash reserves, financing facilities and
equity raisings are undertaken to ensure that the Group can meet
its obligations.
The table below analyses the Group's financial liabilities by
relevant maturity groupings based on the remaining period at the
reporting date to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash
flows.
Contractual Cash Flows
------------------------------------------------------------
Carrying Amount Face Value Total 2 months or less 2 - 12 months Greater than
1 year
$ $ $ $
$ $
---------------- ----------- ---------- ----------------- -------------- -------------
2020
Trade and other payables 1,071,341 1,071,341 1,071,341 1,071,341 - -
Borrowings 769,555 804,959 804,959 250,000 554,959 -
Total financial
liabilities 1,840,896 1,876,300 1,876,300 1,321,341 554,959 -
---------------- ----------- ---------- ----------------- -------------- -------------
2019
Trade and other payables 697,184 697,184 697,184 697,184 - -
Borrowings 563,955 580,000 580,000 - 580,000
Total financial
liabilities 1,261,139 1,277,184 1,277,184 697,184 580,000 -
---------------- ----------- ---------- ----------------- -------------- -------------
Subsequent Events
On 31 July 2020, the Company announced that it has entered into
an amendment agreement to vary the repayment obligations for its
Series C (GBPGBP125,000) loan. Pursuant to the amendment agreement,
the loan repayment date has been extended from 1 August 2020 to 31
October 2020. All other terms remain the same and are extended to
31 October 2020, except for the issue of 113,636,364 new options
exercisable at GBP0.0011 on or before 29 January 2021.
The options, which if exercised in their entirety, will result
in a cash inflow to the Company of GBP125,000 (A$224,901). The
proceeds from such conversion of options will be applied to the
outstanding Series C Loan balance, which is fully drawn down.
Pursuant to an amendment agreement to the Series C loan of
GBPGBP125,000 loan announced on 30 October 2020, the loan repayment
date has been extended from 31 October 2020 to 31 December 2020.
All other terms remain the same and are extended to 31 December
2020.
NOTE 23 - FINANCIAL INSTRUMENTS (CONTINUED)
(d) Market Risk
Market risk is the risk that changes in market prices, such as
foreign exchange rates, interest rates and equity prices will
affect the Group's income or the value of its holdings of financial
instruments. The objective of market risk management is to manage
and control market risk exposures within acceptable parameters,
while optimising the return.
i) Currency risk
An entity is exposed to currency risk on sales and purchases
that are denominated in a currency other than the functional
currency of the entity. The currencies giving rise to this risk are
the United States dollar (USD), Indian rupee (INR) and British
pound (GBP).
The amounts in the table below represent the Australian dollar
equivalent of balances in the Oilex Group Entities that are held in
a currency other than the functional currency in which they are
measured in that Group Entity. The exposure to currency risk at
balance date was as follows:
2020 2019
---------------------------
USD INR GBP USD INR GBP
In equivalents $ $
of Australian dollar $ $ $ $
--------------------------- --------- ---------- ---------- -------- ---------- --------
Cash and cash equivalents 1,591 67,746 20,346 20,095 139,811 24,467
Trade and other
receivables (1) 267,162 3,136,248 - 229,196 3,219,109 -
Trade and other
payables (29,971) (403,585) (128,669) (3,978) (312,161) (4,665)
Loans - - (522,198) - - -
--------- ---------- ---------- -------- ---------- --------
Net balance sheet
exposure 238,782 2,800,409 (630,521) 245,313 3,046,759 19,802
--------- ---------- ---------- -------- ---------- --------
(1) Trade and other receivables of the joint operation is before any impairment and provisions.
The following significant exchange rates applied during the
year:
Average Rate Reporting Date Spot Rate
AUD 2020 2019 2020 2019
----- --------- --------- ------------- ------------
USD 0.6714 0.7156 0.6863 0.7013
INR 48.5957 50.5060 51.8000 48.4100
GBP 0.5329 0.5527 0.5586 0.5535
----- --------- --------- ------------- ------------
Foreign Currency Sensitivity
A 10% strengthening/weakening of the Australian dollar against
the following currencies at 30 June would have (increased)/
decreased the loss by the amounts shown below. This analysis
assumes that all other variables, in particular interest rates,
remain constant. The analysis is performed on the same basis for
2019.
2020 2019
$ $
---------- ----------
10% Strengthening
United States dollars (USD) 23,274 24,351
Indian rupees (INR) 290,819 304,676
British pounds (GBP) 63,052 1,980
10% Weakening
United States dollars (USD) (23,274) (24,351)
Indian rupees (INR) (290,819) (304,676)
British pounds (GBP) (63,052) (1,980)
NOTE 23 - FINANCIAL INSTRUMENTS (CONTINUED)
(d) Market Risk (continued)
ii) Interest rate risk
At the reporting date the interest rate profile of the Group's
interest-bearing financial instruments was:
Carrying Amount
2020 2019
$ $
--------- ----------
Fixed Rate Instruments
Financial assets (short-term deposits
included in trade receivables) 50,000 100,000
(769,555
Financial liabilities (borrowings) ) (563,955)
Variable Rate Instruments
Financial assets (cash and cash equivalents) 173,816 357,970
--------- ----------
Cash Flow Sensitivity Analysis for Variable Rate Instruments
An increase of 100 basis points in interest rates at the
reporting date would have decreased the loss by the amounts shown
below. A decrease of 100 basis points in interest rates at the
reporting date would have had the opposite impact by the same
amount. This analysis assumes that all other variables, in
particular foreign currency rates, remain constant. The analysis is
performed on the same basis for 2019.
2020 2019
$ $
------ ------
Impact on profit or loss 1,738 3,580
------ ------
iii) Other market price risks
At 30 June 2020, the Group had no financial instruments with
exposure to other price risks (2019: $nil).
Equity Price Sensitivity
At 30 June 2020, the Group had no exposure to equity price
sensitivity (2019: $nil).
(e) Capital Risk Management
The Board's policy is to maintain a strong capital base so as to
maintain investor, creditor and market confidence and to sustain
future development of the business. The capital structure of the
Group consists of equity attributable to equity holders of the
Company, comprising issued capital, reserves and accumulated losses
as disclosed in the consolidated statement of changes in
equity.
(f) Fair Values of Financial Assets and Liabilities
The net fair values of financial assets and liabilities of the
Group approximate their carrying values. The Group has no
off-balance sheet financial instruments, and no amounts are
offset.
This section provides information on items which are required to
be disclosed to comply with Australian Accounting Standards, other
regulatory pronouncements and the Corporations Act 2001.
NOTE 24 - SHARE-BASED PAYMENTS
Share-based Payments Expense Shares
The following equity settled share-based payment transactions
have been recognised in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income:
2020 2019
$ $
------ --------
Shares and rights - equity settled
Non-Executive Directors - remuneration shares (1) - 55,422
Technical and administrative contractors - 55,513
Total share-based payments expense - 110,935
------ --------
(1) At the Annual General Meeting held on 29 November 2018, the
shareholders of the Company approved the issue of shares in lieu of
cash for part of the remuneration for the Non-Executive Directors.
The Directors have also agreed to receive part of their Directors
fees in the form of the Company's shares in lieu of cash payments
for the period from 1 November 2018 to 31 October 2019, in order to
conserve the cash reserves of the Company. Similar shareholder
approval was also received at the Annual General Meeting held on 27
November 2019 for the period from 1 November 2019 to 31 October
2020.
In accordance with the ASX waiver granted 22 October 2019, the
Company advised that the number of remuneration shares that were
issued to directors for the year ended 30 June 2020 totalled nil
(2019 11,437,407) and the percentage of the Company's issued
capital represented by these remuneration shares was nil% (2018
0.44%).
The Non-Executive directors were entitled to the issue of
10,399,814 remuneration shares during the financial year ended 30
June 2020. These remuneration shares shall be issued in the next
financial year.
As at 30 June 2020, the accrued non-executive director fees,
being remuneration shares not yet issued totalled $34,908 (2019:
$12,607).
Unlisted Options
At 30 June 2020, the terms and conditions of unlisted options
granted by the Company to directors, employees, financiers and
advisors are as follows, whereby all options are settled by
physical delivery of shares:
Contractual Life
Grant Date Number of Instruments Vesting Conditions of Options
----------------- ---------------------- ------------------- -----------------
Key Management Personnel
Nil
Other Employees
Nil
Financiers and Advisors
19 December
2018 6,666,667 Upon granting 2 years
30 September Upon granting
2019 11,842,105 2 years
30 October Upon granting
2019 2,960,526 2 years
3 February Upon granting
2020 166,666,667 6 months
19 May 2020 115,727,273 Upon granting 10 weeks
19 May 2020 204,545,455 Upon granting 13 months
----------------------
Total Options 508,408,693
----------------------
Subsequent to reporting date, no options have been exercised;
however, the 166,666,667 and 115,727,273 options have lapsed.
Accounting Policy
Options allow directors, employees and advisors to acquire
shares of the Company. The fair value of options granted to
employees is recognised as an employee expense with a corresponding
increase in equity. The fair value is measured at grant date and
spread over the period during which the employees become
unconditionally entitled to the options. The fair value of the
options granted is measured using the Black-Scholes Model, taking
into account the terms and conditions upon which the options were
granted. The amount recognised as an expense is adjusted to reflect
the actual number of share options that vest except where
forfeiture is only due to share prices not achieving the threshold
for vesting.
NOTE 24 - SHARE-BASED PAYMENTS (CONTINUED)
Options may also be provided as part of consideration for
services by brokers and underwriters. Any unlisted options issued
to the Company's AIM broker are treated as a capital raising
cost.
When the Group grants options over its shares to employees of
subsidiaries, the fair value at grant date is recognised as an
increase in the investments in subsidiaries, with a corresponding
increase in equity over the vesting period of the grant.
The number and weighted average exercise prices (WAEP) of
unlisted share options are as follows:
WAEP Number WAEP Number
2020 2020 2019 2019
------- --------------
Outstanding at 1 July 161,220,442 $0.004 $0.005 77,441,666
Lapsed during the year (215,218,662) $0.004 $0.35 (275,000)
Exercised during the year (124,060,150) $0.003 $0.004 (100,190,999)
Granted during the year
* Granted to Brokers and Financial Advisers (1) 14,802,631 $0.004 $0.005 16,140,351
* Series A Loan Options (2)(3) 124,060,150 $0.003 $0.004 91,666,666
* Series B Loan Options (3) 176,392,160 $0.003 $0.004 76,437,758
* Series C Loan Options (3) 59,523,810 $0.004 - -
* Series D Loan Options (3) 311,688,312 $0.003 - -
Outstanding at 30 June 508,408,693 $0.003 $0.004 161,220,442
-------------- ------- ------- --------------
Exercisable at 30 June 508,408,693 $0.003 $0.004 161,220,442
-------------- ------- ------- --------------
The unlisted options outstanding at 30 June 2020 have an
exercise price in the range of $0.002 to $0.004 (2019: $0.004 to
$0.006) and a weighted average remaining contractual life of 0.5
years (2019: 0.2 years).
The fair value of unlisted options is calculated at the date of
grant using the Black-Scholes Model. Expected volatility is
estimated by considering historical volatility of the Company's
share price over the period commensurate with the expected
term.
(1) The following factors and assumptions were used to determine
the fair value of 14,802,631 options issued to brokers and
financial advisors during the year.
Price of Risk Free
2020 Vesting Fair Value Exercise Shares on Expected Interest Dividend
Grant Date Date Expiry Date Per Option Price Grant Date Volatility Rate Yield
30 Sept
2019 21 Oct 2019 21 Oct 2019 $0.004 $0.004 $0.005 133.61% 0.75% -
30 Oct 2019 5 Nov 2019 21 Oct 2019 $0.004 $0.004 $0.004 133.61% 0.75% -
(2) 124,060,150 Series A loan options were exercised during the
period.
(3) The fair value equity component of the 124,060,150 Series A,
176,392,160 Series B, 59,523,840 Series C, and 311,688,312 Loan
Options has been determined using an implied effective interest
rate of 18% pa (effective interest rate on a similar borrowing
without an equity component.. At loan drawdown, this amount is
recognised in the Loan Option Reserve as the loans have been
recognised as convertible notes.
For further information refer to Note 15: Borrowings.
NOTE 25 - PARENT ENTITY DISCLOSURE
As at, and throughout, the financial year ended 30 June 2020 the
parent entity of the Group was Oilex Ltd.
2020 2019
$ $
Result of the parent entity
Loss for the year (3,812,707) (3,382,300)
(275, 240
Other comprehensive income/(loss) ) 143,085
-------------- --------------
Total comprehensive loss for the
year (4,087,947) (3,239,215)
-------------- --------------
Financial position of the parent
entity at year end
Current assets 224,271 1,164,081
Total assets 5,325,470 5,995,034
Current liabilities 1,613,752 1,160,603
Total liabilities 3,863,201 3,361,943
Net assets 1,462,269 2,633,091
-------------- --------------
Total equity of the parent entity
comprising of:
Issued capital 179,254,814 176,502,200
Option reserve 35,404 36,485
Loans Options Reserve 69,202 88,740
Foreign currency translation reserve 4,776,928 5,052,168
Accumulated losses (182,674,079) (179,046,502)
-------------- --------------
Total equity 1,462,269 2,633,091
-------------- --------------
Parent Entity Contingencies
The Directors are of the opinion that provisions are not
required in respect of the following matters, as it is not probable
that a future sacrifice of economic benefits will be required or
the amount is not capable of reliable measurement.
Oilex Ltd has issued a guarantee in relation to corporate credit
cards. The bank guarantee amounts to $50,000. An equal amount is
held in cash and cash equivalents as security by the bank. (2019:
$100,000).
Parent entity capital commitments for acquisition of property
plant and equipment
Oilex Ltd had no capital commitments as at 30 June 2020 (2019:
Nil).
Parent entity guarantee (in respect of debts of its
subsidiaries)
On 7 November 2006, Oilex Ltd issued a Deed of Parent Company
Performance Guarantee in relation to the Production Sharing
Contract entered into with the Timor Sea Designated Authority dated
15 November 2006.
Oilex Ltd has issued no other guarantees in respect of debts of
its subsidiaries.
NOTE 26 - AUDITORS' REMUNERATION
2020 2019
$ $
Audit and review services
Auditors of the Company - PKF Perth (2019:KPMG)
Audit and review of financial reports 50,000 81,400
Audit of Joint Operations operated by Oilex Ltd
Operator proportion only (KPMG Australia) 414 414
Audit and review of financial reports (KPMG related practices) 22,687 20,656
------- --------
73,101 102,470
Other Auditors
Audit and review of financial reports (India Statutory) 5,821 5,972
------- --------
78,922 108,442
Other services
Auditors of the Company - PKF Perth (2019: KPMG)
Taxation compliance services 8,389 13,213
Taxation compliance services (KPMG related practices) - 6,987
------- --------
8,389 20,200
Other Auditors
Taxation compliance services (India Statutory) 7,451 5,255
------- --------
15,840 25,455
------- --------
PKF Perth were appointed as auditors of Oilex Ltd by its
shareholders at a General Meeting convened on 30 June 2020.
NOTE 27 - LEASES
Short-term leases and lease of low value assets
2020 2019
$ $
------ -------
Within one year 5,126 27,211
One year or later and no later than five - -
years
------ -------
5,126 27,211
------ -------
Lease rentals are payable as follows:
During the 2020 financial year, the Group leased its head office
premises at Level 2, 11 Lucknow Place, West Perth, Australia. The
lease commenced on 1 June 2019 for a six-month period; with expiry
on 30 November 2019. Thereafter, the Group had the option of a
month by month lease extension subject to lessor approval.
From 1 July 2020, the Group relocated its head office premises
to Level 1, 11 Lucknow Place, West Perth, Australia. The lease
commenced on 1 July 2020 on a monthly rolling basis, subject to 30
days notice to terminate.
2020 2019
$ $
-------- --------
Expenses related to short-term leases 76,104 -
Operating lease rentals expensed during the financial year - 102,788
-------- --------
The Group leases office premises in Gandhinagar (India). The
current lease had a three year term, commencing 16 October 2016;
continuing thereafter on a monthly rolling basis. On 1 July 2020,
the lease was renegotiated and extended for a 12 month period to 30
June 2021.
Accounting Policy
The Group has elected not to recognise right-of-use assets and
lease liabilities for leases of low-value assets and short-term
leases, including IT equipment. The Group recognises the lease
payments associated with these leases as an expense on a
straight-line basis over the lease term.
NOTE 28 - PROVISIONS and CONTINGENT LIABILITIES
Contingent Liabilities at Reporting Date
The Directors are of the opinion that provisions (except as
noted below) are not required in respect of these matters, as it is
not probable that a future sacrifice of economic benefits will be
required or the amount is not capable of reliable measurement.
Guarantees
Oilex Ltd has issued guarantees in relation to the corporate
credit cards. The bank guarantees amount to $50,000 (2019:
$100,000).
Termination Penalty
Subsequent to year end the termination penalty has been settled
and this is detailed in note 29 to the financial report. The
history of this contingent liability is as follows:
In October 2018, the Company announced the Autoridade Nacional
Do Petroleo E Minerais (ANPM) had commenced arbitration proceedings
against Oilex and its joint venture partners, in regard to the JPDA
Production Sharing Contract (PSC).
On 16 August 2019, the Company announced that the JPDA joint
venture had lodged a counterclaim against the ANPM for the amount
US$23.3 million (plus interest) as damages arising from the
wrongful termination of the PSC.
During the March 2020 quarter, the arbitration panel dismissed
ANPM's application to increase their claim against the joint
venture from A$17.0 million to US$22.6 million (plus interest). The
arbitration hearing, which was scheduled to commence on 10 February
2020, was subsequently suspended while the parties continue their
commercial settlement negotiations.
During the period, the Group has increased the provision by
USD$200,000 to USD$800,000 in relation to this matter
(30 June 2019: USD$600,000).
NOTE 29 - SUBSEQUENT EVENTS
a) The impact of the Coronavirus (COVID-19) pandemic is ongoing
and while it has been financially negative for the consolidated
entity up to 30 June 2020, it is not practicable to estimate the
potential impact, positive or negative, after the reporting date.
The situation is rapidly developing and is dependent on measures
imposed by the Australian and Indian Governments and other
countries, such as maintaining social distancing requirements,
quarantine, travel restrictions and any economic stimulus that may
be provided.
b) On 17 July 2020, the Company announced it has issued the
second and final tranche of 55,555,556 ordinary shares pursuant to
the placement first announced on 16 March 2020; and amended as
announced on 27 April 2020. The share issue was pursuant to an
equity capital raising to secure further funding of GBP0.25 million
(A$0.5 million) through the subscription of 277,777,778 new shares
at GBP0.009 per share (0.1792 AUD cents) per share .
The Company also announced:
-- the issue of 103,033,333 shares to advisors and consultants
in lieu of cash fees payable; and
-- further to the approval by shareholders at the annual general
meeting held on 30 June 2020 and the Company announcement on 15 May
2020, the Company issued the following unlisted options:
- Series B Loan Options 115,727,273 exercisable at GBP0.0011 on or before 31 July 2020
- Series D Loan Options 204,545,455 exercisable at GBP0.0011 on or before 30 June 2021.
c) On 27 July 2020, the Company announced that substantial
progress has been made towards the Company's strategic objective to
regain a participating interest in the West Kampar PSC in
Indonesia, which is expected to lead, subject to financing, to
recommencing production from the Pendalian Oilfield.
Following various meetings and correspondence with the
Government of Indonesia (GoI) and with the support of the Company's
local Indonesian partner, the GoI has advised that our Proposed
Direct Bid, through the Joint Study of the West Kampar Region, is
declared administratively complete and have recorded it as a
proposal for a Direct Offer through a Joint Study as stipulated in
ESDM Regulation No. 35 of 2008.
This confirmation from the GoI, which is exclusive to Oilex,
provides a pathway to conduct the Joint Study on the proposed
development of West Kampar which will then provide certain
preferential rights in the ultimate award of the West Kampar PSC by
the GoI. Oilex's interest in the study and ultimate potential award
of the PSC will be on a 50-50 joint basis with its local Indonesian
partner, PT Ephindo.
d) On 31 July 2020, the Company announced that it has taken
further steps to strengthen its balance sheet as the Company
continues to navigate the impact of Covid-19 on its business and
global equity markets. In particular, the Company entered into an
amendment agreement to vary the repayment obligations for its
Series C (GBPGBP125,000) loan. Furthermore, the Company secured
additional equity investment of GBP0.25 million to increase its
working capital flexibility and reduce its financial debt
obligations.
NOTE 29 - SUBSEQUENT EVENTS (CONTINUED)
Amendment to Series C Loan Funding Agreement (GBP
GBP125,000)
Pursuant to the amendment agreement, the loan repayment date has
been extended from 1 August 2020 to 31 October 2020. All other
terms remain the same and are extended to 31 October 2020, except
for the issue of 113,636,364 new options exercisable at GBP0.0011
on or before 29 January 2021.
The options, which if exercised in their entirety, will result
in a cash inflow to the Company of GBP125,000 (A$224,901). The
proceeds from such conversion of options will be applied to the
outstanding Series C Loan balance, which is fully drawn down.
The issue of the new options is subject to shareholder approval
under ASX Listing Rule 7.1 on or before 30 November 2020. Failure
to secure shareholder approval will require immediate repayment of
the loan principal and accrued interest.
Equity Capital Raising
The Company has arranged an equity capital raising, through
Novum Securities Limited and to existing institutional
shareholders, to secure further funding of GBP0.25 million (A$0.5
million) through the subscription of 312,500,000 new shares at GBP
0.08 pence (0.144 AUD cents) per share.
Funds raised from the subscription are intended to be applied
towards increasing the Company's working capital base and debt
reduction The additional funding will support the Company's
initiative to implement the settlement with GSPC, which has been
delayed by the impact from Covid-19.
On 10 August 2020, the Company announced that it has issued the
312,500,000 shares. Pursuant to advisory agreements with Novum, the
Company also issued 15,000,000 unlisted options exercisable at GBP
0.08 pence on or before 12 August 2022 upon the completion of the
capital raise.
e) On 7 August 2020, the Company, in its capacity as Operator,
on behalf of the Joint Venture Participants in Joint Petroleum
Development Area ("JPDA") 06-103 Production Sharing Contract
("PSC") in East Timor announced it had executed a Deed of
Settlement and Release (Deed) with the Autoridade Nacional Do
Petroleo E Minerais ("ANPM") to terminate the ongoing arbitration
proceedings arising from the termination of the PSC by the ANPM in
2015 and settle all claims and counterclaims between the
parties.
The execution of the Deed sees an amicable conclusion to the
arbitration proceedings, as announced in October 2018, where Oilex
and its joint venture partners in the PSC were subject to a penalty
claim of US$17 million (plus interest) on a joint and several
basis. Oilex is the Operator of the PSC on behalf of the joint
venture.
Under the terms of the Deed, Oilex has committed to a settlement
of US$800,000 payable in the 2021 and 2022 financial years, which
has been fully provided for at 30 June 2020. In addition, the
Company has entered into an unsecured loan facility agreement for
US$800,000 with two of its joint venture partners to fund the
settlement. The Deed further provides the Company with the option,
at its sole discretion, to extend the settlement payments into the
2023-24 financial year.
f) On 14 September 2020, the Company announced that it has
agreed to amend the Share Purchase Agreement (SPA) with Armour
Energy Limited (Armour), as announced on 15 June 2020, for the
proposed sale of all of its interests in the Cooper-Eromanga Basin
(Proposed Transaction). Pursuant to the SPA, Armour will acquire
100% of the issued capital of CoEra Limited (CoEra), a wholly owned
Company subsidiary which holds all of Oilex's interests in the
Cooper-Eromanga Basin. The amendments:
-- extend the completion date from 15 September 2020 until 15
October 2020 to enable Armour to seek its shareholder approval
pursuant to ASX Listing Rule 7, with such shareholder meeting
scheduled for September 18 2020, and allow additional time to
satisfy the Conditions Precedent;
-- amend the date upon which Armour pays to Oilex the past costs
of $125,000 to within 5 Business Days after receipt of Armour's
above shareholder approval; and
-- reduce the timeframe for the Tranche 2 share adjustment from
90 days to 60 days from completion.
On 15 October 2020, the Company announced the completion of the
sale of all its interests in the Cooper-Eromanga Basins to Armour
Energy Limited.
g) Pursuant to an amendment agreement to the Series C loan of
GBPGBP125,000 loan announced on 30 October 2020, the loan repayment
date has been extended from 31 October 2020 to 31 December 2020.
All other terms remain the same and are extended to 31 December
2020.
Other than the above disclosure, there has not arisen in the
interval between the end of the financial year and the date of this
report an item, transaction or event of a material and unusual
nature likely, in the opinion of the Directors of the Company, to
affect significantly the operations of the Group, the results of
those operations, or the state of affairs of the Group, in future
financial years.
(1) In the opinion of the Directors of Oilex Ltd (the Company):
(a) the consolidated financial statements and notes thereto, and
the Remuneration Report in the Directors' Report, set out on pages
31 to 74, are in accordance with the Corporations Act 2001,
including:
i) giving a true and fair view of the Group's financial position
as at 30 June 2019 and of its performance for the financial year
ended on that date; and
ii) complying with Australian Accounting Standards and the Corporations Regulations 2001 ; and
(a) there are reasonable grounds to believe that the Company and
Group will be able to pay its debts as and when they become due and
payable.
(2) The Directors have been given the declarations required by
Section 295A of the Corporations Act 2001 from the Managing
Director and Chief Financial Officer for the financial year ended
30 June 2019.
(3) The Directors draw attention to note 2(a) to the
consolidated financial statements, which includes a statement of
compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors.
Mr Jonathan Salomon
Interim Chairman and Managing Director Mr Mark Bolton
Executive Director and Company
Secretary
West Perth
Western Australia
31 October 2020
INDEPENT AUDITOR'S REPORT
TO THE MEMBERS OF OILEX LTD
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Oilex Ltd
(the "Company"), which comprises the consolidated statement of
financial position as at 30 June 2020, the consolidated statement
of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of
cash flows for the year then ended, notes comprising a summary of
significant accounting policies and other explanatory information,
and the Directors' Declaration of the Company and the consolidated
entity comprising the Company and the entities it controlled at the
year's end or from time to time during the financial year.
In our opinion the accompanying financial report of Oilex Ltd is
in accordance with the Corporations Act 2001, including:
i) Giving a true and fair view of the consolidated entity's
financial position as at 30 June 2020 and of its performance for
the year ended on that date; and
ii) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing
Standards. Our responsibilities under those standards are further
described in the Auditor's Responsibilities for the Audit of the
Financial Report section of our report.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Emphasis of Matter - Material Uncertainty related to G oing
Concern
Without modifying our opinion, we draw attention to Note 2 (c)
in the financial report, which indicates that the consolidated
entity incurred a loss of $5,841,096 (2019: $3,118,121) and
operating cash outflows of $2,837,661 (2019: $2,962,563) during the
year e nded 30 June 2020. These conditions indicate the existence
of a material uncertainty that may cast significant doubt about the
consolidated entity's ability to continue as a going concern and
therefore, the consolidated entity may be unable to realise its
assets and discharge its liabilities in the normal course of
business.
The financial report of the consolidated entity does not include
any adjustments in relation to the recoverability and
classification of recorded asset amounts or to the amounts and
classification of liabilities that might be necessary should the
consolidated entity not continue as going concern.
Level 4, 35 Havelock Street, West Perth, WA 6005
PO Box 609, West Perth, WA 6872
T: +61 8 9426 8999 F: +61 8 9426 8900 www.pkfperth.com.au
PKF Perth is a member firm of the PKF International Limited
family of legally independent firms and does not accept any
responsibility or liability for the actions or inactions of any
individual member or correspondent firm or firms.
Liability limited by a scheme approved under Professional
Standards Legislation.
Independence
We are independent of the consolidated entity in accordance with
the auditor independence requirements of the Corporations Act 2001
and the ethical requirements of the Accounting Professional and
Ethical Standards Board's APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the code) that are
relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance
with the Code.
Key Audit Matters
A key audit matter is a matter that, in our professional
judgement, was of most significance in our audit of the financial
report of the current year. These matters were addressed in the
context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate
opinion on these matter. For each matter below, our description of
how our audit addressed the matter is provided in that context.
1 - Carrying value of mine development assets
Why significant How our audit addressed the
key audit matter
At 30 June 2020 the carrying Our work included, but was not
value of mine development assets limited to, the following procedures:
was $5,318,364 (2019: $6,495,590), * Reviewing management's detailed impairment model,
as disclosed in Note 9. including consideration of inputs and assumptions
Each year management is required used in the model and NPV calculation;
to assess whether there are
any indicators that the development
asset may be impaired. As the * Ensuring valid licenses are held and consider
impairment assessment requires impairment of assets for which no license is now
significant estimates and judgments held;
we have identified this as
a key audit matter.
Management's impairment assessment * Ensure that disclosures within the financial report
indicated that an impairment are accurate and that all estimates and judgements
was required on the Cambay made by management are included therein; and
Project. Therefore, an impairment
of $1,348,458 was recognised,
as a result the carrying amount * Discussing the impairment model with management and
dropped from $6,637,547 to obtaining management and the board's representations
$5,318,364, with a foreign accordingly.
exchange impact of $29,275.
2 - Carrying value of capitalised exploration expenditure
Why significant How our audit addressed the
key audit matter
As at 30 June 2020 the carrying Our work included, but was not
value of exploration and evaluation limited to, the following procedures:
assets was $581,322 (2019: * Conducting a detailed review of management's
$ 568,888), as disclosed in assessment of impairment trigger events prepared in
Note 8. accordance with AASB 6 including:
The consolidated entity's accounting
policy in respect of exploration
and evaluation expenditure o assessing whether the rights
is outlined in Note 8. Estimates to tenure of the areas of interest
and judgments in relation to remained current at reporting
capitalised exploration and date as well as confirming that
evaluation expenditure is detailed rights to tenure are expected
at Note 2 (f). to be renewed for tenements
that will expire in the near
Significant judgement is required: future;
o holding discussions with the
* in determining whether facts and circumstances Directors and management as
indicate that the exploration and evaluation assets to the status of ongoing exploration
should be tested for impairment in accordance with programmes for the areas of
Australian Accounting Standard AASB 6 Exploration for interest, as well as assessing
and Evaluation of Mineral Resources ("AASB 6"); and if there was evidence that a
decision had been made to discontinue
activities in any specific areas
* in determining the treatment of exploration and of interest; and
evaluation expenditure in accordance with AASB 6, and o obtaining and assessing evidence
the consolidated entity's accounting policy. In of the consolidated entity's
particular: future intention for the areas
of interest, including reviewing
future budgeted expenditure
o whether the particular areas and related work programmes;
of interest meet the recognition * considering whether exploration activities for the
conditions for an asset; and areas of interest had reached a stage where a
o which elements of exploration reasonable assessment of economically recoverable
and evaluation expenditures reserves existed;
qualify for capitalisation
for each area of interest.
* testing, on a sample basis, exploration and
evaluation expenditure incurred during the year for
compliance with AASB 6 and the consolidated entity's
accounting policy; and
assessing the appropriateness
of the related disclosures in
Note 2 (f), Note 8.
Other Information
Those charged with governance are responsible for the other
information. The other information comprises the information
included in the consolidated entity's annual report for the year
ended 30 June 2020, but does not include the financial report and
our auditor's report thereon.
Our opinion on the financial report does not cover the other
information and accordingly we do not express any form of assurance
conclusion thereon, with the exception of the Remuneration
Report.
In connection with our audit of the financial report, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there
is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this
regard.
Responsibilities of Directors' for the Financial Report
The Directors of the Company are responsible for the preparation
of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the
Corporations Act 2001 and for such internal control as the
Directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from
material misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible
for assessing the consolidated entity's ability to continue as a
going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the consolidated entity or to
cease operations, or have no realistic alternative but to do
so.
Auditor's Responsibilities for the Audit of the Financial
Report
Our objectives are to obtain reasonable assurance about whether
the financial report as a whole is free from material misstatement,
whether due to fraud or error, and to issue an auditor's report
that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of this financial
report.
As part of an audit in accordance with Australian Auditing
Standards, we exercise professional judgement and maintain
professional scepticism throughout the audit. We also:
-- Identify and assess the risks of material misstatement of the
financial report, whether due to fraud or error, design and perform
audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for
our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
-- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion
on the effectiveness of the consolidated entity's internal
control.
-- Evaluate the appropriateness of accounting policies used and
the reasonableness of accounting estimates and related disclosures
made by the Directors.
-- Conclude on the appropriateness of the Directors' use of the
going concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the consolidated
entity's ability to continue as a going concern. If we conclude
that a material uncertainty exists, we
are required to draw attention in our auditor's report to the
related disclosures in the financial report or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on
the audit evidence obtained up to the date of our auditor's report.
However, future events or conditions may cause the consolidated
entity to cease to continue as a going concern.
-- Evaluate the overall presentation, structure and content of
the financial report, including the disclosures, and whether the
financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
-- Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the consolidated entity to express an opinion on the consolidated
entity financial report. We are responsible for the direction,
supervision and performance of the consolidated entity audit. We
remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other
matters, the planned scope and timing of the audit and significant
audit findings, including any significant deficiencies in internal
control that we identify during our audit.
We also provide the Directors with a statement that we have
complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters
that may reasonably be thought to bear on our independence, and
where applicable, actions taken to eliminate threats or safeguards
applied.
From the matters communicated with the Directors, we determine
those matters that were of most significance in the audit of the
financial report of the current period and are therefore the key
audit matters. We describe these matters in our auditor's report
unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that
a matter should not be communicated in our report because the
adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion
We have audited the Remuneration Report included in the
Directors' Report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of Oilex Ltd for the
year ended 20 June 2020, complies with section 300A of the
Corporations Act 2001 .
Responsibilities
The Directors of the Company are responsible for the preparation
and presentation of the Remuneration Report in accordance with
section 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based on our audit
conducted in accordance with Australian Auditing Standards.
PKF Perth
Simon Fermanis
Partner
31 October 2020
West Perth,
Western Australia
Shareholder information as at 1 September 2020
Additional information required by the ASX Limited Listing Rules
and not disclosed elsewhere in this report is set out below.
The address of the principal registered office is Level 1, 11
Lucknow Place, West Perth, Western Australia 6005, Australia,
Telephone +61 8 9485 3200.
The name of the Company Secretary is Mr Mark Bolton.
Detailed schedules of exploration and production permits held
are included in the Business Review.
Directors' interest in share capital options are disclosed in
the Directors' Report.
There is currently no on-market buy-back in place.
Shareholding
(a) Distribution of share and option holdings:
Size of holding Number of Number of
shareholders unlisted option
holders
----------------- -------------- -----------------
1 - 1,000 291 -
1,001 - 5,000 462 -
5,001 - 10,000 301 -
10,001 - 100,000 718 -
100,001 and over 552 4
-------------- -----------------
Total 2,324 4
-------------- -----------------
(b) Of the above total 1,968 ordinary shareholders hold less than a marketable parcel.
(c) Voting Rights:
The voting rights attached to the ordinary shares are governed
by the Constitution.
On a show of hands every person present who is a Member or
representative of a Member shall have one vote and on a poll, every
Member present in person or by proxy or by attorney or duly
authorised representative shall have one vote for each share held.
None of the options give an entitlement to voting rights.
Register of Securities
The register of securities listed on the Australian Securities
Exchange is held by Link Market Services Limited, Level 12, 250 St
Georges Terrace, Perth, Western Australia 6000, Australia,
Telephone +61 8 9211 6670.
The register of securities listed on the Alternative Investment
Market of the London Stock Exchange is held by Computershare
Investor Services PLC, PO Box 82, The Pavilions, Bridgwater Road,
Bristol BS13 8AE, United Kingdom, Telephone +44 870 702 003.
Stock Exchange Listing
Quotation has been granted for all the ordinary shares of the
Company on all Member Exchanges of the Australian Securities
Exchange and the Alternative Investment Market of the London Stock
Exchange (AIM) and trades under the symbol OEX.
Unquoted Securities - Options
Total unlisted options on issue are 241,014,753.
The Managing Director, Mr Jonathan Salomon beneficially holds
14,987,013 shares as at 3 September 2020 which represents 0.36% of
shares.
Twenty Largest Shareholders
% of
issued
Shareholders Shares Held capital
---------------------------------------- ---------------------- ---------
Vidacos Nominees Limited <151004> 452,130,367 # 10.98
Aurora Nominees Limited <2288700> 234,831,866 # 5.70
Hargreaves Lansdown (Nominees) Limited
<15942> 221,815,107 # 5.38
Interactive Investor Services Nominees
Limited <SMKTNOMS> 212,285,428 # 5.15
Barclays Direct Investing Nominees
Limited <CLIENT1> 195,831,750 # 4.75
Rock (Nominees) Limited <CSHNET> 186,131,942 # 4.52
Hargreaves Lansdown (Nominees) Limited
<HLNOM> 152,406,582 # 3.70
HSDL Nominees Limited 150,929,584 # 3.66
Hargreaves Lansdown (Nominees) Limited
<VRA> 149,903,240 # 3.64
Vidacos Nominees Limited <FGN> 146,154,412 # 3.55
Interactive Investor Services Nominees
Limited <SMKTISAS> 140,678,572 # 3.41
J P Morgan Nominees Australia Pty
Limited 112,575,667 2.73
TH Investments Pte Ltd 111,111,111 2.70
Jim Nominees Limited <JARVIS> 87,628,492 # 2.13
Vidacos Nominees Limited <LGUKCLT> 80,116,084 # 1.94
Zeta Resources Limited 71,323,567 1.73
HSDL Nominees Limited <MAXI> 69,988,860 # 1.70
HSBC Client Holdings Nominee (UK)
Limited <731504> 67,827,614 # 1.65
HSDL Nominees Limited <LWMAXI> 65,274,636 # 1.58
HSDL Nominees Limited <SBUILD> 58,455,484 # 1.42
Total 1,152,229,634 27.97
Total issued shares as at 1 O ctober
202 0 4,119,629,999 100.00
---------------------------------------- ---------------------- ---------
Substantial shareholders as disclosed in the most recent
substantial shareholder notices given to the company are as
follows:
% of issued
Substantial Shareholders Shares Held capital
------------------------------------ ------------- ------------
Republic Investment Management Pte
Ltd 403,534,489 11.06
(#) Included within the total issued capital are 3,241,035,069
shares held on the AIM register. Included within the top 20
shareholders are certain AIM registered holders as marked.
Associated Natural gas found in contact with or dissolved in crude
Gas oil in the reservoir. It can be further categorised
as Gas-Cap Gas or Solution Gas.
------------ ---------------------------------------------------------------
Bbls Barrels of oil or condensate.
------------ ---------------------------------------------------------------
BCF Billion cubic feet of gas at standard temperature and
pressure conditions.
------------ ---------------------------------------------------------------
BCFE Billion cubic feet equivalent of gas at standard temperature
and pressure conditions.
------------ ---------------------------------------------------------------
BOE Barrels of Oil Equivalent. Converting gas volumes to
the oil equivalent is customarily done on the basis
of the nominal heating content or calorific value of
the fuel. Common industry gas conversion factors usually
range between 1 barrel of oil equivalent (BOE) = 5,600
standard cubic feet (scf) of gas to 1 BOE = 6,000 scf.
(Many operators use 1 BOE = 5,620 scf derived from
the metric unit equivalent 1 m(3) crude oil = 1,000
m(3) natural gas).
------------ ---------------------------------------------------------------
BOPD Barrels of oil per day.
------------ ---------------------------------------------------------------
GOR Gas to oil ratio in an oil field, calculated using
measured natural gas and crude oil volumes at stated
conditions. The gas/oil ratio may be the solution gas/oil,
symbol Rs; produced gas/oil ratio, symbol Rp; or another
suitably defined ratio of gas production to oil production.
Volumes measured in scf/bbl.
------------ ---------------------------------------------------------------
MMscfd Million standard cubic feet of gas per day.
------------ ---------------------------------------------------------------
MMbbls Million barrels of oil or condensate.
------------ ---------------------------------------------------------------
PSC Production Sharing Contract.
------------ ---------------------------------------------------------------
mD Millidarcy - unit of permeability.
------------ ---------------------------------------------------------------
MD Measured Depth.
------------ ---------------------------------------------------------------
Contingent Those quantities of petroleum estimated, as of a given
Resources date, to be potentially recoverable from known accumulations
by application of development projects, but which are
not currently considered to be commercially recoverable
due to one or more contingencies.
Contingent Resources may include, for example, projects
for which there are currently no viable markets, or
where commercial recovery is dependent on technology
under development, or where evaluation of the accumulation
is insufficient to clearly assess commerciality. Contingent
Resources are further categorised in accordance with
the level of certainty associated with the estimates
and may be sub-classified based on project maturity
and/or characterised by their economic status.
------------ ---------------------------------------------------------------
Prospective Those quantities of petroleum which are estimated,
Resources as of a given date, to be potentially recoverable from
undiscovered accumulations.
------------ ---------------------------------------------------------------
Reserves Reserves are those quantities of petroleum anticipated
to be commercially recoverable by application of development
projects to known accumulations from a given date forward
under defined conditions.
Proved Reserves are those quantities of petroleum,
which by analysis of geoscience and engineering data,
can be estimated with reasonable certainty to be commercially
recoverable, from a given date forward, from known
reservoirs and under defined economic conditions, operating
methods and government regulations.
Probable Reserves are those additional Reserves which
analysis of geoscience and engineering data indicate
are less likely to be recovered than Proved Reserves
but more certain to be recovered than Possible Reserves.
Possible Reserves are those additional reserves which
analysis of geoscience and engineering data indicate
are less likely to be recoverable than Probable Reserves.3P
Probabilistic methods
P90 refers to the quantity for which it is estimated
there is at least a 90% probability the actual quantity
recovered will equal or exceed.
P50 refers to the quantity for which it is estimated
there is at least a 50% probability the actual quantity
recovered will equal or exceed.
P10 refers to the quantity for which it is estimated
there is at least a 10% probability the actual quantity
recovered will equal or exceed.
------------ ---------------------------------------------------------------
SCF/BBL Standard cubic feet (of gas) per barrel (of oil).
------------ ---------------------------------------------------------------
TCF Trillion cubic feet.
------------ ---------------------------------------------------------------
Tight Gas The reservoir cannot be produced at economic flow rates
Reservoir or recover economic volumes of natural gas unless the
well is stimulated by a large hydraulic fracture treatment,
a horizontal wellbore, or by using multilateral wellbores.
------------ ---------------------------------------------------------------
Directors Stock Exchange Listings
Joe Salomon B APP SC (Geology), Oilex Ltd's shares are listed
GAICD under the code OEX on the
Managing Director and Interim Australian Securities Exchange
Chairman and on the Alternative Investment
Market of the London Stock
Mark Bolton B Business Exchange (AIM)
Executive Director and
Company Secretary AIM Nominated Adviser
Strand Hanson Limited
P Haywood 26 Mount Row
Non-Executive Director London W1K 3SQ
United Kingdom
P Schwarz
Non-Executive Director
Company Secretary AIM Broker
Mark Bolton B Business Novum Securities Limited
Executive Director and 10 Grosvenor Gardens
Company Secretary Belgravia
London SW1W 0DH
United Kingdom
Registered and Principal
Office Share Registries
Level One Link Market Services Limited
11 Lucknow Place (for ASX)
West Perth Western Australia Level 12
6005 250 St Georges Terrace
Australia Perth Western Australia 6000
Ph. +61 8 9485 3200 Australia
Fax +61 8 9485 3290
Computershare Investor Services
Postal Address PLC (for AIM)
PO Box 254 The Pavilions
West Perth Western Australia Bridgwater Road
6872 Bristol BS13 8AE
Australia United Kingdom
India Operations - Gandhinagar Auditors
Project Office PKF Perth
3rd Floor Radhe Arcade 'Block Level 5, 35 Havelock Street
C' West Perth Western Australia
Nr. Swagat Rainforest 1, 6005
Kudasan Australia
Gandhinagar Koba Road
Gandhinagar 382421
Gujarat, India
Website www.oilex.com.au
Email
oilex@oilex.com.au
Oilex Ltd
ACN 078 652 632
ABN 50 078 652 632
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FR FIFFFLTLFIII
(END) Dow Jones Newswires
November 02, 2020 02:00 ET (07:00 GMT)
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